Business Wire | May 5, 2021 04:31PM EDT

RLJ Lodging Trust Reports First Quarter 2021 Results

May 05, 2021

BETHESDA, Md.--(BUSINESS WIRE)--May 05, 2021--RLJ Lodging Trust (the "Company") (NYSE: RLJ) today reported results for the three months ended March 31, 2021.

First Quarter Highlights

* Repaid $200.0 million on Revolving Credit Facility * Sold one non-core hotel for a gain of $1.1 million * 97 hotels open during the first quarter, representing 96% of the portfolio * Total portfolio achieved 43.0% occupancy and open hotels achieved 46.4% occupancy * Total revenue of $119.6 million * Net loss of ($79.1) million * Net loss per share of ($0.51) * Adjusted EBITDA of $3.6 million * Adjusted FFO per diluted common share and unit of ($0.18) * Continued to maintain a strong balance sheet with approximately $648.0 million of unrestricted cash and over $1.0 billion of liquidity

"We are encouraged by the acceleration in lodging demand that we saw throughout the first quarter and are pleased to see the relative outperformance of our portfolio unfold, as we had expected," commented Leslie D. Hale, President and Chief Executive Officer. "Our portfolio's favorable positioning with respect to our brands, product type and geographic footprint allowed us to gain significant market share during the first quarter and enabled us to achieve positive corporate EBITDA for the first time since the pandemic unfolded. The strong start to the year has increased our confidence in the strength of the lodging recovery. Against this improving backdrop we are well positioned to unlock our embedded growth catalysts and to outperform throughout the recovery and beyond."

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 thousands, except ADR, RevPAR, and pershare amounts)

(unaudited)

For the three months ended

March 31,

2021 2020 Change

Operational Overview: (1)

Pro forma ADR $118.63 $176.81 (32.9)%

Pro forma Occupancy 43.0% 60.5% (29.0)%

Pro forma RevPAR $50.99 $107.04 (52.4)%



Financial Overview:

Total Revenues $119,552 $265,481 (55.0)%

Pro forma Hotel Revenue $119,525 $264,589 (54.8)%



Net Loss ($79,117) ($30,829) (156.6) %



Pro forma Hotel EBITDA $11,462 $51,019 (77.5)%

Adjusted EBITDA (2) $3,592 $41,417 (91.3)%



Adjusted FFO ($29,767) $16,870 (276.4) %

Adjusted FFO Per Diluted Common Share and Unit ($0.18) $0.10 (280.0) %

Note:

(1) Pro forma statistics reflect the Company's 101 hotel portfolio as of March 31, 2021.

(2) Adjusted EBITDA for the three months ended March 31, 2021 and 2020, included $0.7 million and ($0.2) million, respectively, from sold hotels.

Operating and Cash Burn Update

The Company's first quarter operations benefited from significant growth in demand as a result of increased vaccine distribution, easing of government restrictions and pent up leisure demand. These improving trends, combined with our hotels continuing to operate under stringent cost containment initiatives, led to the Company's entire portfolio achieving positive Hotel EBITDA during the first quarter.

The improvement in hotel-level cash flows lowered the Company's average monthly burn rate for the three-months ended March 31, 2021 to approximately $14.0 million (excluding capital investments), which was 30% below the low end of the Company's prior estimated range of $20.0 million to $24.0 million.

For the second quarter of 2021, the Company estimates that average monthly cash burn will be approximately $16.0 million to $20.0 million (excluding capital investments). The current range is inclusive of hotel-level operating shortfalls, 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 Company's cash burn during the second quarter will include $14.0 million in semi-annual interest payments that are due in June, on its senior notes.

Update on Hotel Reopenings

As of March 31, 2021, the Company had 97 hotels open, representing 96% of the Company's portfolio, and subsequently reopened one hotel in April 2021. The Company will continue to evaluate market conditions with respect to reopening the remaining three suspended hotels, of which two are located in New York City and one in San Francisco. All open hotels continue to operate under aggressive operating cost containment plans, including reduced staffing, minimizing non-essential amenities and services, and modified food and beverage offerings.

Dispositions

As previously disclosed, the Company closed on the sale of the 112-room Courtyard Houston Sugarland on January 21, 2021 for approximately $4.4 million and recorded a net gain on sale of approximately $1.1 million.

During the three months ended March 31, 2021, the Company entered into purchase and sale agreements to sell two non-core hotel properties and recorded impairment losses of $5.9 million on these two hotels. The sales of these two hotel properties are expected to close during the second quarter of 2021.

Balance Sheet

During the first quarter, the Company repaid $200.0 million on its Revolving Credit Facility resulting in $200.0 million outstanding as of March 31, 2021. As of March 31, 2021, the Company had $647.8 million of unrestricted cash on its balance sheet, $400.0 million available under its Revolving Credit Facility, over $1.0 billion of total liquidity, no debt maturities until 2022, and $2.4 billion of debt outstanding.

Dividends

The Company's Board of Trustees declared a quarterly cash dividend of $0.01 per common share of beneficial interest in the first quarter. The dividend was paid on April 15, 2021 to shareholders of record as of March 31, 2021.

The Company's Board of Trustees declared a quarterly cash dividend of $0.4875 on the Company's Series A Preferred Shares. The dividend was paid on April 30, 2021 to shareholders of record as of March 31, 2021.

2021 Outlook

Given the continued uncertainties related to the 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 May 6, 2021, at 10:00 a.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust's first quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company's website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company's website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and pro forma operating statistics, which is available on the Company's website.

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 speed and effectiveness of vaccine and treatment developments and their deployment, including public adoption rates of COVID-19 vaccines; 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. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. 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 investors 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, EBITDA and EBITDAre

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 any non-comparable hotels that were under renovation. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Sold hotels

For the three months ended March 31, 2021 and 2020, respectively, pro forma adjustments included the following sold hotels:

* Residence Inn Houston Sugarland sold in December 2020 * Courtyard Houston Sugarland sold in January 2021

Note:

(1) Pro forma statistics reflect the Company's 101 hotel portfolio as of March31, 2021.

(2) Adjusted EBITDA for the three months ended March 31, 2021 and 2020,included $0.7 million and ($0.2) million, respectively, from sold hotels.

Operating and Cash Burn Update

The Company's first quarter operations benefited from significant growth in demand as a result of increased vaccine distribution, easing of government restrictions and pent up leisure demand. These improving trends, combined with our hotels continuing to operate under stringent cost containment initiatives, led to the Company's entire portfolio achieving positive Hotel EBITDA during the first quarter.

The improvement in hotel-level cash flows lowered the Company's average monthly burn rate for the three-months ended March 31, 2021 to approximately $14.0 million (excluding capital investments), which was 30% below the low end of the Company's prior estimated range of $20.0 million to $24.0 million.

For the second quarter of 2021, the Company estimates that average monthly cash burn will be approximately $16.0 million to $20.0 million (excluding capital investments). The current range is inclusive of hotel-level operating shortfalls, 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 Company's cash burn during the second quarter will include $14.0 million in semi-annual interest payments that are due in June, on its senior notes.

Update on Hotel Reopenings

As of March 31, 2021, the Company had 97 hotels open, representing 96% of the Company's portfolio, and subsequently reopened one hotel in April 2021. The Company will continue to evaluate market conditions with respect to reopening the remaining three suspended hotels, of which two are located in New York City and one in San Francisco. All open hotels continue to operate under aggressive operating cost containment plans, including reduced staffing, minimizing non-essential amenities and services, and modified food and beverage offerings.

Dispositions

As previously disclosed, the Company closed on the sale of the 112-room Courtyard Houston Sugarland on January 21, 2021 for approximately $4.4 million and recorded a net gain on sale of approximately $1.1 million.

During the three months ended March 31, 2021, the Company entered into purchase and sale agreements to sell two non-core hotel properties and recorded impairment losses of $5.9 million on these two hotels. The sales of these two hotel properties are expected to close during the second quarter of 2021.

Balance Sheet

During the first quarter, the Company repaid $200.0 million on its Revolving Credit Facility resulting in $200.0 million outstanding as of March 31, 2021. As of March 31, 2021, the Company had $647.8 million of unrestricted cash on its balance sheet, $400.0 million available under its Revolving Credit Facility, over $1.0 billion of total liquidity, no debt maturities until 2022, and $2.4 billion of debt outstanding.

Dividends

The Company's Board of Trustees declared a quarterly cash dividend of $0.01 per common share of beneficial interest in the first quarter. The dividend was paid on April 15, 2021 to shareholders of record as of March 31, 2021.

The Company's Board of Trustees declared a quarterly cash dividend of $0.4875 on the Company's Series A Preferred Shares. The dividend was paid on April 30, 2021 to shareholders of record as of March 31, 2021.

2021 Outlook

Given the continued uncertainties related to the 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 May 6, 2021, at 10:00 a.m. (Eastern Time). The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants and requesting RLJ Lodging Trust's first quarter earnings conference call. Additionally, a live webcast of the conference call will be available through the Company's website at http://www.rljlodgingtrust.com. A replay of the conference call webcast will be archived and available through the Investor Relations section of the Company's website for two weeks.

Supplemental Information

Please refer to the schedule of supplemental information for additional detail and pro forma operating statistics, which is available on the Company's website.

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 speed and effectiveness of vaccine and treatment developments and their deployment, including public adoption rates of COVID-19 vaccines; 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. Moreover, investors are cautioned to interpret many of the risks identified under the section entitled "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. 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 investors 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, EBITDA and EBITDAre

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 any non-comparable hotels that were under renovation. The following is a summary of pro forma hotel adjustments:

Pro forma adjustments: Sold hotels

For the three months ended March 31, 2021 and 2020, respectively, pro forma adjustments included the following sold hotels:

* Residence Inn Houston Sugarland sold in December 2020 * Courtyard Houston Sugarland sold in January 2021

RLJ Lodging Trust

Consolidated Balance Sheets

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

(unaudited)

March 31, December 31, 2021 2020

Assets

Investment in hotel properties, net $ 4,442,945 $ 4,486,416

Investment in unconsolidated joint ventures 6,665 6,798

Cash and cash equivalents 647,844 899,813

Restricted cash reserves 33,391 34,977

Hotel and other receivables, net of allowance 19,054 13,346 of $253 and $292, respectively

Lease right-of-use assets 141,660 142,989

Prepaid expense and other assets 37,004 32,833

Total assets $ 5,328,563 $ 5,617,172

Liabilities and Equity

Debt, net $ 2,377,981 $ 2,587,731

Accounts payable and other liabilities 159,538 172,325

Advance deposits and deferred revenue 28,211 32,177

Lease liabilities 121,954 122,593

Accrued interest 13,288 6,206

Distributions payable 8,383 8,752

Total liabilities 2,709,355 2,929,784

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, atMarch 31, 2021 and December 31, 2020

Common shares of beneficial interest, $0.01 parvalue, 450,000,000 shares authorized;164,918,126 and 165,002,752 shares issued and 1,649 1,650 outstanding at March 31, 2021 and December 31,2020, respectively

Additional paid-in capital 3,078,824 3,077,142

Accumulated other comprehensive loss (52,330 ) (69,050 )

Distributions in excess of net earnings (795,706 ) (710,161 )

Total shareholders' equity 2,599,373 2,666,517

Noncontrolling interest:

Noncontrolling interest in consolidated joint 12,365 13,002 ventures

Noncontrolling interest in the Operating 7,470 7,869 Partnership

Total noncontrolling interest 19,835 20,871

Total equity 2,619,208 2,687,388

Total liabilities and equity $ 5,328,563 $ 5,617,172

Note:

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

Note:

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

RLJ Lodging Trust

Consolidated Statements of Operations

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

(unaudited)

For the three months ended March 31,

2021

2020

Revenues

Operating revenues

Room revenue

$

102,772

$

218,892

Food and beverage revenue

6,242

30,767

Other revenue

10,538

15,822

Total revenues

$

119,552

$

265,481

Expenses

Operating expenses

Room expense

29,427

63,753

Food and beverage expense

4,556

26,381

Management and franchise fee expense

5,361

17,144

Other operating expense

49,120

80,957

Total property operating expenses

88,464

188,235

Depreciation and amortization

46,943

49,173

Impairment losses

5,946

-

Property tax, insurance and other

20,081

28,692

General and administrative

10,800

11,769

Transaction costs

60

10

Total operating expenses

172,294

277,879

Other income

465

579

Interest income

384

2,966

Interest expense

(27,895

)

(23,813

)

Gain on sale of hotel properties, net

1,083

102

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

(78,705

)

(32,564

)

Equity in (loss) income from unconsolidated joint ventures

(298

)

585

Loss before income tax (expense) benefit

(79,003

)

(31,979

)

Income tax (expense) benefit

(114

)

1,150

Net loss

(79,117

)

(30,829

)

Net loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated joint ventures

736

1,313

Noncontrolling interest in the Operating Partnership

396

192

Net loss attributable to RLJ

(77,985

)

(29,324

)

Preferred dividends

(6,279

)

(6,279

)

Net loss attributable to common shareholders

$

(84,264

)

$

(35,603

)

Basic and diluted per common share data:

Net loss per share attributable to common shareholders

$

(0.51

)

$

(0.21

)

Weighted-average number of common shares

163,826,009

167,149,733

RLJ Lodging Trust

Consolidated Statements of Operations

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

(unaudited)

For the three months ended March 31,

2021 2020

Revenues

Operating revenues

Room revenue $ 102,772 $ 218,892

Food and beverage revenue 6,242 30,767

Other revenue 10,538 15,822

Total revenues $ 119,552 $ 265,481

Expenses

Operating expenses

Room expense 29,427 63,753

Food and beverage expense 4,556 26,381

Management and franchise fee expense 5,361 17,144

Other operating expense 49,120 80,957

Total property operating expenses 88,464 188,235

Depreciation and amortization 46,943 49,173

Impairment losses 5,946 -

Property tax, insurance and other 20,081 28,692

General and administrative 10,800 11,769

Transaction costs 60 10

Total operating expenses 172,294 277,879

Other income 465 579

Interest income 384 2,966

Interest expense (27,895 ) (23,813 )

Gain on sale of hotel properties, net 1,083 102

Loss before equity in (loss) income from (78,705 ) (32,564 )unconsolidated joint ventures

Equity in (loss) income from unconsolidated (298 ) 585 joint ventures

Loss before income tax (expense) benefit (79,003 ) (31,979 )

Income tax (expense) benefit (114 ) 1,150

Net loss (79,117 ) (30,829 )

Net loss attributable to noncontrolling interests:

Noncontrolling interest in consolidated 736 1,313 joint ventures

Noncontrolling interest in the Operating 396 192 Partnership

Net loss attributable to RLJ (77,985 ) (29,324 )

Preferred dividends (6,279 ) (6,279 )

Net loss attributable to common $ (84,264 ) $ (35,603 )shareholders

Basic and diluted per common share data:

Net loss per share attributable to common $ (0.51 ) $ (0.21 )shareholders

Weighted-average number of common shares 163,826,009 167,149,733

Note:

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

Note:

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

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands, except per share data)

(unaudited)

Funds from Operations (FFO) Attributable to Common Shareholders and Unit holders

For the three months ended March 31,

2021

2020

Net loss

$

(79,117

)

$

(30,829

)

Preferred dividends

(6,279

)

(6,279

)

Depreciation and amortization

46,943

49,173

Gain on sale of hotel properties, net

(1,083

)

(102

)

Impairment losses

5,946

-

Noncontrolling interest in consolidated joint ventures

736

1,313

Adjustments related to consolidated joint ventures (1)

(75

)

(75

)

Adjustments related to unconsolidated joint ventures (2)

294

494

FFO

(32,635

)

13,695

Transaction costs

60

10

Amortization of share-based compensation

2,752

2,696

Non-cash income tax benefit

-

(1,242

)

Unrealized loss on discontinued cash flow hedges

-

1,557

Other expenses (3)

56

154

Adjusted FFO

$

(29,767

)

$

16,870

Adjusted FFO per common share and unit-basic

$

(0.18

)

$

0.10

Adjusted FFO per common share and unit-diluted

$

(0.18

)

$

0.10

Basic weighted-average common shares and units outstanding (4)

164,598

167,922

Diluted weighted-average common shares and units outstanding (4)

164,598

167,922

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands, except per share data)

(unaudited)

Funds from Operations (FFO) Attributable to Common Shareholders and Unitholders

For the three months ended March 31,

2021 2020

Net loss $ (79,117 ) $ (30,829 )

Preferred dividends (6,279 ) (6,279 )

Depreciation and amortization 46,943 49,173

Gain on sale of hotel properties, net (1,083 ) (102 )

Impairment losses 5,946 -

Noncontrolling interest in consolidated joint 736 1,313 ventures

Adjustments related to consolidated joint (75 ) (75 )ventures (1)

Adjustments related to unconsolidated joint 294 494 ventures (2)

FFO (32,635 ) 13,695

Transaction costs 60 10

Amortization of share-based compensation 2,752 2,696

Non-cash income tax benefit - (1,242 )

Unrealized loss on discontinued cash flow hedges - 1,557

Other expenses (3) 56 154

Adjusted FFO $ (29,767 ) $ 16,870



Adjusted FFO per common share and unit-basic $ (0.18 ) $ 0.10

Adjusted FFO per common share and unit-diluted $ (0.18 ) $ 0.10



Basic weighted-average common shares and units 164,598 167,922 outstanding (4)

Diluted weighted-average common shares and units 164,598 167,922 outstanding (4)

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 of the unconsolidated joint ventures.

(3) Represents income and expenses outside of the normal course of operations.

(4) Includes 0.8 million weighted-average operating partnership units for the three month periods ended March 31, 2021 and 2020.

Note:

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

(2) Includes our ownership interest in the depreciation and amortizationexpense of the unconsolidated joint ventures.

(3) Represents income and expenses outside of the normal course of operations.

(4) Includes 0.8 million weighted-average operating partnership units for thethree month periods ended March 31, 2021 and 2020.

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

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

For the three months ended March 31,

2021

2020

Net loss

$

(79,117

)

$

(30,829

)

Depreciation and amortization

46,943

49,173

Interest expense, net of interest income

27,511

20,847

Income tax expense (benefit)

114

(1,150

)

Adjustments related to unconsolidated joint ventures (1)

410

618

EBITDA

(4,139

)

38,659

Gain on sale of hotel properties, net

(1,083

)

(102

)

Impairment losses

5,946

-

EBITDAre

724

38,557

Transaction costs

60

10

Amortization of share-based compensation

2,752

2,696

Other expenses (2)

56

154

Adjusted EBITDA

3,592

41,417

General and administrative (3)

8,048

9,073

Other corporate adjustments (4)

513

305

Consolidated Hotel EBITDA

12,153

50,795

Pro forma adjustments - income from sold hotels

(691

)

224

Pro forma Hotel EBITDA

$

11,462

$

51,019

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

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

For the three months ended March 31,

2021 2020

Net loss $ (79,117 ) $ (30,829 )

Depreciation and amortization 46,943 49,173

Interest expense, net of interest income 27,511 20,847

Income tax expense (benefit) 114 (1,150 )

Adjustments related to unconsolidated joint 410 618 ventures (1)

EBITDA (4,139 ) 38,659

Gain on sale of hotel properties, net (1,083 ) (102 )

Impairment losses 5,946 -

EBITDAre 724 38,557

Transaction costs 60 10

Amortization of share-based compensation 2,752 2,696

Other expenses (2) 56 154

Adjusted EBITDA 3,592 41,417

General and administrative (3) 8,048 9,073

Other corporate adjustments (4) 513 305

Consolidated Hotel EBITDA 12,153 50,795

Pro forma adjustments - income from sold (691 ) 224 hotels

Pro forma Hotel EBITDA $ 11,462 $ 51,019

Note:

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

(2) Represents income and expenses outside of the normal course of operations.

(3) Excludes amortization of share-based compensation reflected in Adjusted EBITDA.

(4) 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, andamortization expense of the unconsolidated joint ventures.

(2) Represents income and expenses outside of the normal course of operations.

(3) Excludes amortization of share-based compensation reflected in AdjustedEBITDA.

(4) Other corporate adjustments include property-level adjustments and certainrevenues and expenses at corporate entities. These items include interestincome, amortization of deferred management fees, key money amortization,ground rent amortization, legal fees, revenues and expenses associated withnon-hotel properties, income (loss) from unconsolidated entities, internallease 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 March 31,

2021

2020

Total revenue

$

119,552

$

265,481

Pro forma adjustments - revenue from sold hotels

(7

)

(864

)

Other corporate adjustments / non-hotel revenue

(20

)

(28

)

Pro forma Hotel Revenue

$

119,525

$

264,589

Pro forma Hotel EBITDA

$

11,462

$

51,019

Pro forma Hotel EBITDA Margin

9.6

%

19.3

%

RLJ Lodging Trust

Reconciliation of Non-GAAP Measures

(Amounts in thousands)

(unaudited)

Pro forma Hotel EBITDA Margin

For the three months ended March 31,

2021 2020

Total revenue $ 119,552 $ 265,481

Pro forma adjustments - revenue from sold (7 ) (864 )hotels

Other corporate adjustments / non-hotel (20 ) (28 )revenue

Pro forma Hotel Revenue $ 119,525 $ 264,589



Pro forma Hotel EBITDA $ 11,462 $ 51,019



Pro forma Hotel EBITDA Margin 9.6 % 19.3 %

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

March 31, 2021 (2)

Secured Debt

Mortgage loan - 1 hotel

10

Jun 2022

Fixed

5.25

%

$

29,880

Mortgage loan - 2 hotels

10

Oct 2022

Fixed

4.95

%

54,206

Mortgage loan - 1 hotel

10

Oct 2022

Fixed

4.95

%

31,158

Mortgage loan - 1 hotel

10

Oct 2022

Fixed

4.94

%

27,522

Mortgage loan - 7 hotels

3

Apr 2024

Floating (3)

3.30

%

200,000

Mortgage loan - 3 hotels

5

Apr 2026

Floating (3)(5)

3.00

%

96,000

Mortgage loan - 4 hotels

5

Apr 2026

Floating

1.71

%

85,000

Weighted Average / Secured Total

3.45

%

$

523,765

Unsecured Debt

Revolver (4)

4

May 2025

Floating (3)

4.39

%

$

200,000

$150 Million Term Loan Maturing 2022

7

Jan 2022

Floating (3)

4.03

%

141,525

$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

4.79

%

$

1,841,413

Weighted Average / Gross Total

4.49

%

$

2,365,178

RLJ Lodging Trust

Consolidated Debt Summary

(Amounts in thousands)

(unaudited)

Base Maturity Interest Balance as ofLoan Term Floating (incl. / Fixed Rate (1) March 31, (Years) extensions) 2021 (2)

Secured Debt

Mortgage loan - 1 10 Jun 2022 Fixed 5.25 % $ 29,880hotel

Mortgage loan - 2 10 Oct 2022 Fixed 4.95 % 54,206 hotels

Mortgage loan - 1 10 Oct 2022 Fixed 4.95 % 31,158 hotel

Mortgage loan - 1 10 Oct 2022 Fixed 4.94 % 27,522 hotel

Mortgage loan - 7 3 Apr 2024 Floating 3.30 % 200,000 hotels (3)

Mortgage loan - 3 5 Apr 2026 Floating 3.00 % 96,000 hotels (3)(5)

Mortgage loan - 4 5 Apr 2026 Floating 1.71 % 85,000 hotels

Weighted Average 3.45 % $ 523,765 / Secured Total



Unsecured Debt

Revolver (4) 4 May 2025 Floating 4.39 % $ 200,000 (3)

$150 Million Term FloatingLoan Maturing 7 Jan 2022 (3) 4.03 % 141,525 2022

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

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

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

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

Weighted Average 4.79 % $ 1,841,413 / Unsecured Total



Weighted Average 4.49 % $ 2,365,178 / Gross Total

Note:

(1) Interest rates as of March 31, 2021.

(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 March 31, 2021, there was $400.0 million of borrowing capacity on the Revolver, which is charged an unused commitment fee of 0.25% annually.

(5) Reflects an interest rate swap of $57.5 million on the $96.0 million mortgage loan.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505006124/en/

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