EX-99.1 2 exhibit991.htm EX-99.1 Document
Exhibit 99.1
SERVICE PROPERTIES TRUST
Introduction to Unaudited Pro Forma Condensed Consolidated Financial Statements

On September 18, 2025, Service Properties Trust, or SVC, sold three hotels with a total of 413 keys located in three states for a combined sales price of $26.5 million, excluding closing costs, pursuant to an agreement that SVC previously entered into to sell 18 hotels with a total of 2,628 keys for a combined sales price of $142.5 million, excluding closing costs, or the 18 Hotel Sale Portfolio. To date, SVC has sold eight of the hotels in the 18 Hotel Sale Portfolio with a total of 1,103 keys for a combined sales price of $71.4 million, excluding closing costs, which constitutes a significant disposition of assets. SVC remains under agreement to sell the remaining ten hotels with a total of 1,525 keys for a combined sales price of $71.1 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 eight hotels in the 18 Hotel Sale Portfolio sold to date 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 eight hotels in the 18 Hotel Sale Portfolio sold to date 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 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 eight hotels sold to date have been included.

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SERVICE PROPERTIES TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2025
(dollars in thousands, except per share data)
 
HistoricalTransaction Accounting AdjustmentsPro Forma
(A)(B)
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 (50,634)798,466 
Cash and cash equivalents
63,176 69,260 132,436 
Restricted cash
22,855 — 22,855 
Equity method investment
111,653 — 111,653 
Due from related persons
29,219 1,103 30,322 
Other assets, net
305,068 — 305,068 
Total assets
$6,932,512 $19,729 $6,952,241 
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 19,729 2,060,109 
Cumulative common distributions
(5,910,299)— (5,910,299)
Total shareholders’ equity
695,944 19,729 715,673 
Total liabilities and shareholders’ equity
$6,932,512 $19,729 $6,952,241 
The accompanying notes are an integral part of these unaudited proforma condensed consolidated financial statements.
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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)

 
HistoricalTransaction Accounting AdjustmentsPro Forma
(A)
Revenues:
Hotel operating revenues$1,496,705 $(24,512)(B)$1,472,193 
Rental income400,223 — 400,223 
Total revenues
1,896,928 (24,512)1,872,416 
Expenses:
 
Hotel operating expenses1,274,153 (22,327)(B)1,251,826 
Net lease operating expenses19,817 — 19,817 
Depreciation and amortization371,786 (5,285)(B)366,501 
General and administrative40,239 — 40,239 
Transaction related costs6,894 — 6,894 
Loss on asset impairment, net56,212 — 56,212 
Total expenses
1,769,101 (27,612)1,741,489 
Gain on sale of real estate, net6,269 19,729 (C)25,998 
Interest income4,052 — 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)22,829 (238,996)
Income tax expense(1,402)— (1,402)
Equity in losses of an investee(12,299)— (12,299)
Net loss$(275,526)$22,829 $(252,697)
Weighted average common shares outstanding (basic and diluted)
165,338 165,338 
Net loss per common share (basic and diluted)$(1.67)$(1.53)
The accompanying notes are an integral part of these unaudited proforma condensed consolidated financial statements.
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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)

 
HistoricalTransaction Accounting AdjustmentsPro Forma
(A)
Revenues:
 
 
Hotel operating revenues$739,368 $(9,981)(B)$729,387 
Rental income199,247 — 199,247 
Total revenues
938,615 (9,981)928,634 
Expenses:
 
Hotel operating expenses634,753 (10,577)(B)624,176 
Net lease operating expenses11,067 — 11,067 
Depreciation and amortization164,130 (1,295)(B)162,835 
General and administrative19,774 — 19,774 
Transaction related costs1,456 — 1,456 
Loss on asset impairment54,721 — 54,721 
Total expenses
885,901 (11,872)874,029 
Gain on sale of real estate, net590 — 590 
Interest income2,071 — 2,071 
Interest expense
(204,196)— (204,196)
Loss before income tax expense and equity in losses of an investee
(148,821)1,891 (146,930)
Income tax expense(1,300)— (1,300)
Equity in losses of an investee(4,473)— (4,473)
Net loss$(154,594)$1,891 $(152,703)
Weighted average common shares outstanding (basic and diluted)
165,679 165,679 
Net loss per common share (basic and diluted)$(0.93)$(0.92)
The accompanying notes are an integral part of these unaudited proforma condensed consolidated financial statements.

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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 eight of the hotels in the 18 Hotel Sale Portfolio sold to date. The transaction accounting adjustments are as follows:
Assets of properties held for sale$50,634 
Working capital(1)
(1,103)
Net book value$49,531 
Gross sales price$71,402 
Estimated closing costs(2)
(2,142)
Estimated net proceeds69,260 
Net book value(49,531)
Cumulative net income adjustment$19,729 
(1)    Represents working capital due from Sonesta International Hotels Corporation when hotels are sold.
(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 eight of the hotels in the 18 Hotel Sale Portfolio.
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, of eight of the hotels in the 18 Hotel Sale Portfolio sold to date.
(C)    Represents the estimated gain on sale of eight of the hotels in the 18 Hotel Sale Portfolio sold to date, calculated as the estimated net proceeds of $69,260 less the net book value of the assets of $49,531, both as described in Note B 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 eight of the hotels in the 18 Hotel Sale Portfolio sold to date.

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