Discontinued Operations - Hotel Properties Held For Sale and Sold

3 Months Ended

Mar. 31, 2014

Discontinued Operations - Hotel Properties Held for Sale And Sold [Abstract]

Discontinued Operations - Hotel Properties Held for Sale And Sold

Discontinued Operations - Hotel Properties Held for Sale and Sold

At December 31, 2013, the Company had 19 hotels identified that it intends to sell and that met the Company’s criteria to be classified as held for sale (the “Sale Hotels”).  During the three months ended March 31, 2014, one hotel was sold, with no gain or loss.  The hotel sold was a Super 8 in Shawano, Wisconsin.  Due to changes in the market during the first quarter, one hotel was reclassified as held for sale, and an additional hotel was reclassified from held for sale to held for use. This brings the total number of hotels classified as held for sale to 18 as of March 31, 2014. A REIT will incur a 100% tax on the net income derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business.

We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the Internal Revenue Service would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

In accordance with FASB ASC 205-20 Presentation of Financial Statements – Discontinued Operations, gains, losses and impairment losses on hotel properties sold or classified as held for sale are presented in discontinued operations.The operating results of the hotels held for sale and sold are included in discontinued operations and are summarized below. The operating results for the three months ended March 31, 2014 include eighteen hotels held for sale and one hotel that was sold in the first quarter of 2014.  The operating results for the three months ended March 31, 2013 include eighteen hotels held for sale, one hotel that was sold in the first quarter of 2014 and seventeen hotels that were sold in 2013 (in thousands):

	Three Months Ended
	March 31,
	2014		2013
Revenues	$	3,754	$	6,283
Hotel and property operations expenses		(3,094)		(5,506)
Interest expense		(378)		(787)
Loss on debt extinguishment		0		(192)
Depreciation expense		(16)		(306)
Net gain on disposition of assets		168		(24)
Impairment loss		(91)		(507)
	$	343	$	(1,039)