ALISO
VIEJO, Calif., Aug.
6, 2010 -- Sunstone Hotel Investors, Inc. (the "Company") (NYSE: SHO)
today announced results for the second quarter ended June 30, 2010.
RevPAR
and hotel EBITDA margin information presented reflect the Company's
core 30 hotel portfolio on a pro forma basis.
Second
Quarter 2010 Operational Results:
- Total
revenue was $181.0
million.
- Pro
forma RevPAR was $111.91.
- Loss
attributable to common stockholders was $4.9 million.
- Loss
attributable to common stockholders per diluted share was $0.05.
- Adjusted
EBITDA was $43.2
million.
- Pro
forma Adjusted EBITDA for the 30 hotel portfolio was $39.9 million.
- Adjusted
FFO available to common stockholders was $17.8 million.
- Adjusted
FFO available to common stockholders per diluted share was $0.18.
- Pro
forma Adjusted FFO available to common stockholders per diluted share
was $0.18.
- Pro
forma hotel EBITDA margin was 26.9%.
Art
Buser, President and Chief Executive Officer, stated, "We
continue to see increasing signs of a cyclical recovery. Occupancies
increased to levels that enabled our hotels to increase rates. During
the quarter we were impressed with our hotel operators' ability to
drive improved RevPAR and margin performance. We are focusing our
efforts on maximizing the performance of our existing high quality
portfolio and selectively analyzing acquisition opportunities to
increase the long term value of our portfolio."
SELECTED
FINANCIAL DATA
|
|
($ in
millions, except RevPAR and per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
2010
|
2009
|
% Change
|
|
2010
|
2009
|
% Change
|
|
Total Revenue
|
$ 181.0
|
$ 176.1
|
2.8%
|
|
$ 341.8
|
$ 347.5
|
(1.6)%
|
|
Pro forma
RevPAR (1)
|
$
111.91
|
$
104.83
|
6.8%
|
|
$
103.09
|
$
102.79
|
0.3%
|
|
Pro forma
hotel EBITDA margin (1)
|
26.9%
|
26.2%
|
70 bps
|
|
24.3%
|
24.9%
|
(60) bps
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$ (4.9
)
|
$
(135.4)
|
|
|
$
(31.2)
|
$
(134.5)
|
|
|
Loss
attributable to common stockholders per diluted share
|
$
(0.05)
|
$
(2.23)
|
|
|
$
(0.32)
|
$
(2.38 )
|
|
|
EBITDA
|
$ 47.3
|
$
(74.8)
|
|
|
$ 77.3
|
$
(12.5 )
|
|
|
Adjusted
EBITDA
|
$ 43.2
|
$ 44.8
|
|
|
$ 74.2
|
$ 83.7
|
|
|
FFO
available to common stockholders
|
$ 19.9
|
$
(92.0)
|
|
|
$ 18.9
|
$
(60.7 )
|
|
|
Adjusted FFO
available to common stockholders
|
$ 17.8
|
$ 13.7
|
|
|
$ 21.7
|
$ 20.7
|
|
|
FFO
available to common stockholders per diluted share (2)
|
$ 0.20
|
$
(1.51)
|
|
|
$ 0.19
|
$
(1.07 )
|
|
|
Adjusted FFO
available to common stockholders per diluted share (2)
|
$ 0.18
|
$ 0.22
|
|
|
$ 0.22
|
$ 0.37
|
|
|
(1) Includes the
30 hotels held for investment by the Company as of June 30, 2010,
excluding the Mass Mutual
eight hotels
reclassified as “Operations Held for Non-Sale Disposition” on the
Company’s balance sheets and statements
of
operations, and the W San Diego and Marriott Ontario Airport
reclassified as discontinued operations on the Company’s
balance
sheets and statements of operations.
|
|
(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 $0.21 and $(1.38), respectively, for
the three months ended June 30, 2010 and
2009, and
$0.22 and $(0.94), respectively, for the six months ended June 30, 2010
and 2009. On an “as-converted” basis,
Adjusted FFO
available to common stockholders per diluted share is $0.19 and $0.23,
respectively, for the three months
ended June
30, 2010 and 2009, and $0.25 and $0.39, respectively, for the six
months ended June 30, 2010 and 2009.
|
|
|
|
|
|
|
|
|
|
The
Company has filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q for the quarter endedJune
30, 2010.
Disclosure
regarding the non-GAAP financial measures in this release is included
on pages 3 and 4. Reconciliations of non-GAAP financial measures to the
most comparable GAAP measure for each of the periods presented are
included on pages 7 through 12 of this release.
Finance
Update
W
San Diego –
As part of the Company's secured debt restructuring program, the
Company completed the previously announced deed back of the W San Diego on July 2, 2010.
The Company will record a gain on extinguishment of debt to
discontinued operations in the third quarter of 2010, and the net
assets and liabilities will be removed from its balance sheets.
Balance
Sheet/Liquidity Update
As of June 30, 2010,
the Company had approximately $274.5
million of cash
and cash equivalents, including restricted cash of$70.2 million.
The Company intends to use a portion of its cash balance for
acquisition opportunities.
On June 30, 2010,
total assets were $2.4
billion, including $1.9
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 June
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 second quarter of 2010, the Company invested $8.5 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 $70.0
million into
capital improvements projects during 2010. The Company's capital
improvements program is aimed at value-adding renovation and
repositioning projects, including the following:
Embassy
Suites Chicago –
Guest suites, corridors and lobby to be renovated beginning in the
fourth quarter 2010.
Renaissance Washington D.C. – Guest rooms and certain
meeting space to be renovated beginning in the third quarter 2010.
Kahler
Grand Rochester –
Deluxe rooms, meeting space and certain public areas to be renovated,
and new energy efficient windows to be installed beginning in late
2010.
Marriott
Tysons Corner –
Renovation of guestrooms and exterior started late in second quarter
2010.
Dividend
Update
On August 5, 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 October
15, 2010 to
stockholders of record onSeptember 30,
2010. No dividend was declared on the Company's common stock.
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.
Earnings
Call
The
Company will host a conference call to discuss second quarter results on August 6, 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 1-866-225-8754 (for domestic
callers) or 1-480-629-9692 (for international callers) with passcode
#4323202. 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 30 hotels comprised of 11,313 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 atwww.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 August 6, 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.comand
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)
adjusted pro forma hotel EBITDA and pro forma 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 7, 8,
9 and 10. Reconciliations and the components of adjusted pro
forma hotel EBITDA and pro forma hotel EBITDA margin are set forth on
pages 11 and 12. We believe adjusted pro forma hotel EBITDA and pro
forma 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 7, 8, 9 and 10.
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 adjusted pro forma hotel EBITDA line in
presenting pro forma hotel EBITDA margins. Management believes the
calculation of adjusted pro forma hotel EBITDA results in a more
accurate presentation of hotel EBITDA margins of the Company's 30 hotel
portfolio. See pages 11 and 12 for reconciliations of adjusted pro
forma hotel EBITDA to the comparable GAAP measure.
We
caution investors that amounts presented in accordance with our
definitions of EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, adjusted pro
forma hotel EBITDA and pro forma 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, adjusted pro forma hotel
EBITDA and pro forma 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,
adjusted pro forma hotel EBITDA and pro forma 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,
adjusted pro forma hotel EBITDA and pro forma 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.
|
|
Consolidated
Balance Sheets
|
|
(In
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
204,299
|
|
$
353,255
|
|
|
Restricted
cash
|
70,237
|
|
36,858
|
|
|
Accounts
receivable, net
|
26,484
|
|
22,624
|
|
|
Due from
affiliates
|
34
|
|
62
|
|
|
Inventories
|
2,282
|
|
2,446
|
|
|
Prepaid
expenses
|
5,330
|
|
7,423
|
|
|
Investment
in hotel property of discontinued operations, net
|
-
|
|
16,471
|
|
|
Other
current assets of discontinued operations, net
|
-
|
|
1,739
|
|
|
Investment
in hotel properties of operations held for non-sale disposition, net
|
99,527
|
|
102,343
|
|
|
Other
current assets of operations held for non-sale disposition, net
|
29,443
|
|
14,140
|
|
Total
current assets
|
437,636
|
|
557,361
|
|
|
|
|
|
|
|
Investment
in hotel properties, net
|
1,919,125
|
|
1,923,392
|
|
Other real
estate, net
|
12,058
|
|
14,044
|
|
Investments
in unconsolidated joint ventures
|
543
|
|
542
|
|
Deferred
financing fees, net
|
4,920
|
|
7,300
|
|
Goodwill
|
4,673
|
|
4,673
|
|
Other
assets, net
|
9,427
|
|
6,218
|
|
|
|
|
|
|
|
Total assets
|
$
2,388,382
|
|
$
2,513,530
|
|
|
|
|
|
|
|
Liabilities
and Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
$
12,673
|
|
$
12,425
|
|
|
Accrued
payroll and employee benefits
|
9,497
|
|
9,092
|
|
|
Due to Third
Party Managers
|
9,761
|
|
9,817
|
|
|
Dividends
payable
|
5,137
|
|
5,137
|
|
|
Other
current liabilities
|
21,907
|
|
21,910
|
|
|
Current
portion of notes payable
|
93,401
|
|
153,778
|
|
|
Note payable
of discontinued operations
|
-
|
|
25,499
|
|
|
Notes
payable of operations held for non-sale disposition
|
162,972
|
|
184,121
|
|
|
Other
current liabilities of discontinued operations, net
|
43,904
|
|
41,449
|
|
|
Other
current liabilities of operations held for non-sale disposition
|
20,455
|
|
6,364
|
|
Total
current liabilities
|
379,707
|
|
469,592
|
|
|
|
|
|
|
|
Notes
payable, less current portion
|
1,043,622
|
|
1,050,019
|
|
Other
liabilities
|
7,692
|
|
7,256
|
|
Total
liabilities
|
1,431,021
|
|
1,526,867
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
-
|
|
-
|
|
|
|
|
|
|
|
Preferred
stock, Series C Cumulative Convertible Redeemable Preferred
|
|
|
|
|
|
Stock, $0.01
par value, 4,102,564 shares authorized, issued and
|
|
|
|
|
|
outstanding
at June 30, 2010 and December 31, 2009, liquidation
|
|
|
|
|
|
preference
of $24.375 per share
|
99,996
|
|
99,896
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred
stock, $0.01 par value, 100,000,000 shares authorized.
|
|
|
|
|
|
8.0% Series A Cumulative Redeemable Preferred Stock,
|
|
|
|
|
|
7,050,000 shares issued and outstanding at June 30, 2010 and
|
|
|
|
|
|
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,
|
|
|
|
|
|
97,216,527 shares issued and outstanding at June 30, 2010
and
|
|
|
|
|
|
96,904,075 shares issued and outstanding at December 31,
2009
|
972
|
|
969
|
|
|
Additional
paid in capital
|
1,120,657
|
|
1,119,005
|
|
|
Retained
earnings (deficit)
|
(29,732)
|
|
(8,949)
|
|
|
Cumulative
dividends
|
(407,801)
|
|
(397,527)
|
|
|
Accumulated
other comprehensive loss
|
(2,981)
|
|
(2,981)
|
|
Total
stockholders' equity
|
857,365
|
|
886,767
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$
2,388,382
|
|
$
2,513,530
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Unaudited
Consolidated Statements of Operations
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Room
|
|
$ 108,323
|
|
$
101,214
|
|
$ 198,701
|
|
$
197,897
|
|
Food and
beverage
|
|
40,543
|
|
40,220
|
|
78,751
|
|
81,257
|
|
Other
operating
|
|
12,008
|
|
13,086
|
|
24,321
|
|
25,412
|
|
Revenues of
operations held for non-sale disposition
|
|
20,158
|
|
21,575
|
|
39,992
|
|
42,922
|
|
Total
revenues
|
|
181,032
|
|
176,095
|
|
341,765
|
|
347,488
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Room
|
|
25,669
|
|
24,073
|
|
48,961
|
|
46,814
|
|
Food and
beverage
|
|
29,095
|
|
29,046
|
|
56,783
|
|
58,422
|
|
Other
operating
|
|
6,379
|
|
6,376
|
|
13,117
|
|
13,334
|
|
Advertising
and promotion
|
|
8,903
|
|
8,728
|
|
17,225
|
|
17,903
|
|
Repairs and
maintenance
|
|
6,614
|
|
6,582
|
|
13,077
|
|
13,301
|
|
Utilities
|
|
5,530
|
|
5,588
|
|
11,359
|
|
12,148
|
|
Franchise
costs
|
|
5,636
|
|
5,104
|
|
10,151
|
|
9,799
|
|
Property
tax, ground lease and insurance
|
|
10,663
|
|
10,096
|
|
20,970
|
|
20,055
|
|
Property
general and administrative
|
|
18,876
|
|
17,867
|
|
36,021
|
|
35,896
|
|
Corporate
overhead
|
|
5,135
|
|
4,785
|
|
9,715
|
|
10,492
|
|
Depreciation
and amortization
|
|
23,264
|
|
23,765
|
|
46,822
|
|
47,289
|
|
Operating
expenses of operations held for non-sale disposition
|
|
17,912
|
|
20,400
|
|
35,950
|
|
39,260
|
|
Property and
goodwill impairment losses
|
|
1,943
|
|
27,237
|
|
1,943
|
|
28,643
|
|
Goodwill
impairment losses of operations held for non-sale disposition
|
|
-
|
|
697
|
|
-
|
|
3,007
|
|
Total
operating expenses
|
|
165,619
|
|
190,344
|
|
322,094
|
|
356,363
|
|
Operating
income (loss)
|
|
15,413
|
|
(14,249)
|
|
19,671
|
|
(8,875)
|
|
Equity in
earnings (losses) of unconsolidated joint ventures
|
|
163
|
|
(584)
|
|
275
|
|
(2,101)
|
|
Interest and
other income
|
|
99
|
|
252
|
|
270
|
|
872
|
|
Interest
expense
|
|
(17,015)
|
|
(19,498)
|
|
(37,056)
|
|
(39,513)
|
|
Interest
expense of operations held for non-sale disposition
|
|
(4,986)
|
|
(2,892)
|
|
(10,397)
|
|
(5,787)
|
|
Gain on
extinguishment of debt
|
|
-
|
|
26,559
|
|
-
|
|
54,579
|
|
Loss from
continuing operations
|
|
(6,326)
|
|
(10,412)
|
|
(27,237)
|
|
(825)
|
|
Income
(loss) from discontinued operations
|
|
6,634
|
|
(119,793)
|
|
6,454
|
|
(122,870)
|
|
Net income
(loss)
|
|
308
|
|
(130,205)
|
|
(20,783)
|
|
(123,695)
|
|
Dividends
paid on unvested restricted stock compensation
|
|
-
|
|
-
|
|
-
|
|
(447)
|
|
Preferred
stock dividends and accretion
|
|
(5,187)
|
|
(5,188)
|
|
(10,374)
|
|
(10,375)
|
|
Loss
attributable to common stockholders
|
|
$
(4,879)
|
|
$ (135,393)
|
|
$ (31,157)
|
|
$ (134,517)
|
|
|
|
|
|
|
|
|
|
|
|
Basic per
share amounts:
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations attributable to
common stockholders
|
|
$
(0.12)
|
|
$
(0.26)
|
|
$
(0.39)
|
|
$
(0.21)
|
|
Income (loss) from discontinued operations
|
|
0.07
|
|
(1.97)
|
|
0.07
|
|
(2.17)
|
|
Basic loss
attributable to common stockholders per common share
|
|
$
(0.05)
|
|
$
(2.23)
|
|
$
(0.32)
|
|
$
(2.38)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted per
share amounts:
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations attributable to
common stockholders
|
|
$
(0.12)
|
|
$
(0.26)
|
|
$
(0.39)
|
|
$
(0.21)
|
|
Income (loss) from discontinued operations
|
|
0.07
|
|
(1.97)
|
|
0.07
|
|
(2.17)
|
|
Diluted loss
attributable to common stockholders per common share
|
|
$
(0.05)
|
|
$
(2.23)
|
|
$
(0.32)
|
|
$
(2.38)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
97,188
|
|
60,845
|
|
97,118
|
|
56,549
|
|
Diluted
|
|
97,188
|
|
60,845
|
|
97,118
|
|
56,549
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared per common share
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Non-GAAP Financial
Measures
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to EBITDA and Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$ (4,879)
|
$ (135,393)
|
|
$ (31,157)
|
$ (134,517)
|
|
Dividends
paid on unvested restricted stock compensation
|
-
|
-
|
|
-
|
447
|
|
Series A and
C preferred stock dividends
|
5,187
|
5,188
|
|
10,374
|
10,375
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Depreciation and amortization
|
23,264
|
23,765
|
|
46,822
|
47,289
|
|
Amortization of lease intangibles
|
150
|
-
|
|
150
|
-
|
|
Interest expense
|
16,185
|
18,198
|
|
33,123
|
37,255
|
|
Interest expense - default rate
|
120
|
-
|
|
884
|
-
|
|
Amortization of deferred financing fees
|
306
|
361
|
|
799
|
635
|
|
Write-off of deferred financing fees
|
123
|
284
|
|
1,585
|
284
|
|
Loan
penalties and fees
|
36
|
-
|
|
174
|
-
|
|
Non-cash interest related to discount on Senior Notes
|
245
|
655
|
|
491
|
1,339
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
Depreciation and amortization
|
13
|
1,282
|
|
27
|
2,554
|
|
Interest expense
|
-
|
663
|
|
-
|
1,348
|
|
Amortization of deferred financing fees
|
-
|
46
|
|
-
|
92
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Depreciation and amortization
|
1,544
|
2,727
|
|
3,237
|
5,434
|
|
Interest expense
|
2,473
|
2,760
|
|
5,182
|
5,523
|
|
Interest expense - default rate
|
2,078
|
-
|
|
4,354
|
-
|
|
Amortization of deferred financing fees
|
132
|
132
|
|
264
|
264
|
|
Loan
penalties and fees
|
303
|
-
|
|
597
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Depreciation and amortization
|
-
|
2,770
|
|
124
|
5,753
|
|
Interest expense
|
-
|
1,727
|
|
225
|
3,439
|
|
Amortization of deferred financing fees
|
-
|
10
|
|
2
|
21
|
|
Loan
penalties and fees
|
-
|
-
|
|
48
|
-
|
|
EBITDA
|
47,280
|
(74,825)
|
|
77,305
|
(12,465)
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
686
|
1,220
|
|
1,648
|
2,348
|
|
Gain
on sale of assets
|
-
|
(35)
|
|
-
|
(354)
|
|
Gain
on extinguishment of debt
|
-
|
(26,559)
|
|
-
|
(54,579)
|
|
Impairment loss
|
1,943
|
27,237
|
|
1,943
|
28,643
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
7
|
11
|
|
17
|
16
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Impairment loss
|
-
|
697
|
|
-
|
3,007
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Loss
on sale of assets
|
-
|
13,070
|
|
-
|
13,070
|
|
Gain
on extinguishment of debt
|
(6,747)
|
-
|
|
(6,747)
|
-
|
|
Impairment loss
|
-
|
104,007
|
|
-
|
104,007
|
|
|
(4,111)
|
119,648
|
|
(3,139)
|
96,158
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 43,169
|
$
44,823
|
|
$
74,166
|
$
83,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to FFO and Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$ (4,879)
|
$ (135,393)
|
|
$ (31,157)
|
$ (134,517)
|
|
Dividends
paid on unvested restricted stock compensation
|
-
|
-
|
|
-
|
447
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
23,133
|
23,611
|
|
46,553
|
46,972
|
|
Amortization of lease intangibles
|
150
|
-
|
|
150
|
-
|
|
Gain
on sale of assets
|
-
|
(35)
|
|
-
|
(354)
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
-
|
1,264
|
|
-
|
2,518
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
1,544
|
2,727
|
|
3,237
|
5,434
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
-
|
2,770
|
|
124
|
5,753
|
|
Loss
on sale of assets
|
-
|
13,070
|
|
-
|
13,070
|
|
FFO
available to common stockholders
|
19,948
|
(91,986)
|
|
18,907
|
(60,677)
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
Interest expense - default rate
|
120
|
-
|
|
884
|
-
|
|
Write-off of deferred financing fees
|
123
|
284
|
|
1,585
|
284
|
|
Loan
penalties and fees
|
36
|
-
|
|
174
|
-
|
|
Gain
on extinguishment of debt
|
-
|
(26,559)
|
|
-
|
(54,579)
|
|
Impairment loss
|
1,943
|
27,237
|
|
1,943
|
28,643
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
Interest expense - default rate
|
2,078
|
-
|
|
4,354
|
-
|
|
Loan
penalties and fees
|
303
|
-
|
|
597
|
-
|
|
Impairment loss
|
-
|
697
|
|
-
|
3,007
|
|
Discontinued
operations:
|
|
|
|
|
|
|
Loan
penalties and fees
|
-
|
-
|
|
48
|
-
|
|
Gain
on extinguishment of debt
|
(6,747)
|
-
|
|
(6,747)
|
-
|
|
Impairment loss
|
-
|
104,007
|
|
-
|
104,007
|
|
|
(2,144)
|
105,666
|
|
2,838
|
81,362
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders
|
$ 17,804
|
$
13,680
|
|
$
21,745
|
$
20,685
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
0.20
|
$
(1.51)
|
|
$
0.19
|
$
(1.07)
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders per diluted share
|
$
0.18
|
$
0.22
|
|
$
0.22
|
$
0.37
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,188
|
60,845
|
|
97,118
|
56,549
|
|
Shares
associated with unvested restricted stock awards
|
421
|
-
|
|
379
|
-
|
|
Diluted
weighted average shares outstanding (1)
|
97,609
|
60,845
|
|
97,497
|
56,549
|
|
|
|
|
|
|
|
|
(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 $0.21 and
$(1.38), respectively, for the three months
ended June
30, 2010 and 2009, and $0.22 and $(0.94), respectively, for the six months ended
June 30, 2010 and 2009. On an "as-
converted"
basis, Adjusted FFO available to
common stockholders per diluted share is $0.19 and $0.23, respectively,
for the three
months ended
June 30, 2010 and 2009, and $0.25 and $0.39, respectively, for the six
months ended June 30, 2010 and 2009.
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 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
|
$
(4,879)
|
$
427
|
$
197
|
$
2,740
|
$
(6,634)
|
$
(8,149)
|
|
Series A and
C preferred stock dividends
|
5,187
|
-
|
-
|
-
|
-
|
5,187
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
23,264
|
-
|
255
|
-
|
-
|
23,519
|
|
Amortization of lease intangibles
|
150
|
-
|
-
|
-
|
-
|
150
|
|
Interest expense
|
16,185
|
(143)
|
-
|
-
|
-
|
16,042
|
|
Interest expense - default rate
|
120
|
(120)
|
-
|
-
|
-
|
-
|
|
Amortization of deferred financing fees
|
306
|
(5)
|
-
|
-
|
-
|
301
|
|
Write-off of deferred financing fees
|
123
|
(123)
|
-
|
-
|
-
|
-
|
|
Loan
penalties and fees
|
36
|
(36)
|
-
|
-
|
-
|
-
|
|
Non-cash interest related to discount on Senior Notes
|
245
|
-
|
-
|
-
|
-
|
245
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
13
|
-
|
-
|
-
|
-
|
13
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,544
|
-
|
-
|
(1,544)
|
-
|
-
|
|
Interest expense
|
2,473
|
-
|
-
|
(2,473)
|
-
|
-
|
|
Interest expense - default rate
|
2,078
|
-
|
-
|
(2,078)
|
-
|
-
|
|
Amortization of deferred financing fees
|
132
|
-
|
-
|
(132)
|
-
|
-
|
|
Loan
penalties and fees
|
303
|
-
|
-
|
(303)
|
-
|
-
|
|
EBITDA
|
47,280
|
-
|
452
|
(3,790)
|
(6,634)
|
37,308
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
686
|
-
|
-
|
-
|
-
|
686
|
|
Impairment loss
|
1,943
|
-
|
-
|
-
|
-
|
1,943
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
7
|
-
|
-
|
-
|
-
|
7
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Gain
on extinguishment of debt
|
(6,747)
|
-
|
-
|
-
|
6,747
|
-
|
|
|
|
|
|
|
|
|
|
|
(4,111)
|
-
|
-
|
-
|
6,747
|
2,636
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
43,169
|
$
-
|
$
452
|
$
(3,790)
|
$
113
|
$
39,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Reconciliation of Loss Attributable to Common Stockholders to FFO and
Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(4,879)
|
$
427
|
$
197
|
$
2,740
|
$
(6,634)
|
$
(8,149)
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
23,133
|
-
|
255
|
-
|
-
|
23,388
|
|
Amortization of lease intangibles
|
150
|
-
|
-
|
-
|
-
|
150
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
1,544
|
-
|
-
|
(1,544)
|
-
|
-
|
|
FFO
available to common stockholders
|
19,948
|
427
|
452
|
1,196
|
(6,634)
|
15,389
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
120
|
(120)
|
-
|
-
|
-
|
-
|
|
Write-off of deferred financing fees
|
123
|
(123)
|
-
|
-
|
-
|
-
|
|
Loan
penalties and fees
|
36
|
(36)
|
-
|
-
|
-
|
-
|
|
Impairment loss
|
1,943
|
-
|
-
|
-
|
-
|
1,943
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
2,078
|
-
|
-
|
(2,078)
|
-
|
-
|
|
Loan
penalties and fees
|
303
|
-
|
-
|
(303)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Gain
on extinguishment of debt
|
(6,747)
|
-
|
-
|
-
|
6,747
|
-
|
|
|
(2,144)
|
(279)
|
-
|
(2,381)
|
6,747
|
1,943
|
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders
|
$
17,804
|
$
148
|
$
452
|
$
(1,185)
|
$
113
|
$
17,332
|
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
0.20
|
|
|
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders per diluted share
|
$
0.18
|
|
|
|
|
$
0.18
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,188
|
|
|
|
|
97,188
|
|
Shares
associated with unvested restricted stock awards
|
421
|
|
|
|
|
421
|
|
Diluted
weighted average shares outstanding (7)
|
97,609
|
|
|
|
|
97,609
|
|
|
|
|
|
|
|
|
|
(1) Actual
includes results for the 30 hotels held for investment, eight hotels
held for non-sale disposition and two hotels held in receivership at
June 30, 2010.
|
|
(2) Held for
Investment includes only the interest and penalties associated with the
Three Released Mass Mutual hotels. 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 Eight Mass Mutual 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 transferred to a receiver as of June 30,
2010.
It also
includes the ownership expenses of Renaissance Westchester prior to June 14, 2010 when it
was reacquired by the Company.
|
|
(6) Pro
forma includes the 30 hotels held for investment by the Company at June
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.
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 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
|
$ (31,157)
|
$
2,229
|
$
346
|
$
6,355
|
$
(6,454)
|
$
(28,681)
|
|
Series A and
C preferred stock dividends
|
10,374
|
-
|
-
|
-
|
-
|
10,374
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
46,822
|
-
|
561
|
-
|
-
|
47,383
|
|
Amortization of lease intangibles
|
150
|
-
|
-
|
-
|
-
|
150
|
|
Interest expense
|
33,123
|
(1,053)
|
-
|
-
|
-
|
32,070
|
|
Interest expense - default rate
|
884
|
(884)
|
-
|
-
|
-
|
-
|
|
Amortization of deferred financing fees
|
799
|
(34)
|
-
|
-
|
-
|
765
|
|
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
|
491
|
-
|
-
|
-
|
-
|
491
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
27
|
-
|
-
|
-
|
-
|
27
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
3,237
|
-
|
-
|
(3,237)
|
-
|
-
|
|
Interest expense
|
5,182
|
-
|
-
|
(5,182)
|
-
|
-
|
|
Interest expense - default rate
|
4,354
|
-
|
-
|
(4,354)
|
-
|
-
|
|
Amortization of deferred financing fees
|
264
|
-
|
-
|
(264)
|
-
|
-
|
|
Loan
penalties and fees
|
597
|
-
|
-
|
(597)
|
-
|
-
|
|
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
|
77,305
|
-
|
907
|
(7,279)
|
(6,853)
|
64,080
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
1,648
|
-
|
-
|
-
|
-
|
1,648
|
|
Impairment loss
|
1,943
|
-
|
-
|
-
|
-
|
1,943
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
17
|
-
|
-
|
-
|
-
|
17
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Gain
on extinguishment of debt
|
(6,747)
|
-
|
-
|
-
|
6,747
|
-
|
|
|
(3,139)
|
-
|
-
|
-
|
6,747
|
3,608
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
74,166
|
$
-
|
$
907
|
$
(7,279)
|
$
(106)
|
$
67,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Reconciliation of Loss Attributable to Common Stockholders to FFO and
Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$ (31,157)
|
$
2,229
|
$
346
|
$
6,355
|
$
(6,454)
|
$
(28,681)
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
46,553
|
-
|
561
|
-
|
-
|
47,114
|
|
Amortization of lease intangibles
|
150
|
-
|
-
|
-
|
-
|
150
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
3,237
|
-
|
-
|
(3,237)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
124
|
-
|
-
|
-
|
(124)
|
-
|
|
FFO
available to common stockholders
|
18,907
|
2,229
|
907
|
3,118
|
(6,578)
|
18,583
|
|
|
|
|
|
|
|
|
|
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
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
4,354
|
-
|
-
|
(4,354)
|
-
|
-
|
|
Loan
penalties and fees
|
597
|
-
|
-
|
(597)
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Loan
penalties and fees
|
48
|
-
|
-
|
-
|
(48)
|
-
|
|
Gain
on extinguishment of debt
|
(6,747)
|
-
|
-
|
-
|
6,747
|
-
|
|
|
2,838
|
(1,142)
|
-
|
(4,951)
|
6,699
|
3,444
|
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders
|
$
21,745
|
$
1,087
|
$
907
|
$
(1,833)
|
$
121
|
$
22,027
|
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
0.19
|
|
|
|
|
$
0.19
|
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders per diluted share
|
$
0.22
|
|
|
|
|
$
0.23
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
97,118
|
|
|
|
|
97,118
|
|
Shares
associated with unvested restricted stock awards
|
379
|
|
|
|
|
379
|
|
Diluted
weighted average shares outstanding (7)
|
97,497
|
|
|
|
|
97,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Actual
includes results for the 30 hotels held for investment, eight hotels
held for non-sale disposition and two hotels held in receivership at
June 30, 2010.
|
|
(2) Held for
Investment includes only the interest and penalties associated with the
Three Released Mass Mutual hotels. 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 Eight Mass Mutual 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 transferred to a receiver as of June 30,
2010.
It also
includes the ownership expenses of Renaissance Westchester prior to June 14, 2010 when it
was reacquired by the Company.
|
|
(6) Pro
forma includes the 30 hotels held for investment by the Company at June
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.
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2009
|
|
|
|
Held for
|
Reacquired
|
Non-Sale
|
Discontinued
Operations
|
|
|
|
Actual (1)
|
Investment
(2)
|
Hotel (3)
|
Disposition
(4)
|
Receivership
(5)
|
Disposals (6)
|
Pro Forma (7)
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$ (290,804)
|
$
4,504
|
$
(30,662)
|
$
98,220
|
$
109,689
|
$
18,515
|
$
(90,538)
|
|
Dividends
paid on unvested restricted stock compensation
|
447
|
-
|
-
|
-
|
-
|
-
|
447
|
|
Series A and
C preferred stock dividends
|
20,749
|
-
|
-
|
-
|
-
|
-
|
20,749
|
|
Operations
held for investment:
|
|
|
|
|
-
|
|
|
|
Depreciation and amortization
|
93,795
|
-
|
1,810
|
-
|
-
|
-
|
95,605
|
|
Interest expense
|
71,940
|
(3,707)
|
-
|
-
|
-
|
-
|
68,233
|
|
Interest expense - default rate
|
472
|
(472)
|
-
|
-
|
-
|
-
|
-
|
|
Amortization of deferred financing fees
|
1,823
|
(118)
|
-
|
-
|
-
|
-
|
1,705
|
|
Write-off of deferred financing fees
|
284
|
-
|
-
|
-
|
-
|
-
|
284
|
|
Loan
penalties and fees
|
207
|
(207)
|
-
|
-
|
-
|
-
|
-
|
|
Non-cash interest related to discount on Senior Notes
|
1,813
|
-
|
-
|
-
|
-
|
-
|
1,813
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
-
|
|
|
|
Depreciation and amortization
|
5,131
|
-
|
-
|
-
|
-
|
-
|
5,131
|
|
Interest expense
|
2,614
|
-
|
-
|
-
|
-
|
-
|
2,614
|
|
Amortization of deferred financing fees
|
192
|
-
|
-
|
-
|
-
|
-
|
192
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
-
|
|
|
|
Depreciation and amortization
|
10,245
|
-
|
-
|
(10,245)
|
-
|
-
|
-
|
|
Interest expense
|
11,039
|
-
|
-
|
(11,039)
|
-
|
-
|
-
|
|
Interest expense - default rate
|
1,407
|
-
|
-
|
(1,407)
|
-
|
-
|
-
|
|
Amortization of deferred financing fees
|
527
|
-
|
-
|
(527)
|
-
|
-
|
-
|
|
Loan
penalties and fees
|
615
|
-
|
-
|
(615)
|
-
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
-
|
|
|
|
Depreciation and amortization
|
7,020
|
-
|
-
|
-
|
(5,056)
|
(1,964)
|
-
|
|
Interest expense
|
5,902
|
-
|
-
|
-
|
(5,902)
|
-
|
-
|
|
Amortization of deferred financing fees
|
39
|
-
|
-
|
-
|
(39)
|
-
|
-
|
|
Loan
penalties and fees
|
3,169
|
-
|
-
|
-
|
(3,169)
|
-
|
-
|
|
EBITDA
|
(51,374)
|
-
|
(28,852)
|
74,387
|
95,523
|
16,551
|
106,235
|
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
4,055
|
-
|
-
|
-
|
-
|
-
|
4,055
|
|
Gain
on sale of assets
|
(375)
|
-
|
-
|
-
|
-
|
-
|
(375)
|
|
Gain
on extinguishment of debt
|
(54,506)
|
-
|
-
|
-
|
-
|
-
|
(54,506)
|
|
Impairment loss
|
30,852
|
-
|
30,186
|
-
|
-
|
-
|
61,038
|
|
Bad
debt expense on corporate note receivable
|
5,557
|
-
|
-
|
-
|
-
|
-
|
5,557
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
47
|
-
|
-
|
-
|
-
|
-
|
47
|
|
Impairment loss
|
26,007
|
-
|
-
|
-
|
-
|
-
|
26,007
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
|
Impairment loss
|
91,286
|
-
|
-
|
(91,286)
|
-
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Loss
on sale of assets
|
13,052
|
-
|
-
|
-
|
-
|
(13,052)
|
-
|
|
Impairment loss
|
104,007
|
-
|
-
|
-
|
(99,089)
|
(4,918)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
219,982
|
-
|
30,186
|
(91,286)
|
(99,089)
|
(17,970)
|
41,823
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
168,608
|
$
-
|
$
1,334
|
$
(16,899)
|
$
(3,566)
|
$
(1,419)
|
$
148,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
Reconciliation of Loss Attributable to Common Stockholders to FFO and
Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$ (290,804)
|
$
4,504
|
$
(30,662)
|
$
98,220
|
$
109,689
|
$
18,515
|
$
(90,538)
|
|
Dividends
paid on unvested restricted stock compensation
|
447
|
-
|
-
|
-
|
-
|
-
|
447
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
93,248
|
-
|
1,810
|
-
|
-
|
-
|
95,058
|
|
Gain
on sale of assets
|
(375)
|
-
|
-
|
-
|
-
|
-
|
(375)
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
5,060
|
-
|
-
|
-
|
-
|
-
|
5,060
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
10,245
|
-
|
-
|
(10,245)
|
-
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
7,020
|
-
|
-
|
-
|
(5,056)
|
(1,964)
|
-
|
|
Loss
on sale of assets
|
13,052
|
-
|
-
|
-
|
-
|
(13,052)
|
-
|
|
FFO
available to common stockholders
|
(162,107)
|
4,504
|
(28,852)
|
87,975
|
104,633
|
3,499
|
9,652
|
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
|
Interest expense - default rate
|
472
|
(472)
|
-
|
-
|
-
|
-
|
-
|
|
Write-off of deferred financing fees
|
284
|
-
|
-
|
-
|
-
|
-
|
284
|
|
Loan
penalties and fees
|
207
|
(207)
|
-
|
-
|
-
|
-
|
-
|
|
Gain
on extinguishment of debt
|
(54,506)
|
-
|
-
|
-
|
-
|
-
|
(54,506)
|
|
Impairment loss
|
30,852
|
-
|
30,186
|
-
|
-
|
-
|
61,038
|
|
Bad
debt expense on corporate note receivable
|
5,557
|
-
|
-
|
-
|
-
|
-
|
5,557
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
|
Impairment loss
|
26,007
|
-
|
-
|
-
|
-
|
-
|
26,007
|
|
Operations
held for non-sale disposition:
|
|
|
|
|
|
|
-
|
|
Interest expense - default rate
|
1,407
|
-
|
-
|
(1,407)
|
-
|
-
|
-
|
|
Loan
penalties and fees
|
615
|
-
|
-
|
(615)
|
-
|
-
|
-
|
|
Impairment loss
|
91,286
|
-
|
-
|
(91,286)
|
-
|
-
|
-
|
|
Discontinued
operations:
|
|
|
|
|
|
|
-
|
|
Loan
penalties and fees
|
3,169
|
-
|
-
|
-
|
(3,169)
|
-
|
-
|
|
Impairment loss
|
104,007
|
-
|
-
|
-
|
(99,089)
|
(4,918)
|
-
|
|
|
209,357
|
(679)
|
30,186
|
(93,308)
|
(102,258)
|
(4,918)
|
38,380
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders
|
$
47,250
|
$
3,825
|
$
1,334
|
$
(5,333)
|
$
2,375
|
$
(1,419)
|
$
48,032
|
|
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$
(2.32)
|
|
|
|
|
|
$
0.14
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO
available to common stockholders per diluted share
|
$
0.68
|
|
|
|
|
|
$
0.69
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding (8)
|
69,820
|
|
|
|
|
|
69,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Actual
includes results for the 29 hotels held for investment, eight hotels
held for non-sale disposition, three hotels held in receivership and
three hotels sold during 2009.
|
|
(2) Held for
Investment includes only the interest and penalties associated with the
Three Released Mass Mutual hotels. 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 that
was transferred to a receiver
in 2009 and
reacquired by the Company in 2010.
|
|
(4) Non-Sale
Disposition includes all hotel operations, interest and penalties for
the Eight Mass Mutual hotels that are in the process of being
transferred to a receiver.
|
|
(5)
Receivership includes the W San Diego and Renaissance Westchester
hotels that were transferred to a receiver in 2009 and the Marriott
Ontario Airport that was
transferred
to a receiver in 2010.
|
|
(6)
Disposals include the Marriott Napa Valley, Marriott Riverside and
Hyatt Suites Atlanta Northwest hotels that were sold in 2009.
|
|
(7) Pro
forma includes the 30 hotels held for investment by the Company at June
30, 2010.
|
|
(8) 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
Hotel EBITDA Margins
|
|
(Unaudited
and in thousands except hotels and rooms)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30, 2010
|
|
Three Months
Ended June 30, 2009
|
|
|
Actual (1)
|
|
Reacquired
Hotel (2)
|
|
Pro Forma
Total (3)
|
|
Actual (4)
|
|
Reacquired
Hotel (5)
|
|
Pro Forma
Total (6)
|
|
Number of
Hotels
|
30
|
|
|
|
30
|
|
29
|
|
1
|
|
30
|
|
Number of
Rooms
|
11,313
|
|
|
|
11,313
|
|
10,966
|
|
347
|
|
11,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Pro
Forma EBITDA Margin (7)
|
27.4%
|
|
11.1%
|
|
26.9%
|
|
26.5%
|
|
15.1%
|
|
26.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Room revenue
|
$ 108,323
|
|
$
2,482
|
|
$
110,805
|
|
$
101,214
|
|
$
2,620
|
|
$
103,834
|
|
Food and beverage revenue
|
40,543
|
|
1,477
|
|
42,020
|
|
40,220
|
|
1,469
|
|
41,689
|
|
Other operating revenue
|
8,147
|
|
113
|
|
8,260
|
|
9,223
|
|
138
|
|
9,361
|
|
Total Hotel
Revenues
|
157,013
|
|
4,072
|
|
161,085
|
|
150,657
|
|
4,227
|
|
154,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Room expense
|
26,104
|
|
712
|
|
26,816
|
|
24,313
|
|
736
|
|
25,049
|
|
Food and beverage expense
|
29,158
|
|
1,158
|
|
30,316
|
|
29,057
|
|
1,154
|
|
30,211
|
|
Other hotel expense
|
40,443
|
|
1,151
|
|
41,594
|
|
39,969
|
|
1,116
|
|
41,085
|
|
General and administrative expense
|
18,360
|
|
599
|
|
18,959
|
|
17,423
|
|
584
|
|
18,007
|
|
Total Hotel
Expenses
|
114,065
|
|
3,620
|
|
117,685
|
|
110,762
|
|
3,590
|
|
114,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Pro
Forma Hotel EBITDA
|
42,948
|
|
452
|
|
43,400
|
|
39,895
|
|
637
|
|
40,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mass Mutual
Eight Hotels:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues of operations held for non-sale disposition
|
20,158
|
|
-
|
|
20,158
|
|
21,575
|
|
-
|
|
21,575
|
|
Operating expenses of operations held for non-sale disposition
|
(17,912)
|
|
-
|
|
(17,912)
|
|
(20,400)
|
|
-
|
|
(20,400)
|
|
Goodwill impairment losses of operations held for non-sale
disposition
|
-
|
|
-
|
|
-
|
|
(697)
|
|
-
|
|
(697)
|
|
Non-hotel
operating income
|
796
|
|
-
|
|
796
|
|
715
|
|
-
|
|
715
|
|
Amortization
of lease related costs
|
(150)
|
|
-
|
|
(150)
|
|
-
|
|
-
|
|
-
|
|
Management
company transition costs
|
(85)
|
|
-
|
|
(85)
|
|
-
|
|
-
|
|
-
|
|
Prior year
property tax supplementals and credits, net
|
-
|
|
-
|
|
-
|
|
450
|
|
-
|
|
450
|
|
Corporate
overhead
|
(5,135)
|
|
-
|
|
(5,135)
|
|
(4,785)
|
|
-
|
|
(4,785)
|
|
Depreciation
and amortization
|
(23,264)
|
|
-
|
|
(23,264)
|
|
(23,765)
|
|
-
|
|
(23,765)
|
|
Property and
goodwill impairment losses
|
(1,943)
|
|
-
|
|
(1,943)
|
|
(27,237)
|
|
-
|
|
(27,237)
|
|
Operating
Income (loss)
|
15,413
|
|
452
|
|
15,865
|
|
(14,249)
|
|
637
|
|
(13,612)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
net earnings (losses) of unconsolidated joint ventures
|
163
|
|
-
|
|
163
|
|
(584)
|
|
-
|
|
(584)
|
|
Interest and
other income
|
99
|
|
-
|
|
99
|
|
252
|
|
-
|
|
252
|
|
Interest
expense
|
(17,015)
|
|
-
|
|
(17,015)
|
|
(19,498)
|
|
-
|
|
(19,498)
|
|
Interest
expense of operations held for non-sale disposition
|
(4,986)
|
|
-
|
|
(4,986)
|
|
(2,892)
|
|
-
|
|
(2,892)
|
|
Gain on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
26,559
|
|
-
|
|
26,559
|
|
Income
(loss) from discontinued operations
|
6,634
|
|
-
|
|
6,634
|
|
(119,793)
|
|
-
|
|
(119,793)
|
|
Net Income
(Loss)
|
$
308
|
|
$
452
|
|
$
760
|
|
$ (130,205)
|
|
$
637
|
|
$
(129,568)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Represents our ownership results for the 30 hotels held for investment
as of the end of the period, excluding 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.
|
|
(2)
Represents operating results for the Renaissance Westchester while it
was in receivership prior to being reacquired by the Company on June
14, 2010.
|
|
|
|
|
|
|
(3)
Represents our ownership results for the 30 hotels held for investment
as of the end of the period, plus results for the Renaissance
Westchester during the period it
was held in
receivership, excluding 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.
|
|
(4)
Represents our ownership results for the 29 hotels held for investment
as of the end of the period, excluding 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, Renaissance
Westchester
and Marriott Ontario Airport, which have been reclassified as
discontinued operations on our balance sheets and statements of
operations.
|
|
(5)
Represents our ownership results for the Renaissance Westchester for
the entire reporting period.
|
|
|
|
|
|
|
|
|
|
(6)
Represents our ownership results for the 29 hotels held for investment
as of the end of the period plus the Renaissance Westchester, excluding
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
Pro Forma EBITDA Margin is calculated as Adjusted Pro Forma Hotel
EBITDA divided by total hotel revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Pro Forma
Hotel EBITDA Margins
|
|
(Unaudited
and in thousands except hotels and rooms)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2010
|
|
Six Months
Ended June 30, 2009
|
|
|
Actual (1)
|
|
Reacquired
Hotel (2)
|
|
Pro Forma
Total (3)
|
|
Actual (4)
|
|
Reacquired
Hotel (5)
|
|
Pro Forma
Total (6)
|
|
Number of
Hotels
|
30
|
|
|
|
30
|
|
29
|
|
1
|
|
30
|
|
Number of
Rooms
|
11,313
|
|
|
|
11,313
|
|
10,966
|
|
347
|
|
11,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel Pro
Forma EBITDA Margin (7)
|
24.7%
|
|
10.9%
|
|
24.3%
|
|
25.3%
|
|
10.7%
|
|
24.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Room revenue
|
$
198,701
|
|
$
4,931
|
|
$
203,632
|
|
$
197,897
|
|
$
5,022
|
|
$
202,919
|
|
Food and beverage revenue
|
78,751
|
|
3,114
|
|
81,865
|
|
81,257
|
|
2,605
|
|
83,862
|
|
Other operating revenue
|
16,507
|
|
240
|
|
16,747
|
|
17,579
|
|
228
|
|
17,807
|
|
Total Hotel
Revenues
|
293,959
|
|
8,285
|
|
302,244
|
|
296,733
|
|
7,855
|
|
304,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Room expense
|
49,908
|
|
1,417
|
|
51,325
|
|
47,267
|
|
1,385
|
|
48,652
|
|
Food and beverage expense
|
56,865
|
|
2,355
|
|
59,220
|
|
58,444
|
|
2,105
|
|
60,549
|
|
Other hotel expense
|
79,432
|
|
2,403
|
|
81,835
|
|
80,861
|
|
2,385
|
|
83,246
|
|
General and administrative expense
|
35,087
|
|
1,203
|
|
36,290
|
|
35,011
|
|
1,136
|
|
36,147
|
|
Total Hotel
Expenses
|
221,292
|
|
7,378
|
|
228,670
|
|
221,583
|
|
7,011
|
|
228,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Pro
Forma Hotel EBITDA
|
72,667
|
|
907
|
|
73,574
|
|
75,150
|
|
844
|
|
75,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mass Mutual
Eight Hotels:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues of operations held for non-sale disposition
|
39,992
|
|
-
|
|
39,992
|
|
42,922
|
|
-
|
|
42,922
|
|
Operating expenses of operations held for non-sale disposition
|
(35,950)
|
|
-
|
|
(35,950)
|
|
(39,260)
|
|
-
|
|
(39,260)
|
|
Goodwill impairment losses of operations held for non-sale
disposition
|
-
|
|
-
|
|
-
|
|
(3,007)
|
|
-
|
|
(3,007)
|
|
Non-hotel
operating income
|
1,677
|
|
-
|
|
1,677
|
|
1,294
|
|
-
|
|
1,294
|
|
Amortization
of lease related costs
|
(150)
|
|
-
|
|
(150)
|
|
-
|
|
-
|
|
-
|
|
Management
company transition costs
|
(85)
|
|
-
|
|
(85)
|
|
-
|
|
-
|
|
-
|
|
Prior year
property tax supplementals and credits, net
|
-
|
|
-
|
|
-
|
|
450
|
|
-
|
|
450
|
|
Corporate
overhead
|
(9,715)
|
|
-
|
|
(9,715)
|
|
(10,492)
|
|
-
|
|
(10,492)
|
|
Depreciation
and amortization
|
(46,822)
|
|
-
|
|
(46,822)
|
|
(47,289)
|
|
-
|
|
(47,289)
|
|
Property and
goodwill impairment losses
|
(1,943)
|
|
-
|
|
(1,943)
|
|
(28,643)
|
|
-
|
|
(28,643)
|
|
Operating
Income (loss)
|
19,671
|
|
907
|
|
20,578
|
|
(8,875)
|
|
844
|
|
(8,031)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
net earnings (losses) of unconsolidated joint ventures
|
275
|
|
-
|
|
275
|
|
(2,101)
|
|
-
|
|
(2,101)
|
|
Interest and
other income
|
270
|
|
-
|
|
270
|
|
872
|
|
-
|
|
872
|
|
Interest
expense
|
(37,056)
|
|
-
|
|
(37,056)
|
|
(39,513)
|
|
-
|
|
(39,513)
|
|
Interest
expense of operations held for non-sale disposition
|
(10,397)
|
|
-
|
|
(10,397)
|
|
(5,787)
|
|
-
|
|
(5,787)
|
|
Gain on
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
54,579
|
|
-
|
|
54,579
|
|
Income
(loss) from discontinued operations
|
6,454
|
|
-
|
|
6,454
|
|
(122,870)
|
|
-
|
|
(122,870)
|
|
Net Income
(Loss)
|
$
(20,783)
|
|
$
907
|
|
$
(19,876)
|
|
$
(123,695)
|
|
$
844
|
|
$
(122,851)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Represents our ownership results for the 30 hotels held for investment
as of the end of the period, excluding 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.
|
|
(2)
Represents operating results for the Renaissance Westchester while it
was in receivership prior to being reacquired by the Company on June
14, 2010.
|
|
(3)
Represents our ownership results for the 30 hotels held for investment
as of the end of the period, plus results for the Renaissance
Westchester while it was held in receivership,
excluding
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.
|
|
(4)
Represents our ownership results for the 29 hotels held for investment
as of the end of the period, excluding 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, Renaissance Westchester
and Marriott Ontario
Airport,
which have been reclassified as discontinued operations on our balance
sheets and statements of operations.
|
|
(5)
Represents our ownership results for the Renaissance Westchester for
the entire reporting period.
|
|
(6)
Represents our ownership results for the 29 hotels held for investment
as of the end of the period plus the Renaissance Westchester, excluding
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
Pro Forma EBITDA Margin is calculated as Adjusted Pro Forma Hotel
EBITDA divided by total hotel revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Operating
Statistics by Region
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Three Months
Ended June 30, 2010
|
|
Three Months
Ended June 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
|
|
76.4%
|
|
$
121.92
|
|
$
93.15
|
|
72.8%
|
|
$
125.04
|
|
$
91.03
|
|
2.3%
|
|
Other West
(2)
|
|
5
|
|
1,575
|
|
64.6%
|
|
$
108.29
|
|
$
69.96
|
|
62.5%
|
|
$
110.93
|
|
$
69.33
|
|
0.9%
|
|
Midwest (3)
|
|
7
|
|
2,177
|
|
67.6%
|
|
$
135.20
|
|
$
91.40
|
|
64.3%
|
|
$
133.91
|
|
$
86.10
|
|
6.2%
|
|
East (4)
|
|
9
|
|
4,578
|
|
78.8%
|
|
$
190.95
|
|
$
150.47
|
|
75.1%
|
|
$
182.25
|
|
$
136.87
|
|
9.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
30
|
|
11,313
|
|
73.9%
|
|
$
151.43
|
|
$
111.91
|
|
70.5%
|
|
$
148.69
|
|
$
104.83
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2010
|
|
Six Months
Ended June 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
|
|
75.2%
|
|
$
122.44
|
|
$
92.07
|
|
71.1%
|
|
$
130.66
|
|
$
92.90
|
|
-0.9%
|
|
Other West
(2)
|
|
5
|
|
1,575
|
|
66.2%
|
|
$
115.00
|
|
$
76.13
|
|
68.8%
|
|
$
121.11
|
|
$
83.32
|
|
-8.6%
|
|
Midwest (3)
|
|
7
|
|
2,177
|
|
63.6%
|
|
$
126.58
|
|
$
80.50
|
|
60.5%
|
|
$
129.36
|
|
$
78.26
|
|
2.9%
|
|
East (4)
|
|
9
|
|
4,578
|
|
71.9%
|
|
$
183.44
|
|
$
131.89
|
|
69.1%
|
|
$
186.64
|
|
$
128.97
|
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
30
|
|
11,313
|
|
70.3%
|
|
$
146.65
|
|
$
103.09
|
|
67.9%
|
|
$
151.39
|
|
$
102.79
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, and
the W San Diego
and Marriott
Ontario Airport, reclassified as discontinued operations 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. 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.
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Operating
Statistics by Brand
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Three Months
Ended June 30, 2010
|
|
Three Months
Ended June 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
|
|
73.9%
|
|
$
155.63
|
|
$
115.01
|
|
71.1%
|
|
$
153.44
|
|
$
109.10
|
|
5.4%
|
|
Hilton (2)
|
|
6
|
|
2,133
|
|
77.4%
|
|
$
178.41
|
|
$
138.09
|
|
70.7%
|
|
$
170.85
|
|
$
120.79
|
|
14.3%
|
|
Hyatt
|
|
1
|
|
403
|
|
87.2%
|
|
$
118.16
|
|
$
103.04
|
|
75.9%
|
|
$
121.27
|
|
$
92.04
|
|
12.0%
|
|
Other Brand
Affiliations (3)
|
|
2
|
|
647
|
|
77.9%
|
|
$
113.43
|
|
$
88.36
|
|
74.7%
|
|
$
121.76
|
|
$
90.95
|
|
-2.8%
|
|
Independent
|
|
3
|
|
1,196
|
|
61.2%
|
|
$
105.16
|
|
$
64.36
|
|
62.8%
|
|
$
103.42
|
|
$
64.95
|
|
-0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
30
|
|
11,313
|
|
73.9%
|
|
$
151.43
|
|
$
111.91
|
|
70.5%
|
|
$
148.69
|
|
$
104.83
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
Six Months
Ended June 30, 2010
|
|
Six Months
Ended June 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
|
|
70.0%
|
|
$
153.32
|
|
$
107.32
|
|
68.2%
|
|
$
159.54
|
|
$
108.81
|
|
-1.4%
|
|
Hilton (2)
|
|
6
|
|
2,133
|
|
73.4%
|
|
$
164.46
|
|
$
120.71
|
|
69.2%
|
|
$
163.63
|
|
$
113.23
|
|
6.6%
|
|
Hyatt
|
|
1
|
|
403
|
|
84.9%
|
|
$
111.36
|
|
$
94.54
|
|
70.3%
|
|
$
123.21
|
|
$
86.62
|
|
9.1%
|
|
Other Brand
Affiliations (3)
|
|
2
|
|
647
|
|
75.9%
|
|
$
116.79
|
|
$
88.64
|
|
71.4%
|
|
$
128.93
|
|
$
92.06
|
|
-3.7%
|
|
Independent
|
|
3
|
|
1,196
|
|
58.9%
|
|
$
101.76
|
|
$
59.94
|
|
60.9%
|
|
$
102.00
|
|
$
62.12
|
|
-3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
30
|
|
11,313
|
|
70.3%
|
|
$
146.65
|
|
$
103.09
|
|
67.9%
|
|
$
151.39
|
|
$
102.79
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, and
the Marriott Ontario Airport,
reclassified
as discontinued operations 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,
and the W San Diego, reclassified as discontinued operations on our
balance sheets and
statements
of operations.
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
Debt Summary
|
|
(Unaudited -
dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate /
|
|
Maturity
|
|
June 30, 2010
|
|
Debt
|
|
|
Collateral
|
|
Spread
|
|
Date
|
|
Balance (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Rate
Debt
|
|
|
|
|
|
|
|
|
|
|
Secured
Mortgage Debt
|
|
|
Hilton Times
Square
|
|
5.92%
|
|
12/1/2010
|
|
$
81,000
|
|
Secured
Mortgage Debt
|
|
|
Renaissance
Long Beach
|
|
4.98%
|
|
7/1/2012
|
|
33,630
|
|
Secured
Mortgage Debt
|
|
|
Rochester
laundry facility
|
|
9.88%
|
|
6/1/2013
|
|
2,913
|
|
Secured
Mortgage Debt
|
|
|
Doubletree
Minneapolis
|
|
5.34%
|
|
5/1/2015
|
|
17,825
|
|
Secured
Mortgage Debt
|
|
|
Hilton Del
Mar
|
|
5.34%
|
|
5/1/2015
|
|
25,850
|
|
Secured
Mortgage Debt
|
|
|
Marriott
Houston
|
|
5.34%
|
|
5/1/2015
|
|
23,729
|
|
Secured
Mortgage Debt
|
|
|
Marriott
Park City
|
|
5.34%
|
|
5/1/2015
|
|
15,469
|
|
Secured
Mortgage Debt
|
|
|
Marriott
Philadelphia
|
|
5.34%
|
|
5/1/2015
|
|
28,028
|
|
Secured
Mortgage Debt
|
|
|
Marriott Troy
|
|
5.34%
|
|
5/1/2015
|
|
36,288
|
|
Secured
Mortgage Debt
|
|
|
Marriott
Tysons Corner
|
|
5.34%
|
|
5/1/2015
|
|
46,304
|
|
Secured
Mortgage Debt
|
|
|
The Kahler
Grand
|
|
5.34%
|
|
5/1/2015
|
|
28,544
|
|
Secured
Mortgage Debt
|
|
|
Valley River
Inn
|
|
5.34%
|
|
5/1/2015
|
|
11,911
|
|
Secured
Mortgage Debt
|
|
|
Renaissance
Harborplace
|
|
5.13%
|
|
1/1/2016
|
|
105,241
|
|
Secured
Mortgage Debt
|
|
|
Marriott Del
Mar
|
|
5.69%
|
|
1/11/2016
|
|
48,000
|
|
Secured
Mortgage Debt
|
|
|
Hilton
Houston North
|
|
5.66%
|
|
3/11/2016
|
|
33,479
|
|
Secured
Mortgage Debt
|
|
|
Renaissance
Orlando at SeaWorld®
|
|
5.52%
|
|
7/1/2016
|
|
84,832
|
|
Secured
Mortgage Debt
|
|
|
Embassy
Suites Chicago
|
|
5.58%
|
|
3/1/2017
|
|
75,000
|
|
Secured
Mortgage Debt
|
|
|
Marriott
Boston Long Wharf
|
|
5.58%
|
|
4/11/2017
|
|
176,000
|
|
Secured
Mortgage Debt
|
|
|
Embassy
Suites La Jolla
|
|
6.60%
|
|
6/1/2019
|
|
70,000
|
|
Secured
Mortgage Debt
|
|
|
Renaissance
Washington D.C.
|
|
5.95%
|
|
5/1/2021
|
|
133,183
|
|
Exchangeable
Senior Notes
|
|
|
Guaranty
|
|
4.60%
|
|
7/15/2027
|
|
62,500
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL DEBT
|
|
|
|
|
|
|
|
|
$
1,139,726
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
|
|
|
|
|
|
|
|
Series A
cumulative redeemable preferred
|
|
|
|
|
8.00%
|
|
perpetual
|
|
$
176,250
|
|
Series C
cumulative convertible redeemable preferred
|
|
|
|
|
6.45%
|
|
perpetual
|
|
$
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
Statistics
|
|
|
|
|
|
|
|
|
|
|
% Fixed Rate
Debt
|
|
|
|
|
|
|
|
|
100.0%
|
|
% Floating
Rate Debt
|
|
|
|
|
|
|
|
|
0.0%
|
|
Average
Interest Rate
|
|
|
|
|
|
|
|
|
5.56%
|
|
Weighted
Average Maturity of Debt (2)
|
|
|
|
|
|
|
|
|
6.7 years
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes
debt in the Company's secured debt restructuring program.
|
|
(2) 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.
|
|
|
|
|
|
|
|
|
|
|
|
|