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SERVICE PROPERTIES TRUST
Introduction to Unaudited Pro Forma Condensed Consolidated Financial Statements
On October 22, 2025, Service Properties Trust, or SVC, sold one hotel with a total of 152 keys located in California for a sales price of $27.5 million, excluding closing costs, or the Third Phase Closing, pursuant to a previously disclosed agreement that SVC entered into to sell, in phases, 45 hotels with a total of 5,997 keys for a combined sales price of $432.0 million, excluding closing costs, or the 45 Hotel Sale Portfolio. As previously reported on October 6, 2025 and October 21, 2025, SVC sold 12 hotels in the 45 Hotel Sale Portfolio with a total of 1,662 keys for a combined sales price of $116.5 million, excluding closing costs, or the First Phase Closing, and two hotels in the 45 Hotel Sale Portfolio with a total of 235 keys for a combined sales price of $10.0 million, excluding closing costs, or the Second Phase Closing. SVC remains under agreement to sell the remaining 30 hotels with a total of 3,948 keys for a combined sales price of $278.0 million, excluding closing costs.
The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2025 reflects SVC's financial position as if the sales of the 15 hotels in the 45 Hotel Sale Portfolio sold through October 22, 2025 were completed as of June 30, 2025. The following unaudited pro forma condensed consolidated statements of loss for the year ended December 31, 2024 and for the six months ended June 30, 2025 reflect SVC's results of operations as if the 15 hotels in the 45 Hotel Sale Portfolio sold through October 22, 2025 were completed on January 1, 2024. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) SVC's unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, and the notes thereto, included in SVC's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission, or the SEC, on August 5, 2025, and (ii) SVC's consolidated financial statements for the year ended December 31, 2024, and the notes thereto, included in SVC's Annual Report on Form 10-K filed with the SEC on February 26, 2025.
These unaudited pro forma condensed consolidated financial statements are provided for informational purposes only and are not necessarily indicative of SVC's expected financial position or results of operations for any future period. Differences could result from numerous factors, including future changes in SVC's portfolio of investments, capital structure, property level operating expenses and revenues, including returns received from SVC’s hotels or rents expected to be received pursuant to SVC's existing leases or leases SVC may enter into, changes in interest rates and other reasons. Actual future results are likely to be different from amounts presented in these unaudited pro forma condensed consolidated financial statements and such differences may be significant. In the opinion of management, all adjustments necessary to reflect, in all material respects, the effects of 15 hotels in the 45 Hotel Sale Portfolio sold through October 22, 2025 have been included.
SERVICE PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2025
(dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Transaction Accounting Adjustments | | | | | | |
| | Historical | | First Phase Closing | | Second Phase Closing | | Third Phase Closing | | Pro Forma | | | | |
| | (A) | | (B) | | (B) | | (C) | | | | | | |
ASSETS | | | | | | | | | | | | | | |
Real estate properties: | | | | | | | | | | | | | | |
Land | | $ | 1,735,709 | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,735,709 | | | | | |
Buildings, improvements and equipment | | 6,115,921 | | | — | | | — | | | — | | | 6,115,921 | | | | | |
Total real estate properties, gross | | 7,851,630 | | | — | | | — | | | — | | | 7,851,630 | | | | | |
Accumulated depreciation | | (2,400,670) | | | — | | | — | | | — | | | (2,400,670) | | | | | |
Total real estate properties, net | | 5,450,960 | | | — | | | — | | | — | | | 5,450,960 | | | | | |
Acquired real estate leases and other intangibles, net | | 100,481 | | | — | | | — | | | — | | | 100,481 | | | | | |
Assets of properties held for sale | | 849,100 | | | (108,040) | | | (19,474) | | | (19,068) | | | 702,518 | | | | | |
Cash and cash equivalents | | 63,176 | | | 113,005 | | | 9,700 | | | 26,675 | | | 212,556 | | | | | |
Restricted cash | | 22,855 | | | — | | | — | | | — | | | 22,855 | | | | | |
Equity method investment | | 111,653 | | | — | | | — | | | — | | | 111,653 | | | | | |
Due from related persons | | 29,219 | | | 1,662 | | | 235 | | | 152 | | | 31,268 | | | | | |
Other assets, net | | 305,068 | | | — | | | — | | | — | | | 305,068 | | | | | |
Total assets | | $ | 6,932,512 | | | $ | 6,627 | | | $ | (9,539) | | | $ | 7,759 | | | $ | 6,937,359 | | | | | |
| | | | | | | | | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | |
Unsecured debt, net | | $ | 4,026,768 | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,026,768 | | | | | |
Secured debt, net | | 1,692,494 | | | — | | | — | | | — | | | 1,692,494 | | | | | |
Accounts payable and other liabilities | | 496,822 | | | — | | | — | | | — | | | 496,822 | | | | | |
Due to related persons | | 13,941 | | | — | | | — | | | — | | | 13,941 | | | | | |
Liabilities of properties held for sale | | 6,543 | | | — | | | — | | | — | | | 6,543 | | | | | |
Total liabilities | | 6,236,568 | | | — | | | — | | | — | | | 6,236,568 | | | | | |
| | | | | | | | | | | | | | |
Commitments and contingencies | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Shareholders’ equity: | | | | | | | | | | | | | | |
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 166,860,830 shares issued and outstanding | | 1,669 | | | — | | | — | | | — | | | 1,669 | | | | | |
Additional paid in capital | | 4,562,021 | | | — | | | — | | | — | | | 4,562,021 | | | | | |
Cumulative other comprehensive income | | 2,173 | | | — | | | — | | | — | | | 2,173 | | | | | |
Cumulative net income | | 2,040,380 | | | 6,627 | | | (9,539) | | | 7,759 | | | 2,045,227 | | | | | |
Cumulative common distributions | | (5,910,299) | | | — | | | — | | | — | | | (5,910,299) | | | | | |
Total shareholders’ equity | | 695,944 | | | 6,627 | | | (9,539) | | | 7,759 | | | 700,791 | | | | | |
Total liabilities and shareholders’ equity | | $ | 6,932,512 | | | $ | 6,627 | | | $ | (9,539) | | | $ | 7,759 | | | $ | 6,937,359 | | | | | |
The accompanying notes are an integral part of these unaudited proforma condensed consolidated financial statements.
SERVICE PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF LOSS
For the Year Ended December 31, 2024
(amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Transaction Accounting Adjustments | | |
| | Historical | | First Phase Closing | | Second Phase Closing | | Third Phase Closing | | Pro Forma |
| | (A) | | (B) | | (B) | | | | |
Revenues: | | | | | | | | | | |
| Hotel operating revenues | | $ | 1,496,705 | | | $ | (47,036) | | | $ | (5,964) | | | $ | (5,816) | | (C) | $ | 1,437,889 | |
| Rental income | | 400,223 | | | — | | | — | | | — | | | 400,223 | |
Total revenues | | 1,896,928 | | | (47,036) | | | (5,964) | | | (5,816) | | | 1,838,112 | |
| | | | | | | | | | |
Expenses: | | | | | | | | | | |
| Hotel operating expenses | | 1,274,153 | | | (41,071) | | | (5,534) | | | (4,848) | | (C) | 1,222,700 | |
| Net lease operating expenses | | 19,817 | | | — | | | — | | | — | | | 19,817 | |
| Depreciation and amortization | | 371,786 | | | (9,297) | | | (2,055) | | | (1,240) | | (C) | 359,194 | |
| General and administrative | | 40,239 | | | — | | | — | | | — | | | 40,239 | |
| Transaction related costs | | 6,894 | | | — | | | — | | | — | | | 6,894 | |
| Loss on asset impairment, net | | 56,212 | | | — | | | — | | | — | | | 56,212 | |
Total expenses | | 1,769,101 | | | (50,368) | | | (7,589) | | | (6,088) | | | 1,705,056 | |
| | | | | | | | | | |
| Gain (loss) on sale of real estate, net | | 6,269 | | | 6,627 | | | (9,539) | | | 7,759 | | (D) | 11,116 | |
| Interest income | | 4,052 | | | — | | | — | | | — | | | 4,052 | |
Interest expense | | (383,792) | | | — | | | — | | | — | | | (383,792) | |
| Loss on early extinguishment of debt, net | | (16,181) | | | — | | | — | | | — | | | (16,181) | |
Loss before income tax expense and equity in losses of an investee | | (261,825) | | | 9,959 | | | (7,914) | | | 8,031 | | | (251,749) | |
| Income tax expense | | (1,402) | | | — | | | — | | | — | | | (1,402) | |
| Equity in losses of an investee | | (12,299) | | | — | | | — | | | — | | | (12,299) | |
| Net loss | | $ | (275,526) | | | $ | 9,959 | | | $ | (7,914) | | | $ | 8,031 | | | $ | (265,450) | |
| | | | | | | | | | |
Weighted average common shares outstanding (basic and diluted) | | 165,338 | | | | | | | | | 165,338 | |
| | | | | | | | | | |
| Net loss per common share (basic and diluted) | | $ | (1.67) | | | | | | | | | $ | (1.61) | |
The accompanying notes are an integral part of these unaudited proforma condensed consolidated financial statements.
SERVICE PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF LOSS
For the Six Months Ended June 30, 2025
(amounts in thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Transaction Accounting Adjustments | | |
| | Historical | | First Phase Closing | | Second Phase Closing | | Third Phase Closing | | Pro Forma |
| | (A) | | (B) | | (B) | | | | |
Revenues: | | | | | | | | | | |
| Hotel operating revenues | | $ | 739,368 | | | $ | (22,416) | | | $ | (2,504) | | | $ | (3,119) | | (C) | $ | 711,329 | |
| Rental income | | 199,247 | | | — | | | — | | | — | | | 199,247 | |
Total revenues | | 938,615 | | | (22,416) | | | (2,504) | | | (3,119) | | | 910,576 | |
| | | | | | | | | | |
Expenses: | | | | | | | | | | |
| Hotel operating expenses | | 634,753 | | | (20,037) | | | (2,419) | | | (2,372) | | (C) | 609,925 | |
| Net lease operating expenses | | 11,067 | | | — | | | — | | | — | | | 11,067 | |
| Depreciation and amortization | | 164,130 | | | (2,370) | | | (545) | | | (374) | | (C) | 160,841 | |
| General and administrative | | 19,774 | | | — | | | — | | | — | | | 19,774 | |
| Transaction related costs | | 1,456 | | | — | | | — | | | — | | | 1,456 | |
| Loss on asset impairment | | 54,721 | | | — | | | — | | | — | | | 54,721 | |
Total expenses | | 885,901 | | | (22,407) | | | (2,964) | | | (2,746) | | | 857,784 | |
| | | | | | | | | | |
| Gain on sale of real estate, net | | 590 | | | — | | | — | | | — | | | 590 | |
| Interest income | | 2,071 | | | — | | | — | | | — | | | 2,071 | |
Interest expense | | (204,196) | | | — | | | — | | | — | | | (204,196) | |
Loss before income tax expense and equity in losses of an investee | | (148,821) | | | (9) | | | 460 | | | (373) | | | (148,743) | |
| Income tax expense | | (1,300) | | | — | | | — | | | — | | | (1,300) | |
| Equity in losses of an investee | | (4,473) | | | — | | | — | | | — | | | (4,473) | |
| Net loss | | $ | (154,594) | | | $ | (9) | | | $ | 460 | | | $ | (373) | | | $ | (154,516) | |
| | | | | | | | | | |
Weighted average common shares outstanding (basic and diluted) | | 165,679 | | | | | | | | | 165,679 | |
| | | | | | | | | | |
| Net loss per common share (basic and diluted) | | $ | (0.93) | | | | | | | | | $ | (0.93) | |
The accompanying notes are an integral part of these unaudited proforma condensed consolidated financial statements.
SERVICE PROPERTIES TRUST
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet
(A) Represents SVC’s historical condensed consolidated balance sheet as of June 30, 2025, which was derived from SVC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
(B) Represents the removal of the assets and liabilities associated with 12 hotels sold in the First Phase Closing and two hotels sold in the Second Phase Closing of the 45 Hotel Sale Portfolio, as presented in SVC’s unaudited pro forma condensed consolidated financial statements filed as to its Current Reports on Form 8-K filed on October 6, 2025 and October 21, 2025. The transaction accounting adjustments are as follows:
| | | | | | | | | | | |
| | First Phase Closing | Second Phase Closing |
| Assets of properties held for sale | | $ | 108,040 | | $ | 19,474 | |
Working capital(1) | | (1,662) | | (235) | |
| | | |
| Net book value | | $ | 106,378 | | $ | 19,239 | |
| | | |
| Gross sales price | | $ | 116,500 | | $ | 10,000 | |
Estimated closing costs(2) | | (3,495) | | (300) | |
| Estimated net proceeds | | 113,005 | | 9,700 | |
| Net book value | | (106,378) | | (19,239) | |
| Cumulative net income adjustment | | $ | 6,627 | | $ | (9,539) | |
(1) Represents working capital previously advanced to Sonesta International Hotels Corporation. Any remaining
working capital for sold hotels will be returned to SVC.
(2) Represents estimated closing costs including broker’s commissions, legal fees, transfer and recording fees and other
customary closing costs directly attributable to the sale of the hotels.
(C) Represents the removal of the assets and liabilities associated with one hotel sold in the Third Phase Closing of the 45 Hotel Sale Portfolio. The transaction accounting adjustments are as follows:
| | | | | | | | |
| Assets of properties held for sale | | $ | 19,068 | |
Working capital(1) | | (152) | |
| | |
| Net book value | | $ | 18,916 | |
| | |
| Gross sales price | | $ | 27,500 | |
Estimated closing costs(2) | | (825) | |
| Estimated net proceeds | | 26,675 | |
| Net book value | | (18,916) | |
| Cumulative net income adjustment | | $ | 7,759 | |
(1) Represents working capital previously advanced to Sonesta International Hotels Corporation. Any remaining
working capital for sold hotels will be returned to SVC.
(2) Represents estimated closing costs including broker’s commissions, legal fees, transfer and recording fees and other
customary closing costs directly attributable to the sale of the hotel.
Adjustments to Unaudited Pro Forma Condensed Consolidated Statements Loss
Year Ended December 31, 2024
(A) Represents SVC’s historical consolidated statement of loss for the year ended December 31, 2024, which was derived from SVC’s Annual Report on Form 10-K for the year ended December 31, 2024.
(B) Represents the removal of the historical revenues and expenses for the year ended December 31, 2024, and the estimated gain or loss on sales of 12 hotels sold in the First Phase Closing and two hotels sold in the Second Phase Closing of the 45
Hotel Sale Portfolio, as presented in SVC’s unaudited pro forma condensed consolidated financial statements filed as to its Current Reports on Form 8-K filed on October 6, 2025 and October 21, 2025.
(C) Represents the removal of the historical revenues and expenses for the year ended December 31, 2024, of one hotel sold in the Third Phase Closing of the 45 Hotel Sale Portfolio.
(D) Represents the estimated gain on sale of one hotel sold in the Third Phase Closing of the 45 Hotel Sale Portfolio, calculated as the estimated net proceeds of $26,675 less the net book value of the assets of $18,916, both as described in Note C of the adjustments to the unaudited pro forma condensed consolidated balance sheet.
Six Months Ended June 30, 2025
(A) Represents SVC’s historical condensed consolidated statement of loss for the six months ended June 30, 2025, which was derived from SVC’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
(B) Represents the removal of the historical revenues and expenses for the six months ended June 30, 2025, of 12 hotels sold in the First Phase Closing and two hotels sold in the Second Phase Closing of the 45 Hotel Sale Portfolio, as presented in SVC’s unaudited pro forma condensed consolidated financial statements filed as to its Current Reports on Form 8-K filed on October 6, 2025 and October 21, 2025.
(C) Represents the removal of the historical revenues and expenses for the six months ended June 30, 2025, of one hotel sold in the Third Phase Closing of the 45 Hotel Sale Portfolio.