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Hospitality Properties Trust Announces 2012 Third Quarter Results

  Hospitality Properties Trust Announces 2012 Third Quarter Results

Business Wire

NEWTON, Mass. -- November 06, 2012

Hospitality Properties Trust (NYSE: HPT) today announced its financial results
for the quarter and nine months ended September 30, 2012.

Results for the Quarter Ended September 30, 2012:

Normalized funds from operations, or Normalized FFO, for the quarter ended
September 30, 2012 were $91.5 million, or $0.74 per share, compared to
Normalized FFO for the quarter ended September 30, 2011 of $98.0 million, or
$0.79 per share.

Net income available for common shareholders was $29.5 million, or $0.24 per
share, for the quarter ended September 30, 2012, compared to $40.1 million, or
$0.32 per share, for the same quarter last year. Net income available for
common shareholders for the quarter ended September 30, 2012 included a $10.6
million, or $0.09 per share, gain on sale of real estate and was reduced by
$5.0 million, or $0.04 per share, due to the liquidation preference for HPT’s
preferred shares that were redeemed during that period exceeding the carrying
value for those preferred shares.

The weighted average number of common shares outstanding was 123.6 million and
123.5 million for the quarters ended September 30, 2012 and 2011,
respectively.

A reconciliation of net income available for common shareholders determined
according to U.S. generally accepted accounting principles, or GAAP, to funds
from operations, or FFO, and Normalized FFO for the quarters ended September
30, 2012 and 2011 appears later in this press release.

Results for the Nine Months Ended September 30, 2012:

Normalized FFO for the nine months ended September 30, 2012 were $280.9
million, or $2.27 per share, compared to Normalized FFO for the nine months
ended September 30, 2011 of $310.7 million, or $2.52 per share.

Net income available for common shareholders was $85.3 million, or $0.69 per
share, for the nine months ended September 30, 2012, compared to $129.8
million, or $1.05 per share, for the same period last year. Net income
available for common shareholders for the nine months ended September 30,
2012, included a $10.6 million, or $0.09 per share, gain on sale of real
estate and was reduced by $8.0 million, or $0.06 per share, due to the
liquidation preference for HPT’s preferred shares that were redeemed during
that period exceeding the carrying value for those preferred shares. Net
income available for common shareholders for the nine months ended September
30, 2011, was reduced by a $7.3 million, or $0.06 per share, loss on asset
impairment.

The weighted average number of common shares outstanding was 123.6 million and
123.5 million for the nine months ended September 30, 2012 and 2011,
respectively.

A reconciliation of net income available for common shareholders determined
according to GAAP to FFO and Normalized FFO for the nine months ended
September 30, 2012 and 2011 appears later in this press release.

Hotel Portfolio Performance:

For the quarter ended September 30, 2012 compared to the same period in 2011
for HPT’s 285 comparable hotels: average daily rate, or ADR, increased 6.1% to
$99.14; occupancy decreased 4.3 percentage points to 72.8%; and, as a result,
revenue per available room, or RevPAR, increased by 0.2% to $72.17.

During the quarter ended September 30, 2012, HPT had 27 hotels under
renovation for all or part of the quarter. In addition, as discussed below,
HPT rebranded 35 hotels during the quarter ended September 30, 2012. For the
quarter ended September 30, 2012 compared to the same period in 2011 for HPT’s
223 comparable hotels not under renovation and not rebranded during the
quarter: ADR increased 5.8% to $102.68; occupancy decreased 1.2 percentage
points to 75.1%; and, as a result, RevPAR increased by 4.1% to $77.11.

For the nine months ended September 30, 2012 compared to the same period in
2011 for HPT’s 285 comparable hotels: ADR increased 6.0% to $99.34; occupancy
decreased 4.1 percentage points to 69.7%; and, as a result RevPAR increased by
0.1% to $69.24.

During the nine months ended September 30, 2012, HPT had 123 hotels under
renovation for all or part of the period. In addition, as discussed below, HPT
rebranded 39 hotels during the nine months ended September 30, 2012. For the
nine months ended September 30, 2012 compared to the same period in 2011 for
HPT’s 123 comparable hotels not under renovation and not rebranded during the
period: ADR increased 4.2% to $107.84; occupancy increased 0.7 percentage
points to 71.2%; and, as a result, RevPAR increased by 5.2% to $76.78.

Tenants and Managers:

Marriott No. 234. During the three months ended September 30, 2012, the
payments HPT received under its management contract with Marriott
International, Inc. (NYSE: MAR), or Marriott, covering 68 hotels and requiring
minimum returns to HPT of $100.6 million per year (referred to as the Marriott
No. 234 agreement) were $2.3 million less than the minimum amounts
contractually required. During the three months ended September 30, 2012,
Marriott was not required to make any guaranty payments to HPT because the
payments HPT received were in excess of the guaranty threshold amount (90% of
the minimum returns due to HPT). During the three months ended September 30,
2012, the amount available under Marriott’s guaranty was replenished by the
$0.4 million of hotel cash flows in excess of the guaranty threshold. At
September 30, 2012, there was $30.9 million remaining under Marriott’s
guaranty to cover future payment shortfalls for up to 90% of the minimum
returns due to HPT.

InterContinental. During the three months ended September 30, 2012, the
payments HPT received under its management contract with InterContinental
Hotels Group, plc (LON: IHG; NYSE: IHG (ADRs)), or InterContinental, covering
91 hotels and requiring minimum returns to HPT of $131.7 million per year
(referred to as the InterContinental agreement) were $2.7 million less than
the minimum amounts contractually required. HPT applied the available security
deposit to cover these shortfalls. At September 30, 2012, the available
security deposit which HPT held to cover future payment shortfalls was $38.3
million.

As of September 30, 2012, all other payments due to HPT from its managers and
tenants under its operating agreements were current.

Acquisition, Disposition and Rebranding Activities:

Marriott No. 234. As previously announced, in July 2012, HPT sold a full
service Marriott hotel in St. Louis, MO. HPT received net proceeds of $28.9
million from this sale and HPT’s annual minimum returns under the Marriott No.
234 agreement were decreased by $2.6 million when this hotel was sold. Also as
previously announced, in August 2012, HPT removed two hotels from the Marriott
No. 234 agreement and converted these two hotels to Sonesta International
Hotels Corporation, or Sonesta, brands and management. HPT’s annual minimum
returns under the Marriott No. 234 agreement were reduced by $1.0 million when
these two hotels were removed.

InterContinental. During the third quarter of 2012, HPT completed its
previously announced plan to remove 39 hotels from the InterContinental
agreement. HPT entered into management agreements with Sonesta during the
second and third quarters and converted 17 of these 39 hotels to Sonesta
brands and management. In May 2012, HPT entered into an agreement with Wyndham
Hotel Group, or Wyndham, a member of the Wyndham Worldwide Corporation (NYSE:
WYN), for 20 of these 39 hotels (referred to as the Wyndham agreement). HPT
converted these 20 hotels to Wyndham brands and management on August 1, 2012.
In August 2012, HPT sold the remaining two of the 39 removed hotels for
combined net proceeds of $5.4 million. HPT’s annual minimum returns due under
the InterContinental agreement decreased by an aggregate of $35.0 million upon
the removal of these 39 hotels.

Wyndham. As described above, in May 2012, HPT entered an agreement to convert
20 of its hotels to Wyndham brands and management. All 20 hotels are being
managed by Wyndham under a long term management contract with an initial term
of 25 years and two renewal terms of 15 years each. Under the terms of the
Wyndham agreement, Wyndham has agreed to pay HPT an annual minimum return from
the operating results of these hotels, and such payment is partially
guaranteed by Wyndham. HPT has agreed to provide up to $75.0 million for
refurbishment and rebranding of these hotels to “Wyndham Hotels and Resorts”
(four hotels) and “Hawthorn Suites by Wyndham” (16 hotels) brand standards. As
these amounts are funded, the annual minimum return due to HPT under the
Wyndham agreement will increase by 8% of the amounts funded.

On November 1, 2012, HPT acquired the Hotel 71, a full service hotel in
Chicago, IL for $85.0 million, excluding closing costs, and added it to its
Wyndham agreement. Upon completion of a planned renovation, the property will
consist of 348 hotel rooms managed by Wyndham and 48 vacation units leased to
Wyndham Vacation Resorts, Inc., also a member of Wyndham Worldwide
Corporation. HPT’s annual minimum returns under the Wyndham agreement
increased by $5.8 million and the maximum amount of the limited guaranty
provided by Wyndham increased to $29.0 million upon closing of this hotel
acquisition. The lease with Wyndham Vacation Resorts, Inc. will provide for
annual initial rent to HPT of $1.0 million subject to annual escalation and is
guaranteed by Wyndham under an unlimited guarantee. HPT plans to convert this
hotel to the “Wyndham Grand Chicago Riverfront” hotel and has agreed to
provide up to $18.0 million for the rebranding and renovation of this hotel.
As these amounts are funded, the annual minimum return due to HPT under the
Wyndham agreement will increase by 8% of the amounts funded.

Recent Financing Activities:

In August 2012, HPT issued $500.0 million of 5.0% unsecured senior notes due
in 2022 in a public offering. Net proceeds from this offering ($487.9 million
after underwriting and other offering expenses) were used to redeem at par
plus accrued and unpaid interest all of HPT’s outstanding 6.75% Senior Notes
due 2013 (approximately $288.3 million in total), to redeem 6,000,000 of its
7% Series C cumulative redeemable preferred shares for $25.00 per share plus
accrued and unpaid distributions (approximately $150.8 million in total) and
for general business purposes.

Conference Call:

On Tuesday, November 6, 2012, at 1:00 p.m. Eastern Time, John Murray,
President and Chief Operating Officer, and Mark Kleifges, Treasurer and Chief
Financial Officer, will host a conference call to discuss the results for the
quarter and nine months ended September 30, 2012. The conference call
telephone number is (800) 230-1059. Participants calling from outside the
United States and Canada should dial (612) 234-9959. No passcode is necessary
to access the call from either number. Participants should dial in about 15
minutes prior to the scheduled start of the call. A replay of the conference
call will be available beginning on Tuesday, November 6, 2012 and will run
through Tuesday, November 13, 2012. To hear the replay, dial (320) 365-3844.
The replay passcode is 260117.

A live audio webcast of the conference call will also be available in a listen
only mode on our website, which is located at www.hptreit.com. Participants
wanting to access the webcast should visit our website about five minutes
before the call. The archived webcast will be available for replay on HPT’s
website for about one week after the call.

The recording and retransmission in any way ofHPT’s third quarter conference
call is strictly prohibited without the prior written consent of HPT.

Supplemental Data:

A copy of HPT’s Third Quarter 2012 Supplemental Operating and Financial Data
is available for download at HPT’s website, www.hptreit.com. HPT’s website is
not incorporated as part of this press release.

Hospitality Properties Trust is a real estate investment trust, or REIT, which
as of September 30, 2012, owned or leased 287 hotels and 185 travel centers
located in 44 states, Puerto Rico and Canada. HPT is headquartered in Newton,
MA.

Please see the following pages for a more detailed statement of HPT’s
operating results and financial condition and for an explanation of our
calculation of FFO and Normalized FFO.

                                                          
                                                                     
Hospitality Properties Trust
CONDENSED CONSOLIDATED STATEMENTS OF INCOME, FUNDS FROM OPERATIONS
AND NORMALIZED FUNDS FROM OPERATIONS
(in thousands, except per share data)
(Unaudited)
                                                                     
                    Quarter Ended September        Nine Months Ended September
                    30,                            30,
                    2012            2011           2012            2011
Revenues:
Hotel operating     $  251,722      $ 242,995      $ 741,775       $ 670,867
revenues ^(1)
Rental income          73,915         72,305         220,863         230,078
^(1)
FF&E reserve          4,431         3,389         12,033         13,537
income ^(2)
Total revenues        330,068       318,689       974,671        914,482
                                                                     
Expenses:
Hotel operating        184,566        168,278        527,806         450,845
expenses ^(1)
Depreciation
and                    66,566         57,106         192,206         171,050
amortization
General and            10,336         11,292         32,333          30,746
administrative
Acquisition
related costs          84             387            1,648           1,150
^(3)
Loss on asset         -             -             889            7,263
impairment ^(4)
Total expenses        261,552       237,063       754,882        661,054
                                                                     
Operating              68,516         81,626         219,789         253,428
income
                                                                     
Interest income        116            11             233             54
Interest
expense
(including
amortization of
deferred
financing costs
and debt
discounts of
$1,694,
$1,614, $4,648
and $4,623,            (34,854)       (33,513)       (101,660)       (100,183)
respectively)
Gain on sale of
real estate ^          10,602         -              10,602          -
(5)
Equity in
earnings of an        115           28            236            111
investee
Income before          44,495         48,152         129,200         153,410
income taxes
Income tax
benefit               163           (621)         (3,908)        (1,188)
(expense)
Net income             44,658         47,531         125,292         152,222
Excess of
liquidation
preference over
carrying value
of preferred
shares redeemed        (5,040)        -              (7,984)         -
^ (6)
Preferred             (10,138)      (7,470)       (32,048)       (22,410)
distributions
Net income
available for       $  29,480       $ 40,061       $ 85,260        $ 129,812
common
shareholders
                                                     
                                                                     
Calculation of
Funds from
Operations
(FFO) and
Normalized FFO:
                                                                     
Net income
available for       $  29,480       $ 40,061       $ 85,260        $ 129,812
common
shareholders
Add:
Depreciation           66,566         57,106         192,206         171,050
and
amortization
Loss on asset          -              -              889             7,263
impairment ^(4)
Gain on sale of       (10,602)      -             (10,602)       -
real estate^(5)
FFO ^(7)               85,444         97,167         267,753         308,125
Add: Deferred
percentage rent
^(8)
Acquisition
related costs          919            481            3,481           1,417
^(3)
Excess of
liquidation            84             387            1,648           1,150
preference over
carrying value
of preferred
shares redeemed       5,040         -             7,984          -
^ (6)
Normalized FFO      $  91,487       $ 98,035       $ 280,866       $ 310,692
^(7)
                                                                     
                                                                     
Weighted
average common        123,577       123,465       123,553        123,453
shares
outstanding
                                                                     
Per common
share amounts:
Net income
available for       $  0.24         $ 0.32         $ 0.69          $ 1.05
common
shareholders
FFO ^(7)            $  0.69         $ 0.79         $ 2.17          $ 2.50
Normalized FFO      $  0.74         $ 0.79         $ 2.27          $ 2.52
^(7)
                                                                     

        At September 30, 2012, we owned or leased 287 hotels; 231 of these
        hotels are leased by us to our taxable REIT subsidiaries, or TRSs, and
        managed by third party hotel operating companies, one hotel is leased
        by one of our TRSs from a third party and managed by a third party
        hotel operating company and 55 hotels are leased to third parties. At
        September 30, 2012, we also owned 185 travel centers that are leased
        to a travel center operating company under two lease agreements. Our
        Condensed Consolidated Statements of Income include hotel operating
        revenues and expenses of managed hotels and rental income from our
        leased hotels and travel centers. Certain of our managed hotel
        portfolios had net operating results that were, in the aggregate,
        $20,300 and $6,653, less than the minimum returns due to us in the
(1)   three months ended September 30, 2012 and 2011, respectively, and
        $46,697 and $37,875 less than the minimum returns due to us in the
        nine months ended September 30, 2012 and 2011, respectively. When the
        shortfalls are funded by the managers of these hotels under the terms
        of our operating agreements, we reflect such fundings (including
        security deposit applications) in our Condensed Consolidated
        Statements of Income as a reduction of hotel operating expenses. The
        reduction to operating expenses was $12,791 and $6,653 in the three
        months ended September 30, 2012 and 2011, respectively, and $30,483
        and $37,875 in the nine months ended September 30, 2012 and 2011,
        respectively. We had $9,840 and $16,210 of shortfalls not funded by
        managers during the three and nine months ended September 30, 2012,
        respectively, which represents the unguaranteed portion of our minimum
        returns from Marriott and from Sonesta.
        
        Various percentages of total sales at certain of our hotels are
        escrowed as reserves for future renovations or refurbishment, or FF&E
        reserve escrows. We own all the FF&E reserve escrows for our hotels.
(2)     We report deposits by our third party tenants into the escrow accounts
        as FF&E reserve income. We do not report the amounts which are
        escrowed as FF&E reserves for our managed hotels as FF&E reserve
        income.
        
(3)     Represents costs associated with our hotel acquisition activities.
        
        We recorded an $889, or $0.01 per share, loss on asset impairment in
        the first quarter of 2012 in connection with our decision to remove 20
(4)     Marriott branded hotels from held for sale status. We recorded a
        $7,263, or $0.06 per share, loss on asset impairment in the second
        quarter of 2011 in connection with our consideration of selling
        certain InterContinental and Marriott hotels.
        
        We recorded a $10,602, or $0.09 per share, gain on sale of real estate
(5)     in the third quarter of 2012 in connection with the sales of our
        Marriott hotel in St. Louis, MO and our Staybridge Suites hotels in
        Auburn Hills, MI and Schaumburg, IL.
        
        On February 13, 2012, we redeemed all of our outstanding Series B
        Preferred Shares at their liquidation preference of $25 per share,
        plus accumulated and unpaid distributions. The liquidation preference
        of the redeemed shares exceeded our carrying amount for the redeemed
        shares as of the date of redemption by $2,944, or $0.02 per share, and
        we reduced net income available to common shareholders for the three
(6)     months ended March 31, 2012, by that excess amount. On September 10,
        2012, we redeemed 6,000,000 of our Series C Preferred Shares at their
        liquidation preference of $25 per share, plus accumulated and unpaid
        distributions. The liquidation preference of the redeemed shares
        exceeded our carrying amount for the redeemed shares as of the date of
        redemption by $5,040, or $0.04 per share, and we reduced net income
        available to common shareholders for the three months ended September
        30, 2012, by that excess amount.
        
        We calculate FFO and Normalized FFO as shown above. FFO is calculated
        on the basis defined by The National Association of Real Estate
        Investment Trusts, or NAREIT, which is net income, calculated in
        accordance with GAAP, excluding any gain or loss on sale of properties
        and impairment of assets, plus real estate depreciation and
        amortization, as well as other adjustments currently not applicable to
        us. Our calculation of Normalized FFO differs from NAREIT’s definition
        of FFO because we include estimated percentage rent in the period to
        which it relates to rather than when it is recognized as income in
        accordance with GAAP and exclude excess of liquidation preference over
        carrying value of preferred shares and acquisition related costs. We
        consider FFO and Normalized FFO to be appropriate measures of
        performance for a REIT, along with net income, operating income and
        cash flow from operating, investing and financing activities. We
        believe that FFO and Normalized FFO provide useful information to
        investors because by excluding the effects of certain historical
        amounts, such as depreciation expense, FFO and Normalized FFO can
        facilitate a comparison of operating performances between periods. FFO
        and Normalized FFO are among the factors considered by our Board of
(7)     Trustees when determining the amount of distributions to our
        shareholders. Other factors include, but are not limited to,
        requirements to maintain our status as a REIT, limitations in our
        revolving credit facility, term loan and public debt covenants, the
        availability of debt and equity capital to us and our expectation of
        our future capital requirements and operating performance. FFO and
        Normalized FFO do not represent cash generated by operating activities
        in accordance with GAAP and should not be considered as alternatives
        to net income, operating income or cash flow from operating
        activities, determined in accordance with GAAP, or as indicators of
        our financial performance or liquidity, nor are these measures
        necessarily indicative of sufficient cash flow to fund all of our
        needs. We believe FFO and Normalized FFO may facilitate an
        understanding of our consolidated historical operating results. These
        measures should be considered in conjunction with net income,
        operating income, net income available to common shareholders and cash
        flow from operating activities as presented in our Condensed
        Consolidated Statements of Income and Comprehensive Income and
        Condensed Consolidated Statements of Cash Flows. Other REITs and real
        estate companies may calculate FFO and Normalized FFO differently than
        we do.
        
        In calculating net income in accordance with GAAP, we recognize
        percentage rental income received for the first, second and third
        quarters in the fourth quarter, which is when all contingencies have
        been met and the income is earned. Although we defer recognition of
(8)     this revenue until the fourth quarter for purposes of calculating net
        income, we include these estimated amounts in the calculation of
        Normalized FFO for each quarter of the year. The fourth quarter
        Normalized FFO calculation excludes the amounts recognized during the
        first three quarters.

                                                              
                                                                  
Hospitality Properties Trust
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
                                                                  
                                               September 30,    December 31,
                                                2012              2011
ASSETS
                                                                  
Real estate properties:
Land                                          $ 1,412,945       $ 1,360,773
Buildings, improvements and equipment          5,184,527       4,879,908  
                                                6,597,472         6,240,681
Accumulated depreciation                       (1,501,592  )    (1,367,868 )
                                                5,095,880         4,872,813
                                                                  
Property held for sale                          -                 18,440
Cash and cash equivalents                       17,124            8,303
Restricted cash (FF&E reserve escrow)           38,919            50,196
Other assets, net                              221,009         183,821    
                                              $ 5,372,932      $ 5,133,573  
                                                                  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                  
Unsecured revolving credit facility           $ -               $ 149,000
Unsecured term loan                             400,000           -
Senior notes, net of discounts                  1,993,387         1,887,891
Convertible senior notes, net of discounts      8,478             78,823
Security deposits                               88,952            106,422
Accounts payable and other liabilities          88,100            103,668
Due to related persons                          12,354            3,713
Dividends payable                              6,664           4,754      
Total liabilities                              2,597,935       2,334,271  
                                                                  
Commitments and contingencies
                                                                  
Shareholders’ equity:
Preferred shares of beneficial interest; no
par value; 100,000,000
shares authorized:
Series B preferred shares; 8 7/8% cumulative
redeemable; zero and 3,450,000 shares issued
and outstanding, respectively,
aggregate liquidation preference zero and       -                 83,306
$86,250, respectively
Series C preferred shares; 7% cumulative
redeemable; 6,700,000
and 12,700,000 shares issued and outstanding,
respectively,
aggregate liquidation preference $167,500 and   161,873           306,833
$317,500, respectively
Series D preferred shares; 7 1/8% cumulative
redeemable;
11,600,000 and zero shares issued and
outstanding, respectively
aggregate liquidation preference $290,000 and   280,107           -
zero, respectively
Common shares of beneficial interest, $.01
par value;
200,000,000 shares authorized; 123,563,407
and
123,521,535 shares issued and outstanding,      1,236             1,235
respectively
Additional paid in capital                      3,466,066         3,463,534
Cumulative net income                           2,350,261         2,232,953
Cumulative other comprehensive income           4,455             1,605
Cumulative preferred distributions              (245,329    )     (213,281   )
Cumulative common distributions                (3,243,672  )    (3,076,883 )
Total shareholders’ equity                     2,774,997       2,799,302  
                                              $ 5,372,932      $ 5,133,573  
                                                                             

                WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER HPT USES WORDS SUCH AS
“BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR
EXPRESSIONS, HPT IS MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING
STATEMENTS ARE BASED UPON HPT’S PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT
FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY
THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FOR EXAMPLE:

  *THIS PRESS RELEASE STATES THAT $30.9 MILLION REMAINED AS OF SEPTEMBER 30,
    2012, TO PARTIALLY FUND MINIMUM PAYMENT SHORTFALLS UNDER THE TERMS OF A
    LIMITED GUARANTY PROVIDED BY MARRIOTT. THIS STATEMENT MAY IMPLY THAT
    MARRIOTT WILL BE ABLE OR WILLING TO FULFILL ITS OBLIGATION UNDER THIS
    GUARANTY OR THAT FUTURE SHORTFALLS WILL NOT EXHAUST THE GUARANTY CAP.
    HOWEVER, THIS GUARANTY EXPIRES ON DECEMBER 31, 2019, AND HPT CAN PROVIDE
    NO ASSURANCE WITH REGARD TO MARRIOTT’S FUTURE ACTIONS OR THE FUTURE
    PERFORMANCE OF HPT’S HOTELS TO WHICH THE MARRIOTT LIMITED GUARANTY
    APPLIES.
  *THIS PRESS RELEASE STATES THAT HPT IS HOLDING AND HAS APPLIED OR MAY
    CONTINUE TO APPLY A SECURITY DEPOSIT TO COVER THE SHORTFALL OF THE
    PAYMENTS IT HAS RECEIVED OR EXPECTS TO RECEIVE UNDER ITS INTERCONTINENTAL
    AGREEMENT COMPARED TO THE MINIMUM PAYMENTS DUE TO HPT UNDER THIS
    AGREEMENT. THE SECURITY DEPOSIT WHICH HPT IS HOLDING IS LIMITED IN AMOUNT.
    THERE CAN BE NO ASSURANCE REGARDING THE AMOUNT OF PAYMENTS HPT MAY RECEIVE
    IN THE FUTURE UNDER THIS AGREEMENT AND FUTURE SHORTFALLS MAY EXCEED THE
    AMOUNT OF THE SECURITY DEPOSIT HPT HOLDS. MOREOVER, THE SECURITY DEPOSIT
    IS NOT ESCROWED OR OTHERWISE SEGREGATED FROM HPT’S OTHER ASSETS AND
    LIABILITIES; ACCORDINGLY, WHEN HPT APPLIES THIS SECURITY DEPOSIT TO COVER
    MINIMUM PAYMENTS DUE, HPT WILL RECORD INCOME BUT IT WILL NOT RECEIVE ANY
    ADDITIONAL CASH.
  *THIS PRESS RELEASE STATES THAT WYNDHAM HAS AGREED TO PAY HPT AN ANNUAL
    MINIMUM RETURN AND THAT THE PAYMENT OF THESE AMOUNTS IS PARTIALLY
    GUARANTEED BY WYNDHAM. THE ANNUAL MINIMUM RETURN DUE TO HPT IS PAID FROM
    THE OPERATING CASH FLOW OF THE MANAGED HOTELS; IF THE CASH FLOW IS
    INSUFFICIENT TO PAY THE HOTELS’ OPERATING EXPENSES, THE ANNUAL MINIMUM
    RETURN MAY NOT BE PAID. WYNDHAM’S GUARANTEE IS LIMITED BY TIME TO ANNUAL
    MINIMUM RETURN PAYMENTS DUE THROUGH 2019, AND IT IS LIMITED TO NET
    PAYMENTS FROM WYNDHAM OF $29.0 MILLION (AND IT IS SUBJECT TO AN ANNUAL
    PAYMENT LIMIT OF $14.5 MILLION). ACCORDINGLY, THE FULL AMOUNT OF THE
    ANNUAL MINIMUM RETURN IS NOT GUARANTEED, THERE WILL BE NO GUARANTEE AFTER
    2019 AND THERE IS NO GUARANTEE OF PAYMENTS BY WYNDHAM IN EXCESS OF $29.0
    MILLION (OR $14.5 MILLION PER YEAR). FOR THESE REASONS, THERE IS NO
    ASSURANCE THAT HPT WILL RECEIVE THE ANNUAL MINIMUM RETURN DURING THE TERM
    OF ITS WYNDHAM AGREEMENT.

THE INFORMATION CONTAINED IN HPT’S FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION, OR SEC, INCLUDING UNDER “RISK FACTORS” IN HPT’S PERIODIC REPORTS,
OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE
HPT’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED IN HPT’S FORWARD
LOOKING STATEMENTS. HPT’S FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S
WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON HPT’S FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, HPT DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD
LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

A Maryland Real Estate Investment Trust with transferable shares of beneficial
               interest listed on the New York Stock Exchange.
    No shareholder, Trustee or officer is personally liable for any act or
                           obligation of the Trust.

Contact:

Hospitality Properties Trust
Timothy A. Bonang, 617-796-8232
Vice President, Investor Relations
or
Carlynn Finn, 617-796-8232
Senior Manager, Investor Relations
www.hptreit.com