Good day, everyone. Welcome to the Hospitality Properties Trusts Fourth Quarter 2007 Financial Results Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to the Manager of Investor Relations, Mr. Tim Bonang. Please go ahead, sir.

Thank you and good afternoon everyone. Excuse me, joining me on today's call are; John Murray, President; and Mark Kleifges; Chief Financial Officer. John and Mark will make a short presentation, which will be followed by question-and-answer session. Before we begin today's call, I would like read our Safe Harbor Statement. Today's Conference Call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Federal Securities Laws. These forward-looking statements are based on HPT's present believes and expectations as of today, February 13th, 2008. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call other then through filings with the Securities and Exchange Commission regarding this reporting period. In addition, this call may contain non-GAAP numbers including funds from operations or FFO. A reconciliation of FFO to net income is available in our supplemental package found in the Investor Relations section of the company's website. Actual results may differ materially from those projected in these forward-looking statements. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission and in our Q4 supplemental operating and financial data found on our website at www.hptreit.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. And with that, I would like to turn the call over to John Murray.

Thank you, Tim. Good afternoon, and welcome to our fourth quarter 2007 earnings call. Earlier today HPT reported FFO per share for the quarter of $1.15, which represents quarter-over-quarter FFO per share growth of approximately 15%. Fourth quarter RevPAR growth averaged 6.2% across our 292 hotels. RevPAR growth at HPT's hotels exceeded industry average growth, and was once again driven largely by REIT growth, which accounted for 84% of the RevPAR increase. Occupancy increased modestly to 68.9%. RevPAR growth this quarter benefited from strong Hyatt Place performance, double-digit growth of SpringHill Suites, strong performance from Radisson, Staybridge Suites and Courtyard hotels. Balancing these results was the performance that our Candlewood and Residence Inn extended stay hotels, which had reduced occupancies and the impact of renovation projects at several of our Crown Plaza hotels. Our hotels continue to generate strong performance versus their competitive sets during the quarter with an average RevPAR index of over 117. We believe this reflects the combination of strong locations, respective brands, attractive physical assets, and high levels of service. All these attributes should service well going forward, regardless of the economic climate. RevPAR increased across all of our portfolios except the IHG4 portfolio where we had six Crown Plaza hotels under renovation during the quarter. RevPAR was up for all brands except at our two Park Plaza hotels. Earlier this month we sold one of those Park Plaza hotels for approximately $8 million. The RevPAR increased across several brands including Candlewood Suites and Residence Inn was weaker than we would have liked. This appears to be due to lower levels of extended to stay business travel. Although three of the hotels in the Hyatt Place portfolio were under renovation during some or all of the fourth quarter. RevPAR for the portfolio was up 33% versus…

Thanks, John. During the fourth quarter RevPAR our three leased hotel portfolios increased 4.9%, profit margins increased by 150 basis points, and cash flow available to pay rent increased 9.2%. Performance this quarter for our leased hotels was led by our 53 hotel Courtyard portfolio with 6.9 % RevPAR increase and 13.7% increase in cash flow available to pay rent. RevPAR and operating profit margins at our leased hotels for the quarter were constraint by the performance of... at our Residence Inns, where RevPAR was up only 4.1% due to the higher levels of transient versus extended state business. For 2007, rent coverage ratios for our leased hotel portfolios range from 1.22 times to 1.63 times. Performance was slightly stronger during the fourth quarter for our seven managed hotel portfolios, with a RevPAR increase of 7%, a profit margin increase of 128 basis points, and 10% increase in cash flow available to pay our minimum returns. As John mentioned earlier, the Hyatt Place re-branding process is nearing completion. And as you would expect growth in the portfolios cash flow available to pay our minimum return was significant during the fourth quarter at approximately 64%. Coverage increased to 0.56 times for the quarter. While we expect coverage for this portfolio to be greater than one-times in 2008, we do not expect to earn income above our minimum return as Hyatt will retain any excess cash flow until they recover shortfalls funded during the renovation process. The strongest performance this quarter for our managed hotels was from our 31 hotels Staybridge Suites portfolio and 14 hotels InterContinental portfolio. Our Staybridge portfolio had 9.3% increase in RevPAR, 110 basis point improvement in profit margins, and 8.4% increase in cash flow available to pay on minimum return. Performance of our InterContinental portfolio was equally…

Thank you. The question-and-answer session will be conducted electronically. [Operator Instructions]. And we will take our first question from William Truelove with UBS Financial.

Hey guys. Questions about the TravelCenters, America number two. In the third... in the first quarter of 07 had only a coverage ratio of 1.04, given the trends that you continue to see in that business. Is it likely that that's going to go under one-times you think in the first quarter of this year? And if that is the case, have you had any overtures from the management teams over their at TA to talk about rent going forward? Thanks.

We don't give guidance for our own numbers. I don't want to predict on this call where we think TA's numbers are going. We have numbers up to the third quarter, which is what we included in our statistics today. But, it's clearly the economy is going through a weak phase, and we are not really seeing any statistics from the ATA or other statisticians on the transportation business that would lead us to believe that the sector is anything, but weak right now. So, we don't... we are not expecting a dramatic increase in coverage, we are... we think the current malice is going to continue. We've like... as we have said in the script, we believe that TA's will capitalize and the first and fourth quarters of the year are typically the weakest two quarters of the year for the TravelCenters business, and so, we are confident that even if there is a decline in coverage that TA can still pay the rent.

But, just to clarify have you guys had already discussions about changing the rent going forward or not?

No, we don't think there is any reason to have those discussions.

Okay, great. Thanks.

And we will take next question from David Bragg with Merrill Lynch.

Yes, good afternoon. Just another question on Travel, since it was...could you provide your take on, why the petro portfolio is underperforming the original TA portfolio?

We believe that a lot of it has to do with a different mix of customers. Travel... TA, TravelCenters of America was... had a greater rating towards fleet relationships and petro had a mix that was more balanced between fleets and independent truckers. And we believe that when the industry is... the trucking industry has been squeezed that has impacted the independent truckers more significantly than it impacts the fleets who have longer-term contracts with shipments. So... and also not only does that cause a reduction in the amount of... or the volume the large fleets that do a tremendous amount of volume can negotiate for a more competitive rates on fuel based on that margin over an index, whereas independent truckers essentially pay a more of a rack rate. And so not only is the volume down when you have less independent truckers, but your margins are impacted as well. So, I think those are the... what I believe are the two key reasons.

And could you remind me is there a... are there any key differences between the service... services that are available at those two portfolios?

I think they are fairly similar. Frankly, I think that the petro sit-down restaurant, the Iron Skillet has a, actually a better reputation in the industry for sort of in terms of trucker satisfaction if you will.

Okay. Also John, you mentioned your expectations for cap rates to rise. Could you frame that in terms of the movement, the degree of that movement?

I can tell you that where I am hopeful it will go. It's hard, I think it's going to take a while for us to tell where it really shakes out. But, I think that the talk that we have seen in the marketplace on potential deals seems to be 50 basis points to 100 basis points higher than where it was a nine months ago. And my sense is that for buyers to be more comfortable that... we would like to see it go another 100 basis points.

Okay.

So, I think we are seeing a lot of transactions in the six to eight range, and I think that we'd hope that they be in seven to nine or 7.5 to 9.5 range going forward. Obviously, it depends on transaction size and markets, hotel type and things.

Sure, and then finally on the TA side, given that there are limited transactions there as well, what sort of pricing movements have you seen recently there?

I think mostly we've only seen our own transactions there, but I don't see any reason, I mean, I would think the cap rates would remain north of 9%. We did our transactions in the 9.5% range and I think that, we're certainly not going to be buying additional properties below that.

Okay. Thank you.

[Operator Instructions]. At this time we'll go next to Smedes Rose with KBW. Smedes Rose - Keefe Bruyette & Woods: Hi, guys. You mentioned you had about $30 million of incremental profit participation in 07, that you don't expect to grow in 08, or you would less growth in 08. Can you help, just help us think about what does one point of RevPAR a change in RevPAR due to that number, that's, for us it's been a harder part of your earning story to model and it would be helpful I think, given that there is a lot of concern about growth rates and RevPAR to kind of understand the sensitivity around that?

Yes, Smedes, this is Mark. It is difficult for model. It's difficult for us to model also because 3% change in RevPAR can have a different impact on each of our seven managed portfolios depending on where you happened to be in the cash waterfall at that given time, by that I mean is the next dollar of incremental cap... it is the next dollar of incremental cash flow all go to HPT. Does it get spilt with the manager? What percentage does it get spilt at? So, I don't think it would be fair. It would just be inaccurate to give a standard answer as to what 3% change in RevPAR has. You really have to look at it portfolio-by-portfolio, and where we are in the cash waterfall, and I think those types of discussions if it's in area that you are struggling with probably best done offline where we can talk about specific portfolios and what's happening there. Smedes Rose - Keefe Bruyette & Woods: Okay. And at 3% maybe you had said that it's a, but at 3% about you're may be seeing across the portfolios for this year?

No, I think... Smedes Rose - Keefe Bruyette & Woods: I think on your last call you had mentioned 4% to 6%. Is there any update or thoughts around that?

We expect RevPAR to grow next year, and we don't expect it to grow as much as it did in 2007. But, the environments it's unclear right now, so we are not providing specific guidance. Smedes Rose - Keefe Bruyette & Woods: Okay. And then is there any update just on the I think you have about $150 million of debt coming to you in the first quarter, and also there is a preferred that I believe is callable now or is there any decisions made on either of those?

Well the decision on the150. We have 150 million of unsecured senior notes that are... were required to redeem on March 1st, so that's an easy decision. We'll be redeeming those and will likely use the revolver to do that, and we also have some perpetual preferred that became callable in December, but we have made no decision whether to call or not call that at this time. Smedes Rose - Keefe Bruyette & Woods: Yeah. Thank you.

We'll take our next question from Michael Salinsky with RBC Capital Market.

Well good morning, guys, and a follow-up to Smedes questions, can you discuss where you see pricing at right now in the end secured market, as well as the preferred market?

That's a difficult question, because it's the debt capital markets for all investments grade credits not just REITs have been pretty volatile and to be honest with you, we really haven't gone out, and tested the markets if you will to get quotes here recently, but clearly you've had spreads that continued to widen, and that's been partially offset by the continued decline in the 10 year treasury. I wouldn't be comfortable giving a specific quote, where I thought we could raise money today. The preferred REIT market, we really haven't seen any transactions in that space. I heard a rumor that someone's out today with a, a REIT is out today with a preferred transactions, so it will be interesting to see what type of pricing they get on that transaction, but the big financial services firms, the banks have really been dominating the preferred market, and I think they've squeezed out the REITs in some of the smaller issuers from a pricing standpoint.

Okay. And I think in your comments you mentioned $150 million to $175 million of improvements planned for 2008. Could you go in a little bit more detail and maybe some of the other projects you are looking at, some of the largest scale project essentially?

We have 292 hotels. So, I don't think there are any very major renovations at any one property. Perhaps, we are going to be putting some money into our Kauai Marriott for some... it's due for major renovation. We're going to be working on a spa with Marriott, but I don't think that that's going to happen because of the timing I think in Hawaii probably until may be even 2009. We're doing room renovations and public space renovations in a number of our Courtyards and Residence Inns. Marriot has come out with a new brand standard on sort of a great room style lobby, so we will be putting some money towards that. We have got one more Hyatt Place in Orlando near the airport that will be converting from AmeriSuites to Hyatt Place. We are going to spend about $25 million on TravelCenters and continuing to refresh those, focused on adding truck service bays, quick service restaurants, and making sure that the bathrooms and showers are in good condition. And I think we're going to in terms of the InterContinentals, I think we have plans to spend some more money on the San Juan InterContinental. We've done some work on some guestrooms. But, most of the money that we've spent there has been on HVAC systems, redo of their restaurants, redo of the sort of pool area. So, some of the guestrooms still need to be go through a renovation.

Okay. So, nothing along in terms of disruptions like you have with Hyatt Place this year?

No.

Okay.

No, there will be the occasional disruption here there. But, this would all be balanced out by continued strong performance by the other hotels in their portfolios.

Okay. And finally, you mentioned your marketing property in North Carolina and property in Florida, two for AmeriSuites assets, I think you mentioned you sold an additional asset. And you kind of gives us timeline of what you... can you provide us a detail on what you're marketing right now and kind of a timing on those sales?

Yes. There is AmeriSuites in Tampa in a business park called Sabal Park. It's a non-brand compliant 70ish room hotel that we have. Our acquisition cost there was around $3.5 million. That's the marketing has begun there, but we don't... we don't know exactly what the timing is going to be. I think the brokers this week and next week are taking perspective buyers through, and books are out. And there is a... on Atlantic Beach in the North Carolina there is an AmeriSuites that was built as a Sumner Suite converted to an AmeriSuites. It's just... our decision is that it's just too much of a seasonal location to be worth the magnitude of investment that it takes to become a Hyatt Place. So that too is going to marketing process. Our book value there is less than $7 million. So, it's not... those were the only two properties that we are marketing. It's just not big dollars in this game I think.

Okay, and then--

We sold the one Park Plaza, which was a former Wyndham Garden Hotel in North Phoenix for about $8 million, just a couple of weeks ago.

Great. Thanks guys.

We'll take your next question from Troy Garner with Morgan Keegan.

Hi John, Mark. I'm covering for Nap today. Had a couple of questions. On your fourth quarter G&A, were there any adjustments, true-ups or anything that would have impacted, I think it was 9.4 million in the quarter?

No, there were no real unusual... there were no unusual items in this quarter's G&A.

Is that a pretty good run rate going forward?

Yes, it should be a pretty good run rate.

Okay. It looks like it was down substantially versus Q2 and Q3, is that accurate?

Well let me--

There might have been a modest decline because of the sale of the Homestead...

But, you should have seen that also in Q3.

Yes,I don't have the prior quarter's numbers in front of me. I know we did have... we had some failed acquisition costs in one quarter, this year. I think it was in the second quarter. And as John mentioned, the G&A did go down as a result of selling the Homestead portfolio in July. But, it bounces around a little bit between quarters, but the fourth quarter gives you... should give you pretty decent run rate.

Okay. That's helpful. Thank you. And just to make sure I understood on your percentage rents and additional returns in 2008. You said they're not going to grow or they are not going to grow at the same level that they grew in 07?

Well, they grew about 19% clip in 07 and I think my statement was that it could be a significant little lower growth rate this year.

Okay. And then I think it was 06 or maybe 07, they are a little bit lumpy. Do you see anything, any quarterly kind of differential kind of in 08 that we would be aware off?

I think that typically, the additional returns in percentage rents typically follow the hotel cycle within a calendar, which be the strongest quarters of the quarters, where we've earned the highest amount or the second and third quarters with lower amounts in the first and fourth.

Okay. And then on your Hyatt Place portfolio. Assuming that Hyatt was not recovering dollars that they had essentially funds that you during the renovation, what... I think you've got maybe 13 properties that are completed. What kind of coverage if you could comment will they be throwing off at this point?

Well.

Well the portfolio didn't cover for the year and or in the fourth quarter. The coverage is starting to improve, but we think it's probably going to be second quarter before that portfolio covers the rent.

Yes. First quarter will be close to covering the cash flow... cover the minimum rent, but starting in the second quarter is probably a likely of that we'll see the portfolio covering.

And so by that point Hyatt will I guess recouped some other shortfalls that they covered during the renovation?

No, no once the coverage gets above 10 which let's just say it will be in the second quarter of 2008. That access above are minimum return is when... is what when they will start to recover against the funds they advanced during the renovation.

So. You can correct me if I am wrong. I think your NOI, especially on the completed properties was up pretty substantially maybe 19%. I would have thought... I would have seen a bigger pop on your rent coverage in the quarter?

We don't remember. We put substantial capital into those properties and as a result our minimum return went up. So, if you look at fourth quarter of 06 versus fourth quarter of 07 our minimum return was up about 22% year-over-year. So, the cash flow is up significantly. We are taking all of the growth in that cash flow though through additional minimum returns.

Okay, okay. That's helpful. That's it from me. Thank you very much.

Okay.

We will take our next question from Jeff Donnelly with Wachovia.

Good afternoon, guys. John, I was just curious... I mean since you are fresh from the Als Convention Conference in late January. I was curious that you are hearing out there on I guess got deals out there in the pipeline, apologize if you touched on that earlier in the call, I got on just a little bit late?

I didn't touch on it so it's fine. I mean we are seeing a fairly active pipeline. We've looked at a couple of transactions, but frankly we thought that we were getting a sort of a first look at or as... we were the only ones looking at it. We didn't like the pricing on a couple of the portfolios that we saw. Those portfolios have now started to comeback out with packages from brokers. So, sellers have tried, they go to some selected buyers and see if they get a deal done and when they haven't got in the price that they hope for turn the portfolios over to some of the larger brokers in the industry. So, we are seeing a good mix of business. We are seeing portfolios; we are seeing a lot of individual one-offs. But nothing that has been right for us either because of inability to change the brands to make fit within one of our portfolios or because we found the existing secured debt that was in place unacceptable. We... in our transactions we structure our contracts differently than a lot of other REITs. And just because you have more than one hotel doesn't make it a portfolio from our perspective. We look for the ability to pool FF&E, new reserve. We look for the ability to have all in renewals, we try and have single management contract as appose to say 10 or 15 or 20 individual management contracts, and so there is a lot of new answers that factor into our underwriting and what we've seen so far at the asking prices that we've seen hasn't, hasn't done the right fit.

And just I am curious what you take on, one aspect of pricing, I know this might not directly a part of you guys, but there have been some hotels that were fortunate enough to lock up secured financing in the first half of 2007, and some of those folks are...would argue. The private guys would argue this, still like those assets will trade, as if it is early 2007, because of that long-term in place financing. Is that something that you are seeing from transactions that are getting done or do you, maybe to the extend that you have encountered those, do you agree with that?

There are some sellers out there, some owners who put debt in place that was assumable, and to the extent that they are trying to sell now. That's become a big marketing plus for the brokerage community to say, listen, you just have to come up with the equity piece. We've already got, a pretty significant amount of leverage that's assumable. The question is, is whether, how much. Well the question is whether you just pay the 1%, and you can really assume it or if you pay the 1%, but the bank still have the ability to decide they approve of the new borrower, and their credit worthiness. So we haven't seen any of those transactions actually close, since the credit market got dicey, so I can't give you a definite answer on whether that's helping or not, but we've heard the unusual description of some owners, debt as asset debt, and that's, we always get a chuckle a lot of that, but anyway we. I think it may help some deals get done,, but right now we haven't, we are just not seeing that many deals getting done, that weren't announced, or agreed to before the markets got choppy.

And how are you guys, I am curious thinking about pricing yourself, I mean to the extent you are out there trying to buy assets, and say there is that portfolio where it does have the traits that you like, and how do you think about the yields that you are looking for there, versus maybe what you got and, I can't remember what the yield was in the last deal aside from TA that you did. But, just given the credit markets have really kind of blown out, as Mark said earlier, I guess I would say, on some level your pricing should too as well and how are you thinking about that?

Well clearly our cost of capital have widened as the economy has weakened and as the credit, and the capital markets have gotten dicey and, so we have been seeking higher returns, but we are also looking at it like, that this isn't going to be a long-term situation. We do believe that we will be able to access the unsecured credit markets at attractive pricing during 2008, and we do think that capital markets are going to get through the current disruption. It may take a couple of quarters, so right now, we are... as Mark said, we'll take care of the current mature... the maturity that's coming up in March of some senior notes using our revolver and, right now we are just... we are looking the transactions that where we would use out revolver and expect to write-out the temporary uncertainty.

And just one last question, I am curious. Have you guys ever given any consideration or do you still give consideration, do you, maybe doing deals in the hotel space in the future, kind of like you did with TA where rather than having a fair lease back with an established brand like Marriott, or Hyatt, or InterCon that you instead sort of capitalized, for the Finley capitalized company that's independent of HPT. Is this when you fall over?

We think about a lot of different opportunities and clearly as many of our existing relationships have gone asset light. We've had to think about, what you just described, more so than we have had to earlier in the life of HPT, but right now we don't have plans underway that set up a captive manager, or to align with one in particular to, that's our third party manager, but that someday we may do that, because Marriott doesn't own many, many hotels that they could do, sell managed backs or sell lease backs. IHG doesn't, Hyatt has some, but overtime I think that they may go in asset... well they are calling it asset right, but they'll go more asset light than they are today, so at some point in the future, we may need to align ourselves a little bit differently in that regard.

Okay. Thanks, guys.

And it appears we have no further questions at this time. I'd like to turn the call back over to Mr. John Murray for any additional or closing remarks.

Thank you very much for joining us today. We look forward to speaking with you again in May with first quarter call. Thanks.

Once again that does conclude today's call. We do appreciate your participation. You may disconnect at this time.