RLJ Lodging Trust Reports Third Quarter 2014 Results

BETHESDA, Md.–(hospitalitybusinessnews.com)– RLJ Lodging Trust  today reported results for the three and nine months ended September 30, 2014.

Third Quarter Highlights

  • Pro forma RevPAR increased 9.6%, Pro forma ADR increased 4.6%, and Pro forma Occupancy increased 4.8%
  • Pro forma Hotel EBITDA Margin increased 201 basis points to 36.8%
  • Pro forma Consolidated Hotel EBITDA increased 16.0% to $109.4 million
  • Adjusted FFO increased 34.2% to $87.4 million
  • Acquired two hotels in attractive high-growth markets for more than $125 million
  • Increased cash dividend by 36.4% to $0.30 per share for the quarter

“Our results this quarter illustrate that our disciplined investment strategy and our focus on operational excellence continue to drive solid growth for our portfolio,” commented Thomas J. Baltimore, Jr., President and Chief Executive Officer. “With the completion of our recent financing, we further strengthened our balance sheet and increased our flexibility for future growth. Our strong results have allowed us to increase our dividend meaningfully and continue to deliver significant value to our shareholders.”

Financial and Operating Results

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

Pro forma RevPAR for the three months ended September 30, 2014, increased 9.6% over the comparable period in 2013, driven by a Pro forma ADR increase of 4.6% and a Pro forma Occupancy increase of 4.8%. Several of the Company’s top six markets achieved double digit RevPAR growth. Austin, Denver, Washington D.C., and Houston experienced RevPAR growth of 14.1%, 11.1%, 10.8%, and 10.4%, respectively. For the nine months ended September 30, 2014, Pro forma RevPAR increased 7.5% over the comparable period in 2013, driven by a Pro forma ADR increase of 3.7% and a Pro forma Occupancy increase of 3.7%.

Pro forma Hotel EBITDA Margin for the three months ended September 30, 2014, increased 201 basis points over the comparable period in 2013 to 36.8%. For the nine months ended September 30, 2014, Pro forma Hotel EBITDA Margin increased 101 basis points over the comparable period in 2013 to 35.9%, adjusted to normalize 2013 ground rent at the Courtyard Waikiki Beach.

Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels. For the three months ended September 30, 2014, Pro forma Consolidated Hotel EBITDA increased $15.1 million to $109.4 million, representing a 16.0% increase over the comparable period in 2013. For the nine months ended September 30, 2014, Pro forma Consolidated Hotel EBITDA increased $29.7 million to $307.9 million, representing a 10.7% increase over the comparable period in 2013, adjusted to normalize 2013 ground rent at the Courtyard Waikiki Beach.

Adjusted EBITDA for the three months ended September 30, 2014, increased $20.9 million to $101.6 million, representing a 25.8% increase over the comparable period in 2013. For the nine months ended September 30, 2014, Adjusted EBITDA increased $42.5 million to $276.7 million, representing an increase of 18.1% over the comparable period in 2013.

Adjusted FFO for the three months ended September 30, 2014, increased $22.3 million to $87.4 million, representing a 34.2% increase over the comparable period in 2013. For the nine months ended September 30, 2014, Adjusted FFO increased $50.6 million to $234.6 million, representing an increase of 27.5% over the comparable period in 2013.

Adjusted FFO per diluted share and unit for the three and nine months ended September 30, 2014, was $0.66 and $1.83, respectively, based on the Company’s diluted weighted-average common shares and units outstanding of 133.3 million and 128.2 million for each period, respectively.

Non-recurring items which are noteworthy for the three months ended September 30, 2014, include an impairment loss of $9.2 million related to certain hotels being marketed for sale.

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

Net income attributable to common shareholders for the three months ended September 30, 2014, was $36.8 million compared to $36.5 million for the comparable period in 2013. For the nine months ended September 30, 2014, net income attributable to common shareholders was $101.6 million, compared to $85.5 million for the comparable period in 2013.

Net cash flow from operating activities for the nine months ended September 30, 2014, totaled $224.1 million compared to $185.2 million for the comparable period in 2013.

Acquisitions

During the three months ended September 30, 2014, the Company acquired two hotels in attractive high-growth markets: the 194-room Hyatt Atlanta Midtown in Atlanta, Georgia, and the 215-room DoubleTree Grand Key Resort in Key West, Florida.

On July 14, 2014, the Company acquired the 194-room Hyatt Atlanta Midtown in an off-market transaction for a total purchase price of $49.5 million, or approximately $255,000 per key. The Company expects that the purchase price will represent a forward capitalization rate of approximately 8.0% based on the hotel’s projected 2015 net operating income.

On September 11, 2014, the Company acquired the 215-room DoubleTree Grand Key Resort in an off-market transaction for a purchase price of $77.0 million, or approximately $358,000 per key. The Company plans to spend an estimated $7.0 million on renovation upgrades in 2015. The Company expects that the purchase price and pending capital expenditures will represent a forward capitalization rate of approximately 8.0% based on the hotel’s projected 2016 net operating income.

Balance Sheet

As of September 30, 2014, the Company had $274.4 million of unrestricted cash on its balance sheet, $300.0 million available on its revolving credit facility, and approximately $1.6 billion of debt outstanding. The Company’s ratio of net debt to Adjusted EBITDA for the trailing twelve month period ended September 30, 2014, was 3.5 times.

Dividends

The Company’s Board of Trustees declared a cash dividend of $0.30 per common share of beneficial interest. This dividend represents a 36.4% increase to the prior quarter’s regular cash dividend. The dividend was paid on October 15, 2014, to shareholders of record as of September 30, 2014.

Subsequent Events

In October 2014, the Company originated four mortgage loans totaling $143.0 million and used the proceeds to retire five mortgage loans. The new mortgages bear a floating rate of LIBOR plus 225 basis points.

2014 Outlook

The Company’s outlook has been updated to reflect the portfolio’s strong performance and recent acquisitions. The outlook excludes potential future acquisitions and dispositions, which could result in a material change to the Company’s outlook. The 2014 outlook is also based on a number of other assumptions, many of which are outside the Company’s control and all of which are subject to change.

Pro forma operating statistics include results for periods prior to the Company’s ownership and therefore assume the hotels were owned since January 1, 2013. Pro forma Consolidated Hotel EBITDA includes approximately $12.2 million of prior ownership Hotel EBITDA for recently acquired hotels that is not included in the Company’s Adjusted EBITDA or Adjusted FFO. Pro forma guidance removes income from hotels that were sold.

For the full year 2014, the Company anticipates:

Current Outlook Prior Outlook
Pro forma RevPAR growth (1) 6.0% to 8.0% 5.0% to 7.0%
Pro forma Hotel EBITDA Margin (1) 35.1% to 36.1% 34.7% to 35.7%
Pro forma Consolidated Hotel EBITDA $390.0M to $410.0M $380.0M to $400.0M

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

 

RLJ Lodging Trust
Consolidated Balance Sheets

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

September 30, December 31,
2014 2013
(unaudited)
Assets
Investment in hotels and other properties, net $ 3,704,801 $ 3,241,163
Cash and cash equivalents 274,440 332,248
Restricted cash reserves 59,484 62,430
Hotel and other receivables, net of allowance of $233 and $234, respectively 37,574 22,762
Deferred financing costs, net 9,866 11,599
Deferred income tax asset 2,941 2,529
Purchase deposits 1,000 7,246
Prepaid expense and other assets 43,882 37,997
Total assets $ 4,133,988 $ 3,717,974
Liabilities and Equity
Mortgage loans $ 533,335 $ 559,665
Term loans 1,025,000 850,000
Accounts payable and accrued expense 125,752 115,011
Deferred income tax liability 3,325 3,548
Advance deposits and deferred revenue 13,074 9,851
Accrued interest 2,711 2,695
Distributions payable 41,834 30,870
Total liabilities 1,745,031 1,571,640
Equity
Shareholders’ equity:
Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized; zero shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 132,024,296 and 122,640,042 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively 1,319 1,226
Additional paid-in-capital 2,417,759 2,178,004
Accumulated other comprehensive loss (7,287 ) (5,941 )
Distributions in excess of net earnings (40,369 ) (45,522 )
Total shareholders’ equity 2,371,422 2,127,767
Noncontrolling interest
Noncontrolling interest in joint venture 6,226 7,306
Noncontrolling interest in Operating Partnership 11,309 11,261
Total noncontrolling interest 17,535 18,567
Total equity 2,388,957 2,146,334
Total liabilities and equity $ 4,133,988 $ 3,717,974
RLJ Lodging Trust
Consolidated Statements of Operations

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

(unaudited)

For the three months ended

For the nine months ended

September 30,

September 30,
2014 2013 2014 2013
Revenue
Operating revenue
Room revenue $ 261,895 $ 221,318 $ 727,367 $ 635,157
Food and beverage revenue 27,076 22,907 77,924 71,206
Other operating department revenue 8,695 7,891 23,795 21,446
Total revenue 297,666 252,116 829,086 727,809
Expense
Operating expense
Room expense 57,012 49,388 158,669 139,550
Food and beverage expense 19,397 16,629 55,016 50,406
Management fee expense 11,569 8,773 32,639 25,524
Other operating expense 83,273 74,482 234,281 213,919
Total property operating expense 171,251 149,272 480,605 429,399
Depreciation and amortization 37,243 31,551 105,541 94,748
Impairment loss 9,200 9,200
Property tax, insurance and other 17,874 16,628 53,064 47,873
General and administrative 11,029 8,961 31,293 26,839
Transaction and pursuit costs 480 478 4,375 2,822
Total operating expense 247,077 206,890 684,078 601,681
Operating income 50,589 45,226 145,008 126,128
Other income 48 164 563 334
Interest income 337 241 1,622 777
Interest expense (13,858 ) (16,511 ) (42,646 ) (50,170 )
Gain on foreclosure 4,831 4,831
Income from continuing operations before income tax expense 37,116 33,951 104,547 81,900
Income tax expense (374 ) (181 ) (1,162 ) (752 )
Income from continuing operations 36,742 33,770 103,385 81,148
Income from discontinued operations 3,158 5,349
Gain (loss) on disposal of hotel properties 322 (975 )
Net income 37,064 36,928 102,410 86,497
Net income attributable to non-controlling interests
Noncontrolling interest in consolidated joint venture (57 ) (166 ) (102 ) (321 )
Noncontrolling interest in common units of Operating Partnership (247 ) (293 ) (712 ) (700 )
Net income attributable to common shareholders $ 36,760 $ 36,469 $ 101,596 $ 85,476
Basic per common share data
Income from continuing operations attributable to common shareholders, including loss on disposal of hotel properties $ 0.28 $ 0.27 $ 0.80 $ 0.68
Discontinued operations 0.03 0.05
Net income per share attributable to common shareholders $ 0.28 $ 0.30 $ 0.80 $ 0.73
Weighted-average number of common shares 131,106,440 121,594,219 126,070,309 116,697,417
Diluted per common share data
Income from continuing operations attributable to common shareholders, including loss on disposal of hotel properties $ 0.28 $ 0.27 $ 0.79 $ 0.67
Discontinued operations 0.03 0.05
Net income per share attributable to common shareholders $ 0.28 $ 0.30 $ 0.79 $ 0.72
Weighted-average number of common shares 132,386,843 122,750,121 127,297,901 117,797,670

Note:

The Statement of Comprehensive Income and corresponding footnotes can be found in the Company’s Quarterly Report on Form 10-Q.

RLJ Lodging Trust
Reconciliation of Net Income to Non-GAAP Measures

(Amounts in thousands, except per share data)

(unaudited)

Funds From Operations (FFO)

For the three months ended

For the nine months ended

September 30,

September 30,

2014 2013 2014 2013
Net income $ 37,064 $ 36,928 $ 102,410 $ 86,497
Depreciation and amortization 37,243 31,551 105,541 94,748
(Gain) Loss on disposal of hotel properties (322 ) 975
Gain on extinguishment of indebtedness (3,277 ) (5,702 )
Impairment loss 9,200 9,200
Noncontrolling interest in joint venture (57 ) (166 ) (102 ) (321 )
Adjustments related to discontinued operations (1) 35 191
Adjustments related to joint venture (2) (47 ) (121 ) (139 ) (363 )
FFO attributable to common shareholders 83,081 64,950 217,885 175,050
Gain on foreclosure (4,831 ) (4,831 )
Transaction and pursuit costs 480 478 4,375 2,822
Amortization of share based compensation 3,851 3,344 11,244 9,691
Loan related costs (3) 1,046 1,073 1,046
Other expenses (4) 133 157
Adjusted FFO $ 87,412 $ 65,120 $ 234,577 $ 183,935
Adjusted FFO per common share and unit-basic $ 0.66 $ 0.53 $ 1.85 $ 1.56
Adjusted FFO per common share and unit-diluted $ 0.66 $ 0.53 $ 1.83 $ 1.55
Basic weighted-average common shares and units outstanding (5) 132,000 122,488 126,964 117,591
Diluted weighted-average common shares and units outstanding (5) 133,281 123,644 128,192 118,692

Note:

(1) Includes depreciation and amortization expense from discontinued operations.
(2) Includes depreciation and amortization expense allocated to the noncontrolling interest in the joint venture.
(3) Represents loss on defeasance and accelerated amortization of deferred financing fees.
(4) Represents accelerated deferred management expense and legal expenses outside the normal course of operations.
(5) Includes 0.9 million operating partnership units.
RLJ Lodging Trust
Reconciliation of Net Income to Non-GAAP Measures

(Amounts in thousands)

(unaudited)

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

For the three months ended

September 30,

For the nine months ended

September 30,

2014 2013 2014 2013
Net income $ 37,064 $ 36,928 $ 102,410 $ 86,497
Depreciation and amortization 37,243 31,551 105,541 94,748
Interest expense, net (1) 13,850 16,501 41,991 50,149
Income tax expense 374 181 1,162 752
Noncontrolling interest in joint venture (57 ) (166 ) (102 ) (321 )
Adjustments related to discontinued operations (2) 66 563
Adjustments related to joint venture (3) (47 ) (121 ) (139 ) (363 )
EBITDA 88,427 84,940 250,863 232,025
Gain on foreclosure (4,831 ) (4,831 )
Transaction and pursuit costs 480 478 4,375 2,822
Gain on extinguishment of indebtedness (3,277 ) (5,702 )
Impairment loss 9,200 9,200
(Gain) loss on disposal of hotel properties (322 ) 975
Amortization of share based compensation 3,851 3,344 11,244 9,691
Other expenses (4) 133 157
Adjusted EBITDA $ 101,636 $ 80,787 $ 276,657 $ 234,162
General and administrative (5) 7,178 5,617 20,049 17,148
Operating results from noncontrolling interest in joint venture 104 287 241 684
Residential income (11 ) (188 ) 23 (420 )
Pro forma adjustments (6) 368 11,776 12,176 37,954
Income from sold properties 29 (4,055 ) (1,181 ) (11,663 )
Other corporate adjustments 93 67 (48 ) 331
Pro forma Consolidated Hotel EBITDA 109,397 94,291 307,917 278,196
Non-comparable hotels (7) (933 ) (356 ) (2,111 ) (642 )
Pro forma Hotel EBITDA $ 108,464 $ 93,935 $ 305,806 $ 277,554

Note:

(1) Interest expense is net of interest income, excludes amounts attributable to investment in loans of $0.3 million and $1.0 million for the three and nine months ended September 30, 2014, respectively, and $0.2 million and $0.8 million for the three and nine months ended September 30, 2013, respectively.
(2) Includes depreciation, amortization, and interest expense from discontinued operations.
(3) Includes depreciation, amortization, and interest expense allocated to the noncontrolling interest in the joint venture.
(4) Represents accelerated deferred management expense and legal expenses outside the normal course of operations.
(5) General and administrative expenses exclude amortization of share based compensation, which is reflected in Adjusted EBITDA.
(6) Reflects prior ownership results of recent acquisitions and normalizes ground rent for the Courtyard Waikiki Beach. For nine months ended September 30, 2013, Pro forma Hotel EBITDA for Courtyard Waikiki Beach was reduced by $1.6 million.
(7) Reflects the results of Residence Inn Atlanta Midtown/Georgia Tech, Hyatt Atlanta Midtown, and Hilton Cabana Miami Beach, which were not open for the entirety of the comparable periods. Also reflects the results of Fairfield Inn & Suites Key West during three months ended September 30, 2014 and 2013, since it was closed for a comprehensive renovation during Q3 2014.
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

September 30, 2014

Secured Debt
Capmark Financial Group – 1 hotel 10 May 2015 Fixed 5.55 % $ 10,615
Capmark Financial Group – 1 hotel 10 Jun 2015 Fixed 5.55 % 4,605
Barclays Bank – 12 hotels 10 Jun 2015 Fixed 5.55 % 108,576
Barclays Bank – 4 hotels 10 Jun 2015 Fixed 5.60 % 27,030
Capmark Financial Group – 1 hotel 10 Jul 2015 Fixed 5.50 % 6,273
Barclays Bank – 1 hotel 10 Sep 2015 Fixed 5.44 % 10,236
Wells Fargo – 5 hotels (2) 3 Oct 2016 Floating 3.76 % 142,000
PNC Bank – 5 hotels 4 May 2017 Floating 2.51 % 74,000
Wells Fargo – 4 hotels 3 Sep 2020 Floating (3) 4.19 % 150,000
Secured Total / Weighted Average 4.27 % $ 533,335
Unsecured Debt
Credit Facility 4 Nov 2017 Floating % $
2013 Five-Year Term Loan 5 Aug 2018 Floating (3)(4) 3.07 % 400,000
2012 Five-Year Term Loan 5 Mar 2019 Floating (3)(5) 1.71 % 400,000
Seven-Year Term Loan 7 Nov 2019 Floating (3) 4.04 % 225,000
Unsecured Total / Weighted Average 2.75 % $ 1,025,000
Total Debt / Weighted Average 3.27 % $ 1,558,335

Note:

(1) Interest rates as of September 30, 2014.
(2) In October 2014, the Company refinanced these mortgage loans. See “Subsequent Events” section for more information.
(3) The floating interest rate is hedged with an interest rate swap.
(4) Reflects interest rate swap on $350.0 million.
(5) Interest rate does not reflect forward interest rate swap. Forward swap only applicable to $275.0 million.
RLJ Lodging Trust
Acquisitions

(unaudited)

2014 Acquisitions Location Acquisition Date

Management

Company

Rooms

Gross Purchase

Price

($ in millions) (1)

% Interest
Hyatt House Charlotte Center City Charlotte, NC Mar 12, 2014 Hyatt Affiliate 163 $ 32.5 100 %
Hyatt House Cypress Anaheim Cypress, CA Mar 12, 2014 Hyatt Affiliate 142 14.8 100 %
Hyatt House Emeryville SF Bay Area Emeryville, CA Mar 12, 2014 Hyatt Affiliate 234 39.3 100 %
Hyatt House San Diego Sorrento Mesa San Diego, CA Mar 12, 2014 Hyatt Affiliate 193 36.0 100 %
Hyatt House San Jose Silicon Valley San Jose, CA Mar 12, 2014 Hyatt Affiliate 164 44.2 100 %
Hyatt House San Ramon San Ramon, CA Mar 12, 2014 Hyatt Affiliate 142 20.8 100 %
Hyatt House Santa Clara Santa Clara, CA Mar 12, 2014 Hyatt Affiliate 150 40.6 100 %
Hyatt Market Street The Woodlands The Woodlands, TX Mar 12, 2014 Hyatt Corporation 70 25.8 100 %
Hyatt Place Fremont Silicon Valley Fremont, CA Mar 12, 2014 Hyatt Affiliate 151 23.5 100 %
Hyatt Place Madison Downtown Madison, WI Mar 12, 2014 Hyatt Affiliate 151 35.1 100 %
Courtyard Portland City Center Portland, OR May 22, 2014 Sage Hospitality 256 67.0 100 %
Embassy Suites Irvine Orange County Irvine, CA May 22, 2014 Sage Hospitality 293 53.0 100 %
Hilton Cabana Miami Beach Miami Beach, FL Jun 19, 2014 Highgate Hotels 231 71.7 100 %
Hyatt Atlanta Midtown Atlanta, GA Jul 14, 2014 Interstate Hotels and Resorts 194 49.5 100 %
DoubleTree Grand Key Resort (2) Key West, FL Sep 11, 2014 Interstate Hotels and Resorts 215 77.0 100 %
Total Acquisitions 2,749 $ 630.7
2013 Acquisitions Location Acquisition Date

Management

Company

Rooms

Gross Purchase

Price

($ in millions) (1)

% Interest
Courtyard Houston Downtown Convention Center Houston, TX Mar 19, 2013 White Lodging Services 191 $ 34.4 100 %
Residence Inn Houston Downtown Convention Center Houston, TX Mar 19, 2013 White Lodging Services 171 29.5 100 %
Humble Tower Apartments (3) Houston, TX Mar 19, 2013 N/A 82 15.6 100 %
Courtyard Waikiki Beach Honolulu, HI Jun 17, 2013 Highgate Hotels 399 75.3 100 %
Vantaggio Suites Cosmo (4) San Francisco, CA Jun 21, 2013 N/A 150 29.5 100 %
Residence Inn Atlanta Midtown/Georgia Tech (5) Atlanta, GA Aug 6, 2013 Interstate Hotels and Resorts 78 5.0 100 %
SpringHill Suites Portland Hillsboro Hillsboro, OR Oct 8, 2013 InnVentures 106 24.0 100 %
Total Acquisitions 1,177 $ 213.3

Note:

(1) Gross purchase price does not include net closing adjustments. Please refer to the 10-Q for the net purchase price.
(2) Purchase price does not include $1.3 million paid for five condominium units.
(3) This property is currently not open for operations. Conversion to a SpringHill Suites is in progress.
(4) This property is currently not open for operations. Conversion to a Courtyard by Marriott is in progress.
(5) The Company was the successful bidder at a foreclosure sale of the property collateralizing the non-performing loan. The purchase price equates to the original amount paid for the mortgage note in November 2009. In October 2014, the property reopened after a comprehensive renovation as a 90-room hotel.
RLJ Lodging Trust
Pro forma Operating Statistics — Top 50 Assets

(Amounts in thousands, except rooms)

(unaudited)

For the trailing twelve months ended September 30, 2014

Property City/State # of Rooms EBITDA
DoubleTree NYC Metropolitan New York, NY 764 $ 19,539
Marriott Louisville Downtown Louisville, KY 616 15,223
Hilton New York Fashion District New York, NY 280 10,558
Hilton Garden Inn New York W 35th St New York, NY 298 10,525
Courtyard Austin Dtwn Conv Ctr Austin, TX 270 9,557
Courtyard Chicago Downtown Mag Mile Chicago, IL 306 6,645
Courtyard Waikiki Beach Honolulu, HI 403 6,216
Courtyard Portland City Center Portland, OR 256 6,156
Fairfield Inn & Suites DC Downtown Washington, DC 198 6,053
Renaissance Pittsburgh Hotel Pittsburgh, PA 300 6,045
Embassy Suites Tampa Dtwn Conv Ctr Tampa, FL 360 5,783
Residence Inn Austin Dtwn Conv Ctr Austin, TX 179 5,323
Courtyard New York Manhattan Upper East New York, NY 226 4,966
Hilton Garden Inn SF Oakland Bay Bridge Emeryville, CA 278 4,927
Courtyard Charleston Historic District Charleston, SC 176 4,855
Marriott Denver Airport @ Gateway Park Aurora, CO 238 4,848
Embassy Suites Boston Waltham Waltham, MA 275 4,721
Courtyard Houston By The Galleria Houston, TX 190 4,702
Marriott Denver South @ Park Meadows Lone Tree, CO 279 4,661
Hilton Garden Inn Los Angeles Hollywood Los Angeles, CA 160 4,567
Hyatt House Emeryville SF Bay Area Emeryville, CA 234 4,483
Hyatt House Santa Clara Santa Clara, CA 150 4,464
Residence Inn Bethesda Downtown Bethesda, MD 187 4,461
Hilton Garden Inn New Orleans Conv Ctr New Orleans, LA 286 4,396
Homewood Suites Washington DC Downtown Washington, DC 175 4,394
DoubleTree Grand Key Resort Key West, FL 215 4,370
Embassy Suites Los Angeles Downey Downey, CA 219 4,158
Hyatt House San Jose Silicon Valley San Jose, CA 164 4,116
Residence Inn National Harbor DC Oxon Hill, MD 162 3,975
Marriott Austin South Austin, TX 211 3,762
Renaissance Ft Lauderdale Plantation Plantation, FL 250 3,715
Courtyard Houston Dtwn Conv Ctr Houston, TX 191 3,692
Hampton Inn Houston Near The Galleria Houston, TX 176 3,377
Residence Inn Chicago Oak Brook Oak Brook, IL 156 3,359
Residence Inn Houston Dtwn Conv Ctr Houston, TX 171 3,353
Renaissance Boulder Flatiron Hotel Broomfield, CO 232 3,278
Embassy Suites Irvine Orange Cnty Arprt Irvine, CA 293 3,247
Hyatt House San Diego Sorrento Mesa San Diego, CA 193 3,129
Marriott Chicago Midway Chicago, IL 200 3,054
Residence Inn Houston By The Galleria Houston, TX 146 3,035
Hilton Garden Inn Bloomington Bloomington, IN 168 3,005
Hyatt House Charlotte Center City Charlotte, NC 163 2,947
Residence Inn Louisville Downtown Louisville, KY 140 2,891
Hyatt Place Madison Downtown Madison, WI 151 2,878
Hampton Inn Garden City Garden City, NY 143 2,867
Hilton Garden Inn Pittsburgh Univ Pl Pittsburgh, PA 202 2,696
Hyatt House Dallas Lincoln Park Dallas, TX 155 2,598
Residence Inn Indy Dtwn On The Canal Indianapolis, IN 134 2,572
SpringHill Suites Portland Hillsboro Hillsboro, OR 106 2,401
Hyatt House Houston Galleria Houston, TX 147 2,178
Top 50 Assets 11,572 248,721
Other (1) 11,786 146,361
Total Portfolio 23,358 $ 395,082

Note:

The information above has not been audited and is presented only for comparison purposes. Results reflect 100% of DoubleTree NYC Metropolitan financial results, which have not been adjusted to reflect the noncontrolling interest in the joint venture.

(1) Reflects 98 hotels. Disposed hotels and two planned hotel conversions which are underway are not included.
RLJ Lodging Trust
Pro forma Operating Statistics

(unaudited)

For the three months ended September 30, 2014

% of Hotel
Top Markets Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3
NYC 5 97.3 % 97.5 % (0.2 )% $ 247.22 $ 243.70 1.4 % $ 240.66 $ 237.66 1.3 % 12 %
Chicago 21 83.4 % 79.9 % 4.4 % 137.47 131.86 4.3 % 114.64 105.30 8.9 % 12 %
Austin 14 79.2 % 72.8 % 8.8 % 136.87 130.46 4.9 % 108.46 95.02 14.1 % 8 %
Denver 13 88.8 % 83.6 % 6.2 % 134.50 128.67 4.5 % 119.44 107.55 11.1 % 9 %
Houston 9 81.6 % 73.1 % 11.6 % 148.74 150.37 (1.1 )% 121.32 109.93 10.4 % 6 %
Washington DC 7 82.3 % 76.8 % 7.2 % 166.70 161.22 3.4 % 137.20 123.78 10.8 % 6 %
Other 75 81.4 % 78.3 % 4.0 % 138.08 128.93 7.1 % 112.45 100.92 11.4 % 47 %
Total 144 83.3 % 79.5 % 4.8 % $ 149.16 $ 142.60 4.6 % $ 124.32 $ 113.43 9.6 % 100 %
% of Hotel
Service Level Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3
Focused-Service 122 83.4 % 78.9 % 5.7 % $ 141.71 $ 135.24 4.8 % $ 118.19 $ 106.76 10.7 % 73 %
Compact Full-Service 21 84.4 % 82.7 % 2.1 % 170.21 163.52 4.1 % 143.73 135.20 6.3 % 23 %
Full Service 1 72.5 % 69.1 % 4.9 % 170.02 154.35 10.2 % 123.29 106.65 15.6 % 4 %
Total 144 83.3 % 79.5 % 4.8 % $ 149.16 $ 142.60 4.6 % $ 124.32 $ 113.43 9.6 % 100 %
% of Hotel
Chain Scale Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3
Upper Upscale 18 80.9 % 78.9 % 2.6 % $ 158.68 $ 149.82 5.9 % $ 128.42 $ 118.21 8.6 % 21 %
Upscale 104 84.6 % 80.6 % 5.0 % 150.79 144.59 4.3 % 127.63 116.54 9.5 % 71 %
Upper Midscale 21 79.3 % 73.5 % 8.0 % 123.13 118.48 3.9 % 97.70 87.04 12.2 % 8 %
Midscale 1 92.1 % 92.0 % 0.2 % 86.45 68.20 26.8 % 79.66 62.73 27.0 % 0 %
Total 144 83.3 % 79.5 % 4.8 % $ 149.16 $ 142.60 4.6 % $ 124.32 $ 113.43 9.6 % 100 %
% of Hotel
Flags Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3
Residence Inn 33 85.7 % 81.0 % 5.9 % $ 132.91 $ 128.52 3.4 % $ 113.93 $ 104.07 9.5 % 16 %
Courtyard 33 83.2 % 78.4 % 6.1 % 147.22 141.60 4.0 % 122.53 111.05 10.3 % 23 %
Hyatt House 11 86.0 % 85.2 % 1.0 % 152.05 137.00 11.0 % 130.82 116.73 12.1 % 9 %
Fairfield Inn & Suites 10 79.5 % 71.9 % 10.6 % 117.03 113.30 3.3 % 93.06 81.43 14.3 % 4 %
SpringHill Suites 10 83.2 % 77.0 % 8.1 % 111.71 110.39 1.2 % 92.95 84.97 9.4 % 5 %
Hilton Garden Inn 9 82.1 % 78.4 % 4.8 % 174.16 165.43 5.3 % 143.00 129.63 10.3 % 9 %
Hampton Inn 8 80.1 % 75.1 % 6.6 % 130.81 125.80 4.0 % 104.72 94.51 10.8 % 4 %
Marriott 6 77.8 % 74.6 % 4.3 % 151.21 140.86 7.3 % 117.65 105.11 11.9 % 9 %
Embassy Suites 7 80.7 % 80.1 % 0.8 % 142.03 131.35 8.1 % 114.67 105.17 9.0 % 5 %
Renaissance 3 82.3 % 79.1 % 4.1 % 155.52 147.01 5.8 % 127.98 116.24 10.1 % 3 %
Hyatt Place 2 90.5 % 89.9 % 0.7 % 153.49 139.15 10.3 % 138.93 125.14 11.0 % 2 %
DoubleTree 3 93.3 % 92.3 % 1.1 % 219.53 215.90 1.7 % 204.77 199.28 2.8 % 6 %
Homewood Suites 2 82.1 % 76.4 % 7.5 % 164.53 156.42 5.2 % 135.06 119.44 13.1 % 1 %
Hilton 1 98.8 % 99.6 % (0.8 )% 260.88 268.37 (2.8 )% 257.83 267.40 (3.6 )% 2 %
Hyatt 1 80.5 % 77.4 % 4.0 % 290.48 265.30 9.5 % 233.74 205.24 13.9 % 1 %
Other 5 75.1 % 71.0 % 5.8 % 114.83 103.13 11.3 % 86.21 73.18 17.8 % 1 %
Total 144 83.3 % 79.5 % 4.8 % $ 149.16 $ 142.60 4.6 % $ 124.32 $ 113.43 9.6 % 100 %

Note:

The information above includes results for periods prior to the Company’s ownership. The information has not been audited and is presented only for comparison purposes. Results reflect 100% of DoubleTree NYC Metropolitan financial results, which have not been adjusted to reflect the noncontrolling interest in the joint venture. All results exclude disposed hotels, two planned hotel conversions, and four non-comparable hotels: Residence Inn Atlanta Midtown/Georgia Tech, Hilton Cabana Miami Beach, Hyatt Atlanta Midtown, and Fairfield Inn & Suites Key West.

RLJ Lodging Trust
Pro forma Operating Statistics

(unaudited)

For the nine months ended September 30, 2014
% of Hotel
Top Markets Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3YTD
NYC 5 96.0 % 96.8 % (0.8 )% $ 231.69 $ 230.96 0.3 % $ 222.42 $ 223.56 (0.5 )% 11 %
Chicago 21 75.7 % 73.5 % 2.9 % 129.36 127.91 1.1 % 97.90 94.04 4.1 % 9 %
Austin 14 81.3 % 76.7 % 6.0 % 148.66 142.86 4.1 % 120.87 109.60 10.3 % 9 %
Denver 13 79.8 % 74.5 % 7.2 % 129.57 124.91 3.7 % 103.44 93.02 11.2 % 8 %
Houston 9 79.1 % 76.0 % 4.2 % 159.78 154.44 3.5 % 126.45 117.32 7.8 % 7 %
Washington DC 7 78.5 % 73.5 % 6.9 % 172.23 171.72 0.3 % 135.23 126.15 7.2 % 6 %
Other 75 79.5 % 76.8 % 3.5 % 140.10 132.05 6.1 % 111.32 101.38 9.8 % 50 %
Total 144 80.4 % 77.5 % 3.7 % $ 149.55 $ 144.22 3.7 % $ 120.17 $ 111.75 7.5 % 100 %
% of Hotel
Service Level Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3YTD
Focused-Service 122 80.0 % 76.6 % 4.4 % $ 141.47 $ 136.46 3.7 % $ 113.19 $ 104.58 8.2 % 72 %
Compact Full-Service 21 82.4 % 81.0 % 1.8 % 170.99 164.51 3.9 % 140.98 133.23 5.8 % 24 %
Full Service 1 71.8 % 70.3 % 2.1 % 182.12 173.07 5.2 % 130.78 121.69 7.5 % 4 %
Total 144 80.4 % 77.5 % 3.7 % $ 149.55 $ 144.22 3.7 % $ 120.17 $ 111.75 7.5 % 100 %
% of Hotel
Chain Scale Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3YTD
Upper Upscale 18 78.6 % 77.5 % 1.5 % $ 162.51 $ 154.48 5.2 % $ 127.79 $ 119.66 6.8 % 22 %
Upscale 104 81.4 % 78.4 % 3.9 % 149.65 144.69 3.4 % 121.85 113.44 7.4 % 69 %
Upper Midscale 21 76.7 % 71.4 % 7.3 % 128.25 124.86 2.7 % 98.30 89.18 10.2 % 9 %
Midscale 1 87.0 % 85.5 % 1.7 % 73.77 66.13 11.6 % 64.19 56.57 13.5 % 0 %
Total 144 80.4 % 77.5 % 3.7 % $ 149.55 $ 144.22 3.7 % $ 120.17 $ 111.75 7.5 % 100 %
% of Hotel
Flags Occupancy ADR RevPAR EBITDA
# of Hotels 2014 2013 Var 2014 2013 Var 2014 2013 Var Q3YTD
Residence Inn 33 82.5 % 78.1 % 5.6 % $ 134.64 $ 130.93 2.8 % $ 111.07 $ 102.24 8.6 % 17 %
Courtyard 33 78.6 % 76.0 % 3.4 % 145.92 141.50 3.1 % 114.76 107.60 6.7 % 22 %
Hyatt House 11 83.1 % 82.8 % 0.4 % 148.33 135.18 9.7 % 123.32 111.93 10.2 % 8 %
Fairfield Inn & Suites 10 75.7 % 70.9 % 6.8 % 127.09 124.93 1.7 % 96.27 88.60 8.7 % 4 %
SpringHill Suites 10 78.3 % 72.9 % 7.3 % 112.06 111.01 0.9 % 87.70 80.94 8.4 % 4 %
Hilton Garden Inn 9 80.8 % 77.9 % 3.6 % 168.46 163.59 3.0 % 136.05 127.47 6.7 % 9 %
Hampton Inn 8 79.1 % 73.7 % 7.4 % 133.71 128.73 3.9 % 105.79 94.85 11.5 % 4 %
Marriott 6 74.5 % 72.5 % 2.8 % 154.77 147.27 5.1 % 115.34 106.81 8.0 % 9 %
Embassy Suites 7 80.6 % 79.7 % 1.1 % 149.80 139.47 7.4 % 120.81 111.22 8.6 % 6 %
Renaissance 3 76.3 % 76.0 % 0.5 % 157.17 147.49 6.6 % 119.97 112.04 7.1 % 3 %
Hyatt Place 2 86.7 % 87.3 % (0.7 )% 140.21 127.32 10.1 % 121.54 111.13 9.4 % 1 %
DoubleTree 3 93.6 % 91.7 % 2.0 % 213.22 210.25 1.4 % 199.47 192.74 3.5 % 6 %
Homewood Suites 2 79.8 % 76.5 % 4.2 % 171.48 166.33 3.1 % 136.79 127.31 7.4 % 2 %
Hilton 1 98.9 % 99.8 % (0.9 )% 249.14 254.52 (2.1 )% 246.50 254.02 (3.0 )% 2 %
Hyatt 1 81.6 % 78.5 % 4.0 % 290.63 268.35 8.3 % 237.27 210.61 12.7 % 1 %
Other 5 72.6 % 66.0 % 10.1 % 115.21 108.76 5.9 % 83.69 71.78 16.6 % 2 %
Total 144 80.4 % 77.5 % 3.7 % $ 149.55 $ 144.22 3.7 % $ 120.17 $ 111.75 7.5 % 100 %
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