Chesapeake Lodging Trust Reports Fourth Quarter Results and Increases Quarterly Dividend by 9%

Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended December 31, 2012.

HIGHLIGHTS

• Pro Forma RevPAR – 5.5% increase for comparable 10-hotel portfolio over the same period in 2011. Excluding the impact of certain non-recurring events that occurred during the quarter, pro forma RevPAR increase would have been between 7.75% - 8.00%.
• Pro Forma Adjusted Hotel EBITDA Margin – 150 basis point increase for comparable 10-hotel portfolio over the same period in 2011.
• Acquisitions – Acquired the 222-room The Hotel Minneapolis, Autograph Collection in Minneapolis, Minnesota for $46.0 million.
• Equity offerings – Subsequent to year end, successfully completed a $173.0 million common share offering.
• Financings – Amended its revolving credit facility, increasing facility size, reducing cost of borrowings, and extending the initial term. Subsequent to year end, closed on a $32.0 million mortgage loan.
• Dividends – Increased first quarter 2013 dividend by 9% to $0.24 per common share (4.3% annualized yield based on the closing price of the Trust’s common shares on February 20, 2013).

“The successful common share offering completed subsequent to year end was an important milestone for us,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. “With the offering, we have now been able to achieve a market capitalization in excess of $1 billion. We are very proud of the progress we have made since Chesapeake completed its IPO in January 2010. In the three years since, we’ve been able to assemble an impressive portfolio of 15 hotels located in top markets across the United States. With this latest equity offering, we have enhanced our ability to continue taking advantage of attractive acquisition opportunities as we proceed through 2013.”

CONSOLIDATED FINANCIAL RESULTS

The following is a summary of the consolidated financial results for the three months and year ended December 31, 2012 (in millions, except per share amounts):

				Three months ended												Year ended
				December 31,												December 31,
					2012(1)						2011(2)						2012(3)						2011(4)
Total revenue				$	85.1					$	56.1					$	278.3					$	172.2
Net income available to common shareholders				$	7.5					$	2.9					$	22.8					$	9.0
Net income per diluted common share				$	0.19					$	0.09					$	0.66					$	0.30
FFO available to common shareholders				$	15.9					$	9.2					$	51.5					$	27.2
FFO per diluted common share				$	0.40					$	0.29					$	1.51					$	0.92
AFFO available to common shareholders				$	16.0					$	10.1					$	54.8					$	32.7
AFFO per diluted common share				$	0.41					$	0.32					$	1.61					$	1.11
Corporate EBITDA				$	23.8					$	14.4					$	77.6					$	40.5
Adjusted Corporate EBITDA				$	24.0					$	15.3					$	80.9					$	46.0

(1) Includes results of operations of 14 hotels for the full period and one hotel for part of the period.

(2) Includes results of operations of 10 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 four hotels for part of the period.

(4) Includes results of operations of five hotels for the full period and six 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 15 hotels owned as of December 31, 2012. The key operating metrics do not include operating results for the Holiday Inn New York City Midtown – 31^st Street, as the hotel opened for business on January 19, 2012; the Hotel Adagio San Francisco, as the hotel was under renovation during the period; and the W Chicago – Lakeshore, the Hyatt Regency Mission Bay Spa and Marina, and The Hotel Minneapolis, Autograph Collection, as these hotels were acquired during 2012. The following is a summary of the key operating metrics for the three months and year ended December 31, 2012 (in thousands, except pro forma ADR and pro forma RevPAR):

				Three months ended																	Year ended
				December 31,																	December 31,
					2012						2011					Change						2012						2011					Change
Pro forma occupancy					74.6	%					74.2	%				40 bps						79.0	%					77.4	%				160 bps
Pro forma ADR				$	187.43					$	178.67					4.9	%				$	187.70					$	176.04					6.6	%
Pro forma RevPAR				$	139.90					$	132.57					5.5	%				$	148.28					$	136.23					8.8	%
Pro forma Adjusted Hotel EBITDA				$	19,786					$	18,121					9.2	%				$	79,082					$	68,600					15.3	%
Pro forma Adjusted Hotel EBITDA Margin					33.6	%					32.1	%				150 bps						34.1	%					31.8	%				230 bps

Pro forma RevPAR increase for the fourth quarter 2012 was negatively impacted by (1) cancellations related to travel disruptions caused by Superstorm Sandy in October 2012, (2) the early addition of 35 guestrooms at the W Chicago – City Center on October 19, 2012, which were originally scheduled to open January 1, 2013, and (3) the disruption from the renovation of the lobby and public spaces at the Le Meridien San Francisco. Excluding the estimated impact from these events, pro forma RevPAR increase for the fourth quarter 2012 and for the year ended December 31, 2012 would have been between 7.75% - 8.00% and between 9.4% - 9.5%, respectively.

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.

INVESTING ACTIVITY

On October 30, 2012, the Trust acquired the 222-room The Hotel Minneapolis, Autograph Collection 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 manage the hotel.

FINANCING 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 April 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.

DIVIDENDS

On October 15, 2012, the Trust paid dividends in the amounts of $0.22 per share to its common shareholders and $0.4736 per share to its preferred shareholders, both of record as of September 28, 2012. On December 13, 2012, the Trust declared dividends in the amounts of $0.22 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of December 31, 2012. Both dividends were paid on January 15, 2013.

On February 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 March 29, 2013. The dividends will be paid on April 15, 2013.

POST-QUARTER ACTIVITY

On February 6, 2013, the Trust completed an underwritten public offering of 8,337,500 common shares, including 1,087,500 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares. The Trust generated net proceeds of approximately $165.8 million after deducting underwriting fees and estimated offering costs. The Trust used a portion of the net proceeds of the offering to repay outstanding borrowings under its revolving credit facility and intends to use the remaining net proceeds to invest in future acquisitions of hotels and for general corporate purposes.

On February 15, 2013, the Trust closed on a $32.0 million, 10-year fixed-rate mortgage loan. The loan carries a fixed interest rate of 4.11% per annum, with principal and interest based on a 30-year amortization. Proceeds from the loan will be used to invest in future acquisitions of hotels and for general corporate purposes.

As of February 21, 2013, after taking into consideration the recent common share offering and financing activity, and the pending acquisition of the Hyatt Place New York Midtown South, the Trust had approximately $350 million of remaining investment capacity based on its targeted leverage levels.

2013 OUTLOOK

Based on the operating trends and fundamentals of the Trust’s current 15-hotel portfolio and the Trust’s anticipated performance for the Hyatt Place New York Midtown South, the acquisition of which is expected to close at the end of the first quarter 2013, the Trust estimates these assets will produce the following results for the first quarter and full year 2013 (in millions, except per share amounts):

				First Quarter												Full Year
				2013 Outlook												2013 Outlook
				Low						High						Low						High
Pro forma RevPAR increase over 2012(1)					3.5	%					4.5	%					5.0	%					7.0	%
Net income (loss) available to common shareholders, excluding
amounts attributable to unvested time-based awards				$	(5.9	)				$	(5.2	)				$	32.7					$	36.4
Adjusted Hotel EBITDA				$	14.5					$	15.0					$	120.3					$	124.3
AFFO per diluted share				$	0.12					$	0.14					$	1.56					$	1.64

(1) For the current 15-hotel portfolio.

The Trust’s 2013 outlook assumes no additional acquisitions, other than the Hyatt Place New York Midtown South acquisition described above. See the accompanying financial tables for historical pro forma hotel operating results for the Trust’s current 15-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. 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.

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, February 21, 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 92770071. 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 February 28, 2013. To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers). The conference call ID is 92770071. 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 2013 outlook. Such forward-looking statements include, but are not limited to, the expectation that the acquisition described will be consummated and within the timetable anticipated and the contemplated use of proceeds of its recent common share offering and financing activity. 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 February 21, 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)
							December 31,
							2012				2011
ASSETS
Property and equipment, net							$ 1,107,722				$ 879,224
Intangible assets, net							39,382				39,982
Cash and cash equivalents							33,194				20,960
Restricted cash							23,460				15,034
Accounts receivable, net							8,384				6,302
Prepaid expenses and other assets							14,056				4,370
Deferred financing costs, net							6,630				5,266
Total assets							$ 1,232,828				$ 971,138
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt							$ 405,208				$ 407,736
Accounts payable and accrued expenses							34,868				21,475
Other liabilities							25,944				21,798
Total liabilities							466,020				451,009
Commitments and contingencies
Preferred shares, $.01 par value; 100,000,000 shares authorized;
Series A Cumulative Redeemable Preferred Shares; 5,000,000 shares and no
shares issued and outstanding, respectively ($127,422 liquidation preference)							50				-
Common shares, $.01 par value; 400,000,000 shares authorized;
39,763,930 shares and 32,161,620 shares issued and outstanding, respectively							398				322
Additional paid-in capital							799,278				543,861
Cumulative dividends in excess of net income							(32,089)				(22,924)
Accumulated other comprehensive loss							(829)				(1,130)
Total shareholders' equity							766,808				520,129
Total liabilities and shareholders' equity							$ 1,232,828				$ 971,138

CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
						Three Months Ended December 31,												Year Ended December 31,
							2012						2011						2012						2011
						(unaudited)
REVENUE
Rooms						$	61,871					$	40,967					$	210,265					$	128,730
Food and beverage							19,374						13,389						57,673						37,781
Other							3,855						1,774						10,338						5,680
Total revenue							85,100						56,130						278,276						172,191
EXPENSES
Hotel operating expenses:
Rooms							14,862						9,562						48,159						30,110
Food and beverage							13,928						9,224						41,678						27,682
Other direct							1,944						899						5,137						2,785
Indirect							27,628						18,638						90,868						55,550
Total hotel operating expenses							58,362						38,323						185,842						116,127
Depreciation and amortization							8,509						6,312						28,931						18,382
Air rights contract amortization							130						130						520						520
Corporate general and administrative:
Share-based compensation							817						808						3,165						3,094
Hotel acquisition costs							77						811						2,994						5,081
Other							1,874						1,674						8,132						6,902
Total operating expenses							69,769						48,058						229,584						150,106
Operating income							15,331						8,072						48,692						22,085
Interest income							103						5						199						145
Interest expense							(5,361	)					(4,863	)					(20,976	)					(12,868	)
Loss on early extinguishment of debt							-						-						-						(208	)
Income before income taxes							10,073						3,214						27,915						9,154
Income tax expense							(186	)					(273	)					(738	)					(118	)
Net income							9,887						2,941						27,177						9,036
Preferred share dividends							(2,422	)					-						(4,413	)					-
Net income available to common shareholders						$	7,465					$	2,941					$	22,764					$	9,036
EARNINGS PER SHARE:
Net income available to common shareholders						$	7,465					$	2,941					$	22,764					$	9,036
Less: Dividends declared on unvested time-based awards							(75	)					(61	)					(177	)					(242	)
Less: Undistributed earnings allocated to unvested time-based
awards							-						-						-						-
Net income available to common shareholders, excluding
amounts attributable to unvested time-based awards						$	7,390					$	2,880					$	22,587					$	8,794
Net income per common share - basic and diluted						$	0.19					$	0.09					$	0.66					$	0.30
Weighted-average number of common shares
outstanding - basic and diluted							39,391,677						31,794,886						34,048,752						29,413,841

CHESAPEAKE LODGING TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
					Year Ended December 31,
						2012						2011
Cash flows from operating activities:
Net income					$	27,177					$	9,036
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization						28,931						18,382
Air rights contract amortization						520						520
Ground lease asset amortization						80						20
Deferred financing costs amortization						2,081						2,189
Premium on mortgage loan amortization						(211	)					(105	)
Unfavorable contract liability amortization						(392	)					(98	)
Loss on early extinguishment of debt						-						208
Share-based compensation						3,165						3,094
Changes in assets and liabilities:
Accounts receivable, net						(197	)					1,371
Prepaid expenses and other assets						18						(363	)
Accounts payable and accrued expenses						6,552						2,472
Other liabilities						13						(18	)
Net cash provided by operating activities						67,737						36,708
Cash flows from investing activities:
Acquisition of hotels, net of cash acquired						(231,051	)					(483,702	)
Deposit on hotel acquisition						(700	)					-
Receipt of deposit on hotel acquisition						-						2,000
Improvements and additions to hotels						(23,847	)					(3,389	)
Investment in hotel construction loan						(7,810	)					-
Change in restricted cash						(7,051	)					(6,900	)
Net cash used in investing activities						(270,459	)					(491,991	)
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						(647	)					(491	)
Borrowings under revolving credit facility						198,000						292,000
Repayments under revolving credit facility						(293,000	)					(192,000	)
Proceeds from issuance of mortgage debt						95,000						225,000
Principal prepayment on mortgage debt						-						(60,000	)
Scheduled principal payments on mortgage debt						(2,317	)					(781	)
Payment of deferred financing costs						(3,445	)					(4,920	)
Purchase of interest rate cap						-						(262	)
Payment of dividends to common shareholders						(29,290	)					(22,936	)
Payment of dividends to preferred shareholders						(2,368	)					-
Repurchase of common shares						(795	)					(209	)
Net cash provided by financing activities						214,956						465,692
Net increase in cash						12,234						10,409
Cash and cash equivalents, beginning of period						20,960						10,551
Cash and cash equivalents, end of period					$	33,194					$	20,960

CHESAPEAKE LODGING TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except 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 months and year ended December 31, 2012 and 2011:

								Three Months Ended December 31,										Year Ended December 31,
									2012					2011					2012					2011
			Net income available to common shareholders, excluding
			amounts attributable to unvested time-based awards					$	7,390				$	2,880				$	22,587				$	8,794
			Add:	Depreciation and amortization					8,509					6,312					28,931					18,382
			FFO available to common shareholders						15,899					9,192					51,518					27,176
			Add:	Hotel acquisition costs					77					811					2,994					5,081
				Non-cash amortization(1)					61					60					242					470
			AFFO available to common shareholders					$	16,037				$	10,063				$	54,754				$	32,727
			FFO per common share - basic and diluted					$	0.40				$	0.29				$	1.51				$	0.92
			AFFO per common share - basic and diluted					$	0.41				$	0.32				$	1.61				$	1.11

(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 months and year ended December 31, 2012 and 2011:

									Three Months Ended December 31,												Year Ended December 31,
										2012						2011						2012						2011
			Net income						$	9,887					$	2,941					$	27,177					$	9,036
			Add:	Depreciation and amortization						8,509						6,312						28,931						18,382
				Interest expense						5,361						4,863						20,976						12,868
				Loss on early extinguishment of debt						-						-						-						208
				Income tax expense						186						273						738						118
			Less:	Interest income						(103	)					(5	)					(199	)					(145	)
			Corporate EBITDA							23,840						14,384						77,623						40,467
			Add:	Hotel acquisition costs						77						811						2,994						5,081
				Non-cash amortization(1)						61						60						242						470
			Adjusted Corporate EBITDA						$	23,978					$	15,255					$	80,859					$	46,018

(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 months and year ended December 31, 2012 and 2011:

								Three Months Ended December 31,												Year Ended December 31,
									2012						2011						2012						2011
			Total revenue					$	58,833					$	56,489					$	231,718					$	215,819
			Less: Total hotel operating expenses						38,978						38,298						152,358						147,169
			Hotel EBITDA						19,855						18,191						79,360						68,650
			Less:	Non-cash amortization(1)					(69	)					(70	)					(278	)					(50	)
			Adjusted Hotel EBITDA					$	19,786					$	18,121					$	79,082					$	68,600
			Adjusted Hotel EBITDA Margin						33.6	%					32.1	%					34.1	%					31.8	%

(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 three months ending March 31, 2013:

									Three Months Ending March 31, 2013
									Low						High
			Total revenue						$	69,200					$	70,400
			Less: Total hotel operating expenses							54,630						55,330
			Hotel EBITDA							14,570						15,070
			Less:	Non-cash amortization(1)						(70	)					(70	)
			Adjusted Hotel EBITDA						$	14,500					$	15,000

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

The following table reconciles forecasted net loss available to common shareholders, excluding amounts attributable to unvested time-based awards to FFO and AFFO available to common shareholders for the three months ending March 31, 2013:

								Three Months Ending March 31, 2013
								Low						High
			Net loss available to common shareholders, excluding amounts
			attributable to unvested time-based awards					$	(5,880	)				$	(5,230	)
			Add:	Depreciation and amortization					8,800						8,800
			FFO available to common shareholders						2,920						3,570
			Add:	Hotel acquisition costs					2,470						2,470
				Non-cash amortization(1)					60						60
			AFFO available to common shareholders					$	5,450					$	6,100
			FFO per diluted common share					$	0.07					$	0.08
			AFFO per diluted common share					$	0.12					$	0.14
			Weighted-average number of diluted common shares outstanding						44,403						44,403

(1) Includes non-cash amortization of ground lease asset, deferred franchise costs, 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					$	368,800					$	376,100
			Less: Total hotel operating expenses						248,280						251,580
			Hotel EBITDA						120,520						124,520
			Less:	Non-cash amortization(1)					(270	)					(270	)
			Adjusted Hotel EBITDA					$	120,250					$	124,250

(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, 2013:

									Year Ending December 31, 2013
									Low					High
			Net income available to common shareholders, excluding amounts
			attributable to unvested time-based awards						$	32,680				$	36,380
			Add:	Depreciation and amortization						37,880					37,880
			FFO available to common shareholders							70,560					74,260
			Add:	Hotel acquisition costs						2,470					2,470
				Non-cash amortization(1)						250					250
			AFFO available to common shareholders						$	73,280				$	76,980
			FFO per diluted common share						$	1.50				$	1.58
			AFFO per diluted common share						$	1.56				$	1.64
			Weighted-average number of diluted common shares outstanding							47,015					47,015

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

CHESAPEAKE LODGING TRUST
SUPPLEMENTAL PRO FORMA HOTEL OPERATING RESULTS
(in thousands, except pro forma ADR and pro forma RevPAR)
(unaudited)
The following table includes pro forma 2012 hotel operating results for the Trust's current 15-hotel portfolio:
				Three Months Ended																								Year Ended
				March 31, 2012						June 30, 2012						September 30, 2012						December 31, 2012						December 31, 2012
Pro forma occupancy					71.0	%					82.2	%					85.6	%					74.9	%					78.4	%
Pro forma ADR				$	163.71					$	197.58					$	196.63					$	188.08					$	187.45
Pro forma RevPAR				$	116.17					$	162.36					$	168.31					$	140.81					$	146.92
Pro forma total revenue				$	67,869					$	92,250					$	95,365					$	86,301					$	341,785
Less: Pro forma total hotel operating expenses					54,261						60,454						62,070						59,064						235,849
Pro forma Hotel EBITDA				$	13,608					$	31,796					$	33,295					$	27,237					$	105,936

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				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				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
												4,722				$	1,156.00