Hotel Dispositions

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Hotel Dispositions

Hotel Dispositions

Effective January 1, 2014, we have adopted the provisions of Accounting Standards Update No. 2014-08 (the Update), under which the disposal of components of an entity are reported as discontinued operations only if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. These new provisions are applied prospectively only and, as such, hotels that were considered discontinued operations for the year ended December 31, 2013 and prior continue to be reported as discontinued operations in all periods presented.

During the first quarter, we sold two hotels, one of which was not previously held for sale. Additionally, as of March 31, 2014, we had one hotel held for sale. We designate a hotel as held for sale when the sale is probable within the next twelve months. We consider a sale to be probable when a buyer completes its due diligence review, we have an executed contract for sale, and we have received a substantial non-refundable deposit. Operations for these two hotels (the hotel sold not previously held for sale and the hotel held for sale as of March 31, 2014) are included in loss from continuing operations as shown in the Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 as disposition of these hotels does not represent a strategic shift in our business. The operations from these two components included income of $396,000 (of which $394,000 was attributable to FelCor) and a loss of $2,900 for the three months ended March 31, 2014 and 2013, respectively. The gain on the sale of the hotel not previously held for sale is reported in the accompanying statement of operations on a separate line item and is not included in continuing operations.

Discontinued operations include the results of operations for five hotels sold in 2013 and one hotel sold in 2014 (which was held for sale as of December 31, 2013). The following table summarizes the condensed financial information for those hotels (in thousands):

	Three Months Ended
	March 31,
	2014			2013
Hotel operating revenue	$	729		$	11,754
Operating expenses	(674		)	(10,706		)
Operating income from discontinued operations	55			1,048
Interest expense, net	(66		)	(198		)
Debt extinguishment	(245		)	—
Gain on sale of hotels, net	391			—
Income from discontinued operations	$	135		$	850