Ashford Hospitality Trust Reports First Quarter Results

Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the first quarter ended March 31, 2008. The proforma performance measurements for Occupancy, Average Daily Rate (ADR), revenue per available room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) include the Company's 109 hotels owned and included in continuing operations as of March 31, 2008, which excludes 1 hotel asset as of that date. Unless otherwise stated, all reported results compare the first quarter ended March 31, 2008, with the first quarter ended March 31, 2007. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release. FINANCIAL HIGHLIGHTS Total revenue increased 111.4% to $314.5 million from $148.7 million Net loss available to common shareholders was $833,000, or $0.01 per diluted share Adjusted funds from operations (AFFO) increased 39.6% to $39.9 million AFFO per diluted share was $0.29 Cash available for distribution (CAD) increased 26.7% to $30.6 million CAD per diluted share was $0.22 Declared quarterly common dividend of $0.21 per diluted share AFFO Dividend coverage was 136% for the quarter CAD Dividend coverage was 105% STRONG INTERNAL GROWTH Proforma RevPAR increased 2.6% for hotels not under renovation on a 3% increase in ADR to $145.53 and a 26-basis point decline in occupancy Proforma RevPAR increased 0.8% for all hotels on a 3.3% increase in ADR to $147.43 and a 168-basis point decline in occupancy Proforma Hotel Operating Profit for hotels not under renovation improved 6.5% Proforma Hotel Operating Profit margin for hotels not under renovation improved 80 basis points CAPITAL RECYCLING AND ASSET ALLOCATION Capex invested in the first quarter totaled $32.6 million Two hotels and one office building sold in the first quarter for $81 million One hotel under contract for sales price of $78 million PORTFOLIO REVPAR GROWTH As of March 31, 2008, the Company had a portfolio of direct hotel investments consisting of 109 properties classified in continuing operations. During the first quarter, 96 of the hotels included in continuing operations were not under renovation. The Company believes reporting its operating metrics for continuing operations on a proforma total basis (all 109 hotels) and proforma not-under-renovation basis (96 hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its direct hotel portfolio. The Company's reporting by region and brand includes the results of all 109 hotels in continuing operations. Details of each category are provided in the tables attached to this release. RevPAR growth by region was led by: New England (4 hotels) with 13.8%; Canada (1) with 10.4% ; East South Central (2) with 5.9%; West South Central (11) with a 4.3% increase; Mountain (8) with 2.2%; Middle Atlantic (10) with 1.2%; Pacific (22) with 0.5%; South Atlantic (38) with 0.4% decrease; East North Central (10) with 1.4% decrease; and West North Central (3) with 4.6% decrease. RevPAR growth by brand was led by: Radisson (2 hotels) with 4.6%; Marriott (57) with 4.1%; Hyatt (4) with 0.9%; Hilton (35) with 1.0% decrease; Starwood (7) with 3.5% decrease; InterContinental (2) with 4.5% decrease; and independents (2) with 45.9% decrease. HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS For the 96 hotels as of March 31, 2008 that were not under renovation, Proforma Hotel EBITDA (adjusted as if all hotels were included throughout both periods) increased 6.5% to $80.4 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 80 basis points to 30.0%. For all 109 hotels included in continuing operations as of March 31, 2008, Proforma Hotel EBITDA increased 0.4% to $88.9 million and Hotel EBITDA margin decreased 37 basis points to 28.2%. Ashford believes year-over-year Hotel EBITDA and Hotel EBITDA margin comparisons are more meaningful to gauge the performance of the Company’s hotels than sequential quarter-over-quarter comparisons. Given the substantial seasonality in the Company’s portfolio and its active capital recycling, to help investors better understand this seasonality, the Company provides quarterly detail on its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and certain prior-year periods based upon the number of core hotels in the portfolio as of the end of the current period. As Ashford’s portfolio mix changes from time to time so will the seasonality for Proforma Hotel EBITDA and Proforma Hotel EBITDA margin. The details of the quarterly calculations for the previous four quarters for the current portfolio of 109 hotels included in continuing operations are provided in the tables attached to this release. Monty J. Bennett, President and CEO, commented, "In the lodging industry today we see RevPAR growth continuing to slow due to economic headlines weighing heavily on both business and leisure travelers. Historically a weaker seasonality period for our portfolio, the first quarter comparisons also suffered from a shift of the Easter holiday to March this year compared to April last year. However, we were still able to execute our contingency plans to deliver positive RevPAR and operating margin growth for our hotels not under renovation." CAPITAL STRUCTURE On March 12, 2008, the Company executed a five-year swap on $1.8 billion of fixed-rate debt at a weighted average interest rate of 5.84% for a floating interest rate of LIBOR plus 264 basis points, or an equivalent savings of 34 basis points assuming the March 12 LIBOR rate of 2.86%. In conjunction with the swap execution, Ashford sold a five-year LIBOR floor notional amount of $1.8 billion at 1.25% and purchased a LIBOR cap notional amount of $1 billion at 3.75% for the first three years. The net upfront cost of the swap, LIBOR cap, and floor transactions was approximately $4.6 million and was capitalized as an asset on the Balance Sheet. The unrealized change in market value of this transaction will be reflected in the Statement of Operations each quarter. The Company will continue to monitor additional interest rate cap transactions as conditions warrant. At March 31, 2008, the Company's net debt (defined as total debt less unrestricted cash) to total gross assets (defined as un-depreciated investment in hotel property plus notes receivable) was 61.5%. Following the $1.8 billion interest rate swap, the Company’s $2.7 billion debt balance, as of March 31, 2008, consisted of 89% of floating-rate debt, with a total weighted average interest rate of 5.19%. The Company’s weighted average debt maturity including extension options is 6.5 years. FIRST QUARTER INVESTMENT ACTIVITY On January 2, 2008, the Company originated a $7.1 million mezzanine loan secured by an interest in the Hotel La Jolla in La Jolla, California. Maturing January 2011, the loan bears interest at a rate of 900 basis points over LIBOR, with interest-only payments through maturity. On January 11, 2008, the Company sold its JW Marriott in New Orleans, Louisiana, for approximately $67.5 million. As the Company acquired this property on April 11, 2007, no gain or loss will be recognized on this sale. In connection with this sale, the buyer assumed approximately $43.5 million mortgage debt, payable at an 8.08% interest rate, due August 1, 2010. On January 22, 2008, the Company formed a joint venture with Prudential Real Estate Investors ("PREI”) to invest in structured debt and equity hotel investments in the United States. The joint venture, which is expected to be funded over the next two years, will ultimately be capitalized with $300 million from investors in a fund managed by PREI and $100 million from the Company. The Company and PREI will contribute the capital required for each mezzanine investment on a 25%/75% basis, respectively. The joint venture has currently funded $91.4 million of mezzanine investments. The Company will be entitled to annual management and sourcing fees, reimbursement of expenses, and a promoted yield equal to a current 1.3x the venture yield subject to maximum threshold limitations, but further enhanced by an additional promote based upon a total net return to PREI. PREI’s equity will be in a senior position on each investment. With limited exceptions, the joint venture will be the primary vehicle for the Company’s hotel lending efforts. The joint venture will have the right of first refusal on all mezzanine investment opportunities presented by the Company, provided the investment meets certain criteria. On February 6, 2008, PREI acquired a 75% interest in the Company’s $21.5 million Westin Tucson and Westin Hilton Head mezzanine loan receivable, which the Company originated December 5, 2007, and matures January 2018. On February 6, 2008, the Company acquired a $38.0 million mezzanine loan secured by the Ritz-Carlton Key Biscayne in Miami, Florida, for approximately $33.0 million. Maturing in June 2017, the loan bears interest at a rate of 9.66% at par with an expected yield to the maturity to the Company of approximately 12.5%. This loan is wholly owned by the Company. On February 14, 2008, the Company’s joint venture with PREI acquired a senior mezzanine loan secured by a 29-hotel portfolio of full- and select-service hotels related to the JER Partners acquisition of Highland Hospitality. The Company’s 25% of the joint venture investment equals $17.5 million and is priced to yield approximately 18.3% based upon the purchase price discount to par, the forward LIBOR curve through the initial maturity of the loan, and the joint venture promote. On February 29, 2009, the Company sold its building held for sale in Fort Worth, Texas for approximately $4.1 million. On March 25, 2008, the Company sold its Sheraton Iowa City Hotel in Iowa City, Iowa, for approximately $9.5 million. SUBSEQUENT INVESTMENT ACTIVITY On March 26, 2008, the Company placed under contract its Hyatt Dulles Airport in Herndon, Virginia, for a sales price of $78 million. Accordingly this property was reclassified to Discontinued Operations. The transaction is expected to close in June 2008. INVESTMENT OUTLOOK Mr. Bennett concluded, "We remain focused on two core strategies. The first is to enhance dividend coverage by growing EBITDA and swapping our debt to floating rate during these tougher economic times. We look to grow EBITDA by implementing our hotel asset contingency plans to cut costs, appealing all property tax assessments, locking down our insurance for two years, and continuing to lock down energy costs for 18 – 24 months. The second strategy involves capital allocation. We continue to harvest or preserve capital by selling hotel assets, cutting back on discretionary capex programs, and creating joint ventures while deploying capital into debt reduction, share buybacks, and mezzanine investments. These strategies serve to protect the dividend while also improving our asset profile.” INVESTOR CONFERENCE CALL AND SIMULCAST Ashford Hospitality Trust, Inc. will conduct a conference call on Thursday, May 1, 2008, at 11:00 a.m. ET. The number to call for this interactive teleconference is (303) 262-2142. A replay of the conference call will be available through May 8, 2008, by dialing (303) 590-3000 and entering the confirmation number, 11111805#. The Company will also provide an online simulcast and rebroadcast of its first quarter 2008 earnings release conference call. The live broadcast of Ashford's quarterly conference call will be available online at the Company's website at www.ahtreit.com on Thursday, May 1, 2008, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for approximately one year. A direct link to the live broadcast can be found at: http://www.videonewswire.com/event.asp?id=47145. Substantially all of our non-current assets consist of real estate investments and debt investments secured by real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to assist in evaluating a real estate company's operations. These supplemental measures include FFO, AFFO, EBITDA, Hotel Operating Profit, and CAD. FFO is computed in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the NAREIT definition differently than us. Neither FFO, AFFO, EBITDA, Hotel Operating Profit, nor CAD represents cash generated from operating activities as determined by GAAP and should not be considered as an alternative to a) GAAP net income (loss) as an indication of our financial performance or b) GAAP cash flows from operating activities as a measure of our liquidity, nor are such measures indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, management believes FFO, AFFO, EBITDA, Hotel Operating Profit, and CAD to be meaningful measures of a REIT's performance and should be considered along with, but not as an alternative to, net income and cash flow as a measure of our operating performance. Ashford Hospitality Trust is a self-administered real estate investment trust focused on investing in the hospitality industry across all segments and at all levels of the capital structure, including direct hotel investments, first mortgages, mezzanine loans and sale-leaseback transactions. Additional information can be found on the Company's web site at www.ahtreit.com. Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the timing for closing, the impact of the transaction on our business and future financial condition, our business and investment strategy, our understanding of our competition and current market trends and opportunities and projected capital expenditures. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford's control. These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: general volatility of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford's filings with the Securities and Exchange Commission. EBITDA is defined as net income before interest, taxes, depreciation and amortization. EBITDA yield is defined as trailing twelve month EBITDA divided by the purchase price. A capitalization rate is determined by dividing the property's annual net operating income by the purchase price. Net operating income is the property's funds from operations minus a capital expense reserve of either 4% or 5% of gross revenues. Funds from operations ("FFO"), as defined by the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in April 2002, represents net income (loss) computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from sales or properties and extraordinary items as defined by GAAP, plus depreciation and amortization of real estate assets, and net of adjustments for the portion of these items related to unconsolidated entities and joint ventures. The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise. ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)         March 31, December 31, 2008 2007 (Unaudited)   ASSETS Investment in hotel properties, net $ 3,824,097 $ 3,885,737 Cash and cash equivalents 94,424 92,271 Restricted cash 46,735 52,872 Accounts receivable, net 63,968 51,314 Inventories 4,107 4,100 Assets held for sale 68,647 75,739 Notes receivable 112,462 94,225 Investment in unconsolidated joint venture 23,557 - Deferred costs, net 23,597 25,714 Prepaid expenses 18,655 20,223 Other assets 14,281 6,027 Intangible assets, net 3,144 13,889 Due from third-party hotel managers 55,991   59,505     Total assets $ 4,353,665   $ 4,381,616     LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Indebtedness $ 2,664,850 $ 2,639,546 Indebtedness related to assets held for sale 47,450 61,229 Capital leases payable 426 498 Accounts payable 50,254 55,177 Accrued expenses 68,768 69,519 Dividends payable 35,115 35,031 Deferred income 379 254 Deferred incentive management fees 3,514 3,557 Unfavorable management contract liabilities 22,832 23,396 Other liabilities 4,565 4,703 Due to third-party hotel managers 4,185 5,904 Due to related parties 3,356   2,732     Total liabilities 2,905,694   2,901,546     Minority interest in consolidated joint ventures 18,333 19,036 Minority interest in operating partnership 98,804 101,031 Series B Cumulative Convertible Redeemable Preferred stock, 7,447,865 issued and outstanding 75,000 75,000   Shareholders' Equity: Preferred stock, $0.01 par value, 50,000,000 shares authorized: Series A Cumulative Preferred Stock, 2,300,000 issued and outstanding 23 23 Series D Cumulative Preferred Stock, 8,000,000 issued and outstanding 80 80 Common stock, $0.01 par value, 200,000,000 shares authorized, 122,754,192 shares issued and 119,723,972 shares outstanding at March 31, 2008 and 122,765,691 shares issued and 120,376,055 shares outstanding at December 31, 2007     1,228 1,228 Additional paid-in capital 1,456,886 1,455,917 Accumulated other comprehensive loss (252 ) (115 ) Accumulated deficit (179,639 ) (153,664 ) Treasury stock, at cost (3,030,220 shares at March 31, 2008 and 2,389,636 shares at December 31, 2007) (22,492 ) (18,466 )   Total shareholders' equity 1,255,834   1,285,003     Total liabilities and owners' equity $ 4,353,665   $ 4,381,616   ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)         Three Months Ended March 31,   Ended 2008 2007 (Unaudited) REVENUE Rooms $ 225,602 $ 110,000 Food and beverage 69,511 30,136 Rental income from operating leases 1,347 - Other 14,253   4,923     Total hotel revenue 310,713 145,059 Interest income from notes receivable 3,255 3,355 Asset management fees and other 522   331     Total Revenue 314,490   148,745     EXPENSES Hotel operating expenses Rooms 50,488 24,306 Food and beverage 49,186 21,828 Other direct 7,742 2,321 Indirect 86,481 42,066 Management fees 12,093   5,337     Total hotel expenses 205,990 95,858   Property taxes, insurance, and other 16,227 7,769 Depreciation and amortization 45,570 16,237 Corporate general and administrative Stock-based compensation 1,609 1,059 Other general and administrative 6,095   3,535     Total Operating Expenses 275,491   124,458     OPERATING INCOME 38,999 24,287   Equity earnings in unconsolidated joint venture 526 - Interest income 546 498 Other income 296 - Interest expense (37,853 ) (15,140 ) Amortization of loan costs (1,768 ) (635 ) Write-off of loan costs and exit fees - (491 ) Unrealized gains (losses) on derivatives 4,049   (35 )   INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS 4,795 8,484 Income tax (expense) benefit (410 ) 1,148 Minority interests in earnings of consolidated joint ventures (67 ) - Minority interests in earnings of operating partnership (400 ) (1,442 )   INCOME FROM CONTINUING OPERATIONS 3,918 8,190 Income from discontinued operations, net 2,267   3,301     NET INCOME 6,185 11,491 Preferred dividends (7,018 ) (2,793 )   NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (833 ) $ 8,698     INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS PER SHARE: Basic - (Loss) income from continuing operations available to common shareholders $ (0.03 ) $ 0.07 Income from continuing operations 0.02   0.05     Net (loss) income available to common shareholders $ (0.01 ) $ 0.12   Diluted - (Loss) income from continuing operations available to common shareholders $ (0.03 ) $ 0.07 Income from continuing operations 0.02   0.05     Net (loss) income available to common shareholders $ (0.01 ) $ 0.12   Weighted Average Common Shares Outstanding: Basic 118,855   72,042   Diluted 118,855   72,449   ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO EBITDA (in thousands, except per share amounts and ratios)       Three Months Ended March 31, 2008 2007 (Unaudited)   Net income $ 6,185 $ 11,491   Interest income (546 ) (498 ) Interest expense and amortization of loan costs 40,590 16,738 Depreciation and amortization 46,326 17,196 Minority interest in earnings of operating partnership 631 1,827 Income tax expense (benefit) 410   (509 )   EBITDA $ 93,596   $ 46,245       NOTE: For the three months ended March 31, 2008, EBITDA has not been adjusted to deduct the amortization of the unfavorable management contract liabilities of $565,000, the gains on sales of properties of $889,000, the unrealized gains on derivatives of $4.0 million, and the write-off of loan costs, premiums and exit fees of $1.9 million.     RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS ("FFO") (in thousands)     Three Months Ended March 31, 2008 2007 (Unaudited)   Net income $ 6,185 $ 11,491 Preferred dividends (7,018 ) (2,793 )   Net (loss) income available to common shareholders (833 ) 8,698   Depreciation and amortization 45,298 17,116 Gains on sales of hotel properties, net of related income taxes (889 ) (1,388 ) Minority interest in earnings of operating partnership 631   1,827     FFO available to common shareholders 44,207 26,253   Dividends on convertible preferred stock 1,564 1,564 Write-off of loan costs, premiums and exit fees(1) (1,862 ) 703 Unrealized (gains) losses on derivatives (4,049 ) 35     Adjusted FFO $ 39,860   $ 28,555     Adjusted FFO per diluted share available to common shareholders $ 0.29   $ 0.31     Weighted average diluted shares 139,770   93,409     Dividend coverage 136 % 146 %     (1) For the three months ended March 31, 2008, the amount includes a write-off of debt premium of $2,086,000 at the sale of JW Marriott, New Orleans. As a result, it increased net income by that amount.   ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CASH AVAILABLE FOR DISTRIBUTION ("CAD") (in thousands, except per share amounts)             Three Months Per Three Months Per Ended Diluted Ended Diluted March 31, 2008 Share March 31, 2007 Share (Unaudited)   Net (loss) income available to common shareholders $ (833 ) $ (0.01 ) $ 8,698 $ 0.09 Dividends on convertible preferred stock 1,564   0.01   1,564   0.02     Total 731 0.01 10,262 0.11   Depreciation and amortization 45,298 0.32 17,116 0.18 Minority interest in earnings of operating partnership 631 0.00 1,827 0.02 Stock-based compensation 1,609 0.01 1,059 0.01 Amortization of loan costs 1,803 0.01 659 0.01 Write-off of loan costs, premiums and exit fees(1) (1,862 ) (0.01 ) 703 0.01 Amortization of unfavorable management contract liabilities (565 ) (0.00 ) (424 ) (0.00 ) Gains on sales of properties, net of related income taxes (889 ) (0.01 ) (1,388 ) (0.01 ) Unrealized (gains) losses on derivatives (4,049 ) (0.03 ) 35 0.00 Capital improvements reserve (12,099 ) (0.09 ) (5,687 ) (0.06 )   CAD $ 30,608   $ 0.22   $ 24,162   $ 0.26       (1) For the three months ended March 31, 2008, the amount includes a write-off of debt premium of $2,086,000 at the sale of JW Marriott, New Orleans. As a result, it increased net income by that amount. ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES DEBT SUMMARY MARCH 31, 2008 (dollars in thousands) (Unaudited)             Fixed-Rate Floating-Rate Total Debt Debt Debt   Mortgage loan secured by 25 hotel properties, matures between July 1, 2015 and February 1, 2016, at an average interest rate of 5.42%   $ 455,115 $ - $ 455,115 Term loan secured by 16 hotel properties, matures between December 11, 2014 and December 11, 2015, at an average interest rate of 5.73%   211,475 - 211,475 Secured credit facility, matures April 9, 2010, at an interest rate of LIBOR plus a range of 1.55% to 1.95% depending on the loan-to- value ratio, with two one-year extension options   - 140,000 140,000 Term loan secured by one hotel property, matures October 10, 2008, at an interest rate of LIBOR plus 2.0%, with three one-year three one-year extension options   - 47,450 47,450 Mortgage loan secured by one hotel property, matures December 1, 2017, at an interest rate of 7.39% 49,797 - 49,797 Mortgage loan secured by one hotel property, matures December 8, 2016, at an interest rate of 5.81% 101,000 - 101,000 Mortgage loan secured by five hotel properties, matures December 11, 2009, at an interest rate of LIBOR plus 1.72%, with two one-year extension options   - 168,400 168,400 Mortgage loan secured by 28 hotel properties, matures April 11, 2017, at an average blended interest rate of 5.95% 928,465 - 928,465 Loan secured by 13 hotel, matures May 9, 2009, at an interest rate of LIBOR plus 1.65%, with three one-year extension options - 213,889 213,889 Mortgage loans secured by 15 hotel properties, mature between 2008 and 2018, with an average blended interest rate of 5.86% 360,341   -   360,341     Total Debt Excluding Premium $ 2,106,193   $ 569,739   2,675,932   Mark-to-Market Premium 1,584 Plus Debt Attributable to Joint Venture Partners 34,784     Total Debt Including Premium $ 2,712,300     Percentage 78.7 % 21.3 % 100.0 %   Weighted average interest rate at March 31, 2008 5.52 %   Total with the effect of interest rate swap at March 31, 2008 $ 306,193   $ 2,369,739   $ 2,675,932     Percentage with the effect of interest rate swap at March 31, 2008 11.4 % 88.6 % 100.0 %   Weighted average interest rate with the effect of interest rate swap at March 31, 2008 5.19 % ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA (Unaudited)         Three Months Ended March 31, 2008 2007 % Variance   ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:   Room revenues (in thousands) $ 230,489 $ 226,959 1.56 % RevPAR $ 102.33 $ 101.50 0.82 % Occupancy 69.41 % 71.09 % -1.68 % ADR $ 147.43 $ 142.78 3.26 %     NOTE: The above pro forma table assumes the 109 hotel properties owned and included in continuing operations at March 31, 2008 were owned as of the beginning of period presented.     Three Months Ended March 31, 2008 2007 % Variance   ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:   Room revenues (in thousands) $ 196,081 $ 189,687 3.37 % RevPAR $ 102.85 $ 100.24 2.60 % Occupancy 70.67 % 70.93 % -0.26 % ADR $ 145.53 $ 141.32 2.98 %     NOTE: The above pro forma table assumes the 96 hotel properties owned and included in continuing operations at March 31, 2008 but not under renovation for the three months ended March 31, 2008 were owned as of the beginning of the periods presented.   Excluded Hotels Under Renovation: Sea Turtle Inn Jacksonville, Marriott at RTP Durham, JW Marriott San Francisco, Marriott Gateway Arlington, Sheraton San Diego Mission Valley, Hilton Minneapolis Airport, Embassy Suites Philadelphia Airport, Embassy Suites Walnut Creek, Sheraton Hotel Anchorage, Embassy Suites Santa Clara, Courtyard by Marriott Basking Ridge, TownePlace Suites by Marriott Manhattan Beach, Courtyard by Marriott San Francisco   OTHER NOTE: As the Company's Courtyard by Marriott hotel in Philadephia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, the above pro forma tables, all room revenues related to this hotel are reflected, which is consistent with the Company's other hotels. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT (dollars in thousands) (Unaudited)         ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:   Three Months Ended March 31, 2008 2007 % Variance REVENUE Rooms $ 230,489 $ 226,959 1.6 % Food and beverage 70,225 67,594 3.9 % Other 14,316 15,004 -4.6 % Total hotel revenue 315,030 309,557 1.8 %   EXPENSES Rooms 51,571 50,793 1.5 % Food and beverage 49,748 49,617 0.3 % Other direct 7,804 7,769 0.5 % Indirect 86,832 82,552 5.2 % Management fees, includes base and incentive fees 13,708 13,517 1.4 % Total hotel operating expenses 209,663 204,248 2.7 % Property taxes, insurance, and other 16,496 16,830 -2.0 % HOTEL OPERATING PROFIT (Hotel EBITDA) 88,871 88,479 0.4 % Minority interest in earnings of consolidated joint ventures 1,754 1,657 5.9 % HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures $ 87,117 $ 86,822 0.3 %     NOTE: The above pro forma table assumes the 109 hotel properties owned and included in continuing operations at March 31, 2008 were owned as of the beginning of the periods presented.     ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:   Three Months Ended March 31, 2008 2007 % Variance REVENUE Rooms(1) $ 196,081 $ 189,687 3.4 % Food and beverage 58,959 55,400 6.4 % Other 12,645 13,088 -3.4 % Total hotel revenue 267,685 258,175 3.7 %   EXPENSES Rooms(1) 42,772 41,782 2.4 % Food and beverage 40,849 40,356 1.2 % Other direct 6,713 6,702 0.2 % Indirect 70,962 68,723 3.3 % Management fees, includes base and incentive fees 12,053 11,043 9.1 % Total hotel operating expenses 173,349 168,606 2.8 % Property taxes, insurance, and other 13,962 14,109 -1.0 % HOTEL OPERATING PROFIT (Hotel EBITDA) 80,374 75,460 6.5 % Minority interest in earnings of consolidated joint ventures 1,754 1,657 5.9 % HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures $ 78,620 $ 73,803 6.5 %     (1) The above pro forma table assumes the 96 hotel properties owned and included in continuing operations at March 31, 2008 but not under renovation during the three months ended March 31, 2008 were owned as of the beginning of the periods presented.   NOTE: As the Company’s Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma tables, all operating results related to this hotel are reflected, which is consistent with the Company's other hotels. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL REVPAR BY REGION (Unaudited)               Three Months Ended Number of Number of March 31, Region Hotels Rooms 2008 2007 % Change   Pacific(1) 22 5,864 $ 110.43 $ 109.85 0.5 % Mountain(2) 8 1,704 $ 127.24 $ 124.47 2.2 % West North Central(3) 3 690 $ 79.43 $ 83.24 -4.6 % West South Central(4) 11 2,586 $ 105.38 $ 101.01 4.3 % East North Central(5) 10 2,624 $ 72.68 $ 73.70 -1.4 % East South Central(6) 2 236 $ 89.91 $ 84.90 5.9 % Middle Atlantic(7) 10 2,669 $ 89.00 $ 87.91 1.2 % South Atlantic(8) 38 7,727 $ 113.35 $ 113.77 -0.4 % New England(9) 4 458 $ 62.41 $ 54.85 13.8 % Canada 1 607 $ 56.41 $ 51.10 10.4 %           Total Portfolio 109 25,165 $ 102.33 $ 101.50 0.8 %     (1) Includes Alaska and California (2) Includes Nevada, Arizona, New Mexico, and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio, Illinois, and Indiana (6) Includes Kentucky and Alabama (7) Includes New York and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts     OTHER NOTES: (1) The above pro forma table assumes the 109 hotel properties owned and included in continuing operations as of March 31, 2008 were owned as of the beginning of the periods presented. (2) As the Company's Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma table, all room revenues related to this hotel are reflected, which is consistent with the Company's other hotels. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL REVPAR BY BRAND (Unaudited)               Three Months Ended Number of Number of March 31, Brand Hotels Rooms 2008 2007 % Change   Hilton 35 8,012 $ 111.98 $ 113.09 -1.0 % Hyatt 4 2,275 $ 92.65 $ 91.80 0.9 % InterContinental 2 420 $ 163.12 $ 170.75 -4.5 % Independent 2 317 $ 34.96 $ 64.67 -45.9 % Marriott 57 11,713 $ 104.79 $ 100.70 4.1 % Radisson 2 315 $ 47.05 $ 44.98 4.6 % Starwood 7 2,113 $ 68.55 $ 71.00 -3.5 %           Total Portfolio 109 25,165 $ 102.33 $ 101.50 0.8 %     NOTES: (1) The above pro forma table assumes the 109 hotel properties owned and included in continuing operations as of March 31, 2008 were owned as of the beginning of the periods presented. (2) As the Company's Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma table, all room revenues related to this hotel are reflected, which is consistent with the Company's other hotels. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT BY REGION (dollas in thousands) (Unaudited)                   Three Months Ended Number of Number of March 31, Region Hotels Rooms 2008   %Total 2007   %Total %Change   Pacific(1) 22 5,864 $ 24,190 27.2 % $ 23,733 26.8 % 1.9 % Mountain(2) 8 1,704 9,999 11.3 % 10,007 11.3 % -0.1 % West North Central(3) 3 690 1,937 2.2 % 2,191 2.5 % -11.6 % West South Central(4) 11 2,586 11,116 12.5 % 9,936 11.2 % 11.9 % East North Central(5) 10 2,624 4,940 5.6 % 4,574 5.2 % 8.0 % East South Central(6) 2 236 830 0.9 % 811 0.9 % 2.3 % Middle Atlantic(7) 10 2,669 5,074 5.7 % 5,933 6.7 % -14.5 % South Atlantic(8) 38 7,727 32,005 36.0 % 32,366 36.6 % -1.1 % New England(9) 4 458 178 0.2 % 57 0.1 % 212.3 % Canada 1 607 (1,398 ) -1.6 % (1,129 ) -1.3 % 23.8 %               Total Portfolio 109 25,165 $ 88,871   100.0 % $ 88,479   100.0 % 0.4 %     (1) Includes Alaska and California (2) Includes Nevada, Arizona, New Mexico, and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio, Illinois, and Indiana (6) Includes Kentucky and Alabama (7) Includes New York and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts     OTHER NOTES: (1)   The above pro forma table assumes the 109 hotel properties owned and included in continuing operations as of March 31, 2008 were owned as of the beginning of the periods presented. (2) As the Company’s Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma table, all operating results related to this hotel are reflected, which is consistent with the Company's other hotels. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT MARGIN (Unaudited)     96 HOTELS NOT UNDER RENOVATION AND INCLUDED IN CONTINUING OPERATIONS AT MARCH 31, 2008 AS IF SUCH HOTELS WERE OWNED AS OF THE BEGINNING OF THE PERIODS PRESENTED:     HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:   1st Quarter 2008 30.03% 1st Quarter 2007 29.23% Variance 0.80%   HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:   Rooms 0.24% Food & Beverage and Other Departmental 0.46% Administrative & General 0.04% Sales & Marketing -0.15% Hospitality -0.03% Repair & Maintenance 0.05% Energy 0.18% Franchise Fee -0.20% Management Fee 0.00% Incentive Management Fee -0.22% Insurance 0.20% Property Taxes 0.05% Leases/Other 0.19% Total 0.80%     NOTE: As the Company’s Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma table, all operating results related to this hotel are reflected, which is consistent with the Company’s other hotels. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA SEASONALITY TABLE (dollars in thousands) (Unaudited)               ALL 109 HOTELS OWNED AND INCLUDED IN CONTINUING OPERATIONS AS OF MARCH 31, 2008:     2008 2007 2007 2007 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter TTM   Total Hotel Revenue $ 315,030 $ 337,211 $ 308,924 $ 342,989 $ 1,304,154 Hotel EBITDA $ 88,871 $ 104,062 $ 82,278 $ 91,820 $ 367,031 Hotel EBITDA Margin 28.2 % 30.9 % 26.6 % 26.8 % 28.1 %   EBITDA % of Total TTM 23.8 % 27.8 % 22.0 % 24.5 % 100.0 %   JV Interests in EBITDA $ 1,754 $ 2,330 $ 1,577 $ 1,567 $ 7,228     NOTES: (1) The above pro forma table assumes that the 109 hotel properties owned and included in continuing operations as of March 31, 2008 were owned as of the beginning of the periods presented. (2) As the Company’s Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro-forma table, all operating results related to this hotel are reflected, which is consistent with the Company's other hotels. ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 109 Core Hotels(a)                                     2007   2008 Actual   Actual   Actual   Actual   Actual   Estimated   Estimated   Estimated Rooms   1st Quarter   2nd Quarter   3rd Quarter   4th Quarter   1st Quarter   2nd Quarter   3rd Quarter   4th Quarter   Residence Inn Evansville 78 x SpringHill Suites BWI Airport 133 x SpringHill Suites Centreville 136 x SpringHill Suites Gaithersburg 162 x Courtyard Overland Park 168 x Hilton Santa Fe 157 x Hilton Garden Inn Jacksonville 119 x Marriott at Research Triangle Park 225 x x x Marriott Crystal Gateway 697 x x x x Sea Turtle Inn Jacksonville 193 x x x x x x Sheraton City Center - Indianapolis 371 x x x JW Marriott San Francisco 338 x x x x x Embassy Suites Las Vegas Airport 220 x Homewood Suites Mobile 86 x x Residence Inn Lake Buena Vista 210 x x Embassy Suites Walnut Creek 249 x x x Embassy Suites Philadelphia Airport 263 x x x x Residence Inn Jacksonville 120 x Hilton Tucson El Conquistador Golf Resort 428 x x x Sheraton San Diego Mission Valley 260 x x Hilton Minneapolis Airport 300 x x x Courtyard San Francisco Downtown 405 x Courtyard Basking Ridge 235 x TownePlace Suites Manhattan Beach 144 x Embassy Suites Santa Clara - Silicon Valley 257 x x Sheraton Anchorage 375 x x x Hampton Inn Jacksonville 118 x x Hampton Inn Houston Galleria 150 x x Hampton Inn Lawrenceville 86 x x Hilton Dallas - Lincoln Centre 500 x x Embassy Suites West Palm Beach 160 x x Marriott Legacy Center 404 x x Hyatt Regency Coral Gables 242 x x Courtyard Ft. Lauderdale Weston 174 x x Doubletree Suites Columbus 194 x Hilton Rye Town 446 x Hyatt Regency Orange County 654 x Courtyard Louisville Airport 150 x SpringHill Suites Manhattan Beach 164 x SpringHill Suites Charlotte 136 x SpringHill Suites Raleigh Airport 120 x SpringHill Suites Mall of Georgia 96 x SpringHill Suites Richmond 136 x Hilton Nassau Bay - Clear Lake 243 x Hilton Costa Mesa 486 x Courtyard Edison 146 x SpringHill Suites Philadelphia 199 x Capital Hilton 408                               x       (a) Only hotels which have had or are expected to have significant capital expenditures during 2007 or 2008 are included in this table. This table excludes a possible $50.0 million related to ROI projects.