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DiamondRock Hospitality Company Reports Second Quarter Revpar Up 6.5 Percent and Year-To-Date RevPAR Up 7.6 Percent

BETHESDA, Md., July 25, 2012 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) today announced results of operations for its second fiscal quarter ended June 15, 2012. The Company is a lodging-focused real estate investment trust that currently owns a portfolio of twenty-seven premium hotels in North America.

Recent Developments

    --  Portfolio Acquisition: On July 12, 2012, the Company acquired a
        portfolio of four hotels fromaffiliates of Blackstone Real Estate
        Partners VI ("Blackstone") for a contractual purchase price of $495
        million.  The portfolio consists of the Hilton Boston Downtown, the
        Westin Washington D.C. City Center, the Hilton Burlington, and the
        Westin San Diego (collectively, the "Portfolio").
    --  Follow-on Public Offering: The Company completed a follow-on public
        offering of its common stock on July 11, 2012.  The Company sold
        20,000,000 shares of its common stock for net proceeds, after offering
        costs, of approximately $200 million.
    --  Blackstone Strategic Investment: Blackstone purchased approximately 7.2
        million shares of DiamondRock common stock directly from the Company in
        connection with the acquisition of the Portfolio.

Second Quarter 2012 Highlights

    --  RevPAR Growth: The Company's RevPAR increased to $139.98, representing
        6.5% growth from the comparable period in 2011.
    --  Hotel Adjusted EBITDA Margin: The Company's Hotel Adjusted EBITDA margin
        improved to 28.20%, an increase of 90 basis points from the comparable
        period in 2011.
    --  Adjusted EBITDA: The Company's Adjusted EBITDA was $48.1 million, an
        increase of 17% from the comparable period of 2011.
    --  Adjusted FFO: The Company's Adjusted FFO was $34.2 million and Adjusted
        FFO per diluted share was $0.20.
    --  Dividends: The Company declared and paid a quarterly dividend of $0.08
        per share during the second quarter.

Mark W. Brugger, Chief Executive Officer of DiamondRock Hospitality Company, stated, "The lodging recovery continues to show strength and our portfolio is performing exceptionally well with year-to-date RevPAR growth of 7.6%. We see positive demand trends for the balance of 2012 with group pace up 7.8%. Moreover, our platform continues to execute with the completion of over $750 million in transactions year-to-date, including the off-market acquisition of the four-hotel portfolio from Blackstone. This acquisition achieves our strategic objectives of improving portfolio quality and expanding brand and geographic diversification. After this transaction, we continue to maintain a best-in-class balance sheet with capacity to take advantage of acquisition opportunities."

Operating Results

Please see "Certain Definitions" and "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDA," "Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO."

The discussions of "Pro Forma RevPAR" and "Pro Forma Hotel Adjusted EBITDA Margin" assume the Company owned all of its hotels since January 1, 2011 but exclude (i) the operating results of the Frenchman's Reef & Morning Star Marriott Beach Resort ("Frenchman's Reef") due to the impact of the extensive renovation of the hotel in 2011, (ii) the operating results of the three-hotel portfolio sold earlier in 2012, and (iii) the operating results of the Portfolio acquired on July 12, 2012.

For the second quarter beginning March 24, 2012 and ending June 15, 2012, the Company reported the following:

    --  RevPAR growth of 6.5% and Hotel Adjusted EBITDA margin expansion of 90
        basis points compared to the comparable period in 2011.
    --  Adjusted EBITDA of $48.1 million compared to $41.1 million for the
        comparable period in 2011.
    --  Adjusted FFO of $34.2 million and Adjusted FFO per diluted share of
        $0.20 based on 168.3 million diluted weighted average shares compared to
        $25.6 million and $0.15, respectively, for the comparable period in
        2011.
    --  Net income of $8.9 million (or $0.05 per diluted share) compared to a
        net loss of $0.6 million (or $0.00 per diluted share) for the comparable
        period in 2011.

The Company's second quarter RevPAR growth of 6.5% (from $131.45 to $139.98) was driven by a 4.6% increase in the average daily rate (from $170.00 to $177.90) and a 1.4 percentage point increase in occupancy (from 77.3% to 78.7%). The second quarter Hotel Adjusted EBITDA margin increased 90 basis points (from 27.30% to 28.20%) from the comparable period in 2011.

The second quarter Pro Forma RevPAR increased 5.8% (from $128.65 to $136.07), which was driven by a 3.7% increase in the average daily rate (from $167.05 to $173.31) and a 1.5 percentage point increase in occupancy (from 77.0% to 78.5%). The second quarter Pro Forma Hotel Adjusted EBITDA margin increased 8 basis points (from 28.31% to 28.39%) from the comparable period in 2011.

For the period from January 1, 2012 to June 15, 2012, the Company reported the following:

    --  RevPAR growth of 7.6% and Hotel Adjusted EBITDA margin expansion of 115
        basis points compared to the comparable period in 2011.
    --  Adjusted EBITDA of $71.4 million compared to $59.9 million for the
        comparable period in 2011.
    --  Adjusted FFO of $49.3 million and Adjusted FFO per diluted share of
        $0.29 based on 168.3 million diluted weighted average shares compared to
        $37.4 million and $0.23, respectively, for the comparable period in
        2011.
    --  Net income of $11.6 million (or $0.07 per diluted share) compared to a
        net loss of $11.6 million (or $0.07 per diluted share) for the
        comparable period in 2011.

The Company's year-to-date RevPAR growth of 7.6% (from $117.21 to $126.10) was driven by a 3.7% increase in the average daily rate (from $161.15 to $167.06) and a 2.8 percentage point increase in occupancy (from 72.7% to 75.5%). Year-to-date Hotel Adjusted EBITDA margin increased 115 basis points (from 23.20% to 24.35%) from the comparable period in 2011.

The year-to-date Pro Forma RevPAR increased 7.0% (from $113.66 to $121.58), which was driven by a 3.0% increase in the average daily rate (from $157.05 to $161.78) and a 2.8 percentage point increase in occupancy (from 72.4 percent to 75.2 percent). Year-to-date Pro Forma Hotel Adjusted EBITDA margin increased 49 basis points (from 23.45% to 23.94%) from the comparable period in 2011.

Blackstone Portfolio Acquisition

On July 12, 2012, the Company completed the acquisition of the Portfolio for a contractual purchase price of $495 million. This high-quality Portfolio consists of the 362-room Hilton Boston, the 406-room Westin Washington D.C., the 258-room Hilton Burlington and the 436-room Westin San Diego. The Portfolio, which is primarily concentrated in high growth urban markets, is expected to enhance the overall quality of the Company's portfolio. The Portfolio's forecasted 2012 RevPAR is approximately $11 above the RevPAR of the Company's prior 23-hotel portfolio and is expected to generate a Hotel Adjusted EBITDA margin premium of 900 basis points. The Company funded the acquisition with a combination of borrowings under its senior unsecured credit facility, cash on hand, net proceeds from a public equity offering and the issuance of shares of the Company's common stock to Blackstone in a private placement.

Follow-on Equity Offering

The Company completed a follow-on public offering of its common stock during July 2012. The Company sold 20,000,000 shares of its common stock for net proceeds, after deduction of offering costs, of approximately $200.1 million.

Blackstone Share Issuance

The Company funded $75 million of the Portfolio acquisition through the issuance of 7,211,538 unregistered shares of its common stock to affiliates of Blackstone. Blackstone and the Company entered into a Registration Rights Agreement, which, among other things, requires the Company to use its best efforts to register these shares and subjects these shares to a 150-day lock-up period.

Dividends

The Company's Board of Directors declared a quarterly dividend of $0.08 per share to stockholders of record as of May 15, 2012. The dividend was paid on May 29, 2012.

Lexington Hotel Update

The Company has completed its evaluation of branding alternatives and concluded that the best long-term strategy was the conversion of the hotel to Marriott International's Autograph Collection. During 2012, we signed a franchise agreement with Marriott to convert the hotel upon satisfactory completion of a $32 million capital improvement plan. The renovation will be comprehensive and touch every aspect of the hotel that the guest experiences. The expected timing of the conversion is as follows:

    --  Radisson will be terminated as of September 15, 2012.
    --  The hotel will operate as an independent hotel until completion of the
        capital improvement plan.
    --  The Company expects to complete the capital improvement plan during
        early 2013.
    --  The hotel will be re-launched as an Autograph Collection hotel in
        mid-2013.

Highgate Hotels will continue to manage the hotel under the existing hotel management agreement.

Allerton Update

The Allerton Hotel bankruptcy proceedings are ongoing. The Company presented its objection to the Debtor's Plan of Reorganization during a hearing that started on July 23, 2012. The Company expects the bankruptcy to be resolved at the end of 2012.

Capital Expenditures

In 2012, the Company expects to spend approximately $50 million on capital improvements at its hotels, $20 million of which is expected to be funded from corporate cash. The Company spent approximately $15.2 million for capital improvements as of June 15, 2012. The most significant projects for 2012 include the following:

    --  Conrad Chicago:  The Company expects to spend $3.5 million to add 4,100
        square feet of new meeting space, reposition the food and beverage
        outlets and re-concept the hotel lobby.  The addition of the new meeting
        space is scheduled to be completed by the end of the summer of 2012 and
        the lobby repositioning in the first quarter of 2013.
    --  Renaissance Worthington:  The Company expects to spend $1.2 million over
        the next two years to undertake a comprehensive restoration of the
        concrete façade of the hotel.
    --  Marriott Atlanta Alpharetta:  The Company expects to spend $2.4 million
        to renovate the guest rooms at the hotel during the third quarter of
        2012.
    --  Frenchman's Reef:  The Company expects to spend $1.6 million to renovate
        certain guest rooms and replace the boat dock.  The Company expects
        these projects to be completed by early 2013.

In connection with executing the rebranding strategy at the Lexington Hotel, the Company is currently planning a comprehensive renovation of the hotel, including the lobby, corridors, guest rooms and guest bathrooms. The cost of the renovation is expected to be approximately $32 million and completed during the first half of 2013.

The Company continues to evaluate an extensive renovation project at the Chicago Marriott Downtown that, if approved, is expected to be completed in subsequent years.

In connection with the acquisition of the Portfolio, the Company expects to spend approximately $56 million for capital improvements at the Portfolio over the next 60 months, including approximately $30 million to $35 million in the first two years of ownership.

Balance Sheet

The Company continues to maintain its straightforward capital structure. The Company has no preferred equity outstanding and continues to own 100% of its properties. During July 2012, the Company's Board of Directors approved an amendment of the Company's charter to increase the number of authorized shares of common stock from 200 million to 400 million.

After completing the acquisition of the Portfolio, DiamondRock continues to maintain one of the most durable and lowest levered balance sheets among its lodging REIT peers. The Company maintains balance sheet flexibility with no near term debt maturities, capacity on its senior unsecured credit facility and 16 of its 27 hotels unencumbered by mortgage debt. DiamondRock remains committed to its core strategy of maintaining a simple capital structure with conservative leverage.

Outlook and Guidance

The Company is providing guidance, but does not undertake to update it for any developments in its business. Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the Securities and Exchange Commission. The Company's 2012 RevPAR guidance assumes all of the Company's 27 hotels were owned since January 1, 2011.

The Adjusted EBITDA and Adjusted FFO guidance includes $5.2 million of Adjusted EBITDA and $2.9 million of Adjusted FFO from the three hotels sold and excludes cash interest payments and legal fees related to the Allerton Hotel.

The Company is revising its full year 2012 guidance to incorporate the post-acquisition results of the Portfolio, the increased share count from recent equity activity and the most recent outlook for its hotels' performance for the remainder of the year.

The Company expects its portfolio of 27 hotels to deliver full-year RevPAR growth of approximately 5.5 to 7.5 percent with modest growth in the third fiscal quarter followed by strong fourth quarter growth. The Company expects its third fiscal quarter to be impacted by the following:

    --  Worthington Renaissance:  The facade project at the Worthington
        Renaissance is expected to create $2.0 million of Hotel Adjusted EBITDA
        disruption, mostly in the third quarter. This disruption is expected to
        negatively impact the Company's third quarter 2012 RevPAR growth by
        approximately 60 basis points.
    --  Chicago Convention Calendar:  The Chicago citywide group meeting
        activity in 2012 is weighted towards the second and fourth fiscal
        quarters.  Group booking pace at the Chicago Marriott is down
        approximately 6% for the third fiscal quarter as a result of the
        citywide timing.  The Company's Chicago hotels will negatively impact
        its third quarter RevPAR growth by approximately 70 basis points.
    --  Minneapolis Convention Calendar: The Hilton Minneapolis RevPAR growth is
        facing difficult comparisons in 2012 due to a difficult convention
        calendar, which will continue in the third fiscal quarter.  Group
        booking pace at the Hilton Minneapolis is down approximately 7% for the
        third fiscal quarter as a result of the citywide timing.  The Hilton
        Minneapolis will negatively impact the Company's third quarter RevPAR
        growth by approximately 50 basis points.

The Company expects strong RevPAR growth during the fourth fiscal quarter as a result of the following:

    --  Chicago Convention Calendar:  The fourth quarter will benefit from the
        favorable timing of citywide meetings in Chicago.  The fourth fiscal
        quarter group booking pace for the Chicago Conrad and Chicago Marriott
        is up 46% and 14%, respectively.
    --  Boston Westin Booking Pace:  The fourth quarter will benefit from the
        strong convention activity at the Boston Convention and Exhibition
        Center, as evidenced by fourth quarter group booking pace being up
        almost 11%.
    --  LAX Marriott:  The Company expects the LAX Marriott to outperform during
        the fourth quarter.  The fourth quarter group booking pace at this hotel
        is up over 50%.
    --  New York City:  The Company expects strong fourth quarter performance
        from its well-located hotels in New York City.

Based on its outlook, the Company now expects the following full year 2012 results:

    --  RevPAR growth of 5.5 percent to 7.5 percent;
    --  Adjusted EBITDA of $193 million to $201 million;
    --  Adjusted FFO of $138 million to $145 million, which assumes income taxes
        to range from a benefit of $1.0 million to an expense of $1.0 million;
        and
    --  Adjusted FFO per share of $0.76 to $0.80 based on 181.3 million diluted
        weighted average shares.

In addition, the Company expects the following results for the third fiscal quarter:

    --  RevPAR growth of 3 percent to 4 percent;
    --  Adjusted EBITDA of $44.5 million to $48.5 million;
    --  Adjusted FFO of $33 million to $36 million, which assumes income tax
        benefit to range from $1.2 million to $0.1 million; and
    --  Adjusted FFO per share of $0.18 to $0.19 based on 187.5 million diluted
        weighted average shares.

Earnings Call

The Company will host a conference call to discuss its second quarter results on Wednesday, July 25, 2012, at 10:00 a.m. Eastern Time (ET). To participate in the live call, investors are invited to dial 888-680-0879 (for domestic callers) or 617-213-4856 (for international callers). The participant passcode is 58735834. A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company's website at www.drhc.com. A replay of the webcast will also be archived on the website for one year.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of premium hotel properties. The Company owns 27 premium hotels with approximately 11,900 rooms and holds one senior mortgage loan. The Company's hotels are generally operated under globally recognized brands such as Hilton, Marriott, and Westin. For further information, please visit DiamondRock Hospitality Company's website at www.drhc.com.

This press release 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 "believe," "expect," "intend," "project," "forecast," "plan" and other similar terms and phrases, including 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 which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at the Company's hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the Company's indebtedness; relationships with property managers; the 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; risks associated with the bankruptcy proceedings on the Allerton Hotel; risks associated with the development of a hotel by a third-party developer; risks associated with the rebranding of the Lexington Hotel New York; and other risk factors contained 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 information in this release is as of the date of this release, 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.

Reporting Periods for Statement of Operations

The results reported in the Company's consolidated statements of operations are based on results of its hotels reported by hotel managers. The Company's hotel managers use different reporting periods. Marriott International, the manager of most of the Company's properties, uses a fiscal year ending on the Friday closest to December 31 and reports 12 weeks of operations for the first three quarters and 16 or 17 weeks for the fourth quarter of the year for its domestic managed hotels. In contrast, Marriott International for its non-domestic hotels (including Frenchman's Reef), Davidson Hotel Company, manager of the Westin Atlanta North, Vail Resorts, manager of the Vail Marriott, Hilton Hotels Corporation, manager of the Conrad Chicago and the Hilton Minneapolis, Westin Hotel Management, L.P., manager of the Westin Boston Waterfront, Alliance Hospitality Management, manager of the Hilton Garden Inn Chelsea, Sage Hospitality, manager of the JW Marriott Denver Cherry Creek and the Courtyard Denver, Highgate Hotels, manager of the Lexington Hotel, Interstate Hotels and Resorts, manager of the Westin Washington D.C., the Westin San Diego and the Hilton Burlington, and WHM, LLC, manager of the Hilton Boston report results on a monthly basis. Additionally, the Company, as a REIT, is required by U.S. federal tax laws to report results on a calendar year basis. As a result, the Company has adopted the reporting periods used by Marriott International for its domestic hotels, except that the fiscal year always ends on December 31 to comply with REIT rules. The first three fiscal quarters end on the same day as Marriott International's fiscal quarters but the fourth quarter ends on December 31 and full year results, as reported in the statement of operations, always include the same number of days as the calendar year.

Two consequences of the reporting cycle the Company has adopted are: (1) quarterly start dates will usually differ between years, except for the first quarter which always commences on January 1, and (2) the first and fourth quarters of operations and year-to-date operations may not include the same number of days as reflected in prior years.

While the reporting calendar the Company adopted is more closely aligned with the reporting calendar used by the manager of most of its properties, one final consequence of the calendar is the Company is unable to report any results for Frenchman's Reef, Westin Atlanta North, Vail Marriott, Conrad Chicago, Westin Boston Waterfront, Hilton Minneapolis, Hilton Garden Inn Chelsea, JW Marriott Denver Cherry Creek, Courtyard Denver, Lexington Hotel, Westin Washington D.C., the Westin San Diego and the Hilton Burlington or the Hilton Boston for the month of operations that ends after its fiscal quarter-end because none of Vail Resorts, Davidson Hotel Company, Hilton Hotels Corporation, Westin Hotel Management, L.P., Alliance Hospitality Management, Sage Hospitality, Highgate Hotels, Interstate Hotels and Resorts, WHM, LLC and Marriott International (for international hotels) make mid-month results available. As a result, the quarterly results of operations include results from these hotels as follows: first quarter (January and February), second quarter (March to May), third quarter (June to August) and fourth quarter (September to December). While this does not affect full-year results, it does affect the reporting of quarterly results.

Marriott International announced preliminary plans to change their current fiscal year to a calendar year effective January 1, 2013. Marriott International expects to make the fiscal year change on a prospective basis and will not adjust the prior year operating results. The change to Marriott's fiscal year will not impact the Company's full year results, which are currently reported on a calendar year. However, the preliminary change will impact the prior year comparability of each of the Company's 2013 fiscal quarters.

DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED BALANCE SHEETS
As of June 15, 2012 and December 31, 2011
(in thousands, except share and per share amounts)

                   June 15, 2012             December 31, 2011
                   -------------             -----------------
                    (Unaudited)
    ASSETS
    Property and
     equipment, at
     cost                         $2,681,505                   $2,667,682
    Less:
     accumulated
     depreciation       (474,302)                    (433,178)
                        --------                      --------
                       2,207,203                     2,234,504
    Assets held
     for sale                  -                       263,399
    Deferred
     financing
     costs, net            8,975                         5,869
    Restricted
     cash                 61,026                        53,871
    Due from hotel
     managers             67,433                        50,728
    Note
     receivable           54,485                        54,788
    Favorable
     lease assets,
     net                  42,355                        43,285
    Prepaid and
     other assets         69,875                        65,900
    Cash and cash
     equivalents         104,824                        26,291
                         -------                        ------
    Total assets                  $2,616,176                   $2,798,635
                                  ==========                   ==========
    LIABILITIES
     AND
     STOCKHOLDERS'
     EQUITY
    Liabilities:
    Mortgage debt                   $900,624                     $762,933
    Mortgage debt
     of assets
     held for sale             -                       180,000
    Senior
     unsecured
     credit
     facility                  -                       100,000
                             ---                       -------
    Total debt           900,624                     1,042,933

    Deferred
     income
     related to
     key money,
     net                  24,408                        24,593
    Unfavorable
     contract
     liabilities,
     net                  81,050                        81,914
    Due to hotel
     managers             44,049                        41,676
    Liabilities of
     assets held
     for sale                  -                         3,805
    Dividends
     declared and
     unpaid                  155                        13,594
    Accounts
     payable and
     accrued
     expenses             79,791                        87,963
                          ------                        ------
    Total other
     liabilities         229,453                       253,545
                         -------                       -------
    Stockholders'
     Equity:
    Preferred
     stock, $0.01
     par value;
     10,000,000
     shares
     authorized;
     no shares
     issued and
     outstanding               -                             -
    Common stock,
     $0.01 par      outstanding
     value;         at June 15,
     200,000,000    2012 and
     shares         December 31,
     authorized;    2011,
     167,930,396    respectively
     and
     167,502,359
     shares issued
     and                   1,679                         1,675
    Additional
     paid-in
     capital           1,707,879                     1,708,427
    Accumulated
     deficit            (223,459)                    (207,945)
                        --------                      --------
    Total
     stockholders'
     equity            1,486,099                     1,502,157
                       ---------                     ---------
    Total
     liabilities
     and
     stockholders'
     equity                       $2,616,176                   $2,798,635
                                  ==========                   ==========

DIAMONDROCK HOSPITALITY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Fiscal Quarters Ended June 15, 2012 and June 17, 2011 and
the Periods from January 1, 2012 to June 15, 2012 and January 1, 2011 to June 17, 2011
(in thousands, except share and per share amounts)

                                                                                Fiscal Quarter Ended                                       Period From
                                                                                --------------------                                       -----------
                                                                                                                 January 1, 2012             January 1, 2011
                                                                                                                 to June 15, 2012            to June 17, 2011
                                                                                                                 ----------------           ----------------
                                                                    June 15, 2012          June 17, 2011
                                                                    -------------          -------------
                                                                     (Unaudited)             (Unaudited)            (Unaudited)                (Unaudited)
    Revenues:
    Rooms                                                                          $126,973                                       $101,213                     $210,361  $170,496
    Food and beverage                                                      47,907                         41,834                                       79,158    71,012
    Other                                                                  10,667                          7,121                                       17,450    12,412
                                                                           ------                          -----                                       ------    ------
    Total revenues                                                        185,547                        150,168                                      306,969   253,920
                                                                          -------                        -------                                      -------   -------
    Operating Expenses:
    Rooms                                                                  33,422                         25,894                                       58,301    46,096
    Food and beverage                                                      33,233                         28,797                                       57,077    51,385
    Management fees                                                         6,616                          6,357                                        9,758     9,105
    Other hotel expenses                                                   61,089                         51,655                                      110,093    93,054
    Depreciation and amortization                                          20,571                         18,887                                       41,089    37,436
    Impairment of favorable lease asset                                       468                              -                                          468         -
    Hotel acquisition costs                                                 1,999                          1,904                                        2,031     2,159
    Corporate expenses                                                      5,001                          4,373                                        9,484     8,447
                                                                            -----                          -----                                        -----     -----
    Total operating expenses                                              162,399                        137,867                                      288,301   247,682
                                                                          -------                        -------                                      -------   -------
    Operating profit                                                       23,148                         12,301                                       18,668     6,238
                                                                           ------                         ------                                       ------     -----
    Other Expenses (Income):
    Interest income                                                          (154)                          (263)                                        (217)     (555)
    Interest expense                                                       12,510                         10,015                                       23,978    18,833
    Gain on early extinguishment of debt                                        -                              -                                         (144)        -
                                                                              ---                            ---                                         ----       ---
    Total other expenses                                                   12,356                          9,752                                       23,617    18,278
                                                                           ------                          -----                                       ------    ------
    Income (loss) from continuing operations before income taxes           10,792                          2,549                                       (4,949)  (12,040)
    Income tax (expense) benefit                                           (1,848)                        (3,278)                                       3,926       449
                                                                           ------                         ------                                        -----       ---
    Income (loss) from continuing operations                                8,944                           (729)                                      (1,023)  (11,591)
    Income (loss) from discontinued operations, net of income taxes             -                            173                                       12,582        (8)
                                                                              ---                            ---                                       ------       ---
    Net income (loss)                                                                $8,944                                          $(556)                     $11,559  $(11,599)
                                                                                     ======                                          =====                      =======  ========
    Earnings (loss) per share:
    Continuing operations                                                             $0.05                                         $(0.00)                      $(0.01)   $(0.07)
    Discontinued operations                                                     -                           0.00                                         0.08     (0.00)
                                                                              ---                           ----                                         ----     -----
    Basic and diluted earnings (loss) per share                                       $0.05                                         $(0.00)                       $0.07    $(0.07)
                                                                                      =====                                         ======                        =====    ======

Non-GAAP Financial Measures

We use the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. EBITDA, Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company.

EBITDA and FFO

EBITDA represents net (loss) income excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. We believe EBITDA is useful to an investor in evaluating our operating performance because it 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. In addition, covenants included in our indebtedness use EBITDA as a measure of financial compliance. We also use EBITDA as one measure in determining the value of hotel acquisitions and dispositions.

The Company computes FFO in accordance with standards established by NAREIT, which defines FFO as net (loss) income determined in accordance with GAAP, excluding gains or losses from sales of properties and impairment losses, plus depreciation and amortization. The Company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it is a measure of the Company's operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets. The Company also uses FFO as one measure in assessing its results.

Adjustments to EBITDA and FFO

We adjust FFO and EBITDA when evaluating our performance because we believe that the exclusion of certain additional recurring and non-recurring items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted EBITDA and Adjusted FFO, when combined with GAAP net income, EBITDA and FFO, is beneficial to an investor's complete understanding of our operating performance. We adjust EBITDA and FFO for the following items:

    --  Non-Cash Ground Rent: We exclude the non-cash expense incurred from
        straight lining the rent from our ground lease obligations and the
        non-cash amortization of our favorable lease assets.
    --  Non-Cash Amortization of Unfavorable Contract Liabilities: We exclude
        the non-cash amortization of the unfavorable contract liabilities
        recorded in conjunction with our acquisitions of the Bethesda Marriott
        Suites, the Chicago Marriott Downtown, the Renaissance Charleston and
        the Lexington Hotel New York.  The amortization of the unfavorable
        contract liabilities does not reflect the underlying operating
        performance of our hotels.
    --  Cumulative Effect of a Change in Accounting Principle: Infrequently, the
        Financial Accounting Standards Board (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 the effect of these one-time adjustments because they do not
        reflect its actual performance for that period.
    --  Gains from Early Extinguishment of Debt: We exclude the effect of gains
        recorded on the early extinguishment of debt because we believe they do
        not accurately reflect the underlying performance of the Company.
    --  Acquisition Costs:  We exclude acquisition transaction costs expensed
        during the period because we believe they do not reflect the underlying
        performance of the Company.
    --  Allerton Loan:  In 2011, we included cash payments received on the
        senior loan secured by the Allerton Hotel in Adjusted EBITDA and
        Adjusted FFO. GAAP requires us to record the cash received from the
        borrower as a reduction of our basis in the mortgage loan due to the
        uncertainty over the timing and amount of cash payments on the loan. 
        Beginning in 2012, due to the uncertainty of the timing of the
        bankruptcy resolution, we exclude both cash interest payments received
        from the borrower and the legal costs incurred as a result of the
        bankruptcy proceedings from our calculation of Adjusted EBITDA and
        Adjusted FFO.  We have not adjusted our 2011 Adjusted EBITDA and
        Adjusted FFO calculations to reflect this change in presentation.
    --  Other Non-Cash and /or Unusual Items:  We exclude the effect of certain
        non-cash and/or unusual items because we believe they do not reflect the
        underlying performance of the Company.  In 2012, we excluded the
        franchise termination fee paid to Radisson because we believe that
        including it would not be consistent with reflecting the ongoing
        performance of the hotel. In 2011, we excluded the accrual for net key
        money repayment to Hilton in conjunction with entering into a
        termination agreement for the Conrad Chicago because we believe that
        including it was not consistent with reflecting the ongoing performance
        of the hotel.

In addition, to derive Adjusted EBITDA we exclude gains or losses on dispositions and impairment losses because we believe that including them in EBITDA is not consistent with reflecting the ongoing performance of our hotels. Additionally, the gain or loss on dispositions and impairment losses represent either accelerated depreciation or excess depreciation in previous periods, and depreciation is excluded from EBITDA.

In addition, to derive Adjusted FFO we exclude any fair value adjustments to debt instruments. Specifically, we exclude the impact of the non-cash amortization of the debt premium recorded in conjunction with the acquisition of the JW Marriott Denver at Cherry Creek and fair market value adjustments to the Company's interest rate cap agreement.

The following tables are reconciliations of our U.S. GAAP net income (loss) to EBITDA and Adjusted EBITDA (in thousands):

                                                                Fiscal Quarter Ended                                  Period from
                                                                --------------------                                  -----------
                                                         June 15, 2012          June 17, 2011          January 1, 2012          January 1, 2011
                                                                                                         to June 15,            to June 17, 2011
                                                                                                             2012
                                                         -------------          -------------         ----------------          ----------------

    Net income (loss)                                                    $8,944                                          $(556)                   $11,559  $(11,599)
    Interest expense(1)                                         12,510                        12,340                                      26,274   23,483
    Income tax expense (benefit)(2)                              1,848                         3,088                                      (3,740)  (1,003)
    Real estate related depreciation and amortization(3)        20,571                        21,682                                      41,089   43,034
                                                                ------                        ------                                      ------   ------
    EBITDA                                                      43,873                        36,554                                      75,182   53,915
    Non-cash ground rent                                         1,575                         1,655                                       3,107    3,221
    Non-cash amortization of unfavorable contract                 (432)                         (426)                                       (864)    (852)
        liabilities
    Gain on sale of hotel properties, net of tax                     -                             -                                     (10,017)       -
    Gain on early extinguishment of debt                             -                             -                                        (144)       -
    Acquisition costs                                            1,999                         1,904                                       2,031    2,159
    Allerton loan interest payments                                  -                           505                                           -      605
    Allerton loan legal fees                                       590                             -                                         912        -
    Franchise termination fee                                        -                             -                                         750        -
    Accrual for net key money repayment                              -                           864                                           -      864
    Impairment of favorable lease asset                            468                             -                                         468        -
    Adjusted EBITDA                                                     $48,073                                        $41,056                    $71,425   $59,912
                                                                        =======                                        =======                    =======   =======

    (1)  Amounts include interest
     expense included in
     discontinued operations as
     follows: $2.3 million in the
     fiscal quarter ended June 17,
     2011; $2.3 million in the
     period from Janaury 1, 2012 to
     June 15, 2012; and $4.7 million
     in the period from January 1,
     2011 to June 17, 2011.
    (2)  Amounts include income tax
     provision included in
     discontinued operations as
     follows: $0.2 million of income
     tax expense in the fiscal
     quarter ended June 17, 2011;
     $0.2 million of income tax
     benefit in the period from
     January 1, 2012 to June 15,
     2012; and $0.6 million of
     income tax expense in the
     period from Janaury 1, 2011 to
     June 17, 2011.
    (3)  Amounts include
     depreciation expense included
     in discontinued operations as
     follows: $2.8 million in the
     fiscal quarter ended June 17,
     2011 and $5.6 million in the
     period from January 1, 2011 to
     June 17, 2011.

                                                                     Guidance
                                                                     --------
                                                          Quarter 3, 2012              Full Year 2012
                                                          ---------------              --------------
                                                      Low End     High End   Low End        High End
                                                      -------     --------   -------        --------
    Net income                                                      $50               $3,550             $31,893  $39,893
    Interest expense                                    12,600             12,500               56,200    55,200
    Income tax expense (benefit)                        (1,200)              (100)              (1,000)    1,000
    Real estate related depreciation and amortization   23,500             23,000               98,000    97,000
                                                        ------             ------               ------    ------
    EBITDA                                              34,950             38,950              185,093   193,093
    Non-cash ground rent                                 1,500              1,500                6,500     6,500
    Non-cash amortization of unfavorable contract         (450)              (450)              (1,850)   (1,850)
        liabilities
    Gain on sale of hotel properties, net of tax             -                  -              (10,017)  (10,017)
    Gain on early extinguishment of debt                     -                  -                 (144)     (144)
    Acquisition costs                                    8,000              8,000               10,000    10,000
    Allerton loan legal fees                               500                500                2,200     2,200
    Franchise termination fee                                -                  -                  750       750
    Impairment of favorable lease asset                      -                  -                  468       468
    Adjusted EBITDA                                             $44,500              $48,500            $193,000 $201,000
                                                                =======              =======            ======== ========

The following tables are reconciliations of our U.S. GAAP net income (loss) to FFO and Adjusted FFO (in thousands):

                                                                Fiscal Quarter Ended                                  Period from
                                                                --------------------                                  -----------
                                                                                                       January 1, 2012          January 1, 2011
                                                                                                         to June 15,            to June 17, 2011
                                                                                                             2012
                                                                                                      ----------------          ----------------

                                                         June 15, 2012          June 17, 2011
                                                         -------------          -------------
    Net income (loss)                                                    $8,944                                          $(556)                   $11,559  $(11,599)
    Real estate related depreciation and amortization(1)        20,571                        21,682                                      41,089   43,034
    Impairment of favorable lease asset                            468                             -                                         468        -
    Gain on sale of hotel properties, net of tax                     -                             -                                     (10,017)       -
                                                                   ---                           ---                                     -------      ---
    FFO                                                         29,983                        21,126                                      43,099   31,435
    Non-cash ground rent                                         1,575                         1,655                                       3,107    3,221
    Non-cash amortization of unfavorable contract                 (432)                         (426)                                       (864)    (852)
        liabilities
    Gain on early extinguishment of debt                             -                             -                                        (144)       -
    Acquisition costs                                            1,999                         1,904                                       2,031    2,159
    Allerton loan interest payments                                  -                           505                                           -      605
    Allerton loan legal fees                                       590                             -                                         912        -
    Franchise termination fee                                        -                             -                                         750        -
    Accrual for net key money repayment                              -                           864                                           -      864
    Fair value adjustments to debt instruments                     448                             -                                         401        -
                                                                   ---                           ---                                         ---      ---
    Adjusted FFO                                                        $34,163                                        $25,628                    $49,292   $37,432
                                                                        =======                                        =======                    =======   =======
    Adjusted FFO per share                                                $0.20                                          $0.15                      $0.29     $0.23
                                                                          =====                                          =====                      =====     =====

    (1)     Amounts include
     depreciation expense included
     in discontinued operations as
     follows:  $2.8 million in the
     fiscal quarter ended June 17,
     2011 and $5.6 million in the
     period from January 1, 2011 to
     June 17, 2011.

                                                                       Guidance
                                                                       --------
                                                             Quarter 3, 2012             Full Year 2012
                                                             ---------------             --------------
                                                         Low End    High End   Low End        High End
                                                         -------    --------   -------        --------
    Net income                                                         $50              $3,550             $31,893  $39,893
    Real estate related depreciation and amortization(1)   23,500            23,000               98,000    97,000
    Impairment of favorable lease asset                         -                 -                  468       468
    Gain on sale of hotel properties, net of tax                -                 -              (10,017)  (10,017)
                                                              ---               ---              -------   -------
    FFO                                                    23,550            26,550              120,344   127,344
    Non-cash ground rent                                    1,500             1,500                6,500     6,500
    Non-cash amortization of unfavorable contract            (450)             (450)              (1,850)   (1,850)
        liabilities
    Gain on early extinguishment of debt                        -                 -                 (144)     (144)
    Acquisition costs                                       8,000             8,000               10,000    10,000
    Allerton loan legal fees                                  500               500                2,200     2,200
    Franchise termination fee                                   -                 -                  750       750
    Fair value adjustments to debt instruments               (100)             (100)                 200       200
                                                             ----              ----                  ---       ---
    Adjusted FFO                                                   $33,000             $36,000            $138,000 $145,000
                                                                   =======             =======            ======== ========
    Adjusted FFO per share                                           $0.18               $0.19               $0.76    $0.80
                                                                     =====               =====               =====    =====

Use and Limitations of Non-GAAP Financial Measures

Our management and Board of Directors use EBITDA, Adjusted EBITDA, FFO and Adjusted FFO to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. We compensate for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our consolidated statements of operations and cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures.

These non-GAAP financial 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.

Quarterly Pro Forma Financial Information

The following table is presented to provide investors with selected historical quarterly operating information to include the operating results for the Company's current portfolio of 27 hotels as if they were owned since January 1, 2011 and exclude the three hotels sold on March 23, 2012.

                                         Quarter 3, 2011 Quarter 4, 2011 Full Year 2011 Quarter 1, 2012 Quarter 2, 2012
                                         --------------- --------------- -------------- --------------- ---------------
    RevPAR                                                $134.82         $130.99        $125.98        $107.84           $141.25
    Revenues (in thousands)                              $188,024        $254,790       $759,645       $132,132          $210,576
    Hotel Adjusted EBITDA (in thousands)                  $51,193         $69,893       $197,365        $24,469           $61,910
    % of Full Year                                           25.9%           35.4%         100.0%          10.8%             27.4%
    Hotel Adjusted EBITDA Margin                            27.23%          27.43%         25.98%         18.52%            29.40%
    Available Rooms                                      1,012,672       1,373,541      4,267,448        848,818        1,041,576

Available Rooms

The following table is presented to provide investors with the Company's total available rooms for its actual ownership period of all its owned hotels during 2011 and 2012.

                                 2011                 2012
                                 ----                 ----
    Quarter 1                 818,196              877,702
    Quarter 2                 919,886              907,072
    Quarter 3                 988,589              981,634
    Quarter 4               1,355,863            1,402,905
    Full Year               4,082,534            4,169,313
                            =========            =========

Certain Definitions

In this release, when we discuss "Hotel Adjusted EBITDA," we exclude from Hotel EBITDA the non-cash expense incurred by the hotels due to the straight lining of the rent from our ground lease obligations, the non-cash amortization of our favorable lease assets, the non-cash amortization of the unfavorable contract liabilities recorded in conjunction with the acquisitions of the Bethesda Marriott Suites, the Chicago Marriott Downtown, the Renaissance Charleston and the Lexington Hotel New York. Hotel EBITDA represents hotel net income excluding: (1) interest expense; (2) income taxes; and (3) depreciation and amortization. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues. Net debt is calculated as total debt outstanding less unrestricted cash.

DIAMONDROCK HOSPITALITY COMPANY

PRO FORMA HOTEL OPERATING DATA
Schedule of Property Level Results
(in thousands)
(unaudited)

                                                  Fiscal Quarter Ended Period From
                                                  -------------------- -----------
                                                        June 15,   June 17, 2011   % Change   January 1, 2012 to June 15,  January 1, 2011 to June 17,
                                                                                                          2012                         2011             % Change
                                                                       2012
                                                                       ----
    Revenues:
    Rooms                                                          $126,973  $118,005    7.6%                    $210,361                     $194,632       8.1%
    Food and beverage                                                47,907    43,276   10.7%                      79,158                       73,461       7.8%
    Other                                                            10,667     7,978   33.7%                      17,450                       13,830      26.2%
                                                                     ------     -----   ----                       ------                       ------      ----
    Total revenues                                                  185,547   169,259    9.6%                     306,969                      281,923       8.9%

    Operating Expenses:
    Rooms departmental expenses                                      33,422    30,591    9.3%                      58,301                       53,701       8.6%
    Food and beverage departmental expenses                          33,233    29,825   11.4%                      57,077                       53,118       7.5%
    Other direct departmental                                         4,736     4,069   16.4%                       8,516                        7,458      14.2%
    General and administrative                                       14,838    13,979    6.1%                      26,414                       25,121       5.1%
    Utilities                                                         5,863     6,082  (3.6%)                      11,007                       11,112     (0.9%)
    Repairs and maintenance                                           7,845     7,665    2.3%                      14,096                       13,886       1.5%
    Sales and marketing                                              13,935    13,025    7.0%                      23,967                       22,339       7.3%
    Base management fees                                              4,924     4,499    9.4%                       8,006                        7,384       8.4%
    Incentive management fees                                         1,692     1,414   19.7%                       1,752                        1,488      17.7%
    Property taxes                                                    7,789     7,204    8.1%                      14,460                       12,657      14.2%
    Ground rent                                                       3,532     3,430    3.0%                       6,536                        6,312       3.5%
    Other fixed expenses                                              2,551     2,522    1.1%                       4,350                        4,384     (0.8%)
                                                                      -----     -----    ---                        -----                        -----     -----
    Total hotel operating expenses                                  134,360   124,305    8.1%                     234,482                      218,960       7.1%

    Hotel EBITDA                                                     51,187    44,954   13.9%                      72,487                       62,963      15.1%

    Non-cash ground rent                                              1,575     1,694  (7.0%)                       3,110                        3,300     (5.8%)
    Non-cash amortization of unfavorable contract
     liabilities                                                       (432)     (432)   0.0%                        (864)                        (864)      0.0%
                                                                       ----      ----    ---                         ----                         ----       ---

    Hotel Adjusted EBITDA                                           $52,330   $46,216   13.2%                     $74,733                      $65,399      14.3%
                                                                    =======   =======   ====                      =======                      =======      ====

NOTE:

The pro forma operating data above includes the operating results for the Company's portfolio of 23 hotels owned as of June 15, 2012 assuming they were owned since January 1, 2011 and excludes the operating results of the three hotels sold on March 23, 2012.




                                                                                  Market Capitalization as of June 15, 2012
                                                                                   (in thousands, except per share data)


    Enterprise Value
    ----------------

    Common equity capitalization (at June 15, 2012 closing price of $10.19/share)                                           $1,718,807
    Consolidated debt                                                                                                          900,624
    Cash and cash equivalents                                                                                                 (104,824)
                                                                                                                              --------

    Total enterprise value                                                                                                  $2,514,607
                                                                                                                            ==========


    Share Reconciliation
    --------------------

    Common shares outstanding                                                                                                  167,930

    Unvested restricted stock held by management and employees                                                                     693
    Share grants under deferred compensation plan held by directors                                                                 53
                                                                                                                                   ---

    Combined shares outstanding                                                                                                168,676
                                                                                                                               =======

                                                                                                                                                                                                                                                                         
                                                                                                                      Debt Summary as of June 15, 2012
                                                                                                                           (dollars in thousands)
                                                                                                                                                                                                                                                                                                                                                
                                                                                                                                  Property                                                                                                                               Interest Rate       Term       Outstanding Principal       Maturity
                                                                                                                                                                                                                                                                                                                                                
    Courtyard Manhattan / Midtown East                                                                                                                                                                                                                                           8.810%      Fixed                    $42,122     October 2014
    Salt Lake City Marriott Downtown                                                                                                                                                                                                                                             5.500%      Fixed                     29,436     January 2015
    Courtyard Manhattan / Fifth Avenue                                                                                                                                                                                                                                           6.480%      Fixed                     50,445       June 2016
    Los Angeles Airport Marriott                                                                                                                                                                                                                                                 5.300%      Fixed                     82,600       July 2015
    Frenchman's Reef Marriott                                                                                                                                                                                                                                                    5.440%      Fixed                     59,174     August 2015
    Renaissance Worthington                                                                                                                                                                                                                                                      5.400%      Fixed                     55,126       July 2015
    Orlando Airport Marriott                                                                                                                                                                                                                                                     5.680%      Fixed                     57,964     January 2016
    Chicago Marriott Downtown                                                                                                                                                                                                                                                    5.975%      Fixed                    212,922      April 2016
    Hilton Minneapolis                                                                                                                                                                                                                                                           5.464%      Fixed                     98,016      April 2021
    JW Marriott Denver Cherry Creek                                                                                                                                                                                                                                              6.470%      Fixed                     41,354       July 2015
    Lexington Hotel New York                                                                                                                                                                                                                                                LIBOR +        Variable                   170,368      March 2015
                                                                                                                                                                                                                                                                                  3.00
    Debt premium (1)                                                                                                                                                                                                                                                                                                    1,097
                                                                                                                                                                                                                                                                                                                        -----
        Total mortgage debt                                                                                                                                                                                                                                                                                           900,624
                                                                                                                                                                                                                                                                                                                      =======
                                                                                                                                                                                                                                                                                                                                                
    Senior unsecured credit facility                                                                                                                                                                                                                                        LIBOR +        Variable                         -     August 2014
                                                                                                                                                                                                                                                                                  2.75
                                                                                                                                                                                                                                                                                                                                                
    Total debt                                                                                                                                                                                                                                                                             $900,624
                                                                                                                                                                                                                                                                                           ========
                                                                                                                                                                                                                                                                         
    (1)     Non-cash GAAP adjustment recorded upon the assumption of the JW Marriott Denver at Cherry Creek mortgage debt in 2011.

                                                                                                                                                                                                     Pro Forma Operating Statistics - Second Quarter (1)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                               ADR             Occupancy     RevPAR            Hotel Adjusted EBITDA Margin
                                                                                                                                                                                                                                                                                                                                                                                                                                                               ---             ---------     ------            ----------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                             2Q 2012  2Q 2011    B/(W)       2Q 2012  2Q 2011              B/(W)                2Q 2012  2Q 2011  B/(W)      2Q 2012  2Q 2011    B/(W)
                                                                                                                                                                                                                                                                                                                                                                                                                                                             -------  -------    -----       -------  -------              -----                -------  -------  -----      -------  -------    -----
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
    Atlanta Alpharetta                                                                                                                                                                                                                                                                                                                                                                                                                                       $137.08  $131.89        3.9%       69.3%    69.7%                        (0.4%)     $95.04   $91.95     3.4%      32.55%   29.41%  314 bps
    Westin Atlanta North (2)                                                                                                                                                                                                                                                                                                                                                                                                                                 $105.91  $107.68      (1.6%)       82.8%    73.8%                          9.0%     $87.70   $79.51    10.3%      21.93%   16.66%  527 bps
    Bethesda Marriott Suites                                                                                                                                                                                                                                                                                                                                                                                                                                 $164.59  $175.36      (6.1%)       77.0%    78.3%                        (1.3%)    $126.77  $137.38   (7.7%)      32.02%   35.00% -298 bps
    Boston Westin (2)                                                                                                                                                                                                                                                                                                                                                                                                                                        $211.08  $196.99        7.2%       77.8%    75.9%                          1.9%    $164.12  $149.59     9.7%      26.30%   28.87% -257 bps
    Renaissance Charleston                                                                                                                                                                                                                                                                                                                                                                                                                                   $208.44  $190.81        9.2%       91.2%    92.7%                        (1.5%)    $190.08  $176.81     7.5%      41.79%   42.12%  -33 bps
    Hilton Garden Inn Chelsea (2)                                                                                                                                                                                                                                                                                                                                                                                                                            $209.02  $208.56        0.2%       96.3%    94.3%                          2.0%    $201.37  $196.64     2.4%      44.57%   47.50% -293 bps
    Chicago Marriott                                                                                                                                                                                                                                                                                                                                                                                                                                         $219.46  $212.30        3.4%       79.2%    74.8%                          4.4%    $173.85  $158.89     9.4%      29.41%   27.58%  183 bps
    Chicago Conrad (2)                                                                                                                                                                                                                                                                                                                                                                                                                                       $200.60  $183.19        9.5%       81.2%    90.4%                        (9.2%)    $162.93  $165.68   (1.7%)      26.85%   29.32% -247 bps
    Courtyard Denver Downtown (2)                                                                                                                                                                                                                                                                                                                                                                                                                            $162.40  $154.24        5.3%       84.5%    73.5%                         11.0%    $137.22  $113.39    21.0%      47.36%   42.89%  447 bps
    Courtyard Fifth Avenue                                                                                                                                                                                                                                                                                                                                                                                                                                   $280.54  $273.59        2.5%       88.3%    88.7%                        (0.4%)    $247.79  $242.65     2.1%      30.90%   35.00% -410 bps
    Courtyard Midtown East                                                                                                                                                                                                                                                                                                                                                                                                                                   $283.42  $274.79        3.1%       86.1%    86.5%                        (0.4%)    $244.06  $237.81     2.6%      38.59%   40.67% -208 bps
    Frenchman's Reef (2)                                                                                                                                                                                                                                                                                                                                                                                                                                     $264.01  $236.65       11.6%       82.1%    85.1%                        (3.0%)    $216.74  $201.37     7.6%      26.33%   12.57% 1376 bps
    JW Marriott Denver Cherry Creek (2)                                                                                                                                                                                                                                                                                                                                                                                                                      $222.44  $227.82      (2.4%)       73.9%    71.4%                          2.5%    $164.28  $162.77     0.9%      29.03%   25.73%  330 bps
    Los Angeles Airport                                                                                                                                                                                                                                                                                                                                                                                                                                      $111.87  $102.00        9.7%       85.0%    84.6%                          0.4%     $95.06   $86.34    10.1%      21.38%   18.66%  272 bps
    Hilton Minneapolis (2)                                                                                                                                                                                                                                                                                                                                                                                                                                   $139.47  $139.44        0.0%       72.6%    73.3%                        (0.7%)    $101.26  $102.28   (1.0%)      25.91%   29.44% -353 bps
    Oak Brook Hills                                                                                                                                                                                                                                                                                                                                                                                                                                          $113.55  $114.85      (1.1%)       59.6%    62.1%                        (2.5%)     $67.65   $71.32   (5.1%)       8.74%   18.22% -948 bps
    Orlando Airport Marriott                                                                                                                                                                                                                                                                                                                                                                                                                                 $105.42   $99.93        5.5%       74.7%    73.6%                          1.1%     $78.75   $73.50     7.1%      23.87%   17.80%  607 bps
    Salt Lake City Marriott                                                                                                                                                                                                                                                                                                                                                                                                                                  $131.35  $125.83        4.4%       66.3%    63.9%                          2.4%     $87.13   $80.47     8.3%      26.52%   27.65% -113 bps
    The Lodge at Sonoma                                                                                                                                                                                                                                                                                                                                                                                                                                      $223.57  $205.20        9.0%       77.4%    76.5%                          0.9%    $172.94  $157.07    10.1%      20.32%   18.02%  230 bps
    Torrance Marriott South Bay                                                                                                                                                                                                                                                                                                                                                                                                                              $109.01  $105.69        3.1%       85.6%    79.0%                          6.6%     $93.35   $83.46    11.8%      27.04%   25.18%  186 bps
    Vail Marriott (2)                                                                                                                                                                                                                                                                                                                                                                                                                                        $248.07  $245.67        1.0%       54.6%    51.4%                          3.2%    $135.33  $126.17     7.3%      23.26%   21.48%  178 bps
    Radisson Lexington Hotel New York (2)                                                                                                                                                                                                                                                                                                                                                                                                                    $212.45  $196.69        8.0%       94.1%    96.9%                        (2.8%)    $199.91  $190.65     4.9%      36.36%   37.12%  -76 bps
    Renaissance Worthington                                                                                                                                                                                                                                                                                                                                                                                                                                  $156.48  $160.33      (2.4%)       75.7%    69.4%                          6.3%    $118.39  $111.26     6.4%      33.22%   28.65%  457 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                             -------  -------      -----        ----     ----                           ---     -------  -------     ---       -----    -----   -------
    Total/Weighted Average                                                                                                                                                                                                                                                                                                                                                                                                                                   $177.90  $170.00        4.6%       78.7%    77.3%                          1.4%    $139.98  $131.45     6.5%      28.20%   27.30%   90 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                             =======  =======        ===        ====     ====                           ===     =======  =======     ===       =====    =====    ======
    Pro Forma Total/Weighted Average (3)                                                                                                                                                                                                                                                                                                                                                                                                                     $173.31  $167.05        3.7%       78.5%    77.0%                          1.5%    $136.07  $128.65     5.8%      28.39%   28.31%    8 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                             =======  =======        ===        ====     ====                           ===     =======  =======     ===       =====    =====     =====
    (1)  The pro forma operating
     data includes the operating
     results for the Company's
     hotels assuming they were
     owned since January 1, 2011.
    (2)  The hotel reports results
     on a monthly basis.  The data
     presented is based upon the
     Company's reporting calendar
     for the second quarter and
     includes the months of March,
     April and May.
    (3)  The pro forma total
     excludes the Frenchman's Reef
     & Morning Star Marriott Beach
     Resort due to the renovation
     in 2011.

                                                                                                                                                                                                            Pro Forma Operating Statistics - Year to Date (1)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             ADR              Occupancy      RevPAR             Hotel Adjusted EBITDA Margin
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             ---              ---------      ------             ----------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          YTD 2012  YTD 2011    B/(W)       YTD 2012  YTD 2011              B/(W)                YTD 2012  YTD 2011  B/(W)      YTD 2012  YTD 2011    B/(W)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          --------  --------    -----       --------  --------              -----                --------  --------  -----      --------  --------    -----
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
    Atlanta Alpharetta                                                                                                                                                                                                                                                                                                                                                                                                                                                     $140.78   $134.19        4.9%        68.3%     68.4%                        (0.1%)      $96.13    $91.77     4.8%       34.32%    31.50%  282 bps
    Westin Atlanta North (2)                                                                                                                                                                                                                                                                                                                                                                                                                                               $107.84   $108.56      (0.7%)        80.3%     70.0%                         10.3%      $86.60    $75.95    14.0%       21.73%    15.49%  624 bps
    Atlanta Waverly (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                    $132.02   $133.36      (1.0%)        73.8%     67.6%                          6.2%      $97.48    $90.13     8.2%       26.33%    23.55%  278 bps
    Renaissance Austin (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                 $154.28   $148.11        4.2%        73.9%     71.4%                          2.5%     $114.06   $105.69     7.9%       38.50%    35.14%  336 bps
    Bethesda Marriott Suites                                                                                                                                                                                                                                                                                                                                                                                                                                               $169.28   $175.60      (3.6%)        64.5%     66.5%                        (2.0%)     $109.15   $116.80   (6.5%)       27.17%    29.05% -188 bps
    Boston Westin (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                      $196.64   $185.47        6.0%        68.6%     64.7%                          3.9%     $134.95   $120.00    12.5%       18.30%    19.03%  -73 bps
    Renaissance Charleston                                                                                                                                                                                                                                                                                                                                                                                                                                                 $190.30   $176.19        8.0%        85.7%     84.1%                          1.6%     $163.09   $148.26    10.0%       36.40%    35.45%   95 bps
    Hilton Garden Inn Chelsea (2)                                                                                                                                                                                                                                                                                                                                                                                                                                          $187.69   $187.66        0.0%        93.4%     90.1%                          3.3%     $175.24   $169.09     3.6%       37.93%    40.97% -304 bps
    Chicago Marriott                                                                                                                                                                                                                                                                                                                                                                                                                                                       $193.36   $189.57        2.0%        67.6%     62.9%                          4.7%     $130.68   $119.19     9.6%       18.91%    17.75%  116 bps
    Chicago Conrad (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                     $185.34   $170.74        8.6%        72.1%     78.8%                        (6.7%)     $133.72   $134.60   (0.7%)       14.59%    18.55% -396 bps
    Courtyard Denver Downtown (2)                                                                                                                                                                                                                                                                                                                                                                                                                                          $154.07   $148.71        3.6%        83.0%     71.7%                         11.3%     $127.88   $106.69    19.9%       44.54%    39.47%  507 bps
    Courtyard Fifth Avenue                                                                                                                                                                                                                                                                                                                                                                                                                                                 $250.04   $243.45        2.7%        86.2%     83.7%                          2.5%     $215.56   $203.69     5.8%       22.51%    24.47% -196 bps
    Courtyard Midtown East                                                                                                                                                                                                                                                                                                                                                                                                                                                 $248.19   $241.91        2.6%        82.6%     80.5%                          2.1%     $204.99   $194.68     5.3%       29.53%    29.67%  -14 bps
    Frenchman's Reef (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                   $272.42   $253.11        7.6%        82.7%     82.1%                          0.6%     $225.43   $207.72     8.5%       28.46%    20.04%  842 bps
    Griffin Gate Marriott (3)                                                                                                                                                                                                                                                                                                                                                                                                                                              $118.51   $113.30        4.6%        45.8%     43.9%                          1.9%      $54.31    $49.78     9.1%      (2.46%)     0.97% -343 bps
    JW Marriott Denver Cherry Creek (2)                                                                                                                                                                                                                                                                                                                                                                                                                                    $218.94   $224.86      (2.6%)        71.4%     67.8%                          3.6%     $156.39   $152.39     2.6%       25.76%    23.53%  223 bps
    Los Angeles Airport                                                                                                                                                                                                                                                                                                                                                                                                                                                    $109.98   $105.19        4.6%        87.3%     84.0%                          3.3%      $96.05    $88.36     8.7%       20.77%    18.48%  229 bps
    Hilton Minneapolis (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                 $130.46   $130.59      (0.1%)        67.5%     68.1%                        (0.6%)      $88.09    $88.97   (1.0%)       20.34%    24.83% -449 bps
    Oak Brook Hills                                                                                                                                                                                                                                                                                                                                                                                                                                                        $112.58   $111.74        0.8%        54.7%     49.4%                          5.3%      $61.57    $55.18    11.6%        3.47%     3.08%   39 bps
    Orlando Airport Marriott                                                                                                                                                                                                                                                                                                                                                                                                                                               $110.82   $104.61        5.9%        79.2%     81.5%                        (2.3%)      $87.81    $85.23     3.0%       28.53%    26.98%  155 bps
    Salt Lake City Marriott                                                                                                                                                                                                                                                                                                                                                                                                                                                $135.38   $126.18        7.3%        68.8%     60.8%                          8.0%      $93.10    $76.75    21.3%       31.44%    25.50%  594 bps
    The Lodge at Sonoma                                                                                                                                                                                                                                                                                                                                                                                                                                                    $207.18   $189.95        9.1%        64.8%     64.7%                          0.1%     $134.33   $122.93     9.3%       11.42%     5.93%  549 bps
    Torrance Marriott South Bay                                                                                                                                                                                                                                                                                                                                                                                                                                            $109.92   $105.87        3.8%        83.2%     78.4%                          4.8%      $91.49    $83.01    10.2%       25.40%    23.11%  229 bps
    Vail Marriott (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                      $284.27   $278.73        2.0%        64.2%     62.7%                          1.5%     $182.38   $174.76     4.4%       35.26%    34.19%  107 bps
    Radisson Lexington Hotel New York (2)                                                                                                                                                                                                                                                                                                                                                                                                                                  $184.13   $170.71        7.9%        93.3%     94.0%                        (0.7%)     $171.70   $160.45     7.0%       30.20%    28.58%  162 bps
    Renaissance Worthington                                                                                                                                                                                                                                                                                                                                                                                                                                                $156.28   $166.72      (6.3%)        76.7%     71.8%                          4.9%     $119.79   $119.78     0.0%       33.21%    34.51% -130 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                                           -------   -------      -----         ----      ----                           ---      -------   -------     ---        -----     -----  --------
    Total/Weighted Average                                                                                                                                                                                                                                                                                                                                                                                                                                                 $165.39   $159.66        3.6%        74.9%     72.0%                          2.9%     $123.80   $115.00     7.7%       24.47%    23.27%  120 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                                           =======   =======        ===         ====      ====                           ===      =======   =======     ===        =====     =====   =======
    Comparable Total/Weighted Average (4)                                                                                                                                                                                                                                                                                                                                                                                                                                  $167.06   $161.15        3.7%        75.5%     72.7%                          2.8%     $126.10   $117.21     7.6%       24.35%    23.20%  115 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                                           =======   =======        ===         ====      ====                           ===      =======   =======     ===        =====     =====   =======
    Pro Forma Total/Weighted Average (5)                                                                                                                                                                                                                                                                                                                                                                                                                                   $161.78   $157.05        3.0%        75.2%     72.4%                          2.8%     $121.58   $113.66     7.0%       23.94%    23.45%   49 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                                           =======   =======        ===         ====      ====                           ===      =======   =======     ===        =====     =====    ======
    (1)  The pro forma operating
     data includes the operating
     results for the Company's
     hotels assuming they were
     owned since January 1, 2011.
    (2)  The hotel reports results
     on a monthly basis.  The data
     presented is based upon the
     Company's reporting calendar
     and includes the months of
     January through May.
    (3)  The hotel was sold on
     March 23, 2012. The 2011
     operating results presented
     are for the ownership period
     comparable to the Company's
     2012 ownership period.
    (4)  The comparable total
     excludes the three hotels sold
     on March 23, 2012.
    (5)  The pro forma total
     excludes the Frenchman's Reef
     & Morning Star Marriott Beach
     Resort and the three hotels
     sold on March 23, 2012.

                                                           Pro Forma Hotel Adjusted EBITDA Reconciliation

                                                                                Second Quarter 2012 (1)
                                                                                ----------------------
                                                                                                              Plus:                   Plus:                         Plus:                         Equals:
                                          Total Revenues                            Net Income / (Loss)   Depreciation           Interest Expense         Non-Cash Adjustments (2)         Hotel Adjusted EBITDA
                                          --------------                            -------------------   ------------           ----------------          -----------------------         ---------------------
    Atlanta Alpharetta                               $3,638                                        $879                   $305 $                        -        $                      -                         $1,184
    Westin Atlanta North (3)                         $4,596                                        $567                   $441 $                        -        $                      -                         $1,008
    Bethesda Marriott Suites                         $3,932                                       $(667)                  $479 $                        -                          $1,447                         $1,259
    Boston Westin (3)                               $21,308                                      $3,685                 $1,917 $                        -                              $2                         $5,604
    Renaissance Charleston                           $3,173                                      $1,005                   $350 $                        -                            $(29)                        $1,326
    Hilton Garden Inn Chelsea (3)                    $3,239                                      $1,007                   $437 $                        -       $                       -                         $1,444
    Chicago Marriott                                $26,587                                      $2,216                 $2,991                     $2,981                           $(365)                        $7,823
    Chicago Conrad (3)                               $5,956                                        $830                   $768 $                        -        $                      -                         $1,598
    Courtyard Denver Downtown (3)                    $2,405                                        $904                   $235 $                        -        $                      -                         $1,139
    Courtyard Fifth Avenue                           $3,887                                        $(68)                  $430                       $792                             $48                         $1,202
    Courtyard Midtown East                           $6,647                                      $1,116                   $548                       $901        $                      -                         $2,565
    Frenchman's Reef (3)                            $16,479                                      $2,116                 $1,451                       $772        $                      -                         $4,339
    JW Marriott Denver Cherry Creek (3)              $4,743                                        $403                   $420                       $554        $                      -                         $1,377
    Los Angeles Airport                             $13,805                                        $574                 $1,340                     $1,037        $                      -                         $2,951
    Minneapolis Hilton (3)                          $12,190                                        $254                 $1,748                     $1,272                           $(116)                        $3,158
    Oak Brook Hills                                  $5,046                                       $(415)                  $731 $                        -                            $125                           $441
    Orlando Airport Marriott                         $4,863                                       $(300)                  $688                       $773        $                      -                         $1,161
    Salt Lake City Marriott                          $5,297                                        $374                   $646                       $385        $                      -                         $1,405
    The Lodge at Sonoma                              $4,548                                        $574                   $350 $                        -        $                      -                           $924
    Torrance Marriott South Bay                      $5,363                                        $713                   $737 $                        -        $                      -                         $1,450
    Vail Marriott (3)                                $5,749                                        $802                   $535 $                        -        $                      -                         $1,337
    Radisson Lexington Hotel New York (3)           $13,898                                        $491                 $2,363                     $2,166                             $33                         $5,053
    Renaissance Worthington                          $8,198                                      $1,359                   $661                       $704                             $(1)                        $2,723
                                                     ------                                      ------                   ----                       ----                             ---                         ------
    Total                                          $185,547                                     $18,419                $20,571                    $12,337                          $1,144                        $52,330
                                                   ========                                     =======                =======                    =======                          ======                        =======
    Pro Forma Total (4)                            $169,068                                     $16,303                $19,120                    $11,565                          $1,144                        $47,987
                                                   ========                                     =======                =======                    =======                          ======                        =======

    (1)  The pro forma operating
     data includes the operating
     results for the Company's
     hotels assuming they were
     owned since January 1, 2011.
    (2)  The non-cash adjustments
     include expenses incurred by
     the hotels due to the straight
     lining of the rent from ground
     lease obligations, the non-
     cash amortization of favorable
     lease assets, and the non-
     cash amortization of
     unfavorable contract
     liabilities.
    (3)  The hotel reports results
     on a monthly basis. The
     amounts presented are based on
     the Company's reporting
     calendar for the second
     quarter and include the months
     of March, April and May.
    (4) The pro forma total
     excludes the Frenchman's Reef
     & Morning Star Marriott Beach
     Resort due to the renovation
     in 2011.



                                                                                      Pro Forma Hotel Adjusted EBITDA Reconciliation
                                                             Second Quarter 2011 (1)
                                                             ----------------------
                                                                                                                                        Plus:                  Plus:                       Plus:                          Equals:
                                          Total Revenues                             Net Income / (Loss)                            Depreciation         Interest Expense         Non-Cash Adjustments (2)         Hotel Adjusted EBITDA
                                          --------------                             -------------------                            ------------         ----------------         -----------------------          ---------------------
    Atlanta Alpharetta                                     $3,570                                              $762                                 $288    $                   -        $                      -                         $1,050
    Westin Atlanta North (3)                               $4,220                                              $288                                 $415    $                   -        $                      -                           $703
    Bethesda Marriott Suites                               $4,271                                             $(434)                                $483    $                   -                          $1,446                         $1,495
    Boston Westin (3)                                     $18,731                                            $2,428                               $2,863    $                   -                            $117                         $5,408
    Renaissance Charleston                                 $3,001                                              $961                                 $332    $                   -                            $(29)                        $1,264
    Hilton Garden Inn Chelsea (3)                          $3,158                                            $1,076                                 $424    $                   -        $                      -                         $1,500
    Chicago Marriott                                      $23,699                                              $893                               $2,949                   $3,059                           $(365)                        $6,536
    Chicago Conrad (3)                                     $6,133                                              $662                               $1,136    $                   -        $                      -                         $1,798
    Courtyard Denver Downtown (3)                          $2,010                                              $293                                 $234                     $335        $                      -                           $862
    Courtyard Fifth Avenue                                 $3,863                                               $67                                 $439                     $798                             $48                         $1,352
    Courtyard Midtown East                                 $6,462                                            $1,189                                 $530                     $909        $                      -                         $2,628
    Frenchman's Reef (3)                                  $10,771                                             $(329)                                $978                     $705        $                      -                         $1,354
    JW Marriott Denver Cherry Creek (3)                    $4,676                                              $212                                 $417                     $574        $                      -                         $1,203
    Los Angeles Airport                                   $12,349                                             $(247)                              $1,516                   $1,035        $                      -                         $2,304
    Minneapolis Hilton (3)                                $12,450                                            $1,104                               $1,694                     $983                           $(116)                        $3,665
    Oak Brook Hills                                        $5,577                                              $156                                 $735    $                   -                            $125                         $1,016
    Orlando Airport Marriott                               $4,394                                             $(755)                                $754                     $783        $                      -                           $782
    Salt Lake City Marriott                                $5,056                                              $366                                 $628                     $404        $                      -                         $1,398
    The Lodge at Sonoma                                    $3,996                                              $398                                 $322    $                   -        $                      -                           $720
    Torrance Marriott South Bay                            $5,004                                              $523                                 $737    $                   -        $                      -                         $1,260
    Vail Marriott (3)                                      $5,246                                              $620                                 $507    $                   -        $                      -                         $1,127
    Radisson Lexington Hotel New York (3)                 $13,155                                            $2,561                               $2,289    $                   -                             $33                         $4,883
    Renaissance Worthington                                $7,467                                              $797                                 $625                     $714                              $3                         $2,139
                                                           ------                                              ----                                 ----                     ----                             ---                         ------
    Total                                                $169,259                                           $13,591                              $21,295                  $10,299                          $1,262                        $46,216
                                                         ========                                           =======                              =======                  =======                          ======                        =======
    Pro Forma Total (4)                                  $158,488                                           $13,920                              $20,317                   $9,594                          $1,262                        $44,867
                                                         ========                                           =======                              =======                   ======                          ======                        =======

    (1)  The pro forma operating
     data includes the operating
     results for the Company's
     hotels assuming they were
     owned as of January 1, 2011.
    (2)  The non-cash adjustments
     include expenses incurred by
     the hotels due to the straight
     lining of the rent from ground
     lease obligations, the non-
     cash amortization of our
     favorable lease assets and the
     non-cash amortization of our
     unfavorable contract
     liabilities.
    (3)  The hotel reports results
     on a monthly basis.  The
     amounts presented are based on
     the Company's reporting
     calendar for the second
     quarter and include the months
     of March, April and May.
    (4) The pro forma total
     excludes the Frenchman's Reef
     & Morning Star Marriott Beach
     Resort due to the renovation
     in 2011.

                                                           Pro Forma Hotel Adjusted EBITDA Reconciliation

                                                                                 Year to Date 2012 (1)
                                                                                 --------------------
                                                                                                              Plus:                   Plus:                        Plus:                          Equals:
                                          Total Revenues                            Net Income / (Loss)   Depreciation           Interest Expense         Non-Cash Adjustments (2)         Hotel Adjusted EBITDA
                                          --------------                            -------------------   ------------           ----------------         -----------------------          ---------------------
    Atlanta Alpharetta                               $7,486                                      $1,971                   $598 $                        -        $                      -                         $2,569
    Westin Atlanta North (3)                         $7,597                                        $753                   $898 $                        -        $                      -                         $1,651
    Atlanta Waverly (4)                              $7,755                                        $805    $                 -                     $1,237        $                      -                         $2,042
    Renaissance Austin (4)                           $8,385                                      $2,167    $                 -                     $1,061        $                      -                         $3,228
    Bethesda Marriott Suites                         $6,878                                     $(1,979)                  $958 $                        -                          $2,890                         $1,869
    Boston Westin (3)                               $28,711                                      $1,096                 $4,155 $                        -                              $3                         $5,254
    Renaissance Charleston                           $5,498                                      $1,373                   $696 $                        -                            $(58)                        $2,011
    Hilton Garden Inn Chelsea (3)                    $4,675                                        $899                   $874 $                        -        $                      -                         $1,773
    Chicago Marriott                                $39,626                                     $(3,373)                $5,643                     $5,955                           $(730)                        $7,495
    Chicago Conrad (3)                               $8,025                                       $(363)                $1,534 $                        -        $                      -                         $1,171
    Courtyard Denver Downtown (3)                    $3,716                                      $1,008                   $472                       $175        $                      -                         $1,655
    Courtyard Fifth Avenue                           $6,740                                     $(1,009)                  $855                     $1,576                             $95                         $1,517
    Courtyard Midtown East                          $11,181                                        $414                 $1,094                     $1,794        $                      -                         $3,302
    Frenchman's Reef (3)                            $27,377                                      $3,346                 $2,890                     $1,555        $                      -                         $7,791
    Griffin Gate Marriott (4)                        $3,462                                        $(84)   $                 - $                        -                             $(1)                          $(85)
    JW Marriott Denver Cherry Creek (3)              $7,412                                        $(32)                  $839                     $1,102        $                      -                         $1,909
    Los Angeles Airport                             $26,906                                        $841                 $2,688                     $2,060        $                      -                         $5,589
    Minneapolis Hilton (3)                          $18,123                                     $(2,059)                $3,489                     $2,534                           $(277)                        $3,687
    Oak Brook Hills                                  $8,907                                     $(1,407)                $1,466 $                        -                            $250                           $309
    Orlando Airport Marriott                        $10,471                                         $61                 $1,388                     $1,538        $                      -                         $2,987
    Salt Lake City Marriott                         $11,472                                      $1,556                 $1,281                       $770        $                      -                         $3,607
    The Lodge at Sonoma                              $7,321                                        $150                   $686 $                        -        $                      -                           $836
    Torrance Marriott South Bay                     $10,345                                      $1,156                 $1,472 $                        -        $                      -                         $2,628
    Vail Marriott (3)                               $12,460                                      $3,324                 $1,069 $                        -        $                      -                         $4,393
    Radisson Lexington Hotel New York (3)           $19,855                                     $(1,758)                $4,724                     $2,529                             $67                         $5,562
    Renaissance Worthington                         $16,188                                      $2,649                 $1,318                     $1,403                              $6                         $5,376
                                                    -------                                      ------                 ------                     ------                             ---                         ------
    Total                                          $326,572                                     $11,505                $41,087                    $25,289                          $2,245                        $79,918
                                                   ========                                     =======                =======                    =======                          ======                        =======
    Comparable Total (4)                           $306,969                                      $8,617                $41,087                    $22,991                          $2,246                        $74,733
                                                   ========                                      ======                =======                    =======                          ======                        =======
    Pro Forma Total (5)                            $279,593                                      $5,271                $38,197                    $21,436                          $2,246                        $66,942
                                                   ========                                      ======                =======                    =======                          ======                        =======

    (1)  The pro forma operating
     data includes the operating
     results for the Company's
     hotels assuming they were
     owned since January 1, 2011.
    (2)  The non-cash adjustments
     include expenses incurred by
     the hotels due to the straight
     lining of the rent from ground
     lease obligations, the non-
     cash amortization of favorable
     lease assets, and the non-
     cash amortization of
     unfavorable contract
     liabilities.
    (3)  The hotel reports results
     on a monthly basis. The
     amounts presented are based on
     the Company's reporting
     calendar and includes the
     months of January to May.
    (4) The hotel was sold on March
     23, 2012 and the comparable
     total excludes these hotels.
    (5) The pro forma total
     excludes the Frenchman's Reef
     & Morning Star Marriott Beach
     Resort and the three hotels
     sold on March 23, 2012.
                                                            Pro Forma Hotel Adjusted EBITDA Reconciliation

                                                                                 Year to Date 2011 (1)
                                                                                  --------------------
                                                                                                              Plus:                    Plus:                        Plus:                          Equals:
                                          Total Revenues                            Net Income / (Loss)    Depreciation           Interest Expense         Non-Cash Adjustments (2)         Hotel Adjusted EBITDA
                                          --------------                            -------------------    ------------           ----------------         -----------------------          ---------------------
    Atlanta Alpharetta                               $7,241                                      $1,708                    $573 $                        -        $                      -                         $2,281
    Westin Atlanta North (3)                         $6,720                                        $198                    $843 $                        -        $                      -                         $1,041
    Atlanta Waverly (4)                              $7,332                                        $476     $                 -                     $1,251        $                      -                         $1,727
    Renaissance Austin (4)                           $7,669                                      $1,621     $                 -                     $1,074        $                      -                         $2,695
    Bethesda Marriott Suites                         $7,354                                     $(1,731)                   $970 $                        -                          $2,897                         $2,136
    Boston Westin (3)                               $24,952                                     $(1,256)                 $5,771 $                        -                            $234                         $4,749
    Renaissance Charleston                           $5,052                                      $1,186                    $663 $                        -                            $(58)                        $1,791
    Hilton Garden Inn Chelsea (3)                    $4,469                                        $985                    $846 $                        -        $                      -                         $1,831
    Chicago Marriott                                $36,106                                     $(5,231)                 $6,262                     $6,108                           $(730)                        $6,409
    Chicago Conrad (3)                               $8,235                                       $(745)                 $2,273 $                        -        $                      -                         $1,528
    Courtyard Denver Downtown (3)                    $3,109                                         $89                    $468                       $670        $                      -                         $1,227
    Courtyard Fifth Avenue                           $6,466                                       $(988)                   $878                     $1,597                             $95                         $1,582
    Courtyard Midtown East                          $10,660                                        $262                  $1,062                     $1,839        $                      -                         $3,163
    Frenchman's Reef (3)                            $20,406                                        $656                  $1,931                     $1,503        $                      -                         $4,090
    Griffin Gate Marriott (4)                        $3,286                                         $33     $                 - $                        -                             $(1)                           $32
    JW Marriott Denver Cherry Creek (3)              $7,302                                       $(264)                   $834                     $1,149        $                      -                         $1,719
    Los Angeles Airport                             $24,605                                       $(350)                 $2,825                     $2,071        $                      -                         $4,546
    Minneapolis Hilton (3)                          $18,578                                        $577                  $3,376                       $983                           $(324)                        $4,612
    Oak Brook Hills                                  $8,185                                     $(1,475)                 $1,477 $                        -                            $250                           $252
    Orlando Airport Marriott                        $10,408                                       $(269)                 $1,509                     $1,568        $                      -                         $2,808
    Salt Lake City Marriott                          $9,828                                        $437                  $1,256                       $813        $                      -                         $2,506
    The Lodge at Sonoma                              $6,598                                       $(260)                   $651 $                        -        $                      -                           $391
    Torrance Marriott South Bay                      $9,670                                        $762                  $1,473 $                        -        $                      -                         $2,235
    Vail Marriott (3)                               $11,740                                      $2,998                  $1,016 $                        -        $                      -                         $4,014
    Radisson Lexington Hotel New York (3)           $18,341                                        $596                  $4,578 $                        -                             $67                         $5,241
    Renaissance Worthington                         $15,898                                      $2,800                  $1,251                     $1,431                              $5                         $5,487
                                                    -------                                      ------                  ------                     ------                             ---                         ------
    Total                                          $300,210                                      $2,815                 $42,786                    $22,056                          $2,435                        $69,853
                                                   ========                                      ======                 =======                    =======                          ======                        =======
    Comparable Total (4)                           $281,923                                        $685                 $42,786                    $19,731                          $2,436                        $65,399
                                                   ========                                        ====                 =======                    =======                          ======                        =======
    Pro Forma Total (5)                            $261,517                                         $29                 $40,855                    $18,228                          $2,436                        $61,309
                                                   ========                                         ===                 =======                    =======                          ======                        =======

    (1)   The pro forma operating
     data includes the operating
     results for the Company's
     hotels assuming they were
     owned since January 1, 2011.
    (2)  The non-cash adjustments
     include expenses incurred by
     the hotels due to the straight
     lining of the rent from ground
     lease obligations, the non-
     cash amortization of favorable
     lease assets, and the non-
     cash amortization of
     unfavorable contract
     liabilities.
    (3)  The hotel reports results
     on a monthly basis. The
     amounts presented are based on
     the Company's reporting
     calendar includes the months
     of January through May.
    (4) The hotel was sold on March
     23, 2012 and the comparable
     total excludes these hotels.
     The 2011 operating results
     presented in the table are for
     the ownership period
     comparable to the Company's
     2012 ownership period.
    (5) The pro forms total
     excludes the Frenchman's Reef
     & Morning Star Marriott Beach
     Resort and the three hotels
     sold on March 23, 2012.

SOURCE DiamondRock Hospitality Company

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