Greetings and welcome to the RLJ Lodging Trust Third Quarter 2013 Earnings Conference 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, Hilda Delgado, Director of Finance for RLJ Lodging Trust. Thank you Ms. Delgado, you may begin.

Thank you, operator, and welcome to RLJ Lodging Trust’s third quarter earnings call. On today’s call, Tom Baltimore, the company’s President and Chief Executive Officer will discuss key operational highlights for the quarter. Leslie Hale, Treasurer and Chief Financial Officer will discuss the company’s financial results. Forward-looking statements made on this call are subject to numerous risks and uncertainties that can cause the company’s actual results to differ materially from what has been communicated. Factors that may impact the results of the company can be found in the company’s 10-Q, and other reports filed with the SEC. The company undertakes no obligation to update forward-looking statements. Also, as we discuss certain non-GAAP measures, it may be helpful to review the reconciliations to GAAP located in our press release last night. I will now turn the call over to Tom.

Thank you, Hilda. Good morning, everyone, and welcome to our third quarter 2013 earnings call. We are pleased to report that our third quarter solid RevPAR performance of 5.4% continues to add to our positive track record. Excluding prior year one-time events, our RevPAR grew by 6.4%. Our consistent performance since going public highlights the quality of our geographically diverse portfolio, of focused service and compact full-service hotels. We are very pleased by our RevPAR expansion in light of the heightened uncertainty in the market and tough year-over-year comparables. In addition to reporting another positive quarter of solid performance, I’m also pleased to report that we made significant strides on our balance sheet. This quarter we completed a comprehensive refinancing that staggered our debt maturities and will yield meaningful interest expense savings. In executing this transaction we completed yet another significant milestone towards our goal of achieving an investment-grade rating. Maintaining a highly flexible and liquid balance sheet is a top priority, especially during these times of market and geopolitical uncertainty. We are closely monitoring the possible impact of both general macro and lodging trends to our outlook. We are currently cautiously optimistic about the long-term macro outlook given several key metrics. Business confidence continued to increase through September, and although there was a modest pullback in consumer confidence in the third quarter, trends remain positive as unemployment continues to improve. Interest rate volatility and the political uncertainty we expect that interest rates are likely to remain near current levels for now as the government’s bond tapering program has been delayed. Looking out a bit further, GDP growth is projected to improve in 2014, and we expect that lodging fundamentals will remain positive. We anticipate that increased personal spending, consumer confidence and continued strength in international travel should allow us…

Thanks, Tom. Before I report on our third quarter financial results, I would like to remind listeners that the pro forma metrics that Tom shared earlier refer to 145 hotels as if we’d owned them for the entire comparable periods. These figures exclude any hotels that were transferred this quarter, our conversion hotels and two non-comparable hotels. Now looking at our results for the third quarter our consolidated hotel EBITDA increased $4.3 million to $86.5 million, representing a 5.2% increase over the same period in 2012. For the quarter, our adjusted EBITDA increased $9.1 million to $80.8 million representing a 12.7% increase over the same period last year. Adjusted FFO increased $14.5 million to $65.1 million, representing a 28.7% increase. For the quarter, adjusted FFO equates to $0.53 on a per share basis. Both adjusted EBITDA and adjusted FFO reflect addbacks to normalize our operating expenses. Adjustments worth noting in the third quarter include $1 million in accelerated deferred financing fees that were associated with our recent refinancing a $4.8 million gain associated with the acquisition of the Residence Inn Atlanta via foreclosure sale, and a $3.3 million gain associated with the transfer of the Courtyard Goshen. For further adjustments, we recommend reviewing the exhibits in last night’s press release for a full reconciliation of both metrics. Now turning to our balance sheet and capital markets activities. During the quarter, we completed a comprehensive $565 million refinancing. We are very pleased with the overall execution of this transaction. This refinancing accomplished a number of goals for us, including further staggering our maturities, reducing our interest expense, and significantly increasing our unencumbered asset pool. And finally, this refinancing was yet another significant step towards achieving our long-term goal of becoming investment grade. The refinancing consisted of multiple parts. First, we completed…

Thank you. (Operator Instructions) Thank you. Our first question is coming from the line of Jordan Sadler with KeyBanc Capital Markets. Please proceed with your question.

Hey, Jordan. How are you? Tom Baltimore, here. Austin Wurschmidt – KeyBanc Capital Markets, Inc.: Hey, good morning. It is Austin Wurschmidt here with Jordan. How are you?

Good. Austin Wurschmidt – KeyBanc Capital Markets, Inc.: So just wanted to touch a little bit on the dispositions. It sounded like you increased the dispositions to 15 from 10 to 12 previously being marketed. I was wondering if you could give us some detail on the characteristics of these average RevPAR or geography, are these suburban hotels, and what chain scale they fit into?

It’s all the above Jordan these are clearly non-core assets, there are 15 of them they are spread probably across 10 markets, I would say, these are lower RevPAR growth in some cases these are assets that are probably a little more capital starved and are assets that clearly don’t fit in our long-term plans. So obviously, the plan is to recycle out of these lower growth markets into higher growth markets, really consistent with what we’ve talked about. Obviously our recent refinancing also gives us more flexibility. As Leslie pointed out we’ve got 111 assets now that are unencumbered. And this first batch is largely unencumbered by management as well, which we think will also give us flexibility with buyers. So you will see this happen more over the next few quarters. We would think it will take a few quarters to sort of recycle this first batch and probably others, but it is a priority and it is something that you’ll see our pace accelerate with that. Austin Wurschmidt – KeyBanc Capital Markets, Inc.: Thanks, thanks for the detail there. And then just looking at the balance sheet, it is really in great shape today. You’ve got, as you mentioned, over $300 million, $340 million of unrestricted cash. What are some of your plans to deploy this cash, and is there a timeframe that you’d like to get the cash deployed?

Well, as we’ve said, one of the key cornerstones of our business model is to make sure that we have a fortress balance sheet, that we have flexibility. We think over the long-term the group with the lowest cost of capital wins and believe passionately, as we’ve stated that we want a net debt to EBITDA under five times. In fact, we’re going to lower that target to probably something south of four times and ultimately get into the low three times range. We think that that will make a strong case for investment grade, again which will give us additional flexibility as we move forward. As we look at the $340 million of cash keep in mind that some of that is earmarked already for the Hilton Cabana deal, approximately $70 million, we’ve also got some existing conversions that are already in the pipeline that are going to use a portion of that. We also have a very active deal pipeline right now. I’d still say that we are a net buyer. We’ve got $150 million in deals, including Miami, under letter of intent or contract. We continue to look aggressively for opportunities, but please keep in mind that we’re going maintain our discipline. We’ve bought 13 hotels, about $600 million, since going public, but if you look at the year before going public, the reality is that we’ve bought about 36 hotels about $1.5 billion over that period of time, which is really on the top end, when you compare us vis-a-vis our peers. So you will continue to see us active, but we will be prudent, we will be thoughtful and we will be disciplined. And It will be assets that are compliant with our investment thesis and returns that make sense for us. Austin Wurschmidt – KeyBanc Capital Markets, Inc.: That is helpful. And then, just one last one, it looked as though – looking across the flags that the Fairfield underperformed materially. I know you mentioned there was sort of a one-time item there that impacted the third quarter, but really it’s underperformed the portfolio year-to-date. Is there anything else going on there and are there any potential opportunities to reflag any of those?

Yeah, you’re probably referring to the Fairfield Inn in D.C. Again, that was an isolated issue where we had some redemptions and a true-up after that conversion and it resulted in about $588,000 if memory serves me correctly. So, it really sort of distorted the picture, I would say to you, though that Fairfield conversion I think is just a great example, not only of our strategy – keep in mind that we bought that in December of 2010 for $40 million, and it was a Red Roof Inn. We spent $7.5 million, in converting that to a Fairfield Inn; converted in March of 2011. That hotel has been a fabulous performer for us, and if you look at what we expect the cap rate to be on that in 2013, we expect that to be well north of 12%. So it has been a huge performer and I think also, if you look at the RLJ portfolio and if you look at our Marriott hotels vis-a-vis the brand averages in total, I think year-to-date through third quarter, we’re up about 207 basis points in RevPAR over the Marriott brand average. So we’ve continued to be a strong performer, I think our results show that. I think year-to-date in RevPAR we are up about 8.2%. And anything happening right there with Fairfield is really isolated and really related to those redemptions. So that has been a great investment for us. We believe passionately in that strategy of upscale focused service and we’ll continue to look opportunistically for conversions as well. Austin Wurschmidt – KeyBanc Capital Markets, Inc.: Great. Thanks for taking my questions

Thank you. Our next question is coming from the line of Jeff Donnelly with Wells Fargo. Please proceed with your question. Jeff J. Donnelly – Wells Fargo Securities LLC: Good morning, guys.

Hi, Jeff. Jeff J. Donnelly – Wells Fargo Securities LLC: Good morning, hi Tom.

Good morning, Jeff. Jeff J. Donnelly – Wells Fargo Securities LLC: I got on a little late so I might have missed your remarks on this, where are you guys at with the process of converting, I guess what I’ll call the Humble Oil Complex product, that you bought earlier in the year?

We are pretty excited. If you think about Houston for a second, Jeff, again it’s been our strongest market we were up 19.1% in the third quarter 16% of that in rate. We’ve got eight hotels in that market, seven of those eight hotels grew RevPAR by double digits in the third quarter and if you look at the Humble, as an example, the Courtyard Downtown, RevPAR was up 34.2% in the third quarter, the Residence Inn was up 23%. So I would tell you confidently that we are ahead of schedule operationally very pleased with the result so far as it relates to the conversion as you know we are converting the apartment building and the plan is to convert the apartment building to a Springhill Suites, we allocated about $18.8 million to that asset it’s about a $17 million renovation 166 keys, so we expect to be all-in on about 215,000 that should deliver in mid 2015, just given the complexity of that conversion but it is on schedule at this point. Jeff J. Donnelly – Wells Fargo Securities LLC: That’s helpful. I guess maybe a bigger question. How are you guys thinking about supply growth in the industry, maybe like I said, on a broader scale and then specifically in your core markets? It does feel like we are seeing maybe a little more, not so much ground-up construction, but conversions from other uses. Is that your sense as you look around or you still feel it is largely in check when you look forward one or two years?

Yeah I would say that supply is largely in check. Obviously, there’s some isolated there’s a couple of markets, I think New York is one that everybody sort of talks about, but if you look at Manhattan for us, as an example. We had a great quarter we were up 6.9% on a relative basis I think we beat the market by almost 200 basis points, our Manhattan hotels ran occupancy of 98.5%. And we had several that were up high single digits. So we have a great portfolio there we continue to see demand growth. I think there’s a lot of international growth there that’s providing a nice tailwind. So we feel very good about New York long-term obviously the supply has got to get absorbed it is affecting the number of compression days and to some extent it is affecting the psychology of operators. Right, do they have the confidence to push rate? And really New York is really all about rate. As you look across other markets, I mean Austin is one everybody talks about but again, we were up 30% in fourth quarter of last year. We were up another 12% this third quarter. And I think we’re going to have another solid fourth quarter as well. Obviously, there is a lot of supply being talked about. We will have to understand what has kind of been what I would call planning to what’s actually under construction, but it is something that we are going to continue to monitor. I do think in those markets where you have got higher barriers to entry, clearly the West Coast is a great example of that you are seeing less supply growth there. You are seeing and hearing more about the debt markets loosening up a little bit, but…

Yeah, I don’t think La Quinta is a good fit for us. And obviously, it’s a brand. We are obviously focused more on the real estate than we are a brand play. I think that could make sense for someone else to sort of bolt it in to another brand company and perhaps then sell off the real estate, but you and I will have that discussion another day. As it relates to opportunities, we continue to believe passionately that the industry should consolidate. We want to be part of that dialogue, either as a buyer or as a seller. We engage in frequent conversations. I don’t think that there is anything that is actionable today. I think that you are beginning to see a little momentum, but I think that is more likely, in my view, to probably accelerate in mid to late 2014, early 2015. There’s some natural combinations and I think we could all kind of look at four or five that kind of make sense, but as you know it really will come down to price, to timing, to working through some of the social issues. But we’d clearly want to be part of that dialogue. We are the second or third largest REIT depending on how you want to define it today enterprise value or EBITDA. I think we’ve done everything, we said we were going to do post-IPO. We are working hard as a team and hopefully continuing to build credibility. And we think scale is important. We have it but we think getting even larger is a good thing And having, candidly, fewer public hotel REITs we think is also a positive thing. And as some of the debt maturities increase in the next few years, some of the CMBS maturities accelerate, we think that there will be more sellers that will start looking at do they want to run through another cycle? Do they want to monetize now? There is some funds also that are getting a little long in the tooth, though. So we will continue to evaluate and monitor carefully. In the interim, you will see us do single assets, small portfolios, but we are willing, ready and able to talk about something of a larger transaction. Jeff J. Donnelly – Wells Fargo Securities LLC: Great. Thanks.

Thank you. Our next question is coming from the line of Wes Golladay with RBC Capital Markets. Please proceed with your question. Wes Golladay – RBC Capital Markets LLC: Hey, good morning everyone.

Hey, Wes. How are you? Wes Golladay – RBC Capital Markets LLC: Hey doing good. Thank you. Looking at your acquisition pipeline, do you have any conversions embedded in that?

Yeah, I would say right now, Wes, obviously Miami is a conversion. Someone else is taking that risk with a takeout and obviously we have been working alongside that seller/developer for some time on it. I’d say the others are existing assets, but we do look opportunistically at conversions. We have had a lot of success with it as you know, in fact, the last four conversions, if you look third quarter, out of the seven they were up 10% so we are still getting a tailwind. We’re still getting lift, not only on the top line, but we are also seeing margin growth as well. So, we think that that’s a way to really distinguish ourselves. We’ve got a core competency there. I don’t think you will see us do more than 20%, 25% of our deals are conversions. Obviously current income is an important part of being a REIT, but we’ll look opportunistically for conversions that make sense and where we can generate outsized returns. Wes Golladay – RBC Capital Markets LLC: Okay. And then looking at your RevPAR growth, it seems that you are getting about 2% pickup on occupancy the last few quarters. When do you see that switching over to a heavily ADR-driven RevPAR growth? And I know it is already now, but like where occupancies are sub 1% you’re just really driving the rate.

I think, obviously, a loaded question and one that I mean, Howard Isaacson and his team on our asset management side are pushing rate every day. We ran high occupancies of high 70%s last quarter, again looking last several quarters we’ve been 65%, 67% rate growth. So I think candidly we have been, I think outperforming many of our peers there, we’ll continue to push, I think the reality is that as you see the economic, the GDP picture pick up. And if we can accelerate and move it from 2% to 2.5% or 3% and you can see the employment picture pick up, I think that will serve as a real tailwind for pushing rate. Wes Golladay – RBC Capital Markets LLC: Okay. Then looking at your Texas markets, I mean, those have been exceptionally strong with double-digit RevPAR growth this year. How do you see those markets playing out next year?

Austin just continues to hum along. When you look at a market and I know some are fearful of it, but as we look at it, it has got a wonderful storyline. You have got a state capital a university town it’s becoming a tech hub. Even last year, fourth quarter of last year we were up 30%. I mean I still think we’ll be probably up high single digits this year. So it continues to be a strong performer, you don’t have the the legislature meets every, other year that historically has accounted for about 180 basis points. So we have that benefit this year we won’t have it next year. So you will see a slight pullback as it relates to that market, Houston is another when you look at job growth in Houston and Austin, most of the recovery about 40% of the jobs have come out of Texas and the two strongest markets obviously have been Houston and Austin. So Houston is one that as I mentioned we were up 19% and seven of the eight hotels were up double digit. I don’t think they’ve had a great convention year, next year will not be as strong I think it’s down about 160,000 room nights right now. But again that pace will change and I think in the year for the year I expect that they’ll continue to grow. So we’re optimistic what we’re seeing on the energy corridor there and we will continue to look for opportunities, again opportunities that make sense and fit our investment criteria. Wes Golladay – RBC Capital Markets LLC: Okay, that’s all for me. Thanks for taking the questions.

It’s been great.

Thank you. Our next question is coming from the line of Steven Kent with Goldman Sachs. Please proceed with your question. Anto M. Savarirajan – Goldman Sachs & Co.: Good morning. This is Anto Savarirajan for Steven Kent.

Hey. Anto M. Savarirajan – Goldman Sachs & Co.: Hey good morning. The acquisition pipeline, ex the Hilton Cabana, of approximately $80 million; can you give broad color on its composition? In dollar terms is that a few major properties or a collection of small to midsized assets?

I would say that, the strike zone would be more in the $25 million to $40 million range obviously Cabana $71 million I believe is the acquisition price so, these would probably be slightly smaller but again assets that are compliant with strategy and markets that – top 30 markets, more of a coastal bias. And, no secret, we continue, like most of our peers, to look for more and more opportunities on the West Coast where we think there are currently higher barriers to entry and there’s going to be a lot more growth here in the near term. Anto M. Savarirajan – Goldman Sachs & Co.: Okay. I understand you’re not sharing expectations for 2014, but given the growth one can see for the Company for different metrics FFO, EBITDA next year, dividend coverage to AFFO – they all look very healthy. How are you and the Board thinking about dividends in the outer quarters?

Well, the first thing we think dividends are obviously an important part of being a REIT and an important component of return of capital for shareholders. So as Leslie said we’re going to pay out at least $0.82. Now again, we’ll look at where we need to be from a REIT distribution standpoint in fourth quarter and we’ll discuss that with our board. If you look since going public we’ve paid out about $1.70 in dividends so far. We’ll continue historically we’ve set it at about 55% of AFFO. I think that’s reasonable. The beauty, and I am not sure that we get enough credit for this. I think the beauty of our business model is that not only are we generating significant cash and that’s cash that’s covering not only renovations and any out of pocket which inevitably happens with renovations and also a strong dividend. But we’re also generating significant free cash flow that allows us to use part of that to not only fuel additional growth in the business. Other acquisitions et cetera and a perfect example of that is keep in mind we’ve been public now almost three years and we’ve only done one follow on and given the kind of growth that we have. So we’re very confident in the business model and the strategy. And I think we are proving that out that we are very prudent capital allocators. Anto M. Savarirajan – Goldman Sachs & Co.: Thank you

(Operator Instructions) our next question is coming from the line of Lukas Hartwich with Green Street Advisors. Please proceed with your question. Anto M. Savarirajan – Goldman Sachs & Co.: Thank you. Hey, guys,

Hi, Lukas. Anto M. Savarirajan – Goldman Sachs & Co.: Tom, can you remind us how much of your business is from leisure demand? And can you talk about that segment of the market versus business travel?

Yeah I’d say Lukas probably 80% 85% of our business is transient the balance being group. I would say the vast majority of the transient is coming on business. We do benefit given the diversity of our portfolio in being in urban environments and given our product type, clearly having a lot of leisure and weekends and sports groups and family outings. And I think that’s a real benefit of the strategy, but the vast majority is still really corporate centric. So, put a number on it, I’d say it’s probably in the 60% to 75% range being more corporate than it is leisure on the transient side. Anto M. Savarirajan – Goldman Sachs & Co.: That’s helpful. And then I am just curious; across the limited service spectrum, do you have a preference for investing in select service or extended stay, or are you kind of indifferent? Just curious on that.

It’s a great question Lukas, it really depends on the market the opportunity, what other brands exist, the market dynamics, where is the demand coming from, we love urban, dense suburban markets, and we use the phrase three legs of a stool. We are looking for strong corporate, a strong convention market and obviously those markets that also have a leisure component a New York or a Chicago come to mind. A New Orleans obviously having a very strong leisure component as well as a nice balancing. And depending on the mix, there’s some opportunities or some markets that are underrepresented with extended stay where it makes sense and there are others that, as we think about family of brands, obviously big believers in Marriott and Hilton and a growing affection for Hyatt and what they are doing. And we think obviously, all three are strategically a strong fits for us. Anto M. Savarirajan – Goldman Sachs & Co.: Great. Thanks very much.

Thank you. Our next question is coming from the line of Anthony Powell with Barclays. Please proceed with your question. Anthony Powell – Barclays Capital, Inc.: Hi, good morning.

Good morning, Anthony. How are you? Anthony Powell – Barclays Capital, Inc.: Fine, how are you? On the transaction market, have you seen more competition for assets in the urban-focused service segment and how do you expect that to play out going forward?

Yeah. I think the secret of urban limited service is out for sure. I remind listeners and investors and analysts all the times that we were a very early adopter. We were buying these assets, 10, 11, 12 years ago and had believed in them then. And believe even more today, I also think you’ve seen sort of a secular shift with the consumer, I think they’re very comfortable with the price value, with the efficiency of the box, the fact you are getting Wi-Fi free. You have got a nice morning day-part. So clearly it’s a very compelling business model. Yeah, there is more competition, I think that we’ve had great success over the years in finding many of our deals off market or limited bid, and so we are confident that we’ll get more than our fair share. In terms of pricing, in some gateway cities in some well-marketed assets clearly it can get a bit frothy. We tend to not participate in those types of auctions. But we’re very confident that we will get more than our fair share of the appropriate deals. Anthony Powell – Barclays Capital, Inc.: I agree. And to the follow-up on the West Coast that has been very strong across the industry, a lot of it due to limited supply. Do you see any changes in regulation helping supply growth increase on the West Coast? And if so, what is the timeline for that? Thank you.

Having been in this business a long time, I mean the death knell is always too much supply. I just think given the density on the West Coast and the regulatory environment and the length of time it takes to get things done. I think there are just natural positions there that if you have got well-located assets and almost a fortress position that you are going to be reasonably well insulated. Things will get done, but I think in the incremental time that it will take it won’t be measured in weeks or months, but in years and in some cases maybe even decades. So we like the metrics, we like the investment profile of the West Coast, but the reality is so do most of our peers and a lot other capital sources as well. So, we’ll look opportunistic, we will not deviate from our underwriting criteria. And we’ve demonstrated that we have been able to find them. The deal that we have in San Francisco, the conversion’s an example of that. The deal we just did in Portland is another example very optimistic on both of them and again they speak to our core competency of being able to find both limited bid, one-off market, and then again a conversion opportunity where you can take something up brand and bull’s-eye real estate. So we are really excited about our Vantaggio Suites conversion to a Courtyard on Post Street in downtown San Francisco.

Thank you. It appears we have no further questions at this time. I’d now like to turn the floor back over to management for any concluding comments.

Well. Thank all of you. We appreciate the opportunity to discuss our third quarter results and we look forward to talking with you again in February and also giving more guidance at that time in 2014. I wish everybody a happy holiday season; and talk with you soon. Talk to you soon. Bye-bye.

Thank you. Ladies and gentlemen. This does conclude today’s teleconference. You may disconnect your lines at this time. And thank you for your participation.