(1)	Additional information and reconciliations of net income (loss) determined in accordance with U.S. generally accepted accounting principles, or GAAP, to certain non-GAAP measures including EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Normalized FFO, for the quarters and years ended December 31, 2019 and 2018 appear later in this press release.

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Net Income (loss): Net loss for the quarter ended December 31, 2019 was $14.9 million, or $0.09 per diluted common share, compared to a net loss of $108.9 million, or $0.66 per diluted common share, for the quarter ended December 31, 2018. Net loss for the quarter ended December 31, 2019 includes a $39.3 million, or $0.24 per diluted common share, loss on asset impairment. Net loss for the quarter ended December 31, 2018 includes $106.1 million, or $0.65 per diluted common share, of net unrealized losses on equity securities and $53.6 million, or $0.33 per diluted common share, of business management incentive fee expense. The weighted average number of diluted common shares outstanding was 164.4 million and 164.3 million for the quarters ended December 31, 2019 and 2018, respectively.

•	Adjusted EBITDAre: Adjusted EBITDAre for the quarter ended December 31, 2019 compared to the same period in 2018 increased 51.6% to $227.0 million.

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Normalized FFO: Normalized FFO for the quarter ended December 31, 2019 were $151.6 million, or $0.92 per diluted common share, compared to Normalized FFO of $100.0 million, or $0.61 per diluted common share, for the quarter ended December 31, 2018. Normalized FFO for the quarter ended December 31, 2018 includes $53.6 million, or $0.33 per diluted common share, of business management incentive fee expense.

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SVC and Sonesta have agreed to sell, rebrand or repurpose all 39 SVC owned extended stay hotels managed by Sonesta with an aggregate carrying value of $480.5 million, which currently require aggregate annual minimum returns of $49.5 million. As the hotels are sold, rebranded or repurposed, SVC's annual minimum returns due from Sonesta will decrease by the applicable amount allocated to each hotel;

•	Sonesta will continue to manage 14 full-service hotels owned by SVC and the annual minimum returns due for these hotels will be reduced from $99.0 million to $69.0 million;

•	SVC received an approximately 34% equity interest in Sonesta;

•	The amended management agreements require that up to 5% of hotel gross revenue be escrowed for future capital expenditures as “FF&E reserves,” subject to available cash flow after payment of SVC’s minimum returns;

•	The performance termination provisions under the Sonesta agreements were modified to a portfolio wide performance test for determining whether the management agreement for any of SVC's full-service hotels managed by Sonesta may be terminated for performance reasons and the non-economic provisions that previously allowed SVC to terminate an individual management agreement were removed; and

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•	The initial expiration dates of the management agreements for SVC's full-service hotels located in Chicago, IL and Irvine, CA and managed by Sonesta were extended to align with the remainder of the Sonesta portfolio and now expire in January 2037.

•	Hotel RevPAR (comparable hotels): For the quarter ended December 31, 2019 compared to the same period in 2018 for SVC’s 321 comparable hotels: average daily rate, or ADR, decreased 2.1% to $122.55; occupancy increased 1.3 percentage points to 69.5%; and revenue per available room, or RevPAR, decreased 0.2% to $85.17.

•	Hotel RevPAR (all hotels): For the quarter ended December 31, 2019 compared to the same period in 2018 for SVC’s 329 hotels that were owned as of December 31, 2019: ADR decreased 3.1% to $123.78; occupancy decreased 0.1 percentage points to 68.2%; and RevPAR decreased 3.3% to $84.42.

•	Hotel Coverage of Minimum Returns and Rents: For the quarter ended December 31, 2019, the aggregate coverage of SVC's minimum returns or rents decreased to 0.72x from 0.77x for the quarter ended December 31, 2018.

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Marriott Agreements: As of December 31, 2019, 122 of SVC’s hotels were operated by subsidiaries of Marriott under three agreements. SVC’s Marriott No. 1 agreement included 53 hotels and provided for annual minimum return payments to SVC of $71.9 million as of December 31, 2019 (approximately $18.0 million per quarter). During the three months ended December 31, 2019, SVC realized returns under its Marriott No. 1 agreement of $16.4 million. Because there was no guarantee or security deposit for this agreement, the minimum returns SVC received under this agreement were limited to available hotel cash flows after payment of hotel operating expenses and funding of an FF&E reserve. SVC’s Marriott No. 234 agreement included 68 hotels and required annual minimum returns to SVC of $110.4 million as of December 31, 2019 (approximately $27.6 million per quarter). During the three months ended December 31, 2019, SVC realized returns under its Marriott No. 234 agreement of $27.4 million. SVC’s Marriott No. 234 agreement was partially secured by a security deposit and a limited guaranty from Marriott; during the three months ended December 31, 2019, SVC reduced the available security deposit by $3.2 million to cover shortfalls in hotel cash flows available to pay the minimum returns due to SVC during the period. As of December 31, 2019, the available security deposit from Marriott for the Marriott No. 234 agreement was $33.4 million. SVC's Marriott No. 5 agreement included one resort hotel in Kauai, HI which was leased to Marriott on a full recourse basis. The contractual rent due to SVC for this hotel for the three months ended December 31, 2019 of $2.6 million was paid to SVC.

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IHG Agreement: As of December 31, 2019, 103 of SVC’s hotels were operated by subsidiaries of IHG under one agreement requiring annual minimum returns and rents to SVC of $216.2 million as of December 31, 2019 (approximately $54.1 million per quarter). During the three months ended December 31, 2019, SVC realized returns and rents under its IHG agreement of $52.9 million. SVC's IHG agreement is partially secured by a security deposit. During the three months ended December 31, 2019, SVC reduced the available security deposit by $10.0 million to cover shortfalls in hotel cash flows available to pay the minimum returns and rents due to SVC during the period. As of December 31, 2019, the available IHG security deposit which SVC held to pay future payment shortfalls was $75.7 million.

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Sonesta Agreement: As of December 31, 2019, 53 of SVC’s hotels were operated under a management agreement with Sonesta requiring annual minimum returns of $146.8 million as of December 31, 2019 (approximately $36.7 million per quarter). During the three months ended December 31, 2019, SVC realized returns under its Sonesta agreement of $9.8 million. Because there is no guarantee or security deposit for this agreement, the minimum returns SVC receives under this agreement are limited to available hotel cash flows after payment of hotel operating expenses including management and related fees.

•	Wyndham Agreement: As of December 31, 2019, 20 of SVC's hotels were operated under a management agreement with subsidiaries of Wyndham that previously required annual minimum returns of $18.9 million as of December 31, 2019 (approximately $4.7 million per quarter). As previously announced, SVC is exiting its relationship

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Other Hotel Agreements: As of December 31, 2019, SVC's remaining 31 hotels were managed under two agreements: one management agreement with a subsidiary of Hyatt Hotels Corporation (NYSE: H), or Hyatt, for 22 hotels requiring annual minimum returns of $22.0 million (approximately $5.5 million per quarter); and one management agreement with a subsidiary of Radisson Hospitality, Inc., or Radisson, for nine hotels, requiring annual minimum returns of $20.4 million (approximately $5.1 million per quarter); minimum returns due to SVC are partially guaranteed under the Hyatt and Radisson agreements.

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(1)

As of December 31, 2019, SVC owned 329 hotels; 327 of these hotels were managed by hotel operating companies and two hotels were leased to hotel operating companies. As of December 31, 2019, SVC also owned 816 net lease properties. SVC’s consolidated statements of income include hotel operating revenues and expenses of managed hotels and rental income and other operating expenses from its leased hotels and net lease properties. Certain of SVC's managed hotels had net operating results that were, in the aggregate, $48,897 and $31,610 less than the minimum returns due to SVC for the three months ended December 31, 2019 and 2018, respectively, and $96,744 and $50,203 less than the minimum returns due to SVC for the years ended December 31, 2019 and 2018, respectively. When managers of these hotels are required to fund the shortfalls under the terms of SVC’s management agreements or their guarantees, SVC reflects such fundings (including security deposit applications) in its consolidated statements of income as a reduction of hotel operating expenses. The reduction to hotel operating expenses was $15,907 and $6,748 for the three months ended December 31, 2019 and 2018, respectively, and $29,897 and $5,569 for the years ended December 31, 2019 and 2018, respectively. When SVC reduces the amounts of the security deposit it holds for any of its operating agreements for payment deficiencies, it does not result in additional cash flows to SVC of the deficiency amounts, but reduces the refunds due to the respective tenants or managers who have provided SVC with these deposits upon expiration of the applicable operating agreement. The security deposits are non-interest bearing and are not held in escrow. SVC had shortfalls at certain of its managed hotel portfolios not funded by the managers of these hotels under the terms of its management agreements of $28,374 and $15,981 for the three months ended December 31, 2019 and 2018, respectively, and $69,929 and $44,634 for the years ended December 31, 2019 and 2018, respectively, which represent the unguaranteed portions of SVC's minimum returns from its Sonesta and Wyndham agreements. Certain of SVC’s managed hotel portfolios had net operating results that were, in the aggregate, $10,702 and $35,464 more than the minimum returns due to SVC for the years ended December 31, 2019 and 2018, respectively. The net operating results of SVC's managed hotel portfolios did not exceed the minimum returns due to SVC for either of the three months ended December 31, 2019 or 2018. Certain of SVC's guarantees and its security deposits may be replenished by a share of future cash flows from the applicable hotel operations in excess of the minimum returns due to SVC pursuant to the terms of the applicable agreements. When SVC's guarantees and security deposits are replenished by cash flows from hotel operations, SVC reflects such replenishments in its consolidated statements of income as an increase to hotel operating expenses. SVC had $734 and $10,743 of guaranty and security deposit replenishments for the years ended December 31, 2019 and 2018, respectively. There were no such replenishments for the either of the three months ended December 31, 2019 or 2018.

(2)

SVC reduced rental income by $3,351 and $10,719 in the three months and year ended December 31, 2019, respectively, and increased rental income by $3,150 and $12,509 for the three months and year ended December 31, 2018, respectively, to record scheduled rent changes under certain of SVC’s leases, the deferred rent obligations under SVC’s leases with TA and the estimated future payments to SVC under its leases with TA for the cost of removing underground storage tanks on a straight line basis. Rental income also includes $4,238 and $3,695 in both the three months and years ended December 31, 2019 and 2018, respectively, of percentage rental income.

(3)

Various percentages of total sales at certain of SVC’s hotels are escrowed as reserves for future renovations or refurbishment, or FF&E reserve escrows. SVC owns all the FF&E reserve escrows for its hotels. SVC reports deposits by its tenants into the escrow accounts under its hotel leases as FF&E reserve income. SVC does not report the amounts which are escrowed as FF&E reserves for its managed hotels as FF&E reserve income.

(4)

Incentive fees under SVC’s business management agreement with The RMR Group LLC are payable after the end of each calendar year, are calculated based on common share total return, as defined, and are included in general and administrative expense in SVC’s consolidated statements of income. In calculating net income (loss) in accordance with GAAP, SVC recognizes estimated business management incentive fee expense, if any, in the first, second and third quarters. Although SVC recognizes this expense, if any, in the first, second and third quarters for purposes of calculating net income (loss), SVC does not include these amounts in the calculation of Normalized FFO or Adjusted EBITDAre until the fourth quarter, which is when the business management incentive fee expense amount for the year, if any, is determined. General and administrative expense includes $53,635 of business management incentive fee expense for both the three months and year ended December 31, 2018. No business management incentive fee expense was recorded for the three months and year ended December 31, 2019.

(5)	Acquisition and transaction related costs represents costs related to SVC's exploration of possible financing transactions.

(6)	SVC recorded a $39,296 loss on asset impairment during the three months ended December 31, 2019 to reduce the carrying value of 19 net lease properties to their estimated fair value less costs to sell and two hotels to their estimated fair value.

(7)	SVC recorded a $159,535 gain on sale of real estate during the three months ended March 31, 2019 in connection with the sales of 20 travel centers.

(8)	Unrealized gains and (losses) on equity securities, net represent the adjustment required to adjust the carrying value of SVC's investments in RMR Inc. and TA common shares to their fair value. SVC sold its shares in RMR Inc. on July 1, 2019.

(9)	SVC recorded a loss of $8,451 on early extinguishment of debt in the year ended December 31, 2019 related to the termination of a term loan commitment SVC arranged in connection with the acquisition of a net lease portfolio. SVC also recorded a loss of $160 on early extinguishment of debt in the year ended December 31, 2018 in connection with amending its revolving credit facility and term loan.

(10)	SVC recorded a $1,997 loss contingency during the three months ended December 31, 2019 for an expected settlement of a historical pension withdrawal liability for a hotel it rebranded.

(11)

SVC calculates FFO and Normalized FFO as shown above. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of properties and loss on impairment of real estate assets, if any, plus real estate depreciation and amortization, less any unrealized gains and losses on equity securities, as well as certain other adjustments currently not applicable to SVC. In calculating Normalized FFO, SVC adjusts for the item shown above and includes business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of SVC’s core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year. FFO and Normalized FFO are among the factors considered by SVC’s Board of Trustees when determining the amount of distributions to its shareholders. Other factors include, but are not limited to,

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(12)

SVC calculates EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre as shown above. EBITDAre is calculated on the basis defined by Nareit which is EBITDA, excluding gains and losses on the sale of real estate, loss on impairment of real estate assets, if any, as well as certain other adjustments currently not applicable to SVC. In calculating Adjusted EBITDAre, SVC adjusts for the items shown above and includes business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as an expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of SVC’s core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year. Other real estate companies and REITs may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than SVC does.

(13)	Amounts represent the equity compensation for SVC’s trustees, its officers and certain other employees of SVC’s manager.

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The press release references recent agreements SVC entered into with Marriott and Sonesta that change SVC's historical business arrangements with those managers and which Mr. Murray states SVC expects will be beneficial to SVC, including certain particular benefits such as strengthened credit support for SVC’s minimum returns from Marriott and improved coverage of SVC’s minimum returns for its Marriott portfolio. However, SVC cannot be sure that it will realize the benefits it expects from these agreements.

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Mr. Murray states that SVC is at various stages of marketing for sale or rebranding 53 hotels that were a part of its previously announced disposition plan. In addition, this press release reports that SVC will be exiting all 39 of the extended stay hotels currently managed by Sonesta. SVC cannot be sure it will be able to sell, rebrand or repurpose any of these hotels and any sales it may complete may be at prices less than SVC expects and less than net book value. SVC may incur losses in connection with any sale, rebranding or repurposing of these hotels. In addition, SVC cannot be sure that any hotels it may rebrand or repurpose will result in improved performance. In fact, rebranding or repurposing hotels likely will result in short term disruption to operations of these hotels.

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Mr. Murray indicates in this press release that comparable hotels that were not under renovation during the fourth quarter had increased RevPAR as compared to RevPAR declines for hotels that were under renovation. These statements may imply that SVC's comparable hotels that were impacted by renovation activities will experience improved RevPAR performance once those hotels are no longer impacted by those matters similar to or better than the RevPAR experienced by SVC's other hotels. In fact, those comparable hotels, excluding the impact of renovations, may not realize similar RevPAR performance.

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Certain of SVC's operating agreements are secured by guarantees or security deposits from SVC's managers and tenants. This may imply that minimum returns and rents due to SVC will be paid. In fact, certain of these guarantees and security deposits are limited in amount and duration and all the guarantees are subject to the guarantors' abilities and willingness to pay. SVC cannot be sure of the future financial performance of SVC's properties and whether such performance will cover SVC's minimum returns and rents, whether the guarantees or security deposits will be adequate to cover future shortfalls in the minimum returns or rents due to SVC which they guarantee or secure, or regarding SVC's managers', tenants' or guarantors' future actions if and when the guarantees and security deposits expire or are depleted or their abilities or willingness to pay minimum returns and rents owed to SVC. Moreover, the security deposits SVC holds are not segregated from SVC's other assets and, although the application of security deposits to cover payments shortfalls will result in SVC recording income, it will not result in SVC receiving additional cash.

•	SVC has no guarantees or security deposits for the minimum returns due to SVC from SVC's Sonesta or Wyndham agreements. Accordingly, SVC may receive amounts that are less than the contractual minimum returns stated in these agreements.

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