BETHESDA, Md.- RLJ Lodging Trust (the 'Company') (NYSE:RLJ) today reported results for the three months ended March 31, 2020 and is providing a business update on its COVID-19 action plan.

Highlights

$1.2 billion of unrestricted cash and $200 million undrawn on line of credit

No debt maturities until 2022

Temporarily suspended operations at 57 hotels due to the ongoing COVID-19 pandemic

Total revenue of $265.5 million

Net loss of $30.8 million

Adjusted EBITDA of $41.4 million

Adjusted FFO per diluted common share and unit of $0.10

'Our hearts and minds are with all those affected by the COVID-19 global pandemic, and we express our heartfelt gratitude to the healthcare workers who are on the frontlines every day. This pandemic has inflicted unimaginable damage on the global economy and our industry,' commented Leslie D. Hale, President and Chief Executive Officer. 'At the onset of this crisis, we took a number of steps to protect our guests and associates, and to position RLJ to financially weather this unprecedented environment. Our dedicated team of asset managers worked incredibly hard with our operating partners to suspend operations at over 50% of our portfolio, and to significantly cut expenses at hotels that remain open, thereby drastically reducing our hotel operating costs. With a focus on further bolstering liquidity, we reduced our dividend to $0.01 per share, decreased spending on a number of growth projects, and suspended share buybacks. Although difficult, these timely actions have materially reduced our cash burn, and combined with our solid balance sheet prior to entering this catastrophe, have positioned us with $1.2 billion of liquidity to sustain an extended period of uncertainty. While we cannot predict the timing or the magnitude of a recovery, we are thoughtfully working with our operators to reopen hotels as appropriate in a socially and financially responsible manner. With a flexible balance sheet, a lean operating model and an orientation towards the transient segment, which should be the first to recover, we believe that not only will we be able to effectively navigate through this crisis, but also be positioned to realize our embedded growth opportunities over the longer term.'

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: See details at:

https://investor.rljlodgingtrust.com/news-releases/news-release-details/rlj-lodging-trust-reports-first-quarter-2020-results-and

Business Update

COVID-19 Action Plan Update

In response to the significant and ongoing impact from COVID-19 to public health and the broader industry, the Company is providing an update on the wide-ranging actions it has taken at both the property and corporate-level to preserve liquidity:

Suspension of hotel operations: The Company has suspended operations at 57 of its hotels, where carrying costs of operating with low occupancies, exceeded the cost of suspending operations.

Cost containment initiatives: At the hotels remaining open, the Company's asset managers continue to work closely with its hotel management partners to manage its hotels under aggressive operating cost containment plans. These plans include significantly reduced staffing, elimination of non-essential amenities & services, and the closure of several floors and all food & beverage outlets at properties.

Capital investment reduction: The Company's 2020 capital expenditure program has been reduced by over 80%. All non-essential capital investments have been deferred. The Company will continue to make investments to protect and preserve its properties and expects to re-evaluate future capital plans when there is improved economic visibility.

ROI projects: The Company reviewed all 2020 ROI initiatives and suspended 90% of these projects. The Company expects to re-evaluate all ROI projects when there is improved economic visibility.

Common stock dividend reduction: The Company's Board of Trustees reduced its first quarter common dividend to $0.01 per common share. The Company will continue to monitor its financial performance and the economic outlook to assess when it is appropriate to resume a regular quarterly common dividend at a level determined to be prudent based on the economic outlook.

Estimated Monthly Cash Burn Forecast

The Company estimates the average monthly cash burn across its portfolio to be approximately $25 million to $35 million (excluding capital investments) based on the following assumptions:

Average hotel-level monthly variable costs of approximately $5.0 million to $14.0 million, with the top end of the range assuming that all hotels are suspended through the end of 2020;

Average hotel fixed costs of $7.0 million, which includes property taxes and insurance;

Corporate-level monthly general and administrative cash expenses of $2.0 million; and

Corporate-level outflows of $11.0 million to $12.0 million, which includes interest and scheduled principal payment on the Company's outstanding debt as well as both common and preferred dividends.

The actual monthly cash burn will vary based on the duration that individual hotels are suspended and the extent to which the low occupancy environment persists. If the current operating environment extends into the second half of the year, the Company will undertake additional cost-cutting measures to further reduce its monthly cash burn. Management believes that its current liquidity has positioned the Company to withstand a protracted period of limited hotel demand.

Lender Update

The Company is currently working with its lenders on an amendment of its corporate line of credit and unsecured term loans. The Company expects that this amendment will include the waiver of all financial maintenance covenants through March 31, 2021. The Company cannot provide assurances that it will complete the amendment of the credit facilities with the lenders, which is subject to the completion of the documentation and lender approval.

The Company remains in compliance with its financial covenants under its Senior Unsecured Notes.

Share Repurchases

During the first quarter, the Company repurchased 5.5 million shares of its common shares for $62.6 million at an average price per share of $11.40. The Company suspended share repurchases as broader uncertainty increased due to COVID-19.

Balance Sheet

As of March 31, 2020, the Company had $1.2 billion of unrestricted cash on its balance sheet, $200 million undrawn on its revolving credit facility, and $2.6 billion of debt outstanding.

The Company's ratio of net debt to Adjusted EBITDA for the trailing twelve-month period ended March 31, 2020, was 3.9x.

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, 2020, to shareholders of record as of March 31, 2020.

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, 2020, to shareholders of record as of March 31, 2020.

2020 Outlook

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

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on May 13, 2020, 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 online through the Investor Relations page of 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 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

Forward Looking Statements

The following 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 COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity; the pace of recovery when the COVID-19 pandemic subsides; the effects of steps we and our third party management partners take to reduce operating costs; increased direct competition, changes in government regulations or accounting rules; changes in local, national and global real estate conditions; declines in the lodging industry, including as a result of the COVID-19 pandemic; seasonality of the lodging industry; risks related to natural disasters, such as earthquakes and hurricanes; hostilities, including future terrorist attacks or fear of hostilities that affect travel; the Company's ability to obtain lines of credit or permanent financing on satisfactory terms; changes in interest rates; access to capital through offerings of the Company's common and preferred shares of beneficial interest, or debt; the Company's ability to identify suitable acquisitions; the Company's ability to close on identified acquisitions and integrate those businesses; and inaccuracies of the Company's accounting estimates. Given these uncertainties, undue reliance should not be placed on such statements. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures the Company makes concerning risks and uncertainties in the sections entitled 'Risk Factors,' 'Forward-Looking Statements,' and 'Management's Discussion and Analysis of Financial Condition and Results of Operations' in the Company's Annual Report, as well as risks, uncertainties and other factors discussed in other documents filed by the Company with the Securities and Exchange Commission.

For additional information or to receive press releases via email, please visit our website:

http://www.rljlodgingtrust.com

RLJ Lodging Trust

Non-GAAP and Accounting Commentary

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

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

Funds From Operations ('FFO')

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

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

EBITDA and EBITDAre

Earnings Before Interest, Taxes, Depreciation, and Amortization ('EBITDA') is defined as net income or loss excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sales of assets; and (3) depreciation and amortization. The Company considers EBITDA useful to an investor in evaluating and facilitating comparisons of its operating performance between periods and between REITs by removing the impact of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions.

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

Adjustments to FFO and EBITDA

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

Transaction Costs: The Company excludes transaction costs expensed during the period

Non-Cash Expenses: The Company excludes the effect of certain non-cash items such as the amortization of share-based compensation, non-cash income taxes, and unrealized gains and loss related to interest rate hedges

Other Non-Operational Expenses: The Company excludes the effect of certain non-operational expenses representing income and expenses outside the normal course of operations

Hotel EBITDA and Hotel EBITDA Margin

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

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

Pro forma adjustments: Acquired hotels

For the quarters ended March 31, 2020 and 2019, respectively, no hotels were acquired.

Pro forma adjustments: Sold hotels

For the quarters ended March 31, 2020 and 2019, respectively, pro forma adjustments included the following sold hotels:

Courtyard Austin Airport in June 2019

Courtyard Boulder Longmont in June 2019

Courtyard Fort Lauderdale SW Miramar in June 2019

Courtyard Salt Lake City Airport in June 2019

Fairfield Inn & Suites San Antonio Downtown Market in June 2019

Hampton Inn Fort Walton Beach in June 2019

Hampton Inn West Palm Beach Airport Central in June 2019

Hampton Inn & Suites Clearwater St.Petersburg Ulmerton Road in June 2019

Hampton Inn & Suites Denver Tech Center in June 2019

Hilton Garden Inn Bloomington in June 2019

Hilton Garden Inn Durham Raleigh Research Triangle Park in June 2019

Hilton Garden Inn West Palm Beach Airport in June 2019

Residence Inn Chicago Oak Brook in June 2019

Residence Inn Detroit Novi in June 2019

Residence Inn Fort Lauderdale Plantation in June 2019

Residence Inn Fort Lauderdale SW Miramar in June 2019

Residence Inn Longmont Boulder in June 2019

Residence Inn Salt Lake City Airport in June 2019

Residence Inn San Antonio Downtown Market Square in June 2019

Residence Inn Silver Spring in June 2019

SpringHill Suites Boulder Longmont in June 2019

Embassy Suites Myrtle Beach Oceanfront Resort in June 2019

Hilton Myrtle Beach Resort in June 2019

Courtyard Austin Northwest Arboretum in August 2019

Courtyard Boulder Louisville in August 2019

Courtyard Denver West Golden in August 2019

Courtyard Louisville Northeast in August 2019

Courtyard South Bend Mishawaka in August 2019

Hampton Inn Houston Galleria in August 2019

Hyatt House Austin Arboretum in August 2019

Hyatt House Houston Galleria in August 2019

Hyatt House Dallas Lincoln Park in August 2019

Hyatt House Dallas Uptown in August 2019

Residence Inn Austin Northwest Arboretum in August 2019

Residence Inn Austin North Parmer Lane in August 2019

Residence Inn Boulder Louisville in August 2019

Residence Inn Denver West Golden in August 2019

Residence Inn Louisville Northeast in August 2019

SpringHill Suites Austin North Parmer Lane in August 2019

SpringHill Suites Louisville Hurstbourne North in August 2019

SpringHill Suites South Bend Mishawaka in August 2019

Residence Inn Columbia in September 2019

Courtyard Austin South in November 2019

Fairfield Inn & Suites Austin South Airport in November 2019

Marriott Austin South in November 2019

Residence Inn Austin South in November 2019

SpringHill Suites Austin South in November 2019

RLJ Lodging Trust

See all Consolidated Balance Sheets/Tables and Charts at:

https://investor.rljlodgingtrust.com/news-releases/news-release-details/rlj-lodging-trust-reports-first-quarter-2020-results-and

Note: Results reflect 100% of the financial results of three consolidated joint ventures and exclude the Chateau LeMoyne-French Quarter New Orleans, which is an unconsolidated hotel. The information has not been audited and is presented only for comparison purposes.

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

Source: RLJ Lodging Trust

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