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10-K
RLJ LODGING TRUST filed this Form 10-K on 03/01/2019
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2018 and 2017. For the year ended December 31, 2018, approximately $3.7 million of the amounts included in accumulated other comprehensive income were reclassified into interest expense. For the year ended December 31, 2017, approximately $7.4 million of the amounts included in accumulated other comprehensive loss were reclassified into interest expense. Approximately $8.9 million of the unrealized gains included in accumulated other comprehensive income at December 31, 2018 is expected to be reclassified into interest expense within the next 12 months.

11. Fair Value
 
Fair Value Measurement
 
Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market.  The fair value hierarchy has three levels of inputs, both observable and unobservable:
 
Level 1 — Inputs include quoted market prices in an active market for identical assets or liabilities.
 
Level 2 — Inputs are market data, other than Level 1, that are observable either directly or indirectly.  Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an inactive market, and other observable information that can be corroborated by market data.

Level 3 — Inputs are unobservable and corroborated by little or no market data.
 
Fair Value of Financial Instruments
 
The Company used the following market assumptions and/or estimation methods:
 
Cash and cash equivalents, restricted cash reserves, hotel and other receivables, accounts payable and other liabilities — The carrying amounts reported in the consolidated balance sheets for these financial instruments approximate fair value because of their short term maturities. 

Debt — The Company estimated the fair value of the Senior Notes by using publicly available trading prices, market interest rates, and spreads for the Senior Notes, which are Level 2 and Level 3 inputs in the fair value hierarchy. The Company estimated the fair value of the Revolver and Term Loans by using a discounted cash flow model and incorporating various inputs and assumptions for the effective borrowing rates for debt with similar terms, which are Level 3 inputs in the fair value hierarchy. The Company estimated the fair value of the mortgage loans using a discounted cash flow model and incorporating various inputs and assumptions for the effective borrowing rates for debt with similar terms and the loan to estimated fair value of the collateral, which are Level 3 inputs in the fair value hierarchy.
 
The fair value of the Company's debt was as follows (in thousands):
 
December 31, 2018
 
December 31, 2017
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Senior Notes
$
505,322

 
$
492,554

 
$
1,062,716

 
$
1,038,892

Revolver and Term Loans, net
1,169,165

 
1,175,000

 
1,170,954

 
1,179,052

Mortgage loans, net
528,189

 
528,404

 
646,818

 
643,078

Debt, net
$
2,202,676

 
$
2,195,958

 
$
2,880,488

 
$
2,861,022


F-30

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