Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 29, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | RLJ Lodging Trust | |
Entity Central Index Key | 1,511,337 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 130,769,039 | |
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Investment in hotels and other properties, net | $ 3,508,958 | $ 3,518,803 |
Cash and cash equivalents | 263,881 | 262,458 |
Restricted cash reserves | 59,941 | 63,054 |
Hotel and other receivables, net of allowance of $170 and $166, respectively | 31,802 | 25,691 |
Deferred financing costs, net | 9,483 | 11,421 |
Deferred income tax asset | 7,517 | 7,502 |
Earnest Money Deposits | 7,000 | 0 |
Prepaid expense and other assets | 33,757 | 42,115 |
Assets Held-for-sale, Long Lived | 197,335 | |
Total assets | 3,922,339 | 4,128,379 |
Liabilities and Equity | ||
Mortgage loans | 376,939 | 532,747 |
Term loans | 1,025,000 | 1,025,000 |
Accounts payable and other liabilities | 117,383 | 129,388 |
Deferred income tax liability | 7,542 | 7,879 |
Advance deposits and deferred revenue | 10,854 | 9,984 |
Accrued interest | 2,743 | 2,783 |
Distributions payable | 46,154 | 42,114 |
Total liabilities | $ 1,586,615 | $ 1,749,895 |
Commitments and Contingencies (Note 10) | ||
Shareholders’ equity: | ||
Preferred shares of beneficial interest, $0.01 par value, 50,000,000 shares authorized; zero shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | $ 0 | $ 0 |
Common shares of beneficial interest, $0.01 par value, 450,000,000 shares authorized; 130,133,618 and 131,964,706 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 1,301 | 1,319 |
Additional paid-in-capital | 2,363,965 | 2,419,731 |
Accumulated other comprehensive loss | (17,128) | (13,644) |
Distributions in excess of net earnings | (29,793) | (46,415) |
Total shareholders’ equity | 2,318,345 | 2,360,991 |
Noncontrolling interest | ||
Noncontrolling interest in joint venture | 6,077 | 6,295 |
Noncontrolling interest in Operating Partnership | 11,302 | 11,198 |
Total noncontrolling interest | 17,379 | 17,493 |
Total equity | 2,335,724 | 2,378,484 |
Total liabilities and equity | $ 3,922,339 | $ 4,128,379 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Hotel and other receivables, allowance (in dollars) | $ 178 | $ 234 |
Preferred shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares of beneficial interest, shares authorized | 50,000,000 | 50,000,000 |
Preferred shares of beneficial interest, shares issued | 0 | 0 |
Preferred shares of beneficial interest, shares outstanding | 0 | 0 |
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized | 450,000,000 | 450,000,000 |
Common shares of beneficial interest, shares issued | 132,084,354 | 122,640,042 |
Common shares of beneficial interest, shares outstanding | 132,084,354 | 122,640,042 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating revenue | ||||
Room revenue | $ 262,240 | $ 259,447 | $ 494,799 | $ 465,472 |
Food and beverage revenue | 29,587 | 27,481 | 58,580 | 50,848 |
Other operating department revenue | 9,425 | 8,119 | 18,278 | 15,100 |
Total revenue | 301,252 | 295,047 | 571,657 | 531,420 |
Operating expense | ||||
Room expense | 55,207 | 54,136 | 109,293 | 101,657 |
Food and beverage expense | 20,492 | 18,746 | 41,256 | 35,619 |
Management and Franchise Fee expense | 31,677 | 31,052 | 59,719 | 55,865 |
Other operating expense | 59,228 | 59,837 | 119,809 | 116,213 |
Total property operating expense | 166,604 | 163,771 | 330,077 | 309,354 |
Depreciation and amortization | 37,778 | 35,422 | 74,981 | 68,298 |
Impairment of Real Estate | 0 | 0 | 0 | |
Property tax, insurance and other | 18,281 | 17,938 | 38,324 | 35,190 |
General and administrative | 10,393 | 10,135 | 20,792 | 20,264 |
Transaction and pursuit costs | 853 | 2,411 | 988 | 3,895 |
Total operating expense | 233,909 | 229,677 | 465,162 | 437,001 |
Operating income | 67,343 | 65,370 | 106,495 | 94,419 |
Other income | 456 | 405 | 546 | 515 |
Interest income | 363 | 962 | 808 | 1,285 |
Interest expense | (12,335) | (14,142) | (25,843) | (28,788) |
Income from continuing operations before income tax expense | 55,827 | 52,595 | 82,006 | 67,431 |
Income tax expense | (89) | (494) | (464) | (788) |
Income from continuing operations | 55,738 | 52,101 | 81,542 | 66,643 |
Gain (loss) on disposal of hotel properties | 672 | 1,260 | 22,970 | (1,297) |
Net income | 56,410 | 53,361 | 104,512 | 65,346 |
Net (income) loss attributable to noncontrolling interests | ||||
Noncontrolling interest in consolidated joint venture | (46) | (79) | 23 | (45) |
Noncontrolling interest in common units of Operating Partnership | (373) | (378) | (694) | (465) |
Net income attributable to common shareholders | $ 55,991 | $ 52,904 | $ 103,841 | $ 64,836 |
Basic per common share data: | ||||
Net income per share attributable to common shareholders (in dollars per share) | $ 0.43 | $ 0.42 | $ 0.79 | $ 0.52 |
Weighted-average number of common shares (in shares) | 130,670,629 | 125,260,607 | 130,969,957 | 123,510,507 |
Diluted per common share data: | ||||
Net income per share attributable to common shareholders (in dollars per share) | $ 0.42 | $ 0.42 | $ 0.78 | $ 0.52 |
Weighted-average number of common shares (in shares) | 131,618,693 | 126,475,051 | 131,947,932 | 124,696,925 |
Amounts attributable to the Company’s common shareholders | ||||
Income from continuing operations | $ 55,324 | $ 51,652 | $ 81,028 | $ 66,124 |
Gain (loss) on disposal of hotel properties | 667 | 1,252 | 22,813 | (1,288) |
Net income attributable to common shareholders | 55,991 | 52,904 | 103,841 | 64,836 |
Comprehensive income | ||||
Unrealized gain (loss) on interest rate derivatives | 5,919 | (6,913) | (3,484) | (8,274) |
Comprehensive income | 62,329 | 46,448 | 101,028 | 57,072 |
Comprehensive (income) loss attributable to the noncontrolling interest in consolidated joint venture | (46) | (79) | 23 | (45) |
Comprehensive income attributable to the noncontrolling interest in the Operating Partnership | (373) | (378) | (694) | (465) |
Comprehensive income attributable to the Company | $ 61,910 | $ 45,991 | $ 100,357 | $ 56,562 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in-Capital | Common Stock Including Additional Paid in Capital [Member] | Distributions in excess of net earnings | Accumulated Other Comprehensive Income | Total Noncontrolling Interests | Operating Partnership | Consolidated Joint Venture |
Balance at Dec. 31, 2013 | $ 2,146,334 | $ 1,226 | $ 2,178,004 | $ (45,522) | $ (5,941) | $ 18,567 | $ 11,261 | $ 7,306 | |
Balance (in shares) at Dec. 31, 2013 | 122,640,042 | ||||||||
Increase (Decrease) in Owners' Equity | |||||||||
Net income (loss) | $ 65,346 | 64,836 | 510 | 465 | 45 | ||||
Sale of common stock (shares) | 9,200,000 | ||||||||
Stock Issued During Period, Value, New Issues | $ 232,814 | $ 92 | 232,722 | ||||||
Unrealized loss on interest rate derivative | (8,274) | ||||||||
Distributions to joint venture partner | (1,182) | ||||||||
Issuance of restricted stock | $ 3 | (3) | |||||||
Issuance of restricted stock (in shares) | 343,887 | ||||||||
Amortization of share-based compensation | 7,393 | 7,393 | |||||||
Share grants to trustees | 61 | 61 | |||||||
Share grants to trustees (in shares) | 2,197 | ||||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock | (2,599) | $ 0 | (2,599) | ||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock (in shares) | (98,204) | ||||||||
Forfeiture of restricted stock (in shares) | (3,568) | ||||||||
Distributions on common shares and units | (56,929) | (56,537) | (392) | (392) | |||||
Balance at Jun. 30, 2014 | 2,382,964 | $ 1,321 | 2,415,578 | (37,223) | (14,215) | 17,503 | 11,334 | 6,169 | |
Balance (in shares) at Jun. 30, 2014 | 132,084,354 | ||||||||
Balance at Dec. 31, 2014 | 2,378,484 | $ 1,319 | 2,419,731 | (46,415) | (13,644) | 17,493 | 11,198 | 6,295 | |
Balance (in shares) at Dec. 31, 2014 | 131,964,706 | ||||||||
Increase (Decrease) in Owners' Equity | |||||||||
Net income (loss) | 104,512 | 103,841 | 671 | 694 | (23) | ||||
Unrealized loss on interest rate derivative | (3,484) | (3,484) | |||||||
Distributions to joint venture partner | (195) | (195) | (195) | ||||||
Issuance of restricted stock | $ 3 | (3) | |||||||
Issuance of restricted stock (in shares) | 287,497 | ||||||||
Amortization of share-based compensation | 7,791 | 7,791 | |||||||
Share grants to trustees | 66 | 66 | |||||||
Share grants to trustees (in shares) | 2,168 | ||||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock | $ (3,800) | $ (1) | (3,799) | ||||||
Stock Repurchased During Period, Shares | (1,995,177) | ||||||||
Stock Repurchased During Period, Value | $ (59,841) | (59,821) | $ (20) | ||||||
Shares acquired to satisfy minimum required federal and state tax withholding on vesting restricted stock (in shares) | (120,249) | ||||||||
Forfeiture of restricted stock (in shares) | (5,327) | ||||||||
Distributions on common shares and units | (87,809) | (87,219) | (590) | (590) | |||||
Balance at Jun. 30, 2015 | $ 2,335,724 | $ 1,301 | $ 2,363,965 | $ (29,793) | $ (17,128) | $ 17,379 | $ 11,302 | $ 6,077 | |
Balance (in shares) at Jun. 30, 2015 | 130,133,618 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 104,512 | $ 65,346 |
Adjustments to reconcile net income to cash flow provided by operating activities: | ||
Loss on defeasance | 0 | 804 |
Gain (loss) on disposal of hotel properties | 22,970 | (1,297) |
(Gain) loss on disposal of hotel properties | 1,297 | |
Impairment of Real Estate | 0 | 0 |
Depreciation and amortization | 74,981 | 68,298 |
Amortization of deferred financing costs | 2,056 | 2,261 |
Amortization of deferred management fees | 407 | 482 |
Accretion of interest income on investment in loan | (173) | (109) |
Share grants to trustees | 66 | 61 |
Amortization of share-based compensation | 7,791 | 7,393 |
Deferred income taxes | (352) | (781) |
Changes in assets and liabilities: | ||
Hotel and other receivables, net | (6,111) | (11,497) |
Prepaid expense and other assets | 3,611 | 2,625 |
Accounts payable and other liabilities | (18,727) | (4,714) |
Advance deposits and deferred revenue | 870 | 590 |
Accrued interest | (40) | (15) |
Net cash flow provided by operating activities | 145,921 | 132,041 |
Cash flows from investing activities: | ||
Acquisition of hotel and other properties, net | 0 | (504,103) |
Proceeds from the disposal of hotel properties, net | 227,837 | 124,076 |
Payments for (Proceeds from) Deposits on Real Estate Acquisitions | 7,000 | (6,246) |
Improvements and additions to hotel and other properties | (64,695) | (38,581) |
Additions to property and equipment | (222) | (20) |
Releases from restricted cash reserves, net | 3,113 | 1,820 |
Net cash flow provided by (used in) investing activities | 159,033 | (410,562) |
Cash flows from financing activities: | ||
Repurchase of common shares to satisfy employee withholding requirements | (3,800) | (2,599) |
Payments for Repurchase of Equity | 59,841 | |
Borrowings under revolving credit facility | 0 | 258,500 |
Repayments under revolving credit facility | 0 | (258,500) |
Borrowings on term loans | 0 | 175,000 |
Payment of mortgage principal | (155,808) | (25,569) |
Distributions on common shares | (83,204) | (56,469) |
Distributions on Operating Partnership units | (565) | (411) |
Payment of deferred financing costs | (118) | (1,579) |
Distribution to noncontrolling interest | (195) | (1,182) |
Proceeds from issuance of common shares | 0 | 232,814 |
Net cash flow (used in) provided by financing activities | (303,531) | 320,005 |
Net change in cash and cash equivalents | 1,423 | 41,484 |
Cash and cash equivalents, beginning of period | 262,458 | 332,248 |
Cash and cash equivalents, end of period | $ 263,881 | $ 373,732 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization RLJ Lodging Trust (the "Company") was formed as a Maryland real estate investment trust ("REIT") on January 31, 2011. The Company is a self-advised and self-administered REIT that acquires primarily premium-branded, focused-service and compact full-service hotels. The Company qualified and elected to be taxed as a REIT for U.S. federal income tax purposes, commencing with the portion of its taxable year ended December 31, 2011. Substantially all of the Company’s assets are held by, and all of its operations are conducted through, RLJ Lodging Trust, L.P. (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership. As of June 30, 2015 , there were 131,027,618 units of limited partnership interest in the Operating Partnership ("OP units") outstanding and the Company owned, through a combination of direct and indirect interests, 99.3% of the outstanding OP units. As of June 30, 2015 , the Company owned 125 properties, comprised of 123 hotels with approximately 20,400 rooms and two planned hotel conversions, located in 21 states and the District of Columbia, and an interest in one mortgage loan secured by a hotel. The Company owned, through wholly-owned subsidiaries, 100% of the interests in all properties, with the exception of the DoubleTree Metropolitan Hotel-New York City, in which the Company, through wholly-owned subsidiaries, owned a 98.3% controlling interest in a joint venture, DBT Met Hotel Venture, LP, which was formed to engage in hotel operations related to the DoubleTree Metropolitan Hotel. An independent operator manages each property. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company's Annual Report on Form 10-K for the year ended December 31, 2014 contains a discussion of significant accounting policies. There have been no significant changes to the Company's significant accounting policies since December 31, 2014 . Basis of Presentation and Principles of Consolidation The unaudited consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. The unaudited financial statements include adjustments based on management’s estimates (consisting of normal recurring adjustments), which the Company considers necessary for the fair statement of the consolidated balance sheets, statements of operations and comprehensive income, statements of changes in equity and statements of cash flows for the periods presented. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2014 , included in the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2015. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of actual operating results for the entire year. The consolidated financial statements include all subsidiaries controlled by the Company. For controlled subsidiaries that are not wholly-owned, the noncontrolling interests in these subsidiaries are presented separately in the consolidated financial statements. As of June 30, 2015 , the Company consolidated DBT Met Hotel Venture, LP, a majority-owned partnership that has a third-party, noncontrolling 1.7% ownership interest. The third-party partnership interest is included in noncontrolling interest in joint venture on the consolidated balance sheets. Profits and losses are allocated in proportion to each party's respective ownership interest. As of June 30, 2015 , the Company consolidated the Operating Partnership, which is a majority-owned partnership that has a third-party, noncontrolling 0.7% ownership interest. The third-party partnership interest is included in noncontrolling interest in Operating Partnership on the consolidated balance sheets. Profits and losses are allocated in proportion to each party's respective ownership interest. Reclassifications Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income, shareholders’ equity or cash flows. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers , which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and expands disclosures about revenue. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. The Company is currently evaluating whether this ASU will have a material impact on its financial position, results of operations or cash flows. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The Company does not believe this ASU will have a material impact on its financial position, results of operations or cash flows. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 requires reporting entities to reevaluate whether they should consolidate certain legal entities under the revised consolidation model. This standard modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs"), eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs, especially those that have fee arrangements and related party relationships. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company does not believe this ASU will have a material impact on its financial position, results of operations or cash flows. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The guidance is effective for fiscal years beginning after December 15, 2015 with early adoption permitted. The Company does not believe this ASU will have a material impact on its financial position, results of operations or cash flows. |
Acquisition of Hotel and Other
Acquisition of Hotel and Other Properties | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Hotel and Other Properties | Acquisition of Hotel and Other Properties There were no acquisitions during the six months ended June 30, 2015 . During the six months ended June 30, 2014 , the Company acquired a 100% interest in the following properties: Property Location Acquisition Date Management Company Rooms Purchase Price (in thousands) Hyatt House Charlotte Center City Charlotte, NC March 12, 2014 Hyatt Affiliate 163 $ 32,496 Hyatt House Cypress Anaheim Cypress, CA March 12, 2014 Hyatt Affiliate 142 14,753 Hyatt House Emeryville San Francisco Bay Area Emeryville, CA March 12, 2014 Hyatt Affiliate 234 39,274 Hyatt House San Diego Sorrento Mesa San Diego, CA March 12, 2014 Hyatt Affiliate 193 35,985 Hyatt House San Jose Silicon Valley San Jose, CA March 12, 2014 Hyatt Affiliate 164 44,159 Hyatt House San Ramon San Ramon, CA March 12, 2014 Hyatt Affiliate 142 20,833 Hyatt House Santa Clara Santa Clara, CA March 12, 2014 Hyatt Affiliate 150 40,570 Hyatt Market Street The Woodlands The Woodlands, TX March 12, 2014 Hyatt Corporation 70 25,817 Hyatt Place Fremont Silicon Valley Fremont, CA March 12, 2014 Hyatt Affiliate 151 23,525 Hyatt Place Madison Downtown Madison, WI March 12, 2014 Hyatt Affiliate 151 35,088 Courtyard Portland City Center Portland, OR May 22, 2014 Sage Hospitality 256 67,000 Embassy Suites Irvine Orange County Irvine, CA May 22, 2014 Sage Hospitality 293 53,000 Hilton Cabana Miami Beach Miami, FL June 19, 2014 Highgate Hotels 231 71,700 2,340 $ 504,200 The allocation of purchase price for the properties acquired during the six months ended June 30, 2014 was as follows (in thousands): For the six months ended June 30, 2014 Land and land improvements $ 112,467 Buildings and improvements 339,889 Furniture, fixtures and equipment 51,844 Total purchase price $ 504,200 For properties acquired during the six months ended June 30, 2014 , total revenues and net income from the date of acquisition through June 30, 2014 are included in the accompanying consolidated statements of operations for the three and six months ended June 30, 2014 as follows (in thousands): 2014 acquisitions For the three months ended June 30, 2014 For the six months ended June 30, 2014 Revenue $ 25,276 $ 29,807 Net income $ 4,301 $ 3,272 The following unaudited condensed pro forma financial information presents the results of operations as if the 2014 acquisitions had taken place on January 1, 2013 . The unaudited condensed pro forma financial information is not necessarily indicative of what actual results of operations of the Company would have been assuming the 2014 acquisitions had taken place on January 1, 2013 nor does it purport to represent the results of operations for future periods. The unaudited condensed pro forma financial information is as follows (in thousands, except share and per share data): For the three months ended June 30, 2014 For the six months ended June 30, 2014 Revenue $ 305,929 $ 570,325 Net income attributable to common shareholders $ 55,411 $ 73,692 Net income per share attributable to common shareholders - basic $ 0.44 $ 0.60 Net income per share attributable to common shareholders - diluted $ 0.44 $ 0.59 Weighted-average number of common shares - basic 125,260,607 123,510,507 Weighted-average number of common shares - diluted 126,475,051 124,696,925 |
Disposal of Hotel Properties
Disposal of Hotel Properties | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal of Hotel Properties | Disposal of Hotel Properties During the six months ended June 30, 2015 , the Company sold 21 hotel properties in two transactions for a total sales price of approximately $232.7 million . In conjunction with these transactions, the Company recorded a $23.0 million gain on disposal which is included in the accompanying consolidated statement of operations. The following table provides a list of properties that were sold during the six months ended June 30, 2015 : Property Name Location Disposal Date Rooms Courtyard Chicago Schaumburg Schaumburg, IL February 23, 2015 162 Courtyard Detroit Pontiac Bloomfield Pontiac, MI February 23, 2015 110 Courtyard Grand Junction Grand Junction, CO February 23, 2015 136 Courtyard Mesquite Mesquite, TX February 23, 2015 101 Courtyard San Antonio Airport Northstar San Antonio, TX February 23, 2015 78 Courtyard Tampa Brandon Tampa, FL February 23, 2015 90 Fairfield Inn & Suites Merrillville Merrillville, IN February 23, 2015 112 Fairfield Inn & Suites San Antonio Airport San Antonio, TX February 23, 2015 120 Fairfield Inn & Suites Tampa Brandon Tampa, FL February 23, 2015 107 Hampton Inn Merrillville Merrillville, IN February 23, 2015 64 Holiday Inn Grand Rapids Airport Kentwood, MI February 23, 2015 148 Homewood Suites Tampa Brandon Tampa, FL February 23, 2015 126 Marriott Auburn Hills Pontiac at Centerpoint Pontiac, MI February 23, 2015 290 Residence Inn Austin Round Rock Round Rock, TX February 23, 2015 96 Residence Inn Chicago Schaumburg Schaumburg, IL February 23, 2015 125 Residence Inn Detroit Pontiac Auburn Hills Pontiac, MI February 23, 2015 114 Residence Inn Grand Junction Grand Junction, CO February 23, 2015 104 Residence Inn Indianapolis Carmel Carmel, IN February 23, 2015 120 Springhill Suites Chicago Schaumburg Schaumburg, IL February 23, 2015 132 Springhill Suites Indianapolis Carmel Carmel, IN February 23, 2015 126 Fairfield Inn and Suites Valparaiso Valparaiso, IN May 22, 2015 63 Total 2,524 During the six months ended June 30, 2014 , the Company sold 14 hotel properties in four separate transactions for a total sales price of approximately $128.0 million . In conjunction with these transactions, the Company recorded a $1.3 million loss on disposal, which is included in the accompanying consolidated statement of operations. Additionally, the Company defeased the mortgage indebtedness secured by three of the properties that were sold. The cost of the defeasance was approximately $0.8 million , which is included in interest expense in the accompanying consolidated statement of operations. The following table provides a list of properties that were sold during the six months ended June 30, 2014 : Property Name Location Disposal Date Rooms Courtyard Denver Southwest Lakewood Lakewood, CO February 20, 2014 90 Residence Inn Denver Southwest Lakewood Lakewood, CO February 20, 2014 102 Hyatt House Colorado Springs Colorado Springs, CO February 20, 2014 125 SpringHill Suites Gainesville Gainesville, FL February 20, 2014 126 Residence Inn Indianapolis Airport Indianapolis, IN February 20, 2014 95 Fairfield Inn & Suites Indianapolis Airport Indianapolis, IN February 20, 2014 86 Courtyard Grand Rapids Airport Kentwood, MI February 20, 2014 84 Hampton Inn Suites Las Vegas Red Rock Summerlin Las Vegas, NV February 20, 2014 106 Courtyard Austin University Area Austin, TX February 20, 2014 198 Fairfield Inn & Suites Austin University Area Austin, TX February 20, 2014 63 Hyatt House Dallas Richardson Richardson, TX February 20, 2014 130 Hilton Garden Inn St. George St. George, UT February 25, 2014 150 Hilton Mystic Mystic, CT March 26, 2014 182 Holiday Inn Austin NW Arboretum Area Austin, TX June 18, 2014 194 Total 1,731 |
Investment in Hotel and Other P
Investment in Hotel and Other Properties | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Investment in Hotel and Other Properties | Investment in Hotel and Other Properties Investment in hotel and other properties as of June 30, 2015 and December 31, 2014 consisted of the following (in thousands): June 30, 2015 December 31, 2014 Land and land improvements $ 706,932 $ 706,497 Buildings and improvements 3,044,096 3,005,390 Furniture, fixtures and equipment 522,688 498,126 Intangible assets 2,507 2,507 4,276,223 4,212,520 Accumulated depreciation and amortization (767,265 ) (693,717 ) Investment in hotels and other properties, net $ 3,508,958 $ 3,518,803 For the three and six months ended June 30, 2015 , depreciation and amortization expense related to investment in hotel and other properties was approximately $37.7 million and $74.8 million , respectively. For the three and six months ended June 30, 2014 , depreciation and amortization expense related to investment in hotel and other properties was approximately $35.3 million and $68.1 million , respectively. Impairment The Company determined that there was no impairment of any assets for either the three and six months ended June 30, 2015 or 2014 . |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Credit Facilities The Company has in place the following unsecured credit agreements: • $300.0 million revolving credit facility with a scheduled maturity date of November 20, 2016 with a one-year extension option if certain conditions are satisfied (the "Revolver"); • $400.0 million term loan with a scheduled maturity date of August 27, 2018 (the "2013 Five-Year Term Loan"); • $400.0 million term loan with a scheduled maturity date of March 20, 2019 (which was originally scheduled to mature in 2017) (the "2012 Five-Year Term Loan"); • $225.0 million term loan with a scheduled maturity date of November 20, 2019 (the "2012 Seven-Year Term Loan"); and • $150.0 million term loan with a scheduled maturity date of January 22, 2022 (the "2014 Seven-Year Term Loan"). The 2012 Five-Year Term Loan, the 2012 Seven-Year Term Loan, the 2013 Five-Year Term Loan and the 2014 Seven-Year Term loan are collectively the "Term Loans". The Revolver and Term Loans are subject to customary financial covenants. As of June 30, 2015 , the Company was in compliance with all financial covenants. As of and for the three and six months ended June 30, 2015 and 2014 , details of the Revolver and Term Loans are as follows (in thousands): Interest expense for the three months ended June 30, six months ended June 30, Outstanding Borrowings at June 30, 2015 Maturity Date Interest Rate at June 30, 2015 (1) 2015 2014 2015 2014 Revolver (2)(3) $ — November 2016 n/a $ 265 $ 296 $ 525 $ 619 2013 Five-Year Term Loan (4) 400,000 August 2018 3.07% 3,108 3,102 6,145 5,953 2012 Five-Year Term Loan (5) 400,000 March 2019 2.72% 2,530 1,728 4,877 3,150 2012 Seven-Year Term Loan (6) 225,000 November 2019 4.04% 2,296 2,294 4,541 4,550 2014 Seven-Year Term Loan (7)(8) — January 2022 n/a 95 — 95 — Total $ 1,025,000 $ 8,294 $ 7,420 $ 16,183 $ 14,272 (1) Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. (2) At June 30, 2015 there was $300.0 million of borrowing capacity on the Revolver. (3) Includes an unused facility fee of $0.3 million and $0.5 million for the three and six months ended June 30, 2015 , respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2014 , respectively. (4) Includes interest expense related to an interest rate hedge of $1.2 million and $2.5 million for the three and six months ended June 30, 2015 , respectively, and $1.3 million and $2.5 million for the three and six months ended June 30, 2014 , respectively. (5) Includes interest expense related to an interest rate hedge of $0.8 million and $1.4 million for the three and six months ended June 30, 2015 , respectively. (6) Includes interest expense related to an interest rate hedge of $1.0 million and $2.0 million for the three and six months ended June 30, 2015 , respectively, and $1.0 million and $2.0 million for the three and six months ended June 30, 2014 , respectively. (7) At June 30, 2015 there was $150.0 million of borrowing capacity on the 2014 Seven-Year Term Loan. (8) Includes an unused facility fee of $0.1 million and $0.1 million for the three and six months ended June 30, 2015 , respectively. Mortgage Loans As of June 30, 2015 and December 31, 2014 , the Company was subject to the following mortgage loans (in thousands): Principal balance at Lender Number of Assets Encumbered Interest Rate at June 30, 2015 (1) Maturity Date June 30, 2015 December 31, 2014 Barclays Bank 1 5.44% September 2015 (2) 9,939 10,140 PNC Bank (3) 5 2.54% (4) May 2016 (5) 74,000 74,000 Wells Fargo (6) 4 4.19% (4) September 2016 (7) 150,000 150,000 Wells Fargo 4 4.06% (4) October 2017 (7) 143,000 143,000 Capmark Financial Group May 2015 — 10,513 Capmark Financial Group June 2015 — 4,561 Barclays Bank June 2015 — 26,775 Barclays Bank June 2015 — 107,544 Capmark Financial Group July 2015 — 6,214 14 $ 376,939 $ 532,747 (1) Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. (2) The Company is currently evaluating its options for repayment. (3) The five hotels encumbered by the PNC Bank loan are cross-collateralized. (4) Requires payments of interest only until the commencement of the extension period(s). (5) Maturity date may be extended for a one -year term at the Company’s option, subject to certain lender requirements. (6) Two of the four hotels encumbered by the Wells Fargo loan are cross-collateralized. (7) Maturity date may be extended for four one -year terms at the Company’s option, subject to certain lender requirements. Mortgage interest expense for the three and six months ended June 30, 2015 was $3.7 million and $8.8 million , respectively, including interest expense related to interest rate hedges of $1.2 million and $2.4 million , respectively. Mortgage interest expense for the three and six months ended June 30, 2014 was $5.8 million and $11.6 million , respectively, including interest expense related to interest rate hedges of $0.6 million and $1.2 million , respectively. Some mortgage agreements are subject to customary financial covenants. The Company was in compliance with these covenants at June 30, 2015 and December 31, 2014 . |
Derivatives and Hedging
Derivatives and Hedging | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging The Company employs derivative instruments to hedge against interest rate fluctuations. For derivative instruments designated as cash flow hedges, unrealized gains and losses on the effective portion are reported in accumulated other comprehensive loss, a component of shareholders’ equity. Unrealized gains and losses on the ineffective portion of all designated hedges are recognized in earnings in the current period. For derivative instruments not designated as hedging instruments, unrealized gains or losses are recognized in earnings in the current period. At June 30, 2015 and December 31, 2014 , all derivative instruments were designated as cash flow hedges. At June 30, 2015 , the aggregate fair value of interest rate swap assets of $1.4 million was included in prepaid expense and other assets in the accompanying consolidated balance sheets. There were no interest rate swap assets at December 31, 2014 . At June 30, 2015 and December 31, 2014 , the aggregate fair value of interest rate swap liabilities of $18.6 million and $13.6 million , respectively, was included in accounts payable and other liabilities in the accompanying consolidated balance sheets. As of June 30, 2015 and December 31, 2014 , the Company had entered into the following derivative instruments (in thousands): Notional value at Fair value at Hedge type June 30, 2015 December 31, 2014 Hedge interest rate Maturity June 30, 2015 December 31, 2014 Swap-cash flow $ 275,000 $ 275,000 1.12% November 2017 $ (1,683 ) $ (232 ) Swap-cash flow 175,000 175,000 1.56% March 2018 (2,900 ) (2,182 ) Swap-cash flow 175,000 175,000 1.64% March 2018 (3,253 ) (2,596 ) Swap-cash flow 16,500 16,500 1.83% September 2018 (379 ) (315 ) Swap-cash flow 16,500 16,500 1.75% September 2018 (339 ) (270 ) Swap-cash flow 40,500 40,500 1.83% September 2018 (929 ) (772 ) Swap-cash flow 41,500 41,500 1.75% September 2018 (853 ) (678 ) Swap-cash flow 18,000 18,000 1.83% September 2018 (413 ) (343 ) Swap-cash flow 17,000 17,000 1.75% September 2018 (350 ) (278 ) Swap-cash flow 125,000 125,000 2.02% March 2019 (3,561 ) (3,073 ) Swap-cash flow 100,000 100,000 1.94% March 2019 (2,571 ) (2,145 ) Swap-cash flow 125,000 — 1.27% March 2019 (17 ) — Swap-cash flow 143,000 143,000 1.81% October 2020 (1,305 ) (760 ) Swap-cash flow 50,000 — 1.61% June 2021 514 — Swap-cash flow 50,000 — 1.56% June 2021 681 — Swap-cash flow 50,000 — 1.71% June 2021 230 — $ 1,418,000 $ 1,143,000 $ (17,128 ) $ (13,644 ) As of June 30, 2015 and December 31, 2014 , there was approximately $17.1 million and $13.6 million , respectively, in net unrealized losses included in accumulated other comprehensive loss related to interest rate hedges that are effective in offsetting the variable cash flows. There was no ineffectiveness recorded on designated hedges during the three and six month periods ended June 30, 2015 and 2014 . For the three and six months ended June 30, 2015 , approximately $4.2 million and $8.3 million , respectively, of amounts included in accumulated other comprehensive loss were reclassified into interest expense. For the three and six months ended June 30, 2014 , approximately $2.9 million and $5.8 million , respectively, of amounts included in accumulated other comprehensive loss were reclassified into interest expense. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurement Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The fair value hierarchy has three levels of inputs, both observable and unobservable: • Level 1 — Inputs include quoted market prices in an active market for identical assets or liabilities. • Level 2 — Inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data. • Level 3 — Inputs are unobservable and corroborated by little or no market data. Fair Value of Financial Instruments The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methods. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts. The Company used the following market assumptions and/or estimation methods: • Cash and cash equivalents, restricted cash, hotel and other receivables, accounts payable and other liabilities - The carrying amounts reported in the consolidated balance sheets for these financial instruments approximate fair value because of their short maturities. • Variable rate mortgage notes payable and borrowings under the Revolver and Term Loans - The carrying amounts reported in the consolidated balance sheets for these financial instruments approximate fair value, as they bear interest at market rates. The Company determined that its variable rate mortgage notes payable and borrowings under the Revolver and Term Loans are classified in Level 3 of the fair value hierarchy. • Fixed rate mortgage notes payable - The fair value estimated at June 30, 2015 and December 31, 2014 of $10.0 million and $171.1 million , respectively, is calculated based on the net present value of payments over the term of the loans using estimated market rates for similar mortgage loans with similar terms and loan to value ratios. As a result, the Company determined that its fixed rate mortgage notes payable in their entirety are classified in Level 3 of the fair value hierarchy. The carrying value of fixed rate mortgage notes payable at June 30, 2015 and December 31, 2014 was $9.9 million and $165.7 million , respectively. Recurring Fair Value Measurements The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 (in thousands): Fair Value at June 30, 2015 Level 1 Level 2 Level 3 Total Interest rate swap asset $ — $ 1,425 $ — $ 1,425 Interest rate swap liability $ — $ (18,553 ) $ — $ (18,553 ) Total $ — $ (17,128 ) $ — $ (17,128 ) The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 (in thousands): Fair Value at December 31, 2014 Level 1 Level 2 Level 3 Total Interest rate swap asset $ — $ — $ — $ — Interest rate swap liability $ — $ (13,644 ) $ — $ (13,644 ) Total $ — $ (13,644 ) $ — $ (13,644 ) The fair values of the derivative financial instruments are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The Company determined that the significant inputs, such as interest yield curves and discount rates, used to value its derivatives fall within Level 2 of the fair value hierarchy and that the credit valuation adjustments associated with the Company’s counterparties and its own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As of June 30, 2015 , the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code when it filed its U.S. federal tax return for its short taxable year ended December 31, 2011. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its adjusted taxable income to its shareholders, subject to certain adjustments and excluding any net capital gain. The Company’s intention is to adhere to these requirements and maintain the qualification for taxation as a REIT. As a REIT, the Company is not subject to federal corporate income tax on that portion of net income that is currently distributed to its shareholders. However, the Company’s taxable REIT subsidiaries ("TRS") will generally be subject to federal, state, and local income taxes. The Company accounts 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 in the period when the new rate is enacted. The Company had no accruals for tax uncertainties as of June 30, 2015 and December 31, 2014 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Restricted Cash Reserves The Company is obligated to maintain reserve funds for capital expenditures at the hotels (including the periodic replacement or refurbishment of FF&E) as determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents. The management agreements, franchise agreements and/or mortgage loan documents require the Company to reserve restricted cash ranging typically from 3.0% to 5.0% of the individual hotel’s revenues and maintain the reserves in restricted cash reserve escrows. Any unexpended amounts will remain the property of the Company upon termination of the management agreements, franchise agreements or mortgage loan documents. Additionally, some loan agreements require the Company to reserve restricted cash for the periodic payment of real estate taxes and insurance. As of June 30, 2015 and December 31, 2014 , approximately $59.9 million and $63.1 million , respectively, was available in restricted cash reserves for future capital expenditures, real estate taxes and insurance. Litigation Neither the Company nor any of its subsidiaries are currently involved in any regulatory or legal proceedings that management believes will have a material adverse effect on the financial position, operations or liquidity of the Company. Data Breach During the first quarter of 2014, one of the Company's third-party hotel managers notified the Company of a data breach that occurred over a nine-month period ending in December 2013 affecting a number of hotels it manages, including seven hotels that are owned by the Company. During the first quarter of 2015, the same third-party hotel manager notified the Company of a second data breach that occurred over a seven-month period ending in February 2015 affecting a number of hotels it manages, including six hotels owned by the Company. The third-party hotel manager is cooperating with the relevant authorities in their investigations of these criminal cyber-attacks. The Company and its third-party hotel manager are continuing to take steps to assess and further strengthen information security systems. The Company believes that each of the credit card companies impacted may seek to impose fines, fees or assessments in connection with the breach against various parties, including the Company. The Company may also incur other costs, including legal fees and other professional services fees, related to investigating the breach. Because the investigation into each of these matters is ongoing and certain factual and legal questions remain unanswered, the Company is unable to estimate with certainty the total costs, fines, fees or assessments that may be associated with any potential claims; however, the Company currently believes that any amounts that the Company may ultimately be required to pay as a result of this incident will not be material to its financial position, results of operations or cash flows. Management Agreements As of June 30, 2015 , 123 of the Company's hotel properties were operated pursuant to long-term agreements with initial terms ranging from 3 to 30 years. This number includes five Marriott and ten Hyatt hotels that receive the benefits of a franchise agreement pursuant to a management agreement. Each management company receives a base management fee generally between 2.5% and 3.5% of hotel revenues. Management agreements that include the benefits of a franchise agreement incur a base management fee generally between 3.0% and 7.0% of hotel revenues. The management companies are also eligible to receive an incentive management fee if hotel operating income, as defined in the management agreements, exceeds certain thresholds. The incentive management fee is generally calculated as a percentage of hotel operating income after the Company has received a priority return on their investment in the hotel. Management fees are included in management and franchise fee expense in the accompanying consolidated statements of operations. For the three and six months ended June 30, 2015 , the Company incurred management fee expense, including amortization of deferred management fees, of approximately $12.5 million and $23.4 million , respectively. For the three and six months ended June 30, 2014 , the Company incurred management fee expense, including amortization of deferred management fees, of approximately $12.0 million and $21.1 million , respectively. Franchise Agreements As of June 30, 2015 , 108 of the Company’s hotel properties were operated under franchise agreements with initial terms ranging from 10 to 30 years. This number excludes five Marriott and ten Hyatt hotels that receive the benefits of a franchise agreement pursuant to their respective management agreements. Franchise agreements allow the properties to operate under the respective brands. Pursuant to the franchise agreements, the Company pays a royalty fee, generally between 3.0% and 6.0% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs that amount to between 1.0% and 4.3% of room revenue. Certain hotels are also charged a royalty fee between 1.0% and 3.0% of food and beverage revenues. Franchise fees are included in management and franchise fee expense in the accompanying consolidated statements of operations. For the three and six months ended June 30, 2015 , the Company incurred franchise fee expense of approximately $19.2 million and $36.3 million , respectively. For the three and six months ended June 30, 2014 , the Company incurred franchise fee expense of approximately $19.1 million and $34.8 million , respectively. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Equity | Equity On May 1, 2015, the Company's board of trustees authorized a share repurchase program to acquire up to $200.0 million of the Company's common shares. The share repurchase program will expire on April 30, 2016 . During the three months ended June 30, 2015 , the Company repurchased 1,995,177 of its common shares for approximately $59.8 million . As of June 30, 2015 there is approximately $140.2 million remaining for future repurchases of common shares. On May 22, 2014, the Company issued and sold 9,200,000 common shares of beneficial interest, $0.01 par value per share, at a price per share of $26.45, for total gross proceeds of $243.3 million . The Company received aggregate net proceeds of approximately $232.8 million . |
Equity Incentive Plan
Equity Incentive Plan | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Incentive Plan | Equity Incentive Plan On May 1, 2015, the Company’s shareholders approved the 2015 Equity Incentive Plan (the "2015 Plan"), which constitutes an amendment and restatement of the 2011 Equity Incentive Plan (the "2011 Plan"), including an increase in the total number of available shares under the 2015 Plan by 2,500,000 shares and changes to certain other terms of the 2011 Plan. The Company may issue equity-based awards to officers, employees, non-employee trustees and other eligible persons under the 2015 Plan. The 2015 Plan provides for a maximum of 7,500,000 common shares of beneficial interest to be issued in the form of share options, share appreciation rights, restricted share awards, unrestricted share awards, share units, dividend equivalent rights, long-term incentive units, other equity-based awards and cash bonus awards. Share Awards From time to time, the Company may award non-vested restricted shares under the 2015 Plan, as compensation to officers, employees and non-employee trustees. The shares issued to officers and employees vest over a period of time as determined by the board of trustees at the date of grant. The Company recognizes compensation expense for time-based non-vested shares on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of issuance, adjusted for forfeitures. The Company may also award unrestricted shares under the 2015 Plan as compensation to non-employee trustees that would otherwise be paid in cash for their services. The shares issued to trustees are unrestricted and include no vesting conditions. The Company recognizes compensation expense for the unrestricted shares issued in lieu of cash compensation on the date of issuance based upon the fair market value of the shares on that date. A summary of the non-vested shares as of June 30, 2015 is as follows: 2015 Number of Weighted-Average Unvested at January 1, 731,459 $ 21.21 Granted (1) 289,665 32.19 Vested (1) (293,693 ) 20.38 Forfeited (5,327 ) 24.71 Unvested at June 30, 722,104 $ 25.92 (1) Includes 2,168 unrestricted shares issued in lieu of cash compensation to non-employee trustees at a weighted-average grant date fair value of $30.53 . For the three and six months ended June 30, 2015 , the Company recognized approximately $2.6 million and $5.6 million , respectively, of share-based compensation expense related to restricted share awards. For the three and six months ended June 30, 2014 , the Company recognized approximately $2.7 million and $5.2 million , respectively, of share-based compensation expense related to restricted share awards. As of June 30, 2015 , there was $17.8 million of total unrecognized compensation costs related to non-vested share awards and these costs are expected to be primarily recognized over a weighted-average period of 2.8 years. The total fair value of shares vested (calculated as number of shares multiplied by vesting date share price) during the six months ended June 30, 2015 was approximately $9.3 million . Performance Units The Company awarded performance units to certain employees under the 2015 Plan. The performance units vest over a four -year period, including three years of performance-based vesting ("measurement period") plus an additional one year of time-based vesting. As of June 30, 2015 , there were 1.0 million unvested performance units with a weighted-average grant date fair value of $15.36 per performance unit. For the three and six months ended June 30, 2015 , the Company recognized $1.1 million and $2.2 million of share-based compensation expense related to the performance units, respectively. For the three and six months ended June 30, 2014 , the Company recognized $1.1 million and $2.2 million of share-based compensation expense related to the performance units, respectively. As of June 30, 2015 , there was $2.2 million of total unrecognized compensation cost related to the performance units and these costs are expected to be recognized over a weighted-average period of 0.6 years. As of June 30, 2015 , there were 4,957,142 common shares available for future grant under the 2015 Plan. Any performance units that convert into restricted shares will reduce the number of common shares available for future grant under the 2015 Plan. |
Earnings per Common Share
Earnings per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is calculated by dividing income from continuing operations attributable to common shareholders, including gain or loss on disposal of hotel properties, by the weighted-average number of common shares outstanding during the period excluding the weighted-average number of unvested restricted shares outstanding during the period. Diluted earnings per common share is calculated by dividing income from continuing operations attributable to common shareholders, including gain or loss on disposal of hotel properties, by the weighted-average number of common shares outstanding during the period, plus any shares that could potentially be outstanding during the period. Potential shares consist of unvested restricted share grants and unvested performance units, calculated using the treasury stock method. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating shares and are considered in the computation of earnings per share pursuant to the two-class method. If there were any undistributed earnings allocable to participating shares, they would be deducted from net income attributable to common shareholders utilized in the basic and diluted earnings per share calculations. For the three and six months ended June 30, 2015 , $0.1 million and $0.1 million represented undistributed earnings that were allocated to participating shares. For the three and six months ended June 30, 2014 , $0.2 million and $0.1 million , respectively, represented undistributed earnings that were allocated to participating shares. The limited partners’ outstanding limited partnership units in the Operating Partnership (which may be redeemed for common shares of beneficial interest under certain circumstances) have been excluded from the diluted earnings per share calculation as there was no effect on the amounts for the three and six months ended June 30, 2015 and 2014 , since the limited partners’ share of income would also be added back to net income attributable to common shareholders. The computation of basic and diluted earnings per common share is as follows (in thousands, except share and per share data): For the three months ended June 30, For the six months ended June 30, 2015 2014 2015 2014 Numerator: Net income attributable to common shareholders $ 55,991 $ 52,904 $ 103,841 $ 64,836 Less: Dividends paid on unvested restricted shares (238 ) (224 ) (518 ) (470 ) Less: Undistributed earnings attributable to unvested restricted shares (72 ) (184 ) (95 ) (67 ) Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $ 55,681 $ 52,496 $ 103,228 $ 64,299 Denominator: Weighted-average number of common shares - basic 130,670,629 125,260,607 130,969,957 123,510,507 Unvested restricted shares 188,138 308,580 232,682 295,684 Unvested performance units 759,926 905,864 745,293 890,734 Weighted-average number of common shares - diluted 131,618,693 126,475,051 131,947,932 124,696,925 Net income attributable to common shareholders - basic $ 0.43 $ 0.42 $ 0.79 $ 0.52 Net income attributable to common shareholders - diluted $ 0.42 $ 0.42 $ 0.78 $ 0.52 |
Supplemental Information to Sta
Supplemental Information to Statements of Cash Flows | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Information to Statements of Cash Flows | Supplemental Information to Statements of Cash Flows (in thousands) For the six months ended June 30, 2015 2014 Interest paid, net of capitalized interest $ 23,827 $ 26,373 Income taxes paid $ 1,384 $ 1,319 Supplemental investing and financing transactions: In conjunction with the acquisitions, the Company recorded the following: Purchase of real estate $ — $ 504,200 Accounts receivable — 750 Other assets — 1,636 Advance deposits — (509 ) Accounts payable and other liabilities — (1,974 ) Acquisition of hotel and other properties, net $ — $ 504,103 In conjunction with the disposals, the Company recorded the following: Disposal of hotel properties $ 232,700 $ 128,000 Disposition costs (8,577 ) (2,846 ) Operating prorations 3,714 (1,078 ) Proceeds from the disposal of hotel properties, net $ 227,837 $ 124,076 Supplemental non-cash transactions: Accrued capital expenditures $ 1,813 $ — |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In July 2015, the Company drew down the entire $150.0 million available on the 2014 Seven-Year Term Loan. Additionally, the Company borrowed $7.0 million under a mortgage loan encumbered by a hotel property. In July 2015, the Company sold the 80-room Residence Inn South Bend, located in South Bend, IN, for a sales price of $5.8 million. In July 2015, the Company acquired a 100% interest in the 164-room Hyatt Place DC/Downtown/K Street in Washington, DC for a purchase price of $68.0 million. In July 2015, the Company acquired a 100% interest in the 170-room Homewood Suites Seattle/Lynnwood in Lynnwood, WA for a purchase price of $37.9 million. In July 2015, in connection with the end of the performance measurement period, the Company issued 838,934 restricted common shares upon conversion of an equal number of performance units, less 202,734 shares which were withheld to satisfy employee income tax withholding requirements. Half of the restricted common shares vested immediately with the remaining half vesting in July 2016. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The unaudited consolidated financial statements and related notes have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. The unaudited financial statements include adjustments based on management’s estimates (consisting of normal recurring adjustments), which the Company considers necessary for the fair statement of the consolidated balance sheets, statements of operations and comprehensive income, statements of changes in equity and statements of cash flows for the periods presented. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2014 , included in the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2015. Operating results for the three and six months ended June 30, 2015 are not necessarily indicative of actual operating results for the entire year. The consolidated financial statements include all subsidiaries controlled by the Company. For controlled subsidiaries that are not wholly-owned, the noncontrolling interests in these subsidiaries are presented separately in the consolidated financial statements. As of June 30, 2015 , the Company consolidated DBT Met Hotel Venture, LP, a majority-owned partnership that has a third-party, noncontrolling 1.7% ownership interest. The third-party partnership interest is included in noncontrolling interest in joint venture on the consolidated balance sheets. Profits and losses are allocated in proportion to each party's respective ownership interest. As of June 30, 2015 , the Company consolidated the Operating Partnership, which is a majority-owned partnership that has a third-party, noncontrolling 0.7% ownership interest. The third-party partnership interest is included in noncontrolling interest in Operating Partnership on the consolidated balance sheets. Profits and losses are allocated in proportion to each party's respective ownership interest |
Reclassifications | Reclassifications Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income, shareholders’ equity or cash flows. |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the amounts of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers , which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and expands disclosures about revenue. The guidance is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. The Company is currently evaluating whether this ASU will have a material impact on its financial position, results of operations or cash flows. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The Company does not believe this ASU will have a material impact on its financial position, results of operations or cash flows. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 requires reporting entities to reevaluate whether they should consolidate certain legal entities under the revised consolidation model. This standard modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs"), eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs, especially those that have fee arrangements and related party relationships. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company does not believe this ASU will have a material impact on its financial position, results of operations or cash flows. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The guidance is effective for fiscal years beginning after December 15, 2015 with early adoption permitted. The Company does not believe this ASU will have a material impact on its financial position, results of operations or cash flows. |
Acquisition of Hotel and Othe23
Acquisition of Hotel and Other Properties (Tables) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Business Combinations [Abstract] | ||
Schedule of properties acquired through wholly-owned subsidiaries, which were funded by capital contributions | During the six months ended June 30, 2014 , the Company acquired a 100% interest in the following properties: Property Location Acquisition Date Management Company Rooms Purchase Price (in thousands) Hyatt House Charlotte Center City Charlotte, NC March 12, 2014 Hyatt Affiliate 163 $ 32,496 Hyatt House Cypress Anaheim Cypress, CA March 12, 2014 Hyatt Affiliate 142 14,753 Hyatt House Emeryville San Francisco Bay Area Emeryville, CA March 12, 2014 Hyatt Affiliate 234 39,274 Hyatt House San Diego Sorrento Mesa San Diego, CA March 12, 2014 Hyatt Affiliate 193 35,985 Hyatt House San Jose Silicon Valley San Jose, CA March 12, 2014 Hyatt Affiliate 164 44,159 Hyatt House San Ramon San Ramon, CA March 12, 2014 Hyatt Affiliate 142 20,833 Hyatt House Santa Clara Santa Clara, CA March 12, 2014 Hyatt Affiliate 150 40,570 Hyatt Market Street The Woodlands The Woodlands, TX March 12, 2014 Hyatt Corporation 70 25,817 Hyatt Place Fremont Silicon Valley Fremont, CA March 12, 2014 Hyatt Affiliate 151 23,525 Hyatt Place Madison Downtown Madison, WI March 12, 2014 Hyatt Affiliate 151 35,088 Courtyard Portland City Center Portland, OR May 22, 2014 Sage Hospitality 256 67,000 Embassy Suites Irvine Orange County Irvine, CA May 22, 2014 Sage Hospitality 293 53,000 Hilton Cabana Miami Beach Miami, FL June 19, 2014 Highgate Hotels 231 71,700 2,340 $ 504,200 | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The allocation of purchase price for the properties acquired during the six months ended June 30, 2014 was as follows (in thousands): For the six months ended June 30, 2014 Land and land improvements $ 112,467 Buildings and improvements 339,889 Furniture, fixtures and equipment 51,844 Total purchase price $ 504,200 | |
Schedule of total revenues and net loss from the properties acquired | For properties acquired during the six months ended June 30, 2014 , total revenues and net income from the date of acquisition through June 30, 2014 are included in the accompanying consolidated statements of operations for the three and six months ended June 30, 2014 as follows (in thousands): 2014 acquisitions For the three months ended June 30, 2014 For the six months ended June 30, 2014 Revenue $ 25,276 $ 29,807 Net income $ 4,301 $ 3,272 | |
Schedule of unaudited condensed pro forma financial information | The unaudited condensed pro forma financial information is as follows (in thousands, except share and per share data): For the three months ended June 30, 2014 For the six months ended June 30, 2014 Revenue $ 305,929 $ 570,325 Net income attributable to common shareholders $ 55,411 $ 73,692 Net income per share attributable to common shareholders - basic $ 0.44 $ 0.60 Net income per share attributable to common shareholders - diluted $ 0.44 $ 0.59 Weighted-average number of common shares - basic 125,260,607 123,510,507 Weighted-average number of common shares - diluted 126,475,051 124,696,925 |
Disposal of Hotel Properties (T
Disposal of Hotel Properties (Tables) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Discontinued operations | ||
Schedule of property disposed during period | The following table provides a list of properties that were sold during the six months ended June 30, 2015 : Property Name Location Disposal Date Rooms Courtyard Chicago Schaumburg Schaumburg, IL February 23, 2015 162 Courtyard Detroit Pontiac Bloomfield Pontiac, MI February 23, 2015 110 Courtyard Grand Junction Grand Junction, CO February 23, 2015 136 Courtyard Mesquite Mesquite, TX February 23, 2015 101 Courtyard San Antonio Airport Northstar San Antonio, TX February 23, 2015 78 Courtyard Tampa Brandon Tampa, FL February 23, 2015 90 Fairfield Inn & Suites Merrillville Merrillville, IN February 23, 2015 112 Fairfield Inn & Suites San Antonio Airport San Antonio, TX February 23, 2015 120 Fairfield Inn & Suites Tampa Brandon Tampa, FL February 23, 2015 107 Hampton Inn Merrillville Merrillville, IN February 23, 2015 64 Holiday Inn Grand Rapids Airport Kentwood, MI February 23, 2015 148 Homewood Suites Tampa Brandon Tampa, FL February 23, 2015 126 Marriott Auburn Hills Pontiac at Centerpoint Pontiac, MI February 23, 2015 290 Residence Inn Austin Round Rock Round Rock, TX February 23, 2015 96 Residence Inn Chicago Schaumburg Schaumburg, IL February 23, 2015 125 Residence Inn Detroit Pontiac Auburn Hills Pontiac, MI February 23, 2015 114 Residence Inn Grand Junction Grand Junction, CO February 23, 2015 104 Residence Inn Indianapolis Carmel Carmel, IN February 23, 2015 120 Springhill Suites Chicago Schaumburg Schaumburg, IL February 23, 2015 132 Springhill Suites Indianapolis Carmel Carmel, IN February 23, 2015 126 Fairfield Inn and Suites Valparaiso Valparaiso, IN May 22, 2015 63 Total 2,524 | The following table provides a list of properties that were sold during the six months ended June 30, 2014 : Property Name Location Disposal Date Rooms Courtyard Denver Southwest Lakewood Lakewood, CO February 20, 2014 90 Residence Inn Denver Southwest Lakewood Lakewood, CO February 20, 2014 102 Hyatt House Colorado Springs Colorado Springs, CO February 20, 2014 125 SpringHill Suites Gainesville Gainesville, FL February 20, 2014 126 Residence Inn Indianapolis Airport Indianapolis, IN February 20, 2014 95 Fairfield Inn & Suites Indianapolis Airport Indianapolis, IN February 20, 2014 86 Courtyard Grand Rapids Airport Kentwood, MI February 20, 2014 84 Hampton Inn Suites Las Vegas Red Rock Summerlin Las Vegas, NV February 20, 2014 106 Courtyard Austin University Area Austin, TX February 20, 2014 198 Fairfield Inn & Suites Austin University Area Austin, TX February 20, 2014 63 Hyatt House Dallas Richardson Richardson, TX February 20, 2014 130 Hilton Garden Inn St. George St. George, UT February 25, 2014 150 Hilton Mystic Mystic, CT March 26, 2014 182 Holiday Inn Austin NW Arboretum Area Austin, TX June 18, 2014 194 Total 1,731 |
Investment in Hotel and Other25
Investment in Hotel and Other Properties (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of investment in hotel and other properties | Investment in hotel and other properties as of June 30, 2015 and December 31, 2014 consisted of the following (in thousands): June 30, 2015 December 31, 2014 Land and land improvements $ 706,932 $ 706,497 Buildings and improvements 3,044,096 3,005,390 Furniture, fixtures and equipment 522,688 498,126 Intangible assets 2,507 2,507 4,276,223 4,212,520 Accumulated depreciation and amortization (767,265 ) (693,717 ) Investment in hotels and other properties, net $ 3,508,958 $ 3,518,803 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Revolver and Term Loans | As of and for the three and six months ended June 30, 2015 and 2014 , details of the Revolver and Term Loans are as follows (in thousands): Interest expense for the three months ended June 30, six months ended June 30, Outstanding Borrowings at June 30, 2015 Maturity Date Interest Rate at June 30, 2015 (1) 2015 2014 2015 2014 Revolver (2)(3) $ — November 2016 n/a $ 265 $ 296 $ 525 $ 619 2013 Five-Year Term Loan (4) 400,000 August 2018 3.07% 3,108 3,102 6,145 5,953 2012 Five-Year Term Loan (5) 400,000 March 2019 2.72% 2,530 1,728 4,877 3,150 2012 Seven-Year Term Loan (6) 225,000 November 2019 4.04% 2,296 2,294 4,541 4,550 2014 Seven-Year Term Loan (7)(8) — January 2022 n/a 95 — 95 — Total $ 1,025,000 $ 8,294 $ 7,420 $ 16,183 $ 14,272 (1) Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. (2) At June 30, 2015 there was $300.0 million of borrowing capacity on the Revolver. (3) Includes an unused facility fee of $0.3 million and $0.5 million for the three and six months ended June 30, 2015 , respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2014 , respectively. (4) Includes interest expense related to an interest rate hedge of $1.2 million and $2.5 million for the three and six months ended June 30, 2015 , respectively, and $1.3 million and $2.5 million for the three and six months ended June 30, 2014 , respectively. (5) Includes interest expense related to an interest rate hedge of $0.8 million and $1.4 million for the three and six months ended June 30, 2015 , respectively. (6) Includes interest expense related to an interest rate hedge of $1.0 million and $2.0 million for the three and six months ended June 30, 2015 , respectively, and $1.0 million and $2.0 million for the three and six months ended June 30, 2014 , respectively. (7) At June 30, 2015 there was $150.0 million of borrowing capacity on the 2014 Seven-Year Term Loan. (8) Includes an unused facility fee of $0.1 million and $0.1 million for the three and six months ended June 30, 2015 , respectively. |
Schedule of mortgage loans | As of June 30, 2015 and December 31, 2014 , the Company was subject to the following mortgage loans (in thousands): Principal balance at Lender Number of Assets Encumbered Interest Rate at June 30, 2015 (1) Maturity Date June 30, 2015 December 31, 2014 Barclays Bank 1 5.44% September 2015 (2) 9,939 10,140 PNC Bank (3) 5 2.54% (4) May 2016 (5) 74,000 74,000 Wells Fargo (6) 4 4.19% (4) September 2016 (7) 150,000 150,000 Wells Fargo 4 4.06% (4) October 2017 (7) 143,000 143,000 Capmark Financial Group May 2015 — 10,513 Capmark Financial Group June 2015 — 4,561 Barclays Bank June 2015 — 26,775 Barclays Bank June 2015 — 107,544 Capmark Financial Group July 2015 — 6,214 14 $ 376,939 $ 532,747 (1) Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. (2) The Company is currently evaluating its options for repayment. (3) The five hotels encumbered by the PNC Bank loan are cross-collateralized. (4) Requires payments of interest only until the commencement of the extension period(s). (5) Maturity date may be extended for a one -year term at the Company’s option, subject to certain lender requirements. (6) Two of the four hotels encumbered by the Wells Fargo loan are cross-collateralized. (7) Maturity date may be extended for four one -year terms at the Company’s option, subject to certain lender requirements. |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of interest rate swaps and caps | As of June 30, 2015 and December 31, 2014 , the Company had entered into the following derivative instruments (in thousands): Notional value at Fair value at Hedge type June 30, 2015 December 31, 2014 Hedge interest rate Maturity June 30, 2015 December 31, 2014 Swap-cash flow $ 275,000 $ 275,000 1.12% November 2017 $ (1,683 ) $ (232 ) Swap-cash flow 175,000 175,000 1.56% March 2018 (2,900 ) (2,182 ) Swap-cash flow 175,000 175,000 1.64% March 2018 (3,253 ) (2,596 ) Swap-cash flow 16,500 16,500 1.83% September 2018 (379 ) (315 ) Swap-cash flow 16,500 16,500 1.75% September 2018 (339 ) (270 ) Swap-cash flow 40,500 40,500 1.83% September 2018 (929 ) (772 ) Swap-cash flow 41,500 41,500 1.75% September 2018 (853 ) (678 ) Swap-cash flow 18,000 18,000 1.83% September 2018 (413 ) (343 ) Swap-cash flow 17,000 17,000 1.75% September 2018 (350 ) (278 ) Swap-cash flow 125,000 125,000 2.02% March 2019 (3,561 ) (3,073 ) Swap-cash flow 100,000 100,000 1.94% March 2019 (2,571 ) (2,145 ) Swap-cash flow 125,000 — 1.27% March 2019 (17 ) — Swap-cash flow 143,000 143,000 1.81% October 2020 (1,305 ) (760 ) Swap-cash flow 50,000 — 1.61% June 2021 514 — Swap-cash flow 50,000 — 1.56% June 2021 681 — Swap-cash flow 50,000 — 1.71% June 2021 230 — $ 1,418,000 $ 1,143,000 $ (17,128 ) $ (13,644 ) |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis | The following table presents the Company’s fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 (in thousands): Fair Value at June 30, 2015 Level 1 Level 2 Level 3 Total Interest rate swap asset $ — $ 1,425 $ — $ 1,425 Interest rate swap liability $ — $ (18,553 ) $ — $ (18,553 ) Total $ — $ (17,128 ) $ — $ (17,128 ) |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restricted share awards | |
Equity Incentive Plan | |
Summary of the non-vested shares | A summary of the non-vested shares as of June 30, 2015 is as follows: 2015 Number of Weighted-Average Unvested at January 1, 731,459 $ 21.21 Granted (1) 289,665 32.19 Vested (1) (293,693 ) 20.38 Forfeited (5,327 ) 24.71 Unvested at June 30, 722,104 $ 25.92 (1) Includes 2,168 unrestricted shares issued in lieu of cash compensation to non-employee trustees at a weighted-average grant date fair value of $30.53 . |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per common share | The computation of basic and diluted earnings per common share is as follows (in thousands, except share and per share data): For the three months ended June 30, For the six months ended June 30, 2015 2014 2015 2014 Numerator: Net income attributable to common shareholders $ 55,991 $ 52,904 $ 103,841 $ 64,836 Less: Dividends paid on unvested restricted shares (238 ) (224 ) (518 ) (470 ) Less: Undistributed earnings attributable to unvested restricted shares (72 ) (184 ) (95 ) (67 ) Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $ 55,681 $ 52,496 $ 103,228 $ 64,299 Denominator: Weighted-average number of common shares - basic 130,670,629 125,260,607 130,969,957 123,510,507 Unvested restricted shares 188,138 308,580 232,682 295,684 Unvested performance units 759,926 905,864 745,293 890,734 Weighted-average number of common shares - diluted 131,618,693 126,475,051 131,947,932 124,696,925 Net income attributable to common shareholders - basic $ 0.43 $ 0.42 $ 0.79 $ 0.52 Net income attributable to common shareholders - diluted $ 0.42 $ 0.42 $ 0.78 $ 0.52 |
Supplemental Information to S31
Supplemental Information to Statements of Cash Flows (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental information to statements of cash flows | For the six months ended June 30, 2015 2014 Interest paid, net of capitalized interest $ 23,827 $ 26,373 Income taxes paid $ 1,384 $ 1,319 Supplemental investing and financing transactions: In conjunction with the acquisitions, the Company recorded the following: Purchase of real estate $ — $ 504,200 Accounts receivable — 750 Other assets — 1,636 Advance deposits — (509 ) Accounts payable and other liabilities — (1,974 ) Acquisition of hotel and other properties, net $ — $ 504,103 In conjunction with the disposals, the Company recorded the following: Disposal of hotel properties $ 232,700 $ 128,000 Disposition costs (8,577 ) (2,846 ) Operating prorations 3,714 (1,078 ) Proceeds from the disposal of hotel properties, net $ 227,837 $ 124,076 Supplemental non-cash transactions: Accrued capital expenditures $ 1,813 $ — |
Organization (Details)
Organization (Details) - Jun. 30, 2015 | propertyloanstatehotelroomshares |
Sale of Stock | |
OP units outstanding (in units) | shares | 131,027,618 |
Ownership interest in OP units through a combination of direct and indirect interests (as a percent) | 99.30% |
Number of properties owned | property | 125 |
Number of Real Estate Properties Operated under Management Agreements | 123 |
Number of hotel rooms owned | room | 20,374 |
Number of hotels planned for conversion | 2 |
Number of states in which hotels owned by the entity are located | state | 21 |
Number of mortgage loans owned | loan | 1 |
Ownership interest in assets (as a percent) | 100.00% |
Doubletree Metropolitan Hotel New York City | |
Sale of Stock | |
Ownership interest in assets (as a percent) | 98.30% |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)hotel | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)hotel | Jun. 30, 2014USD ($) | |
Management Agreements [Abstract] | ||||
Number of Real Estate Properties Operated under Management Agreements | 123 | 123 | ||
Owned Property Management Costs | $ | $ 12.5 | $ 12 | $ 23.4 | $ 21.1 |
Franchise Agreements | ||||
Number of Real Estate Properties Operated under Franchise Agreements | 108 | 108 | ||
Franchise Costs | $ | $ 19.2 | $ 19.1 | $ 36.3 | $ 34.8 |
Minimum [Member] | ||||
Management Agreements [Abstract] | ||||
Management Agreement Term | 3 years | |||
Base Management Fee as Percentage of Hotel Revenues | 2.50% | |||
Base Manchise Fee as Percentage of Hotel Revenues | 3.00% | |||
Franchise Agreements | ||||
Franchise Agreements Term | 10 years | |||
Franchise Agreements, Royalty Fee as Percentage of Room Revenue | 3.00% | |||
Franchise Agreements, Additional Fees for Marketing Central Reservation Systems and Other Franchisor Costs as Percentage of Room Revenue | 1.00% | |||
Franchise Agreements, Royalty Fee as Percentage of Food and Beverage Revenue | 1.00% | |||
Maximum [Member] | ||||
Management Agreements [Abstract] | ||||
Management Agreement Term | 30 years | |||
Base Management Fee as Percentage of Hotel Revenues | 3.50% | |||
Base Manchise Fee as Percentage of Hotel Revenues | 7.00% | |||
Franchise Agreements | ||||
Franchise Agreements Term | 30 years | |||
Franchise Agreements, Royalty Fee as Percentage of Room Revenue | 6.00% | |||
Franchise Agreements, Additional Fees for Marketing Central Reservation Systems and Other Franchisor Costs as Percentage of Room Revenue | 4.30% | |||
Franchise Agreements, Royalty Fee as Percentage of Food and Beverage Revenue | 3.00% | |||
Consolidated Joint Venture [Member] | ||||
Noncontrolling Interest | ||||
Ownership interest of non controlling third party | 1.70% | 1.70% | ||
Partnership Interest [Member] | ||||
Noncontrolling Interest | ||||
Ownership interest of non controlling third party | 0.70% | 0.70% |
Acquisition of Hotel and Othe34
Acquisition of Hotel and Other Properties (Details) $ / shares in Units, $ in Thousands | Jun. 19, 2014USD ($)room | May. 22, 2014USD ($)room | Mar. 12, 2014USD ($)room | Jun. 30, 2015USD ($)room$ / shares | Jun. 30, 2014USD ($)room | Jun. 30, 2015USD ($)room | Jun. 30, 2014USD ($)room$ / sharesshares | Dec. 31, 2014USD ($) |
Acquisition of Hotel Properties | ||||||||
% Interest | 100.00% | |||||||
Rooms | room | 20,374 | 20,374 | ||||||
Intangible assets | $ 2,507 | $ 2,507 | $ 2,507 | |||||
Total revenues and net income (loss) from hotels acquired | ||||||||
Revenue | 301,252 | $ 295,047 | 571,657 | $ 531,420 | ||||
Net income (loss) | 56,410 | $ 53,361 | 104,512 | 65,346 | ||||
Unaudited condensed pro forma financial information | ||||||||
Revenue | 305,929 | 570,325 | ||||||
Net income attributable to common shareholders | $ 55,411 | $ 73,692 | ||||||
Net income per share attributable to common shareholders - basic (in dollars per share) | $ / shares | $ 0.44 | $ 0.60 | ||||||
Net income per share attributable to common shareholders - diluted (in dollars per share) | $ / shares | $ 0.44 | $ 0.59 | ||||||
Weighted-average number of shares outstanding - basic (in shares) | shares | 123,510,507 | |||||||
Weighted-average number of shares outstanding - diluted (in shares) | shares | 124,696,925 | |||||||
2014 Acquisitions | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 2,340 | 2,340 | ||||||
Land and land improvements | $ 112,467 | $ 112,467 | ||||||
Buildings and improvements | 339,889 | 339,889 | ||||||
Furniture, fixtures and equipment | 51,844 | 51,844 | ||||||
Total purchase price | $ 504,200 | $ 504,200 | ||||||
Total revenues and net income (loss) from hotels acquired | ||||||||
Net income (loss) | 4,301 | 3,272 | ||||||
Hyatt House Charlotte Center City | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 163 | |||||||
Purchase Price | $ 32,496 | |||||||
Hyatt House Cypress Anaheim | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 142 | |||||||
Purchase Price | $ 14,753 | |||||||
Hyatt House Emeryville San Francisco Bay Area | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 234 | |||||||
Purchase Price | $ 39,274 | |||||||
Hyatt House San Diego Sorrento Mesa | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 193 | |||||||
Purchase Price | $ 35,985 | |||||||
Hyatt House San Jose Silicon Valley | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 164 | |||||||
Purchase Price | $ 44,159 | |||||||
Hyatt House San Ramon | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 142 | |||||||
Purchase Price | $ 20,833 | |||||||
Hyatt House Santa Clara | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 150 | |||||||
Purchase Price | $ 40,570 | |||||||
Hyatt Market Street The Woodlands | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 70 | |||||||
Purchase Price | $ 25,817 | |||||||
Hyatt Place Fremont Silicon Valley | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 151 | |||||||
Purchase Price | $ 23,525 | |||||||
Hyatt Place Madison Downtown | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 151 | |||||||
Purchase Price | $ 35,088 | |||||||
Courtyard Portland City Center | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 256 | |||||||
Purchase Price | $ 67,000 | |||||||
Embassy Suites Irvine Orange County | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 293 | |||||||
Purchase Price | $ 53,000 | |||||||
Hilton Cabana Miami Beach | ||||||||
Acquisition of Hotel Properties | ||||||||
Rooms | room | 231 | |||||||
Purchase Price | $ 71,700 | |||||||
2013 Acquisitions | ||||||||
Acquisition of Hotel Properties | ||||||||
Total purchase price | 504,200 | 504,200 | ||||||
Total revenues and net income (loss) from hotels acquired | ||||||||
Revenue | $ 25,276 | $ 29,807 |
Disposal of Hotel Properties (D
Disposal of Hotel Properties (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | |
Discontinued operations | ||||
Disposal Group, Number of Properties Disposed During Period | 21 | 14 | ||
Gain (loss) on disposal of hotel properties | $ 672 | $ 1,260 | $ 22,970 | $ (1,297) |
Noncash Divestiture of Real Estate | $ 232,700 | $ 128,000 |
Disposal of Hotel Properties (N
Disposal of Hotel Properties (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Hotel properties disposed, Number | 21 | 14 | ||
Disposal of hotel properties | $ 232,700 | $ 128,000 | ||
Loss on disposal | $ (672) | $ (1,260) | (22,970) | $ 1,297 |
Cost of defeasance | $ 800 |
Disposal of Hotel Properties (S
Disposal of Hotel Properties (Schedule of Properties Disposed) (Details) - room | May. 22, 2015 | Feb. 23, 2015 | Jun. 19, 2014 | Mar. 26, 2014 | Feb. 25, 2014 | Feb. 20, 2014 |
Courtyard Chicago Schaumburg [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 162 | |||||
Courtyard Denver Southwest Lakewood | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 90 | |||||
Residence Inn Denver Southwest Lakewood | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 102 | |||||
Hyatt House Colorado Springs | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 125 | |||||
SpringHill Suites Gainesville | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 126 | |||||
Residence Inn Indianapolis Airport | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 95 | |||||
Fairfield Inn & Suites Indianapolis Airport | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 86 | |||||
Courtyard Grand Rapids Airport | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 84 | |||||
Hampton Inn Suites Las Vegas Red Rock Summerlin | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 106 | |||||
Courtyard Austin University Area | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 198 | |||||
Fairfield Inn & Suites Austin University Area | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 63 | |||||
Hyatt House Dallas Richardson | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 130 | |||||
Hilton Garden Inn St. George | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 150 | |||||
Hilton Mystic | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 182 | |||||
Holiday Inn Austin NW Arboretum Area | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 194 | |||||
Courtyard Detroit Pontiac Bloomfield [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 110 | |||||
Courtyard Grand Junction [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 136 | |||||
Courtyard Mesquite [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 101 | |||||
Courtyard San Antonio Northstar [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 78 | |||||
Courtyard Tampa Brandon [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 90 | |||||
Fairfield Inn Merrillville [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 112 | |||||
Fairfield Inn San Antonio Airport [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 120 | |||||
Fairfield Inn Tampa Brandon [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 107 | |||||
Hampton Inn Merrillville [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 64 | |||||
Holiday Inn Grand Rapids [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 148 | |||||
Homewood Suites Tampa Brandon [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 126 | |||||
Marriott Pontiac Auburn Hills [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 290 | |||||
Residence Inn Austin Round Rock [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 96 | |||||
Residence Inn Chicago Schaumburg [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 125 | |||||
Residence Inn Detroit Pontiac [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 114 | |||||
Residence Inn Grand Junction [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 104 | |||||
Residence Inn Indianapolis Carmel [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 120 | |||||
SpringHill Suites Chicago Schaumburg [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 132 | |||||
SpringHill Suites Indianapolis Carmel [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 126 | |||||
Fairfield Inn Valparaiso [Member] | ||||||
Discontinued operations | ||||||
Property disposed, number of rooms | 63 |
Investment in Hotel and Other38
Investment in Hotel and Other Properties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||||
Land and land improvements | $ 706,932 | $ 706,932 | $ 706,497 | ||
Buildings and improvements | 3,044,096 | 3,044,096 | 3,005,390 | ||
Furniture, fixtures and equipment | 522,688 | 522,688 | 498,126 | ||
Intangible assets | 2,507 | 2,507 | 2,507 | ||
Total | 4,276,223 | 4,276,223 | |||
Accumulated depreciation and amortization | (767,265) | (767,265) | (693,717) | ||
Investment in hotel and other properties, net | 3,508,958 | 3,508,958 | $ 3,518,803 | ||
Depreciation and amortization expense related to investment in hotel and other properties, excluding discontinued operations | $ (37,700) | $ (35,300) | (74,800) | $ (68,100) | |
Impairment loss | $ 0 | $ 0 | $ 0 |
Debt (Details)
Debt (Details) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2015USD ($)asset | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)hotelasset | Jun. 30, 2014USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||||
Debt | |||||||||
Mortgage loans | $ 376,939,000 | $ 376,939,000 | $ 532,747,000 | ||||||
Interest Expense, Debt, Excluding Amortization | 3,700,000 | $ 5,800,000 | 8,800,000 | $ 11,600,000 | |||||
Interest expense, hedge | $ 1,200,000 | $ 600,000 | $ 2,400,000 | $ 1,200,000 | |||||
Secured Debt | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | 14 | 14 | |||||||
Mortgage loans | $ 376,939,000 | $ 376,939,000 | 532,747,000 | ||||||
Secured Debt | Capmark Financial Group, lender 1 | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | |||||||||
Interest rate (as a percent) | [1] | ||||||||
Mortgage loans | $ 0 | $ 0 | 10,513,000 | ||||||
Secured Debt | Capmark Financial Group, lender 2 | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | |||||||||
Interest rate (as a percent) | [1] | ||||||||
Mortgage loans | $ 0 | $ 0 | 4,561,000 | ||||||
Secured Debt | Barclay's Bank, lender 1 | |||||||||
Debt | |||||||||
Mortgage loans | $ 0 | $ 0 | 107,544,000 | ||||||
Secured Debt | Barclay's Bank, lender 13 | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | |||||||||
Interest rate (as a percent) | [1] | ||||||||
Mortgage loans | $ 0 | $ 0 | 26,775,000 | ||||||
Secured Debt | Capmark Financial Group, lender 3 | |||||||||
Debt | |||||||||
Mortgage loans | $ 0 | $ 0 | 6,214,000 | ||||||
Secured Debt | Barclay's Bank, lender 17 | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | 1 | 1 | |||||||
Interest rate (as a percent) | [1] | 5.44% | 5.44% | ||||||
Mortgage loans | $ 9,939,000 | $ 9,939,000 | 10,140,000 | ||||||
Secured Debt | PNC Bank | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | [2] | 5 | 5 | ||||||
Interest rate (as a percent) | [1],[3] | 2.54% | 2.54% | ||||||
Mortgage loans | $ 74,000,000 | [4] | $ 74,000,000 | [4] | 74,000,000 | ||||
Additional maturity term | 1 year | ||||||||
Number of hotels encumbered by loans that are cross-collateralized | hotel | 5 | ||||||||
Secured Debt | Wells Fargo lender 6 | |||||||||
Debt | |||||||||
Number of Assets Encumbered | asset | 4 | 4 | |||||||
Interest rate (as a percent) | [1],[3],[5] | 4.18755% | 4.18755% | ||||||
Mortgage loans | $ 150,000,000 | [6] | $ 150,000,000 | [6] | 150,000,000 | ||||
Secured Debt | Barclay's Bank, lender 18 | |||||||||
Debt | |||||||||
Mortgage loans | 143,000,000 | 143,000,000 | $ 143,000,000 | ||||||
Revolver | |||||||||
Debt | |||||||||
Maximum borrowings | 300,000,000 | 300,000,000 | |||||||
Unsecured Term Loan Due August 27, 2018 | |||||||||
Debt | |||||||||
Maximum borrowings | $ 400,000,000 | $ 400,000,000 | |||||||
Interest rate (as a percent) | [7],[8] | 3.07% | 3.07% | ||||||
Unsecured Term Loan Maturity Date March 20, 2019 | |||||||||
Debt | |||||||||
Maximum borrowings | $ 400,000,000 | $ 400,000,000 | |||||||
Interest rate (as a percent) | [8] | 2.72% | 2.72% | ||||||
Seven-Year Term Loan | |||||||||
Debt | |||||||||
Maximum borrowings | $ 225,000,000 | $ 225,000,000 | |||||||
Interest rate (as a percent) | [8],[9] | 4.04% | 4.04% | ||||||
Unsecured Term Loan Due January 22, 2022 [Member] | |||||||||
Debt | |||||||||
Maximum borrowings | $ 150,000,000 | ||||||||
[1] | Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. | ||||||||
[2] | The five hotels encumbered by the PNC Bank loan are cross-collateralized. | ||||||||
[3] | The Company is currently evaluating its options for repayment. | ||||||||
[4] | Maturity date may be extended for a one-year term at the Company’s option, subject to certain lender requirements. | ||||||||
[5] | Two of the four hotels encumbered by the Wells Fargo loan are cross-collateralized. | ||||||||
[6] | Maturity date may be extended for four one-year terms at the Company’s option, subject to certain lender requirements. | ||||||||
[7] | Includes interest expense related to an interest rate hedge of $1.2 million and $2.5 million for the three and six months ended June 30, 2015, respectively, and $1.3 million and $2.5 million for the three and six months ended June 30, 2014, respectively. | ||||||||
[8] | Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. | ||||||||
[9] | Includes an unused facility fee of $0.3 million and $0.5 million for the three and six months ended June 30, 2015, respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2014, respectively. |
Debt (Revolver and Term Loans)
Debt (Revolver and Term Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Debt | |||||
Outstanding borrowings | $ 1,025,000 | $ 1,025,000 | |||
Interest expense | 16,183 | $ 14,272 | |||
Revolver | |||||
Debt | |||||
Outstanding borrowings | [1] | 0 | 0 | ||
Interest expense | 265 | $ 296 | 525 | 619 | |
Unused commitment fee | 300 | 300 | 500 | 500 | |
Unsecured Term Loan Due August 27, 2018 | |||||
Debt | |||||
Outstanding borrowings | [2] | $ 400,000 | $ 400,000 | ||
Interest rate (as a percent) | [2],[3] | 3.07% | 3.07% | ||
Interest expense | $ 3,108 | 3,102 | $ 6,145 | 5,953 | |
Unsecured Term Loan Maturity Date March 20, 2019 | |||||
Debt | |||||
Outstanding borrowings | $ 400,000 | $ 400,000 | |||
Interest rate (as a percent) | [3] | 2.72% | 2.72% | ||
Interest expense | $ 2,530 | 1,728 | $ 4,877 | 3,150 | |
Seven-Year Term Loan | |||||
Debt | |||||
Outstanding borrowings | [4] | $ 225,000 | $ 225,000 | ||
Interest rate (as a percent) | [3],[4] | 4.04% | 4.04% | ||
Interest expense | $ 2,296 | 2,294 | $ 4,541 | 4,550 | |
Unsecured Term Loan Due January 22, 2022 [Member] | |||||
Debt | |||||
Outstanding borrowings | [4] | 0 | 0 | ||
Interest expense | 95 | 0 | 95 | 0 | |
Unused commitment fee | 100 | 100 | |||
Interest Rate Contract | Unsecured Term Loan Due August 27, 2018 | |||||
Debt | |||||
Interest expense | 1,200 | 1,300 | 2,500 | 2,500 | |
Interest Rate Contract | Unsecured Term Loan Maturity Date March 20, 2019 | |||||
Debt | |||||
Interest expense | 800 | 1,400 | |||
Interest Rate Contract | Seven-Year Term Loan | |||||
Debt | |||||
Interest expense | $ 1,000 | $ 1,000 | $ 2,000 | $ 2,000 | |
[1] | At June 30, 2015 there was $300.0 million of borrowing capacity on the Revolver. | ||||
[2] | Includes interest expense related to an interest rate hedge of $1.2 million and $2.5 million for the three and six months ended June 30, 2015, respectively, and $1.3 million and $2.5 million for the three and six months ended June 30, 2014, respectively. | ||||
[3] | Interest rate at June 30, 2015 gives effect to interest rate hedges, as applicable. | ||||
[4] | Includes an unused facility fee of $0.3 million and $0.5 million for the three and six months ended June 30, 2015, respectively, and $0.3 million and $0.5 million for the three and six months ended June 30, 2014, respectively. |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Financial Instruments: Derivatives and Hedging | |||||
Unrealized gains (losses) included in accumulated other comprehensive loss | $ 17,128,000 | $ 17,128,000 | $ 13,644,000 | ||
Amount of ineffective hedges | 0 | 0 | |||
Interest rate swap | |||||
Financial Instruments: Derivatives and Hedging | |||||
Fair value assets | 1,400,000 | 1,400,000 | |||
Interest rate swap liability | (18,600,000) | (18,600,000) | (13,600,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type one | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 275,000,000 | $ 275,000,000 | 275,000,000 | ||
Hedge interest rate (as a percent) | 1.1175% | 1.1175% | |||
Fair value assets | $ (1,683,000) | $ (1,683,000) | (232,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type two | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 175,000,000 | $ 175,000,000 | 175,000,000 | ||
Hedge interest rate (as a percent) | 1.5625% | 1.5625% | |||
Interest rate swap liability | $ (2,900,000) | $ (2,900,000) | (2,182,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type three | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 175,000,000 | $ 175,000,000 | 175,000,000 | ||
Hedge interest rate (as a percent) | 1.635% | 1.635% | |||
Interest rate swap liability | $ (3,253,000) | $ (3,253,000) | (2,596,000) | ||
Designated as Hedging Instrument | ISwap-cash flow, hedge type four | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 16,500,000 | $ 16,500,000 | 16,500,000 | ||
Hedge interest rate (as a percent) | 1.825% | 1.825% | |||
Interest rate swap liability | $ (379,000) | $ (379,000) | (315,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type five | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 16,500,000 | $ 16,500,000 | 16,500,000 | ||
Hedge interest rate (as a percent) | 1.751% | 1.751% | |||
Interest rate swap liability | $ (339,000) | $ (339,000) | (270,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type six | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 40,500,000 | $ 40,500,000 | 40,500,000 | ||
Hedge interest rate (as a percent) | 1.825% | 1.825% | |||
Interest rate swap liability | $ (929,000) | $ (929,000) | (772,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type seven | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 41,500,000 | $ 41,500,000 | 41,500,000 | ||
Hedge interest rate (as a percent) | 1.751% | 1.751% | |||
Interest rate swap liability | $ (853,000) | $ (853,000) | (678,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type eight | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 18,000,000 | $ 18,000,000 | 18,000,000 | ||
Hedge interest rate (as a percent) | 1.825% | 1.825% | |||
Interest rate swap liability | $ (413,000) | $ (413,000) | (343,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type nine | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 17,000,000 | $ 17,000,000 | 17,000,000 | ||
Hedge interest rate (as a percent) | 1.751% | 1.751% | |||
Interest rate swap liability | $ (350,000) | $ (350,000) | (278,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type ten | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 125,000,000 | $ 125,000,000 | 125,000,000 | ||
Hedge interest rate (as a percent) | 2.018% | 2.018% | |||
Interest rate swap liability | $ (3,561,000) | $ (3,561,000) | (3,073,000) | ||
Designated as Hedging Instrument | Swap-cash flow, hedge type eleven | |||||
Financial Instruments: Derivatives and Hedging | |||||
Notional value | $ 100,000,000 | $ 100,000,000 | 100,000,000 | ||
Hedge interest rate (as a percent) | 1.944% | 1.944% | |||
Interest rate swap liability | $ (2,571,000) | $ (2,571,000) | (2,145,000) | ||
Designated as Hedging Instrument | Interest Rate, Swap Hedge, Type Thirteen [Member] | |||||
Financial Instruments: Derivatives and Hedging | |||||
Interest rate swap liability | (17,000) | (17,000) | |||
Designated as Hedging Instrument | Interest Rate, Swap Hedge, Type Twelve [Member] [Member] | |||||
Financial Instruments: Derivatives and Hedging | |||||
Interest rate swap liability | (1,305,000) | (1,305,000) | $ (760,000) | ||
Designated as Hedging Instrument | Interest Rate, Swap Hedge, Type Fourteen [Member] | |||||
Financial Instruments: Derivatives and Hedging | |||||
Interest rate swap liability | 514,000 | 514,000 | |||
Designated as Hedging Instrument | Interest Rate, Swap Hedge, Type Fifteen [Member] | |||||
Financial Instruments: Derivatives and Hedging | |||||
Interest rate swap liability | 681,000 | 681,000 | |||
Designated as Hedging Instrument | Interest Rate, Swap Hedge, Type Sixteen [Member] | |||||
Financial Instruments: Derivatives and Hedging | |||||
Interest rate swap liability | 230,000 | 230,000 | |||
Interest Expense | |||||
Financial Instruments: Derivatives and Hedging | |||||
Amount reclassified from accumulated other comprehensive income into interest expense | $ 4,200,000 | $ 2,931,000 | $ 8,300,000 | $ 5,785,000 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of Real Estate | $ 0 | $ 0 | $ 0 | |
Interest rate swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap asset | 1,400 | |||
Interest rate swap liability | (18,600) | $ (13,600) | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fixed rate mortgage notes payable | 10,000 | 171,100 | ||
Carrying value of fixed rate mortgage notes payable | 9,900 | 165,700 | ||
Recurring | Level 2 | Interest rate swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap asset | 1,425 | 0 | ||
Interest rate swap liability | (18,553) | (13,644) | ||
Total | (17,128) | (13,644) | ||
Recurring | Total | Interest rate swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap asset | 1,425 | 0 | ||
Interest rate swap liability | (18,553) | (13,644) | ||
Total | $ (17,128) | $ (13,644) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Minimum percentage of adjusted taxable income to be currently distributed to owners to qualify as a REIT | 90.00% | |
Accruals for tax uncertainties | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum restricted cash reserve escrows to be maintained as a percentage of the hotel's revenue | 3.00% | |
Maximum restricted cash reserve escrows to be maintained as percentage of hotel's revenue | 5.00% | |
Restricted cash reserves for future capital expenditures, real estate taxes and insurance | $ 59,941 | $ 63,054 |
Commitments and Contingencies M
Commitments and Contingencies Management Agreements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other Commitments [Line Items] | ||||
Owned Property Management Costs | $ 12.5 | $ 12 | $ 23.4 | $ 21.1 |
Maximum [Member] | ||||
Other Commitments [Line Items] | ||||
Management Agreement Term | 30 years | |||
Base Management Fee as Percentage of Hotel Revenues | 3.50% | |||
Base Manchise Fee as Percentage of Hotel Revenues | 7.00% | |||
Minimum [Member] | ||||
Other Commitments [Line Items] | ||||
Management Agreement Term | 3 years | |||
Base Management Fee as Percentage of Hotel Revenues | 2.50% | |||
Base Manchise Fee as Percentage of Hotel Revenues | 3.00% |
Commitments and Contingencies F
Commitments and Contingencies Franchise Agreements (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)hotel | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)hotel | Jun. 30, 2014USD ($) | |
Other Commitments [Line Items] | ||||
Number of Real Estate Properties Operated under Franchise Agreements | 108 | 108 | ||
Franchise Costs | $ | $ 19.2 | $ 19.1 | $ 36.3 | $ 34.8 |
Minimum [Member] | ||||
Other Commitments [Line Items] | ||||
Franchise Agreements Term | 10 years | |||
Franchise Agreements, Royalty Fee as Percentage of Room Revenue | 3.00% | |||
Franchise Agreements, Additional Fees for Marketing Central Reservation Systems and Other Franchisor Costs as Percentage of Room Revenue | 1.00% | |||
Franchise Agreements, Royalty Fee as Percentage of Food and Beverage Revenue | 1.00% | |||
Maximum [Member] | ||||
Other Commitments [Line Items] | ||||
Franchise Agreements Term | 30 years | |||
Franchise Agreements, Royalty Fee as Percentage of Room Revenue | 6.00% | |||
Franchise Agreements, Additional Fees for Marketing Central Reservation Systems and Other Franchisor Costs as Percentage of Room Revenue | 4.30% | |||
Franchise Agreements, Royalty Fee as Percentage of Food and Beverage Revenue | 3.00% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 16, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Equity [Abstract] | ||||
Stock Repurchase Program, Authorized Amount | $ 200,000 | |||
Stock Repurchase Program Expiration Date | Apr. 30, 2016 | |||
Stock Repurchased During Period, Shares | (1,995,177) | |||
Sale of common stock (shares) | 9,200,000 | |||
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Gross proceeds from issuance of shares | $ 243,300 | |||
Proceeds from issuance of common shares | $ 0 | 232,814 | ||
Stock Repurchased During Period, Value | (59,841) | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 140,200 | |||
Stock Issued During Period, Value, New Issues | $ 232,814 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Equity Incentive Plan | |||||
Maximum number of common shares of beneficial interest to be issued (in shares) | 7,500,000 | 7,500,000 | |||
Summary of non-vested shares/units | |||||
Granted (in shares) | 2,168 | ||||
Weighted Average Grant Date Fair Value | |||||
Granted (in dollars per share) | $ 30.53 | ||||
Other Disclosures | |||||
Share-based compensation expense | $ 66 | $ 61 | |||
Restricted share awards | |||||
Summary of non-vested shares/units | |||||
Unvested at the beginning of the period (in shares) | 731,459 | ||||
Granted (in shares) | [1] | 289,665 | |||
Vested (in shares) | [1] | (293,693) | |||
Forfeited (in shares) | (5,327) | ||||
Unvested at the end of the period (in shares) | 722,104 | 722,104 | |||
Weighted Average Grant Date Fair Value | |||||
Unvested at the beginning of the period (in dollars per share) | $ 21.21 | ||||
Granted (in dollars per share) | [1] | 32.19 | |||
Vested (in dollars per share) | [1] | 20.38 | |||
Forfeited (in dollars per share) | 24.71 | ||||
Unvested at the end of the period (in dollars per share) | $ 25.92 | $ 25.92 | |||
Other Disclosures | |||||
Share-based compensation expense | $ 2,600 | $ 2,700 | $ 5,600 | 5,200 | |
Total unrecognized compensation costs | $ 17,800 | $ 17,800 | |||
Weighted-average period of recognition of unrecognized share-based compensation expense | 2 years 9 months 18 days | ||||
Total fair value of shares vested | $ 9,300 | ||||
Performance Units | |||||
Summary of non-vested shares/units | |||||
Unvested at the end of the period (in shares) | 1,000,000 | 1,000,000 | |||
Weighted Average Grant Date Fair Value | |||||
Unvested at the end of the period (in dollars per share) | $ 15.36 | $ 15.36 | |||
Other Disclosures | |||||
Share-based compensation expense | $ 1,100 | $ 1,100 | $ 2,200 | $ 2,200 | |
Total unrecognized compensation costs | $ 2,200 | $ 2,200 | |||
Weighted-average period of recognition of unrecognized share-based compensation expense | 7 months 12 days | ||||
Vesting period | 4 years | ||||
Measurement period | 3 years | ||||
Time-based vesting period | 1 year | ||||
Common shares available for future grant (in share) | 4,957,142 | 4,957,142 | |||
[1] | Includes 2,168 unrestricted shares issued in lieu of cash compensation to non-employee trustees at a weighted-average grant date fair value of $30.53. |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | $ 72,000 | $ 200,000 | $ 95,000 | $ 100,000 |
Numerator: | ||||
Net income attributable to common shareholders | 55,991,000 | 52,904,000 | 103,841,000 | 64,836,000 |
Less: Dividends paid on unvested restricted shares | (238,000) | (224,000) | (518,000) | (470,000) |
Undistributed Earnings, Basic | (72,000) | (184,000) | (95,000) | (67,000) |
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares | $ 55,681,000 | $ 52,496,000 | $ 103,228,000 | $ 64,299,000 |
Denominator: | ||||
Weighted-average number of common shares - basic (in shares) | 130,670,629 | 125,260,607 | 130,969,957 | 123,510,507 |
Unvested restricted shares (in shares) | 188,138 | 308,580 | 232,682 | 295,684 |
Unvested performance units (in shares) | 759,926 | 905,864 | 745,293 | 890,734 |
Weighted-average number of common shares - diluted (in shares) | 131,618,693 | 126,475,051 | 131,947,932 | 124,696,925 |
Basic per common share data: | ||||
Net income per share attributable to common shareholders (in dollars per share) | $ 0.43 | $ 0.42 | $ 0.79 | $ 0.52 |
Diluted per common share data: | ||||
Net income per share attributable to common shareholders (in dollars per share) | $ 0.42 | $ 0.42 | $ 0.78 | $ 0.52 |
Supplemental Information to S50
Supplemental Information to Statements of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid, net of capitalized interest | $ 23,827 | $ 26,373 |
Income taxes paid | 1,384 | 1,319 |
In conjunction with the acquisitions, the Company recorded the following: | ||
Purchase of real estate | 0 | 504,200 |
Accounts receivable | 0 | 750 |
Other assets | 0 | 1,636 |
Advance deposits | 0 | (509) |
Accounts payable and other liabilities | 0 | (1,974) |
Acquisition of hotel and other properties, net | 0 | 504,103 |
In conjunction with the disposals, the Company recorded the following: | ||
Disposal of hotel properties | (232,700) | (128,000) |
Disposition costs | (8,577) | (2,846) |
Operating prorations | 3,714 | (1,078) |
Proceeds from the disposal of hotel properties, net | 227,837 | 124,076 |
Supplemental non-cash transactions: | ||
Accrued capital expenditures | $ 1,813 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Derivative Contract [Domain] - Hedging Designation [Domain] - Debt Instrument, Lender [Domain] $ in Thousands | Jul. 28, 2015shares | Jun. 30, 2015USD ($)propertystateasset | Dec. 31, 2014USD ($) |
Subsequent Events | |||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | shares | 838,934 | ||
Number of states in which hotels owned by the entity are located | state | 21 | ||
Number of properties owned | property | 125 | ||
Mortgage loans | $ 376,939 | $ 532,747 | |
Shares Paid for Tax Withholding for Share Based Compensation | shares | 202,734 | ||
Secured Debt | |||
Subsequent Events | |||
Number of Assets Encumbered | asset | 14 | ||
Mortgage loans | $ 376,939 | $ 532,747 |