Chesapeake Lodging Trust Reports Second Quarter Results; Pro Forma RevPAR Increased 9.7% And Pro Forma Adjusted Hotel EBITDA Margin Increased 240 Basis Points

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 based on a 30-year amortization. Proceeds from the loan were used to repay the remaining outstanding borrowings under the Trust’s revolving credit facility and for general business purposes.

On July 31, 2012, the Trust announced that it had entered into a definitive agreement to acquire a full-service hotel located in San Diego, California for $62.0 million. The Trust intends to fund the acquisition with available cash and cash equivalents and by borrowing under its revolving credit facility. The Trust expects the acquisition to close in the third quarter 2012, subject to customary closing conditions, but can give no assurance that the acquisition will be consummated during that time period, or at all.

As of July 31, 2012, after taking into consideration the recent preferred share offering and financing activity, and the pending acquisitions of the hotel in San Diego, California and the Hyatt Place New York Midtown South, the Trust had approximately $200 million of remaining investment capacity based on its targeted leverage levels. The Trust is currently negotiating to acquire a full-service hotel in the central business district of a major market for approximately $125 million and expects that the transaction would close in the third quarter 2012, but can give no assurance that the acquisition will be consummated during that time period, or at all.

2012 OUTLOOK

The Trust is updating its 2012 outlook to incorporate current operating trends and fundamentals, the recent preferred share offering and financing activity, the anticipated acquisition of two hotels in the third quarter 2012 described above, and the acquisition of the previously announced Hyatt Place New York Midtown South in 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)			8.5%			9.5%			7.5%			9.0%
Net income available to common shareholders		$	15.8		$	18.2		$	20.5		$	23.1
Adjusted Hotel EBITDA		$	88.9		$	91.9		$	83.2		$	86.7
AFFO per diluted share		$	1.58		$	1.66		$	1.60		$	1.69
(1) For the comparable 10-hotel portfolio owned as of June 30, 2012.

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.

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