Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2021

Note 12. Fair Value of Assets and Liabilities

The table below presents certain of our assets carried at fair value at September 30, 2021, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.


	September 30, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair Value
Recurring Fair Value Measurement Assets:
Investment in TA (Level 1) (1)	$	58,991	$	58,991	$	38,624	$	38,624
Non-Recurring Fair Value Measurement Assets:
Assets of properties held for sale (Level 2) (2)	$	3,690	$	3,690	$	13,543	$	13,543

(1)As of September 30, 2021 and December 31, 2020, we owned 1,184,797 shares of TA common stock, which are included in other assets in our condensed consolidated balance sheets and reported at fair value based on quoted market prices (Level 1 inputs). Our historical cost basis for these shares was $24,418 as of both September 30, 2021 and December 31, 2020. We recorded unrealized gains of $24,348 and $5,606 during the three months ended September 30, 2021 and 2020, respectively, and unrealized gains of $20,367 and $4,909 during the nine months ended September 30, 2021 and 2020, respectively, to adjust the carrying value of our investment in shares of TA common stock to its fair value.

(2)As of September 30, 2021, we owned six net lease properties located in five states with an aggregate carrying value of $3,690 classified as held for sale. These properties are recorded at their estimated fair value less costs to sell based on information derived from offers received from prospective buyers of the properties (Level 2 inputs as defined in the fair value hierarchy under GAAP). We recorded a $2,110 loss on asset impairment during the nine months ended September 30, 2021 to reduce the carrying value of five of these properties to their estimated fair value less costs to sell. As of December 31, 2020, we owned five hotels in four states with an aggregate carrying value of $10,699 and six net lease properties located in six states with an aggregate carrying value of $2,844 classified as held for sale.

In addition to the assets included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility and senior notes. At September 30, 2021 and December 31, 2020, the fair values of these additional financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short-term nature or floating interest rates, except as follows:


	September 30, 2021				December 31, 2020
	Carrying Value (1)		Fair Value		Carrying Value (1)		Fair Value
Senior Unsecured Notes, due 2022 at 5.00%	$	498,941	$	504,458	$	498,032	$	510,285
Senior Unsecured Notes, due 2023 at 4.50%	499,720		511,435		499,596		505,280
Senior Unsecured Notes, due 2024 at 4.65%	349,004		355,541		348,700		347,893
Senior Unsecured Notes, due 2024 at 4.35%	820,649		840,362		819,546		819,328
Senior Unsecured Notes, due 2025 at 4.50%	347,634		350,656		347,118		346,462
Senior Unsecured Notes, due 2025 at 7.50%	790,757		900,748		789,006		926,404
Senior Unsecured Notes, due 2026 at 5.25%	345,059		353,668		344,212		354,996
Senior Unsecured Notes, due 2026 at 4.75%	446,973		449,460		446,515		448,506
Senior Unsecured Notes, due 2027 at 4.95%	395,971		399,028		395,405		404,328
Senior Unsecured Notes, due 2027 at 5.50%	443,109		479,815		442,370		491,918
Senior Unsecured Notes, due 2028 at 3.95%	392,770		379,540		391,908		388,146
Senior Unsecured Notes, due 2029 at 4.95%	418,697		417,163		418,102		430,064
Senior Unsecured Notes, due 2030 at 4.375%	390,503		382,550		389,656		388,292
Total financial liabilities	$	6,139,787	$	6,324,424	$	6,130,166	$	6,361,902

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

At September 30, 2021 and December 31, 2020, 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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