Hotel Online News for the Hospitality Executive
ALISO VIEJO, Calif., Feb. 19, 2013– Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO) today announced results for the fourth quarter and year ended December 31, 2012.
Fourth Quarter 2012 Operational Results (as compared to Fourth Quarter 2011) (1):
- Comparable Hotel RevPAR increased 3.6% to $137.02.
- Comparable Hotel EBITDA Margin increased by 120 basis points to 30.2%.
- Adjusted EBITDA increased by 6.6% to $68.2 million.
- Adjusted FFO per diluted share increased by 3.4% to $0.30.
- Income available to common stockholders was $3.6 million (vs. $43,000 in 2011).
- Income available to common stockholders per diluted share was $0.03 (vs. zero in 2011).
Full Year 2012 Operational Results (as compared to Full Year 2011) (1):
- Comparable Hotel RevPAR increased 5.6% to $139.22.
- Comparable Hotel EBITDA Margin increased by 110 basis points to 28.9%.
- Adjusted EBITDA increased by 14.1% to $242.5 million.
- Adjusted FFO per diluted share increased by 16.1% to $1.01.
- Income available to common stockholders was $17.8 million (vs. $53.0 million in 2011).
- Income available to common stockholders per diluted share was $0.14 (vs. $0.45 in 2011).
Ken Cruse, Chief Executive Officer, stated, “In 2012 and thus far in 2013, we have made solid progress against our plan to create significant shareholder value while improving the quality and scale of our portfolio and gradually deleveraging our balance sheet. We are currently working to further improve the quality and competitiveness of our portfolio through a number of high-quality renovations, and earlier this year we completed the sale of our low RevPAR Rochester hotel and laundry portfolio at an attractive valuation. Also in January, we continued to improve our balance sheet by repaying our final $58 million of exchangeable senior notes and by initiating the par redemption of our $176 million 8% Series A Preferred securities. Upon completion of the Series A redemption, we will have eliminated approximately $420 million of balance sheet leverage over the past year, which puts us on a clear path to achieve our long-term credit targets.”
Mr. Cruse continued, “Our portfolio is now comprised primarily of institutional grade hotels, well located within key growth markets. Moreover, we now hold approximately $300 million of investable cash, a significant portion of which we intend to deploy toward quality hotel acquisitions, further improving the competitiveness and scale of our portfolio. With the U.S. demand-to-supply ratio well above historical norms and our portfolio running at nearly 80% occupancy, industry fundamentals are constructive. We expect to see material growth in Hotel EBITDA as the recovery in the lodging cycle continues.”
(1)
Comparable Hotel RevPAR and Comparable Hotel EBITDA Margin information presented reflect the Company’s Comparable 26 Hotel Portfolio, which includes all hotels held for investment by the Company as of December 31, 2012, and also includes prior ownership results as applicable in 2012 and 2011 for the Doubletree Guest Suites Times Square acquired by the Company in January 2011, the JW Marriott New Orleans acquired by the Company in February 2011, the Hilton San Diego Bayfront acquired by the Company in April 2011, the Hyatt Chicago Magnificent Mile acquired by the Company in June 2012 and the Hilton Garden Inn Chicago Downtown/Magnificent Mile acquired by the Company in July 2012. Comparable Hotel EBITDA Margin information excludes current and prior year net property tax and CAM adjustments.
SELECTED FINANCIAL DATA
($ in millions, except RevPAR, ADR and per share amounts)
(unaudited)
Three Months Ended December 31,
Years Ended December 31,
2012
2011
% Change
2012
2011
% Change
Total Revenue
$ 233.0
$ 215.6
8.0%
$ 829.1
$ 721.8
14.9%
Comparable Hotel RevPAR
$ 137.02
$ 132.28
3.6%
$ 139.22
$ 131.89
5.6%
Comparable Hotel Occupancy
75.4%
74.5%
90 bps
79.2%
76.4%
280 bps
Comparable Hotel ADR
$ 181.73
$ 177.56
2.3%
$ 175.78
$ 172.63
1.8%
Comparable Hotel EBITDA Margin
30.2%
29.0%
120 bps
28.9%
27.8%
110 bps
Net income
$ 11.1
$ 7.6
$ 49.6
$ 81.3
Income available to common stockholders
$ 3.6
$ 0.0
$ 17.8
$ 53.0
Income available to common stockholders per diluted share
$ 0.03
$ 0.00
$ 0.14
$ 0.45
EBITDA
$ 66.9
$ 63.7
$ 272.5
$ 292.7
Adjusted EBITDA
$ 68.2
$ 63.9
$ 242.5
$ 212.5
FFO
$ 39.5
$ 33.3
$ 121.3
$ 167.4
Adjusted FFO
$ 41.3
$ 34.6
$ 128.6
$ 102.1
FFO per diluted share (1)
$ 0.29
$ 0.28
$ 0.95
$ 1.43
Adjusted FFO per diluted share (1)
$ 0.30
$ 0.29
$ 1.01
$ 0.87
(1)
Reflects the Series C convertible preferred stock on a “non-converted” basis. On an “as-converted” basis, FFO per diluted share is $0.29 and $0.30, respectively, for the three months ended December 31, 2012 and 2011, and $0.97 and $1.43, respectively, for the years ended December 31, 2012 and 2011. On an “as-converted” basis, Adjusted FFO per diluted share is $0.31 for both the three months ended December 31, 2012 and 2011, and $1.02 and $0.89, respectively, for the years ended December 31, 2012 and 2011.
Disclosure regarding the non-GAAP financial measures in this release is included on page 7. Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included on pages 10 through 14 of this release.
The Company’s actual results for the quarter and year ended December 31, 2012 compare to its guidance provided on November 2, 2012 as follows:
Metric (unaudited)
Quarter Ended December 31, 2012 Guidance (1)
Quarter Ended December 31, 2012 Actual Results
Performance Relative to Prior Guidance Midpoint
Comparable Hotel RevPAR
+1.5% – 3.0%
3.6%
+1.35%
Net Income (Loss) ($ millions) (2)
$(1) – $4
$11
$10
Adjusted EBITDA ($ millions)
$58 – $63
$68
$8
Adjusted FFO ($ millions)
$31 – $36
$41
$8
Adjusted FFO per diluted share
$0.23 – $0.27
$0.30
$0.05
Diluted Weighted Average Shares Outstanding
135,700,000
135,622,000
(78,000)
Metric (unaudited)
FY 2012 Guidance (1)
FY 2012 Actual Results
Performance Relative to Prior Guidance Midpoint
Comparable Hotel RevPAR
+4.5% – 5.0%
5.6%
+0.85%
Net Income ($ millions) (2)
$45 – $50
$50
$3
Adjusted EBITDA ($ millions)
$232 – $237
$243
$9
Adjusted FFO ($ millions)
$118 – $123
$129
$9
Adjusted FFO per diluted share
$0.93 – $0.97
$1.01
$0.06
Diluted Weighted Average Shares Outstanding
127,500,000