REDEVELOPMENT AND RETURN ON INVESTMENT EXPENDITURES - The Company invested approximately $50 million

NAREIT Funds From Operations ( FFO ) per diluted comfort inn by the bay share, Adjusted FFO per diluted share (which excludes debt extinguishment costs and other expenses), Adjusted comfort inn by the bay EBITDA comfort inn by the bay (which is earnings before interest, taxes, depreciation, amortization and other items) and comparable hotel operating results (including comparable hotel revenues and comparable hotel adjusted operating profit margins) are non-GAAP (U.S. generally accepted accounting principles) financial measures within the meaning of the rules of the Securities and Exchange Commission ( SEC ). See the discussion included in this press release on why the Company comfort inn by the bay believes these supplemental measures are useful, reconciliations to the applicable GAAP measure and the limitations on their use.
The increase in total revenues for the second quarter and year-to-date 2012 reflect the improved performance of the Company s owned hotels due to improvements in comparable hotel RevPAR of 6.1% for both the second quarter and year-to-date and improvements in comparable food and beverage revenues of 5.7% and 5.8% for the second quarter and year-to-date, respectively. In addition, the improvement in operating results for year-to-date 2012 includes operations for the ten hotels (nearly 4,000 rooms) acquired in the first half of 2011, which increased revenues by an incremental $56 million. If the Company reported its results on a calendar quarter basis, then comparable hotel RevPAR would have increased 6.8% for the second quarter 2012 compared to 2011.
The increase in comparable hotel RevPAR was primarily driven by improvements in average room rates coupled with continued occupancy growth. For the quarter and year-to-date, average room rates improved 3.7% and 3.3%, respectively, while occupancy improved 1.7 percentage points to 77.6% and 1.9 percentage points to 73.7%, respectively. The improvements in revenues led to strong margin growth as comparable comfort inn by the bay hotel adjusted operating profit margins increased 120 basis points and 110 basis points for the second quarter and year-to-date 2012, respectively.
REDEVELOPMENT AND RETURN ON INVESTMENT EXPENDITURES - The Company invested approximately comfort inn by the bay $50 million and $98 million in the second comfort inn by the bay quarter and year-to-date 2012, respectively, in redevelopment and return on investment ( ROI ) expenditures. These projects are designed to increase cash flow and improve profitability by capitalizing on changing market conditions and the favorable locations of the Company s properties. During the second comfort inn by the bay quarter, comfort inn by the bay the Company completed the rooms renovation phase of the redevelopment at the 1,778-room Sheraton New York Hotel Towers and the conversion of one tower at the Sheraton Indianapolis into apartments, which it has already begun leasing. The Company expects that its investment in ROI expenditures for 2012 will total approximately comfort inn by the bay $165 million to $175 million.
ares a capital improvement plan designed to enhance profitability. The Company spent approximately $50 million and $64 million on acquisition projects in the second quarter and year-to-date, respectively, and expects to invest between $115 million and $125 million for 2012.
RENEWAL AND REPLACEMENT EXPENDITURES - The Company invested approximately $79 million and $179 million in renewal and replacement expenditures during the second quarter comfort inn by the bay and year-to-date 2012, respectively. comfort inn by the bay These expenditures are designed to ensure that the high-quality standards of both the Company and its operators are maintained. Major renewal and replacement projects completed during the second quarter included 1,100 rooms at the Boston Marriott Copley Place, 891 rooms at the Westin Seattle and over 30,000 square feet of meeting and public space at the Swiss tel Chicago. The Company expects that renewal and replacement expenditures for 2012 will total approximately $310 million to $330 million.
On July 16, 2012, the Company acquired the 888-room Grand Hyatt Washington, D.C. for approximately comfort inn by the bay $400 million. The Grand Hyatt includes over 43,000 square feet of meeting space and is centrally located in the nation s capital, with easy access to historic monuments, museums and the convention center. The acquisition has been funded with available cash and a draw under the revolver portion of the Company s credit facility. The Company intends comfort inn by the bay to repay a portion of the revolver draw, as well as other debt, with proceeds from a five-year term loan currently under negotiation. The Company has received commitments from a number of banks and expects to raise approximately $400 million with a current floating interest rate of LIBOR plus 180 basis points (or approximately a 2.1% all-in interest rate). The Company expects the term loan to close by the end of July, subject to customary closing conditions.
During the quarter, the Company continued comfort inn by the bay to actively pursue its strategy of extending its debt maturities and lowering its overall cost of debt. On June 7, 2012 the Company entered comfort inn by the bay into a $100 million mortgage loan secured by the Hyatt Regency Reston and due in 2016, with an additional one-year extension comfort inn by the bay at the Company s option, subject to meeting certain financial covenants. The loan bears interest at a rate of 1-month LIBOR plus 310 basis points (3.34% at June 15, 2012). Using these proceeds and proceeds from $650 million of senior notes issued last year and in the first quarter for a weighted comfort inn by the bay average interest rate of 5.3% and available cash, the Company repaid or redeemed approximately $1 billion of debt during the quarter, with an average GAAP interest rate of 6.8%.
After taking into consideration the acquisition of the Grand Hyatt and the related revolver and expected term loan financing and use of proceeds to repay approximately $400 million of debt, the Company would have approximately $760 million of availability under its credit facility, approximately $150 million of cash and cash equivalents and total debt of approximately $5.3 billion.
During the second quarter of 2012, the Company issued approximately comfort inn by the bay 3.1 million shares of common stock at an average price of $15.75 per share, for net proceeds of approximately $48 million. These sales were made in at-the-market offerings pursuant to April 2012 Sales Agency Financing Agreements with BNY Mellon Capital Markets, LLC and Scotiabank, which had an initial aggregate offering price of $400 million. There is approximately $350 million of issuance capacity remaining under the agreements.
On June 18, 2012, the Company s board of directors authorized a regular comfort inn by the bay quarterly cash dividend of $.07 per share on its common stock. The dividend was paid on July 16, 2012 to stockholders of record on June 29, 2012. The amount of any future dividend is dependent on the Company s taxable income and will be determined by the Company s Board of Directors.
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