Pebblebrook Hotel Trust Reports First Quarter 2013 Results

  Pebblebrook Hotel Trust Reports First Quarter 2013 Results

  Same-Property RevPAR Increased 8.5 Percent; Adjusted FFO Per Diluted Share
                              Rose 81.8 Percent

Business Wire

BETHESDA, Md. -- April 25, 2013

Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today reported results for
the first quarter ended March 31, 2013. The Company’s results include the
following:

Sofitel Philadelphia Guest Room (Photo: Pebblebrook Hotel Trust)

Sofitel Philadelphia Guest Room (Photo: Pebblebrook Hotel Trust)

                                            
                                               First Quarter
                                               2013            2012
                                               ($ in millions, except

                                               per share and RevPAR data)
                                               
Net income (loss) to common shareholders       ($4.9)          ($7.2)
Net income (loss) per diluted share            ($0.08)           ($0.14)
                                                                 
Same-Property RevPAR^(1)                       $159.96           $147.37
Same-Property EBITDA^(1)                       $25.7             $22.4
Same-Property EBITDA growth rate               14.4%
Same-Property EBITDA Margin^(1)                21.0%             19.4%
                                                                 
Adjusted EBITDA^(1)                            $22.0             $14.0
Adjusted EBITDA growth rate                    57.6%
                                                                 
Adjusted FFO^(1)                               $12.0             $5.5
Adjusted FFO per diluted share^(1)             $0.20             $0.11
Adjusted FFO per diluted share growth rate     81.8%
                                                                 

^(1) See tables later in this press release for a description of same-property
information (formerly pro forma) and reconciliations from net income (loss) to
non-GAAP financial measures, including earnings before interest, taxes,
depreciation and amortization ("EBITDA"), Adjusted EBITDA, Funds from
Operations ("FFO"), FFO per share, Adjusted FFO and Adjusted FFO per share.

For the details as to which hotels are included in Same-Property RevPAR, ADR,
Occupancy, Revenues, Expenses, EBITDA and EBITDA Margins appearing in the
table above and elsewhere in this press release, refer to the Same-Property
Inclusion Reference Table later in this press release.

“The first quarter represented another quarter of strong results for
Pebblebrook, as both the top and bottom line results and growth rates exceeded
our outlook,” said Jon E. Bortz, Chairman, President and Chief Executive
Officer of Pebblebrook Hotel Trust. “Our hotels continued to benefit from
healthy demand growth in business transient travel, as well as robust leisure
and international inbound travel. In addition, we experienced tremendous gains
from our hotels that have recently completed property renovations, including
Sheraton Delfina, Hotel Monaco Seattle, the Argonaut Hotel and Mondrian Los
Angeles. We expect these favorable trends will continue throughout 2013 as
fundamentals in the hotel industry remain very attractive. This strength
should allow us to capitalize on opportunities to increase room rates as a
result of our renovated and repositioned portfolio and the historically high
occupancies in the majority of our markets.”

First Quarter Highlights

  *Same-Property RevPAR: Same-Property revenue per available room
    (“Same-Property RevPAR”) in the first quarter of 2013 increased 8.5
    percent over the same period of 2012 to $159.96. Same-Property average
    daily rate (“Same-Property ADR”) grew 3.4 percent from the first quarter
    of 2012 to $201.89. Same-Property Occupancy rose 5.0 percent to a robust
    79.2 percent.
  *Same-Property EBITDA: The Company’s hotels generated $25.7 million of
    Same-Property EBITDA for the quarter ended March 31, 2013, climbing 14.4
    percent compared with the same period of 2012. Same-Property Revenues
    increased 5.9 percent, while Same-Property Expenses rose 3.8 percent. As a
    result, Same-Property EBITDA Margin grew to 21.0 percent for the quarter
    ended March 31, 2013, representing an increase of 157 basis points as
    compared to the same period last year.
  *Adjusted EBITDA: The Company’s Adjusted EBITDA increased to $22.0 million
    from $14.0 million in the prior year period, an increase of $8.0 million,
    or 57.6 percent.
  *Adjusted FFO: The Company’s Adjusted FFO climbed to $12.0 million from
    $5.5 million in the prior year period, an increase of 119.5 percent.
  *Dividends: On March 15, 2013, the Company declared a regular quarterly
    cash dividend of $0.16 per share on its common shares (an increase of 33
    percent from the prior quarterly dividend of $0.12 per share), a regular
    quarterly cash dividend of $0.4921875 per share on its 7.875 percent
    Series A Cumulative Redeemable Preferred Shares, a regular quarterly cash
    dividend of $0.50 per share on its 8.0 percent Series B Cumulative
    Redeemable Preferred Shares and a partial quarterly cash dividend of
    $0.121875 per share on its 6.50 percent Series C Cumulative Redeemable
    Preferred Shares.

“We were able to increase Hotel EBITDA 14.4 percent over the prior year period
and improve operating margins by 157 basis points during the quarter, despite
the significant negative impact from renovations at several of our hotels,”
added Mr. Bortz. “We continue to benefit from our strategy of investing
primarily in stronger urban markets in major gateway cities. In addition,
we’re experiencing extremely positive results following our property
renovations and repositioning programs that we completed in 2011 and 2012 and
through the execution of our asset management and best practice initiatives.
We expect to see substantial improvements in our operating profitability and
cash flow as we implement previously identified improvements and identify new
opportunities in 2013 and beyond that will benefit future years.”

Capital Reinvestment

During the first quarter, the Company invested $17.0 million in capital
improvements throughout its portfolio. The Company’s capital investments
included $6.0 million at Hotel Zetta (formerly Hotel Milano), $2.1 million at
the Sofitel Philadelphia and $0.8 million at the Affinia 50.

In March 2013, the Company completed a comprehensive renovation, repositioning
and expansion of Hotel Zetta, which included the repositioning of the hotel as
a four diamond quality hotel, as well as creating eight additional guest
rooms.

“The guest response from the launch of Hotel Zetta in San Francisco has been
fabulous,” noted Mr. Bortz. “We’re very excited about the potential of this
unique hotel in San Francisco’s growing South of Market area as it ramps up
over this year and next year.”

In January 2013, the Company commenced a $4.5 million refurbishment of the
Sofitel Philadelphia guest rooms and corridors, which it completed in April
2013.

Also in January, the Company, along with its joint venture partner, commenced
an $18.0 to $20.0 million comprehensive renovation, reconfiguration and
expansion of the Affinia 50, which includes renovating the guest rooms,
corridors, lobby, public areas and exterior. The reconfiguration of the hotel
will increase the number of guest rooms by almost 20 percent, from 210 to 251.
This project is on schedule and on budget and is expected to be substantially
complete by the fourth quarter of 2013. The Company expects to fund its 49
percent pro rata interest of the total project costs with available cash.

In addition to its capital reinvestment programs, the Company continues to
implement a comprehensive array of asset management best practices,
initiatives and operating efficiencies throughout its portfolio to increase
hotel revenues and reduce operating expenses in an effort to continue its
strong growth in Same-Property EBITDA and Same-Property EBITDA Margins. Since
its first hotel acquisition in 2010, the Company has identified approximately
$15.8 million of annualized best practices and asset management opportunities
throughout its portfolio that it has either implemented or is in the process
of implementing.

Acquisitions

On January 29, 2013, the Company acquired the Embassy Suites San Diego Bay –
Downtown for $112.5 million. The 337-suite, urban, upper upscale, full service
hotel is located in downtown San Diego, California.

“We’re excited about the acquisition of the Embassy Suites San Diego Bay –
Downtown and the ability to further expand our presence in the highly
desirable downtown San Diego market,” said Mr. Bortz. “Working with our new
manager, HEI Hotels, we’re identifying revenue opportunities as well as
implementing best practices and expense savings measures. We’re very
encouraged with the noteworthy upside at this hotel.”

Since its initial public offering in December 2009, the Company has acquired
26 properties, including its joint venture with Denihan Hospitality Group,
which owns six upper upscale hotels (the “Manhattan Collection”) in New York,
New York, totaling $2.1 billion of invested capital.

Capital Markets

During the first quarter of 2013 the Company closed an underwritten public
offering of 3.6 million shares of its 6.50 percent Series C Cumulative
Redeemable Preferred Shares, resulting in net proceeds of $87.1 million.

“We are thrilled with the strong execution of our preferred equity raise
combined with our recent debt originations,” commented Raymond D. Martz, Chief
Financial Officer of Pebblebrook Hotel Trust. “This has lowered our overall
cost of capital while providing additional capital for future acquisitions.”

Balance Sheet

As of March 31, 2013, the Company had $537.8 million in consolidated debt and
$200.9 million in unconsolidated, non-recourse, secured debt at
weighted-average interest rates of 4.4 percent and 3.7 percent, respectively.
The Company’s total combined pro rata weighted-average interest rate is 4.2
percent. The Company had $100.0 million outstanding in the form of an
unsecured term loan and no outstanding balance on its $200.0 million senior
unsecured revolving credit facility. As of March 31, 2013, the Company had
$128.8 million of consolidated cash, cash equivalents and restricted cash and
$15.5 million of unconsolidated cash, cash equivalents and restricted cash.
The unconsolidated debt, cash, cash equivalents and restricted cash amounts
represent the Company’s 49 percent pro rata interest in the Manhattan
Collection.

On March 31, 2013, as defined in the Company’s credit agreement, the Company’s
fixed charge coverage ratio was 2.2 times and total net debt to trailing
12-month corporate EBITDA was 4.5 times. The Company’s total debt to total
assets ratio was 33 percent. Excluding its interest in the off-balance sheet
Manhattan Collection, the Company’s fixed charge coverage ratio was 2.3 times,
net debt to trailing 12-month corporate EBITDA was 3.9 times and total debt to
total assets ratio was 30 percent.

Subsequent Events

On April 4, 2013, the joint venture owning the Manhattan Collection
successfully completed a new $50.0 million interest-only, non-recourse,
secured loan at a fixed annual interest rate of 3.14 percent and a term of
five years. The loan is collateralized by a first mortgage on the 242-room
Affinia Dumont in New York, New York.

On April 11, 2013, the underwriters exercised their full over-allotment option
to purchase an additional 400,000 shares of the Company’s 6.50% Series C
Cumulative Redeemable Preferred Shares, resulting in additional net proceeds
of approximately $9.6 million.

2013 Outlook

The Company's outlook for 2013, which assumes no additional acquisitions,
incorporates the Company’s recently completed capital markets activities and
assumes continued improvement in economic activity, positive business travel
trends and other significant assumptions, is as follows:

                                                           
                                             2013 Outlook
                                             Low                  High
                                             ($ and shares/units in millions,

                                             except per share and RevPAR data)
Net income                                   $40.3                  $43.3
Net income per diluted share                 $0.66                  $0.70
                                                                    
Adjusted EBITDA                              $146.0                 $149.0
                                                                    
Adjusted FFO                                 $85.5                  $88.5
Adjusted FFO per diluted share               $1.39                  $1.44
                                                                    
This 2013 outlook is based, in part, on the following estimates and
assumptions:
                                                                    
U.S. GDP growth rate                         1.75%                  2.25%
U.S. Hotel Industry RevPAR growth rate       5.0%                   6.5%
                                                                    
Same-Property RevPAR                         $183.00                $186.00
Same-Property RevPAR growth rate             5.5%                   7.0%
                                                                    
Same-Property EBITDA                         $158.0                 $162.0
Same-Property EBITDA Margin                  28.0%                  28.5%
Same-Property EBITDA Margin growth rate      75 bps                 125 bps
                                                                    
Corporate cash general and                   $11.0                  $11.5
administrative expenses
Corporate non-cash general and               $3.0                   $3.5
administrative expenses
                                                                    
Total capital investments related to
renovations, capital maintenance and         $55.0                  $65.0
return on investment projects
                                                                    
Weighted-average fully diluted shares        61.5                   61.5
and units

The Company’s outlook for the second quarter of 2013 is as follows:
                                                                    
                                             Second Quarter 2013 Outlook
                                             Low                    High
                                             ($ and shares/units in millions,

                                             except per share and RevPAR data)
Same-Property RevPAR                         $194                   $196
Same-Property RevPAR growth rate             5.0%                   6.0%
                                                                    
Same-Property EBITDA                         $43.3                  $45.3
Same-Property EBITDA Margin                  30.0%                  30.5%
Same-Property EBITDA Margin growth rate      25 bps                 75 bps
                                                                    
Adjusted EBITDA                              $40.0                  $42.0
                                                                    
Adjusted FFO                                 $23.5                  $25.5
Adjusted FFO per diluted share               $0.38                  $0.41
                                                                    
Weighted-average fully diluted shares        61.5                   61.5
and units
                                                                    

The Company’s 2013 and Second Quarter Outlooks reflects the Company’s 49
percent pro rata interest in the Manhattan Collection.

The Company’s estimates and assumptions for Same-Property RevPAR,
Same-Property RevPAR growth rate, Same-Property EBITDA, Same-Property EBITDA
Margin and Same-Property EBITDA Margin growth rate for 2013 include the hotels
owned as of March 31, 2013 as if they had been owned by the Company for the
entire year of 2013, except for Hotel Zetta, which the Company expects to
include after it has owned the hotel for one full year, starting in the second
quarter of 2013. The Company’s 2013 outlook assumes no additional acquisitions
beyond the hotels the Company owned as of March 31, 2013.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on
Friday, April 26, 2013 at 9:00 AM EDT. To participate in the conference call,
please dial (888) 206-4824 approximately ten minutes before the call begins.
Additionally, a live webcast of the conference call will be available through
the Company’s website. To access the webcast, log on to
http://www.pebblebrookhotels.com ten minutes prior to the conference call. A
replay of the conference call webcast will be archived and available online
through the Investor Relations section of http://www.pebblebrookhotels.com.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is a publicly traded real estate investment trust
(“REIT”) organized to opportunistically acquire and invest primarily in upper
upscale, full-service hotels located in urban markets in major gateway cities.
The Company owns 26 hotels, including 20 wholly owned hotels with a total of
4,960 guest rooms and a 49% joint venture interest in six hotels with a total
of 1,733 guest rooms. The Company owns, or has an ownership interest in,
hotels located in ten states and the District of Columbia, across 16 markets:
Los Angeles, California; San Diego, California; San Francisco, California;
Santa Monica, California; West Hollywood, California; Miami, Florida;
Buckhead, Georgia; Bethesda, Maryland; Boston, Massachusetts; Minneapolis,
Minnesota; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania;
Columbia River Gorge, Washington; Seattle, Washington; and Washington, DC. For
more information, please visit www.pebblebrookhotels.com.

This press release contains certain “forward-looking statements” made pursuant
to the safe harbor provisions of the Private Securities Reform Act of 1995.
Forward-looking statements are generally identifiable by use of
forward-looking terminology such as “may,” “will,” “should,” “potential,”
“intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,”
“believe,” “could,” “project,” “predict,” “forecast,” “continue,” “assume,”
“plan,” references to “outlook” or other similar words or expressions.
Forward-looking statements are based on certain assumptions and can include
future expectations, future plans and strategies, financial and operating
projections and forecasts and other forward-looking information and estimates.
Examples of forward-looking statements include the following: projections and
forecasts of U.S. GDP growth, U.S. hotel industry RevPAR growth, the Company’s
net income, FFO, EBITDA, Adjusted FFO, Adjusted EBITDA, RevPAR, EBITDA Margin
and EBITDA Margin growth, and the Company’s expenses, share count or other
financial items; descriptions of the Company’s plans or objectives for future
operations, acquisitions or services; forecasts of the Company’s future
economic performance and its share of future markets; forecasts of hotel
industry performance; and descriptions of assumptions underlying or relating
to any of the foregoing expectations including assumptions regarding the
timing of their occurrence. These forward-looking statements are subject to
various risks and uncertainties, many of which are beyond the Company’s
control, which could cause actual results to differ materially from such
statements. These risks and uncertainties include, but are not limited to, the
state of the U.S. economy and the supply of hotel properties, and other
factors as are described in greater detail in the Company’s filings with the
Securities and Exchange Commission, including, without limitation, the
Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
Unless legally required, the Company disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.

For further information about the Company’s business and financial results,
please refer to the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Risk Factors” sections of the
Company’s SEC filings, including, but not limited to, its Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained
at the Investor Relations section of the Company’s website at
www.pebblebrookhotels.com.

All information in this press release is as of April 25, 2013. The Company
undertakes no duty to update the statements in this press release to conform
the statements to actual results or changes in the Company’s expectations.

  For additional information or to receive press releases via email, please
               visit our website at www.pebblebrookhotels.com.


Pebblebrook Hotel Trust
Consolidated Balance Sheets
($ in thousands)


                                        March 31, 2013   December 31, 2012
                                          (Unaudited)
ASSETS
Assets:
Investment in hotel properties, net       $  1,535,458       $   1,417,229
Investment in joint venture                  276,378             283,011
Ground lease asset, net                      10,228              10,283
Cash and cash equivalents                    115,633             85,900
Restricted cash                              13,152              12,034
Hotel receivables (net of allowance
for doubtful accounts of $116 and            20,278              13,463
$28, respectively)
Deferred financing costs, net                5,646               5,753
Prepaid expenses and other assets           18,955            18,489     
Total assets                              $  1,995,728      $   1,846,162  
                                                                            
                                                                            
LIABILITIES AND EQUITY
                                                                            
Liabilities:
Senior unsecured revolving credit         $  -               $   -
facility
Term loan                                    100,000             100,000
Mortgage debt (including mortgage
loan premium of $6,866 and $2,498,           437,837             368,508
respectively)
Accounts payable and accrued expenses        48,031              47,364
Advance deposits                             7,724               4,596
Accrued interest                             1,876               1,328
Distribution payable                        13,984            11,274     
Total liabilities                            609,452             533,070
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial
interest, $.01 par value (liquidation
preference of $315,000 and $225,000
at March 31, 2013 and December 31,
2012), 100,000,000 shares authorized;        126                 90
12,600,000 shares issued and
outstanding at March 31, 2013 and
9,000,000 issued and outstanding at
December 31, 2012
Common shares of beneficial interest,
$.01 par value, 500,000,000 shares
authorized; 61,007,735 issued and            610                 610
outstanding at March 31, 2013 and
60,955,090 issued and outstanding at
December 31, 2012
Additional paid-in capital                   1,449,797           1,362,349
Accumulated other comprehensive              (195      )         (300       )
income (loss)
Distributions in excess of retained         (64,539   )        (49,798    )
earnings
Total shareholders' equity                  1,385,799         1,312,951  
Non-controlling interests                   477               141        
Total equity                                1,386,276         1,313,092  
Total liabilities and equity              $  1,995,728      $   1,846,162  
                                                                            


Pebblebrook Hotel Trust
Consolidated Statement of Operations
($ in thousands, except per share data)
Unaudited

                                                           
                                             Three months ended

                                             March 31,
                                             2013               2012
                                                                             
Revenues:
Hotel operating revenues:
Room                                         $ 67,139           $ 46,855
Food and beverage                              31,163             25,524
Other operating                               6,612            5,095      
Total revenues                               $ 104,914         $ 77,474     
                                                                             
Expenses:
Hotel operating expenses:
Room                                         $ 18,858           $ 13,493
Food and beverage                              24,058             19,703
Other direct                                   3,276              2,751
Other indirect                                28,852           22,146     
Total hotel operating expenses                 75,044             58,093
Depreciation and amortization                  13,211             9,689
Real estate taxes, personal property           5,591              4,007
taxes and property insurance
Ground rent                                    922                420
General and administrative                     4,339              3,600
Hotel acquisition costs                       920              238        
Total operating expenses                       100,027            76,047
Operating income                               4,887              1,427
Interest income                                634                6
Interest expense                               (5,458     )       (3,257     )
Other                                          -                  -
Equity in earnings (loss) of joint            (2,907     )      (3,596     )
venture
Income (loss) before income taxes              (2,844     )       (5,420     )
Income tax (expense) benefit                  2,598            2,583      
Net income (loss)                              (246       )       (2,837     )
Net income (loss) attributable to             2                (46        )
non-controlling interests
Net income (loss) attributable to the          (248       )       (2,791     )
Company
Distributions to preferred shareholders       (4,668     )      (4,456     )
Net income (loss) attributable to common     $ (4,916     )     $ (7,247     )
shareholders
                                                                             
                                                                             
Net income per share available to common     $ (0.08      )     $ (0.14      )
shareholders, basic and diluted
                                                                             
Weighted-average number of common              60,996,196         51,009,904
shares, basic
Weighted-average number of common              60,996,196         51,009,904
shares, diluted
                                                                             

                                                           
Pebblebrook Hotel Trust
Reconciliation of Net Income (Loss) to FFO, EBITDA, Adjusted FFO and Adjusted
EBITDA
($ in thousands, except per share data)
(Unaudited)

                                                                             
                                             Three months ended

                                             March 31,
                                             2013               2012
                                                                             
Net income (loss)                            $ (246       )     $ (2,837     )
Adjustments:
Depreciation and amortization                  13,169             9,651
Depreciation and amortization from joint      2,606            2,427      
venture
FFO                                          $ 15,529          $ 9,241      
Distribution to preferred shareholders       $ (4,668     )     $ (4,456     )
FFO available to common share and unit       $ 10,861          $ 4,785      
holders
Hotel acquisition costs                        920                238
Ground lease amortization                      22                 54
Amortization of LTIP units                     395                395
Management contract transition costs           197                -
Interest expense adjustment for above         (382       )      -          
market loan
Adjusted FFO available to common share       $ 12,013          $ 5,472      
and unit holders
                                                                             
FFO per common share - basic                 $ 0.18             $ 0.09
FFO per common share - diluted               $ 0.18             $ 0.09
Adjusted FFO per common share - basic        $ 0.20             $ 0.11
Adjusted FFO per common share - diluted      $ 0.20             $ 0.11
                                                                             
Weighted-average number of basic common        61,377,305         51,939,003
shares and units
Weighted-average number of fully diluted       61,507,435         51,994,380
common shares and units
                                                                             
                                             
                                             Three months ended

                                             March 31,
                                             2013               2012
                                                                             
Net income (loss)                            $ (246       )     $ (2,837     )
Adjustments:
Interest expense                               5,458              3,257
Interest expense from joint venture            2,021              3,313
Income tax expense (benefit)                   (2,598     )       (2,583     )
Depreciation and amortization                  13,211             9,689
Depreciation and amortization from joint      2,606            2,427      
venture
EBITDA                                       $ 20,452          $ 13,266     
Hotel acquisition costs                        920                238
Ground lease amortization                      22                 54
Amortization of LTIP units                     395                395
Management contract transition costs          197              -          
Adjusted EBITDA                              $ 21,986          $ 13,953     
                                                                             

To supplement the Company’s consolidated financial statements presented in
accordance with U.S. generally accepted accounting principles ("GAAP"), this
press release includes certain non-GAAP financial measures as defined under
Securities and Exchange Commission (SEC) Rules.

These measures are not in accordance with, or an alternative to, measures
prepared in accordance with GAAP and may be different from similarly titled
non-GAAP measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with the Company’s results of operations determined
in accordance with GAAP.

Funds from Operations - Funds from operations (“FFO”) represents net income
(computed in accordance with GAAP), plus real estate-related depreciation and
amortization and after adjustments for unconsolidated partnerships. The
Company considers FFO a useful measure of performance for an equity REIT
because it facilitates an understanding of the operating performance of its
properties without giving effect to real estate depreciation and amortization,
which assume that the value of real estate assets diminishes predictably over
time. Since real estate values have historically risen or fallen with market
conditions, the Company believes that FFO provides a meaningful indication of
its performance. The Company also considers FFO an appropriate performance
measure given its wide use by investors and analysts. The Company computes FFO
in accordance with standards established by the Board of Governors of NAREIT
in its March 1995 White Paper (as amended in November 1999 and April 2002),
which may differ from the methodology for calculating FFO utilized by other
equity REITs and, accordingly, may not be comparable to that of other REITs.
Further, FFO does not represent amounts available for management’s
discretionary use because of needed capital replacement or expansion, debt
service obligations or other commitments and uncertainties, nor is it
indicative of funds available to fund the Company’s cash needs, including its
ability to make distributions. The Company presents FFO per diluted share
calculations that are based on the outstanding dilutive common shares plus the
outstanding Operating Partnership units for the periods presented.

Earnings before Interest, Taxes, and Depreciation and Amortization ("EBITDA")
- The Company believes that EBITDA provides investors a useful financial
measure to evaluate its operating performance, excluding the impact of our
capital structure (primarily interest expense) and our asset base (primarily
depreciation and amortization).

The Company also evaluates its performance by reviewing Adjusted EBITDA and
Adjusted FFO, because it believes that adjusting EBITDA and FFO to exclude
certain recurring and non-recurring items described below provides useful
supplemental information regarding the Company's ongoing operating performance
and that the presentation of Adjusted EBITDA and Adjusted FFO, when combined
with the primary GAAP presentation of net income (loss), more completely
describes the Company's operating performance. The Company adjusts EBITDA and
FFO for the following items, which may occur in any period, and refers to
these measures as Adjusted EBITDA and Adjusted FFO:

  *Ground lease amortization: The Company excludes the non-cash amortization
    expense of the Company's ground lease asset.
  *Hotel acquisition costs: The Company excludes acquisition transaction
    costs expensed during the period because it believes that including these
    costs in EBITDA and FFO does not reflect the underlying financial
    performance of the Company and its hotels.
  *Reorganization costs from joint venture: The Company excludes
    reorganization costs expensed during the period because it believes that
    including these costs in EBITDA and FFO does not reflect the underlying
    financial performance of the Company and its hotels.
  *Amortization of LTIP units: The Company excludes the non-cash amortization
    of LTIP Units expensed during the period.
  *Management contract termination costs: The Company excludes one-time
    management contract termination costs expensed during the period because
    it believes that including these costs in EBITDA and FFO does not reflect
    the underlying financial performance of the Company and its hotels.
  *Interest expense adjustment for above-market loans: The Company excludes
    interest expense adjustment for above-market loans assumed in connection
    with acquisitions, because it believes that including these non-cash
    adjustments in FFO does not reflect the underlying financial performance
    of the Company.

The Company’s presentation of FFO in accordance with the NAREIT White Paper
and EBITDA, and as adjusted by the Company, should not be considered as an
alternative to net income (computed in accordance with GAAP) as an indicator
of the Company’s financial performance or to cash flow from operating
activities (computed in accordance with GAAP) as an indicator of its
liquidity. The table above is a reconciliation of the Company’s FFO and EBITDA
calculations to net income in accordance with GAAP.


Pebblebrook Hotel Trust
Manhattan Collection Statements of Operations
(Reflects the Company's 49% ownership interest in the Manhattan Collection)
($ in thousands)
(Unaudited)

                                                           
                                        Three months ended

                                        March 31,
                                        2013                    2012
                                                                          
Revenues:
Hotel operating revenues:
Room                                    $    14,001             $ 13,520
Food and beverage                            1,640                1,574
Other operating                             639                684     
Total revenues                              16,280             15,778  
                                                                          
Expenses:
Total hotel expenses                         14,537               13,639
Depreciation and amortization               2,606              2,427   
Total operating expenses                    17,143             16,066  
Operating income (loss)                      (863      )          (288    )
Interest income                              10                   35
Interest expense                             (2,021    )          (3,313  )
Other                                       (33       )         (30     )
Equity in earnings of joint venture     $    (2,907    )        $ (3,596  )
                                                                          

                                                                          
Debt:                                   Fixed Interest Rate     Loan Amount
Mortgage^(1)                                 3.67      %        $ 200,900
Cash and cash equivalents                                        (8,618  )
Net Debt                                                          192,282
Restricted cash                                                  (6,845  )
Net Debt including restricted cash                              $ 185,437 
                                                                          

    
      Does not include the Company's pro rata interest of the $50.0 million
(1)   preferred capital the Company made to the joint venture, in which
      Pebblebrook has a 49% ownership interest.
      

Notes:

These operating results represent the Company's 49% ownership interest in the
Manhattan Collection. The Manhattan Collection consists of the following six
hotels: Affinia Manhattan, Affinia 50, Affinia Dumont, Affinia Shelburne,
Affinia Gardens and The Benjamin. The operating results for the Manhattan
Collection only include 49% of the results for the six properties to reflect
the Company's 49% ownership interest in the hotels.

The information above has not been audited and has been presented only for
informational purposes.


Pebblebrook Hotel Trust
Same-Property Statistical Data - Entire Portfolio
(Unaudited)
                                     
                                          
                              Three months ended

                              March 31,
                              2013        2012
Total Portfolio
Same-Property Occupancy       79.2%       75.5%
Increase/(Decrease)           5.0%
Same-Property ADR             $201.89     $195.22
Increase/(Decrease)           3.4%
Same-Property RevPAR          $159.96     $147.37
Increase/(Decrease)           8.5%
                                          

Notes:

This schedule of hotel results for the three months ended March 31, includes
information from all of the hotels the Company owned as of March 31, 2013,
except for the Hotel Zetta (formerly Hotel Milano) for both 2013 and 2012.
Results for the Manhattan Collection reflect Pebblebrook’s 49% ownership
interest. These hotel results for the respective periods may include
information reflecting operational performance prior to the Company's
ownership of the hotels. The Company expects to include historical hotel
results for the Hotel Zetta after the Company has owned the hotel for one
year. In addition, the information above does not reflect the Company's
corporate general and administrative expense, interest expense, property
acquisition costs, depreciation and amortization, taxes and other expenses.
Any differences are a result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Same-Property Statistical Data - Wholly Owned
(Unaudited)
                                   
                                        
                            Three months ended

                            March 31,
                            2013        2012
Total Portfolio
Same-Property Occupancy     78.0%       73.5%
Increase/(Decrease)         6.1%
Same-Property ADR           $199.89     $193.94
Increase/(Decrease)         3.1%
Same-Property RevPAR        $155.89     $142.53
Increase/(Decrease)         9.4%
                                        

Notes:

This schedule of hotel results for the three months ended March 31 includes
information from all of the hotels the Company owned as of March 31, 2013,
except for the Hotel Zetta (formerly Hotel Milano) and Pebblebrook’s 49%
ownership interest in the Manhattan Collection for both 2013 and 2012. These
hotel results for the respective periods may include information reflecting
operational performance prior to the Company's ownership of the hotels. The
Company expects to include historical hotel results for the Hotel Zetta after
the Company has owned the hotel for one year. In addition, the information
above does not reflect the Company's corporate general and administrative
expense, interest expense, property acquisition costs, depreciation and
amortization, taxes and other expenses. Any differences are a result of
rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Same-Property Statistical Data - Manhattan Collection
(Unaudited)

                                        
                               Three months ended

                               March 31,
                               2013           2012
Total Portfolio
Same-Property Occupancy        86.3%          86.9%
Increase/(Decrease)            (0.6%)
Same-Property ADR              $212.22        $201.42
Increase/(Decrease)            5.4%
Same-Property RevPAR           $183.19        $174.97
Increase/(Decrease)            4.7%
                                              

Notes:

This schedule of hotel results for the three months ended March 31 includes
only information for the six hotels that comprise the Manhattan Collection as
of March 31, 2013. These hotel results for the respective periods may include
information reflecting operational performance prior to the Company's
ownership of the hotels. Any differences are a result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Hotel Operational Data
Schedule of Same-Property Results - Entire Portfolio
($ in thousands)
(Unaudited)

                                                   
                                        Three months ended

                                        March 31,
                                        2013            2012
                                                                  
Same-Property Revenues:
Rooms                                   $ 81,962        $ 76,334
Food and beverage                         32,995          32,167
Other                                    7,301         6,974   
Total hotel revenues                     122,258       115,475 
                                                                  
Same-Property Expenses:
Rooms                                   $ 24,576        $ 23,008
Food and beverage                         25,983          25,551
Other direct                              3,356           3,611
General and administrative                11,633          11,281
Sales and marketing                       9,651           9,439
Management fees                           3,726           3,328
Property operations and maintenance       4,288           4,357
Energy and utilities                      3,617           3,680
Property taxes                            6,370           5,502
Other fixed expenses                     3,379         3,275   
Total hotel expenses                     96,579        93,032  
                                                             
Same-Property EBITDA                    $ 25,679       $ 22,443  
                                                                  
Same-Property EBITDA Margin               21.0    %       19.4    %
                                                                  

Notes:

This schedule of hotel results for the three months ended March 31 includes
information from all of the hotels the Company owned as of March 31, 2013,
except for the Hotel Zetta (formerly Hotel Milano) for both 2013 and 2012.
Results for the Manhattan Collection reflect Pebblebrook’s 49% ownership
interest. These hotel results for the respective periods may include
information reflecting operational performance prior to the Company's
ownership of the hotels. The Company expects to include historical hotel
results for the Hotel Zetta after the Company has owned the hotel for one
year. In addition, the information above does not reflect the Company's
corporate general and administrative expense, interest expense, property
acquisition costs, depreciation and amortization, taxes and other expenses.
Any differences are a result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Hotel Operational Data
Schedule of Same-Property Results - Wholly Owned
($ in thousands)
(Unaudited)

                                                   
                                        Three months ended

                                        March 31,
                                        2013            2012
                                                                 
Same-Property Revenues:
Rooms                                   $ 67,962        $ 62,813
Food and beverage                         31,355          30,593
Other                                    6,662         6,290  
Total hotel revenues                     105,979       99,696 
                                                                 
Same-Property Expenses:
Rooms                                   $ 18,959        $ 17,618
Food and beverage                         24,299          24,023
Other direct                              3,245           3,504
General and administrative                9,691           9,457
Sales and marketing                       8,448           8,293
Management fees                           3,214           2,836
Property operations and maintenance       3,532           3,657
Energy and utilities                      2,831           2,953
Property taxes                            4,565           3,873
Other fixed expenses                     3,259         3,179  
Total hotel expenses                     82,043        79,393 
                                                            
Same-Property EBITDA                    $ 23,936       $ 20,303 
                                                                 
Same-Property EBITDA Margin               22.6    %       20.4   %
                                                                 

Notes:

This schedule of hotel results for the three months ended March 31 includes
information from all of the hotels the Company owned as of March 31, 2013,
except for the Hotel Zetta (formerly Hotel Milano) and Pebblebrook’s 49%
ownership interest in the Manhattan Collection for both 2013 and 2012. These
hotel results for the respective periods may include information reflecting
operational performance prior to the Company's ownership of the hotels. The
Company expects to include historical hotel results for the Hotel Zetta after
the Company has owned the hotel for one year. In addition, the information
above does not reflect the Company's corporate general and administrative
expense, interest expense, property acquisition costs, depreciation and
amortization, taxes and other expenses. Any differences are a result of
rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Hotel Operational Data
Schedule of Same-Property Results - Manhattan Collection
($ in thousands)
(Unaudited)

                                                  
                                        Three months ended

                                        March 31,
                                        2013           2012
                                                                
Same-Property Revenues:
Rooms                                   $ 14,001       $ 13,520
Food and beverage                         1,640          1,574
Other                                    639          684    
Total hotel revenues                     16,280       15,778 
                                                                
Same-Property Expenses:
Rooms                                   $ 5,617        $ 5,390
Food and beverage                         1,684          1,527
Other direct                              112            108
General and administrative                1,942          1,824
Sales and marketing                       1,203          1,145
Management fees                           512            492
Property operations and maintenance       756            701
Energy and utilities                      786            726
Property taxes                            1,805          1,630
Other fixed expenses                     120          96     
Total hotel expenses                     14,537       13,639 
                                                           
Same-Property EBITDA                    $ 1,743       $ 2,139  
                                                                
Same-Property EBITDA Margin               10.7   %       13.6   %
                                                                

Notes:

This schedule of hotel results for the three months ended March 31 includes
only information for the six hotels that comprise the Manhattan Collection as
of March 31, 2013. These hotel results for the respective periods may include
information reflecting operational performance prior to the Company's
ownership of the hotels. Any differences are a result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Same-Property Inclusion Reference Table

                                      
Hotels                                  Q1
                                          
DoubleTree by Hilton Bethesda             X
Sir Francis Drake                         X
InterContinental Buckhead                 X
Hotel Monaco Washington, DC               X
Grand Hotel Minneapolis                   X
Skamania Lodge                            X
Sheraton Delfina Santa Monica             X
Sofitel Philadelphia                      X
Argonaut Hotel                            X
Hotel Monaco Seattle                      X
Westin Gaslamp Quarter San Diego          X
Mondrian Los Angeles                      X
Viceroy Miami                             X
W Boston                                  X
Manhattan Collection                      X
Hotel Zetta (formerly Hotel Milano)
Hotel Vintage Park Seattle                X
Hotel Vintage Plaza Portland              X
W Los Angeles - Westwood                  X
Hotel Palomar San Francisco               X
Embassy Suites San Diego Bay              X
                                          

Notes:

A property marked with an "X" in a specific quarter denotes that the
same-property operating results of that property are included in the
Same-Property Statistical Data and in the Schedule of Same-Property Results.

The Company’s first quarter Same-Property RevPAR, RevPAR Growth, ADR,
Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin include all of the
hotels the Company owned as of March 31, 2013, except for the Hotel Zetta
(formerly Hotel Milano) for both 2013 and 2012. Results for the Manhattan
Collection reflect Pebblebrook's 49% ownership interest. The Company expects
to include historical operating results for the Hotel Zetta after the Company
has owned the hotel for one year. Operating statistics and financial results
include periods prior to the Company’s ownership of the hotels.

The Company's estimates and assumptions for Same-Property RevPAR, RevPAR
Growth, ADR, Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin for the
Company's 2013 Outlook include the hotels owned as of March 31, 2013, except
for Hotel Zetta for the first quarter. These operating statistics and
financial results may include periods prior to the Company’s ownership of the
hotels. The hotel operating estimates and assumptions for the Manhattan
Collection included in the Company's 2013 Outlook only reflect the Company's
49% ownership interest in the hotels.


Pebblebrook Hotel Trust
Historical Same-Property Operating Data - Entire Portfolio
($ in millions, except ADR and RevPAR)
(Unaudited)
                                                            
                                                                       
Historical
Operating
Data:
                   First        Second       Third        Fourth       Full
                   Quarter      Quarter      Quarter      Quarter      Year
                   2012         2012         2012         2012         2012
                                                                       
Same-Property      75%          85%          87%          79%          82%
Occupancy
Same-Property      $195         $218         $219         $222         $214
ADR
Same-Property      $147         $186         $190         $176         $175
RevPAR
                                                                       
Same-Property      $115.5       $139.7       $140.7       $136.8       $532.7
Revenues
Same-Property      $22.4        $42.2        $43.5        $38.0        $146.2
EBITDA
                                                                       
                   First
                   Quarter
                   2013
                                                                       
Same-Property      79%
Occupancy
Same-Property      $202
ADR
Same-Property      $160
RevPAR
                                                                       
Same-Property      $122.3
Revenues
Same-Property      $25.7
EBITDA
                                                                       

Notes:

These historical hotel operating results include information for all of the
hotels the Company owned as of March 31, 2013, except for the operating
results of Hotel Zetta (formerly Hotel Milano). The hotel operating results
for the Manhattan Collection only includes 49% of the results for the 6
properties to reflect the Company's 49% ownership interest in the hotels.
These historical operating results include periods prior to the Company's
ownership of the hotels. The Company expects to include historical operating
results for Hotel Zetta after the Company has owned the hotel for one year.
The information above does not reflect the Company's corporate general and
administrative expense, interest expense, property acquisition costs,
depreciation and amortization, taxes and other expenses. Any differences are a
result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Historical Same-Property Operating Data - Wholly Owned
($ in millions, except ADR and RevPAR)
(Unaudited)
                                                            
                                                                       
Historical
Operating
Data:
                   First        Second       Third        Fourth       Full
                   Quarter      Quarter      Quarter      Quarter      Year
                   2012         2012         2012         2012         2012
                                                                       
Same-Property      73%          84%          86%          77%          80%
Occupancy
Same-Property      $194         $206         $210         $202         $203
ADR
Same-Property      $143         $173         $180         $156         $163
RevPAR
                                                                       
Same-Property      $99.7        $117.0       $119.2       $111.2       $447.2
Revenues
Same-Property      $20.3        $33.6        $35.7        $27.7        $117.3
EBITDA
                                                                       
                   First
                   Quarter
                   2013
                                                                       
Same-Property      78%
Occupancy
Same-Property      $200
ADR
Same-Property      $156
RevPAR
                                                                       
Same-Property      $106.0
Revenues
Same-Property      $23.9
EBITDA
                                                                       

Notes:

These historical hotel operating results include information for all of the
hotels the Company owned as of March 31, 2013, except for the operating
results of Hotel Zetta (formerly Hotel Milano) and Pebblebrook's 49% interest
in the 6 hotel Manhattan Collection. These historical operating results
include periods prior to the Company's ownership of the hotels. The Company
expects to include historical operating results for Hotel Zetta after the
Company has owned the hotel for one year. The information above does not
reflect the Company's corporate general and administrative expense, interest
expense, property acquisition costs, depreciation and amortization, taxes and
other expenses. Any differences are a result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.


Pebblebrook Hotel Trust
Historical Same-Property Operating Data - Manhattan Collection
($ in millions, except ADR and RevPAR)
(Unaudited)
                                                             
                                                                        
Historical
Operating Data:
                    First        Second       Third        Fourth       Full
                    Quarter      Quarter      Quarter      Quarter      Year
                    2012         2012         2012         2012         2012
                                                                        
Same-Property       87%          93%          93%          93%          91%
Occupancy
Same-Property       $201         $282         $268         $316         $268
ADR
Same-Property       $175         $263         $249         $293         $245
RevPAR
                                                                        
Same-Property       $15.8        $22.7        $21.5        $25.6        $85.5
Revenues
Same-Property       $2.1         $8.6         $7.8         $10.3        $28.9
EBITDA
                                                                        
                    First
                    Quarter
                    2013
                                                                        
Same-Property       86%
Occupancy
Same-Property       $212
ADR
Same-Property       $183
RevPAR
                                                                        
Same-Property       $16.3
Revenues
Same-Property       $1.7
EBITDA
                                                                        

Notes:

These historical hotel operating results include only information from the 6
hotel properties in the Manhattan Collection. The hotel operating results for
the Manhattan Collection only include 49% of the results for the 6 properties
to reflect the Company's 49% ownership interest in the hotels. These
historical operating results include periods prior to the Company's ownership
of the hotels. The information above does not reflect the Company's corporate
general and administrative expense, interest expense, property acquisition
costs, depreciation and amortization, taxes and other expenses. Any
differences are a result of rounding.

The information above has not been audited and has been presented only for
comparison purposes.

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Contact:

Pebblebrook Hotel Trust
Raymond D. Martz, Chief Financial Officer, 240-507-1300
 
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