Service Properties Trust Q1 FY2026 earnings call

• Strategic priorities: Executed a capital plan strengthening the balance sheet, closed $745 million ABS financing and $575 million equity offering, retired $1.6 billion debt. • Hotel performance: RevPAR growth in the first quarter, underlying performance of retained hotels strong despite redevelopment displacement. • Hotel dispositions: Advanced capital recycling, sold a 133-key focused service hotel, progressed marketing of 15 Senespa managed hotels, with pricing on marketed hotels softer than initial outlook but signed LOIs for some. • Net lease: Portfolio details, asset management executed 20 leases, made acquisitions targeting resilient brands. • Financial results: Normalized FFO $7.4 million, down from prior quarter; interest expense declined due to capital markets activity

Hotel: RevPAR across 93 hotels increased 6.7% year-over-year; hotel EBITDA across the portfolio decreased 9.2% year-over-year to $18.4 million, with 15 properties currently being marketed for sale contributing to the decline. Excluding the assets marketed for sale, REVPAR grew 7.5% year-over-year and hotel EBITDA increased 2.1% to $26.2 million. Net lease: At quarter end, the net lease portfolio contained 761 properties across 42 states with annual base rents of $392 million, ~97% leased with a weighted average lease term of 7.3 years; NOI from the net lease portfolio declined $2.2 million year over year primarily driven by credit loss reserves, partially offset by a $2 million positive impact from acquisition activity

• Reaffirming full-year outlook for hotel EBITDA, net lease NOI, and consolidated adjusted EBITDA. • Increasing normalized FFO range to $124 million to $144 million, or $0.24 to $0.27 per share. • Full year guidance assumes midpoint interest expense $360 million and G&A expense $40 million. • Expect total CapEx for the year of $120 to $140 million

• Broader macro headwinds including geopolitical uncertainty, elevated fuel costs, lagging travel. • Pricing on marketed hotels softer than initial outlook. • Credit losses in net lease portfolio. • Uncertainty around bankruptcy proceedings impacting net lease assets' performance

Q: About net lease operating expenses and rent coverage for TA portfolio.

A: $2 million credit losses related to franchisees filing bankruptcy, TA benefited from pricing volatility and freight demand.

Q: Hospitality expense side and hotel EBITDA guidance.

A: Rising insurance costs impacted margins, labor costs up 3%, guidance reflects factors in range.

Q: Hotel asset sales timeline and performance.

A: 15 hotels in market, some with term sheets, performance decrease due to market and sale process.

Q: Post-equity raise covenants and debt upcoming.

A: Equity offering provided cushion, secured notes have extension option.

Q: Proceeds from hotel sales and net lease credit issues.

A: Proceeds flexible, credit issues not thematic, timing of bounce back dependent on bankruptcy proceedings