Highlights
No debt maturities until 2022
Temporarily suspended operations at 57 hotels due to the ongoing COVID-19 pandemic
Total revenue of
Net loss of
Adjusted EBITDA of
Adjusted FFO per diluted common share and unit of
'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
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
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
Estimated Monthly Cash Burn Forecast
The Company estimates the average monthly cash burn across its portfolio to be approximately
Average hotel-level monthly variable costs of approximately
Average hotel fixed costs of
Corporate-level monthly general and administrative cash expenses of
Corporate-level outflows of
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
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
Balance Sheet
As of
The Company's ratio of net debt to Adjusted EBITDA for the trailing twelve-month period ended
Dividends
The Company's
The Company's
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
About Us
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
For additional information or to receive press releases via email, please visit our website:
http://www.rljlodgingtrust.com
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)
Funds From Operations ('FFO')
The Company calculates Funds from Operations ('FFO') in accordance with standards established by the
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
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
With respect to
Pro forma
Pro forma adjustments: Acquired hotels
For the quarters ended
Pro forma adjustments: Sold hotels
For the quarters ended
Courtyard Boulder Longmont in
Courtyard Fort Lauderdale SW Miramar in
Hampton Inn & Suites Clearwater St.
SpringHill Suites Boulder Longmont in
Courtyard Boulder Louisville in
Courtyard
Courtyard Louisville Northeast in
Courtyard South Bend Mishawaka in
Hyatt House Houston Galleria in
Hyatt House Dallas Uptown in
SpringHill Suites Louisville Hurstbourne North in
SpringHill Suites South Bend Mishawaka in
Courtyard Austin South in
SpringHill Suites Austin South in
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.
Source:
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