SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR FOURTH QUARTER AND FULL YEAR 2023
Returned Nearly
Fourth Quarter 2023 Operational Results (as compared to Fourth Quarter 2022):
-
Net Income: Net income was
$127.0 million as compared to$17.5 million . Excluding the gain on the hotel sold during the quarter, fourth quarter 2023 net income would have been$3.2 million . -
Comparable RevPAR: Comparable RevPAR decreased 2.2% to
$206.58 . The average daily rate was$318.80 and occupancy was 64.8%. RevPAR at the Company's urban and convention hotels increased 3.5%. -
Adjusted EBITDAre: Adjusted EBITDAre, excluding noncontrolling interest decreased 20.5% to
$54.6 million . -
Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share decreased 26.9% to
$0.19 .
Full Year 2023 Operational Results (as compared to Full Year 2022):
-
Net Income: Net income was
$206.7 million as compared to$90.8 million . Excluding the gain on the one hotel sold during 2023 and the three hotels sold in 2022, net income in 2023 would have been$82.9 million as compared to$67.8 million in 2022. -
Comparable RevPAR: Comparable RevPAR increased 5.6% to
$226.56 . The average daily rate was$324.58 and occupancy was 69.8%. RevPAR at the Company's urban and convention hotels increased 15.6%. -
Adjusted EBITDAre: Adjusted EBITDAre, excluding noncontrolling interest increased 12.7% to
$263.4 million . -
Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 9.2% to
$0.95 .
Information regarding the non-GAAP financial measures disclosed in this release is provided below in "Non-GAAP Financial Measures." Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included later in this release.
Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts)
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Quarter Ended December 31, |
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Year Ended December 31, |
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2023 |
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2022 |
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Change |
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2023 |
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2022 |
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Change |
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Net Income |
$ |
127.0 |
|
$ |
17.5 |
|
627.2 |
% |
|
$ |
206.7 |
|
$ |
90.8 |
|
127.7 |
% |
Income Attributable to Common Stockholders per Diluted Share |
$ |
0.60 |
|
$ |
0.07 |
|
757.1 |
% |
|
$ |
0.93 |
|
$ |
0.34 |
|
173.5 |
% |
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Comparable Operating Statistics (1) |
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RevPAR |
$ |
206.58 |
|
$ |
211.32 |
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(2.2) |
% |
|
$ |
226.56 |
|
$ |
214.49 |
|
5.6 |
% |
Occupancy |
|
64.8 |
% |
|
65.3 |
% |
(50) |
bps |
|
|
69.8 |
% |
|
65.4 |
% |
440 |
bps |
Average Daily Rate |
$ |
318.80 |
|
$ |
323.62 |
|
(1.5) |
% |
|
$ |
324.58 |
|
$ |
327.97 |
|
(1.0) |
% |
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Comparable Operating Statistics, excluding The Confidante |
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RevPAR |
$ |
211.18 |
|
$ |
212.06 |
|
(0.4) |
% |
|
$ |
229.71 |
|
$ |
214.43 |
|
7.1 |
% |
Occupancy |
|
65.4 |
% |
|
65.1 |
% |
30 |
bps |
|
|
70.3 |
% |
|
65.1 |
% |
520 |
bps |
Average Daily Rate |
$ |
322.91 |
|
$ |
325.75 |
|
(0.9) |
% |
|
$ |
326.76 |
|
$ |
329.39 |
|
(0.8) |
% |
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Comparable Adjusted EBITDAre Margin, excluding The Confidante |
|
24.6 |
% |
|
26.2 |
% |
(160) |
bps |
|
|
27.9 |
% |
|
28.7 |
% |
(80) |
bps |
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Adjusted EBITDAre, excluding noncontrolling interest |
$ |
54.6 |
|
$ |
68.8 |
|
(20.5) |
% |
|
$ |
263.4 |
|
$ |
233.8 |
|
12.7 |
% |
Adjusted FFO Attributable to Common Stockholders |
$ |
39.0 |
|
$ |
53.7 |
|
(27.5) |
% |
|
$ |
196.5 |
|
$ |
184.6 |
|
6.4 |
% |
Adjusted FFO Attributable to Common Stockholders per Diluted Share |
$ |
0.19 |
|
$ |
0.26 |
|
(26.9) |
% |
|
$ |
0.95 |
|
$ |
0.87 |
|
9.2 |
% |
|
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(1) |
Comparable operating statistics presented in this release include all 14 hotels owned by the Company at |
The Company's actual results for the quarter ended
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Metric ($ in millions, except per share data) |
|
Quarter Ended |
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Quarter Ended
Actual Results |
|
Performance Relative |
Net Income |
|
$125 to |
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|
|
- |
Total Portfolio RevPAR Growth (2) |
|
- 3.0% to - 6.0% |
|
-2.2 % |
|
+ 230 bps |
Total Portfolio RevPAR Growth, excluding The Confidante |
|
- 0.5% to - 3.5% |
|
-0.4 % |
|
+ 160 bps |
Adjusted EBITDAre |
|
$48 to |
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Adjusted FFO Attributable to Common Stockholders |
|
$30 to |
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Adjusted FFO Attributable to Common Stockholders per Diluted Share |
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Diluted Weighted Average Shares Outstanding |
|
205,500,000 |
|
204,225,000 |
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- 1,275,000 |
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(1) |
Represents guidance presented on |
(2) |
RevPAR Growth reflects comparison to the fourth quarter of 2022. |
2023 Highlights
New Unsecured Term Loan and
Boston Park
The
Andaz Miami Beach Conversion: In the fourth quarter 2023, the Company began the transformation of The Confidante
Stock Repurchase Program. During 2023, the Company repurchased 5,971,192 shares of its common stock at an average purchase price of
Balance Sheet and Liquidity Update
As of
Operations Update
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January |
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All Hotels |
2024 (1) |
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2023 |
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Change |
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Room Revenue |
$ |
39.7 |
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$ |
41.7 |
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(4.9) |
% |
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RevPAR |
$ |
191.47 |
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$ |
201.54 |
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(5.0) |
% |
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Occupancy |
|
59.5 |
% |
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|
63.2 |
% |
|
(370) |
bps |
|
Average Daily Rate |
$ |
321.79 |
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$ |
318.89 |
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|
0.9 |
% |
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January |
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All Hotels Not Under Renovation (2) |
2024 (1) |
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2023 |
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Change |
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Room Revenue |
$ |
37.7 |
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$ |
37.2 |
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1.2 |
% |
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RevPAR |
$ |
203.33 |
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$ |
201.00 |
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1.2 |
% |
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Occupancy |
|
62.1 |
% |
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|
61.8 |
% |
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30 |
bps |
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Average Daily Rate |
$ |
327.42 |
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$ |
325.25 |
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|
0.7 |
% |
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(1) |
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(2) |
Excludes The Confidante |
Capital Investments Update
The Company invested
2024 Outlook
For the full year 2024, the Company expects:
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Metric ($ in millions, except per share data) |
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Year Ended
Guidance (1) |
Net Income |
|
$46 to |
Total Portfolio RevPAR Growth (2) |
|
+ 2.5% to + 5.5% |
Total Portfolio RevPAR Growth, excluding The Confidante |
|
+ 5.0% to + 8.0% |
Adjusted EBITDAre |
|
$230 to |
Adjusted FFO Attributable to Common Stockholders |
|
$159 to |
Adjusted FFO Attributable to Common Stockholders per Diluted Share |
|
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Diluted Weighted Average Shares Outstanding |
|
204,500,000 |
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|
(1) |
Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. |
(2) |
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
$11 million to$13 million in connection with planned capital investments, slightly less than in 2023. - Full year corporate overhead expense (excluding deferred stock amortization) of approximately
$21 million to$22 million . - Full year interest expense of approximately
$52 million to$55 million , including approximately$3 million in amortization of deferred financing costs. - 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 suspend operations late in the first quarter of 2024 to allow for extensive renovation work to be performed. The resort is expected to reopen as Andaz Miami Beach in 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.
Recent Developments
Corporate Responsibility Report. In
Dividend Update
On
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
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
Earnings Call
The Company will host a conference call to discuss fourth quarter and full year financial results on
About
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 increasing costs such as wages, employee-related benefits, food costs, commodity costs, including those used to renovate or reposition our hotels, property taxes, property and liability insurance, utilities and borrowing costs; 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 harmed by economic downturns 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, Hilton, Hyatt, Four Seasons or Montage. 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. Noncompliance with such regulations could subject us to penalties, loss of value of our properties or civil damages; corporate responsibility, specifically related to 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, and 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
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
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, excluding noncontrolling interest (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
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, excluding noncontrolling interest, 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, excluding noncontrolling interest 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 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, excluding noncontrolling interest or Adjusted FFO attributable to common stockholders:
-
Amortization of deferred stock compensation: we exclude the noncash expense incurred with the amortization of deferred stock compensation as this expense is based on historical stock prices at the date of grant to our corporate employees and does not reflect the underlying performance of our hotels.
-
Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles because it is based on historical cost accounting and is of lesser significance in evaluating our actual performance for the current period.
-
Gains or losses from debt transactions: we exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of deferred financing costs from the original issuance of the debt being redeemed or retired because, like interest expense, their removal helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure.
-
Cumulative effect of a change in accounting principle: from time to time, the FASB promulgates new accounting standards that require the consolidated statement of operations to reflect the cumulative effect of a change in accounting principle. We exclude these one-time adjustments, which include the accounting impact from prior periods, because they do not reflect our actual performance for that period.
- Other adjustments: we exclude other adjustments that we believe are outside the ordinary course of business because we do not believe these costs reflect our actual performance for the period and/or the ongoing operations of our hotels. Such items may include: lawsuit settlement costs; the write-off of development costs associated with abandoned projects; property-level restructuring, severance, pre-opening and management transition costs; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments.
In addition, to derive Adjusted EBITDAre, excluding noncontrolling interest we exclude the noncontrolling partner's pro rata share of the net income allocated to the
To derive Adjusted FFO attributable to common stockholders, we also exclude the noncash interest on our derivatives and finance lease obligation as we believe that these items are not reflective of our ongoing finance costs. Additionally, we exclude the noncontrolling partner's pro rata share of any FFO adjustments related to our consolidated
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.
Comparable operating statistics in this release include both prior ownership results and the Company's ownership results for The Confidante
Reconciliations of net income to EBITDAre, Adjusted EBITDAre, excluding noncontrolling interest, 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.
For Additional Information:
(949) 382-3018
Sunstone Hotel Investors, Inc. |
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Consolidated Balance Sheets |
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(In thousands, except share and per share data) |
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2023 |
|
2022 |
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|
||
Assets |
|
|
|
|
|
|
Investment in hotel properties, net |
|
$ |
2,585,279 |
|
$ |
2,840,928 |
Operating lease right-of-use assets, net |
|
|
12,755 |
|
|
15,025 |
Cash and cash equivalents |
|
|
426,403 |
|
|
101,223 |
Restricted cash |
|
|
67,295 |
|
|
55,983 |
Accounts receivable, net |
|
|
31,206 |
|
|
42,092 |
Prepaid expenses and other assets, net |
|
|
26,383 |
|
|
27,566 |
Total assets |
|
$ |
3,149,321 |
|
$ |
3,082,817 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Debt, net of unamortized deferred financing costs |
|
$ |
814,559 |
|
$ |
812,681 |
Operating lease obligations |
|
|
16,735 |
|
|
19,012 |
Accounts payable and accrued expenses |
|
|
48,410 |
|
|
73,735 |
Dividends and distributions payable |
|
|
29,965 |
|
|
13,995 |
Other liabilities |
|
|
73,014 |
|
|
78,433 |
Total liabilities |
|
|
982,683 |
|
|
997,856 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
Preferred stock, |
|
|
|
|
|
|
Series G Cumulative Redeemable Preferred Stock, 2,650,000 shares issued and outstanding at both |
|
|
66,250 |
|
|
66,250 |
6.125% Series H Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at both |
|
|
115,000 |
|
|
115,000 |
5.70% Series I Cumulative Redeemable Preferred Stock, 4,000,000 shares issued and outstanding at both |
|
|
100,000 |
|
|
100,000 |
Common stock, |
|
|
2,035 |
|
|
2,093 |
Additional paid in capital |
|
|
2,416,417 |
|
|
2,465,595 |
Distributions in excess of retained earnings |
|
|
(533,064) |
|
|
(663,977) |
Total stockholders' equity |
|
|
2,166,638 |
|
|
2,084,961 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
3,149,321 |
|
$ |
3,082,817 |
Sunstone Hotel Investors, Inc. |
||||||||||||
Consolidated Statements of Operations |
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(In thousands, except per share data) |
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||||||||||||
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
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|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
|
|
(unaudited) |
|
|
||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
134,973 |
|
$ |
147,277 |
|
$ |
619,277 |
|
$ |
576,170 |
Food and beverage |
|
|
63,880 |
|
|
65,847 |
|
|
277,514 |
|
|
240,564 |
Other operating |
|
|
20,372 |
|
|
31,020 |
|
|
89,689 |
|
|
95,319 |
Total revenues |
|
|
219,225 |
|
|
244,144 |
|
|
986,480 |
|
|
912,053 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
35,246 |
|
|
38,691 |
|
|
158,002 |
|
|
145,285 |
Food and beverage |
|
|
45,511 |
|
|
48,187 |
|
|
193,820 |
|
|
174,146 |
Other operating |
|
|
5,690 |
|
|
5,380 |
|
|
23,721 |
|
|
23,345 |
Advertising and promotion |
|
|
12,272 |
|
|
12,559 |
|
|
51,958 |
|
|
46,979 |
Repairs and maintenance |
|
|
9,196 |
|
|
9,432 |
|
|
38,308 |
|
|
36,801 |
Utilities |
|
|
5,978 |
|
|
6,705 |
|
|
27,622 |
|
|
26,357 |
Franchise costs |
|
|
4,120 |
|
|
4,410 |
|
|
16,876 |
|
|
15,839 |
Property tax, ground lease and insurance |
|
|
18,476 |
|
|
15,819 |
|
|
78,796 |
|
|
68,979 |
Other property-level expenses |
|
|
27,593 |
|
|
30,003 |
|
|
120,247 |
|
|
113,336 |
Corporate overhead |
|
|
7,421 |
|
|
7,936 |
|
|
31,412 |
|
|
35,246 |
Depreciation and amortization |
|
|
29,135 |
|
|
32,393 |
|
|
127,062 |
|
|
126,396 |
Impairment losses |
|
|
— |
|
|
3,466 |
|
|
— |
|
|
3,466 |
Total operating expenses |
|
|
200,638 |
|
|
214,981 |
|
|
867,824 |
|
|
816,175 |
Interest and other income |
|
|
4,137 |
|
|
476 |
|
|
10,535 |
|
|
5,242 |
Interest expense |
|
|
(16,768) |
|
|
(11,717) |
|
|
(51,679) |
|
|
(32,005) |
Gain on sale of assets |
|
|
123,820 |
|
|
— |
|
|
123,820 |
|
|
22,946 |
Gain (loss) on extinguishment of debt, net |
|
|
8 |
|
|
26 |
|
|
9,938 |
|
|
(936) |
Income before income taxes |
|
|
129,784 |
|
|
17,948 |
|
|
211,270 |
|
|
91,125 |
Income tax provision, net |
|
|
(2,799) |
|
|
(485) |
|
|
(4,562) |
|
|
(359) |
Net income |
|
|
126,985 |
|
|
17,463 |
|
|
206,708 |
|
|
90,766 |
Income from consolidated joint venture attributable to noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,477) |
Preferred stock dividends |
|
|
(3,226) |
|
|
(3,350) |
|
|
(13,988) |
|
|
(14,247) |
Income attributable to common stockholders |
|
$ |
123,759 |
|
$ |
14,113 |
|
$ |
192,720 |
|
$ |
73,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income attributable to common stockholders per common share |
|
$ |
0.60 |
|
$ |
0.07 |
|
$ |
0.93 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding |
|
|
203,612 |
|
|
209,097 |
|
|
205,590 |
|
|
212,613 |
Diluted weighted average common shares outstanding |
|
|
203,833 |
|
|
209,109 |
|
|
205,865 |
|
|
212,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per common share |
|
$ |
0.13 |
|
$ |
0.05 |
|
$ |
0.30 |
|
$ |
0.10 |
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, Excluding Noncontrolling Interest |
||||||||||||
|
||||||||||||
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
126,985 |
|
$ |
17,463 |
|
$ |
206,708 |
|
$ |
90,766 |
Operations held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
29,135 |
|
|
32,393 |
|
|
127,062 |
|
|
126,396 |
Interest expense |
|
|
16,768 |
|
|
11,717 |
|
|
51,679 |
|
|
32,005 |
Income tax provision, net |
|
|
2,799 |
|
|
485 |
|
|
4,562 |
|
|
359 |
Gain on sale of assets |
|
|
(123,820) |
|
|
— |
|
|
(123,820) |
|
|
(22,946) |
Impairment losses - depreciable assets |
|
|
— |
|
|
1,379 |
|
|
— |
|
|
1,379 |
EBITDAre |
|
|
51,867 |
|
|
63,437 |
|
|
266,191 |
|
|
227,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation |
|
|
2,512 |
|
|
2,230 |
|
|
10,775 |
|
|
10,891 |
Amortization of right-of-use assets and obligations |
|
|
(20) |
|
|
(359) |
|
|
(102) |
|
|
(1,409) |
Amortization of contract intangibles, net |
|
|
— |
|
|
(18) |
|
|
(55) |
|
|
(61) |
Finance lease obligation interest - cash ground rent |
|
|
— |
|
|
— |
|
|
— |
|
|
(117) |
(Gain) loss on extinguishment of debt, net |
|
|
(8) |
|
|
(26) |
|
|
(9,938) |
|
|
936 |
Hurricane-related insurance restoration proceeds net of losses |
|
|
— |
|
|
— |
|
|
(3,722) |
|
|
(2,755) |
Property-level severance |
|
|
297 |
|
|
729 |
|
|
297 |
|
|
729 |
Costs associated with financing no longer pursued |
|
|
— |
|
|
697 |
|
|
— |
|
|
697 |
Impairment loss - right-of-use asset |
|
|
— |
|
|
2,087 |
|
|
— |
|
|
2,087 |
Noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,175) |
Adjustments to EBITDAre, net |
|
|
2,781 |
|
|
5,340 |
|
|
(2,745) |
|
|
5,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAre, excluding noncontrolling interest |
|
$ |
54,648 |
|
$ |
68,777 |
|
$ |
263,446 |
|
$ |
233,782 |
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 |
||||||||||||
|
||||||||||||
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
126,985 |
|
$ |
17,463 |
|
$ |
206,708 |
|
$ |
90,766 |
Preferred stock dividends |
|
|
(3,226) |
|
|
(3,350) |
|
|
(13,988) |
|
|
(14,247) |
Operations held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
|
28,979 |
|
|
32,023 |
|
|
126,435 |
|
|
124,819 |
Gain on sale of assets |
|
|
(123,820) |
|
|
— |
|
|
(123,820) |
|
|
(22,946) |
Noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,933) |
FFO attributable to common stockholders |
|
|
28,918 |
|
|
46,136 |
|
|
195,335 |
|
|
173,459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations held for investment: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred stock compensation |
|
|
2,512 |
|
|
2,230 |
|
|
10,775 |
|
|
10,891 |
Real estate amortization of right-of-use assets and obligations |
|
|
(134) |
|
|
(287) |
|
|
(505) |
|
|
(1,155) |
Amortization of contract intangibles, net |
|
|
105 |
|
|
78 |
|
|
357 |
|
|
422 |
Noncash interest on derivatives, net |
|
|
3,600 |
|
|
710 |
|
|
252 |
|
|
(2,194) |
(Gain) loss on extinguishment of debt, net |
|
|
(8) |
|
|
(26) |
|
|
(9,938) |
|
|
936 |
Hurricane-related insurance restoration proceeds net of losses |
|
|
— |
|
|
— |
|
|
(3,722) |
|
|
(2,755) |
Property-level severance |
|
|
297 |
|
|
729 |
|
|
297 |
|
|
729 |
Income tax related to hotel disposition |
|
|
3,662 |
|
|
— |
|
|
3,662 |
|
|
— |
Costs associated with financing no longer pursued |
|
|
— |
|
|
697 |
|
|
— |
|
|
697 |
Impairment losses - right-of-use and depreciable assets |
|
|
— |
|
|
3,466 |
|
|
— |
|
|
3,466 |
Noncontrolling interest |
|
|
— |
|
|
— |
|
|
— |
|
|
132 |
Adjustments to FFO attributable to common stockholders, net |
|
|
10,034 |
|
|
7,597 |
|
|
1,178 |
|
|
11,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders |
|
$ |
38,952 |
|
$ |
53,733 |
|
$ |
196,513 |
|
$ |
184,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO attributable to common stockholders per diluted share |
|
$ |
0.14 |
|
$ |
0.22 |
|
$ |
0.95 |
|
$ |
0.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders per diluted share |
|
$ |
0.19 |
|
$ |
0.26 |
|
$ |
0.95 |
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
203,612 |
|
|
209,097 |
|
|
205,590 |
|
|
212,613 |
Shares associated with unvested restricted stock awards |
|
|
613 |
|
|
449 |
|
|
508 |
|
|
358 |
Diluted weighted average shares outstanding |
|
|
204,225 |
|
|
209,546 |
|
|
206,098 |
|
|
212,971 |
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 |
||||
|
|
|
||||
|
|
|
Low |
|
|
High |
|
|
|
|
|
|
|
Net income |
|
$ |
45,500 |
|
$ |
70,500 |
Depreciation and amortization |
|
|
115,000 |
|
|
115,000 |
Interest expense |
|
|
53,500 |
|
|
53,500 |
Income tax provision |
|
|
1,000 |
|
|
1,000 |
Amortization of deferred stock compensation |
|
|
11,000 |
|
|
11,000 |
Pre-opening costs |
|
|
4,000 |
|
|
4,000 |
Adjusted EBITDAre |
|
$ |
230,000 |
|
$ |
255,000 |
Reconciliation of Net Income to Adjusted FFO Attributable to Common Stockholders |
||||||
|
||||||
|
|
Year Ended |
||||
|
|
|
||||
|
|
|
Low |
|
|
High |
|
|
|
|
|
|
|
Net income |
|
$ |
45,500 |
|
$ |
70,500 |
Preferred stock dividends |
|
|
(15,500) |
|
|
(15,500) |
Real estate depreciation and amortization |
|
|
114,000 |
|
|
114,000 |
Amortization of deferred stock compensation |
|
|
11,000 |
|
|
11,000 |
Pre-opening costs |
|
|
4,000 |
|
|
4,000 |
Adjusted FFO attributable to common stockholders |
|
$ |
159,000 |
|
$ |
184,000 |
|
|
|
|
|
|
|
Adjusted FFO attributable to common stockholders per diluted share |
|
$ |
0.78 |
|
$ |
0.90 |
|
|
|
|
|
|
|
Diluted weighted average shares outstanding |
|
|
204,500 |
|
|
204,500 |
Sunstone Hotel Investors, Inc. |
|||||||||||||
Non-GAAP Financial Measures |
|||||||||||||
Hotel Adjusted EBITDAre and Margins |
|||||||||||||
(Unaudited and in thousands) |
|||||||||||||
|
|||||||||||||
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
|
||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.0 % |
|
|
26.1 % |
|
|
27.5 % |
|
|
28.7 % |
|
|
|
|
24.6 % |
|
|
26.2 % |
|
|
27.9 % |
|
|
28.7 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
219,225 |
|
$ |
244,144 |
|
$ |
986,480 |
|
$ |
912,053 |
|
Non-hotel revenues (2) |
|
|
— |
|
|
(18) |
|
|
(55) |
|
|
(75) |
|
Business interruption insurance proceeds (3) |
|
|
— |
|
|
(9,987) |
|
|
— |
|
|
(9,987) |
|
|
|
|
219,225 |
|
|
234,139 |
|
|
986,425 |
|
|
901,991 |
|
Prior ownership hotel revenues (4) |
|
|
— |
|
|
— |
|
|
— |
|
|
22,637 |
|
Sold hotel revenues (5) |
|
|
(11,131) |
|
|
(26,797) |
|
|
(96,713) |
|
|
(97,915) |
|
|
|
|
208,094 |
|
|
207,342 |
|
|
889,712 |
|
|
826,713 |
|
The Confidante |
|
|
(4,745) |
|
|
(10,030) |
|
|
(32,730) |
|
|
(43,070) |
|
|
|
$ |
203,349 |
|
$ |
197,312 |
|
$ |
856,982 |
|
$ |
783,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
126,985 |
|
$ |
17,463 |
|
$ |
206,708 |
|
$ |
90,766 |
|
Non-hotel revenues (2) |
|
|
— |
|
|
(18) |
|
|
(55) |
|
|
(75) |
|
Business interruption insurance proceeds related to owned hotels (7) |
|
|
— |
|
|
(6,157) |
|
|
— |
|
|
(6,157) |
|
Non-hotel operating expenses, net (8) |
|
|
(274) |
|
|
(6,466) |
|
|
(1,169) |
|
|
(7,551) |
|
Taxes assessed on commercial rents (9) |
|
|
109 |
|
|
61 |
|
|
553 |
|
|
176 |
|
Property-level legal fees (10) |
|
|
— |
|
|
208 |
|
|
— |
|
|
208 |
|
Property-level severance (11) |
|
|
297 |
|
|
974 |
|
|
297 |
|
|
974 |
|
Property-level hurricane-related restoration expenses (12) |
|
|
— |
|
|
306 |
|
|
— |
|
|
1,920 |
|
Corporate overhead |
|
|
7,421 |
|
|
7,936 |
|
|
31,412 |
|
|
35,246 |
|
Depreciation and amortization |
|
|
29,135 |
|
|
32,393 |
|
|
127,062 |
|
|
126,396 |
|
Impairment losses |
|
|
— |
|
|
3,466 |
|
|
— |
|
|
3,466 |
|
Interest and other income |
|
|
(4,137) |
|
|
(476) |
|
|
(10,535) |
|
|
(5,242) |
|
Interest expense |
|
|
16,768 |
|
|
11,717 |
|
|
51,679 |
|
|
32,005 |
|
Gain on sale of assets |
|
|
(123,820) |
|
|
— |
|
|
(123,820) |
|
|
(22,946) |
|
(Gain) loss on extinguishment of debt, net |
|
|
(8) |
|
|
(26) |
|
|
(9,938) |
|
|
936 |
|
Income tax provision, net |
|
|
2,799 |
|
|
485 |
|
|
4,562 |
|
|
359 |
|
|
|
|
55,275 |
|
|
61,866 |
|
|
276,756 |
|
|
250,481 |
|
Prior ownership hotel Adjusted EBITDAre (4) |
|
|
— |
|
|
— |
|
|
— |
|
|
8,630 |
|
Sold hotel Adjusted EBITDAre (5) |
|
|
(5,420) |
|
|
(7,782) |
|
|
(32,024) |
|
|
(22,005) |
|
|
|
|
49,855 |
|
|
54,084 |
|
|
244,732 |
|
|
237,106 |
|
The Confidante |
|
|
220 |
|
|
(2,474) |
|
|
(5,881) |
|
|
(12,421) |
|
|
|
$ |
50,075 |
|
$ |
51,610 |
|
$ |
238,851 |
|
$ |
224,685 |
|
*Footnotes on following page
(1) |
|
(2) |
Non-hotel revenues include the amortization of any favorable or unfavorable contract intangibles recorded in conjunction with the Company's hotel acquisitions. |
(3) |
Business interruption insurance proceeds include |
(4) |
Prior ownership hotel revenues and Adjusted EBITDAre include results for The Confidante |
(5) |
Sold hotel revenues and Adjusted EBITDAre for all periods presented include results for the |
(6) |
The Confidante |
(7) |
Business interruption insurance proceeds related to owned hotels include |
(8) |
Non-hotel operating expenses, net for all periods presented include the amortization of hotel real estate-related right-of-use assets and obligations. Non-hotel operating expenses, net for both the full years of 2023 and 2022 include prior year property tax credits related to sold hotels. Non-hotel operating expenses, net for both the fourth quarter and full year of 2022 include |
(9) |
Taxes assessed on commercial rents include |
(10) |
Property-level legal fees for both the fourth quarter and full year of 2022 include |
(11) |
Property-level severance for the fourth quarter and full year of 2023 includes |
(12) |
Property-level hurricane-related restoration expenses for the fourth quarter and full year of 2022 include a total of |
View original content:https://www.prnewswire.com/news-releases/sunstone-hotel-investors-reports-results-for-fourth-quarter-and-full-year-2023-302069350.html
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