AHT Ashford Hospitality Trust Inc

Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the third quarter ended September 30, 2006. The proforma performance measurements for Occupancy, ADR, RevPAR, and Hotel Operating Profit include the Company's 73 hotels. Unless otherwise stated, all reported results compare the third quarter ended September 30, 2006, to the third quarter ended September 30, 2005. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release. FINANCIAL HIGHLIGHTS Total revenue increased 25.4% to $126.3 million from $100.7 million Net income available to common shareholders increased 76.9% to $5.9 million from $3.4 million Net income available to common shareholders per share increased 12.5% to $0.09 from $0.08 Adjusted funds from operations (AFFO) increased 46.8% to $22.3 million from $15.2 million Cash available for distribution (CAD) increased 35.2% to $19.3 million from $14.3 million Declared quarterly common dividend of $0.20 per share Dividend coverage YTD reaches 127% of CAD STRONG INTERNAL GROWTH Proforma revenue per available room (RevPAR) increased 9.5% for hotels not under renovation on a 6.4% increase in ADR to $115.4 and a 293-basis point improvement in occupancy Proforma RevPAR increased 8.1% for all hotels on a 6.3% increase in ADR to $115.0 and 172-basis point improvement in occupancy Proforma same-property hotel operating profit for hotels not under renovation improved 11.6% Proforma same-property hotel operating profit margins for hotels not under renovation improved 124 basis points CAPITAL RECYCLING AND ASSET ALLOCATION Capex invested in third quarter and year-to-date totaled $10.7 million and $29.7 million, respectively Capex estimated for the fourth quarter of 2006 totals $10 to $20 million EXTERNAL GROWTH CONTINUES TO ENHANCE RETURNS Total enterprise value improved to $1.8 billion at September 30, 2006 Mezzanine and first mortgage loan portfolio totaled $97.6 million at September 30, 2006, with an average annual unleveraged yield of 13.5% Acquired Marriott Crystal City Gateway in Arlington, Virginia, for $107.2 million and planned capital improvements of $13.0 million Announced acquisition of Westin O'Hare in Chicago for $125 million and planned capital improvements of $6.1 million Announced acquisition of seven-hotel, upper-upscale, full-service portfolio for $267.2 million, and planned capital improvements of $35.0 to $40.0 million. PORTFOLIO REVPAR AND EBITDA MARGIN GROWTH REFLECT BENEFIT OF VALUE-ADDED RENOVATIONS As of September 30, 2006, the Company had a portfolio of direct hotel investments consisting of 73 properties, all of which were classified in continuing operations. During the third quarter, 67 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 73 hotels) and proforma not-under-renovation basis (67 hotels) is a measure that reflects a meaningful and more focused comparison of the operating results in its direct hotel portfolio. The Company's reporting by region and brand includes the results of all 73 hotels. Details of each category are provided in the tables attached to this release. RevPAR growth by region was led by: West South Central (6 hotels) with a 33.4% increase; East North Central (11) with 13.2%; Mountain (5) with 12.4%; New England (4) with 11.5%; Middle Atlantic (4) with 9.3%; West North Central (2) with 5.2%; Pacific (8) with 5.1%; East South Central (4) with 3.2%; and South Atlantic (29) with 2.6%. RevPAR growth by brand was led by: Radisson (6 hotels) with a 16.6% increase; Hilton (22) with 16.4%; InterContinental (2) with 10.3%; Starwood (2) with 5.1%; Marriott (37) with 3.6 %; Hyatt (2) with 0.1%; and independents (2) with a -0.6%. Ashford believes year-over-year Hotel EBITDA margin comparisons are more meaningful to gauge the performance of the Company�s hotels than sequential comparisons. The range of published estimates on the Company Hotel EBITDA margin growth averaged 340bp as compared to the Company�s actual performance of a 90bp improvement. Given the substantial seasonality in the Company�s portfolio, to help investors better understand this seasonality the Company has begun providing quarterly detail on its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and prior-year periods. Details of the quarterly calculations for the past two years are provided in tables attached to this release. For all 73 hotels as of September 30, 2006, Proforma Hotel EBITDA (adjusted as if all hotels were included in both periods) increased 9.2% to $34.7 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 90 basis points to 27.5%. Monty J. Bennett, President and CEO, commented, "The performance of our portfolio and the timing and level of investment activity in the third quarter matched our stated goals. We produced yet another quarter of significant RevPAR growth and continued to improve our hotel operating profit margins. After completing a $162 million offering in late July, we made commitments to invest the capital in assets consistent with our strategy, while retaining capacity for additional transactions. Our asset management and investment teams have positioned our portfolio in strong, growing markets with high quality hotels. FINANCING ACTIVITY LOWERS BORROWING COSTS At September 30, 2006, 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 35.3% based upon the Company's closing stock price of $11.93. As of September 30, 2006, the Company�s $754 million debt balance consisted of 100% of fixed-rate debt, with a total weighted average interest rate of 5.6%. The Company�s weighted average fixed-rate debt maturity is 9.1 years. On July 25, 2006, in an underwritten follow-on public offering, the Company issued 14,950,000 shares of its common stock at $11.40 per share, which generated net proceeds of approximately $162�million. The net proceeds were used to pay-down the outstanding balance of $129 million on the Company�s credit facilities. On September 8, 2006, the Company increased the maximum amount of its primary secured revolving credit facility to $150 million and reduced the interest rate to a range of 160 to 185 basis points over LIBOR. The facility matures in August 2008 with two one-year extension options. Subject to certain conditions, the credit facility can be increased to $200 million. THIRD QUARTER INVESTMENT ACTIVITY On July�13, 2006, the Company acquired the 697-room�Marriott Crystal City Gateway in Arlington, Virginia, for total consideration of $107.2�million. The consideration includes the assumption of approximately $53.3�million of existing debt at a fixed interest rate of 7.24% maturing in 2017, reimbursement of approximately $7.2�million of capital expenditure costs by the seller, and the issuance of approximately $42.7�million of limited partnership units in our operating partnership. The limited partnership units issued were priced at $11.20�per unit and are considered Class�B units. They have a fixed dividend rate on the $11.20 per unit price of 6.82% in years one through three and 7.2% thereafter, and have priority in payment of cash dividends over holders of common units and common stock. The units do not have a priority in liquidation, and after ten years either party may convert the units to common units. In addition, the Company paid approximately $2.5�million in cash in lieu of units and approximately $1.5�million in other net closing costs and adjustments. On September 6, 2006, the Company signed a definitive agreement to acquire the 525-room Westin O'Hare in Rosemont, Illinois, for $125 million in cash. Ashford intends to invest an additional $6.1 million in renovations over the first 24 months. On a trailing 12-month basis, the purchase price represents a cap rate of 6.5% on net operating income, an EBITDA yield of 7.8% and a 12.9x EBITDA multiple. Ashford will fund the acquisition with proceeds from its July 2006 follow-on offering and property-level debt. The acquisition is expected to close on or before November 9, 2006. On September 15, 2006, the Company signed a definitive agreement to acquire seven full-service, upper-upscale hotels in six states totaling 2,004 rooms for $267.2 million in cash. Ashford intends to invest approximately $35.0 to $40.0 million in revenue-generating brand improvements during the first 12 months. The purchase price represents a trailing 12-month cap rate of 6.0% on net operating income, an EBITDA yield of 7.5% and a 13.4x EBITDA multiple. Ashford will fund the acquisition with proceeds from its July 2006 follow-on offering along with property level financing. Ashford will change management of the hotels from an affiliate of Interstate Hotels and Resorts to an affiliate of Remington Lodging and Hospitality. The acquisition is expected to close on or before December 7, 2006. INVESTMENT OUTLOOK Mr. Bennett concluded, "The outlook for the lodging industry and for Ashford remains very optimistic. Looking ahead to the fourth quarter and to 2007, we believe we are in the best financial shape in three years. Combined with our proven internal growth strategies of renovations, repositioning and capital recycling, this favorable environment positions us well for a strong finish to 2006." INVESTOR CONFERENCE CALL AND SIMULCAST Ashford Hospitality Trust, Inc. will conduct a conference call at 11:00 a.m. ET on November�2,�2006, to discuss the third quarter results. The number to call for this interactive teleconference is 913-981-5520. A seven-day replay of the conference call will be available by dialing 719-457-0820 and entering the confirmation number, 7598564. The Company will also provide an online simulcast and rebroadcast of its third quarter 2006 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?id=35709 on November 2, 2006, beginning at 11:00 a.m. eastern time. 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 be helpful 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 fund 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, our business and investment strategy, timing for closings, our understanding of our competition, 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 the section entitled "Risk Factors" in Ashford's Registration Statement on Form S-3, (File Number 333-131878), and from time to time, in Ashford's other filings with the Securities and Exchange Commission. 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, 2006 � September 30, 2005 � September 30, 2006 � September 30, 2005 � REVENUE Rooms $ 98,585� $ 79,098� $ 285,162� $ 175,274� Food and beverage 18,796� 13,371� 54,079� 35,597� Other 4,992� 4,139� 14,188� 9,699� Total hotel revenue 122,373� 96,608� 353,429� 220,570� � Interest income from notes receivable 3,652� 3,825� 11,518� 9,488� Asset management fees from affiliates 299� 292� 934� 940� Total Revenue 126,324� 100,725� 365,881� 230,998� � EXPENSES Hotel operating expenses Rooms 22,559� 17,917� 62,895� 39,079� Food and beverage 14,666� 10,673� 41,337� 26,952� Other direct 2,279� 1,623� 6,033� 3,843� Indirect 36,757� 30,346� 105,356� 68,559� Management fees 4,668� 3,820� 13,884� 7,693� Total hotel expenses 80,929� 64,379� 229,505� 146,126� � Property taxes, insurance, and other 7,439� 5,553� 19,887� 12,004� Depreciation and amortization 13,812� 9,045� 37,120� 19,185� Loss on reclassification from discontinued to continuing -� -� 863� -� Corporate general and administrative: Stock-based compensation 1,411� 952� 4,120� 2,484� Other corporate and administrative 3,398� 2,931� 10,838� 7,923� Total Operating Expenses 106,989� 82,860� 302,333� 187,722� � � � � OPERATING INCOME 19,335� 17,865� 63,548� 43,276� � Interest income 1,005� 270� 2,065� 727� Interest expense (10,940) (11,443) (33,703) (22,217) Amortization of loan costs (495) (1,136) (1,470) (3,123) Write-off of loan costs and exit fees -� -� (788) (151) Loss on debt extinguishment -� -� -� (2,257) � � � � INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 8,905� 5,556� 29,652� 16,255� � Benefit from (provision for) income taxes 929� (1,235) 661� (1,213) Minority interest (1,184) (873) (4,565) (3,068) INCOME FROM CONTINUING OPERATIONS 8,650� 3,448� 25,748� 11,974� � Income from discontinued operations, net -� 2,474� 1,387� 2,463� � NET INCOME 8,650� 5,922� 27,135� 14,437� Preferred dividends 2,719� 2,570� 8,156� 6,584� NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 5,931� $ 3,352� $ 18,979� $ 7,853� � Basic and Diluted: Income From Continuing Operations Per Share Available To Common Shareholders $ 0.09� $ 0.02� $ 0.30� $ 0.14� Income From Discontinued Operations Per Share $ -� $ 0.06� $ 0.02� $ 0.06� Net Income Per Share Available To Common Shareholders $ 0.09� $ 0.08� $ 0.32� $ 0.20� Weighted Average Common Shares Outstanding 67,157,286� 43,145,657� 58,320,142� 39,199,479� ASHFORD HOSPITALITY TRUST, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited) � September 30, December 31, 2006� 2005� � ASSETS Investment in hotel properties, net $ 1,351,950� $ 1,106,668� Cash and cash equivalents 111,690� 57,995� Restricted cash 15,387� 27,842� Accounts receivable, net of allowance of $355 and $366, respectively 21,819� 21,355� Inventories 1,387� 1,186� Assets held for sale 2,451� 117,873� Notes receivable 97,357� 107,985� Deferred costs, net 12,822� 13,975� Prepaid expenses 4,451� 9,662� Other assets 33,228� 4,014� Intangible assets, net 1,057� 1,181� Due from third-party hotel managers 19,997� 12,274� Due from affiliates 753� 476� Total assets $ 1,674,349� $ 1,482,486� � � LIABILITIES AND OWNERS' EQUITY Indebtedness $ 753,654� $ 908,623� Capital leases payable 221� 453� Accounts payable 13,322� 9,984� Accrued expenses 28,314� 21,054� Dividends payable 19,880� 13,703� Deferred income 304� 338� Deferred incentive management fees 4,655� -� Unfavorable contract liability 15,599� -� Due to third-party hotel managers 1,929� 1,385� Due to affiliates 1,829� 5,654� Total liabilities 839,707� 961,194� � Commitments and contingencies Minority interest 118,832� 87,969� Preferred stock, $0.01 par value: Series B Cumulative Convertible Redeemable Preferred Stock, 7,447,865 issued and outstanding at September 30, 2006 and December 31, 2005 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, 2006 and December 31, 2005 23� 23� Common stock, $0.01 par value, 200,000,000 shares authorized, 72,321,695 and 43,831,394 shares issued and outstanding at September 30, 2006 and December 31, 2005, respectively 723� 438� Additional paid-in capital 700,625� 403,919� Unearned compensation -� (4,792) Accumulated other comprehensive income 369� 1,372� Accumulated deficit (60,930) (42,637) Total owners' equity 640,810� 358,323� � � Total liabilities and owners' equity $ 1,674,349� $ 1,482,486� ASHFORD HOSPITALITY TRUST, INC. EBITDA (In Thousands) (Unaudited) � Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, 2006 September 30, 2005 September 30, 2006 September 30, 2005 � Net income $ 8,650� $ 5,922� $ 27,135� $ 14,437� � Add back: Interest income (1,005) (270) (2,065) (727) Interest expense and amortization of loan costs 11,435� 12,579� 35,173� 25,340� Minority interest 1,184� 1,500� 4,860� 3,690� Depreciation and amortization 13,812� 9,045� 37,120� 19,185� Benefit from (provision for) income taxes (929) 1,069� (692) 1,047� 24,497� 23,923� 74,396� 48,535� � � � � EBITDA $ 33,147� $ 29,845� $ 101,531� $ 62,972� � 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 and the loss from reclassification from discontinued to continuing of approximately $863,000. � For the nine months ended September 30, 2005, EBITDA has not been adjusted to add back the loss on debt extinguishment of approximately $2.3 million and the write-off of loan costs and exit fees of approximately $151,000. 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, 2006 September 30, 2005 September 30, 2006 September 30, 2005 � Net income available to common shareholders $ 5,931� $ 3,352� $ 18,979� $ 7,853� � Plus real estate depreciation and amortization 13,734� 9,023� 36,887� 19,126� Remove minority interest 1,184� 1,500� 4,860� 3,690� FFO available to common shareholders $ 20,849� $ 13,875� $ 60,726� $ 30,669� � Add back dividends on convertible preferred stock 1,490� 1,341� 4,469� 2,897� Add back write-off of loan costs and exit fees -� -� 788� 151� Add back loss on debt extinguishment -� -� -� 2,257� Add back loss from reclassification of discontinued to continuing -� -� 863� -� Adjusted FFO $ 22,339� $ 15,216� $ 66,846� $ 35,974� � Adjusted FFO per diluted share available to common shareholders $ 0.25� $ 0.25� $ 0.86� $ 0.68� � Diluted weighted average shares outstanding 88,343,497� 61,834,146� 77,957,660� 52,813,148� ASHFORD HOSPITALITY TRUST, INC. CASH AVAILABLE FOR DISTRIBUTION ("CAD") (In Thousands, Except Per Share Amounts) (Unaudited) � Three Months Three Months Ended Ended September 30, 2006 (per diluted share) September 30, 2005 (per diluted share) � Net income available to common shareholders $ 5,931� $ 0.07� $ 3,352� $ 0.05� Add back dividends on convertible preferred stock 1,490� 0.02� 1,341� 0.02� Total $ 7,421� $ 0.08� $ 4,693� $ 0.08� � Plus real estate depreciation and amortization 13,734� $ 0.16� 9,023� $ 0.15� Remove minority interest 1,184� 0.01� 1,500� 0.02� Plus stock-based compensation 1,411� 0.02� 952� 0.02� Plus amortization of loan costs 495� 0.01� 1,136� 0.02� Plus write-off of loan costs -� 0.00� -� 0.00� Plus loss on debt extinguishment -� 0.00� -� 0.00� Plus loss from reclassification of discontinued to continuing -� 0.00� -� 0.00� Less debt premium amortization to reduce interest expense (76) (0.00) (194) (0.00) Less capital improvements reserve (4,864) (0.06) (2,832) (0.05) CAD $ 19,305� $ 0.22� $ 14,278� $ 0.23� � � Nine Months Nine Months Ended Ended September 30, 2006 (per diluted share) September 30, 2005 (per diluted share) � Net income available to common shareholders $ 18,979� $ 0.24� $ 7,853� $ 0.15� Add back dividends on convertible preferred stock 4,469� 0.06� 2,897� 0.05� Total $ 23,448� $ 0.30� $ 10,750� $ 0.20� � Plus real estate depreciation and amortization 36,887� $ 0.47� 19,126� $ 0.36� Remove minority interest 4,860� 0.06� 3,690� 0.07� Plus stock-based compensation 4,120� 0.05� 2,484� 0.05� Plus amortization of loan costs 1,470� 0.02� 3,123� 0.06� Plus write-off of loan costs 788� 0.01� 151� 0.00� Plus loss on debt extinguishment -� -� 2,257� 0.04� Plus loss from reclassification of discontinued to continuing 863� 0.01� -� 0.00� Less debt premium amortization to reduce interest expense (76) (0.00) (463) (0.01) Less capital improvements reserve (12,816) (0.16) (7,230) (0.14) CAD $ 59,544� $ 0.76� $ 33,888� $ 0.64� ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA (Unaudited) � � Three Months Ended Nine Months Ended September 30, September 30, 2006� 2005� % Variance 2006� 2005� % Variance � ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: � Room revenues (1) $ 101,192,627� $ 95,127,144� 6.38% $ 311,763,010� $ 284,997,523� 9.39% RevPAR (1) $ 87.43� $ 80.86� 8.13% $ 89.96� $ 81.35� 10.58% Occupancy 76.03% 74.74% 1.72% 75.65% 73.84% 2.45% ADR $ 114.99� $ 108.18� 6.30% $ 118.91� $ 110.17� 7.93% � � NOTE: The above pro forma table assumes the 73 hotel properties owned at September 30, 2006 were owned as of the beginning of the periods presented. � � Three Months Ended Nine Months Ended September 30, September 30, 2006� 2005� % Variance 2006� 2005� % Variance � ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: � Room revenues (1) $ 95,669,278� $ 88,919,636� 7.59% $ 290,588,824� $ 264,132,297� 10.02% RevPAR (1) $ 89.11� $ 81.38� 9.50% $ 90.38� $ 81.20� 11.30% Occupancy 77.20% 75.00% 2.93% 76.08% 73.83% 3.05% ADR $ 115.43� $ 108.51� 6.38% $ 118.80� $ 109.99� 8.01% � � NOTE: The above pro forma table assumes the 67 hotel properties owned at September 30, 2006 but not under renovation for the three and nine months ended September 30, 2006 were owned as of the beginning of the periods presented. � � Excluded Hotels Under Renovation: Courtyard Crystal City Reagan Airport, SpringHill Suites Kennesaw, SpringHill Suites Jacksonville, Sea Turtle Inn Jacksonville, Courtyard Palm Desert, Courtyard Atlanta Alpharetta � (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 three and nine months ended September 30, 2006 compared to the same 2005 periods. ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel RevPAR by Region (Unaudited) � Three Months Ended September 30, Nine Months Ended September 30, Percent Change in RevPAR Region Number of Hotels Number of Rooms 2006� 2005� 2006� 2005� Quarter YTD � Pacific (1) 8� 1,966 $99.64 $94.80 $102.38 $94.62 5.1% 8.2% Mountain (2) 5� 869 $100.11 $89.03 $99.34 $90.82 12.4% 9.4% West North Central (3) 2� 390 $82.18 $78.13 $76.13 $71.61 5.2% 6.3% West South Central (4) 6� 1,082 $92.48 $69.34 $89.01 $69.10 33.4% 28.8% East North Central (5) 11� 1,682 $69.95 $61.79 $66.02 $58.18 13.2% 13.5% East South Central (6) 4� 573 $67.37 $65.29 $64.48 $60.87 3.2% 5.9% Middle Atlantic (7) 4� 685 $97.08 $88.84 $80.15 $71.16 9.3% 12.6% South Atlantic (8) 29� 5,226 $89.04 $86.75 $100.82 $93.45 2.6% 7.9% New England (9) 4� 490 $64.36 $57.73 $51.56 $46.65 11.5% 10.5% � � � � � � � � Total Portfolio 73� 12,963 $87.43 $80.86 $89.96 $81.35 8.1% 10.6% � � � (1) Includes California (2) Includes Nevada, Arizona, New Mexico and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts and Maine � � NOTE: The above pro forma table assumes the 73 hotel properties owned as of September 30, 2006 were owned as of the beginning of the periods presented. ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel RevPAR by Brand (Unaudited) � Three Months Ended September 30, Nine Months Ended September 30, Percent Change in RevPAR Brand Number of Hotels Number of Rooms 2006� 2005� 2006� 2005� Quarter YTD � Hilton 22� 3,638� $88.15� $75.74� $88.87� $77.28� 16.4% 15.0% Hyatt 2� 970� $96.10� $95.97� $99.00� $93.86� 0.1% 5.5% InterContinental 2� 420� $118.83� $107.70� $136.27� $120.02� 10.3% 13.5% Independent 2� 317� $79.87� $80.34� $82.41� $85.54� -0.6% -3.7% Marriott 37� 5,855� $87.08� $84.06� $93.88� $86.13� 3.6% 9.0% Radisson 6� 1,354� $68.50� $58.74� $60.10� $54.62� 16.6% 10.0% Starwood 2� 409� $101.64� $96.71� $82.77� $71.58� 5.1% 15.6% � � � � � � � � Total Portfolio 73� 12,963� $87.43� $80.86� $89.96� $81.35� 8.1% 10.6% � NOTE: The above pro forma table assumes the 73 hotel properties owned as of September 30, 2006 were owned as of the beginning of the periods presented. 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, 2006 September 30, 2005 % Variance September 30, 2006 September 30, 2005 % Variance � REVENUE Rooms (1) $ 101,193 $ 95,127 6.38% $ 311,763 $ 284,998 9.39% Food and beverage 20,204 19,491 3.66% 66,294 62,988 5.25% Other 4,535 4,613 -1.69% 13,702 13,279 3.19% Total hotel revenue 125,932 119,231 5.62% 391,759 361,265 8.44% � EXPENSES Hotel operating expenses Rooms 21,930 20,925 4.80% 65,917 61,363 7.42% Food and beverage 15,679 15,598 0.52% 50,103 47,556 5.36% Other direct 2,348 2,298 2.18% 6,888 6,553 5.11% Indirect 38,334 36,603 4.73% 114,932 106,717 7.70% Management fees, includes base and incentive fees 5,276 5,488 -3.86% 20,513 17,542 16.94% Total hotel operating expenses 83,567 80,912 3.28% 258,353 239,731 7.77% � Property taxes, insurance, and other 7,690 6,558 17.26% 21,476 19,028 12.87% � � � � � � HOTEL OPERATING PROFIT (Hotel EBITDA) $ 34,675 $ 31,761 9.17% $ 111,930 $ 102,506 9.19% � NOTE: The above pro forma table assumes the 73 hotel properties owned at September 30, 2006 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, 2006 September 30, 2005 % Variance September 30, 2006 September 30, 2005 % Variance � REVENUE Rooms (1) $ 95,669 $ 88,920 7.59% $ 290,589 $ 264,132 10.02% Food and beverage 19,080 18,473 3.29% 62,227 59,489 4.60% Other 4,334 4,307 0.63% 12,958 12,453 4.06% Total hotel revenue 119,083 111,700 6.61% 365,774 336,074 8.84% � EXPENSES Hotel operating expenses Rooms 20,557 19,534 5.24% 61,439 57,114 7.57% Food and beverage 14,783 14,694 0.61% 46,998 44,764 4.99% Other direct 2,268 2,225 1.93% 6,649 6,351 4.69% Indirect 36,178 34,535 4.76% 108,436 100,567 7.82% Management fees, includes base and incentive fees 5,150 5,077 1.44% 19,101 16,184 18.02% Total hotel operating expenses 78,936 76,065 3.77% 242,623 224,980 7.84% � Property taxes, insurance, and other 7,211 6,122 17.79% 19,934 17,609 13.20% � � � � � � HOTEL OPERATING PROFIT (Hotel EBITDA) $ 32,936 $ 29,513 11.60% $ 103,217 $ 93,485 10.41% � NOTE: The above pro forma table assumes the 67 hotel properties owned at September 30, 2006 but not under renovation for the three and nine months ended September 30, 2006 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 three and nine months ended September 30, 2006 compared to the same 2005 periods. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT MARGIN (Unaudited) � ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: � � HOTEL OPERATING PROFIT (EBITDA) MARGIN: � 3rd Quarter 2006 27.66% 3rd Quarter 2005 26.42% Variance 1.24% � HOTEL OPERATING PROFIT (EBITDA) MARGIN VARIANCE BREAKDOWN: � Rooms 0.23% Food & Beverage and Other Departmental 0.83% Administrative & General 0.11% Sales & Marketing 0.30% Hospitality -0.02% Repair & Maintenance 0.26% Energy 0.05% Franchise Fee -0.39% Management Fee 0.02% Incentive Management Fee 0.20% Insurance -0.10% Property Taxes -0.47% Leases/Other 0.23% Total 1.24% ASHFORD HOSPITALITY TRUST, INC. SEASONALITY TABLE (In Thousands) (Unaudited) � � PRO FORMA RESULTS ALL 73 HOTELS OWNED AS OF SEPTEMBER 30, 2006: � � � � � � 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year End � 2005� Total Hotel Revenue 115,511� 126,523� 119,231� 133,670� 494,935� Hotel EBITDA 32,826� 37,914� 31,761� 33,267� 135,768� Hotel EBITDA Margin 28.4% 30.0% 26.6% 24.9% 27.4% � � 2006� Total Hotel Revenue 126,190� 139,637� 125,932� Hotel EBITDA 34,305� 42,950� 34,675� Hotel EBITDA Margin 27.2% 30.8% 27.5% � � NOTE: The above pro forma table assumes that the 73 hotel properties owned at September 30, 2006 were owned as of the beginning of the periods presented. ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel Operating Profit by Region (In Thousands) (Unaudited) � Three Months Ended Percent Change in September 30, Nine Months Ended September 30, Hotel Operating Profit Region Number of Hotels Number of Rooms 2006� % Total 2005� % Total 2006� % Total 2005� % Total Quarter YTD � Pacific (1) 8� 1,966� $5,404� 15.6% $5,932� 18.7% $18,604 16.6% $19,190 18.7% -8.9% -3.1% Mountain (2) 5� 869� $3,059� 8.8% $2,475� 7.8% $8,893 7.9% $7,638 7.5% 23.6% 16.4% West North Central (3) 2� 390� $1,227� 3.5% $1,131� 3.6% $3,170 2.8% $2,928 2.9% 8.5% 8.3% West South Central (4) 6� 1,082� $2,934� 8.5% $2,279� 7.2% $8,086 7.2% $7,058 6.9% 28.7% 14.6% East North Central (5) 11� 1,682� $4,117� 11.9% $2,817� 8.9% $10,730 9.6% $8,394 8.2% 46.1% 27.8% East South Central (6) 4� 573� $1,157� 3.3% $1,154� 3.6% $3,259 2.9% $3,105 3.0% 0.3% 5.0% Middle Atlantic (7) 4� 685� $2,256� 6.5% $1,600� 5.0% $4,419 3.9% $2,807 2.7% 41.0% 57.4% South Atlantic (8) 29� 5,226� $13,640� 39.3% $13,535� 42.6% $53,481 47.8% $50,092 48.9% 0.8% 6.8% New England (9) 4� 490� $881� 2.5% $838� 2.6% $1,288 1.2% $1,294 1.3% 5.1% -0.5% � � � � � � � � � � � � Total Portfolio 73� 12,963� $34,675� 100.0% $31,761� 100.0% $111,930 100.0% $102,506 100.0% 9.2% 9.2% � � (1) Includes California (2) Includes Nevada, Arizona, New Mexico and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts and Maine � � NOTE: The above pro forma table assumes the 73 hotel properties owned as of September 30, 2006 were owned as of the beginning of the periods presented. ASHFORD HOSPITALITY TRUST, INC. Debt Summary As of September 30, 2006 (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 5.41% $ 487.1� $ -� $ 487.1� $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� $150.0 million secured credit facility secured by 9 hotel properties, matures August 16, 2008, at an interest rate of LIBOR plus a range of 1.6% to 1.85% depending on the loan-to-value ratio -� -� -� $100.0 million secured credit facility secured by 8 mezzanine notes receivable, matures December 23, 2008, at an interest rate of LIBOR plus a range of 1.5% to 2.75% depending on the loan-to-value ratio and collateral pledged -� -� -� $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 53.0� -� 53.0� Total Debt Excluding Premium $ 751.6� $ -� $ 751.6� Mark-to-Market Premium 2.0� Total Debt Including Premium $ 753.6� � Percentage of Total 100.00% 0.00% 100.00% � Weighted Average Interest Rate at September 30, 2006 5.59% ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 73 Core Hotels � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 2004� � 2005� � 2006� � 2007� Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Est. Est. Est. Est. Est. Rooms 1Q � 2Q � 3Q � 4Q � 1Q � 2Q � 3Q � 4Q � 1Q � 2Q � 3Q � 4Q � 1Q � 2Q � 3Q � 4Q � Doubletree Suites Columbus 194� x x x Doubletree Suites Dayton 137� x x x Embassy Suites East Syracuse 215� x x x Embassy Suites Phoenix Airport 229� x x x Sheraton Bucks County 187� x x x x Hyatt Regency Orange County 654� x Hampton Inn Mall of Georgia 92� x x Hampton Inn Terre Haute 112� x x x Hampton Inn Horse Cave 101� x x x Hampton Inn Evansville 141� x x x Hilton St. Petersburg Bayfront 333� x x x Fairfield Inn Evansville West 110� x x x Fairfield Inn Princeton 73� x x x Courtyard Bloomington 117� x x x Residence Inn Evansville 78� x x x x x Courtyard Columbus Tipton Lakes 90� x x x x x Radisson Milford 173� x x x x Residence Inn Salt Lake City 144� x Hilton Fort Worth 294� x x x x Residence Inn Palm Desert 130� x x Historic Inns of Annapolis 124� x x x x Embassy Suites Houston 150� x x Radisson Rockland 127� x x Residence Inn San Diego Sorrento Mesa 150� x x Radisson Hotel Airport - Indianapolis 259� x x Hilton Nassau Bay - Clear Lake 243� x x Sheraton Minneapolis West 222� x x x Embassy Suites West Palm Beach 160� x x x Radisson City Center - Indianapolis 371� x x Crowne Plaza Beverly Hills 260� x x Residence Inn Fairfax Merrifield 159� x Courtyard Crystal City Reagan Airport 272� x x Courtyard Palm Desert 151� x SpringHill Suites Kennesaw 90� x x x SpringHill Suites Jacksonville 102� x x x Sea Turtle Inn Jacksonville 193� x x x x x x Courtyard Atlanta Alpharetta 154� x x x Marriott Crystal Gateway 697� x x x x Hilton Santa Fe 157� x x x x SpringHill Suites BWI Airport 133� x x x SpringHill Suites Centreville 136� x x x SpringHill Suites Gaithersburg 162� x x x Courtyard Overland Park 168� x x x x Hilton Garden Inn Jacksonville 119� x x x Hyatt Dulles 316� x x x x TownePlace Suites Miami Lakes 95� x x x TownePlace Suites Ft. Worth 95� x x x TownePlace Suites Miami Airport 95� x x x TownePlace Suites Portland Scarborough 95� x x x Hampton Inn Lawrenceville 86� x x x Homewood Suites Mobile 86� x x x SpringHill Suites Mall of Georgia 96� x x x JW Marriott San Francisco 338� x x x ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar (cont.) 73 Core Hotels � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 2004� � 2005� � 2006� � 2007� Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Est. Est. Est. Est. Est. Rooms � 1Q � 2Q � 3Q � 4Q � 1Q � 2Q � 3Q � 4Q � 1Q � 2Q � 3Q � 4Q � 1Q � 2Q � 3Q � 4Q TownePlace Suites Newark Silicon Valley 127� x TownePlace Suites Mt. Laurel 95� x SpringHill Suites Charlotte 136� x SpringHill Suites Raleigh Airport 120� x Courtyard Ft. Lauderdale Weston 174� Courtyard Foothill Ranch Irvine 156� Embassy Suites Austin Arboretum 150� Embassy Suites Dallas Galleria 150� Embassy Suites Dulles Int'l 150� Embassy Suites Flagstaff 119� Fairfield Inn and Suites Kennesaw 87� Crowne Plaza La Concha - Key West 160� Radisson Cincinnati Riverfront 236� Radisson Hotel MacArthur Airport 188� Residence Inn Orlando Sea World 350� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the third quarter ended September 30, 2006. The proforma performance measurements for Occupancy, ADR, RevPAR, and Hotel Operating Profit include the Company's 73 hotels. Unless otherwise stated, all reported results compare the third quarter ended September 30, 2006, to the third quarter ended September 30, 2005. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release. FINANCIAL HIGHLIGHTS -- Total revenue increased 25.4% to $126.3 million from $100.7 million -- Net income available to common shareholders increased 76.9% to $5.9 million from $3.4 million -- Net income available to common shareholders per share increased 12.5% to $0.09 from $0.08 -- Adjusted funds from operations (AFFO) increased 46.8% to $22.3 million from $15.2 million -- Cash available for distribution (CAD) increased 35.2% to $19.3 million from $14.3 million -- Declared quarterly common dividend of $0.20 per share -- Dividend coverage YTD reaches 127% of CAD STRONG INTERNAL GROWTH -- Proforma revenue per available room (RevPAR) increased 9.5% for hotels not under renovation on a 6.4% increase in ADR to $115.4 and a 293-basis point improvement in occupancy -- Proforma RevPAR increased 8.1% for all hotels on a 6.3% increase in ADR to $115.0 and 172-basis point improvement in occupancy -- Proforma same-property hotel operating profit for hotels not under renovation improved 11.6% -- Proforma same-property hotel operating profit margins for hotels not under renovation improved 124 basis points CAPITAL RECYCLING AND ASSET ALLOCATION -- Capex invested in third quarter and year-to-date totaled $10.7 million and $29.7 million, respectively -- Capex estimated for the fourth quarter of 2006 totals $10 to $20 million EXTERNAL GROWTH CONTINUES TO ENHANCE RETURNS -- Total enterprise value improved to $1.8 billion at September 30, 2006 -- Mezzanine and first mortgage loan portfolio totaled $97.6 million at September 30, 2006, with an average annual unleveraged yield of 13.5% -- Acquired Marriott Crystal City Gateway in Arlington, Virginia, for $107.2 million and planned capital improvements of $13.0 million -- Announced acquisition of Westin O'Hare in Chicago for $125 million and planned capital improvements of $6.1 million -- Announced acquisition of seven-hotel, upper-upscale, full-service portfolio for $267.2 million, and planned capital improvements of $35.0 to $40.0 million. PORTFOLIO REVPAR AND EBITDA MARGIN GROWTH REFLECT BENEFIT OF VALUE-ADDED RENOVATIONS As of September 30, 2006, the Company had a portfolio of direct hotel investments consisting of 73 properties, all of which were classified in continuing operations. During the third quarter, 67 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 73 hotels) and proforma not-under-renovation basis (67 hotels) is a measure that reflects a meaningful and more focused comparison of the operating results in its direct hotel portfolio. The Company's reporting by region and brand includes the results of all 73 hotels. Details of each category are provided in the tables attached to this release. -- RevPAR growth by region was led by: West South Central (6 hotels) with a 33.4% increase; East North Central (11) with 13.2%; Mountain (5) with 12.4%; New England (4) with 11.5%; Middle Atlantic (4) with 9.3%; West North Central (2) with 5.2%; Pacific (8) with 5.1%; East South Central (4) with 3.2%; and South Atlantic (29) with 2.6%. -- RevPAR growth by brand was led by: Radisson (6 hotels) with a 16.6% increase; Hilton (22) with 16.4%; InterContinental (2) with 10.3%; Starwood (2) with 5.1%; Marriott (37) with 3.6 %; Hyatt (2) with 0.1%; and independents (2) with a -0.6%. Ashford believes year-over-year Hotel EBITDA margin comparisons are more meaningful to gauge the performance of the Company's hotels than sequential comparisons. The range of published estimates on the Company Hotel EBITDA margin growth averaged 340bp as compared to the Company's actual performance of a 90bp improvement. Given the substantial seasonality in the Company's portfolio, to help investors better understand this seasonality the Company has begun providing quarterly detail on its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and prior-year periods. Details of the quarterly calculations for the past two years are provided in tables attached to this release. For all 73 hotels as of September 30, 2006, Proforma Hotel EBITDA (adjusted as if all hotels were included in both periods) increased 9.2% to $34.7 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 90 basis points to 27.5%. Monty J. Bennett, President and CEO, commented, "The performance of our portfolio and the timing and level of investment activity in the third quarter matched our stated goals. We produced yet another quarter of significant RevPAR growth and continued to improve our hotel operating profit margins. After completing a $162 million offering in late July, we made commitments to invest the capital in assets consistent with our strategy, while retaining capacity for additional transactions. Our asset management and investment teams have positioned our portfolio in strong, growing markets with high quality hotels. FINANCING ACTIVITY LOWERS BORROWING COSTS At September 30, 2006, 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 35.3% based upon the Company's closing stock price of $11.93. As of September 30, 2006, the Company's $754 million debt balance consisted of 100% of fixed-rate debt, with a total weighted average interest rate of 5.6%. The Company's weighted average fixed-rate debt maturity is 9.1 years. On July 25, 2006, in an underwritten follow-on public offering, the Company issued 14,950,000 shares of its common stock at $11.40 per share, which generated net proceeds of approximately $162 million. The net proceeds were used to pay-down the outstanding balance of $129 million on the Company's credit facilities. On September 8, 2006, the Company increased the maximum amount of its primary secured revolving credit facility to $150 million and reduced the interest rate to a range of 160 to 185 basis points over LIBOR. The facility matures in August 2008 with two one-year extension options. Subject to certain conditions, the credit facility can be increased to $200 million. THIRD QUARTER INVESTMENT ACTIVITY On July 13, 2006, the Company acquired the 697-room Marriott Crystal City Gateway in Arlington, Virginia, for total consideration of $107.2 million. The consideration includes the assumption of approximately $53.3 million of existing debt at a fixed interest rate of 7.24% maturing in 2017, reimbursement of approximately $7.2 million of capital expenditure costs by the seller, and the issuance of approximately $42.7 million of limited partnership units in our operating partnership. The limited partnership units issued were priced at $11.20 per unit and are considered Class B units. They have a fixed dividend rate on the $11.20 per unit price of 6.82% in years one through three and 7.2% thereafter, and have priority in payment of cash dividends over holders of common units and common stock. The units do not have a priority in liquidation, and after ten years either party may convert the units to common units. In addition, the Company paid approximately $2.5 million in cash in lieu of units and approximately $1.5 million in other net closing costs and adjustments. On September 6, 2006, the Company signed a definitive agreement to acquire the 525-room Westin O'Hare in Rosemont, Illinois, for $125 million in cash. Ashford intends to invest an additional $6.1 million in renovations over the first 24 months. On a trailing 12-month basis, the purchase price represents a cap rate of 6.5% on net operating income, an EBITDA yield of 7.8% and a 12.9x EBITDA multiple. Ashford will fund the acquisition with proceeds from its July 2006 follow-on offering and property-level debt. The acquisition is expected to close on or before November 9, 2006. On September 15, 2006, the Company signed a definitive agreement to acquire seven full-service, upper-upscale hotels in six states totaling 2,004 rooms for $267.2 million in cash. Ashford intends to invest approximately $35.0 to $40.0 million in revenue-generating brand improvements during the first 12 months. The purchase price represents a trailing 12-month cap rate of 6.0% on net operating income, an EBITDA yield of 7.5% and a 13.4x EBITDA multiple. Ashford will fund the acquisition with proceeds from its July 2006 follow-on offering along with property level financing. Ashford will change management of the hotels from an affiliate of Interstate Hotels and Resorts to an affiliate of Remington Lodging and Hospitality. The acquisition is expected to close on or before December 7, 2006. INVESTMENT OUTLOOK Mr. Bennett concluded, "The outlook for the lodging industry and for Ashford remains very optimistic. Looking ahead to the fourth quarter and to 2007, we believe we are in the best financial shape in three years. Combined with our proven internal growth strategies of renovations, repositioning and capital recycling, this favorable environment positions us well for a strong finish to 2006." INVESTOR CONFERENCE CALL AND SIMULCAST Ashford Hospitality Trust, Inc. will conduct a conference call at 11:00 a.m. ET on November 2, 2006, to discuss the third quarter results. The number to call for this interactive teleconference is 913-981-5520. A seven-day replay of the conference call will be available by dialing 719-457-0820 and entering the confirmation number, 7598564. The Company will also provide an online simulcast and rebroadcast of its third quarter 2006 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?id=35709 on November 2, 2006, beginning at 11:00 a.m. eastern time. 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 be helpful 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 fund 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, our business and investment strategy, timing for closings, our understanding of our competition, 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 the section entitled "Risk Factors" in Ashford's Registration Statement on Form S-3, (File Number 333-131878), and from time to time, in Ashford's other filings with the Securities and Exchange Commission. 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. -0- *T 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 September September September 30, 2006 30, 2005 30, 2006 30, 2005 ------------------------------------------------- REVENUE Rooms $98,585 $79,098 $285,162 $175,274 Food and beverage 18,796 13,371 54,079 35,597 Other 4,992 4,139 14,188 9,699 ------------ ------------ ----------- ----------- Total hotel revenue 122,373 96,608 353,429 220,570 Interest income from notes receivable 3,652 3,825 11,518 9,488 Asset management fees from affiliates 299 292 934 940 ------------ ------------ ----------- ----------- Total Revenue 126,324 100,725 365,881 230,998 EXPENSES Hotel operating expenses Rooms 22,559 17,917 62,895 39,079 Food and beverage 14,666 10,673 41,337 26,952 Other direct 2,279 1,623 6,033 3,843 Indirect 36,757 30,346 105,356 68,559 Management fees 4,668 3,820 13,884 7,693 ------------ ------------ ----------- ----------- Total hotel expenses 80,929 64,379 229,505 146,126 Property taxes, insurance, and other 7,439 5,553 19,887 12,004 Depreciation and amortization 13,812 9,045 37,120 19,185 Loss on reclassification from discontinued to continuing - - 863 - Corporate general and administrative: Stock-based compensation 1,411 952 4,120 2,484 Other corporate and administrative 3,398 2,931 10,838 7,923 ------------ ------------ ----------- ----------- Total Operating Expenses 106,989 82,860 302,333 187,722 ------------ ------------ ----------- ----------- OPERATING INCOME 19,335 17,865 63,548 43,276 Interest income 1,005 270 2,065 727 Interest expense (10,940) (11,443) (33,703) (22,217) Amortization of loan costs (495) (1,136) (1,470) (3,123) Write-off of loan costs and exit fees - - (788) (151) Loss on debt extinguishment - - - (2,257) ------------ ------------ ----------- ----------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 8,905 5,556 29,652 16,255 Benefit from (provision for) income taxes 929 (1,235) 661 (1,213) Minority interest (1,184) (873) (4,565) (3,068) ------------ ------------ ----------- ----------- INCOME FROM CONTINUING OPERATIONS 8,650 3,448 25,748 11,974 Income from discontinued operations, net - 2,474 1,387 2,463 ------------ ------------ ----------- ----------- NET INCOME 8,650 5,922 27,135 14,437 Preferred dividends 2,719 2,570 8,156 6,584 ------------ ------------ ----------- ----------- NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $5,931 $3,352 $18,979 $7,853 ============ ============ =========== =========== Basic and Diluted: Income From Continuing Operations Per Share Available To Common Shareholders $0.09 $0.02 $0.30 $0.14 ============ ============ =========== =========== Income From Discontinued Operations Per Share $- $0.06 $0.02 $0.06 ============ ============ =========== =========== Net Income Per Share Available To Common Shareholders $0.09 $0.08 $0.32 $0.20 ============ ============ =========== =========== Weighted Average Common Shares Outstanding 67,157,286 43,145,657 58,320,142 39,199,479 ============ ============ =========== =========== *T -0- *T ASHFORD HOSPITALITY TRUST, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited) September 30, December 31, 2006 2005 ------------- ------------ ASSETS Investment in hotel properties, net $1,351,950 $1,106,668 Cash and cash equivalents 111,690 57,995 Restricted cash 15,387 27,842 Accounts receivable, net of allowance of $355 and $366, respectively 21,819 21,355 Inventories 1,387 1,186 Assets held for sale 2,451 117,873 Notes receivable 97,357 107,985 Deferred costs, net 12,822 13,975 Prepaid expenses 4,451 9,662 Other assets 33,228 4,014 Intangible assets, net 1,057 1,181 Due from third-party hotel managers 19,997 12,274 Due from affiliates 753 476 ------------- ------------ Total assets $1,674,349 $1,482,486 ============= ============ LIABILITIES AND OWNERS' EQUITY Indebtedness $753,654 $908,623 Capital leases payable 221 453 Accounts payable 13,322 9,984 Accrued expenses 28,314 21,054 Dividends payable 19,880 13,703 Deferred income 304 338 Deferred incentive management fees 4,655 - Unfavorable contract liability 15,599 - Due to third-party hotel managers 1,929 1,385 Due to affiliates 1,829 5,654 ------------- ------------ Total liabilities 839,707 961,194 Commitments and contingencies Minority interest 118,832 87,969 Preferred stock, $0.01 par value: Series B Cumulative Convertible Redeemable Preferred Stock, 7,447,865 issued and outstanding at September 30, 2006 and December 31, 2005 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, 2006 and December 31, 2005 23 23 Common stock, $0.01 par value, 200,000,000 shares authorized, 72,321,695 and 43,831,394 shares issued and outstanding at September 30, 2006 and December 31, 2005, respectively 723 438 Additional paid-in capital 700,625 403,919 Unearned compensation - (4,792) Accumulated other comprehensive income 369 1,372 Accumulated deficit (60,930) (42,637) ------------- ------------ Total owners' equity 640,810 358,323 ------------- ------------ Total liabilities and owners' equity $1,674,349 $1,482,486 ============= ============ *T -0- *T ASHFORD HOSPITALITY TRUST, INC. EBITDA (In Thousands) (Unaudited) Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2006 2005 2006 2005 ------------- ------------- ------------- -------------- Net income $8,650 $5,922 $27,135 $14,437 ------------- ------------- ------------- -------------- Add back: Interest income (1,005) (270) (2,065) (727) Interest expense and amortization of loan costs 11,435 12,579 35,173 25,340 Minority interest 1,184 1,500 4,860 3,690 Depreciation and amortization 13,812 9,045 37,120 19,185 Benefit from (provision for) income taxes (929) 1,069 (692) 1,047 ------------- ------------- ------------- -------------- 24,497 23,923 74,396 48,535 ------------- ------------- ------------- -------------- EBITDA $33,147 $29,845 $101,531 $62,972 ============= ============= ============= ============== 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 and the loss from reclassification from discontinued to continuing of approximately $863,000. For the nine months ended September 30, 2005, EBITDA has not been adjusted to add back the loss on debt extinguishment of approximately $2.3 million and the write-off of loan costs and exit fees of approximately $151,000. *T -0- *T ASHFORD HOSPITALITY TRUST, INC. FFO and Adjusted FFO (In Thousands, Except Share And Per Share Amounts) (Unaudited) Three Three Nine Nine Months Months Months Months Ended Ended Ended Ended September September September September 30, 2006 30, 2005 30, 2006 30, 2005 ----------- ----------- ----------- ----------- Net income available to common shareholders $5,931 $3,352 $18,979 $7,853 ----------- ----------- ----------- ----------- Plus real estate depreciation and amortization 13,734 9,023 36,887 19,126 Remove minority interest 1,184 1,500 4,860 3,690 ----------- ----------- ----------- ----------- FFO available to common shareholders $20,849 $13,875 $60,726 $30,669 =========== =========== =========== =========== Add back dividends on convertible preferred stock 1,490 1,341 4,469 2,897 Add back write-off of loan costs and exit fees - - 788 151 Add back loss on debt extinguishment - - - 2,257 Add back loss from reclassification of discontinued to continuing - - 863 - ----------- ----------- ----------- ----------- Adjusted FFO $22,339 $15,216 $66,846 $35,974 =========== =========== =========== =========== Adjusted FFO per diluted share available to common shareholders $0.25 $0.25 $0.86 $0.68 =========== =========== =========== =========== Diluted weighted average shares outstanding 88,343,497 61,834,146 77,957,660 52,813,148 =========== =========== =========== =========== *T -0- *T ASHFORD HOSPITALITY TRUST, INC. CASH AVAILABLE FOR DISTRIBUTION ("CAD") (In Thousands, Except Per Share Amounts) (Unaudited) Three Months Three Months Ended Ended September 30, (per diluted September 30, (per diluted 2006 share) 2005 share) ------------- ------------- Net income available to common shareholders $5,931 $0.07 $3,352 $0.05 Add back dividends on convertible preferred stock 1,490 0.02 1,341 0.02 ------------- ------------ ------------- ------------ Total $7,421 $0.08 $4,693 $0.08 Plus real estate depreciation and amortization 13,734 $0.16 9,023 $0.15 Remove minority interest 1,184 0.01 1,500 0.02 Plus stock-based compensation 1,411 0.02 952 0.02 Plus amortization of loan costs 495 0.01 1,136 0.02 Plus write-off of loan costs - 0.00 - 0.00 Plus loss on debt extinguishment - 0.00 - 0.00 Plus loss from reclassification of discontinued to continuing - 0.00 - 0.00 Less debt premium amortization to reduce interest expense (76) (0.00) (194) (0.00) Less capital improvements reserve (4,864) (0.06) (2,832) (0.05) ------------- ------------ ------------- ------------ CAD $19,305 $0.22 $14,278 $0.23 ============= ============ ============= ============ Nine Months Nine Months Ended Ended September 30, (per diluted September 30, (per diluted 2006 share) 2005 share) ------------- ------------- Net income available to common shareholders $18,979 $0.24 $7,853 $0.15 Add back dividends on convertible preferred stock 4,469 0.06 2,897 0.05 ------------- ------------ ------------- ------------ Total $23,448 $0.30 $10,750 $0.20 Plus real estate depreciation and amortization 36,887 $0.47 19,126 $0.36 Remove minority interest 4,860 0.06 3,690 0.07 Plus stock-based compensation 4,120 0.05 2,484 0.05 Plus amortization of loan costs 1,470 0.02 3,123 0.06 Plus write-off of loan costs 788 0.01 151 0.00 Plus loss on debt extinguishment - - 2,257 0.04 Plus loss from reclassification of discontinued to continuing 863 0.01 - 0.00 Less debt premium amortization to reduce interest expense (76) (0.00) (463) (0.01) Less capital improvements reserve (12,816) (0.16) (7,230) (0.14) ------------- ------------ ------------- ------------ CAD $59,544 $0.76 $33,888 $0.64 ============= ============ ============= ============ *T -0- *T ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA (Unaudited) Three Months Ended September 30, ------------------------------------ % 2006 2005 Variance ------------- ------------ --------- ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: Room revenues (1) $101,192,627 $95,127,144 6.38% RevPAR (1) $87.43 $80.86 8.13% Occupancy 76.03% 74.74% 1.72% ADR $114.99 $108.18 6.30% Nine Months Ended September 30, ------------------------------------- % 2006 2005 Variance ------------- ------------- --------- ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: Room revenues (1) $311,763,010 $284,997,523 9.39% RevPAR (1) $89.96 $81.35 10.58% Occupancy 75.65% 73.84% 2.45% ADR $118.91 $110.17 7.93% NOTE: The above pro forma table assumes the 73 hotel properties owned at September 30, 2006 were owned as of the beginning of the periods presented. Three Months Ended September 30, ----------------------------------- % 2006 2005 Variance ------------ ------------ --------- ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: Room revenues (1) $95,669,278 $88,919,636 7.59% RevPAR (1) $89.11 $81.38 9.50% Occupancy 77.20% 75.00% 2.93% ADR $115.43 $108.51 6.38% Nine Months Ended September 30, ------------------------------------- % 2006 2005 Variance ------------- ------------- --------- ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: Room revenues (1) $290,588,824 $264,132,297 10.02% RevPAR (1) $90.38 $81.20 11.30% Occupancy 76.08% 73.83% 3.05% ADR $118.80 $109.99 8.01% NOTE: The above pro forma table assumes the 67 hotel properties owned at September 30, 2006 but not under renovation for the three and nine months ended September 30, 2006 were owned as of the beginning of the periods presented. Excluded Hotels Under Renovation: Courtyard Crystal City Reagan Airport, SpringHill Suites Kennesaw, SpringHill Suites Jacksonville, Sea Turtle Inn Jacksonville, Courtyard Palm Desert, Courtyard Atlanta Alpharetta (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 three and nine months ended September 30, 2006 compared to the same 2005 periods. *T -0- *T ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel RevPAR by Region (Unaudited) Three Months Nine Months Percent Ended Ended Change in September 30, September 30, RevPAR -------------- -------------- ------------- Number Number of of Region Hotels Rooms 2006 2005 2006 2005 Quarter YTD ----------- ------- ------ ------- ------ ------- ------ ------- ----- Pacific (1) 8 1,966 $99.64 $94.80 $102.38 $94.62 5.1% 8.2% Mountain (2) 5 869 $100.11 $89.03 $99.34 $90.82 12.4% 9.4% West North Central (3) 2 390 $82.18 $78.13 $76.13 $71.61 5.2% 6.3% West South Central (4) 6 1,082 $92.48 $69.34 $89.01 $69.10 33.4% 28.8% East North Central (5) 11 1,682 $69.95 $61.79 $66.02 $58.18 13.2% 13.5% East South Central (6) 4 573 $67.37 $65.29 $64.48 $60.87 3.2% 5.9% Middle Atlantic (7) 4 685 $97.08 $88.84 $80.15 $71.16 9.3% 12.6% South Atlantic (8) 29 5,226 $89.04 $86.75 $100.82 $93.45 2.6% 7.9% New England (9) 4 490 $64.36 $57.73 $51.56 $46.65 11.5% 10.5% ------- ------ ------- ------ ------- ------ ------- ----- Total Portfolio 73 12,963 $87.43 $80.86 $89.96 $81.35 8.1% 10.6% ======= ====== ======= ====== ======= ====== ======= ===== (1) Includes California (2) Includes Nevada, Arizona, New Mexico and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts and Maine NOTE: The above pro forma table assumes the 73 hotel properties owned as of September 30, 2006 were owned as of the beginning of the periods presented. *T -0- *T ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel RevPAR by Brand (Unaudited) Three Months Ended September 30, ------------------ Brand Number Number of of Hotels Rooms 2006 2005 ----------------------------------- ------- ------- --------- -------- Hilton 22 3,638 $88.15 $75.74 Hyatt 2 970 $96.10 $95.97 InterContinental 2 420 $118.83 $107.70 Independent 2 317 $79.87 $80.34 Marriott 37 5,855 $87.08 $84.06 Radisson 6 1,354 $68.50 $58.74 Starwood 2 409 $101.64 $96.71 ------- ------- --------- -------- Total Portfolio 73 12,963 $87.43 $80.86 ======= ======= ========= ======== Nine Months Ended Percent September 30, Change in RevPAR ----------------- ---------------- Brand 2006 2005 Quarter YTD ----------------------------------- -------- -------- ---------- ----- Hilton $88.87 $77.28 16.4% 15.0% Hyatt $99.00 $93.86 0.1% 5.5% InterContinental $136.27 $120.02 10.3% 13.5% Independent $82.41 $85.54 -0.6% -3.7% Marriott $93.88 $86.13 3.6% 9.0% Radisson $60.10 $54.62 16.6% 10.0% Starwood $82.77 $71.58 5.1% 15.6% -------- -------- ---------- ----- Total Portfolio $89.96 $81.35 8.1% 10.6% ======== ======== ========== ===== NOTE: The above pro forma table assumes the 73 hotel properties owned as of September 30, 2006 were owned as of the beginning of the periods presented. *T -0- *T 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 September % September September % 30, 2006 30, 2005 Variance 30, 2006 30, 2005 Variance --------- --------- --------- --------- --------- --------- REVENUE Rooms (1) $101,193 $95,127 6.38% $311,763 $284,998 9.39% Food and beverage 20,204 19,491 3.66% 66,294 62,988 5.25% Other 4,535 4,613 -1.69% 13,702 13,279 3.19% --------- --------- --------- --------- --------- --------- Total hotel revenue 125,932 119,231 5.62% 391,759 361,265 8.44% EXPENSES Hotel operating expenses Rooms 21,930 20,925 4.80% 65,917 61,363 7.42% Food and beverage 15,679 15,598 0.52% 50,103 47,556 5.36% Other direct 2,348 2,298 2.18% 6,888 6,553 5.11% Indirect 38,334 36,603 4.73% 114,932 106,717 7.70% Management fees, includes base and incentive fees 5,276 5,488 -3.86% 20,513 17,542 16.94% --------- --------- --------- --------- --------- --------- Total hotel operating expenses 83,567 80,912 3.28% 258,353 239,731 7.77% Property taxes, insurance, and other 7,690 6,558 17.26% 21,476 19,028 12.87% --------- --------- --------- --------- --------- --------- HOTEL OPERATING PROFIT (Hotel EBITDA) $34,675 $31,761 9.17% $111,930 $102,506 9.19% ========= ========= ========= ========= ========= ========= NOTE: The above pro forma table assumes the 73 hotel properties owned at September 30, 2006 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 September % September September % 30, 2006 30, 2005 Variance 30, 2006 30, 2005 Variance --------- --------- --------- --------- --------- --------- REVENUE Rooms (1) $95,669 $88,920 7.59% $290,589 $264,132 10.02% Food and beverage 19,080 18,473 3.29% 62,227 59,489 4.60% Other 4,334 4,307 0.63% 12,958 12,453 4.06% --------- --------- --------- --------- --------- --------- Total hotel revenue 119,083 111,700 6.61% 365,774 336,074 8.84% EXPENSES Hotel operating expenses Rooms 20,557 19,534 5.24% 61,439 57,114 7.57% Food and beverage 14,783 14,694 0.61% 46,998 44,764 4.99% Other direct 2,268 2,225 1.93% 6,649 6,351 4.69% Indirect 36,178 34,535 4.76% 108,436 100,567 7.82% Management fees, includes base and incentive fees 5,150 5,077 1.44% 19,101 16,184 18.02% --------- --------- --------- --------- --------- --------- Total hotel operating expenses 78,936 76,065 3.77% 242,623 224,980 7.84% Property taxes, insurance, and other 7,211 6,122 17.79% 19,934 17,609 13.20% --------- --------- --------- --------- --------- --------- HOTEL OPERATING PROFIT (Hotel EBITDA) $32,936 $29,513 11.60% $103,217 $93,485 10.41% ========= ========= ========= ========= ========= ========= NOTE: The above pro forma table assumes the 67 hotel properties owned at September 30, 2006 but not under renovation for the three and nine months ended September 30, 2006 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 three and nine months ended September 30, 2006 compared to the same 2005 periods. *T -0- *T ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT MARGIN (Unaudited) ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: HOTEL OPERATING PROFIT (EBITDA) MARGIN: 3rd Quarter 2006 27.66% 3rd Quarter 2005 26.42% --------------------------------------------------------------------- Variance 1.24% ===================================================================== HOTEL OPERATING PROFIT (EBITDA) MARGIN VARIANCE BREAKDOWN: Rooms 0.23% Food & Beverage and Other Departmental 0.83% Administrative & General 0.11% Sales & Marketing 0.30% Hospitality -0.02% Repair & Maintenance 0.26% Energy 0.05% Franchise Fee -0.39% Management Fee 0.02% Incentive Management Fee 0.20% Insurance -0.10% Property Taxes -0.47% Leases/Other 0.23% --------------------------------------------------------------------- Total 1.24% ===================================================================== *T -0- *T ASHFORD HOSPITALITY TRUST, INC. SEASONALITY TABLE (In Thousands) (Unaudited) PRO FORMA RESULTS ALL 73 HOTELS OWNED AS OF SEPTEMBER 30, 2006: ----------- ----------- ----------- ----------- ----------- 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year End ----------- ----------- ----------- ----------- ----------- 2005 Total Hotel Revenue 115,511 126,523 119,231 133,670 494,935 Hotel EBITDA 32,826 37,914 31,761 33,267 135,768 Hotel EBITDA Margin 28.4% 30.0% 26.6% 24.9% 27.4% 2006 Total Hotel Revenue 126,190 139,637 125,932 Hotel EBITDA 34,305 42,950 34,675 Hotel EBITDA Margin 27.2% 30.8% 27.5% NOTE: The above pro forma table assumes that the 73 hotel properties owned at September 30, 2006 were owned as of the beginning of the periods presented. *T -0- *T ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel Operating Profit by Region (In Thousands) (Unaudited) Three Months Ended September 30, ----------------------------- Region Number Number of of % % Hotels Rooms 2006 Total 2005 Total ------------------------ ------- ------- -------------- -------------- Pacific (1) 8 1,966 $5,404 15.6% $5,932 18.7% Mountain (2) 5 869 $3,059 8.8% $2,475 7.8% West North Central (3) 2 390 $1,227 3.5% $1,131 3.6% West South Central (4) 6 1,082 $2,934 8.5% $2,279 7.2% East North Central (5) 11 1,682 $4,117 11.9% $2,817 8.9% East South Central (6) 4 573 $1,157 3.3% $1,154 3.6% Middle Atlantic (7) 4 685 $2,256 6.5% $1,600 5.0% South Atlantic (8) 29 5,226 $13,640 39.3% $13,535 42.6% New England (9) 4 490 $881 2.5% $838 2.6% ------- ------- -------------- -------------- Total Portfolio 73 12,963 $34,675 100.0% $31,761 100.0% ======= ======= ============== ============== Percent Change in Hotel Nine Months Ended Operating September 30, Profit ----------------------------- ------------- Region Number Number of of % % Hotels Rooms 2006 Total 2005 Total Quarter YTD ---------- ------- ------- -------------- -------------- ------- ----- Pacific (1) 8 1,966 $18,604 16.6% $19,190 18.7% -8.9% -3.1% Mountain (2) 5 869 $8,893 7.9% $7,638 7.5% 23.6% 16.4% West North Central (3) 2 390 $3,170 2.8% $2,928 2.9% 8.5% 8.3% West South Central (4) 6 1,082 $8,086 7.2% $7,058 6.9% 28.7% 14.6% East North Central (5) 11 1,682 $10,730 9.6% $8,394 8.2% 46.1% 27.8% East South Central (6) 4 573 $3,259 2.9% $3,105 3.0% 0.3% 5.0% Middle Atlantic (7) 4 685 $4,419 3.9% $2,807 2.7% 41.0% 57.4% South Atlantic (8) 29 5,226 $53,481 47.8% $50,092 48.9% 0.8% 6.8% New England (9) 4 490 $1,288 1.2% $1,294 1.3% 5.1% -0.5% ------- ------- -------------- -------------- ------- ----- Total Portfolio 73 12,963 $111,930100.0% $102,506100.0% 9.2% 9.2% ======= ======= ============== ============== ======= ===== (1) Includes California (2) Includes Nevada, Arizona, New Mexico and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts and Maine NOTE: The above pro forma table assumes the 73 hotel properties owned as of September 30, 2006 were owned as of the beginning of the periods presented. *T -0- *T ASHFORD HOSPITALITY TRUST, INC. Debt Summary As of September 30, 2006 (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 5.41% $487.1 $- $487.1 $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 $150.0 million secured credit facility secured by 9 hotel properties, matures August 16, 2008, at an interest rate of LIBOR plus a range of 1.6% to 1.85% depending on the loan-to-value ratio - - - $100.0 million secured credit facility secured by 8 mezzanine notes receivable, matures December 23, 2008, at an interest rate of LIBOR plus a range of 1.5% to 2.75% depending on the loan-to-value ratio and collateral pledged - - - $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 53.0 - 53.0 ---------- ------------- ------- Total Debt Excluding Premium $751.6 $- $751.6 ========== ============= Mark-to-Market Premium 2.0 ------- Total Debt Including Premium $753.6 ======= Percentage of Total 100.00% 0.00% 100.00% ========== ============= ======= Weighted Average Interest Rate at September 30, 2006 5.59% ======= *T -0- *T ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 73 Core Hotels --------------------------- 2004 --------------------------- Actual Actual Actual Actual Rooms 1Q 2Q 3Q 4Q --------------------------------- Doubletree Suites Columbus 194 x x x Doubletree Suites Dayton 137 x x x Embassy Suites East Syracuse 215 x x x Embassy Suites Phoenix Airport 229 x x x Sheraton Bucks County 187 x x Hyatt Regency Orange County 654 x Hampton Inn Mall of Georgia 92 Hampton Inn Terre Haute 112 Hampton Inn Horse Cave 101 Hampton Inn Evansville 141 Hilton St. Petersburg Bayfront 333 Fairfield Inn Evansville West 110 Fairfield Inn Princeton 73 Courtyard Bloomington 117 Residence Inn Evansville 78 Courtyard Columbus Tipton Lakes 90 Radisson Milford 173 Residence Inn Salt Lake City 144 Hilton Fort Worth 294 Residence Inn Palm Desert 130 Historic Inns of Annapolis 124 Embassy Suites Houston 150 Radisson Rockland 127 Residence Inn San Diego Sorrento Mesa 150 Radisson Hotel Airport - Indianapolis 259 Hilton Nassau Bay - Clear Lake 243 Sheraton Minneapolis West 222 Embassy Suites West Palm Beach 160 Radisson City Center - Indianapolis 371 Crowne Plaza Beverly Hills 260 Residence Inn Fairfax Merrifield 159 Courtyard Crystal City Reagan Airport 272 Courtyard Palm Desert 151 SpringHill Suites Kennesaw 90 SpringHill Suites Jacksonville 102 Sea Turtle Inn Jacksonville 193 Courtyard Atlanta Alpharetta 154 Marriott Crystal Gateway 697 Hilton Santa Fe 157 SpringHill Suites BWI Airport 133 SpringHill Suites Centreville 136 SpringHill Suites Gaithersburg 162 Courtyard Overland Park 168 Hilton Garden Inn Jacksonville 119 Hyatt Dulles 316 TownePlace Suites Miami Lakes 95 TownePlace Suites Ft. Worth 95 TownePlace Suites Miami Airport 95 TownePlace Suites Portland Scarborough 95 Hampton Inn Lawrenceville 86 Homewood Suites Mobile 86 SpringHill Suites Mall of Georgia 96 JW Marriott San Francisco 338 ---------------------------- 2005 ---------------------------- Actual Actual Actual Actual Rooms 1Q 2Q 3Q 4Q --------------------------------- Doubletree Suites Columbus 194 Doubletree Suites Dayton 137 Embassy Suites East Syracuse 215 Embassy Suites Phoenix Airport 229 Sheraton Bucks County 187 x x Hyatt Regency Orange County 654 Hampton Inn Mall of Georgia 92 x x Hampton Inn Terre Haute 112 x x x Hampton Inn Horse Cave 101 x x x Hampton Inn Evansville 141 x x x Hilton St. Petersburg Bayfront 333 x x x Fairfield Inn Evansville West 110 x x x Fairfield Inn Princeton 73 x x x Courtyard Bloomington 117 x x x Residence Inn Evansville 78 x x x Courtyard Columbus Tipton Lakes 90 x x x Radisson Milford 173 x x x Residence Inn Salt Lake City 144 x Hilton Fort Worth 294 x x x Residence Inn Palm Desert 130 x x Historic Inns of Annapolis 124 x x Embassy Suites Houston 150 x Radisson Rockland 127 x Residence Inn San Diego Sorrento Mesa 150 x Radisson Hotel Airport - Indianapolis 259 x Hilton Nassau Bay - Clear Lake 243 x Sheraton Minneapolis West 222 x Embassy Suites West Palm Beach 160 x Radisson City Center - Indianapolis 371 x Crowne Plaza Beverly Hills 260 x Residence Inn Fairfax Merrifield 159 Courtyard Crystal City Reagan Airport 272 Courtyard Palm Desert 151 SpringHill Suites Kennesaw 90 SpringHill Suites Jacksonville 102 Sea Turtle Inn Jacksonville 193 Courtyard Atlanta Alpharetta 154 Marriott Crystal Gateway 697 Hilton Santa Fe 157 SpringHill Suites BWI Airport 133 SpringHill Suites Centreville 136 SpringHill Suites Gaithersburg 162 Courtyard Overland Park 168 Hilton Garden Inn Jacksonville 119 Hyatt Dulles 316 TownePlace Suites Miami Lakes 95 TownePlace Suites Ft. Worth 95 TownePlace Suites Miami Airport 95 TownePlace Suites Portland Scarborough 95 Hampton Inn Lawrenceville 86 Homewood Suites Mobile 86 SpringHill Suites Mall of Georgia 96 JW Marriott San Francisco 338 ---------------------------- 2006 ---------------------------- Actual Actual Actual Est. Rooms 1Q 2Q 3Q 4Q --------------------------------- Doubletree Suites Columbus 194 Doubletree Suites Dayton 137 Embassy Suites East Syracuse 215 Embassy Suites Phoenix Airport 229 Sheraton Bucks County 187 Hyatt Regency Orange County 654 Hampton Inn Mall of Georgia 92 Hampton Inn Terre Haute 112 Hampton Inn Horse Cave 101 Hampton Inn Evansville 141 Hilton St. Petersburg Bayfront 333 Fairfield Inn Evansville West 110 Fairfield Inn Princeton 73 Courtyard Bloomington 117 Residence Inn Evansville 78 x Courtyard Columbus Tipton Lakes 90 x Radisson Milford 173 x Residence Inn Salt Lake City 144 Hilton Fort Worth 294 x Residence Inn Palm Desert 130 Historic Inns of Annapolis 124 x x Embassy Suites Houston 150 x Radisson Rockland 127 x Residence Inn San Diego Sorrento Mesa 150 x Radisson Hotel Airport - Indianapolis 259 x Hilton Nassau Bay - Clear Lake 243 x Sheraton Minneapolis West 222 x x Embassy Suites West Palm Beach 160 x x Radisson City Center - Indianapolis 371 x Crowne Plaza Beverly Hills 260 x Residence Inn Fairfax Merrifield 159 x Courtyard Crystal City Reagan Airport 272 x x Courtyard Palm Desert 151 x SpringHill Suites Kennesaw 90 x x SpringHill Suites Jacksonville 102 x x Sea Turtle Inn Jacksonville 193 x x Courtyard Atlanta Alpharetta 154 x x Marriott Crystal Gateway 697 x Hilton Santa Fe 157 x SpringHill Suites BWI Airport 133 x SpringHill Suites Centreville 136 x SpringHill Suites Gaithersburg 162 x Courtyard Overland Park 168 x Hilton Garden Inn Jacksonville 119 Hyatt Dulles 316 TownePlace Suites Miami Lakes 95 TownePlace Suites Ft. Worth 95 TownePlace Suites Miami Airport 95 TownePlace Suites Portland Scarborough 95 Hampton Inn Lawrenceville 86 Homewood Suites Mobile 86 SpringHill Suites Mall of Georgia 96 JW Marriott San Francisco 338 ---------------------------- 2007 ---------------------------- Est. Est. Est. Est. Rooms 1Q 2Q 3Q 4Q --------------------------------- Doubletree Suites Columbus 194 Doubletree Suites Dayton 137 Embassy Suites East Syracuse 215 Embassy Suites Phoenix Airport 229 Sheraton Bucks County 187 Hyatt Regency Orange County 654 Hampton Inn Mall of Georgia 92 Hampton Inn Terre Haute 112 Hampton Inn Horse Cave 101 Hampton Inn Evansville 141 Hilton St. Petersburg Bayfront 333 Fairfield Inn Evansville West 110 Fairfield Inn Princeton 73 Courtyard Bloomington 117 Residence Inn Evansville 78 x Courtyard Columbus Tipton Lakes 90 x Radisson Milford 173 Residence Inn Salt Lake City 144 Hilton Fort Worth 294 Residence Inn Palm Desert 130 Historic Inns of Annapolis 124 Embassy Suites Houston 150 Radisson Rockland 127 Residence Inn San Diego Sorrento Mesa 150 Radisson Hotel Airport - Indianapolis 259 Hilton Nassau Bay - Clear Lake 243 Sheraton Minneapolis West 222 Embassy Suites West Palm Beach 160 Radisson City Center - Indianapolis 371 Crowne Plaza Beverly Hills 260 Residence Inn Fairfax Merrifield 159 Courtyard Crystal City Reagan Airport 272 Courtyard Palm Desert 151 SpringHill Suites Kennesaw 90 x SpringHill Suites Jacksonville 102 x Sea Turtle Inn Jacksonville 193 x x x x Courtyard Atlanta Alpharetta 154 x Marriott Crystal Gateway 697 x x x Hilton Santa Fe 157 x x x SpringHill Suites BWI Airport 133 x x SpringHill Suites Centreville 136 x x SpringHill Suites Gaithersburg 162 x x Courtyard Overland Park 168 x x x Hilton Garden Inn Jacksonville 119 x x x Hyatt Dulles 316 x x x x TownePlace Suites Miami Lakes 95 x x x TownePlace Suites Ft. Worth 95 x x x TownePlace Suites Miami Airport 95 x x x TownePlace Suites Portland Scarborough 95 x x x Hampton Inn Lawrenceville 86 x x x Homewood Suites Mobile 86 x x x SpringHill Suites Mall of Georgia 96 x x x JW Marriott San Francisco 338 x x x *T -0- *T ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar (cont.) 73 Core Hotels --------------------------- 2004 --------------------------- Actual Actual Actual Actual Rooms 1Q 2Q 3Q 4Q --------------------------------- TownePlace Suites Newark Silicon Valley 127 TownePlace Suites Mt. Laurel 95 SpringHill Suites Charlotte 136 SpringHill Suites Raleigh Airport 120 Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Fairfield Inn and Suites Kennesaw 87 Crowne Plaza La Concha - Key West 160 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Orlando Sea World 350 --------------------------------- ---------------------------- 2005 ---------------------------- Actual Actual Actual Actual Rooms 1Q 2Q 3Q 4Q --------------------------------- TownePlace Suites Newark Silicon Valley 127 TownePlace Suites Mt. Laurel 95 SpringHill Suites Charlotte 136 SpringHill Suites Raleigh Airport 120 Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Fairfield Inn and Suites Kennesaw 87 Crowne Plaza La Concha - Key West 160 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Orlando Sea World 350 --------------------------------- ---------------------------- 2006 ---------------------------- Actual Actual Actual Est. Rooms 1Q 2Q 3Q 4Q --------------------------------- TownePlace Suites Newark Silicon Valley 127 TownePlace Suites Mt. Laurel 95 SpringHill Suites Charlotte 136 SpringHill Suites Raleigh Airport 120 Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Fairfield Inn and Suites Kennesaw 87 Crowne Plaza La Concha - Key West 160 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Orlando Sea World 350 --------------------------------- ---------------------------- 2007 ---------------------------- Est. Est. Est. Est. Rooms 1Q 2Q 3Q 4Q --------------------------------- TownePlace Suites Newark Silicon x Valley 127 TownePlace Suites Mt. Laurel 95 x SpringHill Suites Charlotte 136 x SpringHill Suites Raleigh Airport 120 x Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Fairfield Inn and Suites Kennesaw 87 Crowne Plaza La Concha - Key West 160 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Orlando Sea World 350 --------------------------------- *T