Business Wire | Feb 25, 2021 04:30PM EST

RLJ Lodging Trust Reports Fourth Quarter and Full Year 2020 Results

Feb. 25, 2021

BETHESDA, Md.--(BUSINESS WIRE)--Feb. 25, 2021--RLJ Lodging Trust (the "Company") (NYSE: RLJ) today reported results for the three months and year ended December 31, 2020.

Fourth Quarter Highlights

* 95 hotels open throughout quarter, representing 93% of the portfolio * Total portfolio achieved 34.1% occupancy and open hotels achieved 37.5% occupancy * Total revenue of $91.1 million * Pro forma RevPAR decrease of (72.2%) * Net loss of ($87.9) million * Net loss per share of ($0.57) * Adjusted EBITDA of ($12.8) million * Adjusted FFO per diluted common share and unit of ($0.28) * Open hotels generated positive Hotel EBITDA of $1.6 million * Continued to maintain a strong balance sheet with approximately $900 million of unrestricted cash and $200 million undrawn on line of credit * Successfully extended corporate covenant waiver period through December 31, 2021

Full Year Highlights

* Total revenue of $473.1 million * Pro forma RevPAR decrease of (66.8%) * Net loss of ($408.8) million * Net loss per share of ($2.61) * Adjusted EBITDA of ($41.1) million * Adjusted FFO per diluted common share and unit of ($0.98)

"I am very proud of how the entire RLJ team responded to the unprecedented challenges brought on by the pandemic. We were nimble and quickly pivoted to preserving our liquidity, substantially reducing our operating costs and positioning our portfolio to benefit early during a recovery," commented Leslie D. Hale, President and Chief Executive Officer. "We are encouraged that as the vaccine distribution becomes more widespread, it could lead to meaningful improvement in fundamentals during the second half of this year. As we demonstrated with our third and fourth quarter results, our portfolio construct is allowing us to grow revenues earlier, achieve overall profitability quicker and is positioning us to take advantage of growth opportunities as the recovery unfolds."

The prefix "Pro forma" as defined by the Company, denotes operating results which include results for periods prior to its ownership and excludes sold hotels. Pro forma RevPAR and Pro forma Hotel EBITDA Margin are reported on a comparable basis and therefore exclude any hotels sold during the period and non-comparable hotels that were not open for operation or were closed for renovation for comparable periods. 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 millions, except ADR, RevPAR, and per share amounts)

(unaudited)

For the three months ended For the year ended December 31, December 31,

2020 2019 Change 2020 2019 Change

OperationalOverview: (1)

Pro forma $ 110.94 $ 179.78 (38.3) % $ 142.41 $ 183.18 (22.3) %ADR

Pro forma 34.1% 75.7% (55.0) % 33.8% 79.1% (57.2) %Occupancy

Pro forma $ 37.80 $ 136.17 (72.2) % $ 48.13 $ 144.80 (66.8) %RevPAR



Financial Overview:

Total $ 91.1 $ 347.1 (73.8) % $ 473.1 $ 1,566.2 (69.8) %Revenues

Pro formaHotel $ 90.8 $ 341.7 (73.4) % $ 471.6 $ 1,417.4 (66.7) %Revenue



Net (Loss) $ (87.9) $ 34.9 (351.7) % $ (408.8) $ 129.4 (416.0) %Income



Pro formaHotel $ (7.3) $ 102.6 (107.1) % $ (11.5) $ 450.5 (102.6) %EBITDA

Pro formaHotel (8.1)% 30.0% (3,809) (2.4)% 31.8% (3,422)EBITDA bps bpsMargin

Adjusted $ (12.8) $ 96.3 (113.3) % $ (41.1) $ 462.5 (108.9) %EBITDA (2)



Adjusted $ (45.6) $ 69.3 (165.8) % $ (161.4) $ 350.3 (146.1) %FFO

AdjustedFFO PerDiluted $ (0.28) $ 0.41 (168.3) % $ (0.98) $ 2.03 (148.3) %CommonShare andUnit

Note:

(1) Pro forma statistics reflect the Company's 102 hotel portfolio as of December 31, 2020.

(2) Adjusted EBITDA for the three months ended December 31, 2019 included $2.1 million from sold hotels. Adjusted EBITDA for the year ended December 31, 2019 included $48.0 million from sold hotels.

Hotel Reopening and Cash Burn Update

During the fourth quarter, the Company continued to implement stringent expense control measures and aggressive asset management initiatives to maximize hotel-level profitability, which led to the Company's open hotels achieving positive Hotel EBITDA for the second half of 2020.

Update on Hotel Reopenings

As of December 31, 2020, the Company had 95 hotels open, representing 93% of the Company's portfolio, during the entire fourth quarter and has subsequently reopened two hotels during 2021. The Company continues to evaluate market conditions with respect to reopening the remaining closed hotels. All open hotels continue to operate under aggressive operating cost containment plans, including significantly reduced staffing, elimination of non-essential amenities and services, and modified food and beverage offerings.

Cash Burn Update

During the fourth quarter, the Company's cash burn continued to improve due to higher than expected revenues and the continued success of its aggressive cost containment initiatives. Fourth quarter cash burn was approximately $20 million better than the Company's prior estimates.

For the nine-months ended December 31, 2020, the Company's average monthly cash burn (excluding capital investments) was approximately $23.6 million, towards the low end of the $23.0 million to $27.0 million range the Company had previously anticipated.

For the first quarter of 2021, the Company estimates that average monthly cash burn will be approximately $20.0 million to $24.0 million (excluding capital investments). The current monthly cash burn range is inclusive of hotel-level operating cash flow shortfalls, hotel-level fixed costs, including property taxes and insurance, corporate-level cash general & administrative expenses and other corporate-level outflows, including interest and scheduled principal payments on the Company's outstanding debt as well as common and preferred dividends.

The actual first quarter monthly cash burn will vary based on the actual level of lodging demand. The Company's monthly cash burn is expected to be at the low end of the range if lodging demand remains at current levels and the high end of the range if lodging demand contracts from present levels.

Dispositions

On December 1, 2020, the Company sold the 78-room Residence Inn Houston Sugarland. In early 2021, the Company sold the 112-room Courtyard Houston Sugarland. The total sales proceeds from these dispositions was $9.3 million. Pursuant to the Company's corporate credit agreements, the proceeds were used to pay down a portion of its $150.0 million term loan, which matures in 2022.

Balance Sheet

As of December 31, 2020, the Company had $899.8 million of unrestricted cash, $200.0 million in capacity under its revolving credit facility, no debt maturities until 2022 and $2.6 billion of debt outstanding.

Dividends

The Company's Board of Trustees declared a cash dividend of $0.01 per common share of beneficial interest in the fourth quarter. The dividend was paid on January 15, 2021 to shareholders of record as of December 31, 2020. For the year ended December 31, 2020, the Company declared total dividends of $0.04 per common share of beneficial interest.

The Company's Board of Trustees declared a preferred dividend of $0.4875 on its Series A cumulative convertible preferred shares. The dividend was paid on January 29, 2021 to shareholders of record as of December 31, 2020. For the year ended December 31, 2020, the Company declared total dividends of $1.95 per Series A cumulative convertible preferred share.

2021 Outlook

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

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on February 26, 2021, at 11:00 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 fourth quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company's website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company's website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and pro forma operating statistics, which was posted to the Company's website on February 25, 2021.

About Us

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 101 hotels with approximately 22,400 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward Looking Statements

This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company's business plans, objectives and expected operating results, measures being taken in response to the COVID-19 pandemic, and the impact of the COVID-19 pandemic on our business, and the assumptions upon which those statements are based, that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words "believe," "project," "expect," "anticipate," "estimate," "plan," "may," "will," "will continue," "intend," "should," or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and the Company's actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty and a worsening of global economic conditions or low levels of economic growth; the duration and scope of the COVID-19 pandemic and its impact on the demand for travel and on levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the impact of the pandemic on global and regional economies, travel, and economic activity; the pace of recovery when the COVID-19 pandemic subsides; the effects of steps we and our third party management partners take to reduce operating costs; increased direct competition, changes in government regulations or accounting rules; changes in local, national and global real estate conditions; declines in the lodging industry, including as a result of the COVID-19 pandemic; seasonality of the lodging industry; risks related to natural disasters, such as earthquakes and hurricanes; hostilities, including future terrorist attacks or fear of hostilities that affect travel and epidemics and/or pandemics, including COVID-19; the Company's ability to obtain lines of credit or permanent financing on satisfactory terms; changes in interest rates; access to capital through offerings of the Company's common and preferred shares of beneficial interest, or debt; the Company's ability to identify suitable acquisitions; the Company's ability to close on identified acquisitions and integrate those businesses; and inaccuracies of the Company's accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled "Risk Factors," "Forward- Looking Statements," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.

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

RLJ Lodging Trust Non-GAAP and Accounting Commentary

Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDAre, (5) Adjusted EBITDA, (6) Hotel EBITDA, and (7) Hotel EBITDA Margin. These Non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of its operating performance. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, and Hotel EBITDA Margin as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.

Funds From Operations ("FFO")

The Company calculates Funds from Operations ("FFO") in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company's operations. The Company believes that the presentation of FFO provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between real estate investment trusts ("REITs"), even though FFO does not represent an amount that accrues directly to common shareholders.

The Company's calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. Additionally, FFO may not be helpful when comparing the Company to non-REITs. The Company presents FFO attributable to common shareholders, which includes unitholders of limited partnership interest ("OP units") in RLJ Lodging Trust, L.P., the Company's operating partnership, because the OP units are redeemable for common shares of the Company. The Company believes it is meaningful for the investor to understand FFO attributable to all common shares and OP units.

EBITDA and EBITDAre

Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") is defined as net income or loss excluding: (1) interest expense; (2) 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.

In addition to EBITDA, the Company presents EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss (calculated in accordance with GAAP) excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated partnerships and joint ventures. The Company believes that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between REITs.

Adjustments to FFO and EBITDA

The Company adjusts FFO, EBITDA, and EBITDAre for certain items that the Company considers either outside the normal course of operations or extraordinary. The Company believes that Adjusted FFO, Adjusted EBITDA, and Adjusted EBITDAre provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income or loss, FFO, EBITDA, and EBITDAre, is beneficial to an investor's understanding of its operating performance. The Company adjusts FFO, EBITDA, and EBITDAre for the following items:

* Transaction Costs: The Company excludes transaction costs expensed during the period * Non-Cash Expenses: The Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income taxes, and unrealized gains and loss related to interest rate hedges * Other Non-Operational Expenses: The Company excludes the effect of certain non-operational expenses representing income and expenses outside the normal course of operations

Hotel EBITDA and Hotel EBITDA Margin

With respect to Consolidated Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and certain non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. The Company believes property-level results provide investors with supplemental information about the ongoing operational performance of the Company's hotels and the effectiveness of third-party management companies.

Pro forma Consolidated Hotel EBITDA includes prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels, which has not been audited and excludes results from sold hotels as applicable. Pro forma Hotel EBITDA and Pro forma Hotel EBITDA Margin exclude the results of non-comparable hotels that were under renovation or not open for the entirety of the comparable periods. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Acquired hotels

For the years ended December 31, 2020 and 2019, respectively, no hotels were acquired.

Pro forma adjustments: Sold hotels

For the years ended December 31, 2020 and 2019, pro forma adjustments included the following sold hotels:

* Courtyard Austin Airport in June 2019 * Courtyard Boulder Longmont in June 2019 * Courtyard Fort Lauderdale SW Miramar in June 2019 * Courtyard Salt Lake City Airport in June 2019 * Fairfield Inn & Suites San Antonio Downtown Market in June 2019 * Hampton Inn Fort Walton Beach in June 2019 * Hampton Inn West Palm Beach Airport Central in June 2019 * Hampton Inn & Suites Clearwater St. Petersburg Ulmerton Road in June 2019 * Hampton Inn & Suites Denver Tech Center in June 2019 * Hilton Garden Inn Bloomington in June 2019 * Hilton Garden Inn Durham Raleigh Research Triangle Park in June 2019 * Hilton Garden Inn West Palm Beach Airport in June 2019 * Residence Inn Chicago Oak Brook in June 2019 * Residence Inn Detroit Novi in June 2019 * Residence Inn Fort Lauderdale Plantation in June 2019 * Residence Inn Fort Lauderdale SW Miramar in June 2019 * Residence Inn Longmont Boulder in June 2019 * Residence Inn Salt Lake City Airport in June 2019 * Residence Inn San Antonio Downtown Market Square in June 2019 * Residence Inn Silver Spring in June 2019 * SpringHill Suites Boulder Longmont in June 2019 * Embassy Suites Myrtle Beach Oceanfront Resort in June 2019 * Hilton Myrtle Beach Resort in June 2019 * Courtyard Austin Northwest Arboretum in August 2019 * Courtyard Boulder Louisville in August 2019 * Courtyard Denver West Golden in August 2019 * Courtyard Louisville Northeast in August 2019 * Courtyard South Bend Mishawaka in August 2019 * Hampton Inn Houston Galleria in August 2019 * Hyatt House Austin Arboretum in August 2019 * Hyatt House Houston Galleria in August 2019 * Hyatt House Dallas Lincoln Park in August 2019 * Hyatt House Dallas Uptown in August 2019 * Residence Inn Austin Northwest Arboretum in August 2019 * Residence Inn Austin North Parmer Lane in August 2019 * Residence Inn Boulder Louisville in August 2019 * Residence Inn Denver West Golden in August 2019 * Residence Inn Louisville Northeast in August 2019 * SpringHill Suites Austin North Parmer Lane in August 2019 * SpringHill Suites Louisville Hurstbourne North in August 2019 * SpringHill Suites South Bend Mishawaka in August 2019 * Residence Inn Columbia in September 2019 * Courtyard Austin South in November 2019 * Fairfield Inn & Suites Austin South Airport in November 2019 * Marriott Austin South in November 2019 * Residence Inn Austin South in November 2019 * SpringHill Suites Austin South in November 2019 * Residence Inn Houston Sugarland in December 2020

Note:

(1) Pro forma statistics reflect the Company's 102 hotel portfolio as ofDecember 31, 2020.

(2) Adjusted EBITDA for the three months ended December 31, 2019 included $2.1million from sold hotels. Adjusted EBITDA for the year ended December 31, 2019included $48.0 million from sold hotels.

Hotel Reopening and Cash Burn Update

During the fourth quarter, the Company continued to implement stringent expense control measures and aggressive asset management initiatives to maximize hotel-level profitability, which led to the Company's open hotels achieving positive Hotel EBITDA for the second half of 2020.

Update on Hotel Reopenings

As of December 31, 2020, the Company had 95 hotels open, representing 93% of the Company's portfolio, during the entire fourth quarter and has subsequently reopened two hotels during 2021. The Company continues to evaluate market conditions with respect to reopening the remaining closed hotels. All open hotels continue to operate under aggressive operating cost containment plans, including significantly reduced staffing, elimination of non-essential amenities and services, and modified food and beverage offerings.

Cash Burn Update

During the fourth quarter, the Company's cash burn continued to improve due to higher than expected revenues and the continued success of its aggressive cost containment initiatives. Fourth quarter cash burn was approximately $20 million better than the Company's prior estimates.

For the nine-months ended December 31, 2020, the Company's average monthly cash burn (excluding capital investments) was approximately $23.6 million, towards the low end of the $23.0 million to $27.0 million range the Company had previously anticipated.

For the first quarter of 2021, the Company estimates that average monthly cash burn will be approximately $20.0 million to $24.0 million (excluding capital investments). The current monthly cash burn range is inclusive of hotel-level operating cash flow shortfalls, hotel-level fixed costs, including property taxes and insurance, corporate-level cash general & administrative expenses and other corporate-level outflows, including interest and scheduled principal payments on the Company's outstanding debt as well as common and preferred dividends.

The actual first quarter monthly cash burn will vary based on the actual level of lodging demand. The Company's monthly cash burn is expected to be at the low end of the range if lodging demand remains at current levels and the high end of the range if lodging demand contracts from present levels.

Dispositions

On December 1, 2020, the Company sold the 78-room Residence Inn Houston Sugarland. In early 2021, the Company sold the 112-room Courtyard Houston Sugarland. The total sales proceeds from these dispositions was $9.3 million. Pursuant to the Company's corporate credit agreements, the proceeds were used to pay down a portion of its $150.0 million term loan, which matures in 2022.

Balance Sheet

As of December 31, 2020, the Company had $899.8 million of unrestricted cash, $200.0 million in capacity under its revolving credit facility, no debt maturities until 2022 and $2.6 billion of debt outstanding.

Dividends

The Company's Board of Trustees declared a cash dividend of $0.01 per common share of beneficial interest in the fourth quarter. The dividend was paid on January 15, 2021 to shareholders of record as of December 31, 2020. For the year ended December 31, 2020, the Company declared total dividends of $0.04 per common share of beneficial interest.

The Company's Board of Trustees declared a preferred dividend of $0.4875 on its Series A cumulative convertible preferred shares. The dividend was paid on January 29, 2021 to shareholders of record as of December 31, 2020. For the year ended December 31, 2020, the Company declared total dividends of $1.95 per Series A cumulative convertible preferred share.

2021 Outlook

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

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on February 26, 2021, at 11:00 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 fourth quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company's website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company's website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and pro forma operating statistics, which was posted to the Company's website on February 25, 2021.

About Us

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 101 hotels with approximately 22,400 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward Looking Statements

This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company's business plans, objectives and expected operating results, measures being taken in response to the COVID-19 pandemic, and the impact of the COVID-19 pandemic on our business, and the assumptions upon which those statements are based, that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally are identified by the use of the words "believe," "project," "expect," "anticipate," "estimate," "plan," "may," "will," "will continue," "intend," "should," or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and the Company's actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the current global economic uncertainty and a worsening of global economic conditions or low levels of economic growth; the duration and scope of the COVID-19 pandemic and its impact on the demand for travel and on levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the impact of the pandemic on global and regional economies, travel, and economic activity; the pace of recovery when the COVID-19 pandemic subsides; the effects of steps we and our third party management partners take to reduce operating costs; increased direct competition, changes in government regulations or accounting rules; changes in local, national and global real estate conditions; declines in the lodging industry, including as a result of the COVID-19 pandemic; seasonality of the lodging industry; risks related to natural disasters, such as earthquakes and hurricanes; hostilities, including future terrorist attacks or fear of hostilities that affect travel and epidemics and/or pandemics, including COVID-19; the Company's ability to obtain lines of credit or permanent financing on satisfactory terms; changes in interest rates; access to capital through offerings of the Company's common and preferred shares of beneficial interest, or debt; the Company's ability to identify suitable acquisitions; the Company's ability to close on identified acquisitions and integrate those businesses; and inaccuracies of the Company's accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urges investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled "Risk Factors," "Forward- Looking Statements," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.

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

RLJ Lodging Trust Non-GAAP and Accounting Commentary

Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its performance: (1) FFO, (2) Adjusted FFO, (3) EBITDA, (4) EBITDAre, (5) Adjusted EBITDA, (6) Hotel EBITDA, and (7) Hotel EBITDA Margin. These Non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of its operating performance. FFO, Adjusted FFO, EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, and Hotel EBITDA Margin as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.

Funds From Operations ("FFO")

The Company calculates Funds from Operations ("FFO") in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding gains or losses from sales of real estate, impairment, the cumulative effect of changes in accounting principles, plus depreciation and amortization, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company's operations. The Company believes that the presentation of FFO provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between real estate investment trusts ("REITs"), even though FFO does not represent an amount that accrues directly to common shareholders.

The Company's calculation of FFO may not be comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. Additionally, FFO may not be helpful when comparing the Company to non-REITs. The Company presents FFO attributable to common shareholders, which includes unitholders of limited partnership interest ("OP units") in RLJ Lodging Trust, L.P., the Company's operating partnership, because the OP units are redeemable for common shares of the Company. The Company believes it is meaningful for the investor to understand FFO attributable to all common shares and OP units.

EBITDA and EBITDAre

Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") is defined as net income or loss excluding: (1) interest expense; (2) 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.

In addition to EBITDA, the Company presents EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss (calculated in accordance with GAAP) excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated partnerships and joint ventures. The Company believes that the presentation of EBITDAre provides useful information to investors regarding the Company's operating performance and can facilitate comparisons of operating performance between periods and between REITs.

Adjustments to FFO and EBITDA

The Company adjusts FFO, EBITDA, and EBITDAre for certain items that the Company considers either outside the normal course of operations or extraordinary. The Company believes that Adjusted FFO, Adjusted EBITDA, and Adjusted EBITDAre provide useful supplemental information to investors regarding its ongoing operating performance that, when considered with net income or loss, FFO, EBITDA, and EBITDAre, is beneficial to an investor's understanding of its operating performance. The Company adjusts FFO, EBITDA, and EBITDAre for the following items:

* Transaction Costs: The Company excludes transaction costs expensed during the period * Non-Cash Expenses: The Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income taxes, and unrealized gains and loss related to interest rate hedges * Other Non-Operational Expenses: The Company excludes the effect of certain non-operational expenses representing income and expenses outside the normal course of operations

Hotel EBITDA and Hotel EBITDA Margin

With respect to Consolidated Hotel EBITDA, the Company believes that excluding the effect of corporate-level expenses and certain non-cash items provides a more complete understanding of the operating results over which individual hotels and operators have direct control. The Company believes property-level results provide investors with supplemental information about the ongoing operational performance of the Company's hotels and the effectiveness of third-party management companies.

Pro forma Consolidated Hotel EBITDA includes prior ownership information provided by the sellers of the hotels for periods prior to our acquisition of the hotels, which has not been audited and excludes results from sold hotels as applicable. Pro forma Hotel EBITDA and Pro forma Hotel EBITDA Margin exclude the results of non-comparable hotels that were under renovation or not open for the entirety of the comparable periods. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Acquired hotels

For the years ended December 31, 2020 and 2019, respectively, no hotels were acquired.

Pro forma adjustments: Sold hotels

For the years ended December 31, 2020 and 2019, pro forma adjustments included the following sold hotels:

* Courtyard Austin Airport in June 2019 * Courtyard Boulder Longmont in June 2019 * Courtyard Fort Lauderdale SW Miramar in June 2019 * Courtyard Salt Lake City Airport in June 2019 * Fairfield Inn & Suites San Antonio Downtown Market in June 2019 * Hampton Inn Fort Walton Beach in June 2019 * Hampton Inn West Palm Beach Airport Central in June 2019 * Hampton Inn & Suites Clearwater St. Petersburg Ulmerton Road in June 2019 * Hampton Inn & Suites Denver Tech Center in June 2019 * Hilton Garden Inn Bloomington in June 2019 * Hilton Garden Inn Durham Raleigh Research Triangle Park in June 2019 * Hilton Garden Inn West Palm Beach Airport in June 2019 * Residence Inn Chicago Oak Brook in June 2019 * Residence Inn Detroit Novi in June 2019 * Residence Inn Fort Lauderdale Plantation in June 2019 * Residence Inn Fort Lauderdale SW Miramar in June 2019 * Residence Inn Longmont Boulder in June 2019 * Residence Inn Salt Lake City Airport in June 2019 * Residence Inn San Antonio Downtown Market Square in June 2019 * Residence Inn Silver Spring in June 2019 * SpringHill Suites Boulder Longmont in June 2019 * Embassy Suites Myrtle Beach Oceanfront Resort in June 2019 * Hilton Myrtle Beach Resort in June 2019 * Courtyard Austin Northwest Arboretum in August 2019 * Courtyard Boulder Louisville in August 2019 * Courtyard Denver West Golden in August 2019 * Courtyard Louisville Northeast in August 2019 * Courtyard South Bend Mishawaka in August 2019 * Hampton Inn Houston Galleria in August 2019 * Hyatt House Austin Arboretum in August 2019 * Hyatt House Houston Galleria in August 2019 * Hyatt House Dallas Lincoln Park in August 2019 * Hyatt House Dallas Uptown in August 2019 * Residence Inn Austin Northwest Arboretum in August 2019 * Residence Inn Austin North Parmer Lane in August 2019 * Residence Inn Boulder Louisville in August 2019 * Residence Inn Denver West Golden in August 2019 * Residence Inn Louisville Northeast in August 2019 * SpringHill Suites Austin North Parmer Lane in August 2019 * SpringHill Suites Louisville Hurstbourne North in August 2019 * SpringHill Suites South Bend Mishawaka in August 2019 * Residence Inn Columbia in September 2019 * Courtyard Austin South in November 2019 * Fairfield Inn & Suites Austin South Airport in November 2019 * Marriott Austin South in November 2019 * Residence Inn Austin South in November 2019 * SpringHill Suites Austin South in November 2019 * Residence Inn Houston Sugarland in December 2020

RLJ Lodging Trust

Consolidated Balance Sheets

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

(unaudited)

December 31, December 31, 2020 2019

Assets

Investment in hotel properties, net $ 4,486,416 $ 4,614,966

Investment in unconsolidated joint ventures 6,798 15,171

Cash and cash equivalents 899,813 882,474

Restricted cash reserves 34,977 44,686

Hotel and other receivables, net of allowance of 13,346 39,762 $292 and $251, respectively

Lease right-of-use assets 142,989 144,358

Deferred income tax asset, net - 51,447

Prepaid expense and other assets 32,833 58,536

Total assets $ 5,617,172 $ 5,851,400

Liabilities and Equity

Debt, net $ 2,587,731 $ 2,195,707

Accounts payable and other liabilities 172,325 183,408

Advance deposits and deferred revenue 32,177 57,459

Lease liabilities 122,593 121,154

Accrued interest 6,206 3,024

Distributions payable 8,752 64,165

Total liabilities 2,929,784 2,624,917

Equity

Shareholders' equity:

Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized

Series A Cumulative Convertible PreferredShares, $0.01 par value, 12,950,000 sharesauthorized; 12,879,475 shares issued and 366,936 366,936 outstanding, liquidation value of $328,266, atDecember 31, 2020 and 2019

Common shares of beneficial interest, $0.01 parvalue, 450,000,000 shares authorized;165,002,752 and 169,852,246 shares issued and 1,650 1,699 outstanding at December 31, 2020 and 2019,respectively

Additional paid-in capital 3,077,142 3,127,982

Accumulated other comprehensive loss (69,050 ) (19,514 )

Distributions in excess of net earnings (710,161 ) (274,769 )

Total shareholders' equity 2,666,517 3,202,334

Noncontrolling interest:

Noncontrolling interest in consolidated joint 13,002 14,065 ventures

Noncontrolling interest in the Operating 7,869 10,084 Partnership

Total noncontrolling interest 20,871 24,149

Total equity 2,687,388 3,226,483

Total liabilities and equity $ 5,617,172 $ 5,851,400

Note:

The corresponding notes to the consolidated financial statements can be found in the Company's Annual Report on Form 10-K.

Note:

The corresponding notes to the consolidated financial statements can be foundin the Company's Annual Report on Form 10-K.

RLJ Lodging Trust

Consolidated Statements of Operations

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

(unaudited)

For the three months ended

December 31,

For the year ended

December 31,

2020

2019

2020

2019

Revenues

Operating revenues

Room revenue

$

78,464

$

286,364

$

397,754

$

1,317,085

Food and beverage revenue

4,514

44,348

40,384

177,499

Other revenue

8,104

16,362

34,949

71,608

Total revenues

91,082

347,074

473,087

1,566,192

Expenses

Operating expenses

Room expense

25,473

75,341

124,063

329,077

Food and beverage expense

3,872

32,662

35,220

134,206

Management and franchise fee expense

3,110

24,421

21,057

120,797

Other operating expense

42,928

84,369

211,216

373,130

Total property operating expenses

75,383

216,793

391,556

957,210

Depreciation and amortization

47,391

48,929

194,168

211,584

Impairment loss

-

13,500

-

13,500

Property tax, insurance and other

24,114

28,692

103,470

119,287

General and administrative

8,387

11,065

41,141

45,252

Transaction costs

(72

)

438

(158

)

1,211

Total operating expenses

155,203

319,417

730,177

1,348,044

Other income

748

304

1,941

1,242

Interest income

408

3,785

4,237

8,720

Interest expense

(26,578

)

(22,662

)

(100,169

)

(91,295

)

Gain (loss) on sale of hotel properties, net

2,218

16,572

2,703

(9,300

)

(Loss) on extinguishment of indebtedness, net

-

(214

)

-

(214

)

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

(87,325

)

25,442

(348,378

)

127,301

Equity in (loss) income from unconsolidated joint ventures

(258

)

1,245

(8,454

)

(1,673

)

(Loss) income before income tax (expense) benefit

(87,583

)

26,687

(356,832

)

125,628

Income tax (expense) benefit

(305

)

8,225

(51,970

)

3,751

Net (loss) income

(87,888

)

34,912

(408,802

)

129,379

Net loss (income) attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures

511

(70

)

2,327

289

Noncontrolling interest in the Operating Partnership

435

(159

)

2,034

(487

)

Preferred distributions - consolidated joint venture

-

-

-

(186

)

Redemption of preferred equity - consolidated joint venture

-

-

-

(1,153

)

Net (loss) income attributable to RLJ

(86,942

)

34,683

(404,441

)

127,842

Preferred dividends

(6,279

)

(6,279

)

(25,115

)

(25,115

)

Net (loss) income attributable to common shareholders

$

(93,221

)

$

28,404

$

(429,556

)

$

102,727

Basic per common share data:

Net (loss) income per share attributable to common shareholders

$

(0.57

)

$

0.17

$

(2.61

)

$

0.59

Weighted-average number of common shares

163,729,671

169,241,536

164,503,661

171,287,086

Diluted per common share data:

Net (loss) income per share attributable to common shareholders

$

(0.57

)

$

0.17

$

(2.61

)

$

0.59

Weighted-average number of common shares

163,729,671

169,376,667

164,503,661

171,388,476

RLJ Lodging Trust

Consolidated Statements of Operations

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

(unaudited)

For the three months ended For the year ended December 31, December 31,

2020 2019 2020 2019

Revenues

Operating revenues

Room revenue $ 78,464 $ 286,364 $ 397,754 $ 1,317,085

Food and 4,514 44,348 40,384 177,499 beverage revenue

Other revenue 8,104 16,362 34,949 71,608

Total revenues 91,082 347,074 473,087 1,566,192

Expenses

Operating expenses

Room expense 25,473 75,341 124,063 329,077

Food and 3,872 32,662 35,220 134,206 beverage expense

Management andfranchise fee 3,110 24,421 21,057 120,797 expense

Other operating 42,928 84,369 211,216 373,130 expense

Total propertyoperating 75,383 216,793 391,556 957,210 expenses

Depreciation and 47,391 48,929 194,168 211,584 amortization

Impairment loss - 13,500 - 13,500

Property tax,insurance and 24,114 28,692 103,470 119,287 other

General and 8,387 11,065 41,141 45,252 administrative

Transaction (72 ) 438 (158 ) 1,211 costs

Total operating 155,203 319,417 730,177 1,348,044 expenses

Other income 748 304 1,941 1,242

Interest income 408 3,785 4,237 8,720

Interest expense (26,578 ) (22,662 ) (100,169 ) (91,295 )

Gain (loss) onsale of hotel 2,218 16,572 2,703 (9,300 )properties, net

(Loss) onextinguishment - (214 ) - (214 )of indebtedness,net

(Loss) incomebefore equity in(loss) income (87,325 ) 25,442 (348,378 ) 127,301 fromunconsolidatedjoint ventures

Equity in (loss)income from (258 ) 1,245 (8,454 ) (1,673 )unconsolidatedjoint ventures

(Loss) incomebefore income (87,583 ) 26,687 (356,832 ) 125,628 tax (expense)benefit

Income tax(expense) (305 ) 8,225 (51,970 ) 3,751 benefit

Net (loss) (87,888 ) 34,912 (408,802 ) 129,379 income

Net loss(income)attributable to noncontrollinginterests:

Noncontrollinginterest in 511 (70 ) 2,327 289 consolidatedjoint ventures

Noncontrollinginterest in the 435 (159 ) 2,034 (487 )OperatingPartnership

Preferreddistributions - - - - (186 )consolidatedjoint venture

Redemption ofpreferred equity - - - (1,153 )- consolidatedjoint venture

Net (loss)income (86,942 ) 34,683 (404,441 ) 127,842 attributable toRLJ

Preferred (6,279 ) (6,279 ) (25,115 ) (25,115 )dividends

Net (loss)incomeattributable to $ (93,221 ) $ 28,404 $ (429,556 ) $ 102,727 commonshareholders

Basic per common share data:

Net (loss)income per shareattributable to $ (0.57 ) $ 0.17 $ (2.61 ) $ 0.59 commonshareholders

Weighted-averagenumber of common 163,729,671 169,241,536 164,503,661 171,287,086 shares

Diluted percommon share data:

Net (loss)income per shareattributable to $ (0.57 ) $ 0.17 $ (2.61 ) $ 0.59 commonshareholders

Weighted-averagenumber of common 163,729,671 169,376,667 164,503,661 171,388,476 shares

Note:

The Statements of Comprehensive Income and corresponding notes to the consolidated financial statements can be found in the Company's Annual Report on Form 10-K.

Note:

The Statements of Comprehensive Income and corresponding notes to theconsolidated financial statements can be found in the Company's Annual Reporton Form 10-K.

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

December 31,

For the year ended

December 31,

2020

2019

2020

2019

Net (loss) income

$

(87,888

)

$

34,912

$

(408,802

)

$

129,379

Preferred dividends

(6,279

)

(6,279

)

(25,115

)

(25,115

)

Preferred distributions - consolidated joint venture

-

-

-

(186

)

Redemption of preferred equity - consolidated joint venture

-

-

-

(1,153

)

Depreciation and amortization

47,391

48,929

194,168

211,584

Impairment loss

-

13,500

-

13,500

(Gain) loss on sale of hotel properties, net

(2,218

)

(16,572

)

(2,703

)

9,300

Noncontrolling interest in consolidated joint ventures

511

(70

)

2,327

289

Adjustments related to consolidated joint ventures (1)

(75

)

(74

)

(298

)

(298

)

Adjustments related to unconsolidated joint ventures (2)

308

(355

)

8,299

4,379

FFO

(48,250

)

73,991

(232,124

)

341,679

Transaction costs

(72

)

438

(158

)

1,211

Loss on extinguishment of indebtedness, net

-

214

-

214

Amortization of share-based compensation

2,983

2,751

12,200

11,459

Non-cash income tax expense (benefit) (3)

39

(9,768

)

51,486

(6,818

)

Unrealized (gain) loss on discontinued cash flow hedges

(358

)

(18

)

(376

)

394

Corporate and property-level severance (4)

463

-

8,653

-

Other (income) expenses (5)

(381

)

1,659

(1,125

)

2,144

Adjusted FFO

$

(45,576

)

$

69,267

$

(161,444

)

$

350,283

Adjusted FFO per common share and unit-basic

$

(0.28

)

$

0.41

$

(0.98

)

$

2.04

Adjusted FFO per common share and unit-diluted

$

(0.28

)

$

0.41

$

(0.98

)

$

2.03

Basic weighted-average common shares and units outstanding (6)

164,502

170,014

165,276

172,060

Diluted weighted-average common shares and units outstanding (6)

164,502

170,149

165,276

172,161

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 For the year ended ended December 31, December 31,

2020 2019 2020 2019

Net (loss) income $ (87,888 ) $ 34,912 $ (408,802 ) $ 129,379

Preferred dividends (6,279 ) (6,279 ) (25,115 ) (25,115 )

Preferred distributions- consolidated joint - - - (186 )venture

Redemption of preferredequity - consolidated - - - (1,153 )joint venture

Depreciation and 47,391 48,929 194,168 211,584 amortization

Impairment loss - 13,500 - 13,500

(Gain) loss on sale of (2,218 ) (16,572 ) (2,703 ) 9,300 hotel properties, net

Noncontrolling interestin consolidated joint 511 (70 ) 2,327 289 ventures

Adjustments related toconsolidated joint (75 ) (74 ) (298 ) (298 )ventures (1)

Adjustments related tounconsolidated joint 308 (355 ) 8,299 4,379 ventures (2)

FFO (48,250 ) 73,991 (232,124 ) 341,679

Transaction costs (72 ) 438 (158 ) 1,211

Loss on extinguishment - 214 - 214 of indebtedness, net

Amortization ofshare-based 2,983 2,751 12,200 11,459 compensation

Non-cash income tax 39 (9,768 ) 51,486 (6,818 )expense (benefit) (3)

Unrealized (gain) losson discontinued cash (358 ) (18 ) (376 ) 394 flow hedges

Corporate andproperty-level 463 - 8,653 - severance (4)

Other (income) expenses (381 ) 1,659 (1,125 ) 2,144 (5)

Adjusted FFO $ (45,576 ) $ 69,267 $ (161,444 ) $ 350,283



Adjusted FFO per common $ (0.28 ) $ 0.41 $ (0.98 ) $ 2.04 share and unit-basic

Adjusted FFO per common $ (0.28 ) $ 0.41 $ (0.98 ) $ 2.03 share and unit-diluted



Basic weighted-averagecommon shares and units 164,502 170,014 165,276 172,060 outstanding (6)

Dilutedweighted-average common 164,502 170,149 165,276 172,161 shares and unitsoutstanding (6)

Note:(1)

Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint ventures.

(2)

Includes our ownership interest in the depreciation and amortization expense, impairment loss, and loss on sale of the unconsolidated joint ventures.

(3)

Includes non-cash income tax expense of $59.3 million for the year ended December 31, 2020 due to recording a valuation allowance on 100% of deferred tax assets.

(4)

Includes corporate-level severance of $0.5 million and property-level severance of $8.2 million for the year ended December 31, 2020. Property-level severance for the year ended December 31, 2020 includes $6.7 million related to severance for associates at our New York City hotels operating under collective bargaining agreements. Also includes property-level severance of $0.5 million for the three months ended December 31, 2020.

(5)

Represents income and expenses outside of the normal course of operations, including debt modification costs, legal and other costs, non-cash changes to pre-merger insurance reserves, and hurricane-related costs that were not reimbursed by insurance. Other expenses for the year ended December 31, 2020 includes a benefit of $1.8 million due to the reversal of an accrued liability related to the settlement of the National Retirement Fund matter.

(6)

Includes 0.8 million weighted-average operating partnership units for the three months and years ended December 31, 2020 and 2019, respectively.

Note:(1) Includes depreciation and amortization expense allocated to the noncontrolling interest in the consolidated joint ventures.

Includes our ownership interest in the depreciation and amortization(2) expense, impairment loss, and loss on sale of the unconsolidated joint ventures.

Includes non-cash income tax expense of $59.3 million for the year ended(3) December 31, 2020 due to recording a valuation allowance on 100% of deferred tax assets.

Includes corporate-level severance of $0.5 million and property-level severance of $8.2 million for the year ended December 31, 2020. Property-level severance for the year ended December 31, 2020 includes(4) $6.7 million related to severance for associates at our New York City hotels operating under collective bargaining agreements. Also includes property-level severance of $0.5 million for the three months ended December 31, 2020.

Represents income and expenses outside of the normal course of operations, including debt modification costs, legal and other costs, non-cash changes to pre-merger insurance reserves, and hurricane-related costs that were(5) not reimbursed by insurance. Other expenses for the year ended December 31, 2020 includes a benefit of $1.8 million due to the reversal of an accrued liability related to the settlement of the National Retirement Fund matter.

(6) Includes 0.8 million weighted-average operating partnership units for the three months and years ended December 31, 2020 and 2019, respectively.

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

December 31,

For the year ended

December 31,

2020

2019

2020

2019

Net (loss) income

$

(87,888

)

$

34,912

$

(408,802

)

$

129,379

Depreciation and amortization

47,391

48,929

194,168

211,584

Interest expense, net

26,170

18,877

95,932

82,575

Income tax expense (benefit)

305

(8,225

)

51,970

(3,751

)

Adjustments related to unconsolidated joint ventures (1)

414

620

2,237

2,799

EBITDA

(13,608

)

95,113

(64,495

)

422,586

(Gain) loss on sale of hotel properties, net

(2,218

)

(16,572

)

(2,703

)

9,300

Impairment loss

-

13,500

-

13,500

Loss on sale of unconsolidated joint ventures (2)

-

(851

)

-

2,075

Impairment loss of unconsolidated joint ventures (3)

13

-

6,546

-

EBITDAre

(15,813

)

91,190

(60,652

)

447,461

Transaction costs

(72

)

438

(158

)

1,211

Loss on extinguishment of indebtedness, net

-

214

-

214

Amortization of share-based compensation

2,983

2,751

12,200

11,459

Corporate and property-level severance (4)

463

-

8,653

-

Other (income) expenses (5)

(381

)

1,660

(1,125

)

2,144

Adjusted EBITDA

(12,820

)

96,253

(41,082

)

462,489

General and administrative (6)

5,404

8,314

28,941

33,784

Other corporate adjustments (7)

54

84

682

2,182

Consolidated Hotel EBITDA

(7,362

)

104,651

(11,459

)

498,455

Pro forma adjustments - income from sold hotels

30

(2,094

)

(67

)

(47,994

)

Pro forma Hotel EBITDA

$

(7,332

)

$

102,557

$

(11,526

)

$

450,461

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

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

For the three months For the year ended ended December 31, December 31,

2020 2019 2020 2019

Net (loss) income $ (87,888 ) $ 34,912 $ (408,802 ) $ 129,379

Depreciation and 47,391 48,929 194,168 211,584 amortization

Interest expense, net 26,170 18,877 95,932 82,575

Income tax expense 305 (8,225 ) 51,970 (3,751 )(benefit)

Adjustments related tounconsolidated joint 414 620 2,237 2,799 ventures (1)

EBITDA (13,608 ) 95,113 (64,495 ) 422,586

(Gain) loss on sale of (2,218 ) (16,572 ) (2,703 ) 9,300 hotel properties, net

Impairment loss - 13,500 - 13,500

Loss on sale ofunconsolidated joint - (851 ) - 2,075 ventures (2)

Impairment loss ofunconsolidated joint 13 - 6,546 - ventures (3)

EBITDAre (15,813 ) 91,190 (60,652 ) 447,461

Transaction costs (72 ) 438 (158 ) 1,211

Loss on extinguishment - 214 - 214 of indebtedness, net

Amortization ofshare-based 2,983 2,751 12,200 11,459 compensation

Corporate andproperty-level 463 - 8,653 - severance (4)

Other (income) expenses (381 ) 1,660 (1,125 ) 2,144 (5)

Adjusted EBITDA (12,820 ) 96,253 (41,082 ) 462,489

General and 5,404 8,314 28,941 33,784 administrative (6)

Other corporate 54 84 682 2,182 adjustments (7)

Consolidated Hotel (7,362 ) 104,651 (11,459 ) 498,455 EBITDA

Pro forma adjustments - 30 (2,094 ) (67 ) (47,994 )income from sold hotels

Pro forma Hotel EBITDA $ (7,332 ) $ 102,557 $ (11,526 ) $ 450,461

Note:(1)

Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint ventures.

(2)

Includes our ownership interest in the loss on sale of the unconsolidated joint ventures associated with two resort hotel properties we owned in Myrtle Beach, SC.

(3)

Includes our ownership interest in the impairment loss of one of our unconsolidated joint ventures.

(4)

Includes corporate-level severance of $0.5 million and property-level severance of $8.2 million for the year ended December 31, 2020. Property-level severance for the year ended December 31, 2020 includes $6.7 million related to severance for associates at our New York City hotels operating under collective bargaining agreements. Also includes property-level severance of $0.5 million for the three months ended December 31, 2020.

(5)

Represents income and expenses outside of the normal course of operations, including debt modification costs, legal and other costs, non-cash changes to pre-merger insurance reserves, and hurricane-related costs that were not reimbursed by insurance. Other expenses for the year ended December 31, 2020 includes a benefit of $1.8 million due to the reversal of an accrued liability related to the settlement of the National Retirement Fund matter.

(6)

Excludes amortization of share-based compensation and activist shareholder costs reflected in Adjusted EBITDA.

(7)

Other corporate adjustments include property-level adjustments and certain revenues and expenses at corporate entities. These items include interest income, amortization of deferred management fees, key money amortization, ground rent amortization, legal fees, revenues and expenses associated with non-hotel properties, income (loss) from unconsolidated entities, internal lease rent expense, and other items.

Note:(1) Includes our ownership interest in the interest, depreciation, and amortization expense of the unconsolidated joint ventures.

Includes our ownership interest in the loss on sale of the unconsolidated(2) joint ventures associated with two resort hotel properties we owned in Myrtle Beach, SC.

(3) Includes our ownership interest in the impairment loss of one of our unconsolidated joint ventures.

Includes corporate-level severance of $0.5 million and property-level severance of $8.2 million for the year ended December 31, 2020. Property-level severance for the year ended December 31, 2020 includes(4) $6.7 million related to severance for associates at our New York City hotels operating under collective bargaining agreements. Also includes property-level severance of $0.5 million for the three months ended December 31, 2020.

Represents income and expenses outside of the normal course of operations, including debt modification costs, legal and other costs, non-cash changes to pre-merger insurance reserves, and hurricane-related costs that were(5) not reimbursed by insurance. Other expenses for the year ended December 31, 2020 includes a benefit of $1.8 million due to the reversal of an accrued liability related to the settlement of the National Retirement Fund matter.

(6) Excludes amortization of share-based compensation and activist shareholder costs reflected in Adjusted EBITDA.

Other corporate adjustments include property-level adjustments and certain revenues and expenses at corporate entities. These items include interest(7) income, amortization of deferred management fees, key money amortization, ground rent amortization, legal fees, revenues and expenses associated with non-hotel properties, income (loss) from unconsolidated entities, internal lease rent expense, and other items.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

Pro forma Hotel EBITDA Margin

For the three months ended

December 31,

For the year ended

December 31,

2020

2019

2020

2019

Total revenue

$

91,082

$

347,074

$

473,087

$

1,566,192

Pro forma adjustments - revenue from sold hotels

(223

)

(5,239

)

(1,447

)

(147,309

)

Other corporate adjustments / non-hotel revenue

(15

)

(140

)

(53

)

(1,464

)

Pro forma Hotel Revenue

$

90,844

$

341,695

$

471,587

$

1,417,419

Pro forma Hotel EBITDA

$

(7,332

)

$

102,557

$

(11,526

)

$

450,461

Pro forma Hotel EBITDA Margin

(8.1

)%

30.0

%

(2.4

)%

31.8

%

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

Pro forma Hotel EBITDA Margin

For the three months For the year ended ended December 31, December 31,

2020 2019 2020 2019

Total revenue $ 91,082 $ 347,074 $ 473,087 $ 1,566,192

Pro forma adjustments -revenue from sold (223 ) (5,239 ) (1,447 ) (147,309 )hotels

Other corporateadjustments / non-hotel (15 ) (140 ) (53 ) (1,464 )revenue

Pro forma Hotel Revenue $ 90,844 $ 341,695 $ 471,587 $ 1,417,419



Pro forma Hotel EBITDA $ (7,332 ) $ 102,557 $ (11,526 ) $ 450,461



Pro forma Hotel EBITDA (8.1 ) 30.0 % (2.4 ) 31.8 %Margin % %

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, 2020 (2)

Secured Debt

Mortgage Loan - 1 hotel

10

Jun 2022

Fixed

5.25

%

$

30,066

Mortgage Loan - 2 hotels

10

Oct 2022

Fixed

4.95

%

54,549

Mortgage Loan - 1 hotel

10

Oct 2022

Fixed

4.95

%

31,355

Mortgage Loan - 1 hotel

10

Oct 2022

Fixed

4.94

%

27,697

Mortgage Loan - 7 hotels

3

Apr 2024

Floating

1.66

%

200,000

Mortgage Loan - 3 hotels

5

Apr 2026

Floating

1.74

%

96,000

Mortgage Loan - 4 hotels

5

Apr 2026

Floating

1.74

%

85,000

Weighted-Average / Secured Total

2.61

%

$

524,666

Unsecured Debt

Revolver (4)

4

May 2025

Floating (3)(5)

3.77

%

$

400,000

$150 Million Term Loan Maturing 2022

7

Jan 2022

Floating (3)

4.03

%

150,000

$400 Million Term Loan Maturing 2023

5

Jan 2023

Floating (3)

4.73

%

400,000

$225 Million Term Loan Maturing 2023

5

Jan 2023

Floating (3)

4.73

%

225,000

$400 Million Term Loan Maturing 2025

5

May 2025

Floating (3)

3.92

%

400,000

Senior Unsecured Notes

10

Jun 2025

Fixed

6.00

%

474,888

Weighted-Average / Unsecured Total

4.63

%

$

2,049,888

Weighted-Average / Gross Debt

4.22

%

$

2,574,554

RLJ Lodging Trust

Consolidated Debt Summary

(Amounts in thousands)

(unaudited)

Base Maturity Balance asLoan Term (incl. Floating Interest of December / Fixed Rate (1) (Years) extensions) 31, 2020 (2)

Secured Debt

Mortgage Loan - 1 10 Jun 2022 Fixed 5.25 % $ 30,066hotel

Mortgage Loan - 2 10 Oct 2022 Fixed 4.95 % 54,549hotels

Mortgage Loan - 1 10 Oct 2022 Fixed 4.95 % 31,355hotel

Mortgage Loan - 1 10 Oct 2022 Fixed 4.94 % 27,697hotel

Mortgage Loan - 7 3 Apr 2024 Floating 1.66 % 200,000hotels

Mortgage Loan - 3 5 Apr 2026 Floating 1.74 % 96,000hotels

Mortgage Loan - 4 5 Apr 2026 Floating 1.74 % 85,000hotels

Weighted-Average / 2.61 % $ 524,666Secured Total



Unsecured Debt

Revolver (4) 4 May 2025 Floating 3.77 % $ 400,000 (3)(5)

$150 Million Term 7 Jan 2022 Floating 4.03 % 150,000Loan Maturing 2022 (3)

$400 Million Term 5 Jan 2023 Floating 4.73 % 400,000Loan Maturing 2023 (3)

$225 Million Term 5 Jan 2023 Floating 4.73 % 225,000Loan Maturing 2023 (3)

$400 Million Term 5 May 2025 Floating 3.92 % 400,000Loan Maturing 2025 (3)

Senior Unsecured 10 Jun 2025 Fixed 6.00 % 474,888Notes

Weighted-Average / 4.63 % $ 2,049,888Unsecured Total



Weighted-Average / 4.22 % $ 2,574,554Gross Debt

Note:

(1) Interest rates as of December 31, 2020.

(2) Excludes the impact of fair value adjustments and deferred financing costs.

(3) The floating interest rate is hedged with an interest rate swap.

(4) As of December 31, 2020, there was $200.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.20% annually.

(5) Reflects an interest rate swap of $299.0 million on the $400.0 million Revolver.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210225006208/en/

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