4. Disposals and Discontinued Operations

Disposals

In June 2017, the Company sold the 199-room Marriott Park City located in Park City, Utah for net proceeds of $27.0 million. The Company recognized a net gain on the sale of $1.2 million. The sale did not represent a strategic shift that had a major impact on the Company’s business plan or its primary markets, and therefore, the sale of the hotel did not qualify as a discontinued operation.

In February 2017, the Company sold the 444-room Fairmont Newport Beach located in Newport Beach, California for net proceeds of $122.8 million. The Company recognized a net gain on the sale of $44.3 million. The sale did not represent a strategic shift that had a major impact on the Company’s business plan or its primary markets, and therefore, the sale of the hotel did not qualify as a discontinued operation. The Company classified the assets and liabilities of the Fairmont Newport Beach as held for sale as of December 31, 2016 as follows (in thousands):


	December 31,
	2016
Accounts receivable, net	$	452
Inventories		126
Prepaid expenses		386
Investment in hotel property, net		77,971
Other assets, net		178
Assets held for sale, net	$	79,113

Accounts payable and accrued expenses	$	781
Accrued payroll and employee benefits		751
Other current liabilities		1,473
Other liabilities		148
Liabilities of assets held for sale	$	3,153

The following table provides summary results of operations for the Marriott Park City and the Fairmont Newport Beach, as well as the Sheraton Cerritos that was sold during 2016, all of which are included in continuing operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenues	$	—	$	11,210	$	9,980	$	38,650
Income before income taxes	$	—	$	1,332	$	2,466	$	4,981
Gain on sale of assets	$	—	$	—	$	45,474	$	18,223

Discontinued Operations

During the third quarter of 2017, the Company recognized an additional $7.0 million gain related to its 2013 sale of four hotels and a laundry facility located in Rochester, Minnesota (the “Rochester Portfolio”). Upon sale of the Rochester Portfolio in 2013, the Company retained a liability not to exceed $14.0 million. The recognition of the $14.0 million liability reduced the Company’s gain on the sale of the Rochester Portfolio. In the second quarter of 2014, the Company was released from $7.0 million of its liability, and the Company recorded additional gain on the sale, which was included in discontinued operations. During the third quarter of 2017, the Company determined that its remaining obligation for the liability was remote based on the requirements of the Contingencies Topic of the FASB ASC. As such, the Company reversed the remaining $7.0 million, and recorded additional gain on the sale of the Rochester Portfolio of $7.0 million, which is included in discontinued operations for both the three and nine months ended September 30, 2017.