Good day and welcome to the Hospitality Properties Trust Fourth Quarter 2017 Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Katie Strohacker, Senior Director of Investor Relations. Please go ahead.

Thank you. Good morning. On today's call, John Murray, President and Mark Kleifges, Chief Financial Officer will make a short presentation, which will be followed by a question-and-answer session. Please note that the recording, retransmission and transcription of today's conference call is prohibited without the prior written consent of HPT. I would like to point out that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on HPT's present beliefs and expectations as of today, March 1, 2018. 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 than through filings with the Securities and Exchange Commission or SEC. In addition, this call may contain non-GAAP financial measures, including normalized funds from operations or normalized FFO. A reconciliation of normalized FFO and adjusted EBITDA to net income as well as components to calculate AFFO are 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 Form 10-K to be filed later today with the SEC and in our 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 will turn the call over to John Murray.

Thank you, Katie and good morning. Before we talk about fourth quarter results for HPT Mark and I wanted to express our extreme sadness of the sudden and unexpected passing of Barry Portnoy, the Founder and Chairman of RMR Group and one of our Managing Trustees. As many of our colleagues have said on other calls this week, this is a tragic loss for his family and for RMR and its employees who manage companies. Our serious condolences go out to Barry's family and friends. Barry's vision, dedication, work ethic and high standards have long been an inspiration to us and he will be greatly missed. He was the architect of the contract structure which sets HPT apart from other lodging REITs and which remains the foundation of how we run HPT today. We remain on sound footing from a leadership perspective as Adam Portnoy has been President and CEO of the RMR Group running its day-to-day operations for a number of years and will continue to guide us as we manage HPT under the same high standards that Barry set for us. Turning to quarterly results, earlier this morning, we reported fourth quarter normalized FFO of $0.54 per share a decrease of 5.3% compared to the $0.57 reported in the fourth quarter of 2016 due primarily to incentive business management fees which increased by $22.2 million or $0.13 per share in 2017 versus 2016. Excluding incentive business management fees from both periods normalized FFO for the 2017 fourth quarter would have been a $162.4 million or $0.99 per share an increase of 11.4% from the same period last year. Starting with performance at HPT's travel centers, fuel margin decreased by $4.6 million or 5.6% in the fourth quarter, reflecting lower fuel volumes sold and lower cents per gallon diesel…

Thanks, John. Starting with the performance of our travel center investments, property level EBITDAR in the 2017 fourth quarter was marginally higher than the 2016 quarter, despite the continued decline in fuel sales volume and the absence of the federal biodiesel tax credit program. For the quarter, fuel gross margin for our travel centers decreased $4.6 million or 5.6% versus the prior year quarter. As a result of the 1.7% decline in the fuel sales volume and a 4% decrease in cents per gallon margin. The fuel volume decline in the fourth quarter resulted primarily from the continued truck fuel efficiency gains and increased competition. The decline versus the prior year in per gallon fuel margin was due primarily to the absence of the federal biodiesel tax credit program in 2017 and increasing fuel cost trends in the quarter. Fuel gross margin was still a solid $0.18 per gallon in the 2017 fourth quarter. The biodiesel tax credit was retroactively reinstated for 2017 in legislation passed in February 2018. As a result, TA expects to receive a retroactive credit of approximately $23 million and a significant portion of this recovery will be reflected in the 2018 operating results of our travel centers. Non-fuel travel center revenues increased 1.9% versus the prior year due primarily to growth in truck service and convenient store sales. Our travel centers grew non-fuel margin $4.8 million or 2.3% versus the prior year quarter to $215.6 million and non-fuel sales generated approximately 74% of the total gross margin dollars of our travel centers in the quarter. Site level operating expenses were essentially flat versus the prior year due to certain cost control initiatives TA implemented during 2017. As a result of these changes, fourth quarter property level EBITDAR of our travel centers increased by approximately $174,000…

Thank you. [Operator Instruction] Our first question comes from Michael Bellisario of Baird. Please go ahead.

Good morning everyone.

Good morning.

Can you talk about the Courtyard portfolio? I think last year Marriott was pretty aggressive with their corporate negotiated rates and you noticed some weakness throughout year. What did you see most recently from them and what's the outlook for that portfolio for 2018 and did they maybe take a different approach this year?

Yeah. I think there were too aggressive last year. They have got - frankly I think maybe they also took their eye off the ball a little bit with the Starwood merger taking place. But I think that they were a little bit more hopefully a little bit more in line with the market in our fee process for this year. I think they are also working on initiatives to try to keep cost down. They've lowered some of the guest reward program [indiscernible]. They've kept reservation cost flat. And they are to take other steps across the board to try to keep expenses down while continuing to take steps to reduce the amount of OTA business to reduce the commissions that they pay on OTA business. And so we're hopeful that the combination of less OTA business and a better approach to the RFPCs will help them do better this year than they did last. Do you want to - I think Mark has something to add.

Yeah. The only thing I'd point out is that there are going to be 33 of those hotels under renovation during 2018. So I think core operations of the portfolio will improve year-over-year as a result of that renovation activity I wouldn't expect significant changes in cash flow generate upon that portfolio on a year-over-year basis.

Got it and then where do you guys stand on the Marriott 5 potential negotiations? Is there any update to share there?

There's really nothing new. We've after the Atlas Conference in January I went and visited the hotel and met with Marry and [indiscernible] and the vacation guys and we're having some discussions, but it's early in the discussions so there's nothing really to report.

Got it. And then last one from me maybe how do you think about the Wyndham relationship and what might change there in terms of the split about the company and maybe their willingness to fund anything above the 85%?

We are hopeful that with the Hamilton Park renovation behind and hopefully with solid sales team in place in Chicago those two hotels make up roughly half of the portfolio cash flow. We're hopeful that cash flow for the portfolio improves this year. We don't think that they're intending to default. We just think that they resonate driven as we have been realized particularly in these weaker months of the first quarter that they have the ability to pay where cash flow is well below as priority the ability to pay just 85% and so the reduce level of payment if you will. But we expect that that portfolio is going to perform reasonably well. And we're hopeful at least that with the two full service hotels that make up the lion's share of portfolio will pick up the pace. We have a good relationship with Wyndham. They've got a lot on their plate right now with the spinoff and with the La Quinta acquisition. And I think that they'll be a little bit more focused on our portfolio and possible ways to improve its performance, but it may take until later in the year because of the other stuff that they've got on their plate right now.

Got it and is there any catch up in the stronger months on that Wyndham portfolio to backfill the January-February short fall?

Yeah. The way the waterfall works on all of our portfolios, it's looked accumulatively on a month-to-month basis as you go. So there may be catch up in the second and third quarters but then there will probably be some slippage in the fourth depending on how the hotels perform.

Got it. That's all from me. Thank you.

[Operator Instructions] Our next question comes from Bryan Maher of B. Riley FBR. Please go ahead.

Good morning John and Mark.

Good morning.

You guys, as you said in your prepared comments didn't really have much in the way of transaction activity in 4Q and you have kind of a lot on your plate with some renovations. But how should we think about 2018 from an acquisitions standpoint, is there a target, is it just mainly going to be opportunistic, when do you think it skews more towards full service or select service?

We don't have a target Brian. We're going to invest between TA and in hotels easily $200 million in renovations and they are going to be spread out across the year. So we are not actively pursuing acquisitions currently. And we are keeping an eye on what's out there. But I don't really have particular guidance for it, I would say it would be close to the zero then it would be the $200 million.

Okay. And then on the labor costs side. What type of - well first of all what are you seeing there? And then secondarily what type of influence do you have with your operators to keep that under control?

Well, the unemployment levels are very low there. So that puts upward pressure on pay rates, because you try to attract good employees. There are number of cities where there are efforts underway to increase minimum wages and so that puts more pressure on wages. So we are seeing really across the country a push towards wage increases and benefits cost, just seems to always go up. And wages and benefits make up half the P&L. So our asset managers are regularly challenging our operators about more efficient ways to run the hotels, better staffing models, whether they can get use initiatives that are environmentally friendly to cause less rooms that need to be cleaned or whether they can get housekeeping boys to clean more rooms, do lighter touches or to use technology for check-ins, so that there is less need for front desk staff; is a bunch of initiatives and we are confidently pushing our operators. But at the end of the day you know we are not operating the hotels, we are a passive owner. And if they don't want to be more efficient, it's in their interest, but this is only so much we can do.

Thanks John.

This concludes our question-and-answer session. I would like to turn the conference back over to John Murray for any closing remarks.

Thank you very much for joining us on the call today. Have a good moment.