Hotel Dispositions

12 Months Ended

Dec. 31, 2015

Hotel Dispositions [Abstract]

Hotel Dispositions

NOTE 11 – HOTEL DISPOSITIONS

Effective January 1, 2014, we early adopted ASU Update No. 2014-08 concerning the classification and reporting of discontinued operations. This amendment defines discontinued operations as a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. As a result of the early adoption of ASU Update No. 2014-08, we anticipate that most of our hotel dispositions will not be classified as discontinued operations as most will not fit this definition.

For transactions that have been classified as held for sale or as discontinued operations for periods prior to our adoption of ASU Update No. 2014-08, we will continue to present the operating results as discontinued operations in the statements of operations for all applicable periods presented.

Disposed Assets

Hotel	Acquisition Date	Disposition Date		Consideration		Gain on Disposition
Hotel 373	June 2007	April 2014	$	37,000	$	7,195
2014 Total					$	7,195	(1)
Non-Core Portfolio II (12)	January 1999 - July 2010	December 2013	$	158,600	$	31,559	(2)
Holiday Inn Express, Camp Springs, MD	June 2008	September 2013		8,500		120	(3)
Comfort Inn, Harrisburg, PA	January 1999	June 2013		3,700		442
2013 Total						32,121

(1) The operations from this property included (loss) income of ($137) and $858 for the years ended December 31, 2014, and 2013, respectively.

(2) In September 2013, our Board of Trustees authorized management of the Company to sell this portfolio. On September 20, 2013, the Company entered into a purchase and sale agreement to dispose of a portfolio of 16 non-core hotel properties, for an aggregate purchase price of approximately $217,000.  The 16 non-core hotel properties in the portfolio were acquired by the Company between 1999 and 2010. We recorded an impairment loss of approximately $6,591 for those assets for which the anticipated net proceeds do not exceed the carrying value.

On December 20, 2013, the Company closed on the sale of 12 of these non-core hotel properties. As a result of entering into these purchase and sale agreements for the 16 non-core assets mentioned above, the operating results for the consolidated assets were reclassified to discontinued operations in the statement of operations for the years ended December 31, 2014 and 2013. The 12 assets were sold for a total sales price of $158,600, reduced the Company’s consolidated mortgage debt by $33,044 and generated a gain on sale of approximately $31,559.   In February 2014, the remaining 4 assets were sold for a total sales price of $58,400 and reduced the Company’s consolidated mortgage debt by $45,710. We recorded an impairment loss of approximately $1,800 for those assets for which the anticipated net proceeds did not exceed the carrying value.

(3) We recorded an impairment loss for this property of approximately $3,723 as the net proceeds did not exceed the carrying value.

NOTE 11 – HOTEL DISPOSITIONS (CONTINUED)

Assets Held for Sale

As of December 31, 2015 and 2014, we had no assets or liabilities related to assets held for sale.

The following table sets forth the components of discontinued operations for the years ended December 31, 2014 and 2013. Discontinued operations include the results of operations for hotels sold in 2013 and the first quarter of 2014.

		2014		2013
Revenue:
Hotel Operating Revenues	$	1,940	$	58,045
Total Revenues		1,940		58,045
Expenses:
Hotel Operating Expenses		1,151		35,158
Gain on Insurance Settlements		74		-
Real Estate and Personal Property Taxes and Property Insurance		91		3,316
General and Administrative		4		36
Depreciation and Amortization		1		7,050
Interest Expense		354		4,863
Other Expense		-		44
Income Tax Expense		2		190
Total Expenses		1,677		50,657
Income from Discontinued Operations	$	263	$	7,388

We allocate to income or loss from discontinued operations interest expense related to debt that is to be assumed or that is required to be repaid as a result of the disposal transaction.