Pebblebrook Hotel Trust Reports Second Quarter 2013 Results

  Pebblebrook Hotel Trust Reports Second Quarter 2013 Results

Same-Property RevPAR Increased 6.0 Percent; Adjusted EBITDA Rose 30.2 Percent

Business Wire

BETHESDA, Md. -- July 25, 2013

Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”) today reported results for
the second quarter ended June 30, 2013. The Company’s results include the
following:

                                                
                             Second Quarter          Six Months Ended, June 30
                             2013      2012        2013           2012
                             ($ in millions except per share and RevPAR data)
                                                                
Net income (loss) to         $8.7        $5.4        $3.8             $(1.8)
common shareholders
Net income (loss) per        $0.14       $0.10       $0.06            $(0.04)
diluted share
                                                                      
Same-Property RevPAR^(1)     $195.42     $184.29     $177.97          $166.00
Same-Property RevPAR         6.0%                    7.2%
growth rate
                                                                      
Same-Property EBITDA^(1)     $46.1       $42.4       $71.8            $64.8
Same-Property EBITDA         8.8%                    10.8%
growth rate
Same-Property EBITDA         31.1%       30.1%       26.5%            25.3%
Margin^(1)
                                                                      
Adjusted EBITDA^(1)          $42.8       $32.9       $64.8            $46.9
Adjusted EBITDA growth       30.2%                   38.3%
rate
                                                                      
Adjusted FFO^(1)             $26.4       $20.1       $38.4            $25.6
Adjusted FFO per diluted     $0.43       $0.37       $0.62            $0.48
share^(1)
Adjusted FFO per diluted     14.8%                   29.1%
share growth rate




^(1) See tables later in this press release for a description of same-property
information 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 revenue per
available room (“RevPAR”), average daily rate (“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.

“We’re very pleased with our portfolio’s performance in the second quarter, as
we benefitted from the ongoing recovery in the industry and the consistent
outperformance we’re able to generate on a top-line and bottom-line basis,”
said Jon E. Bortz, Chairman, President and Chief Executive Officer of
Pebblebrook Hotel Trust. “Overall fundamentals for our portfolio and the
lodging industry remain strong as we continue to experience healthy demand
growth from the corporate and leisure transient segments. In addition, demand
growth is also being supplemented by robust growth in international inbound
travel, primarily benefitting the major gateway cities, particularly those in
which our hotels are located.”

Second Quarter Highlights

  *Same-Property RevPAR: Same-Property revenue per available room
    (“Same-Property RevPAR”) in the second quarter of 2013 increased 6.0
    percent over the same period of 2012 to $195.42. Same-Property average
    daily rate (“Same-Property ADR”) grew 4.4 percent from the second quarter
    of 2012 to $227.25. Same-Property Occupancy rose 1.5 percent to a robust
    86.0 percent.
  *Same-Property EBITDA: The Company’s hotels generated $46.1 million of
    Same-Property EBITDA for the quarter ended June 30, 2013, climbing 8.8
    percent compared with the same period of 2012. Same-Property Revenues
    increased 5.6 percent, while Same-Property Expenses rose 4.2 percent. As a
    result, Same-Property EBITDA Margin grew to 31.1 percent for the quarter
    ended June 30, 2013, representing an increase of 93 basis points as
    compared to the same period last year.
  *Adjusted EBITDA: The Company’s Adjusted EBITDA increased to $42.8 million
    from $32.9 million in the prior year period, an increase of $9.9 million,
    or 30.2 percent.
  *Adjusted FFO: The Company’s Adjusted FFO climbed to $26.4 million from
    $20.1 million in the prior year period, an increase of 31.2 percent.
  *Dividends: On June 14, 2013, the Company declared a regular quarterly cash
    dividend of $0.16 per share on its common shares, 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 regular quarterly cash dividend of $0.40625 per share on its
    6.50 percent Series C Cumulative Redeemable Preferred Shares.

“Our operators, working closely with our asset management team, were able to
increase Same-Property EBITDA 8.8 percent over the prior year period and
improve operating margins by 93 basis points during the quarter, despite the
significant negative impact from the renovation disruptions caused by the
on-going comprehensive renovations at the Affinia 50 and the public area
renovations at the Affinia Manhattan,” added Mr. Bortz. “We believe our
portfolio has significant opportunities to generate outsized revenue and
EBITDA growth as we continue to make progress implementing our array of asset
management initiatives, best practices and operating efficiencies. Our strong
second quarter results illustrate the benefits of our strategy of primarily
investing in high-quality hotels that have historically underperformed, are
located in dynamic urban markets in major gateway cities and which will
benefit from our comprehensive asset management approach.”

Capital Reinvestment

During the second quarter, the Company invested $11.7 million in capital
improvements throughout its portfolio. The Company’s capital investments
included $2.6 million at the Affinia 50, $1.5 million at Hotel Zetta, $1.3
million at Vintage Park Seattle, and $1.2 million at Sofitel Philadelphia.

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.
The 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 remaining total project costs with available
cash.

In June 2013, the Company, along with its joint venture partner, completed a
$7.3 million renovation of the Affinia Manhattan lobby, entry, back-of-house
and meeting space, which included the reconfiguration and creation of 2,167
square feet of additional meeting space. The completion of these improvements
concludes the third and final phase of the multi-year $35.0 million
comprehensive renovation of the property.

In addition to its capital reinvestment programs, Pebblebrook remains
committed to implementing a comprehensive array of asset management best
practices, initiatives and operating efficiencies throughout its portfolio to
boost hotel revenues and improve operating efficiencies in a continuous effort
to drive strong margin growth. Since its first hotel acquisition in 2010, the
Company has identified approximately $16.7 million of annualized best
practices and asset management opportunities throughout its portfolio that it
has either implemented or is in the process of implementing.

Capital Markets

On April 4, 2013, the joint venture that owns 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 hotel in New York, New York.

On April 11, 2013, the underwriters exercised in full their 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.

During the second quarter of 2013, the Company issued and sold 171,293 common
shares under its ATM offering program at an average price of $28.09 per share,
for total net proceeds of $4.7 million.

Year-to-Date Highlights

  *Same-Property RevPAR, ADR and Occupancy: Same-Property RevPAR for the six
    months ended June 30, 2013 increased 7.2 percent over the same period of
    2012 to $177.97. Year-to-date, Same-Property ADR grew 3.9 percent from the
    comparable period of 2012 to $215.20, while year-to-date Same-Property
    Occupancy climbed 3.2 percent to 82.7 percent.
  *Same-Property Hotel EBITDA: The Company’s hotels generated $71.8 million
    of Same-Property Hotel EBITDA for the six months ended June 30, 2013, an
    improvement of 10.8 percent compared with the same period of 2012.
    Same-Property Hotel Revenues grew 5.7 percent, while Same-Property Hotel
    Expenses rose 4.0 percent. As a result, Same-Property Hotel EBITDA Margin
    for the six months ended June 30, 2013 increased 121 basis points to 26.5
    percent as compared to the same period last year.
  *Adjusted EBITDA: The Company’s Adjusted EBITDA increased 38.3 percent, or
    $18.0 million, to $64.8 million from $46.9 million in the prior year
    period.
  *Adjusted FFO: The Company’s Adjusted FFO climbed 50.1 percent to $38.4
    million from $25.6 million in the prior year period.

Balance Sheet

As of June 30, 2013, the Company had $528.9 million in consolidated debt and
$225.4 million in unconsolidated, non-recourse, secured debt at
weighted-average interest rates of 4.4 percent and 3.6 percent, respectively.
The Company’s total combined pro rata weighted-average interest rate is 4.1
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 June 30, 2013, the Company had
$165.4 million of consolidated cash, cash equivalents and restricted cash and
$12.6 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 June 30, 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 4.2 times. The Company’s total debt to total
assets ratio was 32 percent. Excluding its interest in the off-balance sheet
Manhattan Collection, the Company’s fixed charge coverage ratio was 2.1 times,
net debt to trailing 12-month corporate EBITDA was 3.3 times and total debt to
total assets ratio was 28 percent.

Subsequent Events

On July 24, the Company announced that it will up-brand and reposition its
310-room Sheraton Delfina Santa Monica to the upper upscale Le Méridien brand.
This conversion is expected to be complete in the fourth quarter of 2013. In
conjunction with the re-branding and repositioning, the Company expects to
incur approximately $0.5 million of transition costs and invest an additional
$2.0 million for capital improvements in the hotel. Viceroy Hotels and Resorts
will continue to manage the property.

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                                   $40.0                  $42.0
Net income per diluted share                 $0.65                  $0.68
                                                                    
Adjusted EBITDA                              $147.0                 $149.0
                                                                    
Adjusted FFO                                 $86.5                  $88.5
Adjusted FFO per diluted share               $1.40                  $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                         $159.0                 $162.0
Same-Property EBITDA Margin                  28.0%                  28.5%
Same-Property EBITDA Margin growth rate      75 bps                 125 bps
                                                                    
Corporate cash general and                   $11.5                  $12.0
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        61.6                   61.6
and units
                                                                    
The Company’s outlook for the third quarter of 2013 is as follows:
                                                                    
                                             Third Quarter 2013 Outlook
                                             Low                  High
                                             ($ and shares/units in millions,

                                             except per share and RevPAR data)
Same-Property RevPAR                         $199                   $202
Same-Property RevPAR growth rate             5.0%                   6.0%
                                                                    
Same-Property EBITDA                         $45.4                  $46.9
Same-Property EBITDA Margin                  31.2%                  31.7%
Same-Property EBITDA Margin growth rate      25 bps                 75 bps
                                                                    
Adjusted EBITDA                              $42.0                  $43.5
                                                                    
Adjusted FFO                                 $25.1                  $26.6
Adjusted FFO per diluted share               $0.41                  $0.43
                                                                    
Weighted-average fully diluted shares        61.6                   61.6
and units
                                                                    

The Company’s 2013 and Third Quarter Outlooks reflect 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 June 30, 2013 as if they had been owned by the Company for the
entire year of 2013, except for Hotel Zetta, which is not included in the
first quarters of 2012 and 2013. The Company’s 2013 outlook assumes no
additional acquisitions beyond the hotels the Company owned as of June 30,
2013.

Earnings Call

The Company will conduct its quarterly analyst and investor conference call on
Friday, July 26, 2013 at 9:00 AM EDT. To participate in the conference call,
please dial (888) 684-1278 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 us at www.pebblebrookhotels.com and on Twitter
at @PebblebrookPEB.

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 July 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)


                                         June 30, 2013   December 31, 2012
                                           (Unaudited)
ASSETS
Assets:
Investment in hotel properties, net        $ 1,530,629       $   1,417,229
Investment in joint venture                  255,711             283,011
Ground lease asset, net                      10,173              10,283
Cash and cash equivalents                    151,592             85,900
Restricted cash                              13,802              12,034
Hotel receivables (net of allowance
for doubtful accounts of $218 and $28,       25,538              13,463
respectively)
Deferred financing costs, net                5,262               5,753
Prepaid expenses and other assets           24,263            18,489     
Total assets                               $ 2,016,970      $   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 $6,377 and $2,498,                435,319             368,508
respectively)
Accounts payable and accrued expenses        54,190              47,364
Advance deposits                             8,047               4,596
Accrued interest                             1,815               1,328
Distribution payable                        15,202            11,274     
Total liabilities                            614,573             533,070
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial
interest, $.01 par value (liquidation
preference of $325,000 and $225,000 at
June 30, 2013 and December 31, 2012),
100,000,000 shares authorized;               130                 90
13,000,000 shares issued and
outstanding at June 30, 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; 61,179,028 issued and            612                 610
outstanding at June 30, 2013 and
60,955,090 issued and outstanding at
December 31, 2012
Additional paid-in capital                   1,464,904           1,362,349
Accumulated other comprehensive income       1,500               (300       )
(loss)
Distributions in excess of retained         (65,648   )        (49,798    )
earnings
Total shareholders' equity                  1,401,498         1,312,951  
Non-controlling interests                   899               141        
Total equity                                1,402,397         1,313,092  
Total liabilities and equity               $ 2,016,970      $   1,846,162  
                                                                            


Pebblebrook Hotel Trust
Consolidated Statement of Operations
($ in thousands, except per share data)
Unaudited
                                                                 
                   Three months ended                Six months ended
                   June 30,                          June 30,
                    2013           2012           2013           2012       
                                                                      
Revenues:
Hotel operating
revenues:
Room               $ 83,400         $ 59,632         $ 150,539        $ 106,487
Food and             35,228           28,870           66,391           54,394
beverage
Other operating     7,673          5,665          14,285         10,760     
Total revenues     $ 126,301       $ 94,167        $ 231,215       $ 171,641    
                                                                      
Expenses:
Hotel operating
expenses:
Room               $ 20,847         $ 14,983         $ 39,705         $ 28,476
Food and             25,417           20,417           49,475           40,120
beverage
Other direct         3,449            2,955            6,725            5,706
Other indirect      31,412         23,792         60,264         45,938     
Total hotel
operating            81,125           62,147           156,169          120,240
expenses
Depreciation and     13,565           9,998            26,776           19,687
amortization
Real estate
taxes, personal
property taxes       5,641            4,032            11,232           8,039
and property
insurance
Ground rent          2,755            537              3,677            957
General and          4,246            4,810            8,585            8,410
administrative
Hotel
acquisition         241            588            1,161          826        
costs
Total operating      107,573          82,112           207,600          158,159
expenses
Operating income     18,728           12,055           23,615           13,482
Interest income      660              23               1,294            29
Interest expense     (5,925     )     (3,465     )     (11,383    )     (6,722     )
Equity in
earnings (loss)     3,115          3,080          208            (516       )
of joint venture
Income (loss)
before income        16,578           11,693           13,734           6,273
taxes
Income tax
(expense)           (1,647     )    (1,666     )    951            917        
benefit
Net income           14,931           10,027           14,685           7,190
(loss)
Net income
(loss)
attributable to     97             163            99             117        
non-controlling
interests
Net income
(loss)               14,834           9,864            14,586           7,073
attributable to
the Company
Distributions to
preferred           (6,104     )    (4,457     )    (10,772    )    (8,913     )
shareholders
Net income
(loss)
attributable to    $ 8,730         $ 5,407         $ 3,814         $ (1,840     )
common
shareholders
                                                                      
                                                                      
Net income
(loss) per share
available to
common             $ 0.14           $ 0.10           $ 0.06           $ (0.04      )
shareholders,
basic and
diluted
                                                                      
Weighted-average
number of common     61,082,770       52,908,195       61,039,721       51,959,049
shares, basic
Weighted-average
number of common     61,196,396       52,927,862       61,195,034       51,959,049
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                Six months ended
                   June 30,                          June 30,
                    2013           2012           2013           2012       
                                                                      
Net income         $ 14,931         $ 10,027         $ 14,685         $ 7,190
(loss)
Adjustments:
Depreciation and     13,522           9,959            26,691           19,610
amortization
Depreciation and
amortization        2,148          2,437          4,754          4,864      
from joint
venture
FFO                $ 30,601        $ 22,423        $ 46,130        $ 31,664     
Distribution to
preferred          $ (6,104     )   $ (4,457     )   $ (10,772    )   $ (8,913     )
shareholders
FFO available to
common share and   $ 24,497        $ 17,966        $ 35,358        $ 22,751     
unit holders
Hotel
acquisition          241              588              1,161            826
costs
Non-cash ground      1,718            54               1,740            109
rent
Amortization of      395              395              790              790
LTIP units
Management
contract             -                1,085            197              1,085
transition costs
Interest expense
adjustment for      (490       )    -              (872       )    -          
above market
loan
Adjusted FFO
available to       $ 26,361        $ 20,088        $ 38,374        $ 25,561     
common share and
unit holders
                                                                      
FFO per common     $ 0.40           $ 0.33           $ 0.58           $ 0.43
share - basic
FFO per common     $ 0.40           $ 0.33           $ 0.57           $ 0.43
share - diluted
Adjusted FFO per
common share -     $ 0.43           $ 0.37           $ 0.62           $ 0.48
basic
Adjusted FFO per
common share -     $ 0.43           $ 0.37           $ 0.62           $ 0.48
diluted
                                                                      
Weighted-average
number of basic      61,463,879       53,837,294       61,420,830       52,888,148
common shares
and units
Weighted-average
number of fully      61,577,505       53,856,961       61,576,143       52,960,751
diluted common
shares and units
                                                                      
                                                     
                   Three months ended                Six months ended
                   June 30,                          June 30,
                    2013           2012           2013           2012       
                                                                      
Net income         $ 14,931         $ 10,027         $ 14,685         $ 7,190
(loss)
Adjustments:
Interest expense     5,925            3,465            11,383           6,722
Interest expense
from joint           2,274            3,198            4,295            6,511
venture
Income tax
expense              1,647            1,666            (951       )     (917       )
(benefit)
Depreciation and     13,565           9,998            26,776           19,687
amortization
Depreciation and
amortization        2,148          2,437          4,754          4,864      
from joint
venture
EBITDA             $ 40,490       $ 30,791        $ 60,942       $ 44,057     
Hotel
acquisition          241              588              1,161            826
costs
Non-cash ground      1,718            54               1,740            109
rent
Amortization of      395              395              790              790
LTIP units
Management
contract            -              1,085          197            1,085      
transition costs
Adjusted EBITDA    $ 42,844        $ 32,913        $ 64,830        $ 46,867     


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:

- Non-cash ground rent: The Company excludes the non-cash ground rent expense,
which is primarily made up of the straightline rent impact from a ground
lease.
- 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             Six months ended
                        June 30,                       June 30,
                           2013         2012        2013       2012   
                                                                    
Revenues:
Hotel operating
revenues:
Room                    $   19,908       $ 20,291      $ 33,909     $ 33,811
Food and beverage           1,694          1,695         3,334        3,270
Other operating            617          667         1,256      1,350  
Total revenues             22,219       22,653      38,499     38,431 
                                                                    
Expenses:
Total hotel expenses        14,583         14,041        29,119       27,680
Depreciation and           2,148        2,437       4,754      4,864  
amortization
Total operating            16,731       16,478      33,873     32,544 
expenses
Operating income            5,488          6,175         4,626        5,887
(loss)
Interest income             23             32            32           67
Interest expense            (2,274  )      (3,198  )     (4,295 )     (6,511 )
Other                      (122    )     71          (155   )    41     
Equity in earnings of   $   3,115       $ 3,080      $ 208       $ (516   )
joint venture
                                                                    
                                                            
                                                                    
                        Fixed Interest
Debt:                   Rate             Loan Amount
Mortgage^(1)                3.61    %    $ 225,400
Cash and cash                             (5,013  )
equivalents
Net Debt                                   220,387
Restricted cash                           (7,636  )
Net Debt including                       $ 212,751 
restricted cash

    
      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   Six months ended
                          June 30,             June 30,
                          2013       2012      2013      2012
Total Portfolio
Same-Property Occupancy   86.0%      84.7%     82.7%     80.1%
Increase/(Decrease)       1.5%                 3.2%
Same-Property ADR         $227.25    $217.59   $215.20   $207.15
Increase/(Decrease)       4.4%                 3.9%
Same-Property RevPAR      $195.42    $184.29   $177.97   $166.00
Increase/(Decrease)       6.0%                 7.2%
                                                         


Notes:
This schedule of hotel results for the three months ended June 30, includes
information from all of the hotels the Company owned as of June 30, 2013. This
schedule of hotel results for the six months ended June 30 includes
information from all of the hotels the Company owned as of June 30, 2013,
except for the Hotel Zetta (formerly Hotel Milano) for the first quarter of
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. 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   Six months ended
                          June 30,             June 30,
                          2013       2012      2013      2012
Total Portfolio
Same-Property Occupancy   85.6%      83.2%     81.9%     78.4%
Increase/(Decrease)       2.8%                 4.4%
Same-Property ADR         $215.85    $205.27   $208.27   $200.02
Increase/(Decrease)       5.2%                 4.1%
Same-Property RevPAR      $184.77    $170.87   $170.58   $156.85
Increase/(Decrease)       8.1%                 8.8%
                                                         


Notes:
This schedule of hotel results for the three months ended June 30 includes
information from all of the hotels the Company owned as of June 30, 2013,
except for Pebblebrook’s 49% ownership interest in the Manhattan Collection
for both 2013 and 2012. This schedule of hotel results for the six months
ended June 30 includes information from all of the hotels the Company owned as
of June 30, 2013, except for the Hotel Zetta (formerly Hotel Milano) for the
first quarter of both 2012 and 2013 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. 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   Six months ended
                          June 30,             June 30,
                          2013       2012      2013      2012
Total Portfolio
Same-Property Occupancy   88.3%      93.2%     87.3%     90.0%
Increase/(Decrease)       (5.3%)               (3.0%)
Same-Property ADR         $291.81    $281.78   $252.68   $243.01
Increase/(Decrease)       3.6%                 4.0%
Same-Property RevPAR      $257.63    $262.58   $220.62   $218.77
Increase/(Decrease)       (1.9%)               0.8%
                                                         


Notes:
This schedule of hotel results for the three months ended June 30 includes
only information for the six hotels that comprise the Manhattan Collection as
of June 30, 2013. 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     Six months ended
                                  June 30,               June 30,
                                  2013        2012       2013        2012
                                                                     
Same-Property Revenues:
Rooms                             $ 103,308   $ 97,279   $ 185,271   $ 173,612
Food and beverage                 36,924      35,698     69,919      67,865
Other                             8,290       7,705      15,591      14,680
Total hotel revenues              148,522     140,682    270,781     256,157
                                                                     
Same-Property Expenses:
Rooms                             $ 26,447    $ 24,631   $ 51,022    $ 47,638
Food and beverage                 27,142      26,391     53,125      51,942
Other direct                      3,567       3,934      6,926       7,548
General and administrative        12,445      11,909     24,077      23,190
Sales and marketing               10,271      10,137     19,922      19,576
Management fees                   4,710       4,219      8,435       7,547
Property operations and           4,447       4,465      8,735       8,822
maintenance
Energy and utilities              3,485       3,556      7,102       7,235
Property taxes                    6,367       5,553      12,737      11,055
Other fixed expenses              3,505       3,492      6,885       6,767
Total hotel expenses              102,386     98,287     198,966     191,320
                                                                  
Same-Property EBITDA              $ 46,136    $ 42,395   $ 71,815    $ 64,837
                                                                     
Same-Property EBITDA Margin       31.1%       30.1%      26.5%       25.3%
                                                                     


Notes:
This schedule of hotel results for the three months ended June 30 includes
information from all of the hotels the Company owned as of June 30, 2013. This
schedule of hotel results for the six months ended June 30 includes
information from all of the hotels the Company owned as of June 30, 2013,
except for the Hotel Zetta (formerly Hotel Milano) for the first quarter of
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. 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    Six months ended
                                   June 30,              June 30,
                                   2013       2012       2013        2012
                                                                     
Same-Property Revenues:
Rooms                              $ 83,400   $ 76,988   $ 151,362   $ 139,801
Food and beverage                  35,230     34,003     66,585      64,595
Other                              7,673      7,039      14,334      13,330
Total hotel revenues               126,303    118,030    232,281     217,726
                                                                     
Same-Property Expenses:
Rooms                              $ 20,847   $ 19,154   $ 39,806    $ 36,772
Food and beverage                  25,489     24,854     49,788      48,877
Other direct                       3,450      3,827      6,693       7,330
General and administrative         10,443     10,027     20,134      19,484
Sales and marketing                9,003      8,899      17,452      17,193
Management fees                    4,008      3,521      7,221       6,358
Property operations and            3,714      3,749      7,246       7,406
maintenance
Energy and utilities               2,909      2,936      5,740       5,889
Property taxes                     4,548      3,891      9,113       7,763
Other fixed expenses               3,392      3,389      6,652       6,568
Total hotel expenses               87,803     84,247     169,845     163,640
                                                                  
Same-Property EBITDA               $ 38,500   $ 33,783   $ 62,436    $ 54,086
                                                                     
Same-Property EBITDA Margin        30.5%      28.6%      26.9%       24.8%
                                                                     


Notes:
This schedule of hotel results for the three months ended June 30 includes
information from all of the hotels the Company owned as of June 30, 2013,
except for Pebblebrook’s 49% ownership interest in the Manhattan Collection
for both 2013 and 2012. This schedule of hotel results for the six months
ended June 30 includes information from all of the hotels the Company owned as
of June 30, 2013, except for the Hotel Zetta (formerly Hotel Milano) for the
first quarter of both 2013 and 2012 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. 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        Six months ended
                             June 30,                  June 30,
                             2013         2012         2013         2012
                                                                    
Same-Property Revenues:
Rooms                        $ 19,908     $ 20,291     $ 33,909     $ 33,811
Food and beverage              1,694        1,695        3,334        3,270
Other                         617        667        1,256      1,350  
Total hotel revenues          22,219     22,653     38,499     38,431 
                                                                    
Same-Property Expenses:
Rooms                        $ 5,600      $ 5,476      $ 11,217     $ 10,866
Food and beverage              1,653        1,537        3,337        3,065
Other direct                   118          108          229          219
General and administrative     2,002        1,882        3,944        3,705
Sales and marketing            1,267        1,238        2,470        2,383
Management fees                702          698          1,214        1,189
Property operations and        733          716          1,489        1,416
maintenance
Energy and utilities           576          620          1,362        1,346
Property taxes                 1,819        1,662        3,624        3,292
Other fixed expenses          113        104        233        199    
Total hotel expenses          14,583     14,041     29,119     27,680 
                                                                 
Same-Property EBITDA         $ 7,636     $ 8,612     $ 9,380     $ 10,751 
                                                                    
Same-Property EBITDA           34.4   %     38.0   %     24.4   %     28.0   %
Margin
                                                                             

Notes:
This schedule of hotel results for the three months ended June 30 includes
only information for the six hotels that comprise the Manhattan Collection as
of June 30, 2013. 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   Q2
                                           
DoubleTree by Hilton Bethesda         X    X
Sir Francis Drake                     X    X
InterContinental Buckhead             X    X
Hotel Monaco Washington, DC           X    X
Grand Hotel Minneapolis               X    X
Skamania Lodge                        X    X
Sheraton Delfina Santa Monica         X    X
Sofitel Philadelphia                  X    X
Argonaut Hotel                        X    X
Hotel Monaco Seattle                  X    X
Westin Gaslamp Quarter San Diego      X    X
Mondrian Los Angeles                  X    X
Viceroy Miami                         X    X
W Boston                              X    X
Manhattan Collection                  X    X
Hotel Zetta (formerly Hotel Milano)        X
Hotel Vintage Park Seattle            X    X
Hotel Vintage Plaza Portland          X    X
W Los Angeles - Westwood              X    X
Hotel Palomar San Francisco           X    X
Embassy Suites San Diego Bay          X    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 third quarter Same-Property RevPAR, RevPAR Growth, ADR,
Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin include all of the
hotels the Company owned as of June 30, 2013 for both 2013 and 2012. Results
for the Manhattan Collection reflect Pebblebrook's 49% ownership interest.
Operating statistics and financial results include periods prior to the
Company’s ownership of the hotels.

The Company’s June 30 year-to-date Same-Property RevPAR, RevPAR Growth, ADR,
Occupancy, Revenues, Expenses, EBITDA and EBITDA Margin include all of the
hotels the Company owned as of June 30, 2013, except for the Hotel Zetta
(formerly Hotel Milano) for the first quarter of both 2013 and 2012. Results
for the Manhattan Collection reflect Pebblebrook's 49% ownership interest.
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 June 30, 2013, except
for Hotel Zetta for the first quarter. The operating statistics and financial
results in this press release 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 those hotels.



Pebblebrook Hotel Trust
Historical 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 Occupancy    75%        85%        87%        79%        82%
Same-Property ADR          $195       $218       $218       $222       $214
Same-Property RevPAR       $147       $184       $190       $176       $175
                                                                       
Same-Property Revenues     $115.5     $140.7     $142.4     $137.4     $536.0
Same-Property EBITDA       $22.4      $42.4      $44.1      $38.1      $147.0
                                                                       
                           First      Second
                           Quarter    Quarter
                           2013       2013
                                                                       
Same-Property Occupancy    79%        86%
Same-Property ADR          $202       $227
Same-Property RevPAR       $160       $195
                                                                       
Same-Property Revenues     $122.8     $148.5
Same-Property EBITDA       $25.6      $46.1
                                                                       

Notes:
These historical hotel operating results include information for all of the
hotels the Company owned as of June 30, 2013, except for the operating results
of Hotel Zetta (formerly Hotel Milano) for the first quarter of 2012. 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 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 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 Occupancy    73%        83%        86%        77%        80%
Same-Property ADR          $194       $205       $209       $202       $203
Same-Property RevPAR       $143       $171       $180       $156       $162
                                                                       
Same-Property Revenues     $99.7      $118.0     $121.0     $111.9     $450.5
Same-Property EBITDA       $20.3      $33.8      $36.3      $27.8      $118.1
                                                                       
                           First      Second
                           Quarter    Quarter
                           2013       2013
                                                                       
Same-Property Occupancy    78%        86%
Same-Property ADR          $200       $216
Same-Property RevPAR       $156       $185
                                                                       
Same-Property Revenues     $106.6     $126.3
Same-Property EBITDA       $23.8      $38.5
                                                                       

Notes:
These historical hotel operating results include information for all of the
hotels the Company owned as of June 30, 2013, except for the operating results
of Hotel Zetta (formerly Hotel Milano) for the first quarter of 2012 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 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 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 Occupancy     87%        93%        93%        93%        91%
Same-Property ADR           $201       $282       $268       $316       $268
Same-Property RevPAR        $175       $263       $249       $293       $245
                                                                        
Same-Property Revenues      $15.8      $22.7      $21.5      $25.6      $85.5
Same-Property EBITDA        $2.1       $8.6       $7.8       $10.3      $28.9
                                                                        
                            First      Second
                            Quarter    Quarter
                            2013       2013
                                                                        
Same-Property Occupancy     86%        88%
Same-Property ADR           $212       $292
Same-Property RevPAR        $183       $258
                                                                        
Same-Property Revenues      $16.3      $22.2
Same-Property EBITDA        $1.7       $7.6
                                                                        

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. 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.


Contact:

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