Discontinued Operations - Hotel Properties Held For Sale and Sold

6 Months Ended

Jun. 30, 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 first quarter of 2014, one hotel was sold, with no gain or loss.  Five hotels were sold during the three months ended June 30, 2014, with three hotels having no gain or loss and two hotels having gains totaling $0.5 million. 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. During the second quarter, three hotels were reclassified as held for sale due to changes in the market. This brings the total number of hotels classified as held for sale to 16 as of June 30, 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 June 30, 2014 include 16hotels held for sale and five hotels that were sold in the second quarter of 2014.  The operating results for the three months ended June 30, 2013 include 16hotels held for sale, one hotel that was sold in the first quarter of 2014, five hotels sold in the second quarter of 2014, and 15 hotels that were sold in 2013.

The operating results for the six months ended June 30, 2014 include 16 hotels held for sale and six hotels sold in 2014. The operating results for the six months ended June 30, 2013 include 16 hotels held for sale, 17 hotels sold in 2013, and six hotels sold in 2014 (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
Revenues	$	4,739	$	7,614	$	8,987	$	14,411
Hotel and property operations expenses		(3,484)		(6,119)		(7,104)		(12,120)
Interest expense		(348)		(767)		(799)		(1,658)
Loss on debt extinguishment		0		(491)		0		(683)
Depreciation expense		(38)		(310)		(112)		(680)
Net gain on disposition of assets		466		1,358		635		1,334
Impairment loss		(506)		(947)		(596)		(1,454)
	$	829	$	338	$	1,011	$	(850)