Disposition Of Hotel Properties And Discontinued Operations

6 Months Ended

Jun. 30, 2016

Disposition Of Hotel Properties And Discontinued Operations [Abstract]

Disposition Of Hotel Properties And Discontinued Operations

NOTE 3: DISPOSITIONS OF HOTEL PROPERTIES AND DISCONTINUED OPERATIONS

As of June 30, 2016, the Company had 17 hotels classified as held for sale. At March 31, 2016, the Company had 13 hotels held for sale and during the three months ended June 30, 2016 sold sevenproperties and classified 11 additional hotels as held for sale. At December 31, 2015, the Company had 16 hotels held for sale and during the six months ended June 30, 2016 sold 11 properties and classified 12 additional hotels as held for sale.  None of the hotels reclassified as held for sale since the Company’s adoption of ASU 2014-08 on October 1, 2014 represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.  As a result, only hotels classified as held for sale prior to October 1, 2014, one of which remains unsold at June 30, 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations. For the threemonths ended June 30, 2016 and 2015, the results of 37 and 46 hotels, respectively, were included in continuing operations and the results of one and six hotels, respectively, were included in discontinued operations.  For the six months ended June 30, 2016 and 2015, the results of 40 and 46 hotels, respectively, were included in continuing operations and the results of two and 10 hotels, respectively, were included in discontinued operations.

In the three months ended June 30, 2016 and 2015, the Company sold seven  and  threehotels, respectively, resulting in total gains of $8,886 and $727,respectively, of which $8,886 and $0, respectively, was included in continuing operations.  In the six months ended June 30, 2016 and 2015, the Company sold 11 and seven hotels, respectively, resulting in total gains of $12,945 and $1,666, respectively, of which $12,264 and $0, respectively, was included in continuing operations.

Two hotels in Alexandria, Virginia, which represent a significant disposition for which results are included in continuing operations, were sold on July 13, 2015.  For the three and six months ended June 30, 2015, the Alexandria Comfort Inn and Days Inn hotels had a combined net earnings (loss) of $81 and ($1,020), respectively, and earnings (loss) attributable to noncontrolling interest of $4 and $(117), respectively. These amounts include impairment expense of $447 and $1,309 that was recognized, in the three and six months ended June 30, 2015, respectively, following the hotels classification as held for sale in the first quarter of 2015.

The Company allocates interest expense to discontinued operations for debt that is to be assumed or that is required to be repaid as a result of disposal transactions. The following table sets forth the components of discontinued operations for the three and six months ended June 30, 2016 and 2015:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
Revenue	$	339	$	962	$	673	$	2,714
Hotel and property operations expense		(316)		(656)		(626)		(1,907)
Net gain on disposition of assets		(2)		725		678		1,662
Interest expense		(21)		(54)		(46)		(200)
Impairment (loss) recovery		-		75		-		120
Gain from discontinued operations, net of tax	$	-	$	1,052	$	679	$	2,389
Capital expenditures	$	1	$	17	$	3	$	44