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 | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Common Stock, $0.01 par value per share | 101,038,430 | |
(Class) | Outstanding at October 31, 2018 |
September 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Investments in hotel properties, net | $ | 4,089,985 | $ | 4,035,915 | |||
Cash and cash equivalents | 325,839 | 354,805 | |||||
Restricted cash | 141,092 | 116,787 | |||||
Marketable securities | 24,173 | 26,926 | |||||
Accounts receivable, net of allowance of $608 and $770, respectively | 60,208 | 44,257 | |||||
Inventories | 4,223 | 4,244 | |||||
Investment in unconsolidated entities | 4,514 | 2,955 | |||||
Deferred costs, net | 3,427 | 2,777 | |||||
Prepaid expenses | 29,662 | 19,269 | |||||
Derivative assets, net | 2,969 | 2,010 | |||||
Other assets | 18,117 | 14,152 | |||||
Intangible assets, net | 9,854 | 9,943 | |||||
Due from third-party hotel managers | 19,277 | 17,387 | |||||
Assets held for sale | — | 18,423 | |||||
Total assets | $ | 4,733,340 | $ | 4,669,850 | |||
Liabilities and Equity | |||||||
Liabilities: | |||||||
Indebtedness, net | $ | 3,894,447 | $ | 3,696,300 | |||
Accounts payable and accrued expenses | 147,808 | 132,401 | |||||
Dividends and distributions payable | 28,095 | 25,045 | |||||
Due to Ashford Inc., net | 5,176 | 15,146 | |||||
Due to related party, net | 1,078 | 1,067 | |||||
Due to third-party hotel managers | 2,745 | 2,431 | |||||
Intangible liabilities, net | 15,572 | 15,839 | |||||
Derivative liabilities, net | 205 | — | |||||
Other liabilities | 19,613 | 18,376 | |||||
Liabilities related to assets held for sale | — | 13,977 | |||||
Total liabilities | 4,114,739 | 3,920,582 | |||||
Commitments and contingencies (note 14) | |||||||
Redeemable noncontrolling interests in operating partnership | 118,663 | 116,122 | |||||
Equity: | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized: | |||||||
Series D Cumulative Preferred Stock, 2,389,393 shares issued and outstanding at September 30, 2018 and December 31, 2017 | 24 | 24 | |||||
Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 | 48 | 48 | |||||
Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 | 62 | 62 | |||||
Series H Cumulative Preferred Stock, 3,800,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 | 38 | 38 | |||||
Series I Cumulative Preferred Stock, 5,400,000 shares issued and outstanding at September 30, 2018 and December 31, 2017 | 54 | 54 | |||||
Common stock, $0.01 par value, 400,000,000 shares authorized, 101,038,430 and 97,409,113 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 1,010 | 974 | |||||
Additional paid-in capital | 1,811,391 | 1,784,997 | |||||
Accumulated deficit | (1,313,327 | ) | (1,153,697 | ) | |||
Total stockholders’ equity of the Company | 499,300 | 632,500 | |||||
Noncontrolling interests in consolidated entities | 638 | 646 | |||||
Total equity | 499,938 | 633,146 | |||||
Total liabilities and equity | $ | 4,733,340 | $ | 4,669,850 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | |||||||||||||||
Rooms | $ | 288,016 | $ | 289,017 | $ | 868,090 | $ | 876,927 | |||||||
Food and beverage | 49,396 | 48,313 | 164,869 | 175,005 | |||||||||||
Other hotel revenue | 17,309 | 15,006 | 51,358 | 43,720 | |||||||||||
Total hotel revenue | 354,721 | 352,336 | 1,084,317 | 1,095,652 | |||||||||||
Other | 1,209 | 989 | 2,984 | 2,052 | |||||||||||
Total revenue | 355,930 | 353,325 | 1,087,301 | 1,097,704 | |||||||||||
Expenses | |||||||||||||||
Hotel operating expenses: | |||||||||||||||
Rooms | 64,197 | 63,950 | 187,497 | 188,857 | |||||||||||
Food and beverage | 37,649 | 37,173 | 116,270 | 121,619 | |||||||||||
Other expenses | 109,992 | 112,421 | 332,629 | 337,978 | |||||||||||
Management fees | 13,198 | 13,027 | 40,306 | 40,100 | |||||||||||
Total hotel expenses | 225,036 | 226,571 | 676,702 | 688,554 | |||||||||||
Property taxes, insurance, and other | 20,774 | 18,194 | 59,363 | 55,293 | |||||||||||
Depreciation and amortization | 64,923 | 60,135 | 192,536 | 185,380 | |||||||||||
Impairment charges | (27 | ) | 1,785 | 1,652 | 1,785 | ||||||||||
Transaction costs | — | — | 11 | 11 | |||||||||||
Advisory services fee | 12,805 | 14,612 | 52,961 | 39,482 | |||||||||||
Corporate general and administrative | 3,090 | 2,412 | 8,450 | 10,836 | |||||||||||
Total expenses | 326,601 | 323,709 | 991,675 | 981,341 | |||||||||||
Operating income (loss) | 29,329 | 29,616 | 95,626 | 116,363 | |||||||||||
Equity in earnings (loss) of unconsolidated entities | 310 | (679 | ) | 892 | (3,580 | ) | |||||||||
Interest income | 1,150 | 706 | 2,779 | 1,460 | |||||||||||
Gain (loss) on sale of hotel properties | (9 | ) | 15 | 394 | 14,024 | ||||||||||
Other income (expense) | (202 | ) | (273 | ) | 80 | (3,539 | ) | ||||||||
Interest expense and amortization of premiums and loan costs | (60,731 | ) | (56,963 | ) | (173,680 | ) | (167,224 | ) | |||||||
Write-off of premiums, loan costs and exit fees | (1,572 | ) | — | (9,316 | ) | (1,629 | ) | ||||||||
Unrealized gain (loss) on marketable securities | 68 | (936 | ) | (758 | ) | (4,813 | ) | ||||||||
Unrealized gain (loss) on derivatives | (2,085 | ) | (1,479 | ) | (3,672 | ) | (1,804 | ) | |||||||
Income (loss) before income taxes | (33,742 | ) | (29,993 | ) | (87,655 | ) | (50,742 | ) | |||||||
Income tax (expense) benefit | (519 | ) | 1,267 | (2,606 | ) | 507 | |||||||||
Net income (loss) | (34,261 | ) | (28,726 | ) | (90,261 | ) | (50,235 | ) | |||||||
(Income) loss from consolidated entities attributable to noncontrolling interest | (10 | ) | (22 | ) | 8 | (4 | ) | ||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 6,682 | 6,940 | 18,087 | 13,202 | |||||||||||
Net income (loss) attributable to the Company | (27,589 | ) | (21,808 | ) | (72,166 | ) | (37,037 | ) | |||||||
Preferred dividends | (10,645 | ) | (11,440 | ) | (31,933 | ) | (33,352 | ) | |||||||
Extinguishment of issuance costs upon redemption of preferred stock | — | (4,507 | ) | — | (4,507 | ) | |||||||||
Net income (loss) attributable to common stockholders | $ | (38,234 | ) | $ | (37,755 | ) | $ | (104,099 | ) | $ | (74,896 | ) | |||
Income (loss) per share - basic and diluted: | |||||||||||||||
Basic: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (0.40 | ) | $ | (0.40 | ) | $ | (1.09 | ) | $ | (0.80 | ) | |||
Weighted average common shares outstanding – basic | 97,467 | 95,332 | 96,591 | 95,169 | |||||||||||
Diluted: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | (0.40 | ) | $ | (0.40 | ) | $ | (1.09 | ) | $ | (0.80 | ) | |||
Weighted average common shares outstanding – diluted | 97,467 | 95,332 | 96,591 | 95,169 | |||||||||||
Dividends declared per common share | $ | 0.12 | $ | 0.12 | $ | 0.36 | $ | 0.36 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | (34,261 | ) | $ | (28,726 | ) | $ | (90,261 | ) | $ | (50,235 | ) | |||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Total other comprehensive income (loss) | — | — | — | — | |||||||||||
Comprehensive income (loss) | (34,261 | ) | (28,726 | ) | (90,261 | ) | (50,235 | ) | |||||||
Less: Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities | (10 | ) | (22 | ) | 8 | (4 | ) | ||||||||
Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership | 6,682 | 6,940 | 18,087 | 13,202 | |||||||||||
Comprehensive income (loss) attributable to the Company | $ | (27,589 | ) | $ | (21,808 | ) | $ | (72,166 | ) | $ | (37,037 | ) |
Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests In Consolidated Entities | Total | Redeemable Noncontrolling Interests in Operating Partnership | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series D | Series F | Series G | Series H | Series I | Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | 2,389 | $ | 24 | 4,800 | $ | 48 | 6,200 | $ | 62 | 3,800 | $ | 38 | 5,400 | $ | 54 | 97,409 | $ | 974 | $ | 1,784,997 | $ | (1,153,697 | ) | $ | 646 | $ | 633,146 | $ | 116,122 | ||||||||||||||||||||||||||||||||
Purchases of common stock | — | — | — | — | — | — | — | — | — | — | (249 | ) | (3 | ) | (1,595 | ) | — | — | (1,598 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | — | — | — | — | — | — | 13,329 | — | — | 13,329 | 8,617 | ||||||||||||||||||||||||||||||||||||||||||||
Forfeitures of restricted shares | — | — | — | — | — | — | — | — | — | — | (46 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted shares/units | — | — | — | — | — | — | — | — | — | — | 1,490 | 15 | 108 | — | — | 123 | 53 | ||||||||||||||||||||||||||||||||||||||||||||
Cost for issuances of preferred shares | — | — | — | — | — | — | — | — | — | — | — | — | (60 | ) | — | — | (60 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | — | — | — | — | 2,434 | 24 | 14,612 | — | — | 14,636 | — | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared - common shares | — | — | — | — | — | — | — | — | — | — | — | — | — | (36,144 | ) | — | (36,144 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared - preferred shares- Series D | — | — | — | — | — | — | — | — | — | — | — | — | — | (3,785 | ) | — | (3,785 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared – preferred shares- Series F | — | — | — | — | — | — | — | — | — | — | — | — | — | (6,637 | ) | — | (6,637 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared – preferred shares- Series G | — | — | — | — | — | — | — | — | — | — | — | — | — | (8,573 | ) | — | (8,573 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared – preferred shares- Series H | — | — | — | — | — | — | — | — | — | — | — | — | — | (5,344 | ) | — | (5,344 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends declared – preferred shares- Series I | — | — | — | — | — | — | — | — | — | — | — | — | — | (7,594 | ) | — | (7,594 | ) | — | ||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (7,429 | ) | |||||||||||||||||||||||||||||||||||||||||||
Redemption value adjustment | — | — | — | — | — | — | — | — | — | — | — | — | — | (19,387 | ) | — | (19,387 | ) | 19,387 | ||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | — | — | — | — | — | — | (72,166 | ) | (8 | ) | (72,174 | ) | (18,087 | ) | ||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2018 | 2,389 | $ | 24 | 4,800 | $ | 48 | 6,200 | $ | 62 | 3,800 | $ | 38 | 5,400 | $ | 54 | 101,038 | $ | 1,010 | $ | 1,811,391 | $ | (1,313,327 | ) | $ | 638 | $ | 499,938 | $ | 118,663 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income (loss) | $ | (90,261 | ) | $ | (50,235 | ) | |
Adjustments to reconcile net income (loss) to net cash flow from operating activities: | |||||||
Depreciation and amortization | 192,536 | 185,380 | |||||
Impairment charges | 1,652 | 1,785 | |||||
Amortization of intangibles | (178 | ) | (178 | ) | |||
Recognition of deferred income | (432 | ) | (593 | ) | |||
Bad debt expense | 1,527 | 1,441 | |||||
Deferred income tax expense (benefit) | (603 | ) | (1,683 | ) | |||
Equity in (earnings) loss of unconsolidated entities | (892 | ) | 3,580 | ||||
(Gain) loss on sale of hotel properties, net | (394 | ) | (14,024 | ) | |||
Realized and unrealized (gain) loss on marketable securities | 585 | 3,991 | |||||
Purchases of marketable securities | (11,434 | ) | (38,889 | ) | |||
Sales of marketable securities | 13,602 | 76,123 | |||||
Net settlement of trading derivatives | (1,323 | ) | (3,840 | ) | |||
Realized and unrealized (gain) loss on derivatives | 3,672 | 6,512 | |||||
Amortization of loan costs and premiums, write-off of premiums, loan costs and exit fees | 23,726 | 10,783 | |||||
Equity-based compensation | 21,946 | 8,751 | |||||
Changes in operating assets and liabilities, exclusive of the effect of acquisitions and dispositions of hotel properties: | |||||||
Accounts receivable and inventories | (16,524 | ) | (14,169 | ) | |||
Prepaid expenses and other assets | (10,775 | ) | (6,852 | ) | |||
Accounts payable and accrued expenses | 21,551 | 18,573 | |||||
Due to/from related party | (987 | ) | (734 | ) | |||
Due to/from third-party hotel managers | (1,515 | ) | (5,969 | ) | |||
Due to/from Braemar OP, net | — | (488 | ) | ||||
Due to/from Ashford Inc., net | (9,970 | ) | (2,027 | ) | |||
Other liabilities | 1,743 | 1,213 | |||||
Net cash provided by (used in) operating activities | 137,252 | 178,451 | |||||
Cash Flows from Investing Activities | |||||||
Investment in unconsolidated entity | (667 | ) | (983 | ) | |||
Acquisition of hotel properties and assets, net of cash and restricted cash acquired | (114,877 | ) | (110 | ) | |||
Improvements and additions to hotel properties | (164,726 | ) | (164,075 | ) | |||
Net proceeds from sales of assets and hotel properties | 40,573 | 105,267 | |||||
Liquidation of AQUA U.S. Fund | — | 50,942 | |||||
Payments for initial franchise fees | (380 | ) | (225 | ) | |||
Proceeds from property insurance | 651 | 2,369 | |||||
Net cash provided by (used in) investing activities | (239,426 | ) | (6,815 | ) | |||
Cash Flows from Financing Activities | |||||||
Borrowings on indebtedness | 2,676,881 | 180,800 | |||||
Repayments of indebtedness | (2,461,279 | ) | (246,139 | ) | |||
Payments for loan costs and exit fees | (55,152 | ) | (5,813 | ) | |||
Payments for dividends and distributions | (72,333 | ) | (75,571 | ) | |||
Purchases of common stock | (1,598 | ) | (1,273 | ) | |||
Redemption of preferred stock | — | (80,554 | ) | ||||
Payments for derivatives | (3,103 | ) | (633 | ) | |||
Proceeds from common stock offering | 13,624 | — | |||||
Proceeds from preferred stock offering | — | 91,634 | |||||
Preferred stock offering costs | (60 | ) | — | ||||
Other | 53 | 94 | |||||
Net cash provided by (used in) financing activities | 97,033 | (137,455 | ) | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (5,141 | ) | 34,181 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 472,072 | 492,473 | |||||
Cash, cash equivalents and restricted cash and at end of period | $ | 466,931 | $ | 526,654 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Supplemental Cash Flow Information | |||||||
Interest paid | $ | 158,832 | $ | 158,443 | |||
Income taxes paid (refunded) | 1,527 | 1,610 | |||||
Supplemental Disclosure of Non-Cash Investing and Financing Activity | |||||||
Accrued but unpaid capital expenditures | $ | 13,970 | $ | 18,300 | |||
Non-cash dividends paid | 123 | — | |||||
Unsettled common stock offering proceeds | 1,075 | — | |||||
Dividends and distributions declared but not paid | 28,095 | 25,520 | |||||
Supplemental Disclosure of Cash, Cash Equivalents and Restricted Cash | |||||||
Cash and cash equivalents at beginning of period | $ | 354,805 | $ | 347,091 | |||
Cash and cash equivalents at beginning of period included in assets held for sale | 78 | 976 | |||||
Restricted cash at beginning of period | 116,787 | 144,014 | |||||
Restricted cash at beginning of period included in assets held for sale | 402 | 392 | |||||
Cash, cash equivalents and restricted cash at beginning of period | $ | 472,072 | $ | 492,473 | |||
Cash and cash equivalents at end of period | $ | 325,839 | $ | 393,527 | |||
Restricted cash at end of period | 141,092 | 133,127 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 466,931 | $ | 526,654 |
• | 118 consolidated hotel properties, including 116 directly owned and two owned through a majority-owned investment in a consolidated entity, which represent 24,930 total rooms (or 24,903 net rooms excluding those attributable to our partner); |
• | 90 hotel condominium units at WorldQuest Resort in Orlando, Florida (“WorldQuest”); |
• | a 25.1% ownership in Ashford Inc. common stock with a carrying value of $1.8 million and a fair value of $45.4 million; and |
• | a 16.3% ownership in OpenKey with a carrying value of $2.8 million. |
Hotel Property | Location | Type | Date | |||
Renaissance | Portsmouth, VA | Disposition | February 1, 2017 | |||
Embassy Suites | Syracuse, NY | Disposition | March 6, 2017 | |||
Crowne Plaza Ravinia | Atlanta, GA | Disposition | June 29, 2017 | |||
SpringHill Suites | Glen Allen, VA | Disposition | February 20, 2018 | |||
SpringHill Suites | Centreville, VA | Disposition | May 1, 2018 | |||
Residence Inn Tampa | Tampa, FL | Disposition | May 10, 2018 | |||
Hilton Alexandria Old Town | Alexandria, VA | Acquisition | June 29, 2018 |
Three Months Ended September 30, 2018 | |||||||||||||||||||||||
Primary Geographical Market | Number of Hotels | Rooms | Food and Beverage | Other Hotel | Other | Total | |||||||||||||||||
Atlanta, GA Area | 9 | $ | 16,843 | $ | 3,800 | $ | 1,379 | $ | — | $ | 22,022 | ||||||||||||
Boston, MA Area | 3 | 18,274 | 2,102 | 944 | — | 21,320 | |||||||||||||||||
Dallas / Ft. Worth Area | 7 | 14,412 | 3,333 | 921 | — | 18,666 | |||||||||||||||||
Houston, TX Area | 3 | 6,378 | 1,720 | 183 | — | 8,281 | |||||||||||||||||
Los Angeles, CA Metro Area | 6 | 19,336 | 3,382 | 1,302 | — | 24,020 | |||||||||||||||||
Miami, FL Metro Area | 3 | 5,072 | 1,652 | 232 | — | 6,956 | |||||||||||||||||
Minneapolis - St. Paul, MN - WI Area | 4 | 9,930 | 2,308 | 1,242 | — | 13,480 | |||||||||||||||||
Nashville, TN Area | 1 | 12,854 | 3,581 | 341 | — | 16,776 | |||||||||||||||||
New York / New Jersey Metro Area | 6 | 19,661 | 5,031 | 796 | — | 25,488 | |||||||||||||||||
Orlando, FL Area | 3 | 6,242 | 371 | 356 | — | 6,969 | |||||||||||||||||
Philadelphia, PA Area | 3 | 6,898 | 1,000 | 250 | — | 8,148 | |||||||||||||||||
San Diego, CA Area | 2 | 5,228 | 254 | 269 | — | 5,751 | |||||||||||||||||
San Francisco - Oakland, CA Metro Area | 6 | 21,684 | 1,862 | 658 | — | 24,204 | |||||||||||||||||
Tampa, FL Area | 2 | 4,585 | 1,263 | 257 | — | 6,105 | |||||||||||||||||
Washington DC - MD - VA Area | 9 | 28,214 | 5,142 | 2,089 | — | 35,445 | |||||||||||||||||
Other Areas | 51 | 91,492 | 12,565 | 5,815 | — | 109,872 | |||||||||||||||||
Orlando WorldQuest | — | 913 | 30 | 275 | — | 1,218 | |||||||||||||||||
Corporate | — | — | — | — | 1,209 | 1,209 | |||||||||||||||||
Total | 118 | $ | 288,016 | $ | 49,396 | $ | 17,309 | $ | 1,209 | $ | 355,930 |
Three Months Ended September 30, 2017 | |||||||||||||||||||||||
Primary Geographical Market | Number of Hotels | Rooms | Food and Beverage | Other Hotel | Other | Total | |||||||||||||||||
Atlanta, GA Area | 9 | $ | 16,831 | $ | 3,533 | $ | 1,373 | $ | — | $ | 21,737 | ||||||||||||
Boston, MA Area | 3 | 17,427 | 1,992 | 903 | — | 20,322 | |||||||||||||||||
Dallas / Ft. Worth Area | 7 | 14,827 | 2,950 | 800 | — | 18,577 | |||||||||||||||||
Houston, TX Area | 3 | 6,902 | 1,954 | 169 | — | 9,025 | |||||||||||||||||
Los Angeles, CA Metro Area | 6 | 19,074 | 3,263 | 1,193 | — | 23,530 | |||||||||||||||||
Miami, FL Metro Area | 3 | 5,383 | 1,418 | 250 | — | 7,051 | |||||||||||||||||
Minneapolis - St. Paul, MN - WI Area | 4 | 10,408 | 2,457 | 1,148 | — | 14,013 | |||||||||||||||||
Nashville, TN Area | 1 | 12,820 | 3,567 | 414 | — | 16,801 | |||||||||||||||||
New York / New Jersey Metro Area | 6 | 20,301 | 4,995 | 717 | — | 26,013 | |||||||||||||||||
Orlando, FL Area | 3 | 6,743 | 415 | 179 | — | 7,337 | |||||||||||||||||
Philadelphia, PA Area | 3 | 6,601 | 960 | 237 | — | 7,798 | |||||||||||||||||
San Diego, CA Area | 2 | 5,139 | 462 | 212 | — | 5,813 | |||||||||||||||||
San Francisco - Oakland, CA Metro Area | 6 | 20,814 | 1,949 | 520 | — | 23,283 | |||||||||||||||||
Tampa, FL Area | 3 | 4,744 | 1,088 | 185 | — | 6,017 | |||||||||||||||||
Washington DC - MD - VA Area | 9 | 25,376 | 4,421 | 1,334 | — | 31,131 | |||||||||||||||||
Other Areas | 52 | 91,740 | 12,857 | 4,993 | — | 109,590 | |||||||||||||||||
Orlando WorldQuest | — | 1,062 | 31 | 284 | — | 1,377 | |||||||||||||||||
Sold properties | 3 | 2,825 | 1 | 95 | — | 2,921 | |||||||||||||||||
Corporate | — | — | — | — | 989 | 989 | |||||||||||||||||
Total | 123 | $ | 289,017 | $ | 48,313 | $ | 15,006 | $ | 989 | $ | 353,325 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||
Primary Geographical Market | Number of Hotels | Rooms | Food and Beverage | Other Hotel | Other | Total | |||||||||||||||||
Atlanta, GA Area | 9 | $ | 51,131 | $ | 12,233 | $ | 4,127 | $ | — | $ | 67,491 | ||||||||||||
Boston, MA Area | 3 | 45,046 | 5,619 | 2,625 | — | 53,290 | |||||||||||||||||
Dallas / Ft. Worth Area | 7 | 47,427 | 12,525 | 2,620 | — | 62,572 | |||||||||||||||||
Houston, TX Area | 3 | 20,599 | 6,933 | 602 | — | 28,134 | |||||||||||||||||
Los Angeles, CA Metro Area | 6 | 59,912 | 11,601 | 3,534 | — | 75,047 | |||||||||||||||||
Miami, FL Metro Area | 3 | 22,014 | 6,728 | 764 | — | 29,506 | |||||||||||||||||
Minneapolis - St. Paul, MN - WI Area | 4 | 28,228 | 7,188 | 3,613 | — | 39,029 | |||||||||||||||||
Nashville, TN Area | 1 | 38,151 | 9,430 | 1,181 | — | 48,762 | |||||||||||||||||
New York / New Jersey Metro Area | 6 | 56,696 | 17,154 | 2,159 | — | 76,009 | |||||||||||||||||
Orlando, FL Area | 3 | 21,763 | 1,160 | 887 | — | 23,810 | |||||||||||||||||
Philadelphia, PA Area | 3 | 18,587 | 3,226 | 675 | — | 22,488 | |||||||||||||||||
San Diego, CA Area | 2 | 14,224 | 755 | 744 | — | 15,723 | |||||||||||||||||
San Francisco - Oakland, CA Metro Area | 6 | 61,564 | 5,378 | 1,752 | — | 68,694 | |||||||||||||||||
Tampa, FL Area | 2 | 17,555 | 4,746 | 1,293 | — | 23,594 | |||||||||||||||||
Washington DC - MD - VA Area | 9 | 86,948 | 16,939 | 4,886 | — | 108,773 | |||||||||||||||||
Other Areas | 51 | 271,241 | 43,146 | 18,847 | — | 333,234 | |||||||||||||||||
Orlando WorldQuest | — | 3,486 | 107 | 920 | — | 4,513 | |||||||||||||||||
Sold properties | 3 | 3,518 | 1 | 129 | — | 3,648 | |||||||||||||||||
Corporate | — | — | — | — | 2,984 | 2,984 | |||||||||||||||||
Total | 121 | $ | 868,090 | $ | 164,869 | $ | 51,358 | $ | 2,984 | $ | 1,087,301 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||
Primary Geographical Market | Number of Hotels | Rooms | Food and Beverage | Other Hotel | Other | Total | |||||||||||||||||
Atlanta, GA Area | 9 | $ | 50,878 | $ | 12,727 | $ | 3,739 | $ | — | $ | 67,344 | ||||||||||||
Boston, MA Area | 3 | 44,637 | 6,036 | 2,418 | — | 53,091 | |||||||||||||||||
Dallas / Ft. Worth Area | 7 | 46,205 | 12,668 | 2,462 | — | 61,335 | |||||||||||||||||
Houston, TX Area | 3 | 21,052 | 6,538 | 532 | — | 28,122 | |||||||||||||||||
Los Angeles, CA Metro Area | 6 | 59,130 | 11,683 | 3,481 | — | 74,294 | |||||||||||||||||
Miami, FL Metro Area | 3 | 21,256 | 6,488 | 689 | — | 28,433 | |||||||||||||||||
Minneapolis - St. Paul, MN - WI Area | 4 | 27,936 | 7,358 | 3,326 | — | 38,620 | |||||||||||||||||
Nashville, TN Area | 1 | 38,687 | 14,575 | 1,266 | — | 54,528 | |||||||||||||||||
New York / New Jersey Metro Area | 6 | 55,934 | 17,863 | 1,786 | — | 75,583 | |||||||||||||||||
Orlando, FL Area | 3 | 22,824 | 1,536 | 562 | — | 24,922 | |||||||||||||||||
Philadelphia, PA Area | 3 | 18,082 | 2,951 | 601 | — | 21,634 | |||||||||||||||||
San Diego, CA Area | 2 | 14,102 | 1,174 | 549 | — | 15,825 | |||||||||||||||||
San Francisco - Oakland, CA Metro Area | 6 | 59,206 | 5,744 | 1,529 | — | 66,479 | |||||||||||||||||
Tampa, FL Area | 3 | 18,172 | 5,166 | 599 | — | 23,937 | |||||||||||||||||
Washington DC - MD - VA Area | 9 | 86,682 | 16,899 | 3,855 | — | 107,436 | |||||||||||||||||
Other Areas | 52 | 270,209 | 42,265 | 14,888 | — | 327,362 | |||||||||||||||||
Orlando WorldQuest | — | 3,934 | 121 | 951 | — | 5,006 | |||||||||||||||||
Sold properties | 6 | 18,001 | 3,213 | 487 | — | 21,701 | |||||||||||||||||
Corporate | — | — | — | — | 2,052 | 2,052 | |||||||||||||||||
Total | 126 | $ | 876,927 | $ | 175,005 | $ | 43,720 | $ | 2,052 | $ | 1,097,704 |
September 30, 2018 | December 31, 2017 | ||||||
Land | $ | 665,578 | $ | 653,293 | |||
Buildings and improvements | 4,033,508 | 3,895,112 | |||||
Furniture, fixtures, and equipment | 494,583 | 468,420 | |||||
Construction in progress | 30,960 | 35,273 | |||||
Condominium properties | 12,173 | 12,196 | |||||
Total cost | 5,236,802 | 5,064,294 | |||||
Accumulated depreciation | (1,146,817 | ) | (1,028,379 | ) | |||
Investments in hotel properties, net | $ | 4,089,985 | $ | 4,035,915 |
Land | $ | 14,459 | |
Buildings and improvements | 94,535 | ||
Furniture, fixtures and equipment | 2,479 | ||
$ | 111,473 | ||
Net other assets (liabilities) | $ | 194 |
Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | ||||||
Total revenue | $ | 4,523 | $ | 4,523 | |||
Net income (loss) | 194 | 194 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total hotel revenue | $ | — | $ | 2,921 | $ | 3,648 | $ | 21,701 | |||||||
Total hotel operating expenses | 75 | (2,302 | ) | (2,196 | ) | (15,786 | ) | ||||||||
Operating income (loss) | 75 | 619 | 1,452 | 5,915 | |||||||||||
Property taxes, insurance and other | — | (148 | ) | (220 | ) | (1,031 | ) | ||||||||
Depreciation and amortization | — | (556 | ) | (347 | ) | (4,007 | ) | ||||||||
Impairment charges | — | (25 | ) | (1,939 | ) | (25 | ) | ||||||||
Interest income | — | — | — | 12 | |||||||||||
Gain (loss) on sale of hotel properties | (9 | ) | 15 | 394 | 14,024 | ||||||||||
Interest expense and amortization of loan costs | — | (425 | ) | (525 | ) | (3,665 | ) | ||||||||
Write-off of loan costs and exit fees | — | — | (524 | ) | (98 | ) | |||||||||
Income (loss) before income taxes | 66 | (520 | ) | (1,709 | ) | 11,125 | |||||||||
(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership | (10 | ) | 82 | 254 | (1,750 | ) | |||||||||
Net income (loss) attributable to the Company | $ | 56 | $ | (438 | ) | $ | (1,455 | ) | $ | 9,375 |
December 31, 2017 | |||
Assets | |||
Investments in hotel properties, net | $ | 17,732 | |
Cash and cash equivalents | 78 | ||
Restricted cash | 402 | ||
Accounts receivable | 127 | ||
Inventories | 1 | ||
Prepaid expenses | 21 | ||
Other assets | 31 | ||
Due from third-party hotel managers | 31 | ||
Assets held for sale | $ | 18,423 | |
Liabilities | |||
Indebtedness, net | $ | 13,221 | |
Accounts payable and accrued expenses | 662 | ||
Due to related party, net | 94 | ||
Liabilities related to assets held for sale | $ | 13,977 |
September 30, 2018 | December 31, 2017 | ||||||
Total assets | $ | 389,818 | $ | 114,810 | |||
Total liabilities | $ | 121,763 | $ | 78,742 | |||
Series B cumulative convertible preferred stock | 200,578 | — | |||||
Redeemable noncontrolling interests | 3,778 | 5,111 | |||||
Total stockholders’ equity of Ashford Inc. | 63,050 | 30,185 | |||||
Noncontrolling interests in consolidated entities | 649 | 772 | |||||
Total equity | 63,699 | 30,957 | |||||
Total liabilities and equity | $ | 389,818 | $ | 114,810 | |||
Our ownership interest in Ashford Inc. | $ | 1,763 | $ | 437 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total revenue | $ | 41,565 | $ | 19,255 | $ | 144,544 | $ | 51,907 | |||||||
Total operating expenses | (53,069 | ) | (21,595 | ) | (150,214 | ) | (54,965 | ) | |||||||
Operating income (loss) | (11,504 | ) | (2,340 | ) | (5,670 | ) | (3,058 | ) | |||||||
Realized and unrealized gain (loss) on investments, net | — | — | — | (91 | ) | ||||||||||
Interest expense and loan amortization costs | (419 | ) | (20 | ) | (770 | ) | (35 | ) | |||||||
Other income (expense) | 25 | 77 | (50 | ) | 220 | ||||||||||
Income tax (expense) benefit | 13,904 | 25 | 11,593 | (9,248 | ) | ||||||||||
Net income (loss) | 2,006 | (2,258 | ) | 5,103 | (12,212 | ) | |||||||||
(Income) loss from consolidated entities attributable to noncontrolling interests | 413 | 102 | 704 | 267 | |||||||||||
Net (income) loss attributable to redeemable noncontrolling interests | 968 | 300 | 817 | 995 | |||||||||||
Net income (loss) attributable to Ashford Inc. | 3,387 | (1,856 | ) | 6,624 | (10,950 | ) | |||||||||
Preferred dividends | (1,675 | ) | — | (1,675 | ) | — | |||||||||
Amortization of preferred stock discount | (303 | ) | — | (303 | ) | — | |||||||||
Net income attributable to common shareholders | $ | 1,409 | $ | (1,856 | ) | $ | 4,646 | $ | (10,950 | ) | |||||
Our equity in earnings (loss) of Ashford Inc. | $ | 470 | $ | (568 | ) | $ | 1,326 | $ | (3,291 | ) |
September 30, 2018 | December 31, 2017 | ||||||
Carrying value of the investment in OpenKey (in thousands) | $ | 2,751 | $ | 2,518 | |||
Ownership interest in OpenKey | 16.3 | % | 16.2 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Line Item | 2018 | 2017 | 2018 | 2017 | |||||||||||
Equity in earnings (loss) in unconsolidated entity | $ | (160 | ) | $ | (111 | ) | $ | (434 | ) | $ | (341 | ) |
Indebtedness | Collateral | Maturity | Interest Rate | September 30, 2018 | December 31, 2017 | |||||||||
Secured credit facility (3) | None | September 2019 | Base Rate (2) + 1.65% or LIBOR (1) + 2.65% | $ | — | $ | — | |||||||
Mortgage loan (4) | 8 hotels | January 2018 | LIBOR (1) + 4.95% | — | 376,800 | |||||||||
Mortgage loan (5) | 22 hotels | April 2018 | LIBOR (1) + 4.39% | — | 971,654 | |||||||||
Mortgage loan (6) | 1 hotel | July 2018 | LIBOR (1) + 5.10% | — | 40,500 | |||||||||
Mortgage loan (6) (7) | 3 hotel | August 2018 | LIBOR (1) + 4.35% | — | 52,530 | |||||||||
Mortgage loan (6) | 6 hotels | August 2018 | LIBOR (1) + 4.35% | — | 280,421 | |||||||||
Mortgage loan (6) (8) | 17 hotels | October 2018 | LIBOR (1) + 4.55% | — | 450,000 | |||||||||
Mortgage loan (6) | 5 hotels | February 2019 | LIBOR (1) + 4.75% | — | 200,000 | |||||||||
Mortgage loan (6) | 1 hotel | April 2019 | LIBOR (1) + 4.95% | — | 33,300 | |||||||||
Mortgage loan (6) | 1 hotel | May 2019 | LIBOR (1) + 5.10% | — | 25,100 | |||||||||
Mortgage loan (9) | 1 hotel | June 2019 | LIBOR (1) + 5.10% | 43,750 | 43,750 | |||||||||
Mortgage loan | 1 hotel | July 2019 | 4.00% | 5,267 | 5,336 | |||||||||
Mortgage loan (10) | 1 hotel | July 2019 | LIBOR (1) + 4.15% | 35,200 | 35,200 | |||||||||
Mortgage loan (10) | 8 hotels | July 2019 | LIBOR (1) + 4.09% | 144,000 | 144,000 | |||||||||
Mortgage loan (11) | 1 hotel | August 2019 | LIBOR (1) + 4.95% | 7,778 | 12,000 | |||||||||
Mortgage loan (12) | 17 hotels | November 2019 | LIBOR (1) + 3.00% | 427,000 | 427,000 | |||||||||
Mortgage loan (4) | 8 hotels | February 2020 | LIBOR (1) + 2.92% | 395,000 | — | |||||||||
Mortgage loan (5) | 21 hotels | April 2020 | LIBOR (1) + 3.20% | 962,575 | — | |||||||||
Mortgage loan (13) | 1 hotel | May 2020 | LIBOR (1) + 2.90% | 16,100 | 16,100 | |||||||||
Mortgage loan (6) | 7 hotels | June 2020 | LIBOR (1) + 3.65% | 180,720 | — | |||||||||
Mortgage loan (6) | 7 hotels | June 2020 | LIBOR (1) + 3.39% | 174,400 | — | |||||||||
Mortgage loan (6) | 5 hotels | June 2020 | LIBOR (1) + 3.73% | 221,040 | — | |||||||||
Mortgage loan (6) | 5 hotels | June 2020 | LIBOR (1) + 4.02% | 262,640 | — | |||||||||
Mortgage loan (6) (14) | 5 hotels | June 2020 | LIBOR (1) + 2.73% | 160,000 | — | |||||||||
Mortgage loan (6) | 5 hotels | June 2020 | LIBOR (1) + 3.68% | 215,120 | — | |||||||||
Mortgage loan | 1 hotel | November 2020 | 6.26% | 93,891 | 95,207 | |||||||||
Mortgage loan (15) | 2 hotels | June 2022 | LIBOR (1) + 3.00% | 174,211 | 164,700 | |||||||||
Mortgage loan | 1 hotel | November 2022 | LIBOR (1) + 2.00% | 97,000 | 97,000 | |||||||||
Mortgage loan | 1 hotel | May 2023 | 5.46% | 53,086 | 53,789 | |||||||||
Mortgage loan (16) | 1 hotel | June 2023 | LIBOR (1) + 2.45% | 73,450 | — | |||||||||
Mortgage loan | 1 hotel | January 2024 | 5.49% | 6,913 | 7,000 | |||||||||
Mortgage loan | 1 hotel | January 2024 | 5.49% | 10,089 | 10,216 | |||||||||
Mortgage loan | 1 hotel | May 2024 | 4.99% | 6,444 | 6,530 | |||||||||
Mortgage loan | 3 hotels | August 2024 | 5.20% | 65,572 | 66,224 | |||||||||
Mortgage loan | 2 hotels | August 2024 | 4.85% | 12,114 | 12,242 | |||||||||
Mortgage loan | 3 hotels | August 2024 | 4.90% | 24,215 | 24,471 | |||||||||
Mortgage loan | 2 hotels | February 2025 | 4.45% | 19,962 | 20,214 | |||||||||
Mortgage loan | 3 hotels | February 2025 | 4.45% | 51,633 | 52,284 | |||||||||
3,939,170 | 3,723,568 | |||||||||||||
Premiums, net | 1,363 | 1,570 | ||||||||||||
Deferred loan costs, net | (46,086 | ) | (15,617 | ) | ||||||||||
$ | 3,894,447 | $ | 3,709,521 | |||||||||||
Indebtedness related to assets held for sale (7) | 1 hotel | August 2018 | LIBOR (1) + 4.35% | — | 5,992 | |||||||||
Indebtedness related to assets held for sale (8) | 1 hotel | October 2018 | LIBOR (1) + 4.55% | — | 7,229 | |||||||||
Indebtedness, net | $ | 3,894,447 | $ | 3,696,300 |
(1) | LIBOR rates were 2.261% and 1.564% at September 30, 2018 and December 31, 2017, respectively. |
(2) | Base Rate, as defined in the secured credit facility agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%. |
(3) | On September 27, 2018, we established a secured credit facility with borrowing capacity of up to $100.0 million. |
(4) | On January 17, 2018, we refinanced this mortgage loan totaling $376.8 million set to mature in January 2018 with a new $395.0 million mortgage loan with a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.92%. |
(5) | On April 9, 2018, we refinanced this mortgage loan totaling $971.7 million set to mature in April 2018 with a new $985.0 million mortgage loan with a two-year initial term and five one-year extension options, subject to satisfaction of certain conditions. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 3.20%. A portion of this mortgage loan relates to the Tampa Residence Inn, which was sold on May 10, 2018, resulting in a $22.5 million paydown. See note 5. |
(6) | On June 13, 2018, we refinanced seven mortgage loans totaling $1.068 billion set to mature between July 2018 and May 2019 with six new mortgage loans totaling $1.270 billion. Each new mortgage loan has a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The new mortgage loans are interest only. |
(7) | A portion of this mortgage loan at December 31, 2017 relates to the SpringHill Suites Centreville. The property was sold on May 1, 2018. See note 5. |
(8) | A portion of this mortgage loan at December 31, 2017 relates to the SpringHill Suites Glen Allen. The property was sold on February 20, 2018. See note 5. |
(9) | This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The second one-year extension period began in June 2018. |
(10) | This mortgage loan has three one-year extension options subject to satisfaction of certain conditions. The second one-year extension period began in July 2018. |
(11) | This mortgage loan has two one-year extension options subject to satisfaction of certain conditions. Concurrent with the first one-year extension, which began in August 2018, a principal paydown of $4.2 million was made. |
(12) | This mortgage loan has five one-year extension options subject to satisfaction of certain conditions. |
(13) | This mortgage loan has two one-year extension options subject to satisfaction of certain conditions. |
(14) | On July 3, 2018, Ashford Hospitality Finance, one of our consolidated subsidiaries, purchased $56.3 million of this mortgage loan. |
(15) | This $181.0 million mortgage loan had an initial advance was $164.7 million in May 2017. In February, May, and June 2018, additional advances of $6.5 million, $1.1 million and $1.9 million, respectively, were used for a capital expenditures project at one of the hotels securing this mortgage loan. |
(16) | This new mortgage loan has a five-year term, is interest-only loan and bears interest at a rate of LIBOR + 2.45%. |
Mortgage Loan | Principal Amount (in thousands) | Interest Rate | Secured Hotel Properties | |||||
A | $ | 180,720 | LIBOR + 3.65% | Courtyard Columbus Tipton Lakes | ||||
Courtyard Scottsdale Old Town | ||||||||
Residence Inn Phoenix Airport | ||||||||
SpringHill Suites Manhattan Beach | ||||||||
SpringHill Suites Plymouth Meeting | ||||||||
Residence Inn Las Vegas Hughes Center | ||||||||
Residence Inn Newark | ||||||||
B | $ | 174,400 | LIBOR + 3.39% | Courtyard Newark | ||||
SpringHill Suites BWI | ||||||||
Courtyard Oakland Airport | ||||||||
Courtyard Plano Legacy | ||||||||
Residence Inn Plano | ||||||||
TownePlace Suites Manhattan Beach | ||||||||
Courtyard Basking Ridge | ||||||||
C | $ | 221,040 | LIBOR + 3.73% | Sheraton San Diego Mission Valley | ||||
Sheraton Bucks County | ||||||||
Hilton Ft. Worth | ||||||||
Hyatt Regency Coral Gables | ||||||||
Hilton Minneapolis | ||||||||
D | $ | 262,640 | LIBOR + 4.02% | Hilton Santa Fe | ||||
Embassy Suites Dulles | ||||||||
Marriott Beverly Hills | ||||||||
One Ocean | ||||||||
Marriott Suites Dallas Market Center | ||||||||
E (1) | $ | 216,320 | LIBOR + 4.36% | Marriott Memphis East | ||||
Embassy Suites Philadelphia Airport | ||||||||
Sheraton Anchorage | ||||||||
Lakeway Resort & Spa | ||||||||
Marriott Fremont | ||||||||
F | $ | 215,120 | LIBOR + 3.68% | W Atlanta Downtown | ||||
Embassy Suites Flagstaff | ||||||||
Embassy Suites Walnut Creek | ||||||||
Marriott Bridgewater | ||||||||
Marriott Durham Research Triangle Park |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Line Item | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest expense - premium amortization | $ | 69 | $ | 185 | $ | 207 | $ | 1,767 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income (loss) allocated to common stockholders: | |||||||||||||||
Income (loss) attributable to the Company | $ | (27,589 | ) | $ | (21,808 | ) | $ | (72,166 | ) | $ | (37,037 | ) | |||
Less: Dividends on preferred stock | (10,645 | ) | (11,440 | ) | (31,933 | ) | (33,352 | ) | |||||||
Less: Extinguishment of issuance costs upon redemption of preferred stock | — | (4,507 | ) | — | (4,507 | ) | |||||||||
Less: Dividends on common stock | (11,897 | ) | (11,439 | ) | (35,138 | ) | (34,316 | ) | |||||||
Less: Dividends on unvested performance stock units | (123 | ) | (98 | ) | (368 | ) | (294 | ) | |||||||
Less: Dividends on unvested restricted shares | (206 | ) | (251 | ) | (638 | ) | (709 | ) | |||||||
Undistributed income (loss) | (50,460 | ) | (49,543 | ) | (140,243 | ) | (110,215 | ) | |||||||
Add back: Dividends on common stock | 11,897 | 11,439 | 35,138 | 34,316 | |||||||||||
Distributed and undistributed income (loss) - basic and diluted | $ | (38,563 | ) | $ | (38,104 | ) | $ | (105,105 | ) | $ | (75,899 | ) | |||
Weighted average shares outstanding: | |||||||||||||||
Weighted average common shares outstanding - basic and diluted | 97,467 | 95,332 | 96,591 | 95,169 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
Net income (loss) allocated to common stockholders per share | $ | (0.40 | ) | $ | (0.40 | ) | $ | (1.09 | ) | $ | (0.80 | ) | |||
Diluted income (loss) per share: | |||||||||||||||
Net income (loss) allocated to common stockholders per share | $ | (0.40 | ) | $ | (0.40 | ) | $ | (1.09 | ) | $ | (0.80 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income (loss) allocated to common stockholders is not adjusted for: | |||||||||||||||
Income (loss) allocated to unvested restricted shares | $ | 206 | $ | 251 | $ | 638 | $ | 709 | |||||||
Income (loss) allocated to unvested performance stock units | 123 | 98 | 368 | 294 | |||||||||||
Income (loss) attributable to noncontrolling interest in operating partnership units | (6,682 | ) | (6,940 | ) | (18,087 | ) | (13,202 | ) | |||||||
Total | $ | (6,353 | ) | $ | (6,591 | ) | $ | (17,081 | ) | $ | (12,199 | ) | |||
Weighted average diluted shares are not adjusted for: | |||||||||||||||
Effect of unvested restricted shares | 119 | 368 | 124 | 284 | |||||||||||
Effect of unvested performance stock units | 4 | 250 | 335 | 97 | |||||||||||
Effect of assumed conversion of operating partnership units | 17,443 | 17,551 | 17,669 | 17,367 | |||||||||||
Effect of advisory services incentive fee shares | 286 | 277 | 296 | 287 | |||||||||||
Total | 17,852 | 18,446 | 18,424 | 18,035 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Interest rate caps: | |||||||
Notional amount (in thousands) | $ | 3,589,618 | $ | 2,112,700 | |||
Strike rate low end of range | 1.50 | % | 1.50 | % | |||
Strike rate high end of range | 5.71 | % | 5.84 | % | |||
Effective date range | January 2018 - August 2018 | February 2017 - August 2017 | |||||
Maturity date range | January 2019 - July 2020 | February 2018 - June 2019 | |||||
Total cost (in thousands) | $ | 3,103 | $ | 633 | |||
Interest rate floors: | |||||||
Notional amount (in thousands) | $ | 12,000,000 | $ | 4,000,000 | |||
Strike rate low end of range | 1.38 | % | 1.00 | % | |||
Strike rate high end of range | 2.00 | % | 1.00 | % | |||
Effective date range | July 2018 | September 2017 | |||||
Termination date range | September 2019 - December 2019 | March 2019 | |||||
Total cost (in thousands) | $ | 413 | $ | 163 |
Interest rate caps: | ||||
Notional amount (in thousands) | $ | 4,378,718 | (1) | |
Strike rate low end of range | 1.50 | % | ||
Strike rate high end of range | 5.71 | % | ||
Effective date range | October 2016 - August 2018 | |||
Maturity date range | October 2018 - July 2020 | |||
Aggregate principle balance on corresponding mortgage loans (in thousands) | $ | 3,492,984 | ||
Interest rate floors: (2) | ||||
Notional amount (in thousands) | $ | 28,750,000 | (1) | |
Strike rate low end of range | (0.25 | )% | ||
Strike rate high end of range | 2.00 | % | ||
Maturity date range | March 2019 - July 2020 |
(1) | These instruments were not designated as cash flow hedges. |
(2) | 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. |
• | 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 | |||||||||||||||||
September 30, 2018: | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||
Interest rate derivatives - floors | $ | — | $ | 106 | $ | — | $ | 130 | $ | 236 | (2) | ||||||||||
Interest rate derivatives - caps | — | 1,491 | — | — | 1,491 | (2) | |||||||||||||||
Credit default swaps | — | (969 | ) | — | 2,211 | 1,242 | (2) | ||||||||||||||
— | 628 | — | 2,341 | 2,969 | |||||||||||||||||
Non-derivative assets: | |||||||||||||||||||||
Equity securities | 24,173 | — | — | — | 24,173 | (3) | |||||||||||||||
Total | $ | 24,173 | $ | 628 | $ | — | $ | 2,341 | $ | 27,142 | |||||||||||
Liabilities | |||||||||||||||||||||
Derivative liabilities: | |||||||||||||||||||||
Credit default swaps | $ | — | $ | (805 | ) | $ | — | $ | 600 | $ | (205 | ) | (4) | ||||||||
Net | $ | 24,173 | $ | (177 | ) | $ | — | $ | 2,941 | $ | 26,937 | ||||||||||
December 31, 2017: | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||
Interest rate derivatives - floors | $ | — | $ | 311 | $ | — | $ | 32 | $ | 343 | (2) | ||||||||||
Interest rate derivatives - caps | — | 137 | — | — | 137 | (2) | |||||||||||||||
Credit default swaps | — | (469 | ) | — | 1,999 | 1,530 | (2) | ||||||||||||||
— | (21 | ) | — | 2,031 | 2,010 | ||||||||||||||||
Non-derivative assets: | |||||||||||||||||||||
Equity securities | 26,926 | — | — | — | 26,926 | (3) | |||||||||||||||
Total | $ | 26,926 | $ | (21 | ) | $ | — | $ | 2,031 | $ | 28,936 |
(1) | Represents net cash collateral posted between us and our counterparties. |
(2) | Reported net as “derivative assets, net” in our consolidated balance sheets. |
(3) | Reported as “marketable securities” in our consolidated balance sheets. |
(4) | Reported net as “derivative liabilities, net” in our consolidated balance sheets. |
Gain (Loss) Recognized in Income | ||||||||
Three Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
Assets | ||||||||
Derivative assets: | ||||||||
Interest rate derivatives - floors | $ | (380 | ) | $ | (291 | ) | ||
Interest rate derivatives - caps | (38 | ) | (96 | ) | ||||
Credit default swaps | (1,029 | ) | (4) | (1,380 | ) | (4) | ||
(1,447 | ) | (1,767 | ) | |||||
Non-derivative assets: | ||||||||
Equity | 92 | 12 | ||||||
Total | (1,355 | ) | (1,755 | ) | ||||
Liabilities | ||||||||
Derivative liabilities: | ||||||||
Credit default swaps | (638 | ) | (4) | (887 | ) | (4) | ||
Net | $ | (1,993 | ) | $ | (2,642 | ) | ||
Total combined | ||||||||
Interest rate derivatives - floors | $ | (380 | ) | $ | (291 | ) | ||
Interest rate derivatives - caps | (38 | ) | (96 | ) | ||||
Credit default swaps | (1,667 | ) | (1,092 | ) | ||||
Unrealized gain (loss) on derivatives | (2,085 | ) | (1) | (1,479 | ) | (1) | ||
Realized gain (loss) on credit default swaps | — | (2) (4) | (1,175 | ) | (2) (4) | |||
Unrealized gain (loss) on marketable securities | 68 | (3) | (936 | ) | (3) | |||
Realized gain (loss) on marketable securities | 24 | (2) | 948 | (2) | ||||
Net | $ | (1,993 | ) | $ | (2,642 | ) |
(1) | Reported as “unrealized gain (loss) on derivatives” in our consolidated statements of operations. |
(2) | Included in “other income (expense)” in our consolidated statements of operations. |
(3) | Reported as “unrealized gain (loss) on marketable securities” in our consolidated statements of operations. |
(4) | Excludes costs of $272 and $257 for the three months ended September 30, 2018 and 2017, respectively, included in “other income (expense)” associated with credit default swaps. |
Gain (Loss) Recognized in Income | ||||||||
Nine Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
Assets | ||||||||
Derivative assets: | ||||||||
Interest rate derivatives - floors | $ | (618 | ) | $ | (2,233 | ) | ||
Interest rate derivatives - caps | (1,749 | ) | (613 | ) | ||||
Credit default swaps | (785 | ) | (4) | (2,100 | ) | (4) | ||
Options on futures contracts | — | (116 | ) | |||||
(3,152 | ) | (5,062 | ) | |||||
Non-derivative assets: | ||||||||
Equity | (585 | ) | (3,991 | ) | ||||
Total | (3,737 | ) | (9,053 | ) | ||||
Liabilities | ||||||||
Derivative liabilities: | ||||||||
Credit default swaps | (520 | ) | (4) | (1,450 | ) | (4) | ||
Net | $ | (4,257 | ) | $ | (10,503 | ) | ||
Total combined | ||||||||
Interest rate derivatives - floors | $ | (618 | ) | $ | (2,233 | ) | ||
Interest rate derivatives - caps | (1,749 | ) | (613 | ) | ||||
Credit default swaps | (1,305 | ) | 615 | |||||
Options on futures contracts | — | 427 | ||||||
Unrealized gain (loss) on derivatives | (3,672 | ) | (1) | (1,804 | ) | (1) | ||
Realized gain (loss) on credit default swaps | — | (2) (4) | (4,165 | ) | (2) (4) | |||
Realized gain (loss) on options on futures contracts | — | (2) | (543 | ) | (2) | |||
Unrealized gain (loss) on marketable securities | (758 | ) | (3) | (4,813 | ) | (3) | ||
Realized gain (loss) on marketable securities | 173 | (2) | 822 | (2) | ||||
Net | $ | (4,257 | ) | $ | (10,503 | ) |
(1) | Reported as “unrealized gain (loss) on derivatives” in our consolidated statements of operations. |
(2) | Included in “other income (expense)” in our consolidated statements of operations. |
(3) | Reported as “unrealized gain (loss) on marketable securities” in our consolidated statements of operations. |
(4) | Excludes costs of $809 and $769 for the nine months ended September 30, 2018 and 2017, respectively, included in “other income (expense)” associated with credit default swaps. |
September 30, 2018 | December 31, 2017 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Financial assets and liabilities measured at fair value: | |||||||||||||||
Marketable securities | $ | 24,173 | $ | 24,173 | $ | 26,926 | $ | 26,926 | |||||||
Derivative assets, net | 2,969 | 2,969 | 2,010 | 2,010 | |||||||||||
Derivative liabilities, net | 205 | 205 | — | — | |||||||||||
Financial assets not measured at fair value: | |||||||||||||||
Cash and cash equivalents (1) | $ | 325,839 | $ | 325,839 | $ | 354,883 | $ | 354,883 | |||||||
Restricted cash (1) | 141,092 | 141,092 | 117,189 | 117,189 | |||||||||||
Accounts receivable, net (1) | 60,208 | 60,208 | 44,384 | 44,384 | |||||||||||
Due from third-party hotel managers | 19,277 | 19,277 | 17,418 | 17,418 | |||||||||||
Financial liabilities not measured at fair value: | |||||||||||||||
Indebtedness (1) | $ | 3,940,533 | $3,769,744 to $4,166,559 | $ | 3,725,138 | $3,559,993 to $3,934,727 | |||||||||
Accounts payable and accrued expenses (1) | 147,808 | 147,808 | 133,063 | 133,063 | |||||||||||
Dividends and distributions payable | 28,095 | 28,095 | 25,045 | 25,045 | |||||||||||
Due to Ashford Inc., net | 5,176 | 5,176 | 15,146 | 15,146 | |||||||||||
Due to related party, net (1) | 1,078 | 1,078 | 1,161 | 1,161 | |||||||||||
Due to third-party hotel managers | 2,745 | 2,745 | 2,431 | 2,431 |
(1) | Includes balances associated with assets held for sale and liabilities associated with assets held for sale as of December 31, 2017. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
Type | Line Item | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Performance LTIP units | Advisory services fee | $ | 1,292 | $ | 964 | $ | 5,505 | $ | 1,312 | |||||||||
LTIP units | Advisory services fee | 933 | 980 | 2,576 | 1,962 | |||||||||||||
LTIP units - independent directors | Corporate, general and administrative | — | — | 536 | 475 |
September 30, 2018 | December 31, 2017 | ||||||
Redeemable noncontrolling interests | $ | 118,663 | $ | 116,122 | |||
Adjustments to redeemable noncontrolling interests (1) | 173,649 | 154,262 | |||||
Ownership percentage of operating partnership | 14.88 | % | 15.52 | % |
(1) | Reflects the excess of the redemption value over the accumulated historical costs. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Allocated net (income) loss to the redeemable noncontrolling interests | $ | 6,682 | $ | 6,940 | $ | 18,087 | $ | 13,202 | |||||||
Aggregate cash distributions to holders of common units and LTIP units | 2,480 | 2,556 | 7,429 | 7,655 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Line Item | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Advisory services fee | $ | 1,550 | $ | 1,642 | $ | 5,298 | $ | 3,371 | ||||||||
Management fees | 287 | 222 | 870 | 439 | ||||||||||||
Corporate general and administrative | — | — | — | 90 | ||||||||||||
$ | 1,837 | $ | 1,864 | $ | 6,168 | $ | 3,900 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Line Item | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Advisory services fee | $ | 1,081 | $ | 806 | $ | 7,161 | $ | 1,102 |
Three Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
8.45% Series D cumulative preferred stock | $ | 0.5281 | $ | 0.5281 | ||||
7.375% Series F cumulative preferred stock | 0.4609 | 0.4609 | ||||||
7.375% Series G cumulative preferred stock | 0.4609 | 0.4609 | ||||||
7.50% Series H cumulative preferred stock | 0.4688 | 0.1875 | (1) | |||||
7.50% Series I cumulative preferred stock | 0.4688 | — |
(1) | Pro-rated for the number of days the Series H cumulative preferred stock was outstanding during the quarter. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2018 | 2017 | ||||||
Common shares issued | 2,434 | — | |||||
Gross proceed received | $ | 15,522 | $ | — | |||
Commissions and other expenses | 194 | — | |||||
Net proceeds | $ | 15,328 | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Line Item | 2018 | 2017 | 2018 | 2017 | ||||||||||||
(Income) loss allocated to noncontrolling interests in consolidated entities | $ | (10 | ) | $ | (22 | ) | $ | 8 | $ | (4 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Advisory services fee | |||||||||||||||
Base advisory fee | $ | 9,156 | $ | 8,579 | $ | 26,644 | $ | 25,934 | |||||||
Reimbursable expenses (1) | 2,251 | 1,641 | 5,777 | 5,800 | |||||||||||
Equity-based compensation (2) | 4,855 | 4,392 | 20,540 | 7,748 | |||||||||||
Incentive fee | (3,457 | ) | — | — | — | ||||||||||
Total advisory services fee | $ | 12,805 | $ | 14,612 | $ | 52,961 | $ | 39,482 |
(1) | Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services. |
(2) | Equity-based compensation is associated with equity grants of Ashford Trust’s common stock, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC. |
Three Months Ended September 30, 2018 | ||||||||||||||||||||||||
Company | Product or Service | Total, net | Investments in Hotel Properties, net (1) | Indebtedness, net (2) | Other Hotel Revenue | Other Hotel Expenses | Corporate, General and Administrative | |||||||||||||||||
OpenKey | Mobile key app | $ | 28 | $ | — | $ | — | $ | — | $ | 28 | $ | — | |||||||||||
Pure Rooms | Hypoallergenic premium rooms | 1,430 | 1,417 | — | — | 13 | — | |||||||||||||||||
Lismore Capital | Mortgage placement services | 350 | — | (350 | ) | — | — | — | ||||||||||||||||
J&S Audio Visual | Audiovisual commissions or equipment | 1,296 | 74 | — | 1,222 | — | — | |||||||||||||||||
AIM | Cash management services | 339 | — | — | — | — | 339 | |||||||||||||||||
Premier | Project management services | 2,491 | 2,491 | — | — | — | — | |||||||||||||||||
Ashford LLC | Insurance claims services | 17 | — | — | — | — | 17 |
(1) | Recorded in furniture, fixtures and equipment and depreciated over the estimated useful life. |
(2) | Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement. |
Nine Months Ended September 30, 2018 | ||||||||||||||||||||||||
Company | Product or Service | Total, net | Investments in Hotel Properties, net (1) | Indebtedness, net (2) | Other Hotel Revenue | Other Hotel Expenses | Corporate, General and Administrative | |||||||||||||||||
OpenKey | Mobile key app | $ | 81 | $ | — | $ | — | $ | — | $ | 81 | $ | — | |||||||||||
Pure Rooms | Hypoallergenic premium rooms | 1,919 | 1,903 | — | — | 16 | — | |||||||||||||||||
Lismore Capital | Mortgage placement services | 4,942 | — | (4,942 | ) | — | — | — | ||||||||||||||||
J&S Audio Visual | Audiovisual commissions or equipment | 3,441 | 917 | — | 2,524 | — | — | |||||||||||||||||
AIM | Cash management services | 850 | — | — | — | — | 850 | |||||||||||||||||
Premier | Project management services | 2,491 | 2,491 | — | — | — | — | |||||||||||||||||
Ashford LLC | Insurance claims services | 53 | — | — | — | — | 53 |
(1) | Recorded in furniture, fixtures and equipment and depreciated over the estimated useful life. |
(2) | Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement. |
September 30, 2018 | December 31, 2017 | |||||||||
Company | Product or Service | Due to Ashford Inc. | ||||||||
Ashford LLC | Advisory services | $ | 1,915 | $ | 14,547 | |||||
OpenKey | Mobile key app | 14 | 8 | |||||||
Pure Rooms | Hypoallergenic premium rooms | 207 | 296 | |||||||
Lismore Capital | Mortgage placement services | — | — | |||||||
J&S Audio Visual | Audiovisual commissions or equipment | 1,464 | (52 | ) | ||||||
AIM | Investment management services | 140 | 347 | |||||||
Premier | Project management services | 1,419 | — | |||||||
Ashford LLC | Insurance claims services | 17 | — | |||||||
$ | 5,176 | $ | 15,146 |
• | 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, 2017, as filed with the Securities and Exchange Commission on March 14, 2018, 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 Ashford LLC, Ashford Inc., 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 will be accretive to our portfolio; |
• | disposition of non-core hotel properties; |
• | pursuing capital market activities to enhance long-term stockholder value; |
• | preserving capital, enhancing liquidity, and continuing current cost-saving measures; |
• | 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; and |
• | making other investments or divestitures that our board of directors deems appropriate. |
Mortgage Loan | Principal Amount (in thousands) | Interest Rate | Secured Hotel Properties | |||||
A | $ | 180,720 | LIBOR + 3.65% | Courtyard Columbus Tipton Lakes | ||||
Courtyard Scottsdale Old Town | ||||||||
Residence Inn Phoenix Airport | ||||||||
SpringHill Suites Manhattan Beach | ||||||||
SpringHill Suites Plymouth Meeting | ||||||||
Residence Inn Las Vegas Hughes Center | ||||||||
Residence Inn Newark | ||||||||
B | $ | 174,400 | LIBOR + 3.39% | Courtyard Newark | ||||
SpringHill Suites BWI | ||||||||
Courtyard Oakland Airport | ||||||||
Courtyard Plano Legacy | ||||||||
Residence Inn Plano | ||||||||
TownePlace Suites Manhattan Beach | ||||||||
Courtyard Basking Ridge | ||||||||
C | $ | 221,040 | LIBOR + 3.73% | Sheraton San Diego Mission Valley | ||||
Sheraton Bucks County | ||||||||
Hilton Ft. Worth | ||||||||
Hyatt Regency Coral Gables | ||||||||
Hilton Minneapolis | ||||||||
D | $ | 262,640 | LIBOR + 4.02% | Hilton Santa Fe | ||||
Embassy Suites Dulles | ||||||||
Marriott Beverly Hills | ||||||||
One Ocean | ||||||||
Marriott Suites Dallas Market Center | ||||||||
E (1) | $ | 216,320 | LIBOR + 4.36% | Marriott Memphis East | ||||
Embassy Suites Philadelphia Airport | ||||||||
Sheraton Anchorage | ||||||||
Lakeway Resort & Spa | ||||||||
Marriott Fremont | ||||||||
F | $ | 215,120 | LIBOR + 3.68% | W Atlanta Downtown | ||||
Embassy Suites Flagstaff | ||||||||
Embassy Suites Walnut Creek | ||||||||
Marriott Bridgewater | ||||||||
Marriott Durham Research Triangle Park |
Three Months Ended September 30, | Favorable/ (Unfavorable) Change | Nine Months Ended September 30, | Favorable/ (Unfavorable) Change | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Total revenue | $ | 355,930 | $ | 353,325 | $ | 2,605 | $ | 1,087,301 | $ | 1,097,704 | $ | (10,403 | ) | ||||||||||
Total hotel operating expenses | (225,036 | ) | (226,571 | ) | 1,535 | (676,702 | ) | (688,554 | ) | 11,852 | |||||||||||||
Property taxes, insurance and other | (20,774 | ) | (18,194 | ) | (2,580 | ) | (59,363 | ) | (55,293 | ) | (4,070 | ) | |||||||||||
Depreciation and amortization | (64,923 | ) | (60,135 | ) | (4,788 | ) | (192,536 | ) | (185,380 | ) | (7,156 | ) | |||||||||||
Impairment charges | 27 | (1,785 | ) | 1,812 | (1,652 | ) | (1,785 | ) | 133 | ||||||||||||||
Transaction costs | — | — | — | (11 | ) | (11 | ) | — | |||||||||||||||
Advisory services fee | (12,805 | ) | (14,612 | ) | 1,807 | (52,961 | ) | (39,482 | ) | (13,479 | ) | ||||||||||||
Corporate general and administrative | (3,090 | ) | (2,412 | ) | (678 | ) | (8,450 | ) | (10,836 | ) | 2,386 | ||||||||||||
Operating income (loss) | 29,329 | 29,616 | (287 | ) | 95,626 | 116,363 | (20,737 | ) | |||||||||||||||
Equity in earnings (loss) of unconsolidated entities | 310 | (679 | ) | 989 | 892 | (3,580 | ) | 4,472 | |||||||||||||||
Interest income | 1,150 | 706 | 444 | 2,779 | 1,460 | 1,319 | |||||||||||||||||
Gain (loss) on sale of hotel properties | (9 | ) | 15 | (24 | ) | 394 | 14,024 | (13,630 | ) | ||||||||||||||
Other income (expense) | (202 | ) | (273 | ) | 71 | 80 | (3,539 | ) | 3,619 | ||||||||||||||
Interest expense and amortization of loan costs | (60,731 | ) | (56,963 | ) | (3,768 | ) | (173,680 | ) | (167,224 | ) | (6,456 | ) | |||||||||||
Write-off of premiums, loan costs and exit fees | (1,572 | ) | — | (1,572 | ) | (9,316 | ) | (1,629 | ) | (7,687 | ) | ||||||||||||
Unrealized gain (loss) on marketable securities | 68 | (936 | ) | 1,004 | (758 | ) | (4,813 | ) | 4,055 | ||||||||||||||
Unrealized gain (loss) on derivatives | (2,085 | ) | (1,479 | ) | (606 | ) | (3,672 | ) | (1,804 | ) | (1,868 | ) | |||||||||||
Income tax (expense) benefit | (519 | ) | 1,267 | (1,786 | ) | (2,606 | ) | 507 | (3,113 | ) | |||||||||||||
Net income (loss) | (34,261 | ) | (28,726 | ) | (5,535 | ) | (90,261 | ) | (50,235 | ) | (40,026 | ) | |||||||||||
(Income) loss from consolidated entities attributable to noncontrolling interests | (10 | ) | (22 | ) | 12 | 8 | (4 | ) | 12 | ||||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 6,682 | 6,940 | (258 | ) | 18,087 | 13,202 | 4,885 | ||||||||||||||||
Net income (loss) attributable to the Company | $ | (27,589 | ) | $ | (21,808 | ) | $ | (5,781 | ) | $ | (72,166 | ) | $ | (37,037 | ) | $ | (35,129 | ) |
Hotel Property | Location | Type | Date | |||
Renaissance (1) | Portsmouth, VA | Disposition | February 1, 2017 | |||
Embassy Suites (1) | Syracuse, NY | Disposition | March 6, 2017 | |||
Crowne Plaza Ravinia (1) | Atlanta, GA | Disposition | June 29, 2017 | |||
SpringHill Suites (1) | Glen Allen, VA | Disposition | February 20, 2018 | |||
SpringHill Suites (1) | Centreville, VA | Disposition | May 1, 2018 | |||
Residence Inn Tampa (1) | Tampa, FL | Disposition | May 10, 2018 | |||
Hilton Alexandria Old Town | Alexandria, VA | Acquisition | June 29, 2018 |
(1) | Collectively reported as “Hotel Dispositions” |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
RevPAR (revenue per available room) | $ | 124.49 | $ | 124.33 | $ | 126.62 | $ | 125.12 | |||||||
Occupancy | 77.91 | % | 79.60 | % | 77.52 | % | 78.52 | % | |||||||
ADR (average daily rate) | $ | 159.78 | $ | 156.19 | $ | 163.34 | $ | 159.34 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
RevPAR (revenue per available room) | $ | 124.35 | $ | 125.00 | $ | 126.76 | $ | 126.42 | |||||||
Occupancy | 77.85 | % | 79.69 | % | 77.55 | % | 78.78 | % | |||||||
ADR (average daily rate) | $ | 159.73 | $ | 156.85 | $ | 163.45 | $ | 160.47 |
Mortgage Loan | Principal Amount (in thousands) | Interest Rate | Secured Hotel Properties | |||||
A | $ | 180,720 | LIBOR + 3.65% | Courtyard Columbus Tipton Lakes | ||||
Courtyard Scottsdale Old Town | ||||||||
Residence Inn Phoenix Airport | ||||||||
SpringHill Suites Manhattan Beach | ||||||||
SpringHill Suites Plymouth Meeting | ||||||||
Residence Inn Las Vegas Hughes Center | ||||||||
Residence Inn Newark | ||||||||
B | $ | 174,400 | LIBOR + 3.39% | Courtyard Newark | ||||
SpringHill Suites BWI | ||||||||
Courtyard Oakland Airport | ||||||||
Courtyard Plano Legacy | ||||||||
Residence Inn Plano | ||||||||
TownePlace Suites Manhattan Beach | ||||||||
Courtyard Basking Ridge | ||||||||
C | $ | 221,040 | LIBOR + 3.73% | Sheraton San Diego Mission Valley | ||||
Sheraton Bucks County | ||||||||
Hilton Ft. Worth | ||||||||
Hyatt Regency Coral Gables | ||||||||
Hilton Minneapolis | ||||||||
D | $ | 262,640 | LIBOR + 4.02% | Hilton Santa Fe | ||||
Embassy Suites Dulles | ||||||||
Marriott Beverly Hills | ||||||||
One Ocean | ||||||||
Marriott Suites Dallas Market Center | ||||||||
E (1) | $ | 216,320 | LIBOR + 4.36% | Marriott Memphis East | ||||
Embassy Suites Philadelphia Airport | ||||||||
Sheraton Anchorage | ||||||||
Lakeway Resort & Spa | ||||||||
Marriott Fremont | ||||||||
F | $ | 215,120 | LIBOR + 3.68% | W Atlanta Downtown | ||||
Embassy Suites Flagstaff | ||||||||
Embassy Suites Walnut Creek | ||||||||
Marriott Bridgewater | ||||||||
Marriott Durham Research Triangle Park |
• | the ratio of total funded indebtedness (less unrestricted cash in excess of $15 million) to EBITDA shall not be greater than 9.75 to 1.0. Our ratio was 8.8 at September 30, 2018. |
• | the ratio of EBITDA to fixed charges for the previous 4 consecutive fiscal quarters shall not be less than 1.25 to 1.0. Our ratio was 1.56 at September 30, 2018. |
• | tangible net worth shall not at any time be less than 75% of the consolidated tangible net worth on the closing date of the secured credit facility plus 75% of the net proceeds of all new equity issuances of the consolidated group. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | (34,261 | ) | $ | (28,726 | ) | $ | (90,261 | ) | $ | (50,235 | ) | |||
Interest expense and amortization of premiums and loan costs, net | 60,731 | 56,963 | 173,680 | 167,224 | |||||||||||
Depreciation and amortization | 64,923 | 60,135 | 192,536 | 185,380 | |||||||||||
Income tax expense (benefit) | 519 | (1,267 | ) | 2,606 | (507 | ) | |||||||||
Equity in (earnings) loss of unconsolidated entities | (310 | ) | 679 | (892 | ) | 3,632 | |||||||||
Company’s portion of EBITDA of unconsolidated entities (Ashford Inc.) | (1,607 | ) | (384 | ) | 959 | (20 | ) | ||||||||
Company’s portion of EBITDA of unconsolidated entities (OpenKey) | (158 | ) | (113 | ) | (419 | ) | (361 | ) | |||||||
EBITDA | 89,837 | 87,287 | 278,209 | 305,113 | |||||||||||
Impairment charges on real estate | (27 | ) | 1,785 | 1,652 | 1,785 | ||||||||||
(Gain) loss on sale of hotel properties | 9 | (15 | ) | (394 | ) | (14,024 | ) | ||||||||
EBITDAre | 89,819 | 89,057 | 279,467 | 292,874 | |||||||||||
Amortization of unfavorable contract liabilities | (39 | ) | (363 | ) | (117 | ) | (1,151 | ) | |||||||
Uninsured hurricane related costs | (43 | ) | 3,711 | (271 | ) | 3,711 | |||||||||
Write-off of premiums, loan costs and exit fees | 1,572 | — | 9,316 | 1,629 | |||||||||||
Other (income) expense, net | 10 | 273 | (80 | ) | 3,539 | ||||||||||
Transaction, acquisition and management conversion costs | 391 | 202 | 596 | 3,770 | |||||||||||
Legal judgment and related legal costs | 1 | 27 | 928 | 4,091 | |||||||||||
Unrealized (gain) loss on marketable securities | (68 | ) | 936 | 758 | 4,813 | ||||||||||
Unrealized (gain) loss on derivatives | 2,085 | 1,479 | 3,672 | 1,804 | |||||||||||
Dead deal costs | 52 | 5 | 55 | 9 | |||||||||||
Software implementation costs | — | — | — | 1,034 | |||||||||||
Non-cash stock/unit-based compensation | 5,143 | 4,613 | 21,946 | 8,751 | |||||||||||
Company’s portion of (gain) loss of AQUA U.S. Fund | — | — | — | (52 | ) | ||||||||||
Company’s portion of adjustments to EBITDAre of unconsolidated entities (Ashford Inc.) | 2,814 | 1,703 | 4,997 | 3,752 | |||||||||||
Company’s portion of adjustments to EBITDAre of unconsolidated entities (OpenKey) | 4 | 2 | 12 | 4 | |||||||||||
Adjusted EBITDAre | $ | 101,741 | $ | 101,645 | $ | 321,279 | $ | 328,578 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | (34,261 | ) | $ | (28,726 | ) | $ | (90,261 | ) | $ | (50,235 | ) | |||
(Income) loss from consolidated entities attributable to noncontrolling interest | (10 | ) | (22 | ) | 8 | (4 | ) | ||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 6,682 | 6,940 | 18,087 | 13,202 | |||||||||||
Preferred dividends | (10,645 | ) | (11,440 | ) | (31,933 | ) | (33,352 | ) | |||||||
Extinguishment of issuance costs upon redemption of preferred stock | — | (4,507 | ) | — | (4,507 | ) | |||||||||
Net income (loss) attributable to common stockholders | (38,234 | ) | (37,755 | ) | (104,099 | ) | (74,896 | ) | |||||||
Depreciation and amortization of real estate | 64,865 | 60,075 | 192,363 | 185,197 | |||||||||||
(Gain) loss on sale of hotel properties | 9 | (15 | ) | (394 | ) | (14,024 | ) | ||||||||
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership | (6,682 | ) | (6,940 | ) | (18,087 | ) | (13,202 | ) | |||||||
Equity in (earnings) loss of unconsolidated entities | (310 | ) | 679 | (892 | ) | 3,632 | |||||||||
Impairment charges on real estate | (27 | ) | 1,785 | 1,652 | 1,785 | ||||||||||
Company’s portion of FFO of unconsolidated entities (Ashford Inc.) | 470 | (570 | ) | 1,391 | (3,265 | ) | |||||||||
Company’s portion of FFO of unconsolidated entities (OpenKey) | (160 | ) | (116 | ) | (426 | ) | (366 | ) | |||||||
FFO available to common stockholders and OP unitholders | 19,931 | 17,143 | 71,508 | 84,861 | |||||||||||
Extinguishment of issuance costs upon redemption of preferred stock | — | 4,507 | — | 4,507 | |||||||||||
Write-off of premiums, loan costs and exit fees | 1,572 | — | 9,316 | 1,629 | |||||||||||
Uninsured hurricane related costs | (43 | ) | 3,711 | (271 | ) | 3,711 | |||||||||
Other (income) expense | 10 | 273 | (80 | ) | 3,539 | ||||||||||
Transaction, acquisition and management conversion costs | 391 | 202 | 596 | 3,770 | |||||||||||
Legal judgment and related legal costs | 1 | 27 | 928 | 4,091 | |||||||||||
Unrealized (gain) loss on marketable securities | (68 | ) | 936 | 758 | 4,813 | ||||||||||
Unrealized (gain) loss on derivatives | 2,085 | 1,479 | 3,672 | 1,804 | |||||||||||
Dead deal costs | 52 | 5 | 55 | 9 | |||||||||||
Software implementation costs | — | — | — | 1,034 | |||||||||||
Non-cash stock/unit-based compensation | 5,143 | 4,613 | 21,946 | 8,751 | |||||||||||
Amortization of loan costs | 6,673 | 2,549 | 14,612 | 10,917 | |||||||||||
Company’s portion of (gain) loss of AQUA U.S. Fund | — | — | — | (52 | ) | ||||||||||
Company’s portion of adjustments to FFO of unconsolidated entities (Ashford Inc.) | (1,453 | ) | 1,580 | 730 | 6,130 | ||||||||||
Company’s portion of adjustments to FFO of unconsolidated entities (OpenKey) | 4 | 2 | 12 | 4 | |||||||||||
Adjusted FFO available to common stockholders and OP unitholders | $ | 34,298 | $ | 37,027 | $ | 123,782 | $ | 139,518 |
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 | 258 | 100 | 258 | |||||||
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 | |||||||
Hilton | Alexandria, VA | Full service | 252 | 100 | 252 | |||||||
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 | 701 | 100 | 701 | |||||||
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 |
Hotel Property | Location | Service Type | Total Rooms | % Owned | Owned Rooms | |||||||
Marriott | San Antonio, TX | Full service | 251 | 100 | 251 | |||||||
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 | 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 | |||||||
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 | |||||||
TownePlace Suites by Marriott | Manhattan Beach, CA | Select service | 143 | 100 | 143 | |||||||
One Ocean | Atlantic Beach, FL | Full service | 193 | 100 | 193 | |||||||
Sheraton Hotel | Ann Arbor, MI | Full service | 197 | 100 | 197 | |||||||
Sheraton Hotel | Langhorne, PA | Full service | 186 | 100 | 186 |
Hotel Property | Location | Service Type | Total Rooms | % Owned | Owned Rooms | |||||||
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 | |||||||
Ritz-Carlton | Atlanta, GA | Full service | 444 | 100 | 444 | |||||||
Ground Lease Properties | ||||||||||||
Crowne Plaza (1) | Key West, FL | Full service | 160 | 100 | 160 | |||||||
Crowne Plaza (2) | Annapolis, MD | Full service | 196 | 100 | 196 | |||||||
Hilton (3) | Ft. Worth, TX | Full service | 294 | 100 | 294 | |||||||
Renaissance (4) | Palm Springs, CA | Full service | 410 | 100 | 410 | |||||||
Total | 24,930 | 24,903 |
(1) | The ground lease expires in 2084. |
(2) | The ground lease expires in 2114. |
(3) | The ground lease expires in 2040. |
(4) | The ground lease expires in 2059 with one 25-year extension option. |
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: | ||||||||||||||
July 1 to July 31 | 6,840 | $ | — | (2) | — | $ | 200,000,000 | |||||||
August 1 to August 31 | — | — | — | 200,000,000 | ||||||||||
September 1 to September 30 | 657 | — | (2) | — | 200,000,000 | |||||||||
Total | 7,497 | $ | — | — |
(1) | On December 5, 2017, the board of directors reapproved a stock repurchase program (the “Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) having an aggregate value of up to $200 million. The board of director’s authorization replaced any previous repurchase authorizations. |
(2) | There is no cost associated with the forfeiture of 6,840 and 657 restricted shares of our common stock in July and September, respectively. |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit | Description | ||
3.1 | |||
3.2 | |||
3.3 | |||
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 September 30, 2018 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: | November 2, 2018 | By: | /s/ DOUGLAS A. KESSLER | |
Douglas A. Kessler | ||||
President and Chief Executive Officer | ||||
Date: | November 2, 2018 | By: | /s/ DERIC S. EUBANKS | |
Deric S. Eubanks | ||||
Chief Financial Officer |
Nine Months Ended | Year Ended December 31, | ||||||||||||||||||||||
September 30, 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||
Earnings | |||||||||||||||||||||||
Income (loss) from continuing operations before provision for income taxes and redeemable noncontrolling interests | $ | (87,655 | ) | $ | (90,978 | ) | $ | (57,250 | ) | $ | 310,523 | $ | (40,465 | ) | $ | (46,949 | ) | ||||||
Amount recorded for equity in (earnings) loss of unconsolidated entities | (892 | ) | 5,866 | 6,110 | 6,831 | (2,495 | ) | 23,404 | |||||||||||||||
Add: | |||||||||||||||||||||||
Distributions of earnings from unconsolidated entities | — | — | — | 996 | 995 | — | |||||||||||||||||
Interest on indebtedness, net of premiums | 159,063 | 209,412 | 199,870 | 168,834 | 107,598 | 133,697 | |||||||||||||||||
Amortization of loan costs | 14,617 | 13,219 | 24,097 | 18,680 | 7,237 | 7,772 | |||||||||||||||||
Interest component of operating leases | 181 | 267 | 343 | 288 | 115 | 341 | |||||||||||||||||
$ | 85,314 | $ | 137,786 | $ | 173,170 | $ | 506,152 | $ | 72,985 | $ | 118,265 | ||||||||||||
Fixed charges | |||||||||||||||||||||||
Interest on indebtedness, net of premiums | $ | 159,063 | $ | 209,412 | $ | 199,870 | $ | 168,834 | $ | 107,598 | $ | 133,697 | |||||||||||
Amortization of loan costs | 14,617 | 13,219 | 24,097 | 18,680 | 7,237 | 7,772 | |||||||||||||||||
Interest component of operating leases | 181 | 267 | 343 | 288 | 115 | 341 | |||||||||||||||||
Dividends to Class B unit holders | — | — | 2,110 | 2,813 | 2,879 | 2,943 | |||||||||||||||||
$ | 173,861 | $ | 222,898 | $ | 226,420 | $ | 190,615 | $ | 117,829 | $ | 144,753 | ||||||||||||
Preferred stock dividends | |||||||||||||||||||||||
Preferred Series A | $ | — | $ | 2,539 | $ | 3,542 | $ | 3,542 | $ | 3,542 | $ | 3,542 | |||||||||||
Preferred Series D | 3,785 | 18,211 | 20,002 | 20,002 | 20,002 | 20,002 | |||||||||||||||||
Preferred Series E | — | — | 6,280 | 10,418 | 10,418 | 10,418 | |||||||||||||||||
Preferred Series F | 6,637 | 8,849 | 4,130 | — | — | — | |||||||||||||||||
Preferred Series G | 8,573 | 11,430 | 2,318 | — | — | — | |||||||||||||||||
Preferred Series H | 5,344 | 2,494 | — | — | — | — | |||||||||||||||||
Preferred Series I | 7,594 | 1,238 | — | — | — | — | |||||||||||||||||
$ | 31,933 | $ | 44,761 | $ | 36,272 | $ | 33,962 | $ | 33,962 | $ | 33,962 | ||||||||||||
Combined fixed charges and preferred stock dividends | $ | 205,794 | $ | 267,659 | $ | 262,692 | $ | 224,577 | $ | 151,791 | $ | 178,715 | |||||||||||
Ratio of earnings to fixed charges | 2.66 | ||||||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 2.25 | ||||||||||||||||||||||
Deficit (Fixed charges) | $ | 88,547 | $ | 85,112 | $ | 53,250 | $ | 44,844 | $ | 26,488 | |||||||||||||
Deficit (Combined fixed charges and preferred stock dividends) | $ | 120,480 | $ | 129,873 | $ | 89,522 | $ | 78,806 | $ | 60,450 | |||||||||||||
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 |
9 Months Ended | |
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Sep. 30, 2018 |
Oct. 31, 2018 |
|
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 | Sep. 30, 2018 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 101,038,430 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (34,261) | $ (28,726) | $ (90,261) | $ (50,235) |
Other comprehensive income (loss), net of tax: | ||||
Total other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Comprehensive income (loss) | (34,261) | (28,726) | (90,261) | (50,235) |
Less: Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities | (10) | (22) | 8 | (4) |
Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership | 6,682 | 6,940 | 18,087 | 13,202 |
Comprehensive income (loss) attributable to the Company | $ (27,589) | $ (21,808) | $ (72,166) | $ (37,037) |
Consolidated Statement of Equity - 9 months ended Sep. 30, 2018 - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock |
Series D Preferred Stock |
Series F Preferred Stock |
Series G Preferred Stock |
Series H Preferred Stock |
Series I Preferred Stock |
Preferred Stock
Series D Preferred Stock
|
Preferred Stock
Series F Preferred Stock
|
Preferred Stock
Series G Preferred Stock
|
Preferred Stock
Series H Preferred Stock
|
Preferred Stock
Series I Preferred Stock
|
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Accumulated Deficit
Common Stock
|
Accumulated Deficit
Series D Preferred Stock
|
Accumulated Deficit
Series F Preferred Stock
|
Accumulated Deficit
Series G Preferred Stock
|
Accumulated Deficit
Series H Preferred Stock
|
Accumulated Deficit
Series I Preferred Stock
|
Noncontrolling Interests In Consolidated Entities |
Redeemable Noncontrolling Interests in Operating Partnership |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance, shares (in shares) at Dec. 31, 2017 | 2,389 | 4,800 | 6,200 | 3,800 | 5,400 | 97,409 | |||||||||||||||||
Beginning balance, value at Dec. 31, 2017 | $ 633,146 | $ 24 | $ 48 | $ 62 | $ 38 | $ 54 | $ 974 | $ 1,784,997 | $ (1,153,697) | $ 646 | |||||||||||||
Beginning balance, value at Dec. 31, 2017 | 116,122 | $ 116,122 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Purchases of common stock | (1,598) | $ (3) | (1,595) | ||||||||||||||||||||
Purchases of common stock (in shares) | (249) | ||||||||||||||||||||||
Equity-based compensation | 13,329 | 13,329 | 8,617 | ||||||||||||||||||||
Forfeitures of restricted shares | 0 | ||||||||||||||||||||||
Forfeitures of restricted shares (in shares) | (46) | ||||||||||||||||||||||
Issuance of restricted shares/units, value | 123 | $ 15 | 108 | ||||||||||||||||||||
Issuance of restricted shares/units, value | 53 | ||||||||||||||||||||||
Issuance of restricted shares/units (in shares) | 1,490 | ||||||||||||||||||||||
Cost of issuances of preferred shares | $ (60) | (60) | |||||||||||||||||||||
Issuance of common stock | 14,636 | $ 24 | 14,612 | ||||||||||||||||||||
Issuance of common stock (in shares) | 2,434 | ||||||||||||||||||||||
Dividends | $ (36,144) | $ (3,785) | $ (6,637) | $ (8,573) | $ (5,344) | $ (7,594) | $ (35,138) | $ (36,144) | $ (3,785) | $ (6,637) | $ (8,573) | $ (5,344) | $ (7,594) | ||||||||||
Distributions to noncontrolling interests | 0 | ||||||||||||||||||||||
Distributions to noncontrolling interests | (7,429) | ||||||||||||||||||||||
Redemption value adjustment | (19,387) | (19,387) | |||||||||||||||||||||
Redemption value adjustment | 19,387 | ||||||||||||||||||||||
Income (loss) from continuing operations attributable to the Company | (72,166) | (72,166) | |||||||||||||||||||||
Loss from consolidated entities attributable to noncontrolling interest | (8) | (8) | |||||||||||||||||||||
Net income (loss) | (72,174) | ||||||||||||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (18,087) | ||||||||||||||||||||||
Ending balance, value at Sep. 30, 2018 | 499,938 | $ 24 | $ 48 | $ 62 | $ 38 | $ 54 | $ 1,010 | $ 1,811,391 | $ (1,313,327) | $ 638 | |||||||||||||
Ending balance, shares (in shares) at Sep. 30, 2018 | 2,389 | 4,800 | 6,200 | 3,800 | 5,400 | 101,038 | |||||||||||||||||
Ending balance, value at Sep. 30, 2018 | $ 118,663 | $ 118,663 |
Organization and Description of Business |
9 Months Ended | ||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||
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 U.S. national average, and in all methods including direct real estate, equity, and debt. 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 September 30, 2018, 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 September 30, 2018, our 118 hotel properties were leased or owned by our wholly-owned or majority-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 September 30, 2018, 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 80 of our 118 hotel properties and WorldQuest Resort. Third-party management companies managed the remaining hotel properties. On August 8, 2018, Ashford Inc., the parent company of the advisor, completed its acquisition of Remington Holdings, L.P.’s project management business. See note 16. |
Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 joint ventures in which it has a controlling interest. All significant inter-company 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 2017 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2018. 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 and (ii) 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 nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The following acquisitions and dispositions affect reporting comparability of our consolidated financial statements:
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. 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. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. See note 5. 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 5. Investments in Unconsolidated Entities—Investments in entities in which we have ownership interests ranging from 16.3% to 25.1%, at September 30, 2018, 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 nine months ended September 30, 2018 and 2017. Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. Each VIE, 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, and (ii) 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. Equity-Based Compensation—Prior to the adoption of Accounting Standards Update (“ASU”) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) in the third quarter of 2018, stock/unit-based compensation for non-employees was accounted for at fair value based on the market price of the shares at period end that resulted 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 were accounted for at fair value at period end based on a Monte Carlo simulation valuation model that resulted 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. After the adoption of ASU 2018-07 in the third quarter of 2018, stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date. This results in the recording of expense, included in “advisory services fee” and “management fees,” equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. PSUs and Performance LTIP units granted to certain executive officers vest based on market conditions and are measured at the grant date fair value based on a Monte Carlo simulation valuation model. The subsequent expense is then ratably recognized over the service period as the service is rendered regardless of when, if ever, the market conditions are satisfied. This results in recording expense, included in “advisory services fee,” equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. Stock/unit grants to independent directors are measured at the grant date 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 May 2014, the Financial Accounting Standards Board (“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 replaces most existing revenue recognition guidance in U.S. GAAP. The standard permits the use of either the full retrospective or cumulative effect (modified retrospective) transition method. This standard, referred to as “Topic 606,” does not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Additionally, we have historically disposed of hotel properties for cash sales with no contingencies and no future involvement in the hotel operations. Therefore, Topic 606 does not impact the recognition of hotel sales. We adopted this standard effective January 1, 2018, under the modified retrospective method, and the adoption of this standard did not have a material impact on our consolidated financial statements. See related disclosures in note 3. 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 other comprehensive income 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 adopted this standard effective January 1, 2018. The adoption of this standard did not have a material impact on our 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 adopted this standard effective January 1, 2018 on a prospective basis as there were no required changes as a result of adoption. The adoption of this standard did not have a material impact on our consolidated statements of cash flows. 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. We adopted this standard effective January 1, 2018. Under the new standard, 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). Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis. We concluded that our hotel acquisition completed in the second quarter of 2018 is the acquisition of assets because substantially all of the fair value of the gross assets acquired were concentrated in a single identifiable asset or a group of similar identifiable assets. As such, acquisition costs were capitalized as part of the transaction. See note 4. 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 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 method. We adopted this standard effective January 1, 2018, under the modified retrospective method. The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07, which expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees and aligns the guidance for share-based payments to non-employees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted ASU 2018-07 effective July 1, 2018. The adoption of ASU 2018-07 has a material impact on our consolidated financial statements because the compensation expense related to our equity awards is now determined based on the grant date fair value of the awards and will be ratably recognized over the service period as the service is rendered as opposed to being marked-to-market in periods prior to adoption. For all existing equity awards, future equity-based compensation expense is based on the fair value of the awards on July 1, 2018. See the Equity-Based Compensation section included above in our Significant Accounting Policies for further details. Recently Issued Accounting Standards—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. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantees, the rate implicit in the lease, lease term and purchase options. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption. ASU 2016-02 is effective for annual and interim periods for fiscal years beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of 2019 on a modified retrospective basis. The accounting for leases under which we are the lessor remains largely unchanged. While we continue evaluating our lease portfolio to assess 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. We disclosed $123.7 million in undiscounted future minimum rentals due under non-cancelable leases in note 12 of our most recent 10-K. We are involving our property managers and implementing repeatable processes to manage ongoing lease data collection and analysis, and evaluating accounting policies and internal controls that will be impacted by the new standards. We have also engaged in a third party valuation expert to assist us in determining the value of our ROU assets and operating lease liabilities including the determination of our incremental borrowing rate. We expect to use the transition method that includes the practical expedient that allows us to adopt effective January 1, 2019 and not reevaluate or recast prior periods, however we are still evaluating the available transition methods. 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 our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies certain disclosure requirements related to fair value measurements including requiring disclosures on changes in unrealized gains and losses in other comprehensive income for recurring Level 3 fair value measurements and a requirement to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that ASU 2018-13 will have on the consolidated financial statements. |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue On January 1, 2018, we adopted Topic 606 using the modified retrospective method. As the adoption of this standard did not have a material impact on our consolidated financial statements, no adjustments to opening retained earnings were made as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Accounting Standards Codification (“ASC”) Topic 605-Revenue Recognition. Rooms revenue represents revenue from the occupancy of our hotel rooms and is driven by the occupancy and average daily rate charged. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay. Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, In-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audio-visual equipment/services, rental of function rooms, and other F&B related revenue. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenue as appropriate (i.e. gross vs. net). Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, resort and destination fees, spas, parking, entertainment and other guest services, as well as rental revenue; primarily consisting of leased retail outlets at our hotel properties. Attrition and cancellation fees are recognized for non-cancellable deposits when the customer provides notification of cancellation within established management policy time frames. For the three and nine months ended September 30, 2018, we recorded $0 and $2.5 million of business interruption income for the St. Petersburg Hilton and Key West Crowne Plaza related to a settlement for lost profits from the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010. 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. The following tables presents our revenue disaggregated by geographical areas (in thousands):
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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):
Acquisitions Hilton Alexandria Old Town On June 29, 2018, the Company acquired a 100% interest in the 252-room Hilton Alexandria Old Town in Alexandria, Virginia for $111.0 million. We accounted for this transaction as an asset acquisition because substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. We allocated the cost of the acquisition including transaction costs to the individual assets acquired and liabilities assumed on a relative fair value basis, which is considered a Level 3 valuation technique, as noted in the following table (in thousands):
The results of operations of the hotel property have been included in our results of operations as of the acquisition date. The table below summarizes the total revenue and net income (loss) of the hotel property in our consolidated statements of operations for the three and nine months ended September 30, 2018:
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Hotel Dispositions, Impairment Charges and Insurance Recoveries and Assets Held For Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hotel Dispositions, Impairment Charges and Insurance Recoveries and Assets Held For Sale | Hotel Dispositions, Impairment Charges, Insurance Recoveries and Assets Held For Sale Hotel Dispositions 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 year ended December 31, 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 7. 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 year ended December 31, 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 7. 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 year ended December 31, 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 7. On February 20, 2018, we completed the sale of the SpringHill Suites Glen Allen for approximately $10.9 million in cash. The sale resulted in a loss of approximately $13,000 for the nine months ended September 30, 2018 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $7.6 million of debt associated with the hotel property. See note 7. On May 1, 2018, we completed the sale of the SpringHill Suites Centreville for approximately $7.5 million in cash. The sale resulted in a gain of approximately $16,000 for the nine months ended September 30, 2018 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $6.6 million of debt associated with the hotel property. See note 7. On May 10, 2018, we completed the sale of the Residence Inn Tampa for approximately $24.0 million in cash. The sale resulted in a gain of approximately $400,000 for the nine months ended September 30, 2018 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $22.5 million of debt associated with the hotel property. See note 7. 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 nine months ended September 30, 2018 and 2017 (in thousands):
Impairment Charges and Insurance Recoveries In August and September 2017, twenty-four of our hotel properties in Texas and Florida were impacted by the effects of Hurricanes Harvey and Irma. The Company holds insurance policies that provide coverage for property damage and business interruption after meeting certain deductibles at all of its hotel properties. During 2017, the Company recognized impairment charges, net of anticipated insurance recoveries of $2.0 million. Additionally, the Company recognized remediation and other costs, net of anticipated insurance recoveries of $2.8 million, included primarily in other hotel operating expenses. As of December 31, 2017, the Company recorded an insurance receivable of $267,000, net of deductibles of $4.8 million, included in “accounts receivable, net” on our consolidated balance sheet, related to the anticipated insurance recoveries. During the year ended December 31, 2017, the Company received proceeds of $612,000 for business interruption losses associated with lost profits, which has been recorded as “other” hotel revenue in our consolidated statement of operations, in excess of the deductible of $360,000. For the three and nine months ended September 30, 2018, the Company recorded revenue from business interruption losses associated with lost profits from the hurricanes of $0 and $401,000, respectively, which is included in “other” hotel revenue in our consolidated statement of operations. We received additional proceeds of $192,000 and $834,000 associated with property damage from the hurricanes during the three and nine months ended September 30, 2018. The Company will not record an insurance recovery receivable for business interruption losses associated with lost profits until the amount for such recoveries is known and the amount is realizable. Additionally, for the three and nine months ended September 30, 2018, we recorded a $0 and $2.0 million impairment charge, respectively, at the SpringHill Suites in Centreville, Virginia (“SpringHill Suites Centreville”). We also recorded impairment adjustments of $(27,000) and $(310,000) for the three and nine months, respectively, based on changes in estimates of property damages incurred from Hurricanes Harvey and Irma. For the year ended December 31, 2017, we recorded impairment charges of $8.2 million related to the SpringHill Suites Centreville and the SpringHill Suites in Glen Allen, Virginia (“SpringHill Suites Glen Allen”) in the amounts of $4.7 million and $3.5 million, respectively. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques. SpringHill Suites Glen Allen was sold on February 20, 2018 and SpringHill Suites Centreville was sold on May 1, 2018. See discussion below under “Assets Held For Sale.” Assets Held For Sale At December 31, 2017, the SpringHill Suites Centreville and the SpringHill Suites Glen Allen were classified as held for sale in the consolidated balance sheet based on methodologies discussed in note 2. On February 20, 2018, we completed the sale of the SpringHill Suites Glen Allen for approximately $10.9 million. The sale resulted in a loss of $13,000 for the nine months ended September 30, 2018, and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. On May 1, 2018, we completed the sale of the SpringHill Suites Centreville for approximately $7.5 million in cash. We also repaid approximately $6.6 million of principal on our mortgage loan partially secured by the hotel property. The sale resulted in a gain of $16,000 for the nine months ended September 30, 2018, and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. Since the sale of the hotel properties does not represent a strategic shift that has (or will have) 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. The major classes of assets and liabilities related to the assets held for sale included in the consolidated balance sheets at December 31, 2017 were as follows:
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Entities | Investment in Unconsolidated Entities Ashford Inc. We hold approximately 598,000 shares of Ashford Inc. common stock, which represented an approximate 25.1% ownership interest in Ashford Inc. as of September 30, 2018, with a carrying value of $1.8 million and a fair value of $45.4 million. The following tables summarize the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 and the condensed consolidated statements of operations of Ashford Inc. and our equity in earnings (loss) for the three and nine months ended September 30, 2018 and 2017 (in thousands): Ashford Inc. Condensed Consolidated Balance Sheets (unaudited)
Ashford Inc. Condensed Consolidated 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. OpenKey is a hospitality-focused mobile key platform that provides a universal smart phone app for keyless entry into hotel guest rooms. In 2018 and 2017, we made additional investments of $667,000 and $983,000, respectively. As of September 30, 2018, the Company has made investments totaling $4.0 million. 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. The following table summarizes our carrying value and ownership interest in OpenKey:
The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):
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Indebtedness |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness | Indebtedness Indebtedness consisted of the following (in thousands):
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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. On October 30, 2017, we refinanced our $94.7 million mortgage loan, with an outstanding balance of $94.5 million, secured by the Hilton Boston Back Bay. The new mortgage loan totals $97.0 million. The mortgage loan is non-recourse interest only and provides for a floating interest rate of LIBOR + 2.00%. The stated maturity is November 2022, with no extension options. On October 31, 2017, we refinanced a $412.5 million mortgage loan, secured by seventeen hotels. The new mortgage loan totals $427.0 million. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 3.00%. The stated maturity is November 2019, with five one-year extension options. The new mortgage loan is secured by the following seventeen hotels: the Courtyard Alpharetta, Courtyard Bloomington, Courtyard Crystal City, Courtyard Foothill Ranch, Embassy Suites Austin, Embassy Suites Dallas, Embassy Suites Houston, Embassy Suites Las Vegas, Embassy Suites Palm Beach, Hampton Inn Evansville, Hilton Garden Inn Jacksonville, Hilton Nassau Bay, Hilton St. Petersburg, Residence Inn Evansville, Residence Inn Falls Church, Residence Inn San Diego and Sheraton Indianapolis. On January 17, 2018, we refinanced our $376.8 million mortgage loan. The new mortgage loan totaled $395.0 million. The new mortgage loan has a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.92%. The new mortgage loan is secured by eight hotels: Embassy Suites Portland, Embassy Suites Crystal City, Embassy Suites Orlando, Embassy Suites Santa Clara, Crowne Plaza Key West, Hilton Costa Mesa, Sheraton Minneapolis, and Historic Inns of Annapolis. On February 20, 2018, we repaid $7.6 million of principal on our mortgage loan partially secured by the SpringHill Suites Glen Allen. This hotel property was sold on February 20, 2018. On April 9, 2018, we refinanced our $971.7 million mortgage loan secured by 22 hotel properties. The new mortgage loan totaled $985.0 million, is interest only and provides for a floating interest rate of LIBOR + 3.20%. The stated maturity is April 2020 with five one-year extension options, subject to the satisfaction of certain conditions. The new mortgage loan is secured by the same 22 hotel properties that include: the Courtyard Boston Downtown, Courtyard Denver, Courtyard Gaithersburg, Courtyard Savannah, Hampton Inn Parsippany, Hilton Parsippany, Hilton Tampa, Hilton Garden Inn Austin, Hilton Garden Inn BWI, Hilton Garden Inn Virginia Beach, Hyatt Windwatch Long Island, Hyatt Savannah, Marriott DFW Airport, Marriott Omaha, Marriott San Antonio, Marriott Sugarland, Renaissance Palm Springs, Ritz-Carlton Atlanta, Residence Inn Tampa, Churchill, Melrose and Silversmith. On May 1, 2018, we repaid $6.6 million of principal on our mortgage loan partially secured by the SpringHill Suites Centreville. This hotel property was sold on May 1, 2018. On May 10, 2018, we repaid $22.5 million of principal on our mortgage loan partially secured by the Residence Inn Tampa. This hotel property was sold on May 10, 2018. On June 13, 2018, we refinanced seven mortgage loans with existing outstanding balances totaling $1.068 billion. The new financing is comprised of six separate mortgage loans that total approximately $1.270 billion. Each has a two-year initial term with five one-year extension options, subject to the satisfaction of certain conditions. The original principal amounts of each mortgage loan and the hotel properties securing each mortgage loan are set forth in the following table:
_____________________________ (1)On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinance. The net floating interest rate after the purchase of the Pool E loan is LIBOR + 2.73%. On June 29, 2018, in connection with the acquisition of the Hilton Alexandria Old Town in Alexandria VA, we completed the financing of a $73.5 million mortgage loan. This mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.45%. The stated maturity date of the mortgage loan is June 2023, with no extension options. The mortgage loan is secured by the Hilton Alexandria Old Town. On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinance. The net floating interest rate after the purchase of the Pool E loan is LIBOR + 2.73%. The mezzanine debt receivable purchase and corresponding mezzanine debt eliminate in consolidation. On September 27, 2018, we established a secured credit facility with a borrowing capacity of up to $100.0 million, which is secured by a pledge of 100% of the equity interests in the subsidiaries that own the hotel property for which revolving credit facility funds were used to acquire. The interest rate associated with the secured credit facility is either the base rate + 1.65% or LIBOR + 2.65% at the Company’s election. The base rate is the greater of (i) the prime rate set by Bank of America; (ii) federal funds rate + 0.5%; or (iii) LIBOR + 1.0%. During the three and nine months ended September 30, 2018 and 2017, we recognized premium amortization as presented in the table below (in thousands):
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 September 30, 2018, 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 |
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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. The following table presents a summary of our interest rate derivatives entered into over the applicable periods:
None of these instruments were designated as cash flow hedges. As of September 30, 2018, we held interest rate instruments as summarized in the table below:
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Credit Default Swap Derivatives—We use credit default swaps, tied to the CMBX index, to hedge financial and capital market risk. 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. As of September 30, 2018, we held credit default swaps with notional amounts totaling $212.5 million. These credit default swaps had effective dates from February 2015 to August 2017 and expected maturity dates from October 2023 to October 2026. Assuming the underlying bonds pay off at par over their remaining average life, our total exposure for these trades was approximately $5.5 million as of September 30, 2018. 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. |
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 September 30, 2018, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 2.261% to 3.032% 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):
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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 nine months ended September 30, 2018 and 2017 (in thousands):
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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):
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Cash, cash equivalents and restricted cash. These financial assets bear interest at market rates and have original maturities of less than 90 days. 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 and distributions payable, due to/from 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. Marketable securities. Marketable securities consist of U.S. treasury bills, publicly traded equity securities, and put and call options on certain publicly traded equity securities. The fair value of these investments is based on quoted market closing prices at the balance sheet date. See note 10 for a complete description of the methodology and assumptions utilized in determining the fair values. Derivative assets, net and derivative liabilities, net. Fair value of interest rate caps 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 9 and 10 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 105.7% of the carrying value of $3.9 billion at September 30, 2018 and approximately 95.6% to 105.6% of the carrying value of $3.7 billion at December 31, 2017. This is considered a Level 2 valuation technique. |
Redeemable Noncontrolling Interests in Operating Partnership |
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Noncontrolling Interest [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 unit holders 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. 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. 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 the issuance of performance LTIP units to certain executive officers. The award agreements provide for the grant of a target number of performance-based LTIP units that will be settled in common units of Ashford Trust OP, if and when the applicable vesting criteria have been achieved following the end of the performance and service period. The target number of performance-based LTIP units may be adjusted from 0% to 200% based on achievement of specified absolute and relative total stockholder returns based on the formulas determined by the Company’s Compensation Committee on the grant date. As of September 30, 2018, there are approximately 2.4 million performance-based LTIP units, representing 200% of the target, outstanding. 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. Upon the adoption of ASU 2018-07, the corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition as opposed to being accounted for at fair value based on the market price of the shares at each quarterly measurement date. As of September 30, 2018, we have issued a total of 13.0 million LTIP and performance LTIP units (12.1 million after the elimination of the conversion factor in December 2017), all of which, other than approximately 737,000 units (686,000 after the elimination of the conversion factor in December 2017) (none of which are performance LTIP units) have reached full economic parity with, and are convertible into, common units. We recorded compensation expense for performance LTIP units and LTIP units as presented in the table below (in thousands):
The unamortized cost of the unvested performance LTIP units, which was $6.5 million at September 30, 2018, will be expensed over a period of 2.5 years. The unamortized cost of the unvested LTIP units, which was $5.5 million at September 30, 2018, will be expensed over a period of 2.5 years. During the nine months ended September 30, 2018, there were no common units redeemed. During the nine months ended September 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 price. The following table shows the redeemable noncontrolling interest in Ashford Trust (in thousands) and the corresponding approximate ownership percentage:
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We allocated net income (loss) to the redeemable noncontrolling interests and declared aggregate cash distributions to holders of common units and holders of LTIP units, as presented in the table below (in thousands):
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Equity and Equity-Based Compensation |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Equity-Based Compensation | Equity and Equity-Based Compensation Common Stock Dividends—For each of the 2018 and 2017 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 2018. Restricted Stock Units—We incur stock-based compensation expense in connection with restricted stock units awarded to employees of Ashford LLC, which is included in “advisory services fee,” on our consolidated statements of operations and employees of Remington Lodging, which is included in “management fees” on our consolidated statements of operations. We also issue common stock to our independent directors, which immediately vests, and is included in “corporate general and administrative” expense on our consolidated statements of operations. At September 30, 2018, the unamortized cost of the unvested shares of restricted stock was $10.4 million, which will be amortized over a period of 2.5 years. The following table summarizes the stock-based compensation expense (in thousands):
During the nine months ended September 30, 2018 approximately $1.5 million of the compensation expense was related to the accelerated vesting of equity awards granted to one of our executive officers upon his death, in accordance with the terms of the awards. Performance Stock Units—The compensation committee of the board of directors of the Company approved the issuance of PSUs, which have a three-year cliff vesting, to certain executive officers . 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 specified absolute and relative total stockholder returns based on the formulas 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. Upon the adoption of ASU 2018-07, the corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition as opposed to being accounted for at fair value based on the market price of the shares at each quarterly measurement date. The following table summarizes the compensation expense (in thousands):
During the nine months ended September 30, 2018, approximately $3.0 million of the compensation expense was related to the accelerated vesting of PSUs granted to one of our executive officers upon his death, in accordance with the terms of the awards. The unamortized cost of the unvested PSUs of $6.5 million at September 30, 2018, will be expensed over a period of approximately 2.5 years. Preferred Dividends—The board of directors declared quarterly dividends as presented below:
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In addition to the above, on September 18, 2017, the Company redeemed its 8.55% Series A cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4631 per share, for a total redemption price of $25.4631 per share. At-the-Market Equity Offering Program—On December 11, 2017, the Company established an “at-the-market” equity offering program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $100 million. The table below summarizes the issuance activity (in thousands):
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 $638,000 and $646,000 at September 30, 2018 and December 31, 2017, respectively. Our ownership interest is reported in equity in the consolidated balance sheets. The below table summarizes the (income) loss allocated to noncontrolling interests in consolidating entities (in thousands):
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2018 | |
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 September 30, 2018, 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 September 30, 2018, we pay franchisor royalty fees between 3% and 6% of gross rooms revenue and, in some cases, 2% to 3% of 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 $17.9 million and $54.7 million for the three and nine months ended September 30, 2018, respectively, and $17.8 million and $52.6 million for the three and nine months ended September 30, 2017, 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 September 30, 2018, we pay a) monthly property management fees equal to the greater of approximately $14,000 (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 2038, 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 2014 through 2017 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 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. On July 26, 2018, we paid $544,000 as part of a settlement on certain legal fees. The negotiations relating to the potential payment of the remaining attorney’s fees are still ongoing. As of September 30, 2018, we have accrued approximately $508,000 in legal fees, which represents the Company’s estimate of the amount of potential remaining legal fees that could be owed. 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 |
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Sep. 30, 2018 | |
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 September 30, 2018 and December 31, 2017, all of our hotel properties were domestically located. |
Related Party Transactions |
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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 monthly base fee that is a percentage of our total market capitalization on a declining sliding scale plus the Net Asset Fee Adjustment, as defined in the advisory agreement, subject to a minimum monthly 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 is 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 September 30, 2018, 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 measured annually. Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we will pay Ashford LLC an incentive fee over the following three years, subject to the FCCR Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management 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. This arrangement is accounted for as a lease, 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, lease expense of $156,000 and $469,000 was recognized for the three and nine months ended September 30, 2018, respectively and $156,000 and $476,000 for the three and nine months ended September 30, 2017, respectively. These costs are included in “other” hotel expense in the consolidated statements of operations. On August 8, 2018, Ashford Inc. completed the acquisition of Premier Project Management LLC (“Premier”), the project management business formerly conducted by certain affiliates of Remington Lodging, including construction management, interior design, architectural oversight, and the purchasing, freight management, and supervision of installation of furniture, fixtures, and equipment, and related services. As a result of Ashford Inc.’s acquisition, the project management services that were previously provided by Remington Lodging will now be provided by a subsidiary of Ashford Inc. under the respective project management agreement with each customer, including Ashford Trust and Braemar. In accordance with our advisory agreement, our advisor, or entities in which our advisor has an interest, have a right to provide products or services to our hotel properties, provided such transactions are evaluated and approved by our independent directors. The following tables summarize the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the amounts recorded by us for those services and the applicable classification on our consolidated financial statements (in thousands):
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The following table summarizes the amount due to Ashford Inc. (in thousands):
Certain employees of Remington Lodging, who perform work on behalf of Ashford Trust, were granted approximately 131,000 and 177,000 shares of restricted stock under the Ashford Trust Stock Plan in 2017 and 2018, respectively. These share grants are recorded as a component of “management fees” in our consolidated statements of operations. Expense of $287,000 and $870,000 was recognized for the three and nine months ended September 30, 2018 and $222,000 and $439,000 for the three and nine months ended September 30, 2017, respectively. The unamortized cost of the unvested grants was $1.9 million as of September 30, 2018, which will be amortized over a period of 2.5 years. On June 26, 2018, Ashford Trust entered into the Enhanced Return Funding Program Agreement and Amendment No. 1 to the Amended and Restated Advisory Agreement (the “ERFP Agreement”) with Ashford Inc. The Amended and Restated Advisory Agreement was also amended to name Ashford Inc. and its subsidiaries as the Company’s sole and exclusive provider of asset management, project management and other services offered by Ashford Inc. or any of its subsidiaries and to revise the payment terms such that the base fee and reimbursable expenses will be paid monthly. The independent members of the board of directors of each of Ashford Inc. and Ashford Trust, with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on behalf of Ashford Inc. and Ashford Trust, respectively. The ERFP Agreement generally provides that Ashford LLC will make investments to facilitate the acquisition of properties by Ashford Trust OP that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). The investments will equal 10% of the property acquisition price and will be made, either at the time of the property acquisition or at any time generally in the following two years, in exchange for furniture, fixture and equipment for use at the acquired property or any other property owned by Ashford Trust OP. The initial term of the ERFP Agreement is two years (the “Initial Term”), unless earlier terminated pursuant to the terms of the ERFP Agreement. At the end of the Initial Term, the ERFP Agreement shall automatically renew for successive one-year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Ashford Trust provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement. As a result of the Hilton Alexandria Old Town acquisition, we are entitled to receive $11.1 million from Ashford LLC in the form of future purchases of hotel furniture, fixtures, and equipment at Ashford Trust properties that will be leased to us by Ashford LLC. As of September 30, 2018, Ashford Trust had received approximately $390,000 of furniture, fixtures and equipment from Ashford LLC. |
Subsequent Event |
9 Months Ended |
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Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event On October 31, 2018, the Company acquired a 100% interest in the 157-room La Posada de Santa Fe (“La Posada”) in Santa Fe, New Mexico for $50 million. As a result of the acquisition, the Company is entitled to receive $5.0 million from Ashford LLC in the form of future purchases of hotel furniture, fixtures, and equipment at Ashford Trust properties that will be leased to us by Ashford LLC. |
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 joint ventures in which it has a controlling interest. All significant inter-company 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 2017 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2018. 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 and (ii) 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 nine months ended September 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The following acquisitions and dispositions affect reporting comparability of our consolidated financial statements:
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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. |
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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. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. See note 5. 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 5. |
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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 16.3% to 25.1%, at September 30, 2018, 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 nine months ended September 30, 2018 and 2017. Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. Each VIE, 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, and (ii) 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 | Rooms revenue represents revenue from the occupancy of our hotel rooms and is driven by the occupancy and average daily rate charged. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay. Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, In-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audio-visual equipment/services, rental of function rooms, and other F&B related revenue. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenue as appropriate (i.e. gross vs. net). Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, resort and destination fees, spas, parking, entertainment and other guest services, as well as rental revenue; primarily consisting of leased retail outlets at our hotel properties. Attrition and cancellation fees are recognized for non-cancellable deposits when the customer provides notification of cancellation within established management policy time frames. For the three and nine months ended September 30, 2018, we recorded $0 and $2.5 million of business interruption income for the St. Petersburg Hilton and Key West Crowne Plaza related to a settlement for lost profits from the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010. 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—Prior to the adoption of Accounting Standards Update (“ASU”) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) in the third quarter of 2018, stock/unit-based compensation for non-employees was accounted for at fair value based on the market price of the shares at period end that resulted 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 were accounted for at fair value at period end based on a Monte Carlo simulation valuation model that resulted 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. After the adoption of ASU 2018-07 in the third quarter of 2018, stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date. This results in the recording of expense, included in “advisory services fee” and “management fees,” equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. PSUs and Performance LTIP units granted to certain executive officers vest based on market conditions and are measured at the grant date fair value based on a Monte Carlo simulation valuation model. The subsequent expense is then ratably recognized over the service period as the service is rendered regardless of when, if ever, the market conditions are satisfied. This results in recording expense, included in “advisory services fee,” equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. Stock/unit grants to independent directors are measured at the grant date 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 May 2014, the Financial Accounting Standards Board (“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 replaces most existing revenue recognition guidance in U.S. GAAP. The standard permits the use of either the full retrospective or cumulative effect (modified retrospective) transition method. This standard, referred to as “Topic 606,” does not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Additionally, we have historically disposed of hotel properties for cash sales with no contingencies and no future involvement in the hotel operations. Therefore, Topic 606 does not impact the recognition of hotel sales. We adopted this standard effective January 1, 2018, under the modified retrospective method, and the adoption of this standard did not have a material impact on our consolidated financial statements. See related disclosures in note 3. 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 other comprehensive income 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 adopted this standard effective January 1, 2018. The adoption of this standard did not have a material impact on our 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 adopted this standard effective January 1, 2018 on a prospective basis as there were no required changes as a result of adoption. The adoption of this standard did not have a material impact on our consolidated statements of cash flows. 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. We adopted this standard effective January 1, 2018. Under the new standard, 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). Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis. We concluded that our hotel acquisition completed in the second quarter of 2018 is the acquisition of assets because substantially all of the fair value of the gross assets acquired were concentrated in a single identifiable asset or a group of similar identifiable assets. As such, acquisition costs were capitalized as part of the transaction. See note 4. 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 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 method. We adopted this standard effective January 1, 2018, under the modified retrospective method. The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07, which expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees and aligns the guidance for share-based payments to non-employees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted ASU 2018-07 effective July 1, 2018. The adoption of ASU 2018-07 has a material impact on our consolidated financial statements because the compensation expense related to our equity awards is now determined based on the grant date fair value of the awards and will be ratably recognized over the service period as the service is rendered as opposed to being marked-to-market in periods prior to adoption. For all existing equity awards, future equity-based compensation expense is based on the fair value of the awards on July 1, 2018. See the Equity-Based Compensation section included above in our Significant Accounting Policies for further details. Recently Issued Accounting Standards—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. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantees, the rate implicit in the lease, lease term and purchase options. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption. ASU 2016-02 is effective for annual and interim periods for fiscal years beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of 2019 on a modified retrospective basis. The accounting for leases under which we are the lessor remains largely unchanged. While we continue evaluating our lease portfolio to assess 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. We disclosed $123.7 million in undiscounted future minimum rentals due under non-cancelable leases in note 12 of our most recent 10-K. We are involving our property managers and implementing repeatable processes to manage ongoing lease data collection and analysis, and evaluating accounting policies and internal controls that will be impacted by the new standards. We have also engaged in a third party valuation expert to assist us in determining the value of our ROU assets and operating lease liabilities including the determination of our incremental borrowing rate. We expect to use the transition method that includes the practical expedient that allows us to adopt effective January 1, 2019 and not reevaluate or recast prior periods, however we are still evaluating the available transition methods. 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 our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 modifies certain disclosure requirements related to fair value measurements including requiring disclosures on changes in unrealized gains and losses in other comprehensive income for recurring Level 3 fair value measurements and a requirement to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that ASU 2018-13 will have on the consolidated financial statements. |
Revenue (Tables) |
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Disaggregation of Revenue | The following tables presents our revenue disaggregated by geographical areas (in thousands):
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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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Schedule of preliminary fair value of the assets acquired and liabilities assumed | We allocated the cost of the acquisition including transaction costs to the individual assets acquired and liabilities assumed on a relative fair value basis, which is considered a Level 3 valuation technique, as noted in the following table (in thousands):
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Results included in operations | The results of operations of the hotel property have been included in our results of operations as of the acquisition date. The table below summarizes the total revenue and net income (loss) of the hotel property in our consolidated statements of operations for the three and nine months ended September 30, 2018:
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Hotel Dispositions, Impairment Charges and Insurance Recoveries and Assets Held For Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 nine months ended September 30, 2018 and 2017 (in thousands):
The major classes of assets and liabilities related to the assets held for sale included in the consolidated balance sheets at December 31, 2017 were as follows:
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Investment in Unconsolidated Entities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | The following table summarizes our carrying value and ownership interest in OpenKey:
The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):
The following tables summarize the condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 and the condensed consolidated statements of operations of Ashford Inc. and our equity in earnings (loss) for the three and nine months ended September 30, 2018 and 2017 (in thousands): Ashford Inc. Condensed Consolidated Balance Sheets (unaudited)
Ashford Inc. Condensed Consolidated Statements of Operations (unaudited)
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Indebtedness (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Indebtedness | The original principal amounts of each mortgage loan and the hotel properties securing each mortgage loan are set forth in the following table:
_____________________________ (1)On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinance. The net floating interest rate after the purchase of the Pool E loan is LIBOR + 2.73%. Indebtedness consisted of the following (in thousands):
_____________________________
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Schedule of Interest Expense - Premium Amortization | During the three and nine months ended September 30, 2018 and 2017, we recognized premium amortization as presented in the table below (in thousands):
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Income (Loss) Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Derivative Instruments and Hedging (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table presents a summary of our interest rate derivatives entered into over the applicable periods:
None of these instruments were designated as cash flow hedges. As of September 30, 2018, we held interest rate instruments as summarized in the table below:
_______________
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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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 nine months ended September 30, 2018 and 2017 (in thousands):
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Summary of Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Redeemable Noncontrolling Interests in Operating Partnership (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Expense | We recorded compensation expense for performance LTIP units and LTIP units as presented in the table below (in thousands):
The following table summarizes the stock-based compensation expense (in thousands):
The following table summarizes the compensation expense (in thousands):
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Redeemable Noncontrolling Interest | The following table shows the redeemable noncontrolling interest in Ashford Trust (in thousands) and the corresponding approximate ownership percentage:
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We allocated net income (loss) to the redeemable noncontrolling interests and declared aggregate cash distributions to holders of common units and holders of LTIP units, as presented in the table below (in thousands):
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Equity and Equity-Based Compensation (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Expense | We recorded compensation expense for performance LTIP units and LTIP units as presented in the table below (in thousands):
The following table summarizes the stock-based compensation expense (in thousands):
The following table summarizes the compensation expense (in thousands):
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Dividends Declared | The board of directors declared quarterly dividends as presented below:
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Schedule of Noncontrolling Interests in Consolidated Entities | The below table summarizes the (income) loss allocated to noncontrolling interests in consolidating entities (in thousands):
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Schedule of Equity Activity | On December 11, 2017, the Company established an “at-the-market” equity offering program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $100 million. The table below summarizes the issuance activity (in thousands):
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Related Party Transactions (Tables) |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following tables summarize the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the amounts recorded by us for those services and the applicable classification on our consolidated financial statements (in thousands):
________
________
The following table summarizes the amount due to Ashford Inc. (in thousands):
The following table summarizes the advisory services fees incurred (in thousands):
________
|
Significant Accounting Policies (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Real Estate Properties [Line Items] | ||||||
Impairment of unconsolidated entities | $ 0 | $ 0 | $ 0 | $ 0 | ||
Undiscounted future minimum rentals due under non-cancelable leases | $ 123,700,000 | |||||
OpenKey | ||||||
Real Estate Properties [Line Items] | ||||||
Ownership percentage | 16.30% | 16.30% | 16.20% | 13.30% | ||
Ashford Inc. | ||||||
Real Estate Properties [Line Items] | ||||||
Ownership percentage | 25.10% | 25.10% | ||||
Minimum | ||||||
Real Estate Properties [Line Items] | ||||||
Restricted cash reserves as percentage of property revenue | 4.00% | 4.00% | ||||
Maximum | ||||||
Real Estate Properties [Line Items] | ||||||
Restricted cash reserves as percentage of property revenue | 6.00% | 6.00% |
Investment in Hotel Properties, net (Investments) (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 665,578 | $ 653,293 |
Buildings and improvements | 4,033,508 | 3,895,112 |
Furniture, fixtures, and equipment | 494,583 | 468,420 |
Construction in progress | 30,960 | 35,273 |
Condominium properties | 12,173 | 12,196 |
Total cost | 5,236,802 | 5,064,294 |
Accumulated depreciation | (1,146,817) | (1,028,379) |
Investments in hotel properties, net | $ 4,089,985 | $ 4,035,915 |
Investment in Hotel Properties, net (Acquisitions) (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jun. 29, 2018
USD ($)
hotel
|
Sep. 30, 2018
USD ($)
room
|
Sep. 30, 2018
USD ($)
room
|
|
Business Acquisition [Line Items] | |||
Number of rooms | room | 24,930 | 24,930 | |
Hilton Alexandria Old Town | |||
Business Acquisition [Line Items] | |||
Percent of voting interest acquired | 100.00% | ||
Number of rooms | hotel | 252 | ||
Consideration transferred | $ 111,000 | ||
Land | 14,459 | ||
Buildings and improvements | 94,535 | ||
Furniture, fixtures and equipment | 2,479 | ||
Land, buildings and improvements, furniture, fixtures, and equipment | 111,473 | ||
Net other assets (liabilities) | $ 194 | ||
Total revenue | $ 4,523 | $ 4,523 | |
Net income (loss) | $ 194 | $ 194 |
Investment in Unconsolidated Entities (Narrative and OpenKey Schedules) (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | 30 Months Ended | |||
---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Jun. 30, 2018 |
|
Real Estate Properties [Line Items] | |||||||
Investment in unconsolidated entities | $ 4,514 | $ 4,514 | $ 2,955 | ||||
Investment cost | 667 | $ 983 | |||||
Equity in earnings (loss) in unconsolidated entity | $ 310 | $ (679) | $ 892 | (3,580) | |||
Ashford Inc. | |||||||
Real Estate Properties [Line Items] | |||||||
Shares in investment held (in shares) | 598 | 598 | |||||
Ownership percentage | 25.10% | 25.10% | |||||
Investment in unconsolidated entities | $ 1,800 | $ 1,800 | $ 437 | ||||
Fair value of equity method investment | 45,400 | 45,400 | |||||
Equity in earnings (loss) in unconsolidated entity | $ 470 | (568) | $ 1,326 | (3,291) | |||
OpenKey | |||||||
Real Estate Properties [Line Items] | |||||||
Ownership percentage | 16.30% | 16.30% | 16.20% | 13.30% | |||
Investment in unconsolidated entities | $ 2,751 | $ 2,751 | $ 2,518 | ||||
Investment cost | 667 | $ 983 | $ 2,300 | $ 4,000 | |||
Equity in earnings (loss) in unconsolidated entity | $ (160) | $ (111) | $ (434) | $ (341) |
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
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 | 2.261% | 2.261% | 1.564% | ||
Higher interest rate on derivatives | 3.032% | 3.032% | |||
Derivative expense related to credit default swaps | $ 272 | $ 257 | $ 809 | $ 769 |
Summary of Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Billions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
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 | $ 3.9 | $ 3.7 |
Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total indebtedness fair value variance from carrying value (as a percent) | 95.70% | 95.60% |
Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total indebtedness fair value variance from carrying value (as a percent) | 105.70% | 105.60% |
Segment Reporting (Details) |
9 Months Ended |
---|---|
Sep. 30, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Subsequent Event (Details) $ in Millions |
Oct. 31, 2018
USD ($)
room
|
Sep. 30, 2018
room
|
Jun. 26, 2018
USD ($)
|
---|---|---|---|
Subsequent Event [Line Items] | |||
Number of rooms | room | 24,930 | ||
Affiliated Entity | Ashford Inc. | |||
Subsequent Event [Line Items] | |||
ERFP, obligation amount | $ 11.1 | ||
Subsequent Event | La Posada | |||
Subsequent Event [Line Items] | |||
Number of rooms | room | 157 | ||
Consideration transferred | $ 50.0 | ||
Subsequent Event | La Posada | Affiliated Entity | Ashford Inc. | |||
Subsequent Event [Line Items] | |||
ERFP, obligation amount | $ 5.0 |
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