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 | 46-2488594 | |
(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 | ¨ |
Common Stock, $0.01 par value per share | 25,969,239 | |
(Class) | Outstanding at November 7, 2016 |
September 30, 2016 | December 31, 2015 | |||||||
Assets | ||||||||
Investments in hotel properties, net | $ | 1,018,889 | $ | 1,091,479 | ||||
Cash and cash equivalents | 128,625 | 105,039 | ||||||
Restricted cash | 41,098 | 33,135 | ||||||
Accounts receivable, net of allowance of $73 and $68, respectively | 17,527 | 13,370 | ||||||
Inventories | 1,401 | 1,451 | ||||||
Note receivable | 8,098 | 8,098 | ||||||
Deferred costs, net | 139 | 755 | ||||||
Prepaid expenses | 4,495 | 3,132 | ||||||
Investment in unconsolidated entity | — | 48,365 | ||||||
Investment in Ashford Inc., at fair value | 9,286 | 10,377 | ||||||
Derivative assets | 3,012 | 753 | ||||||
Other assets | 1,623 | 2,543 | ||||||
Intangible assets, net | 22,920 | 23,160 | ||||||
Due from Ashford Trust OP, net | 7 | — | ||||||
Due from related party, net | 454 | 371 | ||||||
Due from third-party hotel managers | 6,554 | 10,722 | ||||||
Total assets | $ | 1,264,128 | $ | 1,352,750 | ||||
Liabilities and Equity | ||||||||
Liabilities: | ||||||||
Indebtedness, net | $ | 766,030 | $ | 835,592 | ||||
Accounts payable and accrued expenses | 51,123 | 43,568 | ||||||
Dividends and distributions payable | 4,876 | 3,439 | ||||||
Unfavorable management contract liability, net | — | 158 | ||||||
Due to Ashford Trust OP, net | — | 528 | ||||||
Due to Ashford Inc., net | 3,721 | 6,369 | ||||||
Due to third-party hotel managers | 1,117 | 1,158 | ||||||
Intangible liability, net | 3,640 | 3,682 | ||||||
Other liabilities | 1,354 | 1,181 | ||||||
Total liabilities | $ | 831,861 | $ | 895,675 | ||||
Commitments and contingencies (Note 15) | ||||||||
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 2,890,850 and 2,600,000 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 65,960 | 62,248 | ||||||
Redeemable noncontrolling interests in operating partnership | 63,095 | 61,781 | ||||||
Equity: | ||||||||
Common stock, $0.01 par value, 200,000,000 shares authorized, 25,646,528 and 28,471,775 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 256 | 285 | ||||||
Additional paid-in capital | 399,517 | 438,347 | ||||||
Accumulated deficit | (90,662 | ) | (99,773 | ) | ||||
Total stockholders’ equity of the Company | 309,111 | 338,859 | ||||||
Noncontrolling interest in consolidated entities | (5,899 | ) | (5,813 | ) | ||||
Total equity | 303,212 | 333,046 | ||||||
Total liabilities and equity | $ | 1,264,128 | $ | 1,352,750 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | |||||||||||||||
Rooms | $ | 73,944 | $ | 70,584 | $ | 222,778 | $ | 192,868 | |||||||
Food and beverage | 20,106 | 16,346 | 72,022 | 58,368 | |||||||||||
Other | 5,568 | 3,795 | 16,977 | 10,038 | |||||||||||
Total hotel revenue | 99,618 | 90,725 | 311,777 | 261,274 | |||||||||||
Other | 33 | 34 | 103 | 111 | |||||||||||
Total revenue | 99,651 | 90,759 | 311,880 | 261,385 | |||||||||||
Expenses | |||||||||||||||
Hotel operating expenses: | |||||||||||||||
Rooms | 16,926 | 14,804 | 49,841 | 41,895 | |||||||||||
Food and beverage | 15,944 | 12,318 | 51,656 | 38,926 | |||||||||||
Other expenses | 28,249 | 25,508 | 86,923 | 69,405 | |||||||||||
Management fees | 3,820 | 3,709 | 11,958 | 10,564 | |||||||||||
Total hotel expenses | 64,939 | 56,339 | 200,378 | 160,790 | |||||||||||
Property taxes, insurance and other | 5,120 | 4,585 | 14,677 | 13,781 | |||||||||||
Depreciation and amortization | 11,175 | 11,308 | 34,342 | 32,384 | |||||||||||
Advisory services fee | 4,454 | 3,514 | 12,353 | 9,776 | |||||||||||
Transaction costs | 63 | 255 | 501 | 255 | |||||||||||
Corporate general and administrative | 2,653 | 1,502 | 16,414 | 3,810 | |||||||||||
Total expenses | 88,404 | 77,503 | 278,665 | 220,796 | |||||||||||
Operating income | 11,247 | 13,256 | 33,215 | 40,589 | |||||||||||
Equity in loss of unconsolidated entities | — | (3,399 | ) | (2,587 | ) | (4,219 | ) | ||||||||
Interest income | 50 | 12 | 132 | 21 | |||||||||||
Gain on sale of hotel property | 26,359 | — | 26,359 | — | |||||||||||
Other income (expense) | (78 | ) | (59 | ) | (88 | ) | 1,233 | ||||||||
Interest expense and amortization of loan costs | (9,795 | ) | (9,348 | ) | (31,066 | ) | (28,060 | ) | |||||||
Write-off of loan costs and exit fees | (2,595 | ) | — | (2,595 | ) | (54 | ) | ||||||||
Unrealized loss on investment in Ashford Inc. | (458 | ) | (5,621 | ) | (1,091 | ) | (5,621 | ) | |||||||
Unrealized gain (loss) on derivatives | (3,912 | ) | (2,061 | ) | 2,218 | (2,101 | ) | ||||||||
Income (loss) before income taxes | 20,818 | (7,220 | ) | 24,497 | 1,788 | ||||||||||
Income tax (expense) benefit | 504 | (62 | ) | (1,022 | ) | (371 | ) | ||||||||
Net income (loss) | 21,322 | (7,282 | ) | 23,475 | 1,417 | ||||||||||
Income from consolidated entities attributable to noncontrolling interests | (2,504 | ) | (1,090 | ) | (2,569 | ) | (1,068 | ) | |||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (1,960 | ) | 1,532 | (1,994 | ) | (671 | ) | ||||||||
Net income (loss) attributable to the Company | 16,858 | (6,840 | ) | 18,912 | (322 | ) | |||||||||
Preferred dividends | (994 | ) | (895 | ) | (2,866 | ) | (1,093 | ) | |||||||
Net income (loss) attributable to common stockholders | $ | 15,864 | $ | (7,735 | ) | $ | 16,046 | $ | (1,415 | ) | |||||
Income (loss) per share - basic: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | 0.61 | $ | (0.29 | ) | $ | 0.58 | $ | (0.06 | ) | |||||
Weighted average common shares outstanding – basic | 25,554 | 27,162 | 27,261 | 25,109 | |||||||||||
Income (loss) per share - diluted: | |||||||||||||||
Net income (loss) attributable to common stockholders | $ | 0.55 | $ | (0.29 | ) | $ | 0.56 | $ | (0.06 | ) | |||||
Weighted average common shares outstanding – diluted | 33,874 | 27,162 | 31,887 | 25,109 | |||||||||||
Dividends declared per common share | $ | 0.12 | $ | 0.10 | $ | 0.34 | $ | 0.25 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) | $ | 21,322 | $ | (7,282 | ) | $ | 23,475 | $ | 1,417 | ||||||
Other comprehensive income, net of tax: | |||||||||||||||
Total other comprehensive income | — | — | — | — | |||||||||||
Total comprehensive income (loss) | 21,322 | (7,282 | ) | 23,475 | 1,417 | ||||||||||
Comprehensive income attributable to noncontrolling interests in consolidated entities | (2,504 | ) | (1,090 | ) | (2,569 | ) | (1,068 | ) | |||||||
Comprehensive (income) loss attributable to noncontrolling interests in operating partnership | (1,960 | ) | 1,532 | (1,994 | ) | (671 | ) | ||||||||
Comprehensive income (loss) attributable to the Company | $ | 16,858 | $ | (6,840 | ) | $ | 18,912 | $ | (322 | ) |
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest in Consolidated Entities | Total | Redeemable Noncontrolling Interests in Operating Partnership | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance at January 1, 2016 | 28,472 | $ | 285 | $ | 438,347 | $ | (99,773 | ) | $ | (5,813 | ) | $ | 333,046 | $ | 61,781 | |||||||||||
Repurchase of common stock | (2,893 | ) | (29 | ) | (39,195 | ) | — | — | (39,224 | ) | — | |||||||||||||||
Equity-based compensation | — | — | 365 | — | — | 365 | 3,174 | |||||||||||||||||||
Issuance of restricted shares/units | 70 | — | — | — | — | — | 19 | |||||||||||||||||||
Forfeiture of restricted common shares | (2 | ) | — | — | — | — | — | — | ||||||||||||||||||
Dividends declared – common stock | — | — | — | (9,070 | ) | — | (9,070 | ) | — | |||||||||||||||||
Dividends declared – preferred stock | — | — | — | (2,866 | ) | — | (2,866 | ) | — | |||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | (2,655 | ) | (2,655 | ) | (1,738 | ) | ||||||||||||||||
Net income | — | — | — | 18,912 | 2,569 | 21,481 | 1,994 | |||||||||||||||||||
Redemption value adjustment | — | — | — | 2,135 | — | 2,135 | (2,135 | ) | ||||||||||||||||||
Balance at September 30, 2016 | 25,647 | $ | 256 | $ | 399,517 | $ | (90,662 | ) | $ | (5,899 | ) | $ | 303,212 | $ | 63,095 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 23,475 | $ | 1,417 | |||
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | |||||||
Depreciation and amortization | 34,342 | 32,384 | |||||
Equity-based compensation | 3,539 | 2,100 | |||||
Bad debt expense | 156 | 113 | |||||
Amortization of loan costs | 2,406 | 1,835 | |||||
Write-off of loan costs and exit fees | 2,595 | 54 | |||||
Amortization of intangibles | 71 | (110 | ) | ||||
Gain on sale of hotel property | (26,359 | ) | — | ||||
Realized and unrealized gain on marketable securities | — | (1,068 | ) | ||||
Unrealized loss on investment in Ashford Inc. | 1,091 | 5,621 | |||||
Purchases of trading securities | — | (105,878 | ) | ||||
Sales of trading securities | — | 55,654 | |||||
Realized and unrealized (gain) loss on derivatives | (2,140 | ) | 2,101 | ||||
Equity in loss of unconsolidated entity | 2,587 | 4,219 | |||||
Deferred tax (benefit) expense | 357 | (918 | ) | ||||
Payments for derivatives | (114 | ) | (3,853 | ) | |||
Changes in operating assets and liabilities, exclusive of the effect of acquisitions and dispositions of hotel properties: | |||||||
Restricted cash | (13,912 | ) | (1,433 | ) | |||
Accounts receivable and inventories | (4,082 | ) | (687 | ) | |||
Prepaid expenses and other assets | (1,346 | ) | (1,036 | ) | |||
Accounts payable and accrued expenses | 7,928 | 6,079 | |||||
Due to/from related party, net | (104 | ) | 6 | ||||
Due to/from third-party hotel managers | 4,027 | (2,903 | ) | ||||
Due to/from Ashford Trust OP, net | (535 | ) | (757 | ) | |||
Due to Ashford Inc. | (359 | ) | (105 | ) | |||
Other liabilities | 173 | (1 | ) | ||||
Net cash provided by (used in) operating activities | 33,796 | (7,166 | ) | ||||
Cash Flows from Investing Activities | |||||||
Proceeds from property insurance | — | 24 | |||||
Acquisition of hotel properties, net of cash acquired | — | (81,780 | ) | ||||
Proceeds from liquidation of AQUA U.S. Fund | 43,489 | — | |||||
Investment in Ashford Inc. | — | (16,623 | ) | ||||
Net proceeds from sales of hotel property | 82,732 | 206 | |||||
Change in restricted cash related to improvements and additions to hotel properties | 5,158 | (654 | ) | ||||
Improvements and additions to hotel properties | (16,615 | ) | (13,945 | ) | |||
Net cash provided by (used in) investing activities | 114,764 | (112,772 | ) | ||||
Cash Flows from Financing Activities | |||||||
Borrowings on indebtedness | — | 70,000 | |||||
Repayments of indebtedness | (71,283 | ) | (74,886 | ) | |||
Payments of loan costs and exit fees | (2,664 | ) | (1,199 | ) | |||
Payments for derivatives | (5 | ) | (8 | ) | |||
Repurchase of common stock | (39,224 | ) | (8,875 | ) | |||
Payments for dividends and distributions | (12,284 | ) | (7,725 | ) | |||
Issuance of preferred stock | 4,233 | 62,597 | |||||
Issuance of common stock | — | 3,104 | |||||
Forfeiture of restricted shares/units | — | (7 | ) | ||||
Redemption of operating partnership units | — | (5,856 | ) | ||||
Distributions to a noncontrolling interest in a consolidated entity | (3,766 | ) | (2,938 | ) | |||
Other | 19 | — | |||||
Net cash provided by (used in) financing activities | (124,974 | ) | 34,207 | ||||
Net change in cash and cash equivalents | 23,586 | (85,731 | ) | ||||
Cash and cash equivalents at beginning of period | 105,039 | 171,439 | |||||
Cash and cash equivalents at end of period | $ | 128,625 | $ | 85,708 | |||
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Supplemental Cash Flow Information | |||||||
Interest paid | $ | 29,039 | $ | 25,830 | |||
Income taxes paid | 379 | 1,788 | |||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities | |||||||
Investment in unconsolidated entity | $ | — | $ | 51,292 | |||
Net other assets and liabilities acquired | — | (3,208 | ) | ||||
Dividends and distributions declared but not paid | 4,876 | 3,320 | |||||
Capital expenditures accrued but not paid | 1,181 | 613 | |||||
Non-cash consideration from sale of property, plant and equipment | — | 1,363 | |||||
Investment in Ashford Inc. | — | 1,363 | |||||
Receivable related to liquidation of AQUA U.S. Fund | 2,289 | — | |||||
Accrued preferred stock offering expenses | — | 258 | |||||
Non-cash preferred stock offering expense | 479 | — |
• | Historical seasonality patterns at some of our properties cause fluctuations in our overall operating results. Consequently, operating results for the three and nine months ended September 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. |
• | On July 9, 2015, we acquired the Bardessono Hotel and Spa (“Bardessono Hotel”) and on December 15, 2015, we acquired the Ritz-Carlton St. Thomas, USVI (“Ritz-Carlton St. Thomas”). The operating results of these properties are included in our results of operations as of their acquisition dates. |
• | On July 1, 2016, we sold the Courtyard Seattle Downtown. |
September 30, 2016 | December 31, 2015 | |||||||
Land | $ | 210,696 | $ | 227,620 | ||||
Buildings and improvements | 969,222 | 1,017,086 | ||||||
Furniture, fixtures and equipment | 66,584 | 68,529 | ||||||
Construction in progress | 6,369 | 2,386 | ||||||
Total cost | 1,252,871 | 1,315,621 | ||||||
Accumulated depreciation | (233,982 | ) | (224,142 | ) | ||||
Investments in hotel properties, net | $ | 1,018,889 | $ | 1,091,479 |
Preliminary Allocations as of December 31, 2015 | Adjustments | Final Allocations as of March 31, 2016 | |||||||||
Land | $ | 25,264 | $ | 269 | $ | 25,533 | |||||
Buildings and improvements | 34,853 | (3,100 | ) | 31,753 | |||||||
Furniture, fixtures, and equipment | 3,883 | 2,831 | 6,714 | ||||||||
$ | 64,000 | $ | — | $ | 64,000 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total hotel revenue | $ | — | $ | 5,662 | $ | 7,995 | $ | 12,877 | |||||||
Total hotel operating expenses | — | (3,163 | ) | (4,463 | ) | (7,174 | ) | ||||||||
Operating income | — | 2,499 | 3,532 | 5,703 | |||||||||||
Property taxes, insurance and other | — | (159 | ) | (333 | ) | (472 | ) | ||||||||
Depreciation and amortization | — | (531 | ) | (834 | ) | (1,558 | ) | ||||||||
Gain on sale of hotel property | 26,359 | — | 26,359 | — | |||||||||||
Interest expense and amortization of loan costs | — | (881 | ) | (1,709 | ) | (2,624 | ) | ||||||||
Net income | 26,359 | 928 | 27,015 | 1,049 | |||||||||||
Net income attributable to redeemable noncontrolling interests in operating partnership | (2,899 | ) | (153 | ) | (2,972 | ) | (173 | ) | |||||||
Net income attributable to the Company | $ | 23,460 | $ | 775 | $ | 24,043 | $ | 876 |
September 30, 2016 | December 31, 2015 | |||||||
Total assets | $ | 125,957 | $ | 166,991 | ||||
Total liabilities | 35,648 | 30,115 | ||||||
Redeemable noncontrolling interests | 1,386 | 240 | ||||||
Total stockholders’ equity of Ashford Inc. | 34,346 | 32,165 | ||||||
Noncontrolling interests in consolidated entities | 54,577 | 104,471 | ||||||
Total equity | 88,923 | 136,636 | ||||||
Total liabilities and equity | $ | 125,957 | $ | 166,991 | ||||
Our investment in Ashford Inc., at fair value | $ | 9,286 | $ | 10,377 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Total revenue | $ | 16,538 | $ | 14,496 | $ | 48,099 | $ | 42,103 | ||||||||
Total operating expenses | (16,673 | ) | (13,219 | ) | (50,938 | ) | (45,600 | ) | ||||||||
Operating income (loss) | (135 | ) | 1,277 | (2,839 | ) | (3,497 | ) | |||||||||
Realized and unrealized loss on investment in unconsolidated entity | — | (1,954 | ) | (1,460 | ) | (3,020 | ) | |||||||||
Realized and unrealized loss on investments | (441 | ) | (7,826 | ) | (5,889 | ) | (9,781 | ) | ||||||||
Other | 59 | 385 | (21 | ) | 599 | |||||||||||
Income tax expense | (575 | ) | (1,036 | ) | (560 | ) | (1,500 | ) | ||||||||
Net loss | (1,092 | ) | (9,154 | ) | (10,769 | ) | (17,199 | ) | ||||||||
Loss from consolidated entities attributable to noncontrolling interests | 486 | 9,208 | 6,852 | 13,323 | ||||||||||||
Net loss attributable to redeemable noncontrolling interests | 321 | — | 794 | 10 | ||||||||||||
Net income (loss) attributable to Ashford Inc. | $ | (285 | ) | $ | 54 | $ | (3,123 | ) | $ | (3,866 | ) | |||||
Our unrealized loss on investment in Ashford Inc. | $ | (458 | ) | $ | (5,621 | ) | $ | (1,091 | ) | $ | (5,621 | ) |
December 31, 2015 | ||||
Total assets | $ | 106,792 | ||
Partners’ capital | 106,792 | |||
Total liabilities and partners’ capital | $ | 106,792 | ||
Our ownership interest in the AQUA U.S. Fund | $ | 48,365 |
Six Months Ended June 30, 2016 | Three Months Ended September 30, 2015 | Nine Months Ended September 30, 2015 | ||||||||||
Total investment income | $ | 52 | $ | 508 | $ | 732 | ||||||
Net expenses | (262 | ) | (205 | ) | (235 | ) | ||||||
Net investment income (loss) | (210 | ) | 303 | 497 | ||||||||
Net unrealized gain (loss) on investments | 940 | (7,839 | ) | (10,829 | ) | |||||||
Net realized gain (loss) on investments | (6,331 | ) | 29 | 1,064 | ||||||||
Net loss attributable to the AQUA U.S. Fund | $ | (5,601 | ) | $ | (7,507 | ) | $ | (9,268 | ) | |||
Our equity in loss of the AQUA U.S. Fund | $ | (2,587 | ) | $ | (3,399 | ) | $ | (4,219 | ) |
Indebtedness | Collateral | Maturity | Interest Rate | September 30, 2016 | December 31, 2015 | |||||||||
Secured revolving credit facility(3) | None | November 2016 | Base Rate (2) + 1.25% to 2.75% or LIBOR(1) + 2.25% to 3.75% | $ | — | $ | — | |||||||
Mortgage loan(4) | 1 hotel | March 2017 | LIBOR(1) + 2.30% | 80,000 | 80,000 | |||||||||
Mortgage loan(5) | 1 hotel | March 2017 | LIBOR(1) + 2.25% | 70,000 | 70,000 | |||||||||
Mortgage loan(6) | 1 hotel | April 2017 | 5.91% | 33,010 | 33,381 | |||||||||
Mortgage loan(7) | 1 hotel | April 2017 | 5.95% | 56,136 | 122,374 | |||||||||
Mortgage loan | 3 hotels | April 2017 | 5.95% | 246,277 | 249,020 | |||||||||
Mortgage loan(5) | 1 hotel | December 2017 | LIBOR(1) + 4.95% | 40,000 | 40,000 | |||||||||
Mortgage loan(5) | 1 hotel | December 2017 | LIBOR(1) + 4.95% | 42,000 | 42,000 | |||||||||
TIF loan(6) (8) | 1 hotel | June 2018 | 12.85% | 8,098 | 8,098 | |||||||||
Mortgage loan(9) | 2 hotels | November 2019 | LIBOR(1) + 2.65% | 193,428 | 195,359 | |||||||||
768,949 | 840,232 | |||||||||||||
Deferred loan costs, net | (2,919 | ) | (4,640 | ) | ||||||||||
Indebtedness, net | $ | 766,030 | $ | 835,592 |
(1) | LIBOR rates were 0.531% and 0.430% at September 30, 2016 and December 31, 2015, respectively. |
(2) | Base Rate, as defined in the secured revolving credit facility agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%. |
(3) | Our borrowing capacity under our secured revolving credit facility is $150.0 million. We have an option, subject to lender approval, to further increase the borrowing capacity to an aggregate of $300.0 million. We may use up to $15.0 million for standby letters of credit. The secured revolving credit facility has two one-year extension options subject to advance notice, satisfaction of certain conditions and a 0.25% extension fee. |
(4) | This loan has three one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in March 2016. |
(5) | This loan has three one-year extension options, subject to satisfaction of certain conditions. |
(6) | These loans are collateralized by the same property. |
(7) | Approximately $65 million of the mortgage loan was repaid upon the sale of Courtyard Seattle Downtown which occurred on July 1, 2016. |
(8) | The interest expense from the TIF loan is offset against interest income recorded on the note receivable of the same amount. See note 5. |
(9) | This loan has two one-year extension options, subject to satisfaction of certain conditions. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) attributable to common stockholders - Basic and diluted: | |||||||||||||||
Net income (loss) attributable to the Company | $ | 16,858 | $ | (6,840 | ) | $ | 18,912 | $ | (322 | ) | |||||
Less: Dividends on preferred stock | (994 | ) | (895 | ) | (2,866 | ) | (1,093 | ) | |||||||
Less: Dividends on common stock | (3,064 | ) | (2,833 | ) | (9,041 | ) | (6,449 | ) | |||||||
Less: Dividends on unvested performance stock units | (19 | ) | (35 | ) | (73 | ) | (70 | ) | |||||||
Less: Dividends on unvested restricted shares | (12 | ) | (14 | ) | (34 | ) | (27 | ) | |||||||
Less: Net income allocated to unvested performance stock units | (142 | ) | — | (15 | ) | — | |||||||||
Less: Net income allocated to unvested restricted shares | (63 | ) | — | (32 | ) | — | |||||||||
Undistributed net income (loss) allocated to common stockholders | 12,564 | (10,617 | ) | 6,851 | (7,961 | ) | |||||||||
Add back: Dividends on common stock | 3,064 | 2,833 | 9,041 | 6,449 | |||||||||||
Distributed and undistributed net income (loss) - basic | $ | 15,628 | $ | (7,784 | ) | $ | 15,892 | $ | (1,512 | ) | |||||
Net income attributable to redeemable noncontrolling interests in operating partnership | 1,960 | — | 1,994 | — | |||||||||||
Dividends on preferred stock | 994 | — | — | — | |||||||||||
Distributed and undistributed net income (loss) - diluted | $ | 18,582 | $ | (7,784 | ) | $ | 17,886 | $ | (1,512 | ) | |||||
Weighted average common shares outstanding: | |||||||||||||||
Weighted average common shares outstanding – basic | 25,554 | 27,162 | 27,261 | 25,109 | |||||||||||
Effect of assumed conversion of operating partnership units | 4,395 | — | 4,524 | — | |||||||||||
Effect of assumed conversion of preferred stock | 3,824 | — | — | — | |||||||||||
Incentive fee shares | 101 | — | 102 | — | |||||||||||
Weighted average common shares outstanding – diluted | 33,874 | 27,162 | 31,887 | 25,109 | |||||||||||
Income (loss) per share - basic | |||||||||||||||
Net income (loss) allocated to common stockholders per share | $ | 0.61 | $ | (0.29 | ) | $ | 0.58 | $ | (0.06 | ) | |||||
Income (loss) per share - diluted | |||||||||||||||
Net income (loss) allocated to common stockholders per share | $ | 0.55 | $ | (0.29 | ) | $ | 0.56 | $ | (0.06 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income (loss) allocated to common stockholders is not adjusted for: | |||||||||||||||
Income allocated to unvested restricted shares | $ | 75 | $ | 14 | $ | 66 | $ | 27 | |||||||
Income allocated to unvested performance stock units | 161 | 35 | 88 | 70 | |||||||||||
Income (loss) attributable to redeemable noncontrolling interests in operating partnership | — | (1,532 | ) | — | 671 | ||||||||||
Dividends on preferred stock | — | 895 | 2,866 | 1,093 | |||||||||||
Total | $ | 236 | $ | (588 | ) | $ | 3,020 | $ | 1,861 | ||||||
Weighted average diluted shares are not adjusted for: | |||||||||||||||
Effect of unvested restricted shares | 56 | 64 | 55 | 38 | |||||||||||
Effect of unvested performance stock units | 65 | 181 | 58 | 69 | |||||||||||
Effect of assumed conversion of operating partnership units | — | 5,385 | — | 7,446 | |||||||||||
Effect of assumed conversion of preferred stock | — | 3,439 | 3,608 | 1,398 | |||||||||||
Total | 121 | 9,069 | 3,721 | 8,951 |
• | 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) | Total | ||||||||||
September 30, 2016 | ||||||||||||
Assets | ||||||||||||
Derivative assets: | ||||||||||||
Interest rate derivatives - floors | $ | — | $ | 2,914 | $ | 2,914 | ||||||
Interest rate derivatives - caps | — | 1 | 1 | |||||||||
Options on futures contracts | 97 | — | 97 | |||||||||
97 | 2,915 | 3,012 | (1) | |||||||||
Non-derivative assets: | ||||||||||||
Investment in Ashford Inc. | 9,286 | — | 9,286 | |||||||||
Total | $ | 9,383 | $ | 2,915 | $ | 12,298 |
Quoted Market Prices (Level 1) | Significant Other Observable Inputs (Level 2) | Total | ||||||||||
December 31, 2015 | ||||||||||||
Assets | ||||||||||||
Derivative assets: | ||||||||||||
Interest rate derivatives - floors | $ | — | $ | 578 | $ | 578 | ||||||
Interest rate derivatives - caps | — | 58 | 58 | |||||||||
Options on futures contracts | 117 | — | 117 | |||||||||
117 | 636 | 753 | (1) | |||||||||
Non-derivative assets: | ||||||||||||
Investment in Ashford Inc. | 10,377 | — | 10,377 | |||||||||
Total | $ | 10,494 | $ | 636 | $ | 11,130 |
(1) | Reported as “derivative assets” in the condensed consolidated balance sheets. |
Gain (Loss) Recognized in Income | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||
Assets | |||||||||||||||||
Derivative assets: | |||||||||||||||||
Interest rate derivatives - floors | $ | (3,911 | ) | $ | (2,059 | ) | $ | 2,336 | $ | (2,059 | ) | ||||||
Interest rate derivatives - caps | (2 | ) | (2 | ) | (62 | ) | (42 | ) | |||||||||
Equity put options | — | — | — | (1,017 | ) | ||||||||||||
Equity call options | — | — | — | 23 | |||||||||||||
Options on futures contracts | (77 | ) | — | (134 | ) | — | |||||||||||
Non-derivative assets: | |||||||||||||||||
Investment in Ashford Inc. | (458 | ) | (5,621 | ) | (1,091 | ) | (5,621 | ) | |||||||||
Equity - American Depositary Receipt | — | — | — | (75 | ) | ||||||||||||
Equity securities | — | — | — | 560 | |||||||||||||
U.S. treasury securities | — | — | — | 53 | |||||||||||||
Total | (4,448 | ) | (7,682 | ) | 1,049 | (8,178 | ) | ||||||||||
Liabilities | |||||||||||||||||
Derivative liabilities: | |||||||||||||||||
Short equity put options | — | — | — | 680 | |||||||||||||
Short equity call options | — | — | — | 844 | |||||||||||||
Net | $ | (4,448 | ) | $ | (7,682 | ) | $ | 1,049 | $ | (6,654 | ) | ||||||
Total combined | |||||||||||||||||
Interest rate derivatives - floors | $ | (3,911 | ) | $ | (2,059 | ) | $ | 2,336 | $ | (2,059 | ) | ||||||
Interest rate derivatives - caps | (2 | ) | (2 | ) | (62 | ) | (42 | ) | |||||||||
Options on futures contracts | 1 | — | (56 | ) | — | ||||||||||||
Unrealized gain (loss) on derivatives | (3,912 | ) | (2,061 | ) | 2,218 | (2,101 | ) | ||||||||||
Realized loss on options on future contracts | (78 | ) | (1) | — | (1) | (78 | ) | (1) | — | (1) | |||||||
Unrealized loss on investment in Ashford Inc. | (458 | ) | (5,621 | ) | (1,091 | ) | (5,621 | ) | |||||||||
Unrealized loss on marketable securities | — | — | — | — | |||||||||||||
Realized gain on marketable securities | — | (1) | — | (1) | — | (1) | 1,068 | (1) | |||||||||
Net | $ | (4,448 | ) | $ | (7,682 | ) | $ | 1,049 | $ | (6,654 | ) |
(1) | Reported as “other income (expense)” in the condensed consolidated statements of operations. |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||
Investment in Ashford Inc. | $ | 9,286 | $ | 9,286 | $ | 10,377 | $ | 10,377 | ||||||||
Derivative assets | 3,012 | 3,012 | 753 | 753 | ||||||||||||
Financial assets not measured at fair value: | ||||||||||||||||
Cash and cash equivalents | $ | 128,625 | $ | 128,625 | $ | 105,039 | $ | 105,039 | ||||||||
Restricted cash | 41,098 | 41,098 | 33,135 | 33,135 | ||||||||||||
Accounts receivable, net | 17,527 | 17,527 | 13,370 | 13,370 | ||||||||||||
Note receivable | 8,098 | 8,768 to 9,691 | 8,098 | 9,157 to 10,120 | ||||||||||||
Due from Ashford Trust OP, net | 7 | 7 | — | — | ||||||||||||
Due from related party, net | 454 | 454 | 371 | 371 | ||||||||||||
Due from third-party hotel managers | 6,554 | 6,554 | 10,722 | 10,722 | ||||||||||||
Financial liabilities not measured at fair value: | ||||||||||||||||
Indebtedness | $ | 768,949 | $729,637 to 806,442 | $ | 840,232 | $801,058 to $885,379 | ||||||||||
Accounts payable and accrued expenses | 51,123 | 51,123 | 43,568 | 43,568 | ||||||||||||
Dividends and distributions payable | 4,876 | 4,876 | 3,439 | 3,439 | ||||||||||||
Due to Ashford Trust OP, net | — | — | 528 | 528 | ||||||||||||
Due to Ashford Inc. | 3,721 | 3,721 | 6,369 | 6,369 | ||||||||||||
Due to third-party hotel managers | 1,117 | 1,117 | 1,158 | 1,158 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Advisory services fee | ||||||||||||||||
Base advisory fee | $ | 2,103 | $ | 2,144 | $ | 6,334 | $ | 6,513 | ||||||||
Reimbursable expenses (1) | 730 | 435 | 2,027 | 1,417 | ||||||||||||
Equity-based compensation (2) | 1,134 | 935 | 3,220 | 1,846 | ||||||||||||
Incentive fee | 487 | — | 772 | — | ||||||||||||
$ | 4,454 | $ | 3,514 | $ | 12,353 | $ | 9,776 |
(1) | Reimbursable expenses include overhead, internal audit, insurance claims advisory and asset management services. |
(2) | Equity-based compensation is associated with equity grants of Ashford Prime’s common stock and LTIP units awarded to officers and employees of Ashford LLC. |
• | our business and investment strategy; |
• | our projected operating results and dividend rates; |
• | our ability to obtain future financing arrangements; |
• | our understanding of our competition; |
• | market trends; |
• | projected capital expenditures; |
• | anticipated acquisitions or dispositions; and |
• | the impact of technology on our operations and business. |
• | factors discussed in our Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2016 (the “2015 10-K”), 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 volatility of the capital markets, the general economy or the hospitality industry, whether the result of market events or otherwise; |
• | our ability to deploy capital and raise additional capital at reasonable costs to repay debts, invest in our properties and fund future acquisitions; |
• | the degree and nature of our competition; |
• | actual and potential conflicts of interest with Ashford Trust, Ashford LLC, Ashford Inc., Remington Lodging, our executive officers and our non-independent directors; |
• | changes in personnel of Ashford LLC or the lack of availability of qualified personnel; |
• | changes in governmental regulations, accounting rules, tax rates and similar matters; |
• | legislative and regulatory changes, including changes to the Internal Revenue Code and related rules, regulations and interpretations governing the taxation of real estate investment trusts (“REITs”); and |
• | limitations imposed on our business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes. |
• | Utilizing up to $50 million to initiate a stock repurchase program; |
• | Amending the Company’s 2016 dividend policy commencing with the second quarter by increasing the expected quarterly cash dividend for the Company’s common stock by 20%, from $0.10 per diluted share to $0.12 per diluted share. This equates to an annual rate of $0.48 per diluted share, representing a 4.4% yield based on the Company’s closing stock price on April 7, 2016; |
• | Liquidating our investment in the AQUA U.S. Fund and utilizing the cash to fund the share repurchase plan; |
• | Immediately unwinding the OP Unit enfranchisement preferred equity transaction for the Company’s OP unit holders, previously announced on February 2, 2016; and |
• | Commencing the sale process for up to four of the Company’s assets that do not have the RevPAR level and product quality consistent with the long-term vision of Ashford Prime. The assets include the Courtyard Philadelphia Downtown Hotel, Courtyard Seattle Downtown Hotel, Renaissance Tampa Hotel and Marriott Legacy Center Hotel in Plano, Texas. |
• | Occupancy-Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period. |
• | ADR-ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate. |
• | RevPAR-RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees. |
• | advisory fees payable to Ashford LLC; |
• | recurring maintenance necessary to maintain our hotels in accordance with brand standards; |
• | interest expense and scheduled principal payments on outstanding indebtedness, including our secured revolving credit facility (see “Contractual Obligations and Commitments”); |
• | distributions, in the form of dividends on our common stock, necessary to qualify for taxation as a REIT; |
• | dividends on preferred stock; and |
• | capital expenditures to improve our hotels. |
• | Consolidated indebtedness (less cash and cash equivalents and amounts represented by marketable securities) to EBITDA not to exceed 6.25x and beginning September 30, 2016 to 5.75x; provided, however, that a one-time allowance will be made if we are out of compliance with such covenant by an amount of 0.50x for the first three fiscal quarters following a significant acquisition occurring after November 30, 2014. This ratio was 5.69x at September 30, 2016. |
• | Consolidated recourse indebtedness other than the secured revolving credit facility not to exceed $50,000,000. |
• | Consolidated fixed charge coverage ratio not less than 1.35x. This ratio was 1.74x at September 30, 2016. |
• | Indebtedness of the consolidated parties that accrues interest at a variable rate (other than the secured revolving credit facility) that is not subject to a “cap,” “collar,” or other similar arrangement not to exceed 25% of consolidated indebtedness. |
• | Consolidated tangible net worth not less than 75% of the consolidated tangible net worth on the closing date of the secured revolving credit facility plus 75% of the net proceeds of any future equity issuances. |
• | Secured debt that is secured by real property (excluding the eight hotels we acquired in connection with the spin-off) not to exceed 70% of the as-is appraised value of such real property. |
Three Months Ended September 30, | ||||||||||||||
2016 | 2015 | $ Change | % Change | |||||||||||
Revenue | ||||||||||||||
Rooms | $ | 73,944 | $ | 70,584 | $ | 3,360 | 4.8 | % | ||||||
Food and beverage | 20,106 | 16,346 | 3,760 | 23.0 | ||||||||||
Other | 5,568 | 3,795 | 1,773 | 46.7 | ||||||||||
Total hotel revenue | 99,618 | 90,725 | 8,893 | 9.8 | ||||||||||
Other | 33 | 34 | (1 | ) | (2.9 | ) | ||||||||
Total revenue | 99,651 | 90,759 | 8,892 | 9.8 | ||||||||||
Expenses | ||||||||||||||
Hotel operating expenses: | ||||||||||||||
Rooms | 16,926 | 14,804 | 2,122 | 14.3 | ||||||||||
Food and beverage | 15,944 | 12,318 | 3,626 | 29.4 | ||||||||||
Other expenses | 28,249 | 25,508 | 2,741 | 10.7 | ||||||||||
Management fees | 3,820 | 3,709 | 111 | 3.0 | ||||||||||
Total hotel expenses | 64,939 | 56,339 | 8,600 | 15.3 | ||||||||||
Property taxes, insurance and other | 5,120 | 4,585 | 535 | 11.7 | ||||||||||
Depreciation and amortization | 11,175 | 11,308 | (133 | ) | (1.2 | ) | ||||||||
Advisory services fee | 4,454 | 3,514 | 940 | 26.8 | ||||||||||
Transaction costs | 63 | 255 | (192 | ) | (75.3 | ) | ||||||||
Corporate general and administrative | 2,653 | 1,502 | 1,151 | 76.6 | ||||||||||
Total expenses | 88,404 | 77,503 | 10,901 | 14.1 | ||||||||||
Operating income | 11,247 | 13,256 | (2,009 | ) | (15.2 | ) | ||||||||
Equity in loss of unconsolidated entity | — | (3,399 | ) | 3,399 | 100.0 | |||||||||
Interest income | 50 | 12 | 38 | 316.7 | ||||||||||
Gain on sale of hotel property | 26,359 | — | 26,359 | |||||||||||
Other expense | (78 | ) | (59 | ) | 19 | 32.2 | ||||||||
Interest expense and amortization of loan costs | (9,795 | ) | (9,348 | ) | 447 | 4.8 | ||||||||
Write-off of loan costs and exit fees | (2,595 | ) | — | (2,595 | ) | |||||||||
Unrealized loss on investment in Ashford Inc. | (458 | ) | (5,621 | ) | (5,163 | ) | (91.9 | ) | ||||||
Unrealized loss on derivatives | (3,912 | ) | (2,061 | ) | 1,851 | 89.8 | ||||||||
Income (loss) before income taxes | 20,818 | (7,220 | ) | 28,038 | 388.3 | |||||||||
Income tax (expense) benefit | 504 | (62 | ) | 566 | 912.9 | |||||||||
Net income (loss) | 21,322 | (7,282 | ) | 28,604 | 392.8 | |||||||||
Income from consolidated entities attributable to noncontrolling interests | (2,504 | ) | (1,090 | ) | 1,414 | 129.7 | ||||||||
(Income) loss attributable to redeemable noncontrolling interests in operating partnership | (1,960 | ) | 1,532 | 3,492 | 227.9 | |||||||||
Net income (loss) attributable to the Company | $ | 16,858 | $ | (6,840 | ) | $ | 23,698 | 346.5 | % |
Three Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Occupancy | 86.89 | % | 85.75 | % | |||
ADR (average daily rate) | $ | 249.86 | $ | 237.53 | |||
RevPAR (revenue per available room) | $ | 217.11 | $ | 203.69 | |||
Rooms revenue (in thousands) | $ | 73,944 | $ | 70,584 | |||
Total hotel revenue (in thousands) | $ | 99,618 | $ | 90,725 |
Three Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Occupancy | 87.16 | % | 85.84 | % | |||
ADR (average daily rate) | $ | 231.80 | $ | 226.82 | |||
RevPAR (revenue per available room) | $ | 202.05 | $ | 194.71 | |||
Rooms revenue (in thousands) | $ | 64,315 | $ | 61,979 | |||
Total hotel revenue (in thousands) | $ | 84,114 | $ | 80,119 |
Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | $ Change | % Change | |||||||||||
Revenue | ||||||||||||||
Rooms | $ | 222,778 | $ | 192,868 | $ | 29,910 | 15.5 | % | ||||||
Food and beverage | 72,022 | 58,368 | 13,654 | 23.4 | ||||||||||
Other | 16,977 | 10,038 | 6,939 | 69.1 | ||||||||||
Total hotel revenue | 311,777 | 261,274 | 50,503 | 19.3 | ||||||||||
Other | 103 | 111 | (8 | ) | (7.2 | ) | ||||||||
Total revenue | 311,880 | 261,385 | 50,495 | 19.3 | ||||||||||
Expenses | ||||||||||||||
Hotel operating expenses: | ||||||||||||||
Rooms | 49,841 | 41,895 | 7,946 | 19.0 | ||||||||||
Food and beverage | 51,656 | 38,926 | 12,730 | 32.7 | ||||||||||
Other expenses | 86,923 | 69,405 | 17,518 | 25.2 | ||||||||||
Management fees | 11,958 | 10,564 | 1,394 | 13.2 | ||||||||||
Total hotel expenses | 200,378 | 160,790 | 39,588 | 24.6 | ||||||||||
Property taxes, insurance and other | 14,677 | 13,781 | 896 | 6.5 | ||||||||||
Depreciation and amortization | 34,342 | 32,384 | 1,958 | 6.0 | ||||||||||
Advisory services fee | 12,353 | 9,776 | 2,577 | 26.4 | ||||||||||
Transaction costs | 501 | 255 | 246 | 96.5 | ||||||||||
Corporate general and administrative | 16,414 | 3,810 | 12,604 | 330.8 | ||||||||||
Total expenses | 278,665 | 220,796 | 57,869 | 26.2 | ||||||||||
Operating income | 33,215 | 40,589 | (7,374 | ) | (18.2 | ) | ||||||||
Equity in loss of unconsolidated entity | (2,587 | ) | (4,219 | ) | (1,632 | ) | (38.7 | ) | ||||||
Interest income | 132 | 21 | 111 | 528.6 | ||||||||||
Gain on sale of hotel property | 26,359 | — | 26,359 | |||||||||||
Other income (expense) | (88 | ) | 1,233 | 1,321 | 107.1 | |||||||||
Interest expense and amortization of loan costs | (31,066 | ) | (28,060 | ) | 3,006 | 10.7 | ||||||||
Write-off of loan costs and exit fees | (2,595 | ) | (54 | ) | 2,541 | 4,705.6 | ||||||||
Unrealized loss on investment in Ashford Inc. | (1,091 | ) | (5,621 | ) | (4,530 | ) | (80.6 | ) | ||||||
Unrealized gain (loss) on derivatives | 2,218 | (2,101 | ) | 4,319 | 205.6 | |||||||||
Income before income taxes | 24,497 | 1,788 | 22,709 | 1,270.1 | ||||||||||
Income tax expense | (1,022 | ) | (371 | ) | 651 | 175.5 | ||||||||
Net income | 23,475 | 1,417 | 22,058 | 1,556.7 | ||||||||||
Income from consolidated entities attributable to noncontrolling interests | (2,569 | ) | (1,068 | ) | 1,501 | 140.5 | ||||||||
Net income attributable to redeemable noncontrolling interests in operating partnership | (1,994 | ) | (671 | ) | 1,323 | 197.2 | ||||||||
Net income (loss) attributable to the Company | $ | 18,912 | $ | (322 | ) | $ | 19,234 | 5,973.3 | % |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Occupancy | 83.65 | % | 83.61 | % | |||
ADR (average daily rate) | $ | 251.27 | $ | 226.68 | |||
RevPAR (revenue per available room) | $ | 210.20 | $ | 189.52 | |||
Rooms revenue (in thousands) | $ | 222,778 | $ | 192,868 | |||
Total hotel revenue (in thousands) | $ | 311,777 | $ | 261,274 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Occupancy | 83.74 | % | 83.81 | % | |||
ADR (average daily rate) | $ | 231.43 | $ | 224.88 | |||
RevPAR (revenue per available room) | $ | 193.81 | $ | 188.48 | |||
Rooms revenue (in thousands) | $ | 183,737 | $ | 177,958 | |||
Total hotel revenue (in thousands) | $ | 250,236 | $ | 243,453 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income (loss) | $ | 21,322 | $ | (7,282 | ) | $ | 23,475 | $ | 1,417 | |||||||
Income from consolidated entities attributable to noncontrolling interests | (2,504 | ) | (1,090 | ) | (2,569 | ) | (1,068 | ) | ||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (1,960 | ) | 1,532 | (1,994 | ) | (671 | ) | |||||||||
Net income (loss) attributable to the Company | 16,858 | (6,840 | ) | 18,912 | (322 | ) | ||||||||||
Interest income | (50 | ) | (12 | ) | (132 | ) | (21 | ) | ||||||||
Interest expense and amortization of loan costs (1) | 9,380 | 8,965 | 29,839 | 26,924 | ||||||||||||
Depreciation and amortization (1) | 10,459 | 10,594 | 32,216 | 30,222 | ||||||||||||
Income tax expense (benefit) | (504 | ) | 62 | 1,022 | 371 | |||||||||||
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership | 1,960 | (1,532 | ) | 1,994 | 671 | |||||||||||
EBITDA available to the Company and OP unitholders | 38,103 | 11,237 | 83,851 | 57,845 | ||||||||||||
Amortization of favorable (unfavorable) contract assets (liabilities) | 43 | (2 | ) | 69 | (109 | ) | ||||||||||
Write-off of loan costs and exit fees | 2,595 | — | 2,595 | 54 | ||||||||||||
Transaction costs | 63 | 255 | 501 | 255 | ||||||||||||
Gain on sale of hotel property | (26,359 | ) | — | (26,359 | ) | — | ||||||||||
Unrealized loss on investments | 458 | 5,621 | 1,091 | 5,621 | ||||||||||||
Unrealized (gain) loss on derivatives (1) | 3,912 | 2,061 | (2,218 | ) | 2,097 | |||||||||||
Other (income) expense | 78 | 59 | 88 | (1,233 | ) | |||||||||||
Non-cash, non-employee stock/unit-based compensation | 1,234 | 935 | 3,541 | 2,101 | ||||||||||||
Legal and advisory costs | 1,830 | 600 | 14,056 | 912 | ||||||||||||
Company’s portion of unrealized loss of investment in securities investment fund | — | 3,399 | 2,587 | 4,219 | ||||||||||||
Adjusted EBITDA available to the Company and OP unitholders | $ | 21,957 | $ | 24,165 | $ | 79,802 | $ | 71,762 |
(1) | Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for non-controlling interest for each line item: |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest expense and amortization of loan costs | $ | (415 | ) | $ | (383 | ) | $ | (1,277 | ) | $ | (1,136 | ) | ||||
Depreciation and amortization | (716 | ) | (714 | ) | (2,126 | ) | (2,162 | ) | ||||||||
Unrealized loss on derivatives | — | — | — | (4 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income (loss) | $ | 21,322 | $ | (7,282 | ) | $ | 23,475 | $ | 1,417 | |||||||
Income from consolidated entities attributable to noncontrolling interests | (2,504 | ) | (1,090 | ) | (2,569 | ) | (1,068 | ) | ||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | (1,960 | ) | 1,532 | (1,994 | ) | (671 | ) | |||||||||
Preferred dividends | (994 | ) | (895 | ) | (2,866 | ) | (1,093 | ) | ||||||||
Net income (loss) attributable to the Company | 15,864 | (7,735 | ) | 16,046 | (1,415 | ) | ||||||||||
Depreciation and amortization on real estate (1) | 10,459 | 10,594 | 32,216 | 30,222 | ||||||||||||
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership | 1,960 | (1,532 | ) | 1,994 | 671 | |||||||||||
Gain on sale of hotel property | (26,359 | ) | — | (26,359 | ) | — | ||||||||||
FFO available to common stockholders and OP unitholders | 1,924 | 1,327 | 23,897 | 29,478 | ||||||||||||
Preferred dividends | 994 | 895 | 2,866 | 1,093 | ||||||||||||
Unrealized loss on investments | 458 | 5,621 | 1,091 | 5,621 | ||||||||||||
Unrealized (gain) loss on derivatives (1) | 3,912 | 2,061 | (2,218 | ) | 2,097 | |||||||||||
Other (income) expense | 78 | 59 | 88 | (1,233 | ) | |||||||||||
Transaction costs | 63 | 255 | 501 | 255 | ||||||||||||
Non-cash, non-employee stock/unit-based compensation | 1,234 | 935 | 3,541 | 2,101 | ||||||||||||
Legal and advisory costs | 1,830 | 600 | 14,056 | 912 | ||||||||||||
Write-off of loan costs and exit fees | 2,595 | — | 2,595 | 54 | ||||||||||||
Company’s portion of unrealized loss of investment in securities investment fund | — | 3,399 | 2,587 | 4,219 | ||||||||||||
Adjusted FFO available to the Company and OP unitholders | $ | 13,088 | $ | 15,152 | $ | 49,004 | $ | 44,597 |
(1) | Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for non-controlling interest for each line item: |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Depreciation and amortization on real estate | $ | (716 | ) | $ | (714 | ) | $ | (2,126 | ) | $ | (2,162 | ) | ||||
Unrealized loss on derivatives | — | — | — | (4 | ) |
Hotel Property | Location | Service Type | Total Rooms | % Owned | Owned Rooms | |||||||||
Fee Simple Properties | ||||||||||||||
Hilton | Washington, D.C. | Full | 550 | 75 | % | 413 | ||||||||
Marriott | Seattle, WA | Full | 358 | 100 | 358 | |||||||||
Marriott | Plano, TX | Full | 404 | 100 | 404 | |||||||||
Courtyard by Marriott | Philadelphia, PA | Select | 499 | 100 | 499 | |||||||||
Courtyard by Marriott | San Francisco, CA | Select | 405 | 100 | 405 | |||||||||
Sofitel | Chicago, IL | Full | 415 | 100 | 415 | |||||||||
Pier House Resort | Key West, FL | Full | 142 | 100 | 142 | |||||||||
Ritz Carlton | St. Thomas, USVI | Full | 180 | 100 | 180 | |||||||||
Ground Lease Properties | ||||||||||||||
Hilton (1) | La Jolla, CA | Full | 394 | 75 | % | 296 | ||||||||
Renaissance (2) | Tampa, FL | Full | 293 | 100 | 293 | |||||||||
Bardessono Hotel and Spa (3) | Yountville, CA | Full | 62 | 100 | 62 | |||||||||
Total | 3,702 | 3,467 |
(1) | The ground lease expires in 2043. |
(2) | The ground lease expires in 2080. |
(3) | The initial ground lease expires in 2055. The ground lease contains two 25-year extension options, at our election. |
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 (1) (2) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plan | Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan | ||||||||||
Common stock: | ||||||||||||||
July 1 to July 31 | 630,346 | $ | 14.39 | 629,627 | $ | 36,787,500 | ||||||||
August 1 to August 31 | 592 | 15.50 | — | 36,787,500 | ||||||||||
September 1 to September 30 | 412 | 15.10 | — | 36,787,500 | ||||||||||
Total | 631,350 | $ | 14.39 | 629,627 |
(1) | Includes shares that were repurchased from Ashford Trust when former Ashford Trust employees who held restricted shares of Ashford Prime common stock they received in the spin-off, forfeited the shares to Ashford Trust upon termination of employment. |
(2) | Includes restricted shares of our common stock, with no associated cost, that were forfeited upon termination of employment. |
ITEM 3. | DEFAULT UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit | Description | ||
3.1 | |||
3.2 | |||
3.3 | |||
3.4 | |||
3.5 | |||
3.6 | |||
3.7 | |||
3.8 | |||
10.1 | |||
10.2 | |||
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, 2016 are formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements Comprehensive Income; (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 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, as amended 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 9, 2016 | By: | /s/ MONTY J. BENNETT | |
Monty J. Bennett | ||||
Chief Executive Officer | ||||
Date: | November 9, 2016 | By: | /s/ DERIC S. EUBANKS | |
Deric S. Eubanks | ||||
Chief Financial Officer |
Nine Months Ended | Year Ended December 31, | ||||||||||||||||||||||
September 30, 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Earnings | |||||||||||||||||||||||
Income (loss) from continuing operations before provision for income taxes and noncontrolling interests | $ | 24,497 | $ | (4,428 | ) | $ | 4,635 | $ | (15,585 | ) | $ | 591 | $ | 2,273 | |||||||||
Amount recorded for equity in loss of unconsolidated entity | 2,587 | 2,927 | — | — | — | — | |||||||||||||||||
Add: | |||||||||||||||||||||||
Interest on indebtedness | 28,660 | 35,254 | 37,203 | 32,266 | 29,991 | 30,525 | |||||||||||||||||
Amortization of loan costs | 2,406 | 2,575 | 1,828 | 745 | 1,253 | 1,278 | |||||||||||||||||
Interest component of operating leases | 326 | 353 | 264 | 227 | 220 | 182 | |||||||||||||||||
$ | 58,476 | $ | 36,681 | $ | 43,930 | $ | 17,653 | $ | 32,055 | $ | 34,258 | ||||||||||||
Fixed charges | |||||||||||||||||||||||
Interest on indebtedness | $ | 28,660 | $ | 35,254 | $ | 37,203 | $ | 32,266 | $ | 29,991 | $ | 30,525 | |||||||||||
Amortization of loan costs | 2,406 | 2,575 | 1,828 | 745 | 1,253 | 1,278 | |||||||||||||||||
Interest component of operating leases | 326 | 353 | 264 | 227 | 220 | 182 | |||||||||||||||||
$ | 31,392 | $ | 38,182 | $ | 39,295 | $ | 33,238 | $ | 31,464 | $ | 31,985 | ||||||||||||
Preferred stock dividends | |||||||||||||||||||||||
Series A Preferred Stock | $ | — | $ | 1,867 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Series B Preferred Stock | 2,866 | 119 | — | — | — | — | |||||||||||||||||
$ | 2,866 | $ | 1,986 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Combined fixed charges and preferred stock dividends | $ | 34,258 | $ | 40,168 | $ | 39,295 | $ | 33,238 | $ | 31,464 | $ | 31,985 | |||||||||||
Ratio of earnings to fixed charges | 1.86 | 1.12 | 1.02 | 1.07 | |||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 1.71 | 1.12 | 1.02 | 1.07 | |||||||||||||||||||
Deficit (Fixed charges) | $ | 1,501 | $ | 15,585 | |||||||||||||||||||
Deficit (Combined fixed charges and preferred stock dividends) | $ | 3,487 | $ | 15,585 |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ashford Hospitality Prime, 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/ MONTY J. BENNETT | |
Monty J. Bennett | |
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ashford Hospitality Prime, 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/ MONTY J. BENNETT | |
Monty J. Bennett | |
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 | |
---|---|---|
Sep. 30, 2016 |
Nov. 07, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Ashford Hospitality Prime, Inc. | |
Entity Central Index Key | 0001574085 | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,969,239 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Allowance for doubtful notes receivable | $ 73 | $ 68 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 25,646,528 | 28,471,775 |
Common stock, shares outstanding (in shares) | 25,646,528 | 28,471,775 |
Series B Preferred Stock [Member] | ||
Series B preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series B preferred stock, shares issued (in shares) | 2,890,850 | 2,600,000 |
Series B preferred stock, shares outstanding (in shares) | 2,890,850 | 2,600,000 |
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 21,322 | $ (7,282) | $ 23,475 | $ 1,417 |
Other comprehensive income, net of tax: | ||||
Total other comprehensive income | 0 | 0 | 0 | 0 |
Total comprehensive income (loss) | 21,322 | (7,282) | 23,475 | 1,417 |
Comprehensive income attributable to noncontrolling interests in consolidated entities | (2,504) | (1,090) | (2,569) | (1,068) |
Comprehensive (income) loss attributable to noncontrolling interests in operating partnership | (1,960) | 1,532 | (1,994) | (671) |
Comprehensive income (loss) attributable to the Company | $ 16,858 | $ (6,840) | $ 18,912 | $ (322) |
Organization and Description of Business |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Ashford Hospitality Prime, Inc., together with its subsidiaries (“Ashford Prime”), is a Maryland corporation that invests primarily in high revenue per available room (“RevPAR”), luxury, upper-upscale and upscale hotels in gateway and resort locations. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Ashford Prime has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code. Ashford Prime conducts its business and owns substantially all of its assets through its operating partnership, Ashford Hospitality Prime Limited Partnership (“Ashford Prime OP”). In this report, the terms “the Company,” “we,” “us” or “our” refers to Ashford Hospitality Prime, Inc. and, as the context may require, all entities included in its financial statements. We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc., which was spun-off from, and remains an affiliate of, Ashford Hospitality Trust, Inc. (“Ashford Trust”). All of the hotels 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, 2016, Remington Lodging & Hospitality, LLC, together with its affiliates (“Remington Lodging”), which is beneficially wholly-owned by Mr. Monty J. Bennett, our Chairman and Chief Executive Officer, and Mr. Archie Bennett, Jr., chairman emeritus of Ashford Trust, managed two of our eleven hotel properties. Third-party management companies managed the remaining hotel properties. On September 17, 2015, Remington Lodging and Ashford Inc. entered into an agreement pursuant to which Ashford Inc. will acquire all of the general partner interest and 80% of the limited partner interests in Remington Lodging. On April 12, 2016, Ashford Inc.’s stockholders approved the acquisition. On June 22, 2016 and on September 22, 2016, Ashford Inc. amended the agreement extending the date with respect to which Ashford Inc. and Remington Lodging have the right to terminate the agreement if the acquisition is not consummated to April 7, 2017. The acquisition is subject to the satisfaction of various conditions, and if completed, will not impact our management agreements with Remington Lodging. The accompanying consolidated financial statements include the accounts of such wholly-owned and majority owned subsidiaries of Ashford Prime OP that as of September 30, 2016, own and operate eleven hotels in six states, the District of Columbia and the U.S. Virgin Islands. The portfolio includes nine wholly-owned hotel properties and two hotel properties that are owned through a partnership in which Ashford Prime OP has a controlling interest. These hotels represent 3,702 total rooms, or 3,467 net rooms, excluding those attributable to our partner. As a REIT, Ashford Prime needs to comply with limitations imposed by the Internal Revenue Code related to operating hotels. As of September 30, 2016, ten of our eleven hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively the TRS entities are referred to as “Prime TRS”). One hotel property is owned by a TRS entity. Prime TRS then engages third-party or affiliated hotel management companies to operate the hotels under management contracts. Hotel operating results related to the hotel properties are included in the consolidated statements of operations. As of September 30, 2016, eight hotel properties were leased by Ashford Prime’s wholly-owned TRS and two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership. Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues. Lease revenue from Prime TRS is eliminated in consolidation. The hotels are operated under management contracts with Marriott International, Inc. (“Marriott”), Hilton Worldwide (“Hilton”), Accor Business and Leisure Management, LLC (“Accor”) and Remington Lodging, which are eligible independent contractors under the Internal Revenue Code. |
Significant Accounting Policies |
9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation and Principles of Consolidation—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 Prime, Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. Ashford Prime OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Prime 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 Prime OP General Partner LLC, its general partner. As such, we consolidate Ashford Prime OP. The following items affect reporting comparability of our historical consolidated financial statements:
Use of Estimates—The preparation of these condensed 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. 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 the 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. During the three and nine months ended September 30, 2016 and 2015, we have not recorded any impairment charges. Investment in Unconsolidated Entity and Ashford Inc.—We held an investment in an unconsolidated entity, in which we had an ownership interest of 45.3% that was accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entity’s net income/loss. We liquidated our investment in June 2016. We reviewed the investment in unconsolidated entity 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 loss in unconsolidated entity. No such impairment was recorded in the three and nine months ended September 30, 2016. We also hold approximately 195,000 shares of Ashford Inc. common stock, which represented an approximate 9.7% ownership interest in Ashford Inc. and had a fair value of $9.3 million at September 30, 2016. This investment would typically be accounted for under the equity method of accounting, under Accounting Standard Codification (“ASC”) 323-10 - Investments - Equity Method and Joint Ventures since we exercise significant influence. However, we have elected to record our investment in Ashford Inc. using the fair value option under ASC 825-10 - Fair Value Option - Financial Assets and Financial Liabilities. Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIEs, 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 VIEs activities that most significantly impact the VIEs economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis, and therefore such entities should not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions. Revenue Recognition—Hotel revenues, including room, food, beverage, and ancillary revenues such as long-distance telephone service, laundry, parking and space rentals, are recognized when services have been rendered. Taxes collected from customers and submitted to taxing authorities are not recorded in revenue. Equity-Based Compensation—Stock/unit-based compensation for non-employees is accounted for at fair value based on the market price of the shares at period end in accordance with applicable authoritative accounting guidance that results in recording expense, included in “advisory services fee” and “management fees,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Performance stock units (“PSUs”) and performance-based Long-Term Incentive Plan (“LTIP”) units granted to certain executive officers are accounted for at fair value at period end based on a Monte Carlo simulation valuation model that results in recording expense, included in “advisory services fee,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Stock/unit grants to independent directors are recorded at fair value based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant. Recently Adopted Accounting Standards—In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis (“ASU 2015-02”). The ASU amends the consolidation guidance for VIEs and general partners’ investments in limited partnerships and modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities. The ASU is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. We have adopted this standard effective January 1, 2016, and the adoption of this standard did not have an impact on our financial position, results of operations or cash flows. Recently Issued Accounting Standards—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model, which requires a company to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The update will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to fiscal periods beginning after December 15, 2017. The FASB has also issued additional updates that further clarify the requirements of Topic 606 and provide implementation guidance. Early adoption is permitted for fiscal periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), to provide guidance on management's responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern. ASU 2014-15 also requires certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not expect the adoption of this standard will have an impact on our financial position, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We are evaluating the impact that ASU 2016-01 will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are evaluating the impact that ASU 2016-02 will have on our consolidated financial statements and related disclosures. 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. The Company is currently evaluating the impact that ASU 2016-13 will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a consensus of the Emerging Issues Task Force (“ASU 2016-15”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Certain issues addressed in this guidance include - Debt payments or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investments and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact that ASU 2016-15 will have on our consolidated financial statements and related disclosures. |
Investment in Hotel Properties, net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Hotel Properties, net | Investments in Hotel Properties, net Investments in hotel properties, net consisted of the following (in thousands):
Final Purchase Price Allocation Ritz-Carlton St. Thomas On December 15, 2015, we acquired a 100% interest in the Ritz-Carlton St. Thomas in St. Thomas, U.S. Virgin Islands for total consideration of $64.0 million. Subsequent to the close of the transaction, we completed the financing of a $42.0 million mortgage loan. See note 7. We prepared a purchase price allocation of the assets acquired and liabilities assumed. The final purchase price allocation was prepared with the assistance of a third-party appraisal firm during the three months ended March 31, 2016. The final purchase price allocation resulted in adjustments to land, buildings and improvements and furniture, fixtures and equipment, which resulted in a $25,000 increase in depreciation expense for the three months ended March 31, 2016. This valuation is considered a Level 3 valuation technique. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed in the acquisition (in thousands):
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Hotel Disposition |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hotel Disposition | Hotel Disposition On July 1, 2016, the Company sold the Courtyard Seattle Downtown for $84.5 million in cash. The sale resulted in a gain of $26.4 million for both the three and nine months ended September 30, 2016 and is included in “gain on sale of hotel property” in the condensed consolidated statements of operations. Since the sale of the hotel property does not represent a strategic shift that has (or will have) a major effect on our operations or financial results, its results of operations were not reported as discontinued operations in the condensed consolidated financial statements. We included the results of operations for these assets through the date of disposition in net income (loss) as shown in the consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015, respectively. The following table includes the condensed financial information from this hotel property (in thousands):
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Note Receivable |
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Receivables [Abstract] | |
Note Receivable | Note Receivable As of September 30, 2016 and December 31, 2015, we owned a note receivable of $8.1 million from the city of Philadelphia, Pennsylvania. The note bears interest at a rate of 12.85% and matures in 2018. The interest income recorded on the note receivable is offset against the interest expense recorded on the TIF loan of the same amount. See note 7. |
Investment in Unconsolidated Entity |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Entity | Investment in Unconsolidated Entity Ashford Inc. As of September 30, 2016 and December 31, 2015, we held approximately 195,000 shares of Ashford Inc. common stock. This represented an approximate 9.7% ownership interest in Ashford Inc. for both September 30, 2016 and December 31, 2015. See notes 10 and 11. As we exercise significant influence over Ashford Inc., this investment would typically be accounted for under the equity method of accounting, under ASC 323-10 - Investments - Equity Method and Joint Ventures. However, we have elected to record our investment in Ashford Inc. using the fair value option under ASC 825-10 - Fair Value Option - Financial Assets and Financial Liabilities. We have elected to use the fair value option to account for our investment in Ashford Inc. as the fair value is readily available since Ashford Inc. common stock is traded on a national exchange. The fair value of our investment in Ashford Inc. is included in “investment in Ashford Inc., at fair value” on our condensed consolidated balance sheets, and changes in market value are included in “unrealized loss on investment in Ashford Inc.” on our condensed consolidated statement of operations. The following tables summarize the condensed balance sheets as of September 30, 2016 and December 31, 2015, and the condensed statements of operations for the three and nine months ended September 30, 2016, of Ashford Inc. (in thousands): Ashford Inc. Condensed Consolidated Balance Sheets (unaudited)
Ashford Inc. Condensed Consolidated Statements of Operations (unaudited)
AQUA U.S. Fund In June 2015, for consideration of certain marketable securities, we obtained a 45.3% ownership interest in the AQUA U.S. Fund, previously named the REHE Fund. The AQUA U.S. Fund is managed by Ashford Investment Management, LLC (“AIM”), an indirect subsidiary of Ashford Inc. As of and for the three and nine months ended September 30, 2016, the AQUA U.S. Fund was consolidated by Ashford Inc. The AQUA U.S. Fund invests substantially all of its assets in the Ashford Quantitative Alternatives Master Fund, LP (the “Master Fund”), previously named the AIM Real Estate Hedged Equity Master Fund, LP, and as a consequence of our investment in the AQUA U.S. Fund, we obtained an indirect interest in the Master Fund. Our maximum exposure of loss is limited to our investment in the AQUA U.S. Fund. During the second quarter of 2016, we liquidated our investment in the AQUA U.S. Fund subject to a 5% hold back which is expected to be paid upon completion of the audit of the AQUA U.S. Fund’s financial statements, or sooner at the general partner’s discretion. As of September 30, 2016, we held a receivable from the AQUA U.S. Fund of $2.3 million, included in Due to Ashford Inc. on our condensed consolidated balance sheet. The following tables summarize the condensed balance sheet as of December 31, 2015 and the condensed statements of operations for the three and nine months ended September 30, 2016 and 2015 of the AQUA U.S. Fund (in thousands): Ashford Quantitative Alternative (U.S.) Fund, LP Condensed Balance Sheet (unaudited)
Ashford Quantitative Alternative (U.S.) Fund, LP Condensed Statements of Operations (unaudited)
The Master Fund generally invests in publicly traded equity securities and put and call options on publicly traded equity securities. The AQUA U.S. Fund records its investment in the Master Fund at its proportionate share of net assets. Income (loss) and distributions are allocated to the AQUA U.S. Fund’s partners based on their ownership percentage of the AQUA U.S. Fund. Our equity in loss in the AQUA U.S. Fund represented our share of the AQUA U.S. Fund’s loss for the six months ended June 30, 2016 and the three and nine months ended September 30, 2015. We were not obligated to pay any portion of the management fee or the performance allocation in favor of the AQUA U.S. Fund’s investment manager and general partner, respectively, but did share pro-rata in all other applicable expenses of the AQUA U.S. Fund. As of December 31, 2015, we owned an approximate 45.3% ownership interest in the AQUA U.S. Fund. |
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Indebtedness | Indebtedness Indebtedness consisted of the following (in thousands):
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We are required to maintain certain financial ratios under our secured revolving credit facility. If we violate covenants in any debt 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. Violations of certain debt covenants may result in our inability to borrow unused amounts under our line of credit, even if repayment of some or all of our borrowings is not required. 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 the consolidated group. As of September 30, 2016, we were in compliance in all material respects with all covenants or other requirements set forth in our debt agreements as amended. |
Income (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) Per Share | Income (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):
Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):
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Derivative Instruments |
9 Months Ended |
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Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments 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 include interest rate caps and interest rate floors, which are subject to master netting settlement arrangements. All derivatives are recorded at fair value. During the nine months ended September 30, 2016, concurrent with the extension of our $80.0 million mortgage loan, we extended our existing interest rate cap with a notional amount of $80.0 million, maturity date of March 2017 and a strike rate of 5.78% for a total cost of $5,000. This instrument was not designated as a cash flow hedge. During the nine months ended September 30, 2015, we entered into an interest rate cap with a notional amount and strike rate of $56.0 million and 4.50%, respectively, which had an effective date of March 2015, a maturity date of March 2017 and a total cost of $8,000. The instrument was not designated as a cash flow hedge. This instrument caps the interest rate on our mortgage loan with a principal balance of $70.0 million and a maturity date of March 2017. We also entered into two interest rate floors with an aggregate notional amount and strike rate of $3.0 billion and -0.25%, respectively, effective dates of July 2015 and maturity dates of July 2020, for a total cost of $3.5 million. As of September 30, 2016, we had interest rate caps with notional amounts totaling $368.0 million and strike rates ranging from 2.00% to 5.78%. These instruments had maturity dates ranging from December 2016 to January 2018. As of September 30, 2016, we had interest rate floors with notional amounts totaling $3.0 billion and strike rates of -0.25%. These instruments each has a maturity date of July 2020. Options on Futures Contracts—During the nine months ended September 30, 2016, we purchased an option on Eurodollar futures for a total cost of $124,000 and a maturity date of June 2017. During the nine months ended September 30, 2015, we purchased options on Eurodollar futures for total costs of $372,000 and maturity dates ranging from September 2016 to March 2017. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the market place as discussed below:
The fair value of interest rate caps is determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rates of the caps. The variable interest rates used in the calculation of projected receipts on the caps are based on an expectation of future interest rates derived from observable market interest rate curves (LIBOR forward curves) and volatilities (the Level 2 inputs). We also incorporate credit valuation adjustments (the Level 3 inputs) to appropriately reflect both our own non-performance risk and the respective counterparty’s non-performance risk. The fair value of interest rate floors is 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). The 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. 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 the 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 counter-parties, 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. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present 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 Condensed Consolidated Statements of Operations The following table summarizes the effect of fair value measured assets and liabilities on the condensed consolidated statements of operations (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 the estimated fair values of certain financial instruments such as notes receivable and indebtedness requires considerable judgment to interpret market data. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled. The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):
Cash, cash equivalents and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique. Accounts receivable, net, due from related party, net, accounts payable and accrued expenses, dividends and distributions payable, due to/from Ashford Trust OP, net, due to Ashford Inc. and due to/from third-party hotel managers. The carrying values of these financial instruments approximate their fair values due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique. Note receivable. Fair value of the note receivable was determined by using similar loans with similar collateral. Since there is very little to no trading activity, we relied on our internal analysis of what we believe a willing buyer would pay for this note at September 30, 2016 and December 31, 2015. We estimated the fair value of the note receivable to be approximately 8.3% to 19.7% higher than the carrying value of $8.1 million at September 30, 2016 and approximately 13.1% to 25.0% higher than the carrying value of $8.1 million at December 31, 2015. This is considered a Level 2 valuation technique. Investment in Ashford Inc. Fair value of the investment in Ashford Inc. is based on the quoted closing price on the balance sheet date. This is considered a Level 1 valuation technique. Derivative assets. Fair value of the interest rate derivatives is determined using the net present value of the expected cash flows of each derivative based on the market-based interest rate curve and adjusted for credit spreads of us and the counterparties. Fair value of interest rate floors is 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. The fair values of options on futures contracts are valued at their last reported settlement price as of the measurement date. See notes 2, 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. The 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 the credit spreads. Credit spreads take into consideration general market conditions, maturity and collateral. We estimated the fair value of the total indebtedness to be approximately 94.9% to 104.9% of the carrying value of $768.9 million at September 30, 2016 and approximately 95.3% to 105.4% of the carrying value of $840.2 million at December 31, 2015. This is considered a Level 2 valuation technique. |
Redeemable Noncontrolling Interests in Operating Partnership |
9 Months Ended |
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Sep. 30, 2016 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Abstract] | |
Redeemable Noncontrolling Interests in Operating Partnership | Redeemable Noncontrolling Interests in Operating Partnership Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Ashford Prime OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (“common units”) and units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested. Beginning one year after issuance, each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, one share of our common stock. LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, have vesting periods of three 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 our 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 our operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership. On June 8, 2015, the compensation committee of the board of directors of the Company approved performance-based LTIP units to certain executive officers. The award agreements provide for the grant of a target number of approximately 195,000 performance-based LTIP units that will be settled in common units of the Ashford Prime OP, if and when the applicable vesting criteria have been achieved following the end of the performance and service period, which began on January 1, 2015 and ends on December 31, 2017. The target number of performance-based LTIP units may be adjusted from 0% to 200% based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s Compensation Committee on the grant date. A total of 389,000 performance-based LTIP units representing 200% of the target were issued. The performance criteria for the performance-based LTIP units are based on market conditions under the relevant literature, and the performance-based LTIP units were granted to non-employees. The unamortized fair value of performance-based LTIP units of $1.9 million at September 30, 2016 will be expensed over a period of 1.25 years. Compensation expense of $363,000 and $1.1 million was recorded for the three and nine months ended September 30, 2016, and is included in “advisory services fee” on our condensed consolidated statements of operations. No compensation expense was recorded for the three and nine months ended September 30, 2015. As of September 30, 2016, we have issued a total of 760,000 LTIP units (including performance-based LTIP units), all of which, other than approximately 3,000 units issued in March 2015, 6,000 units issued in May 2015 and 389,000 issued in June 2015, respectively, had reached full economic parity with, and are convertible into, common units. For the three and nine months ended September 30, 2016, expense of $375,000 and $1.1 million was recorded related to LTIP units issued to Ashford LLC’s employees, respectively. For the three and nine months ended September 30, 2015, expense of $244,000 and $872,000, respectively, was associated with LTIP units issued to Ashford LLC’s employees. These amounts are included in “advisory services fee.” Expense of $0 and $44,000 was recorded for the three and nine months ended September 30, 2016, respectively, and expense of $102,000 was recorded for the nine months ended September 30, 2015, which was related to LTIP units issued to our independent directors. These amounts are included in “corporate general and administrative” expense in our condensed consolidated statements of operations. The fair value of the unrecognized cost of LTIP units, which was $799,000 at September 30, 2016, will be amortized over a period of 2.5 years. During the three and nine months ended September 30, 2016, no common units were redeemed by the holders. During the nine months ended September 30, 2015, approximately 345,000 common units with an aggregate fair value of $5.9 million at redemption were redeemed by the holders and, at our election, we issued cash per unit to satisfy the redemption price. Excluding the Ashford Trust redemption of our OP common units, during the three and nine months ended September 30, 2015, approximately 70,000 and 100,000 common units with an aggregate fair value of $1.1 million and $1.6 million at redemption, respectively, were redeemed by the holders and, at our election, we issued shares of our common stock to satisfy the redemption price. Redeemable noncontrolling interests in Ashford Prime OP as of September 30, 2016 and December 31, 2015, were $63.1 million and $61.8 million, respectively, which represented ownership of our operating partnership of 11.00% and 12.75%, respectively. The carrying value of redeemable noncontrolling interests as of September 30, 2016 and December 31, 2015, included adjustments of $10.4 million and $12.5 million, respectively, to reflect the excess of redemption value over the accumulated historical costs. For the three and nine months ended September 30, 2016, we allocated net income of $2.0 million and $2.0 million to the redeemable noncontrolling interests, respectively. For the three and nine months ended September 30, 2015, we allocated net loss of $1.5 million and net income of $671,000 to the redeemable noncontrolling interests, respectively. For the three and nine months ended September 30, 2016, we declared aggregate cash distributions to holders of common units and holders of LTIP units of $572,000 and $1.7 million, respectively. For the three and nine months ended September 30, 2015, we declared aggregate cash distributions to holders of common units and holders of LTIP units of $438,000 and $1.7 million, respectively. These distributions are recorded as a reduction of redeemable noncontrolling interests in operating partnership. See note 13 for discussion of Series C Preferred Stock. Ashford Trust Distribution of Ashford Prime Common Stock and Ashford Prime OP Common Units—On July 13, 2015, Ashford Trust announced that its board of directors had declared the distribution (1) to its stockholders of approximately 4.1 million shares of common stock of Ashford Prime to be received by Ashford Trust upon redemption of Ashford Prime OP common units and (2) to the common unit holders of Ashford Hospitality Trust Limited Partnership of its remaining common units of Ashford Prime OP. The distribution occurred on July 27, 2015, to stockholders and common unit holders of record as of the close of business of the New York Stock Exchange on July 20, 2015. The distribution had an aggregate fair value of approximately $61.7 million at redemption. As a result of the distribution, Ashford Trust has no ownership interest in Ashford Prime. |
Equity and Stock-Based Compensation |
9 Months Ended |
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Sep. 30, 2016 | |
Equity [Abstract] | |
Equity and Stock-Based Compensation | Equity and Stock-Based Compensation Dividends—Common stock dividends declared for the three and nine months ended September 30, 2016, were $3.1 million and $9.1 million, respectively. Common stock dividends declared for the three and nine months ended September 30, 2015, were $2.9 million and $6.5 million, respectively. Performance Stock Units—On June 8, 2015, the compensation committee of the board of directors of the Company approved grants of PSUs to certain executive officers. The award agreements provide for the grant of a target number of approximately 155,000 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, which began on January 1, 2015 and ends on December 31, 2017. The target number of PSUs may be adjusted from 0% to 200% based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s Compensation Committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature, and the PSUs were granted to non-employees. At September 30, 2016, the outstanding PSUs had an unamortized fair value of $1.6 million which is expected to be recognized over a period of 1.25 years. Compensation expense of $291,000 and $703,000 was recorded for the three and nine months ended September 30, 2016, respectively, and is included in “advisory services fee” on our condensed consolidated statements of operations. For the three and nine months ended September 30, 2015, expense of $613,000 and $750,000 was associated with PSUs issued to certain executive officers and included in “advisory services fee.” Restricted Stock Units—For the three and nine months ended September 30, 2016, expense of $129,000 and $374,000, respectively, was associated with restricted shares of our common stock issued to Ashford LLC’s employees and included in “advisory services fee” on our condensed consolidated statements of operations. For the three and nine months ended September 30, 2015, this expense was $78,000 and $224,000, respectively. For the three and nine months ended September 30, 2016, expense of $26,000 and $50,000, respectively, was associated with restricted shares granted to certain employees of Remington Lodging, and was recorded as a component of “management fees” in our consolidated statements of operations. For the three and nine months ended September 30, 2016, expense of $50,000 and $227,000, respectively, was associated with shares of our common stock issued to our independent directors and included in “corporate general and administrative” expense on our condensed consolidated statements of operations. For the three and nine months ended September 30, 2015, this expense was $0 and $153,000, respectively. At September 30, 2016, the unrecognized cost of the unvested shares of restricted stock issued to Ashford LLC’s and Remington Lodging employees was $923,000 which will be expensed over a period of 2.75 years. Stock Repurchases—On October 27, 2014, our board of directors approved a share repurchase program under which the Company may purchase up to $100 million of the Company’s common stock from time to time. The repurchase program does not have an expiration date. The specific timing, manner, price, amount and other terms of the repurchases are at management’s discretion and depend on market conditions, corporate and regulatory requirements and other factors. The Company is not required to repurchase shares under the repurchase program, and may modify, suspend or terminate the repurchase program at any time for any reason. On April 8, 2016, our board of directors authorized utilizing up to $50 million to repurchase common stock. During the three months ended September 30, 2016, we repurchased 630,000 shares of our common stock for approximately $9.0 million. During the nine months ended September 30, 2016, we repurchased 2.9 million shares of our common stock for approximately $39.0 million. During the nine months ended September 30, 2015, we repurchased 471,000 shares for approximately $8.1 million. No shares were repurchased during the three months ended September 30, 2015. As of September 30, 2016, we have purchased a cumulative 4.3 million shares of our common stock, for approximately $63.2 million, since the program’s inception on November 4, 2014. Series C Preferred Stock—On February 1, 2016, Prime GP, as general partner of Ashford Prime OP, entered into the Amended Partnership Agreement. The Amended Partnership Agreement broadens in various ways the rights of the general partner. As consideration for the limited partners of Ashford Prime OP to approve the Amended Partnership Agreement, we agreed to create and provide qualified limited partners the opportunity to purchase shares of Series C Preferred Stock of the Company. On April 7, 2016, in response to feedback from the investor community, the Company determined to refrain from issuing the Series C Preferred Stock unless and until the issuance of the Series C Preferred Stock, in a form and manner that complies with all applicable state and federal laws and stock exchange rules, shall have been approved by the Company’s stockholders. Accordingly, Ashford Prime OP General Partner LLC, Ashford Prime OP’s general partner, has agreed to reverse the amendments in the Amended Partnership Agreement unless and until the Series C Approval has been sought and obtained. Noncontrolling Interest in Consolidated Entities—A partner had a noncontrolling ownership interest of 25% in two hotel properties with a total carrying value of $(5.9) million and $(5.8) million at September 30, 2016 and December 31, 2015, respectively. Our ownership interest is reported in equity in the consolidated balance sheets. Noncontrolling interests in consolidated entities were allocated income of $2.5 million and $2.6 million for the three and nine months ended September 30, 2016, respectively, and allocated income of $1.1 million for both the three and nine months ended September 30, 2015, respectively. |
5.5% Series B Cumulative Convertible Preferred Stock |
9 Months Ended |
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Sep. 30, 2016 | |
Temporary Equity Disclosure [Abstract] | |
5.5% Series B Cumulative Convertible Preferred Stock | 5.5% Series B Cumulative Convertible Preferred Stock On June 9, 2015, we entered into a purchase agreement for the sale of 2.6 million shares of our 5.5% Series A Cumulative Convertible Preferred Stock (“Series A Preferred Stock”) to a financial institution, which resold the Series A Preferred Stock to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) at an initial offering price of $25.00 per share, with an aggregate underwriting discount of $1.5 million (net purchase price of $24.4125 per share). The net proceeds from the offering of the Series A Preferred Stock after the underwriting discount and other expenses were $62.2 million. On December 4, 2015, we entered into an agreement to exchange the 5.50% Series A Preferred Stock, par value $0.01 per share for an equal number of shares of our 5.50% Series B Cumulative Convertible Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”). The terms and conditions of the Series B Preferred Stock are substantially similar to the Series A Preferred Stock for which it is being exchanged, except that, in contemplation of a public offering of the Series B Preferred Stock, either pursuant to the terms of the Series B Registration Rights Agreement or the Preemptive Rights Agreement, the Series B Preferred Stock contains certain customary anti-dilution provisions. Also in connection with the Exchange, the Company, together with Ashford Prime OP and Ashford LLC, entered into a registration rights agreement for the benefit of certain holders of the Series B Preferred Stock. Each share of Series B Preferred Stock is convertible at any time, at the option of the holder, into a number of whole shares of common stock at an initial conversion price of $18.90 (which represents an initial conversion rate of 1.3228 shares of our common stock, subject to certain adjustments). The Series B Preferred Stock is also subject to conversion upon certain events constituting a change of control. Holders of the Series B Preferred Stock have no voting rights, subject to certain exceptions. Commencing June 11, 2016, the Company may, at its option, cause the Series B Preferred Stock to be converted in whole or in part, on a pro-rata basis, into fully paid and nonassessable shares of the Company’s common stock at the conversion price, provided that the “Closing Bid Price” (as defined in the Articles Supplementary) of the Company’s common stock shall have equaled or exceeded 110% of the conversion price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion. In the event of such mandatory conversion, the Company shall pay holders of the Series B Preferred Stock any additional dividend payment to make the holder whole on dividends expected to be received through June 11, 2019, in an amount equal to the net present value, where the discount rate is the dividend rate on the Series B Preferred Stock, of the difference between (i) the annual dividend payments the holders of Series B Preferred Stock would have received in cash from the date of the mandatory conversion to June 11, 2019, and (ii) the common stock quarterly dividend payments the holders of Series B Preferred Stock would have received over the same time period had such holders held common stock. On April 26, 2016, in connection with a previously announced required public offering, we issued 290,850 shares of our Series B Preferred Stock at $17.24 per share for gross proceeds of $5.0 million. The Series B Preferred Stock offering includes accrued and unpaid dividends since April 15, 2016. Dividends on the Series B Preferred Stock will accrue at a rate of 5.50% on the liquidation preference of $25.00 per share. The offering closed on April 29, 2016. The net proceeds, after deducting underwriting discounts, advisory fees, commissions and other estimated offering expenses payable by the company, were approximately $4.2 million. At September 30, 2016, we had 2.9 million outstanding shares of Series B Preferred Stock. Due to certain redemption features that are not under our control, the Series B Preferred Stock is classified outside of permanent equity. The Series B Preferred Stock dividend for all issued and outstanding shares is set at $1.375 per annum per share. For the three and nine months ended September 30, 2016, we declared dividends of $994,000 and $2.9 million, respectively, with respect to shares of Series B Preferred Stock. For the three and nine months ended September 30, 2015, we declared dividends of $895,000 and $1.1 million with respect to shares of Series A Preferred Stock. |
Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2016 | |
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, 2016, 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 5% of gross revenues for capital improvements. Management Fees—Under management agreements for our hotel properties existing at September 30, 2016, we pay a) monthly property management fees equal to the greater of $10,000 (CPI adjusted since 2003) or 3% of gross revenues, or in some cases 3% to 7% of gross revenues, as well as annual incentive management fees, if applicable, b) market service fees on approved capital improvements, including project management fees of up to 4% of project costs, for certain hotels, and c) other general fees at current market rates as approved by our independent directors, if required. These management agreements expire from May 2023 through December 2065, 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, liquidated damages or, in certain circumstances, we may substitute a new management agreement. Litigation—On February 3, 2016, Sessa Capital (Master), L.P. (“Sessa”) filed an action (the “Maryland Action”) in the Circuit Court for Baltimore City, Maryland, captioned Sessa Capital (Master) L.P. v. Bennett, et al., Case No. 24-C-16-000557 (Baltimore City Cir. Ct. 2016), against Ashford Prime, the members of the Ashford Prime board of directors, Ashford LLC and Ashford Inc. The Maryland Action generally alleged that the directors of Ashford Prime breached their fiduciary duties in connection with the June 2015 amendments to the Company’s advisory agreement with Ashford LLC. The Maryland Action also alleged that Ashford Inc. aided and abetted those breaches of fiduciary duties. On February 29, 2016, the Company filed a motion to dismiss the Maryland Action. On March 14, 2016, Sessa voluntarily dismissed the Maryland Action. On February 25, 2016, Ashford Prime filed a lawsuit (the “Texas Federal Action”) in the United States District Court for the Northern District of Texas, captioned Ashford Hospitality Prime, Inc. v. Sessa Capital (Master), L.P., et al., No. 16-cv-00527 (N.D. Texas 2016) (DCG), against Sessa, related entities, and Sessa’s proposed director nominees John E. Petry, Philip B. Livingston, Lawrence A. Cunningham, Daniel B. Silvers and Chris D. Wheeler. The Texas Federal Action generally alleges that the defendants violated federal securities laws because Sessa’s proxy materials contain numerous false claims, material misrepresentations and omissions relating to, among other things, the proposed nominees, the financial risks associated with Sessa’s efforts to gain control of the board and Sessa’s plans and strategy for the Company and its assets. Among other remedies, the Texas Federal Action seeks to enjoin Sessa from proceeding with its proxy contest. The outcome of this action is pending. On March 8, 2016, Ashford Prime filed a lawsuit (the “Texas State Action”) in the District Court of Dallas County, Texas, captioned Ashford Hospital Prime, Inc. v. Sessa Capital (Master) L.P., et al., Cause No. DC-16-02738, against Sessa, related entities, and Sessa’s proposed director nominees John E. Petry, Philip B. Livingston, Lawrence A. Cunningham, Daniel B. Silvers and Chris D. Wheeler. The Texas State Action generally alleges that Sessa’s purported notice of proposed nominees for election to the Ashford Prime board of directors is invalid due to numerous failures by the defendants to comply with material provisions in the Company’s bylaws. Among other things, the Texas State Action seeks a declaratory judgment confirming the inability of Sessa’s proposed director nominees to stand for election at the 2016 annual meeting of stockholders. On March 14, 2016, Sessa removed the Texas State Action from state court to the U.S. District Court for the Northern District of Texas with Cause No. 16-cv-00713. The outcome of this action is pending. On March 14, 2016, Sessa filed counterclaims and a motion for a preliminary injunction in the Texas Federal Action. These counterclaims include substantially the same claims as previously asserted by Sessa in the Maryland Action, and also allege that the directors of Ashford Prime breached their fiduciary duties in connection with the approval of the Series C Preferred Stock for issuance and the February 2016 amendments to the Amended Partnership Agreement (as defined below). Among other things, Sessa seeks an injunction prohibiting the issuance of shares of Series C Preferred Stock and requiring the board to approve the Sessa candidates, or in the alternative, prohibiting the solicitation of proxies until the board approves the Sessa candidates. On April 2, 2016, Sessa amended its counterclaims alleging that the Company had violated federal proxy solicitation laws by, among other things, stating that Sessa had not complied with the Company’s bylaws and that its purported director nominations are invalid. On April 6, 2016, the Court granted expedited discovery in connection with Sessa’s motion for preliminary injunction and the Company’s anticipated motion for preliminary injunction in the Texas State Action. On April 8, 2016, the Company notified the court that Sessa’s claims relating to the Series C Preferred Stock were moot after the Company unwound the OP Unit enfranchisement preferred equity transaction for the Company’s OP unitholders. On April 13, 2016, the Company filed its motion for preliminary injunction seeking an order declaring that Sessa’s slate of nominees is invalid and enjoining Sessa from submitting the nominees to stockholders for election to the board. On May 20, 2016, the court denied Sessa’s motion for a preliminary injunction and granted the Company’s motion for a preliminary injunction. Sessa appealed the district court’s decision to the United States Court of Appeals for the Fifth Circuit on May 23, 2016. Sessa’s appeal is fully briefed and the court heard oral argument on August 2, 2016. Sessa currently has no claims for monetary damages, but it seeks reimbursement of its attorneys’ fees and costs. We are engaged in other various legal proceedings which have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings, based on definitions within the 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 upon the 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 |
9 Months Ended |
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Sep. 30, 2016 | |
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, 2016 and December 31, 2015, all of our hotel properties were in the U.S. and its territories. |
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 quarterly base fee that is a percentage of our total market capitalization on a declining sliding scale plus the Key Money Asset Management Fee (defined in our advisory agreement as the aggregate gross asset value of all key money assets multiplied by 0.70%), subject to a minimum quarterly base fee, as payment for managing our day-to-day operations in accordance with our investment guidelines. We are also required to pay Ashford LLC an incentive fee that is based on our total return performance as compared to our peer group as well as to reimburse Ashford LLC for certain reimbursable overhead and internal audit, insurance claims advisory and asset management services, as specified in the advisory agreement. We also record equity-based compensation expense for equity grants of common stock and LTIP units awarded to our officers and employees of Ashford LLC in connection with providing advisory services equal to the fair value of the award in proportion to the requisite service period satisfied during the period. The following table summarizes the advisory services fees incurred (in thousands):
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At September 30, 2016, the balance in due from Ashford Trust OP, net, was $7,000. At December 31, 2015, the balance in due to Ashford Trust OP, net, was $528,000. These are both associated with reimbursable expenses between Ashford Prime and Ashford Trust OP. At September 30, 2016, the balance in due to Ashford Inc., which is associated with advisory services fee payable and the receivable associated with the $2.3 million hold back from the AQUA U.S. Fund, was $3.7 million. At December 31, 2015, the balance in due to Ashford Inc., associated with the advisory services fee was $6.4 million. Certain employees of Remington Lodging, who perform work on behalf of Ashford Prime, were granted approximately 21,000 and 1,000 shares of restricted stock under the Ashford Prime Stock Plan on April 1, 2016 and July 1, 2016, respectively. These share grants were accounted for under the applicable accounting guidance related to share-based payments granted to non-employees and are recorded as a component of “management fees” in our consolidated statements of operations. Expense of $26,000 and $50,000 was recognized for the three and nine months ended September 30, 2016, respectively. The unamortized fair value of these grants was $251,000 as of September 30, 2016, which will be amortized over a period of 2.5 years. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 13, 2016, the Company adopted and approved an amendment and restatement to each of the Company’s Performance Stock Unit Award Agreement (the “Original PSU Agreement” and, as amended and restated, the “Amended PSU Agreement”) and the Company’s Performance LTIP Unit Award Agreement (the “Original LTIP Agreement” and, as amended and restated, the “Amended LTIP Agreement”). The Amended PSU Agreement replaces the Original PSU Agreement under which PSUs were granted to certain officers on June 8, 2015. The Amended PSU Agreement and the Amended LTIP Agreement modified certain provisions of the Original PSU Agreement and the Original LTIP Agreement, respectively, and do not represent a grant of new awards. Pursuant to the Amended PSU Agreement and the Amended LTIP Agreement, the PSUs will be settled in shares of common stock of the Company and the performance LTIP units will be settled in LTIP units of Ashford Prime OP, if and when the applicable vesting criteria have been achieved following the end of the performance period, which began on January 1, 2015 and ends on December 31, 2017, unless shortened pursuant to the Amended PSU Agreement or the Amended LTIP Agreement, as applicable. In addition, the Amended PSU Agreement and the Amended LTIP Agreement, among other things, modified the definition of “Termination of Service,” and modified the vesting method in the event of a change of control of the Company or the participant’s involuntary termination, death or disability. Furthermore, the Company amended the Original PSU Agreement to clarify that the grant of PSUs will be made in connection with the participant’s service to the Company only and not to Ashford Inc. and/or their respective affiliates. Also on October 13, 2016, the board of directors of the Company approved the recommendations of the Compensation Committee of the board with respect to the grant of PSUs and LTIP units to certain executive officers pursuant to the Company’s 2013 Equity Incentive Plan. The grant of the PSUs and the LTIP units are evidenced by the Amended PSU Agreement or the Amended LTIP Agreement entered into by the Company and each executive officer, as applicable. On November 2, 2016, the Company announced that its board of directors appointed Richard J. Stockton as the Chief Executive Officer of the Company, effective November 14, 2016. Monty J. Bennett, the Company’s previous Chief Executive Officer, remains Chairman of the Company’s board of directors. In connection with the appointment of Mr. Stockton, on November 2, 2016, the Company and Mr. Stockton entered into a Restricted Stock Award Agreement (the “Award Agreement”), pursuant to which Mr. Stockton received 239,234 shares of the Restricted Stock (as defined in the Award Agreement), which will vest in five (5) substantially equal installments on the first five (5) anniversaries of the date of the grant, subject to certain forfeiture and acceleration requirements as set forth in the Award Agreement and the Employment Agreement between Mr. Stockton and the Company’s external advisor, Ashford Inc. Also on November 2, 2016, Mr. Stockton entered into the Company’s form indemnification agreement for directors and executive officers, which provides for indemnification by the Company to the maximum extent permitted by Maryland law and is in addition to protections provided in the Company’s charter and bylaws. Under the form indemnification agreement, directors and executive officers will be indemnified for certain liabilities and will be advanced certain expenses that have been incurred as a result of actions brought, or threatened to be brought, against such directors and executive officers in connection with their duties. |
Significant Accounting Policies (Policies) |
9 Months Ended | ||||||||||||
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Sep. 30, 2016 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation—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 Prime, Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. Ashford Prime OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Prime 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 Prime OP General Partner LLC, its general partner. As such, we consolidate Ashford Prime OP. The following items affect reporting comparability of our historical consolidated financial statements:
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Use of Estimates | Use of Estimates—The preparation of these condensed 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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Impairment of Investments in Hotel Properties | 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 the 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. During the three and nine months ended September 30, 2016 and 2015, we have not recorded any impairment charges. |
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Investment in Unconsolidated Entity and Ashford Inc. | Investment in Unconsolidated Entity and Ashford Inc.—We held an investment in an unconsolidated entity, in which we had an ownership interest of 45.3% that was accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entity’s net income/loss. We liquidated our investment in June 2016. We reviewed the investment in unconsolidated entity 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 loss in unconsolidated entity. No such impairment was recorded in the three and nine months ended September 30, 2016. We also hold approximately 195,000 shares of Ashford Inc. common stock, which represented an approximate 9.7% ownership interest in Ashford Inc. and had a fair value of $9.3 million at September 30, 2016. This investment would typically be accounted for under the equity method of accounting, under Accounting Standard Codification (“ASC”) 323-10 - Investments - Equity Method and Joint Ventures since we exercise significant influence. However, we have elected to record our investment in Ashford Inc. using the fair value option under ASC 825-10 - Fair Value Option - Financial Assets and Financial Liabilities. Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIEs, 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 VIEs activities that most significantly impact the VIEs economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis, and therefore such entities should not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions. |
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Revenue Recognition | Revenue Recognition—Hotel revenues, including room, food, beverage, and ancillary revenues such as long-distance telephone service, laundry, parking and space rentals, are recognized when services have been rendered. Taxes collected from customers and submitted to taxing authorities are not recorded in revenue. |
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Equity-Based Compensation | Equity-Based Compensation—Stock/unit-based compensation for non-employees is accounted for at fair value based on the market price of the shares at period end in accordance with applicable authoritative accounting guidance that results in recording expense, included in “advisory services fee” and “management fees,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Performance stock units (“PSUs”) and performance-based Long-Term Incentive Plan (“LTIP”) units granted to certain executive officers are accounted for at fair value at period end based on a Monte Carlo simulation valuation model that results in recording expense, included in “advisory services fee,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Stock/unit grants to independent directors are recorded at fair value based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant. |
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Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards—In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2015-02, Amendments to the Consolidation Analysis (“ASU 2015-02”). The ASU amends the consolidation guidance for VIEs and general partners’ investments in limited partnerships and modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities. The ASU is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. We have adopted this standard effective January 1, 2016, and the adoption of this standard did not have an impact on our financial position, results of operations or cash flows. Recently Issued Accounting Standards—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model, which requires a company to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The update will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to fiscal periods beginning after December 15, 2017. The FASB has also issued additional updates that further clarify the requirements of Topic 606 and provide implementation guidance. Early adoption is permitted for fiscal periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), to provide guidance on management's responsibility to perform interim and annual assessments of an entity’s ability to continue as a going concern. ASU 2014-15 also requires certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not expect the adoption of this standard will have an impact on our financial position, results of operations or cash flows. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We are evaluating the impact that ASU 2016-01 will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are evaluating the impact that ASU 2016-02 will have on our consolidated financial statements and related disclosures. 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. The Company is currently evaluating the impact that ASU 2016-13 will have on the consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a consensus of the Emerging Issues Task Force (“ASU 2016-15”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Certain issues addressed in this guidance include - Debt payments or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investments and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact that ASU 2016-15 will have on our consolidated financial statements and related disclosures. |
Investment in Hotel Properties, net (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investment in Hotel Properties | Investments in hotel properties, net consisted of the following (in thousands):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed in the acquisition (in thousands):
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Hotel Disposition (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed financial information from hotel property | The following table includes the condensed financial information from this hotel property (in thousands):
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Investment in Unconsolidated Entity (Tables) |
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AQUA U.S. Fund [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheet | The following tables summarize the condensed balance sheet as of December 31, 2015 and the condensed statements of operations for the three and nine months ended September 30, 2016 and 2015 of the AQUA U.S. Fund (in thousands): Ashford Quantitative Alternative (U.S.) Fund, LP Condensed Balance Sheet (unaudited)
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Condensed Income Statement | Ashford Quantitative Alternative (U.S.) Fund, LP Condensed Statements of Operations (unaudited)
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Ashford Inc. [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheet | Ashford Inc. Condensed Consolidated Balance Sheets (unaudited)
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Condensed Income Statement | Ashford Inc. Condensed Consolidated Statements of Operations (unaudited)
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Indebtedness (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness | Indebtedness consisted of the following (in thousands):
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Income (Loss) Per Share (Tables) |
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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 their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present 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 table summarizes the effect of fair value measured assets and liabilities on the condensed consolidated statements of operations (in thousands):
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Summary of Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments | The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):
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Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table summarizes the advisory services fees incurred (in thousands):
________
|
Significant Accounting Policies (Details) - USD ($) shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
|
Significant Accounting Policies [Line Items] | ||||
Cost method investments | $ 9,286,000 | $ 9,286,000 | $ 10,377,000 | |
AIM REHE Fund [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Equity method investment, ownership percentage | 45.30% | |||
Equity method investment, other than temporary impairment | $ 0 | $ 0 | ||
Ashford Inc. [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Investment owned (in shares) | 195 | 195 | ||
Ownership percentage of cost method investment | 9.70% | 9.70% | 9.70% | |
Cost method investments | $ 10,377,000 |
Investment in Hotel Properties, net (Investments in Hotel Properties, Net) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 210,696 | $ 227,620 |
Buildings and improvements | 969,222 | 1,017,086 |
Furniture, fixtures and equipment | 66,584 | 68,529 |
Construction in progress | 6,369 | 2,386 |
Total cost | 1,252,871 | 1,315,621 |
Accumulated depreciation | (233,982) | (224,142) |
Investments in hotel properties, net | $ 1,018,889 | $ 1,091,479 |
Investment in Hotel Properties, net (Ritz-Carlton St. Thomas Acquisition) (Details) - St. Thomas, USVI Ritz-Carlton [Member] - USD ($) |
3 Months Ended | ||
---|---|---|---|
Dec. 15, 2015 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | |||
Ownership interest acquired | 100.00% | ||
Face amount of debt | $ 42,000,000.0 | ||
Consideration transferred | $ 64,000,000 | ||
Depreciation adjustment | $ 25,000 | ||
Preliminary estimated fair value of acquisition | |||
Land | 25,533,000 | $ 25,264,000 | |
Buildings and improvements | 31,753,000 | 34,853,000 | |
Furniture, fixtures, and equipment | 6,714,000 | 3,883,000 | |
Assets acquired, liabilities assumed, net | 64,000,000 | $ 64,000,000 | |
Land adjustment | 269,000 | ||
Buildings and improvements adjustment | (3,100,000) | ||
Furniture, fixtures, and equipment adjustment | 2,831,000 | ||
Consideration adjustment | $ 0 |
Note Receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Note receivable | $ 8,098 | $ 8,098 |
Philadelphia Note [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Note receivable | $ 8,100 | $ 8,100 |
Interest rate | 12.85% | 12.85% |
Summary of Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Maximum maturity term of financial assets | 90 days | |
Note receivable | $ 8,098 | $ 8,098 |
Indebtedness, Carrying value | $ 768,949 | $ 840,232 |
Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes receivable fair value variance from carrying value (as a percent) | 8.30% | 13.10% |
Total indebtedness fair value variance from carrying value (as a percent) | 94.90% | 95.30% |
Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes receivable fair value variance from carrying value (as a percent) | 19.70% | 25.00% |
Total indebtedness fair value variance from carrying value (as a percent) | 104.90% | 105.40% |
Segment Reporting (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Subsequent Events (Details) - Subsequent Event [Member] - Richard J. Stockton [Member] - Restricted Stock [Member] |
Nov. 02, 2016
installment
shares
|
---|---|
Subsequent Event [Line Items] | |
Shares grated (in shares) | shares | 239,234 |
Number of vesting installments | installment | 5 |
Award vesting period | 5 years |
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