Hospitality Properties Trust Reports 2015 Q4 and Full Year Results: Comparable Hotel RevPAR Up 6.2% Year Over Year

NEWTON, Mass.–Hospitality Properties Trust (NYSE: HPT) today announced its financial results for the quarter and year ended December 31, 2015, compared to the results for the prior year comparable periods:

Three Months Ended December 31, Year Ended December 31, 2015 2014 2015 2014

($ in thousands, except per share and RevPAR data)

Net income (loss) available for common shareholders (1) $ (24,660) $ 51,357 $ 145,754 $ 176,521 Net income (loss) available for common shareholders per share (basic and diluted) (1) $ (0.16) $ 0.34 $ 0.97 $ 1.18 Adjusted EBITDA (2) $ 123,729 $ 164,247 $ 674,896 $ 661,802 Normalized FFO available for common shareholders (2) (3) $ 81,083 $ 121,458 $ 503,663 $ 493,363 Normalized FFO available for common shareholders per share (diluted) (2) (3) $ 0.54 $ 0.81 $ 3.34 $ 3.29

Portfolio Performance

Comparable hotel RevPAR $ 85.24 $ 80.23 $ 91.69 $ 84.39 Comparable hotel RevPAR growth 6.2% — 8.7% — RevPAR (all hotels) $ 84.28 $ 79.98 $ 91.42 $ 84.54 RevPAR growth (all hotels) 5.4% — 8.1% — Coverage of HPT’s minimum returns and rents for hotels 0.92x 0.83x 1.07x 0.94x (1) Net income (loss) for the quarter and year ended December 31, 2015 each includes a $36.8 million, or $0.24 per share, non-cash loss on the distribution of The RMR Group Inc. (NASDAQ: RMR) common stock to HPT’s shareholders, and a $44.9 million, or $0.30 per share, and a $62.3 million, or $0.41 per share, respectively, incentive management fee. (2) Reconciliations of net income (loss) available for common shareholders determined in accordance with U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, and Normalized FFO available for common shareholders, and net income to earnings before interest, taxes, depreciation and amortization, or EBITDA, and EBITDA as adjusted, or Adjusted EBITDA, for the quarter and years ended December 31, 2015 and 2014 appear later in this press release. (3) Normalized FFO available for the quarter ended December 31, 2015 includes a $62.3 million, or $0.41 per share, incentive management fee expense recognized in the quarter ended December 31, 2015.

John Murray, President and Chief Operating Officer of HPT, made the following statement regarding today’s announcement:

“We are pleased with the continued strong performance from our hotel and travel center portfolios this quarter. Our comparable hotel RevPAR growth of 6.2% exceeded the hotel industry’s performance for the twelfth consecutive quarter and reflected the benefits of our renovation program. HPT’s total shareholder returns during the two year period ended December 31, 2015 exceeded the total shareholder returns of the SNL REIT Hotel Index, resulting in $62.3 million of incentive management fee expense for 2015 under our business management agreement with RMR. Excluding this incentive management fee expense, HPT would have reported Normalized FFO per share growth of 17.3% and Adjusted EBITDA growth of 13.2% for the quarter.”

Results for the Three Months and Year Ended December 31, 2015 and Recent Activities:

• Net Income (Loss) Available for Common Shareholders: Net loss available for common shareholders for the quarter ended December 31, 2015 was $(24.7) million, or $(0.16) per diluted share, compared to net income available for common shareholders of $51.4 million, or $0.34 per diluted share, for the quarter ended December 31, 2014. Net loss available for common shareholders for the quarter ended December 31, 2015 includes $44.9 million, or $0.30 per share, of incentive management fee expense and a $36.8 million, or $0.24 per share, non-cash loss on the distribution of RMR common stock to HPT’s shareholders. The weighted average number of diluted common shares outstanding was 151.4 million for the quarter ended December 31, 2015 and 149.8 million for the quarter ended December 31, 2014. Net income available for common shareholders for the year ended December 31, 2015 was $145.8 million, or $0.97 per diluted share, compared to $176.5 million, or $1.18 per diluted share, for the year ended December 31, 2014. Net income available for common shareholders for the year ended December 31, 2015 includes $62.3 million, or $0.41 per share, of incentive management fee expense, a $36.8 million, or $0.24 per share, non-cash loss on the distribution of RMR common stock to HPT’s shareholders and an $11.0 million, or $0.07 per share, gain on the sale of real estate. The weighted average number of diluted common shares outstanding was 151.0 million for the year ended December 31, 2015 and 149.8 million for the year ended December 31, 2014.

• Adjusted EBITDA: Adjusted EBITDA for the quarter ended December 31, 2015 was $123.7 million compared to $164.2 million during the same period last year. Excluding the impact of the $62.3 million of incentive management fee expense, Adjusted EBITDA for the quarter ended December 31, 2015 compared to the same period in 2014 increased 13.2% to $186.0 million. Adjusted EBITDA for the year ended December 31, 2015 was $674.9 million compared to $661.8 million during the same period last year. Excluding the impact of the $62.3 million incentive management fee expense, Adjusted EBITDA for the year ended December 31, 2015 compared to the same period in 2014 increased 11.4% to $737.2 million.

• Normalized FFO available for common shareholders: Normalized FFO available for common shareholders for the quarter ended December 31, 2015 were $81.1 million, or $0.54 per diluted share, compared to Normalized FFO available for common shareholders for the quarter ended December 31, 2014 of $121.5 million, or $0.81 per diluted share. The decrease in Normalized FFO available for common shareholders per diluted share is due primarily to the impact of the $62.3 million, or $0.41 per share, of incentive management fee expense recognized in the quarter ended December 31, 2015, partially offset by the impact of HPT’s hotel and travel center acquisitions since October 1, 2014 and the increase in returns realized due to the improved operating results at certain of HPT’s hotels. Excluding the impact of the $62.3 million of incentive management fee expense, Normalized FFO available for common shareholders for the quarter ended December 31, 2015 compared to the same period in 2014 increased 18.0% to $143.3 million, or $0.95 per diluted share. Normalized FFO available for common shareholders for the year ended December 31, 2015 were $503.7 million, or $3.34 per diluted share, compared to Normalized FFO available for common shareholders for the year ended December 31, 2014 of $493.4 million, or $3.29 per diluted share. The increase in Normalized FFO available for common shareholders per diluted share is due primarily to the impact of HPT’s hotel and travel center acquisitions since January 1, 2014 and the increase in returns realized due to the improved operating results at certain of HPT’s hotels, partially offset by the impact of the $62.3 million, or $0.41 per share, of incentive management fee expense recognized in the quarter ended December 31, 2015. Excluding the impact of the $62.3 million of incentive management fee expense, Normalized FFO available for common shareholders for the year ended December 31, 2015 compared to the same period in 2014 increased 14.7% to $565.9 million, or $3.75 per diluted share.

• Comparable Hotel RevPAR: For the quarter ended December 31, 2015 compared to the same period in 2014 for HPT’s 291 hotels that it owned continuously since October 1, 2014: average daily rate, or ADR, increased 4.6% to $118.88; occupancy increased 1.1 percentage points to 71.7%; and revenue per available room, or RevPAR, increased 6.2% to $85.24. For the year ended December 31, 2015 compared to the same period in 2014 for HPT’s 290 comparable hotels that it owned continuously since January 1, 2014: ADR increased 6.8% to $120.81; occupancy increased 1.3 percentage points to 75.9%; and RevPAR increased 8.7% to $91.69.

• RevPAR (all hotels): For the quarter ended December 31, 2015 compared to the same period in 2014 for HPT’s 302 hotels: ADR increased 4.5% to $118.70; occupancy increased 0.6 percentage points to 71.0%; and RevPAR increased 5.4% to $84.28. For the year ended December 31, 2015 compared to the same period in 2014 for HPT’s 302 hotels: ADR increased 6.6% to $120.93; occupancy increased 1.1 percentage points to 75.6%; and RevPAR increased 8.1% to $91.42.

• Hotel Coverage of Minimum Returns and Rents: For the quarter ended December 31, 2015, the aggregate coverage ratio of (x) total property level revenues minus FF&E reserve escrows, if any, and all property level expenses which are not subordinated to minimum returns and minimum rent payments to HPT to (y) HPT’s minimum returns and rents due from hotels increased to 0.92x from 0.83x for the three months ended December 31, 2014. For the year ended December 31, 2015, the aggregate coverage ratio of (x) total property level revenues minus FF&E reserve escrows, if any, and all property level expenses which are not subordinated to minimum returns and minimum rent payments to HPT to (y) HPT’s minimum returns and rents due from hotels increased to 1.07x from 0.94x for the year ended December 31, 2014. As of December 31, 2015, approximately 68% of HPT’s aggregate annual minimum returns and rents from its hotels were secured by guarantees or security deposits from HPT’s managers and tenants pursuant to the terms of HPT’s hotel operating agreements.

• Recent Property Acquisition Activities: On October 30, 2015, HPT acquired the land and certain improvements at a travel center located in Waterloo, NY it leased from a third party and subleased to TravelCenters of America LLC (NYSE: TA), or TA, for $15.0 million, excluding acquisition related costs. These assets were added to HPT’s lease with TA and TA is now directly leasing these assets from HPT with rent for these assets now directly paid to HPT. On January 6, 2016, HPT agreed to acquire a full service hotel with 221 rooms located in Portland, Oregon for a purchase price of $114.0 million, excluding closing costs. HPT plans to add this hotel to its management agreement with InterContinental Hotels Group, plc (LON: IHG; NYSE: IHG (ADRs)), or InterContinental. On February 1, 2016, HPT acquired two extended stay hotels with 262 suites located in Cleveland, OH and Westlake, OH for an aggregate purchase price of $12.0 million, excluding closing costs. HPT converted these hotels to the Sonesta ES Suites® hotel brand and added them to its management agreement with Sonesta International Hotels Corporation, or Sonesta.

• Recent Financing Activities: On December 9, 2015, HPT amended the agreement governing its revolving credit and term loan facilities. Pursuant to the amendment, the maximum amount of borrowings available under HPT’s revolving credit facility increased from $750.0 million to $1.0 billion. On February 3, 2016, HPT issued $750.0 million aggregate principal amount of unsecured senior notes in underwritten public offerings, which included: $400.0 million aggregate principal amount of 4.25% unsecured senior notes due 2021 and $350.0 million aggregate principal amount of 5.25% unsecured senior notes due 2026. Net proceeds from these offerings ($732.3 million after original issue discounts and offering expenses) were used to repay amounts outstanding under HPT’s revolving credit facility and for general business purposes. On February 10, 2016, HPT gave notice that it would redeem at par plus accrued interest all $275.0 million of its 6.30% senior notes due 2016. HPT expects to complete this redemption in March 2016 using cash on hand and borrowings under its revolving credit facility.

• Distribution of RMR Common Stock: On December 14, 2015, HPT distributed to common shareholders 0.0166 shares of RMR common stock for each common share of HPT held as of the close of business on November 27, 2015. In connection with this distribution, HPT recognized a non-cash loss of $36.8 million because the closing price of RMR common stock was lower than HPT’s carrying amount per share on the day RMR common stock was distributed to HPT’s shareholders. Since the distribution date, the trading price of RMR common stock has increased. If the trading price of RMR common stock on the distribution date had been at the current increased price per share, HPT would have recognized a lesser non-cash loss on the distribution.

Tenants and Managers: As of December 31, 2015, HPT had nine operating agreements with seven hotel operating companies for 302 hotels with 45,864 rooms, which represented 66% of HPT’s total annual minimum returns and rents.

• Marriott Agreements: During the three months ended December 31, 2015, 122 hotels owned by HPT were operated by subsidiaries of Marriott International, Inc. (NASDAQ: MAR), or Marriott, under three agreements. HPT’s Marriott No. 1 agreement includes 53 hotels, and provides for annual minimum return payments to HPT of up to $68.4 million as of December 31, 2015 (approximately $17.1 million per quarter). Because there is no guarantee or security deposit for this agreement, the minimum returns HPT receives under this agreement may be limited to available hotel cash flow after payment of operating expenses and funding of the FF&E reserve. During the three months ended December 31, 2015, HPT realized returns under its Marriott No. 1 agreement of $17.1 million. HPT’s Marriott No. 234 agreement includes 68 hotels and requires annual minimum returns to HPT of $106.2 million as of December 31, 2015 (approximately $26.6 million per quarter). During the three months ended December 31, 2015, HPT realized returns under its Marriott No. 234 agreement of $26.6 million. During the three months ended December 31, 2015, HPT reduced the available security deposit by $1.1 million to cover shortfalls in hotel cash flows available to pay the returns due for the period. At December 31, 2015, the available security deposit from Marriott for the Marriott No. 234 agreement which HPT held to pay future payment shortfalls was $6.3 million and there was $30.7 million remaining under Marriott’s guaranty for up to 90% of the minimum returns due to HPT to cover future payment shortfalls after the available security deposit is depleted. HPT’s Marriott No. 5 agreement includes one resort hotel in Kauai, HI which is leased to Marriott on a full recourse basis. The contractual rent due to HPT for this hotel for the three months ended December 31, 2015 of $2.5 million was paid to HPT.
• InterContinental Agreement: During the three months ended December 31, 2015, HPT realized returns and rents of $36.8 million under its agreement with subsidiaries of InterContinental which includes 93 hotels and requires annual minimum returns/rent to HPT of $151.2 million as of December 31, 2015 (approximately $37.8 million per quarter). During the three months ended December 31, 2015, HPT replenished the available security deposit by $1.5 million from its share of hotel cash flows in excess of the returns and rents due for the period. At December 31, 2015, the available InterContinental security deposit which HPT held to pay future payment shortfalls was $47.2 million.
• Other Hotel Agreements: As of December 31, 2015, HPT’s remaining 87 hotels are operated under five agreements: one management agreement with Sonesta (31 hotels), requiring annual minimum returns of $82.3 million as of December 31, 2015 (approximately $20.6 million per quarter); one management agreement with a subsidiary of Wyndham Worldwide Corporation (NYSE: WYN), or Wyndham (22 hotels), requiring annual minimum returns of $28.0 million as of December 31, 2015 (approximately $7.0 million per quarter); one management agreement with a subsidiary of Hyatt Hotels Corporation (NYSE: H), or Hyatt (22 hotels), requiring annual minimum returns of $22.0 million as of December 31, 2015 (approximately $5.5 million per quarter); one management agreement with a subsidiary of Carlson Hotels Worldwide, or Carlson (11 hotels), requiring annual minimum returns of $12.9 million as of December 31, 2015 (approximately $3.2 million per quarter); and one lease with a subsidiary of Morgans Hotel Group Co. (NASDAQ: MHGC) (1 hotel) requiring annual minimum rent of $7.6 million as of December 31, 2015 (approximately $1.9 million per quarter). Minimum returns and rents due to HPT are partially guaranteed under the Wyndham, Hyatt and Carlson agreements. There is no guarantee or security deposit for the Sonesta agreement and the minimum returns HPT receives under that agreement are limited to available hotel cash flow after payment of operating expenses. The payments due to HPT under these agreements for the three months ended December 31, 2015 were paid to HPT.
• Travel Center Agreements: As of December 31, 2015, HPT had five leases with TA for 193 travel centers located along the U.S. Interstate Highway system requiring aggregate annual minimum rents of $257.7 million (approximately $64.4 million per quarter), which represent 34% of HPT’s total annual minimum returns and rents. As of December 31, 2015, all payments due to HPT from TA under these leases were current. For the three months ended September 30, 2015, the aggregate coverage ratio of (x) total cash flow at the leased travel centers available to pay HPT’s minimum rent due from TA to (y) HPT’s minimum rent due from TA decreased to 1.75x from 1.79x for the three months ended September 30, 2014. For the nine months ended September 30, 2015, the aggregate coverage ratio of (x) total cash flow at the leased travel centers available to pay HPT’s minimum rent due from TA to (y) HPT’s minimum rent due from TA increased to 1.80x from 1.70x for the nine months ended September 30, 2014. Coverage data for the three months and year ended December 31, 2015 for TA is currently unavailable.

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