ALISO VIEJO, Calif., Nov. 4, 2010-- Sunstone Hotel Investors, Inc.
(the "Company") (NYSE: SHO) today announced results for the third quarter
ended September 30, 2010.
RevPAR and hotel EBITDA margin information presented reflect
the Company's 30 hotel comparable portfolio on a pro forma basis
(excludes the Royal Palm Miami Beach).
Third Quarter 2010 Operational Results:
- Total revenue was $177.7 million.
- Comparable Portfolio RevPAR was $108.07.
- Income available to common stockholders was $18.3 million.
- Income available to common stockholders per diluted share
was $0.19.
- Adjusted EBITDA was $38.9 million.
- Pro forma Adjusted EBITDA was $34.5
million.
- Adjusted FFO available to common stockholders was $13.7 million.
- Adjusted FFO available to common stockholders per diluted
share was $0.14.
- Comparable Portfolio hotel EBITDA margin was 24.2%.
Art Buser, President and Chief
Executive Officer, stated, "While the current environment
continues to produce quarter-to-quarter volatility in our results as
evidenced in the third quarter, the longer term fundamentals remain
positive. Looking to the fourth quarter and into 2011, we are
seeing strong booking trends, which we expect to result in a
reacceleration of RevPAR growth. With third quarter occupancy of 73.5%,
our hotels are well positioned to drive rate and maximize cash flow. We
are excited to announce our new relationship with the Denihan
Hospitality Group who will manage the Royal Palm Miami Beach hotel.
Going forward, we will focus on investing in our portfolio, while
working to improve our liquidity and credit profile. We will
continue to pick our spots in selectively acquiring hotels."
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SELECTED
FINANCIAL DATA
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($ in
millions, except RevPAR and per share amounts)
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(unaudited)
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Three
Months Ended September 30,
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Nine
Months Ended September 30,
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2010
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2009
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%
Change
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2010
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2009
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%
Change
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Total
Revenue
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$
177.7
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$
170.1
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4.5%
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$
519.5
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$
517.6
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0.4%
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Comparable
Portfolio RevPAR (1)
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$
108.07
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$
104.58
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3.3%
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$
104.81
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$
103.37
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1.4%
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Comparable
Portfolio hotel EBITDA margin (1)
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24.2%
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24.2%
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— bps
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24.3%
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24.7%
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(40)
bps
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Income
available (loss attributable) to common stockholders
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$
18.3
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$
(23.1)
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$
(12.6)
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$
(157.7)
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Income
available (loss attributable) to common stockholders per diluted share
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$
0.19
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$
(0.31)
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$
(0.13)
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$
(2.53)
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EBITDA
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$
70.7
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$
37.0
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$
148.0
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$
24.5
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Adjusted
EBITDA
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$
38.9
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$
40.1
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$
113.3
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$
123.8
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FFO
available to common stockholders
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$
44.3
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$
5.0
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$
63.2
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$
(55.7)
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Adjusted
FFO available to common stockholders
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$
13.7
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$
10.3
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$
35.6
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$
31.0
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FFO
available to common stockholders per diluted share (2)
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$
0.45
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$
0.07
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$
0.65
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$
(0.89)
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Adjusted
FFO available to common stockholders per diluted share (2)
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$
0.14
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$
0.14
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$
0.36
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$
0.50
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(1)
Includes the 30 "comparable" hotels held for investment by the Company
as of September 30, 2010, excluding the Royal Palm Miami Beach which is
being repositioned beginning in 2010, and the Mass Mutual eight hotels
reclassified as "Operations Held for Non-Sale Disposition" on the
Company's balance sheets and statements of operations. Includes the
Renaissance Westchester for all periods presented.
(2)
Reflects Series C convertible preferred stock on a "non-converted"
basis. On an "as-converted" basis, FFO available to common stockholders
per diluted share is $0.45 and $0.09, respectively, for the three
months ended September 30, 2010 and 2009, and $0.67 and $(0.76),
respectively, for the nine months ended September 30, 2010 and 2009. On
an "as-converted" basis, Adjusted FFO available to common stockholders
per diluted share is $0.15 for both the three months ended September
30, 2010 and 2009, and $0.40 and $0.54, respectively, for the nine
months ended September 30, 2010 and 2009.
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The Company has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q for the quarter ended September 30, 2010.
Disclosure regarding the non-GAAP financial measures in this
release is included on page 5. Reconciliations of non-GAAP financial
measures to the most comparable GAAP measure for each of the periods
presented are included on pages 8 through 13 of this release.
Finance Update
Credit Facility – On November
1, 2010, the Company entered into a new $150.0
million senior corporate credit facility. The interest rate for
the facility ranges from 325 to 425 basis points over LIBOR, depending
on the overall leverage of the Company. The initial term of the
facility is three years with an option to extend for an additional one
year. Subject to approval by the lender group, the facility may be
increased to up to $250.0 million.
The Company expects to have full funds availability upon the
delivery of certain post closing items during the fourth quarter, 2010.
The facility contains customary events of default relating to payments
and breaches of representations and warranties.
Hilton Times Square Mortgage Debt – On November 1, 2010, the Company entered into a
new $92.5 million non-recourse mortgage
("Mortgage") on its Hilton Times Square.
The Mortgage matures in 2020 and bears a fixed interest rate of 4.97%,
with scheduled monthly principal and interest amounts based on a
thirty-year amortization. The proceeds from the Mortgage were used in
part to repay the maturing $81.0 million
mortgage, which bore an interest rate of 5.915%. Excess proceeds were
retained for general corporate purposes. The Mortgage contains
customary events of default relating to payments and breaches of
representations and warranties.
Mass Mutual – On November 1,
2010, the Company completed its previously announced deed back
of the Mass Mutual eight hotels, and titles to the hotels were
transferred to the lender. The Company will record a gain on
extinguishment of debt to discontinued operations in the fourth quarter
of 2010. A portion of this gain will be deferred until all significant
contingencies are resolved, and the net remaining assets and
liabilities will be removed from its balance sheet. This transaction
completes the Company's 2009 secured debt restructuring program.
Ken Cruse, Chief Financial
Officer, stated, "The finance transactions announced today have
increased our liquidity, reduced our average interest rate and extended
the term to maturity of our indebtedness, all of which have improved
our financial flexibility and allowed us to move closer to our goal of
reinstating cash common dividends."
Balance Sheet/Liquidity Update
As of September 30, 2010, the
Company had approximately $143.5 million
of cash and cash equivalents, including restricted cash of $72.4 million. The Company intends to use a
portion of its cash balance for acquisition opportunities.
As of September 30, 2010, total
assets were $2.4 billion, including $2.0 billion of net investments in hotel
properties, total debt excluding debt in the Company's secured debt
restructuring program was $1.1 billion
and stockholders' equity was $0.9 billion.
Financial Covenants
The Company is subject to compliance with various covenants
under its Series C preferred stock and its 4.6% Exchangeable Senior
Notes due 2027 (the "Senior Notes"). As of September
30, 2010, the Company was in compliance with all covenants
related to its Series C preferred stock and its Senior Notes.
Capital Improvements
During the third quarter of 2010, the Company invested $14.3 million in capital improvements to its
portfolio. In light of the industry recovery and in order to
position its portfolio for growth, the Company has expanded its
2010/2011 capital investment plan and currently intends to invest
approximately $39.0 million in capital
improvement projects during the fourth quarter of 2010, for a total of $70.0 million for the year. The Company's
capital improvements program is aimed at value-adding renovation and
repositioning projects, including the following:
Marriott Tysons Corner –
Renovation of guest rooms and building exterior started late in the
second quarter 2010.
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Renaissance Washington D.C. –
Renovation of guest rooms and certain meeting space started in the
third quarter 2010.
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Embassy Suites Chicago –
Renovation of guest suites, corridors and lobby to begin in the fourth
quarter 2010.
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Kahler
Grand Rochester –
Renovation of deluxe rooms, meeting space and certain public areas to
begin in late 2010 concurrent with the installation of new energy
efficient windows.
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Royal Palm Miami Beach
During the fourth quarter 2010, the Company agreed to terms
with the Denihan Hospitality Group to manage the Royal Palm Miami Beach
("Hotel"). The Hotel is currently in the planning and permitting stage
of a complete renovation and repositioning program that is expected to
commence during the fourth quarter of 2010.
Dividend Update
On October 26, 2010, the
Company's board of directors declared a cash dividend of $0.50 per share payable to its Series A
cumulative redeemable preferred stockholders and a cash dividend of $0.393 per share payable to its Series C
cumulative convertible redeemable preferred stockholders. The dividends
will be paid on January 15, 2011 to
stockholders of record on December 31,
2010. No dividend was declared on the Company's common stock.
Subject to certain limitations, the Company intends to make
dividends on its stock in amounts equivalent to 100% of its annual
taxable income. The level of any future dividends will be determined by
the Company's board of directors after considering taxable income
projections, expected capital requirements, and risks affecting the
Company's business. In light of the Company's intent to
distribute 100% of its annual taxable income, future dividends may be
reduced from past levels, or eliminated entirely. Dividends may
be made in the form of cash or a combination of cash and stock
consistent with Internal Revenue Code regulations.
Fourth Quarter Outlook
The Company is providing guidance for the fourth quarter 2010
at this time, but does not undertake to make updates for any subsequent
developments in its business. Achievement of the anticipated
results is subject to risks and uncertainties, including those
disclosed in the Company's filings with the Securities and Exchange
Commission. The Company's guidance does not take into account any
additional hotel acquisitions, dispositions or financings during
2010. As the level of demand for U.S. lodging is highly
correlated to the overall U.S. economy, changes in U.S. economic
performance could have a material effect on the Company's results of
operations.
Guidance includes the Company's 31 hotels except for RevPAR,
which excludes the Royal Palm Miami Beach due to repositioning
beginning in 2010. For the fourth quarter 2010:
- Comparable RevPAR growth is expected to be 5.0% to 7.0%;
- Loss attributable to common stockholders is expected to be
approximately $5.7 million to $9.7 million;
- Adjusted EBITDA is expected to be $38.0
million to $42.0 million;
- Adjusted FFO available to common stockholders is expected
to be approximately $14.9 million to $18.9
million; and
- Adjusted FFO available to common stockholders per diluted
share is expected to be approximately $0.15 to
$0.19.
Earnings Call
The Company will host a conference call to discuss third
quarter results on November 4, 2010, at 12:00 p.m. EDT (9:00
a.m. PDT). A live web cast of the call will be available via the
Investor Relations section of the Company's website.
Alternatively, investors may dial 1-800-762-8779 (for domestic
callers) or 1-480-629-9771 (for international callers) with passcode
#4371239. A replay of the web cast will also be archived on the website.
About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. ("Sunstone") is a lodging real
estate investment trust ("REIT") that owns 31 hotels comprised of
11,722 rooms. Sunstone's hotels are primarily in the upper
upscale segment and are generally operated under nationally recognized
brands, such as Marriott, Fairmont, Hilton and Hyatt. For further
information, please visit Sunstone's website at www.sunstonehotels.com.
This press release contains forward-looking statements within
the meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "plan," "predict," "project,"
"should," "will" and other similar terms and phrases, including
references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors that
may cause the actual results to differ materially from those
anticipated at the time the forward-looking statements are made. These
risks include, but are not limited to: volatility in the debt or equity
markets affecting our ability to acquire or sell hotel assets; national
and local economic and business conditions, including the likelihood of
a prolonged U.S. recession; the ability to maintain sufficient
liquidity and our access to capital markets; potential terrorist
attacks, which would affect occupancy rates at our hotels and the
demand for hotel products and services; operating risks associated with
the hotel business; risks associated with the level of our indebtedness
and our ability to meet covenants in our debt and equity agreements;
relationships with property managers and franchisors; our ability to
maintain our properties in a first-class manner, including meeting
capital expenditure requirements; our ability to compete effectively in
areas such as access, location, quality of accommodations and room rate
structures; changes in travel patterns, taxes and government
regulations, which influence or determine wages, prices, construction
procedures and costs; our ability to identify, successfully compete for
and complete acquisitions; the performance of hotels after they are
acquired; necessary capital expenditures and our ability to fund them
and complete them with minimum disruption; our ability to continue to
satisfy complex rules in order for us to qualify as a REIT for federal
income tax purposes; and other risks and uncertainties associated with
our business described in the Company's filings with the Securities and
Exchange Commission. Although the Company believes the expectations
reflected in such forward-looking statements are based upon reasonable
assumptions, it can give no assurance that the expectations will be
attained or that any deviation will not be material. All
forward-looking information in this release is as of November 4, 2010, and the Company undertakes
no obligation to update any forward-looking statement to conform the
statement to actual results or changes in the Company's expectations.
This release should be read in conjunction with the
consolidated financial statements and notes thereto included in our
most recent reports on Form 10-K and Form 10-Q. Copies of these reports
are available on our website at www.sunstonehotels.com
and through the SEC's Electronic Data Gathering Analysis and Retrieval
System ("EDGAR") at www.sec.gov.
Non-GAAP Financial Measures
We present the following non-GAAP financial measures that we
believe are useful to investors as key measures of our operating
performance: (1) Earnings Before Interest Expense, Taxes, Depreciation
and Amortization, or EBITDA; (2) Adjusted EBITDA (as defined below);
(3) Funds From Operations, or FFO; (4) Adjusted FFO (as defined below);
and (5) comparable portfolio hotel EBITDA and comparable portfolio
hotel EBITDA margin for the purpose of our operating margins.
EBITDA represents income available (loss attributable) to
common stockholders excluding: (1) preferred stock dividends; (2)
interest expense (including prepayment penalties, if any); (3)
provision for income taxes, including income taxes applicable to sale
of assets; and (4) depreciation and amortization. In addition, we have
presented Adjusted EBITDA, which excludes: (1) amortization of deferred
stock compensation; (2) the impact of any gain or loss from asset
sales; (3) impairment charges; and (4) other adjustments we have
identified in this release. We believe EBITDA and Adjusted EBITDA are
useful to investors in evaluating our operating performance because
these measures help investors evaluate and compare the results of our
operations from period to period by removing the impact of our capital
structure (primarily interest expense and preferred stock dividends)
and our asset base (primarily depreciation and amortization) from our
operating results. We also use EBITDA and Adjusted EBITDA as measures
in determining the value of hotel acquisitions and dispositions.
Reconciliations of income available (loss attributable) to common
stockholders to EBITDA and Adjusted EBITDA are set forth on pages 8
through 11. Reconciliations and the components of comparable
portfolio hotel EBITDA and comparable portfolio hotel EBITDA margin are
set forth on pages 12 and 13. We believe comparable portfolio hotel
EBITDA and comparable portfolio hotel EBITDA margin are also useful to
investors in evaluating our property-level operating performance.
We compute FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts, or NAREIT, an
industry trade group. The Board of Governors of NAREIT in its March 1995 White Paper (as clarified in November 1999 and April
2002) defines FFO to mean income available (loss attributable)
to common stockholders (computed in accordance with GAAP), excluding
gains and losses from sales of property, plus real estate-related
depreciation and amortization (excluding amortization of deferred
financing costs), and after adjustment for unconsolidated partnerships
and joint ventures. We also present Adjusted FFO, which excludes
prepayment penalties, written-off deferred financing costs, impairment
losses and other adjustments we have identified in this release. We
believe that the presentation of FFO and Adjusted FFO provide useful
information to investors regarding our operating performance because
they are measures of our operations without regard to specified
non-cash items such as real estate depreciation and amortization, gain
or loss on sale of assets and certain other items which we believe are
not indicative of the performance of our underlying hotel properties.
We believe that these items are more representative of our asset
base and our acquisition and disposition activities than our ongoing
operations. We also use FFO as one measure in determining our results
after taking into account the impact of our capital structure.
Reconciliations of income available (loss attributable) to common
stockholders to FFO and Adjusted FFO are set forth on pages 8 through
11.
The revenue and expense items associated with our two
commercial laundry facilities and the eight hotel properties held for
non-sale disposition, any guaranty payments, and other miscellaneous
non-hotel items have been shown below the hotel EBITDA line in
presenting comparable portfolio hotel EBITDA margins. Management
believes the calculation of comparable portfolio hotel EBITDA results
in a more accurate presentation of hotel EBITDA margins of the
Company's 30 hotel comparable portfolio. See pages 12 and 13 for
reconciliations of comparable portfolio hotel EBITDA to the comparable
GAAP measure. Our 30 hotel comparable portfolio includes all hotels
held for investment as of September 30, 2010,
less the Royal Palm Miami Beach, which is being repositioned beginning
in 2010. The 30 hotel comparable portfolio also includes operating
results for the Renaissance Westchester for all of 2009 and during 2010
while the hotel was held in receivership prior to our reacquisition of
the hotel on June 14, 2010.
We caution investors that amounts presented in accordance with
our definitions of EBITDA, Adjusted EBITDA, FFO, Adjusted FFO,
comparable portfolio hotel EBITDA and comparable portfolio hotel EBITDA
margin may not be comparable to similar measures disclosed by other
companies, because not all companies calculate these non-GAAP measures
in the same manner. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO,
comparable portfolio hotel EBITDA and comparable portfolio hotel EBITDA
margin should not be considered as an alternative measure of our net
income (loss), operating performance, cash flow or liquidity. EBITDA,
Adjusted EBITDA, FFO, Adjusted FFO, comparable portfolio hotel EBITDA
and comparable portfolio hotel EBITDA margin may include funds that may
not be available for our discretionary use due to functional
requirements to conserve funds for capital expenditures and property
acquisitions and other commitments and uncertainties. Although we
believe that EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, comparable
portfolio hotel EBITDA and comparable portfolio hotel EBITDA margin can
enhance an investor's understanding of our results of operations, these
non-GAAP financial measures, when viewed individually, are not
necessarily a better indicator of any trend as compared to GAAP
measures such as net income (loss) or cash flow from operations. In
addition, you should be aware that adverse economic and market
conditions may harm our cash flow.
Sunstone
Hotel Investors, Inc.
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Consolidated
Balance Sheets
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(In
thousands, except share data)
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September
30,
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December
31,
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2010
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2009
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(unaudited)
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Assets
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Current
assets:
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Cash
and cash equivalents
|
$
71,089
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$
353,255
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Restricted
cash
|
72,388
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|
36,858
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Accounts
receivable, net
|
20,246
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|
22,624
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Due
from affiliates
|
37
|
|
62
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Inventories
|
2,412
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|
2,446
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Prepaid
expenses
|
10,035
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|
7,423
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Investment
in hotel property of discontinued operations, net
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-
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16,471
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Other
current assets of discontinued operations, net
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-
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1,739
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Investment
in hotel properties of operations held for non-sale disposition, net
|
98,239
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102,343
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Other
current assets of operations held for non-sale disposition, net
|
35,157
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|
14,140
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Total
current assets
|
309,603
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|
557,361
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Investment
in hotel properties, net
|
2,028,082
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|
1,923,392
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Other
real estate, net
|
11,900
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|
14,044
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|
Investments
in unconsolidated joint ventures
|
449
|
|
542
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Deferred
financing fees, net
|
4,618
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|
7,300
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Goodwill
|
4,673
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|
4,673
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|
Other
assets, net
|
14,137
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|
6,218
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Total
assets
|
$
2,373,462
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$
2,513,530
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Liabilities
and Stockholders' Equity
|
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Current
liabilities:
|
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Accounts
payable and accrued expenses
|
$
17,963
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$
12,425
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Accrued
payroll and employee benefits
|
10,591
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|
9,092
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|
Due to
Third Party Managers
|
8,742
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|
9,817
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Dividends
payable
|
5,137
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|
5,137
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|
Other
current liabilities
|
22,731
|
|
21,910
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|
Current
portion of notes payable
|
94,810
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|
153,778
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Note
payable of discontinued operations
|
-
|
|
25,499
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|
|
Notes
payable of operations held for non-sale disposition
|
162,972
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|
184,121
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Other
current liabilities of discontinued operations, net
|
-
|
|
41,449
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Other
current liabilities of operations held for non-sale disposition
|
26,151
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|
6,364
|
|
Total
current liabilities
|
349,097
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|
469,592
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|
|
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|
Notes
payable, less current portion
|
1,039,757
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1,050,019
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Other
liabilities
|
7,923
|
|
7,256
|
|
Total
liabilities
|
1,396,777
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|
1,526,867
|
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|
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|
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Commitments
and contingencies
|
-
|
|
-
|
|
|
|
|
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|
Preferred
stock, Series C Cumulative Convertible Redeemable Preferred
|
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|
Stock,
$0.01 par value, 4,102,564 shares authorized, issued and
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outstanding
at September 30, 2010 and December 31, 2009, liquidation
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preference
of $24.375 per share
|
100,000
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|
99,896
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Stockholders'
equity:
|
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|
Preferred
stock, $0.01 par value, 100,000,000 shares authorized.
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8.0% Series A Cumulative Redeemable Preferred Stock,
|
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|
7,050,000 shares issued and outstanding at September 30, 2010 and
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|
|
|
|
|
December 31, 2009, stated at liquidation preference of $25.00
per share
|
176,250
|
|
176,250
|
|
|
Common
stock, $0.01 par value, 500,000,000 shares authorized,
|
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|
97,275,660 shares issued and outstanding at September 30,
2010 and
|
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|
|
|
96,904,075 shares issued and outstanding at December 31,
2009
|
973
|
|
969
|
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|
Additional
paid in capital
|
1,121,460
|
|
1,119,005
|
|
|
Retained
earnings (deficit)
|
(6,079)
|
|
(8,949)
|
|
|
Cumulative
dividends
|
(412,938)
|
|
(397,527)
|
|
|
Accumulated
other comprehensive loss
|
(2,981)
|
|
(2,981)
|
|
Total
stockholders' equity
|
876,685
|
|
886,767
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
2,373,462
|
|
$
2,513,530
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Unaudited
Consolidated Statements of Operations
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended September 30,
|
|
Nine
Months Ended September 30,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Room
|
$
108,324
|
|
$
101,754
|
|
$
307,025
|
|
$
299,651
|
|
Food
and beverage
|
35,893
|
|
34,664
|
|
114,644
|
|
115,921
|
|
Other
operating
|
12,847
|
|
12,856
|
|
37,168
|
|
38,268
|
|
Revenues
of operations held for non-sale disposition
|
20,646
|
|
20,790
|
|
60,638
|
|
63,712
|
|
Total
revenues
|
177,710
|
|
170,064
|
|
519,475
|
|
517,552
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Room
|
27,542
|
|
25,873
|
|
78,343
|
|
74,316
|
|
Food
and beverage
|
28,544
|
|
27,215
|
|
85,327
|
|
85,637
|
|
Other
operating
|
6,658
|
|
6,600
|
|
19,775
|
|
19,934
|
|
Advertising
and promotion
|
8,012
|
|
7,070
|
|
23,397
|
|
23,344
|
|
Repairs
and maintenance
|
6,660
|
|
6,402
|
|
19,737
|
|
19,703
|
|
Utilities
|
6,793
|
|
6,280
|
|
18,152
|
|
18,428
|
|
Franchise
costs
|
5,727
|
|
5,283
|
|
15,878
|
|
15,082
|
|
Property
tax, ground lease and insurance
|
11,045
|
|
10,863
|
|
32,015
|
|
30,918
|
|
Property
general and administrative
|
18,673
|
|
17,232
|
|
54,694
|
|
53,128
|
|
Corporate
overhead
|
11,596
|
|
4,334
|
|
21,311
|
|
14,826
|
|
Depreciation
and amortization
|
23,871
|
|
23,529
|
|
70,693
|
|
70,818
|
|
Operating
expenses of operations held for non-sale disposition
|
17,787
|
|
19,098
|
|
53,737
|
|
58,358
|
|
Property
and goodwill impairment losses
|
-
|
|
2,209
|
|
1,943
|
|
30,852
|
|
Goodwill
impairment losses of operations held for non-sale disposition
|
-
|
|
-
|
|
-
|
|
3,007
|
|
Total
operating expenses
|
172,908
|
|
161,988
|
|
495,002
|
|
518,351
|
|
Operating
income (loss)
|
4,802
|
|
8,076
|
|
24,473
|
|
(799)
|
|
Equity
in earnings (losses) of unconsolidated joint ventures
|
200
|
|
(515)
|
|
475
|
|
(2,616)
|
|
Interest
income and other income (loss)
|
(276)
|
|
239
|
|
(6)
|
|
1,111
|
|
Interest
expense
|
(16,671)
|
|
(18,190)
|
|
(53,727)
|
|
(57,703)
|
|
Interest
expense of operations held for non-sale disposition
|
(4,875)
|
|
(2,880)
|
|
(15,272)
|
|
(8,667)
|
|
Gain
(loss) on extinguishment of debt
|
-
|
|
(20)
|
|
-
|
|
54,559
|
|
Loss
from continuing operations
|
(16,820)
|
|
(13,290)
|
|
(44,057)
|
|
(14,115)
|
|
Income
(loss) from discontinued operations
|
40,473
|
|
(4,658)
|
|
46,927
|
|
(127,528)
|
|
Net
income (loss)
|
23,653
|
|
(17,948)
|
|
2,870
|
|
(141,643)
|
|
Dividends
paid on unvested restricted stock compensation
|
-
|
|
-
|
|
-
|
|
(447)
|
|
Preferred
stock dividends and accretion
|
(5,141)
|
|
(5,187)
|
|
(15,515)
|
|
(15,562)
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
(232)
|
|
-
|
|
-
|
|
-
|
|
Income
available (loss attributable) to common stockholders
|
$
18,280
|
|
$
(23,135)
|
|
$
(12,645)
|
|
$
(157,652)
|
|
|
|
|
|
|
|
|
|
|
Basic
per share amounts:
|
|
|
|
|
|
|
|
|
Loss from continuing operations attributable to
common stockholders
|
$
(0.23)
|
|
$
(0.25)
|
|
$
(0.61)
|
|
$
(0.48)
|
|
Income (loss) from discontinued operations
|
0.42
|
|
(0.06)
|
|
0.48
|
|
(2.05)
|
|
Basic
income available (loss attributable) to common stockholders per common
share
|
$
0.19
|
|
$
(0.31)
|
|
$
(0.13)
|
|
$
(2.53)
|
|
|
|
|
|
|
|
|
|
|
Diluted
per share amounts:
|
|
|
|
|
|
|
|
|
Loss from continuing operations attributable to
common stockholders
|
$
(0.23)
|
|
$
(0.25)
|
|
$
(0.61)
|
|
$
(0.48)
|
|
Income (loss) from discontinued operations
|
0.42
|
|
(0.06)
|
|
0.48
|
|
(2.05)
|
|
Diluted
income available (loss attributable) to common stockholders per common
share
|
$
0.19
|
|
$
(0.31)
|
|
$
(0.13)
|
|
$
(2.53)
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
97,250
|
|
73,857
|
|
97,163
|
|
62,382
|
|
Diluted
|
97,612
|
|
73,857
|
|
97,163
|
|
62,382
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Reconciliation
of Income Available (Loss Attributable) to Common Stockholders to
Non-GAAP Financial Measures
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Income Available (Loss Attributable) to Common Stockholders to
EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
Income
available (loss attributable) to common stockholders
|
$
18,280
|
$
(23,135)
|
|
$
(12,645)
|
$
(157,652)
|
|
Dividends
paid on unvested restricted stock compensation
|
-
|
-
|
|
-
|
447
|
|
Series
A and C preferred stock dividends
|
5,141
|
5,187
|
|
15,515
|
15,562
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
232
|
-
|
|
-
|
-
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Depreciation and amortization
|
23,871
|
23,529
|
|
70,693
|
70,818
|
|
Amortization of lease intangibles
|
76
|
-
|
|
226
|
-
|
|
Interest expense
|
16,116
|
17,371
|
|
49,239
|
54,626
|
|
Interest expense - default rate
|
-
|
-
|
|
884
|
-
|
|
Amortization of deferred financing fees
|
303
|
582
|
|
1,102
|
1,217
|
|
Write-off of deferred financing fees
|
-
|
-
|
|
1,585
|
284
|
|
Loan penalties and fees
|
-
|
-
|
|
174
|
-
|
|
Non-cash interest related to discount on Senior Notes
|
252
|
237
|
|
743
|
1,576
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
Depreciation and amortization
|
13
|
1,306
|
|
40
|
3,860
|
|
Interest expense
|
-
|
638
|
|
-
|
1,986
|
|
Amortization of deferred financing fees
|
-
|
45
|
|
-
|
137
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Depreciation and amortization
|
1,552
|
2,749
|
|
4,789
|
8,183
|
|
Interest expense
|
2,424
|
2,749
|
|
7,606
|
8,272
|
|
Interest expense - default rate
|
2,038
|
-
|
|
6,392
|
-
|
|
Amortization of deferred financing fees
|
131
|
131
|
|
395
|
395
|
|
Loan penalties and fees
|
282
|
-
|
|
879
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Depreciation and amortization
|
-
|
749
|
|
124
|
6,502
|
|
Interest expense
|
-
|
1,742
|
|
225
|
5,181
|
|
Amortization of deferred financing fees
|
-
|
11
|
|
2
|
32
|
|
Loan penalties and fees
|
-
|
3,093
|
|
48
|
3,093
|
|
EBITDA
|
70,711
|
36,984
|
|
148,016
|
24,519
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
757
|
938
|
|
2,405
|
3,286
|
|
(Gain) loss on sale of assets
|
383
|
-
|
|
383
|
(354)
|
|
(Gain) loss on extinguishment of debt
|
-
|
20
|
|
-
|
(54,559)
|
|
Impairment loss
|
-
|
2,209
|
|
1,943
|
30,852
|
|
Closing costs - Royal Palm Miami Beach acquisition
|
6,619
|
-
|
|
6,774
|
-
|
|
Due diligence costs - abandoned project
|
938
|
-
|
|
938
|
-
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
4
|
12
|
|
21
|
28
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Impairment loss
|
-
|
-
|
|
-
|
3,007
|
|
Discontinued
operations:
|
|
|
|
|
|
|
(Gain) loss on sale of assets
|
-
|
(18)
|
|
-
|
13,052
|
|
Gain on extinguishment of debt
|
(40,473)
|
-
|
|
(47,220)
|
-
|
|
Impairment loss
|
-
|
-
|
|
-
|
104,007
|
|
|
(31,772)
|
3,161
|
|
(34,756)
|
99,319
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
38,939
|
$
40,145
|
|
$
113,260
|
$
123,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Income Available (Loss Attributable) to Common Stockholders to FFO
and Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
available (loss attributable) to common stockholders
|
$
18,280
|
$
(23,135)
|
|
$
(12,645)
|
$
(157,652)
|
|
Dividends
paid on unvested restricted stock compensation
|
-
|
-
|
|
-
|
447
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
232
|
-
|
|
-
|
-
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
23,734
|
23,385
|
|
70,287
|
70,357
|
|
Amortization of lease intangibles
|
76
|
-
|
|
226
|
-
|
|
(Gain) loss on sale of assets
|
383
|
-
|
|
383
|
(354)
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
-
|
1,288
|
|
-
|
3,806
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
1,552
|
2,749
|
|
4,789
|
8,183
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
-
|
749
|
|
124
|
6,502
|
|
(Gain) loss on sale of assets
|
-
|
(18)
|
|
-
|
13,052
|
|
FFO
available to common stockholders
|
44,257
|
5,018
|
|
63,164
|
(55,659)
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Interest expense - default rate
|
-
|
-
|
|
884
|
-
|
|
Write-off of deferred financing fees
|
-
|
-
|
|
1,585
|
284
|
|
Loan penalties and fees
|
-
|
-
|
|
174
|
-
|
|
(Gain) loss on extinguishment of debt
|
-
|
20
|
|
-
|
(54,559)
|
|
Impairment loss
|
-
|
2,209
|
|
1,943
|
30,852
|
|
Closing costs - Royal Palm Miami Beach acquisition
|
6,619
|
-
|
|
6,774
|
-
|
|
Due diligence costs - abandoned project
|
938
|
-
|
|
938
|
-
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Interest expense - default rate
|
2,038
|
-
|
|
6,392
|
-
|
|
Loan penalties and fees
|
282
|
-
|
|
879
|
-
|
|
Impairment loss
|
-
|
-
|
|
-
|
3,007
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Loan penalties and fees
|
-
|
3,093
|
|
48
|
3,093
|
|
Gain on extinguishment of debt
|
(40,473)
|
-
|
|
(47,220)
|
-
|
|
Impairment loss
|
-
|
-
|
|
-
|
104,007
|
|
|
(30,596)
|
5,322
|
|
(27,603)
|
86,684
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders
|
$
13,661
|
$
10,340
|
|
$
35,561
|
$
31,025
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
0.45
|
$
0.07
|
|
$
0.65
|
$
(0.89)
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders per diluted share
|
$
0.14
|
$
0.14
|
|
$
0.36
|
$
0.50
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,250
|
73,857
|
|
97,163
|
62,382
|
|
Shares
associated with unvested restricted stock awards
|
362
|
72
|
|
372
|
-
|
|
Diluted
weighted average shares outstanding (1)
|
97,612
|
73,929
|
|
97,535
|
62,382
|
|
|
|
|
|
|
|
|
(1)
Diluted weighted average shares outstanding includes the Series C
convertible preferred stock on a "non-converted" basis. On an
"as-converted" basis, FFO available to common stockholders per
diluted share is $0.45 and $0.09, respectively, for the three months
ended September 30, 2010 and 2009, and $0.67 and $(0.76), respectively,
for the nine months ended September 30, 2010 and 2009. On an "as-converted"
basis, Adjusted FFO available to common stockholders per diluted
share is $0.15 for both the three months ended September 30, 2010 and
2009, and $0.40 and $0.54, respectively, for the nine
months ended September 30, 2010 and 2009.
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Pro
Forma Reconciliation of Income Available (Loss Attributable) to Common
Stockholders to Non-GAAP Financial Measures
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
Pro
Forma Reconciliation of Income Available (Loss Attributable) to Common
Stockholders to EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended September 30, 2010
|
|
|
|
Non-Sale
|
Discontinued
|
|
|
|
Actual
(1)
|
Disposition
(2)
|
Operations
(3)
|
Pro
Forma (4)
|
|
|
|
|
|
|
|
Income
available (loss attributable) to common stockholders
|
$
18,280
|
$
2,012
|
$
(40,473)
|
$
(20,181)
|
|
Series
A and C preferred stock dividends
|
5,141
|
-
|
-
|
5,141
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
232
|
-
|
-
|
232
|
|
Operations
held for investment:
|
|
|
|
|
|
Depreciation and amortization
|
23,871
|
-
|
-
|
23,871
|
|
Amortization of lease intangibles
|
76
|
-
|
-
|
76
|
|
Interest expense
|
16,116
|
-
|
-
|
16,116
|
|
Amortization of deferred financing fees
|
303
|
-
|
-
|
303
|
|
Non-cash interest related to discount on Senior Notes
|
252
|
-
|
-
|
252
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
Depreciation and amortization
|
13
|
-
|
-
|
13
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
Depreciation and amortization
|
1,552
|
(1,552)
|
-
|
-
|
|
Interest expense
|
2,424
|
(2,424)
|
-
|
-
|
|
Interest expense - default rate
|
2,038
|
(2,038)
|
-
|
-
|
|
Amortization of deferred financing fees
|
131
|
(131)
|
-
|
-
|
|
Loan penalties and fees
|
282
|
(282)
|
-
|
-
|
|
EBITDA
|
70,711
|
(4,415)
|
(40,473)
|
25,823
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
Amortization of deferred stock compensation
|
757
|
-
|
-
|
757
|
|
Loss on sale of assets
|
383
|
-
|
-
|
383
|
|
Closing costs - Royal Palm Miami Beach acquisition
|
6,619
|
-
|
-
|
6,619
|
|
Due diligence costs - abandoned project
|
938
|
-
|
-
|
938
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
Amortization of deferred stock compensation
|
4
|
-
|
-
|
4
|
|
Discontinued
operations:
|
|
|
|
|
|
Gain on extinguishment of debt
|
(40,473)
|
-
|
40,473
|
-
|
|
|
|
|
|
|
|
|
(31,772)
|
-
|
40,473
|
8,701
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
38,939
|
$
(4,415)
|
$
-
|
$
34,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma Reconciliation of Income Available (Loss Attributable) to Common
Stockholders to FFO and Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
available (loss attributable) to common stockholders
|
$
18,280
|
$
2,012
|
$
(40,473)
|
$
(20,181)
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
232
|
-
|
-
|
232
|
|
Operations
held for investment:
|
|
|
|
|
|
Real estate depreciation and amortization
|
23,734
|
-
|
-
|
23,734
|
|
Amortization of lease intangibles
|
76
|
-
|
-
|
76
|
|
Loss on sale of assets
|
383
|
-
|
-
|
383
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
Real estate depreciation and amortization
|
1,552
|
(1,552)
|
-
|
-
|
|
FFO
available to common stockholders
|
44,257
|
460
|
(40,473)
|
4,244
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
Closing costs - Royal Palm Miami Beach acquisition
|
6,619
|
-
|
-
|
6,619
|
|
Due diligence costs - abandoned project
|
938
|
-
|
-
|
938
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
Interest expense - default rate
|
2,038
|
(2,038)
|
-
|
-
|
|
Loan penalties and fees
|
282
|
(282)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
Gain on extinguishment of debt
|
(40,473)
|
-
|
40,473
|
-
|
|
|
(30,596)
|
(2,320)
|
40,473
|
7,557
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders
|
$
13,661
|
$
(1,860)
|
$
-
|
$
11,801
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
0.45
|
|
|
$
0.04
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders per diluted share
|
$
0.14
|
|
|
$
0.12
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,250
|
|
|
97,250
|
|
Shares
associated with unvested restricted stock awards
|
362
|
|
|
362
|
|
Diluted
weighted average shares outstanding (5)
|
97,612
|
|
|
97,612
|
|
|
|
|
|
|
|
(1)
Actual includes results for the 31 hotels held for investment, the Mass
Mutual eight hotels held for non-sale disposition and two hotels
disposed by deed in lieu at September 30, 2010.
|
|
(2)
Non-Sale Disposition includes all hotel operations, interest and
penalties for the Mass Mutual eight hotels that are in the process of
being transferred to a receiver.
|
|
(3)
Discontinued Operations includes the W San Diego and Marriott Ontario
Airport hotels that have been disposed by deed in lieu as of September
30, 2010.
|
|
(4)
Pro forma includes the 31 hotels held for investment by the Company at
September 30, 2010.
|
|
(5)
Diluted weighted average shares outstanding includes the Series C
convertible preferred stock on a "non-converted" basis since such
treatment is dilutive.
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Pro
Forma Reconciliation of Loss Attributable to Common Stockholders to
Non-GAAP Financial Measures
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma Reconciliation of Loss Attributable to Common Stockholders to
EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended September 30, 2010
|
|
|
|
Held
for
|
Reacquired
|
Non-Sale
|
Discontinued
|
|
|
|
Actual
(1)
|
Investment
(2)
|
Hotel
(3)
|
Disposition
(4)
|
Operations
(5)
|
Pro
Forma (6)
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(12,645)
|
$ 2,229
|
$ 346
|
$
8,367
|
$
(46,927)
|
$
(48,630)
|
|
Series
A and C preferred stock dividends
|
15,515
|
-
|
-
|
-
|
-
|
15,515
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
70,693
|
-
|
561
|
-
|
-
|
71,254
|
|
Amortization of lease intangibles
|
226
|
-
|
-
|
-
|
-
|
226
|
|
Interest expense
|
49,239
|
(1,053)
|
-
|
-
|
-
|
48,186
|
|
Interest expense - default rate
|
884
|
(884)
|
-
|
-
|
-
|
-
|
|
Amortization of deferred financing fees
|
1,102
|
(34)
|
-
|
-
|
-
|
1,068
|
|
Write-off of deferred financing fees
|
1,585
|
(123)
|
-
|
-
|
-
|
1,462
|
|
Loan penalties and fees
|
174
|
(135)
|
-
|
-
|
-
|
39
|
|
Non-cash interest related to discount on Senior Notes
|
743
|
-
|
-
|
-
|
-
|
743
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
40
|
-
|
-
|
-
|
-
|
40
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
4,789
|
-
|
-
|
(4,789)
|
-
|
-
|
|
Interest expense
|
7,606
|
-
|
-
|
(7,606)
|
-
|
-
|
|
Interest expense - default rate
|
6,392
|
-
|
-
|
(6,392)
|
-
|
-
|
|
Amortization of deferred financing fees
|
395
|
-
|
-
|
(395)
|
-
|
-
|
|
Loan penalties and fees
|
879
|
-
|
-
|
(879)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
124
|
-
|
-
|
-
|
(124)
|
-
|
|
Interest expense
|
225
|
-
|
-
|
-
|
(225)
|
-
|
|
Amortization of deferred financing fees
|
2
|
-
|
-
|
-
|
(2)
|
-
|
|
Loan penalties and fees
|
48
|
-
|
-
|
-
|
(48)
|
-
|
|
EBITDA
|
148,016
|
-
|
907
|
(11,694)
|
(47,326)
|
89,903
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
2,405
|
-
|
-
|
-
|
-
|
2,405
|
|
Loss on sale of assets
|
383
|
-
|
-
|
-
|
-
|
383
|
|
Impairment loss
|
1,943
|
-
|
-
|
-
|
-
|
1,943
|
|
Closing costs - Royal Palm Miami Beach acquisition
|
6,774
|
-
|
-
|
-
|
-
|
6,774
|
|
Due diligence costs - abandoned project
|
938
|
-
|
-
|
-
|
-
|
938
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
21
|
-
|
-
|
-
|
-
|
21
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Gain on extinguishment of debt
|
(47,220)
|
-
|
-
|
-
|
47,220
|
-
|
|
|
(34,756)
|
-
|
-
|
-
|
47,220
|
12,464
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$113,260
|
$
-
|
$ 907
|
$
(11,694)
|
$
(106)
|
$102,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro
Forma Reconciliation of Loss Attributable to Common Stockholders to FFO
and Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(12,645)
|
$ 2,229
|
$ 346
|
$
8,367
|
$
(46,927)
|
$
(48,630)
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
70,287
|
-
|
561
|
-
|
-
|
70,848
|
|
Amortization of lease intangibles
|
226
|
-
|
-
|
-
|
-
|
226
|
|
Loss on sale of assets
|
383
|
-
|
-
|
-
|
-
|
383
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
4,789
|
-
|
-
|
(4,789)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Real estate depreciation and amortization
|
124
|
-
|
-
|
-
|
(124)
|
-
|
|
FFO
available to common stockholders
|
63,164
|
2,229
|
907
|
3,578
|
(47,051)
|
22,827
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
884
|
(884)
|
-
|
-
|
-
|
-
|
|
Write-off of deferred financing fees
|
1,585
|
(123)
|
-
|
-
|
-
|
1,462
|
|
Loan penalties and fees
|
174
|
(135)
|
-
|
-
|
-
|
39
|
|
Impairment loss
|
1,943
|
-
|
-
|
-
|
-
|
1,943
|
|
Closing costs - Royal Palm Miami Beach acquisition
|
6,774
|
-
|
-
|
-
|
-
|
6,774
|
|
Due diligence costs - abandoned project
|
938
|
-
|
-
|
-
|
-
|
938
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
6,392
|
-
|
-
|
(6,392)
|
-
|
-
|
|
Loan penalties and fees
|
879
|
-
|
-
|
(879)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loan penalties and fees
|
48
|
-
|
-
|
-
|
(48)
|
-
|
|
Gain on extinguishment of debt
|
(47,220)
|
-
|
-
|
-
|
47,220
|
-
|
|
|
(27,603)
|
(1,142)
|
-
|
(7,271)
|
47,172
|
11,156
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders
|
$
35,561
|
$ 1,087
|
$ 907
|
$
(3,693)
|
$
121
|
$
33,983
|
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
0.65
|
|
|
|
|
$
0.23
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders
per diluted share
|
$
0.36
|
|
|
|
|
$
0.35
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,163
|
|
|
|
|
97,163
|
|
Shares
associated with unvested restricted stock awards
|
372
|
|
|
|
|
372
|
|
Diluted
weighted average shares outstanding (7)
|
97,535
|
|
|
|
|
97,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Actual includes results for the 31 hotels held for investment, the Mass
Mutual eight hotels held for non-sale disposition and two hotels
disposed by deed in lieu at September 30, 2010.
|
|
(2)
Held for Investment includes only the interest and penalties associated
with the three Mass Mutual hotels released on April 15, 2010. Hotel
operations for these three hotels are included in the "Actual" column.
|
|
(3)
Reacquired Hotel includes only the hotel operations and excludes
interest and penalties associated with the Renaissance Westchester
while it was in receivership prior to being reacquired by the Company
on June 14, 2010.
|
|
(4)
Non-Sale Disposition includes all hotel operations, interest and
penalties for the Mass Mutual eight hotels that are in the process of
being transferred to a receiver.
|
|
(5)
Discontinued Operations includes the W San Diego and Marriott Ontario
Airport hotels that have been disposed by deed in lieu as of September
30, 2010. It also includes the ownership expenses of the Renaissance
Westchester
|
|
prior to June 14, 2010 when it was reacquired by the
Company.
|
|
(6)
Pro forma includes the 31 hotels held for investment by the Company at
September 30, 2010.
|
|
(7)
Diluted weighted average shares outstanding includes the Series C
convertible preferred stock on a "non-converted" basis since such
treatment is dilutive.
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Non-GAAP Financial
Measures
|
|
Guidance
for Fourth Quarter 2010 (1)
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
December
31, 2010
|
|
|
Low
|
High
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(9,700)
|
$
(5,700)
|
|
Series
A and C preferred stock dividends
|
5,100
|
5,100
|
|
Operations
held for investment:
|
|
|
|
Depreciation and amortization
|
24,700
|
24,700
|
|
Amortization of lease intangibles
|
100
|
100
|
|
Interest expense
|
16,400
|
16,400
|
|
Amortization of deferred financing fees
|
500
|
500
|
|
Non-cash interest related to discount on Senior Notes
|
300
|
300
|
|
Amortization of deferred stock compensation
|
600
|
600
|
|
Adjusted
EBITDA
|
$
38,000
|
$
42,000
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Adjusted FFO
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(9,700)
|
$
(5,700)
|
|
Operations
held for investment:
|
|
|
|
Real estate depreciation and amortization
|
24,500
|
24,500
|
|
Amortization of lease intangibles
|
100
|
100
|
|
Adjusted
FFO available to common stockholders
|
$
14,900
|
$
18,900
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders per diluted share
|
$
0.15
|
$
0.19
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,300
|
97,300
|
|
Shares
associated with unvested restricted stock awards
|
400
|
400
|
|
Diluted
weighted average shares outstanding
|
97,700
|
97,700
|
|
|
|
|
|
(1)
Guidance for the fourth quarter 2010 includes the Company's 31 hotel
portfolio held for investment.
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Comparable
Portfolio Hotel EBITDA Margins
|
|
(Unaudited
and in thousands except hotels and rooms)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended September 30, 2010
|
|
Three
Months Ended September 30, 2009
|
|
|
Actual
(1)
|
|
Non-comparable
Hotel
(2)
|
|
Comparable
(3)
|
|
Actual
(4)
|
|
Reacquired
Hotel
(5)
|
|
Comparable
(6)
|
|
Number
of Hotels
|
31
|
|
(1)
|
|
30
|
|
29
|
|
1
|
|
30
|
|
Number
of Rooms
|
11,722
|
|
(409)
|
|
11,313
|
|
10,966
|
|
347
|
|
11,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA Margin (7)
|
24.1%
|
|
0.3%
|
|
24.2%
|
|
24.6%
|
|
6.8%
|
|
24.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Room revenue
|
$
108,324
|
|
$ (712)
|
|
$
107,612
|
|
$
101,754
|
|
$ 2,449
|
|
$
104,203
|
|
Food and beverage revenue
|
35,893
|
|
(102)
|
|
35,791
|
|
34,664
|
|
1,123
|
|
35,787
|
|
Other operating revenue
|
8,878
|
|
(128)
|
|
8,750
|
|
8,820
|
|
109
|
|
8,929
|
|
Total
Hotel Revenues
|
153,095
|
|
(942)
|
|
152,153
|
|
145,238
|
|
3,681
|
|
148,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Room expense
|
28,009
|
|
(231)
|
|
27,778
|
|
26,166
|
|
710
|
|
26,876
|
|
Food and beverage expense
|
28,609
|
|
(60)
|
|
28,549
|
|
27,229
|
|
994
|
|
28,223
|
|
Other hotel expense
|
41,579
|
|
(480)
|
|
41,099
|
|
39,298
|
|
1,175
|
|
40,473
|
|
General and administrative expense
|
18,058
|
|
(168)
|
|
17,890
|
|
16,781
|
|
550
|
|
17,331
|
|
Total
Hotel Expenses
|
116,255
|
|
(939)
|
|
115,316
|
|
109,474
|
|
3,429
|
|
112,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
36,840
|
|
(3)
|
|
36,837
|
|
35,764
|
|
252
|
|
36,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mass
Mutual Eight Hotels:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues of operations held for non-sale disposition
|
20,646
|
|
-
|
|
20,646
|
|
20,790
|
|
-
|
|
20,790
|
|
Operating expenses of operations held for non-sale disposition
|
(17,787)
|
|
-
|
|
(17,787)
|
|
(19,098)
|
|
-
|
|
(19,098)
|
|
Non-hotel
operating income
|
821
|
|
-
|
|
821
|
|
692
|
|
-
|
|
692
|
|
Amortization
of lease intangibles
|
(76)
|
|
-
|
|
(76)
|
|
-
|
|
-
|
|
-
|
|
Management
company transition costs
|
(175)
|
|
-
|
|
(175)
|
|
-
|
|
-
|
|
-
|
|
Corporate
overhead
|
(11,596)
|
|
-
|
|
(11,596)
|
|
(4,334)
|
|
-
|
|
(4,334)
|
|
Depreciation
and amortization
|
(23,871)
|
|
-
|
|
(23,871)
|
|
(23,529)
|
|
-
|
|
(23,529)
|
|
Property
and goodwill impairment losses
|
-
|
|
-
|
|
-
|
|
(2,209)
|
|
-
|
|
(2,209)
|
|
Operating
Income
|
4,802
|
|
(3)
|
|
4,799
|
|
8,076
|
|
252
|
|
8,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings (losses) of unconsolidated joint ventures
|
200
|
|
-
|
|
200
|
|
(515)
|
|
-
|
|
(515)
|
|
Interest
income and other income (loss)
|
(276)
|
|
-
|
|
(276)
|
|
239
|
|
-
|
|
239
|
|
Interest
expense
|
(16,671)
|
|
-
|
|
(16,671)
|
|
(18,190)
|
|
-
|
|
(18,190)
|
|
Interest
expense of operations held for non-sale disposition
|
(4,875)
|
|
-
|
|
(4,875)
|
|
(2,880)
|
|
-
|
|
(2,880)
|
|
Loss
on extinguishment of debt
|
-
|
|
-
|
|
-
|
|
(20)
|
|
-
|
|
(20)
|
|
Income
(loss) from discontinued operations
|
40,473
|
|
-
|
|
40,473
|
|
(4,658)
|
|
-
|
|
(4,658)
|
|
Net
Income (Loss)
|
$
23,653
|
|
$
(3)
|
|
$
23,650
|
|
$
(17,948)
|
|
$
252
|
|
$
(17,696)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Actual represents our ownership results for the 31 hotels held for
investment as of the end of the period. Excludes eight hotels included
in the Mass Mutual portfolio, which have been reclassified as
"Operations Held for
|
|
Non-Sale
Disposition" on our balance sheets and statements of operations.
|
|
(2)
Non-comparable Hotel represents our ownership results for the one
non-comparable hotel that is being repositioned beginning in 2010:
Royal Palm Miami Beach from our acquisition date of August 27, 2010
through September 30, 2010.
|
|
(3)
Comparable represents our ownership results for the 30 "comparable"
hotels held for investment as of the end of the period. Excludes the
Royal Palm Miami Beach that is being repositioned beginning in 2010,
|
|
and
eight hotels included in the Mass Mutual portfolio, which have been
reclassified as "Operations Held for Non-Sale Disposition" on our
balance sheets and statements of operations.
|
|
(4)
Actual represents our ownership results for the 29 hotels held for
investment as of the end of the period. Excludes eight hotels included
in the Mass Mutual portfolio, which have been reclassified as
"Operations Held for
|
|
Non-Sale
Disposition" on our balance sheets and statements of operations, and
the W San Diego, Marriott Ontario Airport and Renaissance Westchester,
which have been reclassified as discontinued operations on our
|
|
balance
sheets and statements of operations.
|
|
(5)
Reacquired Hotel represents our ownership results for the Renaissance
Westchester for the entire reporting period.
|
|
(6)
Comparable represents our ownership results for the 29 hotels held for
investment as of the end of the period, plus the Renaissance
Westchester. Excludes eight hotels included in the Mass Mutual
portfolio, which have been reclassified as
|
|
"Operations
Held for Non-Sale Disposition" on our balance sheets and statements of
operations, and the W San Diego and Marriott Ontario Airport, which
have been reclassified as discontinued operations on our balance sheets
and statements of operations.
|
|
(7)
Hotel EBITDA Margin is calculated as Hotel EBITDA divided by total
hotel revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Comparable
Portfolio Hotel EBITDA Margins
|
|
(Unaudited
and in thousands except hotels and rooms)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended September 30, 2010
|
|
Nine
Months Ended September 30, 2009
|
|
|
Actual
(1)
|
|
Reacquired
Hotel (2)
|
|
Non-comparable
Hotel (3)
|
|
Comparable
(4)
|
|
Actual
(5)
|
|
Reacquired
Hotel (6)
|
|
Comparable
(7)
|
|
Number
of Hotels
|
31
|
|
|
|
(1)
|
|
30
|
|
29
|
|
1
|
|
30
|
|
Number
of Rooms
|
11,722
|
|
|
|
(409)
|
|
11,313
|
|
10,966
|
|
347
|
|
11,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA Margin (8)
|
24.5%
|
|
11.0%
|
|
0.3%
|
|
24.3%
|
|
25.1%
|
|
9.5%
|
|
24.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room revenue
|
$
307,025
|
|
$ 4,931
|
|
$ (712)
|
|
$
311,244
|
|
$
299,651
|
|
$ 7,472
|
|
$
307,123
|
|
Food and beverage revenue
|
114,644
|
|
3,114
|
|
(102)
|
|
117,656
|
|
115,921
|
|
3,727
|
|
119,648
|
|
Other operating revenue
|
25,386
|
|
241
|
|
(128)
|
|
25,499
|
|
26,399
|
|
337
|
|
26,736
|
|
Total
Hotel Revenues
|
447,055
|
|
8,286
|
|
(942)
|
|
454,399
|
|
441,971
|
|
11,536
|
|
453,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room expense
|
79,757
|
|
1,417
|
|
(231)
|
|
80,943
|
|
75,062
|
|
2,095
|
|
77,157
|
|
Food and beverage expense
|
85,473
|
|
2,355
|
|
(60)
|
|
87,768
|
|
85,672
|
|
3,099
|
|
88,771
|
|
Other hotel expense
|
119,171
|
|
2,403
|
|
(480)
|
|
121,094
|
|
118,530
|
|
3,560
|
|
122,090
|
|
General and administrative expense
|
53,139
|
|
1,203
|
|
(168)
|
|
54,174
|
|
51,792
|
|
1,686
|
|
53,478
|
|
Total
Hotel Expenses
|
337,540
|
|
7,378
|
|
(939)
|
|
343,979
|
|
331,056
|
|
10,440
|
|
341,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
109,515
|
|
908
|
|
(3)
|
|
110,420
|
|
110,915
|
|
1,096
|
|
112,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mass
Mutual Eight Hotels:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues of operations held for non-sale disposition
|
60,638
|
|
|
|
|
|
60,638
|
|
63,712
|
|
|
|
63,712
|
|
Operating expenses of operations held for non-sale disposition
|
(53,737)
|
|
|
|
|
|
(53,737)
|
|
(58,358)
|
|
|
|
(58,358)
|
|
Goodwill impairment losses of operations held for non-sale
disposition
|
-
|
|
|
|
|
|
-
|
|
(3,007)
|
|
|
|
(3,007)
|
|
Non-hotel
operating income
|
2,496
|
|
|
|
|
|
2,496
|
|
1,985
|
|
|
|
1,985
|
|
Amortization
of lease intangibles
|
(226)
|
|
|
|
|
|
(226)
|
|
-
|
|
|
|
-
|
|
Management
company transition costs
|
(266)
|
|
|
|
|
|
(266)
|
|
-
|
|
|
|
-
|
|
Prior
year property tax supplementals and credits, net
|
-
|
|
|
|
|
|
-
|
|
450
|
|
|
|
450
|
|
Corporate
overhead
|
(21,311)
|
|
|
|
|
|
(21,311)
|
|
(14,826)
|
|
|
|
(14,826)
|
|
Depreciation
and amortization
|
(70,693)
|
|
|
|
|
|
(70,693)
|
|
(70,818)
|
|
|
|
(70,818)
|
|
Property
and goodwill impairment losses
|
(1,943)
|
|
|
|
|
|
(1,943)
|
|
(30,852)
|
|
|
|
(30,852)
|
|
Operating
Income (Loss)
|
24,473
|
|
908
|
|
(3)
|
|
25,378
|
|
(799)
|
|
1,096
|
|
297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings (losses) of unconsolidated joint ventures
|
475
|
|
|
|
|
|
475
|
|
(2,616)
|
|
|
|
(2,616)
|
|
Interest
income and other income (loss)
|
(6)
|
|
|
|
|
|
(6)
|
|
1,111
|
|
|
|
1,111
|
|
Interest
expense
|
(53,727)
|
|
|
|
|
|
(53,727)
|
|
(57,703)
|
|
|
|
(57,703)
|
|
Interest
expense of operations held for non-sale disposition
|
(15,272)
|
|
|
|
|
|
(15,272)
|
|
(8,667)
|
|
|
|
(8,667)
|
|
Gain
on extinguishment of debt
|
-
|
|
|
|
|
|
-
|
|
54,559
|
|
|
|
54,559
|
|
Income
(loss) from discontinued operations
|
46,927
|
|
|
|
|
|
46,927
|
|
(127,528)
|
|
|
|
(127,528)
|
|
Net
Income (Loss)
|
$
2,870
|
|
$
908
|
|
$
(3)
|
|
$
3,775
|
|
$
(141,643)
|
|
$ 1,096
|
|
$
(140,547)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Actual represents our ownership results for the 31 hotels held for
investment as of the end of the period. Excludes eight hotels included
in the Mass Mutual portfolio, which have been reclassified as
"Operations Held for
Non-Sale
Disposition" on our balance sheets and statements of operations.
(2)
Reacquired Hotel represents operating results for the Renaissance
Westchester while it was held in receivership prior to our
reacquisition on June 14, 2010.
(3)
Non-comparable Hotel represents our ownership results for the one
non-comparable hotel that is being repositioned beginning in 2010:
Royal Palm Miami Beach from our acquisition date of
August 27, 2010 through September 30, 2010.
(4)
Comparable represents our ownership results for the 30 "comparable"
hotels held for investment as of the end of the period, including the
Renaissance
Westchester
while it was held in receivership. Excludes the Royal Palm Miami Beach
that is being repositioned beginning
in
2010, and eight hotels included in the Mass Mutual portfolio, which
have been reclassified as "Operations Held for Non-Sale Disposition" on
our balance
sheets
and statements of operations.
(5)
Actual represents our ownership results for the 29 hotels held for
investment as of the end of the period. Excludes eight hotels included
in the Mass Mutual portfolio, which have been reclassified as
"Operations Held for Non-Sale
Disposition"
on our balance sheets and statements of operations, and the W San
Diego, Marriott Ontario Airport and Renaissance Westchester, which have
been reclassified as discontinued operations on our balance sheets and
statements
of operations.
(6)
Reacquired Hotel represents our ownership results for the Renaissance
Westchester for the entire reporting period.
(7)
Comparable represents our ownership results for the 29 hotels held for
investment as of the end of the period, plus the Renaissance
Westchester. Excludes eight hotels included in the Mass Mutual
portfolio, which have been reclassified as
"Operations
Held for Non-Sale Disposition" on our balance sheets and statements of
operations, and the W San Diego and Marriott Ontario Airport, which
have been reclassified as discontinued operations on our balance sheets
and
statements of operations.
(8)
Hotel EBITDA Margin is calculated as Hotel EBITDA divided by total
hotel revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Comparable
Portfolio Operating Statistics by Region
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Three
Months Ended
September
30, 2010
|
|
Three
Months Ended
September
30, 2009
|
|
Change
in
|
|
|
|
Number
|
|
Number
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Comparable
|
|
Region
|
|
of
Hotels
|
|
of
Rooms
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
RevPAR
|
|
California
(1)
|
|
9
|
|
2,983
|
|
81.1%
|
|
$
130.74
|
|
$
106.03
|
|
79.2%
|
|
$
125.27
|
|
$
99.21
|
|
6.9%
|
|
Other
West (2)
|
|
5
|
|
1,575
|
|
63.2%
|
|
$
108.62
|
|
$
68.65
|
|
67.5%
|
|
$
109.46
|
|
$
73.89
|
|
-7.1%
|
|
Midwest
(3)
|
|
7
|
|
2,177
|
|
69.3%
|
|
$
137.29
|
|
$
95.14
|
|
73.5%
|
|
$
124.74
|
|
$
91.68
|
|
3.8%
|
|
East
(4)
|
|
9
|
|
4,578
|
|
74.3%
|
|
$
176.04
|
|
$
130.80
|
|
74.5%
|
|
$
169.62
|
|
$
126.37
|
|
3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comparable Portfolio
|
|
30
|
|
11,313
|
|
73.5%
|
|
$
147.04
|
|
$
108.07
|
|
74.5%
|
|
$
140.37
|
|
$
104.58
|
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Nine
Months Ended
September
30, 2010
|
|
Nine
Months Ended
September
30, 2009
|
|
Change
in
|
|
|
|
Number
|
|
Number
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Comparable
|
|
Region
|
|
of
Hotels
|
|
of
Rooms
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
RevPAR
|
|
California
(1)
|
|
9
|
|
2,983
|
|
77.2%
|
|
$
125.37
|
|
$
96.79
|
|
73.8%
|
|
$
128.72
|
|
$
95.00
|
|
1.9%
|
|
Other
West (2)
|
|
5
|
|
1,575
|
|
65.2%
|
|
$
112.92
|
|
$
73.62
|
|
68.4%
|
|
$
117.23
|
|
$
80.19
|
|
-8.2%
|
|
Midwest
(3)
|
|
7
|
|
2,177
|
|
65.5%
|
|
$
130.39
|
|
$
85.41
|
|
64.9%
|
|
$
127.60
|
|
$
82.81
|
|
3.1%
|
|
East
(4)
|
|
9
|
|
4,578
|
|
72.7%
|
|
$
180.92
|
|
$
131.53
|
|
70.9%
|
|
$
180.67
|
|
$
128.10
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comparable Portfolio
|
|
30
|
|
11,313
|
|
71.4%
|
|
$
146.79
|
|
$
104.81
|
|
70.1%
|
|
$
147.46
|
|
$
103.37
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Does not include four hotels in the Mass Mutual portfolio, reclassified
as "Operations Held for Non-Sale Disposition" on our balance sheets and
statements of operations.
(2)
Includes Oregon, Texas and Utah. Does not include two hotels in the
Mass Mutual portfolio, reclassified as "Operations Held for Non-Sale
Disposition" on our balance sheets and statements of operations.
(3)
Includes Illinois, Michigan and Minnesota.
(4)
Includes Florida, Maryland, Massachusetts, New York, Pennsylvania,
Virginia and District of Columbia. Excludes the Royal Palm Miami Beach
that is being repositioned beginning in 2010, and two
hotels
in the Mass Mutual portfolio, reclassified as "Operations Held for
Non-Sale Disposition" on our balance sheets and statements of
operations.
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Comparable
Portfolio Operating Statistics by Brand
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Three
Months Ended
September
30, 2010
|
|
Three
Months Ended
September
30, 2009
|
|
Change
in
|
|
|
|
Number
|
|
Number
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Comparable
|
|
Brand
|
|
of
Hotels
|
|
of
Rooms
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
RevPAR
|
|
Marriott
(1)
|
|
18
|
|
6,934
|
|
72.8%
|
|
$
145.10
|
|
$
105.63
|
|
72.9%
|
|
$
140.72
|
|
$
102.58
|
|
3.0%
|
|
Hilton
(2)
|
|
6
|
|
2,133
|
|
76.4%
|
|
$
182.81
|
|
$
139.67
|
|
78.5%
|
|
$
171.07
|
|
$
134.29
|
|
4.0%
|
|
Hyatt
|
|
1
|
|
403
|
|
87.5%
|
|
$
138.34
|
|
$
121.05
|
|
82.8%
|
|
$
129.78
|
|
$
107.46
|
|
12.6%
|
|
Other
Brand Affiliations (3)
|
|
2
|
|
647
|
|
80.8%
|
|
$
118.47
|
|
$
95.72
|
|
76.9%
|
|
$
115.82
|
|
$
89.07
|
|
7.5%
|
|
Independent
(4)
|
|
3
|
|
1,196
|
|
63.6%
|
|
$
106.14
|
|
$
67.51
|
|
72.1%
|
|
$
97.15
|
|
$
70.05
|
|
-3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comparable Portfolio
|
|
30
|
|
11,313
|
|
73.5%
|
|
$
147.04
|
|
$
108.07
|
|
74.5%
|
|
$
140.37
|
|
$
104.58
|
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Nine
Months Ended
September
30, 2010
|
|
Nine
Months Ended
September
30, 2009
|
|
Change
in
|
|
|
|
Number
|
|
Number
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Occupancy
|
|
Average
|
|
Comparable
|
|
Comparable
|
|
Brand
|
|
of
Hotels
|
|
of
Rooms
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
Percentages
|
|
Daily
Rate
|
|
RevPAR
|
|
RevPAR
|
|
Marriott
(1)
|
|
18
|
|
6,934
|
|
70.9%
|
|
$
150.50
|
|
$
106.70
|
|
69.8%
|
|
$
152.97
|
|
$
106.77
|
|
-0.1%
|
|
Hilton
(2)
|
|
6
|
|
2,133
|
|
74.4%
|
|
$
170.80
|
|
$
127.08
|
|
72.3%
|
|
$
166.35
|
|
$
120.27
|
|
5.7%
|
|
Hyatt
|
|
1
|
|
403
|
|
85.7%
|
|
$
120.63
|
|
$
103.38
|
|
74.5%
|
|
$
125.67
|
|
$
93.62
|
|
10.4%
|
|
Other
Brand Affiliations (3)
|
|
2
|
|
647
|
|
77.6%
|
|
$
117.38
|
|
$
91.09
|
|
73.3%
|
|
$
124.30
|
|
$
91.11
|
|
0.0%
|
|
Independent
(4)
|
|
3
|
|
1,196
|
|
60.5%
|
|
$
103.31
|
|
$
62.50
|
|
64.7%
|
|
$
100.18
|
|
$
64.82
|
|
-3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Comparable Portfolio
|
|
30
|
|
11,313
|
|
71.4%
|
|
$
146.79
|
|
$
104.81
|
|
70.1%
|
|
$
147.46
|
|
$
103.37
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Does not include five hotels included in the Mass Mutual portfolio,
reclassified as "Operations Held for Non-Sale Disposition" on our
balance sheets and statements of operations.
|
|
(2)
Does not include one hotel included in the Mass Mutual portfolio,
reclassified as "Operations Held for Non-Sale Disposition" on our
balance sheets and statements of operations.
|
|
(3)
Includes a Fairmont and a Sheraton. Does not include two hotels
included in the Mass Mutual portfolio, reclassified as "Operations Held
for Non-Sale Disposition" on our balance sheets and statements
|
|
of operations.
|
|
(4)
Excludes the Royal Palm Miami Beach that is being repositioned
beginning in 2010.
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Debt
Summary
|
|
(Unaudited
- dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate /
|
|
Maturity
|
|
September
30, 2010
|
|
Subsequent
|
|
November
4, 2010
|
|
Debt
|
|
Collateral
|
|
Spread
|
|
Date
|
|
Balance
(1)
|
|
Events
(2)
|
|
Balance
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
Rate Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured
Mortgage Debt
|
|
Hilton
Times Square
|
|
5.92%
|
|
12/1/2010
|
|
$
81,000
|
|
$
(81,000)
|
|
$
-
|
|
Secured
Mortgage Debt
|
|
Hilton
Times Square
|
|
4.97%
|
|
11/1/2020
|
|
-
|
|
92,500
|
|
92,500
|
|
Secured
Mortgage Debt
|
|
Renaissance
Long Beach
|
|
4.98%
|
|
7/1/2012
|
|
33,444
|
|
|
|
33,444
|
|
Secured
Mortgage Debt
|
|
Rochester
laundry facility
|
|
9.88%
|
|
6/1/2013
|
|
2,696
|
|
|
|
2,696
|
|
Secured
Mortgage Debt
|
|
Doubletree
Minneapolis
|
|
5.34%
|
|
5/1/2015
|
|
17,723
|
|
|
|
17,723
|
|
Secured
Mortgage Debt
|
|
Hilton
Del Mar
|
|
5.34%
|
|
5/1/2015
|
|
25,703
|
|
|
|
25,703
|
|
Secured
Mortgage Debt
|
|
Marriott
Houston
|
|
5.34%
|
|
5/1/2015
|
|
23,594
|
|
|
|
23,594
|
|
Secured
Mortgage Debt
|
|
Marriott
Park City
|
|
5.34%
|
|
5/1/2015
|
|
15,381
|
|
|
|
15,381
|
|
Secured
Mortgage Debt
|
|
Marriott
Philadelphia
|
|
5.34%
|
|
5/1/2015
|
|
27,868
|
|
|
|
27,868
|
|
Secured
Mortgage Debt
|
|
Marriott
Troy
|
|
5.34%
|
|
5/1/2015
|
|
36,081
|
|
|
|
36,081
|
|
Secured
Mortgage Debt
|
|
Marriott
Tysons Corner
|
|
5.34%
|
|
5/1/2015
|
|
46,039
|
|
|
|
46,039
|
|
Secured
Mortgage Debt
|
|
The
Kahler Grand
|
|
5.34%
|
|
5/1/2015
|
|
28,381
|
|
|
|
28,381
|
|
Secured
Mortgage Debt
|
|
Valley
River Inn
|
|
5.34%
|
|
5/1/2015
|
|
11,844
|
|
|
|
11,844
|
|
Secured
Mortgage Debt
|
|
Renaissance
Harborplace
|
|
5.13%
|
|
1/1/2016
|
|
105,241
|
|
|
|
105,241
|
|
Secured
Mortgage Debt
|
|
Marriott
Del Mar
|
|
5.69%
|
|
1/11/2016
|
|
48,000
|
|
|
|
48,000
|
|
Secured
Mortgage Debt
|
|
Hilton
Houston North
|
|
5.66%
|
|
3/11/2016
|
|
33,373
|
|
|
|
33,373
|
|
Secured
Mortgage Debt
|
|
Renaissance
Orlando Resort at Sea World®
|
|
5.52%
|
|
7/1/2016
|
|
84,403
|
|
|
|
84,403
|
|
Secured
Mortgage Debt
|
|
Embassy
Suites Chicago
|
|
5.58%
|
|
3/1/2017
|
|
75,000
|
|
|
|
75,000
|
|
Secured
Mortgage Debt
|
|
Marriott
Boston Long Wharf
|
|
5.58%
|
|
4/11/2017
|
|
176,000
|
|
|
|
176,000
|
|
Secured
Mortgage Debt
|
|
Embassy
Suites La Jolla
|
|
6.60%
|
|
6/1/2019
|
|
70,000
|
|
|
|
70,000
|
|
Secured
Mortgage Debt
|
|
Renaissance
Washington DC
|
|
5.95%
|
|
5/1/2021
|
|
132,746
|
|
|
|
132,746
|
|
Exchangeable
Senior Notes
|
|
Guaranty
|
|
4.60%
|
|
7/15/2027
|
|
62,500
|
|
-
|
|
62,500
|
|
Total
Fixed Rate Debt
|
|
|
|
|
|
|
|
1,137,017
|
|
11,500
|
|
1,148,517
|
|
Credit
Facility
|
|
Unsecured
|
|
L +
3.25% - 4.25%
|
|
11/1/2013
|
|
-
|
|
-
|
|
-
|
|
TOTAL
DEBT
|
|
|
|
|
|
|
|
$
1,137,017
|
|
$
11,500
|
|
$
1,148,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
A cumulative redeemable preferred
|
|
|
|
8.00%
|
|
perpetual
|
|
$
176,250
|
|
$
-
|
|
$
176,250
|
|
Series
C cumulative convertible redeemable preferred
|
|
|
6.45%
|
|
perpetual
|
|
$
100,000
|
|
$
-
|
|
$
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Statistics
|
|
|
|
|
|
|
|
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%
Fixed Rate Debt
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|
|
|
|
|
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|
100.0%
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|
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|
100.0%
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|
%
Floating Rate Debt
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|
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|
0.0%
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0.0%
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|
Average
Interest Rate
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|
5.56%
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|
5.49%
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|
Weighted
Average Maturity of Debt (3)
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|
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|
6.4
years
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|
7.2
years
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(1)
Excludes debt in the Company's secured debt restructuring program.
(2)
Subsequent Events include the Company's refinance of the $81.0 million
mortgage on the Hilton Times Square for a new $92.5 million mortgage
secured by the Hilton Times Square, as well as the Company's entry into
a new $150.0 million senior corporate credit facility.
(3)
Assumes the exchangeable senior notes remain outstanding to maturity.
If the exchangeable senior notes were redeemed upon the first put
date, the weighted average maturity would be approximately 6 years.
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