RLJ Lodging Trust Results

RLJ Lodging Trust Full Year Pro Forma RevPAR Increased 3.9%

RLJ Lodging Trust Reports Fourth Quarter and Full Year 2015 Results

RLJ Lodging Trust

RLJ Lodging Trust (NYSE: RLJ) yesterday reported results for the quarter and year ended December 31, 2015.

Full Year Highlights

  • Pro forma RevPAR increased 3.9%, Pro forma ADR increased 5.3%, and Pro forma Occupancy decreased 1.4%
  • Achieved Pro forma Hotel EBITDA Margin of 36.4%
  • Pro forma Consolidated Hotel EBITDA increased 6.1% to $405.1 million
  • Adjusted FFO increased 4.5% to $324.7 million
  • Acquired three hotels in key high-growth markets for $175.9 million
  • Sold 23 non-core hotels for $252.5 million
  • Completed and opened two hotel conversion properties
  • Distributed an aggregate cash dividend of $1.32 per share, representing an increase of 26.9% over the prior year
  • Repurchased 8.0 million shares for $225.2 million

Fourth Quarter Highlights

  • Pro forma RevPAR increased 2.5%, Pro forma ADR increased 3.6%, and Pro forma Occupancy decreased 1.0%
  • Achieved Pro forma Hotel EBITDA Margin of 35.5%
  • Pro forma Consolidated Hotel EBITDA increased 4.1% to $95.9 million
  • Sold one non-core hotel for $14.1 million
  • Repurchased 1.1 million shares for $25.2 million

“In 2015, we continued to execute on our strategic initiatives, including driving RevPAR growth, improving our portfolio by recycling non-core assets, and delivering high quality conversions, as well as returning capital to our shareholders,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. “As we look ahead, lodging fundamentals remain positive and our diversified portfolio, supported by our fortress balance sheet, is well-positioned to deliver continued growth.”

Financial and Operating Results

Pro forma RevPAR for the three months ended December 31, 2015, increased 2.5% over the comparable period in 2014, driven by a Pro forma ADR increase of 3.6%, which was offset by a Pro forma Occupancy decrease of 1.0%. Excluding Houston and New York, which experienced softness in the quarter, Pro forma RevPAR growth was 4.8%. Six of the Company’s markets achieved double-digit RevPAR growth, including Dallas, Tampa, Northern California, Indianapolis, Boston, and Salt Lake City, which experienced RevPAR growth of 20.8%, 17.0%, 15.3%, 14.9%, 14.8%, and 10.6%, respectively. For the year ended December 31, 2015, Pro forma RevPAR increased 3.9% over the comparable period in 2014, driven by a Pro forma ADR increase of 5.3%, which was offset by a Pro forma Occupancy decrease of 1.4%.

Pro forma Hotel EBITDA Margin for the three months ended December 31, 2015, decreased 27 basis points over the comparable period in 2014 to 35.5%. Excluding Houston and New York, Pro forma Hotel EBITDA Margin increased 52 basis points. For the year ended December 31, 2015, Pro forma Hotel EBITDA Margin increased nine basis points over the comparable period in 2014 to 36.4%. Excluding Houston and New York, Pro forma Hotel EBITDA Margin increased 87 basis points.

Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels. For the three months ended December 31, 2015, Pro forma Consolidated Hotel EBITDA increased $3.8 million to $95.9 million, representing a 4.1% increase over the comparable period in 2014. For the year ended December 31, 2015, Pro forma Consolidated Hotel EBITDA increased $23.3 million to $405.1 million, representing an increase of 6.1% over the comparable period in 2014.

Adjusted EBITDA for the three months ended December 31, 2015, decreased $0.5 million to $89.8 million, representing a 0.5% decrease over the comparable period in 2014. For the year ended December 31, 2015, Adjusted EBITDA increased $13.2 million to $380.1 million, representing an increase of 3.6% over the comparable period in 2014.

Adjusted FFO for the three months ended December 31, 2015, decreased $1.4 million to $74.8 million, representing a 1.8% decrease over the comparable period in 2014. For the year ended December 31, 2015, Adjusted FFO increased $14.0 million to $324.7 million representing an increase of 4.5% over the comparable period in 2014.

Adjusted FFO per diluted share and unit for the quarter and year ended December 31, 2015, was $0.60 and $2.50, respectively, based on the Company’s diluted weighted-average common shares and units outstanding of 125.6 million and 129.9 million for each period, respectively.

Non-recurring items and other adjustments which were noteworthy for the three months ended December 31, 2015, included a gain of $4.6 million primarily associated with the sale of one hotel, an impairment loss of $1.0 million related to one hotel, and a non-cash deferred tax benefit of $39.9 million related to the release of a valuation allowance. In addition to these items, non-recurring items during the year ended December 31, 2015, also included gains totaling $23.8 million attributed to the sale of 22 other hotels, for a total gain on sale of $28.4 million for the year.

Non-recurring items are included in net income attributable to common shareholders but are excluded from Adjusted EBITDA and Adjusted FFO, as applicable. A complete listing of non-recurring items is provided in the Non-GAAP reconciliation tables in this press release for the quarter and year ended December 31, 2015 and 2014.

Net income attributable to common shareholders for the three months ended December 31, 2015, was $73.8 million, compared to $33.8 million for the comparable period in 2014. For the year ended December 31, 2015, net income attributable to common shareholders was $218.2 million, compared to $135.4 million for the comparable period in 2014.

Net cash flow from operating activities for the year ended December 31, 2015, totaled $328.9 million, compared to $298.8 million for the comparable period in 2014.

Acquisitions

During the year ended December 31, 2015, the Company acquired three hotels for a gross purchase price of approximately $175.9 million.

On July 15, 2015, the Company acquired the 164-room Hyatt Place DC/Downtown/K Street in Washington, DC for $68.0 million, or approximately $415,000 per key. The Company expects that the purchase price will represent a forward capitalization rate of approximately 7.1% based on the hotel's projected 2016 net operating income.

On July 20, 2015, the Company acquired the 170-room Homewood Suites Seattle/Lynnwood in Lynnwood, WA for $37.9 million, or approximately $223,000 per key. The Company expects that the purchase price will represent a forward capitalization rate of approximately 8.0% based on the hotel's projected 2016 net operating income.

On September 25, 2015, the Company acquired the 156-room Residence Inn Palo Alto Los Altos in Los Altos, CA for $70.0 million, or approximately $449,000 per key. The Company expects that the purchase price will represent a forward capitalization rate of approximately 8.1% based on the hotel's projected 2016 net operating income.

Conversions

On August 24, 2015, the Company completed the conversion of the 167-room SpringHill Suites Houston Downtown/Convention Center in Houston, TX for an all-in investment of $32.6 million, or approximately $195,000 per key. The Company expects a forward capitalization rate of approximately 8.0% based on the hotel's projected 2016 net operating income.

On September 19, 2015, the Company completed the conversion of the 166-room Courtyard San Francisco Union Square in San Francisco, CA for an all-in investment of $56.5 million, or approximately $340,000 per key. The Company expects a forward capitalization rate of approximately 8.6% based on the hotel's projected 2016 net operating income.

Dispositions

During the year ended December 31, 2015, the Company sold 23 hotels for total proceeds of approximately $252.5 million.

On February 23, 2015, the Company sold a portfolio of 20 hotels totaling 2,461 rooms for approximately $230.3 million.

On May 22, 2015, the Company sold the 63-room Fairfield Inn & Suites Valparaiso in Valparaiso, IN for $2.4 million.

On July 7, 2015, the Company sold the 80-room Residence Inn South Bend in South Bend, IN for $5.8 million.

On October 14, 2015, the Company sold the 221-room Embassy Suites Columbus in Columbus, OH for $14.1 million.

Balance Sheet

During the year ended December 31, 2015, the Company repaid approximately $165.0 million of property level debt associated with 20 assets.

                 
Loan   Hotels   Maturity   Floating / Fixed  

Balance as of Debt

Payoff

Capmark Financial Group   1   May 2015   Fixed   $ 10,513
Capmark Financial Group 1 Jun 2015 Fixed 4,561
Barclays Bank 12 Jun 2015 Fixed 107,130
Barclays Bank 4 Jun 2015 Fixed 26,689
Capmark Financial Group 1 Jul 2015 Fixed 6,172
Barclays Bank   1   Sep 2015   Fixed     9,939
Total Debt Payoff   20           $ 165,004

Note: Excludes $1.6 million of amortization paid down during the year.

 

On July 1, 2015, the Company drew down the entire $150.0 million of funds available under the 2014 Seven-Year Term Loan. Additionally, the Company drew the remaining $7.0 million available under its first mortgage loan on the Marriott Louisville Downtown.

On September 25, 2015, the Company assumed approximately $33.4 million of property-level CMBS debt associated with the Residence Inn Palo Alto Los Altos.

As of December 31, 2015, the Company had $134.2 million of unrestricted cash on its balance sheet, $300.0 million available on its revolving credit facility, and $1.6 billion of debt outstanding. The Company’s ratio of net debt to Adjusted EBITDA, pro forma for acquisitions and dispositions, for the year ended December 31, 2015, was 3.8 times.

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, 2016, to shareholders of record as of December 31, 2015.

For the year ended December 31, 2015, the Company distributed a total dividend of $1.32 per common share of beneficial interest, representing an increase of 26.9% over the prior year's annual distribution.

Share Buyback

During the year ended December 31, 2015, the Company's Board of Trustees authorized an initial share repurchase of $200.0 million of the Company's common shares on May 1, 2015 and upsized the program to $400.0 million on October 30, 2015.

In the fourth quarter of 2015, the Company repurchased 1.1 million shares for $25.2 million at an average price per share of $24.00. In aggregate, the Company repurchased 8.0 million shares for $225.2 million at an average price per share of $27.99. The Company’s authorized share buyback program has a remaining capacity of $174.8 million.

Subsequent Events

On February 22, 2016, the Company sold the 62-room Holiday Inn Express Merrillville in Merrillville, IN for $2.9 million.

2016 Outlook

The Company’s outlook does not include operational results from the recently sold Holiday Inn Express Merrillville and excludes potential future acquisitions and dispositions, which could result in a material change to the Company’s outlook. The 2016 outlook is also based on a number of other assumptions, many of which are outside the Company’s control and all of which are subject to change.

For the full year 2016, the Company anticipates:

 
        Current Outlook
Pro forma RevPAR growth (1)       3% to 5%
Pro forma Hotel EBITDA Margin (1)       36.5% to 37.5%
Pro forma Consolidated Hotel EBITDA       $425.0M to $450.0M
Corporate Cash General & Administrative       $27.5M to $28.5M
         

(1) Excludes non-comparable hotels. Properties closed for renovations are considered non-comparable and therefore are excluded for periods in which they are closed.

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust focused on acquiring premium-branded, focused-service and compact full-service hotels. The Company owns 125 hotels with approximately 20,800 rooms, located in 21 states and the District of Columbia.

 

RLJ Lodging Trust

Non-GAAP and Accounting Commentary

Non-Generally Accepted Accounting Principles (“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) Adjusted EBITDA, and (5) Hotel EBITDA. 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, Adjusted EBITDA, and Hotel EBITDA 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 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.

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

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. The Company presents EBITDA attributable to common shareholders, which includes OP units, because the OP units are redeemable for common shares of the Company. The Company believes it is meaningful for the investor to understand EBITDA attributable to all common shares and OP units.

Hotel EBITDA

With respect to Consolidated Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and 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 results for periods prior to ownership, includes non-comparable hotels which were not open for operation or were closed for renovations for comparable periods, and excludes sold hotels. Pro forma Hotel EBITDA excludes the results of non-comparable hotels.

Adjustments to FFO and EBITDA

The Company adjusts FFO and EBITDA for certain additional items, such as transaction and pursuit costs, the amortization of share based compensation, and certain other expenses that the Company considers outside the normal course of business or extraordinary. The Company believes that Adjusted FFO and Adjusted EBITDA provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income, FFO, and EBITDA, is beneficial to an investor’s understanding of its operating performance. The Company adjusts FFO and EBITDA for the following items, as applicable:

  • Transaction and Pursuit Costs: The Company excludes transaction and pursuit costs expensed during the period because it believes they do not reflect the underlying performance of the Company.
  • Non-Cash Expenses: The Company excludes the effect of certain non-cash items because it believes they do not reflect the underlying performance of the Company. The Company has excluded the amortization of share based compensation, non-cash gain or loss on the disposal of assets, non-cash debt extinguishment costs, the accelerated amortization of deferred financing fees, impairment losses, and non-cash deferred tax benefits.
 

RLJ Lodging Trust

Consolidated Balance Sheets

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

 
   

December 31,

2015

 

December 31,

2014

Assets    
Investment in hotel properties, net $ 3,674,999 $ 3,518,803
Cash and cash equivalents 134,192 262,458
Restricted cash reserves 55,455 63,054
Hotel and other receivables, net of allowance of $117 and $166, respectively 25,755 25,691
Deferred financing costs, net 8,096 11,421
Deferred income tax asset 49,978 7,502
Prepaid expense and other assets 31,736 42,115
Assets of hotel properties held for sale       197,335  

Total assets

$ 3,980,211   $ 4,128,379  
Liabilities and Equity
Mortgage loans $ 407,755 $ 532,747
Term loans 1,175,000 1,025,000
Accounts payable and other liabilities 129,192 129,388
Deferred income tax liability 9,801 7,879
Advance deposits and deferred revenue 11,647 9,984
Accrued interest 4,883 2,783
Distributions payable   41,409     42,114  

Total liabilities

1,779,687 1,749,895

Equity

Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized; zero shares issued and outstanding at December 31, 2015 and 2014, respectively.
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 124,635,675 and 131,964,706 shares issued and outstanding at December 31, 2015 and 2014, respectively. 1,246 1,319
Additional paid-in-capital 2,195,732 2,419,731
Accumulated other comprehensive loss (16,602 ) (13,644 )
Retained earnings (distributions in excess of net earnings)   2,439     (46,415 )
Total shareholders’ equity 2,182,815 2,360,991
Noncontrolling interest:
Noncontrolling interest in joint venture 6,177 6,295
Noncontrolling interest in Operating Partnership   11,532     11,198  
Total noncontrolling interest   17,709     17,493  
Total equity   2,200,524     2,378,484  
Total liabilities and equity $ 3,980,211   $ 4,128,379  
 
   

RLJ Lodging Trust

Consolidated Statements of Operations

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

 

For the three months ended

December 31,

For the year ended

December 31,

2015   2014 2015   2014
    (unaudited)   (unaudited)        
Revenue
Operating revenue
Room revenue $ 237,399 $ 242,035 $ 985,361 $ 969,402
Food and beverage revenue 29,211 29,614 114,818 107,538
Other operating department revenue   8,653     8,462     36,161     32,257  
Total revenue $ 275,263   $ 280,111   $ 1,136,340   $ 1,109,197  
Expense
Operating expense
Room expense $ 54,498 $ 54,402 $ 220,101 $ 213,071
Food and beverage expense 20,367 20,452 81,117 75,468
Management and franchise fee expense 27,758 28,228 116,462 114,802
Other operating expense   58,481     62,658     239,966     243,004  
Total property operating expense 161,104 165,740 657,646 646,345
Depreciation and amortization 41,398 38,753 156,226 144,294
Impairment loss 1,003 1,003 9,200
Property tax, insurance and other 18,900 18,379 76,682 71,443
General and administrative 8,769 10,378 37,810 41,671
Transaction and pursuit costs   53     475     3,058     4,850  
Total operating expense   231,227     233,725     932,425     917,803  
Operating income 44,036 46,386 203,915 191,394
Other income 495 244 1,598 807
Interest income 382 259 1,563 1,881
Interest expense   (14,903 )   (14,164 )   (54,788 )   (56,810 )
Income from continuing operations before income tax benefit (expense) 30,010 32,725 152,288 137,272
Income tax benefit (expense)   39,741     17     39,126     (1,145 )
Income from continuing operations 69,751 32,742 191,414 136,127
Gain on sale of hotel properties   4,616     1,328     28,398     353  
Net income 74,367 34,070 219,812 136,480
Net income attributable to noncontrolling interests
Noncontrolling interest in consolidated joint venture (51 ) (69 ) (77 ) (171 )
Noncontrolling interest in the Operating Partnership   (530 )   (156 )   (1,514 )   (868 )
Net income attributable to common shareholders $ 73,786   $ 33,845   $ 218,221   $ 135,441  
Basic per common share data:
Net income attributable to common shareholders $ 0.58   $ 0.26   $ 1.69   $ 1.06  
Weighted-average number of common shares   124,256,834     131,189,673     128,444,469     127,360,669  
Diluted per common share data:
Net income attributable to common shareholders $ 0.59   $ 0.25   $ 1.68   $ 1.05  
Weighted-average number of common shares   124,679,650     132,186,832     128,967,754     128,293,843  
 
   

RLJ Lodging Trust

Reconciliation of Net Income to Non-GAAP Measures

(Amounts in thousands, except per share data)

(unaudited)

 

Funds From Operations (FFO)

 

For the three months ended

December 31,

For the year ended

December 31,

    2015   2014   2015   2014
Net income $ 74,367   $ 34,070 $ 219,812   $ 136,480
Depreciation and amortization 41,398 38,753 156,226 144,294
Gain on sale of hotel properties (4,616 ) (1,328 ) (28,398 ) (353 )
Impairment loss 1,003 1,003 9,200
Noncontrolling interest in joint venture (51 ) (69 ) (77 ) (171 )
Adjustments related to joint venture (1)   (43 )   (47 )   (170 )   (186 )
FFO attributable to common shareholders 112,058 71,379 348,396 289,264
Non-cash income tax benefit (2) (39,845 ) (39,845 )
Transaction and pursuit costs 53 475 3,058 4,850
Amortization of share based compensation 2,514 3,844 13,002 15,088
Loan related costs (3) 97 1,073
Other expenses (4)       432         432  
Adjusted FFO attributable to common shareholders $ 74,780   $ 76,130   $ 324,708   $ 310,707  
 
Adjusted FFO per common share and unit-basic $ 0.60 $ 0.58 $ 2.51 $ 2.42
Adjusted FFO per common share and unit-diluted $ 0.60 $ 0.57 $ 2.50 $ 2.41
 
Basic weighted-average common shares and units outstanding (5) 125,151 132,084 129,338 128,255
Diluted weighted-average common shares and units outstanding (5) 125,574 133,081 129,862 129,188
 

Note:

(1)   Includes depreciation and amortization expense allocated to the noncontrolling interest in the joint venture.
(2)

Reflects the non-cash portion of income tax benefit (expense) related to the release of a valuation allowance.

(3) Represents debt extinguishment costs and accelerated amortization of deferred financing fees.
(4) Represents legal and other expenses outside the normal course of operations.
(5) Includes 0.9 million operating partnership units.
 
   

RLJ Lodging Trust

Reconciliation of Net Income to 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,

    2015   2014   2015   2014
Net income $ 74,367   $ 34,070 $ 219,812   $ 136,480
Depreciation and amortization 41,398 38,753 156,226 144,294
Interest expense, net (1) 14,899 14,153 54,758 56,144
Income tax (benefit) expense (39,741 ) (17 ) (39,126 ) 1,145
Noncontrolling interest in joint venture (51 ) (69 ) (77 ) (171 )
Adjustments related to joint venture (2)   (43 )   (47 )   (170 )   (186 )
EBITDA 90,829 86,843 391,423 337,706
Transaction and pursuit costs 53 475 3,058 4,850
Impairment loss 1,003 1,003 9,200
Gain on sale of property (4,616 ) (1,328 ) (28,398 ) (353 )
Amortization of share based compensation 2,514 3,844 13,002 15,088
Other expenses (3)       432         432  
Adjusted EBITDA 89,783 90,266 380,088 366,923
General and administrative (4) 6,255 6,534 24,808 26,583
Operating results from noncontrolling interest in joint venture 94 116 247 357
Other corporate adjustments   (294 )   149     (730 )   97  
Consolidated Hotel EBITDA   95,838     97,065     404,413     393,960  
Pro forma adjustments - Income from sold properties 85 (6,415 ) (4,102 ) (31,320 )
Pro forma adjustments - Income from prior ownership       1,510     4,785     19,133  
Pro forma Consolidated Hotel EBITDA   95,923     92,160     405,096     381,773  
Non-comparable hotels (5)   (3,287 )   (1,386 )   (12,609 )   (6,346 )
Pro forma Hotel EBITDA $ 92,636   $ 90,774   $ 392,487   $ 375,427  
 

Note:

(1)   Interest expense is net of interest income, excluding amounts attributable to investment in loans of $0.3 million and $1.5 million for the three and twelve months ended December 31, 2015, respectively, and $0.2 million and $1.2 million for the three and twelve months ended December 31, 2014, respectively.
(2) Includes depreciation, amortization, and interest expense allocated to the noncontrolling interest in the joint venture.
(3) Represents legal and other expenses outside the normal course of operations.
(4) General and administrative expenses exclude amortization of share based compensation, which is reflected in Adjusted EBITDA.
(5) Reflects the results of eight non-comparable hotels that were not open for the entirety of certain comparable periods: Residence Inn Atlanta Midtown/Georgia Tech, Courtyard Waikiki Beach, Hilton Cabana Miami Beach, Fairfield Inn & Suites Key West, Courtyard San Francisco Union Square, SpringHill Suites Houston Downtown/Convention Center, Homewood Suites Seattle/Lynnwood, and Hyatt Place DC/Downtown/K Street.
 
         

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, 2015

Secured Debt
PNC Bank - 5 hotels 5 May 2017 Floating 2.78% $ 74,000
Wells Fargo - 4 hotels 7 Sep 2020 Floating (2) 4.19% 149,250
Wells Fargo - 4 hotels 7 Oct 2021 Floating (2) 3.99% 150,000
Wells Fargo - 1 hotel (4) 10   Jun 2022   Fixed   5.25%     34,505
Weighted Average / Secured Total 3.95% $ 407,755
 
Unsecured Debt
Credit Facility (5) 4 Nov 2017 Floating 2.18% $
2013 Five-Year Term Loan 5 Aug 2018 Floating (2)(3) 3.10% 400,000
2012 Five-Year Term Loan 5 Mar 2019 Floating (2) 2.72% 400,000
2012 Seven-Year Term Loan 7 Nov 2019 Floating (2) 4.04% 225,000
2014 Seven-Year Term Loan 7   Jan 2022   Floating (2)   3.43%     150,000
Weighted Average / Unsecured Total 3.19% $ 1,175,000
                 
Weighted Average / Total Debt             3.39%   $ 1,582,755
 

Note:

(1)   Interest rates as of December 31, 2015.
(2) The floating interest rate is hedged with an interest rate swap.
(3) Reflects interest rate swap on $350.0 million.
(4) Includes the net impact of a fair value adjustment.
(5) There is $300.0 million of borrowing capacity on the Credit Facility, which is charged an unused commitment fee of 0.35% annually.
 
 

RLJ Lodging Trust

Acquisitions

(unaudited)

 
Acquisitions   Location  

Acquisition

Date

 

Management

Company

  Rooms  

Gross

Purchase Price

($ in millions)

 

%

Interest

2015 Acquisitions            
Hyatt Place DC/Downtown/K Street Washington, DC Jul 15, 2015 Aimbridge Hospitality 164 $ 68.0 100 %
Homewood Suites Seattle/Lynnwood Lynnwood, WA Jul 20, 2015 InnVentures 170 37.9 100 %
Residence Inn Palo Alto Los Altos Los Altos, CA Sep 25, 2015 InnVentures 156     70.0   100 %
2015 Total 490   $ 175.9   100 %
 
2014 Acquisitions
Hyatt House Charlotte Center City Charlotte, NC Mar 12, 2014 Hyatt Affiliate 163 $ 32.5 100 %
Hyatt House Cypress Anaheim Cypress, CA Mar 12, 2014 Hyatt Affiliate 142 14.8 100 %
Hyatt House Emeryville SF Bay Area Emeryville, CA Mar 12, 2014 Hyatt Affiliate 234 39.3 100 %
Hyatt House San Diego Sorrento Mesa San Diego, CA Mar 12, 2014 Hyatt Affiliate 193 36.0 100 %
Hyatt House San Jose Silicon Valley San Jose, CA Mar 12, 2014 Hyatt Affiliate 164 44.2 100 %
Hyatt House San Ramon San Ramon, CA Mar 12, 2014 Hyatt Affiliate 142 20.8 100 %
Hyatt House Santa Clara Santa Clara, CA Mar 12, 2014 Hyatt Affiliate 150 40.6 100 %
Hyatt Market Street The Woodlands The Woodlands, TX Mar 12, 2014 Hyatt Corporation 70 25.8 100 %
Hyatt Place Fremont Silicon Valley Fremont, CA Mar 12, 2014 Hyatt Affiliate 151 23.5 100 %
Hyatt Place Madison Downtown Madison, WI Mar 12, 2014 Hyatt Affiliate 151 35.1 100 %
Courtyard Portland City Center Portland, OR May 22, 2014 Sage Hospitality 256 67.0 100 %
Embassy Suites Irvine Orange County Irvine, CA May 22, 2014 Sage Hospitality 293 53.0 100 %
Hilton Cabana Miami Beach Miami Beach, FL Jun 19, 2014 Highgate Hotels 231 71.7 100 %
Hyatt Atlanta Midtown Atlanta, GA Jul 14, 2014 Interstate Hotels and Resorts 194 49.5 100 %
DoubleTree Grand Key Resort (2) Key West, FL Sep 11, 2014 Interstate Hotels and Resorts 215     77.0   100 %
2014 Total (1) 2,749   $ 630.7   100 %
Total Acquisitions 3,239   $ 806.6   100 %
 

Note:

(1)   Amounts are rounded for presentation purposes.
(2) Purchase price does not include $1.3 million paid for five condominium units.
 
 
RLJ Lodging Trust
Pro forma Operating Statistics — Top 60 Assets
 
Property   City/State   # of Rooms   Pro forma Consolidated

Hotel EBITDA

Marriott Louisville Downtown   Louisville, KY   616   $ 16,423
DoubleTree NYC Metropolitan New York, NY 764 15,209
Courtyard Austin Dtwn Conv Ctr Austin, TX 270 9,673
Hilton New York Fashion District New York, NY 280 9,609
Hilton Garden Inn New York W 35th St New York, NY 298 9,278
Courtyard Portland City Center Portland, OR 256 7,856
Embassy Suites Tampa Dtwn Conv Ctr Tampa, FL 360 7,315
Courtyard Chicago Downtown Mag Mile Chicago, IL 306 7,135
Hilton Cabana Miami Beach Miami Beach, FL 231 6,680
Renaissance Pittsburgh Hotel Pittsburgh, PA 300 6,567
Hilton Garden Inn SF Oakland Bay Bridge Emeryville, CA 278 6,312
Doubletree Grand Key Resort Key West, FL 216 6,171
Embassy Suites Boston Waltham Waltham, MA 275 6,000
Residence Inn Palo Alto Los Altos Los Altos, CA 156 5,742
Marriott Denver South @ Park Meadows Lone Tree, CO 279 5,730
Hyatt House San Jose Silicon Valley San Jose, CA 164 5,560
Courtyard Charleston Historic District Charleston, SC 176 5,554
Fairfield Inn & Suites DC Downtown Washington, DC 198 5,526
Residence Inn Austin Dtwn Conv Ctr Austin, TX 179 5,389
Hilton Garden Inn New Orleans Conv Ctr New Orleans, LA 286 5,316
Marriott Denver Airport @ Gateway Park Aurora, CO 238 5,286
Renaissance Ft Lauderdale Plantation Plantation, FL 250 5,037
Hyatt House Emeryville SF Bay Area Emeryville, CA 234 4,938
Hilton Garden Inn Los Angeles Hollywood Los Angeles, CA 160 4,824
Hyatt House Santa Clara Santa Clara, CA 150 4,802
Residence Inn Bethesda Downtown Bethesda, MD 188 4,584
Homewood Suites Washington DC Downtown Washington, DC 175 4,576
Embassy Suites Los Angeles Downey Downey, CA 220 4,301
Courtyard New York Manhattan Upper East New York, NY 226 4,292
Hyatt Atlanta Midtown Atlanta, GA 194 4,240
Marriott Austin South Austin, TX 211 4,192
Fairfield Inn & Suites Key West Key West, FL 106 4,083
Courtyard Waikiki Beach Honolulu, HI 403 4,004
Hyatt Place Fremont Silicon Valley Fremont, CA 151 3,902
Renaissance Boulder Flatiron Hotel Broomfield, CO 232 3,887
Embassy Suites Irvine Orange Cnty Arprt Irvine, CA 293 3,836
Courtyard Houston By The Galleria Houston, TX 190 3,568
Hyatt House San Diego Sorrento Mesa San Diego, CA 193 3,400
Embassy Suites West Palm Beach Central West Palm Beach, FL 194 3,366
Hyatt House Charlotte Center City Charlotte, NC 163 3,343
Residence Inn Louisville Downtown Louisville, KY 140 3,268
Residence Inn National Harbor DC Oxon Hill, MD 162 3,242
Residence Inn Indy Dtwn On The Canal Indianapolis, IN 134 3,202
Residence Inn Houston By The Galleria Houston, TX 146 3,175
Residence Inn Chicago Oak Brook Oak Brook, IL 156 3,171
Hyatt Market Street The Woodlands The Woodlands, TX 70 3,145
Hyatt House San Ramon San Ramon, CA 142 3,044
Hampton Inn Garden City Garden City, NY 143 3,037
Courtyard Houston Dtwn Conv Ctr Houston, TX 191 3,035
Springhill Suites Portland Hillsboro Hillsboro, OR 106 2,969
Hilton Garden Inn Pittsburgh Univ Pl Pittsburgh, PA 202 2,895
Hyatt Place Madison Downtown Madison, WI 151 2,893
Hyatt House Dallas Lincoln Park Dallas, TX 155 2,883
Residence Inn Houston Dtwn Conv Ctr Houston, TX 171 2,835
Courtyard Atlanta Buckhead Atlanta, GA 181 2,818
Hampton Inn Houston Near The Galleria Houston, TX 176 2,736
Marriott Chicago Midway Chicago, IL 200 2,635
Hilton Garden Inn Bloomington Bloomington, IN 168 2,594
Springhill Suites Denver N Westminster Westminster, CO 164 2,563
Hyatt House Houston Galleria Houston, TX 147     2,115
Top 60 Assets 13,164 295,761
Other (1) 7,733     109,335
Total Portfolio       20,897   $ 405,096
 
 
RLJ Lodging Trust
Pro forma Operating Statistics

(unaudited)

 
For the three months ended December 31, 2015
         
% of
Hotel
Top Markets       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var Q4
NYC 5 95.9 %   96.2 %   (0.3 )% $ 258.11   $ 262.04   (1.5 )% $ 247.51   $ 251.96   (1.8 )% 14 %
Chicago 15 62.4 % 67.5 % (7.6 )% 147.14 141.01 4.3 % 91.83 95.19 (3.5 )% 7 %
Austin 13 77.6 % 76.9 % 0.9 % 163.13 160.75 1.5 % 126.51 123.54 2.4 % 9 %
Denver 13 67.3 % 68.4 % (1.6 )% 129.98 124.49 4.4 % 87.49 85.11 2.8 % 8 %
Houston 9 65.9 % 74.9 % (12.1 )% 157.13 158.90 (1.1 )% 103.50 119.08 (13.1 )% 6 %
DC 7 67.2 % 70.1 % (4.1 )% 175.00 166.96 4.8 % 117.66 117.01 0.6 % 5 %
Other 58 76.0 %   74.9 %   1.4 %   154.92     146.10   6.0 %   117.67     109.39   7.6 % 51 %
Total 120 74.5 %   75.3 %   (1.0 )% $ 165.50   $ 159.82   3.6 % $ 123.24   $ 120.26   2.5 % 100 %
 
% of
Hotel
Service Level       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var Q4
Focused-Service 99 73.7 % 74.5 % (1.0 )% $ 155.32 $ 149.79 3.7 % $ 114.53 $ 111.54 2.7 % 66 %
Compact Full-Service 20 78.1 % 79.1 % (1.2 )% 191.27 185.27 3.2 % 149.48 146.56 2.0 % 30 %
Full-Service 1 60.4 %   61.2 %   (1.4 )%   173.08     165.76   4.4 %   104.50     101.50   2.9 % 4 %
Total 120 74.5 %   75.3 %   (1.0 )% $ 165.50   $ 159.82   3.6 % $ 123.24   $ 120.26   2.5 % 100 %
 
% of
Hotel
Chain Scale       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var Q4
Upper Upscale 18 73.0 % 73.6 % (0.9 )% $ 174.99 $ 166.84 4.9 % $ 127.76 $ 122.86 4.0 % 26 %
Upscale 86 76.0 % 76.7 % (0.9 )% 166.57 161.83 2.9 % 126.55 124.05 2.0 % 68 %
Upper Midscale 15 68.3 % 68.7 % (0.6 )% 134.94 130.99 3.0 % 92.20 90.02 2.4 % 6 %
Midscale 1 56.5 %   81.2 %   (30.5 )%   100.31     77.80   28.9 %   56.63     63.16   (10.3 )% %
Total 120 74.5 %   75.3 %   (1.0 )% $ 165.50   $ 159.82   3.6 % $ 123.24   $ 120.26   2.5 % 100 %
 
% of
Hotel
Flags       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var Q4
Residence Inn 28 74.0 % 76.7 % (3.5 )% $ 149.32 $ 143.17 4.3 % $ 110.54 $ 109.86 0.6 % 16 %
Courtyard 22 71.7 % 74.9 % (4.3 )% 162.34 161.12 0.8 % 116.35 120.62 (3.5 )% 15 %
Hyatt House 11 82.5 % 76.0 % 8.6 % 161.30 151.05 6.8 % 133.05 114.74 16.0 % 10 %
Hilton Garden Inn 9 76.9 % 77.6 % (0.9 )% 181.15 175.25 3.4 % 139.35 136.04 2.4 % 10 %
SpringHill Suites 6 79.2 % 78.8 % 0.4 % 154.79 143.10 8.2 % 122.53 112.82 8.6 % 7 %
Embassy Suites 7 71.6 % 69.9 % 2.3 % 126.63 125.81 0.6 % 90.60 88.00 3.0 % 3 %
Hampton Inn 6 68.0 % 70.0 % (2.9 )% 144.37 136.58 5.7 % 98.13 95.64 2.6 % 3 %
Fairfield Inn & Suites 8 71.7 % 72.3 % (0.8 )% 121.92 114.74 6.3 % 87.40 82.92 5.4 % 4 %
Marriott 5 63.4 % 64.3 % (1.4 )% 162.83 158.14 3.0 % 103.25 101.67 1.6 % 8 %
Renaissance 3 70.7 % 72.1 % (2.0 )% 164.46 157.29 4.6 % 116.25 113.41 2.5 % 4 %
DoubleTree 3 89.3 % 91.6 % (2.4 )% 238.57 238.30 0.1 % 213.12 218.19 (2.3 )% 8 %
Hyatt 2 77.5 % 76.1 % 1.9 % 200.55 190.30 5.4 % 155.50 144.75 7.4 % 2 %
Hyatt Place 2 83.5 % 76.3 % 9.4 % 151.52 144.03 5.2 % 126.58 109.96 15.1 % 2 %
Hilton 2 85.3 % 87.8 % (2.9 )% 258.40 249.82 3.4 % 220.37 219.32 0.5 % 5 %
Homewood Suites 2 64.9 % 59.9 % 8.2 % 173.69 168.70 3.0 % 112.64 101.07 11.4 % 2 %
Other 4 57.7 %   66.6 %   (13.3 )%   143.38     128.83   11.3 %   82.75     85.76   (3.5 )% 1 %
Total 120 74.5 %   75.3 %   (1.0 )% $ 165.50   $ 159.82   3.6 % $ 123.24   $ 120.26   2.5 % 100 %
 
 
RLJ Lodging Trust

Pro forma Operating Statistics

(unaudited)

 
For the twelve months ended December 31, 2015
 
          % of
Hotel
Top Markets       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var FY
NYC 5 95.5 %   96.0 %   (0.6 )% $ 234.75   $ 239.35   (1.9 )% $ 224.20   $ 229.86   (2.5 )% 11 %
Chicago 15 69.9 % 74.5 % (6.2 )% 150.21 136.99 9.7 % 105.05 102.12 2.9 % 8 %
Austin 13 80.1 % 80.4 % (0.4 )% 161.45 152.92 5.6 % 129.32 123.00 5.1 % 9 %
Denver 13 75.7 % 76.9 % (1.6 )% 135.46 128.43 5.5 % 102.58 98.82 3.8 % 8 %
Houston 9 70.2 % 78.1 % (10.1 )% 162.78 159.56 2.0 % 114.22 124.59 (8.3 )% 6 %
DC 7 74.7 % 76.4 % (2.2 )% 176.90 171.01 3.4 % 132.17 130.63 1.2 % 6 %
Other 59 79.2 %   78.8 %   0.5 %   159.73     148.60   7.5 %   126.50     117.14   8.0 % 52 %
Total 121 78.6 %   79.7 %   (1.4 )% $ 165.83   $ 157.45   5.3 % $ 130.28   $ 125.42   3.9 % 100 %
 
% of
Hotel
Service Level       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var FY
Focused-Service 100 77.9 % 79.3 % (1.8 )% $ 158.14 $ 148.67 6.4 % $ 123.18 $ 117.88 4.5 % 70 %
Compact Full-Service 20 81.8 % 82.0 % (0.2 )% 184.76 179.15 3.1 % 151.20 146.89 2.9 % 26 %
Full-Service 1 67.2 %   69.1 %   (2.9 )%   182.27     178.46   2.1 %   122.42     123.40   (0.8 )% 4 %
Total 121 78.6 %   79.7 %   (1.4 )% $ 165.83   $ 157.45   5.3 % $ 130.28   $ 125.42   3.9 % 100 %
 
% of
Hotel
Chain Scale       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var FY
Upper Upscale 18 77.8 % 77.4 % 0.4 % $ 174.02 $ 166.83 4.3 % $ 135.32 $ 129.18 4.8 % 25 %
Upscale 86 79.5 % 80.9 % (1.7 )% 166.14 157.80 5.3 % 132.01 127.60 3.5 % 67 %
Upper Midscale 16 75.2 % 76.1 % (1.3 )% 146.50 138.08 6.1 % 110.15 105.14 4.8 % 8 %
Midscale 1 62.8 %   85.5 %   (26.6 )%   106.43     74.73   42.4 %   66.81     63.93   4.5 % %
Total 121 78.6 %   79.7 %   (1.4 )% $ 165.83   $ 157.45   5.3 % $ 130.28   $ 125.42   3.9 % 100 %
 
% of
Hotel
Flags       Occupancy   ADR   RevPAR   EBITDA
# of Hotels 2015   2014   Var 2015   2014   Var 2015   2014   Var FY
Residence Inn 28 78.3 % 81.5 % (4.0 )% $ 152.04 $ 143.26 6.1 % $ 119.00 $ 116.82 1.9 % 17 %
Courtyard 22 76.6 % 78.8 % (2.8 )% 165.43 157.04 5.3 % 126.75 123.77 2.4 % 17 %
Hyatt House 11 82.1 % 81.3 % 1.0 % 163.62 148.97 9.8 % 134.39 121.16 10.9 % 9 %
Hilton Garden Inn 9 79.7 % 80.0 % (0.3 )% 176.47 170.12 3.7 % 140.73 136.05 3.4 % 9 %
SpringHill Suites 6 82.3 % 81.1 % 1.5 % 161.22 151.23 6.6 % 132.63 122.60 8.2 % 7 %
Embassy Suites 7 76.0 % 77.3 % (1.6 )% 138.83 132.65 4.7 % 105.55 102.54 2.9 % 4 %
Hampton Inn 6 77.0 % 76.7 % 0.3 % 155.70 145.57 7.0 % 119.81 111.66 7.3 % 4 %
Fairfield Inn & Suites 9 77.1 % 76.7 % 0.5 % 122.88 114.58 7.2 % 94.78 87.91 7.8 % 4 %
Marriott 5 70.8 % 72.7 % (2.6 )% 166.61 160.18 4.0 % 118.01 116.44 1.4 % 9 %
Renaissance 3 76.8 % 75.3 % 2.0 % 163.05 157.20 3.7 % 125.15 118.31 5.8 % 4 %
DoubleTree 3 90.0 % 93.0 % (3.3 )% 220.48 219.45 0.5 % 198.35 204.19 (2.9 )% 6 %
Hyatt 2 77.0 % 74.1 % 3.9 % 205.22 192.78 6.5 % 158.07 142.87 10.6 % 2 %
Hyatt Place 2 86.0 % 84.1 % 2.3 % 158.43 141.08 12.3 % 136.26 118.62 14.9 % 2 %
Hilton 2 90.3 % 88.7 % 1.8 % 241.16 243.35 (0.9 )% 217.81 215.92 0.9 % 3 %
Homewood Suites 2 75.8 % 71.1 % 6.6 % 194.21 192.64 0.8 % 147.24 137.02 7.5 % 2 %
Other 4 62.8 %   70.8 %   (11.3 )%   144.68     124.69   16.0 %   90.87     88.28   2.9 % 1 %
Total 121 78.6 %   79.7 %   (1.4 )% $ 165.83   $ 157.45   5.3 % $ 130.28   $ 125.42   3.9 % 100 %
 



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