CHSP Chesapeake Lodging Trust

Chesapeake Lodging Trust (NYSE:CHSP), a lodging real estate investment trust (REIT), reported today its financial results for the quarter ended March 31, 2017.

HIGHLIGHTS

• RevPAR: 3.6% decrease for the 22-hotel portfolio and 2.5% decrease for the 15-hotel portfolio over the same period in 2016.
• Adjusted Hotel EBITDA Margin: 180 basis point decrease to 26.7% for the 22-hotel portfolio and 130 basis point decrease to 28.4% for the 15-hotel portfolio over the same period in 2016.
• Adjusted Hotel EBITDA: $36.0 million.
• Adjusted Corporate EBITDA: $31.1 million.
• Net income available to common shareholders: $5.6 million or $0.09 per diluted common share.
• Adjusted FFO: $24.2 million or $0.41 per diluted common share.
• Financing: Repaid $125.0 million secured term loan. Subsequent to quarter end, closed on a five-year, $225.0 million unsecured term loan.

“We are pleased with our results for the first quarter which exceeded our expectations earlier in the year, albeit those expectations were tempered by the challenging environment we have been operating in for the last 18 months,” said James L. Francis, Chesapeake Lodging Trust’s President and Chief Executive Officer. “Although we still have not yet seen a meaningful increase in lodging demand from corporate customers, we remain cautiously optimistic that the current pro-growth political agenda will lead to an uptick in lodging demand in the quarters ahead. Furthermore, we expect to be negatively impacted during 2017 with the temporary closure and expansion of the Moscone Center in San Francisco and as we complete renovations at several of our larger hotels, all of which we strongly believe will enhance shareholder value in the long term. As a result of these short-term headwinds and the continued challenging operating environment, we are maintaining our previously provided full year 2017 outlook.”

CONSOLIDATED FINANCIAL RESULTS

The following is a summary of the consolidated financial results for the three months ended March 31, 2017 and 2016 (in millions, except share and per share amounts):

  Three Months Ended March 31, 2017       2016 Total revenue $ 134.9 $ 140.6   Net income available to common shareholders $ 5.6 $ 7.6 Net income per diluted common share $ 0.09 $ 0.13   Adjusted Hotel EBITDA $ 36.0 $ 40.1   Adjusted Corporate EBITDA $ 31.1 $ 34.8   AFFO available to common shareholders $ 24.2 $ 26.0 AFFO per diluted common share $ 0.41 $ 0.44   Weighted-average number of diluted common shares outstanding 58,995,589 59,247,219  

HOTEL OPERATING RESULTS

During 2017, the Trust expects the following seven of its 22 hotels to be negatively impacted as a result of (1) the expected negative impact on lodging demand in San Francisco resulting from the temporary closure and expansion of the Moscone Center and/or (2) significant guestroom renovations undergoing during the year: Le Meridien San Francisco, JW Marriott San Francisco Union Square, Hyatt Centric Fisherman’s Wharf, Hotel Adagio San Francisco, Autograph Collection, Boston Marriott Newton, Denver Marriott City Center, and Hyatt Regency Mission Bay Spa and Marina. As such, the Trust is reporting key operating metrics for a 15-hotel portfolio in addition to the 22-hotel portfolio. Included in the following table are comparisons of the key operating metrics for the 22-hotel portfolio and the 15-hotel portfolio for the three months ended March 31, 2017 and 2016 (in thousands, except for ADR and RevPAR):

  Three Months Ended March 31, 2017       2016       Change

22-Hotel Portfolio

Occupancy 76.5 % 78.8 % (230) bps ADR $ 214.69 $ 216.28 (0.7)% RevPAR $ 164.16 $ 170.35 (3.6)% Adjusted Hotel EBITDA $ 35,987 $ 40,051 (10.1)% Adjusted Hotel EBITDA Margin 26.7 % 28.5 % (180) bps

15-Hotel Portfolio

Occupancy 78.4 % 78.3 % 10 bps ADR $ 199.50 $ 204.76 (2.6)% RevPAR $ 156.38 $ 160.43 (2.5)% Adjusted Hotel EBITDA $ 21,322 $ 23,091 (7.7)% Adjusted Hotel EBITDA Margin 28.4 % 29.7 % (130) bps  

Hotel EBITDA, Adjusted Hotel EBITDA, Adjusted Hotel EBITDA Margin, Corporate EBITDA, Adjusted Corporate EBITDA, FFO, FFO available to common shareholders and AFFO available to common shareholders 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.

FINANCING ACTIVITY

On March 9, 2017, the Trust repaid at maturity an existing $125.0 million term loan secured by the Royal Palm South Beach Miami, a Tribute Portfolio Resort, with a borrowing under its revolving credit facility.

On April 21, 2017, the Trust closed on a five-year, $225.0 million unsecured term loan provided by a syndicate of banks. The term loan provides for the possibility of future increases, up to a maximum amount borrowed of $375.0 million, in accordance with the terms of the term loan agreement. The loan bears interest equal to LIBOR, plus 1.45% - 2.20% (the spread over LIBOR based on the Trust’s consolidated leverage ratio). Contemporaneous with the closing of the unsecured term loan, the Trust entered into an interest rate swap to fix LIBOR at 1.86% for the five-year term. As of April 25, 2017, the effective interest rate on the unsecured term loan was 3.31%. Proceeds from the term loan were used to repay outstanding borrowings under the revolving credit facility. The term loan agreement contains the same financial covenants as those contained in the Trust's revolving credit facility.

CAPITAL MARKETS ACTIVITY

The Trust has not sold any common shares under its continuous at-the-market (ATM) program or repurchased any common shares under its share repurchase program during 2017.

DIVIDENDS

On January 13, 2017, the Trust paid dividends in the amounts of $0.40 per share to its common shareholders and $0.484375 per share to its preferred shareholders, both of record as of December 30, 2016. On March 16, 2017, the Trust declared dividends in the amounts of $0.40 per share payable to its common shareholders and $0.484375 per share payable to its preferred shareholders, both of record as of March 31, 2017. Both dividends were paid on April 14, 2017.

2017 OUTLOOK

The Trust reaffirms its previously provided full year 2017 outlook and is now providing its outlook for the second quarter 2017. The outlook assumes no future acquisitions, dispositions, or financing transactions (in millions, except RevPAR and per share amounts):

        Second Quarter

2017 Outlook

Full Year

2017 Outlook

Low       High Low       High CONSOLIDATED:   Net income available to common shareholders $ 16.1 $ 18.0 $ 42.9 $ 48.9 Net income per diluted common share $ 0.27 $ 0.30 $ 0.73 $ 0.83   Adjusted Corporate EBITDA $ 49.8 $ 51.8 $ 169.3 $ 176.3   AFFO available to common shareholders $ 35.7 $ 37.5 $ 124.2 $ 130.2 AFFO per diluted common share $ 0.60 $ 0.64 $ 2.10 $ 2.20   Corporate cash general and administrative expense $ 2.7 $ 2.9 $ 10.3 $ 11.3 Corporate non-cash general and administrative expense $ 1.9 $ 1.9 $ 7.5 $ 7.5   Weighted-average number of diluted common shares outstanding 59.1 59.1 59.1 59.1   HOTEL PORTFOLIO:  

22-Hotel Portfolio

RevPAR $ 196.00 $ 200.00 $ 183.00 $ 187.00 RevPAR change as compared to 2016 (6.0 )% (4.0 )% (3.5 )% (1.5 )% Adjusted Hotel EBITDA $ 54.3 $ 56.5 $ 187.0 $ 195.0 Adjusted Hotel EBITDA Margin 34.2 % 34.9 % 31.2 % 31.9 % Adjusted Hotel EBITDA Margin change as compared to 2016 (275) bps (200) bps (170) bps (100) bps  

15-Hotel Portfolio

RevPAR $ 207.00 $ 211.00 $ 185.00 $ 189.00 RevPAR change as compared to 2016 (2.0 )%

0.0

%

(1.0 )% 1.0 % Adjusted Hotel EBITDA $ 37.4 $ 38.8 $ 121.4 $ 126.6 Adjusted Hotel EBITDA Margin 38.4 % 39.2 % 34.3 % 35.0 % Adjusted Hotel EBITDA Margin change as compared to 2016 (200) bps (125) bps (115) bps (40) bps  

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) Hotel EBITDA, (2) Adjusted Hotel EBITDA, (3) Adjusted Hotel EBITDA Margin, (4) Corporate EBITDA, (5) Adjusted Corporate EBITDA, (6) FFO, (7) FFO available to common shareholders and (8) AFFO available to common shareholders. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measure are included in the accompanying financial tables.

Hotel EBITDA – Hotel EBITDA is defined as net income before interest, income taxes, depreciation and amortization, air rights amortization, corporate general and administrative, and hotel acquisition costs. The Trust believes that Hotel EBITDA provides investors a useful financial measure to evaluate the Trust’s hotel operating performance, excluding the impact of the Trust’s capital structure (primarily interest), the Trust’s asset base (primarily depreciation and amortization), and the Trust’s corporate-level expenses (corporate general and administrative and hotel acquisition costs).

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, and gain (losses) from sales of real estate, which is a non-recurring item. The Trust believes that Adjusted Hotel EBITDA provides investors with another useful financial measure to evaluate the Trust’s hotel operating performance, excluding the effect of these non-cash items.

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.

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, and gains (losses) from sales of real estate, which is a non-recurring item. 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.

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 of depreciable real estate, 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.

CONFERENCE CALL

The Trust will host a conference call on Tuesday, April 25, 2017 at 5:00 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 1623769. 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 May 2, 2017. To access the replay, dial (855) 859-2056 (U.S./Canadian callers) or (404) 537-3406 (International callers). The conference call ID is 1623769. 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 22 hotels with an aggregate of 6,694 rooms in nine 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 second quarter and full year 2017 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: U.S. economic conditions generally and the real estate market and the lodging industry specifically; management and performance of the Trust's hotels; supply and demand for hotel rooms in the Trust's markets; the Trust's competition; the Trust’s ability to continue to satisfy complex rules in order for it to remain a REIT for federal income tax purposes; the effects of any acquisitions, dispositions or financing transactions the Trust may undertake; 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 April 25, 2017, 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)   March 31, 2017 December 31, 2016 (unaudited)   ASSETS Property and equipment, net $ 1,880,471 $ 1,882,869 Intangible assets, net 35,690 35,835 Cash and cash equivalents 40,960 43,060 Restricted cash 34,169 36,128 Accounts receivable, net 19,759 19,966 Prepaid expenses and other assets 21,932   17,516   Total assets $ 2,032,981   $ 2,035,374     LIABILITIES AND SHAREHOLDERS’ EQUITY Long-term debt $ 754,519 $ 737,310 Accounts payable and accrued expenses 62,582 64,581 Other liabilities 44,670   44,808   Total liabilities 861,771   846,699     Commitments and contingencies  

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

50 50

Common shares, $.01 par value; 400,000,000 shares authorized;60,096,316 shares and 59,671,964 shares issued and outstanding, respectively

601 597 Additional paid-in capital 1,305,298 1,304,364 Cumulative dividends in excess of net income (134,739 ) (116,297 ) Accumulated other comprehensive loss —   (39 ) Total shareholders’ equity 1,171,210   1,188,675   Total liabilities and shareholders’ equity $ 2,032,981   $ 2,035,374       SUPPLEMENTAL CREDIT INFORMATION: Fixed charge coverage ratio(1) 3.16 3.24 Leverage ratio(1) 33.3 % 31.9 % ______________ (1)   Calculated as defined under the Trust’s revolving credit facility.   CHESAPEAKE LODGING TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (unaudited)   Three Months Ended March 31, 2017       2016 REVENUE Rooms $ 98,901 $ 103,772 Food and beverage 29,312 30,555 Other 6,661   6,284   Total revenue 134,874   140,611     EXPENSES Hotel operating expenses: Rooms 25,322 25,501 Food and beverage 22,239 22,766 Other direct 1,356 1,558 Indirect 49,815   50,580   Total hotel operating expenses 98,732 100,405 Depreciation and amortization 18,787 18,484 Air rights contract amortization 130 130 Corporate general and administrative 4,935   5,266   Total operating expenses 122,584   124,285     Operating income 12,290 16,326   Interest expense (7,798 ) (8,210 )   Income before income taxes 4,492 8,116   Income tax benefit 3,527   1,954     Net income 8,019 10,070   Preferred share dividends (2,422 ) (2,422 ) Net income available to common shareholders $ 5,597   $ 7,648     Net income per common share—basic and diluted $ 0.09 $ 0.13   Weighted-average number of common shares outstanding: Basic 58,995,589 58,681,525 Diluted 58,995,589 59,247,219   CHESAPEAKE LODGING TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)   Three Months Ended March 31, 2017       2016   Cash flows from operating activities: Net income $ 8,019 $ 10,070 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,787 18,484 Air rights contract amortization 130 130 Deferred financing costs amortization 407 466 Share-based compensation 1,990 2,374 Other (155 ) (208 ) Changes in assets and liabilities: Accounts receivable, net 207 (5,984 ) Prepaid expenses and other assets (4,429 ) (2,575 ) Accounts payable and accrued expenses (1,248 ) 2,323 Other liabilities (13 ) (11 )

Net cash provided by operating activities

23,695   25,069     Cash flows from investing activities: Improvements and additions to hotels (16,389 ) (3,850 ) Change in restricted cash 1,959   (2,768 ) Net cash used in investing activities (14,430 ) (6,618 )   Cash flows from financing activities: Borrowings under revolving credit facility 155,000 25,000 Repayments under revolving credit facility (10,000 ) (15,000 ) Scheduled principal payments on mortgage debt (128,162 ) (2,649 ) Payment of deferred financing costs (36 ) — Deposit on loan application — (3,200 ) Payment of dividends to common shareholders (24,693 ) (23,575 ) Payment of dividends to preferred shareholders (2,422 ) (2,422 ) Repurchase of common shares (1,052 ) (194 ) Net cash used in financing activities (11,365 ) (22,040 ) Net decrease in cash (2,100 ) (3,589 ) Cash and cash equivalents, beginning of period 43,060   50,544   Cash and cash equivalents, end of period $ 40,960   $ 46,955    

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 Hotel EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the 22-hotel portfolio for the three months ended March 31, 2017 and 2016:   Three Months Ended March 31, 2017       2016 Net income $ 8,019 $ 10,070

Add:

Interest expense

7,798 8,210 Depreciation and amortization 18,787 18,484 Air rights contract amortization 130 130 Corporate general and administrative 4,935 5,266

Less:

Income tax benefit

(3,527 ) (1,954 ) Hotel EBITDA 36,142 40,206  

Less:

Non-cash amortization(1)

(155 ) (155 ) Adjusted Hotel EBITDA $ 35,987   $ 40,051   Total revenue $ 134,874 $ 140,611   Adjusted Hotel EBITDA Margin 26.7 % 28.5 % _____________ (1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, and unfavorable contract liability.  

The following table reconciles net income to Corporate EBITDA and Adjusted Corporate EBITDA for the three months ended March 31, 2017 and 2016:

  Three Months Ended March 31, 2017       2016 Net income $ 8,019 $ 10,070

Add:

Interest expense

7,798 8,210 Depreciation and amortization 18,787 18,484

Less:

Income tax benefit

(3,527 ) (1,954 ) Corporate EBITDA 31,077 34,810

Less:

Non-cash amortization(1)

(25 ) (25 ) Adjusted Corporate EBITDA $ 31,052   $ 34,785   _____________

(1)

 

Reflects 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 FFO, FFO available to common shareholders, and AFFO available to common shareholders for the three months ended March 31, 2017 and 2016:

  Three Months Ended March 31, 2017       2016 Net income $ 8,019 $ 10,070

Add:

Depreciation and amortization

18,787   18,484   FFO 26,806 28,554  

Less:

Preferred share dividends

(2,422 ) (2,422 ) Dividends declared on unvested time-based awards (124 ) (144 )

Undistributed earnings allocated to unvested time-based awards

—   —   FFO available to common shareholders 24,260 25,988  

Less:

Non-cash amortization(1)

(25 ) (25 ) AFFO available to common shareholders $ 24,235   $ 25,963     FFO per common share—basic and diluted $ 0.41 $ 0.44   AFFO per common share—basic and diluted $ 0.41 $ 0.44 _____________ (1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.  

The following table reconciles forecasted net income to Hotel EBITDA, Adjusted Hotel EBITDA, and Adjusted Hotel EBITDA Margin for the 22-hotel portfolio for the three months ending June 30, 2017 and year ending December 31, 2017:

        Three Months Ending June 30, 2017 Year Ending December 31, 2017 Low       High Low       High Net income $ 18,650 $ 20,500 $ 53,100 $ 59,100

Add:

Interest expense

8,190 8,190 32,900 32,900 Income tax expense 3,350 3,550 2,000 3,000 Depreciation and amortization 19,590 19,590 81,350 81,350 Air rights contract amortization 130 130 520 520 Corporate general and administrative 4,500   4,700   17,750   18,750   Hotel EBITDA 54,410 56,660 187,620 195,620  

Less:

Non-cash amortization(1)

(160 ) (160 ) (620 ) (620 ) Adjusted Hotel EBITDA $ 54,250   $ 56,500   $ 187,000   $ 195,000     Total revenue $ 158,650 $ 161,700 $ 600,000 $ 612,000   Adjusted Hotel EBITDA Margin 34.2 % 34.9 % 31.2 % 31.9 % _____________ (1)   Reflects 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 Corporate EBITDA and Adjusted Corporate EBITDA for the three months ending June 30, 2017 and year ending December 31, 2017:

        Three Months Ending June 30, 2017 Year Ending December 31, 2017 Low       High Low       High Net income $ 18,650 $ 20,500 $ 53,100 $ 59,100

Add:

Interest expense

8,190 8,190 32,900 32,900 Income tax expense 3,350 3,550 2,000 3,000 Depreciation and amortization 19,590   19,590   81,350   81,350   Corporate EBITDA 49,780 51,830 169,350 176,350

Less:

Non-cash amortization(1)

(30 ) (30 ) (100 ) (100 ) Adjusted Corporate EBITDA $ 49,750   $ 51,800   $ 169,250   $ 176,250   _____________ (1)   Reflects non-cash amortization of ground lease asset, deferred franchise costs, deferred key money, unfavorable contract liability, and air rights contract.  

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 June 30, 2017 and year ending December 31, 2017:

        Three Months Ending June 30, 2017 Year Ending December 31, 2017 Low       High Low       High Net income $ 18,650 $ 20,500 $ 53,100 $ 59,100

Add:

Depreciation and amortization

19,590   19,590   81,350   81,350   FFO 38,240 40,090 134,450 140,450  

Less:

Preferred share dividends

(2,420 ) (2,420 ) (9,690 ) (9,690 ) Dividends declared on unvested time-based awards (120 ) (120 ) (490 ) (490 ) Undistributed earnings allocated to unvested time-based awards —   —   —   —   FFO available to common shareholders 35,700 37,550 124,270 130,270  

Less:

Non-cash amortization(1)

(30 ) (30 ) (100 ) (100 ) AFFO available to common shareholders $ 35,670   $ 37,520   $ 124,170   $ 130,170     FFO per common share: Basic $ 0.60 $ 0.64 $ 2.11 $ 2.21 Diluted $ 0.60 $ 0.64 $ 2.10 $ 2.20   AFFO per common share: Basic $ 0.60 $ 0.64 $ 2.10 $ 2.21 Diluted $ 0.60 $ 0.64 $ 2.10 $ 2.20   Weighted-average number of common shares outstanding: Basic 59,033 59,033 59,024 59,024 Diluted 59,082 59,082 59,093 59,093 _____________ (1)   Reflects 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   Hotel Location Rooms Acquisition Date 1   Hyatt Regency Boston Boston, MA 502 March 18, 2010 2 Hilton Checkers Los Angeles Los Angeles, CA 193 June 1, 2010 3 Boston Marriott Newton Newton, MA 430 July 30, 2010 4 Le Meridien San Francisco San Francisco, CA 360 December 15, 2010 5 Homewood Suites Seattle Convention Center Seattle, WA 195 May 2, 2011 6 W Chicago – City Center Chicago, IL 403 May 10, 2011 7 Hotel Indigo San Diego Gaslamp Quarter San Diego, CA 210 June 17, 2011 8 Courtyard Washington Capitol Hill/Navy Yard Washington, DC 204 June 30, 2011 9 Hotel Adagio San Francisco, Autograph Collection San Francisco, CA 171 July 8, 2011 10 Denver Marriott City Center Denver, CO 613 October 3, 2011 11 Hyatt Herald Square New York New York, NY 122 December 22, 2011 12 W Chicago – Lakeshore Chicago, IL 520 August 21, 2012 13 Hyatt Regency Mission Bay Spa and Marina San Diego, CA 429 September 7, 2012 14 The Hotel Minneapolis, Autograph Collection Minneapolis, MN 222 October 30, 2012 15 Hyatt Place New York Midtown South New York, NY 185 March 14, 2013 16 W New Orleans – French Quarter New Orleans, LA 97 March 28, 2013 17 Le Meridien New Orleans New Orleans, LA 410 April 25, 2013 18 Hyatt Centric Fisherman’s Wharf San Francisco, CA 316 May 31, 2013 19 Hyatt Centric Santa Barbara Santa Barbara, CA 200 June 27, 2013 20 JW Marriott San Francisco Union Square San Francisco, CA 337 October 1, 2014 21 Royal Palm South Beach Miami, a Tribute Portfolio Resort Miami Beach, FL 393 March 9, 2015 22 Ace Hotel and Theater Downtown Los Angeles Los Angeles, CA 182 April 30, 2015 6,694

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Chesapeake Lodging TrustDouglas W. Vicari, 571-349-9452