AHT Ashford Hospitality Trust Inc

Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the first quarter ended March 31, 2011. 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 97 hotels owned and included in continuing operations as of March 31, 2011, but does not include the 28 recently acquired Highland Hospitality hotels. Unless otherwise stated, all reported results compare the first quarter ended March 31, 2011, with the first quarter ended March 31, 2010 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL HIGHLIGHTS

• RevPAR increased 8.8% for the hotels not under renovation
• Operating profit margin increased 280 basis points for the hotels not under renovation
• Net income attributable to common shareholders was $31.3 million, or $0.46 per diluted share, compared with net income attributable to common shareholders of $305,000, or $0.01 per diluted share, in the prior-year quarter
• Adjusted funds from operations (AFFO) was $0.41 per diluted share for the quarter as compared with $0.31 from the prior-year quarter
• Fixed charge coverage ratio was 1.70x under the senior credit facility covenant versus a required minimum of 1.25x

CAPITAL ALLOCATION

• Capex invested in the quarter was $13.9 million

ACQUISITION ACTIVITY

On March 10, 2011, the Company together with an institutional partner took ownership of the 28-hotel Highland Hospitality portfolio. The acquisition and restructuring were completed through a consensual foreclosure for total consideration of $1.277 billion, which equates to a purchase price of $158,000 per key. Based on 2010 results, the purchase price equates to an EBITDA multiple of 13.4x and a capitalization rate of 6.1% utilizing NOI that is approximately 36% below its peak levels. Ashford invested $150 million and owns 71.74% of the joint venture. The new money investment from Ashford and the institutional partner was utilized to reduce debt and to fund projected capital expenditures. Ashford funded its contribution from available cash. As a result of equal control provisions, the joint venture is not consolidated in Ashford’s financial statements.

Also on March 10, 2011, Ashford acquired 96 units at the World Quest Resort Hotel in Orlando, Florida, for $12.0 million in cash, or a total investment of $125,000 per key. The purchase includes 62 furnished units, 34 unfurnished units and developable land for up to 179 additional units. The hotel, which was developed in 2006, is located between two major convention hotels and in close proximity to Walt Disney World.

DISPOSITION ACTIVITY

On February 24, 2011, Ashford completed the sale of the JW Marriott San Francisco for $96.0 million in cash to an affiliate of Thayer Lodging Group. Ashford used the proceeds from the sale to payoff a $47.5 million loan secured by the hotel that was maturing in March 2013 and to reduce borrowings on its credit facility.

On March 7, 2011, the Company completed the sale of the Hilton Rye Town in Rye Brook, New York for $35.5 million in cash to an investment group spearheaded by Lodging Capital Partners. Ashford used the proceeds from the sale to reduce borrowings on its credit facility.

On March 14, 2011, the Company completed the sale of the Hampton Inn Houston Galleria in Houston, Texas, for $20.3 million in cash to an undisclosed buyer. Ashford used the proceeds from the sale to pay off a $2.7 million mortgage secured by the hotel, pay the joint venture partner $2.7 million and to reduce borrowings on its credit facility. The sales of these three hotels equated to an NOI capitalization rate of 2.5% on a trailing twelve month basis.

CAPITAL STRUCTURE

On April 7, 2011, the Company received a discounted payoff of $22 million on its $25.7 million mezzanine loan secured by interests in a portfolio of limited service hotels owned by affiliates of Goldman Sach’s Whitehall Funds, representing a debt yield of approximately 6.9% on the Company’s last dollar of investment in the loan. The Company had previously written down its investment in the mezzanine loan by $7.8 million in the fourth quarter of 2010. The discounted payoff will result in a $4.2 million gain recognized as a credit to impairment charges in the second quarter of 2011.

During April 2011, the Company completed an offering of 3,350,000 shares of 9.000% Series E Cumulative Preferred Stock at $25.00 per share. The annual dividend for the preferred stock is $2.25 per share, payable quarterly.

On May 3, 2011, Ashford used $73 million of the net proceeds of the Series E offering to repurchase 5,854,993 shares of the Company’s Series B-1 Cumulative Preferred Stock, all of the shares of which were held by Security Capital Preferred Growth Incorporated. In addition, Security Capital Preferred Growth Incorporated converted the remaining 1,392,872 shares of its Series B-1 Preferred Stock to common stock.

On May 5, 2011, Ashford closed a three-year extension on the Company’s $5.8 million mortgage secured by the Courtyard in Manchester, Connecticut. Basic terms for the loan, which now matures in May 2014, remain unchanged.

PORTFOLIO REVPAR

As of March 31, 2011, the Company had a portfolio of direct hotel investments consisting of 97 properties classified in continuing operations. During the first quarter, 85 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 97 hotels) and proforma not-under-renovation basis (85 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 97 hotels in continuing operations. Details of each category are provided in the tables attached to this release.

• Proforma RevPAR increased 8.8% for hotels not under renovation on a 4.6% increase in ADR to $130.08 and a 271 basis point increase in occupancy
• Proforma RevPAR increased 7.6% for all hotels on a 4.3% increase in ADR to $131.94 and a 209 basis point increase in occupancy

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

For the 85 hotels as of March 31, 2011, that were not under renovation, Proforma Hotel EBITDA increased 19.1% to $54.1 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 280 basis points to 30.1%. For all 97 hotels included in continuing operations as of March 31, 2011, Proforma Hotel EBITDA increased 15.3% to $62.8 million and Hotel EBITDA margin increased 219 basis points to 29.2%.

Ashford believes year-over-year Hotel EBITDA and Hotel EBITDA margin comparisons are more meaningful to gauge the performance of the Company’s hotels than sequential quarter-over-quarter comparisons. Given the substantial seasonality in the Company’s portfolio and its active capital recycling, to help investors better understand this seasonality, the Company provides quarterly detail on its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and certain prior-year periods based upon the number of core hotels in the portfolio as well as it’s pro-rata share of the Highland portfolio as of the end of the current period. As Ashford’s portfolio mix changes from time to time so will the seasonality for Proforma Hotel EBITDA and Proforma Hotel EBITDA margin. The details of the quarterly calculations for the previous four quarters for the current portfolio of 97 hotels included in continuing operations together with Ashford’s pro-rata share of the Highland portfolio are provided in the table attached to this release.

Monty J. Bennett, Chief Executive Officer, commented, “We executed well on all aspects of our business strategies. Our asset management efforts succeeded in driving RevPAR and operating margin growth within our portfolio. With the strong trends in the lodging market, we will look to continue this improvement over the balance of the year. The transformational acquisition of the former Highland Hospitality portfolio, combined with over $150 million of dispositions, $81.1 million of net proceeds from our Series E preferred offering and the retirement of the Company’s Series B-1 preferred stock, should propel our growth even further.”

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Trust, Inc. will conduct a conference call on Monday, May 9, 2011, at 11 a.m. ET. The number to call for this interactive teleconference is (212) 231-2912. A replay of the conference call will be available through Monday, May 16, 2011, by dialing (402) 977-9140 and entering the confirmation number 21520625.

The Company will also provide an online simulcast and rebroadcast of its first quarter 2011 earnings release conference call. The live broadcast of Ashford's quarterly conference call will be available online at the Company's website at www.ahtreit.com on Monday, May 9, 2011, beginning at 11 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, and Hotel Operating Profit. 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, nor Hotel Operating Profit 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, and Hotel Operating Profit 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 website 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 of properties and extraordinary items as defined by GAAP, plus depreciation and amortization of real estate assets, and net of adjustments for the portion of these items related to unconsolidated entities and joint ventures.

The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.

  ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)           March 31, December 31, 2011 2010 (Unaudited) ASSETS Investment in hotel properties, net $ 3,017,661 $ 3,023,736 Cash and cash equivalents 92,411 217,690 Restricted cash 73,485 67,666 Accounts receivable, net 70,111 27,493 Inventories 2,588 2,909 Notes receivable 20,897 20,870 Investment in unconsolidated joint ventures 193,125 15,000 Assets held for sale - 144,511 Deferred costs, net 18,050 17,519 Prepaid expenses 10,296 12,727 Interest rate derivatives 90,058 106,867 Other assets 4,637 7,502 Intangible assets, net 2,877 2,899 Due from third-party hotel managers   50,571     49,135     Total assets $ 3,646,767   $ 3,716,524     LIABILITIES AND EQUITY Liabilities Indebtedness of continuing operations $ 2,444,610 $ 2,518,164 Indebtedness of assets held for sale - 50,619 Capital leases payable 24 36 Accounts payable and accrued expenses 98,760 79,248 Dividends payable 14,269 7,281 Unfavorable management contract liabilities 15,493 16,058 Due to related parties 1,998 2,400 Due to third-party hotel managers 2,328 1,870 Other liabilities 4,597 4,627 Other liabilities of assets held for sale   -     2,995     Total liabilities   2,582,079     2,683,298    

 

Series B-1 Cumulative Convertible Redeemable Preferred stock, 7,247,865 shares issued and outstanding at March 31, 2011 and December 31, 2010

72,986 72,986 Redeemable noncontrolling interests in operating partnership 142,998 126,722   Equity: Shareholders' equity of the Company Preferred stock, $0.01 par value, 50,000,000 shares authorized:

Series A Cumulative Preferred Stock, 1,487,900 shares issued and outstanding at March 31, 2011 and December 31, 2010

15 15

Series D Cumulative Preferred Stock, 8,966,797 shares issued and outstanding at March 31, 2011 and December 31, 2010

90 90

Common stock, $0.01 par value, 200,000,000 shares authorized, 123,503,893 shares and 123,403,893 shares issued at March 31, 2011 and December 31, 2010, 59,403,816 and 58,999,324 shares outstanding at March 31, 2011 and December 31, 2010

1,235 1,234 Additional paid-in capital 1,556,040 1,552,657 Accumulated other comprehensive loss (411 ) (550 ) Accumulated deficit (531,547 ) (543,788 )

Treasury stock, at cost (64,100,077 shares and 64,404,569 shares at March 31, 2011 and December 31, 2010)

  (191,578 )   (192,850 ) Total shareholders' equity of the Company 833,844 816,808 Noncontrolling interests in consolidated joint ventures   14,860     16,710     Total equity   848,704     833,518     Total liabilities and equity $ 3,646,767   $ 3,716,524     ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)           Three Months Ended

March 31,

2011 2010 (Unaudited) REVENUE Rooms $ 163,060 $ 151,726 Food and beverage 38,394 36,169 Rental income from operating leases 1,220 1,089 Other   9,282     9,808     Total hotel revenue 211,956 198,792 Interest income from notes receivable - 337 Asset management fees and other   338     74     Total Revenue   212,294     199,203     EXPENSES Hotel operating expenses Rooms 37,088 34,635 Food and beverage 26,473 25,482 Other direct 5,437 5,409 Indirect 60,156 57,261 Management fees   8,879     8,368     Total hotel operating expenses 138,033 131,155   Property taxes, insurance, and other 10,929 13,154 Depreciation and amortization 32,973 34,040 Impairment charges (340 ) (769 ) Transaction acquisition costs (1,224 ) - Corporate general and administrative: Stock/unit-based compensation 1,814 1,172 Other general and administrative   12,069     5,486     Total Operating Expenses   194,254     184,238     OPERATING INCOME 18,040 14,965   Equity in earnings of unconsolidated joint ventures 28,124 658 Interest income 36 61 Other income 48,003 15,519 Interest expense (33,499 ) (33,541 ) Amortization of loan costs (1,079 ) (1,523 ) Unrealized gain (loss) on derivatives   (16,817 )   13,908     INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 42,808 10,047 Income tax expense   (1,044 )   (44 )   INCOME FROM CONTINUING OPERATIONS 41,764 10,003 Income (loss) from discontinued operations   2,118     (4,777 )   NET INCOME 43,882 5,226 (Income) loss from consolidated joint ventures attributable to noncontrolling interests (931 ) 701 Net income attributable to redeemable noncontrolling interests in operating partnership   (5,118 )   (792 )   NET INCOME ATTRIBUTABLE TO THE COMPANY 37,833 5,135 Preferred dividends   (6,555 )   (4,830 )   NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 31,278   $ 305     INCOME PER SHARE – BASIC AND DILUTED:

Basic -

Income from continuing operations attributable to common shareholders $ 0.51 $ 0.08 Income (loss) from discontinued operations attributable to common shareholders   0.02     (0.07 )   Net income attributable to common shareholders $ 0.53   $ 0.01     Weighted average common shares outstanding – basic   57,931     53,073    

Diluted -

Income from continuing operations attributable to common shareholders $ 0.45 $ 0.08 Income (loss) from discontinued operations attributable to common shareholders   0.01     (0.07 )   Net income attributable to common shareholders $ 0.46   $ 0.01     Weighted average common shares outstanding – diluted   79,330     53,073     Amounts attributable to common shareholders: Income from continuing operations, net of tax $ 36,873 $ 9,208 Income (loss) from discontinued operations, net of tax 960 (4,073 ) Preferred dividends   (6,555 )   (4,830 )   Net income attributable to common shareholders $ 31,278   $ 305     ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) TO EBITDA (in thousands)       Three Months Ended March 31, 2011 2010 (Unaudited)   Net income $ 43,882 $ 5,226 (Income) loss from consolidated joint ventures attributable to noncontrolling interests (931 ) 701 Net income attributable to redeemable noncontrolling interests in operating partnership   (5,118 )   (792 ) Net income attributable to the Company 37,833 5,135   Interest income (36 ) (60 ) Interest expense and amortization of loan costs 34,817 37,105 Depreciation and amortization 32,161 36,318 Net income attributable to redeemable noncontrolling interests in operating partnership 5,118 792 Income tax expense   1,129     (15 )   EBITDA 111,022 79,275   Amortization of unfavorable management contract liabilities (565 ) (565 ) Gain on sale/disposition of properties (2,802 ) - Write-off of loan costs, premiums and exit fees, net 948 - Other income (1) (48,003 ) (15,534 ) Impairment charges (340 ) (769 ) Transaction acquisition costs (1,223 ) - Fees related to a litigation settlement 5,500 - Unrealized (gain) loss on derivatives 16,817 (13,908 ) Equity earnings in unconsolidated joint ventures (28,124 ) (658 ) The Company's portion of adjusted EBITDA of unconsolidated joint ventures 5,126 658     Adjusted EBITDA $ 58,356   $ 48,499       RECONCILIATION OF NET INCOME (LOSS) TO FUNDS FROM OPERATIONS ("FFO") (in thousands, except per share amounts)     Three Months Ended March 31, 2011 2010 (Unaudited)   Net income $ 43,882 $ 5,226 (Income) loss from consolidated joint ventures attributable to noncontrolling interests (931 ) 701 Net income attributable to redeemable noncontrolling interests in operating partnership (5,118 ) (792 ) Preferred dividends   (6,555 )   (4,830 )   Net loss attributable to common shareholders 31,278 305   Depreciation and amortization on real estate 32,100 36,250 Gain on sale/disposition of properties (2,802 ) - Net income attributable to redeemable noncontrolling interests in operating partnership   5,118     792     FFO available to common shareholders 65,694 37,347   Dividends on convertible preferred stock 1,025 1,042 Write-off of loan costs, premiums and exit fees, net 948 - Impairment charges (340 ) (769 ) Transaction acquisition costs (1,223 ) - Fees related to a litigation settlement 5,500 - Other income (1) (30,000 ) - Unrealized (gain) loss on derivatives 16,817 (13,908 ) Equity earnings in unconsolidated joint ventures (28,124 ) (658 ) The Company's portion of adjusted FFO of unconsolidated joint ventures   2,179     658     Adjusted FFO $ 32,476   $ 23,712     Adjusted FFO per diluted share available to common shareholders $ 0.41   $ 0.31     Weighted average diluted shares   80,118     75,791    

(1)

Income from interest rate derivatives is excluded from the adjusted EBITDA. For the 2011 quarter, a gain of $24,500 from legal settlement is also excluded from the adjusted EBITDA.

 

  ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS MARCH 31, 2011 (dollars in thousands) (Unaudited)                     Fixed-Rate Floating-Rate Total Indebtedness Collateral Maturity Interest Rate Debt Debt Debt   Mortgage loan 1 hotel January 2011 8.32% $ 5,775

(1)

$ - $ 5,775 Mortgage loan 5 hotels December 2011 LIBOR + 1.72% - 203,400 203,400 Senior credit facility Notes receivable April 2012 LIBOR + 2.75% to 3.5% - 45,000

(2)

45,000 Mortgage loan 10 hotels May 2011 LIBOR + 1.65% - 167,202

(3)

167,202 Mortgage loan 2 hotels August 2013 LIBOR + 2.75% - 148,958 148,958 Mortgage loan 1 hotel December 2014 Greater of 5.5% or LIBOR + 3.5% - 19,740 19,740 Mortgage loan 8 hotels December 2014 5.75% 108,410 - 108,410 Mortgage loan 10 hotels July 2015 5.22% 158,443 - 158,443 Mortgage loan 8 hotels December 2015 5.70% 100,119 - 100,119 Mortgage loan 5 hotels December 2015 12.26% 148,753 - 148,753 Mortgage loan 5 hotels February 2016 5.53% 114,242 - 114,242 Mortgage loan 5 hotels February 2016 5.53% 94,742 - 94,742 Mortgage loan 5 hotels February 2016 5.53% 82,067 - 82,067 Mortgage loan 1 hotel April 2017 5.91% 35,000 - 35,000 Mortgage loan 2 hotels April 2017 5.95% 128,251 - 128,251 Mortgage loan 3 hotels April 2017 5.95% 260,980 - 260,980 Mortgage loan 5 hotels April 2017 5.95% 115,600 - 115,600 Mortgage loan 5 hotels April 2017 5.95% 103,906 - 103,906 Mortgage loan 5 hotels April 2017 5.95% 158,105 - 158,105 Mortgage loan 7 hotels April 2017 5.95% 126,466 - 126,466 TIF loan 1 hotel June 2018 12.85% 8,098 - 8,098 Mortgage loan 1 hotel November 2020 6.26% 104,600 - 104,600 Mortgage loan 1 hotel April 2034 Greater of 6% or Prime + 1% - 6,753 6,753       Total indebtedness of continuing operations $ 1,853,557 $ 591,053 $ 2,444,610   Percentage   75.8%   24.2%   100.0%   Weighted average interest rate at March 31, 2011   6.38%   2.47%   5.43%   Weighted average interest rate with the effect of interest rate swap and flooridor   2.58%

(4)

  2.47%

(4)

  2.55%

(4)

 

(1)

We are currently working with the loan servicer for an extension or a restructure of the loan.

(2)

Based on the debt-to-assets ratio defined in the loan agreement, interest rate on this debt was at LIBOR plus 3% as of March 31, 2011.

(3)

The remaining one-year extension option as of March 31, 2011 has been exercised.

(4)

These rates are calculated assuming the LIBOR rate stays at the March 31, 2011 level and with the effect of our interest rate derivatives.

    PIM HIGHLAND HOLDING LLC SUMMARY OF INDEBTEDNESS MARCH 31, 2011 (dollars in thousands) (Unaudited)     Fixed-Rate Floating-Rate Total Indebtedness Collateral Maturity Interest Rate Debt Debt Debt   Mortgage loan 1 hotel January 2013 5.96% $ 65,082 $ - $ 65,082 Mortgage loan 1 hotel April 2013 6.11% 46,938 46,938 Mortgage loan 1 hotel February 2013 5.97% 33,061 33,061 Mortgage loan 25 hotels March 2014 LIBOR + 2.75% - 530,000

(1)

530,000 Mezzanine loan None March 2014 Greater of 6.50% or LIBOR + 6.00% - 144,681

(1)

144,681 Mezzanine loan None March 2014 Greater of 7.5% or LIBOR + 7.00% - 137,734

(1)

137,734 Mezzanine loan None March 2014 Greater of 10.00% or LIBOR + 9.50% - 118,057

(1)

118,057 Mezzanine loan None March 2014 LIBOR + 2.00% 18,425

(1)

18,425       Total indebtedness 145,081 948,897 1,093,978 Ashford's proportionate obligations x 71.74% x 71.74% x 71.74% $ 104,081 $ 680,739 $ 784,820   Percentage   13.3%   86.7%   100.0%   Weighted average interest rate at March 31, 2011   6.01%   5.04%   5.17%  

Total indebtedness of continuing operations plus Ashford's 71.74% share of PIM Highland Holding LLC

$ 1,957,638 $ 1,271,792 $ 3,229,430   Weighted average interest rate with the effect of interest rate swap and flooridor   2.76%   3.84%   3.19%  

(1)

Each of these loans has two one-year extension options beginning March 2014.

            ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES INDEBTEDNESS OF CONTINUING OPERATIONS BY MATURITY ASSUMING EXTENSION OPTIONS NOT SUBJECT TO COVERAGE/LTV TESTS ARE EXERCISED MARCH 31, 2011 (in thousands) (Unaudited)     2011 2012 2013 2014 2015 Thereafter Total   Mortgage loan secured by Manchester Courtyard $ 5,775

(1)

$ - $ - $ - $ - $ - $ 5,775 Secured credit facility - 45,000 - - - - 45,000 Mortgage loan secured by 10 hotel properties, Wachovia Floater - 167,202 - - - - 167,202 Mortgage loan secured by five hotel properties 203,400 - - - - - 203,400 Mortgage loan secured by two hotel properties - - 148,958 - - - 148,958 Mortgage loan secured by El Conquistador Hilton - - - 19,740 - - 19,740 Mortgage loan secured by eight hotel properties, UBS Pool 1 - - - 108,410 - - 108,410 Mortgage loan secured by 10 hotel properties, Merrill Lynch Pool 1 - - - - 158,443 - 158,443 Mortgage loan secured by eight hotel properties, UBS Pool 2 - - - - 100,119 - 100,119 Mortgage loan secured by five hotel properties - - - - 148,753 - 148,753 Mortgage loan secured by five hotel properties, Merrill Lynch Pool 2 - - - - - 114,242 114,242 Mortgage loan secured by five hotel properties, Merrill Lynch Pool 3 - - 94,742 94,742 Mortgage loan secured by five hotel properties, Merrill Lynch Pool 7 - - 82,067 82,067 Mortgage loan secured by Philadelphia Courtyard, Wachovia Stand-Alone - - - - - 35,000 35,000 Mortgage loan secured by two hotel properties, Wachovia Fixed Rate Pool 3 - - - - - 128,251 128,251 Mortgage loan secured by three hotel properties, Wachovia Fixed Rate Pool 7 - - - - - 260,980 260,980 Mortgage loan secured by five hotel properties, Wachovia Fixed Rate Pool 1 - - - - - 115,600 115,600 Mortgage loan secured by five hotel properties, Wachovia Fixed Rate Pool 5 - - - - - 103,906 103,906 Mortgage loan secured by five hotel properties, Wachovia Fixed Rate Pool 6 - - - - - 158,105 158,105 Mortgage loan secured by seven hotel properties, Wachovia Fixed Rate Pool 2 - - - - - 126,466 126,466 TIF loan secured by Philadelphia Courtyard - - - - - 8,098 8,098 Mortgage loan secured by Arlington Marriott - - - - - 104,600 104,600 Mortgage loan secured by Jacksonville Residence Inn - - - - - 6,753 6,753               Total indebtedness of continuing operations $ 209,175 $ 212,202 $ 148,958 $ 128,150 $ 407,315 $ 1,338,810 $ 2,444,610   NOTE: These maturities assume no event of default would occur.

(1)

We are currently working with the loan servicer for an extension or a restructure of the loan.

    PIM HIGHLAND HOLDING LLC INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED MARCH 31, 2011 (in thousands) (Unaudited)     2011 2012 2013 2014 2015 Thereafter Total   Mortgage loan secured by Boston Hilton $ - $ - $ 65,082 $ - $ - $ - $ 65,082 Mortgage loan secured by Nashville Renaissance - - 46,938 - - - 46,938 Mortgage loan secured by Princeton Westin - - 33,061 - - - 33,061 Mortgage loan secured by 25 hotel properties - - - - - 530,000 530,000 Mezzanine loan - - - - - 144,681 144,681 Mezzanine loan - - - - - 137,734 137,734 Mezzanine loan - - - - - 118,057 118,057 Mezzanine loan - - - - - 18,425 18,425               Total indebtedness - - 145,081 - - 948,897 1,093,978 Ashford's proportionate obligations x 71.74% x 71.74% x 71.74% x 71.74% x 71.74% x 71.74% x 71.74% $ - $ - $ 104,081 $ - $ - $ 680,739 $ 784,820  

Total indebtedness of continuing operations plus Ashford's 71.74% share of PIM Highland Holding LLC

$ 209,175 $ 212,202 $ 253,039 $ 128,150 $ 407,315 $ 2,019,549 $ 3,229,430     ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA LEGACY PORTFOLIO ONLY (dollars in thousands) (Unaudited)     Three Months Ended March 31, 2011 2010 % Variance   ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: Room revenues (in thousands) $ 167,203 $ 155,444 7.56 % RevPAR $ 92.20 $ 85.72 7.56 % Occupancy 69.88 % 67.79 % 2.09 % ADR $ 131.94 $ 126.45 4.34 %  

NOTES: The above pro forma table assumes the 97 hotel properties owned and included in continuing operations as of March 31, 2011, were owned as of the beginning of the first comparative reporting period.

 

 

ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:

Room revenues (in thousands) $ 140,482 $ 129,083 8.83 % RevPAR $ 91.72 $ 84.28 8.83 % Occupancy 70.51 % 67.80 % 2.71 % ADR $ 130.08 $ 124.31 4.64 %   NOTES:

The above pro forma table assumes the 85 hotel properties owned and included in continuing operations as of March 31, 2011, but not under renovation for the three months ended March 31, 2011, were owned as of the beginning of the first comparative reporting period.

 

Excluded Hotels Under Renovation: Courtyard Edison, Hilton Costa Mesa, Sheraton Minneapolis West, Crowne Plaza Beverly Hills, Embassy Suites Crystal City-Reagan Airport, Marriott Seattle Waterfront, Fairfield Inn and Suites Kennesaw, Renaissance Tampa, Courtyard Crystal City Reagan Airport, Courtyard Philadelphia Downtown, One Ocean, and Courtyard Louisville Airport.

 

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 OPERATING PROFIT LEGACY PORTFOLIO ONLY (dollars in thousands) (Unaudited)     ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:   Three Months Ended March 31, 2011 2010 % Variance REVENUE Rooms $ 167,203 $ 155,444 7.6 % Food and beverage 38,939 36,771 5.9 % Other   9,229     9,710   -5.0 % Total hotel revenue   215,371     201,925   6.7 %   EXPENSES Rooms 38,094 35,584 7.1 % Food and beverage 26,921 25,948 3.7 % Other direct 5,459 5,429 0.6 % Indirect 61,443 58,677 4.7 % Management fees, includes base and incentive fees   9,300     8,540   8.9 % Total hotel operating expenses 141,217 134,178 5.2 % Property taxes, insurance, and other   11,381     13,310   -14.5 % HOTEL OPERATING PROFIT (Hotel EBITDA) 62,773 54,437 15.3 % Hotel EBITDA Margin 29.15 % 26.96 % 2.19 %   Minority interest in earnings of consolidated joint ventures   1,602     1,084   47.8 %

 

HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures

$ 61,171   $ 53,353   14.7 %   NOTE:

The above pro forma table assumes the 97 hotel properties owned and included in continuing operations as of March 31, 2011 were owned as of the beginning of the first comparative reporting period.

    85 HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:   Three Months Ended March 31, 2011 2010 % Variance REVENUE Rooms $ 140,482 $ 129,083 8.8 % Food and beverage 31,711 29,262 8.4 % Other   7,256     7,718   -6.0 % Total hotel revenue   179,449     166,063   8.1 %   EXPENSES Rooms 31,912 29,527 8.1 % Food and beverage 21,369 20,369 4.9 % Other direct 4,296 4,259 0.9 % Indirect 50,505 48,054 5.1 % Management fees, includes base and incentive fees   8,205     7,422   10.5 % Total hotel operating expenses 116,287 109,631 6.1 % Property taxes, insurance, and other   9,069     11,031   -17.8 % HOTEL OPERATING PROFIT (Hotel EBITDA) 54,093 45,401 19.1 % Hotel EBITDA Margin 30.14 % 27.34 % 2.80 %   Minority interest in earnings of consolidated joint ventures   579     467   24.0 %

HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures

$ 53,514   $ 44,934   19.1 %   NOTES: (1)

The above pro forma table assumes the 85 hotel properties owned and included in continuing operations as of March 31, 2011, but not under renovation during the three months ended March 31, 2011 were owned as of the beginning of the first comparative reporting period.

  (2)

Excluded Hotels Under Renovation: Courtyard Edison, Hilton Costa Mesa, Sheraton Minneapolis West, Crowne Plaza Beverly Hills, Embassy Suites Crystal City-Reagan Airport, Marriott Seattle Waterfront, Fairfield Inn and Suites Kennesaw, Renaissance Tampa, Courtyard Crystal City Reagan Airport, Courtyard Philadelphia Downtown, One Ocean, and Courtyard Louisville Airport.

  (3)

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 LEGACY PORTFOLIO ONLY (Unaudited)             Three Months Ended Number of Number of March 31, Region Hotels Rooms 2011 2010 % Change   Pacific (1) 20 4,867 $ 91.67 $ 84.26 8.8 % Mountain (2) 8 1,704 86.87 84.56 2.7 % West North Central (3) 3 690 72.23 68.63 5.2 % West South Central (4) 9 1,936 99.62 88.07 13.1 % East North Central (5) 7 1,103 64.13 57.93 10.7 % East South Central (6) 2 236 75.48 78.06 -3.3 % Middle Atlantic (7) 8 2,035 87.64 81.18 8.0 % South Atlantic (8) 38 7,728 99.85 93.71 6.6 % New England (9) 2 159 76.10 69.26 9.9 %           Total Portfolio 97 20,458 $ 92.20 $ 85.72 7.6 %     (1) Includes Alaska, California, Oregon, and Washington (2) Includes Nevada, Arizona, New Mexico, and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey, and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, District of Columbia, and North Carolina (9) Includes Connecticut     NOTES:

The above pro forma table assumes the 97 hotel properties owned and included in continuing operations as of March 31, 2011 were owned as of the beginning of the comparative reporting period.

 

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 LEGACY PORTFOLIO ONLY (Unaudited)             Three Months Ended Number of Number of March 31, Brand Hotels Rooms 2011 2010 % Change   Hilton 31 6,693 $ 100.22 $ 92.80 8.0% Hyatt 1 242 172.36 157.33 9.6% InterContinental 2 420 163.53 151.06 8.3% Independent 2 317 73.40 66.34 10.6% Marriott 56 11,376 87.28 81.77 6.7% Starwood 5 1,410 59.61 53.61 11.2%           Total Portfolio 97 20,458 $ 92.20 $ 85.72 7.6%     NOTES:

The above pro forma table assumes the 97 hotel properties owned and included in continuing operations as of March 31, 2011 were owned as of the beginning of the first comparative reporting period.

 

As the Company's Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma table, all room revenues related to this hotel are reflected, which is consistent with the Company's other hotels.

          ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT BY REGION LEGACY PORTFOLIO ONLY (dollars in thousands) (Unaudited)       Three Months Ended Number of Number of March 31, Region Hotels Rooms 2011   % Total 2010   % Total % Change   Pacific (1) 20 4,867 $ 14,736 23.5 % $ 11,958 22.0 % 23.2 % Mountain (2) 8 1,704 4,539 7.2 % 4,757 8.7 % -4.6 % West North Central (3) 3 690 1,662 2.7 % 1,427 2.6 % 16.5 % West South Central (4) 9 1,936 7,370 11.7 % 5,721 10.5 % 28.8 % East North Central (5) 7 1,103 1,952 3.1 % 1,359 2.5 % 43.6 % East South Central (6) 2 236 621 1.0 % 709 1.3 % -12.4 % Middle Atlantic (7) 8 2,035 4,678 7.5 % 3,907 7.2 % 19.7 % South Atlantic (8) 38 7,728 26,874 42.8 % 24,322 44.7 % 10.5 % New England (9) 2 159 342 0.5 % 277 0.5 % 23.5 %                   Total Portfolio 97 20,458 $ 62,774   100.0 % $ 54,437   100.0 % 15.3 %     (1) Includes Alaska, California, Oregon, and Washington (2) Includes Nevada, Arizona, New Mexico, and Utah (3) Includes Minnesota and Kansas (4) Includes Texas (5) Includes Ohio and Indiana (6) Includes Kentucky and Alabama (7) Includes New York, New Jersey, and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, District of Columbia, and North Carolina (9) Includes Connecticut     NOTES:

The above pro forma table assumes the 97 hotel properties owned and included in continuing operations as of March 31, 2011 were owned as of the beginning of the first comparative reporting period.

 

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.

      PIM HIGHLAND HOLDING LLC PRO FORMA PORTFOLIO PERFORMANCE (dollars in thousands) (Unaudited)      

THE FOLLOWING TABLES PRESENT THE COMPANY'S 71.74% OF THE PRO FORMA PERFORMANCE OF THE 28-HOTEL PROPERTY PORTFOLIO INCLUDED IN PIM HIGHLAND HOLDING LLC AS IF THEY WERE OWNED AS OF THE BEGINNING OF FIRST COMPARATIVE REPORTING PERIOD.

  Three Months Ended March 31, 2011 2010 % Variance  

HOTEL PERFORMANCE INDICATORS:

Room revenues (in thousands) $ 46,080 $ 43,699 5.45% RevPAR $ 89.69 $ 85.06 5.44% Occupancy 67.70% 65.92% 1.78% ADR $ 130.70 $ 129.04 1.29%    

HOTEL PROFIT:

  Revenue Rooms $ 46,080 $ 43,699 5.4% Food and beverage 17,033 16,243 4.9% Other   2,746   2,860 -4.0% Total hotel revenue   65,859   62,802 4.9%   Expenses Rooms 12,024 11,210 7.3% Food and beverage 12,412 11,753 5.6% Other direct 1,356 1,290 5.1% Indirect 20,196 19,442 3.9% Management fees, includes base and incentive fees   1,978   1,813 9.1% Total hotel operating expenses 47,966 45,508 5.4% Property taxes, insurance, and other   4,044   4,067 -0.6% Hotel Operating Profit (Hotel EBITDA) $ 13,849 $ 13,227 4.7% Hotel EBITDA Margin 21.03% 21.06% -0.03%     ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT MARGIN (Unaudited)    

THE FOLLOWING PRO FORMA HOTEL OPERATING PROFIT MARGIN PRESENTS THE 85 HOTELS INCLUDED IN THE COMPANY'S CONTINUING OPERATIONS THAT WERE NOT UNDER RENOVATION AND THE 28 HOTELS INCLUDED IN PIM HIGHLAND HOLDING AS IF THESE HOTELS WERE OWNED AS OF THE BEGINNING OF THE FIRST COMPARATIVE REPORTING PERIOD.

  PIM Highland 85 Legacy Holding LLC Properties 28 Properties HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:   First Quarter 2011 30.14% 21.03% First Quarter 2010 27.34% 21.06% Variance 2.80% -0.03%   HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:   Rooms -0.03% -0.40% Food & Beverage and Other Departmental 0.53% -0.13% Administrative & General 0.03% -0.10% Sales & Marketing 0.03% -0.37% Hospitality 0.02% -0.01% Repair & Maintenance 0.35% -0.08% Energy 0.28% 0.32% Franchise Fee -0.07% -0.10% Management Fee 0.03% -0.06% Incentive Management Fee -0.13% -0.06% Insurance 0.27% -0.09% Property Taxes 1.23% 0.57% Other Taxes 0.09% -0.15% Leases/Other 0.17% 0.63% Total 2.80% -0.03%    

NOTE: As the Company’s Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma tables, all operating results related to this hotel are reflected, which is consistent with the Company's other hotels.

          ASHFORD HOSPITALITY TRUST, INC. PRO FORMA SEASONALITY TABLE (dollars in thousands) (Unaudited)    

THE FOLLOWING PRO FORMA SEASONALITY TABLES REFLECT: (I) ALL 97 HOTELS INCLUDED IN THE COMPANY'S CONTINUING OPERATIONS, (II) THE COMPANY'S 71.74% SHARE OF THE 28 HOTELS INCLUDED IN PIM HIGHLAND HOLDING LLC, AND (III) THE COMBINED PORTFOLIO, AS IF THESE HOTELS WERE OWNED AT THE BEGINNING OF THE FIRST COMPARATIVE REPORTING PERIOD.

    2011 2010 2010 2010 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter TTM   Legacy Portfolio Total Hotel Revenue $ 215,371 $ 225,622 $ 205,526 $ 222,040 $ 868,559 Hotel EBITDA $ 62,773 $ 60,716 $ 54,567 $ 65,318 $ 243,374 Hotel EBITDA Margin 29.1% 26.9% 26.5% 29.4% 28.0%   EBITDA % of Total TTM 25.8% 25.0% 22.4% 26.8% 100.0%   JV Interests in EBITDA $ 1,602 $ 1,445 $ 1,125 $ 1,892 $ 6,064  

NOTE: As the Company's Courtyard by Marriott hotel in Philadelphia, Pennsylvania, is leased to a third-party tenant on a triple-net lease basis, the Company only records rental income related to this operating lease for GAAP purposes. However, in the above pro forma table, all room revenues related to this hotel are reflected, which is consistent with the Company's other hotels.

   

PIM Highland Holding LLC Portfolio

Total Hotel Revenue $ 65,859 $ 73,684 $ 65,720 $ 74,452 $ 279,715 Hotel EBITDA $ 13,849 $ 18,366 $ 14,991 $ 21,758 $ 68,964 Hotel EBITDA Margin 21.0% 24.9% 22.8% 29.2% 24.7%   EBITDA % of Total TTM 20.1% 26.6% 21.7% 31.6% 100.0%    

Legacy and PIM Highland Holding LLC Combined

Total Hotel Revenue $ 281,230 $ 299,306 $ 271,246 $ 296,492 $ 1,148,274 Hotel EBITDA $ 76,622 $ 79,082 $ 69,558 $ 87,076 $ 312,338 Hotel EBITDA Margin 27.2% 26.4% 25.6% 29.4% 27.2%   EBITDA % of Total TTM 24.5% 25.3% 22.3% 27.9% 100.0%   JV Interests in EBITDA $ 1,602 $ 1,445 $ 1,125 $ 1,892 $ 6,064   Anticipated Capital Expenditures Calendar 97 Legacy Hotels (a)                                      

2010

  2011 Rooms 1st Quarter   2nd Quarter   3rd Quarter   4th Quarter 1st Quarter   2nd Quarter   3rd Quarter   4th Quarter     Actual   Actual   Actual   Actual Actual   Estimated   Estimated   Estimated Courtyard Louisville Airport 150 x x x x x Hilton Costa Mesa 486 x x x Courtyard Crystal City Reagan Airport 272 x x x Courtyard Edison 146 x x x Courtyard Philadelphia Downtown 498 x x Crowne Plaza Beverly Hills 260 x x Embassy Suites Crystal City - Reagan Airport 267 x x Fairfield Inn and Suites Kennesaw 87 x x Marriott Seattle Waterfront 358 x x One Ocean 193 x x Renaissance Tampa 293 x x Sheraton Minneapolis West 222 x x Embassy Suites Austin Arboretum 150 x x x x Embassy Suites Dallas Galleria 150 x x x Embassy Suites Houston 150 x x x Hilton Nassau Bay - Clear Lake 243 x x x x x Courtyard Old Town Scottsdale 180 x x Capital Hilton 408 x x x x x x Courtyard Legacy Park 153 x x Courtyard Newark 181 x x Crowne Plaza La Concha - Key West 160 x x Embassy Suites Walnut Creek 249 x x Residence Inn Las Vegas 256 x x Sheraton City Center - Indianapolis 371 x x x x SpringHill Suites Charlotte 136 x x SpringHill Suites Raleigh Airport 120 x x SpringHill Suites Richmond 136 x x Courtyard San Francisco Downtown 405 x Marriott Dallas Market Center 265 x Marriott Legacy Center 404 x x Residence Inn Newark 168 x Residence Inn Phoenix Airport 200 x Courtyard Basking Ridge 235 x Courtyard Foothill Ranch Irvine 156 x Courtyard Hartford - Manchester 90 x Courtyard Oakland Airport 156 x Courtyard Seattle Downtown 250 x Embassy Suites Flagstaff 119 x Embassy Suites Portland - Downtown 276 x x Embassy Suites Santa Clara - Silicon Valley 257 x Hilton Santa Fe 157 x Marriott Bridgewater 347 x x Residence Inn Jacksonville 120 x Sheraton San Diego Mission Valley 260 x SpringHill Suites Mall of Georgia 96 x SpringHill Suites Manhattan Beach 164 x SpringHill Suites Philadelphia 199                               x    

(a) Only hotels which have had or are expected to have significant capital expenditures that could result in displacement during 2011 are included in this table.