Acquisitions

On August 15, 2014, we acquired the 106-room Inn at Key West located in Key West, Florida for a contractual purchase price of $47.5 million. The acquisition was funded with corporate cash on hand. We retained the existing hotel operator, Remington Management, LP, under an interim management agreement. In December 2014, we entered into a 10-year management agreement with Remington to continue to operate the hotel.

On August 29, 2014, we completed the acquisition of the newly constructed, 282-room Hilton Garden Inn Times Square Central in New York City. We had entered into the purchase and sale agreement to acquire this hotel upon its completion for a fixed purchase price of $127.2 million in early 2011. We had previously funded total purchase deposits of $26.9 million. The balance of the purchase price was funded with corporate cash on hand. The hotel opened on September 1, 2014 and is operated by Highgate Hotels, LP, subject to a franchise license agreement with Hilton Garden Inns Franchise LLC. The hotel meets the definition of a business and the acquisition was accounted for as a business combination. As such, the assets acquired were recorded at their fair values, which exceeded our contractual cost. During the three years between the date of the purchase and sale agreement and the date of acquisition, the real estate market for hotels located in Manhattan experienced an increase in valuations due to improved economic conditions in the market and the overall economy. This resulted in an increase in the fair value the hotel at the time of acquisition compared with our contractual purchase price, which resulted in a gain of approximately $23.9 million upon acquisition.

On December 3, 2014, we acquired the 432-room Westin Fort Lauderdale Beach Resort located in Fort Lauderdale, Florida for a contractual purchase price of $149.0 million. The acquisition was funded with a combination of corporate cash on hand and a draw on our senior unsecured credit facility. Upon acquisition of the hotel, we entered into a 10-year management agreement with HEI Hotels & Resorts and a 20-year franchise agreement with Starwood to license the hotel under the Westin brand.

The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed in our acquisitions (in thousands):



	Inn at Key West		Hilton Garden Inn Times Square Central		Westin Fort Lauderdale Beach Resort
Land	$	32,888	$	60,300	$	54,293
Building and improvements	13,371		88,896		83,227
Furnitures, fixtures and equipment	1,241		6,204		11,480
Total fixed assets	47,500		155,400		149,000
Other assets and liabilities, net	326		370		12
Total	$	47,826	$	155,770	$	149,012

The acquired properties are included in our results of operations from the date of acquisition. The following unaudited pro forma results of operations (in thousands, except per share data) reflect the acquisitions of the Inn at Key West and the Westin Fort Lauderdale Beach Resort as if they had occurred on January 1, 2013. The following pro forma results of operations do not include adjustments reflecting the acquisition of the Hilton Garden Inn Times Square Central, since the hotel opened on September 1, 2014. The pro forma information is not necessarily indicative of the results that actually would have occurred nor does it indicate future operating results.



	Years Ended December 31,
	2014		2013
	(unaudited)
Revenues	$	918,273	$	846,099
Income from continuing operations	168,754		29,074
Net income	168,754		54,312
Basic earnings per share:
Continuing operations	$	0.86	$	0.15
Net income	$	0.86	$	0.28
Diluted earnings per share:
Continuing operations	$	0.86	$	0.15
Net income	$	0.86	$	0.28

For the year ended December 31, 2014, our consolidated statement of operations include $15.2 million of revenues and $4.5 million of net income related to the operations of the hotels acquired in 2014.

On February 6, 2015, we acquired the 157-room Shorebreak Hotel located in Huntington Beach, California for a contractual purchase price of $58.5 million. The acquisition was funded with corporate cash on hand. Upon acquisition of the hotel, we entered into a 10-year management agreement with Kimpton Hotels.