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RLJ Lodging Trust Reports Fourth Quarter and Full Year 2019 Results

February 25, 2020 4:30 PM

- Achieved 2019 RevPAR growth of 0.7%

- Completed sale of approximately $724 million of non-core hotels

- Repurchased 7.2 million shares for approximately $124 million since fourth quarter 2018

BETHESDA, Md.--(BUSINESS WIRE)-- RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months and year ended December 31, 2019.

Fourth Quarter Highlights

Full Year Highlights

“2019 was a transformational year for RLJ as we successfully executed on our strategic plan to reshape our portfolio, enhance operating metrics, and improve our growth profile,” commented Leslie D. Hale, President and Chief Executive Officer. “As we enter 2020, our portfolio is uniquely positioned with tangible catalysts despite choppy fundamentals. We have a fortress balance sheet, which enables us to be nimble, and significant investment capacity, which allows us to pursue multiple value creation opportunities in both the near and long-term. RLJ is well positioned to create value in all phases of the lodging cycle.”

The prefix “Pro forma” as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Pro forma RevPAR and Pro forma Hotel EBITDA Margin are reported on a comparable basis and therefore exclude any hotels sold during the period and non-comparable hotels that were not open for operation or were closed for renovation for comparable periods. Explanations of EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release.

Pro forma RevPAR for the fourth quarter declined 0.5% from the comparable period in 2018. The Company's top performing markets were Louisville, Tampa, and Orlando with Pro forma RevPAR growth of 21.8%, 20.4%, and 9.0%, respectively. For the full year, the Company's top performing markets were Louisville, Austin, and Charleston with Pro forma RevPAR growth of 26.2%, 6.3%, and 5.4%, respectively.

Net Income for the fourth quarter was $34.9 million, an increase of $7.0 million from the comparable period in 2018.

Adjusted EBITDA for the fourth quarter was $96.3 million, a decrease of $17.6 million from the comparable period in 2018. For the three months ended December 31, 2018, adjusted EBITDA included $17.2 million from sold hotels.

Non-recurring items for the fourth quarter included an impairment loss of $13.5 million related to two hotel properties. The impairment loss is included in net income attributable to common shareholders but is excluded for the purpose of calculating Adjusted EBITDA and Adjusted FFO.

Financial and Operating Highlights

($ in millions, except ADR, RevPAR, and per share amounts)
(unaudited)

For the three months ended

December 31,

For the year ended

December 31,

2019

2018

Change

2019

2018

Change

Operational Overview: (1)

Pro forma ADR

$179.56

$181.72

(1.2)%

$182.96

$182.53

0.2%

Pro forma Occupancy

75.7%

75.2%

0.7%

79.0%

78.6%

0.4%

Pro forma RevPAR

$135.87

$136.62

(0.5)%

$144.51

$143.55

0.7%

Financial Overview:

Total Revenues

$347.1

$399.9

(13.2)%

$1,566.2

$1,761.2

(11.1)%

Pro forma Hotel Revenue

$342.1

$339.8

0.7%

$1,419.2

$1,398.8

1.5%

Net Income (2)

$34.9

$27.9

25.1%

$129.4

$190.9

(32.2)%

Pro forma Hotel EBITDA

$102.6

$106.0

(3.2)%

$450.7

$451.5

(0.2)%

Pro forma Hotel EBITDA Margin

30.0%

31.2%

(119) bps

31.8%

32.3%

(52) bps

Adjusted EBITDA (3)

$96.3

$113.8

(15.4)%

$462.5

$522.1

(11.4)%

Adjusted FFO

$69.3

$84.9

(18.5)%

$350.3

$395.7

(11.5)%

Adjusted FFO Per Diluted Common Share and Unit

$0.41

$0.49

(16.3)%

$2.03

$2.26

(10.2)%

Note:

(1) Pro forma statistics reflect the Company's 103 hotel portfolio as of February 25, 2020.

(2) Net Income for the three months ended December 31, 2019 and 2018, included $19.5 million and $5.1 million respectively, from sold hotels. Net Income for the year ended December 31, 2019 and 2018, included $18.1 million and $81.9 million respectively, from sold hotels.

(3) Adjusted EBITDA for the three months ended December 31, 2018 included $17.2 million from sold hotels. Adjusted EBITDA for the year ended December 31, 2019 and 2018, included $47.0 million and $106.2 million respectively, from sold hotels.

Fourth Quarter Disposition

On November 22, 2019, the Company sold five hotels in Austin, TX for a total sales price of $67.6 million. The sold portfolio included the following hotels:

Full Year Dispositions

For the year ended December 31, 2019, the Company sold 47 properties in five separate transactions consisting of:

Share Repurchases

For the three months ended December 31, 2019, the Company repurchased 0.7 million shares of its common stock at an average price per share of $16.52 for approximately $12.2 million.

For the year ended December 31, 2019, the Company repurchased 4.6 million shares of its common stock at an average price per share of $17.01 for approximately $77.8 million.

Subsequent to year-end, the Company repurchased approximately 1.5 million shares of its common stock for approximately $24.5 million.

The Company's existing repurchase program will expire on February 29, 2020. On February 14, 2020, the Company's Board of Trustees authorized a new one year $250.0 million share repurchase program that will expire on February 28, 2021.

Balance Sheet

As of December 31, 2019, the Company had $882.5 million of unrestricted cash on its balance sheet, $600.0 million in capacity on its revolving credit facility, and $2.2 billion of debt outstanding.

The Company’s ratio of net debt to Adjusted EBITDA for the year ended December 31, 2019, was 3.1x.

Dividends

The Company’s Board of Trustees declared a cash dividend of $0.33 per common share of beneficial interest in the fourth quarter. The dividend was paid on January 15, 2020, to shareholders of record as of December 31, 2019. For the year ended December 31, 2019, the Company declared total dividends of $1.32 per common share of beneficial interest.

The Company's Board of Trustees declared a preferred dividend of $0.4875 on its Series A cumulative convertible preferred shares. The dividend was paid on January 31, 2020, to shareholders of record as of December 31, 2019. For the year ended December 31, 2019, the Company declared total dividends of $1.95 per Series A cumulative convertible preferred share.

Full Year Impact from Dispositions

The following table shows the impact of the sale of 47 non-core hotels in 2019 on Adjusted FFO and Adjusted EBITDA.

As Reported

for the Year Ended

December 31, 2019

Impact of

Dispositions

As Adjusted

for the Year Ended

December 31, 2019

Adjusted FFO

$350.3M

($46.2M)

$304.1M

Adjusted EBITDA

$462.5M

($47.0M)

$415.5M

The Company has provided the pro forma operating results of its current 103 hotel portfolio for all four quarters and full year 2019 in the pro forma supplemental presentation posted to the Company's Investor Relations website at http://investor.rljlodgingtrust.com.

2020 Outlook

The Company’s outlook includes only hotels owned as of February 25, 2020. The outlook does not incorporate the refinancing of the $475 million senior unsecured notes or any incremental share repurchases, as both are future transactions that will be influenced by market dynamics at the time of execution. Future acquisitions or dispositions are also not assumed in the Company's outlook.

For the full year 2020, the Company anticipates:

Current Outlook

Pro forma RevPAR growth

-1.5% to +0.5%

Pro forma Hotel EBITDA Margin

29.4% to 31.0%

Pro forma Consolidated Hotel EBITDA

$413.0M to $443.0M

Corporate Cash General & Administrative Expense

$35.0M to $36.0M

Adjusted EBITDA

$378.0M to $408.0M

Adjusted FFO per Diluted Share and Unit

$1.62 to $1.77

Additionally, the Company's full year 2020 outlook includes:

The Company's outlook for Pro forma Hotel EBITDA margin at the midpoint includes an impact of 65 basis points from increases in insurance premiums and property taxes.

For the first quarter 2020, the Company expects Pro forma Consolidated Hotel EBITDA to be between $89.0 million to $94.0 million and Adjusted EBITDA to be between $83.0 million to $88.0 million.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on February 26, 2020, at 10:00 a.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust’s fourth quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company’s website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available online through the Investor Relations page of the Company’s website.

About Us

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward Looking Statements

The following information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are based, that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “may,” “will,” “will continue,” “intend,” “should,” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs, and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and the Company’s actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty, increased direct competition, changes in government regulations or accounting rules, changes in local, national, and global real estate conditions, declines in the lodging industry, seasonality of the lodging industry, risks related to natural disasters, such as earthquakes and hurricanes, hostilities, including future terrorist attacks or fear of hostilities that affect travel, the Company’s ability to obtain lines of credit or permanent financing on satisfactory terms, changes in interest rates, access to capital through offerings of the Company’s common and preferred shares of beneficial interest, or debt, the Company’s ability to identify suitable acquisitions, the Company’s ability to close on identified acquisitions and integrate those businesses, and inaccuracies of the Company’s accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled “Risk Factors,” “Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.

RLJ Lodging Trust
Non-GAAP and Accounting Commentary

Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDAre, (5) Adjusted EBITDA, (6) Hotel EBITDA, and (7) Hotel EBITDA Margin. These Non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of its operating performance. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, and Hotel EBITDA Margin as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.

Funds From Operations (“FFO”)

The Company calculates Funds from Operations ("FFO") in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company believes that the presentation of FFO provides useful information to investors regarding the Company’s operating performance and can facilitate comparisons of operating performance between periods and between real estate investment trusts (“REITs”), even though FFO does not represent an amount that accrues directly to common shareholders.

The Company’s calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. Additionally, FFO may not be helpful when comparing the Company to non-REITs. The Company presents FFO attributable to common shareholders, which includes unitholders of limited partnership interest (“OP units”) in RLJ Lodging Trust, L.P., the Company’s operating partnership, because the OP units are redeemable for common shares of the Company. The Company believes it is meaningful for the investor to understand FFO attributable to all common shares and OP units.

EBITDA and EBITDAre

Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") is defined as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sales of assets; and (3) depreciation and amortization. The Company considers EBITDA useful to an investor in evaluating and facilitating comparisons of its operating performance between periods and between REITs by removing the impact of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions.

In addition to EBITDA, the Company presents EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss (calculated in accordance with GAAP) excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated partnerships and joint ventures. The Company believes that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between REITs.

Adjustments to FFO and EBITDA

The Company adjusts FFO, EBITDA, and EBITDAre for certain items that the Company considers either outside the normal course of operations or extraordinary. The Company believes that Adjusted FFO, Adjusted EBITDA, and Adjusted EBITDAre provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income or loss, FFO, EBITDA, and EBITDAre, is beneficial to an investor’s understanding of its operating performance. The Company adjusts FFO, EBITDA, and EBITDAre for the following items:

Hotel EBITDA and Hotel EBITDA Margin

With respect to Consolidated Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and certain non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. The Company believes property-level results provide investors with supplemental information about the ongoing operational performance of the Company’s hotels and the effectiveness of third-party management companies.

Pro forma Consolidated Hotel EBITDA includes prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels, which has not been audited and excludes results from sold hotels as applicable. Pro forma Hotel EBITDA and Pro forma Hotel EBITDA Margin exclude the results of non-comparable hotels that were under renovation or not open for the entirety of the comparable periods. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Acquired hotels

For the years ended December 31, 2019 and 2018, respectively, no hotels were acquired.

Pro forma adjustments: Sold hotels

For the years ended December 31, 2019 and 2018, pro forma adjustments included the following sold hotels:

RLJ Lodging Trust
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(unaudited)

December 31,

2019

December 31,

2018

Assets

Investment in hotel properties, net

$

4,614,966

$

5,378,651

Investment in unconsolidated joint ventures

15,171

22,279

Cash and cash equivalents

882,474

320,147

Restricted cash reserves

44,686

64,695

Hotel and other receivables, net of allowance of $251 and $598, respectively

39,762

52,115

Lease right-of-use assets

144,358

—

Deferred income tax asset, net

51,447

44,629

Intangible assets, net

—

52,448

Prepaid expense and other assets

58,536

67,367

Total assets

$

5,851,400

$

6,002,331

Liabilities and Equity

Debt, net

$

2,195,707

$

2,202,676

Accounts payable and other liabilities

183,408

203,833

Advance deposits and deferred revenue

57,459

25,411

Lease liabilities

121,154

—

Accrued interest

3,024

7,913

Distributions payable

64,165

65,557

Total liabilities

2,624,917

2,505,390

Equity

Shareholders’ equity:

Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized

Series A Cumulative Convertible Preferred Shares, $0.01 par value, 12,950,000 shares authorized; 12,879,475 shares issued and outstanding, liquidation value of $328,266, at December 31, 2019 and 2018

366,936

366,936

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 169,852,246 and 174,019,616 shares issued and outstanding at December 31, 2019 and 2018, respectively

1,699

1,740

Additional paid-in capital

3,127,982

3,195,381

Accumulated other comprehensive (loss) income

(19,514

)

16,195

Distributions in excess of net earnings

(274,769

)

(150,476

)

Total shareholders’ equity

3,202,334

3,429,776

Noncontrolling interest:

Noncontrolling interest in consolidated joint ventures

14,065

11,908

Noncontrolling interest in the Operating Partnership

10,084

10,827

Total noncontrolling interest

24,149

22,735

Preferred equity in a consolidated joint venture, liquidation value of $45,544 at December 31, 2018

—

44,430

Total equity

3,226,483

3,496,941

Total liabilities and equity

$

5,851,400

$

6,002,331

Note:
The corresponding notes to the consolidated financial statements can be found in the Company’s Annual Report on Form 10-K.

RLJ Lodging Trust
Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(unaudited)

For the three months ended

December 31,

For the year ended

December 31,

2019

2018

2019

2018

Revenues

Operating revenues

Room revenue

$

286,364

$

334,933

$

1,317,085

$

1,473,047

Food and beverage revenue

44,348

47,668

177,499

205,518

Other revenue

16,362

17,297

71,608

82,659

Total revenues

347,074

399,898

1,566,192

1,761,224

Expenses

Operating expenses

Room expense

75,341

85,231

329,077

364,820

Food and beverage expense

32,662

35,707

134,206

157,156

Management and franchise fee expense

24,421

30,377

120,797

138,143

Other operating expense

84,369

96,784

373,130

417,110

Total property operating expenses

216,793

248,099

957,210

1,077,229

Depreciation and amortization

48,929

58,212

211,584

241,641

Impairment loss

13,500

—

13,500

—

Property tax, insurance and other

28,692

30,641

119,287

135,059

General and administrative

11,065

11,136

45,252

49,195

Transaction costs

438

(123

)

1,211

2,057

Total operating expenses

319,417

347,965

1,348,044

1,505,181

Other income

304

276

1,242

2,791

Interest income

3,785

1,552

8,720

4,891

Interest expense

(22,662

)

(22,870

)

(91,295

)

(101,643

)

Gain (loss) on sale of hotel properties, net

16,572

(2,016

)

(9,300

)

30,941

(Loss) gain on extinguishment of indebtedness, net

(214

)

(14

)

(214

)

5,996

Income before equity in income (loss) from unconsolidated joint ventures

25,442

28,861

127,301

199,019

Equity in income (loss) from unconsolidated joint ventures

1,245

(1

)

(1,673

)

636

Income before income tax benefit (expense)

26,687

28,860

125,628

199,655

Income tax benefit (expense)

8,225

(942

)

3,751

(8,793

)

Net income

34,912

27,918

129,379

190,862

Net (income) loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures

(70

)

(186

)

289

(17

)

Noncontrolling interest in the Operating Partnership

(159

)

(93

)

(487

)

(719

)

Preferred distributions - consolidated joint venture

—

—

(186

)

(1,483

)

Redemption of preferred equity - consolidated joint venture

—

(373

)

(1,153

)

—

Net income attributable to RLJ

34,683

27,266

127,842

188,643

Preferred dividends

(6,279

)

(6,279

)

(25,115

)

(25,115

)

Net income attributable to common shareholders

$

28,404

$

20,987

$

102,727

$

163,528

Basic per common share data:

Net income per share attributable to common shareholders

$

0.17

$

0.12

$

0.59

$

0.93

Weighted-average number of common shares

169,241,536

174,141,263

171,287,086

174,225,130

Diluted per common share data:

Net income per share attributable to common shareholders

$

0.17

$

0.12

$

0.59

$

0.93

Weighted-average number of common shares

169,376,667

174,194,141

171,388,476

174,316,405

Note:
The Statements of Comprehensive Income and corresponding notes to the consolidated financial statements can be found in the Company’s Annual Report on Form 10-K.

RLJ Lodging Trust
Reconciliation of Non-GAAP Measures
(Amounts in thousands, except per share data)
(unaudited)

Funds From Operations (FFO) Attributable to Common Shareholders and Unitholders

For the three months ended

December 31,

For the year ended

December 31,

2019

2018

2019

2018

Net income

$

34,912

$

27,918

$

129,379

$

190,862

Preferred dividends

(6,279

)

(6,279

)

(25,115

)

(25,115

)

Preferred distributions - consolidated joint venture

—

(373

)

(186

)

(1,483

)

Redemption of preferred equity - consolidated joint venture

—

—

(1,153

)

—

Depreciation and amortization

48,929

58,212

211,584

241,641

Impairment loss

13,500

—

13,500

—

(Gain) loss on sale of hotel properties, net

(16,572

)

2,016

9,300

(30,941

)

Noncontrolling interest in consolidated joint ventures

(70

)

(186

)

289

(17

)

Adjustments related to consolidated joint ventures (1)

(74

)

(74

)

(298

)

(307

)

Adjustments related to unconsolidated joint ventures (2)

(355

)

646

4,379

2,644

FFO

73,991

81,880

341,679

377,284

Transaction costs

438

(123

)

1,211

2,057

Loss (gain) on extinguishment of indebtedness, net

214

14

214

(5,996

)

Amortization of share-based compensation

2,751

2,529

11,459

12,251

Non-cash income tax (benefit) expense

(9,768

)

413

(6,818

)

6,584

Other expenses (3)

1,641

228

2,538

3,558

Adjusted FFO

$

69,267

$

84,941

$

350,283

$

395,738

Adjusted FFO per common share and unit-basic

$

0.41

$

0.49

$

2.04

$

2.26

Adjusted FFO per common share and unit-diluted

$

0.41

$

0.49

$

2.03

$

2.26

Basic weighted-average common shares and units outstanding (4)

170,014

174,915

172,060

174,999

Diluted weighted-average common shares and units outstanding (4)

170,149

174,968

172,161

175,090

Note:

(1)

Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint ventures.

(2)

Includes our ownership interest in the depreciation and amortization expense and loss on sale of the unconsolidated joint ventures.

(3)

Represents income and expenses outside of the normal course of operations, including debt modification and extinguishment costs, hurricane-related costs that were not reimbursed by insurance, unrealized gains and losses on certain discontinued cash flow hedges, activist shareholder costs, executive transition costs, receipts of pre-merger employee tax credits, and non-cash changes to pre-merger insurance reserves.

(4)

Includes 0.8 million weighted-average operating partnership units for the three months ended December 31, 2019 and 2018, respectively, and 0.8 million and weighted-average operating partnership units for the years ended December 31, 2019 and 2018, respectively.

RLJ Lodging Trust
Reconciliation of Non-GAAP Measures
(Amounts in thousands)
(unaudited)

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

For the three months ended

December 31,

For the year ended

December 31,

2019

2018

2019

2018

Net income

$

34,912

$

27,918

$

129,379

$

190,862

Depreciation and amortization

48,929

58,212

211,584

241,641

Interest expense, net

18,877

21,319

82,575

96,752

Income tax (benefit) expense

(8,225

)

941

(3,751

)

8,793

Adjustments related to unconsolidated joint ventures (1)

620

773

2,799

3,152

EBITDA

95,113

109,163

422,586

541,200

(Gain) loss on sale of hotel properties, net

(16,572

)

2,016

9,300

(30,941

)

Impairment loss

13,500

—

13,500

—

(Gain) loss on sale of unconsolidated joint ventures (2)

(851

)

—

2,075

—

EBITDAre

91,190

111,179

447,461

510,259

Transaction costs

438

(123

)

1,211

2,057

Loss (gain) on extinguishment of indebtedness, net

214

14

214

(5,996

)

Amortization of share-based compensation

2,751

2,529

11,459

12,251

Other expenses (3)

1,660

228

2,144

3,558

Adjusted EBITDA

96,253

113,827

462,489

522,129

General and administrative (4)

8,314

8,593

33,784

33,802

Other corporate adjustments (5)

84

1,354

2,182

2,478

Consolidated Hotel EBITDA

104,651

123,774

498,455

558,409

Pro forma adjustments - income from sold hotels

(2,058

)

(17,820

)

(47,777

)

(106,876

)

Pro forma Consolidated Hotel EBITDA

102,593

105,954

450,678

451,533

Pro forma adjustments - income from non-comparable hotels

—

—

—

—

Pro forma Hotel EBITDA

$

102,593

$

105,954

$

450,678

$

451,533

Note:

(1)

Includes our ownership interest of the interest, depreciation, and amortization expense of the unconsolidated joint ventures.

(2)

Includes our ownership interest in the loss on sale of the unconsolidated joint ventures associated with two resort hotel properties sold by the Company in Myrtle Beach, SC.

(3)

Represents income and expenses outside of the normal course of operations, including debt modification and extinguishment costs, hurricane-related costs that were not reimbursed by insurance, activist shareholder costs, executive transition costs, receipts of pre-merger employee tax credits, and non-cash changes to pre-merger insurance reserves.

(4)

Excludes amortization of share-based compensation and activist shareholder costs reflected in Adjusted EBITDA.

(5)

Other corporate adjustments include property-level adjustments and certain revenues and expenses at corporate entities. These items include interest income, amortization of deferred management fees, key money amortization, ground rent amortization, legal fees, revenues and expenses associated with non-hotel properties, income (loss) from unconsolidated entities, internal lease rent expense, and other items.

RLJ Lodging Trust
Reconciliation of Non-GAAP Measures
(Amounts in thousands)
(unaudited)

Pro forma Hotel EBITDA Margin

For the three months ended

December 31,

For the year ended

December 31,

2019

2018

2019

2018

Total revenue

$

347,074

$

399,898

$

1,566,192

$

1,761,224

Pro forma adjustments - revenue from sold hotels

(4,864

)

(59,623

)

(145,553

)

(358,664

)

Other corporate adjustments / non-hotel revenue

(141

)

(465

)

(1,464

)

(3,758

)

Pro forma Hotel Revenue

$

342,069

$

339,810

$

1,419,175

$

1,398,802

Pro forma Hotel EBITDA

$

102,593

$

105,954

$

450,678

$

451,533

Pro forma Hotel EBITDA Margin

30.0

%

31.2

%

31.8

%

32.3

%

RLJ Lodging Trust
Consolidated Debt Summary
(Amounts in thousands)
(unaudited)

Loan

Base Term

(Years)

Maturity (incl.

extensions)

Floating /

Fixed

Interest Rate

(1)

Balance as of

December 31, 2019 (2)

Secured Debt

Mortgage Loan - 1 hotel

10

Jun 2022

Fixed

5.25

%

$

30,760

Mortgage Loan - 2 hotels

10

Oct 2022

Fixed

4.95

%

55,836

Mortgage Loan - 1 hotel

10

Oct 2022

Fixed

4.95

%

32,095

Mortgage Loan - 1 hotel

10

Oct 2022

Fixed

4.94

%

28,351

Mortgage Loan - 7 hotels

3

Apr 2024

Floating (3)

3.33

%

200,000

Mortgage Loan - 3 hotels

5

Apr 2026

Floating (3)

2.88

%

96,000

Mortgage Loan - 4 hotels

5

Apr 2026

Floating (3)(5)

3.38

%

85,000

Weighted-Average / Secured Total

3.72

%

$

528,042

Unsecured Debt

Revolver (4)

4

May 2025

Floating

3.21

%

$

—

$150 Million Term Loan Maturing 2022

7

Jan 2022

Floating (3)

3.08

%

150,000

$400 Million Term Loan Maturing 2023

5

Jan 2023

Floating (3)

3.78

%

400,000

$225 Million Term Loan Maturing 2023

5

Jan 2023

Floating (3)

3.78

%

225,000

$400 Million Term Loan Maturing 2025

5

May 2025

Floating (3)(5)

2.92

%

400,000

Senior Unsecured Notes

10

Jun 2025

Fixed

6.00

%

474,888

Weighted-Average / Unsecured Total

4.15

%

$

1,649,888

Weighted-Average / Gross Debt

4.04

%

$

2,177,930

Note:

(1)

Interest rates as of December 31, 2019.

(2)

Excludes the impact of fair value adjustments and deferred financing costs.

(3)

The floating interest rate is hedged with an interest rate swap.

(4)

As of December 31, 2019, there was $600.0 million of capacity on the revolver, which is charged an unused commitment fee of 0.25% annually.

(5)

Reflects an interest rate swap of $83.8 million on the $85.0 million loan and $399.0 million on the $400.0 million term loan.

RLJ Lodging Trust
Pro forma Operating Statistics - Top 60 Assets
(unaudited)

Property

City/State

# of Rooms

Pro forma Consolidated
Hotel EBITDA

Marriott Louisville Downtown

Louisville, KY

620

$16,398

The Knickerbocker New York

New York, NY

330

12,781

San Francisco Marriott Union Square

San Francisco, CA

401

11,921

Wyndham San Diego Bayside

San Diego, CA

600

10,823

Wyndham Boston Beacon Hill

Boston, MA

304

9,670

The Mills House Wyndham Grand Hotel

Charleston, SC

216

9,630

Courtyard Austin Downtown Convention Center

Austin, TX

270

9,439

Embassy Suites San Francisco Airport - Waterfront

Burlingame, CA

340

8,916

Wyndham New Orleans - French Quarter

New Orleans, LA

374

8,274

Embassy Suites Los Angeles - International Airport South

El Segundo, CA

349

8,200

Embassy Suites San Francisco Airport - South San Francisco

South San Francisco, CA

312

8,128

DoubleTree Grand Key Resort

Key West, FL

216

7,873

Embassy Suites Fort Lauderdale 17th Street

Fort Lauderdale, FL

361

7,633

Wyndham Philadelphia Historic District

Philadelphia, PA

364

7,338

Courtyard San Francisco

San Francisco, CA

166

7,230

Courtyard Portland City Center

Portland, OR

256

7,155

Embassy Suites Mandalay Beach - Hotel & Resort

Oxnard, CA

250

7,134

Courtyard Waikiki Beach

Honolulu, HI

403

6,856

Embassy Suites Tampa Downtown Convention Center

Tampa, FL

360

6,749

Residence Inn Palo Alto Los Altos

Los Altos, CA

156

6,729

Hilton Garden Inn San Francisco Oakland Bay Bridge

Emeryville, CA

278

6,525

Renaissance Pittsburgh Hotel

Pittsburgh, PA

300

6,495

Hyatt House Emeryville San Francisco Bay Area

Emeryville, CA

234

6,304

Embassy Suites Deerfield Beach - Resort & Spa

Deerfield Beach, FL

244

6,030

Wyndham Santa Monica At the Pier

Santa Monica, CA

132

5,986

Fairfield Inn & Suites Washington DC Downtown

Washington, DC

198

5,811

Hyatt House Santa Clara

Santa Clara, CA

150

5,699

DoubleTree Suites by Hilton Austin

Austin, TX

188

5,642

Courtyard Charleston Historic District

Charleston, SC

176

5,605

Hyatt House San Jose Silicon Valley

San Jose, CA

164

5,325

Wyndham Houston - Medical Center Hotel & Suites

Houston, TX

287

5,219

Courtyard Chicago Downtown Magnificent Mile

Chicago, IL

306

5,077

Residence Inn Bethesda Downtown

Bethesda, MD

188

5,043

Embassy Suites Milpitas Silicon Valley

Milpitas, CA

266

4,985

Embassy Suites Atlanta - Buckhead

Atlanta, GA

316

4,851

Hyatt Centric Midtown Atlanta

Atlanta, GA

194

4,825

Marriott Denver South @ Park Meadows

Lone Tree, CO

279

4,577

Homewood Suites Washington DC Downtown

Washington, DC

175

4,566

Hyatt House San Diego Sorrento Mesa

San Diego, CA

193

4,563

Embassy Suites Irvine Orange County

Irvine, CA

293

4,561

Residence Inn Austin Downtown Convention Center

Austin, TX

179

4,547

DoubleTree Metropolitan Hotel New York City

New York, NY

764

4,328

Embassy Suites Orlando - International Drive South/Convention Center

Orlando, FL

244

4,290

Embassy Suites Los Angeles Downey

Downey, CA

220

4,243

Hilton Garden Inn New Orleans Convention Center

New Orleans, LA

286

4,206

Embassy Suites Dallas - Love Field

Dallas, TX

248

4,131

Hilton Cabana Miami Beach

Miami Beach, FL

231

4,099

Embassy Suites Boston Waltham

Waltham, MA

275

4,049

Hyatt Place Washington DC Downtown K Street

Washington, DC

164

4,025

Residence Inn National Harbor Washington DC

Oxon Hill, MD

162

3,989

Embassy Suites Minneapolis - Airport

Bloomington, MN

310

3,855

Renaissance Fort Lauderdale Plantation Hotel

Plantation, FL

250

3,853

Hyatt House San Ramon

San Ramon, CA

142

3,841

Embassy Suites Miami - International Airport

Miami, FL

318

3,810

Renaissance Boulder Flatiron Hotel

Broomfield, CO

232

3,808

Embassy Suites Phoenix - Biltmore

Phoenix, AZ

232

3,669

Marriott Denver Airport @ Gateway Park

Aurora, CO

238

3,615

Hilton Garden Inn Los Angeles Hollywood

Los Angeles, CA

160

3,445

Wyndham Pittsburgh University Center

Pittsburgh, PA

251

3,423

Hyatt Place Fremont Silicon Valley

Fremont, CA

151

3,290

Top 60 Assets

16,266

365,082

Other (43 Assets)

6,311

85,596

Total Portfolio

22,577

$450,678

Note: For the trailing twelve months ended December 31, 2019. Results reflect 100% of the financial results of three consolidated joint ventures and exclude the Chateau LeMoyne-French Quarter New Orleans, which is an unconsolidated hotel. Amounts in thousands, except rooms. The information has not been audited and is presented only for comparison purposes.

RLJ Lodging Trust
Pro forma Operating Statistics
(unaudited)

For the three months ended December 31, 2019 and 2018

# of

Hotels

Occupancy

ADR

RevPAR

Top Markets

2019

2018

Var

2019

2018

Var

2019

2018

Var

Northern California

12

79.0

%

80.4

%

(1.8

)%

$

228.13

$

222.84

2.4

%

$

180.18

$

179.22

0.5

%

Southern California

9

78.3

%

78.0

%

0.3

%

164.23

171.55

(4.3

)%

128.54

133.81

(3.9

)%

South Florida

8

81.1

%

81.4

%

(0.3

)%

169.33

169.12

0.1

%

137.35

137.58

(0.2

)%

New York City

5

92.7

%

92.1

%

0.6

%

257.82

274.52

(6.1

)%

239.06

252.92

(5.5

)%

Washington, DC

5

77.6

%

77.5

%

0.0

%

207.01

198.05

4.5

%

160.54

153.53

4.6

%

Chicago

13

68.0

%

67.6

%

0.6

%

135.74

136.42

(0.5

)%

92.26

92.19

0.1

%

Houston

9

65.4

%

66.2

%

(1.1

)%

133.16

140.41

(5.2

)%

87.09

92.89

(6.2

)%

Austin

3

74.3

%

73.8

%

0.7

%

222.36

214.67

3.6

%

165.23

158.47

4.3

%

Louisville

2

64.9

%

56.2

%

15.5

%

169.68

160.93

5.4

%

110.21

90.51

21.8

%

Denver

5

67.2

%

63.8

%

5.4

%

133.67

136.57

(2.1

)%

89.84

87.09

3.2

%

Other

32

74.3

%

73.7

%

0.7

%

162.57

164.26

(1.0

)%

120.72

121.13

(0.3

)%

Total

103

75.7

%

75.2

%

0.7

%

$

179.56

$

181.72

(1.2

)%

$

135.87

$

136.62

(0.5

)%

# of

Hotels

Occupancy

ADR

RevPAR

Service Level

2019

2018

Var

2019

2018

Var

2019

2018

Var

Focused-Service

58

73.5

%

74.0

%

(0.6

)%

$

171.69

$

171.45

0.1

%

$

126.27

$

126.82

(0.4

)%

Compact Full-Service

44

77.7

%

77.2

%

0.6

%

185.47

189.66

(2.2

)%

144.13

146.51

(1.6

)%

Full-Service

1

67.4

%

52.2

%

29.1

%

174.66

169.47

3.1

%

117.64

88.42

33.0

%

Total

103

75.7

%

75.2

%

0.7

%

$

179.56

$

181.72

(1.2

)%

$

135.87

$

136.62

(0.5

)%

# of

Hotels

Occupancy

ADR

RevPAR

Chain Scale

2019

2018

Var

2019

2018

Var

2019

2018

Var

Upper Upscale

34

75.1

%

73.5

%

2.2

%

$

174.60

$

176.23

(0.9

)%

$

131.06

$

129.44

1.2

%

Upscale

59

76.3

%

76.3

%

0.0

%

178.12

180.70

(1.4

)%

135.94

137.93

(1.4

)%

Upper Midscale

8

70.2

%

72.4

%

(3.1

)%

155.16

153.13

1.3

%

108.98

110.94

(1.8

)%

Other

2

83.7

%

86.3

%

(3.1

)%

352.66

356.93

(1.2

)%

295.15

308.12

(4.2

)%

Total

103

75.7

%

75.2

%

0.7

%

$

179.56

$

181.72

(1.2

)%

$

135.87

$

136.62

(0.5

)%

# of

Hotels

Occupancy

ADR

RevPAR

Flags

2019

2018

Var

2019

2018

Var

2019

2018

Var

Embassy Suites

21

76.5

%

76.3

%

0.3

%

$

166.99

$

170.09

(1.8

)%

$

127.82

$

129.85

(1.6

)%

Courtyard

14

76.4

%

75.7

%

0.9

%

182.87

180.19

1.5

%

139.67

136.34

2.4

%

Residence Inn

14

69.8

%

71.8

%

(2.7

)%

166.53

163.23

2.0

%

116.30

117.14

(0.7

)%

Wyndham

8

76.0

%

75.9

%

0.2

%

164.02

169.58

(3.3

)%

124.71

128.74

(3.1

)%

Hyatt House

7

80.7

%

82.1

%

(1.8

)%

192.68

195.35

(1.4

)%

155.44

160.41

(3.1

)%

Marriott

5

71.1

%

62.7

%

13.3

%

194.97

192.41

1.3

%

138.58

120.66

14.9

%

Fairfield Inn & Suites

5

70.7

%

75.0

%

(5.7

)%

162.03

157.24

3.0

%

114.61

117.96

(2.8

)%

Hilton Garden Inn

5

71.0

%

73.1

%

(2.8

)%

164.61

167.94

(2.0

)%

116.94

122.69

(4.7

)%

DoubleTree

4

91.3

%

90.1

%

1.4

%

220.10

232.08

(5.2

)%

201.05

209.16

(3.9

)%

SpringHill Suites

3

65.1

%

60.4

%

7.7

%

129.39

135.70

(4.6

)%

84.24

82.01

2.7

%

Hyatt Place

3

74.5

%

71.5

%

4.2

%

178.35

184.54

(3.4

)%

132.93

131.96

0.7

%

Renaissance

3

70.6

%

73.3

%

(3.7

)%

169.81

167.74

1.2

%

119.93

122.98

(2.5

)%

Hampton Inn

2

73.0

%

71.7

%

1.8

%

145.99

146.19

(0.1

)%

106.61

104.87

1.7

%

Homewood Suites

2

74.9

%

73.0

%

2.6

%

172.74

167.83

2.9

%

129.39

122.52

5.6

%

Hyatt

2

72.0

%

74.7

%

(3.6

)%

197.24

196.16

0.5

%

141.98

146.48

(3.1

)%

Hilton

1

78.2

%

75.5

%

3.6

%

173.52

185.12

(6.3

)%

135.65

139.76

(2.9

)%

Other

4

78.0

%

79.1

%

(1.4

)%

288.42

299.28

(3.6

)%

224.87

236.75

(5.0

)%

Total

103

75.7

%

75.2

%

0.7

%

$

179.56

$

181.72

(1.2

)%

$

135.87

$

136.62

(0.5

)%

Note: Results reflect 100% of the financial results of three consolidated joint ventures and exclude the Chateau LeMoyne-French Quarter New Orleans, which is an unconsolidated hotel. The information has not been audited and is presented only for comparison purposes.

RLJ Lodging Trust
Pro forma Operating Statistics
(unaudited)

For the year ended December 31, 2019 and 2018

# of

Hotels

Occupancy

ADR

RevPAR

Top Markets

2019

2018

Var

2019

2018

Var

2019

2018

Var

Northern California

12

84.1

%

83.3

%

0.9

%

$

237.97

$

229.81

3.6

%

$

200.19

$

191.52

4.5

%

Southern California

9

83.3

%

84.3

%

(1.2

)%

178.51

180.10

(0.9

)%

148.71

151.84

(2.1

)%

South Florida

8

82.3

%

85.1

%

(3.3

)%

178.37

178.47

(0.1

)%

146.82

151.93

(3.4

)%

New York City

5

90.1

%

90.1

%

0.0

%

230.65

235.99

(2.3

)%

207.71

212.52

(2.3

)%

Washington, DC

5

80.2

%

80.9

%

(0.9

)%

208.72

205.50

1.6

%

167.31

166.28

0.6

%

Chicago

13

72.9

%

70.8

%

3.0

%

138.96

143.23

(3.0

)%

101.31

101.38

(0.1

)%

Houston

9

69.4

%

69.8

%

(0.6

)%

139.77

144.89

(3.5

)%

96.96

101.10

(4.1

)%

Austin

3

77.7

%

74.3

%

4.6

%

221.85

218.27

1.6

%

172.34

162.08

6.3

%

Louisville

2

70.7

%

57.8

%

22.3

%

176.08

170.70

3.2

%

124.43

98.61

26.2

%

Denver

5

73.4

%

73.5

%

(0.1

)%

143.86

143.62

0.2

%

105.56

105.51

0.1

%

Other

32

77.2

%

77.3

%

(0.2

)%

167.13

166.39

0.4

%

129.01

128.70

0.2

%

Total

103

79.0

%

78.6

%

0.4

%

$

182.96

$

182.53

0.2

%

$

144.51

$

143.55

0.7

%

# of

Hotels

Occupancy

ADR

RevPAR

Service Level

2019

2018

Var

2019

2018

Var

2019

2018

Var

Focused-Service

58

77.7

%

77.6

%

0.1

%

$

175.24

$

175.00

0.1

%

$

136.23

$

135.86

0.3

%

Compact Full-Service

44

80.4

%

80.7

%

(0.3

)%

188.60

188.11

0.3

%

151.65

151.73

(0.1

)%

Full-Service

1

69.7

%

53.5

%

30.1

%

184.51

181.54

1.6

%

128.53

97.19

32.2

%

Total

103

79.0

%

78.6

%

0.4

%

$

182.96

$

182.53

0.2

%

$

144.51

$

143.55

0.7

%

# of

Hotels

Occupancy

ADR

RevPAR

Chain Scale

2019

2018

Var

2019

2018

Var

2019

2018

Var

Upper Upscale

34

78.0

%

77.4

%

0.8

%

$

184.10

$

182.34

1.0

%

$

143.59

$

141.15

1.7

%

Upscale

59

79.9

%

79.8

%

0.1

%

179.63

180.12

(0.3

)%

143.49

143.75

(0.2

)%

Upper Midscale

8

76.4

%

75.2

%

1.5

%

159.95

160.62

(0.4

)%

122.13

120.83

1.1

%

Other

2

81.7

%

81.0

%

0.9

%

297.55

296.90

0.2

%

242.99

240.35

1.1

%

Total

103

79.0

%

78.6

%

0.4

%

$

182.96

$

182.53

0.2

%

$

144.51

$

143.55

0.7

%

# of

Hotels

Occupancy

ADR

RevPAR

Flags

2019

2018

Var

2019

2018

Var

2019

2018

Var

Embassy Suites

21

79.6

%

80.4

%

(1.0

)%

$

176.80

$

176.24

0.3

%

$

140.67

$

141.63

(0.7

)%

Courtyard

14

79.6

%

78.5

%

1.3

%

182.35

181.64

0.4

%

145.09

142.67

1.7

%

Residence Inn

14

75.1

%

76.0

%

(1.2

)%

167.65

167.31

0.2

%

125.95

127.23

(1.0

)%

Wyndham

8

79.8

%

79.4

%

0.5

%

171.47

172.78

(0.8

)%

136.75

137.11

(0.3

)%

Hyatt House

7

84.2

%

85.9

%

(2.0

)%

202.75

199.33

1.7

%

170.74

171.26

(0.3

)%

Marriott

5

74.6

%

67.2

%

11.1

%

206.87

201.00

2.9

%

154.36

135.04

14.3

%

Fairfield Inn & Suites

5

79.0

%

78.3

%

0.9

%

166.01

165.14

0.5

%

131.14

129.31

1.4

%

Hilton Garden Inn

5

75.9

%

76.2

%

(0.3

)%

169.12

170.63

(0.9

)%

128.37

129.96

(1.2

)%

DoubleTree

4

91.0

%

90.2

%

1.0

%

205.39

210.81

(2.6

)%

186.95

190.07

(1.6

)%

SpringHill Suites

3

71.0

%

68.8

%

3.2

%

138.62

137.99

0.5

%

98.47

94.98

3.7

%

Hyatt Place

3

77.0

%

79.2

%

(2.7

)%

186.07

187.13

(0.6

)%

143.32

148.17

(3.3

)%

Renaissance

3

74.5

%

77.3

%

(3.7

)%

170.62

169.02

0.9

%

127.06

130.68

(2.8

)%

Hampton Inn

2

76.1

%

74.7

%

1.9

%

149.62

151.92

(1.5

)%

113.85

113.45

0.4

%

Homewood Suites

2

79.4

%

77.5

%

2.5

%

180.34

178.27

1.2

%

143.20

138.11

3.7

%

Hyatt

2

77.4

%

79.0

%

(2.1

)%

203.67

195.81

4.0

%

157.66

154.78

1.9

%

Hilton

1

75.1

%

81.2

%

(7.5

)%

193.01

200.42

(3.7

)%

145.01

162.79

(10.9

)%

Other

4

76.1

%

74.8

%

1.7

%

253.79

256.83

(1.2

)%

193.10

192.21

0.5

%

Total

103

79.0

%

78.6

%

0.4

%

$

182.96

$

182.53

0.2

%

$

144.51

$

143.55

0.7

%

Note: Results reflect 100% of the financial results of three consolidated joint ventures and exclude the Chateau LeMoyne-French Quarter New Orleans, which is an unconsolidated hotel. The information has not been audited and is presented only for comparison purposes.

Sean M. Mahoney, Executive Vice President and Chief Financial Officer – (301) 280-7774

For additional information or to receive press releases via email, please visit our website:

http://www.rljlodgingtrust.com

Source: RLJ Lodging Trust

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