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Commitments and Contingencies
9 Months Ended
Sep. 30, 2017
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 12: Commitments and Contingencies

 

In September 2017, Hurricanes Irma and Maria caused damage and disruption at certain of our hotels in Florida and our hotel in Puerto Rico. The majority of our hotels in Florida sustained minor damage and remained open, while our two hotels in Key West sustained moderate damage and disruption and were closed for several weeks.  Additionally, our one hotel in Puerto Rico sustained significant damage and the hotel currently remains closed.  Our insurance coverage provides us with reimbursement for the replacement cost for the damage to these hotels, which includes certain clean-up and repair costs, exceeding the applicable deductibles.  As of September 30, 2017, we had recognized a loss of $2 million resulting from these hurricanes included within other property-level operating expenses.  Although the total amount of the damage has not yet been determined, we anticipate an additional loss of $15 million to $20 million representing losses up to the amount of our deductibles and an estimate of uninsured losses. Any gain resulting from insurance proceeds, including those for business interruption, will not be recognized until all contingencies have been resolved.

As of September 30, 2017, we had outstanding commitments under third-party contracts of approximately $99 million for capital expenditures at certain owned and leased hotels. Our contracts contain clauses that allow us to cancel all or some portion of the work. If cancellation of a contract occurred, our commitment would be any costs incurred up to the cancellation date, in addition to any costs associated with the discharge of the contract.

We are involved in litigation arising from the normal course of business, some of which includes claims for substantial sums. While the ultimate results of claims and litigation cannot be predicted with certainty, we expect that the ultimate resolution of all pending or threatened claims and litigation as of September 30, 2017 will not have a material effect on our condensed combined consolidated results of operations, financial position or cash flows.