|
|
|
|
|
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)
|
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Page
|
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|
March 31,
|
|
December 31,
|
||||
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
|
||||
|
|
|
|
|
||||
Real estate properties:
|
|
|
|
|
||||
Land
|
|
$
|
1,604,366
|
|
|
$
|
1,566,630
|
|
Buildings, improvements and equipment
|
|
7,307,972
|
|
|
7,156,759
|
|
||
Total real estate properties, gross
|
|
8,912,338
|
|
|
8,723,389
|
|
||
Accumulated depreciation
|
|
(2,590,844
|
)
|
|
(2,513,996
|
)
|
||
Total real estate properties, net
|
|
6,321,494
|
|
|
6,209,393
|
|
||
Cash and cash equivalents
|
|
23,772
|
|
|
10,896
|
|
||
Restricted cash (FF&E reserve escrow)
|
|
56,713
|
|
|
60,456
|
|
||
Due from related persons
|
|
68,920
|
|
|
65,332
|
|
||
Other assets, net
|
|
318,535
|
|
|
288,151
|
|
||
Total assets
|
|
$
|
6,789,434
|
|
|
$
|
6,634,228
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
|
|
|
|
|
||||
Unsecured revolving credit facility
|
|
$
|
130,000
|
|
|
$
|
191,000
|
|
Unsecured term loan, net
|
|
398,587
|
|
|
398,421
|
|
||
Senior unsecured notes, net
|
|
3,160,757
|
|
|
2,565,908
|
|
||
Convertible senior unsecured notes
|
|
47
|
|
|
8,478
|
|
||
Security deposits
|
|
100,640
|
|
|
89,338
|
|
||
Accounts payable and other liabilities
|
|
162,137
|
|
|
188,053
|
|
||
Due to related persons
|
|
24,180
|
|
|
58,475
|
|
||
Dividends payable
|
|
—
|
|
|
5,166
|
|
||
Total liabilities
|
|
3,976,348
|
|
|
3,504,839
|
|
||
|
|
|
|
|
||||
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; zero and 11,600,000 shares issued and outstanding, respectively, aggregate liquidation preference of zero and $290,000, respectively
|
|
—
|
|
|
280,107
|
|
||
Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 164,268,199 shares issued and outstanding
|
|
1,643
|
|
|
1,643
|
|
||
Additional paid in capital
|
|
4,539,673
|
|
|
4,539,673
|
|
||
Cumulative net income
|
|
3,132,044
|
|
|
3,104,767
|
|
||
Cumulative other comprehensive income
|
|
61,322
|
|
|
39,583
|
|
||
Cumulative preferred distributions
|
|
(343,412
|
)
|
|
(341,977
|
)
|
||
Cumulative common distributions
|
|
(4,578,184
|
)
|
|
(4,494,407
|
)
|
||
Total shareholders’ equity
|
|
2,813,086
|
|
|
3,129,389
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
6,789,434
|
|
|
$
|
6,634,228
|
|
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2017
|
|
2016
|
|
||||
Revenues:
|
|
|
|
|
|
||||
Hotel operating revenues
|
|
$
|
407,587
|
|
|
$
|
396,503
|
|
|
Rental income
|
|
79,788
|
|
|
76,259
|
|
|
||
FF&E reserve income
|
|
1,227
|
|
|
1,356
|
|
|
||
Total revenues
|
|
488,602
|
|
|
474,118
|
|
|
||
|
|
|
|
|
|
||||
Expenses:
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
282,723
|
|
|
276,305
|
|
|
||
Depreciation and amortization
|
|
93,451
|
|
|
87,271
|
|
|
||
General and administrative
|
|
32,346
|
|
|
16,023
|
|
|
||
Acquisition related costs
|
|
—
|
|
|
612
|
|
|
||
Total expenses
|
|
408,520
|
|
|
380,211
|
|
|
||
|
|
|
|
|
|
||||
Operating income
|
|
80,082
|
|
|
93,907
|
|
|
||
|
|
|
|
|
|
||||
Dividend income
|
|
626
|
|
|
—
|
|
|
||
Interest income
|
|
257
|
|
|
98
|
|
|
||
Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $2,152 and $1,865, respectively)
|
|
(43,566
|
)
|
|
(41,586
|
)
|
|
||
Loss on early extinguishment of debt
|
|
—
|
|
|
(70
|
)
|
|
||
Income before income taxes and equity in earnings of an investee
|
|
37,399
|
|
|
52,349
|
|
|
||
Income tax expense
|
|
(356
|
)
|
|
(375
|
)
|
|
||
Equity in earnings of an investee
|
|
128
|
|
|
77
|
|
|
||
Net income
|
|
37,171
|
|
|
52,051
|
|
|
||
Unrealized gain on investment securities
|
|
21,618
|
|
|
17,545
|
|
|
||
Equity interest in investee’s unrealized gains
|
|
121
|
|
|
52
|
|
|
||
Other comprehensive income
|
|
21,739
|
|
|
17,597
|
|
|
||
Comprehensive income
|
|
$
|
58,910
|
|
|
$
|
69,648
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
$
|
37,171
|
|
|
$
|
52,051
|
|
|
Preferred distributions
|
|
(1,435
|
)
|
|
(5,166
|
)
|
|
||
Excess of liquidation preference over carrying value of preferred shares redeemed
|
|
(9,893
|
)
|
|
—
|
|
|
||
Net income available for common shareholders
|
|
$
|
25,843
|
|
|
$
|
46,885
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding (basic)
|
|
164,120
|
|
|
151,402
|
|
|
||
Weighted average common shares outstanding (diluted)
|
|
164,149
|
|
|
151,415
|
|
|
||
|
|
|
|
|
|
||||
Net income available for common shareholders per common share (basic and diluted)
|
|
$
|
0.16
|
|
|
$
|
0.31
|
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|||
Net income
|
|
$
|
37,171
|
|
|
$
|
52,051
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
93,451
|
|
|
87,271
|
|
||
Amortization of debt issuance costs and debt discounts and premiums as interest
|
|
2,152
|
|
|
1,865
|
|
||
Straight line rental income
|
|
(3,008
|
)
|
|
(3,752
|
)
|
||
Security deposits received or replenished (applied), net
|
|
11,302
|
|
|
10,252
|
|
||
FF&E reserve income and deposits
|
|
(17,618
|
)
|
|
(17,746
|
)
|
||
Loss on early extinguishment of debt
|
|
—
|
|
|
70
|
|
||
Equity in earnings of an investee
|
|
(128
|
)
|
|
(77
|
)
|
||
Other non-cash (income) expense, net
|
|
(979
|
)
|
|
(1,142
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Due from related persons
|
|
(676
|
)
|
|
(886
|
)
|
||
Other assets
|
|
(9,536
|
)
|
|
(6,174
|
)
|
||
Accounts payable and other liabilities
|
|
(20,703
|
)
|
|
(26,819
|
)
|
||
Due to related persons
|
|
(33,573
|
)
|
|
(56,522
|
)
|
||
Net cash provided by operating activities
|
|
57,855
|
|
|
38,391
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Real estate acquisitions and deposits
|
|
(153,749
|
)
|
|
(143,683
|
)
|
||
Real estate improvements
|
|
(32,731
|
)
|
|
(32,716
|
)
|
||
FF&E reserve escrow fundings
|
|
(1,990
|
)
|
|
(441
|
)
|
||
Net cash used in investing activities
|
|
(188,470
|
)
|
|
(176,840
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|||
Proceeds from issuance of senior unsecured notes, after discounts and premiums
|
|
598,246
|
|
|
737,612
|
|
||
Repayment of senior unsecured notes
|
|
—
|
|
|
(275,000
|
)
|
||
Redemption of preferred shares
|
|
(290,000
|
)
|
|
—
|
|
||
Repurchase of convertible senior notes
|
|
(8,431
|
)
|
|
—
|
|
||
Borrowings under unsecured revolving credit facility
|
|
130,000
|
|
|
275,000
|
|
||
Repayments of unsecured revolving credit facility
|
|
(191,000
|
)
|
|
(510,000
|
)
|
||
Payment of debt issuance costs
|
|
(4,946
|
)
|
|
(6,089
|
)
|
||
Distributions to preferred shareholders
|
|
(6,601
|
)
|
|
(5,166
|
)
|
||
Distributions to common shareholders
|
|
(83,777
|
)
|
|
(75,774
|
)
|
||
Net cash provided by financing activities
|
|
143,491
|
|
|
140,583
|
|
||
Increase in cash and cash equivalents
|
|
12,876
|
|
|
2,134
|
|
||
Cash and cash equivalents at beginning of period
|
|
10,896
|
|
|
13,682
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
23,772
|
|
|
$
|
15,816
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
|
|||
Cash paid for interest
|
|
$
|
60,896
|
|
|
$
|
56,278
|
|
Cash paid for income taxes
|
|
158
|
|
|
227
|
|
||
Non-cash investing activities:
|
|
|
|
|
|
|
||
Hotel managers’ deposits in FF&E reserve
|
|
$
|
15,602
|
|
|
$
|
15,542
|
|
Hotel managers’ purchases with FF&E reserve
|
|
(21,335
|
)
|
|
(11,303
|
)
|
|
|
For the Three Months Ended March 31,
|
||||
|
|
2017
|
|
2016
|
||
|
|
(in thousands)
|
||||
Weighted average common shares for basic earnings per share
|
|
164,120
|
|
|
151,402
|
|
Effect of dilutive share awards: Unvested share awards
|
|
29
|
|
|
13
|
|
Weighted average common shares for diluted earnings per share
|
|
164,149
|
|
|
151,415
|
|
Acquisition Date
|
|
Location
|
|
Purchase Price
|
|
Land
|
|
Land Improvements
|
|
Building and Improvements
|
|
Furniture, Fixtures and Equipment
|
|
Intangible Assets
|
||||||||||||
2/1/2017
|
|
Chicago, IL
(1)
|
|
$
|
86,201
|
|
|
$
|
13,609
|
|
|
$
|
40
|
|
|
$
|
58,929
|
|
|
$
|
11,926
|
|
|
$
|
1,697
|
|
3/31/2017
|
|
Seattle, WA
(2)
|
|
71,748
|
|
|
24,127
|
|
|
30
|
|
|
46,306
|
|
|
844
|
|
|
441
|
|
||||||
|
|
|
|
$
|
157,949
|
|
|
$
|
37,736
|
|
|
$
|
70
|
|
|
$
|
105,235
|
|
|
$
|
12,770
|
|
|
$
|
2,138
|
|
(1)
|
On February 1, 2017, we acquired the
483
room Hotel Allegro in Chicago, IL for a purchase price of
$86,201
, including capitalized acquisition costs of
$707
. We added this Kimpton® branded hotel to our management agreement with InterContinental Hotels Group, plc, or InterContinental. See Note 8 for further information regarding our InterContinental agreement.
|
(2)
|
On March 31, 2017, we acquired the
121
room Hotel Alexis in Seattle, WA for a purchase price of
$71,748
including capitalized acquisition costs of
$123
. We added this Kimpton® branded hotel to our management agreement with InterContinental. See Note 8 for further information regarding our InterContinental agreement.
|
|
|
For the Three Months Ended March 31, 2017
|
||||||||||||||
|
|
Hotels
|
|
Travel Centers
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues
|
|
$
|
407,587
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
407,587
|
|
Rental income
|
|
8,262
|
|
|
71,526
|
|
|
—
|
|
|
79,788
|
|
||||
FF&E reserve income
|
|
1,227
|
|
|
—
|
|
|
—
|
|
|
1,227
|
|
||||
Total revenues
|
|
417,076
|
|
|
71,526
|
|
|
—
|
|
|
488,602
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
282,723
|
|
|
—
|
|
|
—
|
|
|
282,723
|
|
||||
Depreciation and amortization
|
|
58,104
|
|
|
35,347
|
|
|
—
|
|
|
93,451
|
|
||||
General and administrative
|
|
—
|
|
|
—
|
|
|
32,346
|
|
|
32,346
|
|
||||
Total expenses
|
|
340,827
|
|
|
35,347
|
|
|
32,346
|
|
|
408,520
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
76,249
|
|
|
36,179
|
|
|
(32,346
|
)
|
|
80,082
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Dividend income
|
|
—
|
|
|
—
|
|
|
626
|
|
|
626
|
|
||||
Interest income
|
|
—
|
|
|
—
|
|
|
257
|
|
|
257
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(43,566
|
)
|
|
(43,566
|
)
|
||||
Income (loss) before income taxes and equity in earnings of an investee
|
|
76,249
|
|
|
36,179
|
|
|
(75,029
|
)
|
|
37,399
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(356
|
)
|
|
(356
|
)
|
||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
128
|
|
|
128
|
|
||||
Net income (loss)
|
|
$
|
76,249
|
|
|
$
|
36,179
|
|
|
$
|
(75,257
|
)
|
|
$
|
37,171
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of March 31, 2017
|
||||||||||||||
|
|
Hotels
|
|
Travel Centers
|
|
Corporate
|
|
Consolidated
|
||||||||
Total assets
|
|
$
|
4,133,029
|
|
|
$
|
2,476,994
|
|
|
$
|
179,411
|
|
|
$
|
6,789,434
|
|
|
|
For the Three Months Ended March 31, 2016
|
||||||||||||||
|
|
Hotels
|
|
Travel Centers
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Hotel operating revenues
|
|
$
|
396,503
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
396,503
|
|
Rental income
|
|
8,142
|
|
|
68,117
|
|
|
—
|
|
|
76,259
|
|
||||
FF&E reserve income
|
|
1,356
|
|
|
—
|
|
|
—
|
|
|
1,356
|
|
||||
Total revenues
|
|
406,001
|
|
|
68,117
|
|
|
—
|
|
|
474,118
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating expenses
|
|
276,305
|
|
|
—
|
|
|
—
|
|
|
276,305
|
|
||||
Depreciation and amortization
|
|
55,084
|
|
|
32,187
|
|
|
—
|
|
|
87,271
|
|
||||
General and administrative
|
|
—
|
|
|
—
|
|
|
16,023
|
|
|
16,023
|
|
||||
Acquisition related costs
|
|
612
|
|
|
—
|
|
|
—
|
|
|
612
|
|
||||
Total expenses
|
|
332,001
|
|
|
32,187
|
|
|
16,023
|
|
|
380,211
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
74,000
|
|
|
35,930
|
|
|
(16,023
|
)
|
|
93,907
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
—
|
|
|
—
|
|
|
98
|
|
|
98
|
|
||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(41,586
|
)
|
|
(41,586
|
)
|
||||
Loss on early extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(70
|
)
|
||||
Income (loss) before income taxes and equity in losses of an investee
|
|
74,000
|
|
|
35,930
|
|
|
(57,581
|
)
|
|
52,349
|
|
||||
Income tax expense
|
|
—
|
|
|
—
|
|
|
(375
|
)
|
|
(375
|
)
|
||||
Equity in earnings of an investee
|
|
—
|
|
|
—
|
|
|
77
|
|
|
77
|
|
||||
Net income (loss)
|
|
$
|
74,000
|
|
|
$
|
35,930
|
|
|
$
|
(57,879
|
)
|
|
$
|
52,051
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Hotels
|
|
Travel Centers
|
|
Corporate
|
|
Consolidated
|
||||||||
Total assets
|
|
$
|
4,005,481
|
|
|
$
|
2,483,718
|
|
|
$
|
145,029
|
|
|
$
|
6,634,228
|
|
|
|
|
|
|
Fair Value at March 31, 2017 Using
|
|||||||||||
|
|
|
|
Quoted Prices in
|
|
|
|
|
||||||||
|
|
|
|
Active Markets for
|
|
Significant Other
|
|
Significant
|
||||||||
|
|
Carrying Value at
|
|
Identical Assets
|
|
Observable Inputs
|
|
Unobservable Inputs
|
||||||||
Description
|
|
March 31, 2017
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Recurring Fair Value Measurement Assets:
|
|
|
|
|
|
|
||||||||||
Investment in TA
(1)
|
|
$
|
20,862
|
|
|
$
|
20,862
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment in RMR Inc.
(2)
|
|
$
|
123,937
|
|
|
$
|
123,937
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Our
3,420,000
common shares of TA, which are included in other assets 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 shares is
$17,407
as of
March 31, 2017
. The unrealized gain of
$3,455
for these shares as of
March 31, 2017
is included in cumulative other comprehensive income in our condensed consolidated balance sheets.
|
(2)
|
Our
2,503,777
shares of class A common stock of RMR Inc., which are included in other assets 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 shares is
$66,374
as of
March 31, 2017
. The unrealized gain of
$57,563
for these shares as of
March 31, 2017
is included in cumulative other comprehensive income in our condensed consolidated balance sheets.
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
|
|
Value
(1)
|
|
Value
|
|
Value
(1)
|
|
Value
|
||||||||
Senior Unsecured Notes, due 2018 at 6.70%
|
|
$
|
349,529
|
|
|
$
|
354,758
|
|
|
$
|
349,387
|
|
|
$
|
358,740
|
|
Senior Unsecured Notes, due 2021 at 4.25%
|
|
394,418
|
|
|
416,086
|
|
|
394,056
|
|
|
413,790
|
|
||||
Senior Unsecured Notes, due 2022 at 5.00%
|
|
493,490
|
|
|
532,308
|
|
|
493,187
|
|
|
527,945
|
|
||||
Senior Unsecured Notes, due 2023 at 4.50%
|
|
499,004
|
|
|
516,378
|
|
|
298,134
|
|
|
298,845
|
|
||||
Senior Unsecured Notes, due 2024 at 4.65%
|
|
347,180
|
|
|
359,217
|
|
|
347,079
|
|
|
348,523
|
|
||||
Senior Unsecured Notes, due 2025 at 4.50%
|
|
344,540
|
|
|
351,353
|
|
|
344,368
|
|
|
341,439
|
|
||||
Senior Unsecured Notes, due 2026 at 5.25%
|
|
339,979
|
|
|
366,930
|
|
|
339,697
|
|
|
354,772
|
|
||||
Senior Unsecured Notes, due 2027 at 4.95%
|
|
392,617
|
|
|
410,266
|
|
|
—
|
|
|
—
|
|
||||
Convertible Unsecured Senior Notes, due 2027 at 3.8%
|
|
47
|
|
|
47
|
|
|
8,478
|
|
|
8,599
|
|
||||
Total financial liabilities
|
|
$
|
3,160,804
|
|
|
$
|
3,307,343
|
|
|
$
|
2,574,386
|
|
|
$
|
2,652,653
|
|
(1)
|
Carrying value includes unamortized discounts and premiums and certain issuance costs.
|
|
|
For the Three Months Ended March 31,
|
|||||||||||||
|
|
|
|
|
|
Increase
|
|
% Increase
|
|||||||
|
|
2017
|
|
2016
|
|
(Decrease)
|
|
(Decrease)
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Hotel operating revenues
|
|
$
|
407,587
|
|
|
$
|
396,503
|
|
|
$
|
11,084
|
|
|
2.8
|
%
|
Rental income - hotels
|
|
8,262
|
|
|
8,142
|
|
|
120
|
|
|
1.5
|
%
|
|||
Rental income - travel centers
|
|
71,526
|
|
|
68,117
|
|
|
3,409
|
|
|
5.0
|
%
|
|||
Total rental income
|
|
79,788
|
|
|
76,259
|
|
|
3,529
|
|
|
4.6
|
%
|
|||
FF&E reserve income
|
|
1,227
|
|
|
1,356
|
|
|
(129
|
)
|
|
(9.5
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Hotel operating expenses
|
|
282,723
|
|
|
276,305
|
|
|
6,418
|
|
|
2.3
|
%
|
|||
Depreciation and amortization - hotels
|
|
58,104
|
|
|
55,084
|
|
|
3,020
|
|
|
5.5
|
%
|
|||
Depreciation and amortization - travel centers
|
|
35,347
|
|
|
32,187
|
|
|
3,160
|
|
|
9.8
|
%
|
|||
Total depreciation and amortization
|
|
93,451
|
|
|
87,271
|
|
|
6,180
|
|
|
7.1
|
%
|
|||
General and administrative
|
|
32,346
|
|
|
16,023
|
|
|
16,323
|
|
|
101.9
|
%
|
|||
Acquisition related costs
|
|
—
|
|
|
612
|
|
|
(612
|
)
|
|
(100.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
|
80,082
|
|
|
93,907
|
|
|
(13,825
|
)
|
|
(14.7
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Dividend income
|
|
626
|
|
|
—
|
|
|
626
|
|
|
n/m
|
|
|||
Interest income
|
|
257
|
|
|
98
|
|
|
159
|
|
|
162.2
|
%
|
|||
Interest expense
|
|
(43,566
|
)
|
|
(41,586
|
)
|
|
(1,980
|
)
|
|
4.8
|
%
|
|||
Loss on early extinguishment of debt
|
|
—
|
|
|
(70
|
)
|
|
70
|
|
|
(100.0
|
)%
|
|||
Income before income taxes and equity earnings of an investee
|
|
37,399
|
|
|
52,349
|
|
|
(14,950
|
)
|
|
(28.6
|
)%
|
|||
Income tax expense
|
|
(356
|
)
|
|
(375
|
)
|
|
19
|
|
|
(5.1
|
)%
|
|||
Equity in earnings of an investee
|
|
128
|
|
|
77
|
|
|
51
|
|
|
66.2
|
%
|
|||
Net income
|
|
37,171
|
|
|
52,051
|
|
|
(14,880
|
)
|
|
(28.6
|
)%
|
|||
Preferred distributions
|
|
(1,435
|
)
|
|
(5,166
|
)
|
|
3,731
|
|
|
(72.2
|
)%
|
|||
Excess of liquidation preference over carrying value of preferred shares redeemed
|
|
(9,893
|
)
|
|
—
|
|
|
(9,893
|
)
|
|
n/m
|
|
|||
Net income available for common shareholders
|
|
$
|
25,843
|
|
|
$
|
46,885
|
|
|
$
|
(21,042
|
)
|
|
(44.9
|
)%
|
|
|
|
|
|
|
—
|
|
|
|
||||||
Weighted average shares outstanding (basic)
|
|
164,120
|
|
|
151,402
|
|
|
12,718
|
|
|
8.4
|
%
|
|||
Weighted average shares outstanding (diluted)
|
|
164,149
|
|
|
151,415
|
|
|
12,734
|
|
|
8.4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Net income available for common shareholders per common share (basic and diluted)
|
|
$
|
0.16
|
|
|
$
|
0.31
|
|
|
$
|
(0.15
|
)
|
|
(48.4
|
)%
|
•
|
During the
three
months ended
March 31, 2017
, we funded
$1,990
for capital improvements to hotels under our Marriott No. 1 agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund
$2,110
for capital improvements under this agreement during the remainder of
2017
using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase.
|
•
|
We did not make any fundings for capital improvements to hotels under our InterContinental agreement during the
three
months ended
March 31, 2017
. We currently expect to fund
$6,243
for capital improvements under this agreement during the remainder of
2017
using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase.
|
•
|
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. During the
three
months ended
March 31, 2017
, we funded
$3,531
for capital improvements to hotels included in our Sonesta agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund
$17,409
for renovations and other capital improvements under this agreement during the remainder of
2017
and
$18,708
during 2018 using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual 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 are excess cash flows after payment of our minimum returns. No FF&E escrow deposits were required during the
three
months ended
March 31, 2017
. During the
three
months ended
March 31, 2017
, we funded
$4,313
for capital improvements to hotels included in our Wyndham agreement using cash on hand and borrowings under our revolving credit facility. We currently expect to fund
$6,787
for capital improvements under this agreement during the remainder of
2017
using cash on hand or borrowings under our revolving credit facility. As we fund these improvements, the annual minimum returns payable to us increase.
|
|
|
|
|
|
|
|
|
|
|
Rent / Return Coverage
(3)
|
||||||||||||
|
|
|
|
Number of
|
|
|
|
Annual
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||
Operating Agreement
|
|
Number of
|
|
Rooms /
|
|
|
|
Minimum
|
|
March 31,
|
|
March 31,
|
||||||||||
Reference Name
|
|
Properties
|
|
Suites
|
|
Investment
(1)
|
|
Return/Rent
(2)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Marriott (No. 1)
(4)
|
|
53
|
|
|
7,610
|
|
|
$
|
693,288
|
|
|
$
|
68,835
|
|
|
1.00x
|
|
1.16x
|
|
1.33x
|
|
1.35x
|
Marriott (No. 234)
(5)
|
|
68
|
|
|
9,120
|
|
|
1,001,389
|
|
|
106,360
|
|
|
1.01x
|
|
1.04x
|
|
1.13x
|
|
1.11x
|
||
Marriott (No. 5)
(6)
|
|
1
|
|
|
356
|
|
|
90,078
|
|
|
10,159
|
|
|
0.90x
|
|
0.92x
|
|
0.73x
|
|
0.63x
|
||
Subtotal / Average Marriott
|
|
122
|
|
|
17,086
|
|
|
1,784,755
|
|
|
185,354
|
|
|
1.00x
|
|
1.08x
|
|
1.18x
|
|
1.17x
|
||
InterContinental
(7)
|
|
96
|
|
|
15,007
|
|
|
1,853,323
|
|
|
174,393
|
|
|
0.99x
|
|
1.04x
|
|
1.20x
|
|
1.18x
|
||
Sonesta
(8)
|
|
34
|
|
|
6,329
|
|
|
1,200,328
|
|
|
90,227
|
|
|
0.47x
|
|
0.44x
|
|
0.70x
|
|
0.69x
|
||
Wyndham
(9)
|
|
22
|
|
|
3,579
|
|
|
391,071
|
|
|
28,749
|
|
|
0.30x
|
|
0.38x
|
|
0.88x
|
|
0.89x
|
||
Hyatt
(10)
|
|
22
|
|
|
2,724
|
|
|
301,942
|
|
|
22,037
|
|
|
1.10x
|
|
1.14x
|
|
1.15x
|
|
1.16x
|
||
Carlson
(11)
|
|
11
|
|
|
2,090
|
|
|
209,895
|
|
|
12,920
|
|
|
1.21x
|
|
1.04x
|
|
1.33x
|
|
1.23x
|
||
Morgans
(12)
|
|
1
|
|
|
372
|
|
|
120,000
|
|
|
7,595
|
|
|
1.34x
|
|
1.16x
|
|
1.05x
|
|
1.18x
|
||
Subtotal / Average Hotels
|
|
308
|
|
|
47,187
|
|
|
5,861,314
|
|
|
521,275
|
|
|
0.88x
|
|
0.92x
|
|
1.09x
|
|
1.08x
|
||
TA (No. 1)
(13)
|
|
40
|
|
|
N/A
|
|
|
667,152
|
|
|
51,922
|
|
|
1.26x
|
|
1.42x
|
|
1.60x
|
|
1.65x
|
||
TA (No. 2)
(14)
|
|
40
|
|
|
N/A
|
|
|
668,018
|
|
|
52,573
|
|
|
1.20x
|
|
1.27x
|
|
1.50x
|
|
1.56x
|
||
TA (No. 3)
(15)
|
|
39
|
|
|
N/A
|
|
|
624,476
|
|
|
53,026
|
|
|
1.17x
|
|
1.34x
|
|
1.52x
|
|
1.59x
|
||
TA (No. 4)
(16)
|
|
39
|
|
|
N/A
|
|
|
572,449
|
|
|
50,486
|
|
|
1.13x
|
|
1.36x
|
|
1.49x
|
|
1.60x
|
||
TA (No. 5)
(17)
|
|
40
|
|
|
N/A
|
|
|
870,393
|
|
|
68,227
|
|
|
1.29x
|
|
1.43x
|
|
1.55x
|
|
1.59x
|
||
Subtotal / Average TA
|
|
198
|
|
|
N/A
|
|
|
3,402,488
|
|
|
276,234
|
|
|
1.22x
|
|
1.37x
|
|
1.53x
|
|
1.60x
|
||
Total / Average
|
|
506
|
|
|
47,187
|
|
|
$
|
9,263,802
|
|
|
$
|
797,509
|
|
|
1.00x
|
|
1.07x
|
|
1.24x
|
|
1.25x
|
(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.
|
(2)
|
Each of our management agreements or leases provides for payment to us of an annual minimum return or 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 flows 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 all property level expenses and FF&E reserve escrows which are not subordinated to minimum returns and rents due to us (which data is provided to us by our managers or tenants), divided by the minimum returns or rents due to us. Coverage amounts for our InterContinental, Sonesta and TA Nos. 1, 2, 3 and 4 leases 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.
|
(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.
|
(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. On August 31, 2016, Marriott notified us that it will not exercise its renewal option at the expiration of the current lease term ending on December 31, 2019. 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 95 InterContinental branded hotels (
19
Staybridge Suites
®
,
61
Candlewood Suites
®
, two InterContinental
®
,
seven
Crowne Plaza
®
,
three
Holiday Inn
®
and
three
Kimpton
®
Hotels & Restaurants) in 28 states in the U.S. and Ontario, Canada to one of our TRSs. These 95 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
26
includes
$7,904
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.
|
(8)
|
We lease our
34
Sonesta branded hotels (
four
Royal Sonesta Hotels
®
,
five
Sonesta Hotels & Resorts
®
and
25
Sonesta ES Suites
®
hotels) in 19 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.
|
(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 managed 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
26
includes $1,407 of minimum rent related to the Wyndham Vacation lease.
|
(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.
|
(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.
|
(12)
|
We lease The Clift Hotel
®
in San Francisco, CA to a subsidiary of Morgans. This lease is scheduled to expire in 2103 and requires annual rent to us of
$7,595
, which amount is scheduled to increase on October 14, 2019 and every five years thereafter based upon consumer price index increases of no less than 10% and no more than 20% at the time of each increase. Although the terms of this lease might have qualified this lease as a direct financing lease under GAAP, we recognize the rental income we receive from Morgans on a cash basis because of uncertainty regarding our collection of future rent increases. In December 2016, we notified Morgans that the closing of its merger with SBE without our consent was a breach of its lease obligations and shortly thereafter we commenced an unlawful detainer action in the California state courts to compel Morgans and SBE to surrender possession of this hotel to us. We are currently pursuing this litigation and simultaneously engaging in discussions with Morgans and SBE regarding this hotel. The outcome of this pending litigation and our discussions with Morgans and SBE is not assured, but we believe Morgans may surrender to us possession of this hotel or that the court will determine that Morgans and SBE have breached the lease. We also believe that this hotel may require substantial capital investment to remain competitive in its market. The continuation of our dispute with Morgans and SBE is causing us to incur legal fees. Despite the continuation of this dispute, Morgans has paid the rents due to us through May 9, 2017; however, we believe that we may suffer some loss of future rent from this hotel, at least until this hotel is renovated and operations improve.
|
(13)
|
We lease
40
travel centers (36 TravelCenters of America
®
branded travel centers and four 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 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 of
$27,421
is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.
|
(14)
|
We lease
40
travel centers (38 TravelCenters of America
®
branded travel centers and two Petro Stopping Centers
®
branded travel 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 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 of
$29,107
is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.
|
(15)
|
We lease
39
travel centers (38 TravelCenters of America
®
branded travel centers and one Petro Stopping Centers
®
branded travel center) 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 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 of
$29,324
is due at the expiration of the initial term of this lease. This lease is guaranteed by TA.
|
(16)
|
We lease
39
travel centers (37 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 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 of
$21,233
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 2032; 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 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). TA’s previously deferred rent of
$42,915
is due on June 30, 2024. This lease is guaranteed by TA.
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
No. of
|
|
No. of Rooms /
|
|
Three Months Ended March 31,
|
|
|||||||||||
|
|
Hotels
|
|
Suites
|
|
2017
|
|
2016
|
|
Change
|
|
|||||||
ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Marriott (No. 1)
|
|
53
|
|
|
7,610
|
|
|
$
|
131.32
|
|
|
$
|
131.37
|
|
|
—
|
%
|
|
Marriott (No. 234)
|
|
68
|
|
|
9,120
|
|
|
130.97
|
|
|
128.57
|
|
|
1.9
|
%
|
|
||
Marriott (No. 5)
|
|
1
|
|
|
356
|
|
|
269.92
|
|
|
256.88
|
|
|
5.1
|
%
|
|
||
Subtotal / Average Marriott
|
|
122
|
|
|
17,086
|
|
|
134.90
|
|
|
133.18
|
|
|
1.3
|
%
|
|
||
InterContinental
(1)
|
|
96
|
|
|
15,007
|
|
|
117.72
|
|
|
118.27
|
|
|
(0.5
|
)%
|
|
||
Sonesta
(1)
|
|
34
|
|
|
6,329
|
|
|
139.32
|
|
|
138.27
|
|
|
0.8
|
%
|
|
||
Wyndham
|
|
22
|
|
|
3,579
|
|
|
92.67
|
|
|
91.81
|
|
|
0.9
|
%
|
|
||
Hyatt
|
|
22
|
|
|
2,724
|
|
|
110.06
|
|
|
109.27
|
|
|
0.7
|
%
|
|
||
Carlson
|
|
11
|
|
|
2,090
|
|
|
114.62
|
|
|
110.18
|
|
|
4.0
|
%
|
|
||
Morgans
|
|
1
|
|
|
372
|
|
|
293.88
|
|
|
273.79
|
|
|
7.3
|
%
|
|
||
All Hotels Total / Average
|
|
308
|
|
|
47,187
|
|
|
$
|
125.63
|
|
|
$
|
124.71
|
|
|
0.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
OCCUPANCY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Marriott (No. 1)
|
|
53
|
|
|
7,610
|
|
|
62.8
|
%
|
|
65.2
|
%
|
|
-2.4 pts
|
|
|
||
Marriott (No. 234)
|
|
68
|
|
|
9,120
|
|
|
72.8
|
%
|
|
73.0
|
%
|
|
-0.2 pts
|
|
|
||
Marriott (No. 5)
|
|
1
|
|
|
356
|
|
|
90.0
|
%
|
|
90.1
|
%
|
|
-0.1 pts
|
|
|
||
Subtotal / Average Marriott
|
|
122
|
|
|
17,086
|
|
|
68.7
|
%
|
|
69.9
|
%
|
|
-1.2 pts
|
|
|
||
InterContinental
(1)
|
|
96
|
|
|
15,007
|
|
|
77.3
|
%
|
|
76.6
|
%
|
|
0.7 pts
|
|
|
||
Sonesta
(1)
|
|
34
|
|
|
6,329
|
|
|
63.8
|
%
|
|
60.9
|
%
|
|
2.9 pts
|
|
|
||
Wyndham
|
|
22
|
|
|
3,579
|
|
|
64.4
|
%
|
|
65.8
|
%
|
|
-1.4 pts
|
|
|
||
Hyatt
|
|
22
|
|
|
2,724
|
|
|
79.5
|
%
|
|
78.0
|
%
|
|
1.5 pts
|
|
|
||
Carlson
|
|
11
|
|
|
2,090
|
|
|
68.0
|
%
|
|
68.3
|
%
|
|
-0.3 pts
|
|
|
||
Morgans
|
|
1
|
|
|
372
|
|
|
85.3
|
%
|
|
92.8
|
%
|
|
-7.5 pts
|
|
|
||
All Hotels Total / Average
|
|
308
|
|
|
47,187
|
|
|
71.2
|
%
|
|
71.1
|
%
|
|
0.1 pts
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Marriott (No. 1)
|
|
53
|
|
|
7,610
|
|
|
$
|
82.47
|
|
|
$
|
85.65
|
|
|
(3.7
|
)%
|
|
Marriott (No. 234)
|
|
68
|
|
|
9,120
|
|
|
95.35
|
|
|
93.86
|
|
|
1.6
|
%
|
|
||
Marriott (No. 5)
|
|
1
|
|
|
356
|
|
|
242.93
|
|
|
231.45
|
|
|
5.0
|
%
|
|
||
Subtotal / Average Marriott
|
|
122
|
|
|
17,086
|
|
|
92.68
|
|
|
93.09
|
|
|
(0.4
|
)%
|
|
||
InterContinental
(1)
|
|
96
|
|
|
15,007
|
|
|
91.00
|
|
|
90.59
|
|
|
0.5
|
%
|
|
||
Sonesta
(1)
|
|
34
|
|
|
6,329
|
|
|
88.89
|
|
|
84.21
|
|
|
5.6
|
%
|
|
||
Wyndham
|
|
22
|
|
|
3,579
|
|
|
59.68
|
|
|
60.41
|
|
|
(1.2
|
)%
|
|
||
Hyatt
|
|
22
|
|
|
2,724
|
|
|
87.50
|
|
|
85.23
|
|
|
2.7
|
%
|
|
||
Carlson
|
|
11
|
|
|
2,090
|
|
|
77.94
|
|
|
75.25
|
|
|
3.6
|
%
|
|
||
Morgans
|
|
1
|
|
|
372
|
|
|
250.68
|
|
|
254.08
|
|
|
(1.3
|
%)
|
|
||
All Hotels Total / Average
|
|
308
|
|
|
47,187
|
|
|
$
|
89.45
|
|
|
$
|
88.67
|
|
|
0.9
|
%
|
|
(1)
|
Operating data includes data for periods prior to our ownership of certain hotels.
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
|
2017
|
|
2016
|
||||
Net income available for common shareholders
|
|
$
|
25,843
|
|
|
$
|
46,885
|
|
|
Add:
|
Depreciation and amortization expense
|
|
93,451
|
|
|
87,271
|
|
||
FFO available for common shareholders
|
|
119,294
|
|
|
134,156
|
|
|||
Add:
|
Acquisition related costs
(1)
|
|
—
|
|
|
612
|
|
||
|
Estimated business management incentive fees
(2)
|
|
19,620
|
|
|
5,316
|
|
||
|
Loss on early extinguishment of debt
|
|
—
|
|
|
70
|
|
||
|
Excess of liquidation preference over carrying value of preferred shares redeemed
(3)
|
|
$
|
9,893
|
|
|
$
|
—
|
|
Normalized FFO available for common shareholders
|
|
$
|
148,807
|
|
|
$
|
140,154
|
|
|
|
|
|
|
|
|
||||
|
Weighted average shares outstanding (basic)
|
|
164,120
|
|
|
151,402
|
|
||
|
Weighted average shares outstanding (diluted)
(4)
|
|
164,149
|
|
|
151,415
|
|
||
|
|
|
|
|
|
||||
Basic and diluted per common share amounts:
|
|
|
|
|
|||||
|
Net income available for common shareholders
|
|
$
|
0.16
|
|
|
$
|
0.31
|
|
|
FFO available for common shareholders
|
|
$
|
0.73
|
|
|
$
|
0.89
|
|
|
Normalized FFO available for common shareholders
|
|
$
|
0.91
|
|
|
$
|
0.93
|
|
|
Distributions declared per share
|
|
$
|
0.51
|
|
|
$
|
0.50
|
|
(1)
|
Represents costs associated with our acquisition activities. Acquisition costs incurred during the 2017 period have been capitalized in purchase accounting pursuant to a change in GAAP.
|
(2)
|
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 statements of comprehensive income. 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 expense amount for the year is determined. Incentive fees for
2017
, if any, will be paid in cash in January
2018
.
|
(3)
|
On February 10, 2017, we redeemed all 11,600,000 of our outstanding
7.125%
Series D cumulative redeemable preferred shares at the stated liquidation preference of
$25.00
per share plus accrued and unpaid distributions to the date of redemption. The liquidation preference of the redeemed shares exceeded the carrying amount for the redeemed shares as of the date of redemption by
$9,893
and we reduced net income available for common shareholders in the three months ended March 31, 2017 by that excess amount.
|
(4)
|
Represents weighted average common shares adjusted to reflect the potential dilution of unvested share awards.
|
Principal Balance
|
|
Annual Interest
Rate
|
|
Annual Interest
Expense
|
|
Maturity
|
|
Interest Payments
Due
|
|||||
$
|
350,000
|
|
|
6.700
|
%
|
|
$
|
23,450
|
|
|
2018
|
|
Semi-Annually
|
400,000
|
|
|
4.250
|
%
|
|
17,000
|
|
|
2021
|
|
Semi-Annually
|
||
500,000
|
|
|
5.000
|
%
|
|
25,000
|
|
|
2022
|
|
Semi-Annually
|
||
500,000
|
|
|
4.500
|
%
|
|
22,500
|
|
|
2023
|
|
Semi-Annually
|
||
350,000
|
|
|
4.650
|
%
|
|
16,275
|
|
|
2024
|
|
Semi-Annually
|
||
350,000
|
|
|
4.500
|
%
|
|
15,750
|
|
|
2025
|
|
Semi-Annually
|
||
350,000
|
|
|
5.250
|
%
|
|
18,375
|
|
|
2026
|
|
Semi-Annually
|
||
400,000
|
|
|
4.950
|
%
|
|
19,800
|
|
|
2027
|
|
Semi-Annually
|
||
47
|
|
|
3.800
|
%
|
|
2
|
|
|
2027
(1)
|
|
Semi-Annually
|
||
$
|
3,200,047
|
|
|
|
|
|
$
|
158,152
|
|
|
|
|
|
(1)
|
On March 15, 2017, we repurchased at par plus accrued and unpaid interest
$8,431
of the outstanding principal amount of our
3.8%
Convertible Senior Notes due 2027 which were tendered by the holders of these notes for repurchase by us. In April 2017, we redeemed at par plus accrued and unpaid interest the remaining
$47
of the outstanding principal amount of these notes.
|
|
|
Impact of Increase in Interest Rates
|
|
|
|||||||||||
|
|
Interest Rate
Per Year
(1)
|
|
Outstanding
Debt
|
|
Total Interest
Expense Per Year
|
|
Annual Per Common
Share Impact
(2)
|
|||||||
At March 31, 2017
|
|
2.01
|
%
|
|
$
|
530,000
|
|
|
$
|
10,653
|
|
|
$
|
0.06
|
|
100 basis point increase
|
|
3.01
|
%
|
|
$
|
530,000
|
|
|
$
|
15,953
|
|
|
$
|
0.10
|
|
|
|
Impact of Increase in Interest Rates
|
|
|
|||||||||||
|
|
Interest Rate
Per Year
(1)
|
|
Outstanding
Debt
|
|
Total Interest
Expense Per Year
|
|
Annual Per Common
Share Impact
(2)
|
|||||||
At March 31, 2017
|
|
2.05
|
%
|
|
$
|
1,400,000
|
|
|
$
|
28,700
|
|
|
$
|
0.17
|
|
100 basis point increase
|
|
3.05
|
%
|
|
$
|
1,400,000
|
|
|
$
|
42,700
|
|
|
$
|
0.26
|
|
(1)
|
Weighted average based on the interest rates and the respective outstanding borrowings (assuming fully drawn) as of
March 31, 2017
.
|
(2)
|
Based on diluted weighted average common shares outstanding for the
three
months ended
March 31, 2017
.
|
•
|
OUR HOTEL MANAGERS’ OR TENANTS’ ABILITIES TO PAY THE CONTRACTUAL AMOUNTS OF RETURNS OR RENTS DUE TO US,
|
•
|
OUR ABILITY TO COMPETE FOR ACQUISITIONS EFFECTIVELY,
|
•
|
OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,
|
•
|
OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND THE AMOUNT OF SUCH DISTRIBUTIONS,
|
•
|
OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL,
|
•
|
OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,
|
•
|
OUR INTENT TO MAKE IMPROVEMENTS TO CERTAIN OF OUR PROPERTIES AND THE SUCCESS OF OUR HOTEL RENOVATIONS TO IMPROVE OUR HOTELS' RATES AND OCCUPANCIES,
|
•
|
OUR ABILITY TO ENGAGE AND RETAIN QUALIFIED MANAGERS AND TENANTS FOR OUR HOTELS AND TRAVEL CENTERS ON SATISFACTORY TERMS,
|
•
|
THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,
|
•
|
OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,
|
•
|
OUR CREDIT RATINGS,
|
•
|
THE ABILITY OF TA TO PAY CURRENT AND DEFERRED RENT AMOUNTS AND OTHER OBLIGATIONS DUE TO US,
|
•
|
OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF RMR INC.,
|
•
|
OUR EXPECTATION THAT WE BENEFIT FROM OUR OWNERSHIP OF AIC AND FROM OUR PARTICIPATION IN INSURANCE PROGRAMS ARRANGED BY AIC,
|
•
|
OUR QUALIFICATION FOR TAXATION AS A REIT, AND
|
•
|
OTHER MATTERS.
|
•
|
THE IMPACT OF CONDITIONS AND CHANGES IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR MANAGERS AND TENANTS,
|
•
|
COMPETITION WITHIN THE REAL ESTATE, HOTEL, TRANSPORTATION 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 FOR TAXATION 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 RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, TA, SONESTA, RMR INC., RMR LLC, AIC AND OTHERS AFFILIATED WITH THEM.
|
•
|
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, THE CAPITAL COSTS WE INCUR TO MAINTAIN OUR PROPERTIES AND OUR WORKING CAPITAL REQUIREMENTS. WE MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON 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,
|
•
|
AS OF
MARCH 31, 2017
, APPROXIMATELY
79%
OF OUR AGGREGATE ANNUAL MINIMUM RETURNS AND RENTS WERE SECURED BY GUARANTEES OR SECURITY DEPOSITS FROM OUR MANAGERS AND TENANTS. THIS MAY IMPLY THAT THESE MINIMUM RETURNS AND RENTS WILL BE PAID. IN FACT, CERTAIN OF THESE GUARANTEES AND SECURITY DEPOSITS ARE LIMITED IN AMOUNT AND DURATION AND ALL THE GUARANTEES ARE SUBJECT TO THE GUARANTORS’ ABILITIES AND WILLINGNESS TO PAY. FURTHER, WYNDHAM'S GUARANTEE OF THE MINIMUM RETURNS DUE FROM OUR HOTELS THAT ARE MANAGED BY WYNDHAM WAS DEPLETED TO PAY MINIMUM RETURNS DUE FOR THE QUARTER ENDED MARCH 31, 2017. WE DO NOT KNOW WHETHER WYNDHAM WILL CONTINUE TO PAY THE MINIMUM RETURNS DUE TO US DESPITE THE DEPLETED GUARANTEE OR IF WYNDHAM WILL DEFAULT ON ITS PAYMENTS. THE BALANCE OF OUR ANNUAL MINIMUM RETURNS AND RENTS AS OF
MARCH 31, 2017
WAS NOT GUARANTEED NOR DO WE HOLD A SECURITY DEPOSIT WITH RESPECT TO THOSE AMOUNTS. WE CANNOT BE SURE OF THE FUTURE FINANCIAL PERFORMANCE OF OUR PROPERTIES AND WHETHER SUCH PERFORMANCE WILL COVER OUR MINIMUM RETURNS AND RENTS, WHETHER THE GUARANTEES OR SECURITY DEPOSITS WILL BE ADEQUATE TO COVER FUTURE SHORTFALLS IN THE MINIMUM RETURNS OR RENTS DUE TO US, OR REGARDING OUR MANAGERS’, TENANTS’ OR GUARANTORS’ FUTURE ACTIONS IF AND WHEN THE
|
•
|
WE HAVE RECENTLY RENOVATED CERTAIN HOTELS AND ARE CURRENTLY RENOVATING ADDITIONAL HOTELS. WE EXPECT TO FUND APPROXIMATELY
$32.5
MILLION FOR RENOVATIONS AND OTHER CAPITAL IMPROVEMENT COSTS AT OUR HOTELS DURING THE REMAINDER OF 2017 AND $18.7 MILLION IN 2018 AND THESE AMOUNTS WILL INCREASE IF AND AS WE CONCLUDE OUR PENDING AND OTHER ACQUISITIONS. THE COST OF CAPITAL PROJECTS ASSOCIATED WITH SUCH RENOVATIONS MAY BE GREATER THAN WE NOW ANTICIPATE. OPERATING RESULTS AT OUR HOTELS MAY DECLINE AS A RESULT OF HAVING ROOMS OUT OF SERVICE OR OTHER DISRUPTIONS DURING RENOVATIONS. ALSO, 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 EXPECT TO PURCHASE FROM TA DURING THE REMAINDER OF 2017 UP TO
$53.8
MILLION OF CAPITAL IMPROVEMENTS TA EXPECTS TO MAKE TO THE TRAVEL CENTERS WE LEASE TO TA. PURSUANT TO THE TERMS OF THE APPLICABLE LEASES, THE ANNUAL RENT PAYABLE TO US BY TA WILL INCREASE AS A RESULT OF ANY SUCH PURCHASES. WE MAY ULTIMATELY PURCHASE MORE OR LESS THAN THIS BUDGETED AMOUNT. TA MAY NOT REALIZE RESULTS FROM ANY OF THESE CAPITAL IMPROVEMENTS WHICH EQUAL OR EXCEED THE INCREASED ANNUAL RENTS IT WILL BE OBLIGATED TO PAY TO US, WHICH COULD INCREASE THE RISK OF TA BEING UNABLE TO PAY AMOUNTS DUE TO US,
|
•
|
HOTEL ROOM DEMAND AND TRUCKING ACTIVITY ARE OFTEN REFLECTIONS OF THE GENERAL ECONOMIC ACTIVITY IN THE COUNTRY AND IN THE GEOGRAPHICAL AREAS WHERE OUR HOTELS ARE LOCATED. 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, DEPRESSED OPERATING RESULTS FROM OUR PROPERTIES FOR EXTENDED PERIODS MAY RESULT IN THE OPERATORS OF SOME OR ALL OF OUR HOTELS AND OUR TRAVEL CENTERS BECOMING UNABLE OR UNWILLING TO MEET THEIR OBLIGATIONS OR THEIR GUARANTEES AND SECURITY DEPOSITS WE HOLD MAY BE EXHAUSTED,
|
•
|
HOTEL SUPPLY GROWTH HAS BEEN INCREASING AND MAY AFFECT OUR HOTEL OPERATORS' ABILITY TO GROW ADR AND OCCUPANCY, AND ADR AND OCCUPANCY COULD DECLINE DUE TO INCREASED COMPETITION WHICH MAY CAUSE OUR HOTEL OPERATORS TO BECOME UNABLE TO PAY OUR RETURNS OR RENTS,
|
•
|
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. IF FUEL EFFICIENCIES, THE USE OF ALTERNATIVE FUELS OR TRANSPORTATION TECHNOLOGIES REDUCE THE DEMAND FOR PRODUCTS AND SERVICES TA SELLS OR FOR VARIOUS OTHER REASONS, TA MAY BECOME UNABLE TO PAY CURRENT AND DEFERRED RENTS DUE TO US,
|
•
|
OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES THAT GENERATE RETURNS OR CAN BE LEASED 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 ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND OUR PENDING ACQUISITIONS AND SALES AND ANY RELATED MANAGEMENT ARRANGEMENTS WE EXPECT TO ENTER MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS OR ARRANGEMENTS MAY CHANGE,
|
•
|
AT
MARCH 31, 2017
, WE HAD
$23.8
MILLION OF CASH AND CASH EQUIVALENTS,
$870.0
MILLION AVAILABLE UNDER OUR
$1.0
BILLION 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 PAID THE MINIMUM AMOUNTS DUE TO US FROM THEIR OPERATIONS OF OUR LEASED OR MANAGED PROPERTIES. ALSO, CERTAIN OF 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 FLOWS TO US. 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 REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CUSTOMARY CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,
|
•
|
ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY OR OTHER FLOATING RATE DEBT WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH FACILITIES,
|
•
|
THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY AND 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 REVOLVING CREDIT FACILITY AND TERM LOAN IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,
|
•
|
THE PREMIUMS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR REVOLVING CREDIT FACILITY AND TERM LOAN AND THE FACILITY FEE PAYABLE ON OUR REVOLVING CREDIT FACILITY ARE BASED ON OUR CREDIT RATINGS. FUTURE CHANGES IN OUR CREDIT RATINGS MAY CAUSE THE INTEREST AND FEES WE PAY TO INCREASE,
|
•
|
WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS; HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET,
|
•
|
THE BUSINESS AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS,
|
•
|
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. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE,
|
•
|
MARRIOTT HAS NOTIFIED US THAT IT DOES NOT INTEND TO EXTEND ITS LEASE FOR OUR RESORT HOTEL ON KAUAI, HAWAII WHEN THAT LEASE EXPIRES ON DECEMBER 31, 2019 AND WE INTEND TO HAVE DISCUSSIONS WITH MARRIOTT ABOUT THE FUTURE OF THIS HOTEL. THESE STATEMENTS MAY IMPLY THAT MARRIOTT WILL NOT OPERATE THIS HOTEL IN THE FUTURE OR THAT WE MAY RECEIVE LESS CASH FLOW FROM THIS HOTEL IN THE FUTURE. OUR DISCUSSIONS WITH MARRIOTT HAVE ONLY RECENTLY BEGUN. AT THIS TIME WE CANNOT PREDICT HOW OUR DISCUSSIONS WITH MARRIOTT WILL IMPACT THE FUTURE OF THIS HOTEL. FOR EXAMPLE, THIS HOTEL MAY CONTINUE TO BE OPERATED BY MARRIOTT ON DIFFERENT CONTRACT TERMS THAN THE CURRENT LEASE, WE MAY IDENTIFY A DIFFERENT OPERATOR FOR THIS HOTEL OR THE CASH FLOWS WHICH WE RECEIVE
|
•
|
WE HAVE ADVISED MORGANS THAT THE CLOSING OF ITS MERGER WITH SBE WAS IN VIOLATION OF OUR AGREEMENT WITH MORGANS, WE HAVE FILED AN ACTION FOR UNLAWFUL DETAINER AGAINST MORGANS AND SBE TO COMPEL MORGANS AND SBE TO SURRENDER POSSESSION OF THE SAN FRANCISCO HOTEL WHICH MORGANS HISTORICALLY LEASED FROM US, AND WE ARE CURRENTLY ENGAGED IN DISCUSSIONS WITH MORGANS AND SBE REGARDING THIS MATTER. THE OUTCOME OF THIS PENDING LITIGATION AND OF OUR DISCUSSIONS WITH MORGANS AND SBE IS NOT ASSURED, BUT WE BELIEVE THAT MORGANS MAY SURRENDER POSSESSION OF THIS HOTEL OR THAT THE COURT WILL DETERMINE THAT MORGANS AND SBE HAVE BREACHED THE HISTORICAL LEASE. WE ALSO BELIEVE THAT THIS HOTEL MAY REQUIRE SUBSTANTIAL CAPITAL INVESTMENT TO REMAIN COMPETITIVE IN ITS MARKET. THE CONTINUATION OF OUR DISPUTE WITH MORGANS AND SBE REQUIRES US TO EXPEND LEGAL FEES AND THE RESULT OF THIS DISPUTE MAY CAUSE US SOME LOSS OF RENT, AT LEAST UNTIL THIS HOTEL MAY BE RENOVATED AND OPERATIONS IMPROVE. LITIGATION AND DISPUTES WITH TENANTS OFTEN PRODUCE UNEXPECTED RESULTS AND WE CAN PROVIDE NO ASSURANCE REGARDING THE RESULTS OF THIS DISPUTE.
|
Exhibit
Number
|
|
Description
|
|
3.1
|
|
|
Composite Copy of Amended and Restated Declaration of Trust, dated as of August 21, 1995, as amended to date. (Filed herewith.)
|
3.2
|
|
|
Composite Copy of Amended and Restated Declaration of Trust, dated as of August 21, 1995, as amended to date. (marked copy) (Filed herewith.)
|
3.3
|
|
|
Amended and Restated Bylaws of the Company, adopted April 20, 2017. (Filed herewith.)
|
3.4
|
|
|
Amended and Restated Bylaws of the Company, adopted April 20, 2017. (marked copy) (Filed herewith.)
|
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
|
|
|
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.)
|
4.3
|
|
|
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.)
|
4.4
|
|
|
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.)
|
4.5
|
|
|
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 June 30, 2013.)
|
4.6
|
|
|
Authentication Order, dated January 13, 2017, from the Company to U.S. Bank National Association, relating to the Company’s 4.500% Senior Notes due 2023. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.)
|
4.7
|
|
|
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.)
|
4.8
|
|
|
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.)
|
4.9
|
|
|
Indenture, dated as of February 3, 2016, between the Company and U.S. Bank National Association. (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 3, 2016.)
|
4.10
|
|
|
First Supplemental Indenture, dated as of February 3, 2016, between the Company and U.S. Bank National Association, relating to the Company’s 4.25% Senior Notes due 2021, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 3, 2016.)
|
4.11
|
|
|
Second Supplemental Indenture, dated as of February 3, 2016, between the Company and U.S. Bank National Association, relating to the Company’s 5.25% Senior Notes due 2026, including form thereof. (Incorporated by reference to the Company’s Current Report on Form 8-K dated February 3, 2016.)
|
4.12
|
|
|
Third Supplemental Indenture, dated as of January 13, 2017, between the Company and U.S. Bank National Association, relating to the Company’s 4.950% Senior Notes due 2027, including form thereof. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.)
|
4.13
|
|
|
Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among the Company, ABP Trust
(f/k/a Reit Management & Research Trust), Barry M. Portnoy and Adam D. Portnoy. (Incorporated by reference to the Company’s Current Report on Form 8-K dated June 5, 2015.)
|
10.1
|
|
|
Fourth Amendment to Management Agreement, dated as of March 24, 2017, among HPT TRS IHG-2, Inc., InterContinental Hotels Group Resources, Inc., IHG Management (Maryland) LLC and InterContinental Hotels Group (Canada), Inc. (Filed herewith.)
|
10.2
|
|
|
Development Property Agreement, dated May 3, 2017, between HPT TA Properties Trust and TA Operating LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K dated May 3, 2017.)
|
10.3
|
|
|
Seventh Amendment to Amended and Restated Lease Agreement No. 4, dated May 3, 2017, 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 May 3, 2017.)
|
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 March 31, 2017 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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HOSPITALITY PROPERTIES TRUST
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/s/ John G. Murray
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John G. Murray
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President and Chief Operating Officer
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Dated: May 10, 2017
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/s/ Mark L. Kleifges
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Mark L. Kleifges
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Chief Financial Officer and Treasurer
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(Principal Financial and Accounting Officer)
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Dated: May 10, 2017
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Page
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ARTICLE I
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THE TRUST; DEFINITIONS
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4
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1.1.
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Name
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4
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1.2.
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Place of Business
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4
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1.3.
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Nature of Trust
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4
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1.4.
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Definitions
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4
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ARTICLE II
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TRUSTEES
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6
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2.1.
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Number, Term of Office and Qualification of Trustees
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6
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2.2.
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Compensation and Other Remuneration
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7
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2.3.
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Resignation, removal and Death of Trustees
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7
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2.4.
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Vacancies
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7
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2.5.
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Successor and Additional Trustees
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7
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2.6.
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Actions by Trustees
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7
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2.7.
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Committees
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8
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ARTICLE III
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TRUSTEES’ POWERS
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8
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3.1.
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Power and Authority of Trustees
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8
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3.2.
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Specific Powers and Authority
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8
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3.3.
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Bylaws
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11
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ARTICLE IV
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INVESTMENT POLICY AND POLICIES WITH RESPECT TO CERTAIN DISTRIBUTIONS TO SHAREHOLDERS
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11
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4.1.
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Statement of Policy
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11
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4.2.
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Prohibited Investments and Activities
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11
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4.3.
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Change in Investment Policies
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11
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ARTICLE V
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THE SHARES AND SHAREHOLDERS
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12
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5.1.
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Description of Shares
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12
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5.2.
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Certificates, Ownership of Shares shall be evidenced by certificates
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12
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5.3.
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Fractional Shares
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13
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5.4.
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Legal Ownership of Trust Estate
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13
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5.5.
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Shares Deemed Personal Property
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13
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5.6.
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Share Record; Issuance and Transferability of Shares
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13
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5.7.
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Dividends or Distributions to Shareholders
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13
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5.8.
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Transfer Agent, Dividend Disbursing Agent and Registrar
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14
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5.9.
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Shareholders’ Meetings
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14
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5.10.
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Proxies
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14
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5.11.
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[Reserved]
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14
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5.12.
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Fixing Record Date
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14
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5.13.
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Notice to Shareholders
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15
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5.14.
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Shareholders’ Disclosure; Restrictions on Share Transfer; Limitation on Holdings
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15
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5.15.
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Special Voting Provisions relating to Certain Business Combinations and Control Shares
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17
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ARTICLE VI
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LIABILITY OF TRUSTEES, SHAREHOLDERS, OFFICERS, EMPLOYEES AND AGENTS, AND OTHER MATTERS
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17
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6.1.
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Limitation of Liability of Shareholders, Trustees, Officers, Employees and Agents for Obligations of the Trust
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17
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6.2.
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Express Exculpatory Clauses and Instruments
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17
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6.3.
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Limitation of Liability of Trustees, Officers, Employees and Agents to the Trust and to Shareholders for Acts and Omissions
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17
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6.4.
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Indemnification and Reimbursement of Trustees, Officers, Employees, Agents and Certain Other Persons
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17
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6.5.
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Indemnification and Reimbursement of Shareholders
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18
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6.6.
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Right of Trustees, Officers, Employees and Agents to Own Shares or Other Property and to Engage in Other Business
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18
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6.7.
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Transactions Between Trustees, Officers, Employees or Agents and the Trust
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18
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6.8.
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Persons Dealing with Trustees, Officers, Employees or Agents
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19
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6.9.
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Reliance
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19
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ARTICLE VII
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DURATION, AMENDMENT AND TERMINATION OF TRUST
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19
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7.1.
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Duration of Trust
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19
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7.2.
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Termination of Trust
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19
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7.3.
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Amendment Procedure
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20
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7.4.
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Amendments Effective
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20
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7.5.
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Transfer to Successor
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20
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ARTICLE VIII
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MISCELLANEOUS
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20
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8.1.
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Applicable Law
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20
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8.2.
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Index and Headings for Reference Only
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20
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8.3.
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Successors in Interest
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20
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8.4.
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Inspection of Records
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20
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8.5.
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Counterparts
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20
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8.6.
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Provisions of the Trust in Conflict with Law or Regulations; Severability
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21
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8.7.
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Certifications
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21
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8.8.
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Indemnification of the Trust
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21
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Name:
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Barry M. Portnoy
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Address:
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Sullivan & Worcester
One Post Office Square Boston, MA 02109 |
Name:
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Gerard M. Martin
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Address:
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M & P Partners Limited Partnership
400 Centre Street Newton, MA 02158 |
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Page
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ARTICLE I
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THE TRUST; DEFINITIONS
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4
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1.1.
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Name
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4
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1.2.
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Place of Business
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4
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1.3.
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Nature of Trust
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4
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1.4.
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Definitions
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4
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ARTICLE II
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TRUSTEES
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7
6
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2.1.
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Number, Term of Office and Qualification of Trustees
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7
6
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2.2.
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Compensation and Other Remuneration
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8
7
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2.3.
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Resignation, removal and Death of Trustees
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8
7
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2.4.
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Vacancies
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8
7
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2.5.
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Successor and Additional Trustees
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9
7
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2.6.
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Actions by Trustees
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9
7
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2.7.
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Committees
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9
8
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ARTICLE III
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TRUSTEES’ POWERS
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10
8
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3.1.
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Power and Authority of Trustees
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10
8
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3.2.
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Specific Powers and Authority
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10
8
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3.3.
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Bylaws
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14
11
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ARTICLE IV
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INVESTMENT POLICY AND POLICIES WITH RESPECT TO CERTAIN DISTRIBUTIONS TO SHAREHOLDERS
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14
11
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4.1.
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Statement of Policy
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14
11
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4.2.
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Prohibited Investments and Activities
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15
11
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4.3.
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Change in Investment Policies
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15
11
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ARTICLE V
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THE SHARES AND SHAREHOLDERS
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15
12
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5.1.
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Description of Shares
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15
12
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5.2.
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Certificates, Ownership of Shares shall be evidenced by certificates
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16
12
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5.3.
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Fractional Shares
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17
13
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5.4.
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Legal Ownership of Trust Estate
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17
13
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5.5.
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Shares Deemed Personal Property
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17
13
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5.6.
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Share Record; Issuance and Transferability of Shares
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17
13
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5.7.
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Dividends or Distributions to Shareholders
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18
13
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5.8.
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Transfer Agent, Dividend Disbursing Agent and Registrar
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18
14
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5.9.
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Shareholders’ Meetings
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18
14
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5.10.
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Proxies
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19
14
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8.7.
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Certifications
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29
21
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8.8.
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Indemnification of the Trust
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29
21
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Name:
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Barry M. Portnoy
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Address:
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Sullivan & Worcester
One Post Office Square Boston, MA 02109 |
Name:
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Gerard M. Martin
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Address:
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M & P Partners Limited Partnership
400 Centre Street Newton, MA 02158 |
ARTICLE I OFFICES
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1
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Section 1.1 Principal Office
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1
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Section 1.2 Additional Offices
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1
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ARTICLE II MEETINGS OF SHAREHOLDERS
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1
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Section 2.1 Place
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1
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Section 2.2 Annual Meeting
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1
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Section 2.3 Special Meetings
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1
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Section 2.4 Notice of Regular or Special Meetings
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1
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Section 2.5 Notice of Adjourned Meetings
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2
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Section 2.6 Meeting Business
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2
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Section 2.7 Organization of Shareholder Meetings
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2
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Section 2.8 Quorum
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3
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Section 2.9 Voting
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3
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Section 2.10 Proxies
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3
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Section 2.11 Record Date
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4
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Section 2.12 Voting of Shares by Certain Holders
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4
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Section 2.13 Inspectors
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4
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Section 2.14 Nominations and Other Proposals to be Considered at Meetings of Shareholders
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4
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Section 2.15 No Shareholder Actions by Written Consent
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14
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Section 2.16 Voting by Ballot
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14
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Section 2.17 Proposals of Business Which Are Not Proper Matters For Action By Shareholders
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14
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ARTICLE III TRUSTEES
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14
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Section 3.1 General Powers; Qualifications; Trustees Holding Over
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14
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Section 3.2 Independent Trustees and Managing Trustees
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14
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Section 3.3 Number and Tenure
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15
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Section 3.4 Annual and Regular Meetings
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15
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Section 3.5 Special Meetings
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15
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Section 3.6 Notice
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16
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Section 3.7 Quorum
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16
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Section 3.8 Voting
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16
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Section 3.9 Telephone Meetings
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16
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Section 3.10 Action by Written Consent of Trustees
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16
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Section 3.11 Waiver of Notice
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17
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Section 3.12 Vacancies
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17
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Section 3.13 Compensation
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17
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Section 3.14 Removal of Trustees
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17
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Section 3.15 Surety Bonds
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18
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Section 3.16 Reliance
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18
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Section 3.17 Interested Trustee Transactions
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18
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Section 3.18 Certain Rights of Trustees, Officers, Employees and Agents
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18
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Section 3.19 Emergency Provisions
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18
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ARTICLE IV COMMITTEES
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18
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Section 4.1 Number; Tenure and Qualifications
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18
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Section 4.2 Powers
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19
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Section 4.3 Meetings
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19
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Section 4.4 Telephone Meetings
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19
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Section 4.5 Action by Written Consent of Committees
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19
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Section 4.6 Vacancies
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19
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ARTICLE V OFFICERS
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19
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Section 5.1 General Provisions
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19
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Section 5.2 Removal and Resignation
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20
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Section 5.3 Vacancies
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20
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Section 5.4 President
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20
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Section 5.5 Chief Operating Officer
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20
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Section 5.6 Chief Financial Officer
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20
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Section 5.7 Vice Presidents
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20
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Section 5.8 Secretary
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21
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Section 5.9 Treasurer
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21
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Section 5.10 Assistant Secretaries and Assistant Treasurers
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21
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ARTICLE VI CONTRACTS, LOANS, CHECKS AND DEPOSITS
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21
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Section 6.1 Contracts
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21
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Section 6.2 Checks and Drafts
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21
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Section 6.3 Deposits
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21
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ARTICLE VII SHARES
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22
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Section 7.1 Certificates
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22
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Section 7.2 Transfers
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22
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Section 7.3 Lost Certificates
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22
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Section 7.4 Closing of Transfer Books or Fixing of Record Date
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22
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Section 7.5 Share Ledger
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23
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Section 7.6 Fractional Shares; Issuance of Units
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23
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ARTICLE VIII RESTRICTIONS ON TRANSFER AND OWNERSHIP OF SHARES
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23
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Section 8.1 Definitions
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23
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Section 8.2 Restrictions on Ownership
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25
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Section 8.3 Transfer of Shares
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29
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Section 8.4 Costs, Expenses and Compensation of Charitable Trustee and the Trust
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31
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Section 8.5 Transactions on a National Securities Exchange
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32
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Section 8.6 Enforcement
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32
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Section 8.7 Non-Waiver
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32
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Section 8.8 Enforceability
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32
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ARTICLE IX REGULATORY COMPLIANCE AND DISCLOSURE
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32
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Section 9.1 Actions Requiring Regulatory Compliance Implicating the Trust
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32
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Section 9.2 Compliance With Law
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33
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Section 9.3 Limitation on Voting Shares or Proxies
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34
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Section 9.4 Representations, Warranties and Covenants Made to Governmental or Regulatory Bodies
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34
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Section 9.5 Board of Trustees’ Determinations
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34
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ARTICLE X FISCAL YEAR
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34
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Section 10.1 Fiscal Year
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34
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ARTICLE XI DIVIDENDS AND OTHER DISTRIBUTIONS
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34
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Section 11.1 Dividends and Other Distributions
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34
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ARTICLE XII SEAL
|
34
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Section 12.1 Seal
|
34
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Section 12.2 Affixing Seal
|
34
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ARTICLE XIII WAIVER OF NOTICE
|
35
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Section 13.1 Waiver of Notice
|
35
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ARTICLE XIV AMENDMENT OF BYLAWS
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35
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Section 14.1 Amendment of Bylaws
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35
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ARTICLE XV MISCELLANEOUS
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35
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Section 15.1 References to Declaration of Trust
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35
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Section 15.2 Costs and Expenses
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35
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Section 15.3 Ratification
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36
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Section 15.4 Ambiguity
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36
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Section 15.5 Inspection of Bylaws
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36
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Section 15.6 Election to be Subject to Part of Title 3, Subtitle 8
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36
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ARTICLE XVI ARBITRATION PROCEDURES FOR DISPUTES
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36
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Section 16.1 Procedures for Arbitration of Disputes
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36
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Section 16.2 Arbitrators
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37
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Section 16.3 Place of Arbitration
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37
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Section 16.4 Discovery
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37
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Section 16.5 Awards
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38
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Section 16.6 Costs and Expenses
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38
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Section 16.7 Appeals
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38
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Section 16.8 Final and Binding
|
38
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Section 16.9 Beneficiaries
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38
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ARTICLE XVII EXCLUSIVE FORUM FOR CERTAIN DISPUTES
|
39
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Section 17.1 Exclusive Forum
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39
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ARTICLE I OFFICES
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1
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Section 1.1 Principal Office
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1
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Section 1.2 Additional Offices
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1
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ARTICLE II MEETINGS OF SHAREHOLDERS
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1
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Section 2.1 Place
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1
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Section 2.2 Annual Meeting
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1
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Section 2.3 Special Meetings
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1
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Section 2.4 Notice of Regular or Special Meetings
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1
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Section 2.5 Notice of Adjourned Meetings
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2
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Section 2.6 Meeting Business
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2
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Section 2.7 Organization of Shareholder Meetings
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2
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Section 2.8 Quorum
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3
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Section 2.9 Voting
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3
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Section 2.10 Proxies
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3
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Section 2.11 Record Date
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4
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Section 2.12 Voting of Shares by Certain Holders
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4
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Section 2.13 Inspectors
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4
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Section 2.14 Nominations and Other Proposals to be Considered at Meetings of Shareholders
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4
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Section 2.15 No Shareholder Actions by Written Consent
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14
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Section 2.16 Voting by Ballot
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14
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Section 2.17 Proposals of Business Which Are Not Proper Matters For Action By Shareholders
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14
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ARTICLE III TRUSTEES
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14
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Section 3.1 General Powers; Qualifications; Trustees Holding Over
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14
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Section 3.2 Independent Trustees and Managing Trustees
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14
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Section 3.3 Number and Tenure
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15
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Section 3.4 Annual and Regular Meetings
|
15
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Section 3.5 Special Meetings
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15
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Section 3.6 Notice
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16
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Section 3.7 Quorum
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16
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Section 3.8 Voting
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16
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Section 3.9 Telephone Meetings
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16
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Section 3.10 Action by Written Consent of Trustees
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16
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Section 3.11 Waiver of Notice
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17
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Section 3.12 Vacancies
|
17
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Section 3.13 Compensation
|
17
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Section 3.14 Removal of Trustees
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17
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Section 3.15 Surety Bonds
|
18
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Section 3.16 Reliance
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18
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Section 3.17 Interested Trustee Transactions
|
18
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Section 3.18 Certain Rights of Trustees, Officers, Employees and Agents
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18
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Section 3.19 Emergency Provisions
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18
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ARTICLE IV COMMITTEES
|
18
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Section 4.1 Number; Tenure and Qualifications
|
18
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Section 4.2 Powers
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19
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Section 4.3 Meetings
|
19
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Section 4.4 Telephone Meetings
|
19
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Section 4.5 Action by Written Consent of Committees
|
19
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Section 4.6 Vacancies
|
19
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ARTICLE V OFFICERS
|
19
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Section 5.1 General Provisions
|
19
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Section 5.2 Removal and Resignation
|
20
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Section 5.3 Vacancies
|
20
|
Section 5.4 President
|
20
|
Section 5.5 Chief Operating Officer
|
20
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Section 5.6 Chief Financial Officer
|
20
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Section 5.7 Vice Presidents
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20
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Section 5.8 Secretary
|
21
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Section 5.9 Treasurer
|
21
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Section 5.10 Assistant Secretaries and Assistant Treasurers
|
21
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ARTICLE VI CONTRACTS, LOANS, CHECKS AND DEPOSITS
|
21
|
Section 6.1 Contracts
|
21
|
Section 6.2 Checks and Drafts
|
21
|
Section 6.3 Deposits
|
21
|
ARTICLE VII SHARES
|
22
|
Section 7.1 Certificates
|
22
|
Section 7.2 Transfers
|
22
|
Section 7.3 Lost Certificates
|
22
|
Section 7.4 Closing of Transfer Books or Fixing of Record Date
|
22
|
Section 7.5 Share Ledger
|
23
|
Section 7.6 Fractional Shares; Issuance of Units
|
23
|
ARTICLE VIII RESTRICTIONS ON TRANSFER AND OWNERSHIP OF SHARES
|
23
|
Section 8.1 Definitions
|
23
|
Section 8.2 Restrictions on Ownership
|
25
|
Section 8.3 Transfer of Shares
|
29
|
Section 8.4 Costs, Expenses and Compensation of Charitable Trustee and the Trust
|
31
|
Section 8.5 Transactions on a National Securities Exchange
|
32
|
Section 8.6 Enforcement
|
32
|
Section 8.7 Non-Waiver
|
32
|
Section 8.8 Enforceability
|
32
|
ARTICLE IX REGULATORY COMPLIANCE AND DISCLOSURE
|
32
|
Section 9.1 Actions Requiring Regulatory Compliance Implicating the Trust
|
32
|
Section 9.2 Compliance With Law
|
33
|
Section 9.3 Limitation on Voting Shares or Proxies
|
34
|
Section 9.4 Representations, Warranties and Covenants Made to Governmental or Regulatory Bodies
|
34
|
Section 9.5 Board of Trustees’ Determinations
|
34
|
ARTICLE X FISCAL YEAR
|
34
|
Section 10.1 Fiscal Year
|
34
|
ARTICLE XI DIVIDENDS AND OTHER DISTRIBUTIONS
|
34
|
Section 11.1 Dividends and Other Distributions
|
34
|
ARTICLE XII SEAL
|
34
|
Section 12.1 Seal
|
34
|
Section 12.2 Affixing Seal
|
34
|
ARTICLE XIII WAIVER OF NOTICE
|
35
|
Section 13.1 Waiver of Notice
|
35
|
ARTICLE XIV AMENDMENT OF BYLAWS
|
35
|
Section 14.1 Amendment of Bylaws
|
35
|
ARTICLE XV MISCELLANEOUS
|
35
|
Section 15.1 References to Declaration of Trust
|
35
|
Section 15.2 Costs and Expenses
|
35
|
Section 15.3 Ratification
|
36
|
Section 15.4 Ambiguity
|
36
|
Section 15.5 Inspection of Bylaws
|
36
|
Section 15.6 Election to be Subject to Part of Title 3, Subtitle 8
|
36
|
ARTICLE XVI ARBITRATION PROCEDURES FOR DISPUTES
|
36
|
Section 16.1 Procedures for Arbitration of Disputes
|
36
|
Section 16.2 Arbitrators
|
37
|
Section 16.3 Place of Arbitration
|
37
|
Section 16.4 Discovery
|
37
|
Section 16.5 Awards
|
38
|
Section 16.6 Costs and Expenses
|
38
|
Section 16.7 Appeals
|
38
|
Section 16.8 Final and Binding
|
38
|
Section 16.9 Beneficiaries
|
38
|
ARTICLE XVII EXCLUSIVE FORUM FOR CERTAIN DISPUTES
|
39
|
Section 17.1 Exclusive Forum
|
39
|
|
|
Three Months Ended March 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings (losses) of an investee
|
|
$
|
37,399
|
|
|
$
|
226,993
|
|
|
$
|
167,963
|
|
|
$
|
199,036
|
|
|
$
|
127,750
|
|
|
$
|
153,219
|
|
Fixed Charges
|
|
43,566
|
|
|
161,913
|
|
|
144,898
|
|
|
139,486
|
|
|
145,954
|
|
|
136,111
|
|
||||||
Adjusted Earnings
|
|
$
|
80,965
|
|
|
$
|
388,906
|
|
|
$
|
312,861
|
|
|
$
|
338,522
|
|
|
$
|
273,704
|
|
|
$
|
289,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest on indebtedness and amortization of debt issuance costs and debt discounts and premiums
|
|
$
|
43,566
|
|
|
$
|
161,913
|
|
|
$
|
144,898
|
|
|
$
|
139,486
|
|
|
$
|
145,954
|
|
|
$
|
136,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of Earnings to Fixed Charges
|
|
1.86x
|
|
|
2.40x
|
|
|
2.16x
|
|
|
2.43x
|
|
|
1.88x
|
|
|
2.13x
|
|
|
|
Three Months Ended March 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Income from continuing operations (including gains on sales of properties, if any) before income tax expense and equity in earnings (losses) of an investee
|
|
$
|
37,399
|
|
|
$
|
226,993
|
|
|
$
|
167,963
|
|
|
$
|
199,036
|
|
|
$
|
127,750
|
|
|
$
|
153,219
|
|
Fixed Charges
|
|
43,566
|
|
|
161,913
|
|
|
144,898
|
|
|
139,486
|
|
|
145,954
|
|
|
136,111
|
|
||||||
Adjusted Earnings
|
|
$
|
80,965
|
|
|
$
|
388,906
|
|
|
$
|
312,861
|
|
|
$
|
338,522
|
|
|
$
|
273,704
|
|
|
$
|
289,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest on indebtedness and amortization of debt issuance costs and debt discounts and premiums
|
|
$
|
43,566
|
|
|
$
|
161,913
|
|
|
$
|
144,898
|
|
|
$
|
139,486
|
|
|
$
|
145,954
|
|
|
$
|
136,111
|
|
Preferred distributions
|
|
1,435
|
|
|
20,664
|
|
|
20,664
|
|
|
20,664
|
|
|
26,559
|
|
|
40,145
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Combined Fixed Charges and Preferred distributions
|
|
$
|
45,001
|
|
|
$
|
182,577
|
|
|
$
|
165,562
|
|
|
$
|
160,150
|
|
|
$
|
172,513
|
|
|
$
|
176,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of Earnings to Fixed Charges and Preferred distributions
|
|
1.80x
|
|
|
2.13x
|
|
|
1.89x
|
|
|
2.11x
|
|
|
1.59x
|
|
|
1.64x
|
|
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: May 10, 2017
|
/s/ Barry M. Portnoy
|
|
Barry M. Portnoy
|
|
Managing Trustee
|
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: May 10, 2017
|
/s/ Adam D. Portnoy
|
|
Adam D. Portnoy
|
|
Managing Trustee
|
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: May 10, 2017
|
/s/ John G. Murray
|
|
John G. Murray
|
|
President and Chief Operating Officer
|
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: May 10, 2017
|
/s/ Mark L. Kleifges
|
|
Mark L. Kleifges
|
|
Chief Financial Officer and Treasurer
|
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
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
Date: May 10, 2017
|
|
|