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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20172019
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-31775
ASHFORD HOSPITALITY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland 86-1062192
(State or other jurisdiction of incorporation or organization) (IRS employer identification number)
14185 Dallas Parkway
Suite 1100
Dallas
Texas 75254
(Address of principal executive offices) (Zip code)
(972) (972) 490-9600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s) Name of each exchange on which registered
Common Stock AHTNew York Stock Exchange
Preferred Stock, Series DAHT-PD New York Stock Exchange
Preferred Stock, Series F AHT-PFNew York Stock Exchange
Preferred Stock, Series GAHT-PG New York Stock Exchange
Preferred Stock, Series H AHT-PHNew York Stock Exchange
Preferred Stock, Series IAHT-PI New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. þ¨  Yes    ¨þNo
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨  Yes     þNo
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    þYes¨  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)    þYes¨  No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerþ
Non-accelerated filero(Do not check if a smaller reporting company)Smaller reporting companyo
  Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) ifof the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    þ  No
As of June 30, 2017,2019, the aggregate market value of 91,538,83596,253,361 shares of the registrant’s common stock held by non-affiliates was approximately $556,556,000.$285,872,000.
As of March 12, 2018,10, 2020, the registrant had 97,379,879101,998,806 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement pertaining to the 20182020 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this Form 10-K.
 

ASHFORD HOSPITALITY TRUST, INC.
YEAR ENDED DECEMBER 31, 20172019
INDEX TO FORM 10-K

  Page
 
PART I
   
Item 1.
   
Item 1A.
   
Item 1B.
   
Item 2.
   
Item 3.
   
Item 4.
 
PART II
   
Item 5.
Item 6.
Item 7.
   
Item 6.
Item 7.
Item 7A.
   
Item 8.
   
Item 9.
   
Item 9A.
   
Item 9B.
 
PART III
   
Item 10.
   
Item 11.
   
Item 12.
   
Item 13.
   
Item 14.
 
PART IV
   
Item 15.
 
Item 16.
 

This Annual Report is filed by Ashford Hospitality Trust, Inc., a Maryland corporation (the “Company”). Unless the context otherwise requires, all references to the Company include those entities owned or controlled by the Company. In this report, the terms “the Company,” “Ashford Trust,” “we,” “us” or “our” mean Ashford Hospitality Trust, Inc. and all entities included in its consolidated financial statements. “Remington Lodging” refers to Remington Lodging & Hospitality, LLC, a Delaware limited liability company and a hotel management company that was owned by Mr. Monty J. Bennett, chairman of our board of directors, and his father, Mr. Archie Bennett, Jr., our chairman emeritus, before its acquisition by Ashford Inc. on November 6, 2019. “Remington Hotels” refers to the same entity after the acquisition was completed, resulting in Remington Lodging & Hospitality, LLC becoming a subsidiary of Ashford Inc.
FORWARD-LOOKING STATEMENTS
Throughout this Annual Report on Form 10-K and documents incorporated herein by reference, we make forward-looking statements that are subject to risks and uncertainties. TheseForward-looking statements are generally identifiable by use of forward-looking statements include information about possible, estimatedterminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or assumed future results of our business, financial condition and liquidity, results of operations, plans, and objectives. Statementsother similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature:
the impact of the novel strain of coronavirus (COVID-19) on our business;
our business and investment strategy, including our ability to complete proposed business transactions described herein or the expected benefit of any such transactions;strategy;
anticipated or expected purchases or sales of assets;
our projected operating results;
completion of any pending transactions;
our ability to obtain future financing arrangements;arrangements or restructure existing property level indebtedness;
our understanding of our competition;
market trends;
projected capital expenditures; and
the impact of technology on our operations and business.
Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Additionally, the following factors could cause actual results to vary from our forward-looking statements:
the factors discussed in this Form 10-K, including those set forthAnnual Report under the sections titledentitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “Properties;”“Properties”, as updated in our subsequent Quarterly Reports on Form 10-Q and other filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
adverse effects of the novel strain of coronavirus (COVID-19), including a potential general reduction in business and personal travel and potential travel restrictions in regions where our hotels are located;
general volatility of the capital markets and the market price of our common and preferred stock;
general and economic business conditions affecting the lodging and travel industry;

changes in our business or investment strategy;
availability, terms, and deployment of capital;
unanticipated increases in financing and other costs, including a rise in interest rates;
availability of qualified personnel;personnel to our advisor;
changes in our industry and the market in which we operate, interest rates, or local economic conditions;
the degree and nature of our competition;
actual and potential conflicts of interest with our advisor,Ashford Inc. and its subsidiaries (including Ashford Hospitality Advisors LLC (“Ashford LLC”), Remington LodgingHotels, Premier Project Management LLC (“Premier”), Braemar Hotels & Hospitality, LLC,Resorts Inc. (together with its subsidiaries, “Braemar”), our executive officers and our non-independent directors;director;
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 of 1986, as amended (the “Internal Revenue Code”“Code”), and related rules, regulations and interpretations governing the taxation of REITs;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.
When we use words or phrases such as “will likely result,considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Annual Report on Form 10-K. The matters summarized under “Item 1A. Risk Factors,“may,” “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” or similar expressions, we intendand elsewhere, could cause our actual results and performance to identifydiffer significantly from those contained in our forward-looking statements. You shouldAccordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements. We arestatements, which reflect our views as of the date of this Annual Report on Form 10-K. Furthermore, we do not obligatedintend to publicly update or revise any of our forward-looking statements whetherafter the date of this Annual Report on Form 10-K to conform these statements to actual results and performance, except as a result of new information, future events, or otherwise.may be required by applicable law.

PART I
Item 1.Business
GENERAL
Ashford Hospitality Trust, Inc., together with its subsidiaries, is an externally-advised real estateREIT. While our portfolio currently consists of upscale hotels and upper upscale full-service hotels, our investment trust (“REIT”)strategy is predominantly focused on investing opportunistically in the hospitality industry with a focus predominantly on full-service upscale and upper upscale full-service hotels in the U.S. that have a revenue per available room (“RevPAR”) generally less than two times the U.S. national average. Additional information can be found on our website at www.ahtreit.com. We were formed as a Maryland corporation in May 2003 and commenced operations in August 2003, as a self-advised REIT. In November 2014, we completed the spin-off of our asset management business, forming Ashford Inc. as a separate publicly traded company, and we became2003. We are advised by Ashford Hospitality Advisors LLC, (“Ashford LLC”), a subsidiary of Ashford Inc. We continue to own our lodging investments and conduct our business through Ashford Hospitality Limited Partnership (“Ashford Trust OP”), our operating partnership. Ashford OP General Partner LLC, a wholly-owned subsidiary of the Company, serves as the sole general partner of our operating partnership.
Our hotel properties are primarily branded under the widely recognized upscale and upper upscale brands of Marriott, Hilton, Hyatt and Intercontinental Hotel Group. As of December 31, 2019, we owned interests in the following assets:
117 consolidated hotel properties, including 115 directly owned and two owned through a majority-owned investment in a consolidated entity, which represent 24,943 total rooms (or 24,916 net rooms excluding those attributable to our partner);
90 hotel condominium units at WorldQuest Resort in Orlando, Florida (“WorldQuest”); and
17.0% ownership in OpenKey with a carrying value of $2.8 million.
For U.S. federal income tax purposes, we have elected to be treated as a REIT, which subjects us to limitations related to operating hotels. As of December 31, 2019, our 117 hotel properties were leased or owned by our wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries for U.S. federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”). Ashford TRS then engages Remington Hotels or third-party hotel management companies to operate the hotels under management contracts. Hotel operating results related to these properties are included in our consolidated statements of operations.
We are advised by Ashford LLC through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the advisory services that might be provided by employees are provided to us by Ashford LLC.
Our hotel properties are primarily branded under the widely recognized upscale and upper upscale brands of Hilton, Hyatt, Marriott and Intercontinental Hotels Group. Currently, all of our hotel properties are located in the United States. As of December 31, 2017, we owned interests in the following:
120 consolidated hotel properties, including 118 (two which are held for sale) directly owned and two owned through a majority-owned investment in a consolidated entity, which represent 25,058 total rooms (or 25,031 net rooms excluding those attributable to our partner);
89 hotel condominium units at WorldQuest Resort in Orlando, Florida;
a 28.6% ownership in Ashford Inc. common stock with a carrying value of $437,000 and a fair value of $55.6 million; and
a 16.2% ownership in OpenKey with a carrying value of $2.5 million.
For federal income tax purposes, we have elected to be treated as a REIT, which imposes limitations related to operating hotels. As of December 31, 2017, all of our 120 hotel properties were leased or owned by our wholly-owned and majority-owned subsidiaries that are treated as taxable REIT subsidiaries for federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”). Ashford TRS then engages eligible independent contractors to operate the hotel properties under management contracts. Hotel operating results related to these properties are included in the consolidated statements of operations.
We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. On November 6, 2019, Ashford Inc. completed its acquisition of Remington Lodging & Hospitality, LLC, together with its affiliates (“Remington Lodging”), is one of our property managers, and is beneficially wholly-owned byLodging’s hotel management business from Mr. Monty J. Bennett, chairman of our Chairman,board of directors, and chairman, chief executive officer and a significant stockholder of Ashford Inc. and Mr. Archie Bennett, Jr., our Chairman Emeritus. chairman emeritus and a significant stockholder of Ashford Inc. Remington Hotels manages 80 of our 117 hotel properties and WorldQuest. Third-party hotel management companies manage our remaining hotel properties.
Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to project management services, debt placement services, audio visual services, real estate advisory services, insurance claims services, investment management services, hypoallergenic premium rooms, mobile key technology and broker-dealer services. See note 17 to our consolidated financial statements.
As of December 31, 2017, Remington Lodging managed 822019, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. together owned approximately 353,457 shares of Ashford Inc. common stock, which represented an approximate 16.0% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which was exercisable (at an exercise price of $117.50 per share) into an additional approximate 3,991,191 shares of Ashford Inc. common stock, which if exercised would have increased the Bennetts’ ownership interest in Ashford Inc. to 70.1%. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts.
The negative impact on room demand within our 120portfolio stemming from the novel coronavirus (COVID-19) is significant. We experienced an initial decline in hotel propertiesrevenue that began in February in a limited number of markets. However, with the increased spread of the novel coronavirus (COVID-19) across the globe, the impact has accelerated rapidly throughout our hotel portfolio. A more detailed discussion of the potential effects of novel coronavirus (COVID-19) on our business is contained in “Item 7. Management’s Discussion and the WorldQuest Resort.Analysis of Financial Condition and Results of Operations.”

BUSINESS STRATEGIES
Based on our primary business objectives and forecasted operating conditions, our current key priorities and financial strategies include, among other things:
acquisition of hotel properties, in whole or in part, that will be accretive to our portfolio;
disposition of non-core hotel properties;
pursuing capital market activities to enhance long-term stockholder value;
preserving capital, enhancing liquidity, and continuing current cost saving measures;
implementing selective capital improvements designed to increase profitability and to maintain the quality of our assets;
implementing effective asset management strategies to minimize operating costs and increase revenues;
financing or refinancing hotels on competitive terms;
utilizing hedges and derivatives to mitigate risks;
accessing cost effective capital; and
making other investments or divestitures that our board of directors deems appropriate.

Our current investment strategy is to focus on owning predominantly full-service hotels in the upscale and upper upscale segmentssegment in domestic and international markets that have RevPARrevenue per available room (“RevPAR”) generally less than twice the U.S. national average. We believe that as supply, demand, and capital market cycles change, we will be able to shift our investment strategy to take advantage of new lodging-related investment opportunities as they may develop. Our board of directors may change our investment strategy at any time without stockholder approval or notice.
While our current investment strategy is focused on direct hotel investments, as the business cycle changes and the hotel markets continue to improve, we may invest in a variety of lodging-related assets based upon our evaluation of diverse market conditions including our cost of capital and the expected returns from those investments. Our investments may include: (i) direct hotel investments; (ii) mezzanine financing through origination or acquisition; (iii) first-lienfirst mortgage financing through origination or acquisition; (iv) sale-leaseback transactions; and (v) other hospitality transactions.
Our strategy is designed to take advantage of lodging industry conditions and adjust to changes in market circumstances over time. Our assessment of market conditions will determine asset reallocation strategies. While we seek to capitalize on favorable market fundamentals, conditions beyond our control may have an impact on overall profitability and our investment returns. We will continue to seek ways to benefit from the cyclical nature of the hotel industry.
Our strategy of combining lodging-related equity and debt investments seeks, among other things, to:
capitalize on both current yield and price appreciation, while simultaneously offering diversification of types of assets within the hospitality industry; and
vary investments across an array of hospitality assets to take advantage of market cycles for each asset class.
To take full advantage of future investment opportunities in the lodging industry, we intend to invest according to the asset allocation strategies described below. However, due to ongoing changes in market conditions, we will continually evaluate the appropriateness of our investment strategies. Our board of directors may change any or all of these strategies at any time without stockholder approval or notice.
Direct Hotel Investments—In selecting hotels to acquire, we target hotels that offer either a high current return or the opportunity to increase in value through repositioning, capital investments, market-based recovery, or improved management practices. Our direct hotel acquisition strategy primarily targets full-service upscale and upper upscale hotels with RevPAR less than twice the national average in primary, secondary, and resort markets, typically throughout the United StatesU.S and will seek to achieve both current income and appreciation. In addition, we will continue to assess our existing hotel portfolio and make strategic decisions to sell certain under-performing or non-strategic hotels that do not fit our investment strategy or criteria due to micro or macro market changes or other reasons.
Mezzanine Financing—Subordinated loans, or mezzanine loans, that we acquire or originate may relate to a diverse segment of hotels that are located across the U.S. These mezzanine loans are secured by junior mortgages on hotels or pledges of equity interests in entities owning hotels. As the global economic environment improves and the hotel industry stabilizes, we may refocus our efforts on the acquisition or origination of mezzanine loans. Given the greater repayment risks of these types of loans, to the extent we acquire or originate them in the future, we will have a more conservative approach in underwriting these assets. Mezzanine loans that we acquire in the future may be secured by individual assets as well as cross-collateralized portfolios of assets.
First Mortgage Financing—From time to time, we may acquire or originate first mortgages. As the dynamics in the capital markets and the hotel industry make first-mortgage investments more attractive, we may acquire, potentially at a discount to par, or originate loans secured by first priority mortgages on hotels. We may be subject to certain state-imposed licensing regulations related to commercial mortgage lenders, with which we intend to comply. However, because we are not a bank or a federally chartered lending institution, we are not subject to state and federal regulatory constraints imposed on such entities.
Sale-Leaseback Transactions—To date, we have not participated in any sale-leaseback transactions. However, if the lodging industry fundamentals shift such that sale-leaseback transactions become more attractive investments, we may purchase hotels and lease them back to their existing hotel owners.
Other Transactions—We may also invest in other lodging related assets or businesses that offer diversification, attractive risk adjusted returns, and/or capital allocation benefits.benefits, including mezzanine financing, first mortgage financing, and/or sale-leaseback transactions.
BUSINESS SEGMENTS
We currently operate in one business segment within the hotel lodging industry: direct hotel investments. A discussion of our operating segment is incorporated by reference to note 2023 to our consolidated financial statements set forth in Part II, Item 8. Financial Statements and Supplementary Data.

FINANCING STRATEGY
We utilize debt to increase equity returns. When evaluating our future level of indebtedness and making decisions regarding the incurrence of indebtedness, our board of directors considers a number of factors, including:
our leverage levels across the portfolio;
the purchase price of our investments to be acquired with debt financing;
impact on financial covenants;

cost of debt;
loan maturity schedule;
the estimated market value of our investments upon refinancing;
the ability of particular investments, and our Company as a whole, to generate cash flow to cover expected debt service; and
trailing twelve months net operating income of the hotel to be financed.
We may incur debt in the form of purchase money obligations to the sellers of properties, publicly or privately placed debt instruments, or financing from banks, institutional investors, or other lenders. Any such indebtedness may be secured or unsecured by mortgages or other interests in our properties. This indebtedness may be recourse, non-recourse, or cross-collateralized. If recourse, such recourse may include our general assets or be limited to the particular investment to which the indebtedness relates. In addition, we may invest in properties or loans subject to existing loans secured by mortgages or similar liens on the properties, or we may refinance properties acquired on a leveraged basis. We may also from time to time receive additional capital from our advisor in the form of key money.enhanced return funding pursuant to our Enhanced Return Funding Program Agreement with Ashford LLC.
We may use the proceeds from any borrowings for working capital, consistent with industry practice, to:
purchase interests in partnerships or joint ventures;
finance the origination or purchase of debt investments; or
finance acquisitions, expand, redevelop or improve existing properties, or develop new properties or other uses.
In addition, if we do not have sufficient cash available, we may need to borrow to meet taxable income distribution requirements under the Internal Revenue Code. No assurances can be given that we will obtain additional financings or, if we do, what the amount and terms will be. Our failure to obtain future financing under favorable terms could adversely impact our ability to execute our business strategy. In addition, we may selectively pursue debt financing on our individual properties and debt investments.
DISTRIBUTION POLICY
In December 2016,2019, the board of directors approved our dividend policy for 20172020, which stated our then-expectation to pay a quarterly dividend of $0.06 per share on our common stock and operating partnership units during 2020. As previously disclosed, the approval of our dividend policy did not commit our board of directors to declare future dividends with an annualized targetrespect to any quantity or the amount thereof. As a result of $0.48the impact of the novel coronavirus (COVID-19) on our business, we expect that the board of directors will reconsider our previously announced dividend policy and may take further action with respect to 2020 dividends, including by eliminating or significantly reducing the dividend until such time as our business operating environment improves. The board of directors will continue to review our dividend policy and make future announcements with respect thereto. In December 2018, the board of directors approved our 2019 dividend policy which was modified in June 2019. The revised dividend policy resulted in a quarterly dividend payment of $0.06 per share.share for the last three quarters of 2019. For the year ended December 31, 2017,2019, we declared annualquarterly dividends of $0.48totaling $0.30 per share.share on our common stock and operating partnership units. We may incur indebtedness to meet distribution requirements imposed on REITs under the Internal Revenue Code to the extent that working capital and cash flow from our investments are insufficient to fund required distributions. We may elect to pay dividends on our common stock in cash or a combination of cash and shares of securities as permitted under U.S. federal income tax laws governing REIT distribution requirements. We may pay dividends in excess of our cash flow.
Distributions are authorized by our board of directors and declared by us based upon a variety of factors deemed relevant by our directors. No assurance can be given that our dividend policy, including our dividend policy for 2020, will not change in the future. In December 2017, the board of directors approved our dividend policy for 2018 and we expect to pay a quarterly dividend of $0.12 per share during 2018. The adoption of a dividend policy does not commit our board of directors to declare future dividends or the amount thereof. The board of directors will continue to review our dividend policy on at least a quarterly basis. Our ability to pay distributions to our stockholders will depend, in part, upon our receipt of distributions from our operating partnership. This, in turn, may depend upon receipt of lease payments with respect to our properties from indirect wholly-owned subsidiaries of our operating partnership, and the management of our properties by our property managers.hotel managers and general business conditions (including the impact of the novel coronavirus (COVID-19)). Distributions to our stockholders are generally taxable to our stockholders as ordinary income. However, since a portion of our investments are equity ownership interests in hotels, which result in depreciation and non-cash charges against our income, a portion of our distributions may constitute a non-taxable return of capital, to the extent of a stockholder’s tax basis in the stock. To the extent that it is consistent with maintaining our REIT status, we may maintain accumulated earnings of Ashford TRS in that entity.
Our charter allows us to issue preferred stock with a preference on distributions, such as our Series D, Series F, Series G, Series H and Series I preferred stock. The partnership agreement of our operating partnership also allows the operating partnership to issue units with a preference on distributions. The issuance of these series of preferred stock and units together with any similar

issuance in the future, given the dividend preference on such stock or units, could limit our ability to make a dividend distribution to our common stockholders. In addition, the same factors impacting the board of directors’ dividend policy in 2020 may impact our ability to pay dividends on our preferred stock.
COMPETITION
The hotel industry is highly competitive and the hotels in which we invest are subject to competition from other hotels for guests. Competition is based on a number of factors, most notably convenience of location, availability of rooms, brand affiliation, price, range of services, guest amenities or accommodations offered and quality of customer service. Competition is often specific to the individual markets in which our properties are located and includes competition from existing and new hotels. Increased competition could have a material adverse effect on the occupancy rate, average daily room rate and roomrooms revenue per available room of our hotels or may require us to make capital improvements that we otherwise would not have to make, which may result in decreases in our profitability.
Our principal competitors include other hotel operating companies, ownership companies (including hotel REITs) and national and international hotel brands. We face increased competition from providers of less expensive accommodations, such as select-service hotels or independent owner-managed hotels, during periods of economic downturn when leisure and business travelers become more sensitive to room rates. We may also experience competition from alternative types of accommodations such as Airbnb.home sharing companies and apartment operators offering short-term rentals.
EMPLOYEES
We have no employees. Our appointed officers and employees are provided by Ashford Hospitality Advisors LLC, (“Ashford LLC”), a subsidiary of Ashford Inc. (collectively, our “advisor”). ServicesAdvisory services which would otherwise be provided by employees are provided by Ashford LLC and by our executiveappointed officers. Ashford LLC has approximately 102116 full-time employees. These employees directly or indirectly perform various acquisition, development, asset management, capital markets, accounting, tax, risk management, legal, redevelopment, and corporate management functions pursuant to the terms of our advisory agreement.
ENVIRONMENTAL MATTERS
Under various federal, state, and local laws and regulations, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on such property. These laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of hazardous or toxic substances. Furthermore, a person who arranges for the disposal of a hazardous substance or transports a hazardous substance for disposal or treatment from property owned by another may be liable for the costs of removal or remediation of hazardous substances released into the environment at that property. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner’s ability to sell the affected property or to borrow using the affected property as collateral. In connection with the ownership and operation of our properties, we, our operating partnership, or Ashford TRS may be potentially liable for any such costs. In addition, the value of any lodging property loan we originate or acquire would be adversely affected if the underlying property contained hazardous or toxic substances.
Phase I environmental assessments, which are intended to identify potential environmental contamination for which our properties may be responsible, have been obtained on substantially all of our properties. Such Phase I environmental assessments included:
historical reviews of the properties;
reviews of certain public records;
preliminary investigations of the sites and surrounding properties;
screening for the presence of hazardous substances, toxic substances, and underground storage tanks; and
the preparation and issuance of a written report.
Such Phase I environmental assessments did not include invasive procedures, such as soil sampling or ground water analysis. Such Phase I environmental assessments have not revealed any environmental liability that we believe would have a material adverse effect on our business, assets, results of operations, or liquidity, and we are not aware of any such liability. To the extent Phase I environmental assessments reveal facts that require further investigation, we would perform a Phase II environmental assessment. However, it is possible that these environmental assessments will not reveal all environmental liabilities. There may be material environmental liabilities of which we are unaware, including environmental liabilities that may have arisen since the environmental assessments were completed or updated. No assurances can be given thatthat: (i) future laws, ordinances, or regulations will not impose any material environmental liability,liability; or (ii) the current environmental condition of our properties will not be

affected by the condition of properties in the vicinity (such as the presence of leaking underground storage tanks) or by third parties unrelated to us.

We believe our properties are in compliance in all material respects with all federal, state, and local ordinances and regulations regarding hazardous or toxic substances and other environmental matters. Neither we nor, to our knowledge, any of the former owners of our properties have been notified by any governmental authority of any material noncompliance, liability, or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties.
INSURANCE
We maintain comprehensive insurance, including liability, property, workers’ compensation, rental loss, environmental, terrorism, cyber security and, when available on commercially reasonable terms, flood, wind and earthquake insurance, with policy specifications, limits, and deductibles customarily carried for similar properties. Certain types of losses (for example, matters of a catastrophic nature such as acts of war or substantial known environmental liabilities) are either uninsurable or require substantial premiums that are not economically feasible to maintain. Certain types of losses, such as those arising from subsidence activity, are insurable only to the extent that certain standard policy exceptions to insurability are waived by agreement with the insurer. We believe, however, that our properties are adequately insured, consistent with industry standards.
FRANCHISE LICENSES
We believe that the public’s perception of quality associated with a franchisor can be an important feature in the operation of a hotel. Franchisors provide a variety of benefits for franchisees, which include national advertising, publicity, and other marketing programs designed to increase brand awareness, training of personnel, continuous review of quality standards, and centralized reservation systems.
As of December 31, 2017,2019, we owned interests in 120117 hotel properties, 113110 of which operated under the following franchise licenses or brand management agreements:
Embassy Suites is a registered trademark of Hilton Hospitality, Inc.
Hilton is a registered trademark of Hilton Hospitality, Inc.
Hilton Garden Inn is a registered trademark of Hilton Hospitality, Inc.
Hampton Inn is a registered trademark of Hilton Hospitality, Inc.
Homewood Suites is a registered trademark of Hilton Hospitality, Inc.
Marriott is a registered trademark of Marriott International, Inc.
SpringHill Suites is a registered trademark of Marriott International, Inc.
Residence Inn by Marriott is a registered trademark of Marriott International, Inc.
Courtyard by Marriott is a registered trademark of Marriott International, Inc.
Fairfield Inn by Marriott is a registered trademark of Marriott International, Inc.
TownePlace Suites is a registered trademark of Marriott International, Inc.
Renaissance is a registered trademark of Marriott International, Inc.
Ritz-Carlton is a registered trademark of Marriott International, Inc.
Hyatt Regency is a registered trademark of Hyatt Hotels Corporation.
Le Meridien is a registered trademark of Marriott International, Inc.
Sheraton is a registered trademark of Marriott International, Inc.
W is a registered trademark of Marriott International, Inc.
Westin is a registered trademark of Marriott International, Inc.
Crowne Plaza is a registered trademark of InterContinental Hotels Group.
Hotel Indigo is a registered trademark of InterContinental Hotels Group.
One Ocean is a registered trademark of Remington Hotels, LP.LLC
Tribute Portfolio is a registered trademark of Marriott International, Inc.

Our management companies, including Remington Lodging,Hotels, must operate each hotel pursuant to the terms of the related franchise or brand management agreement and must use their best efforts to maintain the right to operate each hotel pursuant to such terms. In the event of termination of a particular franchise or brand management agreement, our management companies

must operate any affected hotels under another franchise or brand management agreement, if any, that we enter into. We anticipate that many of the additional hotels we acquire could be operated under franchise licenses or brand management agreements as well.
Our franchise licenses and brand management agreements generally specify certain management, operational, recordkeeping, accounting, reporting, and marketing standards and procedures with which the franchisee or brand operator must comply, including requirements related to:
training of operational personnel;
safety;
maintaining specified insurance;
types of services and products ancillary to guestroom services that may be provided;
display of signage; and
type, quality, and age of furniture, fixtures, and equipment included in guestrooms, lobbies, and other common areas.
SEASONALITY
Our properties’ operations historically have been seasonal as certain properties maintain higher occupancy rates during the summer months, while certain other properties maintain higher occupancy rates during the winter months. This seasonality pattern can cause fluctuations in our quarterly lease revenue under our percentage leases.revenue. We anticipate that our cash flows from the operations of our properties will be sufficient to enable us to make quarterly distributions to maintain our REIT status. To the extent that cash flows from operations are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize other cash on hand or borrowings to fund required distributions. However, we cannot make any assurances that we will make distributions in the future.
ACCESS TO REPORTS AND OTHER INFORMATION
We maintain a website at www.ahtreit.com. On our website, we make available free-of-charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file or furnish such material with the Securities and Exchange Commission (the “SEC”). All of our filed reports can also be obtained at the SEC’s website at www.sec.gov. In addition, our Code of Business Conduct and Ethics, Code of Ethics for the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, Corporate Governance Guidelines, and Board Committee Charters are also available free-of-charge on our website or can be made available in print upon request.
All reports filed withA description of any substantive amendment or waiver of our Code of Business Conduct and Ethics or our Code of Ethics for the SEC mayExecutive Officer, Chief Financial Officer and Chief Accounting Officer will be disclosed on our website under the Corporate Governance section. Any such description will be located on our website for a period of 12 months following the amendment or waiver. We also be readuse our website to distribute company information, and copied at the SEC’s Public Reference Room at 100 F Street, N.E. Washington, DC 20549-1090. Furthersuch information regarding the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Indeemed material. Accordingly, investors should monitor our website, in addition allto our press releases, SEC filings and public conference calls and webcasts. The contents of our filed reports can be obtained at the SEC’s website at www.sec.gov.are not, however, a part of this report.
Item 1A.Risk Factors
RISKS RELATED TO OUR BUSINESS
A financial crisis, or economic slowdown, or epidemic or other economically disruptive events may harm the operating performance of the hotel industry generally. If such events occur, we may be harmed by declines in occupancy, average daily room rates and/or other operating revenues.
The performance of the lodging industry has been closely linked with the performance of the general economy and, specifically, growth in the U.S. gross domestic product. A majority of our hotels are classified as upscale and upper upscale. In an economic downturn, these types of hotels may be more susceptible to a decrease in revenue, as compared to hotels in other categories that have lower room rates. This characteristic may result from the fact that upscale and upper upscale hotels generally target business and high-end leisure travelers. In periods of economic difficulties or concerns with respect to communicable disease, business and leisure travelers may seek to reduce travel costs and/or health risks by limiting travel or seeking to reduce costs on their trips. Any economic recession will likely have an adverse effect on us.
Continued or renewed economic
Economic weakness in the U.S. economy, generally, or a new recession would likely adversely affect our financial condition.
Failure of the hotel industry to exhibit sustained improvement or to improve as expected may adversely affect us.
A substantial part of our business plan is based on our belief that the lodging markets in which we invest will experience improving economic fundamentals in the future, despite that fundamentals have already substantially improved over the last several years. In particular, our business strategy is dependent on our expectation that key industry performance indicators, especially RevPAR, will continue to improve. There can be no assurance as to whether or to what extent, hotel industry fundamentals will

continue to improve. In the event conditions in the industry do not sustain improvement or improve as we expect, or deteriorate, we may be adversely affected.
The hotel industry is highly competitive and the hotels in which we invest are subject to competition from other hotels for guests.
The hotel business is highly competitive. Our hotel properties will compete on the basis of location, brand, room rates, quality, amenities, reputation and reservations systems, among many factors. There are many competitors in the hotel industry, and many of these competitors may have substantially greater marketing and financial resources than we have. This competition could reduce occupancy levels and roomrooms revenue at our hotels. Over-building in the lodging industry may increase the number of rooms available and may decrease occupancy and room rates. In addition, in periods of weak demand, as may occur during a general economic recession, profitability is negatively affected by the fixed costs of operating hotels. We may also face competition from services such as Airbnb.home sharing companies and apartment operators offering short-term rentals.
Because we depend upon our advisor and its affiliates to conduct our operations, any adverse changes in the financial condition of our advisor or its affiliates or our relationship with them could hinder our operating performance.
We depend on our advisor or its affiliates to manage our assets and operations. Any adverse changes in the financial condition of our advisor or its affiliates or our relationship with our advisorthem could hinder itstheir ability to manage us and our operations successfully.
We depend on our advisor’s key personnel with long-standing business relationships. The loss of our advisor’s key personnel could threaten our ability to operate our business successfully.
Our future success depends, to a significant extent, upon the continued services of our advisor’s management team and the extent and nature of the relationships they have developed with hotel franchisors, operators, and owners and hotel lending and other financial institutions. The loss of services of one or more members of our advisor’s management team could harm our business and our prospects.
The aggregate amount of fees and expense reimbursements paid to our advisor, (as provided in our advisory agreement) will exceed the average of internalized expenses of our industry peers (as provided in our advisory agreement), as a percentage of total market capitalization. As a part of these fees, we must pay a minimum advisory fee to our advisor regardless of our performance.
Pursuant to the advisory agreement between us and our advisor, we must pay our advisor on a quarterlymonthly basis a base management fee (subject to a minimum base management fee described below), that is based on a declining scale percentage of our total market capitalization (as defined in our advisory agreement) plus the Key MoneyNet Asset Management Fee Adjustment (as defined in our advisory agreement), an annual incentive fee that will be based on our achievement of certain minimum performance thresholds and certain expense reimbursements. For each quarter, theThe minimum base management fee will beis equal to the greater of (i) 90% of the base fee paid for the same quartermonth in the prior fiscal year; and (ii) 1/12th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization for such quarter.on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. The “G&A Ratio” will beis calculated as the simple average of the ratios of total general and administrative expenses paid, less any non-cash expenses but including any dead-deal costs, in the applicable quarter by each member of a select peer group, divided by the total market capitalization of such peer group member (as provided in our advisory agreement.)agreement). Since the base management fee is subject to this minimum amount and because a portion of such fees are contingent on our performance, the fees we pay to our advisor may fluctuate over time. However, regardless of our advisor’s performance, the total amount of fees and reimbursements paid to our advisor as a percentage of market capitalization will never be less than the average of internalized expenses of our selected industry peers (as provided in our advisory agreement), and there may be times when the total amount of fees and incentives paid to our advisor greatly exceeds the average of internalized expenses of our selected industry peers.
Our advisor’s entitlement to non-performance-based compensation, including the minimum base management fee, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. Further, our incentive fee structure may induce our advisor to encourage us to acquire certain assets, including speculative or high risk assets, or to acquire assets with increased leverage, which could increase the risk to our portfolio.
Our joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturers.
We have in the past and may continue to co-invest with third parties through partnerships, joint ventures or other entities, acquiring controlling or non-controlling interests in, or sharing responsibility for, managing the affairs of a property, partnership, joint venture or other entity. In such event, we may not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity. Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers

might become bankrupt, suffer a deterioration in their financial condition or fail to fund their share of required capital contributions.

Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, budgets, or financing, if neither we nor the partner or co-venturer has full control over the partnership or joint venture. Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers or directors from focusing their time and effort on our business. Consequently, actions by, or disputes with, partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers.
Our business strategy depends on our continued growth. We may fail to integrate recent and additional investments into our operations or otherwise manage our plannedfuture growth, which may adversely affect our operating results.
Our business plan contemplates a period of continued growth in the next several years. We cannot assure you that we will be able to adapt our management, administrative, accounting, and operational systems, or our advisor will be able to hire and retain sufficient operational staff to successfully integrate and manage any future acquisitions of additional assets without operating disruptions or unanticipated costs. Acquisitions of any property or additional portfolios of properties or mortgages wouldcould generate additional operating expenses for us. Any future acquisitions may also require us to enter into property improvement plans that will increase our operating expenses.use of cash and could disrupt performance. As we acquire additional assets, we will be subject to the operational risks associated with owning those assets. Our failure to successfully integrate any future acquisitions into our portfolio could have a material adverse effect on our results of operations and financial condition and our ability to pay dividends to our stockholders.
Because our board of directors and our advisor have broad discretion to make future investments, we may make investments that result in returns that are substantially below expectations or that result in net operating losses.
Our board of directors and our advisor have broad discretion, within the investment criteria established by our board of directors, to make additional investments and to determine the timing of such investments. In addition, our investment policies may be revised from time to time at the discretion of our board of directors, without a vote of our stockholders.stockholders, including with respect to our dividend policies on our common and preferred stock. Such discretion could result in investments with yield returns inconsistent with expectations.
We may be unable to identify additional investments that meet our investment criteria or to acquire the properties we have under contract.
We cannot assure you that we will be able to identify real estate investments that meet our investment criteria, that we will be successful in completing any investment we identify, or that any investment we complete will produce a return on our investment. Moreover, we have broad authority to invest in any real estate investments that we may identify in the future. We also cannot assure you that we will acquire properties we currently have under firm purchase contracts, if any, or that the acquisition terms we have negotiated will not change.
Hotel franchise or license requirements or the loss of a franchise could adversely affect us.
We must comply with operating standards, terms, and conditions imposed by the franchisors of the hotel brands under which our hotels operate. Franchisors periodically inspect their licensed hotels to confirm adherence to their operating standards. The failure of a hotel to maintain standards could result in the loss or cancellation of a franchise license. With respect to operational standards, we rely on our propertyhotel managers to conform to such standards. At times we may not be in compliance with such standards. Franchisors may also require us to make certain capital improvements to maintain the hotel in accordance with system standards, the cost of which can be substantial. It is possible that a franchisor could condition the continuation of a franchise based on the completion of capital improvements that our advisor or board of directors determines is not economically feasible in light of general economic conditions, the operating results or prospects of the affected hotel or other circumstances. In that event, our advisor or board of directors may elect to allow the franchise to lapse or be terminated, which could result in a termination charge as well as a change in brand franchising or operation of the hotel as an independent hotel. In addition, when the term of a franchise expires, the franchisor has no obligation to issue a new franchise.
The loss of a franchise could have a material adverse effect on the operations and/or the underlying value of the affected hotel because of the loss of associated name recognition, marketing support and centralized reservation systems provided by the franchisor.

Our investments are concentrated in particular segments of a single industry.
Nearly all of our business is hotel related. Our current strategy is predominantly to acquire upscale to upper upscale hotels, as well as when conditions are favorable to acquire first mortgages on hotel properties, invest in other mortgage-related instruments such as mezzanine loans to hotel owners and operators, and participate in hotel sale-leaseback transactions. Adverse conditions

in the hotel industry, including as a result of the novel coronavirus (COVID-19), will have a material adverse effect on our operating and investment revenues and cash available for distribution to our stockholders.
Our reliance on Remington Hotels, a subsidiary of Ashford Inc., and on third party propertyhotel managers including Remington Lodging, to operate our hotels and for a substantial majority of our cash flow may adversely affect us.
Because U.S. federal income tax laws restrict REITs and their subsidiaries from operating or managing hotels, third parties must operate our hotels. A REIT may lease its hotels to taxable REIT subsidiaries in which the REIT can own up to a 100% interest. A taxable REIT subsidiary (“TRS”) pays corporate-level income tax and may retain any after-tax income. A REIT must satisfy certain conditions to use the TRS structure. One of those conditions is that the TRS must hire, to manage the hotels, an “eligible independent contractor” (“EIC”) that is actively engaged in the trade or business of managing hotels for parties other than the REIT. An EIC cannot (i) own more than 35% of the REIT, (ii) be owned more than 35% by persons owning more than 35% of the REIT, or (iii) provide any income to the REIT (i.e., the EIC cannot pay fees to the REIT, and the REIT cannot own any debt or equity securities of the EIC). Accordingly, while we may lease hotels to a TRS that we own, the TRS must engage a third-party operator to manage the hotels. Thus, our ability to direct and control how our hotels are operated is less than if we were able to manage our hotels directly.
We have entered into management agreements with Remington Lodging, which is owned 100% by Messrs. Archie and Monty J. Bennett,Hotels, a subsidiary of Ashford Inc., to manage 8280 of our 120117 hotel properties and the WorldQuest condominium properties as of December 31, 2017.2019. We have hired unaffiliated third-party propertyhotel managers to manage our remaining properties. We do not supervise any of the propertyhotel managers or their respective personnel on a day-to-day basis, and we cannot assure you that the propertyhotel managers will manage our properties in a manner that is consistent with their respective obligations under the applicable management agreement or our obligations under our hotel franchise agreements. We also cannot assure you that our propertyhotel managers will not be negligent in their performance, will not engage in criminal or fraudulent activity, or will not otherwise default on their respective management obligations to us. If any of the foregoing occurs, our relationships with any franchisors may be damaged, we may be in breach of our franchise agreement, and we could incur liabilities resulting from loss or injury to our property or to persons at our properties. In addition, from time to time, disputes may arise between us and our third-party managers regarding their performance or compliance with the terms of the hotel management agreements, which in turn could adversely affect us. We generally will attempt to resolve any such disputes through discussions and negotiations; however, if we are unable to reach satisfactory results through discussions and negotiations, we may choose to terminate our management agreement, litigate the dispute or submit the matter to third-party dispute resolution, the expense of which may be material and the outcome of which may adversely affect us.
Our cash flow from the hotels may be adversely affected if our managers fail to provide quality services and amenities or if they or their affiliates fail to maintain a quality brand name. In addition, our managers or their affiliates may manage, and in some cases may own, invest in or provide credit support or operating guarantees, to hotels that compete with hotel properties that we own or acquire, which may result in conflicts of interest and decisions regarding the operation of our hotels that are not in our best interests. Any of these circumstances could adversely affect us.
Our management agreements could adversely affect our sale or financing of hotel properties.
We have entered into management agreements, and acquired properties subject to management agreements, that do not allow us to replace hotel managers on relatively short notice or with limited cost or contain other restrictive covenants, and we may enter into additional such agreements or acquire properties subject to such agreements in the future. For example, the terms of a management agreement may restrict our ability to sell a property unless the purchaser is not a competitor of the manager, assumes the management agreement and meets other conditions. Also, the terms of a long-term management agreement encumbering our property may reduce the value of the property. When we enter into or acquire properties subject to any such management agreements, we may be precluded from taking actions in our best interest and could incur substantial expense as a result of the agreements.
If we cannot obtain additional capital, our growth will be limited.
We are required to distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains, each year to maintain our qualification as a REIT. As a result, our retained earnings available to fund acquisitions, development, or other capital expenditures are nominal. As such, we rely upon the availability of additional debt or equity capital to fund these activities. Our long-term ability to grow through acquisitions or development, which is an important strategy for us, will be limited if we cannot obtain additional financing or equity capital. Market conditions may make it difficult to obtain financing or equity

capital, and we cannot assure you that we will be able to obtain additional debt or equity financing or that we will be able to obtain it on favorable terms.

We may not realize the anticipated benefits of the Enhanced Return Funding Program.
On June 26, 2018, we entered into the Enhanced Return Funding Program Agreement and Amendment No. 1 to the Amended and Restated Advisory Agreement (the “ERFP Agreement”) with Ashford Inc. and Ashford LLC, which generally provides that Ashford LLC will provide funding to facilitate the acquisition of properties by us that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). Each funding by Ashford LLC will equal 10% of the property acquisition price and will be made either at the time of the property acquisition or at any time generally within the two-year period following the date of such acquisition, in exchange for furniture, fixtures & equipment (“FF&E”) for use at the acquired property or any other property owned by us. The initial term of the ERFP Agreement is two years (the “Initial Term”), unless earlier terminated pursuant to the terms of the ERFP Agreement. At the end of the Initial Term, the ERFP Agreement shall automatically renew for successive one year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Ashford Trust provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.
In connection with our acquisition of the Embassy Suites New York Midtown Manhattan on January 23, 2019, Ashford LLC became obligated to provide us with approximately $19.5 million in exchange for FF&E at our properties. As of December 31, 2019, we had received $8.1 million of cash with respect to these acquisitions in exchange for FF&E that was subsequently leased back to us rent-free under the ERFP Agreement. The remaining $11.4 million must be provided within two years of the acquisition date.
Ashford LLC, however, is not required to commit to provide funding under the ERFP Agreement if its unrestricted cash balance, after taking into account the cash amount required for such funding, would be less than $15.0 million. In addition, there can be no assurance that when FF&E is identified by us in connection with an ERFP funding that Ashford LLC will make the required payment to us on a timely basis or at all. Ashford LLC’s delay or failure to make the payment under the ERFP Agreement would negatively impact our ability to realize the intended benefits under the ERFP Agreement, which could result in a material adverse effect of our business, results of operations and financial condition. Furthermore, we may choose not to enforce, or to enforce less vigorously, our rights under the ERFP Agreement because of our desire to maintain our ongoing relationship with Ashford Inc. and Ashford LLC, and legal action against either party is likely to impact that relationship. Ashford LLC has a remaining commitment to provide approximately $9.4 million in ERFP fundings to us in respect of its initial $50 million commitment.
We compete with other hotels for guests and face competition for acquisitions and sales of hotel properties and of desirable debt investments.
The hotel business is competitive. Our hotels compete on the basis of location, room rates, quality, service levels, amenities, loyalty programs, reputation and reservation systems, among many other factors. New hotels may be constructed and these additions to supply create new competitors, in some cases without corresponding increases in demand for hotel rooms. The result in some cases may be lower revenue, which would result in lower cash available to meet debt service obligations, operating expenses and requisite distributions to our stockholders.
We compete for hotel acquisitions with entities that have similar investment objectives as we do. This competition could limit the number of suitable investment opportunities offered to us. It may also increase the bargaining power of property owners seeking to sell to us, making it more difficult for us to acquire new properties on attractive terms or on the terms contemplated in our business plan. In addition, we compete to sell hotel properties. Availability of capital, the number of hotels available for sale and market conditions all affect prices. We may not be able to sell hotel assets at our targeted price.
We may also compete for mortgage asset investments with numerous public and private real estate investment vehicles, such as mortgage banks, pension funds, other REITs, institutional investors, and individuals. Mortgages and other investments are often obtained through a competitive bidding process. In addition, competitors may seek to establish relationships with the financial institutions and other firms from which we intend to purchase such assets. Competition may result in higher prices for mortgage assets, lower yields, and a narrower spread of yields over our borrowing costs.
Some of our competitors are larger than us, may have access to greater capital, marketing, and other financial resources, may have personnel with more experience than our officers, may be able to accept higher levels of debt or otherwise may tolerate more risk than us, may have better relations with hotel franchisors, sellers or lenders, and may have other advantages over us in conducting certain business and providing certain services.

We face risks related to changes in the domestic and global political and political economic environment, including capital and credit markets.
Our business may be impacted by domestic and global economic conditions, which recently have been volatile.conditions. Political crises in individualthe U.S. and other international countries or regions, including sovereign risk related to a deterioration in the credit worthiness or a default by local governments, has contributed to this volatility.may negatively affect global economic conditions and our business. If the U.S. or global economy experiences continued volatility or significant disruptions, such disruptions or volatility could hurt the U.S. economy and our business could be negatively impacted by reduced demand for business and leisure travel related to a slow-down in the general economy, by disruptions resulting from tighter credit markets, higher operating costs and by liquidity issues resulting from an inability to access credit markets to obtain cash to support operations. Our objective is to maintain access to capital and credit markets.
We are increasingly dependent on information technology, and potential cyber-attacks, security problems or other disruption and expanding social media vehicles present new risks.
As do most companies, our advisor and our various hotel managers rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, reservations, billing and operating data. Our advisor and our hotel managers purchase some of our information technology from vendors, on whom our systems depend, and our advisor relies on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential operator and other customer information, such as individually identifiable information, including information relating to financial accounts.
We often depend upon the secure transmission of this information over public networks. Our advisor’s and our hotel managers'managers’ networks and storage applications aremay be subject to unauthorized access by hackers or others (through cyber-attacks, which are rapidly evolving and becoming increasingly sophisticated, or by other means) or may be breached due to operator error, malfeasance or other system disruptions. In some cases, it is difficult to anticipate or immediately detect such incidents and the damage caused thereby. Any significant breakdown, invasion, destruction, interruption or leakage of our advisor’s or our hotel managers’ systems could harm us.
In addition, the use of social media could cause us to suffer brand damage or information leakage. Negative posts or comments about us, our hotel managers or our hotels on any social networking website could damage our or our hotels’ reputations. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels. The continuing evolution of social media will present us with new challenges and risks.

Changes in laws, regulations, or policies may adversely affect our business.
The laws and regulations governing our business or the regulatory or enforcement environment at the federal level or in any of the states in which we operate may change at any time and may have an adverse effect on our business. For example, the Patient Protection and Affordable Care Act of 2010, as it is phased in over time, will significantly affect the administration of health care services and could significantly impact our cost of providing employees with health care insurance. We are unable to predict how this or any other future legislative or regulatory proposals or programs will be administered or implemented or in what form, or whether any additional or similar changes to statutes or regulations, including the interpretation or implementation thereof, will occur in the future. Any such action could affect us in substantial and unpredictable ways and could have an adverse effect on our results of operations and financial condition. Our inability to remain in compliance with regulatory requirements in a particular jurisdiction could have a material adverse effect on our operations in that market and on our reputation generally. No assurance can be given that applicable laws or regulations will not be amended or construed differently or that new laws and regulations will not be adopted, either of which could materially adversely affect our business, financial condition or results of operations.
Our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting.
The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weakness, in our internal control over financial reporting could result in misstatements of our results of operations, restatements of our financial statements or could otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.
The Company faces possible risks associated withWe may experience losses caused by severe weather conditions, natural disasters or the physical effects of climate change.
The Company cannot predict with certainty any impact, rateOur properties are susceptible to revenue loss, cost increase or timing related to possible changes indamage caused by severe weather conditions or natural disasters such as hurricanes, earthquakes, tornadoes and floods, as well as the climate. However, the physical effects of climate change could have a material adverse effect on the Company. For example, a number of the Company’s hotels are located along the Gulf and East coasts.change. To the extent climate change causes

changes in weather patterns, its marketswe could experience increases in storm intensity and rising sea-levels. Over time, these conditions could result in declining hotel demand, significant damage to our properties or the Company’sour inability to operate the affected hotels at all. Climate change also
We believe that our properties are adequately insured, consistent with industry standards, to cover reasonably anticipated losses that may be caused by hurricanes, earthquakes, tornadoes, floods and other severe weather conditions and natural disasters, including the effects of climate change. Nevertheless, we are subject to the risk that such insurance will not fully cover all losses and, depending on the severity of the event and the impact on our properties, such insurance may not cover a significant portion of the losses including but not limited to the costs associated with evacuation. These losses may lead to an increase in our cost of insurance, a decrease in our anticipated revenues from an affected property or a loss of all or a portion of the capital we have indirect effects on its business by increasinginvested in an affected property. In addition, we may not purchase insurance under certain circumstances if the cost of (or making unavailable) property insurance on termsexceeds, in our judgment, the Company finds acceptable, increasingvalue of the costcoverage relative to the risk of energyloss. Also, changes in federal and increasing the cost of snow removal at its properties. There can be no assurance thatstate legislation and regulation relating to climate change will not havecould result in increased capital expenditures to improve the energy efficiency and resiliency of our existing properties and could also necessitate spending more on our new development properties without a material adverse effect on the Company.corresponding increase in revenue.
RISKS RELATED TO OUR DEBT FINANCING
We are subject to various risks related tohave a significant amount of debt, and our useorganizational documents have no limitation on the amount of and dependence on, debt.additional indebtedness that we may incur in the future.
As of December 31, 2017,2019, we had aggregated borrowingsapproximately $4.1 billion of outstanding indebtedness, including approximately $3.7 billion outstanding, including $3.4$3.8 billion of variable interest rate debt, and we expect to incur additional indebtedness, including additional variable-rate debt. TheIn the future, we may incur additional indebtedness to finance future hotel acquisitions, capital improvements and development activities and other corporate purposes.
A substantial level of indebtedness could have adverse consequences for our business, results of operations and financial position because it could, among other things:
require us to dedicate a substantial portion of our cash flow from operations to make principal and interest payments on our indebtedness, thereby reducing our cash flow available to fund working capital, capital expenditures and other general corporate purposes, including to pay dividends on our common stock and our preferred stock as currently contemplated or necessary to satisfy the requirements for qualification as a REIT;
increase our vulnerability to general adverse economic and industry conditions and limit our flexibility in planning for, or reacting to, changes in our business and our industry;
limit our ability to borrow additional funds or refinance indebtedness on favorable terms or at all to expand our business or ease liquidity constraints; and
place us at a competitive disadvantage relative to competitors that have less indebtedness.
Our charter and bylaws do not limit the amount or percentage of indebtedness that we may incur, and we are subject to risks normally associated with debt financing. Generally, our mortgage debt carries maturity dates or call dates such that the loans become due prior to their full amortization. It may be difficult to refinance or extend the maturity of such loans on terms acceptable to us, or at all. These conditions could adversely affect our financial position, results of operations, and cash flows or the market price of our stock.
Increases in interest rates could increase our debt payments.
As of December 31, 2019, we had approximately $4.1 billion of outstanding indebtedness, including approximately $3.8 billion of variable interest rate debt, and we expect to incur additional indebtedness, including additional variable-rate debt. Increases in interest rates increase our interest costs on our variable-rate debt and could increase interest expense on any future fixed rate debt we may incur, and interest we pay on variable-rate debt increases as interest rates increase above any floor rates, which may decreasereduces our cash available for distribution todistributions, expansion, working capital and other uses. Moreover, periods of rising interest rates heighten the risks described immediately above under “We have a significant amount of debt, and our stockholders. We are also subject toorganizational documents have no limitation on the riskamount of additional indebtedness that we may not be able to meetincur in the future.”
If we default on our secured debt service obligations or refinancein the future, the lenders may foreclose on our debt as it becomes due.hotels.
All of our property-level indebtedness is secured by mortgages on the applicable property. If we default on any of the secured loans or do not meet our debt service obligations, the lender will be able to foreclose on the property pledged to the relevant lender under that loan. While we have maintained certain of our hotels unencumbered by mortgage debt, we have a relatively high loan-

to-value on a number of our hotels which are subject to mortgage loans and, as a result, those mortgaged hotels may be at an increased risk of default and foreclosure. In addition, to the loss ofextent that we cannot meet any future debt service obligations, we will risk losing some or all of our assetshotels that are pledged to secure our obligations to foreclosure. ChangesThis could affect our ability to make distributions to our stockholders. A foreclosure may also result in reputational risks with lenders that could make it more difficult, or more costly, to obtain loans in the future.
Particularly in times of economic stress caused by general economic conditions or our financial results or prospects could (i) result in higher interest ratesevents particularly impacting the hospitality sector (including the novel coronavirus (COVID-19)), we may attempt to restructure the indebtedness on variable-rate debt, (ii) reduce the availability of debt financing generally or debt financing at favorable rates, (iii) reduce cash available for distribution to our stockholders, (iv) increase the risk that we could be forced to liquidate assets or repay debt, either of which could have a material adverse effect on us, and (v) create other challenging situations for us.
Some of our debt agreements contain financial and other covenants. If we violate covenants in any debt agreements, including as a result of impairmentssome of our hotel or mezzanineassets, including if the level of indebtedness exceeds the value of the pledged hotel assets. In March 2020, we informed our mortgage lenders on the Morgan Stanley 8-hotel portfolio (consisting of Courtyard Billerica, Hampton Inn Columbus Easton, Hampton Inn Phoenix Airport, Homewood Suites Pittsburgh Southpointe, Hampton Inn Pittsburgh Waterfront, Hampton Inn Pittsburgh Washington, Residence Inn Stillwater and Courtyard Wichita), with respect to which indebtedness exceeds the value of the hotels, that the cash flow from the hotels will be insufficient to cover debt service and other required payments due on the loan, assets,that we believe there is substantial risk of imminent payment default, and have requested that the lenders restructure the mortgage loans. In the event our lenders are unwilling to restructure these loans, we could be requiredelect to repay all orstop making payments on the loans, which would entitle the lenders to foreclose on the properties.
In addition to losing the applicable properties, 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 also prohibit us from borrowing unused amounts under our lines of credit, even if repayment of some or all the borrowings is not required. In any event, financial covenants under our current or future debt obligations could impair our planned business strategies by limiting our ability to borrow beyond certain amounts or for certain purposes. Our governing instruments do not contain any limitation on our ability to incur indebtedness.

Mortgage debt obligations expose us to increased risk of property losses, which could harm our financial condition, cash flow, and ability to satisfy our other debt obligations and pay dividends.
Incurring mortgage debt increases our risk of property losses because defaults on indebtedness secured by propertiesforeclosure may result in foreclosure actions initiated by lenders and ultimately our lossrecognition of taxable income. Under the property securing any loans for which we are in default. For tax purposes,Code, a foreclosure of any of our propertiesproperty securing non-recourse debt would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on the foreclosure but wouldeven though we did not receive any cash proceeds. As a result, we may be required to identify and utilize other sources of cash for distributions to our stockholders of that income.stockholders.
In addition, our default under any one of our mortgage debt obligationsOur future indebtedness may result inbe cross-collateralized and, consequently, a default on any such indebtedness could cause us to lose part or all of our investment in multiple properties.
We may enter into other indebtedness. If this occurs,transactions which could further exacerbate the risks to our financial condition, cash flow, andcondition. The use of debt to finance future acquisitions could restrict operations, inhibit our ability to satisfygrow our otherbusiness and revenues, and negatively affect our business and financial results.
We intend to incur additional debt obligationsin connection with future hotel acquisitions. We may, in some instances, borrow new funds to acquire hotels. In addition, we may incur mortgage debt by obtaining loans secured by a portfolio of some or abilityall of the hotels that we own or acquire. If necessary or advisable, we also may borrow funds to pay dividendsmake distributions to our stockholders to maintain our qualification as a REIT for U.S. federal income tax purposes. To the extent that we incur debt in the future and do not have sufficient funds to repay such debt at maturity, it may be impaired.
We voluntarily electednecessary to cease making paymentsrefinance the debt through debt or equity financings, which may not be available on acceptable terms or at all and which could be dilutive to our stockholders. If we are unable to refinance our debt on acceptable terms or at all, we may be forced to dispose of hotels at inopportune times or on disadvantageous terms, which could result in losses. To the mortgages securing fourextent we cannot meet our future debt service obligations, we will risk losing to foreclosure some or all of our hotels during the last economic downturn, and we may voluntarily elect to cease making payments on additional mortgages in the future, which could reduce the number of hotels we own as well as our revenues and could affect our ability to raise equity or debt financing in the future or violate covenants in our debt agreements.
During the past economic crisis, we undertook a series of actions to manage the sources and uses of our funds in an effort to navigate through challenging market conditions while still pursuing opportunities to create long-term stockholder value. In this effort, we attempted to proactively address value and cash flow deficits among certain of our mortgaged hotels, with a goal of enhancing stockholder value through loan amendments, or in certain instances, consensual transfers of hotel properties to the lenders in satisfaction of the related debt, some of which resulted in impairment charges. The loans secured by these hotels, subject to certain customary exceptions, were non-recourse to us. We may continue to proactively address value and cash flow deficits in a similar manner as necessary and appropriate.
We had approximately $3.7 billion of mortgage debt outstanding as of December 31, 2017. We may face issues with these loans or with other loans or borrowings that we incur in the future, some of which issues may be beyondpledged to secure our control, including our ability to service payment obligations from the cash flow of the applicable hotel, or the inability to refinance existing debt at the applicable maturity date. In such event, we may elect to default on the applicable loan and, as a result, the lenders would have the right to exercise various remedies under the loan documents, which would include foreclosure on the applicable hotels. Any such defaults, whether voluntary or involuntary, could result in a default under our other debt agreements, could have an adverse effect on our ability to raise equity or debt capital, could increase the cost of such capital or could otherwise have an adverse effect on our business, results of operations or financial condition.obligation.
Covenants, “cash trap” provisions or other terms in our loan agreementsmortgage loans, as well as any future credit facility, could limit our flexibility and adversely affect our financial condition or our qualification as a REIT.
Some of our loan agreements contain financial and other covenants. If we violate covenants in any debt agreements, 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 also prohibit us from borrowing unused amounts under our lines of credit, even if repayment of some or all the borrowings is not required. In any event,addition, financial covenants under our current or future debt obligations could impair our planned business strategies by limiting our ability to borrow beyond certain amounts or for certain purposes.
Some of our loan agreements also contain cash trap provisions that are triggered if the performance of our hotels decline. When these provisions are triggered, substantially all of the profit generated by our hotels is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. Cash is not distributed to us at any time after the cash trap provisions have been triggered until we have cured performance issues. This could affect our liquidity and our ability to make distributions to our stockholders. If we are not able to make distributions to our stockholders, we may not qualify as a REIT.
There is refinancing risk associated with our debt.
We finance our long-term growth and liquidity needs with debt financings having staggered maturities, and use variable-rate debt or a mix of fixed and variable-rate debt as appropriate based on favorable interest rates, principal amortization and other

terms. In the event that we do not have sufficient funds to repay the debt at the maturity of these loans, we will need to refinance this debt. If the credit environment is constrained at the time of our debt maturities, we would have a very difficult time refinancing debt. When we refinance our debt, prevailing interest rates and other factors may result in paying a greater amount of debt service, which will adversely affect our cash flow, and, consequently, our cash available for distribution to our stockholders. If we are unable to refinance our debt on acceptable terms, we may be forced to choose from a number of unfavorable options. These options include agreeing to otherwise unfavorable financing terms on one or more of our unencumbered assets, selling one or more hotels on disadvantageous terms, including unattractive prices or defaulting on the mortgage and permitting the lender to foreclose. Any one of these options could have a material adverse effect on our business, financial condition, results of operations and our ability to make distributions to our stockholders. If we sell a hotel, the required loan repayment may exceed the sale proceeds.
Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment.an investment in our company.
We may use various derivative financial instruments, including derivatives, to provide a level of protection against interest rate increases and other risks, but no hedging strategy can protect us completely. These instruments involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes or other risks and that a court could rule that such agreements are not legally enforceable. These instruments may also generate income that may not be treated as qualifying REIT income. In addition, the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. Moreover, hedging strategies involve transaction and other costs. We cannot assure you that our hedging strategy and the

derivatives instruments that we use will adequately offset the risk of interest rate volatility or other risks or that our hedging transactions will not result in losses that may reduce the overall return on your investment.
We may be adversely affected by changes in LIBOR reporting practices, the method in which LIBOR is determined or the use of alternative reference rates.
As of December 31, 2019, we had approximately $3.8 billion of variable interest rate debt as well as interest rate derivatives including caps and floors that are indexed to the London Interbank Offered Rate (“LIBOR”). In July 2017, the United Kingdom regulator that regulates LIBOR announced its intention to phase out LIBOR rates by the end of 2021. The Alternative Reference Rates Committee (“ARRC”), a steering committee comprised of large U.S. financial institutions, has proposed replacing USD-LIBOR with a new index calculated by short-term repurchase agreements, the Secured Overnight Financing Rate (“SOFR”). At this time, no consensus exists as to what rate or rates may become accepted alternatives to LIBOR, and it is impossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the administrator of LIBOR, whether LIBOR rates will cease to be published or supported before or after 2021 or whether any additional reforms to LIBOR may be enacted in the United Kingdom or elsewhere. Such developments and any other legal or regulatory changes in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination and, in certain situations, could result in LIBOR no longer being determined and published. If a published U.S. dollar LIBOR rate is unavailable after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S. dollar LIBOR was available in its current form. Further, the same costs and risks that may lead to the unavailability of U.S. dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine. Any of these proposals or consequences could have a material adverse effect on our financing costs, and as a result, our financial condition, operating results and cash flows.
RISKS RELATED TO HOTEL INVESTMENTS
We are subject to general risks associated with operating hotels.
Our hotels and hotels underlying our mortgage and mezzanine loans are subject to various operating risks common to the hotel industry, many of which are beyond our control, including, among others, the following:
adverse effects of the novel strain of coronavirus (COVID-19), including a potential general reduction in business and personal travel and potential travel restrictions in regions where our hotels are located;
competition from other hotel properties in our markets;
over-building of hotels in our markets, which results in increased supply and adversely affects occupancy and revenues at our hotels;
dependence on business and commercial travelers and tourism;

increases in operating costs due to inflation, increased energy costs and other factors that may not be offset by increased room rates;
changes in interest rates and in the availability, cost and terms of debt financing;
increases in assessed property taxes from changes in valuation or real estate tax rates;
increases in the cost of property insurance;
changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;
unforeseen events beyond our control, such as terrorist attacks, travel related health concerns which could reduce travel, including pandemics and epidemics such as H1N1 influenza (swine flu), avian flu, SARS, and the Zika virus, MERS and other future outbreaks of infectious diseases, imposition of taxes or surcharges by regulatory authorities, travel-related accidents, travel infrastructure interruptions and unusual weather patterns, including natural disasters such as wildfires, hurricanes, tsunamis or earthquakes;
adverse effects of international, national, regional and local economic and market conditions and increases in energy costs or labor costs and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists;
adverse effects of a downturn in the lodging industry;
political instability;
travel restrictions (whether government-imposed or voluntary); and
risks generally associated with the ownership of hotel properties and real estate, as we discuss in more detail below.
These factors could adversely affect our hotel revenues and expenses, as well as the hotels underlying our mortgage and mezzanine loans, which in turn could adversely affect our financial condition, results of operations, the market price of our common stock and our ability to make distributions to our stockholders.
FourThe outbreak of the novel coronavirus (COVID-19) has significantly impacted our occupancy rates and RevPar.
Our business has been adversely affected by the impact of, and the public perception of a risk of, a pandemic disease. In December 2019, a novel strain of coronavirus (COVID-19) was identified in Wuhan, China, which has subsequently spread to other regions of the world, and has resulted in increased travel restrictions and extended shutdown of certain businesses in affected regions. As discussed further below in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, since late February, we have experienced a significant decline in occupancy and RevPAR and we expect the occupancy and RevPAR reduction associated with the novel coronavirus (COVID-19) to continue as we are recording significant reservation cancellations as well as a significant reduction in new reservations relative to prior expectations. A continued outbreak of the virus in the U.S. would likely further reduce travel and demand at our hotels. A prolonged occurrence of the virus may result in health or other government authorities imposing restrictions on travel or other market impacts. The hotel industry and our portfolio are already experiencing the postponement or cancellation of business conferences and similar events. Additionally, the public perception of a risk of a pandemic or media coverage of these diseases, or public perception of health risks linked to perceived regional food and beverage safety, particularly if focused on regions in which our hotels are located, may adversely affect us by reducing demand for our hotels. Currently, no vaccines have been developed, and there can be no assurance that an effective vaccine can be discovered in time to protect against a potential pandemic. Any of these events could result in a sustained, significant drop in demand for our hotels and could have a material adverse effect on us.
Declines in or disruptions to the travel industry could adversely affect our business and financial performance.
Our business and financial performance are affected by the health of the worldwide travel industry. Travel expenditures are sensitive to personal and business-related discretionary spending levels, tending to decline or grow more slowly during economic downturns, as well as to disruptions due to other factors, including those discussed below. Decreased travel expenditures could reduce the demand for our services, thereby causing a reduction in revenue. For example, during regional or global recessions, domestic and global economic conditions can deteriorate rapidly, resulting in increased unemployment and a reduction in expenditures for both business and leisure travelers. A slower spending on the services we provide could have a negative impact on our revenue growth.
Other factors that could negatively affect our business include: terrorist incidents and threats and associated heightened travel security measures; political and regional strife; acts of God such as earthquakes, hurricanes, fires, floods, volcanoes and other natural disasters; war; concerns with or threats of pandemics, contagious diseases or health epidemics, such as the novel strain of coronavirus (COVID-19), Ebola, H1N1 influenza (swine flu), MERS, SARs, avian flu, the Zika virus or similar outbreaks; environmental disasters; lengthy power outages; increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes; fluctuations in hotel supply, occupancy and ADR; changes to visa and immigration requirements

or border control policies; imposition of taxes or surcharges by regulatory authorities; and increases in gasoline and other fuel prices.
Because these events or concerns, and the full impact of their effects, are largely unpredictable, they can dramatically and suddenly affect travel behavior by consumers and decrease demand. Any decrease in demand, depending on its scope and duration, together with any future issues affecting travel safety, could significantly and adversely affect our business, working capital and financial performance over the short and long-term. In addition, the disruption of the existing travel plans of a significant number of travelers upon the occurrence of certain events, such as severe weather conditions, actual or threatened terrorist activity, war or travel-related health events, could result in significant additional costs and decrease our revenues, in each case, leading to constrained liquidity.
Some of our hotels are subject to ground leases; if we are found to be in breach of a ground lease or are unable to renew a ground lease, our business could be materially and adversely affected.
FourSome of our hotels are on land subject to ground leases. Accordingly, we only own a long-term leasehold or similar interest in those four hotels. If we are found to be in breach of a ground lease, we could lose the right to use the hotel. In addition, unless we can purchase a fee interest in the underlying land and improvements or extend the terms of these leases before their expiration, we will lose our right to operate these properties and our interest in the improvements upon expiration of the leases. We may not be able to renew any ground lease upon its expiration or if renewed, the terms may not be favorable. Our ability to exercise any extension options relating to our ground leases is subject to the condition that we are not in default under the terms of the ground lease at the time that we exercise such options. If we lose the right to use a hotel due to a breach or non-renewal of the ground lease, we would be unable to derive income from such hotel and would be required to purchase an interest in another hotel to attempt to replace that income, which could materially and adversely affect our business, operating results and prospects. Our ability to refinance a hotel property subject to a ground lease may be impacted as the lease term declines.
We may have to make significant capital expenditures to maintain our hotel properties, and any development activities we undertake may be more costly than we anticipate.
Our hotels have an ongoing need for renovations and other capital improvements, including replacements, from time to time, of furniture, fixtures and equipment.FF&E. Managers or franchisors of our hotels also will require periodic capital improvements pursuant to the management agreements or as a condition of maintaining franchise licenses. Generally, we are responsible for the cost of these capital improvements. We may also develop hotel properties, timeshare units or other alternate uses of portions of our existing properties, including the development of retail, residential, office or apartments, including through joint ventures. Such renovation and development involves substantial risks, including:
construction cost overruns and delays;

the disruption of operations and displacement of revenue at operating hotels, including revenue lost while rooms, restaurants or meeting space under renovation are out of service;
the cost of funding renovations or developments and inability to obtain financing on attractive terms;
the return on our investment in these capital improvements or developments failing to meet expectations;
governmental restrictions on the nature or size of a project;
inability to obtain all necessary zoning, land use, building, occupancy, and construction permits;
loss of substantial investment in a development project if a project is abandoned before completion;
acts of God such as earthquakes, hurricanes, floods or fires that could adversely affect a project;
environmental problems; and
disputes with franchisors or propertyhotel managers regarding compliance with relevant franchise agreements or management agreements.
If we have insufficient cash flow from operations to fund needed capital expenditures, then we will need to obtain additional debt or equity financingto fund future capital improvements, and we may not be able to meet the loan covenants in any financing obtained to fund the new development, creating default risks.
In addition, to the extent that developments are conducted through joint ventures, this creates additional risks, including the possibility that our partners may not meet their financial obligations or could have or develop business interests, policies or objectives that are inconsistent with ours. See “Our joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturers.”

Any of the above factors could affect adversely our and our partners’ ability to complete the developments on schedule and along the scope that currently is contemplated, or to achieve the intended value of these projects. For these reasons, there can be no assurances as to the value to be realized by the company from these transactions or any future similar transactions.
The hotel business is seasonal, which affects our results of operations from quarter to quarter.
The hotel industry is seasonal in nature. This seasonality can cause quarterly fluctuations in our financial condition and operating results, including in any distributions on our common stock. Our quarterly operating results may be adversely affected by factors outside our control, including weather conditions and poor economic factors in certain markets in which we operate. We can provide no assurances that our cash flows will be sufficient to offset any shortfalls that occur as a result of these fluctuations. As a result, we may have to reduce distributions or enter into short-term borrowings in certain quarters in order to make distributions to our stockholders, and we can provide no assurances that such borrowings will be available on favorable terms, if at all.
The cyclical nature of the lodging industry may cause fluctuations in our operating performance, which could have a material adverse effect on us.
The lodging industry historically has been highly cyclical in nature. Fluctuations in lodging demand and, therefore, hotel operating performance, are caused largely by general economic and local market conditions, which subsequently affect levels of business and leisure travel. In addition to general economic conditions, new hotel room supply is an important factor that can affect the lodging industry’s performance, and overbuilding has the potential to further exacerbate the negative impact of an economic recession. Room rates and occupancy, and thus RevPAR, tend to increase when demand growth exceeds supply growth. We can provide no assurances regarding whether, or the extent to which, lodging demand will rebound or whether any such rebound will be sustained.exceed supply and if so, for what period of time. An adverse change in lodging fundamentals could result in returns that are substantially below our expectations or result in losses, which could have a material adverse effect on us.
Many real estate costs are fixed, even if revenue from our hotels decreases.
Many costs, such as real estate taxes, insurance premiums and maintenance costs, generally are not reduced even when a hotel is not fully occupied, room rates decrease or other circumstances cause a reduction in revenues. In addition, newly acquired or renovated hotels may not produce the revenues we anticipate immediately, or at all, and the hotel'shotel’s operating cash flow may be insufficient to pay the operating expenses and debt service associated with these new hotels. If we are unable to offset real estate costs with sufficient revenues across our portfolio, we may be adversely affected.

Our operating expenses may increase in the future which could cause us to raise our room rates, which may deplete room occupancy, or cause us to realize lower net operating income as a result of increased expenses that are not offset by increased room rates, in either case decreasing our cash flow and our operating results.
Operating expenses, such as expenses for fuel, utilities, labor and insurance, are not fixed and may increase in the future. To the extent such increases affect our room rates and therefore our room occupancy at our lodging properties, our cash flow and operating results may be negatively affected.
The increasing use of Internet travel intermediaries by consumers may adversely affect our profitability.
Some of our hotel rooms are booked through Internet travel intermediaries, including, but not limited to, Travelocity.com, Expedia.com and Priceline.com.intermediaries. As Internet bookings increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from our management companies. Moreover, some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. These intermediaries may hope that consumers will eventually develop brand loyalties to their reservations system rather than to the brands under which our properties are franchised. Although most of the business for our hotels is expected to be derived from traditional channels, if the amount of sales made through Internet intermediaries increases significantly, room revenuesrooms revenue may be lower than expected, and we may be adversely affected.
We may be adversely affected by increased use of business-related technology, which may reduce the need for business-related travel.
The increased use of teleconference and video-conference technology by businesses could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location. To the extent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases, hotel room demand may decrease and we may be adversely affected.

Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs.
The hotel properties that we own or may acquire are or may be subject to unknown or contingent liabilities for which we may have no recourse, or only limited recourse, against the sellers. In general, the representations and warranties provided under the transaction agreements related to the sales of the hotel properties may not survive the closing of the transactions. While we will seek to require the sellers to indemnify us with respect to breaches of representations and warranties that survive, such indemnification may be limited and subject to various materiality thresholds, a significant deductible or an aggregate cap on losses. As a result, there is no guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with these hotels may exceed our expectations, and we may experience other unanticipated adverse effects, all of which may adversely affect our financial condition, results of operations, the market price of our common stock and our ability to make distributions to our stockholders.
Future terrorist attacks or changes in terror alert levels could materially and adversely affect us.
Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U.S. travel and hospitality industries since 2001, often disproportionately to the effect on the overall economy. The extent of the impact that actual or threatened terrorist attacks in the U.S. or elsewhere could have on domestic and international travel and our business in particular cannot be determined, but any such attacks or the threat of such attacks could have a material adverse effect on travel and hotel demand, our ability to finance our business and our ability to insure our hotels, which could materially adversely affect us.
During 2017,2019, approximately 10%11% of our total hotel revenue was generated from nine hotels located in the Washington D.C. areas, areasarea, one of several key U.S. markets considered vulnerable to terrorist attack. Our financial and operating performance may be adversely affected by potential terrorist attacks. Terrorist attacks in the future may cause our results to differ materially from anticipated results. Hotels we own in other market locations may be subject to this risk as well.
We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.
Our managers, including Remington Hotels, a subsidiary of Ashford Inc., and unaffiliated third-party managers are responsible for hiring and maintaining the labor force at each of our hotels. Although we do not directly employ or manage employees at our hotels, we still are subject to many of the costs and risks generally associated with the hotel labor force, particularly at those hotels with unionized labor. From time to time, hotel operations may be disrupted as a result of strikes, lockouts, public demonstrations or other negative actions and publicity. We also may incur increased legal costs and indirect labor costs as a result of contract disputes involving our managers and their labor force or other events. The resolution of labor disputes or re-negotiated labor

contracts could lead to increased labor costs, a significant component of our hotel operating costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. We do not have the ability to affect the outcome of these negotiations. Our third party managers may also be unable to hire quality personnel to adequately staff hotel departments, which could result in a sub-standard level of service to hotel guests and hotel operations.
Hotels where our managers have collective bargaining agreements with their employees are more highly affected by labor force activities than others. The resolution of labor disputes or re-negotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs. Furthermore, labor agreements may limit the ability of our hotel managers to reduce the size of hotel workforces during an economic downturn because collective bargaining agreements are negotiated between the hotel managers and labor unions. Our ability, if any, to have any material impact on the outcome of these negotiations is restricted by and dependent on the individual management agreement covering a specific property, and we may have little ability to control the outcome of these negotiations.
In addition, changes in labor laws may negatively impact us. For example, the implementation of new occupational health and safety regulations, minimum wage laws, and overtime, working conditions status and citizenship requirements and the Department of Labor’s proposed regulations expanding the scope of non-exempt employees under the Fair Labor Standards Act to increase the entitlement to overtime pay could significantly increase the cost of labor in the workforce, which would increase the operating costs of our hotel properties and may have a material adverse effect on us.

RISKS RELATED TO CONFLICTS OF INTEREST
Our agreements with our external advisor, as well as our mutual exclusivity agreement and management agreements with Remington LodgingHotels and Premier, subsidiaries of Ashford Inc., were not negotiated on an arm’s-length basis, and we may pursue less vigorous enforcement of their terms because of conflicts of interest with certain of our executive officers and directors and key employees of our advisor.
Because each of our executive officers are also key employees of our advisor, or its affiliatesAshford LLC, a subsidiary of Ashford Inc. and have ownership interests in our advisorAshford Inc. and because ourthe chairman of our board has an ownership interest in Remington Lodging,Ashford Inc., our advisory agreement, as well as our master hotel management agreement and hotel management mutual exclusivity agreement with Remington Hotels, a subsidiary of Ashford Inc., and our master project management agreement and project management mutual exclusivity agreement with Remington LodgingPremier, a subsidiary of Ashford Inc., were not negotiated on an arm’s-length basis, and we did not have the benefit of arm’s-length negotiations of the type normally conducted with an unaffiliated third party. As a result, the terms, including fees and other amounts payable, may not be as favorable to us as an arm’s-length agreement. Furthermore, we may choose not to enforce, or to enforce less vigorously, our rights under these agreements because of our desire to maintain our ongoing relationship with our advisor and its subsidiaries (including Ashford LLC, Remington Lodging.Hotels and Premier).
The termination fee payable to our advisor significantly increases the cost to us of terminating our advisory agreement, thereby effectively limiting our ability to terminate our advisor without cause and could make a change of control transaction less likely or the terms thereof less attractive to us and to our stockholders.
The initial term of our advisory agreement with our advisor is 10 years from the effective date of the advisory agreement, with automatic five-year renewal terms thereafter unless previously terminated. Our board will review our advisor’s performance and fees annually and, following the 10 year10-year initial term the advisory agreement may be terminated by us with the payment of the termination fee described below and 180 days’ prior notice upon the affirmative vote of at least two-thirds of our independent directors based upon a good faith finding that either: (1) there has been unsatisfactory performance by our advisor that is materially detrimental to us and our subsidiaries taken as a whole,whole; or (2) the base fee and/or incentive fee is not fair (and our advisor does not offer to negotiate a lower fee that a majority of our independent directors determines is fair). Additionally, if there is a change of control transaction, we will have the right to terminate the advisory agreement with the payment of the termination fee described below. If we terminate or do not renew the advisory agreement without cause, including pursuant to clauses (1) or (2) above (following a contractual renegotiation process in the case of clause (2) above) or upon a change of control, we will be required to pay our advisor a termination fee equal to:
(A) 1.1 multiplied by the greater of (i) 12 times the net earnings of our advisor for the 12 month period preceding the termination date of the advisory agreement oragreement; (ii) the earnings multiple (calculated as our advisor’s total enterprise value on the trading day immediately preceding the day the termination notice is given to our advisor divided by our advisor’s most recently reported adjusted EBITDA) for our advisor’s common stock for the 12 month period preceding the termination date of the advisory agreement multiplied by the net earnings of our advisor for the 12 month period preceding the termination date of the advisory agreement; or (iii) the simple average of the earnings multiples for each of the three fiscal years preceding the termination of the advisory agreement (calculated as our advisor’s total enterprise value on the last trading day of each of the three preceding fiscal years divided by, in each case, our advisor’s adjusted EBITDA for the same periods), multiplied by the net earnings of our advisor for the 12 month period preceding the termination date of the advisory agreement,agreement; plus
(B) an additional amount such that the total net amount received by our advisor after the reduction by state and U.S. federal income taxes at an assumed combined rate of 40% on the sum of the amounts described in (A) and (B) shall equal the amount described in (A).
Any such termination fee will be payable on or before the termination date. The termination fee makes it more difficult for us to terminate our advisory agreement even if our board determines that there has been unsatisfactory performance or unfair fees. These provisions significantly increase the cost to us of terminating our advisory agreement, thereby limiting our ability to terminate our advisor without cause.
Our advisor manages other entities and may direct attractive investment opportunities away from us. If we change our investment guidelines, our advisor is not restricted from advising clients with similar investment guidelines.
Certain of ourOur executive officers also serve as key employees and as officers of our advisor and Ashford Prime,Braemar, and will continue to do so. Furthermore, Mr. Monty J. Bennett, our chairman, is also the chief executive officer, chairman and chairmana significant stockholder of our advisor and the chairman of Ashford Prime.Braemar. Our advisory agreement requires our advisor to present investments that satisfy our investment guidelines to us before presenting them to Ashford PrimeBraemar or any future client of our advisor. Additionally, in the future our advisor may advise other clients, some of which may have investment guidelines substantially similar to ours.

Some portfolio investment opportunities may include hotels that satisfy our investment objectives as well as hotels that satisfy the investment objectives of Ashford PrimeBraemar or other entities advised by our advisor. If the portfolio cannot be equitably divided, our advisor will necessarily have to make a determination as to which entity will be presented with the opportunity. In such a circumstance, our advisory agreement requires our advisor to allocate portfolio investment opportunities between us, Ashford PrimeBraemar or other entities advised by our advisor in a fair and equitable manner, consistent with our, Ashford Prime’sBraemar’s and such other entities’ investment objectives. In making this determination, our advisor, using substantial discretion, will consider the investment strategy and guidelines of each entity with respect to acquisition of properties, portfolio concentrations, tax consequences, regulatory restrictions, liquidity requirements and other factors deemed appropriate. In making the allocation determination, our advisor has no obligation to make any such investment opportunity available to us. Further, our advisor and Ashford PrimeBraemar have agreed that any new investment opportunities that satisfy our investment guidelines will be presented to our board of directors; however, our board will have only ten business days to make a determination with respect to such opportunity prior to it being available to Ashford Prime.Braemar. The above mentioned dual responsibilities may create conflicts of interest for our officers which could result in decisions or allocations of investments that may benefit one entity more than the other.
Our advisor and its key employees, who are Ashford Prime’s,Braemar’s, Ashford Inc.’s and our executive officers, face competing demands relating to their time and this may adversely affect our operations.
We rely on our advisor and its employees for the day-to-day operation of our business. Certain key employees of our advisor are executive officers of Ashford PrimeBraemar and Ashford Inc. Because our advisor’s key employees have duties to Ashford PrimeBraemar and Ashford Inc., as well as to our company, we do not have their undivided attention and they face conflicts in allocating their time and resources between our company, Ashford PrimeBraemar and Ashford Inc. Our advisor may also manage other entities in the future. During turbulent market conditions or other times when we need focused support and assistance from our advisor, other entities for which our advisor also acts as an external advisor will likewise require greater focus and attention as well, placing competing high levels of demand on the limited time and resources of our advisor’s key employees. Additionally, activist investors have, and in the future, may commence campaigns seeking to influence other entities advised by our advisor to take particular actions favored by the activist or gain representation on the board of directors of such entities, which could result in additional disruption and diversion of management'smanagement’s attention. We may not receive the necessary support and assistance we require or would otherwise receive if we were internally managed by persons working exclusively for us.
Our business could be negatively affected as a result of actions by activist stockholders.
Campaigns by stockholders to effect changes in publicly traded companies are sometimes led by activist investors through various corporate actions, including proxy contests. Responding to actions by activist investors can be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees. Stockholder activism could create perceived uncertainties as to our future direction, which could result in the loss of potential business opportunities and make it more difficult to attract and retain qualified personnel and business partners. Furthermore, the election of individuals to our board of directors with a specific agenda could adversely affect our ability to effectively and timely implement our strategic plans.
Conflicts of interest could result in our management acting other than in our stockholders’ best interest.
Conflicts of interest in general and specifically relating to Ashford Inc. and its subsidiaries (including Ashford LLC, Remington LodgingHotels and Premier) may lead to management decisions that are not in the stockholders’ best interest. The Chairmanchairman of our board of directors, Mr. Monty J. Bennett, serves asis the Chief Executive Officerchairman, chief executive officer and a significant stockholder of Remington LodgingAshford Inc. and Mr. Archie Bennett, Jr., who is our Chairman Emeritus, serves as Chairmanchairman emeritus, is a significant stockholder of the board of directors of Remington Lodging.Ashford Inc. Prior to its acquisition by Ashford Inc. on November 6, 2019, Messrs. Archie Bennett, Jr. and Monty J. Bennett beneficially ownowned 100% of Remington Lodging, which, asLodging. As of December 31, 2017,2019, Remington Hotels managed 8280 of our 120117 hotel properties and the WorldQuest condominium properties;properties and provides related services, including property management servicesother services.
As of December 31, 2019, Mr. Monty J. Bennett and project management services.Mr. Archie Bennett, Jr. together owned approximately 353,457 shares of Ashford Inc. common stock, which represented an approximate 16.0% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which was exercisable (at an exercise price of $117.50 per share) into an additional approximate 3,991,191 shares of Ashford Inc. common stock, which if exercised would have increased the Bennetts’ ownership interest in Ashford Inc. to 70.1%. The 18,758,600 Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts.
Messrs. Archie Bennett, Jr. and Monty J. Bennett’s ownership interests in, and Mr. Monty J. Bennett’s management obligations to, Remington LodgingAshford Inc. present them with conflicts of interest in making management decisions related to the commercial arrangements between us and Remington Lodging, andAshford Inc. Mr. Monty J. Bennett'sBennett’s management obligations to Remington Lodging reducesAshford Inc. (and his obligations to Braemar, where he also serves as chairman of the board of directors) reduce the time and effort he spends on Ashford.us. Our board of directors has adopted a policy that requires all material approvals, actions or decisions to which we have the right to make under the master hotel management agreementsagreement with Remington LodgingHotels and the master project management agreement with Premier be approved

by a majority or, in certain circumstances, all of our independent directors. However, given the authority and/or operational latitude provided to Remington LodgingHotels under the master hotel management agreementsagreement and to which we are a party, Messrs. ArchiePremier under the master project management agreement, and Mr. Monty J. Bennett as officersthe chairman and chief executive officer of Remington Lodging,Ashford Inc., could take actions or make decisions that are not in our stockholders’ best interest or that are otherwise inconsistent with theirthe obligations to us under the master hotel management agreement or our obligations under the applicable franchise agreements.master project management agreement.
Holders of units in our operating partnership, including members of our management team, may suffer adverse tax consequences upon our sale of certain properties. Therefore, holders of units, either directly or indirectly, including Messrs. Archie Bennett, Jr. and Monty J. Bennett, Mr. David Brooks, our Chief Transaction Officer and General Counsel, or Mr. Mark Nunneley, our Chief Accounting Officer, may have different objectives regarding the appropriate pricing and timing of a particular property’s sale.

These officers and directors of ours may influence us to sell, not sell, or refinance certain properties, even if such actions or inactions might be financially advantageous to our stockholders, or to enter into tax deferred exchanges with the proceeds of such sales when such a reinvestment might not otherwise be in our best interest.
We are a party to a master hotel management agreement and ana hotel management exclusivity agreement with Remington Lodging,Hotels and a master project management agreement and a project management exclusivity agreement with Premier, which describes the terms of Remington Lodging’sHotels’ and Premier’s, respectively, services to our hotels, as well as any future hotels we may acquire that may or may not be property managed by Remington Lodging.Hotels or project managed by Premier. The exclusivity agreementagreements requires us to engage Remington Lodging,Hotels for hotel management and Premier for project management, respectively, unless, in each case, our independent directors eithereither: (i) unanimously vote to hire a different manager or developer,developer; or (ii) by a majority vote, elect not to engage Remington LodgingHotels or Premier, as the case may be, because they have determined that special circumstances exist or that, based on Remington Lodging’sHotels’ or Premier’s prior performance, another manager or developer could perform the duties materially better. As the solesignificant owners of Remington Lodging,Ashford Inc., which would receive any development, management, and management termination fees payable by us under the management agreement,agreements, Mr. Monty J. Bennett, and to a lesser extent, Mr. Archie Bennett, Jr., in his role as Chairman Emeritus,chairman emeritus, may influence our decisions to sell, acquire, or develop hotels when it is not in the best interests of our stockholders to do so.
Remington’sAshford Inc.’s ability to exercise significant influence over the determination of the competitive set for any hotels managed by Remington Hotels could artificially enhance the perception of the performance of a hotel, making it more difficult to use managers other than Remington Hotels for future properties.
Our hotel management mutual exclusivity agreement with Remington requires us to engage Remington Hotels to manage all future properties that we acquire, to the extent we have the right or control the right to direct such matters, unless our independent directors eithereither: (i) unanimously vote not to hire Remington Hotels or (ii) based on special circumstances or past performance, by a majority vote, elect not to engage Remington Hotels because they have determined, in their reasonable business judgment, that it would be in our best interest not to engage Remington Hotels or that another manager or developer could perform the duties materially better. Under our master hotel management agreement with Remington Hotels, we have the right to terminate Remington Hotels based on the performance of the applicable hotel, subject to the payment of a termination fee. The determination of performance is based on the applicable hotel’s gross operating profit margin and its RevPAR penetration index, which provides the relative revenue per room generated by a specified property as compared to its competitive set. For each hotel managed by Remington Hotels, its competitive set will consist of a small group of hotels in the relevant market that we and Remington Hotels believe are comparable for purposes of benchmarking the performance of such hotel. Remington Hotels will have significant influence over the determination of the competitive set for any of our hotels managed by Remington Hotels, and as such could artificially enhance the perception of the performance of a hotel by selecting a competitive set that is not performing well or is not comparable to the Remington-managedRemington Hotels-managed hotel, thereby making it more difficult for us to elect not to use Remington Hotels for future hotel management.
Under the terms of our hotel management mutual exclusivity agreement with Remington Hotels, Remington Hotels may be able to pursue lodging investment opportunities that compete with us.
Pursuant to the terms of our hotel management mutual exclusivity agreement with Remington Hotels, if investment opportunities that satisfy our investment criteria are identified by Remington Hotels or its affiliates, Remington Hotels will give us a written notice and description of the investment opportunity. We will have 10 business days to either accept or reject the investment opportunity. If we reject the opportunity, Remington Hotels may then pursue such investment opportunity, subject to a right of first refusal in favor of Ashford Prime,Braemar, pursuant to an existing agreement between Ashford PrimeBraemar and Remington Hotels, on materially the same terms and conditions as offered to us. If we were to reject such an investment opportunity, either Ashford PrimeBraemar or Remington Hotels could pursue the opportunity and compete with us. In such a case, Mr. Monty J. Bennett, our chairman, in his capacity as chairman of Ashford PrimeBraemar or chief executive officer of RemingtonAshford Inc. could be in a position of directly competing with us.

Our fiduciary duties as the general partner of our operating partnership could create conflicts of interest, which may impede business decisions that could benefit our stockholders.
We, as the general partner of our operating partnership, have fiduciary duties to the other limited partners in our operating partnership, the discharge of which may conflict with the interests of our stockholders. The limited partners of our operating partnership have agreed that, in the event of a conflict in the fiduciary duties owed by us to our stockholders and, in our capacity as general partner of our operating partnership, to such limited partners, we are under no obligation to give priority to the interests of such limited partners. In addition, those persons holding common units will have the right to vote on certain amendments to the operating partnership agreement (which require approval by a majority in interest of the limited partners, including us) and individually to approve certain amendments that would adversely affect their rights. These voting rights may be exercised in a manner that conflicts with the interests of our stockholders. For example, we are unable to modify the rights of limited partners to receive distributions as set forth in the operating partnership agreement in a manner that adversely affects their rights without their consent, even though such modification might be in the best interest of our stockholders.
In addition, conflicts may arise when the interests of our stockholders and the limited partners of our operating partnership diverge, particularly in circumstances in which there may be an adverse tax consequence to the limited partners. Tax consequences

to holders of common units upon a sale or refinancing of our properties may cause the interests of the key employees of our advisor (who are also our executive officers and have ownership interests in our operating partnership) to differ from our stockholders.
Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with respect to our activities.
In order to avoid any actual or perceived conflicts of interest with our directors or officers or our advisor’s employees, we adopted a conflicts of interest policy to address specifically some of the conflicts relating to our activities. Although under this policy the approval of a majority of our disinterested directors is required to approve any transaction, agreement or relationship in which any of our directors or officers or our advisor or it has an interest, there is no assurance that this policy will be adequate to address all of the conflicts that may arise or will addressresolve such conflicts in a manner that is favorable to us.
RISKS RELATED TO DERIVATIVE TRANSACTIONS
We have engaged in and may continue to engage in derivative transactions, which can limit our gains and expose us to losses.
We have entered into and may continue to enter into hedging transactions toto: (i) attempt to take advantage of changes in prevailing interest rates,rates; (ii) protect our portfolio of mortgage assets from interest rate fluctuations,fluctuations; (iii) protect us from the effects of interest rate fluctuations on floating-rate debt,debt; (iv) protect us from the risk of fluctuations in the financial and capital markets,markets; or (v) preserve net cash in the event of a major downturn in the economy. Our hedging transactions may include entering into interest rate swap agreements, interest rate cap or floor agreements or flooridor and corridor agreements, credit default swaps and purchasing or selling futures contracts, purchasing or selling put and call options on securities or securities underlying futures contracts, or entering into forward rate agreements. Hedging activities may not have the desired beneficial impact on our results of operations or financial condition. Volatile fluctuations in market conditions could cause these instruments to become ineffective. Any gains or losses associated with these instruments are reported in our earnings each period. No hedging activity can completely insulate us from the risks inherent in our business.
Credit default hedging could fail to protect us or adversely affect us because if a swap counterparty cannot perform under the terms of our credit default swap, we may not receive payments due under such agreement and, thus, we may lose any potential benefit associated with such credit default swap. Additionally, we may also risk the loss of any cash collateral we have pledged to secure our obligations under such credit default swaps if the counterparty becomes insolvent or files for bankruptcy.
Moreover, interest rate hedging could fail to protect us or adversely affect us because, among other things:
available interest rate hedging may not correspond directly with the interest rate risk for which protections is sought;
the duration of the hedge may not match the duration of the related liability;
the party owing money in the hedging transaction may default on its obligation to pay;
the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and
the value of derivatives used for hedging may be adjusted from time to time in accordance with generally accepted accounting principles ("GAAP"(“GAAP”) to reflect changes in fair value and such downward adjustments, or “mark-to-market loss,” would reduce our stockholders’ equity.

Hedging involves both risks and costs, including transaction costs, which may reduce our overall returns on our investments. These costs increase as the period covered by the hedging relationship increases and during periods of rising and volatile interest rates. These costs will also limit the amount of cash available for distributions to stockholders. We generally intend to hedge to the extent management determines it is in our best interest given the cost of such hedging transactions as compared to the potential economic returns or protections offered. The REIT qualification rules may limit our ability to enter into hedging transactions by requiring us to limit our income and assets from hedges. If we are unable to hedge effectively because of the REIT rules, we will face greater interest rate exposure than may be commercially prudent.
We are subject to the risk of default or insolvency by the hospitality entities underlying our investments.
The leveraged capital structure of the hospitality entities underlying our investments will increase their exposure to adverse economic factors (such as rising interest rates, competitive pressures, downturns in the economy or deterioration in the condition of the real estate industry) and to the risk of unforeseen events. If an underlying entity cannot generate adequate cash flow to meet such entity’s debt obligations (which may include leveraged obligations in excess of its aggregate assets), it may default on its loan agreements or be forced into bankruptcy. As a result, we may suffer a partial or total loss of the capital we have invested in the securities and other investments of such entity.

The derivatives provisions of the Dodd-Frank Act and related rules could have an adverse effect on our ability to use derivative instruments to reduce the negative effect of interest rate fluctuations on our results of operations and liquidity, credit default risks and other risks associated with our business.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) establishes federal oversight and regulation of the over-the-counter derivatives market and entities, including us, that participate in that market. As required by the Dodd-Frank Act, the Commodities Futures Trading Commission (the “CFTC”), the SEC and other regulators have adopted certain rules implementing the swaps regulatory provisions of the Dodd-Frank Act and are in the process of adopting other rules to implement those provisions. Numerous provisions of the Dodd-Frank Act and the CFTC’s rules relating to derivatives that qualify as “swaps” thereunder apply or may apply to the derivatives to which we are or may become a counterparty. Under such statutory provisions and the CFTC’s rules, we must clear on a derivatives clearing organization any over-the-counter swap we enter into that is within a class of swaps designated for clearing by CFTC rule and execute trades in such cleared swap on an exchange if the swap is accepted for trading on the exchange unless such swap is exempt from such mandatory clearing and trade execution requirements. We may qualify for and intend to elect the end-user exception from those requirements for swaps we enter to hedge our commercial risks and that are subject to the mandatory clearing and trade execution requirements. If we are required to clear or voluntarily elect to clear any swaps we enter into, those swaps will be governed by standardized agreements and we will have to post margin with respect to such swaps. To date, the CFTC has designated only certain types of interest rate swaps and credit default swaps for clearing and trade execution. Although we believe that none of the interest rate swaps and credit default swaps to which we are currently party fall within those designated types of swaps, we may enter into swaps in the future that will be subject to the mandatory clearing and trade execution requirements and subject to the risks described.
Rules recently adopted by banking regulators and the CFTC in accordance with a requirement of the Dodd-Frank Act require regulated financial institutions and swap dealers and major swap participants that are not regulated financial institutions to collect margin with respect to uncleared swaps to which they are parties and to which financial end users, among others, are their counterparties. We will qualify as a financial end user for purposes of such margin rules. We will not have to post initial margin with respect to our uncleared swaps under the new rules because we do not have material swaps exposure as defined in the new rules. However, we will be required to post variation margin (most likely in the form of cash collateral) with respect to each of our uncleared swaps subject to the new margin rules in an amount equal to the cumulative decrease in the mark-to-market value of such swap to our counterparty as of any date of determination from the value of such swap as of the date of the swap’s execution. The SEC has proposed margin rules for security-based swaps to which regulated financial institutions are not counterparties. Those proposed rules differ from the CFTC’s margin rules, but the final form that those rules will take and their effect is uncertain at this time.
The Dodd-Frank Act has caused certain market participants, and may cause other market participants, including the counterparties to our derivative instruments, to spin off some of their derivatives activities to separate entities. Those entities may not be as creditworthy as the historical counterparties to our derivatives.
Some of the rules required to implement the swaps-related provisions of the Dodd-Frank Act remain to be adopted, and the CFTC has, from time to time, issued and may in the future issue interpretations and no-action letters interpreting, and clarifying the application of, those provisions and the related rules or delaying compliance with those provisions and rules. As a result, it is not possible at this time to predict with certainty the full effects of the Dodd-Frank Act, the CFTC’s rules and the SEC’s rules on us and the timing of such effects.

The Dodd-Frank Act and the rules adopted thereunder could significantly increase the cost of derivative contracts (including from swap recordkeeping and reporting requirements and through requirements to post margin with respect to our swaps, which could adversely affect our available liquidity), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties. If we reduce our use of derivatives as a result of the Dodd-Frank Act and the related rules, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures and to pay dividends to our stockholders. Any of these consequences could have a material adverse effect on our consolidated financial position, results of operations and cash flows.
RISKS RELATED TO INVESTMENTS IN SECURITIES, MORTGAGES AND MEZZANINE LOANS
Our earnings are dependent, in part, upon the performance of our investment portfolio.
To the extent permitted by the Internal Revenue Code, we may invest in and own securities of other public companies and REITs (including Ashford Inc. and Ashford Prime)Braemar). To the extent that the value of those investments declines or those investments do not provide an attractive return, our earnings and cash flow could be adversely affected.

Debt investments that are not United States government insured involve risk of loss.
As part of our business strategy, we may originate or acquire lodging-related uninsured and mortgage assets, including mezzanine loans. While holding these interests, we are subject to risks of borrower defaults, bankruptcies, fraud and related losses, and special hazard losses that are not covered by standard hazard insurance. Also, costs of financing the mortgage loans could exceed returns on the mortgage loans. In the event of any default under mortgage loans held by us, we will bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount of the mortgage loan. We suffered significant impairment charges with respect to our investments in mortgage loans in 2009 and 2010. The value and the price of our securities may be adversely affected.
We may invest in non-recourse loans, which will limit our recovery to the value of the mortgaged property.
Our mortgage and mezzanine loan assets have typically been non-recourse. With respect to non-recourse mortgage loan assets, in the event of a borrower default, the specific mortgaged property and other assets, if any, pledged to secure the relevant mortgage loan, may be less than the amount owed under the mortgage loan. As to those mortgage loan assets that provide for recourse against the borrower and its assets generally, we cannot assure you that the recourse will provide a recovery in respect of a defaulted mortgage loan greater than the liquidation value of the mortgaged property securing that mortgage loan.
Investment yields affect our decision whether to originate or purchase investments and the price offered for such investments.
In making any investment, we consider the expected yield of the investment and the factors that may influence the yield actually obtained on such investment. These considerations affect our decision whether to originate or purchase an investment and the price offered for that investment. No assurances can be given that we can make an accurate assessment of the yield to be produced by an investment. Many factors beyond our control are likely to influence the yield on the investments, including, but not limited to, competitive conditions in the local real estate market, local and general economic conditions, and the quality of management of the underlying property. Our inability to accurately assess investment yields may result in our purchasing assets that do not perform as well as expected, which may adversely affect the price of our securities.
Volatility of values of mortgaged properties may adversely affect our mortgage loans.
Lodging property values and net operating income derived from lodging properties are subject to volatility and may be affected adversely by a number of factors, including the risk factors described herein relating to general economic conditions, operating lodging properties, and owning real estate investments. In the event its net operating income decreases, one of our borrowers may have difficulty paying our mortgage loan, which could result in losses to us. In addition, decreases in property values will reduce the value of the collateral and the potential proceeds available to our borrowers to repay our mortgage loans, which could also cause us to suffer losses.
Mezzanine loans involve greater risks of loss than senior loans secured by income-producing properties.
We may continue to make and acquire mezzanine loans. These types of loans are considered to involve a higher degree of risk than long-term senior mortgage lending secured by income-producing real property due to a variety of factors, including the loan being entirely unsecured or, if secured, becoming unsecured as a result of foreclosure by the senior lender. We may not recover some or all of our investment in these loans. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans resulting in less equity in the property and increasing the risk of loss of principal.

The assets associated with certain of our derivative transactions do not constitute qualified REIT assets and the related income will not constitute qualified REIT income. Significant fluctuations in the value of such assets or the related income could jeopardize our REIT status or result in additional tax liabilities.
We have entered into certain derivative transactions to protect against interest rate risks and credit default risks not specifically associated with debt incurred to acquire qualified REIT assets. The REIT provisions of the Internal Revenue Code limit our income and assets in each year from such derivative transactions. Failure to comply with the asset or income limitation within the REIT provisions of the Internal Revenue Code could result in penalty taxes or loss of our REIT status. If we elect to contribute the non-qualifying derivatives into a taxable REIT subsidiaryTRS to preserve our REIT status, such an action would result in any income from such transactions being subject to U.S. federal income taxation.
Our prior investment performance is not indicative of future results.
The performance of our prior investments is not necessarily indicative of the results that can be expected for the investments to be made by our investment subsidiary.subsidiaries. On any given investment, total loss of the investment is possible. Although our management team has experience and has had success in making investments in real estate-related lodging debt and hotel assets, the past performance of these investments is not necessarily indicative of the results of our future investments.

Our investment portfolio will contain investments concentrated in a single industry and will not be fully diversified.
Our investment subsidiary wasWe have formed subsidiaries for the primary purpose of acquiring public securities and other investments of lodging-related entities. As such, our investment portfolio will contain investments concentrated in a single industry and may not be fully diversified by asset class, geographic region or other criteria, which will expose us to significant loss due to concentration risk. Investors have no assurance that the degree of diversification in our investment portfolio will increase at any time in the future.
The values of our investments are affected by the U.S. credit and financial markets and, as such, may fluctuate.
The U.S. credit and financial markets may experience severe dislocations and liquidity disruptions. The values of our investments are likely to be sensitive to the volatility of the U.S. credit and financial markets, and, to the extent that turmoil in the U.S. credit and financial markets continues or intensifies,occurs, such volatility has the potential to materially affect the value of our investment portfolio.
We may invest in securities for which there is no liquid market, and we may be unable to dispose of such securities at the time or in the manner that may be most favorable to us, which may adversely affect our business.
We may invest in securities for which there is no liquid market or which may be subject to legal and other restrictions on resale or otherwise be less liquid than publicly traded securities generally. The relative illiquidity of these investments may make it difficult for us to sell these investments when desired. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we had previously recorded these investments. Our investments may occasionally be subject to contractual or legal restrictions on resale or will be otherwise illiquid due to the fact that there is no established trading market for such securities, or such trading market is thinly traded. The relative illiquidity of such investments may make it difficult for us to dispose of them at a favorable price, and, as a result, we may suffer losses.
RISKS RELATED TO THE REAL ESTATE INDUSTRY
Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our hotel properties and harm our financial condition.
Because real estate investments are relatively illiquid, our ability to sell promptly one or more hotel properties or mortgage loans in our portfolio for reasonable prices in response to changing economic, financial, and investment conditions is limited.
The real estate market is affected by many factors that are beyond our control, including:
adverse changes in international, national, regional and local economic and market conditions;
changes in interest rates and in the availability, cost, and terms of debt financing;
the ongoing need for capital improvements, particularly in older structures;
changes in operating expenses; and
civil unrest, acts of war or terrorism, epidemics, and acts of God, including earthquakes, floods and other natural disasters, which may result in uninsured and underinsured losses.
We may decide to sell hotel properties or loans in the future. We cannot predict whether we will be able to sell any hotel property or loan for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser

would be acceptable to us. We may sell a property at a loss as compared to carrying value. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a hotel property or loan. Because we intend toWe may offer more flexible terms on our mortgage loans than some providers of commercial mortgage loans, and as a result, we may have more difficulty selling or participating our loans to secondary purchasers than would these more traditional lenders.
We may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct those defects or to make those improvements. In acquiring a hotel property, we may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These and other factors could impede our ability to respond to adverse changes in the performance of our hotel properties or a need for liquidity.
Increases in property taxes would increase our operating costs, reduce our income and adversely affect our ability to make distributions to our stockholders.
Each of our hotel properties will be subject to real and personal property taxes. These taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. If property taxes increase, our financial condition, results

of operations and our ability to make distributions to our stockholders could be materially and adversely affected and the market price of our common and/or preferred stock could decline.
The costs of compliance with or liabilities under environmental laws may harm our operating results.
Operating expenses at our hotels could be higher than anticipated due to the cost of complying with existing or future environmental laws and regulations. In addition, our hotel properties and properties underlying our loan assets may be subject to environmental liabilities. An owner of real property, or a lender with respect to a propertyparty that exercises control over the property, can face liability for environmental contamination created by the presence or discharge of hazardous substances on the property. We may face liability regardless of:
our knowledge of the contamination;
the timing of the contamination;
the cause of the contamination; or
the party responsible for the contamination.
There may be environmental problems associated with our hotel properties or properties underlying our loan assets of which we are unaware. Some of our hotel properties or the properties underlying our loan assets use, or may have used in the past, underground tanks for the storage of petroleum-based or waste products that could create a potential for release of hazardous substances. If environmental contamination exists on a hotel property, we could become subject to strict, joint and several liabilities for the contamination if we own the property or if we foreclose on the property or otherwise have control over the property.
The presence of hazardous substances on a property we own or have made a loan with respect to may adversely affect our ability to sell, on favorable terms or at all, or foreclose on the property, and we may incur substantial remediation costs. The discovery of material environmental liabilities at our properties or properties underlying our loan assets could subject us to unanticipated significant costs.
We generally have environmental insurance policies on each of our owned properties, and we intend to obtain environmental insurance for any other properties that we may acquire. However, if environmental liabilities are discovered during the underwriting of the insurance policies for any property that we may acquire in the future, we may be unable to obtain insurance coverage for the liabilities at commercially reasonable rates or at all, and we may experience losses. In addition, we generally do not require our borrowers to obtain environmental insurance on the properties they own that secure their loans from us.
Numerous treaties, laws and regulations have been enacted to regulate or limit carbon emissions. Changes in the regulations and legislation relating to climate change, and complying with such laws and regulations, may require us to make significant investments in our hotels and could result in increased energy costs at our properties.
Our properties and the properties underlying our mortgage loans may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. Some of the properties in our portfolio may contain microbial matter such as mold and mildew. As a result, the presence of significant mold at any of our properties or the properties underlying our

loan assets could require us or our borrowers to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, the presence of significant mold could expose us or our borrowers to liability from hotel guests, hotel employees, and others if property damage or health concerns arise.
Compliance with the Americans with Disabilities Act and fire, safety, and other regulations may require us or our borrowers to incur substantial costs.
All of our properties and properties underlying our mortgage loans are required to comply with the Americans with Disabilities Act of 1990, as amended (the “ADA”). The ADA requires that “public accommodations” such as hotels be made accessible to people with disabilities. Compliance with the ADA’s requirements could require removal of access barriers and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. In addition, we and our borrowers are required to operate our properties in compliance with fire and safety regulations, building codes, and other land use regulations as they may be adopted by governmental agencies and bodies and become applicable to our properties. Any requirement to make substantial modifications to our hotel properties, whether to comply with the ADA or other changes in governmental rules and regulations, could be costly.

We may obtain only limited warranties when we purchase a property and would have only limited recourse if our due diligence did not identify any issues that lower the value of our property, which could adversely affect our financial condition and ability to make distributions to our stockholders.
The seller ofWe may acquire a property may sell suchhotel property in its “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing.closing, or provide a cap on the amount of damages we can recover. The purchase of properties with limited warranties increases the risk that we may lose some or all our invested capital in the property as well as the loss of income from that property.
We may experience uninsured or underinsured losses.
We have property and casualty insurance with respect to our hotel properties and other insurance, in each case, with loss limits and coverage thresholds deemed reasonable by our management team (and with the intent to satisfy the requirements of lenders and franchisors). In doing so, we have made decisions with respect to what deductibles, policy limits, and terms are reasonable based on management’s experience, our risk profile, the loss history of our propertyhotel managers and our properties, the nature of our properties and our businesses, our loss prevention efforts, and the cost of insurance.insurance and other factors.
Various types of catastrophic losses may not be insurable or may not be economically insurable. In the event of a substantial loss, our insurance coverage may not cover the full current market value or replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations, and other factors might cause insurance proceeds to be insufficient to fully replace or renovate a hotel after it has been damaged or destroyed. Accordingly, there can be no assurance that:
the insurance coverage thresholds that we have obtained will fully protect us against insurable losses (i.e., losses may exceed coverage limits);
we will not incur large deductibles that will adversely affect our earnings;
we will not incur losses from risks that are not insurable or that are not economically insurable; or
current coverage thresholds will continue to be available at reasonable rates.
In the future, we may choose not to maintain terrorism or other insurance policies on any of our properties. As a result, one or more large uninsured or underinsured losses could have a material adverse effect on us.
Each of our current lenders requires us to maintain certain insurance coverage thresholds, and we anticipate that future lenders will have similar requirements. We believe that we have complied with the insurance maintenance requirements under the current governing loan documents and we intend to comply with any such requirements in any future loan documents. However, a lender may disagree, in which case the lender could obtain additional coverage thresholds and seek payment from us, or declare us in default under the loan documents. In the former case, we could spend more for insurance than we otherwise deem reasonable or necessary or, in the latter case, subject us to a foreclosure on hotels collateralizingsecuring one or more loans. In addition, a material casualty to one or more hotels collateralizingsecuring loans may result in the insurance company applying to the outstanding loan balance insurance proceeds that otherwise would be available to repair the damage caused by the casualty, which would require us to fund the repairs through other sources, or the lender foreclosing on the hotels if there is a material loss that is not insured.

RISKS RELATED TO OUR STATUS AS A REIT
If we do not qualify as a REIT, we will be subject to tax as a regular corporation and could face substantial tax liability.
We conduct operations so as to qualify as a REIT under the Internal Revenue Code. However, qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only a limited number of judicial or administrative interpretations exist. Even a technical or inadvertent mistake could jeopardize our REIT status.status or we may be required to rely on a REIT “savings clause.” If we were to rely on a REIT “savings clause,” we would have to pay a penalty tax, which could be material. Due to the gain we recognized as a result of the spin-off of Ashford Prime,Braemar, if Ashford PrimeBraemar were to fail to qualify as a REIT for 2013, we may have failed to qualify as a REIT for 2013 and subsequent taxable years. Furthermore, new tax legislation, administrative guidance, or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. The Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”) contained a number of changes to the Internal Revenue Code provisions applicable to REITs (with various effective dates), including, among others, (1) a reduction from 25% to 20% of the maximum permitted value of a REIT’s assets that can consist of stock or securities of one or more TRSs, (2) treatment of debt instruments issued by publicly offered REITs as “real estate assets” (however, unless such a debt instrument is secured by a mortgage or otherwise would have qualified as a real estate asset under prior law, (i) interest income and gain from such a debt instrument is not qualifying income for purposes of one of the REIT gross income tests, the 75% gross income test, and (ii) all such debt instruments may represent no more than 25% of the value of a REIT’s assets), and (3) a new 100% excise tax that applies

to the extent it is determined that a REIT has been undercharged for certain services provided by a taxable REIT subsidiary. We expect that the changes will not materially impact our operations, but will continue to monitor as regulatory guidance is issued.
If we fail to qualify as a REIT in any tax year, then:
we would be taxed as a regular domestic corporation, which, among other things, means being unable to deduct distributions to our stockholders in computing taxable income and being subject to U.S. federal income tax on our taxable income at regular corporate rates;
we would also be subject to federal alternative minimum tax for taxable years beginning before January 1, 2018, and, possibly, increased state and local income taxes;
any resulting tax liability could be substantial and would reduce the amount of cash available for distribution to stockholders; and
unless we were entitled to relief under applicable statutory provisions, we would be disqualified from treatment as a REIT for the subsequent four taxable years following the year that we lost our qualification, and, thus, our cash available for distribution to stockholders could be reduced for each of the years during which we did not qualify as a REIT.
If, as a result of covenants applicable to our future debt, we are restricted from making distributions to our stockholders, we may be unable to make distributions necessary for us to avoid U.S. federal corporate income and excise taxes and to qualify and maintain our qualification as a REIT, which could materially and adversely affect us. In addition, if we fail to qualify as a REIT, we will not be required to make distributions to stockholders to maintain our tax status. As a result of all of these factors, our failure to qualify as a REIT could impair our ability to raise capital, expand our business, and make distributions to our stockholders and could adversely affect the value of our securities.
Even if we qualify and remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.
Even if we qualify and remain qualified for taxation as a REIT, we may be subject to certain federal, state, and local taxes on our income and assets. For example:
We will be required to pay tax on undistributed REIT taxable income.
If we have net income from the disposition of foreclosure property held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay tax on that income at the highest corporate rate.
If we sell a property in a “prohibited transaction,” our gain from the sale would be subject to a 100% penalty tax.
Each of our taxable REIT subsidiariesTRSs is a fully taxable corporation and will be subject to federal and state taxes on its income.
We may continue to experience increases in our state and local income tax burden. Over the past several years, certain state and local taxing authorities have significantly changed their income tax regimes in order to raise revenues. The changes enacted that have increased our state and local income tax burden include the taxation of modified gross receipts (as opposed to net taxable income), the suspension of and/or limitation on the use of net operating loss deductions, increases in tax rates and fees, the addition of surcharges, and the taxation of our partnership income at the entity level. Facing mounting budget deficits, more state and local taxing authorities have indicated that they are going to revise their income tax regimes in this fashion and/or eliminate certain federally allowed tax deductions such as the REIT dividends paid deduction.
Failure to make required distributions would subject us to U.S. federal corporate income tax.
We intend to operate in a manner so as to allowthat allows us to continue to qualify as a REIT for U.S. federal income tax purposes. In order to continue to qualify as a REIT, we generally are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, each year to our stockholders. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our REIT taxable income, we will be subject to U.S.

federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under the Internal Revenue Code.
Our TRS lessee structure increases our overall tax liability.
Our TRS lessees are subject to federal, state and local income tax on their taxable income, which consists of the revenues from the hotel properties leased by our TRS lessees, net of the operating expenses for such hotel properties and rent payments to us. Accordingly, although our ownership of our TRS lessees allows us to participate in the operating income from our hotel properties in addition to receiving fixed rent, the net operating income is fully subject to income tax. The after-tax net income of our TRS lessees is available for distribution to us.

If our leases with our TRS lessees are not respected as true leases for U.S. federal income tax purposes, we would fail to qualify as a REIT.
To qualify as a REIT, we are required to satisfy two gross income tests, pursuant to which specified percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to the hotel leases with our TRS lessees, which constitutes substantially all of our gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement. We have structured our leases, and intend to structure any future leases, so that the leases will be respected as true leases for U.S. federal income tax purposes, but the IRS may not agree with this characterization. If the leases were not respected as true leases for U.S. federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs and likely would fail to qualify as a REIT.
Our ownership of TRSs is limited and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.
A REIT may own up to 100% of the stock of one or more TRSs. A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross operating income from hotels that are operated by eligible independent contractors pursuant to hotel management agreements. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 25% (20% with respect to taxable years beginning after December 31, 2017)20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Finally, for taxable years ending after December 31, 2015, the 100% excise tax also applies to the underpricing of services by a TRS to its parent REIT in contexts where the services are unrelated to services for REIT tenants.
Our TRSs are subject to federal, foreign, state and local income tax on their taxable income, and their after-tax net income is available for distribution to us but is not required to be distributed to us. We believe that the aggregate value of the stock and securities of our TRSs is less than 20% of the value of our total assets (including our TRS stock and securities).
We monitor the value of our respective investments in our TRSs for the purpose of ensuring compliance with TRS ownership limitations. In addition, we scrutinize all of our transactions with our TRSs to ensure that they are entered into on arm’s-length terms to avoid incurring the 100% excise tax described above. For example, in determining the amounts payable by our TRSs under our leases, we engaged a third party to prepare transfer pricing studies to ascertain whether the lease terms we established are on an arm’s-length basis as required by applicable Treasury Regulations. However the receipt of a transfer pricing study does not prevent the IRS from challenging the arm’s length nature of the lease terms between a REIT and its TRS lessees. Consequently, there can be no assurance that we will be able to avoid application of the 100% excise tax discussed above.
If our hotel managers, including Ashford Hospitality Services, LLC and its subsidiaries (including Remington Hotels) do not qualify as “eligible independent contractors,” we would fail to qualify as a REIT.
Rent paid by a lessee that is a “related party tenant” of ours is not qualifying income for purposes of the two gross income tests applicable to REITs. We lease all of our hotels to our TRS lessees. A TRS lessee will not be treated as a “related party tenant,” and will not be treated as directly operating a lodging facility, which is prohibited, to the extent the TRS lessee leases properties from us that are managed by an “eligible independent contractor.”
We believe that the rent paid by our TRS lessees is qualifying income for purposes of the REIT gross income tests and that our TRSs qualify to be treated as TRSs for U.S. federal income tax purposes, but there can be no assurance that the IRS will not challenge this treatment or that a court would not sustain such a challenge. If the IRS were successful in challenging this treatment, it is possible that we would fail to meet the asset tests applicable to REITs and substantially all of our income would fail to qualify for the gross income tests. If we failed to meet either the asset or gross income

tests, we would likely lose our REIT qualification for U.S. federal income tax purposes, unless certain relief provisionsof the REIT “savings clauses” applied.
If our hotel managers, including Ashford Hospitality Services, LLC (“AHS”) and its subsidiaries (including Remington Hotels), do not qualify as “eligible independent contractors,” we would fail to qualify as a REIT. Each of the hotel management companies that enters into a management contract with our TRS lessees must qualify as an “eligible independent contractor” under the REIT rules in order for the rent paid to us by our TRS lessees to be qualifying income for our REIT income test requirements. Among other requirements, in order to qualify as an eligible independent contractor a manager must not own more than 35% of our outstanding shares (by value) and no person or group of persons can own more than 35% of our outstanding shares and the ownership interests of the manager, taking into account only owners of more than 5% of our shares and, with respect to ownership interests in such managers that are publicly-traded, only holders of more than 5% of such ownership interests.

Complex ownership attribution rules apply for purposes of these 35% thresholds. Although we intend to monitor ownership of our shares by our propertyhotel managers and their owners, there can be no assurance that these ownership levels will not be exceeded. Additionally, we and AHS and its subsidiaries, including Remington Hotels, must comply with the provisions of the private letter ruling we obtained from the IRS in connection with Ashford Inc.’s acquisition of Remington Hotels to ensure that AHS and its subsidiaries, including Remington Hotels, continue to qualify as “eligible independent contractors.”
Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
The maximum U.S. federal income tax rate applicable to “qualified dividend income” payable to U.S. stockholders that are taxed at individual rates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced maximum rate on qualified dividend income. However, under the Tax Cuts and Jobs Act a non-corporate taxpayer may deduct 20% of ordinary REIT dividends that are not “capital gain dividends” or “qualified dividend income” resulting in an effective maximum U.S. federal income tax rate of 29.6%. Individuals, trusts and estates whose income exceeds certain thresholds are also subject to a 3.8% Medicare tax on dividends received from us. The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.
If our operating partnership failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT and would be subject to higher taxes and have less cash available for distribution to our stockholders and suffer other adverse consequences.
We believe that our operating partnership qualifies to be treated as a partnership for U.S. federal income tax purposes. As a partnership, our operating partnership is not subject to U.S. federal income tax on its income. Instead, each of its partners, including us, is required to pay tax on its allocable share of the operating partnership'spartnership’s income. No assurance can be provided, however, that the IRS will not challenge its status as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our operating partnership as a corporation for tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, cease to qualify as a REIT. Also, the failure of our operating partnership to qualify as a partnership would cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
Note that although partnerships have traditionally not been subject to U.S. federal income tax at the entity level as described above, new audit rules, currently scheduled to become effective for tax years ending after December 31, 2017, will generally apply to the partnership. Under the new rules, unless an entity elects otherwise, taxes arising from audit adjustments are required to be paid by the entity rather than by its partners or members. We may utilize exceptions available under the new provisions (including any changes) and Treasury Regulations so that the partners, to the fullest extent possible, rather than the partnership itself, will be liable for any taxes arising from audit adjustments to the issuing entity’s taxable income. ItOne such exception is unclear to what extent these elections willapply an elective alternative method under which the additional taxes resulting from the adjustment are assessed from the affected partners (often referred to as a “push-out election”), subject to a higher rate of interest than otherwise would apply. When a push-out election causes a partner that is itself a partnership to be availableassessed with its share of such additional taxes from the adjustment, such partnership may cause such additional taxes to the partnership and how any such elections may affect the procedural rules availablebe pushed out to challenge any audit adjustment that would otherwise be available in the absence of any such elections. Proposed temporary and finalits own partners. In addition, Treasury Regulations have been promulgated implementing portions of these new partnership audit rules, butprovide that a partner that is a REIT may be able to use deficiency dividend procedures with respect to such adjustments. Many questions remain as to how the applicationpartnership audit rules will apply, and it is not clear at this time what effect these rules will have on us. However, it is possible that these changes could increase the U.S. federal income tax, interest, and/or penalties otherwise borne by us in the event of the rules.a U.S. federal income tax audit of a subsidiary partnership (such as our operating partnership).
Investors are urged to consult with their tax advisors regarding the possible effect of the new rules.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities.
To qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders, and the ownership of our stock. We may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. We may elect to pay dividends on our common stock in cash or a combination of cash and shares of securities as permitted under U.S. federal income tax laws governing REIT distribution requirements. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
Complying with REIT requirements may limit our ability to hedge effectively.
The REIT provisions of the Internal Revenue Code may limit our ability to hedge mortgage securities and related borrowings by requiring us to limit our income and assets in each year from certain hedges, together with any other income not generated from qualified real estate assets, to no more than 25% of our gross income. In addition, we must limit our aggregate income from nonqualified hedging transactions, from our provision of services, and from other non-qualifying sources to no more than 5% of our annual gross income. As a result, we may have to limit our use of advantageous hedging techniques. This could result in greater risks associated with changes in interest rates than we would otherwise want to incur. However, for transactions that we enter into to protect against interest rate risks on debt incurred to acquire qualified REIT assets and for which we identify as hedges for tax purposes, any associated hedging income is excluded from the 95% income test and the 75% income test applicable to a REIT.

In addition, for taxable years ending after December 31, 2015, similar rules apply to income from positions that primarily manage risk with respect to a prior hedge entered into by a REIT in connection with the extinguishment or disposal (in whole or in part) of the liability or asset related to such prior hedge, to the extent the new position qualifies as a hedge or would so qualify if the hedged position were ordinary property. If we were to violate the 25% or 5% limitations, we may have to pay a penalty tax equal to the amount of income in excess of those limitations multiplied by a fraction intended to reflect our profitability. If we fail to satisfy the REIT gross income tests, unless our failure was due to reasonable cause and not due to willful neglect such that a REIT “savings clause” applied, we could lose our REIT status for U.S. federal income tax purposes.
Complying with REIT requirements may force us to liquidate otherwise attractive investments.
To qualify as a REIT, we must also ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities, and qualified REIT real estate assets. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% with respect to taxable years beginning after December 31, 2017)20% of the value of our total assets can be represented by securities of one or more taxable REIT subsidiaries,TRSs, and no more than 25% of the value of our total assets can be represented by certain publicly offered REIT debt instruments.
If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.
Complying with REIT requirements may force us to borrow to make distributions to our stockholders.
As a REIT, we must distribute at least 90% of our annual REIT taxable income, excluding net capital gains, (subject to certain adjustments) to our stockholders. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws.
From time to time, we may generate taxable income greater than our net income for financial reporting purposes or our taxable income may be greater than our cash flow available for distribution to our stockholders. If we do not have other funds available in these situations, we could be required to borrow funds, sell investments at disadvantageous prices, or find another alternative source of funds to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce the value of our equity. We may elect to pay dividends on our common stock in cash or a combination of cash and shares of securities as permitted under U.S. federal income tax laws governing REIT distribution requirements. To the extent that we make distributions in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), such distributions would generally be considered a return of capital for U.S. federal income tax purposes to the extent of the holder'sholder’s adjusted tax basis in its shares. A return of capital is not taxable, but it has the effect of reducing the holder'sholder’s adjusted

tax basis in its investment. To the extent that distributions exceed the adjusted tax basis of a holder'sholder’s shares, they will be treated as gain from the sale or exchange of such stock.
We may in the future choose to pay taxable dividends in our shares of our common stock instead of cash, in which case stockholders may be required to pay income taxes in excess of the cash dividends they receive.
We may distribute taxable dividends that are payable in cash and common stock at the election of each stockholder, subject to certain limitations, including that the cash portion be at least 20% of the total distribution.
If we mademake a taxable dividend payable in cash and common stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the shares of common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our sharescommon stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in shares of common stock. In addition, if we made a taxable dividend payable in cash and our common stock and a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock. We do not currently intend to pay taxable dividends of our common stock and cash, although we may choose to do so in the future.

The prohibited transactions tax may limit our ability to dispose of our properties.
A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited transaction tax equal to 100% of net gain upon a disposition of real property. Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, we cannot assure you that we can comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. Consequently, we may choose not to engage in certain sales of our properties or may conduct such sales through our TRS, which would be subject to federal and state income taxation.
The ability of our board of directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholdersstockholders.
Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. If we cease to qualify as a REIT, we would become subject to U.S. federal and state and local income taxes on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on the total stockholder return received by our stockholders.
We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our securities.
At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations. The Tax Cuts and Jobs Act signed into law by the President on December 22, 2017 made significant changes to the U.S. federal income tax rules for taxation of individuals and corporations. The Tax Cuts and Jobs Act makes numerous other changes to the tax rules that do not affect REITs directly but may affect our shareholders and may indirectly affect us. These changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. It is possible that future legislation would result in a REIT having fewer advantages, and it could become more advantageous for a company that invests in real estate to elect to be taxed, for U.S. federal income tax purposes, as a corporation.
If Ashford PrimeBraemar failed to qualify as a REIT for 2013, it would significantly affect our ability to maintain our REIT status.
For U.S. federal income tax purposes, we recorded a gain of approximately $145.7 million as a result of the spin-off of Ashford PrimeBraemar in November 2013. If Ashford PrimeBraemar qualified for taxation as a REIT for 2013, that gain was qualifying income for purposes of our 2013 REIT income tests. If, however, Ashford PrimeBraemar failed to qualify as a REIT for 2013, that gain would be non-qualifying income for purposes of the 75% gross income test. Although Ashford PrimeBraemar covenanted in the Separation and Distribution Agreement to use reasonable best efforts to qualify as a REIT in 2013, no assurance can be given that it so qualified. If Ashford PrimeBraemar failed to qualify, we would have failed our 2013 REIT income tests, which would either result in our loss of our REIT status for 2013 and the following 4 taxable years or result in a significant tax in 2013 that has not been accrued or paid and thereby would materially negatively impact our business, financial condition and potentially impair our ability to continue operating in the future.

Your investment in our securities has various federal, state, and local income tax risks that could affect the value of your investment.
We strongly urge you to consult your own tax advisor concerning the effects of federal, state, and local income tax law on an investment in our securities because of the complex nature of the tax rules applicable to REITs and their stockholders.
Our failure to qualify as a REIT would potentially give rise to a claim for damages from Ashford Prime.Braemar.
In connection with the spin-off of Ashford Prime,Braemar, which was completed in November 2013, we represented in the Separation and Distribution Agreement with Ashford PrimeBraemar that we have no knowledge of any fact or circumstance that would cause us to fail to qualify as a REIT. In the event of a breach of this representation, Ashford PrimeBraemar may be able to seek damages from us, which could have a significantly negative effect on our liquidity and results of operations.
Declines in the values of our investments may make it more difficult for us to maintain our qualification as a REIT or exemption from the Investment Company Act.
If the market value or income potential of real estate-related investments declines as a result of increased interest rates or other factors, we may need to increase our real estate-related investments and income or liquidate our non-qualifying assets in

order to maintain our REIT qualification or exemption from the Investment Company Act of 1940 (the “Investment Company Act”). If the decline in real estate asset values and/or income occurs quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of any non-qualifying assets that we may own. We may have to make investment decisions that we otherwise would not make absent the REIT and Investment Company Act considerations.
RISKS RELATED TO OUR CORPORATE STRUCTURE
Our charter, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay or prevent a change of control transaction.
Our charter contains 9.8% ownership limits. For the purpose of preserving our REIT qualification, our charter prohibits direct or constructive ownership by any person of more than (i) 9.8% of the lesser of the total number or value (whichever is more restrictive) of the outstanding shares of our common stock or (ii) 9.8% of the total number or value (whichever is more restrictive) of the outstanding shares of any class or series of our preferred stock or any other stock of our company, unless our board of directors grants a waiver.
Our charter’s constructive ownership rules are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be deemed to be constructively owned by one individual or entity. As a result, the acquisition of less than 9.8% of any class or series of our stock by an individual or entity could nevertheless cause that individual or entity to own constructively in excess of 9.8% of a class or series of outstanding stock, and thus be subject to our charter’s ownership limit. Any attempt to own or transfer shares of our stock in excess of the ownership limit without the consent of our board of directors will be void, and could result in the shares being automatically transferred to a charitable trust.
Our board of directors may create and issue a class or series of common stock or preferred stock without stockholder approval.
Our charter authorizes our board of directors to issue common stock or preferred stock in one or more classes and to establish the preferences and rights of any class of common stock or preferred stock issued. These actions can be taken without solicitingobtaining stockholder approval. Our issuance of additional classes of common stock or preferred stock issuances could have the effect of delaying or preventing someone from taking control of us, even if a change in control were in our stockholders’ best interests.
Certain provisions in the partnership agreement forof our operating partnership may delay or prevent unsolicited acquisitions of us.
Provisions in the partnership agreement forof our operating partnership may delay or make more difficult unsolicited acquisitions of us or changes in our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some stockholders might consider such proposals, if made, desirable. These provisions include, among others:
redemption rights of qualifying parties;
transfer restrictions on our common units;
the ability of the general partner in some cases to amend the partnership agreement without the consent of the limited partners; and

the right of the limited partners to consent to transfers of the general partnership interest and mergers under specified circumstances.
Because provisions contained in Maryland law and our charter may have an anti-takeover effect, investors may be prevented from receiving a “control premium” for their shares.
Provisions contained in our charter and Maryland general corporation law may have effects that delay, defer, or prevent a takeover attempt, which may prevent stockholders from receiving a “control premium” for their shares. For example, these provisions may defer or prevent tender offers for our common stock or purchases of large blocks of our common stock, thereby limiting the opportunities for our stockholders to receive a premium for their common stock over then-prevailing market prices.
These provisions include the following:
Ownership limit: The ownership limit in our charter limits related investors, including, among other things, any voting group, from acquiring over 9.8% of our common stock or any class of our preferred stock without our permission.
Classification of preferred stock: Our charter authorizes our board of directors to issue common stock or preferred stock in one or more classes and to establish the preferences and rights of any class of common stock or preferred stock issued. These actions can be taken without soliciting stockholder approval. Our common stock and preferred stock issuances could have the effect of delaying or preventing someone from taking control of us, even if a change in control were in our stockholders’ best interests.

Maryland statutory law provides that an act of a director relating to or affecting an acquisition or a potential acquisition of control of a corporation may not be subject to a higher duty or greater scrutiny than is applied to any other act of a director. Hence, directors of a Maryland corporation by statute are not required to act in certain takeover situations under the same standards of care, and are not subject to the same standards of review, as apply in Delaware and other corporate jurisdictions.
Certain other provisions of Maryland law, if they became applicable to us, could inhibit changes in control.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us under circumstances that otherwise could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of our common stock or a “control premium” for their shares or inhibit a transaction that might otherwise be viewed as being in the best interest of our stockholders. These provisions include:
“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose special stockholder voting requirements on these business combinations, unless certain fair price requirements set forth in the MGCL are satisfied; and
“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
In addition, Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions: a classified board; a two-thirds stockholder vote requirement for removal of a director; a requirement that the number of directors be fixed only by vote of the directors; a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and a requirement that the holders of at least a majority of all votes entitled to be cast request a special meeting of stockholders.
Our charter opts out of the business combination/moratorium provisions and control share provisions of the MGCL and prevents us from making any elections under Subtitle 8 of the MGCL. Because these provisions are contained in our charter, they cannot be amended unless the Board recommends the amendment and the stockholders approve the amendment. Any such amendment would require the affirmative vote of two-thirds of the outstanding voting power of our common stock.

We depend on our operating partnership and its subsidiaries for cash flow and are effectively structurally subordinated in right of payment to the obligations of our operating partnership and its subsidiaries, which could adversely affect our ability to make distributions to our stockholders.
We have no business operations of our own. Our only significant asset is and will be the general and limited partnership interests of our operating partnership. We conduct, and intend to continue to conduct, all of our business operations through our operating partnership. Accordingly, our only source of cash to pay our obligations is distributions from our operating partnership and its subsidiaries of their net earnings and cash flows. We cannot assure our stockholders that our operating partnership or its subsidiaries will be able to, or be permitted to, make distributions to us that will enable us to make distributions to our stockholders from cash flows from operations. Each of our operating partnership’s subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from such entities. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be able to satisfy the claims of our stockholders only after all of our and our operating partnership and its subsidiaries liabilities and obligations have been paid in full.
Offerings of debt securities, which would be senior to our common stock and any preferred stock upon liquidation, or equity securities, which would dilute our existing stockholders’ holdings and could be senior to our common stock for the purposes of dividend distributions, may adversely affect the market price of our common stock and any preferred stock.
We may attempt to increase our capital resources by making additional offerings of debt or equity securities, including commercial paper, medium-term notes, senior or subordinated notes, convertible securities, and classes of preferred stock or common stock or classes of preferred units. Upon liquidation, holders of our debt securities or preferred units and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of shares of preferred stock or common stock. Furthermore, holders of our debt securities and preferred stock or preferred units and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common or preferred stock or both. Our preferred stock or preferred units could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to make a dividend distribution to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings reducing the market price of our securities and diluting their securities holdings in us.
Securities eligible for future sale may have adverse effects on the market price of our securities.
We cannot predict the effect, if any, of future sales of securities, or the availability of securities for future sales, on the market price of our outstanding securities. Sales of substantial amounts of common stock, or the perception that these sales could occur, may adversely affect prevailing market prices for our securities.
We also may issue from time to time additional shares of our securities or units of our operating partnership in connection with the acquisition of properties and we may grant additional demand or piggyback registration rights in connection with these issuances. Sales of substantial amounts of our securities or the perception that such sales could occur may adversely affect the prevailing market price for our securities or may impair our ability to raise capital through a sale of additional debt or equity securities.
An increase in market interest rates may have an adverse effect on the market price of our securities.
A factor investors may consider in deciding whether to buy or sell our securities is our dividend rate as a percentage of our share or unit price relative to market interest rates. If market interest rates increase, prospective investors may desire a higher dividend or interest rate on our securities or seek securities paying higher dividends or interest. The market price of our securities is likely based on the earnings and return that we derive from our investments, income with respect to our properties, and our related distributions to stockholders and not necessarily from the market value or underlying appraised value of the properties or investments themselves. As a result, interest rate fluctuations and capital market conditions can affect the market price of our securities. For instance, if interest rates rise without an increase in our dividend rate, the market price of our common or preferred stock could decrease because potential investors may require a higher dividend yield on our common or preferred stock as market rates on interest-bearing securities, such as bonds, rise. In addition, rising interest rates would result in increased interest expense on our variable-rate debt, thereby adversely affecting cash flow and our ability to service our indebtedness and pay dividends.

Our board of directors can take many actions without stockholder approval.
Our board of directors has overall authority to oversee our operations and determine our major corporate policies. This authority includes significant flexibility. For example, our board of directors can do the following:
amend or revise at any time our dividend policy with respect to our common stock or preferred stock (including by eliminating, failing to declare, or significantly reducing dividends on these securities);
terminate our advisor under certain conditions pursuant to the advisory agreement, subject to the payment of a termination fee;
amend or revise at any time and from time to time our investment, financing, borrowing and dividend policies and our policies with respect to all other activities, including growth, debt, capitalization and operations, subject to the limitations and restrictions provided in our advisory agreement and mutual exclusivity agreement;
amend our policies with respect to conflicts of interest provided that such changes are consistent with applicable legal requirements;
subject to the terms of our charter, prevent the ownership, transfer and/or accumulation of shares in order to protect our status as a REIT or for any other reason deemed to be in the best interests of us and our stockholders;
issue additional shares without obtaining stockholder approval, which could dilute the ownership of our then-current stockholders;
amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series, without obtaining stockholder approval;
classify or reclassify any unissued shares of our common stock or preferred stock and set the preferences, rights and other terms of such classified or reclassified shares, without obtaining stockholder approval;
employ and compensate affiliates;affiliates (subject to disinterested director approval);
direct our resources toward investments that do not ultimately appreciate over time; and
determine that it is not in our best interests to attempt to qualify, or to continue to qualify, as a REIT.
Any of these actions could increase our operating expenses, impact our ability to make distributions or reduce the value of our assets without giving you, as a stockholder, the right to vote.
The ability of our board of directors to change our major policies without the consent of stockholders may not be in our stockholders’ interest.
Our board of directors determines our major policies, including policies and guidelines relating to our acquisitions, leverage, financing, growth, operations and distributions to stockholders. Our board of directors may amend or revise these and other policies and guidelines from time to time without the vote or consent of our stockholders, subject to certain limitations and restrictions provided in our advisory agreement. Accordingly, our stockholders will have limited control over changes in our policies and those changes could adversely affect our financial condition, results of operations, the market price of our stock and our ability to make distributions to our stockholders.
Our rights and the rights of our stockholders to take action against our directors and officers are limited.
Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter eliminates our directors’ and officers’ liability to us and our stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment to have been material to the cause of action. Our charter requires us to indemnify our directors and officers and to advance expenses prior to the final disposition of a proceeding to the maximum extent permitted by Maryland law for liability actually incurred in connection with any proceeding to which they may be made, or threatened to be made, a party, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was either committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property or services, or, in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, we may beare generally obligated to fund the defense costs incurred by our directors and officers.

Future issuances of securities, including our common stock and preferred stock, could reduce existing investors’ relative voting power and percentage of ownership and may dilute our share value.
Our charter authorizes the issuance of up to 400,000,000 shares of common stock and 50,000,000 shares of preferred stock. As of March 10, 2020, we had 101,998,806 shares of our common stock issued and outstanding, 2,389,393 shares of our Series D Cumulative Preferred Stock, 4,800,000 shares of our Series F Cumulative Preferred Stock, 6,200,000 shares of our Series G Cumulative Preferred Stock, 3,800,000 shares of our Series H Cumulative Preferred Stock, and 5,400,000 share of our Series I Cumulative Preferred Stock. Accordingly, we may issue up to an additional 298,001,194 shares of common stock and 27,410,607 shares of preferred stock.
Future issuances of common stock or preferred stock could decrease the relative voting power of our common stock or preferred stock and may cause substantial dilution in the ownership percentage of our then existing holders of common or preferred stock. Future issuances may have the effect of reducing investors’ relative voting power and/or diluting the net tangible book value of the shares held by our stockholders, and might have an adverse effect on any trading market for our securities. Our board of directors may designate the rights, terms and preferences of our authorized but unissued common shares or preferred shares at its discretion, including conversion and voting preferences without stockholder approval.
Item 1B.    Unresolved Staff Comments
None.

Item 2.Properties
OFFICES. We lease our headquarters located at 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254.
HOTEL PROPERTIES. As of December 31, 2017,2019, we hadheld ownership interests in 120117 hotel properties that were included in our consolidated operations, which included direct ownership in 118115 hotel properties and 85% ownership in two hotel properties through equity investments with joint venture partners. Currently, all of our hotel properties are located in the United States. The following table presents certain information related to our hotel properties:
Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2017 Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2019
Occupancy ADR RevPAROccupancy ADR RevPAR
Fee Simple Properties                                
Embassy Suites Austin, TX Full service 150
 100% 150
 84.96% $159.53
 $135.54
 Austin, TX Full service 150
 100% 150
 82.44% $159.95
 $131.86
Embassy Suites Dallas, TX Full service 150
 100
 150
 81.27% $135.47
 $110.09
 Dallas, TX Full service 150
 100
 150
 75.30% $135.30
 $101.88
Embassy Suites Herndon, VA Full service 150
 100
 150
 82.17% $157.73
 $129.60
 Herndon, VA Full service 150
 100
 150
 79.29% $172.61
 $136.86
Embassy Suites Las Vegas, NV Full service 220
 100
 220
 92.30% $133.02
 $122.78
 Las Vegas, NV Full service 220
 100
 220
 87.53% $143.40
 $125.52
Embassy Suites Flagstaff, AZ Full service 119
 100
 119
 85.54% $150.70
 $128.91
 Flagstaff, AZ Full service 119
 100
 119
 80.59% $148.90
 $120.01
Embassy Suites Houston, TX Full service 150
 100
 150
 81.01% $154.11
 $124.84
 Houston, TX Full service 150
 100
 150
 80.25% $144.39
 $115.87
Embassy Suites West Palm Beach, FL Full service 160
 100
 160
 85.50% $146.17
 $124.98
 West Palm Beach, FL Full service 160
 100
 160
 82.22% $153.53
 $126.23
Embassy Suites Philadelphia, PA Full service 263
 100
 263
 82.33% $148.10
 $121.93
 Philadelphia, PA Full service 263
 100
 263
 85.31% $157.87
 $134.68
Embassy Suites Walnut Creek, CA Full service 249
 100
 249
 82.04% $172.34
 $141.39
 Walnut Creek, CA Full service 249
 100
 249
 83.48% $181.88
 $151.83
Embassy Suites Arlington, VA Full service 267
 100
 267
 89.62% $198.16
 $177.59
 Arlington, VA Full service 269
 100
 269
 83.86% $199.28
 $167.13
Embassy Suites Portland, OR Full service 276
 100
 276
 88.59% $220.17
 $195.06
 Portland, OR Full service 276
 100
 276
 84.43% $203.80
 $172.07
Embassy Suites Santa Clara, CA Full service 257
 100
 257
 84.67% $231.32
 $195.86
 Santa Clara, CA Full service 258
 100
 258
 90.09% $255.75
 $230.40
Embassy Suites Orlando, FL Full service 174
 100
 174
 91.12% $151.05
 $137.64
 Orlando, FL Full service 174
 100
 174
 91.23% $159.06
 $145.10
Embassy Suites New York, NY Full service 310
 100
 310
 94.96% $245.75
 $233.37
Hilton Garden Inn Jacksonville, FL Select service 119
 100
 119
 73.15% $123.99
 $90.69
 Jacksonville, FL Select service 119
 100
 119
 73.55% $131.62
 $96.81
Hilton Garden Inn Austin, TX Select service 254
 100
 254
 79.33% $188.67
 $149.67
 Austin, TX Select service 254
 100
 254
 82.25% $180.31
 $148.29
Hilton Garden Inn Baltimore, MD Select service 158
 100
 158
 82.37% $117.51
 $96.79
 Baltimore, MD Select service 158
 100
 158
 72.57% $121.02
 $87.82
Hilton Garden Inn Virginia Beach, VA Select service 176
 100
 176
 84.63% $136.00
 $115.10
 Virginia Beach, VA Select service 176
 100
 176
 83.49% $143.84
 $120.10
Hilton Garden Inn Wisconsin Dells, WI Select service 128
 100
 128
 69.07% $120.89
 $83.50
Hilton Houston, TX Full service 242
 100
 242
 72.35% $120.99
 $87.53
Hilton St. Petersburg, FL Full service 333
 100
 333
 79.80% $157.33
 $125.54
Hilton Houston, TX Full service 242
 100
 242
 76.23% $128.89
 $98.25
 Santa Fe, NM Full service 158
 100
 158
 89.18% $166.24
 $148.25
Hilton St. Petersburg, FL Full service 333
 100
 333
 78.57% $152.18
 $119.57
 Bloomington, MN Full service 300
 100
 300
 76.84% $134.17
 $103.10
Hilton Santa Fe, NM Full service 158
 100
 158
 84.46% $159.55
 $134.76
 Costa Mesa, CA Full service 486
 100
 486
 78.19% $140.98
 $110.23
Hilton Bloomington, MN Full service 300
 100
 300
 82.98% $132.01
 $109.54
 Boston, MA Full service 390
 100
 390
 90.14% $251.73
 $226.93
Hilton Costa Mesa, CA Full service 486
 100
 486
 82.92% $136.59
 $113.25
 Parsippany, NJ Full service 353
 100
 353
 66.49% $169.73
 $112.86
Hilton Boston, MA Full service 390
 100
 390
 85.05% $247.06
 $210.12
 Tampa, FL Full service 238
 100
 238
 82.84% $137.97
 $114.29
Hilton Parsippany, NJ Full service 353
 100
 353
 67.45% $156.92
 $105.84
 Alexandria, VA Full service 252
 100
 252
 82.21% $184.93
 $152.03
Hilton Tampa, FL Full service 238
 100
 238
 80.95% $131.41
 $106.37
 Santa Cruz, CA Full service 178
 100
 178
 75.84% $185.71
 $140.84
Hampton Inn Lawrenceville, GA Select service 85
 100
 85
 81.81% $108.62
 $88.86
 Lawrenceville, GA Select service 85
 100
 85
 70.99% $112.30
 $79.72
Hampton Inn Evansville, IN Select service 140
 100
 140
 57.09% $112.08
 $63.99
 Evansville, IN Select service 140
 100
 140
 63.15% $107.22
 $67.71
Hampton Inn Parsippany, NJ Select service 152
 100
 152
 70.26% $137.84
 $96.85
 Parsippany, NJ Select service 152
 100
 152
 72.49% $145.88
 $105.75
Hampton Inn Buford, GA Select service 92
 100
 92
 78.96% $119.23
 $94.14
 Buford, GA Select service 92
 100
 92
 69.79% $124.18
 $86.67
Hampton Inn Phoenix, AZ Select service 106
 100
 106
 76.07% $126.66
 $96.35
 Phoenix, AZ Select service 106
 100
 106
 77.71% $126.82
 $98.56
Hampton Inn - Waterfront Pittsburgh, PA Select service 113
 100
 113
 75.09% $124.77
 $93.68
 Pittsburgh, PA Select service 113
 100
 113
 76.95% $126.45
 $97.30
Hampton Inn - Washington Pittsburgh, PA Select service 103
 100
 103
 60.85% $96.25
 $58.57
 Pittsburgh, PA Select service 103
 100
 103
 73.16% $94.25
 $68.95
Hampton Inn Columbus, OH Select service 145
 100
 145
 74.57% $143.44
 $106.97
 Columbus, OH Select service 145
 100
 145
 63.66% $144.34
 $91.88
Marriott Beverly Hills, CA Full service 260
 100
 260
 87.49% $256.88
 $224.75
 Beverly Hills, CA Full service 260
 100
 260
 88.15% $260.92
 $230.00
Marriott Durham, NC Full service 225
 100
 225
 70.67% $136.70
 $96.60
 Durham, NC Full service 225
 100
 225
 73.28% $145.86
 $106.88
Marriott Arlington, VA Full service 701
 100
 701
 78.53% $188.67
 $148.16
 Arlington, VA Full service 701
 100
 701
 77.77% $194.46
 $151.24
Marriott Bridgewater, NJ Full service 347
 100
 347
 70.17% $212.45
 $149.07
 Bridgewater, NJ Full service 347
 100
 347
 68.07% $210.77
 $143.48
Marriott Dallas, TX Full service 265
 100
 265
 75.75% $133.23
 $100.92
 Dallas, TX Full service 265
 100
 265
 75.21% $135.43
 $101.85
Marriott Fremont, CA Full service 357
 100
 357
 82.94% $183.85
 $152.49
 Fremont, CA Full service 357
 100
 357
 77.21% $198.45
 $153.22
Marriott Memphis, TN Full service 232
 100
 232
 79.54% $152.23
 $121.08
 Memphis, TN Full service 232
 100
 232
 74.55% $167.02
 $124.51
Marriott Irving, TX Full service 491
 100
 491
 76.24% $143.04
 $109.06
 Irving, TX Full service 491
 100
 491
 74.95% $154.38
 $115.71
Marriott Omaha, NE Full service 300
 100
 300
 56.11% $125.55
 $70.44

Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2017 Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2019
Occupancy ADR RevPAROccupancy ADR RevPAR
Marriott San Antonio, TX Full service 251
 100
 251
 70.33% $140.45
 $98.78
 Omaha, NE Full service 300
 100
 300
 61.68% $129.46
 $79.85
Marriott Sugarland, TX Full service 300
 100
 300
 77.48% $146.76
 $113.71
 Sugarland, TX Full service 300
 100
 300
 79.98% $136.58
 $109.24
SpringHill Suites by Marriott Jacksonville, FL Select service 102
 100
 102
 86.26% $111.95
 $96.56
 Baltimore, MD Select service 133
 100
 133
 82.49% $106.30
 $87.68
SpringHill Suites by Marriott Baltimore, MD Select service 133
 100
 133
 84.05% $110.15
 $92.58
 Kennesaw, GA Select service 90
 100
 90
 72.66% $119.88
 $87.11
SpringHill Suites by Marriott Kennesaw, GA Select service 90
 100
 90
 73.78% $120.92
 $89.22
 Buford, GA Select service 97
 100
 97
 80.67% $110.16
 $88.86
SpringHill Suites by Marriott Buford, GA Select service 97
 100
 97
 83.56% $109.32
 $91.34
 Charlotte, NC Select service 136
 100
 136
 70.07% $103.67
 $72.65
SpringHill Suites by Marriott (5)
 Centreville, VA Select service 136
 100
 136
 67.62% $98.83
 $66.83
SpringHill Suites by Marriott Charlotte, NC Select service 136
 100
 136
 71.33% $111.82
 $79.76
 Durham, NC Select service 120
 100
 120
 76.74% $111.88
 $85.86
SpringHill Suites by Marriott Durham, NC Select service 120
 100
 120
 78.56% $101.91
 $80.07
 Manhattan Beach, CA Select service 164
 100
 164
 85.89% $137.33
 $117.94
SpringHill Suites by Marriott Manhattan Beach, CA Select service 164
 100
 164
 87.27% $149.02
 $130.05
 Plymouth Meeting, PA Select service 199
 100
 199
 72.39% $111.51
 $80.72
SpringHill Suites by Marriott Plymouth Meeting, PA Select service 199
 100
 199
 72.54% $114.66
 $83.17
SpringHill Suites by Marriott (5)
 Glen Allen, VA Select service 136
 100
 136
 71.43% $99.54
 $71.10
Fairfield Inn by Marriott Kennesaw, GA Select service 86
 100
 86
 72.55% $111.70
 $81.04
 Kennesaw, GA Select service 86
 100
 86
 55.02% $103.37
 $56.88
Courtyard by Marriott Bloomington, IN Select service 117
 100
 117
 72.68% $133.67
 $97.16
 Bloomington, IN Select service 117
 100
 117
 69.61% $122.57
 $85.32
Courtyard by Marriott - Tremont Boston, MA Select service 315
 100
 315
 80.76% $227.57
 $183.78
 Boston, MA Select service 315
 100
 315
 82.17% $232.57
 $191.11
Courtyard by Marriott Columbus, IN Select service 90
 100
 90
 75.60% $110.04
 $83.19
Courtyard by Marriott Denver, CO Select service 202
 100
 202
 83.94% $133.88
 $112.38
 Columbus, IN Select service 90
 100
 90
 66.48% $112.98
 $75.11
Courtyard by Marriott Louisville, KY Select service 150
 100
 150
 77.62% $136.65
 $106.07
 Denver, CO Select service 202
 100
 202
 88.32% $150.68
 $133.08
Courtyard by Marriott Gaithersburg, MD Select service 210
 100
 210
 68.10% $147.94
 $100.74
 Louisville, KY Select service 150
 100
 150
 68.74% $143.08
 $98.35
Courtyard by Marriott Crystal City, VA Select service 272
 100
 272
 79.48% $150.61
 $119.70
 Gaithersburg, MD Select service 210
 100
 210
 72.43% $151.86
 $110.00
Courtyard by Marriott Ft. Lauderdale, FL Select service 174
 100
 174
 81.61% $127.74
 $104.25
 Crystal City, VA Select service 272
 100
 272
 74.95% $158.56
 $118.84
Courtyard by Marriott Overland Park, KS Select service 168
 100
 168
 72.88% $116.53
 $84.93
 Ft. Lauderdale, FL Select service 174
 100
 174
 78.45% $130.50
 $102.37
Courtyard by Marriott Savannah, GA Select service 156
 100
 156
 82.07% $142.28
 $116.77
 Overland Park, KS Select service 168
 100
 168
 64.45% $123.64
 $79.68
Courtyard by Marriott Foothill Ranch, CA Select service 156
 100
 156
 79.52% $132.71
 $105.53
 Foothill Ranch, CA Select service 156
 100
 156
 77.92% $136.42
 $106.30
Courtyard by Marriott Alpharetta, GA Select service 154
 100
 154
 74.43% $145.19
 $108.06
 Alpharetta, GA Select service 154
 100
 154
 68.55% $144.40
 $98.99
Courtyard by Marriott Oakland, CA Select service 156
 100
 156
 88.61% $163.67
 $145.04
 Oakland, CA Select service 156
 100
 156
 84.66% $189.40
 $160.35
Courtyard by Marriott Scottsdale, AZ Select service 180
 100
 180
 77.84% $119.90
 $93.33
 Scottsdale, AZ Select service 180
 100
 180
 82.00% $141.54
 $116.07
Courtyard by Marriott Plano, TX Select service 153
 100
 153
 72.49% $134.80
 $97.71
 Plano, TX Select service 153
 100
 153
 64.33% $148.19
 $95.33
Courtyard by Marriott Newark, CA Select service 181
 100
 181
 82.01% $164.24
 $134.68
 Newark, CA Select service 181
 100
 181
 82.65% $170.31
 $140.76
Courtyard by Marriott Manchester, CT Select service 90
 85
 77
 76.58% $135.37
 $103.66
 Manchester, CT Select service 90
 85
 77
 75.00% $133.92
 $100.44
Courtyard by Marriott Basking Ridge, NJ Select service 235
 100
 235
 66.94% $198.59
 $132.93
 Basking Ridge, NJ Select service 235
 100
 235
 68.32% $187.90
 $128.37
Courtyard by Marriott Wichita, KS Select service 128
 100
 128
 75.26% $124.19
 $93.47
 Wichita, KS Select service 128
 100
 128
 75.98% $133.04
 $101.09
Courtyard by Marriott - Billerica Boston, MA Select service 210
 100
 210
 70.80% $141.50
 $100.18
 Boston, MA Select service 210
 100
 210
 63.94% $141.71
 $90.61
Homewood Suites Pittsburgh, PA Select service 148
 100
 148
 62.27% $126.77
 $78.94
 Pittsburgh, PA Select service 148
 100
 148
 71.98% $121.96
 $87.79
Marriott Residence Inn Lake Buena Vista, FL Select service 210
 100
 210
 83.12% $135.01
 $112.23
 Lake Buena Vista, FL Select service 210
 100
 210
 73.76% $132.82
 $97.96
Marriott Residence Inn Evansville, IN Select service 78
 100
 78
 75.16% $114.41
 $86.00
 Evansville, IN Select service 78
 100
 78
 85.68% $105.06
 $90.02
Marriott Residence Inn Orlando, FL Select service 350
 100
 350
 79.33% $125.42
 $99.49
 Orlando, FL Select service 350
 100
 350
 82.51% $129.74
 $107.05
Marriott Residence Inn Falls Church, VA Select service 159
 100
 159
 78.88% $146.09
 $115.23
 Falls Church, VA Select service 159
 100
 159
 75.96% $163.70
 $124.35
Marriott Residence Inn San Diego, CA Select service 150
 100
 150
 84.96% $164.43
 $139.71
 San Diego, CA Select service 150
 100
 150
 85.61% $172.35
 $147.56
Marriott Residence Inn Salt Lake City, UT Select service 144
 100
 144
 74.91% $121.17
 $90.77
 Salt Lake City, UT Select service 144
 100
 144
 71.70% $125.87
 $90.25
Marriott Residence Inn Las Vegas, NV Select service 256
 100
 256
 85.89% $126.12
 $108.32
 Las Vegas, NV Select service 256
 100
 256
 84.56% $132.06
 $111.68
Marriott Residence Inn Phoenix, AZ Select service 200
 100
 200
 78.75% $116.66
 $91.87
 Phoenix, AZ Select service 200
 100
 200
 78.47% $122.03
 $95.76
Marriott Residence Inn Plano, TX Select service 126
 100
 126
 82.32% $114.28
 $94.08
 Plano, TX Select service 126
 100
 126
 63.90% $113.59
 $72.58
Marriott Residence Inn Newark, CA Select service 168
 100
 168
 85.63% $180.24
 $154.34
 Newark, CA Select service 168
 100
 168
 80.79% $190.62
 $154.00
Marriott Residence Inn Manchester, CT Select service 96
 85
 82
 83.94% $139.11
 $116.77
 Manchester, CT Select service 96
 85
 82
 78.78% $134.11
 $105.64
Marriott Residence Inn Jacksonville, FL Select service 120
 100
 120
 85.49% $127.93
 $109.36
 Jacksonville, FL Select service 120
 100
 120
 82.08% $134.87
 $110.70
Marriott Residence Inn Stillwater, OK Select service 101
 100
 101
 55.80% $110.21
 $61.50
 Stillwater, OK Select service 101
 100
 101
 56.03% $113.15
 $63.39
Marriott Residence Inn Tampa, FL Select service 109
 100
 109
 76.03% $159.55
 $121.31
TownePlace Suites by Marriott Manhattan Beach, CA Select service 143
 100
 143
 87.74% $139.30
 $122.22
 Manhattan Beach, CA Select service 143
 100
 143
 86.45% $136.29
 $117.83
One Ocean Atlantic Beach, FL Full service 193
 100
 193
 71.29% $209.93
 $149.66
 Atlantic Beach, FL Full service 193
 100
 193
 71.91% $214.36
 $154.14
Sheraton Hotel Ann Arbor, MI Full service 197
 100
 197
 73.89% $149.17
 $110.22
 Ann Arbor, MI Full service 197
 100
 197
 68.06% $153.36
 $104.37
Sheraton Hotel Langhorne, PA Full service 186
 100
 186
 69.41% $120.71
 $83.78
 Langhorne, PA Full service 186
 100
 186
 65.81% $127.07
 $83.63
Sheraton Hotel Minneapolis, MN Full service 220
 100
 220
 54.69% $124.86
 $68.28
Sheraton Hotel Indianapolis, IN Full service 378
 100
 378
 72.27% $140.44
 $101.49
Sheraton Hotel Anchorage, AK Full service 370
 100
 370
 68.41% $158.59
 $108.49
Sheraton Hotel San Diego, CA Full service 260
 100
 260
 75.13% $136.88
 $102.84
Hyatt Regency Coral Gables, FL Full service 254
 100
 254
 79.95% $188.77
 $150.92
Hyatt Regency Hauppauge, NY Full service 358
 100
 358
 68.27% $138.19
 $94.34

Hotel Property Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2017 Location Service Type Total Rooms % Owned Owned Rooms Year Ended December 31, 2019
Occupancy ADR RevPAROccupancy ADR RevPAR
Sheraton Hotel Minneapolis, MN Full service 220
 100
 220
 66.11% $127.50
 $84.29
Sheraton Hotel Indianapolis, IN Full service 378
 100
 378
 78.21% $131.63
 $102.95
Sheraton Hotel Anchorage, AK Full service 370
 100
 370
 70.30% $136.02
 $95.62
Sheraton Hotel San Diego, CA Full service 260
 100
 260
 83.27% $131.53
 $109.53
Hyatt Regency Coral Gables, FL Full service 253
 100
 253
 85.26% $189.43
 $161.50
Hyatt Regency Hauppauge, NY Full service 358
 100
 358
 72.86% $139.07
 $101.33
Hyatt Regency Savannah, GA Full service 351
 100
 351
 88.06% $177.04
 $155.90
 Savannah, GA Full service 351
 100
 351
 86.65% $190.57
 $165.12
Renaissance Nashville, TN Full service 673
 100
 673
 85.95% $239.34
 $205.71
 Nashville, TN Full service 673
 100
 673
 85.25% $246.53
 $210.17
Annapolis Historic Inn Annapolis, MD Full service 124
 100
 124
 63.86% $160.12
 $102.26
 Annapolis, MD Full service 124
 100
 124
 58.27% $163.09
 $95.03
Lakeway Resort & Spa Austin, TX Full service 168
 100
 168
 65.48% $173.29
 $113.47
 Austin, TX Full service 168
 100
 168
 67.50% $184.91
 $124.81
Silversmith Chicago, IL Full service 144
 100
 144
 74.78% $182.29
 $136.31
 Chicago, IL Full service 144
 100
 144
 70.67% $177.45
 $125.40
The Churchill Washington, DC Full service 173
 100
 173
 69.39% $193.50
 $134.26
 Washington, D.C. Full service 173
 100
 173
 62.45% $183.23
 $114.43
The Melrose Washington, DC Full service 240
 100
 240
 82.32% $207.57
 $170.88
 Washington, D.C. Full service 240
 100
 240
 74.64% $196.19
 $146.43
Le Pavillon New Orleans, LA Full service 226
 100
 226
 63.77% $158.50
 $101.07
 New Orleans, LA Full service 226
 100
 226
 68.49% $159.64
 $109.34
The Ashton Ft. Worth, TX Full service 39
 100
 39
 79.33% $198.30
 $157.32
 Ft. Worth, TX Full service 39
 100
 39
 72.10% $206.37
 $148.80
Westin Princeton, NJ Full service 296
 100
 296
 66.16% $155.81
 $103.09
 Princeton, NJ Full service 296
 100
 296
 68.94% $163.22
 $112.52
W Atlanta, GA Full service 237
 100
 237
 75.89% $215.28
 $163.37
 Atlanta, GA Full service 237
 100
 237
 78.17% $219.55
 $171.62
W Minneapolis, MN Full service 229
 100
 229
 83.68% $198.81
 $166.37
 Minneapolis, MN Full service 229
 100
 229
 67.39% $214.70
 $144.69
Le Meridien Minneapolis, MN Full service 60
 100
 60
 78.89% $201.85
 $159.23
 Minneapolis, MN Full service 60
 100
 60
 71.23% $205.55
 $146.42
Hotel Indigo Atlanta, GA Full service 140
 100
 140
 71.84% $141.29
 $101.50
 Atlanta, GA Full service 141
 100
 141
 73.06% $161.67
 $118.11
Ritz-Carlton Atlanta, GA Full service 444
 100
 444
 75.41% $224.56
 $169.34
 Atlanta, GA Full service 444
 100
 444
 78.42% $258.94
 $203.05
La Posada de Santa Fe Santa Fe, NM Full service 157
 100
 157
 80.91% $226.23
 $183.04
Ground Lease Properties                        
Crowne Plaza (1)
 Key West, FL Full service 160
 100
 160
 83.16% $278.50
 $231.60
Crowne Plaza (2)
 Annapolis, MD Full service 196
 100
 196
 53.05% $113.23
 $60.07
Hilton (3)
 Ft. Worth, TX Full service 294
 100
 294
 77.76% $164.53
 $127.94
Renaissance (4)
 Palm Springs, CA Full service 410
 100
 410
 67.19% $155.47
 $104.46
Crowne Plaza (1) (2)
 Key West, FL Full service 160
 100
 160
 79.47% $282.71
 $224.68
Crowne Plaza (3)
 Annapolis, MD Full service 197
 100
 197
 56.22% $116.90
 $65.73
Hilton (4)
 Ft. Worth, TX Full service 294
 100
 294
 74.04% $163.36
 $120.95
Renaissance (5)
 Palm Springs, CA Full service 410
 100
 410
 72.16% $167.12
 $120.59
Total 25,058
   25,031
 77.53% $159.26
 $123.47
 24,943
   24,916
 76.34% $168.06
 $128.29
________
(1) The ground lease expires in 2084.
(2) The Company entered into a new franchise agreement with Marriott to convert the Crowne Plaza La Concha Key West Hotel in Key West, Florida to an Autograph Collection property. Marriott International’s Autograph Collection® Hotels are a diverse portfolio of independent hotels around the world that reflect unique vision, design and environments. The agreement with Marriott calls for the Hotel to be converted to an Autograph property by July 1, 2022.
(3) The ground lease expires in 2114.
(3)(4) The ground lease expires in 2040.
(4)(5) The ground lease expires in 2059 with one 25-year extension option.
(5) These hotel properties were held for sale as of December 31, 2017. See note 5 to our consolidated financial statements.


Item 3.Legal Proceedings
LitigationPalm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc.This litigation involves a landlord tenant dispute from 2008 in which the landlord, Palm Beach Florida Hotel and Office Building Limited Partnership, a subsidiary of the Company, claimed that the tenant had violated various lease provisions of the lease agreement and was therefore in default. The tenant counterclaimed and asserted multiple claims including that it had been wrongfully evicted. The litigation was instituted by the plaintiff in November 2008 in the Circuit Court of the Fifteenth Judicial Circuit, in and for Palm Beach County, Florida and proceeded to a jury trial on June 30, 2014. The jury entered its verdict awarding the tenant total claims of $10.8 million and ruling against the landlord on its claim of breach of contract. In 2016, the Court of Appeals reduced the original $10.8 million judgment to $8.8 million and added pre-judgment interest on the wrongful eviction judgment. The case was further appealed to the Florida Supreme Court. On May 23, 2017, the trial court issued an order compelling the company that issued the supersedeas bond, RLI Insurance Company (“RLI”), to pay approximately $10.0 million. On June 1, 2017, RLI paid Nantucket this amount and sought reimbursement from the Company.Company, and on June 7, 2017, the Company paid $2.5 million of the judgement. On June 27, 2017, the Florida Supreme Court denied the Company'sCompany’s petition for review. As a result, all of the appeals were exhausted and the judgment was final with the determination and reimbursement of attorney'sattorney’s fees being the only remaining dispute. On June 29, 2017, the balance of the judgment of $3.9 million was paid to Nantucket by the Company. On July 26, 2018, we paid $544,000 as part of a settlement on certain legal fees. The negotiations relating to the potential payment of the remaining attorney’s fees are still ongoing. As of December 31, 2019, we have accrued approximately $504,000 in legal fees, which represents the Company’s estimate of the amount of potential remaining legal fees that could be owed cannot be predictedowed.
On December 4, 2015, Pedro Membrives filed a class action lawsuit against HHC TRS FP Portfolio LLC, Remington Lodging & Hospitality, LLC, Remington Holdings LLC, Mark A. Sharkey, Archie Bennett, Jr., Monty J. Bennett, Christopher Peckham, and any other related entities in the Supreme Court of New York, Nassau County, Commercial Division. On August 30, 2016, the complaint was amended to add Michele Spero as a Plaintiff and Remington Long Island Employers, LLC as a defendant. The lawsuit is captioned Pedro Membrives and Michele Spero, individually and on behalf of others similarly situated v. HHC TRS FP Portfolio LLC, Remington Lodging & Hospitality, LLC, Remington Holdings LLC, Remington Long Island Employers, LLC, et

al., Index No. 607828/2015 (Sup. Ct. Nassau Cty.). The plaintiffs allege that the owner and management company of the Hyatt Regency Long Island hotel violated New York law by improperly retaining service charges rather than distributing them to employees. In 2017, the class was certified. On July 24, 2018, the trial court granted the plaintiffs’ motion for summary judgment on liability. The defendants appealed the summary judgment and that appeal is still pending. Notwithstanding the pending appeal on the summary judgment issue, the trial court continued the litigation with respect to the plaintiffs’ alleged damages. The plaintiffs filed an application for damages on August 28, 2019. The defendants filed their opposition to the plaintiffs’ application for damages on October 11, 2019. The plaintiffs filed their reply on October 25, 2019. The defendants intend to vigorously defend against the plaintiffs’ claims and the Company does not believe that an unfavorable outcome is probable. If the plaintiffs’ motion for summary judgment on liability is upheld and the Company is unsuccessful in any certainty.
Thefurther appeals, the Company estimates its total loss including post judgment interestthat damages could range between approximately $5.8 million and reimbursement of the plaintiff’s legal fees to be approximately $17.3$11.9 million asplus attorneys’ fees. As of December 31, 2017, resulting in additional expense of $4.1 million for the year ended December 31, 2017.
On June 29, 2017, RLI filed suit in Federal District Court in Dallas seeking to recover the2019 no amounts previously paid to Nantucket. On July 19, 2017, the Company paid approximately $10.0 million to RLI mooting RLI's claim subject only to the alleged claim for attorneys fee. The Company paid the negotiated settlement of RLI's attorney fees in the amount of $100,000, on November 2, 2017, and a Stipulation for Dismissal was filed concluding the litigation.have been accrued.
We are engaged in other various legal proceedings which have arisen but have not been fully adjudicated. The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature, ranges from remote to reasonably possible and to probable.literature. Based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, or results of operations.operations or cash flow. 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.
Item 4.Mine Safety Disclosures
Not Applicable
PART II
Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
(a) Market Price of and Dividends on Registrant’s Common Equity and Related Stockholder Matters
Market Price and Dividend Information
Our common stock is listed and traded on the New York Stock Exchange under the symbol “AHT.” On March 12, 2018,10, 2020, there were 361522 registered holders of record of our common stock. In order to comply with certain requirements related to our qualification as a REIT, our charter limits the number of shares of capital stock that may be owned by any single person or affiliated group without our permission to 9.8% of the outstanding shares of any class of our capital stock. We are aware of one Section 13G filer that presently holds in excess of 9.8% of our outstanding common shares, but our board of directors has granted a waiver which provides this holder with an exception to our ownership restrictions.

The following table sets forth, for the indicated periods, the high and low sales prices for our common stock as traded on that exchange and cash distributions declared per share of common stock. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information on the spin-off transaction.
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2017       
High$8.23
 $6.82
 $6.73
 $7.20
Low5.68
 5.81
 5.86
 6.16
Close6.37
 6.08
 6.67
 6.73
Cash dividends declared per share0.12
 0.12
 0.12
 0.12
2016       
High$6.40
 $6.40
 $7.16
 $7.91
Low4.15
 4.79
 5.10
 5.35
Close6.38
 5.37
 5.89
 7.76
Cash dividends declared per share0.12
 0.12
 0.12
 0.12
For the yearsyear ended December 31, 20172019, we declared and 2016,paid dividends of $0.30 per share, paid at a rate of $0.12, $0.06, $0.06, and$0.06, respectively, per share per quarter. For the year ended December 31, 2018, we declared and paid dividends of $0.48 per share, paid at a rate of $0.12, per share per quarter. In December 2017,2019, the board of directors approved our dividend policy for 2018, and we expect2020, which stated our then-expectation to pay a quarterly dividend of $0.12$0.06 per share for 2018. The adoption2020. As previously disclosed, the approval of aour dividend policy doesdid not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof. As a result of the impact of the novel coronavirus (COVID-19) on our business, we expect that the board of directors will reconsider our previously announced dividend policy and may take further action with respect to 2020 dividends, including by eliminating or significantly reducing the dividend until such time as our business operating environment improves. The board of directors will continue to review our dividend policy on a quarterly basis.and make future announcements with respect thereto. We may incur indebtedness to meet distribution requirements imposed on REITs under the Internal Revenue Code to the extent that working capital and cash flow from our investments are insufficient to fund required distributions. We may elect to pay dividends on our common stock in cash or a combination of cash and shares of securities as permitted under U.S. federal income tax laws governing REIT distribution requirements. To maintain our qualification as a REIT, we intend to make annual distributions to our stockholders of at least 90% of our REIT taxable income, excluding net capital gains (which does not necessarily equal net income as calculated in accordance with GAAP). Distributions will be authorized by our board of directors and declared by us based upon a variety of factors deemed relevant by our directors. Our ability to pay distributions to our stockholders will depend, in part, upon our receipt of distributions from our operating partnership. This, in turn, may depend upon receipt of lease payments with respect to our properties from indirect, wholly-owned subsidiaries of our operating partnership and the management of our properties by our property managers.hotel managers and general business conditions (including the impact of the novel coronavirus (COVID-19)).

Characterization of Distributions
For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. Distributions paid per share were characterized as follows for the following fiscal years:
2017 2016 20152019 2018 2017
Amount % Amount % Amount %Amount % Amount % Amount %
Common Stock (cash):                      
Ordinary income$
 % $
 % $
 %$
 % $
 % $
 %
Capital gain
 
 
 
 
 

 
 
 
 
 
Return of capital0.4800
(1) 
 100.0000
 0.4800
(1) 
 100.0000
 0.4800
(1) 
 100.0000
0.3600
(1) 
 100.0000
 0.4800
(1) 
 100.0000
 0.4800
(1) 
 100.0000
Total$0.4800
 100.0000% $0.4800
 100.0000% $0.4800
 100.0000%$0.3600
 100.0000% $0.4800
 100.0000% $0.4800
 100.0000%
Common Stock (stock):           
Common Stock (stock - NYSE: AINC):           
Ordinary income$
 % $
 % $
 %$
 % $
 % $
 %
Capital gain
 
 
 
 
 %
 
 
 
 
 %
Return of capital
 
 
 
 0.6099
 100.0000%0.0380
(2) 
 100.0000
 
 

 
 
Total$
 % $
 % $0.6099
 100.0000%$0.0380
 100.0000% $
 % $
 %
Preferred Stock – Series A:                      
Ordinary income$
 % $
 % $
 %$
 % $
 % $
 %
Capital gain0.8605
(1) 
 53.6739
 
 
 1.8277
(1) 
 85.5064

 
 
 
 0.8605
(1) 
 53.6739
Return of capital0.7427
(1) 
 46.3261
 2.1376
(1) 
 100.0000
 0.3098
(1) 
 14.4936

 
 
 
 0.7427
(1) 
 46.3261
Total$1.6032
 100.0000% $2.1376
 100.0000% $2.1375
 100.0000%$
 % $
 % $1.6032
 100.0000%
Preferred Stock – Series D:                      
Ordinary income$
 % $
 % $
 %
Capital gain1.1338
(1) 
 53.6735
 
 
 1.8064
(1) 
 85.5101
Return of capital0.9786
(1) 
 46.3265
 2.1124
(1) 
 100.0000
 0.3061
(1) 
 14.4899
Total$2.1124
 100.0000% $2.1124
 100.0000% $2.1125
 100.0000%
Preferred Stock – Series E:           
Ordinary income$
 % $
 % $
 %$
 % $
 % $
 %
Capital gain
 
 
 
 1.9239
(1) 
 85.5067

 
 
 
 1.1338
(1) 
 53.6735
Return of capital
 
 1.6875
(1) 
 100.0000
 0.3261
(1) 
 14.4933
2.1124
(1) 
 100.0000
 2.1124
(1) 
 100.0000
 0.9786
(1) 
 46.3265
Total$
 % $1.6875
 100.0000% $2.2500
 100.0000%$2.1124
 100.0000% $2.1124
 100.0000% $2.1124
 100.0000%
Preferred Stock – Series F:                      
Ordinary income$
 % $
 % $
 %$
 % $
 % $
 %
Capital gain0.9895
(1) 
 53.6722
 
 
 
 

 
 
 
 0.9895
(1) 
 53.6722
Return of capital0.8541
(1) 
 46.3278
 0.3995
(1) 
 100.0000
 
 
1.8436
(1) 
 100.0000
 1.8436
(1) 
 100.0000
 0.8541
(1) 
 46.3278
Total$1.8436
 100.0000% $0.3995
 100.0000% $
 %$1.8436
 100.0000% $1.8436
 100.0000% $1.8436
 100.0000%
Preferred Stock – Series G:                      
Ordinary income$
 % $
 % $
 %$
 % $
 % $
 %
Capital gain0.9428
(1) 
 53.6719
 
 
 
 

 
 
 
 0.9428
(1) 
 53.6719
Return of capital0.8138
(1) 
 46.3281
 
 
 
 
1.8436
(1) 
 100.0000
 1.8436
(1) 
 100.0000
 0.8138
(1) 
 46.3281
Total$1.7566
 100.0000% $
 % $
 %$1.8436
 100.0000% $1.8436
 100.0000% $1.7566
 100.0000%
Preferred Stock – Series H:  
   
   
  
   
   
Ordinary income$
 ��% $
 % $
 %$
 % $
 % $
 %
Capital gain0.1006
(1) 
 53.6533
 
 
 
 

 
 
 
 0.1006
(1) 
 53.6533
Return of capital0.0869
(1) 
 46.3467
 
 
 
 
1.8750
(1) 
 100.0000
 1.8750
(1) 
 100.0000
 0.0869
(1) 
 46.3467
Total$0.1875
 100.0000% $
 % $
 %$1.8750
 100.0000% $1.8750
 100.0000% $0.1875
 100.0000%
Preferred Stock – Series I:  
   
   
Ordinary income$
 % $
 % $
 %
Capital gain
 
 
 
 
 
Return of capital1.8750
(1) 
 100.0000
 1.6354
(1) 
 100.0000
 
 
Total$1.8750
 100.0000% $1.6354
 100.0000% $
 %
____________________
(1) 
The fourth quarter 2015 preferred and common distributions paid January 15, 2016 are treated as 2016 distributions for tax purposes. The fourth quarter 2016 preferred and common distributions paid January 17, 2017 are treated as 2017 distributions for tax purposes. The fourth quarter 2017 preferred and common distributions paid January 16,17, 2018 are treated as 2018 distributions for tax purposes. The fourth quarter 2018 preferred and common distributions paid January 16, 2019 are treated as 2019 distributions for tax purposes. The fourth quarter 2019 preferred and common distributions paid January 15, 2020 are treated as 2020 distributions for tax purposes.
(2)
On November 5, 2019 Ashford Trust distributed its remaining shares of common stock in Ashford, Inc. (NYSE: AINC) to the common shareholders of record as of the close of business of the New York Stock Exchange on October 29, 2019.

Equity Compensation Plan Information
The following table sets forth certain information with respect to securities authorized and available for issuance under our equity compensation plans as of December 31, 2017:2019:
 Number of Securities to be Issued Upon Exercise of
Outstanding Options, Warrants and Rights
 Weighted-Average
Exercise Price
Of Outstanding
Options, Warrants,
And Rights
 
Number of
 Securities Remaining Available for Future Issuance
  
Equity compensation plans approved by security holdersNone N/A 4,032,2501,895,026

 
(1) 
Equity compensation plans not approved by security holdersNone N/A None

  
TotalNone N/A 4,032,2501,895,026

  
____________________
(1) 
As of December 31, 2017,2019, there were 4,032,2501,895,026 shares of our common stock, or securities convertible into 4,032,2501,895,026 shares of our common stock that remained available for issuance under our Amended and Restated 2011 Stock Incentive Plan.
Performance Graph
The following graph compares the percentage change in the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Stock Index and the FTSE NAREIT Lodging & Resorts Index for the period from December 31, 20122014 through December 31, 2017,2019, assuming an initial investment of $100 in stock on December 31, 20122014 with reinvestment of dividends. The NAREIT Lodging Resorts Index is not a published index; however, we believe the companies included in this index provide a representative example of enterprises in the lodging resort line of business in which we engage. Stockholders who wish to request a list of companies in the FTSE NAREIT Lodging & Resorts Index may send written requests to Ashford Hospitality Trust, Inc., Attention: Stockholder Relations, 14185 Dallas Parkway, Suite 1100, Dallas, Texas 75254.

The stock price performance shown below on the graph is not necessarily indicative of future price performance.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Ashford Hospitality Trust, Inc., the S&P Index and the FTSE NAREIT Lodging & Resorts Index
chart-09388f356eaf5ac1a45.jpg
Purchases of Equity Securities by the Issuer
The following table provides the information with respect to purchases of shares of our common stock during each of the months in the fourth quarter of 20172019:
Period Total
Number of
Shares
Purchased
 Average
Price Paid
Per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plan
(2)
 Maximum Dollar
Value of Shares That
May Yet Be Purchased
Under the Plan
 Total
Number of
Shares
Purchased
 Average
Price Paid
Per Share
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Plan
(1)
 Maximum Dollar
Value of Shares That
May Yet Be Purchased
Under the Plan
Common stock:                
October 1 to October 31 2,082
(1) 
$
(3) 

 $200,000,000
 2,138
 $
(2) 

 $200,000,000
November 1 to November 30 3,549
(1) 

(3) 

 200,000,000
 1,458
 $
(2) 

 $200,000,000
December 1 to December 31 1,351
(1) 

(3) 

 200,000,000
 2,451
 $
(2) 

 $200,000,000
Total 6,982
 $
 
   6,047
 $
 
  
____________________
(1) 
Includes shares that were repurchased when former employees of Ashford LLC, who held restricted shares of our common stock, forfeited the shares upon termination of employment.
(2)
On December 5, 2017, the board of directors reapproved a stock repurchase program (the “Repurchase Program”) pursuant to which the Boardboard of directors granted a repurchase authorization to acquire shares of the Company’s common stock par value $0.01 per share (the “Common Stock”)and preferred stock having an aggregate value of up to $200 million. The Board’sboard of director’s authorization replaced any previous repurchase authorizations.
(3)(2) 
There is no cost associated with the forfeiture of restricted shares of our common stock.

Item 6.Selected Financial Data
The following sets forth our selected consolidated financial and operating information on a historical basis and should be read together with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto, which are included in “Item 8. Financial Statements and Supplementary Data.”
Year Ended December 31,
Year Ended December 31,2019 2018 2017 2016 2015
2017 2016 2015 2014 2013         
(in thousands, except per share amounts)(in thousands, except per share amounts)
Statements of Operations Data:                  
Total revenue$1,439,270
 $1,492,043
 $1,336,966
 $794,849
 $939,527
$1,502,759
 $1,430,789
 $1,439,270
 $1,492,043
 $1,336,966
Total operating expenses1,304,265
 1,336,339
 1,199,051
 718,157
 822,630
1,414,156
 1,340,850
 1,304,265
 1,336,339
 1,199,051
Gain (loss) on sale of assets and hotel properties26,126
 475
 14,030
 31,599
 380,752
Operating income (loss)135,005
 155,704
 137,915
 76,692
 116,897
114,729
 90,414
 149,035
 187,303
 518,667
Income (loss) from continuing operations(88,760) (58,782) 305,813
 (41,731) (48,460)
Income (loss) from discontinued operations
 
 
 33
 (98)
Net income (loss)(142,679) (156,309) (88,760) (58,782) 305,813
Net income (loss) attributable to the Company(67,008) (46,285) 270,939
 (31,401) (41,283)(113,635) (126,966) (67,008) (46,285) 270,939
Net income (loss) attributable to common stockholders(122,568) (88,681) 236,977
 (65,363) (75,245)(156,212) (169,543) (122,568) (88,681) 236,977
Diluted income (loss) per common share:                  
Income (loss) from continuing operations attributable to common stockholders$(1.30) $(0.95) $2.35
 $(0.75) $(1.00)
Income (loss) from discontinued operations attributable to common stockholders
 
 
 
 
Net income (loss) attributable to common stockholders$(1.30) $(0.95) $2.35
 $(0.75) $(1.00)$(1.58) $(1.75) $(1.30) $(0.95) $2.35
Weighted average diluted common shares95,207
 94,426
 114,881
 87,622
 75,155
99,837
 97,282
 95,207
 94,426
 114,881
December 31,
December 31,2019 2018 2017 2016 2015
2017 2016 2015 2014 2013         
(in thousands)(in thousands)
Balance Sheets Data:                  
Investments in hotel properties, net$4,035,915
 $4,160,563
 $2,128,611
 $2,128,611
 $2,164,389
$4,108,443
 $4,105,219
 $4,035,915
 $4,160,563
 $4,419,684
Cash and cash equivalents354,805
 347,091
 215,063
 215,063
 128,780
262,636
 319,210
 354,805
 347,091
 215,078
Restricted cash116,787
 144,014
 85,830
 85,830
 61,498
135,571
 120,602
 116,787
 144,014
 153,680
Notes receivable
 
 3,553
 3,553
 3,384
Notes receivable, net7,709
 
 
 
 3,746
Total assets4,669,850
 4,891,544
 2,770,110
 2,770,110
 2,668,973
4,691,348
 4,685,954
 4,669,850
 4,891,544
 4,965,131
Indebtedness, net3,696,300
 3,723,559
 1,943,133
 1,943,133
 1,810,900
4,106,518
 3,927,266
 3,696,300
 3,723,559
 3,840,617
Total stockholders’ equity of the Company632,500
 791,621
 531,633
 531,633
 617,789
268,762
 452,489
 632,500
 791,621
 811,086
Year Ended December 31,
Year Ended December 31,2019 2018 2017 2016 2015
2017 2016 2015 2014 2013         
(in thousands, except per share amounts)(in thousands, except per share amounts)
Other Data:                  
Cash provided by (used in) operating activities$207,382
 $179,723
 $203,577
 $111,319
 $145,457
$177,209
 $181,560
 $207,382
 $179,723
 $203,577
Cash provided by (used in) investing activities(63,881) (21,858) (780,316) (207,245) (353,998)(253,193) (329,634) (63,881) (21,858) (780,613)
Cash provided by (used in) financing activities(163,902) (34,150) 644,604
 182,209
 151,386
34,379
 115,814
 (163,902) (34,150) 644,604
Cash dividends declared per common share0.48
 0.48
 0.48
 0.48
 0.48
0.30
 0.48
 0.48
 0.48
 0.48
EBITDA (unaudited) (1)
379,667
 410,825
 732,550
 290,469
 314,526
EBITDAre (unaudited) (1)
403,285
 366,639
 378,261
 398,222
 371,101
Funds From Operations (FFO) (unaudited) (1)
98,406
 129,532
 132,863
 85,097
 95,523
89,017
 82,363
 98,406
 129,532
 132,863
____________________
(1) 
A more detailed description and computation of FFO and EBITDAEBITDAre is contained in the “Non-GAAP Financial Measures” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
This section of this Form 10-K generally discusses 2019 and 2018 items and year-to-year comparisons between 2019 and 2018. Discussions of 2017 items and year-to-year comparisons between 2018 and 2017 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
EXECUTIVE OVERVIEW
General
As of December 31, 2017,2019, we owned 120117 consolidated hotel properties, including 118115 hotel properties directly owned, and two hotel properties owned through a majority-owned investment in a consolidated entity, which represents 25,05824,943 total rooms, or 25,03124,916 net rooms excluding those attributable to our partner. Currently, all of our hotel properties are located in the United States.
Based on our primary business objectives and forecasted operating conditions, our current key priorities and financial strategies include, among other things:
acquisition of hotel properties that will be accretive to our portfolio;
disposition of non-core hotel properties;
pursuing capital market activities to enhance long-term stockholder value;
preserving capital, enhancing liquidity, and continuing current cost-saving measures;
implementing selective capital improvements designed to increase profitability;
implementing effective asset management strategies to minimize operating costs and increase revenues;
financing or refinancing hotels on competitive terms;
utilizing hedges and derivatives to mitigate risks; and
making other investments or divestitures that our board of directors deems appropriate.
Our current investment strategy is to focus on owning predominantly full-service hotels in the upscale and upper upscale segmentssegment in domestic and international markets that have revenue per available room (“RevPAR”) generally less than twice the national average. We believe that as supply, demand, and capital market cycles change, we will be able to shift our investment strategy to take advantage of new lodging-related investment opportunities as they may develop. Our board of directors may change our investment strategy at any time without stockholder approval or notice.
RECENT DEVELOPMENTS
On January 19, 2017, AHT SMA, LP,COVID-19 Impact
The negative impact on room demand within our portfolio stemming from the novel coronavirus (COVID-19) is significant. We experienced an initial decline in hotel revenue that began in February in a Delaware limited partnershipnumber of markets. However, with the increased spread of the novel coronavirus (COVID-19) across the globe, the impact has accelerated rapidly, and we are seeing a wholly-owned subsidiary of Ashford Trust entered into an Investment Management Agreement (the “Agreement”)much greater effect on occupancy and RevPAR throughout our hotel portfolio. We expect the occupancy and RevPAR reduction associated with Ashford Investment Management, LLC (“AIM”), a subsidiary of Ashford Inc.,the novel coronavirus (COVID-19) to manage all or a portion of Ashford Trust’s excess cash (the “Account”). Pursuant to the Agreement, the Company retained and appointed AIMcontinue as the investment manager for us. The Agreement will govern the relationship between Ashford Trust and AIM,we are experiencing significant reservation cancellations as well as grant AIMa significant reduction in new reservations relative to prior expectations. While intense efforts to reduce operating costs are underway, we cannot be certain rights, powersas to what level of savings can be achieved overall to mitigate the material decline in hotel revenues we are experiencing. As part of our efforts to reduce costs, we will likely reduce our capital expenditures below our previously announced range of $125 million to $145 million. Until such time as the virus is contained or eradicated and dutiesbusiness and personal travel return to actmore customary levels, we expect to see substantial erosion in hotel cash flow. There may also be lasting effects related to the novel coronavirus (COVID-19). For some period related to a slowdown in the U.S. economy, increased labor costs, increased operating costs, reduced air travel or other unknown factors which could materially reduce our operating cash flow.
On March 10, 2020, we informed our mortgage lenders on behalfthe Morgan Stanley 8-hotel portfolio (consisting of Courtyard Billerica, Hampton Inn Columbus Easton, Hampton Inn Phoenix Airport, Homewood Suites Pittsburgh Southpointe, Hampton Inn Pittsburgh Waterfront, Hampton Inn Pittsburgh Washington, Residence Inn Stillwater and Courtyard Wichita) that the Company. AIMcash flow from the hotels will not be compensated by us for its services underinsufficient to cover debt service and other required payments due on the Agreement. We bear all costsloan, that we believe there is substantial risk of imminent payment default, and expenses ofhave requested that the establishment and ongoing maintenance oflenders restructure the Account as well as all costs and expenses of AIM.mortgage loans.

Other Developments
On February 1, 2017, January 22, 2019, the Company soldacquired a 100% interest in the Renaissance hotel in Portsmouth, Virginia (“Renaissance Portsmouth”)310-room Embassy Suites New York Manhattan Times Square for approximately $9.2$195.0 million in cash. The sale resulted in a loss of $43,000 for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. We repaid $20.2 million of principal on our mortgage loan that was partially secured by the Renaissance Portsmouth.
On February 20, 2017, the board of directors of the Company appointed Mr. Douglas A. Kessler as Chief Executive Officer of the Company, effective February 21, 2017. Also on February 20, 2017, Mr. Monty J. Bennett ceased to serve as the Company’s Chief Executive Officer. Mr. Bennett remains the Chairman of the Board. In order to provide greater focus to the Company, on April 27, 2017, Mr. Kessler resigned from the Board of Directors of Ashford Prime and no longer is President of Ashford Prime.
In connection with the appointment of Mr. Kessler as Chief Executive Officer of the Company, the Company and Mr. Kessler entered intothis acquisition, we closed on a Restricted Stock Award Agreement (the “Award Agreement”), pursuant to which Mr. Kessler received 359,477 shares of Restricted Stock (as defined in the Award Agreement).
On March 2, 2017, we invested an additional $650,000 in OpenKey.
On March 6, 2017, the Company sold the Embassy Suites in Syracuse, New York (“Embassy Suites Syracuse”) for approximately $8.8 million in cash. The sale resulted in a loss of $40,000 for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. We repaid $20.6 million of principal on our mortgage loan that was partially secured by the Embassy Suites Syracuse.

On March 7, 2017, AIM REHE Funds GP, LP (“AIM GP”), the general partner of the AQUA U.S. Fund, provided written notice to Ashford Trust of its election to dissolve the AQUA U.S. Fund pursuant to Section 6.1(a) of the Second Amended and Restated Limited Partnership Agreement of the AQUA U.S. Fund as of March 31, 2017. Pursuant to this election, we liquidated our investment in the AQUA U.S. Fund subject to a 5% hold back of $2.6 million which was received during the second quarter of 2017 upon completion of the audit of the AQUA U.S. Fund’s financial statements.
On May 10, 2017, we refinanced a $105.0$145.0 million mortgage loan, secured by the Renaissance Nashville in Nashville, Tennessee and the Westin in Princeton, New Jersey. The new mortgage loan totals $181.0 million, of which our initial advance was $164.7 million with future advances totaling $16.3 million as reimbursement for capital expenditures. Theloan. This mortgage loan is interest only and provides for a floatingan interest rate of LIBOR + 3.00%3.90%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due.The stated maturity date of the mortgage loan is JuneFebruary 2022, with notwo one-year extension options.
On May 23, 2017, The mortgage loan is secured by the trial court, in the matter of Palm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc., issued an order compelling the company that issued the supersedeas bond, RLI Insurance Company (“RLI”), to pay approximately $10.0 million. On June 1, 2017, RLI paid Nantucket this amount and sought reimbursement from the Company. On June 27, 2017, the Florida Supreme Court denied the Company's petition for review.Embassy Suites New York Manhattan Times Square. As a result all of the appeals were exhausted andacquisition under the judgment was final withERFP Agreement, we are entitled to receive $19.5 million from Ashford LLC in the determination and reimbursementform of attorney's fees being the only remaining dispute. On June 29, 2017, the balancefuture purchases of the judgment was paidhotel FF&E at Ashford Trust properties that will be leased to Nantucketus by the Company.
The Company estimates its total loss including post judgment interest and reimbursement of the plaintiff’s legal fees to be approximately $17.3 million asAshford LLC rent free. As of December 31, 2017, resulting2019, we have received $8.1 million from Ashford LLC in additional expenseexchange for purchases of $4.1 million for the year ended December 31, 2017, respectively.hotel FF&E at Ashford Trust properties that was leased to us by Ashford LLC rent free.
On May 24, 2017,February 6, 2019, we refinancedmade an additional investment of $299,000 in OpenKey.
On February 26, 2019, the Company acquired$15.7100% interest in the 178-room Hilton Santa Cruz/Scotts Valley for $47.5 million. Consideration included cash and approximately 1.5 million common units in our operating partnership. Additionally, we assumed a $25.3 million non-recourse mortgage loan with a fair value of $24.9 million. This mortgage loan amortizes monthly and provides for a fixed interest rate of 4.66%. The stated maturity date of the mortgage loan is March 2025. The mortgage loan is secured by the Hotel Indigo (“Hotel Indigo Atlanta”)Hilton Santa Cruz/Scotts Valley. As a result of the acquisition under the ERFP Agreement, we received $5.0 million from Ashford LLC in Atlanta, Georgia.exchange for purchases of hotel FF&E at Ashford Trust properties that was leased to us by Ashford LLC rent free.
On March 5, 2019, we refinanced our $178.1 million mortgage, secured by the Renaissance Nashville and Westin Princeton. The new mortgage loan totals $16.1$240.0 million. The mortgage loan is interest only and provides for a floatingan interest rate of LIBOR + 2.90% for the first two years with a 30-year amortization schedule based on a 6% interest rate starting in the third year.2.75%. The stated maturity is May 2020,March 2021 with two one-year extension options.
On June 29, 2017, RLI filed suit in Federal District Court in Dallas seeking to recover the amounts previously paid to Nantucket. On July 19, 2017, the Company paid approximately $10.0 million to RLI mooting RLI's claim subject only to the alleged claim for attorney fees. The Company paid the negotiated settlement of RLI's attorney fees in the amount of $100,000, on November 2, 2017, and a Stipulation for Dismissal was filed concluding the litigation.
On June 29, 2017, the Company sold the Crowne Plaza Ravinia in Atlanta, Georgia for approximately $88.7 million in cash. The sale resulted in a gain of $14.1 million for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $78.7 million of debt associated with the hotel property.
On August 25, 2017, the Company issued 3.4 million shares of 7.50% Series H cumulative preferred stock. The Series H cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series A cumulative preferred stock (all shares redeemed on September 18, 2017), Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series G cumulative preferred stock and Series I cumulative preferred stock (discussed below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. On September 8, 2017, we issued 400,000 additional shares of 7.50% Series H cumulative preferred stock pursuant to the over-allotment option.
On August 31, 2017, we invested an additional $333,000 in OpenKey, resulting in a 16.2% total ownership interest.
On September 18, 2017, the Company redeemed its 8.55% Series A cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4631 per share, for a total redemption price of $25.4631 per share.
On September 18, 2017, the Company redeemed approximately 1.6 million shares of its 8.45% Series D cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4577 per share, for a total redemption price of $25.4577 per share.
On October 4, 2017, the Company redeemed 379,036 shares of 8.45% Series D cumulative preferred shares at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.5516 per share, for a total redemption price of $25.5516 per share.

On October 30, 2017, we refinanced our $94.7 million mortgage loan, with an outstanding balance of $94.5 million, secured by the Hilton Boston Back Bay in Boston, Massachusetts. The new mortgage loan totals $97.0 million, provides for a floating interest rate of LIBOR + 2.00%, a five-year term with no extension options and is secured by the Hilton Boston Back Bay.
On October 31, 2017, we refinanced our $412.5 million mortgage loan, secured by seventeen hotels. The new mortgage loan totals $427.0 million, is interest only, provides for a floating interest rate of LIBOR + 3.00% and has a two-year initial term with five one-year extension options. The new mortgage loan is secured by the following seventeen hotels: the Courtyard Alpharetta, Courtyard Bloomington, Courtyard Crystal City, Courtyard Foothill Ranch, Embassy Suites Austin, Embassy Suites Dallas, Embassy Suites Houston, Embassy Suites Las Vegas, Embassy Suites Palm Beach, Hampton Inn Evansville, Hilton Garden Inn Jacksonville, Hilton Nassau Bay, Hilton St. Petersburg, Residence Inn Evansville, Residence Inn Falls Church, Residence Inn San Diego and Sheraton Indianapolis.
On November 17, 2017, the Company issued 5.4 million shares of 7.50% Series I cumulative preferred stock. The Series I cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series G cumulative preferred stock and Series H cumulative preferred stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs.
On December 5, 2017, the board of directors reapproved a stock repurchase program (the “Repurchase Program”) pursuant to which the Board granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) having an aggregate value of up to $200 million. The Board’s authorization replaced any previous repurchase authorizations. On December 11, 2017, we entered into equity distribution agreements with UBS Securities LLC, Morgan Stanley & Co. LLC, B. Riley FBR, Inc., Robert W. Baird & Co. Incorporated, D.A. Davidson & Co., Deutsche Bank Securities Inc. and Janney Montgomery Scott LLC, each acting as a sales agent (the “Equity Distribution Agreements”). Pursuant to the Equity Distribution Agreements, we may sell from time to time through the sales agents shares of our common stock having an aggregate offering price of up to $100.0 million. Sales of shares of our common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the New York Stock Exchange, the existing trading market for our common stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our common stock sold through such sales agent. As of December 31, 2017, no shares of our common stock have been sold under this program.
On December 8, 2017, the Company redeemed approximately 5.1 million shares of its 8.45% Series D cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.3990 per share, for a total redemption price of $25.3990 per share.
On January 17, 2018, we refinanced our $376.8 million mortgage loan. The new mortgage loan totaled $395.0 million. The new mortgage loan has a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by the Renaissance Nashville and Westin Princeton.
On June 7, 2019, we amended the mortgage loan secured by the Fort Worth Ashton totaling $5.2 million. The amended mortgage loan totaling $8.9 million has a five-year term, is interest only and bears interest at a rate of LIBOR + 2.00%.
On August 2, 2019, the Company sold the San Antonio Marriott for approximately $34.0 million in cash. The sale resulted in a gain of $2.6 million for the year ended December 31, 2019 and is included in “gain (loss) on sale of assets and hotel properties” in the consolidated statement of operations. The Company also repaid approximately $26.8 million of principal on its mortgage loan partially secured by the hotel property.
On August 6, 2019, the Company sold the Hilton Garden Inn Wisconsin Dells for $8.0 million in cash. The sale resulted in a loss of $292,000 for the year ended December 31, 2019 and is included in “gain (loss) on sale of assets and hotel properties” in the consolidated statement of operations. The Company also repaid approximately $7.7 million of principal on its mortgage loan secured by the hotel property.
On August 13, 2019, we made an additional investment of $348,000 in OpenKey.
On August 14, 2019, the Company sold the Courtyard Savannah for approximately $29.8 million in cash. The sale resulted in a loss of $60,000 for the year ended December 31, 2019 and is included in “gain (loss) on sale of assets and hotel properties” in the consolidated statement of operations. The Company also repaid approximately $28.8 million of principal on its mortgage loan partially secured by the hotel property.
On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities LLC (“Ashford Securities”) to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Ashford Trust has entered into a contribution agreement with Ashford Inc. pursuant to which Ashford Trust has agreed to contribute, with Braemar, up to $15.0 million to fund the operations of Ashford Securities. These costs will be allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% to Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised or June 10, 2023, there will be a true up (the “True-up Date”) between Ashford Trust and Braemar whereby the actual capital contributions contributed by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively. After the True-up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Funding advances will be expensed as the expenses are incurred by Ashford Securities.
On October 2, 2019, the Company entered into a stock purchase agreement with Ashford LLC under which Ashford LLC purchased all of the common stock of Ashford Inc. held by Ashford TRS, totaling 393,077 shares, for $30 per share, resulting in total proceeds of approximately $11.8 million to the Company.

On October 10, 2019, the Company sold the 1.65-acre parking lot adjacent to the Hilton St. Petersburg Bayfront for consideration of approximately $20.6 million. The sale resulted in a gain of $19.4 million for the year ended December 31, 2019 and is included in “gain (loss) on sale of assets and hotel properties” in the consolidated statement of operations. The Company also repaid approximately $8.0 million of debt associated with the hotel property.
On October 21, 2019, the Company announced that its board of directors had declared the distribution of its remaining 205,086 shares of common stock of Ashford Inc. Both common stockholders and unitholders of Ashford Trust received their pro rata share of Ashford Inc. common stock. The distribution to Company stockholders and unitholders was completed through a pro-rata taxable dividend of Ashford Inc. common stock on November 5, 2019 (the “Distribution Date”) to common stockholders and unitholders of record (“Company Record Holders”) as of the close of business of the New York Stock Exchange (“NYSE”) on October 29, 2019 (the “Record Date”). On the Distribution Date, each Company Record Holder received approximately 0.0017 shares of Ashford Inc. common stock for every unit and/or share of the Company’s common stock held by such Company Record Holder on the Record Date. No fractional shares of Ashford Inc. common stock were issued. Fractional shares of Ashford Inc. common stock to which Company Record Holders would otherwise be entitled will be aggregated and, after the distribution, sold in the open market by the distribution agent. The aggregate net proceeds of the sales will be distributed in a pro-rata manner as cash payments to the Company Record Holders who would otherwise have received fractional shares of Ashford Inc. common stock. Additionally, Company Record Holders who hold in “street name” on behalf of their customers may sell additional shares into the open market to make cash payments to their customers who would have otherwise received fractional shares of Ashford Inc. common stock. Subsequent to the distribution, the Company does not have any ownership interest in Ashford Inc.
On November 6, 2019, Ashford Inc. completed its acquisition of Remington Lodging’s hotel management business.
On December 3, 2019, the Company sold the SpringHill Suites Jacksonville for approximately $11.2 million in cash.
On December 27, 2019, we amended the mortgage loan secured by the Indigo Atlanta totaling $16.0 million. The amended mortgage loan totaling $16.1 million has a three-year term, is interest only and bears interest at a rate of LIBOR + 2.25%. The stated maturity is December 2022 with two one-year extension options, subject to the satisfaction of certain conditions.
On January 9, 2020, we refinanced our $43.8 million mortgage loan, secured by the Le Pavillon in New Orleans, Louisiana. In connection with the refinance we repaid $6.8 million on the existing loan. The new mortgage loan totals $37.0 million. The new mortgage loan is interest only and provides for a floatingan interest rate of LIBOR + 2.92%3.40%. The Mortgagestated maturity is January 2023 with two one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by eight hotels: Embassy Suites Portland, Embassy Suites Crystal City, Embassy Suites Orlando, Embassy Suites Santa Clara, Crowne Plaza Key West, Hilton Costa Mesa, Sheraton Minneapolis, and Historic Inns of Annapolis.the Le Pavillon.
On February 20, 2018, weMarch 9, 2020, the Company completed the sale of the SpringHill Suites Glen AllenCrowne Plaza in Annapolis, Maryland for approximately $10.9$5.1 million. As of December 31, 2019, the carrying value of the building and FF&E was approximately $5.3 million at December 31, 2019. This hotel property is subject to a ground lease with a below-market component with a carrying value of $(3.2) million at December 31, 2019. The combined carrying value of the hotel property at December 31, 2019 was approximately $2.2 million.
RESULTS OF OPERATIONS
RevPAR isKey Indicators of Operating Performance
We use a commonly used measure within the hotel industryvariety of operating and other information to evaluate hotel operations. RevPARthe operating performance of our business. These key indicators include financial information that is definedprepared in accordance with GAAP as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the productoperating performance of the ADR charged and the average daily occupancy achieved. RevPAR does not include revenues from food and beverage our individual hotels, groups of hotels and/or parking, telephone, or other guest services 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.business as a whole. We also use RevPARthese metrics to compareevaluate the results ofhotels in our hotels between periods portfolio and potential acquisitions to determine each hotel’s contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include:
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 year)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.
RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expense. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.
Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.
We also use FFO, AFFO, EBITDAre, Adjusted EBITDAre and Hotel EBITDA as measures of the operating performance of our business. See “Non-GAAP Financial Measures.”
Principal Factors Affecting Our Results of Operations
The principal factors affecting our operating results include overall demand for hotel rooms compared to the supply of available hotel rooms, and the ability of our third-party management companies to increase or maintain revenues while controlling expenses.
Demand—The demand for lodging, including business travel, is directly correlated to the overall economy; as GDP increases, lodging demand typically increases. Historically, periods of declining demand are followed by extended periods of relatively strong demand, which typically occurs during the growth phase of the lodging cycle.
Following the recession that commenced in 2008, the lodging industry has experienced improvement in fundamentals, including demand, which has continued through 2019.
Supply—The development of new hotels is driven largely by construction costs, the availability of financing and expected performance of existing hotels. Short-term supply is also expected to be below long-term averages. While the industry is expected to have supply growth below historical averages, we may experience supply growth, in certain markets, in excess of national averages that may negatively impact performance. 
We expect that our ADR, occupancy and RevPAR performance will be impacted by macroeconomic factors such as national and local employment growth, personal income and corporate earnings, GDP, consumer confidence, office vacancy rates and business relocation decisions, airport and other business and leisure travel, new hotel construction, the pricing strategies of competitors and currency fluctuations. In addition, our ADR, occupancy and RevPAR performance are dependent on the continued success of the Marriott, Hilton and Hyatt brands.
Revenue—Substantially all of our revenue is derived from the operation of hotels. Specifically, our revenue is comprised of:
Rooms revenue-Occupancy and ADR are the major drivers of rooms revenue. Rooms revenue accounts for the substantial majority of our total revenue.
Food and beverage revenue-Occupancy and the type of customer staying at the hotel are the major drivers of food and beverage revenue (i.e., group business typically generates more food and beverage business through catering functions when compared to transient business, which may or may not utilize the hotel’s food and beverage outlets or meeting and banquet facilities).
Other hotel revenue-Occupancy and the nature of the property are the main drivers of other ancillary revenue, such as telecommunications, parking and leasing services.
Hotel Operating Expenses—The following presents the components of our hotel operating expenses:
Rooms expense-These costs include housekeeping wages and payroll taxes, reservation systems, room supplies, laundry services and front desk costs. Like rooms revenue, occupancy is the major driver of rooms expense and, therefore, rooms expense has a significant correlation to rooms revenue. These costs can increase based on increases in salaries and wages, as well as the level of service and amenities that are provided.
Food and beverage expense-These expenses primarily include food, beverage and labor costs. Occupancy and the type of customer staying at the hotel (i.e., catered functions generally are more profitable than restaurant, bar or other on-

property food and beverage outlets) are the major drivers of food and beverage expense, which correlates closely with food and beverage revenue.
Management fees-Base management fees are computed as a percentage of gross revenue. Incentive management fees generally are paid when operating profits exceed certain threshold levels.
Other hotel expenses-These expenses include labor and other costs associated with the other operating department revenues, as well as labor and other costs associated with administrative departments, franchise fees, sales and marketing, repairs and maintenance and utility costs.
Most categories of variable operating expenses, including labor costs such as housekeeping, fluctuate with changes in occupancy. Increases in occupancy are accompanied by increases in most categories of variable operating expenses, while increases in ADR typically only result in increases in limited categories of operating costs and expenses, such as franchise fees, management fees and credit card processing fee expenses which are based on hotel revenues. Thus, changes in ADR have a more significant impact on operating margins than changes in occupancy.
The following table summarizes the changes in key line items from our consolidated statements of operations for the years ended December 31, 2017, 20162019, 2018 and 20152017 (in thousands):
Year Ended December 31, Favorable (Unfavorable)
Change
Year Ended December 31, Favorable (Unfavorable)
Change
2017 2016 2015 2017 to 2016 2016 to 20152019 2018 2017 2019 to 2018 2018 to 2017
Total revenue$1,439,270
 $1,492,043
 $1,336,966
 $(52,773) $155,077
$1,502,759
 $1,430,789
 $1,439,270
 $71,970
 $(8,481)
Total hotel expenses(907,301) (938,399) (840,244) 31,098
 (98,155)(952,674) (900,582) (907,301) (52,092) 6,719
Property taxes, insurance and other(73,579) (73,457) (65,301) (122) (8,156)(84,110) (78,355) (73,579) (5,755) (4,776)
Depreciation and amortization(246,731) (243,863) (210,410) (2,868) (33,453)(269,003) (258,458) (246,731) (10,545) (11,727)
Impairment charges(10,153) (17,816) (19,511) 7,663
 1,695
(33,628) (23,391) (10,153) (10,237) (13,238)
Transaction costs(14) (77) (6,252) 63
 6,175
(2) (11) (14) 9
 3
Advisory service fee(53,199) (54,361) (43,023) 1,162
 (11,338)(63,632) (69,122) (53,199) 5,490
 (15,923)
Corporate general and administrative(13,288) (8,366) (14,310) (4,922) 5,944
Corporate, general and administrative(11,107) (10,931) (13,288) (176) 2,357
Gain (loss) on sale of assets and hotel properties26,126
 475
 14,030
 25,651
 (13,555)
Operating income (loss)135,005
 155,704
 137,915
 (20,699) 17,789
114,729
 90,414
 149,035
 24,315
 (58,621)
Equity in earnings (loss) of unconsolidated entities(5,866) (6,110) (6,831) 244
 721
(2,307) 867
 (5,866) (3,174) 6,733
Interest income2,202
 331
 90
 1,871
 241
3,067
 3,952
 2,202
 (885) 1,750
Gain (loss) on acquisition of PIM Highland JV and sale of hotel properties14,030
 31,599
 380,752
 (17,569) (349,153)
Other income (expense)(3,422) (4,517) (864) 1,095
 (3,653)10,490
 64
 (3,422) 10,426
 3,486
Interest expense and amortization of loan costs(222,631) (223,967) (187,514) 1,336
 (36,453)(262,001) (236,786) (222,631) (25,215) (14,155)
Write-off of premiums, loan costs and exit fees(2,845) (12,702) (5,750) 9,857
 (6,952)(2,841) (8,847) (2,845) 6,006
 (6,002)
Unrealized gain (loss) on marketable securities(4,649) 4,946
 127
 (9,595) 4,819
1,896
 (1,013) (4,649) 2,909
 3,636
Unrealized gain (loss) on derivatives(2,802) (2,534) (7,402) (268) 4,868
(4,494) (2,178) (2,802) (2,316) 624
Income tax benefit (expense)2,218
 (1,532) (4,710) 3,750
 3,178
(1,218) (2,782) 2,218
 1,564
 (5,000)
Income (loss) from continuing operations(88,760) (58,782) 305,813
 (29,978) (364,595)
Gain (loss) on sale of hotel property, net of tax
 
 599
 
 (599)
Net income (loss)(88,760) (58,782) 306,412
 (29,978) (365,194)(142,679) (156,309) (88,760) 13,630
 (67,549)
(Income) loss from consolidated entities attributable to noncontrolling interests110
 14
 30
 96
 (16)112
 30
 110
 82
 (80)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership21,642
 12,483
 (35,503) 9,159
 47,986
28,932
 29,313
 21,642
 (381) 7,671
Net income (loss) attributable to the Company$(67,008) $(46,285) $270,939
 $(20,723) $(317,224)$(113,635) $(126,966) $(67,008) $13,331
 $(59,958)

Comparison of Year Ended December 31, 20172019with Year Ended December 31, 20162018
All hotel properties owned during the years ended December 31, 20172019 and 20162018 have been included in our results of operations during the respective periods in which they were owned. Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the years ended December 31, 20172019 and 2016.2018. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following acquisitions and dispositions affect reporting comparability related to our consolidated financial statements:
Hotel Properties
 
Location
 Type Date
5-hotel portfolio SpringHill Suites Glen Allen (1)
 VariousDispositionJune 1, 2016
Hampton Inn & Suites (1)
Gainesville, FLDispositionSeptember 1, 2016
SpringHill Suites Gaithersburg (1)
Gaithersburg, MDDispositionOctober 1, 2016
2-hotel portfolio (1)
Palm Desert, CADispositionOctober 7, 2016
Renaissance (1)
Portsmouth,Glen Allen, VA Disposition February 1, 201720, 2018
EmbassySpringHill Suites Centreville (1)
 Syracuse, NYCentreville, VA Disposition March 6, 2017May 1, 2018
Crowne Plaza Ravinia Residence Inn Tampa (1)
 Atlanta,Tampa, FLDispositionMay 10, 2018
Hilton Alexandria Old Town (2)
Alexandria, VAAcquisitionJune 29, 2018
La Posada de Santa Fe (2)
Santa Fe, NMAcquisitionOctober 31, 2018
Embassy Suites New York Manhattan Times Square (2)
New York, NYAcquisitionJanuary 22, 2019
Hilton Santa Cruz/Scotts Valley (2)
Santa Cruz, CAAcquisitionFebruary 26, 2019
San Antonio Marriott (1)
San Antonio, TXDispositionAugust 2, 2019
Hilton Garden Inn Wisconsin Dells (1)
Wisconsin Dells, WIDispositionAugust 6, 2019
Courtyard Savannah (1)
Savannah, GA Disposition June 29, 2017August 14, 2019
SpringHill Suites Jacksonville (1)
Jacksonville, FLDispositionDecember 3, 2019

(1) Collectively referred to as “Hotel Dispositions”
(2) Collectively reported as “Hotel Acquisitions”
The following table illustrates the key performance indicators of the hotel properties and WorldQuest included in our results of operations:
Year Ended December 31,Year Ended December 31,
2017 20162019 2018
RevPAR (revenue per available room)$122.48
 $118.44
$127.22
 $123.62
Occupancy77.36% 77.00%76.26% 76.32%
ADR (average daily rate)$158.33
 $153.83
$166.84
 $161.99
The following table illustrates the key performance indicators of the 120113 hotel properties and WorldQuest that were included for the full years ended December 31, 20172019 and 2016,2018, respectively:
Year Ended December 31,Year Ended December 31,
2017 20162019 2018
RevPar$122.96
 $120.77
$125.70
 $124.26
Occupancy77.46% 77.14%75.93% 76.32%
ADR$158.74
 $156.56
$165.55
 $162.82
Net Income (Loss) Attributable to the Company. Net loss attributable to the Company increased $20.7decreased $13.3 million, from $46.3$127.0 million for the year ended December 31, 20162018 (“2016”2018”) to $67.0$113.6 million for the year ended December 31, 20172019 (“2017”2019”) as a result of the factors discussed below.
Revenue.Rooms revenue from our hotel properties and WorldQuest decreased $37.1increased $50.3 million, or 3.1%4.4%, to $1.1$1.2 billion during 20172019 compared to 2016.2018. This decreaseincrease is primarily attributable to higher rooms revenue of $49.1 million from our Hotel Acquisitions and $12.8 million at our comparable hotel properties and WorldQuest. These increases were partially offset by lower rooms revenue of $54.3$11.7 million related tofrom our Hotel Dispositions, partially offset byDispositions. Our comparable hotel properties experienced an increase of 1.7% in room rates and a decrease of 39 basis points in occupancy.

Food and beverage revenue increased $19.6 million, or 8.7%, to $243.9 million in 2019 compared to 2018. This increase is attributable to higher roomsfood and beverage revenue of $17.3$12.9 million fromat our comparable hotel properties and WorldQuest, which experienced a 1.4% increase in room rates and a 32 basis point increase in occupancy.
Food and beverage revenue decreased $18.4 million, or 7.3%, to $234.8 million during 2017 compared to 2016. This decrease is attributable to lower food and beverage revenue of $9.4$7.1 million from our Hotel Dispositions and $9.0 millionAcquisitions, partially offset by lower revenue of $396,000 from our comparable hotel properties and WorldQuest. The decrease in our comparable hotel properties and WorldQuest is primarily attributable to approximately $1.6 million associated with the renovation of the DFW Airport Marriott in Irving, Texas and unfavorable year over year changes in the July 4th holiday calendar moving from the weekend to midweek.Hotel Dispositions.
Other hotel revenue, which consists mainly of Internet access, parking, spa and spa,business interruption revenue, increased $1.3$1.9 million, or 2.3%2.8%, to $58.2$69.7 million during 2017in 2019 compared to 2016.2018. This increase is primarily attributable to higher other revenue of $3.0 million from our

Hotel Acquisitions and $2.2 million from our comparable hotel properties and WorldQuest, partially offset by lower other revenue of $1.6 million$494,000 from our Hotel Dispositions.Dispositions and lower business interruption income of $2.8 million. In 2018, we received $2.5 million of business interruption income for the Hilton St. Petersburg Bayfront and Key West Crowne Plaza related to a settlement for lost profits from the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010 and $401,000 of business interruption income related to Hurricane Irma. In 2019, we received $172,000 of business interruption income at certain hotel properties. Other non-hotel revenue increased $1.4 million,$193,000, or 81.1%4.8%, to $3.2$4.2 million in 2017.2019.
Hotel Operating Expenses. Hotel operating expenses decreased $31.1increased $52.1 million, or 3.3%5.8%, to $907.3$952.7 million during 20172019 compared to 2016.2018. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. Direct expenses decreased $18.2increased $22.5 million in 2017 as2019 compared to 2016,2018, which was comprised of a decrease of $20.1 million related to our Hotel Dispositions, partially offset by an increase of $1.9 million from our comparable hotel properties and WorldQuest. Direct expenses were 30.1% of total hotel revenue for both 2017 and 2016. Indirect expenses and management fees decreased $12.9 million in 2017 as compared to 2016, which was comprised of a decrease of $21.6$18.3 million from our Hotel Dispositions, partially offset by an increase of $8.7 million from our comparable hotel propertiesAcquisitions and WorldQuest. The increase from our comparable hotel properties was primarily attributable to uninsured hurricane related costs of $2.8 million and $4.2 million from an additional accrual related to the final judgment in the lawsuit captioned Palm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc. See note 12 to our consolidated financial statements.
Property Taxes, Insurance, and Other. Property taxes, insurance, and other increased $122,000 or 0.2%, to $73.6 million during 2017 compared to 2016. The increase was primarily due to $3.3$7.6 million from our comparable hotel properties and WorldQuest, partially offset by a decrease of $3.2$3.4 million from our Hotel Dispositions. Direct expenses were 29.7% of total hotel revenue for 2019 and 29.6% for 2018. Indirect expenses and management fees increased $29.6 million in 2019 compared to 2018, which was comprised of an increase of $19.0 million from our Hotel Acquisitions and $15.2 million from our comparable hotel properties and WorldQuest, partially offset by a decrease of $4.6 million from our Hotel Dispositions.
DepreciationProperty Taxes, Insurance, and Amortization. DepreciationOther. Property taxes, insurance, and amortizationother increased $2.9$5.8 million or 1.2%7.3%, to $246.7$84.1 million during 20172019 compared to 2016.2018. The increase was primarily due to $12.2an increase of $4.5 million from our Hotel Acquisitions and $2.7 million at our comparable hotel properties and WorldQuest, partially offset by a property tax refund of depreciation$590,000 and a decrease of $843,000 from our Hotel Dispositions.
Depreciation and Amortization. Depreciation and amortization increased $10.5 million or 4.1%, to $269.0 million during 2019 compared to 2018. The increase was primarily due to an increase of $6.1 million from our Hotel Acquisitions and $6.6 million at our comparable hotel properties and WorldQuest, partially offset by a decrease of $9.3$2.2 million from our Hotel Dispositions.
Impairment Charges. We recorded impairmentImpairment charges ofincreased $10.2 million, and $17.8or 43.8%, to $33.6 million in 2017 and 2016, respectively.2019 compared to 2018. We recorded an impairment charge of $2.0$33.6 million in 2017 for damages to hotel properties from Hurricanes Harvey and Irma and an impairment charge totaling $8.22019 that was comprised of $5.1 million at the SpringHill Suites in Centreville, VirginiaCourtyard Savannah Downtown and $1.4 million at the SpringHill Suites in Glen Allen, Virginia.Hilton Garden Inn Wisconsin Dells as a result of their sales as well as $10.2 million at the Washington Hampton Inn Pittsburgh Meadow Lands, $9.3 million at the Pittsburgh Hampton Inn Waterfront, and $7.6 million at the Stillwater Residence Inn as a result of changes to the expected holding periods of these hotel properties. We recorded an impairment charge of $17.8$23.4 million in 20162018 which was comprised of a $9.9 million impairment charges totaling $18.3charge at the San Antonio Marriott, a $6.7 million onimpairment charge at the Annapolis Crowne Plaza, a $5.1 million impairment charge at the Hilton Garden Inn Wisconsin Dells and a $2.0 million impairment charge at the SpringHill Suites Gaithersburg, Embassy Suites Syracuse and Renaissance Portsmouth,Centreville. This increase was partially offset by an impairment creditcredits of $500,000 related to a valuation adjustment on a previously impaired mezzanine loan.$275,000 from changes in estimates of property damage incurred from Hurricanes Harvey and Irma.
Transaction Costs. Transaction costs decreased $63,000$9,000 or 81.8%, to $14,000$2,000 in 20172019 compared to 2016.2018.
Advisory Service Fee. The advisory services fee decreased $1.2$5.5 million or 2.1%7.9%, to $53.2$63.6 million in 20172019 compared to 2016, which2018. The advisory services fee represents a fee paidfees incurred in connection with ourthe advisory agreement withbetween Ashford Inc. and the Company. In 2017,2019, the advisory services fee was comprised of a base advisory fee of $34.7$36.3 million, equity-based compensation of $11.1$18.0 million fromassociated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $7.5$9.3 million. In 2016,2018, the advisory services fee was comprised of a base advisory fee of $34.6$35.5 million, reimbursable expenses of $5.9 million, an incentive fee of $5.4 million and equity-based compensation of $8.4$25.2 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and reimbursable expenses of $8.4 million. In 2018, approximately $4.5 million of the equity-based compensation expense was related to the accelerated vesting of equity awards granted to one of our executive officers upon his death, in accordance with the terms of the awards.
Corporate, General and Administrative. Corporate, general and administrative expenses increased $4.9 million,$176,000, or 58.8%1.6%, to $13.3$11.1 million during 20172019 compared to 2016.2018. The increase in 2019 was primarily attributable to higher transaction, acquisition$896,000 of reimbursed operating expenses of Ashford Securities paid by Ashford Trust. These costs were partially offset by lower legal and management conversion costsprofessional fees of $2.5 million and higher$454,000, public company costs office expenses, professional feesof $89,000 and other miscellaneous expenses of $2.5 million$177,000 in 20172019 compared to 2016.2018.
Gain (Loss) on Sale of Assets and Hotel Properties. Gain on the sale of assets and hotel properties was $26.1 million and $475,000 in the 2019 and 2018, respectively. The gain in 2019 was comprised of $19.4 million gain related to the disposition of

land at Hilton St. Petersburg Bayfront, $6.5 million gain related to the sales of the SpringHill Suites Jacksonville, San Antonio Marriott and two units at WorldQuest and a $561,000 gain related to the sale of assets at the Santa Fe La Posada, Hilton Santa Cruz/Scotts Valley, Minneapolis Le Meridien and the Embassy Suites New York Manhattan Times Square related to ERFP. These gains were partially offset by a loss of $352,000 from the sale of the Hilton Garden Inn Wisconsin Dells and Courtyard Savannah. The gain in 2018 was comprised of a $488,000 gain from the sales of the Tampa Residence Inn and SpringHill Suites Centreville, partially offset by a loss of $13,000 from the sale of the SpringHill Suites Glen Allen.
Equity in Earnings (Loss) of Unconsolidated Entities. We recordedEquity in earnings (loss) of unconsolidated entities changed $3.2 million from equity in earnings of $867,000 in 2018 to equity in loss of unconsolidated entities of $5.9 million and $6.1$2.3 million in 2017 and 2016, respectively.2019. In 20172019, we recorded equity in loss of $5.4$1.9 million from Ashford Inc. and $481,000$411,000 from OpenKey, partially offset byOpenKey. In 2018, we recorded equity in earnings of $52,000$1.5 million from the AQUA U.S. Fund. In 2016 we recordedAshford Inc. partially offset by an equity in loss of $5.1 million$592,000 from the AQUA U.S. Fund, $743,000 from Ashford Inc. and $305,000 from OpenKey.
Interest Income. Interest income was $2.2$3.1 million and $331,000 in 2017 and 2016, respectively.
Gain (Loss) on Acquisition of PIM Highland JV and Sale of Hotel Properties. Gain on acquisition of PIM Highland JV and sale of hotel properties was $14.0 million and $31.6$4.0 million in 20172019 and 2016,2018, respectively. The gain in 2017 was related to a gain of $14.1 million on the sale of the Crowne Plaza Ravinia, slightly offset by losses from the sales of the Renaissance Portsmouth and Embassy Suites Syracuse. The gain in 2016 was primarily related to our Hotel Dispositions, slightly offset by a loss on the sale of a vacant lot associated with the Le Pavillon Hotel in New Orleans, Louisiana.
Other Income (Expense). Other expense decreased $1.1income increased $10.4 million or 24.2%, to $3.4$10.5 million in 2017during 2019 compared to 2016.2018. In 2017,2019, we recognizedrecorded a realized lossesgain on our disposition of $4.2 million related to the terminationour investment in Ashford Inc. of CMBX tranches, $543,000 on the maturities of options on futures contracts and $1.0 million of CMBX premiums and usage fees. These realized losses were partially offset by

dividend income of $1.1$11.8 million, a realized gain of $971,000 on marketable securities of $84,000, dividend income of $271,000 and other income of $219,000; partially offset by expense of $1.1 million related to CMBX premiums and interest paid on collateral and a realized loss of $800,000 on interest rate floors. In 2018, we recorded dividend income of $603,000, a realized gain on marketable securities of $89,000 and other miscellaneous income of $250,000. In 2016, we recognized realized losses$417,000; partially offset by expense of $3.3$1.0 million related to the termination of CMBX tranches, $313,000 related to the maturity of options on futures contracts, $150,000 from an investment write-off and $872,000 of CMBX premiums and usage fees.interest paid on collateral.
Interest Expense and Amortization of Loan Costs. Interest expense and amortization of loan costs decreased $1.3increased $25.2 million or 0.6%10.6%, to $222.6$262.0 million during 20172019 compared to 2016.2018. The decreaseincrease is primarily due to higher interest expense and amortization of loan costs of $13.9 million due to higher LIBOR rates and higher amortization of loan costs from refinances at our comparable hotel properties and $13.5 million from our Hotel Acquisitions, partially offset by lower interest expense and amortization of loan costs of $8.1$2.2 million from loan repayments resulting from our Hotel Dispositions, partially offset by an increase of $6.8 million from higher interest expense and amortization of loan costs as a result of refinances and an increase in LIBOR rates.Dispositions. The average LIBOR rates in 20172019 and 20162018 were 1.11%2.22% and 0.45%2.00%, respectively.
Write-off of Premiums, Loan Costs and Exit Fees. Write-off of premiums, loan costs and exit fees was $2.8 million and $12.7$8.8 million in 20172019 and 2016,2018, respectively. In 2017, we incurred write-off of premiums and loan costs of $324,000 and exit fees of $2.5 million from refinancing a mortgage loan secured by the Nashville Renaissance and Princeton Westin as well as the refinance of a mortgage loan secured by 17 hotel properties. In 2016,2019, we incurred write-off of loan costs and exit fees of $12.7$2.8 million resulting fromconsisting of the write-off of unamortized loan costs of $897,000$2.4 million and other costs of $490,000 as a result of loan refinances and hotel property sales. In 2018, we incurred write-off of loan costs and exit fees of $11.8$8.8 million related toconsisting of the salewrite-off of unamortized loan costs of $2.9 million and other costs of $6.0 million as a five-hotel portfolioresult of the refinancing of mortgage loans and the Hampton Inn Gainesville.hotel property sales.
Unrealized Gain (Loss) on Marketable Securities. Unrealized We recognized a $1.9 million unrealized gain (loss) on marketable securities was a loss of $4.6 million in 20172019 and a gain of $4.9$1.0 million unrealized loss on marketable securities in 2016,2018, which are based on changes in closing market prices during the period.
Unrealized Gain (Loss) on Derivatives. Unrealized loss on derivatives increased $268,000$2.3 million or 10.6%106.3%, to $2.8$4.5 million during 20172019 compared to 2016.2018. In 2017,2019, we recognized an unrealized loss of $3.2 million related to CMBX tranches, $1.7 million associated with interest rate caps, and $437,000 from interest rate floors. These losses were partially offset by an unrealized gain of $800,000 associated with the recognition of realized losses from the termination of interest rate floors. In 2018, we recognized unrealized losses of $4.2$2.7 million $2.4 million and $758,000 associated with the remaining CMBX tranches, interest rate floors, andfrom interest rate caps respectively,and $488,000 from interest rate floors, partially offset by unrealized gains of $4.2 million associated with the reclassification to other income (expense) for the recognition of realized losses$988,000 from CMBX tranche terminations and $427,000 associated with the reclassification to other income (expense) for maturities of options on futures contracts. In 2016, we recorded an unrealized gain of $611,000 related to interest rate floors, a $3.3 million unrealized gain associated with the reclassification to other income (expense) for the recognition of the realized loss from CMBX tranche terminations and a $313,000 unrealized gain associated with the reclassification to other income (expense) for the maturity of options on futures contracts, partially offset by unrealized losses of $5.8 million, $348,000 and $536,000 on the remaining CMBX tranches, options on futures contracts and interest rate derivatives, respectively. The fair value of interest rate floors and interest rate derivatives are primarily based on movements in the LIBOR forward curve and the passage of time. The fair value of options on futures contracts is determined based on the last reported settlement price as of the measurement date. The fair value of credit default swaps is based on the change in value of CMBX indices.tranches.
Income Tax (Expense) Benefit. Income tax (expense) benefit changed $3.8expense decreased $1.6 million from expense of $1.5or 56.2%, to $1.2 million in 20162019 compared to a benefit of $2.2 million in 2017.2018. The change in income tax benefit (expense) isdecrease was primarily due to a decrease in the profitability of the Company’s taxable REIT subsidiariesour TRS entities in 20172019 compared to 2016 as well as the estimated benefit related to the Tax Cuts and Jobs Act of 2017.2018.
(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partner in consolidated entities waswere allocated losses of $110,000$112,000 and $14,000$30,000 during 20172019 and 2016,2018, respectively.
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in our operating partnership were allocated their proportionate share of net loss of $21.6$28.9 million and $12.5$29.3 million in 20172019 and 2016,2018, respectively. Redeemable noncontrolling interests represented ownership interests of 15.52%15.92% and 14.48%14.64% in the operating partnership at December 31, 20172019 and 2016,2018, respectively.

Comparison of Year Ended December 31, 2016 with Year Ended December 31, 2015
All hotel properties owned for the years ended December 31, 2016 and 2015 have been included in our results of operations during the respective periods. Based on when a hotel property was acquired or disposed, operating results for certain hotel properties are not comparable for the years ended December 31, 2016 and 2015. The hotel properties listed below are not comparable hotel properties for the periods indicated and all other hotel properties are considered comparable hotel properties. The following acquisitions and dispositions affect reporting comparability related to our consolidated financial statements:
Hotel Properties
Location
TypeDate
Lakeway Resort & Spa (1)
Austin, TXAcquisitionFebruary 6, 2015
Memphis Marriott East (1)
Memphis, TNAcquisitionFebruary 25, 2015
PIM Highland JV (28.26% interest) (28 hotels)VariousAcquisitionMarch 6, 2015
Hampton Inn & Suites (1)
Gainesville, FLAcquisitionApril 29, 2015
Le Pavillon Hotel (1)
New Orleans, LAAcquisitionJune 3, 2015
9-hotel portfolio (1)
VariousAcquisitionJune 17, 2015
W Atlanta Downtown (1)
Atlanta, GAAcquisitionJuly 1, 2015
Le Meridien Minneapolis (1)
Minneapolis, MNAcquisitionJuly 23, 2015
Hilton Garden Inn - Wisconsin Dells (1)
Wisconsin Dells, WIAcquisitionAugust 5, 2015
Hotel Indigo Atlanta (1)
Atlanta, GAAcquisitionOctober 15, 2015
W Minneapolis Foshay (1)
Minneapolis, MIAcquisitionNovember 10, 2015
5-hotel portfolio (2)
VariousDispositionJune 1, 2016
Hampton Inn & Suites (2)
Gainesville, FLDispositionSeptember 1, 2016
SpringHill Suites Gaithersburg (2)
Gaithersburg, MDDispositionOctober 1, 2016
2-hotel portfolio (2)
Palm Desert, CADispositionOctober 7, 2016

(1) Collectively reported as (“2015 Hotel Acquisitions”)
(2) Collectively reported as (“2016 Hotel Dispositions”)
The following table illustrates the key performance indicators of the hotel properties and WorldQuest included in our results of operations:
 Year Ended December 31,
 2016 2015
RevPAR (revenue per available room)$118.44
 $114.25
Occupancy77.00% 77.27%
ADR (average daily rate)$153.83
 $147.85
The following table illustrates the key performance indicators of the 78 hotel properties and WorldQuest that were included for the full years ended 2016 and 2015, respectively:
 Year Ended December 31,
 2016 2015
RevPar (revenue per available room)$118.21
 $113.52
Occupancy78.86% 78.21%
ADR (average daily rate)$149.91
 $145.15
Net Income (Loss) Attributable to the Company. Net income (loss) attributable to the Company changed $317.2 million, from net income of $270.9 million for the year ended December 31, 2015 (“2015”) to net loss of $46.3 million for the year ended December 31, 2016 (“2016”) as a result of the factors discussed below.
Revenue. Rooms revenue from our hotel properties increased $121.2 million, or 11.4%, to $1.2 billion during 2016 compared to 2015. We experienced an increase in rooms revenue of $66.6 million as a result of the PIM Highland JV acquisition, $53.5

million associated with the 2015 Hotel Acquisitions and $27.1 million from our comparable hotel properties and WorldQuest, which experienced an increase of 65 basis points in occupancy and an increase of 3.3% in room rates. This increase was offset by lower revenue of $26.0 million resulting from our 2016 Hotel Dispositions.
Food and beverage revenue experienced an increase of $26.1 million, or 11.5%, to $253.2 million during 2016 compared to 2015. This increase is a result of $20.2 million from the PIM Highland JV acquisition, $10.0 million associated with the 2015 Hotel Acquisitions, offset by lower revenue of $2.2 million from our comparable hotel properties and WorldQuest and $1.5 million resulting from our 2016 Hotel Dispositions.
Other hotel revenue, which consists mainly of Internet access, parking, and spa, experienced an increase of $8.2 million, or 16.8%, to $56.9 million during 2016 compared to 2015. This increase is a result of $3.3 million from the PIM Highland JV acquisition, $5.4 million associated with the 2015 Hotel Acquisitions and $270,000 from our comparable hotel properties and WorldQuest, offset by lower revenue of $815,000 from our 2016 Hotel Dispositions. Other non-hotel revenue decreased $414,000, or 19.2% to $1.7 million during 2016 compared to 2015. The decrease in other non-hotel revenue is primarily attributable to the acquisition of the PIM Highland JV. Prior to the acquisition, we received expense reimbursements related to our managing the day-to-day operations and providing corporate administrative services such as accounting, insurance, marketing support, asset management, and other services.
Hotel Operating Expenses. Hotel operating expenses increased $98.2 million, or 11.7%, to $938.4 million during 2016 compared to 2015. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and management fees. We experienced an increase in direct expenses of $44.9 million in 2016 compared to 2015. The increase in direct expenses was comprised of $29.5 million from the PIM Highland JV acquisition, $20.0 million as a result of the 2015 Hotel Acquisitions and $4.5 million from our comparable hotel properties and WorldQuest, offset by a decrease of $9.1 million from our 2016 Hotel Dispositions. Direct expenses were 30.2% and 30.4% of total hotel revenue in 2016 and 2015, respectively. We experienced an increase in indirect expenses and management fees of $53.3 million in 2016 compared to 2015, which was comprised of $31.1 million from the PIM Highland JV acquisition, $23.2 million from the 2015 Hotel Acquisitions and $8.3 million from our comparable hotel properties and WorldQuest, offset by a decrease of $9.4 million from our 2016 Hotel Dispositions. The increases from our comparable hotel properties and WorldQuest are attributable to higher hotel revenues at those properties.
Property Taxes, Insurance, and Other. Property taxes, insurance, and other increased $8.2 million or 12.5%, to $73.5 million during 2016 compared to 2015. The increase was comprised of $3.7 million of property taxes, insurance, and other associated with the PIM Highland JV acquisition, $5.0 million associated with the 2015 Hotel Acquisitions and $1.6 million from our comparable hotel properties and WorldQuest. This increase was partially offset by $1.7 million from our 2016 Hotel Dispositions.
Depreciation and Amortization. Depreciation and amortization increased $33.5 million or 15.9%, to $243.9 million during 2016 compared to 2015. The increase was primarily due to $12.8 million of depreciation and amortization associated with the PIM Highland JV acquisition and $14.7 million associated with the 2015 Hotel Acquisitions. The remaining increase of $11.6 million is attributable to capital expenditures at our comparable hotel properties that have occurred since December 31, 2015. These increases were offset by a decrease of $5.6 million from our 2016 Hotel Dispositions.
Impairment Charges. We recorded impairment charges of $17.8 million and $19.5 million in 2016 and 2015, respectively. We recorded impairment charges on the SpringHill Suites Gaithersburg, Embassy Suites Syracuse and Renaissance Portsmouth totaling $18.3 million, offset by an impairment credit of $500,000 in 2016 and on the SpringHill Suites Gaithersburg and Residence Inn Las Vegas totaling $19.9 million, offset by an impairment credit of $439,000 in 2015.
Transaction Costs. Transaction costs decreased $6.2 million or 98.8%, to $77,000 in 2016 compared to 2015. The decrease is primarily attributable to the costs related to the acquisitions of the PIM Highland JV, Lakeway Resort, Memphis Marriott, Hampton Inn Gainesville, Le Pavillon, Rockbridge Portfolio, W Atlanta, Le Meridien Minneapolis, Hilton Garden Inn - Wisconsin Dells, Hotel Indigo Atlanta and W Minneapolis in 2015.
Advisory Service Fee. Advisory services fees increased $11.3 million or 26.4%, to $54.4 million in 2016 compared to 2015, which represent fees paid in connection with our advisory agreement with Ashford Inc. For 2016, the advisory services fee comprised of a base advisory fee of $34.6 million, reimbursable expenses of $5.9 million, an incentive fee of $5.4 million and equity-based compensation of $8.4 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. in connection with providing advisory services. For 2015, the advisory services fee comprised of a base advisory fee of $33.8 million, reimbursable expenses of $6.5 million and equity-based compensation of $2.7 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.
Corporate, General, and Administrative. Corporate, general, and administrative expenses decreased $5.9 million, or 41.5%, to $8.4 million during 2016 compared to 2015. The decrease was primarily attributable to $5.4 million of transaction, acquisition

and management conversion costs in the 2015, as well as lower public company costs, office expenses, professional fees and other miscellaneous expenses of approximately $502,000 in 2016.
Equity in Earnings (Loss) of Unconsolidated Entities. We recorded equity in loss of unconsolidated entities of $6.1 million and $6.8 million in 2016 and 2015, respectively. In 2016, we recorded equity in loss of $5.1 million in AQUA U.S. Fund, $743,000 in Ashford Inc. and $305,000 in OpenKey. In 2015, we recorded equity in loss of $3.4 million in the AQUA U.S. Fund, $3.8 million in PIM Highland JV and $483,000 in Ashford Inc., offset by equity in earnings in Ashford Prime of $874,000.
Interest Income. Interest income was $331,000 and $90,000 in 2016 and 2015, respectively.
Gain (Loss) on Acquisition of PIM Highland JV and Sale of Hotel Properties. Gain on acquisition of PIM Highland JV and sale of hotel properties was $31.6 million and $380.8 million for 2016 and 2015, respectively. The gain in 2016 was primarily related to our 2016 Hotel Dispositions, offset by a loss on the sale of a vacant lot associated with the Le Pavillon Hotel in New Orleans, Louisiana. See note 5 to our consolidated financial statements. The gain in 2015 was primarily related to the acquisition of the remaining interest in the PIM Highland JV in March 2015.
Other Income (Expense). Other income (expense) increased $3.7 million, or 422.8%, from a loss of $864,000 during 2015 to a loss of $4.5 million during 2016. In 2016 we recognized a realized loss of $3.3 million related to the termination of CMBX tranches, $313,000 related to the maturity of options on futures contracts, $150,000 as a result of an investment write-off and $872,000 related to CMBX premiums and usage fees. As a result of the contribution of certain marketable securities in consideration for an ownership interest in the AQUA U.S. Fund we no longer have realized gain or loss on marketable securities and dividend income. In 2015 prior to our contribution to the AQUA U.S. Fund we recognized a realized gain on marketable securities of $1.9 million and dividend income of $255,000.
Interest Expense and Amortization of Loan Costs. Interest expense and amortization of loan costs increased $36.5 million or 19.4%, to $224.0 million during 2016 compared to 2015. The increase is primarily due to $14.8 million of higher interest expense and amortization associated with the PIM Highland JV acquisition and refinance, higher interest expense and loan cost amortization as a result of new financings on the majority of the 2015 Hotel Acquisitions of $12.5 million and higher interest expense and loan cost amortization of $12.6 million as a result of refinances on our comparable hotel properties, offset by lower interest expense and amortization of loan costs of $3.4 million resulting from our 2016 Hotel Dispositions. The average LIBOR rates in 2016 and 2015 were 0.45% and 0.20%, respectively.
Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $12.7 million and $5.8 million in 2016 and 2015, respectively. For 2016, we wrote-off unamortized loan costs of $897,000 and incurred defeasance and other exit fees of $11.8 million. For 2015, we wrote-off unamortized loan costs of $122,000 and incurred defeasance and other exit fees of $5.6 million.
Unrealized Gain (Loss) on Marketable Securities. Unrealized gain (loss) on marketable securities was a gain of $4.9 million and $127,000 in 2016 and 2015, respectively, which are based on changes in closing market prices during the period.
Unrealized Gain (Loss) on Derivatives. Unrealized gain (loss) on derivatives decreased $4.9 million or 65.8%, to a loss of $2.5 million during 2016 compared to 2015. In 2016, we had an unrealized gain of $611,000 related to interest rate floors, a $3.3 million unrealized gain associated with the recognition of the realized loss from CMBX tranche terminations and a $313,000 unrealized gain associated with the maturity of an option on futures contract, offset by unrealized losses of $5.8 million, $348,000 and $536,000 on the remaining CMBX tranches, options on futures contracts and interest rate caps, respectively. In 2015, we had unrealized losses consisting of $7.6 million, $2.0 million and $391,000 related to interest rate floors, interest rate caps and options on futures contracts, respectively, offset by an unrealized gain of $2.6 million on credit default swaps. The fair values of interest rate floors and interest rate derivatives are primarily based on movements in the LIBOR forward curve and the passage of time. The fair value of options on futures contracts is determined based on the last reported settlement price as of the measurement date. The fair value of credit default swaps is based on the change in value of CMBX indices.
Income Tax Benefit (Expense). Income tax benefit (expense) decreased $3.2 million, or 67.5% from expense of $4.7 million in 2015 to $1.5 million during 2016. The decrease in income tax expense is primarily due to a decrease in profitability for our wholly owned TRS entities.
Gain (Loss) on Sale of Hotel Property, net of tax. Gain (loss) on sale of hotel properties, net of tax, was a gain of $599,000 in 2015. We recognized a previously deferred gain of $599,000 on the sale of the Pier House Resort as a result of the distribution of Ashford Prime OP common units to our stockholders and OP unitholders that eliminated our equity investment in Ashford Prime OP. See note 4 to our consolidated financial statements.

(Income) Loss from Consolidated Entities Attributable to Noncontrolling Interests. Our noncontrolling interest partner in consolidated entities was allocated losses of $14,000 and $30,000 during 2016 and 2015, respectively.
Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in our operating partnership were allocated their proportionate share of net loss of $12.5 million and net income of $35.5 million in 2016 and 2015, respectively. Redeemable noncontrolling interests represented ownership interests of 14.48% and 13.36% in the operating partnership at December 31, 2016 and 2015, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Our cash position from operations is affected primarily by macro industry movements in occupancy and rate as well as our ability to control costs. Further, interest rates can greatly affect the cost of our debt service as well as the value of any financial hedges we may put in place. We monitor industry fundamentals and interest rates very closely. Capital expenditures above our reserves will affect cash flow as well.

Certain of our loan agreements contain cash trap provisions that may get triggered if the performance of our hotels decline. When these provisions are triggered, substantially all of the profit generated by our hotels is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders.
Also, we have entered into certain customary guaranty agreements pursuant to which we guaranty payment of any recourse liabilities of our subsidiaries or joint ventures that may result from non-recourse carve-outs, which include, but are not limited to fraud, misrepresentation, willful misconduct resulting in waste, misappropriations of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral, and certain environmental liabilities. Certain of these guarantees represent a guaranty of material amounts, and if we are required to make payments under those guarantees, our liquidity could be adversely affected.
On February 1, 2017, we repaid $20.2 million of principal on our mortgage loan that was partially secured by the Renaissance Portsmouth. This hotel property was sold on February 1, 2017.
On March 6, 2017, we repaid $20.6 million of principal on our mortgage loan that was partially secured by the Embassy Suites Syracuse. This hotel property was sold on March 6, 2017.
On May 10, 2017, we refinanced a $105.0 million mortgage loan, secured by the Renaissance Nashville in Nashville, Tennessee and the Westin in Princeton, New Jersey. The new mortgage loan totals $181.0 million, of which our initial advance was $164.7 million with future advances totaling $16.3 million as reimbursement for capital expenditures. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due.The stated maturity is June 2022, with no extension options.
On May 24, 2017, we refinanced a $15.7 million mortgage loan, secured by the Hotel Indigo Atlanta. The new loan totals $16.1 million. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.90% for the first two years with a 30-year amortization schedule based on a 6% interest rate starting in the third year. The stated maturity is May 2020, with two one-year extension options.
On June 29, 2017, we repaid $78.7 million of principal on our mortgage loan partially secured by the Crowne Plaza Ravinia. This hotel property was sold on June 29, 2017.
On August 25, 2017, the Company issued 3.4 million shares of 7.50% Series H cumulative preferred stock. The Series H cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series A cumulative preferred stock (all shares redeemed on September 18, 2017), Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series G cumulative preferred stock and Series I cumulative preferred stock (discussed below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. On September 8, 2017, we issued 400,000 additional shares of 7.50% Series H cumulative preferred stock pursuant to the over-allotment option. Series H cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series H cumulative preferred stock is redeemable at our option for cash (on or after August 25, 2022), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series H cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series H cumulative preferred stock is convertible into a maximum 8.25083 shares of our common stock. The actual number is based on a formula as defined in the Series H cumulative

preferred stock agreement (unless the Company exercises its right to redeem the Series H cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series H cumulative preferred stock to common stock have not been met as of period end. Therefore, Series H cumulative preferred stock will not impact our earnings per share.
Dividends on the Series H cumulative preferred stock accrue in the amount of $1.8750 per share each year, which is equivalent to 7.50% of the $25.00 liquidation preference per share of Series H cumulative preferred stock. Dividends on the Series H cumulative preferred stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day). The first dividend on the Series H cumulative preferred stock was paid on October 16, 2017 in the amount of $0.1875 per share.
On September 18, 2017, the Company redeemed its 8.55% Series A cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4631 per share, for a total redemption price of $25.4631 per share.
On September 18, 2017, the Company redeemed approximately 1.6 million shares of its 8.45% Series D cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4577 per share, for a total redemption price of $25.4577 per share.
On October 4, 2017, the Company redeemed 379,036 shares of 8.45% Series D cumulative preferred shares at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.5516 per share, for a total redemption price of $25.5516 per share.
On October 30, 2017, we refinanced our $94.7 million mortgage loan, with an outstanding balance of $94.5 million, secured by the Hilton Boston Back Bay in Boston, Massachusetts. The new mortgage loan totals $97.0 million, provides for a floating interest rate of LIBOR + 2.00%, a five-year term with no extension options and is secured by the Hilton Boston Back Bay.
On October 31, 2017, we refinanced our $412.5 million mortgage loan, secured by seventeen hotels. The new mortgage loan totals $427.0 million, is interest only, provides for a floating interest rate of LIBOR + 3.00% and has a two-year initial term with five one-year extension options. The new mortgage loan is secured by the following seventeen hotels: the Courtyard Alpharetta, Courtyard Bloomington, Courtyard Crystal City, Courtyard Foothill Ranch, Embassy Suites Austin, Embassy Suites Dallas, Embassy Suites Houston, Embassy Suites Las Vegas, Embassy Suites Palm Beach, Hampton Inn Evansville, Hilton Garden Inn Jacksonville, Hilton Nassau Bay, Hilton St. Petersburg, Residence Inn Evansville, Residence Inn Falls Church, Residence Inn San Diego and Sheraton Indianapolis.
On November 17, 2017, the Company issued 5.4 million shares of 7.50% Series I cumulative preferred stock. The Series I cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series G cumulative preferred stock and Series H cumulative preferred stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series I cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series I cumulative preferred stock is redeemable at our option for cash (on or after November 17, 2022), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series I cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series I cumulative preferred stock is convertible into a maximum 8.06452 shares of our common stock. The actual number is based on a formula as defined in the Series I cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series I cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series I cumulative preferred stock to common stock have not been met as of period end. Therefore, Series I cumulative preferred stock will not impact our earnings per share.
Dividends on the Series I cumulative preferred stock accrue in the amount of $1.8750 per share each year, which is equivalent to 7.50% of the $25.00 liquidation preference per share of Series I cumulative preferred stock. Dividends on the Series I cumulative preferred stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day). The first dividend on the Series I cumulative preferred stock sold in this offering was paid on January 16, 2018 in the amount of $0.2292 per share.
On December 5, 2017, the board of directors reapproved a stock repurchase program (the “Repurchase Program”) pursuant to which the Boardboard of directors granted a repurchase authorization to acquire shares of the Company’s common stock par value $0.01 per share (the “Common Stock”)and preferred stock having an aggregate value of up to $200 million. The Board’sboard of directors’ authorization replaced any previous repurchase authorizations. We made no purchases under the Repurchase Program in 2019.
On December 11, 2017, we entered into equity distribution agreements with UBS Securities LLC,

Morgan Stanley & Co. LLC, B. Riley FBR, Inc., Robert W. Baird & Co. Incorporated, D.A. Davidson & Co., Deutsche Bank Securities Inc. and Janney Montgomery Scott LLC, each acting as acertain sales agent (the “Equity Distribution Agreements”). Pursuantagents to the Equity Distribution Agreements, we may sell from time to time through the sales agents shares of our common stock having an aggregate offering price of up to $100.0$100 million. Sales of shares of our common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the New York Stock Exchange,NYSE, the existing trading market for our common stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our common stock sold through such sales agent. No shares were issued during the year ended December 31, 2019. As of December 31, 2017, no2019, we have issued approximately 2.4 million shares of our common stock have been soldfor gross proceeds of approximately $15.5 million leaving approximately $84.5 million available under thisthe program.
On December 8, 2017,January 22, 2019, in connection with the Company redeemed approximately 5.1acquisition of the Embassy Suites New York Manhattan Times Square, we closed on a $145.0 million sharesmortgage loan. This mortgage loan is interest only and provides for an interest rate of its 8.45% Series D cumulative preferred stock atLIBOR + 3.90%. The stated maturity date of the mortgage loan is February 2022, with two one-year extensions. The mortgage loan is secured by the Embassy Suites New York Manhattan Times Square.
On February 26, 2019, in connection with the acquisition of the Hilton Santa Cruz/Scotts Valley, we assumed a redemption price$25.3 million non-recourse mortgage loan with a fair value of $25.00 per share, plus accrued$24.9 million. This mortgage loan amortizes monthly and unpaid dividends through the redemption date, in an amount equal to $0.3990 per share,provides for a total redemption pricefixed interest rate of $25.3990 per share.4.66%. The stated maturity date of the mortgage loan is March 2025. The mortgage loan is secured by the Hilton Santa Cruz/Scotts Valley.
On January 17, 2018,March 5, 2019, we refinanced our $376.8$178.1 million mortgage loan.loan, secured by the Renaissance Nashville and Westin Princeton. The new mortgage loan totaled $395.0totals $240.0 million. The new mortgage loan has a two-year initial termis interest only and provides for an interest rate of LIBOR + 2.75%. The stated maturity is March 2021 with five one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by the Renaissance Nashville and Westin Princeton.
On June 7, 2019, we amended the mortgage loan secured by the Fort Worth Ashton totaling $5.2 million. The amended mortgage loan totaling $8.9 million has a five-year term, is interest only and bears interest at a rate of LIBOR + 2.00%.
On August 2, 2019, we repaid $26.8 million of principal on our mortgage loan partially secured by the San Antonio Marriott as a result of the sale of the hotel property.
On August 6, 2019, we repaid $7.7 million of principal on our mortgage loan secured by the Hilton Garden Inn Wisconsin Dells as a result of the sale of the hotel property.
On August 14, 2019, we repaid $28.8 million of principal on our mortgage loan partially secured by the Courtyard Savannah as a result of the sale of the hotel property.
On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Ashford Trust has entered into a contribution agreement with Ashford Inc. pursuant to which Ashford Trust has agreed to contribute, with Braemar, up to $15.0 million to fund the operations of Ashford Securities. These costs will be allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% to Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised or June 10, 2023, there will be a true up (the “True-up Date”) between Ashford Trust and Braemar whereby the actual capital contributions contributed by each company will be based on the actual amount of capital

raised by Ashford Trust and Braemar, respectively. After the True-up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Funding advances will be expensed as the expenses are incurred by Ashford Securities. As of December 31, 2019, Ashford Trust has funded approximately $2.5 million.
On October 2, 2019, the Company entered into a stock purchase agreement with Ashford LLC under which Ashford LLC purchased all of the common of Ashford Inc. stock held by our TRS subsidiaries, totaling 393,077 shares, for $30 per share, resulting in total proceeds of approximately $11.8 million to the Company.
On October 15, 2019, we repaid approximately $8.0 million principal on our mortgage loan partially secured by the Hilton St. Petersburg Bayfront as a result of the sale of the 1.65-acre parking lot adjacent to hotel.
On December 27, 2019, we amended the mortgage loan secured by the Indigo Atlanta totaling $16.0 million. The amended mortgage loan totaling $16.1 million has a three-year term, is interest only and bears interest at a rate of LIBOR + 2.25%. The stated maturity is December 2022 with two one-year extension options, subject to the satisfaction of certain conditions.
On January 9, 2020, we refinanced our $43.8 million mortgage loan, secured by the Le Pavillon in New Orleans, Louisiana. We repaid $6.8 million on the existing loan. The new mortgage loan totals $37.0 million. The new mortgage loan is interest only and provides for a floatingan interest rate of LIBOR + 2.92%3.4%. The Mortgagestated maturity is January 2023 with two one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by eight hotels: Embassy Suites Portland, Embassy Suites Crystal City, Embassy Suites Orlando, Embassy Suites Santa Clara, Crowne Plaza Key West, Hilton Costa Mesa, Sheraton Minneapolis,the Le Pavillon.
Secured Credit Facility
On September 26, 2019, our secured revolving credit facility expired. We did not draw on the secured revolving credit facility while it was outstanding. Cash flows from operations, capital market activities and Historic Innsproperty refinancing proceeds have provided sufficient liquidity throughout the term of Annapolis.the secured revolving credit facility. Accordingly, the absence of a credit facility is not expected to have a significant impact on our liquidity.
Sources and Uses of Cash
Our principal sources of funds to meet our cash requirements include: cash on hand, positive cash flow from operations, capital market activities, property refinancing proceeds and asset sales. Additionally, our principal uses of funds are expected to include possible operating shortfalls, owner-funded capital expenditures, dividends, new investments, and debt interest and principal payments. Items that impacted our cash flow and liquidity during the periods indicated are summarized as follows:
Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by operating activities, pursuant to our consolidated statements of cash flows, which includes changes in balance sheet items, were $207.4$177.2 million and $179.7$181.6 million for the years ended December 31, 20172019 and 2016,2018, respectively. Cash flows from operations were impacted by changes in hotel operations, the operating results of our 20172019 and 20162018 hotel acquisitions and dispositions as well as the timing of collecting receivables from hotel guests, paying vendors, settling with related parties and settling with hotel managers.
Net Cash Flows Provided by (Used in) Investing Activities. For the year ended December 31, 2017,2019, investing activities used net cash flows of $63.9$253.2 million, which primarily consisted of cash outflows of $222.0$159.2 million for capital improvements made to various hotel properties, $3.4$212.6 million primarily for the purchase of proceeds from property insurancethe Embassy Suites New York Manhattan Times Square and an additional $984,000Hilton Santa Cruz/Scotts Valley, a $647,000 investment in OpenKey.OpenKey and $475,000 of payments for initial franchise fees. Cash outflows were partially offset by cash inflows of $105.3$102.7 million from proceeds received from the sales of the Renaissance Portsmouth, EmbassySan Antonio Marriott, Hilton Garden Inn Wisconsin Dells, Courtyard Savannah, SpringHill Suites SyracuseJacksonville, a parking lot adjacent to the Hilton St. Petersburg Bayfront and Crowne Plaza Ravinia and $50.9FF&E for ERFP, $11.8 million of proceeds from the liquidationsale of our interestinvestment in the AQUA U.S. Fund. Ashford Inc., $4.0 million of proceeds from franchise agreement extensions and $1.2 million of proceeds from property insurance.
For the year ended December 31, 2016,2018, investing activities used net cash flows of $21.9$329.6 million which primarily consisted of cash outflows of $204.0$162.6 million primarily for the purchase of the Hilton Alexandria Old Town and La Posada de Santa Fe and $207.3 million for capital improvements made to various hotel properties, $3.3 million for (i) the purchase of the land underlying the San Antonio Marriott; (ii) an interest in a permanent exclusive docking easement, a leasehold interest and certain floating docks on riverfront land located in front of the Hyatt Savannah; and (iii) a WorldQuest condominium unit and a $2.3 million$667,000 investment in OpenKey.OpenKey and $329,000 of payments for initial franchise fees. These outflows were partially offset by inflows of $181.8$40.6 million attributable to net cashfrom proceeds received from the salesales of the Noble Five Hotels, the Hampton Inn Gainesville, SpringHill Suites Gaithersburg, the Palm Desert hotel propertiesGlen Allen, SpringHill Suites Centreville and a vacant lot associated with Le Pavillon, $4.2 million of cash payments received on a previously impaired mezzanine loanResidence Inn Tampa and $1.9 million$651,000 of proceeds from property insurance.
Net Cash Flows Provided by (Used in) Financing Activities. For the year ended December 31, 2017,2019, net cash flows used inprovided by financing activities were $163.9$34.4 million. Cash outflowsinflows consisted of $754.8$404.8 million in borrowings on indebtedness. Cash inflows were partially offset by cash outflows, which consisted of $272.4 million for repayments of indebtedness, $218.4 million for the redemption of preferred stock, $101.6$86.2 million for dividend and distribution payments to common and preferred stockholders and unitholders, $13.9$9.6 million for payments of loan costs and exit fees, $1.3$1.1 million of payments for derivatives and $1.0 million for the repurchase of common stock and $871,000 of payments for derivatives. Cash outflows were partially offset by cash inflows of $704.8 million in borrowings on indebtedness and $222.1 million from issuance of preferred stock.

For the year ended December 31, 2016,2018, net cash flows provided by financing activities were $34.2$115.8 million. Cash inflows consisted primarily of $487.5 million$2.7 billion in borrowings on indebtedness and proceeds of $265.6$14.8 million from issuance of preferred stock.common stock and a $16.1 million deposit on ERFP assets from Ashford LLC. Cash inflows were partially offset by cash outlaysoutflows primarily consisting of $559.0 million$2.5 billion for repayments of indebtedness, $115.8$97.4 million for redemption of preferred stock, $91.5 million for dividend and distribution payments to common and preferred stockholders and unitholders, $20.2$55.6 million for payments of loan costs and exit fees, $3.2 million of payments for derivatives and $729,000$1.6 million for the repurchase of common stock.
We are required to maintain certain financial ratios under various debt and derivative agreements. If we violate covenants in any debt or derivative 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. Presently, our existing financial debt covenants primarily relate to maintaining minimum net worth and leverage ratios and liquidity. As of December 31, 2017,2019, we were in compliance in all material respects with all covenants or other requirements set forth in our debt and related agreements.
Mortgage and mezzanine loans are nonrecourse to the borrowers, except for customary exceptions or carve-outs that trigger recourse liability to the borrowers in certain limited instances. Recourse obligations typically include only the payment of costs and liabilities suffered by lenders as a result of the occurrence of certain bad acts on the part of the borrower. However, in certain cases, carve-outs could trigger recourse obligations on the part of the borrower with respect to repayment of all or a portion of the outstanding principal amount of the loans. We have entered into customary guaranty agreements pursuant to which we guaranty payment of any recourse liabilities of the borrowers that result from non-recourse carve-outs (which include, but are not limited to, fraud, misrepresentation, willful conduct resulting in waste, misappropriations of rents following an event of default, voluntary bankruptcy filings, unpermitted transfers of collateral, and certain environmental liabilities). In the opinion of management, none of these guaranty agreements, either individually or in the aggregate, are likely to have a material adverse effect on our business, results of operations, or financial condition.
Based on our current level of operations, management believes that our cash flow from operations and our existing cash balances willshould be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity payments), working capital, and capital expenditures for the next 12 months.months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes. With respect to upcoming maturities, we will continue to proactively address the refinancing or repayment of our 20192020 and 20202022 final debt maturities. No assurances can be given that we will obtain additional financings or, if we do, what the amount and terms will be. Our failure to obtain future financing under favorable terms could adversely impact our ability to execute our business strategy. In addition, westrategy or may selectively pursue debt financing on individual properties.result in lender foreclosure.
We are committed to an investment strategy where we will opportunistically pursue hotel-related investments as suitable situations arise. Funds for future hotel-related investments are expected to be derived, in whole or in part, from cash on hand, future borrowings under a credit facility or other loans, or proceeds from additional issuances of common stock, preferred stock, or other securities, asset sales, and joint ventures. However, we have no formal commitment or understanding to invest in additional assets, and there can be no assurance that we will successfully make additional investments. We may, when conditions are suitable, consider additional capital raising opportunities.
Our existing hotel properties are mostly located in developed areas with competing hotel properties. Future occupancy, ADR, and RevPAR of any individual hotel could be materially and adversely affected by an increase in the number or quality of competitive hotel properties, home sharing companies or apartment operators offering short-term rentals in its market area. Competition could also affect the quality and quantity of future investment opportunities.
Dividend Policy. During each of the quarters in the year ended December 31, 2019 our board of directors declared quarterly dividends of $0.12, $0.06, $0.06, and $0.06, per share of outstanding common stock. During each of the years ended December 31, 2017, 20162018 and 20152017 our board of directors declared quarterly dividends of $0.12 per share of outstanding common stock. In December 2017,2019, the board of directors approved our 20182020 dividend policy which anticipatesstated our then-expectation to pay a quarterly dividend payment of $0.12$0.06 per share for 2018. However,2020. As previously disclosed, the adoptionapproval of aour dividend policy doesdid not commit our board of directors to declare future dividends. As a result of the impact of the novel coronavirus (COVID-19) on our business, we expect that the board of directors will reconsider our previously announced dividend policy and may take further action with respect to 2020 dividends, including by eliminating or significantly reducing the dividend until such time as our business operating environment improves. The board of directors will continue to review our dividend policy on a quarterly basis.with respect to both our common stock and preferred stock and make future announcements with respect thereto. We may incur indebtedness to meet distribution requirements imposed on REITs under the Internal Revenue Code to the extent that working capital and cash flow from our investments are insufficient to fund required distributions. Alternatively, we may elect to pay dividends on our common stock in cash or a combination of cash and shares of securities as permitted under U.S. federal income tax laws governing REIT distribution requirements. We may pay dividends in excess of our cash flow.

INFLATION
We rely entirely on the performance of our hotel properties and the ability of the hotel properties’ managers to increase revenues to keep pace with inflation. Hotel operators can generally increase room rates, rather quickly, but competitive pressures may limit their ability to raise rates faster than inflation. Our general and administrative costs, real estate and personal property taxes, property and casualty insurance, labor costs and utilities are subject to inflation as well.
SEASONALITY
Our hotel properties’ operations historically have been seasonal as certain properties maintain higher occupancy rates during the summer months, while certain other properties maintain higher occupancy rates during the winter months. This seasonality pattern can cause fluctuations in our quarterly lease revenue under our percentage leases. We anticipate that our cash flows from the operations of our hotel properties will be sufficient to enable us to make quarterly distributions to maintain our REIT status. To the extent that cash flows from operations are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize other cash on hand or borrowings to fund required distributions. However, we cannot make any assurances that we will make distributions in the future.

OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, we form partnerships or joint ventures that operate certain hotels. We evaluate each partnership and joint venture to determine whether the entity is a Variable Interest Entity (“VIE”). If the entity is determined to be a VIE, we assess whether we are the primary beneficiary and need to consolidate the entity. For further discussion of the company’s VIEs, see note 2 to our consolidated financial statements.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The table below summarizes our future obligations for principal and estimated interest payments on our debt, future minimum lease payments on our operating and capital leases with regard to our continuing operations and capital commitments, each as of December 31, 20172019 (in thousands):
Payments Due by PeriodPayments Due by Period
< 1 Year 1-3 Years 3-5 Years > 5 Years Total< 1 Year 1-3 Years 3-5 Years > 5 Years Total
Contractual obligations excluding extension options:                  
Long-term debt obligations$2,671,185
 $552,426
 $270,363
 $229,594
 $3,723,568
$3,279,403
 $509,353
 $251,580
 $83,667
 $4,124,003
Estimated interest obligations (1)
110,865
 77,073
 41,488
 16,371
 245,797
114,514
 65,409
 20,085
 12,912
 212,920
Operating lease obligations2,529
 4,673
 4,340
 112,184
 123,726
3,425
 6,327
 6,052
 204,869
 220,673
Capital commitments44,368
 
 
 
 44,368
50,481
 
 
 
 50,481
Total contractual obligations$2,828,947
 $634,172
 $316,191
 $358,149
 $4,137,459
$3,447,823
 $581,089
 $277,717
 $301,448
 $4,608,077
_________________________
(1) 
For variable interest rate indebtedness, interest obligations are estimated based on the LIBOR interest rate as of December 31, 2017.2019.
In addition to the amounts discussed above, we also have management agreements which require us to pay monthly management fees, market service fees and other general fees, if required. These management agreements expire from 2020 through 2038. See note 1218 to our consolidated financial statements.
CRITICAL ACCOUNTING POLICIES
Our significant accounting policies are fully described in note 2 to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data. We believe that the following discussion addresses our most critical accounting policies, representing those policies considered most vital to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, and complex judgments.
Investments in Hotel Properties, net—Hotel properties are generally stated at cost. However, four hotel properties contributed upon Ashford Trust’s formation in 2003 are stated at the predecessor’s historical cost, net of impairment charges, if any, plus a partial step-up related to the acquisition of noncontrolling interests from third parties associated with certain of these properties. For hotel properties owned through our majority-owned entities, the carrying basis attributable to the partners’ minority ownership is recorded at the predecessor’s historical cost, net of any impairment charges, while the carrying basis attributable to our majority ownership is recorded based on the allocated purchase price of our ownership interests in the entities. All improvements and additions that extend the useful life of the hotel properties are capitalized.
Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period, and expected useful life. Fair

value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. We recorded impairment charges of $10.2$33.6 million, $1.8$23.4 million and $4.7$10.2 million for the years ended December 31, 2017, 20162019, 2018 and 2015,2017, respectively. See note 5 to our consolidated financial statements.

Depreciation and Amortization ExpenseIncome TaxesDepreciation expense is basedAs a REIT, we generally are not subject to federal corporate income tax on the estimated useful lifeportion of the assets, while amortization expense for leasehold improvements is based on the shorter of the lease term or the estimated useful life of the related assets. Presently, hotel properties are depreciated using the straight-line method over lives which range from 7.5 to 39 years for buildings and improvements and 1.5 to 5 years for furniture, fixtures and equipment. While we believe our estimates are reasonable, a change in estimated lives could affect depreciation expense and net income (loss) that does not relate to taxable REIT subsidiaries. However, Ashford TRS is treated as well as resulting gains or losses on potential hotel sales.
Hotel Dispositions—Discontinued operationsa TRS for U.S. federal income tax purposes. In accordance with authoritative accounting guidance, we account for income taxes related to Ashford TRS using the asset and liability method under which deferred tax assets and liabilities are defined asrecognized for future tax consequences attributable to differences between the disposalfinancial statement carrying amounts of components of an entity that represents strategic shifts that have (or will have) a major effect on an entity’s operationsexisting assets and financial results. We believe that individual dispositions of hotel properties do not represent a strategic shift that has (or will have) a major effect onliabilities and their respective tax bases. In addition, the analysis utilized by us in determining our operationsdeferred tax asset valuation allowance involves considerable management judgment and financial results as most will not fit the definition.assumptions. See note 519 to our consolidated financial statements.statements.
Assets Held for Sale—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale.
Income TaxesAt December 31, 20172019 and 2016,2018, we recorded a valuation allowance of $6.2$7.7 million and $15.4$10.0 million, respectively.respectively on the net deferred tax assets of our taxable REIT subsidiaries. At each reporting date, we evaluate whether it is more likely than not that we will utilize all or a portion of our deferred tax assets. We consider all available positive and negative evidence, including historical results of operations, projected future taxable income, carryback potential and scheduled reversals of deferred tax liabilities. At December 31, 2017,2019, we had net operating loss carryforwards for U.S. federal income tax purposes of $17.4$11.7 million, which begin to expire in 2029, and are available to offset future taxable income, if any, through 2034. Approximately $10.1 million2030. The majority of the $17.4$11.7 million of net operating loss carryforwards isare attributable to acquired subsidiaries and subject to substantial limitation on their use. Management determined that it is more likely than not that as of December 31, 2017, $6.22019, $7.7 million of our net deferred tax assets will not be realized, and a valuation allowance has been recorded accordingly. At December 31, 2017,2019, Ashford Hospitality Trust, Inc., our REIT, had net operating loss carryforwards for U.S. federal income tax purposes of $425.0$562.0 million, based on the latest filed tax return, which begin to expire in 2023,2024, and are available to offset future taxable income, if any, through 2035.2037.
The “Income Taxes” topic of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 20132015 through 20172019 remain subject to potential examination by certain federal and state taxing authorities.
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (“Tax Reform”) into legislation. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. In the case of U.S. federal income taxes, the enactment date is the date the bill becomes law (i.e., upon presidential signature). With respect to this legislation, we expect a one-time tax benefit of approximately $1 million, due to a re-measurement of deferred tax assets and liabilities resulting from the decrease in the corporate Federal income tax rate from 35% to 21% as well as the refund of existing credits against Alternative Minimum Tax. We are in the process of analyzing certain other provisions of this legislation which may impact our effective tax rate. Additionally on December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the estimated tax impacts related to the revaluation of deferred tax assets and liabilities as well as tax refunds and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these estimated amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The accounting is expected to be complete on or before the date the 2017 U.S. income tax returns are filed in 2018.

Investments in Unconsolidated Entities—Investments in entities in which we have ownership interests ranging from 16.2% to 28.6% at December 31, 2017, are accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review the investments in our unconsolidated entities for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity earnings (loss) in unconsolidated entities. No such impairment was recorded for the years ended December 31, 2017, 2016 and 2015.
Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIE’s, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis and therefore such entities should not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions.
Derivative Instruments and Hedges—We use interest rate derivatives to hedge our risks and to capitalize on the historical correlation between changes in LIBOR (London Interbank Offered Rate) and RevPAR. Interest rate derivatives could include swaps, caps, floors and flooridors. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of the designated hedged item or transaction. We also use credit default swaps to hedge financial and capital market risk. All of our derivatives are subject to master- netting settlement arrangements and the credit default swaps are subject to credit support annexes. For credit default swaps, cash collateral is posted by us as well as our counterparty. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral. We also purchase options on Eurodollar futures as a hedge against our cash flows. Eurodollar futures prices reflect market expectations for interest rates on three month Eurodollar deposits for specific dates in the future, and the final settlement price is determined by three month LIBOR on the last trading day. Options on Eurodollar futures provide the ability to limit losses while maintaining the possibility of profiting from favorable changes in the futures prices. As the purchaser, our maximum potential loss is limited to the initial premium paid for the Eurodollar option contracts, while our potential gain has no limit. 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 made good.
All derivatives are recorded at fair value in accordance with the applicable authoritative accounting guidance. Interest rate derivatives, credit default swaps and options on futures contracts are reported as “derivative assets, net” in the consolidated balance sheets. For interest rate derivatives, credit default swaps and options on futures contracts, changes in fair value and realized gains and losses are recognized in earnings as “unrealized gain (loss) on derivatives” and “other income (expense)”, respectively, in the consolidated statements of operations. Accrued interest on interest rate derivatives is included in “accounts receivable, net” in the consolidated balance sheets.
RECENTLY ADOPTED ACCOUNTING STANDARDS
In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017, and the adoption of this standard did not have any impact on our financial position, results of operations or cash flows.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which clarifies the presentation of restricted cash and restricted cash equivalents in the statements of cash flows. Under ASU 2016-18 restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017 on a retrospective basis. The adoption of this standard resulted in the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows for all periods presented. As a result, for the years ended December 31, 2016 and 2015, net cash provided by operating activities increased $4.7 million and $5.4 million, respectively. Net cash used in investing activities increased $13.9 million for the year ended December 31, 2016 and decreased $73.2 million for the year ended December 31, 2015. Our beginning-of-period cash, cash equivalents and restricted cash increased $144.0 million, $153.7 million and $85.8 million in 2017, 2016 and 2015, respectively.

RECENTLY ISSUED ACCOUNTING STANDARDS
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model, which requires a company to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The update will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to fiscal periods beginning after December 15, 2017. The standard permits the use of either the full retrospective or cumulative effect (modified retrospective) transition method. Based on our assessment of this standard, it will not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Additionally, we have historically disposed of hotel properties for cash sales with no contingencies and no future involvement in the hotel operations, therefore, ASU No. 2014-09 will not impact the recognition of hotel sales. We have selected the modified retrospective method. We continue to evaluate the related disclosure requirements.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We do not expect that ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures.
In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”)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 beUnder the new standard, lessee leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, is effectiveincluding but not limited to lease residual value guarantee, rate implicit in the lease, lease term and purchase option. The amendments in ASU 2018-11 provide an optional transition method 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 earliestnew standard, which allows entities to continue to apply the legacy guidance in Accounting Standards Codification (“ASC”) 840, including its disclosure requirements, in the comparative periodperiods presented in the year of adoption. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors (“ASU 2018-20”). The amendments create a lessor practical expedient applicable to sales and other similar taxes incurred in connection with a lease, and simplify lessor accounting for lessor costs paid by the lessee.
We adopted the standard effective January 1, 2019 on a modified retrospective basis and implemented internal controls to enable the preparation of financial statements, with certaininformation on adoption. We elected the practical expedients available.which provide us the option to apply the new guidance at its effective date on January 1, 2019 without having to adjust the comparative prior period financial statements. The accounting forpackage of practical expedients also allowed us to carry forward the historical lease classification. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases under which we arewith an initial term of twelve months or less (“short-term leases”) on the lessor remains largely unchanged. While we are currentlybalance sheet across all existing asset classes.
The adoption of this standard has resulted in the initial stages of assessing the impact that ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact to our consolidated financial statements upon adoption will be the recognition on a discounted basis, of our future minimum rentals due under our hotel ground leases and other noncancelable leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations.liabilities primarily related to our ground lease arrangements for which we are the lessee. As of January 1, 2019, we recorded operating lease liabilities of $43.3 million as

well as a corresponding operating lease ROU asset of $38.8 million, which includes, among other things, reclassified intangible assets of $9.0 million, intangible liabilities of $13.0 million and deferred rent of $485,000. The standard did not have a material impact on our consolidated statements of operations and statements of cash flows. See related disclosures in note 6.
RECENTLY ISSUED ACCOUNTING STANDARDS
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"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 permittedIn November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”). ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for periods beginning after December 15, 2018.in accordance with Topic 842, Leases. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates (“ASU 2018-19”). In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2019-11”). ASU 2019-11, clarifies specific issues within the amendments of ASU 2016-13. We are currently evaluating the impact that ASU 2016-13 will have on theour consolidated financial statements and related disclosures.
In August 2016,January 2020, the FASB issued ASU 2016-15, Statement of Cash Flows2020-01, Investments – Equity Securities (Topic 230): Classification of Certain Cash Receipts321), Investments—Equity Method and Cash Payments - aJoint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task ForceForce) (“ASU 2016-15”2020-01”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in, which clarifies 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 frominteraction between the settlement of insurance claims, distributions received fromaccounting for equity securities, equity method investments, and beneficial interestscertain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in securitization transactions.accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2016-152020-01 is effective for fiscal years beginning after December 15, 2017,2020, and interim periods within those fiscal years.years and should be applied prospectively. Early adoption is permitted. We are currently evaluating the impact that ASU 2016-152020-01 will have on our consolidated financial statements and related disclosures.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. While we are currently evaluating the potential impact of the standard, we currently expect that certain future hotel acquisitions may be considered asset acquisitions

rather than business combinations, which would affect capitalization of acquisitions costs (such costs are expensed for business combinations and capitalized for asset acquisitions).
In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets(ASU “2017-05”), which clarifies the scope of Accounting Standard Codification (“ASC”) Subtopic 610-20,Other Income-Gains and Losses from the Derecognition of Nonfinancial Assetsand adds guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective for fiscal years beginning after December 15, 2017.Early adoption is permitted. An entity may elect to apply ASU 2017-05 under a retrospective or modified retrospective approach. We are evaluating the impact that ASU 2017-05 will have on our consolidated financial statements and related disclosures.

NON-GAAP FINANCIAL MEASURES
The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDA,EBITDAre, FFO and Adjusted FFOAFFO are madepresented to help our investors in evaluatingevaluate our operating performance.
EBITDA is defined as net income (loss) attributable to the Company before interest expense and amortization of premiums and loan costs, net, interest income other than interest income from mezzanine loans, income taxes, depreciation and amortization, and noncontrolling interestsincome taxes, equity in the operating partnershipearnings/loss of unconsolidated entities and after adjustments forthe Company’s portion of EBITDA of unconsolidated joint ventures. entities. In addition, we include impairment charges on real estate and gain/loss on sale of hotel properties to calculate EBITDAre, as defined by NAREIT.
We then further adjust EBITDAEBITDAre to exclude certain additional items such as gain/loss on acquisition of PIM Highland JV and sale of hotel properties, impairment and uninsured hurricane related costs, gain/loss on insurance settlements, write-off of premiums, loan costs and exit fees, other income/expense, net, transaction, acquisition and management conversion costs, legal, judgmentadvisory and related legalsettlement costs, dead deal costs, software implementation costs, compensation adjustment related to modified employment terms and non-cash items such as amortization of unfavorable contract liabilities, gain /loss on insurance settlements, non-cash stock/unit-based compensation, unrealized gains/losses on marketable securities, derivative instruments, investment in securities investment fund, as well as our portion of adjustments to EBITDAEBITDAre of unconsolidated entities. We exclude items from Adjusted EBITDA that are either non-cash or are not part of our core operations in order to provide a period-over-period comparison of our operations.
We present EBITDA, EBITDAre and Adjusted EBITDAEBITDAre because we believe these measurements a)they reflect more accurately reflect the ongoing performance of our hotel assets and other investments b)and provide more useful information to investors as they are indicators of our ability to meet our future debt payment andrequirements, working capital requirements and c)they provide an overall evaluation of our financial condition. EBITDA, EBITDAre and Adjusted EBITDAEBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAEBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAEBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAEBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to a) GAAPoperating income or net income or lossdetermined in accordance with GAAP as an indicationindicator of our financial performance or b) GAAPas an alternative to cash flows from operating activities as a measuredetermined by GAAP as an indicator of our liquidity.
Beginning with the three months ended March 31, 2018, we have started reporting EBITDA for real estate, or EBITDAre, as defined by NAREIT, and Adjusted EBITDAre. Previously, we reported Adjusted EBITDA. Adjusted EBITDAre is calculated in a similar manner as Adjusted EBITDA, with the exception of the adjustment for the consolidated noncontrolling interest’s pro rata share of Adjusted EBITDA. The rationale for including 100% of EBITDAre for consolidated noncontrolling interests is that

the full amount of any debt of these entities is reported in our consolidated balance sheet and therefore metrics using total debt to EBITDAre provide a better understanding of the Company’s leverage. This is also consistent with NAREIT’s definition of EBITDAre. All prior periods have been adjusted to conform to the current period presentation.
The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAEBITDAre (in thousands) (unaudited):
 Year Ended December 31,
 2017 2016 2015
Net income (loss)$(88,760) $(58,782) $306,412
Loss from consolidated entities attributable to noncontrolling interests110
 14
 30
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership21,642
 12,483
 (35,503)
Net income (loss) attributable to the Company(67,008) (46,285) 270,939
Interest income(2,202) (331) (90)
Interest expense and amortization of premiums and loan costs, net222,516
 223,850
 187,396
Depreciation and amortization246,490
 243,617
 210,197
Income tax (benefit) expense(2,241) 1,532
 4,710
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership(21,642) (12,483) 35,503
Equity in (earnings) loss of unconsolidated entities5,918
 1,048
 3,445
Company’s portion of EBITDA of unconsolidated entities (Ashford Inc.)(1,666) 180
 828
Company’s portion of EBITDA of unconsolidated entities (OpenKey)(498) (303) 
Company’s portion of EBITDA of unconsolidated entities (Ashford Prime OP)
 
 7,640
Company’s portion of EBITDA of unconsolidated entities (PIM Highland JV)
 
 11,982
EBITDA available to the Company and OP unitholders379,667
 410,825
 732,550
Amortization of unfavorable contract liabilities(1,535) (2,101) (1,975)
Impairment and uninsured hurricane related costs12,982
 17,816
 19,511
(Gain) loss on acquisition of PIM Highland JV and sale of hotel properties(14,030) (31,599) (381,351)
(Gain) loss on insurance settlements(192) (456) 
Write-off of premiums, loan costs and exit fees2,845
 12,702
 5,750
Other (income) expense, net3,422
 4,517
 864
Transaction, acquisition and management conversion costs4,299
 1,778
 12,348
Legal judgment and related legal costs4,199
 1,176
 95
Unrealized (gain) loss on marketable securities4,649
 (4,946) (127)
Unrealized (gain) loss on derivatives2,802
 2,534
 7,402
Dead deal costs9
 391
 769
Software implementation costs1,034
 
 
Non-cash stock/unit-based compensation12,287
 9,672
 3,470
Company’s portion of unrealized loss of AQUA U.S. Fund(52) 5,062
 3,386
Company’s portion of adjustments to EBITDA of unconsolidated entities (Ashford Inc.)6,790
 3,729
 3,652
Company’s portion of adjustments to EBITDA of unconsolidated entities (OpenKey)13
 8
 
Company’s portion of adjustments to EBITDA of unconsolidated entities (Ashford Prime OP)
 
 738
Adjusted EBITDA available to the Company and OP unitholders$419,189
 $431,108
 $407,082
 Year Ended December 31,
 2019 2018 2017
Net income (loss)$(142,679) $(156,309) $(88,760)
Interest expense and amortization of premiums and loan costs, net262,001
 236,786
 222,631
Depreciation and amortization269,003
 258,458
 246,731
Income tax expense (benefit)1,218
 2,782
 (2,218)
Equity in (earnings) loss of unconsolidated entities2,307
 (867) 5,918
Company’s portion of EBITDA of unconsolidated entities (Ashford Inc.)4,336
 3,445
 (1,666)
Company’s portion of EBITDA of unconsolidated entities (OpenKey)(403) (572) (498)
EBITDA395,783
 343,723
 382,138
Impairment charges on real estate33,628
 23,391
 10,153
(Gain) loss on sale of assets and hotel properties(26,126) (475) (14,030)
EBITDAre403,285
 366,639
 378,261
Amortization of unfavorable contract liabilities176
 (155) (1,535)
Uninsured hurricane related costs
 (291) 2,829
(Gain) loss on insurance settlements(450) (928) (192)
Write-off of premiums, loan costs and exit fees2,841
 8,847
 2,845
Other (income) expense, net(10,219) 539
 3,422
Transaction and conversion costs2,329
 863
 4,299
Legal, advisory and settlement costs1,660
 1,084
 4,199
Unrealized (gain) loss on marketable securities(1,896) 1,013
 4,649
Unrealized (gain) loss on derivatives4,494
 2,178
 2,802
Dead deal costs78
 291
 9
Software implementation costs
 
 1,034
Non-cash stock/unit-based compensation19,717
 26,939
 12,287
Company’s portion of (gain) loss of AQUA U.S. Fund
 
 (52)
Company’s portion of adjustments to EBITDAre of unconsolidated entities (Ashford Inc.)2,941
 4,479
 6,790
Company’s portion of adjustments to EBITDAre of unconsolidated entities (OpenKey)49
 17
 13
Adjusted EBITDAre$425,005
 $411,515
 $421,660

We calculate FFO and AFFO in the following table. FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on properties, and extraordinary items as defined by GAAP, plus depreciation and amortization of real estate assets, impairment charges on real estate assets, and after adjustments for unconsolidated entities and noncontrolling interests in the operating partnership. Adjustments for unconsolidated entities are calculated to reflect FFO on the same basis. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. Our calculation of AFFO excludes extinguishment of issuance costs upon redemption of preferred stock, write-off of premiums, loan costs and exit fees, other impairment charges, uninsured hurricane related costs, other income/expense, transaction, acquisition and management conversion costs, legal, judgmentadvisory and related legalsettlement costs, dead deal costs, software implementation costs, compensation adjustment related to modified employment termstax reform, and non-cash items such as gain/loss on insurance settlements, non-cash stock/unit-based compensation, unrealized gains/losses on marketable securities, derivative instruments, investment in securities investment fund, amortization of loan costs, as well as our portion of adjustments to FFO related to unconsolidated entities. We exclude items from AFFO that are either non-cash or are not part of our core operations in order to provide a period-over-period comparison of our operating results. We consider FFO and AFFO to be appropriate measures of our ongoing normalized operating performance as a REIT. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO and AFFO do not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to a) GAAP net income or loss as an indication of our financial performance or b) GAAP cash flows from operating activities as a measure of our liquidity, nor is it indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO and AFFO should be considered along with our net income or loss and cash flows reported in the consolidated financial statements.

The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):
Year Ended December 31,Year Ended December 31,
2017 2016 20152019 2018 2017
Net income (loss)$(88,760) $(58,782) $306,412
$(142,679) $(156,309) $(88,760)
(Income) loss from consolidated entities attributable to noncontrolling interests110
 14
 30
112
 30
 110
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership21,642
 12,483
 (35,503)28,932
 29,313
 21,642
Preferred dividends(44,761) (36,272) (33,962)(42,577) (42,577) (44,761)
Extinguishment of issuance costs upon redemption of Series E preferred stock(10,799) (6,124) 
Extinguishment of issuance costs upon redemption of preferred stock
 
 (10,799)
Net income (loss) available to common stockholders(122,568) (88,681) 236,977
(156,212) (169,543) (122,568)
Depreciation and amortization on real estate246,490
 243,617
 210,197
268,778
 258,227
 246,490
(Gain) loss on acquisition of PIM Highland JV and sale of hotel properties(14,030) (31,599) (381,351)
(Gain) loss on sale of assets and hotel properties(26,126) (475) (14,030)
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership(21,642) (12,483) 35,503
(28,932) (29,313) (21,642)
Equity in (income) loss of unconsolidated entities5,918
 1,048
 3,445
2,307
 (867) 5,918
Impairment charges on real estate10,153
 18,316
 19,949
33,628
 23,391
 10,153
Company’s portion of FFO of unconsolidated entities (Ashford Inc.)(5,410) (380) (19)(4,030) 1,524
 (5,410)
Company’s portion of FFO of unconsolidated entities (OpenKey)(505) (306) 
(396) (581) (505)
Company’s portion of FFO of unconsolidated entities (Ashford Prime OP)
 
 4,371
Company’s portion of FFO of unconsolidated entities (PIM Highland JV)
 
 3,791
FFO available to common stockholders and OP unitholders98,406
 129,532
 132,863
89,017
 82,363
 98,406
Extinguishment of issuance costs upon redemption of preferred stock10,799
 6,124
 

 
 10,799
Write-off of premiums, loan costs and exit fees2,841
 8,847
 2,845
(Gain) loss on insurance settlements(192) (456) 
(450) (928) (192)
Write-off of premiums, loan costs and exit fees2,845
 12,702
 5,750
Other impairment charges
 (500) (438)
Uninsured hurricane related costs2,829
 
 

 (291) 2,829
Other (income) expense, net3,422
 4,517
 864
(10,219) 539
 3,422
Transaction, acquisition and management conversion costs4,299
 1,778
 12,348
Legal judgment and related legal costs4,199
 1,176
 95
Transaction and conversion costs2,329
 863
 4,299
Legal, advisory and settlement costs1,660
 1,084
 4,199
Unrealized (gain) loss on marketable securities4,649
 (4,946) (127)(1,896) 1,013
 4,649
Unrealized (gain) loss on derivatives2,802
 2,534
 7,402
4,494
 2,178
 2,802
Dead deal costs9
 391
 769
78
 291
 9
Software implementation costs1,034
 
 

 
 1,034
Non-cash stock/unit-based compensation12,287
 9,672
 3,470
19,717
 26,939
 12,287
Tax reform(1,080) 
 

 
 (1,080)
Amortization of loan costs29,537
 21,435
 13,213
Company’s portion of unrealized loss of AQUA U.S. Fund(52) 5,062
 3,386

 
 (52)
Company’s portion of adjustments to FFO of unconsolidated entities (Ashford Inc.)9,374
 3,729
 (1,032)8,319
 907
 9,374
Company’s portion of adjustments to FFO of unconsolidated entities (OpenKey)13
 8
 
55
 21
 13
Company’s portion of adjustments to FFO of unconsolidated entities (Ashford Prime OP)
 
 593
Adjusted FFO available to common stockholders and OP unitholders$155,643
 $171,323
 $165,943
$145,482
 $145,261
 $168,856

Item 7A.Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates.
At December 31, 2017,2019, our total indebtedness of $3.7$4.1 billion included $3.4$3.8 billion of variable-rate debt. The impact on our results of operations of a 25-basis point change in interest rate on the outstanding balance of variable-rate debt at December 31, 20172019, would be approximately $8.4$9.4 million annually. Interest rate changes have no impact on the remaining $353.5$360.7 million of fixed-rate debt.
The above amounts were determined based on the impact of hypothetical interest rates on our borrowings and assume no changes in our capital structure. As the information presented above includes only those exposures that existed at December 31, 2017 and2019, it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies at the time, and the related interest rates.
We use credit default swaps, tied to the CMBX index, to hedge financial and capital market risk. We have entered into credit default swap transactions, excluding those that have terminated, for notional amounts totaling $212.5 million, to hedge financial and capital market risk. A credit default swap is a derivative contract that functions like an insurance policy against the credit risk of an entity or obligation. The seller of protection assumes the credit risk of the reference obligation from the buyer (us) of protection in exchange for annual premium payments. If a default or a loss, as defined in the credit default swap agreements, occurs on the underlying bonds, then the buyer of protection is protected against those losses. The only liability for us, the buyer, is the annual premium and any change in value of the underlying CMBX index (if the trade is terminated prior to maturity). For all CMBX trades completed to date, we were the buyer of protection. Credit default swaps are subject to master-netting settlement arrangements and credit support annexes. Assuming the underlying bonds pay off at par over their remaining average life, our total exposure for these trades was approximately $7.7$3.2 million at December 31, 2017.2019.
We hold interest rate floors with notional amounts totaling $16.8$12.0 billion and strike rates ranging from (0.25)% to 1.50%1.63%. Our total exposure is capped at our initial upfront costs totaling $9.8$9.6 million. These instruments have termination dates ranging from March 20192020 to July 2020.November 2021.



Item 8.Financial Statements and Supplementary Data
Index to Consolidated Financial Statements
  
  
  
  
  
  



Report of Independent Registered Public Accounting Firm


TheShareholders and Board of Directors and Stockholders of
Ashford Hospitality Trust, Inc. and subsidiaries
Dallas, Texas
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Ashford Hospitality Trust, Inc. (the “Company”) and subsidiaries as of December 31, 20172019 and 2016,2018, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2017,2019, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and subsidiaries at December 31, 20172019 and 2016,2018, and the results of theirits operations and theirits cash flows for each of the three years in the period ended December 31, 20172019, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2017,2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 14, 201812, 2020 expressed an unqualified opinion thereon.
Adoption of New Accounting Standard
As discussed in Notes 2 and 6 to the consolidated financial statements, the Company changed its method of accounting for leases in the year ended December 31, 2019 due to the adoption of ASU No. 2016-02, Leases.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP
We have served as the Company'sCompany’s auditor since 2015.
Dallas, Texas
March 14, 201812, 2020



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
December 31,December 31,
2017 20162019 2018
Assets      
Investments in hotel properties, net$4,035,915
 $4,160,563
$4,108,443
 $4,105,219
Cash and cash equivalents354,805
 347,091
262,636
 319,210
Restricted cash116,787
 144,014
135,571
 120,602
Marketable securities26,926
 53,185
14,591
 21,816
Accounts receivable, net of allowance of $770 and $690, respectively44,257
 44,629
Accounts receivable, net of allowance of $698 and $485, respectively39,638
 37,060
Inventories4,244
 4,530
4,346
 4,224
Notes receivable, net7,709
 
Investment in unconsolidated entities2,955
 58,779
2,829
 4,489
Deferred costs, net2,777
 2,846
2,897
 3,449
Prepaid expenses19,269
 17,578
21,886
 19,982
Derivative assets, net2,010
 3,614
1,691
 2,396
Operating lease right-of-use assets49,995
 
Other assets14,152
 11,718
17,932
 15,923
Intangible asset, net9,943
 10,061
797
 9,824
Due from related parties, net3,019
 
Due from third-party hotel managers17,387
 13,348
17,368
 21,760
Assets held for sale18,423
 19,588
Total assets$4,669,850
 $4,891,544
$4,691,348
 $4,685,954
Liabilities and Equity      
Liabilities:      
Indebtedness, net$3,696,300
 $3,723,559
$4,106,518
 $3,927,266
Accounts payable and accrued expenses132,401
 126,986
134,341
 136,757
Dividends payable25,045
 24,765
Unfavorable management contract liabilities
 1,380
Dividends and distributions payable20,849
 26,794
Due to Ashford Inc., net15,146
 15,716
6,570
 23,034
Due to Ashford Prime OP, net
 488
Due to related party, net1,067
 1,001
Due to related parties, net
 1,477
Due to third-party hotel managers2,431
 2,714
2,509
 2,529
Intangible liabilities, net15,839
 16,195
2,337
 15,483
Operating lease liabilities53,270
 
Derivative liabilities, net42
 50
Other liabilities18,376
 16,548
25,776
 18,716
Liabilities related to assets held for sale13,977
 37,047
Total liabilities3,920,582
 3,966,399
4,352,212
 4,152,106
Commitments and contingencies (note 12)
 
Commitments and contingencies (note 18)

 

Redeemable noncontrolling interests in operating partnership116,122
 132,768
69,870
 80,743
Equity:      
Preferred stock, $0.01 par value, 50,000,000 shares authorized:      
Series A Cumulative Preferred Stock, 0 and 1,657,206 shares issued and outstanding at December 31, 2017 and 2016, respectively
 17
Series D Cumulative Preferred Stock, 2,389,393 and 9,468,706 shares issued and outstanding at December 31, 2017 and 2016, respectively24
 95
Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at December 31, 2017 and 201648
 48
Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at December 31, 2017 and 201662
 62
Series H Cumulative Preferred Stock, 3,800,000 and 0 shares issued and outstanding at December 31, 2017 and 2016, respectively38
 
Series I Cumulative Preferred Stock, 5,400,000 and 0 shares issued and outstanding at December 31, 2017 and 2016, respectively54
 
Common stock, $0.01 par value, 400,000,000 shares authorized, 97,409,113 and 96,376,827 shares issued and outstanding at December 31, 2017 and 2016, respectively974
 964
Series D Cumulative Preferred Stock, 2,389,393 shares issued and outstanding at December 31, 2019 and 201824
 24
Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at December 31, 2019 and 201848
 48
Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at December 31, 2019 and 201862
 62
Series H Cumulative Preferred Stock, 3,800,000 shares issued and outstanding at December 31, 2019 and 201838
 38
Series I Cumulative Preferred Stock, 5,400,000 shares issued and outstanding at December 31, 2019 and 201854
 54
Common stock, $0.01 par value, 400,000,000 shares authorized, 102,103,602 and 101,035,530 shares issued and outstanding at December 31, 2019 and 2018, respectively1,021
 1,010
Additional paid-in capital1,784,997
 1,764,450
1,825,553
 1,814,273
Accumulated deficit(1,153,697) (974,015)(1,558,038) (1,363,020)
Total stockholders’ equity of the Company632,500
 791,621
268,762
 452,489
Noncontrolling interests in consolidated entities646
 756
504
 616
Total equity633,146
 792,377
269,266
 453,105
Total liabilities and equity$4,669,850
 $4,891,544
$4,691,348
 $4,685,954
See Notes to Consolidated Financial Statements.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Year Ended December 31,Year Ended December 31,
2017 2016 20152019 2018 2017
Revenue          
Rooms$1,143,135
 $1,180,199
 $1,059,012
$1,184,987
 $1,134,687
 $1,143,135
Food and beverage234,777
 253,211
 227,099
243,917
 224,311
 234,777
Other58,204
 56,891
 48,699
69,653
 67,782
 58,204
Total hotel revenue1,436,116
 1,490,301
 1,334,810
1,498,557
 1,426,780
 1,436,116
Other3,154
 1,742
 2,156
4,202
 4,009
 3,154
Total revenue1,439,270
 1,492,043
 1,336,966
1,502,759
 1,430,789
 1,439,270
Expenses          
Hotel operating expenses:          
Rooms248,643
 255,317
 231,614
258,446
 248,139
 248,643
Food and beverage161,683
 172,530
 153,340
167,945
 156,902
 161,683
Other expenses444,322
 455,818
 405,896
472,437
 442,463
 444,322
Management fees52,653
 54,734
 49,394
53,846
 53,078
 52,653
Total hotel expenses907,301
 938,399
 840,244
Total hotel operating expenses952,674
 900,582
 907,301
Property taxes, insurance and other73,579
 73,457
 65,301
84,110
 78,355
 73,579
Depreciation and amortization246,731
 243,863
 210,410
269,003
 258,458
 246,731
Impairment charges10,153
 17,816
 19,511
33,628
 23,391
 10,153
Transaction costs14
 77
 6,252
2
 11
 14
Advisory services fee53,199
 54,361
 43,023
63,632
 69,122
 53,199
Corporate, general and administrative13,288
 8,366
 14,310
11,107
 10,931
 13,288
Total expenses1,304,265
 1,336,339
 1,199,051
1,414,156
 1,340,850
 1,304,265
Gain (loss) on sale of assets and hotel properties26,126
 475
 14,030
Operating income (loss)135,005
 155,704
 137,915
114,729
 90,414
 149,035
Equity in earnings (loss) of unconsolidated entities(5,866) (6,110) (6,831)(2,307) 867
 (5,866)
Interest income2,202
 331
 90
3,067
 3,952
 2,202
Gain (loss) on acquisition of PIM Highland JV and sale of hotel properties14,030
 31,599
 380,752
Other income (expense)(3,422) (4,517) (864)10,490
 64
 (3,422)
Interest expense and amortization of premiums and loan costs(222,631) (223,967) (187,514)(262,001) (236,786) (222,631)
Write-off of loan costs and exit fees(2,845) (12,702) (5,750)
Write-off of premiums, loan costs and exit fees(2,841) (8,847) (2,845)
Unrealized gain (loss) on marketable securities(4,649) 4,946
 127
1,896
 (1,013) (4,649)
Unrealized gain (loss) on derivatives(2,802) (2,534) (7,402)(4,494) (2,178) (2,802)
Income (loss) from continuing operations before income taxes(90,978) (57,250) 310,523
Income (loss) before income taxes(141,461) (153,527) (90,978)
Income tax benefit (expense)2,218
 (1,532) (4,710)(1,218) (2,782) 2,218
Income (loss) from continuing operations(88,760) (58,782) 305,813
Gain (loss) on sale of hotel properties, net of tax
 
 599
Net income (loss)(88,760) (58,782) 306,412
(142,679) (156,309) (88,760)
(Income) loss from consolidated entities attributable to noncontrolling interests110
 14
 30
112
 30
 110
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership21,642
 12,483
 (35,503)28,932
 29,313
 21,642
Net income (loss) attributable to the Company(67,008) (46,285) 270,939
(113,635) (126,966) (67,008)
Preferred dividends(44,761) (36,272) (33,962)(42,577) (42,577) (44,761)
Extinguishment of issuance costs upon redemption of preferred stock(10,799) (6,124) 

 
 (10,799)
Net income (loss) available to common stockholders$(122,568) $(88,681) $236,977
Net income (loss) attributable to common stockholders$(156,212) $(169,543) $(122,568)
Income (loss) per share – basic and diluted:          
Basic:          
Income (loss) from continuing operations attributable to common stockholders$(1.30) $(0.95) $2.43
Income (loss) from discontinued operations attributable to common stockholders
 
 
Net income (loss) attributable to common stockholders$(1.30) $(0.95) $2.43
$(1.58) $(1.75) $(1.30)
Weighted average common shares outstanding – basic95,207
 94,426
 96,290
99,837
 97,282
 95,207
Diluted:          
Income (loss) from continuing operations attributable to common stockholders$(1.30) $(0.95) $2.35
Income (loss) from discontinued operations attributable to common stockholders
 
 
Net income (loss) attributable to common stockholders$(1.30) $(0.95) $2.35
$(1.58) $(1.75) $(1.30)
Weighted average common shares outstanding – diluted95,207
 94,426
 114,881
99,837
 97,282
 95,207
Dividends declared per common share$0.48
 $0.48
 $0.48
See Notes to Consolidated Financial Statements.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
Year Ended December 31,Year Ended December 31,
2017 2016 20152019 2018 2017
Net income (loss)$(88,760) $(58,782) $306,412
$(142,679) $(156,309) $(88,760)
Other comprehensive income (loss), net of tax:          
Reclassification to interest expense
 
 
Total other comprehensive income (loss)
 
 

 
 
Total comprehensive income (loss)(88,760) (58,782) 306,412
(142,679) (156,309) (88,760)
Comprehensive (income) loss attributable to noncontrolling interests in consolidated entities110
 14
 30
112
 30
 110
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership21,642
 12,483
 (35,503)28,932
 29,313
 21,642
Comprehensive income (loss) attributable to the Company$(67,008) $(46,285) $270,939
$(113,635) $(126,966) $(67,008)
See Notes to Consolidated Financial Statements.



ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands)
Preferred Stock     
Additional
Paid-in
Capital
 
Accumulated
Deficit
 Noncontrolling Interests in Consolidated Entities Total Redeemable Noncontrolling Interest in Operating PartnershipPreferred Stock     
Additional
Paid-in
Capital
 
Accumulated
Deficit
 Noncontrolling Interests in Consolidated Entities Total Redeemable Noncontrolling Interest in Operating Partnership
Series A Series D Series E Series F Series G Series H Series I Common Stock Series A Series D Series F Series G Series H Series I Common Stock 
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount 
Balance at January 1, 20151,657
 $17
 9,469
 $95
 4,630
 $46
 
 $
 
 $
 
 $
 
 $
 89,440
 $894
 $1,580,904
 $(1,050,323) $800
 $532,433
 $177,064
Balance at January 1, 20171,657
 $17
 9,469
 $95
 4,800
 $48
 6,200
 $62
 
 $
 
 $
 96,377
 $964
 $1,764,450
 $(974,015) $756
 $792,377
 $132,768
Purchases of common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 (5,803) (57) (52,235) 
 
 (52,292) 

 
 
 
 
 
 
 
 
 
 
 
 (203) (2) (1,270) 
 
 (1,272) 
Equity-based compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 2,054
 
 
 2,054
 1,416
Forfeitures of restricted shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 (20) 
 17
 
 
 17
 
Issuance of restricted shares/units
 
 
 
 
 
 
 
 
 
 
 
 
 
 1,183
 12
 (12) 
 
 
 35
Issuance of common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 10,530
 105
 110,765
 
 
 110,870
 
Dividends declared - common shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (47,190) 
 (47,190) 
Dividends declared - preferred shares- Series A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (3,542) 
 (3,542) 
Dividends declared - preferred shares- Series D
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (20,002) 
 (20,002) 
Dividends declared - preferred shares- Series E
 
 
 
 
 ��
 
 
 
 
 
 
 
 
 
 
 
 (10,418) 
 (10,418) 
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,919)
Redemption/conversion of operating partnership units
 
 
 
 
 
 
 
 
 
 
 
 
 
 141
 1
 1,544
 
 
 1,545
 (1,545)
Distribution of Ashford Prime OP units
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (45,843) 
 
 (45,843) (9,790)
Redemption value adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 73,315
 
 73,315
 (73,315)
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 270,939
 (30) 270,909
 35,503
Balance at December 31, 20151,657
 $17
 9,469
 $95
 4,630
 $46
 
 $
 
 $
 
 $
 
 $
 95,471
 $955
 $1,597,194
 $(787,221) $770
 $811,856
 $118,449
Purchases of common shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 (124) (1) (728) 
 
 (729) 
Equity-based compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 5,746
 
 
 5,746
 3,926

 
 
 
 
 
 
 
 
 
 
 
 
 
 7,227
 
 
 7,227
 5,060
Forfeitures of restricted shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 (47) 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 (56) 
 
 
 
 
 
Issuance of restricted shares/units
 
 
 
 
 
 
 
 
 
 
 
 
 
 862
 8
 (8) 
 
 
 66

 
 
 
 
 
 
 
 
 
 
 
 1,271
 12
 (12) 
 
 
 94
Redemption of preferred shares
 
 
 
 (4,630) (46) 
 
 
 
 
 
 
 
 
 
 (109,580) (6,124) 
 (115,750) 
(1,657) (17) (7,080) (71) 
 
 
 
 
 
 
 
 
 
 (207,538) (10,799) 
 (218,425) 
Issuances of preferred shares
 
 
 
 
 
 4,800
 48
 6,200
 62
 
 
 
 
 
 
 265,510
 
 
 265,620
 

 
 
 
 
 
 
 
 3,800
 38
 5,400
 54
 
 
 221,979
 
 
 222,071
 
Dividends declared - common shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (46,292) 
 (46,292) 
Dividends declared - preferred shares- Series A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (3,542) 
 (3,542) 
Dividends declared - preferred shares- Series D
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (20,002) 
 (20,002) 
Dividends declared – preferred shares- Series E
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (6,280) 
 (6,280) 
Dividends declared – preferred shares- Series F
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (4,130) 
 (4,130) 
Dividends declared – preferred shares- Series G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (2,318) 
 (2,318) 
Dividends declared - common shares ($.48/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (47,104) 
 (47,104) 
Dividends declared - preferred shares- Series A ($1.6032/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (2,539) 
 (2,539) 
Dividends declared - preferred shares- Series D ($2.1124/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (18,211) 
 (18,211) 
Dividends declared – preferred shares- Series F ($1.8436/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (8,849) 
 (8,849) 
Dividends declared – preferred shares- Series G ($1.8436/share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (11,430) 
 (11,430) 
Dividends declared – preferred shares- Series H
($.6563/share)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (2,494) 
 (2,494) 
Dividends declared – preferred shares- Series I
($.2292/share)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (1,238) 
 (1,238) 
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,988)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,007)
Redemption/conversion of operating partnership units
 
 
 
 
 
 
 
 
 
 
 
 20
 
 161
 
 
 161
 (161)
Redemption value adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,010) 
 (10,010) 10,010
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (67,008) (110) (67,118) (21,642)
Balance at December 31, 2017
 $
 2,389
 $24
 4,800
 $48
 6,200
 $62
 3,800
 $38
 5,400
 $54
 97,409
 $974
 $1,784,997
 $(1,153,697) $646
 $633,146
 $116,122
Purchases of common shares
 
 
 
 
 
 
 
 
 
 
 
 (249) (3) (1,595) 
 
 (1,598) 
Equity-based compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 16,098
 
 
 16,098
 10,841
Forfeitures of restricted shares
 
 
 
 
 
 
 
 
 
 
 
 (48) 
 
 
 
 
 
Issuance of restricted shares/units
 
 
 
 
 
 
 
 
 
 
 
 1,490
 15
 108
 
 
 123
 53
Issuance of common stock (net)
 
 
 
 
 
 
 
 
 
 
 
 2,434
 24
 14,665
 
 
 14,689
 
Dividends declared - common shares ($.48/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (47,951) 
 (47,951) 
Dividends declared - preferred shares- Series D ($2.1124/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (5,047) 
 (5,047) 
Dividends declared – preferred shares- Series F ($1.8436/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (8,849) 
 (8,849) 
Dividends declared – preferred shares- Series G ($1.8436/share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (11,431) 
 (11,431) 
Dividends declared – preferred shares- Series H ($1.875/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (7,125) 
 (7,125) 
Dividends declared – preferred shares- Series I ($1.875/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,125) 
 (10,125) 
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (8,789)
Redemption value adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 8,171
 
 8,171
 (8,171)
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (126,966) (30) (126,996) (29,313)
Balance at December 31, 2018
 $
 2,389
 $24
 4,800
 $48
 6,200
 $62
 3,800
 $38
 5,400
 $54
 101,036
 $1,010
 $1,814,273
 $(1,363,020) $616
 $453,105
 $80,743
Impact of adoption of new accounting standard
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1,755
 
 1,755
 
Purchases of common stock
 
 
 
 
 
 
 
 
 
 
 
 (210) (1) (1,030) 
 
 (1,031) 
Equity-based compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 12,413
 
 
 12,413
 7,304

 Preferred Stock     
Additional
Paid-in
Capital
 
Accumulated
Deficit
 Noncontrolling Interests in Consolidated Entities Total Redeemable Noncontrolling Interest in Operating Partnership
 Series A Series D Series E Series F Series G Series H Series I Common Stock     
 Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount     
Redemption of operating partnership units for sale of hotel property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 4,718
 
 
 4,718
 (16,423)
Redemption/conversion of operating partnership units
 
 
 
 
 
 
 
 
 
 
 
 
 
 215
 2
 1,598
 (2,571) 
 (971) 971
Redemption value adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (49,250) 
 (49,250) 49,250
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (46,285) (14) (46,299) (12,483)
Balance at December 31, 20161,657
 $17
 9,469
 $95
 
 $
 4,800
 $48
 6,200
 $62
 
 $
 
 $
 96,377
 $964
 $1,764,450
 $(974,015) $756
 $792,377
 $132,768
Purchases of common stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 (203) (2) (1,270) 
 
 (1,272) 
Equity-based compensation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 7,227
 
 
 7,227
 5,060
Forfeitures of restricted shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 (56) 
 
 
 
 
 
Issuance of restricted shares/units
 
 
 
 
 
 
 
 
 
 
 
 
 
 1,271
 12
 (12) 
 
 
 94
Redemption of preferred shares(1,657) (17) (7,080) (71) 
 
 
 
 
 
 
 
 
 
 
 
 (207,538) (10,799) 
 (218,425) 
Issuances of preferred shares
 
 
 
 
 
 
 
 
 
 3,800
 38
 5,400
 54
 
 
 221,979
 
 
 222,071
 
Dividends declared - common shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (47,104) 
 (47,104) 
Dividends declared - preferred shares- Series A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (2,539) 
 (2,539) 
Dividends declared - preferred shares- Series D
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (18,211) 
 (18,211) 
Dividends declared – preferred shares- Series F
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (8,849) 
 (8,849) 
Dividends declared – preferred shares- Series G
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (11,430) 
 (11,430) 
Dividends declared – preferred shares- Series H
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (2,494) 
 (2,494) 
Dividends declared – preferred shares- Series I
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (1,238) 
 (1,238) 
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,007)
Redemption/conversion of operating partnership units
 
 
 
 
 
 
 
 
 
 
 
 
 
 20
 
 161
 
 
 161
 (161)
Redemption value adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,010) 
 (10,010) 10,010
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (67,008) (110) (67,118) (21,642)
Balance at December 31, 2017
 $
 2,389
 $24
 
 $
 4,800
 $48
 6,200
 $62
 3,800
 $38
 5,400
 $54
 97,409
 $974
 $1,784,997
 $(1,153,697) $646
 $633,146
 $116,122
 Preferred Stock     
Additional
Paid-in
Capital
 
Accumulated
Deficit
 Noncontrolling Interests in Consolidated Entities Total Redeemable Noncontrolling Interest in Operating Partnership
 Series A Series D Series F Series G Series H Series I Common Stock     
 Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount     
Forfeitures of restricted shares
 
 
 
 
 
 
 
 
 
 
 
 (62) (1) 1
 
 
 
 
Issuance of restricted shares/units
 
 
 
 
 
 
 
 
 
 
 
 1,340
 13
 (13) 
 
 
 28
Issuance of units for hotel acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 7,854
Common stock issuance costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 (91) 
 
 (91)  
Dividends declared - common shares ($.30/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (31,116) 
 (31,116) 
Dividends declared - preferred shares- Series D ($2.1124/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (5,048) 
 (5,048) 
Dividends declared – preferred shares- Series F ($1.8436/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (8,849) 
 (8,849) 
Dividends declared – preferred shares- Series G ($1.8436/share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (11,430) 
 (11,430) 
Dividends declared – preferred shares- Series H ($1.875/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (7,125) 
 (7,125) 
Dividends declared – preferred shares- Series I ($1.875/share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (10,125) 
 (10,125) 
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (6,572)
Redemption value adjustment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (9,445) 
 (9,445) 9,445
Net income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (113,635) (112) (113,747) (28,932)
Balance at December 31, 2019
 $
 2,389
 $24
 4,800
 $48
 6,200
 $62
 3,800
 $38
 5,400
 $54
 102,104
 $1,021
 $1,825,553
 $(1,558,038) $504
 $269,266
 $69,870
See Notes to Consolidated Financial Statements.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,Year Ended December 31,
2017 2016 20152019 2018 2017
Cash Flows from Operating Activities          
Net income (loss)$(88,760) $(58,782) $306,412
$(142,679) $(156,309) $(88,760)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Depreciation and amortization246,731
 243,863
 210,410
269,003
 258,458
 246,731
Impairment charges10,153
 17,816
 19,511
33,628
 23,391
 10,153
Amortization of intangibles(238) (156) (167)(257) (237) (238)
Recognition of deferred income(869) 
 
(954) (577) (869)
Write-off of intangibles
 564
 
Deferred tax expense (benefit)2,324
 
 
Deferred income tax expense (benefit)(159) 135
 2,324
Bad debt expense2,185
 1,185
 1,059
3,127
 2,148
 2,185
Equity in (earnings) loss of unconsolidated entities5,866
 6,110
 6,831
2,307
 (867) 5,866
Distributions of earnings from unconsolidated entities
 
 996
(Gain) loss on acquisition of PIM Highland JV and sale of properties, net(14,030) (31,599) (381,351)
Realized and unrealized (gain) loss on trading securities3,678
 (4,946) (1,776)
(Gain) loss on sale of assets and hotel properties, net(26,126) (475) (14,030)
Realized and unrealized (gain) loss on marketable securities(1,980) 924
 3,678
Purchases of marketable securities(54,793) (48,239) (96,322)(4,208) (12,228) (54,793)
Sales of marketable securities77,374
 
 95,963
13,413
 16,414
 77,374
Realized (gain) loss on investment in Ashford Inc.(11,792) 
 
(Gain) loss on insurance settlement
 (456) 
(450) (928) 
Net settlement of trading derivatives(5,035) (5,866) (1,106)(3,485) 648
 (5,035)
Payments for derivatives
 (230) (9,975)
Realized and unrealized (gains) losses on derivatives7,510
 6,116
 9,861
5,294
 2,178
 7,510
Amortization of loan costs and premiums, write-off of loan costs, premiums and exit fees14,190
 34,696
 23,059
Amortization of loan costs and premiums and write-off of premiums, loan costs and exit fees32,153
 30,012
 14,190
Equity-based compensation12,287
 9,672
 3,470
19,717
 26,939
 12,287
Changes in operating assets and liabilities, exclusive of effect of acquisitions and dispositions of hotel properties:     
Amortization of parking asset118
 
 
Non-cash interest income(191) 
 
Changes in operating assets and liabilities, exclusive of the effect of acquisitions and dispositions of hotel properties:     
Accounts receivable and inventories2,037
 (880) 5,325
(6,639) 5,553
 2,037
Prepaid expenses and other assets(4,762) (7,453) (1,042)2,307
 (1,946) (4,762)
Operating lease right-of-use assets1,322
 
 
Operating lease liabilities(937) 
 
Accounts payable and accrued expenses(5,316) 1,670
 (1,373)(4,177) 376
 (5,316)
Due to/from affiliates
 
 3,473
Due to/from related party944
 (610) (2,624)
Due to/from related parties(4,496) (574) 944
Due to/from third-party hotel managers(4,353) 9,731
 8,858
4,372
 (4,214) (4,353)
Due to/from Ashford Prime OP, net(488) 1,016
 136
Due to/from Braemar OP, net
 
 (488)
Due to/from Ashford Inc., net(570) 5,860
 1,654
(1,256) (8,793) (570)
Other liabilities1,317
 641
 2,295
234
 1,532
 1,317
Net cash provided by (used in) operating activities207,382
 179,723
 203,577
177,209
 181,560
 207,382
Cash Flows from Investing Activities          
Investment in unconsolidated entity(984) (2,321) 
(647) (667) (984)
Proceeds from payments on notes receivable
 4,246
 245
Proceeds from franchise agreement extensions
 
 7,500
4,000
 
 
Acquisition of hotel properties and assets, net of cash and restricted cash acquired(363) (3,339) (620,369)(212,552) (162,593) (363)
Improvements and additions to hotel properties(221,960) (204,040) (175,159)(159,220) (207,325) (221,960)
Net proceeds from sale of assets/properties105,267
 181,754
 7,650
Net proceeds from sale of assets and hotel properties102,676
 40,629
 105,267
Payments for initial franchise fees(225) (30) (568)(475) (329) (225)
Liquidation of U.S. AQUA Fund50,942
 
 

 
 50,942
Proceeds from sale of investment in Ashford Inc.11,792
 
 
Proceeds from property insurance3,442
 1,872
 385
1,233
 651
 3,442
Net cash provided by (used in) investing activities(63,881) (21,858) (780,316)(253,193) (329,634) (63,881)
Cash Flows from Financing Activities          
Borrowings on indebtedness704,800
 487,500
 2,277,782
404,795
 2,705,769
 704,800
Repayments of indebtedness(754,836) (559,037) (1,550,299)(272,357) (2,463,100) (754,836)
Payments for loan costs and exit fees(13,871) (20,156) (47,993)(9,643) (55,555) (13,871)
Payments for dividends and distributions(101,592) (91,465) (91,282)(86,210) (97,445) (101,592)
Purchases of common stock(1,272) (729) (52,292)(1,031) (1,598) (1,272)
Redemption of preferred stock(218,425) (115,750) 

 
 (218,425)
Payments for derivatives(871) (199) (2,217)(1,112) (3,162) (871)
Proceeds from common stock offering
 
 110,870

 14,752
 
Proceeds from preferred stock offerings222,071
 265,620
 

 
 222,071
Preferred and common stock offering costs(91) 
 
Deposit on ERFP assets
 16,100
 
Other94
 66
 35
28
 53
 94
Net cash provided by (used in) financing activities(163,902) (34,150) 644,604
Net change in cash and cash equivalents(20,401) 123,715
 67,865
Cash, cash equivalents and restricted cash at beginning of year492,473
 368,758
 300,893
Cash, cash equivalents and restricted cash at end of year$472,072
 $492,473
 $368,758
     

Year Ended December 31,Year Ended December 31,
2019 2018 2017
Net cash provided by (used in) financing activities34,379
 115,814
 (163,902)
Net change in cash and cash equivalents(41,605) (32,260) (20,401)
Cash, cash equivalents and restricted cash at beginning of year439,812
 472,072
 492,473
Cash, cash equivalents and restricted cash at end of year$398,207
 $439,812
 $472,072
2017 2016 2015     
Supplemental Cash Flow Information          
Interest paid$210,644
 $201,895
 $165,809
$233,771
 $215,344
 $210,644
Income taxes paid (received), net(253) 1,882
 8,730
(1,059) 1,890
 (253)
          
Supplemental Disclosure of Investing and Financing Activities          
Accrued but unpaid capital expenditures$19,456
 $11,402
 $7,525
$24,239
 $23,615
 $19,456
Dividends and distributions declared but not paid25,045
 24,765
 22,678
20,849
 26,794
 25,045
Investment in unconsolidated entity
 
 59,338
Assumption of debt
 
 74,320
Acquisition of land
 
 3,100
Transfer of debt upon sale of hotel property
 23,850
 
Redemption of operating partnership units for sale of hotel property
 11,705
 
Issuance of units for hotel acquisition7,854
 
 
Assumption of debt in hotel acquisition24,922
 
 
Notes receivable issued in land sale7,590
 
 
Other non-cash consideration from land sale4,797
 
 
Non-cash dividends paid
 123
 
Unsettled common stock offering proceeds
 1,075
 
          
Supplemental Disclosure of Cash, Cash Equivalents and Restricted Cash          
Cash and cash equivalents at beginning of period$347,091
 $215,078
 $215,063
$319,210
 $354,805
 $347,091
Cash and cash equivalents at beginning of period included in assets held for sale976
 
 

 78
 976
Restricted cash at beginning of period144,014
 153,680
 85,830
120,602
 116,787
 144,014
Restricted cash at beginning of period included in assets held for sale392
 
 

 402
 392
Cash, cash equivalents and restricted cash at beginning of period$492,473
 $368,758
 $300,893
$439,812
 $472,072
 $492,473
          
Cash and cash equivalents at end of period$354,805
 $347,091
 $215,078
$262,636
 $319,210
 $354,805
Cash and cash equivalents at end of period included in assets held for sale78
 976
 

 
 78
Restricted cash at end of period116,787
 144,014
 153,680
135,571
 120,602
 116,787
Restricted cash at end of period included in assets held for sale402
 392
 

 
 402
Cash, cash equivalents and restricted cash at end of period$472,072
 $492,473
 $368,758
$398,207
 $439,812
 $472,072
See Notes to Consolidated Financial Statements.

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended December 31, 2017, 20162019, 2018 and 20152017
1. Organization and Description of Business
Ashford Hospitality Trust, Inc., together with its subsidiaries (“Ashford Trust”), is a real estate investment trust (“REIT”).While our portfolio currently consists of upscale hotels and upper upscale full-service hotels, our investment strategy is predominantly focused on investing in upper upscale full-service hotels in the upscale and upper upscale segments in domestic and international marketsU.S. that have revenue per available room (“RevPAR”) generally less than twice the U.S. national average, and in all methods including direct real estate, equity, and debt. Other than Ashford Hospitality Trust, Inc.’s investmentFuture investments will predominantly be in Ashford Inc. common stock, weupper upscale hotels. We own our lodging investments and conduct our business through Ashford Hospitality Limited Partnership (“Ashford Trust OP”), our operating partnership. Ashford OP General Partner LLC, a wholly-owned subsidiary of Ashford Trust, serves as the sole general partner of our operating partnership. In this report, terms such as the “Company,” “we,” “us,” or “our” refer to Ashford Hospitality Trust, Inc. and all entities included in its consolidated financial statements.
We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”), a subsidiary of Ashford Inc., through an advisory agreement. All of theOur hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. Allprimarily branded under the widely recognized upscale and upper upscale brands of the services that might be provided by employees are provided to us by Ashford LLC.
Hilton, Hyatt, Marriott and Intercontinental Hotel Group. As of December 31, 2017,2019, we owned interests in the following assets:
120117 consolidated hotel properties, including 118 (two which are held for sale)115 directly owned and two2 owned through a majority-owned investment in a consolidated entity, which represent 25,05824,943 total rooms (or 25,03124,916 net rooms excluding those attributable to our partner);
8990 hotel condominium units at WorldQuest Resort in Orlando, Florida;
a 28.6% ownership in Ashford Inc. common stock with a carrying value of $437,000 and a fair value of $55.6 million;Florida (“WorldQuest”); and
a 16.2%17.0% ownership in OpenKey with a carrying value of $2.5$2.8 million.
For U.S. federal income tax purposes, we have elected to be treated as a REIT, which imposes limitations related to operating hotels. As of December 31, 2017,2019, our 120117 hotel properties were leased or owned by our wholly ownedwholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries for U.S. federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”). Ashford TRS then engages third-party or affiliated hotel management companies to operate the hotels under management contracts. Hotel operating results related to these properties are included in the consolidated statements of operations.
AsWe are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”), a subsidiary of December 31, 2017,Ashford Inc., through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.
We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. On November 6, 2019, Ashford Inc. completed its acquisition of Remington Lodging & Hospitality, LLC, together with its affiliates (“Remington Lodging”), which is beneficially wholly owned byLodging’s hotel management business from Mr. Monty J. Bennett, chairman of our Chairman,board of directors, and chairman, chief executive officer and a significant stockholder of Ashford Inc., and Mr. Archie Bennett, Jr., our Chairman Emeritus, managed 82chairman emeritus and a significant stockholder of Ashford Inc. Remington Hotels manages 80 of our 120117 hotel properties and WorldQuest Resort.WorldQuest. Third-party management companies managed the remaining hotel properties.
Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to project management services, debt placement services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, investment management services and mobile key technology. See note 17.
2. Significant Accounting Policies
Basis of Presentation—The accompanying consolidated financial statements include the accounts of Ashford Hospitality Trust, Inc., its majority-owned subsidiaries and its majority-owned joint ventures in which it has a controlling interest. All significant inter-company accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements.
Ashford Trust OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii)(ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Trust OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Ashford Trust OP General Partner LLC, its general partner. As such, we consolidate Ashford Trust OP.


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The following acquisitions/acquisitions and dispositions affect reporting comparability related toof our consolidated financial statements:
Hotel Property
 
Location
 Type Date
Lakeway Resort & SpaAustin, TexasAcquisitionFebruary 6, 2015
Memphis Marriott EastMemphis, TennesseeAcquisitionFebruary 25, 2015
PIM Highland JV (28.26% interest)VariousAcquisitionMarch 6, 2015
Hampton Inn & SuitesGainesville, FloridaAcquisitionApril 29, 2015
Le Pavillon HotelNew Orleans, LouisianaAcquisitionJune 3, 2015
9-hotel portfolioVariousAcquisitionJune 17, 2015
W Atlanta DowntownAtlanta, GeorgiaAcquisitionJuly 1, 2015
Le Meridien MinneapolisMinneapolis, MinnesotaAcquisitionJuly 23, 2015
Hilton Garden Inn - Wisconsin DellsWisconsin Dells, WisconsinAcquisitionAugust 5, 2015
Hotel Indigo AtlantaAtlanta, GeorgiaAcquisitionOctober 15, 2015
W Minneapolis FoshayMinneapolis, MinnesotaAcquisitionNovember 10, 2015
5-hotel portfolioVariousDispositionJune 1, 2016
Hampton Inn & SuitesGainesville, FloridaDispositionSeptember 1, 2016
SpringHill Suites GaithersburgGaithersburg, MarylandDispositionOctober 1, 2016
2-hotel portfolioPalm Desert, CaliforniaDispositionOctober 7, 2016
Renaissance Portsmouth Portsmouth, VA Disposition February 1, 2017
Embassy Suites Syracuse Syracuse, NY Disposition March 6, 2017
Crowne Plaza Ravinia Atlanta, GA Disposition June 29, 2017
SpringHill Suites Glen AllenGlen Allen, VADispositionFebruary 20, 2018
SpringHill Suites CentrevilleCentreville, VADispositionMay 1, 2018
Residence Inn TampaTampa, FLDispositionMay 10, 2018
Hilton Alexandria Old TownAlexandria, VAAcquisitionJune 29, 2018
La Posada de Santa FeSanta Fe, NMAcquisitionOctober 31, 2018
Embassy Suites New York Manhattan Times SquareNew York, NYAcquisitionJanuary 22, 2019
Hilton Santa Cruz/Scotts ValleySanta Cruz, CAAcquisitionFebruary 26, 2019
San Antonio MarriottSan Antonio, TXDispositionAugust 2, 2019
Hilton Garden Inn Wisconsin DellsWisconsin Dells, WIDispositionAugust 6, 2019
Courtyard SavannahSavannah, GADispositionAugust 14, 2019
SpringHill Suites JacksonvilleJacksonville, FLDispositionDecember 3, 2019

Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents—Cash and cash equivalents include cash on hand or held in banks and short-term investments with an initial maturity of three months or less at the date of purchase.
Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipmentFF&E replacements of approximately 4% to 6% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions. We early adopted Accounting Standards Updates (“ASU”) 2016-18, Statement
Marketable Securities—Marketable securities include U.S. treasury bills and publicly traded equity securities. All of Cash Flows (Topic 230): Restricted Cash effective January 1, 2017. See discussionthese investments are recorded at fair value. The fair value of these investments has been determined based on the closing price as of the balance sheet date and is reported as “marketable securities.” Net investment income, including interest income, dividends, and realized gains and losses, is reported as a component of “other income (expense)” in recently adopted accounting standards below.the consolidated statement of operations. Unrealized gains and losses on these investments are reported as “unrealized gain (loss) on marketable securities” in the consolidated statements of operations.
Accounts Receivable—Accounts receivable consists primarily of meeting and banquet room rental and hotel guest receivables. We generally do not require collateral. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of guests to make required payments for services. The allowance is maintained at a level believed to be adequate to absorb estimated receivable losses. The estimate is based on past receivable loss experience, known and inherent credit risks, current economic conditions, and other relevant factors, including specific reserves for certain accounts.
Inventories—Inventories, which primarily consist of food, beverages, and gift store merchandise, are stated at the lower of cost or marketnet realizable value. Cost is determined using the first-in, first-out method.
Investments in Hotel Properties, net—Hotel properties are generally stated at cost. However, four4 hotel properties contributed upon Ashford Trust’s formation in 2003 are stated at the predecessor’s historical cost, net of impairment charges, if any, plus a partial step-up related to the acquisition of noncontrolling interests from third parties associated with certain of these properties. For hotel properties owned through our majority-owned entities, the carrying basis attributable to the partners’ minority ownership is recorded at the predecessor’s historical cost, net of any impairment charges, while the carrying basis attributable to our majority ownership is recorded based on the allocated purchase price of our ownership interests in the entities. All improvements and additions that extend the useful life of the hotel properties are capitalized.


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Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period, and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. We recorded impairment charges of $33.6 million, $23.4 million and $10.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. See note 5.
Hotel Dispositions—Discontinued operations are defined as the disposal of components of an entity that represents strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. We believe that individual dispositions of hotel properties do not represent a strategic shift that has (or will have) a major effect on our operations and financial results as most will not fit the definition. See note 5.5.
Assets Held for Sale—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale. See note 5.
Investments in Unconsolidated EntitiesInvestments in entities in which we have ownership interests ranging from 16.2% to 28.6%, atAs of December 31, 2017, are2019, we held a 17.0% ownership interest in OpenKey, which is accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review the investmentsinvestment in our unconsolidated entitiesentity 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“equity in earnings (loss) of unconsolidated entities” in unconsolidated entities. Nothe consolidated statements of operations. NaN such impairment was recorded for the years ended December 31, 2017, 20162019, 2018 and 2015.2017.
Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIE’s,Each VIE, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance, (ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii)(ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis and therefore such entities shouldare not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions.
NoteNotes Receivable, netMezzanine loan financing, classified as noteWe record notes receivable represented a loan held for investment and intended to be held to maturity. Note receivable was recorded at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and allowance for losses when a loanpresent value upon the transaction date. Any discount or premium is deemed to be impaired. Premiums, discounts, and net origination fees are amortized or accreted as an adjustment to interest income using the effective interest method over the life of the loan. We discontinue recording interest and amortizing discounts/premiums when the contractual payment of interest and/or principal is not received when contractually due. Payments received on impaired nonaccrual loans are recorded as adjustments to impairment charges. No interest income was recorded for the years ended December 31, 2017, 2016 and 2015. Our note receivable was paid in full on December 2, 2016.method.
VIEs, as defined by authoritative accounting guidance, must be consolidated by their controlling interest beneficiaries if the VIE does not effectively disperse risks among the parties involved. We no longer hold the mezzanine note receivable at December 31, 2017, which was secured by a hotel property and was subordinate to the controlling interest in the secured hotel property. Although the note receivable was considered to be a variable interest in the entity that owns the related hotel, we were not considered to be the primary beneficiary of the hotel property as a result of holding the loan. Therefore, we did not consolidate the hotel property for which we had provided financing. We will evaluate the interests in entities acquired or created in the future to determine whether such entities should be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions.

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Impairment of Notes Receivable—We reviewedreview notes receivable for impairment each reporting period. A loan is impaired when, based on current information and events, collection of all amounts recorded as assets on the balance sheet is no longer considered probable. We apply normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment.
When a loan is impaired, we measure impairment based on the present value of expected cash flows discounted at the loan’s effective interest rate against the value of the asset recorded on the balance sheet. We may also measure impairment based on a loan’s observable market price or the fair value of collateral if the loan is collateral-dependent. Loan impairments are recorded as a valuation allowance and a charge to earnings. Our assessment of impairment is based on considerable management judgment and assumptions. Our note receivable was paid in full on December 2, 2016. NoNaN impairment charges were recorded for the yearsyear ended December 31, 20162019.
Leases—We determine if an arrangement is a lease at the commencement date. Operating leases, as lessee, are included in operating lease right-of-use (“ROU”) assets and 2015. Valuation adjustments of $500,000operating lease liabilities on our consolidated balance sheets. We currently do not have any finance leases.
Operating lease ROU assets and $439,000 on previously impaired notes were credited to impairment charges for the years ended December 31, 2016 and 2015, respectively.
Marketable Securities—Marketable securities include U.S. treasury bills and publicly traded equity securities. All of these investmentsoperating lease liabilities are recorded at fair value. Prior to our investment in the AQUA U.S. Fund, it also included put and call options in certain publicly traded equity securities. Put and call options are considered derivatives. The fair value of these investments has been determinedrecognized based on the closing price aspresent value of the balance sheetfuture minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms used to calculate our right-of-use asset may include options to extend or terminate the lease when

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it is reportedreasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Subsequent to the initial recognition, lease liabilities are measured using the effective interest method. The ROU asset is generally reduced utilizing a straight-line method adjusted for the lease liability accretion during the period.
We have lease agreements with lease and non-lease components, which under the elected practical expedients under Accounting Standard Codification (“ASC”) 842, we are not accounting for separately. For certain equipment leases, such as “marketable securities” or “liabilitiesoffice equipment, copiers and vehicles, we account for the lease and non-lease components as a single lease component.
As of January 1, 2019, we recorded operating lease liabilities as well as a corresponding operating lease ROU asset which includes deferred rent and the reclassified intangible assets and intangible liabilities associated with marketable securitiesabove/below market-rate leases where we are the lessee.
Intangible Assets and other” inLiabilities—Intangible assets represent the consolidated balance sheets.acquisition of a permanent docking easement and intangible liabilities represent the liabilities recorded on certain hotel properties’ lessor lease contracts that were below market rates at the date of acquisition. The cost of securities soldasset is determined bynot subject to amortization and liabilities are amortized using the high cost method. Net investment income, including interest income (expense), dividends, realized gains and losses and costsstraight-line method over the remaining terms of investment, is reported as a component of “other income (expense).” Unrealized gains and losses on these investments are reported as “unrealized gain (loss) on marketable securities” in the consolidated statements of operations.respective lease contracts. See note 21.
Deferred Costs, net—Debt issuance costs associated with debt obligations are reflected as a direct reduction to the related debt obligation on our consolidated balance sheets. Prior to its expiration, debtDebt issuance costs associated with our secured revolving credit facility were presented as an asset on our consolidated balance sheets. Deferred loan costs are recorded at cost and amortized over the terms of the related indebtedness using the effective interest method. Deferred franchise fees are amortized on a straight linestraight-line basis over the terms of the related franchise agreements and are presented as an asset on our consolidated balance sheets. See notes 68 and 8.20.
Intangible Assets and Liabilities—Intangible assets and liabilities represent the assets and liabilities recorded on certain hotel properties’ ground lease contracts that were below or above market rates at the date of acquisition. These assets and liabilities are amortized using the straight line method over the remaining terms of the respective lease contracts. See note 7.
Derivative Instruments and Hedging—We use interest rate derivatives to hedge our risks and to capitalize on the historical correlation between changes in LIBOR (London Interbank Offered Rate) and RevPAR. Interest rate derivatives could include swaps, caps, floors,floor, and flooridors. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of the designated hedged item or transaction. We also use credit default swaps to hedge financial and capital market risk. All of our derivatives are subject to master- netting settlement arrangements and the credit default swaps are subject to credit support annexes. For credit default swaps, cash collateral is posted by us as well as our counterparty. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral. We also purchase options on Eurodollar futures as a hedge against our cash flows. Eurodollar futures prices reflect market expectations for interest rates on three month Eurodollar deposits for specific dates in the future, and the final settlement price is determined by three month LIBOR on the last trading day. Options on Eurodollar futures provide the ability to limit losses while maintaining the possibility of profiting from favorable changes in the futures prices. As the purchaser, our maximum potential loss is limited to the initial premium paid for the Eurodollar option contracts, while our potential gain has no limit. 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 made good.
All derivatives are recorded at fair value in accordance with the applicable authoritative accounting guidance. None of our derivative instruments are designated as cash flow hedges. Interest rate derivatives, credit default swaps and options on futures contracts are reported as “derivative assets, net” in the consolidated balance sheets. Interest rate derivatives and futures, changes in fair value are recognized in earnings as “unrealized gain (loss) on derivatives” in the consolidated statements of operations. Accrued interest on non-hedge designated interest rate derivatives is included in “accounts receivable, net” in the consolidated balance sheets.
For non-hedge designated interest rate derivatives, credit default swaps and options on futures contracts, changes in fair value and realized gains and losses are recognized in earnings as “unrealized gain (loss) on derivatives” and “other income (expense),, respectively, in the consolidated statements of operations. Accrued interest on interest rate derivatives is included in “accounts receivable, net” in the consolidated balance sheets.

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Due to/from Related PartyParties—Due to/from related partyparties represents current receivables and payables resulting from transactions related to hotel management project management and market services with a related party. Due to/from related partyparties is generally settled within a period not exceeding one year.
Due to/from Ashford Prime OP, net—Due to/from Ashford Prime OP represents receivables and payables resulting from certain expenses. Due to/from Ashford Prime OP is generally settled within a period not exceeding one year.
Due to/from Ashford Inc.—Due to/from Ashford Inc. represents current receivables and payables resulting primarily from the advisory services fee, including reimbursable expenses.expenses as well as other hotel products and services. Due to/from Ashford Inc., is generally settled within a period not exceeding one year.
Due to/from Third-Party Hotel Managers—Due to/from third-party hotel managers primarily consists of amounts due from Marriott related to our cash reserves held at the Marriott corporate level related to operating,our operations, real estate taxes and other items. Due to/from third-party hotel managers also represents current receivables and payables resulting from transactions related to hotel management. Due to/from third-party hotel managers is generally settled within a period not exceeding one year.
Unfavorable Management Contract Liabilities—Certain management agreements assumed in previous acquisitions had terms that were more favorable to the respective managers than typical market management agreements at the acquisition dates. As a result, we initially recorded unfavorable contract liabilities related to those management agreements totaling $23.4 million based on the present value of expected cash outflows over the initial terms of the related agreements. The unfavorable contract

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liabilities are amortized as reductions to incentive management fees on a straight-line basis over the initial terms of the related agreements. In evaluating unfavorable contract liabilities, our analysis involves considerable management judgment and assumptions.
Noncontrolling Interests—The redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income attributable to the common unit holders based on the weighted average ownership percentage of these limited partners’ common unit holdings throughout the period. The redeemable noncontrolling interests in our operating partnership is classified in the mezzanine section of the consolidated balance sheets as these redeemable operating partnership units do not meet the requirements for permanent equity classification prescribed by the authoritative accounting guidance because these redeemable operating partnership units may be redeemed by the holder as described in note 13.14. The carrying value of the noncontrolling interests in the operating partnership is based on the greater of the accumulated historical cost or the redemption value.
The noncontrolling interests in consolidated entities represent ownership interests of 15% in two2 hotel properties held by one1 joint venture at December 31, 20172019 and 2016,2018, and is reported in equity in the consolidated balance sheets.
Net income/loss attributable to redeemable noncontrolling interests in the operating partnership and income/loss from consolidated entities attributable to noncontrolling interests in our consolidated entities are reported as deductions/additions from/to net income/loss. Comprehensive income/loss attributable to these noncontrolling interests is reported as reductions/additions from/to comprehensive income/loss.
Revenue RecognitionHotel revenues, includingOn January 1, 2018, we adopted Topic 606 using the modified retrospective method. As the adoption of this standard did not have a material impact on our consolidated financial statements, no adjustments to opening retained earnings were made as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605 - Revenue Recognition.
Rooms revenue represents revenue from the occupancy of our hotel rooms, which is driven by the occupancy and average daily rate charged. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room food, beverage,stays with customers are generally short in duration and ancillary revenues such as long-distance telephone service, laundry, parking and space rentals, are recognized as services are provided over the course of the hotel stay.
Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, in-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audiovisual equipment/services, rental of function rooms, and other F&B related revenue. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audiovisual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenue as appropriate (i.e. gross vs. net).
Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, resort and destination fees, spas, parking, entertainment and other guest services, as well as rental revenue primarily from leased retail outlets at our hotel properties. Cancellation fees are recognized from non-cancellable deposits when services have been rendered. the customer provides notification of cancellation in accordance with established management policy time frames.
Taxes collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned. We discontinue recording interest
Prior to the adoption of Topic 606 on January 1, 2018, hotel revenues, including rooms, food, beverage, and amortizing discounts/premiumsancillary revenues such as long-distance telephone service, laundry, parking and space rentals, were recognized when the contractual payment of interest and/or principal isservices have been rendered. Taxes collected from customers and submitted to taxing authorities were not receivedrecorded in revenue. Interest income has been recognized when contractually due.earned.
Other Hotel Expenses—Other hotel expenses include Internet, telephone charges, guest laundry, valet parking, and hotel-level general and administrative, fees, sales and marketing expenses, repairs and maintenance, franchise fees and utility costs. They are expensed as incurred.
Advertising Costs—Advertising costs are charged to expense as incurred. For the years ended December 31, 2019, 2018 and 2017, 2016 and 2015, our continuing operationswe incurred advertising costs of $7.5$10.4 million, $6.4$8.5 million and $5.6$7.5 million, respectively. Advertising costs related to continuing operations are included in “other” hotel expenses in the accompanying consolidated statements of operations.

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Equity-Based CompensationStock/Prior to the adoption of Accounting Standards Update (“ASU”) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) in the third quarter of 2018, stock/unit-based compensation for non-employees iswas accounted for at fair value based on the market price of the shares at period end in accordance with applicable authoritative accounting guidance that resultsresulted in recording expense, included in “advisory services fee,”fee” and “management fees”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-basedPerformance Long-Term Incentive

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Plan (“Performance LTIP”) units granted to certain executive officers arewere accounted for at fair value at period end based on a Monte Carlo simulation valuation model that resultsresulted 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 certain independent directors are recorded at fair value based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant.
After the adoption of ASU 2018-07 in the third quarter of 2018, stock/unit-based compensation for non-employees is measured at the grant date and expensed ratably over the vesting period based on the original measurement as of the grant date. This results in the recording of expense, included in “advisory services fee,” “management fees” and “corporate, general and administrative” expense, equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. PSUs and Performance LTIP units granted to certain executive officers vest based on market conditions and are measured at the grant date fair value based on a Monte Carlo simulation valuation model. The subsequent expense is then ratably recognized over the service period as the service is rendered regardless of when, if ever, the market conditions are satisfied. This results in recording expense, included in “advisory services fee,” equal to the ratable amount of the grant date fair value based on the requisite service period satisfied during the period. Stock/unit grants to certain independent directors are measured at the grant date based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant.
Depreciation and AmortizationOwned hotel properties are depreciated overDepreciation expense is based on the estimated useful life of the assets, andwhile amortization expense for leasehold improvements are amortized overis based on the shorter of the lease term or the estimated useful life of the related assets. Presently, hotel properties are depreciated using the straight-line method over lives ranging from 7.5 to 39 years for buildings and improvements and 1.5 to 5 years for furniture, fixtures and equipment.FF&E. While we believe our estimates are reasonable, a change in estimated useful lives could affect depreciation and amortization expense and net income (loss) as well as resulting gains or losses on potential hotel sales.
Income Taxes—As a REIT, we generally are not subject to federal corporate income tax on the portion of our net income (loss) that does not relate to taxable REIT subsidiaries. However, Ashford TRS is treated as a taxable REIT subsidiary for U.S. federal income tax purposes. In accordance with authoritative accounting guidance, we account for income taxes related to Ashford TRS using the asset and liability method under which deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, the analysis utilized by us in determining our deferred tax asset valuation allowance involves considerable management judgment and assumptions. See note 19.
The “Income Taxes” topic of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards CodificationFASB’s ASC addresses the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance requires us to determine whether tax positions we have taken or expect to take in a tax return are more likely than not to be sustained upon examination by the appropriate taxing authority based on the technical merits of the positions. Tax positions that do not meet the more likely than not threshold would be recorded as additional tax expense in the current period. We analyze all open tax years, as defined by the statute of limitations for each jurisdiction, which includes the federal jurisdiction and various states. We classify interest and penalties related to underpayment of income taxes as income tax expense. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and cities. Tax years 20132015 through 20172019 remain subject to potential examination by certain federal and state taxing authorities.
Income (Loss) Per Share—Basic income (loss) per common share is calculated by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding during the period using the two-class method prescribed by applicable authoritative accounting guidance. Diluted income (loss) per common share is calculated using the two-class method, or the treasury stock method, if more dilutive. Diluted income (loss) per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.
Recently Adopted Accounting StandardsIn March 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017, and the adoption of this standard did not have any impact on our financial position, results of operations or cash flows.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which clarifies the presentation of restricted cash and restricted cash equivalents in the statements of cash flows. Under ASU 2016-18 restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017 on a retrospective basis. The adoption of this standard resulted in the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows for all periods presented. As a result, for the years ended December 31, 2016 and 2015, net cash provided by operating activities increased $4.7 million and $5.4 million, respectively. Net cash used in investing activities increased $13.9 million for the year ended December 31, 2016 and decreased $73.2 million for the year ended December 31, 2015. Our beginning-of-period cash, cash equivalents and restricted cash increased $144.0 million, $153.7 million and $85.8 million in 2017, 2016 and 2015, respectively.

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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 standard permits the use of either the full retrospective or cumulative effect (modified retrospective) transition method. Based on our assessment of this standard, it will not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Additionally, we have historically disposed of hotel properties for cash sales with no contingencies and no future involvement in the hotel operations, therefore, ASU No. 2014-09 will not impact the recognition of hotel sales. We have selected the modified retrospective method. We continue to evaluate the related disclosure requirements.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in OCI the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We do not expect that ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures.
In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”)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 beUnder the new standard, lessee leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. In July 2018, the FASB issued ASU

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2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, is effectiveincluding but not limited to lease residual value guarantee, rate implicit in the lease, lease term and purchase option. The amendments in ASU 2018-11 provide an optional transition method 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 earliestnew standard, which allows entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periodperiods presented in the year of adoption. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842), Narrow-Scope Improvements for Lessors (“ASU 2018-20”). The amendments create a lessor practical expedient applicable to sales and other similar taxes incurred in connection with a lease, and simplify lessor accounting for lessor costs paid by the lessee.
We adopted the standard effective January 1, 2019 on a modified retrospective basis and implemented internal controls to enable the preparation of financial statements, with certaininformation on adoption. We elected the practical expedients available.which provide us the option to apply the new guidance at its effective date on January 1, 2019 without having to adjust the comparative prior period financial statements. The accounting forpackage of practical expedients also allowed us to carry forward the historical lease classification. Additionally, in conjunction with the transition from ASC 840 to ASC 842, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases under which we arewith an initial term of twelve months or less (“short-term leases”) on the lessor remains largely unchanged. While we are currentlybalance sheet across all existing asset classes.
The adoption of this standard has resulted in the initial stages of assessing the impact that ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact to our consolidated financial statements upon adoption will be the recognition on a discounted basis, of our future minimum rentals due under our hotel ground leases and other noncancelable leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations.liabilities primarily related to our ground lease arrangements for which we are the lessee. As of January 1, 2019, we recorded operating lease liabilities of $43.3 million as well as a corresponding operating lease ROU asset of $38.8 million, which includes, among other things, reclassified intangible assets of $9.0 million, intangible liabilities of $13.0 million and deferred rent of $485,000. The standard did not have a material impact on our consolidated statements of operations and statements of cash flows. See related disclosures in note 6.
Recently Issued Accounting StandardsIn June 2016, the FASB issued ASU 2016-13, Financial Instruments -Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments(" (“ASU 2016-13"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 permittedIn November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2018-19”). ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for periods beginning after December 15, 2018.in accordance with Topic 842, Leases. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates (“ASU 2018-19”). In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2019-11”). ASU 2019-11, clarifies specific issues within the amendments of ASU 2016-13. We are currently evaluating the impact that ASU 2016-13 will have on theour accounts receivable and notes receivable balances within our consolidated financial statements and related disclosures.
In August 2016,January 2020, the FASB issued ASU 2016-15, Statement of Cash Flows2020-01, Investments – Equity Securities (Topic 230): Classification of Certain Cash Receipts321), Investments—Equity Method and Cash Payments - aJoint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task ForceForce) (“ASU 2016-15”2020-01”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in, which clarifies 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 frominteraction between the settlement of insurance claims, distributions received fromaccounting for equity securities, equity method investments, and beneficial interestscertain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in securitization transactions.accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2016-152020-01 is effective for fiscal years beginning after December 15, 2017,2020, and interim periods within those fiscal years.years and should be applied prospectively. Early adoption is permitted. We are currently evaluating the impact that ASU 2016-152020-01 will have on our consolidated financial statements and related disclosures.
3. Revenue
For the years ended December 31, 2019, 2018, and 2017, we recorded $0, $2.6 million, and $0 of business interruption income for the Hilton St. Petersburg Bayfront and Key West Crowne Plaza related to a settlement for lost profits from the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010. In January 2017, the FASB issued ASU 2017-01, 2019, we recorded $172,000 of miscellaneous business interruption income. Business Combinations (Topic 805) - Clarifying the Definitioninterruption income is included in “other” hotel revenue in our consolidated statements of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidanceoperations.
Taxes specifically collected from customers and submitted to assist entities with evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. ASU 2017-01taxing authorities are not recorded in revenue. Interest income is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. While we are currently evaluating the potential impact of the standard, we currently expect that certain future hotel acquisitions may be considered asset acquisitionsrecognized when earned.


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rather than business combinations, which would affect capitalization of acquisitions costs (such costs are expensed for business combinations and capitalized for asset acquisitions).
In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets(ASU “2017-05”), which clarifies the scope of Accounting Standard Codification (“ASC”) Subtopic 610-20,Other Income-Gains and Losses from the Derecognition of Nonfinancial Assetsand adds guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective for fiscal years beginning after December 15, 2017.Early adoption is permitted. An entity may elect to apply ASU 2017-05 under a retrospective or modified retrospective approach. We are evaluating the impact that ASU 2017-05 will have onThe following tables present our consolidated financial statements and related disclosures.
3. Investments in Hotel Properties
Investments in hotel properties consisted of the followingrevenue disaggregated by geographical areas (in thousands):
 December 31,
 2017 2016
Land$653,293
 $663,013
Buildings and improvements3,895,112
 3,913,377
Furniture, fixtures and equipment468,420
 434,091
Construction in progress35,273
 32,525
Condominium properties12,196
 11,558
Total cost5,064,294
 5,054,564
Accumulated depreciation(1,028,379) (894,001)
Investments in hotel properties, net$4,035,915
 $4,160,563
  Year Ended December 31, 2019
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Other Total
Atlanta, GA Area 9
 $72,572
 $18,878
 $4,650
 $
 $96,100
Boston, MA Area 3
 61,222
 7,943
 3,773
 
 72,938
Dallas / Ft. Worth Area 7
 59,926
 15,814
 3,486
 
 79,226
Houston, TX Area 3
 26,038
 9,208
 809
 
 36,055
Los Angeles, CA Metro Area 6
 78,689
 16,117
 5,237
 
 100,043
Miami, FL Metro Area 3
 27,857
 9,277
 938
 
 38,072
Minneapolis - St. Paul, MN - WI Area 4
 32,073
 7,997
 3,727
 
 43,797
Nashville, TN Area 1
 51,628
 22,356
 2,356
 
 76,340
New York / New Jersey Metro Area 7
 98,961
 24,239
 3,461
 
 126,661
Orlando, FL Area 3
 30,400
 1,865
 1,737
 
 34,002
Philadelphia, PA Area 3
 24,469
 3,903
 723
 
 29,095
San Diego, CA Area 2
 17,838
 1,395
 1,015
 
 20,248
San Francisco - Oakland, CA Metro Area 7
 91,081
 9,628
 2,627
 
 103,336
Tampa, FL Area 2
 25,187
 7,858
 1,112
 
 34,157
Washington D.C. - MD - VA Area 9
 124,056
 26,231
 8,333
 
 158,620
Other Areas 48
 343,813
 58,878
 23,567
 
 426,258
Orlando WorldQuest 
 4,066
 102
 1,333
 
 5,501
Sold properties 4
 15,111
 2,228
 769
 
 18,108
Corporate 
 
 
 
 4,202
 4,202
Total 121
 $1,184,987
 $243,917
 $69,653
 $4,202
 $1,502,759
The cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes was approximately $4.1 billion and $3.4 billion as of December 31, 2017 and 2016.
For the years ended December 31, 2017, 2016 and 2015, we recognized depreciation expense of $246.0 million, $243.6 million and $210.1 million, respectively.
  Year Ended December 31, 2018
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Other Total
Atlanta, GA Area 9
 $66,688
 $17,060
 $5,217
 $
 $88,965
Boston, MA Area 3
 60,232
 7,725
 3,468
 
 71,425
Dallas / Ft. Worth Area 7
 61,910
 16,746
 3,602
 
 82,258
Houston, TX Area 3
 26,783
 9,214
 854
 
 36,851
Los Angeles, CA Metro Area 6
 77,976
 15,645
 4,702
 
 98,323
Miami, FL Metro Area 3
 28,366
 9,009
 997
 
 38,372
Minneapolis - St. Paul, MN - WI Area 4
 36,138
 9,618
 4,602
 
 50,358
Nashville, TN Area 1
 50,120
 13,116
 1,783
 
 65,019
New York / New Jersey Metro Area 6
 74,441
 23,029
 2,899
 
 100,369
Orlando, FL Area 3
 28,966
 1,570
 1,325
 
 31,861
Philadelphia, PA Area 3
 24,385
 4,534
 869
 
 29,788
San Diego, CA Area 2
 18,392
 1,075
 971
 
 20,438
San Francisco - Oakland, CA Metro Area 6
 81,368
 7,726
 2,562
 
 91,656
Tampa, FL Area 2
 22,896
 6,459
 1,542
 
 30,897
Washington D.C. - MD - VA Area 9
 113,902
 23,673
 6,695
 
 144,270
Other Areas 48
 330,898
 55,358
 23,245
 
 409,501
Orlando WorldQuest 
 4,429
 130
 1,188
 
 5,747
Sold properties 7
 26,797
 2,624
 1,261
 
 30,682
Corporate 
 
 
 
 4,009
 4,009
Total 122
 $1,134,687
 $224,311
 $67,782
 $4,009
 $1,430,789
4. Investment in Unconsolidated Entities
Ashford Inc.
As of December 31, 2017, we held approximately 598,000 shares of Ashford Inc. common stock, which represented an approximate 28.6% ownership interest, with a carrying value of approximately $437,000 and a fair value of $55.6 million.


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  Year ended December 31, 2017
Primary Geographical Market Number of Hotels Rooms Food and Beverage Other Hotel Other Total
Atlanta, GA Area 9
 $67,463
 $17,526
 $4,979
 $
 $89,968
Boston, MA Area 3
 58,719
 8,265
 3,217
 
 70,201
Dallas / Ft. Worth Area 7
 61,086
 16,887
 3,258
 
 81,231
Houston, TX Area 3
 27,965
 9,162
 738
 
 37,865
Los Angeles, CA Metro Area 6
 77,224
 15,503
 4,592
 
 97,319
Miami, FL Metro Area 3
 28,833
 9,057
 992
 
 38,882
Minneapolis - St. Paul, MN - WI Area 4
 36,156
 9,740
 4,391
 
 50,287
Nashville, TN Area 1
 50,530
 16,979
 1,629
 
 69,138
New York / New Jersey Metro Area 6
 73,670
 24,876
 2,528
 
 101,074
Orlando, FL Area 3
 30,053
 1,851
 736
 
 32,640
Philadelphia, PA Area 3
 23,434
 4,052
 725
 
 28,211
San Diego, CA Area 2
 18,044
 1,512
 769
 
 20,325
San Francisco - Oakland, CA Metro Area 6
 77,713
 8,073
 2,033
 
 87,819
Tampa, FL Area 3
 23,775
 6,699
 760
 
 31,234
Washington D.C. - MD - VA Area 9
 111,928
 23,896
 5,094
 
 140,918
Other Areas 48
 327,697
 54,716
 18,822
 
 401,235
Orlando WorldQuest 
 4,946
 141
 1,224
 
 6,311
Sold properties 10
 43,899
 5,842
 1,717
 
 51,458
Corporate 
 
 
 
 3,154
 3,154
Total 126
 $1,143,135
 $234,777
 $58,204
 $3,154
 $1,439,270

4. Investments in Hotel Properties, net
Investments in hotel properties, net consisted of the following (in thousands):
 December 31,
 2019 2018
Land$769,381
 $670,362
Buildings and improvements4,129,884
 4,062,810
Furniture, fixtures and equipment503,156
 504,806
Construction in progress29,745
 37,394
Condominium properties12,093
 12,091
Total cost5,444,259
 5,287,463
Accumulated depreciation(1,335,816) (1,182,244)
Investments in hotel properties, net$4,108,443
 $4,105,219

The following tables summarize the condensed balance sheetscost of land and our ownership interest in Ashford Inc.depreciable property, net of accumulated depreciation, for U.S. federal income tax purposes was approximately $3.5 billion and $3.6 billion as of December 31, 20172019 and 2016, and the condensed statements of operations and our equity in earnings (loss) of Ashford Inc. for the years ended December 31, 2017, 2016 and 2015 (in thousands):2018, respectively.
Ashford Inc.
Condensed Balance Sheets
 December 31, 2017 December 31, 2016
Total assets$114,810
 $129,797
Total liabilities78,742
 38,168
Redeemable noncontrolling interests5,111
 1,480
Total stockholders’ equity of Ashford Inc.30,185
 37,377
Noncontrolling interests in consolidated entities772
 52,772
Total equity30,957
 90,149
Total liabilities and equity$114,810
 $129,797
Our ownership interest in Ashford Inc.$437
 $5,873
Ashford Inc.
Condensed Statements of Operations
 Year Ended December 31,
 2017 2016 2015
Total revenue$81,573
 $67,607
 $58,981
Total expenses(92,095) (70,064) (60,332)
Operating income (loss)(10,522) (2,457) (1,351)
Realized and unrealized gain (loss) on investment in unconsolidated entity, net
 (1,460) (2,141)
Realized and unrealized gain (loss) on investments, net(91) (7,787) (7,600)
Other income (expense)142
 81
 1,114
Income tax benefit (expense)(9,723) (780) (2,066)
Net income (loss)(20,194) (12,403) (12,044)
(Income) loss from consolidated entities attributable to noncontrolling interests358
 8,860
 10,852
Net (income) loss attributable to redeemable noncontrolling interests1,484
 1,147
 2
Net income (loss) attributable to Ashford Inc.$(18,352) $(2,396) $(1,190)
Our equity in earnings (loss) of Ashford Inc.$(5,437) $(743) $(483)
AQUA U.S. Fund
In June 2015, for consideration of certain marketable securities, we obtained a 52.4% ownership interest in the AQUA U.S. Fund. The AQUA U.S. Fund was managed by Ashford Investment Management, LLC (“AIM”), an indirect subsidiary of Ashford Inc. The AQUA U.S. Fund was consolidated by Ashford Inc. During the first quarter of 2017, we liquidated our investment in the AQUA U.S. Fund subject to a 5% hold back of $2.6 million, which was received during the second quarter of 2017. Our ownership interest in the AQUA U.S. Fund was $50.9 million at December 31, 2016. For the years ended December 31, 2019, 2018 and 2017, 2016 and 2015 our equity in earnings (loss) was $52,000, $(5.1)we recognized depreciation expense of $268.4 million, $257.9 million and $(3.4)$246.0 million, respectively.

Acquisitions
Embassy Suites New York Manhattan Times Square
On January 22, 2019, we acquired a 100% interest in the 310-room Embassy Suites New York Manhattan Times Square for $195.0 million in cash. In connection with this transaction, we entered into a $145.0 million mortgage loan (see note 8).

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We accounted for this transaction as an asset acquisition because substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. We allocated the cost of the acquisition including transaction costs of $1.5 million to the individual assets acquired on a relative fair value basis, which is considered a Level 3 valuation technique, as noted in the following table (in thousands):
Land$111,619
Buildings and improvements80,047
Furniture, fixtures and equipment (1)
8,626
Investments in hotel properties, net$200,292
Key money(3,800)
 $196,492
Net other assets (liabilities)$1,320
_____________________________
(1) FF&E of $8.6 million was sold to Ashford Inc. as a part of the ERFP transaction for the Embassy Suites New York Manhattan Times Square.
The results of operations of the hotel property have been included in our results of operations as of the acquisition date. The table below summarizes the total revenue and net income (loss) of the hotel property in our consolidated statements of operations for the year ended December 31, 2019 (in thousands):
 Year Ended December 31, 2019
Total revenue$26,139
Net income (loss)(3,549)

Hilton Santa Cruz/Scotts Valley
On February 26, 2019, we acquired a 100% interest in the 178-room Hilton Santa Cruz/Scotts Valley for $47.5 million. Consideration included cash of $14.7 million, approximately 1.5 million common units in our operating partnership and the assumption of a non-recourse mortgage loan with a face value of approximately $25.3 million and a fair value of $24.9 million (see note 8). The number of common units was determined using a price of $7.00 per common unit. On February 26, 2019, the price per unit was $5.35 resulting in a fair value of $7.9 million.
We accounted for this transaction as an asset acquisition because substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. We allocated the cost of the acquisition including transaction costs of $355,000 to the individual assets acquired on a relative fair value basis, which is considered a Level 3 valuation technique, as noted in the following table (in thousands):
Land$9,399
Buildings and improvements34,276
Furniture, fixtures and equipment (1)
3,852
Investments in hotel properties, net$47,527
Debt discount407
 $47,934
Net other assets (liabilities)$38
_____________________________
(1)
$3.9 million of FF&E was sold to Ashford Inc. as a part of the ERFP transaction for the Hilton Santa Cruz/Scotts Valley.

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The results of operations of the hotel property have been included in our results of operations as of the acquisition date. The table below summarizes the total revenue and net income (loss) of the hotel property in our consolidated statements of operations for the year ended December 31, 2019 (in thousands):
 Year Ended December 31, 2019
Total revenue$9,106
Net income (loss)(346)

5. Hotel Dispositions, Land Sale, Impairment Charges and Insurance Recoveries
Hotel Dispositions
On August 2, 2019, the Company sold the San Antonio Marriott for $34.0 million in cash. The sale resulted in a gain of approximately $2.6 million for the year ended December 31, 2019, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $26.8 million of debt associated with the hotel property. See note 8.
On August 6, 2019, the Company sold the Hilton Garden Inn Wisconsin Dells for $8.0 million in cash. The sale resulted in a loss of approximately $292,000 for the year ended December 31, 2019, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $7.7 million of debt associated with the hotel property. See note 8.
On August 14, 2019, the Company sold the Savannah Courtyard for approximately $29.8 million in cash. The sale resulted in a loss of approximately $60,000 for the year ended December 31, 2019, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $28.8 million of debt associated with the hotel property. See note 8.
On December 3, 2019, the Company sold the SpringHill Suites Jacksonville for approximately $11.2 million in cash. The sale resulted in a gain of approximately $3.8 million for the year ended December 31, 2019, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations.
On February 20, 2018, the Company sold the SpringHill Suites Glen Allen for approximately $10.9 million in cash. The sale resulted in a loss of approximately $13,000 for the year ended December 31, 2018, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $7.6 million of debt associated with the hotel property. See note 8.
On May 1, 2018, the Company sold the SpringHill Suites Centreville for approximately $7.5 million in cash. The sale resulted in a gain of approximately $98,000 for the year ended December 31, 2018, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $6.6 million of debt associated with the hotel property. See note 8.
On May 10, 2018, the Company sold the Residence Inn Tampa for approximately $24.0 million in cash. The sale resulted in a gain of approximately $390,000 for the year ended December 31, 2018, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $22.5 million of debt associated with the hotel property. See note 8.
On February 1, 2017, the Company sold the Renaissance Portsmouth hotel for approximately $9.2 million in cash. The sale resulted in a loss of $43,000 for the year ended December 31, 2017, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.2 million of debt associated with the hotel property. See note 8.
On March 6, 2017, the Company sold the Embassy Suites Syracuse for approximately $8.8 million in cash. The sale resulted in a loss of $40,000 for the year ended December 31, 2017, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.6 million of debt associated with the hotel property. See note 8.

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On June 29, 2017, the Company sold the Crowne Plaza Ravinia in Atlanta, Georgia for approximately $88.7 million in cash. The sale resulted in a gain of $14.1 million for the year ended December 31, 2017, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statements of operations. The Company also repaid approximately $78.7 million of debt associated with the hotel property. See note 8.
We included the results of operations for these hotel properties through the date of disposition as shown in the consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017. The following table includes condensed financial information from these hotel properties (in thousands):
 Year Ended December 31,
 2019 2018 2017
Total hotel revenue$18,108
 $30,682
 $51,458
Total hotel operating expenses(11,740) (19,631) (34,987)
Gain (loss) on sale of assets and hotel properties6,072
 475
 14,030
Property taxes, insurance and other(1,418) (2,266) (3,105)
Depreciation and amortization(2,399) (4,590) (9,012)
Impairment charges(6,533) (16,983) (8,301)
Operating income (loss)2,090
 (12,313) 10,083
Interest income
 
 12
Interest expense and amortization of premiums and loan costs(808) (2,983) (8,290)
Write-off of premiums, loan costs and exit fees(426) (524) (98)
Income (loss) before income taxes856
 (15,820) 1,707
(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership(136) 2,316
 (265)
Net Income (loss) before income taxes attributable to the Company$720
 $(13,504) $1,442

Land Sale
On October 10, 2019, the Company sold the 1.65-acre parking lot adjacent to the Hilton St. Petersburg Bayfront in St. Petersburg, Florida for consideration of approximately $20.6 million. The sale resulted in a gain of approximately $19.4 million for the year ended December 31, 2019, which was included in “gain (loss) on sale of assets and hotel properties” in the consolidated statement of operations. The Company also repaid approximately $8.0 million of debt associated with the hotel property. See notes 8 and 9. The consideration received is summarized in the table below (in thousands):
Cash$8,250
Note receivable - construction financing (1)
3,543
Note receivable - certificate of occupancy (2)
4,047
Other asset - future ownership rights of parking parcel (3)
4,100
Other asset - free use of parking easement prior to development commencement (4)
235
Other asset - reimbursement of parking fees while parking parcel is in development (5)
462
Total$20,637

(1)
This note receivable has a face value of $4.0 million and was discounted at 7.0%, which represents the stated rate in the note. See note 9.
(2)
This note receivable has a face value of $5.3 million and was discounted at 7.0%, which represents the stated rate in the note. See note 9.
(3)
The $4.1 million is the estimated fair value on the closing date of the transaction.
(4)
This amount represents the value for the time period that the Company will receive free use of the parking easement prior to development commencement. The total amount was discounted at 7.0%.
(5)
This amount represents the value for parking fees that will be reimbursed to the Company during the development of the parking parcel and was discounted at 7.0%.
Impairment Charges and Insurance Recoveries
For the year ended December 31, 2019, we recorded impairment charges of $33.6 million. During the second quarter of 2019, we recorded impairment charges of $1.4 million at the Wisconsin Dells Hilton Garden Inn and $5.1 million at the Savannah Courtyard related to the disposition of the hotel properties. In the fourth quarter of 2019, we recorded impairment charges of $9.3

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million at the Pittsburgh Hampton Inn Waterfront, $7.6 million at the Stillwater Residence Inn, and $10.2 million at the Washington Hampton Inn Pittsburgh Meadow Lands. These impairment charges resulted from changes in the estimated holding periods of these hotel properties. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques.
For the year ended December 31, 2018, we recorded a $23.4 million impairment charge, which was comprised of $9.9 million at the San Antonio Marriott, $6.7 million at the Annapolis Crowne Plaza, $5.1 million at the Wisconsin Dells Hilton Garden Inn and $2.0 million at the SpringHill Suites Centreville related to its disposition. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques. We also recorded impairment adjustments of $275,000 in 2018 based on changes in estimates of property damages incurred from Hurricanes Harvey and Irma.
For the year ended December 31, 2017, we recorded an impairment charge of $8.2 million related to 2 hotel properties. The impairment charges occurred at the SpringHill Suites Centreville and the SpringHill Suites Glen Allen in the amounts of $4.7 million and $3.5 million, respectively. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques. The hotel properties were held for sale as of December 31, 2017 and subsequently sold during 2018.
In August and September 2017, NaN of our hotel properties in Texas and Florida were impacted by the effects of Hurricanes Harvey and Irma. The Company holds insurance policies that provide coverage for property damage and business interruption after meeting certain deductibles at all of its hotel properties. During 2017, the Company recognized impairment charges, net of anticipated insurance recoveries of $2.0 million. Additionally, the Company recognized remediation and other costs, net of anticipated insurance recoveries of $2.8 million, included primarily in other hotel operating expenses. During the year ended December 31, 2019, 2018 and 2017, the Company received proceeds of $0, $401,000, and $612,000, respectively, for business interruption losses associated with lost profits, which has been recorded as “other” hotel revenue in our consolidated statement of operations, in excess of the deductible of $360,000.
We received additional proceeds of $43,000 and $836,000 associated with property damage from the hurricanes during the years ended December 31, 2019 and 2018. The Company will not record an insurance recovery receivable for business interruption losses associated with lost profits until the amount for such recoveries is known and the amount is realizable.
6. Leases
On January 1, 2019, we adopted ASC 842 on a modified retrospective basis. We elected the practical expedients which allowed us to apply the new guidance at its effective date on January 1, 2019 without adjusting the comparative prior period financial statements. The package of practical expedients also allowed us to carry forward the historical lease classification. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record short-term leases on the balance sheet across all existing asset classes.
The adoption of this standard has resulted in the recognition of operating lease ROU assets and lease liabilities primarily related to our ground lease arrangements for which we are the lessee. As of January 1, 2019, we recorded operating lease liabilities of $43.3 million as well as a corresponding operating lease ROU asset of $38.8 million which includes the reclassified intangible assets of $9.0 million, intangible liabilities of $13.0 million and deferred rent of $485,000. The standard did not have a material impact on our consolidated statements of operations and statements of cash flows.
The majority of our leases, as lessee, are operating ground leases. We also have operating equipment leases, such as copier and vehicle leases, at our hotel properties. Some leases include one or more options to renew, with renewal terms that can extend the lease term from 1 year to 99 years. The exercise of lease renewal options is at our sole discretion. Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities. We have no finance leases as of December 31, 2019.
The discount rate used to calculate the lease liability and ROU asset related to our ground leases is based on our incremental borrowing rate (“IBR”), as the rate implicit in each lease is not readily determinable. The IBR is determined at commencement of the lease, or upon modification of the lease, as the interest rate a lessee would have to pay to borrow on a fully collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment.
During preparation of the December 31, 2019 financial statements management identified an error in the adoption of ASC 842. One lease was inadvertently excluded from the original entry to record the initial operating lease right-of-use asset and operating lease liability in the amount of approximately $8.8 million. Management evaluated the impact of this balance sheet entry and concluded it was immaterial. As a result, the operating lease right-of-use asset and related operating lease liability were recorded

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as of December 31, 2019 in our consolidated balance sheet as an out-of-period adjustment. There was no impact to net income (loss) or cash flows for any prior period.
As of December 31, 2019, our leased assets and liabilities consisted of the following (in thousands):
 December 31, 2019
Assets 
Operating lease right-of-use assets$49,995
Liabilities 
Operating lease liabilities$53,270

We incurred the following operating lease costs related to our operating leases (in thousands):
Classification Year Ended December 31, 2019
Hotel operating expenses - other (1)
 $4,323

(1) For the year ended December 31, 2019, operating lease cost includes approximately $501,000 of variable lease cost associated with the ground leases and $176,000 of net amortization costs related to the intangible assets and liabilities that were reclassified to “operating lease right-of-use assets” upon adoption of ASC 842. Short-term lease costs in aggregate are immaterial.
Other information related to leases is as follows:
 Year Ended December 31, 2019
Supplemental Cash Flows Information 
Cash paid for amounts included in the measurement of lease liabilities: 
Operating cash flows from operating leases (in thousands)$3,511
Weighted Average Remaining Lease Term 
Operating leases (1)
73 years
Weighted Average Discount Rate 
Operating leases (1)
5.17%

(1) Calculated using the lease term, excluding extension options, and our calculated discount rates of the ground leases and owner managed leases.
Future minimum lease payments due under non-cancellable leases as of December 31, 2019 were as follows (in thousands):
 Operating Leases
2020$3,425
20213,235
20223,092
20233,026
20243,026
Thereafter204,869
Total future minimum lease payments220,673
Less: interest(167,403)
Present value of lease liabilities$53,270


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Future minimum lease payments due under non-cancellable leases under ASC 840 as of December 31, 2018 were as follows (in thousands):
2019$2,643
20202,506
20212,379
20222,297
20232,249
Thereafter121,697
Total$133,771

Enhanced Return Funding Program
We lease certain assets from Ashford Inc. under the Enhanced Return Funding Program. See note 17.
7. Investment in Unconsolidated Entities
Ashford Inc.
As of December 31, 2018, the Company held approximately 598,000 shares of Ashford Inc. common stock, which represented an approximate 25.0% ownership interest in Ashford Inc. with a carrying value of $1.9 million and a fair value of $31.0 million.
On October 2, 2019, the Company entered into a stock purchase agreement with Ashford LLC under which Ashford LLC purchased all of the common stock of Ashford Inc. held by Ashford TRS, totaling 393,077 shares, for $30 per share, resulting in total proceeds of approximately $11.8 million and a gain of $11.8 million to the Company which is included in “other income (expense)” in our consolidated statement of operations for the year ended December 31, 2019. The carrying value of our investment in Ashford Inc. on October 2, 2019 was $0.
On October 21, 2019, the Company announced that its board of directors had declared the distribution of its remaining 205,086 shares of common stock of Ashford Inc. Both common stockholders and unitholders of Ashford Trust received their pro rata share of Ashford Inc. common stock. The distribution to Company common stockholders and unitholders was completed through a pro-rata taxable dividend of Ashford Inc. common stock on the Distribution Date to Company Record Holders as of the close of business of the NYSE on the Record Date. On the Distribution Date, each Company Record Holder received approximately 0.0017 shares of Ashford Inc. common stock for every unit and/or share of the Company’s common stock held by such Company Record Holder on the Record Date. No fractional shares of Ashford Inc. common stock were issued. Fractional shares of Ashford Inc. common stock to which Company Record Holders would otherwise be entitled were aggregated and, after the distribution, sold in the open market by the distribution agent. The aggregate net proceeds of the sales were distributed in a pro-rata manner as cash payments to the Company Record Holders who would otherwise have received fractional shares of Ashford Inc. common stock. Additionally, Company Record Holders who hold in “street name” on behalf of their customers may sell additional shares into the open market to make cash payments to their customers who would have otherwise received fractional shares of Ashford Inc. common stock. The carrying value of the remaining investment in Ashford Inc. on November 5, 2019 was $0.
Subsequent to the distribution, the Company does not have any ownership interest in Ashford Inc.

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The following tables summarize the condensed consolidated balance sheet and our ownership interest in Ashford Inc. as of December 31, 2018, and the condensed consolidated statements of operations of Ashford Inc. and our equity in earnings (loss) for the years ended December 31, 2019, 2018 and 2017 (in thousands):
Ashford Inc.
Condensed Consolidated Balance Sheet
 December 31, 2018
Total assets$379,005
Total liabilities$108,726
Series B Convertible Preferred Stock200,847
Redeemable noncontrolling interests3,531
Total stockholders’ equity of Ashford Inc.65,443
Noncontrolling interests in consolidated entities458
Total equity65,901
Total liabilities and equity$379,005
Our ownership interest in Ashford Inc.$1,896

Ashford Inc.
Condensed Consolidated Statements of Operations
 Year Ended December 31,
 2019 2018 2017
Total revenue$291,250
 $195,520
 $81,573
Total operating expenses(302,480) (196,359) (92,095)
Operating income (loss)(11,230) (839) (10,522)
Equity in earnings (loss) of unconsolidated entities(286) 
��
Realized and unrealized gain (loss) on investments, net
 
 (91)
Interest expense and amortization of loan costs(2,367) (1,200) (122)
Other income (expense)49
 (505) 264
Income tax benefit (expense)(1,540) 10,364
 (9,723)
Net income (loss)(15,374) 7,820
 (20,194)
(Income) loss from consolidated entities attributable to noncontrolling interests536
 924
 358
Net (income) loss attributable to redeemable noncontrolling interests983
 1,438
 1,484
Net income (loss) attributable to Ashford Inc.(13,855) 10,182
 (18,352)
Preferred dividends(14,435) (4,466) 
Amortization of preferred stock discount(1,928) (730) 
Net income attributable to common stockholders$(30,218) $4,986
 $(18,352)
Our equity in earnings (loss) of Ashford Inc.$(1,896) $1,459
 $(5,437)

OpenKey
During the years ended December 31, 2017 and 2016, the Company made investments totaling $1.0 million and $2.3 million, respectively, in OpenKey, which is controlled and consolidated by Ashford Inc., is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for a 13.3% ownership interest.keyless entry into hotel guest rooms. Our investment is recorded as a component of “investment in unconsolidated entities” in our consolidated balance sheetsheets and is accounted for under the equity method of accounting as we have been deemed to have significant influence over the entity under the applicable accounting guidance. As of December 31, 2019, the Company has made investments in OpenKey totaling $4.6 million. In 2019, 2018, and 2017 our 16.2% ownership interest had a carrying valuewe made additional investments in OpenKey of $2.5 million. For the years ended December 31, 2017$647,000, $667,000 and 2016, our equity in loss of the unconsolidated entity was $481,000 and $305,000,$983,000, respectively.
Ashford Prime
In July 2015, we announced that our board of directors declared the distribution (1) to our stockholders of approximately 4.1 million shares of common stock of Ashford Hospitality Prime, Inc. (“Ashford Prime”) to be received by us upon redemption of common units of Ashford Hospitality Prime Limited Partnership, the operating partnership of Ashford Prime (“Ashford Prime OP”) and (2) to the common unitholders of Ashford Trust OP of our remaining common units of Ashford Prime OP. The distribution occurred on July 27, 2015. As a result of the distribution, we no longer retain an interest in Ashford Prime. The previously deferred gain of $599,000 from the sale of the Pier House Resort in March 2014 was recognized during the year ended December 31, 2015.
5. Hotel Dispositions, Assets Held for Sale and Impairment Charges
Hotel Dispositions
On June 1, 2016, the Company sold the Noble Five Hotels, a 5-hotel portfolio of select-service hotel properties for approximately $142.0 million in cash. The sale resulted in a gain of $22.8 million for the year ended December 31, 2016 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. The portfolio is comprised of the Courtyard Edison in Edison, New Jersey; the Residence Inn Buckhead in Atlanta, Georgia; the Courtyard Lake Buena Vista, the Fairfield Inn Lake Buena Vista and the SpringHill Suites Lake Buena Vista in Orlando, Florida.
On September 1, 2016, the Company sold the Hampton Inn Gainesville for approximately $26.5 million in cash. The sale resulted in a gain of $1.6 million for the year ended December 31, 2016 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations.
On October 1, 2016, the Company sold the SpringHill Suites in Gaithersburg, Maryland for approximately $13.2 million. The consideration received from the sale was a combination of cash and approximately 2.0 million Class B common units of the Company’s operating partnership. The Class B operating partnership units were redeemed at a price of $5.74 per unit, or a price of $6.05 per common share after taking into account the current conversion factor. The Company also paid off approximately $10.4 million of debt associated with the hotel property. The sale resulted in a loss of $223,000 for the year ended December 31, 2016 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations (see impairment discussion below).
On October 7, 2016, the Company sold the Courtyard and Residence Inn in Palm Desert, California for $36.0 million. The consideration received from the sale was a combination of cash and assumption of approximately $23.8 million of mortgage debt associated with the hotel properties. The sale resulted in a gain of $7.5 million for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations.
On February 1, 2017, the Company sold the Renaissance hotel in Portsmouth, Virginia (“Renaissance Portsmouth”) for approximately $9.2 million in cash. The sale resulted in a loss of $43,000 for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.2 million of debt associated with the hotel property. See note 8.
On March 6, 2017, the Company sold the Embassy Suites in Syracuse, New York (“Embassy Suites Syracuse”) for approximately $8.8 million in cash. The sale resulted in a loss of $40,000 for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.6 million of debt associated with the hotel property. See note 8.
On June 29, 2017, the Company sold the Crowne Plaza Ravinia in Atlanta, Georgia for approximately $88.7 million in cash. The sale resulted in a gain of $14.1 million for the year ended December 31, 2017 and is included in “gain (loss) on acquisition of PIM Highland JV and sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $78.7 million of debt associated with the hotel property. See note 8.


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We included the results of operations for these hotel properties through the date of disposition in net income (loss) as shown in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015, respectively.The following table includes condensed financial information from these hotel properties (in thousands):summarizes our carrying value and ownership interest in OpenKey:
 Year Ended December 31,
 2017 2016 2015
Total hotel revenue$12,447
 $77,808
 $100,973
Total hotel operating expenses(10,064) (51,750) (65,874)
Operating income (loss)2,383
 26,058
 35,099
Property taxes, insurance and other(616) (3,805) (5,278)
Depreciation and amortization(2,588) (11,891) (17,008)
Impairment charges
 (18,316) (2,817)
Gain (loss) on sale of hotel properties14,030
 31,713
 
Interest expense and amortization of loan costs(2,361) (10,456) (13,150)
Write-off of loan costs and exit fees(98) (5,076) 
Income (loss) before income taxes10,750
 8,227
 (3,154)
(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership(1,668) (1,153) 421
Income (loss) before income taxes attributable to the Company$9,082
 $7,074
 $(2,733)
 December 31, 2019 December 31, 2018
Carrying value of the investment in OpenKey (in thousands)$2,829
 $2,593
Ownership interest in OpenKey17.0% 16.3%
Impairment Charges and Insurance RecoveriesThe following table summarizes our equity in earnings (loss) in OpenKey (in thousands):
  Year Ended December 31,
Line Item 2019 2018 2017
Equity in earnings (loss) of unconsolidated entity $(411) $(592) $(481)

AQUA U.S. Fund
In August and SeptemberJune 2015, for consideration of certain marketable securities, we obtained a 52.4% ownership interest in the AQUA U.S. Fund. The AQUA U.S. Fund was managed by Ashford Investment Management, LLC (“AIM”), an indirect subsidiary of Ashford Inc. The AQUA U.S. Fund was consolidated by Ashford Inc. During the first quarter of 2017, twenty-fourwe liquidated our investment in the AQUA U.S. Fund subject to a 5% hold back of our hotel properties in Texas and Florida were impacted by$2.6 million, which was received during the effectssecond quarter of Hurricanes Harvey and Irma. The Company holds insurance policies that provide coverage for property damage and business interruption after meeting certain deductibles at all of its hotel properties. During 2017, the Company recognized impairment charges, net of anticipated insurance recoveries of $2.0 million. Additionally, the Company recognized remediation and other costs, net of anticipated insurance recoveries of $2.8 million, included primarily in other hotel operating expenses. As of December 31, 2017, the Company has recorded an insurance receivable of $267,000, net of deductibles of $4.8 million, included in “accounts receivable, net” on our consolidated balance sheet, related to the anticipated insurance recoveries. During2017. For the year ended December 31, 2017, the Company received proceeds of $612,000 for business interruption losses associated with lost profits, which has been recorded as “other” hotel revenueour equity in our consolidated statement of operations, in excess of the deductible of $366,000. The Company will not record an insurance recovery receivable for business interruption losses associated with lost profits until the amount for such recoveries is known and the amount is realizable.earnings was $52,000.
Additionally, in 2017 we recorded impairment charges of $8.2 million related to two hotel properties. The impairment charges occurred at the SpringHill Suites in Centreville, Virginia (“SpringHill Suites Centreville”) and the SpringHill Suites in Glen Allen, Virginia (“SpringHill Suites Glen Allen”) in the amounts of $4.7 million and $3.5 million, respectively. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques. The hotel properties are currently held for sale. See discussion below.
In 2016 we recorded impairment charges of $18.3 million related to three hotel properties. The impairment charges occurred at the SpringHill Suites Gaithersburg, Embassy Suites Syracuse and the Renaissance Portsmouth in the amounts of $5.0 million, $4.1 million and $9.2 million, respectively. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques. On October 1, 2016, the Company completed the sale of the SpringHill Suites Gaithersburg for approximately $13.2 million.
We recorded an impairment charge of $19.9 million related to two hotel properties in the second quarter of 2015. The impairment charges occurred at the Residence Inn in Las Vegas, Nevada and the SpringHill Suites in Gaithersburg, Maryland, in the amounts of $17.1 million and $2.8 million, respectively. The impairment charges were based on methodologies discussed in note 2, which are considered Level 3 valuation techniques. Our estimates of fair value reduced the respective carrying values of the Residence Inn in Las Vegas, Nevada and the SpringHill Suites in Gaithersburg, Maryland to $37.5 million and $15.3 million, respectively.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)




Assets Held For Sale8. Indebtedness, net
At December 31, 2017, the SpringHill Suites CentrevilleIndebtedness and the SpringHill Suites Glen Allen were classified as held for sale in the consolidated balance sheet based on methodologies discussed in note 2. Since the salecarrying values of the hotel properties does not represent a strategic shift that has (or will have) a major effect on our operations or financial results, their results of operation were not reported as discontinued operations in the consolidated financial statements. Depreciation and amortization were ceased as of the date the assets were deemed held for sale. For the year ended December 31, 2017, total revenue of $7.0 million, and net loss (excluding impairment charges discussed above) of $154,000, are included in our consolidated statements of operations. On February 20, 2018, we completed the sale of the SpringHill Suites Glen Allen for approximately $10.9 million. We expect to complete the sale of the SpringHill Suites Centreville on or about May 1, 2018.
At December 31, 2016, the Renaissance hotel in Portsmouth, Virginia (“Renaissance Portsmouth”) and the Embassy Suites in Syracuse, New York (“Embassy Suites Syracuse”) were classified as held for sale in the consolidated balance sheet based on methodologies discussed in note 2. Since the sale of the properties does not represent a strategic shift that has (or will have) a major effect on our operations or financial results, their results of operation were not reported as discontinued operations in the consolidated financial statements. Depreciation and amortization were ceased as of the date the assets were deemed held for sale. For the year ended December 31, 2016, total revenue of $18.7 million, and net income (excluding impairment charges discussed above) of $499,000, are included in our consolidated statements of operations. On February 1, 2017, we completed the sale of the Renaissance Portsmouth for approximately $9.2 million. On March 6, 2017, we completed the sale of the Embassy Suites Syracuse for approximately $8.8 million.
The major classes of assets and liabilities related to the assets held for sale included in the consolidated balance sheetscollateral were as follows at December 31, 2019 and 2018 (in thousands):
        December 31, 2019 December 31, 2018
Indebtedness Collateral
Maturity
Interest Rate Debt
Balance
 
Book Value
of Collateral
 
Debt
Balance
 
Book Value
of Collateral
Mortgage loan (2)
 1 hotel
July 2019
4.00% $
 $
 $5,232
 $7,752
Mortgage loan 1 hotel
August 2019
LIBOR (1) + 4.95%
 
 
 7,778
 9,446
Mortgage loan (3)
 8 hotels
February 2020
LIBOR (1) + 2.92%
 395,000
 331,686
 395,000
 344,744
Mortgage loan (4) (5) (6)
 19 hotels
April 2020
LIBOR (1) + 3.20%
 907,030
 1,077,936
 962,575
 1,168,504
Mortgage loan (7)
 1 hotel
May 2020
LIBOR (1) + 2.90%
 
 
 16,100
 29,966
Mortgage loan (8)
 1 hotel
June 2020
LIBOR (1) + 5.10%
 43,750
 60,191
 43,750
 62,995
Mortgage loan (4)
 7 hotels
June 2020
LIBOR (1) + 3.65%
 180,720
 131,102
 180,720
 136,325
Mortgage loan (4)
 7 hotels June 2020 
LIBOR (1) + 3.39%
 174,400
 131,420
 174,400
 137,611
Mortgage loan (4)
 5 hotels
June 2020
LIBOR (1) + 3.73%
 221,040
 175,875
 221,040
 176,279
Mortgage loan (4)
 5 hotels
June 2020
LIBOR (1) + 4.02%
 262,640
 105,702
 262,640
 116,304
Mortgage loan (4)
 5 hotels
June 2020
LIBOR (1) + 2.73%
 160,000
 185,854
 160,000
 189,026
Mortgage loan (4)
 5 hotels
June 2020
LIBOR (1) + 3.68%
 215,120
 198,059
 215,120
 193,120
Mortgage loan (9)
 1 hotel
July 2020
LIBOR (1) + 4.40%
 35,200
 38,383
 35,200
 36,177
Mortgage loan (10)
 8 hotels
July 2020
LIBOR (1) + 4.33%
 144,000
 168,054
 144,000
 173,678
Mortgage loan 1 hotel
November 2020
6.26% 91,542
 112,767
 93,433
 121,162
Mortgage loan (11)
 1 hotel November 2020 
LIBOR (1) + 2.55%
 25,000
 49,748
 25,000
 49,912
Mortgage loan (12) (13)
 17 hotels
November 2020
LIBOR (1) + 3.00%
 419,000
 263,998
 427,000
 282,462
Mortgage loan (14)
 2 hotels March 2021 
LIBOR (1) + 2.75%
 240,000
 235,705
 
 
Mortgage loan (15)
 1 hotel February 2022 
LIBOR (1) + 3.90%
 145,000
 189,982
 
 
Mortgage loan (14)
 2 hotels
June 2022
LIBOR (1) + 3.00%
 
 
 178,099
 245,984
Mortgage loan 1 hotel
November 2022
LIBOR (1) + 2.00%
 97,000
 186,400
 97,000
 194,886
Mortgage loan (7)
 1 hotel December 2022 
LIBOR (1) + 2.25%
 16,100
 27,498
 
 
Mortgage loan 1 hotel
May 2023
5.46% 51,843
 83,824
 52,843
 79,124
Mortgage loan 1 hotel
June 2023
LIBOR (1) + 2.45%
 73,450
 107,212
 73,450
 110,592
Mortgage loan 1 hotel
January 2024
5.49% 6,759
 8,112
 6,883
 8,694
Mortgage loan 1 hotel
January 2024
5.49% 9,865
 19,166
 10,045
 20,516
Mortgage loan 1 hotel
May 2024
4.99% 6,292
 6,896
 6,414
 7,153
Mortgage loan (2)
 1 hotel June 2024 
LIBOR (1) + 2.00%
 8,881
 7,416
 
 
Mortgage loan 3 hotels
August 2024
5.20% 64,207
 48,560
 65,242
 50,768
Mortgage loan 2 hotels August 2024 4.85% 11,845
 11,727
 12,048
 10,909
Mortgage loan 3 hotels August 2024 4.90% 23,683
 17,348
 24,086
 16,211
Mortgage loan 2 hotels February 2025 4.45% 19,438
 10,314
 19,835
 10,423
Mortgage loan 3 hotels February 2025 4.45% 50,279
 70,318
 51,304
 73,645
Mortgage loan 1 hotel March 2025 4.66% 24,919
 43,577
 
 
        $4,124,003

$4,104,830

$3,966,237
 $4,064,368
Premiums, net       655
 

 1,293
 
Deferred loan costs, net       (18,140)   (40,264)  
Indebtedness, net       $4,106,518
  
$3,927,266
  

(1)
LIBOR rates were 1.763% and 2.503% at December 31, 2019 and December 31, 2018, respectively.
(2)
On June 7, 2019, we amended this mortgage loan totaling $5.2 million. The amended mortgage loan totaling $8.9 million has a five year term, is interest only and bears interest at a rate of LIBOR + 2.00%.
(3)
This mortgage loan has 5 one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in February 2020.
(4)
This mortgage loan has 5 one-year extension options, subject to satisfaction of certain conditions.
(5)
This mortgage loan had a $26.8 million pay down of principal related to the sale of the Marriott San Antonio on August 2, 2019. See note 5.
(6)
This mortgage loan had a $28.8 million pay down of principal related to the sale of the Courtyard Savannah on August 14, 2019. See note 5.
(7)
On December 27, 2019, we amended this mortgage loan totaling $16.0 million. The amended mortgage totaling $16.1 million has a three-year initial term and 2 one-year extension options, subject to satisfaction of certain conditions. The amended mortgage loan is interest only and bears interest at a rate of LIBOR + 2.25%.
(8)
This mortgage loan has 3 one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in June 2019.
(9)
This mortgage loan has 3 one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period, which began in July 2019, resulted in a change in the interest rate in accordance with the original loan terms. The interest rate at December 31, 2018 was LIBOR + 4.15%.
 December 31, 2017 December 31, 2016
Assets   
Investments in hotel properties, net$17,732
 $17,232
Cash and cash equivalents78
 976
Restricted cash402
 392
Accounts receivable127
 305
Inventories1
 96
Deferred costs, net
 4
Prepaid expenses21
 309
Other assets31
 274
Due from third-party hotel managers31
 
Assets held for sale$18,423
 $19,588
    
Liabilities   
Indebtedness, net$13,221
 $35,679
Accounts payable and accrued expenses662
 1,323
Due to related party, net94
 45
Liabilities related to assets held for sale$13,977
 $37,047
6. Deferred Costs, net
Deferred costs, net consist of the following (in thousands):
 December 31,
 2017 2016
Deferred franchise fees$4,400
 $4,602
Accumulated amortization(1,623) (1,752)
 $2,777
 $2,850
Deferred costs related to assets held for sale
 4
Deferred costs, net$2,777
 $2,846

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



7. Intangible Assets, net and Intangible Liabilities, net
Intangible assets, net and intangible liabilities, net consisted of the following (in thousands):
 Intangible Assets, net Intangible Liability, net
 December 31, December 31,
 2017 2016 2017 2016
Cost$10,276
 $10,276
 $16,846
 $16,846
Accumulated amortization(333) (215) (1,007) (651)
 $9,943
 $10,061
 $15,839
 $16,195
The intangible assets and intangible liabilities noted above represent the above-market rate leases (liability) and below-market rate leases (asset) that were determined based on the comparison of rent due under the ground lease contracts assumed in the acquisitions to market rates for the remaining duration of the lease contracts and are amortized over their respective ground lease terms with expiration dates ranging from 2024 to 2114. For the years ended December 31, 2017, 2016 and 2015, net amortization related to intangibles was a reduction in lease expense of $238,000, $156,000 and $167,000, respectively.
In connection with the acquisition of the permanent exclusive docking easement for riverfront land located in front of the Hyatt Savannah hotel in Savannah, Georgia we recorded an intangible asset of approximately $797,000. This intangible asset is not subject to amortization and has a carrying value of $797,000 as of December 31, 2017.
Estimated future net amortization expense for intangible assets and intangible liabilities for each of the next five years is as follows (in thousands):
 Intangible Assets Intangible Liabilities
2018$118
 $356
2019118
 356
2020118
 356
2021118
 356
2022118
 356
Thereafter9,353
 14,059
Total$9,943
 $15,839

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


8. Indebtedness, net
Indebtedness of our continuing operations and the carrying values of related collateral were as follows at December 31, 2017 and 2016 (in thousands):
        December 31, 2017 December 31, 2016
Indebtedness Collateral
Maturity
Interest Rate Debt
Balance
 
Book Value
of Collateral
 
Debt
Balance
 
Book Value
of Collateral
Mortgage loan (2)
 1 hotel
June 2017
5.98% $
 $
 $15,729
 $25,714
Mortgage loan (3)
 17 hotels
December 2017
LIBOR (1) + 5.52%
 
 
 412,500
 302,417
Mortgage loan (4)
 2 hotels
January 2018
4.44% 
 
 105,047
 228,433
Mortgage loan (5)
 1 hotel
January 2018
4.38% 
 
 96,169
 195,768
Mortgage loan (6)
 8 hotels
January 2018
LIBOR (1) + 4.95%
 376,800
 346,609
 376,800
 355,707
Mortgage loan (7)
 5 hotels
February 2018
LIBOR (1) + 4.75%
 200,000
 208,338
 200,000
 205,111
Mortgage loan (8)
 1 hotel
April 2018
LIBOR (1) + 4.95%
 33,300
 39,298
 33,300
 40,738
Mortgage loan (9) (10) (11) (12)
 22 hotels
April 2018
LIBOR (1) + 4.39%
 971,654
 1,206,994
 1,070,560
 1,278,932
Mortgage loan (13)
 1 hotel
May 2018
LIBOR (1) + 5.10%
 25,100
 32,188
 25,100
 33,801
Mortgage loan (14)
 1 hotel
June 2018
LIBOR (1) + 5.10%
 43,750
 62,348
 43,750
 60,260
Mortgage loan (15)
 1 hotel
July 2018
LIBOR (1) + 4.15%
 35,200
 36,220
 35,200
 37,375
Mortgage loan (15)
 1 hotel
July 2018
LIBOR (1) + 5.10%
 40,500
 52,038
 40,500
 53,526
Mortgage loan (15)
 8 hotels
July 2018
LIBOR (1) + 4.09%
 144,000
 174,676
 144,000
 178,738
Mortgage loan (16)
 1 hotel
August 2018
LIBOR (1) + 4.95%
 12,000
 15,279
 12,000
 15,010
Mortgage loan (17) (18)
 4 hotels
August 2018
LIBOR (1) + 4.38%
 52,530
 61,358
 52,530
 66,725
Mortgage loan (17) (19) (20)
 6 hotels
August 2018
LIBOR (1) + 4.35%
 280,421
 162,938
 301,000
 185,804
Mortgage loan (21) (22)
 18 hotels
October 2018
LIBOR (1) + 4.55%
 450,000
 442,394
 450,000
 457,040
Mortgage loan 1 hotel
July 2019
4.00% 5,336
 8,056
 5,436
 8,326
Mortgage loan (3)
 17 hotels
November 2019
LIBOR (1) + 3.00%
 427,000
 290,973
 
 
Mortgage loan (2)
 1 hotel
May 2020
LIBOR (1) + 2.90%
 16,100
 25,654
 
 
Mortgage loan 1 hotel
November 2020
6.26% 95,207
 126,462
 96,873
 124,654
Mortgage loan (4)
 2 hotels
June 2022
LIBOR (1) + 3.00%
 164,700
 234,253
 
 
Mortgage loan (5)
 1 hotel
November 2022
LIBOR (1) + 2.00%
 97,000
 196,365
 
 
Mortgage loan 1 hotel
May 2023
5.46% 53,789
 81,854
 54,685
 84,854
Mortgage loan 1 hotel
January 2024
5.49% 7,000
 9,392
 7,111
 10,092
Mortgage loan 1 hotel
January 2024
5.49% 10,216
 17,533
 10,378
 15,229
Mortgage loan 1 hotel
May 2024
4.99% 6,530
 7,438
 6,641
 7,922
Mortgage loan 2 hotels
August 2024
4.85% 12,242
 11,135
 12,427
 8,910
Mortgage loan 3 hotels
August 2024
4.90% 24,471
 15,693
 24,836
 16,647
Mortgage loan 3 hotels
August 2024
5.20% 66,224
 51,393
 67,164
 51,659
Mortgage loan 2 hotels
February 2025
4.45% 20,214
 10,516
 20,575
 10,952
Mortgage loan 3 hotels
February 2025
4.45% 52,284
 72,112
 53,293
 69,036
        3,723,568

3,999,507

$3,773,604
 4,129,380
Premiums, net       1,570
 

 3,523
 
Deferred loan costs, net       (15,617)   (17,889)  
        $3,709,521
  
$3,759,238
  
Indebtedness related to assets held for sale (11)
 1 hotel April 2017 
LIBOR (1) + 4.39%
 
 

 16,080
 
Indebtedness related to assets held for sale (20)
 1 hotel August 2017 
LIBOR (1) + 4.35%
 
   19,599
  
Indebtedness related to assets held for sale (18)
 1 hotel August 2018 
LIBOR (1) + 4.38%
 5,992
   
  
Indebtedness related to assets held for sale (22)
 1 hotel October 2018 
LIBOR (1) + 4.55%
 7,229
   
  
Indebtedness, net       $3,696,300
  
$3,723,559
  


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)



(1)(10) 
LIBOR rates were 1.564% and 0.772%This mortgage loan has 3 one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period, which began in July 2019, resulted in a change in the interest rate in accordance with the original loan terms. The interest rate at December 31, 2017 and December 31, 2016, respectively.2018 was LIBOR + 4.09%.
(2)(11) 
This mortgage loan has 3 one-year extension options, subject to satisfaction of certain conditions.
(12)
This mortgage loan has 5 one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in November 2019.
(13)
This mortgage loan had an $8.0 million pay down of principal related to the sale of the parking lot adjacent to the Hilton St. Petersburg Bayfront on October 10, 2019. See note 5.
(14)
On May 24, 2017,March 5, 2019, we refinanced this mortgage loan totaling $15.7$178.1 million set to mature in June 2017 with a new $16.1 million mortgage loan with a three-year initial term and two one-year extension options subject to the satisfaction of certain conditions. Through May 2019, the new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.90%. Beginning on June 1, 2019, monthly principal payments based on a thirty-year amortization and a 6.00% interest rate are due.
(3)
On October 31, 2017, we refinanced this mortgage loan totaling $412.5 million set to mature in December 2017 with a new $427.0$240.0 million mortgage loan with a two-year initial term and five5 one-year extension options, subject to the satisfaction of certain conditions. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 3.00%2.75%.
(4)(15) 
On May 10, 2017, we refinanced this mortgage loan totaling $104.3 million set to mature in January 2018 with a new $181.0 million mortgage loan, of which our initial advance was $164.7 million. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due.
(5)
On October 30, 2017, we refinanced this mortgage loan totaling $94.7 million set to mature in January 2018 with a new $97.0 million mortgage loan with a five-year term. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.00%.
(6)
On January 17, 2018, we refinanced this mortgage loan with a new $395.0 million mortgage loan with a two-year initial term and five one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and bears interest at a rate of LIBOR + 2.92%.
(7)
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions and a LIBOR floor of 0.20%. The second one-year extension period began in February 2017.
(8)
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017.
(9)
This mortgage loan has four one-year extension options subject to satisfaction of certain conditions. The first one-year extension period began in April 2017.
(10)
This mortgage loan had a $20.2 million pay down of principal related to the Renaissance Portsmouth that was sold on February 1, 2017.
(11)
A portion of this mortgage loan at December 31, 2016 relates to the Renaissance Portsmouth that was sold on February 1, 2017. See note 5.
(12)
This mortgage loan had a $78.7 million pay down of principal related to the Crowne Plaza Ravinia that was sold on June 29, 2017. See note 5.
(13)
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in May 2017.
(14)
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in June 2017.
(15)
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in July 2017.
(16)
This mortgage loan has two2 one-year extension options, subject to satisfaction of certain conditions.
(17)
This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The second one-year extension period began in August 2017.
(18)
A portion of this mortgage loan at December 31, 2017 relates to the SpringHill Suites Centerville. See note 5.
(19)
This mortgage loan had a $20.6 million pay down of principal related to the Embassy Suites Syracuse that was sold on March 6, 2017. See note 5.
(20)
A portion of this mortgage loan at December 31, 2016 relates to the Embassy Suites Syracuse that was sold on March 6, 2017. See note 5.
(21)
This mortgage loan has four one-year extension options subject to satisfaction of certain conditions.
(22)
A portion of this mortgage loan at December 31, 2017 relates to the SpringHill Suites Glen Allen. See note 5.
On February 1, 2017, we repaid $20.2 million of principal on our mortgage loan partially secured by the Renaissance Portsmouth. This hotel property was sold on February 1, 2017. See note 5.
On March 6, 2017, we repaid $20.6 million of principal on our mortgage loan partially secured by the Embassy Suites Syracuse. This hotel property was sold on March 6, 2017. See note 5.
On May 10, 2017,January 17, 2018, we refinanced a $105.0our $376.8 million mortgage loan, secured by the Renaissance Nashville in Nashville, Tennessee and the Westin in Princeton, New Jersey.loan. The new mortgage loan totals $181.0 million, of which our initial advance was $164.7 million with future advances totaling $16.3 million as reimbursement for capital expenditures. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due.The stated maturity is June 2022, with no extension options.
On May 24, 2017, we refinanced a $15.7 million mortgage loan, secured by the Hotel Indigo Atlanta.totaled $395.0 million. The new mortgage loan totals $16.1 million. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.90% for the first two years with a 30-year amortization schedule based on a 6% interest rate starting in the third year. The stated maturity is May 2020, with two one-year extension options.
On June 29, 2017, we repaid $78.7 million of principal on our mortgage loan partially secured by the Crowne Plaza Ravinia. This hotel property was sold on June 29, 2017.
On October 30, 2017, we refinanced our $94.7 million mortgage loan, with an outstanding balance of $94.5 million, secured by the Hilton Boston Back Bay. The new mortgage loan totals $97.0 million. The mortgage loan is non-recourse interest only and provides for a floating interest rate of LIBOR + 2.00%. The stated maturity is November 2022, with no extension options.
On October 31, 2017, we refinanced a $412.5 million mortgage loan, secured by seventeen hotels. The new mortgage loan totals $427.0 million. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 3.00%. The stated

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maturity is November 2019, with five one-year extension options. The new mortgage loan is secured by the following seventeen hotels: the Courtyard Alpharetta, Courtyard Bloomington, Courtyard Crystal City, Courtyard Foothill Ranch, Embassy Suites Austin, Embassy Suites Dallas, Embassy Suites Houston, Embassy Suites Las Vegas, Embassy Suites Palm Beach, Hampton Inn Evansville, Hilton Garden Inn Jacksonville, Hilton Nassau Bay, Hilton St. Petersburg, Residence Inn Evansville, Residence Inn Falls Church, Residence Inn San Diego and Sheraton Indianapolis.
On September 30, 2016, we repaid $10.4 million of principal on our mortgage loan partially secured by the SpringHill Suites Gaithersburg. This hotel property was sold on October 1, 2016. See note 5.
On October 7, 2016, we refinanced four mortgage loans with existing outstanding balances totaling approximately $415.1 million with a new loan totaling $450.0 million. The mortgage loans were refinanced through one new mortgage loan withhas a two-year initial term and four one-year5 one year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and provides for a floatingan interest rate of LIBOR + 4.55%,2.92%. The new mortgage loan is secured by 8 hotels: Embassy Suites Portland, Embassy Suites Crystal City, Embassy Suites Orlando, Embassy Suites Santa Clara, Crowne Plaza Key West, Hilton Costa Mesa, Sheraton Minneapolis, and contains flexible release provisionsHistoric Inns of Annapolis.
On February 20, 2018, we repaid $7.6 million of principal on our mortgage loan partially secured by the SpringHill Suites Glen Allen. This hotel property was sold on February 20, 2018. See note 5.
On April 9, 2018, we refinanced our $971.7 million mortgage loan secured by 22 hotel properties. The new mortgage loan totaled $985.0 million, is interest only and provides for an interest rate of LIBOR + 3.20%. The stated maturity is April 2020 with five one-year extension options, subject to the potential salesatisfaction of assets.certain conditions. The new mortgage loan is secured by the same 22 hotel properties that include: the Courtyard Boston Downtown, Courtyard Denver, Courtyard Gaithersburg, Courtyard Savannah, Hampton Inn Parsippany, Hilton Parsippany, Hilton Tampa, Hilton Garden Inn Austin, Hilton Garden Inn BWI, Hilton Garden Inn Virginia Beach, Hyatt Windwatch Long Island, Hyatt Savannah, Marriott DFW Airport, Marriott Omaha, Marriott San Antonio, Marriott Sugarland, Renaissance Palm Springs, Ritz-Carlton Atlanta, Residence Inn Tampa, Churchill, Melrose and Silversmith.
On May 1, 2018, we repaid $6.6 million of principal on our mortgage loan partially secured by the SpringHill Suites Centreville. This hotel property was sold on May 1, 2018. See note 5.
On May 10, 2018, we repaid $22.5 million of principal on our mortgage loan partially secured by the Residence Inn Tampa. This hotel property was sold on May 10, 2018. See note 5.

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On June 13, 2018, we refinanced seven mortgage loans with existing outstanding balances totaling $1.068 billion. The new financing is comprised of 6 separate mortgage loans that total approximately $1.270 billion. Each has a two-year initial term with five one-year extension options, subject to the satisfaction of certain conditions. The original principal amounts of each mortgage loan and the hotel properties securing each mortgage loan are set forth in the following table:
Mortgage LoanPrincipal Amount (in thousands)Interest RateSecured Hotel Properties
A$180,720LIBOR + 3.65%Courtyard Columbus Tipton Lakes
Courtyard Scottsdale Old Town
Residence Inn Phoenix Airport
SpringHill Suites Manhattan Beach
SpringHill Suites Plymouth Meeting
Residence Inn Las Vegas Hughes Center
Residence Inn Newark
B$174,400LIBOR + 3.39%Courtyard Newark
SpringHill Suites BWI
Courtyard Oakland Airport
Courtyard Plano Legacy
Residence Inn Plano
TownePlace Suites Manhattan Beach
Courtyard Basking Ridge
C$221,040LIBOR + 3.73%Sheraton San Diego Mission Valley
Sheraton Bucks County
Hilton Ft. Worth
Hyatt Regency Coral Gables
Hilton Minneapolis
D$262,640LIBOR + 4.02%Hilton Santa Fe
Embassy Suites Dulles
Marriott Beverly Hills
One Ocean
Marriott Suites Dallas Market Center
E (1)
$216,320LIBOR + 4.36%Marriott Memphis East
Embassy Suites Philadelphia Airport
Sheraton Anchorage
Lakeway Resort & Spa
Marriott Fremont
F$215,120LIBOR + 3.68%W Atlanta Downtown
Embassy Suites Flagstaff
Embassy Suites Walnut Creek
Marriott Bridgewater
Marriott Durham Research Triangle Park
_____________________________
(1)
On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinancing. The net interest rate after the purchase of the Pool E loan is LIBOR + 2.73%.
On June 29, 2018, in connection with the acquisition of the Hilton Alexandria Old Town in Alexandria, Virginia, we completed the financing of a $73.5 million mortgage loan. This mortgage loan is interest only and provides for an interest rate of LIBOR + 2.45%. The stated maturity date of the mortgage loan is June 2023, with no extension options. The mortgage loan is secured by eighteenthe Hilton Alexandria Old Town.
On July 3, 2018, we purchased $56.3 million of mezzanine debt related to the Pool E loan that was issued in conjunction with the June 13, 2018 refinancing. The net interest rate after the purchase of the Pool E loan is LIBOR + 2.73%. The mezzanine debt receivable purchase and corresponding mezzanine debt eliminate in consolidation.
On September 27, 2018, we established a secured credit facility with a borrowing capacity of up to $100.0 million, which is secured by a pledge of 100% of the equity interests in the subsidiaries that own the hotel properties: Courtyard Basking Ridge, Courtyard Newark, Courtyard Oakland, Courtyard Plano, Courtyard Scottsdale, Residence Inn Newark, Residence Inn Phoenix, Residence Inn Plano, SpringHill Suites Glen Allen, SpringHill Suites Manhattan Beach, SpringHill Suites Plymouth Meeting, TownePlace Suites Manhattan Beach,property for which revolving credit facility funds would be used to acquire. The interest rate associated with the secured credit facility is either the Base Rate + 1.65% or LIBOR + 2.65% at the Company’s election. The Base Rate is the greater of (i) the prime rate set by Bank of America; (ii) federal funds rate + 0.5%; or (iii) LIBOR + 1.0%. The secured credit facility expired on September 26, 2019. No amounts were drawn on the secured credit facility at expiration.

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On November 8, 2018, in connection with the acquisition of the La Posada de Santa Fe, we completed the financing of a $25.0 million mortgage loan. This mortgage loan is interest only and provides for an interest rate of LIBOR + 2.55%. The stated maturity date of the mortgage loan is November 2020, with 3 one-year extension options. The mortgage loan is secured by the La Posada de Santa Fe.
On January 22, 2019, in connection with the acquisition of the Embassy Suites Flagstaff, Marriott Bridgewater, Marriott Raleigh Durham, MarriottNew York Manhattan Times Square, we completed the financing of a $145.0 million mortgage loan. This mortgage loan is interest only and provides for an interest rate of LIBOR + 3.90%. The stated maturity date of the mortgage loan is February 2022, with 2 one-year extensions. The mortgage loan is secured by the Embassy Suites Dallas, Sheraton Bucks County,New York Manhattan Times Square.
On February 26, 2019, in connection with the acquisition of the Hilton Santa Cruz/Scotts Valley, we assumed a $25.3 million non-recourse mortgage loan with a fair value of $24.9 million. This mortgage loan amortizes monthly and Marriott Fremont.provides for a fixed interest rate of 4.66%. The stated maturity date is March 2025. The mortgage loan is secured by the Hilton Santa Cruz/Scotts Valley. See note 4.
On March 5, 2019, we refinanced our $178.1 million mortgage loan, secured by the Renaissance Nashville and Westin Princeton. The new mortgage loan totals $240.0 million. The new mortgage loan is interest only and provides for an interest rate of LIBOR + 2.75%. The stated maturity is March 2021 with 5 one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is secured by the Renaissance Nashville and Westin Princeton.
On June 7, 2019, we amended the mortgage loan secured by the Fort Worth Ashton totaling $5.2 million. The amended mortgage loan totaling $8.9 million has a five-year term, is interest only and bears interest at a rate of LIBOR + 2.00%.
On August 2, 2019, we repaid $26.8 million of principal on our mortgage loan partially secured by the San Antonio Marriott. This hotel property was sold on August 2, 2019. See note 5.
On August 6, 2019, we repaid $7.7 million of principal on our mortgage loan secured by the Hilton Garden Inn Wisconsin Dells. This hotel property was sold on August 6, 2019. See note 5.
On August 14, 2019, we repaid $28.8 million of principal on our mortgage loan partially secured by the Courtyard Savannah. This hotel property was sold on August 14, 2019. See note 5.
On October 10, 2019, we repaid $8.0 million of principal on our mortgage loan partially secured by the Hilton St. Petersburg Bayfront in connection with selling the 1.65-acre parking lot adjacent to the hotel on October 10, 2019. See note 5.
On December 27, 2019, we amended the mortgage loan secured by the Indigo Atlanta totaling $16.0 million. The amended mortgage loan totaling $16.1 million has a three-year term, is interest only and bears interest at a rate of LIBOR + 2.25%. The stated maturity is December 2022 with 2 one-year extension options, subject to the satisfaction of certain conditions.
During the years ended December 31, 2017, 2016,2019, 2018, and 20152017 we recognized premium amortization of $2.0 million, $2.1 million and $1.4 million respectively. as presented in the table below (in thousands):
  Year Ended December 31,
Line Item 2019 2018 2017
Interest expense and amortization of premium and loan costs $232
 $277
 $1,953

The amortization of the net premium is computed using a method that approximates the effective interest method, which is included in interest“interest expense and amortization of premiums and loan costscosts” in the consolidated statements of operations.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of Ashford Trust or Ashford Trust OP, our operating partnership, and the liabilities of such subsidiaries do not constitute the obligations of Ashford Trust or Ashford Trust OP. As of December 31, 2017,2019, we were in compliance in all material respects with all covenants or other requirements set forth in our debt and related agreements as amended.

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Maturities and scheduled amortizations of indebtedness as of December 31, 20172019 for each of the five following years and thereafter are as follows (in thousands):
2020$3,279,403
20215,485
2022503,868
2023126,875
2024124,705
Thereafter83,667
Total$4,124,003
2018$2,671,185
2019438,723
2020113,703
20217,953
2022262,410
Thereafter229,594
Total$3,723,568

9. Notes Receivable, net and Other
On October 10, 2019, the Company sold the 1.65-acre parking lot adjacent to the Hilton St. Petersburg Bayfront in St. Petersburg, Florida. The consideration received is summarized in the table below (in thousands):
Cash$8,250
Note receivable - construction financing3,543
Note receivable - certificate of occupancy4,047
Other asset - future ownership rights of parking parcel4,100
Other asset - free use of parking easement prior to development commencement235
Other asset - reimbursement of parking fees while parking parcel is in development462
Total$20,637

Notes Receivable, net
Notes receivable, net are summarized in the table below (dollars in thousands):
 Interest Rate December 31, 2019
Construction Financing Note (1)
   
Face amount7.0% $4,000
Discount (2)
  (402)
   3,598
Certificate of Occupancy Note (3)
   
Face amount7.0% $5,250
Discount (4)
  (1,139)
   4,111
Note receivable, net  $7,709

(1)
The outstanding principal balance and all accrued and unpaid interest shall be due and payable on or before the earlier of (i) the buyer closing on third party institutional financing for the construction of improvements on the property, (ii) three years after the development commencement date, or (iii) July 9, 2024.
(2)
The discount represents the imputed interest during the interest free period. Interest begins accruing on July 9, 2021.
(3)
The outstanding principal balance and all accrued and unpaid interest shall be due and payable on or before July 9, 2025.
(4)
The discount represents the imputed interest during the interest free period. Interest begins accruing on July 9, 2023.
No cash interest income was recorded for the year ended December 31, 2019.
For the year ended December 31, 2019, we recognized discount amortization of $119,000, which is included in “other income (expense)” in the consolidated statement of operations.
As of December 31, 2019, there was no allowance related to the notes receivable as collectibility is considered probable.

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Other
Other consideration is summarized in the table below (dollars in thousands, except interest rates):
 Imputed Interest Rate December 31, 2019 
Future ownership rights of parking parcel7.0% $4,100
 
Imputed accrued interest  72
 
   4,172
(1) 
     
Free use of parking easement prior to development commencement7.0% $235
 
Accumulated amortization  (118) 
   117
(1) 
     
Reimbursement of parking fees while parking parcel is in development (2)
7.0% $462
 
Accumulated amortization  
 
   462
(1) 
Total  $4,751
 

(1)
Included in “other assets” in the consolidated balance sheets.
(2)
Amortization will commence when the parking parcel begins development.
For the year ended December 31, 2019, we recognized imputed accrued interest of $72,000 and amortization of $118,000 related to the free use of parking easement, which are included in “other income (expense)” in the consolidated statement of operations.
10. Derivative Instruments and Hedging
Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives currently include interest rate caps and interest rate floors. These derivatives are subject to master netting settlement arrangements. To mitigate the nonperformance risk, we routinely use a third party’s analysis of the creditworthiness of the counterparties, which supports our belief that the counterparties’ nonperformance risk is limited. All derivatives are recorded at fair value.
During the year ended December 31, 2017, weThe following table presents a summary of our interest rate derivatives entered into interest rate caps with notional amounts totaling $2.5 billion and strike rates ranging from 1.50% to 5.84%. These interest rate caps had effective dates from February 2017 to October 2017, maturity dates from February 2018 to November 2019, and a total cost of $871,000. We also entered into interest rate floors with notional amounts of $10.8 billion and strike rates ranging from 1.00% to 1.50%. These interest rate floors had effective dates from September

over each applicable period:
91
 Year Ended December 31, 
 2019 2018 2017 
Interest rate caps:      
Notional amount (in thousands)$1,051,050
(1) 
$3,614,618
(1) 
$2,539,700
(1) 
Strike rate low end of range1.50% 1.50% 1.50% 
Strike rate high end of range4.88% 5.71% 5.84% 
Effective date rangeJanuary 2019 - November 2019
 January 2018 - November 2018
 February 2017 - October 2017
 
Termination date rangeJune 2020 - February 2022
 January 2019 - November 2020
 February 2018 - November 2019
 
Total cost (in thousands)$1,112
 $3,143
 $871
 
       
Interest rate floors:      
Notional amount (in thousands)$6,000,000
(1) 
$12,025,000
(1) 
$10,750,000
(1) 
Strike rate low end of range1.63% 1.25% 1.00% 
Strike rate high end of range1.63% 2.00% 1.50% 
Effective date rangeJanuary 2019
 July 2018 - November 2018
 September 2017 - December 2017
 
Termination date rangeMarch 2020
  September 2019 - November 2021
 March 2019 - June 2019
 
Total cost (in thousands)$225
 $432
 $388
 
_______________
(1)
These instruments were not designated as cash flow hedges

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2017 to December 2017 and termination dates from March 2019 to June 2019 and a total cost of $388,000. These instruments were not designated as cash flow hedges.
During the year ended December 31, 2016, we entered into interest rate caps with notional amounts totaling $1.5 billion and strike rates ranging from 2.00% to 4.50%. These interest rate caps had effective dates from February 2016 to January 2017, maturity dates from February 2017 to October 2018, and a total cost of $199,000. We also entered into interest rate floors with notional amounts totaling $10.0 billion and strike rates ranging from (0.25)% to 1.0%. These interest rate floors had effective dates from April 2015 to July 2015, maturity dates from April 2020 to July 2020, and a total cost of $9.8 million. These instruments were not designated as cash flow hedges.
As of December 31, 2017, we held interest rate caps with notional amounts totaling $3.4 billion and strike rates ranging from 1.50% to 5.84%. These instruments had maturity dates ranging from January 2018 to November 2019. These instruments capas summarized in the interest rates on our mortgage loans with principal balances of $3.4 billion and maturity dates from January 2018 to November 2022. As of December 31, 2017, we held interest rate floors with notional amounts totaling $16.8 billion and strike rates ranging from (0.25)% to 1.50%. These instruments had termination dates ranging from March 2019 to July 2020.table below:
 December 31, 2019 December 31, 2018 
Interest rate caps:    
Notional amount (in thousands)$3,799,740
(1) 
$3,953,718
(1) 
Strike rate low end of range1.50 % 1.50 % 
Strike rate high end of range5.22 % 5.71 % 
Termination date rangeFebruary 2020 - February 2022
 January 2019 - November 2020
 
Aggregate principle balance on corresponding mortgage loans (in thousands)$3,666,331
 $3,521,872
 
     
Interest rate floors: (2)
    
Notional amount (in thousands)$12,025,000
(1 
) 
$28,775,000
(1 
) 
Strike rate low end of range(0.25)% (0.25)% 
Strike rate high end of range1.63 % 2.00 % 
Termination date rangeMarch 2020 - November 2021
 March 2019 - November 2021
 
_______________
(1)
These instruments were not designated as cash flow hedges
(2)
Cash collateral is posted by us as well as our counterparties. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral.
Credit Default Swap Derivatives—We use credit default swaps, tied to the CMBX index, to hedge financial and capital market risk. A credit default swap is a derivative contract that functions like an insurance policy against the credit risk of an entity or obligation. The seller of protection assumes the credit risk of the reference obligation from the buyer (us) of protection in exchange for annual premium payments. If a default or a loss, as defined in the credit default swap agreements, occurs on the underlying bonds, then the buyer of protection is protected against those losses. The only liability for us, the buyer, is the annual premium and any change in value of the underlying CMBX index (if the trade is terminated prior to maturity). For all CMBX trades completed to date, we were the buyer of protection. Credit default swaps are subject to master-netting settlement arrangements and credit support annexes. As of December 31, 2017,2019, we held credit default swaps with notional amounts totaling $212.5 million. These credit default swaps had effective dates from February 2015 to August 2017 and expected maturity dates from October 2023 to October 2026. Assuming the underlying bonds pay off at par over their remaining average life, our total exposure for these trades was approximately $7.7$3.2 million as of December 31, 2017.2019. Cash collateral is posted by us as well as our counterparties. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral. The change in market value of credit default swaps is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparties when the change in market value is over $250,000.
Futures Contracts—During the year ended December 31, 2016, we purchased an option on Eurodollar futures for a total cost of $250,000, and maturity date of June 2017. There were no purchases during the yearyears ended December 31, 2019, 2018 and 2017.
10.11. Fair Value Measurements
Fair Value Hierarchy—For disclosure purposes, financial instruments, whether measured at fair value on a recurring or nonrecurring basis or not measured at fair value, are classified in a hierarchy consisting of three levels based on the observability of valuation inputs in the market place as discussed below:
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.
Fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts/payments and the discounted expected variable cash payments/receipts. Fair values of interest rate caps, floors, flooridors, and corridors are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fell below the strike rates of the floors or rise above the strike rates of the caps. Variable interest rates used in the calculation of projected receipts and payments on the swaps, caps, and floors are based on an expectation

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of future interest rates derived from observable market interest rate curves (LIBOR forward curves) and volatilities (Level 2 inputs). We also incorporate credit valuation adjustments (Level 3 inputs) to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk.

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Fair values of credit default swaps are obtained from a third party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty.
Fair values of interest rate floors are calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor. These expected future cash flows are probability-weighted projections based on the contract terms, accounting for both the magnitude and likelihood of potential payments, which are both computed using the appropriate LIBOR forward curve and market implied volatilities as of the valuation date (Level 2 inputs). 
Fair value of options on futures contracts is determined based on the last reported settlement price as of the measurement date (Level 1 inputs). These exchange-traded options are centrally cleared, and a clearinghouse stands in between all trades to ensure that the obligations involved in the trades are satisfied.
Fair values of marketable securities and liabilities associated with marketable securities, including public equity securities, equity put and call options, and other investments, are based on their quoted market closing prices (Level 1 inputs).
When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at December 31, 2017,2019, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrenda downtrend from 1.56%1.76% to 2.18%1.47% for the remaining term of our derivatives. Credit spreads (Level 3 inputs) used in determining the fair values of hedge and non-hedge designated derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.


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Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):
Quoted Market Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 
Counter-party and Cash Collateral Netting (1)
 Total Quoted Market Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) 
Counter-party and Cash Collateral Netting (1)
 Total 
December 31, 2017:          
December 31, 2019:          
Assets                    
Derivative assets:                    
Interest rate derivatives – floors$
 $311
 $
 $32
 $343
(2) 
$
 $42
 $
 $257
 $299
(2) 
Interest rate derivatives – caps
 137
 
 
 137
(2) 

 47
 
 
 47
(2) 
Credit default swaps
 (469) 
 1,999
 1,530
(2) 

 (1,579) 
 2,924
 1,345
(2) 

 (21) 
 2,031
 2,010
 
 (1,490) 
 3,181
 1,691
 
Non-derivative assets:                    
Equity securities26,926
 
 
 
 26,926
(3) 
14,591
 
 
 
 14,591
(3) 
Total$26,926
 $(21) $
 $2,031
 $28,936
 $14,591
 $(1,490) $
 $3,181
 $16,282
 
Liabilities          
Derivative liabilities:          
Credit default swaps
 (1,092) 
 1,050
 (42)
(4) 
Net$14,591
 $(2,582) $
 $4,231
 $16,240
 
                    
December 31, 2016:          
December 31, 2018:          
Assets                    
Derivative assets:                    
Interest rate derivatives – floors$
 $2,358
 $
 $
 $2,358
(2) 
$
 $255
 $
 $208
 $463
(2) 
Interest rate derivatives – caps
 24
 
 
 24
(2) 

 601
 
 
 601
(2) 
Credit default swaps
 2,867
 
 (1,751) 1,116
(2) 

 520
 
 812
 1,332
(2) 
Options on futures contracts116
 
 
 
 116
(2) 
116
 5,249
 
 (1,751) 3,614
 
 1,376
 
 1,020
 2,396
 
Non-derivative assets:                    
Equity securities53,185
 
 
 
 53,185
(3) 
21,816
 
 
 
 21,816
(3) 
Total$53,301
 $5,249
 $
 $(1,751) $56,799
 $21,816
 $1,376
 $
 $1,020
 $24,212
 
Liabilities          
Derivative liabilities:          
Credit default swaps
 
 
 (50) (50)
(4) 
Net$21,816
 $1,376
 $
 $970
 $24,162
 
_________________________
(1) 
Represents net cash collateral posted between us and our counterparties.
(2) 
Reported net as “derivative assets, net” in theour consolidated balance sheets.
(3) 
Reported as “marketable securities” in theour consolidated balance sheets.
(4)
Reported net as “derivative liabilities, net” in our consolidated balance sheets.


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Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations
The following table summarizestables summarize the effect of fair value measured assets and liabilities on the consolidated statementstatements of operations (in thousands):
Gain or (Loss)
Recognized in Income
 Gain (Loss) Recognized in Income 
Year Ended December 31, Year Ended December 31, 
2017 2016 2015 2019 2018 2017 
Assets            
Derivative assets:            
Interest rate derivatives - floors$(2,435) $611
 $(7,603) $(438) $(488) $(2,435) 
Interest rate derivatives - caps(758) (535) (2,038) (1,666) (2,678) (758) 
Credit default swaps(4,201)
(4) 
(5,843)
(4) 
171
(4) 
(2,098)
(4) 
703
(4) 
(4,201)
(4) 
Options on futures contracts(116) (348) (391) 
 
 (116) 
Equity put options
 
 26
 
Equity call options
 
 (1,717) 
Non-derivative assets:            
Equity - American Depositary Receipt
 
 (150) 
Equity(3,678) 4,946
 1,072
 1,980
 (924) (3,678) 
U.S. Treasury
 
 314
 
Total(11,188) (1,169) (10,316) (2,222) (3,387) (11,188) 
Liabilities            
Derivative liabilities:            
Credit default swaps
 
 
 (1,092) 285
 
 
Short-equity put options
 
 1,002
 
Short-equity call options


 1,470
 
Non-derivative liabilities:      
Short-equity securities
 
 78
 
Total
 
 2,550
 
Net$(11,188) $(1,169) $(7,766) $(3,314) $(3,102) $(11,188) 
            
Total combined            
Interest rate derivatives - floors$(2,435) $611
 $(7,603) $362
 $(488) $(2,435) 
Interest rate derivatives - caps(758) (535) (2,038) (1,666) (2,678) (758) 
Credit default swaps(36) (2,574) 2,630
 (3,190) 988
 (36) 
Options on futures contracts427
 (36) (391) 
 
 427
 
Total derivatives(2,802)
(1) 
(2,534)
(1) 
(7,402)
(1) 
(4,494)
(1) 
(2,178)
(1) 
(2,802)
(1) 
Realized gain (loss) on credit default swaps(4,165)
(2) (4) 
(3,269)
(2) (4) 
(2,459)
(2) (4) 

(2) (4) 

(2) (4) 
(4,165)
(2) (4) 
Realized gain (loss) on options on futures contracts(543)
(2) 
(312) 
 (800)
(2) 

 (543)
(2) 
Unrealized gain (loss) on marketable securities(4,649)
(3) 
4,946
(3) 
127
(3) 
1,896
(3) 
(1,013)
(3) 
(4,649)
(3) 
Realized gain (loss) on marketable securities971
(2) 

(2) 
1,968
(2) 
84
(2) 
89
(2) 
971
(2) 
Net$(11,188) $(1,169) $(7,766) $(3,314) $(3,102) $(11,188) 
_________________________
(1) 
Reported as “unrealized gain (loss) on derivatives” in theour consolidated statements of operations.
(2) 
Included in “other income (expense)” in theour consolidated statements of operations.
(3) 
Reported as “unrealized gain (loss) on marketable securities” in theour consolidated statements of operations.
(4) 
Excludes costs of $1,036, $873$1,077, $1,045 and $486$1,036 in 2017, 20162019, 2018 and 2015,2017, respectively, included in “other income (expense)” associated with credit default swaps.


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11.12. Summary of Fair Value of Financial Instruments
Determining estimated fair values of our financial instruments such as notes receivable and indebtedness requires considerable judgment to interpret market data. Market assumptions and/or estimation methodologies used may have a material effect on estimated fair value amounts. Accordingly, estimates presented are not necessarily indicative of amounts at which these instruments could be purchased, sold, or settled. Carrying amounts and estimated fair values of financial instruments, for periods indicated, were as follows (in thousands):
 December 31, 2019 December 31, 2018
 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value
Financial assets and liabilities measured at fair value:       
Marketable securities$14,591
 $14,591
 $21,816
 $21,816
Derivative assets, net1,691
 1,691
 2,396
 2,396
Derivative liabilities, net42
 42
 50
 50
        
Financial assets not measured at fair value:       
Cash and cash equivalents$262,636
 $262,636
 $319,210
 $319,210
Restricted cash135,571
 135,571
 120,602
 120,602
Accounts receivable, net39,638
 39,638
 37,060
 37,060
Notes receivable, net7,709
 $7,323 to $8,095
 
 
Due from related parties, net3,019
 3,019
 
 
Due from third-party hotel managers17,368
 17,368
 21,760
 21,760
        
Financial liabilities not measured at fair value:       
Indebtedness$4,124,658
 $3,881,453 to $4,290,027
 $3,967,530
 $3,773,343 to $4,170,538
Accounts payable and accrued expenses134,341
 134,341
 136,757
 136,757
Dividends and distributions payable20,849
 20,849
 26,794
 26,794
Due to Ashford Inc., net6,570
 6,570
 23,034
 23,034
Due to related parties, net
 
 1,477
 1,477
Due to third-party hotel managers2,509
 2,509
 2,529
 2,529

 December 31, 2017 December 31, 2016
 
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
Financial assets and liabilities measured at fair value:       
Derivative assets, net$2,010
 $2,010
 $3,614
 $3,614
Marketable securities26,926
 26,926
 53,185
 53,185
        
Financial assets not measured at fair value:       
Cash and cash equivalents (1)
$354,883
 $354,883
 $348,067
 $348,067
Restricted cash (1)
117,189
 117,189
 144,406
 144,406
Accounts receivable, net (1)
44,384
 44,384
 44,934
 44,934
Due from third-party hotel managers (1)
17,418
 17,418
 13,348
 13,348
        
Financial liabilities not measured at fair value:       
Indebtedness (1)
$3,725,138
 $3,559,993 to $3,934,727
 $3,777,127
 $3,600,691 to $3,979,713
Accounts payable and accrued expenses (1)
133,063
 133,063
 128,309
 128,309
Dividends and distributions payable25,045
 25,045
 24,765
 24,765
Due to Ashford Inc., net15,146
 15,146
 15,716
 15,716
Due to Ashford Prime OP, net
 
 488
 488
Due to related party, net (1)
1,161
 1,161
 1,046
 1,046
Due to third-party hotel managers2,431
 2,431
 2,714
 2,714
_________________________
(1) Includes balances associated with assets held for sale and liabilities associated with assets held for sale as of December 31, 2017 and/or 2016. See note 5.
Cash, cash equivalents, and restricted cash. These financial assets bear interest at market rates and have original maturities of less than 90 days. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique.
Accounts receivable, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Prime OP, due toto/from related party,parties, net, due to Ashford Inc., net and due to/from third-party hotel managers. The carrying values of these financial instruments approximate their fair values due to their short-term nature. This is considered a Level 1 valuation technique.
Notes receivable, net. The carrying amount of notes receivable, net approximates its fair value. We estimate the fair value of the notes receivable, net to be approximately 95% to 105% of the carrying value of $7.7 million as of December 31, 2019.
Marketable securities. Marketable securities consist of U.S. treasury bills, publicly traded equity securities, and put and call options on certain publicly traded equity securities. The fair value of these investments is based on quoted market closing prices at the balance sheet date. See notes 2 and 1011 for a complete description of the methodology and assumptions utilized in determining the fair values.
Indebtedness. Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments. Cash flows are determined using a forward interest rate yield curve. Current replacement rates are determined by using the U.S. Treasury yield curve or the index to which these financial instruments are tied and adjusted for credit spreads. Credit spreads take into consideration general market conditions, maturity, and collateral. We estimated the fair value of total indebtedness to be approximately 95.6%94.1% to 105.6%104.0% of the carrying value of $3.7$4.1 billion at December 31, 20172019 and approximately 95.3%95.1% to 105.4%105.1% of the carrying value of $3.8$4.0 billion at December 31, 2016.2018. This is considered a Level 2 valuation technique.
Derivative assets, net and derivative liabilities, net. Fair value of interest rate derivativescaps 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

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our counterparties. Fair values of credit default swap derivatives are obtained from a third party who publishes the CMBX index composition and price data. Fair values of interest rate floors are calculated using a third-party discounted cash flow model

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based on future cash flows that are expected to be received over the remaining life of the floor. Fair values of options on futures contracts are valued at their last reported settlement price as of the measurement date. See notes 2, 910, and 1011 for a complete description of the methodology and assumptions utilized in determining fair values.
12.13. Income (Loss) Per Share
Basic income (loss) per common share is calculated using the two-class method by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per common share is calculated using the two-class method, or treasury stock method if more dilutive, and reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.
The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):
 Year Ended December 31,
 2019 2018 2017
Income (loss) allocated to common stockholders – basic and diluted:     
Income (loss) attributable to the Company$(113,635) $(126,966) $(67,008)
Less: Dividends on preferred stock(42,577) (42,577) (44,761)
Less: Extinguishment of issuance costs upon redemption of preferred stock
 
 (10,799)
Less: Dividends on common stock(29,840) (47,057) (45,752)
Less: Dividends on unvested performance stock units(475) (50) (393)
Less: Dividends on unvested restricted shares(801) (844) (959)
Undistributed income (loss) allocated to common stockholders(187,328) (217,494) (169,672)
Add back: Dividends on common stock29,840
 47,057
 45,752
Distributed and undistributed income (loss) allocated to common stockholders - basic and diluted$(157,488) $(170,437) $(123,920)
      
Weighted average common shares outstanding:     
Weighted average common shares outstanding - basic and diluted99,837
 97,282
 95,207
      
Basic income (loss) per share:     
Net income (loss) allocated to common stockholders per share$(1.58) $(1.75) $(1.30)
      
Diluted income (loss) per share:     
Net income (loss) allocated to common stockholders per share$(1.58) $(1.75) $(1.30)


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Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect adjustments for the following items (in thousands):
 Year Ended December 31,
 2019 2018 2017
Income (loss) allocated to common stockholders is not adjusted for:     
Income (loss) allocated to unvested restricted shares$801
 $844
 $959
Income (loss) allocated to unvested performance stock units475
 50
 393
Income (loss) attributable to noncontrolling interest in operating partnership(28,932) (29,313) (21,642)
Total$(27,656) $(28,419) $(20,290)
      
Weighted average diluted shares are not adjusted for:     
Effect of unvested restricted shares68
 111
 376
Effect of unvested performance stock units69
 251
 258
Effect of assumed conversion of operating partnership units19,082
 17,599
 17,342
Total19,219
 17,961
 17,976

14. Redeemable Noncontrolling Interests in Operating Partnership
Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unit holders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and the units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested. Each common unit may be redeemed for either cash or, at our sole discretion, up to 1 share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.
LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, have vesting periods ranging from three years to five years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into 1 common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of the operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of the operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for the operating partnership.
The compensation committee of the board of directors of the Company may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Ashford Trust OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period. The number of Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of specified absolute and relative total stockholder returns based on the formulas determined by the Company’s Compensation Committee on the grant date. As of December 31, 2019, there were approximately 1.9 million Performance-based LTIP units, representing 200% of the target number granted, outstanding. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature, and the Performance LTIP units were granted to non-employees. During the year ended December 31, 2018, approximately 739,000 performance-based LTIP units were canceled due to the market condition criteria not being met. Following the adoption of ASU 2018-07 in the third quarter of 2018, the corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition as opposed to being accounted for at fair value based on the market price of the shares at each quarterly measurement date.
As of December 31, 2019, we have issued a total of 11.9 million LTIP and Performance LTIP units, net of Performance LTIP cancellations. All LTIP and Performance LTIP units other than approximately 769,000 units (NaN of which are Performance LTIP units) have reached full economic parity with, and are convertible into, common units upon vesting.

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We recorded compensation expense for Performance LTIP units and LTIP units as presented in the table below (in thousands):
    Year Ended December 31,
Type Line Item 2019 2018 2017
Performance LTIP units Advisory services fee $3,594
 $6,797
 $1,785
LTIP units Advisory services fee 3,264
 3,508
 2,800
LTIP units - independent directors Corporate, general and administrative 446
 536
 475
    $7,304
 $10,841
 $5,060

The unamortized cost of the unvested Performance LTIP units, which was $2.4 million at December 31, 2019, will be expensed over a period of 2.0 years with a weighted average period of 0.7 years. The unamortized cost of the unvested LTIP units, which was $2.7 million at December 31, 2019, will be expensed over a period of 2.2 years with a weighted average period of 1.3 years.
On February 26, 2019, we issued 1.5 million common units in our operating partnership in conjunction with the acquisition of the Hilton Santa Cruz/Scotts Valley. See note 4.
During the years ended December 31, 2019 and 2018, there were 0 common units redeemed.
During the year ended December 31, 2017, 21,000 common units with an aggregate fair value of $161,000 were redeemed by the holder and, at our election, we issued shares of our common stock to satisfy the redemption price.
The following table presents the redeemable noncontrolling interest in Ashford Trust and the corresponding approximate ownership percentage:
 December 31, 2019 December 31, 2018
Redeemable noncontrolling interests (in thousands)$69,870
 $80,743
Cumulative adjustments to redeemable noncontrolling interests (1) (in thousands)
155,536
 146,091
Ownership percentage of operating partnership15.92% 14.64%

(1)
Reflects the excess of the redemption value over the accumulated historical costs.
We allocated net income (loss) to the redeemable noncontrolling interests and declared aggregate cash distributions to holders of common units and holders of LTIP units, as presented in the table below (in thousands):
 Year Ended December 31,
 2019 2018 2017
Allocated net (income) loss to the redeemable noncontrolling interests$28,932
 $29,313
 $21,642
Aggregate cash distributions to holders of common units and LTIP units6,572
 8,789
 10,007
A summary of the activity of the units in our operating partnership is as follow (in thousands):
 Year Ended December 31,
 2019 2018 2017
Outstanding at beginning of year19,921
 19,602
 19,443
LTIP units issued338
 476
 701
Performance LTIP units issued215
 582
 1,179
Performance LTIP units canceled
 (739) 
Common units issued for hotel acquisition1,468
 
 
Common units converted to common stock
 
 (21)
Conversion factor adjustment
 
 (1,700)
Outstanding at end of year21,942
 19,921
 19,602
Common units convertible/redeemable at end of year18,571
 16,645
 16,320


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15. Equity
Common Stock and Preferred Stock Repurchases—On December 5, 2017, the board of directors reapproved a stock repurchase program (the “Repurchase Program”) pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share and preferred stock having an aggregate value of up to $200 million. The board of directors’ authorization replaced any previous repurchase authorizations. For the years ended December 31, 2019, 2018 and 2017, 0 shares of our common stock or preferred stock have been repurchased under the Repurchase Program.
In addition, we acquired 210,700, 248,562 and 203,299 shares of our common stock in 2019, 2018 and 2017, respectively, to satisfy employees’ statutory minimum U.S. federal income tax obligations in connection with vesting of equity grants issued under our stock-based compensation plan.
At-the-Market Equity Offering Program—On December 11, 2017, Company established an “at-the-market” equity offering program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $100 million. The issuance activity is summarized below (in thousands):
 Year Ended December 31,
 2019 2018 2017
Common shares issued
 2,434
 
Gross proceed received$
 $15,522
 $
Commissions and other expenses
 194
 
Net proceeds$
 $15,328
 $

Preferred Stock—In accordance with Ashford Trust’s charter, we are authorized to issue 50 million shares of preferred stock, which currently includes Series D Cumulative Preferred Stock, Series F Cumulative Preferred Stock, Series G Cumulative Preferred Stock, Series H Cumulative Preferred Stock and Series I Cumulative Preferred Stock.
8.55% Series A Cumulative Preferred Stock. On September 18, 2017, the Company redeemed its Series A Cumulative Preferred Stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4631 per share, for a total redemption price of $25.4631 per share.
8.45% Series D Cumulative Preferred Stock. At December 31, 2019 and 2018, there were 2.4 million shares of Series D Cumulative Preferred Stock outstanding. The Series D Cumulative Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock, Series F Cumulative Preferred Stock (noted below), Series G Cumulative Preferred Stock (noted below), Series H Cumulative Preferred Stock (noted below) and Series I Cumulative Preferred Stock (noted below) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series D Cumulative Preferred Stock has no maturity date, and we are not required to redeem the shares at any time. Series D Cumulative Preferred Stock is redeemable at our option for cash, in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series D Cumulative Preferred Stock quarterly dividends are set at the rate of 8.45% per annum of the $25.00 liquidation preference (equivalent to an annual dividend rate of $2.1124 per share). The dividend rate increases to 9.45% per annum if these shares are no longer traded on a major stock exchange. In general, Series D Cumulative Preferred Stock holders have no voting rights. On September 18, 2017, the Company redeemed approximately 1.6 million shares of its Series D Cumulative Preferred Stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4577 per share, for a total redemption price of $25.4577 per share. On October 4, 2017, the Company redeemed 379,036 shares of Series D cumulative preferred shares at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.5516 per share, for a total redemption price of $25.5516 per share. On December 8, 2017, the Company redeemed approximately 5.1 million shares of its Series D Cumulative Preferred Stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.3990 per share, for a total redemption price of $25.3990 per share.
7.375% Series F Cumulative Preferred Stock. At December 31, 2019 and 2018 there were 4.8 million shares of 7.375% Series F Cumulative Preferred Stock outstanding. The Series F Cumulative Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock, Series D Cumulative Preferred Stock, Series G Cumulative Preferred Stock (noted below), Series H Cumulative Preferred Stock

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(noted below) and Series I Cumulative Preferred Stock (noted below) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series F Cumulative Preferred Stock has no maturity date, and we are not required to redeem the shares at any time. Series F Cumulative Preferred Stock is redeemable at our option for cash (on or after July 15, 2021), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series F Cumulative Preferred Stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series F Cumulative Preferred Stock is convertible into a maximum 9.68992 shares of our common stock. The actual number is based on a formula as defined in the Series F Cumulative Preferred Stock agreement (unless the Company exercises its right to redeem the Series F cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series F Cumulative Preferred Stock to common stock have not been met as of period end. Therefore, Series F Cumulative Preferred Stock will not impact our earnings per share calculations. Series F Cumulative Preferred Stock quarterly dividends are set at the rate of 7.375% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $1.8436 per share). In general, Series F Cumulative Preferred Stock holders have no voting rights.
7.375% Series G Cumulative Preferred Stock. At December 31, 2019 and 2018 there were 6.2 million shares of 7.375% Series G Cumulative Preferred Stock outstanding. The 6.2 million of Series G Cumulative Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock, Series D Cumulative Preferred Stock, Series F Cumulative Preferred Stock, Series H Cumulative Preferred Stock (noted below) and Series I Cumulative Preferred Stock (noted below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series G Cumulative Preferred Stock has no maturity date, and we are not required to redeem the shares at any time. Series G Cumulative Preferred Stock is redeemable at our option for cash (on or after October 18, 2021), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series G Cumulative Preferred Stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series G Cumulative Preferred Stock is convertible into a maximum 8.33333 shares of our common stock. The actual number is based on a formula as defined in the Series G Cumulative Preferred Stock agreement (unless the Company exercises its right to redeem the Series G cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series G Cumulative Preferred Stock to common stock have not been met as of period end. Therefore, Series G Cumulative Preferred Stock will not impact our earnings per share calculations. Series G Cumulative Preferred Stock quarterly dividends are set at the rate of 7.375% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $1.8436 per share). In general, Series G Cumulative Preferred Stock holders have no voting rights.
7.50% Series H Cumulative Preferred Stock. At December 31, 2019 and 2018 there were 3.8 million shares of 7.50% Series H Cumulative Preferred Stock outstanding. The Series H Cumulative Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock, Series D Cumulative Preferred Stock, Series F Cumulative Preferred Stock, Series G Cumulative Preferred Stock and Series I Cumulative Preferred Stock (discussed below) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series H Cumulative Preferred Stock has no maturity date, and we are not required to redeem the shares at any time. Series H Cumulative Preferred Stock is redeemable at our option for cash (on or after August 25, 2022), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series H Cumulative Preferred Stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series H Cumulative Preferred Stock is convertible into a maximum 8.25083 shares of our common stock. The actual number is based on a formula as defined in the Series H Cumulative Preferred Stock agreement (unless the Company exercises its right to redeem the Series H cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series H Cumulative Preferred Stock to common stock have not been met as of period end. Therefore, Series H Cumulative Preferred Stock will not impact our earnings per share. Series H Cumulative Preferred Stock quarterly dividends are set at the rate of 7.50% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $1.8750 per share). In general, Series H Cumulative Preferred Stock holders have no voting rights.
7.50% Series I Cumulative Preferred Stock. At December 31, 2019 and 2018 there were 5.4 million shares of 7.50% Series I Cumulative Preferred Stock outstanding. The Series I Cumulative Preferred Stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series D Cumulative Preferred Stock, Series F Cumulative Preferred Stock, Series G Cumulative Preferred Stock and Series H Cumulative Preferred Stock) and with any future parity securities and junior to future senior securities and to all of the Company’s

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existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series I Cumulative Preferred Stock has no maturity date, and we are not required to redeem the shares at any time. Series I Cumulative Preferred Stock is redeemable at our option for cash (on or after November 17, 2022), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series I Cumulative Preferred Stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series I Cumulative Preferred Stock is convertible into a maximum 8.06452 shares of our common stock. The actual number is based on a formula as defined in the Series I Cumulative Preferred Stock agreement (unless the Company exercises its right to redeem the Series I cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series I Cumulative Preferred Stock to common stock have not been met as of period end. Therefore, Series I Cumulative Preferred Stock will not impact our earnings per share. Series I Cumulative Preferred Stock quarterly dividends are set at the rate of 7.50% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $1.8750 per share). In general, Series I Cumulative Preferred Stock holders have no voting rights.
Dividends—A summary of dividends declared is as follows (in thousands):
 Year Ended December 31,
 2019 2018 2017
Common stock$31,116
 $47,951
 $47,104
Preferred stocks:     
Series A Cumulative Preferred Stock
 
 2,539
Series D Cumulative Preferred Stock5,048
 5,047
 18,211
Series F Cumulative Preferred Stock8,849
 8,849
 8,849
Series G Cumulative Preferred Stock11,430
 11,431
 11,430
Series H Cumulative Preferred Stock7,125
 7,125
 2,494
Series I Cumulative Preferred Stock10,125
 10,125
 1,238
Total dividends declared$73,693
 $90,528
 $91,865

Noncontrolling Interests in Consolidated Entities—Our noncontrolling entity partner had an ownership interest of 15% in 2 hotel properties. The below table summarized the total carrying value (in thousands), which is reported in equity in the consolidated balance sheets:
 December 31,
 2019 2018
Carrying value of noncontrolling interests$504
 $616
The below table summarizes the (income) loss allocated to noncontrolling interests in consolidating entities (in thousands):
  Year Ended December 31,
Line Item 2019 2018 2017
(Income) loss allocated to noncontrolling interests in consolidated entities $112
 $30
 $110

16. Stock-Based Compensation
Under the Amended and Restated 2011 Stock Incentive Plan approved by stockholders, we are authorized to grant 17.3 million restricted stock units and performance stock units of our common stock as incentive stock awards. At December 31, 2019, 1.9 million shares were available for future issuance under the Amended and Restated 2011 Stock Incentive Plan.
Restricted Stock Units—We incur stock-based compensation expense in connection with restricted stock units awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance.
At December 31, 2019, the unamortized cost of the unvested restricted stock units was $7.9 million which will be amortized over a period of 2.2 years with a weighted average period of 1.6 years.

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The following table summarizes the stock-based compensation expense (in thousands):
  Year Ended December 31,
Line Item 2019 2018 2017
Advisory services fee $6,268
 $6,698
 $4,774
Management fees 768
 1,159
 645
Corporate, general and administrative - Premier 350
 
 
Corporate, general and administrative - independent directors 90
 
 90
  $7,476
 $7,857
 $5,509

During the year ended December 31, 2018, approximately $1.5 million of the compensation expense was related to the accelerated vesting of equity awards granted to one of our executive officers upon his death, in accordance with the terms of the awards.
A summary of our restricted stock unit activity is as follows (shares in thousands):
 Year Ended December 31,
 2019 2018 2017
 Units Weighted Average Price at Grant Units Weighted Average Price at Grant Units Weighted Average Price at Grant
Outstanding at beginning of year1,713
 $6.56
 2,085
 $7.03
 1,627
 $8.30
Restricted shares granted1,340
 5.36
 907
 6.64
 1,272
 6.46
Restricted shares vested(863) 6.50
 (1,230) 7.41
 (759) 8.82
Restricted shares forfeited(62) 5.82
 (49) 6.41
 (55) 6.73
Outstanding at end of year2,128
 $5.86
 1,713
 $6.56
 2,085
 $7.03

Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of PSUs, which have a cliff vesting period of three years, to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period. The number of PSUs actually earned may range from 0% to 200% of target based on achievement of specified absolute and relative total stockholder returns based on the formulas determined by the Company’s Compensation Committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature, and the PSUs were granted to non-employees. During the year ended December 31, 2018, 248,000 PSUs were canceled due to the market condition criteria not being met. Upon the adoption of ASU 2018-07, in the third quarter of 2018, the corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition as opposed to being accounted for at fair value based on the market price of the shares at each quarterly measurement date.
The following table summarizes the compensation expense (in thousands):
  Year Ended December 31,
Line Item 2019 2018 2017
Advisory services fee $4,937
 $8,241
 $1,718

During the year ended December 31, 2018, approximately $3.0 million of the compensation expense was related to the accelerated vesting of PSUs granted to one of our executive officers upon his death, in accordance with the terms of the awards.
The unamortized cost of PSUs, which was $6.7 million at December 31, 2019, will be expensed over a period of approximately 2.0 years with a weighted average period of 1.4 years.

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A summary of our PSU activity is as follows (shares in thousands):
 Year Ended December 31,
 2019 2018 2017
 Units Weighted Average Price at Grant Units Weighted Average Price at Grant Units Weighted Average Price at Grant
Outstanding at beginning of year775
 $6.31
 820
 $6.07
 336
 $6.38
PSUs granted809
 5.36
 526
 6.64
 484
 5.85
PSUs vested
 
 (323) 6.19
 
 
PSUs canceled
 
 (248) 6.38
 
 
Outstanding at end of year1,584
 $5.82
 775
 $6.31
 820
 $6.07

17. Related Party Transactions
Remington Lodging (prior to Ashford Inc. acquisitions)
Remington Lodging was a property and project management company, wholly owned by our chairman, Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. who is our chairman emeritus. We had master property and project management agreements and property and project management mutual exclusivity agreements with Remington Lodging.
On August 8, 2018, Ashford Inc. completed the acquisition of Remington Lodging’s project management business, Premier. As a result of Ashford Inc.’s acquisition, the project management services are no longer provided by Remington Lodging and are now provided by Premier, a subsidiary of Ashford Inc. under the respective project management agreement with each customer, including Ashford Trust and Braemar.
On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. As a result of the acquisition, hotel management services that were previously provided by Remington Lodging are now be provided by Remington Hotels, a subsidiary of Ashford Inc. under the respective hotel management agreement with each customer, including Ashford Trust and Braemar under the Remington Hotels name.
Prior to August 8, 2018, we paid Remington Lodging: (a) monthly hotel management fees equal to the greater of $14,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria are met; (b) project management fees of up to 4% of project costs; (c) market service fees including purchasing, design and construction management not to exceed 16.5% of project budget cumulatively, including project management fees; and (d) other general and administrative expense reimbursements primarily related to accounting services. This related party allocates such charges to us based on various methodologies, including headcount and actual amounts incurred.
Between August 8, 2018 and November 5, 2019, we paid Remington Lodging monthly hotel management fees equal to the greater of $14,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.
The following table presents the fees related to our property and project management agreements with Remington Lodging prior to its transactions with Ashford Inc. (in thousands):
 Year Ended December 31,
 2019 2018 2017
Hotel management fees, including incentive hotel management fees$27,205
 $30,890
 $30,629
Market service and project management fees
 11,148
 21,315
Corporate general and administrative6,014
 5,872
 5,652
Total$33,219
 $47,910
 $57,596

As of December 31, 2018, the due to related parties, net of $1.5 million represented accrued base and incentive management fees.

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Ashford Inc.
Advisory Agreement
Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman, Mr. Monty J. Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc.
Under our advisory agreement, we pay advisory fees to Ashford LLC. We are required to pay Ashford LLC a monthly base fee that is a percentage of our total market capitalization on a declining sliding scale plus the Net Asset Fee Adjustment, as defined in the advisory agreement, subject to a minimum monthly base fee, as payment for managing our day-to-day operations in accordance with our investment guidelines. Total market capitalization includes the aggregate principal amount of our consolidated indebtedness (including our proportionate share of debt of any entity that is not consolidated but excluding our joint venture partners’ proportionate share of consolidated debt). The range of base fees on the scale is between 0.70% and 0.50% per annum for total market capitalization that ranges from less than $6.0 billion to greater than $10.0 billion. At December 31, 2019, the monthly base fee was 0.70% based on our current market capitalization. We are also required to pay Ashford LLC an incentive fee that is measured annually (or stub period if the advisory agreement is terminated at other than year-end). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we pay Ashford LLC an incentive fee over the following three years, subject to the FCCR Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the advisory agreement. We also record equity-based compensation expense for equity grants of common stock and LTIP units awarded to our officers and employees of Ashford LLC in connection with providing advisory services equal to the fair value of the award in proportion to the requisite service period satisfied during the period.
The following table summarizes the advisory services fees incurred (in thousands):
 Year Ended December 31,
 2019 2018 2017
Advisory services fee     
Base advisory fee$36,269
 $35,526
 $34,650
Reimbursable expenses (1)
9,300
 8,351
 7,472
Equity-based compensation (2)
18,063
 25,245
 11,077
Total advisory services fee$63,632
 $69,122
 $53,199
________
(1)
Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.
(2)
Equity-based compensation is associated with equity grants of Ashford Trust’s common stock, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.
Due from related parties, net includes a $1.2 million security deposit paid to Remington Hotel Corporation, an entity indirectly owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr., for office space allocated to us under our advisory agreement. It will be held as security for the payment of our allocated share of office space rental. If unused it will be returned to us upon lease expiration or earlier termination.
Pursuant to the Company’s hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage. Under the advisory agreement, Ashford Inc. secures casualty insurance policies to cover Ashford Trust, Braemar, their hotel managers, as needed, and Ashford Inc. The total loss estimates included in such policies are based on the collective pool of risk exposures from each party. Ashford Inc.’s risk management department manages the casualty insurance program. At the beginning of each year, Ashford Inc.’s risk management department collects funds from Ashford Trust, Braemar and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.

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Ashford Securities
On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Ashford Trust has entered into a contribution agreement with Ashford Inc. pursuant to which Ashford Trust has agreed to contribute, with Braemar, up to $15 million to fund the operations of Ashford Securities. As of December 31, 2019, Ashford Trust has funded approximately $2.5 million, of which $1.6 million was included in “other assets” of our consolidated balance sheet.
Costs for all operating expenses of Ashford Securities that are contributed by Ashford Trust and Braemar will be expensed as incurred. These costs will be allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% to Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised or June 10, 2023, there will be a true up (the “True-up Date”) between Ashford Trust and Braemar whereby the actual capital contributions contributed by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively. After the True-up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Funding advances will be expensed as the expenses are incurred by Ashford Securities. For the year ended December 31, 2019, Ashford Trust has expensed $896,000 of reimbursed operating expenses of Ashford Securities, which is included in “corporate, general, and administrative” in the consolidated statement of operations.
Enhanced Return Funding Program
On June 26, 2018, Ashford Trust entered into the Enhanced Return Funding Program Agreement and Amendment No. 1 to the Amended and Restated Advisory Agreement (the “ERFP Agreement”) with Ashford Inc. The Amended and Restated Advisory Agreement was also amended to name Ashford Inc. and its subsidiaries as the Company’s sole and exclusive provider of asset management, project management and other services offered by Ashford Inc. or any of its subsidiaries and to revise the payment terms such that the base fee and reimbursable expenses will be paid monthly. The independent members of the board of directors of each of Ashford Inc. and Ashford Trust, with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on behalf of Ashford Inc. and Ashford Trust, respectively.
The ERFP Agreement generally provides that Ashford LLC will make investments to facilitate the acquisition of properties by Ashford Trust OP that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). The investments will equal 10% of the property acquisition price and will be made, either at the time of the property acquisition or at any time generally in the following two years, in exchange for hotel FF&E for use at the acquired property or any other property owned by Ashford Trust OP.
The initial term of the ERFP Agreement is two years (the “Initial Term”), unless earlier terminated pursuant to the terms of the ERFP Agreement. At the end of the Initial Term, the ERFP Agreement shall automatically renew for successive one year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Ashford Trust provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.
As a result of the Hilton Alexandria Old Town and La Posada de Santa Fe acquisitions in 2018, under the ERFP Agreement we were entitled to receive $11.1 million and $5.0 million from Ashford LLC, respectively, in the form of future purchases of hotel FF&E. As of December 31, 2018, the Company sold $16.1 million of hotel FF&E from certain Ashford Trust hotel properties to Ashford LLC which were subsequently leased back to the Company rent free. As a result, the Company has not recorded an operating lease right-of-use asset, an operating lease liability or lease expense for rents. As of December 31, 2018, Ashford LLC remitted payment of $16.1 million to the Company. Under the relevant accounting guidance related to sales-leaseback transactions, the transaction was not accounted for as a sale under Topic 606. As a result, the applicable hotel FF&E was not derecognized at December 31, 2018 and the Company recorded a $16.1 million liability to Ashford LLC. Upon adoption of Topic 842 on January 1, 2019, the Company reevaluated the transaction under the applicable accounting guidance and concluded that the transaction qualified as a sale. As a result, the Company recorded a $1.8 million gain directly to accumulated deficit and, in conjunction with the sale, derecognized the assets and removed the liability to Ashford LLC.
As a result of the Hilton Santa Cruz/Scotts Valley and Embassy Suites New York Manhattan Times Square acquisitions in 2019, under the ERFP Agreement we are entitled to receive $5.0 million and $19.5 million from Ashford LLC, respectively, in the form of future purchases of hotel FF&E.
In the first quarter of 2019 in connection with the Hilton Santa Cruz/Scotts Valley acquisition, the Company sold $5.0 million of hotel FF&E from certain Ashford Trust hotel properties to Ashford LLC which was subsequently leased back to the Company rent free. In accordance with ASC 842, the Company evaluated the transactions and concluded that each transaction qualified as

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a sale. As a result, the Company recorded a gain of $233,000 for the year ended December 31, 2019, in conjunction with the sale and derecognized the assets. The gain is included in “gain (loss) on sale of assets and hotel properties” in our consolidated statements of operations.
In the second quarter of 2019, in connection with the Embassy Suites New York Manhattan Times Square acquisition, the Company sold $8.1 million of hotel FF&E from certain Ashford Trust hotel properties to Ashford LLC which was subsequently leased back to the Company rent free. In accordance with ASC 842, the Company evaluated the transactions and concluded that each transaction qualified as a sale. As a result, the Company recorded a gain of $326,000 for the year ended December 31, 2019, in conjunction with the sale and derecognized the assets. The gain is included in “gain (loss) on sale of assets and hotel properties” in our consolidated statements of operations.
Additionally, under the applicable accounting guidance in ASC 842, the Company has not recorded an operating lease right-of-use asset, an operating lease liability or lease expense for rents as the related party lease has no economic substance because the related party lease is provided rent free.
In 2016, prior to the ERFP agreement, $4.0 million of key money consideration was invested in FF&E by Ashford LLC to be used by Ashford Trust, which represented all of the key money consideration for the Le Pavillon Hotel. Upon adoption of ASC 842, we evaluated this arrangement, which is accounted for as a lease that will expire in 2021. Under the applicable accounting guidance in ASC 842, as the related party lease is provided rent-free, there is no economic substance related to the lease which results in not recording an operating lease right-of-use asset, an operating lease liability or lease expense.
Project Management Agreement
In connection with Ashford Inc.’s August 8, 2018 acquisition of Remington Lodging’s project management business, we entered into a project management agreement with Ashford Inc.’s indirect subsidiary, Premier, pursuant to which Premier provides project management services to our hotels, including construction management, interior design, architectural services, and the purchasing, freight management, and supervision of installation of FF&E and related services. Pursuant to the project management agreement, we pay Premier: (a) project management fees of up to 4% of project costs; and (b) market service fees at current market rates with respect to construction management, interior design, FF&E purchasing, FF&E expediting/freight management, FF&E warehousing and FF&E installation and supervision.
Hotel Management Agreement
On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. As a result of the acquisition, hotel management services are provided by Remington Hotels, a subsidiary of Ashford Inc., under the respective hotel management agreement with each customer, including Ashford Trust and Braemar.
At December 31, 2019, Remington Hotels managed 80 of our 117 hotel properties and the WorldQuest condominium properties.
We pay monthly hotel management fees equal to the greater of $14,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.
We also have a mutual exclusivity agreement with Remington Hotels, pursuant to which: (i) we have agreed to engage Remington Hotels to provide management services with respect to any hotel we acquire or invest in, to the extent we have the right and/or control the right to direct the management of such hotel; and (ii) Remington Hotels has agreed to grant us a right of first refusal to purchase any opportunity to develop or construct a hotel that it identifies that meets our initial investment guidelines. We are not, however, obligated to engage Remington Hotels if our independent directors either: (i) unanimously vote to hire a different manager or developer; or (ii) by a majority vote elect not to engage such related party because either special circumstances exist such that it would be in the best interest of our Company not to engage such related party, or, based on the related party’s prior performance, it is believed that another manager could perform the management or other duties materially better.

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Summary of Transactions
In accordance with our advisory agreement, our advisor, or entities in which our advisor has an interest, have a right to provide products or services to our hotels, provided such transactions are evaluated and approved by our independent directors. The following tables summarize the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the amounts recorded by us for those services and the applicable classification on our consolidated financial statements (in thousands):
   Year Ended December 31, 2019
Company Product or ServiceTotal
Investments in Hotel Properties, net (1)
 
Indebtedness, net (2)
 Other Hotel Revenue Other Hotel Expenses Management Fees
AIM Cash management services$1,206
$
 $
 $
 $
 $
Ashford LLC Insurance claims services75

 
 
 
 
Ashford Securities Broker/Dealer896

 
 
 
 
J&S Audio Visual Audio visual commissions7,365

 
 7,365
 
 
J&S Audio Visual Equipment24
24
 
 
 
 
Lismore Capital Debt placement services1,294

 (1,215) 
 
 
Lismore Capital Broker services427

 
 
 
 
OpenKey Mobile key app112
3
 
 
 109
 
Premier Project management services20,004
18,281
 
 
 
 
Pure Wellness Hypoallergenic premium rooms1,021
599
 
 
 422
 
Remington Hotels 
Hotel management services (3)
9,152

 
 
 5,356
 3,796
   Year Ended December 31, 2019
Company Product or ServiceTotalProperty Taxes, Insurance and Other Advisory Services Fee Corporate, General and Administrative Gain (Loss) on Sale of Assets and Hotel Properties Write-off of Premiums, Loan Costs and Exit Fees
AIM Cash management services$1,206
$
 $
 $1,206
 $
 $
Ashford LLC Insurance claims services75
75
 
 
 
 
Ashford Securities Broker/Dealer896

 
 896
 
 
J&S Audio Visual Audio visual commissions7,365

 
 
 
 
J&S Audio Visual Equipment24

 
 
 
 
Lismore Capital Debt placement services1,294

 
 
 
 79
Lismore Capital Broker services427

 
 
 427
 
OpenKey Mobile key app112

 
 
 
 
Premier Project management services20,004

 1,723
 
 
 
Pure Wellness Hypoallergenic premium rooms1,021

 
 
 
 
Remington Hotels Hotel management services9,152

 
 
 
 
   Year Ended December 31, 2018
Company Product or ServiceTotal
Investments in Hotel Properties, net (1)
 
Indebtedness, net (2)
 Other Revenue Other Hotel Expenses Corporate, General and Administrative
AIM Cash management services$1,156
$
 $
 $
 $
 $1,156
Ashford LLC Insurance claims services76

 
 
 
 76
J&S Audio Visual Audio visual commissions3,569

 
 3,569
 
 
J&S Audio Visual Equipment925
925
 
 
 
 
Lismore Capital Debt placement services5,094

 (5,094) 
 
 
OpenKey Mobile key app105
3
 
 
 102
 
Premier Project management services7,677
7,677
 
 
 
 
Pure Wellness Hypoallergenic premium rooms2,436
2,412
 
 
 24
 
   Year Ended December 31, 2017
Company Product or ServiceTotal
Investments in Hotel Properties, net (1)
 
Indebtedness, net (2)
 Other Revenue Other Hotel Expenses Corporate, General and Administrative
AIM Cash management services$1,976
$
 $
 $
 $
 $1,976
J&S Audio Visual Audio visual commissions66

 
 66
 
 
Lismore Capital Debt placement services913

 (913) 
 
 
OpenKey Mobile key app60

 
 
 60
 
Pure Wellness Hypoallergenic premium rooms1,309
1,309
 
 
 
 

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________
(1)
Recorded in FF&E and depreciated over the estimated useful life.
(2)
Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement.
(3)
Other hotel expenses include incentive hotel management fees and other hotel management costs.
The following table summarizes the amount due to Ashford Inc. (in thousands):
    Due to Ashford Inc.
Company Product or Service December 31, 2019 December 31, 2018
Ashford LLC Advisory services $1,133
 $2,362
Ashford LLC Deposit on ERFP assets 
 16,100
Ashford LLC Insurance claims services 18
 23
AIM Cash management services 82
 99
J&S Audio Visual Audio visual commissions 1,009
 855
OpenKey Mobile key app 2
 1
Premier Project management services 4,028
 3,206
Pure Wellness Hypoallergenic premium rooms 298
 388
    $6,570
 $23,034

As of December 31, 2019, due from related parties, net included a net receivable from Remington Hotels in the amount of $1.8 million primarily related to advances made by Ashford Trust and accrued base and incentive management fees.
18. Commitments and Contingencies
Restricted Cash—Under certain management and debt agreements for our hotel properties existing at December 31, 2017,2019, escrow payments are required for insurance, real estate taxes and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 4% to 6% of gross revenues for capital improvements.
Franchise Fees—Under franchise agreements for our hotel properties existing at December 31, 2017,2019, we pay franchisor royalty fees between 1%3% and 6% of gross rooms revenue and, in some cases, 1% to 3% of food and beverage revenues. Additionally, we pay fees for marketing, reservations, and other related activities aggregating between 1% and 4% of gross rooms revenue and, in some cases, food and beverage revenues. These franchise agreements expire on varying dates between 20182021 and 2047. When a franchise term expires, the franchisor has no obligation to renew the franchise. A franchise termination could have a material adverse effect on the operations or the underlying value of the affected hotel due to loss of associated name recognition, marketing support, and centralized reservation systems provided by the franchisor. A franchise termination could also have a material adverse effect on cash available for distribution to stockholders. In addition, if we breach the franchise agreement and the franchisor terminates a franchise prior to its expiration date, we may be liable for up to three times the average annual fees incurred for that property.
Our continuing operations incurredThe table below summarizes the franchise fees of $69.3 million, $70.5 million and $62.8 million, respectively, for the years ended December 31, 2017, 2016 and 2015, which are included in “other” hotel expenses.incurred (in thousands):
  Year Ended December 31,
Line Item 2019 2018 2017
Other hotel expenses $76,707
 $72,095
 $69,300

Management Fees—Under hotel management agreements for our hotel properties existing at December 31, 2017,2019, we pay a) monthly propertyhotel management fees equal to the greater of approximately $13,000$14,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases 2%1% 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.applicable. These hotel management agreements expire from 2020 through 2038, with renewal options. If we terminate a hotel management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term and liquidated damages or, in certain circumstances, we may substitute a new management agreement.
Additionally, we pay: (a) project management fees of up to 4% of project costs; (b) market service fees including purchasing, design and construction management not to exceed 16.5% of project management budget cumulatively, including project management fees; and (c) other general fees at current market rates as approved by our independent directors, if required. Prior to August 8, 2018, these fees were paid to Remington Lodging. In connection with Ashford Inc.’s August 8, 2018 acquisition of

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Remington Lodging’s project management business, we entered into a project management agreement with Premier, a subsidiary of Ashford Inc. From and after August 8, 2018, we paid the aforementioned fees to Premier. See note 17.
Leases—We lease land and facilities under non-cancelable operating leases, which expire between 2040 and 2114, including four4 ground leases related to our hotel properties. SeveralNaN of these ground leases are subject to base rent plus contingent rent based on the relatedeach hotel property’s financial results and escalation clauses. Additionally, other leases have certain contingent rentals included. For the years ended December 31, 2018, and 2017, 2016 and 2015, our continuing operationswe recognized rent expense of $4.3 million, $5.3$4.0 million and $3.8$4.3 million, respectively, which included contingent rent of $1.1 million, $1.7 million$837,000 and $1.3$1.1 million, respectively. Rent expense related to continuing operations is included in “other” hotel expenses in the consolidated statements of operations.
FutureOn January 1, 2019, we adopted ASC 842 on a modified retrospective basis. The adoption of this standard has resulted in the recognition of operating lease ROU assets and lease liabilities primarily related to our ground lease arrangements. See note 6 for operating lease cost, including variable lease cost associated with the ground leases as well as future minimum rentalslease payments due under non-cancelable leases are as follows for each of the five following years and thereafter are as follows (in thousands):non-cancellable leases.
2018$2,529
20192,377
20202,296
20212,248
20222,092
Thereafter112,184
Total$123,726
Capital CommitmentsAt December 31, 2017,2019, we had capital commitments of $44.4$50.5 million, including commitments that will be satisfied with insurance proceeds, relating to general capital improvements that are expected to be paid in the next twelve months.
LitigationPalm Beach Florida Hotel and Office Building Limited Partnership, et al. v. Nantucket Enterprises, Inc.This litigation involves a landlord tenant dispute from 2008 in which the landlord, Palm Beach Florida Hotel and Office Building Limited Partnership, a subsidiary of the Company, claimed that the tenant had violated various lease provisions of the lease agreement and was therefore in default. The tenant counterclaimed and asserted multiple claims including that it had been wrongfully

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evicted. The litigation was instituted by the plaintiff in November 2008 in the Circuit Court of the Fifteenth Judicial Circuit, in and for Palm Beach County, Florida and proceeded to a jury trial on June 30, 2014. The jury entered its verdict awarding the tenant total claims of $10.8 million and ruling against the landlord on its claim of breach of contract. In 2016, the Court of Appeals reduced the original $10.8 million judgment to $8.8 million and added pre-judgment interest on the wrongful eviction judgment. The case was further appealed to the Florida Supreme Court. On May 23, 2017, the trial court issued an order compelling the company that issued the supersedeas bond, RLI Insurance Company (“RLI”), to pay approximately $10.0 million. On June 1, 2017, RLI paid Nantucket this amount and sought reimbursement from the Company.Company, and on June 7, 2017, the Company paid $2.5 million of the judgement. On June 27, 2017, the Florida Supreme Court denied the Company'sCompany’s petition for review. As a result, all of the appeals were exhausted and the judgment was final with the determination and reimbursement of attorney'sattorney’s fees being the only remaining dispute. On June 29, 2017, the balance of the judgment of $3.9 million was paid to Nantucket by the Company. On July 26, 2018, we paid $544,000 as part of a settlement on certain legal fees. The negotiations relating to the potential payment of the remaining attorney’s fees are still ongoing. As of December 31, 2019, we have accrued approximately $504,000 in legal fees, which represents the Company’s estimate of the amount of potential remaining legal fees that could be owed cannot be predictedowed.
On December 4, 2015, Pedro Membrives filed a class action lawsuit against HHC TRS FP Portfolio LLC, Remington Lodging & Hospitality, LLC, Remington Holdings LLC, Mark A. Sharkey, Archie Bennett, Jr., Monty J. Bennett, Christopher Peckham, and any other related entities in the Supreme Court of New York, Nassau County, Commercial Division. On August 30, 2016, the complaint was amended to add Michele Spero as a Plaintiff and Remington Long Island Employers, LLC as a defendant. The lawsuit is captioned Pedro Membrives and Michele Spero, individually and on behalf of others similarly situated v. HHC TRS FP Portfolio LLC, Remington Lodging & Hospitality, LLC, Remington Holdings LLC, Remington Long Island Employers, LLC, et al., Index No. 607828/2015 (Sup. Ct. Nassau Cty.). The plaintiffs allege that the owner and management company of the Hyatt Regency Long Island hotel violated New York law by improperly retaining service charges rather than distributing them to employees. In 2017, the class was certified. On July 24, 2018, the trial court granted the plaintiffs’ motion for summary judgment on liability. The defendants appealed the summary judgment and that appeal is still pending. Notwithstanding the pending appeal on the summary judgment issue, the trial court continued the litigation with respect to the plaintiffs’ alleged damages. The plaintiffs filed an application for damages on August 28, 2019. The defendants filed their opposition to the plaintiffs’ application for damages on October 11, 2019. The plaintiffs filed their reply on October 25, 2019. The defendants intend to vigorously defend against the plaintiffs’ claims and the Company does not believe that an unfavorable outcome is probable. If the plaintiffs’ motion for summary judgment on liability is upheld and the Company is unsuccessful in any certainty.
Thefurther appeals, the Company estimates its total loss including post judgment interestthat damages could range between approximately $5.8 million and reimbursement of the plaintiff’s legal fees to be approximately $17.3$11.9 million asplus attorneys’ fees. As of December 31, 2017, resulting in additional expense of $4.1 million for the year ended December 31, 2017.
On June 29, 2017, RLI filed suit in Federal District Court in Dallas seeking to recover the2019, 0 amounts previously paid to Nantucket. On July 19, 2017, the Company paid approximately $10.0 million to RLI mooting RLI's claim subject only to the alleged claim for attorney fees. The Company paid the negotiated settlement of RLI's attorney fees in the amount of $100,000, on November 2, 2017, and a Stipulation for Dismissal was filed concluding the litigation.have been accrued.
We are engaged in other various legal proceedings which have arisen but have not been fully adjudicated. The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature, ranges from remote to reasonably possible and to probable.literature. Based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings,

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either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, or results of operations.operations or cash flow. 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.
Income Taxes—We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 20132015 through 20172019 remain subject to potential examination by certain federal and state taxing authorities.
Potential Pension Liabilities—Upon our 2006 acquisition of a hotel property, certain employees of such hotel were unionized and covered by a multi-employer defined benefit pension plan. At that time, no0 unfunded pension liabilities existed. Subsequent to our acquisition, a majority of employees, who are employees of the hotel manager, Remington Lodging, petitioned the employer to withdraw recognition of the union. As a result of the decertification petition, Remington Lodging withdrew recognition of the union. At the time of the withdrawal, the National Retirement Fund, the union’s pension fund, indicated unfunded pension liabilities existed. The National Labor Relations Board (“NLRB”) filed a complaint against Remington Lodging seeking, among other things, that Remington Lodging’s withdrawal of recognition was unlawful. Pending the final determination of the NLRB complaint, including appeals, the pension fund entered into a settlement agreement with Remington Lodging on November 1, 2011, providing that (a) Remington Lodging will continue to make monthly pension fund payments pursuant to the collective bargaining agreement, and (b) if the withdrawal of recognition is ultimately deemed lawful, Remington Lodging will have an unfunded pension liability equal to $1.7 million, minus the monthly pension payments made by Remington Lodging since the settlement agreement. To illustrate, if Remington Lodging - as of the date a final determination occurs - has made monthly pension payments equaling $100,000, Remington Lodging’s remaining withdrawal liability shall be the unfunded pension liability of $1.7 million, minus $100,000 (or $1.6 million). This remaining unfunded pension liability shall be paid to the pension fund in annual installments of $84,000 (but may be made monthly or quarterly, at Remington Lodging’s election), which shall continue for the remainder of the twenty-(20)-yeartwenty years year capped period, unless Remington Lodging elects to pay the unfunded pension liability amount earlier. As previously discussed, on November 6, 2019, Ashford Inc. completed its acquisition of Remington Lodging’s hotel management business, which is a subsidiary of Ashford Inc. and referred to as Remington Hotels. We agreed to indemnify Remington LodgingHotels for the payment of the unfunded pension liability, if any, as set forth in the settlement agreement.
13. Redeemable Noncontrolling Interests in Operating Partnership
Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity in earnings/losses of the operating partnership, which is an allocation of net income/loss attributable to the common unit holders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (“common units”) and the units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested throughout the period plus distributions paid to the limited partners with regard to the Class B common units. Class B common units had a fixed dividend rate of 7.2% and had priority in payment of cash dividends over common units but otherwise had no

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preference over common units. During the fourth quarter of 2016, the Class B common units were converted, at the Company’s election, to common units. Beginning one year after issuance, each common unit may be redeemed for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either (i) issued pursuant to an effective registration statement, (ii) included in an effective registration statement providing for the resale of such common stock or (iii) issued subject to a registration rights agreement. As a result of the Ashford Inc. spin-off, holders of our common stock were distributed one share of Ashford Inc. common stock for every 87 shares of our common stock, while our unitholders received one common unit of the operating limited liability company subsidiary of Ashford Inc. for each common unit of our operating partnership the holder held, and such holder then had the opportunity to exchange up to 99% of those units for shares of Ashford Inc. common stock at the rate of one share of Ashford Inc. common stock for every 55 common units of the operating limited liability company subsidiary of Ashford Inc. Following the spin-off, Ashford Hospitality Trust, Inc. continues to hold 598,000 shares of Ashford Inc. common stock, and all of our remaining lodging investments are owned by Ashford Trust OP. Therefore, each common unit and LTIP unit was worth a fractional amount of one share of our common stock. On December 13, 2017, Ashford Hospitality Trust, Inc. completed a capital contribution of 598,000 shares of Ashford Inc. common stock to Ashford Trust OP which in turn contributed two-thirds of the shares, in the amount of one-third each to two TRS entities. As a result the number of outstanding OP units was reduced to approximately 92% of the prior outstanding common units returning the ratio of common stock to common units to 1 to 1. Each common unit was worth approximately 94% of one share of our common stock at December 31, 2016.
LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, have vesting periods ranging from three to five years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of the operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of the operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for the operating partnership.
The compensation committee of the board of directors of the Company approved Performance LTIP units to certain executive officers. The award agreements provide for the grant of a target number of performance-based LTIP units that will be settled in common units of Ashford Trust OP, if and when the applicable vesting criteria have been achieved following the end of the performance and service period. The target number of performance-based LTIP units may be adjusted from 0% to 200% of the target number based on achievement of specified absolute and relative total stockholder returns based on the formulas determined by the Company’s Compensation Committee on the grant date. As of December 31, 2017, there are approximately 1.8 million performance-based LTIP units, representing 200% of the target, outstanding. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature, and the Performance LTIP units were granted to non-employees. The Performance LTIP units unamortized fair value of $4.4 million at December 31, 2017 will be expensed over a period of 2.2 years, subject to future mark to market adjustments. Compensation expense of $1.8 million and $1.2 million was recorded for the years ended December 31, 2017 and 2016, respectively.
As of December 31, 2017, we have issued a total of 11.9 million LTIP and Performance LTIP units, all of which, other than approximately 609,000 units issued in March 2015, have reached full economic parity with, and are convertible into, common units. Expense of $3.3 million, $2.8 million, and $1.4 million was recognized for the years ended December 31, 2017, 2016 and 2015, respectively, which was associated with LTIP units issued to Ashford LLC’s employees and Ashford Trust’s directors and is included in “advisory services fee” and “corporate, general and administrative,” respectively, in our consolidated statements of operations. As the LTIP units are issued to non-employees, the compensation expense was determined based on the share price as of the end of the period. The fair value of the unrecognized cost of LTIP units, which was $4.3 million at December 31, 2017, will be expensed over a period of 2.3 years.
During the year ended December 31, 2017, 21,000 common units with an aggregate fair value of $161,000, were redeemed by the holders and, at our election, we issued shares of our common stock to satisfy the redemption price.
During the year ended December 31, 2016, 224,000 common units with an aggregate fair value of $1.6 million were redeemed by the holder and, at our election, we issued shares of our common stock to satisfy the redemption price. Also during 2016, as discussed in note 5, 2.0 million Class B common units were redeemed as part of the sale of the SpringHill Suites Gaithersburg. The Class B units had a fair value of 11.7 million as of the date of conversion.
During the year ended December 31, 2015, 152,000 common units with an aggregate fair value of $1.5 million were redeemed by the holder and, at our election, we issued shares of our common stock to satisfy the redemption price.

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Redeemable noncontrolling interests in our operating partnership as of December 31, 2017 and 2016 were $116.1 million and $132.8 million, which represented ownership of our operating partnership of 15.52% and 14.48% respectively. The carrying value of redeemable noncontrolling interests as of December 31, 2017 and 2016 included adjustments of $154.3 million and $144.3 million, respectively, to reflect the excess of redemption value over the accumulated historical costs. Redeemable noncontrolling interests were allocated net loss of $21.6 million, net loss of $12.5 million and net income of $35.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. We declared aggregate cash distributions to holders of common units and holders of LTIP units of $10.0 million, $11.0 million and $10.9 million for the years ended December 31, 2017, 2016 and 2015 respectively.
A summary of the activity of the units in our operating partnership is as follow (in thousands):
 Year Ended December 31,
 2017 2016 2015
Outstanding at beginning of year19,443
 20,388
 19,836
LTIP units issued701
 515
 704
Performance LTIP units issued1,179
 803
 
Common units converted for sale of hotel property
 (2,039) 
Common units converted to common shares(21) (224) (152)
Conversion factor adjustment(1,700) 
 
Outstanding at end of year19,602
 19,443
 20,388
Common units convertible/redeemable at end of year18,993
 17,531
 16,918
14. Equity
Equity Offering—On January 29, 2015, we commenced a follow-on public offering of 9.5 million shares of common stock. The offering priced on January 30, 2015, at $10.65 per share for gross proceeds of $101.2 million. We granted the underwriters a 30-day option to purchase up to an additional 1.425 million shares of common stock. On February 10, 2015, the underwriters partially exercised their option and purchased an additional 1.03 million shares of our common stock at a price of $10.65 per share. The net proceeds from the offering after underwriting discount and offering expenses were approximately $110.9 million.
Common Stock Repurchases—For the years ended December 31, 2017, 2016 and 2015, no shares of our common stock have been repurchased under the share repurchase program.
In addition, we acquired 203,299 shares, 124,463 shares and 52,661 shares of our common stock in 2017, 2016 and 2015, respectively, to satisfy employees’ statutory minimum federal income tax obligations in connection with vesting of equity grants issued under our stock-based compensation plan.
Preferred Stock—In accordance with Ashford Trust’s charter, we are authorized to issue 50 million shares of preferred stock, which currently includes Series D cumulative preferred stock, Series E cumulative preferred stock, Series F cumulative preferred stock, Series G cumulative preferred stock, Series H cumulative preferred stock and Series I cumulative preferred stock.
8.55% Series A Cumulative Preferred Stock. At December 31, 2016, there were 1.7 million shares of Series A cumulative preferred stock outstanding. Series A cumulative preferred stock had no maturity date and we were not required to redeem these shares at any time. Series A cumulative preferred stock was redeemable at our option for cash, in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. On September 18, 2017, the Company redeemed its Series A cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4631 per share, for a total redemption price of $25.4631 per share.
8.45% Series D Cumulative Preferred Stock. At December 31, 2017 and 2016, there were 2.4 million and 9.5 million shares, respectively of Series D cumulative preferred stock outstanding. Series D cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series D cumulative preferred stock is redeemable at our option for cash, in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series D cumulative preferred stock quarterly dividends are set at the rate of 8.45% per annum of the $25.00 liquidation preference (equivalent to an annual dividend rate of $2.1125 per share). The dividend rate increases to 9.45% per annum if these shares are no longer traded on a major stock exchange. In general, Series D cumulative preferred stock holders have no voting rights. On September 18, 2017, the Company redeemed approximately 1.6 million shares of its Series D cumulative preferred

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stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.4577 per share, for a total redemption price of $25.4577 per share. On October 4, 2017, the Company redeemed 379,036 shares of Series D cumulative preferred shares at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.5516 per share, for a total redemption price of $25.5516 per share. On December 8, 2017, the Company redeemed approximately 5.1 million shares of its Series D cumulative preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the redemption date, in an amount equal to $0.3990 per share, for a total redemption price of $25.3990 per share.
7.375% Series F Cumulative Preferred Stock. On July 15, 2016, the Company issued 4.8 million shares of 7.375% Series F cumulative preferred stock. The Series F cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series A cumulative preferred stock, Series D cumulative preferred stock, Series G cumulative preferred stock (noted below), Series H cumulative preferred stock (noted below) and Series I cumulative preferred stock (noted below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series F cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series F cumulative preferred stock is redeemable at our option for cash (on or after July 15, 2021), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series F cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series F cumulative preferred stock is convertible into a maximum 9.68992 shares of our common stock. The actual number is based on a formula as defined in the Series F cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series F cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series F cumulative preferred stock to common stock have not been met as of period end. Therefore, Series F cumulative preferred stock will not impact our earnings per share calculations. Series F cumulative preferred stock quarterly dividends are set at the rate of 7.375% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $1.8438 per share). In general, Series F cumulative preferred stock holders have no voting rights.
7.375% Series G Cumulative Preferred Stock. On October 18, 2016, the Company issued 6.0 million shares of 7.375% Series G cumulative preferred stock. On October 17, 2016, the underwriters exercised the over-allotment option to purchase an additional 200,000 shares of the Series G cumulative preferred stock. The 6.2 million of Series G cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series A cumulative preferred stock (all shares redeemed on September 18, 2017), Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series H cumulative preferred stock (noted below) and Series I cumulative preferred stock (noted below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series G cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series G cumulative preferred stock is redeemable at our option for cash (on or after October 18, 2021), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series G cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series G cumulative preferred stock is convertible into a maximum 8.33333 shares of our common stock. The actual number is based on a formula as defined in the Series G cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series G cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series G cumulative preferred stock to common stock have not been met as of period end. Therefore, Series G cumulative preferred stock will not impact our earnings per share calculations. Series G cumulative preferred stock quarterly dividends are set at the rate of 7.375% of the $25.00 liquidation preference (equivalent to an annual dividend rate of $1.8438 per share). In general, Series G cumulative preferred stock holders have no voting rights.
7.50% Series H Cumulative Preferred Stock. On August 25, 2017, the Company issued 3.4 million shares of 7.50% Series H cumulative preferred stock. The Series H cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series A cumulative preferred stock (all shares redeemed on September 18, 2017), Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series G cumulative preferred stock and Series I cumulative preferred stock (discussed below)) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. On September 8, 2017, we issued 400,000 additional shares of 7.50% Series H cumulative preferred stock pursuant to the over-allotment option. Series H cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series H cumulative preferred stock is redeemable at our option for cash (on or after August 25,

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2022), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series H cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series H cumulative preferred stock is convertible into a maximum 8.25083 shares of our common stock. The actual number is based on a formula as defined in the Series H cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series H cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series H cumulative preferred stock to common stock have not been met as of period end. Therefore, Series H cumulative preferred stock will not impact our earnings per share.
Dividends on the Series H cumulative preferred stock accrue in the amount of $1.8750 per share each year, which is equivalent to 7.50% of the $25.00 liquidation preference per share of Series H cumulative preferred stock. Dividends on the Series H cumulative preferred stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day). The first dividend on the Series H cumulative preferred stock was paid on October 16, 2017 in the amount of $0.1875 per share.
7.50% Series I Cumulative Preferred Stock. On November 17, 2017, the Company issued 5.4 million shares of 7.50% Series I cumulative preferred stock. The Series I cumulative preferred stock ranks senior to all classes or series of the Company’s common stock and future junior securities, on a parity with each series of the Company’s outstanding preferred stock (the Series D cumulative preferred stock (7.1 million shares redeemed in 2017), Series F cumulative preferred stock, Series G cumulative preferred stock and Series H cumulative preferred stock) and with any future parity securities and junior to future senior securities and to all of the Company’s existing and future indebtedness, with respect to the payment of dividends and the distribution of amounts upon liquidation, dissolution or winding up of the Company’s affairs. Series I cumulative preferred stock has no maturity date, and we are not required to redeem the shares at any time. Series I cumulative preferred stock is redeemable at our option for cash (on or after November 17, 2022), in whole or from time to time in part, at a redemption price of $25.00 per share plus accrued and unpaid dividends, if any, at the redemption date. Series I cumulative preferred stock may be converted into shares of our common stock, at the option of the holder, in certain limited circumstances such as a change of control. Each share of Series I cumulative preferred stock is convertible into a maximum 8.06452 shares of our common stock. The actual number is based on a formula as defined in the Series I cumulative preferred stock agreement (unless the Company exercises its right to redeem the Series I cumulative preferred shares for cash, for a limited period upon a change in control). The necessary conditions to convert the Series I cumulative preferred stock to common stock have not been met as of period end. Therefore, Series I cumulative preferred stock will not impact our earnings per share.
Dividends on the Series I cumulative preferred stock accrue in the amount of $1.8750 per share each year, which is equivalent to 7.50% of the $25.00 liquidation preference per share of Series I cumulative preferred stock. Dividends on the Series I cumulative preferred stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day). The first dividend on the Series I cumulative preferred stock sold in this offering was paid on January 16, 2018 in the amount of $0.2292 per share.
Dividends—A summary of dividends declared is as follows (in thousands):
 Year Ended December 31,
 2017 2016 2015
Common stock$47,104
 $46,292
 $47,190
Preferred stocks:     
Series A cumulative preferred stock2,539
 3,542
 3,542
Series D cumulative preferred stock18,211
 20,002
 20,002
Series E cumulative preferred stock
 6,280
 10,418
Series F cumulative preferred stock8,849
 4,130
 
Series G cumulative preferred stock11,430
 2,318
 
Series H cumulative preferred stock2,494
 
 
Series I cumulative preferred stock1,238
 
 
Total dividends declared$91,865
 $82,564
 $81,152

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Noncontrolling Interests in Consolidated Entities—Our noncontrolling entity partner had an ownership interest of 15% in two hotel properties and a total carrying value of $646,000 and $756,000 at December 31, 2017 and 2016, respectively. Our ownership interest is reported in equity in the consolidated balance sheets. Noncontrolling interests in consolidated entities were allocated losses of $110,000, $14,000 and $30,000 for the years ended December 31, 2017, 2016 and 2015, respectively.
15. Stock-Based Compensation
Under the Amended and Restated 2011 Stock Incentive Plan approved by stockholders, we are authorized to grant 17.3 million restricted stock units and performance stock units of our common stock as incentive stock awards. At December 31, 2017, 4.0 million shares were available for future issuance under the Amended and Restated 2011 Stock Incentive Plan.
Restricted Stock Units—Stock-based compensation expense of $5.4 million, $4.5 million and $1.9 million was recognized for the years ended December 31, 2017, 2016 and 2015 in connection with equity awards granted to employees of Ashford LLC and certain employees of Remington Lodging and is included in “advisory services fee” and “management fees,” respectively, in our consolidated statements of operations. Additionally, $90,000, $247,000 and $180,000 of stock-based compensation expense was recognized for the years ended December 31, 2017, 2016 and 2015, respectively, in connection with common stock issued to Ashford Trust’s directors, which vested immediately, and is included in “corporate general and administrative” expense on our consolidated statements of operations. At December 31, 2017, the unamortized cost of the unvested shares of restricted stock was $8.7 million which will be amortized over a period of 2.3 years, subject to future mark to market adjustments, and had vesting schedules between February 2018 and March 2021.
A summary of our restricted stock unit activity is as follows (shares in thousands):
 Year Ended December 31,
 2017 2016 2015
 Restricted Shares Weighted Average Price at Grant Restricted Shares Weighted Average Price at Grant Restricted Shares Weighted Average Price at Grant
Outstanding at beginning of year1,627
 $8.30
 1,459
 $10.21
 595
 $10.92
Restricted shares granted1,272
 6.46
 862
 6.26
 1,183
 9.93
Restricted shares vested(759) 8.82
 (647) 9.92
 (299) 10.53
Restricted shares forfeited(55) 6.73
 (47) 7.95
 (20) 10.13
Outstanding at end of year2,085
 7.03
 1,627
 8.30
 1,459
 10.21
Performance Stock Units—The compensation committee of the board of directors of the Company approved PSUs to certain executive officers, which have a three year cliff vesting. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if and when the applicable vesting criteria have been achieved following the end of the performance and service period. The target number of PSUs may be adjusted from 0% to 200% based on achievement of specified absolute and relative total stockholder returns based on the formulas determined by the Company’s Compensation Committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature, and the PSUs were granted to non-employees. Compensation expense of $1.7 million and $982,000 was recorded for the years ended December 31, 2017 and 2016, respectively. The fair value of the unrecognized cost of PSUs, which was $4.0 million at December 31, 2017, will be expensed over a period of approximately 2.2 years.
A summary of our PSU activity is as follows (shares in thousands):
 Year Ended December 31,
 2017 2016
 PSUs Weighted Average Price at Grant PSUs Weighted Average Price at Grant
Outstanding at beginning of year336
 $6.38
 
 $
PSUs granted484
 5.85
 336
 6.38
Outstanding at end of year820
 6.07
 336
 6.38

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16.19. Income Taxes
For U.S. federal income tax purposes, we elected to be treated as a REIT under the Internal Revenue Code. To qualify as a REIT, we must meet certain organizational and operational stipulations, including a requirement that we distribute at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders. We currently intend to adhere to these requirements and maintain our REIT status. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax)tax prior to December 31, 2017) and may not qualify as a REIT for four subsequent taxable years.years that are subsequently taxable. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes as well as to federal income and excise taxes on our undistributed taxable income.
At December 31, 2017,2019, all of our 120117 hotel properties were leased or owned by Ashford TRS (our taxable REIT subsidiaries). Ashford TRS recognized net book income of $4.2$7.3 million, $13.6$21.1 million and $23.4$4.2 million for the years ended December 31, 2019, 2018 and 2017, 2016 and 2015, respectively.

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The following table reconciles the income tax expense at statutory rates to the actual income tax (expense) benefit recorded (in thousands):
 Year Ended December 31,
 2019 2018 2017
Income tax (expense) benefit at federal statutory income tax rate of 21% in 2019 and 2018 and 35% in 2017$(1,539) $(4,435) $(1,478)
State income tax (expense) benefit, net of U.S. federal income tax benefit(475) (698) 160
Permanent differences(310) (128) (338)
Revaluation of deferred tax assets and liabilities related to the 2017 Tax Act(1)

 
 (5,242)
Provision to return adjustment entirely offset by change in valuation allowance(325) (230) 957
Gross receipts and margin taxes(923) (950) (913)
Interest and penalties32
 (11) (49)
Valuation allowance2,322
 3,670
 9,121
Total income tax (expense) benefit$(1,218) $(2,782) $2,218
 Year Ended December 31,
 2017 2016 2015
Income tax (expense) benefit at federal statutory income tax rate of 35%$(1,478) $(4,764) $(8,205)
State income tax (expense) benefit, net of federal income tax benefit160
 (742) (827)
Permanent differences(338) (798) (388)
Revaluation of deferred tax assets and liabilities related to the 2017 Tax Act(1)
(5,242) 
 
Provision to return adjustment entirely offset by change in valuation allowance957
 
 
Gross receipts and margin taxes(913) (692) (886)
Interest and penalties(49) (7) (14)
Valuation allowance9,121
 5,471
 5,610
Total income tax (expense) benefit$2,218
 $(1,532) $(4,710)

________
(1) Partially offset within change in valuation allowance.
The components of income tax (expense) benefit from continuing operations are as follows (in thousands):
 Year Ended December 31,
 2019 2018 2017
Current:     
Federal$(48) $(1,195) $5,264
State(1,329) (1,452) (722)
Total current income tax (expense) benefit(1,377) (2,647) 4,542
Deferred:     
Federal126
 (39) (2,192)
State33
 (96) (132)
Total deferred income tax (expense) benefit159
 (135) (2,324)
Total income tax (expense) benefit$(1,218) $(2,782) $2,218

 Year Ended December 31,
 2017 2016 2015
Current:     
Federal$5,264
 $(605) $(3,377)
State(722) (1,229) (1,225)
Total current4,542
 (1,834) (4,602)
Deferred:     
Federal(2,192) 278
 (30)
State(132) 24
 (78)
Total deferred(2,324) 302
 (108)
Total income tax (expense) benefit$2,218
 $(1,532) $(4,710)
For the years ended December 31, 20172019, 20162018 and 20152017 income tax expense includes interest and penalties paid to taxing authorities of $56,000, $11,000 and $49,000, $7,000 and $14,000, respectively. Additionally, in 2019 we received interest income of $88,000 included in income tax expense. At December 31, 20172019 and 2016,2018, we determined that there were no0 amounts to accrue for interest and penalties due to taxing authorities.


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At December 31, 20172019 and 2016,2018, our deferred tax asset (liability) and related valuation allowance consisted of the following (in thousands):
 December 31,
 2019 2018
Allowance for doubtful accounts$150
 $114
Unearned income2,525
 1,801
Federal and state net operating losses2,458
 2,342
Capital loss carryforward5,436
 
Accrued expenses1,723
 1,710
Prepaid expenses(4,823) (4,848)
Tax property basis less than book basis(3,355) (1,840)
Tax derivatives basis greater than book basis2,281
 1,612
Investment in Ashford, Inc.
 7,197
Other194
 664
Deferred tax asset (liability)6,589
 8,752
Valuation allowance(7,712) (10,034)
Net deferred tax asset (liability)$(1,123) $(1,282)
 December 31,
 2017 2016
Allowance for doubtful accounts$168
 $260
Unearned income1,926
 2,764
Unfavorable management contract liability
 516
Federal and state net operating losses4,153
 10,841
Accrued expenses1,693
 2,582
Prepaid expenses(4,666) (4,591)
Alternative minimum tax credit
 2,005
Tax property basis less than book basis(846) (1,379)
Tax derivatives basis greater than book basis2,034
 2,851
Other623
 681
Deferred tax asset (liability)5,085
 16,530
Valuation allowance(6,232) (15,353)
Net deferred tax asset (liability)$(1,147) $1,177

At December 31, 2017, Ashford TRS2019, we had net operating loss carryforwards for U.S. federal income tax purposes of $17.4$11.7 million, which begin to expire in 2029, and are available to offset future taxable income, if any, through 2034. Approximately $10.1 million2020. The majority of the $17.4$11.7 million of net operating loss carryforwards isare attributable to acquired subsidiaries and subject to substantial limitation on their use. At December 31, 2017,2019, Ashford Hospitality Trust, Inc., our REIT, had net operating loss carryforwards for U.S. federal income tax purposes of $425.0$562.0 million, based on the latest filed tax return, which begin to expire in 2023,2024, and are available to offset future taxable income, if any, through 2035.2037.
At December 31, 20172019 and 2016,2018, we maintained a valuation allowance of $6.2$7.7 million and $15.4$10.0 million, respectively. At December 31, 20172019 and 2016,2018, we fullyhave reserved thecertain deferred tax assets of several of our TRS’sTRS entities as we believe it is more likely than not that these deferred tax assets will not be realized. We considered all available evidence, both positive and negative. We concluded that the objectively verifiable negative evidence of a history of consolidated losses and the limitations imposed by the Internal Revenue Code on the utilization of net operating losses of acquired subsidiaries outweigh the positive evidence. We believe this treatment is appropriate considering the nature of the intercompany transactions and leases between the REIT and its subsidiaries and that the current level of taxable income at the TRS is primarily attributable byto our current transfer pricing arrangements. The transfer pricing arrangements are updatedrenewed upon the expiration and renewalexpiration. A significant number of the intercompany leases startingwere renewed in 2017 and 2018. The intercompany rents are determined in accordance with the arms'arms’ length transfer pricing standard, taking into account the cost of ownership to the REIT among other factors. We do not recognize deferred tax assets and a valuation allowance for the REIT since the REIT distributes its taxable income as dividends to stockholders, and in turn, the stockholders incur income taxes on those dividends.
The following table summarizes the changes in the valuation allowance (in thousands):
 Year Ended December 31,
 2019 2018 2017
Balance at beginning of year$10,034
 $6,232
 $15,353
Additions
 4,766
 2,053
Deductions(2,322) (964) (11,174)
Balance at end of year$7,712
 $10,034
 $6,232
 Year Ended December 31,
 2017 2016 2015
Balance at beginning of year$15,353
 $20,670
 $29,335
Additions2,053
 2,169
 4,774
Deductions(11,174) (7,486) (13,439)
Balance at end of year$6,232
 $15,353
 $20,670

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On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (“Tax Reform”) into legislation. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. In the case of U.S. federal income taxes, the enactment date is the date the bill becomes law (i.e., upon presidential signature). With respect to this legislation, in December of 2017 we expectrecorded a one-time tax benefit of approximately $1.1 million, due to a re-measurement of deferred tax assets and liabilities resulting from the decrease in the corporate FederalU.S. federal income tax rate from 35% to 21% as well as the refund of existing credits against Alternative Minimum Tax. We are in the process of analyzing certain other provisions of this legislation which may impact our effective tax rate. Additionally on December 22, 2017, the SEC staff issued

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Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the estimated tax impacts related to the revaluation of deferred tax assets and liabilities as well as tax refunds and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these estimated amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of theWe finalized our accounting for Tax Reform Act. The accounting is expected to be complete on or before the date the 2017 U.S. income tax returns are filed in 2018.as of December 31, 2018 with no material adjustments.
17. Income (Loss) Per Share20. Deferred Costs, net
TheDeferred costs, net consist of the following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts)thousands):
 December 31,
 2019 2018
Deferred franchise fees$4,811
 $4,571
Deferred loan costs
 816
Total costs4,811
 5,387
Accumulated amortization(1,914) (1,938)
Deferred costs, net$2,897
 $3,449

 Year Ended December 31,
 2017 2016 2015
Income (loss) attributable to common stockholders – Basic and diluted:     
Income (loss) from continuing operations attributable to the Company$(67,008) $(46,285) $270,939
Less: Dividends on preferred stocks(44,761) (36,272) (33,962)
Less: Extinguishment of issuance costs upon redemption of Series E preferred stock(10,799) (6,124) 
Less: Dividends on common stock(45,752) (45,388) (46,498)
Less: Dividends on unvested performance stock units(393) (161) 
Less: Dividends on unvested restricted shares(959) (743) (692)
Less: Undistributed (income) from continuing operations allocated to unvested shares
 
 (2,390)
Undistributed income (loss)(169,672) (134,973) 187,397
Add back: Dividends on common stock45,752
 45,388
 46,498
Distributed and undistributed income (loss) from continuing operations - basic$(123,920) $(89,585) $233,895
Add back: Income from continuing operations allocated to operating partnership units
 
 35,503
Distributed and undistributed net income (loss) from continuing operations - diluted$(123,920) $(89,585) $269,398
      
Weighted average common shares outstanding:     
Weighted average common shares outstanding - basic95,207
 94,426
 96,290
Effect of assumed conversion of operating partnership units
 
 18,591
Weighted average common shares outstanding - diluted95,207
 94,426
 114,881
      
Basic income (loss) per share:     
Net income (loss) allocated to common stockholders per share$(1.30) $(0.95) $2.43
      
Diluted income (loss) per share:     
Net income (loss) allocated to common stockholders per share$(1.30) $(0.95) $2.35

21. Intangible Assets, net and Intangible Liabilities, net
Intangible assets, net and intangible liabilities, net consisted of the following (in thousands):
106
 Intangible Assets, net Intangible Liabilities, net
 December 31, December 31,
 2019 2018 2019 2018
Cost$797
 $10,276
 $2,723
 $16,846
Accumulated amortization
 (452) (386) (1,363)
 $797
 $9,824
 $2,337
 $15,483

Prior to January 1, 2019, the intangible assets and intangible liabilities included the above-market rate leases (liability) and below-market rate leases (asset) that were determined based on the comparison of rent due under the ground lease contracts assumed in the acquisitions to market rates for the remaining duration of the lease contracts and are amortized over their respective ground lease terms with expiration dates ranging from 2024 to 2114. For the years ended December 31, 2019, 2018 and 2017 we recorded $81,000, $82,000, and $82,000 of other revenue related to leases where we are the lessor. For the years ended December 31, 2018 and 2017, net amortization related to intangibles resulted in a reduction in lease expense of $155,000 and $156,000, respectively, related to leases where we are the lessee.
Following the adoption of ASU 2016-02 on January 1, 2019, we derecognized the intangible assets and intangible liabilities associated with above/below market-rate leases where we are the lessee in the amount of $9.0 million and $13.0 million, respectively. The carrying amount of the ROU assets was then adjusted by the corresponding amount. See note 6.
As of December 31, 2019, intangible assets represents the acquisition of the permanent exclusive docking easement for riverfront land located in front of the Hyatt Savannah hotel in Savannah, Georgia. This intangible asset is not subject to amortization and has a carrying value of $797,000 as of December 31, 2019.
As of December 31, 2019, intangible liabilities, net represents below market rate leases where the Company is the lessor.

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Due to their anti-dilutive effect,Estimated future amortization for intangible liabilities for each of the computation of diluted income (loss) per share does not reflect the adjustments for the following itemsnext five years and thereafter is as follows (in thousands):
2020$80
202180
202280
202380
202436
Thereafter1,981
Total$2,337
 Year Ended December 31,
 2017 2016 2015
Income (loss) from continuing operations allocated to common stockholders is not adjusted for:     
Income (loss) allocated to unvested restricted shares$959
 $743
 $3,082
Income (loss) allocated to unvested performance stock units393
 161
 
Income (loss) attributable to redeemable noncontrolling interests in operating partnership(21,642) (12,483) 
Total$(20,290) $(11,579) $3,082
      
Weighted average diluted shares are not adjusted for:     
Effect of unvested restricted shares376
 373
 485
Effect of unvested performance stock units258
 102
 
Effect of assumed conversion of operating partnership units17,342
 18,727
 
Total17,976
 19,202
 485

18. 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 December 31, 2017 and 2016, all of our hotel properties were domestically located.
19. Related Party Transactions
As of December 31, 2017, we have management agreements with parties owned by our Chairman and our Chairman Emeritus. Under the agreements, we pay Remington Lodging a) monthly property management fees equal to the greater of $13,000 (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria are met, b) project management fees of up to 4% of project costs, c) market service fees including purchasing, design and construction management not to exceed 16.5% of project budget cumulatively, including project management fees, and d) other general and administrative expense reimbursements primarily related to accounting services. This related party allocates such charges to us based on various methodologies, including headcount and actual amounts incurred.
At December 31, 2017, the related party managed 82 of our 120 hotel properties and the WorldQuest condominium properties included in continuing operations and we incurred the following fees (including discontinued operations) related to the management agreements with the related party (in thousands):
 Year Ended December 31,
 2017 2016 2015
Property management fees, including incentive property management fees$30,629
 $31,164
 $29,004
Market service fees21,315
 18,751
 14,291
Corporate general and administrative and fixed asset reimbursements5,652
 5,435
 4,677
Total$57,596
 $55,350
 $47,972
Management agreements with the related party include exclusivity clauses that require us to engage such related party, unless our independent directors either (i) unanimously vote to hire a different manager or developer or (ii) by a majority vote elect not to engage such related party because either special circumstances exist such that it would be in the best interest of our Company not to engage such related party, or, based on the related party’s prior performance, it is believed that another manager or developer could perform the management, development or other duties materially better.
Upon formation, we also agreed to indemnify certain related parties, including our Chairman and our Chairman Emeritus, who contributed hotel properties in connection with our initial public offering in exchange for operating partnership units, against

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


the income tax such related parties may incur if we dispose of one or more of those contributed properties under the terms of the agreement.
Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor, and as a result, we pay advisory fees to Ashford LLC. We are required to pay Ashford LLC a quarterly base fee that is a percentage of our total market capitalization on a declining sliding scale plus the Key Money Asset Management Fee (defined in our advisory agreement as the aggregate gross asset value of all key money assets multiplied by 0.70%), subject to a minimum quarterly base fee, as payment for managing our day-to-day operations in accordance with our investment guidelines. Total market capitalization includes the aggregate principal amount of our consolidated indebtedness (including our proportionate share of debt of any entity that is not consolidated but excluding our joint venture partners’ proportionate share of consolidated debt). The range of base fees on the scale are between 0.70% and 0.50% per annum for total market capitalization that ranges from less than $6.0 billion to greater than $10.0 billion. At December 31, 2017, the quarterly base fee was 0.70% based on our current market capitalization. We are also required to pay Ashford LLC an incentive fee that is measured annually. Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we will pay Ashford LLC an incentive fee over the following three years, subject to the FCCR Condition, as defined in the advisory agreement. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, insurance claims advisory and asset management services, as specified in the advisory agreement. We also record equity-based compensation expense for equity grants of common stock and LTIP units awarded to our officers and employees of Ashford LLC in connection with providing advisory services equal to the fair value of the award in proportion to the requisite service period satisfied during the period.
The following table summarizes the advisory services fees incurred (in thousands):
 Year Ended December 31,
 2017 2016 2015
Advisory services fee     
Base advisory fee$34,650
 $34,589
 $33,833
Reimbursable expenses (1)
7,472
 5,917
 6,471
Equity-based compensation (2)
11,077
 8,429
 2,719
Incentive fee
 5,426
 
Total advisory services fee$53,199
 $54,361
 $43,023
________
(1)
Reimbursable expenses include overhead, internal audit, insurance claims advisory and asset management services.
(2)
Equity-based compensation is associated with equity grants of Ashford Trust’s common stock, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.
In connection with our acquisition of the Le Pavillon in 2015 and Ashford Inc.’s engagement to provide hotel advisory services to us, Ashford Inc. agreed to provide $4.0 million of key money consideration to purchase furniture, fixtures and equipment (“FF&E”). During the fourth quarter of 2016, the $4.0 million of key money consideration was invested in FF&E by Ashford Inc. to be used by Ashford Trust, which represented all of the key money consideration for Le Pavillon. The hotel advisory services and the lease are considered a multiple element arrangement, in accordance with the applicable accounting guidance. As such, a portion of the base advisory fee is allocated to lease expense equal to the estimated fair value of the lease payments that would have been made. Lease expense of $633,000 and $112,000 was recognized for the years ended December 31, 2017 and 2016, respectively, and was included in “other” hotel expense in the consolidated statements of operations.
In accordance with our advisory agreement, our advisor, or entities in which our advisor has an interest, have a right to provide products or services to our hotel properties, provided such transactions are evaluated and approved by our independent directors. The following table summarizes the entities in which our advisor has an interest with which we or our hotel properties contracted for products and services, the fees paid by us for those services, the applicable classification on our consolidated financial statements and the amount payable to each entity (included in “due to Ashford Inc.”) (in thousands):

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


   Year Ended December 31, 2017As of December 31, 2017
Company Product or ServiceTransaction Amount
Investments in Hotel Properties, net (1)
 
Indebtedness, net (2)
 Other Revenue Other Hotel Expenses Corporate, General and AdministrativeDue to (from) Ashford Inc.
OpenKey Mobile key app$60
$
 $
 $
 $60
 $
$8
Pure Rooms “Allergy friendly” premium rooms1,309
1,309
 
 
 
 
296
Lismore Capital Mortgage placement services913

 (913) 
 
 

J&S Audio Visual Commissions from audio visual services66

 
 66
 
 
(52)
AIM Cash management services1,976

 
 
 
 1,976
347
________
(1)
Recorded in furniture, fixtures and equipment and depreciated over the estimated useful life.
(2)
Recorded as deferred loan costs, which are included in “indebtedness, net” on our consolidated balance sheets and amortized over the initial term of the applicable loan agreement.
At December 31, 2017 and 2016, we had payables of $14.5 million and $15.7 million, respectively, included in due to Ashford Inc., net, associated with advisory services and hotel services fees payable.
On July 31, 2015, we entered into a block trade with an unaffiliated third party, pursuant to a sale arrangement between the Company, Ashford Inc. and Ashford Prime. The block trade included the repurchase and retirement of approximately 5.8 million shares of our common stock at a price of $9.00 per share for a total cost of approximately $51.8 million. The sale arrangement and block trade were evaluated and approved by the independent members of our board of directors. The block trade purchase price and other terms of the sale arrangement were the result of negotiations with the third party. We did not receive any concessions or economic benefits from Ashford Inc. pertaining to our current contractual arrangements with Ashford Inc. in connection with this block trade. The block trade settled on August 4, 2015.
Certain employees of Remington Lodging, who perform work on behalf of Ashford Trust, were granted approximately 131,000, 173,000 and 147,000 shares of restricted stock under the Ashford Trust Stock Plan during 2017, 2016 and 2015, 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 $645,000, $639,000 and $213,000 was recognized for the year ended December 31, 2017, 2016 and 2015, respectively. The unamortized fair value of the grants was $1.1 million as of December 31, 2017, which will be recognized over a period of 2.3 years, subject to future mark to market adjustments.
20.22. Concentration of Risk
Our investments are primarily concentrated within the hotel industry. Our investment strategy is to acquire full servicepredominantly focused on investing in upper upscale full-service hotels in the upscale and upper upscale segments in domestic and international marketsU.S that have RevPAR generally less than twice the national average. During 2017,2019, approximately 10%11% of our total hotel revenue was generated from nine9 hotel properties located in the Washington D.C. area. In addition, all hotel properties securing our mortgage loans are located domestically at December 31, 2017.2019. Accordingly, adverse conditions in the hotel industry will have a material adverse effect on our operating and investment revenues and cash available for distribution to stockholders.
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents. We are exposed to credit risk with respect to cash held at various financial institutions that are in excess of the FDIC insurance limits of $250,000, U.S. government treasury bill holdings and amounts due or payable under our derivative contracts. At December 31, 2017,2019, we have exposure risk related to our derivative contracts. Our counterparties are investment grade financial institutions.

23. Segment Reporting
We operate in 1 business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers 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. As of December 31, 2019 and 2018, all of our hotel properties were domestically located.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)




21.24. Selected Quarterly Financial Data (Unaudited)
The following is a summary of the quarterly results of operations for the years ended December 31, 20172019 and 20162018 (in thousands, except per share data):
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Full
Year
 
2019          
Total revenue$358,718
 $415,148
 $374,237
 $354,656
 $1,502,759
 
Total operating expenses334,966
 366,699
 347,161
 365,330
 1,414,156
 
Gain (loss) on sale of assets and hotel properties233
 328
 2,362
 23,203
 26,126
 
Operating income (loss)$23,985
 $48,777
 $29,438
 $12,529
 $114,729
 
Net income (loss)$(46,622) $(21,352) $(39,086) $(35,619) $(142,679) 
Net income (loss) attributable to the Company$(38,017) $(16,282) $(31,177) $(28,159) $(113,635) 
Net income (loss) attributable to common stockholders$(48,661) $(26,926) $(41,822) $(38,803) $(156,212) 
Diluted income (loss) attributable to common stockholders per share$(0.49) $(0.27) $(0.42) $(0.39) $(1.58)
(1 
) 
Weighted average diluted common shares99,407
 99,942
 99,971
 99,968
 99,837
 
2018          
Total revenue$342,207
 $389,164
 $355,930
 $343,488
 $1,430,789
 
Total operating expenses318,945
 346,129
 326,601
 349,175
 1,340,850
 
Gain (loss) on sale of assets and hotel properties(9) $412
 $(9) $81
 $475
 
Operating income (loss)$23,253
 $43,447
 $29,320
 $(5,606) $90,414
 
Net income (loss)$(32,649) $(23,351) $(34,261) $(66,048) $(156,309) 
Net income (loss) attributable to the Company$(26,271) $(18,306) $(27,589) $(54,800) $(126,966) 
Net income (loss) attributable to common stockholders$(36,915) $(28,950) $(38,234) $(65,444) $(169,543) 
Diluted income (loss) attributable to common stockholders per share$(0.39) $(0.30) $(0.40) $(0.66) $(1.75)
(1 
) 
Weighted average diluted common shares95,367
 96,889
 97,467
 99,324
 97,282
 
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 
Full
Year
 
2017          
Total revenue$353,709
 $390,670
 $353,325
 $341,566
 $1,439,270
 
Total operating expenses325,447
 332,185
 323,709
 322,924
 1,304,265
 
Operating income (loss)$28,262
 $58,485
 $29,616
 $18,642
 $135,005
 
Income (loss) from continuing operations$(31,937) $10,428
 $(28,726) $(38,525) $(88,760) 
Income (loss) from continuing operations attributable to the Company$(25,413) $10,184
 $(21,808) $(29,971) $(67,008) 
Income (loss) from continuing operations attributable to common stockholders$(36,369) $(772) $(37,755) $(47,672) $(122,568) 
Diluted income (loss) from continuing operations attributable to common stockholders per share$(0.39) $(0.01) $(0.40) $(0.50) $(1.30)
(1 
) 
Weighted average diluted common shares94,840
 95,320
 95,332
 95,328
 95,207
 
2016          
Total revenue$367,772
 $410,670
 $371,931
 $341,670
 $1,492,043
 
Total operating expenses326,369
 341,203
 330,857
 337,910
 1,336,339
 
Operating income (loss)$41,403
 $69,467
 $41,074
 $3,760
 $155,704
 
Income (loss) from continuing operations$(12,139) $35,135
 $(25,138) $(56,640) $(58,782) 
Income (loss) from continuing operations attributable to the Company$(9,989) $30,753
 $(20,145) $(46,904) $(46,285) 
Income (loss) from continuing operations attributable to common stockholders$(18,479) $22,262
 $(35,144) $(57,320) $(88,681) 
Diluted income (loss) from continuing operations attributable to common stockholders per share$(0.20) $0.23
 $(0.37) $(0.61) $(0.95)
(1 
) 
Weighted average diluted common shares94,136
 94,474
 94,531
 94,585
 94,426
 

_________________
(1) The sum of the diluted income (loss) from continuing operations attributable to common stockholders per share for the four quarters in 20172019 and 20162018 differs from the annual diluted income (loss) from continuing operations attributable to common stockholders per share due to the required method of computing the weighted average diluted common shares in the respective periods.
22.25. Subsequent EventEvents
On January 17, 2018,9, 2020, we refinanced our $376.8$43.8 million mortgage loan, secured by the Le Pavillon in New Orleans, Louisiana. In connection with the refinance we repaid $6.8 million on the existing loan. The new mortgage loan totaled $395.0totals $37.0 million. The new mortgage loan has a two-year initial termis interest only and fiveprovides for an interest rate of LIBOR + 3.4%. The stated maturity is January 2023 with 2 one-year extension options, subject to the satisfaction of certain conditions. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.92%. The Mortgage loan is secured by eight hotels: Embassy Suites Portland, Embassy Suites Crystal City, Embassy Suites Orlando, Embassy Suites Santa Clara, Crowne Plaza Key West, Hilton Costa Mesa, Sheraton Minneapolis, and Historic Inns of Annapolis.the Le Pavillon.
On February 20, 2018, weMarch 9, 2020, the Company completed the sale of the SpringHill Suites Glen AllenCrowne Plaza in Annapolis, Maryland for approximately $10.9$5.1 million. As of December 31, 2019, the carrying value of the building and FF&E was approximately $5.3 million at December 31, 2019. This hotel property is subject to a ground lease with a below-market component with a carrying value of $(3.2) million at December 31, 2019. The combined carrying value of the hotel property at December 31, 2019 was approximately $2.2 million.


Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 20172019 (“Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective (i) to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms; and (ii) to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of our internal control over financial reporting. The internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and our expenditures are being made only in accordance with authorizations of management and our directors and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017.2019. In making the assessment of the effectiveness of our internal control over financial reporting, management has utilized the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, (2013 framework) (“COSO”).
Based on management’s assessment of these criteria, we concluded that, as of December 31, 2017,2019, our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting as of December 31, 20172019 has been audited by BDO USA, LLP, an independent registered public accounting firm, as stated in their report which appears in this Annual Report on Form 10-K.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting that occurred during the fiscal quarter ended December 31, 2017,2019, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.



Report of Independent Registered Public Accounting Firm


TheShareholders and Board of Directors and Stockholders
Ashford Hospitality Trust, Inc. and subsidiaries
Dallas, Texas
Opinion on Internal Control over Financial Reporting
We have audited Ashford Hospitality Trust Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2017,2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2019, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company and subsidiaries as of December 31, 20172019 and 2016,2018, the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2017,2019, and the related notes and financial statement schedule and our report dated March 14, 201812, 2020 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ BDO USA, LLP
Dallas, Texas
March 14, 201812, 2020

Item 9B.Other Information
None.
PART III
Item 10.Directors, Executive Officer,Officers and Corporate Governance
The required information is incorporated by reference from the Proxy Statement pertaining to our 20182020 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
Item 11.Executive Compensation
The required information is incorporated by reference from the Proxy Statement pertaining to our 20182020 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The required information is incorporated by reference from the Proxy Statement pertaining to our 20182020 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
Item 13.Certain Relationships and Related Transactions, and Director Independence
The required information is incorporated by reference from the Proxy Statement pertaining to our 20182020 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
Item 14.Principal Accountant Fees and Services
The required information is incorporated by reference from the Proxy Statement pertaining to our 20182020 Annual Meeting of Stockholders, to be filed with the SEC pursuant to Regulation 14A promulgated under the Exchange Act not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
PART IV


Item 15.Exhibits, Financial Statement and Schedules
(a)Financial Statements and Schedules
(a), (c) Financial Statement Schedules
See Item 8, “Financial Statements and Supplementary Data,” on pages 67 through 110123 hereof, for a list of our consolidated financial statements and report of independent registered public accounting firm.
The following financial statement schedule is included herein on pages 115133 through 119136 hereof.
Schedule III – Real Estate and Accumulated Depreciation
All other financial statement schedules have been omitted because such schedules are not required under the related instructions, such schedules are not significant, or the required information has been disclosed elsewhere in the consolidated financial statements and related notes thereto.

(b)Exhibits
Exhibits required by Item 601 of Regulation S-K: The exhibits filed in response to this item are listed in the Exhibit Index on pages 120 through 126.
Item 16. Form 10-K Summary
None.

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 14, 2018.
ASHFORD HOSPITALITY TRUST, INC.
By:/s/ DOUGLAS A. KESSLER
Douglas A. Kessler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on behalf of the Registrant in the capacities and on the dates indicated.
SignatureTitleDate
/s/ MONTY J. BENNETT
Chairman of the Board of DirectorsMarch 14, 2018
Monty J. Bennett
/s/ DOUGLAS A. KESSLERPresident and Chief Executive Officer (Principal Executive Officer)March 14, 2018
Douglas A. Kessler
/s/ DERIC S. EUBANKS
Chief Financial Officer (Principal Financial Officer)March 14, 2018
Deric S. Eubanks
/s/ MARK L. NUNNELEY
Chief Accounting Officer (Principal Accounting Officer)March 14, 2018
Mark L. Nunneley
/s/ BENJAMIN J. ANSELL, M.D.
DirectorMarch 14, 2018
Benjamin J. Ansell, M.D.
/s/ FREDERICK J. KLEISNER
DirectorMarch 14, 2018
Frederick J. Kleisner
/s/ AMISH GUPTA
DirectorMarch 14, 2018
Amish Gupta
/s/ KAMAL JAFARNIA
DirectorMarch 14, 2018
Kamal Jafarnia
/s/ PHILLIP S. PAYNE
DirectorMarch 14, 2018
Philip S. Payne
/s/ ALAN L. TALLIS
DirectorMarch 14, 2018
Alan L. Tallis


SCHEDULE III
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2017
(dollars in thousands)
Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost 
Costs Capitalized
Since Acquisition
 Gross Carrying Amount At Close of Period        
Hotel Property Location Encumbrances Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Total 
Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Embassy Suites Austin, TX $23,810
 $1,204
 $9,388
 $193
 $7,000
 $1,397
 $16,388
 $17,785
 $7,643
 08/1998   (1),(2),(3)
Embassy Suites Dallas, TX 15,760
 1,878
 8,907
 238
 7,277
 2,116
 16,184
 18,300
 8,183
 12/1998   (1),(2),(3)
Embassy Suites Herndon, VA 17,639
 1,303
 9,836
 277
 9,460
 1,580
 19,296
 20,876
 8,826
 12/1998   (1),(2),(3)
Embassy Suites Las Vegas, NV 30,860
 3,307
 16,952
 397
 14,909
 3,704
 31,861
 35,565
 13,565
 05/1999   (1),(2),(3)
Embassy Suites Flagstaff, AZ 14,814
 1,267
 4,278
 
 4,887
 1,267
 9,165
 10,432
 4,701
    10/2003 (1),(2),(3)
Embassy Suites Houston, TX 18,150
 1,799
 10,404
 
 7,120
 1,799
 17,524
 19,323
 6,290
    03/2005 (1),(2),(3)
Embassy Suites West Palm Beach, FL 20,180
 3,277
 13,949
 
 9,630
 3,277
 23,579
 26,856
 10,033
    03/2005 (1),(2),(3)
Embassy Suites Philadelphia, PA 34,513
 5,791
 34,819
 
 14,928
 5,791
 49,747
 55,538
 15,962
    12/2006 (1),(2),(3)
Embassy Suites Walnut Creek, CA 36,342
 7,452
 25,334
 
 16,224
 7,452
 41,558
 49,010
 12,016
    12/2006 (1),(2),(3)
Embassy Suites Arlington, VA 44,802
 36,065
 41,588
 
 8,954
 36,065
 50,542
 86,607
 16,468
    04/2007 (1),(2),(3)
Embassy Suites Portland, OR 75,360
 11,110
 60,048
 
 8,927
 11,110
 68,975
 80,085
 21,672
    04/2007 (1),(2),(3)
Embassy Suites Santa Clara, CA 62,473
 8,948
 46,239
 
 9,158
 8,948
 55,397
 64,345
 15,162
    04/2007 (1),(2),(3)
Embassy Suites Orlando, FL 15,373
 5,674
 21,593
 
 10,148
 5,674
 31,741
 37,415
 8,991
    04/2007 (1),(2),(3)
Hilton Garden Inn Jacksonville, FL 11,980
 1,751
 9,164
 
 5,295
 1,751
 14,459
 16,210
 4,599
    11/2003 (1),(2),(3)
Hilton Garden Inn Austin, TX 44,963
 7,605
 48,725
 
 7,734
 7,605
 56,459
 64,064
 8,855
    03/2015 (1),(2),(3)
Hilton Garden Inn Baltimore, MD 19,337
 4,027
 20,199
 
 65
 4,027
 20,264
 24,291
 1,709
    03/2015 (1),(2),(3)
Hilton Garden Inn Virginia Beach, VA 24,289
 4,101
 26,329
 
 (68) 4,101
 26,261
 30,362
 2,101
    03/2015 (1),(2),(3)
Hilton Garden Inn Wisconsin Dells, WI 12,000
 867
 14,318
 
 1,678
 867
 15,996
 16,863
 1,584
    08/2015 (1),(2),(3)
Hilton Ft. Worth, TX 51,023
 4,538
 13,922
 
 18,649
 4,538
 32,571
 37,109
 15,597
    03/2005 (1),(2),(3)
Hilton Houston, TX 20,330
 2,200
 13,247
 
 9,764
 2,200
 23,011
 25,211
 10,012
    03/2005 (1),(2),(3)
Hilton St. Petersburg, FL 49,660
 2,991
 13,907
 
 20,367
 2,991
 34,274
 37,265
 15,702
    03/2005 (1),(2),(3)
Hilton Santa Fe, NM 17,909
 7,004
 10,689
 
 11,019
 7,004
 21,708
 28,712
 10,190
    12/2006 (1),(2),(3)
Hilton Bloomington, MN 52,644
 5,685
 59,139
 
 14,055
 5,685
 73,194
 78,879
 24,690
    04/2007 (1),(2),(3)
Hilton Costa Mesa, CA 64,960
 12,917
 91,791
 
 16,729
 12,917
 108,520
 121,437
 35,054
    04/2007 (1),(2),(3)
Hilton Boston, MA 97,000
 62,555
 134,407
 
 12,165
 62,555
 146,572
 209,127
 12,768
    03/2015 (1),(2),(3)
Hilton Parsippany, NJ 52,195
 7,293
 58,098
 
 10,358
 7,293
 68,456
 75,749
 14,022
    03/2015 (1),(2),(3)
Hilton Tampa, FL 21,067
 5,206
 21,186
 
 9,315
 5,206
 30,501
 35,707
 3,590
    03/2015 (1),(2),(3)
Hampton Inn Lawrenceville, GA 5,628
 697
 3,808
 
 3,069
 697
 6,877
 7,574
 2,543
    11/2003 (1),(2),(3)
Hampton Inn Evansville, IN 11,330
 1,301
 5,034
 
 2,638
 1,301
 7,672
 8,973
 3,577
    09/2004 (1),(2),(3)
Hampton Inn Parsippany, NJ 22,010
 3,268
 24,306
 
 2,828
 3,268
 27,134
 30,402
 3,065
    03/2015 (1),(2),(3)
Hampton Inn Buford, GA 8,964
 1,168
 5,338
 
 1,274
 1,168
 6,612
 7,780
 2,636
    07/2004 (1),(2),(3)
Hampton Inn Phoenix, AZ 11,267
 853
 10,145
 
 101
 853
 10,246
 11,099
 809
    06/2015 (1),(2),(3)
Hampton Inn - Waterfront Pittsburgh, PA 12,786
 2,335
 18,663
 
 (517) 2,335
 18,146
 20,481
 1,312
    06/2015 (1),(2),(3)
Hampton Inn - Washington Pittsburgh, PA 17,341
 2,760
 19,739
 
 1,351
 2,760
 21,090
 23,850
 2,987
    06/2015 (1),(2),(3)
Hampton Inn Columbus, OH 21,017
 1,789
 27,210
 
 2,126
 1,789
 29,336
 31,125
 4,195
    06/2015 (1),(2),(3)

Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost 
Costs Capitalized
Since Acquisition
 Gross Carrying Amount At Close of Period        
Hotel Property Location Encumbrances Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Total 
Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Marriott Beverly Hills, CA 97,898
 6,510
 22,061
 
 31,305
 6,510
 53,366
 59,876
 22,959
    03/2005 (1),(2),(3)
Marriott Durham, NC 23,714
 1,794
 25,056
 
 12,513
 1,794
 37,569
 39,363
 11,181
    02/2006 (1),(2),(3)
Marriott Arlington, VA 95,207
 20,637
 101,376
 
 54,444
 20,637
 155,820
 176,457
 49,996
    07/2006 (1),(2),(3)
Marriott Bridgewater, NJ 64,520
 5,059
 89,268
 
 4,430
 5,059
 93,698
 98,757
 27,437
    04/2007 (1),(2),(3)
Marriott Dallas, TX 24,624
 2,701
 30,893
 
 14,693
 2,701
 45,586
 48,287
 13,292
    04/2007 (1),(2),(3)
Marriott Fremont, CA 60,684
 5,800
 44,200
 
 (1,675) 5,800
 42,525
 48,325
 5,697
    8/2014 (1),(2),(3)
Marriott Memphis, TN 33,300
 6,210
 37,284
 
 1,090
 6,210
 38,374
 44,584
 5,286
    02/2015 (1),(2),(3)
Marriott Irving, TX 72,318
 8,330
 82,272
 
 6,515
 8,330
 88,787
 97,117
 7,514
    03/2015 (1),(2),(3)
Marriott Omaha, NE 45,120
 6,641
 49,887
 
 8,112
 6,641
 57,999
 64,640
 5,873
    03/2015 (1),(2),(3)
Marriott San Antonio, TX 33,329
 9,764
 31,384
 2,024
 1,955
 11,788
 33,339
 45,127
 3,306
    03/2015 (1),(2),(3)
Marriott Sugarland, TX 78,606
 9,047
 84,043
 
 (2,570) 9,047
 81,473
 90,520
 6,230
    03/2015 (1),(2),(3)
SpringHill Suites by Marriott Jacksonville, FL 
 1,348
 7,111
 
 3,455
 1,348
 10,566
 11,914
 3,852
    11/2003 (1),(2),(3)
SpringHill Suites by Marriott Baltimore, MD 14,164
 2,502
 13,206
 
 4,521
 2,502
 17,727
 20,229
 6,961
    05/2004 (1),(2),(3)
SpringHill Suites by Marriott Kennesaw, GA 6,861
 1,106
 5,021
 
 3,223
 1,106
 8,244
 9,350
 2,200
    07/2004 (1),(2),(3)
SpringHill Suites by Marriott Buford, GA 9,879
 1,132
 6,089
 
 1,038
 1,132
 7,127
 8,259
 2,741
    07/2004 (1),(2),(3)
SpringHill Suites by Marriott (5)
 Centreville, VA 5,992
 1,806
 11,712
 (1,806) (11,712) 
 
 
 
    06/2005 (1),(2),(3),(4)
SpringHill Suites by Marriott Charlotte, NC 13,284
 1,235
 6,818
 
 963
 1,235
 7,781
 9,016
 2,746
    06/2005 (1),(2),(3)
SpringHill Suites by Marriott Durham, NC 6,929
 1,090
 3,991
 
 1,097
 1,090
 5,088
 6,178
 1,932
    06/2005 (1),(2),(3)
SpringHill Suites by Marriott Manhattan Beach, CA 24,430
 5,726
 21,187
 
 1,484
 5,726
 22,671
 28,397
 6,776
    04/2007 (1),(2),(3)
SpringHill Suites by Marriott Plymouth Meeting, PA 14,498
 3,210
 24,578
 
 1,768
 3,210
 26,346
 29,556
 7,744
    04/2007 (1),(2),(3)
SpringHill Suites by Marriott (5)
 Glen Allen, VA 7,277
 2,045
 15,802
 (2,045) (15,802) 
 
 
 
    04/2007 (1),(2),(3),(4)
Fairfield Inn by Marriott Kennesaw, GA 5,382
 840
 4,359
 
 865
 840
 5,224
 6,064
 2,079
    07/2004 (1),(2),(3)
Courtyard by Marriott Bloomington, IN 14,520
 900
 10,741
 
 4,303
 900
 15,044
 15,944
 5,617
    09/2004 (1),(2),(3)
Courtyard by Marriott - Tremont Boston, MA 87,253
 24,494
 85,246
 
 13,821
 24,494
 99,067
 123,561
 14,639
    03/2015 (1),(2),(3)
Courtyard by Marriott Columbus, IN 4,981
 673
 4,804
 
 3,984
 673
 8,788
 9,461
 3,236
    09/2004 (1),(2),(3)
Courtyard by Marriott Denver, CO 31,128
 9,342
 29,656
 
 3,049
 9,342
 32,705
 42,047
 5,219
    03/2015 (1),(2),(3)
Courtyard by Marriott Louisville, KY 18,834
 1,352
 12,266
 
 1,632
 1,352
 13,898
 15,250
 5,161
    09/2004 (1),(2),(3)
Courtyard by Marriott Gaithersburg, MD 28,456
 5,128
 30,522
 
 1,318
 5,128
 31,840
 36,968
 2,431
    03/2015 (1),(2),(3)
Courtyard by Marriott Crystal City, VA 43,350
 5,411
 38,610
 
 9,378
 5,411
 47,988
 53,399
 15,108
    06/2005 (1),(2),(3)
Courtyard by Marriott Ft. Lauderdale, FL 21,264
 2,244
 18,520
 
 6,463
 2,244
 24,983
 27,227
 8,260
    06/2005 (1),(2),(3)
Courtyard by Marriott Overland Park, KS 9,144
 1,868
 14,030
 
 5,486
 1,868
 19,516
 21,384
 7,458
    06/2005 (1),(2),(3)
Courtyard by Marriott Savannah, GA 30,892
 6,948
 31,755
 
 (499) 6,948
 31,256
 38,204
 2,414
    03/2015 (1),(2),(3)
Courtyard by Marriott Foothill Ranch, CA 22,150
 2,447
 16,005
 
 3,523
 2,447
 19,528
 21,975
 6,633
    06/2005 (1),(2),(3)
Courtyard by Marriott Alpharetta, GA 20,040
 2,244
 12,345
 
 4,071
 2,244
 16,416
 18,660
 6,005
    06/2005 (1),(2),(3)
Courtyard by Marriott Oakland, CA 23,714
 5,112
 19,429
 
 4,295
 5,112
 23,724
 28,836
 7,307
    04/2007 (1),(2),(3)
Courtyard by Marriott Scottsdale, AZ 16,048
 3,700
 22,134
 
 4,719
 3,700
 26,853
 30,553
 8,561
    04/2007 (1),(2),(3)
Courtyard by Marriott Plano, TX 16,958
 2,115
 22,360
 
 2,286
 2,115
 24,646
 26,761
 7,630
    04/2007 (1),(2),(3)
Courtyard by Marriott Newark, CA 29,993
 2,863
 10,723
 
 3,785
 2,863
 14,508
 17,371
 5,239
    04/2007 (1),(2),(3)
Courtyard by Marriott Manchester, CT 6,530
 1,301
 7,430
 
 2,187
 1,301
 9,617
 10,918
 3,480
    04/2007 (1),(2),(3)
Courtyard by Marriott Basking Ridge, NJ 38,528
 5,419
 45,304
 
 7,413
 5,419
 52,717
 58,136
 15,084
    04/2007 (1),(2),(3)
Courtyard by Marriott Wichita, KS 18,380
 291
 23,090
 
 505
 291
 23,595
 23,886
 3,191
    06/2015 (1),(2),(3)

Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost 
Costs Capitalized
Since Acquisition
 Gross Carrying Amount At Close of Period        
Hotel Property Location Encumbrances Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Total 
Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Courtyard by Marriott - Billerica Boston, MA 29,807
 3,528
 29,352
 
 3,972
 3,528
 33,324
 36,852
 5,780
    06/2015 (1),(2),(3)
Homewood Suites Pittsburgh, PA 25,492
 1,906
 28,093
 
 1,762
 1,906
 29,855
 31,761
 2,473
    06/2015 (1),(2),(3)
Marriott Residence Inn Lake Buena Vista, FL 26,125
 2,555
 20,367
 
 9,280
 2,555
 29,647
 32,202
 9,876
    03/2004 (1),(2),(3)
Marriott Residence Inn Evansville, IN 7,980
 961
 5,972
 
 3,531
 961
 9,503
 10,464
 3,793
    09/2004 (1),(2),(3)
Marriott Residence Inn Orlando, FL 26,712
 6,554
 40,539
 
 11,868
 6,554
 52,407
 58,961
 15,376
    06/2005 (1),(2),(3)
Marriott Residence Inn Falls Church, VA 26,650
 2,752
 34,979
 
 6,167
 2,752
 41,146
 43,898
 13,671
    06/2005 (1),(2),(3)
Marriott Residence Inn San Diego, CA 29,840
 3,156
 29,514
 
 5,671
 3,156
 35,185
 38,341
 13,025
    06/2005 (1),(2),(3)
Marriott Residence Inn Salt Lake City, UT 16,428
 1,897
 16,357
 
 4,440
 1,897
 20,797
 22,694
 8,097
    06/2005 (1),(2),(3)
Marriott Residence Inn Las Vegas, NV 27,394
 18,177
 39,568
 (6,184) (11,655) 11,993
 27,913
 39,906
 5,269
    04/2007 (1),(2),(3)
Marriott Residence Inn Phoenix, AZ 17,868
 4,100
 23,187
 
 6,363
 4,100
 29,550
 33,650
 10,236
    04/2007 (1),(2),(3)
Marriott Residence Inn Plano, TX 12,085
 2,045
 16,869
 
 3,350
 2,045
 20,219
 22,264
 6,867
    04/2007 (1),(2),(3)
Marriott Residence Inn Newark, CA 31,771
 3,272
 11,706
 
 5,070
 3,272
 16,776
 20,048
 6,645
    04/2007 (1),(2),(3)
Marriott Residence Inn Manchester, CT 7,000
 1,462
 8,306
 
 4,244
 1,462
 12,550
 14,012
 4,622
    04/2007 (1),(2),(3)
Marriott Residence Inn Jacksonville, FL 10,216
 1,997
 16,084
 
 5,039
 1,997
 21,123
 23,120
 5,586
    05/2007 (1),(2),(3)
Marriott Residence Inn Stillwater, OK 7,911
 930
 15,070
 
 2,924
 930
 17,994
 18,924
 2,572
    06/2015 (1),(2),(3)
Marriott Residence Inn Tampa, FL 17,293
 2,175
 19,491
 
 3,426
 2,175
 22,917
 25,092
 1,824
    03/2015 (1),(2),(3)
TownePlace Suites by Marriott Manhattan Beach, CA 18,168
 4,805
 17,543
 
 4,606
 4,805
 22,149
 26,954
 6,695
    04/2007 (1),(2),(3)
Ritz-Carlton Atlanta, GA 68,702
 2,477
 80,139
 
 15,250
 2,477
 95,389
 97,866
 7,578
    03/2015 (1),(2),(3)
One Ocean Atlantic Beach, FL 32,574
 5,815
 14,817
 
 26,534
 5,815
 41,351
 47,166
 22,103
    04/2004 (1),(2),(3)
Renaissance Nashville, TN 114,968
 20,671
 158,260
 
 10,347
 20,671
 168,607
 189,278
 14,536
    03/2015 (1),(2),(3)
Renaissance Palm Springs, CA 50,544
 
 74,112
 
 11,174
 
 85,286
 85,286
 7,439
    03/2015 (1),(2),(3)
Sheraton Hotel Ann Arbor, MI 35,200
 4,158
 35,042
 
 (295) 4,158
 34,747
 38,905
 2,685
    06/2015 (1),(2),(3)
Sheraton Hotel Langhorne, PA 10,306
 2,037
 12,424
 
 12,837
 2,037
 25,261
 27,298
 12,030
    07/2004 (1),(2),(3)
Sheraton Hotel Minneapolis, MN 21,591
 2,953
 14,280
 
 10,538
 2,953
 24,818
 27,771
 11,211
    03/2005 (1),(2),(3)
Sheraton Hotel Indianapolis, IN 60,410
 3,100
 22,041
 
 26,023
 3,100
 48,064
 51,164
 21,396
    03/2005 (1),(2),(3)
Sheraton Hotel Anchorage, AK 47,316
 4,023
 39,363
 
 15,475
 4,023
 54,838
 58,861
 18,119
    12/2006 (1),(2),(3)
Sheraton Hotel San Diego, CA 29,185
 7,294
 36,382
 
 8,497
 7,294
 44,879
 52,173
 15,345
    12/2006 (1),(2),(3)
Hyatt Regency Coral Gables, FL 63,379
 4,805
 50,820
 
 15,203
 4,805
 66,023
 70,828
 20,464
    04/2007 (1),(2),(3)
Hyatt Regency Hauppauge, NY 33,486
 6,284
 35,669
 
 (2,062) 6,284
 33,607
 39,891
 4,934
    03/2015 (1),(2),(3)
Hyatt Regency Savannah, GA 69,252
 14,041
 72,721
 
 11,043
 14,041
 83,764
 97,805
 8,765
    03/2015 (1),(2),(3)
Crowne Plaza Key West, FL 72,007
 
 27,514
 
 17,112
 
 44,626
 44,626
 19,709
    03/2005 (1),(2),(3)
Crowne Plaza Annapolis, MD 
 
 9,903
 
 8,810
 
 18,713
 18,713
 3,542
    03/2015 (1),(2),(3)
Annapolis Inn Annapolis, MD 20,234
 3,028
 7,833
 
 9,206
 3,028
 17,039
 20,067
 7,481
    03/2005 (1),(2),(3)
Lakeway Resort & Spa Austin, TX 25,100
 4,541
 28,940
 
 5,296
 4,541
 34,236
 38,777
 6,589
    02/2015 (1),(2),(3)
Silversmith Chicago, IL 21,695
 4,782
 22,398
 
 991
 4,782
 23,389
 28,171
 4,479
    03/2015 (1),(2),(3)
The Churchill Washington, DC 46,456
 25,898
 32,304
 
 12,266
 25,898
 44,570
 70,468
 6,013
    03/2015 (1),(2),(3)
The Melrose Washington, DC 73,261
 29,277
 62,507
 
 (1,283) 29,277
 61,224
 90,501
 4,871
    03/2015 (1),(2),(3)

Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost 
Costs Capitalized
Since Acquisition
 Gross Carrying Amount At Close of Period        
Hotel Property Location Encumbrances Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Land 
FF&E,
Buildings and
improvements
 Total 
Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Le Pavillon New Orleans, LA 43,750
 10,933
 51,549
 (2,600) 7,084
 8,333
 58,633
 66,966
 4,630
    06/2015 (1),(2),(3)
The Ashton Ft. Worth, TX 5,336
 800
 7,187
 
 1,333
 800
 8,520
 9,320
 1,265
    07/2014 (1),(2),(3)
Westin Princeton, NJ 49,732
 6,475
 52,195
 
 6,260
 6,475
 58,455
 64,930
 5,419
    03/2015 (1),(2),(3)
W Atlanta, GA 40,500
 2,353
 54,383
 
 (629) 2,353
 53,754
 56,107
 4,068
    07/2015 (1),(2),(3)
W Minneapolis, MN 53,789
 8,430
 79,713
 
 806
 8,430
 80,519
 88,949
 7,095
    11/2015 (1),(2),(3)
Le Meridien Minneapolis, MN 
 2,752
 12,248
 
 1,800
 2,752
 14,048
 16,800
 961
    07/2015 (1),(2),(3)
Hotel Indigo Atlanta, GA 16,100
 3,230
 23,713
 
 168
 3,230
 23,881
 27,111
 1,460
    10/2015 (1),(2),(3)
WorldQuest Resort Orlando, FL 
 1,432
 9,870
 (49) 1,136
 1,383
 11,006
 12,389
 2,201
   03/2011 (1),(2),(3)
Total   $3,723,568
 $664,232
 $3,626,591
 $(9,555) $783,026
 $654,677
 $4,409,617
 $5,064,294
 $1,028,379
      
_________________________
(1) Estimated useful life for buildings is 39 years.
(2) Estimated useful life for building improvements is 7.5 years.
(3) Estimated useful life for furniture and fixtures is 1.5 to 5 years.
(4) Amounts include impairment charges.
(5) These hotel properties were held for sale as of December 31, 2017.

  Year Ended December 31,
  2017 2016 2015
Investment in Real Estate:      
Beginning balance $5,054,564
 $5,181,466
 $2,719,716
Additions 225,461
 206,022
 2,531,312
Impairment/write-offs (111,820) (85,338) (57,596)
Sales/disposals (85,709) (227,988) (11,966)
Assets held for sale (18,202) (19,598) 
Ending balance 5,064,294
 5,054,564
 5,181,466
Accumulated Depreciation:      
Beginning balance 894,001
 761,782
 591,105
Depreciation expense 247,220
 245,953
 211,434
Impairment/write-offs (101,008) (67,022) (37,647)
Sales/disposals (11,364) (44,346) (3,110)
Assets held for sale (470) (2,366) 
Ending balance 1,028,379
 894,001
 761,782
Investment in Real Estate, net $4,035,915
 $4,160,563
 $4,419,684



EXHIBIT INDEX
Exhibit Description
2.1 
3.1 
3.2 
3.3 
4.1 
4.1.1 
4.1.2 
4.2.1 
4.2.2 
4.3.1 
4.3.2 
4.4 
4.5 
4.6 
4.7 
4.8 *
10.1 
10.1.2 
10.1.3 
10.1.4 
10.1.5 
10.1.6 

ExhibitDescription
10.2 

ExhibitDescription
10.3.1† 
10.3.1.1
10.3.2†
10.3.2.1†10.3.1.1† 
10.3.2.2†10.3.1.2† 
10.3.3†10.3.2† 
10.3.4†10.3.3† 
10.3.5†10.3.4† 
10.3.6†10.3.5† 
10.3.7†10.3.6† 
10.3.7†*
10.3.8†*
10.3.9†*
10.4 
10.5.1†10.5 
10.5.2
10.610.6.1 
10.6.110.6.2 
10.6.210.6.3 
10.6.310.6.4 
10.6.410.6.5 
10.7 
10.8.110.8 
10.8.2
10.9
10.1010.9 
10.10.1
10.10.2

ExhibitDescription
10.10.3
10.10.4
10.10.5
10.10.6
10.10.7
10.10.8
10.10.9
10.11
10.11.1
10.11.2
10.11.3
10.11.4
10.11.5
10.12
10.13.1
10.13.2
10.14.1.1
10.14.1.1a
10.14.1.2
10.14.1.2a
10.14.1.3
10.14.1.4

ExhibitDescription
10.14.1.5
10.14.1.6
10.14.1.7
10.15
10.15.1
10.16.1
10.16.2
10.16.3
10.17
10.1810.10 
10.19
10.20.110.11 
10.20.1.1
10.20.1.2
10.20.2
10.20.2.1
10.20.2.2

ExhibitDescription
10.20.3
10.20.3.1
10.20.3.2
10.20.4
10.20.4.1
10.20.4.2
10.20.5
10.21
10.2210.12 

10.23
ExhibitDescription
10.13 
10.2410.14 
10.2510.15 
10.2610.16 
10.2710.17 
10.2810.18 
10.2910.19 

ExhibitDescription
10.3010.20 
10.3110.21 
10.3210.22 
10.3310.23.1 
10.33.1
10.3410.23.2 
10.24
10.3510.25 
10.3610.26 
10.3710.27 
10.37.1
10.38
10.38.1
10.39
10.39.1
10.40
10.40.1
10.41
10.42
10.43
10.44

ExhibitDescription
10.45
10.46
10.47
10.4810.28 
10.4910.29 

10.50
ExhibitDescription
10.30 
12*10.31 
10.32
10.33
10.34
10.35
10.36
10.37
10.38
10.39
10.40
10.41
10.42
10.43
10.44
10.45
10.46
10.47

ExhibitDescription
10.48
10.49
10.50
21.1* 
21.2* 
23.1* 
31.1* 
31.2* 
32.1* 
32.2* 
   
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 20172019 are formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income (Loss); (iii) Consolidated Statements of Equity;(iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements. In accordance with Rule 402 of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the XBRL document Submitted electronically with this report.
101.SCH Inline XBRL Taxonomy Extension Schema Document. Submitted electronically with this report.
101.CAL Inline XBRL Taxonomy Calculation Linkbase Document. Submitted electronically with this report.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. Submitted electronically with this report.
101.LAB Inline XBRL Taxonomy Label Linkbase Document. Submitted electronically with this report.
101.PRE Inline XBRL Taxonomy Presentation Linkbase Document.Submitted electronically with this report.
104Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) Submitted electronically with this report.
_________________________
* Filed herewith.
† Management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
None.

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 12, 2020.
ASHFORD HOSPITALITY TRUST, INC.
By:/s/ DOUGLAS A. KESSLER
Douglas A. Kessler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on behalf of the Registrant in the capacities and on the dates indicated.
SignatureTitleDate
/s/ MONTY J. BENNETT
Chairman of the Board of DirectorsMarch 12, 2020
Monty J. Bennett
/s/ DOUGLAS A. KESSLERPresident and Chief Executive Officer (Principal Executive Officer)March 12, 2020
Douglas A. Kessler
/s/ DERIC S. EUBANKS
Chief Financial Officer (Principal Financial Officer)March 12, 2020
Deric S. Eubanks
/s/ MARK L. NUNNELEY
Chief Accounting Officer (Principal Accounting Officer)March 12, 2020
Mark L. Nunneley
/s/ BENJAMIN J. ANSELL, M.D.
DirectorMarch 12, 2020
Benjamin J. Ansell, M.D.
/s/ FREDERICK J. KLEISNER
DirectorMarch 12, 2020
Frederick J. Kleisner
/s/ AMISH GUPTA
DirectorMarch 12, 2020
Amish Gupta
/s/ KAMAL JAFARNIA
DirectorMarch 12, 2020
Kamal Jafarnia
/s/ SHERI L. PANTERMUEHL
DirectorMarch 12, 2020
Sheri L. Pantermuehl
/s/ ALAN L. TALLIS
DirectorMarch 12, 2020
Alan L. Tallis


SCHEDULE III
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2019
(dollars in thousands)
Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost Costs Capitalized
Since Acquisition
 Gross Carrying Amount
At Close of Period
        
Hotel Property Location Encumbrances Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Total Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Embassy Suites Austin, TX $23,364
 $1,204
 $9,388
 $193
 $6,806
 $1,397
 $16,194
 $17,591
 $9,052
 08/1998   (1),(2),(3)
Embassy Suites Dallas, TX 15,465
 1,878
 8,907
 238
 6,703
 2,116
 15,610
 17,726
 8,618
 12/1998   (1),(2),(3)
Embassy Suites Herndon, VA 25,120
 1,303
 9,836
 277
 8,928
 1,580
 18,764
 20,344
 10,400
 12/1998   (1),(2),(3)
Embassy Suites Las Vegas, NV 30,282
 3,307
 16,952
 397
 15,008
 3,704
 31,960
 35,664
 17,928
 05/1999   (1),(2),(3)
Embassy Suites Flagstaff, AZ 18,400
 1,267
 4,278
 
 3,406
 1,267
 7,684
 8,951
 3,912
    10/2003 (1),(2),(3)
Embassy Suites Houston, TX 17,810
 1,799
 10,404
 
 7,312
 1,799
 17,716
 19,515
 8,212
    03/2005 (1),(2),(3)
Embassy Suites West Palm Beach, FL 19,802
 3,277
 13,949
 
 8,877
 3,277
 22,826
 26,103
 11,348
    03/2005 (1),(2),(3)
Embassy Suites Philadelphia, PA 28,698
 5,791
 34,819
 
 17,421
 5,791
 52,240
 58,031
 21,982
    12/2006 (1),(2),(3)
Embassy Suites Walnut Creek, CA 49,920
 7,452
 25,334
 
 22,758
 7,452
 48,092
 55,544
 19,170
    12/2006 (1),(2),(3)
Embassy Suites Arlington, VA 46,355
 36,065
 41,588
 
 18,327
 36,065
 59,915
 95,980
 20,197
    04/2007 (1),(2),(3)
Embassy Suites Portland, OR 88,435
 11,110
 60,048
 
 7,258
 11,110
 67,306
 78,416
 23,487
    04/2007 (1),(2),(3)
Embassy Suites Santa Clara, CA 67,440
 8,948
 46,239
 
 16,209
 8,948
 62,448
 71,396
 22,282
    04/2007 (1),(2),(3)
Embassy Suites Orlando, FL 22,526
 5,674
 21,593
 
 11,586
 5,674
 33,179
 38,853
 13,174
    04/2007 (1),(2),(3)
Embassy Suites New York, NY 145,000
 111,619
 88,673
 
 (8,336) 111,619
 80,337
 191,956
 1,974
    01/2019 (1),(2),(3)
Hilton Garden Inn Jacksonville, FL 11,756
 1,751
 9,164
 
 5,752
 1,751
 14,916
 16,667
 6,521
    11/2003 (1),(2),(3)
Hilton Garden Inn Austin, TX 66,257
 7,605
 48,725
 
 5,158
 7,605
 53,883
 61,488
 10,694
    03/2015 (1),(2),(3)
Hilton Garden Inn Baltimore, MD 16,218
 4,027
 20,199
 
 6,171
 4,027
 26,370
 30,397
 4,210
    03/2015 (1),(2),(3)
Hilton Garden Inn Virginia Beach, VA 32,140
 4,101
 26,329
 
 415
 4,101
 26,744
 30,845
 3,827
    03/2015 (1),(2),(3)
Hilton Ft. Worth, TX 62,000
 4,538
 13,922
 1
 23,803
 4,539
 37,725
 42,264
 16,894
    03/2005 (1),(2),(3)
Hilton Houston, TX 19,949
 2,200
 13,247
 
 9,936
 2,200
 23,183
 25,383
 10,421
    03/2005 (1),(2),(3)
Hilton St. Petersburg, FL 48,730
 2,991
 13,907
 (1,130) 19,489
 1,861
 33,396
 35,257
 16,729
    03/2005 (1),(2),(3)
Hilton Santa Fe, NM 26,400
 7,004
 10,689
 
 7,814
 7,004
 18,503
 25,507
 9,380
    12/2006 (1),(2),(3)
Hilton Bloomington, MN 46,800
 5,685
 59,139
 
 9,596
 5,685
 68,735
 74,420
 25,820
    04/2007 (1),(2),(3)
Hilton Costa Mesa, CA 65,671
 12,917
 91,791
 
 14,922
 12,917
 106,713
 119,630
 38,522
    04/2007 (1),(2),(3)
Hilton Boston, MA 97,000
 62,555
 134,407
 
 14,341
 62,555
 148,748
 211,303
 24,903
    03/2015 (1),(2),(3)
Hilton Parsippany, NJ 38,073
 7,293
 58,098
 
 6,883
 7,293
 64,981
 72,274
 14,790
    03/2015 (1),(2),(3)
Hilton Tampa, FL 27,442
 5,206
 21,186
 
 12,355
 5,206
 33,541
 38,747
 9,437
    03/2015 (1),(2),(3)
Hilton Alexandria, VA 73,450
 14,459
 96,602
 
 45
 14,459
 96,647
 111,106
 3,894
    06/2018 (1),(2),(3)
Hilton Santa Cruz, CA 24,919
 9,399
 38,129
 
 (3,066) 9,399
 35,063
 44,462
 885
    02/2019 (1),(2),(3)
Hampton Inn Lawrenceville, GA 5,447
 697
 3,808
 
 3,179
 697
 6,987
 7,684
 3,465
    11/2003 (1),(2),(3)
Hampton Inn Evansville, IN 11,118
 1,301
 5,034
 
 2,619
 1,301
 7,653
 8,954
 3,800
    09/2004 (1),(2),(3)
Hampton Inn Parsippany, NJ 18,641
 3,268
 24,306
 
 2,500
 3,268
 26,806
 30,074
 5,172
    03/2015 (1),(2),(3)
Hampton Inn Buford, GA 8,675
 1,168
 5,338
 
 4,622
 1,168
 9,960
 11,128
 3,274
    07/2004 (1),(2),(3)
Hampton Inn Phoenix, AZ 11,267
 853
 10,145
 
 5,002
 853
 15,147
 16,000
 2,865
    06/2015 (1),(2),(3)

126
Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost Costs Capitalized
Since Acquisition
 Gross Carrying Amount
At Close of Period
        
Hotel Property Location Encumbrances Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Total Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Hampton Inn - Waterfront Pittsburgh, PA 12,786
 2,335
 18,663
 (1,213) (10,652) 1,122
 8,011
 9,133
 226
    06/2015 (1),(2),(3),(4)
Hampton Inn - Washington Pittsburgh, PA 17,341
 2,760
 19,739
 (1,491) (11,327) 1,269
 8,412
 9,681
 594
    06/2015 (1),(2),(3),(4)
Hampton Inn Columbus, OH 21,017
 1,789
 27,210
 1
 3,691
 1,790
 30,901
 32,691
 5,000
    06/2015 (1),(2),(3)
Marriott Beverly Hills, CA 123,120
 6,510
 22,061
 
 23,809
 6,510
 45,870
 52,380
 24,959
    03/2005 (1),(2),(3)
Marriott Durham, NC 26,800
 1,794
 25,056
 
 18,478
 1,794
 43,534
 45,328
 16,077
    02/2006 (1),(2),(3)
Marriott Arlington, VA 91,542
 20,637
 101,376
 
 58,860
 20,637
 160,236
 180,873
 68,106
    07/2006 (1),(2),(3)
Marriott Bridgewater, NJ 71,200
 5,059
 89,268
 
 13,231
 5,059
 102,499
 107,558
 32,852
    04/2007 (1),(2),(3)
Marriott Dallas, TX 30,400
 2,701
 30,893
 
 14,196
 2,701
 45,089
 47,790
 18,711
    04/2007 (1),(2),(3)
Marriott Fremont, CA 58,402
 5,800
 44,200
 
 2,172
 5,800
 46,372
 52,172
 6,674
    08/2014 (1),(2),(3)
Marriott Memphis, TN 27,041
 6,210
 37,284
 
 1,589
 6,210
 38,873
 45,083
 9,264
    02/2015 (1),(2),(3)
Marriott Irving, TX 66,653
 8,330
 82,272
 
 35,370
 8,330
 117,642
 125,972
 19,426
    03/2015 (1),(2),(3)
Marriott Omaha, NE 15,847
 6,641
 49,887
 
 12,516
 6,641
 62,403
 69,044
 13,505
    03/2015 (1),(2),(3)
Marriott Sugarland, TX 62,301
 9,047
 84,043
 
 (723) 9,047
 83,320
 92,367
 11,282
    03/2015 (1),(2),(3)
SpringHill Suites by Marriott Baltimore, MD 13,600
 2,502
 13,206
 
 4,161
 2,502
 17,367
 19,869
 8,158
    05/2004 (1),(2),(3)
SpringHill Suites by Marriott Kennesaw, GA 6,638
 1,106
 5,021
 
 3,656
 1,106
 8,677
 9,783
 3,576
    07/2004 (1),(2),(3)
SpringHill Suites by Marriott Buford, GA 9,561
 1,132
 6,089
 
 831
 1,132
 6,920
 8,052
 2,777
    07/2004 (1),(2),(3)
SpringHill Suites by Marriott Charlotte, NC 12,775
 1,235
 6,818
 
 1,002
 1,235
 7,820
 9,055
 3,032
    06/2005 (1),(2),(3)
SpringHill Suites by Marriott Durham, NC 6,663
 1,090
 3,991
 
 1,276
 1,090
 5,267
 6,357
 2,066
    06/2005 (1),(2),(3)
SpringHill Suites by Marriott Manhattan Beach, CA 28,560
 5,726
 21,187
 
 1,307
 5,726
 22,494
 28,220
 7,564
    04/2007 (1),(2),(3)
SpringHill Suites by Marriott Plymouth Meeting, PA 20,800
 3,210
 24,578
 
 1,473
 3,210
 26,051
 29,261
 8,610
    04/2007 (1),(2),(3)
Fairfield Inn by Marriott Kennesaw, GA 5,207
 840
 4,359
 
 2,567
 840
 6,926
 7,766
 2,246
    07/2004 (1),(2),(3)
Courtyard by Marriott Bloomington, IN 14,248
 900
 10,741
 
 3,817
 900
 14,558
 15,458
 6,677
    09/2004 (1),(2),(3)
Courtyard by Marriott - Tremont Boston, MA 102,451
 24,494
 85,246
 
 11,340
 24,494
 96,586
 121,080
 19,178
    03/2015 (1),(2),(3)
Courtyard by Marriott Columbus, IN 8,160
 673
 4,804
 
 3,435
 673
 8,239
 8,912
 3,960
    09/2004 (1),(2),(3)
Courtyard by Marriott Denver, CO 33,376
 9,342
 29,656
 
 3,677
 9,342
 33,333
 42,675
 5,909
    03/2015 (1),(2),(3)
Courtyard by Marriott Louisville, KY 18,261
 1,352
 12,266
 
 4,673
 1,352
 16,939
 18,291
 6,181
    09/2004 (1),(2),(3)
Courtyard by Marriott Gaithersburg, MD 28,580
 5,128
 30,522
 
 4,372
 5,128
 34,894
 40,022
 5,902
    03/2015 (1),(2),(3)
Courtyard by Marriott Crystal City, VA 42,538
 5,411
 38,610
 
 14,073
 5,411
 52,683
 58,094
 20,534
    06/2005 (1),(2),(3)
Courtyard by Marriott Ft. Lauderdale, FL 20,617
 2,244
 18,520
 
 6,454
 2,244
 24,974
 27,218
 10,598
    06/2005 (1),(2),(3)
Courtyard by Marriott Overland Park, KS 8,794
 1,868
 14,030
 
 4,559
 1,868
 18,589
 20,457
 8,299
    06/2005 (1),(2),(3)
Courtyard by Marriott Foothill Ranch, CA 21,735
 2,447
 16,005
 
 3,648
 2,447
 19,653
 22,100
 8,232
    06/2005 (1),(2),(3)
Courtyard by Marriott Alpharetta, GA 19,665
 2,244
 12,345
 
 3,590
 2,244
 15,935
 18,179
 7,084
    06/2005 (1),(2),(3)
Courtyard by Marriott Oakland, CA 28,240
 5,112
 19,429
 
 4,099
 5,112
 23,528
 28,640
 9,013
    04/2007 (1),(2),(3)
Courtyard by Marriott Scottsdale, AZ 23,600
 3,700
 22,134
 
 4,884
 3,700
 27,018
 30,718
 10,337
    04/2007 (1),(2),(3)
Courtyard by Marriott Plano, TX 18,160
 2,115
 22,360
 
 1,994
 2,115
 24,354
 26,469
 8,592
    04/2007 (1),(2),(3)
Courtyard by Marriott Newark, CA 34,960
 2,863
 10,723
 
 1,678
 2,863
 12,401
 15,264
 4,413
    04/2007 (1),(2),(3)
Courtyard by Marriott Manchester, CT 6,292
 1,301
 7,430
 
 1,931
 1,301
 9,361
 10,662
 3,766
    04/2007 (1),(2),(3)
Courtyard by Marriott Basking Ridge, NJ 41,600
 5,419
 45,304
 
 6,482
 5,419
 51,786
 57,205
 18,549
    04/2007 (1),(2),(3)
Courtyard by Marriott Wichita, KS 18,380
 291
 23,090
 
 (1,108) 291
 21,982
 22,273
 2,887
    06/2015 (1),(2),(3)

Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost Costs Capitalized
Since Acquisition
 Gross Carrying Amount
At Close of Period
        
Hotel Property Location Encumbrances Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Total Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Courtyard by Marriott - Billerica Boston, MA 29,807
 3,528
 29,352
 
 1,410
 3,528
 30,762
 34,290
 6,099
    06/2015 (1),(2),(3)
Homewood Suites Pittsburgh, PA 25,492
 1,906
 28,093
 
 2,781
 1,906
 30,874
 32,780
 5,132
    06/2015 (1),(2),(3)
Marriott Residence Inn Lake Buena Vista, FL 25,330
 2,555
 20,367
 
 10,717
 2,555
 31,084
 33,639
 13,809
    03/2004 (1),(2),(3)
Marriott Residence Inn Evansville, IN 7,830
 961
 5,972
 (1) 2,939
 960
 8,911
 9,871
 4,419
    09/2004 (1),(2),(3)
Marriott Residence Inn Orlando, FL 25,687
 6,554
 40,539
 
 19,672
 6,554
 60,211
 66,765
 22,529
    06/2005 (1),(2),(3)
Marriott Residence Inn Falls Church, VA 26,151
 2,752
 34,979
 
 7,376
 2,752
 42,355
 45,107
 17,299
    06/2005 (1),(2),(3)
Marriott Residence Inn San Diego, CA 29,281
 3,156
 29,514
 
 3,810
 3,156
 33,324
 36,480
 13,267
    06/2005 (1),(2),(3)
Marriott Residence Inn Salt Lake City, UT 15,798
 1,897
 16,357
 
 3,489
 1,897
 19,846
 21,743
 7,819
    06/2005 (1),(2),(3)
Marriott Residence Inn Las Vegas, NV 38,160
 18,177
 39,568
 (6,184) (12,854) 11,993
 26,714
 38,707
 7,465
    04/2007 (1),(2),(3),(4)
Marriott Residence Inn Phoenix, AZ 23,680
 4,100
 23,187
 
 2,655
 4,100
 25,842
 29,942
 9,014
    04/2007 (1),(2),(3)
Marriott Residence Inn Plano, TX 14,160
 2,045
 16,869
 
 2,116
 2,045
 18,985
 21,030
 6,774
    04/2007 (1),(2),(3)
Marriott Residence Inn Newark, CA 37,760
 3,272
 11,706
 
 2,586
 3,272
 14,292
 17,564
 5,272
    04/2007 (1),(2),(3)
Marriott Residence Inn Manchester, CT 6,759
 1,462
 8,306
 
 3,798
 1,462
 12,104
 13,566
 5,454
    04/2007 (1),(2),(3)
Marriott Residence Inn Jacksonville, FL 9,865
 1,997
 16,084
 
 10,214
 1,997
 26,298
 28,295
 9,129
    05/2007 (1),(2),(3)
Marriott Residence Inn Stillwater, OK 7,911
 930
 15,070
 (524) (7,185) 406
 7,885
 8,291
 1,377
    06/2015 (1),(2),(3),(4)
Tribute Portfolio Santa Fe, NM 25,000
 8,094
 42,058
 
 1,049
 8,094
 43,107
 51,201
 1,453
    10/2018 (1),(2),(3)
TownePlace Suites by Marriott Manhattan Beach, CA 23,680
 4,805
 17,543
 
 4,937
 4,805
 22,480
 27,285
 8,843
    04/2007 (1),(2),(3)
Ritz-Carlton Atlanta, GA 97,902
 2,477
 80,139
 
 31,229
 2,477
 111,368
 113,845
 21,266
    03/2015 (1),(2),(3)
One Ocean Atlantic Beach, FL 57,600
 5,815
 14,817
 
 28,226
 5,815
 43,043
 48,858
 25,727
    04/2004 (1),(2),(3)
Renaissance Nashville, TN 207,000
 20,671
 158,260
 
 33,589
 20,671
 191,849
 212,520
 32,689
    03/2015 (1),(2),(3)
Renaissance Palm Springs, CA 51,522
 
 74,112
 
 15,176
 
 89,288
 89,288
 17,719
    03/2015 (1),(2),(3)
Sheraton Hotel Ann Arbor, MI 35,200
 4,158
 35,042
 
 4,570
 4,158
 39,612
 43,770
 5,387
    06/2015 (1),(2),(3)
Sheraton Hotel Langhorne, PA 12,880
 2,037
 12,424
 
 9,270
 2,037
 21,694
 23,731
 10,860
    07/2004 (1),(2),(3)
Sheraton Hotel Minneapolis, MN 20,933
 2,953
 14,280
 
 5,909
 2,953
 20,189
 23,142
 9,417
    03/2005 (1),(2),(3)
Sheraton Hotel Indianapolis, IN 59,278
 3,100
 22,041
 
 22,381
 3,100
 44,422
 47,522
 21,532
    03/2005 (1),(2),(3)
Sheraton Hotel Anchorage, AK 26,331
 4,023
 39,363
 
 19,502
 4,023
 58,865
 62,888
 23,437
    12/2006 (1),(2),(3)
Sheraton Hotel San Diego, CA 36,160
 7,294
 36,382
 
 7,893
 7,294
 44,275
 51,569
 17,483
    12/2006 (1),(2),(3)
Hyatt Regency Coral Gables, FL 63,200
 4,805
 50,820
 
 27,599
 4,805
 78,419
 83,224
 28,276
    04/2007 (1),(2),(3)
Hyatt Regency Hauppauge, NY 36,095
 6,284
 35,669
 
 (1,085) 6,284
 34,584
 40,868
 6,512
    03/2015 (1),(2),(3)
Hyatt Regency Savannah, GA 69,224
 14,041
 72,721
 
 13,781
 14,041
 86,502
 100,543
 17,958
    03/2015 (1),(2),(3)
Crown Plaza Key West, FL 64,980
 
 27,514
 
 11,167
 
 38,681
 38,681
 17,619
    03/2005 (1),(2),(3)
Crown Plaza Annapolis, MD 
 
 9,903
 
 119
 
 10,022
 10,022
 4,658
    03/2015 (1),(2),(3)
Annapolis Historic Inn Annapolis, MD 18,658
 3,028
 7,833
 
 8,387
 3,028
 16,220
 19,248
 8,962
    03/2005 (1),(2),(3),(4)
Lakeway Resort & Spa Austin, TX 19,527
 4,541
 28,940
 
 7,716
 4,541
 36,656
 41,197
 12,160
    02/2015 (1),(2),(3)
Silversmith Chicago, IL 27,739
 4,782
 22,398
 
 (1,871) 4,782
 20,527
 25,309
 3,507
    03/2015 (1),(2),(3)
The Churchill Washington, D.C. 41,114
 25,898
 32,304
 
 14,778
 25,898
 47,082
 72,980
 12,525
    03/2015 (1),(2),(3)
The Melrose Washington, D.C. 75,454
 29,277
 62,507
 
 (43) 29,277
 62,464
 91,741
 8,804
    03/2015 (1),(2),(3)
Le Pavillon New Orleans, LA 43,750
 10,933
 51,549
 (2,601) 11,760
 8,332
 63,309
 71,641
 11,450
    06/2015 (1),(2),(3)
The Ashton Ft. Worth, TX 8,881
 800
 7,187
 
 1,712
 800
 8,899
 9,699
 2,283
    07/2014 (1),(2),(3)

Column A Column B Column C Column D Column E Column F Column G Column H Column I
      Initial Cost Costs Capitalized
Since Acquisition
 Gross Carrying Amount
At Close of Period
        
Hotel Property Location Encumbrances Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Land FF&E,
Buildings and
Improvements
 Total Accumulated
Depreciation
 
Construction
Date
 
Acquisition
Date
 
Income
Statement
Westin Princeton, NJ 33,000
 6,475
 52,195
 
 8,035
 6,475
 60,230
 66,705
 10,831
    03/2015 (1),(2),(3)
W Atlanta, GA 48,800
 2,353
 54,383
 
 4,542
 2,353
 58,925
 61,278
 8,589
    07/2015 (1),(2),(3)
W Minneapolis, MN 51,843
 8,430
 79,713
 
 5,008
 8,430
 84,721
 93,151
 9,327
    11/2015 (1),(2),(3)
Le Meridien Minneapolis, MN 
 2,752
 12,248
 
 2,578
 2,752
 14,826
 17,578
 2,561
    07/2015 (1),(2),(3)
Hotel Indigo Atlanta, GA 16,100
 3,230
 23,713
 
 4,546
 3,230
 28,259
 31,489
 3,991
    10/2015 (1),(2),(3)
WorldQuest Orlando, FL 
 1,432
 9,870
 (40) 2,142
 1,392
 12,012
 13,404
 3,077
    03/2011 (1),(2),(3)
Total   $4,124,003
 $782,850
 $3,760,480
 $(12,077) $913,006
 $770,773
 $4,673,486
 $5,444,259
 $1,335,816
      
                           
_________________________
(1) Estimated useful life for buildings is 39 years.
(2) Estimated useful life for building improvements is 7.5 years.
(3) Estimated useful life for furniture and fixtures is 1.5 to 5 years.
(4) Amounts include impairment charges.
  Year Ended December 31,
  2019 2018 2017
Investment in Real Estate:      
Beginning balance $5,287,463
 $5,064,294
 $5,054,564
Additions 409,603
 374,223
 225,461
Impairment/write-offs (136,658) (125,964) (111,820)
Sales/disposals (116,149) (25,090) (85,709)
Assets held for sale 
 
 (18,202)
Ending balance $5,444,259
 $5,287,463
 $5,064,294
Accumulated Depreciation:      
Beginning balance 1,182,244
 1,028,379
 894,001
Depreciation expense 269,664
 258,441
 247,220
Impairment/write-offs (103,038) (102,410) (101,008)
Sales/disposals (13,054) (2,166) (11,364)
Assets held for sale 
 
 (470)
Ending balance $1,335,816
 $1,182,244
 $1,028,379
Investment in Real Estate, net $4,108,443
 $4,105,219
 $4,035,915


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