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RLJ Lodging Trust Reports Third Quarter 2012 Results

RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three and nine months ended September 30, 2012.

Third Quarter Highlights

  • Pro forma RevPAR increased 7.9%, ADR increased 6.4% and occupancy increased 1.4%
  • Pro forma Hotel EBITDA Margin increased 97 basis points to 34.5%
  • Excluding the Company’s New York assets, RevPAR would have increased 9.5% and Pro forma Hotel EBITDA Margin would have increased 178 basis points
  • Pro forma Consolidated Hotel EBITDA increased 10.9% to $77.4 million
  • Adjusted FFO increased 28.4% to $50.6 million
  • Declared a quarterly cash dividend of $0.165 per share, or $0.66 on an annualized basis

“Our strong results are reflective of the quality of our assets and the market diversification in our portfolio,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. “We expect that our active asset management and the tailwind created by our extensive two-year capital plan that is nearly complete will continue to drive robust growth.”

Financial and Operating Results

This press release presents 2011 data that combines the financial and operating results of the Company’s predecessor entities prior to the consummation of the Company’s initial public offering (“IPO”) on May 16, 2011, and the results of the Company post-IPO. Pro forma RevPAR, Pro forma Hotel EBITDA, and Pro forma Hotel EBITDA Margin exclude non-comparable hotels that were not open for operation or closed for renovations for comparable periods. The prefix “pro forma,” as defined by the Company, denotes operating results which include results for periods prior to its ownership. An explanation of EBITDA, Adjusted EBITDA, Hotel EBITDA, FFO, and Adjusted FFO, as well as reconciliations of those measures to net income or loss, if applicable, is included at the end of this release.

Pro forma RevPAR for the three months ended September 30, 2012, increased 7.9% over the comparable period in 2011, driven by an ADR increase of 6.4% and an occupancy increase of 1.4%. Among the Company’s top six markets, the best performers in the quarter were Chicago and Washington D.C., which experienced RevPAR growth of 10.2% and 9.8%, respectively. During the quarter, the timing of the Jewish holidays and a lower delegate turnout at the United Nations General Assembly negatively impacted the New York lodging market. Excluding the Company’s five assets in New York, RevPAR growth would have increased 9.5%. For the nine months ended September 30, 2012, Pro forma RevPAR increased 6.4% over the comparable period in 2011, driven by an ADR increase of 5.5% and an occupancy increase of 0.8%.

Pro forma Hotel EBITDA for the three months ended September 30, 2012, increased $7.7 million to $77.6 million, representing an 11.1% increase over the comparable period in 2011. For the nine months ended September 30, 2012, Pro forma Hotel EBITDA increased $16.6 million to $216.2 million, representing an 8.3% increase over the comparable period in 2011.

Pro forma Hotel EBITDA Margin for the three months ended September 30, 2012, increased 97 basis points over the comparable period in 2011 to 34.5%. Excluding the Company’s five assets in New York, margin growth would have increased 178 basis points. For the nine months ended September 30, 2012, Pro forma Hotel EBITDA Margin increased 50 basis points over the comparable period in 2011 to 33.6%.

Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels. For the three months ended September 30, 2012, Pro forma Consolidated Hotel EBITDA increased $7.6 million to $77.4 million, representing a 10.9% increase over the comparable period in 2011. For the nine months ended September 30, 2012, Pro forma Consolidated Hotel EBITDA increased to $217.7 million.

Adjusted EBITDA for the three months ended September 30, 2012, increased $9.9 million to $71.7 million, representing a 15.9% increase over the comparable period in 2011. For the nine months ended September 30, 2012, Adjusted EBITDA increased $19.6 million to $197.0 million, representing an 11.1% increase over the comparable period in 2011.

Adjusted FFO for the three months ended September 30, 2012, increased $11.2 million to $50.6 million, representing a 28.4% increase over the comparable period in 2011. For the nine months ended September 30, 2012, Adjusted FFO increased $30.1 million to $134.9 million, representing a 28.7% increase over the comparable period in 2011. Adjusted FFO per diluted share and unit for the three and nine months ended September 30, 2012, was $0.48 and $1.27, respectively, based on the Company’s diluted weighted-average shares and units outstanding of 106.4 million and 106.3 million for each period, respectively.

Non-recurring expenses for the three months ended September 30, 2012, consisted of $0.9 million related to an impairment charge and $0.7 million of interest and penalties incurred in connection with the Springhill Suites Southfield, Michigan mortgage loan. For the nine months ended September 30, 2012, non-recurring expenses consisted of $0.9 million related to an impairment charge, $0.7 million of interest and penalties incurred in connection with the Springhill Suites Southfield, Michigan mortgage loan, and $0.6 million related to a non-cash loss on disposal of furniture, fixtures, and equipment associated with assets under renovation. These expenses are included in net income, EBITDA and FFO, but have been excluded from Adjusted EBITDA and Adjusted FFO, as applicable.

Net income attributable to common shareholders for the three months ended September 30, 2012, was $15.2 million, compared to $31.3 million in the comparable period in 2011. For the nine months ended September 30, 2012, net income attributable to common shareholders was $27.6 million, compared to $12.6 million for the comparable period in 2011. The three and nine months ended September 30, 2011, include $23.5 million of gain associated with the deed in lieu transfer of the New York LaGuardia Airport Marriott that occurred in the third quarter of 2011.

Net cash flow from operating activities for the nine months ended September 30, 2012, totaled $123.7 million compared to $90.6 million for the comparable period in 2011.

Capital Expenditures

The Company’s 2012 capital plan to upgrade and/or reposition 45 hotels for approximately $95.0 million is entering its final phase.

Stock quotes in this article: RLJ 

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