Note 5.

Asset Dispositions and Impairments

During the three months ended June 30, 2016, we sold two foreign wholly-owned hotels for cash proceeds net of closing costs of approximately $206 million subject to long-term management agreements. The sales of these last remaining wholly-owned hotels in Italy resulted in a pre-tax gain of $112 million on the underlying net assets, which was more than offset by the recognition of a $202 million cumulative translation adjustment loss due to substantial liquidation of our investments in these foreign entities. These charges were recorded to the gain (loss) on asset dispositions and impairments, net line item, resulting in an overall net loss on the sale.

Additionally, during the six months ended June 30, 2016, we sold one hotel for cash proceeds net of closing costs of approximately $79 million subject to a long-term management agreement. The sale resulted in a pre-tax gain of approximately $5 million, which we deferred and are recognizing into management fees, franchise fees and other income over the initial term of the management agreement. Also, during the six months ended June 30, 2016, we recorded a net gain of $2 million, primarily related to the reduction of an obligation associated with a previous disposition.

During the three months ended June 30, 2015, we sold three wholly-owned hotels for cash proceeds net of closing costs of approximately $527 million. Two of these hotels were sold subject to long-term management agreements. The sale of these hotels resulted in pre-tax gains of approximately $240 million, which we deferred and are recognizing into management fees, franchise fees and other income over the initial term of the management agreements. The other hotel was sold subject to a long-term franchise agreement and resulted in a pre-tax gain of approximately $4 million, which we recorded in the gain (loss) on asset dispositions and impairments, net line item. These gains were partially offset by a loss of $4 million primarily related to asset dispositions and impairments associated with certain hotel renovations.

Additionally, during the six months ended June 30, 2015, we recorded a $17 million gain related to the sale of a minority partnership interest in a hotel, partially offset by a loss of $3 million, primarily related to asset dispositions and impairments associated with certain hotel renovations.