Greetings and welcome to the Chatham Lodging Trust Fourth Quarter Earnings Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Mr. Chris Daly. Thank you Mr. Daly, you may begin.

Thank you, Michelle. Good morning, everyone, and welcome to the Chatham Lodging Trust fourth quarter 2015 results conference call. This morning, before the opening of the market, Chatham released results for the fourth quarter 2015, 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 would like one, please call my office at 703-435-6293, and we'll be happy to email you one. Or you may view the release online at Chatham's Web site, chathamlodgingtrust.com. Today's conference call is being transmitted live via telephone and by webcast over Chatham's Web site. A recording of the call will be available by telephone until 11:59 PM Eastern Time on Wednesday, March 02, 2016, by dialling 1-877-870-5176, reference number 13629747. A replay of the conference call will also be posted on Chatham's Web site. As a reminder, this conference call is property of Chatham Lodging Trust, and any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of the company 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, among those other things. 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 market specifically, international and geopolitical 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 February 24, 2015, unless otherwise noted, 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. 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 measures to GAAP results in our earnings release. Now, to provide you with some insight into Chatham’s 2015 fourth quarter results, allow me to introduce Jeff Fisher, Chairman, President, and Chief Executive Officer, Dennis Craven, Executive President and Chief Operating Officer and Jeremy Wegner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff Fisher. Jeff?

Thanks Chris. Good morning, everyone. We are certainly pleased again to be here this morning. We’re hosting this call actually we’re on the road for our regular scheduled Board Meeting as well tomorrow from our Residence Inn Gaslamp District here in San Diego. We acquired this hotel as you know about a year ago. Certainly great asset we’re enjoying being in San Diego and look forward to showing our Board what we have planned in terms of a regularly scheduled renovation as well here at the end of the year. I’d like to start by spending a few minutes upon our fourth quarter results, which produced RevPAR growth that I’m particularly pleased of, of 4.7%. Of course as we all expect it’s slightly below our guidance of 5% to 5.5% that we initially set. But adjusted FFO per share of $0.42, which was within the guidance range we provided. During the quarter, RevPAR grew 4.5% in October, 5% in November and 4.5% again in December. We’ve been keeping a little tally as everybody has been reporting their results over the last week or so. And we are pretty proud of the fact as we had hoped and suspected that we would have at least so far the best results of all C-Corp’s and all lodging REIT’s in terms of RevPAR growth and FFO growth I believe in the fourth quarter. I think that outperformance again we’ve said it over and over again is driven by a number of factors, it’s driven by the quality of the hotels that we own, it’s driven by the markets that we’re in. And the markets that we’re acquired our hotels in as we’ve said many times have been very specifically targeted to be the place where job growth is prevalent and strong. So you…

Thanks Jeff. Good morning everybody. I am going to walk through our earnings for the quarter and compare them to our fourth quarter guidance preparing a reconciling between our actual results and the guidance we provided. Our RevPAR guidance for the quarter was 5% to 5.5% RevPAR growth for all hotels and we ended up seeing growth of 4.7%. This was driven by a 3.1% increase in occupancy to 77% and a 1.5% increase in ADR to $154. The primary drivers behind the underperformance was the decline in our two Western Pennsylvania hotels that are managed by Concord which saw RevPAR decline 22% in the quarter, I think everybody is fully aware of the challenges in the oil and gas industry. These two hotels are primarily driven by performance in that sector. So certainly that is going to have a negative impact on not only our quarter, but also it is going to have an impact in 2016 with RevPAR down in similar amounts for the full year projected in 2016. Our market index was down about 1% in the quarter. While markets themselves were down on average about 21% in those two Western Pennsylvania hotels. So certainly not something that’s inductive of those two hotels to nearly an overall market performance. Our two DC hotels were up 0.4% in the quarter, which is again obviously lagging our overall portfolio performance. And another weak market for us was the Carlsbad Homewood Suites, where RevPAR was down 1.4% as that was impacted by new supply in the market. Lastly, we had two hotels that were under renovation in the quarter, the SpringHill Suites in Savannah, and the San Antonio Homewood Suites on the Riverwalk where RevPAR was down 19% and 16% respectively. The San Antonio Homewood Suites we accelerated the timeline…

Thanks Dennis. Good morning everyone. For the quarter we reported net income of $4.5 million or $0.12 per diluted share compared to a net loss of $5.3 million or $0.16 per diluted share in Q4 2014. The primary differences between net income and FFO relate to non-cash costs such as depreciation which was $12.8 million in the quarter, the write off of $0.4 million of deferred financing costs associated with the refinancing of our revolving credit facility, the $3.6 million gain on the sale of our interest in the joint venture to own the Residence Inn Torrance and our share of similar items within the joint ventures which were approximately $1.9 million in the quarter. Adjusted FFO for the quarter was $16.1 million compared to 12.7 million in Q4 of 2014 an increase of 27%. Adjusted FFO was $0.42 per share which represents an increase of 14% or $0.37 per share generated in Q4 of 2014. Adjusted EBITDA for the Company rose 22% to $26 million compared to $21.4 million in Q4 2014. In the quarter our two joint ventures contributed approximately $3.7 million of adjusted EBITDA and 1.8 million of adjusted FFO and we received distributions of 1.3 million from the Innkeepers portfolio and $450,000 from the Inland portfolio. Our balance sheet remains in excellent condition. Our net debt was $589 million at the end of the quarter and our leverage ratio was 41.2%. We’re very comfortable at this leverage level and have the capacity to complete our planned Silicon Valley expansions and additional acquisitions without raising equity, although there are no acquisitions currently in the pipeline. During the fourth quarter, we refinanced our $175 million secured credit facility with a new $250 million unsecured credit facility. The new facility matures in November 2020 and is priced at LIBOR…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Gaurav Mehta, so sorry about that with Cantor Fitzgerald. Please proceed with your question.

First question on the acquisition pipeline, I understand there is no acquisitions in 2016 guidance, but I was just hoping to get your view on what you are seeing in the market in terms of product flow and pricing?

Well there is not much going on out there. This is Jeff, good morning. And that there are some select service hotels that some brokers have listings on that are trying to get some interest, but frankly, on our end anyway, given our multiple we certainly don’t think as we’ve said it many times, now is the time to be buying. The math doesn’t work obviously and therefore we are just going to double down on our focus in really maximizing the earnings. From the portfolio that we’ve got, I can’t tell you just on a bigger sense, there really haven’t been enough transactions in the last three months, four months since everyone’s multiple has really contracted and overall economic fears have persisted, RevPAR growth rates have dropped. Macroeconomic world events have been a little bit dicey. So you can’t really put your finger on a cap rate, if that’s you’re looking for to say yes, what was a seven cap is now an eight cap. I kind of feel that’s the way it ought to be and perhaps in some cases on a one-off or two-off selected basis I’ve heard that that’s more realistic right now at this time.

And a second on the RevPAR side, can you talk about the trends that you've seen in January and February?

Yes, we’ve talk a little bit about them, I mean, they’re so far in January we’re pretty consistent with the numbers that we had as we went through Q4 perhaps a little bit less, did we put a number out for January yet or?

No, but I mean our January RevPAR growth was a little over 4% for the portfolio.

I think we just put a number up. So -- and on again February honestly, the results are moving around so much particularly because of that negative Super Bowl impact for us any way with our two big Sunnyvale hotels February probably come in lighter than that, that’s why we have guided in the first quarter lower specifically for some not great February results.

[Operator Instructions] Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your questions.

Your hotel in Denver materially outperformed that market. I was wondering if you could talk about what drove that outperformance, and also your view of the Denver market this year as a whole?

The Cherry Creek hotel which really since we have bought it the Hyatt Place in Cherry Creek is really benefiting from just a very good location in a market that has seen tremendous demand growth really from the transient customer. From a corporate perspective the hotel does sit adjacent to a pretty large office tower but it's really not the primary driver of business in that market. And we’ve continued to see just nice outperformance out of that hotel. The Hilton Garden Inn at the Tech Center as well as upper single digit RevPAR growth in the quarter and that one is more obviously corporate driven but again just that entire Denver area and we see it in our Innkeepers assets as well that are in Denver it is just a very strong market.

And Jeff, I don't know if you can comment on the broad RevPAR growth outlook for select service hotels relative to full service. Last year, I think select service outperformed, but we've seen a bit of a reversal of that trend in the STR data recently, so I wondered if you could comment on that outlook?

I don’t really know enough about whole service hotels to be able to give you a very good comparison. But you know what the trends are and you know where select service companies have positioned themselves for RevPAR for this year, so, I kind of think that the numbers are out there for everybody to see.

Yes, I mean, certainly Anthony as well from a new supply perspective, even though the historical new supply growth is still less than 2% projected for 2016 and within kind of the upscale segment it's closer to 5%. So, there is certainly across the country from a new supply perspective that will have somewhat of an impact in 2016 and ’17.

And then my last one from me -- your credit facility now has the option to -- for you to buy back shares, 75 million. What's your overall view on share repurchases this year relative to other uses of capital?

Yes I mean listen I think at this point it's a nice mechanism for us to have we don’t have any plans to announce any type of share repurchase programs at this point. It allows us to repurchase I think $75 million of stock which is a little less than 10% of our float. I think for our shares it’d be difficult to really acquire much many shares anyways. But listen from a use of proceeds perspective of our credit facility, right now with the Silicon Valley expansions projected to generate kind of a low teen returns that’s the best use of our capital at this point.

Our next question comes from the line of Blair Brantley with BB&T Capital Markets. Please proceed with your questions.

I just wondered -- I had a question about the Silicon Valley and kind of the updated plans there. Can you kind of walk through what's happening with the last piece of that expansion plan again?

Yes basically with the -- I think you’re referring to the San Mateo location?

Right.

Yes so the area in the hotel or the area where the hotel sits is something called Mariners Island. And just going through the process of getting the approvals there we uncovered some old provisions within the plan of that Mariners Island area. And essentially what we’re looking at, at the moment is the 43 rooms that we thought we were going to be able to add in that location at least as currently where we stand is going to be less than 30. So from a just a pure returns perspective we’re -- if we get held to that number of rooms then from a pure returns perspective it doesn’t appears though that is going to make a whole lot of sense to invest the dollars in adding the rooms. So, we still are looking at that situation.

Just to be clear, the reason why if it was pure incremental rooms, any room you add in our view in Silicon Valley is going to make you money and it's going to increase the NAV of the Company. But you’ve got to take down rooms okay meaning existing buildings. You remember these are aplex kind of individual buildings in order to build the new rooms so the map starts looking pretty dicey when you’re taking down a number of rooms and in that case I think we were originally going to take down -- or we were taking down 24 there or something in order to -- or a little bit less in order to create the new room count. But now if the new room count can only be 30 then it's just a wash.

And then how does your -- how does the CapEx plan for the other two pieces fit versus what you had planned or what you had thought it would be earlier?

It will certainly cost…

70 million-75million?

Yes, I mean, certainly, costs are rising if you when -- and we’ve spent a bunch of time out there in the last six months just understanding what’s going on and as we plan these expansions that construction is just rampant in the area whether it’s multi-family, whether it’s corporate. So certainly our expansion costs have risen about 25% since from a year and a half ago. So it’s not surprising given what’s going on. The good news is, is that the hotels have continued to grow from a RevPAR and earnings perspective, so the returns are still pretty strong, but there is obviously a lot of construction activity in Silicon Valley.

It still makes sense with an un-levered 12% to 14% return, which is what we project based on kind of not even inflating RevPAR. Okay? Just quick and dirty using existing RevPAR numbers, so, we are still real excited about having those rooms on-board and also those buildings in each hotel also gets us a brand-new lobby. We call it a Gatehouse in a Residence Inn, but it’s the area that you serve your breakfast, your evening cocktail and reception area. So all of that together will enhance, I think our overall RevPAR as well. And the timing on those is as Dennis indicated is more of a Q4 start rather than mid-Q3. So we haven’t slipped much, but when you drive around in Silicon Valley, you do see a lot of apartment construction and you see Google, you see Apple’s new headquarters under construction and frankly the contractors are having trouble finding labor.

Okay. Yes, that kind of segways into my next question about just overall tech spending environment and if you've seen any changes there?

We’re watching this really closely here, because obviously trends are pretty volatile right now in the industry. And we are keeping our hands on pretty much a weekly basis of what’s going on. And we are told and we don’t see any substantial trends there. There have been a couple of newspaper articles in the San Jose Business Journal in the last month ops XYZ is going to layoff some people and there is some obviously negative things being written since the IPO market has fallen apart, about VC travel and that kind of stuff. But frankly, they don’t stay in our Residence Inns, the engineers stay in our Residence Inns. So I think maybe the upper end hotels might be feeling a little bit of that impact. So we still feel good, but we are I would say more cautious and careful about not waiting to the last minute to book business, trying to put some heads in beds perhaps a little earlier, because we definitely see where you look less of a transient business customer in the hotels.

Our next question comes from the line of Bryan Maher with FBR. Please proceed with your question.

If we could switch gears a little bit, you talked a little bit about the Hyatt that you have in Cherry Creek. And you have an awful lot of the Hilton product and the Marriott product, but only a little bit of the Hyatt product. Can you tell us what you're seeing out there in the field as it relates to the various brands that you kind of traffic in? And do you think you are getting more bang for your buck from kind of one brand or another? And do you think you'll do a little bit more with Hyatt in the future?

Well, let’s see how we could do this nicely. We, and as you know we love Residence Inns and it’s not because we love Residence Inns, we really like the returns we get on our investment in these hotels. So our preference as you know is to be in the upscale extended stay business. We’ve got some Hyatt Houses that fit that bill. They were formally Summerfield Suites. And then Hyatt bought that chain, so, and converted them. But what we see, as particularly compared to Marriott and Hilton, is just less contribution through the reservation system. And even though that Hyatt Place in Cherry Creek has really done well, when you look at the contribution numbers and you look at the source of business and the market segmentation of the hotel what you find is a lot of it is OTA business. And it’s not sort of hyatt.com. And that, I think is probably a fair cross-section of the few Hyatt Places that we own and the Hyatt Houses that we own.

Well, that segways perfectly into kind of my follow-up question on the OTAs and their impact. And a lot of discussion as it relates to the OTAs at ALICE this year. Can you kind of weigh in on what your view is there? And when we look at Marriott and Starwood combining, and a lot of discussion on maybe some others combining, in an effort to, eventually, years down the road, maybe being able to muscle the OTAs back a little bit, what are your thoughts on that bigger picture action?

Well to me it's all positive. Dennis mentioned the impact in Q4 to our FFO and to our earnings I think primarily other than some real estate tax increases that are one time the expansion of our TA costs as a line item. And particularly all in the OTA line is just enormous on a year-over-year percentage basis. So anything that the brands can do to combat this and get us a little more in line with the airline fees that are paid et cetera as an industry we’re just getting gouged and the cost to deliver that room just keeps going up. We’re not facing labor cost pressures and wage pressures, and certainly not food cost pressures or otherwise utility seemed to be in line I mean frankly that is the pressure, it's the OTA line.

There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

Well we appreciate everybody being on the call today and again we’re looking forward to 2016, we’re looking forward to continuing to put up what we see as some outperformance numbers and hopefully overtime our share price and our multiple as compared to others will reflect the quality of the assets we have. And most importantly, if we’re exceeding on metrics then I think that are multiples to exceed the norm as well. So that’s our goal and we’re going to keep working towards that. Thank you all.