Exhibit 99.1
For Additional Information:
Bryan Giglia
Vice President of Finance
Sunstone Hotel Investors, Inc.
(949) 369-4204
SUNSTONE HOTEL INVESTORS REPORTS RESULTS OF OPERATIONS FOR
FOURTH QUARTER 2006 AND FULL YEAR 2006
Fourth Quarter Comparable RevPAR up 9.7%
California Region RevPAR up 16.4%
SAN CLEMENTE, CA – February 7, 2007 – Sunstone Hotel Investors, Inc. (the “Company”) (NYSE: SHO) today announced results of operations for the fourth quarter and year ended December 31, 2006.
FOURTH QUARTER 2006 HIGHLIGHTS
| | • | | Comparable revenue per available room (“RevPAR”) growth of 9.7%; |
| | • | | Adjusted EBITDA of $62.2 million; |
| | • | | Adjusted Funds From Operations (“Adjusted FFO”) to common stockholders of $35.0 million; and |
| | • | | Adjusted FFO per diluted share of $0.56. |
FULL YEAR 2006 HIGHLIGHTS
| | • | | Comparable RevPAR growth of 8.7%; |
| | • | | Adjusted EBITDA of $252.1 million; |
| | • | | Adjusted FFO to common stockholders of $149.1 million; and |
| | • | | Adjusted FFO per diluted share of $2.41. |
Robert A. Alter, Chief Executive Officer, stated “Our strong operating results for the fourth quarter and the full year are a product of Sunstone’s unwavering commitment to driving shareholder value through disciplined acquisitions and dispositions, aggressive asset management, targeted capital investments and a balanced capital structure. To be specific, in 2006 we divested of 15 non-core hotels in slow-growth markets and reinvested the proceeds along with additional capital in a total of five high-quality hotels in high barrier to entry, strong growth markets. Also during 2006, our asset management team excelled at finding ways to extract additional profitability from our portfolio of hotels. We continued our extensive renovation program, which is on schedule for substantial completion in the second quarter of 2007. With our debt bearing an average interest rate of 5.8% and an average maturity of 9 years, our balance sheet remains exceptionally sound. Finally, with the announcement of Steve Goldman as our new CEO, we have created a leadership team that is second to none. During 2006, we laid the groundwork for Sunstone’s success in 2007 and beyond.”
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SELECTED FINANCIAL DATA
($ in millions, except RevPAR and per share amounts)
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2006 | | | 2005 | | | % Change | | | 2006 | | 2005 | | % Change | |
Revenues | | $ | 249.0 | | | $ | 210.8 | | | 18.1 | % | | $ | 903.1 | | $ | 586.5 | | 54.0 | % |
Comparable RevPAR (1) | | $ | 104.21 | | | $ | 95.00 | | | 9.7 | % | | $ | 105.11 | | $ | 96.67 | | 8.7 | % |
Income available to common stockholders (including OP unit holders) (2) | | $ | 6.6 | | | $ | 8.6 | | | -22.4 | % | | $ | 33.6 | | $ | 21.0 | | 60.2 | % |
Income available to common stockholders per diluted share (including OP unit holders) (2) (3) | | $ | 0.11 | | | $ | 0.16 | | | -31.3 | % | | $ | 0.58 | | $ | 0.47 | | 23.4 | % |
FFO available to common stockholders (including OP unit holders) (4) (5) | | $ | 34.8 | | | $ | 33.0 | | | 5.4 | % | | $ | 132.2 | | $ | 93.9 | | 40.9 | % |
Adjusted FFO available to common stockholders (including OP unit holders) (4) (5) | | $ | 35.0 | | | $ | 31.3 | | | 11.7 | % | | $ | 149.1 | | $ | 97.9 | | 52.3 | % |
FFO available to common stockholders per diluted share available (including OP unit holders) (4) (5) | | $ | 0.56 | | | $ | 0.59 | | | -5.2 | % | | $ | 2.14 | | $ | 2.03 | | 5.3 | % |
Adjusted FFO available to common stockholders per diluted share available (including OP unit holders) (4) (5) | | $ | 0.56 | | | $ | 0.56 | | | 0.5 | % | | $ | 2.41 | | $ | 2.12 | | 13.7 | % |
EBITDA (4) | | $ | 60.7 | | | $ | 55.3 | | | 9.9 | % | | $ | 255.5 | | $ | 169.8 | | 50.5 | % |
Adjusted EBITDA (4) | | $ | 62.2 | | | $ | 53.2 | | | 16.9 | % | | $ | 252.1 | | $ | 167.4 | | 50.6 | % |
Comparable Hotel Operating Profit Margin (6) | | | 27.2 | % | | | 26.1 | % | | 110 bps | | | | N/A | | | N/A | | N/A | |
| (1) | RevPAR for 45 hotels (includes prior ownership periods). Excludes four hotels under major renovation (Hyatt Regency Century Plaza, Renaissance Orlando, Marriott Tysons Corner and Embassy Suites La Jolla). |
| (2) | 2006 income available to common stockholders is presented after giving effect to the payment of the series C convertible preferred stock dividends. |
| (3) | 2006 income per share available to common stockholders does not assume conversion of the series C convertible preferred stock as the effect of the conversion would not be as dilutive as the current presentation. |
| (4) | Please refer to the non-GAAP financial measures of Funds from Operations (“FFO”), Adjusted FFO, EBITDA, Adjusted EBITDA on page 8 for a tabular presentation of our results and a reconciliation to GAAP measures. |
| (5) | Reflects series C convertible preferred stock on an “as-converted” basis. |
| (6) | Please refer to page 11 for detailed hotel operating margin analysis. |
The Company has filed contemporaneously with this press release the Form 10-K with the Securities and Exchange Commission for the fiscal year ended December 31, 2006.
Disclosure regarding the non-GAAP financial measures in this release is included as an attachment to this release, along with reconciliations to the most comparable GAAP measure during each of the periods presented.
Fourth Quarter 2006 Highlights
Listed below are certain highlights from the Company’s unaudited financial statements. Please refer to the reconciliation schedule on page 9 for a tabular presentation of our results.
| | • | | Total revenue was $249.0 million for the three months ended December 31, 2006 compared to $210.8 million for the three months ended December 31, 2005. |
| | • | | Income available to common stockholders (including OP unit holders) was $6.6 million for the three months ended December 31, 2006 compared to $8.6 million for the three months ended December 31, 2005. |
| | • | | Income available to common stockholders (including OP unit holders) per diluted share was $0.11 for the three months ended December 31, 2006 compared to $0.16 per diluted share for the three months ended December 31, 2005. |
| | • | | EBITDA was $60.7 million for the three months ended December 31, 2006, compared to $55.3 million for the three months ended December 31, 2005. |
| | • | | Adjusted EBITDA was $62.2 million for the three months ended December 31, 2006, compared to $53.2 million for the three months ended December 31, 2005. |
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| | • | | FFO available to common stockholders (including OP unit holders) was $34.8 million for the three months ended December 31, 2006, compared to $33.0 million for the three months ended December 31, 2005. |
| | • | | Adjusted FFO available to common stockholders (including OP unit holders) was $35.0 million for the three months ended December 31, 2006, compared to $31.3 million for the three months ended December 31, 2005. |
| | • | | FFO available to common stockholders per diluted share (including OP unit holders) was $0.56 for the three months ended December 31, 2006 compared to $0.59 per diluted share for the three months ended December 31, 2005. |
| | • | | Adjusted FFO available to common stockholders per diluted share (including OP unit holders) was $0.56 for the three months ended December 31, 2006 compared to $0.56 per diluted share for the three months ended December 31, 2005. |
| | • | | Total capital expenditures were $36.5 million for the three months ended December 31, 2006. |
Performance Relative to Guidance
The following table reflects our guidance for the fourth quarter 2006 compared to our actual results.
| | | | |
| | | Guidance | | Actual Fourth Quarter 2006 |
Comparable RevPAR Growth | | 7.5% to 9.0% | | 9.7% |
Overall RevPAR Growth | | N/A | | 7.1% |
Adjusted EBITDA | | $60.0 million to $63.0 million | | $62.2 million |
Adjusted FFO available to common stockholders | | $31.9 million to $34.9 million | | $35.0 million |
Adjusted FFO available to common stockholders per diluted share | | $0.51 to $0.56 | | $0.56 |
Comparable Hotel Operating Profit Margin | | +100 bps to 150 bps | | +110 bps |
Capital expenditures | | $30 million to $35 million | | $36.5 million |
Comparable RevPAR for 45 hotels owned for the entire quarter, excluding four hotels undergoing rebranding and renovation programs (Hyatt Regency Century Plaza, Renaissance Orlando, Marriott Tysons Corner and Embassy Suites La Jolla) increased 9.7% as compared to the fourth quarter of 2005, driven by an increase of 5.8% in average daily room rate and a 250 point occupancy increase.
Comparable hotel operating profit margins for the fourth quarter increased 110 basis points (from 26.1% to 27.2%) (see page 11 for a reconciliation of hotel operating income to the comparable GAAP measure).
Year Ended December 31, 2006 Highlights
Listed below are certain highlights from the Company’s unaudited financial statements. Please refer to the reconciliation schedule on page 9 for a tabular presentation of our results.
| | • | | Total revenue was $903.1 million for the year ended December 31, 2006 compared to $586.5 million for the year ended December 31, 2005. |
| | • | | Income available to common stockholders (including OP unit holders) was $33.6 million for the year ended December 31, 2006 compared to $21.0 million for the year ended December 31, 2005. |
| | • | | Income available to common stockholders (including OP unit holders) per diluted share was $0.58 for the year ended December 31, 2006 compared to $0.47 per diluted share for the year ended December 31, 2005. |
| | • | | EBITDA was $255.5 million for the year ended December 31, 2006, compared to $169.8 million for the year ended December 31, 2005. |
| | • | | Adjusted EBITDA was $252.1 million for the year ended December 31, 2006, compared to $167.4 million for the year ended December 31, 2005. |
| | • | | FFO available to common stockholders (including OP unit holders) was $132.2 million for the year ended December 31, 2006, compared to $93.9 million for the year ended December 31, 2005. |
| | • | | Adjusted FFO available to common stockholders (including OP unit holders) was $149.1 million for the year ended December 31, 2006, compared to $97.9 million for the year ended December 31, 2005. |
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| | • | | FFO available to common stockholders per diluted share (including OP unit holders) was $2.14 for the year ended December 31, 2006 compared to $2.03 per diluted share for the year ended December 31, 2005. |
| | • | | Adjusted FFO available to common stockholders per diluted share (including OP unit holders) was $2.41 for the year ended December 31, 2006 compared to $2.12 per diluted share for the year ended December 31, 2005. |
| | • | | Total capital expenditures were $139.4 million for the year ended December 31, 2006. |
Outlook
The Company is providing guidance at this time but does not undertake to update it for any developments in its business. Achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in the Company’s filings with the Securities and Exchange Commission. The Company has provided guidance for the first quarter of 2007 as well as full year 2007. The Company’s guidance does not include the impact of any possible future asset purchases or sales.
First Quarter 2007 Outlook
The Company expects comparable RevPAR for the first quarter of 2007 to increase approximately 7.5% to 9.0% over the first quarter of 2006, excluding certain hotels under major renovation. First quarter outlook does not include any guarantee payments for the Fairmont Newport Beach. As a result, the Company estimates that for the first quarter of 2007:
| | • | | Income (loss) available to common stockholders should be approximately $(3.8) million to $(1.8) million; |
| | • | | Income (loss) available to common stockholders per diluted share should be approximately $(0.07) to $(0.03); |
| | • | | Adjusted EBITDA should be approximately $56.8 million to $58.8 million; |
| | • | | Adjusted FFO available to common stockholders should be approximately $26.9 million to $28.9 million; |
| | • | | Adjusted FFO available to common stockholders per diluted share should be approximately $0.43 to $0.46; and |
| | • | | Total capital expenditures for the portfolio should be approximately $35 million to $40 million. |
Full Year 2007 Outlook
For the full year 2007, comparable RevPAR is expected to increase approximately 7.5% to 9.5% over the full year 2006. Full year 2007 outlook includes approximately $2.0 million of anticipated guarantee payments for the Fairmont Newport Beach. The guarantee payment is an annual calculation that will be calculated and recorded in the fourth quarter. Additionally, the Company estimates that for the full year 2007:
| | • | | Income available to common stockholders should be approximately $37.4 million to $47.4 million; |
| | • | | Income available to common stockholders per diluted share should be approximately $0.64 to $0.81; |
| | • | | Adjusted EBITDA should be approximately $288.0 million to $298.0 million; |
| | • | | Adjusted FFO available to common stockholders should be approximately $168.8 million to $178.8 million; |
| | • | | Adjusted FFO available to common stockholders per diluted share should be approximately $2.65 to $2.80; and |
| | • | | Total capital expenditures should be approximately $120 million to $130 million. |
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Balance Sheet/Liquidity Update
As of December 31, 2006, the Company had approximately $94.7 million of cash and cash equivalents (including restricted cash). Total assets on December 31, 2006 were $2.8 billion, including $2.5 billion of net investments in hotel properties, total debt of $1.5 billion and stockholders’ equity of $1.0 billion.
Acquisitions, Dispositions and Investments
In December 2006, the Company announced that it had completed the sale of the 170-room Holiday Inn Express located in Rochester, Minnesota for gross sale proceeds of $5.25 million.
Also in December 2006, the Company announced that it had entered into a joint venture agreement with Whitehall Street Global Real Estate Limited Partnership 2005 (“Whitehall”) and Highgate Holdings (“Highgate”) to acquire the 460-room Doubletree Guest Suites Hotel located at the corner of 47th Street and Broadway, in New York City’s Times Square. The Company made a structured investment in the joint venture totaling $68.5 million. The investment was funded entirely from cash on hand and is comprised of two parts: (1) a $28.5 million mezzanine loan, which bears interest at 8.5% on a face value of $30.0 million, and (2) a $40.0 million preferred equity investment representing a 38% ownership interest in the joint venture. Annual dividends on the preferred equity investment are senior to the returns on equity to both Whitehall and Highgate and begin at 8.0% and grow to 9.25% over a nine year period. In addition, the preferred equity is entitled to receive a pro-rata 38.0% share of any excess equity distributions to the joint venture.
In January 2007, the Company announced it had completed the acquisition of the 499-room LAX Renaissance Hotel located in Los Angeles, California, one half mile from Los Angeles International Airport, for $65.0 million or approximately $130,000 per room.
Capital Expenditures
In the fourth quarter of 2006, the Company invested $36.5 million in capital expenditures across its portfolio, of which $19.1 million was spent on the Hyatt Regency Century Plaza, Renaissance Orlando, Marriott Tysons Corner and Embassy Suites La Jolla. Total capital expenditures were $139.4 million for the year ended December 31, 2006.
The Company expects to complete six major hotel renovation and repositioning projects in 2007. These projects represent approximately half of the Company’s expected 2007 renovation expenditures of $120 million to $130 million. While these projects are likely to cause meaningful displacement to hotel operations during the renovation period, they are expected to significantly enhance the quality and operating performance of the hotels after completion. Summaries of the six major projects are as follows:
| | 1. | Renaissance Orlando – Total project expenditures: $27 million. 2007 expenditures: $13 million. Scope includes final phase of full-hotel renovation, including atrium, restaurants, sports bar, a new “media” bar, food outlets, Starbucks store, fitness center and spa. Completion scheduled for second quarter of 2007. |
| | 2. | Renaissance Baltimore – Total project expenditures: $12 million. 2007 expenditures: $10 million. Scope includes renovation of lobby and 5th floor restaurant / lounge, meeting rooms and prefunction areas and the creation of a new junior ballroom. Completion scheduled for the second quarter of 2007. |
| | 3. | Renaissance Long Beach – Total project expenditures: $11 million. 2007 expenditures: $9 million. Scope includes renovation of lobby, restaurant, lounge, meeting space and the addition of a new Starbucks store and a junior ballroom. Completion scheduled for the second quarter of 2007. |
| | 4. | Hyatt Regency Century Plaza – Total project expenditures: $28 million. 2007 expenditures: $8 million. Scope includes final phase of hotel renovation, including new X Bar, Equinox health club and Starbucks. Completion scheduled for the first quarter of 2007. |
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| | 5. | Hilton Times Square - Total project expenditures: $8 million. 2007 expenditures: $7 million. Scope includes upgrading of guestroom baths, corridors and meeting space, the conversion of 8 suites into 16 guestrooms, the creation of 84 “Hi-Tech” guest rooms, and lobby and street level enhancements. Completion scheduled for the second quarter of 2007. |
| | 6. | Embassy Suites La Jolla – Total project expenditures: $11 million. 2007 expenditures: $5 million. Scope includes full renovation of all guest rooms as well as selected enhancement to public areas. Completion scheduled for the second quarter of 2007. |
The operational disruption resulting from these projects is expected to displace approximately $8 million in revenues in 2007. This displacement is primarily attributed to the renovations at the Renaissance Baltimore and the Renaissance Orlando. The Company’s first quarter and full year 2007 outlook reflect the expected renovation displacement.
The Company has initiated a high-definition LCD television installation program. The Company plans to install over 3,000 LCDs in its highest rated and concierge rooms in 2007. Through 2009, the Company plans to complete the program, installing over 6,500 additional high-definition LCD televisions within its hotel portfolio.
Management Succession
In January 2007, the Company announced that Steven Goldman has been appointed Chief Executive Officer of Sunstone Hotel Investors, Inc., effective March 19, 2007. Robert A. Alter will remain as an executive officer during the course of 2007 until his transition to Chairman of the Board. Lew Wolff will remain Co-Chairman.
Dividend Update
During the fourth quarter of 2006, the Board of Directors of the Company declared a dividend of $0.32 per share payable to its common stockholders. The Company also declared a dividend of $0.50 per share payable to its Series A cumulative redeemable preferred stockholders and a dividend of $0.393 per share payable to its Series C cumulative convertible redeemable preferred stockholders. The dividends were paid on January 15, 2007 to stockholders of record on December 29, 2006.
On February 7, 2007, the Board of Directors of the Company declared a dividend of $0.32 per share payable to its common stockholders. The Company also declared a dividend of $0.50 per share payable to its Series A cumulative redeemable preferred stockholders and a dividend of $0.393 per share payable to its Series C cumulative convertible redeemable preferred stockholders. The dividends will be paid on April 13, 2007 to stockholders of record on March 30, 2007.
The level of future dividends will be determined by the Company’s quarterly operating results and expected capital requirements.
Earnings Call
The Company will host a conference call to discuss fourth quarter results on February 8, 2007, at 8 a.m. PST. A live web cast of the call will be available via the Investor Relations section of the Company’s website atwww.sunstonehotels.com. Alternatively, investors may dial 1-800-218-0204 (for domestic callers) or 303-262-2125 (for international callers) for the live call. A replay of the web cast will also be archived on the website.
About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (“REIT”) that, as of the date hereof, has interests in 51 hotels with an aggregate of 16,717 rooms primarily in the upper-upscale segment
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operated under brands owned by nationally-recognized companies, such as Marriott, Hilton, Hyatt, Fairmont and Starwood. For further information, please visit the Company’s website atwww.sunstonehotels.com.
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “continue” 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 which 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: national and local economic and business conditions, including the potential for additional terrorist attacks, that will 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 agreements; relationships with property managers; 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 acquired properties after they are acquired; necessary capital expenditures and our ability to fund them and complete them with minimum disruption; and 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 SEC. 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 February 7, 2007, 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.
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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) Hotel Operating Income and Hotel Operating Profit Margin for the purpose of our operating margins.
EBITDA represents income (loss) available to common stockholders before minority interest 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) the impact of any gain or loss from asset sales; (2) impairment charges; and (3) other adjustments we have identified in this release. We believe EBITDA and Adjusted EBITDA are useful to an investor in evaluating our operating performance because they 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 and the components of Hotel Operating Income and Hotel Operating Profit Margin are set forth on page 11. We believe Hotel Operating Income and Hotel Operating Profit 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 net income (loss) (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 a measure 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 net income (loss) to FFO and Adjusted FFO is set forth on page 9.
We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, FFO, Adjusted FFO and hotel operating income may not be comparable to similar measures disclosed by other companies, since not all companies calculate these non-GAAP measures in the same manner. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO and hotel operating income 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 and hotel operating income 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 and hotel operating income 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.
***Tables to Follow***
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Sunstone Hotel Investors, Inc.
Reconciliation of Income Available to Common Stockholders to Non-GAAP Financial Measures
(Unaudited and in Thousands Except Per Share Amounts)
Reconciliation of Income Available to Common Stockholders to EBITDA and Adjusted EBITDA
| | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2006 | | 2005 | | | 2006 | | | 2005 | |
Income available to common stockholders | | $ | 6,637 | | $ | 7,904 | | | $ | 33,621 | | | $ | 19,232 | |
Minority interest (OP unit holders) | | | — | | | 646 | | | | — | | | | 1,761 | |
| | | | | | | | | | | | | | | |
Income available to common stockholders (including OP unit holders) | | | 6,637 | | | 8,550 | | | | 33,621 | | | | 20,993 | |
| | | | |
Series A and C preferred stock dividends | | | 5,187 | | | 4,087 | | | | 19,616 | | | | 10,973 | |
Amortization of deferred stock compensation | | | 878 | | | 512 | | | | 3,677 | | | | 1,992 | |
Continuing operations: | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 25,429 | | | 21,013 | | | | 96,375 | | | | 64,612 | |
Interest expense | | | 22,224 | | | 17,010 | | | | 83,639 | | | | 50,901 | |
Amortization of deferred financing fees | | | 291 | | | 549 | | | | 1,622 | | | | 2,516 | |
Write-off of deferred financing fees | | | — | | | 98 | | | | 2,849 | | | | 797 | |
Prepayment penalties | | | — | | | 9 | | | | — | | | | 2,667 | |
Loss on early extinguishment of debt | | | — | | | — | | | | 9,976 | | | | — | |
Write-off of loan premium | | | — | | | — | | | | (1,903 | ) | | | — | |
Discontinued operations: | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 76 | | | 2,070 | | | | 5,552 | | | | 8,546 | |
Interest expense | | | — | | | 1,018 | | | | 86 | | | | 4,943 | |
Amortization of deferred financing fees | | | — | | | 25 | | | | 68 | | | | 285 | |
Write-off of deferred financing fees | | | — | | | 334 | | | | 292 | | | | 397 | |
Prepayment penalties | | | — | | | — | | | | — | | | | 176 | |
| | | | | | | | | | | | | | | |
EBITDA | | | 60,722 | | | 55,275 | | | | 255,470 | | | | 169,798 | |
| | | | | | | | | | | | | | | |
(Gain)/loss on sale of assets | | | 1,256 | | | 45 | | | | (9,048 | ) | | | (2,431 | ) |
Impairment loss from sale of assets and goodwill impairment | | | 187 | | | — | | | | 4,920 | | | | — | |
One-time cost related to hotel property tax | | | — | | | — | | | | 757 | | | | — | |
Reserve for contract interpretation issue | | | — | | | (2,136 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | | 1,443 | | | (2,091 | ) | | | (3,371 | ) | | | (2,431 | ) |
| | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 62,165 | | $ | 53,184 | | | $ | 252,099 | | | $ | 167,367 | |
| | | | | | | | | | | | | | | |
Reconciliation of Income Available to Common Stockholders to FFO and Adjusted FFO
| | | | | | | | | | | | | | | |
Income available to common stockholders | | $ | 6,637 | | $ | 7,904 | | | $ | 33,621 | | | $ | 19,232 | |
Minority interest (OP unit holders) | | | — | | | 646 | | | | — | | | | 1,761 | |
| | | | | | | | | | | | | | | |
Income available to common stockholders (including OP unit holders) | | | 6,637 | | | 8,550 | | | | 33,621 | | | | 20,993 | |
| | | | |
Series C preferred stock dividends | | | 1,662 | | | 1,662 | | | | 6,649 | | | | 3,321 | |
Real estate depreciation and amortization - continuing operations | | | 25,195 | | | 20,705 | | | | 95,474 | | | | 63,441 | |
Real estate depreciation and amortization - discontinued operations | | | 76 | | | 2,070 | | | | 5,552 | | | | 8,546 | |
(Gain)/loss on sale of assets | | | 1,256 | | | 45 | | | | (9,048 | ) | | | (2,431 | ) |
| | | | | | | | | | | | | | | |
FFO available to common stockholders (including OP unit holders) | | | 34,826 | | | 33,032 | | | | 132,248 | | | | 93,870 | |
| | | | | | | | | | | | | | | |
Continuing operations: | | | | | | | | | | | | | | | |
Write-off of deferred financing fees | | | — | | | 98 | | | | 2,849 | | | | 797 | |
Prepayment penalties | | | — | | | 9 | | | | — | | | | 2,667 | |
Loss on early extinguishment of debt | | | — | | | — | | | | 9,976 | | | | — | |
Write-off of loan premium | | | — | | | — | | | | (1,903 | ) | | | — | |
Discontinued operations: | | | | | | | | | | | | | | | |
Write-off of deferred financing fees | | | — | | | 334 | | | | 292 | | | | 397 | |
Prepayment penalties | | | — | | | — | | | | — | | | | 176 | |
Impairment loss from sale of assets and goodwill impairment | | | 187 | | | — | | | | 4,920 | | | | — | |
One-time cost related to hotel property tax | | | — | | | — | | | | 757 | | | | — | |
Reserve for contract interpretation issue | | | — | | | (2,136 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | | 187 | | | (1,695 | ) | | | 16,891 | | | | 4,037 | |
| | | | | | | | | | | | | | | |
Adjusted FFO available to common stockholders (including OP unit holders) | | $ | 35,013 | | $ | 31,337 | | | $ | 149,139 | | | $ | 97,907 | |
| | | | | | | | | | | | | | | |
FFO available to common stockholders per diluted share | | $ | 0.56 | | $ | 0.59 | | | $ | 2.14 | | | $ | 2.03 | |
| | | | | | | | | | | | | | | |
Adjusted FFO available to common stockholders per diluted share | | $ | 0.56 | | $ | 0.56 | | | $ | 2.41 | | | $ | 2.12 | |
| | | | | | | | | | | | | | | |
Diluted weighted average shares outstanding, including OP units (1) | | | 62,292 | | | 56,017 | | | | 61,793 | | | | 46,192 | |
| | | | | | | | | | | | | | | |
| (1) | Diluted weighted average shares outstanding includes the Series C Convertible Preferred Stock on an as-converted basis. |
9
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
Guidance for Quarter Ended March 31, 2007 and Year Ended 2007
(Unaudited and in Thousands Except Per Share Amounts)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| | | | | | | | | | | | | | |
| | | Quarter Ended March 31, 2007 | | | Year Ended December 31, 2007 |
| | | Low End of
Range | | | High End of
Range | | | Low End of
Range | | High End of
Range |
Income available to common stockholders | | $ | (3,800 | ) | | $ | (1,800 | ) | | $ | 37,400 | | $ | 47,400 |
Series A preferred stock dividends | | | 3,500 | | | | 3,500 | | | | 14,100 | | | 14,100 |
Series C convertible preferred stock dividends | | | 1,600 | | | | 1,600 | | | | 6,500 | | | 6,500 |
Depreciation and amortization - | | | 28,300 | | | | 28,300 | | | | 122,000 | | | 122,000 |
continuing operations (1) | | | | | | | | | | | | | | |
Depreciation and amortization - | | | 300 | | | | 300 | | | | 1,200 | | | 1,200 |
deferred financing fees | | | | | | | | | | | | | | |
Amortization of deferred stock compensation | | | 1,300 | | | | 1,300 | | | | 5,900 | | | 5,900 |
Interest expense - continuing operations | | | 23,000 | | | | 23,000 | | | | 90,600 | | | 90,600 |
Equity in earnings of unconsolidated joint venture: | | | | | | | | | | | | | | |
Depreciation and amortization (1) | | | 1,000 | | | | 1,000 | | | | 3,800 | | | 3,800 |
Interest expense | | | 1,600 | | | | 1,600 | | | | 6,500 | | | 6,500 |
| | | | | | | | | | | | | | |
EBITDA | | | 56,800 | | | | 58,800 | | | | 288,000 | | | 298,000 |
| | | | | | | | | | | | | | |
Gain on sale of assets | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 56,800 | | | $ | 58,800 | | | $ | 288,000 | | $ | 298,000 |
| | | | | | | | | | | | | | |
Reconciliation of Net Income to FFO and Adjusted FFO
| | | | | | | | | | | | | | |
Income available to common stockholders | | $ | (3,800 | ) | | $ | (1,800 | ) | | $ | 37,400 | | $ | 47,400 |
Series C convertible preferred stock dividends | | | 1,600 | | | | 1,600 | | | | 6,500 | | | 6,500 |
Non-Real estate depreciation and amortization - | | | 28,100 | | | | 28,100 | | | | 121,100 | | | 121,100 |
continuing operations (1) | | | | | | | | | | | | | | |
Equity in earnings of unconsolidated joint venture: | | | | | | | | | | | | | | |
Depreciation and amortization (1) | | | 1,000 | | | | 1,000 | | | | 3,800 | | | 3,800 |
Gain on sale of assets | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
FFO available to common stockholders | | | 26,900 | | | | 28,900 | | | | 168,800 | | | 178,800 |
| | | | | | | | | | | | | | |
Adjusted FFO available to common stockholders | | $ | 26,900 | | | $ | 28,900 | | | $ | 168,800 | | $ | 178,800 |
| | | | | | | | | | | | | | |
Diluted weighted average shares outstanding (2) | | | 62,476 | | | | 62,476 | | | | 63,764 | | | 63,764 |
| | | | | | | | | | | | | | |
Adjusted FFO available to common stockholders per diluted share | | $ | 0.43 | | | $ | 0.46 | | | $ | 2.65 | | $ | 2.80 |
| | | | | | | | | | | | | | |
| (1) | Reflects current company estimates based on purchase price for recent acquisition hotels. The Company expects to obtain a purchase price allocation from an independent third party which may cause this estimate to change. |
| (2) | Diluted weighted average shares outstanding includes the Series C Convertible Preferred Stock on an as-converted basis. |
10
Sunstone Hotel Investors, Inc.
Comparable Hotel Operating Margin
(Unaudited and In Thousands Except Hotels and Rooms)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended December 31, 2006 | | | Quarter Ended December 31, 2005 | |
| | | Actual
December 31,
2006 (1) | | | Major
Renovation
Properties (2) | | | Acquired
Properties (3) | | Pro Forma
December 31,
2006 (4) | | | Actual
December 31,
2005 (5) | | | Major
Renovation
Properties (6) | | | Acquired
Properties (7) | | | Pro Forma
December 31,
2005 (8) | |
Number of Hotels | | | 49 | | | | (4 | ) | | | | | | 45 | | | | 45 | | | | (3 | ) | | | 3 | | | | 45 | |
Number of Rooms | | | 15,758 | | | | (2,233 | ) | | | | | | 13,525 | | | | 14,436 | | | | (1,898 | ) | | | 987 | | | | 13,525 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotel operating profit margin (9) | | | 25.9 | % | | | 18.6 | % | | | | | | 27.2 | % | | | 25.5 | % | | | 24.7 | % | | | 28.9 | % | | | 26.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotel Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Room revenue | | $ | 157,927 | | | $ | (21,113 | ) | | | | | $ | 136,814 | | | $ | 125,114 | | | $ | (19,395 | ) | | $ | 18,925 | | | $ | 124,644 | |
Food and beverage revenue | | | 68,640 | | | | (10,059 | ) | | | | | | 58,581 | | | | 64,907 | | | | (13,832 | ) | | | 6,517 | | | | 57,592 | |
Other operating revenue | | | 22,424 | | | | (8,125 | ) | | | | | | 14,299 | | | | 20,783 | | | | (9,143 | ) | | | 1,062 | | | | 12,702 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Hotel Revenues | | | 248,991 | | | | (39,297 | ) | | | | | | 209,694 | | | | 210,804 | | | | (42,370 | ) | | | 26,504 | | | | 194,938 | |
| | | | | | | | |
Hotel Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Room expense | | | 36,383 | | | | (5,665 | ) | | | | | | 30,718 | | | | 30,357 | | | | (5,730 | ) | | | 4,473 | | | | 29,100 | |
Food and beverage expense | | | 47,553 | | | | (9,011 | ) | | | | | | 38,542 | | | | 44,531 | | | | (11,323 | ) | | | 5,503 | | | | 38,711 | |
Other hotel expense | | | 71,477 | | | | (12,696 | ) | | | | | | 58,781 | | | | 58,204 | | | | (10,264 | ) | | | 6,161 | | | | 54,101 | |
General and administrative expense | | | 29,153 | | | | (4,624 | ) | | | | | | 24,529 | | | | 24,046 | | | | (4,575 | ) | | | 2,713 | | | | 22,184 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Hotel Expenses | | | 184,566 | | | | (31,996 | ) | | | | | | 152,570 | | | | 157,138 | | | | (31,892 | ) | | | 18,850 | | | | 144,096 | |
| | | | | | | | |
Hotel Operating Income | | | 64,425 | | | | (7,301 | ) | | | | | | 57,124 | | | | 53,666 | | | | (10,478 | ) | | | 7,654 | | | | 50,842 | |
| | | | | | | | |
Corporate overhead | | | 5,553 | | | | (77 | ) | | | | | | 5,476 | | | | 3,702 | | | | (53 | ) | | | — | | | | 3,649 | |
Depreciation and amortization | | | 25,339 | | | | (4,292 | ) | | | | | | 21,047 | | | | 21,013 | | | | (3,229 | ) | | | — | | | | 17,784 | |
Impairment loss | | | — | | | | — | | | | | | | — | | | | 512 | | | | — | | | | — | | | | 512 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | | 33,533 | | | | (2,932 | ) | | | | | | 30,601 | | | | 28,439 | | | | (7,196 | ) | | | 7,654 | | | | 28,897 | |
| | | | | | | | |
Equity in earnings of unconsolidated joint venture | | | 140 | | | | — | | | | | | | 140 | | | | — | | | | — | | | | | | | | — | |
Interest and other income | | | 1,981 | | | | (70 | ) | | | | | | 1,911 | | | | 465 | | | | (11 | ) | | | — | | | | 454 | |
Interest expense | | | (22,441 | ) | | | 5,046 | | | | | | | (17,395 | ) | | | (17,666 | ) | | | 3,471 | | | | — | | | | (14,195 | ) |
Minority interest | | | — | | | | — | | | | | | | — | | | | (646 | ) | | | — | | | | — | | | | (646 | ) |
Income (loss) from discontinued operations | | | (1,389 | ) | | | — | | | | | | | (1,389 | ) | | | (737 | ) | | | — | | | | — | | | | (737 | ) |
Reserve for contract dispute | | | — | | | | — | | | | | | | — | | | | 2,136 | | | | — | | | | — | | | | 2,136 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 11,824 | | | $ | 2,044 | | | $ | — | | $ | 13,868 | | | $ | 11,991 | | | $ | (3,736 | ) | | $ | 7,654 | | | $ | 15,909 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Represents our ownership results for the 49 hotels we owned as of the end of the period. |
| (2) | Represents our ownership results for the four hotels under renovation programs (Hyatt Regency Century Plaza, Renaissance Orlando , Marriott Tysons Corner and Embassy Suites La Jolla). |
| (3) | No hotels were acquired during the quarter ended December 31, 2006 and excludes our investment in an unconsolidated joint venture (Doubletree Times Square). |
| (4) | Represents our ownership results for the 45 hotels we owned as of the end of the period excluding the four hotels under renovation programs (Hyatt Regency Century Plaza, Renaissance Orlando , Marriott Tysons Corner and Embassy Suites La Jolla). |
| (5) | Represents our ownership results for 45 hotels we owned as of the end of December 31, 2006 and 2005. Excludes 4 hotels sold in 2005 and 15 hotels sold in 2006. |
| (6) | Represents our ownership results for the three hotels under renovation programs (Hyatt Regency Century Plaza, Renaissance Orlando and Marriott Tysons Corner) we owned during the period. |
| (7) | Represents prior ownership results for 3 of the 5 hotels we acquired during or subsequent to the fourth quarter 2005 that were not undergoing major renovation programs. |
| (8) | Represents our ownership and prior ownership results for the 45 hotels we owned as of December 31, 2006, excluding the four hotels under renovation programs (Hyatt Regency Century Plaza, Renaissance Orlando , Marriott Tysons Corner and Embassy Suites La Jolla). |
| (9) | Hotel operating profit margin is calculated as hotel operating income divided by total hotel revenues. |
11
Sunstone Hotel Investors, Inc.
Pro Forma Hotel Operating Statistics by Region
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Quarter Ended December 31, 2006 | | Quarter Ended December 31, 2005 | | Percent Change in Comparable
RevPAR | |
Region | | Number
of Hotels | | Number
of Rooms | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | |
California (1) | | 20 | | 4,936 | | 71.6 | % | | $ | 132.90 | | $ | 95.16 | | 66.8 | % | | $ | 122.34 | | $ | 81.72 | | 16.4 | % |
Other West (2) | | 9 | | 2,658 | | 73.1 | % | | | 97.64 | | | 71.37 | | 70.2 | % | | | 92.53 | | | 64.96 | | 9.9 | % |
Midwest (3) | | 8 | | 2,524 | | 62.6 | % | | | 137.28 | | | 85.94 | | 58.3 | % | | | 128.53 | | | 74.93 | | 14.7 | % |
Middle Atlantic (4) | | 6 | | 2,818 | | 75.0 | % | | | 217.91 | | | 163.43 | | 76.7 | % | | | 206.10 | | | 158.08 | | 3.4 | % |
South (5) | | 2 | | 589 | | 75.2 | % | | | 114.80 | | | 86.33 | | 77.6 | % | | | 109.45 | | | 84.93 | | 1.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Portfolio | | 45 | | 13,525 | | 71.2 | % | | $ | 146.36 | | $ | 104.21 | | 68.7 | % | | $ | 138.28 | | $ | 95.00 | | 9.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | Year Ended December 31, 2006 | | Year Ended December 31, 2005 | | Percent Change in Comparable
RevPAR | |
Region | | Number
of Hotels | | Number
of Rooms | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | |
California (1) | | 20 | | 4,936 | | 76.3 | % | | $ | 134.71 | | $ | 102.78 | | 75.9 | % | | $ | 122.86 | | $ | 93.25 | | 10.2 | % |
Other West (2) | | 9 | | 2,658 | | 76.5 | % | | | 98.79 | | | 75.57 | | 74.8 | % | | | 94.02 | | | 70.33 | | 7.5 | % |
Midwest (3) | | 8 | | 2,524 | | 65.1 | % | | | 132.74 | | | 86.41 | | 62.8 | % | | | 123.37 | | | 77.48 | | 11.5 | % |
Middle Atlantic (4) | | 6 | | 2,818 | | 76.5 | % | | | 205.53 | | | 157.23 | | 76.6 | % | | | 193.49 | | | 148.21 | | 6.1 | % |
South (5) | | 2 | | 589 | | 79.0 | % | | | 114.49 | | | 90.45 | | 76.1 | % | | | 106.13 | | | 80.76 | | 12.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Portfolio | | 45 | | 13,525 | | 74.4 | % | | $ | 141.28 | | $ | 105.11 | | 73.4 | % | | $ | 131.70 | | $ | 96.67 | | 8.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Excludes the Hyatt Regency Century Plaza and the Embassy Suites La Jolla which are under renovation programs. |
| (2) | Includes Oregon, Utah and Texas. |
| (3) | Includes Illinois, Michigan and Minnesota. |
| (4) | Includes Maryland, Virginia, District of Columbia, New Jersey, New York and Pennsylvania. Excludes the Marriott Tysons Corner which is under a renovation program. |
| (5) | Includes Florida and Georgia. Excludes the Orlando Renaissance which is under a renovation program. |
12
Sunstone Hotel Investors, Inc.
Pro Forma Hotel Operating Statistics by Brand
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Percent Change in Comparable
RevPAR | |
| | | | | | | Quarter Ended December 31, 2006 | | Quarter Ended December 31, 2005 | |
Brand | | Number
of Hotels | | Number
of Rooms | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | |
Marriott (1) | | 25 | | 7,231 | | 71.3 | % | | $ | 146.07 | | $ | 104.15 | | 70.8 | % | | $ | 139.75 | | $ | 98.94 | | 5.3 | % |
Hilton (2) | | 6 | | 1,777 | | 77.3 | % | | | 224.93 | | | 173.87 | | 72.1 | % | | | 205.14 | | | 147.91 | | 17.6 | % |
InterContinental | | 3 | | 665 | | 68.0 | % | | | 99.94 | | | 67.96 | | 63.7 | % | | | 91.10 | | | 58.03 | | 17.1 | % |
Hyatt (3) | | 3 | | 877 | | 65.4 | % | | | 115.65 | | | 75.64 | | 69.7 | % | | | 117.18 | | | 81.67 | | -7.4 | % |
Other Brand Affiliations (4) | | 5 | | 1,740 | | 76.8 | % | | | 126.10 | | | 96.84 | | 66.4 | % | | | 116.35 | | | 77.26 | | 25.4 | % |
Independent | | 3 | | 1,235 | | 59.6 | % | | | 90.29 | | | 53.81 | | 54.7 | % | | | 85.15 | | | 46.58 | | 15.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Portfolio | | 45 | | 13,525 | | 71.2 | % | | | $146.36 | | | $104.21 | | 68.7 | % | | | $138.28 | | | $95.00 | | 9.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Percent Change in Comparable
RevPAR | |
| | | | | | | Year Ended December 31, 2006 | | Year Ended December 31, 2005 | |
Brand | | Number
of Hotels | | Number
of Rooms | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | |
Marriott (1) | | 25 | | 7,231 | | 71.3 | % | | $ | 146.07 | | $ | 104.15 | | 70.8 | % | | $ | 139.75 | | $ | 98.94 | | 5.3 | % |
Hilton (2) | | 6 | | 1,777 | | 79.0 | % | | | 199.62 | | | 157.70 | | 77.2 | % | | | 180.69 | | | 139.49 | | 13.1 | % |
InterContinental | | 3 | | 665 | | 72.3 | % | | | 102.35 | | | 74.00 | | 70.2 | % | | | 95.52 | | | 67.06 | | 10.4 | % |
Hyatt (3) | | 3 | | 877 | | 73.5 | % | | | 122.53 | | | 90.06 | | 76.5 | % | | | 117.23 | | | 89.68 | | 0.4 | % |
Other Brand Affiliations (4) | | 5 | | 1,740 | | 75.1 | % | | | 126.57 | | | 95.05 | | 75.5 | % | | | 115.30 | | | 87.05 | | 9.2 | % |
Independent | | 3 | | 1,235 | | 63.2 | % | | | 89.01 | | | 56.25 | | 60.0 | % | | | 84.29 | | | 50.57 | | 11.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Portfolio | | 45 | | 13,525 | | 74.4 | % | | | $141.28 | | | $105.11 | | 73.4 | % | | | $131.70 | | | $96.67 | | 8.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Excludes the Renaissance Orlando and the Marriott Tysons Corner which are under renovation programs. |
| (2) | Excludes the Embassy Suites La Jolla which is a under a renovation program. |
| (3) | Excludes the Hyatt Regency Century Plaza which is under a renovation program. |
| (4) | Includes two Sheratons, a Wyndham, a Fairmont and a W Hotel. |
13
Sunstone Hotel Investors, Inc.
Debt Summary
(Unaudited - Dollars in Thousands)
| | | | | | | | | | | | | | | | | | |
Debt | | Collateral | | Interest Rate /
Spread | | | Maturity
Date | | December 31, 2006
Balance | | | Recent
Events (1) | | January 31, 2007
Balance | |
| Fixed Rate Debt | | | | | | | | | | | | | | | | | | |
Secured Mortgage Debt | | 1 hotel | | 8.51 | % | | 2007 | | $ | 13,317 | | | | | | $ | 13,317 | |
Unsecured Note | | Guaranty | | 6.00 | % | | 2007 | | | 542 | | | | | | | 542 | |
Secured Mortgage Debt | | 1 hotel | | 8.78 | % | | 2009 | | | 8,882 | | | | | | | 8,882 | |
Secured Mortgage Debt | | 1 hotel | | 5.92 | % | | 2010 | | | 81,000 | | | | | | | 81,000 | |
Secured Mortgage Debt (2) | | 17 hotels | | 5.95 | % | | 2011 | | | 249,636 | | | | | | | 249,636 | |
Secured Mortgage Debt (3) | | 2 hotels | | 4.98 | % | | 2012 | | | 65,000 | | | | | | | 65,000 | |
Secured Mortgage Debt | | Rochester laundry facility | | 9.88 | % | | 2013 | | | 5,451 | | | | | | | 5,451 | |
Secured Mortgage Debt | | 1 hotel | | 6.12 | % | | 2014 | | | 175,000 | | | | | | | 175,000 | |
Secured Mortgage Debt (3) | | 10 hotels | | 5.34 | % | | 2015 | | | 276,000 | | | | | | | 276,000 | |
Secured Mortgage Debt (3) | | 2 hotels | | 5.20 | % | | 2016 | | | 198,000 | | | | | | | 198,000 | |
Secured Mortgage Debt | | 1 hotel | | 5.69 | % | | 2016 | | | 48,000 | | | | | | | 48,000 | |
Secured Mortgage Debt | | 1 hotel | | 5.66 | % | | 2016 | | | 34,000 | | | | | | | 34,000 | |
Secured Mortgage Debt | | 1 hotel | | 5.58 | % | | 2017 | | | 75,000 | | | | | | | 75,000 | |
Secured Mortgage Debt | | 1 hotel | | 6.14 | % | | 2018 | | | 65,000 | | | | | | | 65,000 | |
Secured Mortgage Debt | | 1 hotel | | 6.60 | % | | 2019 | | | 70,000 | | | | | | | 70,000 | |
Secured Mortgage Debt | | 1 hotel | | 5.95 | % | | 2021 | | | 135,000 | | | | | | | 135,000 | |
| | | | | | | | | | | | | | | | | | |
Total Fixed Rate Debt | | | | | | | | | | 1,499,828 | | | | — | | | 1,499,828 | |
| | | | | | |
Credit Facility (4) | | Unsecured | | L+1.25 | % -1.75% | | 2010 | | | — | | | $ | 75,000 | | | 75,000 | |
| | | | | | | | | | | | | | | | | | |
TOTAL DEBT | | | | | | | | | $ | 1,499,828 | | | $ | 75,000 | | $ | 1,574,828 | |
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Preferred Stock | | | | | | | | | | | | | | | | | | |
Series A cumulative redeemable preferred | | | | 8.00 | % | | perpetual | | $ | 176,250 | | | | — | | $ | 176,250 | |
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Series C cumulative convertible redeemable preferred | | | | 6.45 | % | | perpetual | | $ | 100,000 | | | | — | | $ | 100,000 | |
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Debt Statistics | | | | | | | | | | | | | | | | | | |
% Fixed Rate Debt | | | | | | | | | | 100.0 | % | | | | | | 95.2 | % |
% Floating Rate Debt | | | | | | | | | | 0.0 | % | | | | | | 4.8 | % |
Average Interest Rate (5) | | | | | | | | | | 5.77 | % | | | | | | 5.82 | % |
Weighted Average Maturity of Debt (excludes Credit Facility) | | | | | | | | | | 8.42 years | | | | | | | 8.42 years | |
| (1) | Reflects an additional draw on our credit facility. |
| (2) | Cross-collateralized loan with life insurance company. |
| (3) | Individual, non cross-collateralized loans. |
| (4) | Terms are presented based on the new credit facility which closed in July 2006. |
| (5) | Assumes LIBOR of 5.3%. |
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