Sunstone Hotel Investors(SHO) - 2024 Q2 - Quarterly Results

Corporate Profile and Disclosures Regarding Non-GAAP Financial Measures Sunstone Hotel Investors, Inc. is a lodging REIT that details its business strategy and the non-GAAP financial measures used for performance reporting Corporate Profile Sunstone Hotel Investors, Inc. is a lodging REIT focused on acquiring, owning, and disposing of hotel properties to create long-term value - Sunstone is a lodging REIT owning 15 hotels with a total of 7,255 rooms[3] - The company's strategy focuses on creating long-term stakeholder value through strategic hotel real estate transactions[3] Non-GAAP Financial Measures The company uses non-GAAP measures like EBITDAre and FFO, adjusted for non-cash and non-recurring items, to provide supplemental performance insights - The company utilizes non-GAAP measures such as EBITDAre, Adjusted EBITDAre, FFO, and Adjusted FFO to supplement GAAP results[4] - Adjustments to EBITDAre and FFO exclude non-cash expenses, gains/losses from debt transactions, and other non-recurring costs[5] Comparable Corporate Financial Information This section provides key comparable consolidated financial statements and reconciliations of GAAP net income to non-GAAP measures Comparable Consolidated Statements of Operations Q2 2024 saw total revenues of $251.7 million and net income of $28.2 million, with Comparable Adjusted FFO per diluted share at $0.29 Key Financial Performance (in thousands, except per share data) | Metric | Q2 2024 | Q1 2024 | Trailing 12 Months | | :--- | :--- | :--- | :--- | | Total Revenues | $251,681 | $230,703 | $928,855 | | Net Income | $28,232 | $14,690 | $56,281 | | Comparable Hotel Adjusted EBITDAre | $77,322 | $57,399 | $247,933 | | Comparable Adjusted EBITDAre | $75,651 | $59,615 | $244,628 | | Comparable Adjusted FFO per diluted share | $0.29 | $0.21 | $0.88 | Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre Net income of $26.1 million was reconciled to Comparable Adjusted EBITDAre of $75.7 million for Q2 2024, with key adjustments for non-cash items Reconciliation to Comparable Adjusted EBITDAre (in thousands) | Metric | Q2 2024 | Trailing 12 Months | | :--- | :--- | :--- | | Net Income | $26,142 | $181,720 | | EBITDAre | $70,202 | $235,084 | | Adjusted EBITDAre | $73,523 | $246,394 | | Comparable Adjusted EBITDAre | $75,651 | $244,628 | Reconciliation of Net Income to FFO and Adjusted FFO Q2 2024 net income of $26.1 million was reconciled to Comparable Adjusted FFO of $58.8 million, yielding $0.29 per diluted share Reconciliation to Comparable Adjusted FFO (in thousands) | Metric | Q2 2024 | Trailing 12 Months | | :--- | :--- | :--- | | Net Income | $26,142 | $181,720 | | FFO attributable to common stockholders | $53,230 | $165,155 | | Adjusted FFO attributable to common stockholders | $56,626 | $179,446 | | Comparable Adjusted FFO attributable to common stockholders | $58,754 | $177,680 | Capitalization This section outlines the company's capital structure, including equity, debt, and key capitalization ratios Comparative Capitalization As of June 30, 2024, total capitalization was $3.23 billion, with a total debt to capitalization ratio of 25.4% Capitalization as of June 30, 2024 (in thousands) | Metric | Value | | :--- | :--- | | Market value of common equity | $2,127,464 | | Total debt | $817,978 | | Total capitalization | $3,226,692 | | Total debt to total capitalization | 25.4% | | Total debt and preferred equity to total capitalization | 34.1% | - The common dividend per share for Q2 2024 was $0.09, an increase from $0.07 in Q1 2024[10] Debt and Preferred Stock Summary As of June 30, 2024, total debt was $818.0 million with a 2.5-year weighted average maturity and 5.80% average interest rate Debt Statistics as of June 30, 2024 | Metric | Value | | :--- | :--- | | Total Debt | $817,978 thousand | | % Fixed Rate Debt | 51.1% | | % Floating Rate Debt | 48.9% | | Average Interest Rate | 5.80% | | Weighted Average Maturity of Debt | 2.5 years | - Total preferred stock outstanding amounts to $281.25 million across Series G, H, and I[11] Property-Level Data and Operating Statistics This section presents detailed property-level data and key operating statistics for the company's hotel portfolio Hotel Portfolio Information As of August 7, 2024, Sunstone's portfolio comprises 15 hotels with 7,255 rooms, including the recently acquired Hyatt Regency San Antonio Riverwalk - The total portfolio consists of 15 hotels with 7,255 rooms[12] - The company acquired the Hyatt Regency San Antonio Riverwalk in 2024[12] - The Hilton San Diego Bayfront is the largest hotel with 1,190 rooms, accounting for 16% of total rooms[12] Property-Level Operating Statistics Q2 2024 comparable RevPAR increased by 0.4% to $242, while YTD RevPAR saw a slight decrease due to renovation impacts Comparable Portfolio Operating Statistics (Excluding Renovation Hotel) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | ADR | $323 | $322 | 0.3% | | Occupancy | 75.0% | 74.9% | 10 bps | | RevPAR | $242 | $241 | 0.4% | | TRevPAR | $396 | $388 | 2.0% | Comparable Portfolio Operating Statistics YTD (Excluding Renovation Hotel) | Metric | YTD 2024 | YTD 2023 | Change | | :--- | :--- | :--- | :--- | | ADR | $319 | $321 | (0.4)% | | Occupancy | 72.7% | 72.5% | 20 bps | | RevPAR | $232 | $233 | (0.1)% | | TRevPAR | $376 | $374 | 0.7% | - Operating statistics in 2024 were impacted by renovation activity at Marriott Long Beach Downtown and The Confidante Miami Beach, which temporarily suspended operations[15] Property-Level Revenues, Adjusted EBITDAre & Adjusted EBITDAre Margins This section details property-level revenues, Adjusted EBITDAre, and margins, including adjustments for portfolio changes Q2 2024 Performance Q2 2024 comparable portfolio generated $251.7 million in revenues and $77.3 million in Hotel Adjusted EBITDAre, with a 30.7% margin Comparable Portfolio Performance - Q2 2024 vs Q2 2023 (in thousands) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $251,681 | $255,181 | (1.4)% | | Hotel Adjusted EBITDAre | $77,322 | $81,139 | (4.7)% | | Hotel Adjusted EBITDAre Margin | 30.7% | 31.8% | (110) bps | YTD 2024 Performance YTD 2024 comparable portfolio revenues reached $482.4 million, with Hotel Adjusted EBITDAre of $134.7 million and a 27.9% margin Comparable Portfolio Performance - YTD 2024 vs YTD 2023 (in thousands) | Metric | YTD 2024 | YTD 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $482,384 | $495,271 | (2.6)% | | Hotel Adjusted EBITDAre | $134,721 | $151,788 | (11.2)% | | Hotel Adjusted EBITDAre Margin | 27.9% | 30.6% | (270) bps | Portfolio Adjustments Comparable Portfolio figures include all 15 hotels as of June 30, 2024, incorporating prior ownership results for recent acquisitions and excluding prior sales - Comparable Portfolio data includes prior ownership results for the Hyatt Regency San Antonio Riverwalk, acquired in April 2024[18] - Historical comparisons are impacted by the sale of the Boston Park Plaza in October 2023, excluded from comparable portfolio data[18]