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Item 9A. Controls and Procedures

2023-02-28 compared with 2022-02-24 · 624 added, 900 removed, 1164 unchanged (57% of the section changed)

Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Exchange Act.

Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

As of the end of the period covered by this Annual Report on Form 10-K, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, our President and Chief Investment Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Exchange Act.

Based upon that evaluation, our Managing Trustees, our President and Chief Investment Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

13 unchanged sentences

Directors, Executive Officers and Corporate Governance

We have a Code of Conduct that applies to our officers and Trustees, RMR Inc.

and RMR LLC, senior level officers of RMR LLC, senior level officers and directors of RMR Inc.

and certain other officers and employees of RMR LLC.

We have a Code of Conduct that applies to our officers and Trustees, RMR, senior officers and executive officers of RMR, members of the board of directors of RMR Inc.

and employees of RMR who provide significant services to us.

Our Code of Conduct is posted on our website, www.svcreit.com.

7 unchanged sentences

Equity Compensation Plan Information.

We may grant common shares to our officers and other employees of RMR LLC under our 2012 Equity Compensation Plan, or the 2012 Plan.

We may grant common shares to our officers, other employees of RMR and officers or employees of Sonesta under our Amended and Restated 2012 Equity Compensation Plan, or the 2012 Plan.

In addition, each of our Trustees receives common shares as part of his or her annual compensation for serving as a Trustee and such shares are awarded under the 2012 Plan.

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Share awards that are repurchased or forfeited will be added to the common shares available for issuance under the 2012 Plan.

Payments by us to RMR LLC employees are described in Notes 7 and 9 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Payments by us to our officers, other employees of RMR and officers or employees of Sonesta employees are described in Notes 8 and 10 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

The remainder of the information required by Item 12 is incorporated by reference to our definitive Proxy Statement.

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Reports of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID No.

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of December 31, 202 2 and 2021

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(Incorporated by reference to the Company’s Post-Effective Amendment No.

2 to Registration Statement on Form S-3, filed on July 15, 2020, File No.

2 to Registration Statement on Form S-3, filed on July 15, 2020 .

3.2 Articles Supplementary to the Declaration of Trust of the Company, dated June 10, 2020.

4 unchanged sentences

(Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.)

4.2 Indenture, dated as of February 25, 1998, between the Company and State Street Bank and Trust Company.

4.2 Indenture, dated as of February 25, 1998, between the Company and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association, as successor trustee to State Street Bank and Trust Company ) .

(Incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997.)

4.3 Supplemental Indenture No.

14, dated as of August 16, 2012, between the Company and U.S.

Bank National Association, relating to the Company’s 5.000% Senior Notes due 2022, including form thereof.

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.)

4.4 Supplemental Indenture No.

15, dated as of June 6, 2013, between the Company and U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.500% Senior Notes due 2023, including form thereof.

1 unchanged sentence

4.4 Authentication Order, dated January 13, 2017, from the Company to U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.500% Senior Notes due 2023.

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16, dated as of March 12, 2014, between the Company and U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.650% Senior Notes due 2024, including form thereof.

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17, dated as of September 12, 2014, between the Company and U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.50% Senior Notes due 2025, including form thereof.

1 unchanged sentence

4.7 Indenture, dated as of February 3, 2016, between the Company and U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) .

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4.9 Third Supplemental Indenture, dated as of January 13, 2017, between the Company and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.950% Senior Notes due 2027, including form thereof.

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4.10 Fourth Supplemental Indenture, dated as of October 26, 2017, between the Company and U.S.

Bank Trust C ompany, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 3.950% Senior Notes due 2028, including form thereof.

1 unchanged sentence

4.11 Fifth Supplemental Indenture, dated as of February 2, 2018, between the Company and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.375% Senior Notes due 2030, including form thereof.

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4.12 Sixth Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association), relating to the Company’s 4.350% Senior Notes due 2024, including form thereof.

1 unchanged sentence

4.13 Seventh Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 4.750% Senior Notes due 2026, including form thereof.

1 unchanged sentence

4.14 Eighth Supplemental Indenture, dated as of September 18, 2019, between the Company and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association), relating to the Company’s 4.950% Senior Notes due 2029, including form thereof.

1 unchanged sentence

4.15 Ninth Supplemental Indenture, dated as of June 17, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association), relating to the Company’s 7.50% Senior Notes due 2025, including form thereof.

1 unchanged sentence

4.16 Supplemental Indenture, dated as of July 15, 2020, among the Company, Highway Ventures Properties Trust, HPTWN Properties Trust, HPT Suite Properties Trust, SVCN 2 LLC and U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 7.50% Senior Notes due 2025.

1 unchanged sentence

4.17 Supplemental Indenture, dated as of October 9, 2020, among the Company, Banner NewCo LLC, SVCN 3 LLC and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 7.50% Senior Notes due 2025.

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)

4.19 Supplemental Indenture, dated as of November 13, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S.

4.18 Supplemental Indenture, dated as of November 13, 2020, among the Company, SVC Jersey City TRS LLC, SVC Morris Plains TRS LLC, SVC Nanuet TRS LLC, SVC NJ TRS LLC, SVC Randolph Street TRS LLC, SVC R edondo Beach TRS LLC an d U.S.

Bank Tr ust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 7.50% Senior Notes due 2025.

1 unchanged sentence

4.19 Supplemental Indenture, dated as of January 29, 2021, among the Company, SVC Gatehall Drive TRS LLC and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association), relating to the Company’s 7.50% Senior Notes due 2025.

1 unchanged sentence

4.20 Supplemental Indenture, dated as of July 8, 2021, among the Company, SVCN 1 LLC, SVCN 4 LLC and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association), relating to the Company’s 7.50% Senior Notes due 2025.

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.)

4.22 Supplemental Indenture, dated as of October 28, 2021, among the Company, SVC Minneapolis TRS LLC and U.S.

4.21 Supplemental Indenture, dated as of October 28, 2021, among the Company, SVC Minneapolis TRS LLC U.S.

Bank National Association (as successor in interest to U.S.

Bank National Association), relating to the Company’s 7.50% Senior Notes due 2025.

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4.22 Tenth Supplemental Indenture, dated as of November 20, 2020, among the Company, certain subsidiaries of the Company named therein as guarantors and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 5.50% Senior Notes due 2027, including form thereof.

1 unchanged sentence

4.23 Supplemental Indenture, dated as of January 29, 2021, among the Company, SVC Gatehall Drive TRS LLC and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 5.50% Senior Notes due 2027.

1 unchanged sentence

4.24 Supplemental Indenture, dated as of July 8, 2021, among the Company, SVCN 1 LLC, SVCN 4 LLC and U.S.

Bank Trust Company , National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 5.50% Senior Notes due 2027.

1 unchanged sentence

4.25 Supplemental Indenture, dated as of October 28, 2021, among the Company, SVC Minneapolis TRS LLC and U.S.

Bank Trust Company, National Association (as successor in interest to U.S.

Bank National Association) , relating to the Company’s 5.50% Senior Notes due 2027.

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(+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 16 , 202 2 .)

10.5 2012 Equity Compensation Plan.

(+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 14, 2012.)

10.6 First Amendment to 2012 Equity Compensation Plan.

(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015.)

10.7 Form of Restricted Share Agreement.

10.5 Ser vice Properties Trust Amended and Restated 20 12 Equity Compensation Plan.

(+) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 16 , 20 2 2.)

10.6 Form of Share Award Agreement.

(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.)

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(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.)

10.15 Fifth Amendment to Amended and Restated Credit Agreement, dated as of April 14, 2022, among the Company , Wells Fargo Bank, National Association, as Administrative Agent, and each of the other institutions party thereto.

(Incorporated by reference to the Company’s Current Report on Form 8 - K f iled on April 2 0, 202 2 .)

10.16 Sixth Amendment to Amended and Restated Credit Agreement, dated as of October 4, 2022, among the Company , Wells Fargo Bank, National Association, as Administrative Agent, and each of the other institutions party thereto.

(Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 5 , 2022.)

10.17 Pledge Agreement, dated as of May 8, 2020, between the Company, certain of its direct and indirect Subsidiaries and Wells Fargo Bank, National Association.

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(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)

10.24 Third Amendment to Second Amended and Restated Credit Agreement, dated as of November 5, 2020, between the Company, Wells Fargo Bank, National Association, as Administrative Agent, and each of the other financial institutions signatory thereto.

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.)

10.25 Pledge Supplement No.

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(Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.)

10.28 Representative Form of Amended and Restated Management Agreement among Sonesta International Hotels Corporation, Cambridge TRS, Inc., HPT CY TRS, Inc., HPT TRS IHG-2, Inc.

and HRP TRS MRP, Inc.

(Sale Hotels) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 10, 2022).

(Schedules thereto filed herewith.) (Schedule of applicable agreements filed herewith.)

10.29 Amended, Restated and Consolidated Pooling Agreement for Sale Hotels, dated as of January 1, 2022, among Sonesta International Hotels Corporation, certain subsidiaries of the Company named therein as owners and certain subsidiaries of Sonesta International Hotels Corporation named therein as managers.

(Sale Hotels) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 10, 2022) .

( Schedules thereto f iled herewith.)

10.28 Stockholders Agreement, dated as of February 27, 2020, by and among Sonesta Holdco Corporation, the Company, SVC Holdings LLC, Adam D.

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( Retained Hotels) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 10, 2022).

(Schedules thereto filed herewith.) (Schedule of applicable agreements filed herewith.)

(Schedules thereto incorporated by reference to the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2021.) (Schedule of applicable agreements incorporated by reference to the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2021 .

10.30 Amended, Restated and Consolidated Pooling Agreement , dated as of January 1, 2022, among Sonesta International Hotels Corporation, certain subsidiaries of the Company named therein as owners and certain subsidiaries of Sonesta International Hotels Corporation named therein as managers.

( Retained Hotels) (Incorporated by reference to the Company’s Current Report on Form 8-K filed on January 10, 2022).

(Schedules thereto filed herewith.)

10.33 Second Amended and Restated Lease Agreement No.

1, dated as of October 14, 2019, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC.

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.)

(Schedules thereto incorporated by reference to the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2021 .

10.31 Second Amended and Restated Lease Agreement No.1 , dated as of October 14, 2019, among HPT TA Properties Trust, HPT TA Properties LLC and TA Oper at i ng LLC.

( I ncorporated by refer ence to the C ompany ’ s Q uarterly Report on Form 10-Q for the quarter ended September 30, 2019) .

10.32 First Amendment to Second Amended and Restated Lease Agreement No.

1, dated as of May 6, 2022, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC.

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.)

10.33 Amended and Restated Guaranty Agreement, dated as of October 14, 2019, by TravelCenters of America Inc.

10 unchanged sentences

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.)

10.37 First Amendment to Second Amended and Restated Lease Agreement No.

3, dated as of October 31, 2022, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC.

(Filed herewith.)

10.38 Amended and Restated Guaranty Agreement, dated as of October 14, 2019, by TravelCenters of America Inc.

9 unchanged sentences

4, dated as of November 9, 2021, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC.

(Filed herewith.)

(Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.)

10.42 Amended and Restated Guaranty Agreement, dated as of October 14, 2019, by TravelCenters of America Inc.

7 unchanged sentences

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019.)

10.45 Consent and Amendment Agreement, dated as of February 15, 2023, among the Company, HPT TA Properties Trust, HPT TRS Inc., HPT TA Properties LLC, Highway Ventures Properties Trust, Highway Ventures Properties LLC, TravelCenters of America Inc., TA Operating LLC and BP Products North America Inc.

(Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 21, 2022.)

10.46 Voting Agreement, dated as of February 15, 2023, between the Company and BP Products North America Inc.

(Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 21, 2022.)

21.1 Subsidiaries of the Company.

4 unchanged sentences

(Filed herewith.)

23.2 Consent of Ernst & Young LLP.

(Filed herewith.)

23.2 Consent of Sullivan & Worcester LLP.

4 unchanged sentences

(Filed herewith.)

31.3 Rule 13a-14(a) Certification.

(Filed herewith.)

31.4 Rule 13a-14(a) Certification.

(Filed herewith.)

32.1 Section 1350 Certification.

2 unchanged sentences

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.)

99.2 Letter Agreement, dated as of February 10, 2023, among the Company and The RMR Group LLC.

(Filed herewith.)

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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(Filed herewith.)

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

104 Cover Page Interactive Data File.

(formatted as Inline XBRL and contained in Exhibit 101)

(+) Management contract or compensatory plan or arrangement.

As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not filed with this Annual Report on Form 10-K certain instruments defining the rights of holders of long-term debt of the Company and its subsidiaries because the total amount of securities authorized under any of such instruments does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.

Form 10-K Summary

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Service Properties Trust (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income (loss), shareholders' equity, and cash flows for the years ended December 31, 2021 and 2020, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years ended December 31, 2021 and 2020, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Service Properties Trust (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income (loss), shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the schedule listed in the Index at Item 15(a) (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

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The Company’s investments in real estate assets are evaluated for impairment periodically or when events or changes in circumstances indicate that the carrying amount of a real estate asset may not be recoverable.

Impairment indicators may include declining tenant or resident occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, the Company’s decision to dispose of an asset before the end of its estimated useful life, and legislative, market or industry changes that could permanently reduce the value of an asset.

Impairment indicators may include declining tenant occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, the Company’s decision to dispose of an asset before the end of its estimated useful life, and legislative, market or industry changes that could permanently reduce the value of an asset.

If indicators of impairment are identified for any real estate asset, the Company evaluates the recoverability of that real estate asset by comparing undiscounted future cash flows expected to be generated by the real estate asset over the Company’s expected remaining hold period to the respective carrying amount.

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February 28, 2023

Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of Service Properties Trust

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of comprehensive income, shareholders' equity and cash flows of Service Properties Trust (the “Company”) for the year ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Company’s auditor from 2002 to 2020.

Boston, Massachusetts

February 28, 2020

SERVICE PROPERTIES TRUST

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Restricted cash 7,051 3,375

Equity method investments 112,617 62,687

Investment in equity securities 53,055 61,159

Due from related persons 35,033 48,168

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Gain on sale of real estate, net 47,818 11,522 2,261

Dividend income — — 1,752

Gain on insurance settlement — — 62,386

Unrealized gains (losses) on equity securities, net 22,535 19,882 ( 40,461 )

Unrealized (losses) gains on equity securities, net ( 8,104 ) 22,535 19,882

Interest income 3,379 664 284

2 unchanged sentences

Loss on early extinguishment of debt ( 791 ) — ( 9,394 )

Income (loss) before income taxes and equity in earnings (losses) of an investee ( 544,603 ) ( 284,261 ) 262,150

Loss before income taxes and equity in earnings (losses) of an investee ( 135,436 ) ( 544,603 ) ( 284,261 )

Income tax benefit (expense) 199 941 ( 17,211 )

Equity in earnings (losses) of an investee 2,856 ( 941 ) ( 9,910 )

Net income (loss) ( 544,603 ) ( 311,382 ) 259,750

Net loss ( 132,381 ) ( 544,603 ) ( 311,382 )

Other comprehensive income (loss):

1 unchanged sentence

Other comprehensive income (loss) 1,604 1,539 ( 760 )

Comprehensive income (loss) $ ( 543,064 ) $ ( 312,142 ) $ 259,841

Comprehensive loss $ ( 130,777 ) $ ( 543,064 ) $ ( 312,142 )

Weighted average common shares outstanding (basic) 164,738 164,566 164,222

Weighted average common shares outstanding (diluted) 164,738 164,566 164,222

Net income (loss) available for common shareholders per common share (basic and diluted) $ ( 3.31 ) $ ( 1.89 ) $ 1.58

Net loss available for common shareholders per common share (basic and diluted) $ ( 0.80 ) $ ( 3.31 ) $ ( 1.89 )

The accompanying notes are an integral part of these consolidated financial statements.

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Balance at December 31, 2019 164,563,034 $ 1,646 $ ( 5,534,942 ) $ 4,547,529 $ 3,491,645 $ — $ 2,505,878

Net income — — — — 259,750 — 259,750

Amounts reclassified from cumulative other comprehensive income to net income — — — — — 175 175

Equity in unrealized gains of investees — — — — — 91 91

Net loss — — — — ( 311,382 ) — ( 311,382 )

Equity in unrealized losses of investees — — — — — ( 760 ) ( 760 )

Common share grants 305,400 2 — 3,209 — — 3,211

Common share repurchases ( 33,775 ) — — ( 807 ) — — ( 807 )

Common share repurchases and forfeitures ( 44,601 ) — — ( 353 ) — — ( 353 )

Distributions — — ( 93,804 ) — — — ( 93,804 )

1 unchanged sentence

Net loss — — — — ( 544,603 ) — ( 544,603 )

Equity in unrealized losses of investees — — — — — ( 760 ) ( 760 )

Equity in unrealized gains of investees — — — — — 1,539 1,539

Common share grants 340,700 3 — 2,964 — — 2,967

15 unchanged sentences

Cash flows from operating activities:

Net income (loss) $ ( 544,603 ) $ ( 311,382 ) $ 259,750

Net loss $ ( 132,381 ) $ ( 544,603 ) $ ( 311,382 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

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Loss on asset impairment 10,989 78,620 55,756

Unrealized (gains) losses on equity securities, net ( 22,535 ) ( 19,882 ) 40,461

Unrealized losses (gains) on equity securities, net 8,104 ( 22,535 ) ( 19,882 )

Equity in (earnings) losses of an investee ( 2,856 ) 941 9,910

Distribution of earnings from Affiliates Insurance Company — — 2,423

Gain on sale of real estate, net ( 47,818 ) ( 11,522 ) ( 2,261 )

14 unchanged sentences

Net proceeds from sale of real estate 554,087 51,412 167,542

Net proceeds from sale of equity securities — — 93,892

Investment in Sonesta ( 45,470 ) ( 25,443 ) ( 5,314 )

1 unchanged sentence

Distributions in excess of earnings from Affiliates Insurance Company — 12 286

Net cash used in investing activities ( 101,310 ) ( 51,807 ) ( 2,130,044 )

Net cash provided by (used in) investing activities 397,253 ( 101,310 ) ( 51,807 )

Cash flows from financing activities:

7 unchanged sentences

Distributions to common shareholders ( 38,044 ) ( 6,596 ) ( 93,804 )

Net cash provided by financing activities 907,368 24,400 1,517,578

Increase in cash and cash equivalents and restricted cash 855,962 10,197 5,256

Net cash (used in) provided by financing activities ( 1,542,378 ) 907,368 24,400

(Decrease) increase in cash and cash equivalents and restricted cash ( 901,998 ) 855,962 10,197

Cash and cash equivalents and restricted cash at beginning of year 947,418 91,456 81,259

24 unchanged sentences

Hereinafter, these companies are sometimes referred to as managers and/or tenants, or collectively, operators.

Impact of COVID-19

Since March 2020, the lodging industry and certain other industries in which our managers and certain tenants operate have been adversely impacted by the COVID-19 global pandemic, along with federal, state and local government mandates intended to contain and mitigate the spread of COVID-19 and market reactions to the pandemic.

The effects of COVID-19 continue to have a significant negative impact on our results of operations, financial position and cash flow.

Although lodging demand improved during the year ended December 31, 2021 when compared to 2020 levels, we do not know when or if lodging business levels will return to historical pre-pandemic levels.

To mitigate the effects of the pandemic and the increased variability in operating cashflows from our hotels, we continue to work with our hotel managers to contain costs where possible.

We are prioritizing, deferring, or strategically planning capital improvements to mitigate potential disruptions to hotel results.

We also continue to pay only a nominal quarterly dividend of $ 0.01 per common share to preserve our liquidity.

As of February 22, 2022, we have $ 959,467 of cash or cash equivalents.

We also have entered agreements to sell 45 properties for an aggregate sales price of $ 402,365 and have letters of intent or are in the process of marketing 43 additional properties with an aggregate carrying value of $ 150,962 .

Our $ 1,000,000 revolving credit facility matures on July 15, 2022 and we have $ 500,000 of unsecured senior notes due on August 15, 2022.

We currently expect we will be able to either repay or extend the maturity of our debt coming due in 2022.

We believe that our current financial resources, actions we have taken and are in the process of taking and our expectations as to the future performance of the lodging industry and the industries in which our net lease retail tenants operate and our fully collateralized revolving credit facility will provide us sufficient liquidity and enable us to withstand the COVID-19 pandemic and its aftermath.

See Notes 4 and 6 for additional information regarding our asset sales and debt.

Summary of Significant Accounting Policies

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For transactions that qualify as business combinations, we allocate the excess, if any, of the consideration over the fair value of the assets acquired to goodwill.

We depreciate real estate properties on a straight line basis over estimated useful lives of up to 40 years for buildings and improvements and up to 12 years for personal property and we amortize finite lived intangible assets over the shorter of their useful lives or the term of the

associated lease.

In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determination of useful lives;

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Intangible assets consist primarily of trademarks and tradenames, acquired above market operating leases where we are the lessor and below market ground leases for which we are the tenant or lessee.

Intangible liabilities consist of acquired below market operating leases where we are the lessor and acquired above market ground leases for which we are the tenant or lessee.

We include intangible assets in acquired real estate leases and other intangibles and intangible liabilities in accounts payable and other liabilities in our consolidated balance sheets.

Intangible liabilities consist of acquired below market operating leases where we are the lessor and acquired above market ground leases

for which we are the tenant or lessee.

We include intangible assets in acquired real estate leases and other intangibles, net and intangible liabilities in accounts payable and other liabilities in our consolidated balance sheets.

At December 31, 2022 and 2021, our intangible assets and liabilities were as follows:

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$ 958 $ 1,193

We amortize above and below market leases on a straight line basis over the term of the associated lease ( three and six years on a weighted average basis for intangible liabilities and assets, respectively).

We amortize above and below market leases on a straight line basis over the term of the associated lease ( 9.5 and 7.3 years on a weighted average basis for intangible liabilities and assets, respectively).

For the years ended December 31, 2022, 2021 and 2020, amortization relating to intangible assets was $ 30,775 , $ 41,648 and $ 52,264 , respectively, and amortization relating to intangible liabilities was $ 235 , $ 433 and $ 2,403 for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2021, the weighted average amortization period for capitalized above market leases and below market lease values were 7.2 years and 4.5 years, respectively.

As of December 31, 2022, the weighted average amortization period for capitalized above market leases and below market lease values were 7.1 and 9.5 , respectively.

As of December 31, 2022, we estimate future amortization relating to intangible assets and liabilities as follows:

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As of December 31, 2022 and 2021, debt issuance costs for our revolving credit facility were $ 6,214 and $ 14,879 , respectively, and accumulated amortization of debt issuance costs for our revolving credit facility were $ 3,925 and $ 8,796 , respectively.

Debt issuance costs, net of accumulated amortization, for our senior notes, and our historical term loan, are presented as a direct deduction from the associated debt liability in our consolidated balance sheets.

As of December 31, 2021 and 2020, debt issuance costs, net of accumulated amortization, for our senior notes were $ 33,736 and $ 41,974 , respectively.

Future amortization of debt issuance costs to be recognized with respect to our revolving credit facility and senior notes as of December 31, 2021, are as follows:

Debt issuance costs, net of accumulated amortization, for our unsecured senior notes, and our historical term loan, are presented as a direct deduction from the associated debt liability in our consolidated balance sheets.

As of December 31, 2022 and 2021, debt issuance costs, net of accumulated amortization, for our unsecured senior notes were $ 25,545 and $ 33,736 , respectively.

Future amortization of debt issuance costs to be recognized with respect to our revolving credit facility and unsecured senior notes as of December 31, 2022, are as follows:

Future Amortization of Debt Issuance Costs

2022 $ 14,280

Thereafter 1,578

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Portnoy, one of our Managing Trustees who also serves as one of Sonesta’s directors, is the controlling shareholder.

One of Sonesta’s other directors is our other Managing Trustee, President and Chief Executive Officer and Sonesta’s other director serves as The RMR Group LLC, or RMR LLC’s, and The RMR Group Inc., or RMR Inc.’s, executive vice president, general counsel and secretary and as our Secretary.

Certain of Sonesta’s officers are officers of RMR LLC.

Certain other officers and employees of Sonesta are former employees of RMR LLC.

RMR LLC also provides certain services to Sonesta.

One of Sonesta’s other directors is our other Managing Trustee, and Sonesta’s other director serves as The RMR Group LLC, or RMR’s, and The RMR Group Inc., or RMR Inc.’s, executive vice president, general counsel and secretary and as our Secretary.

Certain of Sonesta’s officers are officers of RMR.

Certain other officers and employees of Sonesta are former employees of RMR.

RMR also provides certain services to Sonesta.

See Notes 5 and 10 for a further discussion of our investment in and relationships with Sonesta.

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hotel investments and net lease investments.

Reclassifications.

Reclassifications have been made to the prior years’ consolidated financial statements to conform to the current year’s presentation.

Income Taxes.

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We recorded a $ 62,386 gain on insurance settlement during the year ended December 31, 2020 for insurance proceeds received for this damage.

Under GAAP, we were required to increase the building basis of our San Juan hotel for the amount of the insurance proceeds.

Pursuant to GAAP, we increased the building basis of our San Juan hotel for the amount of the insurance proceeds.

At December 31, 2022, 13 of our hotels were on land we leased partially or entirely from unrelated third parties.

The average remaining term of the ground leases (including renewal options) is approximately 33 years (range of 12 to 65 years).

Ground rent payable under nine of the ground leases is generally calculated as a percentage of hotel revenues.

Ground rent payable under eight of the ground leases is generally calculated as a percentage of hotel revenues.

Twelve of the 13 ground leases require annual minimum rents averaging $ 344 per year;

future rents under two ground leases have been prepaid.

Sixteen ( 16 ) of our net lease properties are on land we leased partially or entirely from unrelated third parties.

15 of our net lease properties are on land we leased partially or entirely from unrelated third parties.

The remaining terms on the leases range from one year to 19 years with rents averaging $ 435 per year.

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Properties acquired during the year ended December 31, 2022

3/9/2021 Nashville, TN Net Lease — $ 7,709 $ 7,709 $ — $ — $ — $ — $ —

9/12/2022 Stoughton, MA Land — $ 2,766 $ 2,766 $ — $ — $ — $ — $ —

Properties acquired during the year ended December 31, 2021

3/12/2020 Two states Net Lease 6,696 $ 7,071 $ 880 $ — $ 5,363 $ — $ — $ 828

3/9/2021 Nashville, TN Land — $ 7,709 $ 7,709 $ — $ — $ — $ — $ —

Properties acquired during the year ended December 31, 2020

2/22/2019 Washington, D.C.

Hotel 335 $ 143,742 $ 44,972 $ 151 $ 93,412 $ 5,207 $ — $ —

5/7/2019 Milwaukee, WI Hotel 198 30,235 3,442 1,053 25,132 608 — —

8/1/2019 Southington, CT Land N.A.

66 66 — — — — —

9/20/2019 Various (2)

Net Lease 12,372,762 2,482,382 388,057 — 1,201,922 — 604,989 287,414

10/9/2019 Chicago, IL Hotel 261 55,560 7,723 — 45,059 2,778 — —

$ 2,711,985 $ 444,260 $ 1,204 $ 1,365,525 $ 8,593 $ 604,989 $ 287,414

3/12/2020 Two states Net Lease 6,696 $ 7,071 $ 880 $ — $ 5,363 $ — $ — $ 828

(1) Includes acquisition related costs.

(2) On September 20, 2019, we acquired a 767 property net lease portfolio with 12.4 million rentable square feet from Spirit MTA REIT, a Maryland REIT, (NYSE:

SMTA), or SMTA, located in 45 states, or the SMTA Transaction.

The aggregate transaction value of the SMTA Transaction was $ 2,482,382 , including $ 2,384,577 in cash consideration, $ 82,069 of prepayment penalties related to SMTA’s extinguishment of the mortgage debt on the portfolio and $ 15,736 of other capitalized acquisition costs.

The properties included in the portfolio were net leased to 279 tenants operating in 23 distinct industries and 163 brands that include quick service and casual dining restaurants, movie theaters, health and fitness, grocery, automotive parts and services and other service-oriented and necessity-based industries across 45 states.

We financed the SMTA Transaction with borrowings under our revolving credit facility and with cash on hand, including net proceeds from our public offerings of senior unsecured notes, as described further in Note 6.

As of December 31, 2021, we had $ 4,310 of unspent leasing related obligations assumed as a part of the SMTA Transaction.

During the years ended December 31, 2022, 2021 and 2020 we sold 86 , 18 and 39 properties, respectively, for an aggregate sales price of $ 559,848 , $ 52,332 and $ 174,172 , respectively, excluding closing costs, as presented in the table below.

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Properties sold during the year ended December 31, 2020

2020 Hotels 18 2,046 $ 85,787 $ 17,550

2020 Net Lease 21 1,375,483 88,385 ( 15,289 )

In January 2022, we sold one hotel with 295 rooms and a carrying value of $ 12,016 for a sales price of $ 19,000 , excluding closing costs.

We have also entered into agreements to sell 45 hotels with 5,680 rooms and an aggregate carrying value of $ 352,540 for an aggregate sales price of $ 402,365 , excluding closing costs and have letters of intent or are in the process of marketing 43 additional properties with an aggregate carrying value of $ 150,962 .

We currently expect the sale of these properties to be completed by the end of the second quarter of 2022.

As of December 31, 2021, we had 67 hotels with 8,667 rooms with an aggregate carrying value of $ 503,078 classified as held for sale and 22 net lease properties with 154,206 square feet with an aggregate carrying value of $ 12,440 classified as held for sale.

39 2,046 / 1,375,483

$ 174,172 $ 2,261

From January 1, 2023 through February 24, 2023, we sold eight hotels with 1,097 rooms and a carrying value of $ 47,517 for a sale price of $ 53,268 , excluding closing costs.

We have also entered into agreements to sell ten hotels with 1,429 rooms and an aggregate carrying value of $ 62,698 for an aggregate sales price of $ 103,056 and two net lease properties with 2,384 square feet with an aggregate carrying value of $ 648 for an aggregate sales price of $ 670 , excluding closing costs and are in the process of marketing two net lease properties with a carrying value of $ 729 .

We currently expect the sale of these properties to be completed by the end of the first quarter of 2023.

As of December 31, 2022, we had 18 hotels with 2,526 rooms with an aggregate carrying value of $ 110,215 classified as held for sale and four net lease properties with 9,667 square feet with an aggregate carrying value of $ 1,377 classified as held for sale.

See Notes 5 and 14 for further information on these properties.

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We subsequently decided to suspend pursuing the sale of these 39 hotels based on market conditions;

however, as noted below, we and Sonesta decided to sell 68 of our hotels managed by Sonesta, which includes many of these 39 hotels we had previously targeted for sale, rebranding or repurposing;

we subsequently sold one of the 68 hotels in December 2021;

see Note 4 for further information regarding that sale;

• The annual owner’s priority returns due for the 14 full-service hotels that Sonesta then managed and continues to manage were reduced from $ 99,013 to $ 69,013 as of that date;

• Sonesta issued to us a number of its shares of common stock representing approximately (but not more than) 34 % of its outstanding shares of common stock (post-issuance) and we entered into a stockholders agreement with Sonesta, Adam Portnoy and the other stockholder of Sonesta and a registration rights agreement with Sonesta;

however, as noted below, we and Sonesta later decided to sell 68 of our hotels managed by Sonesta, which includes many of these 39 hotels we had previously targeted for sale, rebranding or repurposing;

we subsequently sold 66 of those 68 hotels as of December 31, 2022;

see Note 4 for further information regarding those sales;

• The annual owner’s priority returns for the 14 full-service hotels that Sonesta then managed and continues to manage were reduced from $ 99,013 to $ 69,013 as of that date;

• Sonesta issued to us approximately 34 % of its outstanding shares of common stock (post-issuance) and we entered into a stockholders agreement with Sonesta, Adam Portnoy and the other stockholder of Sonesta and a registration rights agreement with Sonesta;

• We and Sonesta modified our then existing management agreements and pooling agreement so that 5 % of the hotel gross revenues of each of our 14 full-service hotels then managed by Sonesta will be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the annual owner’s priority returns due to us under the management agreements;

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• We and Sonesta extended the initial expiration date of the then existing management agreements for our full-service hotels managed by Sonesta located in Chicago, IL and Irvine, CA to January 2037 to align with the initial expiration date for our other full-service hotels then managed by Sonesta.

We refer to the amended and restated management agreements in effect as of February 27, 2020 as the legacy management agreements and we refer to the amended and restated pooling agreement that includes those legacy management agreements as the legacy pooling agreement.

We previously leased 48 vacation units to Wyndham Destinations, Inc.

WYND), or Destinations, at our full-service hotel located in Chicago, IL, which Sonesta began managing in November 2019 and which had previously been managed by Wyndham.

Effective March 1, 2020, Sonesta commenced managing those units and those units were added to our legacy management agreement with respect to that Chicago hotel.

Between September 18, 2020 and December 15, 2020, we transferred the branding and management of 115 hotels previously managed by IHG, Marriott and Wyndham to Sonesta.

In February and March 2021, we transitioned the branding and management of 88 hotels to Sonesta from Marriott.

We entered into management agreements with Sonesta with respect to these hotels on terms substantially consistent with our legacy management agreements, except that the management agreements for these transitioned hotels were scheduled to expire on December 31, 2021 and automatically renew for successive one year terms unless terminated earlier.

We refer to these management agreements as the conversion hotel management and pooling agreements and together with the legacy management agreements and legacy pooling agreements, as applicable, the Sonesta agreements.

In June 2021, we transitioned the branding and management of five hotels to Sonesta from Hyatt and on

November 1, 2021, we transitioned the branding and management of one additional hotel to Sonesta from Radisson.

We added these hotels to our conversion hotel management and pooling agreements with Sonesta.

Our Sonesta agreements provided that we be paid a fixed annual owner’s priority return equal to 8 % of our invested capital, as defined therein, if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so.

Our Sonesta agreements further provide that we are paid an additional return equal to 80 % of the remaining operating profits, as defined therein, after reimbursement of owner or manager advances, FF&E reserve escrows and Sonesta’s incentive fee, if applicable.

We realized returns from our Sonesta hotels of $ 53,853 during the year ended December 31, 2021.

We refer to the management agreements and pooling agreements in effect as of February 27, 2020 as the legacy agreements.

Amended and Restated Management and Pooling Agreements with Sonesta

Effective January 1, 2022, we and Sonesta amended our management agreements.

We refer to these management agreements with Sonesta collectively as our Sonesta agreement.

As of that date, we owned 261 hotels managed by Sonesta and 67 of these hotels were expected to be sold, or the Sale Hotels.

Among other things, the amendments to the agreements between us and Sonesta for 194 hotels, or the Retained Hotels, were as follows:

• The term for the Retained Hotels expires on January 31, 2037 and includes two 15 -year renewal options.

• All Retained Hotels are subject to a pooling agreement that combines the management agreements for the Retained Hotels for purposes of calculating gross revenues, hotel operating expenses, fees and distributions and the owner’s priority return due to us.

• The owner’s priority return for the Retained Hotels was initially set at $ 325,200 annually.

We have the right to terminate Sonesta’s management of specific hotels if minimum performance thresholds are not met starting in 2023.

• We agreed to renovate the Retained Hotels to comply with agreed upon brand standards.

As we advance such funding or fund other capital expenditures, the aggregate annual owner’s priority return due to us will increase by 6 % of the amounts funded.

• Trade area restrictions by hotel brand have been added to define boundaries to protect our owned hotels in response to Sonesta increasing its franchising and third-party management activities.

In general, we and Sonesta may terminate a management agreement for a Retained Hotel for events of default, casualty and condemnation events, although Sonesta may not terminate for certain events of default.

We also have the right to terminate a management agreement for a Retained Hotel if minimum performance thresholds are not met starting in 2023 for any three of four applicable consecutive years.

Pursuant to the management agreement, we or Sonesta may be obligated to pay the other party damages if the terminating party terminates a management agreement due to the other party’s event of default.

For the Sale Hotels, the term was extended to December 31, 2022 (or, if earlier, the date the applicable hotel was sold) and the FF&E reserve funding requirement was removed.

We sold 65 of the Sale Hotels as of December 31, 2022 and the total annual owner’s priority return was reduced by $ 77,033 in connection with these sales.

As of December 31, 2022, the total priority return for the remaining two Sale Hotels was $ 7,238 .

Effective December 31, 2022, the terms of the management agreements for the remaining two Sale Hotels were extended to January 31, 2023 and automatically renew for successive one month periods until the applicable hotel is sold or the agreement is terminated.

The Sale Hotels are subject to a pooling agreement that combines the management agreements for the Sale Hotels for purposes of calculating gross revenues, hotel operating expenses, fees and distributions and the owner’s priority return due to us.

We sold one of the two remaining Sale Hotels in January 2023 and expect the remaining sale to be completed in March 2023.

Our Sonesta agreement provides that we are paid an annual owner’s priority return if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so.

The aggregate owner’s priority return for the 196 hotels Sonesta manages as of December 31, 2022 was $ 337,652 .

Our Sonesta agreement further provides that we are paid an additional return equal to 80 % of the remaining operating profits, as defined therein, after reimbursement of owner or manager advances, and with respect to the Retained Hotels, FF&E reserve escrows and Sonesta’s incentive fee, if applicable.

We realized returns of $ 196,721 and $ 53,853 during the years ended December 31, 2022 and 2021, respectively, under our Sonesta agreement.

Our Sonesta hotels generated net operating losses of $ 65,277 during the year ended December 31, 2020.

We realized returns from our Sonesta hotels of $ 67,592 during the year ended December 31, 2019.

We do not have any security deposits or guarantees for our Sonesta hotels.

Accordingly, the returns we receive from our Sonesta hotels are limited to the hotels’ available cash flows, if any, after payment of operating expenses, including management and related fees.

Our Sonesta agreements provide that Sonesta is entitled to receive, after payment of hotel operating expenses, a base management fee equal to 3.0 % of gross revenues for our full-service hotels and 5.0 % of gross revenues for our extended stay and select service hotels.

Additionally, Sonesta is entitled to a reservation fee equal to 1.5 % of gross room revenues, as defined in our Sonesta agreements, a system fee for centralized services of 1.5 % of gross revenues, a procurement and construction supervision fee equal to 3.0 % of third party costs of capital expenditures managed by Sonesta and an incentive management fee equal to 20.0 % of operating profits remaining after reimbursement to us and to Sonesta of certain advances, payment of our owner's priority returns and funding of FF&E reserve escrows.

Sonesta’s incentive management fee, but not its other fees, is earned only after our owner's priority returns are paid.

Our Sonesta agreements also provide that the costs incurred by Sonesta for advertising, marketing, promotional and public relations programs and campaigns, including “frequent stay” rewards programs, for the benefit of our Sonesta hotels are subject to reimbursement by us or are otherwise treated as hotel operating expenses, subject to our approval.

Pursuant to our Sonesta agreements, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third-party reservation transmission fees of $ 84,926 , $ 17,734 and $ 36,169 for the years ended December 31, 2021, 2020 and 2019, respectively.

Pursuant to our Sonesta agreement, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third-party reservation transmission fees of $ 114,563 , $ 84,926 and $ 17,734 for the years ended December 31, 2022, 2021 and 2020, respectively.

These fees and costs are included in hotel operating expenses in our consolidated statements of comprehensive income (loss).

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These amounts have been capitalized in our consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets.

Our Sonesta agreements require us to fund capital expenditures that we approve at our Sonesta hotels.

Commencing February 27, 2020, each of our 14 full-service hotels operated under the legacy management agreements and all the hotels operated under the conversion hotel management agreements managed by Sonesta require that 5 % of the hotel gross revenues be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the annual owner's priority returns due to us.

Our legacy management agreements do not require FF&E escrow deposits for 39 extended stay hotels.

No FF&E escrow deposits were required during the years ended December 31, 2021, 2020 and 2019 under our Sonesta agreements.

We incurred capital expenditures for certain hotels included in our Sonesta agreements of $ 93,472 , $ 62,963 and $ 114,081 during the years ended December 31, 2021, 2020 and 2019, respectively.

We owed Sonesta $ 17,248 , $ 26,096 and $ 15,537 for 2021 capital expenditure and reimbursements or for a previous overpayment of estimated owner's priority returns advanced at December 31, 2021, 2020 and 2019, respectively.

Sonesta owed us $ 4,592 for 2021 owner’s priority returns as of December 31, 2021.

Our Sonesta agreement requires us to fund capital expenditures that we approve at our Sonesta hotels.

We incurred capital expenditures for hotels included in our Sonesta agreement of $ 94,479 and $ 93,472 during the years ended December 31, 2022 and 2021, respectively, which resulted in increases in our contractual annual owner’s priority returns of $ 5,416 and $ 7,488 , respectively.

We owed Sonesta $ 8,889 and $ 17,248 for capital expenditures and other reimbursements at December 31, 2022, and 2021, respectively.

Sonesta owed us $ 2,975 and $ 4,592 for owner’s priority returns as of December 31, 2022 and 2021, respectively.

Amounts due from Sonesta are included in due from related persons and amounts owed to Sonesta are included in due to related persons in our consolidated balance sheets, respectively.

The management agreements for the Retained Hotels require that 5 % of the hotel gross revenues at each of the hotels be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the owner’s priority returns due to us.

No FF&E escrow deposits were required during the years ended December 31, 2022, 2021 or 2020.

We are required to maintain working capital for each of our hotels managed by Sonesta and have advanced a fixed amount based on the number of rooms in each hotel to meet the cash needs for hotel operations.

We had advanced $ 56,697 and $ 41,514 of initial working capital to Sonesta as of December 31, 2021 and 2020, respectively.

The sales of the hotels managed by Sonesta referenced above resulted in a return to us of working capital amounts we had previously advanced with respect to those hotels.

We had advanced $ 48,580 and $ 56,697 of initial working capital to Sonesta as of December 31, 2022 and 2021, respectively, net of any working capital returned to us on termination of the applicable management agreements in connection with such sales.

These amounts are included in other assets in our consolidated balance sheets.

Any remaining working capital would be returned to us upon termination in accordance with the terms of our Sonesta agreement.

Amended and Restated Management and Pooling Agreements with Sonesta

On January 7, 2022, we and Sonesta amended and restated our management agreements effective January 1, 2022.

As of that date, we owned 261 hotels managed by Sonesta and 67 of these hotels are expected to be sold, or the sale hotels.

Among other things, the amendments to the agreements between us and Sonesta for 194 hotels, or the retained hotels, are as follows:

• The term for the retained hotels expires on January 31, 2037 and includes two 15 -year renewal options.

• All retained hotels are subject to a pooling agreement that combines the management agreements for the retained hotels for purposes of calculating gross revenues, hotel operating expenses, fees and distributions and the owner’s priority return due to us.

• The owner’s priority return for the retained hotels is initially set at $ 325,200 annually.

We have the right to terminate Sonesta’s management of specific hotels that we own if minimum performance thresholds are not met starting in 2023.

• We will renovate the retained hotels to comply with agreed upon brand standards.

As we advance such funding or fund other capital expenditures, the aggregate annual owner’s priority return due to us will increase by 6 % of the amounts funded.

• Trade area restrictions by hotel brand have been added to define boundaries to protect our owned hotels in response to Sonesta increasing its franchising and third-party management activities.

In general, we and Sonesta may terminate a management agreement for a retained hotel for events of default, casualty and condemnation events, although Sonesta may not terminate for certain events of default.

We also have the right to terminate a management agreement for a retained hotel if minimum performance thresholds are not met starting in 2023 for any three of four applicable consecutive years.

We and Sonesta can terminate a management agreement due to an event of default of the other party, although Sonesta may not terminate for certain events of default.

For the sale hotels, the term was extended to the earlier of December 31, 2022 (or until the applicable hotel has been sold) and the FF&E reserve funding requirement was removed.

We can terminate a management agreement due to a Sonesta event of default.

Pursuant to the management agreement, Sonesta may be obligated to pay us damages if we terminate a management agreement for a sale hotel due to Sonesta’s event of default.

Our owner’s priority return will be reduced by the current owner’s priority return for a sale hotel once sold.

The total owner’s priority for all the sale hotels is $ 84,653 .

The sale hotels are subject to a pooling agreement that combines the management agreements for the sale hotels for purposes of calculating gross revenues, hotel operating expenses, fees and distributions and the owner’s priority return due to us.

Accounting for Investment in Sonesta:

We account for our 34.0 % non-controlling interest in Sonesta under the equity method of accounting.

Our investment in Sonesta had a carrying value of $ 62,687 and $ 36,646 as of December 31, 2021 and 2020, respectively.

This amount is included in other assets in our consolidated balance sheets.

The cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total shareholders’ equity book value on the date of acquisition, February 27, 2020, by an aggregate of $ 8,000 .

As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 31 years, the weighted average remaining useful life of the real estate assets and intangible assets and liabilities owned by Sonesta as of the date of our acquisition.

We recorded amortization of the basis difference of $ 260 and $ 217 in the years ended December 31, 2021 and 2020, respectively.

In March 2021, we funded a $ 25,443 capital contribution to Sonesta related to its acquisition of Red Lion Hotels Corporation to maintain our pro rata ownership.

We recognized losses of $ 941 and $ 9,910 related to our investment in Sonesta for the years ended December 31, 2021 and 2020, respectively.

These amounts are included in equity in earnings (losses) of an investee in our consolidated statements of comprehensive income.

We recorded a liability of $ 42,000 for the fair value of our initial investment in Sonesta, as no cash consideration was exchanged related to the modification of our management agreement with, and investment in, Sonesta.

This liability for our investment in Sonesta is included in accounts payable and other liabilities in our consolidated balance sheet and is being amortized on a straight-line basis through January 31, 2037, as a reduction to hotel operating expenses in our consolidated statements of comprehensive income (loss).

We reduced hotel operating expenses by $ 2,484 and $ 2,070 for the year ended December 31, 2021 and 2020, respectively, for amortization of this liability.

As of December 31, 2021 and 2020, the unamortized balance of this liability was $ 37,447 and $ 39,930 , respectively.

See Note 9 for further information regarding our relationship, agreements and transactions with Sonesta.

See Notes 4, 6 and 10 for further information regarding our relationship, agreements and transactions with Sonesta.

Between September 18, 2020 and December 15, 2020, we transferred the branding and management of 115 hotels previously managed by IHG, Marriott and Wyndham to Sonesta.

In February and March 2021, we transitioned the branding and management of 88 hotels to Sonesta from Marriott.

In June 2021, we transitioned the branding and management of five hotels to Sonesta from Hyatt and in November 2021, we transitioned the branding and management of one additional hotel to Sonesta from Radisson.

We entered into management agreements with Sonesta with respect to these hotels on terms substantially consistent with our legacy agreements and added them to our applicable pooling agreement.

These hotel management agreements were further amended as part of the amendments we entered into with Sonesta in February 2022 and were included in our applicable pooling agreements with Sonesta.

Hyatt agreement.

On June 7, 2021, we and Hyatt amended our Hyatt agreement.

Under our Hyatt agreement, as amended, Hyatt will continue to manage 17 of the hotels we own for a 10 year term effective April 1, 2021.

Our amended Hyatt agreement sets our annual owner's priority return at $ 12,000 and Hyatt provided us with a new $ 30,000 limited guarantee for 75 % of the aggregate annual owner's priority returns due to us beginning in 2023.

Under our amended Hyatt agreement, a management fee of 5 % of gross room revenues payable to Hyatt will be an operating cost paid senior to our owner's priority return.

Hyatt may also earn a 20 % incentive management fee after payment of our annual owner's priority returns and reimbursement of certain advances, if any.

We also agreed to fund approximately $ 50,000 of renovations that are expected to be completed by the end of 2022.

As described above, we transitioned the branding and management of the remaining five hotels that Hyatt previously managed to Sonesta in June 2021.

We realized returns of $ 9,388 during the year ended December 31, 2021 and $ 22,037 for each of the years ended December 31, 2020 and 2019, respectively, under this agreement.

Hyatt had previously provided us with a guaranty, which was limited to $ 50,000 under the previous agreement.

During the year ended December 31, 2020, the hotels under this agreement generated cash flows that were less than the minimum rents due to us for the period and we exhausted the remaining $ 19,120 limited guaranty available to us to cover the shortfall.

As of December 31, 2022, Hyatt managed 17 of our select service hotels pursuant to a portfolio management agreement that expires on March 31, 2031, or our Hyatt agreement, and provides that, as of December 31, 2022, we are to be paid an annual owner’s priority return of $ 12,773 .

Any returns we receive from Hyatt are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses.

During the year ended December 31, 2021, we expensed $ 3,700 of working capital we previously funded under our Hyatt agreement because the amount is no longer expected to be recoverable.

Hyatt has provided us with a $ 30,000 limited guarantee for 75 % of the aggregate annual owner's priority returns due to us that will become effective upon substantial completion of planned renovations of the hotels which we currently expect to occur in 2023.

We realized returns of $ 12,281 , $ 9,388 and $ 22,037 for the years ended December 31, 2022, 2021 and 2020, respectively, under our Hyatt agreement.

During the year ended December 31, 2020, the hotels under this agreement generated cash flows that were less than the minimum returns due to us for the period and we exhausted the remaining $ 19,200 limited guaranty available to us to cover the shortfall.

During the year ended December 31, 2021, we expensed $ 3,700 of working capital we previously funded under our Hyatt agreement because the amount was no longer expected to be recoverable.

This amount is included in transaction related costs in our consolidated statement of income (loss).

We incurred capital expenditures for certain hotels included in our Hyatt agreement of $ 11,845 during the year ended December 31, 2022, which resulted in an aggregate increase in our contractual annual owner’s priority returns of $ 754 .

We did not incur capital expenditures for any of the hotels included in our Hyatt agreement during the year ended December 31, 2021.

Radisson agreement .

On November 1, 2021, we amended our Radisson agreement.

Under our Radisson agreement, as amended, Radisson will continue to manage eight of the hotels we own for a 10 year term effective August 1, 2021.

Our amended Radisson agreement sets our annual owner's priority returns at $ 10,200 and Radisson provided us with a new $ 22,000 limited guarantee for 75 % of the aggregate annual owner's priority returns due to us beginning in 2023.

Under our amended Radisson agreement, a management fee of 5 % of gross room revenues for each hotel operated under the Country Inn & Suites brand and a management fee of 3 % of gross room revenues for each hotel managed under the Radisson Hotel brand payable to Radisson will be an operating cost paid senior to our owner's priority returns.

Radisson may also earn a 20 % incentive management fee after payment of our annual owner's priority returns and reimbursement of certain advances, if any.

We also agreed to fund approximately $ 12,000 of renovations that are expected to be completed by the end of 2022.

As described above, we transitioned the management and branding of the ninth hotel that Radisson previously managed to Sonesta on November 1, 2021.

We realized returns of $ 11,364 , $ 20,456 and $ 20,056 during the years ended December 31, 2021, 2020 and 2019, respectively, under this agreement.

As of December 31, 2022, Radisson managed eight of our full service hotels pursuant to a portfolio management agreement that expires on July 31, 2031, or our Radisson agreement, and provides that we are to be paid an annual owner’s priority return of $ 10,200 .

Any returns we receive from Radisson are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses.

Radisson has provided us with a $ 22,000 limited guarantee for 75 % of the aggregate annual owner's priority returns due to us that became effective on January 1, 2023 subject to adjustment for the planned renovations of certain of the hotels we currently expect to occur in 2023.

We realized returns of $ 6,387 , $ 11,364 and $ 20,456 for the years ended December 31, 2022, 2021 and 2020, respectively, under our Radisson agreement.

Radisson had previously provided us with a guaranty, which was limited to $ 47,253 .

During the year ended December 31, 2021, the hotels under our Radisson agreement generated cash flows that were less than the minimum returns due to us and Radisson made $ 13,238 of guaranty payments to cover part of the shortfall and the Radisson guaranty was exhausted.

We incurred capital expenditures of $ 3,433 for the hotels included in our Radisson agreement for the year ended December 31, 2022.

We did not incur capital expenditures for any of the hotels included in our Radisson agreement during the year ended December 31, 2021.

Marriott agreement .

As of January 1, 2021, Marriott managed 105 of our hotels under agreements we had terminated in 2020 for Marriott’s failure to pay the cumulative shortfall between the payments we had received and 80 % of the cumulative priority returns due to us in accordance with the agreement.

We transitioned the branding and management of 88 Marriott managed hotels to Sonesta in February and March 2021.

We sold one hotel that Marriott managed in April 2021 (see Note 4 for further information regarding this sale).

As of December 31, 2022, Marriott managed 16 of our hotels.

We were previously in arbitration proceedings with Marriott regarding, among other things, the timing and characterization of certain payments made to us, and the validity of the timing of the termination of the Marriott agreements, including an exit hotel agreement which, if not terminated, would require us to sell the 16 hotels encumbered with a Marriott brand.

We were also seeking repayment of certain working capital advances we made to Marriott during 2020.

We entered an agreement with Marriott regarding the 16 hotels noted above, pursuant to which we agreed to have these hotels remain Marriott branded hotels until the arbitration was resolved.

On January 18, 2022, the arbitration panel declined to award us the $ 19,920 we had sought relating to certain working capital advances we made to Marriott under the applicable management agreements, but awarded us approximately $ 1,084 in connection with a related claim and determined we would own the remaining 16 hotels unencumbered by Marriott contracts.

As a result, during the year ended December 31, 2021, we expensed $ 18,035 of working capital we previously funded under our Marriott agreement because the amount is no longer expected to be recoverable.

This amount is included in transaction related costs in our consolidated statement of income (loss).

We expect to sell or transition the branding and management of the remaining 16 Marriott branded hotels to Sonesta in the second quarter of 2022.

We realized returns of $ 2,830 during the year ended December 31, 2021 under our Marriott agreement.

Any returns we receive from Marriott are limited to the hotels’ available cash flows, if any, after payment of operating expenses.

Marriott managed 122 of our hotels during years ended December 31, 2020 and 2019.

We realized returns of $ 93,593 and $ 190,492 during the years ended December 31, 2020 and 2019, respectively, under our agreement with Marriott.

We were previously in arbitration proceedings with Marriott regarding, among other things, the validity of the timing of the termination of the Marriott agreements in 2020.

During the period of arbitration, we entered into an agreement with Marriott regarding the 16 hotels currently managed by Marriott, pursuant to which we agreed to have these hotels remain Marriott branded until the arbitration was resolved.

On January 18, 2022, the arbitration concluded.

As of February 24, 2023, we have sold seven Marriott branded hotels and we have entered agreements to sell the remaining nine hotels for an aggregate sales price of $ 88,476 , excluding closing costs.

These pending sales are subject to conditions;

as a result, these sales may not occur, may be delayed or their terms may change.

See Note 4 for further information regarding these sales.

We realized returns of $ 8,942 , $ 2,830 and $ 93,593 during the years ended December 31, 2022, 2021 and 2020, respectively, under our Marriott agreement.

Marriott had previously provided a limited guaranty and security deposit, which were both exhausted in 2020 to cover shortfalls between cash flows from our hotels and our minimum returns.

We incurred capital expenditures for certain hotels included in our Marriott agreement of $ 7,394 , $ 65,840 and $ 51,056 during the years ended December 31, 2021, 2020 and 2019, respectively.

Any returns we receive from Marriott are limited to the hotels’ available cash flows, if any, after payment of operating expenses.

We did not incur capital expenditures for any of the hotels included in our Marriott agreement during the year ended December 31, 2022.

We incurred capital expenditures of $ 7,394 and $ 65,840 for the hotels included in our Marriott agreement during the years ended December 31, 2021 and 2020, respectively.

Our management agreement with IHG for one hotel expires on January 31, 2026.

Our IHG hotel generated net operating cash flow of $ 337 during the year ended December 31, 2021.

Any returns we receive from IHG are limited to the hotels’ available cash flows, if any, after payment of operating expenses.

IHG managed or leased 103 of our hotels during most of 2020.

We terminated our agreement with IHG for failure to pay minimum returns and rents due to us during 2020 upon exhausting the security deposit we held to cover shortfalls between cash flow from our hotels and our minimum returns.

We transferred the branding and management of 102 of our 103 IHG hotels to Sonesta in December 2020.

We realized returns and rents of $ 107,888 and $ 205,941 during the years ended December 31, 2020 and 2019, respectively, under our then agreement with IHG.

During the year ended December 31, 2021, we expensed $ 16,711 of working capital we previously funded under our IHG agreement because the amount is no longer expected to be recoverable.

We realized returns of $ 3,561 and $ 337 for the years ended December 31, 2022 and 2021, respectively, under our IHG agreement.

Any returns we receive from IHG are limited to the hotel’s available cash flows, if any, after payment of operating expenses.

We realized returns and rents of $ 107,888 during the year ended December 31, 2020 under our then agreement with IHG.

During the year ended December 31, 2021, we expensed $ 16,711 of working capital we previously funded under our IHG agreement because the amount was no

longer expected to be recoverable.

This amount is included in transaction related costs in our consolidated statement of income (loss).

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The portfolio was 97.6 % leased by 180 tenants operating under 138 brands in 21 distinct industries.

As a result of the COVID-19 pandemic, some of our tenants requested rent assistance.

During the year ended December 31, 2021, we entered into a rent deferral agreement for $ 2,792 of rent with four net lease tenants.

As of December 31, 2021, we had $ 7,554 of deferred rents outstanding related to seven tenants we granted rent relief to pursuant to such requests who represented approximately 2.0 % of our annualized rental income of our net lease retail portfolio as of December 31, 2021.

These deferred rents are included in other assets, net in our consolidated balance sheets.

These tenants are obligated to pay, in most cases, the deferred rent over a 24 month period.

We have elected to use the FASB relief package regarding the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic and account for lease concessions resulting from the COVID-19 pandemic outside of the existing lease modification guidance as the resulting cash flows from the modified lease are substantially the same as or less than the original lease.

The deferred amounts did not impact our operating results for the year ended December 31, 2021.

We continually review receivables related to rent, straight-line rent and property operating expense reimbursements and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.

The review includes an assessment of whether substantially all of the amounts due under a tenant’s lease are probable of collection.

For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term.

For leases that are deemed not probable of collection, revenue is recorded as cash is received.

We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income.

We reduced reserves for uncollectible amounts by $ 9 during the year ended December 31, 2021 and recorded reserves for uncollectible amounts of $ 9,892 during the year ended December 31, 2020, We had reserves for uncollectible rents of $ 15,519 and $ 18,230 as of December 31, 2021 and 2020, respectively, included in other assets in our consolidated balance sheets.

TA is our largest tenant, leasing 27.5 % of our gross carrying value of real estate properties as of December 31, 2021.

As of December 31, 2022, TA was our largest tenant, leasing 29.3 % of our gross carrying value of real estate properties.

The number of travel centers, the terms, the annual minimum rent and the deferred rent balances owed to us by TA under our TA leases as of December 31, 2022, were as follows:

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(1) TA has two renewal options of 15 years each under each of our TA leases.

(2) Commencing April 1, 2019, TA is required to pay us $ 70,458 in 16 quarterly installments of $ 4,404 for deferred rent TA owes us.

(2) Commencing April 1, 2019, TA was required to pay us $ 70,458 in 16 quarterly installments of $ 4,404 for deferred rent TA owes us.

Represents the balance as of December 31, 2022.

We received the remaining balance of deferred rent due to us from TA in January 2023.

Our TA leases are “triple net” leases that require TA to pay all costs incurred in the operation of the leased travel centers, including personnel, utility, inventory, customer service and insurance expenses, real estate and personal property taxes, environmental related expenses, underground storage tank removal costs and ground lease payments at those travel centers at which we lease the property and sublease it to TA.

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These amounts are included in due from related persons in our consolidated balance sheets.

Beginning in January 2019, our recognition of the deferred rent obligations are recorded on a straight line basis over the new lease terms of our TA leases.

Commencing on April 1, 2019, TA paid us the first of the 16 quarterly installments of approximately $ 4,404 each (an aggregate of $ 70,458 ) to fully satisfy and discharge its $ 150,000 deferred rent obligation to us that otherwise would have become due in five installments between 2024 and 2030.

TA paid to us $ 17,616 in respect of such obligation for each of the years ended December 31, 2021 and 2020, respectively and $ 13,200 for the year ended December 31, 2019.

On January 16, 2019, we sold to TA 20 travel center properties that TA previously leased from us for a total purchase price of $ 308,200 .

We recorded a gain of $ 159,535 as a result of these sales.

Upon completing these sales, these travel center properties were removed from the TA leases and TA’s annual minimum rent payable to us decreased by $ 43,148 .

Our recognition of the deferred rent obligations are recorded on a straight line basis over the terms of our TA leases.

TA paid us $ 17,616 in respect of such obligation for each of the years ended December 31, 2022 and 2021.

In addition to the payment of annual minimum rent, our TA Nos.

1, 2, 3 and 4 leases provide for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels ( 3 % of non-fuel revenues above 2015 non-fuel revenues, and, beginning with the year ending December 31, 2021, an additional half percent ( 0.5 %) of non-fuel revenues above 2019 non-fuel revenues) and our TA No.

5 lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels ( 3 % of non-fuel revenues above 2012 non-fuel revenues, and, beginning with the year ending December 31, 2020, an additional 0.5 % of non-fuel revenues above 2019 non-fuel revenues).

The total amount of percentage rent from TA that we recognized was $ 7,085 , $ 2,764 and $ 4,075 during the years ended December 31, 2021, 2020 and 2019, respectively.

1, 2, 3 and 4 leases provide for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels ( 3 % of non-fuel revenues above 2015 non-fuel revenues, and, beginning with the year ended December 31, 2021, an additional half percent ( 0.5 %) of non-fuel revenues above 2019 non-fuel revenues) and our TA No.

5 lease provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels ( 3 % of non-fuel revenues above 2012 non-fuel revenues, and, beginning with the year ended December 31, 2020, an additional 0.5 % of non-fuel revenues above 2019 non-fuel revenues).

The total amount of percentage rent from TA that we recognized was $ 10,578 , $ 7,085 and $ 2,764 for the years ended December 31, 2022, 2021 and 2020, respectively.

Under our TA leases, TA may request that we fund capital improvements in return for increases in TA’s annual minimum rent according to the following formula:

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See Notes 4, 10 and 15 for further information regarding our relationship with TA.

Our net lease agreements generally provide for minimum rent payments and in addition may include variable payments.

Our other net lease agreements generally provide for minimum rent payments and in addition may include variable payments.

Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight-line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable.

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We recognized rental income from our other net lease properties (excluding TA) of $ 135,522 , $ 140,803 and $ 137,111 for the years ended December 31, 2022, 2021 and 2020 respectively, which included $ 5,367 , $ 10,616 and $ 14,345 respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight-line basis.

The review includes an assessment of whether substantially all of the amounts due under a tenant’s lease are probable of collection.

For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term.

For leases that are deemed not probable of collection, revenue is recorded as cash is received.

We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income.

We reduced our reserves for uncollectible amounts by $ 320 and $ 9 during the years ended December 31, 2022 and 2021, respectively, and recorded reserves for uncollectible amounts of $ 9,892 during the year ended December 31, 2020.

We had reserves for uncollectible rents of $ 7,697 and $ 15,519 as of December 31, 2022 and 2021, respectively, included in other assets in our consolidated balance sheets.

Additional lease information (as lessor) .

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At December 31, 2022 and 2021, our right of use assets and related lease liabilities each totaled $ 177,264 and $ 177,346 , respectively, which represented our future obligations under our operating leases and are included in other assets and other liabilities , respectively, in our consolidated balance sheets.

Our operating leases require minimum fixed rent payments, percentage rent payments based on a percentage of hotel revenues in excess of certain thresholds, or rent payments equal to the greater of a minimum fixed rent or percentage rent.

Rental expense related to our operating leases of $ 12,182 for the year ended December 31, 2021 is included in hotel operating expenses within our consolidated statements of comprehensive income (loss).

Our operating leases require minimum fixed rent payments, percentage rent payments based on a percentage of hotel revenues in excess of certain thresholds and rent payments equal to the greater of a minimum fixed rent or percentage rent.

Rental expense related to our hotel operating leases of $ 11,148 for the year ended December 31, 2022 is included in hotel operating expenses within our consolidated statements of comprehensive income (loss).

For operating leases related to our net lease properties, our tenants are required to pay the rental expense.

As of December 31, 2022, our operating leases provide for contractual minimum rent payments to third parties during the remaining lease terms, as follows:

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Present value of lease liabilities (1)

(1) The weighted average discount rate used to calculate the lease liability and the weighted average remaining term for our ground leases (assuming all extension options) and our hotel operating leases are approximately 5.27 % and 22 years (range of 8 months to 66 years) and 5.67 % and 42 years (range of 1 month to 52 years), respectively.

As of December 31, 2021, 16 of our net lease properties are on land we leased partially or entirely from unrelated third parties.

We are not required to record right of use assets and lease liabilities for these properties as we are not the primary obligor under the leases.

The average remaining term of these 16 ground leases was 10 years (range of one to 20 years) with rents averaging $ 424 per year.

(1) The weighted average discount rate used to calculate the lease liability and the weighted average remaining term for our ground leases (assuming all extension options) and our hotel operating leases are approximately 5.30 % and 21 (range of 15 months to 65 years) and 5.70 % and 32 years (range of 1 month to 51 years), respectively.

Generally, payments of ground lease obligations are made by our managers or tenants.

However, if a manager or tenant did not perform obligations under a ground lease or did not renew any ground lease, we might have to perform obligations under the ground lease or renew the ground lease in order to protect our investment in the affected property.

Other Investments

Equity method investment

We account for our 34.0 % non-controlling interest in Sonesta under the equity method of accounting.

Our investment in Sonesta had a carrying value of $ 112,617 and $ 62,687 as of December 31, 2022 and 2021, respectively.

These amounts are included in other assets in our consolidated balance sheets.

We recorded amortization of the basis difference of $ 260 , $ 260 and $ 217 in the years ended December 31, 2022, 2021 and 2020, respectively.

We recognized earnings of $ 2,856 and losses of $ 941 and $ 9,910 related to our investment in Sonesta for the years ended December 31, 2022, 2021 and 2020, respectively.

These amounts are included in equity in earnings (losses) of an investee in our consolidated statements of comprehensive income.

We reduced hotel operating expenses by $ 2,484 , $ 2,484 , and $ 2,070 for the years ended December 31, 2022, 2021 and 2020, respectively, for amortization of this liability.

As of December 31, 2022 and 2021, the unamortized balance of this liability was $ 34,963 and $ 37,447 , respectively.

In 2021, we funded a $ 25,443 capital contribution to Sonesta related to its acquisition of Red Lion Hotels Corporation to maintain our pro rata ownership.

In 2022, we funded an aggregate of $ 45,470 of capital contributions to Sonesta related to Sonesta’s acquisition of a portfolio of four hotels located in New York, New York.

We continue to maintain our 34.0 % ownership in Sonesta after giving effect to these fundings.

See Note 10 for further information regarding our relationship, agreements and transactions with Sonesta.

Investment in equity securities

As of both December 31, 2022 and 2021 , we owned approximately 7.8 % of TA’s outstanding shares of common stock, and reported this investment at fair value based on quoted market prices (Level 1 inputs).

Our TA shares had a carrying value of $ 53,055 and $ 61,159 as of December 31, 2022 and 2021 , respectively.

Our historical cost basis for these shares was $ 24,418 as of both December 31, 2022 and 2021 .

We recorded unrealized losses of $ 8,104 and gains of $ 22,535 for the years ended December 31, 2022 and 2021, respectively, to adjust the carrying value of our investment in shares of TA common stock to its fair value.

See Notes 4, 5, 10, 14 and 15 for further information regarding our relationships, agreements and transactions with and our investment in, TA.

Our principal debt obligations at December 31, 2022 were:

(1) $ 1,000,000 of outstanding borrowings under our $ 1,000,000 revolving credit facility;

and (2) $ 6,200,000 aggregate outstanding principal amount of senior unsecured notes.

Our revolving credit facility is governed by a credit agreement with a syndicate of institutional lenders.

The maturity date of our revolving credit facility is July 15, 2022, and, subject to the payment of an extension fee and meeting certain other conditions noted below, we have an option to extend the maturity date of the facility for two additional six-month periods.

$ 5,700,000 aggregate outstanding principal amount of senior unsecured notes.

We had no amounts outstanding under our revolving credit facility as of December 31, 2022.

Our revolving credit facility is governed by a credit agreement, or our credit agreement, with a syndicate of institutional lenders and has a maturity date of July 15, 2023.

We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity.

We are required to pay interest on borrowings under our revolving credit facility at

the rate of LIBOR plus a premium, which was 235 basis points per annum, subject to a LIBOR floor of 0.50 %, as of December 31, 2021.

We are required to pay interest on borrowings under our revolving credit facility at the rate of LIBOR plus a premium, which was 250 basis points per annum, subject to a LIBOR floor of 0.50 %, as of December 31, 2022.

We also pay a facility fee, which was 30 basis points per annum at December 31, 2022, on the total amount of lending commitments under our revolving credit facility.

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The weighted average annual interest rate for borrowings under our revolving credit facility was 3.85 %, 2.85 % and 2.36 % for the years ended December 31, 2022, 2021 and 2020, respectively.

On January 19, 2021, we borrowed $ 972,793 under our revolving credit facility as a precautionary measure to preserve financial flexibility.

As of each of December 31, 2021 and February 22, 2022, our $ 1,000,000 revolving credit facility was fully drawn.

We and our lenders amended our credit agreement governing our $ 1,000,000 revolving credit facility in 2020.

Among other things, the amendments waived all of the then existing financial covenants through the end of the current agreement term, or July 15, 2022.

As a result of the amendments, among other things:

• we pledged certain equity interests of subsidiaries owning properties and provided first mortgage liens on 74 properties owned by the pledged subsidiaries with an undepreciated book value of $ 1,834,420 as of December 31, 2021 to secure our obligations under the credit agreement;

• we have the ability to fund up to $ 250,000 of capital expenditures per year and up to $ 50,000 of certain other investments per year as defined in the credit agreement;

We and our lenders amended our credit agreement governing the revolving credit facility in 2020.

Among other things, the amendment waived all of the then existing financial covenants through the end of the then existing agreement term, or July 15, 2022.

As a result of the amendment, among other things:

• we pledged certain equity interests of subsidiaries owning properties and provided first mortgage liens on 74 properties owned by the pledged subsidiaries;

• we had the ability to fund up to $ 250,000 of capital expenditures per year and up to $ 50,000 of certain other investments per year as defined in the credit agreement;

• we agreed to certain covenants and restrictions on distributions to common shareholders, share repurchases, incurring indebtedness, and acquiring real property (in each case subject to various exceptions);

• we agreed to maintain minimum liquidity of $ 125,000 ;

• we are generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions and debt refinancings to repay outstanding amounts under the credit agreement, and then to other debt maturities;

• in order to exercise the first six month extension option under the credit agreement, we would need to be in compliance with the financial covenants under the agreement calculated using pro forma projections as defined in the agreement for the quarter ending June 30, 2022, annualized, and have repaid or refinanced our $ 500,000 of 5.00 % senior notes due in August 2022;

• we may not utilize the feature in our credit agreement pursuant to which maximum aggregate borrowings may be increased to up to $ 2,300,000 on a combined basis in certain circumstances until we demonstrate compliance with certain covenants;

As noted above, our revolving credit facility matures on July 15, 2022 and we may be unable to meet the conditions required to exercise the extension option provided for in our credit agreement.

We are in discussions with our lenders regarding a potential extension of the existing waivers or additional covenant waivers, but we cannot assure that we will be granted any such relief.

We currently expect we will have enough cash to repay the amounts outstanding on our revolving credit facility using existing cash balances and proceeds we expect to receive from asset sales or other capital transactions we may complete prior to its maturity.

Our credit agreement and our unsecured senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business manager.

• we were generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions and debt refinancings to repay outstanding amounts under the credit agreement, and then to other debt maturities;

• in order to exercise the first six month extension option under the credit agreement, we would have needed to be in compliance with the financial covenants under the credit agreement calculated using pro forma projections as defined in the credit agreement for the quarter ending June 30, 2022, annualized, and have repaid or refinanced our $ 500,000 of 5.00 % senior notes due in August 2022;

• we were not able to utilize the feature in our credit agreement pursuant to which maximum aggregate borrowings may be increased to up to $ 2,300,000 on a combined basis in certain circumstances until we demonstrated compliance with certain covenants.

On April 14, 2022, we and the lenders further amended the credit agreement and exercised our first of two options to extend the maturity date of our revolving credit facility by six months to January 15, 2023.

Pursuant to the amendment:

• we repaid $ 200,000 of the outstanding balance and reduced the size of the revolving credit facility from $ 1,000,000 to $ 800,000 as a result of the decrease in the size of the revolving credit facility and recognized a loss on early extinguishment of debt of $ 590 during the year ended December 31, 2022, which represented the write off of a portion of deferred financing fees;

• we became permitted to acquire up to an aggregate of $ 300,000 of real property through the waiver period, which was extended pursuant to the amendment to December 31, 2022;

• certain of the financial covenants in our credit agreement became tested and in full force and effect beginning with the quarter ended September 30, 2022 and were modified to lower the required fixed charge coverage ratio from 1.5 x to 1.0 x through December 31, 2022, increase the required leverage ratio limit from 60 % to 70 % and increase the minimum liquidity requirement from $ 125,000 to $ 150,000 (which amount is subject to an additional increase as noted below);

• we were able to fund through the waiver period, which ended on December 31, 2022, an aggregate of $ 100,000 of capital contributions requested by Sonesta for business activities and to acquire additional shares of common stock of TA to retain our pro rata ownership of 8.2 % of TA, an increase from the previous aggregate limit of $ 50,000 ;

• the interest rate premium payable on borrowings under our revolving credit facility was increased from 235 basis points per annum to 250 basis points per annum, with the facility fee remaining unchanged at 30 basis points per annum on the total amount of lending commitments under the facility.

The interest rate premiums and the facility fee continued to be subject to adjustment based upon changes to our credit ratings and, pursuant to the amendment, the interest rate premium will increase by an additional 25 basis points if we do not satisfy certain financial covenants;

• we became required to maintain minimum liquidity of at least $ 150,000 .

On October 4, 2022, we and the lenders further amended the credit agreement and exercised our remaining option to extend the maturity date of our revolving credit facility by six months to July 15, 2023.

Pursuant to the amendment:

• we agreed to maintain minimum liquidity of $ 600,000 until we repay or refinance our $ 500,000 of 4.5 % senior notes due in June 15, 2023 and maintain at least $ 150,000 of liquidity thereafter;

• restrictions on paying common dividends and issuing secured debt previously agreed to during the existing waiver period were removed, subject to certain conditions.

As of December 31, 2022, we have met the conditions to exit the waiver period, and as a result, the restrictions on capital expenditures and other investments, including acquisitions, have expired.

Our revolving credit facility continues to be secured by 73 properties with an undepreciated book value of $ 1,562,869 as of December 31, 2022 to secure our obligations under the credit agreement.

Our credit agreement and our unsecured senior notes indentures and their supplements also contain covenants, including those that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios.

As of December 31, 2021, we were not in compliance with one of our debt covenants necessary to incur additional debt, and as a result, we will not be able to incur additional debt until we satisfy that covenant.

On September 18, 2019, we issued $ 825,000 aggregate principal amount of our 4.35 % unsecured senior notes due 2024, $ 450,000 aggregate principal amount of our 4.75 % unsecured senior notes due 2026 and $ 425,000 aggregate principal amount of our 4.95 % unsecured senior notes due 2029.

The aggregate net proceeds from these offerings were $ 1,680,461 , after underwriting discounts and other offering expenses.

In connection with the SMTA Transaction, a syndicate of lenders committed to provide us with a one year unsecured term loan facility, under which we would be able to borrow up to $ 2,000,000 .

We terminated these commitments in September 2019 and recorded a loss on early extinguishment of debt of $ 8,451 during the year ended December 31, 2019 to write off unamortized debt issuance costs.

See Note 4 for further information about the SMTA Transaction.

On June 17, 2020, we issued $ 800,000 principal amount of our 7.50 % unsecured senior notes due 2025, or the 2025 Notes.

The aggregate net proceeds from this offering were $ 787,718 , after underwriting discounts and other offering expenses.

These notes are fully and unconditionally guaranteed by certain of our subsidiaries.

On June 17, 2020, we repurchased $ 350,000 principal amount of our $ 400,000 of 4.25 % senior notes due 2021 at a total cost of $ 355,971 , excluding accrued interest pursuant to a cash tender offer.

We recorded a loss of $ 6,970 , net of discount and debt issuance costs, on early extinguishment of debt during the year ended December 31, 2020.

We repaid our $ 400,000 term loan, which was scheduled to mature on July 15, 2023, without penalty on November 5, 2020.

As a result of the repayment, we recorded a loss on early extinguishment of debt of $ 2,391 , which represents unamortized debt issuance costs of the term loan.

The weighted average annual interest rates for borrowings under our term loan were 2.74 % and 3.43 % during the years ended December 31, 2020 and 2019, respectively.

As a result of the repayment, we recorded a loss on early extinguishment of debt of $ 2,391 , which represents unamortized debt issuance costs of the term loan.

On November 20, 2020, we issued $ 450,000 principal amount of our 5.50 % senior notes due in 2027, or the 2027 Notes.

The aggregate net proceeds from this offering were $ 442,232 , after underwriting discounts and other offering expenses.

These notes are fully and unconditionally guaranteed by certain of our subsidiaries.

The subsidiaries in the guarantee pool for the 2025 Notes and the 2027 Notes may change from time to time as subsidiaries are allocated to or from the pledge pool for our credit agreement or for certain other reasons.

Each subsidiary guarantor’s guarantee will automatically terminate and each subsidiary guarantor will automatically be released from all of its obligations under its guarantee and the indenture under certain circumstances, including on or after the date on which (a) the notes have received a rating equal to or higher than Baa2 (or the equivalent) by Moody’s Investors Service, or Moody’s, or BBB (or the equivalent) by Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or S&P, or if Moody’s or S&P ceases to rate the notes for reasons outside of our control, the equivalent investment grade rating from any other rating agency and (b) no default or event of default has occurred and is continuing under the indenture governing the notes.

On December 18, 2020, we redeemed the remaining $ 50,000 of the 4.25 % senior notes due 2021 for a redemption price equal to the principal amount, plus accrued and unpaid interest.

We recorded a loss of $ 33 , net of discounts and debt issuance costs, on extinguishment of this debt during the year ended December 31, 2020.

We believe we were in compliance with the terms and conditions of our credit agreement and our unsecured senior notes indentures and their supplements as of December 31, 2022.

On June 15, 2022, we redeemed at par all of our outstanding 5.00 % senior notes due 2022 for a redemption price equal to the principal amount of $ 500,000 , plus accrued and unpaid interest.

As a result of the redemption, we recorded a loss on early extinguishment of debt of $ 201 during the year ended December 31, 2022, which represented the unamortized discounts and issuance costs related to these notes.

We recorded a loss of $ 9,394 , net of discounts and debt issuance costs on extinguishment of debt during the year ended December 31, 2020 as a result of our repayment of our then in place $ 400,000 term loan and certain unsecured senior notes.

All of our senior notes are prepayable at any time prior to their maturity date at par plus accrued interest plus a premium equal to a make whole amount, as defined, generally designed to preserve a stated yield to the noteholder.

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None of our debt obligations require sinking fund payments prior to their maturity dates.

The required principal payments due during the next five years and thereafter under all our outstanding debt at December 31, 2021 are as follows:

The required principal payments due during the next five years and thereafter under all our outstanding debt at December 31, 2022 were as follows:

2023 $ 500,000

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Thereafter 1,225,000

On February 10, 2023, our wholly owned, special purpose bankruptcy remote, indirect subsidiary, SVC ABS LLC, or the Issuer, issued $ 610,200 in aggregate principal amount of net lease mortgage notes.

The Issuer is a separate legal entity and is the sole owner of its assets and liabilities.

The assets of the special purpose entity are not available to pay or otherwise satisfy obligations to the creditors of any owners or affiliate of the special purpose entity.

The terms of the notes are summarized as follows:

Note Class Amount Coupon Rate Term (in years) Maturity

Class A $ 305,000 5.15 % 5 February 2028

Class B 173,000 5.55 % 5 February 2028

Class C 132,200 6.70 % 5 February 2028

Total / weighted average $ 610,200 5.60 %

The Class A notes and the Class B notes require monthly principal repayments at an annualized rate of 0.50 % and 0.25 % of the balance outstanding, respectively, and the Class C notes require interest payments only, with balloon payments due at maturity.

The notes mature in February 2028 and may be redeemed at par beginning in February 2026.

The notes are non-recourse and are secured by 308 net lease retail properties with annual minimum rents of $ 65,273 owned by the Issuer with a gross book value of $ 754,841 .

The net proceeds from this transaction, after initial purchaser discounts and offering costs, were approximately $ 554,982 and will be used for the repayment of outstanding debt and general corporate purposes.

On February 6, 2023, we announced the early redemption of our outstanding 4.500 % senior notes due 2023, for a redemption price equal to the principal amount of $ 500,000 , plus accrued and unpaid interest to, but excluding the date of redemption.

This redemption is expected to occur on or about March 8, 2023.

We expect to fund this redemption with the proceeds from the net lease mortgage notes transaction described above.

Shareholders' Equity

Common Share Awards

We have common shares available for issuance under the terms of our 2012 Equity Compensation Plan, or our Share Award Plan.

During the years ended December 31, 2021, 2020 and 2019, we awarded 340,700 of our common shares with an aggregate market value of $ 3,839 , 264,400 of our common shares with an aggregate market value of $ 2,232 and 140,100 of our common shares with an aggregate market value of $ 3,507 , respectively, to our officers and certain other employees of our manager, RMR LLC, pursuant to our Share Award Plan.

The value of the share awards was based upon the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the date of the award.

See Note 9 for a further discussion of the awards we made to our officers and certain other employees of RMR LLC.

On June 16, 2021, in accordance with our Trustee compensation arrangements, we awarded under our Share Award Plan 7,000 of our common shares to each of our seven Trustees, valued at $ 13.94 per common share, the closing price of our common shares on Nasdaq, on that day.

On September 15, 2021, we awarded under our Share Award Plan an aggregate of 291,700 of our common shares, valued at $ 10.82 per common share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other current and former officers and employees of RMR LLC.

On February 27, 2020, in accordance with our Trustee compensation arrangements we awarded under our Share Award Plan 3,000 of our common shares each to two new Trustees who were elected to our Board of Trustees with an aggregate market value of $ 112 .

In addition, we awarded each of our Trustees 5,000 of our common shares with an aggregate market value of $ 378 ($ 54 per trustee) during the year ended December 31, 2020.

On June 14, 2019, in accordance with our Trustee compensation arrangements, we awarded under our Share Award Plan each of our then Trustees 3,000 of our common shares in 2019 with an aggregate market value of $ 370 ($ 74 per trustee) as part of their annual compensation.

The value of the share awards were based upon the closing price of our common shares on Nasdaq on the date of the awards.

The shares awarded to our Trustees vest immediately.

The shares awarded to our officers and certain other employees of RMR LLC (in those capacities) vest in five equal annual installments beginning on the date of award.

We have common shares available for issuance under the terms of our Amended and Restated 2012 Equity Compensation Plan, or our Share Award Plan.

During the years ended December 31, 2022, 2021 and 2020, we awarded shares to our Trustees, officers and other employees of RMR as follows:

Year Number of Shares Weighted Average Grant Date Fair Value Weighted Average Value of Grants

2022 433,500 $ 6.63 $ 2,874

2021 340,700 $ 11.26 $ 3,839

2020 305,400 $ 8.91 $ 2,722

The value of the share awards were based upon the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on the date of the awards.

The common shares awarded to our Trustees vest immediately.

The common shares awarded to our officers and certain other employees of RMR (in those capacities) vest in five equal annual installments beginning on the date of award.

Shares forfeited are recognized as they occur.

Share awards are expensed ratably over the vesting period and the value of such share awards are included in general and administrative expense in our consolidated statements of comprehensive income (loss).

See Note 10 for a further discussion of the awards we made to our officers and certain other employees of RMR.

A summary of shares awarded, vested, forfeited and unvested under the terms of the Share Award Plan for the years ended December 31, 2022, 2021 and 2020 is as follows:

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Unvested shares, beginning of year 425,030 $ 11.93 325,900 $ 14.71 194,540 $ 26.59

Shares granted 340,700 $ 11.26 305,400 $ 8.91 155,100 $ 25.00

Shares awarded 433,500 $ 6.63 340,700 $ 11.26 305,400 $ 8.91

Shares vested ( 266,300 ) $ 10.20 ( 240,470 ) $ 14.78 ( 173,190 ) $ 17.76

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Share Repurchases

During the years ended December 31, 2021, 2020 and 2019, we repurchased our common shares from certain of our officers and certain current or former employees of RMR LLC, in satisfaction of tax withholding and payment obligations in connection with the vesting of our common shares as follows:

During the years ended December 31, 2022, 2021 and 2020, we repurchased our common shares from certain of our officers and certain current or former employees of RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of our common shares as follows:

Year Aggregate Number

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2020 $ 0.57 $ 93,804 — % — 100.00 % — %

On January 13, 2022, we declared a distribution of $ 0.01 per common share, or $ 1,652 , which we paid on February 17, 2022, to shareholders of record on January 24, 2022.

On January 12, 2023, we declared a distribution of $ 0.20 per common share, or $ 33,091 , to our common shareholders which we paid on February 16, 2023, to shareholders of record on January 23, 2023.

Cumulative Other Comprehensive Income (Loss)

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Other comprehensive loss 1,539 1,539

Amounts reclassified from cumulative other comprehensive income to net income — —

Balance at December 31, 2021 779 779

Other comprehensive income 1,604 1,604

Amounts reclassified from cumulative other comprehensive income to net income — —

Balance at December 31, 2022 $ 2,383 $ 2,383

Business and Property Management Agreements with RMR LLC

Business and Property Management Agreements with RMR

We have no employees.

The personnel and various services we require to operate our business are provided to us by RMR LLC.

We have two agreements with RMR LLC to provide management services to us:

(1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, (excluding properties leased to TA), the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR LLC to manage from time to time.

See Note 9 for further information regarding our relationship, agreements and transactions with RMR LLC.

Management Agreements with RMR LLC.

Our management agreements with RMR LLC provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms:

The personnel and various services we require to operate our business are provided to us by RMR.

We have two agreements with RMR to provide management services to us:

(1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, excluding properties leased to TA, the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR to manage from time to time.

See Note 10 for further information regarding our relationship, agreements and transactions with RMR.

Management Agreements with RMR.

Our management agreements with RMR provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms:

• Base Management Fee.

The annual base management fee payable to RMR LLC by us for each applicable period is equal to the lesser of:

The annual base management fee payable to RMR by us for each applicable period is equal to the lesser of:

◦ the sum of (a) 0.7 % of the average aggregate historical cost of our real estate investments up to $ 250,000 , plus (b) 0.5 % of the average aggregate historical cost of our real estate investments exceeding $ 250,000 ;

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• Incentive Management Fee .

The incentive management fee which may be earned by RMR LLC for an annual period is calculated as follows:

The incentive management fee which may be earned by RMR for an annual period is calculated as follows:

◦ An amount, subject to a cap based on the value of our common shares outstanding, equal to 12 % of the product of:

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• the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable market index, or the benchmark return per share, for the relevant measurement period.

Effective August 1, 2021, we and RMR LLC amended our business management agreement to replace the benchmark index used in the calculation of incentive management fees.

Pursuant to the amendment, for periods beginning on and after August 1, 2021, the MSCI U.S.

REIT/Hotel & Resort REIT Index replaced the discontinued SNL U.S.

REIT Hotel Index and will be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR LLC.

For periods prior to August 1, 2021, the SNL U.S.

REIT Hotel Index will continue to be used.

Accordingly, the calculation of incentive management fees for the next two measurement periods will continue to use the SNL U.S.

REIT Hotel Index in calculating the benchmark returns for periods through July 31, 2021.This change of index was due to S&P Global, Inc.

ceasing to publish the SNL U.S.

REIT Hotel Index and we refer to the changed index as the benchmark index.

The MSCI U.S.

REIT/Hotel & Resort REIT Index is the benchmark index for periods on and after August 1, 2021, and the SNL U.S.

REIT Hotel Index is the benchmark index for periods prior to August 1, 2021.

For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (1) the closing price of our common shares on Nasdaq on the last trading day of the year immediately before the first year of the applicable measurement period, or the initial share price, from (2) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period.

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The cap is equal to the value of the number of our common shares which would, after issuance, represent 1.5 % of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period.

◦ Incentive management fees we paid to RMR LLC for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements.

Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $ 42,137 , $ 36,830 and $ 41,607 for the years ended December 31, 2021, 2020 and 2019, respectively.

◦ Incentive management fees we paid to RMR for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements.

Pursuant to our business management agreement with RMR, we recognized net business management fees of $ 35,495 , $ 42,137 and $ 36,830 for the years ended December 31, 2022, 2021 and 2020, respectively.

The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of comprehensive income (loss) for these periods.

The net business management fees we recognized for each of the years ended December 31, 2021, 2020 and 2019 reflect a reduction of $ 3,584 for each of those years for the amortization of the liability we recorded in connection with our former investment in RMR Inc.

The net business management fees we recognized reflect a reduction of $ 3,585 for the year ended December 31, 2022, and $ 3,584 for each of the years ended December 31, 2021 and 2020 for the amortization of the liability we recorded in connection with our former investment in RMR Inc.

• Property Management and Construction Supervision Fees.

The property management fees payable to RMR LLC by us for each applicable period are equal to 3.0 % of gross collected rents and the construction supervision fees payable to RMR LLC by us for each applicable period are equal to 5.0 % of construction costs for our net lease portfolio, excluding properties leased to TA, and the office building component of one of our hotels that are subject to our property management agreement with RMR LLC.

On June 22, 2021, we and RMR LLC amended our property management agreement to, among other things, provide for RMR LLC’s oversight of any major capital projects and repositioning activities at our hotels, including our hotels that are managed by Sonesta, as we may request from time to time.

RMR LLC will receive the same fee previously paid to Sonesta for these services, which is equal to 3 % of the cost of any such major capital project or repositioning activity.

Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $ 4,489 , $ 3,575 and $ 1,399 for the years ended December 31, 2021, 2020 and 2019, respectively.

The property management fees payable to RMR by us for each applicable period are equal to 3.0 % of gross collected rents and the construction supervision fees payable to RMR by us for each applicable period are equal to 5.0 % of construction costs for our net lease portfolio, excluding properties leased to TA, and the office building component of one of our hotels that are subject to our property management agreement with RMR.

On June 22, 2021, we and RMR amended our property management agreement to, among other things, provide for RMR’s oversight of any major capital projects and repositioning activities at our hotels, including our hotels that are managed by Sonesta, as we may request from time to time.

RMR will receive the same fee previously paid to Sonesta for these services, which is equal to 3 % of the cost of any such major capital project or repositioning activity.

Pursuant to our property management agreement with RMR, we recognized aggregate property management and construction supervision fees of $ 6,128 , $ 4,489 and $ 3,575 for the years ended December 31, 2022, 2021 and 2020, respectively.

These amounts are included in other operating expenses or have been capitalized as appropriate in our consolidated financial statements.

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• Expense Reimbursement.

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf.

We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC employees assigned to work exclusively or partly at our net lease properties (excluding properties leased to TA) and the office building component of one of our hotels, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function, and as otherwise agreed.

Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves the costs of our internal audit function.

Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC.

We reimbursed RMR LLC $ 2,971 , $ 2,618 and $ 620 for these expenses and costs for the years ended December 31, 2021, 2020 and 2019, respectively.

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf.

We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR employees assigned to work exclusively or partly at our net lease properties (excluding properties leased to TA) and the office building component of one of our hotels, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function, and as otherwise agreed.

Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR.

We reimbursed RMR $ 3,258 , $ 2,971 and $ 2,618 for these expenses and costs for the years ended December 31, 2022, 2021 and 2020, respectively.

We included these amounts in other operating expenses and general and administrative expense, as applicable, for these periods.

Our management agreements with RMR LLC have terms that end on December 31, 2041, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension.

Our management agreements with RMR have terms that end on December 31, 2042, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension.

• Termination Rights .

We have the right to terminate one or both of our management agreements with RMR LLC:

(i) at any time on 60 days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein.

RMR LLC has the right to terminate the management agreements for good reason, as defined therein.

We have the right to terminate one or both of our management agreements with RMR:

RMR has the right to terminate the management agreements for good reason, as defined therein.

• Termination Fee .

If we terminate one or both of our management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of our management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years.

If we terminate one or both of our management agreements with RMR LLC for a performance reason, we have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination.

We are not required to pay any termination fee if we terminate our management agreements with RMR LLC for cause or as a result of a change of control of RMR LLC.

If we terminate one or both of our management agreements with RMR for convenience, or if RMR terminates one or both of our management agreements for good reason, we have agreed to pay RMR a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years.

If we terminate one or both of our management agreements with RMR for a performance reason, we have agreed to pay RMR the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination.

We are not required to pay any termination fee if we terminate our management agreements with RMR for cause or as a result of a change of control of RMR.

• Transition Services.

RMR LLC has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR LLC, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable.

Pursuant to our management agreements with RMR LLC, RMR LLC may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us.

As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC or its subsidiaries provides management services for the purpose of obtaining more favorable terms from such vendors and suppliers.

RMR has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable.

Pursuant to our management agreements with RMR, RMR may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us.

As part of this arrangement, we may enter agreements with RMR and other companies to which RMR or its subsidiaries provides management services for the purpose of obtaining more favorable terms from such vendors and suppliers.

• Investment Opportunities .

Under our business management agreement with RMR LLC, we acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR LLC.

Under our business management agreement with RMR, we acknowledge that RMR may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR.

Related Person Transactions

We have relationships and historical and continuing transactions with TA, Sonesta, RMR LLC, RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers.

RMR LLC is a majority owned subsidiary of RMR Inc.

We have relationships and historical and continuing transactions with TA, Sonesta, RMR, RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers.

RMR is a majority owned subsidiary of RMR Inc.

The Chair of our Board of Trustees and one of our Managing Trustees, Adam D.

Portnoy, is the sole trustee of ABP Trust, which is the controlling shareholder of RMR Inc., and is a managing director and the president and chief executive officer of RMR Inc.

and an officer and employee of RMR LLC.

Murray, our other Managing Trustee and our President and Chief Executive Officer, also serves as an officer and employee of RMR LLC.

In addition, each of our other officers serves as an officer of RMR LLC.

Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services.

Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and is chair of the board of directors and a managing director and the president and chief executive officer of RMR Inc.

and an officer and employee of RMR.

Murray, our other Managing Trustee and our former President and Chief Executive Officer, was appointed the president and chief executive officer of Sonesta, effective April 1, 2022.

Murray also serves as an officer and employee of RMR.

In addition, each of our other officers serves as an officer of RMR.

Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR or its subsidiaries provide management services.

Adam Portnoy serves as chair of the boards and as a managing director or managing trustee of these public companies.

Other officers of RMR LLC, including Mr.

Other officers of RMR, including Mr.

Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies.

Our Manager, RMR LLC .

We have two agreements with RMR LLC to provide management services to us:

(1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of certain net lease properties and the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR LLC to manage from time to time.

See Note 8 for further information regarding our management agreements with RMR LLC.

Share Awards to RMR LLC Employees .

As described in Note 7, we award shares to our officers and other employees of RMR LLC annually.

Our Manager, RMR .

We have two agreements with RMR to provide management services to us.

See Note 9 for further information regarding our management agreements with RMR.

Share Awards to RMR Employees .

As described in Note 8, we award shares to our officers and other employees of RMR annually.

Generally, one fifth of these awards vest on the award date and one fifth vests on each of the next four anniversaries of the award dates.

In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC.

These awards to RMR LLC employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR LLC.

In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR.

These awards to RMR employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR.

See Note 8 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligations on the vesting of share awards.

On July 1, 2019, we sold all the 2,503,777 shares of class A common stock of RMR Inc.

we owned in an underwritten public offering at a price to the public of $ 40.00 per share pursuant to an underwriting agreement among us, RMR Inc., certain other REITs managed by RMR LLC that also sold their class A common stock of RMR Inc.

in the offering, and the underwriters named therein.

We received net proceeds of $ 93,568 from this sale, after deducting the underwriting discounts and commissions and before other offering expenses.

We lease 177 of our travel centers to TA under the TA leases.

As of December 31, 2022, we owned 1,184,797 shares of common stock, representing approximately 7.8 % of TA’s outstanding shares of common stock, which amount includes 500,797 shares of TA common stock that we purchased in an underwritten public equity offering in July 2020 at the public offering price of $ 14.00 per share.

RMR LLC provides management services to both us and TA, and Adam D.

Portnoy also serves as the chair of the board of directors and as a managing director of TA and, as of December 31, 2021, beneficially owned 658,505 shares of TA common stock (including through RMR LLC), representing approximately 4.4 % of TA’s outstanding shares of common stock.

RMR provides management services to both us and TA, and Adam D.

Portnoy also serves as the chair of the board of directors and as a managing director of TA and, as of December 31, 2022, beneficially owned 661,505 shares of TA common stock (including through RMR), representing approximately 4.1 % of TA’s outstanding shares of common stock.

Spin-Off of TA .

In connection with TA’s spin-off, we entered a transaction agreement with TA and RMR LLC, pursuant to which TA granted us a right of first refusal to purchase, lease, mortgage or otherwise finance any interest TA owns in a travel center before it sells, leases, mortgages or otherwise finances that travel center to or with another party, and TA also granted us and any other company managed by RMR LLC a right of first refusal to acquire or finance any real estate of the types in which we or they invest before TA does.

In connection with TA’s spin-off, we entered a transaction agreement with TA and RMR, pursuant to which TA granted us a right of first refusal to purchase, lease, mortgage or otherwise finance any interest TA owns in a travel center before it sells, leases, mortgages or otherwise finances that travel center to or with another party, and TA also granted us and any other company managed by RMR a right of first refusal to acquire or finance any real estate of the types in which we or they invest before TA does.

TA also agreed that for so long as TA is a tenant of ours it will not permit:

5 unchanged sentences

Sonesta is a private company of which Adam Portnoy, one of our Managing Trustees, is a director and the controlling stockholder.

One of Sonesta’s other directors is our other Managing Trustee, President and Chief Executive Officer and Sonesta’s other director serves as one of RMR Inc.’s managing directors, as RMR LLC’s and RMR Inc.’s executive vice president, general counsel and secretary and as our Secretary.

Certain of Sonesta’s officers are officers of RMR LLC.

Certain other officers and employees of Sonesta are former employees of RMR LLC.

RMR LLC also provides certain services to Sonesta.

One of Sonesta’s other directors and president and chief executive officer is our other Managing Trustee and former President and Chief Executive Officer, and Sonesta’s other director serves as one of RMR Inc.’s managing directors, as RMR’s and RMR Inc.’s executive vice president, general counsel and secretary and as our Secretary.

Certain of Sonesta’s officers are officers of RMR.

Certain other officers and employees of Sonesta are former officers and employees of RMR.

RMR also provides certain services to Sonesta.

As of December 31, 2022, we owned approximately 34.0 % of Sonesta’s outstanding shares of common stock and Sonesta managed 196 of our hotels.

See Notes 4 and 5 for further information regarding our relationships, agreements and transactions with Sonesta.

Until its dissolution on February 13, 2020, we, ABP Trust, TA and four other companies to which RMR LLC provides management services owned Affiliates Insurance Company, an Indiana insurance company, or AIC, in equal portions.

We and the other AIC shareholders historically participated in a combined property insurance program arranged and insured or reinsured in part by AIC until June 30, 2019.

We paid aggregate annual premiums, including taxes and fees, of $ 5,738 in connection with this insurance program for the policy year ended June 30, 2019.

In connection with AIC’s dissolution, we and each other AIC shareholder received an initial liquidating distribution of $ 9,000 from AIC in December 2019 and an additional liquidating distribution of approximately $ 286 in June 2020.

Affiliates Insurance Company .

Until its dissolution on February 13, 2020, we, ABP Trust, TA and four other companies to which RMR provides management services owned Affiliates Insurance Company, an Indiana insurance company, or AIC, in equal portions.

We and AIC’s other shareholders participated in combined property insurance programs arranged by AIC in periods prior to 2020.

In connection with AIC’s dissolution, we and each other AIC shareholder received a liquidating distribution of approximately $ 286 in June 2020.

We received the final distribution of $ 12 in December 2021.

As of December 31, 2020 and 2019, our investment in AIC had a carrying value of $ 12 and $ 298 , respectively.

These amounts are included in other assets in our consolidated balance sheets.

We did not recognize any income in the year ended December 31, 2021 and 2020 and recognized income of $ 393 related to our investment in AIC for the year ended December 31, 2019.

These amounts are presented as equity in earnings of an investee in our consolidated statements of comprehensive income (loss).

Our other comprehensive income (loss) includes our proportionate part of unrealized losses on securities which were owned and held for sale by AIC of $ 175 related to our investment in AIC for the year ended December 31, 2019.

We did not recognize any income in the years ended December 31, 2022, 2021 and 2020 with respect to our ownership in AIC.

Our provision (benefit) for income taxes consists of the following:

31 unchanged sentences

Net deferred tax liabilities are included in accounts payable and other liabilities in our consolidated balance sheets.

The following table provides a reconciliation of the beginning and ending balances of gross unrecognized tax benefits from uncertain tax positions in accordance with ASC 740-10-50:

Gross Unrecognized Tax Benefits

As of December 31, 2020 Current Period Increase As of December 31, 2021

$ 2,531 $ — $ 2,531

At December 31, 2022 and 2021, our consolidated TRS had a net deferred tax asset, prior to any valuation allowance, of $ 111,148 and $ 84,973 , respectively, which consists primarily of the tax benefit of net operating loss carryforwards and tax credits.

6 unchanged sentences

Geographic Concentration

At December 31, 2021, our 1,091 properties were located in 47 states in the United States, plus Washington, DC, Ontario, Canada and Puerto Rico.

Between 6 % and 11 % of our properties, by investment, were located in each of California, Texas, Georgia and Illinois.

At December 31, 2022, our 1,003 properties were located in 46 states in the United States, plus the District of Columbia, Ontario, Canada and Puerto Rico.

Between 6 % and 13 % of our properties, by investment, were located in each of California, Texas, Illinois and Georgia.

Our two hotels in Ontario, Canada and our hotel in Puerto Rico represent 1.7 % of our hotels, by investment, in the aggregate at December 31, 2022.

17 unchanged sentences

Gain on sale of real estate, net 48,202 ( 384 ) — 47,818

Unrealized gains on equity securities — — 22,535 22,535

Unrealized (losses) on equity securities — — ( 8,104 ) ( 8,104 )

Interest income 24 29 3,326 3,379

Interest expense — — ( 341,795 ) ( 341,795 )

Loss on early extinguishment of debt — — ( 791 ) ( 791 )

Income (loss) before income taxes and equity in losses of an investee 56,260 201,992 ( 393,688 ) ( 135,436 )

Income tax benefit — — 199 199

Equity in losses of an investee — — ( 941 ) ( 941 )

Equity in earnings of an investee — — 2,856 2,856

Net income (loss) $ 56,260 $ 201,992 $ ( 390,633 ) $ ( 132,381 )

15 unchanged sentences

Gain on sale of real estate, net 9,558 1,964 — 11,522

Gain on insurance settlement 62,386 — — 62,386

Unrealized losses on equity securities, net — — 19,882 19,882

Unrealized gains on equity securities, net — — 22,535 22,535

Interest income 1 — 663 664

Interest expense — — ( 365,721 ) ( 365,721 )

Loss on early extinguishment of debt — — ( 9,394 ) ( 9,394 )

Income (loss) before income taxes and equity in earnings of an investee

( 287,077 ) 138,436 ( 395,962 ) ( 544,603 )

Income tax expense — — ( 17,211 ) ( 17,211 )

Equity in earnings of an investee — — ( 9,910 ) ( 9,910 )

Income tax benefit — — 941 941

Equity in losses of an investee — — ( 941 ) ( 941 )

Net income (loss) $ ( 287,077 ) $ 138,436 $ ( 395,962 ) $ ( 544,603 )

14 unchanged sentences

Total expenses 978,708 289,068 50,668 1,318,444

Gain on sale of real estate — 159,535 — 159,535

Dividend income — — 1,752 1,752

Unrealized losses on equity securities, net — — ( 40,461 ) ( 40,461 )

Gain on sale of real estate, net 14,927 ( 12,666 ) — 2,261

Gain on insurance settlement 62,386 — — 62,386

Unrealized gains on equity securities — — 19,882 19,882

Interest income 6 — 278 284

1 unchanged sentence

Loss on early extinguishment of debt — — ( 9,394 ) ( 9,394 )

Income (loss) before income taxes and equity in earnings of an investee

308,306 281,144 ( 327,300 ) 262,150

Income tax expense — — ( 2,793 ) ( 2,793 )

Equity in earnings of an investee — — 393 393

Income (loss) before income taxes and equity in losses of an investee ( 23,819 ) 85,950 ( 346,392 ) ( 284,261 )

Income tax benefit — — ( 17,211 ) ( 17,211 )

Equity in losses of an investee — — ( 9,910 ) ( 9,910 )

Net income (loss) $ ( 23,819 ) $ 85,950 $ ( 373,513 ) $ ( 311,382 )

11 unchanged sentences

(1) As of both December 31, 2022 and 2021, we owned 1,184,797 shares of TA common stock, which are included in other assets in our consolidated balance sheets and reported at fair value based on quoted market prices (Level 1 inputs).

Our historical cost basis for these shares was $ 24,418 as of December 31, 2021 and 2020.

During the years ended December 31, 2021, 2020 and 2019, we recorded unrealized gains of $ 20,367 and $ 19,883 unrealized losses of $ 1,129 , respectively, to adjust the carrying value of our investment in TA shares to their fair values.

(2) As of December 31, 2021, we owned 67 hotels with 8,667 rooms with an aggregate carrying value of $ 503,078 classified as held for sale and 22 net lease properties lease properties with 154,206 square feet with an aggregate carrying value of $ 12,440 classified as held for sale.

See Note 6 for further information regarding our investment in TA common stock.

(2) As of December 31, 2022, we owned 18 hotels with 2,526 rooms with an aggregate carrying value of $ 110,215 classified as held for sale and four net lease properties lease properties with 9,667 square feet with an aggregate carrying value of $ 1,377 classified as held for sale.

These properties are recorded at their estimated then fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP).

We recorded a $ 10,989 loss on asset impairment in 2022 to reduce the carrying value of certain of these properties to their estimated fair value less costs to sell.

As of December 31, 2020, we owned five hotels in four states with a carrying value of $ 10,699 and six net lease properties located in six states with a carrying value of $ 2,844 classified as held for sale.

These properties are recorded at their estimated fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP) We recorded a $ 55,756 loss on asset impairment in 2020 to reduce the carrying value of these properties to their estimated fair value less costs to sell.

As of December 31, 2021, we owned 67 hotels with 8,667 rooms with an aggregate carrying value of $ 503,078 and 22 net lease properties with 154,206 square feet with an aggregate carrying value of $ 12,440 classified as held for sale.

These properties are recorded at their then estimated fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP).

We recorded a $ 78,620 loss on asset impairment in 2021 to reduce the carrying value of these properties to their estimated fair value less costs to sell.

In addition to the assets included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility, term loan, senior notes and security deposits.

32 unchanged sentences

At December 31, 2022 and 2021, we estimated the fair values of our senior notes using an average of the bid and ask price of our then outstanding issuances of senior notes (Level 2 inputs).

Subsequent Event

On February 15, 2023, we and certain of our subsidiaries entered into a consent and amendment agreement, or the Consent Agreement, with TA and its subsidiary, TA Operating LLC, or together, the TCA Parties, and BP Products North America Inc., or BP, pursuant to which we and our applicable subsidiaries:

(1) consented to TA’s entering into an agreement and plan of merger, or the Merger Agreement, with BP and its merger subsidiary, pursuant to which BP will acquire TA in a merger transaction, or the Merger, for cash consideration of $ 86.00 per share of the outstanding shares of common stock, par value $ 0.001 per share, of TA, or the TA common shares, and to the consummation of the Merger and the other transactions contemplated by the Merger Agreement, or collectively, the BP Acquisition;

(2) agreed to amend and restate our subsidiaries’ existing lease and guaranty agreements with the applicable TCA Parties, effective at the time of the Merger;

and (3) agreed to sell to TA certain tradenames and trademarks associated with TA’s business that we or our applicable subsidiaries own at their current book value of $ 89,400 , effective at the time of the Merger.

Pursuant to the amended and restated lease agreements to be entered into at the effective time of the Merger, or the A&R Leases, for 176 of our travel center properties, the aggregate annual minimum rent due to our applicable subsidiaries will be $ 254,000 , with annual 2 % increases throughout the initial term and any renewal terms of the A&R Leases, and there will be no percentage rent requirement.

The A&R Leases will each have an initial term of 10 years, with five 10 -year extension options, and TA Operating LLC will prepay $ 188,000 of rent under the A&R Leases at the effective time of the Merger and will receive

monthly rent credits totaling $ 25,000 per year over the 10 -year initial term of the A&R Leases.

In addition, TA Operating LLC will have a right of first offer with respect to certain potential sales of travel center properties included in the A&R Leases.

Pursuant to the amended and restated guaranty amendments to be entered into at the effective time of the Merger, or the A&R Guarantees, BP Corporation North America Inc.

will guarantee payment under each of the A&R Leases.

BP Corporation North America Inc.’s obligations under the A&R Guarantees will be limited by an initial aggregate cap of approximately $ 3,040,000 .

The Merger is subject to various customary conditions to closing, including the approval of TA stockholders owning a majority of the TA common shares outstanding, as well as regulatory approvals.

The parties currently expect that the BP Acquisition will be completed by mid-year 2023.

SERVICE PROPERTIES TRUST

13 unchanged sentences

17 Royal Sonesta $ 227 $ 1,118 $ 408 $ ( 9 ) $ ( 12 ) $ 229 $ 1,503 $ 1,732

227 1,118 405 ( 9 ) ( 9 ) 227 1,496 1,723

136 588 321 ( 51 ) ( 5 ) 136 848 984

22 Sonesta 136 588 338 ( 51 ) ( 9 ) 136 866 1,002

60 Sonesta ES Suites 132 557 343 ( 35 ) ( 62 ) 132 803 935

132 557 368 ( 35 ) ( 48 ) 132 794 926

44 Sonesta Select 84 395 249 ( 8 ) ( 77 ) 84 559 643

84 395 308 ( 8 ) ( 71 ) 89 548 637

51 Simply Suites 68 341 104 ( 17 ) ( 24 ) 68 404 472

68 341 105 ( 17 ) ( 18 ) 66 395 461

17 Hyatt Place 20 137 36 — ( 3 ) 20 170 190

20 137 21 — — 20 158 178

5 Radisson Hotel 9 93 48 — — 9 141 150

9 93 45 — — 9 138 147

1 Crowne Plaza 17 69 30 — — 17 99 116

17 69 30 — — 17 99 116

13 64 63 ( 14 ) ( 23 ) 12 68 80

3 Country Inn and Suites 4 29 10 — — 4 39 43

4 29 10 — — 4 39 43

3 Residence Inn

4 9 12 ( 3 ) ( 1 ) 3 17 20

Net Lease Properties

133 TravelCenters of America 568 939 469 — ( 368 ) 576 1,032 1,608

568 939 463 — — 575 1,393 1,968

44 Petro Stopping Centers 260 522 193 — ( 209 ) 261 506 767

260 522 210 — — 259 717 976

11 AMC Theatres

30 55 1 — — 30 56 86

14 The Great Escape 19 64 — — — 19 64 83

19 64 — — — 19 64 83

3 Life Time Fitness 17 56 — — — 17 56 73

17 56 — — — 17 56 73

9 AMC Theatres 24 42 1 — — 24 43 67

5 Buehler's Fresh Foods 10 49 — — — 10 49 59

10 49 — — — 10 49 59

59 Heartland Dental 11 37 — — — 11 37 48

11 37 — — — 11 37 48

23 24 — — — 23 24 47

10 Norms 23 24 — — — 23 24 47

19 Vacant 14 30 — — — 14 30 44

23 Express Oil Change 6 37 — — — 6 37 43

6 37 — — — 6 37 43

12 27 — — — 12 27 39

40 Pizza Hut 12 28 — — — 12 28 40

3 Flying J Travel Plaza 6 32 — — — 6 32 38

6 32 — — — 6 32 38

6 America's Auto Auction 7 23 4 — — 7 27 34

7 23 4 — — 7 27 34

6 Regal Cinemas

9 25 — — — 9 25 34

4 Courthouse Athletic Club 5 28 — — — 5 28 33

5 28 — — — 5 28 33

44 Church's Chicken

7 25 — — — 7 25 32

3 28 — — — 3 28 31

2 Big Al's 3 28 — — — 3 28 31

21 Burger King 9 22 — — — 9 22 31

9 22 — — — 9 22 31

3 27 — — — 3 27 30

4 24 — — — 4 24 28

1 Fleet Farm 3 27 — — — 3 27 30

4 B&B Theatres 12 15 3 — — 12 18 30

12 15 — — — 12 15 27

7 20 — — — 7 20 27

7 19 — — — 7 19 26

4 Creme de la Creme

7 18 — — — 7 18 25

19 Hardee's 4 24 — — — 4 24 28

16 Martin's 7 20 — — — 7 20 27

5 Regal Cinemas 5 21 — — — 5 21 26

19 Arby's 7 19 — — — 7 19 26

20 Popeye's Chicken & Biscuits 8 17 — — — 8 17 25

8 17 — — — 8 17 25

4 Creme de la Creme 7 18 — — — 7 18 25

32 Church's Chicken 5 18 — — — 5 18 23

5 Mister Car Wash 2 19 — — — 2 19 21

2 19 — — — 2 19 21

6 United Supermarkets 4 17 — — — 4 17 21

4 17 — — — 4 17 21

2 Mesa Fitness 3 17 — — — 3 17 20

3 17 — — — 3 17 20

4 15 — — — 4 15 19

5 13 — — — 5 13 18

1 CarMax 5 13 — — — 5 13 18

13 Taco Bell 4 15 — — — 4 15 19

28 Uncle Ed's Oil Shoppe 6 12 — — — 6 12 18

6 12 — — — 6 12 18

1 Dave & Buster's 3 11 — — — 3 11 14

3 11 — — — 3 11 14

2 Fusion Gyms

3 10 1 — — 3 11 14

5 Pike Nursery 8 6 — — — 8 6 14

8 6 — — — 8 6 14

2 Fusion Gyms 3 10 1 — — 3 11 14

2 HHI-Formtech 3 10 — — — 3 10 13

3 10 — — — 3 10 13

3 Golden Corral 4 8 — — — 4 8 12

4 8 — — — 4 8 12

3 9 — — — 3 9 12

5 Rite Aid 3 9 — — — 3 9 12

5 Fuddruckers 4 6 — — — 4 6 10

2 Sanford's Grub & Pub 1 10 — — — 1 10 11

1 10 — — — 1 10 11

1 Baptist Emergency Hospital 2 8 — — — 2 8 10

2 8 — — — 2 8 10

2 Eddie Merlot's 2 8 — — — 2 8 10

1 Cermak Fresh Market 2 7 — — — 2 7 9

12 Core & Main 4 5 — — — 4 5 9

Initial Cost to

7 unchanged sentences

Improvements Total (2)

2 Eddie Merlot's

2 8 — — — 2 8 10

5 Fuddruckers

4 6 — — — 4 6 10

1 Cermak Fresh Market

2 7 — — — 2 7 9

1 Columbus Preparatory Academy

1 8 — — — 1 8 9

12 Core & Main

4 5 — — — 4 5 9

5 Lerner and Rowe 1 8 — — — 1 8 9

1 8 — — — 1 8 9

4 Meineke Car Care Center

3 6 — — — 3 6 9

3 Texas Roadhouse

3 6 — — — 3 6 9

1 Kohl's 2 6 — — — 2 6 8

1 Austin's Park n' Pizza — 8 — — — — 8 8

— 8 — — — — 8 8

2 6 — — — 2 6 8

1 7 — — — 1 7 8

4 Meineke Car Care Center 3 6 — — — 3 6 9

1 Columbus Preparatory Academy 1 8 — — — 1 8 9

1 LA Fitness 1 7 — — — 1 7 8

1 Academy Sports + Outdoors 1 6 — — — 1 6 7

1 6 — — — 1 6 7

3 4 — — — 3 4 7

1 Columbus Arts & Tech Academy

1 6 — — — 1 6 7

2 Diagnostic Health

1 6 — — — 1 6 7

3 Krispy Kreme

2 5 — — — 2 5 7

1 Marcus Theaters 2 5 1 — — 2 6 8

2 5 — — — 2 5 7

3 Oregano's Pizza Bistro 1 6 — — — 1 6 7

1 6 — — — 1 6 7

1 Columbus Arts & Tech Academy 1 6 — — — 1 6 7

2 Blue Rhino 3 4 — — — 3 4 7

3 Texas Roadhouse 3 6 — — — 3 6 9

3 Krispy Kreme 2 5 — — — 2 5 7

2 Diagnostic Health 1 6 — — — 1 6 7

9 Sonic Drive-In 3 4 — — — 3 4 7

3 4 — — — 3 4 7

— 6 — — — — 6 6

5 Brookshire Brothers 1 5 — — — 1 5 6

1 5 — — — 1 5 6

2 Flying Star Cafe 1 5 — — — 1 5 6

1 5 — — — 1 5 6

7 Hughes Supply

2 4 — — — 2 4 6

1 Jack Stack Barbeque

1 5 — — — 1 5 6

3 Jack's Family Restaurant 2 4 — — — 2 4 6

2 4 — — — 2 4 6

1 5 — — — 1 5 6

2 3 — — — 2 3 5

2 Axels — 6 — — — — 6 6

3 Wendy's 1 5 — — — 1 5 6

1 Jack Stack Barbeque 1 5 — — — 1 5 6

7 Hughes Supply 2 4 — — — 2 4 6

1 Multi-Tenant 1 4 — — — 1 4 5

1 Adult & Pediatric Orthopedics 1 4 — — — 1 4 5

1 4 — — — 1 4 5

2 Bricktown Brewery 1 4 — — — 1 4 5

1 4 — — — 1 4 5

2 Walgreens — 5 — — — — 5 5

2 10 Box 2 3 — — — 2 3 5

1 Mak Pack 1 4 — — — 1 4 5

1 ConForm Automotive 2 3 — — — 2 3 5

2 3 — — — 2 3 5

2 Gerber Collision & Glass

1 4 — — — 1 4 5

2 HD Supply White Cap 2 3 — — — 2 3 5

2 3 — — — 2 3 5

1 Multi-Tenant

1 4 11 — — 3 13 16

1 Planet Fitness 1 4 — — — 1 4 5

1 4 — — — 1 4 5

1 RGB Eye Associates 1 4 — — — 1 4 5

1 4 — — — 1 4 5

— 5 — — — — 5 5

2 Gerber Collision & Glass 1 4 — — — 1 4 5

1 Discount Tire 1 4 — — — 1 4 5

2 Famous Dave's 1 3 — — — 1 3 4

1 Metaldyne BSM — 4 — — — — 4 4

3 Focus Child Development Center 1 3 — — — 1 3 4

1 Ashley Furniture 1 3 — — — 1 3 4

1 3 — — — 1 3 4

1 Boozman-Hof 2 2 — — — 2 2 4

2 2 — — — 2 2 4

1 Caldwell Country Chevrolet

— 4 — — — — 4 4

1 Sportsman's Warehouse 1 3 — — — 1 3 4

1 Eriks Bike Shop 1 3 — — — 1 3 4

1 3 — — — 1 3 4

2 Famous Dave's

1 3 — — — 1 3 4

3 Focus Child Development Center

1 3 — — — 1 3 4

1 Joe's Crab Shack

1 3 — — — 1 3 4

1 Max & Erma's 1 3 — — — 1 3 4

1 3 — — — 1 3 4

1 Metaldyne BSM

— 4 — — — — 4 4

1 Joe's Crab Shack 1 3 — — — 1 3 4

1 Applebee's 1 2 — — — 1 2 3

1 Rainbow Kids Clinic 1 3 — — — 1 3 4

1 3 — — — 1 3 4

1 Sportsman's Warehouse

1 3 — — — 1 3 4

1 2 — — — 1 2 3

1 Black Angus Steakhouse

1 2 — — — 1 2 3

1 Buffalo Wild Wings

1 2 — — — 1 2 3

1 Tractor Supply — 3 — — — — 3 3

1 Spoons Place 1 2 — — — 1 2 3

1 Nacarato Trucks — 2 — — — — 2 2

1 Southwest Stainless, LP — 3 — — — — 3 3

1 Heytex USA — 2 — — — — 2 2

2 Anixter 1 2 — — — 1 2 3

1 What the Buck — 3 — — — — 3 3

1 Kerry's Car Care 1 2 — — — 1 2 3

1 2 — — — 1 2 3

2 Monterey's Tex Mex

1 2 — — — 1 2 3

2 Hooters 1 1 — — — 1 1 2

1 Mind 24-7 1 3 — ( 3 ) — 1 — 1

1 Ojos Locos Sports Cantina 1 2 — — — 1 2 3

1 2 — — — 1 2 3

1 Black Angus Steakhouse 1 2 — — — 1 2 3

1 Bridgestone Tire 1 1 — — — 1 1 2

Initial Cost to

7 unchanged sentences

Improvements Total (2)

2 Orscheln Farm and Home

1 2 — — — 1 2 3

2 Rick Johnson Auto & Tire

1 2 — — — 1 2 3

1 Buffalo Wild Wings 1 2 — — — 1 2 3

2 Taco Bueno 1 1 — — — 1 1 2

1 Slim Chickens 1 2 — — — 1 2 3

1 2 — — — 1 2 3

1 Southwest Stainless, LP

— 3 — — — — 3 3

1 Spoons Place

1 2 — — — 1 2 3

1 Tractor Supply

— 3 — — — — 3 3

1 What the Buck

— 3 — — — — 3 3

2 Affordable Care, Inc.

1 1 — — — 1 1 2

1 Bridgestone Tire

1 1 — — — 1 1 2

2 Dollar General

— 2 — — — — 2 2

1 1 — — — 1 1 2

— 2 — — — — 2 2

1 Long John Silver's

1 1 — — — 1 1 2

2 Monterey's Tex Mex 1 2 — — — 1 2 3

3 Rally's 1 1 — — — 1 1 2

1 Red Robin Gourmet Burgers 1 1 — — — 1 1 2

1 1 — — — 1 1 2

1 Schumacher Homes

1 1 — — — 1 1 2

1 Primanti Bros.

1 1 — — — 1 1 2

1 Bru Burger Bar

1 Orscheln Farm and Home 1 1 — — — 1 1 2

1 Cycle Gear 1 1 — — — 1 1 2

2 Dollar General — 2 — — — — 2 2

2 Affordable Care, Inc.

1 1 — — — 1 1 2

1 Chicken Salad Chick — 1 — — — — 1 1

— 1 — — — — 1 1

1 El Forastero

— 1 — — — — 1 1

1 Wings, Etc — 1 — — — — 1 1

1 SRS Distribution — 1 — — — — 1 1

1 Bru Burger Bar — 1 — — — — 1 1

1 ERA Capital — 1 — — — — 1 1

— 1 — — — — 1 1

1 Howlin Concrete

1 — — — — 1 — 1

1 Little Caesars

— 1 — — — — 1 1

1 NAPA Auto Parts

— 1 — — — — 1 1

1 Old Mexico Cantina — 1 — — — — 1 1

— 1 — — — — 1 1

1 O'Reilly Auto Parts

— 1 — — — — 1 1

1 SRS Distribution

— 1 — — — — 1 1

1 KFC — 1 — — — — 1 1

1 The Atlanta Center for Foot & Ankle Surgery — 1 — — — — 1 1

— 1 — — — — 1 1

1 O'Reilly Auto Parts — 1 — — — — 1 1

1 Long John Silver's 1 1 — — — 1 1 2

1 Touchstone Imaging — 1 — — — — 1 1

— 1 — — — — 1 1

1 Bigham Cable

— 1 — — — — — —

1 Consolidated Pipe

— — — — — — — —

1 Dunkin Donuts — — — — — — — —

— — — — — — — —

1 Family Dollar Stores

— — — — — — — —

1 Kings Wings N Things

— — — — — — — —

1 Howlin Concrete 1 — — — — 1 — 1

1 El Forastero — 1 — — — — 1 1

1 Bechheit — 1 — — — — 1 1

1 Little Caesars — 1 — — — — 1 1

1 NAPA Auto Parts — 1 — — — — 1 1

1 Robata — 1 — — — — 1 1

1 Off the Hook Seafood & More — — — — — — — —

— — — — — — — —

1 Consolidated Pipe — — — — — — — —

1 Bigham Cable — — — — — — — —

1 Sharks Fish & Chicken — — — — — — — —

— — — — — — — —

4 15 — — — 4 15 19

1 Kings Wings N Things — — — — — — — —

1 Family Dollar Stores — — — — — — — —

1 Del Taco — — — — — — — —

1 Scooters Coffee — — — — — — — —

Other 2 8 2 — — 2 10 12

1 unchanged sentence

Assets Held for Sale

$ 110 $ 541 $ 84 $ ( 64 ) $ ( 3 ) $ 95 $ 506 $ 601

22 Net lease properties

7 23 — ( 18 ) — 7 6 12

Total ( 1091 properties)

$ 2,027 $ 6,570 $ 2,464 $ ( 219 ) $ ( 178 ) $ 2,021 $ 8,383 $ 10,403

18 Hotels $ 25 $ 123 $ 75 $ ( 58 ) $ ( 43 ) $ 19 $ 97 $ 116

4 Net Lease Service Retail 1 3 — ( 2 ) — 1 1

1,003 Total $ 1,918 $ 6,054 $ 2,315 $ ( 183 ) $ ( 807 ) $ 1,922 $ 7,369 $ 9,291

(1) Represents reclassifications between accumulated depreciation and building & improvements made to record certain properties at fair value in accordance with GAAP.

10 unchanged sentences

Hotel Properties

60 Sonesta ES Suites

( 391 ) 1984 through 2000 1996 through 2017 10 - 40 Years

17 Royal Sonesta

( 340 ) 1913 through 1987 2005 through 2017 10 - 40 Years

44 Sonesta Select

( 312 ) 1987 through 2000 1995 through 2003 10 - 40 Years

( 253 ) 1924 through 1999 2005 through 2018 10 - 40 Years

51 Simply Suites

( 203 ) 1996 through 2000 1997 through 2003 10 - 40 Years

17 Hyatt Place

( 89 ) 1992 through 2000 1997 through 2002 10 - 40 Years

5 Radisson Hotel

( 70 ) 1987 through 1990 1996 through 2018 10 - 40 Years

3 Country Inn and Suites by Radisson

( 20 ) 1987 through 1997 1996 and 2005 10 - 40 Years

1 Crowne Plaza

( 12 ) 1971 through 1988 2006 and 2017 10 - 40 Years

( 4 ) 1987 through 2000 1995 through 2003 10 - 40 Years

( 1 ) 1989 through 2002 1996 through 2005 10 - 40 Years

Net Lease Properties

134 TravelCenters of America

( 834 ) 1962 through 2017 2007 through 2017 10 - 40 Years

45 Petro Stopping Centers

( 418 ) 1975 through 2017 2007 through 2017 10 - 40 Years

11 AMC Theatres

( 6 ) 1993 through 2008 2019 10 - 40 Years

5 Buehler's Fresh Foods

( 6 ) 1985 through 2000 2019 10 - 40 Years

( 6 ) 1972 through 2006 2019 10 - 40 Years

3 Life Time Fitness

( 5 ) 1987 through 2012 2019 10 - 40 Years

14 The Great Escape

( 5 ) 1986 through 2007 2019 10 - 40 Years

( 4 ) 1969 through 2005 2019 10 - 40 Years

21 Burger King

( 4 ) 1968 through 1985 2019 10 - 40 Years

44 Church's Chicken

( 3 ) 1668 to 1985 2019 10 - 40 Years

4 Courthouse Athletic Club

( 3 ) 1997 through 2001 2019 10 - 40 Years

23 Express Oil Change

( 3 ) 1970 through 2001 2019 10 - 40 Years

( 3 ) 1969 through 1994 2019 10 - 40 Years

59 Heartland Dental

( 3 ) 1920 through 2005 2019 10 - 40 Years

1 Multi-Tenant

( 3 ) 2001 2019 10 - 40 Years

20 Popeye's Chicken & Biscuits

( 3 ) 1968 through 2004 2019 10 - 40 Years

6 America's Auto Auction

( 2 ) 1965 through 2005 2019 10 - 40 Years

4 B&B Theatres

( 2 ) 1998 through 2004 2019 10 - 40 Years

( 2 ) 2006 through 2010 2019 10 - 40 Years

1 Cermak Fresh Market

( 2 ) 1989 2019 10 - 40 Years

( 2 ) 1979 2019 10 - 40 Years

3 Flying J Travel Plaza

( 2 ) 2001 2019 10 - 40 Years

2 HHI-Formtech

( 2 ) 1952 2019 10 - 40 Years

( 2 ) 1962 through 2003 2019 10 - 40 Years

2 Mesa Fitness

( 2 ) 1983 through 2007 2019 10 - 40 Years

( 2 ) 1957 through 2014 2019 10 - 40 Years

6 Regal Cinemas

( 2 ) 2005 through 2010 2019 10 - 40 Years

( 2 ) 1982 through 2010 2019 10 - 40 Years

28 Uncle Ed's Oil Shoppe

( 2 ) 1959 through 1999 2019 10 - 40 Years

17 Royal Sonesta $ ( 383 ) 1913 through 1987 2005 through 2017 10 - 40 Years

22 Sonesta ( 278 ) 1924 through 1999 2005 through 2018 10 - 40 Years

60 Sonesta ES Suites ( 405 ) 1984 through 2000 1996 through 2017 10 - 40 Years

44 Sonesta Select ( 326 ) 1987 through 2000 1995 through 2003 10 - 40 Years

51 Simply Suites ( 209 ) 1996 through 2000 1997 through 2003 10 - 40 Years

17 Hyatt Place ( 92 ) 1992 through 2000 1997 through 2002 10 - 40 Years

5 Radisson Hotel ( 74 ) 1987 through 1990 1996 through 2018 10 - 40 Years

1 Crowne Plaza ( 15 ) 1971 through 1988 2006 and 2017 10 - 40 Years

3 Country Inn and Suites ( 21 ) 1987 through 1997 1996 and 2005 10 - 40 Years

133 Travel Centers of America ( 524 ) 1962 through 2017 2007 through 2017 10 - 40 Years

44 Petro Stopping Centers ( 238 ) 1975 through 2017 2007 through 2017 10 - 40 Years

40 Pizza Hut ( 9 ) 1972 through 2006 2019 10 - 40 Years

5 Buehler's Fresh Foods ( 8 ) 1980 through 2000 2019 10 - 40 Years

14 The Great Escape ( 8 ) 1986 through 2007 2019 10 - 40 Years

9 AMC Theatres ( 7 ) 1994 through 2008 2019 10 - 40 Years

3 Life Time Fitness ( 7 ) 1987 through 2012 2019 10 - 40 Years

19 Vacant ( 7 ) 1970 through 2008 2019 10 - 40 Years

21 Burger King ( 5 ) 1997 through 2004 2019 10 - 40 Years

19 Arby's ( 5 ) 1967 through 2005 2019 10 - 40 Years

19 Hardee's ( 5 ) 1969 through 1997 2019 10 - 40 Years

59 Heartland Dental ( 5 ) 1920 through 2005 2019 10 - 40 Years

23 Express Oil Change ( 5 ) 1965 through 2001 2019 10 - 40 Years

4 Courthouse Athletic Club ( 4 ) 1980 through 2001 2019 10 - 40 Years

20 Popeye's Chicken & Biscuits ( 4 ) 1968 through 2003 2019 10 - 40 Years

6 America's Auto Auction ( 4 ) 1960 through 2005 2019 10 - 40 Years

10 Norms ( 4 ) 1957 through 2014 2019 10 - 40 Years

6 United Supermarkets ( 3 ) 1979 through 1997 2019 10 - 40 Years

3 Flying J Travel Plaza ( 3 ) 2001 2019 10 - 40 Years

16 Martin's ( 3 ) 1962 through 2003 2019 10 - 40 Years

2 HHI-Formtech ( 3 ) 1952 2019 10 - 40 Years

32 Church's Chicken ( 3 ) 1968 through 1983 2019 10 - 40 Years

28 Uncle Ed's Oil Shoppe ( 3 ) 1959 through 1999 2019 10 - 40 Years

1 Fleet Farm ( 3 ) 1979 2019 10 - 40 Years

4 B&B Theatres ( 3 ) 1998 through 2004 2019 10 - 40 Years

5 Regal Cinemas ( 3 ) 2005 through 2010 2019 10 - 40 Years

13 Taco Bell ( 2 ) 1982 through 2019 2019 10 - 40 Years

2 Big Al's ( 2 ) 2006 through 2010 2019 10 - 40 Years

1 Cermak Fresh Market ( 2 ) 1989 2019 10 - 40 Years

2 Mesa Fitness ( 2 ) 1983 through 2007 2019 10 - 40 Years

5 Mister Car Wash ( 2 ) 1960 through 2005 2019 10 - 40 Years

Depreciation (1)

3 unchanged sentences

Latest Income

6 United Supermarkets

( 2 ) 1979 through 1997 2019 10 - 40 Years

( 1 ) 1991 2019 10 - 40 Years

1 Adult & Pediatric Orthopedics

( 1 ) 1991 2019 10 - 40 Years

1 Austin's Park n' Pizza

( 1 ) 2003 2019 10 - 40 Years

( 1 ) 1995 through 1996 2019 10 - 40 Years

2 Bricktown Brewery

( 1 ) 1904 through 1984 2019 10 - 40 Years

5 Brookshire Brothers

( 1 ) 1990 through 1999 2019 10 - 40 Years

( 1 ) 2005 2019 10 - 40 Years

1 Columbus Preparatory Academy

( 1 ) 2004 2019 10 - 40 Years

1 ConForm Automotive

( 1 ) 1987 2019 10 - 40 Years

12 Core & Main

( 1 ) 1972 through 2001 2019 10 - 40 Years

4 Creme de la Creme

( 1 ) 1999 through 2008 2019 10 - 40 Years

1 Dave & Buster's

( 1 ) 1992 2019 10 - 40 Years

2 Diagnostic Health

( 1 ) 1985 through 1997 2019 10 - 40 Years

2 Eddie Merlot's

( 1 ) 1997 through 2003 2019 10 - 40 Years

5 Fuddruckers

( 1 ) 1994 through 1995 2019 10 - 40 Years

2 Fusion Gyms

( 1 ) 1987 through 1984 2019 10 - 40 Years

3 Golden Corral

( 1 ) 1993 through 2000 2019 10 - 40 Years

( 1 ) 2008 through 2016 2019 10 - 40 Years

7 Hughes Supply

( 1 ) 1993 2019 10 - 40 Years

1 Jack Stack Barbeque

( 1 ) 1983 2019 10 - 40 Years

1 Joe's Crab Shack

( 1 ) 1997 2019 10 - 40 Years

( 1 ) 1986 2019 10 - 40 Years

3 Krispy Kreme

( 1 ) 2000 through 2004 2019 10 - 40 Years

5 Lerner and Rowe

( 1 ) 1973 through 2007 2019 10 - 40 Years

1 Marcus Theaters

( 1 ) 1999 2019 10 - 40 Years

4 Meineke Car Care Center

( 1 ) 1999 through 2000 2019 10 - 40 Years

1 Metaldyne BSM

( 1 ) 1960 2019 10 - 40 Years

5 Mister Car Wash

( 1 ) 1960 through 2002 2019 10 - 40 Years

3 Oregano's Pizza Bistro

( 1 ) 1964 through 2006 2019 10 - 40 Years

5 Pike Nursery

( 1 ) 1970 through 1996 2019 10 - 40 Years

( 1 ) 1901 through 2000 2019 10 - 40 Years

2 Sanford's Grub & Pub

( 1 ) 1928 through 2003 2019 10 - 40 Years

9 Sonic Drive-In

( 1 ) 1987 through 2010 2019 10 - 40 Years

1 Sportsman's Warehouse

( 1 ) 1983 2019 10 - 40 Years

3 Texas Roadhouse

( 1 ) 2003 to 2005 2019 10 - 40 Years

( 1 ) 1999 through 2000 2019 10 - 40 Years

( 1 ) 1984 through 1989 2019 10 - 40 Years

1 Academy Sports + Outdoors

— 2016 2019 10 - 40 Years

2 Affordable Care, Inc.

— 2008 through 2010 2019 10 - 40 Years

— 1984 through 1999 2019 10 - 40 Years

— 1996 2019 10 - 40 Years

1 Ashley Furniture

— 1973 2019 10 - 40 Years

1 Baptist Emergency Hospital

— 2013 2019 10 - 40 Years

1 Bigham Cable

— 1982 2019 10 - 40 Years

1 Black Angus Steakhouse

— 1996 2019 10 - 40 Years

3 Golden Corral ( 2 ) 1989 through 2000 2019 10 - 40 Years

5 Rite Aid ( 2 ) 1991 through 2000 2019 10 - 40 Years

4 Creme de la Creme ( 2 ) 1999 through 2009 2019 10 - 40 Years

5 Fuddruckers ( 2 ) 1994 through 1995 2019 10 - 40 Years

1 CarMax ( 2 ) 2005 2019 10 - 40 Years

2 Axels ( 2 ) 1953 through 1995 2019 10 - 40 Years

2 Fusion Gyms ( 1 ) 1987 through 1994 2019 10 - 40 Years

2 Sanford's Grub & Pub ( 1 ) 1928 through 2003 2019 10 - 40 Years

1 Metaldyne BSM ( 1 ) 1960 2019 10 - 40 Years

2 Bricktown Brewery ( 1 ) 1904 through 1984 2019 10 - 40 Years

3 Oregano's Pizza Bistro ( 1 ) 1964 through 2006 2019 10 - 40 Years

2 Eddie Merlot's ( 1 ) 1997 through 2003 2019 10 - 40 Years

1 Marcus Theaters ( 1 ) 1999 2019 10 - 40 Years

5 Brookshire Brothers ( 1 ) 1990 through 1999 2019 10 - 40 Years

1 Austin's Park n' Pizza ( 1 ) 2003 2019 10 - 40 Years

1 ConForm Automotive ( 1 ) 1987 2019 10 - 40 Years

1 Sportsman's Warehouse ( 1 ) 1983 2019 10 - 40 Years

12 Core & Main ( 1 ) 1972 through 1998 2019 10 - 40 Years

1 Kohl's ( 1 ) 1986 2019 10 - 40 Years

5 Pike Nursery ( 1 ) 1970 through 1996 2019 10 - 40 Years

9 Sonic Drive-In ( 1 ) 1987 through 2010 2019 10 - 40 Years

1 Dave & Buster's ( 1 ) 1992 2019 10 - 40 Years

4 Meineke Car Care Center ( 1 ) 1999 through 2000 2019 10 - 40 Years

3 Wendy's ( 1 ) 1984 through 1996 2019 10 - 40 Years

2 Walgreens ( 1 ) 1993 through 1999 2019 10 - 40 Years

7 Hughes Supply ( 1 ) 1976 through 1993 2019 10 - 40 Years

2 10 Box ( 1 ) 1994 2019 10 - 40 Years

5 Lerner and Rowe ( 1 ) 1970 through 2007 2019 10 - 40 Years

1 Heytex USA ( 1 ) 1967 2019 10 - 40 Years

3 Krispy Kreme ( 1 ) 2000 through 2004 2019 10 - 40 Years

1 Joe's Crab Shack ( 1 ) 1997 2019 10 - 40 Years

1 Jack Stack Barbeque ( 1 ) 1983 2019 10 - 40 Years

1 Adult & Pediatric Orthopedics ( 1 ) 1991 2019 10 - 40 Years

1 Columbus Preparatory Academy ( 1 ) 2004 2019 10 - 40 Years

2 Diagnostic Health ( 1 ) 1985 through 1997 2019 10 - 40 Years

2 Flying Star Cafe ( 1 ) 1994 through 1999 2019 10 - 40 Years

1 Baptist Emergency Hospital ( 1 ) 2013 2019 10 - 40 Years

1 Columbus Arts & Tech Academy ( 1 ) 1980 2019 10 - 40 Years

1 What the Buck ( 1 ) 1958 2019 10 - 40 Years

1 Eriks Bike Shop ( 1 ) 1996 2019 10 - 40 Years

1 LA Fitness ( 1 ) 2012 2019 10 - 40 Years

1 Max & Erma's ( 1 ) 1990 through 2007 2019 10 - 40 Years

2 Gerber Collision & Glass ( 1 ) 2001 through 2002 2019 10 - 40 Years

1 Ojos Locos Sports Cantina ( 1 ) 1993 2019 10 - 40 Years

1 Academy Sports + Outdoors ( 1 ) 2016 2019 10 - 40 Years

3 Jack's Family Restaurant ( 1 ) 2008 through 2016 2019 10 - 40 Years

Depreciation (1)

3 unchanged sentences

Latest Income

— 2004 2019 10 - 40 Years

1 Boozman-Hof

— 1988 2019 10 - 40 Years

1 Bridgestone Tire

— 1998 2019 10 - 40 Years

1 Bru Burger Bar

— 1996 2019 10 - 40 Years

1 Buffalo Wild Wings

— 2014 2019 10 - 40 Years

1 Caldwell Country Chevrolet

— 2000 2019 10 - 40 Years

1 Chicken Salad Chick

— 1976 2019 10 - 40 Years

1 Columbus Arts & Tech Academy

— 1980 2019 10 - 40 Years

1 Consolidated Pipe

— 1987 2019 10 - 40 Years

— 1996 2019 10 - 40 Years

— 1992 2019 10 - 40 Years

2 Dollar General

— 2012 through 2015 2019 10 - 40 Years

1 Dunkin Donuts

— 1977 2019 10 - 40 Years

1 El Forastero

— 1992 2019 10 - 40 Years

1 ERA Capital

— 1999 2019 10 - 40 Years

1 Eriks Bike Shop

— 1996 2019 10 - 40 Years

1 Family Dollar Stores

— 1988 2019 10 - 40 Years

2 Famous Dave's

— 1997 through 1999 2019 10 - 40 Years

— 1982 2019 10 - 40 Years

2 Flying Star Cafe

— 1994 through 1999 2019 10 - 40 Years

3 Focus Child Development Center

— 1965 through 1998 2019 10 - 40 Years

2 Gerber Collision & Glass

— 2001 through 2002 2019 10 - 40 Years

2 HD Supply White Cap

— 1990 through 2001 2019 10 - 40 Years

— 1997 through 1994 2019 10 - 40 Years

1 Howlin Concrete

— 1975 2019 10 - 40 Years

3 Jack's Family Restaurant

— 2008 through 2016 2019 10 - 40 Years

1 Kerry's Car Care

— 2015 2019 10 - 40 Years

— 1977 through 2006 2019 10 - 40 Years

1 Kings Wings N Things

— 1997 2019 10 - 40 Years

— 2012 2019 10 - 40 Years

1 Little Caesars

— 1996 2019 10 - 40 Years

1 Long John Silver's

— 1972 through 1987 2019 10 - 40 Years

1 Max & Erma's

— 1990 through 2007 2019 10 - 40 Years

2 Monterey's Tex Mex

— 1979 through 1997 2019 10 - 40 Years

1 NAPA Auto Parts

— 2001 2019 10 - 40 Years

1 Off the Hook Seafood & More

— 2007 2019 10 - 40 Years

1 Ojos Locos Sports Cantina

— 1993 2019 10 - 40 Years

1 Old Mexico Cantina

— 2007 2019 10 - 40 Years

1 O'Reilly Auto Parts

— 2006 2019 10 - 40 Years

2 Orscheln Farm and Home

— 1977 through 1986 2019 10 - 40 Years

1 Planet Fitness

— 2007 2019 10 - 40 Years

1 Rainbow Kids Clinic

— 2011 2019 10 - 40 Years

— 1990 through 1992 2019 10 - 40 Years

1 Red Robin Gourmet Burgers

— 1995 2019 10 - 40 Years

1 RGB Eye Associates

— 2013 2019 10 - 40 Years

2 Rick Johnson Auto & Tire

3 Texas Roadhouse ( 1 ) 1992 through 2003 2019 10 - 40 Years

1 Nacarato Trucks ( 1 ) 1985 2019 10 - 40 Years

2 HD Supply White Cap ( 1 ) 1990 through 2001 2019 10 - 40 Years

1 Planet Fitness ( 1 ) 2007 2019 10 - 40 Years

2 Taco Bueno ( 1 ) 1991 through 2003 2019 10 - 40 Years

1 Mak Pack ( 1 ) 2007 2019 10 - 40 Years

2 Blue Rhino — 2004 2019 10 - 40 Years

2 Famous Dave's — 1997 through 1999 2019 10 - 40 Years

1 Discount Tire — 2009 2019 10 - 40 Years

2 Hooters — 1997 through 1994 2019 10 - 40 Years

2 Monterey's Tex Mex — 1979 through 1997 2019 10 - 40 Years

1 Multi-Tenant — 2001 2019 10 - 40 Years

1 Cycle Gear — 1996 2019 10 - 40 Years

1 Southwest Stainless, LP — 1984 2019 10 - 40 Years

2 Anixter — 1984 through 1999 2019 10 - 40 Years

1 Applebee's — 1996 2019 10 - 40 Years

1 RGB Eye Associates — 2013 2019 10 - 40 Years

1 Ashley Furniture — 2000 2019 10 - 40 Years

1 Red Robin Gourmet Burgers — 1995 2019 10 - 40 Years

1 Boozman-Hof — 1988 2019 10 - 40 Years

3 Rally's — 1990 through 1992 2019 10 - 40 Years

1 Tractor Supply — 2007 2019 10 - 40 Years

1 SRS Distribution — 1975 2019 10 - 40 Years

1 Rainbow Kids Clinic — 2011 2019 10 - 40 Years

3 Focus Child Development Center — 1965 through 1998 2019 10 - 40 Years

1 Bridgestone Tire — 1998 2019 10 - 40 Years

1 Spoons Place — 1996 2019 10 - 40 Years

1 El Forastero — 1992 2019 10 - 40 Years

1 Bru Burger Bar — 1996 2019 10 - 40 Years

1 Chicken Salad Chick — 1976 2019 10 - 40 Years

1 Long John Silver's — 1987 2019 10 - 40 Years

1 Buffalo Wild Wings — 2014 2019 10 - 40 Years

1 KFC — 2002 2019 10 - 40 Years

1 Slim Chickens — 2014 2019 10 - 40 Years

1 Black Angus Steakhouse — 1996 2019 10 - 40 Years

1 Dunkin Donuts — 1977 2019 10 - 40 Years

1 Kerry's Car Care — 2015 2019 10 - 40 Years

1 Orscheln Farm and Home — 1997 2019 10 - 40 Years

1 Sharks Fish & Chicken — 1985 2019 10 - 40 Years

1 ERA Capital — 1999 2019 10 - 40 Years

1 O'Reilly Auto Parts — 2006 2019 10 - 40 Years

1 Old Mexico Cantina — 2007 2019 10 - 40 Years

2 Dollar General — 2012 through 2015 2019 10 - 40 Years

1 Wings, Etc — 2014 2019 10 - 40 Years

1 Touchstone Imaging — 1992 2019 10 - 40 Years

1 Primanti Bros.

— 2014 2019 10 - 40 Years

4 unchanged sentences

Latest Income

1 Schumacher Homes

— 2014 2019 10 - 40 Years

1 Sharks Fish & Chicken

— 2014 2019 10 - 40 Years

1 Slim Chickens

— 2013 2019 10 - 40 Years

1 Southwest Stainless, LP

— 1977 through1994 2019 10 - 40 Years

1 Spoons Place

— 1998 2019 10 - 40 Years

1 SRS Distribution

— 1975 2019 10 - 40 Years

— 1991 through 2003 2019 10 - 40 Years

1 The Atlanta Center for Foot & Ankle Surgery

— 1963 2019 10 - 40 Years

1 Touchstone Imaging

— 1992 2019 10 - 40 Years

1 Tractor Supply

— 2007 2019 10 - 40 Years

1 What the Buck

— 1958 2019 10 - 40 Years

— 2014 2019 10 - 40 Years

1 Howlin Concrete — 1930 2019 10 - 40 Years

1 Little Caesars — 1996 2019 10 - 40 Years

1 Bigham Cable — 1989 2019 10 - 40 Years

1 Consolidated Pipe — 1987 2019 10 - 40 Years

1 The Atlanta Center for Foot & Ankle Surgery — 1963 2019 10 - 40 Years

2 Affordable Care, Inc.

— 2008 through 2010 2019 10 - 40 Years

1 NAPA Auto Parts — 2001 2019 10 - 40 Years

1 Bechheit — 1986 2019 10 - 40 Years

1 Kings Wings N Things — 1977 2019 10 - 40 Years

1 Robata — 1980 2019 10 - 40 Years

1 Off the Hook Seafood & More — 2007 2019 10 - 40 Years

1 Family Dollar Stores — 1988 2019 10 - 40 Years

1 Mind 24-7 — 2008 2019 10 - 40 Years

1 Scooters Coffee — 1972 2019 10 - 40 Years

1 Del Taco — 1992 2019 10 - 40 Years

(1) Excludes accumulated depreciation of $ 220 related to personal property classified in our consolidated balance sheets as furniture, fixtures and equipment.

20 unchanged sentences

Service Properties Trust

President and Chief Executive Officer

President and Chief Investment Officer

February 28, 2023

1 unchanged sentence

Signature Title Date

Murray Managing Trustee, President and

Chief Executive Officer

February 24, 2022

Hargreaves President and Chief Investment Officer February 28, 2023

Donley Chief Financial Officer and Treasurer

9 unchanged sentences

Lamkin Independent Trustee February 28, 2023

Murray Managing Trustee February 28, 2023

Portnoy Managing Trustee February 28, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures