SOURCE: Condor Hospitality Trust, Inc.

Condor Hospitality Trust, Inc.

May 10, 2016 17:25 ET

Condor Hospitality Trust Reports 2016 First Quarter Results

$30.0 Million Capital Raise | 4 Non-Core Hotels Sold

NORFOLK, NE--(Marketwired - May 10, 2016) - Condor Hospitality Trust, Inc. (NASDAQ: CDOR) (the "Company") today announced results for the first quarter ended March 31, 2016.

"The first quarter of 2016 was an inflection point for Condor as the $30.0 million investment by StepStone enabled the Company to greatly advance its goal of improving the quality of and simplifying the structure of its balance sheet," said Bill Blackham, Condor's Chief Executive Officer. "Our near term focus is to complete the strategic repositioning of the portfolio through continued disposition of legacy assets to recycle the net proceeds in a highly disciplined manner into high-quality, premium branded select service hotels."

2016 First Quarter Highlights

The Company continues to make significant progress on its strategic repositioning. In the first quarter of 2016, the Company successfully closed on a $30.0 million capital raise. Additionally, the Company continued to dispose of legacy assets at attractive valuations, successfully closing on four legacy dispositions in the first quarter. Both of these important accomplishments are further detailed below.

Capital Raise: On March 16, 2016, Condor announced that it had raised $30.0 million in a private placement transaction with an affiliate of the StepStone Group. The investment, structured as a new Series D Preferred Stock, includes a 6.25% coupon, payable quarterly, and may be converted under certain circumstances into shares of the Company's common stock at a conversion price of $1.60 per share. Subsequent to the close of the first quarter, the Company used a portion of the proceeds from the $30.0 million Series D raise to redeem for cash all outstanding Series A and Series B Preferred Stock, including all unpaid accrued dividends. Excess proceeds will be utilized by the Company to accelerate the strategic repositioning of its portfolio to high-quality select service, limited service, extended stay, and compact full service hotels. This investment capacity is in addition to the proceeds expected to be recycled from the planned disposition of legacy assets in 2016. Simultaneous with StepStone's Series D investment, the Company's outstanding Series C Preferred Stock, all of which was held by Real Estate Strategies L.P. (RES), was also exchanged for the newly created Series D Preferred Stock, resulting in one class of preferred stock for which the Company can require conversion entirely into common stock upon the occurrence of defined capital events.

Dispositions: In the first quarter of 2016, the Company continued to successfully dispose of legacy assets at attractive valuations. On January 8, 2016, the Company announced the sale of three legacy assets for gross proceeds of $7.0 million. On April 7, 2016, the Company announced the sale of an additional legacy asset with gross proceeds of $2.4 million. The Company expects to market up to 27 legacy hotels in 2016, including the four closed dispositions aforementioned. At a minimum, the Company anticipates disposing of 20 legacy hotels in 2016 and plans to utilize the net proceeds to continue to strategically reposition the portfolio.

Summary Financial Results

RevPAR: For the first quarter, revenue per available room (RevPAR) for the 22 same-store hotels not considered held for sale at March 31, 2016, declined 5.3 percent to $40.89. The decrease was attributed to an 11.5 percent reduction in occupancy to 53.5 percent, partially offset by a 7.0 percent increase in average daily rate (ADR) to $76.43. The decrease in occupancy was the result of market challenges facing the legacy hotels as a result of declines in oil and gas, rail, and fracking industries. Occupancy was also negatively impacted by a decrease in construction projects from 2015 where the rate of these projects was higher than typical. Despite these occupancy challenges, in the latter half of 2015 and in 2016, the Company has focused on increasing ADR in light of an improving economy and increasing leisure and transient travel.

Revenue: Condor's first quarter 2016 revenue from continuing operations was $12.2 million compared to $12.3 million in the same 2015 period. Revenue from newly acquired properties in the three months ended March 31, 2016 totaled $3.2 million, which was partially offset by a decrease in revenue from held for sale and sold properties included in continuing operations of $3.1 million.

Net Earnings:  First quarter net earnings attributable to common shareholders was $(10.4) million, or $(2.11) per basic and diluted share compared to $2.3 million, or $0.48 per basic and $(0.09) per diluted share for the same 2015 period.

These results include dividends declared and undeclared and in kind distributions to preferred shareholders of $17.7 million for the three months ended March 31, 2016, which increased considerably over $0.9 million in the same period in 2015 as a result of the first quarter 2016 preferred stock transactions.

Funds From Operations (FFO): Funds from operations for the three months ended March 31, 2016 increased to $5.8 million as compared to $4.7 million for the same period prior year. The increase in FFO was primarily driven by an increase in net earnings from $3.5 million for the first three months ended March 31, 2015 to $7.7 million for the same period 2016.

Capital Reinvestment: The Company invested $0.7 million in capital improvements throughout the portfolio in the first quarter 2016 to upgrade its properties and maintain brand standards.

Balance Sheet: The Company had cash and cash equivalents and available revolver of $16.3 million and $2.6 million, respectively, at March 31, 2016. As of March 31, 2016, the Company had total outstanding long-term debt of $81.5 million, with $67.5 million associated with assets held for use with a weighted average maturity of 2.7 years and a weighted average interest rate of 5.15%.

Dividends:On April 15, 2016, the Company completed the cash redemption of all of its outstanding shares of 8% Series A Cumulative Preferred Stock (NASDAQ: CDORP) (CUSIP No. 20676Y205) and 10% Series B Cumulative Preferred Stock (NASDAQ: CDORO) (CUSIP No. 20676Y304), including all accrued and unpaid dividends. The aggregate redemption price was approximately $20.1 million, an amount that was funded using proceeds from the Company's previously announced $30.0 million private placement transaction with StepStone Real Estate, an affiliate of the StepStone Group.

On March 16, 2016, the Company entered into an Exchange Agreement with RES and IRSA Inversiones y Representaciones Sociedad Anónima pursuant to which all 3,000,000 outstanding shares of Series C Preferred Stock were exchanged for 3,000,000 shares of Series D Preferred Stock. Pursuant to the Exchange Agreement, in lieu of payment of accrued and unpaid dividends in the amount of $4.9 million on the Series C Preferred Stock, Condor (a) paid to RES an amount of cash equal to $1.5 million (b) issued to RES 245,156 shares of Series D Preferred Stock (such that RES, IRSA and their affiliates do not beneficially own in excess of 49% of the voting stock of Condor) and (c) issued to RES a promissory note, bearing interest at 6.25% per annum, in the principal amount of $1.0 million and convertible into a number of shares of Series D Preferred Stock that would have otherwise been issued on account of the remaining accrued and unpaid dividends but for the foregoing 49% limitation (the "Note").

Following the execution of the Stock Purchase Agreement and Exchange Agreement on March 16, 2016, there were 6,245,156 shares of Series D Preferred Stock outstanding. The Series D Preferred stockholders receive cumulative cash dividends at a rate of 6.25% per annum, payable quarterly. The Series D Preferred Stock is convertible, at the option of the holder, at any time into common stock at a rate of $1.60 per share of common stock, which is equal to a rate of 6.25 shares of common stock for each share of Series D Preferred Stock. No dividend has been declared to-date for the Series D Preferred Stock. The Company's Board of Directors will announce distributions following the next Board of Director's meeting.

Outlook

"Over the past year, we have significantly improved the capitalization and liquidity position of Condor," said Jonathan Gantt, Condor's Chief Financial Officer. "We believe these improvements, combined with the capital recycling initiative, position the company to pursue increasing shareholder value."

About Condor Hospitality Trust, Inc.
Condor Hospitality Trust, Inc. (NASDAQ: CDOR) is a self-administered real estate investment trust that specializes in the investment and ownership of upper midscale and upscale, premium branded, select service, extended stay, and limited service hotels. The Company currently owns 37 hotels in 17 states. Condor's hotels are franchised by a number of the industry's most well-regarded brand families including Hilton, Marriott, InterContinental Hotels Group, Choice and Wyndham. For more information or to make a hotel reservation, visit www.condorhospitality.com.

Forward Looking Statement
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company's filings with the Securities and Exchange Commission.

SELECTED FINANCIAL DATA:

   
Condor Hospitality Trust, Inc. and Subsidiaries  
Consolidated Balance Sheets  
(Unaudited - In thousands, except share and per share data)  
   
    As of  
    March 31,     December 31,  
    2016     2015  
                 
Assets                
Investment in hotel properties, net   $ 105,645     $ 106,312  
Cash and cash equivalents     16,270       4,870  
Restricted cash, property escrows     2,940       3,776  
Restricted cash, Series A and B Preferred redemption escrow     20,147       -  
Accounts receivable, net of allowance for doubtful accounts of $8 and $10     1,326       1,169  
Prepaid expenses and other assets     2,117       1,832  
Investment in hotel properties held for sale, net     18,677       24,387  
Total Assets   $ 167,122     $ 142,346  
                 
Liabilities and Equity                
                 
Liabilities                
Accounts payable, accrued expenses, and other liabilities   $ 6,940     $ 5,419  
Derivative liabilities, at fair value     214       8,759  
Convertible debt, at fair value     1,399       -  
Long-term debt, net of deferred financing costs     66,446       67,503  
Long-term debt related to hotel properties held for sale, net of deferred financing costs     13,746       18,508  
Mandatorily redeemable preferred stock, at redemption value:                
  8% Series A, 2,500,000 shares authorized, $.01 par value, 803,270 shares outstanding     9,675       -  
  10% Series B, 800,000 shares authorized; $.01 par value, 332,500 shares outstanding     10,391       -  
Total Liabilities     108,811       100,189  
                 
Redeemable preferred stock:                
  10% Series B, 800,000 shares authorized; $.01 par value, 332,500 shares outstanding, liquidation preference of $10,182 at December 31, 2015     -       7,662  
                 
Equity                
Shareholders' equity                
Preferred stock, 40,000,000 shares authorized:                
  8% Series A, 2,500,000 shares authorized, $.01 par value, 803,270 shares outstanding, liquidation preference of $9,485 at December 31, 2015     -       8  
  6.25% Series C, 3,000,000 shares authorized, $.01 par value, 3,000,000 shares outstanding, liquidation preference of $34,492 at December 31, 2015     -       30  
  6.25% Series D, 6,700,000 shares authorized, $.01 par value, 6,245,156 shares outstanding, liquidation preference of $62,612 at March 31, 2016     61,449       -  
Common stock, $.01 par value, 200,000,000 shares authorized; 4,941,878 shares outstanding     49       49  
Additional paid-in capital     118,507       138,387  
Accumulated deficit     (124,004 )     (105,858 )
Total Shareholders' Equity     56,001       32,616  
Noncontrolling interest in consolidated partnership, redemption value of $1,838 and $1,197     2,310       1,879  
Total Equity     58,311       34,495  
                 
Total Liabilities and Equity   $ 167,122     $ 142,346  
                 
   
   
Condor Hospitality Trust, Inc.  
Consolidated Statements of Operations  
(Unaudited - In thousands, except per share data)  
   
    Three months ended March 31,  
    2016     2015  
Revenue                
Room rentals and other hotel services   $ 12,176     $ 12,346  
Operating Expenses                
Hotel and property operations     9,407       9,988  
Depreciation and amortization     1,409       1,480  
General and administrative     1,448       1,385  
Acquisition and terminated transactions     94       -  
Total operating expenses     12,358       12,853  
Operating loss     (182 )     (507 )
Net gain on disposition of assets     3,368       13  
Net gain on derivatives and convertible debt     6,117       4,823  
Other income (expense)     (21 )     95  
Interest expense     (1,308 )     (1,527 )
Loss on debt extinguishment     (173 )     (7 )
Impairment loss     (793 )     (777 )
Earnings from continuing operations before income taxes     7,008       2,113  
Income tax expense     -       -  
Earnings from continuing operations     7,008       2,113  
Gain from discontinued operations, net of tax     679       1,337  
Net earnings     7,687       3,450  
Earnings attributable to noncontrolling interest     (389 )     (281 )
Net earnings attributable to controlling interests     7,298       3,169  
Dividends declared and undeclared and in kind dividends deemed on preferred stock     (17,740 )     (891 )
Net earnings (loss) attributable to common shareholders   $ (10,442 )   $ 2,278  
                 
Earnings per Share                
Continuing operations - Basic   $ (2.24 )   $ 0.23  
Discontinued operations - Basic     0.13       0.25  
Total - Basic Earnings per Share   $ (2.11 )   $ 0.48  
                 
Continuing operations - Diluted   $ (2.24 )   $ (0.14 )
Discontinued operations - Diluted     0.13       0.05  
Total - Diluted Earnings per Share   $ (2.11 )   $ (0.09 )
                 
                 
                 

Reconciliation of Non-GAAP Financial Measures (Unaudited)

Non-GAAP financial measures are measures of our historical financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We report Funds from Operations ("FFO"), Adjusted FFO ("AFFO"), Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA"), Adjusted EBITDA, and Property Operating Income ("POI") as non-GAAP measures that we believe are useful to investors as key measures of our operating results and which management uses to facilitate a periodic evaluation of our operating results relative to those of our peers. Our non-GAAP measures should not be considered as an alternative to U.S. GAAP net earnings or operating income (loss) as an indication of financial performance or to U.S. GAAP cash flows from operating activities as a measure of liquidity. Additionally, these measures are not indicative of funds available to fund cash needs or our ability to make cash distributions as they have not been adjusted to consider cash requirements for capital expenditures, property acquisitions, debt service obligations, or other commitments.

FFO and AFFO

The following table reconciles net earnings to FFO and AFFO for the three months ended March 31 (in thousands.) All amounts presented include both continuing and discontinued operations.

             
    Three months ended  
    March 31,  
Reconciliation of Net earnings to FFO and AFFO   2016     2015  
Net earnings   $ 7,687     $ 3,450  
Depreciation and amortization expense     1,409       1,480  
Net gain on disposition of assets     (4,048 )     (950 )
Impairment loss     793       732  
FFO     5,841       4,712  
Earnings attributable to noncontrolling interests     (389 )     (281 )
Dividends declared and undeclared and in kind dividends deemed on preferred stock     (17,740 )     (891 )
FFO attributable to common shareholders     (12,288 )     3,540  
Net gain on derivatives and convertible debt     (6,117 )     (4,823 )
Acquisition and terminated transactions expense     94       -  
AFFO attributable to common shareholders   $ (18,311 )   $ (1,283 )
                 

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (NAREIT), which defines FFO as net earnings computed in accordance with GAAP, excluding gains or losses from sales of real estate assets, impairment, and the depreciation and amortization of real estate assets. FFO is calculated both for the Company in total and as FFO attributable to common shareholders, which is FFO excluding earnings attributable to noncontrolling interests and preferred stock dividends. AFFO is FFO attributable to common shareholders adjusted to exclude items we do not believe are representative of the results from our core operations, such as non-cash gains or losses on derivative liabilities and convertible debt and cash charges for acquisition costs. All REITs do not calculate FFO and AFFO in the same manner; therefore, our calculation may not be the same as the calculation of FFO and AFFO for similar REITs.

We consider FFO and AFFO to be useful additional measures of performance for an equity REIT because they facilitate an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that FFO and AFFO provide a meaningful indication of our performance.

EBITDA and Adjusted EBITDA

The following table reconciles net earnings to EBITDA and Adjusted EBITDA for the three months ended March 31 (in thousands). All amounts presented include both continuing and discontinued operations.

             
    Three months ended  
    March 31,  
Reconciliation of Net earnings to EBITDA and Adjusted EBITDA   2016     2015  
Net earnings   $ 7,687     $ 3,450  
Interest expense     1,333       1,672  
Loss on debt extinguishment     173       7  
Income tax expense     -       -  
Depreciation and amortization expense     1,409       1,480  
EBITDA     10,602       6,609  
Net gain on disposition of assets     (4,048 )     (950 )
Impairment loss     793       732  
Net gain on derivatives and convertible debt     (6,117 )     (4,823 )
Acquisition and terminated transactions expense     94       -  
Adjusted EBITDA   $ 1,324     $ 1,568  
                 

We calculate EBITDA and Adjusted EBITDA by adding back to net earnings certain non-operating expenses and certain non-cash charges which are based on historical cost accounting which we believe may be of limited significance in evaluating current performance. We believe these adjustments can help eliminate the accounting effects of depreciation and amortization and financing decisions and facilitate comparisons of core operating profitability between periods. In calculating EBITDA, we add back to net earnings interest expense, loss on debt extinguishment, income tax expense, and depreciation and amortization expense. In calculating Adjusted EBITDA, we adjust EBITDA to add back net gain on disposition of assets, and acquisition and terminated transactions expense, which are cash charges. We also add back impairment and gain or loss on derivatives and convertible debt, which are non-cash charges. Our current calculation of EBITDA varies from that presented in previous filings as EBITDA was historically calculated based on net earnings attributable to common shareholders with preferred dividends and noncontrolling interest added back only to Adjusted EBITDA. EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.

We believe that EBITDA and Adjusted EBITDA to be useful additional measures of our operating performance, excluding the impact of our capital structure (primarily interest expense), our asset base (primarily depreciation and amortization expense), and other items we do not believe are representative of the results from our core operations.

Property Operating Income

The following table reconciles operating income (loss) to POI for the three months ended March 31 (in thousands). All amounts presented include only continuing operations unless otherwise noted.

             
    Three months ended  
    March 31,  
Reconciliation of Operating loss to POI   2016     2015  
Operating loss   $ (182 )   $ (507 )
Depreciation and amortization expense     1,409       1,480  
General and administrative expense     1,448       1,385  
Acquisition and terminated transactions expense     94       -  
Room rentals and property operations revenue, discontinued operations     334       1,752  
Hotel and property operating expense, discontinued operations     (310 )     (1,252 )
POI   $ 2,793     $ 2,858  
                 

We calculate POI as room rentals and other hotel services revenue less hotel and property operating expenses. We believe POI is helpful to investors as it better communicates the comparability of our hotels' operating results for all of the Company's hotel properties. POI as presented above includes both continuing and discontinued operations.

 
Condor Hospitality Trust, Inc.
Operating Statistics
 
    Three months ended March 31,
    2016   2015
    Occupancy     ADR   RevPAR   Occupancy     ADR   RevPAR
Same store HFU   53.50 %   $ 76.43   $ 40.89   60.48 %   $ 71.41   $ 43.19
Same store HFS   50.39 %     53.84     27.13   56.19 %     51.46     28.19
Total same store   52.28 %   $ 67.94   $ 35.52   58.81 %   $ 63.99   $ 37.63
                                     
Acquisitions   76.82 %   $ 112.09   $ 86.10   -     $ -   $ -
                                     
                                     
                                     
Condor Hospitality Trust, Inc.
Property List | First Quarter Earnings Release Dated May 10, 2016
 
 
Current Hotel Portfolio [Excludes Acquisitions as Detailed Below]
                         
Ref   Hotel Name   City   State   Rooms   Acquisition Date   Status 1
1   Quality Inn   Princeton   WV   50   1/1/1985   Hold
2   Comfort Inn   Farmville   VA   51   7/1/1985   Hold
3   Quality Inn   Solomons   MD   59   6/1/1986   Hold
4   Key West Inn   Key Largo   FL   40   8/1/1987   Hold
5   Quality Inn   Morgantown   WV   81   10/1/1996   Hold
6   Comfort Inn   Shelby   NC   76   2/1/1989   Hold
7   Comfort Suites   Ft. Wayne   IN   127   11/7/2005   Hold
8   Comfort Suites   Lafayette   IN   62   11/7/2005   Hold
9   Comfort Inn and Suites   Warsaw   IN   71   11/7/2005   Hold
10   Comfort Suites   South Bend   IN   135   11/30/2005   Hold
11   Super 8   Billings   MT   106   1/5/2007   Hold
12   Hilton Garden Inn   Dowell/Solomons   MD   100   5/25/2012   Hold
13   Super 8   Keokuk   IA   61   2/22/1985   HFS
14   Quality Inn   Culpeper   VA   49   5/1/1986   HFS
15   Comfort Inn   New Castle   PA   79   7/1/1987   HFS
16   Super 8   Pittsburg   KS   64   8/14/1987   HFS
17   Super 8   Storm Lake   IA   59   10/11/1990   HFS
18   Comfort Inn   Harlan   KY   61   7/1/1993   HFS
19   Comfort Inn   Chambersburg   PA   63   10/1/1993   HFS
20   Clarion Inn   Cleveland   TN   59   3/1/1998   HFS
21   Savannah Suites   Atlanta   GA   164   11/16/2006   HFS
22   Days Inn   Bossier City   LA   176   4/4/2007   HFS
23   Comfort Inn   Glasgow   KY   60   1/1/2008   HFS
24   Super 8   Coralville   IA   84   12/21/1985   HFS
25   Super 8   Creston   IA   121   9/19/1978   Legacy
26   Super 8   Mount Pleasant   IA   55   8/29/1988   Legacy
27   Comfort Inn   Rocky Mount   VA   61   4/1/1989   Legacy
28   Days Inn   Farmville   VA   59   9/1/1990   Legacy
29   Quality Inn   Danville   KY   63   8/1/1994   Legacy
30   Super 8   Menomonie   WI   81   4/1/1997   Legacy
31   Comfort Suites   Marion   IN   62   11/7/2005   Legacy
32   Supertel Inn/Conference Center   Creston   IA   41   6/30/2006   Legacy
33   Days Inn Airport   Sioux Falls   SD   86   1/1/2008   Legacy
34   Super 8   Burlington   IA   62   12/30/1986   Legacy
    Total           2,628        
                         
Acquisitions | For Period January 1, 2015 - March 31, 2016
 
Ref   Hotel Name   City   State   Rooms   Acquisition Date   Purchase Price
(in millions)
35   SpringHill Suites   San Antonio   TX   116   10/1/2015   $17.5
36   Courtyard by Marriott Flagler Center   Jacksonville   FL   120   10/2/2015   $14.0
37   Hotel Indigo   College Park   GA   142   10/2/2015   $11.0
    Total Acquisitions           378       $42.5
                         
Dispositions | For Period January 1, 2015 - March 31, 2016 2
                         
Ref   Hotel Name   City   State   Rooms   Disposition Date   Gross Proceeds
(in millions)
1   Super 8   West Plains   MO   49   1/15/2015   $1.5
2   Super 8   Green Bay   WI   83   1/29/2015   $2.2
3   Super 8   Columbus   GA   74   3/16/2015   $0.9
4   Sleep Inn & Suites   Omaha   NE   90   3/19/2015   $2.9
5   Savannah Suites   Chamblee   GA   120   4/1/2015   $4.4
6   Savannah Suites   Augusta   GA   172   4/1/2015   $3.4
7   Super 8   Batesville   AR   49   4/30/2015   $1.5
8   Days Inn   Ashland   KY   63   7/1/2015   $2.2
9   Comfort Inn   Alexandria   VA   150   7/13/2015   $12.0
10   Days Inn   Alexandria   VA   200   7/13/2015   $6.5
11   Super 8   Manhattan   KS   85   8/28/2015   $3.2
12   Quality Inn   Sheboygan   WI   59   10/6/2015   $2.3
13   Super 8   Hays   KS   76   10/14/2015   $1.9
14   Days Inn   Glasgow   KY   58   10/16/2015   $1.8
15   Super 8   Tomah   WI   65   10/21/2015   $1.4
16   Rodeway Inn   Fayetteville   NC   120   11/3/2015   $2.6
17   Savannah Suites   Savannah   GA   160   12/22/2015   $4.0
    Total FY2015           1,673       $54.7
18   Super 8   Kirksville   MO   61   1/4/2016   $1.5
19   Super 8   Lincoln   NE   133   1/7/2016   $2.8
20   Savannah Suites   Greenville   SC   170   1/8/2016   $2.7
21   Super 8   Portage   WI   61   3/30/2016   $2.4
    Total First Quarter 2016           425       $9.4
22   Super 8   O'Neill   NE   72   4/22/2016   $1.7
                         
    Total Subsequent to First Quarter 2016       72       $1.7
                         
                         
    Total Dispositions           2,170       $65.8
     
1 |

  Status indicates the Company's current plan for the asset: Hold indicates the Company plans to hold the asset,HFS indicates the asset is currently marketed for sale, and legacy indicates that the Company considers the hotelpart of its disposition strategy.
2 |   One hotel closed subsequent to the close of first quarter-end 2016, as detailed; HFS as of March 31, 2016.
     

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