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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| RLJ Lodging Trust | NYSE:RLJ | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.08 | 0.80% | 10.14 | 10.225 | 10.05 | 10.08 | 1,761,566 | 23:05:26 |
From Nov 2023 to Nov 2024
Q1 RevPAR increased 1.0% above 2023
Adjusted FFO per diluted share of $0.33
Expanded conversion pipeline by acquiring Wyndham Boston Beacon Hill
RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three months ended March 31, 2024.
Highlights
“Our first quarter RevPAR growth came in line with our expectations given the holiday shift and we once again exceeded the industry while gaining market share,” commented Leslie D. Hale, President and Chief Executive Officer. “Our outperformance relative to the industry continues to underscore the strong positioning of our urban-centric portfolio which is benefiting from steady improvement in business transient demand and increasing international travel, in addition to solid group and healthy urban leisure. Our growth is being further aided by the strong returns we are generating from our conversions and ROI initiatives which bolster our confidence in our next wave of conversions that are on track to be completed this year. We expect our momentum to be driven by positive trends that are disproportionately benefiting urban markets, the continuing ramp up of our completed conversions and our strong balance sheet that provides significant optionality, all of which demonstrate our multiple channels of growth.”
The prefix “comparable” as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Explanations of EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel EBITDA Margin, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included within this release.
Financial and Operating Highlights
($ in thousands, except ADR, RevPAR, Change, and per share amounts)
(unaudited)
For the three months ended March 31,
2024
2023
Change
Operational Overview: (1)
Comparable ADR
$
198.84
$
199.07
(0.1
)%
Comparable Occupancy
69.3
%
68.5
%
1.2
%
Comparable RevPAR
$
137.88
$
136.45
1.0
%
Financial Overview:
Total Revenue
$
324,410
$
314,503
3.1
%
Comparable Hotel Revenue
$
324,392
$
314,488
3.1
%
Net Income
$
4,746
$
10,514
(54.9
)%
Comparable Hotel EBITDA
$
88,855
$
90,926
(2.3
)%
Comparable Hotel EBITDA Margin
27.4
%
28.9
%
(152) bps
Adjusted EBITDA
$
79,594
$
82,685
(3.7
)%
Adjusted FFO
$
51,854
$
56,080
(7.5
)%
Adjusted FFO Per Diluted Common Share and Unit
$
0.33
$
0.35
(5.7
)%
Note:
(1) Comparable statistics reflect the Company's 96 hotel portfolio owned as of March 31, 2024.
Acquisition
During the first quarter of 2024, the Company completed the purchase of the 304-room Wyndham Boston Beacon Hill for a purchase price of approximately $125 million, which was previously subject to a ground lease that expired in 2028. The Company funded the acquisition with existing cash on hand.
Balance Sheet
As of March 31, 2024, the Company had approximately $1.0 billion of total liquidity, comprising approximately $350.2 million of unrestricted cash and $600.0 million available under its revolving credit facility, and $2.2 billion of debt outstanding.
In April 2024, the Company drew $200.0 million under its $600 million revolving credit facility and utilized the proceeds to repay $200.0 million of maturing mortgage debt.
In April 2024, the Company exercised its options to extend $181.0 million of mortgage loans to April 2025.
Dividends
The Company’s Board of Trustees declared a first quarter cash dividend of $0.10 per common share of beneficial interest of the Company. The dividend was paid on April 15, 2024 to shareholders of record as of March 29, 2024.
The Company's Board of Trustees declared a first quarter cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on April 30, 2024 to shareholders of record as of March 29, 2024.
Outlook
The company is reaffirming its annual outlook for all hotels owned as of May 1, 2024:
FY 2024
Comparable RevPAR Growth
2.5% to 5.5%
Comparable Hotel EBITDA
$395.0M to $425.0M
Adjusted EBITDA
$360.0M to $390.0M
Adjusted FFO per diluted share
$1.55 to $1.75
Additionally, the Company's full year 2024 outlook includes:
The Company expects second quarter RevPAR growth to be below the mid-point of the full-year range, due to a soft April.
No future acquisitions, dispositions, financings, or share repurchases are incorporated into the Company's outlook and could result in a material change to the Company's outlook.
Earnings Call
The Company will conduct its quarterly analyst and investor conference call on May 2, 2024 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 first 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 comparable operating statistics, which will be available through the Investor Relations section of the Company's website.
About Us
RLJ Lodging Trust ("RLJ") is a self-advised, publicly traded real estate investment trust that owns 96 premium-branded, rooms-oriented, high-margin, urban-centric hotels located within the heart of demand locations. Our hotels are geographically diverse and concentrated in major urban markets that provide multiple demand generators from business, leisure, and other travelers.
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, 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,” “may,” 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 our actual results could differ materially from those set forth in the forward-looking 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 on Form 10-K for the year ended December 31, 2023 and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which will be filed on May 2, 2024, 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: https://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 defines such terms.
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 have instead 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 may be redeemed 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 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 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 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 outside the normal course of operations. 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, are beneficial to an investor’s understanding of the Company's 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.
Comparable Hotel EBITDA and Comparable Hotel EBITDA margin include prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels and excludes results from sold hotels as applicable.
RLJ Lodging Trust
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(unaudited)
March 31, 2024
December 31, 2023
Assets
Investment in hotel properties, net
$
4,249,341
$
4,136,216
Investment in unconsolidated joint ventures
7,632
7,398
Cash and cash equivalents
350,237
516,675
Restricted cash reserves
40,721
38,652
Hotel and other receivables, net of allowance of $270 and $265, respectively
26,754
26,163
Lease right-of-use assets
132,276
136,140
Prepaid expense and other assets
82,896
58,051
Total assets
$
4,889,857
$
4,919,295
Liabilities and Equity
Debt, net
$
2,221,833
$
2,220,778
Accounts payable and other liabilities
138,634
147,819
Advance deposits and deferred revenue
36,140
32,281
Lease liabilities
120,290
122,588
Accrued interest
12,824
22,539
Distributions payable
22,570
22,500
Total liabilities
2,552,291
2,568,505
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 March 31, 2024 and December 31, 2023
366,936
366,936
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 155,819,434 and 155,297,829 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
1,558
1,553
Additional paid-in capital
3,002,588
3,000,894
Distributions in excess of net earnings
(1,072,125
)
(1,055,183
)
Accumulated other comprehensive income
24,944
22,662
Total shareholders’ equity
2,323,901
2,336,862
Noncontrolling interests:
Noncontrolling interest in the Operating Partnership
6,220
6,294
Noncontrolling interest in consolidated joint ventures
7,445
7,634
Total noncontrolling interest
13,665
13,928
Total equity
2,337,566
2,350,790
Total liabilities and equity
$
4,889,857
$
4,919,295
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
March 31,
2024
2023
Revenues
Operating revenues
Room revenue
$
266,630
$
260,832
Food and beverage revenue
35,689
33,288
Other revenue
22,091
20,383
Total revenues
324,410
314,503
Expenses
Operating expenses
Room expense
69,386
66,051
Food and beverage expense
28,627
26,137
Management and franchise fee expense
25,655
26,182
Other operating expenses
89,809
82,624
Total property operating expenses
213,477
200,994
Depreciation and amortization
44,679
44,996
Property tax, insurance and other
27,834
24,648
General and administrative
15,105
13,656
Transaction costs
14
20
Total operating expenses
301,109
284,314
Other income, net
3,191
849
Interest income
4,787
3,664
Interest expense
(26,458
)
(24,130
)
Income before equity in income from unconsolidated joint ventures
4,821
10,572
Equity in income from unconsolidated joint ventures
234
281
Income before income tax expense
5,055
10,853
Income tax expense
(309
)
(339
)
Net income
4,746
10,514
Net loss (income) attributable to noncontrolling interests:
Noncontrolling interest in the Operating Partnership
2
(17
)
Noncontrolling interest in consolidated joint ventures
189
148
Net income attributable to RLJ
4,937
10,645
Preferred dividends
(6,279
)
(6,279
)
Net (loss) income attributable to common shareholders
$
(1,342
)
$
4,366
Basic per common share data:
Net (loss) income per share attributable to common shareholders - basic
$
(0.01
)
$
0.03
Weighted-average number of common shares
152,970,215
159,483,268
Diluted per common share data:
Net (loss) income per share attributable to common shareholders - diluted
$
(0.01
)
$
0.03
Weighted-average number of common shares
152,970,215
160,143,748
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 Unitholders
For the three months ended March 31,
2024
2023
Net income
$
4,746
$
10,514
Preferred dividends
(6,279
)
(6,279
)
Depreciation and amortization
44,679
44,996
Noncontrolling interest in consolidated joint ventures
189
148
Adjustments related to consolidated joint venture (1)
(46
)
(43
)
Adjustments related to unconsolidated joint venture (2)
229
237
FFO
43,518
49,573
Transaction costs
14
20
Pre-opening costs (3)
75
222
Amortization of share-based compensation
6,434
5,692
Non-cash interest expense related to discontinued interest rate hedges
482
482
Other expenses (4)
1,331
91
Adjusted FFO
$
51,854
$
56,080
Adjusted FFO per common share and unit-basic
$
0.34
$
0.35
Adjusted FFO per common share and unit-diluted
$
0.33
$
0.35
Basic weighted-average common shares and units outstanding (5)
153,742
160,255
Diluted weighted-average common shares and units outstanding (5)
155,001
160,916
Notes:
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 March 31,
2024
2023
Net income
$
4,746
$
10,514
Depreciation and amortization
44,679
44,996
Interest expense, net of interest income
21,671
20,466
Income tax expense
309
339
Adjustments related to unconsolidated joint venture (1)
335
345
EBITDA and EBITDAre
71,740
76,660
Transaction costs
14
20
Pre-opening costs (2)
75
222
Amortization of share-based compensation
6,434
5,692
Other expenses (3)
1,331
91
Adjusted EBITDA
79,594
82,685
General and administrative
8,671
7,964
Other corporate adjustments
666
470
Consolidated Hotel EBITDA
88,931
91,119
Comparable adjustments - income from sold hotels
(76
)
(193
)
Comparable Hotel EBITDA
$
88,855
$
90,926
Notes: Comparable statistics reflect the Company's 96 hotel portfolio owned as of March 31, 2024.
RLJ Lodging Trust
Reconciliation of Non-GAAP Measures
(Amounts in thousands except margin data)
(unaudited)
Comparable Hotel EBITDA Margin
For the three months ended March 31,
2024
2023
Total revenue
$
324,410
$
314,503
Other corporate adjustments / non-hotel revenue
(18
)
(15
)
Comparable Hotel Revenue
$
324,392
$
314,488
Comparable Hotel EBITDA
$
88,855
$
90,926
Comparable Hotel EBITDA Margin
27.4
%
28.9
%
RLJ Lodging Trust
Consolidated Debt Summary
(Amounts in thousands except interest data)
(unaudited)
Loan
Base Term (Years)
Maturity (incl. extensions)
Floating / Fixed (1)
Interest Rate (2)
Balance as of March 31, 2024 (3)
Mortgage Debt
Mortgage loan - 1 hotel
10
Jan 2029
Fixed
5.06
%
$
25,000
Mortgage loan - 7 hotels (4)
3
Apr 2024
Floating
5.94
%
200,000
Mortgage loan - 3 hotels (5)
5
Apr 2026
Floating
5.03
%
96,000
Mortgage loan - 4 hotels (5)
5
Apr 2026
Floating
5.61
%
85,000
Weighted Average / Mortgage Total
5.60
%
$
406,000
Corporate Debt
Revolver (4)
4
May 2028
Floating
—
$
—
$225 Million Term Loan Maturing 2026
3
May 2028
Floating
2.97
%
225,000
$200 Million Term Loan Maturing 2026
3
January 2028
Floating
4.82
%
200,000
$400 Million Term Loan Maturing 2025
5
May 2025
Floating
4.48
%
400,000
$500 Million Senior Notes due 2026
5
July 2026
Fixed
3.75
%
500,000
$500 Million Senior Notes due 2029
8
September 2029
Fixed
4.00
%
500,000
Weighted Average / Corporate Total
4.00
%
$
1,825,000
Weighted Average / Total
4.29
%
$
2,231,000
Notes:
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501763383/en/
Sean M. Mahoney, Executive Vice President and Chief Financial Officer – (301) 280-7774
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