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Investment in Unconsolidated Joint Ventures
6 Months Ended
Jun. 30, 2013
Equity Method Investments and Joint Ventures [Abstract]  
Investment in Unconsolidated Joint Ventures
Investment in Unconsolidated Joint Ventures
    
Effective March 10, 2011, PIM Highland JV, a 28 hotel portfolio, became an investment in unconsolidated joint venture when we acquired a 71.74% common equity interest and a $25.0 million, or 50%, preferred equity interest earning an accrued but unpaid 15% annual return with priority over common equity distributions. Although we have majority ownership in PIM Highland JV, all major decisions related to the joint venture, including establishment of policies and operating procedures with respect to business affairs and incurring obligations and expenditures, are subject to the approval of an executive committee, which is comprised of four persons with us and our joint venture partner each designating two of those persons. As a result, we utilize the equity accounting method with respect to PIM Highland JV, which had a carrying value of $154.2 million and $158.7 million at June 30, 2013 and December 31, 2012, respectively.

Mortgage and mezzanine loans securing PIM Highland JV are non-recourse to the borrowers, except for customary exceptions or carve-outs that trigger recourse liability to the borrowers in certain limited instances. Recourse obligations typically include only the payment of costs and liabilities suffered by the lenders as a result of the occurrence of certain bad acts on the part of the borrower. However, in certain cases, the carve-outs could trigger recourse obligations on the part of the borrower with respect to repayment of all or a portion of the outstanding principal amount of the loans. We have entered into customary guaranty agreements pursuant to which we guaranty payment of any recourse liabilities of the borrowers that result from non-recourse carve-outs (which include, but are not limited to, fraud, misrepresentation, willful conduct resulting in waste, misappropriations of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral, and certain environmental liabilities). In the opinion of management, none of these guaranty agreements, either individually or in the aggregate, are likely to have a material adverse effect on our business, results of operations, or financial condition. 

The following tables summarize the consolidated balance sheets as of June 30, 2013 and December 31, 2012 and the consolidated statements of operations for the three and six months ended June 30, 2013 and 2012 of the PIM Highland JV (in thousands):

PIM Highland JV
Condensed Consolidated Balance Sheets
 
June 30,
2013
 
December 31,
2012
Total assets
$
1,416,682

 
$
1,417,204

 
 
 
 
Total liabilities
1,180,613

 
1,176,298

Members' equity
236,069

 
240,906

Total liabilities and members' equity
$
1,416,682

 
$
1,417,204

 
 
 
 
Our ownership interest in PIM Highland JV
$
154,173

 
$
158,694



PIM Highland JV
 
 
 
 
Condensed Consolidated Statements of Operations
 
 
 
 
 
 
 
 
 
 
 

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
Total revenue
$
118,263

 
$
112,802

 
$
220,536

 
$
206,054

Total expenses
(97,305
)
 
(95,169
)
 
(192,065
)
 
(185,236
)
Operating income
20,958

 
17,633

 
28,471

 
20,818

Interest income and other
23

 
33

 
41

 
64

Interest expense, amortization and write-offs of deferred loan costs, discounts and premiums and exit fees
(16,149
)
 
(15,886
)
 
(31,851
)
 
(31,411
)
Other expenses

 
(11
)
 

 
(64
)
Income tax expense
(782
)
 
(1,089
)
 
(1,498
)
 
(2,463
)
Net income (loss)
$
4,050

 
$
680

 
$
(4,837
)
 
$
(13,056
)
 
 
 
 
 
 
 
 
Our equity in earnings (loss) of PIM Highland JV
$
2,367

 
$
23

 
$
(4,521
)
 
$
(10,281
)


Additionally, as of June 30, 2013 and December 31, 2012, we had a 14.4% subordinated beneficial interest in a trust that holds the Four Seasons hotel property in Nevis, which had a zero carrying value.