þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 86-1062192 | |
(State or other jurisdiction of incorporation or organization) | (IRS employer identification number) | |
14185 Dallas Parkway, Suite 1100 | ||
Dallas, Texas | 75254 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer | ¨ | Accelerated filer | þ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Common Stock, $0.01 par value per share | 97,430,297 | |
(Class) | Outstanding at August 4, 2017 |
June 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Investments in hotel properties, net | $ | 4,069,152 | $ | 4,160,563 | |||
Cash and cash equivalents | 404,435 | 347,091 | |||||
Restricted cash | 150,502 | 144,014 | |||||
Marketable securities | 19,270 | 53,185 | |||||
Accounts receivable, net of allowance of $740 and $690, respectively | 56,755 | 44,629 | |||||
Inventories | 4,413 | 4,530 | |||||
Investment in unconsolidated entities | 5,586 | 58,779 | |||||
Deferred costs, net | 2,913 | 2,846 | |||||
Prepaid expenses | 24,131 | 17,578 | |||||
Derivative assets, net | 1,607 | 3,614 | |||||
Other assets | 12,769 | 11,718 | |||||
Intangible assets, net | 10,002 | 10,061 | |||||
Due from Ashford Prime OP, net | 1 | — | |||||
Due from third-party hotel managers | 19,279 | 13,348 | |||||
Assets held for sale | — | 19,588 | |||||
Total assets | $ | 4,780,815 | $ | 4,891,544 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Indebtedness, net | $ | 3,698,433 | $ | 3,723,559 | |||
Accounts payable and accrued expenses | 147,025 | 126,986 | |||||
Dividends and distributions payable | 26,185 | 24,765 | |||||
Unfavorable management contract liabilities | 690 | 1,380 | |||||
Due to Ashford Inc., net | 13,593 | 15,716 | |||||
Due to Ashford Prime OP, net | — | 488 | |||||
Due to related party, net | 1,927 | 1,001 | |||||
Due to third-party hotel managers | 2,366 | 2,714 | |||||
Intangible liabilities, net | 16,017 | 16,195 | |||||
Derivative liabilities, net | 59 | — | |||||
Other liabilities | 18,468 | 16,548 | |||||
Liabilities related to assets held for sale | — | 37,047 | |||||
Total liabilities | 3,924,763 | 3,966,399 | |||||
Commitments and contingencies (note 13) | |||||||
Redeemable noncontrolling interests in operating partnership | 107,722 | 132,768 | |||||
Equity: | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized: | |||||||
Series A Cumulative Preferred Stock, 1,657,206 shares issued and outstanding at June 30, 2017 and December 31, 2016 | 17 | 17 | |||||
Series D Cumulative Preferred Stock, 9,468,706 shares issued and outstanding at June 30, 2017 and December 31, 2016 | 95 | 95 | |||||
Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at June 30, 2017 and December 31, 2016 | 48 | 48 | |||||
Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at June 30, 2017 and December 31, 2016 | 62 | 62 | |||||
Common stock, $0.01 par value, 400,000,000 shares authorized, 97,430,297 and 96,376,827 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 974 | 964 | |||||
Additional paid-in capital | 1,765,660 | 1,764,450 | |||||
Accumulated deficit | (1,019,264 | ) | (974,015 | ) | |||
Total stockholders’ equity of the Company | 747,592 | 791,621 | |||||
Noncontrolling interests in consolidated entities | 738 | 756 | |||||
Total equity | 748,330 | 792,377 | |||||
Total liabilities and equity | $ | 4,780,815 | $ | 4,891,544 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Rooms | $ | 311,205 | $ | 325,906 | $ | 587,910 | $ | 616,521 | |||||||
Food and beverage | 63,842 | 69,206 | 126,692 | 132,261 | |||||||||||
Other hotel revenue | 14,948 | 15,115 | 28,714 | 28,824 | |||||||||||
Total hotel revenue | 389,995 | 410,227 | 743,316 | 777,606 | |||||||||||
Other | 675 | 443 | 1,063 | 836 | |||||||||||
Total revenue | 390,670 | 410,670 | 744,379 | 778,442 | |||||||||||
Expenses | |||||||||||||||
Hotel operating expenses: | |||||||||||||||
Rooms | 65,034 | 67,193 | 124,907 | 130,295 | |||||||||||
Food and beverage | 42,276 | 45,419 | 84,446 | 88,520 | |||||||||||
Other expenses | 113,824 | 119,612 | 225,557 | 232,749 | |||||||||||
Management fees | 14,247 | 14,880 | 27,073 | 28,575 | |||||||||||
Total hotel expenses | 235,381 | 247,104 | 461,983 | 480,139 | |||||||||||
Property taxes, insurance, and other | 18,766 | 19,293 | 37,099 | 37,905 | |||||||||||
Depreciation and amortization | 60,547 | 60,079 | 125,245 | 122,241 | |||||||||||
Impairment charges | — | (116 | ) | — | (227 | ) | |||||||||
Transaction costs | 8 | (18 | ) | 11 | 77 | ||||||||||
Advisory services fee | 14,229 | 12,076 | 24,870 | 22,979 | |||||||||||
Corporate general and administrative | 3,254 | 2,785 | 8,424 | 4,458 | |||||||||||
Total expenses | 332,185 | 341,203 | 657,632 | 667,572 | |||||||||||
Operating income (loss) | 58,485 | 69,467 | 86,747 | 110,870 | |||||||||||
Equity in earnings (loss) of unconsolidated entities | (2,138 | ) | (287 | ) | (2,901 | ) | (3,872 | ) | |||||||
Interest income | 546 | 74 | 754 | 137 | |||||||||||
Gain (loss) on sale of hotel properties | 14,092 | 23,094 | 14,009 | 22,980 | |||||||||||
Other income (expense) | (146 | ) | (3,085 | ) | (3,266 | ) | (3,337 | ) | |||||||
Interest expense and amortization of premiums and loan costs | (54,956 | ) | (56,462 | ) | (110,261 | ) | (112,405 | ) | |||||||
Write-off of premiums, loan costs and exit fees | (1,575 | ) | (3,941 | ) | (1,629 | ) | (3,941 | ) | |||||||
Unrealized gain (loss) on marketable securities | (531 | ) | — | (3,877 | ) | — | |||||||||
Unrealized gain (loss) on derivatives | (1,743 | ) | 6,878 | (325 | ) | 13,796 | |||||||||
Income (loss) before income taxes | 12,034 | 35,738 | (20,749 | ) | 24,228 | ||||||||||
Income tax (expense) benefit | (1,606 | ) | (603 | ) | (760 | ) | (1,232 | ) | |||||||
Net income (loss) | 10,428 | 35,135 | (21,509 | ) | 22,996 | ||||||||||
(Income) loss from consolidated entities attributable to noncontrolling interest | (13 | ) | (6 | ) | 18 | 32 | |||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (231 | ) | (4,376 | ) | 6,262 | (2,264 | ) | ||||||||
Net income (loss) attributable to the Company | 10,184 | 30,753 | (15,229 | ) | 20,764 | ||||||||||
Preferred dividends | (10,956 | ) | (8,491 | ) | (21,912 | ) | (16,981 | ) | |||||||
Net income (loss) attributable to common stockholders | $ | (772 | ) | $ | 22,262 | $ | (37,141 | ) | $ | 3,783 | |||||
Income (loss) per share - basic and diluted: | |||||||||||||||
Basic: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (0.01 | ) | $ | 0.23 | $ | (0.40 | ) | $ | 0.04 | |||||
Weighted average common shares outstanding – basic | 95,320 | 94,474 | 95,086 | 94,309 | |||||||||||
Diluted: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (0.01 | ) | $ | 0.23 | $ | (0.40 | ) | $ | 0.04 | |||||
Weighted average common shares outstanding – diluted | 95,320 | 94,474 | 95,086 | 94,309 | |||||||||||
Dividends declared per common share | $ | 0.12 | $ | 0.12 | $ | 0.24 | $ | 0.24 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | 10,428 | $ | 35,135 | $ | (21,509 | ) | $ | 22,996 | ||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Total other comprehensive income (loss) | — | — | — | — | |||||||||||
Comprehensive income (loss) | 10,428 | 35,135 | (21,509 | ) | 22,996 | ||||||||||
Less: Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities | (13 | ) | (6 | ) | 18 | 32 | |||||||||
Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership | (231 | ) | (4,376 | ) | 6,262 | (2,264 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | 10,184 | $ | 30,753 | $ | (15,229 | ) | $ | 20,764 |
Preferred Stock | Additional Paid In Capital | Accumulated Deficit | Noncontrolling Interests In Consolidated Entities | Total | Redeemable Noncontrolling Interests in Operating Partnership | |||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series D | Series F | Series G | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2017 | 1,657 | $ | 17 | 9,469 | $ | 95 | 4,800 | $ | 48 | 6,200 | $ | 62 | 96,377 | $ | 964 | $ | 1,764,450 | $ | (974,015 | ) | $ | 756 | $ | 792,377 | $ | 132,768 | ||||||||||||||||||||||||||||
Purchases of common stock | — | — | — | — | — | — | — | — | (203 | ) | (2 | ) | (1,272 | ) | — | — | (1,274 | ) | — | |||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | — | — | — | — | 2,333 | — | — | 2,333 | 1,805 | |||||||||||||||||||||||||||||||||||||||
Forfeitures of restricted shares | — | — | — | — | — | — | — | — | (35 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares/units | — | — | — | — | — | — | — | — | 1,271 | 12 | (12 | ) | — | — | — | 94 | ||||||||||||||||||||||||||||||||||||||
Dividends declared - common shares | — | — | — | — | — | — | — | — | — | — | — | (23,531 | ) | — | (23,531 | ) | — | |||||||||||||||||||||||||||||||||||||
Dividends declared - preferred shares- Series A | — | — | — | — | — | — | — | — | — | — | — | (1,771 | ) | — | (1,771 | ) | — | |||||||||||||||||||||||||||||||||||||
Dividends declared - preferred shares- Series D | — | — | — | — | — | — | — | — | — | — | — | (10,001 | ) | — | (10,001 | ) | — | |||||||||||||||||||||||||||||||||||||
Dividends declared – preferred shares- Series F | — | — | — | — | — | — | — | — | — | — | — | (4,425 | ) | — | (4,425 | ) | — | |||||||||||||||||||||||||||||||||||||
Dividends declared – preferred shares- Series G | — | — | — | — | — | — | — | — | — | — | — | (5,715 | ) | — | (5,715 | ) | — | |||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (5,099 | ) | ||||||||||||||||||||||||||||||||||||||
Redemption/conversion of operating partnership units | — | — | — | — | — | — | — | — | 20 | — | 161 | — | — | 161 | (161 | ) | ||||||||||||||||||||||||||||||||||||||
Redemption value adjustment | — | — | — | — | — | — | — | — | — | — | — | 15,423 | — | 15,423 | (15,423 | ) | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | — | — | — | — | (15,229 | ) | (18 | ) | (15,247 | ) | (6,262 | ) | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2017 | 1,657 | $ | 17 | 9,469 | $ | 95 | 4,800 | $ | 48 | 6,200 | 62 | 97,430 | $ | 974 | $ | 1,765,660 | $ | (1,019,264 | ) | $ | 738 | $ | 748,330 | $ | 107,722 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Cash Flows from Operating Activities | |||||||
Net income (loss) | $ | (21,509 | ) | $ | 22,996 | ||
Adjustments to reconcile net income (loss) to net cash flow from operating activities: | |||||||
Depreciation and amortization | 125,245 | 122,241 | |||||
Impairment charges | — | (227 | ) | ||||
Amortization of intangibles | (119 | ) | (99 | ) | |||
Recognition of deferred income | (317 | ) | — | ||||
Bad debt expense | 681 | 693 | |||||
Deferred income tax expense (benefit) | (196 | ) | — | ||||
Equity in (earnings) loss of unconsolidated entities | 2,901 | 3,872 | |||||
(Gain) loss on sale of hotel properties, net | (14,009 | ) | (22,980 | ) | |||
Realized and unrealized (gain) loss on marketable securities | 4,003 | — | |||||
Purchases of marketable securities | (34,776 | ) | — | ||||
Sales of marketable securities | 64,688 | — | |||||
Net settlement of trading derivatives | (1,242 | ) | (560 | ) | |||
Payments for derivatives | — | (230 | ) | ||||
Realized and unrealized (gain) loss on derivatives | 3,858 | (11,074 | ) | ||||
Amortization of loan costs and premiums, write-off of premiums, loan costs and exit fees | 8,418 | 15,247 | |||||
Equity-based compensation | 4,138 | 3,326 | |||||
Changes in operating assets and liabilities, exclusive of effect of dispositions of hotel properties: | |||||||
Accounts receivable and inventories | (10,641 | ) | (13,646 | ) | |||
Prepaid expenses and other assets | (6,816 | ) | (13,370 | ) | |||
Accounts payable and accrued expenses | 17,387 | 15,553 | |||||
Due to/from related party | 830 | (4,019 | ) | ||||
Due to/from third-party hotel managers | (6,279 | ) | 5,314 | ||||
Due to/from Ashford Prime OP, net | (489 | ) | 513 | ||||
Due to/from Ashford Inc., net | (2,123 | ) | (2,520 | ) | |||
Other liabilities | 1,547 | 1,614 | |||||
Net cash provided by (used in) operating activities | 135,180 | 122,644 | |||||
Cash Flows from Investing Activities | |||||||
Investment in unconsolidated entity | (650 | ) | (2,000 | ) | |||
Proceeds from payments on note receivable | — | 123 | |||||
Acquisition of hotel properties and assets, net of cash acquired | (110 | ) | — | ||||
Improvements and additions to hotel properties | (110,057 | ) | (88,169 | ) | |||
Net proceeds from sales of assets/properties | 105,267 | 142,792 | |||||
Liquidation of AQUA U.S. Fund | 50,942 | — | |||||
Payments for initial franchise fees | (225 | ) | (30 | ) | |||
Proceeds from property insurance | 2,192 | 194 | |||||
Net cash provided by (used in) investing activities | 47,359 | 52,910 | |||||
Cash Flows from Financing Activities | |||||||
Borrowings on indebtedness | 180,800 | 37,500 | |||||
Repayments of indebtedness | (244,233 | ) | (105,888 | ) | |||
Payments for loan costs and exit fees | (5,790 | ) | (4,575 | ) | |||
Payments for dividends and distributions | (49,122 | ) | (45,432 | ) | |||
Purchases of common stock | (1,274 | ) | (734 | ) | |||
Payments for derivatives | (550 | ) | (73 | ) | |||
Other | 94 | 66 | |||||
Net cash provided by (used in) financing activities | (120,075 | ) | (119,136 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 62,464 | 56,418 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 492,473 | 368,758 | |||||
Cash, cash equivalents and restricted cash and at end of period | $ | 554,937 | $ | 425,176 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Supplemental Cash Flow Information | |||||||
Interest paid | $ | 103,159 | $ | 100,521 | |||
Income taxes paid | 1,455 | 1,312 | |||||
Supplemental Disclosure of Non-Cash Investing and Financing Activity | |||||||
Accrued but unpaid capital expenditures | $ | 12,818 | $ | 7,817 | |||
Dividends and distributions declared but not paid | 26,185 | 23,097 | |||||
Supplemental Disclosure of Cash, Cash Equivalents and Restricted Cash | |||||||
Cash and cash equivalents at beginning of period | $ | 347,091 | $ | 215,078 | |||
Cash and cash equivalents at beginning of period included in assets held for sale | 976 | — | |||||
Restricted cash at beginning of period | 144,014 | 153,680 | |||||
Restricted cash at beginning of period included in assets held for sale | 392 | — | |||||
Cash, cash equivalents and restricted cash at beginning of period | $ | 492,473 | $ | 368,758 | |||
Cash and cash equivalents at end of period | $ | 404,435 | $ | 261,821 | |||
Cash and cash equivalents at end of period included in assets held for sale | — | 155 | |||||
Restricted cash at end of period | 150,502 | 161,935 | |||||
Restricted cash at end of period included in assets held for sale | — | 1,265 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 554,937 | $ | 425,176 |
• | 120 consolidated hotel properties, including 118 directly owned and two owned through a majority-owned investment in a consolidated entity, which represent 25,055 total rooms (or 25,028 net rooms excluding those attributable to our partners); |
• | 87 hotel condominium units at WorldQuest Resort in Orlando, Florida (“WorldQuest”); |
• | a 29.6% ownership in Ashford Inc. common stock with a carrying value of $3.2 million and a fair value of $30.5 million; and |
• | a 15.35% ownership in OpenKey with a carrying value of $2.4 million. |
Hotel Property | Location | Type | Date | |||
5-hotel portfolio (1) | Various | Disposition | June 1, 2016 | |||
Hampton Inn & Suites | Gainesville, FL | Disposition | September 1, 2016 | |||
SpringHill Suites Gaithersburg | Gaithersburg, MD | Disposition | October 1, 2016 | |||
2-hotel portfolio (2) | Palm Desert, CA | Disposition | October 7, 2016 | |||
Renaissance | Portsmouth, Virginia | Disposition | February 1, 2017 | |||
Embassy Suites | Syracuse, New York | Disposition | March 6, 2017 | |||
Crowne Plaza Ravinia | Atlanta, Georgia | Disposition | June 29, 2017 |
June 30, 2017 | December 31, 2016 | ||||||
Land | $ | 657,144 | $ | 663,013 | |||
Buildings and improvements | 3,882,226 | 3,913,377 | |||||
Furniture, fixtures, and equipment | 423,459 | 434,091 | |||||
Construction in progress | 32,870 | 32,525 | |||||
Condominium properties | 11,817 | 11,558 | |||||
Total cost | 5,007,516 | 5,054,564 | |||||
Accumulated depreciation | (938,364 | ) | (894,001 | ) | |||
Investments in hotel properties, net | $ | 4,069,152 | $ | 4,160,563 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total hotel revenue | $ | 5,101 | $ | 24,293 | $ | 12,442 | $ | 53,411 | |||||||
Total hotel operating expenses | (3,647 | ) | (16,164 | ) | (9,544 | ) | (34,932 | ) | |||||||
Operating income (loss) | 1,454 | 8,129 | 2,898 | 18,479 | |||||||||||
Property taxes, insurance and other | (224 | ) | (1,267 | ) | (613 | ) | (2,531 | ) | |||||||
Depreciation and amortization | (1,217 | ) | (3,053 | ) | (2,588 | ) | (8,082 | ) | |||||||
Gain (loss) on sale of hotel properties | 14,092 | 23,094 | 14,009 | 23,094 | |||||||||||
Interest expense and amortization of loan costs | (896 | ) | (3,187 | ) | (2,361 | ) | (6,836 | ) | |||||||
Write-off of loan costs and exit fees | (44 | ) | (3,941 | ) | (98 | ) | (3,941 | ) | |||||||
Net income (loss) | 13,165 | 19,775 | 11,247 | 20,183 | |||||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (2,067 | ) | (2,763 | ) | (1,766 | ) | (2,820 | ) | |||||||
Net income (loss) attributable to the Company | $ | 11,098 | $ | 17,012 | $ | 9,481 | $ | 17,363 |
December 31, 2016 | |||
Assets | |||
Investments in hotel properties, net | $ | 17,232 | |
Cash and cash equivalents | 976 | ||
Restricted cash | 392 | ||
Accounts receivable | 305 | ||
Inventories | 96 | ||
Deferred costs, net | 4 | ||
Prepaid expenses | 309 | ||
Other assets | 274 | ||
Assets held for sale | $ | 19,588 | |
Liabilities | |||
Indebtedness, net | $ | 35,679 | |
Accounts payable and accrued expenses | 1,323 | ||
Due to related party, net | 45 | ||
Liabilities related to assets held for sale | $ | 37,047 |
June 30, 2017 | December 31, 2016 | ||||||
Total assets | $ | 79,465 | $ | 129,797 | |||
Total liabilities | $ | 45,003 | $ | 38,168 | |||
Redeemable noncontrolling interests | 1,766 | 1,480 | |||||
Total stockholders’ equity of Ashford Inc. | 32,093 | 37,377 | |||||
Noncontrolling interests in consolidated entities | 603 | 52,772 | |||||
Total equity | 32,696 | 90,149 | |||||
Total liabilities and equity | $ | 79,465 | $ | 129,797 | |||
Our ownership interest in Ashford Inc. | $ | 3,150 | $ | 5,873 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total revenue | $ | 19,639 | $ | 18,152 | $ | 32,652 | $ | 31,561 | |||||||
Total operating expenses | (18,221 | ) | (20,344 | ) | (33,370 | ) | (34,265 | ) | |||||||
Operating income (loss) | 1,418 | (2,192 | ) | (718 | ) | (2,704 | ) | ||||||||
Realized and unrealized gain (loss) on investment in unconsolidated entity, net | — | — | — | (1,460 | ) | ||||||||||
Realized and unrealized gain (loss) on investments, net | (16 | ) | 236 | (91 | ) | (5,448 | ) | ||||||||
Interest expense and loan amortization costs | (15 | ) | — | (15 | ) | — | |||||||||
Other income (expense) | 25 | 22 | 143 | (80 | ) | ||||||||||
Income tax (expense) benefit | (8,643 | ) | 655 | (9,273 | ) | 15 | |||||||||
Net income (loss) | (7,231 | ) | (1,279 | ) | (9,954 | ) | (9,677 | ) | |||||||
(Income) loss from consolidated entities attributable to noncontrolling interests | 190 | (182 | ) | 165 | 6,366 | ||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | 332 | 355 | 695 | 473 | |||||||||||
Net income (loss) attributable to Ashford Inc. | $ | (6,709 | ) | $ | (1,106 | ) | $ | (9,094 | ) | $ | (2,838 | ) | |||
Our equity in earnings (loss) of Ashford Inc. | $ | (2,014 | ) | $ | (355 | ) | $ | (2,723 | ) | $ | (874 | ) |
December 31, 2016 | |||
Total assets | $ | 55,022 | |
Total liabilities | $ | 2,311 | |
Partners’ capital | 52,711 | ||
Total liabilities and partners’ capital | $ | 55,022 | |
Our ownership interest in the AQUA U.S. Fund | $ | 50,890 |
Three Months Ended March 31, | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||
2017 | 2016 | 2016 | |||||||||
Total investment income | $ | 97 | $ | 34 | $ | 52 | |||||
Net expenses | 99 | (73 | ) | (262 | ) | ||||||
Net investment income (loss) | 196 | (39 | ) | (210 | ) | ||||||
Net unrealized gain (loss) on investments | 50 | (178 | ) | 940 | |||||||
Net realized gain (loss) on investments | (100 | ) | 470 | (6,331 | ) | ||||||
Net income (loss) attributable to the AQUA U.S. Fund | $ | 146 | $ | 253 | $ | (5,601 | ) | ||||
Our equity in earnings (loss) of the AQUA U.S. Fund | $ | 52 | $ | 184 | $ | (2,882 | ) |
Indebtedness | Collateral | Maturity | Interest Rate | June 30, 2017 | December 31, 2016 | ||||||||||
Mortgage loan (2) | 1 hotel | June 2017 | 5.98% | $ | — | $ | 15,729 | ||||||||
Mortgage loan (3) | 1 hotel | July 2017 | LIBOR (1) + 4.15% | 35,200 | 35,200 | ||||||||||
Mortgage loan (3) | 1 hotel | July 2017 | LIBOR (1) + 5.10% | 40,500 | 40,500 | ||||||||||
Mortgage loan (3) | 8 hotels | July 2017 | LIBOR (1) + 4.09% | 144,000 | 144,000 | ||||||||||
Mortgage loan (4) | 4 hotels | August 2017 | LIBOR (1) + 4.38% | 52,530 | 52,530 | ||||||||||
Mortgage loan (4) (5) (6) | 6 hotels | August 2017 | LIBOR (1) + 4.35% | 280,421 | 301,000 | ||||||||||
Mortgage loan (7) | 17 hotels | December 2017 | LIBOR (1) + 5.52% | 412,500 | 412,500 | ||||||||||
Mortgage loan (8) | 2 hotels | January 2018 | 4.44% | — | 105,047 | ||||||||||
Mortgage loan | 1 hotel | January 2018 | 4.38% | 95,202 | 96,169 | ||||||||||
Mortgage loan (9) | 8 hotels | January 2018 | LIBOR (1) + 4.95% | 376,800 | 376,800 | ||||||||||
Mortgage loan (10) | 5 hotels | February 2018 | LIBOR (1) + 4.75% | 200,000 | 200,000 | ||||||||||
Mortgage loan (11) | 1 hotel | April 2018 | LIBOR (1) + 4.95% | 33,300 | 33,300 | ||||||||||
Mortgage loan (12) (13) (14) (15) | 22 hotels | April 2018 | LIBOR (1) + 4.39% | 971,654 | 1,070,560 | ||||||||||
Mortgage loan (16) | 1 hotel | May 2018 | LIBOR (1) + 5.10% | 25,100 | 25,100 | ||||||||||
Mortgage loan (17) | 1 hotel | June 2018 | LIBOR (1) + 5.10% | 43,750 | 43,750 | ||||||||||
Mortgage loan (18) | 1 hotel | August 2018 | LIBOR (1) + 4.95% | 12,000 | 1 | 12,000 | |||||||||
Mortgage loan (7) | 18 hotels | October 2018 | LIBOR (1) + 4.55% | 450,000 | 450,000 | ||||||||||
Mortgage loan | 1 hotel | July 2019 | 4.00% | 5,386 | 5,436 | ||||||||||
Mortgage loan (2) | 1 hotel | May 2020 | LIBOR (1) + 2.90% | 16,100 | — | ||||||||||
Mortgage loan | 1 hotel | November 2020 | 6.26% | 96,045 | 96,873 | ||||||||||
Mortgage loan (8) | 2 hotels | June 2022 | LIBOR (1) + 3.00% | 164,700 | — | ||||||||||
Mortgage loan | 1 hotel | May 2023 | 5.46% | 54,239 | 54,685 | ||||||||||
Mortgage loan | 1 hotel | January 2024 | 5.49% | 7,055 | 7,111 | ||||||||||
Mortgage loan | 1 hotel | January 2024 | 5.49% | 10,297 | 10,378 | ||||||||||
Mortgage loan | 1 hotel | May 2024 | 4.99% | 6,586 | 6,641 | ||||||||||
Mortgage loan | 2 hotels | August 2024 | 4.85% | 12,333 | 12,427 | ||||||||||
Mortgage loan | 3 hotels | August 2024 | 4.90% | 24,651 | 24,836 | ||||||||||
Mortgage loan | 3 hotels | August 2024 | 5.20% | 66,681 | 67,164 | ||||||||||
Mortgage loan | 2 hotels | February 2025 | 4.45% | 20,393 | 20,575 | ||||||||||
Mortgage loan | 3 hotels | February 2025 | 4.45% | 52,748 | 53,293 | ||||||||||
3,710,171 | 3,773,604 | ||||||||||||||
Premiums, net | 1,941 | 3,523 | |||||||||||||
Deferred loan costs, net | (13,679 | ) | (17,889 | ) | |||||||||||
$ | 3,698,433 | $ | 3,759,238 | ||||||||||||
Indebtedness related to assets held for sale (14) | 1 hotel | April 2017 | LIBOR (1) + 4.39% | — | 16,080 | ||||||||||
Indebtedness related to assets held for sale (6) | 1 hotel | August 2017 | LIBOR (1) + 4.35% | — | 19,599 | ||||||||||
Indebtedness, net | $ | 3,698,433 | $ | 3,723,559 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income (loss) allocated to common stockholders: | |||||||||||||||
Income (loss) attributable to the Company | $ | 10,184 | $ | 30,753 | $ | (15,229 | ) | $ | 20,764 | ||||||
Less: Dividends on preferred stock | (10,956 | ) | (8,491 | ) | (21,912 | ) | (16,981 | ) | |||||||
Less: Dividends on common stock | (11,439 | ) | (11,340 | ) | (22,877 | ) | (22,673 | ) | |||||||
Less: Dividends on unvested performance stock units | (98 | ) | (40 | ) | (196 | ) | (80 | ) | |||||||
Less: Dividends on unvested restricted shares | (253 | ) | (203 | ) | (458 | ) | (351 | ) | |||||||
Less: Undistributed income allocated to unvested performance stock units | — | (6 | ) | — | — | ||||||||||
Less: Undistributed income allocated to unvested shares | — | (187 | ) | — | — | ||||||||||
Undistributed income (loss) | (12,562 | ) | 10,486 | (60,672 | ) | (19,321 | ) | ||||||||
Add back: Dividends on common stock | 11,439 | 11,340 | 22,877 | 22,673 | |||||||||||
Distributed and undistributed income (loss) - basic and diluted | $ | (1,123 | ) | $ | 21,826 | $ | (37,795 | ) | $ | 3,352 | |||||
Weighted average shares outstanding: | |||||||||||||||
Weighted average common shares outstanding - basic and diluted | 95,320 | 94,474 | 95,086 | 94,309 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
Net income (loss) allocated to common stockholders per share | $ | (0.01 | ) | $ | 0.23 | $ | (0.40 | ) | $ | 0.04 | |||||
Diluted income (loss) per share: | |||||||||||||||
Net income (loss) allocated to common stockholders per share | $ | (0.01 | ) | $ | 0.23 | $ | (0.40 | ) | $ | 0.04 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income (loss) allocated to common stockholders is not adjusted for: | |||||||||||||||
Income (loss) allocated to unvested restricted shares | $ | 253 | $ | 390 | $ | 458 | $ | 351 | |||||||
Income (loss) allocated to unvested performance stock units | 98 | 46 | 196 | 80 | |||||||||||
Income (loss) attributable to noncontrolling interest in operating partnership units | 231 | 4,376 | (6,262 | ) | 2,264 | ||||||||||
Total | $ | 582 | $ | 4,812 | $ | (5,608 | ) | $ | 2,695 | ||||||
Weighted average diluted shares are not adjusted for: | |||||||||||||||
Effect of unvested restricted shares | 366 | 396 | 242 | 262 | |||||||||||
Effect of unvested performance stock units | 2 | 30 | 21 | 15 | |||||||||||
Effect of assumed conversion of operating partnership units | 17,284 | 18,844 | 17,274 | 18,943 | |||||||||||
Effect of incentive fee shares | 285 | — | 292 | — | |||||||||||
Total | 17,937 | 19,270 | 17,829 | 19,220 |
• | Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. |
• | Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. |
• | Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. |
Quoted Market Prices (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Counterparty and Cash Collateral Netting(1) | Total | |||||||||||||||||
June 30, 2017: | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||
Interest rate derivatives - floors | $ | — | $ | 416 | $ | — | $ | — | $ | 416 | (2) | ||||||||||
Interest rate derivatives - caps | — | 57 | — | — | 57 | (2) | |||||||||||||||
Credit default swaps | — | 843 | — | 291 | $ | 1,134 | (2) | ||||||||||||||
— | 1,316 | — | 291 | 1,607 | |||||||||||||||||
Non-derivative assets: | |||||||||||||||||||||
Equity securities | 19,270 | — | — | — | 19,270 | (3) | |||||||||||||||
Total | $ | 19,270 | $ | 1,316 | $ | — | $ | 291 | $ | 20,877 | |||||||||||
Liabilities | |||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||
Credit default swaps | — | 741 | — | (800 | ) | (59 | ) | (4) | |||||||||||||
Net | $ | 19,270 | $ | 2,057 | $ | — | $ | (509 | ) | $ | 20,818 | ||||||||||
December 31, 2016: | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||
Interest rate derivatives - floors | $ | — | $ | 2,358 | $ | — | $ | — | $ | 2,358 | (2) | ||||||||||
Interest rate derivatives - caps | — | 24 | — | — | 24 | (2) | |||||||||||||||
Credit default swaps | — | 2,867 | — | (1,751 | ) | 1,116 | (2) | ||||||||||||||
Options on futures contracts | 116 | — | — | — | 116 | (2) | |||||||||||||||
116 | 5,249 | — | (1,751 | ) | 3,614 | ||||||||||||||||
Non-derivative assets: | |||||||||||||||||||||
Equity securities | 53,185 | — | — | — | 53,185 | (3) | |||||||||||||||
Total | $ | 53,301 | $ | 5,249 | $ | — | $ | (1,751 | ) | $ | 56,799 |
Gain (Loss) Recognized in Income | ||||||||
Three Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Derivative assets: | ||||||||
Interest rate derivatives - floors | $ | (305 | ) | $ | 5,281 | |||
Interest rate derivatives - caps | (217 | ) | (83 | ) | ||||
Credit default swaps | (802 | ) | (4) | (888 | ) | (4) | ||
Options on futures contracts | (38 | ) | (154 | ) | ||||
(1,362 | ) | 4,156 | ||||||
Non-derivative assets: | ||||||||
Equity | (657 | ) | — | |||||
Total | (2,019 | ) | 4,156 | |||||
Liabilities | ||||||||
Derivative liabilities: | ||||||||
Credit default swaps | (611 | ) | (4) | — | ||||
Net | $ | (2,630 | ) | $ | 4,156 | |||
Total combined | ||||||||
Interest rate derivatives - floors | $ | (305 | ) | $ | 5,281 | |||
Interest rate derivatives - caps | (217 | ) | (83 | ) | ||||
Credit default swaps | (1,413 | ) | 1,834 | |||||
Options on futures contracts | 192 | (154 | ) | |||||
Unrealized gain (loss) on derivatives | (1,743 | ) | (1) | 6,878 | (1) | |||
Realized gain (loss) on credit default swaps | — | (2) (4) | (2,722 | ) | (2) (4) | |||
Realized gain (loss) on options on futures contracts | (230 | ) | (2) | — | ||||
Unrealized gain (loss) on marketable securities | (531 | ) | (3) | — | ||||
Realized gain (loss) on marketable securities | (126 | ) | (2) | — | ||||
Net | $ | (2,630 | ) | $ | 4,156 |
Gain (Loss) Recognized in Income | ||||||||
Six Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Derivative assets: | ||||||||
Interest rate derivatives - floors | $ | (1,942 | ) | $ | 12,982 | |||
Interest rate derivatives - caps | (517 | ) | (420 | ) | ||||
Credit default swaps | (720 | ) | (4) | (1,373 | ) | (4) | ||
Options on futures contracts | (116 | ) | (115 | ) | ||||
(3,295 | ) | 11,074 | ||||||
Non-derivative assets: | ||||||||
Equity | (4,003 | ) | — | |||||
Total | (7,298 | ) | 11,074 | |||||
Liabilities | ||||||||
Derivative liabilities: | ||||||||
Credit default swaps | (563 | ) | (4) | — | (4) | |||
Net | $ | (7,861 | ) | $ | 11,074 | |||
Total combined | ||||||||
Interest rate derivatives - floors | $ | (1,942 | ) | $ | 12,982 | |||
Interest rate derivatives - caps | (517 | ) | (420 | ) | ||||
Credit default swaps | 1,707 | 1,349 | ||||||
Options on futures contracts | 427 | (115 | ) | |||||
Unrealized gain (loss) on derivatives | (325 | ) | (1) | 13,796 | (1) | |||
Realized gain (loss) on credit default swaps | (2,990 | ) | (2) (4) | (2,722 | ) | |||
Realized gain (loss) on options on futures contracts | (543 | ) | (2) | — | ||||
Unrealized gain (loss) on marketable securities | (3,877 | ) | (3) | — | ||||
Realized gain (loss) on marketable securities | (126 | ) | (2) | — | ||||
Net | $ | (7,861 | ) | $ | 11,074 | |||
June 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Financial assets and liabilities measured at fair value: | |||||||||||||||
Marketable securities | $ | 19,270 | $ | 19,270 | $ | 53,185 | $ | 53,185 | |||||||
Derivative assets, net | 1,607 | 1,607 | 3,614 | 3,614 | |||||||||||
Derivative liabilities, net | 59 | 59 | — | — | |||||||||||
Financial assets not measured at fair value: | |||||||||||||||
Cash and cash equivalents (1) | $ | 404,435 | $ | 404,435 | $ | 348,067 | $ | 348,067 | |||||||
Restricted cash (1) | 150,502 | 150,502 | 144,406 | 144,406 | |||||||||||
Accounts receivable, net (1) | 56,755 | 56,755 | 44,934 | 44,934 | |||||||||||
Due from Ashford Prime OP, net | 1 | 1 | — | — | |||||||||||
Due from third-party hotel managers | 19,279 | 19,279 | 13,348 | 13,348 | |||||||||||
Financial liabilities not measured at fair value: | |||||||||||||||
Indebtedness (1) | $ | 3,710,171 | $3,549,849 to $3,923,520 | $ | 3,777,127 | $3,600,691 to $3,979,713 | |||||||||
Accounts payable and accrued expenses (1) | 147,025 | 147,025 | 128,309 | 128,309 | |||||||||||
Dividends and distributions payable | 26,185 | 26,185 | 24,765 | 24,765 | |||||||||||
Due to Ashford Inc., net | 13,593 | 13,593 | 15,716 | 15,716 | |||||||||||
Due to Ashford Prime OP, net | — | — | 488 | 488 | |||||||||||
Due to related party, net (1) | 1,927 | 1,927 | 1,046 | 1,046 | |||||||||||
Due to third-party hotel managers | 2,366 | 2,366 | 2,714 | 2,714 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Advisory services fee | |||||||||||||||
Base advisory fee | $ | 8,639 | $ | 8,726 | $ | 17,355 | $ | 17,266 | |||||||
Reimbursable expenses (1) | 2,637 | 1,602 | 4,159 | 3,065 | |||||||||||
Equity-based compensation (2) | 2,953 | 1,748 | 3,356 | 2,648 | |||||||||||
Total advisory services fee | $ | 14,229 | $ | 12,076 | $ | 24,870 | $ | 22,979 |
(1) | Reimbursable expenses include overhead, internal audit, insurance claims advisory and asset management services. |
(2) | Equity-based compensation is associated with equity grants of Ashford Trust’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC. |
• | our business and investment strategy, including our ability to complete proposed business transactions described herein or the expected benefit of any such transactions; |
• | anticipated or expected purchases or sales of assets; |
• | our projected operating results; |
• | completion of any pending transactions; |
• | our ability to obtain future financing arrangements; |
• | our understanding of our competition; |
• | market trends; |
• | projected capital expenditures; and |
• | the impact of technology on our operations and business. |
• | factors discussed in our Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on March 16, 2017, including those set forth under the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “Properties,” as updated in our subsequent Quarterly Reports on Form 10-Q; |
• | general and economic business conditions affecting the lodging and travel industry; |
• | general volatility of the capital markets and the market price of our common and preferred stock; |
• | changes in our business or investment strategy; |
• | availability, terms, and deployment of capital; |
• | availability of qualified personnel to our advisor; |
• | changes in our industry and the market in which we operate, interest rates, or local economic conditions; |
• | the degree and nature of our competition; |
• | actual and potential conflicts of interest with our advisor, Remington Lodging & Hospitality, LLC, our executive officers and our non-independent directors; |
• | changes in governmental regulations, accounting rules, tax rates and similar matters; |
• | legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended, and related rules, regulations and interpretations governing the taxation of REITs; and |
• | limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes. |
• | acquisition of hotel properties that are consistent with our investment strategy; |
• | disposition of non-core hotel properties; |
• | pursuing capital market activities to enhance long-term stockholder value; |
• | maintaining adequate liquidity; |
• | implementing selective capital improvements designed to increase profitability; |
• | implementing effective asset management strategies to minimize operating costs and increase revenues; |
• | financing or refinancing hotels on competitive terms; |
• | utilizing hedges and derivatives to mitigate risks; |
• | making other investments or divestitures that our board of directors deems appropriate; and |
• | maximizing stockholder returns via capital appreciation and dividends. |
Three Months Ended June 30, | Favorable/ (Unfavorable) Change | Six Months Ended June 30, | Favorable/ (Unfavorable) Change | ||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Total revenue | $ | 390,670 | $ | 410,670 | $ | (20,000 | ) | $ | 744,379 | $ | 778,442 | $ | (34,063 | ) | |||||||||
Total hotel operating expenses | (235,381 | ) | (247,104 | ) | 11,723 | (461,983 | ) | (480,139 | ) | 18,156 | |||||||||||||
Property taxes, insurance and other | (18,766 | ) | (19,293 | ) | 527 | (37,099 | ) | (37,905 | ) | 806 | |||||||||||||
Depreciation and amortization | (60,547 | ) | (60,079 | ) | (468 | ) | (125,245 | ) | (122,241 | ) | (3,004 | ) | |||||||||||
Impairment charges | — | 116 | (116 | ) | — | 227 | (227 | ) | |||||||||||||||
Transaction costs | (8 | ) | 18 | (26 | ) | (11 | ) | (77 | ) | 66 | |||||||||||||
Advisory services fee | (14,229 | ) | (12,076 | ) | (2,153 | ) | (24,870 | ) | (22,979 | ) | (1,891 | ) | |||||||||||
Corporate general and administrative | (3,254 | ) | (2,785 | ) | (469 | ) | (8,424 | ) | (4,458 | ) | (3,966 | ) | |||||||||||
Operating income (loss) | 58,485 | 69,467 | (10,982 | ) | 86,747 | 110,870 | (24,123 | ) | |||||||||||||||
Equity in earnings (loss) of unconsolidated entities | (2,138 | ) | (287 | ) | (1,851 | ) | (2,901 | ) | (3,872 | ) | 971 | ||||||||||||
Interest income | 546 | 74 | 472 | 754 | 137 | 617 | |||||||||||||||||
Gain (loss) on sale of hotel properties | 14,092 | 23,094 | (9,002 | ) | 14,009 | 22,980 | (8,971 | ) | |||||||||||||||
Other income (expense) | (146 | ) | (3,085 | ) | 2,939 | (3,266 | ) | (3,337 | ) | 71 | |||||||||||||
Interest expense and amortization of loan costs | (54,956 | ) | (56,462 | ) | 1,506 | (110,261 | ) | (112,405 | ) | 2,144 | |||||||||||||
Write-off of premiums, loan costs and exit fees | (1,575 | ) | (3,941 | ) | 2,366 | (1,629 | ) | (3,941 | ) | 2,312 | |||||||||||||
Unrealized gain (loss) on marketable securities | (531 | ) | — | (531 | ) | (3,877 | ) | — | (3,877 | ) | |||||||||||||
Unrealized gain (loss) on derivatives | (1,743 | ) | 6,878 | (8,621 | ) | (325 | ) | 13,796 | (14,121 | ) | |||||||||||||
Income tax (expense) benefit | (1,606 | ) | (603 | ) | (1,003 | ) | (760 | ) | (1,232 | ) | 472 | ||||||||||||
Net income (loss) | 10,428 | 35,135 | (24,707 | ) | (21,509 | ) | 22,996 | (44,505 | ) | ||||||||||||||
(Income) loss from consolidated entities attributable to noncontrolling interests | (13 | ) | (6 | ) | (7 | ) | 18 | 32 | (14 | ) | |||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (231 | ) | (4,376 | ) | 4,145 | 6,262 | (2,264 | ) | 8,526 | ||||||||||||||
Net income (loss) attributable to the Company | $ | 10,184 | $ | 30,753 | $ | (20,569 | ) | $ | (15,229 | ) | $ | 20,764 | $ | (35,993 | ) |
Hotel Property | Location | Type | Date | |||
5-hotel portfolio (1) | Various | Disposition | June 1, 2016 | |||
Hampton Inn & Suites (1) | Gainesville, FL | Disposition | September 1, 2016 | |||
SpringHill Suites Gaithersburg (1) | Gaithersburg, MD | Disposition | October 1, 2016 | |||
2-hotel portfolio (1) | Palm Desert, CA | Disposition | October 7, 2016 | |||
Renaissance (1) | Portsmouth, Virginia | Disposition | February 1, 2017 | |||
Embassy Suites (1) | Syracuse, New York | Disposition | March 6, 2017 | |||
Crowne Plaza Ravinia (1) | Atlanta, Georgia | Disposition | June 29, 2017 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
RevPAR (revenue per available room) | $ | 132.78 | $ | 129.14 | $ | 125.52 | $ | 121.16 | |||||||
Occupancy | 81.38 | % | 81.72 | % | 77.99 | % | 78.04 | % | |||||||
ADR (average daily rate) | $ | 163.16 | $ | 158.03 | $ | 160.94 | $ | 155.25 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
RevPAR (revenue per available room) | $ | 133.63 | $ | 132.94 | $ | 126.56 | $ | 124.24 | |||||||
Occupancy | 81.54 | % | 82.16 | % | 78.21 | % | 78.11 | % | |||||||
ADR (average daily rate) | $ | 163.88 | $ | 161.80 | $ | 161.82 | $ | 159.05 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | 10,428 | $ | 35,135 | $ | (21,509 | ) | $ | 22,996 | ||||||
(Income) loss from consolidated entities attributable to noncontrolling interest | (13 | ) | (6 | ) | 18 | 32 | |||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (231 | ) | (4,376 | ) | 6,262 | (2,264 | ) | ||||||||
Net income (loss) attributable to the Company | 10,184 | 30,753 | (15,229 | ) | 20,764 | ||||||||||
Interest income | (546 | ) | (74 | ) | (754 | ) | (137 | ) | |||||||
Interest expense and amortization of premiums and loan costs, net | 54,928 | 56,434 | 110,204 | 112,347 | |||||||||||
Depreciation and amortization | 60,487 | 60,018 | 125,122 | 122,119 | |||||||||||
Income tax expense (benefit) | 1,604 | 603 | 756 | 1,232 | |||||||||||
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership | 231 | 4,376 | (6,262 | ) | 2,264 | ||||||||||
Equity in (earnings) loss of unconsolidated entities | 2,138 | 355 | 2,953 | 874 | |||||||||||
Company's portion of EBITDA of unconsolidated entities (Ashford Inc.) | 720 | (487 | ) | 336 | (372 | ) | |||||||||
Company's portion of EBITDA of unconsolidated entities (OpenKey) | (124 | ) | — | (248 | ) | — | |||||||||
EBITDA available to the Company and OP unitholders | 129,622 | 151,978 | 216,878 | 259,091 | |||||||||||
Amortization of unfavorable contract liabilities | (404 | ) | (494 | ) | (788 | ) | (988 | ) | |||||||
Impairment charges | — | (116 | ) | — | (227 | ) | |||||||||
(Gain) loss on sale of hotel properties | (14,092 | ) | (23,094 | ) | (14,009 | ) | (22,980 | ) | |||||||
Write-off of premiums, loan costs and exit fees | 1,575 | 3,941 | 1,629 | 3,941 | |||||||||||
Other (income) expense | 146 | 3,085 | 3,266 | 3,337 | |||||||||||
Transaction, acquisition and management conversion costs | 892 | 427 | 3,568 | 645 | |||||||||||
Legal judgment and related legal costs | 263 | 24 | 4,064 | 48 | |||||||||||
Unrealized (gain) loss on marketable securities | 531 | — | 3,877 | — | |||||||||||
Unrealized (gain) loss on derivatives | 1,743 | (6,878 | ) | 325 | (13,796 | ) | |||||||||
Dead deal costs | — | 304 | 4 | 301 | |||||||||||
Software implementation costs | 1,034 | — | 1,034 | — | |||||||||||
Non-cash stock/unit-based compensation | 3,710 | 2,342 | 4,138 | 3,326 | |||||||||||
Company's portion of (gain) loss of AQUA U.S. Fund | — | (68 | ) | (52 | ) | 2,998 | |||||||||
Company's portion of adjustments to EBITDA of unconsolidated entities (Ashford Inc.) | 504 | 1,388 | 2,387 | 2,136 | |||||||||||
Company's portion of adjustments to EBITDA of unconsolidated entities (OpenKey) | 1 | — | 2 | — | |||||||||||
Adjusted EBITDA available to the Company and OP unitholders | $ | 125,525 | $ | 132,839 | $ | 226,323 | $ | 237,832 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | 10,428 | $ | 35,135 | $ | (21,509 | ) | $ | 22,996 | ||||||
(Income) loss from consolidated entities attributable to noncontrolling interest | (13 | ) | (6 | ) | 18 | 32 | |||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (231 | ) | (4,376 | ) | 6,262 | (2,264 | ) | ||||||||
Preferred dividends | (10,956 | ) | (8,491 | ) | (21,912 | ) | (16,981 | ) | |||||||
Net income (loss) attributable to common stockholders | (772 | ) | 22,262 | (37,141 | ) | 3,783 | |||||||||
Depreciation and amortization of real estate | 60,487 | 60,018 | 125,122 | 122,119 | |||||||||||
(Gain) loss on sale of hotel properties | (14,092 | ) | (23,094 | ) | (14,009 | ) | (22,980 | ) | |||||||
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership | 231 | 4,376 | (6,262 | ) | 2,264 | ||||||||||
Equity in (earnings) loss of unconsolidated entities | 2,138 | 355 | 2,953 | 874 | |||||||||||
Company's portion of FFO of unconsolidated entities (Ashford Inc.) | (2,014 | ) | (357 | ) | (2,723 | ) | (512 | ) | |||||||
Company's portion of FFO of unconsolidated entities (OpenKey) | (125 | ) | — | (250 | ) | — | |||||||||
FFO available to common stockholders and OP unitholders | 45,853 | 63,560 | 67,690 | 105,548 | |||||||||||
Write-off of premiums, loan costs and exit fees | 1,575 | 3,941 | 1,629 | 3,941 | |||||||||||
Other impairment charges | — | (116 | ) | — | (227 | ) | |||||||||
Other (income) expense | 146 | 3,085 | 3,266 | 3,337 | |||||||||||
Transaction, acquisition and management conversion costs | 892 | 427 | 3,568 | 645 | |||||||||||
Legal judgment and related legal costs | 263 | 24 | 4,064 | 48 | |||||||||||
Unrealized (gain) loss on marketable securities | 531 | — | 3,877 | — | |||||||||||
Unrealized (gain) loss on derivatives | 1,743 | (6,878 | ) | 325 | (13,796 | ) | |||||||||
Dead deal costs | — | 304 | 4 | 301 | |||||||||||
Software implementation costs | 1,034 | — | 1,034 | — | |||||||||||
Non-cash stock/unit-based compensation | 3,710 | 2,342 | 4,138 | 3,326 | |||||||||||
Company's portion of (gain) loss of AQUA U.S. Fund | — | (68 | ) | (52 | ) | 2,998 | |||||||||
Company's portion of adjustments to FFO of unconsolidated entities (Ashford Inc.) | 3,002 | 1,388 | 4,885 | 2,136 | |||||||||||
Company's portion of adjustments to FFO of unconsolidated entities (OpenKey) | 1 | — | 2 | — | |||||||||||
Adjusted FFO available to common stockholders and OP unitholders | $ | 58,750 | $ | 68,009 | $ | 94,430 | $ | 108,257 |
Hotel Property | Location | Service Type | Total Rooms | % Owned | Owned Rooms | ||||||||
Fee Simple Properties | |||||||||||||
Embassy Suites | Austin, TX | Full service | 150 | 100 | % | 150 | |||||||
Embassy Suites | Dallas, TX | Full service | 150 | 100 | 150 | ||||||||
Embassy Suites | Herndon, VA | Full service | 150 | 100 | 150 | ||||||||
Embassy Suites | Las Vegas, NV | Full service | 220 | 100 | 220 | ||||||||
Embassy Suites | Flagstaff, AZ | Full service | 119 | 100 | 119 | ||||||||
Embassy Suites | Houston, TX | Full service | 150 | 100 | 150 | ||||||||
Embassy Suites | West Palm Beach, FL | Full service | 160 | 100 | 160 | ||||||||
Embassy Suites | Philadelphia, PA | Full service | 263 | 100 | 263 | ||||||||
Embassy Suites | Walnut Creek, CA | Full service | 249 | 100 | 249 | ||||||||
Embassy Suites | Arlington, VA | Full service | 267 | 100 | 267 | ||||||||
Embassy Suites | Portland, OR | Full service | 276 | 100 | 276 | ||||||||
Embassy Suites | Santa Clara, CA | Full service | 257 | 100 | 257 | ||||||||
Embassy Suites | Orlando, FL | Full service | 174 | 100 | 174 | ||||||||
Hilton Garden Inn | Jacksonville, FL | Select service | 119 | 100 | 119 | ||||||||
Hilton Garden Inn | Austin, TX | Select service | 254 | 100 | 254 | ||||||||
Hilton Garden Inn | Baltimore, MD | Select service | 158 | 100 | 158 | ||||||||
Hilton Garden Inn | Virginia Beach, VA | Select service | 176 | 100 | 176 | ||||||||
Hilton Garden Inn | Wisconsin Dells, WI | Select service | 128 | 100 | 128 | ||||||||
Hilton | Houston, TX | Full service | 242 | 100 | 242 | ||||||||
Hilton | St. Petersburg, FL | Full service | 333 | 100 | 333 | ||||||||
Hilton | Santa Fe, NM | Full service | 158 | 100 | 158 | ||||||||
Hilton | Bloomington, MN | Full service | 300 | 100 | 300 | ||||||||
Hilton | Costa Mesa, CA | Full service | 486 | 100 | 486 | ||||||||
Hilton | Boston, MA | Full service | 390 | 100 | 390 | ||||||||
Hilton | Parsippany, NJ | Full service | 353 | 100 | 353 | ||||||||
Hilton | Tampa, FL | Full service | 238 | 100 | 238 | ||||||||
Hampton Inn | Lawrenceville, GA | Select service | 85 | 100 | 85 | ||||||||
Hampton Inn | Evansville, IN | Select service | 140 | 100 | 140 | ||||||||
Hampton Inn | Parsippany, NJ | Select service | 152 | 100 | 152 | ||||||||
Hampton Inn | Buford, GA | Select service | 92 | 100 | 92 | ||||||||
Hampton Inn | Phoenix, AZ | Select service | 106 | 100 | 106 | ||||||||
Hampton Inn - Waterfront | Pittsburgh, PA | Select service | 113 | 100 | 113 | ||||||||
Hampton Inn - Washington | Pittsburgh, PA | Select service | 103 | 100 | 103 | ||||||||
Hampton Inn | Columbus, OH | Select service | 145 | 100 | 145 | ||||||||
Marriott | Beverly Hills, CA | Full service | 260 | 100 | 260 | ||||||||
Marriott | Durham, NC | Full service | 225 | 100 | 225 | ||||||||
Marriott | Arlington, VA | Full service | 698 | 100 | 698 | ||||||||
Marriott | Bridgewater, NJ | Full service | 347 | 100 | 347 | ||||||||
Marriott | Dallas, TX | Full service | 265 | 100 | 265 | ||||||||
Marriott | Fremont, CA | Full service | 357 | 100 | 357 | ||||||||
Marriott | Memphis, TN | Full service | 232 | 100 | 232 | ||||||||
Marriott | Irving, TX | Full service | 491 | 100 | 491 | ||||||||
Marriott | Omaha, NE | Full service | 300 | 100 | 300 | ||||||||
Marriott | San Antonio, TX | Full service | 251 | 100 | 251 |
Hotel Property | Location | Service Type | Total Rooms | % Owned | Owned Rooms | ||||||||
Marriott | Sugarland, TX | Full service | 300 | 100 | 300 | ||||||||
SpringHill Suites by Marriott | Jacksonville, FL | Select service | 102 | 100 | 102 | ||||||||
SpringHill Suites by Marriott | Baltimore, MD | Select service | 133 | 100 | 133 | ||||||||
SpringHill Suites by Marriott | Kennesaw, GA | Select service | 90 | 100 | 90 | ||||||||
SpringHill Suites by Marriott | Buford, GA | Select service | 97 | 100 | 97 | ||||||||
SpringHill Suites by Marriott | Centreville, VA | Select service | 136 | 100 | 136 | ||||||||
SpringHill Suites by Marriott | Charlotte, NC | Select service | 136 | 100 | 136 | ||||||||
SpringHill Suites by Marriott | Durham, NC | Select service | 120 | 100 | 120 | ||||||||
SpringHill Suites by Marriott | Manhattan Beach, CA | Select service | 164 | 100 | 164 | ||||||||
SpringHill Suites by Marriott | Plymouth Meeting, PA | Select service | 199 | 100 | 199 | ||||||||
SpringHill Suites by Marriott | Glen Allen, VA | Select service | 136 | 100 | 136 | ||||||||
Fairfield Inn by Marriott | Kennesaw, GA | Select service | 86 | 100 | 86 | ||||||||
Courtyard by Marriott | Bloomington, IN | Select service | 117 | 100 | 117 | ||||||||
Courtyard by Marriott - Tremont | Boston, MA | Select service | 315 | 100 | 315 | ||||||||
Courtyard by Marriott | Columbus, IN | Select service | 90 | 100 | 90 | ||||||||
Courtyard by Marriott | Denver, CO | Select service | 202 | 100 | 202 | ||||||||
Courtyard by Marriott | Louisville, KY | Select service | 150 | 100 | 150 | ||||||||
Courtyard by Marriott | Gaithersburg, MD | Select service | 210 | 100 | 210 | ||||||||
Courtyard by Marriott | Crystal City, VA | Select service | 272 | 100 | 272 | ||||||||
Courtyard by Marriott | Ft. Lauderdale, FL | Select service | 174 | 100 | 174 | ||||||||
Courtyard by Marriott | Overland Park, KS | Select service | 168 | 100 | 168 | ||||||||
Courtyard by Marriott | Savannah, GA | Select service | 156 | 100 | 156 | ||||||||
Courtyard by Marriott | Foothill Ranch, CA | Select service | 156 | 100 | 156 | ||||||||
Courtyard by Marriott | Alpharetta, GA | Select service | 154 | 100 | 154 | ||||||||
Courtyard by Marriott | Oakland, CA | Select service | 156 | 100 | 156 | ||||||||
Courtyard by Marriott | Scottsdale, AZ | Select service | 180 | 100 | 180 | ||||||||
Courtyard by Marriott | Plano, TX | Select service | 153 | 100 | 153 | ||||||||
Courtyard by Marriott | Newark, CA | Select service | 181 | 100 | 181 | ||||||||
Courtyard by Marriott | Manchester, CT | Select service | 90 | 85 | 77 | ||||||||
Courtyard by Marriott | Basking Ridge, NJ | Select service | 235 | 100 | 235 | ||||||||
Courtyard by Marriott | Wichita, KS | Select service | 128 | 100 | 128 | ||||||||
Courtyard by Marriott - Billerica | Boston, MA | Select service | 210 | 100 | 210 | ||||||||
Homewood Suites | Pittsburgh, PA | Select service | 148 | 100 | 148 | ||||||||
Marriott Residence Inn | Lake Buena Vista, FL | Select service | 210 | 100 | 210 | ||||||||
Marriott Residence Inn | Evansville, IN | Select service | 78 | 100 | 78 | ||||||||
Marriott Residence Inn | Orlando, FL | Select service | 350 | 100 | 350 | ||||||||
Marriott Residence Inn | Falls Church, VA | Select service | 159 | 100 | 159 | ||||||||
Marriott Residence Inn | San Diego, CA | Select service | 150 | 100 | 150 | ||||||||
Marriott Residence Inn | Salt Lake City, UT | Select service | 144 | 100 | 144 | ||||||||
Marriott Residence Inn | Las Vegas, NV | Select service | 256 | 100 | 256 | ||||||||
Marriott Residence Inn | Phoenix, AZ | Select service | 200 | 100 | 200 | ||||||||
Marriott Residence Inn | Plano, TX | Select service | 126 | 100 | 126 | ||||||||
Marriott Residence Inn | Newark, CA | Select service | 168 | 100 | 168 | ||||||||
Marriott Residence Inn | Manchester, CT | Select service | 96 | 85 | 82 | ||||||||
Marriott Residence Inn | Jacksonville, FL | Select service | 120 | 100 | 120 | ||||||||
Marriott Residence Inn | Stillwater, OK | Select service | 101 | 100 | 101 | ||||||||
Marriott Residence Inn | Tampa, FL | Select service | 109 | 100 | 109 | ||||||||
TownePlace Suites by Marriott | Manhattan Beach, CA | Select service | 143 | 100 | 143 | ||||||||
One Ocean | Atlantic Beach, FL | Full service | 193 | 100 | 193 |
Hotel Property | Location | Service Type | Total Rooms | % Owned | Owned Rooms | ||||||||
Sheraton Hotel | Ann Arbor, MI | Full service | 197 | 100 | 197 | ||||||||
Sheraton Hotel | Langhorne, PA | Full service | 186 | 100 | 186 | ||||||||
Sheraton Hotel | Minneapolis, MN | Full service | 220 | 100 | 220 | ||||||||
Sheraton Hotel | Indianapolis, IN | Full service | 378 | 100 | 378 | ||||||||
Sheraton Hotel | Anchorage, AK | Full service | 370 | 100 | 370 | ||||||||
Sheraton Hotel | San Diego, CA | Full service | 260 | 100 | 260 | ||||||||
Hyatt Regency | Coral Gables, FL | Full service | 253 | 100 | 253 | ||||||||
Hyatt Regency | Hauppauge, NY | Full service | 358 | 100 | 358 | ||||||||
Hyatt Regency | Savannah, GA | Full service | 351 | 100 | 351 | ||||||||
Renaissance | Nashville, TN | Full service | 673 | 100 | 673 | ||||||||
Annapolis Historic Inn | Annapolis, MD | Full service | 124 | 100 | 124 | ||||||||
Lakeway Resort & Spa | Austin, TX | Full service | 168 | 100 | 168 | ||||||||
Silversmith | Chicago, IL | Full service | 144 | 100 | 144 | ||||||||
The Churchill | Washington, DC | Full service | 173 | 100 | 173 | ||||||||
The Melrose | Washington, DC | Full service | 240 | 100 | 240 | ||||||||
Le Pavillon | New Orleans, LA | Full service | 226 | 100 | 226 | ||||||||
The Ashton | Ft. Worth, TX | Full service | 39 | 100 | 39 | ||||||||
Westin | Princeton, NJ | Full service | 296 | 100 | 296 | ||||||||
W | Atlanta, GA | Full service | 237 | 100 | 237 | ||||||||
W | Minneapolis, MN | Full service | 229 | 100 | 229 | ||||||||
Le Meridien | Minneapolis, MN | Full service | 60 | 100 | 60 | ||||||||
Hotel Indigo | Atlanta, GA | Full service | 140 | 100 | 140 | ||||||||
Ground Lease Properties | |||||||||||||
Crowne Plaza | Key West, FL | Full service | 160 | 100 | 160 | ||||||||
Crowne Plaza | Annapolis, MD | Full service | 196 | 100 | 196 | ||||||||
Hilton | Ft. Worth, TX | Full service | 294 | 100 | 294 | ||||||||
Renaissance | Palm Springs, CA | Full service | 410 | 100 | 410 | ||||||||
Ritz-Carlton | Atlanta, GA | Full service | 444 | 100 | 444 | ||||||||
Total | 25,055 | 25,028 |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan (1) | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan | ||||||||||
Common stock: | ||||||||||||||
April 1 to April 31 | 3,255 | $ | — | (2) | — | $ | 200,000,000 | |||||||
May 1 to May 31 | 1,205 | — | (2) | — | 200,000,000 | |||||||||
June 1 to June 30 | 12,703 | — | (2) | — | 200,000,000 | |||||||||
Total | 17,163 | $ | — | — |
(1) | In September 2011, our board of directors announced the reinstatement of our 2007 share repurchase program and authorized an increase in repurchase plan authorization from the remaining $58.4 million to $200.0 million. The plan provides for: (i) the repurchase of shares of our common stock, Series A preferred stock and Series D preferred stock, and /or (ii) discounted purchases of outstanding debt obligations, including debt secured by hotel assets. No shares of common or preferred stock have been repurchased under this program since September 2011and none are authorized for purchase without further authorization from our board of directors. |
(2) | There is no cost associated with the forfeiture of restricted shares of 3,255, 1,205 and 12,703 of our common stock in April, May and June, respectively. |
ITEM 3. | DEFAULT UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit | Description | ||
3.1 | |||
3.2 | |||
3.3 | |||
10.1 | |||
12* | |||
31.1* | |||
31.2* | |||
32.1* | |||
32.2* | |||
The following materials from the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2017 are formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements Comprehensive Income (Loss); (iii) Consolidated Statement of Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements. In accordance with Rule 402 of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. | |||
101.INS | XBRL Instance Document | Submitted electronically with this report. | |
101.SCH | XBRL Taxonomy Extension Schema Document | Submitted electronically with this report. | |
101.CAL | XBRL Taxonomy Calculation Linkbase Document | Submitted electronically with this report. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Submitted electronically with this report. | |
101.LAB | XBRL Taxonomy Label Linkbase Document. | Submitted electronically with this report. | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document. | Submitted electronically with this report. |
Date: | August 8, 2017 | By: | /s/ DOUGLAS A. KESSLER | |
Douglas A. Kessler | ||||
President and Chief Executive Officer | ||||
Date: | August 8, 2017 | By: | /s/ DERIC S. EUBANKS | |
Deric S. Eubanks | ||||
Chief Financial Officer |
Six Months Ended | Year Ended December 31, | ||||||||||||||||||||||
June 30, 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||
Earnings | |||||||||||||||||||||||
Income (loss) from continuing operations before provision for income taxes and redeemable noncontrolling interests | $ | (20,749 | ) | $ | (57,250 | ) | $ | 310,523 | $ | (40,465 | ) | $ | (46,949 | ) | $ | (56,385 | ) | ||||||
Amount recorded for equity in (earnings) loss of unconsolidated entities | 2,901 | 6,110 | 6,831 | (2,495 | ) | 23,404 | 20,833 | ||||||||||||||||
Add: | |||||||||||||||||||||||
Distributions of earnings from unconsolidated entities | — | — | 996 | 995 | — | — | |||||||||||||||||
Interest on indebtedness, net of premiums | 101,890 | 199,870 | 168,834 | 107,598 | 133,697 | 140,066 | |||||||||||||||||
Amortization of loan costs | 8,371 | 24,097 | 18,680 | 7,237 | 7,772 | 6,194 | |||||||||||||||||
Interest component of operating leases | 142 | 343 | 288 | 115 | 341 | 354 | |||||||||||||||||
$ | 92,555 | $ | 173,170 | $ | 506,152 | $ | 72,985 | $ | 118,265 | $ | 111,062 | ||||||||||||
Fixed charges | |||||||||||||||||||||||
Interest on indebtedness, net of premiums | $ | 101,890 | $ | 199,870 | $ | 168,834 | $ | 107,598 | $ | 133,697 | $ | 140,066 | |||||||||||
Amortization of loan costs | 8,371 | 24,097 | 18,680 | 7,237 | 7,772 | 6,194 | |||||||||||||||||
Interest component of operating leases | 142 | 343 | 288 | 115 | 341 | 354 | |||||||||||||||||
Dividends to Class B unit holders | — | 2,110 | 2,813 | 2,879 | 2,943 | 2,943 | |||||||||||||||||
$ | 110,403 | $ | 226,420 | $ | 190,615 | $ | 117,829 | $ | 144,753 | $ | 149,557 | ||||||||||||
Preferred stock dividends | |||||||||||||||||||||||
Preferred Series A | $ | 1,771 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,516 | |||||||||||
Preferred Series D | 10,001 | 20,002 | 20,002 | 20,002 | 20,002 | 19,869 | |||||||||||||||||
Preferred Series E | — | 6,280 | 10,418 | 10,418 | 10,418 | 10,417 | |||||||||||||||||
Preferred Series F | 4,425 | 4,130 | — | — | — | — | |||||||||||||||||
Preferred Series G | 5,715 | 2,318 | — | — | — | — | |||||||||||||||||
$ | 21,912 | $ | 36,272 | $ | 33,962 | $ | 33,962 | $ | 33,962 | $ | 33,802 | ||||||||||||
Combined fixed charges and preferred stock dividends | $ | 132,315 | $ | 262,692 | $ | 224,577 | $ | 151,791 | $ | 178,715 | $ | 183,359 | |||||||||||
Ratio of earnings to fixed charges | 2.66 | ||||||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 2.25 | ||||||||||||||||||||||
Deficit (Fixed charges) | $ | 17,848 | $ | 53,250 | $ | 44,844 | $ | 26,488 | $ | 38,495 | |||||||||||||
Deficit (Combined fixed charges and preferred stock dividends) | $ | 39,760 | $ | 89,522 | $ | 78,806 | $ | 60,450 | $ | 72,297 | |||||||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Ashford Hospitality Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ DOUGLAS A. KESSLER | |
Douglas A. Kessler | |
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ashford Hospitality Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ DERIC S. EUBANKS | |
Deric S. Eubanks | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ DOUGLAS A. KESSLER | |
Douglas A. Kessler | |
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ DERIC S. EUBANKS | |
Deric S. Eubanks | |
Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Aug. 04, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ASHFORD HOSPITALITY TRUST INC | |
Entity Central Index Key | 0001232582 | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 97,430,297 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 10,428 | $ 35,135 | $ (21,509) | $ 22,996 |
Other comprehensive income (loss), net of tax: | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Comprehensive income (loss) | 10,428 | 35,135 | (21,509) | 22,996 |
Less: Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities | (13) | (6) | 18 | 32 |
Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership | (231) | (4,376) | 6,262 | (2,264) |
Comprehensive income (loss) attributable to the Company | $ 10,184 | $ 30,753 | $ (15,229) | $ 20,764 |
Consolidated Statement of Equity - 6 months ended Jun. 30, 2017 - USD ($) shares in Thousands, $ in Thousands |
Total |
Series A Preferred Stock [Member] |
Series D Preferred Stock [Member] |
Series F Preferred Stock [Member] |
Series G Preferred Stock [Member] |
Common Stock |
Preferred Stock
Series A Preferred Stock [Member]
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Preferred Stock
Series D Preferred Stock [Member]
|
Preferred Stock
Series F Preferred Stock [Member]
|
Preferred Stock
Series G Preferred Stock [Member]
|
Common Stock |
Additional Paid In Capital |
Accumulated Deficit |
Accumulated Deficit
Series A Preferred Stock [Member]
|
Accumulated Deficit
Series D Preferred Stock [Member]
|
Accumulated Deficit
Series F Preferred Stock [Member]
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Accumulated Deficit
Series G Preferred Stock [Member]
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Accumulated Deficit
Common Stock
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Noncontrolling Interests In Consolidated Entities |
Redeemable Noncontrolling Interests in Operating Partnership |
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Beginning balance, shares (in shares) at Dec. 31, 2016 | 1,657 | 9,469 | 4,800 | 6,200 | 96,377 | |||||||||||||||
Beginning balance, value at Dec. 31, 2016 | $ 792,377 | $ 17 | $ 95 | $ 48 | $ 62 | $ 964 | $ 1,764,450 | $ (974,015) | $ 756 | |||||||||||
Beginning balance, value at Dec. 31, 2016 | 132,768 | $ 132,768 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Purchases of common stock | (1,274) | $ (2) | (1,272) | |||||||||||||||||
Purchases of common shares (in shares) | (203) | |||||||||||||||||||
Equity-based compensation | 2,333 | 2,333 | ||||||||||||||||||
Equity-based compensation | 1,805 | |||||||||||||||||||
Forfeitures of restricted shares | 0 | |||||||||||||||||||
Forfeitures of restricted shares (in shares) | (35) | |||||||||||||||||||
Issuance of restricted shares/units, value | 0 | $ 12 | (12) | |||||||||||||||||
Issuance of restricted shares/units, value | 94 | |||||||||||||||||||
Issuance of restricted shares/units (in shares) | 1,271 | |||||||||||||||||||
Dividends | $ (1,771) | $ (10,001) | $ (4,425) | $ (5,715) | $ (23,531) | $ (22,877) | $ (1,771) | $ (10,001) | $ (4,425) | $ (5,715) | $ (23,531) | |||||||||
Distributions to noncontrolling interests | 0 | |||||||||||||||||||
Distributions to noncontrolling interests | (5,099) | |||||||||||||||||||
Redemption/conversion of operating partnership units | 161 | 161 | ||||||||||||||||||
Redemption/conversion of operating partnership units | (161) | |||||||||||||||||||
Redemption/conversion of operating partnership units (in shares) | 20 | |||||||||||||||||||
Redemption value adjustment | 15,423 | 15,423 | ||||||||||||||||||
Redemption value adjustment | (15,423) | |||||||||||||||||||
Income (loss) from continuing operations attributable to the Company | (15,229) | (15,229) | ||||||||||||||||||
Loss from consolidated entities attributable to noncontrolling interest | (18) | (18) | ||||||||||||||||||
Net income (loss) | (15,247) | |||||||||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (6,262) | |||||||||||||||||||
Ending balance, value at Jun. 30, 2017 | 748,330 | $ 17 | $ 95 | $ 48 | $ 62 | $ 974 | $ 1,765,660 | $ (1,019,264) | $ 738 | |||||||||||
Ending balance, shares (in shares) at Jun. 30, 2017 | 1,657 | 9,469 | 4,800 | 6,200 | 97,430 | |||||||||||||||
Ending balance, value at Jun. 30, 2017 | $ 107,722 | $ 107,722 |
Organization and Description of Business |
6 Months Ended | ||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Organization and Description of Business | Organization and Description of Business Ashford Hospitality Trust, Inc., together with its subsidiaries (“Ashford Trust”), is a real estate investment trust (“REIT”) focused on investing in full-service hotels in the upscale and upper upscale segments in domestic and international markets that have revenue per available room (“RevPAR”) generally less than twice the national average, and in all methods including direct real estate, equity, and debt. Other than Ashford Hospitality Trust, Inc.’s investment in Ashford Inc. common stock, we own our lodging investments and conduct our business through Ashford Hospitality Limited Partnership (“Ashford Trust OP”), our operating partnership. Ashford OP General Partner LLC, a wholly-owned subsidiary of Ashford Trust, serves as the sole general partner of our operating partnership. In this report, terms such as the “Company,” “we,” “us,” or “our” refer to Ashford Hospitality Trust, Inc. and all entities included in its consolidated financial statements. We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”), a subsidiary of Ashford Inc., through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC. As of June 30, 2017, we owned interests in the following assets:
For federal income tax purposes, we have elected to be treated as a REIT, which imposes limitations related to operating hotels. As of June 30, 2017, our 120 hotel properties were leased or owned by our wholly owned subsidiaries that are treated as taxable REIT subsidiaries for federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”). Ashford TRS then engages third-party or affiliated hotel management companies to operate the hotels under management contracts. Hotel operating results related to these properties are included in the consolidated statements of operations. As of June 30, 2017, Remington Lodging & Hospitality, LLC, together with its affiliates (“Remington Lodging”), which is beneficially wholly owned by Mr. Monty J. Bennett, our Chairman, and Mr. Archie Bennett, Jr., our Chairman Emeritus, managed 82 of our 120 hotel properties and WorldQuest Resort. Third-party management companies managed the remaining hotel properties. |
Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements include the accounts of Ashford Hospitality Trust, Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2016 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 16, 2017. Ashford Trust OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Trust OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Ashford Trust OP General Partner LLC, its general partner. As such, we consolidate Ashford Trust OP. Historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three and six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The following dispositions affect reporting comparability of our consolidated financial statements:
(1) The 5-hotel portfolio is comprised of the Courtyard Edison in Edison, New Jersey; the Residence Inn Buckhead in Atlanta, Georgia; the Courtyard Lake Buena Vista, the Fairfield Inn Lake Buena Vista and the SpringHill Suites Lake Buena Vista in Orlando, Florida. (2) The 2-hotel portfolio is comprised of the Courtyard and Residence Inn in Palm Desert, California. Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipment replacements of approximately 4% to 6% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions. We early adopted Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash effective January 1, 2017. See discussion in recently adopted accounting standards below. Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period, and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. No impairment charges were recorded for investments in hotel properties for the three and six months ended June 30, 2017 and 2016. Hotel Dispositions—Discontinued operations are defined as the disposal of components of an entity that represents strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. We believe that individual dispositions of hotel properties do not represent a strategic shift that has (or will have) a major effect on our operations and financial results as most will not fit the definition. Assets Held for Sale—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale. See note 4. Investments in Unconsolidated Entities—Investments in entities in which we have ownership interests ranging from 15.4% to 29.6%, at June 30, 2017, are accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review the investments in our unconsolidated entities for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity in earnings (loss) in unconsolidated entities. No such impairment was recorded for the three and six months ended June 30, 2017 and 2016. Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIE’s, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis and therefore such entities should not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions. Revenue Recognition—Hotel revenues, including room, food, beverage, and ancillary revenues such as long-distance telephone service, laundry, parking and space rentals, are recognized when services have been rendered. Taxes collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned. We discontinue recording interest and amortizing discounts/premiums when the contractual payment of interest and/or principal is not received when contractually due. Equity-Based Compensation—Stock/unit-based compensation for non-employees is accounted for at fair value based on the market price of the shares at period end in accordance with applicable authoritative accounting guidance that results in recording expense, included in “advisory services fee” and “management fees” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Performance stock units (“PSUs”) and performance-based Long-Term Incentive Plan (“Performance LTIP”) units granted to certain executive officers are accounted for at fair value at period end based on a Monte Carlo simulation valuation model that results in recording expense, included in “advisory services fee,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Stock/unit grants to independent directors are recorded at fair value based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant. Recently Adopted Accounting Standards—In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017, and the adoption of this standard did not have any impact on our financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which clarifies the presentation of restricted cash and restricted cash equivalents in the statements of cash flows. Under ASU 2016-18 restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017 on a retrospective basis. The adoption of this standard resulted in the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows for all periods presented. As a result net cash provided by operating activities increased $15.9 million and net cash used in investing activities decreased $6.4 million in the six months ended June 30, 2016. Our beginning-of-period cash, cash equivalents and restricted cash increased $144.4 million and $153.7 million in 2017 and 2016, respectively. Recently Issued Accounting Standards—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model, which requires a company to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The update will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to fiscal periods beginning after December 15, 2017. The FASB has also issued additional updates that further clarify the requirements of Topic 606 and provide implementation guidance. Early adoption is permitted for fiscal periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are continuing to evaluate the effect of the standard on our consolidated financial statements, including as it pertains to accounting for real estate sales, and continue to evaluate the available transition methods. However, we have not yet selected a transition method. Based on our initial and ongoing assessment of ASU 2014-09, we do not currently believe there will be a material impact to the amount or timing of revenue recognition for rooms revenue, food and beverage revenue and other hotel revenue. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We do not expect that ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The accounting for leases under which we are the lessor remains largely unchanged. While we are currently in the initial stages of assessing the impact that ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact to our consolidated financial statements upon adoption will be the recognition, on a discounted basis, of our future minimum rentals due under noncancelable leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The ASU sets forth an “expected credit loss” impairment model to replace the current “incurred loss” method of recognizing credit losses. The standard requires measurement and recognition of expected credit losses for most financial assets held. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for periods beginning after December 15, 2018. We are currently evaluating the impact that ASU 2016-13 will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a consensus of the Emerging Issues Task Force (“ASU 2016-15”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Certain issues addressed in this guidance include - Debt payments or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investments and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that ASU 2016-15 will have on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. While we are currently evaluating the potential impact of the standard, we currently expect that certain future hotel acquisitions may be considered asset acquisitions rather than business combinations, which would affect capitalization of acquisitions costs (such costs are expensed for business combinations and capitalized for asset acquisitions). In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (ASU “2017-05”), which clarifies the scope of Accounting Standard Codification (“ASC”) Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets and adds guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. An entity may elect to apply ASU 2017-05 under a retrospective or modified retrospective approach. We are evaluating the impact that ASU 2017-05 will have on our consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09 (“ASU 2017-09”), Scope of Modification Accounting, which amended Accounting Standards Code Topic 718. Presently, ASC 718, Stock Compensation, defines a modification as “a change in any of the terms or conditions of a share-based payment award,” The definition is broad and its interpretation in practice results in diversity as to whether a change to the terms or conditions of an award is substantive. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following remain unchanged immediately before and after the change of terms and conditions: (1) The award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), (2) The award’s vesting conditions, and (3) The award’s classification as an equity or liability instrument. ASU 2017-09 is effective for all entities whose fiscal year begins after December 15, 2017. Early adoption is permitted. We are evaluating the impact that ASU 2017-09 will have on our consolidated financial statements and related disclosures. |
Investment in Hotel Properties, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Hotel Properties, net | Investments in Hotel Properties, net Investments in hotel properties, net consisted of the following (in thousands):
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Hotel Dispositions and Assets Held For Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hotel Dispositions and Assets Held For Sale | Hotel Dispositions and Assets Held For Sale On June 1, 2016, the Company sold the Noble Five Hotels, a 5-hotel portfolio of select-service hotel properties for approximately $142.0 million in cash. The sale resulted in a gain of $22.8 million for the year ended December 31, 2016. The portfolio is comprised of the Courtyard Edison in Edison, New Jersey, the Residence Inn Buckhead in Atlanta, Georgia, the Courtyard Lake Buena Vista, the Fairfield Inn Lake Buena Vista and the SpringHill Suites Lake Buena Vista in Orlando, Florida. On September 1, 2016, the Company sold the Hampton Inn Gainesville for approximately $26.5 million in cash. The sale resulted in a gain of $1.6 million for the year ended December 31, 2016. On October 1, 2016, the Company sold the SpringHill Suites in Gaithersburg, Maryland for approximately $13.2 million. The consideration received from the sale was a combination of cash and approximately 2.0 million Class B common units of the Company’s operating partnership. The Class B operating partnership units were redeemed at a price of $5.74 per unit, or a price of $6.05 per common share after taking into account the current conversion factor. The Company also repaid approximately $10.4 million of debt associated with the hotel property. The sale resulted in a loss of $223,000 for the year ended December 31, 2016. On October 7, 2016, the Company sold the Courtyard and Residence Inn in Palm Desert, California for $36.0 million. The consideration received from the sale was a combination of cash and assumption of approximately $23.8 million of mortgage debt associated with the hotel properties. The sale resulted in a gain of $7.5 million for the year ended December 31, 2016. On February 1, 2017, the Company sold the Renaissance hotel in Portsmouth, Virginia (“Renaissance Portsmouth”) for approximately $9.2 million in cash. The sale resulted in a loss of $43,000 for the six months ended June 30, 2017 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.2 million of debt associated with the hotel property. See note 6. On March 6, 2017, the Company sold the Embassy Suites in Syracuse, New York (“Embassy Suites Syracuse”) for approximately $8.8 million in cash. The sale resulted in a loss of $40,000 for the six months ended June 30, 2017 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.6 million of debt associated with the hotel property. See note 6. On June 29, 2017, the Company sold the Crowne Plaza Ravinia in Atlanta, Georgia for approximately $88.7 million in cash. The sale resulted in a gain of $14.1 million for the three and six months ended June 30, 2017 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $78.7 million of debt associated with the hotel property. See note 6. We included the results of operations for these hotel properties through the date of disposition in net income (loss). The following table includes condensed financial information from these hotel properties in the consolidated statements of operations for the three and six months ended June 30, 2017 and 2016 (in thousands):
Assets Held For Sale At December 31, 2016, the Renaissance Portsmouth and the Embassy Suites Syracuse were classified as held for sale in the consolidated balance sheet based on methodologies discussed in note 2. Since the sale of the properties did not represent a strategic shift that had (or will have had) a major effect on our operations or financial results, their results of operation were not reported as discontinued operations in the consolidated financial statements. Depreciation and amortization were ceased as of the date the assets were deemed held for sale. On February 1, 2017, we completed the sale of the Renaissance Portsmouth for approximately $9.2 million. On March 6, 2017, we completed the sale of the Embassy Suites Syracuse for approximately $8.8 million. The major classes of assets and liabilities related to the assets held for sale included in the consolidated balance sheet at December 31, 2016 were as follows:
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Investment in Unconsolidated Entities |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Entities | Investment in Unconsolidated Entities Ashford Inc. We held approximately 598,000 shares of Ashford Inc. common stock, which represented an approximate 29.6% ownership interest in Ashford Inc. as of June 30, 2017, with a fair value of $30.5 million. The following tables summarize the condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 and the condensed consolidated statements of operations of Ashford Inc. and our equity in earnings (loss) for the three and six months ended June 30, 2017 and 2016 (in thousands): Ashford Inc. Condensed Consolidated Balance Sheets (unaudited)
Ashford Inc. Condensed Consolidated Statements of Operations (unaudited)
AQUA U.S. Fund The AQUA U.S. Fund was managed by Ashford Investment Management, LLC (“AIM”), an indirect subsidiary of Ashford Inc. As of June 30, 2017 and December 31, 2016, and for the three and six months ended June 30, 2017 and 2016, the AQUA U.S. Fund was consolidated by Ashford Inc. The AQUA U.S. Fund invested substantially all of its assets in the Ashford Quantitative Alternatives Master Fund, LP (the “Master Fund”), previously named the AIM Real Estate Hedged Equity Master Fund, LP, and as a consequence of our investment in the AQUA U.S. Fund, we obtained an indirect interest in the Master Fund. Our maximum exposure of loss is limited to our investment in the AQUA U.S. Fund. During the first quarter of 2017, we liquidated our investment in the AQUA U.S. Fund subject to a 5% hold back of $2.6 million, which was received during the second quarter of 2017. The Master Fund generally invested in publicly traded equity securities and put and call options on publicly traded equity securities. The AQUA U.S. Fund recorded its investment in the Master Fund at its proportionate share of net assets. Income (loss) and distributions are allocated to the AQUA U.S. Fund’s partners based on their ownership percentage of the AQUA U.S. Fund. Our equity in loss in the AQUA U.S. Fund represented our share of the AQUA U.S. Fund’s loss for the three months ended March 31, 2017 and the three and six months ended June 30, 2016. We were not obligated to pay any portion of the management fee or the performance allocation in favor of the AQUA U.S. Fund’s investment manager and general partner, respectively, but did share pro rata in all other applicable expenses of the AQUA U.S. Fund. As of December 31, 2016, we owned an approximate 96.6% ownership interest in the AQUA U.S. Fund. The following tables summarize the balance sheet as of December 31, 2016 and the statements of operations for the three months ended March 31, 2017 and the three and six months ended 2016 of the AQUA U.S. Fund (in thousands): Ashford Quantitative Alternatives (U.S.), LP Condensed Balance Sheet (unaudited)
Ashford Quantitative Alternatives (U.S.), LP Condensed Statements of Operations (unaudited)
OpenKey In 2016, the Company made investments totaling $2.3 million in OpenKey, which is controlled and consolidated by Ashford Inc., for a 13.3% ownership interest. On March 2, 2017, we invested an additional $650,000. As of June 30, 2017, the Company has made investments totaling $3.0 million, for a 15.35% ownership interest. Our investment is recorded as a component of “investment in unconsolidated entities” in our consolidated balance sheet and is accounted for under the equity method of accounting as we have been deemed to have significant influence over the entity under the applicable accounting guidance. As of June 30, 2017, our ownership interest had a carrying value of $2.4 million. For the three and six months ended June 30, 2017, our equity in earnings (loss) in the unconsolidated entity was a loss of $123,000 and $230,000, respectively. For both the three and six months ended June 30, 2016, our equity in earnings (loss) in the unconsolidated entity was a loss of $116,000. |
Indebtedness |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness | Indebtedness Indebtedness consisted of the following (in thousands):
(1) LIBOR rates were 1.224% and 0.772% at June 30, 2017 and December 31, 2016, respectively. (2) On May 24, 2017, we refinanced this mortgage loan totaling $15.6 million set to mature in June 2017 with a new $16.1 million mortgage loan with a three-year initial term and two one-year extension options subject to the satisfaction of certain conditions. Through May 2019, the new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.90%. Beginning on June 1, 2019, monthly principal payments based on a thirty-year amortization and a 6.00% interest rate are due. (3) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in July 2017. (4) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in August 2016. (5) This mortgage loan had a $20.6 million pay down of principal related to the sale of the Embassy Suites Syracuse that was sold on March 6, 2017. See note 4. (6) A portion of this mortgage loan at December 31, 2016 relates to the Embassy Suites Syracuse that was sold on March 6, 2017. See note 4. (7) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions. (8) On May 10, 2017, we refinanced this mortgage loan totaling $104.3 million set to mature in January 2018 with a new $181.0 million mortgage loan, of which our initial advance was $164.7 million. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due. (9) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in January 2017. (10) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions and a LIBOR floor of 0.20%. The second one-year extension period began in February 2017. (11) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017. (12) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017. (13) This mortgage loan had a $20.2 million pay down of principal related to the sale of the Renaissance Portsmouth that was sold on February 1, 2017. (14) A portion of this mortgage loan at December 31, 2016 relates to the Renaissance Portsmouth that was sold on February 1, 2017. See note 4. (15) This mortgage loan had a $78.7 million pay down of principal related to the sale of the Crowne Plaza Ravinia that was sold on June 29, 2017. See note 4. (16) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in May 2017. (17) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in June 2017. (18) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. On February 1, 2017, we repaid $20.2 million of principal on our mortgage loan partially secured by the Renaissance Portsmouth. This hotel property was sold on February 1, 2017. On March 6, 2017, we repaid $20.6 million of principal on our mortgage loan partially secured by the Embassy Suites Syracuse. This hotel property was sold on March 6, 2017. On May 10, 2017, we refinanced a $105.0 million mortgage loan, secured by the Renaissance Nashville in Nashville, Tennessee and the Westin in Princeton, New Jersey. The new mortgage loan totals $181.0 million, of which our initial advance was $164.7 million with future advances totaling $16.3 million as reimbursement for capital expenditures. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due. The stated maturity is June 2022, with no extension options. On May 24, 2017, we refinanced a $15.7 million mortgage loan, secured by the Hotel Indigo (“Indigo Atlanta”) in Atlanta, Georgia. The new mortgage loan totals $16.1 million. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.90% for the first two years with a 30-year amortization schedule based on a 6% interest rate starting in the third year. The stated maturity is May 2020, with two one-year extension options. On June 29, 2017, we repaid $78.7 million of principal on our mortgage loan partially secured by the Crowne Plaza Ravinia. This hotel property was sold on June 29, 2017. During the three and six months ended June 30, 2017, we recognized premium amortization of $1.0 million and $1.6 million, respectively, and during the three and six months ended June 30, 2016, we recognized premium amortization of $524,000 and $1.0 million, respectively. The amortization of the premium is computed using a method that approximates the effective interest method, which is included in interest expense and amortization of premiums and loan costs in the consolidated statements of operations. We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of Ashford Trust or Ashford Trust OP, our operating partnership, and the liabilities of such subsidiaries do not constitute the obligations of Ashford Trust or Ashford Trust OP. As of June 30, 2017, we were in compliance in all material respects with all covenants or other requirements set forth in our debt and related agreements as amended. |
Income (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per common share is calculated using the two-class method by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per common share is calculated using the two-class method, or treasury stock method if more dilutive, and reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share. The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):
Due to the anti-dilutive effect, the computation of diluted income (loss) per share does not reflect adjustments for the following items (in thousands):
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Derivative Instruments and Hedging |
6 Months Ended |
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Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging | Derivative Instruments and Hedging Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives currently include interest rate caps and interest rate floors. These derivatives are subject to master netting settlement arrangements. To mitigate the nonperformance risk, we routinely use a third party’s analysis of the creditworthiness of the counterparties, which supports our belief that the counterparties’ nonperformance risk is limited. All derivatives are recorded at fair value. During the six months ended June 30, 2017, we entered into interest rate caps with notional amounts totaling $1.8 billion and strike rates ranging from 1.50% to 4.44%. These interest rate caps had effective dates from February 2017 to June 2017, maturity dates from February 2018 to June 2019, and a total cost of $550,000. These instruments were not designated as cash flow hedges. During the six months ended June 30, 2016, we entered into interest rate caps with notional amounts totaling $237.5 million and strike rates ranging from 2.25% to 4.50%. These interest rate caps had effective dates from February 2016 to March 2016, maturity dates from February 2017 to December 2017, and a total cost of $73,000. These instruments were not designated as cash flow hedges. As of June 30, 2017, we held interest rate caps with notional amounts totaling $3.6 billion and strike rates ranging from 1.50% to 4.45%. These instruments had maturity dates ranging from July 2017 to June 2019. These instruments cap the interest rates on our mortgage loans with principal balances of $3.2 billion and maturity dates from July 2017 to June 2022. As of June 30, 2017, we held interest rate floors with notional amounts totaling $6.0 billion and strike rates ranging from (0.25)% to 0%. These instruments have maturity dates ranging from April 2020 to July 2020. Credit Default Swap Derivatives—A credit default swap is a derivative contract that functions like an insurance policy against the credit risk of an entity or obligation. The seller of protection assumes the credit risk of the reference obligation from the buyer (us) of protection in exchange for annual premium payments. If a default or a loss, as defined in the credit default swap agreements, occurs on the underlying bonds, then the buyer of protection is protected against those losses. The only liability for us, the buyer, is the annual premium and any change in value of the underlying CMBX index (if the trade is terminated prior to maturity). For all CMBX trades completed to date, we were the buyer of protection. Credit default swaps are subject to master-netting settlement arrangements and credit support annexes. Assuming the underlying bonds pay off at par over their remaining average life, our total exposure for these trades was approximately $7.5 million as of June 30, 2017. Cash collateral is posted by us as well as our counterparties. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral. The change in market value of credit default swaps is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparties when the change in market value is over $250,000. Options on Futures Contracts—During the six months ended June 30, 2016, we purchased options on Eurodollar futures for a total cost of $250,000 and maturity date of June 2017. There were no purchases during the six months ended June 30, 2017. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy—For disclosure purposes, financial instruments, whether measured at fair value on a recurring or nonrecurring basis or not measured at fair value, are classified in a hierarchy consisting of three levels based on the observability of valuation inputs in the market place as discussed below:
Fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts/payments and the discounted expected variable cash payments/receipts. Fair values of interest rate caps, floors, flooridors, and corridors are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fell below the strike rates of the floors or rise above the strike rates of the caps. Variable interest rates used in the calculation of projected receipts and payments on the swaps, caps, and floors are based on an expectation of future interest rates derived from observable market interest rate curves (LIBOR forward curves) and volatilities (Level 2 inputs). We also incorporate credit valuation adjustments (Level 3 inputs) to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. Fair values of credit default swaps are obtained from a third party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty. Fair values of interest rate floors are calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor. These expected future cash flows are probability-weighted projections based on the contract terms, accounting for both the magnitude and likelihood of potential payments, which are both computed using the appropriate LIBOR forward curve and market implied volatilities as of the valuation date (Level 2 inputs). Fair value of options on futures contracts is determined based on the last reported settlement price as of the measurement date (Level 1 inputs). These exchange-traded options are centrally cleared, and a clearinghouse stands in between all trades to ensure that the obligations involved in the trades are satisfied. Fair values of marketable securities and liabilities associated with marketable securities, including public equity securities, equity put and call options, and other investments, are based on their quoted market closing prices (Level 1 inputs). When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at June 30, 2017, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 1.224% to 1.726% for the remaining term of our derivatives. Credit spreads (Level 3 inputs) used in determining the fair values of hedge and non-hedge designated derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):
____________________________________ (1) Represents net cash collateral posted between us and our counterparties. (2) Reported net as “derivative assets, net” in the consolidated balance sheets. (3) Reported as “marketable securities” in the consolidated balance sheets. (4) Reported net as “derivative liabilities, net” in the consolidated balance sheets. Effect of Fair-Value-Measured Assets and Liabilities on Consolidated Statements of Operations The following tables summarize the effect of fair-value-measured assets and liabilities on the consolidated statements of operations for the three and six months ended June 30, 2017 and 2016 (in thousands):
____________________________________ (1) Reported as “unrealized gain (loss) on derivatives” in the consolidated statements of operations. (2) Included in “other income (expense)” in the consolidated statements of operations. (3) Included in “unrealized gain (loss) on marketable securities” in the consolidated statements of operations. (4) Excludes costs of $259 and $188 for the three months ended June 30, 2017 and 2016, respectively, included in “other income (expense)” associated with credit default swaps.
____________________________________ (1) Reported as “unrealized gain (loss) on derivatives” in the consolidated statements of operations. (2) Included in “other income (expense)” in the consolidated statements of operations. (3) Included in “unrealized gain (loss) on marketable securities” in the consolidated statements of operations. (4) Excludes costs of $512 and $378 for the six months ended June 30, 2017 and 2016, respectively, included in “other income (expense)” associated with credit default swaps. |
Summary of Fair Value of Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value of Financial Instruments | Summary of Fair Value of Financial Instruments Determining estimated fair values of our financial instruments such as notes receivable and indebtedness requires considerable judgment to interpret market data. Market assumptions and/or estimation methodologies used may have a material effect on estimated fair value amounts. Accordingly, estimates presented are not necessarily indicative of amounts at which these instruments could be purchased, sold, or settled. Carrying amounts and estimated fair values of financial instruments, for periods indicated, were as follows (in thousands):
____________________________________ (1) Includes balances associated with assets held for sale and liabilities associated with assets held for sale as of December 31, 2016. Cash, cash equivalents, and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique. Accounts receivable, net, accounts payable and accrued expenses, dividends payable, due to/from Ashford Prime OP, due to related party, net, due to Ashford Inc., net and due to/from third-party hotel managers. The carrying values of these financial instruments approximate their fair values due to their short-term nature. This is considered a Level 1 valuation technique. Derivative assets, net, and derivative liabilities, net. Fair value of interest rate derivatives is determined using the net present value of expected cash flows of each derivative based on the market-based interest rate curve and adjusted for credit spreads of us and our counterparties. Fair values of credit default swap derivatives are obtained from a third party who publishes the CMBX index composition and price data. Fair values of interest rate floors are calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor. Fair values of options on futures contracts are valued at their last reported settlement price as of the measurement date. See notes 2, 8 and 9 for a complete description of the methodology and assumptions utilized in determining fair values. Indebtedness. Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments. Cash flows are determined using a forward interest rate yield curve. Current replacement rates are determined by using the U.S. Treasury yield curve or the index to which these financial instruments are tied and adjusted for credit spreads. Credit spreads take into consideration general market conditions, maturity, and collateral. We estimated the fair value of total indebtedness to be approximately 95.7% to 105.8% of the carrying value of $3.7 billion at June 30, 2017 and approximately 95.3% to 105.4% of the carrying value of $3.8 billion at December 31, 2016. This is considered a Level 2 valuation technique. |
Redeemable Noncontrolling Interests in Operating Partnership |
6 Months Ended |
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Jun. 30, 2017 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | |
Redeemable Noncontrolling Interests in Operating Partnership | Redeemable Noncontrolling Interests in Operating Partnership Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (“common units”) and the units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested throughout the period. Beginning one year after issuance, each common unit may be redeemed for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement. Ashford Trust continues to hold 598,000 shares of Ashford Inc. common stock for the benefit of its common stockholders, and all of our remaining lodging investments are owned by Ashford Trust OP. Each common unit and LTIP unit was worth approximately 95% and 96% of one share of our common stock at both June 30, 2017 and December 31, 2016, respectively, as a result of the specific distribution characteristics to unitholders in the Ashford Inc. spin-off. LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, have vesting periods ranging from three to five years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of the operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of the operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for the operating partnership. The compensation committee of the board of directors of the Company approved Performance LTIP units to certain executive officers, which have a three year cliff vesting. The award agreements provide for the grant of a maximum number of Performance LTIP units that will be settled in LTIPs or common units of the Ashford Trust OP, if and when the applicable vesting criteria have been achieved following the end of the performance and service period. The actual number of units earned may be adjusted from 0% to 100% based on achievement of a specified relative total stockholder return and specified absolute total stockholder return, based on the formula determined by the Company’s Compensation Committee on the grant date. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature, and the Performance LTIP units were granted to non-employees. Compensation expense of $436,000 and $348,000 was recorded for the three and six months ended June 30, 2017, respectively, and expense of $168,000 for both the three and six months ended June 30, 2016. The Performance LTIP units unamortized fair value of $5.1 million at June 30, 2017 will be expensed over a period of 2.7 years. As of June 30, 2017, we have issued a total of 11.9 million LTIP and Performance LTIP units, all of which, other than approximately 81,000, 31,000, and 662,000 units, issued in May 2017, April 2017 and March 2015, respectively, have reached full economic parity with, and are convertible into, common units. Expense of $1.3 million and $1.5 million was recognized for the three and six months ended June 30, 2017, respectively, and expense of $801,000 and $1.1 million was recognized for the three and six months ended June 30, 2016, respectively, which was associated with LTIP units issued to Ashford LLC’s employees and Ashford Trust’s directors and is included in “advisory services fee” and “corporate, general and administrative,” respectively, in our consolidated statements of operations. As the LTIP units are issued to non-employees, the compensation expense was determined based on the share price as of the end of the period. The fair value of the unrecognized cost of LTIP units, which was $5.6 million at June 30, 2017, will be expensed over a period of 2.8 years. During the six months ended June 30, 2017, approximately 21,000 common units with an aggregate fair value of approximately $161,000 were redeemed by the holder and, at our election, we issued shares of our common stock to satisfy the redemption. During the three and six months ended June 30, 2016, approximately 5,000 common units with an aggregate fair value of approximately $24,000 were redeemed by the holder and, at our election, we issued shares of our common stock to satisfy the redemption price. Redeemable noncontrolling interests, including vested LTIP units, in our operating partnership as of June 30, 2017 and December 31, 2016, were $107.7 million and $132.8 million, respectively, which represent ownership of our operating partnership of 15.70% and 14.48%, respectively. The carrying value of redeemable noncontrolling interests as of June 30, 2017 and December 31, 2016, included adjustments of $128.8 million and $144.3 million, respectively, to reflect the excess of the redemption value over the accumulated historical costs. Redeemable noncontrolling interests were allocated net income of $231,000 and net loss of $6.3 million for the three and six months ended June 30, 2017, respectively, and net income of $4.4 million and $2.3 million for the three and six months ended June 30, 2016, respectively. We declared aggregate cash distributions to holders of common units and holders of LTIP units of $2.6 million and $5.1 million for the three and six months ended June 30, 2017, respectively, and $2.9 million and $5.8 million for the three and six months ended June 30, 2016, respectively. |
Equity and Equity-Based Compensation |
6 Months Ended |
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Jun. 30, 2017 | |
Equity [Abstract] | |
Equity and Equity-Based Compensation | Equity and Equity-Based Compensation Common Stock Dividends—For each of the 2017 and 2016 quarters, the board of directors declared quarterly dividends of $0.12 per outstanding share of common stock with an annualized target of $0.48 per share for 2017. Restricted Stock Units—Stock-based compensation expense of $1.6 million and $2.0 million was recognized for the three and six months ended June 30, 2017, respectively, and expense of $1.2 million and $1.9 million for the three and six months ended June 30, 2016, respectively, in connection with equity awards granted to employees of Ashford LLC, certain employees of Remington Lodging and Ashford Trust’s directors and is included in “advisory services fee,” “management fees” and “corporate, general and administrative,” respectively, in our consolidated statements of operations. At June 30, 2017, the unamortized cost of the unvested shares of restricted stock was $11.0 million, which will be amortized over a period of 2.8 years, subject to future mark to market adjustments, and these shares are scheduled to vest between February 2018 and April 2020. Performance Stock Units—The compensation committee of the board of directors of the Company approved PSUs to certain executive officers, which have a three year cliff vesting. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if and when the applicable vesting criteria have been achieved following the end of the performance and service period. The target number of PSUs may be adjusted from 0% to 200% based on achievement of a specified relative total stockholder return and specified absolute total stockholder return, based on the formula determined by the Company’s Compensation Committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature, and the PSUs were granted to non-employees. Compensation expense of $367,000 and $296,000 was recorded for the three and six months ended June 30, 2017, respectively. Compensation expense of $143,000 was recorded for both the three and six months ended June 30, 2016. The fair value of unrecognized cost of PSUs, which was $4.2 million at June 30, 2017, will be expensed over a period of approximately 2.7 years. Preferred Dividends—During the three months ended June 30, 2017, the board of directors declared quarterly dividends of $0.5344 per share for our 8.55% Series A preferred stock, $0.5281 per share for our 8.45% Series D preferred stock, $0.4609 per share for our 7.375% Series F preferred stock and $0.4609 per share for our 7.375% Series G preferred stock. During the three months ended June 30, 2016, the board of directors declared quarterly dividends of $0.5344 per share for our 8.55% Series A preferred stock, $0.5281 per share for our 8.45% Series D preferred stock and $0.5625 per share for our 9.00% Series E preferred stock. Noncontrolling Interests in Consolidated Entities—Our noncontrolling entity partner had an ownership interest of 15% in two hotel properties and a total carrying value of $738,000 and $756,000 at June 30, 2017 and December 31, 2016, respectively. Our ownership interest is reported in equity in the consolidated balance sheets. Noncontrolling interests in consolidated entities were allocated income of $13,000 and loss of $18,000 for the three and six months ended June 30, 2017, respectively, and income of $6,000 and loss of $32,000 for the three and six months ended June 30, 2016, respectively. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Restricted Cash—Under certain management and debt agreements for our hotel properties existing at June 30, 2017, escrow payments are required for insurance, real estate taxes, and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 4% to 6% of gross revenues for capital improvements. Franchise Fees—Under franchise agreements for our hotel properties existing at June 30, 2017, we pay franchisor royalty fees between 1% and 6% of gross rooms revenue and, in some cases, food and beverage revenues. Additionally, we pay fees for marketing, reservations, and other related activities aggregating between 1% and 4% of gross rooms revenue and, in some cases, food and beverage revenues. These franchise agreements expire on varying dates between 2018 and 2047. When a franchise term expires, the franchisor has no obligation to renew the franchise. A franchise termination could have a material adverse effect on the operations or the underlying value of the affected hotel due to loss of associated name recognition, marketing support, and centralized reservation systems provided by the franchisor. A franchise termination could also have a material adverse effect on cash available for distribution to stockholders. In addition, if we breach the franchise agreement and the franchisor terminates a franchise prior to its expiration date, we may be liable for up to three times the average annual fees incurred for that property. We incurred franchise fees of $18.4 million and $34.8 million for the three and six months ended June 30, 2017, respectively, and $19.1 million and $36.2 million for the three and six months ended June 30, 2016, respectively. Franchise fees are included in “other” hotel expenses in the consolidated statements of operations. Management Fees—Under management agreements for our hotel properties existing at June 30, 2017, we pay a) monthly property management fees equal to the greater of approximately $13,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases 2% to 7% of gross revenues, as well as annual incentive management fees, if applicable, b) project management fees of up to 4% of project costs, c) market service fees including purchasing, design and construction management not to exceed 16.5% of project management budget cumulatively, including project management fees, and d) other general fees at current market rates as approved by our independent directors, if required. These management agreements expire from 2020 through 2040, with renewal options. If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term and liquidated damages or, in certain circumstances, we may substitute a new management agreement. Income Taxes— We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 2013 through 2016 remain subject to potential examination by certain federal and state taxing authorities. Potential Pension Liabilities—Upon our 2006 acquisition of a hotel property, certain employees of such hotel were unionized and covered by a multi-employer defined benefit pension plan. At that time, no unfunded pension liabilities existed. Subsequent to our acquisition, a majority of employees, who are employees of the hotel manager, Remington Lodging, petitioned the employer to withdraw recognition of the union. As a result of the decertification petition, Remington Lodging withdrew recognition of the union. At the time of the withdrawal, the National Retirement Fund, the union’s pension fund, indicated unfunded pension liabilities existed. The National Labor Relations Board (“NLRB”) filed a complaint against Remington Lodging seeking, among other things, that Remington Lodging’s withdrawal of recognition was unlawful. Pending the final determination of the NLRB complaint, including appeals, the pension fund entered into a settlement agreement with Remington Lodging on November 1, 2011, providing that (a) Remington Lodging will continue to make monthly pension fund payments pursuant to the collective bargaining agreement, and (b) if the withdrawal of recognition is ultimately deemed lawful, Remington Lodging will have an unfunded pension liability equal to $1.7 million minus the monthly pension payments made by Remington Lodging since the settlement agreement. To illustrate, if Remington Lodging - as of the date a final determination occurs - has made monthly pension payments equaling $100,000, Remington Lodging’s remaining withdrawal liability shall be the unfunded pension liability of $1.7 million minus $100,000 (or $1.6 million). This remaining unfunded pension liability shall be paid to the pension fund in annual installments of $84,000 (but may be made monthly or quarterly, at Remington Lodging’s election), which shall continue for the remainder of the twenty-(20)-year capped period, unless Remington Lodging elects to pay the unfunded pension liability amount earlier. We agreed to indemnify Remington Lodging for the payment of the unfunded pension liability, if any, as set forth in the settlement agreement. Litigation—Palm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc. This litigation involves a landlord tenant dispute from 2008 in which the landlord, Palm Beach Florida Hotel and Office Building Limited Partnership, a subsidiary of the Company, claimed that the tenant had violated various lease provisions of the lease agreement and was therefore in default. The tenant counterclaimed and asserted multiple claims including that it had been wrongfully evicted. The litigation was instituted by the plaintiff in November 2008 in the Circuit Court of the Fifteenth Judicial Circuit, in and for Palm Beach County, Florida and proceeded to a jury trial on June 30, 2014. The jury entered its verdict awarding the tenant total claims of $10.8 million and ruling against the landlord on its claim of breach of contract. In 2016, the Court of Appeals reduced the original $10.8 million judgment to $8.8 million and added pre-judgment interest on the wrongful eviction judgment. The case was further appealed to the Florida Supreme Court. On May 23, 2017, the trial court issued an order compelling the company that issued the supersedeas bond, RLI Insurance Company (“RLI”), to pay approximately $10.0 million. On June 1, 2017, RLI paid Nantucket this amount and has sought reimbursement from the Company. On June 27, 2017, the Florida Supreme Court denied the Company's petition for review. As a result, all of the appeals were exhausted and the judgment was final with the determination and reimbursement of attorney's fees being the only remaining dispute. On June 29, 2017, the balance of the judgment was paid to Nantucket by the Company. The Company estimates its total loss including post judgment interest and reimbursement of the plaintiff’s legal fees to be approximately $17.3 million as of June 30, 2017, resulting in additional expense of $264,000 and $4.1 million for the three and six months ended June 30, 2017, respectively. On June 29, 2017, RLI, the company that issued the supersedeas bond, filed suit in Federal District Court in Dallas seeking to recover the amounts previously paid to Nantucket. This lawsuit is pending. On July 19, 2017, the Company paid approximately $10.0 million to RLI. We are engaged in other various legal proceedings which have arisen but have not been fully adjudicated. The likelihood of loss from these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible and to probable. Based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position or results of operations. However, the final results of legal proceedings cannot be predicted with certainty and if we fail to prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position or results of operations could be materially adversely affected in future periods. |
Segment Reporting |
6 Months Ended |
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Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We operate in one business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refer to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance. As of June 30, 2017 and December 31, 2016, all of our hotel properties were domestically located. |
Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor, and as a result, we pay advisory fees to Ashford LLC. We are required to pay Ashford LLC a quarterly base fee that is a percentage of our total market capitalization on a declining sliding scale plus the Key Money Asset Management Fee (defined in our advisory agreement as the aggregate gross asset value of all key money assets multiplied by 0.70%), subject to a minimum quarterly base fee, as payment for managing our day-to-day operations in accordance with our investment guidelines. Total market capitalization includes the aggregate principal amount of our consolidated indebtedness (including our proportionate share of debt of any entity that is not consolidated but excluding our joint venture partners’ proportionate share of consolidated debt). The range of base fees on the scale are between 0.70% and 0.50% per annum for total market capitalization that ranges from less than $6.0 billion to greater than $10.0 billion. At June 30, 2017, the quarterly base fee was 0.70% based on our current market capitalization. We are also required to pay Ashford LLC an incentive fee that is earned annually by Ashford LLC in each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group, subject to the FCCR Condition, as defined in the advisory agreement. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, insurance claims advisory and asset management services, as specified in the advisory agreement. We also record equity-based compensation expense for equity grants of common stock and LTIP units awarded to our officers and employees of Ashford LLC in connection with providing advisory services equal to the fair value of the award in proportion to the requisite service period satisfied during the period. The following table summarizes the advisory services fees incurred (in thousands):
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In 2016, $4.0 million of key money consideration was invested in furniture, fixtures and equipment by Ashford Inc. to be used by Ashford Trust, which represented all of the key money consideration for the Le Pavillon Hotel. The hotel advisory services and the lease are considered a multiple element arrangement, in accordance with the applicable accounting guidance. As such, a portion of the base advisory fee is allocated to lease expense equal to the estimated fair value of the lease payments that would have been made. As a result, $156,000 and $320,000 of advisory expense was allocated to lease expense and was included in “other” hotel expense in the consolidated statements of operations for the three and six months ended June 30, 2017. No advisory expense was allocated to lease expense for the three and six months ended June 30, 2016. On January 19, 2017, AHT SMA, LP, a Delaware limited partnership and a wholly-owned subsidiary of Ashford Trust entered into an Investment Management Agreement (the “Agreement”) with Ashford Investment Management, LLC (“AIM”), a subsidiary of Ashford Inc., to manage all or a portion of Ashford Trust’s excess cash (the “Account”). Pursuant to the Agreement, the Company retained and appointed AIM as the investment manager for us. The Agreement will govern the relationship between Ashford Trust and AIM, as well as grant AIM certain rights, powers and duties to act on behalf of the Company. AIM will not be compensated by us for its services under the Agreement. We bear all costs and expenses of the establishment and ongoing maintenance of the Account as well as all costs and expenses of AIM. For the three and six months ended June 30, 2017, investment management reimbursable expenses were $543,000 and $960,000, respectively, which are included in “corporate, general and administrative” expense in the consolidated statements of operations. At June 30, 2017 and December 31, 2016, we had payables of $13.6 million and $15.7 million, respectively, included in due to Ashford Inc., net, associated with the advisory services fee discussed above. In addition, at March 31, 2017, we held a receivable from the AQUA U.S. Fund of $2.6 million, associated with the hold back from the AQUA U.S. Fund, of which the funds were received during the second quarter of 2017. Certain employees of Remington Lodging, who perform work on behalf of Ashford Trust, were granted approximately 173,000 shares and 131,000 shares of restricted stock under the Ashford Trust Stock Plan in 2016 and 2017, respectively. These share grants were accounted for under the applicable accounting guidance related to share-based payments granted to non-employees and are recorded as a component of “management fees” in our consolidated statements of operations. Expense of $192,000 and $217,000 was recognized for the three and six months ended June 30, 2017, respectively, and expense of $71,000 and $155,000 for the three and six months ended June 30, 2016, respectively. The unamortized fair value of these grants was $1.4 million as of June 30, 2017, which will be amortized over a period of 2.8 years. |
Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements include the accounts of Ashford Hospitality Trust, Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2016 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 16, 2017. Ashford Trust OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Trust OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Ashford Trust OP General Partner LLC, its general partner. As such, we consolidate Ashford Trust OP. Historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three and six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The following dispositions affect reporting comparability of our consolidated financial statements:
(1) The 5-hotel portfolio is comprised of the Courtyard Edison in Edison, New Jersey; the Residence Inn Buckhead in Atlanta, Georgia; the Courtyard Lake Buena Vista, the Fairfield Inn Lake Buena Vista and the SpringHill Suites Lake Buena Vista in Orlando, Florida. (2) The 2-hotel portfolio is comprised of the Courtyard and Residence Inn in Palm Desert, California. |
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Use of Estimates | Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
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Restricted Cash | Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipment replacements of approximately 4% to 6% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions. We early adopted Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash effective January 1, 2017. See discussion in recently adopted accounting standards below. |
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Impairment of Investment in Hotel Properties and Assets Held for Sale | Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period, and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. No impairment charges were recorded for investments in hotel properties for the three and six months ended June 30, 2017 and 2016. Assets Held for Sale—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale. See note 4. |
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Hotel Dispositions | Hotel Dispositions—Discontinued operations are defined as the disposal of components of an entity that represents strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. We believe that individual dispositions of hotel properties do not represent a strategic shift that has (or will have) a major effect on our operations and financial results as most will not fit the definition. |
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Investments in Unconsolidated Entities | Investments in Unconsolidated Entities—Investments in entities in which we have ownership interests ranging from 15.4% to 29.6%, at June 30, 2017, are accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review the investments in our unconsolidated entities for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity in earnings (loss) in unconsolidated entities. No such impairment was recorded for the three and six months ended June 30, 2017 and 2016. Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIE’s, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis and therefore such entities should not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions. |
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Revenue Recognition | Revenue Recognition—Hotel revenues, including room, food, beverage, and ancillary revenues such as long-distance telephone service, laundry, parking and space rentals, are recognized when services have been rendered. Taxes collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned. We discontinue recording interest and amortizing discounts/premiums when the contractual payment of interest and/or principal is not received when contractually due. |
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Equity-Based Compensation | Equity-Based Compensation—Stock/unit-based compensation for non-employees is accounted for at fair value based on the market price of the shares at period end in accordance with applicable authoritative accounting guidance that results in recording expense, included in “advisory services fee” and “management fees” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Performance stock units (“PSUs”) and performance-based Long-Term Incentive Plan (“Performance LTIP”) units granted to certain executive officers are accounted for at fair value at period end based on a Monte Carlo simulation valuation model that results in recording expense, included in “advisory services fee,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Stock/unit grants to independent directors are recorded at fair value based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant. |
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Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards—In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017, and the adoption of this standard did not have any impact on our financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which clarifies the presentation of restricted cash and restricted cash equivalents in the statements of cash flows. Under ASU 2016-18 restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017 on a retrospective basis. The adoption of this standard resulted in the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows for all periods presented. As a result net cash provided by operating activities increased $15.9 million and net cash used in investing activities decreased $6.4 million in the six months ended June 30, 2016. Our beginning-of-period cash, cash equivalents and restricted cash increased $144.4 million and $153.7 million in 2017 and 2016, respectively. Recently Issued Accounting Standards—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model, which requires a company to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The update will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to fiscal periods beginning after December 15, 2017. The FASB has also issued additional updates that further clarify the requirements of Topic 606 and provide implementation guidance. Early adoption is permitted for fiscal periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are continuing to evaluate the effect of the standard on our consolidated financial statements, including as it pertains to accounting for real estate sales, and continue to evaluate the available transition methods. However, we have not yet selected a transition method. Based on our initial and ongoing assessment of ASU 2014-09, we do not currently believe there will be a material impact to the amount or timing of revenue recognition for rooms revenue, food and beverage revenue and other hotel revenue. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We do not expect that ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The accounting for leases under which we are the lessor remains largely unchanged. While we are currently in the initial stages of assessing the impact that ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact to our consolidated financial statements upon adoption will be the recognition, on a discounted basis, of our future minimum rentals due under noncancelable leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). The ASU sets forth an “expected credit loss” impairment model to replace the current “incurred loss” method of recognizing credit losses. The standard requires measurement and recognition of expected credit losses for most financial assets held. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for periods beginning after December 15, 2018. We are currently evaluating the impact that ASU 2016-13 will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a consensus of the Emerging Issues Task Force (“ASU 2016-15”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Certain issues addressed in this guidance include - Debt payments or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investments and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that ASU 2016-15 will have on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. While we are currently evaluating the potential impact of the standard, we currently expect that certain future hotel acquisitions may be considered asset acquisitions rather than business combinations, which would affect capitalization of acquisitions costs (such costs are expensed for business combinations and capitalized for asset acquisitions). In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (ASU “2017-05”), which clarifies the scope of Accounting Standard Codification (“ASC”) Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets and adds guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. An entity may elect to apply ASU 2017-05 under a retrospective or modified retrospective approach. We are evaluating the impact that ASU 2017-05 will have on our consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09 (“ASU 2017-09”), Scope of Modification Accounting, which amended Accounting Standards Code Topic 718. Presently, ASC 718, Stock Compensation, defines a modification as “a change in any of the terms or conditions of a share-based payment award,” The definition is broad and its interpretation in practice results in diversity as to whether a change to the terms or conditions of an award is substantive. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following remain unchanged immediately before and after the change of terms and conditions: (1) The award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), (2) The award’s vesting conditions, and (3) The award’s classification as an equity or liability instrument. ASU 2017-09 is effective for all entities whose fiscal year begins after December 15, 2017. Early adoption is permitted. We are evaluating the impact that ASU 2017-09 will have on our consolidated financial statements and related disclosures. |
Investment in Hotel Properties, net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments in hotel properties, net | Investments in hotel properties, net consisted of the following (in thousands):
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Hotel Dispositions and Assets Held For Sale (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups | The following table includes condensed financial information from these hotel properties in the consolidated statements of operations for the three and six months ended June 30, 2017 and 2016 (in thousands):
The major classes of assets and liabilities related to the assets held for sale included in the consolidated balance sheet at December 31, 2016 were as follows:
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Investment in Unconsolidated Entities (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | The following tables summarize the condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 and the condensed consolidated statements of operations of Ashford Inc. and our equity in earnings (loss) for the three and six months ended June 30, 2017 and 2016 (in thousands): Ashford Inc. Condensed Consolidated Balance Sheets (unaudited)
Ashford Inc. Condensed Consolidated Statements of Operations (unaudited)
The following tables summarize the balance sheet as of December 31, 2016 and the statements of operations for the three months ended March 31, 2017 and the three and six months ended 2016 of the AQUA U.S. Fund (in thousands): Ashford Quantitative Alternatives (U.S.), LP Condensed Balance Sheet (unaudited)
Ashford Quantitative Alternatives (U.S.), LP Condensed Statements of Operations (unaudited)
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Indebtedness (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Indebtedness | Indebtedness consisted of the following (in thousands):
(1) LIBOR rates were 1.224% and 0.772% at June 30, 2017 and December 31, 2016, respectively. (2) On May 24, 2017, we refinanced this mortgage loan totaling $15.6 million set to mature in June 2017 with a new $16.1 million mortgage loan with a three-year initial term and two one-year extension options subject to the satisfaction of certain conditions. Through May 2019, the new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.90%. Beginning on June 1, 2019, monthly principal payments based on a thirty-year amortization and a 6.00% interest rate are due. (3) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in July 2017. (4) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in August 2016. (5) This mortgage loan had a $20.6 million pay down of principal related to the sale of the Embassy Suites Syracuse that was sold on March 6, 2017. See note 4. (6) A portion of this mortgage loan at December 31, 2016 relates to the Embassy Suites Syracuse that was sold on March 6, 2017. See note 4. (7) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions. (8) On May 10, 2017, we refinanced this mortgage loan totaling $104.3 million set to mature in January 2018 with a new $181.0 million mortgage loan, of which our initial advance was $164.7 million. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due. (9) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in January 2017. (10) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions and a LIBOR floor of 0.20%. The second one-year extension period began in February 2017. (11) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017. (12) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017. (13) This mortgage loan had a $20.2 million pay down of principal related to the sale of the Renaissance Portsmouth that was sold on February 1, 2017. (14) A portion of this mortgage loan at December 31, 2016 relates to the Renaissance Portsmouth that was sold on February 1, 2017. See note 4. (15) This mortgage loan had a $78.7 million pay down of principal related to the sale of the Crowne Plaza Ravinia that was sold on June 29, 2017. See note 4. (16) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in May 2017. (17) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in June 2017. (18) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. |
Income (Loss) Per Share (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amounts Used in Calculating Basic and Diluted Earnings (Loss) Per Share | The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):
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Summary of Computation of Diluted Income Per Share | Due to the anti-dilutive effect, the computation of diluted income (loss) per share does not reflect adjustments for the following items (in thousands):
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):
____________________________________ (1) Represents net cash collateral posted between us and our counterparties. (2) Reported net as “derivative assets, net” in the consolidated balance sheets. (3) Reported as “marketable securities” in the consolidated balance sheets. (4) Reported net as “derivative liabilities, net” in the consolidated balance sheets. |
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Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations | The following tables summarize the effect of fair-value-measured assets and liabilities on the consolidated statements of operations for the three and six months ended June 30, 2017 and 2016 (in thousands):
____________________________________ (1) Reported as “unrealized gain (loss) on derivatives” in the consolidated statements of operations. (2) Included in “other income (expense)” in the consolidated statements of operations. (3) Included in “unrealized gain (loss) on marketable securities” in the consolidated statements of operations. (4) Excludes costs of $259 and $188 for the three months ended June 30, 2017 and 2016, respectively, included in “other income (expense)” associated with credit default swaps.
____________________________________ (1) Reported as “unrealized gain (loss) on derivatives” in the consolidated statements of operations. (2) Included in “other income (expense)” in the consolidated statements of operations. (3) Included in “unrealized gain (loss) on marketable securities” in the consolidated statements of operations. (4) Excludes costs of $512 and $378 for the six months ended June 30, 2017 and 2016, respectively, included in “other income (expense)” associated with credit default swaps. |
Summary of Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | Carrying amounts and estimated fair values of financial instruments, for periods indicated, were as follows (in thousands):
____________________________________ (1) Includes balances associated with assets held for sale and liabilities associated with assets held for sale as of December 31, 2016. |
Related Party Transactions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | The following table summarizes the advisory services fees incurred (in thousands):
________
|
Investment in Hotel Properties, net (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 657,144 | $ 663,013 |
Buildings and improvements | 3,882,226 | 3,913,377 |
Furniture, fixtures, and equipment | 423,459 | 434,091 |
Construction in progress | 32,870 | 32,525 |
Condominium properties | 11,817 | 11,558 |
Total cost | 5,007,516 | 5,054,564 |
Accumulated depreciation | (938,364) | (894,001) |
Investments in hotel properties, net | $ 4,069,152 | $ 4,160,563 |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2017 |
Jun. 30, 2016 |
Jun. 30, 2017 |
Jun. 30, 2016 |
Dec. 31, 2016 |
|
Fair Value Disclosures [Abstract] | |||||
Fair value consideration threshold for transfer in/out of level 3 | 10.00% | 10.00% | |||
London Interbank Offered Rate (LIBOR) Rate | 1.224% | 1.224% | 0.772% | ||
Higher interest rate on derivatives | 1.726% | 1.726% | |||
Derivative expense related to credit default swaps | $ 259 | $ 188 | $ 512 | $ 378 |
Summary of Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Billions |
6 Months Ended | |
---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Maximum maturity term of financial assets | 90 days | |
Carrying value of total indebtedness of continuing operations | $ 3.7 | $ 3.8 |
Minimum [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total indebtedness fair value variance from carrying value (as a percent) | 95.70% | 95.30% |
Maximum [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total indebtedness fair value variance from carrying value (as a percent) | 105.80% | 105.40% |
Segment Reporting (Details) |
6 Months Ended |
---|---|
Jun. 30, 2017
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
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