BETHESDA, Md.–RLJ Lodging Trust (the “Company”) (NYSE: RLJ) today reported results for the three and nine months ended September 30, 2016.
Highlights
- Net income increased 1.1% to $41.4 million
- Pro forma RevPAR was flat, Pro forma ADR increased 0.2%, and Pro forma Occupancy decreased 0.2%
- Pro forma Hotel EBITDA Margin of 35.5%
- Pro forma Consolidated Hotel EBITDA of $105.1 million
“This quarter our results once again reflect the benefits of a diversified portfolio as a number of our markets posted solid RevPAR growth, helping offset those with weaker performance,” commented Ross H. Bierkan, President and Chief Executive Officer. “We have a cycle-tested team and an all-weather portfolio, which is supported by a stellar balance sheet, giving us confidence in our ability to continue to navigate the changing environment.”
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 were closed for renovation for comparable periods. Explanations of EBITDA, 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.
Net income for the three months ended September 30, 2016, increased $0.5 million to $41.4 million, representing a 1.1% increase over the comparable period in 2015. For the nine months ended September 30, 2016, Net income decreased $20.0 million to $125.5 million, representing a 13.7% decrease over the comparable period in 2015.
Pro forma RevPAR for the three months ended September 30, 2016, was flat to the comparable period in 2015, driven by a Pro forma ADR increase of 0.2% and a Pro forma Occupancy decrease of 0.2%. Excluding Houston and New York City, which experienced softness in the quarter, Pro forma RevPAR growth was 1.9%. For the nine months ended September 30, 2016, Pro forma RevPAR increased 1.3% over the comparable period in 2015, driven by a Pro forma ADR increase of 1.3% and flat Pro forma Occupancy.
Pro forma Hotel EBITDA Margin for the three months ended September 30, 2016, decreased 160 basis points over the comparable period in 2015 to 35.5%. For the nine months ended September 30, 2016, Pro forma Hotel EBITDA Margin decreased 49 basis points over the comparable period in 2015 to 36.2%.
Pro forma Consolidated Hotel EBITDA includes the results of non-comparable hotels. For the three months ended September 30, 2016, Pro forma Consolidated Hotel EBITDA was $105.1 million, flat relative to the comparable period in 2015. For the nine months ended September 30, 2016, Pro forma Consolidated Hotel EBITDA increased $12.6 million to $321.4 million, representing a 4.1% increase over the comparable period in 2015.
Adjusted FFO for the three months ended September 30, 2016, increased $0.8 million to $85.4 million, representing a 1.0% increase over the comparable period in 2015. For the nine months ended September 30, 2016, Adjusted FFO increased $8.4 million to $258.3 million, representing a 3.4% increase over the comparable period in 2015.
Adjusted FFO per common share and unit-diluted for the three months ended September 30, 2016, was $0.69, representing an increase of 4.5% over the comparable period in 2015. Adjusted FFO per common share and unit-diluted for the nine months ended September 30, 2016, was $2.08, representing an increase of 9.5% over the comparable period in 2015.
Adjusted EBITDA for the three months ended September 30, 2016, increased $1.4 million to $100.2 million, representing a 1.4% increase over the comparable period in 2015. For the nine months ended September 30, 2016, Adjusted EBITDA increased $13.1 million to $303.4 million, representing a 4.5% increase over the comparable period in 2015.
Net cash flow from operating activities for the nine months ended September 30, 2016, totaled $250.4 million, compared to $232.9 million for the comparable period in 2015.
Balance Sheet
As of September 30, 2016, the Company had $178.6 million of unrestricted cash on its balance sheet, $400.0 million available on its revolving credit facility, and $1.6 billion of debt outstanding. The Company’s ratio of net debt to Adjusted EBITDA, pro forma for acquisitions and dispositions, for the trailing twelve month period ended September 30, 2016, was 3.6 times.
Dividends
The Company’s Board of Trustees declared a cash dividend of $0.33 per common share of beneficial interest in the third quarter. The dividend was paid on October 14, 2016, to shareholders of record as of September 30, 2016.
Share Buyback
For the nine months ended September 30, 2016, the Company repurchased 0.6 million common shares for $13.3 million at an average price per share of $21.73. As of September 30, 2016, the Company's authorized share buyback program had a remaining capacity of $161.5 million.
2016 Outlook
The Company’s outlook has been updated. The updated outlook excludes potential future acquisitions and dispositions, which could result in a material change to the Company’s outlook. The 2016 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 assumes the hotels were owned since January 1, 2015. Pro forma guidance removes income from hotels that have been sold.
For the full year 2016, the Company anticipates:
Current Outlook Prior Outlook Pro forma RevPAR growth (1) 0.0% to 1.0% 1.5% to 2.5% Pro forma Hotel EBITDA Margin (1)
35.5% to 36.0%
36.5% to 37.0% Pro forma Consolidated Hotel EBITDA
$407.0M to $413.0M
$415.0M to $425.0M Corporate Cash General & Administrative
$26.0M to $27.0M
$27.5M to $28.5M
(1) Excludes non-comparable hotels.
To view full financial release and corresponding tables please click the PDF icon or visit: http://investor.rljlodgingtrust.com/phoenix.zhtml?c=243028&p=irol-news&nyo=0
