RLJ Lodging Trust
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
RLJ$12.54+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001511337-24-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001511337-24-000033
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 131 previous paragraphs and 130 current paragraphs.
88 unchanged; 33 reworded; 8 added; 8 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•Sold two hotel properties for a combined sales price of approximately $20.8 million.
Current report
•Entered into a new $500.0 million Term Loan, the proceeds of which were used to repay our $400.0 million term loan maturing in 2025 and $100.0 million of borrowings under our Revolver.
Current report
Total revenues increased $11.3 million to $345.7 million for the three months ended September 30, 2024 from $334.4 million for the three months ended September 30, 2023. The increase was the result of a $6.5 million increase in room revenue, a $2.8 million increase in food and beverage revenue, and a $2.0 million increase in other revenue.
Current report
Property tax, insurance and other expense decreased $2.8 million to $24.2 million for the three months ended September 30, 2024 from $26.9 million for the three months ended September 30, 2023. The decrease was primarily attributable to the beneficial impact of successful real estate tax appeals in the current quarter, partially offset by increases in insurance premiums.
Current report
Interest income decreased $1.0 million to $4.3 million for the three months ended September 30, 2024 from $5.3 million for the three months ended September 30, 2023. The decrease was attributable to lower average cash balances during the current quarter compared with those during the three months ended September 30, 2023.
Current report
Total revenues increased $33.6 million to $1,039.5 million for the nine months ended September 30, 2024 from $1,005.9 million for the nine months ended September 30, 2023. The increase was the result of a $20.5 million increase in room revenue, a $7.9 million increase in food and beverage revenue, and a $5.2 million increase in other revenue.
Current report
General and administrative expense decreased $1.2 million to $41.8 million for the nine months ended September 30, 2024 from $43.0 million for the nine months ended September 30, 2023. The decrease was primarily attributable to a decrease in non-cash compensation expense.
Current report
Other Income, net
Removed paragraphs (8)
Previous report
•Sold a hotel property for a sales price of approximately $8.1 million.
Previous report
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 report
Depreciation and Amortization
Previous report
Depreciation and amortization expense decreased $0.5 million to $44.5 million for the three months ended June 30, 2024 from $44.9 million for the three months ended June 30, 2023.
Previous report
Total revenues increased $22.2 million to $693.7 million for the six months ended June 30, 2024 from $671.5 million for the six months ended June 30, 2023. The increase was the result of a $14.0 million increase in room revenue, a $5.1 million increase in food and beverage revenue, and a $3.2 million increase in other revenue.
Previous report
Property tax, insurance and other expense increased $7.3 million to $56.6 million for the six months ended June 30, 2024 from $49.3 million for the six months ended June 30, 2023. The increase was primarily attributable to increases in property taxes and insurance premiums.
Previous report
General and administrative expense increased $0.8 million to $29.0 million for the six months ended June 30, 2024 from $28.3 million for the six months ended June 30, 2023.
Previous report
Interest income increased $0.2 million to $8.9 million for the six months ended June 30, 2024 from $8.7 million for the six months ended June 30, 2023. The increase was attributable to higher interest rates due to increases in the federal funds rate, partially offset by the impact of lower average cash balances.
Reworded paragraphs (33)
Previous 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.
Current wording
As of September 30, 2024, we owned 96 hotel properties with approximately 21,300 rooms, located in 23 states and the District of Columbia. We owned, through wholly-owned subsidiaries, a 100% interest in 94 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 95 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 95 of the 96 hotel properties to our TRSs, of which we own a controlling financial interest.
Previous wording
•Repurchased and retired approximately 0.6 million common shares for approximately $6.2 million.
Current wording
•Repurchased and retired approximately 2.3 million common shares for approximately $22.0 million.
Previous 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.
Current wording
At September 30, 2024 and 2023, we owned 96 and 97 hotel properties, respectively. Based on when a hotel property is acquired or sold, the operating results for certain hotel properties are not comparable for the three and nine months ended September 30, 2024 and 2023. The non-comparable properties include two hotel properties that were sold and one hotel property that was acquired in 2024.
Previous wording
Room revenue increased $8.2 million to $303.7 million for the three months ended June 30, 2024 from $295.5 million for the three months ended June 30, 2023. The increase in room revenue was primarily due to an increase in corporate and group travel.
Current wording
Room revenue increased $6.5 million to $283.6 million for the three months ended September 30, 2024 from $277.1 million for the three months ended September 30, 2023. The increase was the result of a $5.6 million increase in room revenue attributable to the comparable properties, primarily due to an increase in corporate and group travel.
Previous 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.
Current wording
Food and beverage revenue increased $2.8 million to $37.0 million for the three months ended September 30, 2024 from $34.2 million for the three months ended September 30, 2023. The increase in food and beverage revenue was primarily due to increases in outlet revenue and the ramping up of our recently converted and renovated hotels.
Previous 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.
Current wording
Other revenue increased $2.0 million to $25.1 million for the three months ended September 30, 2024 from $23.1 million for the three months ended September 30, 2023. The increase in other revenue was primarily due to an increase in parking and resort fees.
Previous wording
Property operating expenses increased $13.0 million to $224.8 million for the three months ended June 30, 2024 from $211.9 million for the three months ended June 30, 2023. The increase was due to a $12.9 million increase in property operating expenses from the comparable properties.
Current wording
Property operating expenses increased $10.1 million to $223.6 million for the three months ended September 30, 2024 from $213.5 million for the three months ended September 30, 2023. The increase was due to a $9.2 million increase in property operating expenses from the comparable properties.
Previous 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.
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 room and food and beverage expenses, and increases in other operating expenses, primarily due to increases in sales and marketing, utilities, and administrative expenses.
Previous wording
General and administrative expense decreased $0.7 million to $13.9 million for the three months ended June 30, 2024 from $14.6 million for the three months ended June 30, 2023.
Current wording
General and administrative expense decreased $2.0 million to $12.8 million for the three months ended September 30, 2024 from $14.7 million for the three months ended September 30, 2023. The decrease was primarily attributable to a decrease in non-cash compensation expense.
Previous 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):
Current wording
Interest expense increased $3.8 million to $28.6 million for the three months ended September 30, 2024 from $24.8 million for the three months ended September 30, 2023. The increase was attributable to higher interest rates on our unhedged variable rate debt combined with an increase in the amount of debt that was unhedged. The components of our interest expense for the three months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
Gain (Loss) on Sale of Hotel Properties, net
Current wording
Gain on Sale of Hotel Properties, net
Previous wording
During the three months ended June 30, 2024, we sold one hotel property for a sales price of approximately $8.1 million and recorded a net gain on the sale of approximately $3.5 million. There were no hotels sold during the three months ended June 30, 2023.
Current wording
During the three months ended September 30, 2024, we sold one hotel property for a sale price of approximately $12.7 million and recorded a net gain on the sale of approximately $4.8 million. There were no hotels sold during the three months ended September 30, 2023.
Previous wording
Comparison of the six months ended June 30, 2024 to the six months ended June 30, 2023
Current wording
Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023
Previous wording
Room revenue increased $14.0 million to $570.3 million for the six months ended June 30, 2024 from $556.3 million for the six months ended June 30, 2023. The increase in room revenue was primarily due to an increase in corporate and group travel.
Current wording
Room revenue increased $20.5 million to $853.9 million for the nine months ended September 30, 2024 from $833.4 million for the nine months ended September 30, 2023. The increase was the result of a $19.6 million increase in room revenue attributable to the comparable properties and was primarily due to an increase in corporate and group travel.
Previous 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.
Current wording
Food and beverage revenue increased $7.9 million to $113.5 million for the nine months ended September 30, 2024 from $105.6 million for the nine months ended September 30, 2023. The increase in food and beverage revenue was primarily due to increases in outlet revenue and banquet and catering revenue.
Previous wording
Other revenue increased $3.2 million to $46.9 million for the six months ended June 30, 2024 from $43.7 million for the six months ended June 30, 2023. The increase in other revenue was primarily due to an increase in parking and resort fees.
Current wording
Other revenue increased $5.2 million to $72.0 million for the nine months ended September 30, 2024 from $66.9 million for the nine months ended September 30, 2023. The increase in other revenue was primarily due to an increase in parking and resort fees.
Previous wording
Property operating expenses increased $25.5 million to $438.3 million for the six months ended June 30, 2024 from $412.8 million for the six months ended June 30, 2023. The increase was due to a $25.3 million increase in property operating expenses from the comparable properties.
Current wording
Property operating expenses increased $35.5 million to $661.9 million for the nine months ended September 30, 2024 from $626.4 million for the nine months ended September 30, 2023. The increase was due to a $34.4 million increase in property operating expenses from the comparable properties.
Previous 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.
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 room and food and beverage expenses, and increases in other operating expenses, primarily due to increases in sales and marketing, utilities, and administrative expenses.
Previous 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.
Current wording
Property tax, insurance and other expense increased $4.5 million to $80.7 million for the nine months ended September 30, 2024 from $76.3 million for the nine months ended September 30, 2023. The increase was primarily attributable to increases in property taxes and insurance premiums, partially offset by the impact of successful real estate tax appeals in the current period.
Previous 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.
Current wording
Other income, net increased $1.2 million to $4.7 million for the nine months ended September 30, 2024 from $3.5 million for the nine months ended September 30, 2023. The increase was primarily attributable to the receipt of certain COVID-19 relief awards during the nine months ended September 30, 2024.
Previous 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.
Current wording
Interest income decreased $0.8 million to $13.2 million for the nine months ended September 30, 2024 from $14.0 million for the nine months ended September 30, 2023. The decrease was attributable to lower average cash balances, partially offset by higher interest rates.
Previous wording
Interest expense increased $5.8 million to $54.5 million for the six months ended June 30, 2024 from $48.7 million for the six 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 six months ended June 30, 2024 and 2023 were as follows (in thousands):
Current wording
Interest expense increased $9.6 million to $83.2 million for the nine months ended September 30, 2024 from $73.5 million for the nine months ended September 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 nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Previous wording
During the six months ended June 30, 2024, we sold one hotel property for a sales price of approximately $8.1 million and recorded a net gain on the sale of approximately $3.5 million. There were no hotels sold during the six months ended June 30, 2023.
Current wording
During the nine months ended September 30, 2024, we sold two hotel properties for a combined sales price of approximately $20.8 million and recorded net gains on sale of approximately $8.3 million. There were no hotels sold during the nine months ended September 30, 2023.
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 and six months ended June 30, 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 nine months ended September 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
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 EBITDAre provides useful information to investors regarding our operating performance and can facilitate comparisons of operating performance between periods and between REITs.
Previous 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):
Current wording
The following table is a reconciliation of our GAAP net income to EBITDA, EBITDAre and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Previous 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.
Current wording
As of September 30, 2024, we had $424.3 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 $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.
Current wording
The net cash flow provided by operating activities totaled $214.4 million and $226.2 million for the nine months ended September 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 nine months ended September 30, 2024 and 2023.
Previous 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.
Current wording
The net cash flow used in investing activities totaled $246.3 million for the nine months ended September 30, 2024 primarily due to a $122.8 million acquisition of a fee simple interest in our Wyndham Boston Beacon Hill hotel property, a $35.9 million acquisition of a hotel property, and $107.0 million in capital improvements and additions to our hotel properties and other assets. The net cash flow used in investing activities was partially offset by $19.5 million in proceeds from the sales of two hotel properties.
Previous wording
The net cash flow used in investing activities totaled $65.8 million for the six months ended June 30, 2023 due to
Current wording
The net cash flow used in investing activities totaled $102.0 million for the nine months ended September 30, 2023 primarily due to capital improvements and additions to our hotel properties.
Previous 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.
Current wording
The net cash flow used in financing activities totaled $99.1 million for the nine months ended September 30, 2024. The sources of cash included $500.0 million in borrowings on a Term Loan and $200.0 million in borrowings on our Revolver. The uses of cash included $400.0 million in repayment of a term loan, $200.0 million in repayment of a maturing mortgage loan, $100.0 million in repayment of our Revolver, $19.0 million paid to repurchase common shares under our share repurchase programs, $65.8 million in distributions to shareholders and unitholders, $9.0 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $5.3 million in deferred financing cost payments.
Previous 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.
Current wording
The net cash flow used in financing activities totaled $130.2 million for the nine months ended September 30, 2023 primarily due to $66.8 million paid to repurchase common shares under our share repurchase programs, $52.6 million in distributions to shareholders and unitholders, $4.4 million paid to repurchase common shares to satisfy employee tax withholding requirements, and $7.8 million in deferred financing cost payments.
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 June 30, 2024, approximately $36.1 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 September 30, 2024, approximately $39.0 million was held in FF&E reserve accounts for future capital expenditures.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Other income, net decreased $1.1 million to $0.8 million for the three months ended September 30, 2024 from $1.9 million for the three months ended September 30, 2023. The decrease was primarily attributable to the receipt of certain COVID-19 relief awards during the three months ended September 30, 2023.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
EBITDAre provides useful information to investors regarding our operating performance and can facilitate comparisons of operating performance between periods and between REITs.
Previous report — wording carried elsewhere
capital improvements and additions to our hotel properties.