Fair Value Measurements and Interest Rate Derivative Agreements (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Measurements and Interest Rate Derivative Agreements

Schedule of assets measured at fair value on a recurring and non-recurring basis

The following table presents the Company’s assets measured at fair value on a recurring and non-recurring basis at December 31, 2015 and 2014 (in thousands):

			Fair Value Measurements at Reporting Date
	Total		Level 1		Level 2		Level 3
December 31, 2015:
Interest rate cap derivative agreements	$	1	$	—	$	1	$	—
Interest rate swap derivative agreement		759		—		759		—
Life insurance policy (1)		964		—		964		—
Total assets at December 31, 2015	$	1,724	$	—	$	1,724	$	—
December 31, 2014:
Interest rate cap derivative agreements	$	—	$	—	$	—	$	—
Life insurance policy (1)		1,198		—		1,198		—
Total assets at December 31, 2014	$	1,198	$	—	$	1,198	$	—

(1) These amounts are included in other assets, net on the accompanying consolidated balance sheets, and will be used to reimburse the Company for payments made to the former associate from the related retirement benefit agreement, which is included in accrued payroll and employee benefits on the accompanying consolidated balance sheets.

Schedule of liabilities measured at fair value on a recurring and non-recurring basis

The following table presents the Company’s liabilities measured at fair value on a recurring and non-recurring basis at December 31, 2015 and 2014 (in thousands):

			Fair Value Measurements at Reporting Date
	Total		Level 1		Level 2		Level 3
December 31, 2015:
Interest rate swap derivative agreement	$	437	$	—	$	437	$	—
Retirement benefit agreement (1)		964		—		964		—
Total liabilities at December 31, 2015	$	1,401	$	—	$	1,401	$	—
December 31, 2014:
Retirement benefit agreement (1)	$	1,198	$	—	$	1,198	$	—

(1) The agreement calls for the balance of the retirement benefit agreement to be paid out to the former associate in 10 annual installments, beginning in 2011. As such, the Company has paid the former associate a total of $1.0 million through December 31, 2015, which was reimbursed to the Company using funds from the related split life insurance policy noted above. These amounts are included in accrued payroll and employee benefits in the accompanying consolidated balance sheets.

Schedule of Interest Rate Derivative Agreements

The Company’s interest rate derivative agreements consisted of the following at December 31, 2015 and 2014 (dollars in thousands):

		Strike / Capped			Effective	Maturity	Notional		Estimated Fair Value
Hedged Debt	Type	Rate		Index	Date	Date	Amount		2015		2014
Hilton San Diego Bayfront (1)	Cap	3.750	%	3-Month LIBOR	April 15, 2013	April 15, 2015	$	117,000	$	N/A	$	—
Hilton San Diego Bayfront (1)	Cap	4.250	%	1-Month LIBOR	April 15, 2015	May 1, 2017	$	112,827	$	1	$	N/A
Doubletree Guest Suites Times Square (1)	Cap	4.000	%	1-Month LIBOR	October 7, 2011	October 7, 2015	$	177,395	$	N/A	$	—
Term loan #1 (1)	Swap	3.391	%	1-Month LIBOR	October 29, 2015	September 2, 2022	$	85,000	$	759	$	N/A
Term loan #2 (2)	Swap	3.653	%	1-Month LIBOR	January 29, 2016	January 31, 2023	$	100,000	$	(437)	$	N/A
									$	323	$	—

(1) The fair values of the Hilton San Diego Bayfront cap agreement, the Doubletree Guest Suites Times Square cap agreement and the term loan #1 swap agreement are included in other assets, net on the accompanying consolidated balance sheets. The estimated fair value of the Hilton San Diego Bayfront cap agreement was de minimus at December 31, 2014. The Doubletree Guest Suites Times Square cap agreement was terminated in December 2015 upon the Company’s repayment of the related loan in conjunction with the Company’s sale of its interests in the hotel. The estimated fair value of the Doubletree Guest Suites Times Square cap agreement was de minimus at December 31, 2014. The 1-month LIBOR rate related to term loan #1 was swapped to a fixed rate of 1.591%.

(2) While the term loan #2 was not drawn until January 2016 (see Notes 7 and 15), the related interest rate swap agreement was purchased in December 2015. The estimated fair value of the term loan #2 interest rate swap agreement is included in other liabilities on the Company’s consolidated balance sheets. The 1-month LIBOR rate related to term loan #2 was swapped to a fixed rate of 1.853%.

Schedule of Gain Recognized on Interest Rate Derivative Agreements

Changes in the fair values of the Company’s interest rate derivative agreements resulted in decreases to interest expense for the years ended December 31, 2015, 2014 and 2013 as follows (in thousands):

	2015		2014		2013
Gain on derivatives, net	$	(309)	$	(529)	$	(525)