Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 12, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | Sunstone Hotel Investors, Inc. | ||
Entity Central Index Key | 1295810 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $3 | ||
Entity Common Stock, Shares Outstanding | 208,512,765 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $222,096 | $104,363 |
Restricted cash | 82,074 | 89,306 |
Accounts receivable, net | 34,227 | 29,941 |
Inventories | 1,439 | 1,464 |
Prepaid expenses | 14,909 | 12,612 |
Total current assets | 354,745 | 237,686 |
Investment in hotel properties, net | 3,538,129 | 3,231,382 |
Deferred financing fees, net | 8,201 | 9,219 |
Goodwill | 9,405 | 9,405 |
Other assets, net | 14,485 | 21,106 |
Total assets | 3,924,965 | 3,508,798 |
Current liabilities: | ||
Accounts payable and accrued expenses | 32,577 | 25,116 |
Accrued payroll and employee benefits | 31,919 | 29,933 |
Dividends payable | 76,694 | 11,443 |
Other current liabilities | 36,466 | 30,288 |
Current portion of notes payable | 121,328 | 23,289 |
Total current liabilities | 298,984 | 120,069 |
Notes payable, less current portion | 1,307,964 | 1,380,786 |
Capital lease obligations, less current portion | 15,576 | 15,586 |
Other liabilities | 33,607 | 39,958 |
Total liabilities | 1,656,131 | 1,556,399 |
Commitments and contingencies (Note 13) | ||
Preferred stock | ||
Common stock, $0.01 par value, 500,000,000 shares authorized, 204,766,718 shares issued and outstanding at December 31, 2014 and 180,858,699 shares issued and outstanding at December 31, 2013 | 2,048 | 1,809 |
Additional paid in capital | 2,418,567 | 2,068,721 |
Retained earnings | 305,627 | 224,364 |
Cumulative dividends | -624,545 | -511,444 |
Total stockholders' equity | 2,216,697 | 1,898,450 |
Non-controlling interest in consolidated joint ventures | 52,137 | 53,949 |
Total equity | 2,268,834 | 1,952,399 |
Total liabilities and equity | 3,924,965 | 3,508,798 |
Series D Cumulative Redeemable Preferred Stock | ||
Preferred stock | ||
Preferred stock 8.0% Cumulative Redeemable Preferred Stock | $115,000 | $115,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 204,766,718 | 180,858,699 |
Common stock, shares outstanding (in shares) | 204,766,718 | 180,858,699 |
Series D Cumulative Redeemable Preferred Stock | ||
Preferred stock, 8.0% Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,600,000 | 4,600,000 |
Preferred stock, 8.0% Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 4,600,000 |
Preferred stock, 8.0% Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 8.00% | 8.00% |
Preferred stock, 8.0% Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $25 | $25 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
REVENUES | |||
Room | $811,709 | $653,955 | $576,146 |
Food and beverage | 259,358 | 213,346 | 200,810 |
Other operating | 70,931 | 56,523 | 52,128 |
Total revenues | 1,141,998 | 923,824 | 829,084 |
OPERATING EXPENSES | |||
Room | 214,899 | 170,361 | 147,932 |
Food and beverage | 180,053 | 147,713 | 139,106 |
Other operating | 21,012 | 16,819 | 16,162 |
Advertising and promotion | 54,992 | 47,306 | 42,474 |
Repairs and maintenance | 45,901 | 35,884 | 32,042 |
Utilities | 34,141 | 27,006 | 25,596 |
Franchise costs | 38,271 | 32,932 | 30,067 |
Property tax, ground lease and insurance | 84,665 | 79,004 | 66,830 |
Property general and administrative | 126,737 | 103,454 | 94,642 |
Corporate overhead | 28,739 | 26,671 | 24,316 |
Depreciation and amortization | 155,845 | 137,476 | 130,907 |
Total operating expenses | 985,255 | 824,626 | 750,074 |
Operating income | 156,743 | 99,198 | 79,010 |
Interest and other income | 3,479 | 2,821 | 297 |
Interest expense | -72,315 | -72,239 | -76,821 |
Loss on extinguishment of debt | -4,638 | -44 | -191 |
Income before income taxes and discontinued operations | 83,269 | 29,736 | 2,295 |
Income tax provision | -179 | -8,145 | -1,148 |
Income from continuing operations | 83,090 | 21,591 | 1,147 |
Income from discontinued operations | 4,849 | 48,410 | 48,410 |
NET INCOME | 87,939 | 70,001 | 49,557 |
Income from consolidated joint venture attributable to non-controlling interest | -6,676 | -4,013 | -1,761 |
Distributions to non-controlling interest | -32 | -32 | -31 |
Preferred stock dividends and redemption charges | -9,200 | -19,013 | -29,748 |
Income available to common stockholders | $72,031 | $46,943 | $18,017 |
Basic and diluted per share amounts: | |||
Income (loss) from continuing operations available (attributable) to common stockholders (in dollars per share) | $0.34 | ($0.01) | ($0.24) |
Income from discontinued operations (in dollars per share) | $0.03 | $0.30 | $0.38 |
Basic and diluted income available to common stockholders per common share (in dollars per share) | $0.37 | $0.29 | $0.14 |
Basic and diluted weighted average common shares outstanding (in shares) | 192,674 | 161,784 | 127,027 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $87,939 | $70,001 | $49,557 |
Pension liability adjustment | -419 | ||
Reclassification to income from discontinued operations | 5,335 | ||
Comprehensive income | 87,939 | 75,336 | 49,138 |
Income from consolidated joint venture attributable to non-controlling interest | -6,676 | -4,013 | -1,761 |
Distributions to non-controlling interest | -32 | -32 | -31 |
Preferred stock dividends and redemption charges | -9,200 | -19,013 | -29,748 |
Comprehensive income available to common stockholders | $72,031 | $52,278 | $17,598 |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Series A Cumulative Redeemable Preferred Stock | Series A Cumulative Redeemable Preferred Stock | Series A Cumulative Redeemable Preferred Stock | Series C Cumulative Convertible Redeemable Preferred Stock | Series C Cumulative Convertible Redeemable Preferred Stock | Series D Cumulative Redeemable Preferred Stock | Series D Cumulative Redeemable Preferred Stock | Series D Cumulative Redeemable Preferred Stock | Common Stock | Additional Paid In Capital | Retained Earnings | Cumulative Dividends | Accumulated Other Comprehensive Loss | Non-Controlling Interest in Consolidated Joint Ventures | Total |
In Thousands, except Share data, unless otherwise specified | Preferred Stock | Cumulative Dividends | Cumulative Dividends | Preferred Stock | Cumulative Dividends | ||||||||||
Beginning Balance at Dec. 31, 2011 | $176,250 | $115,000 | $1,173 | $1,312,566 | $110,580 | ($445,396) | ($4,916) | $60,037 | $1,325,294 | ||||||
Beginning Balance (in shares) at Dec. 31, 2011 | 7,050,000 | 4,600,000 | 117,265,090 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Net proceeds from sale of common stock | 121 | 126,058 | 126,179 | ||||||||||||
Net proceeds from sale of common stock (in shares) | 12,143,273 | ||||||||||||||
Issuance of common stock in connection with hotel acquisition, net | 55 | 51,008 | 51,063 | ||||||||||||
Issuance of common stock in connection with hotel acquisition, net (in shares) | 5,454,164 | ||||||||||||||
Vesting of restricted common stock | 3 | 3,765 | 3,768 | ||||||||||||
Vesting of restricted common stock (in shares) | 374,911 | ||||||||||||||
Distributions to non-controlling interests | -6,381 | -6,381 | |||||||||||||
Preferred dividends and dividends payable | -14,100 | -14,100 | -6,448 | -6,448 | -9,200 | -9,200 | |||||||||
Net income | 47,796 | 1,761 | 49,557 | ||||||||||||
Pension liability adjustment | -419 | -419 | |||||||||||||
Ending Balance at Dec. 31, 2012 | 176,250 | 115,000 | 1,352 | 1,493,397 | 158,376 | -475,144 | -5,335 | 55,417 | 1,519,313 | ||||||
Ending Balance (in shares) at Dec. 31, 2012 | 7,050,000 | 4,600,000 | 135,237,438 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Net proceeds from sale of common stock | 453 | 565,307 | 565,760 | ||||||||||||
Net proceeds from sale of common stock (in shares) | 45,300,000 | ||||||||||||||
Vesting of restricted common stock | 4 | 5,247 | 5,251 | ||||||||||||
Vesting of restricted common stock (in shares) | 321,261 | ||||||||||||||
Redemptions of Series A and Series C preferred stock | -176,250 | 4,770 | -4,770 | -176,250 | |||||||||||
Redemptions of Series A and Series C preferred stock (in shares) | -7,050,000 | ||||||||||||||
Distributions to non-controlling interests | -5,481 | -5,481 | |||||||||||||
Cash common stock dividends and dividends payable | -17,287 | -17,287 | |||||||||||||
Preferred dividends and dividends payable | -2,350 | -2,350 | -2,693 | -2,693 | -9,200 | -9,200 | |||||||||
Net income | 65,988 | 4,013 | 70,001 | ||||||||||||
Pension liability reclassification | 5,335 | 5,335 | |||||||||||||
Ending Balance at Dec. 31, 2013 | 115,000 | 1,809 | 2,068,721 | 224,364 | -511,444 | 53,949 | 1,952,399 | ||||||||
Ending Balance (in shares) at Dec. 31, 2013 | 4,600,000 | 180,858,699 | |||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Net proceeds from sale of common stock | 194 | 283,262 | 283,456 | ||||||||||||
Net proceeds from sale of common stock (in shares) | 19,352,703 | ||||||||||||||
Issuance of common stock in connection with hotel acquisition, net | 40 | 59,894 | 59,934 | ||||||||||||
Issuance of common stock in connection with hotel acquisition, net (in shares) | 4,034,970 | ||||||||||||||
Vesting of restricted common stock | 5 | 6,690 | 6,695 | ||||||||||||
Vesting of restricted common stock (in shares) | 520,346 | ||||||||||||||
Distributions to non-controlling interests | -8,488 | -8,488 | |||||||||||||
Cash and/or stock common stock dividends and dividends payable | -103,901 | -103,901 | |||||||||||||
Preferred dividends and dividends payable | -9,200 | -9,200 | |||||||||||||
Net income | 81,263 | 6,676 | 87,939 | ||||||||||||
Ending Balance at Dec. 31, 2014 | $115,000 | $2,048 | $2,418,567 | $305,627 | ($624,545) | $52,137 | $2,268,834 | ||||||||
Ending Balance (in shares) at Dec. 31, 2014 | 4,600,000 | 204,766,718 |
CONSOLIDATED_STATEMENTS_OF_EQU1
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONSOLIDATED STATEMENTS OF EQUITY | |||
Common stock dividends and dividends payable, per share (in dollars per share) | $0.51 | $0.10 | |
Series A preferred dividends and dividends payable, per share (in dollars per share) | $0.50 | $2 | |
Series C preferred dividends and dividends payable, per share (in dollars per share) | $0.79 | $1.57 | |
Series D preferred dividends and dividends payable, per share (in dollars per share) | $2 | $2 | $2 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $87,939,000 | $70,001,000 | $49,557,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Bad debt expense | 368,000 | 294,000 | 410,000 |
Gain on sale of assets, net | -5,292,000 | -51,632,000 | -38,274,000 |
Loss on extinguishment of debt | 4,638,000 | 3,159,000 | 191,000 |
(Gain) loss on derivatives, net | -529,000 | -525,000 | 406,000 |
Depreciation | 152,581,000 | 131,793,000 | 128,206,000 |
Amortization of franchise fees and other intangibles | 7,543,000 | 10,115,000 | 20,198,000 |
Amortization and write-off of deferred financing fees | 2,777,000 | 2,957,000 | 3,952,000 |
Amortization of loan discounts | 3,000 | 1,058,000 | |
Amortization of deferred stock compensation | 6,221,000 | 4,858,000 | 3,466,000 |
Changes in operating assets and liabilities: | |||
Restricted cash | 11,543,000 | -11,688,000 | -249,000 |
Accounts receivable | -1,532,000 | 1,740,000 | 4,587,000 |
Inventories | 100,000 | 1,524,000 | -271,000 |
Prepaid expenses and other assets | 3,121,000 | 2,724,000 | -7,906,000 |
Accounts payable and other liabilities | 7,273,000 | 7,001,000 | 2,279,000 |
Accrued payroll and employee benefits | 1,844,000 | -1,637,000 | 2,983,000 |
Discontinued operations | 432,000 | 903,000 | |
Net cash provided by operating activities | 278,595,000 | 171,119,000 | 171,496,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from sales of hotel properties and other assets | 110,000 | 195,628,000 | 46,367,000 |
Restricted cash - replacement reserve | -4,311,000 | 1,272,000 | -10,743,000 |
Acquisitions of hotel properties and other assets | -276,558,000 | -450,544,000 | -120,003,000 |
Renovations and additions to hotel properties and other assets | -125,975,000 | -117,694,000 | -109,321,000 |
Payment for interest rate derivative | -12,000 | ||
Net cash used in investing activities | -406,734,000 | -371,350,000 | -193,700,000 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Redemptions of preferred stock | -276,250,000 | ||
Proceeds from common stock offerings | 284,390,000 | 566,451,000 | 126,533,000 |
Payment of common stock offering costs | -1,000,000 | -691,000 | -451,000 |
Proceeds from notes payable and credit facility | 178,250,000 | 35,750,000 | 15,000,000 |
Payments on notes payable and credit facility | -153,033,000 | -141,527,000 | -73,328,000 |
Payments for costs related to extinguishment of notes payable | -4,051,000 | -3,108,000 | -70,000 |
Payments of deferred financing costs | -2,346,000 | -243,000 | -1,332,000 |
Dividends paid | -47,850,000 | -27,524,000 | -29,748,000 |
Distributions to non-controlling interests | -8,488,000 | -5,481,000 | -6,381,000 |
Net cash provided by financing activities | 245,872,000 | 147,377,000 | 30,223,000 |
Net increase (decrease) in cash and cash equivalents | 117,733,000 | -52,854,000 | 8,019,000 |
Cash and cash equivalents, beginning of year | 104,363,000 | 157,217,000 | 149,198,000 |
Cash and cash equivalents, end of year | 222,096,000 | 104,363,000 | 157,217,000 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||
Cash paid for interest | 69,511,000 | 71,563,000 | 78,234,000 |
Cash paid for income taxes, net of refunds received | 273,000 | 7,143,000 | 1,023,000 |
NONCASH INVESTING ACTIVITY | |||
Accounts payable related to renovations and additions to hotel properties and other real estate | 8,670,000 | 7,842,000 | 5,897,000 |
Amortization of deferred stock compensation - construction activities | 474,000 | 393,000 | 302,000 |
NONCASH FINANCING ACTIVITY | |||
Issuance of common stock in connection with acquisitions of hotel properties | 60,000,000 | 51,160,000 | |
Assignment of debt in connection with dispositions of hotel properties | -122,622,000 | ||
Assumption of debt in connection with acquisition of hotel property | 119,190,000 | ||
Dividends payable | 76,694,000 | 11,443,000 | 7,437,000 |
Acquisitions 2014 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | 3,500,000 | ||
Acquisitions 2013 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | 2,800,000 | ||
Acquisitions 2012 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | -1,100,000 | ||
Marriott Wailea | Acquisitions 2014 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of franchise fees and other intangibles | $533,000 |
Organization_and_Description_o
Organization and Description of Business | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Organization and Description of Business | ||||
Organization and Description of Business | 1. Organization and Description of Business | |||
Sunstone Hotel Investors, Inc. (the “Company”) was incorporated in Maryland on June 28, 2004 in anticipation of an initial public offering of common stock, which was consummated on October 26, 2004. The Company, through its 100% controlling interest in Sunstone Hotel Partnership, LLC (the “Operating Partnership”), of which the Company is the sole managing member, and the subsidiaries of the Operating Partnership, including Sunstone Hotel TRS Lessee, Inc. (the “TRS Lessee”) and its subsidiaries, is currently engaged in acquiring, owning, asset managing and renovating hotel properties. The Company may also sell certain hotel properties from time to time. The Company operates as a real estate investment trust (“REIT”) for federal income tax purposes. | ||||
As a REIT, certain tax laws limit the amount of “non-qualifying” income the Company can earn, including income derived directly from the operation of hotels. As a result, the Company leases all of its hotels to its TRS Lessee, which in turn enters into long-term management agreements with third parties to manage the operations of the Company’s hotels. As of December 31, 2014, the Company had interests in 30 hotels (the “30 hotels”) held for investment, and the Company’s third-party managers included the following: | ||||
Number of Hotels | ||||
Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) | 11 | |||
Interstate Hotels & Resorts, Inc. | 6 | |||
Highgate Hotels L.P. and an affiliate | 4 | |||
Davidson Hotels & Resorts | 2 | |||
Hilton Worldwide | 2 | |||
Hyatt Corporation | 2 | |||
Crestline Hotels & Resorts | 1 | |||
Dimension Development Company | 1 | |||
Fairmont Hotels & Resorts (U.S.) | 1 | |||
Total hotels held for investment | 30 | |||
In addition, the Company owns BuyEfficient, LLC (“BuyEfficient”), an electronic purchasing platform that allows members to procure food, operating supplies, furniture, fixtures and equipment. | ||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||||
Basis of Presentation | |||||||||||||||
The accompanying consolidated financial statements as of December 31, 2014 and 2013, and for the years ended December 31, 2014, 2013 and 2012, include the accounts of the Company, the Operating Partnership, the TRS Lessee and their subsidiaries. All significant intercompany balances and transactions have been eliminated. The Company consolidates subsidiaries when it has the ability to direct the activities that most significantly impact the economic performance of the entity. The Company also evaluates its subsidiaries to determine if they should be considered variable interest entities (“VIEs”). Typically, the entity that has the power to direct the activities that most significantly impact economic performance would consolidate the VIE. The Company considers an entity a VIE if equity investors own an interest therein that does not have the characteristics of a controlling financial interest or if such investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), the Company reviewed its subsidiaries to determine if (i) they should be considered VIEs, and (ii) whether the Company should change its consolidation determination based on changes in the characteristics of these entities. Based on its review, the Company determined that all of its subsidiaries were properly consolidated as of December 31, 2014 and 2013, and for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||
Non-controlling interests at both December 31, 2014 and 2013 represent the outside equity interests in various consolidated affiliates of the Company. | |||||||||||||||
Certain prior year amounts have been reclassified in the consolidated financial statements in order to conform to the current year presentation. | |||||||||||||||
The Company has evaluated subsequent events through the date of issuance of these financial statements. | |||||||||||||||
Use of Estimates | |||||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) 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 revenues and expenses during the reporting period. Actual results could differ materially from those estimates. | |||||||||||||||
Reporting Periods | |||||||||||||||
The results the Company reports in its consolidated statements of operations are based on results reported to the Company by its hotel managers. Prior to 2013, Marriott used a fiscal year ending on the Friday closest to December 31 and reported twelve weeks of operations each for the first three quarters of the year, and sixteen or seventeen weeks of operations for the fourth quarter of the year. Beginning in 2013, Marriott switched its reporting to a standard monthly calendar; however, Marriott’s 2013 calendar contains an additional three days, December 29, 2012 through December 31, 2012. The Company and its other hotel managers use a standard monthly calendar to report their financial information. The Company has elected to adopt quarterly close periods of March 31, June 30 and September 30, and an annual year end of December 31. As a result, the Company’s 2013 and 2012 results of operations for 10 of the Company’s Marriott-managed hotels are reported using the following reporting periods: | |||||||||||||||
Number of | |||||||||||||||
days in 2013 | |||||||||||||||
2013 | 2012 | versus 2012 (1) | |||||||||||||
First quarter | December 29 — March 31 | December 31 — March 23 | 8 days | ||||||||||||
Second quarter | April 1 — June 30 | March 24 — June 15 | 7 days | ||||||||||||
Third quarter | July 1 — September 30 | June 16 — September 7 | 8 days | ||||||||||||
Fourth quarter | October 1 — December 31 | September 8 — December 28 | (20 days) | ||||||||||||
Full year | December 29, 2012 — December 31, 2013 | December 31, 2011 — December 28, 2012 | 3 days | ||||||||||||
-1 | Number of days in 2013 versus 2012 does not include the leap day, February 29, 2012, as this extra day was not caused by the Marriott calendar conversion. | ||||||||||||||
The Company estimates that Marriott’s fiscal calendar had the following effects on the Company’s total revenue and net income based on the average daily revenues and income generated by its Marriott hotels during the years ended December 31, 2014, 2013 and 2012 as follows (in thousands): | |||||||||||||||
2014 | 2013 (1) | 2012 (1) | |||||||||||||
Total revenue | $ | — | $ | 2,300 | $ | -1,251 | |||||||||
Net income | $ | — | $ | 672 | $ | -328 | |||||||||
-1 | Increases (decreases) to total revenue and net income based on the Marriott fiscal calendars for 2013 (368 days) and 2012 (364 days) versus a standard 365 day year. | ||||||||||||||
Cash and Cash Equivalents | |||||||||||||||
Cash and cash equivalents are defined as cash on hand and in various bank accounts plus all short-term investments with an original maturity of three months or less. | |||||||||||||||
The Company maintains cash and cash equivalents and certain other financial instruments with various financial institutions. These financial institutions are located throughout the country and the Company’s policy is designed to limit exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. At December 31, 2014 and 2013, the Company had amounts in banks that were in excess of federally insured amounts. | |||||||||||||||
Restricted Cash | |||||||||||||||
Restricted cash is comprised of reserve accounts for debt service, interest reserves, capital replacements, ground leases, and property taxes. These restricted funds are subject to supervision and disbursement approval by certain of the Company’s lenders and/or hotel managers. | |||||||||||||||
Accounts Receivable | |||||||||||||||
Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. Accounts receivable also includes, among other things, receivables from customers who utilize purchase volume rebates through BuyEfficient, as well as tenants who lease space in the Company’s hotels. The Company maintains an allowance for doubtful accounts sufficient to cover potential credit losses. The Company’s accounts receivable includes an allowance for doubtful accounts of $0.2 million at both December 31, 2014 and 2013. | |||||||||||||||
Inventories | |||||||||||||||
Inventories, consisting primarily of food and beverages at the hotels, are stated at the lower of cost or market, with cost determined on a method that approximates first-in, first-out basis. | |||||||||||||||
Acquisitions of Hotel Properties and Other Entities | |||||||||||||||
Accounting for the acquisition of a hotel property or other entity as a purchase transaction requires an allocation of the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective estimated fair values. The most difficult estimations of individual fair values are those involving long-lived assets, such as property, equipment, intangible assets and any capital lease obligations that are assumed as part of the acquisition of a leasehold interest. During 2014, 2013 and 2012, the Company used all available information to make these fair value determinations, and engaged independent valuation specialists to assist in the fair value determination of the long-lived assets acquired and the liabilities assumed in the Company’s purchases of the Marriott Wailea, the Hilton New Orleans St. Charles, the Boston Park Plaza, the Hyatt Regency San Francisco, the Hyatt Chicago Magnificent Mile and the Hilton Garden Inn Chicago Downtown/Magnificent Mile. Due to the inherent subjectivity in determining the estimated fair value of long-lived assets, the Company believes that the recording of acquired assets and liabilities is a critical accounting policy. | |||||||||||||||
Investments In Hotel Properties and Other Assets | |||||||||||||||
Hotel properties and other investments are depreciated using the straight-line method over estimated useful lives primarily ranging from five to 35 years for buildings and improvements and three to 12 years for furniture, fixtures and equipment. Intangible assets are amortized using the straight-line method over their estimated useful life or over the length of the related agreement, whichever is shorter. | |||||||||||||||
The Company’s investment in hotel properties, net also includes initial franchise fees which are recorded at cost and amortized using the straight-line method over the lives of the franchise agreements ranging from 14 to 27 years. All other franchise fees that are based on the Company’s results of operations are expensed as incurred. | |||||||||||||||
The Company follows the requirements of the Property, Plant and Equipment Topic of the FASB ASC, which requires impairment losses to be recorded on long-lived assets to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows expected to be generated by those assets are less than the assets’ carrying amount. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment is recognized. The impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. In computing fair value, the Company uses a discounted cash flow analysis to estimate the fair value of its hotel properties and other assets, taking into account each property’s expected cash flow from operations, holding period and estimated proceeds from the disposition of the property. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. In 2014, 2013 and 2012, the Company did not identify any properties or other assets with indicators of impairment. Based on the Company’s review, management believes that there were no other impairments on its long-lived assets, and that the carrying values of its hotel properties and other assets are recoverable at December 31, 2014. | |||||||||||||||
Fair value represents the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than a forced or liquidation sale. The estimation process involved in determining if assets have been impaired and in the determination of fair value is inherently uncertain because it requires estimates of current market yields as well as future events and conditions. Such future events and conditions include economic and market conditions, as well as the availability of suitable financing. The realization of the Company’s investment in hotel properties and other assets is dependent upon future uncertain events and conditions and, accordingly, the actual timing and amounts realized by the Company may be materially different from their estimated fair values. | |||||||||||||||
Assets Held for Sale | |||||||||||||||
The Company considers a hotel or other asset held for sale if it is probable that the sale will be completed within twelve months, among other requirements. A sale is determined to be probable once the buyer completes its due diligence of the asset, there is an executed purchase and sale agreement between the Company and the buyer, and the Company has received a substantial non-refundable deposit. Depreciation ceases when a property is held for sale. Should an impairment loss be required for assets held for sale, the related assets are adjusted to their estimated fair values, less costs to sell. If the sale of the hotel or other asset represents a strategic shift that will have a major effect on the Company’s operations and financial results, the hotel or other asset is included in discontinued operations, and operating results are removed from income from continuing operations and reported as discontinued operations. The operating results for any such assets for any prior periods presented must also be reclassified as discontinued operations. As of both December 31, 2014 and 2013, the Company had no hotels or other assets held for sale. As of December 31, 2012, the Company classified four hotels and a commercial laundry facility as held for sale due to their sale in January 2013. | |||||||||||||||
Deferred Financing Fees | |||||||||||||||
Deferred financing fees consist of loan fees and other financing costs related to the Company’s outstanding indebtedness and credit facility commitments, and are amortized to interest expense over the terms of the related debt or commitment. If a loan is refinanced or paid before its maturity, any related unamortized deferred financing costs will generally be expensed unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. | |||||||||||||||
During 2014, the Company amended the mortgage secured by the Hilton San Diego Bayfront, and refinanced the mortgages secured by the JW Marriott New Orleans and the Embassy Suites La Jolla (see Note 7). In conjunction with these financing transactions, the Company paid additional deferred financing fees of $2.3 million, which are amortized over the terms of the modified and new loans. In addition, a total of $0.6 million of deferred financing fees were written off, which are included in the Company’s results of operations as loss on extinguishment of debt. | |||||||||||||||
During 2013, the Company paid deferred financing fees of $0.2 million related to the assumption of a mortgage in connection with the acquisition of the Boston Park Plaza and the purchase of an interest rate cap derivative agreement on the Hilton San Diego Bayfront mortgage. | |||||||||||||||
During 2012, the Company incurred and paid deferred financing fees of $1.3 million related to an amendment of its credit facility. In addition, the Company wrote-off $0.2 million in deferred financing fees, which is included in the Company’s results of operations as loss on extinguishment of debt, related to its sales of the Marriott Del Mar, the Doubletree Guest Suites Minneapolis, the Hilton Del Mar and the Marriott Troy, along with a nominal amount written off related to its repayment of the non-recourse mortgage secured by the Renaissance Long Beach. | |||||||||||||||
Total amortization and write-off of deferred financing fees for 2014, 2013 and 2012 was as follows (in thousands): | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
Continuing operations: | |||||||||||||||
Amortization of deferred financing fees | $ | 2,777 | $ | 2,955 | $ | 3,690 | |||||||||
Write-off of deferred financing fees | — | — | 3 | ||||||||||||
Total deferred financing fees — continuing operations | 2,777 | 2,955 | 3,693 | ||||||||||||
Discontinued operations: | |||||||||||||||
Amortization of deferred financing fees | — | 2 | 74 | ||||||||||||
Write-off of deferred financing fees | — | — | 185 | ||||||||||||
Total deferred financing fees — discontinued operations | — | 2 | 259 | ||||||||||||
Total amortization and write-off of deferred financing fees | $ | 2,777 | $ | 2,957 | $ | 3,952 | |||||||||
Goodwill and BuyEfficient Intangibles | |||||||||||||||
The Company follows the requirements of the Intangibles — Goodwill and Other Topic of the FASB ASC, which states that goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. As a result, the carrying value of goodwill allocated to hotel properties and other assets is reviewed at least annually for impairment. In addition, when facts and circumstances suggest that the Company’s goodwill may be impaired, an interim evaluation of goodwill is prepared. Such review entails comparing the carrying value of the individual hotel property or other asset (the reporting unit) including the allocated goodwill to the fair value determined for that reporting unit (see Fair Value of Financial Instruments for detail on the Company’s valuation methodology). If the aggregate carrying value of the reporting unit exceeds the fair value, the goodwill of the reporting unit is impaired to the extent of the difference between the fair value and the aggregate carrying value, not to exceed the carrying amount of the allocated goodwill. The Company’s annual impairment evaluation is performed each year as of December 31. | |||||||||||||||
Based on its annual impairment evaluations for 2014, 2013 and 2012, the Company determined that no adjustments to its goodwill were required. | |||||||||||||||
The Company’s other assets, net includes BuyEfficient’s intangibles related to certain trademarks, customer and supplier relationships and intellectual property related to internally developed software. These intangibles are amortized using the straight-line method over their useful lives ranging between seven to 20 years. | |||||||||||||||
Property and Equipment | |||||||||||||||
Property and equipment is stated on the cost basis and includes computer equipment and other corporate office equipment and furniture. Property and equipment is depreciated on a straight-line basis over the estimated useful lives ranging from three to 12 years. The Company includes property and equipment, net of related accumulated depreciation, in its other assets, net on the accompanying consolidated balance sheets. | |||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||
As of December 31, 2014 and 2013, the carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses were representative of their fair values due to the short-term maturity of these instruments. | |||||||||||||||
The Company follows the requirements of the Fair Value Measurements and Disclosures Topic of the FASB ASC, which establishes a framework for measuring fair value and disclosing fair value measurements by establishing a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: | |||||||||||||||
Level 1 | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||||||||
Level 2 | Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||||||||
Level 3 | Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | ||||||||||||||
As discussed in Note 5, the Company held two interest rate cap agreements at December 31, 2014 and 2013. At December 31, 2013, the Company also held one interest rate swap agreement. The Company holds its interest rate protection agreements to manage, or hedge, interest rate risks related to its floating rate debt. The Company records interest rate protection agreements on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in the consolidated statements of operations as they are not designated as hedges. In accordance with the Fair Value Measurements and Disclosure Topic of the FASB ASC, the Company estimates the fair value of its interest rate protection agreements based on quotes obtained from the counterparties, which are based upon the consideration that would be required to terminate the agreements. Using Level 2 measurements, the Company determined that the total value of the interest rate cap agreements at December 31, 2014 was de minimis. At December 31, 2013, the Company has valued the derivative interest rate cap agreements as an asset of $16,000. The interest rate cap agreements are included in other assets, net, in the accompanying consolidated balance sheets. At December 31, 2013, the Company has valued the derivative interest rate swap agreement using Level 2 measurements as a liability of $1.1 million. The interest rate swap agreement is included in other liabilities in the accompanying consolidated balance sheets. | |||||||||||||||
On an annual basis and periodically when indicators of impairment exist, the Company analyzes the carrying values of its hotel properties and other assets using Level 3 measurements, including a discounted cash flow analysis to estimate the fair value of its hotel properties and other assets taking into account each property’s expected cash flow from operations, holding period and estimated proceeds from the disposition of the property. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. The Company did not identify any properties or other assets with indicators of impairment during 2014, 2013 or 2012. | |||||||||||||||
On an annual basis and periodically when indicators of impairment exist, the Company also analyzes the carrying value of its goodwill using Level 3 measurements, including a discounted cash flow analysis to estimate the fair value of its reporting units. The Company did not identify any properties with indicators of goodwill impairment in 2014, 2013 or 2012. | |||||||||||||||
As of December 31, 2014 and 2013, 71.6% and 70.7% (including the effect of an interest rate swap agreement), respectively, of the Company’s outstanding debt had fixed interest rates. The Company’s carrying value of its debt totaled $1.4 billion as of both December 31, 2014 and 2013. Using Level 3 measurements, including the Company’s weighted average cost of debt ranging from 4.5% to 5.0%, the Company estimates that the fair market value of its debt totaled $1.4 billion as of both December 31, 2014 and 2013. | |||||||||||||||
The following table presents the Company’s assets measured at fair value on a recurring and non-recurring basis at December 31, 2014 and 2013 (in thousands): | |||||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
December 31, 2014: | |||||||||||||||
Interest rate cap derivative agreements | $ | — | $ | — | $ | — | $ | — | |||||||
Life insurance policy (1) | 1,198 | — | 1,198 | — | |||||||||||
Total assets at December 31, 2014 | $ | 1,198 | $ | — | $ | 1,198 | $ | — | |||||||
December 31, 2013: | |||||||||||||||
Interest rate cap derivative agreements | $ | 16 | $ | — | $ | 16 | $ | — | |||||||
Life insurance policy (1) | 1,385 | — | 1,385 | — | |||||||||||
Total assets at December 31, 2013 | $ | 1,401 | $ | — | $ | 1,401 | $ | — | |||||||
-1 | Includes the split life insurance policy for one of the Company’s former associates, which the Company values using Level 2 measurements. These amounts are included in other assets, net on the accompanying consolidated balance sheets, and will be used to reimburse the Company for payments made to the former associate from the related retirement benefit agreement, which is included in accrued payroll and employee benefits on the accompanying consolidated balance sheets. | ||||||||||||||
The following table presents the Company’s liabilities measured at fair value on a recurring and non-recurring basis at December 31, 2014 and 2013 (in thousands): | |||||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
December 31, 2014: | |||||||||||||||
Interest rate swap derivative agreement | $ | — | $ | — | $ | — | $ | — | |||||||
Retirement benefit agreement (1) | 1,198 | — | 1,198 | — | |||||||||||
Total liabilities at December 31, 2014 | $ | 1,198 | $ | — | $ | 1,198 | $ | — | |||||||
December 31, 2013: | |||||||||||||||
Interest rate swap derivative agreement | $ | 1,066 | $ | — | $ | 1,066 | $ | — | |||||||
Retirement benefit agreement (1) | 1,385 | — | 1,385 | — | |||||||||||
Total liabilities at December 31, 2013 | $ | 2,451 | $ | — | $ | 2,451 | $ | — | |||||||
-1 | Includes the retirement benefit agreement for one of the Company’s former associates, which the Company values using Level 2 measurements. The agreement calls for the balance of the retirement benefit agreement to be paid out to the former associate in 10 annual installments, beginning in 2011. As such, the Company has paid the former associate a total of $0.8 million through December 31, 2014, which was reimbursed to the Company using funds from the related split life insurance policy noted above. These amounts are included in accrued payroll and employee benefits in the accompanying consolidated balance sheets. | ||||||||||||||
Revenue Recognition | |||||||||||||||
Room revenue and food and beverage revenue are recognized as earned, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Additionally, some of the Company’s hotel rooms are booked through independent internet travel intermediaries. Revenue for these rooms is booked at the price the Company sold the room to the independent internet travel intermediary less any discount or commission paid. | |||||||||||||||
Other operating revenue consists of revenue derived from incidental hotel services such as telephone/internet, transportation, parking, spa, entertainment and other guest services, along with tenant lease revenues relating to hotel space leased by third parties. Other operating revenue also includes revenue generated by BuyEfficient. Revenues from incidental hotel services and BuyEfficient are recognized in the period the related services are provided or the revenue is earned. | |||||||||||||||
Advertising and Promotion Costs | |||||||||||||||
Advertising and promotion costs are expensed when incurred. Advertising and promotion costs represent the expense for advertising and reservation systems under the terms of the hotel franchise and brand management agreements and general and administrative expenses that are directly attributable to advertising and promotions. | |||||||||||||||
Stock Based Compensation | |||||||||||||||
Compensation expense related to awards of restricted shares and performance shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. | |||||||||||||||
Income Taxes | |||||||||||||||
The Company has elected to be treated as a REIT pursuant to the Internal Revenue Code, as amended (the “Code”). Management believes that the Company has qualified and intends to continue to qualify as a REIT. Therefore, the Company is permitted to deduct distributions paid to its stockholders, eliminating the federal taxation of income represented by such distributions at the company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax (including any applicable alternative minimum tax) on taxable income at regular corporate tax rates. | |||||||||||||||
With respect to taxable subsidiaries, the Company accounts for income taxes in accordance with the Income Taxes Topic of the FASB ASC. Accordingly, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. | |||||||||||||||
The Income Taxes Topic of the FASB ASC addresses how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The guidance requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. | |||||||||||||||
Non-Controlling Interests | |||||||||||||||
The Company’s financial statements include entities in which the Company has a controlling financial interest. Non-controlling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such non-controlling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts, including both the amounts attributable to the Company and non-controlling interests. Income or loss is allocated to non-controlling interests based on their weighted average ownership percentage for the applicable period. The consolidated statements of equity include beginning balances, activity for the period and ending balances for each component of stockholders’ equity, non-controlling interests and total equity. | |||||||||||||||
At December 31, 2014, 2013 and 2012, the non-controlling interest reported in the Company’s financial statements includes Hilton Worldwide’s 25.0% ownership in the Hilton San Diego Bayfront. In addition, the Company is the sole common stockholder of the captive REIT that owns the Doubletree Guest Suites Times Square; however, there are also preferred investors in the captive REIT whose preferred dividends less administrative fees during 2014, 2013 and 2012 are represented as distributions to non-controlling interests on the Company’s statements of operations. | |||||||||||||||
Dividends | |||||||||||||||
In August 2013, the Company’s board of directors reinstated a quarterly dividend payable to the Company’s common stockholders. In addition, the Company currently pays quarterly dividends to the preferred stockholders of its 8.0% Series D Cumulative Redeemable Preferred Stock (“Series D preferred stock”) as declared by the Company’s board of directors. Prior to their redemption dates in March 2013 and May 2013, respectively, the Company also paid quarterly dividends to the preferred stockholders of its 8.0% Series A Cumulative Redeemable Preferred Stock (“Series A preferred stock”) and its Series C Cumulative Convertible Redeemable Preferred Stock (“Series C preferred stock”) as declared by the board of directors. The Company’s ability to pay dividends is dependent on the receipt of distributions from the Operating Partnership. | |||||||||||||||
Earnings Per Share | |||||||||||||||
The Company applies the two-class method when computing its earnings per share as required by the Earnings Per Share Topic of the FASB ASC, which requires the net income per share for each class of stock (common stock and convertible preferred stock) to be calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. To the extent the Company has undistributed earnings in any calendar quarter, the Company will follow the two-class method of computing earnings per share. | |||||||||||||||
The Company follows the requirements of the Earnings Per Share Topic of the FASB ASC, which states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. During 2014 and 2013, distributed earnings representing nonforfeitable dividends of $1.0 million and $0.2 million, respectively, were allocated to the participating securities. There were no distributed earnings representing nonforfeitable dividends allocated to the participating securities during 2012. Undistributed earnings representing nonforfeitable dividends of $0.2 million were allocated to the participating securities during both 2013 and 2012. There were no undistributed earnings representing nonforfeitable dividends allocated to the participating securities during 2014. | |||||||||||||||
In accordance with the Earnings Per Share Topic of the FASB ASC, basic earnings available (loss attributable) to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings available (loss attributable) to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards and the incremental common shares issuable upon the exercise of stock options, using the more dilutive of either the two-class method or the treasury stock method. | |||||||||||||||
The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): | |||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | |||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 87,939 | $ | 70,001 | $ | 49,557 | |||||||||
Income from consolidated joint venture attributable to non-controlling interest | -6,676 | -4,013 | -1,761 | ||||||||||||
Distributions to non-controlling interest | -32 | -32 | -31 | ||||||||||||
Preferred stock dividends and redemption charges | -9,200 | -19,013 | -29,748 | ||||||||||||
Dividends paid on unvested restricted stock compensation | -969 | -201 | — | ||||||||||||
Undistributed income allocated to unvested restricted stock compensation | — | -235 | -203 | ||||||||||||
Numerator for basic and diluted earnings available to common stockholders | $ | 71,062 | $ | 46,507 | $ | 17,814 | |||||||||
Denominator: | |||||||||||||||
Weighted average basic and diluted common shares outstanding | 192,674 | 161,784 | 127,027 | ||||||||||||
Basic and diluted earnings available to common stockholders per common share | $ | 0.37 | $ | 0.29 | $ | 0.14 | |||||||||
The Company’s unvested restricted shares associated with its long-term incentive plan and shares associated with common stock options have been excluded from the above calculation of earnings per share for the years ended December 31, 2014, 2013 and 2012, as their inclusion would have been anti-dilutive. Prior to their redemption in May 2013, the shares of the Company’s Series C preferred stock issuable upon conversion were excluded from the above calculation of earnings per share for the year ended December 31, 2012, as their inclusion would have been anti-dilutive. | |||||||||||||||
Segment Reporting | |||||||||||||||
The Company reports its consolidated financial statements in accordance with the Segment Reporting Topic of the FASB ASC. Currently, the Company operates in one segment, operations held for investment. | |||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||
In April 2014, the FASB issued Accounting Standards Update No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU No. 2014-08”). ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. Under ASU No. 2014-08, a discontinued operation is (1) a component of an entity or group of components that has been disposed of by sale, disposed of other than by sale or is classified as held for sale that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results, or (2) an acquired business or nonprofit activity that is classified as held for sale on the date of the acquisition. A strategic shift that has or will have a major effect on an entity’s operations and financial results could include the disposal of (1) a major line of business, (2) a major geographical area (3) a major equity method investment, or (4) other major parts of an entity. ASU No. 2014-08 expands the disclosures for discontinued operations and requires new disclosures related to individually material disposals that do not meet the definition of a discontinued operation, an entity’s continuing involvement with a discontinued operation following the disposal date and retained equity method investments in a discontinued operation. ASU No. 2014-08 is effective prospectively for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within that year. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company’s early adoption of ASU No. 2014-08 in the first quarter of 2014 did not have any effect on its financial statements as the Company had no disposals (or classifications as held for sale) during the year ended December 31, 2014. In the future, when the Company has disposals (or classifications as held for sale), it will be required to determine whether such disposal meets the discontinued operations requirements under ASU No. 2014-08. Additional disclosures may be required. | |||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU No. 2014-09”). The core principal of ASU No. 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principal, an entity will need to apply a five-step model: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 will become effective during the first quarter of 2017, and will require either a full retrospective approach or a modified retrospective approach, with early adoption prohibited. The Company is currently evaluating the impact that ASU No. 2014-09 will have on its financial statements. | |||||||||||||||
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU No. 2014-12”), which requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. ASU 2014-12 will become effective during the first quarter of 2016. Early adoption is permitted. ASU 2014-12 may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. ASU No. 2014-12 will not have an effect on the Company’s financial statements unless the Company issues grants in the future that fall within its scope. | |||||||||||||||
Investment_in_Hotel_Properties
Investment in Hotel Properties | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Investment in Hotel Properties | |||||||||||
Investment in Hotel Properties | 3. Investment in Hotel Properties | ||||||||||
Investment in hotel properties, net consisted of the following (in thousands): | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Land | $ | 570,011 | $ | 439,304 | |||||||
Buildings and improvements | 3,237,596 | 2,977,458 | |||||||||
Furniture, fixtures and equipment | 450,057 | 414,192 | |||||||||
Intangibles | 147,947 | 171,889 | |||||||||
Franchise fees | 1,167 | 1,346 | |||||||||
Construction in process | 68,275 | 34,643 | |||||||||
4,475,053 | 4,038,832 | ||||||||||
Accumulated depreciation and amortization | -936,924 | -807,450 | |||||||||
$ | 3,538,129 | $ | 3,231,382 | ||||||||
Acquisitions - 2014 | |||||||||||
In June 2014, the Company acquired approximately seven acres of land underlying the Fairmont Newport Beach for $11.0 million, using net proceeds from the March 2014 issuance of its common stock in connection with its Equity Distribution Agreements, combined with cash on hand. Prior to the Company’s acquisition, the land was leased to the Company by a third party. | |||||||||||
In July 2014, the Company purchased the 544-room Marriott Wailea for a net purchase price of $325.6 million, which was comprised of $265.6 million in cash, including $4.4 million of proration credits and unrestricted and restricted cash received from the seller, and $60.0 million of the Company’s common stock issued directly to the seller (the “Wailea stock consideration”). The acquisition was funded with proceeds received from the Company’s June 2014 common stock offering, as well as with the Wailea stock consideration, consisting of 4,034,970 shares of the Company’s common stock valued at $60.0 million. The Wailea stock consideration was determined by dividing $60.0 million by $14.87, which was the NYSE closing price of the Company’s common stock on June 19, 2014, the date the Marriott Wailea purchase and sale agreement was executed. In connection with this acquisition, the Company entered into a registration rights agreement requiring the Company to register the Wailea stock consideration. On July 17, 2014, the Company filed a prospectus supplement with the SEC, which registered the shares comprising the Wailea stock consideration for resale in accordance with the registration rights agreement. Based on the $14.87 closing price of the Company’s common stock on the NYSE on July 17, 2014, the date the acquisition closed, the total purchase price of the Marriott Wailea for accounting purposes was also $325.6 million. The Company recorded the acquisition at fair value using an independent third-party analysis, with the purchase price allocated to investment in hotel properties and hotel working capital assets and liabilities. The Company recognized acquisition related costs of $0.5 million during 2014, which are included in corporate overhead on the Company’s consolidated statements of operations. The results of operations for the Marriott Wailea have been included in the Company’s statements of operations from the acquisition date of July 17, 2014 through the year ended December 31, 2014. Subsequent to the Company’s acquisition of the hotel, three rooms were temporarily taken out of service, leaving 541 rooms available to sell. | |||||||||||
The fair values of the assets acquired and liabilities assumed at the Marriott Wailea’s acquisition date were allocated based on an independent third-party analysis. The following table summarizes the fair values of assets acquired, liabilities assumed and equity issued in this acquisition (in thousands): | |||||||||||
Assets: | |||||||||||
Investment in hotel properties | $ | 327,035 | |||||||||
Accounts receivable | 3,122 | ||||||||||
Inventory | 75 | ||||||||||
Prepaid expenses | 238 | ||||||||||
Other assets | 150 | ||||||||||
Total assets acquired | 330,620 | ||||||||||
Liabilities: | |||||||||||
Accounts payable | 3,534 | ||||||||||
Accrued payroll and employee benefits | 142 | ||||||||||
Other current liabilities | 1,371 | ||||||||||
Other liabilities | 15 | ||||||||||
Total liabilities assumed | 5,062 | ||||||||||
Total equity issued directly to seller | 60,000 | ||||||||||
Total cash paid for acquisition | $ | 265,558 | |||||||||
Investment in hotel properties was allocated to land ($119.7 million), buildings and improvements ($194.2 million), furniture, fixtures and equipment ($8.2 million), and intangibles ($4.9 million) related to advanced bookings, above/(below) market lease agreements, and in-place lease agreements. Details of the intangibles acquired are as follows (in thousands): | |||||||||||
Value at | Weighted Average | ||||||||||
Acquisition | Expected Life | ||||||||||
Advanced bookings | $ | 4,207 | 41 months | ||||||||
Above/(Below) market lease agreements, net | 15 | 1 month | |||||||||
In-place lease agreements | 686 | 3 to 14 months | |||||||||
Total intangibles related to the 2014 acquisition | 4,908 | 44 to 55 months | |||||||||
Accumulated amortization | -533 | ||||||||||
Net book value of intangibles related to 2014 acquisition | $ | 4,375 | |||||||||
During the year ended December 31, 2014, the Company recorded amortization expense related to its Marriott Wailea intangibles as follows (in thousands): | |||||||||||
2014 | |||||||||||
Advanced bookings | $ | 481 | |||||||||
Above/(Below) market lease agreements, net | -21 | ||||||||||
In-place lease agreements | 73 | ||||||||||
Total amortization expense on intangibles related to the 2014 acquisition | $ | 533 | |||||||||
Acquisitions - 2013 | |||||||||||
In May 2013, the Company purchased the 250-room Hilton New Orleans St. Charles for a net purchase price of $59.1 million, including $0.2 million of proration credits and unrestricted cash received from the seller. The acquisition was funded with $53.2 million of proceeds generated by the Company’s January 2013 sale of four hotels and a commercial laundry facility located in Rochester, Minnesota (see Note 4), as well as with proceeds received from the Company’s February 2013 issuance of common stock. The Company recorded the acquisition at fair value using an independent third-party analysis, with the purchase price allocated to investment in hotel properties and hotel working capital assets and liabilities. The Company incurred acquisition-related costs of $0.4 million during 2013, which are included in corporate overhead on the Company’s consolidated statements of operations. The results of operations for the Hilton New Orleans St. Charles have been included in the Company’s consolidated statements of operations from the acquisition date of May 1, 2013 through the year ended December 31, 2014. | |||||||||||
In July 2013, the Company purchased the 1,053-room Boston Park Plaza for a net purchase price of $248.0 million, including $2.0 million of proration credits, unrestricted and restricted cash and other adjustments received from the seller. The acquisition was funded with $92.3 million of proceeds generated by the Company’s January 2013 sale of four hotels and a commercial laundry facility located in Rochester, Minnesota (see Note 4), the assumption of a $119.2 million non-recourse loan secured by the hotel, as well as with proceeds received from the Company’s February 2013 issuance of common stock and with cash on hand. The Company recorded the acquisition at fair value using an independent third-party analysis, with the purchase price allocated to investment in hotel properties, hotel working capital assets, notes payable and hotel working capital liabilities. The Company incurred acquisition-related costs of $0.9 million during 2013, which are included in corporate overhead on the Company’s consolidated statements of operations. The results of operations for the Boston Park Plaza have been included in the Company’s consolidated statements of operations from the acquisition date of July 2, 2013 through the year ended December 31, 2014. | |||||||||||
In December 2013, the Company purchased the 802-room Hyatt Regency San Francisco for a net purchase price of $262.5 million, including $5.5 million of purchase price adjustments comprised of restricted cash and other adjustments received from the seller. The acquisition was funded with proceeds generated by the Company’s November 2013 issuance of common stock. The Company recorded the acquisition at fair value using an independent third-party analysis, with the purchase price and other adjustments allocated to investment in hotel properties, prepaid expenses and other current liabilities. The Company incurred acquisition-related costs of $0.5 million during 2013, which are included in corporate overhead on the Company’s consolidated statements of operations. The results of operations for the Hyatt Regency San Francisco have been included in the Company’s consolidated statements of operations from the acquisition date of December 2, 2013 through the year ended December 31, 2014. | |||||||||||
Acquisitions - 2012 | |||||||||||
In June 2012, the Company purchased the leasehold interest in the 417-room Wyndham Chicago for a contractual purchase price of $88.425 million. The Company funded the acquisition with $29.7 million of cash on hand (including $0.3 million of proration credits) and the issuance of 5,454,164 shares of the Company’s common stock, the “Wyndham stock consideration.” The Wyndham stock consideration was determined by dividing $58.425 million by the product of (1) the closing price of $10.40 on the NYSE of the Company’s common stock on May 2, 2012 and (2) 1.03. In connection with this acquisition, the Company entered into a registration rights agreement requiring the Company to register the Wyndham stock consideration. The Company prepared the registration statement on Form S-3, which was filed with the SEC as required on June 4, 2012. Based on the $9.38 closing price of the Company’s common stock on the NYSE on June 4, 2012, the date the acquisition closed, the total purchase price of the Wyndham Chicago hotel for accounting purposes was $81.16 million, excluding proration adjustments and closing costs. Immediately upon acquisition, the Company rebranded the hotel the Hyatt Chicago Magnificent Mile. The Company recorded the acquisition at fair value using an independent third-party analysis, with the purchase price allocated to investment in hotel properties, hotel working capital assets and liabilities, obligations under capital lease and the Company’s common stock. During 2012, the Company incurred acquisition-related costs of $1.3 million, which are included in corporate overhead on the Company’s consolidated statements of operations. The results of operations for the Hyatt Chicago Magnificent Mile have been included in the Company’s consolidated statements of operations from the acquisition date of June 4, 2012 through the year ended December 31, 2014. | |||||||||||
In July 2012, the Company purchased the 357-room Hilton Garden Inn Chicago Downtown/Magnificent Mile for a net purchase price of $90.3 million, including $1.45 million of proration credits. The Company recorded the acquisition at fair value using an independent third-party analysis, with the purchase price allocated to investment in hotel properties and hotel working capital assets and liabilities. The Company incurred acquisition-related costs of $0.7 million and $0.2 million during 2012 and 2011, respectively, which are included in corporate overhead on the Company’s consolidated statements of operations. The results of operations for the Hilton Garden Inn Chicago Downtown/Magnificent Mile have been included in the Company’s consolidated statements of operations from the acquisition date of July 19, 2012 through the year ended December 31, 2014. | |||||||||||
Acquired properties are included in the Company’s results of operations from the date of acquisition. The following unaudited pro forma results of operations reflect the Company’s results as if the acquisitions of the Marriott Wailea in July 2014, the Hilton New Orleans St. Charles in May 2013, the Boston Park Plaza in July 2013, the Hyatt Regency San Francisco in December 2013, the Hyatt Chicago Magnificent Mile in June 2012 and the Hilton Garden Inn Chicago Downtown/Magnificent Mile in July 2012 had occurred on January 1, 2012. In the Company’s opinion, all significant adjustments necessary to reflect the effects of the acquisitions have been made (in thousands, except per share data): | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | $ | 1,175,367 | $ | 1,100,354 | $ | 1,063,094 | |||||
Income available (loss attributable) to common stockholders from continuing operations | $ | 74,811 | $ | 19,931 | $ | -9,742 | |||||
Income (loss) per diluted share available (attributable) to common stockholders from continuing operations | $ | 0.39 | $ | 0.12 | $ | -0.08 | |||||
For the year ended December 31, 2014, the Company included $27.0 million of revenues, and net income of $3.5 million in its consolidated statements of operations related to the Company’s 2014 acquisitions. For the year ended December 31, 2013, the Company included $51.0 million of revenues, and net income of $2.8 million in its consolidated statements of operations related to the Company’s 2013 acquisitions. For the year ended December 31, 2012, the Company included $27.7 million of revenues, and a net loss of $1.1 million in its consolidated statements of operations related to the Company’s 2012 acquisitions. | |||||||||||
Intangible Assets | |||||||||||
As of December 31, 2014 and 2013, intangible assets included in the Company’s investment in hotel properties, net consisted of the following (in thousands): | |||||||||||
2014 | 2013 | ||||||||||
Advanced bookings (1) | $ | 10,621 | $ | 35,154 | |||||||
Easement agreement (2) | 9,727 | 9,727 | |||||||||
Ground/air lease agreements (3) | 121,850 | 121,850 | |||||||||
In-place lease agreements (4) | 6,795 | 6,223 | |||||||||
Above/(below) market lease agreements, net (5) | -3,896 | -3,915 | |||||||||
Below market management agreement (6) | 2,850 | 2,850 | |||||||||
147,947 | 171,889 | ||||||||||
Accumulated amortization | -22,453 | -44,426 | |||||||||
$ | 125,494 | $ | 127,463 | ||||||||
Amortization expense on these intangible assets for the years ended December 31, 2014, 2013 and 2012 consisted of the following (in thousands): | |||||||||||
2014 | 2013 | 2012 | |||||||||
Advanced bookings (1) | $ | 1,769 | $ | 4,560 | $ | 14,824 | |||||
Ground/air lease agreements (3) | 4,113 | 4,113 | 4,113 | ||||||||
In-place lease agreements (4) | 830 | 454 | 348 | ||||||||
Above/(below) market lease agreements, net (5) | -304 | -148 | -6 | ||||||||
Below market management agreement (6) | 469 | 469 | 212 | ||||||||
$ | 6,877 | $ | 9,448 | $ | 19,491 | ||||||
-1 | Advanced bookings consist of advance deposits related to the purchases of the Boston Park Plaza, the Hyatt Regency San Francisco, and the Marriott Wailea. The contractual advanced hotel bookings were recorded at a discounted present value based on estimated collectability, and are amortized using the straight-line method based over the periods the amounts are expected to be collected. The amortization expense for contractual advanced hotel bookings is included in depreciation and amortization expense in the Company’s consolidated statements of operations. The amounts will be fully amortized for the Boston Park Plaza, the Hyatt Regency San Francisco and the Marriott Wailea by June 2018, December 2017 and July 2018, respectively. | ||||||||||
-2 | The Easement agreement at the Hilton Times Square was valued at fair value at the date of acquisition. The Hilton Times Square easement agreement has an indefinite useful life, and, therefore, is not amortized. This non-amortizable intangible asset is reviewed annually for impairment and more frequently if events or circumstances indicate that the asset may be impaired. If a non-amortizable intangible asset is subsequently determined to have a finite useful life, the intangible asset will be written down to the lower of its fair value or carrying amount and then amortized prospectively, based on the remaining useful life of the intangible asset. | ||||||||||
-3 | Ground/air lease agreements at the Doubletree Guest Suites Times Square, the Hilton Times Square and the JW Marriott New Orleans were valued at fair value at the dates of acquisition. The agreements are amortized using the straight-line method over the remaining non-cancelable terms of the related agreements, which range from between approximately 22 and 76 years as of December 31, 2014. The amortization expense for the agreements is included in property tax, ground lease and insurance expense in the Company’s consolidated statements of operations. | ||||||||||
-4 | In-place lease agreements at the Boston Park Plaza, the Doubletree Guest Suites Times Square, the Hilton New Orleans St. Charles, the Hilton San Diego Bayfront, the Hyatt Regency San Francisco and the Marriott Wailea, were valued at fair value at the dates of acquisition. The agreements are amortized using the straight-line method over the remaining non-cancelable terms of the related agreements, which range from between approximately two months and 13 years as of December 31, 2014. The amortization expense for the agreements is included in depreciation and amortization expense in the Company’s consolidated statements of operations. | ||||||||||
-5 | The above/(below) market lease agreements, net consist of unfavorable tenant lease liabilities at the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hyatt Regency San Francisco and the Marriott Wailea, and favorable tenant lease assets at the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and the Marriott Wailea. These agreements were valued at fair value at the dates of acquisition, and are amortized using the straight-line method over the remaining non-cancelable terms of the related agreements, which range from between approximately two months and 17 years as of December 31, 2014. The amortization expense for the agreements is included in other operating revenue in the Company’s consolidated statements of operations. | ||||||||||
-6 | The below market management agreement at the Hilton Garden Inn Chicago Downtown/Magnificent Mile was valued at fair value at the acquisition date. The agreement is comprised of two components, one for the management of the Hilton Garden Inn Chicago Downtown/Magnificent Mile, and the other for the potential management of a future hotel. The agreement is amortized using the straight-line method over the remaining non-cancelable terms of the two components, approximately 3 and 8 years each as of December 31, 2014. The amortization expense for the agreement is included in property general and administrative expense in the Company’s consolidated statements of operations. | ||||||||||
For the next five years, amortization expense for the intangible assets noted above is expected to be as follows (in thousands): | |||||||||||
2015 | $ | 7,334 | |||||||||
2016 | $ | 7,239 | |||||||||
2017 | $ | 7,206 | |||||||||
2018 | $ | 5,673 | |||||||||
2019 | $ | 4,341 | |||||||||
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Discontinued Operations | |||||||||||
Discontinued Operations | 4. Discontinued Operations | ||||||||||
In December 2014, the Company recorded additional expense of $0.4 million related to workers’ compensation claims which originated during the Company’s periods of ownership at several hotels. The Company sold these hotels during 2004, 2005, 2010 and 2013. | |||||||||||
In January 2013, the Company sold a four-hotel, 1,222-room portfolio (the “Rochester Hotels”) and a commercial laundry facility (together with the Rochester Hotels, the “Rochester Portfolio”) in Rochester, Minnesota, to an unaffiliated third party, for net proceeds of $195.6 million, of which $145.7 million was deposited with an accommodator in order to facilitate tax-deferred exchanges. The Rochester Hotels include the 660-room Kahler Grand, the 271-room Kahler Inn & Suites, the 202-room Marriott Rochester and the 89-room Residence Inn by Marriott Rochester. The Company recognized a net gain on the sale of $51.6 million. The Company retained a $25.0 million preferred equity investment (the “Preferred Equity Investment”) in the Rochester Hotels that yields an 11% dividend, resulting in a deferred gain on the sale of $25.0 million. The $25.0 million gain will be deferred until the Preferred Equity Investment is redeemed. The Preferred Equity Investment is recorded at face value on the Company’s consolidated balance sheets net of the deferred gain, resulting in a net book value of zero on the Company’s consolidated balance sheets as of both December 31, 2014 and 2013. During the years ended December 31, 2014 and 2013, the Company recognized $2.8 million and $2.6 million in dividends on the Preferred Equity Investment, respectively. All of the dividends earned on the Preferred Equity Investment are included in interest and other income on the Company’s consolidated statements of operations. The Company also provided a $3.7 million working cash advance to the buyer, resulting in a deferred gain on the sale of $3.7 million. The $3.7 million gain will be deferred until the Company is repaid from the Rochester Portfolio’s available cash flow. The working cash advance is recorded at face value on the Company’s consolidated balance sheets net of the deferred gain, resulting in a net book value of zero on the Company’s consolidated balance sheets as of both December 31, 2014 and 2013. | |||||||||||
Concurrent with the Rochester Portfolio sale, the Company extinguished the outstanding $26.7 million mortgage secured by the Kahler Grand for a total cost of $29.8 million, prepaid the $0.4 million loan secured by the commercial laundry facility, and recorded a loss on extinguishment of debt of $3.1 million which is included in discontinued operations on the Company’s consolidated statements of operations. The Company reclassified the Rochester Portfolio’s results of operations for January 2013 and the year ended December 31, 2012 to discontinued operations on its consolidated statements of operations. | |||||||||||
In addition, at the time the Company sold the Rochester Portfolio, the Company retained a liability not to exceed $14.0 million related to the Rochester Portfolio’s pension plan, which could be triggered in certain circumstances, including termination of the pension plan. The recognition of the $14.0 million pension plan liability reduced the Company’s gain on the sale of the Rochester Portfolio. In May 2014, the Company was released from $7.0 million of its pension plan liability, causing the Company to recognize additional gain on the sale of the Rochester Portfolio of $7.0 million, which is included in discontinued operations for the year ended December 31, 2014. The pension plan liability, totaling $7.0 million and $14.0 million as of December 31, 2014 and 2013, respectively, is included in other liabilities on the Company’s consolidated balance sheets. The remaining $7.0 million gain will be recognized, if at all, when and to the extent the Company is released from any potential liability related to the Rochester Portfolio’s pension plan. | |||||||||||
In accordance with the Contingencies Topic of the FASB ASC, which requires a liability be recorded based on the Company’s estimate of the probable cost of the resolution of a contingency, the Company accrued $0.3 million when it sold the Rochester Portfolio related to potential future costs for certain capital expenditures at one of the hotels in the Rochester Portfolio. During the second quarter of 2014, the Company determined that its total costs for these capital expenditures may range from $2.0 million to $3.0 million. As such, the Company accrued an additional $1.8 million during the second quarter of 2014 in accordance with the Contingencies Topic of the FASB ASC, which is included in discontinued operations for the year ended December 31, 2014, bringing the total amount accrued for this contingency to $2.1 million. During 2014, the Company paid $1.3 million of the liability, reducing the accrued balance for this contingency to $0.8 million as of December 31, 2014. The Company expects to resolve this contingency in early 2015. | |||||||||||
Prior to the sale of the Rochester Portfolio, pension liability adjustments related to the Rochester Portfolio’s defined benefit retirement plan were recorded as other comprehensive loss. The following table details the activity in accumulated other comprehensive loss in January 2013 due to the sale of the Rochester Portfolio (in thousands): | |||||||||||
One Month Ended | Affected Line in the Company’s Statements of | ||||||||||
January 31, 2013 | Operations and Comprehensive Income | ||||||||||
Beginning balance of accumulated other comprehensive loss | $ | -5,335 | |||||||||
Sale of Rochester Portfolio — pension liability adjustment | 5,335 | Income from discontinued operations | |||||||||
Ending balance of accumulated other comprehensive loss | $ | — | |||||||||
During 2012, the Company sold four hotels and an office building adjacent to one of the sold hotels. In August 2012, the Company sold the Marriott Del Mar located in San Diego, California for net proceeds of $17.7 million, including the assumption of the existing mortgage secured by the hotel which totaled $47.1 million on the date of sale, and recognized a gain on the sale of $25.5 million. In addition, the Company wrote off $48,000 in deferred financing fees in conjunction with the buyer’s assumption of the debt secured by the hotel. The Company reclassified the hotel’s results of operations for the first eight months of 2012 to discontinued operations on its consolidated statements of operations. | |||||||||||
In September 2012, the Company sold a portfolio of assets that included the Doubletree Guest Suites Minneapolis, the Hilton Del Mar, the Marriott Troy (located in Minneapolis, Minnesota, San Diego, California, and Troy, Michigan, respectively) and an office building adjacent to the Marriott Troy for net proceeds of $28.6 million, including the assumptions of three separate mortgages secured by the hotels totaling $75.6 million, as well as a $2.2 million liability for deferred management fees payable to the Marriott Troy’s third-party manager. The Company recognized a net gain on the sale of $12.7 million. In addition, the Company wrote off $0.1 million in deferred financing fees in conjunction with the buyer’s assumption of the debt secured by the three hotels. The Company reclassified the results of operations for the Doubletree Guest Suites Minneapolis, the Hilton Del Mar, the Marriott Troy and the office building to discontinued operations for the first nine months of 2012 on its consolidated statements of operations. | |||||||||||
The following table sets forth the discontinued operations for the years ended December 31, 2014, 2013 and 2012 for the four hotels and the commercial laundry facility sold in 2013, and the four hotels and the office building sold in 2012 (in thousands): | |||||||||||
2014 | 2013 | 2012 | |||||||||
Operating revenues | $ | — | $ | 3,690 | $ | 100,861 | |||||
Operating expenses | -350 | -3,686 | -71,089 | ||||||||
Interest expense | — | -99 | -6,490 | ||||||||
Depreciation and amortization expense | — | — | -13,164 | ||||||||
Loss on extinguishment of debt | — | -3,115 | — | ||||||||
Gain on sale of hotels and other assets, net | 5,199 | 51,620 | 38,292 | ||||||||
Income from discontinued operations | $ | 4,849 | $ | 48,410 | $ | 48,410 | |||||
Interest_Rate_Derivative_Agree
Interest Rate Derivative Agreements | 12 Months Ended |
Dec. 31, 2014 | |
Interest Rate Derivative Agreements | |
Interest Rate Derivative Agreements | 5. Interest Rate Derivative Agreements |
At December 31, 2014 and 2013, the Company held two interest rate cap agreements. At December 31, 2013, the Company also held one interest rate swap agreement. The Company holds its interest rate derivative agreements in order to manage its exposure to the interest rate risks related to its floating rate debt. The first interest rate cap agreement is on the Hilton San Diego Bayfront mortgage, which mortgage currently bears an interest rate of one-month LIBOR plus 225 basis points. The initial interest rate cap agreement, whose strike rate was 3.75%, matured in April 2013. In April 2013, the Company purchased a new interest rate cap agreement on the Hilton San Diego Bayfront mortgage for a cost of $12,000, which extended the maturity date from April 2013 to April 2015. The new interest rate cap agreement on the Hilton San Diego Bayfront continues to cap the LIBOR rate at 3.75%. The notional amount of the related debt capped totaled $117.0 million at both December 31, 2014 and 2013. The second interest rate cap agreement is on the Doubletree Guest Suites Times Square mortgage, which mortgage currently bears an interest rate of one-month LIBOR plus 325 basis points. The Doubletree Guest Suites Times Square cap agreement caps the LIBOR rate at 4.0% until October 2015. The notional amount of the related debt capped totaled $177.4 million and $179.6 million at December 31, 2014 and 2013, respectively. | |
At December 31, 2013, the Company held an interest rate swap agreement on the JW Marriott New Orleans mortgage. The interest rate swap agreement capped the LIBOR interest rate on the underlying debt at a total interest rate of 5.45%, and the maturity date was in September 2015. The notional amount of the related debt totaled $39.8 million as of December 31, 2013. In conjunction with the Company’s refinancing of the mortgage secured by the JW Marriott New Orleans in December 2014 (see Note 7), the Company paid a fee of $0.6 million to terminate the interest rate swap agreement. | |
None of the interest rate derivative agreements qualify for effective hedge accounting treatment. Accordingly, changes in the fair value of the Company’s interest rate derivative agreements resulted in net gain of $0.5 million for both the years ended December 31, 2014 and 2013, and a net loss of $0.4 million for the year ended December 31, 2012, which have been reflected as decreases in interest expense for 2014 and 2013, and as an increase in interest expense for 2012. As of December 31, 2014, the fair values of the interest rate cap agreements were de minimus. As of December 31, 2013, the fair values of the interest rate cap agreements totaled an asset of $16,000. The interest rate cap agreements are included in other assets, net on the Company’s consolidated balance sheets. The fair value of the interest rate swap agreement was a liability of zero and $1.1 million as of December 31, 2014 and 2013, respectively, and is included in other liabilities on the Company’s consolidated balance sheet as of December 31, 2013. | |
Other_Assets
Other Assets | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Other Assets | ||||||||
Other Assets | 6. Other Assets | |||||||
Other assets, net consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Property and equipment, net | $ | 2,127 | $ | 2,478 | ||||
Land held for development | 188 | 188 | ||||||
Intangibles, net | 6,677 | 7,277 | ||||||
Interest rate cap derivative agreements | — | 16 | ||||||
Cash trap receivables | — | 4,443 | ||||||
Other receivables | 2,094 | 3,942 | ||||||
Other | 3,399 | 2,762 | ||||||
$ | 14,485 | $ | 21,106 | |||||
As of December 31, 2014 and 2013, property and equipment, net consisted of the following (in thousands): | ||||||||
2014 | 2013 | |||||||
Cost basis | $ | 11,573 | $ | 10,933 | ||||
Accumulated depreciation | -9,446 | -8,455 | ||||||
Property and equipment, net | $ | 2,127 | $ | 2,478 | ||||
The Company’s other assets, net as of December 31, 2014 and 2013, include BuyEfficient’s intangible assets totaling $6.7 million and $7.3 million, respectively, net of accumulated amortization related to certain trademarks, customer and supplier relationships and intellectual property related to internally developed software. These intangibles are amortized using the straight-line method over their useful lives ranging between seven and 20 years. Accumulated amortization totaled $2.4 million and $1.8 million at December 31, 2014 and 2013, respectively. Amortization expense totaled $0.6 million for the years ended December 31, 2014, 2013 and 2012. For the next five years, amortization expense for the BuyEfficient intangible assets is expected to be as follows (in thousands): | ||||||||
2015 | $ | 600 | ||||||
2016 | $ | 600 | ||||||
2017 | $ | 600 | ||||||
2018 | $ | 351 | ||||||
2019 | $ | 337 | ||||||
As of December 31, 2013, $4.4 million of the Company’s cash remained trapped by the lender associated with the mortgage secured by the Hilton Del Mar, which the Company sold in 2012, and whose mortgage was assumed by the buyer. In February 2014, the lender released the cash, and the entire $4.4 million was returned to the Company. | ||||||||
Notes_Payable
Notes Payable | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Notes Payable | |||||||||||
Notes Payable | 7. Notes Payable | ||||||||||
Notes payable consisted of the following at December 31 (in thousands): | |||||||||||
2014 | 2013 | ||||||||||
Notes payable requiring payments of interest and principal, with fixed rates ranging from 4.12% and 5.95% at December 31, 2014, and 4.4% and 6.6% at December 31, 2013; maturing at dates ranging from May 2015 through January 2025. The notes are collateralized by first deeds of trust on 14 hotel properties at both December 31, 2014 and 2013. | $ | 1,023,780 | $ | 993,164 | |||||||
Note payable requiring payments of interest and principal, bearing a blended rate of one-month LIBOR plus 225 basis points at December 31, 2014, and three-month LIBOR plus 325 basis points at December 31, 2013; maturing in August 2019. The note is collateralized by a first deed of trust on one hotel property. | 228,296 | 231,451 | |||||||||
Note payable requiring payments of interest only through October 2013, and interest and principal thereafter, with a blended interest rate of one-month LIBOR plus 325 basis points; maturing in October 2018. The note is collateralized by a first deed of trust on one hotel property. | 177,216 | 179,460 | |||||||||
Total notes payable | 1,429,292 | 1,404,075 | |||||||||
Less: current portion | -121,328 | -23,289 | |||||||||
Notes payable, less current portion | $ | 1,307,964 | $ | 1,380,786 | |||||||
Notes Payable Transactions – 2014 | |||||||||||
In August 2014, the Company amended the mortgage secured by the Hilton San Diego Bayfront, which mortgage originally included the syndication of four lenders. In conjunction with the amendment and in accordance with the Debt Topic of the FASB ASC, the Company analyzed each of the four lenders to determine if their participation in the refinancing should be accounted for as a modification or as an extinguishment of their portion of the original loan. As a result of the Company’s assessments, three of the lenders’ participations were deemed to be modifications of the original loan, and the applicable amounts of unamortized deferred financing fees continue to be capitalized and amortized over the term of the refinanced debt. In conjunction with the amendment, the Company paid additional deferred financing fees of $1.3 million to these three lenders, which are also amortized over the term of the refinanced debt. During 2014, the Company paid $0.1 million in loan fees to third parties related to the modifications, which were recorded in the Company’s results of operations as a component of interest expense. The portion of the loan related to the lender who chose not to participate in the refinancing was determined to be an extinguishment of the original loan, and as a result, $0.5 million of the unamortized balance of the applicable deferred financing fees were expensed during 2014, and recorded in the Company’s results of operations as loss on extinguishment of debt. In addition, the Company paid the lender $25,000 in costs associated with the extinguishment of debt, which is also included in the Company’s results of operations as loss on extinguishment of debt. The amended loan extends the loan’s maturity from April 2016 to August 2019, and reduces the loan’s interest rate from three-month LIBOR plus 325 basis points to one-month LIBOR plus 225 basis points. | |||||||||||
In December 2014, the Company repaid the $38.9 million mortgage secured by the JW Marriott New Orleans, using proceeds received from a new $90.0 million mortgage secured by the JW Marriott New Orleans. The new loan extends the maturity date from September 2015 to December 2024. The new loan is subject to a 30-year amortization schedule, and reduces the interest rate from 5.45% under a related interest rate swap agreement to a fixed rate of 4.15%. In conjunction with its repayment of the original mortgage, the Company wrote off $39,000 of unamortized deferred financing fees, which are included in loss on extinguishment of debt in the Company’s consolidated statements of operations, and paid a fee of $0.6 million to terminate the related interest rate swap agreement. In addition, the Company paid deferred financing fees of $0.6 million related to the new loan, which are amortized over the term of the new loan. | |||||||||||
Also in December 2014, the Company extinguished the $67.1 million mortgage secured by the Embassy Suites La Jolla for a total cost of $71.1 million, and recorded a loss on extinguishment of debt of $4.0 million. The extinguishment was funded using proceeds received from a new $65.0 million mortgage secured by the Embassy Suites La Jolla, along with cash on hand. The new loan is subject to a 30-year amortization schedule, reduces the interest rate from a fixed rate of 6.6% to a fixed rate of 4.12%, and extends the maturity date from June 2019 to January 2025. In conjunction with its repayment of the original mortgage, the Company wrote off $43,000 of unamortized deferred financing fees, which are included in loss on extinguishment of debt in the Company’s consolidated statements of operations. In addition, the Company paid deferred financing fees of $0.4 million related to the new loan, which are amortized over the term of the new loan. | |||||||||||
As of December 31, 2014, the Company has $150.0 million available for use under its senior unsecured revolving credit facility. An accordion option under the credit facility allows the Company to request additional lender commitments of up to $350.0 million. The credit facility’s interest rate is based on a pricing grid with a range of 175 to 350 basis points, depending on the Company’s leverage ratio, and it matures in November 2015 with an option to extend to November 2016. | |||||||||||
Notes Payable Transactions – 2013 | |||||||||||
In January 2013, the Company repurchased $42.0 million of the Senior Notes, and redeemed the remaining $16.0 million of the Senior Notes. The Company funded the total $58.0 million in Senior Note repurchases and redemptions with available cash, leaving no future amounts outstanding related to the Senior Notes. | |||||||||||
Concurrent with the Rochester Portfolio sale in January 2013, the Company extinguished the outstanding $26.7 million mortgage secured by the Kahler Grand for a total cost of $29.8 million, prepaid the $0.4 million loan secured by the commercial laundry facility, and recorded a loss on extinguishment of debt of $3.1 million which is included in discontinued operations. | |||||||||||
In conjunction with the Company’s acquisition of the Boston Park Plaza in July 2013, the Company assumed a $119.2 million non-recourse mortgage secured by the hotel. The mortgage bears interest at a fixed rate of 4.4%, and matures in February 2018. | |||||||||||
Total interest incurred and expensed on the notes payable is as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | |||||||||
Interest expense on debt and capital lease obligations | $ | 70,067 | $ | 69,806 | $ | 71,664 | |||||
(Gain) loss on derivatives, net | -529 | -525 | 406 | ||||||||
Accretion of Senior Notes | — | 3 | 1,058 | ||||||||
Amortization of deferred financing fees | 2,777 | 2,955 | 3,690 | ||||||||
Write-off of deferred financing fees | — | — | 3 | ||||||||
$ | 72,315 | $ | 72,239 | $ | 76,821 | ||||||
Aggregate future principal maturities and amortization of notes payable at December 31, 2014, are as follows (in thousands): | |||||||||||
2015 | $ | 121,328 | |||||||||
2016 | 205,802 | ||||||||||
2017 | 257,405 | ||||||||||
2018 | 290,852 | ||||||||||
2019 | 223,880 | ||||||||||
Thereafter | 330,025 | ||||||||||
Total | $ | 1,429,292 | |||||||||
Other_Current_Liabilities_and_
Other Current Liabilities and Other Liabilities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Other Current Liabilities and Other Liabilities | ||||||||
Other Current Liabilities and Other Liabilities | 8. Other Current Liabilities and Other Liabilities | |||||||
Other Current Liabilities | ||||||||
Other current liabilities consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Property, sales and use taxes payable | $ | 14,490 | $ | 14,482 | ||||
Income tax payable | 295 | — | ||||||
Accrued interest | 3,289 | 3,078 | ||||||
Advance deposits | 10,742 | 8,259 | ||||||
Management fees payable | 3,467 | 1,077 | ||||||
Other | 4,183 | 3,392 | ||||||
$ | 36,466 | $ | 30,288 | |||||
Other Liabilities | ||||||||
Other liabilities consisted of the following (in thousands): | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Deferred gain on sale of asset | $ | 7,000 | $ | 14,000 | ||||
Interest rate swap derivative agreement | — | 1,066 | ||||||
Accrued income tax | 1,541 | 1,491 | ||||||
Deferred revenue | 6,790 | 6,918 | ||||||
Deferred rent | 15,075 | 12,270 | ||||||
Deferred incentive management fees | 534 | 1,714 | ||||||
Other | 2,667 | 2,499 | ||||||
$ | 33,607 | $ | 39,958 | |||||
In conjunction with the Rochester Portfolio sale, the Company retained a $14.0 million liability related to the Rochester Portfolio’s pension plan, which could be triggered in certain circumstances, including termination of the pension plan. Accordingly, the Company deferred $14.0 million of gain on the sale of the Rochester Portfolio. In May 2014, the Company was released from $7.0 million of its pension plan liability, causing the Company to recognize $7.0 million of the deferred gain on sale of the Rochester Portfolio, which is included in discontinued operations for the year ended December 31, 2014. The remaining $7.0 million deferred gain will be recognized, if at all, when and to the extent the Company is released from any potential liability related to the Rochester Portfolio’s pension plan. | ||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Taxes | |||||||||||||||||
Income Taxes | 9. Income Taxes | ||||||||||||||||
The Company has elected to be taxed as a REIT under the Code. As a REIT, the Company generally will not be subject to corporate level federal income taxes on net income it distributes to its stockholders. The Company may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed taxable income. The Company may also be subject to federal and/or state income taxes when using net operating loss carryforwards to offset current taxable income. | |||||||||||||||||
The Company leases its hotels to the TRS Lessee and its subsidiaries, which are subject to federal and state income taxes. The Company accounts for income taxes in accordance with the provisions of the Income Taxes Topic of the FASB ASC, which requires the Company to account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between GAAP carrying amounts and their respective tax bases. | |||||||||||||||||
During 2014, the Company recognized a combined federal and state income tax provision of $0.2 million based on a 2013 actual tax benefit of $0.6 million, partially offset by a 2014 projected tax provision net of operating loss carryforwards of $0.8 million for its taxable entities. | |||||||||||||||||
During 2013, the Company recognized income tax expense of $4.7 million as a result of Internal Revenue Service (“IRS”) audits of tax years 2008, 2009 and 2010, including $0.6 million in accrued interest. The Company recorded additional income tax expense of $1.5 million during 2013 based on the ongoing evaluations of its uncertain tax positions related to the year ended December 31, 2012, and as a result of its recent resolution of outstanding issues with the IRS. During 2013, the Company recorded additional tax expense of $1.9 million related to estimated 2013 federal alternative minimum tax resulting from its use of net operating loss carryforwards, as well as state income tax where the Company’s use of net operating loss carryforwards was either limited or unavailable. | |||||||||||||||||
During 2012, the Company’s federal alternative minimum tax resulting from its use of net operating loss carryforwards combined with the Company’s state income tax expense where the use of net operating loss carryforwards was either limited or unavailable to total $1.1 million of income tax expense. | |||||||||||||||||
The Company recognizes penalties and interest related to unrecognized tax benefits in income tax expense. During 2014 and 2013, the Company recognized $50,000 and $0.6 million in interest expense related to its tax provisions, respectively. The Company recognized no penalties or interest related to its tax provisions for 2012. | |||||||||||||||||
The income tax provision for the Company is included in the consolidated financial statements as follows (in thousands): | |||||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 255 | $ | 6,371 | $ | 850 | |||||||||||
State | -76 | 1,774 | 298 | ||||||||||||||
Total current income tax provision | $ | 179 | $ | 8,145 | $ | 1,148 | |||||||||||
Deferred: | |||||||||||||||||
Federal | $ | -2,341 | $ | -9,488 | $ | 1,031 | |||||||||||
State | -598 | -2,426 | 278 | ||||||||||||||
Change in valuation allowance | 2,939 | 11,914 | -1,309 | ||||||||||||||
Total deferred income tax provision | $ | — | $ | — | $ | — | |||||||||||
The tax effects of temporary differences giving rise to the deferred tax assets (liabilities) are as follows (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
NOL carryover | $ | 28,420 | $ | 31,258 | |||||||||||||
Other reserves | 2,784 | 3,270 | |||||||||||||||
State taxes and other | -4,766 | -4,909 | |||||||||||||||
Depreciation | 375 | 133 | |||||||||||||||
Deferred tax asset before valuation allowance | 26,813 | 29,752 | |||||||||||||||
Valuation allowance | -26,813 | -29,752 | |||||||||||||||
$ | — | $ | — | ||||||||||||||
The Company has provided a valuation allowance against its net deferred tax asset at December 31, 2014 and 2013. The valuation allowance is due to the uncertainty of realizing the Company’s historical operating losses. Accordingly, no provision or benefit for deferred income taxes related to the Company is reflected in the accompanying consolidated statements of operations. | |||||||||||||||||
At December 31, 2014 and 2013, the net operating loss carryforwards for federal income tax purposes totaled approximately $72.3 million and $80.3 million, respectively. These losses, which begin to expire in 2024, are available to offset future income through 2032. | |||||||||||||||||
Characterization of Distributions | |||||||||||||||||
For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. For the years ended December 31, 2014, 2013 and 2012, distributions paid per share were characterized as follows (unaudited): | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Amount | % | Amount | % | Amount | % | ||||||||||||
Common Stock: | |||||||||||||||||
Ordinary income | $ | 0.510 | 100 | % | $ | 0.100 | 100 | % | $ | — | — | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | 0.510 | 100 | % | $ | 0.100 | 100 | % | $ | — | — | % | |||||
Preferred Stock — Series A | |||||||||||||||||
Ordinary income | $ | — | — | % | $ | 0.330 | 100 | % | $ | 2.000 | 100 | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | — | — | % | $ | 0.330 | 100 | % | $ | 2.000 | 100 | % | |||||
Preferred Stock — Series C | |||||||||||||||||
Ordinary income | $ | — | — | % | $ | 0.656 | 100 | % | $ | 1.572 | 100 | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | — | — | % | $ | 0.656 | 100 | % | $ | 1.572 | 100 | % | |||||
Preferred Stock — Series D | |||||||||||||||||
Ordinary income | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | |||||
Series_C_Cumulative_Convertibl
Series C Cumulative Convertible Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2014 | |
Series C Cumulative Convertible Redeemable Preferred Stock | |
Series C Cumulative Convertible Redeemable Preferred Stock | 10. Series C Cumulative Convertible Redeemable Preferred Stock |
In May 2013, the Company redeemed all 4,102,564 shares of its Series C preferred stock for an aggregate redemption price of $101.1 million, including $1.1 million in accrued dividends. In accordance with the FASB’s Emerging Issues Task Force Topic D-42, an additional redemption charge of $0.1 million was recognized related to the original issuance costs of the Series C preferred stock, which were previously included in additional paid in capital. The Company redeemed the Series C preferred shares using cash received from its February 2013 common stock offering. After the redemption date, the Company has no outstanding shares of Series C preferred stock, and all rights of the holders of such shares were terminated. | |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stockholders' Equity | |||||||||||
Stockholders' Equity | 11. Stockholders’ Equity | ||||||||||
Series A Cumulative Redeemable Preferred Stock | |||||||||||
In March 2013, the Company redeemed all 7,050,000 shares of its Series A preferred stock for an aggregate redemption price of $178.6 million, including $2.3 million in accrued dividends. In accordance with the FASB’s Emerging Issues Task Force Topic D-42, an additional redemption charge of $4.6 million was recognized related to the original issuance costs of the Series A preferred stock, which were previously included in additional paid in capital. The Company redeemed the Series A preferred shares using cash received from its February 2013 common stock offering. After the redemption date, the Company has no outstanding shares of Series A preferred stock, and all rights of the holders of such shares were terminated. Because the redemption of the Series A preferred stock is a redemption in full, trading of the Series A preferred stock on the New York Stock Exchange ceased after the redemption date. | |||||||||||
Series D Cumulative Redeemable Preferred Stock | |||||||||||
The Company’s 4,600,000 shares of its Series D preferred stock have a liquidation preference of $25.00 per share. On or after April 6, 2016, the Series D preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. | |||||||||||
Common Stock | |||||||||||
In February 2014, the Company entered into separate Equity Distribution Agreements (the “Agreements”) with Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Managers”). Under the terms of the Agreements, the Company may issue and sell from time to time through or to the Managers, as sales agents and/or principals, shares of the Company’s common stock having an aggregate offering amount of up to $150.0 million. During 2014, the Company received $21.0 million in net proceeds from the issuance of 1,352,703 shares of its common stock in connection with the Agreements. | |||||||||||
In June 2014, the Company issued 18,000,000 shares of its common stock in an underwritten public offering for net proceeds of approximately $262.5 million, which were used to acquire the Marriott Wailea in July 2014. | |||||||||||
In July 2014, the Company issued 4,034,970 shares of its common stock valued at $60.0 million directly to the seller of the Marriott Wailea in connection with the Company’s acquisition of the hotel (see Note 3). The Company incurred offering costs of $0.1 million related to this transaction. | |||||||||||
In February 2013, the Company issued 25,300,000 shares of its common stock, including the underwriters’ over-allotment of 3,300,000 shares, for net proceeds of approximately $294.9 million. The Company used $279.7 million of these proceeds to redeem all of its Series A preferred stock in March 2013, and its Series C preferred stock in May 2013, including accrued dividends, and used portions of the remaining proceeds towards the acquisitions of the Hilton New Orleans St. Charles in May 2013, and the Boston Park Plaza in July 2013. | |||||||||||
In November 2013, the Company issued 20,000,000 shares of its common stock in an underwritten public offering for net proceeds of $270.9 million. The Company used the net proceeds from this offering to purchase the Hyatt Regency San Francisco, and used the remaining proceeds for capital investment in the Company’s portfolio and other general corporate purposes, including working capital. | |||||||||||
In June 2012, the Company issued 5,454,164 shares of its common stock to the seller of the Wyndham Chicago (which the Company rebranded the Hyatt Chicago Magnificent Mile) in connection with the Company’s acquisition of the hotel (see Note 3). The Company incurred offering costs of $0.1 million related to this transaction. | |||||||||||
Also in June 2012, the Company issued 12,143,273 shares of its common stock in an underwritten public offering for net proceeds of approximately $126.2 million. The Company used a portion of these proceeds to fund the purchase of the Hilton Garden Inn Chicago Downtown/Magnificent Mile in July 2012, and used the remaining proceeds for capital investment in the Company’s portfolio, including the renovation of the Hyatt Chicago Magnificent Mile, and other general corporate purposes, including working capital. | |||||||||||
Dividends | |||||||||||
The Company declared dividends per share on its Series A preferred stock, Series D preferred stock and common stock during 2014, 2013 and 2012 as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Series A preferred stock | $ | — | $ | 0.50 | $ | 2.00 | |||||
Series D preferred stock | 2.00 | 2.00 | 2.00 | ||||||||
Common stock (1) | 0.51 | 0.10 | — | ||||||||
$ | 2.51 | $ | 2.60 | $ | 4.00 | ||||||
-1 | Includes a $0.36 dividend declared during the fourth quarter of 2014, which will be paid in January 2015 in a combination of cash and shares of the Company’s common stock, pursuant to elections by individual stockholders. | ||||||||||
LongTerm_Incentive_Plan
Long-Term Incentive Plan | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Long-Term Incentive Plan | |||||||||||||||||
Long-Term Incentive Plan | 12. Long-Term Incentive Plan | ||||||||||||||||
Stock Grants | |||||||||||||||||
The Company’s Long-Term Incentive Plan (“LTIP”) provides for the granting to directors, officers and eligible employees incentive or nonqualified share options, restricted shares, deferred shares, share purchase rights and share appreciation rights in tandem with options, or any combination thereof. The Company has reserved 12,050,000 common shares for issuance under the LTIP, and 6,537,837 shares remain available for future issuance as of December 31, 2014. | |||||||||||||||||
Restricted shares granted pursuant to the Company’s LTIP generally vest over periods from three to five years from the date of grant. | |||||||||||||||||
Compensation expense related to awards of restricted shares and performance shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. | |||||||||||||||||
The Company’s compensation expense and forfeitures related to restricted shares and performance awards for the years ended December 31, 2014, 2013 and 2012 were as follows (in thousands): | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Compensation expense, including forfeitures | $ | 9,063 | $ | 7,189 | $ | 5,139 | |||||||||||
The Company’s total compensation expense differs from the vesting of restricted common stock amount presented in the Company’s consolidated statements of equity due to the Company withholding and using a portion of its restricted shares granted pursuant to its LTIP for purposes of remitting statutory minimum withholding and payroll taxes in connection with the release of restricted common shares to plan participants (“net-settle”). In addition, the Company capitalizes all restricted shares granted to certain of those employees who work on the design and construction of its hotels. The Company’s total compensation expense in relation to its vesting of restricted common stock presented in the Company’s consolidated statements of equity for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Total compensation expense, including forfeitures | $ | 9,063 | $ | 7,189 | $ | 5,139 | |||||||||||
Net-settle adjustment | -2,842 | -2,331 | -1,673 | ||||||||||||||
Amortization related to shares issued to design and construction employees | 474 | 393 | 302 | ||||||||||||||
Vesting of restricted stock presented on statement of equity | $ | 6,695 | $ | 5,251 | $ | 3,768 | |||||||||||
The following is a summary of non-vested stock grant activity: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Weighted | Weighted | Weighted | |||||||||||||||
Average | Average | Average | |||||||||||||||
Shares | Price | Shares | Price | Shares | Price | ||||||||||||
Outstanding at beginning of year | 2,009,412 | $ | 10.23 | 1,539,992 | $ | 9.11 | 1,407,152 | $ | 8.55 | ||||||||
Granted | 691,182 | $ | 13.48 | 975,711 | $ | 11.82 | 647,171 | $ | 9.51 | ||||||||
Vested | -799,845 | $ | 10.61 | -497,199 | $ | 9.89 | -513,095 | $ | 8.08 | ||||||||
Forfeited | -17,453 | $ | 11.90 | -9,092 | $ | 10.89 | -1,236 | $ | 9.38 | ||||||||
Outstanding at end of year | 1,883,296 | $ | 11.24 | 2,009,412 | $ | 10.23 | 1,539,992 | $ | 9.11 | ||||||||
At December 31, 2014, there were no deferred shares, share purchase rights, or share appreciation rights issued or outstanding under the LTIP. | |||||||||||||||||
Stock Options | |||||||||||||||||
In April 2008, the Compensation Committee of the Company’s board of directors approved a grant of 200,000 non-qualified stock options (the “Options”) to one of the Company’s former associates. The Options fully vested in April 2009, and will expire in April 2018. The exercise price of the Options is $17.71 per share. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Commitments and Contingencies | ||||||||||||
Commitments and Contingencies | 13. Commitments and Contingencies | |||||||||||
Management Agreements | ||||||||||||
Management agreements with the Company’s third-party hotel managers require the Company to pay between 2% and 3.5% of total revenue of the managed hotels to the third-party managers each month as a basic management fee. Total basic management fees incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were included in the Company’s consolidated statements of operations as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Continuing operations — property general and administrative expense, and corporate overhead expense | $ | 31,485 | $ | 25,218 | $ | 22,807 | ||||||
Discontinued operations | — | 65 | 2,061 | |||||||||
$ | 31,485 | $ | 25,283 | $ | 24,868 | |||||||
In addition to basic management fees, provided that certain operating thresholds are met, the Company may also be required to pay incentive management fees to certain of its third-party managers. Total incentive management fees incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were included in the Company’s consolidated statements of operations as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Continuing operations — property general and administrative expense | $ | 4,034 | $ | 3,025 | $ | 2,738 | ||||||
Discontinued operations | — | — | 587 | |||||||||
$ | 4,034 | $ | 3,025 | $ | 3,325 | |||||||
License and Franchise Agreements | ||||||||||||
The Company has entered into license and franchise agreements related to certain of its hotel properties. The license and franchise agreements require the Company to, among other things, pay monthly fees that are calculated based on specified percentages of certain revenues. The license and franchise agreements generally contain specific standards for, and restrictions and limitations on, the operation and maintenance of the hotels which are established by the franchisors to maintain uniformity in the system created by each such franchisor. Such standards generally regulate the appearance of the hotel, quality and type of goods and services offered, signage and protection of trademarks. Compliance with such standards may from time to time require the Company to make significant expenditures for capital improvements. | ||||||||||||
Total license and franchise fees incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were included in the Company’s consolidated statements of operations as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Continuing operations — franchise costs | $ | 38,271 | $ | 32,932 | $ | 30,067 | ||||||
Discontinued operations | — | 73 | 2,996 | |||||||||
$ | 38,271 | $ | 33,005 | $ | 33,063 | |||||||
Total license and franchise costs included royalties of $11.6 million, $10.8 million and $10.6 million incurred by the Company during the years ended December 31, 2014, 2013 and 2012, respectively. The remaining costs included advertising, reservation and priority club assessments. | ||||||||||||
Renovation and Construction Commitments | ||||||||||||
At December 31, 2014, the Company had various contracts outstanding with third parties in connection with the renovation of certain of its hotel properties aimed at maintaining the appearance and quality of its hotels. The remaining commitments under these contracts at December 31, 2014 totaled $56.5 million. | ||||||||||||
Capital Leases | ||||||||||||
The Hyatt Chicago Magnificent Mile is subject to a building lease which expires in December 2097. Upon acquisition of the hotel in June 2012, the Company evaluated the terms of the lease agreement and determined the lease to be a capital lease pursuant to the Leases Topic of the FASB ASC. | ||||||||||||
The Company leases certain printers and copiers which leases have been determined to be capital leases pursuant to the Leases Topic of the FASB ASC. All of the leases expired in December 2014. | ||||||||||||
Assets under capital lease were included in investment in hotel properties, net on the Company’s consolidated balance sheets as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Buildings and improvements | $ | 58,799 | $ | 58,799 | ||||||||
Furniture, fixtures and equipment | 104 | 104 | ||||||||||
58,903 | 58,903 | |||||||||||
Accumulated depreciation | -3,841 | -2,356 | ||||||||||
$ | 55,062 | $ | 56,547 | |||||||||
Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2014 are as follows (in thousands): | ||||||||||||
2015 | $ | 1,409 | ||||||||||
2016 | 1,403 | |||||||||||
2017 | 1,403 | |||||||||||
2018 | 1,403 | |||||||||||
2019 | 1,403 | |||||||||||
Thereafter | 109,414 | |||||||||||
Total minimum lease payments (1) | 116,435 | |||||||||||
Less: Amount representing interest (2) | -100,852 | |||||||||||
Present value of net minimum lease payments (3) | $ | 15,583 | ||||||||||
-1 | Minimum lease payments do not include percentage rent which may be paid under the Hyatt Chicago Magnificent Mile building lease on the basis of 4.0% of the hotel’s gross room revenues over a certain threshold. The Company recorded zero in percentage rent during both 2014 and 2013, and $3,000 in percentage rent during 2012. | |||||||||||
-2 | Interest includes the amount necessary to reduce net minimum lease payments to present value calculated at the Company’s incremental borrowing rate at lease inception. | |||||||||||
-3 | The present value of net minimum lease payments are reflected in the Company’s consolidated balance sheet as of December 31, 2014 as a current obligation of $7,000, which is included in accounts payable and accrued expenses, and as a long-term obligation of $15.6 million, which is included in capital lease obligations, less current portion. | |||||||||||
Ground, Building and Air Leases | ||||||||||||
During 2014, 2013 and 2012, certain of the Company’s 30 hotels were obligated to unaffiliated third parties under the terms of ground, building and air leases as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Number of hotels with ground, building and/or air leases | 9 | 10 | 10 | |||||||||
Number of ground leases | 8 | 9 | 9 | |||||||||
Number of building leases (1) | 1 | 1 | 1 | |||||||||
Number of air leases | 3 | 3 | 3 | |||||||||
Total number of ground, building and air leases | 12 | 13 | 13 | |||||||||
-1 | The building lease is considered by the Company to be a capital lease, as noted above. | |||||||||||
At December 31, 2014, the ground, building and air leases mature in dates ranging from 2037 through 2097, excluding renewal options. One of the air leases requires a payment of $1.00 annually, which the Company has paid in full for the life of the lease. Total rent expense incurred pursuant to ground, building and air lease agreements for the years ended December 31, 2014, 2013 and 2012 was included in property tax, ground lease and insurance in the Company’s consolidated statements of operations as follows (in thousands): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Minimum rent, including straightline adjustments | $ | 14,999 | $ | 15,228 | $ | 14,950 | ||||||
Percentage rent (1) | 2,718 | 2,131 | 2,000 | |||||||||
$ | 17,717 | $ | 17,359 | $ | 16,950 | |||||||
-1 | Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. | |||||||||||
Prior to the Company’s June 2014 acquisition of the land underlying the Fairmont Newport Beach, the land was leased to the Company by a third party. The Company’s acquisition of the land reduced its ground lease expense by $0.6 million during 2014. | ||||||||||||
At December 31, 2014, the Company was obligated to an unaffiliated party under the terms of a sublease on the corporate facility, which matures in 2018. Rent expense incurred pursuant to leases on the corporate facility totaled $0.4 million for each of the years ended December 31, 2014, 2013 and 2012, and was included in corporate overhead expense. | ||||||||||||
Future minimum payments under the terms of the ground and air leases, as well as the sublease on the corporate facility, in effect at December 31, 2014 are as follows (in thousands): | ||||||||||||
2015 | $ | 8,438 | ||||||||||
2016 | 8,499 | |||||||||||
2017 | 11,523 | |||||||||||
2018 | 11,450 | |||||||||||
2019 | 11,236 | |||||||||||
Thereafter | 335,009 | |||||||||||
Total | $ | 386,155 | ||||||||||
Employment Agreements | ||||||||||||
As of December 31, 2014, the Company has employment agreements with certain executive employees, which expire in August 2016. The terms of the agreements stipulate payments of base salaries and bonuses. | ||||||||||||
Approximate minimum future obligations under employment agreements are as follows as of December 31, 2014 (in thousands): | ||||||||||||
2015 | $ | 6,319 | ||||||||||
2016 | 706 | |||||||||||
$ | 7,025 | |||||||||||
Collective Bargaining Agreements | ||||||||||||
The Company is subject to exposure to collective bargaining agreements at certain hotels operated by its management companies. At December 31, 2014, approximately 29.2% of workers employed by the Company’s third-party managers were covered by such collective bargaining agreements. | ||||||||||||
401(k) Savings and Retirement Plan | ||||||||||||
The Company’s employees may participate, subject to eligibility, in the Company’s 401(k) Savings and Retirement Plan (the “401(k) Plan”). Employees are eligible to participate in the 401(k) Plan after attaining 21 years of age and after the first of the month following the performance of six months of service. Three percent of eligible employee annual base earnings are contributed by the Company as a Safe Harbor elective contribution. Safe Harbor contributions made by the Company totaled $0.3 million for the year ended December 31, 2014, and $0.2 million for both of the years ended December 31, 2013 and 2012, and were included in corporate overhead expense. | ||||||||||||
The Company is also responsible for funding various retirement plans at certain hotels operated by its management companies. Property general and administrative expense on the Company’s consolidated statements of operations includes matching contributions into these various retirement plans of $1.5 million, $1.1 million and $0.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. Discontinued operations on the Company’s consolidated statements of operations includes matching contributions into these retirement plans of zero for the year ended December 31, 2014, $3,000 for the year ended December 31, 2013, and $0.1 million for the year ended December 31, 2012. | ||||||||||||
Concentration of Risk | ||||||||||||
The concentration of the Company’s hotels in California, New York, Illinois, Massachusetts and the greater Washington DC area exposes the Company’s business to economic conditions, competition and real and personal property tax rates unique to these locales. As of December 31, 2014, the Company’s 30 hotels were concentrated in California, New York, Illinois, Massachusetts and the greater Washington DC area as follows: | ||||||||||||
Greater | ||||||||||||
Washington DC | ||||||||||||
California | New York | Illinois | Massachusetts | Area | ||||||||
Number of hotels | 9 | 3 | 3 | 3 | 3 | |||||||
Percentage of total rooms | 31 | % | 9 | % | 8 | % | 14 | % | 13 | % | ||
Percentage of total revenue for the year ended December 31, 2014 | 33 | % | 13 | % | 7 | % | 14 | % | 12 | % | ||
Other | ||||||||||||
The Company has provided customary unsecured environmental indemnities to certain lenders. The Company has performed due diligence on the potential environmental risks, including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate the Company to reimburse the indemnified parties for damages related to certain environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, the Company could have recourse against other previous owners or a claim against its environmental insurance policies. | ||||||||||||
At December 31, 2014, the Company had $0.7 million of outstanding irrevocable letters of credit to guaranty the Company’s financial obligations related to workers’ compensation insurance programs from prior policy years. The beneficiaries of these letters of credit may draw upon these letters of credit in the event of a contractual default by the Company relating to each respective obligation. No draws have been made through December 31, 2014. | ||||||||||||
Quarterly_Operating_Results_Un
Quarterly Operating Results (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Operating Results (Unaudited) | ||||||||||||||
Quarterly Operating Results (Unaudited) | 14. Quarterly Operating Results (Unaudited) | |||||||||||||
The consolidated quarterly results for the years ended December 31, 2014 and 2013, of the Company are as follows (in thousands): | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues — Continuing Operations | ||||||||||||||
2014 | $ | 243,483 | $ | 300,852 | $ | 307,783 | $ | 289,880 | ||||||
2013 | $ | 194,921 | $ | 234,638 | $ | 250,370 | $ | 243,895 | ||||||
Operating income — Continuing Operations | ||||||||||||||
2014 | $ | 14,295 | $ | 55,886 | $ | 50,832 | $ | 35,730 | ||||||
2013 | $ | 3,568 | $ | 36,622 | $ | 34,368 | $ | 24,640 | ||||||
Net income (loss) | ||||||||||||||
2014 | $ | -3,496 | $ | 43,535 | $ | 33,643 | $ | 14,257 | ||||||
2013 | $ | 28,926 | $ | 20,009 | $ | 15,817 | $ | 5,249 | ||||||
Income available (loss attributable) to common stockholders per share — basic and diluted | ||||||||||||||
2014 | $ | -0.04 | $ | 0.22 | $ | 0.14 | $ | 0.05 | ||||||
2013 | $ | 0.12 | $ | 0.09 | $ | 0.07 | $ | 0.01 | ||||||
Income available (loss attributable) to common stockholders per share is computed independently for each of the quarters presented and therefore may not sum to the annual amount for the year. | ||||||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 15. Subsequent Events |
On February 13, 2015, the Company’s board of directors approved a “Second Amendment” to Article XIV of the Amended and Restated Bylaws of the Company (the “Bylaws”). Prior to the adoption of the Second Amendment, the Bylaws could only be amended, altered, repealed or rescinded by the board of directors. Pursuant to the Second Amendment, the Bylaws may be amended, altered, repealed or rescinded by the board of directors or by the stockholders upon an affirmative vote of a majority of all the votes entitled to be cast generally in the election of directors. | |
The Second Amendment to the Bylaws is attached hereto as Exhibit 3.4 and is incorporated by reference herein. The description of the foregoing amendment to the Company’s Bylaws is qualified in its entirety by reference to the full text of the attached Second Amendment. The effective date of the Second Amendment was February 13, 2015. | |
SCHEDULE_IIIREAL_ESTATE_AND_AC
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION | 12 Months Ended | |||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION | SUNSTONE HOTEL INVESTORS, INC. | |||||||||||||||||||||||||||||||||
SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||
Cost Capitalized | Gross Amount at | |||||||||||||||||||||||||||||||||
Initial costs | Subsequent to Acquisition | December 31, 2014 (1) | ||||||||||||||||||||||||||||||||
Bldg. and | Bldg. and | Bldg. and | Accum. | Date | Depr. | |||||||||||||||||||||||||||||
Encmbr | Land | Impr | Land | Impr. | Land | Impr. | Totals | Depr. | Acq./Constr. | Life | ||||||||||||||||||||||||
Boston Park Plaza | $ | 116,281 | $ | 58,527 | $ | 170,589 | $ | — | $ | 13,105 | $ | 58,527 | $ | 183,694 | $ | 242,221 | $ | 10,042 | 2013 | May-35 | ||||||||||||||
Courtyard by Marriott Los Angeles | (2) | — | 8,446 | — | 12,870 | — | 21,316 | 21,316 | 9,248 | 1999 | May-35 | |||||||||||||||||||||||
Doubletree Guest Suites Times Square | 177,216 | 27,351 | 201,660 | — | 11,718 | 27,351 | 213,378 | 240,729 | 19,788 | 2011 | May-35 | |||||||||||||||||||||||
Embassy Suites Chicago | 69,370 | 79 | 46,886 | 6,348 | 20,703 | 6,427 | 67,589 | 74,016 | 24,078 | 2002 | May-35 | |||||||||||||||||||||||
Embassy Suites La Jolla | 65,000 | 27,900 | 70,450 | — | 8,959 | 27,900 | 79,409 | 107,309 | 23,182 | 2006 | May-35 | |||||||||||||||||||||||
Fairmont Newport Beach | (2) | — | 65,769 | 11,000 | 33,848 | 11,000 | 99,617 | 110,617 | 30,703 | 2005 | May-35 | |||||||||||||||||||||||
Hilton New Orleans St. Charles | — | 3,698 | 53,578 | — | 1,124 | 3,698 | 54,702 | 58,400 | 1,946 | 2013 | May-35 | |||||||||||||||||||||||
Hilton North Houston | 31,253 | 6,184 | 35,628 | — | 23,512 | 6,184 | 59,140 | 65,324 | 20,125 | 2002 | May-35 | |||||||||||||||||||||||
Hilton San Diego Bayfront | 228,296 | — | 424,992 | — | 8,912 | — | 433,904 | 433,904 | 29,463 | 2011 | May-57 | |||||||||||||||||||||||
Hilton Times Square | 86,606 | — | 221,488 | — | 24,768 | — | 246,256 | 246,256 | 72,049 | 2006 | May-35 | |||||||||||||||||||||||
Hilton Garden Inn Chicago Downtown/Magnificent Mile | — | 14,040 | 66,350 | — | 7,086 | 14,040 | 73,436 | 87,476 | 3,609 | 2012 | May-50 | |||||||||||||||||||||||
Hyatt Chicago Magnificent Mile | — | — | 91,964 | — | 16,512 | — | 108,476 | 108,476 | 9,436 | 2012 | May-40 | |||||||||||||||||||||||
Hyatt Regency Newport Beach | (2) | — | 30,549 | — | 25,801 | — | 56,350 | 56,350 | 17,690 | 2002 | May-35 | |||||||||||||||||||||||
Hyatt Regency San Francisco | — | 116,140 | 131,430 | — | 8,027 | 116,140 | 139,457 | 255,597 | 7,387 | 2013 | May-35 | |||||||||||||||||||||||
JW Marriott New Orleans | 90,000 | — | 73,420 | — | 4,324 | — | 77,744 | 77,744 | 8,643 | 2011 | May-35 | |||||||||||||||||||||||
Marriott Boston Long Wharf | 176,000 | 51,598 | 170,238 | — | 37,002 | 51,598 | 207,240 | 258,838 | 53,672 | 2007 | May-35 | |||||||||||||||||||||||
Marriott Houston | 20,943 | 4,167 | 19,155 | — | 13,921 | 4,167 | 33,076 | 37,243 | 11,141 | 2002 | May-35 | |||||||||||||||||||||||
Marriott Park City | 13,652 | 2,260 | 17,778 | — | 12,749 | 2,260 | 30,527 | 32,787 | 12,116 | 1999 | May-35 | |||||||||||||||||||||||
Marriott Philadelphia | 24,737 | 3,297 | 29,710 | — | 9,629 | 3,297 | 39,339 | 42,636 | 14,597 | 2002 | May-35 | |||||||||||||||||||||||
Marriott Portland | (2) | 5,341 | 20,705 | — | 6,863 | 5,341 | 27,568 | 32,909 | 11,598 | 2000 | May-35 | |||||||||||||||||||||||
Marriott Quincy | (2) | 14,375 | 97,875 | — | 4,651 | 14,375 | 102,526 | 116,901 | 27,284 | 2007 | May-35 | |||||||||||||||||||||||
Marriott Tysons Corner | 40,866 | 3,897 | 43,528 | -250 | 16,191 | 3,647 | 59,719 | 63,366 | 22,222 | 2002 | May-35 | |||||||||||||||||||||||
Marriott Wailea | — | 119,707 | 194,137 | — | — | 119,707 | 194,137 | 313,844 | 2,782 | 2014 | May-40 | |||||||||||||||||||||||
Renaissance Harborplace | 88,901 | 25,085 | 102,707 | — | 21,889 | 25,085 | 124,596 | 149,681 | 38,504 | 2005 | May-35 | |||||||||||||||||||||||
Renaissance Los Angeles Airport | (2) | 7,800 | 52,506 | — | 4,435 | 7,800 | 56,941 | 64,741 | 15,595 | 2007 | May-35 | |||||||||||||||||||||||
Renaissance Long Beach | (2) | 10,437 | 37,300 | — | 18,526 | 10,437 | 55,826 | 66,263 | 15,758 | 2005 | May-35 | |||||||||||||||||||||||
Renaissance Orlando at Sea World ® | 75,923 | — | 119,733 | 30,716 | 34,704 | 30,716 | 154,437 | 185,153 | 46,812 | 2005 | May-35 | |||||||||||||||||||||||
Renaissance Washington DC | 124,248 | 14,563 | 132,800 | — | 37,178 | 14,563 | 169,978 | 184,541 | 50,797 | 2005 | May-35 | |||||||||||||||||||||||
Renaissance Westchester (3) | (2) | 5,751 | 17,069 | — | 17,811 | 5,751 | 34,880 | 40,631 | 5,045 | 2010 | May-35 | |||||||||||||||||||||||
Sheraton Cerritos | (2) | — | 24,737 | — | 7,601 | — | 32,338 | 32,338 | 9,708 | 2005 | May-35 | |||||||||||||||||||||||
$ | 1,429,292 | $ | 522,197 | $ | 2,773,177 | $ | 47,814 | $ | 464,419 | $ | 570,011 | $ | 3,237,596 | $ | 3,807,607 | $ | 625,020 | |||||||||||||||||
SUNSTONE HOTEL INVESTORS, INC. | ||||||||||||||||||||||||||||||||||
SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||
Cost Capitalized | Gross Amount at | |||||||||||||||||||||||||||||||||
Initial costs | Subsequent to Acquisition | December 31, 2014 (1) | ||||||||||||||||||||||||||||||||
Bldg. and | Bldg. and | Bldg. and | Accum. | Date | Depr. | |||||||||||||||||||||||||||||
Encmbr. | Land | Impr. | Land | Impr | Land | Impr. | Totals | Depr. | Acq./Constr. | Life | ||||||||||||||||||||||||
Investments in Other Real Estate | ||||||||||||||||||||||||||||||||||
Land held for future development or sale | $ | — | $ | 4,500 | $ | — | $ | -4,312 | $ | — | $ | 188 | $ | — | $ | 188 | $ | — | 1999 | NA | ||||||||||||||
$ | — | $ | 4,500 | $ | — | $ | -4,312 | $ | — | $ | 188 | $ | — | $ | 188 | $ | — | |||||||||||||||||
-1 | The aggregate cost of properties for federal income tax purposes is approximately $3.7 billion (unaudited) at December 31, 2014. | |||||||||||||||||||||||||||||||||
-2 | Hotel is pledged as collateral by the credit facility entered into in November 2010. As of December 31, 2014, the Company has no outstanding indebtedness under its credit facility. | |||||||||||||||||||||||||||||||||
-3 | Hotel originally acquired in 2005. Possession and control of the hotel transferred to a receiver in December 2009, and the Company reacquired the hotel in June 2010. | |||||||||||||||||||||||||||||||||
Hotel Properties | Other Real Estate Investments | |||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||||
(1) Reconciliation of land and buildings and improvements: | ||||||||||||||||||||||||||||||||||
Balance at the beginning of the year | $ | 3,416,762 | $ | 2,801,963 | $ | 2,904,975 | $ | 188 | $ | 188 | $ | 12,437 | ||||||||||||||||||||||
Additions during year: | ||||||||||||||||||||||||||||||||||
Acquisitions | 324,844 | 533,962 | 172,354 | — | — | — | ||||||||||||||||||||||||||||
Improvements | 66,001 | 80,923 | 46,831 | — | — | 50 | ||||||||||||||||||||||||||||
Changes in reporting presentation (a) | — | — | -163,455 | — | — | -9,793 | ||||||||||||||||||||||||||||
Disposals during the year (a) | — | -86 | -158,742 | — | — | -2,506 | ||||||||||||||||||||||||||||
Balance at the end of the year | $ | 3,807,607 | $ | 3,416,762 | $ | 2,801,963 | $ | 188 | $ | 188 | $ | 188 | ||||||||||||||||||||||
(2) Reconciliation of accumulated depreciation: | ||||||||||||||||||||||||||||||||||
Balance at the beginning of the year | $ | 524,014 | $ | 439,446 | $ | 457,431 | $ | — | $ | — | $ | 2,865 | ||||||||||||||||||||||
Depreciation for the year | 101,006 | 84,568 | 82,871 | — | — | 301 | ||||||||||||||||||||||||||||
Changes in reporting presentation | — | — | -58,364 | — | — | -2,740 | ||||||||||||||||||||||||||||
Retirement | — | — | -42,492 | — | — | -426 | ||||||||||||||||||||||||||||
Balance at the end of the year | $ | 625,020 | $ | 524,014 | $ | 439,446 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
(a) | 2012 changes in reporting presentation and 2013 disposals during the year represent the Rochester Portfolio classified as held for sale as of December 31, 2012 due to its sale in January 2013. | |||||||||||||||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||||
The accompanying consolidated financial statements as of December 31, 2014 and 2013, and for the years ended December 31, 2014, 2013 and 2012, include the accounts of the Company, the Operating Partnership, the TRS Lessee and their subsidiaries. All significant intercompany balances and transactions have been eliminated. The Company consolidates subsidiaries when it has the ability to direct the activities that most significantly impact the economic performance of the entity. The Company also evaluates its subsidiaries to determine if they should be considered variable interest entities (“VIEs”). Typically, the entity that has the power to direct the activities that most significantly impact economic performance would consolidate the VIE. The Company considers an entity a VIE if equity investors own an interest therein that does not have the characteristics of a controlling financial interest or if such investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), the Company reviewed its subsidiaries to determine if (i) they should be considered VIEs, and (ii) whether the Company should change its consolidation determination based on changes in the characteristics of these entities. Based on its review, the Company determined that all of its subsidiaries were properly consolidated as of December 31, 2014 and 2013, and for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||
Non-controlling interests at both December 31, 2014 and 2013 represent the outside equity interests in various consolidated affiliates of the Company. | |||||||||||||||
Certain prior year amounts have been reclassified in the consolidated financial statements in order to conform to the current year presentation. | |||||||||||||||
The Company has evaluated subsequent events through the date of issuance of these financial statements. | |||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) 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 revenues and expenses during the reporting period. Actual results could differ materially from those estimates. | |||||||||||||||
Reporting Periods | Reporting Periods | ||||||||||||||
The results the Company reports in its consolidated statements of operations are based on results reported to the Company by its hotel managers. Prior to 2013, Marriott used a fiscal year ending on the Friday closest to December 31 and reported twelve weeks of operations each for the first three quarters of the year, and sixteen or seventeen weeks of operations for the fourth quarter of the year. Beginning in 2013, Marriott switched its reporting to a standard monthly calendar; however, Marriott’s 2013 calendar contains an additional three days, December 29, 2012 through December 31, 2012. The Company and its other hotel managers use a standard monthly calendar to report their financial information. The Company has elected to adopt quarterly close periods of March 31, June 30 and September 30, and an annual year end of December 31. As a result, the Company’s 2013 and 2012 results of operations for 10 of the Company’s Marriott-managed hotels are reported using the following reporting periods: | |||||||||||||||
Number of | |||||||||||||||
days in 2013 | |||||||||||||||
2013 | 2012 | versus 2012 (1) | |||||||||||||
First quarter | December 29 — March 31 | December 31 — March 23 | 8 days | ||||||||||||
Second quarter | April 1 — June 30 | March 24 — June 15 | 7 days | ||||||||||||
Third quarter | July 1 — September 30 | June 16 — September 7 | 8 days | ||||||||||||
Fourth quarter | October 1 — December 31 | September 8 — December 28 | (20 days) | ||||||||||||
Full year | December 29, 2012 — December 31, 2013 | December 31, 2011 — December 28, 2012 | 3 days | ||||||||||||
-1 | Number of days in 2013 versus 2012 does not include the leap day, February 29, 2012, as this extra day was not caused by the Marriott calendar conversion. | ||||||||||||||
The Company estimates that Marriott’s fiscal calendar had the following effects on the Company’s total revenue and net income based on the average daily revenues and income generated by its Marriott hotels during the years ended December 31, 2014, 2013 and 2012 as follows (in thousands): | |||||||||||||||
2014 | 2013 (1) | 2012 (1) | |||||||||||||
Total revenue | $ | — | $ | 2,300 | $ | -1,251 | |||||||||
Net income | $ | — | $ | 672 | $ | -328 | |||||||||
-1 | Increases (decreases) to total revenue and net income based on the Marriott fiscal calendars for 2013 (368 days) and 2012 (364 days) versus a standard 365 day year. | ||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||
Cash and cash equivalents are defined as cash on hand and in various bank accounts plus all short-term investments with an original maturity of three months or less. | |||||||||||||||
The Company maintains cash and cash equivalents and certain other financial instruments with various financial institutions. These financial institutions are located throughout the country and the Company’s policy is designed to limit exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. At December 31, 2014 and 2013, the Company had amounts in banks that were in excess of federally insured amounts. | |||||||||||||||
Restricted Cash | Restricted Cash | ||||||||||||||
Restricted cash is comprised of reserve accounts for debt service, interest reserves, capital replacements, ground leases, and property taxes. These restricted funds are subject to supervision and disbursement approval by certain of the Company’s lenders and/or hotel managers. | |||||||||||||||
Accounts Receivable | Accounts Receivable | ||||||||||||||
Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. Accounts receivable also includes, among other things, receivables from customers who utilize purchase volume rebates through BuyEfficient, as well as tenants who lease space in the Company’s hotels. The Company maintains an allowance for doubtful accounts sufficient to cover potential credit losses. The Company’s accounts receivable includes an allowance for doubtful accounts of $0.2 million at both December 31, 2014 and 2013. | |||||||||||||||
Inventories | Inventories | ||||||||||||||
Inventories, consisting primarily of food and beverages at the hotels, are stated at the lower of cost or market, with cost determined on a method that approximates first-in, first-out basis. | |||||||||||||||
Acquisitions of Hotel Properties and Other Entities | Acquisitions of Hotel Properties and Other Entities | ||||||||||||||
Accounting for the acquisition of a hotel property or other entity as a purchase transaction requires an allocation of the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective estimated fair values. The most difficult estimations of individual fair values are those involving long-lived assets, such as property, equipment, intangible assets and any capital lease obligations that are assumed as part of the acquisition of a leasehold interest. During 2014, 2013 and 2012, the Company used all available information to make these fair value determinations, and engaged independent valuation specialists to assist in the fair value determination of the long-lived assets acquired and the liabilities assumed in the Company’s purchases of the Marriott Wailea, the Hilton New Orleans St. Charles, the Boston Park Plaza, the Hyatt Regency San Francisco, the Hyatt Chicago Magnificent Mile and the Hilton Garden Inn Chicago Downtown/Magnificent Mile. Due to the inherent subjectivity in determining the estimated fair value of long-lived assets, the Company believes that the recording of acquired assets and liabilities is a critical accounting policy. | |||||||||||||||
Investments In Hotel Properties and Other Assets | Investments In Hotel Properties and Other Assets | ||||||||||||||
Hotel properties and other investments are depreciated using the straight-line method over estimated useful lives primarily ranging from five to 35 years for buildings and improvements and three to 12 years for furniture, fixtures and equipment. Intangible assets are amortized using the straight-line method over their estimated useful life or over the length of the related agreement, whichever is shorter. | |||||||||||||||
The Company’s investment in hotel properties, net also includes initial franchise fees which are recorded at cost and amortized using the straight-line method over the lives of the franchise agreements ranging from 14 to 27 years. All other franchise fees that are based on the Company’s results of operations are expensed as incurred. | |||||||||||||||
The Company follows the requirements of the Property, Plant and Equipment Topic of the FASB ASC, which requires impairment losses to be recorded on long-lived assets to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows expected to be generated by those assets are less than the assets’ carrying amount. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment is recognized. The impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. In computing fair value, the Company uses a discounted cash flow analysis to estimate the fair value of its hotel properties and other assets, taking into account each property’s expected cash flow from operations, holding period and estimated proceeds from the disposition of the property. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. In 2014, 2013 and 2012, the Company did not identify any properties or other assets with indicators of impairment. Based on the Company’s review, management believes that there were no other impairments on its long-lived assets, and that the carrying values of its hotel properties and other assets are recoverable at December 31, 2014. | |||||||||||||||
Fair value represents the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than a forced or liquidation sale. The estimation process involved in determining if assets have been impaired and in the determination of fair value is inherently uncertain because it requires estimates of current market yields as well as future events and conditions. Such future events and conditions include economic and market conditions, as well as the availability of suitable financing. The realization of the Company’s investment in hotel properties and other assets is dependent upon future uncertain events and conditions and, accordingly, the actual timing and amounts realized by the Company may be materially different from their estimated fair values. | |||||||||||||||
Assets Held for Sale | Assets Held for Sale | ||||||||||||||
The Company considers a hotel or other asset held for sale if it is probable that the sale will be completed within twelve months, among other requirements. A sale is determined to be probable once the buyer completes its due diligence of the asset, there is an executed purchase and sale agreement between the Company and the buyer, and the Company has received a substantial non-refundable deposit. Depreciation ceases when a property is held for sale. Should an impairment loss be required for assets held for sale, the related assets are adjusted to their estimated fair values, less costs to sell. If the sale of the hotel or other asset represents a strategic shift that will have a major effect on the Company’s operations and financial results, the hotel or other asset is included in discontinued operations, and operating results are removed from income from continuing operations and reported as discontinued operations. The operating results for any such assets for any prior periods presented must also be reclassified as discontinued operations. As of both December 31, 2014 and 2013, the Company had no hotels or other assets held for sale. As of December 31, 2012, the Company classified four hotels and a commercial laundry facility as held for sale due to their sale in January 2013. | |||||||||||||||
Deferred Financing Fees | Deferred Financing Fees | ||||||||||||||
Deferred financing fees consist of loan fees and other financing costs related to the Company’s outstanding indebtedness and credit facility commitments, and are amortized to interest expense over the terms of the related debt or commitment. If a loan is refinanced or paid before its maturity, any related unamortized deferred financing costs will generally be expensed unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. | |||||||||||||||
During 2014, the Company amended the mortgage secured by the Hilton San Diego Bayfront, and refinanced the mortgages secured by the JW Marriott New Orleans and the Embassy Suites La Jolla (see Note 7). In conjunction with these financing transactions, the Company paid additional deferred financing fees of $2.3 million, which are amortized over the terms of the modified and new loans. In addition, a total of $0.6 million of deferred financing fees were written off, which are included in the Company’s results of operations as loss on extinguishment of debt. | |||||||||||||||
During 2013, the Company paid deferred financing fees of $0.2 million related to the assumption of a mortgage in connection with the acquisition of the Boston Park Plaza and the purchase of an interest rate cap derivative agreement on the Hilton San Diego Bayfront mortgage. | |||||||||||||||
During 2012, the Company incurred and paid deferred financing fees of $1.3 million related to an amendment of its credit facility. In addition, the Company wrote-off $0.2 million in deferred financing fees, which is included in the Company’s results of operations as loss on extinguishment of debt, related to its sales of the Marriott Del Mar, the Doubletree Guest Suites Minneapolis, the Hilton Del Mar and the Marriott Troy, along with a nominal amount written off related to its repayment of the non-recourse mortgage secured by the Renaissance Long Beach. | |||||||||||||||
Total amortization and write-off of deferred financing fees for 2014, 2013 and 2012 was as follows (in thousands): | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
Continuing operations: | |||||||||||||||
Amortization of deferred financing fees | $ | 2,777 | $ | 2,955 | $ | 3,690 | |||||||||
Write-off of deferred financing fees | — | — | 3 | ||||||||||||
Total deferred financing fees — continuing operations | 2,777 | 2,955 | 3,693 | ||||||||||||
Discontinued operations: | |||||||||||||||
Amortization of deferred financing fees | — | 2 | 74 | ||||||||||||
Write-off of deferred financing fees | — | — | 185 | ||||||||||||
Total deferred financing fees — discontinued operations | — | 2 | 259 | ||||||||||||
Total amortization and write-off of deferred financing fees | $ | 2,777 | $ | 2,957 | $ | 3,952 | |||||||||
Goodwill and Other Intangibles | Goodwill and BuyEfficient Intangibles | ||||||||||||||
The Company follows the requirements of the Intangibles — Goodwill and Other Topic of the FASB ASC, which states that goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. As a result, the carrying value of goodwill allocated to hotel properties and other assets is reviewed at least annually for impairment. In addition, when facts and circumstances suggest that the Company’s goodwill may be impaired, an interim evaluation of goodwill is prepared. Such review entails comparing the carrying value of the individual hotel property or other asset (the reporting unit) including the allocated goodwill to the fair value determined for that reporting unit (see Fair Value of Financial Instruments for detail on the Company’s valuation methodology). If the aggregate carrying value of the reporting unit exceeds the fair value, the goodwill of the reporting unit is impaired to the extent of the difference between the fair value and the aggregate carrying value, not to exceed the carrying amount of the allocated goodwill. The Company’s annual impairment evaluation is performed each year as of December 31. | |||||||||||||||
Based on its annual impairment evaluations for 2014, 2013 and 2012, the Company determined that no adjustments to its goodwill were required. | |||||||||||||||
The Company’s other assets, net includes BuyEfficient’s intangibles related to certain trademarks, customer and supplier relationships and intellectual property related to internally developed software. These intangibles are amortized using the straight-line method over their useful lives ranging between seven to 20 years. | |||||||||||||||
Property and Equipment | Property and Equipment | ||||||||||||||
Property and equipment is stated on the cost basis and includes computer equipment and other corporate office equipment and furniture. Property and equipment is depreciated on a straight-line basis over the estimated useful lives ranging from three to 12 years. The Company includes property and equipment, net of related accumulated depreciation, in its other assets, net on the accompanying consolidated balance sheets. | |||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||
As of December 31, 2014 and 2013, the carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses were representative of their fair values due to the short-term maturity of these instruments. | |||||||||||||||
The Company follows the requirements of the Fair Value Measurements and Disclosures Topic of the FASB ASC, which establishes a framework for measuring fair value and disclosing fair value measurements by establishing a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: | |||||||||||||||
Level 1 | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||||||||||||
Level 2 | Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | ||||||||||||||
Level 3 | Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. | ||||||||||||||
As discussed in Note 5, the Company held two interest rate cap agreements at December 31, 2014 and 2013. At December 31, 2013, the Company also held one interest rate swap agreement. The Company holds its interest rate protection agreements to manage, or hedge, interest rate risks related to its floating rate debt. The Company records interest rate protection agreements on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in the consolidated statements of operations as they are not designated as hedges. In accordance with the Fair Value Measurements and Disclosure Topic of the FASB ASC, the Company estimates the fair value of its interest rate protection agreements based on quotes obtained from the counterparties, which are based upon the consideration that would be required to terminate the agreements. Using Level 2 measurements, the Company determined that the total value of the interest rate cap agreements at December 31, 2014 was de minimis. At December 31, 2013, the Company has valued the derivative interest rate cap agreements as an asset of $16,000. The interest rate cap agreements are included in other assets, net, in the accompanying consolidated balance sheets. At December 31, 2013, the Company has valued the derivative interest rate swap agreement using Level 2 measurements as a liability of $1.1 million. The interest rate swap agreement is included in other liabilities in the accompanying consolidated balance sheets. | |||||||||||||||
On an annual basis and periodically when indicators of impairment exist, the Company analyzes the carrying values of its hotel properties and other assets using Level 3 measurements, including a discounted cash flow analysis to estimate the fair value of its hotel properties and other assets taking into account each property’s expected cash flow from operations, holding period and estimated proceeds from the disposition of the property. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. The Company did not identify any properties or other assets with indicators of impairment during 2014, 2013 or 2012. | |||||||||||||||
On an annual basis and periodically when indicators of impairment exist, the Company also analyzes the carrying value of its goodwill using Level 3 measurements, including a discounted cash flow analysis to estimate the fair value of its reporting units. The Company did not identify any properties with indicators of goodwill impairment in 2014, 2013 or 2012. | |||||||||||||||
As of December 31, 2014 and 2013, 71.6% and 70.7% (including the effect of an interest rate swap agreement), respectively, of the Company’s outstanding debt had fixed interest rates. The Company’s carrying value of its debt totaled $1.4 billion as of both December 31, 2014 and 2013. Using Level 3 measurements, including the Company’s weighted average cost of debt ranging from 4.5% to 5.0%, the Company estimates that the fair market value of its debt totaled $1.4 billion as of both December 31, 2014 and 2013. | |||||||||||||||
The following table presents the Company’s assets measured at fair value on a recurring and non-recurring basis at December 31, 2014 and 2013 (in thousands): | |||||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
December 31, 2014: | |||||||||||||||
Interest rate cap derivative agreements | $ | — | $ | — | $ | — | $ | — | |||||||
Life insurance policy (1) | 1,198 | — | 1,198 | — | |||||||||||
Total assets at December 31, 2014 | $ | 1,198 | $ | — | $ | 1,198 | $ | — | |||||||
December 31, 2013: | |||||||||||||||
Interest rate cap derivative agreements | $ | 16 | $ | — | $ | 16 | $ | — | |||||||
Life insurance policy (1) | 1,385 | — | 1,385 | — | |||||||||||
Total assets at December 31, 2013 | $ | 1,401 | $ | — | $ | 1,401 | $ | — | |||||||
-1 | Includes the split life insurance policy for one of the Company’s former associates, which the Company values using Level 2 measurements. These amounts are included in other assets, net on the accompanying consolidated balance sheets, and will be used to reimburse the Company for payments made to the former associate from the related retirement benefit agreement, which is included in accrued payroll and employee benefits on the accompanying consolidated balance sheets. | ||||||||||||||
The following table presents the Company’s liabilities measured at fair value on a recurring and non-recurring basis at December 31, 2014 and 2013 (in thousands): | |||||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
December 31, 2014: | |||||||||||||||
Interest rate swap derivative agreement | $ | — | $ | — | $ | — | $ | — | |||||||
Retirement benefit agreement (1) | 1,198 | — | 1,198 | — | |||||||||||
Total liabilities at December 31, 2014 | $ | 1,198 | $ | — | $ | 1,198 | $ | — | |||||||
December 31, 2013: | |||||||||||||||
Interest rate swap derivative agreement | $ | 1,066 | $ | — | $ | 1,066 | $ | — | |||||||
Retirement benefit agreement (1) | 1,385 | — | 1,385 | — | |||||||||||
Total liabilities at December 31, 2013 | $ | 2,451 | $ | — | $ | 2,451 | $ | — | |||||||
-1 | Includes the retirement benefit agreement for one of the Company’s former associates, which the Company values using Level 2 measurements. The agreement calls for the balance of the retirement benefit agreement to be paid out to the former associate in 10 annual installments, beginning in 2011. As such, the Company has paid the former associate a total of $0.8 million through December 31, 2014, which was reimbursed to the Company using funds from the related split life insurance policy noted above. These amounts are included in accrued payroll and employee benefits in the accompanying consolidated balance sheets. | ||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||
Room revenue and food and beverage revenue are recognized as earned, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Additionally, some of the Company’s hotel rooms are booked through independent internet travel intermediaries. Revenue for these rooms is booked at the price the Company sold the room to the independent internet travel intermediary less any discount or commission paid. | |||||||||||||||
Other operating revenue consists of revenue derived from incidental hotel services such as telephone/internet, transportation, parking, spa, entertainment and other guest services, along with tenant lease revenues relating to hotel space leased by third parties. Other operating revenue also includes revenue generated by BuyEfficient. Revenues from incidental hotel services and BuyEfficient are recognized in the period the related services are provided or the revenue is earned. | |||||||||||||||
Advertising and Promotion Costs | Advertising and Promotion Costs | ||||||||||||||
Advertising and promotion costs are expensed when incurred. Advertising and promotion costs represent the expense for advertising and reservation systems under the terms of the hotel franchise and brand management agreements and general and administrative expenses that are directly attributable to advertising and promotions. | |||||||||||||||
Stock Based Compensation | Stock Based Compensation | ||||||||||||||
Compensation expense related to awards of restricted shares and performance shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. | |||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||
The Company has elected to be treated as a REIT pursuant to the Internal Revenue Code, as amended (the “Code”). Management believes that the Company has qualified and intends to continue to qualify as a REIT. Therefore, the Company is permitted to deduct distributions paid to its stockholders, eliminating the federal taxation of income represented by such distributions at the company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax (including any applicable alternative minimum tax) on taxable income at regular corporate tax rates. | |||||||||||||||
With respect to taxable subsidiaries, the Company accounts for income taxes in accordance with the Income Taxes Topic of the FASB ASC. Accordingly, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. | |||||||||||||||
The Income Taxes Topic of the FASB ASC addresses how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The guidance requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. | |||||||||||||||
Non-Controlling Interests | Non-Controlling Interests | ||||||||||||||
The Company’s financial statements include entities in which the Company has a controlling financial interest. Non-controlling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such non-controlling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts, including both the amounts attributable to the Company and non-controlling interests. Income or loss is allocated to non-controlling interests based on their weighted average ownership percentage for the applicable period. The consolidated statements of equity include beginning balances, activity for the period and ending balances for each component of stockholders’ equity, non-controlling interests and total equity. | |||||||||||||||
At December 31, 2014, 2013 and 2012, the non-controlling interest reported in the Company’s financial statements includes Hilton Worldwide’s 25.0% ownership in the Hilton San Diego Bayfront. In addition, the Company is the sole common stockholder of the captive REIT that owns the Doubletree Guest Suites Times Square; however, there are also preferred investors in the captive REIT whose preferred dividends less administrative fees during 2014, 2013 and 2012 are represented as distributions to non-controlling interests on the Company’s statements of operations. | |||||||||||||||
Dividends | Dividends | ||||||||||||||
In August 2013, the Company’s board of directors reinstated a quarterly dividend payable to the Company’s common stockholders. In addition, the Company currently pays quarterly dividends to the preferred stockholders of its 8.0% Series D Cumulative Redeemable Preferred Stock (“Series D preferred stock”) as declared by the Company’s board of directors. Prior to their redemption dates in March 2013 and May 2013, respectively, the Company also paid quarterly dividends to the preferred stockholders of its 8.0% Series A Cumulative Redeemable Preferred Stock (“Series A preferred stock”) and its Series C Cumulative Convertible Redeemable Preferred Stock (“Series C preferred stock”) as declared by the board of directors. The Company’s ability to pay dividends is dependent on the receipt of distributions from the Operating Partnership. | |||||||||||||||
Earnings Per Share | Earnings Per Share | ||||||||||||||
The Company applies the two-class method when computing its earnings per share as required by the Earnings Per Share Topic of the FASB ASC, which requires the net income per share for each class of stock (common stock and convertible preferred stock) to be calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. To the extent the Company has undistributed earnings in any calendar quarter, the Company will follow the two-class method of computing earnings per share. | |||||||||||||||
The Company follows the requirements of the Earnings Per Share Topic of the FASB ASC, which states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. During 2014 and 2013, distributed earnings representing nonforfeitable dividends of $1.0 million and $0.2 million, respectively, were allocated to the participating securities. There were no distributed earnings representing nonforfeitable dividends allocated to the participating securities during 2012. Undistributed earnings representing nonforfeitable dividends of $0.2 million were allocated to the participating securities during both 2013 and 2012. There were no undistributed earnings representing nonforfeitable dividends allocated to the participating securities during 2014. | |||||||||||||||
In accordance with the Earnings Per Share Topic of the FASB ASC, basic earnings available (loss attributable) to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings available (loss attributable) to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards and the incremental common shares issuable upon the exercise of stock options, using the more dilutive of either the two-class method or the treasury stock method. | |||||||||||||||
The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): | |||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | |||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 87,939 | $ | 70,001 | $ | 49,557 | |||||||||
Income from consolidated joint venture attributable to non-controlling interest | -6,676 | -4,013 | -1,761 | ||||||||||||
Distributions to non-controlling interest | -32 | -32 | -31 | ||||||||||||
Preferred stock dividends and redemption charges | -9,200 | -19,013 | -29,748 | ||||||||||||
Dividends paid on unvested restricted stock compensation | -969 | -201 | — | ||||||||||||
Undistributed income allocated to unvested restricted stock compensation | — | -235 | -203 | ||||||||||||
Numerator for basic and diluted earnings available to common stockholders | $ | 71,062 | $ | 46,507 | $ | 17,814 | |||||||||
Denominator: | |||||||||||||||
Weighted average basic and diluted common shares outstanding | 192,674 | 161,784 | 127,027 | ||||||||||||
Basic and diluted earnings available to common stockholders per common share | $ | 0.37 | $ | 0.29 | $ | 0.14 | |||||||||
The Company’s unvested restricted shares associated with its long-term incentive plan and shares associated with common stock options have been excluded from the above calculation of earnings per share for the years ended December 31, 2014, 2013 and 2012, as their inclusion would have been anti-dilutive. Prior to their redemption in May 2013, the shares of the Company’s Series C preferred stock issuable upon conversion were excluded from the above calculation of earnings per share for the year ended December 31, 2012, as their inclusion would have been anti-dilutive. | |||||||||||||||
Segment Reporting | Segment Reporting | ||||||||||||||
The Company reports its consolidated financial statements in accordance with the Segment Reporting Topic of the FASB ASC. Currently, the Company operates in one segment, operations held for investment. | |||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||
In April 2014, the FASB issued Accounting Standards Update No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU No. 2014-08”). ASU No. 2014-08 raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. Under ASU No. 2014-08, a discontinued operation is (1) a component of an entity or group of components that has been disposed of by sale, disposed of other than by sale or is classified as held for sale that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results, or (2) an acquired business or nonprofit activity that is classified as held for sale on the date of the acquisition. A strategic shift that has or will have a major effect on an entity’s operations and financial results could include the disposal of (1) a major line of business, (2) a major geographical area (3) a major equity method investment, or (4) other major parts of an entity. ASU No. 2014-08 expands the disclosures for discontinued operations and requires new disclosures related to individually material disposals that do not meet the definition of a discontinued operation, an entity’s continuing involvement with a discontinued operation following the disposal date and retained equity method investments in a discontinued operation. ASU No. 2014-08 is effective prospectively for all disposals (or classifications as held for sale) of components of an entity that occur within annual periods beginning on or after December 15, 2014, and interim periods within that year. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company’s early adoption of ASU No. 2014-08 in the first quarter of 2014 did not have any effect on its financial statements as the Company had no disposals (or classifications as held for sale) during the year ended December 31, 2014. In the future, when the Company has disposals (or classifications as held for sale), it will be required to determine whether such disposal meets the discontinued operations requirements under ASU No. 2014-08. Additional disclosures may be required. | |||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU No. 2014-09”). The core principal of ASU No. 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principal, an entity will need to apply a five-step model: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU No. 2014-09 will become effective during the first quarter of 2017, and will require either a full retrospective approach or a modified retrospective approach, with early adoption prohibited. The Company is currently evaluating the impact that ASU No. 2014-09 will have on its financial statements. | |||||||||||||||
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU No. 2014-12”), which requires a reporting entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. ASU 2014-12 will become effective during the first quarter of 2016. Early adoption is permitted. ASU 2014-12 may be adopted either prospectively for share-based payment awards granted or modified on or after the effective date, or retrospectively, using a modified retrospective approach. The modified retrospective approach would apply to share-based payment awards outstanding as of the beginning of the earliest annual period presented in the financial statements on adoption, and to all new or modified awards thereafter. ASU No. 2014-12 will not have an effect on the Company’s financial statements unless the Company issues grants in the future that fall within its scope. | |||||||||||||||
Organization_and_Description_o1
Organization and Description of Business (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Organization and Description of Business | ||||
Schedule of number of hotels managed by each third-party manager | ||||
Number of Hotels | ||||
Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) | 11 | |||
Interstate Hotels & Resorts, Inc. | 6 | |||
Highgate Hotels L.P. and an affiliate | 4 | |||
Davidson Hotels & Resorts | 2 | |||
Hilton Worldwide | 2 | |||
Hyatt Corporation | 2 | |||
Crestline Hotels & Resorts | 1 | |||
Dimension Development Company | 1 | |||
Fairmont Hotels & Resorts (U.S.) | 1 | |||
Total hotels held for investment | 30 | |||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||
Summary of changes in reporting period | |||||||||||||||
Number of | |||||||||||||||
days in 2013 | |||||||||||||||
2013 | 2012 | versus 2012 (1) | |||||||||||||
First quarter | December 29 — March 31 | December 31 — March 23 | 8 days | ||||||||||||
Second quarter | April 1 — June 30 | March 24 — June 15 | 7 days | ||||||||||||
Third quarter | July 1 — September 30 | June 16 — September 7 | 8 days | ||||||||||||
Fourth quarter | October 1 — December 31 | September 8 — December 28 | (20 days) | ||||||||||||
Full year | December 29, 2012 — December 31, 2013 | December 31, 2011 — December 28, 2012 | 3 days | ||||||||||||
-1 | Number of days in 2013 versus 2012 does not include the leap day, February 29, 2012, as this extra day was not caused by the Marriott calendar conversion. | ||||||||||||||
Schedule of estimated effects of a Third-Party manager's fiscal calendar on calendar year total revenue and net income | The Company estimates that Marriott’s fiscal calendar had the following effects on the Company’s total revenue and net income based on the average daily revenues and income generated by its Marriott hotels during the years ended December 31, 2014, 2013 and 2012 as follows (in thousands): | ||||||||||||||
2014 | 2013 (1) | 2012 (1) | |||||||||||||
Total revenue | $ | — | $ | 2,300 | $ | -1,251 | |||||||||
Net income | $ | — | $ | 672 | $ | -328 | |||||||||
-1 | Increases (decreases) to total revenue and net income based on the Marriott fiscal calendars for 2013 (368 days) and 2012 (364 days) versus a standard 365 day year. | ||||||||||||||
Schedule of amortization of deferred financing fees | Total amortization and write-off of deferred financing fees for 2014, 2013 and 2012 was as follows (in thousands): | ||||||||||||||
2014 | 2013 | 2012 | |||||||||||||
Continuing operations: | |||||||||||||||
Amortization of deferred financing fees | $ | 2,777 | $ | 2,955 | $ | 3,690 | |||||||||
Write-off of deferred financing fees | — | — | 3 | ||||||||||||
Total deferred financing fees — continuing operations | 2,777 | 2,955 | 3,693 | ||||||||||||
Discontinued operations: | |||||||||||||||
Amortization of deferred financing fees | — | 2 | 74 | ||||||||||||
Write-off of deferred financing fees | — | — | 185 | ||||||||||||
Total deferred financing fees — discontinued operations | — | 2 | 259 | ||||||||||||
Total amortization and write-off of deferred financing fees | $ | 2,777 | $ | 2,957 | $ | 3,952 | |||||||||
Schedule of assets measured at fair value on a recurring and non-recurring basis | The following table presents the Company’s assets measured at fair value on a recurring and non-recurring basis at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
December 31, 2014: | |||||||||||||||
Interest rate cap derivative agreements | $ | — | $ | — | $ | — | $ | — | |||||||
Life insurance policy (1) | 1,198 | — | 1,198 | — | |||||||||||
Total assets at December 31, 2014 | $ | 1,198 | $ | — | $ | 1,198 | $ | — | |||||||
December 31, 2013: | |||||||||||||||
Interest rate cap derivative agreements | $ | 16 | $ | — | $ | 16 | $ | — | |||||||
Life insurance policy (1) | 1,385 | — | 1,385 | — | |||||||||||
Total assets at December 31, 2013 | $ | 1,401 | $ | — | $ | 1,401 | $ | — | |||||||
-1 | Includes the split life insurance policy for one of the Company’s former associates, which the Company values using Level 2 measurements. These amounts are included in other assets, net on the accompanying consolidated balance sheets, and will be used to reimburse the Company for payments made to the former associate from the related retirement benefit agreement, which is included in accrued payroll and employee benefits on the accompanying consolidated balance sheets. | ||||||||||||||
Schedule of liabilities measured at fair value on a recurring and non-recurring basis | The following table presents the Company’s liabilities measured at fair value on a recurring and non-recurring basis at December 31, 2014 and 2013 (in thousands): | ||||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
December 31, 2014: | |||||||||||||||
Interest rate swap derivative agreement | $ | — | $ | — | $ | — | $ | — | |||||||
Retirement benefit agreement (1) | 1,198 | — | 1,198 | — | |||||||||||
Total liabilities at December 31, 2014 | $ | 1,198 | $ | — | $ | 1,198 | $ | — | |||||||
December 31, 2013: | |||||||||||||||
Interest rate swap derivative agreement | $ | 1,066 | $ | — | $ | 1,066 | $ | — | |||||||
Retirement benefit agreement (1) | 1,385 | — | 1,385 | — | |||||||||||
Total liabilities at December 31, 2013 | $ | 2,451 | $ | — | $ | 2,451 | $ | — | |||||||
-1 | Includes the retirement benefit agreement for one of the Company’s former associates, which the Company values using Level 2 measurements. The agreement calls for the balance of the retirement benefit agreement to be paid out to the former associate in 10 annual installments, beginning in 2011. As such, the Company has paid the former associate a total of $0.8 million through December 31, 2014, which was reimbursed to the Company using funds from the related split life insurance policy noted above. These amounts are included in accrued payroll and employee benefits in the accompanying consolidated balance sheets. | ||||||||||||||
Schedule of computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): | ||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2012 | |||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 87,939 | $ | 70,001 | $ | 49,557 | |||||||||
Income from consolidated joint venture attributable to non-controlling interest | -6,676 | -4,013 | -1,761 | ||||||||||||
Distributions to non-controlling interest | -32 | -32 | -31 | ||||||||||||
Preferred stock dividends and redemption charges | -9,200 | -19,013 | -29,748 | ||||||||||||
Dividends paid on unvested restricted stock compensation | -969 | -201 | — | ||||||||||||
Undistributed income allocated to unvested restricted stock compensation | — | -235 | -203 | ||||||||||||
Numerator for basic and diluted earnings available to common stockholders | $ | 71,062 | $ | 46,507 | $ | 17,814 | |||||||||
Denominator: | |||||||||||||||
Weighted average basic and diluted common shares outstanding | 192,674 | 161,784 | 127,027 | ||||||||||||
Basic and diluted earnings available to common stockholders per common share | $ | 0.37 | $ | 0.29 | $ | 0.14 | |||||||||
Investment_in_Hotel_Properties1
Investment in Hotel Properties (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Investment in Hotel Properties | |||||||||||
Schedule of investment in hotel properties | Investment in hotel properties, net consisted of the following (in thousands): | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Land | $ | 570,011 | $ | 439,304 | |||||||
Buildings and improvements | 3,237,596 | 2,977,458 | |||||||||
Furniture, fixtures and equipment | 450,057 | 414,192 | |||||||||
Intangibles | 147,947 | 171,889 | |||||||||
Franchise fees | 1,167 | 1,346 | |||||||||
Construction in process | 68,275 | 34,643 | |||||||||
4,475,053 | 4,038,832 | ||||||||||
Accumulated depreciation and amortization | -936,924 | -807,450 | |||||||||
$ | 3,538,129 | $ | 3,231,382 | ||||||||
Schedule of fair values of assets acquired, liabilities assumed and equity issued in hotel acquisition | The following table summarizes the fair values of assets acquired, liabilities assumed and equity issued in this acquisition (in thousands): | ||||||||||
Assets: | |||||||||||
Investment in hotel properties | $ | 327,035 | |||||||||
Accounts receivable | 3,122 | ||||||||||
Inventory | 75 | ||||||||||
Prepaid expenses | 238 | ||||||||||
Other assets | 150 | ||||||||||
Total assets acquired | 330,620 | ||||||||||
Liabilities: | |||||||||||
Accounts payable | 3,534 | ||||||||||
Accrued payroll and employee benefits | 142 | ||||||||||
Other current liabilities | 1,371 | ||||||||||
Other liabilities | 15 | ||||||||||
Total liabilities assumed | 5,062 | ||||||||||
Total equity issued directly to seller | 60,000 | ||||||||||
Total cash paid for acquisition | $ | 265,558 | |||||||||
Schedule of acquired finite lived intangible assets | Details of the intangibles acquired are as follows (in thousands): | ||||||||||
Value at | Weighted Average | ||||||||||
Acquisition | Expected Life | ||||||||||
Advanced bookings | $ | 4,207 | 41 months | ||||||||
Above/(Below) market lease agreements, net | 15 | 1 month | |||||||||
In-place lease agreements | 686 | 3 to 14 months | |||||||||
Total intangibles related to the 2014 acquisition | 4,908 | 44 to 55 months | |||||||||
Accumulated amortization | -533 | ||||||||||
Net book value of intangibles related to 2014 acquisition | $ | 4,375 | |||||||||
Schedule of amortization expense related to acquisitions | During the year ended December 31, 2014, the Company recorded amortization expense related to its Marriott Wailea intangibles as follows (in thousands): | ||||||||||
2014 | |||||||||||
Advanced bookings | $ | 481 | |||||||||
Above/(Below) market lease agreements, net | -21 | ||||||||||
In-place lease agreements | 73 | ||||||||||
Total amortization expense on intangibles related to the 2014 acquisition | $ | 533 | |||||||||
Effects of acquisitions on results of operations | In the Company’s opinion, all significant adjustments necessary to reflect the effects of the acquisitions have been made (in thousands, except per share data): | ||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | $ | 1,175,367 | $ | 1,100,354 | $ | 1,063,094 | |||||
Income available (loss attributable) to common stockholders from continuing operations | $ | 74,811 | $ | 19,931 | $ | -9,742 | |||||
Income (loss) per diluted share available (attributable) to common stockholders from continuing operations | $ | 0.39 | $ | 0.12 | $ | -0.08 | |||||
Schedule Of Finite And Indefinite Lived Intangible Assets Included in Investment in Hotel Properties | As of December 31, 2014 and 2013, intangible assets included in the Company’s investment in hotel properties, net consisted of the following (in thousands): | ||||||||||
2014 | 2013 | ||||||||||
Advanced bookings (1) | $ | 10,621 | $ | 35,154 | |||||||
Easement agreement (2) | 9,727 | 9,727 | |||||||||
Ground/air lease agreements (3) | 121,850 | 121,850 | |||||||||
In-place lease agreements (4) | 6,795 | 6,223 | |||||||||
Above/(below) market lease agreements, net (5) | -3,896 | -3,915 | |||||||||
Below market management agreement (6) | 2,850 | 2,850 | |||||||||
147,947 | 171,889 | ||||||||||
Accumulated amortization | -22,453 | -44,426 | |||||||||
$ | 125,494 | $ | 127,463 | ||||||||
Schedule of amortization expense on intangible assets included in investment in hotel properties | Amortization expense on these intangible assets for the years ended December 31, 2014, 2013 and 2012 consisted of the following (in thousands): | ||||||||||
2014 | 2013 | 2012 | |||||||||
Advanced bookings (1) | $ | 1,769 | $ | 4,560 | $ | 14,824 | |||||
Ground/air lease agreements (3) | 4,113 | 4,113 | 4,113 | ||||||||
In-place lease agreements (4) | 830 | 454 | 348 | ||||||||
Above/(below) market lease agreements, net (5) | -304 | -148 | -6 | ||||||||
Below market management agreement (6) | 469 | 469 | 212 | ||||||||
$ | 6,877 | $ | 9,448 | $ | 19,491 | ||||||
-1 | Advanced bookings consist of advance deposits related to the purchases of the Boston Park Plaza, the Hyatt Regency San Francisco, and the Marriott Wailea. The contractual advanced hotel bookings were recorded at a discounted present value based on estimated collectability, and are amortized using the straight-line method based over the periods the amounts are expected to be collected. The amortization expense for contractual advanced hotel bookings is included in depreciation and amortization expense in the Company’s consolidated statements of operations. The amounts will be fully amortized for the Boston Park Plaza, the Hyatt Regency San Francisco and the Marriott Wailea by June 2018, December 2017 and July 2018, respectively. | ||||||||||
-2 | The Easement agreement at the Hilton Times Square was valued at fair value at the date of acquisition. The Hilton Times Square easement agreement has an indefinite useful life, and, therefore, is not amortized. This non-amortizable intangible asset is reviewed annually for impairment and more frequently if events or circumstances indicate that the asset may be impaired. If a non-amortizable intangible asset is subsequently determined to have a finite useful life, the intangible asset will be written down to the lower of its fair value or carrying amount and then amortized prospectively, based on the remaining useful life of the intangible asset. | ||||||||||
-3 | Ground/air lease agreements at the Doubletree Guest Suites Times Square, the Hilton Times Square and the JW Marriott New Orleans were valued at fair value at the dates of acquisition. The agreements are amortized using the straight-line method over the remaining non-cancelable terms of the related agreements, which range from between approximately 22 and 76 years as of December 31, 2014. The amortization expense for the agreements is included in property tax, ground lease and insurance expense in the Company’s consolidated statements of operations. | ||||||||||
-4 | In-place lease agreements at the Boston Park Plaza, the Doubletree Guest Suites Times Square, the Hilton New Orleans St. Charles, the Hilton San Diego Bayfront, the Hyatt Regency San Francisco and the Marriott Wailea, were valued at fair value at the dates of acquisition. The agreements are amortized using the straight-line method over the remaining non-cancelable terms of the related agreements, which range from between approximately two months and 13 years as of December 31, 2014. The amortization expense for the agreements is included in depreciation and amortization expense in the Company’s consolidated statements of operations. | ||||||||||
-5 | The above/(below) market lease agreements, net consist of unfavorable tenant lease liabilities at the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hyatt Regency San Francisco and the Marriott Wailea, and favorable tenant lease assets at the Hilton New Orleans St. Charles, the Hyatt Regency San Francisco and the Marriott Wailea. These agreements were valued at fair value at the dates of acquisition, and are amortized using the straight-line method over the remaining non-cancelable terms of the related agreements, which range from between approximately two months and 17 years as of December 31, 2014. The amortization expense for the agreements is included in other operating revenue in the Company’s consolidated statements of operations. | ||||||||||
-6 | The below market management agreement at the Hilton Garden Inn Chicago Downtown/Magnificent Mile was valued at fair value at the acquisition date. The agreement is comprised of two components, one for the management of the Hilton Garden Inn Chicago Downtown/Magnificent Mile, and the other for the potential management of a future hotel. The agreement is amortized using the straight-line method over the remaining non-cancelable terms of the two components, approximately 3 and 8 years each as of December 31, 2014. The amortization expense for the agreement is included in property general and administrative expense in the Company’s consolidated statements of operations. | ||||||||||
Schedule of amortization expense for next five years | For the next five years, amortization expense for the intangible assets noted above is expected to be as follows (in thousands): | ||||||||||
2015 | $ | 7,334 | |||||||||
2016 | $ | 7,239 | |||||||||
2017 | $ | 7,206 | |||||||||
2018 | $ | 5,673 | |||||||||
2019 | $ | 4,341 | |||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Discontinued Operations | |||||||||||
Schedule of operating results of discontinued operations | The following table sets forth the discontinued operations for the years ended December 31, 2014, 2013 and 2012 for the four hotels and the commercial laundry facility sold in 2013, and the four hotels and the office building sold in 2012 (in thousands): | ||||||||||
2014 | 2013 | 2012 | |||||||||
Operating revenues | $ | — | $ | 3,690 | $ | 100,861 | |||||
Operating expenses | -350 | -3,686 | -71,089 | ||||||||
Interest expense | — | -99 | -6,490 | ||||||||
Depreciation and amortization expense | — | — | -13,164 | ||||||||
Loss on extinguishment of debt | — | -3,115 | — | ||||||||
Gain on sale of hotels and other assets, net | 5,199 | 51,620 | 38,292 | ||||||||
Income from discontinued operations | $ | 4,849 | $ | 48,410 | $ | 48,410 | |||||
Rochester Portfolio | |||||||||||
Discontinued Operations | |||||||||||
Schedule of activity in accumulated other comprehensive loss | The following table details the activity in accumulated other comprehensive loss in January 2013 due to the sale of the Rochester Portfolio (in thousands): | ||||||||||
One Month Ended | Affected Line in the Company’s Statements of | ||||||||||
January 31, 2013 | Operations and Comprehensive Income | ||||||||||
Beginning balance of accumulated other comprehensive loss | $ | -5,335 | |||||||||
Sale of Rochester Portfolio — pension liability adjustment | 5,335 | Income from discontinued operations | |||||||||
Ending balance of accumulated other comprehensive loss | $ | — | |||||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Amortization expense | ||||||||
Schedule of other assets | Other assets, net consisted of the following (in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Property and equipment, net | $ | 2,127 | $ | 2,478 | ||||
Land held for development | 188 | 188 | ||||||
Intangibles, net | 6,677 | 7,277 | ||||||
Interest rate cap derivative agreements | — | 16 | ||||||
Cash trap receivables | — | 4,443 | ||||||
Other receivables | 2,094 | 3,942 | ||||||
Other | 3,399 | 2,762 | ||||||
$ | 14,485 | $ | 21,106 | |||||
Schedule of property and equipment | As of December 31, 2014 and 2013, property and equipment, net consisted of the following (in thousands): | |||||||
2014 | 2013 | |||||||
Cost basis | $ | 11,573 | $ | 10,933 | ||||
Accumulated depreciation | -9,446 | -8,455 | ||||||
Property and equipment, net | $ | 2,127 | $ | 2,478 | ||||
Schedule of amortization expense for next five years | For the next five years, amortization expense for the intangible assets noted above is expected to be as follows (in thousands): | |||||||
2015 | $ | 7,334 | ||||||
2016 | $ | 7,239 | ||||||
2017 | $ | 7,206 | ||||||
2018 | $ | 5,673 | ||||||
2019 | $ | 4,341 | ||||||
BuyEfficient, LLC | ||||||||
Amortization expense | ||||||||
Schedule of amortization expense for next five years | For the next five years, amortization expense for the BuyEfficient intangible assets is expected to be as follows (in thousands): | |||||||
2015 | $ | 600 | ||||||
2016 | $ | 600 | ||||||
2017 | $ | 600 | ||||||
2018 | $ | 351 | ||||||
2019 | $ | 337 | ||||||
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Notes Payable | |||||||||||
Schedule of notes payable | Notes payable consisted of the following at December 31 (in thousands): | ||||||||||
2014 | 2013 | ||||||||||
Notes payable requiring payments of interest and principal, with fixed rates ranging from 4.12% and 5.95% at December 31, 2014, and 4.4% and 6.6% at December 31, 2013; maturing at dates ranging from May 2015 through January 2025. The notes are collateralized by first deeds of trust on 14 hotel properties at both December 31, 2014 and 2013. | $ | 1,023,780 | $ | 993,164 | |||||||
Note payable requiring payments of interest and principal, bearing a blended rate of one-month LIBOR plus 225 basis points at December 31, 2014, and three-month LIBOR plus 325 basis points at December 31, 2013; maturing in August 2019. The note is collateralized by a first deed of trust on one hotel property. | 228,296 | 231,451 | |||||||||
Note payable requiring payments of interest only through October 2013, and interest and principal thereafter, with a blended interest rate of one-month LIBOR plus 325 basis points; maturing in October 2018. The note is collateralized by a first deed of trust on one hotel property. | 177,216 | 179,460 | |||||||||
Total notes payable | 1,429,292 | 1,404,075 | |||||||||
Less: current portion | -121,328 | -23,289 | |||||||||
Notes payable, less current portion | $ | 1,307,964 | $ | 1,380,786 | |||||||
Schedule of interest expense on notes payable | Total interest incurred and expensed on the notes payable is as follows (in thousands): | ||||||||||
2014 | 2013 | 2012 | |||||||||
Interest expense on debt and capital lease obligations | $ | 70,067 | $ | 69,806 | $ | 71,664 | |||||
(Gain) loss on derivatives, net | -529 | -525 | 406 | ||||||||
Accretion of Senior Notes | — | 3 | 1,058 | ||||||||
Amortization of deferred financing fees | 2,777 | 2,955 | 3,690 | ||||||||
Write-off of deferred financing fees | — | — | 3 | ||||||||
$ | 72,315 | $ | 72,239 | $ | 76,821 | ||||||
Schedule of aggregate future principal maturities and amortization of notes payable | Aggregate future principal maturities and amortization of notes payable at December 31, 2014, are as follows (in thousands): | ||||||||||
2015 | $ | 121,328 | |||||||||
2016 | 205,802 | ||||||||||
2017 | 257,405 | ||||||||||
2018 | 290,852 | ||||||||||
2019 | 223,880 | ||||||||||
Thereafter | 330,025 | ||||||||||
Total | $ | 1,429,292 | |||||||||
Other_Current_Liabilities_and_1
Other Current Liabilities and Other Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Other Current Liabilities and Other Liabilities | ||||||||
Schedule of other current liabilities | Other current liabilities consisted of the following (in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Property, sales and use taxes payable | $ | 14,490 | $ | 14,482 | ||||
Income tax payable | 295 | — | ||||||
Accrued interest | 3,289 | 3,078 | ||||||
Advance deposits | 10,742 | 8,259 | ||||||
Management fees payable | 3,467 | 1,077 | ||||||
Other | 4,183 | 3,392 | ||||||
$ | 36,466 | $ | 30,288 | |||||
Schedule of other liabilities | Other liabilities consisted of the following (in thousands): | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Deferred gain on sale of asset | $ | 7,000 | $ | 14,000 | ||||
Interest rate swap derivative agreement | — | 1,066 | ||||||
Accrued income tax | 1,541 | 1,491 | ||||||
Deferred revenue | 6,790 | 6,918 | ||||||
Deferred rent | 15,075 | 12,270 | ||||||
Deferred incentive management fees | 534 | 1,714 | ||||||
Other | 2,667 | 2,499 | ||||||
$ | 33,607 | $ | 39,958 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Taxes | |||||||||||||||||
Schedule of income tax provision | The income tax provision for the Company is included in the consolidated financial statements as follows (in thousands): | ||||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 255 | $ | 6,371 | $ | 850 | |||||||||||
State | -76 | 1,774 | 298 | ||||||||||||||
Total current income tax provision | $ | 179 | $ | 8,145 | $ | 1,148 | |||||||||||
Deferred: | |||||||||||||||||
Federal | $ | -2,341 | $ | -9,488 | $ | 1,031 | |||||||||||
State | -598 | -2,426 | 278 | ||||||||||||||
Change in valuation allowance | 2,939 | 11,914 | -1,309 | ||||||||||||||
Total deferred income tax provision | $ | — | $ | — | $ | — | |||||||||||
Schedule of tax effects of temporary differences that gave rise to the deferred tax assets (liabilities) | The tax effects of temporary differences giving rise to the deferred tax assets (liabilities) are as follows (in thousands): | ||||||||||||||||
December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
NOL carryover | $ | 28,420 | $ | 31,258 | |||||||||||||
Other reserves | 2,784 | 3,270 | |||||||||||||||
State taxes and other | -4,766 | -4,909 | |||||||||||||||
Depreciation | 375 | 133 | |||||||||||||||
Deferred tax asset before valuation allowance | 26,813 | 29,752 | |||||||||||||||
Valuation allowance | -26,813 | -29,752 | |||||||||||||||
$ | — | $ | — | ||||||||||||||
Schedule of characterization of distributions | For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. For the years ended December 31, 2014, 2013 and 2012, distributions paid per share were characterized as follows (unaudited): | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Amount | % | Amount | % | Amount | % | ||||||||||||
Common Stock: | |||||||||||||||||
Ordinary income | $ | 0.510 | 100 | % | $ | 0.100 | 100 | % | $ | — | — | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | 0.510 | 100 | % | $ | 0.100 | 100 | % | $ | — | — | % | |||||
Preferred Stock — Series A | |||||||||||||||||
Ordinary income | $ | — | — | % | $ | 0.330 | 100 | % | $ | 2.000 | 100 | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | — | — | % | $ | 0.330 | 100 | % | $ | 2.000 | 100 | % | |||||
Preferred Stock — Series C | |||||||||||||||||
Ordinary income | $ | — | — | % | $ | 0.656 | 100 | % | $ | 1.572 | 100 | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | — | — | % | $ | 0.656 | 100 | % | $ | 1.572 | 100 | % | |||||
Preferred Stock — Series D | |||||||||||||||||
Ordinary income | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | |||||
Capital gain | — | — | — | — | — | — | |||||||||||
Return of capital | — | — | — | — | — | — | |||||||||||
Total | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | $ | 2.000 | 100 | % | |||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stockholders' Equity | |||||||||||
Schedule of dividends declared per share | |||||||||||
2014 | 2013 | 2012 | |||||||||
Series A preferred stock | $ | — | $ | 0.50 | $ | 2.00 | |||||
Series D preferred stock | 2.00 | 2.00 | 2.00 | ||||||||
Common stock (1) | 0.51 | 0.10 | — | ||||||||
$ | 2.51 | $ | 2.60 | $ | 4.00 | ||||||
LongTerm_Incentive_Plan_Tables
Long-Term Incentive Plan (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Long-Term Incentive Plan | |||||||||||||||||
Schedule of compensation expense and forfeitures related to restricted shares and performance awards | The Company’s compensation expense and forfeitures related to restricted shares and performance awards for the years ended December 31, 2014, 2013 and 2012 were as follows (in thousands): | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Compensation expense, including forfeitures | $ | 9,063 | $ | 7,189 | $ | 5,139 | |||||||||||
Summary of total compensation expense in relation to vesting of restricted common stock | The Company’s total compensation expense in relation to its vesting of restricted common stock presented in the Company’s consolidated statements of equity for the years ended December 31, 2014, 2013 and 2012 is as follows (in thousands): | ||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Total compensation expense, including forfeitures | $ | 9,063 | $ | 7,189 | $ | 5,139 | |||||||||||
Net-settle adjustment | -2,842 | -2,331 | -1,673 | ||||||||||||||
Amortization related to shares issued to design and construction employees | 474 | 393 | 302 | ||||||||||||||
Vesting of restricted stock presented on statement of equity | $ | 6,695 | $ | 5,251 | $ | 3,768 | |||||||||||
Schedule of non-vested stock grant activity | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Weighted | Weighted | Weighted | |||||||||||||||
Average | Average | Average | |||||||||||||||
Shares | Price | Shares | Price | Shares | Price | ||||||||||||
Outstanding at beginning of year | 2,009,412 | $ | 10.23 | 1,539,992 | $ | 9.11 | 1,407,152 | $ | 8.55 | ||||||||
Granted | 691,182 | $ | 13.48 | 975,711 | $ | 11.82 | 647,171 | $ | 9.51 | ||||||||
Vested | -799,845 | $ | 10.61 | -497,199 | $ | 9.89 | -513,095 | $ | 8.08 | ||||||||
Forfeited | -17,453 | $ | 11.90 | -9,092 | $ | 10.89 | -1,236 | $ | 9.38 | ||||||||
Outstanding at end of year | 1,883,296 | $ | 11.24 | 2,009,412 | $ | 10.23 | 1,539,992 | $ | 9.11 | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Commitments and Contingencies | ||||||||||||
Schedule of basic management fees | Total basic management fees incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were included in the Company’s consolidated statements of operations as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Continuing operations — property general and administrative expense, and corporate overhead expense | $ | 31,485 | $ | 25,218 | $ | 22,807 | ||||||
Discontinued operations | — | 65 | 2,061 | |||||||||
$ | 31,485 | $ | 25,283 | $ | 24,868 | |||||||
Schedule of incentive management fees | Total incentive management fees incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were included in the Company’s consolidated statements of operations as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Continuing operations — property general and administrative expense | $ | 4,034 | $ | 3,025 | $ | 2,738 | ||||||
Discontinued operations | — | — | 587 | |||||||||
$ | 4,034 | $ | 3,025 | $ | 3,325 | |||||||
Schedule of license and franchise costs | Total license and franchise fees incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were included in the Company’s consolidated statements of operations as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Continuing operations — franchise costs | $ | 38,271 | $ | 32,932 | $ | 30,067 | ||||||
Discontinued operations | — | 73 | 2,996 | |||||||||
$ | 38,271 | $ | 33,005 | $ | 33,063 | |||||||
Schedule of assets under capital lease | Assets under capital lease were included in investment in hotel properties, net on the Company’s consolidated balance sheets as follows (in thousands): | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Buildings and improvements | $ | 58,799 | $ | 58,799 | ||||||||
Furniture, fixtures and equipment | 104 | 104 | ||||||||||
58,903 | 58,903 | |||||||||||
Accumulated depreciation | -3,841 | -2,356 | ||||||||||
$ | 55,062 | $ | 56,547 | |||||||||
Schedule of future minimum lease payments under capital leases | Future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2014 are as follows (in thousands): | |||||||||||
2015 | $ | 1,409 | ||||||||||
2016 | 1,403 | |||||||||||
2017 | 1,403 | |||||||||||
2018 | 1,403 | |||||||||||
2019 | 1,403 | |||||||||||
Thereafter | 109,414 | |||||||||||
Total minimum lease payments (1) | 116,435 | |||||||||||
Less: Amount representing interest (2) | -100,852 | |||||||||||
Present value of net minimum lease payments (3) | $ | 15,583 | ||||||||||
-1 | Minimum lease payments do not include percentage rent which may be paid under the Hyatt Chicago Magnificent Mile building lease on the basis of 4.0% of the hotel’s gross room revenues over a certain threshold. The Company recorded zero in percentage rent during both 2014 and 2013, and $3,000 in percentage rent during 2012. | |||||||||||
-2 | Interest includes the amount necessary to reduce net minimum lease payments to present value calculated at the Company’s incremental borrowing rate at lease inception. | |||||||||||
-3 | The present value of net minimum lease payments are reflected in the Company’s consolidated balance sheet as of December 31, 2014 as a current obligation of $7,000, which is included in accounts payable and accrued expenses, and as a long-term obligation of $15.6 million, which is included in capital lease obligations, less current portion. | |||||||||||
Entity's hotels obligated to unaffiliated third parties under the terms of ground, building and air leases | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Number of hotels with ground, building and/or air leases | 9 | 10 | 10 | |||||||||
Number of ground leases | 8 | 9 | 9 | |||||||||
Number of building leases (1) | 1 | 1 | 1 | |||||||||
Number of air leases | 3 | 3 | 3 | |||||||||
Total number of ground, building and air leases | 12 | 13 | 13 | |||||||||
Schedule of ground, building and air lease rent | Total rent expense incurred pursuant to ground, building and air lease agreements for the years ended December 31, 2014, 2013 and 2012 was included in property tax, ground lease and insurance in the Company’s consolidated statements of operations as follows (in thousands): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Minimum rent, including straightline adjustments | $ | 14,999 | $ | 15,228 | $ | 14,950 | ||||||
Percentage rent (1) | 2,718 | 2,131 | 2,000 | |||||||||
$ | 17,717 | $ | 17,359 | $ | 16,950 | |||||||
Schedule of future minimum payments of operating leases | Future minimum payments under the terms of the ground and air leases, as well as the sublease on the corporate facility, in effect at December 31, 2014 are as follows (in thousands): | |||||||||||
2015 | $ | 8,438 | ||||||||||
2016 | 8,499 | |||||||||||
2017 | 11,523 | |||||||||||
2018 | 11,450 | |||||||||||
2019 | 11,236 | |||||||||||
Thereafter | 335,009 | |||||||||||
Total | $ | 386,155 | ||||||||||
Schedule of future minimum payments of obligations under employment agreements | Approximate minimum future obligations under employment agreements are as follows as of December 31, 2014 (in thousands): | |||||||||||
2015 | $ | 6,319 | ||||||||||
2016 | 706 | |||||||||||
$ | 7,025 | |||||||||||
Schedule of hotel geographic concentration of risk | ||||||||||||
Greater | ||||||||||||
Washington DC | ||||||||||||
California | New York | Illinois | Massachusetts | Area | ||||||||
Number of hotels | 9 | 3 | 3 | 3 | 3 | |||||||
Percentage of total rooms | 31 | % | 9 | % | 8 | % | 14 | % | 13 | % | ||
Percentage of total revenue for the year ended December 31, 2014 | 33 | % | 13 | % | 7 | % | 14 | % | 12 | % | ||
Quarterly_Operating_Results_Un1
Quarterly Operating Results (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Operating Results (Unaudited) | ||||||||||||||
Schedule of consolidated quarterly results | The consolidated quarterly results for the years ended December 31, 2014 and 2013, of the Company are as follows (in thousands): | |||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
Revenues — Continuing Operations | ||||||||||||||
2014 | $ | 243,483 | $ | 300,852 | $ | 307,783 | $ | 289,880 | ||||||
2013 | $ | 194,921 | $ | 234,638 | $ | 250,370 | $ | 243,895 | ||||||
Operating income — Continuing Operations | ||||||||||||||
2014 | $ | 14,295 | $ | 55,886 | $ | 50,832 | $ | 35,730 | ||||||
2013 | $ | 3,568 | $ | 36,622 | $ | 34,368 | $ | 24,640 | ||||||
Net income (loss) | ||||||||||||||
2014 | $ | -3,496 | $ | 43,535 | $ | 33,643 | $ | 14,257 | ||||||
2013 | $ | 28,926 | $ | 20,009 | $ | 15,817 | $ | 5,249 | ||||||
Income available (loss attributable) to common stockholders per share — basic and diluted | ||||||||||||||
2014 | $ | -0.04 | $ | 0.22 | $ | 0.14 | $ | 0.05 | ||||||
2013 | $ | 0.12 | $ | 0.09 | $ | 0.07 | $ | 0.01 | ||||||
Organization_and_Description_o2
Organization and Description of Business (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Organization and Description of Business | |
Number of hotels in which the company has interests | 30 |
Number of hotels managed by third parties | 30 |
Marriott | |
Organization and Description of Business | |
Number of hotels managed by third parties | 11 |
Interstate Hotels & Resorts, Inc | |
Organization and Description of Business | |
Number of hotels managed by third parties | 6 |
Highgate Hotels L.P. and an affiliate | |
Organization and Description of Business | |
Number of hotels managed by third parties | 4 |
Davidson Hotels & Resorts | |
Organization and Description of Business | |
Number of hotels managed by third parties | 2 |
Hilton Worldwide | |
Organization and Description of Business | |
Number of hotels managed by third parties | 2 |
Hyatt Corporation | |
Organization and Description of Business | |
Number of hotels managed by third parties | 2 |
Crestline Hotels & Resorts | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Dimension Development Company | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Fairmont Hotels & Resorts (U.S.) | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Sunstone Hotel Partnership, LLC | |
Organization and Description of Business | |
Controlling interest owned (as a percent) | 100.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2014 | |
item | item | ||||||||||
Accounts Receivable | |||||||||||
Allowance for doubtful accounts (in dollars) | 200,000 | $200,000 | $200,000 | ||||||||
Marriott | |||||||||||
Reporting Periods | |||||||||||
Weeks reported in fiscal quarter | 84 days | 84 days | 84 days | ||||||||
Number of additional days included in prior calendar year | 3 days | ||||||||||
Number of additional days included in fiscal period | 3 days | ||||||||||
Number of hotels using the same reporting periods | 10 | 10 | |||||||||
Number of days less in previous year's quarter | 8 days | 7 days | 8 days | ||||||||
Number of days more in previous year's quarter | 20 days | ||||||||||
Total revenue (in dollars) | 2,300,000 | -1,251,000 | |||||||||
Net income (in dollars) | $672,000 | ($328,000) | |||||||||
Number of days reported in a year | 368 days | 364 days | |||||||||
Number of standard days in a year | 365 days | ||||||||||
Marriott | Minimum | |||||||||||
Reporting Periods | |||||||||||
Weeks reported in fiscal quarter | 112 days | ||||||||||
Marriott | Maximum | |||||||||||
Reporting Periods | |||||||||||
Weeks reported in fiscal quarter | 119 days |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Investments in Hotel Properties and Other Assets | |||
Impairments on long-lived assets | $0 | $0 | $0 |
Franchise fees | Minimum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 14 years | ||
Franchise fees | Maximum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 27 years | ||
Buildings and improvements | Minimum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 5 years | ||
Buildings and improvements | Maximum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 35 years | ||
Furniture, fixtures and equipment | Minimum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 12 years | ||
BuyEfficient, LLC | Minimum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 7 years | ||
BuyEfficient, LLC | Maximum | |||
Investments in Hotel Properties and Other Assets | |||
Estimated useful life | 20 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2014 | |
property | property | property | ||
Assets Held for Sale | ||||
Maximum time period for sale for classification of asset as held for sale | 12 months | |||
Number of hotels and/or other assets held for sale | 0 | 0 | 4 | |
Deferred Financing Fees | ||||
Payment of deferred financing fees | $2,346,000 | $243,000 | $1,332,000 | |
Loss on extinguishment of debt | -4,638,000 | -44,000 | -191,000 | |
Total deferred financing fees | 2,777,000 | 2,957,000 | 3,952,000 | |
Continuing Operations Member | ||||
Deferred Financing Fees | ||||
Amortization of deferred financing fees | 2,777,000 | 2,955,000 | 3,690,000 | |
Write-off of deferred financing fees | 3,000 | |||
Total deferred financing fees | 2,777,000 | 2,955,000 | 3,693,000 | |
Discontinued Operations Member | ||||
Deferred Financing Fees | ||||
Amortization of deferred financing fees | 2,000 | 74,000 | ||
Write-off of deferred financing fees | 185,000 | |||
Total deferred financing fees | 2,000 | 259,000 | ||
Hilton San Diego Bayfront, JW Marriott New Orleans and Embassy Suites La Jolla Refinanced Debt Obligations | ||||
Deferred Financing Fees | ||||
Payment of deferred financing fees | 2,300,000 | |||
Write-off of deferred financing fees | 600,000 | |||
Boston Park Plaza Loan Assumption and Hilton San Diego Interest Rate Cap Derivative Agreement | ||||
Deferred Financing Fees | ||||
Payment of deferred financing fees | 200,000 | |||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | ||||
Deferred Financing Fees | ||||
Payment of deferred financing fees | 1,300,000 | |||
Write-off of deferred financing fees | 500,000 | |||
Senior unsecured revolving credit facility | ||||
Deferred Financing Fees | ||||
Payment of deferred financing fees | 1,300,000 | |||
Marriott Del Mar, Doubletree Guest Suites Minneapolis, Hilton Del Mar, Marriott Troy and Renaissance Long Beach debt obligations | ||||
Deferred Financing Fees | ||||
Write-off of deferred financing fees | $200,000 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill | |||
Goodwill impairment loss | $0 | $0 | $0 |
BuyEfficient, LLC | Minimum | |||
Intangible Assets | |||
Estimated useful life | 7 years | ||
BuyEfficient, LLC | Maximum | |||
Intangible Assets | |||
Estimated useful life | 20 years |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (Furniture, fixtures and equipment) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum | |
Corporate Office | |
Estimated useful life of property and equipment | 3 years |
Maximum | |
Corporate Office | |
Estimated useful life of property and equipment | 12 years |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Details 6) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Fair value of assets and liabilities measured at fair value on a recurring and non-recurring basis | |||
Impairment loss on continuing operations | $0 | $0 | $0 |
Percentage of debt having fixed interest rates | 71.60% | 70.70% | |
Carrying value of secured debt | 1,429,292,000 | 1,404,075,000 | |
Assets: | |||
Interest rate cap derivative agreements | 16,000 | ||
Life insurance policy | 1,198,000 | 1,385,000 | |
Total assets | 1,198,000 | 1,401,000 | |
Robert A. Alter | |||
Liabilities: | |||
Number of installments to be paid out under the Retirement Benefit Agreement | 10 | 10 | |
Amount paid under the Retirement Benefit Agreement | 800,000 | ||
Total at the end of the period | |||
Liabilities: | |||
Interest rate swap derivative agreements | 1,066,000 | ||
Retirement benefit agreement | 1,198,000 | 1,385,000 | |
Total liabilities | 1,198,000 | 2,451,000 | |
Level 2 | |||
Assets: | |||
Interest rate cap derivative agreements | 16,000 | ||
Life insurance policy | 1,198,000 | 1,385,000 | |
Total assets | 1,198,000 | 1,401,000 | |
Liabilities: | |||
Interest rate swap derivative agreements | 1,066,000 | ||
Retirement benefit agreement | 1,198,000 | 1,385,000 | |
Total liabilities | 1,198,000 | 2,451,000 | |
Level 3 | |||
Fair value of assets and liabilities measured at fair value on a recurring and non-recurring basis | |||
Weighted average cost of debt (as a percent) | 4.50% | 5.00% | |
Fair value of debt | 1,400,000,000 | 1,400,000,000 | |
JW Marriott New Orleans | Level 2 | |||
Liabilities: | |||
Number of interest rate swap derivative agreements | 1 | ||
Interest rate swap derivative agreements | 1,100,000 | ||
Doubletree Guest Suites Times Square and Hilton San Diego Bayfront hotel | Level 2 | |||
Assets: | |||
Number of interest rate cap derivative agreements | 2 | 2 | |
Interest rate cap derivative agreements | $16,000 |
Summary_of_Significant_Account9
Summary of Significant Accounting Policies (Details 7) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Impairment charges: | |||
Other assets, net | $0 | $0 | $0 |
Recovered_Sheet1
Summary of Significant Accounting Policies (Details 8) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Non-Controlling Interests | |||
Minority interest percentage in Hilton San Diego Bayfront | 25.00% | 25.00% | 25.00% |
Recovered_Sheet2
Summary of Significant Accounting Policies (Details 9) | 12 Months Ended | 1 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | |
Series D Cumulative Redeemable Preferred Stock | |||
Dividend rate (as a percent) | 8.00% | 8.00% | |
Series A Cumulative Redeemable Preferred Stock | |||
Dividend rate (as a percent) | 8.00% |
Recovered_Sheet3
Summary of Significant Accounting Policies (Details 10) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||||||||||
Numerator: | |||||||||||
Net income | $14,257 | $33,643 | $43,535 | ($3,496) | $5,249 | $15,817 | $20,009 | $28,926 | $87,939 | $70,001 | $49,557 |
Income from consolidated joint venture attributable to non-controlling interest | -6,676 | -4,013 | -1,761 | ||||||||
Distributions to non-controlling interest | -32 | -32 | -31 | ||||||||
Preferred stock dividends and redemption charges | -9,200 | -19,013 | -29,748 | ||||||||
Dividends paid on unvested restricted stock compensation | -969 | -201 | |||||||||
Undistributed income allocated to unvested restricted stock compensation | -235 | -203 | |||||||||
Numerator for basic and diluted earnings available to common stockholders | 71,062 | 46,507 | 17,814 | ||||||||
Income available to common stockholders | $72,031 | $46,943 | $18,017 | ||||||||
Denominator: | |||||||||||
Weighted average basic and diluted common shares outstanding (in shares) | 192,674 | 161,784 | 127,027 | ||||||||
Basic and diluted earnings available to common stockholders per common share (in dollars per share) | $0.05 | $0.14 | $0.22 | ($0.04) | $0.01 | $0.07 | $0.09 | $0.12 | $0.37 | $0.29 | $0.14 |
Segment Reporting | |||||||||||
Number of operating segments | 1 |
Investment_in_Hotel_Properties2
Investment in Hotel Properties (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Investment in Hotel Properties | ||
Land | $570,011 | $439,304 |
Buildings and improvements | 3,237,596 | 2,977,458 |
Furniture, fixtures and equipment | 450,057 | 414,192 |
Intangibles | 147,947 | 171,889 |
Franchise fees | 1,167 | 1,346 |
Construction in process | 68,275 | 34,643 |
Real Estate Investment Property, at Cost, Total | 4,475,053 | 4,038,832 |
Accumulated depreciation and amortization | -936,924 | -807,450 |
Investment in hotel properties, net | $3,538,129 | $3,231,382 |
Investment_in_Hotel_Properties3
Investment in Hotel Properties (Details 2) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Jul. 17, 2014 | Jun. 19, 2014 | Dec. 31, 2014 | Jul. 31, 2014 | |
acre | room | |||||||
Intangible Assets | ||||||||
Amortization expense | $7,543,000 | $10,115,000 | $20,198,000 | |||||
Acquisitions 2014 | Fairmont Newport Beach Land Member | ||||||||
Investment in Hotel Properties | ||||||||
Area of land acquired (in acres) | 7 | |||||||
Payment to acquire real estate | 11,000,000 | |||||||
Acquisitions 2014 | Marriott Wailea | ||||||||
Investment in Hotel Properties | ||||||||
Number of rooms in acquired hotel | 541 | 544 | 541 | |||||
Purchase price of acquired entity | 325,600,000 | |||||||
Proration and other credits | 4,400,000 | |||||||
Number of shares issued in connection with acquisition (in shares) | 4,034,970 | |||||||
Closing price of common stock on entity acquisition price determination date (in dollars per share) | $14.87 | |||||||
Closing price of common stock on entity acquisition date (in dollars per share) | $14.87 | |||||||
Net purchase price of acquired entity for accounting purposes | 325,600,000 | |||||||
Acquisition-related costs | 500,000 | |||||||
Number of rooms taken out of service | 3 | |||||||
Assets: | ||||||||
Investment in hotel properties | 327,035,000 | |||||||
Accounts receivable | 3,122,000 | |||||||
Inventory | 75,000 | |||||||
Prepaid expenses | 238,000 | |||||||
Other assets | 150,000 | |||||||
Total assets acquired | 330,620,000 | |||||||
Liabilities: | ||||||||
Accounts payable | 3,534,000 | |||||||
Accrued payroll and employee benefits | 142,000 | |||||||
Other current liabilities | 1,371,000 | |||||||
Other liabilities | 15,000 | |||||||
Total liabilities assumed | 5,062,000 | |||||||
Total equity issued directly to seller | 60,000,000 | |||||||
Total cash paid for acquisition | 265,558,000 | |||||||
Intangible Assets | ||||||||
Value of intangibles at acquisition | 4,908,000 | |||||||
Accumulated amortization | -533,000 | -533,000 | ||||||
Net balance of intangibles at end of period | 4,375,000 | 4,375,000 | ||||||
Amortization expense | 533,000 | |||||||
Acquisitions 2014 | Marriott Wailea | Land | ||||||||
Assets: | ||||||||
Investment in hotel properties | 119,700,000 | |||||||
Acquisitions 2014 | Marriott Wailea | Buildings and improvements | ||||||||
Assets: | ||||||||
Investment in hotel properties | 194,200,000 | |||||||
Acquisitions 2014 | Marriott Wailea | Furniture, fixtures and equipment | ||||||||
Assets: | ||||||||
Investment in hotel properties | 8,200,000 | |||||||
Minimum | Acquisitions 2014 | Marriott Wailea | Intangibles | ||||||||
Intangible Assets | ||||||||
Weighted average expected life | 44 months | |||||||
Maximum | Acquisitions 2014 | Marriott Wailea | Intangibles | ||||||||
Intangible Assets | ||||||||
Weighted average expected life | 55 months | |||||||
Advanced bookings | Acquisitions 2014 | Marriott Wailea | ||||||||
Intangible Assets | ||||||||
Value of intangibles at acquisition | 4,207,000 | |||||||
Weighted average expected life | 41 months | |||||||
Amortization expense | 481,000 | |||||||
Above/(below) market lease agreements, net | Acquisitions 2014 | Marriott Wailea | ||||||||
Intangible Assets | ||||||||
Value of intangibles at acquisition | 15,000 | |||||||
Weighted average expected life | 1 month | |||||||
Amortization expense | -21,000 | |||||||
Above/(below) market lease agreements, net | Minimum | ||||||||
Intangible Assets | ||||||||
Estimated useful life | 2 months | |||||||
Above/(below) market lease agreements, net | Maximum | ||||||||
Intangible Assets | ||||||||
Estimated useful life | 17 years | |||||||
In-place lease agreements | Acquisitions 2014 | Marriott Wailea | ||||||||
Intangible Assets | ||||||||
Value of intangibles at acquisition | 686,000 | |||||||
Amortization expense | $73,000 | |||||||
In-place lease agreements | Minimum | ||||||||
Intangible Assets | ||||||||
Estimated useful life | 2 months | |||||||
In-place lease agreements | Minimum | Acquisitions 2014 | Marriott Wailea | ||||||||
Intangible Assets | ||||||||
Weighted average expected life | 3 months | |||||||
In-place lease agreements | Maximum | ||||||||
Intangible Assets | ||||||||
Estimated useful life | 13 years | |||||||
In-place lease agreements | Maximum | Acquisitions 2014 | Marriott Wailea | ||||||||
Intangible Assets | ||||||||
Weighted average expected life | 14 months |
Investment_in_Hotel_Properties4
Investment in Hotel Properties (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | Jun. 30, 2012 | 1-May-13 | Jul. 02, 2013 | Dec. 02, 2013 | Jun. 04, 2012 | 2-May-12 | Jul. 19, 2012 | Dec. 31, 2011 | |
Investment in Hotel Properties | ||||||||||||||||||||
Total revenues | $289,880,000 | $307,783,000 | $300,852,000 | $243,483,000 | $243,895,000 | $250,370,000 | $234,638,000 | $194,921,000 | $1,141,998,000 | $923,824,000 | $829,084,000 | |||||||||
NET INCOME | 14,257,000 | 33,643,000 | 43,535,000 | -3,496,000 | 5,249,000 | 15,817,000 | 20,009,000 | 28,926,000 | 87,939,000 | 70,001,000 | 49,557,000 | |||||||||
Unaudited pro forma results of operations | ||||||||||||||||||||
Revenues | 1,175,367,000 | 1,100,354,000 | 1,063,094,000 | |||||||||||||||||
Income available (loss attributable) to common stockholders from continuing operations | 74,811,000 | 19,931,000 | -9,742,000 | |||||||||||||||||
Income (loss) per diluted share available (attributable) to common stockholders from continuing operations | $0.39 | $0.12 | ($0.08) | |||||||||||||||||
Boston Park Plaza | Non-recourse loan secured | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Debt assumed at acquisition | 119,200,000 | |||||||||||||||||||
Hyatt Chicago Magnificent Mile | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Number of shares issued in connection with acquisition (in shares) | 5,454,164 | |||||||||||||||||||
Acquisitions 2014 | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Total revenues | 27,000,000 | |||||||||||||||||||
NET INCOME | 3,500,000 | |||||||||||||||||||
Acquisitions 2013 | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Total revenues | 51,000,000 | |||||||||||||||||||
NET INCOME | 2,800,000 | |||||||||||||||||||
Acquisitions 2013 | Hilton New Orleans St. Charles | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Number of rooms in acquired hotel | 250 | |||||||||||||||||||
Purchase price of acquired entity | 59,100,000 | |||||||||||||||||||
Proration and other credits | 200,000 | |||||||||||||||||||
Acquisition-related costs | 400,000 | |||||||||||||||||||
Total proceeds held by accomodator to facilitate tax deferred exchange | 53,200,000 | |||||||||||||||||||
Acquisitions 2013 | Boston Park Plaza | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Number of rooms in acquired hotel | 1,053 | |||||||||||||||||||
Purchase price of acquired entity | 248,000,000 | |||||||||||||||||||
Proration and other credits | 2,000,000 | |||||||||||||||||||
Acquisition-related costs | 900,000 | |||||||||||||||||||
Total proceeds held by accomodator to facilitate tax deferred exchange | 92,300,000 | |||||||||||||||||||
Acquisitions 2013 | Boston Park Plaza | Non-recourse loan secured | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Debt assumed at acquisition | 119,200,000 | |||||||||||||||||||
Acquisitions 2013 | Hyatt Regency San Francisco | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Number of rooms in acquired hotel | 802 | |||||||||||||||||||
Purchase price of acquired entity | 262,500,000 | |||||||||||||||||||
Proration and other credits | 5,500,000 | |||||||||||||||||||
Acquisition-related costs | 500,000 | |||||||||||||||||||
Acquisitions 2012 | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Total revenues | 27,700,000 | |||||||||||||||||||
NET INCOME | -1,100,000 | |||||||||||||||||||
Acquisitions 2012 | Hyatt Chicago Magnificent Mile | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Number of rooms in acquired hotel | 417 | |||||||||||||||||||
Purchase price of acquired entity | 88,425,000 | |||||||||||||||||||
Proration and other credits | 300,000 | |||||||||||||||||||
Acquisition-related costs | 1,300,000 | |||||||||||||||||||
Total cash paid for acquisitions | 29,700,000 | |||||||||||||||||||
Number of shares issued in connection with acquisition (in shares) | 5,454,164 | |||||||||||||||||||
Total equity issued directly to seller | 58,425,000 | |||||||||||||||||||
Stock consideration premium | 103.00% | |||||||||||||||||||
Closing price of common stock on entity acquisition price determination date (in dollars per share) | $10.40 | |||||||||||||||||||
Closing price of common stock on entity acquisition date (in dollars per share) | $9.38 | |||||||||||||||||||
Net purchase price of acquired entity for accounting purposes | 81,160,000 | |||||||||||||||||||
Acquisitions 2012 | Hilton Garden Inn | ||||||||||||||||||||
Investment in Hotel Properties | ||||||||||||||||||||
Number of rooms in acquired hotel | 357 | |||||||||||||||||||
Purchase price of acquired entity | 90,300,000 | |||||||||||||||||||
Proration and other credits | 1,450,000 | |||||||||||||||||||
Acquisition-related costs | $700,000 | $200,000 |
Investment_in_Hotel_Properties5
Investment in Hotel Properties (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets | |||
Amortization expense | $7,543 | $10,115 | $20,198 |
Intangible assets included in hotel properties | |||
Intangible Assets | |||
Value of intangibles at acquisition | 147,947 | 171,889 | |
Accumulated amortization | -22,453 | -44,426 | |
Net balance of intangibles at end of period | 125,494 | 127,463 | |
Amortization expense | 6,877 | 9,448 | 19,491 |
Intangible assets included in hotel properties | Easement agreements | |||
Intangible Assets | |||
Value of intangibles at acquisition | 9,727 | 9,727 | |
Intangible assets included in hotel properties | Advanced bookings | |||
Intangible Assets | |||
Value of intangibles at acquisition | 10,621 | 35,154 | |
Amortization expense | 1,769 | 4,560 | 14,824 |
Intangible assets included in hotel properties | Ground/air lease agreements | |||
Intangible Assets | |||
Value of intangibles at acquisition | 121,850 | 121,850 | |
Amortization expense | 4,113 | 4,113 | 4,113 |
Intangible assets included in hotel properties | In-place lease agreements | |||
Intangible Assets | |||
Value of intangibles at acquisition | 6,795 | 6,223 | |
Amortization expense | 830 | 454 | 348 |
Intangible assets included in hotel properties | Above/(below) market lease agreements, net | |||
Intangible Assets | |||
Value of intangibles at acquisition | -3,896 | -3,915 | |
Amortization expense | -304 | -148 | -6 |
Intangible assets included in hotel properties | Below-market management agreement | |||
Intangible Assets | |||
Value of intangibles at acquisition | 2,850 | 2,850 | |
Amortization expense | $469 | $469 | $212 |
Minimum | Ground/air lease agreements | |||
Intangible Assets | |||
Estimated useful life | 22 years | ||
Minimum | In-place lease agreements | |||
Intangible Assets | |||
Estimated useful life | 2 months | ||
Minimum | Above/(below) market lease agreements, net | |||
Intangible Assets | |||
Estimated useful life | 2 months | ||
Minimum | Below-market management agreement | |||
Intangible Assets | |||
Estimated useful life | 3 years | ||
Maximum | Ground/air lease agreements | |||
Intangible Assets | |||
Estimated useful life | 76 years | ||
Maximum | In-place lease agreements | |||
Intangible Assets | |||
Estimated useful life | 13 years | ||
Maximum | Above/(below) market lease agreements, net | |||
Intangible Assets | |||
Estimated useful life | 17 years | ||
Maximum | Below-market management agreement | |||
Intangible Assets | |||
Estimated useful life | 8 years |
Investment_in_Hotel_Properties6
Investment in Hotel Properties (Details 5) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Investment in Hotel Properties | |
Future amortization expense on intangible assets in 2015 | $7,334 |
Future amortization expense on intangible assets in 2016 | 7,239 |
Future amortization expense on intangible assets in 2017 | 7,206 |
Future amortization expense on intangible assets in 2018 | 5,673 |
Future amortization expense on intangible assets in 2019 | $4,341 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||||
Jan. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | 31-May-14 | Jun. 30, 2014 | Aug. 31, 2012 | Sep. 30, 2012 | |
item | item | ||||||||
Discontinued Operations | |||||||||
Number of hotels and/or other assets sold | 4 | ||||||||
Gain (loss) on sale | $5,199,000 | $51,620,000 | $38,292,000 | ||||||
Deferred gain on sale of asset | 7,000,000 | 14,000,000 | 7,000,000 | ||||||
Amount of mortgage extinguished | -122,622,000 | ||||||||
Loss on extinguishment of debt | 4,638,000 | 44,000 | 191,000 | ||||||
Accumulated other comprehensive loss | |||||||||
Beginning balance of accumulated other comprehensive loss | -5,335,000 | -5,335,000 | |||||||
Pension liability reclassification | 5,335,000 | 5,335,000 | |||||||
Ending balance of accumulated other comprehensive loss | -5,335,000 | ||||||||
Certain Hotels Sold During 2004, 2005, 2010 and 2013 | Insurance-related Assessments [Member] | |||||||||
Discontinued Operations | |||||||||
Settlement costs accrued during the period | 400,000 | ||||||||
Rochester Portfolio | |||||||||
Discontinued Operations | |||||||||
Number of hotels and/or other assets sold | 4 | ||||||||
Number of rooms sold | 1,222 | ||||||||
Net proceeds received from sale of hotel properties and other assets | 195,600,000 | ||||||||
Cash proceeds held by accommodator | 145,700,000 | ||||||||
Gain (loss) on sale | 51,600,000 | 7,000,000 | |||||||
Deferred gain on sale of asset | 3,700,000 | ||||||||
Working cash advance provided to buyer | 3,700,000 | ||||||||
Carrying value of asset net of deferred gain | 0 | 0 | 0 | ||||||
Total liability related to pension plan | 14,000,000 | ||||||||
Rochester Portfolio | Preferred equity investment | |||||||||
Discontinued Operations | |||||||||
Preferred equity investment | 25,000,000 | ||||||||
Dividend yield on preferred equity investment (as a percent) | 11.00% | ||||||||
Deferred gain on sale of asset | 25,000,000 | ||||||||
Dividends on the preferred equity investment | 2,800,000 | 2,600,000 | |||||||
Carrying value of asset net of deferred gain | 0 | 0 | 0 | ||||||
Rochester Portfolio | Indemnification Agreement [Member] | |||||||||
Discontinued Operations | |||||||||
Settlement costs accrued during the period | 300,000 | 1,800,000 | |||||||
Number of hotels for which potential future costs for certain capital expenditures exist | 1 | 1 | 1 | ||||||
Estimated liability, minimum | 2,000,000 | ||||||||
Estimated liability, maximum | 3,000,000 | ||||||||
Total amount accrued for contingency | 2,100,000 | ||||||||
Loss contingency payment | 1,300,000 | ||||||||
Balance of accrued settlement costs | 800,000 | 800,000 | |||||||
Rochester Portfolio | Retirement plans | |||||||||
Discontinued Operations | |||||||||
Deferred gain on sale of asset | 14,000,000 | 7,000,000 | 7,000,000 | ||||||
Total liability related to pension plan | 14,000,000 | 7,000,000 | 14,000,000 | 7,000,000 | |||||
Reduction in pension plan liability | 7,000,000 | ||||||||
Kahler Grand | |||||||||
Discontinued Operations | |||||||||
Number of rooms sold | 660 | ||||||||
Repayment of mortgage debt | 26,700,000 | ||||||||
Total cost to extinguish debt | 29,800,000 | ||||||||
Loss on extinguishment of debt | 3,100,000 | ||||||||
Commercial laundry facility | |||||||||
Discontinued Operations | |||||||||
Repayment of mortgage debt | 400,000 | ||||||||
Kahler Inn & Suites | |||||||||
Discontinued Operations | |||||||||
Number of rooms sold | 271 | ||||||||
Marriott Rochester | |||||||||
Discontinued Operations | |||||||||
Number of rooms sold | 202 | ||||||||
Residence Inn by Marriott Rochester | |||||||||
Discontinued Operations | |||||||||
Number of rooms sold | 89 | ||||||||
Marriott Del Mar | |||||||||
Discontinued Operations | |||||||||
Net proceeds received from sale of hotel properties and other assets | 17,700,000 | ||||||||
Gain (loss) on sale | 25,500,000 | ||||||||
Amount of mortgage extinguished | 47,100,000 | ||||||||
Write-off of deferred financing fees | 48,000 | ||||||||
Portfolio sale | |||||||||
Discontinued Operations | |||||||||
Net proceeds received from sale of hotel properties and other assets | 28,600,000 | ||||||||
Gain (loss) on sale | 12,700,000 | ||||||||
Amount of mortgage extinguished | 75,600,000 | ||||||||
Write-off of deferred financing fees | 100,000 | ||||||||
Discontinued Operations | |||||||||
Deferred incentive management fees liability assumed by buyer of hotel | 2,200,000 | ||||||||
Number of separate mortgages | 3 | ||||||||
Maximum | Rochester Portfolio | Retirement plans | |||||||||
Discontinued Operations | |||||||||
Total liability related to pension plan | $14,000,000 |
Discontinued_Operations_Detail1
Discontinued Operations (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Discontinued Operations | |||
Operating revenues | $3,690 | $100,861 | |
Operating expenses | -350 | -3,686 | -71,089 |
Interest expense | -99 | -6,490 | |
Depreciation and amortization expense | -13,164 | ||
Loss on extinguishment of debt | -3,115 | ||
Gain on sale of hotels and other assets, net | 5,199 | 51,620 | 38,292 |
Income from discontinued operations | $4,849 | $48,410 | $48,410 |
Interest_Rate_Derivative_Agree1
Interest Rate Derivative Agreements (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Apr. 30, 2014 | |
Interest Rate Derivative Agreements | |||||
Cost of new interest rate cap agreement | $12,000 | ||||
Fair values of derivative assets | 16,000 | ||||
Net gain or loss due to changes in the fair value of the company's derivative agreements | 529,000 | 525,000 | -406,000 | ||
Doubletree Guest Suites Times Square Mortgage Payable | |||||
Interest Rate Derivative Agreements | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Interest rate added to base rate (as a percent) | 3.25% | 3.25% | 3.25% | ||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||
Interest Rate Derivative Agreements | |||||
Interest rate, description of reference rate | one-month LIBOR | three-month LIBOR | |||
Interest rate added to base rate (as a percent) | 2.25% | 3.25% | 2.25% | ||
Interest Rate Cap Agreement | Not designated as hedging instrument | Doubletree Guest Suites Times Square and Hilton San Diego Bayfront hotel | Other assets, net | |||||
Interest Rate Derivative Agreements | |||||
Number of interest rate cap derivative agreements | 2 | 2 | 2 | ||
Fair values of derivative assets | 16,000 | ||||
Interest Rate Cap Agreement | Not designated as hedging instrument | Doubletree Guest Suites Times Square Mortgage Payable | |||||
Interest Rate Derivative Agreements | |||||
Interest rate, description of reference rate | LIBOR | LIBOR | |||
Strike rate under interest rate cap agreement | 4.00% | 4.00% | 4.00% | ||
Notional amount | 177,400,000 | 179,600,000 | 177,400,000 | ||
Interest Rate Cap Agreement | Not designated as hedging instrument | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||
Interest Rate Derivative Agreements | |||||
Interest rate, description of reference rate | LIBOR | LIBOR | |||
Strike rate under interest rate cap agreement | 3.75% | 3.75% | 3.75% | ||
Cost of new interest rate cap agreement | 12,000 | ||||
Notional amount | 117,000,000 | 117,000,000 | 117,000,000 | ||
Interest Rate Swap Agreement | Not designated as hedging instrument | Other liabilities | |||||
Interest Rate Derivative Agreements | |||||
Fair values of derivative liabilities | 1,100,000 | ||||
Interest Rate Swap Agreement | Not designated as hedging instrument | JW Marriott New Orleans Original Mortgage Payable | |||||
Interest Rate Derivative Agreements | |||||
Interest rate, description of reference rate | LIBOR | ||||
Notional amount | 39,800,000 | ||||
Fixed rate under interest rate swap agreement | 5.45% | ||||
Interest rate swap termination fee | 600,000 | ||||
Interest Rate Swap Agreement | Not designated as hedging instrument | JW Marriott New Orleans Original Mortgage Payable | Other liabilities | |||||
Interest Rate Derivative Agreements | |||||
Number of interest rate swap derivative agreements | 1 | ||||
Fair values of derivative liabilities | $0 | $1,100,000 | 0 |
Other_Assets_Details
Other Assets (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other assets, net | ||||
Property and equipment, net | $2,127,000 | $2,478,000 | ||
Land held for development | 188,000 | 188,000 | ||
Intangibles, net | 6,677,000 | 7,277,000 | ||
Interest rate cap derivative agreements | 16,000 | |||
Cash trap receivables | 4,443,000 | |||
Other receivables | 2,094,000 | 3,942,000 | ||
Other | 3,399,000 | 2,762,000 | ||
Total other assets, net | 14,485,000 | 21,106,000 | ||
Property and equipment cost basis | 11,573,000 | 10,933,000 | ||
Accumulated depreciation | -9,446,000 | -8,455,000 | ||
Amortization expense | 7,543,000 | 10,115,000 | 20,198,000 | |
Proceeds from collection of cash trap receivables | 4,400,000 | |||
Amortization expense | ||||
2015 | 7,334,000 | |||
2016 | 7,239,000 | |||
2017 | 7,206,000 | |||
2018 | 5,673,000 | |||
2019 | 4,341,000 | |||
BuyEfficient, LLC | ||||
Other assets, net | ||||
Intangibles, net | 6,700,000 | 7,300,000 | ||
Accumulated amortization | 2,400,000 | 1,800,000 | ||
Amortization expense | 600,000 | 600,000 | 600,000 | |
Amortization expense | ||||
2015 | 600,000 | |||
2016 | 600,000 | |||
2017 | 600,000 | |||
2018 | 351,000 | |||
2019 | $337,000 | |||
BuyEfficient, LLC | Minimum | ||||
Other assets, net | ||||
Useful life of intangibles | 7 years | |||
BuyEfficient, LLC | Maximum | ||||
Other assets, net | ||||
Useful life of intangibles | 20 years |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Aug. 31, 2014 | Jan. 31, 2013 | Jul. 31, 2013 | |
item | item | ||||||
Notes payable: | |||||||
Notes payable | $1,429,292,000 | $1,404,075,000 | $1,429,292,000 | ||||
Less: current portion | -121,328,000 | -23,289,000 | -121,328,000 | ||||
Notes payable, less current portion | 1,307,964,000 | 1,380,786,000 | 1,307,964,000 | ||||
Total cost to extinguish debt | -122,622,000 | ||||||
Payment of deferred financing fees | 2,346,000 | 243,000 | 1,332,000 | ||||
Loss on extinguishment of debt | -4,638,000 | -44,000 | -191,000 | ||||
Notes payable maturing at dates ranging from May 2015 through January 2025 | |||||||
Notes payable: | |||||||
Notes payable | 1,023,780,000 | 993,164,000 | 1,023,780,000 | ||||
Fixed interest rate, low end of range (as a percent) | 4.12% | 4.40% | |||||
Fixed interest rate, high end of range (as a percent) | 5.95% | 6.60% | |||||
Number of hotels provided as collateral | 14 | 14 | 14 | ||||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||
Notes payable: | |||||||
Notes payable | 228,296,000 | 231,451,000 | 228,296,000 | ||||
Number of hotels provided as collateral | 1 | 1 | 1 | ||||
Interest rate, description of reference rate | one-month LIBOR | three-month LIBOR | |||||
Interest rate added to base rate (as a percent) | 2.25% | 3.25% | 2.25% | ||||
Number of lenders | 4 | ||||||
Number of lenders with modified participation | 3 | ||||||
Payment of deferred financing fees | 1,300,000 | ||||||
Write-off of deferred financing fees | 500,000 | ||||||
Costs incurred due to debt amendment | 100,000 | ||||||
Debt Related Commitment Fees and Debt Issuance Costs | 25,000 | ||||||
Senior Notes maturing in July 2027 | |||||||
Notes payable: | |||||||
Repurchase of senior notes | 42,000,000 | ||||||
Redemption of senior notes | 16,000,000 | ||||||
Aggregate principal amount of debt repurchased or redeemed | 58,000,000 | ||||||
Doubletree Guest Suites Times Square Mortgage Payable | |||||||
Notes payable: | |||||||
Notes payable | 177,216,000 | 179,460,000 | 177,216,000 | ||||
Number of hotels provided as collateral | 1 | 1 | 1 | ||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||||
Interest rate added to base rate (as a percent) | 3.25% | 3.25% | 3.25% | ||||
JW Marriott New Orleans Original Mortgage Payable | |||||||
Notes payable: | |||||||
Repayment of mortgage debt | 38,900,000 | ||||||
Write-off of deferred financing fees | 39,000 | ||||||
JW Marriott New Orleans Amended Mortgage Payable | |||||||
Notes payable: | |||||||
Fixed interest rate (as a percent) | 4.15% | 4.15% | |||||
Payment of deferred financing fees | 600,000 | ||||||
New mortgage loan | 90,000,000 | 90,000,000 | |||||
Loan amortization period | 30 years | ||||||
Embassy Suites La Jolla Original Mortgage Payable | |||||||
Notes payable: | |||||||
Repayment of mortgage debt | 67,100,000 | ||||||
Fixed interest rate (as a percent) | 6.60% | 6.60% | |||||
Write-off of deferred financing fees | 43,000 | ||||||
Loss on extinguishment of debt | 4,000,000 | ||||||
Total cost to extinguish debt | 71,100,000 | ||||||
Embassy Suites La Jolla Amended Mortgage Payable | |||||||
Notes payable: | |||||||
Fixed interest rate (as a percent) | 4.12% | 4.12% | |||||
Payment of deferred financing fees | 400,000 | ||||||
New mortgage loan | 65,000,000 | 65,000,000 | |||||
Loan amortization period | 30 years | ||||||
Senior unsecured revolving credit facility | |||||||
Notes payable: | |||||||
Payment of deferred financing fees | 1,300,000 | ||||||
Kahler Grand | |||||||
Notes payable: | |||||||
Repayment of mortgage debt | 26,700,000 | ||||||
Loss on extinguishment of debt | -3,100,000 | ||||||
Total cost to extinguish debt | 29,800,000 | ||||||
Commercial laundry facility | |||||||
Notes payable: | |||||||
Repayment of mortgage debt | 400,000 | ||||||
Non-recourse loan secured | Boston Park Plaza | |||||||
Notes payable: | |||||||
Fixed interest rate (as a percent) | 4.40% | ||||||
Debt assumed at acquisition | 119,200,000 | ||||||
Senior corporate credit facility | |||||||
Notes payable: | |||||||
Maximum borrowing capacity of credit facility | 150,000,000 | 150,000,000 | |||||
Maximum borrowing capacity of credit facility with lender approval | 350,000,000 | 350,000,000 | |||||
Senior corporate credit facility | Minimum | |||||||
Notes payable: | |||||||
Interest rate added to base rate (as a percent) | 1.75% | 1.75% | |||||
Senior corporate credit facility | Maximum | |||||||
Notes payable: | |||||||
Interest rate added to base rate (as a percent) | 3.50% | 3.50% | |||||
Interest Rate Swap Agreement | JW Marriott New Orleans Original Mortgage Payable | |||||||
Notes payable: | |||||||
Fixed interest rate (as a percent) | 5.45% | 5.45% | |||||
Costs incurred due to debt amendment | $600,000 |
Notes_Payable_Details_2
Notes Payable (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Interest incurred and expensed on the notes payable | |||
(Gain) loss on derivatives, net | ($529,000) | ($525,000) | $406,000 |
Accretion of Senior Notes | 3,000 | 1,058,000 | |
Total interest incurred and expensed on debt and capital lease obligations | 72,315,000 | 72,239,000 | 76,821,000 |
Aggregate future principal maturities and amortization of notes payable | |||
2015 | 121,328,000 | ||
2016 | 205,802,000 | ||
2017 | 257,405,000 | ||
2018 | 290,852,000 | ||
2019 | 223,880,000 | ||
Thereafter | 330,025,000 | ||
Total notes payable, net | 1,429,292,000 | 1,404,075,000 | |
Notes payable and capital lease obligations | |||
Interest incurred and expensed on the notes payable | |||
Interest expense on debt and capital lease obligations | 70,067,000 | 69,806,000 | 71,664,000 |
(Gain) loss on derivatives, net | -529,000 | -525,000 | 406,000 |
Accretion of Senior Notes | 3,000 | 1,058,000 | |
Amortization of deferred financing fees | 2,777,000 | 2,955,000 | 3,690,000 |
Write-off of deferred financing fees | 3,000 | ||
Total interest incurred and expensed on debt and capital lease obligations | $72,315,000 | $72,239,000 | $76,821,000 |
Other_Current_Liabilities_and_2
Other Current Liabilities and Other Liabilities (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-14 | Jan. 31, 2013 | |
Other Current Liabilities | |||||
Property, sales and use taxes payable | $14,490,000 | $14,482,000 | |||
Income tax payable | 295,000 | ||||
Accrued interest | 3,289,000 | 3,078,000 | |||
Advance deposits | 10,742,000 | 8,259,000 | |||
Management fees payable | 3,467,000 | 1,077,000 | |||
Other | 4,183,000 | 3,392,000 | |||
Other Current Liabilities | 36,466,000 | 30,288,000 | |||
Other Liabilities | |||||
Deferred gain on sale of asset | 7,000,000 | 14,000,000 | |||
Interest rate swap derivative agreement | 1,066,000 | ||||
Accrued income tax | 1,541,000 | 1,491,000 | |||
Deferred revenue | 6,790,000 | 6,918,000 | |||
Deferred rent | 15,075,000 | 12,270,000 | |||
Deferred incentive management fees | 534,000 | 1,714,000 | |||
Other | 2,667,000 | 2,499,000 | |||
Other Liabilities | 33,607,000 | 39,958,000 | |||
Other Current Liabilities and Other Liabilities | |||||
Gain (loss) on sale | 5,199,000 | 51,620,000 | 38,292,000 | ||
Unrecognized tax benefits | 1,500,000 | ||||
Interest expense incurred on unrecognized tax benefit | 50,000 | 600,000 | |||
Rochester Portfolio | |||||
Other Liabilities | |||||
Deferred gain on sale of asset | 3,700,000 | ||||
Other Current Liabilities and Other Liabilities | |||||
Portfolio's pension plan liability | 14,000,000 | ||||
Gain (loss) on sale | 7,000,000 | 51,600,000 | |||
Retirement plans | Rochester Portfolio | |||||
Other Liabilities | |||||
Deferred gain on sale of asset | 7,000,000 | 14,000,000 | |||
Other Current Liabilities and Other Liabilities | |||||
Portfolio's pension plan liability | 7,000,000 | 14,000,000 | 14,000,000 | ||
Reduction in pension plan liability | $7,000,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Current: | |||
Federal | $255,000 | $6,371,000 | $850,000 |
State | -76,000 | 1,774,000 | 298,000 |
Total current income tax provision | 179,000 | 8,145,000 | 1,148,000 |
Deferred: | |||
Federal | -2,341,000 | -9,488,000 | 1,031,000 |
State | -598,000 | -2,426,000 | 278,000 |
Change in valuation allowance | 2,939,000 | 11,914,000 | -1,309,000 |
Deferred income tax benefit (provision) | 0 | 0 | 0 |
Deferred tax assets (liabilities) | |||
NOL carryover | 28,420,000 | 31,258,000 | |
Other reserves | 2,784,000 | 3,270,000 | |
State taxes and other | -4,766,000 | -4,909,000 | |
Depreciation | 375,000 | 133,000 | |
Deferred tax asset before valuation allowance | 26,813,000 | 29,752,000 | |
Valuation allowance | -26,813,000 | -29,752,000 | |
Current income tax benefit | 600,000 | ||
Current income tax expense | 800,000 | 1,900,000 | |
Amount accrued related to the IRS audit | 4,700,000 | ||
Interest on income tax accrued related to the IRS audit | 600,000 | ||
Uncertain tax positions | 1,500,000 | ||
Interest expense recognized | 50,000 | 600,000 | |
Income tax penalties and interest expense recognized | 0 | ||
Deferred income tax benefit (provision) | 0 | 0 | 0 |
Net operating loss carryforwards for federal income tax purposes | $72,300,000 | $80,300,000 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Common Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $0.51 | $0.10 | |
Total (in dollars per share) | $0.51 | $0.10 | |
Ordinary income (as a percent) | 100.00% | 100.00% | |
Total (as a percent) | 100.00% | 100.00% | |
Series A Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $0.33 | $2 | |
Total (in dollars per share) | $0.33 | $2 | |
Ordinary income (as a percent) | 100.00% | 100.00% | |
Total (as a percent) | 100.00% | 100.00% | |
Series C Cumulative Convertible Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $0.66 | $1.57 | |
Total (in dollars per share) | $0.66 | $1.57 | |
Ordinary income (as a percent) | 100.00% | 100.00% | |
Total (as a percent) | 100.00% | 100.00% | |
Series D Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $2 | $2 | $2 |
Total (in dollars per share) | $2 | $2 | $2 |
Ordinary income (as a percent) | 100.00% | 100.00% | 100.00% |
Total (as a percent) | 100.00% | 100.00% | 100.00% |
Series_C_Cumulative_Convertibl1
Series C Cumulative Convertible Redeemable Preferred Stock (Details) (USD $) | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | 31-May-13 |
Series C Cumulative Convertible Redeemable Preferred Stock | |
Preferred stock redeemed (in shares) | 4,102,564 |
Amount paid to redeem Series C preferred stock | $101.10 |
Accrued dividends | 1.1 |
Additional redemption charge | $0.10 |
Preferred stock, Series C Cumulative Convertible Redeemable Preferred Stock, shares outstanding (in shares) | 0 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||
Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Jun. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2013 | Jul. 31, 2014 | Feb. 28, 2014 | |
Stockholders' equity | ||||||||||
Net proceeds from issuance of common stock | $283,456,000 | $565,760,000 | $126,179,000 | |||||||
Payment of common stock offering costs | -1,000,000 | -691,000 | -451,000 | |||||||
Proceeds from stock issuance used to redeem Series A preferred stock and Series C preferred stock | 279,700,000 | |||||||||
Hyatt Chicago Magnificent Mile | ||||||||||
Stockholders' equity | ||||||||||
Number of shares issued in connection with acquisition (in shares) | 5,454,164 | |||||||||
Payment of common stock offering costs | 100,000 | |||||||||
Series A Cumulative Redeemable Preferred Stock | ||||||||||
Stockholders' equity | ||||||||||
Number of shares redeemed | 7,050,000 | |||||||||
Amount paid to redeem Series A preferred stock | 178,600,000 | |||||||||
Accrued dividends paid on redemption | 2,300,000 | |||||||||
Additional redemption charges | 4,600,000 | |||||||||
Preferred stock, outstanding shares | 0 | |||||||||
Series D Cumulative Redeemable Preferred Stock | ||||||||||
Stockholders' equity | ||||||||||
Preferred stock, outstanding shares | 4,600,000 | 4,600,000 | ||||||||
Number of shares of stock issued | 4,600,000 | 4,600,000 | ||||||||
Liquidation preference (in dollars per share) | $25 | $25 | ||||||||
Future redemption price (in dollars per share) | $25 | |||||||||
Common Stock | ||||||||||
Stockholders' equity | ||||||||||
Net proceeds from issuance of common stock | 126,200,000 | 262,500,000 | 270,900,000 | 294,900,000 | ||||||
Number of shares issued | 12,143,273 | 18,000,000 | 20,000,000 | 25,300,000 | ||||||
Number of shares of the underwriters' over-allotment issued | 3,300,000 | |||||||||
Common Stock | At The Market | ||||||||||
Stockholders' equity | ||||||||||
Net proceeds from issuance of common stock | 21,000,000 | |||||||||
Number of shares issued | 1,352,703 | |||||||||
Common Stock | Maximum | At The Market | ||||||||||
Stockholders' equity | ||||||||||
Stock Issuance Program, Authorized Amount | 150,000,000 | |||||||||
Marriott Wailea | Common Stock | ||||||||||
Stockholders' equity | ||||||||||
Number of shares issued in connection with acquisition (in shares) | 4,034,970 | |||||||||
Total equity issued directly to seller | 60,000,000 | |||||||||
Payment of common stock offering costs | $100,000 |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Dividends | ||||
Preferred stock dividends declared (in dollars per share) | $0.50 | $2 | ||
Common stock dividends declared (in dollars per share) | $0.36 | $0.51 | $0.10 | |
Dividends declared (in dollars per share) | $2.51 | $2.60 | $4 | |
Series A Cumulative Redeemable Preferred Stock | ||||
Dividends | ||||
Preferred stock dividends declared (in dollars per share) | $0.50 | $2 | ||
Series D Cumulative Redeemable Preferred Stock | ||||
Dividends | ||||
Preferred stock dividends declared (in dollars per share) | $2 | $2 | $2 | |
Common Stock | ||||
Dividends | ||||
Common stock dividends declared (in dollars per share) | $0.51 | $0.10 |
LongTerm_Incentive_Plan_Detail
Long-Term Incentive Plan (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2008 |
Long-Term Incentive Plan | ||||
Number of common shares reserved for issuance under LTIP (in shares) | 12,050,000 | |||
Number of shares available for future issuance (in shares) | 6,537,837 | |||
Amortization related to shares issued to design and construction employees | $474 | $393 | $302 | |
Vesting of restricted stock presented on statement of equity | 6,695 | 5,251 | 3,768 | |
Non-vested stock grants, number of shares | ||||
Outstanding at the beginning of the period (in shares) | 2,009,412 | 1,539,992 | 1,407,152 | |
Granted (in shares) | 691,182 | 975,711 | 647,171 | |
Vested (in shares) | -799,845 | -497,199 | -513,095 | |
Forfeited (in shares) | -17,453 | -9,092 | -1,236 | |
Outstanding at the end of the period (in shares) | 1,883,296 | 2,009,412 | 1,539,992 | |
Non-vested stock grants, weighted average price | ||||
Outstanding at the beginning of the period (in dollars per share) | $10.23 | $9.11 | $8.55 | |
Granted (in dollars per share) | $13.48 | $11.82 | $9.51 | |
Vested (in dollars per share) | $10.61 | $9.89 | $8.08 | |
Forfeited (in dollars per share) | $11.90 | $10.89 | $9.38 | |
Outstanding at the end of the period (in dollars per share) | $11.24 | $10.23 | $9.11 | |
Restricted Shares and Performance awards | ||||
Long-Term Incentive Plan | ||||
Compensation Expense, including forfeitures | 9,063 | 7,189 | 5,139 | |
Net-settle adjustment | -2,842 | -2,331 | -1,673 | |
Amortization related to shares issued to design and construction employees | 474 | 393 | 302 | |
Vesting of restricted stock presented on statement of equity | $6,695 | $5,251 | $3,768 | |
Restricted Shares and Performance awards | Minimum | ||||
Long-Term Incentive Plan | ||||
Vesting period | 3 years | |||
Restricted Shares and Performance awards | Maximum | ||||
Long-Term Incentive Plan | ||||
Vesting period | 5 years | |||
Stock Options | Robert A. Alter | ||||
Stock options | ||||
Number of nonqualified stock options approved by the compensation committee of the Company's board of directors (in shares) | 200,000 | |||
Exercise price of options vested (in dollars per share) | $17.71 | |||
Deferred shares, share purchase rights, or share appreciation rights issued or outstanding under the LTIP | ||||
Non-vested stock grants, number of shares | ||||
Outstanding at the end of the period (in shares) | 0 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Basic management fees incurred | |||
Continuing operations - property general and administrative expense, and corporate overhead expense | $31,485,000 | $25,218,000 | $22,807,000 |
Discontinued operations | 65,000 | 2,061,000 | |
Total basic management fees | 31,485,000 | 25,283,000 | 24,868,000 |
Incentive management fees incurred | |||
Continuing operations - property general and administrative expense | 4,034,000 | 3,025,000 | 2,738,000 |
Discontinued operations | 587,000 | ||
Total incentive management fees | 4,034,000 | 3,025,000 | 3,325,000 |
License and Franchise Agreements | |||
Continuing operations - franchise costs | 38,271,000 | 32,932,000 | 30,067,000 |
Discontinued operations | 73,000 | 2,996,000 | |
License and franchise costs incurred | 38,271,000 | 33,005,000 | 33,063,000 |
Royalty expense | 11,600,000 | 10,800,000 | 10,600,000 |
Minimum | |||
Management Agreements | |||
Basic management fees (as a percent) | 2.00% | ||
Maximum | |||
Management Agreements | |||
Basic management fees (as a percent) | 3.50% | ||
Renovation and Construction Commitments | |||
Renovation and Construction Commitments | |||
Remaining construction commitments | $56,500,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | item | |
Capital Leases | |||
Capital lease obligation, noncurrent | $15,576,000 | $15,586,000 | |
Capital lease obligation, current | 7,000 | ||
Assets under capital lease | |||
Capital Leased Assets, Gross | 58,903,000 | 58,903,000 | |
Accumulated depreciation | -3,841,000 | -2,356,000 | |
Capital lease assets, net | 55,062,000 | 56,547,000 | |
Future minimum lease payments under capital leases | |||
2015 | 1,409,000 | ||
2016 | 1,403,000 | ||
2017 | 1,403,000 | ||
2018 | 1,403,000 | ||
2019 | 1,403,000 | ||
Thereafter | 109,414,000 | ||
Total minimum lease payments | 116,435,000 | ||
Less: Amount representing interest | -100,852,000 | ||
Present value of net minimum lease payments | 15,583,000 | ||
Ground and Operating Leases | |||
Number of Real Estate Properties | 30 | ||
Number of hotels with ground, building and/or air leases | 9 | 10 | 10 |
Number of ground leases | 8 | 9 | 9 |
Number of building leases | 1 | 1 | 1 |
Number of air leases | 3 | 3 | 3 |
Total number of ground, building and air leases | 12 | 13 | 13 |
Annual rent payment required under one of the air leases | 1 | 1 | 1 |
Minimum rent, including straightline adjustments | 14,999,000 | 15,228,000 | 14,950,000 |
Percentage rent | 2,718,000 | 2,131,000 | 2,000,000 |
Total rent expense | 17,717,000 | 17,359,000 | 16,950,000 |
Lease expense on corporate facility | 400,000 | 400,000 | 400,000 |
Future minimum payments under the terms of ground and air operating leases, and the lease on the corporate facility | |||
2015 | 8,438,000 | ||
2016 | 8,499,000 | ||
2017 | 11,523,000 | ||
2018 | 11,450,000 | ||
2019 | 11,236,000 | ||
Thereafter | 335,009,000 | ||
Total | 386,155,000 | ||
Furniture, fixtures and equipment | |||
Assets under capital lease | |||
Capital Leased Assets, Gross | 104,000 | 104,000 | |
Hyatt Chicago Magnificent Mile | |||
Capital Leases | |||
Capital lease contingent rent criteria (as a percent) | 4.00% | 4.00% | 4.00% |
Percentage rent paid | 0 | 0 | 3,000 |
Hyatt Chicago Magnificent Mile | Buildings and improvements | |||
Assets under capital lease | |||
Capital Leased Assets, Gross | 58,799,000 | 58,799,000 | |
Acquisitions 2014 | Fairmont Newport Beach Land Member | |||
Ground and Operating Leases | |||
Minimum rent, including straightline adjustments | ($600,000) |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
401(k) Savings and Retirement Plan | |||
Age required for participating in 401(k) plan | 21 years | ||
Service period required for participating in 401(k) plan | 6 months | ||
Concentration of Risk | |||
Number of hotels which are held for investment | 30 | ||
Other | |||
Term of unsecured environmental indemnities | 0 years | ||
Damage limitation of unsecured environmental indemnities | $0 | ||
Property general and administrative | |||
401(k) Savings and Retirement Plan | |||
Contributions to retirement plans | 1,500,000 | 1,100,000 | 900,000 |
Discontinued Operations [Member] | |||
401(k) Savings and Retirement Plan | |||
Contributions to retirement plans | 0 | 3,000 | 100,000 |
Safe harbor elective contribution | |||
401(k) Savings and Retirement Plan | |||
Percentage of eligible employee annual base earnings contributed by the company (as a percent) | 3.00% | 3.00% | 3.00% |
Contributions to retirement plans | 300,000 | 200,000 | 200,000 |
California | |||
Concentration of Risk | |||
Number of hotels which are held for investment | 9 | ||
New York | |||
Concentration of Risk | |||
Number of hotels which are held for investment | 3 | ||
Illinois | |||
Concentration of Risk | |||
Number of hotels which are held for investment | 3 | ||
Massachusetts | |||
Concentration of Risk | |||
Number of hotels which are held for investment | 3 | ||
Greater Washington DC Area | |||
Concentration of Risk | |||
Number of hotels which are held for investment | 3 | ||
Number of rooms | California | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 31.00% | ||
Number of rooms | New York | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 9.00% | ||
Number of rooms | Illinois | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 8.00% | ||
Number of rooms | Massachusetts | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 14.00% | ||
Number of rooms | Greater Washington DC Area | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 13.00% | ||
Revenue generated by hotels | California | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 33.00% | ||
Revenue generated by hotels | New York | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 13.00% | ||
Revenue generated by hotels | Illinois | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 7.00% | ||
Revenue generated by hotels | Massachusetts | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 14.00% | ||
Revenue generated by hotels | Greater Washington DC Area | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 12.00% | ||
Collective Bargaining Agreements | |||
Concentration of Risk | |||
Concentration risk (as a percent) | 29.20% | ||
Workers' compensation insurance programs | |||
Other | |||
Outstanding irrevocable letters of credit | 700,000 | ||
Draws on letters of credit | 0 | ||
Employment Agreements | |||
Employment Agreements | |||
2015 | 6,319,000 | ||
2016 | 706,000 | ||
Total | $7,025,000 |
Quarterly_Operating_Results_Un2
Quarterly Operating Results (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Operating Results (Unaudited) | |||||||||||
Revenues from Continuing Operations | $289,880 | $307,783 | $300,852 | $243,483 | $243,895 | $250,370 | $234,638 | $194,921 | $1,141,998 | $923,824 | $829,084 |
Operating income from Continuing Operations | 35,730 | 50,832 | 55,886 | 14,295 | 24,640 | 34,368 | 36,622 | 3,568 | 156,743 | 99,198 | 79,010 |
Net income (loss) | $14,257 | $33,643 | $43,535 | ($3,496) | $5,249 | $15,817 | $20,009 | $28,926 | $87,939 | $70,001 | $49,557 |
Income available (loss attributable) to common stockholders per share - basic and diluted (in dollars per share) | $0.05 | $0.14 | $0.22 | ($0.04) | $0.01 | $0.07 | $0.09 | $0.12 | $0.37 | $0.29 | $0.14 |
SCHEDULE_IIIREAL_ESTATE_AND_AC1
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 1,429,292,000 |
Initial costs | |
Land | 522,197,000 |
Bldg. and Impr | 2,773,177,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | 47,814,000 |
Bldg. and Impr | 464,419,000 |
Gross Amount at year end | |
Land | 570,011,000 |
Bldg. and Impr | 3,237,596,000 |
Totals | 3,807,607,000 |
Accum. Depr. | 625,020,000 |
Aggregate cost of properties for federal income tax purposes | 3,700,000,000 |
Investments in other Real Estate | |
Initial costs | |
Land | 4,500,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | -4,312,000 |
Gross Amount at year end | |
Land | 188,000 |
Totals | 188,000 |
Boston Park Plaza | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Boston Park Plaza | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Boston Park Plaza | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 116,281,000 |
Initial costs | |
Land | 58,527,000 |
Bldg. and Impr | 170,589,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 13,105,000 |
Gross Amount at year end | |
Land | 58,527,000 |
Bldg. and Impr | 183,694,000 |
Totals | 242,221,000 |
Accum. Depr. | 10,042,000 |
Courtyard by Marriott Los Angeles | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Courtyard by Marriott Los Angeles | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Courtyard by Marriott Los Angeles | Hotel properties | |
Initial costs | |
Bldg. and Impr | 8,446,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 12,870,000 |
Gross Amount at year end | |
Bldg. and Impr | 21,316,000 |
Totals | 21,316,000 |
Accum. Depr. | 9,248,000 |
Doubletree Guest Suites Times Square | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Doubletree Guest Suites Times Square | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Doubletree Guest Suites Times Square | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 177,216,000 |
Initial costs | |
Land | 27,351,000 |
Bldg. and Impr | 201,660,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 11,718,000 |
Gross Amount at year end | |
Land | 27,351,000 |
Bldg. and Impr | 213,378,000 |
Totals | 240,729,000 |
Accum. Depr. | 19,788,000 |
Embassy Suites Chicago | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Embassy Suites Chicago | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Embassy Suites Chicago | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 69,370,000 |
Initial costs | |
Land | 79,000 |
Bldg. and Impr | 46,886,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | 6,348,000 |
Bldg. and Impr | 20,703,000 |
Gross Amount at year end | |
Land | 6,427,000 |
Bldg. and Impr | 67,589,000 |
Totals | 74,016,000 |
Accum. Depr. | 24,078,000 |
Embassy Suites La Jolla | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Embassy Suites La Jolla | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Embassy Suites La Jolla | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 65,000,000 |
Initial costs | |
Land | 27,900,000 |
Bldg. and Impr | 70,450,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 8,959,000 |
Gross Amount at year end | |
Land | 27,900,000 |
Bldg. and Impr | 79,409,000 |
Totals | 107,309,000 |
Accum. Depr. | 23,182,000 |
Fairmont Newport Beach | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Fairmont Newport Beach | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Fairmont Newport Beach | Hotel properties | |
Initial costs | |
Bldg. and Impr | 65,769,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | 11,000,000 |
Bldg. and Impr | 33,848,000 |
Gross Amount at year end | |
Land | 11,000,000 |
Bldg. and Impr | 99,617,000 |
Totals | 110,617,000 |
Accum. Depr. | 30,703,000 |
Hilton New Orleans St. Charles | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton New Orleans St. Charles | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hilton New Orleans St. Charles | Hotel properties | |
Initial costs | |
Land | 3,698,000 |
Bldg. and Impr | 53,578,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 1,124,000 |
Gross Amount at year end | |
Land | 3,698,000 |
Bldg. and Impr | 54,702,000 |
Totals | 58,400,000 |
Accum. Depr. | 1,946,000 |
Hilton North Houston | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton North Houston | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hilton North Houston | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 31,253,000 |
Initial costs | |
Land | 6,184,000 |
Bldg. and Impr | 35,628,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 23,512,000 |
Gross Amount at year end | |
Land | 6,184,000 |
Bldg. and Impr | 59,140,000 |
Totals | 65,324,000 |
Accum. Depr. | 20,125,000 |
Hilton San Diego Bayfront | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton San Diego Bayfront | Maximum | |
Gross Amount at year end | |
Depr. Life | 57 years |
Hilton San Diego Bayfront | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 228,296,000 |
Initial costs | |
Bldg. and Impr | 424,992,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 8,912,000 |
Gross Amount at year end | |
Bldg. and Impr | 433,904,000 |
Totals | 433,904,000 |
Accum. Depr. | 29,463,000 |
Hilton Times Square | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton Times Square | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hilton Times Square | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 86,606,000 |
Initial costs | |
Bldg. and Impr | 221,488,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 24,768,000 |
Gross Amount at year end | |
Bldg. and Impr | 246,256,000 |
Totals | 246,256,000 |
Accum. Depr. | 72,049,000 |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Maximum | |
Gross Amount at year end | |
Depr. Life | 50 years |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Hotel properties | |
Initial costs | |
Land | 14,040,000 |
Bldg. and Impr | 66,350,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 7,086,000 |
Gross Amount at year end | |
Land | 14,040,000 |
Bldg. and Impr | 73,436,000 |
Totals | 87,476,000 |
Accum. Depr. | 3,609,000 |
Hyatt Chicago Magnificent Mile | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hyatt Chicago Magnificent Mile | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Hyatt Chicago Magnificent Mile | Hotel properties | |
Initial costs | |
Bldg. and Impr | 91,964,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 16,512,000 |
Gross Amount at year end | |
Bldg. and Impr | 108,476,000 |
Totals | 108,476,000 |
Accum. Depr. | 9,436,000 |
Hyatt Regency Newport Beach | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hyatt Regency Newport Beach | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hyatt Regency Newport Beach | Hotel properties | |
Initial costs | |
Bldg. and Impr | 30,549,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 25,801,000 |
Gross Amount at year end | |
Bldg. and Impr | 56,350,000 |
Totals | 56,350,000 |
Accum. Depr. | 17,690,000 |
Hyatt Regency San Francisco | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hyatt Regency San Francisco | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hyatt Regency San Francisco | Hotel properties | |
Initial costs | |
Land | 116,140,000 |
Bldg. and Impr | 131,430,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 8,027,000 |
Gross Amount at year end | |
Land | 116,140,000 |
Bldg. and Impr | 139,457,000 |
Totals | 255,597,000 |
Accum. Depr. | 7,387,000 |
JW Marriott New Orleans | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
JW Marriott New Orleans | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
JW Marriott New Orleans | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 90,000,000 |
Initial costs | |
Bldg. and Impr | 73,420,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 4,324,000 |
Gross Amount at year end | |
Bldg. and Impr | 77,744,000 |
Totals | 77,744,000 |
Accum. Depr. | 8,643,000 |
Marriott Boston Long Wharf | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Boston Long Wharf | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Boston Long Wharf | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 176,000,000 |
Initial costs | |
Land | 51,598,000 |
Bldg. and Impr | 170,238,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 37,002,000 |
Gross Amount at year end | |
Land | 51,598,000 |
Bldg. and Impr | 207,240,000 |
Totals | 258,838,000 |
Accum. Depr. | 53,672,000 |
Marriott Houston | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Houston | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Houston | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 20,943,000 |
Initial costs | |
Land | 4,167,000 |
Bldg. and Impr | 19,155,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 13,921,000 |
Gross Amount at year end | |
Land | 4,167,000 |
Bldg. and Impr | 33,076,000 |
Totals | 37,243,000 |
Accum. Depr. | 11,141,000 |
Marriott Park City | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Park City | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Park City | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 13,652,000 |
Initial costs | |
Land | 2,260,000 |
Bldg. and Impr | 17,778,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 12,749,000 |
Gross Amount at year end | |
Land | 2,260,000 |
Bldg. and Impr | 30,527,000 |
Totals | 32,787,000 |
Accum. Depr. | 12,116,000 |
Marriott Philadelphia | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Philadelphia | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Philadelphia | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 24,737,000 |
Initial costs | |
Land | 3,297,000 |
Bldg. and Impr | 29,710,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 9,629,000 |
Gross Amount at year end | |
Land | 3,297,000 |
Bldg. and Impr | 39,339,000 |
Totals | 42,636,000 |
Accum. Depr. | 14,597,000 |
Marriott Portland | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Portland | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Portland | Hotel properties | |
Initial costs | |
Land | 5,341,000 |
Bldg. and Impr | 20,705,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 6,863,000 |
Gross Amount at year end | |
Land | 5,341,000 |
Bldg. and Impr | 27,568,000 |
Totals | 32,909,000 |
Accum. Depr. | 11,598,000 |
Marriott Quincy | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Quincy | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Quincy | Hotel properties | |
Initial costs | |
Land | 14,375,000 |
Bldg. and Impr | 97,875,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 4,651,000 |
Gross Amount at year end | |
Land | 14,375,000 |
Bldg. and Impr | 102,526,000 |
Totals | 116,901,000 |
Accum. Depr. | 27,284,000 |
Marriott Tysons Corner | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Tysons Corner | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Tysons Corner | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 40,866,000 |
Initial costs | |
Land | 3,897,000 |
Bldg. and Impr | 43,528,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | -250,000 |
Bldg. and Impr | 16,191,000 |
Gross Amount at year end | |
Land | 3,647,000 |
Bldg. and Impr | 59,719,000 |
Totals | 63,366,000 |
Accum. Depr. | 22,222,000 |
Marriott Wailea | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Wailea | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Marriott Wailea | Hotel properties | |
Initial costs | |
Land | 119,707,000 |
Bldg. and Impr | 194,137,000 |
Gross Amount at year end | |
Land | 119,707,000 |
Bldg. and Impr | 194,137,000 |
Totals | 313,844,000 |
Accum. Depr. | 2,782,000 |
Renaissance Harborplace | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Harborplace | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Harborplace | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 88,901,000 |
Initial costs | |
Land | 25,085,000 |
Bldg. and Impr | 102,707,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 21,889,000 |
Gross Amount at year end | |
Land | 25,085,000 |
Bldg. and Impr | 124,596,000 |
Totals | 149,681,000 |
Accum. Depr. | 38,504,000 |
Renaissance Los Angeles Airport | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Los Angeles Airport | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Los Angeles Airport | Hotel properties | |
Initial costs | |
Land | 7,800,000 |
Bldg. and Impr | 52,506,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 4,435,000 |
Gross Amount at year end | |
Land | 7,800,000 |
Bldg. and Impr | 56,941,000 |
Totals | 64,741,000 |
Accum. Depr. | 15,595,000 |
Renaissance Long Beach | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Long Beach | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Long Beach | Hotel properties | |
Initial costs | |
Land | 10,437,000 |
Bldg. and Impr | 37,300,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 18,526,000 |
Gross Amount at year end | |
Land | 10,437,000 |
Bldg. and Impr | 55,826,000 |
Totals | 66,263,000 |
Accum. Depr. | 15,758,000 |
Renaissance Orlando at SeaWorld | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Orlando at SeaWorld | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Orlando at SeaWorld | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 75,923,000 |
Initial costs | |
Bldg. and Impr | 119,733,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | 30,716,000 |
Bldg. and Impr | 34,704,000 |
Gross Amount at year end | |
Land | 30,716,000 |
Bldg. and Impr | 154,437,000 |
Totals | 185,153,000 |
Accum. Depr. | 46,812,000 |
Renaissance Washington DC | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Washington DC | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Washington DC | Hotel properties | |
REAL ESTATE AND ACCUMULATED DEPRECIATION | |
Encmbr | 124,248,000 |
Initial costs | |
Land | 14,563,000 |
Bldg. and Impr | 132,800,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 37,178,000 |
Gross Amount at year end | |
Land | 14,563,000 |
Bldg. and Impr | 169,978,000 |
Totals | 184,541,000 |
Accum. Depr. | 50,797,000 |
Renaissance Westchester | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Westchester | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Westchester | Hotel properties | |
Initial costs | |
Land | 5,751,000 |
Bldg. and Impr | 17,069,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 17,811,000 |
Gross Amount at year end | |
Land | 5,751,000 |
Bldg. and Impr | 34,880,000 |
Totals | 40,631,000 |
Accum. Depr. | 5,045,000 |
Sheraton Cerritos | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Sheraton Cerritos | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Sheraton Cerritos | Hotel properties | |
Initial costs | |
Bldg. and Impr | 24,737,000 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 7,601,000 |
Gross Amount at year end | |
Bldg. and Impr | 32,338,000 |
Totals | 32,338,000 |
Accum. Depr. | 9,708,000 |
Land | Investments in other Real Estate | |
Initial costs | |
Land | 4,500,000 |
Cost Capitalized Subsequent to Acquisition | |
Land | -4,312,000 |
Gross Amount at year end | |
Land | 188,000 |
Totals | 188,000 |
Senior unsecured revolving credit facility | |
Gross Amount at year end | |
Outstanding indebtedness under credit facility | 0 |
SCHEDULE_IIIREAL_ESTATE_AND_AC2
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Hotel properties | |||
Reconciliation of land and buildings and improvements | |||
Balance at the beginning of the period | $3,416,762 | $2,801,963 | $2,904,975 |
Acquisitions | 324,844 | 533,962 | 172,354 |
Improvements | 66,001 | 80,923 | 46,831 |
Changes in reporting presentation | -163,455 | ||
Disposals during the period | -86 | -158,742 | |
Balance at the end of the period | 3,807,607 | 3,416,762 | 2,801,963 |
Reconciliation of accumulated depreciation | |||
Balance at the beginning of the period | 524,014 | 439,446 | 457,431 |
Depreciation for the period | 101,006 | 84,568 | 82,871 |
Changes in reporting presentation | -58,364 | ||
Retirement | -42,492 | ||
Balance at the end of the period | 625,020 | 524,014 | 439,446 |
Investments in Other Real Estate | |||
Reconciliation of land and buildings and improvements | |||
Balance at the beginning of the period | 12,437 | ||
Improvements | 50 | ||
Changes in reporting presentation | -9,793 | ||
Disposals during the period | -2,506 | ||
Balance at the end of the period | 188 | 188 | 188 |
Reconciliation of accumulated depreciation | |||
Balance at the beginning of the period | 2,865 | ||
Depreciation for the period | 301 | ||
Changes in reporting presentation | -2,740 | ||
Retirement | ($426) |