QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Title of Class | Trading Symbol | Name of Exchange on Which Registered | ||||||||||||
$1.95 Series A Cumulative Convertible Preferred Shares, par value $0.01 per share | RLJ-A | New York Stock Exchange |
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Page | ||||||||
Consolidated Financial Statements (unaudited) | ||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Assets | |||||||||||
Investment in hotel properties, net | $ | $ | |||||||||
Investment in unconsolidated joint ventures | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash reserves | |||||||||||
Hotel and other receivables, net of allowance of $366 and $251, respectively | |||||||||||
Lease right-of-use assets | |||||||||||
Deferred income tax asset, net | |||||||||||
Prepaid expense and other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Equity | |||||||||||
Debt, net | $ | $ | |||||||||
Accounts payable and other liabilities | |||||||||||
Advance deposits and deferred revenue | |||||||||||
Lease liabilities | |||||||||||
Accrued interest | |||||||||||
Distributions payable | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies (Note 11) | |||||||||||
Equity | |||||||||||
Shareholders’ equity: | |||||||||||
Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized | |||||||||||
Series A Cumulative Convertible Preferred Shares, $0.01 par value, 12,950,000 shares authorized; 12,879,475 shares issued and outstanding, liquidation value of $328,266, at September 30, 2020 and December 31, 2019 | |||||||||||
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 165,022,236 and 169,852,246 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Distributions in excess of net earnings | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Noncontrolling interest: | |||||||||||
Noncontrolling interest in consolidated joint ventures | |||||||||||
Noncontrolling interest in the Operating Partnership | |||||||||||
Total noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Room revenue | $ | $ | $ | $ | |||||||||||||||||||
Food and beverage revenue | |||||||||||||||||||||||
Other revenue | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Expenses | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Room expense | |||||||||||||||||||||||
Food and beverage expense | |||||||||||||||||||||||
Management and franchise fee expense | |||||||||||||||||||||||
Other operating expense | |||||||||||||||||||||||
Total property operating expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Property tax, insurance and other | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Transaction costs | ( | ( | ( | ||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Gain (loss) on sale of hotel properties, net | ( | ( | |||||||||||||||||||||
(Loss) income before equity in loss from unconsolidated joint ventures | ( | ( | |||||||||||||||||||||
Equity in loss from unconsolidated joint ventures | ( | ( | ( | ( | |||||||||||||||||||
(Loss) income before income tax (expense) benefit | ( | ( | |||||||||||||||||||||
Income tax (expense) benefit | ( | ( | ( | ||||||||||||||||||||
Net (loss) income | ( | ( | |||||||||||||||||||||
Net (income) loss attributable to noncontrolling interests: | |||||||||||||||||||||||
Noncontrolling interest in consolidated joint ventures | ( | ||||||||||||||||||||||
Noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||
Preferred distributions - consolidated joint venture | ( | ||||||||||||||||||||||
Redemption of preferred equity - consolidated joint venture | ( | ||||||||||||||||||||||
Net (loss) income attributable to RLJ | ( | ( | |||||||||||||||||||||
Preferred dividends | ( | ( | ( | ( | |||||||||||||||||||
Net (loss) income attributable to common shareholders | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Basic per common share data: | |||||||||||||||||||||||
Net (loss) income per share attributable to common shareholders | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted-average number of common shares | |||||||||||||||||||||||
Diluted per common share data: | |||||||||||||||||||||||
Net (loss) income per share attributable to common shareholders | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Weighted-average number of common shares | |||||||||||||||||||||||
Comprehensive (loss) income: | |||||||||||||||||||||||
Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Unrealized gain (loss) on interest rate derivatives | ( | ( | ( | ||||||||||||||||||||
Reclassification of unrealized gain on discontinued cash flow hedges to interest expense | ( | ||||||||||||||||||||||
Comprehensive (loss) income | ( | ( | |||||||||||||||||||||
Comprehensive (income) loss attributable to noncontrolling interests: | |||||||||||||||||||||||
Noncontrolling interest in consolidated joint ventures | ( | ||||||||||||||||||||||
Noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||
Preferred distributions - consolidated joint venture | ( | ||||||||||||||||||||||
Redemption of preferred equity - consolidated joint venture | ( | ||||||||||||||||||||||
Comprehensive (loss) income attributable to RLJ | $ | ( | $ | $ | ( | $ |
Shareholders’ Equity | Noncontrolling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Par Value | Additional Paid-in Capital | Distributions in excess of net earnings | Accumulated Other Comprehensive Loss | Operating Partnership | Consolidated Joint Ventures | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on interest rate derivatives | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Operating Partnership units | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from consolidated joint venture partners | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock | — | — | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired as part of a share repurchase program | — | — | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on preferred shares | — | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on common shares and units | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Shareholders’ Equity | Noncontrolling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Par Value | Additional Paid-in Capital | Distributions in excess of net earnings | Accumulated Other Comprehensive Loss | Operating Partnership | Consolidated Joint Ventures | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss (income) | — | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on interest rate derivatives | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock | — | — | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on preferred shares | — | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on common shares and units | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Shareholders’ Equity | Noncontrolling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Par Value | Additional Paid-in Capital | Distributions in excess of net earnings | Accumulated Other Comprehensive Income (Loss) | Operating Partnership | Consolidated Joint Ventures | Preferred Equity in a Consolidated Joint Venture | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on interest rate derivatives | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of unrealized gain on discontinued cash flow hedges to interest expense | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Operating Partnership units | — | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from consolidated joint venture partners | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | — | — | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock | — | — | ( | ( | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired as part of a share repurchase program | — | — | ( | ( | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock | — | — | ( | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on preferred shares | — | — | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on common shares and units | — | — | — | — | — | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred distributions - consolidated joint venture | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred equity - consolidated joint venture | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ |
Shareholders’ Equity | Noncontrolling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Par Value | Additional Paid-in Capital | Distributions in excess of net earnings | Accumulated Other Comprehensive Loss | Operating Partnership | Consolidated Joint Ventures | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on interest rate derivatives | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Contributions from consolidated joint venture partners | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock | — | — | ( | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Shares acquired as part of a share repurchase program | — | — | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of restricted stock | — | — | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on preferred shares | — | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions on common shares and units | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
For the nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to cash flow (used in) provided by operating activities: | |||||||||||
(Gain) loss on sale of hotel properties, net | ( | ||||||||||
Depreciation and amortization | |||||||||||
Amortization of deferred financing costs | |||||||||||
Other amortization | ( | ( | |||||||||
Unrealized (gain) loss on discontinued cash flow hedges | ( | ||||||||||
Equity in loss from unconsolidated joint ventures | |||||||||||
Distributions of income from unconsolidated joint ventures | |||||||||||
Amortization of share-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Changes in assets and liabilities: | |||||||||||
Hotel and other receivables, net | ( | ||||||||||
Prepaid expense and other assets | |||||||||||
Accounts payable and other liabilities | ( | ( | |||||||||
Advance deposits and deferred revenue | ( | ||||||||||
Accrued interest | |||||||||||
Net cash flow (used in) provided by operating activities | ( | ||||||||||
Cash flows from investing activities | |||||||||||
Proceeds from the sale of hotel properties, net | |||||||||||
Improvements and additions to hotel properties | ( | ( | |||||||||
Contributions to unconsolidated joint ventures | ( | ( | |||||||||
Distributions from unconsolidated joint ventures in excess of earnings | |||||||||||
Net cash flow (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities | |||||||||||
Borrowings under Revolver | |||||||||||
Repayment of borrowings under Revolver | ( | ||||||||||
Proceeds from mortgage loans | |||||||||||
Scheduled mortgage loan principal payments | ( | ( | |||||||||
Repayments of mortgage loans | ( | ||||||||||
Repurchase of common shares under a share repurchase program | ( | ( | |||||||||
Repurchase of common shares to satisfy employee tax withholding requirements | ( | ( | |||||||||
Distributions on preferred shares | ( | ( | |||||||||
Distributions on common shares | ( | ( | |||||||||
Distributions on and redemption of Operating Partnership units | ( | ( | |||||||||
Payments of deferred financing costs | ( | ( | |||||||||
Preferred distributions - consolidated joint venture | ( | ||||||||||
Redemption of preferred equity - consolidated joint venture | ( | ||||||||||
Contributions from consolidated joint venture partners | |||||||||||
Net cash flow provided by (used in) financing activities | ( | ||||||||||
Net change in cash, cash equivalents, and restricted cash reserves | |||||||||||
Cash, cash equivalents, and restricted cash reserves, beginning of year | |||||||||||
Cash, cash equivalents, and restricted cash reserves, end of period | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Land and improvements | $ | $ | |||||||||
Buildings and improvements | |||||||||||
Furniture, fixtures and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Investment in hotel properties, net | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Equity basis of the joint venture investments | $ | ( | $ | ( | |||||||
Cost of the joint venture investments in excess of the joint venture book value | |||||||||||
Investment in unconsolidated joint ventures | $ | $ |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Depreciation of cost in excess of book value | ( | ( | ( | ( | |||||||||||||||||||
Impairment loss | ( | ( | |||||||||||||||||||||
Loss on sale | ( | ||||||||||||||||||||||
Equity in loss from unconsolidated joint ventures | $ | ( | $ | ( | $ | ( | $ | ( |
Hotel Property Name | Location | Sale Date | Rooms | |||||||||||||||||
Courtyard Boulder Longmont | Longmont, CO | June 25, 2019 | ||||||||||||||||||
Courtyard Salt Lake City Airport | Salt Lake City, UT | June 25, 2019 | ||||||||||||||||||
Courtyard Fort Lauderdale SW Miramar | Miramar, FL | June 25, 2019 | ||||||||||||||||||
Courtyard Austin Airport | Austin, TX | June 25, 2019 | ||||||||||||||||||
Fairfield Inn & Suites San Antonio Downtown | San Antonio, TX | June 25, 2019 | ||||||||||||||||||
Hampton Inn & Suites Clearwater St. Petersburg | Clearwater, FL | June 25, 2019 | ||||||||||||||||||
Hampton Inn Fort Walton Beach | Fort Walton, FL | June 25, 2019 | ||||||||||||||||||
Hampton Inn & Suites Denver Tech Center | Denver, CO | June 25, 2019 | ||||||||||||||||||
Hampton Inn West Palm Beach Airport Central | West Palm Beach, FL | June 25, 2019 | ||||||||||||||||||
Hilton Garden Inn Bloomington | Bloomington, IN | June 25, 2019 | ||||||||||||||||||
Hilton Garden Inn West Palm Beach Airport | West Palm Beach, FL | June 25, 2019 | ||||||||||||||||||
Hilton Garden Inn Durham Raleigh Research Triangle Park | Durham, NC | June 25, 2019 | ||||||||||||||||||
Residence Inn Longmont Boulder | Longmont, CO | June 25, 2019 | ||||||||||||||||||
Residence Inn Detroit Novi | Novi, MI | June 25, 2019 | ||||||||||||||||||
Residence Inn Chicago Oak Brook | Oak Brook, IL | June 25, 2019 | ||||||||||||||||||
Residence Inn Fort Lauderdale Plantation | Plantation, FL | June 25, 2019 | ||||||||||||||||||
Residence Inn Salt Lake City Airport | Salt Lake City, UT | June 25, 2019 | ||||||||||||||||||
Residence Inn San Antonio Downtown Market Square | San Antonio, TX | June 25, 2019 | ||||||||||||||||||
Residence Inn Fort Lauderdale SW Miramar | Miramar, FL | June 25, 2019 | ||||||||||||||||||
Residence Inn Silver Spring | Silver Spring, MD | June 25, 2019 | ||||||||||||||||||
Springhill Suites Boulder Longmont | Longmont, CO | June 25, 2019 | ||||||||||||||||||
Embassy Suites Myrtle Beach Oceanfront Resort | Myrtle Beach, SC | June 27, 2019 | ||||||||||||||||||
Hilton Myrtle Beach Resort | Myrtle Beach, SC | June 27, 2019 | ||||||||||||||||||
Courtyard Austin Northwest Arboretum | Austin, TX | August 14, 2019 | ||||||||||||||||||
Courtyard Denver West Golden | Golden, CO | August 14, 2019 | ||||||||||||||||||
Courtyard Boulder Louisville | Louisville, CO | August 14, 2019 | ||||||||||||||||||
Courtyard Louisville Northeast | Louisville, KY | August 14, 2019 | ||||||||||||||||||
Courtyard South Bend Mishawaka | Mishawaka, IN | August 14, 2019 | ||||||||||||||||||
Hampton Inn Houston Galleria | Houston, TX | August 14, 2019 | ||||||||||||||||||
Hyatt House Houston Galleria | Houston, TX | August 14, 2019 | ||||||||||||||||||
Hyatt House Austin Arboretum | Austin, TX | August 14, 2019 | ||||||||||||||||||
Hyatt House Dallas Lincoln Park | Dallas, TX | August 14, 2019 | ||||||||||||||||||
Hyatt House Dallas Uptown | Dallas, TX | August 14, 2019 | ||||||||||||||||||
Residence Inn Austin Northwest Arboretum | Austin, TX | August 14, 2019 | ||||||||||||||||||
Residence Inn Austin North Parmer Lane | Austin, TX | August 14, 2019 | ||||||||||||||||||
Residence Inn Denver West Golden | Golden, CO | August 14, 2019 | ||||||||||||||||||
Residence Inn Boulder Louisville | Louisville, CO | August 14, 2019 | ||||||||||||||||||
Residence Inn Louisville Northeast | Louisville, KY | August 14, 2019 | ||||||||||||||||||
Springhill Suites Austin North Parmer Lane | Austin, TX | August 14, 2019 | ||||||||||||||||||
Springhill Suites Louisville Hurstbourne North | Louisville, KY | August 14, 2019 | ||||||||||||||||||
Springhill Suites South Bend Mishawaka | Mishawaka, IN | August 14, 2019 | ||||||||||||||||||
Residence Inn Columbia | Columbia, MD | September 12, 2019 | ||||||||||||||||||
Total |
For the three months ended September 30, 2020 | For the three months ended September 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Room Revenue | Food and Beverage Revenue | Other Revenue | Total Revenue | Room Revenue | Food and Beverage Revenue | Other Revenue | Total Revenue | ||||||||||||||||||||||||||||||||||||||||
Southern California | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
South Florida | |||||||||||||||||||||||||||||||||||||||||||||||
Northern California | |||||||||||||||||||||||||||||||||||||||||||||||
Chicago | |||||||||||||||||||||||||||||||||||||||||||||||
Washington, DC | |||||||||||||||||||||||||||||||||||||||||||||||
New York City | |||||||||||||||||||||||||||||||||||||||||||||||
Denver | |||||||||||||||||||||||||||||||||||||||||||||||
Houston | |||||||||||||||||||||||||||||||||||||||||||||||
Austin | |||||||||||||||||||||||||||||||||||||||||||||||
Louisville | |||||||||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
For the nine months ended September 30, 2020 | For the nine months ended September 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Room Revenue | Food and Beverage Revenue | Other Revenue | Total Revenue | Room Revenue | Food and Beverage Revenue | Other Revenue | Total Revenue | ||||||||||||||||||||||||||||||||||||||||
Southern California | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
South Florida | |||||||||||||||||||||||||||||||||||||||||||||||
Northern California | |||||||||||||||||||||||||||||||||||||||||||||||
New York City | |||||||||||||||||||||||||||||||||||||||||||||||
Chicago | |||||||||||||||||||||||||||||||||||||||||||||||
Houston | |||||||||||||||||||||||||||||||||||||||||||||||
Washington DC | |||||||||||||||||||||||||||||||||||||||||||||||
Denver | |||||||||||||||||||||||||||||||||||||||||||||||
Austin | |||||||||||||||||||||||||||||||||||||||||||||||
Louisville | |||||||||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Senior Notes | $ | $ | |||||||||
Revolver and Term Loans, net | |||||||||||
Mortgage loans, net | |||||||||||
Debt, net | $ | $ |
Outstanding Borrowings at | ||||||||||||||||||||||||||
Interest Rate | Maturity Date | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||
Senior unsecured notes (1) (2) (3) | June 2025 | $ | $ |
Outstanding Borrowings at | ||||||||||||||||||||||||||
Interest Rate at September 30, 2020 (1) | Maturity Date | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||
Revolver (2) | May 2024 | $ | $ | |||||||||||||||||||||||
$150 Million Term Loan Maturing 2022 | January 2022 | |||||||||||||||||||||||||
$400 Million Term Loan Maturing 2023 | January 2023 | |||||||||||||||||||||||||
$225 Million Term Loan Maturing 2023 | January 2023 | |||||||||||||||||||||||||
$400 Million Term Loan Maturing 2025 | May 2025 | |||||||||||||||||||||||||
Deferred financing costs, net (3) | ( | ( | ||||||||||||||||||||||||
Total Revolver and Term Loans, net | $ | $ |
Covenant | Compliance | |||||||||||||
Leverage ratio (1) | <= 7.00x | N/A (3) | ||||||||||||
Fixed charge coverage ratio (2) | >= 1.50x | N/A (3) | ||||||||||||
Secured indebtedness ratio | <= 45.0% | N/A (3) | ||||||||||||
Unencumbered indebtedness ratio | <= 60.0% | N/A (3) | ||||||||||||
Unencumbered debt service coverage ratio | >= 2.00x | N/A (3) | ||||||||||||
Maintain minimum liquidity level | >= $125.0 million | Yes |
Outstanding Borrowings at | |||||||||||||||||||||||||||||||||||
Number of Assets Encumbered | Interest Rate at September 30, 2020 | Maturity Date | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||
Mortgage loan (1) | % | April 2022 | (5) | $ | $ | ||||||||||||||||||||||||||||||
Mortgage loan (2) | % | June 2022 | |||||||||||||||||||||||||||||||||
Mortgage loan (3) | % | October 2022 | |||||||||||||||||||||||||||||||||
Mortgage loan (4) | % | October 2022 | |||||||||||||||||||||||||||||||||
Mortgage loan (1) | % | April 2024 | (5) | ||||||||||||||||||||||||||||||||
Mortgage loan (1) | % | April 2024 | (5) | ||||||||||||||||||||||||||||||||
Deferred financing costs, net | ( | ( | |||||||||||||||||||||||||||||||||
Total mortgage loans, net | $ | $ |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Senior Notes | $ | $ | $ | $ | |||||||||||||||||||
Revolver and Term Loans | |||||||||||||||||||||||
Mortgage loans | |||||||||||||||||||||||
Amortization of deferred financing costs | |||||||||||||||||||||||
Undesignated interest rate swaps | ( | ( | |||||||||||||||||||||
Total interest expense | $ | $ | $ | $ |
Notional value at | Fair value at | |||||||||||||||||||||||||||||||||||||
Hedge type | Interest rate | Maturity | September 30, 2020 | December 31, 2019 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||
Swap-cash flow | April 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Swap-cash flow | April 2021 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow | April 2021 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | April 2021 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | June 2021 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | June 2021 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow | June 2021 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | December 2022 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | December 2022 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | December 2022 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | December 2022 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow (1) | November 2023 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow (2) | December 2023 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow (2) | December 2023 | ( | ( | |||||||||||||||||||||||||||||||||||
Swap-cash flow | September 2021 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow | September 2022 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (3) | September 2025 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (4) | April 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow | December 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow | December 2024 | ( | ||||||||||||||||||||||||||||||||||||
Swap-cash flow (5) | January 2026 | ( | ||||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | ( |
Notional value at | Fair value at | |||||||||||||||||||||||||||||||||||||
Derivative type | Interest rate | Maturity | September 30, 2020 | December 31, 2019 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||
Interest rate swap (1) | September 2020 | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||
Interest rate swap (1) | September 2020 | ( | ||||||||||||||||||||||||||||||||||||
Interest rate swap (1) | September 2020 | ( | ||||||||||||||||||||||||||||||||||||
Interest rate swap (1) | October 2020 | ( | ( | |||||||||||||||||||||||||||||||||||
$ | $ | $ | ( | $ | ( |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
Senior Notes | $ | $ | $ | $ | |||||||||||||||||||
Revolver and Term Loans, net | |||||||||||||||||||||||
Mortgage loans, net | |||||||||||||||||||||||
Debt, net | $ | $ | $ | $ |
Fair Value at September 30, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Interest rate swap liability | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
Fair Value at December 31, 2019 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Interest rate swap asset | $ | $ | $ | $ | |||||||||||||||||||
Interest rate swap liability | ( | ( | |||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
2020 | |||||||||||
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested at January 1, 2020 | $ | ||||||||||
Granted (1) | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested at September 30, 2020 | $ |
Date of Award | Number of Units Granted | Grant Date Fair Value | Conversion Range | Risk Free Interest Rate | Volatility | |||||||||||||||||||||||||||
February 2017 (1) | $ | 0% to 150% | ||||||||||||||||||||||||||||||
February 2018 | $ | 0% to 150% | ||||||||||||||||||||||||||||||
February 2019 | $ | 0% to 200% | ||||||||||||||||||||||||||||||
February 2020 | $ | 0% to 200% |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net (loss) income attributable to RLJ | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Less: Preferred dividends | ( | ( | ( | ( | |||||||||||||||||||
Less: Dividends paid on unvested restricted shares | ( | ( | ( | ( | |||||||||||||||||||
Less: Undistributed earnings attributable to unvested restricted shares | |||||||||||||||||||||||
Net (loss) income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average number of common shares - basic | |||||||||||||||||||||||
Unvested restricted shares | |||||||||||||||||||||||
Weighted-average number of common shares - diluted | |||||||||||||||||||||||
Net (loss) income per share attributable to common shareholders - basic | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Net (loss) income per share attributable to common shareholders - diluted | $ | ( | $ | $ | ( | $ |
For the nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Reconciliation of cash, cash equivalents, and restricted cash reserves | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash reserves | |||||||||||
Cash, cash equivalents, and restricted cash reserves | $ | $ | |||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | $ | $ | |||||||||
Operating cash flow lease payments for operating leases | $ | $ | |||||||||
Supplemental investing and financing transactions | |||||||||||
In connection with the sale of hotel properties, the Company recorded the following: | |||||||||||
Sale of hotel properties | $ | $ | |||||||||
Transaction costs | ( | ||||||||||
Operating prorations | ( | ||||||||||
Proceeds from the sale of hotel properties, net | $ | $ | |||||||||
Supplemental non-cash transactions | |||||||||||
Accrued capital expenditures | $ | $ | |||||||||
For the three months ended September 30, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | ||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Room revenue | $ | 72,545 | $ | 314,195 | $ | (241,650) | (76.9) | % | |||||||||||||||
Food and beverage revenue | 3,831 | 39,447 | (35,616) | (90.3) | % | ||||||||||||||||||
Other revenue | 7,556 | 17,482 | (9,926) | (56.8) | % | ||||||||||||||||||
Total revenues | 83,932 | 371,124 | (287,192) | (77.4) | % | ||||||||||||||||||
Expenses | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Room expense | 22,368 | 80,650 | (58,282) | (72.3) | % | ||||||||||||||||||
Food and beverage expense | 3,167 | 31,425 | (28,258) | (89.9) | % | ||||||||||||||||||
Management and franchise fee expense | 2,630 | 26,432 | (23,802) | (90.0) | % | ||||||||||||||||||
Other operating expense | 49,398 | 90,048 | (40,650) | (45.1) | % | ||||||||||||||||||
Total property operating expenses | 77,563 | 228,555 | (150,992) | (66.1) | % | ||||||||||||||||||
Depreciation and amortization | 48,375 | 49,295 | (920) | (1.9) | % | ||||||||||||||||||
Property tax, insurance and other | 25,315 | 28,798 | (3,483) | (12.1) | % | ||||||||||||||||||
General and administrative | 9,313 | 11,262 | (1,949) | (17.3) | % | ||||||||||||||||||
Transaction costs | (116) | (211) | 95 | (45.0) | % | ||||||||||||||||||
Total operating expenses | 160,450 | 317,699 | (157,249) | (49.5) | % | ||||||||||||||||||
Other income | 334 | 315 | 19 | 6.0 | % | ||||||||||||||||||
Interest income | 284 | 2,691 | (2,407) | (89.4) | % | ||||||||||||||||||
Interest expense | (25,984) | (23,333) | (2,651) | 11.4 | % | ||||||||||||||||||
Gain (loss) on sale of hotel properties, net | 391 | (1,037) | 1,428 | — | % | ||||||||||||||||||
(Loss) income before equity in loss from unconsolidated joint ventures | (101,493) | 32,061 | (133,554) | — | % | ||||||||||||||||||
Equity in loss from unconsolidated joint ventures | (7,806) | (135) | (7,671) | — | % | ||||||||||||||||||
(Loss) income before income tax (expense) benefit | (109,299) | 31,926 | (141,225) | — | % | ||||||||||||||||||
Income tax (expense) benefit | (64,620) | 529 | (65,149) | — | % | ||||||||||||||||||
Net (loss) income | (173,919) | 32,455 | (206,374) | — | % | ||||||||||||||||||
Net (income) loss attributable to noncontrolling interests: | |||||||||||||||||||||||
Noncontrolling interest in consolidated joint ventures | (21) | 104 | (125) | — | % | ||||||||||||||||||
Noncontrolling interest in the Operating Partnership | 839 | (96) | 935 | — | % | ||||||||||||||||||
Net (loss) income attributable to RLJ | (173,101) | 32,463 | (205,564) | — | % | ||||||||||||||||||
Preferred dividends | (6,279) | (6,279) | — | — | % | ||||||||||||||||||
Net (loss) income attributable to common shareholders | $ | (179,380) | $ | 26,184 | $ | (205,564) | — | % |
For the three months ended September 30, | |||||||||||||||||
2020 | 2019 | % Change | |||||||||||||||
Occupancy | 29.3 | % | 81.1 | % | (63.9) | % | |||||||||||
ADR | $ | 119.26 | $ | 178.15 | (33.1) | % | |||||||||||
RevPAR | $ | 34.92 | $ | 144.39 | (75.8) | % |
For the three months ended September 30, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | ||||||||||||||||||||
Room expense | $ | 22,369 | $ | 76,965 | $ | (54,596) | (70.9) | % | |||||||||||||||
Food and beverage expense | 3,168 | 30,764 | (27,596) | (89.7) | % | ||||||||||||||||||
Management and franchise fee expense | 2,728 | 24,635 | (21,907) | (88.9) | % | ||||||||||||||||||
Other operating expense | 49,404 | 85,176 | (35,772) | (42.0) | % | ||||||||||||||||||
Total property operating expenses | $ | 77,669 | $ | 217,540 | $ | (139,871) | (64.3) | % |
For the three months ended September 30, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | ||||||||||||||||||||
Senior Notes | $ | 5,942 | $ | 5,954 | $ | (12) | (0.2) | % | |||||||||||||||
Revolver and Term Loans | 15,730 | 10,805 | 4,925 | 45.6 | % | ||||||||||||||||||
Mortgage loans | 4,368 | 5,001 | (633) | (12.7) | % | ||||||||||||||||||
Amortization of deferred financing costs | 1,147 | 1,116 | 31 | 2.8 | % | ||||||||||||||||||
Undesignated interest rate swaps | (1,203) | 457 | (1,660) | — | % | ||||||||||||||||||
Total interest expense | $ | 25,984 | $ | 23,333 | $ | 2,651 | 11.4 | % |
For the nine months ended September 30, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | ||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Operating revenues | |||||||||||||||||||||||
Room revenue | $ | 319,290 | $ | 1,030,722 | $ | (711,432) | (69.0) | % | |||||||||||||||
Food and beverage revenue | 35,870 | 133,151 | (97,281) | (73.1) | % | ||||||||||||||||||
Other revenue | 26,845 | 55,245 | (28,400) | (51.4) | % | ||||||||||||||||||
Total revenues | 382,005 | 1,219,118 | (837,113) | (68.7) | % | ||||||||||||||||||
Expenses | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Room expense | 98,590 | 253,736 | (155,146) | (61.1) | % | ||||||||||||||||||
Food and beverage expense | 31,348 | 101,544 | (70,196) | (69.1) | % | ||||||||||||||||||
Management and franchise fee expense | 17,947 | 96,376 | (78,429) | (81.4) | % | ||||||||||||||||||
Other operating expense | 168,288 | 288,761 | (120,473) | (41.7) | % | ||||||||||||||||||
Total property operating expenses | 316,173 | 740,417 | (424,244) | (57.3) | % | ||||||||||||||||||
Depreciation and amortization | 146,777 | 162,654 | (15,877) | (9.8) | % | ||||||||||||||||||
Property tax, insurance and other | 79,356 | 90,595 | (11,239) | (12.4) | % | ||||||||||||||||||
General and administrative | 32,754 | 34,187 | (1,433) | (4.2) | % | ||||||||||||||||||
Transaction costs | (86) | 773 | (859) | — | % | ||||||||||||||||||
Total operating expenses | 574,974 | 1,028,626 | (453,652) | (44.1) | % | ||||||||||||||||||
Other income | 1,193 | 939 | 254 | 27.1 | % | ||||||||||||||||||
Interest income | 3,829 | 4,935 | (1,106) | (22.4) | % | ||||||||||||||||||
Interest expense | (73,591) | (68,632) | (4,959) | 7.2 | % | ||||||||||||||||||
Gain (loss) on sale of hotel properties, net | 485 | (25,872) | 26,357 | — | % | ||||||||||||||||||
(Loss) income before equity in loss from unconsolidated joint ventures | (261,053) | 101,862 | (362,915) | — | % | ||||||||||||||||||
Equity in loss from unconsolidated joint ventures | (8,196) | (2,919) | (5,277) | — | % | ||||||||||||||||||
(Loss) income before income tax expense | (269,249) | 98,943 | (368,192) | — | % | ||||||||||||||||||
Income tax expense | (51,665) | (4,475) | (47,190) | — | % | ||||||||||||||||||
Net (loss) income | (320,914) | 94,468 | (415,382) | — | % | ||||||||||||||||||
Net loss (income) attributable to noncontrolling interests: | |||||||||||||||||||||||
Noncontrolling interest in consolidated joint ventures | 1,816 | 360 | 1,456 | — | % | ||||||||||||||||||
Noncontrolling interest in the Operating Partnership | 1,599 | (329) | 1,928 | — | % | ||||||||||||||||||
Preferred distributions - consolidated joint venture | — | (186) | 186 | (100.0) | % | ||||||||||||||||||
Redemption of preferred equity - consolidated joint venture | — | (1,153) | 1,153 | (100.0) | % | ||||||||||||||||||
Net (loss) income attributable to RLJ | (317,499) | 93,160 | (410,659) | — | % | ||||||||||||||||||
Preferred dividends | (18,836) | (18,836) | — | — | % | ||||||||||||||||||
Net (loss) income attributable to common shareholders | $ | (336,335) | $ | 74,324 | $ | (410,659) | — | % |
For the nine months ended September 30, | |||||||||||||||||
2020 | 2019 | % Change | |||||||||||||||
Occupancy | 33.8 | % | 80.1 | % | (57.8) | % | |||||||||||
ADR | $ | 152.72 | $ | 184.04 | (17.0) | % | |||||||||||
RevPAR | $ | 51.61 | $ | 147.42 | (65.0) | % |
For the nine months ended September 30, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | ||||||||||||||||||||
Room expense | $ | 98,575 | $ | 226,615 | $ | (128,040) | (56.5) | % | |||||||||||||||
Food and beverage expense | 31,348 | 93,026 | (61,678) | (66.3) | % | ||||||||||||||||||
Management and franchise fee expense | 18,079 | 81,330 | (63,251) | (77.8) | % | ||||||||||||||||||
Other operating expense | 168,030 | 251,489 | (83,459) | (33.2) | % | ||||||||||||||||||
Total property operating expenses | $ | 316,032 | $ | 652,460 | $ | (336,428) | (51.6) | % |
For the nine months ended September 30, | |||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | ||||||||||||||||||||
Senior Notes | $ | 17,825 | $ | 17,842 | $ | (17) | (0.1) | % | |||||||||||||||
Revolver and Term Loans | 39,087 | 31,795 | 7,292 | 22.9 | % | ||||||||||||||||||
Mortgage loans | 13,483 | 15,575 | (2,092) | (13.4) | % | ||||||||||||||||||
Amortization of deferred financing costs | 3,214 | 3,018 | 196 | 6.5 | % | ||||||||||||||||||
Undesignated interest rate swaps | (18) | 402 | (420) | — | % | ||||||||||||||||||
Total interest expense | $ | 73,591 | $ | 68,632 | $ | 4,959 | 7.2 | % |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net (loss) income | $ | (173,919) | $ | 32,455 | $ | (320,914) | $ | 94,468 | |||||||||||||||
Preferred dividends | (6,279) | (6,279) | (18,836) | (18,836) | |||||||||||||||||||
Preferred distributions - consolidated joint venture | — | — | — | (186) | |||||||||||||||||||
Redemption of preferred equity - consolidated joint venture | — | — | — | (1,153) | |||||||||||||||||||
Depreciation and amortization | 48,375 | 49,295 | 146,777 | 162,654 | |||||||||||||||||||
(Gain) loss on sale of hotel properties, net | (391) | 1,037 | (485) | 25,872 | |||||||||||||||||||
Noncontrolling interest in consolidated joint ventures | (21) | 104 | 1,816 | 360 | |||||||||||||||||||
Adjustments related to consolidated joint ventures (1) | (75) | (75) | (224) | (224) | |||||||||||||||||||
Adjustments related to unconsolidated joint ventures (2) | 7,008 | 504 | 7,991 | 4,733 | |||||||||||||||||||
FFO | (125,302) | 77,041 | (183,875) | 267,688 | |||||||||||||||||||
Transaction costs | (116) | (211) | (86) | 773 | |||||||||||||||||||
Amortization of share-based compensation | 3,195 | 2,948 | 9,217 | 8,708 | |||||||||||||||||||
Non-cash income tax expense (benefit) | 64,510 | (1,102) | 51,447 | 2,950 | |||||||||||||||||||
Unrealized (gain)/loss on discontinued cash flow hedges | (1,203) | 468 | (18) | 412 | |||||||||||||||||||
Corporate- and property-level severance (3) | 7,981 | — | 8,190 | — | |||||||||||||||||||
Other expenses (4) | (1,733) | 40 | (744) | 484 | |||||||||||||||||||
Adjusted FFO | $ | (52,668) | $ | 79,184 | $ | (115,869) | $ | 281,015 |
For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net (loss) income | $ | (173,919) | $ | 32,455 | $ | (320,914) | $ | 94,468 | |||||||||||||||
Depreciation and amortization | 48,375 | 49,295 | 146,777 | 162,654 | |||||||||||||||||||
Interest expense, net of interest income | 25,700 | 20,642 | 69,762 | 63,697 | |||||||||||||||||||
Income tax expense (benefit) | 64,620 | (529) | 51,665 | 4,475 | |||||||||||||||||||
Adjustments related to unconsolidated joint ventures (1) | 596 | 628 | 1,823 | 2,182 | |||||||||||||||||||
EBITDA | (34,628) | 102,491 | (50,887) | 327,476 | |||||||||||||||||||
Impairment loss of unconsolidated joint ventures (2) | 6,533 | — | 6,533 | — | |||||||||||||||||||
(Gain) loss on sale of hotel properties, net | (391) | 1,037 | (485) | 25,872 | |||||||||||||||||||
Loss on sale of unconsolidated joint ventures (3) | — | — | — | 2,923 | |||||||||||||||||||
EBITDAre | (28,486) | 103,528 | (44,839) | 356,271 | |||||||||||||||||||
Transaction costs | (116) | (211) | (86) | 773 | |||||||||||||||||||
Amortization of share-based compensation | 3,195 | 2,948 | 9,217 | 8,708 | |||||||||||||||||||
Corporate- and property-level severance (4) | 7,981 | — | 8,190 | — | |||||||||||||||||||
Other expenses (5) | (1,733) | 40 | (744) | 484 | |||||||||||||||||||
Adjusted EBITDA | $ | (19,159) | $ | 106,305 | $ | (28,262) | $ | 366,236 |
2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
Fixed rate debt (1) | $ | 572 | $ | 3,558 | $ | 140,386 | $ | — | $ | — | $ | 474,888 | $ | 619,404 | |||||||||||||||||||||||||||
Weighted-average interest rate | 5.01 | % | 5.01 | % | 5.01 | % | — | % | — | % | 6.00 | % | 5.77 | % | |||||||||||||||||||||||||||
Variable rate debt (1) | $ | — | $ | — | $ | 350,000 | $ | 625,000 | $ | 581,000 | $ | 400,000 | $ | 1,956,000 | |||||||||||||||||||||||||||
Weighted-average interest rate (2) | — | % | — | % | 2.61 | % | 4.58 | % | 2.95 | % | 3.77 | % | 3.58 | % | |||||||||||||||||||||||||||
Total (3) | $ | 572 | $ | 3,558 | $ | 490,386 | $ | 625,000 | $ | 581,000 | $ | 874,888 | $ | 2,575,404 |
Period | Total number of shares purchased (1) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs (2) | |||||||||||||||||||||||||
July 1, 2020 through July 31, 2020 | 396 | $ | 8.06 | — | 26,638,808 | ||||||||||||||||||||||||
August 1, 2020 through August 31, 2020 | 18,920 | $ | 8.65 | — | 22,603,480 | ||||||||||||||||||||||||
September 1, 2020 through September 30, 2020 | 51,401 | $ | 8.36 | — | 24,639,360 | ||||||||||||||||||||||||
Total | 70,717 | — |
Exhibit Number | Description of Exhibit | |||||||||||||
3.1 | ||||||||||||||
3.2 | ||||||||||||||
3.3 | ||||||||||||||
3.4 | ||||||||||||||
3.5 | ||||||||||||||
3.6 | ||||||||||||||
31.1* | ||||||||||||||
31.2* | ||||||||||||||
32.1* | ||||||||||||||
101.INS | Inline XBRL Instance Document | Submitted electronically with this report | ||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | Submitted electronically with this report | ||||||||||||
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | Submitted electronically with this report | ||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Submitted electronically with this report | ||||||||||||
101.LAB | Inline XBRL Taxonomy Label Linkbase Document | Submitted electronically with this report | ||||||||||||
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | Submitted electronically with this report | ||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101) | Submitted electronically with this report |
RLJ LODGING TRUST | |||||
Dated: November 5, 2020 | /s/ LESLIE D. HALE | ||||
Leslie D. Hale | |||||
President and Chief Executive Officer | |||||
Dated: November 5, 2020 | /s/ SEAN M. MAHONEY | ||||
Sean M. Mahoney | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
Dated: November 5, 2020 | /s/ CHRISTOPHER A. GORMSEN | ||||
Christopher A. Gormsen | |||||
Senior Vice President and Chief Accounting Officer | |||||
(Principal Accounting Officer) |
RLJ LODGING TRUST | |||||
Dated: November 5, 2020 | /s/ LESLIE D. HALE | ||||
Leslie D. Hale | |||||
President and Chief Executive Officer | |||||
RLJ LODGING TRUST | |||||
Dated: November 5, 2020 | /s/ SEAN M. MAHONEY | ||||
Sean M. Mahoney | |||||
Executive Vice President and Chief Financial Officer | |||||
RLJ LODGING TRUST | |||||
Dated: November 5, 2020 | /s/ LESLIE D. HALE | ||||
Leslie D. Hale | |||||
President and Chief Executive Officer | |||||
/s/ SEAN M. MAHONEY | |||||
Sean M. Mahoney | |||||
Executive Vice President and Chief Financial Officer | |||||
Investment in Hotel Properties |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Hotel Properties | Investment in Hotel Properties Investment in hotel properties consisted of the following (in thousands):
For the three and nine months ended September 30, 2020, the Company recognized depreciation expense related to its investment in hotel properties of approximately $48.2 million and $146.1 million, respectively. For the three and nine months ended September 30, 2019, the Company recognized depreciation expense related to its investment in hotel properties of approximately $48.9 million and $160.9 million, respectively. Impairment In connection with the preparation of the unaudited consolidated financial statements for the three and nine months ended September 30, 2020 and 2019, the Company evaluated the recoverability of the carrying values of its hotel properties. The Company performed an undiscounted cash flow analysis as of September 30, 2020 for certain of its hotel properties. Based on this analysis, the Company concluded that there were no impairments for the three and nine months ended September 30, 2020 and 2019.
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Supplemental Information to Statements of Cash Flows |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information to Statements of Cash Flows | Supplemental Information to Statements of Cash Flows (in thousands)
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Investment in Hotel Properties (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investment in hotel properties | Investment in hotel properties consisted of the following (in thousands):
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Supplemental Information to Statements of Cash Flows (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental information to statements of cash flows |
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Investment in Hotel Properties (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Land and improvements | $ 1,089,864 | $ 1,089,864 | $ 1,088,436 | ||
Buildings and improvements | 4,076,944 | 4,076,944 | 4,039,012 | ||
Furniture, fixtures and equipment | 696,914 | 696,914 | 685,699 | ||
Investment in hotel properties, gross | 5,863,722 | 5,863,722 | 5,813,147 | ||
Accumulated depreciation | (1,344,279) | (1,344,279) | (1,198,181) | ||
Investment in hotel properties, net | 4,519,443 | 4,519,443 | $ 4,614,966 | ||
Real Estate Depreciation Expense, Excluding Discontinued Operations Expense | $ 48,200 | $ 48,900 | $ 146,100 | $ 160,900 |
Supplemental Information to Statements of Cash Flows (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Cash and cash equivalents | $ 995,963 | $ 845,882 |
Restricted cash reserves | 42,686 | 48,610 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 1,038,649 | 894,492 |
Interest paid | 64,446 | 63,586 |
Income taxes paid | 1,495 | 2,520 |
Operating Lease, Payments | 9,013 | 11,505 |
In connection with the sale of hotel properties, the Company recorded the following: | ||
Sale of hotel properties | 0 | 640,681 |
Transaction costs | 485 | (9,224) |
Operating prorations | 0 | (7,882) |
Proceeds from the sale of hotel properties, net | 485 | 623,575 |
Supplemental non-cash transactions | ||
Accrued capital expenditures | $ 6,520 | $ 6,857 |
General |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Organization RLJ Lodging Trust (the "Company") was formed as a Maryland real estate investment trust ("REIT") on January 31, 2011. The Company is a self-advised and self-administered REIT that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company elected to be taxed as a REIT, for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2011. Substantially all of the Company’s assets and liabilities are held by, and all of its operations are conducted through, RLJ Lodging Trust, L.P. (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership. As of September 30, 2020, there were 165,794,529 units of limited partnership interest in the Operating Partnership ("OP units") outstanding and the Company owned, through a combination of direct and indirect interests, 99.5% of the outstanding OP units. As of September 30, 2020, the Company owned 104 hotel properties with approximately 22,700 rooms, located in 23 states and the District of Columbia. The Company, through wholly-owned subsidiaries, owned a 100% interest in 100 of its hotel properties, a 98.3% controlling interest in the DoubleTree Metropolitan Hotel New York City, a 95% controlling interest in The Knickerbocker, and 50% interests in entities owning two hotel properties. The Company consolidates its real estate interests in the 102 hotel properties in which it holds a controlling financial interest, and the Company records the real estate interests in the two hotel properties in which it holds an indirect 50% interest using the equity method of accounting. The Company leases 103 of the 104 hotel properties to its taxable REIT subsidiaries ("TRS"), of which the Company owns a controlling financial interest. Liquidity and Management's Plans In response to the near elimination of travel and hotel demand resulting from the spread of the novel strain of coronavirus (COVID-19) and the related government mandates, the Company had previously announced the suspension of operations at 57 of its hotel properties. As government mandated stay-in-place restrictions were lifted, the Company developed a framework to open the suspended hotel properties. The Company had reopened 47 of its hotel properties as of September 30, 2020, and subsequent to the end of the quarter has reopened 3 hotel properties. The Company continues to evaluate reopening the remaining 7 suspended hotel properties based on market conditions. The remaining suspended hotel properties are located within the central business districts of New York City and San Francisco, or are part of a cluster where the Company owns multiple hotels in the same immediate area. In the event stay-in-place restrictions are reinstated, the Company would consider temporarily suspending hotel operations where demand is inadequate. The ongoing effects of the COVID-19 pandemic on the Company's operations continue to have a material adverse impact on its financial results and liquidity, and such adverse impact may continue well beyond the containment of such outbreak. Since the extent to which the COVID-19 pandemic impacts our operations will depend on future developments that are highly uncertain, the Company cannot estimate the impact on its business, financial condition or near- or longer-term financial or operational results with reasonable certainty. Given the impact on lodging demand, the Company has taken various actions to help mitigate the effects of the COVID-19 pandemic on its operating results and to preserve liquidity. Operational measures the Company has taken include: •Suspension of Hotel Operations: The Company suspended operations at many of its hotel properties. As government mandated stay-in-place restrictions have been lifted, the Company has reopened most of the suspended hotel properties. •Cost Containment Initiatives: The Company continues to operate with reduced operating expenses by implementing stringent operational cost containment measures. These measures include significantly reduced staffing, reduced energy costs, elimination of non-essential amenities and services and the closure of several floors and most food and beverage outlets at properties that remain open. •Capital Investment Reduction: The Company reduced its 2020 capital expenditure program by deferring all capital investments, other than completing projects that are substantially underway and nearing completion. •Return on Investment ("ROI") Project Suspensions: The Company suspended most of the 2020 ROI projects. In addition, the Company has taken aggressive actions to increase liquidity and preserve cash at the corporate level including: •Common Stock Dividend: The Company’s board of trustees authorized the first, second and third quarter common cash dividends of $0.01 per common share, which reflects a significant reduction compared to the Company's dividend payout prior to the COVID-19 pandemic. •Share Repurchase: The Company suspended all repurchases of its common shares and Series A Preferred Shares (defined below), as applicable. |
Summary of Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company's Annual Report on Form 10-K for the year ended December 31, 2019 contains a discussion of the Company's significant accounting policies. Other than noted below, there have been no significant changes to the Company's significant accounting policies since December 31, 2019. Basis of Presentation and Principles of Consolidation The unaudited consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. The unaudited financial statements include all adjustments that are necessary, in the opinion of management, to fairly state the consolidated balance sheets, statements of operations and comprehensive income, statements of changes in equity and statements of cash flows. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2019, included in the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2020. The consolidated financial statements include the accounts of the Company, the Operating Partnership and its wholly-owned subsidiaries, and joint ventures in which the Company has a majority voting interest and control. For the controlled subsidiaries that are not wholly-owned, the third-party ownership interest represents a noncontrolling interest, which is presented separately in the consolidated financial statements. The Company also records the real estate interests in two joint ventures in which it holds an indirect 50% interest using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Given the additional and unforeseen effects from the COVID-19 pandemic, these estimates have become more challenging, and actual results could differ from those estimates. Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an "incurred loss" method to an "expected loss" method. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The Company adopted this new standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The guidance modifies the disclosure requirements for fair value measurements by removing or modifying some of the disclosures, while also adding new disclosures. The Company adopted this new standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance provides optional expedients for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued at the end of 2021 because of reference rate reform. The guidance is effective immediately and expires on December 31, 2022. Based on the Company's assessment, the adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.
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Investment in Unconsolidated Joint Ventures (Notes) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures As of September 30, 2020 and December 31, 2019, the Company owned 50% interests in joint ventures that owned two hotel properties. During the three months ended September 30, 2020, one of the unconsolidated joint ventures determined the property ground lease will likely terminate no later than October 31, 2021 and the property will revert to the ground lessor at that time. As a result, the Company recorded an impairment loss of $6.5 million to write down the Company's investment in this joint venture. The impairment loss is included in equity in loss from unconsolidated joints ventures in the accompanying consolidated statements of operations and comprehensive income. During the nine months ended September 30, 2019, the Company sold two hotels located in Myrtle Beach, South Carolina. In addition, the joint ventures that were associated with these two hotels sold their assets. The Company had owned 50% interests in these joint ventures. The Company recorded a loss of $2.9 million related to the sale, which is included in equity in loss from unconsolidated joint ventures in the accompanying consolidated statements of operations. Refer to Note 5, Sale of Hotel Properties, for more information regarding the sale of the hotels. The Company accounts for the investments in its unconsolidated joint ventures under the equity method of accounting. The Company makes adjustments to the equity in loss from unconsolidated joint ventures related to the difference between the Company's basis in the investment in the unconsolidated joint ventures as compared to the historical basis of the assets and liabilities of the joint ventures. As of September 30, 2020 and December 31, 2019, the unconsolidated joint ventures' debt consisted entirely of non-recourse mortgage debt. The following table summarizes the components of the Company's investments in unconsolidated joint ventures (in thousands):
The following table summarizes the components of the Company's equity in loss from unconsolidated joint ventures (in thousands):
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Sale of Hotel Properties |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sale of Hotel Properties | Sale of Hotel Properties During the nine months ended September 30, 2019, the Company sold 42 hotel properties in four separate transactions for a total sales price of approximately $653.4 million. In connection with these transactions, the Company recorded a net loss of $25.9 million, which is included in gain (loss) on sale of hotel properties, net, in the accompanying consolidated statements of operations and comprehensive income. On June 25, 2019, the Company sold a portfolio of 21 hotels for $311.9 million. In connection with this transaction, the Company recorded a gain on sale of $44.4 million, which is included in gain (loss) on sale of hotel properties, net, in the accompanying consolidated statements of operations and comprehensive income. On June 27, 2019, the Company sold two resort hotels in Myrtle Beach, South Carolina for $153.3 million. In connection with this transaction, the Company recorded a loss on sale of $21.5 million, which is included in gain (loss) on sale of hotel properties, net, in the accompanying consolidated statements of operations and comprehensive income. On August 14, 2019, the Company sold a portfolio of 18 hotels for $175.4 million. In connection with this transaction, the Company recorded a loss on sale of $49.0 million, which is included in gain (loss) on sale of hotel properties, net, in the accompanying consolidated statements of operations and comprehensive income. On September 12, 2019, the Company sold a hotel in Columbia, Maryland for $12.7 million. In connection with this transaction, the Company recorded a gain on sale of $0.3 million, which is included in gain (loss) on sale of hotel properties, net, in the accompanying consolidated statements of operations and comprehensive income. The following table discloses the hotel properties that were sold during the nine months ended September 30, 2019:
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Revenue (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | The Company recognized revenue from the following geographic markets (in thousands):
Trade Receivables The Company has historically only experienced de minimis credit losses in hotel-level trade receivables. As of September 30, 2020, the Company reviewed its allowance for doubtful accounts and concluded that it was adequate. Because of the adverse impact of the COVID-19 pandemic, the Company could experience a delay in payment and collections.
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Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company's debt consisted of the following (in thousands):
Senior Notes The Company's senior unsecured notes are referred to as the "Senior Notes." The Company's Senior Notes consisted of the following (in thousands):
(1)Requires payments of interest only through maturity. (2)The senior unsecured notes include $22.1 million and $25.6 million at September 30, 2020 and December 31, 2019, respectively, related to acquisition related fair value adjustments on the senior unsecured notes. (3)The Company has the option to redeem the senior unsecured notes at a price of 103.0% of face value. The Senior Notes are subject to a maximum unsecured leverage maintenance covenant, which is based on asset value that is calculated at historical cost. In addition, the Senior Notes are subject to various incurrence covenants that limit the ability of the Company's subsidiary, FelCor Lodging Limited Partnership, to incur additional debt if these covenants are violated. As of September 30, 2020, the Company was in compliance with all maintenance and incurrence covenants associated with the Senior Notes. Revolver and Term Loans The Company has the following unsecured credit agreements in place: •$600.0 million revolving credit facility with a scheduled maturity date of May 18, 2024 and a one year extension option if certain conditions are satisfied (the "Revolver"); •$150.0 million term loan with a scheduled maturity date of January 22, 2022 (the "$150 Million Term Loan Maturing 2022"); •$400.0 million term loan with a scheduled maturity date of January 25, 2023 (the "$400 Million Term Loan Maturing 2023"); •$225.0 million term loan with a scheduled maturity date of January 25, 2023 (the "$225 Million Term Loan Maturing 2023"); and •$400.0 million term loan with a scheduled maturity date of May 18, 2025 (the "$400 Million Term Loan Maturing 2025"). The $150 Million Term Loan Maturing 2022, the $400 Million Term Loan Maturing 2023, the $225 Million Term Loan Maturing 2023, and the $400 Million Term Loan Maturing 2025 are collectively the "Term Loans." The Company's unsecured credit agreements consisted of the following (in thousands):
(1)Interest rate at September 30, 2020 gives effect to interest rate hedges. (2)At September 30, 2020 and December 31, 2019, there was $200.0 million and $600.0 million, respectively, undrawn on the Revolver. The Company also has the ability to extend the maturity date for an additional one year period ending May 2025 if certain conditions are satisfied. (3)Excludes $3.7 million and $3.4 million as of September 30, 2020 and December 31, 2019, respectively, related to deferred financing costs on the Revolver, which are included in prepaid expense and other assets in the accompanying consolidated balance sheets. The Revolver and Term Loans are subject to various financial covenants. A summary of the most restrictive covenants is as follows:
(1)Leverage ratio is net indebtedness, as defined in the Revolver and Term Loan agreements, to corporate earnings before interest, taxes, depreciation, and amortization ("EBITDA"), as defined in the Revolver and Term Loan agreements. (2)Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the Revolver and Term Loan agreements as EBITDA less furniture, fixtures and equipment ("FF&E") reserves, to fixed charges, which is generally defined in the Revolver and Term Loan agreements as interest expense, all regularly scheduled principal payments, preferred dividends paid, and cash taxes paid. (3)The Company is not currently required to comply with these covenants, see details below. In June 2020, the Company amended its Revolver and Term Loans. The amendments suspend the testing of all existing financial maintenance covenants under the Revolver and the Term Loan agreements for all periods through and including the fiscal quarter ending March 31, 2021 (the “Covenant Relief Period”). In addition, for periods following the Covenant Relief Period, the amendments modify the covenant thresholds for the leverage ratio and unencumbered debt service coverage ratio as follows: •Increasing the maximum leverage ratio to 8.50x for the first two quarters following the Covenant Relief Period, 8.00x for the third and fourth quarters following the Covenant Relief Period, 7.50x for the fifth quarter following the Covenant Relief Period, and returning to 7.00x for the quarter ending September 30, 2022. •Reducing the minimum unencumbered debt service coverage ratio to 1.65x for the first three quarters following the Covenant Relief Period until the minimum unencumbered debt service coverage ratio returns to 2.00x for the quarter ending March 31, 2022. •The Company is required to maintain a minimum liquidity level of $125.0 million. Pursuant to the amendments and through the date that the financial statements are delivered for the quarter ending June 30, 2021 (the "Restriction Period"), the Company is subject to the following restrictions: •The net cash proceeds from asset sales, equity issuances and incurrences of indebtedness will, subject to various exceptions, be required to be applied as a mandatory prepayment of certain amounts outstanding under the Revolver and the Term Loans. •Additional negative covenants that limit the ability of the Company and its subsidiaries to incur additional indebtedness, make prepayments of other indebtedness, make dividends and distributions (with certain exceptions, including for the payment of a quarterly cash dividend of $0.01 per common share, the payment of a quarterly cash dividend on the Company’s Series A Cumulative Convertible Preferred Shares and other payments for purposes of maintaining REIT status) and stock repurchases, make approximately $260.0 million of capital expenditures, and make investments, including up to $200.0 million of acquisitions or mergers, in each case, subject to various exceptions. •Requirement to pledge the equity interests in certain subsidiaries that own unencumbered properties to secure the Revolver and Term Loans. The equity pledge requirement is also required to be satisfied following the Restriction Period until such time as the leverage ratio is no greater than 6.50x for two consecutive fiscal quarters. The amendments further provide that, until the earlier of (1) the earlier of July 1, 2022 or the day after the end of the fifth quarter immediately following the end of the Covenant Relief Period and (2) such time as the leverage ratio is less than or equal to 7.00x, borrowings under the Revolver and the Term Loan agreements will bear interest, at the Company's election, at a per annum rate of (i) in the case of the Revolver, (a) LIBOR plus a margin of 230 basis points or (b) a base rate plus a margin of 130 basis points, and (ii) in the case of each of the Term Loans, (a) LIBOR plus a margin of 225 basis points or (b) a base rate plus a margin of 125 basis points. The amendments also add a floor of 0.25% to the LIBOR interest rate determination, subject to certain exceptions, under both the Revolver and the Term Loan agreements. At the Company's election, the Restriction Period and the Covenant Relief Period may be terminated early if the Company is at such time able to comply with the applicable financial covenants. If the Company assesses that it is unlikely to meet the financial covenant thresholds for periods following the Covenant Relief Period, then the Company will seek an extension of the Covenant Relief Period. Mortgage Loans The Company's mortgage loans consisted of the following (in thousands):
(1)The hotels encumbered by the mortgage loan are cross-collateralized. Requires payments of interest only through maturity. (2)Includes $0.3 million and $0.5 million at September 30, 2020 and December 31, 2019, respectively, related to a fair value adjustment on a mortgage loan. (3)Includes $1.0 million and $1.4 million at September 30, 2020 and December 31, 2019, respectively, related to fair value adjustments on the mortgage loans. (4)Includes $0.3 million and $0.4 million at September 30, 2020 and December 31, 2019, respectively, related to a fair value adjustment on the mortgage loan. (5)The mortgage loan provides two one year extension options. Certain mortgage agreements are subject to various maintenance covenants requiring the Company to maintain a minimum debt yield or debt service coverage ratio ("DSCR"). Failure to meet the debt yield or DSCR thresholds is not an event of default, but instead triggers a cash trap event. During the cash trap event, the lender or servicer of the mortgage loan controls cash outflows until the loan is covenant compliant. In addition certain mortgage loans have other requirements including continued operation and maintenance of the hotel property. While operations at certain hotel properties securing the mortgage loans had been temporarily suspended, the business operations remained that of a hotel, not another form of business, and the hotel properties were maintained. At September 30, 2020, five mortgage loans failed to meet the DSCR threshold and were in a cash trap event. The Company was in compliance with all other maintenance covenants associated with the other mortgage loan at September 30, 2020. Interest Expense The components of the Company's interest expense consisted of the following (in thousands):
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Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities The following interest rate swaps have been designated as cash flow hedges (in thousands):
(1)Effective in November 2020. (2)Effective in January 2021. (3)Effective in September 2021. (4)Effective in April 2021. (5)Effective in July 2021. The following interest rate swaps have not been designated as hedging instruments (in thousands):
(1)During the year ended December 31, 2019, the Company discontinued accounting for these interest rate swaps as cash flow hedges. The Company recognizes all changes in the fair value of these interest rate swaps in interest expense in the consolidated statements of operations and comprehensive income. As of September 30, 2020 and December 31, 2019, the aggregate fair value of the interest rate swap liabilities of $77.3 million and $24.2 million, respectively, was included in accounts payable and other liabilities in the accompanying consolidated balance sheets. As of December 31, 2019, the aggregate fair value of the interest rate swap assets of $4.3 million was included in prepaid expense and other assets in the accompanying consolidated balance sheets. As of September 30, 2020 and December 31, 2019, there was approximately $77.0 million and $19.5 million, respectively, of unrealized losses included in accumulated other comprehensive loss related to interest rate hedges that are effective in offsetting the variable cash flows. There was no ineffectiveness recorded on the designated hedges during the three or nine month periods ended September 30, 2020 or 2019. For the three and nine months ended September 30, 2020, approximately $6.9 million and $13.2 million, respectively, of the amounts included in accumulated other comprehensive loss were reclassified into interest expense for the interest rate swaps that have been designated as cash flow hedges. For the three and nine months ended September 30, 2019, $1.1 million and $5.6 million, respectively, of the amounts included in accumulated other comprehensive loss were reclassified into interest expense for the interest rate swaps that have been designated as cash flow hedges. Approximately $27.3 million of the unrealized losses included in accumulated other comprehensive loss at September 30, 2020 is expected to be reclassified into interest expense within the next 12 months
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Fair Value Measurement Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The fair value hierarchy has three levels of inputs, both observable and unobservable: •Level 1 — Inputs include quoted market prices in an active market for identical assets or liabilities. •Level 2 — Inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. •Level 3 — Inputs are unobservable and corroborated by little or no market data. Fair Value of Financial Instruments The Company used the following market assumptions and/or estimation methods: •Cash and cash equivalents, restricted cash reserves, hotel and other receivables, accounts payable and other liabilities — The carrying amounts reported in the consolidated balance sheets for these financial instruments approximate fair value because of their short term maturities. •Debt — The Company estimated the fair value of the Senior Notes by using publicly available trading prices, which are Level 2 inputs in the fair value hierarchy. The Company estimated the fair value of the Revolver and Term Loans by using a discounted cash flow model and incorporating various inputs and assumptions for the effective borrowing rates for debt with similar terms, which are Level 3 inputs in the fair value hierarchy. The Company estimated the fair value of the mortgage loans by using a discounted cash flow model and incorporating various inputs and assumptions for the effective borrowing rates for debt with similar terms and the loan to estimated fair value of the collateral, which are Level 3 inputs in the fair value hierarchy. The fair value of the Company's debt was as follows (in thousands):
Recurring Fair Value Measurements The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 (in thousands):
The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 (in thousands):
The fair values of the derivative financial instruments are determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows for each derivative. The Company determined that the significant inputs, such as interest yield curves and discount rates, used to value its derivatives fall within Level 2 of the fair value hierarchy and that the credit valuation adjustments associated with the Company’s counterparties and its own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As of September 30, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, to shareholders. The Company’s intention is to adhere to the REIT qualification requirements and to maintain its qualification for taxation as a REIT. As a REIT, the Company is generally not subject to federal corporate income tax on the portion of taxable income that is distributed to shareholders. If the Company fails to qualify for taxation as a REIT in any taxable year, the Company will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and it may not be able to qualify as a REIT for four subsequent taxable years. As a REIT, the Company may be subject to certain state and local taxes on its income and property, and to U.S. federal income and excise taxes on undistributed taxable income. The Company’s TRSs will generally be subject to U.S. federal, state, and local income taxes at the applicable rates. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Based upon the available objective evidence at September 30, 2020, the Company determined it was more likely than not that the deferred tax assets related to the net operating loss ("NOL") carryforwards of its primary TRS would not be utilized in future periods. The Company considered all available evidence, both positive and negative, including cumulative losses in recent years and its current forecast of future income in its analysis. As a result, the Company recorded a full valuation allowance against these deferred tax assets and recorded a deferred tax expense of $64.5 million during the three months ended September 30, 2020. The Company had no accruals for tax uncertainties as of September 30, 2020 and December 31, 2019.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Restricted Cash Reserves The Company is obligated to maintain cash reserve funds for future capital expenditures at the hotels (including the periodic replacement or refurbishment of FF&E as determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents). The management agreements, franchise agreements and/or mortgage loan documents require the Company to reserve cash ranging typically from 3.0% to 5.0% of the individual hotel’s revenues. Any unexpended amounts will remain the property of the Company upon termination of the management agreements, franchise agreements or mortgage loan documents. As of September 30, 2020 and December 31, 2019, approximately $42.7 million and $44.7 million, respectively, was available in the restricted cash reserves for future capital expenditures, real estate taxes and insurance. In addition, due to the effects of the COVID-19 pandemic on its operations, the Company has worked with the hotel brands, third-party managers and lenders to allow the use of available restricted cash reserves to cover operating shortfalls at certain hotels. Litigation Other than the legal proceeding mentioned below, neither the Company nor any of its subsidiaries is currently involved in any regulatory or legal proceedings that management believes will have a material and adverse effect on the Company's financial position, results of operations or cash flows. Prior to the Company's merger with FelCor Lodging Trust, Inc. ("FelCor"), an affiliate of InterContinental Hotels Group PLC ("IHG"), which previously managed three of FelCor's hotels, notified FelCor that National Retirement Fund ("NRF") had assessed an employee withdrawal liability, with required quarterly payments including interest, in connection with the termination of IHG’s management of those hotels. In October 2020, the Company entered into an agreement with IHG and NRF resolving this dispute. Management Agreements As of September 30, 2020, 103 of the Company's hotel properties were operated pursuant to long-term management agreements with initial terms ranging from to 25 years. This number includes 29 hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, or Marriott. Each management company receives a base management fee between 1.75% and 3.5% of hotel revenues. Management agreements that include the benefits of a franchise agreement incur a base management fee between 3.0% and 7.0% of hotel revenues. The management companies are also eligible to receive an incentive management fee if hotel operating income, as defined in the management agreements, exceeds certain thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on its investment in the hotel. Management fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2020, the Company incurred management fee expense of approximately $2.3 million and $10.9 million, respectively. For the three and nine months ended September 30, 2019, the Company incurred management fee expense of approximately $9.0 million and $36.8 million, respectively. Franchise Agreements As of September 30, 2020, 73 of the Company’s hotel properties were operated under franchise agreements with initial terms ranging from one to 30 years. This number excludes 29 hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, or Marriott. In addition, one hotel is not operated with a hotel brand so it does not have a franchise agreement. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, the Company pays a royalty fee, between 3.0% and 6.0% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs between 1.0% and 4.3% of room revenue. Certain hotels are also charged a royalty fee of 3.0% of food and beverage revenues. Franchise fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2020, the Company incurred franchise fee expense of approximately $4.7 million and $20.3 million, respectively. For the three and nine months ended September 30, 2019, the Company incurred franchise fee expense of approximately $17.4 million and $59.6 million, respectively. Wyndham Agreements Prior to January 1, 2020, the Wyndham management agreements guaranteed minimum levels of annual net operating income at each of the Wyndham-managed hotels. In 2019, the Company entered into an agreement with Wyndham to terminate the net operating income guarantee effective December 31, 2019 and received termination payments totaling $36.0 million from Wyndham, which amount is included in advance deposits and deferred revenue in the accompanying consolidated balance sheets. Effective January 1, 2020, the Company began recognizing the termination payments over the estimated term of the transitional agreements as a reduction to management and franchise fee expense in the consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2020, the Company recognized approximately $4.4 million and $13.2 million, respectively, as a reduction to management and franchise fee expense related to the amortization of the termination payments. Other During the three and nine months ended September 30, 2020, the Company incurred approximately $8.0 million and $8.2 million, respectively, in corporate- and property-level severance costs as a result of the COVID-19 pandemic. This amount includes $6.7 million for the three and nine months ended September 30, 2020 related to severance for associates at the Company's New York City hotels operating under collective bargaining agreements. The severance costs are included in other operating expense in the accompanying consolidated statements of operations and comprehensive income.
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Equity |
9 Months Ended |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity Common Shares of Beneficial Interest On February 14, 2020, the Company's board of trustees approved a new share repurchase program to repurchase up to $250.0 million of common shares from March 1, 2020 to February 28, 2021 (the "2020 Share Repurchase Program"). During the nine months ended September 30, 2020, the Company repurchased and retired 5,489,335 common shares for approximately $62.6 million, of which $26.0 million was repurchased under a share repurchase program authorized by the Company's board of trustees in 2019, which expired February 29, 2020 (the "2019 Share Repurchase Program"), and $36.6 million was repurchased under the 2020 Share Repurchase Program. As of September 30, 2020, the 2020 Share Repurchase Program had a remaining capacity of $213.4 million. In April 2020, however, the Company suspended further repurchases of its common shares pursuant to the 2020 Share Repurchase Program due to the effects of the COVID-19 pandemic. During the nine months ended September 30, 2019, the Company repurchased and retired 3,836,582 common shares for approximately $65.6 million, of which $10.3 million was repurchased under a share repurchase program that expired February 28, 2019 and $55.3 million was repurchased under the 2019 Share Repurchase Program. During the nine months ended September 30, 2020, the Company declared a cash dividend of $0.01 per common share in each of the first, second and third quarters of 2020. During the nine months ended September 30, 2019, the Company declared a cash dividend of $0.33 per common share in each of the first, second and third quarters of 2019. Series A Preferred Shares In April 2020, the Company suspended repurchases of its Series A Preferred Shares pursuant to the 2020 Share Repurchase Program due to the effects of the COVID-19 pandemic. During the nine months ended September 30, 2020 and 2019, the Company did not repurchase any Series A Preferred Shares. During the nine months ended September 30, 2020 and 2019, the Company declared a cash dividend of $0.4875 on each Series A Preferred Share in each of the first, second and third quarters of 2020 and 2019. Noncontrolling Interest in Consolidated Joint Ventures The Company consolidates the joint venture that owns the DoubleTree Metropolitan Hotel New York City, which has a third-party partner that owns a noncontrolling 1.7% ownership interest in the joint venture. In addition, the Company consolidates the joint venture that owns The Knickerbocker, which has a third-party partner that owns a noncontrolling 5% ownership interest in the joint venture. The third-party ownership interests are included in the noncontrolling interest in consolidated joint ventures on the consolidated balance sheets. Noncontrolling Interest in the Operating Partnership The Company consolidates the Operating Partnership, which is a majority-owned limited partnership that has a noncontrolling interest. The outstanding OP units held by the limited partners are redeemable for cash, or at the option of the Company, for a like number of common shares. As of September 30, 2020, 772,293 outstanding OP units were held by the limited partners. The noncontrolling interest is included in the noncontrolling interest in the Operating Partnership on the consolidated balance sheets.
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Equity Incentive Plan |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plan | Equity Incentive Plan The Company may issue share-based awards to officers, employees, non-employee trustees and other eligible persons under the RLJ Lodging Trust 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan provides for a maximum of 7,500,000 common shares to be issued in the form of share options, share appreciation rights, restricted share awards, unrestricted share awards, share units, dividend equivalent rights, long-term incentive units, other equity-based awards and cash bonus awards. Share Awards From time to time, the Company may award unvested restricted shares under the 2015 Plan as compensation to officers, employees and non-employee trustees. The issued shares vest over a period of time as determined by the board of trustees at the date of grant. The Company recognizes compensation expense for time-based unvested restricted shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures. Non-employee trustees may also elect to receive unrestricted shares under the 2015 Plan as compensation that would otherwise be paid in cash for their services. The shares issued to non-employee trustees in lieu of cash compensation are unrestricted and include no vesting conditions. The Company recognizes compensation expense for the unrestricted shares issued in lieu of cash compensation on the date of issuance based upon the fair market value of the shares on that date. A summary of the unvested restricted shares as of September 30, 2020 is as follows:
(1)During the nine months ended September 30, 2020, the Company issued restricted shares to officers and employees that vest on an annual basis over service periods between two and four years. For the three and nine months ended September 30, 2020, the Company recognized approximately $2.3 million and $6.6 million, respectively, of share-based compensation expense related to restricted share awards. For the three and nine months ended September 30, 2019, the Company recognized approximately $2.2 million and $6.5 million, respectively, of share-based compensation expense related to restricted share awards. As of September 30, 2020, there was $16.2 million of total unrecognized compensation costs related to unvested restricted share awards and these costs are expected to be recognized over a weighted-average period of 2.5 years. The total fair value of the shares vested (calculated as the number of shares multiplied by the vesting date share price) during the nine months ended September 30, 2020 and 2019 was approximately $4.5 million and $4.1 million, respectively. Performance Units From time to time, the Company may award performance units under the 2015 Plan as compensation to officers and employees. The performance units vest over a four year period, including three years of performance-based vesting (the “performance units measurement period”) plus an additional one year of time-based vesting. These performance units may convert into restricted shares at a range of 0% to 200% of the number of performance units granted contingent upon the Company achieving an absolute total shareholder return (40% of award) and a relative total shareholder return (60% of award) over the measurement period at specified percentiles of the peer group, as defined by the awards. If at the end of the performance units measurement period the target criterion is met, then 50% of the performance units that are earned will vest at the end of the measurement period. The remaining 50% convert to restricted shares that will vest on the one year anniversary of the end of the measurement period. The award recipients will not be entitled to receive any dividends prior to the date of conversion. For any restricted shares issued upon conversion, the award recipient will be entitled to receive payment of an amount equal to all dividends that would have been paid if such restricted shares had been issued at the beginning of the performance units measurement period. The fair value of the performance units is determined using a Monte Carlo simulation, and an expected term equal to the requisite service period for the awards of four years. The Company estimates the compensation expense for the performance units on a straight-line basis using a calculation that recognizes 50% of the grant date fair value over three years and 50% of the grant date fair value over four years. A summary of the performance unit awards is as follows:
(1) In February 2020, following the end of the measurement period, the Company did not meet certain target criterion and no performance units were converted into restricted shares. For the three and nine months ended September 30, 2020, the Company recognized approximately $0.9 million and $2.6 million, respectively, of share-based compensation expense related to the performance unit awards. For the three and nine months ended September 30, 2019, the Company recognized approximately $0.7 million and $2.2 million, respectively, of share-based compensation expense related to the performance unit awards. As of September 30, 2020, there was $8.1 million of total unrecognized compensation costs related to the performance unit awards and these costs are expected to be recognized over a weighted-average period of 2.5 years. |
Earnings per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period excluding the weighted-average number of unvested restricted shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period, plus any shares that could potentially be outstanding during the period. The potential shares consist of the unvested restricted share grants and unvested performance units, calculated using the treasury stock method. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating shares and are considered in the computation of earnings per share pursuant to the two-class method. If there were any undistributed earnings allocable to the participating shares, they would be deducted from net income attributable to common shareholders used in the basic and diluted earnings per share calculations. The limited partners’ outstanding OP units (which may be redeemed for common shares under certain circumstances) have been excluded from the diluted earnings per share calculation as there was no effect on the amounts for the three and nine months ended September 30, 2020 and 2019, since the limited partners’ share of income would also be added back to net income attributable to common shareholders. The computation of basic and diluted earnings per common share is as follows (in thousands, except share and per share data):
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The unaudited consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. The unaudited financial statements include all adjustments that are necessary, in the opinion of management, to fairly state the consolidated balance sheets, statements of operations and comprehensive income, statements of changes in equity and statements of cash flows. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2019, included in the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2020. The consolidated financial statements include the accounts of the Company, the Operating Partnership and its wholly-owned subsidiaries, and joint ventures in which the Company has a majority voting interest and control. For the controlled subsidiaries that are not wholly-owned, the third-party ownership interest represents a noncontrolling interest, which is presented separately in the consolidated financial statements. The Company also records the real estate interests in two joint ventures in which it holds an indirect 50% interest using the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation.
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Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Given the additional and unforeseen effects from the COVID-19 pandemic, these estimates have become more challenging, and actual results could differ from those estimates.
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an "incurred loss" method to an "expected loss" method. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The Company adopted this new standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The guidance modifies the disclosure requirements for fair value measurements by removing or modifying some of the disclosures, while also adding new disclosures. The Company adopted this new standard on January 1, 2020. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance provides optional expedients for applying GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued at the end of 2021 because of reference rate reform. The guidance is effective immediately and expires on December 31, 2022. Based on the Company's assessment, the adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.
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Management Agreements | Management Agreements As of September 30, 2020, 103 of the Company's hotel properties were operated pursuant to long-term management agreements with initial terms ranging from to 25 years. This number includes 29 hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, or Marriott. Each management company receives a base management fee between 1.75% and 3.5% of hotel revenues. Management agreements that include the benefits of a franchise agreement incur a base management fee between 3.0% and 7.0% of hotel revenues. The management companies are also eligible to receive an incentive management fee if hotel operating income, as defined in the management agreements, exceeds certain thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on its investment in the hotel. Management fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2020, the Company incurred management fee expense of approximately $2.3 million and $10.9 million, respectively. For the three and nine months ended September 30, 2019, the Company incurred management fee expense of approximately $9.0 million and $36.8 million, respectively.
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Franchise Agreements | Franchise Agreements As of September 30, 2020, 73 of the Company’s hotel properties were operated under franchise agreements with initial terms ranging from one to 30 years. This number excludes 29 hotel properties that receive the benefits of a franchise agreement pursuant to management agreements with Hilton, Hyatt, or Marriott. In addition, one hotel is not operated with a hotel brand so it does not have a franchise agreement. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, the Company pays a royalty fee, between 3.0% and 6.0% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs between 1.0% and 4.3% of room revenue. Certain hotels are also charged a royalty fee of 3.0% of food and beverage revenues. Franchise fees are included in management and franchise fee expense in the accompanying consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2020, the Company incurred franchise fee expense of approximately $4.7 million and $20.3 million, respectively. For the three and nine months ended September 30, 2019, the Company incurred franchise fee expense of approximately $17.4 million and $59.6 million, respectively.
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Share-Based Compensation | Share Awards From time to time, the Company may award unvested restricted shares under the 2015 Plan as compensation to officers, employees and non-employee trustees. The issued shares vest over a period of time as determined by the board of trustees at the date of grant. The Company recognizes compensation expense for time-based unvested restricted shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures. Non-employee trustees may also elect to receive unrestricted shares under the 2015 Plan as compensation that would otherwise be paid in cash for their services. The shares issued to non-employee trustees in lieu of cash compensation are unrestricted and include no vesting conditions. The Company recognizes compensation expense for the unrestricted shares issued in lieu of cash compensation on the date of issuance based upon the fair market value of the shares on that date.
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Earnings Per Share | Basic earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period excluding the weighted-average number of unvested restricted shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period, plus any shares that could potentially be outstanding during the period. The potential shares consist of the unvested restricted share grants and unvested performance units, calculated using the treasury stock method. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating shares and are considered in the computation of earnings per share pursuant to the two-class method. If there were any undistributed earnings allocable to the participating shares, they would be deducted from net income attributable to common shareholders used in the basic and diluted earnings per share calculations. The limited partners’ outstanding OP units (which may be redeemed for common shares under certain circumstances) have been excluded from the diluted earnings per share calculation as there was no effect on the amounts for the three and nine months ended September 30, 2020 and 2019, since the limited partners’ share of income would also be added back to net income attributable to common shareholders.
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Investment in Unconsolidated Joint Ventures (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Investment In Unconsolidated Entities | The following table summarizes the components of the Company's investments in unconsolidated joint ventures (in thousands):
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Schedule of Components of Equity In Income (Loss) from Unconsolidated Entities | The following table summarizes the components of the Company's equity in loss from unconsolidated joint ventures (in thousands):
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Sale of Hotel Properties (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property disposed of during period | The following table discloses the hotel properties that were sold during the nine months ended September 30, 2019:
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Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The Company recognized revenue from the following geographic markets (in thousands):
Trade Receivables The Company has historically only experienced de minimis credit losses in hotel-level trade receivables. As of September 30, 2020, the Company reviewed its allowance for doubtful accounts and concluded that it was adequate. Because of the adverse impact of the COVID-19 pandemic, the Company could experience a delay in payment and collections.
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The Company's debt consisted of the following (in thousands):
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Schedule of Senior Notes | The Company's senior unsecured notes are referred to as the "Senior Notes." The Company's Senior Notes consisted of the following (in thousands):
(1)Requires payments of interest only through maturity. (2)The senior unsecured notes include $22.1 million and $25.6 million at September 30, 2020 and December 31, 2019, respectively, related to acquisition related fair value adjustments on the senior unsecured notes. (3)The Company has the option to redeem the senior unsecured notes at a price of 103.0% of face value.
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Schedule of Revolver and Term Loans | The Company's unsecured credit agreements consisted of the following (in thousands):
(1)Interest rate at September 30, 2020 gives effect to interest rate hedges. (2)At September 30, 2020 and December 31, 2019, there was $200.0 million and $600.0 million, respectively, undrawn on the Revolver. The Company also has the ability to extend the maturity date for an additional one year period ending May 2025 if certain conditions are satisfied. (3)Excludes $3.7 million and $3.4 million as of September 30, 2020 and December 31, 2019, respectively, related to deferred financing costs on the Revolver, which are included in prepaid expense and other assets in the accompanying consolidated balance sheets.
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Schedule Of Debt Instrument Covenants | The Revolver and Term Loans are subject to various financial covenants. A summary of the most restrictive covenants is as follows:
(1)Leverage ratio is net indebtedness, as defined in the Revolver and Term Loan agreements, to corporate earnings before interest, taxes, depreciation, and amortization ("EBITDA"), as defined in the Revolver and Term Loan agreements. (2)Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the Revolver and Term Loan agreements as EBITDA less furniture, fixtures and equipment ("FF&E") reserves, to fixed charges, which is generally defined in the Revolver and Term Loan agreements as interest expense, all regularly scheduled principal payments, preferred dividends paid, and cash taxes paid. (3)The Company is not currently required to comply with these covenants, see details below.
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Schedule of mortgage loans | The Company's mortgage loans consisted of the following (in thousands):
(1)The hotels encumbered by the mortgage loan are cross-collateralized. Requires payments of interest only through maturity. (2)Includes $0.3 million and $0.5 million at September 30, 2020 and December 31, 2019, respectively, related to a fair value adjustment on a mortgage loan. (3)Includes $1.0 million and $1.4 million at September 30, 2020 and December 31, 2019, respectively, related to fair value adjustments on the mortgage loans. (4)Includes $0.3 million and $0.4 million at September 30, 2020 and December 31, 2019, respectively, related to a fair value adjustment on the mortgage loan. (5)The mortgage loan provides two one year extension options.
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Schedule of Interest Expense Components | The components of the Company's interest expense consisted of the following (in thousands):
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Derivatives and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest rate swaps | The following interest rate swaps have been designated as cash flow hedges (in thousands):
(1)Effective in November 2020. (2)Effective in January 2021. (3)Effective in September 2021. (4)Effective in April 2021. (5)Effective in July 2021.
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Derivatives Not Designated as Hedging Instruments | The following interest rate swaps have not been designated as hedging instruments (in thousands):
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Fair Value (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The fair value of the Company's debt was as follows (in thousands):
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Schedule of fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis | The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 (in thousands):
The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 (in thousands):
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Equity Incentive Plan (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Performance-Based Units, Vested and Expected to Vest [Table Text Block] | A summary of the performance unit awards is as follows:
(1) In February 2020, following the end of the measurement period, the Company did not meet certain target criterion and no performance units were converted into restricted shares.
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Restricted share awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the unvested restricted shares | A summary of the unvested restricted shares as of September 30, 2020 is as follows:
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Earnings per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted earnings per common share | The computation of basic and diluted earnings per common share is as follows (in thousands, except share and per share data):
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Summary of Significant Accounting Policies (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
joint_venture
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Dec. 31, 2019
USD ($)
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Summary of Significant Accounting Policies | ||
Real Estate Interests, Number of Joint Ventures | joint_venture | 2 | |
Equity Method Investment, Ownership Percentage | 50.00% | |
Operating Lease, Right-of-Use Asset | $ 140,283 | $ 144,358 |
Accounts payable and other liabilities | 205,730 | 183,408 |
Operating Lease, Liability | $ 119,192 | $ 121,154 |
Sale of Hotel Properties (Narrative) (Details) $ in Thousands |
1 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 12, 2019
USD ($)
|
Aug. 14, 2019
USD ($)
hotel
|
Jun. 27, 2019
USD ($)
hotel
|
Jun. 25, 2019
USD ($)
hotel
|
Aug. 31, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
increment
hotel
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from the sale of hotel properties, net | $ 485 | $ 623,575 | |||||
Disposals 2019 [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Hotel properties sold, Number | hotel | 18 | 2 | 21 | 42 | |||
Disposal Group, Number of Transactions | increment | 4 | ||||||
Proceeds from the sale of hotel properties, net | $ 12,700 | $ 175,400 | $ 153,300 | $ 311,900 | $ 653,400 | ||
Gain (Loss) on Disposition of Assets | $ 300 | $ (49,000) | $ (21,500) | $ 44,400 | $ (25,900) |
Debt (Components of Interest Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Debt | ||||
Amortization of deferred financing costs | $ 1,147 | $ 1,116 | $ 3,214 | $ 3,018 |
Gain (Loss) on Interest Rate Derivative Instruments Not Designated as Hedging Instruments | (1,203) | 457 | (18) | 402 |
Unrealized Gain (Loss) on Cash Flow Hedging Instruments | (18) | 402 | ||
Total Interest Expense | 25,984 | 23,333 | 73,591 | 68,632 |
Senior Notes [Member] | ||||
Debt | ||||
Interest expense | 5,942 | 5,954 | 17,825 | 17,842 |
Secured Debt [Member] | ||||
Debt | ||||
Interest expense | 4,368 | 5,001 | 13,483 | 15,575 |
Revolver and Term Loans | ||||
Debt | ||||
Interest expense | $ 15,730 | $ 10,805 | $ 39,087 | $ 31,795 |
Income Taxes (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Minimum percent of adjusted taxable income to be distributed to shareholders to qualify as a REIT | 90.00% | |
Accruals for tax uncertainties | $ 0 | $ 0 |
Commitments and Contingencies (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
property
|
Sep. 30, 2020
USD ($)
property
|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2016
hotel
|
Sep. 30, 2016
hotel
|
|
Loss Contingencies [Line Items] | ||||||
Minimum restricted cash reserve escrows to be maintained as a percentage of the hotel's revenue | 3.00% | |||||
Maximum restricted cash reserve escrows to be maintained as percentage of hotel's revenue | 5.00% | |||||
Restricted cash reserves for future capital expenditures, real estate taxes and insurance | $ 42,686 | $ 42,686 | $ 44,686 | $ 48,610 | ||
Number of Real Estate Properties | 104 | 104 | 29 | |||
NOI Guarantee Termination Payment | $ 36,000 | |||||
Reduction of Management Fee Expense | $ 4,400 | 13,200 | ||||
Severance Costs | 8,000 | 8,200 | ||||
New York City hotels | ||||||
Loss Contingencies [Line Items] | ||||||
Severance Costs | $ 6,700 | $ 6,700 | ||||
InterContinental Hotels Group PLC [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number of Real Estate Properties | hotel | 3 |
Commitments and Contingencies (Management Agreements) (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020
USD ($)
hotel
property
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
hotel
property
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2016
hotel
|
|
Other Commitments | |||||
Number of Hotel Properties Operated under Management Agreements | hotel | 103 | 103 | |||
Number of Real Estate Properties | 104 | 104 | 29 | ||
Minimum | |||||
Other Commitments | |||||
Management Agreement Term | 1 year | ||||
Base Management Fee as Percentage of Hotel Revenues | 1.75% | ||||
Management Agreements which include Franchise Agreement, Base Management Fee as Percentage of Hotel Revenues | 3.00% | ||||
Maximum | |||||
Other Commitments | |||||
Management Agreement Term | 25 years | ||||
Base Management Fee as Percentage of Hotel Revenues | 3.50% | ||||
Management Agreements which include Franchise Agreement, Base Management Fee as Percentage of Hotel Revenues | 7.00% | ||||
Management Service [Member] | |||||
Other Commitments | |||||
Cost of Goods and Services Sold | $ | $ 2.3 | $ 9.0 | $ 10.9 | $ 36.8 |
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