Exhibit 99.2
| | | |
Supplemental Financial Information For the quarter ended March 31, 2024 May 6, 2024 | |||
| | ||
Supplemental Financial Information |
Table of Contents
| | | | | | | | |
Corporate Profile And Disclosures Regarding Non-GAAP Financial Measures | 2 | |||||||
6 | ||||||||
12 | ||||||||
15 | ||||||||
Property-Level Revenues, Adjusted EBITDAre & Adjusted EBITDAre Margins | 19 |
Supplemental Financial Information |
CORPORATE PROFILE AND DISCLOSURES
REGARDING NON-GAAP FINANCIAL MEASURES
| ||||||||
CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES | | Page 2 | ||||||
| | |
Supplemental Financial Information |
Sunstone Hotel Investors, Inc. (the “Company,” “we,” and “our”) (NYSE: SHO) is a lodging real estate investment trust (“REIT”) that as of May 6, 2024 owns 15 hotels comprised of 7,307 rooms, the majority of which are operated under nationally recognized brands. Sunstone’s strategy is to create long-term stakeholder value through the acquisition, active ownership and disposition of well-located hotel and resort real estate.
This presentation contains unaudited information and should be read together with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.
Corporate Headquarters
15 Enterprise, Suite 200
Aliso Viejo, CA 92656
(949) 330-4000
Company Contacts
Bryan Giglia
Chief Executive Officer
(949) 382-3036
Aaron Reyes
Chief Financial Officer
(949) 382-3018
| ||||||||
CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES | | Page 3 | ||||||
| | |
Supplemental Financial Information |
We present the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: earnings before interest expense, taxes, depreciation and amortization for real estate, or EBITDAre; Adjusted EBITDAre (as defined below); funds from operations attributable to common stockholders, or FFO attributable to common stockholders; Adjusted FFO attributable to common stockholders (as defined below); hotel Adjusted EBITDAre; and hotel Adjusted EBITDAre margins. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as the Company. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.
We present EBITDAre in accordance with guidelines established by the National Association of Real Estate Investment Trusts (“Nareit”), as defined in its September 2017 white paper “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate.” We believe EBITDAre is a useful performance measure to help investors evaluate and compare the results of our operations from period to period in comparison to our peers. Nareit defines EBITDAre as net income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property in the affiliate, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates.
We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful information to investors regarding our operating performance, and that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s complete understanding of our operating performance. In addition, we use both EBITDAre and Adjusted EBITDAre as measures in determining the value of hotel acquisitions and dispositions.
We believe that the presentation of FFO attributable to common stockholders provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified noncash items such as real estate depreciation and amortization, any real estate impairment loss and any gain or loss on sale of real estate assets, all of which are based on historical cost accounting and may be of lesser significance in evaluating our current performance. Our presentation of FFO attributable to common stockholders conforms to the Nareit definition of “FFO applicable to common shares.” Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently than we do.
We also present Adjusted FFO attributable to common stockholders when evaluating our operating performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance and may facilitate comparisons of operating performance between periods and our peer companies.
| ||||||||
CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES | | Page 4 | ||||||
| | |
Supplemental Financial Information |
We adjust EBITDAre and FFO attributable to common stockholders for the following items, which may occur in any period, and refer to these measures as either Adjusted EBITDAre or Adjusted FFO attributable to common stockholders:
● | Amortization of deferred stock compensation: we exclude the noncash expense incurred with the amortization of deferred stock compensation as this expense is based on historical stock prices at the date of grant to our corporate employees and does not reflect the underlying performance of our hotels. |
● | Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles because it is based on historical cost accounting and is of lesser significance in evaluating our actual performance for the current period. |
● | Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure. |
● | Cumulative effect of a change in accounting principle: from time to time, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments, which include the accounting impact from prior periods, because they do not reflect our actual performance for that period. |
● | Other adjustments: we exclude other adjustments that we believe are outside the ordinary course of business because we do not believe these costs reflect our actual performance for the period and/or the ongoing operations of our hotels. Such items may include: lawsuit settlement costs; the write-off of development costs associated with abandoned projects; property-level restructuring, severance, pre-opening, and management transition costs; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments. |
In addition, to derive Adjusted EBITDAre, we exclude the amortization of our right-of-use assets and related lease obligations as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude the effect of gains and losses on the disposition of undepreciated assets because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets.
To derive Adjusted FFO attributable to common stockholders, we also exclude the noncash interest on our derivatives as we believe that these items are not reflective of our ongoing finance costs. Additionally, we exclude the real estate amortization of our right-of-use assets and related lease obligations, which includes the amortization of our operating lease intangibles (with the exception of our corporate operating lease), as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. We also exclude preferred stock redemption charges, changes to deferred tax assets, liabilities or valuation allowances, and income tax benefits or provisions associated with the application of net operating loss carryforwards, uncertain tax positions or with the sale of assets.
In presenting hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins, miscellaneous non-hotel items have been excluded. We believe the calculation of hotel Adjusted EBITDAre results in a more accurate presentation of the hotel Adjusted EBITDAre margins for our hotels, and that these non-GAAP financial measures are useful to investors in evaluating our property-level operating performance.
Reconciliations of net income to EBITDAre, Adjusted EBITDAre, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins are set forth in the following pages of this supplemental package.
| ||||||||
CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES | | Page 5 | ||||||
| | |
Supplemental Financial Information |
COMPARABLE CORPORATE FINANCIAL INFORMATION
| ||||||||
COMPARABLE CORPORATE FINANCIAL INFORMATION | | Page 6 | ||||||
| | |
Supplemental Financial Information |
Comparable Consolidated Statements of Operations
Q1 2024 – Q2 2023, Trailing 12 Months
| | | | | | | | | | | | | | | |
| Quarter Ended (1) | | Trailing 12 Months (1) | ||||||||||||
(Unaudited and in thousands, except per share data) | March 31, | | December 31, | | September 30, | | June 30, | | Ended | ||||||
| 2024 |
| 2023 |
| 2023 |
| 2023 |
| March 31, 2024 | ||||||
Revenues | | | | | | | | | | | | | | | |
Room | $ | 135,815 | | $ | 127,038 | | $ | 134,428 | | $ | 149,923 | | $ | 547,204 | |
Food and beverage | | 61,339 | | | 61,284 | | | 56,835 | | | 70,921 | | | 250,379 | |
Other operating | | 20,012 | | | 19,772 | | | 22,398 | | | 21,728 | | | 83,910 | |
Total revenues | | 217,166 | | | 208,094 | | | 213,661 | | | 242,572 | | | 881,493 | |
| | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | |
Room | | 35,551 | | | 33,388 | | | 33,844 | | | 35,566 | | | 138,349 | |
Food and beverage | | 44,315 | | | 43,907 | | | 42,725 | | | 46,897 | | | 177,844 | |
Other expenses | | 83,483 | | | 81,076 | | | 82,895 | | | 83,556 | | | 331,010 | |
Corporate overhead | | 7,518 | | | 7,421 | | | 7,127 | | | 8,396 | | | 30,462 | |
Depreciation and amortization | | 29,040 | | | 29,135 | | | 29,134 | | | 28,038 | | | 115,347 | |
Total operating expenses | | 199,907 | | | 194,927 | | | 195,725 | | | 202,453 | | | 793,012 | |
| | | | | | | | | | | | | | | |
Interest and other income | | 5,453 | | | 4,137 | | | 1,218 | | | 4,639 | | | 15,447 | |
Interest expense | | (11,010) | | | (16,768) | | | (11,894) | | | (9,223) | | | (48,895) | |
Income before income taxes | | 11,702 | | | 536 | | | 7,260 | | | 35,535 | | | 55,033 | |
Income tax (provision) benefit, net | | (93) | | | 863 | | | (602) | | | (803) | | | (635) | |
Net income | $ | 11,609 | | $ | 1,399 | | $ | 6,658 | | $ | 34,732 | | $ | 54,398 | |
| | | | | | | | | | | | | | | |
Comparable Hotel Adjusted EBITDAre (2) | $ | 52,295 | | $ | 49,855 | | $ | 54,009 | | $ | 76,458 | | $ | 232,617 | |
| | | | | | | | | | | | | | | |
Comparable Adjusted EBITDAre (3) | $ | 54,511 | | $ | 49,228 | | $ | 50,786 | | $ | 72,382 | | $ | 226,907 | |
| | | | | | | | | | | | | | | |
Comparable Adjusted FFO attributable to common stockholders (4) | $ | 37,518 | | $ | 33,532 | | $ | 33,424 | | $ | 54,712 | | $ | 159,186 | |
| | | | | | | | | | | | | | | |
Comparable Adjusted FFO attributable to common stockholders per diluted share (4) | $ | 0.18 | | $ | 0.17 | | $ | 0.16 | | $ | 0.27 | | $ | 0.78 |
*Footnotes on page 8
| ||||||||
COMPARABLE CORPORATE FINANCIAL INFORMATION | | Page 7 | ||||||
| | |
Supplemental Financial Information |
Comparable Consolidated Statements of Operations
Footnotes
(1) | Excludes results for the Boston Park Plaza sold in October 2023. Also excludes the gain on sale of assets, net, extinguishment of debt, and income tax related to hotels either sold or disposed of in prior years. |
(2) | Comparable Hotel Adjusted EBITDAre reconciliation for the first quarter of 2024 can be found later in this presentation. Additional details can be found in our earnings release, furnished in Exhibit 99.1 to our 8-K filed on May 6, 2024. Comparable Hotel Adjusted EBITDAre presented for the trailing 12 months ended March 31, 2024 includes all hotels owned by the Company as of March 31, 2024. |
(3) | Comparable Adjusted EBITDAre reconciliation for the first quarter of 2024 can be found in the following pages and reflect the adjustments noted in Footnote 1 above. |
(4) | Comparable Adjusted FFO attributable to common stockholders and Comparable Adjusted FFO attributable to common stockholders per diluted share reconciliations for the first quarter of 2024 can be found in the following pages and reflect the adjustments noted in Footnote 1 above, along with repurchases of the Company’s common stock totaling 0.3 million, 1.6 million and 2.1 million shares in the second, third and fourth quarters of 2023, respectively. |
| | |||||||||
COMPARABLE CORPORATE FINANCIAL INFORMATION | | Page 8 | ||||||||
| | |
Supplemental Financial Information |
Comparable Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre
Q1 2024 – Q2 2023, Trailing 12 Months
| | | | | | | | | | | | | | |
| Quarter Ended | | Trailing 12 Months | |||||||||||
| March 31, | | December 31, | | September 30, | | June 30, | | Ended | |||||
(In thousands) | 2024 | | 2023 | | 2023 | | 2023 | | March 31, 2024 | |||||
| | | | | | | | | | | | | | |
Net income | $ | 13,035 | | $ | 126,985 | | $ | 15,558 | | $ | 43,078 | | $ | 198,656 |
Depreciation and amortization | | 29,040 | | | 29,135 | | | 33,188 | | | 32,397 | | | 123,760 |
Interest expense | | 11,010 | | | 16,768 | | | 11,894 | | | 9,223 | | | 48,895 |
Income tax (benefit) provision, net | | (855) | | | 2,799 | | | 602 | | | 803 | | | 3,349 |
Gain on sale of assets, net | | (457) | | | (123,820) | | | — | | | — | | | (124,277) |
EBITDAre | | 51,773 | | | 51,867 | | | 61,242 | | | 85,501 | | | 250,383 |
| | | | | | | | | | | | | | |
Amortization of deferred stock compensation | | 2,770 | | | 2,512 | | | 2,511 | | | 3,325 | | | 11,118 |
Amortization of right-of-use assets and obligations | | (11) | | | (20) | | | (13) | | | (17) | | | (61) |
Amortization of contract intangibles, net | | — | | | — | | | (19) | | | (18) | | | (37) |
Gain on extinguishment of debt | | (21) | | | (8) | | | (9) | | | (12) | | | (50) |
Hurricane-related insurance restoration proceeds | | — | | | — | | | — | | | (3,722) | | | (3,722) |
Property-level severance | | — | | | 297 | | | — | | | — | | | 297 |
Adjustments to EBITDAre, net | | 2,738 | | | 2,781 | | | 2,470 | | | (444) | | | 7,545 |
| | | | | | | | | | | | | | |
Adjusted EBITDAre | | 54,511 | | | 54,648 | | | 63,712 | | | 85,057 | | | 257,928 |
Sold hotel Adjusted EBITDAre (1) | | — | | | (5,420) | | | (12,926) | | | (12,675) | | | (31,021) |
| | | | | | | | | | | | | | |
Comparable Adjusted EBITDAre | $ | 54,511 | | $ | 49,228 | | $ | 50,786 | | $ | 72,382 | | $ | 226,907 |
*Footnotes on page 11
| | |||||||||
COMPARABLE CORPORATE FINANCIAL INFORMATION | | Page 9 | ||||||||
| | |
Supplemental Financial Information |
Comparable Reconciliation of Net Income to FFO and Adjusted FFO Attributable to Common Stockholders
Q1 2024– Q2 2023, Trailing 12 Months
| | | | | | | | | | | | | | |
| Quarter Ended | | Trailing 12 Months | |||||||||||
| March 31, | | December 31, | | September 30, | | June 30, | | Ended | |||||
(In thousands, except per share data) | 2024 | | 2023 | | 2023 | | 2023 | | March 31, 2024 | |||||
| | | | | | | | | | | | | | |
Net income | $ | 13,035 | | $ | 126,985 | | $ | 15,558 | | $ | 43,078 | | $ | 198,656 |
Preferred stock dividends | | (3,683) | | | (3,226) | | | (3,226) | | | (3,768) | | | (13,903) |
Real estate depreciation and amortization | | 28,755 | | | 28,979 | | | 33,025 | | | 32,240 | | | 122,999 |
Gain on sale of assets, net | | (457) | | | (123,820) | | | — | | | — | | | (124,277) |
FFO attributable to common stockholders | | 37,650 | | | 28,918 | | | 45,357 | | | 71,550 | | | 183,475 |
| | | | | | | | | | | | | | |
Amortization of deferred stock compensation | | 2,770 | | | 2,512 | | | 2,511 | | | 3,325 | | | 11,118 |
Real estate amortization of right-of-use assets and obligations | | (122) | | | (134) | | | (124) | | | (128) | | | (508) |
Amortization of contract intangibles, net | | 231 | | | 105 | | | 84 | | | 85 | | | 505 |
Noncash interest on derivatives, net | | (2,042) | | | 3,600 | | | (1,469) | | | (3,711) | | | (3,622) |
Gain on extinguishment of debt | | (21) | | | (8) | | | (9) | | | (12) | | | (50) |
Hurricane-related insurance restoration proceeds | | — | | | — | | | — | | | (3,722) | | | (3,722) |
Property-level severance | | — | | | 297 | | | — | | | — | | | 297 |
Income tax related to hotel disposition | | (948) | | | 3,662 | | | — | | | — | | | 2,714 |
Adjustments to FFO attributable to common stockholders, net | | (132) | | | 10,034 | | | 993 | | | (4,163) | | | 6,732 |
| | | | | | | | | | | | | | |
Adjusted FFO attributable to common stockholders | | 37,518 | | | 38,952 | | | 46,350 | | | 67,387 | | | 190,207 |
Sold hotel Adjusted FFO (1) | | — | | | (5,420) | | | (12,926) | | | (12,675) | | | (31,021) |
| | | | | | | | | | | | | | |
Comparable Adjusted FFO attributable to common stockholders | $ | 37,518 | | $ | 33,532 | | $ | 33,424 | | $ | 54,712 | | $ | 159,186 |
| | | | | | | | | | | | | | |
Comparable Adjusted FFO attributable to common stockholders per diluted share | $ | 0.18 | | $ | 0.17 | | $ | 0.16 | | $ | 0.27 | | $ | 0.78 |
| | | | | | | | | | | | | | |
Basic weighted average shares outstanding | | 202,631 | | | 203,612 | | | 205,570 | | | 206,181 | | | 204,499 |
Shares associated with unvested restricted stock awards | | 665 | | | 613 | | | 411 | | | 733 | | | 606 |
Diluted weighted average shares outstanding | | 203,296 | | | 204,225 | | | 205,981 | | | 206,914 | | | 205,104 |
Equity transactions (2) | | — | | | (1,164) | | | (3,123) | | | (3,764) | | | (2,013) |
Comparable diluted weighted average shares outstanding | | 203,296 | | | 203,061 | | | 202,858 | | | 203,150 | | | 203,091 |
*Footnotes on page 11
| | |||||||||
COMPARABLE CORPORATE FINANCIAL INFORMATION | | Page 10 | ||||||||
| | |
Supplemental Financial Information |
Comparable Reconciliation of Net Income to EBITDAre, Adjusted EBITDAre,
FFO and Adjusted FFO Attributable to Common Stockholders
Q1 2024 – Q2 2023, Trailing 12 Months Footnotes
(1) | Sold hotel Adjusted EBITDAre and Adjusted FFO include results for the Boston Park Plaza sold in October 2023. |
(2) | Equity transactions represent repurchases of the Company’s common stock totaling 0.3 million, 1.6 million and 2.1 million shares in the second, third and fourth quarters of 2023, respectively. |
| ||||||||
COMPARABLE CORPORATE FINANCIAL INFORMATION | | Page 11 | ||||||
| | |
| |
Supplemental Financial Information |
| ||||||||
CAPITALIZATION | | Page 12 | ||||||
| | |
Supplemental Financial Information |
Comparative Capitalization
Q1 2024 – Q1 2023
| | | | | | | | | | | | | | | | |
| | March 31, | | December 31, | | September 30, | | June 30, | | March 31, | | |||||
(In thousands, except per share data) |
| 2024 |
| 2023 |
| 2023 |
| 2023 |
| 2023 | | |||||
| | | | | | | | | | | | | | | | |
Common Share Price & Dividends | | | | | | | | | | | | | | | | |
At the end of the quarter | | $ | 11.14 | | $ | 10.73 | | $ | 9.35 | | $ | 10.12 | | $ | 9.88 | |
High during quarter ended | | $ | 11.38 | | $ | 11.05 | | $ | 10.50 | | $ | 10.79 | | $ | 11.26 | |
Low during quarter ended | | $ | 10.42 | | $ | 9.04 | | $ | 8.67 | | $ | 9.39 | | $ | 8.87 | |
Common dividends per share | | $ | 0.07 | | $ | 0.13 | | $ | 0.07 | | $ | 0.05 | | $ | 0.05 | |
| | | | | | | | | | | | | | | | |
Common Shares & Units | | | | | | | | | | | | | | | | |
Common shares outstanding | | | 203,674 | | | 203,480 | | | 205,623 | | | 207,185 | | | 207,410 | |
Units outstanding | | | — | | | — | | | — | | | — | | | — | |
Total common shares and units outstanding | | | 203,674 | | | 203,480 | | | 205,623 | | | 207,185 | | | 207,410 | |
| | | | | | | | | | | | | | | | |
Capitalization | | | | | | | | | | | | | | | | |
Market value of common equity | | $ | 2,268,933 | | $ | 2,183,336 | | $ | 1,922,578 | | $ | 2,096,709 | | $ | 2,049,211 | |
Liquidation value of preferred equity - Series G | | | 66,250 | | | 66,250 | | | 66,250 | | | 66,250 | | | 66,250 | |
Liquidation value of preferred equity - Series H | | | 115,000 | | | 115,000 | | | 115,000 | | | 115,000 | | | 115,000 | |
Liquidation value of preferred equity - Series I | | | 100,000 | | | 100,000 | | | 100,000 | | | 100,000 | | | 100,000 | |
Total debt | | | 818,512 | | | 819,050 | | | 819,582 | | | 820,100 | | | 815,612 | |
Total capitalization | | $ | 3,368,695 | | $ | 3,283,636 | | $ | 3,023,410 | | $ | 3,198,059 | | $ | 3,146,073 | |
| | | | | | | | | | | | | | | | |
Total debt to total capitalization | | | 24.3 | % | | 24.9 | % | | 27.1 | % | | 25.6 | % | | 25.9 | % |
Total debt and preferred equity to total capitalization | | | 32.6 | % | | 33.5 | % | | 36.4 | % | | 34.4 | % | | 34.9 | % |
| ||||||||
CAPITALIZATION | | Page 13 | ||||||
| | |
Supplemental Financial Information |
| | | | | | | | | | | |
(In thousands) | | | | Interest Rate / | | Maturity | | | March 31, 2024 | | |
Debt |
| Collateral |
| Spread |
| Date (1) |
| | Balance | | |
| | | | | | | | | | | |
Secured Mortgage Debt | | JW Marriott New Orleans | | 4.15% | | 12/11/2024 | | $ | 73,512 | | |
Series A Senior Notes | | Unsecured | | 4.69% | | 01/10/2026 | | | 65,000 | | |
Term Loan 3 (2) | | Unsecured | | 6.77% | | 05/01/2026 | | | 225,000 | | |
Term Loan 1 (3) | | Unsecured | | 5.25% | | 07/25/2027 | | | 175,000 | | |
Revolving Line of Credit | | Unsecured | | Adj. SOFR + 1.40% | | 07/25/2027 | | | — | | |
Series B Senior Notes | | Unsecured | | 4.79% | | 01/10/2028 | | | 105,000 | | |
Term Loan 2 (3) | | Unsecured | | 6.76% | | 01/25/2028 | | | 175,000 | | |
| | | | | | | | | | | |
Total Debt | | | | | | | | $ | 818,512 | | |
| | | | | | | | | | | |
Preferred Stock | | | | | | | | | | | |
Series G cumulative redeemable preferred (4) | | | | 1.621% | | perpetual | | $ | 66,250 | | |
Series H cumulative redeemable preferred | | | | 6.125% | | perpetual | | | 115,000 | | |
Series I cumulative redeemable preferred | | | | 5.70% | | perpetual | | | 100,000 | | |
Total Preferred Stock | | | | | | | | $ | 281,250 | | |
| | | | | | | | | | | |
Debt and Preferred Statistics | |||||||||||
| | | | | | | Debt Statistics | | Debt and Preferred Statistics | ||
% Fixed Rate Debt | | | | | | 51.1 | % | | 63.6 | % | |
% Floating Rate Debt | | | | | | 48.9 | % | | 36.4 | % | |
Average Interest Rate | | | | | | 5.79 | % | | 5.56 | % | |
Weighted Average Maturity of Debt | | | | | | 2.8 years | | | N/A | |
(1) | Maturity Date assumes the exercise of all available extensions for the Revolving Line of Credit and Term Loan 3. By extending these loans, the Company's weighted average maturity of debt increases from 2.5 years to 2.8 years. |
(2) | Interest rates on Term Loan 3 are calculated on a leverage-based pricing grid ranging from 135 to 220 basis points over the applicable adjusted term SOFR. Term Loan 3 has an initial term of two years with one 12-month extension, which would result in an extended maturity of May 2026. |
(3) | Pursuant to the Second Amended Credit Agreement, interest rates on Term Loan 1 and Term Loan 2 are calculated on a leverage-based pricing grid ranging from 135 to 220 basis points over the applicable adjusted term SOFR. In May 2023, the pricing grid was reduced by 0.02% to a range of 133 to 218 basis points as the Company achieved the 2022 sustainability performance metric specified in the Second Amended Credit Agreement. The reduction in the pricing grid will be evaluated annually and is subject to the Company's continued ability to satisfy its sustainability metric. The interest rate for Term Loan 1 includes the effects of the Company's interest rate derivative swaps. |
(4) | The Series G cumulative redeemable preferred stock had an initial dividend rate equal to the Montage Healdsburg's annual net operating income yield on the Company's total investment in the resort, resulting in cash dividends of $0.030365 per share declared for the last six months of 2023. During the first half of 2024, the dividend rate increased to the greater of 3.0% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort, resulting in cash dividends of $0.375 per share declared for the first six months of 2024. The total dividends declared during the last twelve months equate to an annual yield of 1.621%. In the second half of 2024, the dividend rate is expected to increase to the greater of 4.5% or the rate equal to the Montage Healdsburg's annual net operating income yield on the Company's total investment in the resort. |
| ||||||||
CAPITALIZATION | | Page 14 | ||||||
| | |
Supplemental Financial Information |
PROPERTY-LEVEL DATA AND OPERATING STATISTICS
| ||||||||
PROPERTY-LEVEL DATA AND OPERATING STATISTICS | | Page 15 | ||||||
| | |
Supplemental Financial Information |
Hotel Information as of May 6, 2024
| | | | | | | | | | | | | | |
Hotel |
| Location |
| Brand |
| Number of |
| % of Total |
| Interest |
| Year Acquired | ||
| | | | | | | | | | | | | | |
1 |
| Hilton San Diego Bayfront (1) (2) | | California | | Hilton | | 1,190 | | 16% | | Leasehold | | 2011 / 2022 |
2 | | Hyatt Regency San Francisco | | California | | Hyatt | | 821 | | 11% | | Fee Simple | | 2013 |
3 | | The Westin Washington, DC Downtown | | Washington DC | | Marriott | | 807 | | 11% | | Fee Simple | | 2005 |
4 | | Renaissance Orlando at SeaWorld® | | Florida | | Marriott | | 781 | | 11% | | Fee Simple | | 2005 |
5 | | Hyatt Regency San Antonio Riverwalk | | Texas | | Hyatt | | 630 | | 9% | | Fee Simple | | 2024 |
6 | | Wailea Beach Resort | | Hawaii | | Marriott | | 547 | | 7% | | Fee Simple | | 2014 |
7 | | JW Marriott New Orleans (3) | | Louisiana | | Marriott | | 501 | | 7% | | Fee Simple | | 2011 |
8 | | Marriott Boston Long Wharf | | Massachusetts | | Marriott | | 415 | | 6% | | Fee Simple | | 2007 |
9 | | Marriott Long Beach Downtown | | California | | Marriott | | 376 | | 5% | | Fee Simple | | 2005 |
10 | | The Confidante Miami Beach | | Florida | | Hyatt | | 339 | | 5% | | Fee Simple | | 2022 |
11 | | The Bidwell Marriott Portland | | Oregon | | Marriott | | 258 | | 4% | | Fee Simple | | 2000 |
12 | | Hilton New Orleans St. Charles | | Louisiana | | Hilton | | 252 | | 3% | | Fee Simple | | 2013 |
13 | | Oceans Edge Resort & Marina | | Florida | | Independent | | 175 | | 2% | | Fee Simple | | 2017 |
14 | | Montage Healdsburg (4) | | California | | Montage | | 130 | | 2% | | Fee Simple | | 2021 |
15 | | Four Seasons Resort Napa Valley (4) | | California | | Four Seasons | | 85 | | 1% | | Fee Simple | | 2021 |
| | | | | | | | | | | | | | |
| | Total Portfolio | | | | | | 7,307 | | 100% | | | | |
(1) | In June 2022, the Company acquired the 25.0% noncontrolling partner's ownership interest in the Hilton San Diego Bayfront. Following this acquisition, the Company owns 100% of the hotel. |
(2) | The ground lease at the Hilton San Diego Bayfront matures in 2071. |
(3) | Hotel is subject to a municipal airspace lease that matures in 2044 and applies only to certain balcony space that is not integral to the hotel’s operations. |
(4) | The number of rooms excludes rooms provided by owners of the separately owned private residences at each resort who may periodically elect to participate in the applicable resort’s residential rental program. |
| ||||||||
PROPERTY-LEVEL DATA AND OPERATING STATISTICS | | Page 16 | ||||||
| | |
Supplemental Financial Information |
Property-Level Operating Statistics
ADR, Occupancy, RevPAR and Total RevPAR (TRevPAR)
Q1 2024/2023
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ADR | | Occupancy | | | RevPAR | | TRevPAR | ||||||||||||||||||||||
Hotels sorted by number of rooms | | For the Quarter Ended March 31, | | For the Quarter Ended March 31, | | For the Quarter Ended March 31, | | For the Quarter Ended March 31, | |||||||||||||||||||||||
|
| 2024 | |
| 2023 | | 2024 vs. |
| 2024 |
| 2023 | | 2024 vs. |
| 2024 |
| 2023 | | 2024 vs. | | 2024 | | 2023 | | 2024 vs. 2023 | ||||||
Hilton San Diego Bayfront | | $ | 290 | | $ | 286 | | 1.7% | | 81.7% | | 82.9% | | (120) | bps | | $ | 237 | | $ | 237 | | 0.2% | | $ | 428 | | $ | 432 | | (0.9)% |
Hyatt Regency San Francisco | | | 325 | | | 324 | | 0.4% | | 65.6% | | 66.0% | | (40) | bps | | | 213 | | | 214 | | (0.2)% | | | 293 | | | 303 | | (3.2)% |
The Westin Washington, DC Downtown (1) | | | 265 | | | 245 | | 8.2% | | 67.0% | | 47.7% | | 1,930 | bps | | | 178 | | | 117 | | 52.0% | | | 294 | | | 166 | | 77.1% |
Renaissance Orlando at SeaWorld® | | | 230 | | | 221 | | 4.0% | | 81.1% | | 83.2% | | (210) | bps | | | 186 | | | 184 | | 1.4% | | | 396 | | | 407 | | (2.8)% |
Wailea Beach Resort | | | 696 | | | 738 | | (5.6)% | | 81.0% | | 79.7% | | 130 | bps | | | 564 | | | 588 | | (4.1)% | | | 806 | | | 851 | | (5.3)% |
JW Marriott New Orleans | | | 272 | | | 264 | | 2.8% | | 68.4% | | 72.6% | | (420) | bps | | | 186 | | | 192 | | (3.2)% | | | 253 | | | 267 | | (5.4)% |
Marriott Boston Long Wharf | | | 286 | | | 288 | | (0.6)% | | 67.6% | | 59.1% | | 850 | bps | | | 193 | | | 170 | | 13.6% | | | 285 | | | 249 | | 14.5% |
Marriott Long Beach Downtown (1) | | | 226 | | | 239 | | (5.6)% | | 32.6% | | 74.1% | | (4,150) | bps | | | 74 | | | 177 | | (58.5)% | | | 100 | | | 236 | | (57.5)% |
The Bidwell Marriott Portland | | | 143 | | | 160 | | (10.5)% | | 58.5% | | 50.5% | | 800 | bps | | | 84 | | | 81 | | 3.7% | | | 120 | | | 113 | | 6.7% |
Hilton New Orleans St. Charles | | | 198 | | | 206 | | (3.8)% | | 80.0% | | 74.7% | | 530 | bps | | | 158 | | | 154 | | 3.1% | | | 184 | | | 175 | | 5.6% |
Oceans Edge Resort & Marina | | | 420 | | | 471 | | (10.8)% | | 81.5% | | 78.7% | | 280 | bps | | | 342 | | | 370 | | (7.6)% | | | 513 | | | 532 | | (3.5)% |
Montage Healdsburg | | | 868 | | | 941 | | (7.8)% | | 37.5% | | 43.0% | | (550) | bps | | | 325 | | | 405 | | (19.6)% | | | 629 | | | 717 | | (12.2)% |
Four Seasons Resort Napa Valley | | | 1,075 | | | 1,370 | | (21.5)% | | 34.0% | | 30.3% | | 370 | bps | | | 365 | | | 415 | | (12.0)% | | | 750 | | | 808 | | (7.1)% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Comparable Portfolio, Excluding Renovation Hotel (2) | | | 327 | | | 331 | | (1.3)% | | 70.1% | | 69.7% | | 40 | bps | | | 229 | | | 231 | | (0.7)% | | | 369 | | | 369 | | 0.0% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Add: Renovation Hotel (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Confidante Miami Beach | | | 270 | | | 366 | | (26.3)% | | 41.1% | | 83.9% | | (4,280) | bps | | | 111 | | | 307 | | (63.9)% | | | 130 | | | 478 | | (72.8)% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Comparable Portfolio (3) | | $ | 325 | | $ | 333 | | (2.4)% | | 68.6% | | 70.5% | | (190) | bps | | $ | 223 | | $ | 235 | | (5.1)% | | $ | 357 | | $ | 375 | | (4.7)% |
*Footnotes on page 18
| ||||||||
PROPERTY-LEVEL DATA AND OPERATING STATISTICS | | Page 17 | ||||||
| | |
Supplemental Financial Information |
Property-Level Operating Statistics
(1) | Operating statistics for the first quarter of 2024 are impacted by renovation activity at Marriott Long Beach Downtown and The Confidante Miami Beach. In March 2024, operations at The Confidante Miami Beach were temporarily suspended to allow for extensive renovation work to be performed. The Company expects the resort to resume operations as Andaz Miami Beach in the fourth quarter of 2024. Operating statistics for the first quarter of 2023 are impacted by renovation activity at The Westin Washington, DC Downtown. |
(2) | Comparable Portfolio, Excluding Renovation Hotel includes all hotels owned by the Company as of March 31, 2024, with the exception of The Confidante Miami Beach due to its renovation activity during the first quarter of 2024. |
(3) | Comparable Portfolio consists of all hotels owned by the Company as of March 31, 2024. |
| ||||||||
PROPERTY-LEVEL DATA AND OPERATING STATISTICS | | Page 18 | ||||||
| | |
Supplemental Financial Information |
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre &
ADJUSTED EBITDAre MARGINS
| ||||||||
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS | | Page 19 | ||||||
| | |
Supplemental Financial Information |
Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins
Q1 2024/2023
| | | | | | | | | | | | | | | | | | | |
Hotels sorted by number of rooms | | For the Quarter Ended March 31, | |||||||||||||||||
| | 2024 | | 2023 | | | | ||||||||||||
(In thousands) | | | | | | Hotel Adjusted | | | | | | Hotel Adjusted | | Hotel Adjusted | |||||
| | Total | | Hotel Adjusted | | EBITDAre | | Total | | Hotel Adjusted | | EBITDAre | | EBITDAre | |||||
|
| Revenues |
| EBITDAre |
| Margins |
| Revenues |
| EBITDAre |
| Margins |
| Margin Change | |||||
Hilton San Diego Bayfront | | $ | 46,388 | | $ | 14,314 | | 30.9% | | $ | 46,301 | | $ | 15,039 | | 32.5% | | (160) | bps |
Hyatt Regency San Francisco | | | 21,926 | | | 2,619 | | 11.9% | | | 22,403 | | | 3,674 | | 16.4% | | (450) | bps |
The Westin Washington, DC Downtown (1) | | | 21,583 | | | 4,685 | | 21.7% | | | 12,055 | | | 606 | | 5.0% | | 1,670 | bps |
Renaissance Orlando at SeaWorld® | | | 28,140 | | | 10,127 | | 36.0% | | | 28,623 | | | 11,093 | | 38.8% | | (280) | bps |
Wailea Beach Resort | | | 40,133 | | | 15,556 | | 38.8% | | | 41,916 | | | 16,800 | | 40.1% | | (130) | bps |
JW Marriott New Orleans | | | 11,532 | | | 4,430 | | 38.4% | | | 12,053 | | | 5,475 | | 45.4% | | (700) | bps |
Marriott Boston Long Wharf | | | 10,779 | | | 1,682 | | 15.6% | | | 9,309 | | | 1,046 | | 11.2% | | 440 | bps |
Marriott Long Beach Downtown (1) | | | 3,421 | | | (2,018) | | (59.0)% | | | 7,954 | | | 2,511 | | 31.6% | | (9,060) | bps |
The Bidwell Marriott Portland | | | 2,817 | | | 204 | | 7.2% | | | 2,613 | | | 168 | | 6.4% | | 80 | bps |
Hilton New Orleans St. Charles | | | 4,227 | | | 1,609 | | 38.1% | | | 3,960 | | | 1,521 | | 38.4% | | (30) | bps |
Oceans Edge Resort & Marina | | | 8,174 | | | 3,606 | | 44.1% | | | 8,377 | | | 3,978 | | 47.5% | | (340) | bps |
Montage Healdsburg | | | 7,543 | | | (1,579) | | (20.9)% | | | 8,384 | | | (1,310) | | (15.6)% | | (530) | bps |
Four Seasons Resort Napa Valley | | | 6,488 | | | (2,702) | | (41.6)% | | | 6,856 | | | (1,858) | | (27.1)% | | (1,450) | bps |
| | | | | | | | | | | | | | | | | | | |
Comparable Portfolio, Excluding Renovation Hotel (2) | | | 213,151 | | | 52,533 | | 24.6% | | | 210,804 | | | 58,743 | | 27.9% | | (330) | bps |
| | | | | | | | | | | | | | | | | | | |
Add: Renovation Hotel (1) | | | | | | | | | | | | | | | | | | | |
The Confidante Miami Beach | | | 4,015 | | | (238) | | (5.9)% | | | 14,581 | | | 5,667 | | 38.9% | | (4,480) | bps |
| | | | | | | | | | | | | | | | | | | |
Comparable Portfolio (3) | | | 217,166 | | | 52,295 | | 24.1% | | | 225,385 | | | 64,410 | | 28.6% | | (450) | bps |
| | | | | | | | | | | | | | | | | | | |
Add: Sold Hotel (4) | | | N/A | | | N/A | | N/A | | | 18,040 | | | 1,003 | | 5.6% | | N/A | |
| | | | | | | | | | | | | | | | | | | |
Actual Portfolio (5) | | $ | 217,166 | | $ | 52,295 | | 24.1% | | $ | 243,425 | | $ | 65,413 | | 26.9% | | N/A | |
*Footnotes on page 21
| ||||||||
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS | | Page 20 | ||||||
| | |
Supplemental Financial Information |
Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins
Q1 2024/2023 Footnotes
(1) | Hotel Adjusted EBITDAre for the first quarter of 2024 is impacted by renovation activity at Marriott Long Beach Downtown and The Confidante Miami Beach. In March 2024, operations at The Confidante Miami Beach were temporarily suspended to allow for extensive renovation work to be performed. The Company expects the resort to resume operations as Andaz Miami Beach in the fourth quarter of 2024. Adjusted EBITDAre for the first quarter of 2023 is impacted by renovation activity at The Westin Washington, DC Downtown. |
(2) | Comparable Portfolio, Excluding Renovation Hotel includes all hotels owned by the Company as of March 31, 2024, with the exception of The Confidante Miami Beach due to its renovation activity during the first quarter of 2024. |
(3) | Comparable Portfolio consists of all hotels owned by the Company as of March 31, 2024. |
(4) | Sold Hotel includes the Boston Park Plaza sold in October 2023. |
(5) | Actual Portfolio includes results for the 14 hotels and 15 hotels owned by the Company during the first quarters of 2024 and 2023, respectively. |
| ||||||||
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS | | Page 21 | ||||||
| | | ||||||