Ashford Hospitality Trust Reports Fourth Quarter Results

Ashford Hospitality Trust, Inc. (NYSE: AHT) today reported the following results and performance measures for the fourth quarter ended December 31, 2009.

FINANCIAL HIGHLIGHTS AND LIQUIDITY

- Corporate unrestricted cash at the end of the quarter was $165.2 million

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- Operating profit margin decreased 297 basis pointsNet loss available to common shareholders was $76.9 million, or $1.30 per diluted share, compared with net income of $135.1 million, or $1.34 per diluted share, in the prior-year quarter

- Adjusted funds from operations (AFFO) was $0.32 per diluted shareCash available for distribution (CAD) was $0.22 per diluted shareFixed charge coverage ratio was 1.69x under the senior credit facility covenant versus a required minimum of 1.25xCAPITAL ALLOCATION

- Repurchased 6.3 million common shares in the quarter for $28.0 million and a total of 30.1 million shares for $81.3 million in 2009 Capex invested in the quarter was $17.4 million, for a total of $69.2 million in 2009 Capital market hedging strategies resulted in $52.3 million of interest expense savings in 2009IMPAIRMENT

During the fourth quarter, the Company recorded an impairment of $59.3 million related to its Westin O'Hare in suburban Chicago. The Company had suspended making mortgage payments pursuant to grace periods granted by the lender under a forbearance agreement and has been working with the special servicer on the $101 million loan for a consensual deed in lieu of foreclosure. The impairment represents the difference between the asset's net book value and the current fair market value. Once the deed in lieu of foreclosure to the lender is completed, which is anticipated to be in the first or second quarter of 2010, the Company will report a non cash gain of approximately $53.0 million to the level of the non-recourse debt on the asset and effectively a net impairment of $6.3 million.

CAPITAL STRUCTURE

At December 31, 2009, the Company's net debt to total gross assets (as defined by the corporate credit facility) was 59.0%. As of December 31, 2009, the Company had $2.8 billion of mortgage debt. Including the swap and flooridors its blended average interest rate was 2.95%. Including its $1.8 billion interest rate swap, 98% of the Company's debt is variable-rate debt. The Company's weighted average debt maturity including extension options is 5.2 years.

On November 19, 2009, the Company closed on the refinancing of its remaining 2010 debt maturity and made significant progress on the Company's 2011 maturities through transactions with Prudential Mortgage Capital Company and Wheelock Street Capital with a $145.0 million non-recourse loan. The loan includes an A-Note from Prudential and a B-Note from Wheelock Street with a combined interest rate of 12.26% and a term of six years. The loans are secured by the Embassy Suites Crystal City, Embassy Suites Orlando Airport, Embassy Suites Santa Clara, Embassy Suites Portland and the Hilton Costa Mesa. The proceeds paid off a $75.0 million loan maturing in 2010 and a $65.0 million loan maturing in 2011, and provide $4.0 million for capital improvements to be drawn over a 24-month period. The Hilton Auburn Hills and the Hilton Rye Town, which were included in the maturing loans, are now unencumbered.

On November 19, 2009, the Company also completed the sale of the Westin Westminster mezzanine loan that was defeased by the original borrower in 2007 as part of a refinancing. The total gross proceeds received by the Company amounted to $13.6 million before transaction costs. The loan had an outstanding balance of $11.0 million with a September 1, 2011 maturity. The Company negotiated for the release of the portfolio of government agency securities serving as the defeased loan collateral, and sold the actual securities via an auction. The Company obtained pricing in excess of the par amount due to the high pay coupon compared to current market rates.

Effective December 1, 2009, the Company and the special servicer who is administering the $29.1 million first mortgage on the Company's Hyatt Regency Dearborn mutually agreed to transfer the Company's possession and control of the hotel to a court-appointed receiver. As a result of the transfer, the Company deconsolidated the hotel and its other net assets from its financial reporting in the amount of $32.0 million (previously impaired by $10.9 million in the second quarter of 2009) and the hotel's $29.1 million mortgage indebtedness, and recognized a loss on the deconsolidation of debt of $2.9 million in the fourth quarter. Additionally, the Company reclassified the hotel's results of operations through the effective date of the transfer to discontinued operations on its statement of operations.

Effective December 29, 2009, the Company refinanced its $19.74 million loan secured by the Hilton El Conquistador Hotel and Country Club in Tucson, Arizona. The loan was set to mature in June 2011. The new non-recourse financing with MetLife for the same amount bears interest at the greater of 5.5% or LIBOR plus 350 basis points and is interest only for a term of five years.

During 2009, the Company completed a total of $285 million in financings, re-financings and loan modifications. The Company has no debt maturities in 2010 and has $209 million of hard debt maturities in 2011, $203 million of which matures in December 2011 and is secured by a portfolio of hotels.

SUBSEQUENT EVENTS

On February 12, 2010, the Company completed the previously disclosed discounted payoff with the borrower on the Company's $33.6 million mezzanine loan, which was secured by interests in the Ritz Carlton Key Biscayne and set to mature in 2017. The Company received $20 million in cash and a $4 million note secured by interests in the property and that matures in 2017. The Company had previously recorded an impairment of $10.7 million to account for the discounted payoff in the third quarter of 2009.

PORTFOLIO REVPAR

As of December 31, 2009, the Company had a portfolio of direct hotel investments consisting of 102 properties classified in continuing operations. During the fourth quarter, 95 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 102 hotels) and proforma not-under-renovation basis (95 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 102 hotels in continuing operations. Details of each category are provided in the tables attached to this release.

-Proforma RevPAR decreased 13.3% for hotels not under renovation on a 10.8% decrease in ADR to $123.61 and a 181 basis point decline in occupancyProforma RevPAR decreased 13.5% for all hotels on a 10.6% decrease in ADR to $124.26 and a 214 basis point decline in occupancyHOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

For the 95 hotels as of December 31, 2009, that were not under renovation, Proforma Hotel EBITDA decreased 24.4% to $50.3 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) declined 276 basis points to 23.3%. For all 102 hotels included in continuing operations as of December 31, 2009, Proforma Hotel EBITDA decreased 25.5% to $55.8 million and Hotel EBITDA margin decreased 297 basis points to 23.3%.

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 102 hotels included in continuing operations are provided in the tables attached to this release.

Monty J. Bennett, Chief Executive Officer, commented, "Our operations, capital markets, and share repurchase strategies continued to address many of our top priorities for the year such as offsetting declining RevPAR trends with interest expense savings, eliminating near-term debt maturities and creating value with a disciplined share repurchase strategy. Looking ahead to 2010, we still expect the operating environment to continue to be extremely challenging, requiring a continued cost control focus."