- Pro forma RevPAR increased 6.6% and Hotel EBITDA Margin achieved a record high at 38.5%

- Raises guidance across the board to reflect strong performance and acquisitions

- Announces 36% dividend increase to $0.30 per share

BETHESDA, Md.--RLJ Lodging Trust (the "Company") (NYSE: RLJ) today reported results for the three and six months ended June 30, 2014.

Second Quarter Highlights

  • Pro forma RevPAR increased 6.6%, Pro forma ADR increased 2.8%, and Pro forma Occupancy increased 3.6%
  • Pro forma Hotel EBITDA Margin increased 95 basis points to 38.5%
  • Pro forma Consolidated Hotel EBITDA increased 8.9% to $114.6 million
  • Adjusted FFO increased 25.3% to $93.6 million
  • Acquired three hotels in attractive high-growth markets for almost $200 million, and disposed of one hotel for $13.5 million
  • Declared a cash dividend of $0.22 per share for the quarter

"We are very pleased with the strong performance of our portfolio. Our EBITDA margin this quarter was a record high for us since our IPO," commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. "We continue to execute our growth strategy through both organic and external growth. In total, we have acquired more than $550 million of assets this year. As we look forward, we are better positioned than ever to deliver continued growth and value to our shareholders."

Financial and Operating Results

Performance metrics such as Occupancy, Average Daily Rate ("ADR"), Revenue Per Available Room ("RevPAR"), Hotel EBITDA, and Hotel EBITDA Margin are pro forma. The prefix "pro forma" as defined by the Company, denotes operating results which include results for periods prior to its ownership. Pro forma RevPAR and Pro forma Hotel EBITDA Margin are reported on a comparable basis and therefore exclude hotels sold during the period and non-comparable hotels that were not open for operation or closed for renovations for comparable periods. Explanations of EBITDA, Adjusted EBITDA, Hotel EBITDA, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, are included at the end of this release.

Pro forma RevPAR for the three months ended June 30, 2014, increased 6.6% over the comparable period in 2013, driven by a Pro forma ADR increase of 2.8% and a Pro forma Occupancy increase of 3.6%. Among the Company's top six markets, the best performers in the quarter were Houston, Denver, and Austin, which experienced RevPAR growth of 12.3%, 9.7%, and 7.3%, respectively. For the six months ended June 30, 2014, Pro forma RevPAR increased 6.3% over the comparable period in 2013, driven by a Pro forma ADR increase of 3.1% and a Pro forma Occupancy increase of 3.2%.

Pro forma Hotel EBITDA Margin for the three months ended June 30, 2014, increased 95 basis points over the comparable period in 2013 to 38.5%, adjusted to normalize 2013 ground rent at the Courtyard Waikiki Beach. For the six months ended June 30, 2014, Pro forma Hotel EBITDA margin increased 40 basis points over the comparable period in 2013 to 35.4%.

Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels and is adjusted to normalize 2013 ground rent at the Courtyard Waikiki Beach. For the three months ended June 30, 2014, Pro forma Consolidated Hotel EBITDA increased $9.4 million to $114.6 million, representing an 8.9% increase over the comparable period in 2013. For the six months ended June 30, 2014, Pro forma Consolidated Hotel EBITDA increased $12.5 million to $194.0 million, representing a 6.9% increase over the comparable period in 2013.

Adjusted EBITDA for the three months ended June 30, 2014, increased $15.6 million to $107.6 million, representing a 16.9% increase over the comparable period in 2013. For the six months ended June 30, 2014, Adjusted EBITDA increased $21.6 million to $175.0 million, representing an increase of 14.1% over the comparable period in 2013.

Adjusted FFO for the three months ended June 30, 2014, increased $18.9 million to $93.6 million, representing a 25.3% increase over the comparable period in 2013. For the six months ended June 30, 2014, Adjusted FFO increased $28.4 million to $147.2 million, representing an increase of 23.9% over the comparable period in 2013.

Adjusted FFO per diluted share and unit for the three and six months ended June 30, 2014, was $0.74 and $1.17, respectively, based on the Company's diluted weighted-average common shares and units outstanding of 127.4 million and 125.6 million for each period, respectively.

Non-recurring items which are noteworthy for the three months ended June 30, 2014, include a gain of $1.3 million associated with the sale of a hotel. For the six months ended June 30, 2014, non-recurring items consisted of a loss on disposal of $1.3 million and approximately $1.1 million related to the loss on defeasance and accelerated amortization of deferred financing fees, both of which are associated with hotels that have been sold.

Non-recurring items are included in net income attributable to common shareholders but have been excluded from Adjusted EBITDA and Adjusted FFO, as applicable. A complete listing is provided in the Non-GAAP reconciliation tables for the three and six months ended June 30, 2014 and 2013.

Net income attributable to common shareholders for the three months ended June 30, 2014, was $52.9 million compared to $40.5 million for the comparable period in 2013. For the six months ended June 30, 2014, net income attributable to common shareholders was $64.8 million, compared to $49.0 million for the comparable period in 2013.

Net cash flow from operating activities for the six months ended June 30, 2014, totaled $132.0 million compared to $99.7 million for the comparable period in 2013.

Acquisitions / Dispositions

During the three months ended June 30, 2014, the Company acquired three hotels in attractive high-growth markets: the 256-room Courtyard Portland City Center in Portland, Oregon, the 293-room Embassy Suites Irvine Orange County in Irvine, California, and the 231-room Hilton Cabana Miami Beach in Miami, Florida.

On May 22, 2014, the Company acquired two hotels located on the West Coast: the 256-room Courtyard Portland City Center and the 293-room Embassy Suites Irvine Orange County in an off-market transaction for a total purchase price of $120.0 million, or approximately $219,000 per key. The purchase price represents a forward capitalization rate of approximately 7.4% on the hotels' combined projected 2015 net operating income.

On June 19, 2014, the Company completed the previously announced acquisition of the 231-room Hilton Cabana Miami Beach for a gross purchase price of $71.7 million, or approximately $310,000 per key. The purchase price represents a forward capitalization rate of approximately 8.5% on the hotel's projected 2015 net operating income.

On June 18, 2014, the Company sold the 194-room Holiday Inn Austin NW Arboretum Area in Austin, Texas for $13.5 million. The sale price represents a fully loaded capitalization rate of approximately 7.9% on the hotel's projected 2014 net operating income.

Balance Sheet

In May 2014, the Company completed an underwritten public offering of 9,200,000 common shares at a public offering price of $26.45 per share. The total shares include 1,200,000 shares sold pursuant to the underwriters' option to purchase additional shares. Net proceeds from the public offering after deducting the underwriting discount and other offering costs were approximately $232.8 million.

As of June 30, 2014, the Company had $373.7 million of unrestricted cash on its balance sheet, $300.0 million available on its revolving credit facility, and approximately $1.6 billion of debt outstanding. The Company's ratio of net debt to Adjusted EBITDA for the trailing twelve month period ended June 30, 2014, was 3.4 times.

Dividends

The Company's Board of Trustees declared a cash dividend of $0.22 per common share of beneficial interest. The dividend was paid on July 15, 2014, to shareholders of record as of June 30, 2014.

Subsequent Events

Subsequent to quarter end, the Company acquired the 194-room Hyatt Atlanta Midtown in Atlanta, Georgia for $49.5 million, or approximately $255,000 per key. The purchase price represents a forward capitalization rate of approximately 8.0% on the hotel's projected 2015 net operating income.

The Company's Board of Trustees also approved an increase to the Company's upcoming third quarter dividend. The third quarter dividend distribution of $0.30 per common share of beneficial interest represents an increase of $0.08, or 36%, to the prior quarter. The increase is a result of the continuous improvements in operations and the more than $550.0 million of acquisitions completed in 2014.

If necessary, the Company may also pay a special dividend in the fourth quarter to meet its general policy of distributing 100% of its REIT taxable income. Future dividends are subject to approval by the Board of Trustees.

2014 Outlook

The Company's outlook has been updated to include recent acquisitions, including the Hyatt Atlanta Midtown, and remove income from dispositions. The outlook excludes potential future acquisitions and dispositions, which could result in a material change to the Company's outlook. The 2014 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.

Pro forma operating statistics include results for periods prior to the Company's ownership and therefore assume the hotels were owned since January 1, 2013. Pro forma Consolidated Hotel EBITDA includes approximately $8.8 million of prior ownership Hotel EBITDA for recently acquired hotels that is not included in the Company's Adjusted EBITDA or Adjusted FFO. Pro forma guidance removes income from hotels that were sold. For the full year 2014, the Company anticipates:

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

To view all tables corresponding with this release please visit:

http://investor.rljlodgingtrust.com/phoenix.zhtml?c=243028&p=irol-irhome

About RLJ Lodging Trust

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 149 properties, comprised of 147 hotels with approximately 23,100 rooms and two planned hotel conversions, located in 21 states and the District of Columbia. For more information please visit http://rljlodgingtrust.com/

Contact: Leslie D. Hale, Chief Financial Officer

301-280-7774

Related News

RLJ Lodging Trust Acquires the 215-room DoubleTree Grand Key Resort in Key West, FL for $77 Million

Hospitality Properties Trust Reports Q2 2014 Net Income of $48.7 million; Comparable RevPAR up 8.5%

DiamondRock Hospitality Company Reports Second Quarter 2014 Results And Raises Full Year Guidance

Ashford Trust Reports Second Quarter 2014 Results; RevPAR Increase of 7.7% for Hotel Portfolio

Choice Hotels Reports a 12% Increase in Q2 2014 Income; Executed 125 New Domestic Franchises

Sunstone Hotel Investors Reports Q2 2014 Net Income of $39.3 million; RevPAR Increased 6.2%

Summit Hotel Properties Reports Second Quarter 2014 Results; Pro Forma RevPAR up 11.4%

Hersha Hospitality Trust Reports Q2 2014 Net Income of $53.3 million: RevPAR up 6.6%

IHG Reports 2014 Half Year Results

MGM Resorts International Reports Second Quarter 2014 Financial Results

Ryman Hospitality Reports Q2 2014 Net Income Increase of 70.9% to $28 million

Chatham Lodging Trust Reports Q2 2014 Net Income of $64.9M and RevPAR Gains of 9.6%

Strategic Hotels & Resorts Reports Q2 2014 Net Income of $80.8M; U.S. RevPAR up 5.3%

Chesapeake Lodging Trust Reports Q2 2014 Net Income of $18.8M and RevPAR Rise of 7%

Value Place Reports Q2 2014 System-Wide Revenue Increases of 10.6% to $55 Million

Hilton Worldwide Reports Q2 2014 Net Income of $209 million: RevPAR Increased 6.7%

Extended Stay America Reports Second Quarter 2014 Net Income of $46.3 million & RevPAR Gain of 9.4%

Hyatt Reports Q2 2014 Net Income of $72 million: Systemwide RevPAR up 5.5%

FelCor Reports Q2 2014 Net Income of $14.6 million with RevPAR Gains of 9.2%

Belmond Ltd. Reports Q2 2014 Adjusted Net Earnings of $8M; RevPar up 6%

Host Hotels & Resorts Reports Q2 2014 Net Income of $159 million with RevPAR Rise of 5.1%

Marriott International Reports Q2 2014 Net Income of $192 million with RevPAR Gains of 5.8%

Wynn Resorts Reports Q2 2014 Adjusted Net Income of $215.1M, Up from $152.9M in Q2 2013

Pebblebrook Hotel Trust Reports Q2 2014 Net Income of $16.6M; Same-Property RevPAR Increased 9.2%

LaSalle Hotel Properties Reports Q2 2014 Net Income of $85.6M; RevPAR Improved 10.3%

Starwood Reports Q2 2014 Net Income of $153M; Systemwide RevPAR Up 5.3%

Wyndham Worldwide Reports Q2 2014 Net Income of $153M, RevPAR Up 5.6%

White Lodging Assumes Management of Florida's 194-key Embassy Suites West Palm Beach

RLJ Lodging Trust Acquires the 194-room Hyatt Atlanta Midtown in Georgia for $49.5 Million

RLJ Lodging Trust Sells 194-room Holiday Inn Austin NW Arboretum Area in Austin, Texas for $13.5M

All News »

Please login or register to post a comment.