Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 08, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DiamondRock Hospitality Co | |
Entity Central Index Key | 1,298,946 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 200,305,232 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Property and equipment, net | $ 2,739,193 | $ 2,646,676 |
Restricted cash | 41,481 | 46,069 |
Due from hotel managers | 99,150 | 77,928 |
Favorable lease assets, net | 26,902 | 18,013 |
Prepaid and other assets | 40,640 | 37,682 |
Cash and cash equivalents | 149,645 | 243,095 |
Total assets | 3,097,011 | 3,069,463 |
Liabilities: | ||
Mortgage debt, net of unamortized debt issuance costs | 645,798 | 821,167 |
Term loans, net of unamortized debt issuance costs | 297,922 | 99,372 |
Total debt | 943,720 | 920,539 |
Deferred income related to key money, net | 19,025 | 20,067 |
Unfavorable contract liabilities, net | 71,690 | 72,646 |
Deferred ground rent | 83,576 | 80,509 |
Due to hotel managers | 63,774 | 58,294 |
Dividends declared and unpaid | 25,548 | 25,567 |
Accounts payable and accrued expenses | 54,936 | 55,054 |
Total liabilities | 1,262,269 | 1,232,676 |
Stockholders’ Equity: | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 400,000,000 shares authorized; 200,305,232 and 200,200,902 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 2,003 | 2,002 |
Additional paid-in capital | 2,058,380 | 2,055,365 |
Accumulated deficit | (225,641) | (220,580) |
Total stockholders’ equity | 1,834,742 | 1,836,787 |
Total liabilities and stockholders’ equity | $ 3,097,011 | $ 3,069,463 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 200,305,232 | 200,200,902 |
Common stock, shares outstanding | 200,305,232 | 200,200,902 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Rooms | $ 177,483 | $ 186,113 | $ 315,315 | $ 335,556 |
Food and beverage | 52,762 | 57,407 | 97,540 | 107,781 |
Other | 13,027 | 13,144 | 26,627 | 26,361 |
Total revenues | 243,272 | 256,664 | 439,482 | 469,698 |
Operating Expenses: | ||||
Rooms | 41,565 | 43,257 | 78,466 | 81,971 |
Food and beverage | 33,064 | 35,265 | 62,530 | 68,615 |
Management fees | 6,949 | 8,772 | 12,961 | 15,381 |
Other hotel expenses | 78,608 | 79,524 | 150,267 | 158,453 |
Depreciation and amortization | 25,585 | 25,005 | 49,948 | 50,126 |
Hotel acquisition costs | 22 | 0 | 2,273 | 0 |
Corporate expenses | 6,828 | 6,736 | 13,090 | 12,736 |
Total operating expenses, net | 192,621 | 198,559 | 369,535 | 387,282 |
Operating profit | 50,651 | 58,105 | 69,947 | 82,416 |
Interest and other income, net | (192) | (68) | (551) | (118) |
Interest expense | 9,585 | 11,074 | 19,098 | 22,738 |
Loss on early extinguishment of debt | 274 | 0 | 274 | 0 |
Gain on sale of hotel properties | 0 | 8,121 | 0 | 8,121 |
Total other expenses, net | 9,667 | 2,885 | 18,821 | 14,499 |
Income before income taxes | 40,984 | 55,220 | 51,126 | 67,917 |
Income tax expense | (4,389) | (11,045) | (5,644) | (6,964) |
Net income | $ 36,595 | $ 44,175 | $ 45,482 | $ 60,953 |
Earnings per share: | ||||
Basic earnings per share (in dollars per share) | $ 0.18 | $ 0.22 | $ 0.23 | $ 0.30 |
Diluted earnings per share (in dollars per share) | $ 0.18 | $ 0.22 | $ 0.23 | $ 0.30 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 45,482 | $ 60,953 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 49,948 | 50,126 |
Corporate asset depreciation as corporate expenses | 32 | 34 |
Gain on sale of hotel properties | 0 | (8,121) |
Loss on early extinguishment of debt | 274 | 0 |
Non-cash ground rent | 3,164 | 2,662 |
Amortization of debt issuance costs | 1,028 | 1,215 |
Amortization of favorable and unfavorable contracts, net | (956) | (956) |
Amortization of deferred income related to key money | (1,042) | (1,434) |
Stock-based compensation | 3,340 | 3,363 |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | (3,261) | (5,983) |
Restricted cash | 3,986 | 3,664 |
Due to/from hotel managers | (20,258) | (12,637) |
Accounts payable and accrued expenses | 5,623 | 1,720 |
Net cash provided by operating activities | 87,360 | 94,606 |
Cash flows from investing activities: | ||
Hotel capital expenditures | (60,403) | (54,096) |
Hotel acquisitions | (93,795) | 0 |
Net proceeds from sale of hotel properties | 0 | 118,309 |
Change in restricted cash | 2,094 | 3,529 |
Net cash (used in) provided by investing activities | (152,104) | 67,742 |
Cash flows from financing activities: | ||
Scheduled mortgage debt principal payments | (5,870) | (5,678) |
Repayments of mortgage debt | (170,368) | (249,793) |
Proceeds from senior unsecured term loan | 200,000 | 100,000 |
Draws on senior unsecured credit facility | 0 | 75,000 |
Repayments of senior unsecured credit facility | 0 | (75,000) |
Payment of financing costs | (1,579) | (2,740) |
Payment of cash dividends | (50,360) | (50,488) |
Repurchase of common stock | (529) | (685) |
Net cash used in financing activities | (28,706) | (209,384) |
Net decrease in cash and cash equivalents | (93,450) | (47,036) |
Cash and cash equivalents, beginning of period | 243,095 | 213,584 |
Cash and cash equivalents, end of period | 149,645 | 166,548 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 18,015 | 22,407 |
Cash paid for income taxes | 1,770 | 1,203 |
Non-cash Investing and Financing Activities: | ||
Unpaid dividends | $ 25,548 | $ 25,583 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization DiamondRock Hospitality Company (the “Company” or “we”) is a lodging-focused real estate company that owns a portfolio of premium hotels and resorts. Our hotels are concentrated in key gateway cities and in destination resort locations and the majority of our hotels are operated under a brand owned by one of the leading global lodging brand companies (Marriott International, Inc. or Hilton Worldwide). We are an owner, as opposed to an operator, of the hotels in our portfolio. As an owner, we receive all of the operating profits or losses generated by our hotels after we pay fees to the hotel managers, which are based on the revenues and profitability of the hotels. As of June 30, 2017 , we owned 28 hotels with 9,630 guest rooms, located in the following markets: Atlanta, Georgia; Boston, Massachusetts ( 2 ); Burlington, Vermont; Charleston, South Carolina; Chicago, Illinois ( 2 ); Denver, Colorado ( 2 ); Fort Lauderdale, Florida; Fort Worth, Texas; Huntington Beach, California; Key West, Florida ( 2 ); New York, New York ( 4 ); Salt Lake City, Utah; San Diego, California; San Francisco, California; Sedona, Arizona ( 2 ); Sonoma, California; Washington D.C. ( 2 ); St. Thomas, U.S. Virgin Islands; and Vail, Colorado. We conduct our business through a traditional umbrella partnership real estate investment trust, or UPREIT, in which our hotel properties are owned by our operating partnership, DiamondRock Hospitality Limited Partnership, or subsidiaries of our operating partnership. The Company is the sole general partner of our operating partnership and currently owns, either directly or indirectly, all of the limited partnership units of our operating partnership. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016 , included in our Annual Report on Form 10-K filed on February 27, 2017 . In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of June 30, 2017 , and the results of our operations for the three and six months ended June 30, 2017 and 2016 , and cash flows for the six months ended June 30, 2017 and 2016 . Interim results are not necessarily indicative of full-year performance because of the impact of seasonal and short-term variations. Our financial statements include all of the accounts of the Company and its subsidiaries in accordance with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation. If the Company determines that it has an interest in a variable interest entity within the meaning of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation , the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. Our operating partnership meets the criteria of a variable interest entity. The Company is the primary beneficiary and, accordingly, we consolidate our operating partnership. Property and Equipment Investments in hotel properties, land, land improvements, building and furniture, fixtures and equipment and identifiable intangible assets are recorded at fair value upon acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is included in the statements of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 15 to 40 years for buildings, land improvements, and building improvements and 1 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel, less costs to sell, exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel’s estimated fair market value is recorded and an impairment loss is recognized. We will classify a hotel as held for sale in the period that we have made the decision to dispose of the hotel, a binding agreement to purchase the property has been signed under which the buyer has committed a significant amount of nonrefundable cash and no significant financing or other contingencies exist which could cause the transaction to not be completed in a timely manner. If these criteria are met, we will record an impairment loss if the fair value less costs to sell is lower than the carrying amount of the hotel and related assets and will cease recording depreciation expense. We will classify the assets and related liabilities as held for sale on the balance sheet. Revenue Recognition Revenues from operations of the hotels are recognized when the goods or services are provided. Revenues consist of room sales, food and beverage sales, and other hotel department revenues, such as telephone, parking, gift shop sales and resort fees. Earnings Per Share Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period plus other potentially dilutive securities such as equity awards or shares issuable in the event of conversion of operating partnership units. No adjustment is made for shares that are anti-dilutive during a period. Stock-based Compensation We account for stock-based employee compensation using the fair value based method of accounting. We record the cost of stock-based awards based on the grant-date fair value of the award. The vesting of the awards issued to officers and employees is based on either continued employment (time-based) or based on continued employment and the relative total shareholder returns of the Company or improvement in market share of the Company's hotels (performance-based). The cost of time-based awards and performance-based awards is recognized over the period during which an employee is required to provide service in exchange for the award, adjusted for forfeitures. Income Taxes We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings during the period in which the new rate is enacted. We have elected to be treated as a real estate investment trust (“REIT”) under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), which requires that we distribute at least 90% of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state taxes on any retained income, we may be subject to taxes on “built-in gains” on sales of certain assets. Our taxable REIT subsidiaries will generally be subject to federal, state, local, and/or foreign income taxes. In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, we lease each of our hotel properties to a wholly owned subsidiary of Bloodstone TRS, Inc., our primary taxable REIT subsidiary, or TRS, except for the Frenchman’s Reef & Morning Star Marriott Beach Resort, which is owned by a Virgin Islands corporation, which we have elected to be treated as a TRS, and the L'Auberge de Sedona and Orchards Inn Sedona, which are each leased to a wholly owned subsidiary of the Company, which we have elected to be treated as a TRS. We had no accruals for tax uncertainties as of June 30, 2017 and December 31, 2016 . Fair Value Measurements In evaluating fair value, U.S. GAAP outlines a valuation framework and creates a fair value hierarchy that distinguishes between market assumptions based on market data (observable inputs) and a reporting entity’s own assumptions about market data (unobservable inputs). The hierarchy ranks the quality and reliability of inputs used to determine fair value, which are then classified and disclosed in one of the three categories. The three levels are as follows: • Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2 - Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets in markets that are not active and model-derived valuations whose inputs are observable • Level 3 - Model-derived valuations with unobservable inputs Intangible Assets and Liabilities Intangible assets and liabilities are recorded on non-market contracts assumed as part of the acquisition of certain hotels. We review the terms of agreements assumed in conjunction with the purchase of a hotel to determine if the terms are favorable or unfavorable compared to an estimated market agreement at the acquisition date. Favorable lease assets or unfavorable contract liabilities are recorded at the acquisition date and amortized using the straight-line method over the term of the agreement. We do not amortize intangible assets with indefinite useful lives, but we review these assets for impairment annually or at interim periods if events or circumstances indicate that the asset may be impaired. Use of Estimates The preparation of the financial statements in conformity with U.S. 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 from those estimates. Recently Issued Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel a will be considered asset purchases as opposed to business combinations. However, the determination will be made on a transaction-by-transaction basis and we do not expect the determination to materially change the recognition of the assets and liabilities acquired. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions. This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted. We do not anticipate that this guidance will have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted. We do not anticipate that this guidance will have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which simplifies various aspects of how share-based payments are accounted for and presented in the financial statements. This standard requires companies to record all of the tax effects related to share-based payments through the income statement, allows companies to elect an accounting policy to either estimate the share based award forfeitures (and expense) or account for forfeitures (and expense) as they occur, and allows companies to withhold up to the maximum individual statutory tax rate the shares upon settlement of an award without causing the award to be classified as a liability. This guidance is effective for annual periods beginning after December 15, 2016. We adopted ASU No. 2016-09 effective January 1, 2017 and it did not have a material impact on our financial position, results of operations or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which primarily changes the lessee's accounting for operating leases by requiring recognition of lease right-of-use assets and lease liabilities. This standard is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The primary impact of the new standard will be to the treatment of our ground leases, which represent a majority of all of our operating lease payments. We are evaluating the effect of ASU 2016-02 on our consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which affects virtually all aspects of an entity’s revenue recognition. The new standard sets forth five prescribed steps to determine the timing and amount of revenue to be recognized to appropriately 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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effectiveness of ASU No. 2014-09 to reporting periods beginning after December 15, 2017 and permitted early application for annual reporting periods beginning after December 15, 2016. While we have not completed our assessment of this standard, we do not expect it to materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel-level sales. Furthermore, we do not expect the standard to significantly impact the recognition of or accounting for real estate sales to third parties, since we primarily dispose of real estate in exchange for cash with few contingencies. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of June 30, 2017 and December 31, 2016 consists of the following (in thousands): June 30, 2017 December 31, 2016 Land $ 602,879 $ 553,769 Land improvements 7,994 7,994 Buildings and site improvements 2,438,245 2,355,871 Furniture, fixtures and equipment 468,078 428,991 Construction in progress 7,180 35,253 3,524,376 3,381,878 Less: accumulated depreciation (785,183 ) (735,202 ) $ 2,739,193 $ 2,646,676 As of June 30, 2017 and December 31, 2016 , we had accrued capital expenditures of $5.1 million and $10.8 million , respectively. |
Favorable Lease Assets
Favorable Lease Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Favorable Lease Assets | Favorable Lease Assets In connection with the acquisition of certain hotels, we have recognized intangible assets for favorable leases. Our favorable lease assets, net of accumulated amortization of $2.5 million and $2.3 million as of June 30, 2017 and December 31, 2016 , respectively, consist of the following (in thousands): June 30, 2017 December 31, 2016 Westin Boston Waterfront Hotel Ground Lease $ 17,751 $ 17,859 Orchards Inn Sedona Annex Sublease 9,013 — Lexington Hotel New York Tenant Leases 138 154 $ 26,902 $ 18,013 Favorable lease assets are recorded at the acquisition date and are generally amortized using the straight-line method over the remaining non-cancelable term of the lease agreement. We recorded $0.1 million of amortization expense for each of the three months ended June 30, 2017 and 2016 . We recorded $0.2 million of amortization expense for each of the six months ended June 30, 2017 and 2016 . In connection with our acquisition of the Orchards Inn Sedona on February 28, 2017, we recorded a $9.1 million favorable lease asset. We determined the value using a discounted cash flow of the favorable difference between the contractual lease payments and estimated market rents. The market rents were estimated by a third-party valuation firm and the discount rate was estimated using a risk adjusted rate of return. See Note 9 for further discussion of this favorable lease asset. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Capital Stock | Capital Stock Common Shares We are authorized to issue up to 400 million shares of common stock, $0.01 par value per share. Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive dividends out of assets legally available for the payment of dividends when authorized by our board of directors. We have an “at-the-market” equity offering program (the “ATM program”), pursuant to which we may issue and sell shares of our common stock from time to time, having an aggregate offering price of up to $200 million . We have not sold any shares of our common stock during 2017 and there is $128.3 million remaining under the ATM program. Our board of directors has approved a share repurchase program authorizing us to repurchase up to $150 million in shares of our common stock. Repurchases under this program are made in open market or privately negotiated transactions as permitted by federal securities laws and other legal requirements. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing, manner, price and actual number of shares repurchased depends on a variety of factors including stock price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The share repurchase program may be suspended or terminated at any time without prior notice. We have not repurchased any shares of our common stock during 2017 and we have $143.5 million of capacity remaining under our share repurchase program. Dividends We have paid the following dividends to holders of our common stock during 2017 as follows: Payment Date Record Date Dividend per Share January 12, 2017 December 30, 2016 $ 0.125 April 12, 2017 March 31, 2017 $ 0.125 July 12, 2017 June 30, 2017 $ 0.125 Preferred Shares We are authorized to issue up to 10 million shares of preferred stock, $0.01 par value per share. Our board of directors is required to set for each class or series of preferred stock the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms or conditions of redemption. As of June 30, 2017 and December 31, 2016 , there were no shares of preferred stock outstanding. Operating Partnership Units Holders of operating partnership units have certain redemption rights, which would enable them to cause our operating partnership to redeem their units in exchange for cash per unit equal to the market price of our common stock, at the time of redemption, or, at our option for shares of our common stock on a one -for-one basis. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the limited partners or our stockholders. As of June 30, 2017 and December 31, 2016 , there were no operating partnership units held by unaffiliated third parties. |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans We are authorized to issue up to 6,082,664 shares of our common stock under our 2016 Equity Incentive Plan (the "2016 Plan"), of which we have issued or committed to issue 443,453 shares as of June 30, 2017 . In addition to these shares, additional shares of common stock could be issued in connection with the performance stock unit awards as further described below. The 2016 Plan replaced the 2004 Stock Option and Incentive Plan, as amended (the "2004 Plan"). We no longer make share grants and issuances under the 2004 Plan, although awards previously made under the 2004 Plan that are outstanding will remain in effect in accordance with the terms of that plan and the applicable award agreements. Restricted Stock Awards Restricted stock awards issued to our officers and employees generally vest over a three -year period from the date of the grant based on continued employment. We measure compensation expense for the restricted stock awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying condensed consolidated statements of operations. A summary of our restricted stock awards from January 1, 2017 to June 30, 2017 is as follows: Number of Shares Weighted- Average Grant Date Fair Value Unvested balance at January 1, 2017 567,540 $ 10.62 Granted 320,866 11.20 Vested (244,411 ) 11.29 Forfeited (16,669 ) 10.80 Unvested balance at June 30, 2017 627,326 $ 10.65 The remaining share awards are expected to vest as follows: 285,936 shares during 2018 , 226,487 shares during 2019 , and 114,903 during 2020. As of June 30, 2017 , the unrecognized compensation cost related to restricted stock awards was $5.6 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 26 months. We recorded $0.8 million of compensation expense related to restricted stock awards for each of the three months ended June 30, 2017 and 2016 . We recorded $1.5 million and $1.6 million , respectively, of compensation expense related to restricted stock awards for the six months ended June 30, 2017 and 2016 . Performance Stock Units Performance stock units (“PSUs”) are restricted stock units that vest three years from the date of grant. Each executive officer is granted a target number of PSUs (the “PSU Target Award”). For the PSUs issued in 2014 and 2015 and vesting in 2017 and 2018, respectively, the actual number of shares of common stock issued to each executive officer is subject to the achievement of certain levels of total stockholder return relative to the total stockholder return of a peer group of publicly traded lodging REITs over a three -year performance period. There will be no payout of shares of our common stock if our total stockholder return falls below the 30 th percentile of the total stockholder returns of the peer group. The maximum number of shares of common stock issued to an executive officer is equal to 150% of the PSU Target Award and is earned if our total stockholder return is equal to or greater than the 75 th percentile of the total stockholder returns of the peer group. For the PSUs issued in 2016 and vesting in 2019, the calculation of total stockholder return relative to the total stockholder return of a peer group over a three -year performance period remained in effect for 75% of the number of PSUs to be earned in the performance period. The remaining 25% is determined based on achieving improvement in market share for each of our hotels over the three -year performance period. For the PSUs issued in 2017 and vesting in 2020, the calculation of total stockholder return relative to the total stockholder return of a peer group over a three -year performance period applies to 50% of the number of PSUs to be earned in the performance period. The remaining 50% is determined based on achieving improvement in market share for each of our hotels over the three -year performance period. We measure compensation expense for the PSUs based upon the fair market value of the award at the grant date. Compensation expense is recognized on a straight-line basis over the three -year performance period and is included in corporate expenses in the accompanying condensed consolidated statements of operations. The grant date fair value of the portion of the PSUs based on our relative total stockholder return is determined using a Monte Carlo simulation performed by a third-party valuation firm. The grant date fair value of the portion of the PSUs based on improvement in market share for each of our hotels is the closing price of our common stock on the grant date. On February 27, 2017, our board of directors granted 266,009 PSUs to our executive officers. The grant date fair value of the portion of the PSUs based on our relative total stockholder return was $10.89 using the assumptions of volatility of 26.7% and a risk-free rate of 1.46% . The grant date fair value of the portion of the PSUs based on hotel market share was $11.20 , the closing stock price of our common stock on such date. A summary of our PSUs from January 1, 2017 to June 30, 2017 is as follows: Number of Target Units Weighted- Average Grant Date Fair Value Unvested balance at January 1, 2017 686,684 $ 10.65 Granted 266,009 11.04 Additional units from dividends 16,312 11.09 Vested (1) (200,374 ) 12.15 Unvested balance at June 30, 2017 768,631 $ 10.40 ______________________ (1) There was no payout of shares of our common stock for PSUs that vested on February 27, 2017, as our total stockholder return fell below the 30th percentile of the total stockholder returns of the peer group over the three-year performance period. The remaining target units are expected to vest as follows: 211,463 units during 2018 , 288,112 units during 2019 and 269,056 units during 2020 . The number of shares earned upon vesting is subject to the attainment of the performance goals described above. As of June 30, 2017 , the unrecognized compensation cost related to the PSUs was $4.4 million and is expected to be recognized on a straight-line basis over a weighted average period of 26 months. We recorded $0.6 million of compensation expense related to the PSUs for each of the three months ended June 30, 2017 and 2016 . We recorded $1.2 million and $1.3 million , respectively, of compensation expense related to the PSUs for the six months ended June 30, 2017 and 2016 . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income available to common stockholders that has been adjusted for dilutive securities, by the weighted-average number of common shares outstanding including dilutive securities. The following is a reconciliation of the calculation of basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator: Net income $ 36,595 $ 44,175 $ 45,482 $ 60,953 Denominator: Weighted-average number of common shares outstanding—basic 200,810,323 201,273,767 200,732,639 201,133,321 Effect of dilutive securities: Unvested restricted common stock 99,677 — 165,483 81,513 Shares related to unvested PSUs 831,394 553,617 831,394 553,617 Weighted-average number of common shares outstanding—diluted 201,741,394 201,827,384 201,729,516 201,768,451 Earnings per share: Basic earnings per share $ 0.18 $ 0.22 $ 0.23 $ 0.30 Diluted earnings per share $ 0.18 $ 0.22 $ 0.23 $ 0.30 We did not include unexercised stock appreciation rights of 20,770 for the three and six months ended June 30, 2017 and 2016 as they would be anti-dilutive. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table sets forth information regarding the Company’s debt as of June 30, 2017 (dollars in thousands): Property Principal Balance Interest Rate Maturity Date Salt Lake City Marriott Downtown $ 57,523 4.25% November 2020 Westin Washington D.C. City Center 65,847 3.99% January 2023 The Lodge at Sonoma, a Renaissance Resort & Spa 28,585 3.96% April 2023 Westin San Diego 65,571 3.94% April 2023 Courtyard Manhattan / Midtown East 84,761 4.40% August 2024 Renaissance Worthington 84,878 3.66% May 2025 JW Marriott Denver at Cherry Creek 64,051 4.33% July 2025 Boston Westin 199,765 4.36% November 2025 Unamortized debt issuance costs (5,183 ) Total mortgage debt, net of unamortized debt issuance costs 645,798 Unsecured term loan 100,000 LIBOR + 1.45% (1) May 2021 Unsecured term loan 200,000 LIBOR + 1.45% (2) April 2022 Unamortized debt issuance costs (2,078 ) Unsecured term loan, net of unamortized debt issuance costs 297,922 Senior unsecured credit facility — LIBOR + 1.50% May 2020 (3) Total debt, net of unamortized debt issuance costs $ 943,720 Weighted-Average Interest Rate 3.69% _______________________ (1) The interest rate as of June 30, 2017 was 2.51% . (2) The interest rate as of June 30, 2017 was 2.50% . (3) The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. Mortgage Debt We have incurred limited recourse, property specific mortgage debt secured by certain of our hotels. In the event of default, the lender may only foreclose on the secured assets; however, in the event of fraud, misapplication of funds or other customary recourse provisions, the lender may seek payment from us. As of June 30, 2017 , eight of our 28 hotels were secured by mortgage debt. Our mortgage debt contains certain property specific covenants and restrictions, including minimum debt service coverage ratios that trigger “cash trap” provisions as well as restrictions on incurring additional debt without lender consent. As of June 30, 2017 , we were in compliance with the financial covenants of our mortgage debt. On April 26, 2017, we repaid the mortgage loan secured by the Lexington Hotel New York with proceeds from a new unsecured term loan, which is discussed further below. The mortgage loan had an outstanding principal balance of $170.4 million at repayment. Senior Unsecured Credit Facility We are party to a senior unsecured credit facility with a capacity up to $300 million . The maturity date is May 2020 and may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. The facility also includes an accordion feature to expand up to $600 million , subject to lender consent. The interest rate on the facility is based upon LIBOR, plus an applicable margin based upon the Company’s leverage ratio, as follows: Leverage Ratio Applicable Margin Less than or equal to 35% 1.50 % Greater than 35% but less than or equal to 45% 1.65 % Greater than 45% but less than or equal to 50% 1.80 % Greater than 50% but less than or equal to 55% 2.00 % Greater than 55% 2.25 % In addition to the interest payable on amounts outstanding under the facility, we were required to pay an amount equal to 0.20% of the unused portion of the facility if the average usage of the facility was greater than 50% or 0.30% of the unused portion of the facility if the average usage of the facility was less than or equal to 50% . The facility also contains various corporate financial covenants. A summary of the most restrictive covenants is as follows: Actual at Covenant June 30, 2017 Maximum leverage ratio (1) 60% 25.0% Minimum fixed charge coverage ratio (2) 1.50x 4.62x Minimum tangible net worth (3) $1.91 billion $2.59 billion Secured recourse indebtedness Less than 45% of Total Asset Value 21.1% _____________________________ (1) Leverage ratio is net indebtedness, as defined in the credit agreement, divided by total asset value, defined in the credit agreement as the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate. (2) Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the credit agreement as EBITDA less FF&E reserves, for the most recently ending 12 months, to fixed charges, which is defined in the credit agreement as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same most recently ending 12-month period. (3) Tangible net worth, as defined in the credit agreement, is (i) total gross book value of all assets, exclusive of depreciation and amortization, less intangible assets, total indebtedness, and all other liabilities, plus (ii) 75% of net proceeds from future equity issuances. As of June 30, 2017 , we had no borrowings outstanding under the facility and the Company's leverage ratio was 25.0% . Accordingly, interest on our borrowings under the facility, if any, will be based on LIBOR plus 150 basis points for the following quarter. We incurred interest and unused credit facility fees on the facility of $0.2 million and $0.4 million for the three months ended June 30, 2017 and 2016 , respectively. We incurred interest and unused credit facility fees on the facility of $0.5 million and $0.8 million for the six months ended June 30, 2017 and 2016, respectively. Unsecured Term Loans We are party to a five -year $100 million unsecured term loan. On April 26, 2017, we closed on a new five -year $200 million unsecured term loan. A portion of the proceeds from the new term loan was used to repay the $170.4 million mortgage loan secured by the Lexington Hotel New York. The financial covenants of the term loans are consistent with the covenants on our senior unsecured credit facility, which are described above. The interest rate on each of the term loans is based on a pricing grid ranging from 145 to 220 basis points over LIBOR, as follows: Leverage Ratio Applicable Margin Less than or equal to 35% 1.45 % Greater than 35% but less than or equal to 45% 1.60 % Greater than 45% but less than or equal to 50% 1.75 % Greater than 50% but less than or equal to 55% 1.95 % Greater than 55% 2.20 % As of June 30, 2017, the Company's leverage ratio was 25.0% . Accordingly, interest on our borrowings under the term loans will be based on LIBOR plus 145 basis points for the following quarter. We incurred interest on the term loans of $1.5 million and $0.3 million for the three months ended June 30, 2017 and 2016 , respectively. We incurred interest on the term loans of $2.1 million and $0.3 million or the six months ended June 30, 2017 and 2016 , respectively. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On February 28, 2017, we acquired the 88 -room L'Auberge de Sedona and the 70 -room Orchards Inn Sedona, each located in Sedona, Arizona, for a total contractual purchase price of $ 97 million . The acquisition was funded with corporate cash. The hotels are managed by IMH Financial Corporation pursuant to a new management agreement with an initial term of five years, which is terminable at our discretion beginning December 31, 2017 . The management agreement provides for a base management fee of 2.45% of gross revenues in 2017, 2.70% of gross revenues in 2018, and 3.0% of gross revenues in 2019 and through the end of the term. The management agreement also provides for an incentive management fee of 12% of hotel operating profit above an owner's priority determined in accordance with the terms of the management agreement in 2017, increasing to 15% by 2020. We lease the buildings and sublease the underlying land containing 28 of the 70 rooms at the Orchards Inn Sedona, which expires in 2070, including all extension options. We reviewed the terms of the annex sublease in conjunction with the hotel acquisition accounting and concluded that the terms are favorable to us compared with a typical current market lease. As a result, we recorded a $9.1 million favorable lease asset that will be amortized through 2070. We believe all material adjustments necessary to reflect the effects of the acquisitions have been made; however, the amounts recorded are based on a preliminary estimate of the fair value of the assets acquired and the liabilities assumed. We will finalize the recorded amounts upon the completion of our valuation analysis of the assets acquired and liabilities assumed, not to exceed one year from the date of acquisition. The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed in our acquisitions (in thousands): L'Auberge de Sedona Orchards Inn Sedona Land $ 39,384 $ 9,726 Building and improvements 22,204 10,180 Furnitures, fixtures and equipment 4,376 1,982 Total fixed assets 65,964 21,888 Favorable lease asset — 9,065 Other assets and liabilities, net (2,710 ) (412 ) Total $ 63,254 $ 30,541 Acquired properties are included in our results of operations from the date of acquisition. The following unaudited pro forma financial information presents our results of operations (in thousands, except per share data) as if the hotels were acquired on January 1, 2016. The comparable information is not necessarily indicative of the results that actually would have occurred nor does it indicate future operating results. Three Months Ended June 30 Six Months Ended June 30 2017 2016 2017 2016 Revenues $ 243,272 $ 264,530 $ 442,904 $ 482,929 Net income $ 36,595 $ 45,536 $ 45,207 $ 62,345 Earnings per share: Basic earnings per share $ 0.18 $ 0.23 $ 0.23 $ 0.31 Diluted earnings per share $ 0.18 $ 0.23 $ 0.22 $ 0.31 For the three and six months ended June 30, 2017, our condensed consolidated statements of operations include $9.5 million and $12.8 million of revenues, respectively, and $2.3 million and $3.2 million of net income, respectively, related to the operations of the L'Auberge de Sedona and Orchards Inn Sedona. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of certain financial assets and liabilities and other financial instruments as of June 30, 2017 and December 31, 2016 , in thousands, is as follows: June 30, 2017 December 31, 2016 Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value Debt $ 943,720 $ 958,871 $ 920,539 $ 906,156 _______________ (1) The carrying amount of debt is net of unamortized debt issuance costs. The fair value of our mortgage debt is a Level 2 measurement under the fair value hierarchy (see Note 2). We estimate the fair value of our mortgage debt by discounting the future cash flows of each instrument at estimated market rates. The carrying value of our other financial instruments approximate fair value due to the short-term nature of these financial instruments. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation We are subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business, regarding the operation of our hotels and company matters. While it is not possible to ascertain the ultimate outcome of such matters, management believes that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance will not have a material adverse impact on our financial condition or results of operations. The outcome of claims, lawsuits and legal proceedings brought against the Company, however, is subject to significant uncertainties. Other Matters As previously reported, in February 2016, the Company was notified by the franchisor of one of its hotels that as a result of low guest satisfaction scores, the Company was in default under the franchise agreement for that hotel. The Company continues to proactively work with the franchisor and the manager of the hotel and has developed and executed a plan aimed to improve guest satisfaction scores. To date, the guest satisfaction scores have improved so that the Company is no longer in default under the franchise agreement. However, if the guest satisfaction scores were to decrease again, the franchisor may again notify the Company that it is in default under the franchise agreement and that the franchisor is reserving all of its rights under the franchise agreement, including the right to terminate the franchise agreement in the future. While the Company continues to work diligently with the franchisor and manager to maintain the guest satisfaction scores at a level such that the Company does not fall back into default, no assurance can be given that the Company will be successful. If the Company is not successful, the franchisor may seek to terminate the franchise agreement and assert a claim it is owed a termination fee, including a payment for liquidated damages, which could result in a material adverse effect on the Company's business, financial condition or results of operation. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016 , included in our Annual Report on Form 10-K filed on February 27, 2017 . In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of June 30, 2017 , and the results of our operations for the three and six months ended June 30, 2017 and 2016 , and cash flows for the six months ended June 30, 2017 and 2016 . Interim results are not necessarily indicative of full-year performance because of the impact of seasonal and short-term variations. Our financial statements include all of the accounts of the Company and its subsidiaries in accordance with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation. If the Company determines that it has an interest in a variable interest entity within the meaning of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation , the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. Our operating partnership meets the criteria of a variable interest entity. The Company is the primary beneficiary and, accordingly, we consolidate our operating partnership. |
Property and Equipment | Property and Equipment Investments in hotel properties, land, land improvements, building and furniture, fixtures and equipment and identifiable intangible assets are recorded at fair value upon acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation are removed from the Company’s accounts and any resulting gain or loss is included in the statements of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 15 to 40 years for buildings, land improvements, and building improvements and 1 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel, less costs to sell, exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel’s estimated fair market value is recorded and an impairment loss is recognized. We will classify a hotel as held for sale in the period that we have made the decision to dispose of the hotel, a binding agreement to purchase the property has been signed under which the buyer has committed a significant amount of nonrefundable cash and no significant financing or other contingencies exist which could cause the transaction to not be completed in a timely manner. If these criteria are met, we will record an impairment loss if the fair value less costs to sell is lower than the carrying amount of the hotel and related assets and will cease recording depreciation expense. We will classify the assets and related liabilities as held for sale on the balance sheet. |
Revenue Recognition | Revenue Recognition Revenues from operations of the hotels are recognized when the goods or services are provided. Revenues consist of room sales, food and beverage sales, and other hotel department revenues, such as telephone, parking, gift shop sales and resort fees. |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period plus other potentially dilutive securities such as equity awards or shares issuable in the event of conversion of operating partnership units. No adjustment is made for shares that are anti-dilutive during a period. |
Stock-based Compensation | Stock-based Compensation We account for stock-based employee compensation using the fair value based method of accounting. We record the cost of stock-based awards based on the grant-date fair value of the award. The vesting of the awards issued to officers and employees is based on either continued employment (time-based) or based on continued employment and the relative total shareholder returns of the Company or improvement in market share of the Company's hotels (performance-based). The cost of time-based awards and performance-based awards is recognized over the period during which an employee is required to provide service in exchange for the award, adjusted for forfeitures. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings during the period in which the new rate is enacted. We have elected to be treated as a real estate investment trust (“REIT”) under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), which requires that we distribute at least 90% of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state taxes on any retained income, we may be subject to taxes on “built-in gains” on sales of certain assets. Our taxable REIT subsidiaries will generally be subject to federal, state, local, and/or foreign income taxes. In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, we lease each of our hotel properties to a wholly owned subsidiary of Bloodstone TRS, Inc., our primary taxable REIT subsidiary, or TRS, except for the Frenchman’s Reef & Morning Star Marriott Beach Resort, which is owned by a Virgin Islands corporation, which we have elected to be treated as a TRS, and the L'Auberge de Sedona and Orchards Inn Sedona, which are each leased to a wholly owned subsidiary of the Company, which we have elected to be treated as a TRS. |
Fair Value Measurements | Fair Value Measurements In evaluating fair value, U.S. GAAP outlines a valuation framework and creates a fair value hierarchy that distinguishes between market assumptions based on market data (observable inputs) and a reporting entity’s own assumptions about market data (unobservable inputs). The hierarchy ranks the quality and reliability of inputs used to determine fair value, which are then classified and disclosed in one of the three categories. The three levels are as follows: • Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2 - Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets in markets that are not active and model-derived valuations whose inputs are observable • Level 3 - Model-derived valuations with unobservable inputs |
Intangible Assets and Liabilities | Intangible Assets and Liabilities Intangible assets and liabilities are recorded on non-market contracts assumed as part of the acquisition of certain hotels. We review the terms of agreements assumed in conjunction with the purchase of a hotel to determine if the terms are favorable or unfavorable compared to an estimated market agreement at the acquisition date. Favorable lease assets or unfavorable contract liabilities are recorded at the acquisition date and amortized using the straight-line method over the term of the agreement. We do not amortize intangible assets with indefinite useful lives, but we review these assets for impairment annually or at interim periods if events or circumstances indicate that the asset may be impaired. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with U.S. 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 from those estimates. |
Recent Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel a will be considered asset purchases as opposed to business combinations. However, the determination will be made on a transaction-by-transaction basis and we do not expect the determination to materially change the recognition of the assets and liabilities acquired. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions. This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted. We do not anticipate that this guidance will have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted. We do not anticipate that this guidance will have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which simplifies various aspects of how share-based payments are accounted for and presented in the financial statements. This standard requires companies to record all of the tax effects related to share-based payments through the income statement, allows companies to elect an accounting policy to either estimate the share based award forfeitures (and expense) or account for forfeitures (and expense) as they occur, and allows companies to withhold up to the maximum individual statutory tax rate the shares upon settlement of an award without causing the award to be classified as a liability. This guidance is effective for annual periods beginning after December 15, 2016. We adopted ASU No. 2016-09 effective January 1, 2017 and it did not have a material impact on our financial position, results of operations or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which primarily changes the lessee's accounting for operating leases by requiring recognition of lease right-of-use assets and lease liabilities. This standard is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The primary impact of the new standard will be to the treatment of our ground leases, which represent a majority of all of our operating lease payments. We are evaluating the effect of ASU 2016-02 on our consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which affects virtually all aspects of an entity’s revenue recognition. The new standard sets forth five prescribed steps to determine the timing and amount of revenue to be recognized to appropriately 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. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which deferred the effectiveness of ASU No. 2014-09 to reporting periods beginning after December 15, 2017 and permitted early application for annual reporting periods beginning after December 15, 2016. While we have not completed our assessment of this standard, we do not expect it to materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel-level sales. Furthermore, we do not expect the standard to significantly impact the recognition of or accounting for real estate sales to third parties, since we primarily dispose of real estate in exchange for cash with few contingencies. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment as of June 30, 2017 and December 31, 2016 consists of the following (in thousands): June 30, 2017 December 31, 2016 Land $ 602,879 $ 553,769 Land improvements 7,994 7,994 Buildings and site improvements 2,438,245 2,355,871 Furniture, fixtures and equipment 468,078 428,991 Construction in progress 7,180 35,253 3,524,376 3,381,878 Less: accumulated depreciation (785,183 ) (735,202 ) $ 2,739,193 $ 2,646,676 |
Favorable Lease Assets (Tables)
Favorable Lease Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets by Major Class | Our favorable lease assets, net of accumulated amortization of $2.5 million and $2.3 million as of June 30, 2017 and December 31, 2016 , respectively, consist of the following (in thousands): June 30, 2017 December 31, 2016 Westin Boston Waterfront Hotel Ground Lease $ 17,751 $ 17,859 Orchards Inn Sedona Annex Sublease 9,013 — Lexington Hotel New York Tenant Leases 138 154 $ 26,902 $ 18,013 |
Capital Stock (Tables)
Capital Stock (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Dividends Payable | We have paid the following dividends to holders of our common stock during 2017 as follows: Payment Date Record Date Dividend per Share January 12, 2017 December 30, 2016 $ 0.125 April 12, 2017 March 31, 2017 $ 0.125 July 12, 2017 June 30, 2017 $ 0.125 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Stock Awards | A summary of our restricted stock awards from January 1, 2017 to June 30, 2017 is as follows: Number of Shares Weighted- Average Grant Date Fair Value Unvested balance at January 1, 2017 567,540 $ 10.62 Granted 320,866 11.20 Vested (244,411 ) 11.29 Forfeited (16,669 ) 10.80 Unvested balance at June 30, 2017 627,326 $ 10.65 |
Schedule of Nonvested Performance-based Units Activity | A summary of our PSUs from January 1, 2017 to June 30, 2017 is as follows: Number of Target Units Weighted- Average Grant Date Fair Value Unvested balance at January 1, 2017 686,684 $ 10.65 Granted 266,009 11.04 Additional units from dividends 16,312 11.09 Vested (1) (200,374 ) 12.15 Unvested balance at June 30, 2017 768,631 $ 10.40 ______________________ (1) There was no payout of shares of our common stock for PSUs that vested on February 27, 2017, as our total stockholder return fell below the 30th percentile of the total stockholder returns of the peer group over the three-year performance period. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per share, basic and diluted | The following is a reconciliation of the calculation of basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator: Net income $ 36,595 $ 44,175 $ 45,482 $ 60,953 Denominator: Weighted-average number of common shares outstanding—basic 200,810,323 201,273,767 200,732,639 201,133,321 Effect of dilutive securities: Unvested restricted common stock 99,677 — 165,483 81,513 Shares related to unvested PSUs 831,394 553,617 831,394 553,617 Weighted-average number of common shares outstanding—diluted 201,741,394 201,827,384 201,729,516 201,768,451 Earnings per share: Basic earnings per share $ 0.18 $ 0.22 $ 0.23 $ 0.30 Diluted earnings per share $ 0.18 $ 0.22 $ 0.23 $ 0.30 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of long term debt | The following table sets forth information regarding the Company’s debt as of June 30, 2017 (dollars in thousands): Property Principal Balance Interest Rate Maturity Date Salt Lake City Marriott Downtown $ 57,523 4.25% November 2020 Westin Washington D.C. City Center 65,847 3.99% January 2023 The Lodge at Sonoma, a Renaissance Resort & Spa 28,585 3.96% April 2023 Westin San Diego 65,571 3.94% April 2023 Courtyard Manhattan / Midtown East 84,761 4.40% August 2024 Renaissance Worthington 84,878 3.66% May 2025 JW Marriott Denver at Cherry Creek 64,051 4.33% July 2025 Boston Westin 199,765 4.36% November 2025 Unamortized debt issuance costs (5,183 ) Total mortgage debt, net of unamortized debt issuance costs 645,798 Unsecured term loan 100,000 LIBOR + 1.45% (1) May 2021 Unsecured term loan 200,000 LIBOR + 1.45% (2) April 2022 Unamortized debt issuance costs (2,078 ) Unsecured term loan, net of unamortized debt issuance costs 297,922 Senior unsecured credit facility — LIBOR + 1.50% May 2020 (3) Total debt, net of unamortized debt issuance costs $ 943,720 Weighted-Average Interest Rate 3.69% _______________________ (1) The interest rate as of June 30, 2017 was 2.51% . (2) The interest rate as of June 30, 2017 was 2.50% . (3) The credit facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain customary conditions. |
Summary of applicable margin based upon the Company’s ratio of net indebtedness to EBITDA | The interest rate on each of the term loans is based on a pricing grid ranging from 145 to 220 basis points over LIBOR, as follows: Leverage Ratio Applicable Margin Less than or equal to 35% 1.45 % Greater than 35% but less than or equal to 45% 1.60 % Greater than 45% but less than or equal to 50% 1.75 % Greater than 50% but less than or equal to 55% 1.95 % Greater than 55% 2.20 % The interest rate on the facility is based upon LIBOR, plus an applicable margin based upon the Company’s leverage ratio, as follows: Leverage Ratio Applicable Margin Less than or equal to 35% 1.50 % Greater than 35% but less than or equal to 45% 1.65 % Greater than 45% but less than or equal to 50% 1.80 % Greater than 50% but less than or equal to 55% 2.00 % Greater than 55% 2.25 % |
Summary of the most restrictive covenants for senior unsecured credit facility | The facility also contains various corporate financial covenants. A summary of the most restrictive covenants is as follows: Actual at Covenant June 30, 2017 Maximum leverage ratio (1) 60% 25.0% Minimum fixed charge coverage ratio (2) 1.50x 4.62x Minimum tangible net worth (3) $1.91 billion $2.59 billion Secured recourse indebtedness Less than 45% of Total Asset Value 21.1% _____________________________ (1) Leverage ratio is net indebtedness, as defined in the credit agreement, divided by total asset value, defined in the credit agreement as the value of our owned hotels based on hotel net operating income divided by a defined capitalization rate. (2) Fixed charge coverage ratio is Adjusted EBITDA, generally defined in the credit agreement as EBITDA less FF&E reserves, for the most recently ending 12 months, to fixed charges, which is defined in the credit agreement as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same most recently ending 12-month period. (3) Tangible net worth, as defined in the credit agreement, is (i) total gross book value of all assets, exclusive of depreciation and amortization, less intangible assets, total indebtedness, and all other liabilities, plus (ii) 75% of net proceeds from future equity issuances. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Acquired Assets and Liabilities | The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed in our acquisitions (in thousands): L'Auberge de Sedona Orchards Inn Sedona Land $ 39,384 $ 9,726 Building and improvements 22,204 10,180 Furnitures, fixtures and equipment 4,376 1,982 Total fixed assets 65,964 21,888 Favorable lease asset — 9,065 Other assets and liabilities, net (2,710 ) (412 ) Total $ 63,254 $ 30,541 |
Pro Forma Operating Information | The following unaudited pro forma financial information presents our results of operations (in thousands, except per share data) as if the hotels were acquired on January 1, 2016. The comparable information is not necessarily indicative of the results that actually would have occurred nor does it indicate future operating results. Three Months Ended June 30 Six Months Ended June 30 2017 2016 2017 2016 Revenues $ 243,272 $ 264,530 $ 442,904 $ 482,929 Net income $ 36,595 $ 45,536 $ 45,207 $ 62,345 Earnings per share: Basic earnings per share $ 0.18 $ 0.23 $ 0.23 $ 0.31 Diluted earnings per share $ 0.18 $ 0.23 $ 0.22 $ 0.31 |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value of certain financial assets and liabilities and other financial instruments | The fair value of certain financial assets and liabilities and other financial instruments as of June 30, 2017 and December 31, 2016 , in thousands, is as follows: June 30, 2017 December 31, 2016 Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value Debt $ 943,720 $ 958,871 $ 920,539 $ 906,156 _______________ (1) The carrying amount of debt is net of unamortized debt issuance costs. |
Organization - Narrative (Detai
Organization - Narrative (Details) | Jun. 30, 2017Hotelroom |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 28 |
Number of rooms in hotels, resorts and senior loan secured facility (in rooms) | room | 9,630 |
Atlanta, Georgia | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Boston, Massachusetts | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 2 |
Burlington, Vermont | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Charleston, South Carolina | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Chicago, Illinois | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 2 |
Denver, Colorado | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 2 |
Fort Lauderdale, Florida | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Fort Worth, Texas | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Huntington Beach, California | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Key West, Florida | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 2 |
New York, New York | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 4 |
Salt Lake City, Utah | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
San Diego, California | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
San Francisco, California | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Sedona, Arizona | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 2 |
Sonoma, California | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Washington D.C | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 2 |
St. Thomas, U.S. Virgin Islands | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Vail, Colorado | |
Real Estate Properties [Line Items] | |
Number of hotels (in hotels) | 1 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Accrual for tax uncertainties | $ 0 | $ 0 |
Minimum | Buildings, Land Improvements, and Building Improvements | ||
Useful life | 15 years | |
Minimum | Furniture, fixtures and equipment | ||
Useful life | 1 year | |
Maximum | Buildings, Land Improvements, and Building Improvements | ||
Useful life | 40 years | |
Maximum | Furniture, fixtures and equipment | ||
Useful life | 10 years |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Property and Equipment | ||
Property and equipment, at cost | $ 3,524,376 | $ 3,381,878 |
Less: accumulated depreciation | (785,183) | (735,202) |
Property and equipment, net | 2,739,193 | 2,646,676 |
Accrued capital expenditures | 5,100 | 10,800 |
Land | ||
Property and Equipment | ||
Property and equipment, at cost | 602,879 | 553,769 |
Land improvements | ||
Property and Equipment | ||
Property and equipment, at cost | 7,994 | 7,994 |
Buildings and site improvements | ||
Property and Equipment | ||
Property and equipment, at cost | 2,438,245 | 2,355,871 |
Furniture, fixtures and equipment | ||
Property and Equipment | ||
Property and equipment, at cost | 468,078 | 428,991 |
Construction in progress | ||
Property and Equipment | ||
Property and equipment, at cost | $ 7,180 | $ 35,253 |
Favorable Lease Assets - Narrat
Favorable Lease Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets, amortization expense | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.2 | |
Off-Market Favorable Lease | |||||
Business Acquisition [Line Items] | |||||
Accumulated amortization | 2.5 | 2.5 | $ 2.3 | ||
Orchards Inn | Off-Market Favorable Lease | |||||
Business Acquisition [Line Items] | |||||
Carrying amount of the lease right | $ 9.1 | $ 9.1 |
Favorable Lease Assets - Schedu
Favorable Lease Assets - Schedule of Finite-Lived Intangible Assets by Major Class (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||
Favorable lease assets, net | $ 26,902 | $ 18,013 |
Above Market Leases Ground | Boston Westin Waterfront | ||
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||
Carrying amount of the lease right | 17,751 | 17,859 |
Above Market Leases Ground | Orchards Inn | ||
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||
Carrying amount of the lease right | 9,013 | 0 |
Above Market Leases Ground | Lexington Hotel New York | ||
Indefinite-lived Intangible Assets by Major Class [Line Items] | ||
Carrying amount of the lease right | $ 138 | $ 154 |
Capital Stock - Narrative (Deta
Capital Stock - Narrative (Details) | 6 Months Ended | |
Jun. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2016$ / sharesshares | |
Class of Stock [Line Items] | ||
Common stock, shares authorized (up to) | shares | 400,000,000 | 400,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Remaining capacity | $ | $ 143,500,000 | |
Preferred stock, shares authorized (up to) | shares | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Preferred stock, shares outstanding | shares | 0 | 0 |
Common stock partnership units option redemption ratio | 1 | |
Common Stock | ||
Class of Stock [Line Items] | ||
Aggregate offering price (up to) | $ | $ 200,000,000 | |
Remaining amount under ATM program | $ | 128,300,000 | |
Value amount of shares authorized to be repurchased (up to) | $ | $ 150,000,000 | |
Unaffiliated Third Parties | ||
Class of Stock [Line Items] | ||
Operating partnerships units held (in shares) | shares | 0 | 0 |
Capital Stock - Schedule of Div
Capital Stock - Schedule of Dividends Payable (Details) - $ / shares | Jul. 12, 2017 | Apr. 12, 2017 | Jan. 12, 2017 |
Dividends Payable [Line Items] | |||
Dividends per Share (in dollars per share) | $ 0.1250 | $ 0.1250 | |
Subsequent Event | |||
Dividends Payable [Line Items] | |||
Dividends per Share (in dollars per share) | $ 0.1250 |
Stock Incentive Plans - Narrati
Stock Incentive Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 27, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period (in years) | 3 years | |||||
Percentage of target award of maximum possible payout to executives | 150.00% | |||||
Fair value at grant date based on hotel market share (in dollars per share) | $ 11.20 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period (in years) | 3 years | |||||
Awards expected to vest in 2018 (in shares) | 285,936 | 285,936 | ||||
Awards expected to vest in 2019 (in shares) | 226,487 | 226,487 | ||||
Awards expected to vest in 2020 (in shares) | 114,903 | 114,903 | ||||
Awards expected to vest (in shares) | 627,326 | 627,326 | 567,540 | |||
Unrecognized compensation cost | $ 5.6 | $ 5.6 | ||||
Unrecognized compensation expense related to compensation awards, period for recognition (in months) | 26 months | |||||
Compensation expense | $ 0.8 | $ 0.8 | $ 1.5 | $ 1.6 | ||
Number of shares, granted | 320,866 | |||||
Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period (in years) | 3 years | |||||
Awards expected to vest in 2018 (in shares) | 211,463 | 211,463 | ||||
Awards expected to vest in 2019 (in shares) | 288,112 | 288,112 | ||||
Awards expected to vest in 2020 (in shares) | 269,056 | 269,056 | ||||
Awards expected to vest (in shares) | 768,631 | 768,631 | 686,684 | |||
Unrecognized compensation cost | $ 4.4 | $ 4.4 | ||||
Unrecognized compensation expense related to compensation awards, period for recognition (in months) | 26 months | |||||
Compensation expense | $ 0.6 | $ 0.6 | $ 1.2 | $ 1.3 | ||
Percentage of total stockholder return for payout of shares | 30.00% | |||||
Number of shares, granted | 266,009 | 266,009 | ||||
Fair value at grant date (in dollars per share) | $ 10.89 | |||||
Volatility | 26.70% | |||||
Risk-free rate | 1.46% | |||||
Performance Stock Units | Executive Officers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of total stockholder return for payout of shares | 75.00% | |||||
2004 Stock Option and Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares issued or committed to issue | 443,453 | 443,453 | ||||
2016 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option and incentive plan, shares authorized (up to) | 6,082,664 | 6,082,664 | ||||
Issued In 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period (in years) | 3 years | |||||
Issued In 2016 | Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period (in years) | 3 years | |||||
Percentage of payout based on improving market share | 25.00% | |||||
Issued In 2016 | Performance Stock Units | Executive Officers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of total stockholder return for payout of shares | 75.00% | |||||
Issued In 2017 | Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting period (in years) | 3 years | |||||
Percentage of payout based on improving market share | 50.00% | |||||
Issued In 2017 | Performance Stock Units | Executive Officers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of total stockholder return for payout of shares | 50.00% |
Stock Incentive Plans - Stock A
Stock Incentive Plans - Stock Awards Activity (Details) - $ / shares | Feb. 27, 2017 | Jun. 30, 2017 |
Restricted Stock | ||
Number of Shares | ||
Number of shares, Beginning Balance | 567,540 | |
Number of shares, Granted | 320,866 | |
Number of shares, Vested | (244,411) | |
Number of shares, Forfeited | (16,669) | |
Number of shares, Ending Balance | 627,326 | |
Weighted- Average Grant Date Fair Value | ||
Weighted-average grant date fair value, Beginning balance (in dollars per share) | $ 10.62 | |
Weighted-average grant date fair value, Granted (in dollars per share) | 11.20 | |
Weighted-average grant date fair value, Vested (in dollars per share) | 11.29 | |
Weighted-average grant date fair value, Forfeited (in dollars per share) | 10.80 | |
Weighted-average grant date fair value, Ending balance (in dollars per share) | $ 10.65 | |
Performance Stock Units | ||
Number of Shares | ||
Number of shares, Beginning Balance | 686,684 | |
Number of shares, Granted | 266,009 | 266,009 |
Number of shares, Additional units from dividends | 16,312 | |
Number of shares, Vested | (200,374) | |
Number of shares, Ending Balance | 768,631 | |
Weighted- Average Grant Date Fair Value | ||
Weighted-average grant date fair value, Beginning balance (in dollars per share) | $ 10.65 | |
Weighted-average grant date fair value, Granted (in dollars per share) | 11.04 | |
Weighted-average grant date fair value, Additional units from dividends (in dollars per share) | 11.09 | |
Weighted-average grant date fair value, Vested (in dollars per share) | 12.15 | |
Weighted-average grant date fair value, Ending balance (in dollars per share) | $ 10.40 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||||
Net income | $ 36,595 | $ 44,175 | $ 45,482 | $ 60,953 |
Denominator: | ||||
Weighted-average number of common shares outstanding—basic (in shares) | 200,810,323 | 201,273,767 | 200,732,639 | 201,133,321 |
Weighted-average number of common shares outstanding—diluted (in shares) | 201,741,394 | 201,827,384 | 201,729,516 | 201,768,451 |
Earnings per share: | ||||
Basic earnings per share (in dollars per share) | $ 0.18 | $ 0.22 | $ 0.23 | $ 0.30 |
Diluted earnings per share (in dollars per share) | $ 0.18 | $ 0.22 | $ 0.23 | $ 0.30 |
Stock Appreciation Rights (SARs) | ||||
Earnings per share: | ||||
Antidilutive securities excluded from calculation (in shares) | 20,770 | 20,770 | 20,770 | 20,770 |
Unvested restricted common stock | ||||
Denominator: | ||||
Unvested Stock/SARs/MSUs (in shares) | 99,677 | 0 | 165,483 | 81,513 |
Shares related to unvested PSUs | ||||
Denominator: | ||||
Unvested Stock/SARs/MSUs (in shares) | 831,394 | 553,617 | 831,394 | 553,617 |
Debt - Schedule of Long Term De
Debt - Schedule of Long Term Debt (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Total mortgage debt, net of unamortized debt issuance costs | $ 645,798,000 | $ 821,167,000 |
Total debt | $ 943,720,000 | $ 920,539,000 |
Weighted-average interest rate (as a percent) | 3.69% | |
Mortgages | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (5,183,000) | |
Total mortgage debt, net of unamortized debt issuance costs | 645,798,000 | |
Unsecured Term Loan | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (2,078,000) | |
Total debt | 297,922,000 | |
Unsecured credit facility | ||
Debt Instrument [Line Items] | ||
Senior unsecured credit facility | $ 0 | |
Line of credit, variable rate basis description | LIBOR + 1.50% | |
Unsecured credit facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Marriott Salt Lake City Downtown | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 57,523,000 | |
Interest rate, stated percentage | 4.25% | |
Westin Washington, D.C. City Center | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 65,847,000 | |
Interest rate, stated percentage | 3.99% | |
The Lodge at Sonoma, a Renaissance Resort and Spa | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 28,585,000 | |
Interest rate, stated percentage | 3.96% | |
Westin San Diego | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 65,571,000 | |
Interest rate, stated percentage | 3.94% | |
Courtyard Manhattan / Midtown East | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 84,761,000 | |
Interest rate, stated percentage | 4.40% | |
Renaissance Worthington | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 84,878,000 | |
Interest rate, stated percentage | 3.6625% | |
JW Marriott Denver at Cherry Creek | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 64,051,000 | |
Interest rate, stated percentage | 4.33% | |
Boston Westin Waterfront | Mortgages | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 199,765,000 | |
Interest rate, stated percentage | 4.36% | |
Unsecured Term Loan Due May 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.51% | |
Line of credit, variable rate basis description | LIBOR + 1.45% (1) | |
Unsecured Term Loan Due May 2021 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.45% | |
Unsecured Term Loan Due May 2021 | Unsecured Term Loan | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 100,000,000 | |
Unsecured Term Loan Due April 2022 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.50% | |
Line of credit, variable rate basis description | LIBOR + 1.45% (2) | |
Unsecured Term Loan Due April 2022 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.45% | |
Unsecured Term Loan Due April 2022 | Unsecured Term Loan | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 200,000,000 |
Debt - Mortgage Debt (Details)
Debt - Mortgage Debt (Details) $ in Millions | Apr. 26, 2017USD ($) | Jun. 30, 2017Hotel |
Debt Instrument [Line Items] | ||
Number of hotels (in hotels) | 28 | |
Mortgages | Lexington Hotel New York | ||
Debt Instrument [Line Items] | ||
Extinguishment of debt | $ | $ 170.4 | |
Mortgages | ||
Debt Instrument [Line Items] | ||
Number of hotels (in hotels) | 8 |
Debt - Senior Unsecured Credit
Debt - Senior Unsecured Credit Facility (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||||
Percent of unused portion line of credit facility triggering lower commitment fee (as a percent) | 50.00% | |||
Net proceeds from future equity issuances (as a percent) | 75.00% | |||
Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity (up to) | $ 300,000,000 | $ 300,000,000 | ||
Increase in credit facility | 600,000,000 | 600,000,000 | ||
Senior unsecured credit facility | 0 | 0 | ||
Interest and unused credit facility fees | $ 200,000 | $ 400,000 | $ 500,000 | $ 800,000 |
Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, unused capacity, commitment fee (as a percent) | 0.20% | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, unused capacity, commitment fee (as a percent) | 0.30% | |||
Line Of Credit Facility Covenant Actual Results | ||||
Line of Credit Facility [Line Items] | ||||
Maximum leverage ratio (as a percent) | 0.250 | 0.250 | ||
Minimum fixed charge coverage ratio | 4.62 | |||
Minimum tangible net worth | $ 2,590,000,000 | $ 2,590,000,000 | ||
Secured recourse indebtedness ratio | 21.10% | |||
Line Of Credit Facility Covenant | ||||
Line of Credit Facility [Line Items] | ||||
Maximum leverage ratio (as a percent) | 0.60 | 0.60 | ||
Minimum fixed charge coverage ratio | 1.5 | |||
Minimum tangible net worth | $ 1,913,306,000 | $ 1,913,306,000 | ||
Secured recourse indebtedness ratio | 45.00% | |||
LIBOR | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
LIBOR | Minimum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.75% | |||
LIBOR | Maximum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.75% | |||
Less than or equal to 35% | Maximum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.35 | |||
Less than or equal to 35% | LIBOR | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.50% | |||
Greater than 35% but less than or equal to 45% | Minimum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.35 | |||
Greater than 35% but less than or equal to 45% | Maximum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.45 | |||
Greater than 35% but less than or equal to 45% | LIBOR | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.65% | |||
Greater than 45% but less than or equal to 50% | Minimum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.45 | |||
Greater than 45% but less than or equal to 50% | Maximum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.50 | |||
Greater than 45% but less than or equal to 50% | LIBOR | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.80% | |||
Greater than 50% but less than or equal to 55% | Minimum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.50 | |||
Greater than 50% but less than or equal to 55% | Maximum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.55 | |||
Greater than 50% but less than or equal to 55% | LIBOR | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.00% | |||
Greater than 55% | Minimum | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Ratio Of Net Indebtedness to Ebitda | 0.55 | |||
Greater than 55% | LIBOR | Unsecured credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% |
Debt - Unsecured Term Loan (Det
Debt - Unsecured Term Loan (Details) | Apr. 26, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) |
Line Of Credit Facility Covenant Actual Results | |||||
Debt Instrument [Line Items] | |||||
Maximum leverage ratio (as a percent) | 0.250 | 0.250 | |||
Unsecured Term Loan | Less than or equal to 35% | Maximum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.35 | ||||
Unsecured Term Loan | Greater than 35% but less than or equal to 45% | Minimum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.35 | ||||
Unsecured Term Loan | Greater than 35% but less than or equal to 45% | Maximum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.45 | ||||
Unsecured Term Loan | Greater than 45% but less than or equal to 50% | Minimum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.45 | ||||
Unsecured Term Loan | Greater than 45% but less than or equal to 50% | Maximum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.5 | ||||
Unsecured Term Loan | Greater than 50% but less than or equal to 55% | Minimum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.5 | ||||
Unsecured Term Loan | Greater than 50% but less than or equal to 55% | Maximum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.55 | ||||
Unsecured Term Loan | Greater than 55% | Minimum | |||||
Debt Instrument [Line Items] | |||||
Ratio Of Net Indebtedness to Ebitda | 0.55 | ||||
Unsecured Term Loan Due May 2021 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.45% | ||||
Unsecured Term Loan Due April 2022 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.45% | ||||
Term loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 145.00% | ||||
Interest incurred on the facility | $ 1,500,000 | $ 300,000 | $ 2,100,000 | $ 300,000 | |
Term loan | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 145.00% | ||||
Term loan | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 220.00% | ||||
Term loan | LIBOR | Less than or equal to 35% | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.45% | ||||
Term loan | LIBOR | Greater than 35% but less than or equal to 45% | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.60% | ||||
Term loan | LIBOR | Greater than 45% but less than or equal to 50% | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
Term loan | LIBOR | Greater than 50% but less than or equal to 55% | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.95% | ||||
Term loan | LIBOR | Greater than 55% | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.20% | ||||
Term loan | Unsecured Term Loan | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.45% | ||||
Term loan | Unsecured Term Loan | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.20% | ||||
Term loan | Unsecured Term Loan Due May 2021 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term (in years) | 5 years | ||||
Outstanding principal balance | $ 100,000,000 | $ 100,000,000 | |||
Term loan | Unsecured Term Loan Due April 2022 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term (in years) | 5 years | ||||
Outstanding principal balance | $ 200,000,000 | ||||
Mortgages | Lexington Hotel New York | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt | $ 170,400,000 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | Feb. 28, 2017USD ($)room | Jun. 30, 2017USD ($)room | Jun. 30, 2017USD ($)room |
L'Auberge de Sedona | |||
Business Acquisition [Line Items] | |||
Number of rooms acquired (in rooms) | room | 88 | ||
Orchards Inn | |||
Business Acquisition [Line Items] | |||
Number of rooms acquired (in rooms) | room | 70 | ||
Number of hotel rooms subleased | room | 28 | 28 | |
Number of hotel rooms | room | 70 | ||
L'Auberge de Sedona & Orchards Inn | |||
Business Acquisition [Line Items] | |||
Purchase price | $ | $ 97 | ||
Management agreement | 5 years | ||
Base management fee percentage of gross revenues in year one | 2.45% | ||
Base management fee percentage of gross revenues in year two | 2.70% | ||
Base management fee percentage of gross revenues in year three | 3.00% | ||
Base incentive management fee percentage for gross revenues | 12.00% | ||
Incentive management fee percentage for gross revenues | 15.00% | ||
Revenue related to acquisitions | $ | $ 9.5 | $ 12.8 | |
Net income related to acquisitions | $ | 2.3 | 3.2 | |
Off-Market Favorable Lease | Orchards Inn | |||
Business Acquisition [Line Items] | |||
Carrying amount of the lease right | $ | $ 9.1 | $ 9.1 |
Acquisitions - Allocation of Fa
Acquisitions - Allocation of Fair Value (Details) $ in Thousands | Feb. 28, 2017USD ($) |
L'Auberge de Sedona | |
Business Acquisition [Line Items] | |
Land | $ 39,384 |
Building and improvements | 22,204 |
Furnitures, fixtures and equipment | 4,376 |
Total fixed assets | 65,964 |
Favorable lease asset | 0 |
Other assets and liabilities, net | (2,710) |
Total | 63,254 |
Orchards Inn | |
Business Acquisition [Line Items] | |
Land | 9,726 |
Building and improvements | 10,180 |
Furnitures, fixtures and equipment | 1,982 |
Total fixed assets | 21,888 |
Favorable lease asset | 9,065 |
Other assets and liabilities, net | (412) |
Total | $ 30,541 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Combinations [Abstract] | ||||
Revenues | $ 243,272 | $ 264,530 | $ 442,904 | $ 482,929 |
Net income | $ 36,595 | $ 45,536 | $ 45,207 | $ 62,345 |
Earnings per share: | ||||
Basic earnings per share (in dollars per share) | $ 0.18 | $ 0.23 | $ 0.23 | $ 0.31 |
Diluted earnings per share (in dollars per share) | $ 0.18 | $ 0.23 | $ 0.22 | $ 0.31 |
Fair Value of Financial Instr43
Fair Value of Financial Instruments - Fair Value of Certain Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying value of debt | $ 943,720 | $ 920,539 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying value of debt | 943,720 | 920,539 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt | $ 958,871 | $ 906,156 |