Sunstone Hotel Investors, Inc. - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - 8-K - Sunstone Hotel Investors, Inc.	sho-20150806x8k.htm
EX-99.1 - EX-99.1 - Sunstone Hotel Investors, Inc.	sho-20150806ex99185f80c.htm

Exhibit 99.2

Supplemental Financial Information
August 6, 2015


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Supplemental Financial Information For the quarter ended June 30, 2015 August 6, 2015

Supplemental Financial Information
August 6, 2015

Table of Contents


CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR									3
About Sunstone									4
Forward-Looking Statement									5
Non-GAAP Financial Measures									6
CORPORATE FINANCIAL INFORMATION									9
Condensed Consolidated Balance Sheets Q2 2015 – Q2 2014									10
Consolidated Statements of Operations Q2 & YTD 2015/2014									12
Reconciliation of Net Income to EBITDA and Adjusted EBITDA Q2 & YTD 2015/2014									13
Reconciliation of Net Income to FFO Attributable to Common Stockholders and Adjusted FFO Attributable to Common Stockholders Q2 & YTD 2015/2014									14
Pro Forma Consolidated Statements of Operations Q2 2015 – Q3 2014, FY 2014									15
EARNINGS GUIDANCE									16
Earnings Guidance for Q3 and FY 2015									17
Reconciliation of Net Income to Adjusted EBITDA and Adjusted FFO Attributable to Common Stockholders Q3 and FY 2015									19
CAPITALIZATION									20
Comparative Capitalization Q2 2015 – Q2 2014									21
Consolidated Debt Summary Schedule									22
Consolidated Amortization and Debt Maturity Schedule									23
PROPERTY-LEVEL DATA									24

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Supplemental Financial Information
August 6, 2015

PROPERTY-LEVEL OPERATING STATISTICS	26
Q2 2015/2014	27
Q2 YTD 2015/2014	28
OPERATING STATISTICS BY BRAND & GEOGRAPHY	29
Comparable Portfolio Operating Statistics by Brand Q2 & YTD 2015/2014	30
Comparable Portfolio Property-Level Trailing 12 Month EBITDA Contribution by Brand	31
Comparable Portfolio Operating Statistics by Region Q2 & YTD 2015/2014	32
PROPERTY-LEVEL EBITDA & EBITDA MARGINS	33
Property-Level EBITDA Q2 & YTD 2015/2014	34
Property-Level EBITDA Q2 & YTD 2015/2014 Footnotes	35
Property-Level EBITDA Margins Q2 & YTD 2015/2014	36
Property-Level EBITDA Margins Q2 & YTD 2015/2014 Footnotes	37
Property-Level EBITDA Reconciliation Q2 2015	38
Property-Level EBITDA Reconciliation Q2 2014	39
Property-Level EBITDA Reconciliation Q2 2015/2014 Footnotes	28
Property-Level EBITDA Reconciliation Q2 YTD 2015	41
Property-Level EBITDA Reconciliation Q2 YTD 2014	42
Property-Level EBITDA Reconciliation Q2 YTD 2015/2014 Footnotes	43


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	Supplemental Financial Information August 6, 2015

CORPORATE PROFILE, FINANCIAL DISCLOSURES,
AND SAFE HARBOR

CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR

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	Supplemental Financial Information August 6, 2015

About Sunstone

Sunstone Hotel Investors, Inc. (NYSE:SHO) is a lodging real estate investment trust (REIT) that, as of August 6, 2015, has interests in 30 hotels held for investment comprised of 14,313 rooms. Sunstone’s hotels are primarily in the urban, upper upscale segment and are operated under nationally recognized brands, such as Marriott, Hilton, Hyatt, Fairmont and Sheraton.

Sunstone’s mission is to create meaningful value for our stockholders by becoming the premier hotel owner. Our values include transparency, trust, ethical conduct, communication and discipline. As demand for lodging generally fluctuates with the overall economy, we seek to employ a balanced, cycle-appropriate corporate strategy that encompasses the following:

Proactive portfolio management;

Focused asset management;

Disciplined external growth; and

Continued balance sheet strength.

Corporate Headquarters
120 Vantis, Suite 350
Aliso Viejo, CA 92656
(949) 330-4000

Company Contacts
John Arabia
President and Chief Executive Officer
(949) 382-3008

Bryan Giglia
Chief Financial Officer
(949) 382-3036

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	Supplemental Financial Information August 6, 2015

Forward-Looking Statement

This presentation contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and other similar terms and phrases, including opinions, references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that 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: volatility in the debt or equity markets affecting our ability to acquire or sell hotel assets; international, national and local economic and business conditions, including the likelihood of a U.S. recession or global economic slowdown, as well as any type of flu or disease-related pandemic, affecting the lodging and travel industry; the ability to maintain sufficient liquidity and our access to capital markets; potential terrorist attacks or civil unrest, which would affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt and equity agreements; relationships with property managers and franchisors; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations, which influence or determine wages, prices, construction procedures and costs; our ability to identify, successfully compete for and complete acquisitions; the performance of hotels after they are acquired; necessary capital expenditures and our ability to fund them and complete them with minimum disruption; our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company 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 forward-looking information in this presentation is as of August 6, 2015, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

This presentation should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

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	Supplemental Financial Information August 6, 2015

Non-GAAP Financial Measures

We present the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: earnings before interest expense, taxes, depreciation and amortization, or EBITDA; Adjusted EBITDA (as defined below); funds from operations attributable to common stockholders, or FFO attributable to common stockholders; Adjusted FFO attributable to common stockholders (as defined below); hotel adjusted EBITDA; and hotel adjusted EBITDA margin. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. EBITDA, Adjusted EBITDA, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel adjusted EBITDA and hotel adjusted EBITDA margin as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

EBITDA is a commonly used measure of performance in many industries. We believe EBITDA is useful to investors in evaluating our operating performance because this measure helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization) from our operating results. We also believe the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital-intensive companies. In addition, certain covenants included in our indebtedness use EBITDA as a measure of financial compliance. We also use EBITDA as a measure in determining the value of hotel acquisitions and dispositions.

Historically, we have adjusted EBITDA when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance and that the presentation of Adjusted EBITDA, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s complete understanding of our operating performance.

We believe that the presentation of FFO attributable to common stockholders provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, amortization of lease intangibles, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. Our presentation of FFO attributable to common stockholders conforms to the National Association of Real Estate Investment Trusts’ (“NAREIT”) definition of “FFO applicable to common shares.” This may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently that we do.

We also present Adjusted FFO attributable to common stockholders when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance, and may facilitate comparisons of operating performance between periods and our peer companies.

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	Supplemental Financial Information August 6, 2015

We adjust EBITDA and FFO attributable to common stockholders for the following items, which may occur in any period, and refer to these measures as either Adjusted EBITDA or Adjusted FFO attributable to common stockholders:

Amortization of favorable and unfavorable contracts: we exclude the non-cash amortization of the favorable management contract asset recorded in conjunction with our acquisition of the Hilton Garden Inn Chicago Downtown/Magnificent Mile, along with the favorable and unfavorable tenant lease contracts, as applicable, recorded in conjunction with our acquisitions of the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and the Wailea Beach Marriott Resort & Spa. The amortization of favorable and unfavorable contracts does not reflect the underlying performance of our hotels.

Ground rent adjustments: we exclude the non-cash expense incurred from straightlining our ground lease obligations as this expense does not reflect the underlying performance of our hotels.

Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure.

Acquisition costs: under GAAP, costs associated with completed acquisitions are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.

Non-controlling interests: we deduct the non-controlling partner’s pro rata share of any EBITDA or FFO adjustments related to our consolidated Hilton San Diego Bayfront partnership, as well as any preferred dividends earned by investors in an entity that owns the Doubletree Guest Suites Times Square, including related administrative fees.

Cumulative effect of a change in accounting principle: from time to time, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments because they do not reflect our actual performance for that period.

Impairment losses: we exclude the effect of impairment losses because we believe that including them in Adjusted EBITDA and Adjusted FFO attributable to common stockholders is not consistent with reflecting the ongoing performance of our remaining assets.

Other adjustments: we exclude other adjustments such as executive severance costs, lawsuit settlement costs, prior year property tax assessments and/or credits, management company transition costs, lease buyouts, any gains or losses we have recognized on redemptions of assets other than real estate investments, and restructurings and departmental closing costs, including severance, because we do not believe these costs reflect our actual performance for that period and/or the ongoing operations of our hotels.

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	Supplemental Financial Information August 6, 2015

In addition, to derive Adjusted EBITDA we exclude the non-cash expense incurred with the amortization of deferred stock compensation as this expense does not reflect the underlying performance of our hotels. We also include an adjustment for the cash ground lease expense recorded on the Hyatt Chicago Magnificent Mile’s building lease. Upon acquisition of this hotel, we determined that the building lease was a capital lease, and, therefore, we include a portion of the capital lease payment each month in interest expense. We include an adjustment for ground lease expense on capital leases in order to more accurately reflect the operating performance of the Hyatt Chicago Magnificent Mile. We also exclude the effect of gains and losses on the disposition of depreciable assets because we believe that including them in Adjusted EBITDA is not consistent with reflecting the ongoing performance of our assets. In addition, material gains or losses from the depreciated value of the disposed assets could be less important to investors given that the depreciated asset value often does not reflect its market value.

To derive Adjusted FFO attributable to common stockholders, we also exclude the non-cash gains or losses on our derivatives, as well as any federal and state taxes associated with the application of net operating loss carryforwards. We believe that these items are not reflective of our ongoing finance costs.

Reconciliations of net income to EBITDA and Adjusted EBITDA are set forth on page 13 of this supplemental package. Reconciliations of net income to FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders are set forth on page 14 of this supplemental package.

Our 30 comparable hotels include all hotels held for investment by the Company as of June 30, 2015, and also include prior ownership results for the Wailea Beach Marriott Resort & Spa acquired in July 2014. We obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. We performed a limited review of the information as part of our analysis of the acquisition.

Presentation of 2014 information conforms to changes stipulated by the industry’s Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective in January 2015.

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CORPORATE FINANCIAL INFORMATION

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	Supplemental Financial Information August 6, 2015

Condensed Consolidated Balance Sheets
Q2 2015 – Q2 2014


(In thousands)	June 30, 2015 (1)		March 31, 2015 (2)		December 31, 2014 (3)		September 30, 2014 (4)		June 30, 2014 (5)
Assets
Investment in hotel properties:
Land	$	570,011	$	570,011	$	570,011	$	570,011	$	450,304
Buildings & improvements		3,276,598		3,245,398		3,237,596		3,216,923		3,013,911
Furniture, fixtures, & equipment		471,193		457,249		450,057		447,712		432,572
Other		233,753		242,508		217,389		236,739		218,300
		4,551,555		4,515,166		4,475,053		4,471,385		4,115,087
Less accumulated depreciation & amortization		(1,019,399)		(978,041)		(936,924)		(924,857)		(884,192)
		3,532,156		3,537,125		3,538,129		3,546,528		3,230,895

Other assets, net		36,286		31,832		32,091		32,292		47,449

Current assets:
Cash and cash equivalents		98,760		156,972		222,096		135,427		360,702
Restricted cash		88,456		87,260		82,074		93,124		87,975
Other current assets, net		65,140		68,168		50,575		61,959		55,939
Total assets	$	3,820,798	$	3,881,357	$	3,924,965	$	3,869,330	$	3,782,960

*Footnotes on following page.

CORPORATE FINANCIAL INFORMATION

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Condensed Consolidated Balance Sheets
Q2 2015 – Q2 2014 (cont.)


(In thousands)	June 30, 2015 (1)		March 31, 2015 (2)		December 31, 2014 (3)		September 30, 2014 (4)		June 30, 2014 (5)
Liabilities
Current liabilities:
Current portion of notes payable	$	135,825	$	235,970	$	121,328	$	159,696	$	122,835
Other current liabilities		118,601		115,668		177,656		119,683		107,198
Total current liabilities		254,426		351,638		298,984		279,379		230,033

Notes payable, less current portion		1,182,832		1,187,447		1,307,964		1,226,796		1,269,587
Capital lease obligations, less current portion		15,576		15,576		15,576		15,576		15,576
Other liabilities		35,265		34,670		33,607		34,934		34,106
Total liabilities		1,488,099		1,589,331		1,656,131		1,556,685		1,549,302

Equity
Stockholders' equity:
8% Series D cumulative redeemable preferred stock		115,000		115,000		115,000		115,000		115,000

Common stock, $0.01 par value, 500,000,000 shares authorized		2,076		2,075		2,048		2,035		1,994

Additional paid in capital		2,456,604		2,454,720		2,418,567		2,397,196		2,335,709
Retained earnings		355,702		304,525		305,503		292,250		260,410
Cumulative dividends		(650,014)		(637,279)		(624,545)		(547,851)		(535,281)
Total stockholders' equity		2,279,368		2,239,041		2,216,573		2,258,630		2,177,832
Non-controlling interest in consolidated joint ventures		53,331		52,985		52,261		54,015		55,826
Total equity		2,332,699		2,292,026		2,268,834		2,312,645		2,233,658
Total liabilities and equity	$	3,820,798	$	3,881,357	$	3,924,965	$	3,869,330	$	3,782,960

(1)

As presented on Form 10-Q to be filed in August 2015.

(2)

As presented on Form 10-Q filed May 8, 2015.

(3)

As presented on Form 10-K filed February 19, 2015.

(4)

As presented on Form 10-Q filed November 4, 2014.

(5)

As presented on Form 10-Q filed August 8, 2014.

CORPORATE FINANCIAL INFORMATION

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Consolidated Statements of Operations
Q2 & YTD 2015/2014


		Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)		2015		2014		2015		2014
Revenues
Room	$	239,678	$	214,940	$	432,969	$	383,067
Food and beverage		79,265		68,733		151,449		128,644
Other operating		20,324		17,179		39,234		32,624
Total revenues		339,267		300,852		623,652		544,335
Operating expenses
Room		57,568		53,418		111,410		102,337
Food and beverage		52,812		45,109		103,031		88,017
Other operating		5,337		5,006		10,468		10,001
Advertising and promotion		15,567		13,655		30,927		26,626
Repairs and maintenance		11,381		10,706		22,939		21,587
Utilities		8,377		7,788		17,362		16,077
Franchise costs		10,818		10,261		19,418		18,338
Property tax, ground lease and insurance		23,151		21,413		46,764		40,465
Property general and administrative		37,107		31,963		71,556		60,885
Corporate overhead		6,923		7,674		21,176		14,233
Depreciation and amortization		40,873		37,973		81,580		75,588
Total operating expenses		269,914		244,966		536,631		474,154
Operating income		69,353		55,886		87,021		70,181
Interest and other income		1,828		891		2,774		1,607
Interest expense		(17,289)		(18,331)		(34,615)		(36,614)
Loss on extinguishment of debt		(2)		—		(2)		—
Income before income taxes and discontinued operations		53,890		38,446		55,178		35,174
Income tax provision		(233)		(110)		(318)		(334)
Income from continuing operations		53,657		38,336		54,860		34,840
Income from discontinued operations		—		5,199		—		5,199
Net income		53,657		43,535		54,860		40,039
Income from consolidated joint ventures attributable to non-controlling interests		(2,480)		(1,667)		(4,661)		(3,901)
Preferred stock dividends		(2,300)		(2,300)		(4,600)		(4,600)
Income attributable to common stockholders	$	48,877	$	39,568	$	45,599	$	31,538

Basic and diluted per share amounts:
Income from continuing operations attributable to common stockholders	$	0.23	$	0.19	$	0.22	$	0.14
Income from discontinued operations		—		0.03		—		0.03
Basic and diluted income attributable to common stockholders per common share	$	0.23	$	0.22	$	0.22	$	0.17
Basic and diluted weighted average common shares outstanding		207,577		182,604		207,091		181,836
Dividends declared per common share	$	0.05	$	0.05	$	0.10	$	0.10

CORPORATE FINANCIAL INFORMATION

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Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Q2 & YTD 2015/2014


	Three Months Ended June 30,					Six Months Ended June 30,
(In thousands)		2015		2014		2015		2014
Net income	$	53,657	$	43,535	$	54,860	$	40,039
Operations held for investment:
Depreciation and amortization		40,873		37,973		81,580		75,588
Amortization of lease intangibles		1,029		1,030		2,057		2,058
Interest expense		17,289		18,331		34,615		36,614
Income tax provision		233		110		318		334
Non-controlling interests:
Income from consolidated joint ventures attributable to non-controlling interests		(2,480)		(1,667)		(4,661)		(3,901)
Depreciation and amortization		(854)		(824)		(1,701)		(1,645)
Interest expense		(385)		(568)		(763)		(1,135)
EBITDA		109,362		97,920		166,305		147,952

Operations held for investment:
Amortization of deferred stock compensation		1,786		1,944		4,681		3,316
Amortization of favorable and unfavorable contracts, net		42		46		(179)		92
Non-cash straightline lease expense		491		500		995		1,012
Capital lease obligation interest - cash ground rent		(351)		(351)		(702)		(702)
Gain on sale of assets, net		(1)		(49)		(1)		(55)
Loss on extinguishment of debt		2		—		2		—
Gain on redemption of note receivable		(939)		—		(939)		—
Closing costs - completed acquisitions		—		102		—		158
Prior year property tax adjustments, net		88		(357)		(100)		(3,235)
Boston Park Plaza relaunch costs		—		—		683		—
Lease termination costs		—		—		300		—
Costs associated with CEO severance		—		—		5,257		—
Non-controlling interests:
Non-cash straightline lease expense		(112)		(112)		(225)		(225)
Prior year property tax adjustments, net		—		—		—		696
Discontinued operations:
Gain on sale of assets, net		—		(5,199)		—		(5,199)
		1,006		(3,476)		9,772		(4,142)
Adjusted EBITDA	$	110,368	$	94,444	$	176,077	$	143,810

CORPORATE FINANCIAL INFORMATION

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Reconciliation of Net Income to FFO Attributable to Common Stockholders and Adjusted FFO Attributable to Common Stockholders
Q2 & YTD 2015/2014


	Three Months Ended June 30,					Six Months Ended June 30,
(In thousands, except per share data)		2015		2014		2015		2014
Net income	$	53,657	$	43,535	$	54,860	$	40,039
Preferred stock dividends		(2,300)		(2,300)		(4,600)		(4,600)
Operations held for investment:
Real estate depreciation and amortization		40,477		37,575		80,787		74,801
Amortization of lease intangibles		1,029		1,030		2,057		2,058
Gain on sale of assets, net		(1)		(49)		(1)		(55)
Non-controlling interests:
Income from consolidated joint ventures attributable to non-controlling interests		(2,480)		(1,667)		(4,661)		(3,901)
Real estate depreciation and amortization		(854)		(824)		(1,701)		(1,645)
Discontinued operations:
Gain on sale of assets, net		—		(5,199)		—		(5,199)
FFO attributable to common stockholders		89,528		72,101		126,741		101,498

Operations held for investment:
Write-off of deferred financing fees		455		—		455		—
Amortization of favorable and unfavorable contracts, net		42		46		(179)		92
Non-cash straightline lease expense		491		500		995		1,012
Non-cash interest related to (gain) loss on derivatives, net		10		(125)		10		(234)
Loss on extinguishment of debt		2		—		2		—
Gain on redemption of note receivable		(939)		—		(939)		—
Closing costs - completed acquisitions		—		102		—		158
Prior year property tax adjustments, net		88		(357)		(100)		(3,235)
Boston Park Plaza relaunch costs		—		—		683		—
Lease termination costs		—		—		300		—
Costs associated with CEO severance		—		—		5,257		—
Amortization of deferred stock compensation associated with CEO severance		—		—		1,623		—
Non-controlling interests:
Non-cash straightline lease expense		(112)		(112)		(225)		(225)
Non-cash interest related to loss on derivative		(2)		—		(2)		—
Prior year property tax adjustments, net		—		—		—		696
		35		54		7,880		(1,736)
Adjusted FFO attributable to common stockholders	$	89,563	$	72,155	$	134,621	$	99,762
FFO attributable to common stockholders per diluted share	$	0.43	$	0.39	$	0.61	$	0.56
Adjusted FFO attributable to common stockholders per diluted share	$	0.43	$	0.39	$	0.65	$	0.55
Basic weighted average shares outstanding		207,577		182,604		207,091		181,836
Shares associated with unvested restricted stock awards		183		475		291		473
Diluted weighted average shares outstanding		207,760		183,079		207,382		182,309

CORPORATE FINANCIAL INFORMATION

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	Supplemental Financial Information August 6, 2015

Pro Forma Consolidated Statements of Operations
Q2 2015 – Q3 2014, FY 2014


	Three Months Ended (1)								Year Ended (1)
(Unaudited and in thousands)		June 30,		March 31,		Dec. 31,		Sept. 30,		Dec. 31,
		2015		2015		2014		2014		2014
Revenues
Room	$	239,678	$	193,291	$	204,208	$	224,926	$	833,383
Food and beverage		79,265		72,184		71,190		69,134		284,519
Other operating		20,324		18,910		18,719		19,918		73,938
Total revenues		339,267		284,385		294,117		313,978		1,191,840

Operating Expenses
Room		57,568		53,842		54,513		57,064		218,198
Food and beverage		52,812		50,219		51,242		50,575		204,148
Other expenses		111,738		107,696		105,046		107,480		416,278
Corporate overhead		6,923		14,253		7,329		7,177		28,739
Depreciation and amortization		40,873		40,707		40,257		40,000		160,105
Total operating expenses		269,914		266,717		258,387		262,296		1,027,468

Operating Income		69,353		17,668		35,730		51,682		164,372

Interest and other income		1,828		946		891		981		3,479
Interest expense		(17,289)		(17,326)		(17,649)		(18,052)		(72,315)
Loss on extinguishment of debt		(2)		—		(4,107)		(531)		(4,638)
Income before income taxes and discontinued operations		53,890		1,288		14,865		34,080		90,898
Income tax (provision) benefit		(233)		(85)		(258)		413		(179)
Income from continuing operations		53,657		1,203		14,607		34,493		90,719
Loss from discontinued operations		—		—		(350)		—		4,849
Net Income	$	53,657	$	1,203	$	14,257	$	34,493	$	95,568
Adjusted EBITDA (2)	$	110,368	$	65,709	$	77,838	$	92,270	$	324,973

(1)

Includes the Company's ownership results and prior ownership results for the 30 hotel comparable portfolio held for investment by the Company as of June 30, 2015. Includes the reduction of ground lease expense on the Fairmont Newport Beach due to the Company's land acquisition in June 2014, along with prior ownership results for the Wailea Beach Marriott Resort & Spa acquired July 17, 2014. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. Data for each 2014 period presented has been adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

(2)

The Adjusted EBITDA reconciliation for Q2 2015 can be found on page 13 of this supplemental package. The Adjusted EBITDA reconciliation for Q1 2015 can be found in the supplemental package furnished on Form 8-K to the SEC on May 4, 2015. The Adjusted EBITDA reconciliations for Q4 2014 and full year 2014 can be found in the supplemental package furnished on Form 8-K to the SEC on February 17, 2015. The Adjusted EBITDA reconciliation for Q3 2014 can be found in the supplemental package furnished on Form 8-K to the SEC on November 3, 2014.

CORPORATE FINANCIAL INFORMATION

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	Supplemental Financial Information August 6, 2015

EARNINGS GUIDANCE

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	Supplemental Financial Information August 6, 2015

Earnings Guidance for Q3 and FY 2015

The Company is providing guidance at this time, but does not undertake to make updates for any unanticipated developments in its business or changes in the operating environment. Achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in the Company’s filings with the Securities and Exchange Commission. The Company’s guidance does not take into account the impact of any unannounced hotel acquisitions, dispositions, re-brandings, management changes, transition costs, early lease termination costs, prior year property tax assessments and/or credits, debt repurchases or unannounced financings during 2015. The guidance presented takes into account various accounting changes as stipulated by the industry’s Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition (the “USALI Eleventh Revised Edition”), which became effective in January 2015. Guidance for 2015 Comparable Hotel RevPAR and Comparable Hotel Adjusted EBITDA Margins has been presented to reflect growth rates compared to prior year as if these 2014 statistics included the USALI Eleventh Revised Edition changes. Actual Comparable Hotel RevPAR and Comparable Hotel Adjusted EBITDA Margin change from prior year will differ slightly. The Company is presenting 2014 Comparable Hotel RevPAR and Comparable Hotel Adjusted EBITDA Margins on an as reported basis and on a pro forma basis, which will include the USALI Eleventh Revised Edition changes.

For the third quarter of 2015, the Company expects:


Metric	Quarter Ended September 30, 2015 Guidance
Comparable Hotel RevPAR Growth	+ 3.0% - 4.0%
Net Income ($ millions)	$33 - $37
Adjusted EBITDA ($ millions)	$90 - $94
Adjusted FFO Attributable to Common Stockholders ($ millions)	$70 - $74
Adjusted FFO Attributable to Common Stockholders per Diluted Share	$0.34 - $0.35
Diluted Weighted Average Shares Outstanding	207,900,000

For the full year of 2015, the Company expects:


Metric	Prior Full Year 2015 Guidance (1)	Adjustments (2)	Adjusted Prior Full Year 2015 Guidance	Current Full Year 2015 Guidance	Change in Full Year 2015 Guidance Midpoint
Comparable Hotel RevPAR Growth	+ 5.0% - 7.0%	̶	+ 5.0% - 7.0%	+ 5.0% - 6.5%	-0.2%
Net Income ($ millions)	$109 - $123	-$3.2	$106 - $120	$110 - $121	+$2.5
Adjusted EBITDA ($ millions)	$344 - $356	-$3.2	$341 - $353	$347 - $356	+$4.5
Adjusted FFO Attributable to Common Stockholders ($ millions)	$262 - $274	-$3.2	$259 - $271	$265 - $274	+$4.5
Adjusted FFO Attributable to Common Stockholders per Diluted Share	$1.26 - $1.32	-$0.02	$1.24 - $1.30	$1.28 - $1.32	+$0.03
Diluted Weighted Average Shares Outstanding	207,700,000	̶	207,700,000	207,700,000	̶

(1)

Reflects guidance presented on May 4, 2015.

(2)

Adjustments include the effects of the following: the sale of the Preferred Equity Investment in July 2015; the deferral of the $2 million Wailea Beach Marriott Resort & Spa guarantee payment from 2015 as this amount will now be paid in 2016, along with an additional $3 million.

EARNINGS GUIDANCE

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	Supplemental Financial Information August 6, 2015

Earnings Guidance for Q3 and FY 2015

Third quarter and full year 2015 guidance are based in part on the following assumptions:

Full year Comparable Hotel Adjusted EBITDA Margin (as compared to 2014 adjusted for the USALI Eleventh Revised Edition) expansion of approximately 75 to 125 basis points, an increase of 25 basis points to the midpoint of the prior range.

Full year corporate overhead expense (excluding stock amortization and one-time expenses related to acquisition closing costs and severance charges) of approximately $21.5 million to $22.5 million, a reduction of $1.0 million to the midpoint of the prior range.

Deferral of $2 million of the Wailea Beach Marriott Resort & Spa guarantee income from Q4 2015 to 2016.

Full year interest expense of approximately $66 million to $67 million, including approximately $3 million in amortization of deferred financing fees, and excluding approximately $1.4 million of capital lease obligation interest.

Full year expense of approximately $0.7 million in one-time costs related to the Boston Park Plaza retail, meeting space and lobby relaunch, and $0.3 million in one-time costs related to an early lease termination at the Boston Park Plaza.

Full year hotel revenue disruption of $2.0 million to $3.0 million related to cancellations resulting from civil unrest in Baltimore, Maryland. The Company is pursuing a business interruption insurance claim for a portion of the disruption but may or may not receive any payments, and has not included any potential reimbursement in its current guidance.

Full year preferred dividends of $9.2 million for the Series D cumulative redeemable preferred stock.

Sale of the Preferred Equity Investment in July 2015, eliminating approximately $0.5 million and $0.7 million of interest income in Q3 2015 and Q4 2015, respectively, or $1.2 million for the second half of 2015.

EARNINGS GUIDANCE

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	Supplemental Financial Information August 6, 2015

Reconciliation of Net Income to Adjusted EBITDA and Adjusted FFO Attributable to Common Stockholders
Q3 and FY 2015

Reconciliation of Net Income to Adjusted EBITDA


		Quarter Ended				Year Ended
		September 30, 2015				December 31, 2015
(In thousands, except per share data)		Low		High		Low		High

Net income	$	32,700	$	37,000	$	109,700	$	120,600
Depreciation and amortization		41,400		41,400		164,400		164,400
Amortization of lease intangibles		1,000		1,000		4,100		4,100
Interest expense		16,300		16,500		67,200		67,900
Income tax provision		400		400		1,000		1,000
Non-controlling interests		(3,100)		(3,500)		(11,800)		(14,400)
Amortization of deferred stock compensation		1,200		1,200		7,100		7,100
Non-cash straightline lease expense		400		400		1,400		1,400
Capital lease obligation interest - cash ground rent		(400)		(400)		(1,400)		(1,400)
Gain on redemption of note receivable		—		—		(900)		(900)
Prior year property tax adjustments, net		—		—		(100)		(100)
Boston Park Plaza relaunch costs		—		—		700		700
Lease termination costs		—		—		300		300
Costs associated with CEO severance		—		—		5,300		5,300
Adjusted EBITDA	$	89,900	$	94,000	$	347,000	$	356,000

Reconciliation of Net Income to Adjusted FFO Attributable to Common Stockholders


Net income	$	32,700	$	37,000	$	109,700	$	120,600
Preferred stock dividends		(2,300)		(2,300)		(9,200)		(9,200)
Real estate depreciation and amortization		40,800		40,800		162,400		162,400
Amortization of lease intangibles		1,000		1,000		4,100		4,100
Non-controlling interests		(2,800)		(3,200)		(10,400)		(12,700)
Write-off of deferred financing fees		—		—		500		500
Non-cash straightline lease expense		400		400		1,400		1,400
Gain on redemption of note receivable		—		—		(900)		(900)
Prior year property tax adjustments, net		—		—		(100)		(100)
Boston Park Plaza relaunch costs		—		—		700		700
Lease termination costs		—		—		300		300
Costs associated with CEO severance		—		—		5,300		5,300
Amortization of deferred stock compensation associated with CEO severance		—		—		1,600		1,600
Adjusted FFO attributable to common stockholders	$	69,800	$	73,700	$	265,400	$	274,000

Adjusted FFO attributable to common stockholders per diluted share	$	0.34	$	0.35	$	1.28	$	1.32

Diluted weighted average shares outstanding		207,900		207,900		207,700		207,700

EARNINGS GUIDANCE

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	Supplemental Financial Information August 6, 2015

CAPITALIZATION

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	Supplemental Financial Information August 6, 2015

Comparative Capitalization
Q2 2015 – Q2 2014


		June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
(In thousands, except per share data)		2015			2015			2014			2014			2014

Common Share Price & Dividends
At the end of the quarter	$	15.01		$	16.67		$	16.51		$	13.82		$	14.93
High during quarter ended	$	17.08		$	17.98		$	17.17		$	15.17		$	15.25
Low during quarter ended	$	14.63		$	16.18		$	13.42		$	13.71		$	13.22
Common dividends per share (1)	$	0.05		$	0.05		$	0.36		$	0.05		$	0.05

Common Shares & Units
Common shares outstanding (2)		208,697			208,686			206,650			205,397			205,432
Units outstanding		—			—			—			—			—
Total common shares and units outstanding		208,697			208,686			206,650			205,397			205,432

Capitalization
Market value of common equity	$	3,132,541		$	3,478,793		$	3,411,792		$	2,838,583		$	3,067,094
Liquidation value of preferred equity - Series D		115,000			115,000			115,000			115,000			115,000
Consolidated debt (3)		1,318,657			1,324,078			1,429,292			1,386,492			1,392,422
Consolidated total capitalization		4,566,198			4,917,871			4,956,084			4,340,075			4,574,516

Non-controlling interest in consolidated debt		(56,718)			(56,897)			(57,074)			(57,248)			(57,435)
Pro rata total capitalization	$	4,509,480		$	4,860,974		$	4,899,010		$	4,282,827		$	4,517,081

Consolidated debt to total capitalization		28.9	%		26.9	%		28.8	%		31.9	%		30.4	%
Pro rata debt to pro rata total capitalization		28.0	%		26.1	%		28.0	%		31.0	%		29.6	%
Consolidated debt and preferred equity to total capitalization		31.4	%		29.3	%		31.2	%		34.6	%		33.0	%
Pro rata debt and preferred equity to total capitalization		30.5	%		28.4	%		30.4	%		33.7	%		32.1	%

(1)

Fourth quarter 2014 dividends were paid in a combination of cash and shares of the Company's common stock, pursuant to elections by individual stockholders.

(2)

Reflects shares outstanding at respective dates. Common shares outstanding at June 30, 2014 includes the effects of the Company's direct issuance of 4,034,970 shares to the seller of the Wailea Beach Marriott Resort & Spa in July 2014.

(3)

First quarter 2015 includes the effects of the Company's May 1, 2015 repayment of debt secured by four of its hotels: the Marriott Houston, the Marriott Park City, the Marriott Philadelphia and the Marriott Tysons Corner.

CAPITALIZATION

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	Supplemental Financial Information August 6, 2015

Consolidated Debt Summary Schedule


(In thousands)		Interest Rate /	Maturity		June 30, 2015			Balance At
Debt	Collateral	Spread	Date		Balance			Maturity

Fixed Rate Debt
Secured Mortgage Debt	Renaissance Harborplace	5.13%	01/01/2016	$	87,081		$	85,227
Secured Mortgage Debt	Hilton North Houston	5.66%	03/11/2016		30,965			30,579
Secured Mortgage Debt	Renaissance Orlando at SeaWorld®	5.52%	07/01/2016		74,779			72,418
Secured Mortgage Debt	Embassy Suites Chicago	5.58%	03/01/2017		68,666			65,756
Secured Mortgage Debt	Marriott Boston Long Wharf	5.58%	04/11/2017		176,000			176,000
Secured Mortgage Debt	Boston Park Plaza	4.40%	02/01/2018		115,416			109,813
Secured Mortgage Debt	Hilton Times Square	4.97%	11/01/2020		85,931			76,145
Secured Mortgage Debt	Renaissance Washington DC	5.95%	05/01/2021		123,100			106,855
Secured Mortgage Debt	JW Marriott New Orleans	4.15%	12/11/2024		89,257			72,071
Secured Mortgage Debt	Embassy Suites La Jolla	4.12%	01/06/2025		64,546			51,987
Total Fixed Rate Debt					915,741			846,851
Secured Mortgage Debt	Doubletree Guest Suites Times Square	L + 3.25%	10/07/2018		176,043			167,738
Secured Mortgage Debt	Hilton San Diego Bayfront	L + 2.25%	08/08/2019		226,873			213,513
Credit Facility	Unsecured	L + 1.55% - 2.30%	04/02/2019		—			—
Total Variable Rate Debt					402,916			381,251

TOTAL CONSOLIDATED DEBT				$	1,318,657		$	1,228,102

Preferred Stock
Series D cumulative redeemable preferred		8.00%	perpetual	$	115,000

Debt Statistics
% Fixed Rate Debt					69.4	%
% Floating Rate Debt					30.6	%
Average Interest Rate (1)					4.4	%
Weighted Average Maturity of Debt					3.8 years

(1)

Average Interest Rate on variable-rate debt obligations is calculated based on the variable rates at June 30, 2015, and includes the effect of the Company's interest rate derivative agreements.

CAPITALIZATION

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	Supplemental Financial Information August 6, 2015

Consolidated Amortization and Debt Maturity Schedule

(1)

Percent of Current Total Capitalization is calculated by dividing the sum of scheduled principal amortization and maturity payments by the June 30, 2015 consolidated total capitalization as presented on page 21.

CAPITALIZATION

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	Supplemental Financial Information August 6, 2015

PROPERTY-LEVEL DATA

PROPERTY LEVEL DATA

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	Supplemental Financial Information August 6, 2015

Property-Level Data


Hotel		Location	Brand	Number of Rooms	% of Total Rooms	Ownership Interest	Interest	Leasehold Maturity (1)	Year Acquired

1	Hilton San Diego Bayfront	California	Hilton	1,190	8.31%	75%	Leasehold	2071	2011
2	Boston Park Plaza	Massachusetts	Independent	1,054	7.36%	100%	Fee Simple		2013
3	Renaissance Washington DC	Washington DC	Marriott	807	5.64%	100%	Fee Simple		2005
4	Hyatt Regency San Francisco	California	Hyatt	804	5.62%	100%	Fee Simple		2013
5	Renaissance Orlando at SeaWorld® (2)	Florida	Marriott	781	5.46%	100%	Fee Simple		2005
6	Renaissance Harborplace	Maryland	Marriott	622	4.35%	100%	Leasehold	2085	2005
7	Wailea Beach Marriott Resort & Spa	Hawaii	Marriott	543	3.79%	100%	Fee Simple		2014
8	Renaissance Los Angeles Airport	California	Marriott	501	3.50%	100%	Fee Simple		2007
9	JW Marriott New Orleans (3)	Louisiana	Marriott	501	3.50%	100%	Leasehold	2081	2011
10	Hilton North Houston	Texas	Hilton	480	3.35%	100%	Fee Simple		2002
11	Doubletree Guest Suites Times Square	New York	Hilton	468	3.27%	100%	Leasehold	2127	2011
12	Marriott Quincy	Massachusetts	Marriott	464	3.24%	100%	Fee Simple		2007
13	Hilton Times Square	New York	Hilton	460	3.21%	100%	Leasehold	2091	2006
14	Fairmont Newport Beach	California	Fairmont	444	3.10%	100%	Fee Simple		2005
15	Hyatt Chicago Magnificent Mile	Illinois	Hyatt	419	2.93%	100%	Leasehold	2097	2012
16	Marriott Boston Long Wharf	Massachusetts	Marriott	412	2.88%	100%	Fee Simple		2007
17	Hyatt Regency Newport Beach	California	Hyatt	407	2.84%	100%	Leasehold	2048	2002
18	Marriott Tysons Corner	Virginia	Marriott	396	2.77%	100%	Fee Simple		2002
19	Marriott Houston	Texas	Marriott	390	2.72%	100%	Fee Simple		2002
20	Renaissance Long Beach	California	Marriott	374	2.61%	100%	Fee Simple		2005
21	Embassy Suites Chicago	Illinois	Hilton	368	2.57%	100%	Fee Simple		2002
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile	Illinois	Hilton	361	2.52%	100%	Fee Simple		2012
23	Renaissance Westchester	New York	Marriott	348	2.43%	100%	Fee Simple		2010
24	Embassy Suites La Jolla	California	Hilton	340	2.38%	100%	Fee Simple		2006
25	Marriott Philadelphia	Pennsylvania	Marriott	289	2.02%	100%	Fee Simple		2002
26	Hilton New Orleans St. Charles	Louisiana	Hilton	252	1.76%	100%	Fee Simple		2013
27	Marriott Portland	Oregon	Marriott	249	1.74%	100%	Fee Simple		2000
28	Sheraton Cerritos	California	Sheraton	203	1.42%	100%	Leasehold	2087	2005
29	Marriott Park City	Utah	Marriott	199	1.39%	100%	Fee Simple		1999
30	Courtyard by Marriott Los Angeles	California	Marriott	187	1.31%	100%	Leasehold	2096	1999

	Total portfolio			14,313	100%

(1)

Assumes the full exercise of all lease extensions.

(2)

Reflects 100% economic interest in the Renaissance Orlando at SeaWorld®.

(3)

Hotel is subject to a ground lease that expires in 2081. In addition, it is also subject to a municipal air rights lease that matures in 2044 that applies only to certain balcony space and is not integral to the hotel operation.

PROPERTY LEVEL DATA

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	Supplemental Financial Information August 6, 2015

PROPERTY-LEVEL OPERATING STATISTICS

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	Supplemental Financial Information August 6, 2015

Property-Level Operating Statistics

Q2 2015/2014


	Hotels sorted by number of rooms	ADR					Occupancy			RevPAR
		For the Three Months Ended June 30,					For the Three Months Ended June 30,			For the Three Months Ended June 30,
		2015		2014		Variance	2015	2014	Variance	2015		2014		Variance
1	Hilton San Diego Bayfront	$	236.37	$	219.99	7.4%	89.9%	88.4%	1.7%	$	212.50	$	194.47	9.3%
2	Boston Park Plaza	$	210.56	$	196.41	7.2%	92.0%	94.8%	-3.0%	$	193.72	$	186.20	4.0%
3	Renaissance Washington DC	$	238.75	$	206.55	15.6%	87.8%	86.6%	1.4%	$	209.62	$	178.87	17.2%
4	Hyatt Regency San Francisco (1)	$	280.77	$	260.28	7.9%	92.9%	85.1%	9.2%	$	260.84	$	221.50	17.8%
5	Renaissance Orlando at SeaWorld ®	$	140.80	$	146.55	-3.9%	79.1%	78.3%	1.0%	$	111.37	$	114.75	-2.9%
6	Renaissance Harborplace	$	184.43	$	176.31	4.6%	71.3%	84.6%	-15.7%	$	131.50	$	149.16	-11.8%
7	Wailea Beach Marriott Resort & Spa	$	258.86	$	249.21	3.9%	86.8%	77.3%	12.3%	$	224.69	$	192.64	16.6%
8	Renaissance Los Angeles Airport	$	143.25	$	129.81	10.4%	90.6%	90.7%	-0.1%	$	129.78	$	117.74	10.2%
9	JW Marriott New Orleans	$	208.97	$	194.11	7.7%	87.4%	82.9%	5.4%	$	182.64	$	160.92	13.5%
10	Hilton North Houston	$	118.06	$	115.99	1.8%	85.0%	86.2%	-1.4%	$	100.35	$	99.98	0.4%
11	Doubletree Guest Suites Times Square	$	361.63	$	369.96	-2.3%	97.7%	98.1%	-0.4%	$	353.31	$	362.93	-2.7%
12	Marriott Quincy	$	168.15	$	158.10	6.4%	82.1%	86.7%	-5.3%	$	138.05	$	137.07	0.7%
13	Hilton Times Square	$	322.43	$	335.83	-4.0%	99.6%	99.8%	-0.2%	$	321.14	$	335.16	-4.2%
14	Fairmont Newport Beach	$	159.06	$	150.30	5.8%	77.3%	82.0%	-5.7%	$	122.95	$	123.25	-0.2%
15	Hyatt Chicago Magnificent Mile	$	231.77	$	223.35	3.8%	92.5%	79.3%	16.6%	$	214.39	$	177.12	21.0%
16	Marriott Boston Long Wharf	$	352.64	$	320.64	10.0%	90.0%	91.1%	-1.2%	$	317.38	$	292.10	8.7%
17	Hyatt Regency Newport Beach	$	169.53	$	161.36	5.1%	86.4%	84.3%	2.5%	$	146.47	$	136.03	7.7%
18	Marriott Tysons Corner	$	153.99	$	147.51	4.4%	86.2%	85.8%	0.5%	$	132.74	$	126.56	4.9%
19	Marriott Houston	$	124.84	$	120.93	3.2%	84.5%	82.3%	2.7%	$	105.49	$	99.53	6.0%
20	Renaissance Long Beach	$	168.64	$	150.11	12.3%	81.8%	81.6%	0.2%	$	137.95	$	122.49	12.6%
21	Embassy Suites Chicago	$	251.33	$	227.20	10.6%	94.0%	92.6%	1.5%	$	236.25	$	210.39	12.3%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile	$	218.10	$	198.51	9.9%	90.7%	89.4%	1.5%	$	197.82	$	177.47	11.5%
23	Renaissance Westchester	$	149.99	$	144.75	3.6%	85.5%	84.5%	1.2%	$	128.24	$	122.31	4.8%
24	Embassy Suites La Jolla	$	184.78	$	170.54	8.3%	84.5%	87.2%	-3.1%	$	156.14	$	148.71	5.0%
25	Marriott Philadelphia	$	186.06	$	170.74	9.0%	77.9%	79.4%	-1.9%	$	144.94	$	135.57	6.9%
26	Hilton New Orleans St. Charles	$	185.68	$	166.52	11.5%	86.7%	81.6%	6.3%	$	160.98	$	135.88	18.5%
27	Marriott Portland	$	198.76	$	180.57	10.1%	86.6%	87.9%	-1.5%	$	172.13	$	158.72	8.4%
28	Sheraton Cerritos	$	138.41	$	133.81	3.4%	90.8%	89.9%	1.0%	$	125.68	$	120.30	4.5%
29	Marriott Park City	$	118.67	$	107.36	10.5%	45.2%	48.3%	-6.4%	$	53.64	$	51.85	3.4%
30	Courtyard by Marriott Los Angeles	$	157.97	$	152.66	3.5%	96.0%	97.1%	-1.1%	$	151.65	$	148.23	2.3%

	Actual/Comparable Portfolio (2)	$	212.04	$	199.44	6.3%	86.8%	86.2%	0.7%	$	184.05	$	171.92	7.1%

(1)

Operating statistics for the second quarter of 2014 are impacted by a major renovation at the Hyatt Regency San Francisco.

(2)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015. Includes prior ownership results as applicable for the Wailea Beach Marriott Resort & Spa. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. Operating statistics for the second quarter of 2014 have been adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

PROPERTY-LEVEL OPERATING STATISTICS

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Property-Level Operating Statistics

Q2 YTD 2015/2014


	Hotels sorted by number of rooms	ADR					Occupancy			RevPAR
		For the Six Months Ended June 30,					For the Six Months Ended June 30,			For the Six Months Ended June 30,
		2015		2014		Variance	2015	2014	Variance	2015		2014		Variance
1	Hilton San Diego Bayfront	$	231.56	$	215.69	7.4%	89.4%	88.6%	0.9%	$	207.01	$	191.10	8.3%
2	Boston Park Plaza (1)	$	183.39	$	163.16	12.4%	74.6%	84.0%	-11.2%	$	136.81	$	137.05	-0.2%
3	Renaissance Washington DC	$	229.84	$	210.04	9.4%	81.2%	81.6%	-0.5%	$	186.63	$	171.39	8.9%
4	Hyatt Regency San Francisco (1)	$	277.28	$	258.25	7.4%	89.0%	77.4%	15.0%	$	246.78	$	199.89	23.5%
5	Renaissance Orlando at SeaWorld ®	$	158.11	$	157.58	0.3%	78.7%	79.8%	-1.4%	$	124.43	$	125.75	-1.0%
6	Renaissance Harborplace	$	164.86	$	165.40	-0.3%	70.5%	72.2%	-2.4%	$	116.23	$	119.42	-2.7%
7	Wailea Beach Marriott Resort & Spa	$	284.25	$	265.68	7.0%	90.4%	85.7%	5.5%	$	256.96	$	227.69	12.9%
8	Renaissance Los Angeles Airport	$	143.01	$	127.08	12.5%	89.5%	91.4%	-2.1%	$	127.99	$	116.15	10.2%
9	JW Marriott New Orleans	$	212.31	$	204.95	3.6%	86.9%	82.2%	5.7%	$	184.50	$	168.47	9.5%
10	Hilton North Houston	$	118.17	$	117.37	0.7%	85.3%	85.6%	-0.4%	$	100.80	$	100.47	0.3%
11	Doubletree Guest Suites Times Square	$	301.33	$	315.78	-4.6%	96.8%	96.4%	0.4%	$	291.69	$	304.41	-4.2%
12	Marriott Quincy	$	158.74	$	151.45	4.8%	71.5%	74.3%	-3.8%	$	113.50	$	112.53	0.9%
13	Hilton Times Square	$	274.74	$	290.57	-5.4%	99.5%	99.5%	0.0%	$	273.37	$	289.12	-5.4%
14	Fairmont Newport Beach	$	158.39	$	149.22	6.1%	78.3%	80.8%	-3.1%	$	124.02	$	120.57	2.9%
15	Hyatt Chicago Magnificent Mile	$	196.13	$	190.23	3.1%	79.2%	64.7%	22.4%	$	155.33	$	123.08	26.2%
16	Marriott Boston Long Wharf	$	303.51	$	274.65	10.5%	84.3%	85.6%	-1.5%	$	255.86	$	235.10	8.8%
17	Hyatt Regency Newport Beach	$	163.37	$	154.89	5.5%	85.2%	84.7%	0.6%	$	139.19	$	131.19	6.1%
18	Marriott Tysons Corner	$	152.61	$	148.58	2.7%	79.9%	78.4%	1.9%	$	121.94	$	116.49	4.7%
19	Marriott Houston	$	125.33	$	120.83	3.7%	83.5%	81.5%	2.5%	$	104.65	$	98.48	6.3%
20	Renaissance Long Beach (1)	$	167.76	$	149.93	11.9%	80.2%	74.3%	7.9%	$	134.54	$	111.40	20.8%
21	Embassy Suites Chicago	$	204.00	$	185.15	10.2%	88.0%	84.9%	3.7%	$	179.52	$	157.19	14.2%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (1)	$	180.56	$	166.46	8.5%	80.2%	72.9%	10.0%	$	144.81	$	121.35	19.3%
23	Renaissance Westchester	$	144.44	$	141.97	1.7%	78.0%	75.5%	3.3%	$	112.66	$	107.19	5.1%
24	Embassy Suites La Jolla	$	178.42	$	166.54	7.1%	84.6%	85.4%	-0.9%	$	150.94	$	142.23	6.1%
25	Marriott Philadelphia	$	175.17	$	165.74	5.7%	71.3%	73.1%	-2.5%	$	124.90	$	121.16	3.1%
26	Hilton New Orleans St. Charles	$	189.81	$	178.35	6.4%	86.5%	80.9%	6.9%	$	164.19	$	144.29	13.8%
27	Marriott Portland	$	186.62	$	166.04	12.4%	84.1%	84.7%	-0.7%	$	156.95	$	140.64	11.6%
28	Sheraton Cerritos	$	136.76	$	129.56	5.6%	91.1%	91.3%	-0.2%	$	124.59	$	118.29	5.3%
29	Marriott Park City	$	192.77	$	179.06	7.7%	64.0%	65.5%	-2.3%	$	123.37	$	117.28	5.2%
30	Courtyard by Marriott Los Angeles	$	157.11	$	151.87	3.5%	95.0%	97.3%	-2.4%	$	149.25	$	147.77	1.0%

	Actual/Comparable Portfolio (2)	$	200.89	$	189.82	5.8%	83.2%	82.3%	1.1%	$	167.14	$	156.22	7.0%

(1)

Operating statistics for the first six months of 2015 are impacted by a major renovation at the Boston Park Plaza. Operating statistics for the first six months of 2014 are impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach.

(2)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015. Includes prior ownership results as applicable for the Wailea Beach Marriott Resort & Spa. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. Operating statistics for the first six months of 2014 have been adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015

PROPERTY-LEVEL OPERATING STATISTICS

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OPERATING STATISTICS BY BRAND & GEOGRAPHY

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Comparable Portfolio Operating Statistics by Brand
Q2 & YTD 2015/2014


		For the Three Months Ended June 30,
		2015					2014
	# of Hotels	Occ	ADR		RevPAR		Occ	ADR		RevPAR		RevPAR Change
Marriott (1)	16	83.1%	$	191.67	$	159.28	83.4%	$	178.11	$	148.54	7.2%
Hilton	8	84.1%	$	242.46	$	203.91	90.6%	$	233.81	$	211.83	-3.7%
Hyatt	3	91.2%	$	241.67	$	220.40	83.4%	$	226.24	$	188.68	16.8%
Other (2)	3	88.0%	$	189.88	$	167.09	90.9%	$	178.16	$	161.95	3.2%

Actual/Comparable Portfolio (3)	30	86.8%	$	212.04	$	184.05	86.2%	$	199.44	$	171.92	7.1%



		For the Six Months Ended June 30,
		2015					2014
	# of Hotels	Occ	ADR		RevPAR		Occ	ADR		RevPAR		RevPAR Change
Marriott (1)	16	80.6%	$	189.66	$	152.87	80.2%	$	178.35	$	143.04	6.9%
Hilton	8	89.4%	$	219.25	$	196.01	87.9%	$	214.13	$	188.22	4.1%
Hyatt	3	85.5%	$	229.64	$	196.34	76.0%	$	214.54	$	163.05	20.4%
Other (2)	3	77.6%	$	170.26	$	132.12	84.0%	$	155.30	$	130.45	1.3%

Actual/Comparable Portfolio (3)	30	83.2%	$	200.89	$	167.14	82.3%	$	189.82	$	156.22	7.0%

(1)

Marriott includes prior ownership results for the Wailea Beach Marriott Resort & Spa acquired July 17, 2014. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition.

(2)

Other includes the Fairmont Newport Beach, the Sheraton Cerritos and the Boston Park Plaza.

(3)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015. Includes prior ownership results as applicable for the Wailea Beach Marriott Resort & Spa as noted above in Footnote 1. Operating statistics for the second quarter and first six months of 2014 have been adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

OPERATING STATISTICS BY BRAND & GEOGRAPHY

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Comparable Portfolio Property-Level Trailing 12 Month EBITDA Contribution by Brand

Note: Includes 30 hotel Comparable Portfolio

OPERATING STATISTICS BY BRAND & GEOGRAPHY

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Comparable Portfolio Operating Statistics by Region
Q2 & YTD 2015/2014


		For the Three Months Ended June 30,
		2015					2014
	# of Hotels	Occ		ADR		RevPAR	Occ		ADR		RevPAR	RevPAR Change
California	9	88.1%	$	204.05	$	179.77	86.8%	$	188.20	$	163.36	10.0%
Other West (1)	5	81.4%	$	174.87	$	142.34	78.9%	$	164.21	$	129.56	9.9%
Midwest	3	92.4%	$	233.93	$	216.15	86.7%	$	216.63	$	187.82	15.1%
East	13	86.5%	$	222.92	$	192.83	87.8%	$	212.41	$	186.50	3.4%

Actual/Comparable Portfolio (2)	30	86.8%	$	212.04	$	184.05	86.2%	$	199.44	$	171.92	7.1%



		For the Six Months Ended June 30,
		2015					2014
	# of Hotels	Occ		ADR		RevPAR	Occ		ADR		RevPAR	RevPAR Change
California	9	87.0%	$	200.24	$	174.21	84.8%	$	184.17	$	156.18	11.5%
Other West (1)	5	84.0%	$	187.02	$	157.10	82.5%	$	174.99	$	144.37	8.8%
Midwest	3	82.3%	$	194.06	$	159.71	73.8%	$	180.99	$	133.57	19.6%
East	13	80.7%	$	206.43	$	166.59	82.0%	$	198.99	$	163.17	2.1%

Actual/Comparable Portfolio (2)	30	83.2%	$	200.89	$	167.14	82.3%	$	189.82	$	156.22	7.0%

(1)

Other West includes prior ownership results for the Wailea Beach Marriott Resort & Spa acquired July 17, 2014. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition.

(2)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015. Includes prior ownership results as applicable for the Wailea Beach Marriott Resort & Spa as noted above in Footnote 1. Operating statistics for the second quarter and first six months of 2014 have been adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

OPERATING STATISTICS BY BRAND & GEOGRAPHY

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PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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Property-Level EBITDA
Q2 & YTD 2015/2014


	Hotels sorted by number of rooms		For the Three Months Ended June 30,					For the Six Months Ended June 30,
	(In thousands)		2015		2014			2015		2014
			Hotel EBITDA (2)		Hotel EBITDA (2)	% Change		Hotel EBITDA (2)		Hotel EBITDA (2)	% Change
1	Hilton San Diego Bayfront (1) (4)	$	15,343	$	12,686	21%	$	29,394	$	27,589	7%
2	Boston Park Plaza (3)		9,212		9,207	0%		7,508		8,371	-10%
3	Renaissance Washington DC		8,683		6,943	25%		13,583		12,156	12%
4	Hyatt Regency San Francisco (4)		7,842		5,715	37%		13,285		7,189	85%
5	Renaissance Orlando at SeaWorld ®		4,873		5,231	-7%		12,691		12,242	4%
6	Renaissance Harborplace		3,452		4,631	-25%		4,853		5,943	-18%
7	Wailea Beach Marriott Resort & Spa		5,598		3,939	42%		13,407		10,760	25%
8	Renaissance Los Angeles Airport		2,042		1,790	14%		3,841		3,502	10%
9	JW Marriott New Orleans		4,196		3,625	16%		8,430		7,859	7%
10	Hilton North Houston (3)		1,203		1,582	-24%		3,139		3,487	-10%
11	Doubletree Guest Suites Times Square (1)		6,131		6,442	-5%		7,322		8,365	-12%
12	Marriott Quincy		3,138		3,118	1%		4,150		3,811	9%
13	Hilton Times Square		4,433		5,233	-15%		5,342		7,017	-24%
14	Fairmont Newport Beach (3) (4)		2,275		1,877	21%		4,434		3,635	22%
15	Hyatt Chicago Magnificent Mile (3)		3,854		2,863	35%		3,184		1,556	105%
16	Marriott Boston Long Wharf		7,530		6,529	15%		10,483		8,878	18%
17	Hyatt Regency Newport Beach (4)		2,597		2,119	23%		4,812		3,810	26%
18	Marriott Tysons Corner		2,229		2,004	11%		3,761		3,555	6%
19	Marriott Houston (3)		1,400		1,138	23%		2,839		2,446	16%
20	Renaissance Long Beach (4)		2,015		1,674	20%		3,912		2,567	52%
21	Embassy Suites Chicago (3) (4)		4,018		4,007	0%		5,027		4,622	9%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (3) (4)		3,249		3,028	7%		3,569		2,687	33%
23	Renaissance Westchester		1,644		1,202	37%		1,974		1,375	44%
24	Embassy Suites La Jolla (3)		2,557		2,300	11%		4,789		4,253	13%
25	Marriott Philadelphia		1,990		1,711	16%		2,700		2,301	17%
26	Hilton New Orleans St. Charles		1,773		1,515	17%		3,572		3,255	10%
27	Marriott Portland		2,116		1,999	6%		3,712		3,337	11%
28	Sheraton Cerritos		1,116		1,003	11%		2,025		1,840	10%
29	Marriott Park City		(119)		(157)	24%		1,862		1,690	10%
30	Courtyard by Marriott Los Angeles (4)		1,109		1,039	7%		2,128		2,027	5%

	Actual/Comparable Portfolio (5)	$	117,499	$	105,993	11%	$	191,728	$	172,125	11%

*Footnotes on page 35

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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Property-Level EBITDA
Q2 & YTD 2015/2014 Footnotes

(1)

Reflects 100% of the operating results for both the Doubletree Guest Suites Times Square and the Hilton San Diego Bayfront.

(2)

Reconciliations to Net Income (Loss) provided on pages 38, 39, 41 and 42.

(3)

Hotel EBITDA for the second quarter of 2015 is impacted by a total of $(0.1) million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: Embassy Suites Chicago $(35,000); Embassy Suites La Jolla $11,000; Fairmont Newport Beach $27,000; Hilton Garden inn Chicago Downtown/Magnificent Mile $(42,000); Hilton North Houston $(2,000); and Hyatt Chicago Magnificent Mile $(47,000). Hotel EBITDA for the first six months of 2015 is impacted by a major renovation at the Boston Park Plaza, and by a total of $0.1 million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: Embassy Suites Chicago $(35,000); Embassy Suites La Jolla $11,000; Fairmont Newport Beach $27,000; Hilton Garden inn Chicago Downtown/Magnificent Mile $(42,000); Hilton North Houston $102,000; Hyatt Chicago Magnificent Mile $(47,000); and Marriott Houston $84,000.

(4)

Hotel EBITDA for the second quarter of 2014 is impacted by a major renovation at the Hyatt Regency San Francisco. Hotel EBITDA for the second quarter of 2014 is also impacted by a total of $0.4 million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: Courtyard by Marriott Los Angeles $(7,000); Embassy Suites Chicago $162,000; Hilton Garden Inn Chicago Downtown/Magnificent Mile $195,000; and Hyatt Regency Newport Beach $3,000. Hotel EBITDA for the first six months of 2014 is impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach. Hotel EBITDA for the first six months of 2014 is also impacted by a total of $3.2 million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: the Courtyard by Marriott Los Angeles $(7,000); the Embassy Suites Chicago $174,000; the Fairmont Newport Beach $83,000; the Hilton Garden Inn Chicago Downtown/Magnificent Mile $195,000; the Hilton San Diego Bayfront $2.8 million; and the Hyatt Regency Newport Beach $3,000.

(5)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015. Includes prior ownership results and the Company's pro forma depreciation expense for the Wailea Beach Marriott Resort & Spa acquired July 17, 2014. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. The Company determined the amount to include as pro forma depreciation expense by allocating the Company's purchase price of the hotel between the various components of the property (i.e. land, building, furniture, fixtures and equipment) based on the values included in existing tax records for the year ended December 31, 2013. Depreciable assets were then given lives ranging from 7 to 40 years.

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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Property-Level EBITDA Margins
Q2 & YTD 2015/2014


	Hotels sorted by number of rooms	For the Three Months Ended June 30,			For the Six Months Ended June 30,
		2015 Hotel EBITDA	2014 Hotel EBITDA	Change in	2015 Hotel EBITDA	2014 Hotel EBITDA	Change in
		Margin	Margin	bps	Margin	Margin	bps
1	Hilton San Diego Bayfront (1) (3)	40.3%	37.4%	290 bps	39.1%	41.0%	(190) bps
2	Boston Park Plaza (2)	38.2%	39.5%	(130) bps	22.9%	24.3%	(140) bps
3	Renaissance Washington DC	35.2%	32.0%	320 bps	31.2%	29.6%	160 bps
4	Hyatt Regency San Francisco (3)	29.3%	24.3%	500 bps	26.1%	17.4%	870 bps
5	Renaissance Orlando at SeaWorld ®	29.3%	32.1%	(280) bps	34.0%	33.9%	10 bps
6	Renaissance Harborplace	30.1%	35.2%	(510) bps	23.7%	27.7%	(400) bps
7	Wailea Beach Marriott Resort & Spa	34.3%	29.1%	520 bps	37.9%	34.7%	320 bps
8	Renaissance Los Angeles Airport	26.3%	24.7%	160 bps	25.0%	24.2%	80 bps
9	JW Marriott New Orleans	39.3%	37.1%	220 bps	38.8%	39.3%	(50) bps
10	Hilton North Houston (2)	20.3%	24.3%	(400) bps	25.0%	25.9%	(90) bps
11	Doubletree Guest Suites Times Square (1)	34.6%	35.9%	(130) bps	24.6%	27.5%	(290) bps
12	Marriott Quincy	36.0%	35.8%	20 bps	28.6%	26.5%	210 bps
13	Hilton Times Square	30.1%	34.2%	(410) bps	21.0%	26.4%	(540) bps
14	Fairmont Newport Beach (2) (3)	28.0%	23.9%	410 bps	26.9%	23.8%	310 bps
15	Hyatt Chicago Magnificent Mile (2)	35.4%	29.9%	550 bps	19.5%	11.5%	800 bps
16	Marriott Boston Long Wharf	45.8%	42.9%	290 bps	38.6%	35.0%	360 bps
17	Hyatt Regency Newport Beach (3)	25.3%	21.7%	360 bps	25.3%	21.3%	400 bps
18	Marriott Tysons Corner	36.0%	34.1%	190 bps	32.6%	32.5%	10 bps
19	Marriott Houston (2)	29.1%	24.9%	420 bps	30.2%	26.4%	380 bps
20	Renaissance Long Beach (3)	31.1%	27.8%	330 bps	30.2%	23.3%	690 bps
21	Embassy Suites Chicago (2) (3)	44.0%	48.3%	(430) bps	35.8%	36.9%	(110) bps
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (2) (3)	45.8%	46.8%	(100) bps	34.2%	30.3%	390 bps
23	Renaissance Westchester	25.9%	19.8%	610 bps	17.9%	13.4%	450 bps
24	Embassy Suites La Jolla (2)	44.7%	42.1%	260 bps	43.4%	41.2%	220 bps
25	Marriott Philadelphia	36.8%	32.5%	430 bps	28.5%	24.3%	420 bps
26	Hilton New Orleans St. Charles	43.2%	42.7%	50 bps	42.4%	43.6%	(120) bps
27	Marriott Portland	46.5%	46.9%	(40) bps	44.2%	43.7%	50 bps
28	Sheraton Cerritos	32.3%	29.5%	280 bps	29.8%	28.2%	160 bps
29	Marriott Park City	-7.7%	-11.2%	350 bps	31.1%	29.2%	190 bps
30	Courtyard by Marriott Los Angeles (3)	35.8%	34.6%	120 bps	35.2%	34.2%	100 bps

	Actual/Comparable Portfolio (4)	34.8%	33.4%	140 bps	30.9%	29.7%	120 bps

	Actual/Comparable Portfolio, excluding non-current year property taxes, net (5)	34.9%	33.3%	160 bps	30.9%	29.1%	180 bps

*Footnotes on page 37

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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Property-Level EBITDA Margins
Q2 & YTD 2015/2014 Footnotes

(1)

Reflects 100% of the operating results for both the Doubletree Guest Suites Times Square and the Hilton San Diego Bayfront.

(2)

(3)

(4)

(5)

Actual/Comparable Portfolio, excluding non-current year property taxes, net represents the 30 hotel Actual/Comparable Portfolio adjusted to exclude the non-current year property tax related items noted in Footnotes 2 and 3 above.

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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Property-Level EBITDA Reconciliation Q2 2015


	Hotels sorted by number of rooms		For the Three Months Ended June 30, 2015
	(In thousands)					Plus:		Plus:		Plus:		Equals:		Hotel
		Total		Net Income /		Other						Hotel		EBITDA
		Revenues		(Loss)		Adjustments (2)		Depreciation		Interest Expense		EBITDA		Margins
1	Hilton San Diego Bayfront (1)	$	38,089	$	9,933	$	450	$	3,418	$	1,542	$	15,343	40.3%
2	Boston Park Plaza		24,092		4,472		—		3,441		1,299		9,212	38.2%
3	Renaissance Washington DC		24,656		4,337		—		2,488		1,858		8,683	35.2%
4	Hyatt Regency San Francisco		26,800		4,675		—		3,167		—		7,842	29.3%
5	Renaissance Orlando at SeaWorld ®		16,632		1,601		—		2,221		1,051		4,873	29.3%
6	Renaissance Harborplace		11,458		600		—		1,698		1,154		3,452	30.1%
7	Wailea Beach Marriott Resort & Spa		16,316		3,132		—		2,466		—		5,598	34.3%
8	Renaissance Los Angeles Airport		7,771		1,360		—		682		—		2,042	26.3%
9	JW Marriott New Orleans		10,664		1,876		(5)		1,370		955		4,196	39.3%
10	Hilton North Houston (3)		5,913		(137)		—		886		454		1,203	20.3%
11	Doubletree Guest Suites Times Square (1)		17,696		1,844		992		1,588		1,707		6,131	34.6%
12	Marriott Quincy		8,718		2,028		—		1,110		—		3,138	36.0%
13	Hilton Times Square		14,732		597		83		2,528		1,225		4,433	30.1%
14	Fairmont Newport Beach (3)		8,115		1,177		—		1,098		—		2,275	28.0%
15	Hyatt Chicago Magnificent Mile (3)		10,891		2,424		—		1,430		—		3,854	35.4%
16	Marriott Boston Long Wharf		16,449		2,962		—		2,082		2,486		7,530	45.8%
17	Hyatt Regency Newport Beach		10,280		1,740		—		857		—		2,597	25.3%
18	Marriott Tysons Corner		6,195		1,244		—		803		182		2,229	36.0%
19	Marriott Houston		4,814		719		—		588		93		1,400	29.1%
20	Renaissance Long Beach		6,488		1,250		—		765		—		2,015	31.1%
21	Embassy Suites Chicago (3)		9,136		2,120		—		921		977		4,018	44.0%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (3)		7,091		2,508		—		741		—		3,249	45.8%
23	Renaissance Westchester		6,343		819		—		825		—		1,644	25.9%
24	Embassy Suites La Jolla (3)		5,721		1,014		—		859		684		2,557	44.7%
25	Marriott Philadelphia		5,402		1,394		—		484		112		1,990	36.8%
26	Hilton New Orleans St. Charles		4,105		1,375		—		398		—		1,773	43.2%
27	Marriott Portland		4,552		1,707		—		409		—		2,116	46.5%
28	Sheraton Cerritos		3,460		704		—		412		—		1,116	32.3%
29	Marriott Park City		1,549		(618)		—		438		61		(119)	-7.7%
30	Courtyard by Marriott Los Angeles		3,095		806		—		303		—		1,109	35.8%

	Actual/Comparable Portfolio (4)	$	337,223	$	59,663	$	1,520	$	40,476	$	15,840	$	117,499	34.8%

*Footnotes on page 40

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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	Supplemental Financial Information August 6, 2015

Property-Level EBITDA Reconciliation Q2 2014


	Hotels sorted by number of rooms		For the Three Months Ended June 30, 2014
	(In thousands)					Plus:		Plus:		Plus:		Equals:		Hotel
		Total		Net Income /		Other						Hotel		EBITDA
		Revenues (5)		(Loss)		Adjustments (6)		Depreciation		Interest Expense		EBITDA		Margins
1	Hilton San Diego Bayfront (1)	$	33,928	$	6,666	$	451	$	3,294	$	2,276	$	12,686	37.4%
2	Boston Park Plaza		23,331		5,009		—		2,874		1,324		9,207	39.5%
3	Renaissance Washington DC		21,672		2,636		—		2,415		1,892		6,943	32.0%
4	Hyatt Regency San Francisco (3)		23,491		2,865		—		2,850		—		5,715	24.3%
5	Renaissance Orlando at SeaWorld ®		16,285		1,921		—		2,227		1,083		5,231	32.1%
6	Renaissance Harborplace		13,138		1,718		—		1,713		1,200		4,631	35.2%
7	Wailea Beach Marriott Resort & Spa		13,546		1,809		—		2,130		—		3,939	29.1%
8	Renaissance Los Angeles Airport		7,251		1,070		—		720		—		1,790	24.7%
9	JW Marriott New Orleans		9,766		1,852		(4)		1,356		422		3,625	37.1%
10	Hilton North Houston		6,522		195		—		926		461		1,582	24.3%
11	Doubletree Guest Suites Times Square (1)		17,933		2,243		994		1,496		1,709		6,442	35.9%
12	Marriott Quincy		8,711		1,991		—		1,127		—		3,118	35.8%
13	Hilton Times Square		15,310		1,382		89		2,532		1,230		5,233	34.2%
14	Fairmont Newport Beach		7,858		752		—		1,125		—		1,877	23.9%
15	Hyatt Chicago Magnificent Mile		9,578		1,318		—		1,545		—		2,863	29.9%
16	Marriott Boston Long Wharf		15,222		1,943		—		2,100		2,486		6,529	42.9%
17	Hyatt Regency Newport Beach (3)		9,749		1,267		—		852		—		2,119	21.7%
18	Marriott Tysons Corner		5,877		611		—		824		569		2,004	34.1%
19	Marriott Houston		4,568		282		—		565		291		1,138	24.9%
20	Renaissance Long Beach		6,021		897		—		777		—		1,674	27.8%
21	Embassy Suites Chicago (3)		8,296		2,076		—		931		1,000		4,007	48.3%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (3)		6,473		1,833		—		1,195		—		3,028	46.8%
23	Renaissance Westchester		6,079		426		—		776		—		1,202	19.8%
24	Embassy Suites La Jolla		5,464		310		—		872		1,118		2,300	42.1%
25	Marriott Philadelphia		5,272		876		—		473		362		1,711	32.5%
26	Hilton New Orleans St. Charles		3,548		1,081		—		434		—		1,515	42.7%
27	Marriott Portland		4,262		1,585		—		414		—		1,999	46.9%
28	Sheraton Cerritos		3,396		585		—		418		—		1,003	29.5%
29	Marriott Park City		1,404		(790)		—		442		191		(157)	-11.2%
30	Courtyard by Marriott Los Angeles (3)		3,007		735		—		304		—		1,039	34.6%

	Comparable Portfolio (4)		316,958		47,144		1,530		39,707		17,614		105,993	33.4%

	Less: Prior Ownership (7)
	Wailea Beach Marriott Resort & Spa		13,546		1,809		—		2,130		—		3,939	29.1%

	Actual Portfolio (8)	$	303,412	$	45,335	$	1,530	$	37,577	$	17,614	$	102,054	33.6%

*Footnotes on page 40

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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	Supplemental Financial Information August 6, 2015

Property-Level EBITDA Reconciliation
Q2 2015/2014 Footnotes

(1)

Includes 100% of the operating results for both the Doubletree Guest Suites Times Square and the Hilton San Diego Bayfront.

(2)

Other Adjustments for the three months ended June 30, 2015 include: a total of $1.0 million in amortization of lease intangibles at the Doubletree Guest Suites Times Square, Hilton Times Square and JW Marriott New Orleans; and a total of $0.5 million in non-cash straightline lease expense at the Doubletree Guest Suites Times Square, Hilton San Diego Bayfront, Hilton Times Square and JW Marriott New Orleans.

(3)

Hotel EBITDA for the second quarter of 2015 is impacted by a total of $(0.1) million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: Embassy Suites Chicago $(35,000); Embassy Suites La Jolla $11,000; Fairmont Newport Beach $27,000; Hilton Garden inn Chicago Downtown/Magnificent Mile $(42,000); Hilton North Houston $(2,000); and Hyatt Chicago Magnificent Mile $(47,000). Hotel EBITDA for the second quarter of 2014 is impacted by a major renovation at the Hyatt Regency San Francisco. Hotel EBITDA for the second quarter of 2014 is also impacted by a total of $0.4 million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: Courtyard by Marriott Los Angeles $(7,000); Embassy Suites Chicago $162,000; Hilton Garden Inn Chicago Downtown/Magnificent Mile $195,000; and Hyatt Regency Newport Beach $3,000.

(4)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015.

(5)

Total Revenues for the three months ended June 30, 2014 are adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

(6)

Other Adjustments for the three months ended June 30, 2014 include: a total of $1.0 million in amortization of lease intangibles at the Doubletree Guest Suites Times Square, Hilton Times Square and JW Marriott New Orleans; and a total of $0.5 million in non-cash straightline lease expense at the Doubletree Guest Suites Times Square, Hilton San Diego Bayfront, Hilton Times Square and JW Marriott New Orleans.

(7)

Prior Ownership for the three months ended June 30, 2014 includes prior ownership results and the Company's pro forma depreciation expense for the Wailea Beach Marriott Resort & Spa acquired July 17, 2014. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. The Company determined the amount to include as pro forma depreciation expense by allocating the Company's purchase price of the hotel between the various components of the property (i.e. land, building, furniture, fixtures and equipment) based on the values included in existing tax records for the year ended December 31, 2013. Depreciable assets were then given lives ranging from 7 to 40 years.

(8)

Actual Portfolio includes all 29 hotels held for investment by the Company as of June 30, 2014, adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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	Supplemental Financial Information August 6, 2015

Property-Level EBITDA Reconciliation Q2 YTD 2015


	Hotels sorted by number of rooms		For the Six Months Ended June 30, 2015
	(In thousands)					Plus:		Plus:		Plus:		Equals:		Hotel
		Total		Net Income /		Other						Hotel		EBITDA
		Revenues		(Loss)		Adjustments (2)		Depreciation		Interest Expense		EBITDA		Margins
1	Hilton San Diego Bayfront (1)	$	75,201	$	18,636	$	900	$	6,806	$	3,052	$	29,394	39.1%
2	Boston Park Plaza (3)		32,729		(1,892)		—		6,810		2,590		7,508	22.9%
3	Renaissance Washington DC		43,587		4,978		—		4,881		3,724		13,583	31.2%
4	Hyatt Regency San Francisco		50,853		7,124		—		6,161		—		13,285	26.1%
5	Renaissance Orlando at SeaWorld ®		37,302		6,115		—		4,477		2,099		12,691	34.0%
6	Renaissance Harborplace		20,516		(869)		—		3,415		2,307		4,853	23.7%
7	Wailea Beach Marriott Resort & Spa		35,381		8,476		—		4,931		—		13,407	37.9%
8	Renaissance Los Angeles Airport		15,387		2,480		—		1,361		—		3,841	25.0%
9	JW Marriott New Orleans		21,701		3,820		(4)		2,713		1,901		8,430	38.8%
10	Hilton North Houston (3)		12,570		433		—		1,801		905		3,139	25.0%
11	Doubletree Guest Suites Times Square (1)		29,821		(1,220)		1,986		3,171		3,385		7,322	24.6%
12	Marriott Quincy		14,527		1,921		—		2,229		—		4,150	28.6%
13	Hilton Times Square		25,415		(2,321)		170		5,054		2,439		5,342	21.0%
14	Fairmont Newport Beach (3)		16,487		2,203		—		2,231		—		4,434	26.9%
15	Hyatt Chicago Magnificent Mile (3)		16,331		268		—		2,916		—		3,184	19.5%
16	Marriott Boston Long Wharf		27,186		1,355		—		4,183		4,945		10,483	38.6%
17	Hyatt Regency Newport Beach		19,004		3,091		—		1,721		—		4,812	25.3%
18	Marriott Tysons Corner		11,525		1,430		—		1,600		731		3,761	32.6%
19	Marriott Houston (3)		9,392		1,297		—		1,167		375		2,839	30.2%
20	Renaissance Long Beach		12,967		2,366		—		1,546		—		3,912	30.2%
21	Embassy Suites Chicago (3)		14,030		1,242		—		1,835		1,950		5,027	35.8%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (3)		10,434		2,098		—		1,471		—		3,569	34.2%
23	Renaissance Westchester		11,011		310		—		1,664		—		1,974	17.9%
24	Embassy Suites La Jolla (3)		11,023		1,685		—		1,740		1,364		4,789	43.4%
25	Marriott Philadelphia		9,482		1,291		—		963		446		2,700	28.5%
26	Hilton New Orleans St. Charles		8,431		2,781		—		791		—		3,572	42.4%
27	Marriott Portland		8,407		2,896		—		816		—		3,712	44.2%
28	Sheraton Cerritos		6,784		1,197		—		828		—		2,025	29.8%
29	Marriott Park City		5,988		725		—		891		246		1,862	31.1%
30	Courtyard by Marriott Los Angeles		6,039		1,515		—		613		—		2,128	35.2%

	Actual/Comparable Portfolio (4)	$	619,511	$	75,431	$	3,052	$	80,786	$	32,459	$	191,728	30.9%

*Footnotes on page 43

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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	Supplemental Financial Information August 6, 2015

Property-Level EBITDA Reconciliation Q2 YTD 2014


	Hotels sorted by number of rooms		For the Six Months Ended June 30, 2014
	(In thousands)					Plus:		Plus:		Plus:		Equals:		Hotel
		Total		Net Income /		Other						Hotel		EBITDA
		Revenues (5)		(Loss)		Adjustments (6)		Depreciation		Interest Expense		EBITDA		Margins
1	Hilton San Diego Bayfront (1) (3)	$	67,279	$	15,567	$	901	$	6,579	$	4,542	$	27,589	41.0%
2	Boston Park Plaza		34,485		4		—		5,730		2,637		8,371	24.3%
3	Renaissance Washington DC		41,091		3,545		—		4,820		3,791		12,156	29.6%
4	Hyatt Regency San Francisco (3)		41,354		1,603		—		5,586		—		7,189	17.4%
5	Renaissance Orlando at SeaWorld ®		36,161		5,674		—		4,407		2,161		12,242	33.9%
6	Renaissance Harborplace		21,437		134		—		3,410		2,399		5,943	27.7%
7	Wailea Beach Marriott Resort & Spa		31,050		6,500		—		4,260		—		10,760	34.7%
8	Renaissance Los Angeles Airport		14,483		2,069		—		1,433		—		3,502	24.2%
9	JW Marriott New Orleans		20,014		4,307		(3)		2,695		860		7,859	39.3%
10	Hilton North Houston		13,484		721		—		1,846		920		3,487	25.9%
11	Doubletree Guest Suites Times Square (1)		30,422		73		1,991		2,855		3,446		8,365	27.5%
12	Marriott Quincy		14,397		1,534		—		2,277		—		3,811	26.5%
13	Hilton Times Square		26,567		(697)		181		5,083		2,450		7,017	26.4%
14	Fairmont Newport Beach (3)		15,293		1,349		—		2,286		—		3,635	23.8%
15	Hyatt Chicago Magnificent Mile		13,519		(1,592)		—		3,148		—		1,556	11.5%
16	Marriott Boston Long Wharf		25,335		(280)		—		4,213		4,945		8,878	35.0%
17	Hyatt Regency Newport Beach (3)		17,850		2,096		—		1,714		—		3,810	21.3%
18	Marriott Tysons Corner		10,953		777		—		1,642		1,136		3,555	32.5%
19	Marriott Houston		9,254		737		—		1,127		582		2,446	26.4%
20	Renaissance Long Beach (3)		10,999		1,085		—		1,482		—		2,567	23.3%
21	Embassy Suites Chicago (3)		12,517		762		—		1,865		1,995		4,622	36.9%
22	Hilton Garden Inn Chicago Downtown/Magnificent Mile (3)		8,869		480		—		2,207		—		2,687	30.3%
23	Renaissance Westchester		10,292		(160)		—		1,535		—		1,375	13.4%
24	Embassy Suites La Jolla		10,335		232		—		1,781		2,240		4,253	41.2%
25	Marriott Philadelphia		9,466		646		—		948		707		2,301	24.3%
26	Hilton New Orleans St. Charles		7,474		2,275		—		980		—		3,255	43.6%
27	Marriott Portland		7,641		2,508		—		829		—		3,337	43.7%
28	Sheraton Cerritos		6,525		1,007		—		833		—		1,840	28.2%
29	Marriott Park City		5,793		426		—		882		382		1,690	29.2%
30	Courtyard by Marriott Los Angeles (3)		5,933		1,417		—		610		—		2,027	34.2%

	Comparable Portfolio (4)		580,272		54,799		3,070		79,063		35,193		172,125	29.7%

	Less: Prior Ownership (7)
	Wailea Beach Marriott Resort & Spa		31,050		6,500		—		4,260		—		10,760	34.7%

	Actual Portfolio (8)	$	549,222	$	48,299	$	3,070	$	74,803	$	35,193	$	161,365	29.4%

*Footnotes on page 43

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

Page 42

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	Supplemental Financial Information August 6, 2015

Property-Level EBITDA Reconciliation
Q2 YTD 2015/2014 Footnotes

(1)

Includes 100% of the operating results for both the Doubletree Guest Suites Times Square and the Hilton San Diego Bayfront.

(2)

Other Adjustments for the six months ended June 30, 2015 include: a total of $2.1 million in amortization of lease intangibles at the Doubletree Guest Suites Times Square, Hilton Times Square and JW Marriott New Orleans; and a total of $1.0 million in non-cash straightline lease expense at the Doubletree Guest Suites Times Square, Hilton San Diego Bayfront, Hilton Times Square and JW Marriott New Orleans.

(3)

Hotel EBITDA for the first six months of 2015 is impacted by a major renovation at the Boston Park Plaza, and by a total of $0.1 million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: Embassy Suites Chicago $(35,000); Embassy Suites La Jolla $11,000; Fairmont Newport Beach $27,000; Hilton Garden inn Chicago Downtown/Magnificent Mile $(42,000); Hilton North Houston $102,000; Hyatt Chicago Magnificent Mile $(47,000); and Marriott Houston $84,000. Hotel EBITDA for the first six months of 2014 is impacted by major renovations at the following hotels: the Hilton Garden Inn Chicago Downtown/Magnificent Mile; the Hyatt Regency San Francisco; and the Renaissance Long Beach. Hotel EBITDA for the first six months of 2014 is also impacted by a total of $3.2 million in non-current year property tax credits (assessments), net of appeal fees received at the following hotels: the Courtyard by Marriott Los Angeles $(7,000); the Embassy Suites Chicago $174,000; the Fairmont Newport Beach $83,000; the Hilton Garden Inn Chicago Downtown/Magnificent Mile $195,000; the Hilton San Diego Bayfront $2.8 million; and the Hyatt Regency Newport Beach $3,000.

(4)

Actual/Comparable Portfolio includes all 30 hotels held for investment by the Company as of June 30, 2015.

(5)

Total Revenues for the six months ended June 30, 2014 are adjusted for changes stipulated by the industry's Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, which became effective January 1, 2015.

(6)

Other Adjustments for the six months ended June 30, 2014 include: a total of $2.1 million in amortization of lease intangibles at the Doubletree Guest Suites Times Square, Hilton Times Square and JW Marriott New Orleans; and a total of $1.0 million in non-cash straightline lease expense at the Doubletree Guest Suites Times Square, Hilton San Diego Bayfront, Hilton Times Square and JW Marriott New Orleans.

(7)

Prior Ownership for the six months ended June 30, 2014 includes prior ownership results and the Company's pro forma depreciation expense for the Wailea Beach Marriott Resort & Spa acquired July 17, 2014. The Company obtained prior ownership information from the Wailea Beach Marriott Resort & Spa's previous owner during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. The Company determined the amount to include as pro forma depreciation expense by allocating the Company's purchase price of the hotel between the various components of the property (i.e. land, building, furniture, fixtures and equipment) based on the values included in existing tax records for the year ended December 31, 2013. Depreciable assets were then given lives ranging from 7 to 40 years.

(8)

PROPERTY-LEVEL EBITDA & EBITDA MARGINS

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