Ashford Hospitality Trust Reports Third Quarter Results

Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the third quarter ended September 30, 2007. 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 114 hotels owned as of September 30, 2007, which excludes 5 hotel assets held for sale as of that date. Unless otherwise stated, all reported results compare the third quarter ended September 30, 2007 with the third quarter ended September 30, 2006. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release. FINANCIAL HIGHLIGHTS Total revenue increased 195% to $336.8 million from $114.3 million Net loss to common shareholders was $6.6 million, or $0.05 per diluted share Adjusted funds from operations (AFFO), excluding gains on sales, increased 56.1% to $34.9 million, or $0.25 per diluted share Seasonality for the portfolio has changed from 24.7% of the Hotel EBITDA being produced in the third quarter last year to 23.0% of the Hotel EBITDA being produced in the third quarter this year because of the acquisition of the CNL portfolio. This change created a $0.04 per share variance for the quarter Year to date AFFO per diluted share increased 15.1% to $0.99 from $0.86 Cash available for distribution (CAD) increased 31% to $25.1 million, or $0.18 per diluted share Year to date CAD per diluted share increased to $0.78 from $0.76 Declared quarterly common dividend of $0.21 per diluted share CAD dividend coverage was 124% year to date STRONG INTERNAL GROWTH Proforma RevPAR increased 8.3% for hotels not under renovation on a 5.1% increase in ADR to $134.89 and a 233-basis point improvement in occupancy Proforma RevPAR increased 7.4% for all hotels on a 5.4% increase in ADR to $135.27 and a 144-basis point improvement in occupancy Proforma same-property Hotel Operating Profit for hotels not under renovation improved 11.7% Proforma same-property Hotel Operating Profit margin for hotels not under renovation improved 120 basis points CAPITAL RECYCLING AND ASSET ALLOCATION Capex invested in the third quarter totaled $32 million Capex for 2007 and 2008 estimated at $280 million for which the Company has adequate resources to fund through continued asset sales, FF&E reserves, and cash flow above our dividend Targeted ROI projects for 2008 should approximate $50 million Two hotels sold in the third quarter for $10 million and one subsequent to the end of the quarter for $25 million PORTFOLIO REVPAR GROWTH As of September 30, 2007, the Company had a portfolio of direct hotel investments consisting of 114 properties classified in continuing operations. During the third quarter, 106 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 114 hotels) and proforma not-under-renovation basis (106 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 114 hotels. Details of each category are provided in the tables attached to this release. RevPAR growth by region was led by: West South Central (12 hotels) with a 10.7% increase; Middle Atlantic (10) with 9.3%; South Atlantic (42) with 9.2%; New England (4) with 8.9%; Mountain (8) with 6.5%; Pacific (22) with 6.3%; East South Central (2) with 5.9%; West North Central (3) with 2.4%; East North Central (10) with 1.8%; and Canada (1) with 0.8% RevPAR growth by brand was led by: InterContinental (2 hotels) with 13.7%; Hilton (37 hotels) with 9.1%; Marriott (59) with 7.9%; Hyatt (5) with 7.5%; Starwood (7) with 0.1%; Radisson (2) with a 1.6% decrease; and independents (2) with a 19.7% decrease HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS For the 106 hotels as of September 30, 2007 that were not under renovation, Proforma Hotel EBITDA (adjusted as if all hotels were included throughout both periods) increased 11.7% to $84.6 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 120 basis points to 26.7%. For all 114 hotels included in continuing operations as of September 30, 2007, Proforma Hotel EBITDA increased 8.8% to $87.9 million and Hotel EBITDA margin increased 74 basis points to 26.0%. 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. Prior to the acquisition of the 51 CNL assets in April 2007, the Company’s third quarter contributed approximately 24.7% of the annual Hotel EBITDA. For the current portfolio of 114 hotels the Company’s third quarter now contributes approximately 23.0% of the annual Hotel EBITDA. This 170 basis point change is the equivalent of approximately $0.04 per diluted share. The details of the quarterly calculations for the last four quarters for the current portfolio are provided in the tables attached to this release. Monty J. Bennett, President and CEO, commented, "The internal growth from our portfolio has been a consistent theme for us all year, which was evident once again in the third quarter. With RevPAR growth above the industry average and sustained improvement in operating margins, we are seeing a direct benefit from the previous investments we have made to improve our assets as well as our efforts to concentrate the portfolio in high growth markets with the strongest brands. We intend to place an even greater emphasis on accelerating the returns from some of our recently acquired assets through ROI projects. While we have been pleased with the continued improvement in internal growth, we believe allocating additional capital to several assets in select markets has the potential for even greater returns." FINANCING ACTIVITY On July 18, 2007, the Company priced 8,000,000 shares of 8.45% Series D Cumulative Preferred Stock at $25.00 per share. The annual distribution for the preferred stock is $2.1125 per share, payable quarterly. Ashford used the net proceeds of the offering to redeem the Company’s Series C Preferred Stock. At September 30, 2007, the Company's net debt (defined as total debt less cash) to total enterprise value (defined as net debt plus the market value of all common shares, preferred shares and operating partnership units outstanding) was 60.5% based upon the Company's closing stock price of $10.05. As of September 30, 2007, the Company’s $2.9 billion debt balance consisted of 78% of fixed-rate debt, with a total weighted average interest rate of 6.05%. The Company’s weighted average debt maturity including extension options is 7.2 years. THIRD QUARTER INVESTMENT ACTIVITY On July 2, 2007, the Company sold the Hampton Inn Horse Cave in Horse Cave, Kentucky, for approximately $3.5 million. On September 27, 2007, the Company sold the Doubletree Guest Suites - Dayton / Miamisburg in Dayton, Ohio for approximately $6.5 million. In connection with these two sales, the Company recognized a gain of $0.5 million. SUBSEQUENT INVESTMENT ACTIVITY On October 2, 2007, the Company sold the Hilton Birmingham Perimeter Park in Birmingham, Alabama for approximately $25 million. In November, the Company expects to close the sale of the Residence Inn Atlanta in Atlanta, Georgia and the Residence Inn Torrance in Torrance, California for a total of approximately $61.5 million as well as the sale of the Residence Inn Kansas City in Kansas City, Missouri for approximately $7.0 million. The Company has placed the Marriott BWI Airport in Baltimore, Maryland under contract for sale for approximately $61.5 million. The sale, subject to customary closing conditions, is expected to close by the end of November. INVESTMENT OUTLOOK Mr. Bennett concluded, "While hotel fundamentals remain strong by historical measures, increased volatility exists in the financial markets. Our hotel portfolio and investment strategy are structured to benefit from these changing conditions. The diversified mix of assets offers the best of both worlds, namely value-add internal growth from our upper-upscale hotels and operating resiliency from our high quality select-service upscale and mid-scale without F&B properties. Additionally our capital allocation strategy is taking advantage of changing trends. We are recycling capital through asset sales and reducing debt, or redeploying the proceeds in high ROI internal growth investments as well as our hotel lending program. The company is currently targeting approximately $50 million of value added ROI capital projects to be completed during 2008. With the widening of lending spreads, we see a growing, though modest, opportunity in our mezzanine lending investment strategy. We remain committed to seeking the best risk adjusted returns for our shareholders." INVESTOR CONFERENCE CALL AND SIMULCAST Ashford Hospitality Trust, Inc. will conduct a conference call at 11:00 a.m. ET on November 1, 2007, to discuss the third quarter results. The number to call for this interactive teleconference is (913) 312-1295. A seven-day replay of the conference call will be available by dialing (719) 457-0820 and entering the confirmation number, 2846114. The Company will also provide an online simulcast and rebroadcast of its third quarter 2007 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 as well as on http://www.videonewswire.com/event.asp?regd=y&id=42633 on Thursday, November 1, 2007, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for approximately one year. 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. CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Share and Per Share Amounts) (Unaudited)               Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30,2007 September 30,2006 September 30,2007 September 30,2006   REVENUE Rooms $ 249,633 $ 88,598 $ 609,484 $ 255,615 Food and beverage 67,173 17,472 177,066 50,012 Rental income from operating leases 1,449 - 2,633 - Other   15,862     4,247     36,779     11,958   Total hotel revenue 334,117 110,317 825,962 317,585 Interest income from notes receivable 2,373 3,652 8,594 11,518 Asset management fees from affiliates   334     299     996     934   Total Revenue 336,824 114,268 835,552 330,037   EXPENSES Hotel operating expenses Rooms 58,794 20,192 138,285 56,084 Food and beverage 52,717 13,652 130,433 38,267 Other direct 8,321 2,116 18,551 5,545 Indirect 95,807 32,793 226,596 93,443 Management fees   12,523     4,148     30,578     12,350   Total hotel expenses 228,162 72,901 544,443 205,689   Property taxes, insurance, and other 17,598 6,593 43,892 17,786 Depreciation and amortization 39,262 12,686 115,269 33,841 Corporate general and administrative: Stock-based compensation 1,704 1,411 4,669 4,120 Other corporate and administrative   6,365     3,398     15,141     10,838   Total Operating Expenses   293,091     96,989     723,414     272,274   OPERATING INCOME 43,733 17,279 112,138 57,763   Interest income 776 1,005 2,249 2,065 Interest expense (45,125 ) (10,940 ) (104,410 ) (33,703 ) Amortization of loan costs (2,524 ) (495 ) (5,447 ) (1,470 ) Write-off of loan costs and exit fees   -     -     (5,966 )   (788 ) INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST (3,140 ) 6,849 (1,436 ) 23,867 Benefit from income taxes 2,117 833 3,228 605 Minority interest in consolidated joint ventures (106 ) - 417 - Minority interest related to limited partners   343     (925 )   (413 )   (3,685 ) INCOME (LOSS) FROM CONTINUING OPERATIONS (786 ) 6,757 1,796 20,787 Income from discontinued operations, net: (including gains on sales net of income taxes of approximately $531,000 and $28.4 million for the three and nine months ended September 30, 2007, respectively)   1,294     1,893     31,287     6,348   NET INCOME 508 8,650 33,083 27,135 Preferred dividends   7,146     2,719     16,972     8,156   NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (6,638 ) $ 5,931   $ 16,111   $ 18,979     Income (Loss) From Continuing Operations Per Share Available To Common Shareholders: Basic $ (0.07 ) $ 0.06   $ (0.15 ) $ 0.22   Diluted $ (0.07 ) $ 0.06   $ (0.15 ) $ 0.22   Income From Discontinued Operations Per Share: Basic $ 0.01   $ 0.03   $ 0.31   $ 0.11   Diluted $ 0.01   $ 0.03   $ 0.31   $ 0.11   Net Income (Loss) Per Share Available To Common Shareholders: Basic $ (0.05 ) $ 0.09   $ 0.16   $ 0.33   Diluted $ (0.05 ) $ 0.09   $ 0.16   $ 0.32   Weighted Average Common Shares Outstanding: Basic   121,234,832     67,157,286     100,708,105     58,320,142   Diluted   121,234,832     67,301,115     100,708,105     58,681,541       ASHFORD HOSPITALITY TRUST, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited)   September 30, December 31, 2007 2006   ASSETS Investment in hotel properties, net $ 4,186,590 $ 1,632,946 Cash and cash equivalents 143,678 73,343 Restricted cash 49,135 9,413 Accounts receivable, net 76,504 22,081 Inventories 4,435 2,110 Assets held for sale 110,608 119,342 Notes receivable 72,827 102,833 Deferred costs, net 31,405 14,143 Prepaid expenses 17,827 11,154 Other assets 9,187 7,826 Due from third-party hotel managers 48,422 15,964 Due from related parties   2,030     757   Total assets $ 4,752,648   $ 2,011,912       LIABILITIES AND OWNERS' EQUITY Indebtedness $ 2,919,737 $ 1,091,150 Capital leases payable 811 177 Accounts payable 50,917 16,371 Accrued expenses 84,922 32,591 Dividends payable 34,733 19,975 Deferred income 264 294 Deferred incentive management fees 3,615 3,744 Unfavorable management contract liabilities 24,149 15,281 Other liabilities 1,115 - Due to third-party hotel managers 7,497 1,604 Due to related parties   3,368     4,152   Total liabilities 3,131,128 1,185,339   Commitments and contingencies Minority interest in consolidated joint ventures 105,785 - Minority interest related to limited partnership interests 105,595 109,864 Preferred stock, $0.01 par value: Series B Cumulative Convertible Redeemable Preferred Stock, 7,447,865 issued and outstanding at September 30, 2007 and December 31, 2006, respectively 75,000 75,000   Preferred stock, $0.01 par value, 50,000,000 shares authorized: Series A Cumulative Preferred Stock, 2,300,000 issued and outstanding at September 30, 2007 and December 31, 2006, respectively 23 23 Series D Cumulative Preferred Stock, 8,000,000 issued and outstanding at September 30, 2007 80 -   Common stock, $0.01 par value, 200,000,000 shares authorized, 122,632,274 shares issued and 122,608,938 shares outstanding at September 30, 2007 and 72,942,841 shares issued and outstanding at December 31, 2006   1,226 729 Additional paid-in capital 1,452,611 708,420 Accumulated other comprehensive income (loss) (81 ) 111 Accumulated deficit (118,444 ) (67,574 ) Treasury stock, at cost (23,336 shares)   (275 )   -   Total owners' equity 1,335,140 641,709     Total liabilities and owners' equity $ 4,752,648   $ 2,011,912     ASHFORD HOSPITALITY TRUST, INC. EBITDA (In Thousands) (Unaudited)         Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30,2007 September 30,2006 September 30,2007 September 30,2006   Net income $508   $8,650   $33,083   $27,135     Add back: Interest income (776 ) (1,005 ) (2,249 ) (2,065 ) Interest expense and amortization of loan costs 47,649 11,435 109,857 35,173 Depreciation and amortization 40,235 13,812 117,644 37,120 Minority interest relating to limited partners 219 1,184 4,026 4,860 Provision for (benefit from) income taxes (1,309 ) (929 ) 5,085   (692 ) 86,018 24,497 234,363 74,396         EBITDA $86,526   $33,147   $267,446   $101,531       For the three months ended September 30, 2007, EBITDA has not been adjusted to deduct the amortization of the unfavorable management contract liabilities of approximately $565,000 and deduct gains on sales of properties of approximately $531,000.   For the three months ended September 30, 2006, EBITDA has not been adjusted to deduct the amortization of the unfavorable management contract liabilities of approximately $212,000.   For the nine months ended September 30, 2007, EBITDA has not been adjusted to deduct the amortization of the unfavorable management contract liabilities of approximately $1.5 million, add back the write-off of loan costs and exit fees of approximately $6.0 million, and deduct gains on sales of properties of approximately $35.2 million.   For the nine months ended September 30, 2006, EBITDA has not been adjusted to add back the write-off of loan costs of approximately $788,000, add back the loss from reclassification from discontinued to continuing of approximately $863,000, and deduct the amortization of the unfavorable management contract liabilities of approximately $212,000.         ASHFORD HOSPITALITY TRUST, INC. FFO and Adjusted FFO (In Thousands, Except Share And Per Share Amounts) (Unaudited)   Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30,2007   September 30,2006   September 30,2007   September 30,2006   Net income (loss) available to common shareholders $(6,638 ) $5,931   $16,111   $18,979     Plus real estate depreciation and amortization 40,128 13,734 117,372 36,887 Remove gains on sales of properties, net of related income taxes (531 ) - (28,370 ) - Remove minority interest relating to limited partners 219   1,184   4,026   4,860   FFO available to common shareholders $33,178   $20,849   $109,139   $60,726     Add back dividends on convertible preferred stock 1,564 1,490 4,692 4,469 Add back non-cash dividends on Series C preferred stock 140 - 845 - Add back write-off of loan costs and exit fees - - 5,966 788 Add back loss from reclassification of discontinued to continuing -   -   -   863   Adjusted FFO $34,882   $22,339   $120,642   $66,846     Adjusted FFO per diluted share available to common shareholders $0.25   $0.25   $0.99   $0.86     Diluted weighted average shares outstanding 142,249,192   88,343,497   122,151,979   77,957,660             ASHFORD HOSPITALITY TRUST, INC. CASH AVAILABLE FOR DISTRIBUTION ("CAD") (In Thousands, Except Per Share Amounts) (Unaudited)         Three MonthsEndedSeptember 30,2007   (per diluted share) Three MonthsEndedSeptember 30,2006   (per diluted share)   Net income (loss) available to common shareholders $ (6,638 ) $ (0.05 ) $ 5,931 $ 0.07 Add back dividends on convertible preferred stock   1,564     0.01     1,490     0.02   Total $ (5,074 ) $ (0.04 ) $ 7,421 $ 0.08   Plus real estate depreciation and amortization $ 40,128 $ 0.28 $ 13,734 $ 0.16 Plus non-cash dividends related to Series C preferred stock 140 0.00 - 0.00 Remove minority interest relating to limited partners 219 0.00 1,184 0.01 Plus stock-based compensation 1,704 0.01 1,411 0.02 Plus amortization of loan costs 2,524 0.02 495 0.01 Plus write-off of loan costs and exit fees - 0.00 - 0.00 Less amortization of unfavorable management contract liabilities (564 ) (0.00 ) (212 ) (0.00 ) Less gains on sales of properties, net of related income taxes (531 ) (0.00 ) - 0.00 Less capital improvements reserve   (13,430 )   (0.09 )   (4,864 )   (0.06 ) CAD $ 25,116   $ 0.18   $ 19,169   $ 0.22           Nine MonthsEndedSeptember 30,2007 (per diluted share) Nine MonthsEndedSeptember 30,2006 (per diluted share)   Net income available to common shareholders $ 16,111 $ 0.13 $ 18,979 $ 0.24 Add back dividends on convertible preferred stock   4,692     0.04     4,469     0.06   Total $ 20,803 $ 0.17 $ 23,448 $ 0.30   Plus real estate depreciation and amortization $ 117,372 $ 0.96 $ 36,887 $ 0.47 Plus non-cash dividends related to Series C preferred stock 845 0.01 - 0.00 Remove minority interest relating to limited partners 4,026 0.03 4,860 0.06 Plus stock-based compensation 4,669 0.04 4,120 0.05 Plus amortization of loan costs 5,447 0.04 1,470 0.02 Plus write-off of loan costs and exit fees 5,966 0.05 788 0.01 Plus loss from reclassification of discontinued to continuing - 0.00 863 0.01 Less amortization of unfavorable management contract liabilities (1,501 ) (0.01 ) (212 ) (0.00 ) Less gains on sales of properties, net of related income taxes (28,370 ) (0.23 ) - 0.00 Less capital improvements reserve   (33,920 )   (0.28 )   (12,816 )   (0.16 ) CAD $ 95,337   $ 0.78   $ 59,408   $ 0.76     ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA (Unaudited)               Three Months Ended Nine Months Ended September 30, September 30, 2007 2006 % Variance   2007 2006 % Variance   ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:   Room revenues (1) $ 255,120,213 $ 237,475,047 7.43% $ 779,341,131 $ 733,032,919 6.32% RevPAR (1) $ 103.35 $ 96.24 7.39% $ 105.99 $ 99.46 6.56% Occupancy 76.40% 74.96% 1.93% 75.42% 75.13% 0.38% ADR $ 135.27 $ 128.39 5.36% $ 140.53 $ 132.38 6.16%     NOTE: The above pro forma table assumes the 114 hotel properties owned and included in continuing operations at September 30, 2007 were owned as of the beginning of the periods presented.       Three Months Ended Nine Months Ended September 30, September 30, 2007 2006 % Variance   2007 2006 % Variance   ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:   Room revenues (1) $ 238,067,412 $ 219,708,424 8.36% $ 725,541,437 $ 678,610,966 6.92% RevPAR (1) $ 103.81 $ 95.83 8.33% $ 106.18 $ 99.06 7.19% Occupancy 76.96% 74.63% 3.12% 75.72% 74.91% 1.09% ADR $ 134.89 $ 128.40 5.06% $ 140.22 $ 132.24 6.04%     NOTE: The above pro forma table assumes the 106 hotel properties owned and included in continuing operations at September 30, 2007 but not under renovation for the three and nine months ended September 30, 2007 were owned as of the beginning of the periods presented.   Excluded Hotels Under Renovation: Sheraton City Center - Indianapolis, Sea Turtle Inn Jacksonville, JW Marriott San Francisco, Embassy Suites Las Vegas Airport, Homewood Suites Mobile, Residence Inn Lake Buena Vista, Embassy Suites Philadelphia Airport, Embassy Suites Walnut Creek   OTHER NOTES:   NOTE 1: On March 26, 2006, the Company converted its Radisson hotel in Ft. Worth, Texas, to a Hilton hotel, which resulted in a room count reduction from 517 to 294. Consequently, the increase in pro forma RevPAR exceeded the increase in pro forma room revenues for the nine months ended September 30, 2007 compared to the same 2006 period.   NOTE 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 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 RevPAR by Region (Unaudited)   Three Months EndedSeptember 30, Nine Months EndedSeptember 30, PercentChange in RevPAR Region Number of Hotels Number of Rooms 2007 2006 2007 2006 Quarter YTD   Pacific (1) 22 5,571 $125.83 $118.38 $118.68 $110.26 6.3% 7.6% Mountain (2) 8 1,597 $87.23 $81.93 $104.99 $99.49 6.5% 5.5% West North Central (3) 3 690 $96.82 $94.57 $91.22 $87.56 2.4% 4.2% West South Central (4) 12 2,955 $90.86 $82.05 $99.66 $87.55 10.7% 13.8% East North Central (5) 10 2,557 $87.24 $85.71 $82.34 $81.84 1.8% 0.6% East South Central (6) 2 236 $85.87 $81.05 $88.53 $85.95 5.9% 3.0% Middle Atlantic (7) 10 2,558 $112.57 $103.03 $104.46 $96.22 9.3% 8.6% South Atlantic (8) 42 9,067 $99.86 $91.42 $111.81 $105.78 9.2% 5.7% New England (9) 4 458 $78.92 $72.49 $68.91 $62.94 8.9% 9.5% Canada 1 607 $113.24 $112.39 $92.27 $98.22 0.8% -6.1%                 Total Portfolio 114 26,295 $103.35 $96.24 $105.99 $99.46 7.4% 6.6%       (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     NOTE 1: The above pro forma table assumes the 114 hotel properties owned and included in continuing operations as of September 30, 2007 were owned as of the beginning of the periods presented.   NOTE 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 EndedSeptember 30, Nine Months EndedSeptember 30, PercentChange in RevPAR Brand Number of Hotels Number of Rooms 2007 2006 2007 2006 Quarter YTD   Hilton 37 8,022 $108.22 $99.19 $114.28 $104.32 9.1% 9.5% Hyatt 5 2,591 $99.43 $92.50 $99.30 $94.82 7.5% 4.7% InterContinental 2 420 $135.05 $118.83 $152.22 $136.27 13.7% 11.7% Independent 2 317 $64.15 $79.87 $70.53 $82.41 -19.7% -14.4% Marriott 59 12,517 $100.46 $93.07 $103.85 $98.67 7.9% 5.2% Radisson 2 315 $76.20 $77.41 $62.16 $61.45 -1.6% 1.2% Starwood 7 2,113 $106.08 $106.00 $91.94 $88.73 0.1% 3.6%                 Total Portfolio 114 26,295 $103.35 $96.24 $105.99 $99.46 7.4% 6.6%     NOTE 1: The above pro forma table assumes the 114 hotel properties owned and included in continuing operations as of September 30, 2007 were owned as of the beginning of the periods presented.   NOTE 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 (In Thousands) (Unaudited)       ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:         Three Months Ended Nine Months Ended September 30,2007   September 30,2006   % Variance   September 30,2007   September 30,2006   % Variance   REVENUE Rooms (1) $ 255,120 $ 237,475 7.43% $ 779,341 $ 733,033 6.32% Food and beverage 67,915 66,720 1.79% 229,131 219,429 4.42% Other   15,529   16,046 -3.22%   49,281   49,313 -0.07% Total hotel revenue 338,565 320,241 5.72% 1,057,753 1,001,776 5.59%   EXPENSES Hotel operating expenses Rooms (1) 58,743 56,378 4.19% 172,107 168,139 2.36% Food and beverage 53,281 51,994 2.48% 169,120 163,295 3.57% Other direct 8,384 8,657 -3.16% 25,455 26,207 -2.87% Indirect 95,899 89,319 7.37% 281,835 265,051 6.33% Management fees, includes base and incentive fees   16,526   14,001 18.04%   48,918   46,242 5.79% Total hotel operating expenses 232,833 220,348 5.67% 697,434 668,935 4.26%   Property taxes, insurance, and other 17,866 19,168 -6.79% 57,011 54,531 4.55%             HOTEL OPERATING PROFIT (Hotel EBITDA) $ 87,866 $ 80,725 8.84% $ 303,309 $ 278,310 8.98%   Minority interest in consolidated joint ventures $ 5,226 $ 4,666 12.00% $ 20,355 $ 18,567 9.63% HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures $ 82,640 $ 76,059 8.65% $ 282,954 $ 259,743 8.94%     NOTE: The above pro forma table assumes the 114 hotel properties owned and included in continuing operations at September 30, 2007 were owned as of the beginning of the periods presented.       ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:   Three Months Ended Nine Months Ended September 30,2007   September 30,2006   % Variance   September 30,2007   September 30,2006   % Variance   REVENUE Rooms (1) $ 238,067 $ 219,708 8.36% $ 725,541 $ 678,611 6.92% Food and beverage 64,360 62,152 3.55% 216,020 205,042 5.35% Other   14,362   15,061 -4.64%   46,007   46,438 -0.93% Total hotel revenue 316,789 296,921 6.69% 987,569 930,092 6.18%   EXPENSES Hotel operating expenses Rooms (1) 54,527 51,703 5.46% 159,506 154,323 3.36% Food and beverage 50,250 48,441 3.74% 159,123 152,102 4.62% Other direct 7,982 8,264 -3.41% 24,239 24,982 -2.97% Indirect 87,392 82,038 6.53% 257,698 244,170 5.54% Management fees, includes base and incentive fees   15,512   13,220 17.34%   46,529   43,699 6.48% Total hotel operating expenses 215,663 203,667 5.89% 647,095 619,277 4.49%   Property taxes, insurance, and other 16,545 17,547 -5.71% 52,670 50,114 5.10%             HOTEL OPERATING PROFIT (Hotel EBITDA) $ 84,581 $ 75,707 11.72% $ 287,804 $ 260,701 10.40%   Minority interest in consolidated joint ventures $ 5,226 $ 4,666 12.00% $ 20,355 $ 18,567 9.63%   HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures $ 79,355 $ 71,041 11.70% $ 267,449 $ 242,134 10.46%     NOTE: The above pro forma table assumes the 106 hotel properties owned and included in continuing operations at September 30, 2007 but not under renovation during the three and nine months ended September 30, 2007 were owned as of the beginning of the periods presented. (1) On March 26, 2006, the Company converted its Radisson hotel in Ft. Worth, Texas, to a Hilton hotel, which resulted in a room count reduction from 517 to 294. Consequently, the increase in pro forma RevPAR exceeded the increase in pro forma room revenues for the nine months ended September 30, 2007 compared to the same 2006 period.   (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 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 Operating Profit by Region (In Thousands) (Unaudited)                           Three Months EndedSeptember 30, Nine Months EndedSeptember 30, Percent Changein HotelOperating Profit Region Number ofHotels Number ofRooms 2007   % Total 2006   % Total 2007   % Total 2006   % Total Quarter YTD   Pacific (1) 22 5,571 $26,355 30.0% $24,126 29.9% $77,968 25.7% $69,688 25.0% 9.2% 11.9% Mountain (2) 8 1,597 $3,695 4.2% $3,131 3.9% $19,720 6.5% $18,457 6.6% 18.0% 6.8% West North Central (3) 3 690 $2,625 3.0% $2,423 3.0% $7,496 2.5% $6,615 2.4% 8.4% 13.3% West South Central (4) 12 2,955 $7,428 8.5% $6,135 7.6% $30,539 10.1% $23,380 8.4% 21.1% 30.6% East North Central (5) 10 2,557 $7,366 8.4% $7,978 9.9% $20,613 6.8% $22,505 8.1% -7.7% -8.4% East South Central (6) 2 236 $778 0.9% $739 0.9% $2,466 0.8% $2,517 0.9% 5.3% -2.0% Middle Atlantic (7) 10 2,558 $9,784 11.1% $9,222 11.4% $26,157 8.6% $23,262 8.4% 6.1% 12.4% South Atlantic (8) 42 9,067 $27,354 31.1% $24,246 30.0% $113,694 37.5% $106,082 38.1% 12.8% 7.2% New England (9) 4 458 $953 1.1% $877 1.1% $2,118 0.7% $1,584 0.6% 8.7% 33.7% Canada 1 607 $1,528 1.7% $1,849 2.3% $2,539 0.8% $4,221 1.5% -17.4% -39.8%                         Total Portfolio 114 26,295 $87,866 100.0% $80,725 100.0% $303,309 100.0% $278,310 100.0% 8.8% 9.0%       (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     NOTE 1: The above pro forma table assumes the 114 hotel properties owned and included in continuing operations as of September 30, 2007 were owned as of the beginning of the periods presented. NOTE 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)     106 HOTELS NOT UNDER RENOVATION AND INCLUDED IN CONTINUING OPERATIONS AT SEPTEMBER 30, 2007 AS IF SUCH HOTELS WERE OWNED AS OF THE BEGINNING OF THE PERIODS PRESENTED:     HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:   3rd Quarter 2007 26.70% 3rd Quarter 2006   25.50% Variance   1.20%   HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:   Rooms 0.20% Food & Beverage and Other Departmental 0.72% Administrative & General 0.03% Sales & Marketing 0.13% Hospitality 0.01% Repair & Maintenance 0.11% Energy 0.20% Franchise Fee -0.34% Management Fee -0.12% Incentive Management Fee -0.32% Insurance 0.23% Property Taxes 0.46% Leases/Other   -0.10% Total   1.20%       NOTE 1: 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 (In Thousands) (Unaudited)   ALL 114 HOTELS OWNED AND INCLUDED IN CONTINUING OPERATIONS AS OF SEPTEMBER 30, 2007:       2006 2007 2007 2007   4th Quarter 1st Quarter 2nd Quarter 3rd Quarter TTM   Total Hotel Revenue $ 362,231 $ 327,544 $ 353,991 $ 338,565 $ 1,382,331 Hotel EBITDA $ 95,424 $ 91,870 $ 107,037 $ 87,866 $ 382,197 Hotel EBITDA Margin 26.3% 28.0% 30.2% 26.0% 27.6%   EBITDA % of Total TTM 25.0% 24.0% 28.0% 23.0% 100.0%   JV Interests in EBITDA $ 5,659 $ 7,567 $ 7,562 $ 5,246 $ 26,034     NOTE 1: The above pro forma table assumes that the 114 hotel properties owned and included in continuing operations as of September 30, 2007 were owned as of the beginning of the periods presented.   NOTE 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. Debt Summary As of September 30, 2007 (in millions)   Fixed-Rate Floating-Rate Total Debt Debt Debt   $487.1 million mortgage note payable secured by 32 hotel properties, matures between July 1, 2015 and February 1, 2016, at an average interest rate of 5.42% $ 455.1 $ - $ 455.1 $211.5 million term loan secured by 16 hotel properties, matures between December 11, 2014 and December 11, 2015, at an average interest rate of 5.73% 211.5 - 211.5 $300.0 million 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 - 50.0 50.0 $47.5 million secured credit facility secured by 1 hotel property, matures October 10, 2008, at an interest rate of LIBOR plus 1.0% to 1.5% depending on the outstanding balance - - - Mortgage note payable secured by one hotel property, matures December 1, 2017, at an interest rate of 7.24% through December 31, 2007 and 7.39% thereafter 51.3 - 51.3 Mortgage note payable secured by one hotel property, matures December 8, 2016, at an interest rate of 5.81% 101.0 - 101.0 Mortgage note payable secured by six hotel properties, matures December 11, 2009, at an interest rate of LIBOR plus 1.72%, with two one-year extension options - 184.0 184.0 $928.5 million mortgage loan secured by 28 hotel properties, matures April 11, 2017, at an average blended interest rate of 5.95% 928.5 - 928.5 $375.0 million loan secured by 18 hotels and mezzanine notes receivable, matures May 9, 2009, at an interest rate of LIBOR plus 1.65%, with three one-year extension options - 375.0 375.0 Mortgage loans assumed with acquisition of CNL portfolio, maturing between 2008 and 2025, with an average blended interest rate of 6.01%   434.7   -   434.7 Total Debt Excluding Premium $ 2,182.1 $ 609.0 $ 2,791.1 Mark-to-Market Premium 4.0 Plus Debt Attributable to Joint Venture Partners   124.6 Net Debt Including Premium $ 2,919.7   Percentage of Total   78.18%   21.82%   100.00%   Weighted Average Interest Rate at September 30, 2007   6.05% ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 114 Core Hotels (a)                 2007   2008 Rooms   Actual1st Quarter   Actual2nd Quarter   Actual3rd Quarter   Estimated4th Quarter   Estimated1st Quarter   Estimated2nd 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 Hyatt Dulles 316 x x x Sea Turtle Inn Jacksonville 193 x x x x x x Sheraton City Center - Indianapolis 371 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 Embassy Suites Philadelphia Airport 263 x x x Sheraton San Diego Mission Valley 260 x Hilton Tucson El Conquistador Golf Resort 321 x x x Hilton Minneapolis Airport 300 x x Residence Inn Jacksonville 120 x x Courtyard San Francisco Downtown 405 x x Courtyard Basking Ridge 235 x x TownePlace Suites Manhattan Beach 144 x x Sheraton Anchorage 375 x x Embassy Suites Dulles Int'l 150 x Embassy Suites Santa Clara - Silicon Valley 193 x x Hampton Inn Jacksonville 118 x x Hampton Inn Lawrenceville 86 x x Hilton Dallas - Lincoln Centre 375 x x Hyatt Regency Coral Gables 242 x x Hampton Inn Houston Galleria 150 x x Embassy Suites West Palm Beach 160 x x Hyatt Regency Orange County 654 x Courtyard Ft. Lauderdale Weston 174 x x Hilton Rye Town 335 x x Marriott Legacy Center 404 x 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 Marriott Bridgewater 347 x SpringHill Suites Philadelphia 199                               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.