UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 7, 2024
Sunstone Hotel Investors, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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Maryland |
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001-32319 |
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20-1296886 |
(State or Other Jurisdiction of |
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(Commission File Number) |
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(I.R.S. Employer |
15 Enterprise, Suite 200 |
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92656 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(949) 330-4000
(Registrant’s telephone number including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: |
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Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
Common Stock, $0.01 par value |
SHO |
New York Stock Exchange |
Series H Cumulative Redeemable Preferred Stock, $0.01 par value |
SHO.PRH |
New York Stock Exchange |
Series I Cumulative Redeemable Preferred Stock, $0.01 par value |
SHO.PRI |
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company |
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Item 2.02.Results of Operations and Financial Condition.
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻ On August 7, 2024, Sunstone Hotel Investors, Inc. (the “Company”) issued a press release regarding its financial results for the second quarter ended June 30, 2024. The press release referred to supplemental financial information that is available on the Company’s website, free of charge, at www.sunstonehotels.com. A copy of the press release and the supplemental financial information are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by this reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01.Financial Statements and Exhibits.
(d) The following exhibits are furnished herewith:
EXHIBIT INDEX
Exhibit No. |
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Description |
99.1 |
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99.2 |
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Supplemental Financial Information for the second quarter ended June 30, 2024. |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Sunstone Hotel Investors, Inc. |
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Date: August 7, 2024 |
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By: |
/s/ Aaron R. Reyes |
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Aaron R. Reyes |
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Exhibit 99.1
For Additional Information:
Aaron Reyes
Sunstone Hotel Investors, Inc.
(949) 382-3018
SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR SECOND QUARTER 2024
ALISO VIEJO, CA – August 7, 2024 – Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO) today announced results for the second quarter ended June 30, 2024.
Second Quarter 2024 Operational Results (as compared to Second Quarter 2023):
● | Net Income: Net income was $26.1 million as compared to $43.1 million. |
● | Comparable RevPAR: Comparable RevPAR decreased 2.0% to $232.59. The average daily rate was $322.60 and occupancy was 72.1%. Excluding The Confidante Miami Beach as it transitions to Andaz Miami Beach, RevPAR increased 0.4%. Excluding The Confidante Miami Beach and the Marriott Long Beach Downtown, which was also under renovation in the second quarter of 2024, RevPAR increased 2.1%. |
● | Adjusted EBITDAre: Adjusted EBITDAre decreased 13.6% to $73.5 million. |
● | Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share decreased 15.2% to $0.28. |
Information regarding the non-GAAP financial measures disclosed in this release is provided below in “Non-GAAP Financial Measures.” Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included later in this release.
Bryan A. Giglia, Chief Executive Officer, stated, “We generated second quarter earnings that were consistent with our expectations despite less robust RevPAR growth, as we were able to deliver stronger out-of-room spend and were successful in driving efficiencies and cost reductions across our portfolio. We continue to benefit from our recent investment at The Westin Washington, DC Downtown which produced record earnings in the quarter. We were also encouraged by growing demand for business travel in several of our markets including Boston and San Francisco. While overall leisure demand remains strong, the recovery in Maui has been slower, which has led to lower revenue growth and earnings expectations, primarily in the third quarter, and which is reflected in our updated guidance ranges.”
Mr. Giglia continued, “We remain focused on positioning Sunstone for outsized growth as we move into 2025 and beyond. The renovation and rebranding of our Marriott Long Beach Downtown is now complete, the finished product looks exceptional, and we look forward to seeing the growth in earnings going forward. Work is continuing on the transformation of Andaz Miami Beach, which we expect to debut by the end of the year and further contribute to earnings growth in the years to come. We retain the remaining proceeds from the sale of Boston Park Plaza, which we can use to generate shareholder value through hotel acquisitions or the repurchase of our stock.
1
Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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Net Income |
$ |
26.1 |
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$ |
43.1 |
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(39.3) |
% |
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$ |
39.2 |
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$ |
64.2 |
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(38.9) |
% |
Income Attributable to Common Stockholders per Diluted Share |
$ |
0.11 |
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$ |
0.19 |
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(42.1) |
% |
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$ |
0.16 |
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$ |
0.27 |
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(40.7) |
% |
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Comparable Operating Statistics (1) |
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RevPAR |
$ |
232.59 |
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$ |
237.37 |
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(2.0) |
% |
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$ |
224.68 |
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$ |
232.89 |
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(3.5) |
% |
Occupancy |
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72.1 |
% |
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74.3 |
% |
(220) |
bps |
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70.5 |
% |
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72.6 |
% |
(210) |
bps |
Average Daily Rate |
$ |
322.60 |
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$ |
319.48 |
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1.0 |
% |
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$ |
318.70 |
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$ |
320.78 |
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(0.6) |
% |
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Comparable Operating Statistics, excluding The Confidante Miami Beach |
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RevPAR |
$ |
241.96 |
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$ |
240.99 |
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0.4 |
% |
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$ |
232.19 |
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$ |
232.53 |
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(0.1) |
% |
Occupancy |
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75.0 |
% |
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74.9 |
% |
10 |
bps |
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72.7 |
% |
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72.5 |
% |
20 |
bps |
Average Daily Rate |
$ |
322.61 |
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$ |
321.75 |
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0.3 |
% |
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$ |
319.38 |
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$ |
320.73 |
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(0.4) |
% |
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Comparable Adjusted EBITDAre Margin, excluding The Confidante Miami Beach |
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30.9 |
% |
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32.3 |
% |
(140) |
bps |
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28.3 |
% |
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30.7 |
% |
(240) |
bps |
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Adjusted EBITDAre |
$ |
73.5 |
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$ |
85.1 |
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(13.6) |
% |
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$ |
128.0 |
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$ |
145.1 |
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(11.8) |
% |
Adjusted FFO Attributable to Common Stockholders |
$ |
56.6 |
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$ |
67.4 |
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(16.0) |
% |
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$ |
94.1 |
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$ |
111.2 |
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(15.3) |
% |
Adjusted FFO Attributable to Common Stockholders per Diluted Share |
$ |
0.28 |
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$ |
0.33 |
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(15.2) |
% |
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$ |
0.46 |
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$ |
0.54 |
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(14.8) |
% |
(1) | Comparable operating statistics presented in this release include all 15 hotels owned by the Company at June 30, 2024, and include both prior ownership results and the Company's results for the Hyatt Regency San Antonio Riverwalk, acquired by the Company in April 2024. |
Recent Developments
Stock Repurchase Program. From the start of the second quarter of 2024 through August 6, 2024, the Company repurchased 698,043 shares of its common stock at an average purchase price of $9.90 per share for a total repurchase amount before expenses of $6.9 million. The average purchase price per share represents a substantial discount to consensus estimates of net asset value and implies a highly attractive valuation multiple on the Company’s stabilized cash flow. The Company currently has $447.8 million remaining under its existing stock repurchase program authorization.
Balance Sheet and Liquidity Update
As of June 30, 2024, the Company had $234.0 million of cash and cash equivalents, including restricted cash of $74.9 million, total assets of $3.1 billion, including $2.8 billion of net investments in hotel properties, total debt of $818.0 million and stockholders’ equity of $2.2 billion.
Capital Investments Update
During the second quarter of 2024, the Company invested $41.0 million into its portfolio. The majority of the investment consisted of the transformational renovation and conversion of The Confidante Miami Beach to Andaz Miami Beach, which is expected to debut late in the fourth quarter of 2024. During the second quarter, the Company substantially completed the remaining renovation work on its newly converted Marriott Long Beach Downtown. The Company currently expects to invest approximately $135 million to $155 million into its portfolio in 2024, with the majority of the investment relating to the conversions of Andaz Miami Beach and the Marriott Long Beach Downtown and a soft goods renovation at Wailea Beach Resort.
2
2024 Outlook
The Company’s updated full year guidance is impacted by a slower than anticipated recovery in Maui, primarily during the third quarter, and the completion of the renovation work at the recently converted Marriott Long Beach Downtown, which impacted results in the second quarter and extended into the start of the third quarter. For the full year 2024, the Company expects:
Metric ($ in millions, except per share data) |
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Prior |
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Current |
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Change in |
Net Income |
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$56 to $77 |
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$55 to $65 |
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- $6 |
Total Portfolio RevPAR Growth (3) |
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+ 2.25% to + 5.25% |
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- 0.25% to + 1.75% |
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- 300 bps |
Total Portfolio RevPAR Growth, excluding The Confidante Miami Beach (3) |
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+ 4.75% to + 7.75% |
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+ 2.25% to + 4.25% |
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- 300 bps |
Adjusted EBITDAre |
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$242 to $263 |
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$242 to $252 |
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- $6 |
Adjusted FFO Attributable to Common Stockholders |
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$171 to $192 |
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$173 to $183 |
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- $4 |
Adjusted FFO Attributable to Common Stockholders per Diluted Share |
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$0.84 to $0.94 |
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$0.85 to $0.90 |
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- $0.01 |
Diluted Weighted Average Shares Outstanding |
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204,500,000 |
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204,000,000 |
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- 500,000 |
(1) | Reflects guidance presented on May 6, 2024. |
(2) | Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. |
(3) | RevPAR Growth reflects comparison to full year 2023. |
Full year 2024 guidance is based in part on the following full year assumptions:
● | Full year total Adjusted EBITDAre displacement of approximately $15 million to $16 million in connection with planned capital investments, an increase of $1.5 million relative to the Company’s prior estimate. The increase is the result of the completion of the renovation and conversion of the Marriott Long Beach Downtown, which was previously expected to be completed in the second quarter of 2024 but extended into the start of the third quarter. |
● | Full year interest income of approximately $11 million to $12 million, an increase of $1 million relative to the Company’s prior estimate. |
● | Full year corporate overhead expense (excluding deferred stock amortization) of approximately $21 million to $22 million. |
● | Full year interest expense of approximately $49 million to $52 million, including approximately $3 million in amortization of deferred financing costs, and a $2 million noncash reduction to interest expense from derivatives. Excluding the noncash interest from derivatives, the updated range is $1 million lower than the Company’s prior estimate. |
● | Full year preferred stock dividends of approximately $15 million to $16 million, which includes the Series G, H and I cumulative redeemable preferred stock. |
● | The Confidante Miami Beach is expected to reopen as Andaz Miami Beach by the end of the fourth quarter of 2024, and the Company currently anticipates that the resort will generate an EBITDAre loss of approximately $3 million to $5 million, excluding pre-opening and certain capitalized costs, in 2024 as the comprehensive transformation is completed. |
Dividend Update
The Company’s Board of Directors has authorized a cash dividend of $0.09 per share of its common stock, as well as cash dividends of $0.382813 per share payable to its Series H cumulative redeemable preferred stockholders and $0.356250 per share payable to its Series I cumulative redeemable preferred stockholders. The dividends will be paid on October 15, 2024 to stockholders of record as of September 30, 2024.
The Company currently expects to continue to pay a quarterly cash common dividend throughout 2024. Consistent with the Company’s past practice, and to the extent that the expected regular quarterly dividends for 2024 do not satisfy its annual distribution requirements, the Company may pay an additional dividend amount in January 2025. The level of any future quarterly dividends will be determined by the Company’s board of directors after considering long-term operating projections, expected capital requirements and risks affecting the Company’s business.
Supplemental Disclosures
Contemporaneous with this release, the Company has furnished a Form 8-K with unaudited financial information. This additional information is being provided as a supplement to the information in this release and other filings with the SEC. The Company has no obligation to update any of the information provided to conform to actual results or changes in the Company’s portfolio, capital structure or future expectations.
3
Earnings Call
The Company will host a conference call to discuss second quarter results on August 7, 2024, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time). A live webcast of the call will be available via the Investor Relations section of the Company’s website at www.sunstonehotels.com. Alternatively, interested parties may dial 1-800-715-9871 and reference conference ID 1026321 to listen to the live call. A replay of the webcast 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 of this release owns 15 hotels comprised of 7,255 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. For further information, please visit Sunstone’s website at www.sunstonehotels.com. The Company’s website is provided as a reference only and any information on the website is not incorporated by reference in this release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will” and other similar terms and phrases, including opinions, references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: we own upper upscale and luxury hotels located in urban and resort destinations in an industry that is highly competitive; events beyond our control, including economic slowdowns or recessions, pandemics, natural disasters, civil unrest and terrorism; inflation adversely affecting our financial condition and results of operations; system security risks, data protection breaches, cyber-attacks and systems integration issues, including those impacting the Company’s suppliers, hotel managers or franchisors; a significant portion of our hotels are geographically concentrated so we may be disproportionately harmed by economic conditions, competition, new hotel supply, real and personal property tax rates or natural disasters in these areas of the country; we face possible risks associated with the physical and transitional effects of climate change; uninsured or underinsured losses could harm our financial condition; the operating results of some of our hotels are significantly reliant upon group and transient business generated by large corporate customers, and the loss of such customers for any reason could harm our operating results; the increased use of virtual meetings and other similar technologies could lessen the need for business-related travel, and, therefore, demand for rooms in our hotels may be adversely affected; our hotels require ongoing capital investment and we may incur significant capital expenditures in connection with acquisitions, repositionings and other improvements, some of which are mandated by applicable laws or regulations or agreements with third parties, and the costs of such renovations, repositionings or improvements may exceed our expectations or cause other problems; delays in the acquisition, renovation or repositioning of hotel properties may have adverse effects on our results of operations and returns to our stockholders; accounting for the acquisition of a hotel property or other entity involves assumptions and estimations to determine fair value that could differ materially from the actual results achieved in future periods; volatility in the debt and equity markets may adversely affect our ability to acquire, renovate, refinance or sell our hotels; we may pursue joint venture investments that could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturer; we may be subject to unknown or contingent liabilities related to recently sold or acquired hotels, as well as hotels we may sell or acquire in the future; we may seek to acquire a portfolio of hotels or a company, which could present more risks to our business and financial results than the acquisition of a single hotel; the sale of a hotel or portfolio of hotels is typically subject to contingencies, risks and uncertainties, any of which may cause us to be unsuccessful in completing the disposition; the illiquidity of real estate investments and the lack of alternative uses of hotel properties could significantly limit our ability to respond to adverse changes in the performance of our hotels; we may issue or invest in hotel loans, including subordinated or mezzanine loans, which could involve greater risks of loss than senior loans secured by income-producing real properties; if we make or invest in mortgage loans with the intent of gaining ownership of the hotel secured by or pledged to the loan, our ability to perfect an ownership interest in the hotel is subject to the sponsor’s willingness to forfeit the property in lieu of the debt; one of our hotels is subject to a ground lease with an unaffiliated party, the termination of which by the lessor for any reason, including due to our default on the lease, could cause us to lose the ability to operate the hotel altogether and may adversely affect our results of operations; because we are a REIT, we depend on third-parties to operate our hotels; we are subject to risks associated with our operators’ employment of hotel personnel; most of our hotels operate under a brand owned by Marriott, Hyatt, Hilton, Four Seasons or Montage, and should any of these brands experience a negative event, or receive negative publicity, our operating results may be harmed; our franchisors and brand managers may adopt new policies or change existing policies which could result in increased costs that could negatively impact our hotels; future adverse litigation judgments or settlements resulting from legal proceedings could have an adverse effect on our financial condition; claims by persons regarding our properties could affect the attractiveness of our hotels or cause us to incur additional expenses; the hotel business is seasonal and seasonal variations in business volume at our hotels will cause quarterly fluctuations in our revenue and operating results; changes in the debt and equity markets may adversely affect the value of our hotels; certain of our hotels have in the past become impaired and additional hotels may become impaired in the future; laws and governmental regulations may restrict the ways in which we use our hotel properties and increase the cost of compliance with such regulations, and noncompliance with such regulations could subject us to penalties, loss of value of our properties or civil damages; corporate responsibility, specifically related to environmental sustainability, social responsibility and corporate governance, or ESG, factors and commitments, may impose additional costs and expose us to new risks that could adversely affect our results of operations, financial condition and cash flows; our franchisors and brand managers may require us to make capital expenditures pursuant to property improvement plans or to comply with brand standards; termination of any of our franchise, management or operating lease agreements could cause us to lose business or lead to a default or acceleration of our obligations under certain of our debt instruments; the growth of alternative reservation channels could adversely affect our business and profitability; the failure of tenants in our hotels to make rent payments or otherwise comply with the material terms of our retail and restaurant leases may adversely affect our results of operations; we rely on our corporate and hotel senior management teams, the loss of whom may cause us to incur costs and harm our business; we could be harmed by inadvertent errors, misconduct or fraud that is difficult to detect; if we fail to maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or identify and prevent fraud; we have outstanding debt which may restrict our financial flexibility; certain of our debt is subject to variable interest rates, which creates uncertainty in the amount of interest expense we will incur in the future and may negatively impact our operating results; our stock repurchase program may not enhance long-term stockholder value, could cause volatility in the price of our common and preferred stock and could diminish our cash reserves; and other risks and uncertainties associated with the Company’s business described in its filings with the Securities and Exchange Commission.
4
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 provided herein is as of the date of this release, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
This release should be read 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.
Non-GAAP Financial Measures
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.
5
Our presentation of FFO attributable to common stockholders conforms to Nareit’s 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.
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, and management transition costs; pre-opening costs associated with extensive renovation projects such as the work being performed at The Confidante Miami Beach; 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 release.
6
Sunstone Hotel Investors, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|
June 30, |
|
December 31, |
||
|
|
2024 |
|
2023 |
||
|
|
(unaudited) |
|
|
||
Assets |
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
2,838,560 |
|
$ |
2,585,279 |
Operating lease right-of-use assets, net |
|
|
10,483 |
|
|
12,755 |
Cash and cash equivalents |
|
|
159,151 |
|
|
426,403 |
Restricted cash |
|
|
74,853 |
|
|
67,295 |
Accounts receivable, net |
|
|
37,793 |
|
|
31,206 |
Prepaid expenses and other assets, net |
|
|
28,897 |
|
|
26,383 |
Total assets |
|
$ |
3,149,737 |
|
$ |
3,149,321 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Debt, net of unamortized deferred financing costs |
|
$ |
814,263 |
|
$ |
814,559 |
Operating lease obligations |
|
|
14,345 |
|
|
16,735 |
Accounts payable and accrued expenses |
|
|
57,103 |
|
|
48,410 |
Dividends and distributions payable |
|
|
22,987 |
|
|
29,965 |
Other liabilities |
|
|
76,112 |
|
|
73,014 |
Total liabilities |
|
|
984,810 |
|
|
982,683 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
Preferred stock, $0.01 par value, 100,000,000 shares authorized: |
|
|
|
|
|
|
Series G Cumulative Redeemable Preferred Stock, 2,650,000 shares issued and outstanding at both June 30, 2024 and December 31, 2023, stated at liquidation preference of $25.00 per share |
|
|
66,250 |
|
|
66,250 |
6.125% Series H Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at both June 30, 2024 and December 31, 2023, stated at liquidation preference of $25.00 per share |
|
|
115,000 |
|
|
115,000 |
5.70% Series I Cumulative Redeemable Preferred Stock, 4,000,000 shares issued and outstanding at both June 30, 2024 and December 31, 2023, stated at liquidation preference of $25.00 per share |
|
|
100,000 |
|
|
100,000 |
Common stock, $0.01 par value, 500,000,000 shares authorized, 203,390,392 shares issued and outstanding at June 30, 2024 and 203,479,585 shares issued and outstanding at December 31, 2023 |
|
|
2,034 |
|
|
2,035 |
Additional paid in capital |
|
|
2,415,764 |
|
|
2,416,417 |
Distributions in excess of retained earnings |
|
|
(534,121) |
|
|
(533,064) |
Total stockholders' equity |
|
|
2,164,927 |
|
|
2,166,638 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
3,149,737 |
|
$ |
3,149,321 |
7
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, |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
|
|
|
||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
151,296 |
|
$ |
173,399 |
|
$ |
287,111 |
|
$ |
325,837 |
Food and beverage |
|
|
71,367 |
|
|
78,815 |
|
|
132,706 |
|
|
149,627 |
Other operating |
|
|
24,818 |
|
|
23,898 |
|
|
44,830 |
|
|
44,091 |
Total revenues |
|
|
247,481 |
|
|
276,112 |
|
|
464,647 |
|
|
519,555 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
37,345 |
|
|
42,658 |
|
|
72,896 |
|
|
81,722 |
Food and beverage |
|
|
47,742 |
|
|
51,997 |
|
|
92,057 |
|
|
100,532 |
Other operating |
|
|
6,394 |
|
|
6,145 |
|
|
12,338 |
|
|
11,902 |
Advertising and promotion |
|
|
12,974 |
|
|
13,897 |
|
|
25,106 |
|
|
26,919 |
Repairs and maintenance |
|
|
8,979 |
|
|
9,606 |
|
|
17,689 |
|
|
19,052 |
Utilities |
|
|
6,295 |
|
|
6,768 |
|
|
12,239 |
|
|
13,860 |
Franchise costs |
|
|
4,819 |
|
|
4,560 |
|
|
9,024 |
|
|
8,478 |
Property tax, ground lease and insurance |
|
|
19,984 |
|
|
19,378 |
|
|
38,909 |
|
|
38,611 |
Other property-level expenses |
|
|
28,120 |
|
|
31,857 |
|
|
55,743 |
|
|
63,634 |
Corporate overhead |
|
|
8,168 |
|
|
8,396 |
|
|
15,686 |
|
|
16,864 |
Depreciation and amortization |
|
|
31,112 |
|
|
32,397 |
|
|
60,152 |
|
|
64,739 |
Total operating expenses |
|
|
211,932 |
|
|
227,659 |
|
|
411,839 |
|
|
446,313 |
Interest and other income |
|
|
3,503 |
|
|
4,639 |
|
|
8,956 |
|
|
5,180 |
Interest expense |
|
|
(12,693) |
|
|
(9,223) |
|
|
(23,703) |
|
|
(23,017) |
Gain on sale of assets, net |
|
|
— |
|
|
— |
|
|
457 |
|
|
— |
Gain on extinguishment of debt |
|
|
38 |
|
|
12 |
|
|
59 |
|
|
9,921 |
Income before income taxes |
|
|
26,397 |
|
|
43,881 |
|
|
38,577 |
|
|
65,326 |
Income tax (provision) benefit, net |
|
|
(255) |
|
|
(803) |
|
|
600 |
|
|
(1,161) |
Net income |
|
|
26,142 |
|
|
43,078 |
|
|
39,177 |
|
|
64,165 |
Preferred stock dividends |
|
|
(3,683) |
|
|
(3,768) |
|
|
(7,366) |
|
|
(7,536) |
Income attributable to common stockholders |
|
$ |
22,459 |
|
$ |
39,310 |
|
$ |
31,811 |
|
$ |
56,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income attributable to common stockholders per common share |
|
$ |
0.11 |
|
$ |
0.19 |
|
$ |
0.16 |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding |
|
|
202,758 |
|
|
206,181 |
|
|
202,695 |
|
|
206,606 |
Diluted weighted average common shares outstanding |
|
|
203,455 |
|
|
206,828 |
|
|
203,227 |
|
|
207,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per common share |
|
$ |
0.09 |
|
$ |
0.05 |
|
$ |
0.16 |
|
$ |
0.10 |
8
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited and in thousands)
Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
|
2023 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
26,142 |
|
$ |
43,078 |
|
$ |
39,177 |
|
$ |
64,165 |
Depreciation and amortization |
|
|
31,112 |
|
|
32,397 |
|
|
60,152 |
|
|
64,739 |
Interest expense |
|
|
12,693 |
|
|
9,223 |
|
|
23,703 |
|
|
23,017 |
Income tax provision (benefit), net |
|
|
255 |
|
|
803 |
|
|
(600) |
|
|
1,161 |
Gain on sale of assets, net |
|
|
— |
|
|
— |
|
|
(457) |
|
|
— |
EBITDAre |
|
|
70,202 |
|
|
85,501 |
|
|
121,975 |
|
|
153,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation |
|
|
3,181 |
|
|
3,325 |
|
|
5,951 |
|
|
5,752 |
Amortization of right-of-use assets and obligations |
|
|
(107) |
|
|
(17) |
|
|
(118) |
|
|
(69) |
Amortization of contract intangibles, net |
|
|
— |
|
|
(18) |
|
|
— |
|
|
(36) |
Gain on extinguishment of debt |
|
|
(38) |
|
|
(12) |
|
|
(59) |
|
|
(9,921) |
Gain on insurance recoveries |
|
|
(314) |
|
|
(3,722) |
|
|
(314) |
|
|
(3,722) |
Pre-opening costs |
|
|
599 |
|
|
— |
|
|
599 |
|
|
— |
Adjustments to EBITDAre, net |
|
|
3,321 |
|
|
(444) |
|
|
6,059 |
|
|
(7,996) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAre |
|
$ |
73,523 |
|
$ |
85,057 |
|
$ |
128,034 |
|
$ |
145,086 |
9
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited and in thousands, except per share data)
Reconciliation of Net Income to FFO Attributable to Common Stockholders and
Adjusted FFO Attributable to Common Stockholders
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
|
2023 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
26,142 |
|
$ |
43,078 |
|
$ |
39,177 |
|
$ |
64,165 |
Preferred stock dividends |
|
|
(3,683) |
|
|
(3,768) |
|
|
(7,366) |
|
|
(7,536) |
Real estate depreciation and amortization |
|
|
30,771 |
|
|
32,240 |
|
|
59,526 |
|
|
64,431 |
Gain on sale of assets, net |
|
|
— |
|
|
— |
|
|
(457) |
|
|
— |
FFO attributable to common stockholders |
|
|
53,230 |
|
|
71,550 |
|
|
90,880 |
|
|
121,060 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation |
|
|
3,181 |
|
|
3,325 |
|
|
5,951 |
|
|
5,752 |
Real estate amortization of right-of-use assets and obligations |
|
|
(130) |
|
|
(128) |
|
|
(252) |
|
|
(247) |
Amortization of contract intangibles, net |
|
|
287 |
|
|
85 |
|
|
518 |
|
|
168 |
Noncash interest on derivatives, net |
|
|
(189) |
|
|
(3,711) |
|
|
(2,231) |
|
|
(1,879) |
Gain on extinguishment of debt |
|
|
(38) |
|
|
(12) |
|
|
(59) |
|
|
(9,921) |
Gain on insurance recoveries |
|
|
(314) |
|
|
(3,722) |
|
|
(314) |
|
|
(3,722) |
Pre-opening costs |
|
|
599 |
|
|
— |
|
|
599 |
|
|
— |
Prior year income tax benefit, net |
|
|
— |
|
|
— |
|
|
(948) |
|
|
— |
Adjustments to FFO attributable to common stockholders, net |
|
|
3,396 |
|
|
(4,163) |
|
|
3,264 |
|
|
(9,849) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders |
|
$ |
56,626 |
|
$ |
67,387 |
|
$ |
94,144 |
|
$ |
111,211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common stockholders per diluted share |
|
$ |
0.26 |
|
$ |
0.35 |
|
$ |
0.45 |
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders per diluted share |
|
$ |
0.28 |
|
$ |
0.33 |
|
$ |
0.46 |
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
202,758 |
|
|
206,181 |
|
|
202,695 |
|
|
206,606 |
Shares associated with unvested restricted stock awards |
|
|
932 |
|
|
733 |
|
|
820 |
|
|
659 |
Diluted weighted average shares outstanding |
|
|
203,690 |
|
|
206,914 |
|
|
203,515 |
|
|
207,265 |
10
Sunstone Hotel Investors, Inc.
Reconciliation of Net Income to Non-GAAP Financial Measures
Guidance for Full Year 2024
(Unaudited and in thousands, except for per share amounts)
Reconciliation of Net Income to Adjusted EBITDAre
|
|
Year Ended |
||||
|
|
December 31, 2024 |
||||
|
|
|
Low |
|
|
High |
|
|
|
|
|
|
|
Net income |
|
$ |
54,600 |
|
$ |
64,600 |
Depreciation and amortization |
|
|
123,000 |
|
|
123,000 |
Interest expense |
|
|
50,500 |
|
|
50,500 |
Income tax provision, net |
|
|
200 |
|
|
200 |
Amortization of deferred stock compensation |
|
|
11,000 |
|
|
11,000 |
Pre-opening costs |
|
|
4,000 |
|
|
4,000 |
Other items |
|
|
(800) |
|
|
(800) |
Gain on sale of assets, net |
|
|
(500) |
|
|
(500) |
Adjusted EBITDAre |
|
$ |
242,000 |
|
$ |
252,000 |
Reconciliation of Net Income to Adjusted FFO Attributable to Common Stockholders
|
|
Year Ended |
||||
|
|
December 31, 2024 |
||||
|
|
|
Low |
|
|
High |
|
|
|
|
|
|
|
Net income |
|
$ |
54,600 |
|
$ |
64,600 |
Preferred stock dividends |
|
|
(15,500) |
|
|
(15,500) |
Real estate depreciation and amortization |
|
|
122,500 |
|
|
122,500 |
Amortization of deferred stock compensation |
|
|
11,000 |
|
|
11,000 |
Pre-opening costs |
|
|
4,000 |
|
|
4,000 |
Noncash interest on derivatives, net |
|
|
(2,000) |
|
|
(2,000) |
Prior year income tax benefit, net |
|
|
(900) |
|
|
(900) |
Other items, net |
|
|
(200) |
|
|
(200) |
Gain on sale of assets, net |
|
|
(500) |
|
|
(500) |
Adjusted FFO attributable to common stockholders |
|
$ |
173,000 |
|
$ |
183,000 |
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders per diluted share |
|
$ |
0.85 |
|
$ |
0.90 |
|
|
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
204,000 |
|
|
204,000 |
11
Sunstone Hotel Investors, Inc.
Non-GAAP Financial Measures
Hotel Adjusted EBITDAre and Margins
(Unaudited and in thousands)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Hotel Adjusted EBITDAre Margin (1) |
|
|
30.7% |
|
|
31.8% |
|
|
27.9% |
|
|
30.6% |
|
Comparable Hotel Adjusted EBITDAre Margin, Excluding The Confidante Miami Beach (1) |
|
|
30.9% |
|
|
32.3% |
|
|
28.3% |
|
|
30.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
247,481 |
|
$ |
276,112 |
|
$ |
464,647 |
|
$ |
519,555 |
|
Non-hotel revenues (2) |
|
|
— |
|
|
(18) |
|
|
— |
|
|
(36) |
|
Total Actual Hotel Revenues |
|
|
247,481 |
|
|
276,094 |
|
|
464,647 |
|
|
519,519 |
|
Prior ownership hotel revenues (3) |
|
|
4,200 |
|
|
12,609 |
|
|
17,737 |
|
|
27,314 |
|
Sold hotel revenues (4) |
|
|
— |
|
|
(33,522) |
|
|
— |
|
|
(51,562) |
|
Comparable Hotel Revenues |
|
|
251,681 |
|
|
255,181 |
|
|
482,384 |
|
|
495,271 |
|
The Confidante Miami Beach revenues (5) |
|
|
(132) |
|
|
(8,705) |
|
|
(4,147) |
|
|
(23,286) |
|
Comparable Hotel Revenues, Excluding The Confidante Miami Beach |
|
$ |
251,549 |
|
$ |
246,476 |
|
$ |
478,237 |
|
$ |
471,985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
26,142 |
|
$ |
43,078 |
|
$ |
39,177 |
|
$ |
64,165 |
|
Non-hotel revenues (2) |
|
|
— |
|
|
(18) |
|
|
— |
|
|
(36) |
|
Non-hotel operating expenses, net (6) |
|
|
(296) |
|
|
(275) |
|
|
(574) |
|
|
(625) |
|
Property-level adjustments (7) |
|
|
661 |
|
|
180 |
|
|
(583) |
|
|
362 |
|
Corporate overhead |
|
|
8,168 |
|
|
8,396 |
|
|
15,686 |
|
|
16,864 |
|
Depreciation and amortization |
|
|
31,112 |
|
|
32,397 |
|
|
60,152 |
|
|
64,739 |
|
Interest and other income |
|
|
(3,503) |
|
|
(4,639) |
|
|
(8,956) |
|
|
(5,180) |
|
Interest expense |
|
|
12,693 |
|
|
9,223 |
|
|
23,703 |
|
|
23,017 |
|
Gain on sale of assets, net |
|
|
— |
|
|
— |
|
|
(457) |
|
|
— |
|
Gain on extinguishment of debt |
|
|
(38) |
|
|
(12) |
|
|
(59) |
|
|
(9,921) |
|
Income tax provision (benefit), net |
|
|
255 |
|
|
803 |
|
|
(600) |
|
|
1,161 |
|
Actual Hotel Adjusted EBITDAre |
|
|
75,194 |
|
|
89,133 |
|
|
127,489 |
|
|
154,546 |
|
Prior ownership hotel Adjusted EBITDAre (3) |
|
|
2,128 |
|
|
4,681 |
|
|
7,232 |
|
|
10,920 |
|
Sold hotel Adjusted EBITDAre (4) |
|
|
— |
|
|
(12,675) |
|
|
— |
|
|
(13,678) |
|
Comparable Hotel Adjusted EBITDAre |
|
|
77,322 |
|
|
81,139 |
|
|
134,721 |
|
|
151,788 |
|
The Confidante Miami Beach Adjusted EBITDAre (5) |
|
|
483 |
|
|
(1,420) |
|
|
721 |
|
|
(7,087) |
|
Comparable Hotel Adjusted EBITDAre, Excluding The Confidante Miami Beach |
|
$ |
77,805 |
|
$ |
79,719 |
|
$ |
135,442 |
|
$ |
144,701 |
|
*Footnotes on following page
12
(1) | Comparable Hotel Adjusted EBITDAre Margin is calculated as Comparable Hotel Adjusted EBITDAre divided by Comparable Hotel Revenues. Comparable Hotel Adjusted EBITDAre Margin, Excluding The Confidante Miami Beach is calculated as Comparable Hotel Adjusted EBITDAre, Excluding The Confidante Miami Beach divided by Comparable Hotel Revenues, Excluding The Confidante Miami Beach. |
(2) | Non-hotel revenues include the amortization of any favorable or unfavorable contract intangibles recorded in conjunction with the Company's hotel acquisitions. |
(3) | Prior ownership hotel revenues and Adjusted EBITDAre include results for the Hyatt Regency San Antonio Riverwalk prior to the Company’s acquisition of the hotel in April 2024. The Company obtained prior ownership information from the previous owner of the Hyatt Regency San Antonio Riverwalk during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. |
(4) | Sold hotel revenues and Adjusted EBITDAre include results for the Boston Park Plaza, sold in October 2023. |
(5) | The Confidante Miami Beach is undergoing a comprehensive renovation and conversion to Andaz Miami Beach and results are not comparable to prior periods. |
(6) | Non-hotel operating expenses, net include the amortization of hotel real estate-related right-of-use assets and obligations. Non-hotel operating expenses, net for the first six months of 2023 also include a prior year property tax credit related to a sold hotel. |
(7) | Property-level adjustments for the second quarter and first six months of 2024 include $0.1 million and $0.2 million, respectively, in taxes assessed on commercial rents at the Hyatt Regency San Francisco, and for both the second quarter and first six months of 2024, property-level adjustments include $0.6 million in pre-opening costs at The Confidante Miami Beach. Property-level adjustments for the first six months of 2024 also include a $1.3 million COVID-19-related relief grant received at the Marriott Boston Long Wharf. Property-level adjustments for the second quarter and first six months of 2023 include $0.2 million and $0.4 million, respectively, in taxes assessed on commercial rents at the Hyatt Regency San Francisco. |
13
Exhibit 99.2
Supplemental Financial Information For the quarter ended June 30, 2024 August 7, 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 |
20 |
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 |
About Sunstone
Sunstone Hotel Investors, Inc. (the “Company,” “we,” and “our”) (NYSE: SHO) is a lodging real estate investment trust (“REIT”) that as of August 7, 2024 owns 15 hotels comprised of 7,255 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 |
Non-GAAP Financial Measures
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, and management transition costs; pre-opening costs associated with extensive renovation projects such as the work being performed at The Confidante Miami Beach; 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
Q2 2024 – Q3 2023, Trailing 12 Months
|
Quarter Ended (1) |
|
Trailing 12 Months (1) |
||||||||||||
(Unaudited and in thousands, except per share data) |
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
Ended |
||||||
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
June 30, 2024 |
||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
$ |
153,790 |
|
$ |
144,437 |
|
$ |
135,551 |
|
$ |
141,504 |
|
$ |
575,282 |
|
Food and beverage |
|
72,552 |
|
|
64,989 |
|
|
64,914 |
|
|
59,412 |
|
|
261,867 |
|
Other operating |
|
25,339 |
|
|
21,277 |
|
|
21,196 |
|
|
23,894 |
|
|
91,706 |
|
Total revenues |
|
251,681 |
|
|
230,703 |
|
|
221,661 |
|
|
224,810 |
|
|
928,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
37,922 |
|
|
37,518 |
|
|
35,298 |
|
|
35,661 |
|
|
146,399 |
|
Food and beverage |
|
48,312 |
|
|
46,368 |
|
|
45,952 |
|
|
44,564 |
|
|
185,196 |
|
Other expenses |
|
88,490 |
|
|
87,896 |
|
|
84,965 |
|
|
86,763 |
|
|
348,114 |
|
Corporate overhead |
|
8,168 |
|
|
7,518 |
|
|
7,421 |
|
|
7,127 |
|
|
30,234 |
|
Depreciation and amortization |
|
31,112 |
|
|
31,063 |
|
|
31,158 |
|
|
31,157 |
|
|
124,490 |
|
Total operating expenses |
|
214,004 |
|
|
210,363 |
|
|
204,794 |
|
|
205,272 |
|
|
834,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income |
|
3,503 |
|
|
5,453 |
|
|
4,137 |
|
|
1,218 |
|
|
14,311 |
|
Interest expense |
|
(12,693) |
|
|
(11,010) |
|
|
(16,768) |
|
|
(11,894) |
|
|
(52,365) |
|
Income before income taxes |
|
28,487 |
|
|
14,783 |
|
|
4,236 |
|
|
8,862 |
|
|
56,368 |
|
Income tax (provision) benefit, net |
|
(255) |
|
|
(93) |
|
|
863 |
|
|
(602) |
|
|
(87) |
|
Net income |
$ |
28,232 |
|
$ |
14,690 |
|
$ |
5,099 |
|
$ |
8,260 |
|
$ |
56,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Hotel Adjusted EBITDAre (2) |
$ |
77,322 |
|
$ |
57,399 |
|
$ |
55,578 |
|
$ |
57,634 |
|
$ |
247,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjusted EBITDAre (3) |
$ |
75,651 |
|
$ |
59,615 |
|
$ |
54,951 |
|
$ |
54,411 |
|
$ |
244,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjusted FFO attributable to common stockholders (4) |
$ |
58,754 |
|
$ |
42,622 |
|
$ |
39,255 |
|
$ |
37,049 |
|
$ |
177,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjusted FFO attributable to common stockholders per diluted share (4) |
$ |
0.29 |
|
$ |
0.21 |
|
$ |
0.19 |
|
$ |
0.18 |
|
$ |
0.88 |
*Footnotes on page 8
COMPARABLE CORPORATE FINANCIAL INFORMATION |
|
Page 7 |
||||||
|
|
|
Supplemental Financial Information |
Comparable Consolidated Statements of Operations
Footnotes
(1) | Includes results for all 15 hotels owned by the Company as of June 30, 2024. Also includes prior ownership results for the Hyatt Regency San Antonio Riverwalk acquired by the Company in April 2024, adjusted for the Company's pro forma depreciation expense. The Company obtained prior ownership information from the previous owner of the Hyatt Regency San Antonio Riverwalk during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. 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 second 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 August 7, 2024. Comparable Hotel Adjusted EBITDAre presented for the trailing 12 months ended June 30, 2024 includes all hotels owned by the Company as of June 30, 2024. |
(3) | Comparable Adjusted EBITDAre reconciliation for the second 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 second 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 0.4 million shares in the second quarter of 2024 and 1.6 million and 2.1 million shares in the 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
Q2 2024 – Q3 2023, Trailing 12 Months
|
Quarter Ended |
|
Trailing 12 Months |
|||||||||||
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
Ended |
|||||
(In thousands) |
2024 |
|
2024 |
|
2023 |
|
2023 |
|
June 30, 2024 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
26,142 |
|
$ |
13,035 |
|
$ |
126,985 |
|
$ |
15,558 |
|
$ |
181,720 |
Depreciation and amortization |
|
31,112 |
|
|
29,040 |
|
|
29,135 |
|
|
33,188 |
|
|
122,475 |
Interest expense |
|
12,693 |
|
|
11,010 |
|
|
16,768 |
|
|
11,894 |
|
|
52,365 |
Income tax provision (benefit), net |
|
255 |
|
|
(855) |
|
|
2,799 |
|
|
602 |
|
|
2,801 |
Gain on sale of assets, net |
|
— |
|
|
(457) |
|
|
(123,820) |
|
|
— |
|
|
(124,277) |
EBITDAre |
|
70,202 |
|
|
51,773 |
|
|
51,867 |
|
|
61,242 |
|
|
235,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation |
|
3,181 |
|
|
2,770 |
|
|
2,512 |
|
|
2,511 |
|
|
10,974 |
Amortization of right-of-use assets and obligations |
|
(107) |
|
|
(11) |
|
|
(20) |
|
|
(13) |
|
|
(151) |
Amortization of contract intangibles, net |
|
— |
|
|
— |
|
|
— |
|
|
(19) |
|
|
(19) |
Gain on extinguishment of debt |
|
(38) |
|
|
(21) |
|
|
(8) |
|
|
(9) |
|
|
(76) |
Gain on insurance recoveries |
|
(314) |
|
|
— |
|
|
— |
|
|
— |
|
|
(314) |
Pre-opening costs |
|
599 |
|
|
— |
|
|
— |
|
|
— |
|
|
599 |
Property-level severance |
|
— |
|
|
— |
|
|
297 |
|
|
— |
|
|
297 |
Adjustments to EBITDAre, net |
|
3,321 |
|
|
2,738 |
|
|
2,781 |
|
|
2,470 |
|
|
11,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAre |
|
73,523 |
|
|
54,511 |
|
|
54,648 |
|
|
63,712 |
|
|
246,394 |
Sold hotel Adjusted EBITDAre (1) |
|
— |
|
|
— |
|
|
(5,420) |
|
|
(12,926) |
|
|
(18,346) |
Acquisition hotel Adjusted EBITDAre (2) |
|
2,128 |
|
|
5,104 |
|
|
5,723 |
|
|
3,625 |
|
|
16,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjusted EBITDAre |
$ |
75,651 |
|
$ |
59,615 |
|
$ |
54,951 |
|
$ |
54,411 |
|
$ |
244,628 |
*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
Q2 2024– Q3 2023, Trailing 12 Months
|
Quarter Ended |
|
Trailing 12 Months |
|||||||||||
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
Ended |
|||||
(In thousands, except per share data) |
2024 |
|
2024 |
|
2023 |
|
2023 |
|
June 30, 2024 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
26,142 |
|
$ |
13,035 |
|
$ |
126,985 |
|
$ |
15,558 |
|
$ |
181,720 |
Preferred stock dividends |
|
(3,683) |
|
|
(3,683) |
|
|
(3,226) |
|
|
(3,226) |
|
|
(13,818) |
Real estate depreciation and amortization |
|
30,771 |
|
|
28,755 |
|
|
28,979 |
|
|
33,025 |
|
|
121,530 |
Gain on sale of assets, net |
|
— |
|
|
(457) |
|
|
(123,820) |
|
|
— |
|
|
(124,277) |
FFO attributable to common stockholders |
|
53,230 |
|
|
37,650 |
|
|
28,918 |
|
|
45,357 |
|
|
165,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation |
|
3,181 |
|
|
2,770 |
|
|
2,512 |
|
|
2,511 |
|
|
10,974 |
Real estate amortization of right-of-use assets and obligations |
|
(130) |
|
|
(122) |
|
|
(134) |
|
|
(124) |
|
|
(510) |
Amortization of contract intangibles, net |
|
287 |
|
|
231 |
|
|
105 |
|
|
84 |
|
|
707 |
Noncash interest on derivatives, net |
|
(189) |
|
|
(2,042) |
|
|
3,600 |
|
|
(1,469) |
|
|
(100) |
Gain on extinguishment of debt |
|
(38) |
|
|
(21) |
|
|
(8) |
|
|
(9) |
|
|
(76) |
Gain on insurance recoveries |
|
(314) |
|
|
— |
|
|
— |
|
|
— |
|
|
(314) |
Pre-opening costs |
|
599 |
|
|
— |
|
|
— |
|
|
— |
|
|
599 |
Property-level severance |
|
— |
|
|
— |
|
|
297 |
|
|
— |
|
|
297 |
Income tax related to hotel disposition |
|
— |
|
|
(948) |
|
|
3,662 |
|
|
— |
|
|
2,714 |
Adjustments to FFO attributable to common stockholders, net |
|
3,396 |
|
|
(132) |
|
|
10,034 |
|
|
993 |
|
|
14,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders |
|
56,626 |
|
|
37,518 |
|
|
38,952 |
|
|
46,350 |
|
|
179,446 |
Sold hotel Adjusted FFO (1) |
|
— |
|
|
— |
|
|
(5,420) |
|
|
(12,926) |
|
|
(18,346) |
Acquisition hotel Adjusted FFO (2) |
|
2,128 |
|
|
5,104 |
|
|
5,723 |
|
|
3,625 |
|
|
16,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjusted FFO attributable to common stockholders |
$ |
58,754 |
|
$ |
42,622 |
|
$ |
39,255 |
|
$ |
37,049 |
|
$ |
177,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Adjusted FFO attributable to common stockholders per diluted share |
$ |
0.29 |
|
$ |
0.21 |
|
$ |
0.19 |
|
$ |
0.18 |
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
202,758 |
|
|
202,631 |
|
|
203,612 |
|
|
205,570 |
|
|
203,643 |
Shares associated with unvested restricted stock awards |
|
932 |
|
|
665 |
|
|
613 |
|
|
411 |
|
|
655 |
Diluted weighted average shares outstanding |
|
203,690 |
|
|
203,296 |
|
|
204,225 |
|
|
205,981 |
|
|
204,298 |
Equity transactions (3) |
|
(323) |
|
|
(359) |
|
|
(1,523) |
|
|
(3,482) |
|
|
(1,422) |
Comparable diluted weighted average shares outstanding |
|
203,367 |
|
|
202,937 |
|
|
202,702 |
|
|
202,499 |
|
|
202,876 |
*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
Q2 2024 – Q3 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) | Acquisition hotel Adjusted EBITDAre and Adjusted FFO include prior ownership results for the Hyatt Regency San Antonio Riverwalk acquired by the Company in April 2024. |
(3) | Equity transactions represent repurchases of the Company’s common stock totaling 0.4 million in the second quarter of 2024 and 1.6 million and 2.1 million shares in the third and fourth quarters of 2023, respectively. |
COMPARABLE CORPORATE FINANCIAL INFORMATION |
|
Page 11 |
||||||
|
|
|
Supplemental Financial Information |
CAPITALIZATION |
|
Page 12 |
||||||
|
|
|
Supplemental Financial Information |
Comparative Capitalization
Q2 2024 – Q2 2023
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|||||
(In thousands, except per share data) |
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Price & Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the end of the quarter |
|
$ |
10.46 |
|
$ |
11.14 |
|
$ |
10.73 |
|
$ |
9.35 |
|
$ |
10.12 |
|
High during quarter ended |
|
$ |
11.09 |
|
$ |
11.38 |
|
$ |
11.05 |
|
$ |
10.50 |
|
$ |
10.79 |
|
Low during quarter ended |
|
$ |
9.96 |
|
$ |
10.42 |
|
$ |
9.04 |
|
$ |
8.67 |
|
$ |
9.39 |
|
Common dividends per share |
|
$ |
0.09 |
|
$ |
0.07 |
|
$ |
0.13 |
|
$ |
0.07 |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares & Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
203,390 |
|
|
203,674 |
|
|
203,480 |
|
|
205,623 |
|
|
207,185 |
|
Units outstanding |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total common shares and units outstanding |
|
|
203,390 |
|
|
203,674 |
|
|
203,480 |
|
|
205,623 |
|
|
207,185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value of common equity |
|
$ |
2,127,464 |
|
$ |
2,268,933 |
|
$ |
2,183,336 |
|
$ |
1,922,578 |
|
$ |
2,096,709 |
|
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 |
|
|
817,978 |
|
|
818,512 |
|
|
819,050 |
|
|
819,582 |
|
|
820,100 |
|
Total capitalization |
|
$ |
3,226,692 |
|
$ |
3,368,695 |
|
$ |
3,283,636 |
|
$ |
3,023,410 |
|
$ |
3,198,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt to total capitalization |
|
|
25.4 |
% |
|
24.3 |
% |
|
24.9 |
% |
|
27.1 |
% |
|
25.6 |
% |
Total debt and preferred equity to total capitalization |
|
|
34.1 |
% |
|
32.6 |
% |
|
33.5 |
% |
|
36.4 |
% |
|
34.4 |
% |
CAPITALIZATION |
|
Page 13 |
||||||
|
|
|
Supplemental Financial Information |
Debt Summary Schedule
(In thousands) |
|
|
|
Interest Rate / |
|
Maturity |
|
|
June 30, 2024 |
|
|
Debt |
|
Collateral |
|
Spread |
|
Date (1) |
|
|
Balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured Mortgage Debt |
|
JW Marriott New Orleans |
|
4.15% |
|
12/11/2024 |
|
$ |
72,978 |
|
|
Series A Senior Notes |
|
Unsecured |
|
4.69% |
|
01/10/2026 |
|
|
65,000 |
|
|
Term Loan 3 (2) |
|
Unsecured |
|
6.78% |
|
05/01/2026 |
|
|
225,000 |
|
|
Term Loan 1 (3) |
|
Unsecured |
|
5.27% |
|
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 |
|
6.78% |
|
01/25/2028 |
|
|
175,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
|
|
|
$ |
817,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
5.80 |
% |
|
5.57 |
% |
|
Weighted Average Maturity of Debt |
|
|
|
|
|
2.5 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 2.3 years to 2.5 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. The Company did not achieve its 2023 sustainability performance metric as specified in the Second Amended Credit Agreement, resulting in the pricing grid returning to its range of 135 to 220 basis points in May 2024, an increase of 0.02% from the previous year. The pricing grid is evaluated annually and is subject to the Company's 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 August 7, 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 |
|
8% |
|
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 |
|
287 |
|
4% |
|
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 |
|
|
|
|
|
7,255 |
|
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)
Q2 2024/2023
|
|
ADR |
|
Occupancy |
|
|
RevPAR |
|
TRevPAR |
||||||||||||||||||||||
Hotels sorted by number of rooms |
|
For the Three Months Ended June 30, |
|
For the Three Months Ended June 30, |
|
For the Three Months Ended June 30, |
|
For the Three Months Ended June 30, |
|||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
||||||
Hilton San Diego Bayfront |
|
$ |
282 |
|
$ |
277 |
|
1.8% |
|
86.7% |
|
85.7% |
|
100 |
bps |
|
$ |
244 |
|
$ |
237 |
|
3.0% |
|
$ |
437 |
|
$ |
435 |
|
0.6% |
Hyatt Regency San Francisco |
|
|
284 |
|
|
291 |
|
(2.4)% |
|
76.7% |
|
72.9% |
|
380 |
bps |
|
|
218 |
|
|
212 |
|
2.7% |
|
|
290 |
|
|
317 |
|
(8.4)% |
The Westin Washington, DC Downtown (1) |
|
|
319 |
|
|
292 |
|
9.3% |
|
76.8% |
|
63.1% |
|
1,370 |
bps |
|
|
245 |
|
|
184 |
|
33.0% |
|
|
386 |
|
|
272 |
|
41.9% |
Renaissance Orlando at SeaWorld® |
|
|
195 |
|
|
195 |
|
0.3% |
|
67.8% |
|
78.9% |
|
(1,110) |
bps |
|
|
132 |
|
|
154 |
|
(13.8)% |
|
|
300 |
|
|
345 |
|
(12.8)% |
Hyatt Regency San Antonio Riverwalk |
|
|
204 |
|
|
203 |
|
0.8% |
|
76.7% |
|
69.9% |
|
680 |
bps |
|
|
157 |
|
|
142 |
|
10.6% |
|
|
264 |
|
|
220 |
|
20.2% |
Wailea Beach Resort |
|
|
668 |
|
|
682 |
|
(2.2)% |
|
71.4% |
|
75.2% |
|
(380) |
bps |
|
|
477 |
|
|
513 |
|
(7.1)% |
|
|
754 |
|
|
783 |
|
(3.6)% |
JW Marriott New Orleans |
|
|
249 |
|
|
258 |
|
(3.5)% |
|
72.5% |
|
75.7% |
|
(320) |
bps |
|
|
181 |
|
|
195 |
|
(7.6)% |
|
|
257 |
|
|
263 |
|
(2.4)% |
Marriott Boston Long Wharf |
|
|
406 |
|
|
405 |
|
0.1% |
|
86.0% |
|
79.7% |
|
630 |
bps |
|
|
349 |
|
|
323 |
|
8.0% |
|
|
490 |
|
|
448 |
|
9.3% |
Marriott Long Beach Downtown (1) |
|
|
235 |
|
|
229 |
|
2.7% |
|
49.5% |
|
79.6% |
|
(3,010) |
bps |
|
|
116 |
|
|
182 |
|
(36.1)% |
|
|
158 |
|
|
233 |
|
(31.9)% |
The Bidwell Marriott Portland |
|
|
155 |
|
|
182 |
|
(14.6)% |
|
70.6% |
|
61.1% |
|
950 |
bps |
|
|
110 |
|
|
111 |
|
(1.3)% |
|
|
150 |
|
|
153 |
|
(2.4)% |
Hilton New Orleans St. Charles |
|
|
180 |
|
|
188 |
|
(4.0)% |
|
72.4% |
|
77.5% |
|
(510) |
bps |
|
|
131 |
|
|
145 |
|
(10.3)% |
|
|
152 |
|
|
192 |
|
(21.1)% |
Oceans Edge Resort & Marina |
|
|
306 |
|
|
362 |
|
(15.4)% |
|
82.2% |
|
78.5% |
|
370 |
bps |
|
|
252 |
|
|
284 |
|
(11.5)% |
|
|
438 |
|
|
466 |
|
(6.0)% |
Montage Healdsburg |
|
|
1,130 |
|
|
1,145 |
|
(1.2)% |
|
59.2% |
|
62.1% |
|
(290) |
bps |
|
|
669 |
|
|
711 |
|
(5.9)% |
|
|
1,275 |
|
|
1,296 |
|
(1.6)% |
Four Seasons Resort Napa Valley |
|
|
1,431 |
|
|
1,640 |
|
(12.8)% |
|
62.6% |
|
49.6% |
|
1,300 |
bps |
|
|
896 |
|
|
813 |
|
10.1% |
|
|
1,715 |
|
|
1,398 |
|
22.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio, Excluding Renovation Hotel (2) |
|
|
323 |
|
|
322 |
|
0.3% |
|
75.0% |
|
74.9% |
|
10 |
bps |
|
|
242 |
|
|
241 |
|
0.4% |
|
|
396 |
|
|
388 |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Renovation Hotel (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Confidante Miami Beach |
|
|
— |
|
|
264 |
|
(100.0)% |
|
0.0% |
|
63.2% |
|
(6,320) |
bps |
|
|
— |
|
|
167 |
|
(100.0)% |
|
|
5 |
|
|
282 |
|
(98.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio (3) |
|
$ |
323 |
|
$ |
319 |
|
1.0% |
|
72.1% |
|
74.3% |
|
(220) |
bps |
|
$ |
233 |
|
$ |
237 |
|
(2.0)% |
|
$ |
380 |
|
$ |
383 |
|
(0.8)% |
*Footnotes on page 19
PROPERTY-LEVEL DATA AND OPERATING STATISTICS |
|
Page 17 |
||||||
|
|
|
Supplemental Financial Information |
Property-Level Operating Statistics
ADR, Occupancy, RevPAR and Total RevPAR (TRevPAR)
Q2 YTD 2024/2023
|
|
ADR |
|
Occupancy |
|
|
RevPAR |
|
TRevPAR |
||||||||||||||||||||||
Hotels sorted by number of rooms |
|
For the Six Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
For the Six Months Ended June 30, |
|||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
|
2024 |
|
2023 |
|
2024 vs. 2023 |
||||||
Hilton San Diego Bayfront |
|
$ |
286 |
|
$ |
281 |
|
1.7% |
|
84.2% |
|
84.3% |
|
(10) |
bps |
|
$ |
241 |
|
$ |
237 |
|
1.6% |
|
$ |
433 |
|
$ |
433 |
|
(0.2)% |
Hyatt Regency San Francisco |
|
|
303 |
|
|
307 |
|
(1.2)% |
|
71.2% |
|
69.5% |
|
170 |
bps |
|
|
216 |
|
|
213 |
|
1.3% |
|
|
292 |
|
|
310 |
|
(5.9)% |
The Westin Washington, DC Downtown (1) |
|
|
294 |
|
|
272 |
|
8.1% |
|
71.9% |
|
55.4% |
|
1,650 |
bps |
|
|
211 |
|
|
151 |
|
40.3% |
|
|
340 |
|
|
219 |
|
55.0% |
Renaissance Orlando at SeaWorld® |
|
|
214 |
|
|
208 |
|
2.9% |
|
74.4% |
|
81.1% |
|
(670) |
bps |
|
|
159 |
|
|
169 |
|
(5.6)% |
|
|
348 |
|
|
376 |
|
(7.3)% |
Hyatt Regency San Antonio Riverwalk |
|
|
206 |
|
|
207 |
|
(0.4)% |
|
74.4% |
|
72.4% |
|
200 |
bps |
|
|
153 |
|
|
150 |
|
2.3% |
|
|
250 |
|
|
240 |
|
4.5% |
Wailea Beach Resort |
|
|
683 |
|
|
711 |
|
(3.9)% |
|
76.2% |
|
77.4% |
|
(120) |
bps |
|
|
520 |
|
|
550 |
|
(5.4)% |
|
|
780 |
|
|
817 |
|
(4.5)% |
JW Marriott New Orleans |
|
|
260 |
|
|
261 |
|
(0.4)% |
|
70.4% |
|
74.2% |
|
(380) |
bps |
|
|
183 |
|
|
194 |
|
(5.5)% |
|
|
255 |
|
|
265 |
|
(3.9)% |
Marriott Boston Long Wharf |
|
|
353 |
|
|
356 |
|
(0.7)% |
|
76.8% |
|
69.4% |
|
740 |
bps |
|
|
271 |
|
|
247 |
|
9.9% |
|
|
388 |
|
|
349 |
|
11.0% |
Marriott Long Beach Downtown (1) |
|
|
231 |
|
|
234 |
|
(1.1)% |
|
41.1% |
|
76.9% |
|
(3,580) |
bps |
|
|
95 |
|
|
180 |
|
(47.1)% |
|
|
130 |
|
|
234 |
|
(44.8)% |
The Bidwell Marriott Portland |
|
|
150 |
|
|
172 |
|
(12.9)% |
|
64.5% |
|
55.9% |
|
860 |
bps |
|
|
97 |
|
|
96 |
|
0.5% |
|
|
135 |
|
|
133 |
|
1.4% |
Hilton New Orleans St. Charles |
|
|
190 |
|
|
197 |
|
(3.5)% |
|
76.2% |
|
76.1% |
|
10 |
bps |
|
|
144 |
|
|
150 |
|
(3.4)% |
|
|
168 |
|
|
184 |
|
(8.5)% |
Oceans Edge Resort & Marina |
|
|
363 |
|
|
416 |
|
(12.8)% |
|
81.9% |
|
78.6% |
|
330 |
bps |
|
|
297 |
|
|
327 |
|
(9.2)% |
|
|
476 |
|
|
499 |
|
(4.6)% |
Montage Healdsburg |
|
|
1,030 |
|
|
1,062 |
|
(3.0)% |
|
48.5% |
|
52.6% |
|
(410) |
bps |
|
|
500 |
|
|
559 |
|
(10.5)% |
|
|
957 |
|
|
1,008 |
|
(5.1)% |
Four Seasons Resort Napa Valley |
|
|
1,305 |
|
|
1,539 |
|
(15.2)% |
|
48.3% |
|
40.0% |
|
830 |
bps |
|
|
630 |
|
|
615 |
|
2.4% |
|
|
1,233 |
|
|
1,106 |
|
11.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio, Excluding Renovation Hotel (2) |
|
|
319 |
|
|
321 |
|
(0.4)% |
|
72.7% |
|
72.5% |
|
20 |
bps |
|
|
232 |
|
|
233 |
|
(0.1)% |
|
|
376 |
|
|
374 |
|
0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Renovation Hotel (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Confidante Miami Beach |
|
|
269 |
|
|
322 |
|
(16.3)% |
|
22.3% |
|
73.5% |
|
(5,120) |
bps |
|
|
60 |
|
|
237 |
|
(74.6)% |
|
|
73 |
|
|
380 |
|
(80.8)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio (3) |
|
$ |
319 |
|
$ |
321 |
|
(0.6)% |
|
70.5% |
|
72.6% |
|
(210) |
bps |
|
$ |
225 |
|
$ |
233 |
|
(3.5)% |
|
$ |
363 |
|
$ |
374 |
|
(2.9)% |
*Footnotes on page 19
PROPERTY-LEVEL DATA AND OPERATING STATISTICS |
|
Page 18 |
||||||
|
|
|
Supplemental Financial Information |
Property-Level Operating Statistics
Q2 and YTD 2024/2023 Footnotes
(1) | Operating statistics for the second quarter and first six months 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 second quarter and first six months 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 June 30, 2024, with the exception of The Confidante Miami Beach due to its renovation activity during the second quarter and first six months of 2024. Amounts included in this presentation for the Hyatt Regency San Antonio Riverwalk, acquired by the Company in April 2024, include both prior ownership results and the Company’s results. The Company obtained prior ownership information from the previous owner of the Hyatt Regency San Antonio Riverwalk during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. |
(3) | Comparable Portfolio consists of all hotels owned by the Company as of June 30, 2024, and includes prior ownership information for the Hyatt Regency San Antonio Riverwalk as discussed in Note 2. |
PROPERTY-LEVEL DATA AND OPERATING STATISTICS |
|
Page 19 |
||||||
|
|
|
Supplemental Financial Information |
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre &
ADJUSTED EBITDAre MARGINS
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS |
|
Page 20 |
||||||
|
|
|
Supplemental Financial Information |
Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins
Q2 2024/2023
Hotels sorted by number of rooms |
|
For the Three Months Ended June 30, |
|||||||||||||||||
|
|
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 |
|
$ |
47,328 |
|
$ |
14,971 |
|
31.6% |
|
$ |
47,061 |
|
$ |
15,833 |
|
33.6% |
|
(200) |
bps |
Hyatt Regency San Francisco |
|
|
21,701 |
|
|
1,609 |
|
7.4% |
|
|
23,693 |
|
|
4,749 |
|
20.0% |
|
(1,260) |
bps |
The Westin Washington, DC Downtown (1) |
|
|
28,340 |
|
|
11,506 |
|
40.6% |
|
|
19,975 |
|
|
5,967 |
|
29.9% |
|
1,070 |
bps |
Renaissance Orlando at SeaWorld® |
|
|
21,352 |
|
|
6,321 |
|
29.6% |
|
|
24,497 |
|
|
8,328 |
|
34.0% |
|
(440) |
bps |
Hyatt Regency San Antonio Riverwalk |
|
|
15,152 |
|
|
6,743 |
|
44.5% |
|
|
12,609 |
|
|
4,681 |
|
37.1% |
|
740 |
bps |
Wailea Beach Resort |
|
|
37,544 |
|
|
13,548 |
|
36.1% |
|
|
38,960 |
|
|
14,656 |
|
37.6% |
|
(150) |
bps |
JW Marriott New Orleans |
|
|
11,711 |
|
|
4,538 |
|
38.7% |
|
|
11,993 |
|
|
5,270 |
|
43.9% |
|
(520) |
bps |
Marriott Boston Long Wharf |
|
|
18,498 |
|
|
7,948 |
|
43.0% |
|
|
16,915 |
|
|
6,908 |
|
40.8% |
|
220 |
bps |
Marriott Long Beach Downtown (1) |
|
|
5,421 |
|
|
(13) |
|
(0.2)% |
|
|
7,919 |
|
|
2,486 |
|
31.4% |
|
(3,160) |
bps |
The Bidwell Marriott Portland |
|
|
3,515 |
|
|
749 |
|
21.3% |
|
|
3,599 |
|
|
876 |
|
24.3% |
|
(300) |
bps |
Hilton New Orleans St. Charles |
|
|
3,479 |
|
|
1,132 |
|
32.5% |
|
|
4,413 |
|
|
1,981 |
|
44.9% |
|
(1,240) |
bps |
Oceans Edge Resort & Marina |
|
|
6,976 |
|
|
2,304 |
|
33.0% |
|
|
7,424 |
|
|
2,789 |
|
37.6% |
|
(460) |
bps |
Montage Healdsburg |
|
|
15,709 |
|
|
4,177 |
|
26.6% |
|
|
15,335 |
|
|
3,365 |
|
21.9% |
|
470 |
bps |
Four Seasons Resort Napa Valley |
|
|
14,823 |
|
|
2,272 |
|
15.3% |
|
|
12,083 |
|
|
1,830 |
|
15.1% |
|
20 |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio, Excluding Renovation Hotel (2) |
|
|
251,549 |
|
|
77,805 |
|
30.9% |
|
|
246,476 |
|
|
79,719 |
|
32.3% |
|
(140) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Renovation Hotel (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Confidante Miami Beach |
|
|
132 |
|
|
(483) |
|
(365.9)% |
|
|
8,705 |
|
|
1,420 |
|
16.3% |
|
(38,220) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio (3) |
|
|
251,681 |
|
|
77,322 |
|
30.7% |
|
|
255,181 |
|
|
81,139 |
|
31.8% |
|
(110) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Prior Ownership (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyatt Regency San Antonio Riverwalk |
|
|
(4,200) |
|
|
(2,128) |
|
N/A |
|
|
(12,609) |
|
|
(4,681) |
|
37.1% |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Sold Hotel (5) |
|
|
— |
|
|
— |
|
N/A |
|
|
33,522 |
|
|
12,675 |
|
37.8% |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual Portfolio (6) |
|
$ |
247,481 |
|
$ |
75,194 |
|
30.4% |
|
$ |
276,094 |
|
$ |
89,133 |
|
32.3% |
|
N/A |
|
*Footnotes on page 23
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS |
|
Page 21 |
||||||
|
|
|
Supplemental Financial Information |
Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins
Q2 YTD 2024/2023
Hotels sorted by number of rooms |
|
For the Six Months Ended June 30, |
|||||||||||||||||
|
|
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 |
|
$ |
93,716 |
|
$ |
29,285 |
|
31.2% |
|
$ |
93,362 |
|
$ |
30,872 |
|
33.1% |
|
(190) |
bps |
Hyatt Regency San Francisco |
|
|
43,627 |
|
|
4,228 |
|
9.7% |
|
|
46,096 |
|
|
8,423 |
|
18.3% |
|
(860) |
bps |
The Westin Washington, DC Downtown (1) |
|
|
49,923 |
|
|
16,191 |
|
32.4% |
|
|
32,030 |
|
|
6,573 |
|
20.5% |
|
1,190 |
bps |
Renaissance Orlando at SeaWorld® |
|
|
49,492 |
|
|
16,448 |
|
33.2% |
|
|
53,120 |
|
|
19,421 |
|
36.6% |
|
(340) |
bps |
Hyatt Regency San Antonio Riverwalk |
|
|
28,689 |
|
|
11,847 |
|
41.3% |
|
|
27,314 |
|
|
10,920 |
|
40.0% |
|
130 |
bps |
Wailea Beach Resort |
|
|
77,677 |
|
|
29,104 |
|
37.5% |
|
|
80,876 |
|
|
31,456 |
|
38.9% |
|
(140) |
bps |
JW Marriott New Orleans |
|
|
23,243 |
|
|
8,968 |
|
38.6% |
|
|
24,046 |
|
|
10,745 |
|
44.7% |
|
(610) |
bps |
Marriott Boston Long Wharf |
|
|
29,277 |
|
|
9,630 |
|
32.9% |
|
|
26,224 |
|
|
7,954 |
|
30.3% |
|
260 |
bps |
Marriott Long Beach Downtown (1) |
|
|
8,842 |
|
|
(2,031) |
|
(23.0)% |
|
|
15,873 |
|
|
4,997 |
|
31.5% |
|
(5,450) |
bps |
The Bidwell Marriott Portland |
|
|
6,332 |
|
|
953 |
|
15.1% |
|
|
6,212 |
|
|
1,044 |
|
16.8% |
|
(170) |
bps |
Hilton New Orleans St. Charles |
|
|
7,706 |
|
|
2,741 |
|
35.6% |
|
|
8,373 |
|
|
3,502 |
|
41.8% |
|
(620) |
bps |
Oceans Edge Resort & Marina |
|
|
15,150 |
|
|
5,910 |
|
39.0% |
|
|
15,801 |
|
|
6,767 |
|
42.8% |
|
(380) |
bps |
Montage Healdsburg |
|
|
23,252 |
|
|
2,598 |
|
11.2% |
|
|
23,719 |
|
|
2,055 |
|
8.7% |
|
250 |
bps |
Four Seasons Resort Napa Valley |
|
|
21,311 |
|
|
(430) |
|
(2.0)% |
|
|
18,939 |
|
|
(28) |
|
(0.1)% |
|
(190) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio, Excluding Renovation Hotel (2) |
|
|
478,237 |
|
|
135,442 |
|
28.3% |
|
|
471,985 |
|
|
144,701 |
|
30.7% |
|
(240) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Renovation Hotel (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Confidante Miami Beach |
|
|
4,147 |
|
|
(721) |
|
(17.4)% |
|
|
23,286 |
|
|
7,087 |
|
30.4% |
|
(4,780) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Portfolio (3) |
|
|
482,384 |
|
|
134,721 |
|
27.9% |
|
|
495,271 |
|
|
151,788 |
|
30.6% |
|
(270) |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Prior Ownership (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hyatt Regency San Antonio Riverwalk |
|
|
(17,737) |
|
|
(7,232) |
|
N/A |
|
|
(27,314) |
|
|
(10,920) |
|
40.0% |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Sold Hotel (5) |
|
|
— |
|
|
— |
|
N/A |
|
|
51,562 |
|
|
13,678 |
|
26.5% |
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual Portfolio (6) |
|
$ |
464,647 |
|
$ |
127,489 |
|
27.4% |
|
$ |
519,519 |
|
$ |
154,546 |
|
29.7% |
|
N/A |
|
*Footnotes on page 23
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS |
|
Page 22 |
||||||
|
|
|
Supplemental Financial Information |
Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins
Q2 and YTD 2024/2023 Footnotes
(1) | Hotel Adjusted EBITDAre for the second quarter and first six months 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 second quarter and first six months 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 June 30, 2024, with the exception of The Confidante Miami Beach due to its renovation activity during the second quarter and first six months of 2024. Amounts included in this presentation for the Hyatt Regency San Antonio Riverwalk, acquired by the Company in April 2024, include both prior ownership results and the Company's results. The Company obtained prior ownership information from the previous owner of the Hyatt Regency San Antonio Riverwalk during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. |
(3) | Comparable Portfolio consists of all hotels owned by the Company as of June 30, 2024, and includes prior ownership information for the Hyatt Regency San Antonio Riverwalk as discussed in Note 2. |
(4) | Prior Ownership includes results for the Hyatt Regency San Antonio Riverwalk prior to the Company’s acquisition of the hotel in April 2024 as discussed in Note 2. |
(5) | Sold Hotel includes the Boston Park Plaza sold in October 2023. |
(6) | Actual Portfolio includes results for the 15 hotels owned by the Company during the second quarters and first six months of 2024 and 2023. |
PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS |
|
Page 23 |
||||||
|
|
|
||||||