RLJ Lodging Trust

Previous wording

The following information contains certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, 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 (the "Securities Act") and Section 21E of the

Current wording

The following information contains certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, 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 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements generally are identified by the use of the words "believe," "project," "expect," "anticipate," "estimate," "plan," "may," "will," "will continue," "intend,"

Previous wording

Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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 we believe 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 our actual results could differ materially from those set forth in the forward-looking statements.

Current wording

"should," or similar expressions. Although we believe 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 our actual results could differ materially from those set forth in the forward-looking statements.

Previous wording

Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. We caution investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures we make concerning risks and uncertainties in the sections entitled "Forward-Looking Statements," "Risk Factors," and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report, as well as the risks, uncertainties and other factors discussed in this Quarterly Report on Form 10-Q and identified in other documents filed by us with the SEC.

Current wording

Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. We caution investors not to place undue reliance on these forward-looking statements and urge investors to carefully review the disclosures we make concerning risks and uncertainties in the sections entitled "Special Note About Forward-Looking Statements," "Risk Factors," and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report, as well as the risks, uncertainties and other factors discussed in this Quarterly Report on Form 10-Q and identified in other documents filed by us with the SEC.

Previous wording

As of March 31, 2024, we owned 97 hotel properties with approximately 21,400 rooms, located in 23 states and the District of Columbia. We owned, through wholly-owned subsidiaries, a 100% interest in 95 of our hotel properties, a 95% controlling interest in one hotel property, and a 50% non-controlling interest in an entity owning one hotel property. We consolidate our real estate interests in the 96 hotel properties in which we hold a controlling interest, and we record the real estate interest in the one hotel property in which we hold an indirect 50% non-controlling interest using the equity method of accounting. We lease 96 of the 97 hotel properties to our TRSs, of which we own a controlling financial interest.

Current wording

As of June 30, 2024, we owned 97 hotel properties with approximately 21,500 rooms, located in 23 states and the District of Columbia. We owned, through wholly-owned subsidiaries, a 100% interest in 95 of our hotel properties, a 95% controlling interest in one hotel property, and a 50% non-controlling interest in an entity owning one hotel property. We consolidate our real estate interests in the 96 hotel properties in which we hold a controlling interest, and we record the real estate interest in the one hotel property in which we hold an indirect 50% non-controlling interest using the equity method of accounting. We lease 96 of the 97 hotel properties to our TRSs, of which we own a controlling financial interest.

Previous wording

At both March 31, 2024 and 2023, we owned 97 hotel properties.

Current wording

At both June 30, 2024 and 2023, we owned 97 hotel properties. Based on when a hotel property is acquired or sold, the operating results for certain hotel properties are not comparable for the three and six months ended June 30, 2024 and 2023. The non-comparable properties include one hotel property that was sold and one hotel property that was acquired in 2024.

Previous wording

Total revenues increased $9.9 million to $324.4 million for the three months ended March 31, 2024 from $314.5 million for the three months ended March 31, 2023. The increase was the result of a $5.8 million increase in room revenue, a $2.4 million increase in food and beverage revenue, and a $1.7 million increase in other revenue.

Current wording

Total revenues increased $12.3 million to $369.3 million for the three months ended June 30, 2024 from $357.0 million for the three months ended June 30, 2023. The increase was the result of a $8.2 million increase in room revenue, a $2.7 million increase in food and beverage revenue, and a $1.5 million increase in other revenue.

Previous wording

The following are the quarter-to-date key hotel operating statistics:

Current wording

The following are the quarter-to-date key hotel operating statistics for the comparable properties:

Previous wording

Food and beverage revenue increased $2.4 million to $35.7 million for the three months ended March 31, 2024 from $33.3 million for the three months ended March 31, 2023. The increase in food and beverage revenue was primarily due to an increase in banquet and catering revenues and the ramping up of our recently converted and renovated hotels.

Current wording

Food and beverage revenue increased $2.7 million to $40.8 million for the three months ended June 30, 2024 from $38.1 million for the three months ended June 30, 2023. The increase in food and beverage revenue was primarily due to increases in banquet and catering revenue and the ramping up of our recently converted and renovated hotels.

Previous wording

Other revenue increased $1.7 million to $22.1 million for the three months ended March 31, 2024 from $20.4 million for the three months ended March 31, 2023. The increase in other revenue was primarily due to an increase in parking and resort fees.

Current wording

Other revenue increased $1.5 million to $24.8 million for the three months ended June 30, 2024 from $23.3 million for the three months ended June 30, 2023. The increase in other revenue was primarily due to an increase in parking and resort fees.

Previous wording

The components of our property operating expenses were as follows (in thousands):

Current wording

The components of our property operating expenses for the comparable properties were as follows (in thousands):

Previous wording

The increase in property operating expenses was primarily due to increases in wages and benefits, as well as sales and marketing and other expenses.

Current wording

The increase in property operating expenses from the comparable properties was primarily due to increases in wages and benefits, as well as increases in sales and marketing, utilities, and other operating expenses.

Previous wording

Property tax, insurance and other expense increased $3.2 million to $27.8 million for the three months ended March 31, 2024 from $24.6 million for the three months ended March 31, 2023. The increase was primarily attributable to an increase in property taxes and insurance premiums.

Current wording

Property tax, insurance and other expense increased $4.1 million to $28.8 million for the three months ended June 30, 2024 from $24.7 million for the three months ended June 30, 2023. The increase was primarily attributable to increases in property taxes and insurance premiums.

Previous wording

Interest income increased $1.1 million to $4.8 million for the three months ended March 31, 2024 from $3.7 million for the three months ended March 31, 2023. The increase was attributable to our corporate and hotel-level cash earning higher interest rates due to increases in the federal funds rate, which was partially offset by the impact of a lower average cash balance during the three months ended March 31, 2024.

Current wording

Interest income decreased $0.9 million to $4.1 million for the three months ended June 30, 2024 from $5.0 million for the three months ended June 30, 2023. The decrease was attributable to lower average cash balances, partially offset by the impact of higher interest rates due to increases in the federal funds rate.

Previous wording

Interest expense increased $2.3 million to $26.5 million for the three months ended March 31, 2024 from $24.1 million for the three months ended March 31, 2023. The increase was attributable to higher interest rates on our unhedged variable rate debt combined with an increase in the amount of our debt that was unhedged. The components of our interest expense for the three months ended March 31, 2024 and 2023 were as follows (in thousands):

Current wording

Interest expense increased $3.5 million to $28.0 million for the three months ended June 30, 2024 from $24.5 million for the three months ended June 30, 2023. The increase was attributable to higher interest rates on our unhedged variable rate debt combined with an increase in the amount of our debt that was unhedged. The components of our interest expense for the three months ended June 30, 2024 and 2023 were as follows (in thousands):

Previous wording

Room revenue increased $5.8 million to $266.6 million for the three months ended March 31, 2024 from $260.8 million for the three months ended March 31, 2023. The increase was primarily due to an increase in business travel and the ramp up of our recently converted and renovated hotels.

Current wording

Food and beverage revenue increased $5.1 million to $76.5 million for the six months ended June 30, 2024 from $71.4 million for the six months ended June 30, 2023. The increase in food and beverage revenue was primarily due to increases in banquet and catering revenue and the ramping up of our recently converted and renovated hotels.

Previous wording

Other income, net increased $2.3 million to $3.2 million for the three months ended March 31, 2024 from $0.8 million for the three months ended March 31, 2023. The increase was primarily attributable to the receipt of certain COVID-19 relief awards during the three months ended March 31, 2024.

Current wording

Other income, net increased $2.3 million to $3.9 million for the six months ended June 30, 2024 from $1.6 million for the six months ended June 30, 2023. The increase was primarily attributable to the receipt of certain COVID-19 relief awards during the six months ended June 30, 2024.

Previous wording

The following table is a reconciliation of our GAAP net income to FFO attributable to common shareholders and unitholders and Adjusted FFO attributable to common shareholders and unitholders for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table is a reconciliation of our GAAP net income to FFO attributable to common shareholders and unitholders and Adjusted FFO attributable to common shareholders and unitholders for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

In addition to EBITDA, we present EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated joint ventures. We believe that the presentation of EBITDAre provides useful information to investors regarding our operating performance and can facilitate comparisons of operating performance between periods and between REITs.

Current wording

In addition to EBITDA, we present EBITDAre in accordance with NAREIT guidelines, which defines EBITDAre as net income or loss excluding interest expense, income tax expense, depreciation and amortization expense, gains or losses from sales of real estate, impairment, and adjustments for unconsolidated joint ventures. We believe that the presentation of

Previous wording

The following table is a reconciliation of our GAAP net income to EBITDA, EBITDAre and Adjusted EBITDA for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table is a reconciliation of our GAAP net income to EBITDA, EBITDAre and Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

•distributions on common and preferred shares; and

Current wording

•distributions on common and preferred shares;

Previous wording

As of March 31, 2024, we had $391.0 million of cash, cash equivalents, and restricted cash reserves as compared to $555.3 million at December 31, 2023.

Current wording

As of June 30, 2024, we had $407.2 million of cash, cash equivalents, and restricted cash reserves as compared to $555.3 million at December 31, 2023.

Previous wording

The net cash flow provided by operating activities totaled $20.8 million and $42.0 million for the three months ended March 31, 2024 and 2023, respectively. Our cash flows provided by operating activities generally consist of the net cash generated by our hotel operations, the cash paid for corporate expenses and other working capital changes. Refer to the "Results of Operations" section for further discussion of our operating results for the three months ended March 31, 2024 and 2023.

Current wording

The net cash flow provided by operating activities totaled $134.3 million and $137.1 million for the six months ended June 30, 2024 and 2023, respectively. Our cash flows provided by operating activities generally consist of the net cash generated by our hotel operations, the cash paid for corporate expenses and other working capital changes. Refer to the "Results of Operations" section for further discussion of our operating results for the six months ended June 30, 2024 and 2023.

Previous wording

The net cash flow used in investing activities totaled $158.0 million for the three months ended March 31, 2024 primarily due to a $122.7 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, $33.8 million in capital improvements and additions to our hotel properties and other assets, and a purchase deposit of $1.5 million.

Current wording

The net cash flow used in investing activities totaled $225.0 million for the six months ended June 30, 2024 primarily due to a $122.7 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, a $35.7 million acquisition of a hotel property, $72.4 million in capital improvements and additions to our hotel properties and other assets, and a purchase deposit of $2.0 million. The net cash flow used in investing activities was partially offset by $7.7 million in proceeds from the sale of a hotel property.

Previous wording

The net cash flow used in investing activities totaled $32.6 million for the three months ended March 31, 2023 due to

Current wording

The net cash flow used in investing activities totaled $65.8 million for the six months ended June 30, 2023 due to

Previous wording

The net cash flow used in financing activities totaled $27.2 million for the three months ended March 31, 2024 primarily due to $1.3 million paid to repurchase common shares under a share repurchase program, $21.9 million in distributions to shareholders and unitholders, and $4.0 million paid to repurchase common shares to satisfy employee tax withholding requirements.

Current wording

The net cash flow used in financing activities totaled $57.4 million for the six months ended June 30, 2024 primarily due to $200.0 million in repayment of a maturing mortgage loan, $4.2 million paid to repurchase common shares under our share repurchase programs, $43.9 million in distributions to shareholders and unitholders, and $9.0 million paid to repurchase common shares to satisfy employee tax withholding requirements. The net cash flow used in financing activities was partially offset by $200.0 million in borrowings on our Revolver.

Previous wording

shares to satisfy employee tax withholding requirements, and $0.3 million in deferred financing cost payments. The net cash

Current wording

The net cash flow used in financing activities totaled $96.4 million for the six months ended June 30, 2023 primarily due to $318.7 million in repayments of Term Loans, $52.0 million paid to repurchase common shares under our share repurchase programs, $33.6 million in distributions to shareholders and unitholders, $4.4 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $7.7 million in deferred financing cost payments. The net cash flow used in financing activities was partially offset by $320.0 million in borrowings on Term Loans.

Previous wording

With respect to some of our hotels that are operated under franchise agreements with major national hotel brands and for some of our hotels subject to first mortgage liens, we are obligated to maintain FF&E reserve accounts for future capital expenditures at these hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective hotels, and typically ranges between 3.0% and 5.0% of the respective hotel’s total gross revenue. As of March 31, 2024, approximately $35.8 million was held in FF&E reserve accounts for future capital expenditures.

Current wording

With respect to some of our hotels that are operated under franchise agreements with major national hotel brands and for some of our hotels subject to first mortgage liens, we are obligated to maintain FF&E reserve accounts for future capital expenditures at these hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective hotels, and typically ranges between 3.0% and 5.0% of the respective hotel’s total gross revenue. As of June 30, 2024, approximately $36.1 million was held in FF&E reserve accounts for future capital expenditures.