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RLJ Lodging Trust Reports Second Quarter 2021 Results

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- Acquired the newly-built Hampton Inn & Suites Atlanta Midtown
- Issued $500 million of high yield bonds
- Open hotel occupancy of 61% and ADR of $142, representing ~75% of 2019

BETHESDA, Md., August 05, 2021--(BUSINESS WIRE)--RLJ Lodging Trust (the "Company") (NYSE: RLJ) today reported results for the three and six months ended June 30, 2021.

Transaction Highlights

  • Acquired the newly-built Hampton Inn & Suites Atlanta Midtown for $58.0 million

  • Issued $500.0 million of five-year senior notes at 3.750%

  • Amended corporate credit facilities to extend covenant waiver period and improve flexibility

  • Extended maturity of $100.0 million term loan from 2022 to 2024, including extension option

  • Sold two non-core hotels during the second quarter and three non-core hotels in the third quarter

Operating Highlights

  • Total portfolio achieved 57.9% occupancy and open hotels achieved 61.0% occupancy

  • Total revenue of $194.3 million

  • Net loss of ($52.2) million

  • Net loss per share of ($0.35)

  • Pro forma Hotel EBITDA of $49.9 million

  • Adjusted EBITDA of $43.6 million

  • Adjusted FFO per diluted common share and unit of $0.07

  • Maintain a strong balance sheet with approximately $658.0 million of unrestricted cash and over $1.0 billion of liquidity

"We were pleased with our outperformance during the second quarter, driven by strong leisure demand that materialized as anticipated, along with relative improvement in business transient and group demand, which allowed us to achieve another quarter of positive Adjusted EBITDA," commented Leslie D. Hale, President and Chief Executive Officer. "We are encouraged to see our operating trends accelerate so far in the third quarter, although we are monitoring the new COVID variants. We also made notable progress on a number of fronts, including further strengthening our balance sheet by executing an accretive $500 million bond offering, advancing our embedded value creation initiatives which will generate additional above cycle growth, and recycling capital by redeploying proceeds from non-core dispositions into a newly-built asset in the growth market of Atlanta. The combination of our strong liquidity position, compelling internal growth catalysts and a growing acquisition pipeline uniquely position us to outperform throughout this 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. 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.

Financial and Operating Highlights

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

(unaudited)

For the three months ended

June 30,

For the six months ended

June 30,

2021

2020

2021

2020

Operational Overview: (1)

Pro forma ADR

$142.11

$117.14

$132.37

$167.87

Pro forma Occupancy

57.9%

11.4%

50.4%

36.0%

Pro forma RevPAR

$82.22

$13.34

$66.71

$60.47

Financial Overview:

Total Revenues

$194,254

$32,591

$313,806

$298,073

Pro forma Hotel Revenue

$193,726

$31,660

$312,371

$295,338

Net Loss

($52,221)

($116,166)

($131,339)

($146,995)

Pro forma Hotel EBITDA

$49,939

($42,753)

$61,250

$8,373

Adjusted EBITDA (2)

$43,560

($50,521)

$47,151

($9,105)

Adjusted FFO

$11,295

($80,072)

($18,472)

($63,201)

Adjusted FFO Per Diluted Common Share and Unit

$0.07

($0.49)

($0.11)

($0.38)

Note:
(1) Pro forma statistics reflect the Company's 99 hotel portfolio as of June 30, 2021.
(2) Adjusted EBITDA for the three months ended June 30, 2021 and 2020, included $0.1 million from sold hotels. Adjusted EBITDA for the six months ended June 30, 2021 and 2020, included $0.9 million and ($0.3) million, respectively, from sold hotels.

Operational Update

As of June 30, 2021, the Company had 97 hotels open, representing 98% of the Company's portfolio. The Company's second quarter benefited from significant growth in demand as a result of the continuation of strong leisure demand and continued ramp-up of business transient and group demand. These improving trends, combined with the Company's continued emphasis on cost containment initiatives, led to a significant improvement in hotel-level cash flow. During the second quarter, the Company’s average monthly burn rate of approximately $2.0 million was significantly below the Company’s prior estimated range of $16.0 million to $20.0 million. Normalizing the $14.2 million semi-annual interest paid during June on the Senior Notes due 2025, the Company would have generated positive corporate cash flow during the second quarter. Assuming the current operating trends continue, the Company expects to generate positive corporate cash flow during each of the third and fourth quarters of 2021.

Acquisition

In early August, the Company completed the previously announced off-market acquisition of the newly-built, 186-room Hampton Inn & Suites Atlanta Midtown hotel for a purchase price of $58.0 million, or approximately $312,000 per key. The Company acquired this hotel with cash on hand, and expects this acquisition to be accretive to the Company's RevPAR, operating margins and growth profile.

Dispositions

During the second quarter, the Company completed the sale of the 130-room Residence Inn Chicago Naperville and the 78-room Residence Inn Indianapolis Fishers for total gross proceeds of $13.3 million.

Subsequent to the quarter end, the Company sold the 94-room Fairfield Inn & Suites Chicago Southeast Hammond, the 85-room Courtyard Chicago Southeast Hammond, and the 78-room Residence Inn Chicago Southeast Hammond for an aggregate sale price of $21.8 million. The Company expects to record a gain from these dispositions during the third quarter.

Balance Sheet

During the second quarter, the Company completed the offering of 3.750% senior notes due 2026, that was upsized to $500.0 million. Proceeds from the offering were used to partially repay the Company’s 2022 and 2023 debt maturities, including approximately $142.2 million for five mortgage loans maturing in 2022 and approximately $335.5 million of 2022 and 2023 maturing Term Loans.

The Company extended the maturity of $100.0 million of its $150.0 million Term Loan scheduled to mature in January 2022 to June 2024, including an extension option. Additionally, the Company amended its credit agreements resulting in the extension of covenant waivers through the first quarter of 2022, an increase in permitted acquisition capacity to $300.0 million and increased flexibility to retain a portion of refinancing and disposition proceeds for general corporate purposes.

As of June 30, 2021, the Company had approximately $658.0 million of unrestricted cash on its balance sheet, $400.0 million available under its Revolving Credit Facility, over $1.0 billion of total liquidity and $2.4 billion of debt outstanding. At present time, the Company has no debt maturities until 2023.

Dividends

The Company’s Board of Trustees declared a quarterly cash dividend of $0.01 per common share of beneficial interest of the Company in the second quarter. The dividend was paid on July 15, 2021 to shareholders of record as of June 30, 2021.

The Company's Board of Trustees declared a quarterly cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on July 30, 2021 to shareholders of record as of June 30, 2021.

2021 Outlook

Given the continued uncertainties related to the pandemic and its impact on travel, the Company is unable to provide a future outlook at this time.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on August 6, 2021, at 9:00 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 second 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 through the Investor Relations section of the Company’s website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and pro forma operating statistics, which is available through the Investor Relations section 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 currently consists of 97 hotels with approximately 22,100 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward Looking Statements

This 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, measures being taken in response to the COVID-19 pandemic, and the impact of the COVID-19 pandemic on our business, 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 and a worsening of global economic conditions or low levels of economic growth; the duration and scope of the COVID-19 pandemic and its impact on the demand for travel and on levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the impact of the pandemic on global and regional economies, travel, and economic activity; the speed and effectiveness of vaccine and treatment developments and their deployment, including public adoption rates of COVID-19 vaccines and their effectiveness against emerging variants of COVID-19, such as the Delta variant; the pace of recovery when the COVID-19 pandemic subsides; the effects of steps we and our third party management partners take to reduce operating costs; increased direct competition, changes in government regulations or accounting rules; changes in local, national and global real estate conditions; declines in the lodging industry, including as a result of the COVID-19 pandemic; 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 and epidemics and/or pandemics, including COVID-19; the Company’s ability to obtain lines of credit or permanent financing on satisfactory terms; changes in interest rates; inflation; 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. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. 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.

For additional information or to receive press releases via email, please visit our website:
http://www.rljlodgingtrust.com

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) income tax expense; and (3) depreciation and amortization expense. The Company considers EBITDA useful to investors 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 expense) 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, EBITDA and EBITDAre

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:

  • Transaction Costs: the Company excludes transaction costs expensed during the period

  • Non-Cash Expenses: the Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income taxes, and unrealized gains and loss related to interest rate hedges

  • Other Non-Operational Expenses: the Company excludes the effect of certain non-operational expenses representing income and expenses outside the normal course of operations, including gains or losses on extinguishment of indebtedness

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 any non-comparable hotels that were under renovation. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Sold hotels

For the three and six months ended June 30, 2021 and 2020, respectively, pro forma adjustments included the following sold hotels:

  • Residence Inn Houston Sugarland sold in December 2020

  • Courtyard Houston Sugarland sold in January 2021

  • Residence Inn Chicago Naperville sold in May 2021

  • Residence Inn Indianapolis Fishers sold in May 2021

RLJ Lodging Trust

Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

(unaudited)

June 30,
2021

December 31, 2020

Assets

Investment in hotel properties, net

$

4,395,901

$

4,486,416

Investment in unconsolidated joint ventures

6,891

6,798

Cash and cash equivalents

657,892

899,813

Restricted cash reserves

38,842

34,977

Hotel and other receivables, net of allowance of $90 and $292, respectively

25,352

13,346

Lease right-of-use assets

140,321

142,989

Prepaid expense and other assets

31,338

32,833

Total assets

$

5,296,537

$

5,617,172

Liabilities and Equity

Debt, net

$

2,407,345

$

2,587,731

Accounts payable and other liabilities

150,713

172,325

Advance deposits and deferred revenue

22,777

32,177

Lease liabilities

121,305

122,593

Accrued interest

6,140

6,206

Distributions payable

8,339

8,752

Total liabilities

2,716,619

2,929,784

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 June 30, 2021 and December 31, 2020

366,936

366,936

Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 166,626,796 and 165,002,752 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

1,666

1,650

Additional paid-in capital

3,083,175

3,077,142

Accumulated other comprehensive loss

(36,297

)

(69,050

)

Distributions in excess of net earnings

(855,106

)

(710,161

)

Total shareholders’ equity

2,560,374

2,666,517

Noncontrolling interests:

Noncontrolling interest in consolidated joint ventures

12,349

13,002

Noncontrolling interest in the Operating Partnership

7,195

7,869

Total noncontrolling interest

19,544

20,871

Total equity

2,579,918

2,687,388

Total liabilities and equity

$

5,296,537

$

5,617,172

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

RLJ Lodging Trust

Consolidated Statements of Operations

(Amounts in thousands, except share and per share data)

(unaudited)

For the three months ended June 30,

For the six months ended

June 30,

2021

2020

2021

2020

Revenues

Operating revenues

Room revenue

$

166,554

$

27,853

$

269,326

$

246,745

Food and beverage revenue

12,983

1,271

19,225

32,039

Other revenue

14,717

3,467

25,255

19,289

Total revenues

$

194,254

$

32,591

$

313,806

$

298,073

Expenses

Operating expenses

Room expense

42,898

12,469

72,325

76,222

Food and beverage expense

8,709

1,801

13,265

28,181

Management and franchise fee expense

12,630

(1,827

)

17,991

15,317

Other operating expense

56,883

37,933

106,003

118,890

Total property operating expenses

121,120

50,376

209,584

238,610

Depreciation and amortization

46,915

49,229

93,858

98,402

Impairment losses

5,946

Property tax, insurance and other

24,048

25,348

44,129

54,041

General and administrative

12,133

11,673

22,934

23,441

Transaction costs

195

20

255

30

Total operating expenses

204,411

136,646

376,706

414,524

Other (expense) income, net

(9,720

)

282

(9,255

)

859

Interest income

220

579

604

3,545

Interest expense

(26,366

)

(23,794

)

(54,261

)

(47,607

)

Gain (loss) on sale of hotel properties, net

103

(8

)

1,186

94

Loss on extinguishment of indebtedness, net

(6,207

)

(6,207

)

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

(52,127

)

(126,996

)

(130,833

)

(159,560

)

Equity in income (loss) from unconsolidated joint ventures

60

(975

)

(238

)

(390

)

Loss before income tax (expense) benefit

(52,067

)

(127,971

)

(131,071

)

(159,950

)

Income tax (expense) benefit

(154

)

11,805

(268

)

12,955

Net loss

(52,221

)

(116,166

)

(131,339

)

(146,995

)

Net loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures

506

524

1,242

1,837

Noncontrolling interest in the Operating Partnership

268

568

664

760

Net loss attributable to RLJ

(51,447

)

(115,074

)

(129,433

)

(144,398

)

Preferred dividends

(6,279

)

(6,279

)

(12,557

)

(12,557

)

Net loss attributable to common shareholders

$

(57,726

)

$

(121,353

)

$

(141,990

)

$

(156,955

)

Basic and diluted per common share data:

Net loss per share attributable to common shareholders

$

(0.35

)

$

(0.74

)

$

(0.87

)

$

(0.95

)

Weighted-average number of common shares

163,996,003

163,543,701

163,911,475

165,346,717

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

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 Unit holders

For the three months ended June 30,

For the six months ended

June 30,

2021

2020

2021

2020

Net loss

$

(52,221

)

$

(116,166

)

$

(131,339

)

$

(146,995

)

Preferred dividends

(6,279

)

(6,279

)

(12,557

)

(12,557

)

Depreciation and amortization

46,915

49,229

93,858

98,402

(Gain) loss on sale of hotel properties, net

(103

)

8

(1,186

)

(94

)

Impairment losses

5,946

Noncontrolling interest in consolidated joint ventures

506

524

1,242

1,837

Adjustments related to consolidated joint ventures (1)

(75

)

(74

)

(150

)

(149

)

Adjustments related to unconsolidated joint ventures (2)

291

489

585

982

FFO

(10,966

)

(72,269

)

(43,601

)

(58,574

)

Transaction costs

195

20

255

30

Loss on extinguishment of indebtedness, net

6,207

6,207

Amortization of share-based compensation

4,848

3,325

7,600

6,021

Non-cash income tax benefit

(11,821

)

(13,062

)

Unrealized (gain) loss on discontinued cash flow hedges

(371

)

1,186

Corporate- and property-level severance

209

209

Derivative losses in accumulated other comprehensive loss reclassified to earnings (3)

10,658

10,658

Other expenses (4)

353

835

409

989

Adjusted FFO

$

11,295

$

(80,072

)

$

(18,472

)

$

(63,201

)

Adjusted FFO per common share and unit-basic

$

0.07

$

(0.49

)

$

(0.11

)

$

(0.38

)

Adjusted FFO per common share and unit-diluted

$

0.07

$

(0.49

)

$

(0.11

)

$

(0.38

)

Basic weighted-average common shares and units outstanding (5)

164,768

164,316

164,684

166,119

Diluted weighted-average common shares and units outstanding (5)

165,242

164,316

164,684

166,119

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 of the unconsolidated joint ventures.
(3) Reclassification of interest rate swap losses in accumulated other comprehensive loss to earnings for discontinued cash flow hedges due to debt paydowns.
(4) Represents expenses outside of the normal course of operations.
(5) Includes 0.8 million weighted-average operating partnership units for the three and six month periods ended June 30, 2021 and 2020.

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 June 30,

For the six months ended

June 30,

2021

2020

2021

2020

Net loss

$

(52,221

)

$

(116,166

)

$

(131,339

)

$

(146,995

)

Depreciation and amortization

46,915

49,229

93,858

98,402

Interest expense, net of interest income

26,146

23,215

53,657

44,062

Income tax expense (benefit)

154

(11,805

)

268

(12,955

)

Adjustments related to unconsolidated joint ventures (1)

408

609

818

1,226

EBITDA

21,402

(54,918

)

17,262

(16,260

)

(Gain) loss on sale of hotel properties, net

(103

)

8

(1,186

)

(94

)

Impairment losses

5,946

EBITDAre

21,299

(54,910

)

22,022

(16,354

)

Transaction costs

195

20

255

30

Loss on extinguishment of indebtedness, net

6,207

6,207

Amortization of share-based compensation

4,848

3,325

7,600

6,021

Corporate- and property-level severance

209

209

Derivative losses in accumulated other comprehensive loss reclassified to earnings (2)

10,658

10,658

Other expenses (3)

353

835

409

989

Adjusted EBITDA

43,560

(50,521

)

47,151

(9,105

)

General and administrative (4)

7,286

8,348

15,334

17,420

Other corporate adjustments (5)

(829

)

(511

)

(316

)

(204

)

Consolidated Hotel EBITDA

50,017

(42,684

)

62,169

8,111

Pro forma adjustments - (income) loss from sold hotels

(78

)

(69

)

(919

)

262

Pro forma Hotel EBITDA

$

49,939

$

(42,753

)

$

61,250

$

8,373

Note:
(1) Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint ventures.
(2) Reclassification of interest rate swap losses in accumulated other comprehensive loss to earnings for discontinued cash flow hedges due to debt paydowns.
(3) Represents expenses outside of the normal course of operations.
(4) Excludes amortization of share-based compensation 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 June 30,

For the six months ended

June 30,

2021

2020

2021

2020

Total revenue

$

194,254

$

32,591

$

313,806

$

298,073

Pro forma adjustments - revenue from sold hotels

(510

)

(936

)

(1,397

)

(2,710

)

Other corporate adjustments / non-hotel revenue

(18

)

5

(38

)

(25

)

Pro forma Hotel Revenue

$

193,726

$

31,660

$

312,371

$

295,338

Pro forma Hotel EBITDA

$

49,939

$

(42,753

)

$

61,250

$

8,373

Pro forma Hotel EBITDA Margin

25.8

%

(135.0

)

%

19.6

%

2.8

%

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

June 30, 2021 (2)

Mortgage Debt

Mortgage loan - 1 hotel (3)

10

Oct 2022

Fixed

4.94%

$

27,408

Mortgage loan - 7 hotels

3

Apr 2024

Floating (4)

3.30%

200,000

Mortgage loan - 3 hotels

5

Apr 2026

Floating (4)

3.35%

96,000

Mortgage loan - 4 hotels

5

Apr 2026

Floating (4)(5)

2.77%

85,000

Weighted Average / Mortgage Total

3.31%

$

408,408

Corporate Debt

Revolver (6)

4

May 2025

Floating (4)

3.53%

$

200,000

$150 Million Term Loan Maturing 2023

2

Jun 2024

Floating (4)

4.66%

100,000

$400 Million Term Loan Maturing 2023

5

Jan 2023

Floating (4)

4.73%

203,944

$225 Million Term Loan Maturing 2023

5

Jan 2023

Floating (4)

4.72%

114,718

$400 Million Term Loan Maturing 2025

5

May 2025

Floating (4)

4.37%

400,000

$475 Million Senior Notes due 2025

10

Jun 2025

Fixed

6.00%

474,888

$500 Million Senior Notes due 2026

5

Jul 2026

Fixed

3.75%

500,000

Weighted Average / Corporate Total

4.59%

$

1,993,550

Weighted Average / Gross Total

4.37%

$

2,401,958

Note:
(1) Interest rates as of June 30, 2021.
(2) Excludes the impact of fair value adjustments and deferred financing costs.
(3) Loan was repaid in third quarter with proceeds from Senior Notes due 2026.
(4) The floating interest rate is hedged with an interest rate swap.
(5) Reflects an interest rate swap of $84.0 million on the $85.0 million mortgage loan.
(6) As of June 30, 2021, there was $400.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210805006134/en/

Contacts

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

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