HPT Announces Second Quarter 2002 Operating Results

August 6, 2002

Newton, MA (August 5, 2002): Hospitality Properties Trust (NYSE:HPT) today announced its results of operations for the quarter ended June 30, 2002:

            (amounts in thousands, except per share data)

                                   Quarter Ended    Six Months Ended
                                       June 30,           June 30,
                                    2002     2001      2002      2001

Net income                       $35,490  $31,428   $68,821   $61,516

Net income available for common
 shareholders                    $33,709  $29,647   $65,258   $57,953

Funds from operations ("FFO")    $62,495  $57,393  $121,882  $113,391
Cash available for distribution
 ("CAD")                         $52,912  $47,094  $103,636   $93,771

Common distributions declared    $45,034  $40,120   $89,436   $79,675

Per common share amounts:

   Net income available for
    common shareholders            $0.54    $0.52     $1.04     $1.03

   Funds from operations ("FFO")   $1.00    $1.02     $1.95     $2.01

   Cash available for
    distribution ("CAD")           $0.85    $0.83     $1.66     $1.66

   Common distributions            $0.72    $0.71     $1.43     $1.41

   Weighted average common shares
    outstanding                   62,538   56,507    62,529    56,501

Hospitality Properties Trust is a real estate investment trust, or REIT, headquartered in Newton, Massachusetts, which invests in hotels. HPT currently has investments of approximately $2.7 billion in 251 hotels located in 37 states.

                     Hospitality Properties Trust
        CONSOLIDATED STATEMENT OF INCOME, FUNDS FROM OPERATIONS
                  AND CASH AVAILABLE FOR DISTRIBUTION
             (amounts in thousands, except per share data)

                                   Quarter Ended      Six Months Ended
                                     June 30,              June 30,
                                 2002       2001       2002       2001
Revenues:
 Rental income               $ 62,082   $ 60,114   $120,429   $119,516
 Hotel operating revenues (1)  20,310      2,783     38,449      2,783
 FF&E reserve income (2)        5,669      7,145     10,935     13,554
 Interest income                   54         97        236        459
  Total revenues               88,115     70,139    170,049    136,312

Expenses:
 Hotel operating expenses (1)  13,229      1,855     24,398      1,855
 Interest (including
  amortization of
  deferred financing
  costs of $718, $604,
  $1,323 and $1,207,
  respectively)                11,066     10,520     21,113     20,706
 Depreciation and
  amortization                 24,186     22,491     47,920     44,629
 General and
  administrative                4,144      3,845      7,797      7,606

  Total expenses               52,625     38,711    101,228     74,796

Net income                     35,490     31,428     68,821     61,516

Preferred distributions         1,781      1,781      3,563      3,563

Net income available
 for common shareholders     $ 33,709   $ 29,647   $ 65,258   $ 57,953


Net income available
 for common shareholders     $ 33,709   $ 29,647   $ 65,258   $ 57,953
Add: FF&E deposits not
      in net income (2)         3,959      3,967      7,398      7,826
     Depreciation and
      amortization             24,186     22,491     47,920     44,629
     Deferred percentage
      rent (3)                    641      1,288      1,306      2,983

Funds from
 operations ("FFO")          $ 62,495   $ 57,393   $121,882   $113,391


FFO                          $ 62,495   $ 57,393   $121,882   $113,391
Add: Non-cash expenses          1,099        949      2,084      1,896

Less: FF&E reserves
       income (1) (2)           6,723      7,281     12,932     13,690
      FF&E deposits not
       in net income (2)        3,959      3,967      7,398      7,826

Cash available for
 distribution ("CAD")        $ 52,912   $ 47,094   $103,636   $ 93,771


Weighted average common
 shares outstanding            62,538     56,507     62,529     56,501

Per common share amounts:

  Net income available
   for common shareholders   $   0.54   $   0.52   $   1.04   $   1.03

  FFO                        $   1.00   $   1.02   $   1.95   $   2.01

  CAD                        $   0.85   $   0.83   $   1.66   $   1.66

  Common distributions
   declared                  $   0.72   $   0.71   $   1.43   $   1.41

(1) All of our hotels are leased to or operated by third-parties; HPT does not operate hotels. At various times during 2001, 16 of our hotels, containing 2,380 rooms, began to be operated by Marriott International under a long-term management contract; most of these hotels were previously leased to Marriott. These hotels are now leased to a 100% subsidiary of ours, as allowed by the REIT Modernization Act which became effective in 2001. Although our long-term management contract with Marriott includes security features which are similar to those under our leases, after a property begins to be operated under a management contract rather than under a lease, our consolidated revenues include hotel sales rather than rental income and our expenses include hotel operating expenses. We have agreed to this new arrangement for a total of 35 hotels, containing 5,382 rooms and expect it to begin for the remaining 19 hotels from time to time over the next two years, but no later than June 30, 2004. The amounts in the following table include the net revenues over expenses and FF&E escrows of the ten hotels leased to our subsidiary tenant beginning June 15, 2001, for the 2001 periods and, of the 16 hotels leased to our subsidiary tenant for the entire period for the 2002 periods. During the quarter and six months ended June 30, 2002, $720 and $2,315, respectively, of hotel operating expenses were funded by Marriott and are reflected as a reduction in hotel operating expenses.

                                   Quarter Ended     Six Months Ended
                                     June 30,            June 30,
                                  2002      2001      2002      2001

Hotel operating revenues        $20,310   $ 2,783   $38,449   $ 2,783
  Less:  Hotel operating
   expenses                      13,229     1,855    24,398     1,855
  Net payments by our manager
    to our subsidiary tenant      7,081       928    14,051       928
  Less: Payments made into
   FF&E Reserve escrows           1,054       136     1,997       136
Net                             $ 6,027   $   792   $12,054   $   792

(2) Some of the HPT leases provide that FF&E Reserve escrows are owned by HPT. Other leases provide that FF&E Reserve escrows are owned by the tenant and HPT has a security and remainder interest in the escrow account. When HPT owns the escrow, generally accepted accounting principles require that payments into the escrow be reported as additional rent. When HPT has a security and remainder interest in the escrow account, deposits are not included in revenue but are included in FFO. CAD excludes all FF&E Reserves.

(3) HPT recognizes percentage rental income received for the first, second and third quarters in the fourth quarter. Although recognition of revenue is deferred for purposes of calculating net income, the calculations of FFO and CAD include amounts received with respect to the periods shown.

                     Hospitality Properties Trust
                      Key Property Statistics (1)


(33,759 rooms          Second Quarter               Year to Date
and 247 hotels)    2002     2001   Change      2002     2001    Change

Average Daily Rate
 ("ADR")         $ 79.70  $ 88.21   -9.6%    $ 80.60   $ 89.13   -9.6%

Occupancy          75.8%    76.0%   -0.3%      72.6%     74.4%   -2.4%

Revenue Per
 Available Room
 ("RevPAR")      $ 60.41  $ 67.04   -9.9%    $ 58.52   $ 66.31  -11.7%

Excludes 4 properties containing 525 rooms, not open for a full year as of January 1, 2002.

(1) Includes data for the three and six months ended June 30, except for our 125 hotels (17,926 rooms) operated by Marriott which are for the 12 and 24 week periods ended June 14, 2002 and June 15, 2001, respectively.

                     Key Balance Sheet Statistics

                                     June 30, 2002  December 31, 2001

Cash                                $      487,000     $   38,962,000

Real Estate, at cost                $2,778,761,000     $2,629,153,000

Debt:
  Floating rate -
   Credit Facility, due 2005        $   98,000,000     $         --
  Fixed rate - 8.250%
   Senior Notes, due 2005 (1)          115,000,000        115,000,000
  Fixed rate - 7.000%
   Senior Notes, due 2008              149,847,000        149,834,000
  Fixed rate - 8.500%
   Senior Notes, due 2009              150,000,000        150,000,000
  Fixed rate - 9.125%
   Senior Notes, due 2010               49,951,000         49,947,000
                                    $  562,798,000     $  464,781,000
Book Equity:
  9.5% Preferred
   (3,000,000 shares
    outstanding)                    $   72,207,000     $   72,207,000
  Common (62,547,348 and
    62,515,940 shares
    outstanding)                     1,509,756,000      1,532,312,000
                                    $1,581,963,000     $1,604,519,000

(1) On July 18, 2002, these notes were prepaid with a portion of the proceeds from our issuance of $125,000,000 of 6.85% senior notes due 2012.

Cautionary Language

The information appearing on SVC’s website includes statements which constitute forward looking statements. These forward looking statements are based upon SVC’s present intents, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur. SVC’s actual results may differ materially from those contained in SVC’s forward looking statements. The information contained in SVC’s filings with the Securities and Exchange Commission, including under “Risk Factors" and “Warnings Concerning Forward Looking Statements” in SVC’s periodic reports and other filings, identifies important factors that could cause SVC’s actual results to differ materially from those stated in SVC’s forward looking statements. SVC’s filings with the SEC are available on the SEC’s website at www.sec.gov and are also accessible on SVC’s website at the following link: SEC Filings. You should not place undue reliance upon forward looking statements.

The documents provided in this archived section are provided for historical purposes only. The information contained in each document is accurate only as of the date each document was originally issued or such earlier date stated in those documents. Except as required by law, Service Properties Trust does not undertake any obligation to update any information contained in these documents. For current information about the company, please refer to our most recent public SEC Filings.

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