Note 4. Shareholders' Equity

Common Share Issuances

On August 19, 2016, we sold 11,000,000 of our common shares at a price of $30.75 per share in a public offering. On August 26, 2016, we sold 1,650,000 of our common shares at a price of $30.75 per share pursuant to an overallotment option granted to the underwriters. Aggregate net proceeds from these sales were $372,217 after underwriters' discount and other offering expenses.

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, 2018, 2017 and 2016, we granted 97,000 of our common shares with an aggregate market value of $2,810, 85,000 of our common shares with an aggregate market value of $2,387 and 79,100 of our common shares with an aggregate market value of $2,260, respectively, to our officers and certain other employees of our manager, RMR LLC, pursuant to the Share Award Plan. The value of the share grants was based upon the closing price of our common stock on The Nasdaq Stock Market LLC, or Nasdaq, or the New York Stock Exchange, or the NYSE, as applicable, on the date of the grant. See Note 10 for a further discussion of the grants we made to our officers and certain other employees of RMR LLC. On April 12, 2018, we granted 3,000 of our common shares with an aggregate market value of $75 to one of our Managing Trustees who was elected as a Managing Trustee that day. In addition, we granted each of our then Trustees 3,000 of our common shares in each of 2018 and 2017 and 2,500 of our common shares in 2016 with an aggregate market value of $427 ($85 per trustee), $452 ($90 per trustee) and $319 ($64 per trustee), respectively, as part of their annual compensation. The values of the share grants were based upon the closing price of our common shares on Nasdaq or NYSE, as applicable, on the dates of the grants. The shares granted to our Trustees vest immediately. The shares granted to our officers and certain other employees of RMR LLC vest in five annual installments beginning on the date of grant. Share grants are expensed ratably over the vesting period and the value of such share grants are included in general and administrative expense in our consolidated statements of comprehensive income.

A summary of shares granted, vested, forfeited and unvested under the terms of the Share Award Plan for the years ended December 31, 2018, 2017 and 2016 is as follows:



	2018				2017				2016
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Unvested shares, beginning of year	146,605		$	27.93	148,535		$	29.40	147,004		$	25.95
Shares granted	115,000		28.80		100,000		28.39		91,600		28.15
Shares vested	(96,375	)	28.73		(101,930	)	28.52		(90,069	)	28.07
Shares forfeited	(1,230	)	—		—		—		—		—
Unvested shares, end of year	164,000		$	28.39	146,605		$	27.93	148,535		$	29.40

The 164,000 unvested shares as of December 31, 2018 are scheduled to vest as follows: 74,070 shares in 2019, 42,540 shares in 2020, 30,370 shares in 2021 and 17,020 shares in 2022. As of December 31, 2018, the estimated future compensation expense for the unvested shares was $3,669. The weighted average period over which the compensation expense will be recorded is approximately 23 months. During the years ended December 31, 2018, 2017 and 2016, we recorded $3,187, $2,759 and $2,834, respectively, of compensation expense related to the Share Award Plan.

At December 31, 2018, 2,412,017 of our common shares remain reserved for issuance under our current Share Award Plan.

Stock Repurchases

During 2018, we purchased an aggregate of 21,202 of our common shares valued at a weighted average price per common share of $28.59, based on the closing price of our common shares on Nasdaq, on the date of repurchase, 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 awards of our common shares.

During 2017, we purchased an aggregate of 19,058 of our common shares valued at a weighted average price per common share of $28.01, based on the closing price of our common shares on Nasdaq, on the date of repurchase, 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 awards of our common shares.

During 2016, we purchased an aggregate of 20,689 of our common shares valued at a weighted average price per common share of $29.64, based on the closing price of our common shares on Nasdaq, on the dates of repurchase, from certain of our officers and certain other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

Preferred Shares

On February 10, 2017, we redeemed all 11,600,000 of our outstanding 7.125% Series D cumulative redeemable preferred shares at the stated liquidation preference of $25.00 per share plus accrued and unpaid dividends to the date of redemption (an aggregate of $291,435). We reduced net income available for common shareholders in 2017 by $9,893, which represents the amount by which the liquidation preference for our Series D cumulative redeemable preferred shares that were redeemed exceeded our carrying amount for those preferred shares as of the date of redemption.

Common Share Distributions

Cash distributions paid or payable by us to our common shareholders for the years ended December 31, 2018, 2017 and 2016 were $2.11 per share, or $346,832, $2.07 per share, or $340,084, and $2.03 per share, or $314,135, respectively. The characterization of our distributions paid in 2018 was 100.00% ordinary income. The characterization of our distributions paid in 2017 was 94.69% ordinary income, 4.39% return of capital and 0.92% qualified dividend. The characterization of our distributions paid in 2016 was 93.23% ordinary income, 6.17% return of capital and 0.60% qualified dividend.

On January 18, 2019, we declared a distribution of $0.53 per common share, or $87,154, which we paid on February 21, 2019, to shareholders of record on January 28, 2019 using cash on hand and borrowings under our revolving credit facility.

Cumulative Other Comprehensive Income (Loss)

Cumulative other comprehensive income (loss), as of December 31, 2018, represents our share of the comprehensive loss of AIC. See Note 10 for further information regarding this investment.

The following table presents changes in the amounts we recognized in cumulative other comprehensive income (loss) by component for the year ended December 31, 2018:



	Year Ended December 31, 2018
	Unrealized Gain			Equity in
	(Loss) on Investment			Unrealized Gain
	Securities, net			(Loss) of Investees			Total
Balance at December 31, 2017	$	78,715		$	643		$	79,358
Amounts reclassified from cumulative other comprehensive income to retained earnings	(78,715		)	(841		)	(79,556		)
Current year other comprehensive income	—			(68		)	(68		)
Balance at December 31, 2018	$	—		$	(266	)	$	(266	)