ASHFORD HOSPITALITY TRUST INC - FORM 8-K - EX-99.1 - FOURTH QUARTER 2011 EARNINGS PRESS RELEASE OF THE COMPANY

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8-K - FORM 8-K - ASHFORD HOSPITALITY TRUST INC	d304120d8k.htm

Exhibit 99.1


		NEWS RELEASE


Contact:	David Kimichik	Andrea Welch	Scott Eckstein
	Chief Financial Officer	Investor Relations	Financial Relations Board
	(972) 490-9600	(972) 778-9487	(212) 827-3766

ASHFORD HOSPITALITY TRUST REPORTS

FOURTH QUARTER AND YEAR END RESULTS

8^th Consecutive Quarterly Year Over Year Increase In AFFO Per Share

Record Fourth Quarter AFFO Per Share

Record Full Year AFFO Per Share

DALLAS, February 22, 2012—Ashford Hospitality Trust, Inc. (NYSE: AHT) today reported the following results and performance measures for the fourth quarter ended December 31, 2011. The performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) are proforma. Unless otherwise stated, all reported results compare the fourth quarter ended December 31, 2011, with the fourth quarter ended December 31, 2010 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL HIGHLIGHTS

•

Adjusted funds from operations (AFFO) was $0.42 per diluted share for the quarter, the Company’s 8^th consecutive quarterly year over year increase and a record for the fourth quarter

•

Adjusted funds from operations (AFFO) was a record $1.86 per diluted share for the entire year

•

RevPAR increased 5.4% for all Legacy hotels in continuing operations, driven by a 3.5% increase in ADR and a 122 basis point increase in occupancy

•

RevPAR increased 3.3% for the 25 hotels in the Highland Hospitality Portfolio not under renovation in continuing operations, driven by a 2.4% increase in ADR and a 58 basis point increase in occupancy

•

Hotel operating profit margin increased 143 basis points for all Legacy hotels in continuing operations

•

Hotel operating profit margin increased 177 basis points for the 25 hotels in the Highland Hospitality Portfolio not under renovation in continuing operations

•

Net loss attributable to common shareholders was $18.3 million, or $0.28 per diluted share, compared with net loss attributable to common shareholders of $111.5 million, or $2.17 per diluted share, in the prior-year quarter

•

Fixed charge coverage ratio was 1.70x under the senior credit facility covenant versus a required minimum of 1.35x

•

In December, Ashford successfully restructured its $203.4 million mortgage loan and extended the maturity date from December 2011 to March 2014 with a one-year extension option

•

The Company’s only recourse obligation is its $105 million senior credit facility, which currently has no outstanding balance

•

At the end of the fourth quarter, Ashford had cash and cash equivalents of $167.6 million

•

In December, the Board of Directors approved a 10% increase in the Company’s dividend policy for 2012; Ashford expects to pay a quarterly dividend of $0.11 per share for 2012

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AHT Reports Fourth Quarter Results

Page 2

February 22, 2012

CAPITAL ALLOCATION

•

Capex invested in the quarter for the Legacy portfolio was $21.9 million and $67.8 million for the full-year

•

Capex invested in the quarter for the Highland Hospitality Portfolio was $6.1 million and $13.6 million for the full-year

CAPITAL STRUCTURE

As previously disclosed, on October 12, 2011 the Company priced an underwritten public offering of 1,280,000 shares of its existing 9.00% Series E Cumulative Preferred Stock at $23.47 per share including accrued dividends; receiving net proceeds of $28.9 million after underwriting fees. The net proceeds from the sale of these securities are being used for general corporate purposes, including, without limitation, repayment of debt or other maturing obligations, financing future hotel-related investments, capital expenditures and working capital. Net proceeds may also be used for repurchasing shares of common stock under Ashford’s repurchase program.

On December 12, 2011, Ashford announced it had successfully restructured its $203.4 million mortgage loan and extended the maturity date from December 2011 to March 2014. There is also a one-year extension option subject to the satisfaction of certain conditions. The restructuring provides for a new interest rate of LIBOR + 4.50%, with no LIBOR Floor. At the closing of the restructuring, the Company paid down the loan by $25 million to $178.4 million. Additionally, terms include that 85% of excess cash flow after debt service, working capital, and approved capital expenditures will be used to pay down the debt balance and thereby further deleverage the portfolio.

Ashford has successfully addressed debt maturities and is well positioned regarding the next few years. The Company is engaged in negotiations with the existing lenders to restructure and extend the $167.2 million non-recourse portfolio mortgage loan that matures in May 2012. On a parallel path, the Company is also in discussion with third party lenders to refinance this loan. There appears to be a high likelihood of a viable restructure or refinance under current market conditions given the level of existing cash held in reserve for a possible debt pay down for this loan.

The Company previously announced entering into a new $105 million revolving credit facility for three years that replaced the Company’s pre-existing credit line that was scheduled to mature in April 2012. The facility is currently undrawn. All other Company debt is non-recourse.

HIGHLAND HOSPITALITY PORTFOLIO UPDATE

The Highland Hospitality portfolio experienced RevPAR growth of 2.6% during the fourth quarter of 2011, with RevPAR growth for hotels not under renovation in continuing operations of 3.3%. This performance was negatively impacted by property manager changes at the Hyatt Regency Windwatch and the Hilton Boston Back Bay. While this created a short-term revenue disruption during the fourth quarter, these initiatives were part of the continuing integration of the Highland Hospitality Portfolio into the Company’s total portfolio and are expected to create long-term value through enhanced productivity and cost savings, as well as higher exit value given removal of brand management encumbrances.

The Company expects both the revenue and EBITDA performance of the Highland Hospitality Portfolio to continue to improve as the hotels in the Portfolio continue to be fully integrated into Ashford’s total portfolio.

PORTFOLIO REVPAR

As of December 31, 2011, the Company’s Legacy portfolio consisted of direct hotel investments with 96 properties classified in continuing operations. During the fourth quarter, 63 of the hotels included in continuing operations were not under renovation. The Company believes reporting its operating metrics

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AHT Reports Fourth Quarter Results

Page 3

February 22, 2012

for continuing operations on a proforma total basis (all 96 hotels) and proforma not-under-renovation basis (63 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 96 hotels in continuing operations. Details of each category are provided in the tables attached to this release.

•

Proforma RevPAR increased 5.4% to $86.66 for all hotels in the Legacy portfolio on a 3.5% increase in ADR and a 122 basis point increase in occupancy

•

Proforma RevPAR increased 4.6% to $83.03 for hotels not under renovation in the Legacy portfolio on a 2.1% increase in ADR and a 161 basis point increase in occupancy

•

Proforma RevPAR increased 3.3% to $91.82 for hotels not under renovation in the Highland Hospitality Portfolio on a 2.4% increase in ADR and a 58 basis point increase in occupancy

•

Proforma RevPAR increased 2.6% to $91.11 for all hotels in the Highland Hospitality Portfolio on a 2.4% increase in ADR and an 11 basis point increase in occupancy

Through December 1, 2011, one hotel property held by a joint venture in which Ashford had an ownership interest of 89% was leased on a triple-net lease basis to a third-party tenant who operated the hotel property. Effective December 2, 2011, Ashford converted its 89% interest in a triple-net lease to a 100% ownership position and the triple-net lease was converted to a long-term management contract at no cost to the Company. The Company recognized a gain of $9.7 million for this transaction, consisting of the assignments of an $8.1 million note receivable and $1.6 million security deposits, which is included in “Other income” in the consolidated statements of operations.

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

Hotel operating profit (Hotel EBITDA) for all Legacy hotels increased 11.0%, for the quarter. For the 63 hotels that were not under renovation, Proforma Hotel EBITDA increased 10.4% to $39.8 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 127 basis points to 28.1%. For all 96 Legacy hotels included in continuing operations as of December 31, 2011, Proforma Hotel EBITDA increased 11.0% to $67.1 million and Hotel EBITDA margin increased 143 basis points to 28.3%. For the Company’s 71.74% share of the 25 hotels in the Highland Hospitality Portfolio that were not under renovation, Proforma Hotel EBITDA increased 10.0% to $17.7 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 177 basis points to 25.5%. For all 28 hotels in the Highland Hospitality Portfolio, Proforma Hotel EBITDA increased 6.4% to $19.0 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) increased 114 basis points to 25.4%.

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 its 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 96 Legacy 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.

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AHT Reports Fourth Quarter Results

Page 4

February 22, 2012

COMMON STOCK DIVIDEND

On December 15, 2011, Ashford announced that its Board of Directors had declared a common stock dividend for the fourth quarter ended December 31, 2011, of $0.10 per diluted share, payable January 16, 2012, for shareholders of record on December 31, 2011.

The Board also approved the Company’s dividend policy for 2012. The Company expects to pay a quarterly cash dividend of $0.11 per common share for 2012, or $0.44 per common share on an annualized basis. While this policy results in ample dividend coverage on a historical basis, the Company believes a more conservative approach is prudent during this time of global economic uncertainty. The adoption of a dividend policy does not commit the Board of Directors to declare future dividends or the amount thereof. The Board will continue to review its dividend policy on a quarter-to-quarter basis.

Monty J. Bennett, Chief Executive Officer, commented, “This was a record quarter and year for Ashford in several respects. It represents seven out of eight years of record AFFO per share performance, including our eighth consecutive quarterly year over year AFFO per share increase and another record fourth quarter of AFFO per share. We believe significant upside exists given the early stages of the economic recovery, improving macroeconomic fundamentals and the lack of new supply over the next few years. Further, we continue to maintain a conservative approach to capital and liquidity so that we are prepared for economic uncertainties, while positioning ourselves to take advantage of opportunistic investments as they arise. Our strategic approach has served us well during this economic environment, but our focus on improved operating performance and maximizing shareholder returns remains a constant.”

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Trust, Inc. will conduct a conference call on Thursday February 23, 2012, at 11 a.m. ET. The number to call for this interactive teleconference is (480) 629-9722. A replay of the conference call will be available through Thursday, March 1, 2012, by dialing (303) 590-3030 and entering the confirmation number, 4508934.

The Company will also provide an online simulcast and rebroadcast of its fourth quarter 2011 earnings release conference call. The live broadcast of Ashford Hospitality Trust’s quarterly conference call will be available online at the Company’s web site, www.ahtreit.com on Thursday February 23, 2012, 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.

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AHT Reports Fourth Quarter Results

Page 5

February 22, 2012

* * * * *

Ashford 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. 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.

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	December 31,
	2011			2010
	(Unaudited)
ASSETS
Investment in hotel properties, net	$	2,957,899		$	3,023,736
Cash and cash equivalents		167,609			217,690
Restricted cash		84,069			67,666
Accounts receivable, net		28,623			27,493
Inventories		2,371			2,909
Notes receivable		11,199			20,870
Investment in unconsolidated joint ventures		179,527			15,000
Assets held for sale		—			144,511
Investments in securities and other		21,374			—
Deferred costs, net		17,421			17,519
Prepaid expenses		11,308			12,727
Derivative assets		37,918			106,867
Other assets		4,851			7,502
Intangible assets, net		2,810			2,899
Due from third-party hotel managers		62,747			49,135

Total assets	$	3,589,726		$	3,716,524

LIABILITIES AND EQUITY
Liabilities
Indebtedness of continuing operations	$	2,362,458		$	2,518,164
Indebtedness of assets held for sale		—			50,619
Capital leases payable		—			36
Accounts payable and accrued expenses		82,282			79,248
Dividends payable		16,941			7,281
Unfavorable management contract liabilities		13,611			16,058
Due to related parties		2,569			2,400
Due to third-party hotel managers		1,602			1,870
Liabilities associated with investments in securities and other		2,246			—
Other liabilities		5,400			4,627
Other liabilities of assets held for sale		—			2,995

Total liabilities		2,487,109			2,683,298

Series B-1 Cumulative Convertible Redeemable Preferred stock, 7,247,865 shares issued and outstanding at December 31, 2010		—			72,986
Redeemable noncontrolling interests in operating partnership		112,796			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		15			15
Series D Cumulative Preferred Stock, 8,966,797 shares issued and outstanding		90			90
Series E Cumulative Preferred Stock, 4,630,000 shares issued and outstanding at December 31, 2011		46			—
Common stock, $0.01 par value, 200,000,000 shares authorized, 124,896,765 shares and 123,403,893 shares issued, respectively, 68,032,289 and 58,999,324 shares outstanding, respectively		1,249			1,234
Additional paid-in capital		1,746,259			1,552,657
Accumulated other comprehensive loss		(184	)		(550	)
Accumulated deficit		(609,272	)		(543,788	)
Treasury stock, at cost (56,864,476 shares and 64,404,569 shares, respectively)		(164,796	)		(192,850	)

Total shareholders’ equity of the Company		973,407			816,808
Noncontrolling interests in consolidated joint ventures		16,414			16,710

Total equity		989,821			833,518

Total liabilities and equity	$	3,589,726		$	3,716,524

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
REVENUE
Rooms	$	176,634		$	166,100		$	685,568		$	640,989
Food and beverage		45,123			42,187			158,258			151,105
Rental income from operating leases		1,333			1,708			5,341			5,436
Other		10,086			9,848			40,268			39,291

Total hotel revenue		233,176			219,843			889,435			836,821
Interest income from notes receivable		—			346			—			1,378
Asset management fees and other		145			113			362			425

Total Revenue		233,321			220,302			889,797			838,624

EXPENSES
Hotel operating expenses
Rooms		42,531			39,721			158,645			148,308
Food and beverage		30,204			28,474			108,961			105,229
Other direct		5,792			5,845			23,367			23,576
Indirect		68,588			64,680			253,766			242,623
Management fees		9,631			9,468			36,140			34,909

Total hotel operating expenses		156,746			148,188			580,879			554,645
Property taxes, insurance, and other		11,805			11,701			46,758			49,389
Depreciation and amortization		34,302			32,875			133,882			132,651
Impairment charges		(93	)		47,667			(4,841	)		46,404
Gain on insurance settlement		(130	)		—			(2,035	)		—
Transaction acquisition and contract termination costs		(2	)		7,001			(793	)		7,001
Corporate general and administrative:
Stock/unit-based compensation		3,963			1,899			12,391			7,067
Other general and administrative		6,577			6,039			32,131			23,552

Total Operating Expenses		213,168			255,370			798,372			820,709

OPERATING INCOME (LOSS)		20,153			(35,068	)		91,425			17,915
Equity in earnings (loss) of unconsolidated joint ventures		(5,068	)		(21,590	)		14,528			(20,265	)
Interest income		15			57			85			283
Other income		26,015			15,781			109,524			62,826
Interest expense		(33,515	)		(33,906	)		(133,922	)		(135,685	)
Amortization of loan costs		(1,116	)		(1,079	)		(4,625	)		(4,924	)
Write-off of premiums, loan costs and exit fees		—			(3,893	)		(729	)		(3,893	)
Unrealized loss on investments		(1,614	)		—			(391	)		—
Unrealized gain (loss) on derivatives		(17,473	)		(18,540	)		(70,286	)		12,284

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(12,603	)		(98,238	)		5,609			(71,459	)
Income tax (expense) benefit		787			591			(1,620	)		155

INCOME (LOSS) FROM CONTINUING OPERATIONS		(11,816	)		(97,647	)		3,989			(71,304	)
Income (loss) from discontinued operations		63			(24,538	)		(4,106	)		9,512

NET LOSS		(11,753	)		(122,185	)		(117	)		(61,792	)
(Income) loss from consolidated joint ventures attributable to noncontrolling interests		(73	)		262			(610	)		1,683
Net loss attributable to redeemable noncontrolling interests in operating partnership		1,629			16,979			2,836			8,369

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY		(10,197	)		(104,944	)		2,109			(51,740	)
Preferred dividends		(8,135	)		(6,545	)		(46,876	)		(21,194	)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(18,332	)	$	(111,489	)	$	(44,767	)	$	(72,934	)

INCOME (LOSS) PER SHARE – BASIC AND DILUTED:
Loss from continuing operations attributable to common shareholders	$	(0.28	)	$	(1.76	)	$	(0.66	)	$	(1.59	)
Income (loss) from discontinued operations attributable to common shareholders		—			(0.41	)		(0.07	)		0.16

Net loss attributable to common shareholders	$	(0.28	)	$	(2.17	)	$	(0.73	)	$	(1.43	)

Weighted average common shares outstanding – basic and diluted		67,132			51,407			61,954			51,159

Amounts attributable to common shareholders:
Income (loss) from continuing operations, net of tax	$	(10,253	)	$	(83,725	)	$	6,609		$	(60,158	)
Income (loss) from discontinued operations, net of tax		56			(21,219	)		(4,500	)		8,418
Preferred dividends		(8,135	)		(6,545	)		(46,876	)		(21,194	)

Net loss attributable to common shareholders	$	(18,332	)	$	(111,489	)	$	(44,767	)	$	(72,934	)

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

RECONCILIATION OF NET LOSS TO EBITDA

(in thousands)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2011			2010			2011			2010
Net loss	$	(11,753	)	$	(122,185	)	$	(117	)	$	(61,792	)
(Income) loss from consolidated joint ventures attributable to noncontrolling interests		(73	)		262			(610	)		1,683
Net loss attributable to redeemable noncontrolling interests in operating partnership		1,629			16,979			2,836			8,369

Net income (loss) attributable to the Company		(10,197	)		(104,944	)		2,109			(51,740	)
Interest income		(14	)		(57	)		(84	)		(273	)
Interest expense and amortization of loan costs		34,233			35,819			137,466			147,233
Depreciation and amortization		33,485			34,706			130,995			141,547
Income tax expense		(787	)		(649	)		1,705			(132	)
Impairment charges		(93	)		71,249			1,395			82,055
Net loss attributable to redeemable noncontrolling interests in operating partnership		(1,629	)		(16,979	)		(2,836	)		(8,369	)
Equity in (earnings) loss of unconsolidated joint ventures		5,068			21,590			(14,528	)		20,265
Company’s portion of EBITDA of unconsolidated joint ventures		18,622			—			104,807			1,325

EBITDA		78,688			40,735			361,029			331,911
Amortization of unfavorable management contract liabilities		(753	)		(753	)		(2,447	)		(2,447	)
Gain on sale/disposition of properties		(5	)		—			(2,655	)		(55,931	)
Non-cash gain on insurance settlements		(130	)		—			(1,287	)		—
Write-off of premiums, loan costs and exit fees		—			3,893			1,677			3,893
Other income (1)		(26,015	)		(15,786	)		(109,524	)		(62,906	)
Transaction acquisition and contract termination costs		(2	)		7,001			(793	)		7,001
Legal costs related to litigation settlement (2)		—			—			6,875			—
Debt restructuring costs		823			—			823			—
Unrealized loss on investments		1,614			—			391			—
Unrealized (gain) loss on derivatives		17,473			18,540			70,286			(12,284	)
Company’s portion of adjustments to EBITDA of unconsolidated joint ventures		(683	)		—			(42,248	)		—

Adjusted EBITDA	$	71,010		$	53,630		$	282,127		$	209,237

RECONCILIATION OF NET LOSS TO FUNDS FROM OPERATIONS (“FFO”)

(in thousands, except per share amounts)


	Three Months Ended						Year Ended
	December 31,						December 31,
	2011			2010			2011			2010
Net loss	$	(11,753	)	$	(122,185	)	$	(117	)	$	(61,792	)
(Income) loss from consolidated joint ventures attributable to noncontrolling interests		(73	)		262			(610	)		1,683
Net loss attributable to redeemable noncontrolling interests in operating partnership		1,629			16,979			2,836			8,369
Preferred dividends		(8,135	)		(6,545	)		(46,876	)		(21,194	)

Net loss attributable to common shareholders		(18,332	)		(111,489	)		(44,767	)		(72,934	)
Depreciation and amortization on real estate		33,419			34,642			130,741			141,285
Gain on sale/disposition of properties		(5	)		—			(2,655	)		(55,931	)
Non-cash gain on insurance settlements		(130	)		—			(1,287	)		—
Impairment charges		(93	)		71,249			1,395			82,055
Net loss attributable to redeemable noncontrolling interests in operating partnership		(1,629	)		(16,979	)		(2,836	)		(8,369	)
Equity in (earnings) loss of unconsolidated joint ventures		5,068			21,590			(14,528	)		20,265
Company’s portion of FFO of unconsolidated joint ventures		4,671			—			8,125			1,325

FFO available to common shareholders		22,969			(987	)		74,188			107,696
Dividends on convertible preferred stock		—			1,015			1,374			4,143
Write-off of premiums, loan costs and exit fees		—			3,893			1,677			3,893
Transaction acquisition and contract termination costs		(2	)		7,001			(793	)		7,001
Other income (1)		(9,515	)		—			(38,663	)		—
Legal costs related to litigation settlement (2)		—			—			6,875			—
Debt restructuring costs		823			—			823			—
Unrealized loss on investments		1,614			—			391			—
Unrealized (gain) loss on derivatives		17,473			18,540			70,286			(12,284	)
Non-cash dividends on Series B-1 preferred stock (3)		—			—			17,363			—
Company’s portion of adjustments to FFO of unconsolidated joint ventures		1,568			—			16,682			—

Adjusted FFO available to common shareholders	$	34,930		$	29,462		$	150,203		$	110,449

Adjusted FFO per diluted share available to common shareholders	$	0.42		$	0.40		$	1.86		$	1.50

Weighted average diluted shares		83,850			73,956			80,597			73,833

(1)

Other income related to income from interest rate derivatives is excluded from the Adjusted EBITDA for all periods presented. In addition, the gain from litigation settlement, the net investment loss on investments in securities and other, the premiums and fees associated with credit default swaps, and other income recognized on the acquisition of 11% of noncontrolling interest in a consolidated joint venture are also excluded from Adjusted EBITDA for 2011.

For 2011, the gain from litigation settlement, the net investment loss, the premiums and fees associated with credit default swaps, and other income recognized on the acquisition of 11% of noncontrolling interest in a consolidated joint venture are excluded for Adjusted FFO calculation.

(2)	The legal costs associated with the litigation settlement are also excluded from Adjusted EBITDA and Adjusted FFO for the year ended December 31, 2011.

(3)	Represents the conversion of 1.4 million shares of the Series B-1 preferred stock to shares of our common stock that was treated as a dividend in accordance with applicable accounting guidance.

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

SUMMARY OF INDEBTEDNESS OF CONTINUING OPERATIONS

DECEMBER 31, 2011

(dollars in thousands)

(Unaudited)


				Fixed-Rate			Floating-Rate			Total
Indebtedness	Collateral	Maturity	Interest Rate	Debt			Debt			Debt
Mortgage loan	10 hotels	May 2012	LIBOR + 1.65%	$	—		$	167,202			167,202
Mortgage loan	2 hotels	August 2013	LIBOR + 2.75%		—			145,667			145,667
Mortgage loan	5 hotels	March 2014	LIBOR + 4.50%		—			178,400	⁽¹⁾		178,400
Mortgage loan	1 hotel	May 2014	8.32%		5,476			—			5,476
Senior credit facility	Various	September 2014	LIBOR + 2.75% to 3.5%		—			—			—
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%		106,863			—			106,863
Mortgage loan	10 hotels	July 2015	5.22%		155,831			—			155,831
Mortgage loan	8 hotels	December 2015	5.70%		98,786			—			98,786
Mortgage loan	5 hotels	December 2015	12.72%		151,185			—			151,185
Mortgage loan	5 hotels	February 2016	5.53%		112,453			—			112,453
Mortgage loan	5 hotels	February 2016	5.53%		93,257			—			93,257
Mortgage loan	5 hotels	February 2016	5.53%		80,782			—			80,782
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%		103,759			—			103,759
Mortgage loan	1 hotel	April 2034	Greater of 6% or Prime + 1%		—			6,651			6,651

Total indebtedness				$	1,844,798		$	517,660		$	2,362,458

Percentage					78.1	%		21.9	%		100.0	%

Weighted average interest rate at December 31, 2011					6.41	%		3.43	%		5.75	%

Total indebtedness with effect of interest rate swaps				$	2,344,233		$	18,225			2,362,458

Percentage with the effect of interest rate swaps					99.2	%		0.8	%		100.0	%

Weighted average interest rate with the effect of interest rate swaps					2.59	%⁽²⁾		3.41	%⁽²⁾		2.77	%

⁽¹⁾	This mortgage loan has a one-year extension option beginning March 2014, subject to satisfaction of certain conditions.

⁽²⁾	These rates are calculated assuming the LIBOR rate stays at the December 31, 2011 level and with the effect of our interest rate derivatives.

PIM HIGHLAND HOLDING LLC

SUMMARY OF INDEBTEDNESS

DECEMBER 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%	$	64,268		$	—		$	64,268
Mortgage loan	1 hotel	April 2013	6.11%		46,023						46,023
Mortgage loan	1 hotel	February 2013	5.97%		32,651						32,651
Mortgage loan	25 hotels	March 2014	LIBOR + 2.75%		—			530,000	⁽¹⁾		530,000
Mezzanine loan	28 hotels	March 2014	Greater of 6.50% or LIBOR + 6.00%		—			144,594	⁽¹⁾		144,594
Mezzanine loan	28 hotels	March 2014	Greater of 7.5% or LIBOR + 7.00%		—			137,650	⁽¹⁾		137,650
Mezzanine loan	28 hotels	March 2014	Greater of 10.00% or LIBOR + 9.50%		—			117,986	⁽¹⁾		117,986
Mezzanine loan	28 hotels	March 2014	LIBOR + 2.00%					18,425	⁽¹⁾		18,425

Total indebtedness					142,942			948,655			1,091,597
Ashford’s proportionate obligations					x71.74	%		x71.74	%		x71.74	%

				$	102,547		$	680,565		$	783,112

Percentage					13.1	%		86.9	%		100.0	%

Weighted average interest rate at December 31, 2011					6.01	%		5.07	%		5.19	%

Percentage with the effect of interest rate swaps					100.0	%		0.0	%		100.0	%

Total indebtedness of Ashford plus Ashford's 71.74% share of PIM Highland Holding LLC				$	1,947,345		$	1,198,225		$	3,145,570

Percentage with the effect of interest rate swaps					99.4	%		0.6	%		100.0	%

Weighted average interest rate with the effect of interest rate swaps					2.77	%		4.37	%		3.38	%

⁽¹⁾	Each of these loans has two one-year extension options beginning March 2014.

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES

INDEBTEDNESS BY MATURITY ASSUMING EXTENSION OPTIONS ARE EXERCISED

DECEMBER 31, 2011

(in thousands)

(Unaudited)


	2012		2013		2014		2015		2016		Thereafter		Total
Mortgage loan secured by 10 hotel properties, Wachovia Floater	$	167,202	$	—	$	—	$	—	$	—	$	—	$	167,202
Mortgage loan secured by two hotel properties		—		145,667		—		—		—		—		145,667
Mortgage loan secured by five hotel properties						—		178,400		—		—		178,400
Mortgage loan secured by Manchester Courtyard		—		—		5,476		—		—		—		5,476
Senior credit facility		—		—		—		—		—		—		—
Mortgage loan secured by El Conquistador Hilton		—		—		19,740		—		—		—		19,740
Mortgage loan secured by eight hotel properties, UBS Pool 1		—		—		106,863		—		—		—		106,863
Mortgage loan secured by 10 hotel properties, Merrill Lynch Pool 1		—		—		—		155,831		—		—		155,831
Mortgage loan secured by eight hotel properties, UBS Pool 2		—		—		—		98,786		—		—		98,786
Mortgage loan secured by five hotel properties		—		—		—		151,185		—		—		151,185
Mortgage loan secured by five hotel properties, Merrill Lynch Pool 2		—		—		—		—		112,453		—		112,453
Mortgage loan secured by five hotel properties, Merrill Lynch Pool 3		—		—		—		—		93,257		—		93,257
Mortgage loan secured by five hotel properties, Merrill Lynch Pool 7		—		—		—		—		80,782		—		80,782
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
Mortgage loan secured by Philadelphia Courtyard		—		—		—		—		—		8,098		8,098
Mortgage loan secured by Arlington Marriott		—		—		—		—		—		103,759		103,759
Mortgage loan secured by Jacksonville Residence Inn		—		—		—		—		—		6,651		6,651

Total indebtedness of continuing operations	$	167,202	$	145,667	$	132,079	$	584,202	$	286,492	$	1,046,816	$	2,362,458

NOTE:

These maturities assume no event of default would occur.

PIM HIGHLAND HOLDING LLC

INDEBTEDNESS BY MATURITY

ASSUMING EXTENSION OPTIONS ARE EXERCISED

DECEMBER 31, 2011

(in thousands)

(Unaudited)


	2012			2013			2014			2015			2016			Thereafter			Total
Mortgage loan secured by Boston Hilton	$	—		$	64,268		$	—		$	—		$	—		$	—		$	64,268
Mortgage loan secured by Nashville Renaissance		—			46,023			—			—			—			—			46,023
Mortgage loan secured by Princeton Westin		—			32,651			—			—			—			—			32,651
Mortgage loan secured by 25 hotel properties		—			—			—			—			530,000			—			530,000
Mezzanine loan		—			—			—			—			144,594			—			144,594
Mezzanine loan		—			—			—			—			137,650			—			137,650
Mezzanine loan		—			—			—			—			117,986			—			117,986
Mezzanine loan		—			—			—			—			18,425			—			18,425

Total indebtedness		—			142,942			—			—			948,655			—			1,091,597
Ashford’s proportionate obligations		x71.74	%		x71.74	%		x71.74	%		x71.74	%		x71.74	%		x71.74	%		x71.74	%

	$	—		$	102,547		$	—		$	—		$	680,565		$	—		$	783,112

Total indebtedness of continuing operations plus Ashford’s 71.74% share of PIM Highland Holding LLC	$	167,202		$	248,214		$	132,079		$	584,202		$	967,057		$	1,046,816		$	3,145,570

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ASHFORD HOSPITALITY TRUST, INC.

KEY PERFORMANCE INDICATORS—PRO FORMA

LEGACY PORTFOLIO ONLY

(dollars in thousands)

(Unaudited)


	Three Months Ended									Year Ended
	December 31,									December 31,
	2011			2010			% Variance			2011			2010			% Variance
ALL HOTELS INCLUDED IN CONTINUING OPERATIONS:
Room revenues (in thousands)	$	181,176		$	171,877			5.41	%	$	702,118		$	659,315			6.49	%
RevPAR	$	86.66		$	82.22			5.40	%	$	93.21		$	87.53			6.49	%
Occupancy		68.11	%		66.89	%		1.22	%		72.17	%		70.33	%		1.84	%
ADR	$	127.25		$	122.91			3.53	%	$	129.16		$	124.46			3.78	%

NOTES: The above pro forma table assumes the 96 hotel properties owned and included in continuing operations as of December 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)	$	108,036		$	103,286			4.60	%	$	425,695		$	405,365			5.02	%
RevPAR	$	83.03		$	79.37			4.61	%	$	90.18		$	85.87			5.02	%
Occupancy		68.55	%		66.94	%		1.61	%		72.38	%		71.03	%		1.35	%
ADR	$	121.11		$	118.58			2.13	%	$	124.60		$	120.89			3.07	%

NOTES:

(1)	The above pro forma table assumes the 63 hotel properties owned and included in continuing operations as of December 31, 2011, but not under renovation for the three months and year ended December 31, 2011, were owned as of the beginning of the first comparative reporting period.

(2)

Excluded Hotels Under Renovation: Capital Hilton, Courtyard Basking Ridge, Courtyard Foothill Ranch Irvine, Courtyard Legacy Park Courtyard Louisville Airport, Courtyard Newark, Courtyard Oakland Airport, Courtyard Old Town Scottsdale, Courtyard Philadelphia Downtown, Courtyard San Francisco Downtown, Courtyard Seattle Downtown, Crown Plaza La Concha-Key West, Embassy Suites Austin Arboretum, Embassy Suites Dallas Galleria, Embassy Suites Flagstaff, Embassy Suites Houston, Embassy Suites Portland Downtown, Embassy Suites Walnut Creek, Hilton Costa Mesa, Hilton Nassau Bay Clear Lake, Hilton Santa Fe, Hilton Tucson El Conquistador Golf Resort, Marriott Bridgewater, Marriott Legacy Center, Residence Inn Jacksonville, Residence Inn Las Vegas, Sheraton San Diego Mission Valley, SpringHill Suites Charlotte, SpringHill Suites Buford Mall of Georgia, SpringHill Suites Manhattan Beach, SpringHill Suites Philadelphia, SpringHill Suites Raleigh Airport, SpringHill Suites Richmond

PIM HIGHLAND HOLDING LLC

KEY PERFORMANCE INDICATORS—PRO FORMA

(dollars in thousands)

(Unaudited)

THE FOLLOWING TABLE PRESENTS THE PRO FORMA PERFORMANCE OF THE HOTEL PORTFOLIO INCLUDED IN PIM HIGHLAND HOLDING LLC AS IF THEY WERE OWNED AS OF THE BEGINNING OF THE FIRST COMPARATIVE REPORTING PERIOD.


	Three Months Ended									Year Ended
	December 31,									December 31,
	2011			2010			% Variance			2011			2010			% Variance
71.74% PRO-RATA SHARE OF ALL HOTELS
Room revenues (in thousands)	$	51,076		$	49,792			2.58	%	$	202,506		$	194,426			4.16	%
RevPAR	$	91.11		$	88.81			2.59	%	$	95.74		$	91.91			4.17	%
Occupancy		66.79	%		66.68	%		0.11	%		70.64	%		69.38	%		1.26	%
ADR	$	136.40		$	133.19			2.41	%	$	133.54		$	132.48			0.80	%

NOTES: The above pro forma table assumes the 28 hotel properties owned as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

71.74% PRO-RATA SHARE OF ALL HOTELS NOT UNDER RENOVATION
Room revenues (in thousands)	$	47,089		$	45,609			3.24	%	$	184,825		$	175,766			5.15	%
RevPAR	$	91.82		$	88.92			3.26	%	$	95.98		$	91.27			5.16	%
Occupancy		67.13	%		66.55	%		0.58	%		70.57	%		69.00	%		1.57	%
ADR	$	136.78		$	133.61			2.37	%	$	136.01		$	132.28			2.82	%

NOTES:

(1)	The above pro forma table assumes the 25 hotel properties owned as of December 31, 2011, but not under renovation for the three months and year ended December 31, 2011, were owned as of the beginning of the first comparative reporting period.

(2)	Excluded Hotels Under Renovation: Marriott Omaha, Marriott San Antonio Plaza, The Churchill Washington DC

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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									Year Ended
	December 31,									December 31,
	2011			2010			% Variance			2011			2010			% Variance
REVENUE
Rooms	$	181,176		$	171,877			5.4	%	$	702,118		$	659,315			6.5	%
Food and beverage		46,041			43,192			6.6	%		161,136			154,175			4.5	%
Other		9,681			9,742			-0.6	%		38,884			38,884			0.0	%

Total hotel revenue		236,898			224,811			5.4	%		902,138			852,374			5.8	%

EXPENSES
Rooms		43,336			40,977			5.8	%		161,931			152,545			6.2	%
Food and beverage		30,804			29,123			5.8	%		111,016			107,320			3.4	%
Other direct		5,794			5,872			-1.3	%		23,388			23,674			-1.2	%
Indirect		66,845			65,663			1.8	%		253,033			244,939			3.3	%
Management fees, includes base and incentive fees		11,048			10,662			3.6	%		40,395			39,365			2.6	%

Total hotel operating expenses		157,827			152,297			3.6	%		589,763			567,843			3.9	%
Property taxes, insurance, and other		12,021			12,114			-0.8	%		47,865			50,386			-5.0	%

HOTEL OPERATING PROFIT (Hotel EBITDA)		67,050			60,400			11.0	%		264,510			234,145			13.0	%
Hotel EBITDA Margin		28.30	%		26.87	%		1.43	%		29.32	%		27.47	%		1.85	%
Minority interest in earnings of consolidated joint ventures		1,366			1,215			12.4	%		6,133			4,872			25.9	%

HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures	$	65,684		$	59,185			11.0	%	$	258,377		$	229,273			12.7	%

NOTE:

The above pro forma table assumes the 96 hotel properties owned and included in continuing operations as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

ALL HOTELS NOT UNDER RENOVATION INCLUDED IN CONTINUING OPERATIONS:


	Three Months Ended									Year Ended
	December 31,									December 31,
	2011			2010			% Variance			2011			2010			% Variance
REVENUE
Rooms	$	108,036		$	103,286			4.6	%	$	425,695		$	405,365			5.0	%
Food and beverage		27,881			25,445			9.6	%		95,539			91,630			4.3	%
Other		5,463			5,410			1.0	%		21,282			20,816			2.2	%

Total hotel revenue		141,380			134,141			5.4	%		542,516			517,811			4.8	%

EXPENSES
Rooms		25,781			24,561			5.0	%		96,957			92,187			5.2	%
Food and beverage		17,848			16,892			5.7	%		64,262			62,342			3.1	%
Other direct		3,178			3,101			2.5	%		12,359			12,244			0.9	%
Indirect		40,131			39,635			1.3	%		152,795			149,051			2.5	%
Management fees, includes base and incentive fees		7,233			6,994			3.4	%		25,910			26,125			-0.8	%

Total hotel operating expenses		94,171			91,183			3.3	%		352,283			341,949			3.0	%
Property taxes, insurance, and other		7,444			6,929			7.4	%		30,003			30,077			-0.2	%

HOTEL OPERATING PROFIT (Hotel EBITDA)		39,765			36,029			10.4	%		160,230			145,785			9.9	%
Hotel EBITDA Margin		28.13	%		26.86	%		1.27	%		29.53	%		28.15	%		1.38	%
Minority interest in earnings of consolidated joint ventures		526			558			-5.7	%		2,413			2,030			18.9	%

HOTEL OPERATING PROFIT (Hotel EBITDA), excluding minority interest in joint ventures	$	39,239		$	35,471			10.6	%	$	157,817		$	143,755			9.8	%

NOTES:

(1)	The above pro forma table assumes the 63 hotel properties owned and included in continuing operations as of December 31, 2011, but not under renovation during the three months ended December 31, 2011 were owned as of the beginning of the first comparative reporting period.

(2)

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PIM HIGHLAND HOLDING LLC

PRO FORMA HOTEL OPERATING PROFIT

(dollars in thousands)

(Unaudited)

71.74% PRO-RATA SHARE OF ALL HOTELS INCLUDED IN PIM HIGHLAND PORTFOLIO:


	Three Months Ended									Year Ended
	December 31,									December 31,
	2011			2010			% Variance			2011			2010			% Variance
REVENUE
Rooms	$	51,076		$	49,792			2.6	%	$	202,506		$	194,426			4.2	%
Food and beverage		21,049			21,089			-0.2	%		74,096			70,958			4.4	%
Other		2,734			2,803			-2.5	%		11,437			11,274			1.4	%

Total hotel revenue		74,859			73,684			1.6	%		288,039			276,658			4.1	%

EXPENSES
Rooms		11,926			12,185			-2.1	%		47,204			47,579			-0.8	%
Food and beverage		13,696			14,404			-4.9	%		50,618			50,776			-0.3	%
Other direct		1,370			1,386			-1.2	%		5,449			5,325			2.3	%
Indirect		22,097			21,773			1.5	%		83,982			81,143			3.5	%
Management fees, includes base and incentive fees		2,988			2,187			36.6	%		10,080			8,311			21.3	%

Total hotel operating expenses		52,077			51,935			0.3	%		197,333			193,134			2.2	%
Property taxes, insurance, and other		3,740			3,844			-2.7	%		16,139			15,836			1.9	%

HOTEL OPERATING PROFIT (Hotel EBITDA),	$	19,042		$	17,905			6.4	%	$	74,567		$	67,688			10.2	%

Hotel EBITDA Margin		25.44	%		24.30	%		1.14	%		25.89	%		24.47	%		1.42	%

NOTES:

(1)	The above pro forma table assumes the 28 hotel properties owned as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

(2)	For comparative purposes, data in the table above has been adjusted to eliminate one-time real estate tax refunds received by prior owner.

71.74% PRO-RATA SHARE OF ALL HOTELS INCLUDED IN PIM HIGHLAND PORTFOLIO NOT UNDER RENOVATION:


	Three Months Ended									Year Ended
	December 31,									December 31,
	2011			2010			% Variance			2011			2010			% Variance
REVENUE
Rooms	$	47,089		$	45,609			3.2	%	$	184,825		$	175,766			5.2	%
Food and beverage		19,988			19,900			0.4	%		69,743			65,992			5.7	%
Other		2,522			2,503			0.8	%		10,343			9,989			3.5	%

Total hotel revenue		69,599			68,012			2.3	%		264,911			251,747			5.2	%

EXPENSES
Rooms		11,073			11,242			-1.5	%		43,621			43,641			0.0	%
Food and beverage		12,965			13,572			-4.5	%		47,592			47,314			0.6	%
Other direct		1,294			1,282			0.9	%		5,100			4,889			4.3	%
Indirect		20,428			20,224			1.0	%		77,623			74,771			3.8	%
Management fees, includes base and incentive fees		2,772			2,046			35.5	%		9,357			7,688			21.7	%

Total hotel operating expenses		48,532			48,366			0.3	%		183,293			178,303			2.8	%
Property taxes, insurance, and other		3,319			3,506			-5.3	%		14,497			14,264			1.6	%

HOTEL OPERATING PROFIT (Hotel EBITDA),	$	17,748		$	16,140			10.0	%	$	67,121		$	59,180			13.4	%

Hotel EBITDA Margin		25.50	%		23.73	%		1.77	%		25.34	%		23.51	%		1.83	%

NOTES:

(1)	The above pro forma table assumes the 25 hotel properties owned as of December 31, 2011 but not under renovation were owned as of the beginning of the first comparative reporting period.

(2)	Excluded Hotels Under Renovation: Marriott Omaha, Marriott San Antonio Plaza, The Churchill Washington DC

(3)	For comparative purposes, data in the table above has been adjusted to eliminate one-time real estate tax refunds received by prior owner.

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ASHFORD HOSPITALITY TRUST, INC.

PRO FORMA HOTEL REVPAR BY REGION

LEGACY PORTFOLIO ONLY

(Unaudited)


					Three Months Ended							Year Ended
	Number of		Number of		December 31,							December 31,
Region	Hotels		Rooms		2011		2010		% Change			2011		2010		% Change
Pacific (1)		20		4,867	$	92.49	$	84.28		9.7	%	$	101.77	$	92.49		10.0	%
Mountain (2)		8		1,704		67.34		67.75		-0.6	%		75.71		75.89		-0.2	%
West North Central (3)		3		690		70.33		72.33		-2.8	%		78.70		75.35		4.4	%
West South Central (4)		9		1,936		87.05		82.92		5.0	%		91.25		84.63		7.8	%
East North Central (5)		7		1,103		68.03		64.00		6.3	%		72.37		66.70		8.5	%
East South Central (6)		2		236		76.41		82.05		-6.9	%		80.17		86.97		-7.8	%
Middle Atlantic (7)		8		2,090		99.23		90.70		9.4	%		99.46		90.95		9.4	%
South Atlantic (8)		37		7,610		87.78		84.83		3.5	%		95.30		91.03		4.7	%
New England (9)		2		159		81.80		77.60		5.4	%		83.04		77.98		6.5	%

Total Portfolio		96		20,395	$	86.66	$	82.22		5.4	%	$	93.21	$	87.53		6.5	%

(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

NOTE:

The above pro forma table assumes the 96 hotel properties owned and included in continuing operations as of December 31, 2011 were owned as of the beginning of the comparative reporting period.

PIM HIGHLAND HOLDING LLC

PRO FORMA HOTEL REVPAR BY REGION

(Unaudited)


					Three Months Ended							Year Ended
	Number of		Number of		December 31,							December 31,
Region	Hotels		Rooms		2011		2010		% Change			2011		2010		% Change
Pacific (1)		1		294	$	61.25	$	46.36		32.1	%	$	69.34	$	56.66		22.4	%
Mountain (2)		1		145		74.00		73.40		0.8	%		79.62		78.98		0.8	%
West North Central (3)		1		215		69.81		68.17		2.4	%		81.42		80.43		1.2	%
West South Central (4)		4		929		85.12		86.68		-1.8	%		91.23		88.04		3.6	%
East North Central (5)		1		103		107.39		95.76		12.1	%		96.35		88.72		8.6	%
East South Central (6)		1		483		114.42		109.96		4.1	%		111.40		104.94		6.2	%
Middle Atlantic (7)		4		832		83.07		76.52		8.6	%		87.24		77.83		12.1	%
South Atlantic (8)		13		2,293		83.18		82.96		0.3	%		90.74		91.20		-0.5	%
New England (9)		2		506		149.05		147.31		1.2	%		151.72		142.81		6.2	%

Total Portfolio		28		5,800	$	91.11	$	88.81		2.6	%	$	95.74	$	91.91		4.2	%

(1)	Includes California

(2)	Includes Colorado

(3)	Includes Nebraska

(4)	Includes Texas

(5)	Includes Illinois

(6)	Includes Tennessee

(7)	Includes New York and New Jersey

(8)	Includes Virginia, Florida, Georgia, Maryland, and District of Columbia

(9)	Includes Massachusetts

NOTES:

(1)	All data in the table above includes our 71.74% pro-rata share of assets in PIM Highland Holding JV.

(2)	The above pro forma table assumes the 28 hotel properties owned as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

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ASHFORD HOSPITALITY TRUST, INC.

PRO FORMA HOTEL REVPAR BY BRAND

LEGACY PORTFOLIO ONLY

(Unaudited)


					Three Months Ended							Year Ended
	Number of		Number of		December 31,							December 31,
Brand	Hotels		Rooms		2011		2010		% Change			2011		2010		% Change
Hilton		30		6,575	$	92.03	$	88.17		4.4	%	$	100.85	$	95.52		5.6	%
Hyatt		1		242		124.74		114.02		9.4	%		127.21		113.04		12.5	%
InterContinental		2		420		131.63		125.31		5.0	%		145.66		133.23		9.3	%
Independent		2		317		76.06		64.18		18.5	%		87.36		76.96		13.5	%
Marriott		56		11,431		84.58		80.39		5.2	%		88.42		83.25		6.2	%
Starwood		5		1,410		63.09		56.75		11.2	%		74.94		67.98		10.2	%

Total Portfolio		96		20,395	$	86.66	$	82.22		5.4	%	$	93.21	$	87.53		6.5	%

NOTE:

The above pro forma table assumes the 96 hotel properties owned and included in continuing operations as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

PIM HIGHLAND HOLDING LLC

PRO FORMA HOTEL REVPAR BY BRAND

(Unaudited)


					Three Months Ended							Year Ended
	Number of		Number of		December 31,							December 31,
Region	Hotels		Rooms		2011		2010		% Change			2011		2010		% Change
Hilton		7		1,235	$	100.76	$	97.40		3.4	%	$	107.94	$	101.66		6.2	%
Hyatt		2		509		88.67		86.20		2.9	%		96.22		93.72		2.7	%
InterContinental		1		355		53.59		51.65		3.8	%		59.27		60.27		-1.7	%
Independent		3		399		116.61		115.24		1.2	%		119.23		123.51		-3.5	%
Marriott		13		2,949		90.38		88.74		1.8	%		93.56		89.08		5.0	%
Starwood		2		353		70.66		70.66		0.0	%		80.66		74.91		7.7	%

Total Portfolio		28		5,800	$	91.11	$	88.81		2.6	%	$	95.74	$	91.91		4.2	%

NOTES:

(1)	All data in the table above includes our 71.74% pro-rata share of assets in PIM Highland Holding JV.

(2)	The above pro forma table assumes the 28 hotel properties owned as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

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ASHFORD HOSPITALITY TRUST, INC.

PRO FORMA HOTEL OPERATING PROFIT BY REGION

LEGACY PORTFOLIO ONLY

(dollars in thousands)

(Unaudited)


					Three Months Ended													Year Ended
	Number of		Number of		December 31,													December 31,
Region	Hotels		Rooms		2011		% Total			2010		% Total			% Change			2011		% Total			2010		% Total			% Change
Pacific (1)		20		4,867	$	18,214		27.2	%	$	15,451		25.6	%		17.9	%	$	75,676		28.6	%	$	61,414		26.2	%		23.2	%
Mountain (2)		8		1,704		2,528		3.8	%		2,634		4.4	%		-4.0	%		11,868		4.5	%		13,053		5.6	%		-9.1	%
West North Central (3)		3		690		1,920		2.8	%		1,977		3.3	%		-2.9	%		8,678		3.3	%		7,786		3.3	%		11.5	%
West South Central (4)		9		1,936		6,977		10.4	%		6,368		10.5	%		9.6	%		25,629		9.7	%		22,641		9.7	%		13.2	%
East North Central (5)		7		1,103		2,391		3.6	%		2,375		3.9	%		0.7	%		10,625		4.0	%		9,459		4.0	%		12.3	%
East South Central (6)		2		236		575		0.8	%		711		1.2	%		-19.1	%		2,878		1.1	%		3,161		1.4	%		-9.0	%
Middle Atlantic (7)		8		2,090		8,837		13.2	%		7,659		12.7	%		15.4	%		28,333		10.7	%		24,810		10.6	%		14.2	%
South Atlantic (8)		37		7,610		25,191		37.6	%		22,888		37.9	%		10.1	%		99,120		37.5	%		90,314		38.6	%		9.8	%
New England (9)		2		159		417		0.6	%		337		0.5	%		23.7	%		1,703		0.6	%		1,507		0.6	%		13.0	%

Total Portfolio		96		20,395	$	67,050		100.0	%	$	60,400		100.0	%		11.0	%	$	264,510		100.0	%	$	234,145		100.0	%		13.0	%

(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

NOTE:

The above pro forma table assumes the 96 hotel properties owned and included in continuing operations as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

PIM HIGHLAND HOLDING LLC

PRO FORMA HOTEL OPERATING PROFIT BY REGION

(dollars in thousands)

(Unaudited)


	Number of		Number of		Three Months Ended December 31,														Year Ended December 31,
Region	Hotels		Rooms		2011		% Total			2010			% Total			% Change			2011		% Total			2010		% Total			% Change
Pacific (1)		1		294	$	255		1.3	%	$	(46	)		-0.3	%		-654.3	%	$	1,300		1.7	%	$	82		0.1	%		1485.4	%
Mountain (2)		1		145		476		2.5	%		493			2.8	%		-3.4	%		1,627		2.2	%		1,741		2.6	%		-6.5	%
West North Central (3)		1		215		408		2.1	%		470			2.6	%		-13.2	%		2,473		3.3	%		2,511		3.7	%		-1.5	%
West South Central (4)		4		929		3,392		17.8	%		3,553			19.8	%		-4.5	%		13,441		18.0	%		12,649		18.7	%		6.3	%
East North Central (5)		1		103		411		2.2	%		343			1.9	%		19.8	%		1,022		1.4	%		926		1.4	%		10.4	%
East South Central (6)		1		483		2,542		13.4	%		2,502			14.0	%		1.6	%		7,247		9.7	%		6,770		10.0	%		7.0	%
Middle Atlantic (7)		4		832		2,608		13.7	%		2,102			11.8	%		24.1	%		9,699		13.0	%		7,207		10.6	%		34.6	%
South Atlantic (8)		13		2,293		5,536		29.1	%		5,047			28.2	%		9.7	%		25,319		34.0	%		24,394		36.0	%		3.8	%
New England (9)		2		506		3,414		17.9	%		3,441			19.2	%		-0.8	%		12,439		16.7	%		11,408		16.9	%		9.0	%

Total Portfolio		28		5,800	$	19,042		100.0	%	$	17,905			100.0	%		6.4	%	$	74,567		100.0	%	$	67,688		100.0	%		10.2	%

(1)	Includes California

(2)	Includes Colorado

(3)	Includes Nebraska

(4)	Includes Texas

(5)	Includes Illinois

(6)	Includes Tennessee

(7)	Includes New York and New Jersey

(8)	Includes Virginia, Florida, Georgia, Maryland, and District of Columbia

(9)	Includes Massachusetts

NOTES:

(1)	All data in the table above includes our 71.74% pro-rata share of assets in PIM Highland Holding JV.

(2)	The above pro forma table assumes the 28 hotel properties owned as of December 31, 2011 were owned as of the beginning of the first comparative reporting period.

(3)	For comparative purposes, data in the table above has been adjusted to eliminate one-time real estate tax refunds received by prior owner.

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ASHFORD HOSPITALITY TRUST, INC.

PRO FORMA HOTEL OPERATING PROFIT MARGIN

(Unaudited)

THE FOLLOWING PRO FORMA HOTEL OPERATING PROFIT MARGIN PRESENTS THE 96 HOTELS INCLUDED IN THE COMPANY'S CONTINUING OPERATIONS 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
	96 Legacy			Holding LLC
	Properties			28 Properties
HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN:
Fourth Quarter 2011		28.30	%		25.44	%
Fourth Quarter 2010		26.87	%		24.30	%

Variance		1.43	%		1.14	%

HOTEL OPERATING PROFIT (HOTEL EBITDA) MARGIN VARIANCE BREAKDOWN:
Rooms		-0.10	%		0.66	%
Food & Beverage and Other Departmental		0.12	%		1.30	%
Administrative & General		0.54	%		-0.20	%
Sales & Marketing		0.05	%		1.73	%
Hospitality		0.04	%		-0.04	%
Repair & Maintenance		0.05	%		-0.01	%
Energy		0.16	%		0.39	%
Franchise Fee		-0.20	%		-1.70	%
Management Fee		0.17	%		-0.25	%
Incentive Management Fee		-0.09	%		-0.77	%
Insurance		0.13	%		0.11	%
Property Taxes		0.08	%		0.01	%
Other Taxes		0.09	%		0.09	%
Leases/Other		0.39	%		-0.18	%

Total		1.43	%		1.14	%

NOTE:

For comparative purposes, data in the table above for PIM Highland LLC properties has been adjusted to eliminate one-time real estate tax refunds received by prior owner.

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ASHFORD HOSPITALITY TRUST, INC.

PRO FORMA SEASONALITY TABLE

(dollars in thousands)

(Unaudited)

THE FOLLOWING PRO FORMA SEASONALITY TABLES REFLECT: (I) ALL 96 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 4th Quarter			2011 3rd Quarter			2011 2nd Quarter			2011 1st Quarter			TTM
Legacy Portfolio
Total Hotel Revenue	$	236,898		$	217,033		$	233,609		$	214,598		$	902,138
Hotel EBITDA	$	67,050		$	60,353		$	74,621		$	62,486		$	264,510
Hotel EBITDA Margin		28.3	%		27.8	%		31.9	%		29.1	%		29.3	%
EBITDA % of Total TTM		25.4	%		22.8	%		28.2	%		23.6	%		100.0	%
JV Interests in EBITDA	$	1,366		$	1,313		$	1,969		$	1,485		$	6,133

PIM Highland Holding LLC Portfolio
Total Hotel Revenue	$	74,859		$	69,845		$	77,475		$	65,860		$	288,039
Hotel EBITDA	$	19,042		$	17,537		$	24,140		$	13,848		$	74,567
Hotel EBITDA Margin		25.4	%		25.1	%		31.2	%		21.0	%		25.9	%
EBITDA % of Total TTM		25.5	%		23.5	%		32.4	%		18.6	%		100.0	%

Legacy and PIM Highland Holding LLC Combined
Total Hotel Revenue	$	311,757		$	286,878		$	311,084		$	280,458		$	1,190,177
Hotel EBITDA	$	86,092		$	77,890		$	98,761		$	76,334		$	339,077
Hotel EBITDA Margin		27.6	%		27.2	%		31.7	%		27.2	%		28.5	%
EBITDA % of Total TTM		25.4	%		23.0	%		29.1	%		22.5	%		100.0	%
JV Interests in EBITDA	$	1,366		$	1,313		$	1,969		$	1,485		$	6,133

NOTE:

For comparative purposes, data in the tables above for PIM Highland LLC properties have been adjusted to eliminate one-time real estate tax refunds received by prior owner.

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Ashford Hospitality Trust, Inc.

Anticipated Capital Expenditures Calendar

96 Legacy Hotels (a)

2011

2012

Rooms

1st Quarter
Actual

2nd Quarter
Actual

3rd Quarter
Actual

4th Quarter
Actual

1st Quarter
Estimated

2nd Quarter
Estimated

3rd Quarter
Estimated

4th Quarter
Estimated

Courtyard Louisville Airport

150

Courtyard Crystal City Reagan Airport

272

Hilton Costa Mesa

486

Courtyard Philadelphia Downtown

498

Embassy Suites Crystal City—Reagan Airport

267

Marriott Seattle Waterfront

358

Sheraton Minneapolis West

222

Courtyard Edison

146

Crowne Plaza Beverly Hills

260

Fairfield Inn and Suites Kennesaw

One Ocean

193

Renaissance Tampa

293

Marriott Legacy Center

404

Embassy Suites Austin Arboretum

150

Embassy Suites Dallas Galleria

150

Embassy Suites Houston

150

Hilton Nassau Bay—Clear Lake

243

Capital Hilton

408

Courtyard Legacy Park

153

Courtyard Newark

181

Courtyard Old Town Scottsdale

180

SpringHill Suites Raleigh Airport

120

SpringHill Suites Richmond

136

Marriott Dallas Market Center

265

Residence Inn Newark

168

Residence Inn Phoenix Airport

200

Sheraton San Diego Mission Valley

260

Hilton Santa Fe

157

Crowne Plaza La Concha—Key West

160

Embassy Suites Walnut Creek

249

Courtyard Seattle Downtown

250

Embassy Suites Portland—Downtown

276

Courtyard Basking Ridge

235

Courtyard Oakland Airport

156

Embassy Suites Flagstaff

119

Hilton Tucson El Conquistador Golf Resort

428

Marriott Bridgewater

347

Residence Inn Jacksonville

120

SpringHill Suites Buford Mall of Georgia

SpringHill Suites Charlotte

136

SpringHill Suites Manhattan Beach

164

SpringHill Suites Philadelphia

199

Courtyard Foothill Ranch Irvine

156

Courtyard San Francisco Downtown

405

Residence Inn Las Vegas

256

Courtyard Hartford—Manchester

Embassy Suites Santa Clara—Silicon Valley

257

Historic Inn Annapolis

124

Hilton Minneapolis Airport

300

Marriott Crystal Gateway

697

Hampton Inn Evansville

141

Embassy Suites East Syracuse

215

Hampton Inn Lawrenceville

Hyatt Regency Coral Gables

242

Residence Inn Dallas Plano

126

Residence Inn Lake Buena Vista

210

Residence Inn Palm Desert

130

Residence Inn Salt Lake City

144

Sheraton City Center—Indianapolis

371

Courtyard Atlanta Alpharetta

154

Courtyard Ft. Lauderdale Weston

174

Courtyard Palm Desert

151

Embassy Suites West Palm Beach

160

Hilton Garden Inn Jacksonville

119

Embassy Suites Dulles Int’l

150

Hilton La Jolla Torrey Pines

296

Hilton St. Petersburg Bayfront

333

Residence Inn Atlanta—Buckhead

150

Residence Inn Fairfax Merrifield

159

(a)	Only hotels which have had or are expected to have significant capital expenditures that could result in displacement during 2011 and 2012 are included in this table.

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PIM Highland Holding LLC

Anticipated Capital Expenditures Calendar

28 Highland Hotels (a)

2011

2012

Rooms

1st Quarter
Actual

2nd Quarter
Actual

3rd Quarter
Actual

4th Quarter
Actual

1st Quarter
Estimated

2nd Quarter
Estimated

3rd Quarter
Estimated

4th Quarter
Estimated

Courtyard Denver Airport

202

Marriott Omaha

300

Marriott San Antonio Plaza

251

The Churchill

173

Courtyard Boston Tremont

315

Courtyard Savannah

156

Ritz-Carlton Atlanta

444

Hyatt Regency Savannah

351

Renaissance Nashville

673

The Melrose

240

Hilton Garden Inn Virginia Beach

176

Hilton Boston Back Bay

390

Hilton Parsippany

354

Hyatt Regency Wind Watch

358

The Silversmith

143

Marriott Dallas Fort Worth Airport

491

Marriott Sugarland

300

(a)

Only hotels which have had or are expected to have significant capital expenditures that could result in displacement during 2011 and 2012 are included in this table.

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