Good day everyone and welcome to the Chatham Lodging Announces their second quarter conference call. Today’s call is being recorded. And at this time, it is my pleasure to turn the conference over to Chris Daly. Please go ahead sir.

Thank you, Lorrie. Good morning everyone. Welcome to the Chatham Lodging Trust second quarter 2014 results conference call. This morning, before the opening of the market, Chatham released results for the second quarter 2014. And I hope you’ve had a chance to review the press release. If you did not receive a copy of the release or you’d still like one, please call my office at 703-435-6293 and we’ll be happy to send you a copy. Or you may view the release online at Chatham’s website, www.chathamlodgingtrust.com. Today’s conference call is being transmitted live via telephone and by webcast over Chatham’s website and at streetevents.com. A recording of the call will be available by telephone until 1:00 PM Eastern on Tuesday, August 12, 2014, by dialing 1-888-203-1112, reference number 8711670. A replay of the conference call will be posted on Chatham’s website. As a reminder, this conference call is the property of Chatham Lodging Trust and any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Chatham is prohibited. Before we begin, management has asked me to remind you that in keeping with the SEC’s Safe Harbor guidelines, today’s conference call may contain forward-looking statements about Chatham Lodging Trust, including statements regarding future operating results and the timing and composition of revenues amongst others. Except for historical information, these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, including the volatility of the national economy, economic conditions generally, and the hotel and real estate markets specifically, international and geo-political difficulties or health concerns, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, weather conditions or natural disasters, supply and demand for lodging facilities in our current and proposed market areas and the company’s ability to manage integration and growth. Additional risks are discussed in the company’s filings with the Securities and Exchange Commission. All information in this call is as of August 04, 2014 unless otherwise noted, and the company undertakes no obligation to update any forward-looking statements to conform the statement to actual results or changes in the company’s expectations. During this call, we may refer to certain non-GAAP financial measures, such as EBITDA and adjusted EBITDA, which we believe to be common in the industry, and helpful indicators of our performance. In keeping with SEC regulations, we have provided and encourage you to refer to the reconciliations of these release. Now, to provide you with some insight into Chatham’s 2014 second quarter results, allow me to introduce Jeff Fisher, Chairman, President and CEO; and Dennis Craven, Executive Vice President and Chief Financial Officer. Let me turn the session over to Jeff. Jeff?

Thanks, Chris, and thank you. Good morning, everyone. We’re thrilled to be here today, this being our first earnings release since acquiring the four Silicon Valley hotels and completing the Innkeeper’s Northstar transaction. I think the results reported continue to validate our strategy to own the best assets in the fastest growing markets with the highest barriers to entry. Additionally, our utilization of best-in-class manager, Island Hospitality, further enhances our already strong return on investment. You can see that as you look at the results, look at the margin increases and the flowthrough to earnings from RevPAR gains. We’ve got nothing but great results to talk about today. During the second quarter, we increased our annual dividend 14% and since our IPO, we’ve increased our dividend approximately 40%. We closed the largest acquisitions in the company’s history. We produced the highest RevPAR growth across the lodging industry. We drove the highest operating margins in the lodging industry. We saw EBITDA and FFO jump 58% and 71% respectively. And when you look forward to 2015, our EBITDA and FFO growth is projected to be among the highest in the space. By almost any metric, Chatham ranks as one of, if not the best, performing companies in all of lodging. We spend a tremendous amount of time and effort putting together the Innkeeper’s transactions. We realized a profit of approximately $80 million or $3.00 per share in less than three years. That’s $3.00 per share. The investment gained in over 80% IRR for our shareholders. And through thoughtful analysis of potential structures and teaming up with Northstar, we were then able to reinvest that $80 million profit tax-free into new investments with high growth dynamics, with strong going in leverage [ph] yields. So when you put a multiple on that gain, the…

Thanks, Jeff. Great to be with everyone today and to talk about the all-around great results. For the first quarter, we report a net income of $64.9 million or $2.42 per diluted share compared to net income of $2.2 million of $0.11 per diluted share for the 2013 second quarter. The primary diver behind the significant net income increase was the accounting gain of $66.2 million related to the recapitalization of the Innkeepers joint venture and the sale of the four Silicon Valley hotels from the joint venture to Chatham. Also during the quarter, we incurred onetime expenses of approximately $5.5 million related to the transactions. The accounting gain of $66 million is not the same as the actual investment gain of over $80 million due to basically some technicalities surrounding the rollover of the gain related to our investment in the Innkeepers joint venture with Northstar. It was record second quarter RevPAR growth for Chatham as we saw RevPAR grow 9.6% in the quarter for all 29 hotels owned at the end of the quarter. RevPAR were particularly strong, up 11% and 10.5% respectively aided by the fact that industry demand was up 4.5% while supply growth was a muted 0.8% in the second quarter. We saw a double-digit RevPAR increases across almost half of our markets including all four of the Silicon Valley Residence Inns which as Jeff alluded to saw RevPAR grow approximately 12% in the quarter. However, if you actually exclude those four hotels, RevPAR was still up approximately 9% for the quarter which shows the breadth of the performance across our entire portfolio with really the only weak market for us being Portland, Maine where RevPAR was down 1.4%. However, that was much better than we expected. We knew that there were three new hotels…

Thank you, gentlemen. The question-and-answer session will be conducted electronically today. (Operator instructions) We’ll go first to Gaurav Mehta with Cantor Fitzgerald. Gaurav Mehta – Cantor Fitzgerald, L.P.: Thank you, good morning.

Good morning. Gaurav Mehta – Cantor Fitzgerald, L.P.: You mentioned about certain expense management initiative that partly drove the margin expansion. Can you elaborate on that?

Yes, we certainly can. We had spent some time in the second quarter and really in the latter part of the first quarter looking at first of all some repairs and maintenance expenses across the portfolio where we thought we were just being a little inefficient in terms of staffing and overall expenses. So we spent some time making those adjustments to repairs and maintenance. And then as we’ve kind of moved through the second quarter, we also looked at both from a G&A and just a room’s margin perspective, again primarily staffing related issues where we were just a little bit heavy in certain departments. So we spent some time there, made some efficiencies that helped with the margins. Gaurav Mehta – Cantor Fitzgerald, L.P.: Great. And second question I have is on joint venture. In the press release you mentioned that Chatham and Northstar will continue to explore other JV opportunities. Can you provide more details on that? Are you looking at future acquisitions via JVs or any kind of details on that?

Yes, we can certainly expand on it. I mean, listen, there are quite a few and there have been quite a few larger portfolios that have been on the market and sold this year. There continue to be some larger portfolios as well as some smaller portfolios. And as same thing we did with the Cerberus joint venture but with Northstar now, we continue to look at those and we discuss those openly those opportunities with Northstar who is also very interested in the space. Gaurav Mehta – Cantor Fitzgerald, L.P.: Great. That’s all I have.

Thank you.

And moving on, we’ll go to Nikhil Bhalla at FBR. Nikhil Bhalla – FBR Capital Markets & Co.: Hi, good morning, Jeff and Dennis. Just the first question I have is on second quarter results, how much did the four hotels contribute on the EBITDA side? You only owned it I think for just maybe two weeks or so, so I was wondering if I could get some color on that.

Yes, I mean I don’t have the EBIT number off the top of my head. I do know that I can basically from an FFO perspective after debt cost, it was basically $0.01 for the second quarter. So it was about $300,000 of FFO. From an EBITDA perspective, that’s probably almost $500,000. Nikhil Bhalla – FBR Capital Markets & Co.: Got it, thank you.

And also – Nikhil, also I’d just like to add because I think you’re driving a certain point home which is those assets do not drive, at least as of now, our RevPAR results. So don’t – we don’t want investors to believe that they added four Silicon Valley hotels yet and all their strength and their portfolio, RevPAR gain of almost 10% is there. It’s not. As we said, a number of these hotels, almost half have got double-digit RevPAR gains and market spread all around the country. When you exclude those four hotels, RevPAR was still up 9% for the quarter. Really strong. There’s the number. Nikhil Bhalla – FBR Capital Markets & Co.: Yes, that’s pretty strong. Thank you for that, Jeff. Just a follow-up question on the $59 million spend – the CapEx spend, could you just remind us how much of that takes place in 2014, how much of that takes place in 2015 and ‘16?

Yes, no problem. When you look at the four hotels, the timing of that is that the Mountain View hotel is a little bit ahead of – or is quite a bit ahead of the other three in terms of planning. We hope to start construction of the new tower of Mountain View in the fourth quarter of this year. That cost is about $7 million in total. And that’s basically – you’ll probably spend about $1 million, maybe $2 million by the end of the year, not a lot. I’d say closer to $1 million. And then the balance of that, $7 million will be spent in 2015. For the other three hotels, you’re looking at $52 million of cost with those projects starting in the latter part of 2015. So again, probably for those three, you’re talking about $10 million of the $50 million is going to be spent in 2015 with the balance spent in 2016. Nikhil Bhalla – FBR Capital Markets & Co.: Okay, so it seems like majority of the CapEx spend loaded in 2016 probably more like around $40 million or so, is that fair?

Yes, that’s fair.

Yes, because that’s – we plan of finishing the hotel, furnishing the hotel, et cetera. Nikhil Bhalla – FBR Capital Markets & Co.: Okay, got it. Just final question on your target leverage levels, where would you like to be on the net debt to EBITDA sort of one to two years from now?

Yes, I mean listen, I think as I alluded to, our free cash flow is pretty strong. We’ll continue to pay down debt. As we kind of sit here at seven-ish times debt to EBITDA, I think we’d certainly like to ratchet that down over time with free cash flow. So maybe in the kind of five to six times range. But we’re pretty comfortable. I mean we’re certainly comfortable as we sit here today. We certainly want to continue to grow the portfolio if the right opportunities come around. But it has to be at the right price. Nikhil Bhalla – FBR Capital Markets & Co.: Got it. Thanks, Dennis and Jeff.

All right, thank you.

(Operator instructions) And we’ll go next to Anthony Powell at Barclays. Anthony Powell – Barclays Capital, Inc.: Hi, good morning guys. Good results this morning.

Hey, Anthony. How are you? Thank you. Anthony Powell – Barclays Capital, Inc.: Very good. The second quarter, we saw a pretty strong transient demand growth across the board, especially at your hotels. How sustainable is that demand growth going forward and how do you expect groups to transient or I guess leisure versus business to trend in the third quarter and beyond?

I think – this is Jeff. I think you’re right that we don’t see any reason for any change in the current demand patterns at all that we’re experiencing. Obviously, our portfolio when you look at it particularly in the third quarter, has more leisure business. Not more as an overall number, but some of the hotels like Portland downtown at the waterfront, Bellevue asset, et cetera will experience heavy leisure demand that really doesn’t exist for other parts of the year. But beyond that, corporate is strong and that’s really our bread and butter business. Anthony Powell – Barclays Capital, Inc.: Great. And just one more maybe on the – at the market program, what kind of role does it play today as you share the at that time and what were these proceeds and how do you view that program going forward?

Sure. This is Dennis. We were included in the RMZ at the latter part basically at the end of May. And we saw the opportunity from the increased volume and liquidity in the stock at the time. And demand basically is an opportunity to issue some shares on the ATM which I think we disclosed was about $11 million. We basically use that debt or use that cash to pay down borrowings on our line that we had obviously pumped out a little bit in closing the Innkeepers transactions in the first week of June. So really we look at it as a way to source a little bit of liquidity for that transaction.

And the stock price turned out to be pretty close or on top of our 52-week high, right, Dennis?

Yes.

So the number was the right number. Anthony Powell – Barclays Capital, Inc.: Got it. Thank you.

(Operator instructions) And we’ll go next to Rod Petrik at Stifel. Rod Petrik – Stifel Nicolaus: Hey, good morning, Jeff, Dennis. Hey, can we go back to the Northstar relationship? They’ve come out publicly and talked to investors about growing their hotel platform. And they envisioned expanding their relationship with you all. And this is a company that can grow a platform quickly. They just grew their healthcare platform over $4 billion today. How do you look at that relationship evolving from your perspective? Where do you fit in? I think they’ve talked about you sourcing deals, the possibility of Island managing the properties. But just from your perspective, how do you look at it?

Well, we look at it, Rod, as a fantastic opportunity and a relationship that probably will bring more benefits to our shareholder overtime than even the Cerberus one. I think first and foremost, the structure that we envision on very large transactions such as some of the larger portfolio transactions like Innkeepers that we completed, would be the model. Whereby it’s kind of 90-10 JV, but with Chatham being able to carve out the very, very high RevPAR, high barrier to entry market hotels that would go on its balance sheet 100%. So we get great growth inside of Chatham with those kind of assets. Northstar is happy to let have those kind of assets because they’re going to be more in a levered return model, not quite as reliant on RevPAR and earnings growth type assets as we are. So obviously, the higher barrier to entry market assets such as the four Silicon Valley assets that we bought and frankly the rest of our portfolio grows faster. So we’ll have growth. And on the Island side, it certainly has – that company has proven itself over and over and over again to be best in class. I think companies like Northstars and others on Wall Street are seeing the results that Chatham posts and therefore, Island as an independent third party management company is being sought out for new management contracts. And Northstar sourced a 22-hotel portfolio over a year ago that they’ve been working on taking down. And in fact, they did and engaged Island separately to run those assets for them. So you’re right. They definitely are in a growth mode and Island has the scalability obviously to be able to assist them on assets that they sourced and that they may find on their own and acquire. Rod Petrik – Stifel Nicolaus: Thanks. Can you look at the Silicon Valley market? What kind of supply growth do you see coming on? And are there any barriers inherent in the properties that you have?

When you say barriers inherent in the properties, what do you mean by that? Rod Petrik – Stifel Nicolaus: Well, specifically location. Can somebody come and build across the street from you?

No, nobody is building across the street from Sunnyvale, Silicon Valley one and two which sit on Highway 101 and are surrounded by dense office or one case some high-end residential. Mountain View, El Camino, I’m just taking them one by one, Rod, I don’t see opportunity in Mountain View at all. Besides they’re all chopped up and tiny, we actually bought a tiny little luggage store in adjoining parcel where we’re going to be able to add those rooms from Mountain View. San Mateo is characterized the same way. It’s all land lock stuff. There is some new supply coming in and around the San Jose Airport. There’s two or three hotels coming there and there, there’s a little more land. And given the high absolute RevPAR numbers in Silicon Valley, those deals even with the very high land cost there, probably pencil pretty well. But of course, as you look over the last 10 years and we’ve tracked it obviously for 20, there’s literally on one hand the amount of hotels that have been added to that supply over those 20 years and of course we all know what office space and companies and number of employees in that market has done in terms of growth. So frankly, the occupancy rates that you see ought to continue to be the occupancy rates.

I think it’s really important, Rod, in those markets with the customer base that you have that is a little more from a think safe perspective, a little bit longer. That’s where the residents and brand really succeeds. You’ve got a customer that has to be there for multiple weeks or multiple months. They’re not looking to stay at a hotel where they’re got to pay for breakfast every morning and deal with those types of things. They want to – our room at the Residence Inn provides the best value for those guys.

Well, they’re engineers. They’re people in from Asia. They don’t want to stay at the [indiscernible] of the airport. So it’s a different view. Rod Petrik – Stifel Nicolaus: Any sense to what an extended stay property at the San Jose airport would cost to build today if you have to go and then buy the land?

Well, I’d say with land, you’re certainly going to be well over 250,000 room, somewhere in that area I would guess, 250 to 285 is a pretty ball park depending upon what you pay for land in that market. Rod Petrik – Stifel Nicolaus: Okay, thank you.

Thanks, Rod.

And gentlemen, I have no further questions at this time. I would like to turn the program back over to you for any additional or concluding remarks.

We thank everybody for their participation today. We are looking at I think a pretty strong summer based on looking at our July numbers here as well. So we look forward to coming for our third quarter call and further reporting good results. Thank you.

And ladies and gentlemen, that does conclude today’s conference. I’d again like to thank everyone for joining us.