RLJ Lodging Trust Sets Sights on Growth

BETHESDA, MD—For RLJ Lodging Trust, 2018 was a transformational year as the REIT executed on its strategic initiatives to position the company for growth in 2019 and beyond. The company recently released earnings results for the three months and year ended Dec. 31, 2018.

“During the year, we sold seven hotels at an EBITDA multiple of 16.5x, paid down $635 million in debt, and took meaningful strides to position our portfolio for long-term growth,” said President/CEO Leslie D. Hale. “Additionally, we successfully redeployed the net proceeds from the sale of the Holiday Inn Fisherman’s Wharf to repurchase 1.8 million common shares at a significant discount to net asset value. We remain encouraged by our portfolio positioning in 2019 and our team’s ability to identify and execute on opportunities to drive shareholder value.”

Hale was named one of Hotel Business‘ 10 to Watch in December 2018.

Fourth Quarter Highlights:

  • Pro forma RevPAR decrease of 3.0%
  • Pro forma Hotel EBITDA Margin of 31.2%
  • Net income of $27.9 million
  • Adjusted EBITDA of $113.8 million
  • Adjusted FFO per diluted common share and unit of $0.49
  • Repurchased 1.2 million common shares for approximately $21.8 million

Full Year Highlights:

  • Pro forma RevPAR decrease of 0.8%
  • Pro forma Hotel EBITDA Margin of 32.8%
  • Net income of $190.9 million
  • Adjusted EBITDA of $522.1 million
  • Adjusted FFO per diluted common share and unit of $2.26
  • Repurchased 1.8 million common shares for approximately $32.1 million, inclusive of 0.6 million
  • common shares repurchased in the first quarter of 2019
  • Sold seven hotels for approximately $533 million at a 16.5x trailing EBITDA multiple
  • Repaid $635 million of indebtedness, exceeding our $500 million debt reduction objective

Looking Ahead

“As we enter 2019, we are poised to accelerate on momentum, as we execute on our key priorities this year, which are focused in four main areas,” said Hale. “First, we will drive operating results through aggressive asset management, and we expect to achieve our objective of generating 25 basis points to 50 basis points of operational synergies by the end of the year. Second, we will continue to optimize our portfolio by selling the remaining non-core FelCor assets and opportunistically explore the disposition of $100 million to 200 million of legacy RLJ assets. Third, we will continue to maintain a flexible and low levered balance sheet. And finally, we will deploy investment capital accretively, which may include share repurchases, capital investments and ROI opportunities.”

Hale continued, “We have already made progress on a number of these priorities, including continuing the efforts to realize operating synergies, enhance the balance sheet by redeeming high cost preferred equity and accretively allocating capital through share repurchases at a significant discount to our NAV. Additionally, with respect to asset sales, we have a strong track record of executing dispositions at valuations that have created significant value for our shareholders. We remain confident that we are well positioned to sell the remaining legacy FelCor assets, which include the two Myrtle Beach assets and the Knickerbocker, at attractive valuations.”

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