Financial

Sunstone Hotel Investors Reports Results For Second Quarter 2012

Comparable Hotel RevPAR increased 7.6% to $142.82. - Comparable Hotel EBITDA Margin increased by 110 basis points to 32.6%.

Sunstone

Sunstone Hotel Investors, Inc.  (NYSE: SHO) announced results for the second quarter ended June 30, 2012.

Second Quarter 2012 Operational Results (as compared to Second Quarter 2011)(1):

  • Comparable Hotel RevPAR increased 7.6% to $142.82.
  • Comparable Hotel EBITDA Margin increased by 110 basis points to 32.6%.
  • Adjusted EBITDA increased by 11.7% to $71.1 million.
  • Adjusted FFO per diluted share increased by 16.7% to $0.35.
  • Income available to common stockholders was $4.1 million (vs. $31.1 million in 2011).
  • Income available to common stockholders per diluted share was $0.03 (vs. $0.27 in 2011).

Ken Cruse, President and Chief Executive Officer, stated, "Our team continued to execute on our balanced business plan during the second quarter.  Proactive asset management helped to drive strong results, including a 7.6% increase in our Comparable Hotel RevPAR, a 110-basis-point improvement in our Comparable Hotel EBITDA Margins and a 16.7% increase in our Adjusted FFO per share.  Additionally, we took several steps toward our goal of gradually delevering our balance sheet while improving the quality and scale of our portfolio.  During the quarter, we repaid one mortgage, and we announced the pending sale of a highly levered hotel as well as the equity-funded acquisitions of two high-quality, unlevered urban hotels.  We will continue to pursue high-quality acquisitions using our shares as currency when such acquisitions can be executed at attractive relative valuations." 

Mr. Cruse continued, "Looking ahead, we continue to build a solid base for future growth. On a same-store basis, our managers booked more group room nights in the second quarter 2012 than in any other second quarter over the past five years.  In spite of difficult macroeconomic conditions, lodging industry fundamentals remain highly constructive, with capital costs and supply trends at record lows, and demand for lodging approaching record highs.  Accordingly, we continue to believe the U.S. lodging industry is in the first half of a prolonged growth phase and we remain focused on delivering industry leading stockholder returns through the continued execution of our balanced business plan." 

(1)

Comparable Hotel RevPAR and Comparable Hotel EBITDA Margin information presented reflect the Company's Comparable 31 Hotel Portfolio, which includes all hotels in which the Company has interests as of June 30, 2012, excluding the Marriott Del Mar, which has been classified as held for sale and included in discontinued operations due to its probable sale within the next year, and the Hyatt Chicago Magnificent Mile, which is currently experiencing material and prolonged business interruption due to rebranding and renovation. Comparable Hotel EBITDA Margin information excludes current and prior year real estate tax credits or assessments. The Comparable 31 Hotel Portfolio also includes prior ownership results as applicable in 2011 for the Doubletree Guest Suites Times Square acquired by the Company in January 2011, the JW Marriott New Orleans acquired by the Company in February 2011 and the Hilton San Diego Bayfront acquired by the Company in April 2011.

SELECTED FINANCIAL DATA

($ in millions, except RevPAR and per share amounts)

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2012

2011

% Change

2012

2011

% Change

Total Revenue

$   237.8

$   214.6

10.8%

$   438.9

$   369.9

18.6%

Comparable Hotel RevPAR

$ 142.82

$ 132.77

7.6%

$ 130.37

$ 122.30

6.6%

Comparable Hotel Occupancy

80.7%

77.9%

280 bps

77.3%

73.8%

350 bps

Comparable Hotel ADR

$ 176.98

$ 170.44

3.8%

$ 168.66

$ 165.72

1.8%

Comparable Hotel EBITDA Margin

32.6%

31.5%

110 bps

28.9%

27.7%

120 bps

Net income (loss)

$     11.9

$     38.9

$     (1.1)

$     90.3

Income available (loss attributable) to common stockholders

$       4.1

$     31.1

$   (16.9)

$     76.8

Income available (loss attributable) to common stockholders per diluted share

$     0.03

$     0.27

$   (0.14)

$     0.66

EBITDA 

$     67.4

$     92.2

$   109.1

$   190.3

Adjusted EBITDA 

$     71.1

$     63.7

$   114.3

$     96.1

FFO

$     38.7

$     49.7

$     51.6

$   124.5

Adjusted FFO

$     42.1

$     35.3

$     55.8

$     43.9

FFO per diluted share (1)

$     0.32

$     0.42

$     0.43

$     1.06

Adjusted FFO per diluted share (1)

$     0.35

$     0.30

$     0.47

$     0.37

(1)

Reflects the Series C convertible preferred stock on a "non-converted" basis. On an "as-converted" basis, FFO per diluted share is $0.32 and $0.42, respectively, for the three months ended June 30, 2012 and 2011, and $0.44 and $1.05, respectively, for the six months ended June 30, 2012 and 2011. On an "as-converted" basis, Adjusted FFO per diluted share is $0.35 and $0.30, respectively, for the three months ended June 30, 2012 and 2011, and $0.48 and $0.39, respectively, for the six months ended June 30, 2012 and 2011.

Disclosure regarding the non-GAAP financial measures in this release is included on pages 5 and 6. Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included on pages 9 through 13 of this release. 

The Company's actual results for the quarter ended June 30, 2012 compare to its prior guidance as follows:

Metric

Quarter Ended June 30, 2012   Guidance (1)

Impact of Acquisition / Equity Issuances(2)

Adjusted Quarter Ended June 30, 2012 Guidance(3)

Quarter Ended June 30, 2012 Actual

Performance Relative to Adjusted Guidance Midpoint

Comparable Hotel RevPAR 

+5.5% - 7.5%

-

+5.5% - 7.5%

+7.6%

+1.1%

Net Income ($ millions)

$8 - $11

$0.6

$9 - $12

$11.9

+$1.4

Adjusted EBITDA ($ millions)

$65 - $68

$0.9

$66 - $69

$71.1

+$3.6

Adjusted FFO ($ millions)

$36 - $39

$0.9

$37 - $40

$42.1

+$3.6

Adjusted FFO per diluted share

$0.30 - $0.33

-

$0.30 - $0.33

$0.35

+$0.04

Diluted Weighted Average Shares Outstanding

117,600,000

2,200,000

119,800,000

120,257,000

+457,000

 

 

(1)

Reflects guidance presented on May 2, 2012.

(2)

Reflects supplemental financial data presented in transaction press releases dated June 6, 2012 and June 19, 2012.

(3)

Reflects guidance presented on May 2, 2012 adjusted for acquisition and equity issuances.

Acquisitions Update

On July 19, 2012, the Company completed the previously announced acquisition of the 357-room Hilton Garden Inn Chicago Downtown/Magnificent Mile for a gross purchase price of $91.75 million. The acquisition was funded with a portion of the proceeds received from the Company's public offering of 12.1 million shares of its common stock (including the underwriter's exercise of its overallotment option). 

On June 4, 2012, the Company completed the previously announced acquisition of the 417-room Wyndham Chicago, which the Company rebranded the Hyatt Chicago Magnificent Mile. The contractual purchase price of $88.425 million consisted of a combination of cash and 5.5 million shares of the Company's common stock initially valued at $58.425 million ($10.71/share). Based on the $9.38 closing price of the Company's common stock on the NYSE on June 4, 2012, the total purchase price of the Wyndham Chicago hotel for accounting purposes was $81.16 million, which was funded with $29.7 million of cash on hand (including $0.3 million of proration credits) and the Company's common stock valued at $51.16 million, issued directly to the seller, the Blackstone Group.

Disposition Update

On June 6, 2012, the Company announced it had entered into a purchase-and-sale agreement to sell the 284-room Marriott Del Mar for a contractual purchase price of $66.0 million ($232,000/key). The sale of the hotel is subject to the buyer's assumption of the existing $47.2 million mortgage. The Company and the buyer are working to finalize the assumption with the loan's special servicer and expect to finalize the sale and loan assumption during the third quarter of 2012.

Balance Sheet/Liquidity Update

On April 26, 2012, the Company used existing cash to repay its $32.2 million non-recourse mortgage secured by the Renaissance Long Beach, which was scheduled to mature on July 1, 2012.

On June 25, 2012, the Company completed a public offering of 12.1 million shares of its common stock (including the underwriter's exercise of its overallotment option) for total net proceeds of approximately $126.2 million. A portion of the proceeds from this offering were used to acquire the Hilton Garden Inn Chicago Downtown/Magnificent Mile. The remaining proceeds will be used for potential future acquisitions, capital investment in the Company's portfolio, including the renovation of the Hyatt Chicago Magnificent Mile, and other general corporate purposes, including working capital.

As of June 30, 2012, the Company had approximately $277.9 million of cash and cash equivalents, including restricted cash of$73.3 million. As noted above, the Company used approximately $91.75 million of its unrestricted cash to purchase the Hilton Garden Inn Chicago Downtown/Magnificent Mile on July 19, 2012.

As of June 30, 2012, the Company had total assets of approximately $3.2 billion, including $2.8 billion of net investments in hotel properties, total consolidated debt related to continuing operations of $1.5 billion and stockholders' equity of $1.4 billion.

John Arabia, Chief Financial Officer, stated, "We continue to make meaningful progress towards our stated goals of reducing leverage in a shareholder friendly manner and maintaining strong liquidity, while, at the same time, growing our portfolio's quality and scale. Since January 2011, we have improved our leverage ratio though a combination of highly equitized acquisitions and the repayment or elimination of approximately $221 million of debt, including debt secured by the Marriott Del Mar which will be eliminated upon the hotel's anticipated sale during the third quarter of 2012.  Our liquidity is strong, our near-term debt maturities are few, and we have several avenues in which to achieve our stated goals of reducing leverage and creating shareholder value."

Capital Improvements

The Company invested $26.7 million in capital improvements into its portfolio during the second quarter of 2012, and $48.5 million during the six months ended June 30, 2012.

2012 Outlook

Achievement of the Company's anticipated results is subject to risks and uncertainties, including those disclosed in the Company's filings with the Securities and Exchange Commission.  The Company's guidance includes the Company's ownership period for all 2012 acquisitions and dispositions and does not take into account the impact of any future hotel acquisitions, dispositions, re-brandings or management change transition costs, prior-year property tax assessments and/or credits, potential income tax expense if the Company elects to apply net operating loss carryforwards, debt repurchases or financings during 2012.  

For the third quarter of 2012, the Company expects:

Metric

Quarter Ended September 30, 2012 Guidance

Comparable Hotel RevPAR 

+3% - 5%

Net Income ($ millions)

$1 - $4

Adjusted EBITDA ($ millions)

$57 - $60

Adjusted FFO ($ millions)

$28 - $31

Adjusted FFO per diluted share

$0.20 - $0.23

Diluted Weighted Average Shares Outstanding

135,700,000

For the full year 2012, the Company expects: 

Metric

Prior 2012 FY Guidance(1)

Impact of Acquisitions / Dispositions / Equity Issuances (2)

Adjusted Prior 2012 FY Guidance (3)

Current 2012 FY Guidance

Change to Adjusted Guidance Midpoint

Comparable Hotel RevPAR 

+5% - 7%

-

+5% - 7%

+5% - 7%

+0%

Net Income ($ millions)

$4 - $13

$3.9

$8 - $17

$15 - $22

+$6.0

Adjusted EBITDA ($ millions)

$229 - $238

$5.5

$235 - $244

$239 - $245

+$2.5

Adjusted FFO ($ millions)

$113 - $122

$6.8

$120 - $129

$123 - $130

+$2.0

Adjusted FFO per diluted share

$0.96 - $1.04

($0.02) - ($0.03)

$0.94 - $1.01

$0.97 - $1.02

+$0.02

Diluted Weighted Average Shares Outstanding

117,800,000

10,100,000

127,900,000

127,900,000

-

 

(1)

Reflects guidance presented on May 2, 2012.

(2)

Reflects supplemental financial data presented in transaction press releases dated June 6, 2012 and June 19, 2012.

(3)

Reflects guidance presented on May 2, 2012 adjusted for acquisitions, dispositions, and equity issuances.

 Third-quarter and full-year 2012 guidance is also based on the following assumptions:

  • Full-year capital investment of $85 to $100 million, including the $25 million renovation of the Renaissance Washington DC.
  • Hotel revenue renovation disruption of $3 to $5 million, primarily in the third and fourth quarters.
  • Third-quarter RevPAR guidance assumes that hotel revenue renovation disruption will negatively impact third-quarter RevPAR growth by 100 to 150 basis points.
  • Full-year comparable Hotel EBITDA Margins to increase by 75 to 125 basis points.
  • Full-year corporate overhead expense (excluding stock amortization and one-time expenses related to future acquisition closing costs) of $19 to $20 million.
  • Full-year interest expense of approximately $83 to $85 million, including $4 million in amortization of deferred financing fees.
  • Full-year preferred dividends (Series A, C and D) of approximately $30 million.

Dividend Update

On August 2, 2012, the Company's Board of Directors declared a cash dividend of $0.50 per share payable to its Series A and Series D cumulative redeemable preferred stockholders and a cash dividend of $0.393 per share payable to its Series C cumulative convertible redeemable preferred stockholders. The dividends will be paid on or before October 15, 2012 to stockholders of record on September 30, 2012.  No dividend was declared on the Company's common stock, as the Company intends to deploy excess cash flow from operations toward internal renovation investments and gradual deleveraging.

Subject to certain limitations, the Company intends to make dividends on its stock in amounts equivalent to 100% of its annual taxable income, which may be reduced through the application of net operating loss carryforwards. The level of any future dividends will be determined by the Company's Board of Directors after considering taxable income projections, expected capital requirements, risks affecting the Company's business and in context of the Company's leverage-reduction initiatives.  As a result, common stock dividends may be made in the form of cash or a combination of cash and stock consistent with Internal Revenue Service guidelines.

About Sunstone Hotel Investors, Inc.

Sunstone Hotel Investors, Inc. ("Sunstone") is a lodging real estate investment trust ("REIT") that, as of August 2, 2012, has interests in 33 hotels held for investment comprised of 13,698 rooms.  Sunstone's hotels are primarily in the upper upscale segment and are generally operated under nationally recognized brands, such as Marriott, Hilton, Hyatt, Fairmont and Sheraton. 

Sunstone's mission is to create meaningful value for our stockholders by becoming the premier hotel owner.  Our values include transparency, trust, ethical conduct, communication and discipline.  We seek to employ a balanced, cycle-appropriate corporate strategy that encompasses the following:

  • Proactive portfolio management;
  • Intensive asset management;
  • Disciplined external growth; and
  • Measured balance sheet improvement.

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: Earnings Before Interest Expense, Taxes, Depreciation and Amortization, or EBITDA; Adjusted EBITDA (as defined below); Funds From Operations, or FFO; Adjusted FFO (as defined below); and comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin.

EBITDA represents net income (loss) excluding: non-controlling interests; interest expense; provision for income taxes, including income taxes applicable to sale of assets; and depreciation and amortization. In addition, we have presented Adjusted EBITDA, which excludes: amortization of deferred stock compensation; the impact of any gain or loss from asset sales; impairment charges; and any other adjustments we have identified in this release. We believe EBITDA and Adjusted EBITDA are useful to investors in evaluating our operating performance because these measures help investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and 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 of net income (loss) to EBITDA and Adjusted EBITDA is set forth on page 9.  A reconciliation and the components of comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin are set forth on pages 12 and 13. We believe comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin are also useful to investors in evaluating our property-level operating performance.

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group. The Board of Governors of NAREIT in its March 1995 White Paper (as clarified in November 1999 and April 2002) defines FFO to mean net income (loss) (computed in accordance with GAAP), excluding non-controlling interests, gains and losses from sales of property, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs) and real estate-related impairment losses, and after adjustment for unconsolidated partnerships and joint ventures. We also present Adjusted FFO, which excludes penalties, written-off deferred financing costs, non-real estate-related impairment losses and any other adjustments we have identified in this release. We believe that the presentation of FFO and Adjusted FFO provide useful information to investors regarding our operating performance because they are measures of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items which we believe are not indicative of the performance of our underlying hotel properties.  We believe that these items are more representative of our asset base and our acquisition and disposition activities than our ongoing operations. We also use FFO as one measure in determining our results after taking into account the impact of our capital structure.  A reconciliation of net income (loss) to FFO and Adjusted FFO is set forth on page 9. 

The revenue and expense items associated with our commercial laundry facility, BuyEfficient and other miscellaneous non-hotel items have been excluded in presenting comparable and pro forma hotel EBITDA margins. Management believes the calculation of comparable and pro forma hotel EBITDA results in a more accurate presentation of hotel EBITDA margins of the Company's 31 comparable hotels and 33 pro forma hotels. See pages 12 and 13 for a reconciliation of comparable and pro forma hotel EBITDA to the most comparable GAAP measure. Our 31 comparable hotels include all hotels in which the Company has interests as of June 30, 2012, excluding the Marriott Del Mar, which has been classified as held for sale and included in discontinued operations due to its probable sale within the next year, and the Hyatt Chicago Magnificent Mile, which is currently experiencing material and prolonged business interruption due to rebranding and renovation, plus prior ownership results as applicable in 2011 for the Doubletree Guest Suites Times Square acquired by the Company in January 2011, the JW Marriott New Orleans acquired by the Company in February 2011, and the Hilton San Diego Bayfront acquired by the Company in April 2011. Our 33 pro forma hotels include the 31 comparable hotels, plus the Company's ownership as applicable and prior ownership for the Hyatt Chicago Magnificent Mile acquired by the Company in June 2012 and the Hilton Garden Inn Chicago Downtown/Magnificent Mile acquired by the Company in July 2012.

We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin should not be considered as an alternative measure of our net income (loss), operating performance, cash flow or liquidity. EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that EBITDA, Adjusted EBITDA, FFO, Adjusted FFO, comparable and pro forma hotel EBITDA and comparable and pro forma hotel EBITDA margin can enhance an investor's understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily a better indicator of any trend as compared to GAAP measures such as net income (loss) or cash flow from operations. In addition, you should be aware that adverse economic and market conditions may harm our cash flow.

For Additional Information:

Bryan Giglia 

Senior Vice President – Corporate Finance 

Sunstone Hotel Investors, Inc. 

(949) 382-3036

 

Sunstone Hotel Investors, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

June 30,

December 31,

2012

2011

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$      204,549

$         150,533

Restricted cash

73,306

66,230

Accounts receivable, net

36,259

32,127

Inventories

2,666

2,608

Prepaid expenses

9,382

10,189

Investment in hotel property of discontinued operations, net

39,122

38,958

Other current assets of discontinued operations, net

2,861

2,223

Total current assets

368,145

302,868

Investment in hotel properties, net

2,810,409

2,738,868

Other real estate, net

12,057

11,859

Deferred financing fees, net

12,622

14,594

Goodwill

13,088

13,088

Other assets, net

20,083

19,963

Total assets

$   3,236,404

$      3,101,240

Liabilities and Equity

Current liabilities:

Accounts payable and accrued expenses

$        25,509

$           26,800

Accrued payroll and employee benefits

18,662

20,863

Due to Third-Party Managers

9,252

9,227

Dividends payable

7,437

7,437

Other current liabilities

37,474

28,177

Current portion of notes payable

78,912

53,325

Note payable of discontinued operations

47,159

47,460

Other current liabilities of discontinued operations

224

342

Total current liabilities

224,629

193,631

Notes payable, less current portion

1,396,980

1,469,692

Capital lease obligations, less current portion

15,636

-

Other liabilities

13,810

12,623

Total liabilities

1,651,055

1,675,946

Commitments and contingencies

-

-

Preferred stock, Series C Cumulative Convertible Redeemable Preferred

Stock, $0.01 par value, 4,102,564 shares authorized, issued and

outstanding at June 30, 2012 and December 31, 2011, liquidation

preference of $24.375 per share

100,000

100,000

Equity:

Stockholders' equity:

Preferred stock, $0.01 par value, 100,000,000 shares authorized.

     8.0% Series A Cumulative Redeemable Preferred Stock,

          7,050,000 shares issued and outstanding at June 30, 2012 and December 31, 2011,

          stated at liquidation preference of $25.00 per share

176,250

176,250

     8.0% Series D Cumulative Redeemable Preferred Stock,

          4,600,000 shares issued and outstanding at June 30, 2012 and December 31, 2011,

          stated at liquidation preference of $25.00 per share

115,000

115,000

Common stock, $0.01 par value, 500,000,000 shares authorized,

      135,229,303 shares issued and outstanding at June 30, 2012 and

      117,265,090 shares issued and outstanding at December 31, 2011

1,352

1,173

Additional paid in capital

1,491,639

1,312,566

Retained earnings

108,600

110,580

Cumulative dividends

(460,270)

(445,396)

Accumulated other comprehensive loss

(4,799)

(4,916)

Total stockholders' equity

1,427,772

1,265,257

Non-controlling interest in consolidated joint ventures

57,577

60,037

Total equity

1,485,349

1,325,294

Total liabilities and equity

$   3,236,404

$      3,101,240

 

 

Sunstone Hotel Investors, Inc.

Unaudited Consolidated Statements of Operations

(In thousands, except per share data)

 Three Months Ended June 30, 

 Six Months Ended June 30, 

2012

2011

2012

2011

 Revenues 

 Room 

$   164,398

$   148,140

$   298,536

$   252,451

 Food and beverage 

56,202

49,786

106,534

87,820

 Other operating 

17,240

16,648

33,803

29,654

 Total revenues 

237,840

214,574

438,873

369,925

 Operating expenses 

 Room 

38,958

35,296

75,806

63,809

 Food and beverage 

37,169

35,136

72,908

63,855

 Other operating 

6,618

6,101

13,412

11,943

 Advertising and promotion 

11,135

10,190

22,043

18,589

 Repairs and maintenance 

8,642

8,080

17,090

15,171

 Utilities 

6,845

7,089

13,998

13,797

 Franchise costs 

8,320

7,396

14,967

12,558

 Property tax, ground lease and insurance 

18,338

14,316

34,851

28,092

 Property general and administrative 

26,565

24,515

51,256

44,031

 Corporate overhead 

7,686

6,305

12,983

13,958

 Depreciation and amortization 

34,793

32,287

69,079

58,155

 Total operating expenses 

205,069

186,711

398,393

343,958

 Operating income 

32,771

27,863

40,480

25,967

 Equity in earnings of unconsolidated joint ventures

-

-

-

21

 Interest and other income 

74

1,319

137

1,427

 Interest expense 

(20,873)

(20,462)

(41,691)

(37,560)

 Loss on extinguishment of debt 

-

-

(191)

-

 Gain on remeasurement of equity interests 

-

-

-

69,230

 Income (loss) from continuing operations 

11,972

8,720

(1,265)

59,085

 Income (loss) from discontinued operations 

(117)

30,209

152

31,179

 Net income (loss) 

11,855

38,929

(1,113)

90,264

 Income from consolidated joint venture attributable to non-controlling interest 

(307)

(244)

(867)

(244)

 Distributions to non-controlling interest 

(8)

(7)

(16)

(14)

 Preferred stock dividends 

(7,437)

(7,310)

(14,874)

(12,447)

 Undistributed income allocated to unvested restricted stock compensation 

(47)

(291)

-

(717)

 Income available (loss attributable) to common stockholders 

$       4,056

$     31,077

$   (16,870)

$     76,842

Basic per share amounts:

        Income (loss) from continuing operations available (attributable) to common stockholders

$         0.03

$         0.01

$       (0.14)

$         0.39

        Income from discontinued operations

-

0.26

-

0.27

Basic income available (loss attributable) to common stockholders per common share

$         0.03

$         0.27

$       (0.14)

$         0.66

Diluted per share amounts:

        Income (loss) from continuing operations available (attributable) to common stockholders

$         0.03

$         0.01

$       (0.14)

$         0.39

        Income from discontinued operations

-

0.26

0.00

0.27

Diluted income available (loss attributable) to common stockholders per common share

$         0.03

$         0.27

$       (0.14)

$         0.66

Weighted average common shares outstanding:

       Basic

120,029

117,227

118,728

117,151

       Diluted

120,029

117,227

118,728

117,151

 

 

Sunstone Hotel Investors, Inc.

Reconciliation of Net Income (Loss) to Non-GAAP Financial Measures

(Unaudited and in thousands, except per share amounts)

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

Three Months Ended

Six Months Ended

June 30,

June 30,

2012

2011

2012

2011

Net income (loss)

$   11,855

$   38,929

$     (1,113)

$   90,264

Operations held for investment:

   Depreciation and amortization

34,793

32,287

69,079

58,155

   Amortization of lease intangibles

1,028

992

2,056

1,922

   Interest expense

19,230

18,432

38,743

34,616

   Amortization of deferred financing fees

959

809

1,922

1,418

   Write-off of deferred financing fees

3

-

3

-

   Non-cash interest related to discount on Senior Notes

258

261

524

522

   Non-cash interest related to loss on derivatives

423

960

499

1,004

Non-controlling interests:

   Income from consolidated joint venture attributable

   to non-controlling interest

(307)

(244)

(867)

(244)

   Depreciation and amortization

(1,420)

(1,184)

(2,839)

(1,184)

   Interest expense

(567)

(456)

(1,137)

(456)

   Amortization of deferred financing fees

(56)

(47)

(112)

(47)

   Non-cash interest related to loss on derivative

-

(28)

(1)

(28)

Unconsolidated joint ventures:

   Depreciation and amortization

-

-

-

3

Discontinued operations:

   Depreciation and amortization

495

630

965

2,677

   Amortization of lease intangibles

7

7

14

14

   Interest expense

680

845

1,361

1,684

   Amortization of deferred financing fees

3

6

7

13

EBITDA

67,384

92,19



Logos, product and company names mentioned are the property of their respective owners.