# Interest expense

Interest expense increased \$4.6 million, or 8.8%, to \$57.4 million for the year ended December 31, 2014 from\$52.8 million for the year ended December 31, 2013. The increase in interest expense was primarily the result of a net increase in debt to \$1,295 million as of December 31, 2014 from \$1,280 million as of December 31, 2013, which included a full year of interest expense related to the \$352 million in new financings entered into during 2013 and the addition of \$123 million in new financings during 2014, which was offset by \$115 million in debt extinguishments primarily in the fourth quarter of 2014 and a decrease in our weighted average interest rate from 4.7% in 2013 to 4.0% in 2014.

# Loss on extinguishment of debt

Loss on extinguishment of debt increased to \$1.7 million for the year ended December 31, 2014. This was primarily the result of the prepayment penalties and other costs associated with the repayment of mortgage loans during the year.

# Equity in earnings (loss), (impairment) of investment and gain on consolidation of unconsolidated entity, net

Equity in earnings (loss) of investment in unconsolidated entities increased \$4.2 million for the year ended December 31, 2014 from a loss of \$0.03 million for the year ended December 31, 2013. During the year ended December 31, 2014, the Company bought out its partner’s interest in an unconsolidated entity that owned one hotel property, and began consolidating the operating results of the hotel resulting in a gain of \$4.5 million upon consolidation of the related assets and liabilities, which was offset by \$0.3 million representing the Company’s share of equity in losses prior to the buyout of the remaining partner’s interest. The respective hotel property was later sold as part of the Suburban Select Service Portfolio in November 2014. During the year ended December 31, 2013, the Company recognized an other than temporary impairment in its equity investment of\$1.0 million.

# Income tax expense

Income tax expense increased \$2.2 million to \$5.9 million for the year ended December 31, 2014 from\$3.6 million for the year ended December 31, 2013. The increase was mainly due to one-time tax expenses related to organizational re-structuring of our TRS leases.

# Net income (loss) from discontinued operations

Net income (loss) from discontinued operations increased by \$80.7 million to income of \$75.1 million for the year ended December 31, 2014 from a loss of \$5.6 million for the year ended December 31, 2013. During the year ended December 31, 2014 and 2013, there were 52 properties reflected in discontinued operations. Effective January 1, 2014, we elected to early adopt ASU 2014-08. Under the new guidance, only disposals representing a strategic shift that had (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. On September 17, 2014, InvenTrust entered into a definitive asset purchase agreement to sell the Suburban Select Service Portfolio, which was sold on November 17, 2014. Prior to the sale transaction, we oversaw the Suburban Select Service Portfolio. We believe this sale represented a strategic shift away from suburban select service hotels that had a major effect on our results and operations, and qualified as discontinued operations under ASU No. 2014-08. The operations of these hotels are reflected as discontinued operations on the combined consolidated statements of operations and comprehensive income for the years ended December 31, 2014 and 2013, which resulted in net income of \$75.1 million, including a gain on sale of\$135.7 million for the year ended December 31, 2014.

# Non-GAAP Financial Measures

We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our operating performance: EBITDA, Adjusted EBITDA, FFO and Adjusted FFO. These non-GAAP financial