Q2 2016 Investor Presentation

Hospitality Properties Trust
Q2 2016 Investor Presentation
InterContinental Yorkville, Toronto, Canada
Operator: InterContinental Hotels Group
Guest Rooms: 208

Disclaimer.
THIS PRESENTATION CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO,
WHENEVER WE USE WORDS SUCH AS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND," "PLAN,"
"ESTIMATE," OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE
FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR
EXPECTATIONS. FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT
OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR
FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. YOU SHOULD NOT PLACE
UNDUE RELIANCE UPON ANY FORWARD LOOKING STATEMENT. EXCEPT AS REQUIRED BY APPLICABLE
LAW, WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD LOOKING STATEMENT AS
A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
THIS PRESENTATION CONTAINS NON-GAAP FINANCIAL MEASURES, INCLUDING ADJUSTED EBITDAAND
NORMALIZED FUNDS FROM OPERATIONS.
2Unless otherwise noted, all data presented is as of June 30, 2016.

HPT’s high quality properties, conservative profile and secure
cash flows provide a growing and well covered dividend.
3
• Favorable market trends – lodging and travel center industry.
• Diversified portfolio of recently renovated, high quality properties.
• Long term portfolio agreements that can provide security of cash flow.
• Hotel RevPAR growth outperforming the industry.
• Ramping portfolio and external growth opportunities.
• Conservative profile. Capacity to support continued disciplined growth.

Economic growth continues. U.S. hotel industry forecasts
remain optimistic.
4STR Quarterly Hotel Review and PWC US Lodging Forecast– May 2016
Lodging Industry Forecasts
1.9% 1.9% 1.7% - 2.1% 1.9%
2.1% 1.9% 2.3% - 1.4% 2.1%
-0.1% 0.0% 0.3% - -0.7% 0.2%
4.3% 4.7% 4.4% - 4.5% 4.3%
4.2% 4.6% 4.4% - 3.7% 3.8%
May-16 May-16 May-16 - May-16 May-16
2017
PKF PWC
Source:PKF Research, PWC, STR
STR YTD PKF PWC STR
Supply 1.5%
2016
RevPAR
Updated:
1.6%
0.1%
3.1%
3.1%
Jun-16
Demand
Occupancy
Average Rate

Economic growth continues. Increasing regulation may cater to
full service travel center advantages.
5

Issue Implication
Fuel and non-fuel demand is
expected to see continued steady
growth over the next decade.
Travel centers which provide
services to professional truck
drivers from restaurants to clean
showers and bathrooms to truck
repair facilities will be in demand.
Larger full service truck stops
with ample parking, for over 180
tractor trailer trucks will have a
competitive advantage – TA’s
reservation program proves
value.

HPT is one of the most geographically diverse lodging REITs that owns hotels
and travel centers operated under recognized brands.
• $8.9 billion investment portfolio (historical investment basis(1)).
• Total of 502 properties located in 45 states, Puerto Rico and Canada.
 305 hotels with 46,347 rooms.
 197 travel centers located adjacent to the U.S. interstate highway system.
6(1) Represents historical cost of properties plus capital improvements funded by HPT less impairment writedowns, if any, and excludes capital improvements made from
FF&E reserves funded from hotel operations.
HPT Hotel Brands HPT Travel Center Brands

HPT has $5.6 billion invested in 305 full service, select service and extended
stay hotels.
7(1) Represents historical cost of properties plus capital improvements funded by HPT less impairment writedowns, if any, and excludes capital improvements made from
FF&E reserves funded from hotel operations.
Sonesta International Hotels
Corporation
33 hotels / 6,093 rooms
$1,127 million
InterContinental Hotels Group
plc
$1,678 million
Carlson Hotels
Worldwide
$210 million
Marriott International, Inc.
$1,780 million
HPT Hotel Managers
(by $ invested)
Morgans Hotel
Group
1 hotel / 372 rooms
$120 million
Global Hyatt Corporation
22 hotels / 2,724 suites
$302 million
Wyndham Hotel Group
$383 million
• 9 Hotel Management Agreements/Leases.
• HPT’s operating agreement structure reduces cash flow
volatility in a downturn and allows for upside participation in
a recovery.
• The majority of HPT’s 305 hotel properties are secured by
deposits or guarantees and have potential additional
returns based on performance.
 Six agreements covering 218 hotels feature manager
guarantees and/or security deposits that protect HPT’s
cash flow when hotel operations fail to cover minimum
rents or returns.
 Hotel management agreements provide for additional
returns to HPT based on hotel net operating income
above certain thresholds.
Unique Agreements

HPT’s 305 hotels are operated under 21 recognized brands.
Brand No. of Properties
% of
Investment
Courtyard 71 17%
Candlewood Suites 61 10%
Residence Inn 35 10%
Royal Sonesta 4 8%
Staybridge Suites 19 6%
Hyatt Place 22 5%
Wyndham 6 5%
Crowne Plaza 7 6%
Sonesta ES Suites 25 8%
Sonesta 4 4%
InterContinental 3 4%
Radisson/Country Inn/Park Plaza 11 4%
TownePlace/Spring Hill 14 2%
Marriott 2 2%
Clift Hotel 1 2%
Hawthorne Suites 16 2%
Kimpton Hotels & Restaurants 1 2%
Holiday Inn 3 1%
305 100%
8

Hospitality Properties Trust 9
InterContinental Stephen F. Austin, Austin, TX
Guest Rooms: 190

Supplemental Operating and Financial Data, March 31, 2016
Hawthorn Suites by Wyndham, Wheeling, IL
Operator: Wyndham Hotel Group
Guest Rooms: 141
10

HPT has $3.3 billion invested in 197 travel centers located along the U.S.
Interstate Highway System.
11
HPT owns or leases 148 “TA” travel centers located in 40 states.
HPT owns 49 “Petro” travel centers located in 26 states.
Seville, OH
Wilmington, IN
• TravelCenters of America operates two of the strongest travel center brands in
the industry.
• 5 Triple Net Leases.
• HPT's travel centers are part of TA’s network of 255 “TA”
and “Petro” branded travel centers in 43 states and
Canada.
• Difficult to replicate real estate located near exits along the
U.S. Interstate Highway System.
• Average site is over 25 acres with parking for 186 trucks
and 100 cars.
• Multiple diesel fuel and gasoline islands, plus a table
service restaurant (approx. 135 seats) and one or more
quick service restaurants (QSRs) at each site.(1)
• Large travel and convenience stores averaging over 5,000
square feet of interior space.
• Truck repair facilities and parts stores; the only nationwide
on the road truck repair service along the U.S. Interstate
Highway System.
(1) In total, TA operates 589 quick service restaurants (QSRs) under contracts with more than 40 national franchisors including: Arby’s®; Burger
King®; Popeye's Chicken & Biscuits®; Pizza Hut®; Starbucks Coffee®; Subway®; Taco Bell® and Wendy’s®.

The defining business characteristic of HPT remains its strong
operating agreement terms.
• Portfolio Agreements. All but two of HPT’s properties are part of a portfolio agreement. Each portfolio
agreement includes between 11 and 94 geographically diversified properties. Obligations due HPT for all
properties in each portfolio are cross guaranteed and cross defaulted. (The two standalone properties are
leased to Marriott International Inc. and Morgans Hotel Group).
• Minimum Returns and Rents. The majority of HPT’s agreements require its managers or tenants to pay
HPT fixed minimum returns or rents.
• Security Features. The majority of HPT’s agreements include security features to protect HPT’s cash
flows, including some or all of: cash security deposits; subordination of management fees to HPT’s
minimum returns/rents; and full or limited guarantees from parent companies.
• Long Term Agreements. New agreements are generally entered for 15 to 25 years. The weighted
average remaining term for HPT’s leases and operating agreements at June 30, 2016 is 15.5 years.
• High Likelihood of Contract/Lease Renewals. Renewals are permitted only for all properties in each
portfolio. Because HPT’s agreements generally represent significant percentages of its operators’ brands,
renewals are highly likely.
• FF&E Reserves. Hotel operators are generally required to escrow 5-6% of gross revenues for renovations.
12

Q2 LTM Security Features
Total/Average 14 agreements 502 46,347 $769,006 100% 1.44x 1.26x
8 brand owners
Subtotal Travel Centers 197 N/A 268,001 35% 1.64x 1.59x
TA guaranty.
14 TA No. 5 40 N/A 66,129 9% TA guaranty.
13 TA No. 4 39 N/A 49,274 6%
TA guaranty.
11 TA No. 2 39 N/A 49,817 6% 1.60x
1.63x12 TA No. 3 39 N/A 52,130
TA guaranty.
-
10 TA No. 1 40 N/A 50,651 7% TA guaranty.
9 Morgans 1 372 7,595 1% 1.07x
1.71x
Subtotal Hotels 305 46,347 501,005 65% 1.34x 1.09x
Limited guaranty provided by Hyatt.
8 Carlson 11 2,090 12,920 1% Limited guaranty provided by Carlson.
7 Hyatt 22 2,724 22,037 3% 1.45x
1.48x
-
6 Wyndham 22 3,579 28,078 4% Limited guaranty provided by Wyndham.
5 Sonesta 33 6,093 85,206 11% 1.09x
1.38x
Marriott guaranty.
4 InterContinental 94 14,403 160,338 21% Security deposit.
3 Marriott No. 5 1 356 10,116 1% 0.48x
1.34x
-
2 Marriott No. 234 68 9,120 106,243 14% Limited guaranty provided by Marriott.
1 Marriott No. 1 53 7,610 $68,472 9% 1.72x
1.33x
Agreement
No. of
Properties
No. of
Rooms
Annual Minimum
Return/Rent % of Total
1.60x
1.66x
1.38x
1.13x
0.62x
1.20x
0.68x
0.92x
1.18x
1.23x
1.20x
1.65x
1.57x
1.55x
1.56x
1.59x
7%
Coverage
(1)
79% of HPT’s total minimum rents and returns are secured by
deposits or guarantees.
13
(1) We define coverage as combined 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 us (which data is provided to us by our managers or tenants), divided by the minimum return or minimum rent payments due to us. Coverage amounts for our Sonesta, InterContinental and TA
agreements include data for periods prior to our ownership of certain hotels and travel centers.

Crowne Plaza Miami International Airport, Miami, FL
Guest Rooms: 308

Marriott Residence Inn San Antonio Downtown/Alamo Plaza, San Antonio, TX
Operator: Marriott International, Inc.
Guest Rooms: 220

• HPT travel centers’ non-fuel revenue and non-fuel gross margin
increased by .9% and 3.4% respectively versus the prior year.
• TA’s three months ended June 30, 2016 Consolidated operating
results:
 Revenue: $1.4 billion.
 Net Income: $3.5 million.
 EBITDAR: $98 million.
$0.0
$0.5
$1.0
$1.5
$2.0
2011 2012 2013 2014 2015 LTM
6/30/2016
Non-fuel Revenues
Non-fuel Revenues
HPT believes its portfolio activity and renovations have
resulted in outperformance.
16
Hotel Renovations TA’s Full Service Offering
• From 2010 through 2015, HPT completed renovations at almost
all of its 291 comparable hotels at a cost of approximately $1 billion.
• HPT’s comparable hotel portfolio Revenue Per Available Room
(“RevPAR”) growth has outperformed industry growth for the
past fourteen consecutive quarters.

Country Inn & Suites by Carlson, Sunnyvale, CA
Operator: Carlson Rezidor Hotel Group
Guest Rooms: 180

Sonesta Fort Lauderdale Beach, Fort Lauderdale, FL
Operator: Sonesta International Hotels Corp.
Guest Rooms: 240

Financial highlights.
(1) Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments, if any, necessary to recognize rental income on a straight line basis..
(2) We define coverage as combined total property level revenues minus all property level expense and FF&E reserve escrows which are not subordinated to minimum returns and minimum rent payments to us (which data is provided to us by our managers or tenants), divided by the minimum return or minimum
rent payments due to us.
(3) See exhibits hereto for a reconciliation to nearest GAAP measure.
(4) Adjusted EBITDA for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015 includes $25,920, or $0.17 per share, $5,316, or $0.04 per share, $44,880, or $0.30 per share, $8,561, or $0.06 per share, and a reversal of $205, or $0.00 per share,
respectively, of incentive management fee expense.
(In thousands except number of properties,
number of rooms and per share data.)
As of and for the three months ended
June 30,
2016 2015 Change
%
Change
Property data:
Number of properties 502 484 18
Number of rooms 46,347 44,761 1,586
Annual minimum returns and rents(1)
$ 769,006 $ 724,834 $ 44,172 6.1%
Coverage of annual minimum returns
and rents - hotels(2) 1.34x 1.28x .06x
Coverage of annual minimum returns
and rents - travel centers(2) 1.64x 1.73x -.09x
Key financial data:
Total revenues $ 550,299 $ 507,066 $ 43,233 8.5%
Adjusted EBITDA(3)(4)
$ 215,608 $ 191,059 $ 24,549 12.8%
Normalized funds from operations
(FFO)(3) $ 165,714 $ 148,139 $ 17,575 11.9%
Total Debt (book value) (5)
/Gross book
value of real estate(6) 40.8% 38.9% 1.9% 1.9 pts.
Total Debt (book value)(5)
/Annualized
Adjusted EBITDA(3)(4) 4.1x 4.1x
Per share data:
Common dividend $ 0.51 $ 0.50 $ 0.01 2.0%
Normalized FFO (3)
$ 1.09 $ 0.99 $ 0.10 10.1%
Normalized FFO payout ratio(3)
46.6% 51.1% -4.9% -4.5 pts.
(5) Debt amounts are net of unamortized discounts and certain issuance costs.
(6) Gross book value of real estate assets is real estate properties at cost, before purchase price allocations, less mpairment write-downs, if any. 19

HPT believes it will continue benefitting from hotel renovations and
travel center improvements and from overall health of the portfolio.
• HPT funded $20.4 million dollars of hotel improvements during Q2. HPT expects to fund an
additional $69 million of hotel improvements during the remainder of 2016.
• HPT funded $34.5 million dollars of travel center improvements in 2016. HPT expects to
fund an additional $58 million of travel center improvements during the remainder of 2016.
• HPT’s hotel operators anticipate full-year 2016 RevPAR growth generally in the 4 to 5%
range, and GOP margin percentage improvement of 100 to 150 basis points versus the
same period in 2015.
20

During 2016, HPT has acquired or agreed to acquire 2 full service hotels and
2 extended stay hotels.
Courtyard Guestroom Residence Inn Kitchen
• In February, HPT acquired two extended stay hotels with 262 combined suites located in Cleveland and
Westlake, OH for an aggregate purchase price of $12.0 million, excluding acquisition related 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.
• In March, HPT acquired the 221 room Kimpton Hotel Monaco hotel located in Portland, OR for $114.0
million, excluding acquisition related costs. HPT added this hotel to its management agreement with
InterContinental Hotels Group, or Intercontinental.
• In July, HPT entered into an agreement to acquire a full service hotel with 236 rooms located in
California’s Silicon Valley for a purchase price of $52 million, excluding acquisition related costs. HPT
currently expects to complete this acquisition during the fourth quarter of 2016. HPT plans to add this
hotel to its management agreement with Sonesta.
21

HPT has a conservative financial profile.
22
($ in thousands)
Book Capitalization as of June 30, 2016
Unsecured floating rate debt 630,088$
Unsecured fixed rate debt 2,871,278
Total debt 3,501,366
Shareholders equity (book value) 2,794,506
Total Book Capitalization 6,295,872$
$2,795
44%
$2,871
46%
$630
10%
Shareholders equity
Unsecured fixed rate debt
Unsecured floating rate debt

HPT has well laddered debt maturities and the capacity for
disciplined growth.
23
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2016 2017 2018 2019 2021 2022 2023 2024 2025 2026 2027
• No secured debt.
• Unsecured senior notes:
 $2,908 million as of June 30, 2016
($2,871 million net of discounts).
 All fixed rate.
• Unsecured term loan:
 $400 million.
 April 2019 maturity.
• Revolving credit facility:
 $1 billion ($232 million outstanding as of
June 30, 2016).
 July 2018 maturity plus one year
extension option.
• No derivatives, no off balance sheet liabilities
and no material adverse change clauses or
ratings triggers.
HPT Term Debt Maturities as of
June 30, 2016
($ in millions)

HPT’s high quality properties, conservative profile and secure
cash flows provide a growing and well covered dividend.
24
• Favorable market trends – lodging and travel center industry.
• Diversified portfolio of recently renovated, high quality properties.
• Long term portfolio agreements that can provide security of cash flow.
• Hotel RevPAR growth outperforming the industry.
• Ramping portfolio and external growth opportunities.
• Conservative profile. Capacity to support continued disciplined growth.

Calculation of EBITDA and Adjusted EBITDA.
25
6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 2016 2015
Net income (loss) 56,061$ 52,051$ (19,494)$ 61,185$ 83,146$ 108,112$ 124,727$
Add: Interest expense 41,698 41,586 36,980 36,628 35,836 83,284 71,290
Income tax expense 2,160 375 121 514 640 2,535 931
Depreciation and amortization 88,782 87,271 85,964 84,261 80,582 176,053 159,551
EBITDA 188,701 181,283 103,571 182,588 200,204 369,984 356,499
Add (Less): Acquisition related costs (2)
117 612 389 851 797 729 1,135
General and administrative expense paid in
common shares (3)
870 422 379 713 1,278 1,292 3,013
Estimated business management incentive fee (4)
25,920 5,316 (17,383) 8,561 (205) 31,236 8,822
Loss on distribution to common shareholders of
RMR common stock (5)
- - 36,773 - - - -
Loss on early extinguishment of debt (6)
- 70 - - - 70 -
Gain on sale of real estate (7)
- - - - (11,015) - (11,015)
Adjusted EBITDA 215,608$ 187,703$ 123,729$ 192,713$ 191,059$ 403,311$ 358,454$
(1)
(2)
(3)
(4)
(5)
(6)
(7) We recorded an $11,015 gain on sale of real estate in the second quarter of 2015 in connection with the sale of five travel centers.
Please see page 27 for definitions of EBITDA and Adjusted EBITDA and a description of why we believe the presentation of these measures provide useful information to investors. Effective with the
quarter ended June 30, 2016, we have changed our calculation of Adjusted EBITDA to no longer include adjustments for estimated percentage rent. Historically, when calculating Adjusted EBITDA, we
estimated an amount of percentage rental income for each of the first three quarters of the year and then, in the fourth quarter, excluded the amounts that had been included in the first three quarters. In
calculating net income in accordance with GAAP, we recognize percentage rental income for the full year in the fourth quarter, which is when all contingencies are met and the income is earned.
Adjusted EBITDA for historical periods has been restated to be comparable with the current period calculation.
Amounts represent the portion of business management fees that were payable in our common shares as well as equity based compensation for our trustees, our officers and certain other employees of
RMR's operating subsidiary, RMR LLC. Effective June 1, 2015, all business management fees are paid in cash.
Represents costs associated with our acquisition activities.
Amounts represent estimated incentive fees under our business management agreement calculated based on common share total return, as defined. In calculating net income in accordance with GAAP,
we recognize estimated business management incentive fee expense, if any, each quarter. Although we recognize this expense, if any, each quarter for purposes of calculating net income, we do not
include these amounts in the calculation of Adjusted EBITDA until the fourth quarter, which is when the actual incentive fee expense amount for the year, if any, is determined. Incentive fees for 2015
were paid in cash in January 2016.
We recorded a $36,773 non-cash loss on the distribution to common shareholders of RMR common stock to our shareholders in the fourth quarter of 2015 as a result of the closing price of RMR
common stock being lower than our carrying amount per share on the day we distributed RMR common stock to our shareholders.
We recorded a $70 loss on early extinguishment of debt in the first quarter of 2016 in connection with the redemption of certain senior unsecured notes.
For the Six Months Ended June 30,For the Three Months Ended,
CALCULATION OF EBITDA AND ADJUSTED EBITDA (1)
(in thousands)

Calculation of funds from operation (FFO) and Normalized FFO.
26
6/30/2016 3/31/2016 12/31/2015 9/30/2015 6/30/2015 2016 2015
Net income (loss) available for common shareholders 50,895$ 46,885$ (24,660)$ 56,019$ 77,980$ 97,780$ 114,395$
Add (Less): Depreciation and amortization 88,782 87,271 85,964 84,261 80,582 176,053 159,551
Gain on sale of real estate (2)
- - - - (11,015) - (11,015)
FFO available for common shareholders 139,677 134,156 61,304 140,280 147,547 273,833 262,931
Add (Less): Acquisition related costs (3)
117 612 389 851 797 729 1,135
25,920 5,316 (17,383) 8,561 (205) 31,236 8,822
Loss on distribution to common shareholders of
RMR common stock (5)
- - 36,773 - - - -
- 70 - - - 70 -
Normalized FFO available for common shareholders 165,714$ 140,154$ 81,083$ 149,692$ 148,139$ 305,868$ 272,888$
Weighted average shares outstanding (basic) 151,408 151,402 151,400 151,359 150,260 151,405 150,028
Weighted average shares outstanding (diluted) 151,442 151,415 151,400 151,386 150,292 151,428 150,594
Basic and diluted per share common share amounts:
Net income (loss) available for common shareholders (basic and diluted) 0.34$ 0.31$ (0.16)$ 0.37$ 0.52$ 0.65$ 0.76$
FFO available for common shareholders (basic and diluted) 0.92$ 0.89$ 0.40$ 0.93$ 0.98$ 1.81$ 1.75$
Normalized FFO available for common shareholders (basic) 1.09$ 0.93$ 0.54$ 0.99$ 0.99$ 2.02$ 1.82$
Normalized FFO available for common shareholders (diluted) 1.09$ 0.93$ 0.54$ 0.99$ 0.99$ 2.02$ 1.81$
(1)
(2)
(3)
(4)
(5)
(6)
Loss on early extinguishment of debt (6)
Estimated business management incentive fees (4)
For the Three Months Ended, For the Six Months Ended June 30,
Please see page 27 for definitions of FFO and Normalized FFO available for common shareholders and a description of why we believe the presentation of these measures provides useful information to investors regarding our
financial condition and results of operations. Effective with the quarter ended June 30, 2016, we have changed our calculation of Normalized FFO to no longer include adjustments for estimated percentage rent. Historically, when
calculating Normalized FFO, we estimated an amount of percentage rental income for each of the first three quarters of the year and then, in the fourth quarter, excluded the amounts that had been included in the first three
quarters. In calculating net income in accordance with GAAP, we recognize percentage rental income for the full year in the fourth quarter, which is when all contingencies are met and the income is earned. Normalized FFO for
historical periods has been restated to be comparable with the current period calculation.
We recorded an $11,015 gain on sale of real estate in the second quarter of 2015 in connection with the sale of five travel centers.
Represents costs associated with our acquisition activities.
Amounts represent estimated incentive fees under our business management agreement calculated based on common share total return, as defined. In calculating net income in accordance with GAAP, we recognize estimated
business management incentive fee expense, if any, each quarter. Although we recognize this expense, if any, each quarter for purposes of calculating net income, we do not include these amounts in the calculation of
Normalized FFO available for common shareholders until the fourth quarter, which is when the actual incentive fee expense amount for the year, if any, is determined. Incentive fees for 2015 were paid in cash in January 2016.
We recorded a $70 loss on early extinguishment of debt in the first quarter of 2016 in connection with the redemption of certain senior unsecured notes.
We recorded a $36,773 non-cash loss on the distribution of RMR common stock to our shareholders in the fourth quarter of 2015 as a result of the closing price of RMR common stock being lower than our carrying amount per
share on the day we distributed RMR common stock to our shareholders.
CALCULATION OF FUNDS FROM OPERATIONS (FFO) AND NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS (1)
(dollar amounts in thousands, except per share data)

Non-GAAP financial measures definitions.
27
Definition of EBITDA
We calculate EBITDA and Adjusted EBITDA as shown on page 23. We consider EBITDA and Adjusted EBITDA to be appropriate supplemental measures of our operating performance, along
with net income, net income available for common shareholders, operating income and cash flow from operating activities. We believe that EBITDA and Adjusted EBITDA provide useful
information to investors because by excluding the effects of certain historical amounts, such as interest, depreciation and amortization expense, EBITDA and Adjusted EBITDA may facilitate a
comparison of current operating performance with our past operating performance. In calculating Adjusted EBITDA, we include business management incentive fees only in the fourth quarter
versus the quarter when they are recognized as expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of our core operating performance and the
uncertainty as to whether any such business management incentive fees will ultimately be payable when all contingencies for determining any such fees are determined at the end of the
calendar year. EBITDA and Adjusted EBITDA do not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income, net
income available for common shareholders or operating income as an indicator of operating performance or as a measure of our liquidity. These measures should be considered in conjunction
with net income, net income available for common shareholders, operating income and cash flow from operating activities as presented in our condensed consolidated statements of income and
condensed consolidated statements of cash flows. Other real estate companies and REITs may calculate EBITDA and Adjusted EBITDA differently than we do.
Definition of FFO and Normalized FFO
We calculate FFO available for common shareholders and Normalized FFO available for common shareholders as shown on page 23. FFO available for common shareholders is calculated on
the basis defined by The National Association of Real Estate Investment Trusts, or NAREIT, which is net income available for common shareholders calculated in accordance with GAAP,
excluding any gain or loss on sale of properties and loss on impairment of real estate assets, plus real estate depreciation and amortization, as well as certain other adjustments currently not
applicable to us. Our calculation of Normalized FFO available for common shareholders differs from NAREIT's definition of FFO available for common shareholders because we include business
management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as expense in accordance with GAAP due to their quarterly volatility not necessarily
being indicative of our core operating performance and the uncertainty as to whether any such business management incentive fees will ultimately be payable when all contingencies for
determining any such fees are determined at the end of the calendar year and we exclude acquisition related costs, loss on distribution to common shareholders of RMR common stock and loss
on early extinguishment of debt. We consider FFO available for common shareholders and Normalized FFO available for common shareholders to be appropriate supplemental measures of
operating performance for a REIT, along with net income, net income available for common shareholders, operating income and cash flow from operating activities. We believe that FFO
available for common shareholders and Normalized FFO available for common shareholders provide useful information to investors because by excluding the effects of certain historical
amounts, such as depreciation expense, FFO available for common shareholders and Normalized FFO available for common shareholders may facilitate a comparison of our operating
performance between periods and with other REITs. FFO available for common shareholders and Normalized FFO available for common shareholders are among the factors considered by our
Board of Trustees when determining the amount of distributions to shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT,
limitations in our credit agreement and public debt covenants, the availability to us of debt and equity capital, our expectation of our future capital requirements and operating performance and
our expected needs for and availability of cash to pay our obligations. FFO available for common shareholders and Normalized FFO available for common shareholders do not represent cash
generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income, net income available for common shareholders or operating income as an
indicator of our operating performance or as a measure of our liquidity. These measures should be considered in conjunction with net income, net income available for common shareholders,
operating income and cash flow from operating activities as presented in our condensed consolidated statements of income and condensed consolidated statements of cash flows. Other real
estate companies and REITs may calculate FFO available for common shareholders and Normalized FFO available for common shareholders differently than we do.

Courtyard by Marriott, Camarillo, CA.
Guest Rooms: 130.
Sonesta Resort, Hilton Head, SC
Operator: Sonesta International Hotels Corp.
Guest Rooms: 340

Q2 2016 Investor Presentation

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