NOTE 4: DISPOSITION OF HOTEL PROPERTIES AND DISCONTINUED OPERATIONS

As of December 31, 2017, the Company had three hotels classified as held for sale. At the beginning of 2017, the Company had seven hotels held for sale and during the year classified an additional four hotels as held for sale. Eight of these hotels were sold during 2017. 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 (excluding those subsequent reclassified as held for use), the last of which was sold in January 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations.

In 2017, 2016, and 2015, the Company sold eight hotels, 25 hotels, and 17 hotels, respectively, resulting in total gains of $7,049, $24,256, and $7,759, respectively, of which $7,049, $23,575, and $4,996, respectively, was included in continuing operations. As discussed further in the Subsequent Events footnote (see Note 17), subsequent to December 31, 2017, the Company closed on the disposition of two hotels.

Included in these 2015 sales were two hotels in Alexandria, Virginia that were sold on July 13, 2015 for a combined gross sales price of $19,000. These hotels represent a significant disposition, and as such, their operating results are disclosed. The Alexandria Comfort Inn and Days Inn hotels had a combined net loss of $665 for the year ended December 31, 2015. Net loss for the year ended December 31, 2015 includes impairment expense of $1,020 which was recognized following the hotels classification as held for sale. Loss attributable to noncontrolling interest related to these properties for the year ended December 31, 2015 was $3.

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 the disposal transaction. The following table sets forth the components of discontinued operations for the years ended December 31, 2016 and 2015:



	2016		2015

Revenue	$	6	$	2,923
Hotel and property operations expense		(4)		(1,946)
Net gain on dispositions of assets		681		2,997
Interest expense		(5)		(223)
Impairment recovery (loss)		-		121
	$	678	$	3,872

Capital expenditures	$	-	$	90