Eagle Hospitality Announces First Quarter Results

Business Wire, May 8, 2007

First Quarter 2007 Highlights:

* Entered into a definitive agreement with an Apollo Real Estate joint venture, which agreed to acquire Eagle for $13.35 per diluted share and unit in cash

* Corporate G&A expense of $0.03 per diluted share and unit incurred for the strategic alternative process

* FFO of $0.16 per diluted share

* EBITDA of $9.6 million

* RevPAR increases 4.5% over prior year period

* Declared quarterly dividend of $0.175 per share, resulting in an annualized 5.3% yield based upon the May 7, 2007, closing stock price of $13.26

COVINGTON, Ky. -- Eagle Hospitality Properties Trust, Inc. (NYSE:EHP) today announced that for the first quarter ended March 31, 2007 net income available to common shareholders experienced a loss of $0.8 million which represents a $1.2 million decrease from the prior year's income of $0.4 million.

Net income available to common shareholders, funds from operations ("FFO") and earnings before interest, income taxes, depreciation, and amortization ("EBITDA") for the first quarter of 2007 include $0.6 million of expenses related to the special committee's review of strategic alternatives for the Company not incurred during the same quarter prior year.

For the quarter ended March 31, 2007, FFO decreased 15.8% to $0.16 per diluted share and unit, or $3.7 million, compared with $0.19 per diluted share and unit, or $4.4 million, in the first quarter of 2006.

For the quarter ended March 31, 2007, EBITDA decreased 2.6% to $9.6 million from $9.9 million in the first quarter of 2006.

FFO and EBITDA are non-GAAP operating measures. Please see the disclosure at the end of this release regarding these non-GAAP measures.

Hotel Operating Performance

First quarter portfolio room revenue per available room ("RevPAR") increased 4.5% over the prior year's strong quarter. Average daily rate ("ADR") rose to $151.46, a 9.1% improvement over the same period in 2006, while occupancy decreased 4.1% to 67.5%. Please see the RevPAR table disclosure at the end of this release regarding the hotels included in the current year and prior year results.

During the first quarter, the Company's hotels located in the Florida/Caribbean region led the portfolio with a 10.4% RevPAR gain, primarily due to strong gains from the Embassy Suites San Juan Hotel & Casino. The four properties acquired since the Company's initial public offering ("IPO") had a 5.3% RevPAR growth compared to a 3.9% RevPAR growth from the IPO hotels.

The Company generated $13.0 million of hotel operating income for first quarter 2007, a 5.2% increase from prior year. Hotel operating income margins across the Company's portfolio increased 34 basis points ("bps") over prior year. Please see the hotel operating income table disclosure at the end of this release regarding the hotels included in the current year and prior year results.

The hotels that generated the largest hotel operating income increases in the first quarter include: the Embassy Suites Cleveland/Rockside (increasing almost 23%), the Embassy Suites Columbus/Dublin (increasing more than 30%), and the Hilton Cincinnati Airport (increasing more than 30%).

Capital Reinvestment Program

During the first quarter 2007, the Company invested approximately $2.2 million in capital improvements throughout the portfolio. Major investments include $0.6 million at the Embassy Suites San Juan & Casino for roof replacement, $0.5 million at the Embassy Suites Boston for brand related enhancements, and $0.3 million at the Hilton Glendale for model guestroom construction and energy management projects.

The Company anticipates spending an additional $2.5 million to $3.5 million in the second quarter primarily at the Hyatt Regency Rochester, the Embassy Suites Boston, and the Hilton Glendale.

Capital Structure & Capacity

As of March 31, 2007, the Company had $258.5 million of debt outstanding, which included $186.8 million of fixed-rate debt (72% of total debt) with a weighted average interest rate of 5.5%. The remaining $71.8 million was floating-rate debt (28% of total debt) with a weighted average interest rate of 7.8%. The combined mortgage debt of the Company had a weighted average interest rate of 6.1%.

Interest expense for the twelve month period was $14.5 million, resulting in a corporate EBITDA to interest coverage ratio of 3.1 times with a debt to adjusted EBITDA ratio of approximately 5.5 times. At the end of the first quarter, the Company had $6.4 million of unrestricted cash and cash equivalents on its balance sheet and $2.8 million of restricted cash.

Dividends

On March 2, 2007 Eagle Hospitality's Board of Directors declared its first quarter dividend of $0.175 per share, which was paid to its common shareholders of record on March 30, 2007. This dividend was paid on April 16, 2007 and represents a 5.3% annualized yield based on the Company's closing share price of $13.26 on May 7, 2007.

The Company's Board of Directors also declared a quarterly dividend of $0.515625 per share of the Company's 8.25% Series A Cumulative Redeemable Preferred Stock for the first quarter to stockholders of record on March 16, 2007. This dividend was paid on April 2, 2007.