Ashford Hospitality Trust Reports First Quarter Results

DALLAS, May 3 /PRNewswire-FirstCall/ -- Ashford Hospitality Trust, Inc. today reported the following results and performance measures for the first quarter ended March 31, 2006. The proforma performance measurements for Occupancy, ADR, RevPar, and Hotel Operating Profit include the Company's 64 core hotels, which exclude 7 hotel assets held for sale through March 31, 2006. Unless otherwise stated, all reported results compare the first quarter ended March 31, 2006, to the first quarter ended March 31, 2005. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL HIGHLIGHTS - Total revenue increased 122.5% to $108.9 million from $49.0 million - Net income available to common shareholders was $4.7 million compared to $63,000 o Net income available to common shareholders per share was $0.09 compared with $0.00 - Adjusted funds from operations (AFFO) increased 169% to $19.2 million from $7.1 million - AFFO per diluted share increased 59% to $0.27 from $0.17 - Cash available for distribution (CAD) was $17.3 million, or $0.24 per diluted share - CAD per share increased by 41.2% for the quarter, or $0.07 per diluted share - Declared quarterly common dividend of $0.20 per share - Dividend payout ratio was 83.3 % of CAD for the quarter STRONG INTERNAL GROWTH - Proforma revenue per available room (RevPAR) increased 12.0% for hotels not under renovation on a 7.1% increase in ADR to $119.61 and 327-basis point improvement in occupancy - Proforma RevPAR increased 11.0% for consolidated hotels on an 8.3% increase in ADR to $118.29 and 171-basis point improvement in occupancy - Proforma same-property hotel operating profit for hotels not under renovation improved 8.0% CAPITAL RECYCLING AND ASSET ALLOCATION - Capex invested in first quarter totals $9.7 million - Additional Capex estimated for 2006 totals approximately $50 million EXTERNAL GROWTH - Total enterprise value improved to $1.6 billion at March 31, 2006 - Acquired the Marriott at Research Triangle park in Durham, NC, for $28.0 million in cash and capital improvements planned of $5.7 million - Mezzanine and first mortgage loan portfolio totaled $108.1 million at March 31, 2006, with weighted average interest rate of 14.6% PORTFOLIO REVPAR REFLECTS BENEFIT OF VALUE-ADDED RENOVATIONS

As of March 31, 2006, the Company had a portfolio of direct hotel investments consisting of 71 properties, 64 of which were classified in continuing operations. During the first quarter, 52 of the hotels included in continuing operations were not under renovation. The Company believes reporting its operating metrics for continuing operations on a proforma consolidated and proforma not-under-renovation basis 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 the 64 hotels in continuing operations. Details of each category are provided in the tables attached to this release.

- RevPAR growth by region was led by: East North Central (11 hotels) with a 19.9% increase; West South Central (5) with 18.2%; Middle Atlantic (3) with 15.5%; Pacific (6) with 11.9%; South Atlantic (26) with 8.5%; New England (2) with 8.2%; East South Central (4) with 7.6%; Mountain (5) with 7.3%; and West North Central (2) with 3.1%. - RevPAR growth by brand was led by: Starwood (2 hotels) with a 23.7% increase; InterContinental (2) with 17.5%; Hyatt (2) with 14.7%; Hilton (22) with 11.3%; Marriott (28) with 10.9%; Radisson (6) with 4.0 %; and independents (2) with an 11.7% decrease.

Monty J. Bennett, President and CEO, commented, "The performance of our portfolio reflects the significant value we have created through the selective assembly of assets with long-term growth potential and an aggressive renovation program. With an additional $50 million set aside for investments in 9 new renovations to begin between now and year end, we expect this program to fuel continued growth in RevPAR and hotel operating profit. Additionally we have opportunities to further enhance our hotel operating margins and we are confident our property managers can help us realize the value inherent in the assets we have renovated. While our hotel operating profit for the 52 hotels not under renovation was up $1.9 million, or 8%, for the quarter, our profit margin decreased by 80 basis points. This was primarily the result of an unfavorable comparison to the 15 CNL hotels which had a different management fee structure in 2005 and resulted in an increased expense of 80 basis points as well as an overall escalation of uncontrollable costs for energy, insurance and franchise fees of 40 basis points. Additionally, the Company has strategically increased service levels at certain hotels, which in the long term will add to our RevPAR growth, but in the short term affects year over year expense comparisons. As we look forward in 2006 we believe these cost challenges will work themselves through our statements and should be alleviated in the second half of the year."

FINANCING ACTIVITY LOWERS BORROWING COSTS

At March 31, 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 38.6% based upon the Company's closing stock price of $12.40. As of March 31, 2006, the Company's $719.8 million debt portfolio consisted of approximately 97% of fixed-rate debt and approximately 3% of variable-rate debt, with a total weighted average interest rate of 5.56%. The Company's weighted average debt maturity is 9.2 years.

On January 25, 2006, in an underwritten follow-on public offering, the Company issued 12,107,623 shares of its common stock at $11.15 per share, which generated gross proceeds of approximately $135.0 million. The aggregate proceeds to the Company, net of underwriters' discount and offering costs, was approximately $128.1 million. The net proceeds were used for a $60.0 million pay-down on the Company's $100.0 million credit facility due August 17, 2008, a $45.0 million pay-down on the Company's $45.0 million mortgage loan due October 10, 2007 secured by the Hyatt Dulles, and the $28.0 million acquisition of the Marriott at Research Triangle Park. The additional share count resulting from the capital raise caused AFFO per diluted share to decrease by $0.02 for the quarter from what it would have otherwise been. On April 19, 2006 the Company utilized the benefit from the capital raise to acquire the Pan Pacific Hotel in San Francisco for $95 million.

On April 3, 2006, the Company modified its $45.0 million mortgage note payable secured by the Hyatt Dulles, due October 10, 2007, at an interest rate of LIBOR plus 2%, to a $47.5 million revolving credit facility, with a revolving period through October 11, 2006, maturity remaining through October 10, 2007, and interest rates during the revolving period ranging from LIBOR plus 1% to LIBOR plus 1.5% depending on the outstanding balance. After the revolving period expires, the interest rate resumes its original rate of LIBOR plus 2%. Consistent with the original mortgage, the modified credit facility requires monthly interest-only payments and has three one-year extension options.

FIRST QUARTER INVESTMENT ACTIVITY

On February 24, 2006, the Company acquired the Marriott at Research Triangle Park in Durham, NC, for $28.0 million in cash. The purchase price, on a pro-forma basis excluding Marriott incentive management fees that are not payable going forward by Ashford and using a 5% FF&E reserve, equates to a 9.5x trailing twelve-month EBITDA multiple, an EBITDA yield of 10.5% and a trailing twelve-month net operating income capitalization rate of 8.5%. The property generated revenues of $9.9 million on a trailing twelve month basis.

On March 24, 2006, the Company sold eight non-core hotels for a total sales price of $102 million. The sale price includes $93.7 million of existing financing assumed by the buyer. The hotels, which are all Generation One Residence Inns, were acquired by Ashford in June 2005 as part of the 30-hotel portfolio acquired from CNL Hotels and Resorts. Collectively, the properties were sold at a 9.1% net operating income (NOI) capitalization rate on trailing 12-month net operating income. The hotels had been designated as non-core properties along with seven other hotels in that portfolio. The remaining 15 core hotels from the original 30 hotels purchased as of March 31, 2006 produce a trailing 12-month NOI return of 9.2% and EBITDA yield of 10.1% based upon their original allocated purchase price.

SUBSEQUENT INVESTMENT ACTIVITY

On April 1, 2006, Company management made a strategic decision to discontinue further sales efforts related to the seven remaining hotels, a portfolio of Towne Place Suites, classified as assets held for sale and included in income from discontinued operations as of and for the three months ended March 31, 2006. Over the last twelve months the RevPAR for these hotels has increased over 16% while EBITDA has increased over 22%. Consequently, the Company will classify such assets and operating results as continuing operations in future periods. Such assets will be reported at the lower of carrying value (net of depreciation not recognized while said assets were held for sale) or fair value. In addition, all income statement results previously reported as discontinued related to these hotels will be reclassified to continuing operations for all comparative future periods.

On April 19, 2006, the Company acquired the Pan Pacific San Francisco Hotel in San Francisco, California, for approximately $95.0 million in cash. The Company used proceeds from its credit facility to fund this acquisition. The Company immediately re-branded this hotel to a JW Marriott and expects to invest $10 million to renovate and upgrade the property. On a forward twelve- month basis, the purchase price equates to a 12.2x EBITDA multiple, an EBITDA yield of 8.2% and a net operating income capitalization rate of 6.5% with projected annual revenues of $32 million. The purchase price equates to a trailing twelve-month net operating income capitalization rate of 3.9% and a 5.0% EBITDA yield. The property generated revenues of $25.5 million for the calendar year 2005.

INVESTMENT OUTLOOK

Mr. Bennett concluded, "We believe 2006 will be our best year yet, and the first quarter has lived up to that lofty expectation in terms of internal growth and new investments, further strengthening of our capital structure and capital recycling. Year to date, we have acquired two assets for a total of $123 million. In a competitive market filled with low cap rate deals, we were able to source these very attractive opportunities with much higher first year returns, exceptional brands and markets experiencing rapid RevPAR growth. Our continued success in recycling over $100 million in capital with the sale of ten assets and the transition of our debt structure to 97% fixed rates has also created a strong platform to execute our investment strategy. We are very optimistic this strategy will continue to produce strong year-over-year growth in all of our key metrics - AFFO, CAD, RevPAR and hotel operating profit."

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Trust, Inc. will conduct a conference call at 11:00 a.m. eastern time on May 4, 2006, to discuss the first quarter results. The number to call for this interactive teleconference is 913-981-5533. A seven- day replay of the conference call will be available by dialing 719-457-0820 and entering the confirmation number, 1042667.

The Company will also provide an online simulcast and rebroadcast of its first 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 http://www.ahtreit.com/ as well as on http://www.videonewswire.com/event.asp?id=33199 on May 4, 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 http://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 333-114283), 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 Ended Ended March 31, 2006 March 31, 2005 REVENUE Rooms $84,458 $36,612 Food and beverage 16,074 7,573 Other 4,117 1,889 Total hotel revenue 104,649 46,074 Interest income from notes receivable 3,946 2,548 Asset management fees from affiliates 318 338 Total Revenue 108,913 48,960 EXPENSES Hotel operating expenses Rooms 18,290 8,138 Food and beverage 12,499 5,666 Other direct 1,718 850 Indirect 32,551 14,051 Management fees 4,134 1,457 Total hotel expenses 69,192 30,162 Property taxes, insurance, and other 5,603 2,573 Depreciation and amortization 10,935 4,291 Corporate general and administrative: Stock-based compensation 940 620 Other corporate and administrative 3,870 2,680 Total Operating Expenses 90,540 40,326 OPERATING INCOME 18,373 8,634 Interest income 494 277 Interest expense (11,432) (4,024) Amortization of loan costs (514) (948) Write-off of loan costs and exit fees (687) (151) Loss on debt extinguishment - (2,257) INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 6,234 1,531 (Provision for) benefit from income taxes (78) 242 Minority interest (1,079) (304) INCOME FROM CONTINUING OPERATIONS 5,077 1,469 Income (loss) from discontinued operations, net 2,385 (18) NET INCOME 7,462 1,451 Preferred dividends 2,719 1,388 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $4,743 $63 Basic and Diluted: Income From Continuing Operations Per Share Available To Common Shareholders $0.05 $- Income (Loss) From Discontinued Operations Per Share $0.05 $- Net Income Per Share Available To Common Shareholders $0.09 $- Weighted Average Common Shares Outstanding 51,924,540 33,449,674 ASHFORD HOSPITALITY TRUST, INC. CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share and Per Share Amounts) (Unaudited) March 31, December 31, 2006 2005 ASSETS Investment in hotel properties, net $1,098,621 $1,066,962 Cash and cash equivalents 88,323 57,995 Restricted cash 9,483 27,842 Accounts receivable, net of allowance of 461 and $366, respectively 24,853 21,355 Inventories 1,274 1,186 Assets held for sale 42,181 157,579 Notes receivable 108,106 107,985 Deferred costs, net 12,706 13,975 Prepaid expenses 7,620 9,662 Other assets 9,728 4,014 Intangible assets, net 1,160 1,181 Due from third-party hotel managers 16,230 12,274 Due from affiliates 1,665 476 Total assets $1,421,950 $1,482,486 LIABILITIES AND OWNERS' EQUITY Indebtedness $719,807 $908,623 Capital leases payable 357 453 Accounts payable 12,931 9,984 Accrued expenses 24,239 21,054 Dividends payable 16,253 13,703 Deferred income 324 338 Due to third-party hotel managers 1,711 1,385 Due to affiliates 3,565 5,654 Total liabilities 779,187 961,194 Commitments and contingencies Minority interest 86,662 87,969 Preferred stock, $0.01 par value: Series B Cumulative Convertible Redeemable Preferred Stock, 7,447,865 issued and outstanding at March 31, 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 March 31, 2006 and December 31, 2005 23 23 Common stock, $0.01 par value, 200,000,000 shares authorized, 56,663,044 and 43,831,394 shares issued and outstanding at March 31, 2006 and December 31, 2005, respectively 566 438 Additional paid-in capital 528,730 399,127 Accumulated other comprehensive income 1,009 1,372 Accumulated deficit (49,227) (42,637) Total owners' equity 481,101 358,323 Total liabilities and owners' equity $1,421,950 $1,482,486 ASHFORD HOSPITALITY TRUST, INC. FFO and Adjusted FFO (In Thousands, Except Share And Per Share Amounts) (Unaudited) Three Months Three Months Ended Ended March 31, 2006 March 31, 2005 Net income available to common shareholders $4,743 $63 Plus real estate depreciation and amortization 10,725 4,222 Remove minority interest 1,585 299 FFO available to common shareholders $17,053 $4,584 Add back dividends on redeemable preferred stock 1,490 159 Add back write-off of loan costs and exit fees 687 151 Add back loss on debt extinguishment - 2,257 Adjusted FFO $19,230 $7,151 Adjusted FFO per diluted share available to common shareholders $0.27 $0.17 Diluted weighted average shares outstanding 70,931,242 41,865,016 ASHFORD HOSPITALITY TRUST, INC. EBITDA (In Thousands) (Unaudited) Three Months Three Months Ended Ended March 31, 2006 March 31, 2005 Net income $7,462 $1,451 Add back: Interest income 494 277 Interest expense and amortization of loan costs (11,946) (4,972) Minority interest (1,585) (299) Depreciation and amortization (10,935) (4,297) (Provision for) benefit from income taxes (153) 242 (24,125) (9,049) EBITDA $31,587 $10,500 For the three months ended March 31, 2006, EBITDA has not been adjusted to add back the write-off of loan costs of approximately $687,000. For the three months ended March 31, 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. CASH AVAILABLE FOR DISTRIBUTION (In Thousands, Except Per Share Amounts) (Unaudited) Three Three Months Months Ended (per Ended (per March 31, diluted March 31, diluted 2006 share) 2005 share) Net income available to common shareholders $4,743 $0.07 $63 $- Add back dividends on redeemable preferred stock 1,490 0.02 159 0.00 Total $6,233 $0.09 $222 $0.01 Plus real estate depreciation and amortization 10,725 $0.15 4,222 $0.10 Remove minority interest 1,585 0.02 299 0.01 Plus stock-based compensation 940 0.01 620 0.01 Plus amortization of loan costs 514 0.01 948 0.02 Plus write-off of loan costs 687 0.01 151 0.00 Plus loss on debt extinguishment - 0.00 2,257 0.05 Less debt premium amortization to reduce interest expense - 0.00 (75) (0.00) Less capital improvements reserve (3,393) (0.05) (1,706) (0.04) CAD $17,291 $0.24 $6,938 $0.17 ASHFORD HOSPITALITY TRUST, INC. KEY PERFORMANCE INDICATORS - PRO FORMA (Unaudited) Three Months Ended March 31, 2006 2005 % Variance ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: Room revenues $85,657,310 $77,178,912 10.98% RevPar $84.48 $76.12 10.98% Occupancy 71.42% 69.71% 2.44% ADR $118.29 $109.18 8.34% NOTE: The above pro forma table includes the 64 hotel properties included in income from continuing operations for the three months ended March 31, 2006 as if all such hotels were owned as of the beginning of the periods presented. Three Months Ended March 31, 2006 2005 % Variance ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: Room revenues $68,001,916 $60,716,196 12.00% RevPar $88.51 $79.03 12.00% Occupancy 74.00% 70.73% 4.61% ADR $119.61 $111.72 7.06% NOTE: The above pro forma table includes the 52 hotel properties included in income from continuing operations that were not under renovation during the quarter and year ended March 31, 2006 as if all such hotels were owned as of the beginning of the periods presented. Excluded Hotels Under Renovation: Crowne Plaza Beverly Hills, Embassy Suites Houston, Embassy Suites West Palm Beach, Hilton Nassau Bay, Annapolis Inn, Radisson City Center Indianapolis, Radisson Airport Indianapolis, Radisson Milford, Hilton Ft. Worth, Radisson Rockland, Sheraton Minneapolis, Marriott Residence Inn San Diego ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel RevPAR by Region (Unaudited) Three Months Percent Number Ended Change of Number March 31, in RevPAR Region Hotels of Rooms 2006 2005 Quarter Pacific (1) 6 1,501 $97.76 $87.36 11.9% Mountain (2) 5 869 $101.51 $94.57 7.3% West North Central (3) 2 390 $65.53 $63.57 3.1% West South Central (4) 5 987 $82.18 $69.54 18.2% East North Central (5) 11 1,682 $57.29 $47.79 19.9% East South Central (6) 4 573 $57.11 $53.07 7.6% Middle Atlantic (7) 3 590 $60.46 $52.32 15.5% South Atlantic (8) 26 4,339 $100.29 $92.41 8.5% New England (9) 2 300 $32.84 $30.34 8.2% Total Portfolio 64 11,231 $84.48 $76.12 11.0% (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 and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts NOTE: The above pro forma table assumes the 64 hotel properties included in income from continuing operations for the three months ended March 31, 2006 were owned as of the beginning of the periods presented. For both comparative periods presented, the above table excludes the 7 hotel properties included in discontinued operations at March 31, 2006. ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel RevPAR by Brand (Unaudited) Three Months Percent Number Ended Change of Number March 31, in RevPAR Brand Hotels of Rooms 2006 2005 Quarter Hilton 22 3,638 $86.80 $77.97 11.3% Hyatt 2 970 $100.01 $87.16 14.7% InterContinental 2 420 $152.68 $129.98 17.5% Independent 2 317 $72.36 $81.94 -11.7% Marriott 28 4,123 $88.41 $79.72 10.9% Radisson 6 1,354 $44.53 $42.80 4.0% Starwood 2 409 $59.51 $48.12 23.7% Total Portfolio 64 11,231 $84.48 $76.12 11.0% NOTE: The above pro forma table assumes the 64 hotel properties included in income from continuing operations for the three months ended March 31, 2006 were owned as of the beginning of the periods presented. For both comparative periods presented, the above table excludes the 7 hotel properties included in discontinued operations at March 31, 2006. ASHFORD HOSPITALITY TRUST, INC. PRO FORMA HOTEL OPERATING PROFIT (In Thousands) (Unaudited) ALL HOTELS INCLUDED IN CONTINUING OPERATIONS: Three Months Ended March 31, March 31, 2006 2005 % Variance REVENUE Rooms $85,657 $77,179 10.98% Food and beverage 16,451 16,035 2.59% Other 3,627 3,326 9.05% Total hotel revenue 105,735 96,540 9.52% EXPENSES Hotel operating expenses Rooms 18,852 16,953 11.20% Food and beverage 12,650 11,850 6.75% Other direct 1,748 1,506 16.07% Indirect 32,198 28,412 13.33% Management fees, includes base and incentive fees 5,056 3,857 31.09% Total hotel operating expenses 70,504 62,578 12.67% Property taxes, insurance, and other 5,638 5,127 9.97% HOTEL OPERATING PROFIT (EBITDA) $29,593 $28,835 2.63% NOTE: The above pro forma table assumes the 64 hotel properties included in income from continuing operations for the three months ended March 31, 2006 were owned as of the beginning of the periods presented. For the comparative periods presented, the above table excludes the 7 hotel properties included in discontinued operations at March 31, 2006. ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS: Three Months Ended March 31, March 31, 2006 2005 % Variance REVENUE Rooms $68,002 $60,716 12.00% Food and beverage 11,649 11,293 3.15% Other 2,747 2,409 14.03% Total hotel revenue 82,398 74,418 10.72% EXPENSES Hotel operating expenses Rooms 15,070 13,673 10.22% Food and beverage 8,858 8,276 7.03% Other direct 1,302 1,099 18.47% Indirect 23,321 20,715 12.58% Management fees, includes base and incentive fees 4,123 3,124 31.98% Total hotel operating expenses 52,674 46,887 12.34% Property taxes, insurance, and other 4,149 3,860 7.49% HOTEL OPERATING PROFIT (EBITDA) $25,575 $23,671 8.04% NOTE: The above pro forma table assumes the 52 hotel properties not under renovation and included in income from continuing operations for the three months ended March 31, 2006 were owned as of the beginning of the periods presented. For the comparative periods presented, the above table excludes the 7 hotel properties included in discontinued operations at March 31, 2006. 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: 1st Quarter 2006 31.0% 1st Quarter 2005 31.8% Variance -0.8% HOTEL OPERATING PROFIT (EBITDA) MARGIN VARIANCE BREAKDOWN: Rooms (1) -0.1% Food & Beverage and Other Departmental -0.3% Administrative & General (2) 0.4% Sales & Marketing -0.1% Repair & Maintenance (3) - Energy (4) 0.1% Franchise Fee (5) 0.2% Management Fee (6) 0.1% Incentive Management Fee (6) 0.7% Insurance (7) 0.1% Taxes -0.2% Leases/Other -0.2% Total 0.8% NOTE: The above pro forma table assumes the 52 hotel properties not under renovation and included in income from continuing operations for the three months ended March 31, 2006 were owned as of the beginning of the periods presented. For the comparative periods presented, the above table excludes the 7 hotel properties included in discontinued operations at March 31, 2006. (1) Service levels were increased at many properties during the second half of 2005 which prevented a more favorable first quarter comparison. Occupied rooms increased 461 basis points in the quarter which also increased rooms expense. Management believes rooms profit margin should see improvement in the second half of 2006. (2) Management staffing was increased at several properties during the second half of 2005 which prevented a more favorable comparison. Also credit card usage as a form of payment has increased significantly during the last six months. Management believes A&G expense should see a more favorable comparison in the second half of 2006. (3) Maintenance expenses were increased at many properties during the second half of 2005 in order to improve service levels. Occupied rooms increased 461 basis points in the quarter which also increased this expense. Management believes R&M expense comparison should see improvement in the second half of 2006. (4) Energy costs are currently increasing at a rate higher than RevPAR. Management believes this trend may continue throughout 2006. (5) These fees are up due to an unfavorable comparison for the Marriott Research Triangle Park which was not a franchised property in 2006, as well as a step-up in Royalty Fee percentages at two hotels. Additionally, customer loyalty program usage has been increasing over the last twelve months. (6) These fees are up due to an unfavorable comparison for the Marriott managed properties which had a different fee structure in place prior to our acquisition from CNL. A comparable fee comparison for these assets will begin in the third quarter of 2006. (7) Following the 2005 hurricane season, insurance costs experienced a significant increase. Management believes this unfavorable comparison will continue throughout 2006. ASHFORD HOSPITALITY TRUST, INC. Pro Forma Hotel Operating Profit by Region (In Thousands) (Unaudited) Percent Change Three Months in Hotel Number Number Ended Operating of of March 31, Profit Region Hotels Rooms 2006 % Total 2005 % Total Quarter Pacific (1) 6 1,501 $5,446 18.4% $5,454 18.9% -0.1% Mountain (2) 5 869 $2,868 9.7% $2,816 9.8% 1.8% West North Central (3) 2 390 $772 2.6% $743 2.6% 3.9% West South Central (4) 5 987 $2,167 7.3% $2,116 7.3% 2.4% East North Central (5) 11 1,682 $2,397 8.1% $1,729 6.0% 38.6% East South Central (6) 4 573 $800 2.7% $695 2.4% 15.1% Middle Atlantic (7) 3 590 $172 0.6% $95 0.3% 81.1% South Atlantic (8) 26 4,339 $15,386 52.0% $15,420 53.5% -0.2% New England (9) 2 300 ($415) -1.4% ($233) -0.8% 78.1% Total Portfolio 64 11,231 $29,593 100.0% $28,835 100.0% 2.6% (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 and Pennsylvania (8) Includes Virginia, Florida, Georgia, Maryland, and North Carolina (9) Includes Massachusetts NOTE: The above pro forma table assumes the 64 hotel properties included in income from continuing operations for the three months ended March 31, 2006 were owned as of the beginning of the periods presented. For both comparative periods presented, the above table excludes the 7 hotel properties included in discontinued operations at March 31, 2006. Ashford Hospitality Trust, Inc. Debt Summary As of March 31, 2006 (in millions) Floating- Fixed-Rate 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 $100.0 million secured credit facility secured by 6 hotel properties, matures August 17, 2008, at an interest rate of LIBOR plus a range of 1.6% to 1.95% depending on the loan-to-value ratio - 10.0 10.0 Mortgage note payable secured by one hotel property, matures April 1, 2011, at an interest rate of the average weekly yield for 30-day commercial paper plus 3.4% - 11.2 11.2 Total Debt Excluding Premium $698.6 $21.2 $719.8 Percentage of Total 97.05% 2.95% 100.00% Weighted Average Interest Rate at March 31, 2006 5.56% ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 72 Core Hotels 2004 Actual Actual Actual Actual 1st 2nd 3rd 4th Rooms Quarter Quarter Quarter Quarter 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 Residence Inn Evansville 78 Fairfield Inn Princeton 73 Courtyard Columbus Tipton Lakes 90 Courtyard Bloomington 117 Radisson Milford 173 Residence Inn Salt Lake City 144 Hilton Fort Worth 294 Historic Inns of Annapolis 124 Residence Inn Palm Desert 130 Embassy Suites Houston 150 Radisson Rockland 127 Sheraton Minneapolis West 222 Residence Inn San Diego Sorrento Mesa 150 Radisson Hotel Airport - Indianapolis 259 Hilton Nassau Bay - Clear Lake 243 Embassy Suites West Palm Beach 160 Crowne Plaza Beverly Hills 260 Radisson City Center - Indianapolis 371 Crowne Plaza La Concha - Key West 160 Hilton Santa Fe 157 Residence Inn Fairfax Merrifield 159 Courtyard Crystal City Reagan Airport 272 Hyatt Dulles 316 SpringHill Suites Kennesaw 90 SpringHill Suites Jacksonville 102 Sea Turtle Inn Jacksonville 193 Courtyard Palm Desert 151 Marriott at Research Triangle Park 225 Hilton Garden Inn Jacksonville 119 SpringHill Suites BWI Airport 133 SpringHill Suites Centreville 136 SpringHill Suites Gaithersburg 162 Courtyard Overland Park 168 JW Marriott San Francisco 338 TownePlace Suites Boston Tewksbury 95 TownePlace Suites Miami Lakes 95 TownePlace Suites Ft. Worth 95 TownePlace Suites Miami Airport 95 TownePlace Suites Newark Silicon Valley 127 TownePlace Suites Mt. Laurel 95 TownePlace Suites Portland Scarborough 95 Courtyard Atlanta Alpharetta 154 Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Courtyard Louisville Airport 150 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Embassy Suites Las Vegas Airport 220 Fairfield Inn and Suites Kennesaw 87 Hampton Inn Lawrenceville 86 Homewood Suites Mobile 86 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Lake Buena Vista 210 Residence Inn Orlando Sea World 350 SpringHill Suites Charlotte 136 SpringHill Suites Mall of Georgia 96 SpringHill Suites Raleigh Airport 120 ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 72 Core Hotels 2005 Actual Actual Actual Actual 1st 2nd 3rd 4th Rooms Quarter Quarter Quarter Quarter 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 Residence Inn Evansville 78 x x x Fairfield Inn Princeton 73 x x x Courtyard Columbus Tipton Lakes 90 x x x Courtyard Bloomington 117 x x x Radisson Milford 173 x x x Residence Inn Salt Lake City 144 x Hilton Fort Worth 294 x x x Historic Inns of Annapolis 124 x x Residence Inn Palm Desert 130 x x Embassy Suites Houston 150 x Radisson Rockland 127 x Sheraton Minneapolis West 222 x Residence Inn San Diego Sorrento Mesa 150 x Radisson Hotel Airport - Indianapolis 259 x Hilton Nassau Bay - Clear Lake 243 x Embassy Suites West Palm Beach 160 x Crowne Plaza Beverly Hills 260 x Radisson City Center - Indianapolis 371 x Crowne Plaza La Concha - Key West 160 Hilton Santa Fe 157 Residence Inn Fairfax Merrifield 159 Courtyard Crystal City Reagan Airport 272 Hyatt Dulles 316 SpringHill Suites Kennesaw 90 SpringHill Suites Jacksonville 102 Sea Turtle Inn Jacksonville 193 Courtyard Palm Desert 151 Marriott at Research Triangle Park 225 Hilton Garden Inn Jacksonville 119 SpringHill Suites BWI Airport 133 SpringHill Suites Centreville 136 SpringHill Suites Gaithersburg 162 Courtyard Overland Park 168 JW Marriott San Francisco 338 TownePlace Suites Boston Tewksbury 95 TownePlace Suites Miami Lakes 95 TownePlace Suites Ft. Worth 95 TownePlace Suites Miami Airport 95 TownePlace Suites Newark Silicon Valley 127 TownePlace Suites Mt. Laurel 95 TownePlace Suites Portland Scarborough 95 Courtyard Atlanta Alpharetta 154 Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Courtyard Louisville Airport 150 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Embassy Suites Las Vegas Airport 220 Fairfield Inn and Suites Kennesaw 87 Hampton Inn Lawrenceville 86 Homewood Suites Mobile 86 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Lake Buena Vista 210 Residence Inn Orlando Sea World 350 SpringHill Suites Charlotte 136 SpringHill Suites Mall of Georgia 96 SpringHill Suites Raleigh Airport 120 ASHFORD HOSPITALITY TRUST, INC. Capital Expenditures Calendar 72 Core Hotels 2006 Actual Estimated Estimated Estimated 1st 2nd 3rd 4th Rooms Quarter Quarter Quarter Quarter 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 Residence Inn Evansville 78 Fairfield Inn Princeton 73 Courtyard Columbus Tipton Lakes 90 Courtyard Bloomington 117 Radisson Milford 173 x Residence Inn Salt Lake City 144 Hilton Fort Worth 294 x Historic Inns of Annapolis 124 x x Residence Inn Palm Desert 130 Embassy Suites Houston 150 x Radisson Rockland 127 x Sheraton Minneapolis West 222 x Residence Inn San Diego Sorrento Mesa 150 x Radisson Hotel Airport - Indianapolis 259 x Hilton Nassau Bay - Clear Lake 243 x Embassy Suites West Palm Beach 160 x x x Crowne Plaza Beverly Hills 260 x x x Radisson City Center - Indianapolis 371 x x Crowne Plaza La Concha - Key West 160 x x Hilton Santa Fe 157 x x Residence Inn Fairfax Merrifield 159 x x Courtyard Crystal City Reagan Airport 272 x x Hyatt Dulles 316 x x SpringHill Suites Kennesaw 90 x x SpringHill Suites Jacksonville 102 x x Sea Turtle Inn Jacksonville 193 x x Courtyard Palm Desert 151 x x Marriott at Research Triangle Park 225 Hilton Garden Inn Jacksonville 119 SpringHill Suites BWI Airport 133 SpringHill Suites Centreville 136 SpringHill Suites Gaithersburg 162 Courtyard Overland Park 168 JW Marriott San Francisco 338 TownePlace Suites Boston Tewksbury 95 TownePlace Suites Miami Lakes 95 TownePlace Suites Ft. Worth 95 TownePlace Suites Miami Airport 95 TownePlace Suites Newark Silicon Valley 127 TownePlace Suites Mt. Laurel 95 TownePlace Suites Portland Scarborough 95 Courtyard Atlanta Alpharetta 154 Courtyard Ft. Lauderdale Weston 174 Courtyard Foothill Ranch Irvine 156 Courtyard Louisville Airport 150 Embassy Suites Austin Arboretum 150 Embassy Suites Dallas Galleria 150 Embassy Suites Dulles Int'l 150 Embassy Suites Flagstaff 119 Embassy Suites Las Vegas Airport 220 Fairfield Inn and Suites Kennesaw 87 Hampton Inn Lawrenceville 86 Homewood Suites Mobile 86 Radisson Cincinnati Riverfront 236 Radisson Hotel MacArthur Airport 188 Residence Inn Lake Buena Vista 210 Residence Inn Orlando Sea World 350 SpringHill Suites Charlotte 136 SpringHill Suites Mall of Georgia 96 SpringHill Suites Raleigh Airport 120 Contact: David Kimichik Tripp Sullivan Chief Financial Officer Corporate Communications, Inc. (972) 490-9600 (615) 254-3376