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Other Investments
12 Months Ended
Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]  
Other Investments
Note 6. Other Investments
Equity method investment
We account for our 34.0% non-controlling interest in Sonesta under the equity method of accounting. Our investment in Sonesta had a carrying value of $112,617 and $62,687 as of December 31, 2022 and 2021, respectively. These amounts are included in other assets in our consolidated balance sheets. The cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total shareholders’ equity book value on the date of acquisition, February 27, 2020, by an aggregate of $8,000. As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 31 years, the weighted average remaining useful life of the real estate assets and intangible assets and liabilities owned by Sonesta as of the date of our acquisition. We recorded amortization of the basis difference of $260, $260 and $217 in the years ended December 31, 2022, 2021 and 2020, respectively. We recognized earnings of $2,856 and losses of $941 and $9,910 related to our investment in Sonesta for the years ended December 31, 2022, 2021 and 2020, respectively. These amounts are included in equity in earnings (losses) of an investee in our consolidated statements of comprehensive income.
We recorded a liability of $42,000 for the fair value of our initial investment in Sonesta, as no cash consideration was exchanged related to the modification of our management agreement with, and investment in, Sonesta. This liability for our investment in Sonesta is included in accounts payable and other liabilities in our consolidated balance sheet and is being amortized on a straight-line basis through January 31, 2037, as a reduction to hotel operating expenses in our consolidated statements of comprehensive income (loss). We reduced hotel operating expenses by $2,484, $2,484, and $2,070 for the years ended December 31, 2022, 2021 and 2020, respectively, for amortization of this liability. As of December 31, 2022 and 2021, the unamortized balance of this liability was $34,963 and $37,447, respectively.
In 2021, we funded a $25,443 capital contribution to Sonesta related to its acquisition of Red Lion Hotels Corporation to maintain our pro rata ownership. In 2022, we funded an aggregate of $45,470 of capital contributions to Sonesta related to Sonesta’s acquisition of a portfolio of four hotels located in New York, New York. We continue to maintain our 34.0% ownership in Sonesta after giving effect to these fundings.
See Note 10 for further information regarding our relationship, agreements and transactions with Sonesta.
Investment in equity securities
As of both December 31, 2022 and 2021, we owned approximately 7.8% of TA’s outstanding shares of common stock, and reported this investment at fair value based on quoted market prices (Level 1 inputs). Our TA shares had a carrying value of $53,055 and $61,159 as of December 31, 2022 and 2021, respectively. Our historical cost basis for these shares was $24,418 as of both December 31, 2022 and 2021. We recorded unrealized losses of $8,104 and gains of $22,535 for the years ended December 31, 2022 and 2021, respectively, to adjust the carrying value of our investment in shares of TA common stock to its fair value. See Notes 4, 5, 10, 14 and 15 for further information regarding our relationships, agreements and transactions with and our investment in, TA.