Chesapeake Lodging Trust Reports Second Quarter Results

Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended June 30, 2013.

HIGHLIGHTS
  • Pro Forma RevPAR: 7.7% increase for comparable 19-hotel portfolio over the same period in 2012.
  • Pro Forma Adjusted Hotel EBITDA Margin: 170 basis point increase for comparable 19-hotel portfolio over the same period in 2012.
  • Acquisitions: Acquired the 410-room W New Orleans for $65.0 million, the 313-room Hyatt Fisherman’s Wharf for $103.5 million, and the 200-room Hyatt Santa Barbara for $61.0 million.
  • Financings: Closed on a $60.0 million, seven-year loan at 3.63%. Subsequent to quarter end, refinanced an existing $130.0 million loan, replacing it with a $92.5 million, seven-year loan at 3.50% and a $93.0 million, 10-year loan at 4.25%.
  • Dividends: Increased third quarter 2013 dividend by 8.3% to $0.26 per common share (4.5% annualized yield based on the closing price of the Trust’s common shares on August 2, 2013).

“We are excited about our accomplishments in the second quarter. We were able to prudently deploy proceeds from our February common share offering by acquiring three hotels, all with significant upside potential,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. “Furthermore, we also successfully completed a refinancing that further strengthened our balance sheet by both lowering our cost of debt and extending our debt maturities.”

Mr. Francis continued, “Our hotel portfolio also turned in an outstanding quarter, reaching a second quarter occupancy level of over 85% which allowed our operators to continue pushing daily rates. We are very proud of our hotel margin expansion of 170 basis points which was a result of our continued focus on asset management initiatives to reduce or limit increases in expenses.”

CONSOLIDATED FINANCIAL RESULTS

The following is a summary of the consolidated financial results for the three and six months ended June 30, 2013 (in millions, except share and per share amounts):
       
Three months ended Six months ended
June 30, June 30,

2013(1)
     

2012(2)

2013(3)
     

2012(4)
 
Total revenue $ 115.6 $ 67.0 $ 186.2 $ 117.3
 
Net income available to common shareholders $ 14.6 $ 9.1 $ 9.7 $ 8.3
Net income per diluted common share $ 0.30 $ 0.28 $ 0.21 $ 0.26
 
FFO available to common shareholders $ 25.4 $ 15.7 $ 29.2 $ 21.4
FFO per diluted common share $ 0.53 $ 0.49 $ 0.63 $ 0.67
 
AFFO available to common shareholders $ 26.6 $ 15.9 $ 33.5 $ 22.0
AFFO per diluted common share $ 0.56 $ 0.50 $ 0.72 $ 0.69
 
Corporate EBITDA $ 37.2 $ 22.3 $ 46.5 $ 31.5
 
Adjusted Corporate EBITDA $ 38.5 $ 22.5 $ 50.7 $ 32.1
 

Weighted-average number of common shares outstanding - basic and diluted
47,862,652 31,910,921 46,187,216 31,892,431
 

__________
(1)   Includes results of operations of 17 hotels for the full period and three hotels for part of the period.
(2) Includes results of operations of 12 hotels for the full period.
(3) Includes results of operations of 15 hotels for the full period and five hotels for part of the period.
(4) Includes results of operations of 11 hotels for the full period and one hotel 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 19 of the Trust’s 20 hotels owned as of June 30, 2013. The key operating metrics do not include operating results for the Hyatt Place New York Midtown South, as the hotel does not have comparable prior year operating results given it was newly developed in 2013. The following is a summary of the key operating metrics for the three and six months ended June 30, 2013 (in thousands, except pro forma ADR and pro forma RevPAR):
 
  Three months ended       Six months ended
June 30, June 30,
2013       2012       Change 2013       2012       Change
 
Pro forma occupancy 85.3 % 82.0 % 330 bps 78.9 % 77.0 % 190 bps
Pro forma ADR $ 203.20 $ 196.06 3.6% $ 188.04 $ 182.36 3.1%
Pro forma RevPAR $ 173.25 $ 160.84 7.7% $ 148.45 $ 140.39 5.7%
 
Pro forma Adjusted Hotel EBITDA $ 41,500 $ 36,061 15.1% $ 59,676 $ 52,612 13.4%

Pro forma Adjusted Hotel EBITDA Margin
34.2 % 32.5 % 170 bps 28.5 % 26.9 % 160 bps
 

Funds from operations (FFO), FFO available to common shareholders, Adjusted FFO (AFFO) available to common shareholders, 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.

INVESTING ACTIVITY

On April 25, 2013, the Trust acquired the 410-room W New Orleans located in New Orleans, Louisiana for approximately $65.7 million, including acquired working capital. The Trust funded the acquisition with available cash on hand. The Trust entered into a management agreement with Starwood Hotels & Resorts to continue managing the hotel.

On May 31, 2013, the Trust acquired the 313-room Hyatt Fisherman’s Wharf located in San Francisco, California for approximately $102.4 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 management agreement with Evolution Hospitality to manage the hotel under a franchise agreement with Hyatt Hotels Corporation.

On June 27, 2013, the Trust acquired the 200-room Hyatt Santa Barbara located in Santa Barbara, California for approximately $60.9 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 management agreement with HEI Hotels and Resorts to manage the hotel under a franchise agreement with Hyatt Hotels Corporation.

FINANCING ACTIVITY

On May 3, 2013, the Trust closed on a $60.0 million, seven-year, fixed-rate mortgage loan secured by the Boston Marriott Newton. The loan carries a fixed interest rate of 3.63% per annum, with principal and interest payments based on a 25-year principal amortization.

DIVIDENDS

On April 15, 2013, the Trust paid dividends in the amounts of $0.24 per share to its common shareholders and $0.484375 per share to its preferred shareholders, both of record as of March 29, 2013. On May 21, 2013, the Trust declared dividends in the amounts of $0.24 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of June 28, 2013. Both dividends were paid on July 15, 2013.

POST-QUARTER ACTIVITY

On July 11, 2013, the Trust completed the refinancing of its $130.0 million term secured by the Le Meridien San Francisco and the W Chicago – City Center, which was scheduled to mature on July 8, 2014. The term loan was refinanced with two individual fixed-rate mortgage loans with an aggregate principal amount of $185.5 million. The first new loan is a $92.5 million, seven-year, fixed-rate mortgage loan secured by the Le Meridien San Francisco. The loan carries a fixed interest rate of 3.50% per annum, with principal and interest payments based on a 25-year principal amortization. The second new loan is a $93.0 million, 10-year, fixed-rate mortgage loan secured by the W Chicago – City Center. The loan carries a fixed interest rate of 4.25% per annum, with principal and interest payments based on a 25-year principal amortization.

On August 5, 2013, the Trust declared dividends in the amounts of $0.26 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of September 30, 2013. The dividends will be paid on October 15, 2013.

2013 OUTLOOK

The Trust is updating its 2013 outlook to incorporate its second quarter results, recent operating trends and fundamentals, the acquisitions of the Hyatt Fisherman’s Wharf and the Hyatt Santa Barbara, and the refinancing of the $130.0 million term loan. The revised outlook assumes no additional financing transactions or acquisitions beyond those described above (in millions, except per share amounts):
             

Third Quarter 2013
Guidance
Low High
Pro forma RevPAR increase over 2012(1) 3.0 % 4.0 %
Adjusted Hotel EBITDA $ 41.6 $ 42.9
AFFO per diluted share $ 0.57 $ 0.60
 

Full Year 2013
                     
Updated Guidance Previous Guidance
Low High Low High
Pro forma RevPAR increase over 2012(1) 5.0 % 6.0 % 5.0 % 7.0 %
Adjusted Hotel EBITDA $ 132.8 $ 136.0 $ 126.3 $ 130.3
AFFO per diluted share $ 1.74 $ 1.80 $ 1.64 $ 1.72
 

__________
(1)   For updated guidance, based on comparable 19-hotel portfolio. For previous guidance, based on a 15-hotel portfolio as described in the Trust’s Q1 2013 earnings release.
 

NON-GAAP FINANCIAL MEASURES

The Trust reports the following eight non-GAAP financial measures that it believes are useful to investors as key measures of its operating performance: (1) FFO, (2) FFO available to common shareholders, (3) AFFO available to common shareholders, (4) Corporate EBITDA, (5) Adjusted Corporate EBITDA, (6) Hotel EBITDA, (7) Adjusted Hotel EBITDA and (8) Adjusted Hotel EBITDA Margin. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are 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.

FFO available to common shareholders – The Trust reduces FFO for preferred share dividends and dividends declared on and earnings allocated to unvested time-based awards (consistent with adjustments required by GAAP in reporting net income available to common shareholders and related per share amounts). FFO available to common shareholders provides investors another financial measure to evaluate the Trust’s operating performance after taking into account the interests of holders of the Trust’s preferred shares and unvested time-based awards.

AFFO available to common shareholders – The Trust further adjusts FFO available to common shareholders 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 liabilities, including air rights contracts, ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items. The Trust believes that AFFO available to common shareholders 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 liabilities, including air rights contracts, ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items. 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 liabilities, including ground lease assets and unfavorable contract liabilities, deferred franchise costs, and deferred key money, all of which are recurring items. 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 Monday, August 5, 2013 at 5:30 p.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 17429337. 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 August 12, 2013. To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers). The conference call ID is 17429337. 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 20 hotels with an aggregate of 5,932 rooms in eight 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 hotels and the Trust’s 2013 outlook. 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 August 5, 2013, and the Trust undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Trust’s expectations, except as required by law.
       
CHESAPEAKE LODGING TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 
 

June 30,
December 31,
2013 2012
(unaudited)
 
ASSETS
Property and equipment, net $ 1,428,975 $ 1,107,722
Intangible assets, net 39,081 39,382
Cash and cash equivalents 42,760 33,194
Restricted cash 27,332 23,460
Accounts receivable, net 22,926 8,384
Prepaid expenses and other assets 11,865 14,056
Deferred financing costs, net   7,027     6,630  
Total assets $ 1,579,966   $ 1,232,828  
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt $ 580,401 $ 405,208
Accounts payable and accrued expenses 49,966 34,868
Other liabilities   28,866     25,944  
Total liabilities   659,233     466,020  
 
Commitments and contingencies
 

Preferred shares, $.01 par value; 100,000,000 shares authorized; Series A Cumulative Redeemable Preferred Shares; 5,000,000 shares issued and outstanding ($127,422 liquidation preference)
50 50

Common shares, $.01 par value; 400,000,000 shares authorized; 48,587,425 shares and 39,763,930 shares issued and outstanding, respectively
486 398
Additional paid-in capital 966,247 799,278
Cumulative dividends in excess of net income (45,703 ) (32,089 )
Accumulated other comprehensive loss   (347 )   (829 )
Total shareholders' equity   920,733     766,808  
 
Total liabilities and shareholders' equity $ 1,579,966   $ 1,232,828  
 
 
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                   
 
Three Months Ended June 30, Six Months Ended June 30,
2013 2012 2013 2012
 
REVENUE
Rooms $ 86,946 $ 51,626 $ 138,490 $ 89,762
Food and beverage 24,313 13,344 40,225 23,811
Other   4,311     2,076     7,456     3,743  
Total revenue   115,570     67,046     186,171     117,316  
 
EXPENSES
Hotel operating expenses:
Rooms 19,167 10,953 33,186 20,677
Food and beverage 17,142 9,199 29,734 17,382
Other direct 1,936 930 3,707 1,836
Indirect   35,125     20,607     61,705     39,600  
Total hotel operating expenses 73,370 41,689 128,332 79,495
Depreciation and amortization 10,838 6,677 19,677 13,207
Air rights contract amortization 130 130 260 260
Corporate general and administrative 3,643 2,790 6,985 5,596
Hotel acquisition costs   1,237     134     4,136     443  
Total operating expenses   89,218     51,420     159,390     99,001  
 
Operating income 26,352 15,626 26,781 18,315
 
Interest income 25 19 243 22
Interest expense   (6,346 )   (5,106 )   (11,787 )   (10,190 )
 
Income before income taxes 20,031 10,539 15,237 8,147
 
Income tax benefit (expense)   (2,974 )   (1,486 )   (690 )   110  
 
Net income 17,057 9,053 14,547 8,257
 
Preferred share dividends   (2,422 )   -     (4,844 )   -  
 
Net income available to common shareholders $ 14,635   $ 9,053   $ 9,703   $ 8,257  
 
Net income per common share - basic and diluted $ 0.30 $ 0.28 $ 0.21 $ 0.26
 

Weighted-average number of common shares outstanding - basic and diluted
47,862,652 31,910,921 46,187,216 31,892,431
 
 
CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
       
 
Six Months Ended June 30,
2013 2012
 
Cash flows from operating activities:
Net income $ 14,547 $ 8,257

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 19,677 13,207
Air rights contract amortization 260 260
Deferred financing costs amortization 1,372 882
Share-based compensation 2,277 1,565
Other (275 ) (261 )
Changes in assets and liabilities:
Accounts receivable, net (12,458 ) (5,514 )
Prepaid expenses and other assets (1,658 ) (714 )
Accounts payable and accrued expenses 11,323 5,939
Other liabilities   788     23  
Net cash provided by operating activities   35,853     23,644  
 
Cash flows from investing activities:
Acquisition of hotels, net of cash acquired (331,058 ) -
Deposit on hotel acquisition - (2,000 )
Receipt of deposit on hotel acquisition 700 -
Improvements and additions to hotels (9,979 ) (11,679 )
Repayment of (investment in) hotel construction loan 7,810 (4,823 )
Change in restricted cash   (3,872 )   (2,631 )
Net cash used in investing activities   (336,399 )   (21,133 )
 
Cash flows from financing activities:
Proceeds from sale of common shares, net of underwriting fees 166,083 -
Payment of offering costs related to sale of common shares (215 ) -
Borrowings under revolving credit facility 105,000 13,000
Repayments under revolving credit facility (55,000 ) -
Proceeds from issuance of mortgage debt 127,000 -
Scheduled principal payments on mortgage debt (1,701 ) (973 )
Payment of deferred financing costs (1,769 ) (95 )
Deposits on loan applications (3,032 ) (1,400 )
Payment of dividends to common shareholders (20,322 ) (13,474 )
Payment of dividends to preferred shareholders (4,844 ) -
Repurchase of common shares   (1,088 )   (621 )
Net cash provided by (used in) financing activities   310,112     (3,563 )
Net increase (decrease) in cash 9,566 (1,052 )
Cash and cash equivalents, beginning of period   33,194     20,960  
Cash and cash equivalents, end of period $ 42,760   $ 19,908  
 
 
CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share data)
(unaudited)
 

The following table reconciles net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three and six months ended June 30, 2013 and 2012:

 
         
Three Months Ended June 30, Six Months Ended June 30,
2013       2012 2013       2012
 
Net income $ 17,057 $ 9,053 $ 14,547 $ 8,257
Add: Depreciation and amortization   10,838     6,677     19,677     13,207  
FFO 27,895 15,730 34,224 21,464
 
Less: Preferred share dividends (2,422 ) - (4,844 ) -
Dividends declared on unvested time-based awards (90 ) (34 ) (178 ) (68 )

Undistributed earnings allocated to unvested time-based awards
  (23 )   (10 )   -     -  
FFO available to common shareholders 25,360 15,686 29,202 21,396
 
Add: Hotel acquisition costs 1,237 134 4,136 443
Non-cash amortization(1)   50     60     112     120  
AFFO available to common shareholders $ 26,647   $ 15,880   $ 33,450   $ 21,959  
 
FFO per common share - basic and diluted $ 0.53 $ 0.49 $ 0.63 $ 0.67
 
AFFO per common share - basic and diluted $ 0.56 $ 0.50 $ 0.72 $ 0.69
 

__________
(1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
 
The following table reconciles net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three and six months ended June 30, 2013 and 2012:
 
         
Three Months Ended June 30, Six Months Ended June 30,
2013       2012 2013       2012
 
Net income $ 17,057 $ 9,053 $ 14,547 $ 8,257
Add: Depreciation and amortization 10,838 6,677 19,677 13,207
Interest expense 6,346 5,106 11,787 10,190
Income tax expense (benefit) 2,974 1,486 690 (110 )
Less: Interest income   (25 )   (19 )   (243 )   (22 )
Corporate EBITDA 37,190 22,303 46,458 31,522
 
Add: Hotel acquisition costs 1,237 134 4,136 443
Non-cash amortization(1)   50     60     112     120  
Adjusted Corporate EBITDA $ 38,477   $ 22,497   $ 50,706   $ 32,085  
 

__________
(1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, 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 19-hotel portfolio for the three and six months ended June 30, 2013 and 2012:

 
       
Three Months Ended June 30, Six Months Ended June 30,
2013       2012 2013       2012
 
Total revenue $ 121,487 $ 110,919 $ 209,315 $ 195,849
Less: Total hotel operating expenses   79,907     74,788     149,491     143,097  
Hotel EBITDA 41,580 36,131 59,824 52,752
 

Less: Non-cash amortization(1)
  (80 )   (70 )   (148 )   (140 )
Adjusted Hotel EBITDA $ 41,500   $ 36,061   $ 59,676   $ 52,612  
 
Adjusted Hotel EBITDA Margin 34.2 % 32.5 % 28.5 % 26.9 %
 

__________
(1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.
 
 
The following table calculates forecasted Hotel EBITDA and Adjusted Hotel EBITDA for the three months ending September 30, 2013:
 
Three Months Ending September 30, 2013
Low       High
 
Total revenue $ 122,400 $ 124,400
Less: Total hotel operating expenses   80,720     81,420  
Hotel EBITDA 41,680 42,980
 

Less: Non-cash amortization(1)
  (80 )   (80 )
Adjusted Hotel EBITDA $ 41,600   $ 42,900  

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

The following table reconciles forecasted net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three months ending September 30, 2013:
   
Three Months Ending September 30, 2013
Low       High
 
Net income $ 18,630 $ 19,930
Add: Depreciation and amortization   11,350     11,350  
FFO 29,980 31,280
 
Less: Preferred share dividends (2,420 ) (2,420 )
Dividends declared on unvested time-based awards (100 ) (100 )

Undistributed earnings allocated to unvested time-based awards
  -     -  
 
FFO available to common shareholders 27,460 28,760
 
Add: Hotel acquisition costs - -
Non-cash amortization(1)   50     50  
 
AFFO available to common shareholders $ 27,510   $ 28,810  
 
FFO per common share - basic and diluted $ 0.57 $ 0.60
 
AFFO per common share - basic and diluted $ 0.57 $ 0.60
 
Weighted-average number of diluted common shares outstanding 47,867 47,867

__________
(1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
 
The following table calculates forecasted Hotel EBITDA and Adjusted Hotel EBITDA for the year ending December 31, 2013:
       
Year Ending December 31, 2013
Low High
 
Total revenue $ 418,000 $ 424,000
Less: Total hotel operating expenses   284,950     287,700  
Hotel EBITDA 133,050 136,300
 
Less: Non-cash amortization(1)   (300 )   (300 )
Adjusted Hotel EBITDA $ 132,750   $ 136,000  

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

The following table reconciles forecasted net income to FFO, FFO available to common shareholders, and AFFO available to common shareholders for the year ending December 31, 2013:
   
Year Ending December 31, 2013
Low       High
 
Net income $ 44,600 $ 47,350
Add: Depreciation and amortization   42,780     42,780  
FFO 87,380 90,130
 
Less: Preferred share dividends (9,690 ) (9,690 )
Dividends declared on unvested time-based awards (360 ) (360 )
Undistributed earnings allocated to unvested time-based awards   -     -  
 
FFO available to common shareholders 77,330 80,080
 
Add: Hotel acquisition costs 4,140 4,140
Non-cash amortization(1)   220     220  
 
AFFO available to common shareholders $ 81,690   $ 84,440  
 
FFO per common share - basic and diluted $ 1.64 $ 1.70
 
AFFO per common share - basic and diluted $ 1.74 $ 1.80
 
Weighted-average number of diluted common shares outstanding 47,036 47,036

__________
(1)   Includes non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.
                       
CHESAPEAKE LODGING TRUST
CURRENT 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 193 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, Autograph Collection 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, Autograph Collection Minneapolis, MN 222 46.00 October 30, 2012
16 Hyatt Place New York Midtown South New York, NY 185 76.25 March 14, 2013
17 W New Orleans - French Quarter New Orleans, LA 97 25.50 March 28, 2013
18 W New Orleans New Orleans, LA 410 65.00 April 25, 2013
19 Hyatt Fisherman's Wharf San Francisco, CA 313 103.50 May 31, 2013
20 Hyatt Santa Barbara Santa Barbara, CA 200   61.00 June 27, 2013
 
5,932 $ 1,487.25

Copyright Business Wire 2010

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