Service Properties Trust 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our 2024 Annual Report. Overview (dollars in thousands, except per share amounts and per room hotel data) We are a REIT organized under the laws of the State of Maryland. As of March 31, 2025, we owned 941 properties in 46 states, the District of Columbia, Canada and Puerto Rico. Consumer confidence, corporate travel and lodging demand will continue to be affected by economic and market conditions, inflationary pressures, uncertainties surrounding interest rates, unemployment levels, work from home policies, use of technologies and broader economic trends. Increased labor costs and other price inflation may continue to negatively impact our hotel operations and the operations of our tenants. Further, recent announcements regarding tariffs on a wide variety of imports could impact the cost of products our operators use, such as furniture, equipment, materials and supplies sourced from outside the United States. An economic recession or continued or intensified disruptions in the financial markets could adversely affect our financial condition, operations at our hotels, our tenants and their ability or willingness to renew our leases or pay rent to us, may restrict our ability to obtain new or replacement financing, would likely increase our cost of capital, and may cause the values of our properties to decline. We are at various stages of selling 119 hotels with a total of 15,912 keys and a combined net carrying value of $945,100. We expect to sell these hotels in 2025 and use the net proceeds to repay debt. Management Agreements and Leases . At March 31, 2025, we owned 202 hotels operated under four agreements. We leased all of these hotels to our wholly owned TRSs that are managed by hotel operating companies as of that date. At March 31, 2025, we also owned 739 service-focused retail properties leased to 175 tenants subject to “triple net” leases, where the tenants are generally responsible for the payment of operating expenses and capital expenditures. Our condensed consolidated statements of comprehensive income (loss) include hotel operating revenues and hotel operating expenses of our managed hotels and rental income and net lease operating expenses from our net lease properties. Hotel Portfolio. As of March 31, 2025, we owned 202 hotels. During the three months ended March 31, 2025, the U.S. hotel industry generally realized increases in average daily rate, or ADR, and revenue per available room, or RevPAR, compared to the corresponding 2024 periods. Our hotels produced increases in ADR and outpaced the industry increases in RevPAR, which we believe is partially a result of renovation disruption in the 2024 period. Comparable Hotels Data. We present occupancy, ADR and RevPAR for the periods presented on a comparable basis to facilitate comparisons between periods. We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared. For each of the three months ended March 31, 2025 and 2024, our comparable results exclude one hotel that suspended operations during the periods presented. The following table provides a summary of these revenue metrics for the periods presented. Three Months Ended March 31, 2025 2024 Change Comparable Hotels No. of hotels 201 201 — No. of rooms or suites 35,261 35,261 — Occupancy 57.9 % 57.1 % 0.8 pts ADR $ 144.61 $ 142.74 1.3 % RevPAR $ 83.67 $ 81.52 2.6 % 22 Table of Contents The following table provides a summary for all of our hotels with these revenue metrics for the periods presented, which we believe are key indicators of performance at our hotels. Three Months Ended March 31, 2025 2024 Change All Hotels No. of hotels 202 220 (18) No. of rooms or suites 35,359 37,697 (2,338) Occupancy 57.8 % 56.3 % 1.5 pts ADR $ 144.61 $ 139.83 3.4 % RevPAR $ 83.52 $ 78.69 6.1 % Net Lease Portfolio . As of March 31, 2025, we owned 739 service-focused retail net lease properties with an aggregate of 13,189,476 square feet leased to 175 tenants subject to “triple net” leases (where the tenants are responsible for payments of operating expenses and capital expenditures) requiring annual minimum rents of $380,568. Our net lease properties were 97.8% occupied as of March 31, 2025 with a weighted (by annual minimum rent) average lease term of 7.8 years, operating under 136 brands in 21 distinct industries. TA is our largest tenant and as of March 31, 2025, leased 175 of our travel centers under five master leases that expire in 2033 and require annual minimum rents of $259,080. In addition, TA receives an annual credit of $25,000 as a result of prepaid rent. BP Corporation North America Inc. guarantees payment under the TA leases, subject to a cap. Additional details of our hotel operating agreements and our net lease agreements are set forth in Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. 23 Table of Contents Results of Operations (amounts in thousands, except per share data) Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024 Three Months Ended March 31, 2025 2024 $ Change % Change Revenues: Hotel operating revenues $ 334,963 $ 336,236 $ (1,273) (0.4) % Rental income 100,216 100,014 202 0.2 % Total revenues 435,179 436,250 (1,071) (0.2) % Expenses: Hotel operating expenses 305,840 305,086 754 0.2 % Net lease operating expenses 5,628 4,723 905 19.2 % Depreciation and amortization - hotels 53,743 55,086 (1,343) (2.4) % Depreciation and amortization - net lease properties 35,357 38,021 (2,664) (7.0) % Total depreciation and amortization 89,100 93,107 (4,007) (4.3) % General and administrative 9,556 10,506 (950) (9.0) % Transaction related costs 111 — 111 n/m Loss on asset impairment 37,067 2,451 34,616 n/m Total expenses 447,302 415,873 31,429 7.6 % Gain (loss) on sale of real estate, net 746 (2,963) 3,709 (125.2) % Interest income 1,249 1,962 (713) (36.3) % Interest expense (101,517) (91,414) (10,103) 11.1 % Loss before income tax expense and equity in losses of an investee (111,645) (72,038) (39,607) 55.0 % Income tax expense (843) (1,007) 164 (16.3) % Equity in losses of an investee (3,947) (5,338) 1,391 (26.1) % Net loss $ (116,435) $ (78,383) $ (38,052) 48.5 % Weighted average common shares outstanding (basic and diluted) 165,615 165,158 457 0.3 % Net loss per common share (basic and diluted) $ (0.70) $ (0.48) $ (0.22) 45.8 % References to changes in the income and expense categories below relate to the comparison of consolidated results for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Hotel operating revenues. The decrease in hotel operating revenues is primarily a result of our sales of certain hotels since January 1, 2024 ($7,798), partially offset by increases in occupancy and average rates at certain hotels during the 2025 period ($6,525). Additional operating statistics of our hotels are included in the tables beginning on page 32. Rental income. The increase in rental income is primarily a result of higher rental income recognized at certain of our net lease properties ($710), partially offset by our sales of certain net lease properties since January 1, 2024 ($508). Hotel operating expenses. The increase in hotel operating expenses is primarily a result of increases in wages and benefits ($6,967) and other operating expenses ($2,697) in the 2025 period, partially offset by our sales of certain hotels since January 1, 2024 ($8,910). Net lease operating expenses. The increase in net lease operating expenses is primarily the result of increased property management fees ($594) and other operating expenses ($311) in the 2025 period. 24 Table of Contents Depreciation and amortization - hotels. The decrease in depreciation and amortization - hotels is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($5,769) and our sale of certain hotels since January 1, 2024 ($2,498), partially offset by depreciation and amortization related to capital expenditures made since January 1, 2024 ($6,924). Depreciation and amortization - net lease properties. The decrease in depreciation and amortization - net lease properties is primarily a result of certain of our depreciable assets becoming fully depreciated since January 1, 2024 ($2,129) and our sale of certain net lease properties since January 1, 2024 ($535). General and administrative. The decrease in general and administrative costs is primarily due to decreases in business management fees ($827) and other professional fees ($123) in the 2025 period. Transaction related costs . Transaction related costs for the 2025 period primarily consisted of costs related to the renovation of certain hotels, partially offset by the recovery of a working capital reserve related to our former agreement with Marriott International, Inc. previously deemed uncollectable and expensed in 2021. Loss on asset impairment. We recorded a $37,067 loss on asset impairment during the 2025 period to reduce the carrying value of 16 hotels to their estimated fair value less costs to sell. We recorded a $2,451 loss on asset impairment during the 2024 period to reduce the carrying value of five net lease properties to their estimated fair value less costs to sell. Gain (loss) on sale of real estate, net. We recorded a $746 net gain on sale of real estate during the 2025 period in connection with the sales of four hotels and three net lease properties. We recorded a $2,963 net loss on sale of real estate during the 2024 period in connection with the sales of one hotel and three net lease properties. Interest income. The decrease in interest income is due to lower average cash balances invested and lower interest rates during the 2025 period compared to the 2024 period. Interest expense. The increase in interest expense is primarily due to higher weighted average interest rates during the 2025 period compared to the 2024 period. Income tax expense. The decrease in income tax expense is primarily due to a decrease in state tax expense ($268), partially offset by an increase in foreign tax expense ($104) during the 2025 period. Equity in losses of an investee. Equity in losses of an investee represents our proportionate share of the losses of Sonesta. Net loss. Our net loss and net loss per common share (basic and diluted) each increased in the 2025 period compared to the 2024 period primarily due to the revenue and expense changes discussed above. 25 Table of Contents Liquidity and Capital Resources (dollars in thousands, except per share amounts) Our Managers and Tenants As of March 31, 2025, all 202 of our hotels were managed by four hotel operating companies. Our 739 service-focused retail net lease properties were leased to 175 tenants. The costs of operating and maintaining our properties are generally paid by the hotel managers as agents for us or by our tenants for their own account. Our hotel managers and tenants derive their funding for property operating expenses and for returns and rents due to us generally from property operating revenues and, to the extent these parties themselves fund our owner’s priority returns and rents, from their separate resources. As of March 31, 2025, Sonesta is our largest hotel manager (177 hotels) and TA is our largest tenant (175 travel centers). We recorded reserves for uncollectable amounts and reduced rental income by $235 and $665 for the three months ended March 31, 2025 and 2024, respectively, based on our assessment of the collectability of rents. We had reserves for uncollectable rents of $4,959 and $5,058 as of March 31, 2025 and December 31, 2024, respectively, included in other assets, net in our condensed consolidated balance sheets. We define net lease rent coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. Tenants with no minimum rent required under the lease are excluded. EBITDAR amounts used to determine rent coverage are generally for the latest twelve-month period, based on the most recent operating information, if any, furnished by our tenants. Operating statements furnished by our tenants often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by us. In instances where we do not have tenant financial information, we calculate an implied coverage ratio for the period based on other tenants with available financial statements operating the same brand or within the same industry. As a result, we believe using this implied coverage metric provides a more reasonable estimated representation of recent operating results and the financial condition for those tenants. Our net lease properties generated rent coverage of 2.07x and 2.37x as of March 31, 2025 and 2024, respectively. Our Operating Liquidity and Capital Resources Our principal sources of funds to meet operating and capital expenses, debt service obligations and distributions to our shareholders are owner’s priority returns from our hotels, rents from our net lease portfolio and borrowings under our revolving credit facility and VFN. We receive owner’s priority returns and rents from our managers and tenants monthly. We may receive additional returns, percentage rents and our share of the operating profits of our managed hotels after payment of management fees and other deductions, if any, either monthly or quarterly, and these amounts are usually subject to annual reconciliations. We believe these sources of funds will be sufficient to meet our operating expenses and capital expenditures, pay debt service obligations and make distributions to our shareholders for the next twelve months and for the foreseeable future thereafter. However, as a result of economic conditions, including if the U.S. enters an economic recession, or otherwise, our managers and tenants may become unable or unwilling to pay owner’s priority returns and rents to us when due, and, as a result, our cash flows and net income would decline. The following is a summary of our sources and uses of cash flows for the periods presented: Three Months Ended March 31, 2025 2024 Cash and cash equivalents and restricted cash at the beginning of the period $ 157,386 $ 197,830 Net cash provided by (used in): Operating activities 38,200 (926) Investing activities (42,192) (74,829) Financing activities (59,300) (34,749) Cash and cash equivalents and restricted cash at the end of the period $ 94,094 $ 87,326 The change from cash flow used in operating activities in the 2024 period to cash flow provided by operating activities in the 2025 period is primarily due to lower cash paid for interest in the 2025 period. The decrease in cash flow used in investing activities in the 2025 period is primarily due to higher proceeds from the sale of real estate in the 2025 period and decreased real estate improvements during the 2025 period. The increase in cash flow used in financing activities in the 2025 period is primarily due to higher net borrowings in the 2025 period, partially offset by lower distributions to common shareholders during the 2025 period. 26 Table of Contents We maintain our qualification for taxation as a REIT under the IRC by meeting certain requirements. We lease 202 hotels to our wholly owned TRSs that are managed by hotel operating companies. As a REIT, we do not expect to pay federal income taxes on the majority of our income; however, the income realized by our TRSs in excess of the rent they pay to us is subject to U.S. federal income tax at corporate income tax rates. In addition, the income we receive from our hotels in Canada and Puerto Rico is subject to taxes in those jurisdictions and we are subject to taxes in certain states where we have properties despite our qualification for taxation as a REIT. Our Investment and Financing Liquidity and Capital Resources Our hotel operating agreements generally provide that, if necessary, we may provide our managers with funding for capital improvements to our hotels in excess of amounts otherwise available in escrowed FF&E reserves or when no FF&E reserves are available. During the three months ended March 31, 2025, we funded $44,053 for capital improvements in excess of FF&E reserves available to our hotels. We currently expect to fund $210,000 during the last nine months of 2025 for capital improvements to certain hotels using cash on hand and borrowings under our revolving credit facility. Various percentages of total sales at some of our hotels are escrowed as FF&E reserves to fund future capital improvements. We own all the FF&E escrows for our hotels. During the three months ended March 31, 2025, certain of our hotel managers deposited $971 to these accounts and spent $1,124 from the FF&E reserve escrow accounts to renovate and refurbish our hotels. As of March 31, 2025, there was $5,289 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash. Our net lease portfolio leases do not require FF&E escrow deposits and tenants under these leases are generally required to maintain the leased properties, including structural and non-structural components. We may provide tenant improvement allowances to tenants in certain cases or may develop sites with the intent to lease them. During the three months ended March 31, 2025, we funded $748 for capital improvements to our net lease properties. As of March 31, 2025, we had $1,382 of unspent leasing-related obligations related to certain of our net lease tenants. During the three months ended March 31, 2025, we sold seven properties for a combined sales price of $22,700, excluding closing costs. From April 1, 2025 through May 2, 2025, we sold one net lease property with 2,053 square feet for a sales price of $365, excluding closing costs. We have also entered into agreements to sell four hotels with a total of 492 keys for a combined sales price of $26,500, excluding closing costs, and one net lease property with 1,122 square feet for a sales price of $395, excluding closing costs. These pending sales are subject to conditions; accordingly, we cannot be sure that we will complete these sales, that these sales will not be delayed or that the terms will not change. We are at various stages of selling 115 hotels with a total of 15,420 keys and six net lease properties with a total of 80,249 square feet for sale. We believe it is probable that the sales of these properties will be completed within one year. We expect to use the net sales proceeds from these sales for general business purposes, including to repay debt. From April 1, 2025 through May 2, 2025, we acquired three net lease properties with a total of 18,218 square feet for a combined purchase price of $12,597, excluding closing costs. We have also entered into agreements to acquire six net lease properties with a total of 69,236 square feet for a combined purchase price of $20,734, excluding closing costs. These pending acquisitions are subject to conditions; accordingly, we cannot be sure that we will complete these acquisitions, that these acquisitions will not be delayed or that the terms will not change. During the three months ended March 31, 2025, we declared and paid a regular quarterly distribution to common shareholders using cash on hand as follows: Declaration Date Record Date Paid Date Dividend Per Common Share Total Distributions January 16, 2025 January 27, 2025 February 20, 2025 $ 0.01 $ 1,666 On April 10, 2025, we declared a regular quarterly distribution to common shareholders of record as of April 22, 2025 of $0.01 per common share, or approximately $1,666. We expect to pay this distribution on or about May 15, 2025 using cash on hand. 27 Table of Contents In order to meet cash needs that may result from our desire or need to make distributions or pay operating or capital expenses, we maintain a $650,000 secured revolving credit facility which is governed by a credit agreement. This revolving credit facility is available for general business purposes, including acquisitions. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity and no principal repayments are due until maturity. Availability of borrowings under our credit agreement is subject to ongoing minimum performance and market values of the collateral properties, satisfying certain financial covenants and other credit facility conditions. The maturity date of our revolving credit facility is June 29, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date of the facility by two additional six-month periods. Interest payable on drawings under our revolving credit facility is based on SOFR plus a margin ranging from 1.50% to 3.00% based on our leverage ratio, as defined in our credit agreement, which was 2.50% as of March 31, 2025. We also pay unused commitment fees of 20 to 30 basis points per annum on the total amount of lending commitments under our revolving credit facility based on amounts outstanding. As of March 31, 2025 and 2024, the annual interest rate payable on borrowings under our revolving credit facility was 6.91% and 7.84%, respectively. As of both March 31, 2025 and May 2, 2025, we had $50,000 outstanding under our revolving credit facility and $600,000 available for borrowings. As collateral for all loans and other obligations under the credit facility, certain of our subsidiaries pledged all of their respective equity interests in certain of our direct and indirect property owning subsidiaries, and our pledged subsidiaries provided first mortgage liens on 67 properties, including 64 hotels and three net lease properties, with an aggregate undepreciated book value of $1,691,230 as of March 31, 2025. During the three months ended March 31, 2025, we sold two hotels that previously served as collateral under our revolving credit facility. In connection with the sales of these hotels, the hotels were released from the collateral pool in accordance with the terms of our revolving credit facility. In February 2025, we and our lenders amended the agreement governing our revolving credit facility to reduce the required debt service coverage ratio covenant from 1.50 times to 1.30 times effective with respect to the fourth quarter of 2024 and continuing through the end of the loan term. In order to exercise the first extension option, we are required to maintain a 1.50 times debt service coverage level as of and for the duration of the extension period. We also agreed to change the required collateral property debt yield to 10% effective with respect to the first quarter of 2025 and continuing through the end of the loan term and to swap collateral properties as follows: 47 hotels with an aggregate of 7,981 keys and an aggregate undepreciated book value of $1,375,449 will be released from the collateral pool and 35 travel centers leased to TA, which travel centers we refer to as our TA No. 5 lease, with an aggregate undepreciated book value of $598,908, will be added as collateral to our revolving credit facility. Of the hotels being released from the collateral pool, 36 hotels with an aggregate of 4,862 keys and an aggregate undepreciated book value of $655,514 are part of our hotel disposition plan. The corresponding equity pledges will be swapped as well. We expect to complete this collateral swap by the end of the second quarter of 2025. Net Lease Mortgage Notes On January 27, 2025, the Issuer issued a variable funding note secured by the 315 net lease properties that secure our existing $606,122 of net lease mortgage notes. The VFN permits borrowings on a revolving basis up to $45,000 and the Issuer can borrow, repay and reborrow funds available until maturity. The maturity date of the VFN is January 27, 2027, and, subject to the payment of an extension fee and meeting certain other conditions, can be extended by one year at the Issuer’s option. The VFN requires interest payments only on drawings under the VFN based on SOFR plus a margin of 1.75%, and an unused commitment fee of 50 basis points per annum paid on undrawn amounts. As of March 31, 2025, the annual interest rate payable on borrowings under the VFN was 6.16%. As of March 31, 2025, $45,000 was outstanding under the VFN. Our debt maturities (other than our revolving credit facility and VFN) as of March 31, 2025 were as follows: Year Debt Maturities 2025 $ 1,469 2026 801,958 2027 851,958 2028 1,000,737 2029 1,125,000 Thereafter 1,900,000 $ 5,681,122 None of our senior note debt obligations require principal or sinking fund payments prior to their maturity dates. Our mortgage notes require monthly principal payments as described in Part I, Item 3 of this Quarterly Report on Form 10-Q. 28 Table of Contents We currently expect to use cash on hand, the cash flows from our operations, borrowings under our revolving credit facility or VFN, net proceeds from any asset sales and net proceeds of offerings of equity or the incurrence of debt to fund our operations, capital expenditures, investments, future debt maturities, distributions to our shareholders and other general business purposes. When significant amounts are outstanding for an extended period of time under our revolving credit facility, or the maturities of our indebtedness approach, we currently expect to explore refinancing alternatives. Such alternatives may include incurring additional debt, issuing new equity securities and the sale of properties. We have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities. We may also seek to participate in joint ventures or other arrangements that may provide us additional sources of financing. We may also assume mortgage debt on properties we may acquire or obtain mortgage financing on our existing properties. While we believe we will generally have access to various types of financings, including debt or equity, to fund our future acquisitions and to pay our debts and other obligations, we cannot be sure that we will be able to complete any debt or equity offerings or other types of financings or that our cost of any future public or private financings will not increase. Our ability to complete, and the costs associated with, future debt transactions depend primarily upon credit market conditions and our then perceived creditworthiness. We have no control over market conditions. Our credit ratings depend upon evaluations by credit rating agencies of our business practices and plans, including our ability to maintain our earnings, to stagger our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. Similarly, our ability to raise equity capital in the future will depend primarily upon equity capital market conditions and our ability to conduct our business to maintain and grow our operating cash flows. We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities. However, as discussed elsewhere in this Quarterly Report on Form 10-Q, the impacts of the current, and possibly future, inflationary conditions, uncertainties surrounding interest rates and a possible economic recession are uncertain and may have various negative consequences on us and our operations, including a decline in financing availability and increased costs for financing. Further, such conditions could also disrupt the capital markets generally and limit our access to financing from public sources or on favorable terms, particularly if the global financial markets experience significant disruptions. Debt Covenants Our debt obligations at March 31, 2025 consisted of $50,000 of borrowings outstanding under our $650,000 revolving credit facility, $5,075,000 aggregate principal amounts of senior notes, $606,122 aggregate principal amounts of mortgage notes and $45,000 of borrowings outstanding under the VFN. For further information regarding our indebtedness, see Note 8 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Our publicly and privately issued senior notes are governed by our indentures and related supplements. These indentures and related supplements and our credit agreement contain covenants that generally restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, and require us to maintain various financial ratios. Our credit agreement, net lease mortgage notes, secured senior notes and 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 ceasing to act as our business manager. As of March 31, 2025, we believe we were in compliance with all of the covenants under our indentures and their supplements, net lease mortgage notes and our credit agreement. Senior Notes Indenture Covenants The following table summarizes the results of the financial tests required by the indentures and related supplements for our senior secured and unsecured notes as of March 31, 2025: Actual Results Covenant Requirement Total debt / adjusted total assets 55.2% Maximum of 60% Secured debt / adjusted total assets 16.3% Maximum of 40% Consolidated income available for debt service / debt service 1.50x Minimum of 1.50x Total unencumbered assets / unsecured debt 171.7% Minimum 150% Total unencumbered assets in guarantor subsidiaries / senior guaranteed unsecured debt 4.06x Minimum of 2.20x 29 Table of Contents As of March 31, 2025, adjusted total assets for covenant purposes as defined in our senior notes indentures were $10,462,373 and assets encumbered under our revolving credit facility, serving as collateral for our net lease mortgage notes or secured senior notes represented $3,466,968 of adjusted total assets, as defined in our senior notes indentures. Our unencumbered hotels, travel centers, other net lease properties and other corporate assets represent $4,389,459, $1,579,070, $819,950 and $206,926 of adjusted total assets, respectively. The following table presents the calculation of adjusted total assets to total assets in accordance with GAAP: Total assets $ 6,976,079 Plus: accumulated depreciation (1) 3,267,989 Plus: impairment and other adjustments to reflect original cost of real estate assets 446,569 Less: accounts receivable and intangibles (228,264) Adjusted total assets $ 10,462,373 (1) Includes $875,222 of accumulated depreciation on assets of properties held for sale. Our ability to incur additional debt is subject to meeting the required covenant levels and subject to the provisions of our credit agreement and senior notes indentures. Acceleration and Cross-Default Our indentures and their supplements contain cross default provisions to any other debt of $50,000 or more. Similarly, our credit agreement has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $75,000 or more. Neither our indentures and their supplements nor our credit agreement contain provisions for acceleration which could be triggered by a change in our debt ratings. Supplemental Guarantor Information Our 5.50% Senior Notes due 2027, or the 2027 Notes, our 8.375% Senior Guaranteed Unsecured Notes due 2029, or the 2029 Notes, and our 8.875% Senior Guaranteed Unsecured Notes due 2032, or the 2032 Notes, are fully and unconditionally guaranteed, on a joint and several basis and on a senior unsecured basis, by all of our subsidiaries, except for certain excluded subsidiaries, including our foreign subsidiaries and our subsidiaries pledged under our credit agreement and our net lease mortgage notes. The notes and the guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities and any preferred equity of any of our subsidiaries that do not guarantee the notes. Our remaining $2,425,000 of senior unsecured notes do not have the benefit of any guarantees. A subsidiary guarantor’s guarantee of the 2027 Notes, the 2029 Notes and the 2032 Notes and all other obligations of such subsidiary guarantor under the indentures governing the notes will automatically terminate and such subsidiary guarantor will automatically be released from all of its obligations under such subsidiary guarantee and such 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 Investor Services, or Moody’s, and BBB (or the equivalent) by Standard & Poor’s Ratings Services, 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. Our non-guarantor subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due on these notes or the guarantees, or to make any funds available therefor, whether by dividend, distribution, loan or other payments. The rights of holders of these notes to benefit from any of the assets of our non-guarantor subsidiaries are subject to the prior satisfaction of claims of those subsidiaries’ creditors and any preferred equity holders. As a result, these notes and the related guarantees will be effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness, respectively, to the extent of the value of the collateral securing such secured indebtedness, and will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries that do not guarantee these notes, including guarantees of or pledges under other indebtedness of ours, payment obligations under lease agreements, trade payables and preferred equity. The following table presents summarized financial information for us and the subsidiary guarantors, on a combined basis, after elimination of (i) intercompany transactions and balances among us and the subsidiary guarantors, and (ii) equity in earnings from, and any investments in, any of our non-guarantor subsidiaries: 30 Table of Contents As of March 31, 2025 As of December 31, 2024 Real estate properties, net (1) $ 4,117,264 $ 4,167,260 Other assets, net 459,057 507,507 Indebtedness, net $ 5,046,642 $ 5,142,420 Intercompany balances (2) 752,428 751,637 Other liabilities 397,770 358,778 Three Months Ended March 31, 2025 Revenues $ 369,833 Expenses 451,361 Net loss $ (81,528) (1) Real estate properties, net as of March 31, 2025 includes $138,986 of properties owned directly by us and not included in the assets of the subsidiary guarantors. (2) Intercompany balances represent payables to non-guarantor subsidiaries. Related Person Transactions We have relationships and historical and continuing transactions with RMR, RMR Inc. and Sonesta and others related to them. For further information about these and other such relationships and related person transactions, see Notes 6, 10 and 11 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2024 Annual Report, our definitive Proxy Statement for our 2025 Annual Meeting of Shareholders and our other filings with the Securities and Exchange Commission, or SEC. In addition, see the section captioned “Risk Factors” in our 2024 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services. Critical Accounting Estimates The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include consolidation of VIEs, purchase price allocations, the determination of useful lives of fixed assets, classification of leases, and the assessment of the book values and impairment of real estate intangible assets and equity investments. A discussion of our critical accounting estimates is included in our 2024 Annual Report. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2024. 31 Table of Contents Property and Operating Statistics (dollars in thousands, except hotel statistics) As of March 31, 2025, we owned and managed a diverse portfolio of hotels and net lease properties across the United States and in Puerto Rico and Canada with 145 distinct brands across 22 industries. Hotel Portfolio The following tables summarize the operating statistics, including occupancy, ADR and RevPAR reported to us by our hotel managers by hotel brand for the periods indicated. All operating data presented are based upon the operating results provided by our hotel managers for the indicated periods. We have not independently verified our managers’ operating data. Comparable Hotels* No. of Rooms or Suites Occupancy ADR RevPAR Service Level No. of Hotels Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change Sonesta Hotels & Resorts® Full Service 22 7,207 54.3 % 56.3 % (2.0) pts $ 167.99 $ 164.22 2.3 % $ 91.20 $ 92.38 (1.3) % Royal Sonesta Hotels® Full Service 17 5,663 51.2 % 50.7 % 0.5 pts 246.16 236.71 4.0 % 125.96 120.10 4.9 % Radisson® Hotels & Resorts Full Service 5 1,149 59.5 % 60.5 % (1.0) pts 154.09 151.08 2.0 % 91.62 91.40 0.2 % Crowne Plaza® Full Service 1 495 73.4 % 64.6 % 8.8 pts 149.84 148.98 0.6 % 109.98 96.17 14.4 % Country Inn & Suites® by Radisson Full Service 2 346 55.6 % 60.3 % (4.7) pts 131.03 134.86 (2.8) % 72.84 81.29 (10.4) % Full Service Total/Average 47 14,860 54.2 % 54.9 % (0.7) pts 193.24 187.29 3.2 % 104.67 102.74 1.9 % Sonesta Select® Select Service 39 5,711 54.1 % 52.2 % 1.9 pts 115.00 116.73 (1.5) % 62.25 60.99 2.1 % Hyatt Place® Select Service 17 2,107 62.6 % 47.5 % 15.1 pts 123.07 119.88 2.7 % 77.05 56.91 35.4 % Select Service Total/Average 56 7,818 56.4 % 51.0 % 5.4 pts 117.41 117.52 (0.1) % 66.24 59.89 10.6 % Sonesta ES Suites® Extended Stay 52 6,689 65.0 % 65.4 % (0.4) pts 127.82 126.64 0.9 % 83.02 82.84 0.2 % Sonesta Simply Suites® Extended Stay 46 5,894 61.0 % 61.5 % (0.5) pts 89.45 89.80 (0.4) % 54.61 55.25 (1.2) % Extended Stay Total/Average 98 12,583 63.1 % 63.6 % (0.5) pts 110.44 109.94 0.5 % 69.71 69.92 (0.3) % Comparable Hotels Total/Average 201 35,261 57.9 % 57.1 % 0.8 pts $ 144.61 $ 142.74 1.3 % $ 83.67 $ 81.52 2.6 % * We define comparable hotels as those that were owned by us and were open and operating for the entirety of the periods being compared. For each of the three months ended March 31, 2025 and 2024, our comparable results exclude one hotel that suspended operations during the periods presented. 32 Table of Contents All Hotels* No. of Rooms or Suites Occupancy ADR RevPAR Service Level No. of Hotels Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, Brand 2025 2024 Change 2025 2024 Change 2025 2024 Change Retained Hotels: Royal Sonesta Hotels® Full Service 17 5,663 51.2 % 50.7 % 0.5 pts $246.16 $236.71 4.0 % $ 125.96 $ 120.10 4.9 % Sonesta Hotels & Resorts® Full Service 22 7,207 54.3 % 56.3 % (2.0) pts 167.99 164.22 2.3 % 91.20 92.38 (1.3) % Radisson® Hotels & Resorts Full Service 5 1,149 59.5 % 60.5 % (1.0) pts 154.09 151.08 2.0 % 91.62 91.40 0.2 % Country Inn & Suites® by Radisson Full Service 2 346 55.6 % 60.3 % (4.7) pts 131.03 134.86 (2.8) % 72.84 81.29 (10.4) % Full Service Total/Average 46 14,365 53.5 % 54.5 % (1.0) pts 195.29 188.86 3.4 % 104.49 102.96 1.5 % Sonesta ES Suites® Extended Stay 7 958 68.2 % 68.4 % (0.2) pts 152.94 154.67 (1.1) % 104.27 105.87 (1.5) % Sonesta Select® Select Service 6 873 61.6 % 57.3 % 4.3 pts 120.77 122.53 (1.4) % 74.46 70.20 6.1 % Sonesta Simply Suites® Extended Stay 7 1,144 67.7 % 63.1 % 4.6 pts 115.05 115.39 (0.3) % 77.91 72.81 7.0 % Hyatt Place® Select Service 17 2,107 62.6 % 47.5 % 15.1 pts 123.07 119.88 2.7 % 77.05 56.91 35.4 % Focused Service Total/Average 37 5,082 64.6 % 56.6 % 8.0 pts 126.74 127.14 (0.3) % 81.93 72.00 13.8 % Retained Hotels Total/Average 83 19,447 56.4 % 55.1 % 1.3 pts $174.76 $172.27 1.4 % $ 98.59 $ 94.87 3.9 % Exit Hotels: Crowne Plaza® Full Service 1 495 73.4 % 64.6 % 8.8 pts $149.84 $148.98 0.6 % $ 109.98 $ 96.17 14.4 % Sonesta ES Suites® Extended Stay 45 5,731 64.4 % 64.9 % (0.5) pts 123.37 121.70 1.4 % 79.47 78.99 0.6 % Sonesta Select® Select Service 33 4,838 52.8 % 51.3 % 1.5 pts 113.78 115.56 (1.5) % 60.04 59.32 1.2 % Sonesta Simply Suites® Extended Stay 40 4,848 58.7 % 60.4 % (1.7) pts 82.43 83.44 (1.2) % 48.36 50.36 (4.0) % Exit Hotels Total/Average 119 15,912 59.4 % 59.4 % — pts 109.54 109.22 0.3 % 65.07 64.86 0.3 % All Hotels Total/Average 202 35,359 57.8 % 57.0 % 0.8 pts $144.61 $142.74 1.3 % $ 83.52 $ 81.38 2.6 % * Includes results of all hotels owned as of March 31, 2025. Excludes the results of hotels sold during the periods presented. Retained Hotels represents 59 hotels managed by Sonesta, 17 hotels managed by Hyatt, and seven hotels managed by Radisson that we will continue to own after the Exit Hotels are sold. Exit Hotels represent 118 hotels managed by Sonesta and one hotel managed by IHG that we plan to sell. Net Lease Portfolio As of March 31, 2025, our net lease properties were 97.8% occupied and we had 16 properties available for lease. During the three months ended March 31, 2025, we entered into lease renewals for 31,607 rentable square feet (four properties) at weighted (by rentable square feet) average rents that were 18.0% above the prior rents for the same space. The weighted (by rentable square feet) average lease term for these leases was 6.0 years. We also entered into new leases for 1,685 rentable square feet (one property) at rent that was 15.7% above the prior rent for the same space. The lease term for this new lease was 3.0 years. Generally, lease agreements with our net lease tenants require payment of minimum rent to us. Certain of these minimum rent payment amounts are secured by full or limited guarantees. Annualized minimum rent represents cash amounts and excludes adjustments, if any, necessary to record scheduled rent changes on a straight line basis or any expense reimbursement. Annualized minimum rent excludes the impact of rents prepaid by TA. 33 Table of Contents As of March 31, 2025, our net lease tenants operated across 136 brands. The following table identifies the top ten brands based on annualized minimum rent: Brand No. of Properties Investment (1) Percent of Total Investment Annualized Minimum Rent Percent of Total Annualized Minimum Rent Rent Coverage (2) 1. TravelCenters of America Inc. 131 $ 2,254,950 44.8 % $ 176,793 46.5 % 1.34 x (3) 2. Petro Stopping Centers 44 1,015,156 20.2 % 82,287 21.6 % 1.34 x (3) 3. The Great Escape 14 98,242 2.0 % 7,711 2.0 % 4.75 x 4. Life Time Fitness 3 92,617 1.8 % 5,770 1.5 % 2.84 x 5. Buehler's Fresh Foods 5 76,469 1.5 % 5,657 1.5 % 2.54 x 6. Heartland Dental 59 61,120 1.2 % 4,769 1.3 % 4.81 x 7. Norms 10 53,673 1.1 % 3,826 1.0 % 3.36 x 8. Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.88 x 9. AMC Theatres 5 57,361 1.1 % 3,558 0.9 % 1.85 x 10. Pizza Hut 40 45,285 0.9 % 3,463 0.9 % 2.38 x Other (4) 405 1,227,284 24.4 % 83,017 21.8 % 3.62 x Total 739 $ 5,031,881 100.0 % $ 380,568 100.0 % 2.07 x (1) Represents the historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any. (2) See page 26 for our definition of rent coverage. (3) Rent coverage information provided by tenant is for all 175 sites on a consolidated basis and is as of March 31, 2025. (4) Consists of 126 distinct brands with an average investment of $3,030 per property and average annual minimum rent of $205 per property. As of March 31, 2025, our top ten net lease tenants based on our annualized minimum rent are listed below: Tenant Brand Affiliation No. of Properties Investment (1) Percent of Total Investment Annualized Minimum Rent Percent of Total Annualized Minimum Rent Rent Coverage (2) 1. TravelCenters of America Inc. (3) TravelCenters of America / Petro Stopping Centers 175 $ 3,270,106 65.0 % $ 259,080 68.1 % 1.34x 2. Universal Pool Co., Inc. The Great Escape 14 98,242 2.0 % 7,711 2.0 % 4.75x 3. Healthy Way of Life II, LLC Life Time Fitness 3 92,617 1.8 % 5,770 1.5 % 2.84x 4. Styx Acquisition, LLC Buehler's Fresh Foods 5 76,469 1.5 % 5,657 1.5 % 2.54x 5. Professional Resource Development, Inc. Heartland Dental 59 61,120 1.2 % 4,769 1.3 % 4.81x 6. Norms Restaurants, LLC Norms 10 53,673 1.1 % 3,826 1.0 % 3.36x 7. Express Oil Change, L.L.C. Express Oil Change 23 49,724 1.0 % 3,717 1.0 % 5.88x 8. Pilot Travel Centers LLC Flying J Travel Plaza 3 41,681 0.8 % 3,312 0.9 % 3.28x 9. Automotive Remarketing Group, Inc. America's Auto Auction 6 38,314 0.8 % 3,216 0.8 % 7.16x 10. Fleet Farm Group LLC Fleet Farm 1 37,802 0.8 % 2,837 0.7 % 2.41x Subtotal, top 10 299 3,819,748 76.0 % 299,895 78.8 % 1.71x 11. Other (4) Various 440 1,212,133 24.0 % 80,673 21.2 % 3.41x Total 739 $ 5,031,881 100.0 % $ 380,568 100.0 % 2.07x (1) Represents the historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any. (2) See page 26 for our definition of rent coverage. (3) TA is our largest tenant. As of March 31, 2025, we leased 175 travel centers (131 under the TravelCenters of America brand and 44 under the Petro Stopping Centers brand) to a subsidiary of TA under five master leases that expire in 2033 . TA has five renewal options for 10 years each for all of the travel centers under each lease. BP Corporation North America Inc. guarantees payments under each of the five master leases. The aggregate guaranty as of March 31, 2025 was $3,037,475. Annualized minimum rent excludes the impact of rents prepaid by TA. Rent coverage was 1.39x, 1.40x, 1.40x, 1.47x and 1.11x for our TA leases no. 1, no. 2, no. 3, no. 4 and no. 5, respectively. Rent coverage is as of March 31, 2025. (4) Consists of 165 tenants with an average investment of $2,755 per property and an average annual minimum rent of $183 per property. 34 Table of Contents As of March 31, 2025, our net lease tenants operated across 21 distinct industries within the service-focused retail sector of the U.S. economy. Industry No. of Properties Investment (1) Percent of Total Investment Annualized Minimum Rent Percent of Total Annualized Minimum Rent Rent Coverage (2) 1. Travel Centers 178 $ 3,311,787 65.8% $ 262,392 68.9 % 1.36 x (3) 2. Restaurants - Quick Service 206 282,092 5.6% 19,408 5.1 % 3.08 x 3. Restaurants - Casual Dining 55 194,448 3.9% 12,150 3.2 % 2.88 x 4. Health and Fitness 13 187,579 3.7% 11,246 3.0 % 2.19 x 5. Home Goods and Leisure 20 134,613 2.7% 10,763 2.8 % 4.10 x 6. Grocery Stores 19 129,152 2.6% 9,317 2.4 % 3.19 x 7. Medical, Dental Office 70 104,042 2.1% 8,246 2.2 % 3.59 x 8. Movie Theaters 14 134,389 2.7% 8,236 2.2 % 1.87 x 9. Automotive Equipment and Services 64 107,054 2.1% 7,799 2.0 % 5.15 x 10. Automotive Dealers 8 62,656 1.2% 4,973 1.3 % 6.04 x 11. Entertainment 4 61,436 1.2% 4,609 1.2 % 2.12 x 12. General Merchandise Stores 4 55,457 1.1% 3,983 1.0 % 3.07 x 13. Educational Services 7 44,820 0.9% 3,563 0.9 % 1.82 x 14. Building Materials 29 34,006 0.7% 3,257 0.9 % 8.45 x 15. Car Washes 6 30,798 0.6% 2,411 0.6 % 4.43 x 16. Miscellaneous Manufacturing 5 24,355 0.5% 1,728 0.5 % 13.63 x 17. Sporting Goods 3 18,543 0.4% 1,104 0.3 % 4.12 x 18. Legal Services 5 11,362 0.2% 1,097 0.3 % 4.19 x 19. Drug Stores and Pharmacies 6 17,111 0.3% 957 0.3 % 1.10 x 20. Dollar Stores 3 2,971 0.1% 192 0.1 % 1.71 x 21. Other (4) 4 25,696 0.5% 3,137 0.8 % 6.58 x 22. Vacant 16 57,514 1.1% — — % — x Total 739 $ 5,031,881 100.0% $ 380,568 100.0% 2.07 x (1) Represents the historical cost of our net lease properties plus capital improvements funded by us less impairment write-downs, if any. (2) See page 26 for our definition of rent coverage. (3) Rent coverage for TA is as of March 31, 2025. (4) Consists of miscellaneous businesses with an average investment of $6,424 per property. 35 Table of Contents As of March 31, 2025, lease expirations at our net lease properties by year are as follows: Year (1) Number of Properties Square Feet Annualized Minimum Rent Expiring Percent of Total Annualized Minimum Rent Expiring Cumulative Percent of Total Annualized Minimum Rent Expiring 2025 23 422,477 $ 8,130 2.1% 2.1% 2026 102 1,000,067 11,250 3.0% 5.1% 2027 36 962,760 12,810 3.4% 8.5% 2028 23 646,767 10,431 2.7% 11.2% 2029 76 628,549 10,500 2.8% 14.0% 2030 37 215,000 5,591 1.5% 15.5% 2031 27 390,854 5,063 1.3% 16.8% 2032 35 137,154 2,882 0.8% 17.6% 2033 214 5,377,825 265,430 69.7% 87.3% 2034 24 332,648 6,403 1.9% 89.2% 2035 45 1,155,578 19,197 5.0% 94.2% 2036 14 299,407 5,460 1.4% 95.6% 2037 11 318,609 3,172 0.8% 96.4% 2038 7 66,700 1,264 0.3% 96.7% 2039 10 141,443 3,703 1.0% 97.7% 2040 18 115,142 2,406 0.6% 98.3% 2041 7 221,173 2,452 0.6% 98.9% 2042 — — —% 98.9% 2043 1 57,543 155 —% 98.9% 2044 2 93,010 278 0.1% 99.0% 2045 11 154,966 3,991 1.0% 100.0% Total 723 12,737,672 $ 380,568 100.0% (1) The year of lease expiration is pursuant to contract terms. As of March 31, 2025, shown below is the list of our top ten states where our net lease properties are located. No other state represents more than 3% of our net lease annualized minimum rents. State Number of Properties Square Feet Annualized Minimum Rent Percent of Total Annualized Minimum Rent Texas 55 1,168,354 $ 33,683 8.9% Illinois 53 972,329 27,365 7.2% Ohio 37 1,281,961 26,490 7.0% California 22 399,045 25,952 6.8% Georgia 70 580,553 20,720 5.4% Florida 46 529,040 17,233 4.5% Arizona 25 476,651 17,100 4.5% Indiana 40 620,950 16,060 4.2% Pennsylvania 28 544,003 15,804 4.2% New Mexico 16 246,478 11,795 3.1% Other 347 6,370,112 168,366 44.2% Total 739 13,189,476 $ 380,568 100.0% 36 Table of Contents Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of the applicable SEC rules, including funds from operations, or FFO, and normalized funds from operations, or Normalized FFO. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs. Funds From Operations and Normalized Funds From Operations We calculate FFO and Normalized FFO as shown below. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of real estate and loss on impairment of real estate assets, if any, plus real estate depreciation and amortization, as well as adjustments to reflect our share of FFO attributable to an investee and certain other adjustments currently not applicable to us. In calculating Normalized FFO, we adjust for the items shown below. FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to satisfy our REIT distribution requirements, limitations in our debt agreements, the availability to us of debt and equity capital, our distribution rate as a percentage of the trading price of our common shares, or dividend yield, and our dividend yield to the dividend yields of other REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do. Our calculations of FFO and Normalized FFO for the three months ended March 31, 2025 and 2024 and reconciliations of net loss, the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements, to those amounts appear in the following table (amounts in thousands, except per share amounts): Three Months Ended March 31, 2025 2024 Net loss $ (116,435) $ (78,383) Add (less): Depreciation and amortization 89,100 93,107 Loss on asset impairment 37,067 2,451 (Gain) loss on sale of real estate, net (746) 2,963 Adjustments to reflect our share of FFO attributable to an investee 1,200 966 FFO 10,186 21,104 Add (less): Transaction related costs 111 — Adjustments to reflect our share of Normalized FFO attributable to an investee 539 2 Normalized FFO $ 10,836 $ 21,106 Weighted average common shares outstanding (basic and diluted) 165,615 165,158 Basic and diluted per common share amounts: Net loss $ (0.70) $ (0.48) FFO $ 0.06 $ 0.13 Normalized FFO $ 0.07 $ 0.13 Distributions declared per share $ 0.01 $ 0.20 37 Table of Contents