Natali_Mis/iStock via Getty Images By Albert Grosman & Brian Lund, CFA Low-Quality Earners Lead Small Cap Rally Market Overview Small cap stocks experienced whipsaw performance in the second quarter, as April’s “Liberation Day” market decline was swiftly followed by a rally — with the Russell 2000 Index recovering to within 10% of its record November 2024 highs in merely 55 days, driven largely by growth, momentum, high-beta and low-quality stocks. Although small caps rose higher on the broader market ...

During times of turbulence and uncertainty in the markets, many investors turn to dividend-yielding stocks. These are often companies that have high free cash flows and reward shareholders with a high dividend payout.Benzinga readers can review the latest analyst takes on their favorite stocks by visiting Analyst Stock Ratings page. Traders can sort through Benzinga's extensive database of analyst ratings, including by analyst accuracy.Below are the ratings of the most accurate analysts for three high-yield ...

Group 1 - The article focuses on the Real Estate Investment Trusts (REITs) segment of the investment market, highlighting the author's intent to expand knowledge and portfolio in this area [1] - The author emphasizes a long-term investment horizon and a strategy centered around contrarian and deep-value opportunities, particularly in identifying REITs that are currently out-of-favor [1] - The author utilizes fundamental economic insights to assess the intrinsic value of stocks, indicating a methodical approach to investment analysis [1] Group 2 - There is no current position held in RLJ, and the author plans to adjust positions in other REITs before considering an investment in RLJ, requiring at least one more quarter of analysis [3] - The article does not provide any recommendations or advice regarding the suitability of investments for particular investors, emphasizing that past performance is not indicative of future results [3]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's financial statements, management's analysis, market risk disclosures, and internal controls for the reporting period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2025, reflect a slight decrease in total assets and equity, with net income and operating cash flow declining year-over-year due to lower room revenue and a prior-year gain on asset sales [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows a slight decrease in total assets and equity as of June 30, 2025, compared to December 31, 2024 Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$4,822,810** | **$4,883,879** | | Cash and cash equivalents | $373,896 | $409,809 | | Investment in hotel properties, net | $4,214,058 | $4,250,524 | | **Total Liabilities** | **$2,582,575** | **$2,585,602** | | Debt, net | $2,220,768 | $2,220,081 | | **Total Equity** | **$2,240,235** | **$2,298,277** | [Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The income statement indicates a year-over-year decline in total revenues and net income for both Q2 and H1 2025 Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $363,103 | $369,297 | $691,222 | $693,707 | | Net Income | $28,631 | $37,291 | $31,803 | $42,037 | | Net Income Attributable to Common Shareholders | $22,174 | $30,827 | $19,258 | $29,486 | | Diluted EPS | $0.15 | $0.20 | $0.12 | $0.19 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operating activities decreased for the first half of 2025 compared to the prior year Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $117,620 | $134,294 | | Net cash used in investing activities | ($58,186) | ($225,038) | | Net cash used in financing activities | ($91,597) | ($57,369) | | **Net change in cash** | **($32,163)** | **($148,113)** | [Notes to the Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Key notes detail the company's hotel portfolio, recent asset sales, debt refinancing, and capital allocation strategies - As of June 30, 2025, the Company owned a portfolio of **95 hotel properties** with approximately **21,200 rooms** across 23 states and the District of Columbia[36](index=36&type=chunk) - On March 6, 2025, the Company sold the 181-room Courtyard Atlanta Buckhead hotel for a sales price of **$24.3 million**[48](index=48&type=chunk) - In April 2025, the Company refinanced a term loan, increasing it to **$300.0 million** and extending the maturity to April 2028. The incremental **$100.0 million** in proceeds were used to pay off the outstanding balance on the Revolver[57](index=57&type=chunk)[58](index=58&type=chunk) - The company declared cash dividends of **$0.15 per common share** in each of the first and second quarters of 2025, an increase from **$0.10 per share** in the same periods of 2024[82](index=82&type=chunk) - During the first six months of 2025, the Company repurchased approximately **3.1 million common shares** for **$27.2 million**. A new **$250.0 million** share repurchase program was authorized in April 2025[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the year-over-year decline in Q2 2025 revenue and net income to decreased room revenue, while focusing on portfolio enhancement, capital recycling, and maintaining a prudent capital structure through asset sales, debt refinancing, and share repurchases - The company's strategy is to own primarily premium-branded, rooms-oriented, high-margin, focused-service and compact full-service hotels in high-growth urban markets[112](index=112&type=chunk)[113](index=113&type=chunk) - Significant activities in 2025 include selling one hotel for **$24.3 million**, refinancing a term loan to **$300 million**, paying off the **$100 million** Revolver balance, and repurchasing **3.3 million common shares** for **$28.2 million**[116](index=116&type=chunk) Comparable Properties Key Operating Statistics (Q2) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Occupancy | 75.5 % | 76.8 % | | ADR | $205.03 | $206.10 | | RevPAR | $154.90 | $158.27 | Comparable Properties Key Operating Statistics (H1) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Occupancy | 72.4 % | 73.2 % | | ADR | $204.72 | $203.28 | | RevPAR | $148.18 | $148.70 | Reconciliation to Adjusted FFO (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $28,631 | $37,291 | $31,803 | $42,037 | | FFO | $69,216 | $72,105 | $110,945 | $115,625 | | Adjusted FFO | $72,658 | $78,619 | $119,579 | $130,473 | Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $28,631 | $37,291 | $31,803 | $42,037 | | EBITDA | $100,332 | $106,421 | $174,199 | $178,161 | | EBITDAre | $100,710 | $102,875 | $173,256 | $174,615 | | Adjusted EBITDA | $104,008 | $108,971 | $181,602 | $188,563 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, though 72.8% of total indebtedness is fixed or effectively fixed, with a 100 basis point increase potentially decreasing earnings by $6.1 million annually - As of June 30, 2025, **72.8%** of the company's total indebtedness was fixed or effectively fixed after taking into account interest rate swaps[178](index=178&type=chunk) - A **1.00% (100 basis points)** increase in market interest rates on variable rate debt not subject to swaps would decrease future earnings and cash flows by approximately **$6.1 million annually**[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were **effective** as of June 30, 2025[183](index=183&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[184](index=184&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, updated risk factors, equity security sales, and other significant corporate information [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material litigation beyond routine claims arising in the ordinary course of business - Other than routine litigation arising out of the ordinary course of business, the Company is **not presently subject to any material litigation**[185](index=185&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report - There have been **no material changes** to the risk factors previously disclosed in the Company's Annual Report[186](index=186&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell unregistered securities but repurchased **947,262 shares** during Q2 2025, primarily under publicly announced programs Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Program | | :--- | :--- | :--- | :--- | | April 2025 | 556,869 | $7.06 | 496,021 | | May 2025 | 209,646 | $7.39 | 209,646 | | June 2025 | 180,747 | $7.31 | 180,747 | | **Total** | **947,262** | | **886,414** | [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) On August 4, 2025, the President and CEO, Leslie D. Hale, was appointed interim principal financial officer - On August 4, 2025, the Board of Trustees appointed Leslie D. Hale, the President and CEO, to serve as the Company's **interim principal financial officer**[192](index=192&type=chunk)

Financial Data and Key Metrics Changes - The company reported a RevPAR decline of 2.1% in Q2 2025, with occupancy at 75.5% and an average daily rate (ADR) of $205, translating to a 1.6% decline in occupancy and a 0.5% drop in ADR [18][19][21] - Adjusted EBITDA for the quarter was $104 million, with adjusted FFO per diluted share at $0.48 [21][24] - The company achieved hotel EBITDA of $113 million and hotel EBITDA margins of 31.1% [21] Business Line Data and Key Metrics Changes - Urban hotels outperformed the overall portfolio, with RevPAR growth of 20% in San Francisco and 10% growth in completed conversions [6][11][19] - Non-room revenues grew by 1.5%, indicating success in ROI initiatives despite lower occupancy [10][19] - Leisure revenues increased by 5%, driven by events and holiday shifts, while urban leisure segments achieved 7% revenue growth [7][9] Market Data and Key Metrics Changes - The company gained 140 basis points of market share, outperforming the industry despite RevPAR constraints [6] - Northern California showed ongoing recovery, supported by a positive local business climate and citywide events [6][15] - The company anticipates challenges in the third quarter due to tough comparisons and ongoing renovations, with preliminary July RevPAR tracking down by mid-single digits year-over-year [14][25] Company Strategy and Development Direction - The company is focused on driving earnings growth through disciplined expense management and capital allocation initiatives [5][12] - Key initiatives include repositioning assets, addressing near-term maturities, and opportunistically recycling capital into share repurchases [5][12] - The company expects to benefit from an improving economic backdrop in 2026, with a favorable geographic exposure and urban footprint [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed mixed outlook for the second half of the year, citing uncertainty in the macro environment and shorter booking windows [13][25] - The company anticipates a soft third quarter but expects tailwinds in the fourth quarter from favorable holiday shifts and improved group travel [14][25] - Management remains confident in the portfolio's ability to create long-term value despite near-term volatility [18] Other Important Information - The company executed $6 million in share repurchases during the quarter, maintaining a disciplined approach to capital allocation [12][24] - The balance sheet remains strong, with $600 million available under the undrawn corporate revolver and nearly $1 billion in total liquidity [22][23] Q&A Session Summary Question: Booking pace tracking into August and September - Management noted that the third quarter is expected to be the weakest due to a layering effect of demand and holiday shifts impacting bookings [28][30] Question: Differences between urban leisure and resort leisure - Urban leisure outperformed with a 7% increase, while international leisure showed softness [34][35] Question: Share repurchases strategy - Management indicated a programmatic approach to share repurchases, influenced by fundamentals and leverage considerations [37][38] Question: Update on Nashville asset performance - Nashville asset reported a 14% increase in Q2, benefiting from its location and recent conversion [42][45] Question: Transactions environment outlook - Management observed low transaction volume but noted improved sentiment and potential for more deals in the coming months [46][48] Question: Leisure discounting trends - Demand remains stable, but rate sensitivity is leading to increased use of discount booking channels [52] Question: Expense outlook for the second half of the year - Management expects about 2% growth in expenses, with ongoing cost control measures in place [57][60] Question: Expectations for flat margins from RevPAR perspective - Management indicated a normalized relationship between revenue and expenses, with a focus on maintaining margins [64] Question: Changes in booking channels - Direct bookings through brand.com are growing, while OTAs are slightly up due to leisure softness [66][68]

Company Overview - As of June 30, 2025, the company owns 94 properties with 20,982 hotel rooms[3] - The company's market capitalization is $1.1 billion, with a total enterprise value (TEV) of $3.3 billion and total capitalization of $3.7 billion[3] - The share price is $7.28 with 151.2 million total shares and units outstanding[3] - The company has $0.3 billion in preferred equity and $1.9 billion in net debt outstanding[3] Debt Maturity - 31% of the company's debt, amounting to $181 million, is maturing in 2025[6] - 10% of the company's debt, amounting to $25 million, is maturing in 2026[6] - 46% of the company's debt, amounting to $225 million, is maturing in 2027[6] - Total debt outstanding is $2.2 billion[6] Financial Performance (Q2 2025) - Total revenue for comparable hotels is $363.085 million[8] - Comparable Hotel EBITDA is $113.023 million with a 31.1% margin[8] - Occupancy is 75.5% with an Average Daily Rate (ADR) of $205.27 and Room Revenue per Available Room (RevPAR) of $155.08[8] Financial Performance (Q2 2025 TTM) - Comparable Hotel EBITDA is $389.3 million[10, 15] - Net income is $58.0 million[15] - EBITDA is $340.7 million[15] - Adjusted EBITDA is $354.7 million[15]

RLJ Lodging Trust (RLJ -0.34%), an urban-centric real estate investment trust (REIT) focused on premium- branded hotels, released its second quarter 2025 earnings on August 7, 2025. The company reported adjusted funds from operations (FFO) per diluted share of $0.48, which was significantly ahead of the analyst estimate of $0.11 (non-GAAP). Revenue (GAAP) was $363.1 million, slightly below the expected $365.3 million (GAAP) and down from $369.3 million (GAAP) in the same period last year. Despite the earnin ...

Core Insights - RLJ Lodging reported revenue of $363.1 million for the quarter ended June 2025, reflecting a year-over-year decline of 1.7% and a surprise of -0.64% compared to the Zacks Consensus Estimate of $365.45 million [1] - The company achieved an EPS of $0.48, which is an increase from $0.20 a year ago, resulting in an EPS surprise of +4.35% against the consensus estimate of $0.46 [1] - Over the past month, RLJ Lodging shares returned -3.8%, underperforming the Zacks S&P 500 composite's +1.2% change, and currently holds a Zacks Rank 4 (Sell) [3] Revenue Breakdown - Other revenue was reported at $25.07 million, slightly below the estimated $25.14 million, showing a year-over-year increase of +1.1% [4] - Food and beverage revenue reached $41.93 million, exceeding the average estimate of $40.88 million, with a year-over-year change of +2.7% [4] - Room revenue was $296.1 million, slightly below the average estimate of $297.35 million, representing a year-over-year decline of -2.5% [4] - Net Earnings Per Share (Diluted) was reported at $0.15, surpassing the average estimate of $0.12 [4]

Group 1 - RLJ Lodging reported quarterly funds from operations (FFO) of $0.48 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, but down from $0.51 per share a year ago, representing an FFO surprise of +4.35% [1] - The company posted revenues of $363.1 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.64%, compared to year-ago revenues of $369.3 million [2] - RLJ Lodging has surpassed consensus FFO estimates four times over the last four quarters and topped consensus revenue estimates two times during the same period [2] Group 2 - The stock has underperformed, losing about 28.2% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The company's FFO outlook is crucial for investors, as it includes current consensus FFO expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus FFO estimate for the coming quarter is $0.36 on revenues of $343.97 million, and for the current fiscal year, it is $1.45 on revenues of $1.37 billion [7] Group 3 - The Zacks Industry Rank indicates that the REIT and Equity Trust - Other industry is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - The estimate revisions trend for RLJ Lodging was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

[Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) RLJ Lodging Trust's Q2 2025 performance exceeded expectations, driven by portfolio resilience and cost control, despite slight RevPAR declines, while maintaining strong liquidity and active capital returns [Second Quarter Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) RLJ Lodging Trust reported Q2 2025 results that exceeded expectations, demonstrating portfolio resilience and disciplined cost control, advancing renovations, addressing near-term debt maturities, and repurchasing shares - Management highlighted the portfolio's **resilience**, the ramp-up of conversions, and **disciplined cost controls** as key drivers for exceeding Q2 expectations, anticipating a **softer Q3** but seeing **positive tailwinds for Q4** from a more favorable calendar and strong citywide events[3](index=3&type=chunk) Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Net Income per share | $0.15 | | Adjusted FFO per diluted share | $0.48 | | Adjusted EBITDA | $104.0 million | | Comparable RevPAR | $155.08 (-2.1% YoY) | | Shares Repurchased | 0.8 million | [Financial and Operating Results](index=2&type=section&id=Financial%20and%20Operating%20Results) In Q2 2025, RLJ Lodging Trust experienced a slight decline in key performance indicators compared to the prior year, with total revenue decreasing by 1.7% to $363.1 million and Comparable RevPAR falling by 2.1% Financial and Operating Highlights (Q2 & YTD 2025 vs 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | Change | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Comparable RevPAR** | $155.08 | $158.44 | (2.1)% | $148.19 | $148.71 | (0.3)% | | **Total Revenue** | $363,103 | $369,297 | (1.7)% | $691,222 | $693,707 | (0.4)% | | **Net Income** | $28,631 | $37,291 | (23.2)% | $31,803 | $42,037 | (24.3)% | | **Comparable Hotel EBITDA** | $113,023 | $117,975 | (4.2)% | $198,320 | $206,312 | (3.9)% | | **Adjusted EBITDA** | $104,008 | $108,971 | (4.6)% | $181,602 | $188,563 | (3.7)% | | **Adjusted FFO Per Share** | $0.48 | $0.51 | (5.9)% | $0.79 | $0.84 | (6.0)% | [Capital Allocation](index=2&type=section&id=Capital%20Allocation) The company actively returned capital to shareholders through both share repurchases and dividends, repurchasing 0.8 million shares for $6.0 million in Q2 and declaring a quarterly cash dividend of $0.15 per common share - During the second quarter, the Company repurchased **0.8 million common shares** for approximately **$6.0 million**, with **3.2 million shares** repurchased year-to-date for **$28.0 million**, leaving **$246.3 million** remaining under the share repurchase program[7](index=7&type=chunk) - The Board of Trustees declared a quarterly cash dividend of **$0.15 per common share** and a dividend of **$0.4875 on its Series A Preferred Shares**[10](index=10&type=chunk) [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, the company maintained a strong liquidity position with approximately $974 million, including $374 million in cash and $600 million available on its revolver, successfully addressing near-term debt maturities - As of June 30, 2025, the Company had approximately **$974 million of total liquidity**, comprised of **$374 million of unrestricted cash** and **$600 million available under its revolving credit facility**[8](index=8&type=chunk) - The company refinanced its **$200.0 million term loan**, upsizing it to **$300.0 million** and extending the maturity to **April 2030**, using the incremental proceeds to repay the outstanding balance on the Revolver[9](index=9&type=chunk) [2025 Outlook](index=3&type=section&id=2025%20Outlook) RLJ Lodging Trust updated its full-year 2025 outlook, anticipating the lower end of guidance due to Q3 softness and macroeconomic uncertainty, excluding future capital activities [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) RLJ Lodging Trust updated its full-year 2025 outlook, stating that the low end of its guidance ranges is now the most likely outcome, reflecting softer-than-anticipated third-quarter results and limited visibility due to macroeconomic uncertainty - The Company now expects the **low end of its guidance range** to be the most likely outcome, citing a softer than anticipated third quarter and macroeconomic uncertainty[11](index=11&type=chunk) FY 2025 Outlook (in millions) | Metric | FY 2025 Range | | :--- | :--- | | Comparable RevPAR Growth | -1.0% to +1.0% | | Comparable Hotel EBITDA | $365.5 to $395.5 | | Adjusted EBITDA | $332.5 to $362.5 | | Adjusted FFO per diluted share | $1.38 to $1.58 | - Additional full-year 2025 outlook assumptions include: Net interest expense: **$94.0 million - $96.0 million**; Cash corporate G&A: **$34.0 million - $35.0 million**; Renovation capital expenditures: **$80.0 million - $100.0 million**; Diluted weighted average shares: **151.5 million**[15](index=15&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section provides key financial statements, including consolidated balance sheets, statements of operations, and a detailed debt summary, offering a comprehensive view of the company's financial position and performance [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, RLJ's total assets stood at $4.82 billion, compared to $4.88 billion at the end of 2024, with total liabilities stable at $2.58 billion and cash decreasing to $373.9 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $373,896 | $409,809 | | Total assets | $4,822,810 | $4,883,879 | | Debt, net | $2,220,768 | $2,220,081 | | Total liabilities | $2,582,575 | $2,585,602 | | Total equity | $2,240,235 | $2,298,277 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, total revenues were $363.1 million, a decrease from $369.3 million in the same period of 2024, with net income attributable to common shareholders declining to $22.2 million Key Income Statement Items (in thousands, except per share data) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues | $363,103 | $369,297 | | Total operating expenses | $310,167 | $312,069 | | Net income | $28,631 | $37,291 | | Net income attributable to common shareholders | $22,174 | $30,827 | | Net income per share - diluted | $0.15 | $0.20 | [Consolidated Debt Summary](index=13&type=section&id=Consolidated%20Debt%20Summary) As of June 30, 2025, the company's total debt outstanding was approximately $2.23 billion with a weighted average interest rate of 4.53%, consisting of both fixed and floating rate instruments with staggered maturities Debt Summary as of June 30, 2025 | Debt Type | Balance (in thousands) | Weighted Avg. Rate | | :--- | :--- | :--- | | Mortgage Debt | $206,000 | 4.74% | | Corporate Debt | $2,025,000 | 4.51% | | **Total Debt** | **$2,231,000** | **4.53%** | - The company had **$600.0 million of borrowing capacity** on its Revolver, which was undrawn as of June 30, 2025[50](index=50&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles key non-GAAP financial measures, including FFO, EBITDA, and Hotel EBITDA, providing insights into the company's operational performance beyond GAAP metrics [Definitions of Non-GAAP Measures](index=5&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company utilizes several non-GAAP financial measures, including FFO, Adjusted FFO, EBITDA, EBITDAre, and Hotel EBITDA, to supplement its GAAP results and provide useful insights into operating performance - Funds from Operations (FFO) is calculated per NAREIT standards and is considered helpful in evaluating a real estate company's operations by excluding gains/losses from property sales and real estate depreciation[21](index=21&type=chunk) - Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is used to evaluate operating performance by removing the impact of a company's capital structure and asset base[23](index=23&type=chunk) - Hotel EBITDA is used to provide a clearer understanding of the operating results over which individual hotels have direct control by excluding corporate-level expenses and certain non-cash items[27](index=27&type=chunk) [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The report provides detailed reconciliations from GAAP Net Income to key non-GAAP metrics, with Q2 2025 Net Income of $28.6 million reconciled to Adjusted FFO of $72.7 million and Adjusted EBITDA of $104.0 million Reconciliation of Net Income to Adjusted FFO (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $28,631 | | Depreciation and amortization | $46,363 | | Other adjustments | ($2,336) | | **FFO** | **$69,216** | | Transaction costs, non-cash items, etc. | $3,442 | | **Adjusted FFO** | **$72,658** | Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $28,631 | | Depreciation and amortization | $46,363 | | Interest expense, net | $24,515 | | Other adjustments | $1,123 | | **EBITDA** | **$100,332** | | Adjustments for EBITDAre & other items | $3,676 | | **Adjusted EBITDA** | **$104,008** | [Reconciliation of Non-GAAP Measures - Full-Year Outlook](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures%20-%20Full-Year%20Outlook) The company provides a reconciliation of its full-year 2025 net income guidance to its Adjusted EBITDA and Adjusted FFO guidance, with the low end of net income ($36.8M) reconciling to Adjusted EBITDA of $332.5M and Adjusted FFO of $209.5M FY 2025 Outlook Reconciliation: Net Income to Adjusted EBITDA (in millions) | Line Item | Low End | High End | | :--- | :--- | :--- | | Net income | $36.8 | $64.8 | | D&A, Interest, Taxes, etc. | $281.4 | $283.4 | | **EBITDA** | **$318.2** | **$348.2** | | Adjustments | $14.3 | $14.3 | | **Adjusted EBITDA** | **$332.5** | **$362.5** | FY 2025 Outlook Reconciliation: Net Income to Adjusted FFO (in millions) | Line Item | Low End | High End | | :--- | :--- | :--- | | Net income | $36.8 | $64.8 | | D&A, Preferred Dividends, etc. | $160.2 | $160.2 | | **FFO** | **$197.0** | **$225.0** | | Adjustments | $12.5 | $14.5 | | **Adjusted FFO** | **$209.5** | **$239.5** |