RLJ Lodging Trust Reports Second Quarter 2024 Results

Rhea-AI Summary

RLJ Lodging Trust (NYSE: RLJ) reported positive Q2 2024 results, with RevPAR increasing 2.6% to $157.30 compared to last year. The company saw total revenue rise 3.5% to $369.3 million, while net income reached $37.3 million. RLJ acquired Hotel Teatro in Denver for $35.5 million and repurchased 0.3 million shares for $3.1 million. The company also increased its quarterly dividend to $0.15 per share.

Key financial highlights include:

• Adjusted EBITDA of $109.0 million
• Adjusted FFO per diluted share of $0.51
• Total liquidity of $771.1 million as of June 30, 2024

RLJ updated its full-year 2024 outlook, projecting Comparable RevPAR growth of 1.0% to 2.5% and Adjusted FFO per diluted share of $1.45 to $1.58.

Positive

• RevPAR increased 2.6% to $157.30 compared to last year
• Total revenue rose 3.5% to $369.3 million
• Acquired Hotel Teatro in Denver for $35.5 million, expected to generate 10% yield upon stabilization
• Increased quarterly dividend to $0.15 per share
• Strong liquidity position with $771.1 million available

Negative

• Net income decreased 10.6% to $37.3 million compared to Q2 2023
• Adjusted EBITDA declined 4.3% to $109.0 million
• Adjusted FFO per diluted share decreased 8.9% to $0.51
• Comparable Hotel EBITDA margin decreased by 245 basis points to 32.0%

Insights

Financial Analyst

RLJ Lodging Trust's Q2 2024 results present a mixed picture. While the company showed some positive trends, there are areas of concern that investors should note:

• Revenue Growth: Total revenue increased by 3.5% year-over-year to $369.3 million, driven by a 2.6% increase in RevPAR to $157.30. This growth, while modest, outpaces inflation and suggests some resilience in the lodging market.
• Profitability Concerns: Despite revenue growth, net income decreased by 10.6% to $37.3 million. This decline in profitability is concerning and warrants further investigation into cost structures and operational efficiency.
• Margin Pressure: Comparable Hotel EBITDA margin contracted by 245 basis points to 32.0%. This significant margin compression could indicate rising costs or pricing pressures in the industry.
• Strategic Moves: The acquisition of Hotel Teatro in Denver for $35.5 million and the sale of a non-core property demonstrate the company's focus on portfolio optimization. The expected 10% yield on the Denver property is promising but needs to be monitored for actual performance.
• Capital Return: The increase in quarterly dividend to $0.15 per share signals management's confidence in future cash flows. However, the share repurchases at an average price of $9.72 raise questions about capital allocation, given the stock's current trading levels.

Investors should closely monitor RevPAR trends, margin pressures and the performance of new acquisitions in the coming quarters to assess RLJ's ability to navigate the challenging lodging market environment.

Market Research Analyst

RLJ Lodging Trust's Q2 results offer insights into broader industry trends and market dynamics:

• Urban Market Recovery: The company's mention of strong gains in urban markets, benefiting from growth in business and group segments, suggests a potential shift in travel patterns. This could indicate a broader recovery in urban lodging demand, which has lagged behind leisure-focused destinations since the pandemic.
• RevPAR Growth: The 2.6% increase in RevPAR, while positive, is relatively modest. This suggests that the lodging industry may be facing headwinds in pushing rate growth, possibly due to economic uncertainties or increased competition.
• Occupancy vs. ADR: The RevPAR growth was driven more by occupancy gains (2.1% increase) than ADR growth (0.6% increase). This implies that hotels are filling rooms but struggling to significantly raise prices, which could be a sign of price sensitivity among travelers or increased market competition.
• Segment Performance: The company's mention of growth in business and group segments is noteworthy. If this trend continues, it could signal a broader recovery in corporate travel and events, which have been slower to rebound post-pandemic.
• Market Valuation: The company's share repurchases at an average price of $9.72 suggest that management views the stock as undervalued. This could indicate a disconnect between public market valuations and the underlying value of hotel real estate assets.

These trends highlight the complex dynamics at play in the lodging industry, with urban markets showing signs of recovery amidst ongoing challenges in rate growth and profitability. Investors should monitor these trends across the sector to gauge the overall health of the lodging market and identify potential opportunities or risks.

Q2 RevPAR increased 2.6% above 2023

Acquired a boutique lifestyle hotel in Denver

Announced increase of quarterly dividend to $0.15 per share

BETHESDA, Md.--(BUSINESS WIRE)-- RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three and six months ended June 30, 2024.

Second Quarter Highlights

• Portfolio Comparable RevPAR of $157.30; an increase of 2.6% from last year
• Total Revenue of $369.3 million; an increase of 3.5% from last year
• Net Income of $37.3 million
• Comparable Hotel EBITDA of $118.6 million
• Adjusted EBITDA of $109.0 million
• Adjusted FFO per diluted common share and unit of $0.51
• Acquired Hotel Teatro in Denver for $35.5 million
• Repurchased 0.3 million shares for approximately $3.1 million at an average price of $9.72
• Addressed 2024 debt maturities

“We were encouraged to see industry RevPAR growth improve during the second quarter despite a choppy backdrop. Relative to this environment, we were pleased with our solid second quarter performance, which was driven by strong gains in a number of our urban markets that benefitted from growth in business and group segments,” commented Leslie D. Hale, President and Chief Executive Officer. “Additionally, we were active on multiple fronts including, acquiring a high-quality boutique lifestyle hotel in Denver, progressing on our 2024 conversions, and repurchasing shares while increasing our quarterly dividend. Our strong execution of these initiatives once again demonstrates the optionality our strong balance sheet provides to drive multiple channels of growth simultaneously."

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 June 30,			For the six months ended June 30,
	2024	2023	Change	2024	2023	Change
Operational Overview: (1)
Comparable ADR	$205.20	$204.05	0.6%	$202.26	$201.83	0.2%
Comparable Occupancy	76.7%	75.1%	2.1%	73.0%	71.8%	1.6%
Comparable RevPAR	$157.30	$153.26	2.6%	$147.61	$144.95	1.8%
Financial Overview:
Total Revenue	$369,297	$356,960	3.5%	$693,707	$671,463	3.3%
Comparable Hotel Revenue	$371,027	$358,880	3.4%	$696,505	$674,589	3.2%
Net Income	$37,291	$41,720	(10.6)%	$42,037	$52,234	(19.5)%
Comparable Hotel EBITDA	$118,639	$123,532	(4.0)%	$207,432	$214,577	(3.3)%
Comparable Hotel EBITDA Margin	32.0%	34.4%	(245) bps	29.8%	31.8%	(203) bps
Adjusted EBITDA	$108,971	$113,829	(4.3)%	$188,563	$196,513	(4.0)%
Adjusted FFO	$78,619	$87,836	(10.5)%	$130,473	$143,916	(9.3)%
Adjusted FFO Per Diluted Common Share and Unit	$0.51	$0.56	(8.9)%	$0.84	$0.90	(6.7)%
Note:
(1) Comparable statistics reflect the Company's 96 hotel portfolio owned as of June 30, 2024.

Acquisitions and Dispositions

During the second quarter of 2024, the Company purchased the 110-room Hotel Teatro in Denver, Colorado for a purchase price of $35.5 million. The hotel is expected to generate an estimated 10% yield upon stabilization. Additionally, the Company sold a non-core 78-room Residence Inn hotel located in Indiana for a sales price of $8.1 million.

Share Repurchases

During the second quarter, the Company recycled proceeds from the sale of a non-core hotel to repurchase common shares. During the second quarter, the Company repurchased 0.3 million common shares for approximately $3.1 million at an average price of $9.72. Year-to-date, the Company has repurchased 0.5 million common shares for approximately $5.0 million at an average price of $9.66. As of August 1, the Company's 2024 share repurchase program had a remaining capacity of $245.0 million.

Balance Sheet

As of June 30, 2024, the Company had approximately $771.1 million of total liquidity, comprising approximately $371.1 million of unrestricted cash and $400.0 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 $600.0 million revolving credit facility and utilized the proceeds to repay $200.0 million of maturing mortgage debt.

In April 2024, the Company exercised its one-year extension options to extend the maturities of $181.0 million of mortgage loans to April 2025.

Dividends

The Company’s Board of Trustees declared a second quarter cash dividend of $0.10 per common share of beneficial interest of the Company. The dividend was paid on July 15, 2024 to shareholders of record as of June 28, 2024.

The Company's Board of Trustees declared a second quarter cash dividend of $0.4875 on the Company’s Series A Preferred Shares. The dividend was paid on July 31, 2024 to shareholders of record as of June 28, 2024.

In July, the Company's Board of Trustees approved an increase to its quarterly cash dividend to $0.15 per common share of beneficial interest of the Company starting with the third quarter of 2024. The Dividend will be paid on October 15, 2024 to shareholders of record as of September 30, 2024.

Outlook Update

The Company is updating its full-year outlook range to incorporate recent transactions, year-to-date operating performance, and the current economic environment. 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.

	FY 2024
Comparable RevPAR Growth	1.0% to 2.5%
Comparable Hotel EBITDA	$382.5M to $402.5M
Adjusted EBITDA	$346.5M to $366.5M
Adjusted FFO per diluted share	$1.45 to $1.58

Additionally, the Company's full year 2024 outlook includes:

• Net interest expense of $93.0 million to $95.0 million.
• Capital expenditures related to renovations in the range of $100.0 million to $120.0 million.
• Diluted weighted average common shares and units of 155.0 million.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on August 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 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 presentation 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 June 30, 2024, which will be filed on August 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:

• Transaction Costs: The Company excludes transaction costs expensed during the period
• Pre-Opening Costs: The Company excludes certain costs related to pre-opening of hotels
• Non-Cash Expenses: The Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income tax expense or benefit, and non-cash interest expense related to discontinued 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

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.

Comparable adjustments: Acquired hotel

For the three and six months ended June 30, 2024 and 2023, Comparable adjustments included the following acquired hotel:

• Hotel Teatro acquired in June 2024

Comparable adjustments: Sold hotel

For the three and six months ended June 30, 2024 and 2023, Comparable adjustments included the following sold hotel:

• Residence Inn Merrillville sold in May 2024

RLJ Lodging Trust Consolidated Balance Sheets (Amounts in thousands, except share and per share data) (unaudited)
	June 30, 2024				December 31, 2023
Assets
Investment in hotel properties, net	$	4,274,669			$	4,136,216
Investment in unconsolidated joint ventures		7,386				7,398
Cash and cash equivalents		371,133				516,675
Restricted cash reserves		36,081				38,652
Hotel and other receivables, net of allowance of $369 and $265, respectively		30,916				26,163
Lease right-of-use assets		130,875				136,140
Prepaid expense and other assets		66,967				58,051
Total assets	$	4,918,027			$	4,919,295
Liabilities and Equity
Debt, net	$	2,222,642			$	2,220,778
Accounts payable and other liabilities		149,682				147,819
Advance deposits and deferred revenue		33,475				32,281
Lease liabilities		119,902				122,588
Accrued interest		21,934				22,539
Distributions payable		22,621				22,500
Total liabilities		2,570,256				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 June 30, 2024 and December 31, 2023		366,936				366,936
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 155,240,677 and 155,297,829 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		1,552				1,553
Additional paid-in capital		3,000,394				3,000,894
Distributions in excess of net earnings		(1,057,061	)			(1,055,183	)
Accumulated other comprehensive income		22,171				22,662
Total shareholders’ equity		2,333,992				2,336,862
Noncontrolling interests:
Noncontrolling interest in the Operating Partnership		6,318				6,294
Noncontrolling interest in consolidated joint ventures		7,461				7,634
Total noncontrolling interest		13,779				13,928
Total equity		2,347,771				2,350,790
Total liabilities and equity	$	4,918,027			$	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 June 30,								For the six months ended June 30,
		2024				2023				2024				2023
Revenues
Operating revenues
Room revenue	$	303,652			$	295,496			$	570,282			$	556,328
Food and beverage revenue		40,843				38,132				76,532				71,420
Other revenue		24,802				23,332				46,893				43,715
Total revenues		369,297				356,960				693,707				671,463
Expenses
Operating expenses
Room expense		73,941				70,333				143,327				136,384
Food and beverage expense		30,304				28,037				58,931				54,174
Management and franchise fee expense		29,789				29,277				55,444				55,459
Other operating expenses		90,792				84,207				180,601				166,831
Total property operating expenses		224,826				211,854				438,303				412,848
Depreciation and amortization		44,474				44,925				89,153				89,921
Property tax, insurance and other		28,753				24,684				56,587				49,332
General and administrative		13,940				14,627				29,045				28,283
Transaction costs		76				4				90				24
Total operating expenses		312,069				296,094				613,178				580,408
Other income, net		687				736				3,878				1,585
Interest income		4,118				5,011				8,905				8,675
Interest expense		(28,049	)			(24,543	)			(54,507	)			(48,673	)
Gain (loss) on sale of hotel properties, net		3,546				(44	)			3,546				(44	)
Loss on extinguishment of indebtedness, net		—				(169	)			—				(169	)
Income before equity in income from unconsolidated joint ventures		37,530				41,857				42,351				52,429
Equity in income from unconsolidated joint ventures		154				220				388				501
Income before income tax expense		37,684				42,077				42,739				52,930
Income tax expense		(393	)			(357	)			(702	)			(696	)
Net income		37,291				41,720				42,037				52,234
Net (income) loss attributable to noncontrolling interests:
Noncontrolling interest in the Operating Partnership		(169	)			(171	)			(167	)			(188	)
Noncontrolling interest in consolidated joint ventures		(16	)			(154	)			173				(6	)
Net income attributable to RLJ		37,106				41,395				42,043				52,040
Preferred dividends		(6,279	)			(6,279	)			(12,557	)			(12,557	)
Net income attributable to common shareholders	$	30,827			$	35,116			$	29,486			$	39,483
Basic per common share data:
Net income per share attributable to common shareholders - basic	$	0.20			$	0.22			$	0.19			$	0.25
Weighted-average number of common shares		153,641,065				156,424,444				153,305,640				157,945,406
Diluted per common share data:
Net income per share attributable to common shareholders - diluted	$	0.20			$	0.22			$	0.19			$	0.25
Weighted-average number of common shares		154,105,871				156,741,187				154,151,135				158,381,380
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 June 30,								For the six months ended June 30,
		2024				2023				2024				2023
Net income	$	37,291			$	41,720			$	42,037			$	52,234
Preferred dividends		(6,279	)			(6,279	)			(12,557	)			(12,557	)
Depreciation and amortization		44,474				44,925				89,153				89,921
(Gain) loss on sale of hotel properties, net		(3,546	)			44				(3,546	)			44
Noncontrolling interest in consolidated joint ventures		(16	)			(154	)			173				(6	)
Adjustments related to consolidated joint venture (1)		(47	)			(44	)			(92	)			(87	)
Adjustments related to unconsolidated joint venture (2)		228				236				457				473
FFO		72,105				80,448				115,625				130,022
Transaction costs		76				4				90				24
Pre-opening costs (3)		125				639				199				860
Loss on extinguishment of indebtedness, net		—				169				—				169
Amortization of share-based compensation		5,275				6,089				11,708				11,781
Non-cash interest expense related to discontinued interest rate hedges		418				482				900				964
Other expenses (4)		620				5				1,951				96
Adjusted FFO	$	78,619			$	87,836			$	130,473			$	143,916
Adjusted FFO per common share and unit-basic	$	0.51			$	0.56			$	0.85			$	0.91
Adjusted FFO per common share and unit-diluted	$	0.51			$	0.56			$	0.84			$	0.90
Basic weighted-average common shares and units outstanding (5)		154,413				157,196				154,077				158,717
Diluted weighted-average common shares and units outstanding (5)		154,878				157,513				154,923				159,153

Notes:
(1)	Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint venture.
(2)	Includes our ownership interest in the depreciation and amortization expense of the unconsolidated joint venture.
(3)	Represents expenses related to the brand conversions of certain hotel properties prior to opening.
(4)	Represents expenses and income 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, 2024 and 2023.

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,
		2024				2023				2024				2023
Net income	$	37,291			$	41,720			$	42,037			$	52,234
Depreciation and amortization		44,474				44,925				89,153				89,921
Interest expense, net of interest income		23,931				19,532				45,602				39,998
Income tax expense		393				357				702				696
Adjustments related to unconsolidated joint venture (1)		332				345				667				690
EBITDA		106,421				106,879				178,161				183,539
(Gain) loss on sale of hotel properties, net		(3,546	)			44				(3,546	)			44
EBITDAre		102,875				106,923				174,615				183,583
Transaction costs		76				4				90				24
Pre-opening costs (2)		125				639				199				860
Loss on extinguishment of indebtedness, net		—				169				—				169
Amortization of share-based compensation		5,275				6,089				11,708				11,781
Other expenses (3)		620				5				1,951				96
Adjusted EBITDA		108,971				113,829				188,563				196,513
General and administrative		8,665				8,538				17,337				16,502
Other corporate adjustments		691				666				1,358				1,137
Consolidated Hotel EBITDA		118,327				123,033				207,258				214,152
Comparable adjustments - income from sold hotels		(162	)			(558	)			(352	)			(918	)
Comparable adjustments - income from acquired hotels		474				1,057				525				1,343
Comparable Hotel EBITDA	$	118,639			$	123,532			$	207,432			$	214,577

Notes:
(1)	Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint venture.
(2)	Represents expenses related to the brand conversions of certain hotel properties prior to opening.
(3)	Represents expenses and income outside of the normal course of operations.

RLJ Lodging Trust Reconciliation of Non-GAAP Measures (Amounts in thousands except margin data) (unaudited)
Comparable Hotel EBITDA Margin
	For the three months ended June 30,								For the six months ended June 30,
		2024				2023				2024				2023
Total revenue	$	369,297			$	356,960			$	693,707			$	671,463
Comparable adjustments - revenue from sold hotels		(359	)			(866	)			(1,001	)			(1,487	)
Comparable adjustments - revenue from prior ownership of acquired hotels		2,107				2,806				3,834				4,649
Other corporate adjustments / non-hotel revenue		(18	)			(21	)			(35	)			(36	)
Comparable Hotel Revenue	$	371,027			$	358,880			$	696,505			$	674,589
Comparable Hotel EBITDA	$	118,639			$	123,532			$	207,432			$	214,577
Comparable Hotel EBITDA Margin		32.0	%			34.4	%			29.8	%			31.8	%

RLJ Lodging Trust Reconciliation of Non-GAAP Measures - Full-Year Outlook (Amounts in millions) (unaudited)
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
	For the year ended December 31, 2024
	Low End				High End
Net income	$	44.0			$	62.0
Depreciation and amortization		187.0				187.0
Interest expense, net of interest income		93.0				95.0
Income tax expense		1.5				1.5
Adjustments related to joint ventures		1.5				1.5
EBITDA		327.0				347.0
Gain on sale of hotel properties, net		(3.5	)			(3.5	)
EBITDAre		323.5				343.5
Amortization of share-based compensation		21.0				21.0
All other items, net		2.0				2.0
Adjusted EBITDA		346.5				366.5
General and administrative		36.0				36.0
Consolidated Hotel EBITDA		382.5				402.5
Comparable adjustments - income from sold hotels		(0.5	)			(0.5	)
Comparable adjustments - income from acquired hotels		0.5				0.5
Comparable Hotel EBITDA	$	382.5			$	402.5

Funds from Operations (FFO) Attributable to Common Shareholders and Unitholders
	For the year ended December 31, 2024
	Low End				High End
Net income	$	44.0			$	62.0
Preferred dividends		(25.0	)			(25.0	)
Depreciation and amortization		187.0				187.0
Gain on sale of hotel properties, net		(3.5	)			(3.5	)
Adjustments related to joint ventures		1.0				1.0
FFO		203.5				221.5
Amortization of share-based compensation		21.0				21.0
All other items, net		1.0				3.0
Adjusted FFO	$	225.5			$	245.5
Adjusted FFO per common share and unit-diluted	$	1.45			$	1.58
Diluted weighted-average common shares and units outstanding		155.0				155.0

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 June 30, 2024 (3)
Mortgage Debt
Mortgage loan - 1 hotel	10	Jan 2029	Fixed	5.06%		$	25,000
Mortgage loan - 3 hotels	5	Apr 2026	Floating	5.04%			96,000
Mortgage loan - 4 hotels	5	Apr 2026	Floating	5.61%			85,000
Weighted Average / Mortgage Total				5.28%		$	206,000
Corporate Debt
Revolver (4)	4	May 2028	Floating	7.09%		$	200,000
$225 Million Term Loan Maturing 2026	3	May 2028	Floating	4.07%			225,000
$200 Million Term Loan Maturing 2026	3	January 2028	Floating	7.04%			200,000
$400 Million Term Loan Maturing 2025	5	May 2025	Floating	4.72%			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				4.69%		$	2,025,000
Weighted Average / Total				4.75%		$	2,231,000

Notes:
(1)	The floating interest rate is hedged, or partially hedged, with an interest rate swap.
(2)	Interest rates as of June 30, 2024, inclusive of the impact of interest rate hedges.
(3)	Excludes the impact of fair value adjustments and deferred financing costs.
(4)	As of June 30, 2024, there was $400.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually. In April 2024, the Company borrowed $200.0 million under the Revolver and utilized the proceeds to repay a $200.0 million maturing mortgage loan, reducing the remaining capacity on the Revolver to $400.0 million.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801568739/en/

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

Source: RLJ Lodging Trust

FAQ

What was RLJ Lodging Trust's RevPAR growth in Q2 2024?

RLJ Lodging Trust (RLJ) reported a 2.6% increase in RevPAR to $157.30 in Q2 2024 compared to the same period last year.

How much did RLJ's total revenue increase in Q2 2024?

RLJ Lodging Trust's total revenue increased by 3.5% to $369.3 million in Q2 2024 compared to Q2 2023.

What acquisition did RLJ make in Q2 2024?

RLJ Lodging Trust acquired Hotel Teatro in Denver for $35.5 million in Q2 2024, expecting a 10% yield upon stabilization.

How much did RLJ increase its quarterly dividend?

RLJ Lodging Trust increased its quarterly dividend to $0.15 per share, up from $0.10 in the previous quarter.

What is RLJ's updated RevPAR growth outlook for full-year 2024?

RLJ Lodging Trust updated its full-year 2024 outlook, projecting Comparable RevPAR growth of 1.0% to 2.5%.