XML 32 R17.htm IDEA: XBRL DOCUMENT v3.22.0.1
Investments in Affiliates
 12 Months Ended
Dec. 31, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Affiliates Investments in Affiliates
The Company maintains equity method investments in affiliates related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. The Company has investments in affiliates that represent VIEs totaling $25.2 million and $56.9 million on the consolidated balance sheets at December 31, 2021 and 2020, respectively. The Company has determined that it is not the primary beneficiary of any of these VIEs, however it does exercise significant influence through its equity ownership and as a result the investment in these affiliates is accounted for under the equity method. The Company's maximum exposure to losses related to its investments in VIEs is limited to its equity investments as well as certain guaranties as described in Note 23 of these financial statements.
For the years ended December 31, 2021, 2020 and 2019, the Company recognized losses from investments in VIEs, inclusive of impairments and gains/losses upon sales of ownership interests in or distributions resulting from sales of underlying assets of affiliates, totaling $18.9 million, $15.4 million and $11.3 million, respectively. These amounts are classified as equity in net loss of affiliates in the consolidated statements of income and captured in the Hotel Franchising reportable segment in Note 20.
During the years ended December 31, 2021 and 2020, the Company recognized impairment charges of $19.3 million and $7.3 million, respectively, related to certain equity method investments. The Company estimated the fair value of each investment on an individual basis and derived the value from a combination of observable prices from offers received for either the underlying collateral or the ownership interest of the unconsolidated affiliate, comparable market transactions, and DCF techniques to project cash flows for the investment based upon the underlying property. There are judgments and assumptions in each of these fair value determinations, including our selection of comparable market transactions, the amount and timing of expected future cash flows, long-term growth rates, and sales capitalization rates. These nonrecurring fair value measurements are classified as level three of the fair value measurement hierarchy, as the Company utilized unobservable inputs which are significant to the overall fair value. Based on these analyses, in each case the Company determined that the fair market value declined below the carrying value and the decline is other-than-temporary. As a result, the Company recorded impairment charges from the carrying value to the estimated fair value for each investment. The Company recognized no impairment charges during the year ended December 31, 2019.
During the years ended December 31, 2021, 2020 and 2019, the Company recognized net gains (losses) upon sales of ownership interests in or distributions resulting from sales of underlying assets of affiliates of $6.9 million, $0.5 million, and $(5.0) million, respectively.
Investment in affiliate ownership interests at December 31, 2021 and 2020 are as follows:
Ownership Interest
December 31, 2021December 31, 2020
Main Street WP Hotel Associates, LLC50 %50 %
CS Hotel 30W46th, LLC (2)
— %25 %
CS Hotel West Orange, LLC50 %50 %
City Market Hotel Development, LLC43 %43 %
CS Woodlands, LLC50 %50 %
926 James M. Wood Boulevard, LLC75 %75 %
CS Dallas Elm, LLC (2)
— %45 %
Choice Hotels Canada, Inc. (1)
50 %50 %
Pine Street Long Beach LLC (2)
— %50 %
SY Valley Vineyard Resorts LLC (2)
— %50 %
CS Lakeside Santa Clara LLC50 %50 %
BL 219 Holdco, LP50 %50 %
Integrated 32 West Randolph LLC20 %20 %
(1) Non-VIE investments
(2) The Company sold its ownership interest in the equity method investment or received distributions resulting from the sale of underlying assets of the affiliate during 2021
The following tables present summarized financial information for all unconsolidated ventures in which the Company holds an investment in affiliate that is accounted for under the equity method:
Year Ended December 31,
(in thousands)202120202019
Revenues$35,514 $30,364 $109,896 
Operating (loss) income2,299 (6,494)12,617 
Income (loss) from continuing operations(5,227)(18,366)(1,400)
Net (loss) income(1,593)(18,977)(2,564)
As of December 31,
(in thousands)20212020
Current assets$31,209 $21,046 
Non-current assets242,567 364,531 
Total assets$273,776 $385,577 
Current liabilities$30,365 $25,735 
Non-current liabilities81,090 263,459 
Total liabilities$111,455 $289,194