Fair Value of Assets and Liabilities

12 Months Ended

Dec. 31, 2019

Note 14. Fair Value of Assets and Liabilities

The table below presents certain of our assets carried at fair value at December 31, 2019, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.



			Fair Value at Reporting Date Using
Description	Carrying Value at December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Fair Value Measurement Assets:
Investment in TA⁽¹⁾	$	11,731	$	11,731	$	—	$	—
Non-recurring Fair Value Measurement Assets
Assets of properties held for sale⁽²⁾	87,493		—		—		90,122
Assets of properties held and used ⁽³⁾	38,000		—		—		38,000

(1)

Our 684,000 common shares of TA, which are included in other assets in our consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares is $17,407 as of December 31, 2019. During the year ended December 31, 2019, we recorded unrealized losses of $1,129 to adjust the carrying value of our investment in TA shares to their fair value as of December 31, 2019.

(2)

As of December 31, 2019, we owned 19 net lease properties located in 12 states classified as held for sale of $87,493. 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 $10,925 loss on asset impairment in 2019 to reduce the carrying value of these properties to their estimated fair value less costs to sell.


(3)	We recorded a $28,371 loss on asset impairment in 2019 to reduce the carrying value of two hotels to their estimated fair value of $38,000 based on discounted cash flow analyses (Level 3 inputs).

In addition to the investment securities 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. At December 31, 2019 and December 31, 2018, the fair values of these additional financial instruments approximated their carrying values in our consolidated balance sheets due to their short term nature or floating interest rates, except as follows:



	December 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
	Amount ⁽¹⁾		Value		Amount ⁽¹⁾		Value
Senior Unsecured Notes, due 2021 at 4.25%	$	398,379	$	406,838	$	396,938	$	404,582
Senior Unsecured Notes, due 2022 at 5.00%	496,821		526,500		495,609		510,658
Senior Unsecured Notes, due 2023 at 4.50%	499,432		520,478		499,268		503,295
Senior Unsecured Notes, due 2024 at 4.65%	348,295		364,277		347,890		349,741
Senior Unsecured Notes, due 2024 at 4.35%	818,075		848,847		—		—
Senior Unsecured Notes, due 2025 at 4.50%	346,431		361,783		345,743		341,114
Senior Unsecured Notes, due 2026 at 5.25%	343,083		369,185		341,955		354,060
Senior Unsecured Notes, due 2026 at 4.75%	445,905		464,315		—		—
Senior Unsecured Notes, due 2027 at 4.95%	394,649		414,012		393,893		391,660
Senior Unsecured Notes, due 2028 at 3.95%	390,759		393,940		389,610		361,232
Senior Unsecured Notes, due 2029 at 4.95%	417,307		434,248		—		—
Senior Unsecured Notes, due 2030 at 4.375%	388,522		394,788		387,389		367,110
Total financial liabilities	$	5,287,658	$	5,499,211	$	3,598,295	$	3,583,452


(1)	Carrying value includes unamortized discounts and premiums and certain issuance costs.

At December 31, 2019 and 2018, 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).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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