|
4. Discontinued Operations
On November 16, 2009, RLJ Development, through wholly-owned subsidiaries, entered into a purchase and sale agreement to sell six hotels. The assets were reclassified as held for sale and the operating results for the hotels were reclassified to discontinued operations. On April 23, 2010, RLJ Development completed the sale of the six hotels for a total sale price of $73.5 million. The sale resulted in a gain of approximately $23.7 million.
On April 23, 2010, the Company defeased five individual mortgages associated with the aforementioned six hotels sold on April 23, 2010 by replacing the original collateral with government securities. These loans carried an outstanding balance of $34.0 million at April 23, 2010. On April 28, 2010, the Company fully repaid the remaining outstanding $8.5 million mortgage loan associated with the six hotels sold on April 23, 2010, including a mortgage prepayment penalty totaling $0.2 million.
Operating results of discontinued operations were as follows (in thousands):
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
|
|
|
|
2010 |
|
2010 |
|
|
Net revenues |
|
$ |
1,335 |
|
$ |
6,774 |
|
|
Operating expenses |
|
1,011 |
|
4,776 |
|
|
Operating income |
|
324 |
|
1,998 |
|
|
Interest expense |
|
(2,341 |
) |
(3,210 |
) |
|
Net income from discontinued operations, before gain on sale |
|
(2,017 |
) |
(1,212 |
) |
|
Gain on sale of properties |
|
23,715 |
|
23,715 |
|
|
Net income from discontinued operations |
|
$ |
21,698 |
|
$ |
22,503 | |