Exhibit 99.1
For Additional Information:
Bryan Giglia
Senior Vice President — Corporate Finance
Sunstone Hotel Investors, Inc.
(949) 382-3036
SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR SECOND QUARTER 2010
Margins Increase 70 Basis Points in Second Quarter 2010 vs. Second Quarter 2009
RevPAR Increases 6.8% in Second Quarter 2010 vs. Second Quarter 2009
ALISO VIEJO, CA —August 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 $0.18.
· Pro forma hotel EBITDA margin was 26.9%.
Art Buser, President and Chief Executive Officer, stated, “We continue to see increasing signs of a cyclical recovery. Occupancies increased to levels that enabled our hotels to increase rates. During the quarter we were impressed with our hotel operators’ ability to drive improved RevPAR and margin performance. We are focusing our efforts on maximizing the performance of our existing high quality portfolio and selectively analyzing acquisition opportunities to increase the long term value of our portfolio.”
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SELECTED FINANCIAL DATA
($ 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 ended June 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 on September 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 at www.sunstonehotels.com.
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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.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.
Non-GAAP Financial Measures
We present the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: (1) Earnings Before Interest Expense, Taxes, Depreciation and Amortization, or EBITDA; (2) Adjusted EBITDA (as defined below); (3) Funds From Operations, or FFO; (4) Adjusted FFO (as defined below); and (5) 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.
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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.
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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 | |
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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 | | $ | — | | $ | — | | $ | — | | $ | — | |
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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. |
7
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. |
8
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. |
9
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. |
10
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. |
11
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. |
12
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. |
13
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. |
14
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. |
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