DALLAS–(EMWNews)–Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following

results and performance measures for the second quarter ended June 30,

2008. The proforma performance measurements for Occupancy, Average Daily

Rate (ADR), revenue per available room (RevPAR), and Hotel Operating

Profit (or Hotel EBITDA) include the Company’s 105 hotels owned and

included in continuing operations as of June 30, 2008. Unless otherwise

stated, all reported results compare the second quarter ended June 30,

2008, with the second quarter ended June 30, 2007. The reconciliation of

non-GAAP financial measures is included in the financial tables

accompanying this press release.

FINANCIAL HIGHLIGHTS

• Total revenue increased 8.2% to $318.4 million from $294.3 million

• Net loss available to common shareholders was $33.5 million, or $0.28

  per diluted share, compared with net income of $14.1 million in the

  prior-year quarter

• Adjusted funds from operations (AFFO) increased 3.3% to $57.2 million

• AFFO per diluted share was $0.41

• Cash available for distribution (CAD) increased 4.4% to $46.1 million

• CAD per diluted share was $0.33

• Declared quarterly common dividend of $0.21 per diluted share

• AFFO dividend coverage was 194% for the quarter

• CAD dividend coverage was 156%

• Sole debt maturity in 2008 refinanced. Debt maturities due in 2009

  totals $30M

STRONG INTERNAL GROWTH

• Proforma RevPAR increased 2.0% for hotels not under renovation on a

  2.3% increase in ADR to $142.16 and a 18-basis point decline in

  occupancy

• Proforma RevPAR increased 0.9% for all hotels on a 2.6% increase in

  ADR to $145.11 and a 134-basis point decline in occupancy

• Proforma Hotel Operating Profit for hotels not under renovation

  improved 4.8%

• Proforma Hotel Operating Profit margin for hotels not under renovation

  improved 95 basis points

CAPITAL RECYCLING AND ASSET ALLOCATION

• Capex invested in the second quarter totaled $44 million

• Three hotels sold in the second quarter for $208 million in proceeds

• Two additional hotels sold in third quarter for $21 million in proceeds

PORTFOLIO REVPAR GROWTH

As of June 30, 2008, the Company had a portfolio of direct hotel

investments consisting of 105 properties classified in continuing

operations. During the second quarter, 97 of the hotels included in

continuing operations were not under renovation. The Company believes

reporting its operating metrics for continuing operations on a proforma

total basis (all 105 hotels) and proforma not-under-renovation basis (97

hotels) is a measure that reflects a meaningful and focused comparison

of the operating results in its direct hotel portfolio. The Company’s

reporting by region and brand includes the results of all 105 hotels in

continuing operations. Details of each category are provided in the

tables attached to this release.

• RevPAR growth by region was led by: New England (2 hotels) with 5.6%;

  East North Central (10) with 5.4%; East South Central (2) with 4.9%;

  West South Central (10) with 2.7%; South Atlantic (38) with 1.5%;

  Mountain (8) with 0.1%; Pacific (22) with a 0.3% decrease; West North

  Central (3) with a 2.4% decrease and Middle Atlantic (10) with a 2.5%

  decrease.

• RevPAR growth by brand was led by: Radisson (1 hotel) with 5.9%; Hyatt

  (3) with 5.6%; Starwood (6) with 1.8%; Hilton (34) with 1.6%; Marriott

  (57) with 0.0%; InterContinental (2) with a 0.2% decrease and

  Independents (2) with a 19.4% decrease.

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

For the 97 hotels as of June 30, 2008 that were not under renovation,

Proforma Hotel EBITDA (adjusted as if all hotels were included

throughout both periods) increased 4.8% to $91.4 million. Proforma Hotel

EBITDA margin (expressed as a percentage of Total Hotel Revenue)

improved 95 basis points to 32.5%. For all 105 hotels included in

continuing operations as of June 30, 2008, Proforma Hotel EBITDA

increased 1.6% to $101.0 million and Hotel EBITDA margin improved 33

basis points to 31.6%.

Ashford believes year-over-year Hotel EBITDA and Hotel EBITDA margin

comparisons are more meaningful to gauge the performance of the Company’s

hotels than sequential quarter-over-quarter comparisons. Given the

substantial seasonality in the Company’s

portfolio and its active capital recycling, to help investors better

understand this seasonality, the Company provides quarterly detail on

its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the

current and certain prior-year periods based upon the number of core

hotels in the portfolio as of the end of the current period. As Ashford’s

portfolio mix changes from time to time so will the seasonality for

Proforma Hotel EBITDA and Proforma Hotel EBITDA margin. The details of

the quarterly calculations for the previous four quarters for the

current portfolio of 105 hotels included in continuing operations are

provided in the tables attached to this release.

Monty J. Bennett, President and CEO, commented, “We are pleased with the

performance of our portfolio in this challenging market. Despite the

hotel industry decelerating RevPAR trends, we were able to generate a

2.0% increase in RevPAR and a 4.8% increase in EBITDA, while improving

our EBITDA margin by 95 basis points for the 97 hotels not under

renovation. Our strategy to enhance cash flow with property and

enterprise-level contingency plans and aggressive management of fixed

costs should help us navigate what is expected to be a difficult second

half of the year in the lodging industry.”

CAPITAL STRUCTURE

On June 25, 2008, the Company refinanced its sole debt maturity in 2008,

a $73.1 million loan with MetLife that was secured by interests in the

Hilton Tucson El Conquistador Golf Resort in Tucson, Arizona, and the

Hilton Dallas Lincoln Centre in Dallas. The new $53.4 million interest

only loan, which can be prepaid without penalty, has an interest rate of

200 basis points over LIBOR and matures in July 2011. The loan was

subsequently paid down by $33.7 million in conjunction with the sale of

the Hilton Dallas Lincoln Centre.

On August 6, 2008, the Company refinanced its major debt maturity in

2009, a loan with Prudential that was secured by interests in the

Capital Hilton and the Hilton Torrey Pines. These two assets are owned

in a joint venture between Ashford and Hilton. The gross principal

outstanding was $127.2 million, with Ashford’s

share being $95.4 million. The new $160.0 million loan has an interest

rate of 275 basis points over LIBOR and is for a three year term with

two one-year extension options. The excess proceeds will be used to fund

future renovations of the two hotels. The company’s

only remaining debt maturity for 2009 is a $30M loan secured by the

Hyatt Dearborn.

At June 30, 2008, the Company’s net debt (defined as total debt less

unrestricted cash) to total gross assets (defined as un-depreciated

investment in hotel property plus notes receivable) was 58.7%. The

Company’s $2.5 billion debt balance as of June

30, 2008, consisted of 91% of floating-rate debt, with a total weighted

average interest rate of 4.99%. The Company’s

weighted average debt maturity including extension options is 6.6 years.

The Company currently has no debt maturing in 2008, $30 million maturing

in 2009 and $75 million maturing in 2010.

SECOND QUARTER INVESTMENT ACTIVITY

On June 9, 2008, the Company sold the Hyatt Dulles Airport in Herndon,

Virginia, for $78 million and on June 17, 2008 the Hyatt Regency

Montreal in Montreal, Quebec for $57.5 million. On June 26, 2008, the

Company closed on the sale of the Hilton Dallas Lincoln Centre in Dallas

for $72.25 million. Combined, the three transactions represented a sales

price of $146,000 per key, a 6.8% trailing 12-month NOI cap rate, and a

11.7x trailing 12-month EBITDA multiple.

SUBSEQUENT INVESTMENT ACTIVITY

On July 14, 2008, the Company acquired a mezzanine loan participation

secured by interests in 681 extended-stay hotels purchased by affiliates

of Lightstone Group and Arbor Realty Trust. The loan participation,

which is part of a $400 million mezzanine loan tranche, was acquired for

$98.4 million and had a face value of $164 million and an interest rate

of 250 basis points over LIBOR at par. Ashford’s

investment is priced to yield approximately 23.9% based upon the

purchase price discount to par and the forward LIBOR curve through the

final maturity of the loan (initial maturity in June 2009 and all three

one-year extension options). The loan can be prepaid at anytime.

Financing on the portfolio includes $6 billion in first mortgage and

mezzanine financing senior to the $400 million tranche in which Ashford

is participating, $1 billion in mezzanine financing junior to Ashford’s

position, and $600 million in equity, which is also junior to Ashford’s

position. Based on trailing 12-month net cash flow from the portfolio,

the debt service coverage ratio at closing through Ashford’s

position is approximately 1.63x, and Ashford’s

investment in the capital structure is approximately 75% to 80% loan to

cost, or $82,142 per key.

On July 23, 2008, the Company sold two other assets: the Radisson Hotel

in Rockland, Massachusetts, and the Sheraton Milford in Milford,

Massachusetts, for a combined $20.9 million that equates to $70,000 per

key and a 5.1% trailing 12 month cap rate, and a 17.5x trailing 12-month

EBITDA multiple.

Mr. Bennett concluded, “The execution of our

capital allocation strategy has hit the mark in the first half of the

year with $310 million of asset sales completed. The proceeds have given

us the flexibility to enhance our growth through mezzanine lending, debt

paydowns, capital expenditures or share repurchases. We have already

refinanced our sole debt maturity for 2008 and are in good shape to

address our 2009 maturities in the very near future. With the diversity

of options available to us from our capital recycling alternatives, we

see several ways to enhance shareholder value in the near term.”

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Trust, Inc. will conduct a conference call on

Thursday, August 7, 2008, at 11:00 a.m. ET. The number to call for this

interactive teleconference is (303) 262-2142. A replay of the conference

call will be available through August 15, 2008, by dialing

(303) 590-3000 and entering the confirmation number, 11111806#.

The Company will also provide an online simulcast and rebroadcast of its

second quarter 2008 earnings release conference call. The live broadcast

of Ashford’s quarterly conference call will be available online at the

Company’s website at www.ahtreit.com

on Thursday, August 7, 2008, beginning at 11:00 a.m. ET. The online

replay will follow shortly after the call and continue for approximately

one year. A direct link to the live broadcast can be found at: http://www.videonewswire.com/event.asp?id=49196.

Substantially all of our non-current assets consist of real estate

investments and debt investments secured by real estate. Historical cost

accounting for real estate assets implicitly assumes that the value of

real estate assets diminishes predictably over time. Since real estate

values instead have historically risen or fallen with market conditions,

most industry investors consider supplemental measures of performance,

which are not measures of operating performance under GAAP, to assist in

evaluating a real estate company’s operations. These supplemental

measures include FFO, AFFO, EBITDA, Hotel Operating Profit, and CAD. FFO

is computed in accordance with our interpretation of standards

established by NAREIT, which may not be comparable to FFO reported by

other REITs that do not define the term in accordance with the current

NAREIT definition or that interpret the NAREIT definition differently

than us. Neither FFO, AFFO, EBITDA, Hotel Operating Profit, nor CAD

represents cash generated from operating activities as determined by

GAAP and should not be considered as an alternative to a) GAAP net

income (loss) as an indication of our financial performance or b) GAAP

cash flows from operating activities as a measure of our liquidity, nor

are such measures indicative of funds available to satisfy our cash

needs, including our ability to make cash distributions. However,

management believes FFO, AFFO, EBITDA, Hotel Operating Profit, and CAD

to be meaningful measures of a REIT’s performance and should be

considered along with, but not as an alternative to, net income and cash

flow as a measure of our operating performance.

Ashford Hospitality Trust is a self-administered real estate investment

trust focused on investing in the hospitality industry across all

segments and at all levels of the capital structure, including direct

hotel investments, second mortgages, mezzanine loans and sale-leaseback

transactions. Additional information can be found on the Company’s web

site at www.ahtreit.com.

Certain statements and assumptions in this press release contain or

are based upon “forward-looking” information and are being made pursuant

to the safe harbor provisions of the Private Securities Litigation

Reform Act of 1995. These forward-looking statements are subject

to risks and uncertainties. When we use the words “will likely

result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “believe,”

“intend,” or similar expressions, we intend to identify forward-looking

statements. Such forward-looking statements include, but are not

limited to, the timing for closing, the impact of the transaction on our

business and future financial condition, our business and investment

strategy, our understanding of our competition and current market trends

and opportunities and projected capital expenditures. Such

statements are subject to numerous assumptions and uncertainties, many

of which are outside Ashford’s control.

These forward-looking statements are subject to known and unknown

risks and uncertainties, which could cause actual results to differ

materially from those anticipated, including, without limitation: general

volatility of the capital markets and the market price of our common

stock; changes in our business or investment strategy; availability,

terms and deployment of capital; availability of qualified personnel;

changes in our industry and the market in which we operate, interest

rates or the general economy; and the degree and nature of our

competition. These and other risk factors are more fully

discussed in Ashford’s filings with the Securities and Exchange

Commission. EBITDA is defined as net income before interest,

taxes, depreciation and amortization. EBITDA yield is defined as

trailing twelve month EBITDA divided by the purchase price. A

capitalization rate is determined by dividing the property’s annual net

operating income by the purchase price. Net operating income is

the property’s funds from operations minus a capital expense reserve of

either 4% or 5% of gross revenues. Funds from operations (“FFO”),

as defined by the White Paper on FFO approved by the Board of Governors

of the National Association of Real Estate Investment Trusts (“NAREIT”)

in April 2002, represents net income (loss) computed in accordance with

generally accepted accounting principles (“GAAP”), excluding gains (or

losses) from sales or properties and extraordinary items as defined by

GAAP, plus depreciation and amortization of real estate assets, and net

of adjustments for the portion of these items related to unconsolidated

entities and joint ventures.

The forward-looking statements included in this press release are

only made as of the date of this press release. Investors should

not place undue reliance on these forward-looking statements. We

are not obligated to publicly update or revise any forward-looking

statements, whether as a result of new information, future events or

circumstances, changes in expectations or otherwise.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
		June 30,				December 31,
		2008				2007
		(Unaudited)
ASSETS
Investment in hotel properties, net		$	3,688,913			$	3,885,737
Cash and cash equivalents			112,524				92,271
Restricted cash			50,733				52,872
Accounts receivable, net			62,475				51,314
Inventories			3,943				4,100
Assets held for sale			11,908				75,739
Notes receivable			113,030				94,225
Investment in unconsolidated joint venture			24,917				–
Deferred costs, net			22,507				25,714
Prepaid expenses			16,601				20,223
Other assets			8,692				6,027
Intangible assets, net			3,122				13,889
Due from third-party hotel managers			51,030				58,300
Total assets		$	4,170,395			$	4,380,411
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Indebtedness – continuing operations		$	2,540,906			$	2,639,546
Indebtedness – discontinued operations			11,134				61,229
Capital leases payable			291				498
Accounts payable and accrued expenses			106,354				124,696
Dividends payable			35,178				35,031
Unfavorable management contract liabilities			22,267				23,396
Due to related parties			793				2,732
Due to third-party hotel managers			8,324				4,699
Interest rate derivatives			47,299				–
Other liabilities			8,287				8,514
Total liabilities			2,780,833				2,900,341
Minority interests in consolidated joint ventures			21,809				19,036
Minority interests in operating partnership			93,985				101,031
Series B Cumulative Convertible Redeemable Preferred stock, 7,447,865 issued and outstanding			75,000				75,000
Shareholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
Series A Cumulative Preferred Stock, 2,300,000 shares issued and outstanding			23				23
Series D Cumulative Preferred Stock, 8,000,000 shares issued and outstanding			80				80
Common stock, $0.01 par value, 200,000,000 shares authorized, 122,754,192 shares issued and 119,739,972 shares outstanding at June 30, 2008 and 122,765,691 shares issued and 120,376,055 shares outstanding at December 31, 2007			1,228				1,228
Additional paid-in capital			1,458,262				1,455,917
Accumulated other comprehensive loss			(149	)			(115	)
Accumulated deficit			(238,307	)			(153,664	)
Treasury stock, at cost (3,014,220 shares at June 30, 2008 and 2,389,636 shares at December 31, 2007)			(22,369	)			(18,466	)
Total shareholders’ equity			1,198,768				1,285,003
Total liabilities and owners’ equity		$	4,170,395			$	4,380,411

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2008				2007				2008				2007
		(Unaudited)
REVENUE
Rooms		$	231,296			$	213,034			$	448,165			$	321,818
Food and beverage			67,305				63,585				131,706				93,111
Rental income from operating leases			1,526				1,184				2,872				1,184
Other			14,094				13,324	Ashford Hospitality Trust, Inc. David Kimichik, Chief Financial Officer, 972-490-9600 or Corporate Communications, Inc. Tripp Sullivan, 615-254-3376 Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89 Get Unlimited Organic Website Traffic to your Website  TheNFG.com now offers Organic Lead Generation & Traffic Solutions