Ashford Hospitality Trust Reports Second Quarter Results

Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the second quarter ended June 30, 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 105 hotels owned and included in continuing operations as of June 30, 2008. Unless otherwise stated, all reported results compare the second quarter ended June 30, 2008, with the second quarter ended June 30, 2007. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release. FINANCIAL HIGHLIGHTS Total revenue increased 8.2% to $318.4 million from $294.3 million Net loss available to common shareholders was $33.5 million, or $0.28 per diluted share, compared with net income of $14.1 million in the prior-year quarter Adjusted funds from operations (AFFO) increased 3.3% to $57.2 million AFFO per diluted share was $0.41 Cash available for distribution (CAD) increased 4.4% to $46.1 million CAD per diluted share was $0.33 Declared quarterly common dividend of $0.21 per diluted share AFFO dividend coverage was 194% for the quarter CAD dividend coverage was 156% Sole debt maturity in 2008 refinanced. Debt maturities due in 2009 totals $30M STRONG INTERNAL GROWTH Proforma RevPAR increased 2.0% for hotels not under renovation on a 2.3% increase in ADR to $142.16 and a 18-basis point decline in occupancy Proforma RevPAR increased 0.9% for all hotels on a 2.6% increase in ADR to $145.11 and a 134-basis point decline in occupancy Proforma Hotel Operating Profit for hotels not under renovation improved 4.8% Proforma Hotel Operating Profit margin for hotels not under renovation improved 95 basis points CAPITAL RECYCLING AND ASSET ALLOCATION Capex invested in the second quarter totaled $44 million Three hotels sold in the second quarter for $208 million in proceeds Two additional hotels sold in third quarter for $21 million in proceeds PORTFOLIO REVPAR GROWTH As of June 30, 2008, the Company had a portfolio of direct hotel investments consisting of 105 properties classified in continuing operations. During the second quarter, 97 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 105 hotels) and proforma not-under-renovation basis (97 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 105 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 (2 hotels) with 5.6%; East North Central (10) with 5.4%; East South Central (2) with 4.9%; West South Central (10) with 2.7%; South Atlantic (38) with 1.5%; Mountain (8) with 0.1%; Pacific (22) with a 0.3% decrease; West North Central (3) with a 2.4% decrease and Middle Atlantic (10) with a 2.5% decrease. RevPAR growth by brand was led by: Radisson (1 hotel) with 5.9%; Hyatt (3) with 5.6%; Starwood (6) with 1.8%; Hilton (34) with 1.6%; Marriott (57) with 0.0%; InterContinental (2) with a 0.2% decrease and Independents (2) with a 19.4% decrease. HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS For the 97 hotels as of June 30, 2008 that were not under renovation, Proforma Hotel EBITDA (adjusted as if all hotels were included throughout both periods) increased 4.8% to $91.4 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 95 basis points to 32.5%. For all 105 hotels included in continuing operations as of June 30, 2008, Proforma Hotel EBITDA increased 1.6% to $101.0 million and Hotel EBITDA margin improved 33 basis points to 31.6%. 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 105 hotels included in continuing operations are provided in the tables attached to this release. Monty J. Bennett, President and CEO, commented, "We are pleased with the performance of our portfolio in this challenging market. Despite the hotel industry decelerating RevPAR trends, we were able to generate a 2.0% increase in RevPAR and a 4.8% increase in EBITDA, while improving our EBITDA margin by 95 basis points for the 97 hotels not under renovation. Our strategy to enhance cash flow with property and enterprise-level contingency plans and aggressive management of fixed costs should help us navigate what is expected to be a difficult second half of the year in the lodging industry." CAPITAL STRUCTURE On June 25, 2008, the Company refinanced its sole debt maturity in 2008, a $73.1 million loan with MetLife that was secured by interests in the Hilton Tucson El Conquistador Golf Resort in Tucson, Arizona, and the Hilton Dallas Lincoln Centre in Dallas. The new $53.4 million interest only loan, which can be prepaid without penalty, has an interest rate of 200 basis points over LIBOR and matures in July 2011. The loan was subsequently paid down by $33.7 million in conjunction with the sale of the Hilton Dallas Lincoln Centre. On August 6, 2008, the Company refinanced its major debt maturity in 2009, a loan with Prudential that was secured by interests in the Capital Hilton and the Hilton Torrey Pines. These two assets are owned in a joint venture between Ashford and Hilton. The gross principal outstanding was $127.2 million, with Ashford’s share being $95.4 million. The new $160.0 million loan has an interest rate of 275 basis points over LIBOR and is for a three year term with two one-year extension options. The excess proceeds will be used to fund future renovations of the two hotels. The company’s only remaining debt maturity for 2009 is a $30M loan secured by the Hyatt Dearborn. At June 30, 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 58.7%. The Company’s $2.5 billion debt balance as of June 30, 2008, consisted of 91% of floating-rate debt, with a total weighted average interest rate of 4.99%. The Company’s weighted average debt maturity including extension options is 6.6 years. The Company currently has no debt maturing in 2008, $30 million maturing in 2009 and $75 million maturing in 2010. SECOND QUARTER INVESTMENT ACTIVITY On June 9, 2008, the Company sold the Hyatt Dulles Airport in Herndon, Virginia, for $78 million and on June 17, 2008 the Hyatt Regency Montreal in Montreal, Quebec for $57.5 million. On June 26, 2008, the Company closed on the sale of the Hilton Dallas Lincoln Centre in Dallas for $72.25 million. Combined, the three transactions represented a sales price of $146,000 per key, a 6.8% trailing 12-month NOI cap rate, and a 11.7x trailing 12-month EBITDA multiple. SUBSEQUENT INVESTMENT ACTIVITY On July 14, 2008, the Company acquired a mezzanine loan participation secured by interests in 681 extended-stay hotels purchased by affiliates of Lightstone Group and Arbor Realty Trust. The loan participation, which is part of a $400 million mezzanine loan tranche, was acquired for $98.4 million and had a face value of $164 million and an interest rate of 250 basis points over LIBOR at par. Ashford’s investment is priced to yield approximately 23.9% based upon the purchase price discount to par and the forward LIBOR curve through the final maturity of the loan (initial maturity in June 2009 and all three one-year extension options). The loan can be prepaid at anytime. Financing on the portfolio includes $6 billion in first mortgage and mezzanine financing senior to the $400 million tranche in which Ashford is participating, $1 billion in mezzanine financing junior to Ashford’s position, and $600 million in equity, which is also junior to Ashford’s position. Based on trailing 12-month net cash flow from the portfolio, the debt service coverage ratio at closing through Ashford’s position is approximately 1.63x, and Ashford’s investment in the capital structure is approximately 75% to 80% loan to cost, or $82,142 per key. On July 23, 2008, the Company sold two other assets: the Radisson Hotel in Rockland, Massachusetts, and the Sheraton Milford in Milford, Massachusetts, for a combined $20.9 million that equates to $70,000 per key and a 5.1% trailing 12 month cap rate, and a 17.5x trailing 12-month EBITDA multiple. Mr. Bennett concluded, "The execution of our capital allocation strategy has hit the mark in the first half of the year with $310 million of asset sales completed. The proceeds have given us the flexibility to enhance our growth through mezzanine lending, debt paydowns, capital expenditures or share repurchases. We have already refinanced our sole debt maturity for 2008 and are in good shape to address our 2009 maturities in the very near future. With the diversity of options available to us from our capital recycling alternatives, we see several ways to enhance shareholder value in the near term.” INVESTOR CONFERENCE CALL AND SIMULCAST Ashford Hospitality Trust, Inc. will conduct a conference call on Thursday, August 7, 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 August 15, 2008, by dialing (303) 590-3000 and entering the confirmation number, 11111806#. The Company will also provide an online simulcast and rebroadcast of its second 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, August 7, 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=49196. 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, second 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)     June 30, December 31, 2008 2007 (Unaudited) ASSETS Investment in hotel properties, net $ 3,688,913 $ 3,885,737 Cash and cash equivalents 112,524 92,271 Restricted cash 50,733 52,872 Accounts receivable, net 62,475 51,314 Inventories 3,943 4,100 Assets held for sale 11,908 75,739 Notes receivable 113,030 94,225 Investment in unconsolidated joint venture 24,917 - Deferred costs, net 22,507 25,714 Prepaid expenses 16,601 20,223 Other assets 8,692 6,027 Intangible assets, net 3,122 13,889 Due from third-party hotel managers   51,030     58,300     Total assets $ 4,170,395   $ 4,380,411     LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Indebtedness - continuing operations $ 2,540,906 $ 2,639,546 Indebtedness - discontinued operations 11,134 61,229 Capital leases payable 291 498 Accounts payable and accrued expenses 106,354 124,696 Dividends payable 35,178 35,031 Unfavorable management contract liabilities 22,267 23,396 Due to related parties 793 2,732 Due to third-party hotel managers 8,324 4,699 Interest rate derivatives 47,299 - Other liabilities   8,287     8,514     Total liabilities   2,780,833     2,900,341     Minority interests in consolidated joint ventures 21,809 19,036 Minority interests in operating partnership 93,985 101,031 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 shares issued and outstanding 23 23 Series D Cumulative Preferred Stock, 8,000,000 shares issued and outstanding 80 80 Common stock, $0.01 par value, 200,000,000 shares authorized, 122,754,192 shares issued and 119,739,972 shares outstanding at June 30, 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 1,458,262 1,455,917 Accumulated other comprehensive loss (149 ) (115 ) Accumulated deficit (238,307 ) (153,664 ) Treasury stock, at cost (3,014,220 shares at June 30, 2008 and 2,389,636 shares at December 31, 2007)   (22,369 )   (18,466 )   Total shareholders' equity   1,198,768     1,285,003     Total liabilities and owners' equity $ 4,170,395   $ 4,380,411     ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)         Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 (Unaudited) REVENUE Rooms $ 231,296 $ 213,034 $ 448,165 $ 321,818 Food and beverage 67,305 63,585 131,706 93,111 Rental income from operating leases 1,526 1,184 2,872 1,184 Other   14,094     13,324     27,440     18,213     Total hotel revenue 314,221 291,127 610,183 434,326 Interest income from notes receivable 3,216 2,866 6,472 6,221 Asset management fees and other   921     331     1,442     663     Total Revenue   318,358     294,324     618,097     441,210     EXPENSES Hotel operating expenses Rooms 49,901 46,304 97,510 70,297 Food and beverage 45,872 44,007 90,907 65,356 Other direct 7,548 6,927 14,697 9,214 Indirect 82,334 75,572 164,056 116,601 Management fees   12,142     10,950     23,783     16,217     Total hotel expenses 197,797 183,760 390,953 277,685   Property taxes, insurance, and other 16,802 15,184 32,047 22,972 Depreciation and amortization 40,077 50,075 84,121 66,055 Corporate general and administrative: Stock-based compensation 1,860 1,907 3,469 2,966 Other general and administrative   6,505     5,241     12,600     8,775     Total Operating Expenses   263,041     256,167     523,190     378,453     OPERATING INCOME 55,317 38,157 94,907 62,757   Equity in earnings of unconsolidated joint venture 1,287 - 1,813 - Interest income 351 975 897 1,473 Other income 2,569 - 2,865 - Interest expense (36,442 ) (37,402 ) (73,700 ) (52,541 ) Amortization of loan costs (1,648 ) (1,720 ) (3,355 ) (2,328 ) Write-off of loan costs and exit fees - (3,585 ) - (4,075 ) Unrealized (losses)/gains on derivatives   (55,438 )   66     (51,389 )   31     (LOSS) INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS (34,004 ) (3,509 ) (27,962 ) 5,317 Income tax (expense)/benefit (319 ) 162 (729 ) 1,156 Minority interests in (earnings)/losses of consolidated joint ventures (2,718 ) 523 (2,784 ) 523 Minority interests in losses/(earnings) of operating partnership   2,891     137     2,351     (1,298 )   (LOSS)/INCOME FROM CONTINUING OPERATIONS (34,150 ) (2,687 ) (29,124 ) 5,698 Income from discontinued operations, net   7,646     23,771     8,805     26,877     NET (LOSS)/INCOME (26,504 ) 21,084 (20,319 ) 32,575 Preferred dividends   (7,018 )   (7,033 )   (14,036 )   (9,826 )   NET (LOSS)/INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (33,522 ) $ 14,051   $ (34,355 ) $ 22,749     INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS PER SHARE: Basic - (Loss)/income from continuing operations available to common shareholders $ (0.34 ) $ (0.09 ) $ (0.36 ) $ (0.05 ) Income from continuing operations $ 0.06     0.22     0.07     0.30     Net (loss)/income available to common shareholders $ (0.28 ) $ 0.13   $ (0.29 ) $ 0.25   Diluted - (Loss)/income from continuing operations available to common shareholders $ (0.34 ) $ (0.09 ) $ (0.36 ) $ (0.05 ) Income from continuing operations   0.06     0.22     0.07     0.30     Net (loss)/income available to common shareholders $ (0.28 ) $ 0.13   $ (0.29 ) $ 0.25   Weighted Average Common Shares Outstanding: Basic   118,911     108,138     118,870     90,275   Diluted   118,911     108,138     118,870     90,275     ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO EBITDA (in thousands, except per share amounts and ratios)         Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 (Unaudited)   Net income $ (26,504 ) $ 21,084 $ (20,319 ) $ 32,575   Interest income (351 ) (975 ) (897 ) (1,473 ) Interest expense and amortization of loan costs 39,148 45,469 79,738 62,207 Depreciation and amortization 41,203 60,213 87,528 77,409 Minority interest in (losses)/earnings of operating partnership (2,225 ) 1,979 (1,594 ) 3,806 Income tax expense   528     6,903     938     6,392     EBITDA 51,799 134,673 145,394 180,916   Amortization of unfavorable management contract liabilities (564 ) (512 ) (1,129 ) (936 ) Gains on sale of properties (6,015 ) (33,317 ) (6,903 ) (34,706 ) Write-off of loan costs, premiums and exit fees (1) 515 5,264 (1,347 ) 5,966 Unrealized losses/(gains) on derivatives 55,438 (66 ) 51,389 (31 )         Adjusted EBITDA $ 101,173   $ 106,042   $ 187,404   $ 151,209       RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS ("FFO") (in thousands)   Three Months Ended Six Months Ended June 30, June 30,   2008     2007     2008     2007   (Unaudited)   Net income $ (26,504 ) $ 21,084 $ (20,319 ) $ 32,575 Preferred dividends   (7,018 )   (7,033 )   (14,036 )   (9,826 )   Net (loss)/income available to common shareholders (33,522 ) 14,051 (34,355 ) 22,749   Depreciation and amortization on real estate 41,443 59,029 86,742 76,145 Gains on sales of hotel properties, net of related income taxes (6,015 ) (26,450 ) (6,903 ) (27,839 ) Minority interest in (losses)/earnings of operating partnership   (2,225 )   1,979     (1,594 )   3,806     FFO available to common shareholders (319 ) 48,609 43,890 74,861   Dividends on convertible preferred stock 1,564 1,564 3,128 3,128 Write-off of loan costs, premiums and exit fees (1) 515 5,264 (1,347 ) 5,966 Unrealized losses/(gains) on derivatives   55,438     (66 )   51,389     (31 )   Adjusted FFO $ 57,198   $ 55,371   $ 97,060   $ 83,924     Adjusted FFO per diluted share available to common shareholders $ 0.41   $ 0.43   $ 0.69   $ 0.75     Weighted average diluted shares   140,757     129,164     140,250     111,700     Dividend coverage   194 %   205 %   165 %   179 %   (1) For the six months ended June 30, 2008, the amount includes a write-off of debt premium of $2,086,000 at the sale of a hotel property.   ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CASH AVAILABLE FOR DISTRIBUTION ("CAD") (in thousands, except per share amounts)                 Three MonthsEndedJune 30,2008 PerDilutedShare Three MonthsEndedJune 30,2007 PerDilutedShare Six MonthsEndedJune 30,2008 PerDilutedShare Six MonthsEndedJune 30,2007 PerDilutedShare   Net (loss)/income available to common shareholders $ (33,522 ) $ (0.24 ) $ 14,051 $ 0.11 $ (34,355 ) $ (0.24 ) $ 22,749 $ 0.20 Dividends on convertible preferred stock   1,564     0.01     1,564     0.01     3,128     0.02     3,128     0.03     Total (31,958 ) (0.23 ) 15,615 0.12 (31,227 ) (0.22 ) 25,877 0.23   Depreciation and amortization on real estate 41,443 0.29 59,029 0.46 86,742 0.62 76,145 0.68 Minority interest in (losses)/earnings of operating partnership (2,225 ) (0.02 ) 1,979 0.02 (1,594 ) (0.01 ) 3,806 0.03 Stock-based compensation 1,860 0.01 1,907 0.01 3,469 0.02 2,966 0.03 Amortization of loan costs 1,682 0.01 2,263 0.02 3,485 0.02 2,923 0.03 Write-off of loan costs, premiums and exit fees (1) 515 0.00 5,264 0.04 (1,347 ) (0.01 ) 5,966 0.05 Amortization of unfavorable management contract liabilities (564 ) (0.00 ) (512 ) (0.00 ) (1,129 ) (0.01 ) (936 ) (0.01 ) Gains on sales of properties, net of related income taxes (6,015 ) (0.04 ) (26,450 ) (0.20 ) (6,903 ) (0.05 ) (27,839 ) (0.25 ) Unrealized (gains)/losses on derivatives 55,438 0.39 (66 ) (0.00 ) 51,389 0.37 (31 ) (0.00 ) Capital improvements reserve   (14,014 )   (0.10 )   (14,804 )   (0.11 )   (26,113 )   (0.19 )   (20,491 )   (0.18 )   CAD $ 46,162   $ 0.33   $ 44,225   $ 0.34   $ 76,772   $ 0.55   $ 68,386   $ 0.61     Dividend coverage   156 %   163 %   130 %   146 %   (1) For the six months ended June 30, 2008, the amount includes a write-off of debt premium of $2,086,000 at the sale of a hotel property.   ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES DEBT SUMMARY JUNE 30, 2008 (dollars in thousands)         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 Mortgage 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 - 65,000 65,000 Mortgage loan secured by one hotel property, matures December 1, 2017, with an interest rate of 7.39% at June 30, 2008 48,916 - 48,916 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 - 185,900 185,900 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 properties, matures May 9, 2009, at an interest rate of LIBOR plus 1.65%, with three one-year extension options - 213,889 213,889 Mortgage loan secured by one hotel property, matures January 1, 2011, at an interest rate of 8.32% 5,129 - 5,129 Mortgage loan secured by one hotel property, matures January 1, 2023, at an interest rate of 7.78% 6,864 - 6,864 TIF loan secured by one hotel property, matures June 30, 2018, at an interest rate of 12.85% 6,927 - 6,927 Mortgage loan secured by one hotel property, matures April 1, 2009, at an interest rate of 5.6% 29,758 - 29,758 Mortgage loan secured by one hotel property, matures April 5, 2011, at an interest rate of 5.47% 67,175 - 67,175 Mortgage loan secured by one hotel property, matures March 1, 2010, at an interest rate of 5.95% 75,000 - 75,000 Mortgage loan secured by two hotel properties, matures January 1, 2009, at an interest rate of 5.5% 95,400 - 95,400 Mortgage loan secured by one hotel property, matures June 1, 2011, at an interest rate of LIBOR plus 2%   -     19,740     19,740     Total Debt Excluding Premium $ 2,031,224   $ 484,529   2,515,753   Mark-to-Market Premium 1,514 Plus Debt Attributable to Joint Venture Partners   34,773     Total Debt Including Premium $ 2,552,040     Percentage   80.7 %   19.3 %   100.0 %   Weighted average interest rate at June 30, 2008   5.51 %   Total with the effect of interest rate swap $ 231,224   $ 2,284,529   $ 2,515,753     Percentage with the effect of interest rate swap   9.2 %   90.8 %   100.0 %   Weighted average interest rate with the effect of interest rate swap   4.99 %   ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA (Unaudited)             Three Months Ended Six Months Ended June 30, June 30, 2008 2007 % Variance 2008 2007 % Variance   ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: Room revenues (in thousands) $ 237,085 $ 235,003 0.89 % $ 458,840 $ 453,653 1.14 % RevPAR $ 111.61 $ 110.65 0.87 % $ 108.00 $ 107.16 0.78 % Occupancy 76.91 % 78.25 % -1.34 % 73.60 % 75.14 % -1.54 % ADR $ 145.11 $ 141.40 2.62 % $ 146.73 $ 142.62 2.88 %     NOTE:The above pro forma table assumes the 105 hotel properties owned and included in continuing operations at June 30, 2008 were owned as of the beginning of period presented.     Three Months Ended Six Months Ended June 30, June 30, 2008 2007 % Variance 2008 2007 % Variance   ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: Room revenues (in thousands) $ 209,587 $ 205,358 2.06 % $ 410,229 $ 399,806 2.61 % RevPAR $ 110.53 $ 108.33 2.03 % $ 108.16 $ 105.80 2.23 % Occupancy 77.75 % 77.93 % -0.18 % 74.75 % 75.03 % -0.28 % ADR $ 142.16 $ 139.00 2.27 % $ 144.71 $ 141.01 2.62 %     NOTE: The above pro forma table assumes the 97 hotel properties owned and included in continuing operations at June 30, 2008 but not under renovation for three and six months ended June 30, 2008 were owned as of the beginning of the periods presented.   Excluded Hotels Under Renovation: Sea Turtle Inn Jacksonville, Marriott at RTP Durham, Marriott Gateway Arlington, Sheraton Hotel Anchorage, Hampton Inn Houston, Embassy Suites Philadelphia Airport, Embassy Suites Santa Clara, Courtyard by Marriott San Francisco   OTHER 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 to related to this operating lease for GAAP purposes. However, in 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 Six Months Ended June 30, June 30, 2008 2007 % Variance 2008 2007 % Variance REVENUE Rooms $ 237,085 $ 235,003 0.9 % $ 458,840 $ 453,653 1.1 % Food and beverage 68,218 68,145 0.1 % 133,333 131,272 1.6 % Other   14,236     14,603   -2.5 %   27,644     28,988   -4.6 % Total hotel revenue   319,539     317,751   0.6 %   619,817     613,913   1.0 %   EXPENSES Rooms 51,021 51,024 0.0 % 99,714 99,168 0.6 % Food and beverage 46,467 47,160 -1.5 % 92,065 93,089 -1.1 % Other direct 7,612 7,745 -1.7 % 14,823 15,105 -1.9 % Indirect 81,745 79,556 2.8 % 163,850 157,238 4.2 % Management fees, includes base and incentive fees   14,911     16,134   -7.6 %   28,167     28,520   -1.2 % Total hotel operating expenses 201,756 201,619 0.1 % 398,619 393,120 1.4 % Property taxes, insurance, and other   16,795     16,750   0.3 %   32,075     32,562   -1.5 % HOTEL OPERATING PROFIT (Hotel EBITDA) 100,988 99,382 1.6 % 189,123 188,231 0.5 % Hotel EBITDA Margin 31.60 % 31.27 % 0.33 % 30.51 % 30.66 % -0.15 %   Minority interest in earnings of consolidated joint ventures   2,868     2,330   23.1 %   4,623     3,986   16.0 % HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures $ 98,120   $ 97,052   1.1 % $ 184,500   $ 184,245   0.1 %   NOTE:The above pro forma table assumes the 105 hotel properties owned and included in continuing operations at June 30, 2008 were owned as of the beginning of the periods presented.     ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:   Three Months Ended Six Months Ended June 30, June 30, 2008 2007 % Variance 2008 2007 % Variance REVENUE Rooms (1) $ 209,587 $ 205,358 2.1 % $ 410,229 $ 399,806 2.6 % Food and beverage 59,156 58,493 1.1 % 117,284 113,929 2.9 % Other   12,839     13,031   -1.5 %   25,312     26,237   -3.5 % Total hotel revenue   281,582     276,882   1.7 %   552,825     539,972   2.4 %   EXPENSES Rooms (1) 44,869 44,605 0.6 % 87,972 86,980 1.1 % Food and beverage 39,892 40,454 -1.4 % 79,754 80,324 -0.7 % Other direct 6,654 6,902 -3.6 % 13,142 13,500 -2.7 % Indirect 71,817 69,674 3.1 % 143,877 138,477 3.9 % Management fees, includes base and incentive fees   12,067     12,943   -6.8 %   24,287     23,534   3.2 % Total hotel operating expenses 175,299 174,578 0.4 % 349,032 342,815 1.8 % Property taxes, insurance, and other   14,850     15,024   -1.2 %   28,510     29,213   -2.4 % HOTEL OPERATING PROFIT (Hotel EBITDA) 91,433 87,280 4.8 % 175,283 167,944 4.4 % Hotel EBITDA Margin 32.47 % 31.52 % 0.95 % 31.70 % 31.10 % 0.60 %   Minority interest in earnings of consolidated joint ventures   2,868     2,330   23.1 %   4,623     3,986   16.0 % HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures $ 88,565   $ 84,950   4.3 % $ 170,660   $ 163,958   4.1 %   NOTES: (1) The above pro forma table assumes the 97 hotel properties owned and included in continuing operations at June 30, 2008 but not under renovation during the three and six months ended June 30, 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 form 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 Six Months Ended Number ofHotels Number ofRooms June 30, June 30, Region 2008 2007 % Change 2008 2007 % Change   Pacific (1) 22 5,863 $ 119.97 $ 120.27 -0.3% $ 115.20 $ 115.08 0.1% Mountain (2) 8 1,704 $ 103.59 $ 103.52 0.1% $ 115.42 $ 113.96 1.3% West North Central (3) 3 690 $ 91.22 $ 93.48 -2.4% $ 85.33 $ 88.38 -3.5% West South Central (4) 10 2,086 $ 108.80 $ 105.97 2.7% $ 108.47 $ 104.13 4.2% East North Central (5) 10 2,624 $ 90.55 $ 85.92 5.4% $ 81.62 $ 79.85 2.2% East South Central (6) 2 236 $ 99.43 $ 94.82 4.9% $ 94.67 $ 89.89 5.3% Middle Atlantic (7) 10 2,669 $ 109.99 $ 112.75 -2.5% $ 99.49 $ 100.36 -0.9% South Atlantic (8) 38 7,728 $ 118.30 $ 116.57 1.5% $ 115.82 $ 115.18 0.6% New England (9) 2 158 $ 93.25 $ 88.29 5.6% $ 88.39 $ 79.54 11.1%                 Total Portfolio 105 23,758 $ 111.61 $ 110.65 0.9% $ 108.00 $ 107.16 0.8%     (1) Includes Alaska, California, Oregon, and Washington (2) Includes Nevada, Arizona, New Mexico, and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio, Michigan, Illinois, and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey, and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, District of Columbia, and North Carolina (9) Includes Massachusetts and Connecticut     NOTES: (1) The above pro forma table assumes the 105 hotel properties owned and included in continuing operations as of June 30, 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 Six Months Ended Number ofHotels Number ofRooms June 30, June 30, Brand 2008 2007 % Change 2008 2007 % Change   Hilton 34 7,512 $ 120.46 $ 118.59 1.6% $ 116.79 $ 116.41 0.3% Hyatt 3 1,668 $ 99.48 $ 94.21 5.6% $ 102.64 $ 100.35 2.3% InterContinental 2 420 $ 150.98 $ 151.24 -0.2% $ 157.05 $ 160.94 -2.4% Independent 2 317 $ 66.68 $ 82.77 -19.4% $ 50.82 $ 73.77 -31.1% Marriott 57 11,713 $ 109.18 $ 109.18 0.0% $ 106.99 $ 104.94 2.0% Radisson 1 188 $ 72.93 $ 68.84 5.9% $ 59.59 $ 56.78 4.9% Starwood 6 1,940 $ 103.02 $ 101.21 1.8% $ 86.60 $ 87.36 -0.9%                 Total Portfolio 105 23,758 $ 111.61 $ 110.65 0.9% $ 108.00 $ 107.16 0.8%     NOTES: (1) The above pro forma table assumes the 105 hotel properties owned and included in continuing operations as of June 30, 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 (dollars in thousands) (Unaudited)                         Three Months Ended Six Months Ended Number ofHotels Number ofRooms June 30, June 30, Region 2008   % Total 2007   % Total % Change 2008   % Total 2007   % Total % Change   Pacific (1) 22 5,863 $ 27,415 27.1% $ 27,587 27.8% -0.6% $ 51,605 27.3% $ 51,477 27.3% 0.2% Mountain (2) 8 1,704 5,987 5.9% 5,947 6.0% 0.7% 15,986 8.5% 16,025 8.5% -0.2% West North Central (3) 3 690 2,614 2.6% 2,679 2.7% -2.4% 4,551 2.4% 4,870 2.6% -6.6% West South Central (4) 10 2,086 8,584 8.5% 8,146 8.2% 5.4% 17,288 9.1% 16,003 8.5% 8.0% East North Central (5) 10 2,624 9,800 9.7% 8,672 8.7% 13.0% 14,708 7.8% 13,246 7.0% 11.0% East South Central (6) 2 236 924 0.9% 878 0.9% 5.3% 1,754 0.9% 1,688 0.9% 3.9% Middle Atlantic (7) 10 2,669 10,657 10.6% 10,978 11.0% -2.9% 15,783 8.3% 17,090 9.1% -7.6% South Atlantic (8) 38 7,728 34,362 34.0% 34,028 34.2% 1.0% 66,548 35.2% 67,136 35.7% -0.9% New England (9) 2 158 645 0.6% 466 0.5% 38.4% 901 0.5% 694 0.4% 29.8%                                 Total Portfolio 105 23,758 $ 100,988   100.0% $ 99,381   100.0% 1.6% $ 189,124   100.0% $ 188,230   100.0% 0.5%     (1) Includes Alaska, California, Oregon, and Washington (2) Includes Nevada, Arizona, New Mexico, and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio, Michigan, Illinois, and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey, and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, District of Columbia, and North Carolina (9) Includes Massachusetts and Connecticut     NOTES: (1) The above pro forma table assumes the 105 hotel properties owned and included in continuing operations as of June 30, 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)   97 HOTELS NOT UNDER RENOVATION AND INCLUDED IN CONTINUING OPERATIONS AT JUNE 30, 2008 AS IF SUCH HOTELS WERE OWNED AS OF THE BEGINNING OF THE PERIODS PRESENTED:     HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:   2nd Quarter 2008 32.47% 2nd Quarter 2007 31.52% Variance 0.95%   HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:   Rooms 0.18% Food & Beverage and Other Departmental 0.57% Administrative & General -0.07% Sales & Marketing -0.15% Hospitality 0.00% Repair & Maintenance -0.04% Energy -0.04% Franchise Fee -0.19% Management Fee -0.01% Incentive Management Fee 0.40% Insurance 0.23% Property Taxes -0.08% Leases/Other 0.15% Total 0.95%     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 105 HOTELS OWNED AND INCLUDED IN CONTINUING OPERATIONS AS OF JUNE 30, 2008:     2008 2008 2007 2007 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter TTM   Total Hotel Revenue $ 319,539 $ 300,279 $ 325,013 $ 291,542 $ 1,236,373 Hotel EBITDA $ 100,988 $ 87,936 $ 88,820 $ 79,173 $ 356,917 Hotel EBITDA Margin 31.6% 29.3% 27.3% 27.2% 28.9%   EBITDA % of Total TTM 28.3% 24.6% 24.9% 22.2% 100.0%   JV Interests in EBITDA $ 2,868 $ 1,754 $ 1,567 $ 1,577 $ 7,766     NOTES: (1) The above pro forma table assumes that the 105 hotel properties owned and included in continuing operations as of June 30, 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 105 Core Hotels (a)                                       2007   2008 Rooms   Actual1st Quarter   Actual2nd Quarter   Actual3rd Quarter   Actual4th Quarter   Actual1st Quarter   Actual2nd Quarter   Estimated3rd Quarter   Estimated4th 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 One Ocean 193 x x x x x x Sheraton City Center - Indianapolis 371 x x x JW Marriott San Francisco 338 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 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 Courtyard Basking Ridge 235 x TownePlace Suites Manhattan Beach 144 x Courtyard San Francisco Downtown 405 x x Embassy Suites Santa Clara - Silicon Valley 257 x x Sheraton Anchorage 375 x x x Hampton Inn Houston Galleria 150 x x Hampton Inn Jacksonville 118 x x Embassy Suites West Palm Beach 160 x x Hyatt Regency Coral Gables 242 x x Hampton Inn Lawrenceville 86 x Marriott Legacy Center 404 x Courtyard Ft. Lauderdale Weston 174 x Hilton Rye Town 446 x Courtyard Louisville Airport 150 x Hilton Costa Mesa 486 x SpringHill Suites Charlotte 136 x SpringHill Suites Manhattan Beach 164 x Residence Inn Atlanta - Buckhead 150                               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.