ALISO VIEJO, Calif., May 2, 2017 — Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO) today announced results for the first quarter ended March 31, 2017.
First Quarter 2017 Operational Results (as compared to First Quarter 2016):
- Net income, which includes the gain recognized on the Company's February 2017 sale of the Fairmont Newport Beach, increased 5,148.9% to $63.8 million.
- Income attributable to common stockholders per diluted share increased 1,450.0% to $0.27.
- 27 Hotel Portfolio RevPAR increased 5.5% to $158.10.
- 27 Hotel Portfolio Adjusted EBITDA Margin, excluding prior year property tax adjustments, net increased 220 basis points to 27.6%. Excluding the Wailea Beach Resort, due to its extensive repositioning during the first quarter of 2016, the Hotel Portfolio Adjusted EBITDA Margin, excluding prior year property tax adjustments, net would have increased by 190 basis points.
- Adjusted EBITDA increased 12.5% to $69.6 million.
- Adjusted FFO attributable to common stockholders per diluted share increased 14.3% to $0.24.
John Arabia, President and Chief Executive Officer, stated, "In the first quarter, our portfolio generated strong revenue and profit growth that notably exceeded our expectations. Not only was demand and pricing stronger than anticipated in a large number of our hotels, but more importantly, our two recently repositioned hotels, the Boston Park Plaza and the Wailea Beach Resort, generated RevPAR and earnings gains that materially exceeded our forecasts. Furthermore, we have been pleasantly surprised that group attendance across our portfolio continues to materialize at the high-end of its historic norm, recent spend on group banquet and audio visual has been robust, and group production and pace for all future periods has accelerated. While increasing supply in a number of hotel markets and various geopolitical risks warrant conservatism and point to a wide range of potential outcomes for hotel revenue growth, first quarter trends have given us greater confidence in our near-term earnings prospects. As a result, we have increased our full-year 2017 earnings guidance."
UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA
($ in millions, except RevPAR, ADR and per share amounts)
Three Months Ended March 31,
2017
2016
Change
Net Income
$
63.8
$
1.2
5,148.9
%
Income (Loss) Attributable to Common Stockholders per Diluted Share
$
0.27
$
(0.02)
1,450.0
%
27 Hotel Portfolio RevPAR
$
158.10
$
149.80
5.5
%
27 Hotel Portfolio Occupancy
77.7
%
77.8
%
(10)
bps
27 Hotel Portfolio ADR
$
203.48
$
192.54
5.7
%
27 Hotel Portfolio Adjusted EBITDA Margin
27.6
%
25.4
%
220
bps
Adjusted EBITDA
$
69.6
$
61.8
12.5
%
Adjusted FFO Attributable to Common Stockholders
$
53.2
$
44.2
20.2
%
Adjusted FFO Attributable to Common Stockholders per Diluted Share
$
0.24
$
0.21
14.3
%
Disclosures regarding the non-GAAP financial measures in this release are included on pages 4 through 6. Reconciliations of non-GAAP financial measures to the most comparable GAAP measure for each of the periods presented are included on pages 9 through 13 of this release. 27 Hotel Portfolio Adjusted EBITDA Margin excludes prior year property tax adjustments, net.
The Company's actual results for the quarter ended March 31, 2017 compare to its guidance originally provided as follows:
Metric
Quarter Ended March 31, 2017 Guidance (1)
Quarter Ended March 31, 2017 Actual Results (unaudited)
Performance Relative to Prior Guidance Midpoint
Net Income ($ millions)
$54 to $57
$64
+ $8
27 Hotel Portfolio RevPAR Growth
+ 2.5% to + 4.5%
5.5%
+ 2.0%
Adjusted EBITDA ($ millions)
$61 to $64
$70
+ $7
Adjusted FFO Attributable to Common Stockholders ($ millions)
$43 to $46
$53
+ $9
Adjusted FFO Attributable to Common Stockholders per Diluted Share
$0.19 to $0.21
$0.24
+ $0.04
Diluted Weighted Average Shares Outstanding
219,600,000
219,400,000
– 200,000
(1)
Represents guidance presented on February 21, 2017.
Balance Sheet/Liquidity Update
As of March 31, 2017, the Company had $506.2 million of cash and cash equivalents, including restricted cash of $64.4 million.
As of March 31, 2017, the Company had total assets of $3.7 billion, including $3.1 billion of net investments in hotel properties, total consolidated debt of $1.0 billion and stockholders' equity of $2.5 billion.
Capital Improvements
The Company invested $29.9 million into capital improvements of its portfolio during the three months ended March 31, 2017. In 2017, the Company expects to invest approximately $125 million to $140 million into its portfolio, which includes the final payments for the Wailea Beach Resort repositioning completed at the end of 2016.
To view full financial release and corresponding tables please click the PDF icon or visit: http://phx.corporate-ir.net/phoenix.zhtml?c=181566&p=irol-news&nyo=0
