10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September30, 2015

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-11527

HOSPITALITY PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland	04-3262075
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts	02458
(Address of Principal Executive Offices)	(Zip Code)

617-964-8389

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒

Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of November8, 2015:    151,547,288

HOSPITALITY PROPERTIES TRUST

FORM 10-Q

September 30, 2015

INDEX

		Page
PART I	Financial Information (unaudited)
	Item 1. Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets — September30, 2015 andDecember 31, 2014	3
	Condensed Consolidated Statements of Comprehensive Income— Three and Nine Months Ended September  30, 2015 and 2014	4
	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September  30, 2015 and 2014	5
	Notes to Condensed Consolidated Financial Statements	6
	Item 2.
	Management’s Discussion and Analysis of Financial Condition andResults of Operations	24
	Item 3.
	Quantitative and Qualitative Disclosures About Market Risk	43
	Item 4.
	Controls and Procedures	44
	Warning Concerning Forward Looking Statements	45
	Statement Concerning Limited Liability	50
PART II	Other Information
	Item 1A.
	Risk Factors	50
	Item 2.
	Unregistered Sales of Equity Securities and Use of Proceeds	50
	Item 6.
	Exhibits	51
	Signatures	53

References in this Quarterly Report on Form 10-Q to “HPT”, “we”, “us” or “our” include Hospitality Properties Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

2

Part IFinancial Information

Item 1.  Financial Statements

HOSPITALITY PROPERTIES TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(dollars in thousands, except share data)

	September 30,		December 31,
	2015		2014
ASSETS
Real estate properties, at cost:
Land	$	1,527,504	$	1,484,210
Buildings, improvements and equipment		6,671,318		6,171,983
Total real estate properties, gross		8,198,822		7,656,193
Accumulated depreciation		(2,153,666)		(1,982,033)
Total real estate properties, net		6,045,156		5,674,160
Cash and cash equivalents		7,375		11,834
Restricted cash (FF&E reserve escrow)		44,296		33,982
Due from related persons		46,862		40,253
Other assets, net		350,861		222,333
Total assets	$	6,494,550	$	5,982,562
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unsecured revolving credit facility	$	454,000	$	18,000
Unsecured term loan		400,000		400,000
Senior unsecured notes, net of discounts		2,413,530		2,412,135
Convertible senior unsecured notes		8,478		8,478
Security deposits		53,175		33,069
Accounts payable and other liabilities		160,063		106,903
Due to related persons		24,306		8,658
Dividends payable		5,166		5,166
Total liabilities		3,518,718		2,992,409
Commitments and contingencies
Shareholders’ equity:
Preferred shares of beneficial interest, no par value; 100,000,000 shares authorized:
Series D preferred shares; 7 1/8% cumulative redeemable;  11,600,000 shares issued and outstanding, aggregate liquidation preference of $290,000		280,107		280,107
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 151,547,288 and 149,920,449 shares issued and outstanding, respectively		1,515		1,499
Additional paid in capital		4,165,912		4,118,551
Cumulative net income		2,901,151		2,715,239
Cumulative other comprehensive income		17,881		25,804
Cumulative preferred distributions		(316,146)		(300,649)
Cumulative common distributions		(4,074,588)		(3,850,398)
Total shareholders’ equity		2,975,832		2,990,153
Total liabilities and shareholders’ equity	$	6,494,550	$	5,982,562

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenues:
Hotel operating revenues	$	437,171	$	394,973	$	1,243,744	$	1,112,157
Rental income		73,747		63,837		207,561		190,959
FF&E reserve income		968		829		3,159		2,673
Total revenues		511,886		459,639		1,454,464		1,305,789
Expenses:
Hotel operating expenses		308,603		279,560		870,689		780,955
Depreciation and amortization		84,261		79,649		243,812		236,699
General and administrative		19,831		16,798		53,820		41,429
Acquisition related costs		851		14		1,986		237
Total expenses		413,546		376,021		1,170,307		1,059,320
Operating income		98,340		83,618		284,157		246,469
Interest income		11		13		32		63
Interest expense (including amortization of deferred financing costs and debt discounts of $1,458,  $1,361,  $4,374 and $4,034, respectively)		(36,628)		(34,304)		(107,918)		(104,101)
Loss on early extinguishment of debt		-		(129)		-		(855)
Income before income taxes, equity in earnings (losses) of an investee and gain on sale of real estate		61,723		49,198		176,271		141,576
Income tax expense		(514)		(39)		(1,445)		(1,110)
Equity in earnings (losses) of an investee		(24)		38		71		66
Income before gain on sale of real estate		61,185		49,197		174,897		140,532
Gain on sale of real estate		-		-		11,015		130
Net income		61,185		49,197		185,912		140,662
Preferred distributions		(5,166)		(5,166)		(15,498)		(15,498)
Net income available for common shareholders	$	56,019	$	44,031	$	170,414	$	125,164
Net income	$	61,185	$	49,197	$	185,912	$	140,662
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities		(15,458)		3,420		(7,832)		479
Equity interest in investee’s unrealized gains (losses)		(72)		(33)		(91)		9
Other comprehensive income (loss)		(15,530)		3,387		(7,923)		488
Comprehensive income	$	45,655	$	52,584	$	177,989	$	141,150
Weighted average common shares outstanding (basic)		151,359		149,665		150,476		149,616
Weighted average common shares outstanding (diluted)		151,386		150,007		150,863		149,834
Net income available for common shareholders per common share:  Basic and diluted	$	0.37	$	0.29	$	1.13	$	0.84

The accompanying notes are an integral part of these condensed consolidated financial statements.

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HOSPITALITY PROPERTIES TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	For the Nine Months Ended September 30,
	2015		2014
Cash flows from operating activities:
Net income	$	185,912	$	140,662
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		243,812		236,699
Amortization of deferred financing costs and debt discounts as interest		4,374		4,034
Straight line rental income		(5,807)		(1,659)
Security deposits replenished		20,098		9,382
FF&E reserve income and deposits		(51,840)		(41,462)
Loss on extinguishment of debt		-		855
Equity in earnings of an investee		(71)		(66)
Gain on sale of real estate		(11,015)		(130)
Other non-cash (income) expense, net		650		8,463
Changes in assets and liabilities:
Increase in due from related persons		(1,629)		(922)
Increase in other assets		(7,479)		(2,283)
Decrease in accounts payable and other liabilities		(19,838)		(26,047)
Increase (decrease) in due to related persons		17,739		(972)
Net cash provided by operating activities		374,906		326,554
Cash flows from investing activities:
Real estate acquisitions and deposits		(380,926)		(60,000)
Real estate improvements		(172,627)		(159,027)
FF&E reserve escrow fundings		(6,505)		(4,699)
Net proceeds from sale of real estate		-		4,288
Eminent domain proceeds		-		6,178
Investment in Affiliates Insurance Company		-		(825)
Investment in The RMR Group Inc.		(15,196)		-
Net cash used in investing activities		(575,254)		(214,085)
Cash flows from financing activities:
Proceeds from issuance of senior unsecured notes, net of discount		-		690,071
Repayment of senior unsecured notes		-		(580,000)
Borrowings under unsecured revolving credit facility		611,000		745,000
Repayments of unsecured revolving credit facility		(175,000)		(730,000)
Deferred financing costs		(5)		(6,881)
Repurchase of common shares		(419)		-
Distributions to preferred shareholders		(15,497)		(15,498)
Distributions to common shareholders		(224,190)		(218,579)
Net cash provided by (used in) financing activities		195,889		(115,887)
Decrease in cash and cash equivalents		(4,459)		(3,418)
Cash and cash equivalents at beginning of period		11,834		22,500
Cash and cash equivalents at end of period	$	7,375	$	19,082
Supplemental cash flow information:
Cash paid for interest	$	119,885	$	121,731
Cash paid for income taxes		2,289		3,947
Non-cash investing activities:
Hotel managers’ deposits in FF&E reserve	$	49,774	$	38,328
Hotel managers’ purchases with FF&E reserve		(45,965)		(43,278)
Investment in The RMR Group Inc. paid in common shares		43,285		-
Real estate acquisitions		(45,042)		-
Sales of real estate		45,042		-

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

Note 1.  Basis of Presentation

The accompanying condensed consolidated financial statements of Hospitality Properties Trust and its subsidiaries, or HPT, we, our or us, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2014, or our 2014 Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included in these condensed consolidated financial statements. These condensed consolidated financial statements include the accounts of HPT and our subsidiaries, all of which are 100% owned directly or indirectly by HPT. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year. Reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current year’s presentation.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates.  Significant estimates in our condensed consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets, impairment of real estate and the valuation of intangible assets.

We have determined that each of our taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards CodificationTM.   We have concluded that we must consolidate each of our TRSs because we are the entity with the power to direct the activities that most significantly impact the VIEs’ economic performance and we have the obligation to absorb losses or the right to receive benefits from each VIE that could be significant to the VIE, and are, therefore, the primary beneficiary of each VIE.  The assets of our TRSs were $32,875 and $27,023 as of September30, 2015 and December 31, 2014, respectively, and consist primarily of amounts due from, and working capital advances to, certain of their hotel managers.  The liabilities of our TRSs were $63,696 and $50,528 as of September  30, 2015 and December 31, 2014, respectively, and consist primarily of security deposits they hold from and amounts payable to certain of their hotel managers.  The assets of our TRSs are available to satisfy our TRSs’ obligations and we have guaranteed certain obligations of our TRSs.

Note 2.  New Accounting Pronouncements

In February 2015, the FASB issued Accounting Standards Update, or ASU, No. 2015-02, Consolidation.  Among other things, this update changes how an entity determines the primary beneficiary of a VIE.  This ASU is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted.  We are currently in the process of evaluating the impact, if any, this ASU will have on our condensed consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheets as a direct deduction from the associated debt liability. In August 2015, the FASB clarified the previous ASU and issued ASU No. 2015-15, Presentations and Subsequent Measurement of Debt Issuance Costs Associated With Lines of Credit Arrangements- Amendments to SEC Paragraphs Pursuant to Staff Announcements on June 18, 2015 EITF Meeting, which addresses the presentation of debt issuance costs related to line of credit arrangements. These updates are effective for interim and annual reporting periods beginning after December 15, 2015 and require retrospective application. The implementation of these updates is not expected to cause any material changes to our condensed consolidated financial statements other than the reclassification of certain debt issuance costs from assets to contra liabilities on our condensed consolidated balance sheets.  Debt issuance costs related to line of credit arrangements will remain classified as assets in accordance with ASU No. 2015-15. When these updates are implemented, deferred financing costs of $13,417 and $15,388 as of September 30, 2015 and December 31, 2014, respectively, will be reclassified from assets to the related debt obligations on our condensed consolidated balance sheets. 

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While this ASU specifically references contracts with customers, it also may apply to certain other transactions such as the sale of real estate or equipment. In July 2015, the FASB approved a one year deferral of the effective date for this ASU to interim and annual reporting periods beginning after December 15, 2017.  We are continuing to evaluate this guidance; however, we do not expect its adoption to have a material impact on our condensed consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts that would have been recorded in previous periods if the accounting had been completed at the acquisition date. This update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted.  The implementation of this update is not expected to have a material impact on our condensed consolidated financial statements.

Note 3.  Revenue Recognition

We report hotel operating revenues for managed hotels in our condensed consolidated statements of comprehensive income. We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided.

We recognize rental income from operating leases on a straight line basis over the term of the lease agreements except for one lease in which there is uncertainty regarding the collection of scheduled future rent increases.  Rental income includes $3,752 and $5,807 for the three and nine months ended September 30, 2015, respectively, and $553 and $1,659 for the three and nine months ended September 30, 2014, respectively, of adjustments necessary to record scheduled rent increases under certain of our leases, the deferred rent obligations under our TravelCenters of America LLC, or TA, agreements and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight line basis.  See Note 10 for further information regarding our TA agreements.  Due from related persons includes $25,474 and $20,493 and other assets, net, includes $1,728 and $1,373 of straight line rent receivables at September30, 2015 and December 31, 2014, respectively.

We determine percentage rent due to us under our leases annually and recognize it at year end when all contingencies have been met and the rent is earned. We had no deferred estimated percentage rent for the three and nine months ended September 30, 2015, respectively, and $557 and $2,129 of deferred estimated percentage rent for the three and nine months ended September 30, 2014, respectively.  In connection with our lease modification with TA in June 2015, we recorded $2,048 of percentage rent during the three months ended June 30, 2015.  See Note 10 for further information regarding these agreements.

We own all the capital expenditure reserves, or FF&E reserves, for our hotels. We do not report the amounts which are escrowed as FF&E reserves for our managed hotels as FF&E reserve income. We report deposits by our third party hotel tenants into the escrow accounts as FF&E reserve income.

Note 4.  Per Common Share Amounts

We calculate basic earnings per common share by dividing net income available for common shareholders by the weighted average number of common shares outstanding during the period.  We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method.  Unvested share awards and other potentially dilutive common shares, including contingently issuable common shares under the previous terms of our business management agreement with The RMR Group LLC (formerly known as Reit Management & Research LLC), or RMR LLC, if any, and the related impact on earnings, are considered when calculating diluted earnings per share. The following table provides a

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share:

	For the three months ended September 30,		For the nine months ended September 30,
	2015	2014	2015	2014
	(in thousands)
Weighted average common shares for basic earnings per share	151,359	149,665	150,476	149,616
Effect of dilutive securities:
Contingently issuable common shares	-	316	360	189
Unvested share awards	27	26	27	29
Weighted average common shares for diluted earnings per share	151,386	150,007	150,863	149,834

Note 5.  Shareholders’ Equity

Common Share Issuances and Repurchases

During the nine months ended September 30, 2015, we issued 63,119 of our common shares to RMR LLC as part of the business management fees payable by us under our business management agreement. See Note 10 for further information regarding this agreement.

On June 1, 2015, we granted 2,500 of our common shares valued at $30.59 per share, the closing price of our common shares on the New York Stock Exchange, or NYSE, on that day, to each of our five Trustees as part of their annual compensation.

On June 5, 2015, we issued 1,490,000 of our common shares in connection with our acquisition of shares of The RMR Group Inc. (formerly known as Reit Management & Research Inc.), or RMR Inc., as further described in Note 10.  RMR Inc. is the parent of RMR LLC, our manager.

On September 2, 2015, pursuant to our 2012 Equity Compensation Plan, we granted an aggregate of 76,250 of our common shares to our officers and certain employees of our manager, RMR LLC, valued at $25.66 per share, the closing price of our common shares on the NYSE on that day.

On September 24, 2015, we purchased an aggregate of 16,340 of our common shares for $25.62 per share, the closing price of our common shares on the NYSE on that day, from certain of our officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations associated with the vesting of awards of restricted common shares.

On September 28, 2015, we issued 2,500 of our common shares valued at $25.18 per share, the closing price of our common shares on the NYSE on that day, to our new Trustee as part of her annual compensation.

Distributions

On each of January 15, 2015, April 15, 2015, July 15, 2015 and October 15, 2015, we paid a $0.4453 per share distribution, or $5,166, to our Series D preferred shareholders.

On February 24, 2015, we paid a $0.49 per share distribution, or $73,466, to our common shareholders. On May 21, 2015, we paid a $0.50 per share distribution, or $74,981, to our common shareholders.  On August 19, 2015, we paid a $0.50 per share distribution, or $75,743, to our common shareholders.  On October 12, 2015, we declared a $0.50 per share

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

dividend, or $75,774, to our common shareholders of record on October 23, 2015.  We expect to pay this amount on or about November 19, 2015.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) represents the unrealized gain (loss) on the TA shares we own and our share of the comprehensive income (loss) of Affiliates Insurance Company, or AIC. See Note 10 for further information regarding these investments.

Note 6.  Indebtedness

Our principal debt obligations at September 30, 2015 were: (1) our $454,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) our $400,000 unsecured term loan; (3) an aggregate outstanding principal amount of $2,425,000 of public issuances of senior unsecured notes; and (4) an aggregate outstanding principal amount of $8,478 of public issuances of convertible senior unsecured notes. 

Our $750,000 unsecured revolving credit facility is available for general business purposes, including acquisitions.  The maturity date of our unsecured revolving credit facility is July 15, 2018 and, subject to the payment of an extension fee and meeting other conditions, we have an option to extend the stated maturity date by one year to July 15, 2019. We are required to pay interest on borrowings under our unsecured revolving credit facility at a rate of LIBOR plus a premium, which was 110 basis points at September 30, 2015. We also pay a facility fee on the total amount of lending commitments, which was 20 basis points per annum at September 30, 2015. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As of September 30, 2015, the annual interest rate payable on borrowings under our unsecured revolving credit facility was 1.29%. The weighted average annual interest rate for borrowings under our unsecured revolving credit facility was 1.30% and 1.28% for the three and nine months ended September 30, 2015, respectively, and 1.26% and 1.25% for the three and nine months ended September 30, 2014, respectively.  As of September 30, 2015 and November 8, 2015, we had $454,000 and $384,000 outstanding under our unsecured revolving credit facility, respectively.

Our $400,000 unsecured term loan, which matures on April 15, 2019, is prepayable without penalty at any time.  We are required to pay interest on the amount outstanding under our unsecured term loan at a rate of LIBOR plus a premium, which was 120 basis points at September 30, 2015.  The interest rate premium is subject to adjustment based on changes to our credit ratings. As of September 30, 2015, the annual interest rate for the amount outstanding under our unsecured term loan was 1.40%.The weighted average annual interest rate for borrowings under our unsecured term loan was 1.39% and 1.38% for the three and nine months ended September 30, 2015, respectively, and 1.35% and 1.36% for the three and nine months ended September 30, 2014, respectively.

Our credit agreement for our unsecured revolving credit facility and unsecured term loan also includes a feature under which maximum aggregate borrowings under our unsecured revolving credit facility and unsecured term loan may be increased up to $2,300,000 on a combined basis in certain circumstances. Our credit agreement for our unsecured revolving credit facility and unsecured term loan and our unsecured notes indenture and its supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business manager. Our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes indenture and its supplements also contain a number of covenants, including covenants that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes indenture and its supplements at September 30, 2015.

Note 7.  Real Estate Properties

At September 30, 2015, we owned 302 hotels and 193 travel centers which are operated under 14 operating agreements.

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

During the nine months ended September 30, 2015, we funded $179,132 for improvements to certain of our properties which, pursuant to the terms of our management and lease agreements with our hotel managers and tenants, resulted in increases in our contractual annual minimum returns and rents of $14,365.  See Notes 10 and 11 for further information about our management and lease agreements and our fundings of improvements to certain of our properties.

During the nine months ended September 30, 2015, we acquired 11 hotels, a land parcel adjacent to one of our hotels, 14 travel centers and certain assets at 11 travel centers we lease to TA.  Our allocation of the purchase price of these acquisitions based on the estimated fair value of the acquired assets is presented in the table below.  The allocations of purchase prices are based on preliminary estimates and may change upon completion of third party appraisals.

Acquisition date	Location		Purchase price (1)		Land		Land improvements		Building and improvements		Furniture, fixtures and equipment		Intangible assets
3/16/2015	Rosemont, IL (2) (4)	$	35,500	$	2,375	$	-	$	31,401	$	1,463	$	261
4/28/2015	Ft. Lauderdale, FL (3) (5)		750		750		-		-		-		-
5/15/2015	Denver, CO (2) (6)		77,250		8,193		-		61,185		7,872		-
6/1/2015	Various (3) (7)		227,877		26,286		67,160		134,389		42		-
7/23/2015	Various (2) (8)		85,000		13,165		-		64,338		7,497		-
9/23/2015	Various (3) (7)		51,506		9,165		21,266		21,075		-		-
		$	477,883	$	59,934	$	88,426	$	312,388	$	16,874	$	261

(1) Excludes acquisition related costs.

(2) We accounted for these transactions as business combinations.  The pro forma impact of including the results of operations of these acquisitions from the beginning of the year is not material to our condensed consolidated financial statements.

(3) We accounted for these transactions as asset acquisitions.

(4) On March 16, 2015, we acquired a 300 room hotel located in Rosemont, IL for $35,500, excluding acquisition related costs.  We added this Holiday Inn and Suites® branded hotel to our management agreement with InterContinental Hotels Group, plc, or InterContinental.  See Note 11 for further information regarding our InterContinental agreement. 

(5) On April 28, 2015, we acquired a land parcel adjacent to one of our hotels in Fort Lauderdale, FL for $750, excluding acquisition related costs. See Note 10 for further information regarding this acquisition.

(6) On May 15, 2015, we acquired a 364 room full service hotel located in Denver, CO for $77,250, excluding acquisition related costs.  We added this Crowne Plaza® branded hotel to our management agreement with InterContinental.  See Note 11 for further information regarding our InterContinental agreement.

(7) On June 1, 2015, we entered agreements with TA to acquire and leaseback 14 travel centers it owned and certain assets it owned at11 properties we lease to TA for an aggregate purchase price of approximately $279,383.  During June 2015, we acquired 12 of these travel centers and certain assets at10 properties TA leases from us for an aggregate purchase price of $227,877.  On September 23, 2015, we acquired the remaining two travel centers and certain assets at a property TA leases from us for an aggregate purchase price of $51,506.  Pursuant to these agreements, we also agreed to acquire from, and leaseback to, TA five travel centers it is developing for purchase prices equal to TA’s development costs, which are estimated to be approximately $118,000.  The acquisition of these five travel centers is expected to occur as development of these travel centers is completed before June 30, 2017.  See Note 10 for further information regarding this transaction and our TA agreements. 

(8) On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for $85,000, excluding acquisition related costs.  We converted these hotels to Sonesta ES Suites® branded hotels and added them to our management agreement with Sonesta International Hotels Corporation, or Sonesta.  See Note 10 for further information regarding this transaction and our Sonesta agreement.

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

On June 9, 2015, we sold five TA branded travel centers to TA for $45,042.  As a result of this sale, we recorded an $11,015 gain on sale of real estate in the three months ended June 30, 2015.  See Note 10 for further information regarding this transaction and our TA agreements.

On October 27, 2015, we entered an agreement to acquire two extended stay hotels with 262 suites located in Cleveland and Westlake, OH for an aggregate purchase price of $12,000.  We plan to convert these hotels to Sonesta ES Suites® and add them to our management agreement with Sonesta.  See Note 10 for further information regarding this transaction and our Sonesta agreement.

On October 30, 2015, we acquired the land and certain improvements at a travel center located in Waterloo, NY that we leased from a third party and subleased to TA for $15,000, excluding acquisition related costs.

Note 8. Income Taxes

We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, and accordingly are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements.  We are subject to income tax in Canada, Puerto Rico and certain states despite our REIT status.  Also, we lease our managed hotels to our wholly owned TRSs that, unlike most of our other subsidiaries, file separate consolidated federal corporate income tax returns and are subject to federal, state and foreign income taxes.  Our consolidated income tax provision included in our condensed consolidated statements of comprehensive income includes the income tax provision related to the operations of our TRSs and certain state and foreign income taxes incurred by us despite our REIT status.

During the three and nine months ended September 30, 2015, we recognized income tax expense of $514 and $1,445, respectively, which includes $79 and $155, respectively, of foreign taxes and$435 and $1,290, respectively, of state taxes.  During the three and nine months ended September 30, 2014, we recognized income tax expense (benefit)of $39 and $1,110,  respectively, which includes $16 and $86, respectively, of foreign taxes,$23 and $1,046, respectively, of state taxes and zero and ($22), respectively, of federal taxes.

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

Note 9.  Segment Information

	For the Three Months Ended September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	437,171	$	-	$	-	$	437,171
Rental income		8,199		65,548		-		73,747
FF&E reserve income		968		-		-		968
Total revenues		446,338		65,548		-		511,886
Hotel operating expenses		308,603		-		-		308,603
Depreciation and amortization		54,100		30,161		-		84,261
General and administrative		-		-		19,831		19,831
Acquisition related costs		851		-		-		851
Total expenses		363,554		30,161		19,831		413,546
Operating income (loss)		82,784		35,387		(19,831)		98,340
Interest income		-		-		11		11
Interest expense		-		-		(36,628)		(36,628)
Income (loss) before income taxes and equity in losses of an investee		82,784		35,387		(56,448)		61,723
Income tax expense		-		-		(514)		(514)
Equity in losses of an investee		-		-		(24)		(24)
Net income (loss)	$	82,784	$	35,387	$	(56,986)	$	61,185
	For the Nine Months Ended September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	1,243,744	$	-	$	-	$	1,243,744
Rental income		24,339		183,222		-		207,561
FF&E reserve income		3,159		-		-		3,159
Total revenues		1,271,242		183,222		-		1,454,464
Hotel operating expenses		870,689		-		-		870,689
Depreciation and amortization		159,421		84,391		-		243,812
General and administrative		-		-		53,820		53,820
Acquisition related costs		1,986		-		-		1,986
Total expenses		1,032,096		84,391		53,820		1,170,307
Operating income (loss)		239,146		98,831		(53,820)		284,157
Interest income		-		-		32		32
Interest expense		-		-		(107,918)		(107,918)
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate		239,146		98,831		(161,706)		176,271
Income tax expense		-		-		(1,445)		(1,445)
Equity in earnings of an investee		-		-		71		71
Income (loss) before gain on sale of real estate		239,146		98,831		(163,080)		174,897
Gain on sale of real estate		-		11,015		-		11,015
Net income (loss)	$	239,146	$	109,846	$	(163,080)	$	185,912
	As of September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Total assets	$	3,903,957	$	2,425,709	$	164,884	$	6,494,550

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

	For the Three Months Ended September 30, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	394,973	$	-	$	-	$	394,973
Rental income		8,088		55,749		-		63,837
FF&E reserve income		829		-		-		829
Total revenues		403,890		55,749		-		459,639
Hotel operating expenses		279,560		-		-		279,560
Depreciation and amortization		54,024		25,625		-		79,649
General and administrative		-		-		16,798		16,798
Acquisition related costs		14		-		-		14
Total expenses		333,598		25,625		16,798		376,021
Operating income (loss)		70,292		30,124		(16,798)		83,618
Interest income		-		-		13		13
Interest expense		-		-		(34,304)		(34,304)
Loss on early extinguishment of debt						(129)		(129)
Income (loss) before income taxes and equity in earnings of an investee		70,292		30,124		(51,218)		49,198
Income tax expense		-		-		(39)		(39)
Equity in earnings of an investee		-		-		38		38
Net income (loss)	$	70,292	$	30,124	$	(51,219)	$	49,197
	For the Nine Months Ended September 30, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	1,112,157	$	-	$	-	$	1,112,157
Rental income		24,532		166,427		-		190,959
FF&E reserve income		2,673		-		-		2,673
Total revenues		1,139,362		166,427		-		1,305,789
Hotel operating expenses		780,955		-		-		780,955
Depreciation and amortization		160,402		76,297		-		236,699
General and administrative		-		-		41,429		41,429
Acquisition related costs		237		-		-		237
Total expenses		941,594		76,297		41,429		1,059,320
Operating income (loss)		197,768		90,130		(41,429)		246,469
Interest income		-		-		63		63
Interest expense		-		-		(104,101)		(104,101)
Loss on early extinguishment of debt		-		-		(855)		(855)
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate		197,768		90,130		(146,322)		141,576
Income tax expense		-		-		(1,110)		(1,110)
Equity in earnings of an investee		-		-		66		66
Income (loss) before gain on sale of real estate		197,768		90,130		(147,366)		140,532
Gain on sale of real estate		130		-		-		130
Net income (loss)	$	197,898	$	90,130	$	(147,366)	$	140,662
	As of December 31, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Total assets	$	3,748,062	$	2,194,682	$	39,818	$	5,982,562

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

Note 10. Related Person Transactions

We have relationships and historical and continuing transactions with TA, RMR LLC, RMR Inc., Sonesta and others related to them, including other companies to which RMR LLC provides management services and which have trustees, directors and officers who are also trustees, directors or officers of us, RMR Inc. or RMR LLC. For further information about these and other such relationships and certain other related person transactions, please refer to our 2014 Annual Report and our Current Reports on Form 8-K filed with the Securities and Exchange Commission, or SEC, on June 5, 8, 12, 22 and 25, July 28 and September 23, 2015.  

TA: TA was formerly our 100% owned subsidiary until it was spun out to our shareholders in 2007. As of September 30, 2015, we owned 3,420,000 of TA’s common shares, representing approximately 8.9% of TA’s outstanding common shares, and we are TA’s largest shareholder.  TA is our largest tenant and property operator.

On June 1, 2015, we entered a transaction agreement, or the TA Transaction Agreement, with TA, pursuant to which, among other things, (i) we and TA agreed to expand and subdivide the lease pursuant to which we then leased to TA 144 properties that TA primarily operates under the “TravelCenters of America,” “TA” and related brand names, which we historically referred to as our TA No. 1 agreement and which we refer to in this Note as the Prior TA Agreement, into four amended and restated leases, or the New TA Agreements, (ii) we agreed to purchase from TA 14 travel centers and certain assets it owned at 11 properties we lease to TA for an aggregate of $279,383 and we agreed to leaseback those properties and assets to TA under the New TA Agreements, (iii) TA agreed to purchase from us five travel centers that we then leased to TA under the Prior TA Agreement for an aggregate of $45,042 and (iv) we agreed to purchase from TA five travel centers upon the completion of their development at a purchase price equal to their development costs, including the cost of the land, which costs are estimated to be not more than $118,000 in the aggregate and we agreed to leaseback these development properties to TA under the New TA Agreements. The terms of the TA Transaction Agreement were approved by special committees of our Independent Trustees and TA’s independent directors, none of whom are directors or trustees of the other company.  Each special committee was represented by separate counsel.  As of September 30, 2015, the following transactions pursuant to the TA Transaction Agreement were completed:

· We entered into the four New TA Agreements with a subsidiary of TA, or our TA No. 1 agreement, TA No. 2 agreement, TA No. 3 agreement and TA No. 4 agreement with expirations in 2029, 2028, 2026 and 2030, respectively.  Each new TA Agreement grants TA two renewal options of 15 years each. Percentage rent, which totaled $2,902 in 2014 under the Prior TA Agreement, was incorporated into the annual minimum rent under the New TA Agreements and was otherwise eliminated for the remainder of 2015; thereafter, percentage rent will be equal to 3% of the excess of gross non-fuel revenues over gross non-fuel revenues in 2015.  In the case of the five properties to be developed by TA and sold to us, the base year for percentage rent will be the calendar year in which the third anniversary of the completion of development of the property occurs and percentage rent will not apply to those properties until the next succeeding year.  The deferred rent obligation of $107,085, which was due December 31, 2022, was allocated among the New TA Agreements and the due dates were extended to the end of the initial term of each respective New TA Agreement.

· We purchased from TA, for $279,383, 14 travel centers it owned and certain assets it owned at 11 properties TA leased from us. We leased back these properties to TA under the New TA Agreements.  The annual minimum rent payable to us increased by $24,027 as a result of the completion of this purchase and sale leaseback.

· TA purchased from us, for $45,042, five travel centers that we previously leased to TA under the Prior TA Agreement.  These properties were subleased by TA to its franchisees.  TA’s annual minimum rent decreased by $3,874 as a result of our completion of the sale of these properties.  We recognized a gain of $11,015 on these sales.

· We and TA entered into an amendment to the lease that we have historically referred to as our TA No. 2 agreement, and which we now refer to as our TA No. 5 agreement.  Among other things, this amendment eliminated percentage

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

rent payable on fuel, which, in 2014 was nominal but was not paid by TA because we had previously waived payment of the first $2,500 of percentage rent due under the TA No. 5 agreement.

As of September 30, 2015, we leased to TA a total of 153 travel centers under the New TA Agreements and 40 travel centers under the TA No. 5 agreement.  As of September 30, 2015, the number of travel centers leased, the term, the annual minimum rent and deferred rent balances under our five leases with TA were as follows:

	Number of Sites	Initial Term End (1)		Minimum Annual Rent as of September 30, 2015		Deferred Rent (2)
TA No. 1 Agreement	39	December 31, 2029	$	48,295	$	27,421
TA No. 2 Agreement	38	December 31, 2028		46,765		29,107
TA No. 3 Agreement	38	December 31, 2026		49,613		29,324
TA No. 4 Agreement	38	December 31, 2030		46,297		21,233
TA No. 5 Agreement	40	June 30, 2024		62,949		42,915
	193		$	253,919	$	150,000

(1) TA has two renewal options of fifteen years each under each of the leases.

(2) The deferred rent obligation is subject to acceleration at our option upon an uncured default under our TA agreements or a change in control of TA, each as provided under the leases. 

We recognized rental income of $65,548 and $55,749 for the three months ended September 30, 2015 and 2014, respectively, and $181,174 and $166,427 for the nine months ended September 30, 2015 and 2014, respectively, under our leases with TA.  On June 9, 2015, we began recognizing the deferred rent obligation under our TA agreements as rental income on a straight line basis over the remaining initial terms of the respective leases because we believe thefuture payment of these amounts to us by TA is reasonably assured.  Rental income for the three months ended September 30, 2015 and 2014 includes $3,647 and $422, respectively, and for the nine months ended September 30, 2015 and 2014 includes $5,452 and $1,266, respectively, of adjustments necessary to record the scheduled rent increase under the Prior TA Agreement, the deferred rent obligations under our TA agreements and the estimated future payment to us by TA for the cost of removing underground storage tanks on a straight line basis.  As of September 30, 2015 and December 31, 2014, we had accounts receivable from TA of $46,465 and $40,253, respectively, which amounts are included in due from related persons on our condensed consolidated balance sheets.

Under our leases with TA, we funded $70,150 and $41,961 for the nine months ended September 30, 2015 and 2014, respectively, for qualifying capital improvements at the leased travel centers and, as a result, TA's annual minimum rent payable to us increased by approximately $5,963, and $3,567, respectively.

We waived $271 and $126 of percentage rent under the TA No. 5 agreement for the three months ended September 30, 2015 and 2014, respectively, and $819 and $372 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, we have cumulatively waived $1,826 of the $2,500 of percentage rent we previously agreed to waive. The total amount of percentage rent (which is net of the waived amount) that we recognized during the three months ended September 30, 2015 and 2014 was zero and $557, respectively, and during the nine months ended September 30, 2015 and 2014 was $2,048 and $2,129, respectively.

In October 2015, we completed the purchase of the land and certain improvements at a travel center we then leased from a third party and subleased to TA located in Waterloo, NY for $15,000.  Upon this acquisition, the land and improvements were directly leased to TA under our TA No. 5 agreement and the annual minimum rent increased by $1,275.

Acquisition of Interest in our Manager:   On June 5, 2015, we and three other REITs to which RMR LLC provides management services – Government Properties Income Trust, or GOV, Select Income REIT, or SIR, Senior Housing Properties Trust, or SNH, and collectively with GOV and SIR, the Other REITs – participated in a transaction, or the Up-C Transaction, by which we and the Other REITs each acquired an ownership interest in RMR Inc.

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

The Up-C Transaction was completed pursuant to a transaction agreement by and among us, our manager, RMR LLC, its then sole member, Reit Management & Research Trust, or RMR Trust, and RMR Inc. and similar transaction agreements that each Other REIT entered with RMR LLC, RMR Trust and RMR Inc. RMR Trust is owned by our Managing Trustees, Barry and Adam Portnoy. Pursuant to these transaction agreements: we contributed to RMR Inc. 1,490,000 of our common shares and $12,622 in cash; GOV contributed to RMR Inc. 700,000 of its common shares and $3,917 in cash;  SIR contributed to RMR Inc. 880,000 of its common shares and $15,880 in cash; SNH contributed to RMR Inc. 2,345,000 of its common shares and $13,967 in cash; RMR Trust contributed to RMR Inc. $11,520 in cash, which RMR Inc. contributed to RMR LLC; RMR LLC issued 1,000,000 of its class B membership units to RMR Inc.; RMR Inc. issued 5,019,121 shares of its class A common stock to us, 1,541,201 shares of its class A common stock to GOV, 3,166,891 shares of its class A common stock to SIR, 5,272,787 shares of its class A common stock to SNH and 1,000,000 shares of its class B-1 common stock and 15,000,000 shares of its class B-2 common stock to RMR Trust; RMR Trust delivered 15,000,000 of the 30,000,000 class A membership units of RMR LLC which RMR Trust then owned to RMR Inc.; and RMR Inc. delivered to RMR Trust our common shares, the common shares of the Other REITs and the cash which had been contributed by us and the Other REITs to RMR Inc.

The class A common stock and class B-1 common stock of RMR Inc. share ratably as a single class in dividends and other distributions of RMR Inc. when and if declared by the board of directors of RMR Inc. and have the same rights in a liquidation of RMR Inc. The class B-1 common stock of RMR Inc. is convertible into class A common stock of RMR Inc. on a 1:1 basis. The class A common stock of RMR Inc. has one vote per share. The class B-1 common stock of RMR Inc. has 10 votes per share. The class B-2 common stock of RMR Inc. has no economic interest in RMR Inc., but has 10 votes per share and is paired with the class A membership units of RMR LLC owned by RMR Trust. The class A membership units of RMR LLC owned by RMR Trust are required to be redeemed by RMR LLC upon request by RMR Trust for class A common stock of RMR Inc. on a 1:1 basis, or if RMR Inc. elects, cash. Under the governing documents of RMR Inc., upon the redemption of a class A membership unit of RMR LLC by RMR Trust, the class B-2 common stock of RMR Inc. “paired” with an equal number of class A membership units are cancelled for no additional consideration.

As part of the Up-C Transaction and concurrently with entering into the transaction agreements, on June 5, 2015:

· We entered into an amended and restated business management agreement and an amended and restated property management agreement with RMR LLC. The amendments made by these agreements are described below in this Note under “Amendment and Restatement of Management Agreements with RMR LLC.” Each Other REIT also entered amended and restated business and property management agreements with RMR LLC which made similar amendments to their management agreements with RMR LLC.

· We entered into a registration rights agreement with RMR Inc. covering the class A common stock of RMR Inc. that we received in the Up-C Transaction, pursuant to which we received demand and piggyback registration rights, subject to certain limitations. Each Other REIT entered into a similar registration rights agreement with RMR Inc.

· We entered into a lock up and registration rights agreement with RMR Trust and Barry and Adam Portnoy pursuant to which RMR Trust and Barry and Adam Portnoy agreed not to transfer the 1,490,000 of our common shares RMR Trust received in the Up-C Transaction for a period of 10 years and we granted them certain registration rights, subject to certain limited exceptions. Each Other REIT also entered into a similar lock up and registration rights agreement with RMR Trust and Barry and Adam Portnoy.

As a result of the Up-C Transaction: RMR LLC became a subsidiary of RMR Inc.; RMR Inc. became the managing member of RMR LLC; through our ownership of class A common stock of RMR Inc., we currently own an indirect 16.2% economic interest in RMR LLC; through their ownership of class A common stock of RMR Inc., GOV, SIR and SNH currently have an indirect 5.0%, 10.2% and 17.0% economic interest in RMR LLC, respectively; and RMR Trust through its ownership of class B-1 common stock of RMR Inc., class B-2 common stock of RMR Inc. and class A membership units of

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

RMR LLC currently directly and indirectly has a 51.6% economic interest in RMR LLC and controls 91.4% of the voting power of outstanding capital stock of RMR Inc.

Pursuant to the transaction agreements, we and each Other REIT agreed to distribute half of the shares of class A common stock of RMR Inc. received in the Up-C Transaction to our respective shareholders as a special distribution, and RMR Inc. agreed to facilitate this distribution by filing a registration statement with the SEC to register the shares of class A common stock of RMR Inc. to be distributed and by seeking a listing of those shares on a national stock exchange upon the registration statement being declared effective by the SEC.

The distribution of shares of class A common stock of RMR Inc. that we and the Other REITs have agreed to make to our and the Other REITs’ shareholders will be made only after a registration statement, including a prospectus, is declared effective by the SEC.

Amendment and Restatement of Management Agreements with RMR LLC: As part of the Up-C Transaction, on June 5, 2015, we and RMR LLC entered into an amended business management agreement, which amended and restated our previous business management agreement with RMR LLC and an amended property management agreement, which amended and restated our previous property management agreement with RMR LLC. Our amended business management agreement and amended property management agreement are referred to together in this Note as our amended management agreements. Our amended management agreements were effective as of June 5, 2015.

Our amended management agreements have terms that end on December 31, 2035, and automatically extend on December 31st of each year for an additional year, so that the terms of the agreements thereafter end on the 20th anniversary of the date of the extension. We have the right to terminate each amended management agreement: (i) at any time on 60 days’ written notice for convenience, (ii) immediately upon written notice for cause, as defined therein, (iii) on 60 days’ written notice given within 60 days after the end of any calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. RMR LLC has the right to terminate the amended management agreements for good reason, as defined therein.

If we terminate one or both of our amended management agreements for convenience, or if RMR LLC terminates one or both of our amended management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated amended management agreement(s) for the remaining term. If we terminate one or both of our amended management agreements for a performance reason, as defined therein, we have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a remaining term of 10 years.  We are not required to pay any termination fee if we terminate one or both of our amended management agreements for cause or as a result of a change of control of RMR LLC.

Accounting for Investment in RMR Inc.: On June 5, 2015, we acquired 5,019,121 shares of class A common stock of RMR Inc. for $55,922, excluding acquisition related costs.  We have concluded, for accounting purposes, that the consideration paid for this investment in RMR Inc.’s shares of class A common stock represented a discount to the fair value of these shares.  We account for this investment under the cost method of accounting and have recorded this investment at its estimated fair value of $129,722 as of June 5, 2015 using Level 3 inputs as defined in the fair value hierarchy under GAAP.  As a result, we recorded a liability for the amount by which the estimated fair value exceeded the price we paid for these shares and which amount we are amortizing as described below.  As of September 30, 2015, the unamortized balance of this liability was $72,658 and it is included in accounts payable and other liabilities in our condensed consolidated balance sheets.  Our investment is included in other assets in our condensed consolidated balance sheets and the carrying value of our investment was $132,296, including acquisition related costs, as of September 30, 2015.  We believe the carrying value of our investment in RMR Inc. as of September 30, 2015 approximates its estimated fair value for accounting purposes. The liability related to the acquisition of these shares is being amortized on a straight line basis over the 20 year life of the business and property management agreements with RMR LLC as a reduction to business management fees and property management fees, which are included in general and administrative and hotel operating expenses, respectively, in our condensed consolidated statements of comprehensive income.  Amortization of the liability, included in general and administrative expense for the three and nine months ended September 30, 2015, totaled $911 and $1,142, respectively.

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Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

RMR LLC Management Fees and Reimbursements: We recognized business and property management feesof $17,392 and $14,309 for the three months ended September 30, 2015 and 2014, respectively, and $45,856 and $34,896 for the nine months ended September 30, 2015 and 2014, respectively. The business management fees for the three and nine months ended September 30, 2015 include estimated 2015 incentive fees of $8,561 and $17,383, respectively, based on our common share total return as of September 30, 2015.  The actual amount of incentive fees payable to RMR LLC for 2015, if any, will be based on our common share total return for the two year period ended December 31, 2015, and will be payable in January 2016.  Although no incentive fee was ultimately payable to RMR LLC for 2014, business management fees we recognized for the three and nine months ended September 30, 2014 include $4,778 and $6,951, respectively, of then estimated 2014 incentive fees that would have been payable in common shares after the year end 2014 based on our common share total return as of those respective 2014 periods.

The business management fees we recognized for the 2015 and 2014 periods are included in general and administrative expenses in our condensed consolidated financial statements.  The property management amounts are included in hotel operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements and are comprised of fees we recognized under both our previous property management agreement and our amended property management agreement.  In accordance with the terms of our previous business management agreement, we issued 52,366 and 97,816 of our common shares to RMR LLC for the nine months ended September 30, 2015 and 2014, respectively, as payment for portions of the base business management fees we recognized for those periods.  Our amended business management agreement requires that 100% of the management fee due to RMR LLC be paid by us in cash.

Pursuant to our previous and amended management agreements with RMR LLC, we are responsible for paying all of the property level operating costs at the one office building we own which is attached to a hotel we own.  These property level costs include certain payroll and related costs, which costs are generally incorporated into rents charged to our office tenants at this building.  The total of the property management related reimbursements we paid to RMR LLC was $37 and $19 for the three months ended September 30, 2015 and 2014, respectively, and these costs are included in hotel operating expenses in our condensed consolidated financial statements for these periods.  In addition, we have historically awarded share grants to certain RMR LLC employees under our equity compensation plan and we accrue estimated amounts for such share grants throughout each year based upon historical practices.  In September 2015 and 2014, we made annual share grants to RMR LLC employees of 76,250 and 79,725, of our common shares, respectively.  In September 2015, we purchased 16,340 of our common shares, at the closing prices for our common shares on the NYSE on the date of purchase, from certain of our officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of restricted common shares.  In addition, under our business management agreement we reimburse RMR LLC for our allocable costs of internal audit services. The amounts accrued for share grants to RMR LLC employees and internal audit costs were $776 and $973 for the three months ended September 30, 2015 and 2014, respectively, and $2,283 and $2,199 for the nine months ended September 30, 2015 and 2014, respectively, and these amounts are included in our general and administrative expenses in our condensed consolidated financial statements for these periods.

Lease with RMR LLC: We lease office space to RMR LLC in the office building component of our property in Baltimore, MD.  Pursuant to our lease agreement with RMR LLC, we recognized rental income from RMR LLC for leased office space of approximately $9 and $26 for the three and nine months ended September 30, 2015, respectively.

Sonesta:  Sonesta is owned by our Managing Trustees, Barry and Adam Portnoy.  As of September 30, 2015, Sonesta was managing 31 of our hotels pursuant to long term management agreements.  Pursuant to these management agreements, we incurred management, system, reservation fees and reimbursement of certain guest loyalty, marketing program and third party reservation transmission expenses payable to Sonesta of $5,742 and $4,722 for the three months ended September 30, 2015 and 2014, respectively, and $16,143 and $13,052 for the nine months ended September 30, 2015 and 2014, respectively.  These amounts are included in hotel operating expenses in our condensed consolidated statements of comprehensive income.  In addition, we also incurred procurement and construction supervision fees payable to Sonesta in connection with capital expenditures at our hotels managed by Sonesta of $496 and $1,053 for the three months ended

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HOSPITALITY PROPERTIES TRUST

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

September 30, 2015 and 2014, respectively, and $1,172 and $2,803 for the nine months ended September 30, 2015 and 2014, respectively.  These amounts have been capitalized in our condensed consolidated financial statements. 

On April 28, 2015, we acquired a building and land parcel adjacent to a hotel we own which is managed by Sonesta for $750, excluding acquisition related costs.  This land was added to that hotel property and constitutes invested capital under our Sonesta agreement.

On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for $85,000, excluding acquisition related costs.  In connection with this acquisition, we entered into a long term management agreement for Sonesta to manage these hotels.  The terms of the management agreement are substantially consistent with the terms of our other management agreements with Sonesta for extended stay hotels, and this management agreement was combined with our other Sonesta hotel management agreements under our existing pooling agreement with Sonesta.  We expect to invest approximately $45,000 to substantially renovate these hotels in connection with their conversion to the upscale, extended stay Sonesta ES Suites® hotel brand.

On October 27, 2015, we entered into an agreement to acquire two extended stay hotels with 262 suites located in Cleveland and Westlake, OH for $12,000.  We intend to rebrand these hotels as Sonesta ES Suites® hotels.  This acquisition is subject to completion of diligence and other customary closing conditions and we can provide no assurance that we will acquire these properties or that the terms of the acquisition will not change.  We expect to enter into a hotel management agreement with Sonesta for these properties on terms consistent with our other applicable hotel management agreements with Sonesta for limited service hotels and to add the management agreement to our Sonesta agreement.

AIC:  As of September 30, 2015, our investment in AIC had a carrying value of $6,814, which amount is included in other assets on our condensed consolidated balance sheets.  We recognized income (loss) of ($24) and $38 related to our investment in AIC for the three months ended September 30, 2015 and 2014, respectively, and $71 and $66 for the nine months ended September 30, 2015 and 2014, respectively.  Our other comprehensive income includes unrealized gains (losses) on securities held for sale which are owned by AIC of ($72) and ($33) for the three months ended September 30, 2015 and 2014, respectively, and ($91) and $8 for the nine months ended September 30, 2015 and 2014, respectively.

In June 2015, we and the other shareholders of AIC renewed our participation in an insurance program arranged by AIC.  In connection with that renewal, we purchased a three-year combined property insurance policy providing $500,000 of coverage annually with the premium to be paid annually and a one year combined policy providing terrorism coverage of $200,000 for our properties.  We paid AIC an aggregate annual premium, including taxes and fees, of approximately $2,442 in connection with these policies for the policy year ending June 30, 2016, which amount may be adjusted from time to time as we acquire and dispose of properties that are included in this insurance program. 

Directors’ and Officers’ Liability Insurance

In August 2015, we extended through September 2017 our combined directors' and officers' insurance policy with RMR LLC and five other companies managed by RMR LLC that provides $10,000 in aggregate primary coverage.  At that time, we also extended through September 2016 our separate additional directors' and officers' liability insurance policies that provide $20,000 of aggregate excess coverage plus $5,000 of excess non-indemnifiable coverage.  The total premium payable by us for these extensions was approximately $463.

Note 11. Hotel Management Agreements and Leases

As of September 30, 2015, 299 of our hotels are leased to our TRSs and managed by independent hotel operating companies and three are leased to third parties.

Marriott No. 1 agreement. Our management agreement with Marriott International, Inc., or Marriott, for 53 hotels provides that as of September 30, 2015 we are to be paid an annual minimum return of $68,277 to the extent that gross revenues of the hotels, after payment of hotel operating expenses and funding of the FF&E reserve, are sufficient to do so. 

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HOSPITALITY PROPERTIES TRUST

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

We do not have any security deposits or guarantees for our minimum returns from the 53 hotels included in our Marriott No. 1 agreement.  Accordingly, the minimum returns we receive from these hotels managed by Marriott are limited to available hotel cash flows after payment of operating expenses and funding of the FF&E reserve. Marriott’s management and incentive fees are only earned after we receive our minimum returns.  We realized minimum returns of $17,046 and $16,938 during the three months ended September 30, 2015 and 2014, respectively, and minimum returns of $51,080 and $50,745 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  We also realized additional returns of $3,149 during the three and nine months ended September 30, 2015, which represents our share of hotel cash flows in excess of the minimum returns due for the period. 

We funded $3,005 for capital improvements at certain of the hotels included in our Marriott No. 1 agreement during the nine months ended September 30, 2015. We currently expect to fund $1,000 for capital improvements during the remainder of 2015 under this agreement. As we fund these improvements, the annual minimum returns payable to us increase by 10% of the amounts funded.

Marriott No. 234 agreement.  Our management agreement with Marriott for 68 hotels provides that as of September 30, 2015 we are to be paid an annual minimum return of $106,243.  We realized returns of $26,553 and $29,232 during the three months ended September 30, 2015 and 2014, respectively, and returns of $79,586 and $79,368 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  Pursuant to our Marriott No. 234 agreement, Marriott has provided us with a security deposit to cover minimum return payment shortfalls, if any.  During the three and nine months ended September 30, 2015, our available security deposit was replenished by $3,658 and $7,389, respectively, from the hotel cash flows in excess of the minimum returns due for the period.  The available balance of this deposit was $7,389 as of September 30, 2015.  Pursuant to our Marriott No. 234 agreement, Marriott has also provided us with a limited guarantee which expires in 2019 for shortfalls up to 90% of our minimum returns, after the available security deposit has been depleted.  Marriott was not required to make any guarantee payments to us during the three and nine months ended September 30, 2015, because the hotels generated net operating results in excess of the guarantee threshold amount (90% of the minimum returns due to us).  The available balance of the guarantee was $30,672 as of September 30, 2015. 

We funded $3,500 for capital improvements at certain of the hotels included in our Marriott No. 234 agreement during the nine months ended September 30, 2015. As we funded these improvements, the annual minimum returns payable to us increase by 9% of the amounts funded.  We currently do not expect to make any fundings for capital improvements during the remainder of 2015 under this agreement.

Marriott No. 5 agreement. We lease one hotel in Kauai, Hawaii to Marriott.  This lease is guaranteed by Marriott and we realized $2,529 and $2,501 of rent for this hotel during the three months ended September 30, 2015 and 2014, respectively, and $7,587 and $7,503 of rent during the nine months ended September 30, 2015 and 2014, respectively.  The guarantee provided by Marriott with respect to this leased hotel is unlimited.

InterContinental agreement. Our management agreement with InterContinental for 93 hotels provides that as of September 30, 2015, we are to be paid annual minimum returns and rents of $149,778.  We realized minimum returns and rents of $37,444 and $34,875 during the three months ended September 30, 2015 and 2014, respectively, and minimum returns and rents of $109,461 and $104,624 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  We also realized additional returns of $2,607 and $5,784 under this agreement during the three and nine months ended September 30, 2015, respectively, from the hotel cash flows in excess of our minimum payments due for the periods.  Pursuant to our InterContinental agreement, InterContinental has provided us with a security deposit to cover minimum payment shortfalls, if any.  During the three and nine months ended September 30, 2015, our available security deposit was replenished by $4,992 and $12,709, respectively, from the hotel cash flows in excess of the minimum payments due for the period.The available balance of this security deposit was $45,675 as of September 30, 2015.

Under this agreement, InterContinental is required to maintain a minimum security deposit of $37,000. In January 2014, we entered into a letter agreement with InterContinental under which the minimum security deposit balance required to be maintained during 2015 will be reduced by two dollars for every dollar of additional security deposit InterContinental provides to us.  During the first quarter of 2015, InterContinental provided us $2,772 of additional security deposits, which

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HOSPITALITY PROPERTIES TRUST

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

reduced the minimum security deposit amount required to $31,456. We refunded the additional security deposit to InterContinental in July 2015. 

On each of March 16, 2015 and May 15, 2015, we amended our management agreement with InterContinental in connection with our acquisitions of two hotels. As a result of the amendments, the annual minimum returns due to us increased by an aggregate of 8% of our investment in the two hotels. 

We currently expect to fund $34,750 for capital improvements to certain hotels under our InterContinental agreement during the remainder of 2015 and in 2016. We did not make any fundings for capital improvements to these hotels during the nine months ended September 30, 2015.  As we fund these improvements, the annual minimum returns payable to us increase by 8% of the amounts funded.

Sonesta agreement. Our management agreement with Sonesta provides that we are to be paid an annual minimum return equal to 8% of our invested capital, as defined in the management agreement ($81,433 as of September 30, 2015), to the extent that gross revenues of the hotels, after payment of hotel operating expenses and certain fees to Sonesta, are sufficient to do so.  We do not have any security deposits or guarantees for our hotels managed by Sonesta.  Accordingly, the returns we receive from hotels managed by Sonesta are limited to available hotel cash flows after payment of operating expenses. Sonesta’s incentive management fees, but not its other fees, are only earned after we receive our minimum returns. We realized returns of $13,186 and $8,424 during the three months ended September 30, 2015 and 2014, respectively, and returns of $39,985 and $21,724 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.

Our Sonesta agreement does not require FF&E escrow deposits.  Under our Sonesta agreement, we are required to fund capital expenditures made at our hotels.  We funded $42,870 for renovations and other capital improvements to hotels included in our Sonesta agreement during the nine months ended September 30, 2015.  We currently expect to fund approximately $55,000 for renovations and other capital improvements during the remainder of 2015 and in 2016 under this agreement, including $45,000 related to the nine hotels we acquired in July 2015. The annual minimum returns due to us under the Sonesta agreement increase by 8% of the amounts funded in excess of threshold amounts, as defined therein. See Note 10 for further information regarding our relationship with Sonesta.

Wyndham agreement. Our management agreement with Wyndham Hotel Group, or Wyndham, for 22 hotels provides that as of September 30, 2015, we are to be paid annual minimum returns and rents of $27,843.  We realized returns and rents of $6,931 and $6,805 during the three months ended September 30, 2015 and 2014, respectively, and returns and rents of $20,700 and $20,044 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement. Pursuant to our Wyndham agreement, Wyndham has provided us with a limited guarantee, which is limited to $35,656 ($5,287 remaining at September 30, 2015), subject to an annual payment limit of $17,828 and which expires on July 28, 2020.  During the nine months ended September 30, 2015, Wyndham made $1,295 of net guarantee payments to us. The guarantee provided by Wyndham with respect to the lease with Wyndham Vacation Resorts, Inc., or Wyndham Vacation, for part of one hotel is unlimited.

We funded $5,296 for renovations and other capital improvements to hotels included in our Wyndham agreement during the nine months ended September 30, 2015.  We currently expect to fund approximately $3,700 for capital improvements to certain hotels during the remainder of 2015 and in 2016 under this agreement.  As we fund these improvements, the annual minimum returns and rents payable to us increase by 8% of the amounts funded.

TA agreements.  See Note 10 for information about our TA agreements.

Other management agreement and lease matters. As of November 8, 2015, all payments due to us from our managers and tenants under our other operating agreements were current.  Minimum return and minimum rent payments due to us under some of these other hotel management agreements and leases are supported by guarantees.  The guarantee provided by Hyatt Hotels Corporation, or Hyatt, with respect to the 22 hotels managed by Hyatt is limited to $50,000 ($14,893 remaining at September 30, 2015).  The guarantee provided by Carlson Hotels Worldwide, or Carlson, with respect to the 11 hotels managed by Carlson is limited to $40,000 ($25,580 remaining at September 30, 2015).

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HOSPITALITY PROPERTIES TRUST

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

Guarantees and security deposits generally. Certain of our managed hotel portfolios had net operating results that exceeded the minimum returns due to us for the three and nine months ended September 30, 2015.Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $6,560 and $8,782 less than the minimum returns due to us for the three months ended September 30, 2015 and 2014, respectively, and $17,395 and $30,963 less than the minimum returns due to us for the nine months ended September 30, 2015 and 2014, respectively.  When the managers of these hotels fund the shortfalls under the terms of our operating agreements or their guarantees, we reflect such fundings (including security deposit applications) in our condensed consolidated statements of comprehensive income as a reduction of hotel operating expenses.  When we reduce the amounts of the security deposits we hold for any of our operating agreements for payment deficiencies, it does not result in additional cash flow to us of the deficiency amounts, but reduces the refunds due to the respective lessees or managers who have provided us with these deposits upon expiration of the respective management agreement.  The security deposits are non-interest bearing and are not held in escrow.  There was no reduction to hotel operating expenses for the three months ended September 30, 2015 for shortfalls funded by our hotel managers.  Hotel operating expenses were reduced due to such fundings by $42 for the three months ended September 30, 2014 and by $1,295 and $5,052 for the nine months ended September 30, 2015 and 2014, respectively.  We had shortfalls at certain of our managed hotel portfolios not funded by the managers of these hotels under the terms of our operating agreements of $6,560 and $8,740 in the three months ended September 30, 2015 and 2014, respectively, and $16,100 and $25,911 in the nine months ended September 30, 2015 and 2014, respectively, which represent the unguaranteed portions of our minimum returns from Sonesta.

Certain of our managed hotel portfolios had net operating results that were in the aggregate, $28,969 and $17,329 more than the minimum returns due to us in the three months ended September 30, 2015 and 2014, respectively, and $65,973 and $24,408 more than the minimum returns due to us in the nine months ended September 30, 2015 and 2014, respectively. Certain of our guarantees and our security deposits may be replenished by future cash flows from the applicable hotel operations in excess of the minimum returns due to us pursuant to the terms of the respective agreements.  When our guarantees and our security deposits are replenished by cash flows from hotel operations, we reflect such replenishments in our condensed consolidated statements of comprehensive income as an increase to hotel operating expenses.  We had $11,970 and $4,150 of guarantee and security deposit replenishments in the three months ended September 30, 2015 and 2014, respectively.  We had $27,551 and $6,447 of guarantee and security deposit replenishments in the nine months ended September 30, 2015 and 2014, respectively. 

Note 12.  Fair Value of Assets and Liabilities

The table below presents certain of our assets carried at fair value at September 30, 2015, 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
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
Investment securities (1)	$	35,329	$	35,329	$	-	$	-

(1) Our investment securities, consisting of our 3,420,000 shares of TA, which are included in other assets, net in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs).  Our historical cost basis for these securities is $17,407.  The unrealized gain for these securities as of September 30, 2015 is included in cumulative other comprehensive income in our condensed consolidated balance sheets.

In addition to the investment securities included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, unsecured revolving credit facility, unsecured term loan, senior unsecured notes and security deposits. At September 30, 2015 and December 31, 2014, the fair values of these additional financial

22

HOSPITALITY PROPERTIES TRUST

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

instruments approximated their carrying values in our condensed consolidated balance sheets due to their short term nature or variable interest rates, except as follows:

	September 30, 2015				December 31, 2014
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Senior Unsecured Notes, due 2016 at 6.3%	$	275,000	$	277,452	$	275,000	$	287,680
Senior Unsecured Notes, due 2017 at 5.625%		300,000		315,342		300,000		321,675
Senior Unsecured Notes, due 2018 at 6.7%		350,000		377,557		350,000		386,755
Senior Unsecured Notes, due 2022 at 5.0%		500,000		522,080		500,000		529,160
Senior Unsecured Notes, due 2023 at 4.5%		300,000		301,239		300,000		306,516
Senior Unsecured Notes, due 2024 at 4.65%		350,000		349,269		350,000		360,757
Senior Unsecured Notes, due 2025 at 4.5%		350,000		345,667		350,000		353,701
Convertible Senior Unsecured Notes, due 2027 at 3.8%		8,478		8,665		8,478		8,849
Unamortized discounts		(11,470)		-		(12,865)		-
Total financial liabilities	$	2,422,008	$	2,497,271	$	2,420,613	$	2,555,093

At September30, 2015, we estimated the fair values of our senior unsecured notes using an average of the bid and ask price of our then outstanding issuances of senior unsecured notes (Level 2 inputs).  We estimated the fair value of our convertible senior unsecured notes using discounted cash flow analyses and currently prevailing market interest rates (Level 3 inputs) because no market quotes or other observable inputs for these notes were available at September30, 2015 and December 31, 2014.

23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and with our 2014 Annual Report. We are a REIT organized under Maryland law.

Overview (dollar amounts in thousands, except per share amounts)

Hotel operations. During the three and nine months ended September  30, 2015, the U.S. hotel industry generally realized improvements in average daily rate, or ADR, occupancy and revenue per available room, or RevPAR, when compared to the same period in 2014.  We believe certain of our hotels have benefited from recent renovations and, as a result, have produced year over year increases in RevPAR in excess of the hotel industry generally.  At the same time, however, certain of our hotels were negatively impacted by the disruption and displacement caused by our renovation activities at those hotels during 2014 and the nine months ended September 30, 2015. We currently expect our renovation activities to continue for the remainder of 2015 and in 2016.

For the three months ended September  30, 2015 compared to the same period in 2014 for our 291 comparable hotels that we owned continuously since July 1, 2014: ADR increased 6.3% to $122.14; occupancy increased 1.1 percentage points to 79.9%; and RevPAR increased 7.8% to $97.59.

During the three months ended September  30, 2015, we had fourcomparable hotels that we owned continuously since July 1, 2014 under renovation for all or part of the period.  For the three months ended September  30, 2015 compared to the same period in 2014 for thesefour hotels under renovation: ADR decreased1.8% to $143.24; occupancy decreased 21.5 percentage points to 55.5%; and RevPAR decreased 29.2% to $79.50.

For the three months ended September  30, 2015 compared to the same period in 2014 for our 287comparable hotels that we owned continuously since July 1, 2014 not under renovation: ADR increased 6.7% to $121.79; occupancy increased 1.6 percentage points to 80.5%; and RevPAR increased 8.8% to $98.04.

For the nine months ended September  30, 2015 compared to the same period in 2014 for our 290 comparable hotels that we owned continuously since January 1, 2014: ADR increased 7.5% to $121.50; occupancy increased 1.4 percentage points to 77.3%; and RevPAR increased 9.5% to $93.92.

During the nine months ended September 30, 2015, we had 18 comparable hotels that we owned continuously since January 1, 2014under renovation for all or part of the period.  For the nine months ended September 30, 2015 compared to the same period in 2014 for these 18 hotels under renovation: ADR increased 3.8% to $145.36; occupancy decreased 3.1 percentage points to 71.5%; and RevPAR decreased 0.5% to $103.93.

              For the nine months ended September 30, 2015 compared to the same period in 2014 for our 272comparable hotels that we owned continuously since January 1, 2014not under renovation: ADR increased 7.9% to $119.88; occupancy increased 1.7 percentage points to 77.7%; and RevPAR increased 10.3% to $93.15.

Our hotel tenants and managers.  Many of our hotel operating agreements contain security features, such as guarantees and security deposits, which are intended to protect minimum returns and rents due to us in accordance with our operating agreements regardless of hotel performance. However, the effectiveness of various security features to provide us uninterrupted receipt of minimum returns and rents is not assured, particularly if economic conditions generally decline, or if our hotel renovation activities described above do not result in improved operating results at our hotels. Also, certain of the guarantees that we hold are limited in amount and duration and do not provide for payment of the entire amount of the applicable minimum returns. If our tenants, managers or guarantors do not earn or pay the minimum returns and rents due to us, our cash flows will decline and we may be unable to repay our debt or fund our debt service obligations or pay distributions to our shareholders or the distributions may decline.

Marriott No. 1 agreement.  Our management agreement with Marriott for 53 hotels provides that as of September 30, 2015 we are to be paid an annual minimum return of $68,277 to the extent that gross revenues of the hotels, after payment of hotel operating expenses and funding of the FF&E reserve, are sufficient to do so.  We do not have any security deposits or guarantees for our minimum returns from the 53 hotels included in our Marriott No. 1 agreement.  Accordingly, the minimum returns we receive from these hotels managed by Marriott are limited to available hotel cash flows after payment of

24

operating expenses and funding of the FF&E reserve. Marriott’s management and incentive fees are only earned after we receive our minimum returns.We realized minimum returns of $17,046 and $16,938 during the three months ended September 30, 2015 and 2014, respectively, and minimum returns of $51,080 and $50,745 in the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  We also realized additional returns of $3,149 during the three and nine months ended September 30, 2015, which represents our share of hotel cash flows in excess of the minimum returns due for the period. 

Additional details of this agreement are set forth in Note 11 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference.

Marriott No. 234 agreement.  Our management agreement with Marriott for 68 hotels provides that as of September 30, 2015 we are to be paid an annual minimum return of $106,243.  We realized returns of $26,553 and $29,232 during the three months ended September 30, 2015 and 2014, respectively, and returns of $79,586 and $79,368 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  Pursuant to our Marriott No. 234 agreement, Marriott has provided us with a security deposit to cover minimum return payment shortfalls, if any.  During the three and nine months ended September 30, 2015, our available security deposit was replenished by $3,658 and $7,389, respectively, from the hotel cash flows in excess of the minimum returns due for the period.  The available balance of this deposit was $7,389 as of September 30, 2015.  Pursuant to our Marriott No. 234 agreement, Marriott has also provided us with a limited guarantee which expires in 2019for shortfalls up to 90% of our minimum returns, after the available security deposit has been depleted.  Marriott was not required to make any guarantee payments to us during the three and nine months ended September 30, 2015, because the hotels generated net operating results in excess of the guarantee threshold amount (90% of the minimum returns due to us).  The available balance of the guarantee was $30,672 as of September 30, 2015. 

Additional details of this agreement are set forth in Note 11 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference.

InterContinental agreement.  Our management agreement with InterContinental for 93 hotels provides that as of September 30, 2015, we are to be paid annual minimum returns and rents of $149,778.  We realized minimum returns and rents of $37,444 and $34,875 during the three months ended September 30, 2015 and 2014, respectively, and minimum returns and rents of $109,461 and $104,624 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  We also realized additional returns and rents of $2,607 and $5,784 under this agreement during the three and nine months ended September 30, 2015, respectively, from the hotel cash flows in excess of our minimum returns and rents due for the periods.  Pursuant to our InterContinental agreement, InterContinental has provided us with a security deposit to cover minimum payment shortfalls, if any.  During the three andnine months ended September 30, 2015, our available security deposit was replenished by $4,992 and $12,709,respectively, from the hotel cash flows in excess of the minimum returns and rents due for the period. The available balance of this security deposit was $45,675 as of September 30, 2015.

Under this agreement, InterContinental is required to maintain a minimum security deposit of $37,000. In January 2014, we entered into a letter agreement with InterContinental under which the minimum security deposit balance required to be maintained during 2015 will be reduced by two dollars for every dollar of additional security deposit InterContinental provides to us.  During the first quarter of 2015, InterContinental provided us $2,772 of additional security deposits, which reduced the minimum security deposit amount required to $31,456. We refunded the additional security deposit to InterContinental in July 2015. 

Additional details of this agreement are set forth in Note 11 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference.

Sonesta agreement.  Our management agreement with Sonesta provides that we are to be paid an annual minimum return equal to 8% of our invested capital, as defined in the management agreement($81,433 as of September 30, 2015), to the extent that gross revenues of the hotels, after payment of hotel operating expenses and certain base management fees to Sonesta, are sufficient to do so.  We do not have any security deposits or guarantees for our hotels managed by Sonesta.  Accordingly, the returns we receive from hotels managed by Sonesta are limited to available hotel cash flows after payment of operating expenses. Sonesta’s incentive management fees, but not its other fees, are only earned after we receive our minimum returns. We realized returns of $13,186 and $8,424 during the three months ended September 30, 2015 and 2014, respectively, and returns of $39,985 and $21,724 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.

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Additional details of this agreement are set forth in Notes 10 and 11 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference.

Wyndham agreement.  Our management agreement with Wyndham for 22 hotels provides that as of September 30, 2015, we are to be paid annual minimum returns and rents of $27,843.  We realized returns and rents of $6,931 and $6,805 during the three months ended September 30, 2015 and 2014, respectively, and returns and rents of $20,700 and $20,044 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement. Pursuant to our Wyndham agreement, Wyndham has provided us with a limited guarantee, which is limited to $35,656 ($5,287 remaining at September 30, 2015), subject to an annual payment limit of $17,828 and which expires on July 28, 2020.  During the nine months ended September 30, 2015, Wyndham made $1,295 of net guarantee payments to us. The guarantee provided by Wyndham with respect to the lease with Wyndham Vacation for part of one hotel is unlimited.

Additional details of this agreement are set forth in Note 11 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference.

TA agreements.  Details of our agreements with TA are set forth in Note 10 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference.

Other management agreement and lease matters.  As of November 8, 2015, all payments due to us from our managers and tenants under our other operating agreements were current.  Additional details of our guarantees from Hyatt and Carlson are set forth in Note 11 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, which disclosure is incorporated herein by reference. 

Management Agreements and Leases

At September  30, 2015, we owned 302 hotels operated under nine operating agreements; 299 of these hotels are leased by us to our wholly owned TRSs and managed by hotel operating companies and three are leased to hotel operating companies.  At September  30, 2015, our 193 owned travel centers are leased to TA under five agreements. Our condensed consolidated statements of comprehensive income include operating revenues and expenses of our managed hotels and rental income from our leased hotels and travel centers.  Additional information regarding the terms of our management agreements and leases is included in the table and notes thereto on pages 36 through 38 below.

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Results of Operations (dollar amounts in thousands, except per share amounts)

Three Months Ended September  30, 2015 Compared to the Three Months Ended September  30, 2014

	For the Three Months Ended September 30,
					Increase		% Increase
	2015		2014		(Decrease)		(Decrease)
Revenues:
Hotel operating revenues	$	437,171	$	394,973	$	42,198	10.7%
Rental income - hotels		8,199		8,088		111	1.4%
Rental income - travel centers		65,548		55,749		9,799	17.6%
Total rental income		73,747		63,837		9,910	15.5%
FF&E reserve income		968		829		139	16.8%
Expenses:
Hotel operating expenses		308,603		279,560		29,043	10.4%
Depreciation and amortization - hotels		54,100		54,024		76	0.1%
Depreciation and amortization - travel centers		30,161		25,625		4,536	17.7%
Total depreciation and amortization		84,261		79,649		4,612	5.8%
General and administrative		19,831		16,798		3,033	18.1%
Acquisition related costs		851		14		837	5978.6%
Operating income		98,340		83,618		14,722	17.6%
Interest income		11		13		(2)	(15.4%)
Interest expense		(36,628)		(34,304)		(2,324)	6.8%
Loss on extinguishment of debt		-		(129)		129	n/a
Income before income taxes and equity earnings (losses) of an investee		61,723		49,198		12,525	25.5%
Income tax expense		(514)		(39)		(475)	1217.9%
Equity in earnings (losses) of an investee		(24)		38		(62)	n/a
Net income		61,185		49,197		11,988	24.4%
Preferred distributions		(5,166)		(5,166)		-	0.0%
Net income available for common shareholders		56,019		44,031		11,988	27.2%
Weighted average shares outstanding (basic)		151,359		149,665		1,694	1.1%
Weighted average shares outstanding (diluted)		151,386		150,007		1,379	0.9%
Net income available for common shareholders per common share (basic and diluted)	$	0.37	$	0.29	$	0.08	27.6%

References to changes in the income and expense categories below relate to the comparison of consolidated results for the three month period endedSeptember 30, 2015, compared to the three month period endedSeptember 30, 2014.

The increase in hotel operating revenues is a result of increased revenues at certain of our managed hotels due to increases in ADR and higher occupancies ($33,293) and the effects of our hotel acquisitions since July 1, 2014 ($13,079).  These increases were partially offset by the effect of decreased revenues at certain of our managed hotels undergoing renovations during all or part of the 2015 period due primarily to lower occupancies ($4,174).  Additional operating statistics of our hotels are included in the table on page 39.

The increase in rental income  - hotels is primarily a result of contractual rent increases under certain of our hotel leases and increases in theminimum rents due to us as we funded improvements at certain of our leased hotels since July 1, 2014 ($660), partially offset by a decrease in certain below market lease revenue amortization ($549). Rental income for each of the 2015 and 2014 periods includes $105 and $131, respectively, of adjustments to record rent on a straight line basis.

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The increase in rental income - travel centers is primarily a result of our purchase from and leaseback to TA of 14 travel centers and certain assets at 11 sites we lease to TA in June and September 2015 ($4,997), an increase in straight line rent adjustments related to previously deferred rent amounts under our TA agreements ($3,225), and increases in the minimum rents due to us from TA for improvements we purchased at certain of our travel centers since July 1, 2014 ($2,545), partially offset by a decrease in rents related to our sale of five travel centers to TA in June 2015 ($968). Rental income for our travel centers for the 2015 and 2014 periods includes $3,647 and $422, respectively, of adjustments necessary to record rent on a straight line basis.

FF&E reserve income represents amounts paid by certain of our hotel tenants into restricted accounts owned by us, the purpose of which is to accumulate funds for future capital expenditures. The terms of our hotel leases require these amounts to be calculated as a percentage of total sales at our hotels. We do not report the amounts, if any, which are escrowed as FF&E reserves for our managed hotels as FF&E reserve income.The increase in FF&E reserve income is the result of increased sales at certain of our leased hotels and increased FF&E contribution percentages required by certain of our hotel leases. 

The increase in hotel operating expenses was primarily caused by the effect of our acquisitions since July 1, 2014 ($13,733),an increase in the amount of security deposit and guarantee replenishments under certain of our hotel operating agreements ($7,819),and increased expenses at certain of our managed hotels resulting primarily from higher wage and benefit costs and sales and marketing expenses ($6,458), partially offset by operating expense decreases at certain hotels undergoing renovations during the 2014 period due to lower occupancies ($3,787).  Certain of our guarantees and our security deposits may be replenished by subsequent cash flows from the applicable hotel operations pursuant to the terms of the respective operating agreements.  When our guarantees and our security deposits are replenished by cash flows from hotel operations, we reflect such replenishments in our condensed consolidated statements of comprehensive income as an increase to hotel operating expenses.

The increase in depreciation and amortization - hotels is primarily due to the depreciation and amortization of assets acquired with funds from our FF&E reserves or directly funded by us since July 1, 2014 ($2,521) and the effect of our hotel acquisitions since July 1, 2014 ($1,644),largely offset by certain of our depreciable assets becoming fully depreciated since July 1, 2014 ($4,089).

The increase in depreciation and amortization - travel centers is due to the depreciation and amortization of travel center improvements we acquired since July 1, 2014 ($2,475) and our travel center acquisitions since July 1, 2014 ($2,061).

The increase in general and administrative costs is primarily due toanincrease in estimated business management incentive fees ($3,782) and an increase in business management base fees($214), partially offset by the amortization of the liability we recorded in connection with our acquisition of RMR Inc. shares in June 2015 ($911) (see Note 10 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding this liability)and lower professional services expenses ($52). 

Acquisition related costs represent legal and other costs incurred in connection with our acquisition activities.

The increase in operating income is primarily due to the revenue and expense changes discussed above.

The decrease in interest income is due to lower average cash balances during the 2015 period.

The increase in interest expense is due to higher average outstanding borrowings,partially offset by lower weighted average interest rates in the 2015 period.

We recorded a $129 loss on early extinguishment of debt in the 2014 period in connection with the redemption of certain senior notes.

We recognized higher state income taxes during the 2015 period, primarily as a result of a higher estimated effective state tax rate compared to the 2014 period. 

Equity in earnings (losses) of an investee represents our proportionate share of earnings of AIC.

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The increases in net income, net income available for common shareholders and net income available for common shareholders per basic and diluted common share for the three months endedSeptember 30, 2015, compared to the prior year period, are primarily a result of the changes discussed above.

Nine Months Ended September  30, 2015 Compared to the NineMonths Ended September  30, 2014

	For the Nine Months Ended September 30,
					Increase		% Increase
	2015		2014		(Decrease)		(Decrease)
Revenues:
Hotel operating revenues	$	1,243,744	$	1,112,157	$	131,587	11.8%
Rental income - hotels		24,339		24,532		(193)	(0.8%)
Rental income - travel centers		183,222		166,427		16,795	10.1%
Total rental income		207,561		190,959		16,602	8.7%
FF&E reserve income		3,159		2,673		486	18.2%
Expenses:
Hotel operating expenses		870,689		780,955		89,734	11.5%
Depreciation and amortization - hotels		159,421		160,402		(981)	(0.6%)
Depreciation and amortization - travel centers		84,391		76,297		8,094	10.6%
Total depreciation and amortization		243,812		236,699		7,113	3.0%
General and administrative		53,820		41,429		12,391	29.9%
Acquisition related costs		1,986		237		1,749	738.0%
Operating income		284,157		246,469		37,688	15.3%
Interest income		32		63		(31)	(49.2%)
Interest expense		(107,918)		(104,101)		(3,817)	3.7%
Loss on extinguishment of debt		-		(855)		855	(100.0%)
Income before income taxes, equity earnings of an investee and gain on sale of real estate		176,271		141,576		34,695	24.5%
Income tax expense		(1,445)		(1,110)		(335)	n/a
Equity in earnings of an investee		71		66		5	7.6%
Income before gain on sale of real estate		174,897		140,532		34,365	24.5%
Gain on sale of real estate		11,015		130		10,885	8273.1%
Net income		185,912		140,662		45,250	32.2%
Preferred distributions		(15,498)		(15,498)		-	0.0%
Net income available for common shareholders		170,414		125,164		45,250	36.2%
Weighted average shares outstanding (basic)		150,476		149,616		860	0.6%
Weighted average shares outstanding (diluted)		150,863		149,834		1,029	0.7%
Net income available for common shareholders per common share: basic and diluted	$	1.13	$	0.84	$	0.29	34.5%

References to changes in the income and expense categories below relate to the comparison of results for the nine month period ended September 30, 2015, compared to the nine month period ended September 30, 2014.

The increase in hotel operating revenues is a result of increased revenues at certain of our managed hotels due to increases in ADR and higher occupancies ($111,757), the effects of our hotel acquisitions since January 1, 2014 ($27,803), partially offset by decreased revenues at certain of our managed hotels undergoing renovations during all or part of the 2014 period due primarily to lower occupancies ($7,973).  Additional operating statistics of our hotels are included in the table on page 39.

The decrease in rental income - hotels is primarily a result of adecrease in certain below market lease revenue amortization ($1,648), partially offset by contractual rent increases under certain of our hotel leases and increases in the

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minimum rents due to us as we funded improvements at certain of our leased hotels since January 1, 2014 ($1,455).  Rental income for the 2015 and 2014 periods includes $355 and $393 of adjustments to record rent on a straight line basis, respectively.  

The increase in rental income - travel centers is primarily a result ofour purchase from and leaseback to TA of 14 travel centers and certain assets at 11 sites we lease to TA in June and September 2015 ($6,213), increases in the minimum rents due to us from TA for improvements we purchased at certain of our travel centers since January 1, 2014 ($4,633), and an increase in straight line rent adjustments related to previously deferred rent amounts under our TA agreements($3,901). Rental income for our travel centers for the 2015 and 2014 periods includes $5,452 and $1,266, respectively, of adjustments necessary to record rent on a straight line basis.  The 2015 period includes $2,048 of percentage rent recognized upon amendment of our Prior TA Agreement in June 2015.

The increase in FF&E reserve income is primarily the result of increased sales at certain of our leased hotels and increased FF&E contribution percentage requirements in certain of our hotel leases.

The increase in hotel operating expenses was primarily caused bythe effect of our acquisitions since January 1, 2014 ($29,400), higher management fees earned by our operators ($21,979), increased expenses at certain of our managed hotels resulting primarily from higher wage and benefit costs and sales and marketing expenses ($19,394),  an increase in the amount of security deposit and guarantee replenishments under certain of our hotel operating agreements ($13,614), and a reduction in the amount of minimum return shortfalls funded by our managers ($3,757), partially offset byoperating expense decreases at certain hotels undergoing renovations during the 2015 period due to lower occupancies ($5,687) and the effects of our hotel dispositions since January 1, 2014 ($540).  When our managers fund shortfalls of our minimum returns under the terms of our operating agreements or their guarantees, we reflect such fundings (including security deposit applications) in our condensed consolidated statements of comprehensive income as a reduction of hotel operating expenses. 

The decrease in depreciation and amortization - hotels is primarily due to certain of our depreciable assets becoming fully depreciated since January 1, 2014 ($14,943), partially offset by the depreciation and amortization of assets acquired with funds from our FF&E reserves or directly funded by us since January 1, 2014 ($10,734) and the effect of our hotel acquisitions since January 1, 2014 (3,228).

The increase in depreciation and amortization - travel centers is due to the depreciation and amortization of improvements made to our travel centers since January 1, 2014 ($5,603) and our travel center acquisitions since January 1, 2015 ($2,491).

The increase in general and administrative costs is primarily due to an increase in estimated business management incentive fees ($10,309),higher professional services costs ($1,425) and higher business management base fees ($1,799), partially offset by the amortization of the liability we recorded in connection with our acquisition of RMR Inc. shares in June 2015 ($1,142) (see Note 10 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding this liability).

Acquisition related costs represent legal and other costs incurred in connection with our acquisition activities.

The increase in operating income is primarily due to the revenue and expense changes discussed above.

The decrease in interest income is due to lower average cash balances during the 2015 period.

The increase in interest expense is primarily due to higher average borrowings, partially offset by a lower weighted average interest rate in the 2015 period.

We recorded an $855 loss on early extinguishment of debt in the 2014 period in connection with amending the terms of our revolving credit facility and term loan and the redemption of certain senior notes. 

We recognized higher state income taxes during the 2015 period primarily due to increased taxable income in certain jurisdictions and a higher effective tax rate.

Equity in earnings of an investee represents our proportionate share of earnings of AIC.

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We recorded an $11,015 gain on sale of real estate in the 2015 period in connection with the sale of five travel centers.  We recorded a $130 gain on sale of real estate in the 2014 period in connection with the sale of one hotel.

The increases in net income, net income available for common shareholders and net income available for common shareholders per common share in the nine months ended September 30, 2015, compared to the prior year period, are primarily a result of the changes discussed above. 

Liquidity and Capital Resources (dollar amounts in thousands, except per share amounts)

Our Managers and Tenants

As of September  30, 2015,  300 of our hotels are included in one of seven portfolio agreements and two hotels are not included in a portfolio and are leased to hotel operating companies. Our 193 owned travel centers are leased under five portfolio agreements. All costs of operating and maintaining our properties are paid by the hotel managers as agents for us or by our tenants for their own account. Our hotel managers and tenants derive their funding for property operating expenses and for returns and rents due to us generally from property operating revenues and, to the extent that these parties themselves fund our minimum returns and minimum rents, from their separate resources. Our hotel managers and tenants are Marriott, InterContinental, Sonesta, Wyndham, Hyatt, Carlson and Morgans Hotel Group, or Morgans. Our travel centers are leased to TA.

We define coverage for each of our hotel management agreements or leases as total property level revenues minus FF&E reserve escrows, if any, and all property level expenses which are not subordinated to the minimum returns and minimum rents due to us divided by the minimum returns or minimum rent payments due to us. More detail regarding coverage, guarantees and other features of our hotel operating agreements is presented in the tables and related notes on pages 36 through 39. For the twelve months ended September  30, 2015,  three of our nine hotel operating agreements,representing 16% of our total annual minimum returns and minimum rents, generated coverage of less than 1.0x (with a range among those three hotel operating agreements of 0.51x to 0.87x).

We define coverage for our travel center leases as property level revenues minus all property level expenses divided by the minimum rent payments due to us.  During the twelve months ended September 30, 2015, the operating results from our 193 properties in our five travel center leases generated coverage of 1.92x. Because a large percentage of TA’s business is conducted at properties leased from us, property level rent coverage may not be an appropriate way to evaluate TA’s ability to pay rents due to us. We believe property level rent coverage is nonetheless one useful indicator of the performance and value of our properties as we believe it is what an operator interested to acquire these properties or the leaseholds might use to evaluate the contribution of these properties to their earnings before corporate level expenses.

Three hundred seventeen (317) of our properties, representing 60% of our total historical investments at cost as of September  30, 2015, are operated under 10 management arrangements or leases which are subject to full or limited guarantees. These guarantees may provide us with continued payments if the property level cash flows fail to equal or exceed guaranteed amounts due to us. Our minimum returns and minimum rents for 93 hotels, representing 18% of our total historical investments at cost as of September 30, 2015, are secured by a security deposit which we control. Some of our managers and tenants, or their affiliates, may also supplement cash flow from our properties in order to make payments to us and preserve their rights to continue operating our properties even if they are not required to do so by guarantees. Guarantee payments, security deposit applications or supplemental payments to us, if any, made under any of our management agreements or leases do not subject us to repayment obligations, but, under some of our agreements, the manager or tenant may recover these guarantee or supplemental payments and the security deposits may be replenished from the subsequent cash flows from our properties after our future minimum returns and minimum rents are paid.

Cash flows from our hotels under certain of our agreements are less than the minimum amounts contractually required and we have been utilizing the applicable security features in our agreements to cover some of these shortfalls. However, several of the guarantees and all the security deposits we hold are for limited amounts, are for limited durations and may be exhausted or expire, especially if our hotel renovation and rebranding activities do not result in improved operating results at these hotels. Accordingly, the effectiveness of our various security features to provide uninterrupted payments to us is not assured. If any of our hotel managers, tenants or guarantors default in their payment obligations to us, our cash flows will decline and we may become unable to continue to pay distributions to our shareholders or the amount of the distributions may decline.

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Our Operating Liquidity and Capital Resources

Our principal source of funds for current expenses and distributions to shareholders are minimum returns from our managed hotels and minimum rents from our leased hotels and travel centers. We receive minimum returns and minimum rents from our managers and tenants monthly. We receive additional returns, percentage returns and rents and our share of the operating profits of our managed hotels after payment of management fees and other deductions, if any, either monthly or quarterly, and these amounts are usually subject to annual true up. This flow of funds has historically been sufficient for us to pay our operating expenses, interest expense on our debt and distributions to shareholders. We believe that our operating cash flow will be sufficient to meet our operating expenses, interest expense and distributions to our shareholders for the next twelve months and the foreseeable future thereafter. However, as a result of economic conditions or otherwise, our managers and tenants may become unable to pay minimum returns and minimum rents to us when due, in which case our cash flow and net income will decline and we may need to reduce the amount of, or even eliminate, our distributions to common shareholders.

Changes in our cash flows for the nine months endedSeptember 30, 2015 compared to the same period in 2014 were as follows: (1) cash flows provided by operating activities increased from $326,554 in 2014 to $374,906 in 2015; (2) cash used in investing activities increased from $214,085 in 2014 to $575,254 in 2015; and (3) cash flows from financing activities changed from $115,887of cash used in financing activities in 2014 to $195,889 of cashprovided by financing activities in 2015.

The increase in cash provided by operating activities for the nine months endedSeptember 30, 2015 as compared to the prior year period is due primarily to an increase in the minimum returns and rents paid to us due to our funding of improvements to our hotels and travel centers, the improved operating performance at certain of our hotels, our acquisitions since January 1, 2014, an increase in security deposit replenishments and favorable changes in working capital. The increase in cash used in investing activities for the nine months endedSeptember 30, 2015 as compared to the prior year period is primarily due to an increase in ourreal estate acquisitions, our funding of capital improvements and our investment in RMR Inc. The change in cash flows provided by (used in) financing activities for the nine months endedSeptember 30, 2015 as compared to the prior year period is primarily due to higher net borrowings in 2015 used to fund our investing activities.

We maintain our status as a REIT under the Internal Revenue Code of 1986, as amended, by meeting certain requirements. As a REIT, we do not expect to pay federal income taxes on the majority of our income; however, the income realized by our TRSs in excess of the rent they pay to us is subject to U.S. federal income tax at corporate tax rates. In addition, the income we receive from our hotels in Canada and Puerto Rico is subject to taxes in those jurisdictions and we are subject to taxes in certain states where we have properties despite our REIT status.

Our Investment and Financing Liquidity and Capital Resources

Various percentages of total sales at some of our hotels are escrowed as FF&E reserves to fund future capital improvements. During the nine months endedSeptember 30, 2015, our hotel managers and hotel tenants deposited $49,774 to these accounts and $45,965 was spent from the FF&E reserve escrow accounts to renovate and refurbish our hotels.  As ofSeptember 30, 2015, there was $44,296 on deposit in these escrow accounts, which was held directly by us and is reflected in our condensed consolidated balance sheets as restricted cash.

Our hotel operating agreements generally provide that, if necessary, we may provide our managers and tenants with funding for capital improvements to our hotels in excess of amounts otherwise available in escrowed FF&E reserves or when no FF&E reserves are available. To the extent we make such additional fundings, our annual minimum returns or minimum rents generally increase by a percentage of the amount we fund. During the nine months endedSeptember 30, 2015, we funded $54,671 for capital improvements in excess of FF&E reserve fundings available from hotel operations to our hotels as follows:

· During the nine months ended September 30, 2015, we funded $3,005 for capital improvements to hotels included in our Marriott No. 1 agreement using cash on hand and borrowings under our unsecured revolving credit facility. We currently expect to fund approximately $1,000 for capital improvements under this agreement during the remainder of 2015 using existing cash balances or borrowings under our unsecured revolving credit facility. As we fund these improvements, the minimum return payable to us increases.

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· During the nine months ended September 30, 2015, we funded $3,500 for capital improvements to hotels included in our Marriott No. 234 agreement using cash on hand and borrowings under our unsecured revolving credit facility.  As we fund these improvements, the minimum return payable to us increases.  We currently do not expect to make any fundings for capital improvements under this agreement during the remainder of 2015.

· We currently expect to fund approximately $34,750 for capital improvements under our InterContinental agreement during the remainder of 2015 and in 2016 using existing cash balances or borrowings under our unsecured revolving credit facility.  We did not make any fundings for capital improvements to these hotels during the nine months ended September 30, 2015.  As we fund these improvements, the minimum return payable to us increases.

· Our Sonesta management agreements do not require FF&E escrow deposits. Under our Sonesta agreement, we are required to fund capital expenditures made at our hotels. During the nine months ended September 30, 2015, we funded $42,870 for renovations and other capital improvements to hotels included in our Sonesta agreement using cash on hand and borrowings under our unsecured revolving credit facility.  We currently expect to fund approximately $55,000 during the remainder of 2015 and in 2016 using existing cash balances or borrowings under our unsecured revolving credit facility. As we fund these improvements, the minimum returns payable to us increase to the extent amounts funded exceed threshold amounts, as defined in our Sonesta agreement.

· Our Wyndham agreement requires FF&E escrow deposits only if there is excess cash flow after payment of our minimum returns.  No FF&E escrow deposits were required during the nine months ended September 30, 2015.  During the nine months ended September 30, 2015, we funded $5,296 for renovations and other capital improvements to hotels included in our Wyndham agreement using existing cash balances and borrowings under our unsecured revolving credit facility.  We currently expect to fund approximately $3,700 for capital improvements under this agreement during the remainder of 2015 and in 2016 using existing cash balances or borrowings under our unsecured revolving credit facility. As we fund these improvements, the minimum return payable to us increases.

Our travel center leases with TA do not require FF&E escrow deposits. However, TA is required to maintain the leased travel centers, including structural and non-structural components. Under all of our leases with TA, TA may request that we purchase qualifying capital improvements to the leased facilities in return for minimum rent increases. However, TA is not obligated to request and we are not obligated to purchase any such improvements. We funded $70,150 for purchases of capital improvements under these lease provisions during the nine months ended September 30, 2015, resulting in TA’s annual minimum rent payable to us increasing by $5,963 pursuant to the leases.

On each of January 15, 2015, April 15, 2015, July 15, 2015 and October 15, 2015 we paid a $0.4453 per share distribution, or $5,166, to our Series D preferred shareholders.We funded these distributions using cash on handand borrowings under our unsecured revolving credit facility.

On February 24, 2015, we paid a $0.49 per share distribution, or $73,466, to our common shareholders.  On May 21, 2015, we paid a $0.50 per share distribution, or $74,981, to our common shareholders.  On August 19, 2015, we paid a $0.50 per share distribution, or $75,743, to our common shareholders.  We funded these distributions using cash on hand and borrowings under our unsecured revolving credit facility.  On October 12, 2015, we declared a $0.50 per share distribution, or $75,774, to our common shareholders of record as of October 23, 2015.  We expect to pay this amount on or about November 19, 2015 using cash on hand and borrowings under our unsecured revolving credit facility.

On March 16, 2015, we acquired a 300 room hotel located in Rosemont, IL for $35,500, excluding acquisition related costs.  We funded this acquisition using cash on hand and borrowings under our unsecured revolving credit facility.

On April 28, 2015, we acquired a land parcel adjacent to one of our hotels in Fort Lauderdale, FL for $750, excluding acquisitionrelated costs.  We funded this acquisition using cash on hand.

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On May 15, 2015, we acquired a 364 room full service hotel located in Denver, CO for $77,250,  excluding acquisition related costs.  We funded this acquisition using cash on hand and borrowings under our unsecured revolving credit facility.

In June 2015, in a series of transactions, we purchased from TA 12 travel centers it owned and certain assets it owned at 10 properties TA leased from us for an aggregate purchase price of $227,877. We funded these acquisitions using cash on hand and borrowings under our unsecured revolving credit facility.

On June 5, 2015, we acquired 5,019,121 shares of RMR Inc. for $55,922, excluding acquisition related costs. As payment for the RMR Inc. shares, we issued 1,490,000 of our common shares valued at $43,299 and funded the remainder of the purchase price with cash on hand.  Through our acquisition of the RMR Inc. shares, we indirectly acquired an economic ownership of 16.2% of our manager RMR LLC.  We have agreed to distribute approximately half of the RMR Inc. shares we acquired to our shareholders as a special distribution, and RMR Inc. agreed to facilitate this distribution by filing a registration statement with the SEC to register those shares to be distributed and by seeking a listing of those shares on a national stock exchange.  We will not distribute our RMR Inc. shares until such a registration statement is declared effective by the SEC.

On June 9, 2015, we sold five TA branded travel centers to TAfor $45,042.  As a result of this sale, we recorded an $11,015 gain on sale of real estate in the three months ended June 30, 2015.  Net proceeds from the sale were used to partially fund our acquisition of the travel centers noted above.

On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for $85,000, excluding acquisitionrelated costs.  We funded this acquisition using cash on hand and borrowings under our unsecured revolving credit facility.

On September 23, 2015, we purchased from TA two travel centers it owned and certain assets at one property TA leased from us for an aggregate purchase price of $51,506.  We funded this acquisition using cash on hand and borrowings under our unsecured revolving credit facility.

On October 27, 2015, we entered an agreement to acquire two extended stay hotels with 262 suites in Cleveland and Westlake, OH for an aggregate purchase price of $12,000.  We expect to fund this acquisition using cash on hand and borrowings under our unsecured revolving credit facility.

On October 30, 2015, we acquired the land and certain improvements at a travel center located in Waterloo, NY we leased from a third party and subleased to TA for $15,000, excluding acquisition related costs.  We funded this acquisition using cash on hand.

In order to fund capital improvements to our properties and acquisitions and to meet cash needs that may result from timing differences between our receipt of returns and rents and our need or desire to pay operating expenses, debt service and distributions, as of September  30, 2015, we maintained a $750,000 unsecured revolving credit facility.

Our $750,000 unsecured revolving credit facility and our $400,000 unsecured term loan are both governed by a single credit agreement.  The maturity date of the unsecured revolving credit facility is July 15, 2018 and the maturity date of our $400,000unsecured term loan is April 15, 2019. Subject to the payment of an extension fee and meeting other conditions, we have an option to further extend the maturity date of the unsecured revolving credit facility by an additional one year to July 15, 2019. The credit agreement provides that we can borrow, repay and reborrow funds available under the unsecured revolving credit facility until maturity, and no principal repayment is due until maturity. Our unsecured term loan is prepayable without penalty at any time. The credit agreement for our unsecured revolving credit facility and unsecured term loan includes a feature under which the maximum borrowing availability under the facilities may be increased up to $2,300,000 on a combined basis in certain circumstances.

The interest rate paid on borrowings under the unsecured revolving credit facility is LIBOR plus a premium, which was 110 basis points as of September 30, 2015, and the facility feeon the total amount of lending commitments under the unsecured revolving credit facility was 20 basis points per annum as of September 30, 2015. The interest rate paid on borrowings under the unsecured term loan is LIBOR plus a premium, which was 120 basis points as of September 30, 2015. Both the interest rate premiums and the facility fee are subject to adjustment based upon changes to our credit ratings. As ofSeptember 30, 2015, and November 8, 2015, we had $454,000 and $384,000, respectively, outstanding under our unsecured

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revolving credit facility.  As ofSeptember 30, 2015, the annual interest rate for the amount outstanding under our unsecured revolving credit facility was 1.29%.As of both September  30, 2015 and November8, 2015, we had $400,000 outstanding under our unsecured term loan. As ofSeptember 30, 2015, the annual interest rate for the amount outstanding under our unsecured term loan was 1.40%.

Our credit agreement for our unsecured revolving credit facility and unsecured term loan provides that, with certain exceptions, a subsidiary of ours is required to guaranty our obligations under the unsecured revolving credit facility and unsecured term loan only if that subsidiary has separately incurred debt (other than nonrecourse debt), within the meaning specified in the credit agreement, or provided a guarantee of debt incurred by us or any of our other subsidiaries.

Our term debt maturities (other than our unsecured revolving credit facility and unsecured term loan) as ofSeptember 30, 2015 were as follows: $275,000 in 2016, $300,000 in 2017, $350,000 in 2018, $500,000 in 2022, $300,000 in 2023, $350,000 in 2024, $350,000 in 2025 and $8,478 in 2027.

Our $8,478 of 3.8% convertible senior unsecured notes due 2027 are convertible into our common shares, if certain conditions are met (including certain changes in control), into cash equal to the principal amount of the notes and, to the extent the market price of our common shares exceeds the exchange price of $50.50 per share, subject to adjustment, either cash or our common shares at our option with a value based on such excess amount. Holders of our convertible senior unsecured notes may require us to repurchase all or a portion of the notes on March 15, 2017 and March 15, 2022, or upon the occurrence of certain change in control events. None of our other unsecured debt obligations require principal or sinking fund payments prior to their maturity dates.

We expect to use existing cash balances, the cash flow from our operations, borrowings under our unsecured revolving credit facility, net proceeds from any property sales and net proceeds of offerings of equity or debt securities to fund future debt maturities, property acquisitions and improvements and other general business purposes. We may also seek to participate in joint ventures or other arrangements that may provide us additional sources of financing.Although we have not historically done so, we may also assume mortgage debt on properties we may acquire or obtain mortgage financing on our existing properties.

When significant amounts are outstanding for an extended period of time under our unsecured revolving credit facility and as the maturity dates of our unsecured revolving credit facility and term debts approach, we currently expect to explore alternatives for the repayment of amounts due or renewal or extension of the maturity dates. Such alternatives may include incurring additional debt, issuing new equity securities and the sale of properties. We have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities.

While we believe we will have access to various types of financings, including debt or equity, to fund our future acquisitions and to pay our debts and other obligations, there can be no assurance that we will be able to complete any debt or equity offerings or what our cost of any future public or private financings may be.

Off Balance Sheet Arrangements

As of September  30, 2015, we had no off balance sheet arrangements that have had or that we expect would be reasonably likely to have a future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Debt Covenants

Our principal debt obligations at September  30, 2015 consist of outstanding borrowings under our $750,000 unsecured revolving credit facility, our $400,000 unsecured term loan and $2,433,478 of publicly issued unsecured term debt and convertible notes. Our publicly issued unsecured term debt and convertible notes are governed by an indenture.  Our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes and convertible notes indenture and its supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business manager.  Our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes indenture and its related supplements also contain covenants which generally restrict our ability to incur debts, including debts secured by mortgages on our properties, in

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excess of calculated amounts, restrict our ability to make distributions under certain circumstances and require us to maintain various financial ratios. As of September  30, 2015, we believe we were in compliance with all of the covenants under our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes indenture and its related supplements.

Neither our credit agreement for ourunsecured revolving credit facility and unsecured term loan nor our senior unsecured notes indenture and its supplements contain provisions for acceleration which could be triggered by a change in our debt ratings. However, under our credit agreement for our unsecured revolving credit facility and unsecured term loan, our senior unsecured debt ratingsare used to determine the fees and interest rates we pay.  Accordingly, if our debt ratingsare downgraded by certain credit rating agencies, our interest expense and related costs under our unsecured revolving credit facility and unsecured term loan would increase.

Our creditagreement for our unsecured revolving credit facility and unsecured term loan has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $75,000 or more.Similarly, our senior unsecured notes indenture and its supplements contain cross default provisions to any other debts of $20,000 or more.

Management Agreements, Leases and Operating Statistics (dollar amounts in thousands)

As of September  30, 2015,  300 of our hotels are included in one of seven portfolio agreements and two hotels are not included in a portfolio and are leased to hotel operating companies. Our 193 travel centers are leased under five portfolio agreements. Our hotels are managed by or leased to separate affiliates of InterContinental, Marriott, Hyatt, Carlson, Sonesta, Wyndham and Morgans under nine agreements. Our 193 travel centers are leased to and operated by TA under five agreements.

The table and related notes on pages 36 to 38 summarize significant terms of our leases and management agreements as of September  30, 2015. The tables on pages 36 and 39 also include statistics reported to us or derived from information reported to us by our managers and tenants. These statistics include coverage of our minimum returns or minimum rents and occupancy, ADR and RevPAR for our hotel properties. We consider these statistics and the management agreement or lease security features also presented in the tables on the following pages to be important measures of our managers’ and tenants’ success in operating our properties and their ability to continue to pay us.  However, none of this third party reported information is a direct measure of our financial performance and we have not independently verified this data.

							Rent / Return Coverage (3)
		Number of			Annual		Three Months Ended		Twelve Months Ended
Operating Agreement	Number of	Rooms /			Minimum		September 30,		September 30,
Reference Name	Properties	Suites	Investment (1)		Return/Rent (2)		2015	2014	2015	2014
Marriott (No. 1) (4)	53	7,610	$	687,706	$	68,277	1.56x	1.44x	1.29x	1.15x
Marriott (No. 234)(5)	68	9,120		1,000,439		106,243	1.20x	1.11x	1.07x	0.95x
Marriott (No. 5) (6)	1	356		90,078		10,116	0.45x	0.41x	0.51x	0.27x
Subtotal / Average Marriott	122	17,086		1,778,223		184,636	1.29x	1.19x	1.12x	0.99x
InterContinental (7)	93	14,182		1,545,639		149,778	1.25x	1.15x	1.18x	1.07x
Sonesta(8)	31	5,831		1,070,123		81,433	0.66x	0.62x	0.69x	0.55x
Wyndham (9)	22	3,579		380,755		27,843	1.09x	1.04x	0.87x	0.65x
Hyatt (10)	22	2,724		301,942		22,037	1.17x	0.99x	1.04x	0.94x
Carlson (11)	11	2,090		209,895		12,920	1.55x	1.35x	1.30x	1.00x
Morgans (12)	1	372		120,000		7,595	1.63x	1.72x	1.09x	1.07x
Subtotal / Average Hotels	302	45,864		5,406,577		486,242	1.17x	1.08x	1.05x	0.93x
TA (No. 1) (13)	39	N/A		624,476		48,295	1.78x	1.71x	1.85x	1.54x
TA (No. 2) (14)	38	N/A		599,684		46,765	1.82x	1.74x	1.98x	1.66x
TA (No. 3) (15)	38	N/A		584,339		49,613	1.73x	1.99x	1.97x	1.81x
TA (No. 4) (16)	38	N/A		523,361		46,297	1.76x	1.87x	1.97x	1.74x
TA (No. 5) (17)	40	N/A		808,306		62,949	1.68x	1.69x	1.87x	1.58x
Subtotal / Average TA	193	N/A		3,140,166		253,919	1.75x	1.79x	1.92x	1.65x
Total / Average	495	45,864	$	8,546,743	$	740,161	1.36x	1.32x	1.34x	1.17x

(1) Represents the historical cost of our properties plus capital improvements funded by us less impairment writedowns, if any, and excludes capital improvements made from FF&E reserves funded from hotel operations.

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(2) Each of our management agreements or leases provides for payment to us of an annual minimum return or minimum rent, respectively. Certain of these minimum payment amounts are secured by full or limited guarantees or security deposits as more fully described below. In addition, certain of our hotel management agreements provide for payment to us of additional amounts to the extent of available cash flow as defined in the management agreement. Payments of these additional amounts are not guaranteed or secured by deposits.  Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments necessary to record rent on a straight line basis.

(3) We define coverage as combined total property level revenues minus the required FF&E reserve escrows, if any, and all property level expenses which are not subordinated to minimum returns and minimum rent payments to us (which data is provided to us by our managers or tenants), divided by the minimum return or minimum rent payments due to us. Coverage amounts for our Sonesta, InterContinental and TA Nos. 1, 2, 3 and 4 agreements include data for periods prior to our ownership of certain properties.

(4) We lease 53 Courtyard by Marriott® branded hotels in 24 states to one of our TRSs.  The hotels are managed by a subsidiary of Marriott under a combination management agreement which expires in 2024; Marriott has two renewal options for 12 years each for all, but not less than all, of the hotels.

We have no security deposit or guaranty from Marriott for these 53 hotels.  Accordingly, payment by Marriott of the minimum return due to us under this management agreement is limited to available hotel cash flow after payment of operating expenses and funding of the FF&E reserve.  In addition to our minimum return, this agreement provides for payment to us of 50% of available cash flow after payment of hotel operating expenses, funding of the required FF&E reserve, payment of our minimum return and payment of certain management fees.

(5) We lease 68 of our Marriott branded hotels (one full service Marriott®, 35 Residence Inn by Marriott®, 18 Courtyard by Marriott®, 12 TownePlace Suites by Marriott® and two SpringHill Suites by Marriott® hotels) in 22 states to one of our TRSs.  The hotels are managed by subsidiaries of Marriott under a combination management agreement which expires in 2025; Marriott has two renewal options for 10 years each for all, but not less than all, of the hotels.

We originally held a security deposit of $64,700 under this agreement.  As of September 30, 2015, the available balance of this security deposit was $7,389.  This security deposit may be replenished from future cash flows from these hotels in excess of our minimum return and certain management fees.  Marriott has also provided us with a $40,000 limited guaranty for payment shortfalls up to 90% of our minimum return after the available security deposit has been depleted, which expires in 2019.  As ofSeptember 30, 2015, the available Marriott guaranty was $30,672.

In addition to our minimum return, this agreement provides for payment to us of 62.5% of excess cash flow after payment of hotel operating expenses, funding of the required FF&E reserve, payment of our minimum return, payment of certain management fees and replenishment of the security deposit. This additional return amount is not guaranteed or secured by the security deposit.

(6) We lease one Marriott® branded hotel in Kauai, HI to a subsidiary of Marriott under a lease that expires in 2019; Marriott has four renewal options for 15 years each. This lease is guaranteed by Marriott and provides for increases in the annual minimum rent payable to us based on changes in the consumer price index.

(7) We lease 92 InterContinental branded hotels (19 Staybridge Suites®, 61 Candlewood Suites®, two InterContinental®, seven Crowne Plaza® and three Holiday Inn® hotels) in 27 states in the U.S. and Ontario, Canada to one of our TRSs.  These 92 hotels are managed by subsidiaries of InterContinental under a combination management agreement.  We lease one additional InterContinental® branded hotel in Puerto Rico to a subsidiary of InterContinental. The annual minimum return amount presented in the table on page 36 includes $7,848 of minimum rent related to the leased Puerto Rico hotel.  The management agreement and the lease expire in 2036; InterContinental has two renewal options for 15 years each for all, but not less than all, of the hotels.

We originally held a security deposit of $73,872 under this agreement.  As ofSeptember 30, 2015, we have applied $28,197 of the security deposit to cover shortfalls in the payments of our minimum return and rent.  As ofSeptember 30, 2015, the balance of this security deposit was $45,675.  This security deposit may be replenished and increased up to $100,000 from future cash flows from these hotels in excess of our minimum return and rent and certain management fees.

Under this agreement, InterContinental is required to maintain a minimum security deposit of $37,000. On January 6, 2014, we entered into a letter agreement with InterContinental under which the minimum security deposit balance required to be maintained during 2015 will be reduced by two dollars for every dollar of additional security deposit InterContinental provides to us.  As of September 30, 2015, InterContinental had not provided us any additional security deposits.  In addition to our minimum return, this management agreement provides for an annual additional return payment to us of $12,067 to the extent of available cash flow after payment of hotel operating expenses, funding of the required FF&E reserve, if any, payment of our minimum return, payment of certain management fees and replenishment and expansion of the security deposit. 

In addition, the agreement provides for payment to us of 50% of the available cash flow after payment to us of the annual additional return amount.  These additional return amounts are not guaranteed or secured by the security deposit we hold.

(8) We lease our 31 Sonesta branded hotels (four Royal Sonesta®, four Sonesta® and 23 Sonesta ES Suites® hotels) in 18 states to one of our TRSs.  The hotels are managed by Sonesta under a combination management agreement which expires in 2037; Sonesta has two renewal options for 15 years each for all, but not less than all, of the hotels.

We have no security deposit or guaranty from Sonesta.  Accordingly, payment by Sonesta of the minimum return due to us under this management agreement is limited to available hotel cash flow after the payment of operating expenses, including certain management fees, and we are financially responsible for operating cash flow deficits, if any.

In addition to our minimum return, this management agreement provides for payment to us of 80% of available cash flow after payment of hotel operating expenses, management fees to Sonesta, our minimum return, an imputed FF&E reserve to us and reimbursement of operating loss or working capital advances, if any.

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(9) We lease our 22 Wyndham branded hotels (six Wyndham Hotels and Resorts® and 16 Hawthorn Suites® hotels) in 14 states to one of our TRSs.  The hotels are managed by a subsidiary of Wyndham under a combination management agreement which expires in 2038; Wyndham has two renewal options for 15 years each for all, but not less than all, of the hotels.  We also lease 48 vacation units in one of the hotels to Wyndham Vacation under a lease that expires in 2037; Wyndham Vacation has two renewal options for 15 years each for all, but not less than all, of the vacation units.  The lease is guaranteed by Wyndham and provides for rent increases of 3% per annum. The annual minimum return amount presented in the table on page 36 includes $1,326 of minimum rent related to the Wyndham Vacation lease.

We had a guaranty of $35,656 under this agreement for payment shortfalls of the minimum return, subject to an annual payment limit of $17,828.  As ofSeptember 30, 2015, the available Wyndham guaranty was $5,287.  This guaranty expires in 2020.

In addition to our minimum return, this management agreement provides for payment to us of 50% of available cash flow after payment of hotel operating expenses, payment of our minimum return, funding of the FF&E reserve, if any, payment of certain management fees and reimbursement of any Wyndham guaranty advances.  This additional return amount is not guaranteed.  Amounts reimbursed to Wyndham for guaranty advances replenish the amount of the Wyndham guaranty available to us.

(10) We lease our 22 Hyatt Place® branded hotels in 14 states to one of our TRSs.  The hotels are managed by a subsidiary of Hyatt under a combination management agreement that expires in 2030; Hyatt has two renewal options for 15 years each for all, but not less than all, of the hotels.

We originally had a guaranty of $50,000 under this agreement for payment shortfalls of our minimum return.  As ofSeptember 30, 2015, the available Hyatt guaranty was $14,893.  The guaranty is limited in amount but does not expire in time and may be replenished from future cash flows from the hotels in excess of our minimum return.

In addition to our minimum return, this management agreement provides for payment to us of 50% of available cash flow after payment of operating expenses, funding the required FF&E reserve, payment of our minimum return and reimbursement to Hyatt of working capital and guaranty advances, if any.  This additional return is not guaranteed.

(11) We lease our 11 Carlson branded hotels (five Radisson® Hotels & Resorts, one Park Plaza® Hotels & Resorts and five Country Inns & Suites® hotels) in seven states to one of our TRSs.  The hotels are managed by a subsidiary of Carlson under a combination management agreement that expires in 2030; Carlson has two renewal options for 15 years each for all, but not less than all, of the hotels.

We originally had a limited guaranty of $40,000 under this agreement for payment shortfalls of our minimum return.  As ofSeptember 30, 2015, the available Carlson guaranty was $25,580.  The guaranty is limited in amount but does not expire in time and may be replenished from future cash flows from the hotels in excess of our minimum return.

In addition to our minimum return, this management agreement provides for payment to us of 50% of available cash flow after payment of operating expenses, funding the required FF&E reserve, payment of our minimum return and reimbursement to Carlson of working capital and guaranty advances, if any.  This additional return is not guaranteed.

(12) We lease the Clift Hotel, a full service hotel in San Francisco, CA, to a subsidiary of Morgans under a lease agreement that expires in 2103. The lease currently provides for annual rent to us of $7,595.  On October 14, 2019, and on each fifth anniversary thereafter during the lease term, the rent due to us will be increased based on changes in the consumer price index with minimum increases of 10% and maximum increases of 20%.  Although the contractual lease terms would qualify this lease as a direct financing lease under GAAP, we account for this lease as an operating lease due to uncertainty regarding the collection of future rent increases and we recognize rental income from this lease on a cash basis, in accordance with GAAP.

(13) We lease 39 travel centers (36 TravelCenters of America® branded travel centers and three Petro Stopping Centers® branded travel centers) in 29 states to a subsidiary of TA under a lease that expires in 2029;TA has two renewal options for 15 years each for all, but not less than all, of these travel centers.  In addition to the payment of our minimum rent, beginning in 2016, this lease agreement provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent obligation of $27,421 of $150,000 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.

(14) We lease 38 travel centers (37 TravelCenters of America® branded travel centers and one Petro Stopping Centers®)  in 27 states to a subsidiary of TA under a lease that expires in 2028; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers.  In addition to the payment of our minimum rent, beginning in 2016, this lease agreement provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent obligation of $29,107 of $150,000 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.

(15) We lease 38 TravelCenters of America® branded travel centers in 29 states to a subsidiary of TA under a lease that expires in 2026; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers.  In addition to the payment of our minimum rent, beginning in 2016, this lease agreement provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues).TA’s previously deferred rent obligation of $29,324 of $150,000 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.

(16) We lease 38 travel centers (36 TravelCenters of America® branded travel centers and two Petro Stopping Centers® branded travel centers) in 28 states to a subsidiary of TA under a lease that expires in 2030; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers.  In addition to the payment of our minimum rent, beginning in 2016, this lease agreement provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2015 non-fuel revenues). TA’s previously deferred rent obligation of $21,233 of $150,000 is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.

(17) We lease 40 Petro Stopping Centers® branded travel centers in 25 states to a subsidiary of TA under a lease that expires in 2024; TA has two renewal options for 15 years each for all, but not less than all, of these travel centers.  In addition to the payment of our minimum rent, this lease agreement

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provides for payment to us of percentage rent based on increases in total non-fuel revenues over base year levels (3% of non-fuel revenues above 2012 non-fuel revenues).  We have agreed to waive payment of the first $2,500 of percentage rent that may become due under the TA No. 5 agreement. We have waived $1,826 of percentage rent as ofSeptember 30, 2015.  TA’s previously deferred rent obligation of $42,915 of $150,000 is due at the expiration of this lease. This lease is guaranteed by TA.

The following tables summarize the operating statistics, including ADR, occupancy and RevPAR reported to us by our hotel managers or tenants by management agreement or lease for the periods indicated. All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods. We have not independently verified our managers’ or tenants’ operating data.

		No. of
	No. of	Rooms /		Three Months Ended September30, (1)					Nine Months Ended September30, (1)
	Hotels	Suites		2015		2014	Change		2015		2014	Change
ADR
Marriott (No. 1)	53	7,610	$	130.38	$	123.13	5.9%	$	129.15	$	121.31	6.5%
Marriott (No. 234)	68	9,120		128.66		120.55	6.7%		127.52		117.93	8.1%
Marriott (No. 5)	1	356		243.56		226.07	7.7%		239.67		223.05	7.5%
Subtotal / Average Marriott	122	17,086		132.00		124.23	6.3%		130.91		121.94	7.4%
InterContinental  (1)	93	14,182		109.97		102.62	7.2%		109.68		102.12	7.4%
Sonesta (1)	31	5,831		140.76		138.54	1.6%		142.39		137.44	3.6%
Wyndham	22	3,579		100.04		90.61	10.4%		97.78		87.92	11.2%
Hyatt	22	2,724		105.43		101.61	3.8%		107.31		100.99	6.3%
Carlson	11	2,090		111.22		102.64	8.4%		109.15		99.36	9.9%
Morgans	1	372		287.76		268.49	7.2%		271.12		257.06	5.5%
All Hotels Total / Average	302	45,864	$	122.24	$	115.15	6.2%	$	121.63	$	113.42	7.2%
OCCUPANCY
Marriott (No. 1)	53	7,610		76.6%		76.2%	0.4 pts		72.5%		71.5%	1.0 pts
Marriott (No. 234)	68	9,120		78.8%		78.8%	0.0 pts		76.5%		76.0%	0.5 pts
Marriott (No. 5)	1	356		84.0%		90.6%	-6.6 pts		86.2%		86.7%	-0.5 pts
Subtotal / Average Marriott	122	17,086		77.9%		77.9%	0.0 pts		74.9%		74.2%	0.7 pts
InterContinental  (1)	93	14,182		85.9%		85.8%	0.1 pts		83.7%		83.4%	0.3 pts
Sonesta (1)	31	5,831		69.8%		67.1%	2.7 pts		69.1%		63.7%	5.4 pts
Wyndham	22	3,579		75.4%		75.2%	0.2 pts		72.1%		70.0%	2.1 pts
Hyatt	22	2,724		82.1%		78.4%	3.7 pts		80.0%		79.0%	1.0 pts
Carlson	11	2,090		76.4%		77.1%	-0.7 pts		75.1%		73.9%	1.2 pts
Morgans	1	372		96.5%		97.2%	-0.7 pts		92.5%		91.9%	0.6 pts
All Hotels Total / Average	302	45,864		79.5%		78.9%	0.6 pts		77.1%		75.8%	1.3 pts
RevPAR
Marriott (No. 1)	53	7,610	$	99.87	$	93.83	6.4%	$	93.63	$	86.74	7.9%
Marriott (No. 234)	68	9,120		101.38		94.99	6.7%		97.55		89.63	8.8%
Marriott (No. 5)	1	356		204.59		204.82	-0.1%		206.60		193.38	6.8%
Subtotal / Average Marriott	122	17,086		102.83		96.78	6.3%		98.05		90.48	8.4%
InterContinental  (1)	93	14,182		94.46		88.05	7.3%		91.80		85.17	7.8%
Sonesta (1)	31	5,831		98.25		92.96	5.7%		98.39		87.55	12.4%
Wyndham	22	3,579		75.43		68.14	10.7%		70.50		61.54	14.6%
Hyatt	22	2,724		86.56		79.66	8.7%		85.85		79.78	7.6%
Carlson	11	2,090		84.97		79.14	7.4%		81.97		73.43	11.6%
Morgans	1	372		277.69		260.97	6.4%		250.79		236.24	6.2%
All Hotels Total / Average	302	45,864	$	97.18	$	90.85	7.0%	$	93.78	$	85.97	9.1%

⁽¹⁾ Operating data includes data for periods prior to our ownership of certain hotels.

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Seasonality

Our hotels and travel centers have historically experienced seasonal differences typical of their industries with higher revenues in the second and third quarters of calendar years compared with the first and fourth quarters. This seasonality is not expected to cause material fluctuations in our income or cash flow because most of our management agreements and leases require our managers and tenants to make the substantial portion of our return payments and rents to us in equal amounts throughout a year. Seasonality may affect our hotel operating revenues and our net cash flows from our Sonesta managed hotels and our hotels included in our Marriott No. 1 agreement, but we do not expect seasonal variations to have a material impact upon our financial results of operations or upon our managers’ or tenants’ abilities to meet their contractual obligations to us.

Related Person Transactions

We have relationships and historical and continuing transactions with TA, Sonesta, RMR Inc., RMR LLC and others related to them, including with other companies to which RMR LLC provides management services and which have trustees, directors and officers who are also trustees, directors or officers of us, RMR LLC or RMR Inc.  For further information about these and other such relationships and related person transactions, please see Note 10 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, our 2014 Annual Report, our definitive Proxy Statement for our 2015 Annual Meeting of Shareholders, our Current Reports on Form 8-K filed with the SEC on June 5, 8, 12, 22 and 25, July 28 and September 23, 2015, and our other filings with the SEC.  In addition, please see the section captioned “Risk Factors” of our 2014 Annual Report for a description of risks that may arise as a result of these related person transactions and relationships.  Our filings with the SEC are available at the SEC’s website at www.sec.gov.  Copies of certain of our agreements with these related parties are publicly available as exhibits to our public filings with the SEC and accessible at the SEC’s website, www.sec.gov.  

We believe that our agreements with related persons are on commercially reasonable terms.  We also believe that our relationships with our related persons and their affiliated and related persons and entities benefit us and, in fact, provide us with competitive advantages in operating and growing our business.  We may engage in additional transactions with related persons, including TA, Sonesta and businesses to which RMR LLC or its affiliates provide management services.  

Financial information about TA may be found on the SEC’s website by entering TA’s name at http://www.sec.gov/edgar/searchedgar/companysearch.html.  Reference to TA’s financial information on this external website is presented to comply with applicable accounting regulations of the SEC.  Except for such financial information contained therein as is required to be included herein under such regulations, TA’s public filings and other information located in external websites are not incorporated by reference into this Quarterly Report on Form 10-Q.

Non-GAAP Measures

Funds From Operations Available for Common Shareholders and Normalized Funds From Operations Available for Common Shareholders

We calculate funds from operations available for common shareholders, or FFO, and Normalized FFO available for common shareholders as shown below.  FFO available for common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or NAREIT, which is net income available for common shareholders, calculated in accordance with GAAP, excluding any gain or loss on sale of properties and loss on impairment of real estate assets, plus real estate depreciation and amortization, as well as certain other adjustments currently not applicable to us.  Our calculation of Normalized FFO available for common shareholders differs from NAREIT’s definition of FFO available for common shareholders because we include estimated percentage rent in the period to which we estimate that it relates rather than when it is recognized as income in accordance with GAAP, we include estimated business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as expense in accordance with GAAP and we exclude acquisition related costs and loss on early extinguishment of debt.  We consider FFO available for common shareholders and Normalized FFO available for common shareholders to be appropriate measures of operating performance for a REIT, along with net income, net income available for common shareholders, operating income and cash flow from operating activities.  We believe that FFO available for common shareholders and Normalized FFO available for common shareholders provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO available for common shareholders and Normalized FFO available for common shareholders may

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facilitate a comparison of our operating performance between periods and with other REITs.  FFO available for common shareholders and Normalized FFO available for common shareholders are among the factors considered by our Board of Trustees when determining the amount of distributions to shareholders.  Other factors include, but are not limited to, requirements to maintain our status as a REIT, limitations in our unsecured revolving credit facility and unsecured term loan agreement and public debt covenants, the availability of debt and equity capital, our expectation of our future capital requirements and operating performance, and our expected needs for and availability of cash to pay our obligations. FFO available for common shareholders and Normalized FFO available for common shareholders do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income, operating income, net income available for common shareholders or cash flow from operating activities determined in accordance with GAAP, or as indicators of our financial performance or liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of our needs.  These measures should be considered in conjunction with net income, operating income, net income available for common shareholders and cash flow from operating activities as presented in our condensed consolidated statements of comprehensive income and condensed consolidated statements of cash flows.  Other real estate companiesandREITsmay calculate FFO available for common shareholders and Normalized FFO available for common shareholders differently than we do.

Our calculations of FFO available for common shareholders and Normalized FFO available for common shareholders for the three and nine months ended September  30, 2015 and 2014 and reconciliations of FFO available for common shareholders and Normalized FFO available for common shareholders to net income available for common shareholders, the most directly comparable financial measure under GAAP reported in our condensed consolidated financial statements,appear in the following table (amounts in thousands, except per share amounts):

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2015		2014		2015		2014
Net income available for common shareholders		$	56,019	$	44,031	$	170,414	$	125,164
Add (Less):	Depreciation and amortization expense		84,261		79,649		243,812		236,699
	Gain on sale of real estate (1)		-		-		(11,015)		(130)
FFO available for common shareholders			140,280		123,680		403,211		361,733
Add (Less):	Acquisition related costs (2)		851		14		1,986		237
	Deferred percentage rent (3)		-		557		-		2,129
	Estimated business management incentive fees (4)		8,561		4,778		17,383		6,951
	Loss on early extinguishment of debt (5)		-		129		-		855
Normalized FFO available for common shareholders		$	149,692	$	129,158	$	422,580	$	371,905
Weighted average shares outstanding (basic)			151,359		149,665		150,476		149,616
Weighted average shares outstanding (diluted) (6)			151,386		150,007		150,863		149,834
Basic and diluted per common share amounts:
	FFO available for common shareholders (basic)	$	0.93	$	0.83	$	2.68	$	2.42
	FFO available for common shareholders (diluted)	$	0.93	$	0.82	$	2.67	$	2.41
	Normalized FFO available for common shareholders (basic)	$	0.99	$	0.86	$	2.81	$	2.49
	Normalized FFO available for common shareholders (diluted)	$	0.99	$	0.86	$	2.80	$	2.48
Distributions declared per share		$	0.50	$	0.49	$	0.99	$	0.97

(1) We recorded an $11,015 gain on sale of real estate in the second quarter of 2015 in connection with the sale of five travel centers.  We recorded a $130 gain on sale of real estate in the second quarter of 2014 in connection with the sale of one hotel.

(2) Represents costs associated with our acquisition activities.

(3) In calculating net income in accordance with GAAP, we generally recognize percentage rental income received for the first, second and third quarters in the fourth quarter, which is when all contingencies have been met and the income is

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earned. In calculating net income in accordance with GAAP for the second quarter of 2015, we recognized $2,048 of percentage rent as a result of the modification of our travel center leases.

(4) Estimated incentive fees under our business management agreement calculated based on common share total return, as defined,  are included in general and administrative expense in our condensed consolidated financial statements.  In calculating net income in accordance with GAAP, we recognize estimated business management incentive fee expense, if any, each quarter.  Although we recognize this expense, if any, each quarter for purposes of calculating net income, we do not include these amounts in the calculation of Normalized FFO available for common shareholders until the fourth quarter, which is when the actual expense amount for the year is determined.  Incentive fees for 2015, if any, will be paid in cash in January 2016.

(5) We recorded a $726 loss on early extinguishment of debt in the first quarter of 2014 in connection with amending the terms of our unsecured revolving credit facility and unsecured term loan and the redemption of certain senior unsecured notes. We recorded a $129 loss on early extinguishment of debt in the third quarter of 2014 in connection with our redemption of certain senior unsecured notes.

(6) Represents weighted average common shares adjusted to reflect the potential dilution of unvested share awards and contingently issuable common shares under our business management agreement with RMR LLC.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk (dollar amounts in thousands)

We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Our strategy to manage exposure to changes in interest rates has not materially changed since December 31, 2014. Other than as described below, we do not currently foresee any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.

As of September 30, 2015, our outstanding publicly tradable debt consisted of seven issues of fixed rate, senior unsecured notes and one issue of fixed rate, convertible senior unsecured notes:

Principal Balance		Annual Interest Rate	Annual Interest Expense		Maturity	Interest Payments Due
$	275,000	6.300%		17,325	2016	Semi-Annually
	300,000	5.625%		16,875	2017	Semi-Annually
	350,000	6.700%		23,450	2018	Semi-Annually
	500,000	5.000%		25,000	2022	Semi-Annually
	300,000	4.500%		13,500	2023	Semi-Annually
	350,000	4.650%		16,275	2024	Semi-Annually
	350,000	4.500%		15,750	2025	Semi-Annually
	8,478	3.800%		322	2027 (1)	Semi-Annually
$	2,433,478		$	128,497

(1) The convertible senior unsecured notes are convertible, if certain conditions are met (including certain changes in control), into cash equal to the principal amount of the notes and, to the extent the market price of our common shares exceeds the initial exchange price of $50.50 per share, subject to adjustment, either cash or our common shares at our option with a value based on such excess amount. Holders of our convertible senior unsecured notes may require us to repurchase all or a portion of the notes on March 15, 2017 and March 15, 2022, or upon the occurrence of certain change in control events.

Except as described in note 1 to the table above, no principal repayments are due under these notes until maturity. Because these notes require interest at fixed rates, changes in market interest rates during the term of these debts will not affect our interest obligations. If these notes were refinanced at interest rates which are 100 basis points higher than the rates shown above, our per annum interest cost would increase by approximately $24,335. Changes in market interest rates would affect the fair value of our fixed rate debt obligations; increases in market interest rates decrease the fair value of our fixed rate debt while decreases in market interest rates increase the fair value of our fixed rate debt. Based on the balances outstanding at September 30, 2015 and discounted cash flow analyses through the respective maturity dates, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligations, a hypothetical immediate 100 basis point change in interest rates would change the fair value of those debt obligations by approximately $87,250. Changes in the trading price of our common shares may also affect the fair value of our convertible senior unsecured notes.

Each of these fixed rate unsecured debt arrangements allows us to make repayments earlier than the stated maturity date. We are generally allowed to make prepayments only at a premium equal to a make whole amount, as defined, which is generally designed to preserve a stated yield to the note holder. Also, we have in the past repurchased and retired some of our outstanding debts and we may do so again in the future. These prepayment rights and our ability to repurchase and retire outstanding debt may afford us opportunities to mitigate the risks of refinancing our debts at their maturities at higher rates by refinancing prior to maturity.

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At September  30, 2015, our floating rate debt consisted of $454,000 outstanding under our $750,000 unsecured revolving credit facility and our $400,000 unsecured term loan. The maturity date of our unsecured revolving credit facility is July 15, 2018, and subject to our meeting certain conditions, including our payment of an extension fee, we have the option to extend the stated maturity by one year to July 15, 2019. The maturity date of our unsecured term loan is April 15, 2019. No principal repayments are required under our unsecured revolving credit facility prior to maturity, and repayments may be made, and redrawn subject to conditions at any time without penalty.  No principal prepayments are required under our unsecured term loan prior to maturity and repayments may be made subject to conditions at any time without penalty, but after amounts outstanding under our unsecured term loan are repaid, amounts may not be redrawn. Borrowings under our unsecured revolving credit facility and unsecured term loan are in U.S. dollars and require interest at LIBOR plus premiums that are subject to adjustment based upon changes to our credit ratings. Accordingly, we are vulnerable to changes in U.S. dollar based short term interest rates, specifically LIBOR.  In addition, upon renewal or refinancing of our unsecured revolving credit facility or our unsecured term loan, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit characteristics. Generally, a change in interest rates would not affect the value of this floating rate debt but would affect our operating results.

The following table presents the impact a 100 basis points increase in interest rates would have on our annual floating rate interest expense as of September 30, 2015:

	Impact of Increase in Interest Rates
	Interest Rate	Outstanding		Total Interest		Annual Per Common
	Per Year (1)	Debt		Expense Per Year		Share Impact (2)
At September 30, 2015	1.34%	$	854,000	$	11,444	$	0.08
100 basis point increase	2.34%	$	854,000	$	19,984	$	0.13

(1) Weighted average based on the outstanding borrowings as of September  30, 2015.

(2) Based on diluted weighted average shares outstanding for the nine months ended September  30, 2015.

The following table presents the impact that a 100 basis point increase in interest rates would have on our annual floating rate interest expense at September 30, 2015 if we were fully drawn on our unsecured revolving credit facility and unsecured term loan remained outstanding:

	Impact of Increase in Interest Rates
	Interest Rate	Outstanding	Total Interest		Annual Per Common
	Per Year (1)	Debt	Expense Per Year		Share Impact (2)
At September 30, 2015	1.33%	$1,150,000	$	15,295	$	0.10
100 basis point increase	2.33%	$1,150,000	$	26,795	$	0.18

(1) Weighted average based on the (assuming fully drawn) outstanding borrowings as of September  30, 2015.

(2) Based on diluted weighted average shares outstanding for the nine months ended September  30, 2015.

The foregoing two tables show the impact of an immediate change in floating interest rates. If interest rates were to change gradually over time, the impact would be spread over time. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amounts under our unsecured revolving credit facility and unsecured term loan or other floating rate debt, if any. Although we have no present plans to do so, we may in the future enter into hedge arrangements from time to time to mitigate our exposure to changes in interest rates.

Item 4.  Controls and Procedures

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, President and Chief Operating Officer and Treasurer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to the Securities Exchange Act of 1934, as amended, Rules 13a-15 and 15d-15. Based upon that evaluation, our Managing Trustees, President and Chief Operating Officer and Treasurer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10‑Q CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:

· OUR HOTEL MANAGERS’ OR TENANTS’ ABILITIES TO PAY THE CONTRACTUAL AMOUNTS OF RETURNS OR RENTS DUE TO US,

· OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND THE AMOUNT OF SUCH DISTRIBUTIONS,

· OUR INTENT TO MAKE IMPROVEMENTS TO CERTAIN OF OUR PROPERTIES AND THE SUCCESS OF OUR HOTEL RENOVATION PROGRAM,

· OUR ABILITY TO MAKE ACQUISITIONS OF PROPERTIES AND OTHER INVESTMENTS,

· OUR ABILITY TO RETAIN QUALIFIED MANAGERS AND TENANTS FOR OUR HOTELS AND TRAVEL CENTERS ON SATISFACTORY TERMS,

· OUR ABILITY TO RAISE EQUITY OR DEBT CAPITAL,

· THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR UNSECURED REVOLVING CREDIT FACILITY,

· OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,

· OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT ANDEQUITY CAPITAL,

· OUR CREDIT RATINGS,

· OUR POLICIES AND PLANS REGARDING INVESTMENTS AND FINANCINGS,

· THE ABILITY OF TA TO PAY CURRENT AND DEFERRED RENT AMOUNTS DUE TO US,

· OUR EXPECTATION THAT WE WILL BENEFIT FROM OUR OWNERSHIP OF RMR INC.,

· OUR EXPECTATION THAT WE WILL BENEFIT FROM OUR OWNERSHIP OF AIC AND OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY AIC,

· OUR TAX STATUS AS A REIT,  

· OUR EXPECTED DISTRIBUTION OF RMR INC. CLASS A COMMON STOCK TO OUR SHAREHOLDERS, AND

· OTHER MATTERS.

OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FFO AVAILABLE FOR COMMON

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SHAREHOLDERS, NORMALIZED FFO AVAILABLE FOR COMMON SHAREHOLDERS, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:

· THE IMPACT OF CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR MANAGERS AND TENANTS,

· COMPETITION WITHIN THE REAL ESTATE, HOTEL AND TRAVEL CENTER INDUSTRIES, PARTICULARLY IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED,

· COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS AFFECTING THE REAL ESTATE, HOTEL, TRANSPORTATION AND TRAVEL CENTER INDUSTRIES, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,

· LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES,

· ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL, AND

· ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR MANAGING TRUSTEES, TA, SONESTA, RMR INC., RMR LLC, AIC AND THEIR RELATED PERSONS AND ENTITIES.

FOR EXAMPLE:

· OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS AND THE CAPITAL COSTS WE INCUR TO MAINTAIN OUR PROPERTIES. WE MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON AND PREFERRED SHARES AND FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED,

· THE SECURITY DEPOSITS WHICH WE HOLD ARE NOT IN SEGREGATED CASH ACCOUNTS OR OTHERWISE SEPARATE FROM OUR OTHER ASSETS AND LIABILITIES. ACCORDINGLY, WHEN WE RECORD INCOME BY REDUCING OUR SECURITY DEPOSIT LIABILITIES, WE DO NOT RECEIVE ANY ADDITIONAL CASH PAYMENT. BECAUSE WE DO NOT RECEIVE ANY ADDITIONAL CASH PAYMENT AS WE APPLY SECURITY DEPOSITS TO COVER PAYMENT SHORTFALLS, THE FAILURE OF OUR MANAGERS OR TENANTS TO PAY MINIMUM RETURNS OR RENTS DUE TO US MAY REDUCE OUR CASH FLOWS AND OUR ABILITY TO PAY DISTRIBUTIONS TO SHAREHOLDERS,

· WE EXPECT THAT MARRIOTT WILL PAY US UP TO 90% OF OUR MINIMUM RETURNS UNDER A LIMITED GUARANTY IF AND AFTER WE DEPLETE THE SECURITY DEPOSIT WE HOLD FOR ANY PAYMENT SHORTFALLS UNDER THE MARRIOTT NO. 234 AGREEMENT. THIS STATEMENT IMPLIES THAT MARRIOTT WILL FULFILL ITS OBLIGATION UNDER THIS GUARANTY OR THAT FUTURE SHORTFALLS IN THE MINIMUM RETURNS DUE TO US FROM OUR HOTELS MANAGED BY MARRIOTT WILL NOT EXHAUST THE GUARANTY OR SECURITY DEPOSIT WE HOLD. HOWEVER, THIS GUARANTY IS LIMITED IN AMOUNT AND EXPIRES ON DECEMBER 31, 2019, AND WE CAN PROVIDE NO ASSURANCE WITH REGARD TO MARRIOTT’S FUTURE ACTIONS OR THE FUTURE PERFORMANCE OF OUR HOTELS TO WHICH THE MARRIOTT LIMITED GUARANTY APPLIES OR AFTER MARRIOTT’S GUARANTY EXPIRES,

· WE EXPECT THAT INTERCONTINENTAL WILL CONTINUE TO PAY US THE MINIMUM RETURNS INCLUDED IN OUR MANAGEMENT AGREEMENT WITH INTERCONTINENTAL AND THAT WE WILL UTILIZE THE SECURITY DEPOSIT WE HOLD FOR ANY PAYMENT SHORTFALLS. HOWEVER, THE SECURITY DEPOSIT WE HOLD FOR INTERCONTINENTAL’S OBLIGATIONS IS FOR A LIMITED AMOUNT AND WE CAN PROVIDE NO ASSURANCE THAT THE SECURITY

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DEPOSIT WILL BE ADEQUATE TO COVER FUTURE SHORTFALLS IN THE MINIMUM RETURNS DUE TO US FROM OUR HOTELS MANAGED BY INTERCONTINENTAL,

· WYNDHAM HAS AGREED TO PARTIALLY GUARANTEE ANNUAL MINIMUM RETURNS PAYABLE TO US BY WYNDHAM. WYNDHAM’S GUARANTEE IS LIMITED BY TIME TO ANNUAL MINIMUM RETURN PAYMENTS DUE THROUGH 2020, AND AS OF SEPTEMBER 30, 2015, IT IS LIMITED TO NET PAYMENTS FROM WYNDHAM OF $35.7 MILLION (OF WHICH $5.3 MILLION REMAINED AVAILABLE TO PAY US) AND IS SUBJECT TO AN ANNUAL PAYMENT LIMIT OF $17.8 MILLION. ACCORDINGLY, THERE IS NO ASSURANCE THAT WE WILL RECEIVE THE ANNUAL MINIMUM RETURNS DUE FROM OUR WYNDHAM MANAGED HOTELS DURING THE TERM OF OUR WYNDHAM AGREEMENT,

· THE ANNUAL RENT DUE TO US UNDER A LEASE WITH A SUBSIDIARY OF MORGANS IS $7.6 MILLION, SUBJECT TO FUTURE INCREASES. WE HAVE NOT RECORDED STRAIGHT LINE RENT ADJUSTMENTS UNDER THIS LEASE. WE CAN PROVIDE NO ASSURANCE THAT MORGANS WILL FULFILL ITS OBLIGATIONS UNDER THIS LEASE OR WITH REGARD TO THE FUTURE PERFORMANCE OF THE HOTEL WE LEASE TO MORGANS,

· WE HAVE RECENTLY RENOVATED CERTAIN HOTELS AND ARE CURRENTLY RENOVATING ADDITIONAL HOTELS.  WE EXPECT TO FUND APPROXIMATELY$94.5  MILLION FOR RENOVATIONS AND OTHER CAPITAL IMPROVEMENT COSTS OF OUR HOTELS DURING THE REMAINDER OF 2015 AND IN 2016.  THE COST OF CAPITAL PROJECTS ASSOCIATED WITH SUCH RENOVATIONS MAY BE GREATER THAN WE NOW ANTICIPATE. WHILE OUR FUNDING OF THESE CAPITAL PROJECTS WILL CAUSE OUR CONTRACTUAL MINIMUM RETURNS TO INCREASE, THE HOTELS’ OPERATING RESULTS MAY NOT INCREASE OR MAY NOT INCREASE TO THE EXTENT THAT THE MINIMUM RETURNS INCREASE. ACCORDINGLY, COVERAGE OF OUR MINIMUM RETURNS AT THESE HOTELS MAY REMAIN DEPRESSED FOR AN EXTENDED PERIOD,

· WE HAVE NO GUARANTEE OR SECURITY DEPOSIT FOR THE MINIMUM RETURNS DUE TO US FROM SONESTA OR UNDER OUR MARRIOTT NO. 1 AGREEMENT. ACCORDINGLY, THE FUTURE RETURNS WE RECEIVE FROM HOTELS MANAGED BY SONESTA OR MANAGED BY MARRIOTT UNDER OUR MARRIOTT NO. 1 AGREEMENT ARE ENTIRELY DEPENDENT UPON THE AVAILABLE HOTEL CASH FLOW AFTER PAYMENT OF OPERATING EXPENSES OF THOSE HOTELS,

· OTHER SECURITY DEPOSITS AND GUARANTEES REFERENCED HEREIN ARE ALSO LIMITED IN DURATION AND AMOUNT AND GUARANTEES ARE SUBJECT TO THE GUARANTORS’ ABILITY AND WILLINGNESS TO PAY,

· HOTEL ROOM DEMAND AND TRUCKING ACTIVITY ARE OFTEN REFLECTIONS OF THE GENERAL ECONOMIC ACTIVITY IN THE COUNTRY. IF ECONOMIC ACTIVITY IN THE COUNTRY DECLINES, HOTEL ROOM DEMAND AND TRUCKING ACTIVITY MAY DECLINE AND THE OPERATING RESULTS OF OUR HOTELS AND TRAVEL CENTERS MAY DECLINE, THE FINANCIAL RESULTS OF OUR HOTEL MANAGERS AND OUR TENANTS, INCLUDING TA, MAY SUFFER AND THESE MANAGERS AND TENANTS MAY BE UNABLE TO PAY OUR RETURNS OR RENTS. ALSO, CONTINUED DEPRESSED OPERATING RESULTS FROM OUR PROPERTIES FOR EXTENDED PERIODS MAY RESULT IN THE OPERATORS OF SOME OR ALL OF OUR HOTELS AND TRAVEL CENTERS BECOMING UNABLE OR UNWILLING TO MEET THEIR OBLIGATIONS OR THEIR GUARANTEES AND SECURITY DEPOSITS WE HOLD MAY BE EXHAUSTED,

· IF THE CURRENT LEVEL OF COMMERCIAL ACTIVITY IN THE COUNTRY DECLINES, IF THE PRICE OF DIESEL FUEL INCREASES SIGNIFICANTLY, IF FUEL CONSERVATION MEASURES ARE INCREASED, IF FREIGHT BUSINESS IS DIRECTED AWAY FROM TRUCKING, IF TA IS UNABLE TO EFFECTIVELY COMPETE OR OPERATE ITS BUSINESS OR FOR VARIOUS OTHER REASONS, TA MAY BECOME UNABLE TO PAY CURRENT AND DEFERRED RENTS DUE TO US,

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· OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES THAT GENERATE RETURNS OR LEASE THEM FOR RENTS WHICH EXCEED OUR OPERATING AND CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE OR TO NEGOTIATE ACCEPTABLE PURCHASE PRICES, ACQUISITION FINANCING, MANAGEMENT CONTRACTS OR LEASE TERMS FOR NEW PROPERTIES,

· CONTINGENCIES IN OUR PENDING AND FUTURE ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS MAY CHANGE,

· WE EXPECT TO ACQUIRE FROM AND LEASEBACK TO TA FIVE TRAVEL CENTERS WHICH TA IS DEVELOPING, AND THE PURCHASE AND LEASEBACK OF THESE FIVE TRAVEL CENTERS IS EXPECTED TO OCCUR AS DEVELOPMENT OF THESE TRAVEL CENTERS IS COMPLETED BEFORE JUNE 30, 2017.  TA HAS BEGUN CONSTRUCTION AT SOME, BUT NOT ALL, OF THESE TRAVEL CENTERS.  OBTAINING GOVERNMENTAL APPROVALS TO BUILD TRAVEL CENTERS IS OFTEN A COMPLEX AND TIME CONSUMING PROCESS.  WE CAN PROVIDE NO ASSURANCE THAT TA WILL OBTAIN ALL REQUIRED APPROVALS TO DEVELOP ALL FIVE TRAVEL CENTERS.  IF REQUIRED DEVELOPMENT APPROVALS ARE NOT OBTAINED OR IF CERTAIN TRAVEL CENTERS ARE NOT DEVELOPED FOR OTHER REASONS, WE MAY ACQUIRE LESS THAN FIVE TRAVEL CENTERS OR DIFFERENT TRAVEL CENTERS MAY BE AGREED FOR SALE AND LEASEBACK BETWEEN US AND TA.  IT IS DIFFICULT TO ESTIMATE THE COST TO DEVELOP NEW TRAVEL CENTERS.  WE AND TA HAVE AGREED THAT WE WILL PURCHASE THESE PROPERTIES FOR TA’S COST OF DEVELOPMENT, WHICH IS ESTIMATED TO BE UP TO APPROXIMATELY $118 MILLION, BUT THAT COST MAY BE MORE OR LESS THAN THE $118 MILLION ESTIMATE.  ALSO, CONSTRUCTION OF NEW TRAVEL CENTERS MAY BE DELAYED FOR VARIOUS REASONS SUCH AS LABOR STRIFE, WEATHER CONDITIONS, THE UNAVAILABILITY OF CONSTRUCTION MATERIALS, ETC.; AND THE PURCHASE AND LEASEBACK OF THESE TRAVEL CENTERS MAY BE DELAYED BEYOND JUNE 30, 2017,

· THE PURCHASE PRICE WE PAID FOR THE RMR INC. SHARES AND OUR ECONOMIC OWNERSHIP INTEREST IN RMR LLC ARE STATED IN THIS QUARTERLY REPORT ON FORM 10-Q. AN IMPLICATION OF THESE STATEMENTS MAY BE THAT THE RMR INC. SHARES WE EXPECT TO DISTRIBUTE TO OUR SHAREHOLDERS WILL HAVE A MARKET VALUE AT LEAST EQUAL TO THE VALUE WE PAID FOR THE RMR INC. SHARES.  IN FACT, THE VALUE OF THE RMR INC. SHARES MAY BE DIFFERENT FROM THE PRICE WE PAID FOR THE RMR INC. SHARES.  THE MARKET VALUE OF THE RMR INC. SHARES WILL DEPEND UPON VARIOUS FACTORS, INCLUDING SOME THAT ARE BEYOND OUR CONTROL, SUCH AS MARKET CONDITIONS GENERALLY AT THE TIME THE RMR INC. SHARES ARE AVAILABLE FOR TRADING.  THERE CAN BE NO ASSURANCE PROVIDED REGARDING THE PRICE AT WHICH THE RMR INC. SHARES WILL TRADE IF AND WHEN THEY ARE DISTRIBUTED AND LISTED ON A NATIONAL STOCK EXCHANGE,

· WE CURRENTLY EXPECT TO DISTRIBUTE APPROXIMATELY HALF OF THE RMR INC. SHARES WE ACQUIRED TO OUR SHAREHOLDERS.  THE PROCESS OF PREPARING A REGISTRATION STATEMENT FOR THE DISTRIBUTION OF THE RMR INC. SHARES REQUIRES EXTENSIVE LEGAL AND ACCOUNTING SERVICES.  THE REGISTRATION STATEMENT IS SUBJECT TO REVIEW BY SEC STAFF, WHICH MAY TAKE CONSIDERABLE TIME TO COMPLETE.  THE LISTING OF THE RMR INC. SHARES ON A NATIONAL STOCK EXCHANGE WILL ALSO BE SUBJECT TO THE SATISFACTION OF THE LISTING REQUIREMENTS AND APPROVAL OF THE APPLICABLE STOCK EXCHANGE.  WE CAN PROVIDE NO ASSURANCE WHEN OR IF THE REGISTRATION STATEMENT WILL BE DECLARED EFFECTIVE BY THE SEC, THAT THE RMR INC. SHARES WILL BE APPROVED FOR LISTING ON A NATIONAL STOCK EXCHANGE OR WHEN THE DISTRIBUTION OF THE RMR INC. SHARES WILL OCCUR, IF EVER,

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· THE BUSINESS MANAGEMENT AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE BEEN AMENDED AND EXTENDED FOR 20 YEAR TERMS. THE AMENDED MANAGEMENT AGREEMENTS INCLUDE TERMS WHICH PERMIT EARLY TERMINATION AND EXTENSIONS IN CERTAIN CIRCUMSTANCES.  ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR 20 YEARS OR FOR SHORTER OR LONGER TERMS,

· AT SEPTEMBER 30, 2015, WE HAD $7.4 MILLION OF CASH AND CASH EQUIVALENTS, $296.0 MILLION AVAILABLE UNDER OUR $750.0 MILLION UNSECURED REVOLVING CREDIT FACILITY AND SECURITY DEPOSITS AND GUARANTEES COVERING SOME OF OUR MINIMUM RETURNS AND RENTS. THESE STATEMENTS MAY IMPLY THAT WE HAVE ABUNDANT WORKING CAPITAL AND LIQUIDITY. HOWEVER, OUR MANAGERS AND TENANTS MAY NOT BE ABLE TO FUND MINIMUM RETURNS AND RENTS DUE TO US FROM OPERATING OUR PROPERTIES OR FROM OTHER RESOURCES; IN THE PAST AND CURRENTLY CERTAIN OF OUR TENANTS AND HOTEL MANAGERS HAVE IN FACT NOT BEEN ABLE TO PAY THE MINIMUM AMOUNTS DUE TO US FROM THEIR OPERATIONS OF OUR LEASED OR MANAGED PROPERTIES. ALSO, THE SECURITY DEPOSITS AND GUARANTEES WE HAVE TO COVER ANY SUCH SHORTFALLS ARE LIMITED IN AMOUNT AND DURATION, AND ANY SECURITY DEPOSITS WE APPLY FOR SUCH SHORTFALLS DO NOT RESULT IN ADDITIONAL CASH FLOW TO US AS WE ALREADY RECEIVED THOSE FUNDS. FURTHER, OUR PROPERTIES REQUIRE, AND WE HAVE AGREED TO PROVIDE, SIGNIFICANT FUNDING FOR CAPITAL IMPROVEMENTS, RENOVATIONS AND OTHER MATTERS. ACCORDINGLY, WE MAY NOT HAVE SUFFICIENT WORKING CAPITAL OR LIQUIDITY,

· WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,

· CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR UNSECURED REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND MEETING OTHER CUSTOMARY CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,

· ACTUAL COSTS UNDER OUR UNSECURED REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE CREDIT FACILITIES WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF OTHER FEES AND EXPENSES ASSOCIATED WITH SUCH FACILITIES,

· THE MAXIMUM BORROWING AVAILABILITY UNDER OUR UNSECURED REVOLVING CREDIT FACILITY ANDUNSECURED TERM LOAN MAY BE INCREASED TO UP TO $2.3 BILLION ON A COMBINED BASIS IN CERTAIN CIRCUMSTANCES; HOWEVER, INCREASING THE MAXIMUM BORROWING AVAILABILITY UNDER OUR UNSECURED REVOLVING CREDIT FACILITY AND UNSECURED TERM LOAN IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,

· THE MARGINS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR UNSECURED REVOLVING CREDIT FACILITY AND UNSECURED TERM LOAN AND THE FACILITY FEE PAYABLE ON OUR UNSECURED REVOLVING CREDIT FACILITY ARE BASED ON OUR CREDIT RATINGS.  FUTURE CHANGES IN OUR CREDIT RATINGS MAY CAUSE THE INTEREST AND FEES WE PAY TO CHANGE,

· WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR UNSECURED REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING CERTAIN CONDITIONS.  HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET, AND

· WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., TA, SONESTA, AIC, AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND PROVIDE US WITH COMPETITIVE ADVANTAGES IN OPERATING AND GROWING OUR BUSINESS. IN FACT, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE.

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THESE RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS ACTS OF TERRORISM, NATURAL DISASTERS, CHANGES IN OUR MANAGERS’ OR TENANTS’ REVENUES OR EXPENSES, CHANGES IN OUR MANAGERS’ OR TENANTS’ FINANCIAL CONDITIONS OR THE MARKET DEMAND FOR HOTEL ROOMS OR FUEL, OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY.

THE INFORMATION CONTAINED ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10‑Q AND IN OUR 2014 ANNUAL REPORT OR IN OUR OTHER FILINGS WITH THE SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS”, OR INCORPORATED HEREIN OR THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

STATEMENT CONCERNING LIMITED LIABILITY

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING HOSPITALITY PROPERTIES TRUST, DATED AUGUST 21, 1995, AS AMENDED AND SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF HOSPITALITY PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, HOSPITALITY PROPERTIES TRUST. ALL PERSONS DEALING WITH HOSPITALITY PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF HOSPITALITY PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

Part II Other Information

Item 1A. Risk Factors

There have been no material changes from risk factors from those we previously disclosed in our 2014 Annual Report and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer purchases of equity securities.  The following table provides information about our purchases of our equity securities during the quarter ended September 30, 2015:

							Maximum
					Total Number of		Approximate Dollar
					Shares Purchased		Value of Shares that
					as Part of Publicly		May Yet Be Purchased
	Number of Shares	Average Price			Announced Plans		Under the Plans or
Calendar Month	Purchased (1)	Paid per Share		or Programs		Programs
September 2015	16,340	$	25.62	$	—	$	—
Total	16,340	$	25.62	$	—	$	—

(1) During September 2015, all common share purchases were made to satisfy certain of our officers’ and other RMR LLC employees’ tax withholding and payment obligations in connection with the vesting of awards of our restricted common shares.  We repurchased these shares at their fair market value based upon the trading price of our common shares on the repurchase date.

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Item 6.  Exhibits

Exhibit Number	Description
3.1	Composite Copy of Amended and Restated Declaration of Trust dated as of August 21, 1995, as amended to date. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.)
3.2	Articles Supplementary dated as of June 2, 1997. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File Number 001-11527.)
3.3	Articles Supplementary dated as of January 13, 2012. (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 13, 2012.)
3.4	Amended and Restated Bylaws of the Company adopted August 7, 2015. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.)
4.1	Form of Common Share Certificate. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.)
4.2	Form of 7.125% Series D Cumulative Redeemable Preferred Share Certificate. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.)
4.3	Indenture, dated as of February 25, 1998, between the Company and State Street Bank and Trust Company. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File Number 001-11527.)
4.4	Supplemental Indenture No. 9, dated as of June 15, 2006, between the Company and U.S. Bank National Association, relating to the Company’s 6.30% Senior Notes due 2016, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, File Number 001-11527.)
4.5	Supplemental Indenture No. 10, dated as of March 7, 2007, between the Company and U.S. Bank National Association, relating to the Company’s 3.80% Convertible Senior Notes due 2027, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K dated March 2, 2007, File Number 001-11527.)
4.6	Supplemental Indenture No. 11, dated as of March 12, 2007, between the Company and U.S. Bank National Association, relating to the Company’s 5.625% Senior Notes due 2017, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K dated March 7, 2007, File Number 001-11527.)
4.7	Supplemental Indenture No. 12, dated as of September 28, 2007, between the Company and U.S. Bank National Association, relating to the Company’s 6.70% Senior Notes due 2018, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, File Number 001-11527.)
4.8	Supplemental Indenture No. 14, dated as of August 16, 2012, between the Company and U.S. Bank National Association, relating to the Company’s 5.000% Senior Notes due 2022, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.)
4.9	Supplemental Indenture No. 15, dated as of June 6, 2013, between the Company and U.S. Bank National Association, relating to the Company’s 4.500% Senior Notes due 2023, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013.)
4.10	Supplemental Indenture No. 16, dated as of March 12, 2014, between the Company and U.S. Bank National Association, relating to the Company’s 4.650% Senior Notes due 2024, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.)
4.11	Supplemental Indenture No. 17, dated as of September 12, 2014, between the Company and U.S. Bank National Association, relating to the Company’s 4.50% Senior Notes due 2025, including form thereof. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014.)
10.1	First Amendment to 2003 Incentive Share Award Plan. (Filed herewith.)
10.2	First Amendment to 2012 Equity Compensation Plan. (Filed herewith.)
10.3	Form of Restricted Share Agreement. (Filed herewith.)
10.4	Form of Indemnification Agreement. (Filed herewith.)
10.5	Summary of Trustee Compensation. (Filed herewith.)
10.6	Third Amendment to Amended and Restated Lease Agreement No. 2, dated September 23, 2015, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 23, 2015.)

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10.7	First Amendment to Amended and Restated Lease Agreement No. 3, dated September 23, 2015, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 23, 2015.)
10.8	Third Amendment to Amended and Restated Lease Agreement No. 4, dated September 23, 2015, among HPT TA Properties Trust, HPT TA Properties LLC and TA Operating LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K dated September 23, 2015.)
10.9	Amendment to Lease Agreement, dated October 30, 2015, among HPT PSC Properties Trust, HPT PSC Properties LLC and TA Operating LLC. (Filed herewith.)
12.1	Computation of Ratio of Earnings to Fixed Charges. (Filed herewith.)
12.2	Computation of Ratio of Earnings to Fixed Charges and Preferred Distributions. (Filed herewith.)
31.1	Rule 13a-14(a) Certification. (Filed herewith.)
31.2	Rule 13a-14(a) Certification. (Filed herewith.)
31.3	Rule 13a-14(a) Certification. (Filed herewith.)
31.4	Rule 13a-14(a) Certification. (Filed herewith.)
32.1	Section 1350 Certification. (Furnished herewith.)
101.1	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) related notes to these financial statements, tagged as blocks of text and in detail. (Filed herewith.)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HOSPITALITY PROPERTIES TRUST

/s/ John G. Murray

John G. Murray

President and Chief Operating Officer

Dated: November9, 2015

/s/ Mark L. Kleifges

Mark L. Kleifges

Treasurer and Chief Financial Officer

(Principal Financial and Accounting Officer)

Dated: November9, 2015

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EX-10.1

EXHIBIT 10.1

HOSPITALITY PROPERTIES TRUST

2003 INCENTIVE SHARE AWARD PLAN

AMENDMENT NO. 1

The Board of Trustees (the “Board”) of Hospitality Properties Trust (the “Company”) has heretofore approved and adopted this Amendment No. 1 (this “Amendment”) to the Hospitality Properties Trust 2003Incentive Share Award Plan (as amended from time to time, the “Plan”).

The Plan is hereby amended as follows:

1. Section IX.C. of the Plan is hereby deleted and replaced in its entirety with the following:

C.Tax Withholding; Section 409A.  To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by a Participant by reason of a grant of Shares, and, as a condition to the receipt of any grant of Shares, a Participant agrees that if the amount payable to him by the Company in the ordinary course is insufficient to pay such taxes, he shall, upon request of the Company, pay the Company an amount sufficient to satisfy its tax withholding obligations.

Without limiting the foregoing, the Compensation Committee may in its discretion permit any Participant’s withholding obligation to be paid in whole or in part in the form of Shares, by withholding from the Shares to be issued to such Participant or by accepting delivery of Shares already owned by him.  The fair market value of the Shares for this purpose shall be the closing price of the Shares on the principal securities exchange on which the Shares are listed on the date such Shares are repurchased by the Company, unless otherwise determined by the Board in its discretion.

If payment of withholding taxes is made in whole or in part in Shares, the Participant shall deliver to the Company share certificates registered in his name or other evidence of legal and beneficial ownership of Shares owned by him, fully vested and free of all liens, claims and encumbrances of every kind, duly endorsed or accompanied by stock powers duly endorsed by the record holder of the Shares represented by such share certificates.  If the Participant is subject to Section 16(a) of the Exchange Act, his ability to pay the withholding obligation in the form of Shares shall be subject to such additional restrictions as may be necessary to avoid any transaction that might give rise to liability under Section 16(b) of the Exchange Act.

It is intended that awards granted under the Plan be exempt from the application of Section 409A of the Code, and the Plan and such awards shall be construed in accordance with that intention.

2. This Amendment shall be effective as of August 25, 2015, including with respect to awards currently outstanding.

3. Except as amended hereby, the Plan shall remain in full force and effect.

EX-10.2

EXHIBIT 10.2

HOSPITALITY PROPERTIES TRUST

2012EQUITY COMPENSATION PLAN

AMENDMENT NO. 1

The Board of Trustees (the “Board”) of Hospitality Properties Trust (the “Company”) has heretofore approved and adopted this Amendment No. 1 (this “Amendment”) to the Hospitality Properties Trust 2012Equity Compensation Plan (as amended from time to time, the “Plan”).

The Plan is hereby amended as follows:

1. Section IX.C. of the Plan is hereby deleted and replaced in its entirety with the following:

C.Tax Withholding; Section 409A.  To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by a Participant by reason of a grant of Shares, and, as a condition to the receipt of any grant of Shares, a Participant agrees that if the amount payable to him by the Company in the ordinary course is insufficient to pay such taxes, he shall, upon request of the Company, pay the Company an amount sufficient to satisfy its tax withholding obligations.

Without limiting the foregoing, the Compensation Committee may in its discretion permit any Participant’s withholding obligation to be paid in whole or in part in the form of Shares, by withholding from the Shares to be issued to such Participant or by accepting delivery of Shares already owned by him.  The fair market value of the Shares for this purpose shall be the closing price of the Shares on the principal securities exchange on which the Shares are listedon the date such Shares are repurchased by the Company, unless otherwise determined by the Board in its discretion.

If payment of withholding taxes is made in whole or in part in Shares, the Participant shall deliver to the Company share certificates registered in his name or other evidence of legal and beneficial ownership of Shares owned by him, fully vested and free of all liens, claims and encumbrances of every kind, duly endorsed or accompanied by stock powers duly endorsed by the record holder of the Shares represented by such share certificates.  If the Participant is subject to Section 16(a) of the Exchange Act, his ability to pay the withholding obligation in the form of Shares shall be subject to such additional restrictions as may be necessary to avoid any transaction that might give rise to liability under Section 16(b) of the Exchange Act.

It is intended that awards granted under the Plan be exempt from the application of Section 409A of the Code, and the Plan and such awards shall be construed in accordance with that intention.

2. This Amendment shall be effective as of August 25, 2015, including with respect to awards currently outstanding.

3. Except as amended hereby, the Plan shall remain in full force and effect.

EX-10.3

EXHIBIT 10.3

HOSPITALITY PROPERTIES TRUST

Restricted Share Agreement

This Restricted Share Agreement (this “Agreement”) is made as of «DATE», between «NAME»(the “Recipient”) and Hospitality Properties Trust(the “Company”).

In consideration of the mutual promises and covenants contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Grant of Shares.  Subject to the terms and conditions hereinafter set forth and the terms and conditions of the Hospitality Properties Trust 2012 Equity Compensation Plan, as it may be amended from time to time (the “Plan”), the Company hereby grants to the Recipient, effective as of the date of this Agreement, «HPT» of its common shares of beneficial interest, par value $.01 per share (the “Common Shares”).  The shares so granted are hereinafter referred to as the “Shares,” which term shall also include any shares of the Company issued to the Recipient by virtue of his or her ownership of the Shares, by share dividend, share split or combination, recapitalization or otherwise.

2.Vesting; Repurchase of Shares.

(a)Subject to Sections 2(b) and 2(c) hereof, the Shares shall vest one-fifth of the total number of Shares as of the date hereof and as to a further one-fifth of such total number of Shares on each anniversary of the date hereof for the next four calendar years.  Any Shares not vested as of any date are herein referred to as “Unvested Shares.”

(b)Subject to Section 2(c) hereof, at the option of the Company, in the event the Recipient ceases to render significant services, whether as an employee or otherwise, to (i) the Company, (ii) the entity which is the manager or shared services provider to the Company or an entity controlled by, under common control with or controlling such entity (collectively, the “Manager”), or (iii) an affiliate of the Company (which shall be deemed for such purpose to include any other entity to which the Manager is the manager or shared services provider), all or any portion of the Unvested Shares shall be forfeited by the Recipient as of the date the Recipient ceases to render such services.  The Company may exercise such option by delivering or mailing to the Recipient (or his or her estate), at any time after the Recipient has ceased to render such services, a written notice of exercise of such option.  Such notice shall specify the number of Unvested Shares to be forfeited.

(c)Notwithstanding anything in this Agreement to the contrary, immediately upon the occurrence of an Acceleration Event (as defined below), all of the Unvested Shares shall vest and any forfeiture or other rights of the Company described in Section 2(b) shall lapse in their entirety, and such vesting and lapse of forfeiture or other Company rights shall also immediately apply to each other Common Share previously granted to the Recipient which then remains subject to comparable restrictions and rights.  For purposes of this Section 2(c), an Acceleration Event shall be deemed to occur immediately upon the occurrence of any of the following events: a Change in Control, a

Termination Event (as each such term is defined in Exhibit A hereto) or the death of the Recipient.

3.Legends.  Share certificates, if any, evidencing the Shares shall prominently bear a legend in substantially the following terms:

“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO AN EQUITY COMPENSATION PLAN MAINTAINED BY THE TRUST.  THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS AND FORFEITURE CONDITIONS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE TRUST AND THE INITIAL HOLDER OF THESE SHARES.  A COPY OF APPLICABLE RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE TRUST.”

In the event that the Shares are not evidenced by share certificates, the share books and records of the Company shall contain a notation in substantially the following terms:

“THE SHARES COVERED BY THIS STATEMENT WERE ISSUED PURSUANT TO AN EQUITY COMPENSATION PLAN MAINTAINED BY THE TRUST.  THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS AND FORFEITURE CONDITIONS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE TRUST AND THE INITIAL HOLDER OF THESE SHARES.  A COPY OF APPLICABLE RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS WILL BE FURNISHED TO THE HOLDER OF THE SHARES COVERED BY THIS STATEMENT WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE TRUST.”

Certificates evidencing Shares and Shares not evidenced by certificates shall also bear or contain, as applicable, legends and notations as may be required by the Plan or the Company’s declaration of trust, any applicable supplement thereto or bylaws, each as in effect from time to time, or as the Company may otherwise determine appropriate.

Promptly following the request of the Recipient with respect to any Shares (or any other Common Shares previously granted to the Recipient) which have become vested, the Company shall take, at its sole cost and expense, all such actions as may be required to permit the Recipient to resell such shares including, without limitation, providing to the Company’s transfer agent certificates of officers of the Company, and opinions of counsel and/or filing an appropriate registration statement, and taking all such other actions as may be required to remove the legends set forth above with respect to transfer and vesting restrictions from the certificates evidencing such shares and, if applicable, from the share books and records of the Company.  The Company shall reimburse the Recipient, promptly upon the receipt of a request for payment,

for all expenses (including legal expenses) reasonably incurred by the Recipient in connection with the enforcement of the Recipient’s rights under this paragraph. 

4.Tax Withholding.  To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by the Recipient by reason of a grant of Shares, and the Recipient agrees that he or she shall upon the request of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations from time to time (including as Shares become vested) as the Company may request.

5.Miscellaneous.

(a)Amendments.  Neither this Agreement nor any provision hereof may be changed or modified except by an agreement in writing executed by the Recipient and the Company; provided, however, that any change or modification that does not adversely affect the rights hereunder of the Recipient, as they may exist immediately prior to the effective date of such change or modification, may be adopted by the Company without an agreement in writing executed by the Recipient, and the Company shall give the Recipient written notice of such change or modification reasonably promptly following the adoption of such change or modification.

(b)Binding Effect of the Agreement.  This Agreement shall inure to the benefit of, and be binding upon , the Company, the Recipient and their respective estates, heirs, executors, transferees, successors, assigns and legal representatives.

(c)Provisions Separable.  In the event that any of the terms of this Agreement shall be or become or is declared to be illegal or unenforceable by any court or other authority of competent jurisdiction, such terms shall be null and void and shall be deemed deleted from this Agreement, and all the remaining terms of this Agreement shall remain in full force and effect.

(d)Notices.  Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or by facsimile or sent by registered certified mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given:

To the Recipient:To the Recipient’s address as set forth on the signature page hereof.

To the Company:Hospitality Properties Trust

Two Newton Place

255 Washington Street, Suite 300

Newton, MA  02458

Attn: Secretary

(e)Construction.  The headings and subheadings of this Agreement have been inserted for convenience only, and shall not affect the construction of the provisions hereof.  All references to sections of this Agreement shall be deemed to refer as well to all subsections which form a part of such section.

(f)Employment Agreement.  This Agreement shall not be construed as an agreement by the Company, the Manager or any affiliate of the Company or the Manager to employ the Recipient, nor is the Company, the Manager or any affiliate of the Company or the Manager obligated to continue employing the Recipient by reason of this Agreement or the grant of the Shares to the Recipient hereunder.

(g)Applicable Law.  This Agreement shall be construed and enforced in accordance with the laws of The Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be executed under seal, as of the date first above written.

HOSPITALITY PROPERTIES TRUST

By:

Title: Treasurer and Chief Financial Officer

RECIPIENT:

«NAME»

«ADDRESS»

«CITY»,  «ST»«ZIP»

Exhibit A

A “Change in Control” shall be deemed to have occurred if any of the events set forth in any one of the following paragraphs shall have occurred:

(a)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of either the then outstanding common shares of beneficial interest of the Company or the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in paragraph (c)(i) below;

(b)the following individuals cease for any reason to constitute a majority of the number of Trustees then serving: individuals who, on the date of the Agreement, constitute the Board and any new Trustee (other than a Trustee whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of Trustees) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Trustees then in office who either were Trustees on the date of the Agreement or whose appointment, election or nomination for election was previously so approved or recommended;

(c)there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

(d)the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

A “Termination Event” shall occur if Reit Management & Research LLC (or any entity controlled by, under common control with or controlling Reit Management & Research LLC) ceases to be the manager or shared services provider to the Company.  

For purposes of the definitions set forth on this Exhibit A, the following definitions shall apply, with capitalized terms used but not defined in this Exhibit A having the meaning set forth in the Plan:

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

“Agreement” shall mean the Restricted Share Agreement to which this Exhibit A is attached.

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities and (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.

“Trustee” is a member of the Board of Trustees of the Company.

EX-10.4

EXHIBIT 10.4

FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered [        ] (the “Effective Date”), by and between Hospitality Properties Trust, a Maryland real estate investment trust (the “Company”), and [        ] (“Indemnitee”).

WHEREAS Indemnitee currently serves as a [        ] of the Company and may, in connection therewith, be subjected to claims, suits or proceedings arising from such service; and

WHEREAS, as an inducement to Indemnitee to continue to serve as such [        ], the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the fullest extent permitted by law as hereinafter provided; and

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.               Definitions. For purposes of this Agreement:

(a)           “Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 10% or more of the combined voting power in the election of trustees of the Company’s then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Trustees in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Trustees then in office, as a consequence of which members of the Board of Trustees in office immediately prior to such transaction or event constitute less than a majority of the Board of Trustees thereafter; or (iii) during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Trustees (including for this purpose any new trustee whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the trustees then still in office who were trustees at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Trustees.

(b)           “Corporate Status” means the status of a person who is or was a director, trustee, officer or agent of the Company.

(c)           “Disinterested Trustee” means a trustee of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d)           “Expenses” means all expenses, including, but not limited to, all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(e)           “Independent Counsel” means a law firm, or a member of a law firm, that is retained by Indemnitee and is not serving as counsel to the Company.

(f)            “Proceeding” means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), except one initiated by an Indemnitee pursuant to Section 9.

Section 2.               Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the fullest extent permitted by Maryland law in effect on the date hereof and as amended from time to time; provided,  however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of Indemnitee provided in this Section 2 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the Maryland General Corporation Law (“MGCL”), as applicable to a Maryland real estate investment trust by virtue of Section 8-301(15) of the Maryland REIT Law.

Section 3.               Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 3, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by him or on his behalf in connection with a Proceeding by reason of Indemnitee’s Corporate Status unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that his conduct was unlawful.

Section 4.               Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be, made a party to any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses incurred by him or on his behalf in connection with such Proceeding unless it is established that (i) the act or omission of Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually received an improper personal benefit in money, property or services.

Section 5.               Indemnification for Expenses of a Party Who is Partly Successful. Without limitation on Section 3 and Section 4, if Indemnitee is not wholly successful in any Proceeding covered by this Agreement, but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 5 for all Expenses incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6.               Advance of Expenses. The Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding to which Indemnitee is, or is threatened to be, made a party or a witness, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met and which have not been successfully resolved as described in Section 5. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 6 shall be an unlimited general obligation by or on

behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.

Section 7.               Procedure for Determination of Entitlement to Indemnification.

(a)           To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Trustees in writing that Indemnitee has requested indemnification.

(b)           Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 7(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Trustees, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred or if after a Change of Control Indemnitee shall so request, (A) by the Board of Trustees (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Trustees (as herein defined), or (B) if a quorum of the Board of Trustees consisting of Disinterested Trustees is not obtainable or, even if obtainable, such quorum of Disinterested Trustees so directs, by Independent Counsel in a written opinion to the Board of Trustees, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board of Trustees, by the shareholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

Section 8.               Presumptions and Effect of Certain Proceedings.

(a)           In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 7(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

(b)           The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.

Section 9.               Remedies of Indemnitee.

(a)           If (i) a determination is made pursuant to Section 7 that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 6, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 7(b) within 30 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Maryland, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 9(a);  provided,  however, that

the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5.

(b)           In any judicial proceeding or arbitration commenced pursuant to this Section 9, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.

(c)           If a determination shall have been made pursuant to Section 7(b) that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 9, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification.

(d)           In the event that Indemnitee, pursuant to this Section 9, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses incurred by him in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

Section 10.             Defense of the Underlying Proceeding.

(a)           Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided,  however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)           Subject to the provisions of the last sentence of this Section 10(b) and of Section 10(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided,  however, that the Company shall notify Indemnitee of any such decision to defend within 15 calendar days following receipt of notice of any such Proceeding under Section 10(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 10(b) shall not apply to a Proceeding brought by Indemnitee under Section 9 above or Section 14.

(c)           Notwithstanding the provisions of Section 10(b), if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject

to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company (subject to Section 9(d)), to represent Indemnitee in connection with any such matter.

Section 11.             Non-Exclusivity; Survival of Rights.

(a)           The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Declaration of Trust or Bylaws of the Company, any agreement or a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board of Trustees, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.

(b)           In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(c)           The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 12.             Duration of Agreement; Binding Effect.

(a)           This Agreement shall continue until and terminate ten years after the date that Indemnitee shall have ceased to serve as a director, trustee, officer, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company; provided,  however, that the rights of Indemnitee hereunder shall continue until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 9 relating thereto.

(b)           The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the written request of the Company, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(c)           The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

Section 13.             Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 14.             Limitation and Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, (a) any indemnification or advance of Expenses to which Indemnitee is otherwise entitled under the terms of this Agreement shall be made only to the extent such indemnification or advance of Expenses does not conflict with applicable Maryland law and (b) Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (i) the Proceeding is brought to enforce indemnification under this Agreement or otherwise or (ii) the Company’s Bylaws, as amended, the Declaration of Trust, a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board of Trustees or an agreement approved by the Board of Trustees to which the Company is a party expressly provide otherwise.

Section 15.             Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement.

Section 16.             Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Section 17.             Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 18.             Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered at the following addresses to the parties hereto:

(a)           If to Indemnitee, to: The address set forth on the signature page hereto.

(b)           If to the Company to:

Hospitality Properties Trust

Two Newton Place

255 Washington Street, Suite 300

Newton, Massachusetts 02458

Attn: Secretary

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 19.             Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

ATTEST:	HOSPITALITY PROPERTIES TRUST
	By:	(SEAL)
	Name:
	Title:
WITNESS:	INDEMNITEE
	Name:
	Address:

EXHIBIT A

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

The Board of Trustees of Hospitality Properties Trust

Re: Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

This undertaking is being provided pursuant to that certain Indemnification Agreement dated                                     , 20   , by and between Hospitality Properties Trust (the “Company”) and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I am entitled to advance of expenses in connection with [Description of Proceeding] (the “Proceeding”).

Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.

I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm that at all times, insofar as I was involved as [a trustee] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful.

In consideration of the advance of expenses by the Company for reasonable attorney’s fees and related expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 5 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to a specific claim, issue or matter in the Proceeding, I agree that such Expenses shall be allocated on a reasonable and proportionate basis.

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this          day                               , 20    .

WITNESS:

(SEAL)

Schedule to Exhibit 10.4

The following current and former trustees and executive officers are parties to Indemnification Agreements with the Company which are substantially identical in all material respects to the representative Indemnification Agreement filed herewith and are dated as of the respective dates listed below. The other Indemnification Agreements are omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.

Name of Signatory	Date
Frank J. Bailey	March 10, 2004
Former Independent Trustee
Ethan S. Bornstein	March 10, 2004
Senior Vice President
Bruce M. Gans	February 6, 2009
Former Independent Trustee
John L. Harrington	March 10, 2004
Independent Trustee
Mark L. Kleifges	March 10, 2004
Treasurer & Chief Financial Officer
William A. Lamkin	January 11, 2007
Independent Trustee
Gerard M. Martin	March 10, 2004
Former Managing Trustee
John G. Murray	March 10, 2004
President, Chief Operating Officer & Assistant Secretary (former Secretary)
Adam D. Portnoy	January 11, 2007
Managing Trustee
Barry M. Portnoy	March 10, 2004
Managing Trustee
William J. Sheehan	May 7, 2004
Former Director of Internal Audit
Vern D. Larkin	May 9, 2012
Director of Internal Audit

Jennifer B. Clark	May 9, 2012
Secretary
Jacquelyn S. Anderson	May 9, 2012
Assistant Secretary
Donna D. Fraiche	September 28, 2015
Independent Trustee

EX-10.5

EXHIBIT 10.5

HOSPITALITY PROPERTIES TRUST

Summary of Trustee Compensation

The following is a summary of the currently effective compensation of the Trustees of Hospitality Properties Trust, or the Company, for services as Trustees, which is subject to modification at any time by the Board of Trustees.

· Each Independent Trustee receives an annual fee of $40,000, plus a fee of $1,000 for each meeting attended. Up to two $1,000 fees are payable if more than one board and board committee meetings are held on the same date.

· The chairpersons of the audit committee, the compensation committee and the nominating and governance committee, each of whom is an Independent Trustee, receive an additional annual fee of $12,500, $7,500 and $7,500, respectively.

· The lead independent trustee, who is an Independent Trustee, receives an additional annual fee of $10,000.

· Each Trustee receives a grant of 2,500 of the Company’s common shares of beneficial interest on the date of the first board meeting following each annual meeting of shareholders (or, for Trustees who are first elected or appointed at other times, on the day of the first board meeting attended).

· The Company generally reimburses all Trustees for travel expenses incurred in connection with their duties as Trustees and for out of pocket costs incurred from their attending certain continuing education programs.

EX-10.9

EXHIBIT 10.9

AMENDMENT TO LEASE AGREEMENT

THIS AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is entered into as of October 30, 2015, by and among HPT PSC PROPERTIES TRUST,a Maryland real estate investment trust, and HPT PSC PROPERTIES LLC, a Maryland limited liability company (collectively, "Landlord"), and TA OPERATING LLC, a Delaware limited liability company ("Tenant").

W I T N E S SETH  :

WHEREAS, Landlord and Tenant (as successor by merger with Petro Stopping Centers, L.P.) are parties to that certain Lease Agreement, dated as of May 30, 2007, as amended (as so amended, the “Lease”); and

WHEREAS, pursuant to the Lease, HPT PSC Properties Trust leases to Tenant its leasehold interest in that certain property having an address at 1255 Route 414, Waterloo, New York, as further described on Exhibit A-22 to the Lease (the “Waterloo Leased Property”);

WHEREAS, as of the date of this Amendment, HPT PSC Properties Trust has acquired the fee interest in the Waterloo Leased Property from a third party and its leasehold interest in the Waterloo Leased Property has been merged with its fee title; and

WHEREAS, Landlord and Tenant wish to amend the Lease to reflect HPT PSC Properties Trust’s acquisition of the fee interest in the Waterloo Leased Property and to increase the Minimum Rent (this and other capitalized terms used and not otherwise defined in this Amendment shall have the meanings given such terms in the Lease) payable by Tenant under the Lease by One Million Two Hundred Seventy-Five Thousand and 00/100ths Dollars ($1,275,000.00) on account of HPT PSC Properties Trust’s additional investment in the Waterloo Leased Property;

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1. Waterloo Leased Property.  Landlord and Tenant hereby confirm that the Leased Property includes the Waterloo Leased Property.   

2. Minimum Rent.  The defined term “Minimum Rent” set forth in Section 1.66 of the Lease is hereby deleted in its entirety and replaced with the following:

“Minimum Rent” shall mean Sixty-Four Million Two Hundred Twenty-Four Thousand Three Hundred Sixty-Seven and 68/100ths Dollars ($64,224,367.68), subject to adjustment as provided in Section 3.1.1(b). 

3. Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one and the same instrument.

4. Ratification.  As amended hereby, the Lease is hereby ratified and confirmed. 

[Remainder of Page Left Blank Intentionally]

-  2  -

IN WITNESS WHEREOF, the parties have executed this Amendment as a sealed instrument as of the date above first written.

LANDLORD:

HPT PSC PROPERTIES TRUST

By:/s/ John G. Murray

John G. Murray

President and

Chief Operating Officer

HPT PSC PROPERTIES LLC

By:/s/ John G. Murray

John G. Murray

President and

Chief Operating Officer

TENANT:

TA OPERATING LLC

By:/s/ Mark R. Young

Mark R. Young

Executive Vice President andGeneral Counsel

Reference is made to the Guaranty of Tenant’s obligations under the Lease dated May 30, 2007 given by TRAVELCENTERS OF AMERICA LLC, a Delaware limited liability company (the “Guarantor”) to Landlord.  Guarantor hereby confirms that all references in such Guaranty to the word “Lease” shall mean the Lease, as defined therein, as amended by the foregoing Amendment to Lease Agreement, and said Guarantor hereby reaffirms the Guaranty.

TRAVELCENTERS OF AMERICA LLC

By: /s/ Mark R. Young

Mark R. Young

Executive Vice President and General Counsel

[Signature Page to Amendment to Lease Agreement]

EX-12.1

Exhibit 12.1

Hospitality Properties Trust

Computation of Ratio of Earnings to Fixed Charges

(in thousands, except ratio amounts)

	Nine Months Ended  September 30,		Year Ended December 31,
	2015		2014		2013		2012		2011		2010
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings (losses) of an investee	$	187,286	$	199,036	$	127,750	$	153,219	$	191,803	$	21,990
Fixed Charges	107,918		139,486		145,954		136,111		134,110		138,712
Adjusted Earnings	$	295,204	$	338,522	$	273,704	$	289,330	$	325,913	$	160,702
Fixed Charges:
Interest on indebtedness and amortization of deferred finance costs and debt discounts	$	107,918	$	139,486	$	145,954	$	136,111	$	134,110	$	138,712
Ratio of Earnings to Fixed Charges	2.74x		2.43x		1.88x		2.13x		2.43x		1.16x

EX-12.2

Exhibit 12.2

Hospitality Properties Trust

Computation of Ratio of Earnings to Fixed Charges and Preferred Distributions

(in thousands, except ratio amounts)

	Nine Months Ended  September 30,		Year Ended December 31,
	2015		2014		2013		2012		2011		2010
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings (losses) of an investee	$	187,286	$	199,036	$	127,750	$	153,219	$	191,803	$	21,990
Fixed Charges	107,918		139,486		145,954		136,111		134,110		138,712
Adjusted Earnings	$	295,204	$	338,522	$	273,704	$	289,330	$	325,913	$	160,702
Fixed Charges:
Interest on indebtedness and amortization of deferred finance costs and debt discounts	$	107,918	$	139,486	$	145,954	$	136,111	$	134,110	$	138,712
Preferred distributions	15,498		20,664		26,559		40,145		29,880		29,880
Combined Fixed Charges and Preferred distributions	$	123,416	$	160,150	$	172,513	$	176,256	$	163,990	$	168,592
Ratio of Earnings to Fixed Charges and Preferred distributions	2.39x		2.11x		1.59x		1.64x		1.99x		0.95x		(1)

(1) The deficiency for this period was approximately $7,890.

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Barry M. Portnoy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2015	/s/ Barry M. Portnoy
	Barry M. Portnoy
	Managing Trustee

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Adam D. Portnoy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November9, 2015	/s/ Adam D. Portnoy
	Adam D. Portnoy
	Managing Trustee

EX-31.3

EXHIBIT 31.3

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, John G. Murray, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November9, 2015	/s/ John G. Murray
	John G. Murray
	President and Chief Operating Officer

EX-31.4

EXHIBIT 31.4

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Mark L. Kleifges, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Hospitality Properties Trust;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November9, 2015	/s/ Mark L. Kleifges
	Mark L. Kleifges
	Treasurer and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Required by 18 U.S.C. Sec. 1350

_______________________________________________

In connection with the filing by Hospitality Properties Trust (the “Company”) of the Quarterly Report on Form 10-Q for the period ended September30, 2015 (the “Report”), each of the undersigned hereby certifies, to the best of his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Barry M. Portnoy	/s/ John G. Murray
Barry M. Portnoy	John G. Murray
Managing Trustee	President and Chief Operating Officer
/s/ Adam D. Portnoy	/s/ Mark L. Kleifges
Adam D. Portnoy	Mark L. Kleifges
Managing Trustee	Treasurer and Chief Financial Officer
Date: November9, 2015

XML

Related Person Transactions - copy (Details) $ in Thousands						1 Months Ended			3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended	33 Months Ended
	Oct. 27, 2015 USD ($) room property	Jul. 23, 2015 USD ($) state room property	Jun. 05, 2015 USD ($) agreement shares	Jun. 04, 2015 shares	Jun. 01, 2015 USD ($) property	Oct. 31, 2015 USD ($)	Jul. 31, 2015 item	Jun. 30, 2015 USD ($)	Sep. 30, 2015 USD ($) item property shares	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Vote Option item property shares	Sep. 30, 2015 USD ($) item property shares	Sep. 30, 2014 USD ($) shares	Dec. 31, 2014 USD ($)	Sep. 30, 2015 USD ($) item property shares	Apr. 28, 2015 USD ($)	Dec. 31, 2007
Related Party Transaction [Line Items]
Number of management agreements or leases | item									14		14	14			14
Rental income									$ 73,747	$ 63,837		$ 207,561	$ 190,959
Minimum Annual Rent									253,919		$ 253,919	253,919			$ 253,919
Capital improvements from leased facilities, funded												(172,627)	(159,027)
Increase (decrease) in minimum annual rent												14,365
Deferred percentage rent revenue									0	557		0	2,129
Adjustments included in rental income necessary to record rent on the straight line basis									$ 3,752	553		$ 5,807	1,659
Proceeds received from the VDOT in connection with the eminent domain taking													6,178
Number of Sites | property									193		193	193			193
Gain on sale of real estate												$ 11,015	130
Purchase price excluding closing cost									$ 477,883		$ 477,883	477,883			$ 477,883
Accruals for unpaid amount									46,862		46,862	46,862		$ 40,253	46,862
Amount owed for capital expenditure reimbursements									24,306		$ 24,306	24,306		8,658	$ 24,306
Earnings (losses) recognized related to equity investments									$ (24)	38		$ 71	66
Sonesta ES Suites
Related Party Transaction [Line Items]
Amount expected to be provided for renovation for acquisitions made		$ 45,000
Sonesta agreements
Related Party Transaction [Line Items]
Number of real estate properties leased or managed | property									31		31	31			31
Management agreement fees and expenses									$ 5,742	4,722		$ 16,143	13,052
Procurement and construction supervision fees									496	1,053		1,172	2,803
Purchase price excluding closing cost																$ 750
Amount expected to be provided for renovation for acquisitions made												45,000
RMR Inc
Related Party Transaction [Line Items]
Amount of investment acquired			$ 55,922
Fair value of investment			129,722
Initial other liabilities			$ 72,658
Investment at carrying value, including transaction costs									132,296		$ 132,296	132,296			$ 132,296
Straight line discount amortization period			20 years
Amortization of other liabilities to reduce business and property management fees									911			1,142
TA Prior Leases
Related Party Transaction [Line Items]
Amount of percentage rent recognized under the prior agreement and incorporated in the new agreement														2,902
Deferred rent due in December 2022									$ 107,085		$ 107,085	$ 107,085			$ 107,085
TA New Leases
Related Party Transaction [Line Items]
Number of renewal options available | Option											2
Term of renewal option												15 years
Percentage of non-fuel revenue over threshold amounts									3.00%		3.00%	3.00%			3.00%
Increase (decrease) in minimum annual rent											$ 24,027
Number of Sites | property									153		153	153			153
TA No. 1
Related Party Transaction [Line Items]
Minimum Annual Rent									$ 48,295		$ 48,295	$ 48,295			$ 48,295
Number of Sites | property									39		39	39			39
TA No. 2
Related Party Transaction [Line Items]
Minimum Annual Rent									$ 46,765		$ 46,765	$ 46,765			$ 46,765
Number of Sites | property									38		38	38			38
TA No. 3
Related Party Transaction [Line Items]
Minimum Annual Rent									$ 49,613		$ 49,613	$ 49,613			$ 49,613
Number of Sites | property									38		38	38			38
TA No. 4
Related Party Transaction [Line Items]
Minimum Annual Rent									$ 46,297		$ 46,297	$ 46,297			$ 46,297
Number of Sites | property									38		38	38			38
TA No. 5
Related Party Transaction [Line Items]
Minimum Annual Rent									$ 62,949		$ 62,949	$ 62,949			$ 62,949
Number of Sites | property									40		40	40			40
Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			5,019,121
Hotels
Related Party Transaction [Line Items]
Capital improvements from leased facilities, funded												$ 179,132
Hotels | Sonesta ES Suites
Related Party Transaction [Line Items]
Number of properties acquired | property		9
Number of hotel suites | room		1,095
Number of states hotels to be acquired located | state		8
Purchase price excluding closing cost		$ 85,000
Hotels | Sonesta ES Suites | Subsequent event
Related Party Transaction [Line Items]
Number of hotels to be acquired | property	2
Number of hotel suites | room	262
Purchase price excluding closing cost	$ 12,000
Hotels | Sonesta agreements
Related Party Transaction [Line Items]
Number of properties acquired | item							9
Fixed minimum return as a percentage of invested capital												8.00%
Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent			16.20%
Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Equity conversion ratio of RMR Inc. class B-1 common stock											1
Aggregate consideration paid			$ 12,622
Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			1,490,000
Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Number of votes per equity interest | Vote											1
Shares issued in connection with acquisition | shares			5,019,121
Up C Transaction | Class B1 common shares | RMR Inc
Related Party Transaction [Line Items]
Number of votes per equity interest | Vote											10
Up C Transaction | Class B2 common shares | RMR Inc
Related Party Transaction [Line Items]
Number of votes per equity interest | Vote											10
Travel Centers of America LLC
Related Party Transaction [Line Items]
Percentage of ownership formerly held in subsidiary																	100.00%
Common shares of TA held by company as a percent of total TA shares outstanding									8.90%		8.90%	8.90%			8.90%
Number of properties acquired | property											14
Number of properties where certain assets are leased back to acquiree | property											11
Rental income									$ 65,548	55,749		$ 181,174	166,427
Capital improvements from leased facilities, funded												70,150	41,961
Increase (decrease) in minimum annual rent											$ (3,874)	5,963	3,567
Adjustments included in rental income necessary to record rent on the straight line basis									3,647	422		5,452	1,266
Accounts receivable from related parties									46,465		46,465	46,465		$ 40,253	$ 46,465
Gain on sale of real estate											11,015
Purchase price excluding closing cost									$ 279,383		$ 279,383	$ 279,383			$ 279,383
Number of common shares owned | shares									3,420,000		3,420,000	3,420,000			3,420,000
Travel Centers of America LLC | Subsequent event
Related Party Transaction [Line Items]
Purchase price excluding closing cost						$ 15,000
Travel Centers of America LLC | TA New Leases
Related Party Transaction [Line Items]
Number of properties acquired | property					14
Number of properties where certain assets are leased back to acquiree | property					11
Number of properties acquired and leased back to the acquiree | property					5
Purchase price equal to estimate of development costs, including the cost of land					$ 118,000
Purchase price excluding closing cost					$ 279,383
Travel Centers of America LLC | TA No. 5
Related Party Transaction [Line Items]
Aggregate amount of percentage rent to be waived									$ 2,500		$ 2,500	$ 2,500			$ 2,500
Annual percentage rent waived									271	126		819	372		$ 1,826
Amount of percentage rent recognized									0	557		$ 2,048	$ 2,129
Travel Centers of America LLC | TA No. 5 | Subsequent event
Related Party Transaction [Line Items]
Increase (decrease) in minimum annual rent						$ 1,275
Travel Centers of America LLC | Travel centers
Related Party Transaction [Line Items]
Number of properties acquired | property					5
RMR Trust | Up C Transaction
Related Party Transaction [Line Items]
Voting power of outstanding capital stock of RMR Inc			91.40%
Indirect economic interest in RMR LLC as a percent			51.60%
Equity conversion ratio of RMR LLC class A membership units											1
RMR Trust | Up C Transaction | Amended Agreement
Related Party Transaction [Line Items]
Window for providing notice of termination of property management agreement after change of control by the related party			12 months
Window for providing notice of termination of property management agreement for performance by the related party			60 days
Number of business days notice for termination of property management agreement for performance by the related party			60 days
Number of business days notice for termination of property management agreement for convenience by the related party			60 days
RMR Trust | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid			$ 11,520
RMR Trust | Up C Transaction | Managing Trustees Barry And Adam Portnoy Member
Related Party Transaction [Line Items]
Period over which shares remain under lock up and registration agreement												10 years
RMR Trust | Up C Transaction | Class A common shares
Related Party Transaction [Line Items]
Business acquisition related party equity interests delivered | shares				30,000,000
RMR Trust | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Business acquisition related party equity interests delivered | shares			15,000,000
RMR Trust | Up C Transaction | Class B1 common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			1,000,000
RMR Trust | Up C Transaction | Class B2 common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			15,000,000
RMR Trust | Up C Transaction | Class B member units | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			1,000,000
GOV | Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent			5.00%
GOV | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid			$ 3,917
GOV | Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			700,000
GOV | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			1,541,201
SNH | Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent			17.00%
SNH | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid			$ 13,967
SNH | Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			2,345,000
SNH | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			5,272,787
SIR | Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent			10.20%
SIR | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid			$ 15,880
SIR | Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			880,000
SIR | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition | shares			3,166,891
RMR LLC
Related Party Transaction [Line Items]
Rental income									$ 9			$ 26
Common shares issued for services rendered by RMR | shares												52,366	97,816
Base management fee payable monthly in cash (as a percent)									100.00%		100.00%	100.00%			100.00%
Accrual for RMR LLC employee share grants									$ 776	973		$ 2,283	$ 2,199
Related party reimbursement expenses									37	19
Estimated incentive fees recorded									8,561	4,778		$ 17,383	$ 6,951
Shares issued under the business management agreement | shares												52,366	97,816
Business management fees incurred									17,392	14,309		$ 45,856	$ 34,896
RMR LLC | Up C Transaction
Related Party Transaction [Line Items]
Number of terminated management agreements for a performance reason before termination fee is incurred | agreement			1
Number of RMR LLC terminated management agreements for good cause before termination fee is incurred | agreement			1
Number of terminated management agreements for convenience before termination fee is incurred | agreement			1
RMR LLC | Up C Transaction | Amended Agreement
Related Party Transaction [Line Items]
Termination fee remaining term assumption			10 years
AIC
Related Party Transaction [Line Items]
Combined property insurance policy term								3 years
Property insurance premium								$ 2,442
Terrorism coverage of property insurance								$ 200,000
Terrorism property insurance term								1 year
Coverage of property insurance								$ 500,000
Equity in unrealized (loss) gain of an investee									(72)	(33)		(91)	8
Earnings (losses) recognized related to equity investments									(24)	$ 38		71	$ 66
Equity method investments, carrying value									$ 6,814		$ 6,814	$ 6,814			$ 6,814

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Related Person Transactions - TA Transaction Agreement (Details) $ in Thousands		1 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended	33 Months Ended
	Jun. 01, 2015 USD ($) property	Oct. 31, 2015 USD ($)	Sep. 30, 2015 USD ($) property shares	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) Option property shares	Sep. 30, 2015 USD ($) property shares	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2015 USD ($) property shares	Dec. 31, 2007
Related Party Transaction [Line Items]
Real Estate Aggregate Purchase Price			$ 477,883		$ 477,883	$ 477,883			$ 477,883
Increase (decrease) in minimum annual rent						14,365
Gain on sale of real estate						$ 11,015	$ 130
Number of Sites | property			193		193	193			193
Minimum Annual Rent			$ 253,919		$ 253,919	$ 253,919			$ 253,919
Deferred Rent			150,000		150,000	150,000			150,000
Rental income			73,747	$ 63,837		207,561	190,959
Capital improvements from leased facilities, funded						(172,627)	(159,027)
TA Prior Leases
Related Party Transaction [Line Items]
Amount of percentage rent recognized under the prior agreement and incorporated in the new agreement								$ 2,902
Deferred rent due in December 2022			$ 107,085		$ 107,085	$ 107,085			$ 107,085
TA New Leases
Related Party Transaction [Line Items]
Number of renewal options available | Option					2
Term of renewal option						15 years
Percentage of non-fuel revenue over threshold amounts			3.00%		3.00%	3.00%			3.00%
Increase (decrease) in minimum annual rent					$ 24,027
Number of Sites | property			153		153	153			153
TA No. 1
Related Party Transaction [Line Items]
Number of Sites | property			39		39	39			39
Minimum Annual Rent			$ 48,295		$ 48,295	$ 48,295			$ 48,295
Deferred Rent			$ 27,421		$ 27,421	$ 27,421			$ 27,421
TA No. 2
Related Party Transaction [Line Items]
Number of Sites | property			38		38	38			38
Minimum Annual Rent			$ 46,765		$ 46,765	$ 46,765			$ 46,765
Deferred Rent			$ 29,107		$ 29,107	$ 29,107			$ 29,107
TA No. 3
Related Party Transaction [Line Items]
Number of Sites | property			38		38	38			38
Minimum Annual Rent			$ 49,613		$ 49,613	$ 49,613			$ 49,613
Deferred Rent			$ 29,324		$ 29,324	$ 29,324			$ 29,324
TA No. 4
Related Party Transaction [Line Items]
Number of Sites | property			38		38	38			38
Minimum Annual Rent			$ 46,297		$ 46,297	$ 46,297			$ 46,297
Deferred Rent			$ 21,233		$ 21,233	$ 21,233			$ 21,233
TA No. 5
Related Party Transaction [Line Items]
Number of Sites | property			40		40	40			40
Minimum Annual Rent			$ 62,949		$ 62,949	$ 62,949			$ 62,949
Deferred Rent			$ 42,915		$ 42,915	$ 42,915			$ 42,915
Travel Centers of America LLC
Related Party Transaction [Line Items]
Percentage of ownership formerly held in subsidiary										100.00%
Number of common shares owned | shares			3,420,000		3,420,000	3,420,000			3,420,000
Common shares of TA held by company as a percent of total TA shares outstanding			8.90%		8.90%	8.90%			8.90%
Number of properties acquired | property					14
Number of properties where certain assets are leased back to acquiree | property					11
Real Estate Aggregate Purchase Price			$ 279,383		$ 279,383	$ 279,383			$ 279,383
Proceeds from Sale of Real Estate	$ 45,042
Increase (decrease) in minimum annual rent					(3,874)	5,963	3,567
Gain on sale of real estate					11,015
Rental income			65,548	55,749		181,174	166,427
Accounts receivable from related parties			46,465		46,465	46,465		$ 40,253	46,465
Capital improvements from leased facilities, funded						70,150	41,961
Travel Centers of America LLC | Subsequent event
Related Party Transaction [Line Items]
Real Estate Aggregate Purchase Price		$ 15,000
Travel Centers of America LLC | TA New Leases
Related Party Transaction [Line Items]
Number of properties acquired | property	14
Number of properties where certain assets are leased back to acquiree | property	11
Real Estate Aggregate Purchase Price	$ 279,383
Number of properties acquired and leased back to the acquiree | property	5
Purchase price equal to estimate of development costs, including the cost of land	$ 118,000
Travel Centers of America LLC | TA No. 5
Related Party Transaction [Line Items]
Aggregate amount of percentage rent to be waived			2,500		$ 2,500	2,500			2,500
Amount of percentage rent recognized			0	557		2,048	2,129
Annual percentage rent waived			271	$ 126		819	$ 372		$ 1,826
Travel Centers of America LLC | TA No. 5 | Subsequent event
Related Party Transaction [Line Items]
Increase (decrease) in minimum annual rent		$ 1,275
Travel Centers of America LLC | Travel centers
Related Party Transaction [Line Items]
Number of properties acquired | property	5
RMR LLC
Related Party Transaction [Line Items]
Rental income			$ 9			$ 26

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New Accounting Pronouncements (Details) - ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2015
Deferred financing costs		$ 15,388	$ 13,417
Subsequent event
Deferred financing fee related debt obligations, net		$ 15,388
Subsequent event | Forecast
Deferred financing fee related debt obligations, net	$ 13,417

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Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Senior Notes, due 2016 at 6.3%
Fair Value of Assets and Liabilities
Interest rate stated percentage	6.30%	6.30%
Senior Notes, due 2017 at 5.625%
Fair Value of Assets and Liabilities
Interest rate stated percentage	5.625%	5.625%
Senior Notes, due 2018 at 6.7%
Fair Value of Assets and Liabilities
Interest rate stated percentage	6.70%	6.70%
Senior Notes, due 2022 at 5.0%
Fair Value of Assets and Liabilities
Interest rate stated percentage	5.00%	5.00%
Senior Notes, due 2023 at 4.5%
Fair Value of Assets and Liabilities
Interest rate stated percentage	4.50%	4.50%
Senior Notes, due 2024 at 4.65%
Fair Value of Assets and Liabilities
Interest rate stated percentage	4.65%	4.65%
Senior Notes, due 2025 at 4.5%
Fair Value of Assets and Liabilities
Interest rate stated percentage	4.50%	4.50%
Convertible Senior Notes, due 2027 at 3.8%
Fair Value of Assets and Liabilities
Interest rate stated percentage	3.80%	3.80%
Carrying Amount
Fair Value of Assets and Liabilities
Unamortized discounts	$ (11,470)	$ (12,865)
Financial liabilities, Fair Value	2,422,008	2,420,613
Carrying Amount | Senior Notes, due 2016 at 6.3%
Fair Value of Assets and Liabilities
Financial liabilities	275,000	275,000
Carrying Amount | Senior Notes, due 2017 at 5.625%
Fair Value of Assets and Liabilities
Financial liabilities	300,000	300,000
Carrying Amount | Senior Notes, due 2018 at 6.7%
Fair Value of Assets and Liabilities
Financial liabilities	350,000	350,000
Carrying Amount | Senior Notes, due 2022 at 5.0%
Fair Value of Assets and Liabilities
Financial liabilities	500,000	500,000
Carrying Amount | Senior Notes, due 2023 at 4.5%
Fair Value of Assets and Liabilities
Financial liabilities	300,000	300,000
Carrying Amount | Senior Notes, due 2024 at 4.65%
Fair Value of Assets and Liabilities
Financial liabilities	350,000	350,000
Carrying Amount | Senior Notes, due 2025 at 4.5%
Fair Value of Assets and Liabilities
Financial liabilities	350,000	350,000
Carrying Amount | Convertible Senior Notes, due 2027 at 3.8%
Fair Value of Assets and Liabilities
Financial liabilities	8,478	8,478
Fair Value
Fair Value of Assets and Liabilities
Financial liabilities, Fair Value	2,497,271	2,555,093
Fair Value | Senior Notes, due 2016 at 6.3%
Fair Value of Assets and Liabilities
Financial liabilities	277,452	287,680
Fair Value | Senior Notes, due 2017 at 5.625%
Fair Value of Assets and Liabilities
Financial liabilities	315,342	321,675
Fair Value | Senior Notes, due 2018 at 6.7%
Fair Value of Assets and Liabilities
Financial liabilities	377,557	386,755
Fair Value | Senior Notes, due 2022 at 5.0%
Fair Value of Assets and Liabilities
Financial liabilities	522,080	529,160
Fair Value | Senior Notes, due 2023 at 4.5%
Fair Value of Assets and Liabilities
Financial liabilities	301,239	306,516
Fair Value | Senior Notes, due 2024 at 4.65%
Fair Value of Assets and Liabilities
Financial liabilities	349,269	360,757
Fair Value | Senior Notes, due 2025 at 4.5%
Fair Value of Assets and Liabilities
Financial liabilities	345,667	353,701
Fair Value | Convertible Senior Notes, due 2027 at 3.8%
Fair Value of Assets and Liabilities
Financial liabilities	$ 8,665	$ 8,849

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Related Person Transactions - RMR LLC Management Fees and Reimbursements (Details) - USD ($) $ in Thousands		1 Months Ended		3 Months Ended		9 Months Ended
	Jun. 01, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Common shares granted under equity compensation plan	2,500
Shares purchased from certain of our officers and other employees of RMR LLC		16,340
RMR LLC
Related Party Transaction [Line Items]
Business management fees incurred				$ 17,392	$ 14,309	$ 45,856	$ 34,896
Estimated incentive fees recorded				$ 8,561	4,778	$ 17,383	$ 6,951
Shares issued under the business management agreement						52,366	97,816
Base management fee payable monthly in cash (as a percent)		100.00%		100.00%		100.00%
Related party reimbursement expenses				$ 37	19
Common shares granted under equity compensation plan		76,250	79,725
Accrual for RMR LLC employee share grants				$ 776	$ 973	$ 2,283	$ 2,199

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Revenue Recognition

9 Months Ended

Sep. 30, 2015

Revenue Recognition

Revenue Recognition

Note 3.  Revenue Recognition

We report hotel operating revenues for managed hotels in our condensed consolidated statements of comprehensive income. We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided.

We recognize rental income from operating leases on a straight line basis over the term of the lease agreements except for one lease in which there is uncertainty regarding the collection of scheduled future rent increases.  Rental income includes $3,752 and $5,807for the three and nine months ended September 30, 2015, respectively, and $553 and $1,659 for the three and nine months ended September 30, 2014, respectively, of adjustments necessary to record scheduled rent increases under certain of our leases, the deferred rent obligations under our TravelCenters of America LLC, or TA, agreements and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight line basis.  See Note 10 for further information regarding our TA agreements.  Due from related persons includes $25,474 and $20,493 and other assets, net, includes $1,728 and $1,373 of straight line rent receivables at September 30, 2015 and December 31, 2014, respectively.

We determine percentage rent due to us under our leases annually and recognize it at year end when all contingencies have been met and the rent is earned. We had no deferred estimated percentage rent for the three and nine months ended September 30, 2015, respectively, and $557 and $2,129 of deferred estimated percentage rent for the three and nine months ended September 30, 2014, respectively.  In connection with our lease modification with TA in June 2015, we recorded $2,048 of percentage rent during the three months ended June 30, 2015.  See Note 10 for further information regarding these agreements.

We own all the capital expenditure reserves, or FF&E reserves, for our hotels. We do not report the amounts which are escrowed as FF&E reserves for our managed hotels as FF&E reserve income. We report deposits by our third party hotel tenants into the escrow accounts as FF&E reserve income.

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Indebtedness (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Nov. 08, 2015	Dec. 31, 2014
Indebtedness
Unsecured revolving credit facility	$ 454,000			$ 454,000			$ 18,000
Convertible senior unsecured notes	8,478			8,478			$ 8,478
Unsecured revolving credit facility
Indebtedness
Unsecured revolving credit facility	454,000			454,000
Unsecured revolving credit facility maximum borrowing capicity	$ 750,000			$ 750,000
Extendable term of credit facility				1 year
Debt instrument, interest rate description			LIBOR
Margin over base rate, in basis points (as a percent)				1.10%
Interest rate payable for facility fees (as a percent)				0.20%
Interest rate (as a percent)	1.29%			1.29%
Weighted average interest rate for borrowings (as a percent)	1.30%	1.26%		1.28%	1.25%
Unsecured revolving credit facility | Subsequent event
Indebtedness
Unsecured revolving credit facility						$ 384,000
Unsecured term loan
Indebtedness
Unsecured term loan outstanding	$ 400,000			$ 400,000
Debt instrument, interest rate description				LIBOR
Margin over base rate, in basis points (as a percent)				1.20%
Interest rate (as a percent)	1.40%			1.40%
Weighted average interest rate for borrowings (as a percent)	1.39%	1.35%		1.38%	1.36%
Unsecured senior notes
Indebtedness
Unsecured senior notes	$ 2,425,000			$ 2,425,000
Revolving credit facility and term loan
Indebtedness
Maximum borrowing capacity that may be increased	2,300,000			2,300,000
Convertible Senior Notes, due 2027 at 3.8%
Indebtedness
Convertible senior unsecured notes	$ 8,478			$ 8,478

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Shareholders' Equity (Details) $ / shares in Units, $ in Thousands													1 Months Ended		9 Months Ended
	Oct. 15, 2015 USD ($) $ / shares	Oct. 12, 2015 USD ($) $ / shares	Sep. 24, 2015 $ / shares shares	Sep. 02, 2015 $ / shares shares	Aug. 19, 2015 USD ($) $ / shares	Jul. 15, 2015 USD ($) $ / shares	Jun. 05, 2015 shares	Jun. 01, 2015 trustee $ / shares shares	May. 21, 2015 USD ($) $ / shares	Apr. 15, 2015 USD ($) $ / shares	Feb. 24, 2015 USD ($) $ / shares	Jan. 15, 2015 USD ($) $ / shares	Sep. 30, 2015 shares	Sep. 30, 2014 shares	Sep. 30, 2015 shares	Sep. 30, 2014 shares
Common Share Issuances
Closing share price of the entity's common shares (in dollars per share) | $ / shares								$ 30.59
Number of Trustees | trustee								5
Common shares issued as partial payment to acquire															43,285,000
Shares purchased from certain of our officers and other employees of RMR LLC													16,340
Common shares granted under equity compensation plan								2,500
Officers and employees of RMR
Common Share Issuances
Closing share price of the entity's common shares (in dollars per share) | $ / shares			$ 25.62
Shares purchased from certain of our officers and other employees of RMR LLC			16,340
2012 Equity Compensation Plan | Officers and employees of RMR
Common Share Issuances
Closing share price of the entity's common shares (in dollars per share) | $ / shares				$ 25.66
Common shares granted under equity compensation plan				76,250
Common shares
Common Share Issuances
Closing share price of the entity's common shares (in dollars per share) | $ / shares			$ 25.18
Common shares granted under equity compensation plan			2,500
Distribution to common shareholders (in dollars per share) | $ / shares		$ 0.50			$ 0.50				$ 0.50		$ 0.49
Distribution paid to common shareholders | $		$ 75,774			$ 75,743				$ 74,981		$ 73,466
Series D
Common Share Issuances
Distribution to preferred shareholders (in dollars per share) | $ / shares	$ 0.4453					$ 0.4453				$ 0.4453		$ 0.4453
Distribution paid to preferred shareholders | $	$ 5,166					$ 5,166				$ 5,166		$ 5,166
RMR Inc | Common shares
Common Share Issuances
Common shares issued as partial payment to acquire							1,490,000
RMR LLC
Common Share Issuances
Common shares issued															63,119
Common shares issued for services rendered by RMR															52,366	97,816
Common shares granted under equity compensation plan													76,250	79,725

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Real Estate Properties (Details) $ in Thousands									1 Months Ended	3 Months Ended	9 Months Ended		36 Months Ended
	Oct. 27, 2015 USD ($) room property	Sep. 23, 2015 USD ($) property	Jul. 23, 2015 USD ($) state room property	Jun. 09, 2015 USD ($) property	Jun. 01, 2015 USD ($) property	May. 15, 2015 USD ($) room	Apr. 28, 2015 USD ($)	Mar. 16, 2015 USD ($) room	Jun. 30, 2015 property	Jun. 30, 2015 USD ($)	Sep. 30, 2015 USD ($) item property	Sep. 30, 2014 USD ($)	Dec. 31, 2017 USD ($) property	Oct. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Real estate properties
Number of operating agreements | item											14
Capital improvements from leased facilities, funded											$ (172,627)	$ (159,027)
Increase (decrease) in annual minimum returns and rents											14,365
Gain on sale of real estate											11,015	$ 130
Purchase price											477,883
Land											59,934
Land improvements											88,426
Building and improvements											312,388
Furniture, fixtures and equipment											16,874
Intangible assets											261
Asset acquisition
Purchase price											8,198,822				$ 7,656,193
Land											$ 1,527,504				$ 1,484,210
Rosemont, IL
Real estate properties
Number of rooms | room								300
Purchase price, business combination								$ 35,500
Land								2,375
Building and improvements								31,401
Furniture, fixtures and equipment								1,463
Intangible assets								$ 261
Ft.Lauderdale, FL
Real estate properties
Payments to Acquire Businesses, Gross							$ 750
Land acquired							$ 750
Denver, Co
Real estate properties
Number of rooms | room						364
Purchase price, business combination						$ 77,250
Land						8,193
Building and improvements						61,185
Furniture, fixtures and equipment						$ 7,872
Various locations acuired in June
Real estate properties
Payments to Acquire Businesses, Gross					$ 227,877
Land acquired					26,286
Land improvements, acquired					67,160
Building and improvements, acquired					134,389
Furniture, fixtures and equipment, acquired					$ 42
Various locations acuired in July
Real estate properties
Purchase price, business combination			$ 85,000
Land			13,165
Building and improvements			64,338
Furniture, fixtures and equipment			$ 7,497
Various locations acuired in September
Real estate properties
Payments to Acquire Businesses, Gross		$ 51,506
Land acquired		9,165
Land improvements, acquired		21,266
Building and improvements, acquired		$ 21,075
Hotels
Real estate properties
Number of properties owned | property											302
Capital improvements from leased facilities, funded											$ 179,132
Hotels | Land Parcel Adjacent
Real estate properties
Number of properties acquired | item											11
Hotels | TA Travel Centers
Real estate properties
Number of properties acquired and leased back to the acquiree | property		2
Hotels | Sonesta ES Suites
Real estate properties
Number of properties acquired | property			9
Number of hotel suites | room			1,095
Number of states hotels to be acquired located | state			8
Purchase price			$ 85,000
Travel centers
Real estate properties
Number of properties owned | property											193
Travel centers | TA Travel Centers
Real estate properties
Number of properties acquired and leased back to the acquiree | property					14
Number of properties where certain assets are leased back to acquiree					11				10		11
Number of properties sold | property				5
Number of properties acquired									12		14
Net proceeds from sale of property				$ 45,042
Gain on sale of real estate										$ 11,015
Purchase price					$ 279,383
Subsequent event | Waterloo, NY [Member]
Real estate properties
Purchase price														$ 15,000
Subsequent event | Cleveland and Westlake, OH [Member]
Real estate properties
Number of properties acquired | property	2
Number of hotel suites | room	262
Purchase price	$ 12,000
Subsequent event | Hotels | Sonesta ES Suites
Real estate properties
Number of hotel suites | room	262
Number of Hotel to be acquired | property	2
Purchase price	$ 12,000
Subsequent event | Travel centers | TA Travel Centers
Real estate properties
Number of properties acquired and leased back to the acquiree | property													5
Purchase price													$ 118,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Components of provision for income taxes
Income tax expense	$ 514	$ 39	$ 1,445	$ 1,110
Current-
Current- Federal		0		(22)
Current- Foreign	79	16	155	86
Current- State	$ 435	$ 23	$ 1,290	$ 1,046

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2015

New Accounting Pronouncements

New Accounting Pronouncements

Note 2.  New Accounting Pronouncements

In February 2015, the FASB issued Accounting Standards Update, or ASU, No. 2015-02, Consolidation.  Among other things, this update changes how an entity determines the primary beneficiary of a VIE.  This ASU is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted.  We are currently in the process of evaluating the impact, if any, this ASU will have on our condensed consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheets as a direct deduction from the associated debt liability. In August 2015, the FASB clarified the previous ASU and issued ASU No. 2015-15, Presentations and Subsequent Measurement of Debt Issuance Costs Associated With Lines of Credit Arrangements- Amendments to SEC Paragraphs Pursuant to Staff Announcements on June 18, 2015 EITF Meeting, which addresses the presentation of debt issuance costs related to line of credit arrangements. These updates are effective for interim and annual reporting periods beginning after December 15, 2015 and require retrospective application. The implementation of these updates is not expected to cause any material changes to our condensed consolidated financial statements other than the reclassification of certain debt issuance costs from assets to contra liabilities on our condensed consolidated balance sheets.  Debt issuance costs related to line of credit arrangements will remain classified as assets in accordance with ASU No. 2015-15. When these updates are implemented, deferred financing costs of $13,417 and $15,388 as of September 30, 2015 and December 31, 2014, respectively, will be reclassified from assets to the related debt obligations on our condensed consolidated balance sheets. 

In May 2014, the FASB issued ASU No. 2014-09, Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While this ASU specifically references contracts with customers, it also may apply to certain other transactions such as the sale of real estate or equipment. In July 2015, the FASB approved a one year deferral of the effective date for this ASU to interim and annual reporting periods beginning after December 15, 2017.  We are continuing to evaluate this guidance; however, we do not expect its adoption to have a material impact on our condensed consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts that would have been recorded in previous periods if the accounting had been completed at the acquisition date. This update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted.  The implementation of this update is not expected to have a material impact on our condensed consolidated financial statements.

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Segment Information
Hotel operating revenues	$ 437,171	$ 394,973	$ 1,243,744	$ 1,112,157
Rental income	73,747	63,837	207,561	190,959
FF&E reserve income	968	829	3,159	2,673
Total revenues	511,886	459,639	1,454,464	1,305,789
Hotel operating expenses	308,603	279,560	870,689	780,955
Depreciation and amortization	84,261	79,649	243,812	236,699
General and administrative	19,831	16,798	53,820	41,429
Acquisition related costs	851	14	1,986	237
Total expenses	413,546	376,021	1,170,307	1,059,320
Operating income (loss)	98,340	83,618	284,157	246,469
Interest income	11	13	32	63
Interest expense	(36,628)	(34,304)	(107,918)	(104,101)
Loss on early extinguishment of debt		(129)		(855)
Income before income taxes, equity in earnings of an investee and gain on sale of real estate	61,723	49,198	176,271	141,576
Income tax benefit	(514)	(39)	(1,445)	(1,110)
Equity in earnings (losses) of an investee	(24)	38	71	66
Income before gain on sale of real estate	61,185	49,197	174,897	140,532
Gain on sale of real estate			11,015	130
Net income	61,185	49,197	185,912	140,662
Total assets	6,494,550		6,494,550		$ 5,982,562
Corporate
Segment Information
General and administrative	19,831	16,798	53,820	41,429
Total expenses	19,831	16,798	53,820	41,429
Operating income (loss)	(19,831)	(16,798)	(53,820)	(41,429)
Interest income	11	13	32	63
Interest expense	(36,628)	(34,304)	(107,918)	(104,101)
Loss on early extinguishment of debt		(129)		(855)
Income before income taxes, equity in earnings of an investee and gain on sale of real estate	(56,448)	(51,218)	(161,706)	(146,322)
Income tax benefit	(514)	(39)	(1,445)	(1,110)
Equity in earnings (losses) of an investee	(24)	38	71	66
Income before gain on sale of real estate			(163,080)	(147,366)
Net income	(56,986)	(51,219)	(163,080)	(147,366)
Total assets	164,884		164,884		39,818
Hotels
Segment Information
Hotel operating revenues	437,171	394,973	1,243,744	1,112,157
Rental income		8,088	24,339	24,532
FF&E reserve income	968	829	3,159	2,673
Total revenues	446,338	403,890	1,271,242	1,139,362
Hotel operating expenses	308,603	279,560	870,689	780,955
Depreciation and amortization	54,100	54,024	159,421	160,402
Acquisition related costs	851	14	1,986	237
Total expenses	363,554	333,598	1,032,096	941,594
Operating income (loss)	82,784	70,292	239,146	197,768
Income before income taxes, equity in earnings of an investee and gain on sale of real estate	82,784	70,292	239,146	197,768
Income before gain on sale of real estate			239,146	197,768
Gain on sale of real estate				130
Net income	82,784	70,292	239,146	197,898
Total assets	3,903,957		3,903,957		3,748,062
Travel Centers
Segment Information
Rental income		55,749	183,222	166,427
Total revenues	65,548	55,749	183,222	166,427
Depreciation and amortization	30,161	25,625	84,391	76,297
Total expenses	30,161	25,625	84,391	76,297
Operating income (loss)	35,387	30,124	98,831	90,130
Income before income taxes, equity in earnings of an investee and gain on sale of real estate	35,387	30,124	98,831	90,130
Income before gain on sale of real estate			98,831	90,130
Gain on sale of real estate			11,015
Net income	35,387	$ 30,124	109,846	$ 90,130
Total assets	$ 2,425,709		$ 2,425,709		$ 2,194,682

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Hotel Management Agreements and Leases (Details)		1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 16, 2015	Jul. 31, 2015 item	Sep. 30, 2015 USD ($) item property	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) item property	Sep. 30, 2014 USD ($)	Apr. 28, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jan. 06, 2014 USD ($)
Management Agreements and Leases
Number of management agreements or leases | item			14		14
Percentage increase in minimum returns after funding for renovation of hotels					9.00%
Net book value			$ 6,045,156,000		$ 6,045,156,000				$ 5,674,160,000
Guarantee provided to the entity, remaining amount			14,893,000		14,893,000
Security deposit balance			53,175,000		53,175,000				$ 33,069,000
Real Estate Aggregate Purchase Price			477,883,000		477,883,000
Increase (Decrease) Operating Agreements Annual Minimum Returns and Rents					14,365,000
Purchase price excluding closing cost			$ 477,883,000		477,883,000
Increase (decrease) in annual minimum returns and rents					$ 14,365,000
Sonesta agreements
Management Agreements and Leases
Number of real estate properties leased or managed | property			31		31
Amount expected to be provided for renovation for acquisitions made					$ 45,000,000
Real Estate Aggregate Purchase Price							$ 750,000
Purchase price excluding closing cost							$ 750,000
Hotels
Management Agreements and Leases
Number of properties leased to TRSs | property			299		299
Number of properties leased to third parties | property			3		3
Amount by which the cash flow available to pay the entity's minimum rent or return was less than the minimum amount			$ 6,560,000	$ 8,782,000	$ 17,395,000	$ 30,963,000
Reduction of hotel operating expenses			0	42,000	1,295,000	5,052,000
Shortfalls due to unguaranteed portions of minimum returns			6,560,000	8,740,000	16,100,000	25,911,000
Amount by which the cash flow available to pay the entity's minimum rent or return was more than the minimum amount			28,969,000	17,329,000	65,973,000	24,408,000
Increase in guarantee provided to the entity			$ 11,970,000	4,150,000	$ 27,551,000	6,447,000
Hotels | Marriott No. 1 agreement
Management Agreements and Leases
Number of real estate properties leased or managed | property			53		53
Operating agreement annual rent and return					$ 68,277,000
Realized returns and rents			$ 17,046,000	16,938,000	51,080,000	50,745,000
Additional returns realized			$ 3,149,000		$ 3,149,000
Percentage increase in minimum returns after funding for renovation of hotels					10.00%
Amount funded for renovation					$ 3,005,000
Amount expected to be provided for renovation					$ 1,000,000
Hotels | Marriott No. 234 agreement
Management Agreements and Leases
Number of real estate properties leased or managed | item			68		68
Operating agreement annual rent and return					$ 106,243,000
Realized returns and rents			$ 26,553,000	29,232,000	$ 79,586,000	79,368,000
Guaranty payments threshold as percentage of minimum returns					90.00%
Guarantee provided to the entity, remaining amount			30,672,000		$ 30,672,000
Amount funded for renovation					3,500,000
Security deposit balance			7,389,000		7,389,000
Aggregate amount of replenished available security deposit			$ 3,658,000		$ 7,389,000
Hotels | InterContinental agreement
Management Agreements and Leases
Number of real estate properties leased or managed | item			93		93
Operating agreement annual rent and return					$ 149,778,000
Realized returns and rents			$ 37,444,000	34,875,000	109,461,000	104,624,000
Additional returns realized			2,607,000		5,784,000
Security deposit balance required to be maintained with the entity in 2015			37,000,000		37,000,000
Reduction in the minimum security deposit balance required to be maintained with the entity during 2014 and 2015 for every dollar of additional security deposit paid										$ 2
Additional security deposit paid								$ 2,772,000
Amount expected to be provided for renovation					34,750,000
Security deposit balance required to be maintained with the entity								$ 31,456,000
Security deposit balance			45,675,000		45,675,000
Aggregate amount of replenished available security deposit			4,992,000		12,709,000
Hotels | InterContinental agreement | Rosemont, IL
Management Agreements and Leases
Hotel management agreement fixed minimum return as percentage of investment	8.00%
Hotels | Sonesta agreements
Management Agreements and Leases
Number of hotels acquired | item		9
Operating agreement annual rent and return					81,433,000
Realized returns and rents			$ 13,186,000	8,424,000	$ 39,985,000	21,724,000
Percentage increase in minimum returns after funding for renovation of hotels					8.00%
Fixed minimum return as a percentage of invested capital					8.00%
Amount funded for renovation					$ 42,870,000
Amount expected to be provided for renovation					$ 55,000,000
Hotels | Wyndham agreement
Management Agreements and Leases
Number of properties leased to third parties | property			1		1
Number of real estate properties leased or managed | property			22		22
Operating agreement annual rent and return					$ 27,843,000
Realized returns and rents			$ 6,931,000	6,805,000	$ 20,700,000	20,044,000
Percentage increase in minimum returns after funding for renovation of hotels					8.00%
Guarantee provided to the entity, remaining amount			5,287,000		$ 5,287,000
Amount funded for renovation					5,296,000
Amount expected to be provided for renovation					3,700,000
Guarantee provided to the entity, maximum			35,656,000		35,656,000
Annual guarantee provided to the entity, maximum			$ 17,828,000		$ 17,828,000
Hotels | Hyatt Hotels Corporation
Management Agreements and Leases
Number of real estate properties leased or managed | item			22		22
Guarantee provided to the entity, maximum			$ 50,000,000		$ 50,000,000
Hotels | Carlson
Management Agreements and Leases
Number of real estate properties leased or managed | item			11		11
Guarantee provided to the entity, remaining amount			$ 25,580,000		$ 25,580,000
Guarantee provided to the entity, maximum			$ 40,000,000		$ 40,000,000
Hotels | Marriott No 5 contract
Management Agreements and Leases
Number of real estate properties leased or managed | property			1		1
Realized returns and rents			$ 2,529,000	$ 2,501,000
Guaranty payments made					$ 1,295,000
Hotels | Marriott No 5 contract | Marriott No. 234 agreement
Management Agreements and Leases
Realized returns and rents					$ 7,587,000	$ 7,503,000

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Real estate properties, at cost:
Land	$ 1,527,504	$ 1,484,210
Buildings, improvements and equipment	6,671,318	6,171,983
Purchase price	8,198,822	7,656,193
Accumulated depreciation	(2,153,666)	(1,982,033)
Total real estate properties, net	6,045,156	5,674,160
Cash and cash equivalents	7,375	11,834
Restricted cash (FF&E reserve escrow)	44,296	33,982
Due from related persons	46,862	40,253
Other assets, net	350,861	222,333
Total assets	6,494,550	5,982,562
LIABILITIES AND SHAREHOLDERS' EQUITY
Unsecured revolving credit facility	454,000	18,000
Unsecured term loan	400,000	400,000
Senior unsecured notes, net of discounts	2,413,530	2,412,135
Convertible senior unsecured notes	8,478	8,478
Security deposits	53,175	33,069
Accounts payable and other liabilities	160,063	106,903
Due to related persons	24,306	8,658
Dividends payable	5,166	5,166
Total liabilities	$ 3,518,718	$ 2,992,409
Commitments and Contingencies
Preferred shares of beneficial interest, no par value, 100,000,000 shares authorized:
Series D preferred shares; 7 1/8% cumulative redeemable; 11,600,000 shares issued and outstanding, aggregate liquidation preference of $290,000	$ 280,107	$ 280,107
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 151,547,288 and 149,920,449 shares issued and outstanding, respectively	1,515	1,499
Additional paid in capital	4,165,912	4,118,551
Cumulative net income	2,901,151	2,715,239
Cumulative other comprehensive income	17,881	25,804
Cumulative preferred distributions	(316,146)	(300,649)
Cumulative common distributions	(4,074,588)	(3,850,398)
Total shareholders' equity	2,975,832	2,990,153
Total liabilities and shareholders' equity	$ 6,494,550	$ 5,982,562

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 185,912	$ 140,662
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	243,812	236,699
Amortization of deferred financing costs and debt discounts as interest	4,374	4,034
Straight line rental income	(5,807)	(1,659)
Security deposits replenished	20,098	9,382
FF&E reserve income and deposits	(51,840)	(41,462)
Loss on extinguishment of debt		855
Equity in earnings of an investee	(71)	(66)
Gain on sale of real estate	(11,015)	(130)
Other non-cash (income) expense, net	650	8,463
Changes in assets and liabilities:
Increase in due from related persons	(1,629)	(922)
Increase in other assets	(7,479)	(2,283)
Decrease in accounts payable and other liabilities	(19,838)	(26,047)
Increase (decrease) in due to related persons	17,739	(972)
Net cash provided by operating activities	374,906	326,554
Cash flows from investing activities:
Real estate acquisitions and deposits	(380,926)	(60,000)
Real estate improvements	(172,627)	(159,027)
FF&E reserve escrow fundings	(6,505)	(4,699)
Net proceeds from sale of real estate		4,288
Eminent domain proceeds		6,178
Investment in Affiliates Insurance Company		(825)
Investment in The RMR Group Inc.	(15,196)
Net cash used in investing activities	(575,254)	(214,085)
Cash flows from financing activities:
Proceeds from issuance of senior unsecured notes, net of discount		690,071
Repayment of senior unsecured notes		(580,000)
Borrowings under usecured revolving credit facility	611,000	745,000
Repayments of unsecured revolving credit facility	(175,000)	(730,000)
Deferred financing costs	(5)	(6,881)
Repurchase of common shares	(419)
Distributions to preferred shareholders	(15,497)	(15,498)
Distributions to common shareholders	(224,190)	(218,579)
Net cash provided by (used in) financing activities	195,889	(115,887)
Decrease in cash and cash equivalents	(4,459)	(3,418)
Cash and cash equivalents at beginning of year	11,834	22,500
Cash and cash equivalents at end of year	7,375	19,082
Supplemental cash flow information:
Cash paid for interest	119,885	121,731
Cash paid for income taxes	2,289	3,947
Non-cash investing activities:
Hotel managers' deposits in FF&E reserve	49,774	38,328
Hotel managers' purchases with FF&E reserve	$ (45,965)	$ (43,278)
Investment in The RMR Group Inc. paid in common shares	43,285
Real estate acquisitions	$ (45,042)
Sales of real estate	$ 45,042

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Related Person Transactions - Amendment and Restatement of Management Agreements with RMR LLC (Details) - Up C Transaction	Jun. 05, 2015 agreement
RMR Trust | Amended Agreement
Related Party Transaction [Line Items]
Window for providing notice of termination of property management agreement for performance by the related party	60 days
Number of business days notice for termination of property management agreement for performance by the related party	60 days
Number of business days notice for termination of property management agreement for convenience by the related party	60 days
Window for providing notice of termination of property management agreement after change of control by the related party	12 months
RMR LLC
Related Party Transaction [Line Items]
Number of terminated management agreements for a performance reason before termination fee is incurred	1
Number of RMR LLC terminated management agreements for good cause before termination fee is incurred	1
Number of terminated management agreements for convenience before termination fee is incurred	1
RMR LLC | Amended Agreement
Related Party Transaction [Line Items]
Termination fee remaining term assumption	10 years

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Related Person Transactions (Tables)

9 Months Ended

Sep. 30, 2015

Related Person Transactions

Schedule of Rent

	Number of Sites	Initial Term End (1)		Minimum Annual Rent as of September 30, 2015		Deferred Rent (2)
TA No. 1 Agreement	39	December 31, 2029	$	48,295	$	27,421
TA No. 2 Agreement	38	December 31, 2028		46,765		29,107
TA No. 3 Agreement	38	December 31, 2026		49,613		29,324
TA No. 4 Agreement	38	December 31, 2030		46,297		21,233
TA No. 5 Agreement	40	June 30, 2024		62,949		42,915
	193		$	253,919	$	150,000

(1) TA has two renewal options of fifteen years each under each of the leases.

(2) The deferred rent obligation is subject to acceleration at our option upon an uncured default under our TA agreements or a change in control of TA, each as provided under the leases. 

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Related Person Transactions - Accounting for Investment in RMR Inc. (Details) - RMR Inc - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jun. 05, 2015	Sep. 30, 2015	Sep. 30, 2015
Related Party Transaction [Line Items]
Amount of investment acquired	$ 55,922
Fair value of investment	129,722
Initial other liabilities	$ 72,658
Investment at carrying value, including transaction costs		$ 132,296	$ 132,296
Straight line discount amortization period	20 years
Amortization of other liabilities to reduce business and property management fees		$ 911	$ 1,142
Class A common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	5,019,121
Up C Transaction | Common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,490,000
Up C Transaction | Class A common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	5,019,121
RMR Trust | Up C Transaction | Class B1 common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,000,000
RMR Trust | Up C Transaction | Class B2 common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	15,000,000
RMR Trust | Up C Transaction | Class B member units
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,000,000
GOV | Up C Transaction | Common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	700,000
GOV | Up C Transaction | Class A common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,541,201
SNH | Up C Transaction | Common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	2,345,000
SNH | Up C Transaction | Class A common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	5,272,787
SIR | Up C Transaction | Common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	880,000
SIR | Up C Transaction | Class A common shares
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	3,166,891

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Basis of Presentation (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Basis of Presentation
Ownership interest in subsidiaries (as a percent)	100.00%
Assets of TRSs	$ 32,875	$ 27,023
Liabilities of TRSs	$ 63,696	$ 50,528

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Basis of Presentation

9 Months Ended

Sep. 30, 2015

Basis of Presentation

Basis of Presentation

Note 1.  Basis of Presentation

The accompanying condensed consolidated financial statements of Hospitality Properties Trust and its subsidiaries, or HPT, we, our or us, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2014, or our 2014 Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included in these condensed consolidated financial statements. These condensed consolidated financial statements include the accounts of HPT and our subsidiaries, all of which are 100% owned directly or indirectly by HPT. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year. Reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current year’s presentation.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates.  Significant estimates in our condensed consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets, impairment of real estate and the valuation of intangible assets.

We have determined that each of our taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards CodificationTM.   We have concluded that we must consolidate each of our TRSs because we are the entity with the power to direct the activities that most significantly impact the VIEs’ economic performance and we have the obligation to absorb losses or the right to receive benefits from each VIE that could be significant to the VIE, and are, therefore, the primary beneficiary of each VIE.  The assets of our TRSs were $32,875 and $27,023 as of September 30, 2015 and December 31, 2014, respectively, and consist primarily of amounts due from, and working capital advances to, certain of their hotel managers.  The liabilities of our TRSs were $63,696 and $50,528 as of September 30, 2015 and December 31, 2014, respectively, and consist primarily of security deposits they hold from and amounts payable to certain of their hotel managers.  The assets of our TRSs are available to satisfy our TRSs’ obligations and we have guaranteed certain obligations of our TRSs.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Preferred shares, par value (in dollars per share)	$ 0	$ 0
Preferred shares, shares authorized	100,000,000	100,000,000
Preferred shares, dividend yield (as a percent)	7.125%	7.125%
Preferred shares, shares issued	11,600,000	11,600,000
Preferred shares, shares outstanding	11,600,000	11,600,000
Preferred shares, aggregate liquidation preference (in dollars)	$ 290,000	$ 290,000
Common shares, par value (in dollars per share)	$ 0.01	$ 0.01
Common shares, shares authorized	200,000,000	200,000,000
Common shares, shares issued	151,547,288	149,920,449
Common shares, shares outstanding	151,547,288	149,920,449

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Hotel Management Agreements and Leases

9 Months Ended

Sep. 30, 2015

Hotel Management Agreements and Leases

Hotel Management Agreements and Leases

Note 11. Hotel Management Agreements and Leases

As of September 30, 2015, 299 of our hotels are leased to our TRSs and managed by independent hotel operating companies and three are leased to third parties.

Marriott No. 1 agreement. Our management agreement with Marriott International, Inc., or Marriott, for 53 hotels provides that as of September 30, 2015 we are to be paid an annual minimum return of $68,277to the extent that gross revenues of the hotels, after payment of hotel operating expenses and funding of the FF&E reserve, are sufficient to do so.  We do not have any security deposits or guarantees for our minimum returns from the 53 hotels included in our Marriott No. 1 agreement.  Accordingly, the minimum returns we receive from these hotels managed by Marriott are limited to available hotel cash flows after payment of operating expenses and funding of the FF&E reserve. Marriott’s management and incentive fees are only earned after we receive our minimum returns.  We realized minimum returns of $17,046 and $16,938 during the three months ended September 30, 2015 and 2014, respectively, and minimum returns of $51,080 and $50,745 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  We also realized additional returns of $3,149 during the three and nine months ended September 30, 2015, which represents our share of hotel cash flows in excess of the minimum returns due for the period. 

We funded $3,005 for capital improvements at certain of the hotels included in our Marriott No. 1 agreement during the nine months ended September 30, 2015. We currently expect to fund $1,000 for capital improvements during the remainder of 2015 under this agreement. As we fund these improvements, the annual minimum returns payable to us increase by 10% of the amounts funded.

Marriott No. 234 agreement.  Our management agreement with Marriott for 68 hotels provides that as of September 30, 2015 we are to be paid anannual minimum return of $106,243.  We realized returns of $26,553 and $29,232 during the three months ended September 30, 2015 and 2014, respectively, and returns of $79,586 and $79,368 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  Pursuant to our Marriott No. 234 agreement, Marriott has provided us with a security deposit to cover minimum return payment shortfalls, if any.  During the three and nine months ended September 30, 2015, our available security deposit was replenished by $3,658 and $7,389, respectively, from the hotel cash flows in excess of the minimum returns due for the period.  The available balance of this deposit was $7,389 as of September 30, 2015.  Pursuant to our Marriott No. 234 agreement, Marriott has also provided us with a limited guarantee which expires in 2019 for shortfalls up to 90% of our minimum returns, after the available security deposit has been depleted.  Marriott was not required to make any guarantee payments to us during the three and nine months ended September 30, 2015, because the hotels generated net operating results in excess of the guarantee threshold amount (90% of the minimum returns due to us).  The available balance of the guarantee was $30,672 as of September 30, 2015. 

We funded $3,500for capital improvements at certain of the hotels included in our Marriott No. 234 agreement during the nine months ended September 30, 2015. As we funded these improvements, the annual minimum returns payable to us increase by 9% of the amounts funded.  We currently do not expect to make any fundings for capital improvements during the remainder of 2015 under this agreement.

Marriott No. 5 agreement. We lease one hotel in Kauai, Hawaii to Marriott.  This lease is guaranteed by Marriott and we realized $2,529 and $2,501 of rent for this hotel during the three months ended September 30, 2015 and 2014, respectively, and $7,587 and $7,503 of rent during the nine months ended September 30, 2015 and 2014, respectively.  The guarantee provided by Marriott with respect to this leased hotel is unlimited.

InterContinental agreement. Our management agreement with InterContinental for 93 hotels provides that as of September 30, 2015, we are to be paid annual minimum returns and rents of $149,778.  We realized minimum returns and rents of $37,444 and $34,875 during the three months ended September 30, 2015 and 2014, respectively, and minimum returns and rents of $109,461 and $104,624 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.  We also realized additional returns of $2,607 and $5,784 under this agreement during the three and nine months ended September 30, 2015, respectively, from the hotel cash flows in excess of our minimum payments due for the periods.  Pursuant to our InterContinental agreement, InterContinental has provided us with a security deposit to cover minimum payment shortfalls, if any.  During the three and nine months ended September 30, 2015, our available security deposit was replenished by $4,992 and $12,709, respectively, from the hotel cash flows in excess of the minimum payments due for the period.The available balance of this security deposit was $45,675 as of September 30, 2015.

Under this agreement, InterContinental is required to maintain a minimum security deposit of$37,000. In January 2014, we entered into a letter agreement with InterContinental under which the minimum security deposit balance required to be maintained during 2015 will be reduced by two dollars for every dollar of additional security deposit InterContinental provides to us.  During the first quarter of 2015, InterContinental provided us $2,772 of additional security deposits, which reduced the minimum security deposit amount required to $31,456. We refunded the additional security deposit to InterContinental in July 2015. 

On each of March 16, 2015 and May 15, 2015, we amended our management agreement with InterContinental in connection with our acquisitions of two hotels. As a result of the amendments, the annual minimum returns due to us increased by an aggregate of 8% of our investment in the two hotels. 

We currently expect to fund $34,750 for capital improvements to certain hotels under our InterContinental agreement during the remainder of 2015 and in 2016. We did not make any fundings for capital improvements to these hotels during the nine months ended September 30, 2015.  As we fund these improvements, the annual minimum returns payable to us increase by 8% of the amounts funded.

Sonesta agreement. Our management agreement with Sonesta provides that we are to be paid an annual minimum return equal to 8% of our invested capital, as defined in the management agreement ($81,433 as of September 30, 2015), to the extent that gross revenues of the hotels, after payment of hotel operating expenses and certain fees to Sonesta, are sufficient to do so.  We do not have any security deposits or guarantees for our hotels managed by Sonesta.  Accordingly, the returns we receive from hotels managed by Sonesta are limited to available hotel cash flows after payment of operating expenses. Sonesta’s incentive management fees, but not its other fees, are only earned after we receive our minimum returns. We realized returns of $13,186 and $8,424 during the three months ended September 30, 2015 and 2014, respectively, and returns of $39,985 and $21,724 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement.

Our Sonesta agreement does not require FF&E escrow deposits.  Under our Sonesta agreement, we are required to fund capital expenditures made at our hotels.  We funded $42,870 for renovations and other capital improvements to hotels included in our Sonesta agreement during the nine months ended September 30, 2015.  We currently expect to fund approximately $55,000 for renovations and other capital improvements during the remainder of 2015 and in 2016 under this agreement, including $45,000 related to the nine hotels we acquired in July 2015. The annual minimum returns due to us under the Sonesta agreement increase by8% of the amounts funded in excess of threshold amounts, as defined therein. See Note 10 for further information regarding our relationship with Sonesta.

Wyndham agreement. Our management agreement with Wyndham Hotel Group, or Wyndham, for 22 hotels provides that as of September 30, 2015, we are to be paid annual minimum returns and rents of $27,843.  We realized returns and rents of $6,931 and $6,805 during the three months ended September 30, 2015 and 2014, respectively, and returns and rents of $20,700 and $20,044 during the nine months ended September 30, 2015 and 2014, respectively, under this agreement. Pursuant to our Wyndham agreement, Wyndham has provided us with a limited guarantee, which is limited to $35,656($5,287 remaining at September 30, 2015), subject to an annual payment limit of $17,828 and which expires on July 28, 2020.  During the nine months ended September 30, 2015, Wyndham made  $1,295 of net guarantee payments to us. The guarantee provided by Wyndham with respect to the lease with Wyndham Vacation Resorts, Inc., or Wyndham Vacation, for part of one hotel is unlimited.

We funded $5,296 for renovations and other capital improvements to hotels included in our Wyndham agreement during the nine months ended September 30, 2015.  We currently expect to fund approximately $3,700 for capital improvements to certain hotels during the remainder of 2015 and in 2016 under this agreement.  As we fund these improvements, the annual minimum returns and rents payable to us increase by 8% of the amounts funded.

TA agreements.  See Note 10 for information about our TA agreements.

Other management agreement and lease matters. As of November 8, 2015, all payments due to us from our managers and tenants under our other operating agreements were current.  Minimum return and minimum rent payments due to us under some of these other hotel management agreements and leases are supported by guarantees.  The guarantee provided by Hyatt Hotels Corporation, or Hyatt, with respect to the 22 hotels managed by Hyatt is limited to $50,000  ($14,893 remaining at September 30, 2015).  The guarantee provided by Carlson Hotels Worldwide, or Carlson, with respect to the 11 hotels managed by Carlson is limited to $40,000($25,580 remaining at September 30, 2015).

Guarantees and security deposits generally.  Certain of our managed hotel portfolios had net operating results that exceeded the minimum returns due to us for the three and nine months ended September 30, 2015.Certain of our managed hotel portfolios had net operating results that were, in the aggregate, $6,560 and $8,782 less than the minimum returns due to us for the three months ended September 30, 2015 and 2014, respectively, and $17,395 and $30,963 less than the minimum returns due to us for the nine months ended September 30, 2015 and 2014, respectively.  When the managers of these hotels fund the shortfalls under the terms of our operating agreements or their guarantees, we reflect such fundings (including security deposit applications) in our condensed consolidated statements of comprehensive income as a reduction of hotel operating expenses.  When we reduce the amounts of the security deposits we hold for any of our operating agreements for payment deficiencies, it does not result in additional cash flow to us of the deficiency amounts, but reduces the refunds due to the respective lessees or managers who have provided us with these deposits upon expiration of the respective management agreement.  The security deposits are non-interest bearing and are not held in escrow.  There was no reduction to hotel operating expenses for the three months ended September 30, 2015 for shortfalls funded by our hotel managers.  Hotel operating expenses were reduced due to such fundings by $42 for the three months ended September 30, 2014 and by $1,295 and $5,052 for the nine months ended September 30, 2015 and 2014, respectively.  We had shortfalls at certain of our managed hotel portfolios not funded by the managers of these hotels under the terms of our operating agreements of $6,560 and $8,740 in the three months ended September 30, 2015 and 2014, respectively, and $16,100 and $25,911 in the nine months ended September 30, 2015 and 2014, respectively, which represent the unguaranteed portions of our minimum returns from Sonesta.

Certain of our managed hotel portfolios had net operating results that were in the aggregate, $28,969 and $17,329 more than the minimum returns due to us in the three months ended September 30, 2015 and 2014, respectively, and $65,973 and $24,408 more than the minimum returns due to us in the nine months ended September 30, 2015 and 2014, respectively. Certain of our guarantees and our security deposits may be replenished by future cash flows from the applicable hotel operations in excess of the minimum returns due to us pursuant to the terms of the respective agreements.  When our guarantees and our security deposits are replenished by cash flows from hotel operations, we reflect such replenishments in our condensed consolidated statements of comprehensive income as an increase to hotel operating expenses.  We had $11,970 and $4,150 of guarantee and security deposit replenishments in the three months ended September 30, 2015 and 2014, respectively.  We had $27,551 and $6,447 of guarantee and security deposit replenishments in the nine months ended September 30, 2015 and 2014, respectively. 

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 08, 2015
Document And Entity Information Abstract
Entity Registrant Name	HOSPITALITY PROPERTIES TRUST
Entity Central Index Key	0000945394
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		151,547,288
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2015

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

Note 12.  Fair Value of Assets and Liabilities

The table below presents certain of our assets carried at fair value at September 30, 2015, 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
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
Investment securities (1)	$	35,329	$	35,329	$	-	$	-

(1) Our investment securities, consisting of our 3,420,000 shares of TA, which are included in other assets, net in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs).  Our historical cost basis for these securities is $17,407.  The unrealized gain for these securities as of September 30, 2015 is included in cumulative other comprehensive income in our condensed consolidated balance sheets.

In addition to the investment securities included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, unsecured revolving credit facility, unsecured term loan, senior unsecured notes and security deposits. At September 30, 2015 and December 31, 2014, 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 variable interest rates, except as follows:

	September 30, 2015				December 31, 2014
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Senior Unsecured Notes, due 2016 at 6.3%	$	275,000	$	277,452	$	275,000	$	287,680
Senior Unsecured Notes, due 2017 at 5.625%		300,000		315,342		300,000		321,675
Senior Unsecured Notes, due 2018 at 6.7%		350,000		377,557		350,000		386,755
Senior Unsecured Notes, due 2022 at 5.0%		500,000		522,080		500,000		529,160
Senior Unsecured Notes, due 2023 at 4.5%		300,000		301,239		300,000		306,516
Senior Unsecured Notes, due 2024 at 4.65%		350,000		349,269		350,000		360,757
Senior Unsecured Notes, due 2025 at 4.5%		350,000		345,667		350,000		353,701
Convertible Senior Unsecured Notes, due 2027 at 3.8%		8,478		8,665		8,478		8,849
Unamortized discounts		(11,470)		-		(12,865)		-
Total financial liabilities	$	2,422,008	$	2,497,271	$	2,420,613	$	2,555,093

At September 30, 2015, we estimated the fair values of our senior unsecured notes using an average of the bid and ask price of our then outstanding issuances of senior unsecured notes (Level 2 inputs).  We estimated the fair value of our convertible senior unsecured notes using discounted cash flow analyses and currently prevailing market interest rates (Level 3 inputs) because no market quotes or other observable inputs for these notes were available at September 30, 2015 and December 31, 2014.

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Hotel operating revenues	$ 437,171	$ 394,973	$ 1,243,744	$ 1,112,157
Rental income	73,747	63,837	207,561	190,959
FF&E reserve income	968	829	3,159	2,673
Total revenues	511,886	459,639	1,454,464	1,305,789
Expenses:
Hotel operating expenses	308,603	279,560	870,689	780,955
Depreciation and amortization	84,261	79,649	243,812	236,699
General and administrative	19,831	16,798	53,820	41,429
Acquisition related costs	851	14	1,986	237
Total expenses	413,546	376,021	1,170,307	1,059,320
Operating income	98,340	83,618	284,157	246,469
Interest income	11	13	32	63
Interest expense (including amortization of deferred financing costs and debt discounts of $1,458 and $1,361, $4,374 and $4,034, respectively)	(36,628)	(34,304)	(107,918)	(104,101)
Loss on early extinguishment of debt		(129)		(855)
Income before income taxes, equity in earnings of an investee and gain on sale of real estate	61,723	49,198	176,271	141,576
Income tax benefit	(514)	(39)	(1,445)	(1,110)
Equity in earnings (losses) of an investee	(24)	38	71	66
Income before gain on sale of real estate	61,185	49,197	174,897	140,532
Gain on sale of real estate			11,015	130
Net income	61,185	49,197	185,912	140,662
Preferred distributions	(5,166)	(5,166)	(15,498)	(15,498)
Net income available for common shareholders	56,019	44,031	170,414	125,164
Net income	61,185	49,197	185,912	140,662
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities	(15,458)	3,420	(7,832)	479
Equity interest in investee's unrealized gains (losses)	(72)	(33)	(91)	9
Other comprehensive income (loss)	(15,530)	3,387	(7,923)	488
Comprehensive income	$ 45,655	$ 52,584	$ 177,989	$ 141,150
Weighted average common shares outstanding (basic)	151,359	149,665	150,476	149,616
Weighted average common shares outstanding (diluted)	151,386	150,007	150,863	149,834
Net income available for common shareholders per common share: Basic and diluted	$ 0.37	$ 0.29	$ 1.13	$ 0.84

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Indebtedness

9 Months Ended

Sep. 30, 2015

Indebtedness

Indebtedness

Note 6.  Indebtedness

Our principal debt obligations at September 30, 2015 were: (1) our $454,000 of outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) our $400,000 unsecured term loan; (3) an aggregate outstanding principal amount of $2,425,000 of public issuances of senior unsecured notes; and (4) an aggregate outstanding principal amount of $8,478 of public issuances of convertible senior unsecured notes. 

Our $750,000 unsecured revolving credit facility is available for general business purposes, including acquisitions.  The maturity date of our unsecured revolving credit facility is July 15, 2018 and, subject to the payment of an extension fee and meeting other conditions, we have an option to extend the stated maturity date by one year to July 15, 2019. We are required to pay interest on borrowings under our unsecured revolving credit facility at a rate of LIBOR plus a premium, which was 110 basis points at September 30, 2015. We also pay a facility fee on the total amount of lending commitments, which was 20 basis points per annum at September 30, 2015. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As of September 30, 2015, the annual interest rate payable on borrowings under our unsecured revolving credit facility was 1.29%. The weighted average annual interest rate for borrowings under our unsecured revolving credit facility was 1.30% and 1.28% for the three and nine months ended September 30, 2015, respectively, and 1.26% and 1.25% for the three and nine months ended September 30, 2014, respectively.  As of September 30, 2015 and November 8, 2015, we had $454,000 and $384,000 outstanding under our unsecured revolving credit facility, respectively.

Our $400,000 unsecured term loan, which matures on April 15, 2019, is prepayable without penalty at any time.  We are required to pay interest on the amount outstanding under our unsecured term loan at a rate of LIBOR plus a premium, which was 120 basis points at September 30, 2015.  The interest rate premium is subject to adjustment based on changes to our credit ratings. As of September 30, 2015, the annual interest rate for the amount outstanding under our unsecured term loan was1.40%.The weighted average annual interest rate for borrowings under our unsecured term loan was 1.39% and 1.38% for the three and nine months ended September 30, 2015, respectively, and 1.35% and 1.36% for the three and nine months ended September 30, 2014, respectively.

Our credit agreement for our unsecured revolving credit facility and unsecured term loan also includes a feature under which maximum aggregate borrowings under our unsecured revolving credit facility and unsecured term loan may be increased up to $2,300,000 on a combined basis in certain circumstances. Our credit agreement for our unsecured revolving credit facility and unsecured term loan and our unsecured notes indenture and its supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes RMR LLC ceasing to act as our business manager. Our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes indenture and its supplements also contain a number of covenants, including covenants that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of our credit agreement for our unsecured revolving credit facility and unsecured term loan and our senior unsecured notes indenture and its supplements at September 30, 2015.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2015

Shareholders' Equity

Shareholders' Equity

Note 5.  Shareholders’ Equity

Common Share Issuances and Repurchases

During the nine months ended September 30, 2015, we issued 63,119 of our common shares to RMR LLC as part of the business management fees payable by us under our business management agreement. See Note 10 for further information regarding this agreement.

On June 1, 2015, we granted 2,500 of our common shares valued at $30.59 per share, the closing price of our common shares on the New York Stock Exchange, or NYSE, on that day, to each of our five Trustees as part of their annual compensation.

On June 5, 2015, we issued 1,490,000 of our common shares in connection with our acquisition of shares of The RMR Group Inc. (formerly known as Reit Management & Research Inc.), or RMR Inc., as further described in Note 10.  RMR Inc. is the parent of RMR LLC, our manager.

On September 2, 2015, pursuant to our 2012 Equity Compensation Plan, we granted an aggregate of 76,250 of our common shares to our officers and certain employees of our manager, RMR LLC, valued at $25.66 per share, the closing price of our common shares on the NYSE on that day.

On September 24, 2015, we purchased an aggregate of 16,340 of our common shares for $25.62 per share, the closing price of our common shares on the NYSE on that day, from certain of our officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations associated with the vesting of awards of restricted common shares.

On September 28, 2015, we issued 2,500 of our common shares valued at $25.18 per share, the closing price of our common shares on the NYSE on that day, to our new Trustee as part of her annual compensation.

Distributions

On each of January 15, 2015, April 15, 2015,July 15, 2015 and October 15, 2015, we paid a $0.4453 per share distribution, or $5,166, to our Series Dpreferred shareholders.

On February 24, 2015, we paid a $0.49 per share distribution, or $73,466, to our common shareholders. On May 21, 2015, we paid a $0.50 per share distribution, or $74,981, to our common shareholders.  On August 19, 2015, we paid a $0.50 per share distribution, or $75,743, to our common shareholders.  On October 12, 2015, we declared a $0.50 per share dividend, or $75,774, to our common shareholders of record on October 23, 2015.  We expect to pay this amount on or about November 19, 2015.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) represents the unrealized gain (loss) on the TA shares we own and our share of the comprehensive income (loss) of Affiliates Insurance Company, or AIC. See Note 10 for further information regarding these investments.

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Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value of Assets and Liabilities

Schedule of certain of the entity's assets carried at fair value, categorized by the level of inputs used in the valuation of each asset

			Fair Value at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
Investment securities (1)	$	35,329	$	35,329	$	-	$	-

(1) Our investment securities, consisting of our 3,420,000 shares of TA, which are included in other assets, net in our condensed consolidated balance sheets, are reported at fair value which is based on quoted market prices (Level 1 inputs).  Our historical cost basis for these securities is $17,407.  The unrealized gain for these securities as of September 30, 2015 is included in cumulative other comprehensive income in our condensed consolidated balance sheets.

Schedule of fair value of additional financial instruments

	September 30, 2015				December 31, 2014
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Senior Unsecured Notes, due 2016 at 6.3%	$	275,000	$	277,452	$	275,000	$	287,680
Senior Unsecured Notes, due 2017 at 5.625%		300,000		315,342		300,000		321,675
Senior Unsecured Notes, due 2018 at 6.7%		350,000		377,557		350,000		386,755
Senior Unsecured Notes, due 2022 at 5.0%		500,000		522,080		500,000		529,160
Senior Unsecured Notes, due 2023 at 4.5%		300,000		301,239		300,000		306,516
Senior Unsecured Notes, due 2024 at 4.65%		350,000		349,269		350,000		360,757
Senior Unsecured Notes, due 2025 at 4.5%		350,000		345,667		350,000		353,701
Convertible Senior Unsecured Notes, due 2027 at 3.8%		8,478		8,665		8,478		8,849
Unamortized discounts		(11,470)		-		(12,865)		-
Total financial liabilities	$	2,422,008	$	2,497,271	$	2,420,613	$	2,555,093

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Per Common Share Amounts (Tables)

9 Months Ended

Sep. 30, 2015

Per Common Share Amounts

Schedule of reconciliation weighted average common shares to calculate basic and diluted earnings per share

	For the three months ended September 30,		For the nine months ended September 30,
	2015	2014	2015	2014
	(in thousands)
Weighted average common shares for basic earnings per share	151,359	149,665	150,476	149,616
Effect of dilutive securities:
Contingently issuable common shares	-	316	360	189
Unvested share awards	27	26	27	29
Weighted average common shares for diluted earnings per share	151,386	150,007	150,863	149,834

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Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information

Segment Information

Note 9.  Segment Information

	For the Three Months Ended September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	437,171	$	-	$	-	$	437,171
Rental income		8,199		65,548		-		73,747
FF&E reserve income		968		-		-		968
Total revenues		446,338		65,548		-		511,886
Hotel operating expenses		308,603		-		-		308,603
Depreciation and amortization		54,100		30,161		-		84,261
General and administrative		-		-		19,831		19,831
Acquisition related costs		851		-		-		851
Total expenses		363,554		30,161		19,831		413,546
Operating income (loss)		82,784		35,387		(19,831)		98,340
Interest income		-		-		11		11
Interest expense		-		-		(36,628)		(36,628)
Income (loss) before income taxes and equity in losses of an investee		82,784		35,387		(56,448)		61,723
Income tax expense		-		-		(514)		(514)
Equity in losses of an investee		-		-		(24)		(24)
Net income (loss)	$	82,784	$	35,387	$	(56,986)	$	61,185
	For the Nine Months Ended September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	1,243,744	$	-	$	-	$	1,243,744
Rental income		24,339		183,222		-		207,561
FF&E reserve income		3,159		-		-		3,159
Total revenues		1,271,242		183,222		-		1,454,464
Hotel operating expenses		870,689		-		-		870,689
Depreciation and amortization		159,421		84,391		-		243,812
General and administrative		-		-		53,820		53,820
Acquisition related costs		1,986		-		-		1,986
Total expenses		1,032,096		84,391		53,820		1,170,307
Operating income (loss)		239,146		98,831		(53,820)		284,157
Interest income		-		-		32		32
Interest expense		-		-		(107,918)		(107,918)
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate		239,146		98,831		(161,706)		176,271
Income tax expense		-		-		(1,445)		(1,445)
Equity in earnings of an investee		-		-		71		71
Income (loss) before gain on sale of real estate		239,146		98,831		(163,080)		174,897
Gain on sale of real estate		-		11,015		-		11,015
Net income (loss)	$	239,146	$	109,846	$	(163,080)	$	185,912
	As of September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Total assets	$	3,903,957	$	2,425,709	$	164,884	$	6,494,550

	For the Three Months Ended September 30, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	394,973	$	-	$	-	$	394,973
Rental income		8,088		55,749		-		63,837
FF&E reserve income		829		-		-		829
Total revenues		403,890		55,749		-		459,639
Hotel operating expenses		279,560		-		-		279,560
Depreciation and amortization		54,024		25,625		-		79,649
General and administrative		-		-		16,798		16,798
Acquisition related costs		14		-		-		14
Total expenses		333,598		25,625		16,798		376,021
Operating income (loss)		70,292		30,124		(16,798)		83,618
Interest income		-		-		13		13
Interest expense		-		-		(34,304)		(34,304)
Loss on early extinguishment of debt						(129)		(129)
Income (loss) before income taxes and equity in earnings of an investee		70,292		30,124		(51,218)		49,198
Income tax expense		-		-		(39)		(39)
Equity in earnings of an investee		-		-		38		38
Net income (loss)	$	70,292	$	30,124	$	(51,219)	$	49,197
	For the Nine Months Ended September 30, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	1,112,157	$	-	$	-	$	1,112,157
Rental income		24,532		166,427		-		190,959
FF&E reserve income		2,673		-		-		2,673
Total revenues		1,139,362		166,427		-		1,305,789
Hotel operating expenses		780,955		-		-		780,955
Depreciation and amortization		160,402		76,297		-		236,699
General and administrative		-		-		41,429		41,429
Acquisition related costs		237		-		-		237
Total expenses		941,594		76,297		41,429		1,059,320
Operating income (loss)		197,768		90,130		(41,429)		246,469
Interest income		-		-		63		63
Interest expense		-		-		(104,101)		(104,101)
Loss on early extinguishment of debt		-		-		(855)		(855)
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate		197,768		90,130		(146,322)		141,576
Income tax expense		-		-		(1,110)		(1,110)
Equity in earnings of an investee		-		-		66		66
Income (loss) before gain on sale of real estate		197,768		90,130		(147,366)		140,532
Gain on sale of real estate		130		-		-		130
Net income (loss)	$	197,898	$	90,130	$	(147,366)	$	140,662
	As of December 31, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Total assets	$	3,748,062	$	2,194,682	$	39,818	$	5,982,562

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Real Estate Properties

9 Months Ended

Sep. 30, 2015

Real Estate Properties

Real Estate Properties

Note 7.  Real Estate Properties

At September 30, 2015, we owned 302 hotels and 193 travel centers which are operated under 14 operating agreements.

During the nine months ended September 30, 2015, we funded $179,132 for improvements to certain of our properties which, pursuant to the terms of our management and lease agreements with our hotel managers and tenants, resulted in increases in our contractual annual minimum returns and rents of $14,365.  See Notes 10 and 11 for further information about our management and lease agreements and our fundings of improvements to certain of our properties.

During the nine months ended September 30, 2015, we acquired 11 hotels, a land parcel adjacent to one of our hotels, 14 travel centers and certain assets at 11 travel centers we lease to TA.  Our allocation of the purchase price of these acquisitions based on the estimated fair value of the acquired assets is presented in the table below.  The allocations of purchase prices are based on preliminary estimates and may change upon completion of third party appraisals.

Acquisition date	Location		Purchase price (1)		Land		Land improvements		Building and improvements		Furniture, fixtures and equipment		Intangible assets
3/16/2015	Rosemont, IL (2) (4)	$	35,500	$	2,375	$	-	$	31,401	$	1,463	$	261
4/28/2015	Ft. Lauderdale, FL (3) (5)		750		750		-		-		-		-
5/15/2015	Denver, CO (2) (6)		77,250		8,193		-		61,185		7,872		-
6/1/2015	Various (3) (7)		227,877		26,286		67,160		134,389		42		-
7/23/2015	Various (2) (8)		85,000		13,165		-		64,338		7,497		-
9/23/2015	Various (3) (7)		51,506		9,165		21,266		21,075		-		-
		$	477,883	$	59,934	$	88,426	$	312,388	$	16,874	$	261

(1) Excludes acquisition related costs.

(2) We accounted for these transactions as business combinations.  The pro forma impact of including the results of operations of these acquisitions from the beginning of the year is not material to our condensed consolidated financial statements.

(3) We accounted for these transactions as asset acquisitions.

(4) On March 16, 2015, we acquired a 300 room hotel located in Rosemont, IL for $35,500, excluding acquisition related costs.  We added this Holiday Inn and Suites® branded hotel to our management agreement with InterContinental Hotels Group, plc, or InterContinental.  See Note 11 for further information regarding our InterContinental agreement. 

(5) On April 28, 2015, we acquired a land parcel adjacent to one of our hotels in Fort Lauderdale, FL for $750, excluding acquisition related costs. See Note 10 for further information regarding this acquisition.

(6) On May 15, 2015, we acquired a 364 room full service hotel located in Denver, CO for $77,250, excluding acquisition related costs.  We added this Crowne Plaza® branded hotel to our management agreement with InterContinental.  See Note 11 for further information regarding our InterContinental agreement.

(7) On June 1, 2015, we entered agreements with TA to acquire and leaseback 14 travel centers it owned and certain assets it owned at11 properties we lease to TA for an aggregate purchase price of approximately $279,383.  During June 2015, we acquired 12 of these travel centers and certain assets at10 properties TA leases from us for an aggregate purchase price of $227,877.  On September 23, 2015, we acquired the remaining two travel centers and certain assets at a property TA leases from us for an aggregate purchase price of $51,506.  Pursuant to these agreements, we also agreed to acquire from, and leaseback to, TA five travel centers it is developing for purchase prices equal to TA’s development costs, which are estimated to be approximately $118,000.  The acquisition of these five travel centers is expected to occur as development of these travel centers is completed before June 30, 2017.  See Note 10 for further information regarding this transaction and our TA agreements. 

(8) On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for $85,000, excluding acquisition related costs.  We converted these hotels to Sonesta ES Suites® branded hotels and added them to our management agreement with Sonesta International Hotels Corporation, or Sonesta.  See Note 10 for further information regarding this transaction and our Sonesta agreement.

On June 9, 2015, we sold five TA branded travel centers to TA for $45,042.  As a result of this sale, we recorded an $11,015 gain on sale of real estate in the three months ended June 30, 2015.  See Note 10 for further information regarding this transaction and our TA agreements.

On October 27, 2015, we entered an agreement to acquire two extended stay hotels with 262 suites located in Cleveland and Westlake, OH for an aggregate purchase price of $12,000.  We plan to convert these hotels to Sonesta ES Suites® and add them to our management agreement with Sonesta.  See Note 10 for further information regarding this transaction and our Sonesta agreement.

On October 30, 2015, we acquired the land and certain improvements at a travel center located in Waterloo, NY that we leased from a third party and subleased to TA for $15,000, excluding acquisition related costs.

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Taxes

Income Taxes

Note 8. Income Taxes

We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, and accordingly are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements.  We are subject to income tax in Canada, Puerto Rico and certain states despite our REIT status.  Also, we lease our managed hotels to our wholly owned TRSs that, unlike most of our other subsidiaries, file separate consolidated federal corporate income tax returns and are subject to federal, state and foreign income taxes.  Our consolidated income tax provision included in our condensed consolidated statements of comprehensive income includes the income tax provision related to the operations of our TRSs and certain state and foreign income taxes incurred by us despite our REIT status.

During the three and nine months ended September 30, 2015, we recognized income tax expense of $514 and $1,445, respectively, which includes $79 and $155, respectively, of foreign taxes and $435 and $1,290, respectively, of state taxes.  During the three and nine months ended September 30, 2014, we recognized income tax expense (benefit) of $39 and $1,110,respectively, which includes $16 and $86, respectively, of foreign taxes, $23 and $1,046, respectively, of state taxes and zero and ($22), respectively, of federal taxes.

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Related Person Transactions

9 Months Ended

Sep. 30, 2015

Related Person Transactions

Related Person Transactions

Note 10. Related Person Transactions

We have relationships and historical and continuing transactions with TA, RMR LLC, RMR Inc., Sonesta and others related to them, including other companies to which RMR LLC provides management services and which have trustees, directors and officers who are also trustees, directors or officers of us, RMR Inc. or RMR LLC. For further information about these and other such relationships and certain other related person transactions, please refer to our 2014 Annual Report and our Current Reports on Form 8-K filed with the Securities and Exchange Commission, or SEC, on June 5, 8, 12, 22 and 25, July 28 and September 23, 2015.  

TA: TA was formerly our 100% owned subsidiary until it was spun out to our shareholders in 2007. As of September 30, 2015, we owned 3,420,000 of TA’s common shares, representing approximately 8.9% of TA’s outstanding common shares, and we are TA’s largest shareholder.  TA is our largest tenant and property operator.

On June 1, 2015, we entered a transaction agreement, or the TA Transaction Agreement, with TA, pursuant to which, among other things, (i) we and TA agreed to expand and subdivide the lease pursuant to which we then leased to TA 144 properties that TA primarily operates under the “TravelCenters of America,” “TA” and related brand names, which we historically referred to as our TA No. 1 agreement and which we refer to in this Note as the Prior TA Agreement, into four amended and restated leases, or the New TA Agreements, (ii) we agreed to purchase from TA 14 travel centers and certain assets it owned at 11 properties we lease to TA for an aggregate of $279,383 and we agreed to leaseback those properties and assets to TA under the New TA Agreements, (iii) TA agreed to purchase from us five travel centers that we then leased to TA under the Prior TA Agreement for an aggregate of $45,042 and (iv) we agreed to purchase from TA five travel centers upon the completion of their development at a purchase price equal to their development costs, including the cost of the land, which costs are estimated to be not more than $118,000 in the aggregate and we agreed to leaseback these development properties to TA under the New TA Agreements. The terms of the TA Transaction Agreement were approved by special committees of our Independent Trustees and TA’s independent directors, none of whom are directors or trustees of the other company.  Each special committee was represented by separate counsel.  As of September 30, 2015, the following transactions pursuant to the TA Transaction Agreement were completed:

· We entered into the four New TA Agreements with a subsidiary of TA, or our TA No. 1 agreement, TA No. 2 agreement, TA No. 3 agreement and TA No. 4 agreement with expirations in 2029, 2028, 2026 and 2030, respectively.  Each new TA Agreement grants TA two renewal options of 15 years each. Percentage rent, which totaled $2,902 in 2014 under the Prior TA Agreement, was incorporated into the annual minimum rent under the New TA Agreements and was otherwise eliminated for the remainder of 2015; thereafter, percentage rent will be equal to 3% of the excess of gross non-fuel revenues over gross non-fuel revenues in 2015.  In the case of the five properties to be developed by TA and sold to us, the base year for percentage rent will be the calendar year in which the third anniversary of the completion of development of the property occurs and percentage rent will not apply to those properties until the next succeeding year.  The deferred rent obligation of $107,085, which was due December 31, 2022, was allocated among the New TA Agreements and the due dates were extended to the end of the initial term of each respective New TA Agreement.

· We purchased from TA, for $279,383,  14 travel centers it owned and certain assets it owned at 11 properties TA leased from us. We leased back these properties to TA under the New TA Agreements.  The annual minimum rent payable to us increased by $24,027 as a result of the completion of this purchase and sale leaseback.

· TA purchased from us, for $45,042,  five travel centers that we previously leased to TA under the Prior TA Agreement.  These properties were subleased by TA to its franchisees.  TA’s annual minimum rent decreased by $3,874 as a result of our completion of the sale of these properties.  We recognized a gain of $11,015 on these sales.

· We and TA entered into an amendment to the lease that we have historically referred to as our TA No. 2 agreement, and which we now refer to as our TA No. 5 agreement.  Among other things, this amendment eliminated percentage rent payable on fuel, which, in 2014 was nominal but was not paid by TA because we had previously waived payment of the first $2,500 of percentage rent due under the TA No. 5 agreement.

As of September 30, 2015, we leased to TA a total of 153 travel centers under the New TA Agreements and 40 travel centers under the TA No. 5 agreement.  As of September 30, 2015, the number of travel centers leased, the term, the annual minimum rent and deferred rent balances under our five leases with TA were as follows:

	Number of Sites	Initial Term End (1)		Minimum Annual Rent as of September 30, 2015		Deferred Rent (2)
TA No. 1 Agreement	39	December 31, 2029	$	48,295	$	27,421
TA No. 2 Agreement	38	December 31, 2028		46,765		29,107
TA No. 3 Agreement	38	December 31, 2026		49,613		29,324
TA No. 4 Agreement	38	December 31, 2030		46,297		21,233
TA No. 5 Agreement	40	June 30, 2024		62,949		42,915
	193		$	253,919	$	150,000

(1) TA has two renewal options of fifteen years each under each of the leases.

(2) The deferred rent obligation is subject to acceleration at our option upon an uncured default under our TA agreements or a change in control of TA, each as provided under the leases. 

We recognized rental income of $65,548 and $55,749 for the three months ended September 30, 2015 and 2014, respectively, and $181,174 and $166,427 for the nine months ended September 30, 2015 and 2014, respectively, under our leases with TA.  On June 9, 2015, we began recognizing the deferred rent obligation under our TA agreements as rental income on a straight line basis over the remaining initial terms of the respective leases because we believe thefuture payment of these amounts to us by TA is reasonably assured.  Rental income for the three months ended September 30, 2015 and 2014 includes $3,647 and $422, respectively, and for the nine months ended September 30, 2015 and 2014 includes $5,452 and $1,266, respectively, of adjustments necessary to record the scheduled rent increase under the Prior TA Agreement, the deferred rent obligations under our TA agreements and the estimated future payment to us by TA for the cost of removing underground storage tanks on a straight line basis.  As of September 30, 2015 and December 31, 2014, we had accounts receivable from TA of $46,465 and $40,253, respectively, which amounts are included in due from related persons on our condensed consolidated balance sheets.

Under our leases with TA, we funded $70,150 and $41,961 for the nine months ended September 30, 2015 and 2014, respectively, for qualifying capital improvements at the leased travel centers and, as a result, TA's annual minimum rent payable to us increased by approximately $5,963, and $3,567, respectively.

We waived $271 and $126 of percentage rent under the TA No. 5 agreement for the three months ended September 30, 2015 and 2014, respectively, and $819 and $372 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, we have cumulatively waived $1,826 of the $2,500 of percentage rent we previously agreed to waive. The total amount of percentage rent (which is net of the waived amount) that we recognized during the three months ended September 30, 2015 and 2014 was zero and $557, respectively, and during the nine months ended September 30, 2015 and 2014 was $2,048 and $2,129, respectively.

In October 2015, we completed the purchase of the land and certain improvements at a travel center we then leased from a third party and subleased to TA located in Waterloo, NY for $15,000.  Upon this acquisition, the land and improvements were directly leased to TA under our TA No. 5 agreement and the annual minimum rent increased by $1,275.  

Acquisition of Interest in our Manager:   On June 5, 2015, we and three other REITs to which RMR LLC provides management services – Government Properties Income Trust, or GOV, Select Income REIT, or SIR, Senior Housing Properties Trust, or SNH, and collectively with GOV and SIR, the Other REITs – participated in a transaction, or the Up-C Transaction, by which we and the Other REITs each acquired an ownership interest in RMR Inc.

The Up-C Transaction was completed pursuant to a transaction agreement by and among us, our manager, RMR LLC, its then sole member, Reit Management & Research Trust, or RMR Trust, and RMR Inc. and similar transaction agreements that each Other REIT entered with RMR LLC, RMR Trust and RMR Inc. RMR Trust is owned by our Managing Trustees, Barry and Adam Portnoy. Pursuant to these transaction agreements: we contributed to RMR Inc. 1,490,000 of our common shares and $12,622 in cash; GOV contributed to RMR Inc. 700,000 of its common shares and $3,917 in cash;  SIR contributed to RMR Inc. 880,000 of its common shares and $15,880 in cash; SNH contributed to RMR Inc. 2,345,000 of its common shares and $13,967 in cash; RMR Trust contributed to RMR Inc. $11,520 in cash, which RMR Inc. contributed to RMR LLC; RMR LLC issued 1,000,000 of its class B membership units to RMR Inc.; RMR Inc. issued 5,019,121 shares of its class A common stock to us, 1,541,201 shares of its class A common stock to GOV, 3,166,891 shares of its class A common stock to SIR, 5,272,787 shares of its class A common stock to SNH and 1,000,000 shares of its class B-1 common stock and 15,000,000 shares of its class B-2 common stock to RMR Trust; RMR Trust delivered 15,000,000 of the 30,000,000 class A membership units of RMR LLC which RMR Trust then owned to RMR Inc.; and RMR Inc. delivered to RMR Trust our common shares, the common shares of the Other REITs and the cash which had been contributed by us and the Other REITs to RMR Inc.

The class A common stock and class B-1 common stock of RMR Inc. share ratably as a single class in dividends and other distributions of RMR Inc. when and if declared by the board of directors of RMR Inc. and have the same rights in a liquidation of RMR Inc. The class B-1 common stock of RMR Inc. is convertible into class A common stock of RMR Inc. on a 1:1 basis. The class A common stock of RMR Inc. has one vote per share. The class B-1 common stock of RMR Inc. has 10 votes per share. The class B-2 common stock of RMR Inc. has no economic interest in RMR Inc., but has 10 votes per share and is paired with the class A membership units of RMR LLC owned by RMR Trust. The class A membership units of RMR LLC owned by RMR Trust are required to be redeemed by RMR LLC upon request by RMR Trust for class A common stock of RMR Inc. on a 1:1 basis, or if RMR Inc. elects, cash. Under the governing documents of RMR Inc., upon the redemption of a class A membership unit of RMR LLC by RMR Trust, the class B-2 common stock of RMR Inc. “paired” with an equal number of class A membership units are cancelled for no additional consideration.

As part of the Up-C Transaction and concurrently with entering into the transaction agreements, on June 5, 2015:

· We entered into an amended and restated business management agreement and an amended and restated property management agreement with RMR LLC. The amendments made by these agreements are described below in this Note under “Amendment and Restatement of Management Agreements with RMR LLC.” Each Other REIT also entered amended and restated business and property management agreements with RMR LLC which made similar amendments to their management agreements with RMR LLC.

· We entered into a registration rights agreement with RMR Inc. covering the class A common stock of RMR Inc. that we received in the Up-C Transaction, pursuant to which we received demand and piggyback registration rights, subject to certain limitations. Each Other REIT entered into a similar registration rights agreement with RMR Inc.

· We entered into a lock up and registration rights agreement with RMR Trust and Barry and Adam Portnoy pursuant to which RMR Trust and Barry and Adam Portnoy agreed not to transfer the 1,490,000 of our common shares RMR Trust received in the Up-C Transaction for a period of 10 years and we granted them certain registration rights, subject to certain limited exceptions. Each Other REIT also entered into a similar lock up and registration rights agreement with RMR Trust and Barry and Adam Portnoy.

As a result of the Up-C Transaction: RMR LLC became a subsidiary of RMR Inc.; RMR Inc. became the managing member of RMR LLC; through our ownership of class A common stock of RMR Inc., we currently own an indirect 16.2% economic interest in RMR LLC; through their ownership of class A common stock of RMR Inc., GOV, SIR and SNH currently have an indirect 5.0%,  10.2% and 17.0% economic interest in RMR LLC, respectively; and RMR Trust through its ownership of class B-1 common stock of RMR Inc., class B-2 common stock of RMR Inc. and class A membership units of RMR LLC currently directly and indirectly has a 51.6% economic interest in RMR LLC and controls 91.4% of the voting power of outstanding capital stock of RMR Inc.

Pursuant to the transaction agreements, we and each Other REIT agreed to distribute half of the shares of class A common stock of RMR Inc. received in the Up-C Transaction to our respective shareholders as a special distribution, and RMR Inc. agreed to facilitate this distribution by filing a registration statement with the SEC to register the shares of class A common stock of RMR Inc. to be distributed and by seeking a listing of those shares on a national stock exchange upon the registration statement being declared effective by the SEC.

The distribution of shares of class A common stock of RMR Inc. that we and the Other REITs have agreed to make to our and the Other REITs’ shareholders will be made only after a registration statement, including a prospectus, is declared effective by the SEC.

Amendment and Restatement of Management Agreements with RMR LLC: As part of the Up-C Transaction, on June 5, 2015, we and RMR LLC entered into an amended business management agreement, which amended and restated our previous business management agreement with RMR LLC and an amended property management agreement, which amended and restated our previous property management agreement with RMR LLC. Our amended business management agreement and amended property management agreement are referred to together in this Note as our amended management agreements. Our amended management agreements were effective as of June 5, 2015.

Our amended management agreements have terms that end on December 31, 2035, and automatically extend on December 31st of each year for an additional year, so that the terms of the agreements thereafter end on the 20th anniversary of the date of the extension. We have the right to terminate each amended management agreement: (i) at any time on 60 days’ written notice for convenience, (ii) immediately upon written notice for cause, as defined therein, (iii) on 60 days’ written notice given within 60 days after the end of any calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. RMR LLC has the right to terminate the amended management agreements for good reason, as defined therein.

If we terminate one or both of our amended management agreements for convenience, or if RMR LLC terminates one or both of our amended management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated amended management agreement(s) for the remaining term. If we terminate one or both of our amended management agreements for a performance reason, as defined therein, we have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a remaining term of 10 years.  We are not required to pay any termination fee if we terminate one or both of our amended management agreements for cause or as a result of a change of control of RMR LLC.

Accounting for Investment in RMR Inc.: On June 5, 2015, we acquired 5,019,121 shares of class A common stock of RMR Inc. for $55,922, excluding acquisition related costs.  We have concluded, for accounting purposes, that the consideration paid for this investment in RMR Inc.’s shares of class A common stock represented a discount to the fair value of these shares.  We account for this investment under the cost method of accounting and have recorded this investment at its estimated fair value of $129,722 as of June 5, 2015 using Level 3 inputs as defined in the fair value hierarchy under GAAP.  As a result, we recorded a liability for the amount by which the estimated fair value exceeded the price we paid for these shares and which amount we are amortizing as described below.  As of September 30, 2015, the unamortized balance of this liability was $72,658 and it is included in accounts payable and other liabilities in our condensed consolidated balance sheets.  Our investment is included in other assets in our condensed consolidated balance sheets and the carrying value of our investment was $132,296, including acquisition related costs, as of September 30, 2015.  We believe the carrying value of our investment in RMR Inc. as of September 30, 2015 approximates its estimated fair value for accounting purposes. The liability related to the acquisition of these shares is being amortized on a straight line basis over the 20 year life of the business and property management agreements with RMR LLC as a reduction to business management fees and property management fees, which are included in general and administrative and hotel operating expenses, respectively, in our condensed consolidated statements of comprehensive income.  Amortization of the liability, included in general and administrative expense for the three and nine months ended September 30, 2015, totaled $911 and $1,142, respectively.

RMR LLC Management Fees and Reimbursements: We recognized business and property management feesof $17,392 and $14,309 for the three months ended September 30, 2015 and 2014, respectively, and $45,856 and $34,896 for the nine months ended September 30, 2015 and 2014, respectively. The business management fees for the three and nine months ended September 30, 2015 include estimated 2015 incentive fees of $8,561 and $17,383, respectively, based on our common share total return as of September 30, 2015.  The actual amount of incentive fees payable to RMR LLC for 2015, if any, will be based on our common share total return for the two year period ended December 31, 2015, and will be payable in January 2016.  Although no incentive fee was ultimately payable to RMR LLC for 2014, business management fees we recognized for the three and nine months ended September 30, 2014 include $4,778and $6,951, respectively, of then estimated 2014 incentive fees that would have been payable in common shares after the year end 2014 based on our common share total return as of those respective 2014 periods.

The business management fees we recognized for the 2015 and 2014 periods are included in general and administrative expenses in our condensed consolidated financial statements.  The property management amounts are included in hotel operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements and are comprised of fees we recognized under both our previous property management agreement and our amended property management agreement.  In accordance with the terms of our previous business management agreement, we issued 52,366 and 97,816 of our common shares to RMR LLC for the nine months ended September 30, 2015 and 2014, respectively, as payment for portions of the base business management fees we recognized for those periods.  Our amended business management agreement requires that 100% of the management fee due to RMR LLC be paid by us in cash.

Pursuant to our previous and amended management agreements with RMR LLC, we are responsible for paying all of the property level operating costs at the one office building we own which is attached to a hotel we own.  These property level costs include certain payroll and related costs, which costs are generally incorporated into rents charged to our office tenants at this building.  The total of the property management related reimbursements we paid to RMR LLC was $37and $19 for the three months ended September 30, 2015 and 2014, respectively, and these costs are included in hotel operating expenses in our condensed consolidated financial statements for these periods.  In addition, we have historically awarded share grants to certain RMR LLC employees under our equity compensation plan and we accrue estimated amounts for such share grants throughout each year based upon historical practices.  In September 2015 and 2014, we made annual share grants to RMR LLC employees of 76,250 and 79,725, of our common shares, respectively.  In September 2015, we purchased 16,340 of our common shares, at the closing prices for our common shares on the NYSE on the date of purchase, from certain of our officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of restricted common shares.  In addition, under our business management agreement we reimburse RMR LLC for our allocable costs of internal audit services. The amounts accrued for share grants to RMR LLC employees and internal audit costs were $776 and $973 for the three months ended September 30, 2015 and 2014, respectively, and $2,283 and $2,199 for the nine months ended September 30, 2015 and 2014, respectively, and these amounts are included in our general and administrative expenses in our condensed consolidated financial statements for these periods.

Lease with RMR LLC: We lease office space to RMR LLC in the office building component of our property in Baltimore, MD.  Pursuant to our lease agreement with RMR LLC, we recognized rental income from RMR LLC for leased office space of approximately $9 and $26 for the three and nine months ended September 30, 2015, respectively.

Sonesta:  Sonesta is owned by our Managing Trustees, Barry and Adam Portnoy.  As of September 30, 2015, Sonesta was managing 31 of our hotels pursuant to long term management agreements.  Pursuant to these management agreements, we incurred management, system, reservation fees and reimbursement of certain guest loyalty, marketing program and third party reservation transmission expenses payable to Sonesta of $5,742 and $4,722 for the three months ended September 30, 2015 and 2014, respectively, and $16,143 and $13,052 for the nine months ended September 30, 2015 and 2014, respectively.  These amounts are included in hotel operating expenses in our condensed consolidated statements of comprehensive income.  In addition, we also incurred procurement and construction supervision fees payable to Sonesta in connection with capital expenditures at our hotels managed by Sonesta of $496 and $1,053 for the three months ended September 30, 2015 and 2014, respectively, and $1,172 and $2,803 for the nine months ended September 30, 2015 and 2014, respectively.  These amounts have been capitalized in our condensed consolidated financial statements. 

On April 28, 2015, we acquired a building and land parcel adjacent to a hotel we own which is managed by Sonesta for $750, excluding acquisition related costs.  This land was added to that hotel property and constitutes invested capital under our Sonesta agreement.

On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for $85,000, excluding acquisition related costs.  In connection with this acquisition, we entered into a long term management agreement for Sonesta to manage these hotels.  The terms of the management agreement are substantially consistent with the terms of our other management agreements with Sonesta for extended stay hotels, and this management agreement was combined with our other Sonesta hotel management agreements under our existing pooling agreement with Sonesta.  We expect to invest approximately $45,000 to substantially renovate these hotels in connection with their conversion to the upscale, extended stay Sonesta ES Suites® hotel brand.

On October 27, 2015, we entered into an agreement to acquire two extended stay hotels with 262 suites located in Cleveland and Westlake, OH for $12,000.  We intend to rebrand these hotels as Sonesta ES Suites® hotels.  This acquisition is subject to completion of diligence and other customary closing conditions and we can provide no assurance that we will acquire these properties or that the terms of the acquisition will not change.  We expect to enter into a hotel management agreement with Sonesta for these properties on terms consistent with our other applicable hotel management agreements with Sonesta for limited service hotels and to add the management agreement to our Sonesta agreement.

AIC:  As of September 30, 2015, our investment in AIC had a carrying value of $6,814, which amount is included in other assets on our condensed consolidated balance sheets.  We recognized income (loss) of ($24) and $38 related to our investment in AIC for the three months ended September 30, 2015 and 2014, respectively, and $71 and $66 for the nine months ended September 30, 2015 and 2014, respectively.  Our other comprehensive income includes unrealized gains (losses) on securities held for sale which are owned by AIC of ($72) and ($33) for the three months ended September 30, 2015 and 2014, respectively, and ($91) and $8 for the nine months ended September 30, 2015 and 2014, respectively.

In June 2015, we and the other shareholders of AIC renewed our participation in an insurance program arranged by AIC.  In connection with that renewal, we purchased a three-year combined property insurance policy providing $500,000 of coverage annually with the premium to be paid annually and a one year combined policy providing terrorism coverage of $200,000 for our properties.  We paid AIC an aggregate annual premium, including taxes and fees, of approximately $2,442 in connection with these policies for the policy year ending June 30, 2016, which amount may be adjusted from time to time as we acquire and dispose of properties that are included in this insurance program. 

Directors’ and Officers’ Liability Insurance

In August 2015, we extended through September 2017 our combined directors' and officers' insurance policy with RMR LLC and five other companies managed by RMR LLC that provides $10,000 in aggregate primary coverage.  At that time, we also extended through September 2016 our separate additional directors' and officers' liability insurance policies that provide $20,000 of aggregate excess coverage plus $5,000 of excess non-indemnifiable coverage.  The total premium payable by us for these extensions was approximately $463.

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Related Person Transactions - Up-C Transaction (Details) $ in Thousands			6 Months Ended	9 Months Ended
	Jun. 05, 2015 USD ($) shares	Jun. 04, 2015 shares	Sep. 30, 2015 Vote	Sep. 30, 2015
Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	5,019,121
Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent	16.20%
Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid | $	$ 12,622
Equity conversion ratio of RMR Inc. class B-1 common stock			1
Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,490,000
Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	5,019,121
Number of votes per equity interest | Vote			1
Up C Transaction | Class B1 common shares | RMR Inc
Related Party Transaction [Line Items]
Number of votes per equity interest | Vote			10
Up C Transaction | Class B2 common shares | RMR Inc
Related Party Transaction [Line Items]
Number of votes per equity interest | Vote			10
RMR Trust | Up C Transaction
Related Party Transaction [Line Items]
Equity conversion ratio of RMR LLC class A membership units			1
Indirect economic interest in RMR LLC as a percent	51.60%
Voting power of outstanding capital stock of RMR Inc	91.40%
RMR Trust | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid | $	$ 11,520
RMR Trust | Up C Transaction | Managing Trustees Barry And Adam Portnoy Member
Related Party Transaction [Line Items]
Period over which shares remain under lock up and registration agreement				10 years
RMR Trust | Up C Transaction | Class A common shares
Related Party Transaction [Line Items]
Business acquisition related party equity interests delivered		30,000,000
RMR Trust | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Business acquisition related party equity interests delivered	15,000,000
RMR Trust | Up C Transaction | Class B1 common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,000,000
RMR Trust | Up C Transaction | Class B2 common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	15,000,000
RMR Trust | Up C Transaction | Class B member units | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,000,000
GOV | Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent	5.00%
GOV | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid | $	$ 3,917
GOV | Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	700,000
GOV | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	1,541,201
SNH | Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent	17.00%
SNH | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid | $	$ 13,967
SNH | Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	2,345,000
SNH | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	5,272,787
SIR | Up C Transaction
Related Party Transaction [Line Items]
Indirect economic interest in RMR LLC as a percent	10.20%
SIR | Up C Transaction | RMR Inc
Related Party Transaction [Line Items]
Aggregate consideration paid | $	$ 15,880
SIR | Up C Transaction | Common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	880,000
SIR | Up C Transaction | Class A common shares | RMR Inc
Related Party Transaction [Line Items]
Shares issued in connection with acquisition	3,166,891

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2015

Segment Information

Schedule of segment information

	For the Three Months Ended September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	437,171	$	-	$	-	$	437,171
Rental income		8,199		65,548		-		73,747
FF&E reserve income		968		-		-		968
Total revenues		446,338		65,548		-		511,886
Hotel operating expenses		308,603		-		-		308,603
Depreciation and amortization		54,100		30,161		-		84,261
General and administrative		-		-		19,831		19,831
Acquisition related costs		851		-		-		851
Total expenses		363,554		30,161		19,831		413,546
Operating income (loss)		82,784		35,387		(19,831)		98,340
Interest income		-		-		11		11
Interest expense		-		-		(36,628)		(36,628)
Income (loss) before income taxes and equity in losses of an investee		82,784		35,387		(56,448)		61,723
Income tax expense		-		-		(514)		(514)
Equity in losses of an investee		-		-		(24)		(24)
Net income (loss)	$	82,784	$	35,387	$	(56,986)	$	61,185
	For the Nine Months Ended September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	1,243,744	$	-	$	-	$	1,243,744
Rental income		24,339		183,222		-		207,561
FF&E reserve income		3,159		-		-		3,159
Total revenues		1,271,242		183,222		-		1,454,464
Hotel operating expenses		870,689		-		-		870,689
Depreciation and amortization		159,421		84,391		-		243,812
General and administrative		-		-		53,820		53,820
Acquisition related costs		1,986		-		-		1,986
Total expenses		1,032,096		84,391		53,820		1,170,307
Operating income (loss)		239,146		98,831		(53,820)		284,157
Interest income		-		-		32		32
Interest expense		-		-		(107,918)		(107,918)
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate		239,146		98,831		(161,706)		176,271
Income tax expense		-		-		(1,445)		(1,445)
Equity in earnings of an investee		-		-		71		71
Income (loss) before gain on sale of real estate		239,146		98,831		(163,080)		174,897
Gain on sale of real estate		-		11,015		-		11,015
Net income (loss)	$	239,146	$	109,846	$	(163,080)	$	185,912
	As of September 30, 2015
	Hotels		Travel Centers		Corporate		Consolidated
Total assets	$	3,903,957	$	2,425,709	$	164,884	$	6,494,550

	For the Three Months Ended September 30, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	394,973	$	-	$	-	$	394,973
Rental income		8,088		55,749		-		63,837
FF&E reserve income		829		-		-		829
Total revenues		403,890		55,749		-		459,639
Hotel operating expenses		279,560		-		-		279,560
Depreciation and amortization		54,024		25,625		-		79,649
General and administrative		-		-		16,798		16,798
Acquisition related costs		14		-		-		14
Total expenses		333,598		25,625		16,798		376,021
Operating income (loss)		70,292		30,124		(16,798)		83,618
Interest income		-		-		13		13
Interest expense		-		-		(34,304)		(34,304)
Loss on early extinguishment of debt						(129)		(129)
Income (loss) before income taxes and equity in earnings of an investee		70,292		30,124		(51,218)		49,198
Income tax expense		-		-		(39)		(39)
Equity in earnings of an investee		-		-		38		38
Net income (loss)	$	70,292	$	30,124	$	(51,219)	$	49,197
	For the Nine Months Ended September 30, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Hotel operating revenues	$	1,112,157	$	-	$	-	$	1,112,157
Rental income		24,532		166,427		-		190,959
FF&E reserve income		2,673		-		-		2,673
Total revenues		1,139,362		166,427		-		1,305,789
Hotel operating expenses		780,955		-		-		780,955
Depreciation and amortization		160,402		76,297		-		236,699
General and administrative		-		-		41,429		41,429
Acquisition related costs		237		-		-		237
Total expenses		941,594		76,297		41,429		1,059,320
Operating income (loss)		197,768		90,130		(41,429)		246,469
Interest income		-		-		63		63
Interest expense		-		-		(104,101)		(104,101)
Loss on early extinguishment of debt		-		-		(855)		(855)
Income (loss) before income taxes, equity in earnings of an investee and gain on sale of real estate		197,768		90,130		(146,322)		141,576
Income tax expense		-		-		(1,110)		(1,110)
Equity in earnings of an investee		-		-		66		66
Income (loss) before gain on sale of real estate		197,768		90,130		(147,366)		140,532
Gain on sale of real estate		130		-		-		130
Net income (loss)	$	197,898	$	90,130	$	(147,366)	$	140,662
	As of December 31, 2014
	Hotels		Travel Centers		Corporate		Consolidated
Total assets	$	3,748,062	$	2,194,682	$	39,818	$	5,982,562

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Revenue Recognition (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) item	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Revenue Recognition
Number of operating leases for which rental income is not recognized on straight line basis over the term of the lease agreements | item				1
Adjustments necessary to record rent on straight line basis	$ 3,752		$ 553	$ 5,807	$ 1,659
Due from related persons	25,474			25,474		$ 20,493
Straight line rent receivables	1,728			1,728		$ 1,373
Deferred percentage rent	$ 0		$ 557	$ 0	$ 2,129
Percentage rent		$ 2,048

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Fair Value of Assets and Liabilities (Details) $ in Thousands	Sep. 30, 2015 USD ($) shares
Travel Centers of America LLC
Fair Value of Assets and Liabilities
Shares included in investment securities | shares	3,420,000
Quoted Prices in Active Markets for Identical Assets (Level 1) | Travel Centers of America LLC
Fair Value of Assets and Liabilities
Shares included in investment securities | shares	3,420,000
Historical cost of securities	$ 17,407
Recurring
Fair Value of Assets and Liabilities
Investment securities	35,329
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value of Assets and Liabilities
Investment securities	$ 35,329

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Interest expense, amortization of deferred financing costs and debt discounts	$ 1,458	$ 1,361	$ 4,374	$ 4,034

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Per Common Share Amounts

9 Months Ended

Sep. 30, 2015

Per Common Share Amounts

Per Common Share Amounts

Note 4.  Per Common Share Amounts

We calculate basic earnings per common share by dividing net income available for common shareholders by the weighted average number of common shares outstanding during the period.  We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method.  Unvested share awards and other potentially dilutive common shares, including contingently issuable common shares under the previous terms of our business management agreement with The RMR Group LLC (formerly known as Reit Management & Research LLC), or RMR LLC, if any, and the related impact on earnings, are considered when calculating diluted earnings per share. The following table provides a reconciliation of the weighted average number of common shares used in the calculation of basic and diluted earnings per share:

	For the three months ended September 30,		For the nine months ended September 30,
	2015	2014	2015	2014
	(in thousands)
Weighted average common shares for basic earnings per share	151,359	149,665	150,476	149,616
Effect of dilutive securities:
Contingently issuable common shares	-	316	360	189
Unvested share awards	27	26	27	29
Weighted average common shares for diluted earnings per share	151,386	150,007	150,863	149,834

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Per Common Share Amounts (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Weighted average common shares outstanding (basic)	151,359	149,665	150,476	149,616
Weighted average common shares outstanding (diluted)	151,386	150,007	150,863	149,834
Contingently Issuable Common Shares
Weighted Average Number Diluted Shares Outstanding Adjustment		316	360	189
Unvested Share Awards
Weighted Average Number Diluted Shares Outstanding Adjustment	27	26	27	29

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Related Person Transactions - REITs, for which RMR LLC provides Management Services (Details) $ in Thousands				1 Months Ended			3 Months Ended		6 Months Ended	9 Months Ended
	Oct. 27, 2015 USD ($) room property	Jul. 23, 2015 USD ($) state room property	Jun. 01, 2015 property	Aug. 31, 2015 USD ($) company	Jul. 31, 2015 item	Jun. 30, 2015 USD ($)	Sep. 30, 2015 USD ($) property	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) property	Sep. 30, 2015 USD ($) property	Sep. 30, 2014 USD ($)	Oct. 31, 2015 USD ($)	Apr. 28, 2015 USD ($)
Related Party Transaction [Line Items]
Rental income							$ 73,747	$ 63,837		$ 207,561	$ 190,959
Real Estate Aggregate Purchase Price							477,883		$ 477,883	477,883
Purchase price excluding closing cost							477,883		$ 477,883	477,883
Earnings (losses) recognized related to equity investments							$ (24)	38		$ 71	66
Sonesta ES Suites
Related Party Transaction [Line Items]
Amount expected to be provided for renovation for acquisitions made		$ 45,000
Sonesta agreements
Related Party Transaction [Line Items]
Number of real estate properties leased or managed | property							31		31	31
Management agreement fees and expenses							$ 5,742	4,722		$ 16,143	13,052
Procurement and construction supervision fees							496	1,053		1,172	2,803
Real Estate Aggregate Purchase Price													$ 750
Purchase price excluding closing cost													$ 750
Amount expected to be provided for renovation for acquisitions made										45,000
Hotels | Sonesta ES Suites
Related Party Transaction [Line Items]
Real Estate Aggregate Purchase Price		$ 85,000
Number of properties acquired | property		9
Number of hotel suites | room		1,095
Number of states hotels to be acquired located | state		8
Purchase price excluding closing cost		$ 85,000
Hotels | Sonesta ES Suites | Subsequent event
Related Party Transaction [Line Items]
Real Estate Aggregate Purchase Price	$ 12,000
Number of hotel suites | room	262
Purchase price excluding closing cost	$ 12,000
Number of hotels to be acquired | property	2
Hotels | Sonesta agreements
Related Party Transaction [Line Items]
Number of properties acquired | item					9
Travel Centers of America LLC
Related Party Transaction [Line Items]
Rental income							65,548	55,749		181,174	166,427
Real Estate Aggregate Purchase Price							279,383		$ 279,383	279,383
Number of properties acquired | property									14
Purchase price excluding closing cost							279,383		$ 279,383	279,383
Travel Centers of America LLC | Subsequent event
Related Party Transaction [Line Items]
Real Estate Aggregate Purchase Price												$ 15,000
Purchase price excluding closing cost												$ 15,000
Travel Centers of America LLC | Travel centers
Related Party Transaction [Line Items]
Number of properties acquired | property			5
RMR LLC
Related Party Transaction [Line Items]
Rental income							9			26
Number of entities to whom RMR provides management services | company				5
Aggregate coverage of combined directors' and officers' liability insurance policy purchased by the related party				$ 10,000
Aggregate additional coverage of combined directors' and officers' liability insurance policy purchased by the related party				20,000
Non-indemnifiable coverage of combined directors' and officers' liability insurance policy purchased by the related party				5,000
Premium paid for combined directors' and officers' liability insurance policy				$ 463
AIC
Related Party Transaction [Line Items]
Equity method investments, carrying value							6,814		$ 6,814	6,814
Earnings (losses) recognized related to equity investments							(24)	38		71	66
Equity in unrealized (loss) gain of an investee							$ (72)	$ (33)		$ (91)	$ 8
Combined property insurance policy term						3 years
Coverage of property insurance						$ 500,000
Terrorism property insurance term						1 year
Terrorism coverage of property insurance						$ 200,000
Property insurance premium						$ 2,442

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Real Estate Properties (Tables)

9 Months Ended

Sep. 30, 2015

Real Estate Properties

Schedule of allocation of the acquisition cost to the estimated fair value of assets acquired

Acquisition date	Location		Purchase price (1)		Land		Land improvements		Building and improvements		Furniture, fixtures and equipment		Intangible assets
3/16/2015	Rosemont, IL (2) (4)	$	35,500	$	2,375	$	-	$	31,401	$	1,463	$	261
4/28/2015	Ft. Lauderdale, FL (3) (5)		750		750		-		-		-		-
5/15/2015	Denver, CO (2) (6)		77,250		8,193		-		61,185		7,872		-
6/1/2015	Various (3) (7)		227,877		26,286		67,160		134,389		42		-
7/23/2015	Various (2) (8)		85,000		13,165		-		64,338		7,497		-
9/23/2015	Various (3) (7)		51,506		9,165		21,266		21,075		-		-
		$	477,883	$	59,934	$	88,426	$	312,388	$	16,874	$	261

(1) Excludes acquisition related costs.

(2) We accounted for these transactions as business combinations.  The pro forma impact of including the results of operations of these acquisitions from the beginning of the year is not material to our condensed consolidated financial statements.

(3) We accounted for these transactions as asset acquisitions.

(4) On March 16, 2015, we acquired a 300 room hotel located in Rosemont, IL for $35,500, excluding acquisition related costs.  We added this Holiday Inn and Suites® branded hotel to our management agreement with InterContinental Hotels Group, plc, or InterContinental.  See Note 11 for further information regarding our InterContinental agreement. 

(5) On April 28, 2015, we acquired a land parcel adjacent to one of our hotels in Fort Lauderdale, FL for $750, excluding acquisition related costs. See Note 10 for further information regarding this acquisition.

(6) On May 15, 2015, we acquired a 364 room full service hotel located in Denver, CO for $77,250, excluding acquisition related costs.  We added this Crowne Plaza® branded hotel to our management agreement with InterContinental.  See Note 11 for further information regarding our InterContinental agreement.

(7) On June 1, 2015, we entered agreements with TA to acquire and leaseback 14 travel centers it owned and certain assets it owned at11 properties we lease to TA for an aggregate purchase price of approximately $279,383.  During June 2015, we acquired 12 of these travel centers and certain assets at10 properties TA leases from us for an aggregate purchase price of $227,877.  On September 23, 2015, we acquired the remaining two travel centers and certain assets at a property TA leases from us for an aggregate purchase price of $51,506.  Pursuant to these agreements, we also agreed to acquire from, and leaseback to, TA five travel centers it is developing for purchase prices equal to TA’s development costs, which are estimated to be approximately $118,000.  The acquisition of these five travel centers is expected to occur as development of these travel centers is completed before June 30, 2017.  See Note 10 for further information regarding this transaction and our TA agreements. 

(8) On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for $85,000, excluding acquisition related costs.  We converted these hotels to Sonesta ES Suites® branded hotels and added them to our management agreement with Sonesta International Hotels Corporation, or Sonesta.  See Note 10 for further information regarding this transaction and our Sonesta agreement.