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ALISO VIEJO, Calif., Aug. 8, 2011-- Sunstone Hotel Investors, Inc.
(the "Company") (NYSE: SHO) today announced results for the second
quarter ended June 30, 2011.
Second Quarter 2011 Operational Results (as compared to
Second Quarter 2010)(1):
- Comparable Hotel RevPAR increased 7.2% to $131.89.
- Comparable Hotel EBITDA increased 16.7% to $68.1 million.
- Comparable Hotel EBITDA Margins increased by 280 basis
points to 31.3%.
- Income available to common stockholders was $31.1 million (vs. a loss of $4.9 million in the second quarter 2010).
- Income available to common stockholders per diluted share
was $0.26 (vs. a loss of $0.05 in the second quarter 2010).
- Adjusted EBITDA increased by 46.0% to $63.0 million.
- Adjusted FFO available to common stockholders increased by
94.6% to $34.6 million.
- Adjusted FFO available to common stockholders per diluted
share increased by 66.7% to $0.30.
Ken Cruse, President and Chief
Executive Officer, stated, “With a new, talented team and a strong
focus on operating performance, financial flexibility and transparency,
Sunstone is well positioned to drive meaningful returns for our
stockholders. As evidenced by our solid growth in revenues, EBITDA and
margins during the second quarter, the new Sunstone team is already
having a positive effect on the business.”
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(1)
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Comparable
Hotel RevPAR, Comparable Hotel EBITDA and Comparable Hotel EBITDA
Margin information presented reflect the Company's Comparable 32 Hotel
Portfolio, which includes all hotels owned by the Company as of June
30, 2011, excluding the Valley River Inn which has been classified as
held for sale as of June 30, 2011 and included in discontinued
operations for all periods presented due to its probable sale within
the next year. The Comparable 32 Hotel Portfolio also includes results
for the Renaissance Westchester during the period it was held in
receivership prior to the Company's reacquisition of the hotel in June
2010, as well as prior ownership results for the Doubletree Guest
Suites Times Square acquired by the Company in January 2011, the JW
Marriott New Orleans acquired by the Company in February 2011, and the
Hilton San Diego Bayfront acquired by the Company in April 2011, for
all periods presented.
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SELECTED
FINANCIAL DATA
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($ in
millions, except RevPAR and per share amounts)
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(unaudited)
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Three
Months Ended June 30,
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Six
Months Ended June 30,
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2011
|
2010
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%
Change
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2011
|
2010
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%
Change
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Total
Revenue
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$ 218.3
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$ 157.4
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38.7%
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$ 377.3
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$ 295.2
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27.8%
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Comparable
Hotel RevPAR
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$
131.89
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$
122.98
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7.2%
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$
121.53
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$
113.28
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7.3%
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Comparable
Hotel EBITDA Margin
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31.3%
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28.5%
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280 bps
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27.4%
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26.1%
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130 bps
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Income
available (loss attributable) to common stockholders
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$ 31.1
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$ (4.9)
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$ 76.8
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$
(31.2)
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Income
available (loss attributable) to common stockholders per
diluted share
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$ 0.26
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$
(0.05)
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$ 0.66
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$
(0.32)
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EBITDA
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$ 92.2
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$ 47.3
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$ 190.3
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$ 77.3
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Adjusted
EBITDA
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$ 63.0
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$ 43.2
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$ 95.2
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$ 74.2
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FFO
available to common stockholders
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$ 49.7
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$ 19.9
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$ 124.5
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$ 18.9
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Adjusted
FFO available to common stockholders
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$ 34.6
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$ 17.8
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$ 43.0
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$ 21.7
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FFO
available to common stockholders per diluted share (1)
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$ 0.42
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$ 0.20
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$ 1.06
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$ 0.19
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Adjusted
FFO available to common stockholders per diluted
share
(1)
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$ 0.30
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$ 0.18
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$ 0.37
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$ 0.22
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(1)
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Reflects
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 $0.42 and $0.21, respectively, for the three months
ended June 30, 2011 and 2010, and $1.05 and $0.22, respectively, for
the six months ended June 30, 2011 and 2010. On an "as-converted"
basis, Adjusted FFO available to common stockholders per diluted share
is $0.30 and $0.19, respectively, for the three months ended June 30,
2011 and 2010, and $0.38 and $0.25, respectively, for the six months
ended June 30, 2011 and 2010.
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Disclosure regarding the non-GAAP financial measures in this
release is included on page 6. Reconciliations of non-GAAP financial
measures to the most comparable GAAP measure for each of the periods
presented are included on pages 9 through 12 of this release.
Management Update
Effective immediately, Sunstone’s Board of Directors named Ken Cruse President and Chief Executive
Officer of the company and a member of its Board of Directors. Mr.
Cruse, 42, joined Sunstone in April of 2005. Mr. Cruse became President
in December 2010 after holding
leadership positions in both asset management and finance, most
recently serving as Sunstone’s Chief Financial Officer from January 2007 through December of 2010.
Mr. Cruse stated, “I look forward to leading the Sunstone
team. We, as a team, are committed to achieving solid returns for our
stockholders, while improving financial flexibility and improving
transparency. I thank our Board of Directors and especially Bob Alter for the support and involvement
over the last eight months during my transition to CEO.”
The appointment marks the conclusion of a period of
co-leadership by Mr. Cruse and Bob Alter,
Sunstone’s Executive Chairman, which was instituted in December 2010 as a means to provide stability
and support during Mr. Cruse’s transition into the CEO role. During
this period, the Company executed on a number of growth initiatives and
assembled Sunstone’s current leadership team.
The Board of Directors stated, “Over the past six years, Ken
has led a number of Sunstone’s most significant initiatives, ranging
from asset management to major acquisitions and capital markets
transactions. As CEO, Ken's depth of experience and unique mix of
strategic vision, integrity, passion and discipline will serve Sunstone
very well."
Balance Sheet/Liquidity Update
As of June 30, 2011, the
Company had approximately $205.9 million
of cash and cash equivalents, including restricted cash of $61.1 million. The Company intends to use a
material portion of its unrestricted cash to reduce the principal
balance on the Doubletree Guest Suites Times Square mortgage, which
matures in January 2012.
John V. Arabia, Chief Financial
Officer, stated, "We have received strong lender interest in
refinancing the Doubletree Guest Suites Times Square given the superior
quality and location of the hotel. Following this refinancing, Sunstone
will have less than $100 million of debt
maturing through year-end 2014. We remain committed to gradually and
methodically reducing our financial leverage while maximizing
shareholder value and growing the company."
As of June 30, 2011, total
assets were $3.2 billion, including $2.8 billion of net investments in hotel
properties, total debt was $1.7 billion
and stockholders' equity was $1.3 billion.
Supplemental Disclosures
Contemporaneous with this release, the Company has furnished a
Form 8-K with unaudited financial information. This additional
information is being provided as a supplement to information prepared
in accordance with generally accepted accounting principles. The
Company undertakes no obligation to update any of the information
provided to conform to actual results or changes in the Company's
portfolio, capital structure or future expectations.
Disposition Update
Due to the probable sale of the 257-room Valley River Inn
located in Eugene, Oregon within the
next year, the Company classified the hotel as held for sale as of June 30, 2011, and reclassified the hotel's
assets and liabilities as of June 30, 2011
and December 31, 2010 to discontinued
operations on its balance sheets and the hotel's results of operations
for the three and six months ended June 30, 2011
and 2010 to discontinued operations on its statements of operations.
Capital Improvements
During the second quarter of 2011, the Company invested $32.1 million in capital improvements to its
portfolio. Year-to-date through the end of the second quarter of 2011,
the Company completed several value enhancing renovations, including
major rooms and/or public area renovations at the Courtyard Los Angeles
Airport, Doubletree Guest Suites Minneapolis, Kahler Inn and Suites, Marriott Houston, Marriott
Rochester, Embassy Suites Chicago, Marriott
Quincy, Marriott Tysons Corner, Sheraton Cerritos, Marriott Troy, Marriott Philadelphia and
Hyatt Regency Newport Beach. The Company expects to complete the
renovation of the public space and meeting space expansion at the
Marriott Boston Long Wharf during the third quarter of 2011.
During the fourth quarter of 2011, the Company will commence
the up-branding of the 460-room Doubletree Guest Suites Times Square to
the Hilton Suites Times Square. The public space renovation will begin
during the fourth quarter followed by a complete room renovation during
the first quarter of 2012. The Company will provide updated timing and
project scope, including anticipated displacement, during the third
quarter call.
2011 Outlook
The Company is providing guidance at this time but does not
undertake to make updates for any developments in its business or
changes in the operating environment. 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 has provided guidance for the full year 2011.
The Company's guidance does not take into account any additional hotel
acquisitions, dispositions or financings during 2011. Prior 2011
guidance included full year results for the Valley River Inn, which is
classified as held for sale and is expected to be sold within the next
year. EBITDA for the Valley River Inn, which was included in prior
guidance, was expected to have been $0.5 million
and $0.3 million for the third and
fourth quarter, respectively.
For the full year 2011, the Company expects:
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Metric
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Prior
Guidance (1)
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Adjusted
Prior
Guidance
(2)
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Current
Guidance
|
Change
to
Adjusted
Prior
Midpoint
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Comparable
Portfolio RevPAR (3)
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+6% -
8%
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+6% -
8%
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+6% -
8%
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-
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Loss
attributable to common stockholders ($ millions)
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($42)
- ($30)
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($42)
- ($31)
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($42)
- ($31)
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-
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Adjusted
EBITDA ($ millions)
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$204 -
$215
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$203 -
$214
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$203 -
$214
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-
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Adjusted
FFO ($ millions)
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$92 -
$103
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$91 -
$102
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$91 -
$102
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-
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Adjusted
FFO per share
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$0.78
- $0.88
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$0.77
- $0.87
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$0.77
- $0.87
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-
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(1)
Includes approximately $0.8 million of Adjusted EBITDA and $0.4 million
of Adjusted FFO related to the second half earnings forecast of the
Valley River Inn, which was classified as held for sale as of June 30,
2011 due to its probable sale within the next year.
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(2)
Prior guidance has been adjusted to reflect the probable sale of the
Valley River Inn.
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(3)
Includes 33 comparable hotels for the prior guidance and 32 comparable
hotels for the current guidance.
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Mr. Arabia stated, "With the introduction of an enhanced
quarterly financial supplemental, including robust disclosure relating
to property-level operating fundamentals and earnings, we have
meaningfully increased the quality of our disclosure and the
transparency of our operational performance and capital structure.
Combined with last quarter's reinstatement of earnings guidance, this
additional step demonstrates management's commitment to providing
investors with the appropriate tools to analyze Sunstone's portfolio
and corporate performance."
Dividend Update
On August 5, 2011, the
Company's Board of Directors declared a cash dividend of $0.50 per share payable to its Series A and
Series D 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, 2011
to stockholders of record on September 30,
2011. 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. Dividends may be made in the form of cash or a
combination of cash and stock consistent with Internal Revenue Service
guidelines.
Earnings Call
The Company will host a conference call to discuss second
quarter 2011 results on August 8, 2011,
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 1-877-941-0844 (for domestic callers) or
1-480-629-9835 (for international callers). 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 (excluding hotels held for
sale) 32 hotels comprised of 13,206 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 August 8, 2011, 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.
The following table includes 2011 third quarter, fourth
quarter and full year forecast data for the Valley River Inn, which was
classified as held for sale as of June 30, 2011
due to its probable sale within the next year.
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Valley
River Inn
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Q3 2011
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Q4 2011
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FY 2011
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(unaudited,
$ in thousands)
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Total
Revenue
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$ 2,600
|
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$ 2,400
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$
10,400
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Hotel
Net Income (Loss)
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$ 100
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$ (100)
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$ 100
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Plus:
Depreciation
|
200
|
|
200
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|
900
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Plus:
Interest Expense
|
200
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|
200
|
|
600
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Hotel
Adjusted EBITDA
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$ 500
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$ 300
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$ 1,600
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|
|
|
|
|
|
|
|
|
|
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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) non-controlling interests; (2)
preferred stock dividends; (3) interest expense; (4) provision for
income taxes, including income taxes applicable to sale of assets; and
(5) 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. A
reconciliation of income available (loss attributable) to common
stockholders to EBITDA and Adjusted EBITDA is set forth on page 9.
Reconciliations and the components of comparable portfolio hotel EBITDA
and comparable portfolio hotel EBITDA margin are set forth on pages 11
and 12. 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
non-controlling interests, 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. A reconciliation of income available
(loss attributable) to common stockholders to FFO and Adjusted FFO is
set forth on page 9.
The revenue and expense items associated with our commercial
laundry facility, BuyEfficient 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 32 hotel
comparable portfolio. See pages 11 and 12 for reconciliations of
comparable portfolio hotel EBITDA to the most comparable GAAP measure.
Our 32 hotel comparable portfolio includes all hotels owned by the
Company as of June 30, 2011, excluding
the Valley River Inn, which has been classified as held for sale as of June 30, 2011 and included in discontinued
operations for all periods presented due to its probable sale within
the next year. The 32 hotel comparable portfolio also includes results
for the Renaissance Westchester during the period it was held in
receivership prior to the Company's reacquisition of the hotel in June 2010, as well as prior ownership results
for the Doubletree Guest Suites Times Square acquired by the Company in
January 2011, the JW Marriott New
Orleans acquired by the Company in February 2011,
and the Hilton San Diego Bayfront acquired by the Company in April 2011.
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.
For Additional Information:
Bryan Giglia
Senior Vice President – Corporate Finance
Sunstone Hotel Investors, Inc.
(949) 382-3036
|
Sunstone
Hotel Investors, Inc.
|
|
|
Consolidated
Balance Sheets
|
|
|
(In
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
$
144,728
|
|
$
276,034
|
|
|
Restricted
cash
|
61,143
|
|
54,954
|
|
|
Accounts
receivable, net
|
36,760
|
|
17,285
|
|
|
Due
from affiliates
|
3
|
|
44
|
|
|
Inventories
|
2,276
|
|
2,101
|
|
|
Prepaid
expenses
|
6,036
|
|
7,808
|
|
|
Investment
in hotel properties of discontinued operations, net
|
14,986
|
|
131,404
|
|
|
Investment
in other real estate of discontinued operations, net
|
88
|
|
896
|
|
|
Other
current assets of discontinued operations, net
|
2,783
|
|
5,128
|
|
|
Total
current assets
|
268,803
|
|
495,654
|
|
|
|
|
|
|
|
|
Investment
in hotel properties, net
|
2,813,937
|
|
1,902,819
|
|
|
Other
real estate, net
|
11,640
|
|
11,116
|
|
|
Investments
in unconsolidated joint ventures
|
-
|
|
246
|
|
|
Deferred
financing fees, net
|
12,260
|
|
8,855
|
|
|
Interest
rate cap derivative agreements
|
22
|
|
-
|
|
|
Goodwill
|
13,088
|
|
4,673
|
|
|
Other
assets, net
|
111,840
|
|
12,743
|
|
|
|
|
|
|
|
|
Total
assets
|
$
3,231,590
|
|
$
2,436,106
|
|
|
|
|
|
|
|
|
Liabilities
and Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
$
28,044
|
|
$
20,889
|
|
|
Accrued
payroll and employee benefits
|
17,013
|
|
12,674
|
|
|
Due to
Third-Party Managers
|
5,942
|
|
7,573
|
|
|
Dividends
payable
|
7,310
|
|
5,137
|
|
|
Other
current liabilities
|
27,662
|
|
16,907
|
|
|
Current
portion of notes payable
|
292,189
|
|
16,196
|
|
|
Note
payable of discontinued operations
|
11,629
|
|
11,773
|
|
|
Other
current liabilities of discontinued operations, net
|
971
|
|
21,600
|
|
|
Total
current liabilities
|
390,760
|
|
112,749
|
|
|
|
|
|
|
|
|
Notes
payable, less current portion
|
1,379,356
|
|
1,115,334
|
|
|
Interest
rate swap derivative agreement
|
501
|
|
-
|
|
|
Other
liabilities
|
10,263
|
|
8,724
|
|
|
Total
liabilities
|
1,780,880
|
|
1,236,807
|
|
|
|
|
|
|
|
|
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, 2011 and December 31, 2010, liquidation
|
|
|
|
|
|
preference
of $24.375 per share
|
100,000
|
|
100,000
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
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, 2011 and
|
|
|
|
|
|
December 31, 2010, stated at liquidation preference of $25.00 per share
|
176,250
|
|
176,250
|
|
|
8.0%
Series D Cumulative Redeemable Preferred Stock,
|
|
|
|
|
|
4,600,000 shares issued and outstanding at June 30, 2011 and zero issued
|
|
|
|
|
|
and
outstanding at December 31, 2010, stated at liquidation preference of
|
|
|
|
|
|
$25.00 per share
|
115,000
|
|
-
|
|
|
Common
stock, $0.01 par value, 500,000,000 shares authorized,
|
|
|
|
|
|
117,242,818 shares issued and outstanding at June 30, 2011 and
|
|
|
|
|
|
116,950,504 shares issued and outstanding at December 31, 2010
|
1,172
|
|
1,170
|
|
|
Additional
paid in capital
|
1,311,037
|
|
1,313,498
|
|
|
Retained
earnings
|
119,613
|
|
29,593
|
|
|
Cumulative
dividends
|
(430,522)
|
|
(418,075)
|
|
|
Accumulated
other comprehensive loss
|
(3,137)
|
|
(3,137)
|
|
|
Total
stockholders' equity
|
1,289,413
|
|
1,099,299
|
|
|
Non-controlling
interest in consolidated joint ventures
|
61,297
|
|
-
|
|
|
Total
equity
|
1,350,710
|
|
1,099,299
|
|
|
|
|
|
|
|
|
Total
liabilities and equity
|
$
3,231,590
|
|
$
2,436,106
|
|
|
|
|
|
|
|
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,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Room
|
$
150,280
|
|
$
106,805
|
|
$
256,760
|
|
$
196,106
|
|
|
Food
and beverage
|
51,043
|
|
39,374
|
|
90,328
|
|
76,535
|
|
|
Other
operating
|
16,931
|
|
11,214
|
|
30,224
|
|
22,538
|
|
|
Total
revenues
|
218,254
|
|
157,393
|
|
377,312
|
|
295,179
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Room
|
35,837
|
|
26,354
|
|
64,888
|
|
50,345
|
|
|
Food
and beverage
|
36,106
|
|
28,244
|
|
65,832
|
|
55,112
|
|
|
Other
operating
|
6,229
|
|
5,549
|
|
12,188
|
|
11,379
|
|
|
Advertising and promotion
|
10,365
|
|
7,773
|
|
18,987
|
|
15,006
|
|
|
Repairs and maintenance
|
8,249
|
|
6,473
|
|
15,521
|
|
12,795
|
|
|
Utilities
|
7,232
|
|
5,432
|
|
14,077
|
|
11,157
|
|
|
Franchise costs
|
7,484
|
|
5,636
|
|
12,734
|
|
10,151
|
|
|
Property tax, ground lease and insurance
|
14,573
|
|
10,516
|
|
28,565
|
|
20,683
|
|
|
Property general and administrative
|
25,225
|
|
18,434
|
|
45,245
|
|
35,154
|
|
|
Corporate overhead
|
6,316
|
|
5,132
|
|
13,973
|
|
9,708
|
|
|
Depreciation and amortization
|
32,659
|
|
22,974
|
|
58,881
|
|
46,221
|
|
|
Property and goodwill impairment losses
|
-
|
|
1,943
|
|
-
|
|
1,943
|
|
|
Total
operating expenses
|
190,275
|
|
144,460
|
|
350,891
|
|
279,654
|
|
|
Operating income
|
27,979
|
|
12,933
|
|
26,421
|
|
15,525
|
|
|
Equity in earnings of unconsolidated joint ventures
|
-
|
|
163
|
|
21
|
|
275
|
|
|
Interest and other income
|
1,320
|
|
99
|
|
1,429
|
|
270
|
|
|
Interest expense
|
(21,153)
|
|
(16,851)
|
|
(38,937)
|
|
(36,729)
|
|
|
Gain
on remeasurement of equity interests
|
-
|
|
-
|
|
69,230
|
|
-
|
|
|
Income (loss) from continuing operations
|
8,146
|
|
(3,656)
|
|
58,164
|
|
(20,659)
|
|
|
Income (loss) from discontinued operations
|
30,783
|
|
3,964
|
|
32,100
|
|
(124)
|
|
|
Net
income (loss)
|
38,929
|
|
308
|
|
90,264
|
|
(20,783)
|
|
|
Income from consolidated joint venture attributable to non-controlling
interest
|
(244)
|
|
-
|
|
(244)
|
|
-
|
|
|
Distributions to non-controlling interest
|
(7)
|
|
-
|
|
(14)
|
|
-
|
|
|
Preferred stock dividends and accretion
|
(7,310)
|
|
(5,187)
|
|
(12,447)
|
|
(10,374)
|
|
|
Undistributed income allocated to unvested restricted stock
compensation
|
(291)
|
|
-
|
|
(717)
|
|
-
|
|
|
Income available (loss attributable) to common stockholders
|
$
31,077
|
|
$
(4,879)
|
|
$
76,842
|
|
$
(31,157)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
per share amounts:
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations available (attributable) to
common stockholders
|
$ -
|
|
$
(0.09)
|
|
$ 0.38
|
|
$
(0.32)
|
|
|
Income from discontinued operations
|
0.27
|
|
0.04
|
|
0.28
|
|
-
|
|
|
Basic
income available (loss attributable) to common stockholders per common
share
|
$ 0.27
|
|
$
(0.05)
|
|
$ 0.66
|
|
$
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
per share amounts:
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations available (attributable) to
common stockholders
|
$ -
|
|
$
(0.09)
|
|
$ 0.38
|
|
$
(0.32)
|
|
|
Income from discontinued operations
|
0.26
|
|
0.04
|
|
0.28
|
|
-
|
|
|
Diluted
income available (loss attributable) to common stockholders per common
share
|
$ 0.26
|
|
$
(0.05)
|
|
$ 0.66
|
|
$
(0.32)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
117,227
|
|
97,188
|
|
117,151
|
|
97,118
|
|
|
Diluted
|
117,314
|
|
97,188
|
|
117,267
|
|
97,118
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six
Months Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
Income
available (loss attributable) to common stockholders
|
$
31,077
|
$
(4,879)
|
|
$
76,842
|
$
(31,157)
|
|
|
Income
from consolidated joint venture attributable to non-controlling interest
|
244
|
-
|
|
244
|
-
|
|
|
Distributions
to non-controlling interest
|
7
|
-
|
|
14
|
-
|
|
|
Preferred
stock dividends
|
7,310
|
5,187
|
|
12,447
|
10,374
|
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
291
|
-
|
|
717
|
-
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
32,659
|
22,974
|
|
58,881
|
46,221
|
|
|
Amortization of lease intangibles
|
999
|
150
|
|
1,936
|
150
|
|
|
Interest expense
|
19,120
|
16,024
|
|
35,986
|
32,802
|
|
|
Interest expense - default rate
|
-
|
120
|
|
-
|
884
|
|
|
Amortization of deferred financing fees
|
812
|
303
|
|
1,425
|
793
|
|
|
Write-off of deferred financing fees
|
-
|
123
|
|
-
|
1,585
|
|
|
Loan
penalties and fees
|
-
|
36
|
|
-
|
174
|
|
|
Non-cash interest related to discount on Senior Notes
|
261
|
245
|
|
522
|
491
|
|
|
Non-cash interest related to loss on derivatives, net
|
960
|
-
|
|
1,004
|
-
|
|
|
Non-controlling
interests:
|
|
|
|
|
|
|
|
Income from consolidated joint venture attributable to non-controlling
interest
|
(244)
|
-
|
|
(244)
|
-
|
|
|
Depreciation and amortization
|
(1,184)
|
-
|
|
(1,184)
|
-
|
|
|
Interest expense
|
(456)
|
-
|
|
(456)
|
-
|
|
|
Amortization of deferred financing fees
|
(47)
|
-
|
|
(47)
|
-
|
|
|
Non-cash interest related to loss on derivative
|
(28)
|
-
|
|
(28)
|
-
|
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
-
|
13
|
|
3
|
27
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
258
|
1,834
|
|
1,951
|
3,962
|
|
|
Interest expense
|
157
|
2,634
|
|
314
|
5,728
|
|
|
Interest expense - default rate
|
-
|
2,078
|
|
-
|
4,354
|
|
|
Amortization of deferred financing fees
|
3
|
135
|
|
6
|
272
|
|
|
Loan
penalties and fees
|
-
|
303
|
|
-
|
645
|
|
|
EBITDA
|
92,199
|
47,280
|
|
190,333
|
77,305
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
929
|
686
|
|
1,473
|
1,648
|
|
|
Gain
on sale of assets
|
(56)
|
-
|
|
(56)
|
-
|
|
|
Gain
on remeasurement of equity interests
|
-
|
-
|
|
(69,230)
|
-
|
|
|
Closing costs - completed acquisitions
|
633
|
-
|
|
3,372
|
-
|
|
|
Impairment loss
|
-
|
1,943
|
|
-
|
1,943
|
|
|
Unconsolidated
joint ventures:
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation
|
-
|
7
|
|
2
|
17
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Gain
on sale of assets
|
(14,018)
|
-
|
|
(14,018)
|
-
|
|
|
Impairment loss
|
1,495
|
-
|
|
1,495
|
-
|
|
|
Gain
on extinguishment of debt
|
(18,145)
|
(6,747)
|
|
(18,145)
|
(6,747)
|
|
|
(29,162)
|
(4,111)
|
|
(95,107)
|
(3,139)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
63,037
|
$
43,169
|
|
$
95,226
|
$
74,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Income Available (Loss Attributable) to Common Stockholders to FFO
and Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
available (loss attributable) to common stockholders
|
$
31,077
|
$
(4,879)
|
|
$
76,842
|
$
(31,157)
|
|
|
Income
from consolidated joint venture attributable to non-controlling interest
|
244
|
-
|
|
244
|
-
|
|
|
Distributions
to non-controlling interest
|
7
|
-
|
|
14
|
-
|
|
|
Undistributed
income allocated to unvested restricted stock compensation
|
291
|
-
|
|
717
|
-
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
32,359
|
22,843
|
|
58,304
|
45,952
|
|
|
Amortization of lease intangibles
|
999
|
150
|
|
1,936
|
150
|
|
|
Gain
on sale of assets
|
(56)
|
-
|
|
(56)
|
-
|
|
|
Non-controlling
interests:
|
|
|
|
|
|
|
|
Income from consolidated joint venture attributable to non-controlling
interest
|
(244)
|
-
|
|
(244)
|
-
|
|
|
Real
estate depreciation and amortization
|
(1,184)
|
-
|
|
(1,184)
|
-
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Real
estate depreciation and amortization
|
258
|
1,834
|
|
1,951
|
3,962
|
|
|
Gain
on sale of assets
|
(14,018)
|
-
|
|
(14,018)
|
-
|
|
|
FFO
available to common stockholders
|
49,733
|
19,948
|
|
124,506
|
18,907
|
|
|
|
|
|
|
|
|
|
Operations
held for investment:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
-
|
120
|
|
-
|
884
|
|
|
Write-off of deferred financing fees
|
-
|
123
|
|
-
|
1,585
|
|
|
Loan
penalties and fees
|
-
|
36
|
|
-
|
174
|
|
|
Non-cash interest related to loss on derivatives, net
|
960
|
-
|
|
1,004
|
-
|
|
|
Gain
on remeasurement of equity interests
|
-
|
-
|
|
(69,230)
|
-
|
|
|
Closing costs - completed acquisitions
|
633
|
-
|
|
3,372
|
-
|
|
|
Impairment loss
|
-
|
1,943
|
|
-
|
1,943
|
|
|
Non-controlling
interests:
|
|
|
|
|
|
|
|
Non-cash interest related to loss on derivative
|
(28)
|
-
|
|
(28)
|
-
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Interest expense - default rate
|
-
|
2,078
|
|
-
|
4,354
|
|
|
Loan
penalties and fees
|
-
|
303
|
|
-
|
645
|
|
|
Impairment loss
|
1,495
|
-
|
|
1,495
|
-
|
|
|
Gain
on extinguishment of debt
|
(18,145)
|
(6,747)
|
|
(18,145)
|
(6,747)
|
|
|
(15,085)
|
(2,144)
|
|
(81,532)
|
2,838
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders
|
$
34,648
|
$
17,804
|
|
$
42,974
|
$
21,745
|
|
|
|
|
|
|
|
|
|
FFO
available to common stockholders per diluted share
|
$ 0.42
|
$ 0.20
|
|
$ 1.06
|
$ 0.19
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders per diluted share
|
$ 0.30
|
$ 0.18
|
|
$ 0.37
|
$ 0.22
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
117,227
|
97,188
|
|
117,151
|
97,118
|
|
|
Shares
associated with unvested restricted stock awards
|
87
|
421
|
|
116
|
379
|
|
|
Diluted
weighted average shares outstanding (1)
|
117,314
|
97,609
|
|
117,267
|
97,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $0.42 and $0.21, respectively, for the three months ended June
30, 2011 and 2010, and $1.05 and $0.22, respectively, for the six
months ended June 30, 2011 and 2010. On an "as-converted" basis,
Adjusted FFO available to common stockholders per diluted share is
$0.30 and $0.19, respectively, for the three months ended June 30, 2011
and 2010, and $0.38 and $0.25, respectively, for the six months ended
June 30, 2011 and 2010.
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Non-GAAP Financial
Measures
|
|
|
Guidance
for Full Year 2011(1)
|
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Adjusted EBITDA
|
|
|
(Unaudited
and in thousands except per share amounts)
|
|
|
|
|
|
|
Year
Ended
|
|
|
December
31, 2011
|
|
|
Low
|
High
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(41,700)
|
$
(30,700)
|
|
|
Preferred
stock dividends
|
27,300
|
27,300
|
|
|
Operations
held for investment:
|
|
|
|
|
Depreciation and amortization
|
129,000
|
129,000
|
|
|
Amortization of lease intangibles
|
4,000
|
4,000
|
|
|
Interest expense
|
78,000
|
78,000
|
|
|
Amortization of deferred financing fees
|
2,800
|
2,800
|
|
|
Non-cash interest related to discount on Senior Notes
|
1,000
|
1,000
|
|
|
Amortization of deferred stock compensation
|
2,600
|
2,600
|
|
|
Adjusted
EBITDA
|
$
203,000
|
$
214,000
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Loss Attributable to Common Stockholders to Adjusted FFO
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to common stockholders
|
$
(41,700)
|
$
(30,700)
|
|
|
Operations
held for investment:
|
|
|
|
|
Real
estate depreciation and amortization
|
128,500
|
128,500
|
|
|
Amortization of lease intangibles
|
4,000
|
4,000
|
|
|
Adjusted
FFO available to common stockholders
|
$
90,800
|
$
101,800
|
|
|
|
|
|
|
|
|
|
|
Adjusted
FFO available to common stockholders per diluted share
|
$ 0.77
|
$ 0.87
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
117,600
|
117,600
|
|
|
|
|
|
|
|
|
|
|
(1)
Guidance for the full year 2011 includes the Company's 32 hotel
portfolio held for investment, excluding the Valley River Inn from Q3
and Q4 2011.
|
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
|
Comparable
Portfolio Hotel EBITDA Margins
|
|
|
(Unaudited
and in thousands except hotels and rooms)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended June 30, 2011
|
|
Three
Months Ended June 30, 2010
|
|
|
Actual
(1)
|
|
Acquired
Hotel (2)
|
|
Comparable
(3)
|
|
Actual
(4)
|
|
Reacquired
Hotel (5)
|
|
Acquired
Hotels (6)
|
|
Comparable
(7)
|
|
|
Number
of Hotels
|
32
|
|
|
|
32
|
|
29
|
|
|
|
3
|
|
32
|
|
|
Number
of Rooms
|
13,206
|
|
|
|
13,206
|
|
11,062
|
|
|
|
2,144
|
|
13,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA Margin (8)
|
31.3%
|
|
30.7%
|
|
31.3%
|
|
27.5%
|
|
11.1%
|
|
33.3%
|
|
28.5%
|
|
|
Hotel
EBITDA Margin adjusted for prior year property tax assessment (9)
|
30.9%
|
|
|
|
30.9%
|
|
27.5%
|
|
|
|
|
|
28.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
150,280
|
|
$ 2,510
|
|
$
152,790
|
|
$
106,805
|
|
$ 2,482
|
|
$
33,217
|
|
$
142,504
|
|
|
Food
and beverage revenue
|
51,043
|
|
1,272
|
|
52,315
|
|
39,374
|
|
1,477
|
|
9,122
|
|
49,973
|
|
|
Other
operating revenue
|
12,239
|
|
282
|
|
12,521
|
|
8,101
|
|
113
|
|
4,113
|
|
12,327
|
|
|
Total
Hotel Revenues
|
213,562
|
|
4,064
|
|
217,626
|
|
154,280
|
|
4,072
|
|
46,452
|
|
204,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
expense
|
36,044
|
|
582
|
|
36,626
|
|
26,669
|
|
712
|
|
7,413
|
|
34,794
|
|
|
Food
and beverage expense
|
36,155
|
|
873
|
|
37,028
|
|
28,292
|
|
1,158
|
|
6,479
|
|
35,929
|
|
|
Other
hotel expense
|
50,572
|
|
1,034
|
|
51,606
|
|
38,853
|
|
1,151
|
|
12,491
|
|
52,495
|
|
|
General and administrative expense
|
23,979
|
|
329
|
|
24,308
|
|
18,077
|
|
599
|
|
4,579
|
|
23,255
|
|
|
Total
Hotel Expenses
|
146,750
|
|
2,818
|
|
149,568
|
|
111,891
|
|
3,620
|
|
30,962
|
|
146,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
66,812
|
|
1,246
|
|
68,058
|
|
42,389
|
|
452
|
|
15,490
|
|
58,331
|
|
|
Prior
year property tax assessment
|
(915)
|
|
-
|
|
(915)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Hotel
EBITDA adjusted for prior year property tax assessment
|
65,897
|
|
1,246
|
|
67,143
|
|
42,389
|
|
452
|
|
15,490
|
|
58,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-hotel
operating income
|
1,141
|
|
-
|
|
1,141
|
|
828
|
|
-
|
|
-
|
|
828
|
|
|
Amortization
of lease intangibles
|
(999)
|
|
-
|
|
(999)
|
|
(150)
|
|
-
|
|
(1,007)
|
|
(1,157)
|
|
|
Management
company transition costs
|
-
|
|
-
|
|
-
|
|
(85)
|
|
-
|
|
-
|
|
(85)
|
|
|
Prior
year property tax assessment
|
915
|
|
-
|
|
915
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Corporate
overhead
|
(6,316)
|
|
-
|
|
(6,316)
|
|
(5,132)
|
|
-
|
|
-
|
|
(5,132)
|
|
|
Depreciation
and amortization
|
(32,659)
|
|
(917)
|
|
(33,576)
|
|
(22,974)
|
|
(255)
|
|
(7,261)
|
|
(30,490)
|
|
|
Property
and goodwill impairment losses
|
-
|
|
-
|
|
-
|
|
(1,943)
|
|
|
|
|
|
(1,943)
|
|
|
Operating
Income
|
27,979
|
|
329
|
|
28,308
|
|
12,933
|
|
197
|
|
7,222
|
|
20,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings of unconsolidated joint ventures
|
-
|
|
-
|
|
-
|
|
163
|
|
-
|
|
-
|
|
163
|
|
|
Interest
and other income
|
1,320
|
|
-
|
|
1,320
|
|
99
|
|
-
|
|
-
|
|
99
|
|
|
Interest
expense
|
(21,153)
|
|
(312)
|
|
(21,465)
|
|
(16,851)
|
|
-
|
|
(3,966)
|
|
(20,817)
|
|
|
Income
from discontinued operations
|
30,783
|
|
-
|
|
30,783
|
|
3,964
|
|
-
|
|
-
|
|
3,964
|
|
|
Net
Income
|
$
38,929
|
|
$ 17
|
|
$
38,946
|
|
$ 308
|
|
$ 197
|
|
$ 3,256
|
|
$ 3,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Actual
represents the Company's ownership results for the 32 hotels held for
investment as of June 30, 2011. Excludes the Royal Palm Miami Beach
which was sold in April 2011, and the Valley River Inn which has been
classified as held for sale as of June 30, 2011 and included in
discontinued operations for the three months ended June 30, 2011 due to
its probable sale within the next year.
|
|
|
(2)
|
Acquired
Hotel represents prior ownership results for the Hilton San Diego
Bayfront acquired by the Company on April 15, 2011.
|
|
|
(3)
|
Comparable
represents the Company's ownership results and prior ownership results
for the 32 comparable hotels held for investment as of June 30, 2011.
|
|
|
(4)
|
Actual
represents the Company's ownership results for the 29 hotels held for
investment as of June 30, 2010. Excludes the Valley River Inn, which
has been classified as held for sale as of June 30, 2011 and included
in discontinued operations for the three months ended June 30, 2010 due
to its probable sale within the next year, and eight hotels included in
the Mass Mutual portfolio, which have been reclassified as discontinued
operations for the three months ended June 30, 2010 due to their deed
back to the lender in November 2010. Room count as of June 30, 2010 has
been adjusted by 6 additional rooms which were added to the Courtyard
by Marriott Los Angeles Airport during the second quarter of 2011.
|
|
|
(5)
|
Reacquired
Hotel represents operating results for the Renaissance Westchester
while it was held in receivership prior to the Company's reacquisition
of the hotel on June 14, 2010.
|
|
|
(6)
|
Acquired
Hotels represents prior ownership results for the Doubletree Guest
Suites Times Square acquired by the Company on January 14, 2011, the JW
Marriott New Orleans acquired by the Company on February 15, 2011, and
the Hilton San Diego Bayfront acquired by the Company on April 15, 2011.
|
|
|
(7)
|
Comparable
represents the Company's ownership results for the 29 hotels held for
investment as of June 30, 2010, plus the Renaissance Westchester during
the period it was held in receivership prior to the Company's
reacquisition of the hotel on June 14, 2010, the Doubletree Guest
Suites Times Square acquired by the Company on January 14, 2011, the JW
Marriott New Orleans acquired by the Company on February 15, 2011, and
the Hilton San Diego Bayfront acquired by the Company on April 15, 2011.
|
|
|
(8)
|
Hotel
EBITDA Margin is calculated as Hotel EBITDA divided by total hotel
revenues.
|
|
|
(9)
|
Hotel
EBITDA Margin for the three months ended June 30, 2011 includes the
additional benefit of $0.9 million due to prior year property tax
refunds, net of appeal fees. Without this benefit, Comparable Hotel
EBITDA Margin for the three months ended June 30, 2011 would have been
30.9%, or 240 basis points higher than the three months ended June 30,
2010.
|
|
|
|
|
Sunstone
Hotel Investors, Inc.
|
|
|
Comparable
Portfolio Hotel EBITDA Margins
|
|
|
(Unaudited
and in thousands except hotels and rooms)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months Ended June 30, 2011
|
|
Six
Months Ended June 30, 2010
|
|
|
Actual
(1)
|
|
Acquired
Hotels (2)
|
|
Comparable
(3)
|
|
Actual
(4)
|
|
Reacquired
Hotel (5)
|
|
Acquired
Hotels (2)
|
|
Comparable
(6)
|
|
|
Number
of Hotels
|
32
|
|
|
|
32
|
|
29
|
|
|
|
3
|
|
32
|
|
|
Number
of Rooms
|
13,206
|
|
|
|
13,206
|
|
11,062
|
|
|
|
2,144
|
|
13,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA Margin (7)
|
26.9%
|
|
32.3%
|
|
27.4%
|
|
24.9%
|
|
10.9%
|
|
31.4%
|
|
26.1%
|
|
|
Hotel
EBITDA Margin adjusted for prior year property tax assessment (8)
|
26.7%
|
|
|
|
27.3%
|
|
24.9%
|
|
|
|
|
|
26.1%
|
|
|
Hotel
EBITDA Margin adjusted for hotels undergoing renovation (9)
|
27.6%
|
|
|
|
28.1%
|
|
24.9%
|
|
|
|
|
|
26.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
256,760
|
|
$
24,150
|
|
$
280,910
|
|
$
196,106
|
|
$ 4,931
|
|
$
60,692
|
|
$
261,729
|
|
|
Food
and beverage revenue
|
90,328
|
|
11,753
|
|
102,081
|
|
76,535
|
|
3,114
|
|
19,827
|
|
99,476
|
|
|
Other
operating revenue
|
21,412
|
|
2,873
|
|
24,285
|
|
16,428
|
|
240
|
|
7,679
|
|
24,347
|
|
|
Total
Hotel Revenues
|
368,500
|
|
38,776
|
|
407,276
|
|
289,069
|
|
8,285
|
|
88,198
|
|
385,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
expense
|
65,329
|
|
5,926
|
|
71,255
|
|
51,070
|
|
1,417
|
|
13,878
|
|
66,365
|
|
|
Food
and beverage expense
|
65,931
|
|
7,589
|
|
73,520
|
|
55,168
|
|
2,355
|
|
13,288
|
|
70,811
|
|
|
Other
hotel expense
|
95,153
|
|
9,120
|
|
104,273
|
|
76,296
|
|
2,403
|
|
24,509
|
|
103,208
|
|
|
General and administrative expense
|
42,937
|
|
3,597
|
|
46,534
|
|
34,548
|
|
1,203
|
|
8,785
|
|
44,536
|
|
|
Total
Hotel Expenses
|
269,350
|
|
26,232
|
|
295,582
|
|
217,082
|
|
7,378
|
|
60,460
|
|
284,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
EBITDA
|
99,150
|
|
12,544
|
|
111,694
|
|
71,987
|
|
907
|
|
27,738
|
|
100,632
|
|
|
Prior
year property tax assessment
|
(600)
|
|
-
|
|
(600)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Hotel
EBITDA adjusted for prior year property tax assessment
|
98,550
|
|
12,544
|
|
111,094
|
|
71,987
|
|
907
|
|
27,738
|
|
100,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Hotel Revenues of hotels undergoing renovation
|
(24,325)
|
|
-
|
|
(24,325)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Total
Hotel Expenses of hotels undergoing renovation
|
20,862
|
|
-
|
|
20,862
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
EBITDA
of hotels undergoing renovation
|
(3,463)
|
|
-
|
|
(3,463)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Hotel
EBITDA adjusted for hotels undergoing renovation
|
95,087
|
|
12,544
|
|
107,631
|
|
71,987
|
|
907
|
|
27,738
|
|
100,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-hotel
operating income
|
2,143
|
|
-
|
|
2,143
|
|
1,645
|
|
-
|
|
-
|
|
1,645
|
|
|
Amortization
of lease intangibles
|
(1,936)
|
|
(140)
|
|
(2,076)
|
|
(150)
|
|
-
|
|
(2,014)
|
|
(2,164)
|
|
|
Management
company transition costs
|
(82)
|
|
-
|
|
(82)
|
|
(85)
|
|
-
|
|
-
|
|
(85)
|
|
|
Prior
year property tax assessment
|
600
|
|
-
|
|
600
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
EBITDA
of hotels undergoing renovation
|
3,463
|
|
-
|
|
3,463
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Corporate
overhead
|
(13,973)
|
|
-
|
|
(13,973)
|
|
(9,708)
|
|
-
|
|
-
|
|
(9,708)
|
|
|
Depreciation
and amortization
|
(58,881)
|
|
(6,308)
|
|
(65,189)
|
|
(46,221)
|
|
(561)
|
|
(14,523)
|
|
(61,305)
|
|
|
Property
and goodwill impairment losses
|
-
|
|
-
|
|
-
|
|
(1,943)
|
|
|
|
|
|
(1,943)
|
|
|
Operating
Income
|
26,421
|
|
6,096
|
|
32,517
|
|
15,525
|
|
346
|
|
11,201
|
|
27,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings of unconsolidated joint ventures
|
21
|
|
-
|
|
21
|
|
275
|
|
-
|
|
-
|
|
275
|
|
|
Interest
and other income
|
1,429
|
|
-
|
|
1,429
|
|
270
|
|
-
|
|
-
|
|
270
|
|
|
Interest
expense
|
(38,937)
|
|
(3,008)
|
|
(41,945)
|
|
(36,729)
|
|
-
|
|
(7,809)
|
|
(44,538)
|
|
|
Gain
on remeasurement of equity interests
|
69,230
|
|
-
|
|
69,230
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Income
(loss) from discontinued operations
|
32,100
|
|
-
|
|
32,100
|
|
(124)
|
|
-
|
|
-
|
|
(124)
|
|
|
Net
Income (Loss)
|
$
90,264
|
|
$ 3,088
|
|
$
93,352
|
|
$
(20,783)
|
|
$ 346
|
|
$ 3,392
|
|
$
(17,045)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Actual
represents the Company's ownership results for the 32 hotels held for
investment as of June 30, 2011. Excludes the Royal Palm Miami Beach
which was sold in April 2011, and the Valley River Inn which has been
classified as held for sale as of June 30, 2011 and included in
discontinued operations for the six months ended June 30, 2011 due to
its probable sale within the next year.
|
|
|
(2)
|
Acquired
Hotels represents prior ownership results for the Doubletree Guest
Suites Times Square acquired by the Company on January 14, 2011, the JW
Marriott New Orleans acquired by the Company on February 15, 2011, and
the Hilton San Diego Bayfront acquired
by the Company on April 15, 2011.
|
|
|
(3)
|
Comparable
represents the Company's ownership results and prior ownership results
for the 32 comparable hotels held for investment as of June 30, 2011.
|
|
|
(4)
|
Actual
represents the Company's ownership results for the 29 hotels held for
investment as of June 30, 2010. Excludes the Valley River Inn which has
been classified as held for sale as of June 30, 2011 and included in
discontinued operations for the six months
ended June 30, 2010 due to its probable sale within the next year, as
well as the Marriott Ontario Airport sold by the receiver in August
2010, and eight hotels included in the Mass Mutual portfolio deeded
back to the lender in November 2010, which have been
reclassified as discontinued operations for the six months ended June
30, 2010. Room count as of June 30, 2010 has been adjusted by 6
additional rooms which were added to the Courtyard by Marriott Los
Angeles Airport during the second quarter of 2011.
|
|
|
(5)
|
Reacquired
Hotel represents operating results for the Renaissance Westchester
while it was held in receivership prior to the Company's reacquisition
of the hotel on June 14, 2010.
|
|
|
(6)
|
Comparable
represents the Company's ownership results for the 29 hotels held for
investment as of June 30, 2010, plus the Renaissance Westchester during
the period it was held in receivership prior to the Company's
reacquisition of the hotel on
June 14, 2010, the Doubletree Guest Suites Times Square acquired by the
Company on January 14, 2011, the JW Marriott New Orleans acquired by
the Company on February 15, 2011, and the Hilton San Diego Bayfront
acquired by the Company on April
15, 2011.
|
|
|
(7)
|
Hotel
EBITDA Margin is calculated as Hotel EBITDA divided by total hotel
revenues.
|
|
|
(8)
|
Hotel
EBITDA Margin for the six months ended June 30, 2011 includes the
additional benefit of $0.9 million due to prior year property tax
refunds, net of appeal fees, less additional expense of $0.3 million
due to a prior year property tax assessment. Without this
net benefit, Comparable Hotel EBITDA Margin for the six months ended
June 30, 2011 would have been 27.3%, or 120 basis points higher than
the six months ended June 30, 2010.
|
|
|
(9)
|
Hotel
EBITDA Margins for the six months ended June 30, 2011 and 2010 are
impacted by nine hotels which are currently under renovation. Without
the impact of this renovation displacement, Comparable Hotel EBITDA
Margin would have been 28.1% and
26.1%, respectively, for the six months ended June 30, 2011 and 2010.
|
|
