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, 2017
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 an emerging growth company. See 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
 
97,430,297
(Class)
 
Outstanding at August 4, 2017


ASHFORD HOSPITALITY TRUST, INC
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2017

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, 2017
 
December 31, 2016
Assets
 
Investments in hotel properties, net
$
4,069,152

 
$
4,160,563

Cash and cash equivalents
404,435

 
347,091

Restricted cash
150,502

 
144,014

Marketable securities
19,270

 
53,185

Accounts receivable, net of allowance of $740 and $690, respectively
56,755

 
44,629

Inventories
4,413

 
4,530

Investment in unconsolidated entities
5,586

 
58,779

Deferred costs, net
2,913

 
2,846

Prepaid expenses
24,131

 
17,578

Derivative assets, net
1,607

 
3,614

Other assets
12,769

 
11,718

Intangible assets, net
10,002

 
10,061

Due from Ashford Prime OP, net
1

 
—

Due from third-party hotel managers
19,279

 
13,348

Assets held for sale
—

 
19,588

Total assets
$
4,780,815

 
$
4,891,544

Liabilities and Equity
 
 
 
Liabilities:
 
 
 
Indebtedness, net
$
3,698,433

 
$
3,723,559

Accounts payable and accrued expenses
147,025

 
126,986

Dividends and distributions payable
26,185

 
24,765

Unfavorable management contract liabilities
690

 
1,380

Due to Ashford Inc., net
13,593

 
15,716

Due to Ashford Prime OP, net
—

 
488

Due to related party, net
1,927

 
1,001

Due to third-party hotel managers
2,366

 
2,714

Intangible liabilities, net
16,017

 
16,195

Derivative liabilities, net
59

 
—

Other liabilities
18,468

 
16,548

Liabilities related to assets held for sale
—

 
37,047

Total liabilities
3,924,763

 
3,966,399

Commitments and contingencies (note 13)


 


Redeemable noncontrolling interests in operating partnership
107,722

 
132,768

Equity:
 
 
 
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
 
 
 
Series A Cumulative Preferred Stock, 1,657,206 shares issued and outstanding at June 30, 2017 and December 31, 2016
17

 
17

Series D Cumulative Preferred Stock, 9,468,706 shares issued and outstanding at June 30, 2017 and December 31, 2016
95

 
95

Series F Cumulative Preferred Stock, 4,800,000 shares issued and outstanding at June 30, 2017 and December 31, 2016
48

 
48

Series G Cumulative Preferred Stock, 6,200,000 shares issued and outstanding at June 30, 2017 and December 31, 2016
62

 
62

Common stock, $0.01 par value, 400,000,000 shares authorized, 97,430,297 and 96,376,827 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively
974

 
964

Additional paid-in capital
1,765,660

 
1,764,450

Accumulated deficit
(1,019,264
)
 
(974,015
)
Total stockholders’ equity of the Company
747,592

 
791,621

Noncontrolling interests in consolidated entities
738

 
756

Total equity
748,330

 
792,377

Total liabilities and equity
$
4,780,815

 
$
4,891,544

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,
 
2017
 
2016
 
2017
 
2016
Revenue
 
 
 
Rooms
$
311,205

 
$
325,906

 
$
587,910

 
$
616,521

Food and beverage
63,842

 
69,206

 
126,692

 
132,261

Other hotel revenue
14,948

 
15,115

 
28,714

 
28,824

Total hotel revenue
389,995

 
410,227

 
743,316

 
777,606

Other
675

 
443

 
1,063

 
836

Total revenue
390,670

 
410,670

 
744,379

 
778,442

Expenses
 
 
 
 
 
 
 
Hotel operating expenses:
 
 
 
 
 
 
 
Rooms
65,034

 
67,193

 
124,907

 
130,295

Food and beverage
42,276

 
45,419

 
84,446

 
88,520

Other expenses
113,824

 
119,612

 
225,557

 
232,749

Management fees
14,247

 
14,880

 
27,073

 
28,575

Total hotel expenses
235,381

 
247,104

 
461,983

 
480,139

Property taxes, insurance, and other
18,766

 
19,293

 
37,099

 
37,905

Depreciation and amortization
60,547

 
60,079

 
125,245

 
122,241

Impairment charges
—

 
(116
)
 
—

 
(227
)
Transaction costs
8

 
(18
)
 
11

 
77

Advisory services fee
14,229

 
12,076

 
24,870

 
22,979

Corporate general and administrative
3,254

 
2,785

 
8,424

 
4,458

Total expenses
332,185

 
341,203

 
657,632

 
667,572

Operating income (loss)
58,485

 
69,467

 
86,747

 
110,870

Equity in earnings (loss) of unconsolidated entities
(2,138
)
 
(287
)
 
(2,901
)
 
(3,872
)
Interest income
546

 
74

 
754

 
137

Gain (loss) on sale of hotel properties
14,092

 
23,094

 
14,009

 
22,980

Other income (expense)
(146
)
 
(3,085
)
 
(3,266
)
 
(3,337
)
Interest expense and amortization of premiums and loan costs
(54,956
)
 
(56,462
)
 
(110,261
)
 
(112,405
)
Write-off of premiums, loan costs and exit fees
(1,575
)
 
(3,941
)
 
(1,629
)
 
(3,941
)
Unrealized gain (loss) on marketable securities
(531
)
 
—

 
(3,877
)
 
—

Unrealized gain (loss) on derivatives
(1,743
)
 
6,878

 
(325
)
 
13,796

Income (loss) before income taxes
12,034

 
35,738

 
(20,749
)
 
24,228

Income tax (expense) benefit
(1,606
)
 
(603
)
 
(760
)
 
(1,232
)
Net income (loss)
10,428

 
35,135

 
(21,509
)
 
22,996

(Income) loss from consolidated entities attributable to noncontrolling interest
(13
)
 
(6
)
 
18

 
32

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership
(231
)
 
(4,376
)
 
6,262

 
(2,264
)
Net income (loss) attributable to the Company
10,184

 
30,753

 
(15,229
)
 
20,764

Preferred dividends
(10,956
)
 
(8,491
)
 
(21,912
)
 
(16,981
)
Net income (loss) attributable to common stockholders
$
(772
)
 
$
22,262

 
$
(37,141
)
 
$
3,783

 
 
 
 
 
 
 
 
Income (loss) per share - basic and diluted:
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
(0.01
)
 
$
0.23

 
$
(0.40
)
 
$
0.04

Weighted average common shares outstanding – basic
95,320

 
94,474

 
95,086

 
94,309

Diluted:
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders
$
(0.01
)
 
$
0.23

 
$
(0.40
)
 
$
0.04

Weighted average common shares outstanding – diluted
95,320

 
94,474

 
95,086

 
94,309

 
 
 
 
 
 
 
 
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,
 
2017
 
2016
 
2017
 
2016
Net income (loss)
$
10,428

 
$
35,135

 
$
(21,509
)
 
$
22,996

Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Total other comprehensive income (loss)
—

 
—

 
—

 
—

Comprehensive income (loss)
10,428

 
35,135

 
(21,509
)
 
22,996

Less: Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities
(13
)
 
(6
)
 
18

 
32

Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership
(231
)
 
(4,376
)
 
6,262

 
(2,264
)
Comprehensive income (loss) attributable to the Company
$
10,184

 
$
30,753

 
$
(15,229
)
 
$
20,764

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 A
 
Series D
 
Series F
 
Series G
 
Common Stock
 
 
 
 
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
Balance at January 1, 2017
1,657

 
$
17

 
9,469

 
$
95

 
4,800

 
$
48

 
6,200

 
$
62

 
96,377

 
$
964

 
$
1,764,450

 
$
(974,015
)
 
$
756

 
$
792,377

 
$
132,768

Purchases of common stock
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(203
)
 
(2
)
 
(1,272
)
 
—

 
—

 
(1,274
)
 
—

Equity-based compensation
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,333

 
—

 
—

 
2,333

 
1,805

Forfeitures of restricted shares
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(35
)
 
—

 
—

 
—

 
—

 
—

 
—

Issuance of restricted shares/units
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,271

 
12

 
(12
)
 
—

 
—

 
—

 
94

Dividends declared - common shares
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(23,531
)
 
—

 
(23,531
)
 
—

Dividends declared - preferred shares- Series A
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,771
)
 
—

 
(1,771
)
 
—

Dividends declared - preferred shares- Series D
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(10,001
)
 
—

 
(10,001
)
 
—

Dividends declared – preferred shares- Series F
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(4,425
)
 
—

 
(4,425
)
 
—

Dividends declared – preferred shares- Series G
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(5,715
)
 
—

 
(5,715
)
 
—

Distributions to noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(5,099
)
Redemption/conversion of operating partnership units
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
20

 
—

 
161

 
—

 
—

 
161

 
(161
)
Redemption value adjustment
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
15,423

 
—

 
15,423

 
(15,423
)
Net income (loss)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(15,229
)
 
(18
)
 
(15,247
)
 
(6,262
)
Balance at June 30, 2017
1,657

 
$
17

 
9,469

 
$
95

 
4,800

 
$
48

 
6,200

 
62

 
97,430

 
$
974

 
$
1,765,660

 
$
(1,019,264
)
 
$
738

 
$
748,330

 
$
107,722

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,
 
2017
 
2016
Cash Flows from Operating Activities
 
Net income (loss)
$
(21,509
)
 
$
22,996

Adjustments to reconcile net income (loss) to net cash flow from operating activities:
 
 
 
Depreciation and amortization
125,245

 
122,241

Impairment charges
—

 
(227
)
Amortization of intangibles
(119
)
 
(99
)
Recognition of deferred income
(317
)
 
—

Bad debt expense
681

 
693

Deferred income tax expense (benefit)
(196
)
 
—

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

 
3,872

(Gain) loss on sale of hotel properties, net
(14,009
)
 
(22,980
)
Realized and unrealized (gain) loss on marketable securities
4,003

 
—

Purchases of marketable securities
(34,776
)
 
—

Sales of marketable securities
64,688

 
—

Net settlement of trading derivatives
(1,242
)
 
(560
)
Payments for derivatives
—

 
(230
)
Realized and unrealized (gain) loss on derivatives
3,858

 
(11,074
)
Amortization of loan costs and premiums, write-off of premiums, loan costs and exit fees
8,418

 
15,247

Equity-based compensation
4,138

 
3,326

Changes in operating assets and liabilities, exclusive of effect of dispositions of hotel properties:
 
 
 
Accounts receivable and inventories
(10,641
)
 
(13,646
)
Prepaid expenses and other assets
(6,816
)
 
(13,370
)
Accounts payable and accrued expenses
17,387

 
15,553

Due to/from related party
830

 
(4,019
)
Due to/from third-party hotel managers
(6,279
)
 
5,314

Due to/from Ashford Prime OP, net
(489
)
 
513

Due to/from Ashford Inc., net
(2,123
)
 
(2,520
)
Other liabilities
1,547

 
1,614

Net cash provided by (used in) operating activities
135,180

 
122,644

Cash Flows from Investing Activities
 
 
 
Investment in unconsolidated entity
(650
)
 
(2,000
)
Proceeds from payments on note receivable
—

 
123

Acquisition of hotel properties and assets, net of cash acquired
(110
)
 
—

Improvements and additions to hotel properties
(110,057
)
 
(88,169
)
Net proceeds from sales of assets/properties
105,267

 
142,792

Liquidation of AQUA U.S. Fund
50,942

 
—

Payments for initial franchise fees
(225
)
 
(30
)
Proceeds from property insurance
2,192

 
194

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

 
52,910

Cash Flows from Financing Activities
 
 
 
Borrowings on indebtedness
180,800

 
37,500

Repayments of indebtedness
(244,233
)
 
(105,888
)
Payments for loan costs and exit fees
(5,790
)
 
(4,575
)
Payments for dividends and distributions
(49,122
)
 
(45,432
)
Purchases of common stock
(1,274
)
 
(734
)
Payments for derivatives
(550
)
 
(73
)
Other
94

 
66

Net cash provided by (used in) financing activities
(120,075
)
 
(119,136
)
Net increase (decrease) in cash, cash equivalents and restricted cash
62,464

 
56,418

Cash, cash equivalents and restricted cash at beginning of period
492,473

 
368,758

Cash, cash equivalents and restricted cash and at end of period
$
554,937


$
425,176


6
Table of Contents

 
Six Months Ended June 30,
 
2017
 
2016
Supplemental Cash Flow Information
 
 
 
Interest paid
$
103,159

 
$
100,521

Income taxes paid
1,455

 
1,312

Supplemental Disclosure of Non-Cash Investing and Financing Activity
 
 
 
Accrued but unpaid capital expenditures
$
12,818

 
$
7,817

Dividends and distributions declared but not paid
26,185

 
23,097

Supplemental Disclosure of Cash, Cash Equivalents and Restricted Cash
 
 
 
Cash and cash equivalents at beginning of period
$
347,091

 
$
215,078

Cash and cash equivalents at beginning of period included in assets held for sale
976

 
—

Restricted cash at beginning of period
144,014

 
153,680

Restricted cash at beginning of period included in assets held for sale
392

 
—

Cash, cash equivalents and restricted cash at beginning of period
$
492,473

 
$
368,758

 
 
 
 
Cash and cash equivalents at end of period
$
404,435

 
$
261,821

Cash and cash equivalents at end of period included in assets held for sale
—

 
155

Restricted cash at end of period
150,502

 
161,935

Restricted cash at end of period included in assets held for sale
—

 
1,265

Cash, cash equivalents and restricted cash at end of period
$
554,937

 
$
425,176


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 national average, and in all methods including direct real estate, equity, and debt. Other than Ashford Hospitality Trust, Inc.’s investment in Ashford Inc. common stock, 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, 2017, we owned interests in the following assets:
•
120 consolidated hotel properties, including 118 directly owned and two owned through a majority-owned investment in a consolidated entity, which represent 25,055 total rooms (or 25,028 net rooms excluding those attributable to our partners);
•
87 hotel condominium units at WorldQuest Resort in Orlando, Florida (“WorldQuest”);
•
a 29.6% ownership in Ashford Inc. common stock with a carrying value of $3.2 million and a fair value of $30.5 million; and
•
a 15.35% ownership in OpenKey with a carrying value of $2.4 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, 2017, our 120 hotel properties were leased or owned by our wholly 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, 2017, 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 82 of our 120 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 entities in which it has a controlling interest. All significant intercompany 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 2016 Annual Report to Stockholders on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 16, 2017.
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, (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. 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

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.
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, 2017, are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.
The following dispositions affect reporting comparability of our consolidated financial statements:
Hotel Property 
 
Location 
 
Type
 
Date
5-hotel portfolio (1)
 
Various
 
Disposition
 
June 1, 2016
Hampton Inn & Suites
 
Gainesville, FL
 
Disposition
 
September 1, 2016
SpringHill Suites Gaithersburg
 
Gaithersburg, MD
 
Disposition
 
October 1, 2016
2-hotel portfolio (2)
 
Palm Desert, CA
 
Disposition
 
October 7, 2016
Renaissance
 
Portsmouth, Virginia
 
Disposition
 
February 1, 2017
Embassy Suites
 
Syracuse, New York
 
Disposition
 
March 6, 2017
Crowne Plaza Ravinia
 
Atlanta, Georgia
 
Disposition
 
June 29, 2017
(1) The 5-hotel portfolio is comprised of the Courtyard Edison in Edison, New Jersey; the Residence Inn Buckhead in Atlanta, Georgia; the Courtyard Lake Buena Vista, the Fairfield Inn Lake Buena Vista and the SpringHill Suites Lake Buena Vista in Orlando, Florida.
(2) The 2-hotel portfolio is comprised of the Courtyard and Residence Inn in Palm Desert, California.
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. We early adopted Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash effective January 1, 2017. See discussion in recently adopted accounting standards below.
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. No impairment charges were recorded for investments in hotel properties for the three and six months ended June 30, 2017 and 2016.
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

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

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 4.
Investments in Unconsolidated Entities—Investments in entities in which we have ownership interests ranging from 15.4% to 29.6%, at June 30, 2017, 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, 2017 and 2016.
Our investments in certain unconsolidated entities are considered to be variable interests in the underlying entities. VIE’s, 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, (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.
Revenue Recognition—Hotel revenues, including room, food, beverage, and ancillary revenues such as long-distance telephone service, laundry, parking and space rentals, are recognized when services have been rendered. 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.
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 March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”), which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. We adopted this standard effective January 1, 2017, and the adoption of this standard did not have any impact on our financial position, results of operations or cash flows.
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which clarifies the presentation of restricted cash and restricted cash equivalents in the statements of cash flows. Under ASU 2016-18 restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. ASU 2016-18 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, 2017 on a retrospective basis. The adoption of this standard resulted in the inclusion of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows for all periods presented. As a result net cash provided by operating activities increased $15.9 million and net cash used in investing activities decreased $6.4 million in the six months ended June 30, 2016. Our beginning-of-period cash, cash equivalents and restricted cash increased $144.4 million and $153.7 million in 2017 and 2016, respectively.

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

Recently Issued Accounting Standards—In May 2014, the FASB issued 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 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. 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 FASB has also issued additional updates that further clarify the requirements of Topic 606 and provide implementation guidance. Early adoption is permitted for fiscal periods beginning after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are continuing to evaluate the effect of the standard on our consolidated financial statements, including as it pertains to accounting for real estate sales, and continue to evaluate the available transition methods. However, we have not yet selected a transition method. Based on our initial and ongoing assessment of ASU 2014-09, we do not currently believe there will be a material impact to the amount or timing of revenue recognition for rooms revenue, food and beverage revenue and other hotel revenue.
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 OCI 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 do not expect that ASU 2016-01 will have a material impact on our consolidated financial statements and related disclosures.
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. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The accounting for leases under which we are the lessor remains largely unchanged. While we are currently in the initial stages of assessing 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.
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 the 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 are currently evaluating the impact that ASU 2016-15 will have on our consolidated financial statements and related disclosures.
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

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

effective for fiscal years beginning after December 15, 2017. Early adoption is permitted. While we are currently evaluating the potential impact of the standard, we currently expect that 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).
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 Accounting Standard Codification (“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 approach. We are evaluating the impact that ASU 2017-05 will have on our consolidated financial statements and related disclosures.
In May 2017, the FASB issued ASU 2017-09 (“ASU 2017-09”), Scope of Modification Accounting, which amended Accounting Standards Code Topic 718. Presently, ASC 718, Stock Compensation, defines a modification as “a change in any of the terms or conditions of a share-based payment award,” The definition is broad and its interpretation in practice results in diversity as to whether a change to the terms or conditions of an award is substantive. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following remain unchanged immediately before and after the change of terms and conditions: (1) The award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), (2) The award’s vesting conditions, and (3) The award’s classification as an equity or liability instrument. ASU 2017-09 is effective for all entities whose fiscal year begins after December 15, 2017. Early adoption is permitted. We are evaluating the impact that ASU 2017-09 will have on our consolidated financial statements and related disclosures.
3. Investments in Hotel Properties, net
Investments in hotel properties, net consisted of the following (in thousands):
 
June 30, 2017
 
December 31, 2016
Land
$
657,144

 
$
663,013

Buildings and improvements
3,882,226

 
3,913,377

Furniture, fixtures, and equipment
423,459

 
434,091

Construction in progress
32,870

 
32,525

Condominium properties
11,817

 
11,558

Total cost
5,007,516

 
5,054,564

Accumulated depreciation
(938,364
)
 
(894,001
)
Investments in hotel properties, net
$
4,069,152

 
$
4,160,563

4. Hotel Dispositions and Assets Held For Sale
On June 1, 2016, the Company sold the Noble Five Hotels, a 5-hotel portfolio of select-service hotel properties for approximately $142.0 million in cash. The sale resulted in a gain of $22.8 million for the year ended December 31, 2016. The portfolio is comprised of the Courtyard Edison in Edison, New Jersey, the Residence Inn Buckhead in Atlanta, Georgia, the Courtyard Lake Buena Vista, the Fairfield Inn Lake Buena Vista and the SpringHill Suites Lake Buena Vista in Orlando, Florida.
On September 1, 2016, the Company sold the Hampton Inn Gainesville for approximately $26.5 million in cash. The sale resulted in a gain of $1.6 million for the year ended December 31, 2016.
On October 1, 2016, the Company sold the SpringHill Suites in Gaithersburg, Maryland for approximately $13.2 million. The consideration received from the sale was a combination of cash and approximately 2.0 million Class B common units of the Company’s operating partnership. The Class B operating partnership units were redeemed at a price of $5.74 per unit, or a price of $6.05 per common share after taking into account the current conversion factor. The Company also repaid approximately $10.4 million of debt associated with the hotel property. The sale resulted in a loss of $223,000 for the year ended December 31, 2016.
On October 7, 2016, the Company sold the Courtyard and Residence Inn in Palm Desert, California for $36.0 million. The consideration received from the sale was a combination of cash and assumption of approximately $23.8 million of mortgage debt associated with the hotel properties. The sale resulted in a gain of $7.5 million for the year ended December 31, 2016.

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

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 six months ended June 30, 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 6.
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 six months ended June 30, 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 6.
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 three and six months ended June 30, 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 6.
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, 2017 and 2016 (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Total hotel revenue
$
5,101

 
$
24,293

 
$
12,442

 
$
53,411

Total hotel operating expenses
(3,647
)
 
(16,164
)
 
(9,544
)
 
(34,932
)
Operating income (loss)
1,454

 
8,129

 
2,898

 
18,479

Property taxes, insurance and other
(224
)
 
(1,267
)
 
(613
)
 
(2,531
)
Depreciation and amortization
(1,217
)
 
(3,053
)
 
(2,588
)
 
(8,082
)
Gain (loss) on sale of hotel properties
14,092

 
23,094

 
14,009

 
23,094

Interest expense and amortization of loan costs
(896
)
 
(3,187
)
 
(2,361
)
 
(6,836
)
Write-off of loan costs and exit fees
(44
)
 
(3,941
)
 
(98
)
 
(3,941
)
Net income (loss)
13,165

 
19,775

 
11,247

 
20,183

Net (income) loss attributable to redeemable noncontrolling interests in operating partnership
(2,067
)
 
(2,763
)
 
(1,766
)
 
(2,820
)
Net income (loss) attributable to the Company
$
11,098

 
$
17,012

 
$
9,481

 
$
17,363

Assets Held For Sale
At December 31, 2016, the Renaissance Portsmouth and the Embassy Suites Syracuse were classified as held for sale in the consolidated balance sheet based on methodologies discussed in note 2. Since the sale of the properties did not represent a strategic shift that had (or will have had) a major effect on our operations or financial results, their results of operation were not reported as discontinued operations in the consolidated financial statements. Depreciation and amortization were ceased as of the date the assets were deemed held for sale. On February 1, 2017, we completed the sale of the Renaissance Portsmouth for approximately $9.2 million. On March 6, 2017, we completed the sale of the Embassy Suites Syracuse for approximately $8.8 million.

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

The major classes of assets and liabilities related to the assets held for sale included in the consolidated balance sheet at December 31, 2016 were as follows:
 
December 31, 2016
Assets
 
Investments in hotel properties, net
$
17,232

Cash and cash equivalents
976

Restricted cash
392

Accounts receivable
305

Inventories
96

Deferred costs, net
4

Prepaid expenses
309

Other assets
274

Assets held for sale
$
19,588

 
 
Liabilities
 
Indebtedness, net
$
35,679

Accounts payable and accrued expenses
1,323

Due to related party, net
45

Liabilities related to assets held for sale
$
37,047

5. Investment in Unconsolidated Entities
Ashford Inc.
We held approximately 598,000 shares of Ashford Inc. common stock, which represented an approximate 29.6% ownership interest in Ashford Inc. as of June 30, 2017, with a fair value of $30.5 million.
The following tables summarize the condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 and the condensed consolidated statements of operations of Ashford Inc. and our equity in earnings (loss) for the three and six months ended June 30, 2017 and 2016 (in thousands):
Ashford Inc.
Condensed Consolidated Balance Sheets
(unaudited)
 
June 30, 2017
 
December 31, 2016
Total assets
$
79,465

 
$
129,797

Total liabilities
$
45,003

 
$
38,168

Redeemable noncontrolling interests
1,766

 
1,480

Total stockholders’ equity of Ashford Inc.
32,093

 
37,377

Noncontrolling interests in consolidated entities
603

 
52,772

Total equity
32,696

 
90,149

Total liabilities and equity
$
79,465

 
$
129,797

Our ownership interest in Ashford Inc.
$
3,150

 
$
5,873


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

Ashford Inc.
Condensed Consolidated Statements of Operations
(unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Total revenue
$
19,639

 
$
18,152

 
$
32,652

 
$
31,561

Total operating expenses
(18,221
)
 
(20,344
)
 
(33,370
)
 
(34,265
)
Operating income (loss)
1,418

 
(2,192
)
 
(718
)
 
(2,704
)
Realized and unrealized gain (loss) on investment in unconsolidated entity, net
—

 
—

 
—

 
(1,460
)
Realized and unrealized gain (loss) on investments, net
(16
)
 
236

 
(91
)
 
(5,448
)
Interest expense and loan amortization costs
(15
)
 
—

 
(15
)
 
—

Other income (expense)
25

 
22

 
143

 
(80
)
Income tax (expense) benefit
(8,643
)
 
655

 
(9,273
)
 
15

Net income (loss)
(7,231
)
 
(1,279
)
 
(9,954
)
 
(9,677
)
(Income) loss from consolidated entities attributable to noncontrolling interests
190

 
(182
)
 
165

 
6,366

Net (income) loss attributable to redeemable noncontrolling interests
332

 
355

 
695

 
473

Net income (loss) attributable to Ashford Inc.
$
(6,709
)
 
$
(1,106
)
 
$
(9,094
)
 
$
(2,838
)
Our equity in earnings (loss) of Ashford Inc.
$
(2,014
)
 
$
(355
)
 
$
(2,723
)
 
$
(874
)
AQUA U.S. Fund
The AQUA U.S. Fund was managed by Ashford Investment Management, LLC (“AIM”), an indirect subsidiary of Ashford Inc. As of June 30, 2017 and December 31, 2016, and for the three and six months ended June 30, 2017 and 2016, the AQUA U.S. Fund was consolidated by Ashford Inc. The AQUA U.S. Fund invested substantially all of its assets in the Ashford Quantitative Alternatives Master Fund, LP (the “Master Fund”), previously named the AIM Real Estate Hedged Equity Master Fund, LP, and as a consequence of our investment in the AQUA U.S. Fund, we obtained an indirect interest in the Master Fund. Our maximum exposure of loss is limited to our investment in the AQUA U.S. Fund.
During the first quarter of 2017, we liquidated our investment in the AQUA U.S. Fund subject to a 5% hold back of $2.6 million, which was received during the second quarter of 2017.
The Master Fund generally invested in publicly traded equity securities and put and call options on publicly traded equity securities. The AQUA U.S. Fund recorded its investment in the Master Fund at its proportionate share of net assets. Income (loss) and distributions are allocated to the AQUA U.S. Fund’s partners based on their ownership percentage of the AQUA U.S. Fund. Our equity in loss in the AQUA U.S. Fund represented our share of the AQUA U.S. Fund’s loss for the three months ended March 31, 2017 and the three and six months ended June 30, 2016. We were not obligated to pay any portion of the management fee or the performance allocation in favor of the AQUA U.S. Fund’s investment manager and general partner, respectively, but did share pro rata in all other applicable expenses of the AQUA U.S. Fund. As of December 31, 2016, we owned an approximate 96.6% ownership interest in the AQUA U.S. Fund.

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

The following tables summarize the balance sheet as of December 31, 2016 and the statements of operations for the three months ended March 31, 2017 and the three and six months ended 2016 of the AQUA U.S. Fund (in thousands):
Ashford Quantitative Alternatives (U.S.), LP
Condensed Balance Sheet
(unaudited)
 
December 31, 2016
Total assets
$
55,022

Total liabilities
$
2,311

Partners’ capital
52,711

Total liabilities and partners’ capital
$
55,022

Our ownership interest in the AQUA U.S. Fund
$
50,890

Ashford Quantitative Alternatives (U.S.), LP
Condensed Statements of Operations
(unaudited)
 
Three Months Ended March 31,
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2016
Total investment income
$
97

 
$
34

 
$
52

Net expenses
99

 
(73
)
 
(262
)
Net investment income (loss)
196

 
(39
)
 
(210
)
Net unrealized gain (loss) on investments
50

 
(178
)
 
940

Net realized gain (loss) on investments
(100
)
 
470

 
(6,331
)
Net income (loss) attributable to the AQUA U.S. Fund
$
146

 
$
253

 
$
(5,601
)
Our equity in earnings (loss) of the AQUA U.S. Fund
$
52

 
$
184

 
$
(2,882
)
OpenKey
In 2016, the Company made investments totaling $2.3 million in OpenKey, which is controlled and consolidated by Ashford Inc., for a 13.3% ownership interest. On March 2, 2017, we invested an additional $650,000. As of June 30, 2017, the Company has made investments totaling $3.0 million, for a 15.35% ownership interest. Our investment is recorded as a component of “investment in unconsolidated entities” in our consolidated balance sheet and is accounted for under the equity method of accounting as we have been deemed to have significant influence over the entity under the applicable accounting guidance. As of June 30, 2017, our ownership interest had a carrying value of $2.4 million. For the three and six months ended June 30, 2017, our equity in earnings (loss) in the unconsolidated entity was a loss of $123,000 and $230,000, respectively. For both the three and six months ended June 30, 2016, our equity in earnings (loss) in the unconsolidated entity was a loss of $116,000.


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

6. Indebtedness
Indebtedness consisted of the following (in thousands):
Indebtedness
 
Collateral
 
Maturity
 
Interest Rate
 
June 30, 2017
 
December 31, 2016
Mortgage loan (2)
 
1 hotel
 
June 2017
 
5.98%
 
$
—

 
$
15,729

Mortgage loan (3)
 
1 hotel
 
July 2017
 
LIBOR (1) + 4.15%
 
35,200

 
35,200

Mortgage loan (3)
 
1 hotel
 
July 2017
 
LIBOR (1) + 5.10%
 
40,500

 
40,500

Mortgage loan (3)
 
8 hotels
 
July 2017
 
LIBOR (1) + 4.09%
 
144,000

 
144,000

Mortgage loan (4)
 
4 hotels
 
August 2017
 
LIBOR (1) + 4.38%
 
52,530

 
52,530

Mortgage loan (4) (5) (6)
 
6 hotels
 
August 2017
 
LIBOR (1) + 4.35%
 
280,421

 
301,000

Mortgage loan (7)
 
17 hotels
 
December 2017
 
LIBOR (1) + 5.52%
 
412,500

 
412,500

Mortgage loan (8)
 
2 hotels
 
January 2018
 
4.44%
 
—

 
105,047

Mortgage loan
 
1 hotel
 
January 2018
 
4.38%
 
95,202

 
96,169

Mortgage loan (9)
 
8 hotels
 
January 2018
 
LIBOR (1) + 4.95%
 
376,800

 
376,800

Mortgage loan (10)
 
5 hotels
 
February 2018
 
LIBOR (1) + 4.75%
 
200,000

 
200,000

Mortgage loan (11)
 
1 hotel
 
April 2018
 
LIBOR (1) + 4.95%
 
33,300

 
33,300

Mortgage loan (12) (13) (14) (15)
 
22 hotels
 
April 2018
 
LIBOR (1) + 4.39%
 
971,654

 
1,070,560

Mortgage loan (16)
 
1 hotel
 
May 2018
 
LIBOR (1) + 5.10%
 
25,100

 
25,100

Mortgage loan (17)
 
1 hotel
 
June 2018
 
LIBOR (1) + 5.10%
 
43,750

 
43,750

Mortgage loan (18)
 
1 hotel
 
August 2018
 
LIBOR (1) + 4.95%
 
12,000

1

12,000

Mortgage loan (7)
 
18 hotels
 
October 2018
 
LIBOR (1) + 4.55%
 
450,000

 
450,000

Mortgage loan
 
1 hotel
 
July 2019
 
4.00%
 
5,386

 
5,436

Mortgage loan (2)
 
1 hotel
 
May 2020
 
LIBOR (1) + 2.90%
 
16,100

 
—

Mortgage loan
 
1 hotel
 
November 2020
 
6.26%
 
96,045

 
96,873

Mortgage loan (8)
 
2 hotels
 
June 2022
 
LIBOR (1) + 3.00%
 
164,700

 
—

Mortgage loan
 
1 hotel
 
May 2023
 
5.46%
 
54,239

 
54,685

Mortgage loan
 
1 hotel
 
January 2024
 
5.49%
 
7,055

 
7,111

Mortgage loan
 
1 hotel
 
January 2024
 
5.49%
 
10,297

 
10,378

Mortgage loan
 
1 hotel
 
May 2024
 
4.99%
 
6,586

 
6,641

Mortgage loan
 
2 hotels
 
August 2024
 
4.85%
 
12,333

 
12,427

Mortgage loan
 
3 hotels
 
August 2024
 
4.90%
 
24,651

 
24,836

Mortgage loan
 
3 hotels
 
August 2024
 
5.20%
 
66,681

 
67,164

Mortgage loan
 
2 hotels
 
February 2025
 
4.45%
 
20,393

 
20,575

Mortgage loan
 
3 hotels
 
February 2025
 
4.45%
 
52,748

 
53,293

 
 
 
 
 
 
 
 
3,710,171

 
3,773,604

Premiums, net
 
 
 
 
 
 
 
1,941

 
3,523

Deferred loan costs, net
 
 
 
 
 
 
 
(13,679
)


(17,889
)
 
 
 
 
 
 
 
 
$
3,698,433

 
$
3,759,238

 
 

 
 
 

 


 


Indebtedness related to assets held for sale (14)
 
1 hotel
 
April 2017
 
LIBOR (1) + 4.39%
 
—

 
16,080

Indebtedness related to assets held for sale (6)
 
1 hotel
 
August 2017
 
LIBOR (1) + 4.35%
 
—

 
19,599

Indebtedness, net
 
 
 
 
 
 
 
$
3,698,433

 
$
3,723,559

____________________________________
(1) LIBOR rates were 1.224% and 0.772% at June 30, 2017 and December 31, 2016, respectively.
(2) On May 24, 2017, we refinanced this mortgage loan totaling $15.6 million set to mature in June 2017 with a new $16.1 million mortgage loan with a three-year initial term and two one-year extension options subject to the satisfaction of certain conditions. Through May 2019, the new mortgage loan is interest only and bears interest at a rate of LIBOR + 2.90%. Beginning on June 1, 2019, monthly principal payments based on a thirty-year amortization and a 6.00% interest rate are due.
(3) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in July 2017.
(4) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in August 2016.

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

(5) This mortgage loan had a $20.6 million pay down of principal related to the sale of the Embassy Suites Syracuse that was sold on March 6, 2017. See note 4.
(6) A portion of this mortgage loan at December 31, 2016 relates to the Embassy Suites Syracuse that was sold on March 6, 2017. See note 4.
(7) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions.
(8) On May 10, 2017, we refinanced this mortgage loan totaling $104.3 million set to mature in January 2018 with a new $181.0 million mortgage loan, of which our initial advance was $164.7 million. The new mortgage loan is interest only and bears interest at a rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due.
(9) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in January 2017.
(10) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions and a LIBOR floor of 0.20%. The second one-year extension period began in February 2017.
(11) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017.
(12) This mortgage loan has four one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in April 2017.
(13) This mortgage loan had a $20.2 million pay down of principal related to the sale of the Renaissance Portsmouth that was sold on February 1, 2017.
(14) A portion of this mortgage loan at December 31, 2016 relates to the Renaissance Portsmouth that was sold on February 1, 2017. See note 4.
(15) This mortgage loan had a $78.7 million pay down of principal related to the sale of the Crowne Plaza Ravinia that was sold on June 29, 2017. See note 4.
(16) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in May 2017.
(17) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in June 2017.
(18) This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.

On February 1, 2017, we repaid $20.2 million of principal on our mortgage loan partially secured by the Renaissance Portsmouth. This hotel property was sold on February 1, 2017.
On March 6, 2017, we repaid $20.6 million of principal on our mortgage loan partially secured by the Embassy Suites Syracuse. This hotel property was sold on March 6, 2017.
On May 10, 2017, we refinanced a $105.0 million mortgage loan, secured by the Renaissance Nashville in Nashville, Tennessee and the Westin in Princeton, New Jersey. The new mortgage loan totals $181.0 million, of which our initial advance was $164.7 million with future advances totaling $16.3 million as reimbursement for capital expenditures. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 3.00%. Beginning on July 1, 2020, quarterly principal payments of $750,000 are due. The stated maturity is June 2022, with no extension options.
On May 24, 2017, we refinanced a $15.7 million mortgage loan, secured by the Hotel Indigo (“Indigo Atlanta”) in Atlanta, Georgia. The new mortgage loan totals $16.1 million. The mortgage loan is interest only and provides for a floating interest rate of LIBOR + 2.90% for the first two years with a 30-year amortization schedule based on a 6% interest rate starting in the third year. The stated maturity is May 2020, with two one-year extension options.
On June 29, 2017, we repaid $78.7 million of principal on our mortgage loan partially secured by the Crowne Plaza Ravinia. This hotel property was sold on June 29, 2017.
During the three and six months ended June 30, 2017, we recognized premium amortization of $1.0 million and $1.6 million, respectively, and during the three and six months ended June 30, 2016, we recognized premium amortization of $524,000 and $1.0 million, respectively. The amortization of the premium is computed using a method that approximates the effective interest method, which is included in interest expense and amortization of premiums and loan costs in the consolidated statements of operations.
We are required to maintain certain financial ratios under various debt and related agreements. If we violate covenants in any debt or related agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of Ashford Trust or Ashford Trust OP, our operating partnership, and the liabilities of such subsidiaries do not constitute the obligations of Ashford Trust or Ashford Trust OP. As of June 30, 2017, we were in compliance in all material respects with all covenants or other requirements set forth in our debt and related agreements as amended.
7. Income (Loss) Per Share
Basic income (loss) per common share is calculated using the two-class method by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income (loss) per common share is calculated using the two-class method, or treasury stock method if more dilutive, and reflects the potential

18
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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares, whereby such exercise or conversion would result in lower income per share.
The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Income (loss) allocated to common stockholders:
 
 
 
 
 
 
 
Income (loss) attributable to the Company
$
10,184

 
$
30,753

 
$
(15,229
)
 
$
20,764

Less: Dividends on preferred stock
(10,956
)
 
(8,491
)
 
(21,912
)
 
(16,981
)
Less: Dividends on common stock
(11,439
)
 
(11,340
)
 
(22,877
)
 
(22,673
)
Less: Dividends on unvested performance stock units
(98
)
 
(40
)
 
(196
)
 
(80
)
Less: Dividends on unvested restricted shares
(253
)
 
(203
)
 
(458
)
 
(351
)
Less: Undistributed income allocated to unvested performance stock units
—

 
(6
)
 
—

 
—

Less: Undistributed income allocated to unvested shares
—

 
(187
)
 
—

 
—

Undistributed income (loss)
(12,562
)
 
10,486

 
(60,672
)
 
(19,321
)
Add back: Dividends on common stock
11,439

 
11,340

 
22,877

 
22,673

Distributed and undistributed income (loss) - basic and diluted
$
(1,123
)
 
$
21,826

 
$
(37,795
)
 
$
3,352

 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
Weighted average common shares outstanding - basic and diluted
95,320

 
94,474

 
95,086

 
94,309

 
 
 
 
 
 
 
 
Basic income (loss) per share:
 
 
 
 
 
 
 
Net income (loss) allocated to common stockholders per share
$
(0.01
)
 
$
0.23

 
$
(0.40
)
 
$
0.04

 
 
 
 
 
 
 
 
Diluted income (loss) per share:
 
 
 
 
 
 
 
Net income (loss) allocated to common stockholders per share
$
(0.01
)
 
$
0.23

 
$
(0.40
)
 
$
0.04

Due to the anti-dilutive effect, the computation of diluted income (loss) per share does not reflect adjustments for the following items (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Income (loss) allocated to common stockholders is not adjusted for:
 
 
 
 
 
 
 
Income (loss) allocated to unvested restricted shares
$
253

 
$
390

 
$
458

 
$
351

Income (loss) allocated to unvested performance stock units
98

 
46

 
196

 
80

Income (loss) attributable to noncontrolling interest in operating partnership units
231

 
4,376

 
(6,262
)
 
2,264

Total
$
582

 
$
4,812

 
$
(5,608
)
 
$
2,695

 
 
 
 
 
 
 
 
Weighted average diluted shares are not adjusted for:
 
 
 
 
 
 
 
Effect of unvested restricted shares
366

 
396

 
242

 
262

Effect of unvested performance stock units
2

 
30

 
21

 
15

Effect of assumed conversion of operating partnership units
17,284

 
18,844

 
17,274

 
18,943

Effect of incentive fee shares
285

 
—

 
292

 
—

Total
17,937

 
19,270

 
17,829

 
19,220


19
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ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

8. Derivative Instruments and Hedging
Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives currently include interest rate caps and interest rate floors. These derivatives are subject to master netting settlement arrangements. To mitigate the nonperformance risk, we routinely use a third party’s analysis of the creditworthiness of the counterparties, which supports our belief that the counterparties’ nonperformance risk is limited. All derivatives are recorded at fair value.
During the six months ended June 30, 2017, we entered into interest rate caps with notional amounts totaling $1.8 billion and strike rates ranging from 1.50% to 4.44%. These interest rate caps had effective dates from February 2017 to June 2017, maturity dates from February 2018 to June 2019, and a total cost of $550,000. These instruments were not designated as cash flow hedges. 
During the six months ended June 30, 2016, we entered into interest rate caps with notional amounts totaling $237.5 million and strike rates ranging from 2.25% to 4.50%. These interest rate caps had effective dates from February 2016 to March 2016, maturity dates from February 2017 to December 2017, and a total cost of $73,000. These instruments were not designated as cash flow hedges. 
As of June 30, 2017, we held interest rate caps with notional amounts totaling $3.6 billion and strike rates ranging from 1.50% to 4.45%. These instruments had maturity dates ranging from July 2017 to June 2019. These instruments cap the interest rates on our mortgage loans with principal balances of $3.2 billion and maturity dates from July 2017 to June 2022. As of June 30, 2017, we held interest rate floors with notional amounts totaling $6.0 billion and strike rates ranging from (0.25)% to 0%. These instruments have maturity dates ranging from April 2020 to July 2020.
Credit Default Swap Derivatives—A credit default swap is a derivative contract that functions like an insurance policy against the credit risk of an entity or obligation. The seller of protection assumes the credit risk of the reference obligation from the buyer (us) of protection in exchange for annual premium payments. If a default or a loss, as defined in the credit default swap agreements, occurs on the underlying bonds, then the buyer of protection is protected against those losses. The only liability for us, the buyer, is the annual premium and any change in value of the underlying CMBX index (if the trade is terminated prior to maturity). For all CMBX trades completed to date, we were the buyer of protection. Credit default swaps are subject to master-netting settlement arrangements and credit support annexes. Assuming the underlying bonds pay off at par over their remaining average life, our total exposure for these trades was approximately $7.5 million as of June 30, 2017. Cash collateral is posted by us as well as our counterparties. We offset the fair value of the derivative and the obligation/right to return/reclaim cash collateral. The change in market value of credit default swaps is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparties when the change in market value is over $250,000.
Options on Futures Contracts—During the six months ended June 30, 2016, we purchased options on Eurodollar futures for a total cost of $250,000 and maturity date of June 2017. There were no purchases during the six months ended June 30, 2017.
9. Fair Value Measurements
Fair Value Hierarchy—For disclosure purposes, financial instruments, whether measured at fair value on a recurring or nonrecurring basis or not measured at fair value, are classified in a hierarchy consisting of three levels based on the observability of valuation inputs in the market place as discussed below:
•
Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.
•
Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.
•
Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.

20
Table of Contents
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts/payments and the discounted expected variable cash payments/receipts. Fair values of interest rate caps, floors, flooridors, and corridors are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fell below the strike rates of the floors or rise above the strike rates of the caps. Variable interest rates used in the calculation of projected receipts and payments on the swaps, caps, and floors are based on an expectation of future interest rates derived from observable market interest rate curves (LIBOR forward curves) and volatilities (Level 2 inputs). We also incorporate credit valuation adjustments (Level 3 inputs) to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk.
Fair values of credit default swaps are obtained from a third party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty.
Fair values of interest rate floors are calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor. These expected future cash flows are probability-weighted projections based on the contract terms, accounting for both the magnitude and likelihood of potential payments, which are both computed using the appropriate LIBOR forward curve and market implied volatilities as of the valuation date (Level 2 inputs). 
Fair value of options on futures contracts is determined based on the last reported settlement price as of the measurement date (Level 1 inputs). These exchange-traded options are centrally cleared, and a clearinghouse stands in between all trades to ensure that the obligations involved in the trades are satisfied.
Fair values of marketable securities and liabilities associated with marketable securities, including public equity securities, equity put and call options, and other investments, are based on their quoted market closing prices (Level 1 inputs).
When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at June 30, 2017, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 1.224% to 1.726% for the remaining term of our derivatives. Credit spreads (Level 3 inputs) used in determining the fair values of hedge and non-hedge designated derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.

21
Table of Contents
ASHFORD HOSPITALITY TRUST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents our assets and liabilities measured at fair value on a recurring basis aggregated by the level within which measurements fall in the fair value hierarchy (in thousands):
 
 
Quoted Market Prices (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
 
Counterparty and Cash Collateral Netting(1)
 
Total
 
 
 
 
June 30, 2017:
 
 
 
 
 
 
 
 
 
 
 
Assets