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Press release from Business Wire

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

Thursday, November 01, 2012

Chesapeake Lodging Trust Reports Third Quarter Results; Pro Forma RevPAR Increased 8.9% and Pro Forma Adjusted Hotel EBITDA Margin Increased 200 Basis Points08:00 EDT Thursday, November 01, 2012 ANNAPOLIS, Md. (Business Wire) -- Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended September 30, 2012. HIGHLIGHTSPro Forma RevPAR – 8.9% increase for comparable 10-hotel portfolio over the same period in 2011. Pro Forma Adjusted Hotel EBITDA Margin – 200 basis point increase for comparable 10-hotel portfolio over the same period in 2011. Acquisitions– Acquired the 520-room W Chicago – Lakeshore in Chicago, Illinois for $126.0 million and the 429-room Hyatt Regency Mission Bay Spa and Marina in San Diego, California for $62.0 million; Subsequent to quarter end, acquired the 222-room The Hotel Minneapolis in Minneapolis, Minnesota for $46.0 million. Renovations– Successfully completed the comprehensive renovation and repositioning of the Hotel Adagio; Subsequent to quarter end, completed the 35-room expansion at the W Chicago – City Center. Equity offerings– Successfully completed a $125 million preferred share offering and $138 million common share offering. Financings– Closed on $130 million of secured financings; Subsequent to quarter end, amended our revolving credit facility, increasing facility size, reducing cost of borrowings, and extending the initial term. “We are very pleased with the strong performance of our hotel portfolio and the significant progress we made on various fronts in the third quarter,” said James L. Francis, Chesapeake Lodging Trust's President and Chief Executive Officer. “The favorable execution and timing of the preferred and common share offerings allowed us to continue to take advantage of opportunities by acquiring three hotels we believe possess significant upside. Furthermore, the completion of our transformational renovation at the Hotel Adagio has given it a unique and sophisticated style and we are already starting to see promising results.” “Our recent financing activity, including the amendment to our revolving credit facility, strengthened our balance sheet by allowing us to extend maturities, take further advantage of the attractive interest rate environment by lowering our cost of borrowing, and adding flexibility and additional capacity for future acquisition opportunities,” said Douglas W. Vicari, Chesapeake Lodging Trust's Executive Vice President and Chief Financial Officer. CONSOLIDATED FINANCIAL RESULTS The following is a summary of the consolidated financial results for the three and nine months ended September 30, 2012 (in millions, except per share amounts):     Three months ended Nine months ended September 30, September 30, 2012(1)   2011(2) 2012(3)   2011(4)   Total revenue $ 75.9 $ 51.8 $ 193.2 $ 116.1   Net income available to common shareholders $ 7.0 $ 5.7 $ 15.3 $ 6.1 Net income per diluted share $ 0.21 $ 0.18 $ 0.47 $ 0.21   FFO available to common shareholders $ 14.2 $ 11.0 $ 35.6 $ 18.0 FFO per diluted share $ 0.43 $ 0.35 $ 1.10 $ 0.63   AFFO available to common shareholders $ 16.8 $ 11.5 $ 38.7 $ 22.7 AFFO per diluted share $ 0.51 $ 0.36 $ 1.20 $ 0.79   Corporate EBITDA $ 22.3 $ 15.3 $ 53.8 $ 26.1   Adjusted Corporate EBITDA $ 24.8 $ 15.8 $ 56.9 $ 30.8     (1)   Includes results of operations of 12 hotels for the full period and two hotels for part of the period. (2) Includes results of operations of nine hotels for the full period and one hotel for part of the period. (3) Includes results of operations of 11 hotels for the full period and three hotels for part of the period. (4) Includes results of operations of five hotels for the full period and five hotels for part of the period.   HOTEL OPERATING RESULTS Management assesses the operating performance of its hotels irrespective of the hotel owner during the periods compared. Included in the following table are comparisons, on a pro forma basis, of occupancy, average daily rate (ADR), room revenue per available room (RevPAR), Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin, the key operating metrics that management uses to assess the performance of its hotels. The key operating metrics include the hotel operating results of 10 of the Trust's 14 hotels owned as of September 30, 2012. The key operating metrics do not include operating results for the Holiday Inn New York City Midtown – 31st Street, as the hotel opened for business on January 19, 2012, the Hotel Adagio, as the hotel was under renovation during the period, and the W Chicago – Lakeshore and the Hyatt Regency Mission Bay Spa and Marina, as both hotels were acquired during the period. The following is a summary of the key operating metrics for the three and nine months ended September 30, 2012 (in thousands, except pro forma ADR and pro forma RevPAR):             Three months ended Nine months ended September 30, September 30,   2012     2011   Change   2012     2011   Change   Pro forma occupancy 85.4 % 84.3 % 110 bps 80.6 % 78.5 % 210 bps Pro forma ADR $ 193.04 $ 179.47 7.6 % $ 187.79 $ 175.16 7.2 % Pro forma RevPAR $ 164.85 $ 151.38 8.9 % $ 151.28 $ 137.54 10.0 %   Pro forma Adjusted Hotel EBITDA $ 23,192 $ 20,378 13.8 % $ 59,296 $ 50,479 17.5 % Pro forma Adjusted Hotel EBITDA Margin 37.2 % 35.2 % 200 bps 34.3 % 31.7 % 260 bps   Funds from operations (FFO), Adjusted FFO (AFFO), net income before interest, income taxes, and depreciation and amortization (Corporate EBITDA), Adjusted Corporate EBITDA, Hotel EBITDA, Adjusted Hotel EBITDA and Adjusted Hotel EBITDA Margin are non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission. See the discussion included in this press release for information regarding these non-GAAP financial measures. ACQUISITION ACTIVITY On August 21, 2012, the Trust acquired the 520-room W Chicago - Lakeshore located in Chicago, Illinois for approximately $124.9 million, including acquired working capital. The Trust funded the acquisition with available cash on hand and a borrowing under its revolving credit facility. The Trust entered into a long-term management agreement with Starwood Hotels & Resorts Worldwide, Inc. to continue operating the hotel under the W flag. On September 7, 2012, the Trust acquired the 429-room Hyatt Regency Mission Bay Spa and Marina located in San Diego, California for approximately $59.8 million, including acquired working capital. The Trust funded the acquisition with available cash on hand and a borrowing under its revolving credit facility. The Trust assumed the existing management agreement with Hyatt Hotels Corporation. EQUITY OFFERINGS On July 17, 2012, the Trust completed an underwritten public offering of 5,000,000 of its 7.75% Series A Cumulative Redeemable Preferred Shares, including 600,000 shares sold pursuant to the underwriters' exercise of their over-allotment option. The Trust generated net proceeds of approximately $120.6 million after deducting underwriting fees and offering costs. The Trust used the net proceeds of the offering to repay outstanding borrowings under the Trust's revolving credit facility and for general business purposes. On September 18, 2012, the Trust completed an underwritten public offering of 7,475,000 common shares, including 975,000 shares sold pursuant to the underwriters' exercise of their option to purchase additional shares. The Trust generated net proceeds of approximately $132.6 million after deducting underwriting fees and offering costs. The Trust used the net proceeds of the offering to repay outstanding borrowings under the Trust's revolving credit facility and for general business purposes. FINANCING ACTIVITY On July 3, 2012, the Trust closed on a $60.0 million two-year term loan. The loan was provided by Wells Fargo Bank, N.A., and subject to certain customary conditions, provides for three one-year extensions. At the initial closing, $25.0 million was advanced by the lender and is secured by the 122-room Holiday Inn New York City Midtown – 31st Street. The remaining $35.0 million is expected to be advanced by the lender upon closing on the acquisition of the Hyatt Place New York Midtown South and satisfaction of certain customary closing conditions. Following the subsequent closing, the entire $60.0 million principal amount of the loan will be secured by both hotels. The loan bears interest equal to LIBOR, plus 3.25%. Contemporaneous with the closing of the term loan, the Trust entered into an interest rate swap to effectively fix the interest rate on the initial $25.0 million advance for the original two-year term at 3.75% per annum. Net proceeds from the initial advance under the loan were used to repay outstanding borrowings under the Trust's revolving credit facility and for general business purposes. On July 27, 2012, the Trust closed on a $70.0 million fixed-rate mortgage loan. The loan is secured by the 613-room Denver Marriott City Center and was provided by Western National Life Insurance Company. The loan has a term of 30 years, but is callable by the lender after 10 years, and the Trust expects the lender to call the loan at that time. The loan carries a fixed interest rate of 4.90% per annum, with principal and interest payments based on a 30-year amortization. Net proceeds from the loan were used to repay the remaining outstanding borrowings under the Trust's revolving credit facility and for general business purposes. DIVIDENDS On July 13, 2012, the Trust paid a dividend of $0.22 per share to its common shareholders of record as of June 30, 2012. On August 13, 2012, the Trust declared dividends in the amounts of $0.22 per share payable to its common shareholders and $0.4736 per share payable to its preferred shareholders, both of record as of September 28, 2012. Both dividends were paid on October 15, 2012. POST-QUARTER ACTIVITY On October 25, 2012, the Trust amended its credit agreement by (1) increasing the maximum size of the secured revolving credit facility, (2) lowering the interest rate spread over LIBOR charged on outstanding borrowings, and (3) extending the initial term. The amended credit agreement increases the maximum amount the Trust may borrow under the secured revolving credit facility from $200.0 million to $250.0 million, and also provides for the possibility of further future increases, up to a maximum of $375.0 million, in accordance with certain terms. The $50.0 million increase resulted from $25.0 million commitments provided by two new banks, PNC Bank, N.A. and TD Bank, N.A. The actual amount that the Trust can borrow under the secured revolving credit facility continues to be based on the value of the Trust's hotels included in the borrowing base, as defined in the amended credit agreement. The interest rate spread over LIBOR for borrowings under the secured revolving credit facility was reduced by 100 basis points to LIBOR, plus 1.75% - 2.75% (the spread over LIBOR based on the Trust's consolidated leverage ratio). The initial term of the amended credit agreement will now expire in March 2016, but the term may be extended for one year subject to satisfaction of certain customary conditions. The amended credit agreement effected no other significant changes to the financial covenants, including the leverage and coverage ratios and minimum tangible net worth requirement, or other business terms of the secured revolving credit facility, as compared to those in effect prior to the amendment. On October 30, 2012, the Trust acquired the 222-room The Hotel Minneapolis located in Minneapolis, Minnesota for approximately $46.3 million, including acquired working capital. The Trust funded the acquisition with a borrowing under its revolving credit facility. The Trust entered into a management agreement with a subsidiary of HEI Hotels & Resorts to continue operating the hotel under the Autograph Collection by Marriott flag. As of October 31, 2012, after taking into consideration the recent preferred and common share offerings and financing activity, the acquisitions of the W Chicago – Lakeshore, the Hyatt Regency Mission Bay Spa and Marina and The Hotel Minneapolis, and the pending acquisition of the Hyatt Place New York Midtown South, the Trust had approximately $100 million to $125 million of remaining investment capacity based on its targeted leverage levels. 2012 OUTLOOK The Trust is updating its 2012 outlook to incorporate current operating trends and fundamentals, the recent common share offering and financing activity, the acquisition of The Hotel Minneapolis, and the pending acquisition of the Hyatt Place New York Midtown South expected at the end of the fourth quarter 2012 (in millions, except per share amounts):     Updated Guidance Previous Guidance Low   High Low   High Pro forma RevPAR increase over 2011(1) 8.75 % 9.25 % 8.5 % 9.5 % Net income available to common shareholders excluding amounts attributable to unvested time-based awards $ 19.8 $ 20.6 $ 15.8 $ 18.2 Adjusted Hotel EBITDA $ 91.0 $ 92.0 $ 88.9 $ 91.9 AFFO per diluted share $ 1.57 $ 1.60 $ 1.58 $ 1.66     (1)   For the comparable 10-hotel portfolio.   NON-GAAP FINANCIAL MEASURES The Trust reports the following seven non-GAAP financial measures that it believes are useful to investors as key measures of its operating performance: (1) FFO, (2) AFFO, (3) Corporate EBITDA, (4) Adjusted Corporate EBITDA, (5) Hotel EBITDA, (6) Adjusted Hotel EBITDA and (7) Adjusted Hotel EBITDA Margin. A reconciliation of these non-GAAP financial measures is included in the accompanying financial tables. FFO – The Trust calculates FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net income (calculated in accordance with GAAP), excluding depreciation and amortization, impairment charges, gains (losses) from sales of real estate, the cumulative effect of changes in accounting principles, and adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. By excluding the effect of depreciation and amortization and gains (losses) from sales of real estate, both of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, the Trust believes that FFO provides investors a useful financial measure to evaluate the Trust's operating performance. AFFO – The Trust further adjusts FFO for certain additional recurring and non-recurring items that are not in NAREIT's definition of FFO. Specifically, the Trust adjusts for hotel acquisition costs and non-cash amortization of intangible assets and unfavorable contract liabilities. The Trust believes that AFFO provides investors with another financial measure of its operating performance that provides for greater comparability of its core operating results between periods. Corporate EBITDA – Corporate EBITDA is defined as net income before interest, income taxes, and depreciation and amortization. The Trust believes that Corporate EBITDA provides investors a useful financial measure to evaluate the Trust's operating performance, excluding the impact of the Trust's capital structure (primarily interest expense) and the Trust's asset base (primarily depreciation and amortization). Adjusted Corporate EBITDA – The Trust further adjusts Corporate EBITDA for certain additional recurring and non-recurring items. Specifically, the Trust adjusts for hotel acquisition costs and non-cash amortization of intangible assets and unfavorable contract liabilities. The Trust believes that Adjusted Corporate EBITDA provides investors with another financial measure of its operating performance that provides for greater comparability of its core operating results between periods. Hotel EBITDA – Hotel EBITDA is defined as total revenues less total hotel operating expenses. The Trust believes that Hotel EBITDA provides investors a useful financial measure to evaluate the Trust's hotel operating performance. Adjusted Hotel EBITDA – The Trust further adjusts Hotel EBITDA for certain additional recurring and non-recurring items. Specifically, the Trust adjusts for non-cash amortization of intangible assets and unfavorable contract liabilities. The Trust believes that Adjusted Hotel EBITDA provides investors with another useful financial measure to evaluate the Trust's hotel operating performance. Adjusted Hotel EBITDA Margin – Adjusted Hotel EBITDA Margin is defined as Adjusted Hotel EBITDA as a percentage of total revenues. The Trust believes that Adjusted Hotel EBITDA Margin provides investors another useful financial measure to evaluate the Trust's hotel operating performance. CONFERENCE CALL The Trust will host a conference call on Thursday, November 1, 2012 at 10:00 a.m. Eastern Time to discuss its financial results. Interested individuals are invited to listen to the call by dialing (877) 683-0303 (U.S./Canadian callers) or (706) 643-5037 (International callers). The conference call ID is 41151490. A simultaneous webcast of the call will be available on the Trust's website at www.chesapeakelodgingtrust.com. It is recommended that participants call or log on 10 minutes ahead of the scheduled start time to ensure proper connection. A replay of the conference call will be available two hours after the live call until midnight on November 8, 2012. To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers). The conference call ID is 41151490. A webcast replay and transcript of the conference call will be archived and available on the Trust's website for 12 months. ABOUT CHESAPEAKE LODGING TRUST Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States. The Trust owns 15 hotels with an aggregate of 4,722 rooms in seven states and the District of Columbia. Additional information can be found on the Trust's website at www.chesapeakelodgingtrust.com. Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts, such as the Trust's expectations regarding the future Hotel EBITDA and Adjusted Hotel EBITDA of its existing and to-be-acquired hotels and the Trust's 2012 outlook.Such forward-looking statements include, but are not limited to, the expectation that the acquisition described will be consummated and within the anticipated timetable. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: the Trust's ability to complete acquisitions; the Trust's ability to continue to satisfy complex rules in order for it to remain a REIT for federal income tax purposes; and other risks and uncertainties associated with the Trust's business described in its filings with the SEC. Although the Trust believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of November 1, 2012, and the Trust undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Trust's expectations, except as required by law.     CHESAPEAKE LODGING TRUSTCONSOLIDATED BALANCE SHEETS(in thousands, except share data)     September 30, December 31,   2012     2011   (unaudited)   ASSETS Property and equipment, net $ 1,063,935 $ 879,224 Intangible assets, net 39,532 39,982 Cash and cash equivalents 27,838 20,960 Restricted cash 21,569 15,034 Accounts receivable, net 15,031 6,302 Prepaid expenses and other assets 14,120 4,370 Deferred financing costs, net   5,616     5,266   Total assets $1,187,641   $971,138       LIABILITIES AND SHAREHOLDERS' EQUITY Long-term debt $ 356,033 $ 407,736 Accounts payable and accrued expenses 38,242 21,475 Other liabilities   26,204     21,798   Total liabilities   420,479     451,009     Commitments and contingencies   Preferred shares, $.01 par; 100,000,000 shares authorized; Series A Cumulative Redeemable Preferred Shares; 5,000,000 shares and no shares issued and outstanding, respectively ($127,368 liquidation preference) 50 - Common shares, $.01 par value; 400,000,000 shares authorized; 39,610,393 shares and 32,161,620 shares issued and outstanding, respectively 396 322 Additional paid-in capital 798,645 543,861 Cumulative dividends in excess of net income (30,853 ) (22,924 ) Accumulated other comprehensive loss   (1,076)   (1,130) Total shareholders' equity   767,162     520,129     Total liabilities and shareholders' equity $1,187,641   $971,138           CHESAPEAKE LODGING TRUSTCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share and per share data)(unaudited)     Three Months Ended Nine Months Ended September 30, September 30,   2012     2011     2012     2011     REVENUE Rooms $ 58,632 $ 40,610 $ 148,394 $ 87,763 Food and beverage 14,488 9,305 38,299 24,392 Other   2,740     1,865     6,483     3,906   Total revenue   75,860     51,780     193,176     116,061     EXPENSES Hotel operating expenses: Rooms 12,620 9,117 33,297 20,548 Food and beverage 10,368 7,267 27,750 18,458 Other direct 1,357 814 3,193 1,886 Indirect   23,640     16,054     63,240     36,912   Total hotel operating expenses 47,985 33,252 127,480 77,804 Depreciation and amortization 7,215 5,319 20,422 12,070 Air rights contract amortization 130 130 390 390 Corporate general and administrative: Share-based compensation 783 827 2,348 2,286 Hotel acquisition costs 2,474 353 2,917 4,270 Other   2,227     1,900     6,258     5,228   Total operating expenses   60,814     41,781     159,815     102,048     Operating income 15,046 9,999 33,361 14,013   Interest income 74 16 96 140 Interest expense (5,425 ) (4,103 ) (15,615 ) (8,005 ) Loss on early extinguishment of debt   -     (208)   -     (208)   Income before income taxes 9,695 5,704 17,842 5,940   Income tax benefit (expense)   (662)   23     (552)   155     Net income 9,033 5,727 17,290 6,095   Preferred share dividends   (1,991)   -     (1,991)   -     Net income available to common shareholders $7,042   $5,727   $15,299   $6,095       EARNINGS PER SHARE:   Net income available to common shareholders $ 7,042 $ 5,727 $ 15,299 $ 6,095 Less: Dividends declared on unvested time-based awards (34 ) (61 ) (102 ) (181 ) Less: Undistributed earnings allocated to unvested time-based awards   -     -     -     -   Net income available to common shareholders excluding amounts attributable to unvested time-based awards $7,008   $5,666   $15,197   $5,914     Net income per common share - basic and diluted $ 0.21 $ 0.18 $ 0.47 $ 0.21   Weighted-average number of common shares outstanding - basic and diluted 32,971,594 31,794,886 32,254,777 28,611,438     CHESAPEAKE LODGING TRUSTCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)   Nine Months Ended September 30,   2012     2011     Cash flows from operating activities: Net income $ 17,290 $ 6,095 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,422 12,070 Air rights contract amortization 390 390 Ground lease asset amortization 60 - Deferred financing costs amortization 1,488 1,711 Premium on mortgage loan amortization (158 ) (53 ) Unfavorable contract liability amortization (294 ) - Loss on early extinguishment of debt - 208 Share-based compensation 2,348 2,286 Changes in assets and liabilities: Accounts receivable, net (7,177 ) (2,802 ) Prepaid expenses and other assets (345 ) (1,386 ) Accounts payable and accrued expenses 10,057 6,596 Other liabilities   19     (9) Net cash provided by operating activities   44,100     25,106     Cash flows from investing activities: Acquisition of hotels, net of cash acquired (184,702 ) (308,616 ) Deposits on hotel acquisitions (2,000 ) (7,000 ) Improvements and additions to hotels (17,530 ) (1,473 ) Investment in hotel construction loan (6,478 ) - Change in restricted cash   (5,160)   (7,877) Net cash used in investing activities   (215,870)   (324,966)   Cash flows from financing activities: Proceeds from sale of common shares, net of underwriting fees 132,756 230,291 Proceeds from sale of preferred shares, net of underwriting fees 121,062 - Payment of offering costs related to sale of common and preferred shares (637 ) (481 ) Net borrowings (repayments) under revolving credit facility (145,000 ) 55,000 Proceeds from issuance of mortgage debt 95,000 225,000 Principal prepayment on mortgage debt - (60,000 ) Scheduled principal payments on mortgage debt (1,545 ) (295 ) Payment of deferred financing costs (1,838 ) (3,037 ) Purchase of interest rate cap - (262 ) Payment of dividends to common shareholders (20,529 ) (16,516 ) Repurchase of common shares   (621)   (209) Net cash provided by financing activities   178,648     429,491   Net increase in cash 6,878 129,631 Cash and cash equivalents, beginning of period   20,960     10,551   Cash and cash equivalents, end of period $27,838   $140,182     CHESAPEAKE LODGING TRUSTRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except share and per share data)(unaudited)   The following table reconciles net income available to common shareholders excluding amounts attributable to unvested time-based awards to FFO and AFFO available to common shareholders for the three and nine months ended September 30, 2012 and 2011:     Three Months Ended September 30, Nine Months Ended September 30, 2012   2011 2012   2011   Net income available to common shareholders excluding amounts attributable to unvested time-based awards $ 7,008 $ 5,666 $ 15,197 $ 5,914 Add: Depreciation and amortization   7,215   5,319   20,422   12,070 FFO available to common shareholders 14,223 10,985 35,619 17,984   Add: Hotel acquisition costs 2,474 353 2,917 4,270 Non-cash amortization(1)   60   138   181   409 AFFO available to common shareholders $16,757$11,476$38,717$22,663   FFO per common share - basic and diluted $ 0.43 $ 0.35 $ 1.10 $ 0.63   AFFO per common share - basic and diluted $ 0.51 $ 0.36 $ 1.20 $ 0.79     (1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, unfavorable contract liability, and air rights contract.   The following table reconciles net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three and nine months ended September 30, 2012 and 2011:     Three Months Ended September 30, Nine Months Ended September 30,   2012       2011     2012       2011     Net income $ 9,033 $ 5,727 $ 17,290 $ 6,095 Add: Depreciation and amortization 7,215 5,319 20,422 12,070 Interest expense 5,425 4,103 15,615 8,005 Loss on early extinguishment of debt - 208 - 208 Income tax expense (benefit) 662 (23 ) 552 (155 ) Less: Interest income   (74)   (16)   (96)   (140) Corporate EBITDA 22,261 15,318 53,783 26,083   Add: Hotel acquisition costs 2,474 353 2,917 4,270 Non-cash amortization(1)   60     138     181     409   Adjusted Corporate EBITDA $24,795   $15,809   $56,881   $30,762       (1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, unfavorable contract liability, and air rights contract.   The following table calculates pro forma Hotel EBITDA, Adjusted Hotel EBITDA and Adjusted Hotel EBITDA Margin for the Trust's comparable 10-hotel portfolio for the three and nine months ended September 30, 2012 and 2011:       Three Months Ended September 30, Nine Months Ended September 30,   2012       2011     2012       2011     Total revenue $ 62,377 $ 57,832 $ 172,885 $ 159,329 Less: Total hotel operating expenses   39,116     37,463     113,380     108,870   Hotel EBITDA 23,261 20,369 59,505 50,459   Less: Non-cash amortization(1)   (69)   9     (209)   20   Adjusted Hotel EBITDA $23,192   $20,378   $59,296   $50,479     Adjusted Hotel EBITDA Margin 37.2 % 35.2 % 34.3 % 31.7 %     (1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, and unfavorable contract liability.   The following table calculates forecasted Hotel EBITDA and Adjusted Hotel EBITDA for the year ending December 31, 2012:     Year Ending December 31, 2012 Low High   Total revenue $ 277,750 $ 279,250 Less: Total hotel operating expenses   186,470     186,970   Hotel EBITDA 91,280 92,280   Less:Non-cash amortization(1)   (280)   (280) Adjusted Hotel EBITDA $91,000   $92,000       (1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, and unfavorable contract liability.   The following table reconciles forecasted net income available to common shareholders excluding amounts attributable to unvested time-based awards to FFO and AFFO available to common shareholders for the year ending December 31, 2012:   Year Ending December 31, 2012 Low   High   Net income available to common shareholders excluding amounts attributable to unvested time-based awards $ 19,770 $ 20,640 Add: Depreciation and amortization   30,290   30,290 FFO available to common shareholders 50,060 50,930   Add: Hotel acquisition costs 3,270 3,270 Non-cash amortization(1)   240   240 AFFO available to common shareholders $53,570$54,440   FFO per diluted common share $ 1.47 $ 1.50   AFFO per diluted common share $ 1.57 $ 1.60   Weighted-average number of diluted common shares outstanding 34,049 34,049     (1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, unfavorable contract liability, and air rights contract.         CHESAPEAKE LODGING TRUSTCURRENT HOTEL PORTFOLIO     Purchase Price Hotel Location Rooms (in millions) Acquisition Date   1 Hyatt Regency Boston Boston, MA 502 $ 112.00 March 18, 2010 2 Hilton Checkers Los Angeles Los Angeles, CA 188 46.00 June 1, 2010 3 Courtyard Anaheim at Disneyland Resort Anaheim, CA 153 25.00 July 30, 2010 4 Boston Marriott Newton Newton, MA 430 77.25 July 30, 2010 5 Le Meridien San Francisco San Francisco, CA 360 143.00 December 15, 2010 6 Homewood Suites Seattle Convention Center Seattle, WA 195 53.00 May 2, 2011 7 W Chicago - City Center Chicago, IL 403 128.80 May 10, 2011 8 Hotel Indigo San Diego Gaslamp Quarter San Diego, CA 210 55.50 June 17, 2011 9 Courtyard Washington Capitol Hill/Navy Yard Washington, DC 204 68.00 June 30, 2011 10 Hotel Adagio San Francisco, CA 171 42.25 July 8, 2011 11 Denver Marriott City Center Denver, CO 613 119.00 October 3, 2011 12 Holiday Inn New York City Midtown - 31st Street New York, NY 122 52.20 December 22, 2011 13 W Chicago - Lakeshore Chicago, IL 520 126.00 August 21, 2012 14 Hyatt Regency Mission Bay Spa and Marina San Diego, CA 429 62.00 September 7, 2012 15 The Hotel Minneapolis Minneapolis, MN 222 46.00 October 30, 2012     4,722 $ 1,156.00 Chesapeake Lodging TrustDouglas W. Vicari, 410-972-4142