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
FIRST QUARTER 2007
First Quarter Comparable RevPAR up 11.9%
California Region RevPAR up 14.7%
Acquires Marriott Boston Quincy
SAN CLEMENTE, CA – May 2, 2007 – Sunstone Hotel Investors, Inc. (the “Company”) (NYSE: SHO) today announced results of operations for the first quarter ended March 31, 2007.
First Quarter 2007 Highlights
| | • | | Total revenue was $239.8 million for the three months ended March 31, 2007, compared to $197.6 million for the three months ended March 31, 2006. |
| | • | | Adjusted EBITDA was $60.9 million for the three months ended March 31, 2007, compared to $52.0 million for the three months ended March 31, 2006. |
| | • | | Adjusted FFO available to common stockholders was $29.9 million for the three months ended March 31, 2007, compared to $29.2 million for the three months ended March 31, 2006. |
| | • | | Adjusted FFO available to common stockholders per diluted share was $0.48 for the three months ended March 31, 2007, compared to $0.49 per diluted share for the three months ended March 31, 2006. |
| | • | | Total capital expenditures were $37.0 million for the three months ended March 31, 2007. |
Steve Goldman, Chief Executive Officer, stated, “I am very pleased to announce a strong start to 2007 with Adjusted FFO per share coming in at $0.48, which is $0.02 above our guidance. Our portfolio is performing exceptionally well—posting impressive RevPAR and margin gains over the prior year. Moreover, I am excited about the prospects for our portfolio in the second quarter and beyond. Our renovations are proceeding on schedule and on budget, and the hotels we have acquired continue to perform well. I have spent my first month as CEO getting to know the Company’s portfolio and its people, and reviewing its current strategy with the goal of identifying new opportunities for driving shareholder value.”
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SELECTED FINANCIAL DATA
($ in millions, except RevPAR and per share amounts)
| | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2007 | | | 2006 | | | % Change | |
Total Revenue | | $ | 239.8 | | | $ | 197.6 | | | 21.4 | % |
Comparable RevPAR (1) | | $ | 110.23 | | | $ | 98.54 | | | 11.9 | % |
Income (loss) available to common stockholders (2) | | $ | (0.4 | ) | | $ | 13.7 | | | -102.6 | % |
Income (loss) available to common stockholders per diluted share (2) (3) | | $ | (0.01 | ) | | $ | 0.25 | | | -104.0 | % |
FFO available to common stockholders (4) (5) | | $ | 29.9 | | | $ | 21.5 | | | 39.1 | % |
Adjusted FFO available to common stockholders (4) (5) | | $ | 29.9 | | | $ | 29.2 | | | 2.3 | % |
FFO available to common stockholders per diluted share available (4) (5) | | $ | 0.48 | | | $ | 0.36 | | | 34.4 | % |
Adjusted FFO available to common stockholders per diluted share available (4) (5) | | $ | 0.48 | | | $ | 0.49 | | | -1.2 | % |
EBITDA (4) | | $ | 60.9 | | | $ | 68.7 | | | -11.3 | % |
Adjusted EBITDA (4) | | $ | 60.9 | | | $ | 52.0 | | | 17.0 | % |
Comparable Hotel Operating Profit Margin (6) | | | 26.6 | % | | | 25.2 | % | | +140 bps | |
| (1) | RevPAR for 47 hotels (includes prior ownership periods). Excludes 4 hotels under major renovation (Renaissance Baltimore, Renaissance Orlando, Renaissance Long Beach and Embassy Suites La Jolla). |
| (2) | Income (loss) available to common stockholders is presented after giving effect to the payment of the series C convertible preferred stock dividends. |
| (3) | Income (loss) available to common stockholders per share 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, and Adjusted EBITDA on page 11 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 13 for detailed hotel operating margin analysis. |
Disclosure regarding the non-GAAP financial measures in this release is included on page 8 of this release and reconciliations to the most comparable GAAP measure during each of the periods presented is included on pages 11 and 12.
Performance Relative to Guidance
The following table reflects our guidance for the first quarter 2007 compared to our actual results.
| | | | |
| | | Guidance | | Actual First Quarter 2007 |
Comparable RevPAR Growth | | 7.5% to 9.0% | | 11.9% |
Overall RevPAR Growth | | N/A | | 8.5% |
Adjusted EBITDA | | $56.8 million to $58.8 million | | $60.9 million |
Adjusted FFO available to common stockholders | | $26.9 million to $28.9 million | | $29.9 million |
Adjusted FFO available to common stockholders per diluted share | | $0.43 to $0.46 | | $0.48 |
Comparable Hotel Operating Profit Margin | | N/A | | +140 bps |
Capital expenditures | | $35 million to $40 million | | $37.0 million |
Comparable RevPAR for the 47 hotels owned at the end of the quarter, excluding four hotels which experienced significant disruption due to renovation programs in the first quarter (Renaissance Baltimore, Renaissance Orlando, Renaissance Long Beach and Embassy Suites La Jolla), increased 11.9% as
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compared to the first quarter of 2006, driven by an increase of 5.9% in average daily room rate and a 400 basis-point occupancy increase.
Comparable hotel operating profit margins for the first quarter increased 140 basis points (from 25.2% to 26.6%) (see page 13 for a reconciliation of hotel operating income to the comparable GAAP measure).
Acquisitions, Dispositions and Investments
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.
In March 2007, the Company announced it had completed the acquisition of the 402-room Boston Marriott Long Wharf Hotel located on the Boston Harbor Waterfront for $228.2 million or approximately $568,000 per room.
Balance Sheet/Liquidity Update
As of March 31, 2007, the Company had approximately $90.0 million of cash and cash equivalents (including restricted cash). On March 31, 2007, total assets were $3.1 billion, including $2.8 billion of net investments in hotel properties, total debt was $1.8 billion and stockholders’ equity was $1.0 billion.
Hotel Renovations
In the first quarter of 2007, the Company invested $37.0 million in capital expenditures across its portfolio, of which $18.3 million was spent on the Renaissance Orlando, Renaissance Baltimore, Renaissance Long Beach, Hyatt Regency Century Plaza, Hilton Times Square and Embassy Suites La Jolla.
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. Updated summaries of these six major projects are as follows:
| | 1. | Renaissance Orlando – Total project expenditures are estimated to be $27 million with aggregate 2007 expenditures of approximately $13 million. The project includes the final phase of a full-hotel renovation, including atrium, restaurants, sports bar, a new “media” bar, food outlets, Starbucks store, fitness center and spa. Completion is scheduled for the second quarter of 2007 with the exception of the spa which is scheduled to be completed in the fourth quarter of 2007. |
| | 2. | Renaissance Baltimore – Total project expenditures are estimated to be $12 million with aggregate 2007 expenditures of approximately $9 million. The project includes a renovation of the lobby, 5th floor restaurant / lounge, meeting rooms and prefunction areas, and the creation of a new junior ballroom. Completion is scheduled for the second quarter of 2007. |
| | 3. | Renaissance Long Beach – Total project expenditures are estimated to be $11 million with aggregate 2007 expenditures of approximately $9 million. The project includes renovation of the lobby, restaurant, lounge, meeting space, and the addition of a new Starbucks store and a junior ballroom. Completion is scheduled for the second quarter of 2007 with the exception of the junior ballroom which is scheduled to be completed in the third quarter of 2007. |
| | 4. | Hyatt Regency Century Plaza – Total project expenditures are estimated to be $32 million with aggregate 2007 expenditures of approximately $10.5 million. The project includes the final phase of the hotel renovation, including the new X Bar, Equinox health club and Starbucks. All major areas of work were substantially completed during the first quarter of 2007. |
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| | 5. | Hilton Times Square – Total project expenditures are estimated to be $8 million with aggregate 2007 expenditures of approximately $7 million. The project includes the upgrades to guestroom baths, corridors and meeting space; lobby and street level enhancements; the net addition of 16 guestrooms through the conversion of suites and the fitness center; and installation of 32” LCD TVs in all guestrooms. The project is scheduled for completion as follows: guestroom baths completed in the first quarter of 2007, guestroom conversions scheduled for completion in the second quarter of 2007, meeting space and guestroom LCD TV installation scheduled in the third quarter of 2007, and street level improvements scheduled in the fourth quarter of 2007. |
| | 6. | Embassy Suites La Jolla – Total project expenditures are estimated to be $11 million with aggregate 2007 expenditures of approximately $5 million. The project includes the full renovation of all guest rooms as well as selected enhancement to public areas. Guestrooms were completed during the first quarter of 2007 and the public space work is scheduled for completion in the fourth quarter of 2007. |
The operational disruption resulting from these projects is expected to cause approximately $8 million in revenue displacement in 2007, of which we estimate approximately $5 million occurred during the first quarter. This revenue displacement is primarily attributable to the renovations at the Renaissance Baltimore, Renaissance Orlando, Renaissance Long Beach and the Embassy Suites La Jolla. The Company’s second quarter and full year 2007 outlook includes estimates for the remaining expected renovation displacement.
Recent Transactions
On April 27, 2007, the Company sold its $28.5 million Doubletree Times Square mezzanine loan for gross proceeds of $29.5 million. The net proceeds from the sale were used to repay amounts outstanding on the Company’s credit facility.
On April 30, 2007, the Company settled its forward sale agreement for gross proceeds of $111 million. The proceeds from the settlement will be used for general corporate purposes.
On May 1, 2007, the Company completed the acquisition of the 464-room Marriott Boston Quincy Hotel located in the Boston sub-market of Quincy, Massachusetts for a purchase price of $116.6 million, or approximately $251,000 per key. The purchase price includes payment for land adjacent to the hotel which the Company intends to entitle for future development. Built in 2001, the hotel is located in the 1.6 million square foot Crown Colony office park and is close to over 13 million square feet of office space which includes major demand generators such as the corporate headquarters for Reebok / Adidas, Dunkin Donuts, Talbots, and State Street Financial. Marriott International will continue to manage the hotel.
Mr. Goldman stated, “During the quarter we completed the acquisition of the Marriott Boston Long Wharf, one of the city’s best located hotels, which, together with the acquisition of the Marriott Boston Quincy, meaningfully increases our presence in the high-growth Boston market. We will be combining the back of house operations for the two hotels, which will allow us to add up to nine additional guest rooms to the Long Wharf property, thereby creating operating efficiencies and driving additional revenues. Additionally, the acquisition of the Boston hotels provides the opportunity for the Company to sell certain low-basis, non-core hotels later this year in a tax efficient manner.”
Management Transition
On March 19, 2007, Steven Goldman became Chief Executive Officer of the Company. On the same date, the Company’s former Chief Executive Officer, Robert A. Alter, transitioned to Executive Chairman of the Company’s Board of Directors. Lew Wolff will remain Co-Chairman of the Board.
Effective April 23, 2007, Gary Stougaard transitioned from his role as Executive Vice President and Chief Investment Officer to a new role as Special Advisor to the Chief Executive Officer. The Company
On April 2, 2007, the Company hired Christopher Lal as Vice President of Legal. Mr. Lal is responsible for the Company’s legal function.
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anticipates that Mr. Stougaard will serve in this capacity for up to two months before he departs to pursue other opportunities.
On April 27, 2007, the Company announced that it had hired Habib Enayetullah as Senior Vice President of Development. Mr. Enayetullah will be responsible for overseeing its design and construction group and other real estate initiatives.
Outlook
The Company is providing guidance at this time but does not undertake to make updates in the future 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 second quarter of 2007 as well as full year 2007. The Company’s guidance includes all announced acquisitions and an anticipated sale of five to seven non-core hotels during the third quarter of 2007. Second quarter and full year 2007 guidance include an add-back to Adjusted EBITDA and Adjusted FFO for costs associated with the succession of the Chief Executive Officer of $0.7 million and $1.7 million, respectively.
Second Quarter 2007 Outlook
The Company expects Comparable RevPAR, excluding four hotels which will experience significant disruption due to renovation programs (Renaissance Baltimore, Renaissance Orlando, Renaissance Long Beach and Embassy Suites La Jolla), to increase approximately 8.0% to 9.5% over the second quarter of 2006. Second quarter outlook includes approximately $1.8 million of guaranty payments for the Hyatt Regency Century Plaza but does not include guaranty payments for the Fairmont Newport Beach, which are calculated and booked in the fourth quarter. As a result, the Company estimates that for the second quarter of 2007:
| | • | | Income available to common stockholders should be approximately $14.7 million to $17.7 million; |
| | • | | Income available to common stockholders per diluted share should be approximately $0.23 to $0.27; |
| | • | | Adjusted EBITDA should be approximately $83.0 million to $86.0 million; |
| | • | | Adjusted FFO available to common stockholders should be approximately $48.1 million to $51.1 million; |
| | • | | Adjusted FFO available to common stockholders per diluted share should be approximately $0.74 to $0.78; |
| | • | | Comparable hotel operating margin should be flat to approximately 50 basis points higher than the second quarter of 2006; and |
| | • | | Total capital expenditures for the portfolio should be approximately $35 million to $42 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 $2.8 million of guaranty payments for the Hyatt Regency Century Plaza and $2.0 million of guaranty payments for the Fairmont Newport Beach. Additionally, the Company estimates that for the full year 2007:
| | • | | Income available to common stockholders should be approximately $46.4 million to $53.4 million; |
| | • | | Income available to common stockholders per diluted share should be approximately $0.71 to $0.82; |
| | • | | Adjusted EBITDA should be approximately $306.0 million to $313.0 million; |
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| | • | | Adjusted FFO available to common stockholders should be approximately $175.3 million to $182.3 million; |
| | • | | Adjusted FFO available to common stockholders per diluted share should be approximately $2.69 to $2.80, as compared to our earlier guidance of $2.65 to $2.80; |
| | • | | Comparable hotel operating margin should be approximately 100-125 basis points over the prior year; and |
| | • | | Total capital expenditures should be approximately $120 million to $130 million. |
Dividend Update
During the first quarter of 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 were paid on April 13, 2007 to stockholders of record on March 30, 2007.
On May 2, 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 July 13, 2007 to stockholders of record on June 29, 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 first quarter results on May 3, 2007, at 8 a.m. PDT. 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 1-800-257-7087 (for domestic callers) or 303-262-2075 (for international callers). A replay of the web cast will also be archived on the website.
About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (“REIT”) that, as of the date hereof, has interests in 53 hotels with an aggregate of 17,583 rooms primarily in the upper-upscale segment 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
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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 May 2, 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 13. 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 11.
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.
Consolidated Balance Sheets
(in thousands)
| | | | | | | | |
| | | March 31,
2007 | | | December 31,
2006 | |
| | | (unaudited) | | | | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 15,104 | | | $ | 29,029 | |
Restricted cash | | | 74,937 | | | | 65,669 | |
Accounts receivable, net | | | 48,861 | | | | 41,695 | |
Due from affiliates | | | 1,284 | | | | 1,383 | |
Inventories | | | 3,074 | | | | 3,089 | |
Prepaid expenses | | | 8,922 | | | | 7,006 | |
| | | | | | | | |
Total current assets | | | 152,182 | | | | 147,871 | |
Investment in hotel properties, net | | | 2,784,891 | | | | 2,477,514 | |
Other real estate, net | | | 14,868 | | | | 14,673 | |
Investment in unconsolidated joint venture | | | 66,729 | | | | 68,714 | |
Deferred financing costs, net | | | 7,226 | | | | 7,381 | |
Goodwill | | | 22,249 | | | | 22,249 | |
Other assets, net | | | 14,556 | | | | 21,971 | |
| | | | | | | | |
Total assets | | $ | 3,062,701 | | | $ | 2,760,373 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable and accrued expenses | | $ | 37,470 | | | $ | 31,912 | |
Accrued payroll and employee benefits | | | 11,446 | | | | 12,338 | |
Due to SHP | | | 15,242 | | | | 16,607 | |
Dividends payable | | | 23,949 | | | | 23,826 | |
Other current liabilities | | | 36,561 | | | | 32,354 | |
Current portion of notes payable | | | 24,542 | | | | 23,231 | |
| | | | | | | | |
Total current liabilities | | | 149,210 | | | | 140,268 | |
Notes payable, less current portion | | | 1,787,330 | | | | 1,476,597 | |
Other liabilities | | | 6,958 | | | | 6,429 | |
| | | | | | | | |
Total liabilities | | | 1,943,498 | | | | 1,623,294 | |
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 March 31, 2007 and December 31, 2006, liquidation preference of $24.375 per share | | | 99,346 | | | | 99,296 | |
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 March 31, 2007 and December 31, 2006, stated at liquidation preference of $25.00 per share | | | 176,250 | | | | 176,250 | |
Common stock, $0.01 par value, 500,000,000 shares authorized, 57,818,140 shares issued and outstanding at March 31, 2007 and 57,775,089 shares issued and outstanding at December 31, 2006 | | | 578 | | | | 578 | |
Additional paid in capital | | | 959,786 | | | | 958,591 | |
Retained earnings | | | 70,373 | | | | 65,545 | |
Cumulative dividends | | | (187,130 | ) | | | (163,181 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 1,019,857 | | | | 1,037,783 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 3,062,701 | | | $ | 2,760,373 | |
| | | | | | | | |
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Sunstone Hotel Investors, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2007 | | | 2006 | |
Revenues | | | | | | | | |
Room | | $ | 156,801 | | | $ | 124,868 | |
Food and beverage | | | 65,612 | | | | 55,790 | |
Other operating | | | 17,433 | | | | 16,906 | |
| | | | | | | | |
Total revenues | | | 239,846 | | | | 197,564 | |
| | | | | | | | |
Operating expenses | | | | | | | | |
Room | | | 35,701 | | | | 28,037 | |
Food and beverage | | | 47,642 | | | | 38,478 | |
Other operating | | | 9,968 | | | | 9,619 | |
Advertising and promotion | | | 13,835 | | | | 11,518 | |
Repairs and maintenance | | | 9,705 | | | | 8,154 | |
Utilities | | | 8,673 | | | | 7,864 | |
Franchise costs | | | 8,422 | | | | 6,266 | |
Property general and administrative | | | 27,568 | | | | 23,499 | |
Property tax, ground lease and insurance | | | 14,183 | | | | 11,019 | |
Corporate overhead | | | 7,331 | | | | 5,875 | |
Depreciation and amortization | | | 27,586 | | | | 21,069 | |
| | | | | | | | |
Total operating expenses | | | 210,614 | | | | 171,398 | |
| | | | | | | | |
Operating income | | | 29,232 | | | | 26,166 | |
Equity in losses of unconsolidated joint venture | | | (1,351 | ) | | | — | |
Interest and other income | | | 679 | | | | 1,098 | |
Interest expense | | | (23,732 | ) | | | (26,759 | ) |
| | | | | | | | |
Income from continuing operations | | | 4,828 | | | | 505 | |
Income from discontinued operations | | | — | | | | 17,320 | |
Net Income | | | 4,828 | | | | 17,825 | |
Preferred stock dividends and accretion | | | (5,187 | ) | | | (4,087 | ) |
| | | | | | | | |
Income (loss) Available to Common Stockholders | | $ | (359 | ) | | $ | 13,738 | |
| | | | | | | | |
Basic and diluted per share amounts: | | | | | | | | |
Loss from continuing operations available to common stockholders | | $ | (0.01 | ) | | $ | (0.06 | ) |
Income from discontinued operations | | | — | | | | 0.31 | |
| | | | | | | | |
Basic and diluted income (loss) available to common stockholders per common share | | $ | (0.01 | ) | | $ | 0.25 | |
| | | | | | | | |
Weighted average common shares outstanding: | | | | | | | | |
Basic and diluted | | | 57,799 | | | | 55,797 | |
| | | | | | | | |
Dividends paid per common share | | $ | 0.32 | | | $ | 0.30 | |
| | | | | | | | |
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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
March 31, | |
| | | 2007 | | | 2006 | |
Income (loss) available to common stockholders | | $ | (359 | ) | | $ | 13,738 | |
Series A and C preferred stock dividends | | | 5,187 | | | | 4,087 | |
Amortization of deferred stock compensation | | | 1,245 | | | | 807 | |
Continuing operations: | | | | | | | | |
Depreciation and amortization | | | 27,586 | | | | 21,069 | |
Interest expense | | | 23,444 | | | | 18,653 | |
Amortization of deferred financing fees | | | 288 | | | | 534 | |
Write-off of deferred financing fees | | | — | | | | 196 | |
Loss on early extinguishment of debt | | | — | | | | 7,376 | |
Unconsolidated Joint Venture: | | | | | | | | |
Depreciation and amortization | | | 1,233 | | | | — | |
Interest expense | | | 1,917 | | | | — | |
Amortization of deferred financing fees | | | 330 | | | | — | |
Discontinued operations: | | | | | | | | |
Depreciation and amortization | | | — | | | | 1,905 | |
Interest expense | | | — | | | | 80 | |
Amortization of deferred financing fees | | | — | | | | 40 | |
Write-off of deferred financing fees | | | — | | | | 173 | |
| | | | | | | | |
EBITDA | | | 60,871 | | | | 68,658 | |
| | | | | | | | |
(Gain)/loss on sale of assets | | | — | | | | (16,653 | ) |
| | | | | | | | |
| | | — | | | | (16,653 | ) |
| | | | | | | | |
Adjusted EBITDA | | $ | 60,871 | | | $ | 52,005 | |
| | | | | | | | |
|
| Reconciliation of Income Available to Common Stockholders to FFO and Adjusted FFO | |
| | |
Income (loss) available to common stockholders | | $ | (359 | ) | | $ | 13,738 | |
Series C preferred stock dividends | | | 1,662 | | | | 1,662 | |
Real estate depreciation and amortization—continuing operations | | | 27,367 | | | | 20,842 | |
Real estate depreciation and amortization—unconsolidated joint venture | | | 1,233 | | | | — | |
Real estate depreciation and amortization—discontinued operations | | | — | | | | 1,905 | |
(Gain)/loss on sale of assets | | | — | | | | (16,653 | ) |
| | | | | | | | |
FFO available to common stockholders | | | 29,903 | | | | 21,494 | |
| | | | | | | | |
Continuing operations: | | | | | | | | |
Write-off of deferred financing fees | | | — | | | | 196 | |
Loss on early extinguishment of debt | | | — | | | | 7,376 | |
Discontinued operations: | | | | | | | | |
Write-off of deferred financing fees | | | — | | | | 173 | |
| | | | | | | | |
| | | — | | | | 7,745 | |
| | | | | | | | |
Adjusted FFO available to common stockholders | | $ | 29,903 | | | $ | 29,239 | |
| | | | | | | | |
FFO available to common stockholders per diluted share | | $ | 0.48 | | | $ | 0.36 | |
| | | | | | | | |
Adjusted FFO available to common stockholders per diluted share | | $ | 0.48 | | | $ | 0.49 | |
| | | | | | | | |
Diluted weighted average shares outstanding (1) | | | 62,386 | | | | 60,285 | |
| | | | | | | | |
| (1) | Diluted weighted average shares outstanding includes the Series C Convertible Preferred Stock on an as-converted basis. |
11
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
Guidance for Quarter Ended June 30, 2007 and Year Ended 2007
(Unaudited and in Thousands Except Per Share Amounts)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| | | | | | | | | | | | |
| | | Quarter Ended June 30, 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 | | $ | 14,700 | | $ | 17,700 | | $ | 46,400 | | $ | 53,400 |
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 |
Amortization of deferred stock compensation | | | 1,600 | | | 1,600 | | | 5,800 | | | 5,800 |
Continuing operations: | | | | | | | | | | | | |
Depreciation and amortization | | | 30,100 | | | 30,100 | | | 116,700 | | | 116,700 |
Interest expense | | | 27,000 | | | 27,000 | | | 99,700 | | | 99,700 |
Amortization of deferred financing fees | | | 300 | | | 300 | | | 1,200 | | | 1,200 |
Unconsolidated joint venture: | | | | | | | | | | | | |
Depreciation and amortization | | | 1,200 | | | 1,200 | | | 4,900 | | | 4,900 |
Interest expense | | | 2,300 | | | 2,300 | | | 9,000 | | | 9,000 |
| | | | | | | | | | | | |
EBITDA | | | 82,300 | | | 85,300 | | | 304,300 | | | 311,300 |
| | | | | | | | | | | | |
Costs associated with CEO succession | | | 700 | | | 700 | | | 1,700 | | | 1,700 |
| | | | | | | | | | | | |
Adjusted EBITDA | | $ | 83,000 | | $ | 86,000 | | $ | 306,000 | | $ | 313,000 |
| | | | | | | | | | | | |
|
| Reconciliation of Net Income to FFO and Adjusted FFO |
| | | | |
Income available to common stockholders | | $ | 14,700 | | $ | 17,700 | | $ | 46,400 | | $ | 53,400 |
Series C convertible preferred stock dividends | | | 1,600 | | | 1,600 | | | 6,500 | | | 6,500 |
Continuing operations: | | | | | | | | | | | | |
Real estate depreciation and amortization | | | 29,900 | | | 29,900 | | | 115,800 | | | 115,800 |
Unconsolidated joint venture: | | | | | | | | | | | | |
Real estate depreciation and amortization | | | 1,200 | | | 1,200 | | | 4,900 | | | 4,900 |
| | | | | | | | | | | | |
FFO available to common stockholders | | | 47,400 | | | 50,400 | | | 173,600 | | | 180,600 |
| | | | | | | | | | | | |
Costs associated with CEO succession | | | 700 | | | 700 | | | 1,700 | | | 1,700 |
| | | | | | | | | | | | |
Adjusted FFO available to common stockholders | | $ | 48,100 | | $ | 51,100 | | $ | 175,300 | | $ | 182,300 |
| | | | | | | | | | | | |
Adjusted FFO available to common stockholders per diluted share | | $ | 0.74 | | $ | 0.78 | | $ | 2.69 | | $ | 2.80 |
| | | | | | | | | | | | |
Diluted weighted average shares outstanding (1) | | | 65,285 | | | 65,285 | | | 65,195 | | | 65,195 |
| | | | | | | | | | | | |
| (1) | Diluted weighted average shares outstanding includes the Series C Convertible Preferred Stock on an as-converted basis. |
12
Sunstone Hotel Investors, Inc.
Comparable Hotel Operating Margin
(Unaudited and In Thousands Except Hotels and Rooms)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended March 31, 2007 | | | Quarter Ended March 31, 2006 | |
| | | Actual
March 31,
2007 (1) | | | Major
Renovation
Properties (2) | | | Prior
Ownership
Adjustments (3) | | | Pro
Forma
March 31,
2007 (4) | | | Actual
March 31,
2006 (5) | | | Major
Renovation
Properties (6) | | | Acquired
Properties (7) | | | Prior
Ownership
Adjustments (8) | | | Pro
Forma
March 31,
2006 (4) | |
Number of Hotels | | | 51 | | | | (4 | ) | | | | | | | 47 | | | | 47 | | | | (3 | ) | | | 3 | | | | | | | | 47 | |
Number of Rooms | | | 16,659 | | | | (2,110 | ) | | | | | | | 14,549 | | | | 15,164 | | | | (1,775 | ) | | | 1,160 | | | | | | | | 14,549 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotel operating profit margin (9) | | | 26.7 | % | | | 25.3 | % | | | 17.8 | % | | | 26.6 | % | | | 26.9 | % | | | 28.1 | % | | | 21.4 | % | | | 5.8 | % | | | 25.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Hotel Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Room revenue | | $ | 156,801 | | | $ | (20,527 | ) | | $ | 5,451 | | | $ | 141,725 | | | $ | 124,868 | | | $ | (18,637 | ) | | $ | 13,113 | | | $ | 7,117 | | | $ | 126,461 | |
Food and beverage revenue | | | 65,612 | | | | (9,288 | ) | | | 2,332 | | | | 58,656 | | | | 55,790 | | | | (11,537 | ) | | | 5,151 | | | | 1,296 | | | | 50,700 | |
Other operating revenue | | | 17,433 | | | | (1,610 | ) | | | 788 | | | | 16,611 | | | | 16,906 | | | | (1,143 | ) | | | 2,057 | | | | 227 | | | | 18,047 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Hotel Revenues | | | 239,846 | | | | (31,425 | ) | | | 8,571 | | | | 216,992 | | | | 197,564 | | | | (31,317 | ) | | | 20,321 | | | | 8,640 | | | | 195,208 | |
Hotel Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Room expense | | | 35,701 | | | | (4,643 | ) | | | 1,542 | | | | 32,600 | | | | 28,037 | | | | (4,175 | ) | | | 3,565 | | | | 2,454 | | | | 29,881 | |
Food and beverage expense | | | 47,642 | | | | (6,607 | ) | | | 1,825 | | | | 42,860 | | | | 38,478 | | | | (7,312 | ) | | | 3,737 | | | | 1,828 | | | | 36,731 | |
Other hotel expense | | | 64,786 | | | | (8,255 | ) | | | 2,495 | | | | 59,026 | | | | 54,440 | | | | (7,244 | ) | | | 6,083 | | | | 2,760 | | | | 56,039 | |
General and administrative expense | | | 27,568 | | | | (3,967 | ) | | | 1,182 | | | | 24,783 | | | | 23,499 | | | | (3,787 | ) | | | 2,584 | | | | 1,097 | | | | 23,393 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Hotel Expenses | | | 175,697 | | | | (23,472 | ) | | | 7,044 | | | | 159,269 | | | | 144,454 | | | | (22,518 | ) | | | 15,969 | | | | 8,139 | | | | 146,044 | |
Hotel Operating Income | | | 64,149 | | | | (7,953 | ) | | | 1,527 | | | | 57,723 | | | | 53,110 | | | | (8,799 | ) | | | 4,352 | | | | 501 | | | | 49,164 | |
Corporate overhead | | | 7,331 | | | | (55 | ) | | | — | | | | 7,276 | | | | 5,875 | | | | (26 | ) | | | — | | | | — | | | | 5,849 | |
Depreciation and amortization | | | 27,586 | | | | (4,276 | ) | | | — | | | | 23,310 | | | | 21,069 | | | | (3,148 | ) | | | — | | | | — | | | | 17,921 | |
Impairment loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | | 29,232 | | | | (3,622 | ) | | | 1,527 | | | | 27,137 | | | | 26,166 | | | | (5,625 | ) | | | 4,352 | | | | 501 | | | | 25,394 | |
Equity in earnings of unconsolidated joint venture | | | (1,351 | ) | | | — | | | | — | | | | (1,351 | ) | | | — | | | | — | | | | — | | | | | | | | — | |
Interest and other income | | | 679 | | | | (123 | ) | | | — | | | | 556 | | | | 1,098 | | | | (37 | ) | | | — | | | | — | | | | 1,061 | |
Interest expense | | | (23,732 | ) | | | 2,821 | | | | — | | | | (20,911 | ) | | | (26,759 | ) | | | 1,439 | | | | — | | | | — | | | | (25,320 | ) |
Income (loss) from discontinued operations | | | — | | | | — | | | | — | | | | — | | | | 17,320 | | | | — | | | | — | | | | — | | | | 17,320 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 4,828 | | | $ | (924 | ) | | $ | 1,527 | | | $ | 5,431 | | | $ | 17,825 | | | $ | (4,223 | ) | | $ | 4,352 | | | $ | 501 | | | $ | 18,455 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Represents our ownership results for the 51 hotels we owned as of the end of the period. |
| (2) | Represents our ownership results for the four hotels under renovation programs (Renaissance Baltimore, Renaissance Orlando, Renaissance Long Beach and Embassy Suites La Jolla ) in the first quarter of 2007. |
| (3) | Represents prior ownership results for the 2 hotels we acquired during the first quarter of 2007. |
| (4) | Represents our ownership and prior ownership results for 47 hotels we owned as of March 31, 2007, excluding the four hotels under renovation programs (Renaissance Baltimore, Renaissance Orlando , Renaissance Long Beach and Embassy Suites La Jolla). |
| (5) | Represents our ownership results for the same 47 hotels we owned as of March 31, 2007 and 2006. |
| (6) | Represents our ownership results for the three hotels under renovation programs in the first quarter of 2007 (Renaissance Baltimore, Renaissance Orlando and Renaissance Long Beach) that we owned during the period. |
| (7) | Represents prior ownership results for three hotels that we acquired subsequent to March 31, 2006, that were not under a renovation program in the first quarter of 2007. |
| (8) | Represents prior ownership results for the two hotels we acquired during the first quarter of 2006. |
| (9) | Hotel operating profit margin is calculated as hotel operating income divided by total hotel revenues. |
13
Sunstone Hotel Investors, Inc.
Pro Forma Hotel Operating Statistics by Region
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Percent
Change in
Comparable
RevPAR | |
| | | | | | | Quarter Ended March 31, 2007 | | Quarter Ended March 31, 2006 | |
Region | | Number
of Hotels | | Number
of Rooms | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | |
California (1) | | 21 | | 5,790 | | 77.6 | % | | $ | 148.31 | | $ | 115.09 | | 73.5 | % | | $ | 136.56 | | $ | 100.37 | | 14.7 | % |
Other West (2) | | 9 | | 2,658 | | 79.7 | % | | | 112.06 | | | 89.31 | | 76.2 | % | | | 106.89 | | | 81.45 | | 9.7 | % |
Midwest (3) | | 8 | | 2,524 | | 64.8 | % | | | 124.94 | | | 80.96 | | 59.6 | % | | | 122.60 | | | 73.07 | | 10.8 | % |
Middle Atlantic (4) | | 7 | | 2,988 | | 73.7 | % | | | 199.57 | | | 147.08 | | 70.4 | % | | | 190.15 | | | 133.87 | | 9.9 | % |
South (5) | | 2 | | 589 | | 81.8 | % | | | 124.54 | | | 101.87 | | 79.4 | % | | | 120.41 | | | 95.61 | | 6.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Portfolio | | 47 | | 14,549 | | 75.2 | % | | $ | 146.58 | | $ | 110.23 | | 71.2 | % | | $ | 138.40 | | $ | 98.54 | | 11.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Excludes the Renaissance Long Beach 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, Massachusetts, Virginia, District of Columbia, New York and Pennsylvania. Excludes the Baltimore Renaissance which is under a renovation program. |
| (5) | Includes Florida and Georgia. Excludes the Orlando Renaissance which is under a renovation program. |
14
Sunstone Hotel Investors, Inc.
Pro Forma Hotel Operating Statistics by Brand
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Quarter Ended March 31, 2007 | | Quarter Ended March 31, 2006 | | Percent
Change in
Comparable
RevPAR | |
Brand | | Number
of Hotels | | Number
of Rooms | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | | Occupancy
Percentages | | | Average
Daily Rate | | Comparable
RevPAR | |
Marriott (1) | | 26 | | 7,527 | | 75.1 | % | | $ | 147.36 | | $ | 110.67 | | 74.1 | % | | $ | 139.38 | | $ | 103.28 | | 7.2 | % |
Hilton (2) | | 6 | | 1,777 | | 76.0 | % | | | 177.91 | | | 135.21 | | 70.3 | % | | | 170.38 | | | 119.78 | | 12.9 | % |
InterContinental | | 3 | | 665 | | 73.5 | % | | | 107.14 | | | 78.75 | | 72.0 | % | | | 97.43 | | | 70.15 | | 12.3 | % |
Hyatt | | 4 | | 1,605 | | 77.0 | % | | | 169.67 | | | 130.65 | | 71.0 | % | | | 158.95 | | | 112.85 | | 15.8 | % |
Other Brand Affiliations (3) | | 5 | | 1,740 | | 81.6 | % | | | 136.68 | | | 111.53 | | 69.1 | % | | | 127.26 | | | 87.94 | | 26.8 | % |
Independent | | 3 | | 1,235 | | 63.7 | % | | | 92.59 | | | 58.98 | | 57.7 | % | | | 87.26 | | | 50.35 | | 17.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Portfolio | | 47 | | 14,549 | | 75.2 | % | | $ | 146.58 | | $ | 110.23 | | 71.2 | % | | $ | 138.40 | | $ | 98.54 | | 11.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Excludes the Renaissance Baltimore, Renaissance Orlando and the Renaissance Long Beach which are under renovation programs. |
| (2) | Excludes the Embassy Suites La Jolla which is a under a renovation program. |
| (3) | Includes two Sheratons, a Wyndham, a Fairmont and a W Hotel. |
15
Sunstone Hotel Investors, Inc.
Debt Summary
(Unaudited – Dollars in Thousands)
| | | | | | | | | | | | | | | |
Debt | | Collateral | | Interest Rate / Spread | | Maturity
Date | | March 31, 2007
Balance | | Recent
Events (1) | | May 1, 2007
Balance |
Fixed Rate Debt | | | | | | | | | | | | | | | |
Secured Mortgage Debt | | 1 hotel | | 8.51% | | 2007 | | $ | 13,215 | | | | | $ | 13,215 |
Unsecured Note | | Guaranty | | 6.00% | | 2007 | | | — | | | | | | — |
Secured Mortgage Debt | | 1 hotel | | 8.78% | | 2009 | | | 8,827 | | | | | | 8,827 |
Secured Mortgage Debt | | 1 hotel | | 5.92% | | 2010 | | | 81,000 | | | | | | 81,000 |
Secured Mortgage Debt (2) | | 16 hotels | | 5.95% | | 2011 | | | 248,535 | | | | | | 248,535 |
Secured Mortgage Debt (3) | | 2 hotels | | 4.98% | | 2012 | | | 65,000 | | | | | | 65,000 |
Secured Mortgage Debt | | Rochester laundry facility | | 9.88% | | 2013 | | | 5,295 | | | | | | 5,295 |
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 |
Secured Mortgage Debt | | 1 hotel | | 5.58% | | 2017 | | | 176,000 | | | | | | 176,000 |
| | | | | | | | | | | | | | | |
Total Fixed Rate Debt | | | | | | | | | 1,673,872 | | | | | | 1,673,872 |
Credit Facility (4) | | Unsecured | | L + 1.25% - 1.75% | | 2010 | | | 138,000 | | $ | 3,000 | | | 141,000 |
| | | | | | | | | | | | | | | |
TOTAL DEBT | | | | | | | | $ | 1,811,872 | | $ | 3,000 | | $ | 1,814,872 |
| | | | | | | | | | | | | | | |
Preferred Stock | | | | | | | | | | | | |
Series A cumulative redeemable preferred | | 8.00% | | perpetual | | $ | 176,250 | | | — | | $ | 176,250 |
| | | | | | | | | | | | | | | |
Series C cumulative convertible redeemable preferred | | 6.45% | | perpetual | | $ | 100,000 | | | — | | $ | 100,000 |
| | | | | | | | | | | | | | | |
Debt Statistics | | | | | | | | | | | | |
% Fixed Rate Debt | | | | | | | | | 92.4% | | | | | | 92.2% |
% Floating Rate Debt | | | | | | | | | 7.6% | | | | | | 7.8% |
Average Interest Rate (5) | | | | | | | | | 5.83% | | | | | | 5.83% |
Weighted Average Maturity of Debt (excludes Credit Facility) | | | | | 8.10 years | | | | | | 8.10 years |
| (1) | Reflects net additional draws 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. |
16
