Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2018
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number: 001-31775

ASHFORD HOSPITALITY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland
 
86-1062192
(State or other jurisdiction of incorporation or organization)
 
(IRS employer identification number)
 
 
 
14185 Dallas Parkway, Suite 1100
 
 
Dallas, Texas
 
75254
(Address of principal executive offices)
 
(Zip code)

(972) 490-9600
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
 
Accelerated filer
þ
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
Smaller reporting company
¨
 
 
 
Emerging growth company
¨
    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) if the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes þ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $0.01 par value per share
 
98,612,117
(Class)
 
Outstanding at August 7, 2018


ASHFORD HOSPITALITY TRUST, INC
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2018
TABLE OF CONTENTS


 
 
 


Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS (unaudited)
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share amounts)
 
June 30, 2018
 
December 31, 2017
Assets
 
Investments in hotel properties, net
$
4,109,720

 
$
4,035,915

Cash and cash equivalents
417,359

 
354,805

Restricted cash
135,419

 
116,787

Marketable securities
24,072

 
26,926

Accounts receivable, net of allowance of $540 and $770, respectively
57,852

 
44,257

Inventories
4,277

 
4,244

Investment in unconsolidated entities
4,204

 
2,955

Deferred costs, net
2,746

 
2,777

Prepaid expenses
23,052

 
19,269

Derivative assets, net
3,209

 
2,010

Other assets
18,993

 
14,152

Intangible assets, net
9,884

 
9,943

Due from third-party hotel managers
20,860

 
17,387

Assets held for sale
—

 
18,423

Total assets
$
4,831,647

 
$
4,669,850

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Indebtedness, net
$
3,948,020

 
$
3,696,300

Accounts payable and accrued expenses
141,986

 
132,401

Dividends and distributions payable
27,240

 
25,045

Due to Ashford Inc., net
17,748

 
15,146

Due to related party, net
388

 
1,067

Due to third-party hotel managers
2,454

 
2,431

Intangible liabilities, net
15,661

 
15,839

Other liabilities
19,708

 
18,376

Liabilities related to assets held for sale
—

 
13,977

Total liabilities
4,173,205

 
3,920,582

Commitments and contingencies (note 14)


 


Redeemable noncontrolling interests in operating partnership
146,249

 
116,122

Equity:
 
 
 
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
 
 
 
Series D Cumulative Preferred Stock, 2,389,393 shares issued and outstanding at June 30, 2018 and December 31, 2017
24

 
24

Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at June 30, 2018 and December 31, 2017
48

 
48

Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at June 30, 2018 and December 31, 2017
62

 
62

Series H Cumulative Preferred Stock, 3,800,000 shares issued and outstanding at June 30, 2018 and December 31, 2017
38

 
38

Series I Cumulative Preferred Stock, 5,400,000 shares issued and outstanding at June 30, 2018 and December 31, 2017
54

 
54

Common stock, $0.01 par value, 400,000,000 shares authorized, 98,612,117 and 97,409,113 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
986

 
974

Additional paid-in capital
1,793,869

 
1,784,997

Accumulated deficit
(1,283,516
)
 
(1,153,697
)
Total stockholders’ equity of the Company
511,565

 
632,500

Noncontrolling interests in consolidated entities
628

 
646

Total equity
512,193

 
633,146

Total liabilities and equity
$
4,831,647

 
$
4,669,850

See Notes to Consolidated Financial Statements.

2
Table of Contents

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Revenue
 
 
 
Rooms
$
309,381

 
$
311,205

 
$
580,074

 
$
587,910

Food and beverage
60,429

 
63,842

 
115,473

 
126,692

Other hotel revenue
18,558

 
14,948

 
34,049

 
28,714

Total hotel revenue
388,368

 
389,995

 
729,596

 
743,316

Other
796

 
675

 
1,775

 
1,063

Total revenue
389,164

 
390,670

 
731,371

 
744,379

Expenses
 
 
 
 
 
 
 
Hotel operating expenses:
 
 
 
 
 
 
 
Rooms
64,214

 
65,034

 
123,300

 
124,907

Food and beverage
40,156

 
42,276

 
78,621

 
84,446

Other expenses
116,254

 
113,824

 
222,637

 
225,557

Management fees
14,371

 
14,247

 
27,108

 
27,073

Total hotel expenses
234,995

 
235,381

 
451,666

 
461,983

Property taxes, insurance, and other
20,230

 
18,766

 
38,589

 
37,099

Depreciation and amortization
64,566

 
60,547

 
127,613

 
125,245

Impairment charges
19

 
—

 
1,679

 
—

Transaction costs
9

 
8

 
11

 
11

Advisory services fee
23,079

 
14,229

 
40,156

 
24,870

Corporate general and administrative
3,231

 
3,254

 
5,360

 
8,424

Total expenses
346,129

 
332,185

 
665,074

 
657,632

Operating income (loss)
43,035

 
58,485

 
66,297

 
86,747

Equity in earnings (loss) of unconsolidated entities
1,170

 
(2,138
)
 
582

 
(2,901
)
Interest income
883

 
546

 
1,629

 
754

Gain (loss) on sale of hotel properties
412

 
14,092

 
403

 
14,009

Other income (expense)
206

 
(146
)
 
282

 
(3,266
)
Interest expense and amortization of premiums and loan costs
(58,206
)
 
(54,956
)
 
(112,949
)
 
(110,261
)
Write-off of premiums, loan costs and exit fees
(5,694
)
 
(1,575
)
 
(7,744
)
 
(1,629
)
Unrealized gain (loss) on marketable securities
(268
)
 
(531
)
 
(826
)
 
(3,877
)
Unrealized gain (loss) on derivatives
(1,916
)
 
(1,743
)
 
(1,587
)
 
(325
)
Income (loss) before income taxes
(20,378
)
 
12,034

 
(53,913
)
 
(20,749
)
Income tax (expense) benefit
(2,973
)
 
(1,606
)
 
(2,087
)
 
(760
)
Net income (loss)
(23,351
)
 
10,428

 
(56,000
)
 
(21,509
)
(Income) loss from consolidated entities attributable to noncontrolling interest
(20
)
 
(13
)
 
18

 
18

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership
5,065

 
(231
)
 
11,405

 
6,262

Net income (loss) attributable to the Company
(18,306
)
 
10,184

 
(44,577
)
 
(15,229
)
Preferred dividends
(10,644
)
 
(10,956
)
 
(21,288
)
 
(21,912
)
Net income (loss) attributable to common stockholders
$
(28,950
)
 
$
(772
)
 
$
(65,865
)
 
$
(37,141
)
 
 
 
 
 
 
 
 
Income (loss) per share - basic and diluted:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
(0.30
)
 
$
(0.01
)
 
$
(0.69
)
 
$
(0.40
)
Weighted average common shares outstanding – basic
96,889

 
95,320

 
96,137

 
95,086

Diluted:
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
(0.30
)
 
$
(0.01
)
 
$
(0.69
)
 
$
(0.40
)
Weighted average common shares outstanding – diluted
96,889

 
95,320

 
96,137

 
95,086

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.12

 
$
0.12

 
$
0.24

 
$
0.24

See Notes to Consolidated Financial Statements.

3
Table of Contents

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Net income (loss)
$
(23,351
)
 
$
10,428

 
$
(56,000
)
 
$
(21,509
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Total other comprehensive income (loss)
—

 
—

 
—

 
—

Comprehensive income (loss)
(23,351
)
 
10,428

 
(56,000
)
 
(21,509
)
Less: Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities
(20
)
 
(13
)
 
18

 
18

Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership
5,065

 
(231
)
 
11,405

 
6,262

Comprehensive income (loss) attributable to the Company
$
(18,306
)
 
$
10,184

 
$
(44,577
)
 
$
(15,229
)
See Notes to Consolidated Financial Statements.

4
Table of Contents

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EQUITY
(unaudited, in thousands)
 
Preferred Stock
 
 
Additional
Paid-in
Capital
 
Accumulated
Deficit
 
Noncontrolling
Interests In
Consolidated
Entities
 
Total
 
Redeemable Noncontrolling
Interests in
Operating
Partnership
 
Series D
 
Series F
 
Series G
 
Series H
 
Series I
 
Common Stock
 
 
 
 
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
Balance at January 1, 2018
2,389

 
$
24

 
4,800

 
$
48

 
6,200

 
$
62

 
3,800

 
$
38

 
5,400

 
$
54

 
97,409

 
$
974

 
$
1,784,997

 
$
(1,153,697
)
 
$
646

 
$
633,146

 
$
116,122

Purchases of common stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(249
)
 
(3
)
 
(1,595
)
 
—

 
—

 
(1,598
)
 
—

Equity-based compensation
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
10,411

 
—

 
—

 
10,411

 
6,392

Forfeitures of restricted shares
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(38
)
 
—

 
—

 
—

 
—

 
—

 
—

Issuance of restricted shares/units
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,490

 
15

 
108

 
—

 
—

 
123

 
53

Cost for issuances of preferred shares
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(52
)
 
—

 
—

 
(52
)
 
—

Dividends declared - common shares
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(23,918
)
 
—

 
(23,918
)
 
—

Dividends declared - preferred shares- Series D
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(2,524
)
 
—

 
(2,524
)
 
—

Dividends declared – preferred shares- Series F
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(4,425
)
 
—

 
(4,425
)
 
—

Dividends declared – preferred shares- Series G
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(5,715
)
 
—

 
(5,715
)
 
—

Dividends declared – preferred shares- Series H
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(3,562
)
 
—

 
(3,562
)
 
—

Dividends declared – preferred shares- Series I
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(5,062
)
 
—

 
(5,062
)
 
—

Distributions to noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(4,949
)
Redemption value adjustment
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(40,036
)
 
—

 
(40,036
)
 
40,036

Net income (loss)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(44,577
)
 
(18
)
 
(44,595
)
 
(11,405
)
Balance at June 30, 2018
2,389

 
$
24

 
4,800

 
$
48

 
6,200

 
$
62

 
3,800

 
$
38

 
5,400

 
$
54

 
98,612

 
$
986

 
$
1,793,869

 
$
(1,283,516
)
 
$
628

 
$
512,193

 
$
146,249

See Notes to Consolidated Financial Statements.

5
Table of Contents

ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
Six Months Ended June 30,
 
2018
 
2017
Cash Flows from Operating Activities
 
 
 
Net income (loss)
$
(56,000
)
 
$
(21,509
)
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
 
 
 
Depreciation and amortization
127,613

 
125,245

Impairment charges
1,679

 
—

Amortization of intangibles
(119
)
 
(119
)
Recognition of deferred income
(288
)
 
(317
)
Bad debt expense
909

 
681

Deferred income tax expense (benefit)
490

 
(196
)
Equity in (earnings) loss of unconsolidated entities
(582
)
 
2,901

(Gain) loss on sale of hotel properties, net
(403
)
 
(14,009
)
Realized and unrealized (gain) loss on marketable securities
677

 
4,003

Purchases of marketable securities
(11,161
)
 
(34,776
)
Sales of marketable securities
13,338

 
64,688

Net settlement of trading derivatives
309

 
(1,242
)
Realized and unrealized (gain) loss on derivatives
1,587

 
3,858

Amortization of loan costs and premiums, write-off of premiums, loan costs and exit fees
15,549

 
8,418

Equity-based compensation
16,803

 
4,138

Changes in operating assets and liabilities, exclusive of the effect of acquisitions and dispositions of hotel properties:
 
 
 
Accounts receivable and inventories
(14,679
)
 
(10,641
)
Prepaid expenses and other assets
(7,206
)
 
(6,816
)
Accounts payable and accrued expenses
11,248

 
17,387

Due to/from related party
(1,686
)
 
830

Due to/from third-party hotel managers
(3,389
)
 
(6,279
)
Due to/from Braemar OP, net
—

 
(489
)
Due to/from Ashford Inc., net
2,602

 
(2,123
)
Other liabilities
1,698

 
1,547

Net cash provided by (used in) operating activities
98,989

 
135,180

Cash Flows from Investing Activities
 
 
 
Investment in unconsolidated entity
(667
)
 
(650
)
Acquisition of hotel properties and assets, net of cash and restricted acquired
(111,777
)
 
(110
)
Improvements and additions to hotel properties
(117,744
)
 
(110,057
)
Net proceeds from sales of assets and hotel properties
40,938

 
105,267

Liquidation of AQUA U.S. Fund
—

 
50,942

Payments for initial franchise fees
(105
)
 
(225
)
Proceeds from property insurance
651

 
2,192

Net cash provided by (used in) investing activities
(188,704
)
 
47,359

Cash Flows from Financing Activities
 
 
 
Borrowings on indebtedness
2,733,201

 
180,800

Repayments of indebtedness
(2,455,813
)
 
(244,233
)
Payments for loan costs and exit fees
(54,438
)
 
(5,790
)
Payments for dividends and distributions
(47,837
)
 
(49,122
)
Purchases of common stock
(1,598
)
 
(1,274
)
Payments for derivatives
(3,095
)
 
(550
)
Payments from preferred stock offering
(52
)
 
—

Other
53

 
94

Net cash provided by (used in) financing activities
170,421

 
(120,075
)
Net increase (decrease) in cash, cash equivalents and restricted cash
80,706

 
62,464

Cash, cash equivalents and restricted cash at beginning of period
472,072

 
492,473

Cash, cash equivalents and restricted cash and at end of period
$
552,778


$
554,937


6
Table of Contents

 
Six Months Ended June 30,
 
2018
 
2017
Supplemental Cash Flow Information
 
 
 
Interest paid
$
106,238

 
$
103,159

Income taxes paid (refunded)
1,154

 
1,455

Supplemental Disclosure of Non-Cash Investing and Financing Activity
 
 
 
Accrued but unpaid capital expenditures
$
15,971

 
$
12,818

Non-cash dividends paid
123

 
—

Dividends and distributions declared but not paid
27,240

 
26,185

Supplemental Disclosure of Cash, Cash Equivalents and Restricted Cash
 
 
 
Cash and cash equivalents at beginning of period
$
354,805

 
$
347,091

Cash and cash equivalents at beginning of period included in assets held for sale
78

 
976

Restricted cash at beginning of period
116,787

 
144,014

Restricted cash at beginning of period included in assets held for sale
402

 
392

Cash, cash equivalents and restricted cash at beginning of period
$
472,072

 
$
492,473

 
 
 
 
Cash and cash equivalents at end of period
$
417,359

 
$
404,435

Restricted cash at end of period
135,419

 
150,502

Cash, cash equivalents and restricted cash at end of period
$
552,778

 
$
554,937

See Notes to Consolidated Financial Statements.

7
Table of Contents
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)



1. Organization and Description of Business
Ashford Hospitality Trust, Inc., together with its subsidiaries (“Ashford Trust”), is a real estate investment trust (“REIT”) focused on investing in full-service hotels in the upscale and upper upscale segments in domestic and international markets that have revenue per available room (“RevPAR”) generally less than twice the U.S. national average, and in all methods including direct real estate, equity, and debt. We own our lodging investments and conduct our business through Ashford Hospitality Limited Partnership (“Ashford Trust OP”), our operating partnership. Ashford OP General Partner LLC, a wholly-owned subsidiary of Ashford Trust, serves as the sole general partner of our operating partnership. In this report, terms such as the “Company,” “we,” “us,” or “our” refer to Ashford Hospitality Trust, Inc. and all entities included in its consolidated financial statements.
We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC”), a subsidiary of Ashford Inc., through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.
As of June 30, 2018, we owned interests in the following assets:
•
118 consolidated hotel properties, including 116 directly owned and two owned through a majority-owned investment in a consolidated entity, which represent 24,930 total rooms (or 24,903 net rooms excluding those attributable to our partner);
•
90 hotel condominium units at WorldQuest Resort in Orlando, Florida (“WorldQuest”);
•
a 28.4% ownership in Ashford Inc. common stock with a carrying value of $1.3 million and a fair value of $38.8 million; and
•
a 16.3% ownership in OpenKey with a carrying value of $2.9 million.
For federal income tax purposes, we have elected to be treated as a REIT, which imposes limitations related to operating hotels. As of June 30, 2018, our 118 hotel properties were leased or owned by our wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries for federal income tax purposes (collectively, these subsidiaries are referred to as “Ashford TRS”). Ashford TRS then engages third-party or affiliated hotel management companies to operate the hotels under management contracts. Hotel operating results related to these properties are included in the consolidated statements of operations.
As of June 30, 2018, Remington Lodging & Hospitality, LLC, together with its affiliates (“Remington Lodging”), which is beneficially wholly owned by Mr. Monty J. Bennett, our Chairman, and Mr. Archie Bennett, Jr., our Chairman Emeritus, managed 80 of our 118 hotel properties and WorldQuest Resort. Third-party management companies managed the remaining hotel properties.
2. Significant Accounting Policies
Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements include the accounts of Ashford Hospitality Trust, Inc., its majority-owned subsidiaries, and its majority-owned joint ventures in which it has a controlling interest. All significant inter-company accounts and transactions between consolidated entities have been eliminated in these consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2017 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2018.
Ashford Trust OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Ashford Trust OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Ashford Trust OP General Partner LLC, its general partner. As such, we consolidate Ashford Trust OP.

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three and six months ended June 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.
The following acquisitions and dispositions affect reporting comparability of our consolidated financial statements:
Hotel Property 
 
Location 
 
Type
 
Date
Renaissance
 
Portsmouth, VA
 
Disposition
 
February 1, 2017
Embassy Suites
 
Syracuse, NY
 
Disposition
 
March 6, 2017
Crowne Plaza Ravinia
 
Atlanta, GA
 
Disposition
 
June 29, 2017
SpringHill Suites
 
Glen Allen, VA
 
Disposition
 
February 20, 2018
SpringHill Suites
 
Centreville, VA
 
Disposition
 
May 1, 2018
Residence Inn Tampa
 
Tampa, FL
 
Disposition
 
May 10, 2018
Hilton Alexandria Old Town
 
Alexandria, VA
 
Acquisition
 
June 29, 2018
Use of Estimates—The preparation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Restricted Cash—Restricted cash includes reserves for debt service, real estate taxes, and insurance, as well as excess cash flow deposits and reserves for furniture, fixtures, and equipment replacements of approximately 4% to 6% of property revenue for certain hotels, as required by certain management or mortgage debt agreement restrictions and provisions.
Impairment of Investments in Hotel Properties—Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of the hotel is measured by comparison of the carrying amount of the hotel to the estimated future undiscounted cash flows, which take into account current market conditions and our intent with respect to holding or disposing of the hotel. If our analysis indicates that the carrying value of the hotel is not recoverable on an undiscounted cash flow basis, we recognize an impairment charge for the amount by which the property’s net book value exceeds its estimated fair value, or fair value, less cost to sell. In evaluating impairment of hotel properties, we make many assumptions and estimates, including projected cash flows, expected holding period, and expected useful life. Fair value is determined through various valuation techniques, including internally developed discounted cash flow models, comparable market transactions and third-party appraisals, where considered necessary. Asset write-downs resulting from property damage are recorded up to the amount of the allocable property insurance deductible in the period that the property damage occurs. See note 5.
Hotel Dispositions—Discontinued operations are defined as the disposal of components of an entity that represents strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. We believe that individual dispositions of hotel properties do not represent a strategic shift that has (or will have) a major effect on our operations and financial results as most will not fit the definition.
Assets Held for Sale—We classify assets as held for sale when we have obtained a firm commitment from a buyer, and consummation of the sale is considered probable and expected within one year. The related operations of assets held for sale are reported as discontinued if the disposal is a component of an entity that represents a strategic shift that has (or will have) a major effect on our operations and cash flows. Depreciation and amortization will cease as of the date assets have met the criteria to be deemed held for sale. See note 5.
Investments in Unconsolidated Entities—Investments in entities in which we have ownership interests ranging from 16.3% to 28.4%, at June 30, 2018, are accounted for under the equity method of accounting by recording the initial investment and our percentage of interest in the entities’ net income/loss. We review the investments in our unconsolidated entities for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of our investment. Any impairment is recorded in equity in earnings (loss) in unconsolidated entities. No such impairment was recorded for the three and six months ended June 30, 2018 and 2017.
Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. Each VIE, as defined by authoritative accounting guidance, must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance,

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

(ii) an implicit financial responsibility to ensure that a VIE operates as designed, and (iii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. Because we do not have the power and financial responsibility to direct the unconsolidated entities’ activities and operations, we are not considered to be the primary beneficiary of these entities on an ongoing basis and therefore such entities should not be consolidated. In evaluating VIEs, our analysis involves considerable management judgment and assumptions.
Equity-Based Compensation—Stock/unit-based compensation for non-employees is accounted for at fair value based on the market price of the shares at period end in accordance with applicable authoritative accounting guidance that results in recording expense, included in “advisory services fee” and “management fees” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Performance stock units (“PSUs”) and performance-based Long-Term Incentive Plan (“Performance LTIP”) units granted to certain executive officers are accounted for at fair value at period end based on a Monte Carlo simulation valuation model that results in recording expense, included in “advisory services fee,” equal to the fair value of the award in proportion to the requisite service period satisfied during the period. Stock/unit grants to independent directors are recorded at fair value based on the market price of the shares at grant date, which amount is fully expensed as the grants of stock/units are fully vested on the date of grant.
Recently Adopted Accounting Standards—In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model, which requires a company to recognize revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. The update replaces most existing revenue recognition guidance in U.S. GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to fiscal periods beginning after December 15, 2017. The standard permits the use of either the full retrospective or cumulative effect (modified retrospective) transition method. This standard, referred to as “Topic 606,” does not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Additionally, we have historically disposed of hotel properties for cash sales with no contingencies and no future involvement in the hotel operations. Therefore, Topic 606 does not impact the recognition of hotel sales. We adopted this standard effective January 1, 2018, under the modified retrospective method, and the adoption of this standard did not have a material impact on our consolidated financial statements. See related disclosures in note 3.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires an entity to: (i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in other comprehensive income the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. ASU 2016-01 provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. It also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Certain provisions of ASU 2016-01 are eligible for early adoption. We adopted this standard effective January 1, 2018. The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures.
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments - a Consensus of the Emerging Issues Task Force (“ASU 2016-15”). The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. Certain issues addressed in this guidance include - debt payments or debt extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, distributions received from equity method investments and beneficial interests in securitization transactions. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2018 on a prospective basis as there were no required changes as a result of adoption. The adoption of this standard did not have a material impact on our consolidated statements of cash flows.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) - Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. We adopted this standard effective January

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

1, 2018. Under the new standard, certain future hotel acquisitions may be considered asset acquisitions rather than business combinations, which would affect capitalization of acquisitions costs (such costs are expensed for business combinations and capitalized for asset acquisitions). Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis. We concluded that our hotel acquisition completed in the second quarter of 2018 is the acquisition of assets because substantially all of the fair value of the gross assets acquired were concentrated in a single identifiable asset or a group of similar identifiable assets. As such, acquisition costs were capitalized as part of the transaction. As such, acquisition costs were capitalized as part of the transaction. (see note 4).
In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (ASU “2017-05”), which clarifies the scope of ASC Subtopic 610-20, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets and adds guidance for partial sales of nonfinancial assets. ASU 2017-05 is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. An entity may elect to apply ASU 2017-05 under a retrospective or modified retrospective method. We adopted this standard effective January 1, 2018, under the modified retrospective method. The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures.
Recently Issued Accounting Standards—In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantee, rate implicit in the lease, lease term and purchase option and etc. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption. ASU 2016-02 is effective for annual and interim periods for fiscal years beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of 2019 on a modified retrospective basis. The accounting for leases under which we are the lessor remains largely unchanged. While we continue evaluating our lease portfolio to assess the impact that ASU 2016-02 will have on our consolidated financial statements, we expect the primary impact to our consolidated financial statements upon adoption will be the recognition, on a discounted basis, of our future minimum rentals due under noncancelable leases on our consolidated balance sheets resulting in the recording of ROU assets and lease obligations. We disclosed $123.7 million in undiscounted future minimum rentals due under non-cancelable leases in note 12 of our most recent 10-K. We are involving our property managers and implementing repeatable processes to manage ongoing lease data collection and analysis, and evaluating accounting policies and internal controls that will be impacted by the new standards.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The ASU sets forth an “expected credit loss” impairment model to replace the current “incurred loss” method of recognizing credit losses. The standard requires measurement and recognition of expected credit losses for most financial assets held. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for periods beginning after December 15, 2018. We are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements and related disclosures.
In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees and aligns the guidance for share-based payments to non-employees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact that ASU 2018-07 will have on the consolidated financial statements and related disclosures and expect that the associated compensation expense of the majority of our equity awards will be based on the grant date fair value.
3. Revenue
On January 1, 2018, we adopted Topic 606 using the modified retrospective method. As the adoption of this standard did not have a material impact on our consolidated financial statements, no adjustments to opening retained earnings were made as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605-Revenue Recognition.

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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Rooms revenue represents revenue from the occupancy of our hotel rooms and is driven by the occupancy and average daily rate charged. Rooms revenue includes revenue for guest no-shows, day use, and early/late departure fees. The contracts for room stays with customers are generally short in duration and revenues are recognized as services are provided over the course of the hotel stay.
Food & Beverage (“F&B”) revenue consists of revenue from the restaurants and lounges at our hotel properties, In-room dining and mini-bars revenue, and banquet/catering revenue from group and social functions. Other F&B revenue may include revenue from audio-visual equipment/services, rental of function rooms, and other F&B related revenue. Revenue is recognized as the services or products are provided. Our hotel properties may employ third parties to provide certain services at the property, for example, audio visual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenue as appropriate (i.e. gross vs. net).
Other revenue consists of ancillary revenue at the property, including attrition and cancellation fees, resort and destination fees, spas, parking, entertainment and other guest services, as well as rental revenue; primarily consisting of leased retail outlets at our hotel properties. Attrition and cancellation fees are recognized for non-cancellable deposits when the customer provides notification of cancellation within established management policy time frames. For the three and six months ended June 30, 2018, we recorded $1.9 million and $2.5 million of business interruption income for the St. Petersburg Hilton and Key West Crowne Plaza related to a settlement for lost profits from the BP Deepwater Horizon oil spill in the Gulf of Mexico in 2010.
Taxes collected from customers and submitted to taxing authorities are not recorded in revenue. Interest income is recognized when earned. We discontinue recording interest and amortizing discounts/premiums when the contractual payment of interest and/or principal is not received when contractually due.
The following tables presents our revenue disaggregated by geographical areas (in thousands):
 
 
Three Months Ended June 30, 2018
Primary Geographical Market
 
Number of Hotels
 
Rooms
 
Food and Beverage
 
Other Hotel
 
Other
 
Total
Atlanta, GA Area
 
9

 
$
17,029

 
$
3,993

 
$
1,404

 
$
—

 
$
22,426

Boston, MA Area
 
3

 
17,606

 
2,116

 
905

 
—

 
20,627

Dallas / Ft. Worth Area
 
7

 
16,534

 
4,229

 
919

 
—

 
21,682

Houston, TX Area
 
3

 
7,249

 
2,571

 
204

 
—

 
10,024

Los Angeles, CA Metro Area
 
6

 
19,995

 
3,763

 
1,233

 
—

 
24,991

Miami, FL Metro Area
 
3

 
6,948

 
2,521

 
238

 
—

 
9,707

Minneapolis - St. Paul, MN-WI Area
 
4

 
9,454

 
2,618

 
1,251

 
—

 
13,323

Nashville, TN Area
 
1

 
14,319

 
3,530

 
368

 
—

 
18,217

New York / New Jersey Metro Area
 
6

 
20,712

 
7,199

 
619

 
—

 
28,530

Orlando, FL Area
 
3

 
7,179

 
418

 
336

 
—

 
7,933

Philadelphia, PA Area
 
3

 
6,782

 
1,196

 
236

 
—

 
8,214

San Diego, CA Area
 
2

 
4,823

 
261

 
254

 
—

 
5,338

San Francisco - Oakland, CA Metro Area
 
6

 
21,394

 
1,598

 
628

 
—

 
23,620

Tampa, FL Area
 
2

 
5,489

 
1,568

 
251

 
—

 
7,308

Washington DC - MD - VA Area
 
9

 
35,084

 
6,653

 
1,573

 
—

 
43,310

Other Areas
 
51

 
96,657

 
16,151

 
7,796

 
—

 
120,604

Orlando WorldQuest
 
—

 
1,182

 
44

 
306

 
—

 
1,532

Sold properties
 
2

 
945

 
—

 
37

 
—

 
982

Corporate
 
—

 
—

 
—

 
—

 
796

 
796

Total
 
120

 
$
309,381

 
$
60,429

 
$
18,558

 
$
796

 
$
389,164


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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

 
 
Three Months Ended June 30, 2017
Primary Geographical Market
 
Number of Hotels
 
Rooms
 
Food and Beverage
 
Other Hotel
 
Other
 
Total
Atlanta, GA Area
 
9

 
$
16,887

 
$
4,209

 
$
1,289

 
$
—

 
$
22,385

Boston, MA Area
 
3

 
18,342

 
2,264

 
817

 
—

 
21,423

Dallas / Ft. Worth Area
 
7

 
15,691

 
4,665

 
846

 
—

 
21,202

Houston, TX Area
 
3

 
7,024

 
2,280

 
202

 
—

 
9,506

Los Angeles, CA Metro Area
 
6

 
19,675

 
3,646

 
1,134

 
—

 
24,455

Miami, FL Metro Area
 
3

 
6,504

 
2,498

 
183

 
—

 
9,185

Minneapolis - St. Paul, MN-WI Area
 
4

 
9,650

 
2,704

 
1,245

 
—

 
13,599

Nashville, TN Area
 
1

 
14,070

 
5,460

 
565

 
—

 
20,095

New York / New Jersey Metro Area
 
6

 
19,978

 
7,289

 
578

 
—

 
27,845

Orlando, FL Area
 
3

 
7,709

 
537

 
198

 
—

 
8,444

Philadelphia, PA Area
 
3

 
6,797

 
1,141

 
175

 
—

 
8,113

San Diego, CA Area
 
2

 
4,805

 
331

 
172

 
—

 
5,308

San Francisco - Oakland, CA Metro Area
 
6

 
20,102

 
2,045

 
522

 
—

 
22,669

Tampa, FL Area
 
3

 
5,685

 
1,732

 
237

 
—

 
7,654

Washington DC - MD - VA Area
 
9

 
34,474

 
6,857

 
1,239

 
—

 
42,570

Other Areas
 
52

 
95,158

 
15,003

 
5,064

 
—

 
115,225

Orlando WorldQuest
 
—

 
1,556

 
52

 
298

 
—

 
1,906

Sold properties
 
3

 
7,098

 
1,129

 
184

 
—

 
8,411

Corporate
 
—

 
—

 
—

 
—

 
675

 
675

Total
 
123

 
$
311,205

 
$
63,842

 
$
14,948

 
$
675

 
$
390,670

 
 
Six Months Ended June 30, 2018
Primary Geographical Market
 
Number of Hotels
 
Rooms
 
Food and Beverage
 
Other Hotel
 
Other
 
Total
Atlanta, GA Area
 
9

 
$
34,288

 
$
8,433

 
$
2,748

 
$
—

 
$
45,469

Boston, MA Area
 
3

 
26,772

 
3,517

 
1,681

 
—

 
31,970

Dallas / Ft. Worth Area
 
7

 
33,015

 
9,192

 
1,699

 
—

 
43,906

Houston, TX Area
 
3

 
14,221

 
5,213

 
419

 
—

 
19,853

Los Angeles, CA Metro Area
 
6

 
40,576

 
8,219

 
2,232

 
—

 
51,027

Miami, FL Metro Area
 
3

 
16,942

 
5,076

 
532

 
—

 
22,550

Minneapolis - St. Paul, MN-WI Area
 
4

 
18,298

 
4,880

 
2,371

 
—

 
25,549

Nashville, TN Area
 
1

 
25,297

 
5,849

 
840

 
—

 
31,986

New York / New Jersey Metro Area
 
6

 
37,035

 
12,123

 
1,363

 
—

 
50,521

Orlando, FL Area
 
3

 
15,521

 
789

 
531

 
—

 
16,841

Philadelphia, PA Area
 
3

 
11,689

 
2,226

 
425

 
—

 
14,340

San Diego, CA Area
 
2

 
8,996

 
501

 
475

 
—

 
9,972

San Francisco - Oakland, CA Metro Area
 
6

 
39,880

 
3,516

 
1,094

 
—

 
44,490

Tampa, FL Area
 
2

 
12,970

 
3,483

 
1,036

 
—

 
17,489

Washington DC - MD - VA Area
 
9

 
58,734

 
11,797

 
2,797

 
—

 
73,328

Other Areas
 
51

 
179,749

 
30,581

 
13,032

 
—

 
223,362

Orlando WorldQuest
 
—

 
2,573

 
77

 
645

 
—

 
3,295

Sold properties
 
3

 
3,518

 
1

 
129

 
—

 
3,648

Corporate
 
—

 
—

 
—

 
—

 
1,775

 
1,775

Total
 
121

 
$
580,074

 
$
115,473

 
$
34,049

 
$
1,775

 
$
731,371


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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

 
 
Six Months Ended June 30, 2017
Primary Geographical Market
 
Number of Hotels
 
Rooms
 
Food and Beverage
 
Other Hotel
 
Other
 
Total
Atlanta, GA Area
 
9

 
$
34,047

 
$
9,194

 
$
2,366

 
$
—

 
$
45,607

Boston, MA Area
 
3

 
27,210

 
4,044

 
1,515

 
—

 
32,769

Dallas / Ft. Worth Area
 
7

 
31,378

 
9,718

 
1,662

 
—

 
42,758

Houston, TX Area
 
3

 
14,150

 
4,584

 
363

 
—

 
19,097

Los Angeles, CA Metro Area
 
6

 
40,056

 
8,420

 
2,288

 
—

 
50,764

Miami, FL Metro Area
 
3

 
15,873

 
5,070

 
439

 
—

 
21,382

Minneapolis - St. Paul, MN-WI Area
 
4

 
17,528

 
4,901

 
2,178

 
—

 
24,607

Nashville, TN Area
 
1

 
25,867

 
11,008

 
852

 
—

 
37,727

New York / New Jersey Metro Area
 
6

 
35,633

 
12,868

 
1,069

 
—

 
49,570

Orlando, FL Area
 
3

 
16,081

 
1,121

 
383

 
—

 
17,585

Philadelphia, PA Area
 
3

 
11,481

 
1,991

 
364

 
—

 
13,836

San Diego, CA Area
 
2

 
8,963

 
712

 
337

 
—

 
10,012

San Francisco - Oakland, CA Metro Area
 
6

 
38,392

 
3,795

 
1,009

 
—

 
43,196

Tampa, FL Area
 
3

 
13,428

 
4,078

 
414

 
—

 
17,920

Washington DC - MD - VA Area
 
9

 
61,306

 
12,478

 
2,521

 
—

 
76,305

Other Areas
 
52

 
178,469

 
29,408

 
9,895

 
—

 
217,772

Orlando WorldQuest
 
—

 
2,872

 
90

 
667

 
—

 
3,629

Sold properties
 
6

 
15,176

 
3,212

 
392

 
—

 
18,780

Corporate
 
—

 
—

 
—

 
—

 
1,063

 
1,063

Total
 
126

 
$
587,910

 
$
126,692

 
$
28,714

 
$
1,063

 
$
744,379

4. Investments in Hotel Properties, net
Investments in hotel properties, net consisted of the following (in thousands):
 
June 30, 2018
 
December 31, 2017
Land
$
665,578

 
$
653,293

Buildings and improvements
4,017,054

 
3,895,112

Furniture, fixtures, and equipment
489,880

 
468,420

Construction in progress
31,509

 
35,273

Condominium properties
12,173

 
12,196

Total cost
5,216,194

 
5,064,294

Accumulated depreciation
(1,106,474
)
 
(1,028,379
)
Investments in hotel properties, net
$
4,109,720

 
$
4,035,915


14
Table of Contents
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Acquisitions
Hilton Alexandria Old Town
On June 29, 2018, the Company acquired a 100% interest in the 252-room Hilton Alexandria Old Town in Alexandria, Virginia for $111.0 million. We accounted for this transaction as an asset acquisition because substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. We allocated the cost of the acquisition including transaction costs to the individual assets acquired and liabilities assumed on a relative fair value basis, which is considered a Level 3 valuation technique, as noted in the following table (in thousands):
Land
$
14,459

Buildings and improvements
94,535

Furniture, fixtures and equipment
2,479

 
$
111,473

Net other assets (liabilities)
$
194

The results of operations of the hotel property have been included in our results of operations as of the acquisition date. For both the three and six months ended June 30, 2018, total revenue and net income in our consolidated statements of operations is not material.
5. Hotel Dispositions, Impairment Charges, Insurance Recoveries and Assets Held For Sale
Hotel Dispositions
On February 1, 2017, the Company sold the Renaissance hotel in Portsmouth, Virginia (“Renaissance Portsmouth”) for approximately $9.2 million in cash. The sale resulted in a loss of $43,000 for the year ended December 31, 2017 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.2 million of debt associated with the hotel property. See note 7.
On March 6, 2017, the Company sold the Embassy Suites in Syracuse, New York (“Embassy Suites Syracuse”) for approximately $8.8 million in cash. The sale resulted in a loss of $40,000 for the year ended December 31, 2017 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $20.6 million of debt associated with the hotel property. See note 7.
On June 29, 2017, the Company sold the Crowne Plaza Ravinia in Atlanta, Georgia for approximately $88.7 million in cash. The sale resulted in a gain of $14.1 million for the year ended December 31, 2017 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $78.7 million of debt associated with the hotel property. See note 7.
On February 20, 2018, we completed the sale of the SpringHill Suites Glen Allen for approximately $10.9 million in cash. The sale resulted in a loss of approximately $13,000 for the six months ended June 30, 2018 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $7.6 million of debt associated with the hotel property. See note 7.
On May 1, 2018, we completed the sale of the SpringHill Suites Centreville for approximately $7.5 million in cash. The sale resulted in a gain of approximately $16,000 for the three and six months ended June 30, 2018 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $6.6 million of debt associated with the hotel property. See note 7.
On May 10, 2018, we completed the sale of the Residence Inn Tampa for approximately $24.0 million in cash. The sale resulted in a gain of approximately $400,000 for the three and six months ended June 30, 2018 and is included in “gain (loss) on sale of hotel properties” in the consolidated statements of operations. The Company also repaid approximately $22.5 million of debt associated with the hotel property. See note 7.

15
Table of Contents
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

We included the results of operations for these hotel properties through the date of disposition in net income (loss). The following table includes condensed financial information from these hotel properties in the consolidated statements of operations for the three and six months ended June 30, 2018 and 2017 (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
Total hotel revenue
$
982

 
$
8,411

 
$
3,648

 
$
18,780

Total hotel operating expenses
(620
)
 
(5,732
)
 
(2,271
)
 
(13,484
)
Operating income (loss)
362

 
2,679

 
1,377

 
5,296

Property taxes, insurance and other
(70
)
 
(355
)
 
(220
)
 
(883
)
Depreciation and amortization
(39
)
 
(1,658
)
 
(347
)
 
(3,451
)
Gain (loss) on sale of hotel properties
413

 
14,092

 
403

 
14,009

Interest expense and amortization of loan costs
(45
)
 
(2,994
)
 
(525
)
 
(3,240
)
Write-off of loan costs and exit fees
(462
)
 
(43
)
 
(524
)
 
(98
)
Income (loss) before income taxes
159

 
11,721

 
(1,775
)
 
11,633

(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership
(24
)
 
(1,840
)
 
264

 
(1,826
)
Net income (loss) attributable to the Company
$
135

 
$
9,881

 
$
(1,511
)