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Chesapeake Lodging Trust Reports Third Quarter Results; Pro Forma RevPAR Increased 8.9% and Pro Forma Adjusted Hotel EBITDA

  Chesapeake Lodging Trust Reports Third Quarter Results; Pro Forma RevPAR
  Increased 8.9% and Pro Forma Adjusted Hotel EBITDA Margin Increased 200
  Basis Points

Business Wire

ANNAPOLIS, Md. -- November 01, 2012

Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust
(REIT), reported today its financial results for the quarter ended September
30, 2012.

HIGHLIGHTS

  *Pro Forma RevPAR – 8.9% increase for comparable 10-hotel portfolio over
    the same period in 2011.
  *Pro Forma Adjusted Hotel EBITDA Margin – 200 basis point increase for
    comparable 10-hotel portfolio over the same period in 2011.
  *Acquisitions  – Acquired the 520-room W Chicago – Lakeshore in Chicago,
    Illinois for $126.0 million and the 429-room Hyatt Regency Mission Bay Spa
    and Marina in San Diego, California for $62.0 million; Subsequent to
    quarter end, acquired the 222-room The Hotel Minneapolis in Minneapolis,
    Minnesota for $46.0 million.
  *Renovations  – Successfully completed the comprehensive renovation and
    repositioning of the Hotel Adagio; Subsequent to quarter end, completed
    the 35-room expansion at the W Chicago – City Center.
  *Equity offerings  – Successfully completed a $125 million preferred share
    offering and $138 million common share offering.
  *Financings  – Closed on $130 million of secured financings; Subsequent to
    quarter end, amended our revolving credit facility, increasing facility
    size, reducing cost of borrowings, and extending the initial term.

“We are very pleased with the strong performance of our hotel portfolio and
the significant progress we made on various fronts in the third quarter,” said
James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive
Officer. “The favorable execution and timing of the preferred and common share
offerings allowed us to continue to take advantage of opportunities by
acquiring three hotels we believe possess significant upside. Furthermore, the
completion of our transformational renovation at the Hotel Adagio has given it
a unique and sophisticated style and we are already starting to see promising
results.”

“Our recent financing activity, including the amendment to our revolving
credit facility, strengthened our balance sheet by allowing us to extend
maturities, take further advantage of the attractive interest rate environment
by lowering our cost of borrowing, and adding flexibility and additional
capacity for future acquisition opportunities,” said Douglas W. Vicari,
Chesapeake Lodging Trust’s Executive Vice President and Chief Financial
Officer.

CONSOLIDATED FINANCIAL RESULTS

The following is a summary of the consolidated financial results for the three
and nine months ended September 30, 2012 (in millions, except per share
amounts):

                                                        
                                     Three months ended    Nine months ended
                                     September 30,         September 30,
                                     2012^(1)  2011^(2)   2012^(3)  2011^(4)
                                                                      
Total revenue                        $  75.9    $  51.8    $ 193.2    $ 116.1
                                                                      
Net income available to common       $  7.0     $  5.7     $ 15.3     $ 6.1
shareholders
Net income per diluted share         $  0.21    $  0.18    $ 0.47     $ 0.21
                                                                      
FFO available to common              $  14.2    $  11.0    $ 35.6     $ 18.0
shareholders
FFO per diluted share                $  0.43    $  0.35    $ 1.10     $ 0.63
                                                                      
AFFO available to common             $  16.8    $  11.5    $ 38.7     $ 22.7
shareholders
AFFO per diluted share               $  0.51    $  0.36    $ 1.20     $ 0.79
                                                                      
Corporate EBITDA                     $  22.3    $  15.3    $ 53.8     $ 26.1
                                                                      
Adjusted Corporate EBITDA            $  24.8    $  15.8    $ 56.9     $ 30.8

   
(1)  Includes results of operations of 12 hotels for the full period and two
      hotels for part of the period.
(2)   Includes results of operations of nine hotels for the full period and
      one hotel for part of the period.
(3)   Includes results of operations of 11 hotels for the full period and
      three hotels for part of the period.
(4)   Includes results of operations of five hotels for the full period and
      five hotels for part of the period.
      

HOTEL OPERATING RESULTS

Management assesses the operating performance of its hotels irrespective of
the hotel owner during the periods compared. Included in the following table
are comparisons, on a pro forma basis, of occupancy, average daily rate (ADR),
room revenue per available room (RevPAR), Adjusted Hotel EBITDA, and Adjusted
Hotel EBITDA Margin, the key operating metrics that management uses to assess
the performance of its hotels. The key operating metrics include the hotel
operating results of 10 of the Trust’s 14 hotels owned as of September 30,
2012. The key operating metrics do not include operating results for the
Holiday Inn New York City Midtown – 31^st Street, as the hotel opened for
business on January 19, 2012, the Hotel Adagio, as the hotel was under
renovation during the period, and the W Chicago – Lakeshore and the Hyatt
Regency Mission Bay Spa and Marina, as both hotels were acquired during the
period. The following is a summary of the key operating metrics for the three
and nine months ended September 30, 2012 (in thousands, except pro forma ADR
and pro forma RevPAR):

                                                                  
            Three months ended                 Nine months ended
            September 30,                      September 30,
             2012       2011      Change    2012       2011      Change
                                                                         
Pro forma     85.4   %     84.3   %   110        80.6   %     78.5   %   210
occupancy                             bps                                bps
Pro forma   $ 193.04     $ 179.47     7.6  %   $ 187.79     $ 175.16     7.2  %
ADR
Pro forma   $ 164.85     $ 151.38     8.9  %   $ 151.28     $ 137.54     10.0 %
RevPAR
                                                                         
Pro forma
Adjusted    $ 23,192     $ 20,378     13.8 %   $ 59,296     $ 50,479     17.5 %
Hotel
EBITDA
Pro forma
Adjusted                              200                                260
Hotel         37.2   %     35.2   %   bps        34.3   %     31.7   %   bps
EBITDA
Margin
                                                                         

Funds from operations (FFO), Adjusted FFO (AFFO), net income before interest,
income taxes, and depreciation and amortization (Corporate EBITDA), Adjusted
Corporate EBITDA, Hotel EBITDA, Adjusted Hotel EBITDA and Adjusted Hotel
EBITDA Margin are non-GAAP financial measures within the meaning of the rules
of the Securities and Exchange Commission. See the discussion included in this
press release for information regarding these non-GAAP financial measures.

ACQUISITION ACTIVITY

On August 21, 2012, the Trust acquired the 520-room W Chicago - Lakeshore
located in Chicago, Illinois for approximately $124.9 million, including
acquired working capital. The Trust funded the acquisition with available cash
on hand and a borrowing under its revolving credit facility. The Trust entered
into a long-term management agreement with Starwood Hotels & Resorts
Worldwide, Inc. to continue operating the hotel under the W flag.

On September 7, 2012, the Trust acquired the 429-room Hyatt Regency Mission
Bay Spa and Marina located in San Diego, California for approximately $59.8
million, including acquired working capital. The Trust funded the acquisition
with available cash on hand and a borrowing under its revolving credit
facility. The Trust assumed the existing management agreement with Hyatt
Hotels Corporation.

EQUITY OFFERINGS

On July 17, 2012, the Trust completed an underwritten public offering of
5,000,000 of its 7.75% Series A Cumulative Redeemable Preferred Shares,
including 600,000 shares sold pursuant to the underwriters’ exercise of their
over-allotment option. The Trust generated net proceeds of approximately
$120.6 million after deducting underwriting fees and offering costs. The Trust
used the net proceeds of the offering to repay outstanding borrowings under
the Trust’s revolving credit facility and for general business purposes.

On September 18, 2012, the Trust completed an underwritten public offering of
7,475,000 common shares, including 975,000 shares sold pursuant to the
underwriters’ exercise of their option to purchase additional shares. The
Trust generated net proceeds of approximately $132.6 million after deducting
underwriting fees and offering costs. The Trust used the net proceeds of the
offering to repay outstanding borrowings under the Trust’s revolving credit
facility and for general business purposes.

FINANCING ACTIVITY

On July 3, 2012, the Trust closed on a $60.0 million two-year term loan. The
loan was provided byWells Fargo Bank, N.A., and subject to certain customary
conditions, provides for three one-year extensions. At the initial
closing,$25.0 millionwas advanced by the lender and is secured by the
122-roomHoliday Inn New York City Midtown– 31^stStreet. The remaining$35.0
millionis expected to be advanced by the lender upon closing on the
acquisition of the Hyatt Place New York Midtown South and satisfaction of
certain customary closing conditions. Following the subsequent closing, the
entire$60.0million principal amount of the loan will be secured by both
hotels. The loan bears interest equal to LIBOR, plus 3.25%. Contemporaneous
with the closing of the term loan, the Trust entered into an interest rate
swap to effectively fix the interest rate on the initial$25.0 millionadvance
for the original two-year term at 3.75% per annum. Net proceeds from the
initial advance under the loan were used to repay outstanding borrowings under
the Trust’s revolving credit facility and for general business purposes.

On July 27, 2012, the Trust closed on a $70.0 million fixed-rate mortgage
loan. The loan is secured by the 613-room Denver Marriott City Center and was
provided by Western National Life Insurance Company. The loan has a term of 30
years, but is callable by the lender after 10 years, and the Trust expects the
lender to call the loan at that time. The loan carries a fixed interest rate
of 4.90% per annum, with principal and interest payments based on a 30-year
amortization. Net proceeds from the loan were used to repay the remaining
outstanding borrowings under the Trust’s revolving credit facility and for
general business purposes.

DIVIDENDS

On July 13, 2012, the Trust paid a dividend of $0.22 per share to its common
shareholders of record as of June 30, 2012. On August 13, 2012, the Trust
declared dividends in the amounts of $0.22 per share payable to its common
shareholders and $0.4736 per share payable to its preferred shareholders, both
of record as of September 28, 2012. Both dividends were paid on October 15,
2012.

POST-QUARTER ACTIVITY

On October 25, 2012, the Trust amended its credit agreement by (1) increasing
the maximum size of the secured revolving credit facility, (2) lowering the
interest rate spread over LIBOR charged on outstanding borrowings, and (3)
extending the initial term. The amended credit agreement increases the maximum
amount the Trust may borrow under the secured revolving credit facility from
$200.0 million to $250.0 million, and also provides for the possibility of
further future increases, up to a maximum of $375.0 million, in accordance
with certain terms. The $50.0 million increase resulted from $25.0 million
commitments provided by two new banks, PNC Bank, N.A. and TD Bank, N.A. The
actual amount that the Trust can borrow under the secured revolving credit
facility continues to be based on the value of the Trust's hotels included in
the borrowing base, as defined in the amended credit agreement. The interest
rate spread over LIBOR for borrowings under the secured revolving credit
facility was reduced by 100 basis points to LIBOR, plus 1.75% - 2.75% (the
spread over LIBOR based on the Trust’s consolidated leverage ratio). The
initial term of the amended credit agreement will now expire in March 2016,
but the term may be extended for one year subject to satisfaction of certain
customary conditions. The amended credit agreement effected no other
significant changes to the financial covenants, including the leverage and
coverage ratios and minimum tangible net worth requirement, or other business
terms of the secured revolving credit facility, as compared to those in effect
prior to the amendment.

On October 30, 2012, the Trust acquired the 222-room The Hotel Minneapolis
located in Minneapolis, Minnesota for approximately $46.3 million, including
acquired working capital. The Trust funded the acquisition with a borrowing
under its revolving credit facility. The Trust entered into a management
agreement with a subsidiary of HEI Hotels & Resorts to continue operating the
hotel under the Autograph Collection by Marriott flag.

As of October 31, 2012, after taking into consideration the recent preferred
and common share offerings and financing activity, the acquisitions of the W
Chicago – Lakeshore, the Hyatt Regency Mission Bay Spa and Marina and The
Hotel Minneapolis, and the pending acquisition of the Hyatt Place New York
Midtown South, the Trust had approximately $100 million to $125 million of
remaining investment capacity based on its targeted leverage levels.

2012 OUTLOOK

The Trust is updating its 2012 outlook to incorporate current operating trends
and fundamentals, the recent common share offering and financing activity, the
acquisition of The Hotel Minneapolis, and the pending acquisition of the Hyatt
Place New York Midtown South expected at the end of the fourth quarter 2012
(in millions, except per share amounts):

                                                        
                                     Updated Guidance      Previous Guidance
                                     Low       High       Low       High
Pro forma RevPAR increase over         8.75 %     9.25 %     8.5  %     9.5  %
2011^(1)
Net income available to common
shareholders excluding amounts       $ 19.8     $ 20.6     $ 15.8     $ 18.2
attributable to unvested
time-based awards
Adjusted Hotel EBITDA                $ 91.0     $ 92.0     $ 88.9     $ 91.9
AFFO per diluted share               $ 1.57     $ 1.60     $ 1.58     $ 1.66

   
(1)  For the comparable 10-hotel portfolio.
      

NON-GAAP FINANCIAL MEASURES

The Trust reports the following seven non-GAAP financial measures that it
believes are useful to investors as key measures of its operating performance:
(1)FFO, (2)AFFO, (3)Corporate EBITDA, (4) Adjusted Corporate EBITDA, (5)
Hotel EBITDA, (6) Adjusted Hotel EBITDA and (7) Adjusted Hotel EBITDA Margin.
A reconciliation of these non-GAAP financial measures is included in the
accompanying financial tables.

FFO – The Trust calculates FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts (NAREIT), which defines
FFO as net income (calculated in accordance with GAAP), excluding depreciation
and amortization, impairment charges, gains (losses) from sales of real
estate, the cumulative effect of changes in accounting principles, and
adjustments for unconsolidated partnerships and joint ventures. Historical
cost accounting for real estate assets implicitly assumes that the value of
real estate assets diminishes predictably over time. Since real estate values
instead have historically risen or fallen with market conditions, most
industry investors consider presentations of operating results for real estate
companies that use historical cost accounting to be insufficient by
themselves. By excluding the effect of depreciation and amortization and gains
(losses) from sales of real estate, both of which are based on historical cost
accounting and which may be of lesser significance in evaluating current
performance, the Trust believes that FFO provides investors a useful financial
measure to evaluate the Trust’s operating performance.

AFFO – The Trust further adjusts FFO for certain additional recurring and
non-recurring items that are not in NAREIT’s definition of FFO. Specifically,
the Trust adjusts for hotel acquisition costs and non-cash amortization of
intangible assets and unfavorable contract liabilities. The Trust believes
that AFFO provides investors with another financial measure of its operating
performance that provides for greater comparability of its core operating
results between periods.

Corporate EBITDA – Corporate EBITDA is defined as net income before interest,
income taxes, and depreciation and amortization. The Trust believes that
Corporate EBITDA provides investors a useful financial measure to evaluate the
Trust’s operating performance, excluding the impact of the Trust’s capital
structure (primarily interest expense) and the Trust’s asset base (primarily
depreciation and amortization).

Adjusted Corporate EBITDA – The Trust further adjusts Corporate EBITDA for
certain additional recurring and non-recurring items. Specifically, the Trust
adjusts for hotel acquisition costs and non-cash amortization of intangible
assets and unfavorable contract liabilities. The Trust believes that Adjusted
Corporate EBITDA provides investors with another financial measure of its
operating performance that provides for greater comparability of its core
operating results between periods.

Hotel EBITDA – Hotel EBITDA is defined as total revenues less total hotel
operating expenses. The Trust believes that Hotel EBITDA provides investors a
useful financial measure to evaluate the Trust’s hotel operating performance.

Adjusted Hotel EBITDA – The Trust further adjusts Hotel EBITDA for certain
additional recurring and non-recurring items. Specifically, the Trust adjusts
for non-cash amortization of intangible assets and unfavorable contract
liabilities. The Trust believes that Adjusted Hotel EBITDA provides investors
with another useful financial measure to evaluate the Trust’s hotel operating
performance.

Adjusted Hotel EBITDA Margin – Adjusted Hotel EBITDA Margin is defined as
Adjusted Hotel EBITDA as a percentage of total revenues. The Trust believes
that Adjusted Hotel EBITDA Margin provides investors another useful financial
measure to evaluate the Trust’s hotel operating performance.

CONFERENCE CALL

The Trust will host a conference call on Thursday, November 1, 2012 at 10:00
a.m. Eastern Time to discuss its financial results. Interested individuals are
invited to listen to the call by dialing (877) 683-0303 (U.S./Canadian
callers) or (706) 643-5037 (International callers). The conference call ID is
41151490. A simultaneous webcast of the call will be available on the Trust’s
website at www.chesapeakelodgingtrust.com. It is recommended that participants
call or log on 10 minutes ahead of the scheduled start time to ensure proper
connection.

A replay of the conference call will be available two hours after the live
call until midnight on November 8, 2012. To access the replay, dial (855)
859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers).
The conference call ID is 41151490. A webcast replay and transcript of the
conference call will be archived and available on the Trust’s website for 12
months.

ABOUT CHESAPEAKE LODGING TRUST

Chesapeake Lodging Trust is a self-advised lodging real estate investment
trust (REIT) focused on investments primarily in upper-upscale hotels in major
business and convention markets and, on a selective basis, premium
select-service hotels in urban settings or unique locations in the United
States. The Trust owns 15 hotels with an aggregate of 4,722 rooms in seven
states and the District of Columbia. Additional information can be found on
the Trust’s website at www.chesapeakelodgingtrust.com.

Note: This press release contains forward-looking statements within the
meaning of federal securities regulations. These forward-looking statements
are identified by their use of terms and phrases such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,”
“predict,” “project,” “will,” “continue” and other similar terms and phrases,
including references to assumptions and forecasts, such as the Trust’s
expectations regarding the future Hotel EBITDA and Adjusted Hotel EBITDA of
its existing and to-be-acquired hotels and the Trust’s 2012 outlook. Such
forward-looking statements include, but are not limited to, the expectation
that the acquisition described will be consummated and within the anticipated
timetable. Forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other factors which may
cause the actual results to differ materially from those anticipated at the
time the forward-looking statements are made. These risks include, but are not
limited to: the Trust’s ability to complete acquisitions; the Trust’s ability
to continue to satisfy complex rules in order for it to remain a REIT for
federal income tax purposes; and other risks and uncertainties associated with
the Trust’s business described in its filings with the SEC. Although the Trust
believes the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that the
expectations will be attained or that any deviation will not be material. All
information in this release is as of November 1, 2012, and the Trust
undertakes no obligation to update any forward-looking statement to conform
the statement to actual results or changes in the Trust’s expectations, except
as required by law.

                                                               
CHESAPEAKE LODGING TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
                                                                  
                                                                  
                                                  September 30,   December 31,
                                                   2012           2011    
                                                  (unaudited)
                                                                  
ASSETS
Property and equipment, net                       $ 1,063,935     $  879,224
Intangible assets, net                              39,532           39,982
Cash and cash equivalents                           27,838           20,960
Restricted cash                                     21,569           15,034
Accounts receivable, net                            15,031           6,302
Prepaid expenses and other assets                   14,120           4,370
Deferred financing costs, net                      5,616          5,266   
Total assets                                      $ 1,187,641    $  971,138 
                                                                  
                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt                                    $ 356,033       $  407,736
Accounts payable and accrued expenses               38,242           21,475
Other liabilities                                  26,204         21,798  
Total liabilities                                  420,479        451,009 
                                                                  
Commitments and contingencies
                                                                  
Preferred shares, $.01 par; 100,000,000 shares
authorized; Series A Cumulative Redeemable
Preferred Shares; 5,000,000 shares and no           50               -
shares issued and outstanding, respectively
($127,368 liquidation preference)
Common shares, $.01 par value; 400,000,000
shares authorized; 39,610,393 shares and            396              322
32,161,620 shares issued and outstanding,
respectively
Additional paid-in capital                          798,645          543,861
Cumulative dividends in excess of net income        (30,853   )      (22,924 )
Accumulated other comprehensive loss               (1,076    )     (1,130  )
Total shareholders' equity                         767,162        520,129 
                                                                  
Total liabilities and shareholders' equity        $ 1,187,641    $  971,138 

                                                                 
CHESAPEAKE
LODGING TRUST
CONSOLIDATED
STATEMENTS OF
OPERATIONS
(in thousands,
except share and
per share data)
(unaudited)
                                                                      
                                                                      
                   Three Months Ended                Nine Months Ended
                   September 30,                     September 30,
                    2012           2011           2012           2011       
                                                                      
REVENUE
Rooms              $ 58,632         $ 40,610         $ 148,394        $ 87,763
Food and             14,488           9,305            38,299           24,392
beverage
Other               2,740          1,865          6,483          3,906      
Total revenue       75,860         51,780         193,176        116,061    
                                                                      
EXPENSES
Hotel operating
expenses:
Rooms                12,620           9,117            33,297           20,548
Food and             10,368           7,267            27,750           18,458
beverage
Other direct         1,357            814              3,193            1,886
Indirect            23,640         16,054         63,240         36,912     
Total hotel
operating            47,985           33,252           127,480          77,804
expenses
Depreciation and     7,215            5,319            20,422           12,070
amortization
Air rights
contract             130              130              390              390
amortization
Corporate
general and
administrative:
Share-based          783              827              2,348            2,286
compensation
Hotel
acquisition          2,474            353              2,917            4,270
costs
Other               2,227          1,900          6,258          5,228      
Total operating     60,814         41,781         159,815        102,048    
expenses
                                                                      
Operating income     15,046           9,999            33,361           14,013
                                                                      
Interest income      74               16               96               140
Interest expense     (5,425     )     (4,103     )     (15,615    )     (8,005     )
Loss on early
extinguishment      -              (208       )    -              (208       )
of debt
                                                                      
Income before        9,695            5,704            17,842           5,940
income taxes
                                                                      
Income tax
benefit             (662       )    23             (552       )    155        
(expense)
                                                                      
Net income           9,033            5,727            17,290           6,095
                                                                      
Preferred share     (1,991     )    -              (1,991     )    -          
dividends
                                                                      
Net income
available to       $ 7,042         $ 5,727         $ 15,299        $ 6,095      
common
shareholders
                                                                      
                                                                      
EARNINGS PER
SHARE:
                                                                      
Net income
available to       $ 7,042          $ 5,727          $ 15,299         $ 6,095
common
shareholders
Less: Dividends
declared on
unvested             (34        )     (61        )     (102       )     (181       )
time-based
awards
Less:
Undistributed
earnings
allocated to        -              -              -              -          
unvested
time-based
awards
Net income
available to
common
shareholders
excluding          $ 7,008         $ 5,666         $ 15,197        $ 5,914      
amounts
attributable to
unvested
time-based
awards
                                                                      
Net income per
common share -     $ 0.21           $ 0.18           $ 0.47           $ 0.21
basic and
diluted
                                                                      
Weighted-average
number of common
shares               32,971,594       31,794,886       32,254,777       28,611,438
outstanding -
basic and
diluted

                                                              
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                                                                  
                                               Nine Months Ended September 30,
                                                 2012            2011     
                                                                  
Cash flows from operating activities:
Net income                                     $  17,290          $ 6,095
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization                     20,422            12,070
Air rights contract amortization                  390               390
Ground lease asset amortization                   60                -
Deferred financing costs amortization             1,488             1,711
Premium on mortgage loan amortization             (158      )       (53      )
Unfavorable contract liability amortization       (294      )       -
Loss on early extinguishment of debt              -                 208
Share-based compensation                          2,348             2,286
Changes in assets and liabilities:
Accounts receivable, net                          (7,177    )       (2,802   )
Prepaid expenses and other assets                 (345      )       (1,386   )
Accounts payable and accrued expenses             10,057            6,596
Other liabilities                                19              (9       )
Net cash provided by operating activities        44,100          25,106   
                                                                  
Cash flows from investing activities:
Acquisition of hotels, net of cash acquired       (184,702  )       (308,616 )
Deposits on hotel acquisitions                    (2,000    )       (7,000   )
Improvements and additions to hotels              (17,530   )       (1,473   )
Investment in hotel construction loan             (6,478    )       -
Change in restricted cash                        (5,160    )      (7,877   )
Net cash used in investing activities            (215,870  )      (324,966 )
                                                                  
Cash flows from financing activities:
Proceeds from sale of common shares, net of       132,756           230,291
underwriting fees
Proceeds from sale of preferred shares, net       121,062           -
of underwriting fees
Payment of offering costs related to sale of      (637      )       (481     )
common and preferred shares
Net borrowings (repayments) under revolving       (145,000  )       55,000
credit facility
Proceeds from issuance of mortgage debt           95,000            225,000
Principal prepayment on mortgage debt             -                 (60,000  )
Scheduled principal payments on mortgage          (1,545    )       (295     )
debt
Payment of deferred financing costs               (1,838    )       (3,037   )
Purchase of interest rate cap                     -                 (262     )
Payment of dividends to common shareholders       (20,529   )       (16,516  )
Repurchase of common shares                      (621      )      (209     )
Net cash provided by financing activities        178,648         429,491  
Net increase in cash                              6,878             129,631
Cash and cash equivalents, beginning of          20,960          10,551   
period
Cash and cash equivalents, end of period       $  27,838         $ 140,182  


CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share data)
(unaudited)

The following table reconciles net income available to common shareholders
excluding amounts attributable to unvested time-based awards to FFO and AFFO
available to common shareholders for the three and nine months ended September
30, 2012 and 2011:

                                                    
                            Three Months Ended         Nine Months Ended
                            September 30,              September 30,
                            2012         2011         2012         2011
                                                                     
Net income available to
common shareholders
excluding
amounts attributable to     $  7,008      $  5,666     $  15,197     $  5,914
unvested time-based awards
Add:      Depreciation and    7,215        5,319       20,422       12,070
          amortization
FFO available to common        14,223        10,985       35,619        17,984
shareholders
                                                                     
Add:      Hotel acquisition    2,474         353          2,917         4,270
          costs
          Non-cash            60           138         181          409
          amortization^(1)
AFFO available to common    $  16,757     $  11,476    $  38,717     $  22,663
shareholders
                                                                     
FFO per common share -      $  0.43       $  0.35      $  1.10       $  0.63
basic and diluted
                                                                     
AFFO per common share -     $  0.51       $  0.36      $  1.20       $  0.79
basic and diluted

   
(1)  Includes non-cash amortization of ground lease asset, deferred franchise
      costs, unfavorable contract liability, and air rights contract.


The following table reconciles net income to Corporate EBITDA and Adjusted
Corporate EBITDA for the three and nine months ended September 30, 2012 and
2011:

                                                    
                          Three Months Ended           Nine Months Ended
                          September 30,                September 30,
                            2012        2011       2012      2011   
                                                                    
Net income                $  9,033        $ 5,727      $ 17,290     $ 6,095
Add:    Depreciation and     7,215          5,319        20,422       12,070
        amortization
        Interest expense     5,425          4,103        15,615       8,005
        Loss on early
        extinguishment of    -              208          -            208
        debt
        Income tax           662            (23    )     552          (155   )
        expense (benefit)
Less:   Interest income     (74     )     (16    )    (96    )    (140   )
Corporate EBITDA             22,261         15,318       53,783       26,083
                                                                    
Add:    Hotel acquisition    2,474          353          2,917        4,270
        costs
        Non-cash            60           138        181        409    
        amortization^(1)
Adjusted Corporate EBITDA $  24,795      $ 15,809    $ 56,881    $ 30,762 

   
(1)  Includes non-cash amortization of ground lease asset, deferred franchise
      costs, unfavorable contract liability, and air rights contract.


The following table calculates pro forma Hotel EBITDA, Adjusted Hotel EBITDA
and Adjusted Hotel EBITDA Margin for the Trust's comparable 10-hotel portfolio
for the three and nine months ended September 30, 2012 and 2011:

                                                 
                           Three Months Ended        Nine Months Ended
                           September 30,             September 30,
                            2012      2011       2012       2011    
                                                                   
Total revenue              $ 62,377     $ 57,832     $ 172,885     $ 159,329
Less: Total hotel           39,116     37,463     113,380     108,870 
operating expenses
Hotel EBITDA                 23,261       20,369       59,505        50,459
                                                                   
Less:   Non-cash            (69    )    9          (209    )    20      
        amortization^(1)
Adjusted Hotel EBITDA      $ 23,192    $ 20,378    $ 59,296     $ 50,479  
                                                                   
Adjusted Hotel EBITDA        37.2   %     35.2   %     34.3    %     31.7    %
Margin

   
(1)  Includes non-cash amortization of ground lease asset, deferred franchise
      costs, and unfavorable contract liability.


The following table calculates forecasted Hotel EBITDA and Adjusted Hotel
EBITDA for the year ending December 31, 2012:

                                                     
                                       Year Ending December 31, 2012
                                       Low               High
                                                         
Total revenue                          $  277,750        $ 279,250
Less: Total hotel operating expenses     186,470        186,970 
Hotel EBITDA                              91,280           92,280
                                                         
Less:Non-cash amortization^(1)           (280     )      (280    )
Adjusted Hotel EBITDA                  $  91,000        $ 92,000  

   
(1)  Includes non-cash amortization of ground lease asset, deferred franchise
      costs, and unfavorable contract liability.


The following table reconciles forecasted net income available to common
shareholders excluding amounts attributable to unvested time-based awards to
FFO and AFFO available to common shareholders for the year ending December 31,
2012:

                                               
                                                 Year Ending December 31, 2012
                                                 Low             High
                                                                  
Net income available to common shareholders
excluding amounts
attributable to unvested time-based awards       $   19,770       $   20,640
Add:      Depreciation and amortization             30,290          30,290
FFO available to common shareholders                 50,060           50,930
                                                                  
Add:      Hotel acquisition costs                    3,270            3,270
          Non-cash amortization^(1)                 240             240
AFFO available to common shareholders            $   53,570       $   54,440
                                                                  
FFO per diluted common share                     $   1.47         $   1.50
                                                                  
AFFO per diluted common share                    $   1.57         $   1.60
                                                                  
Weighted-average number of diluted common            34,049           34,049
shares outstanding

   
(1)  Includes non-cash amortization of ground lease asset, deferred franchise
      costs, unfavorable contract liability, and air rights contract.

                                                            
CHESAPEAKE LODGING
TRUST
CURRENT HOTEL
PORTFOLIO
   
                                                                 
                                                  Purchase
                                                  Price
Hotel                   Location          Rooms   (in            Acquisition
                                                  millions)      Date
                                                                 
1    Hyatt Regency      Boston, MA        502     $  112.00      March 18,
     Boston                                                      2010
2    Hilton Checkers    Los Angeles, CA   188        46.00       June 1, 2010
     Los Angeles
     Courtyard
3    Anaheim at         Anaheim, CA       153        25.00       July 30, 2010
     Disneyland
     Resort
4    Boston Marriott    Newton, MA        430        77.25       July 30, 2010
     Newton
5    Le Meridien San    San Francisco,    360        143.00      December 15,
     Francisco          CA                                       2010
     Homewood Suites
6    Seattle            Seattle, WA       195        53.00       May 2, 2011
     Convention
     Center
7    W Chicago - City   Chicago, IL       403        128.80      May 10, 2011
     Center
     Hotel Indigo San
8    Diego Gaslamp      San Diego, CA     210        55.50       June 17, 2011
     Quarter
     Courtyard
9    Washington         Washington, DC    204        68.00       June 30, 2011
     Capitol
     Hill/Navy Yard
10   Hotel Adagio       San Francisco,    171        42.25       July 8, 2011
                        CA
11   Denver Marriott    Denver, CO        613        119.00      October 3,
     City Center                                                 2011
     Holiday Inn New
12   York City          New York, NY      122        52.20       December 22,
     Midtown - 31st                                              2011
     Street
13   W Chicago -        Chicago, IL       520        126.00      August 21,
     Lakeshore                                                   2012
     Hyatt Regency                                               September 7,
14   Mission Bay Spa    San Diego, CA     429        62.00       2012
     and Marina
15   The Hotel          Minneapolis, MN   222        46.00       October 30,
     Minneapolis                                                 2012
                                                 
                                          4,722   $  1,156.00

Contact:

Chesapeake Lodging Trust
Douglas W. Vicari, 410-972-4142
 
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