Sunstone Hotel Investors Reports Results For Third Quarter 2019

Completes the Sale of the Leasehold Interest in the Courtyard by Marriott Los Angeles

Published

IRVINE, Calif., Nov. 4, 2019 /PRNewswire/ -- Sunstone Hotel Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO), the owner of Long-Term Relevant Real Estate® in the hospitality sector, today announced results for the third quarter ended September 30, 2019.

Third Quarter 2019 Operational Results (as compared to Third Quarter 2018):

  • Net income decreased 63.4% to $33.5 million. Excluding the effect of the four hotels sold during the third and fourth quarters of 2018, net income would have decreased 12.0%.
  • Income attributable to common stockholders per diluted common share decreased 68.4% to $0.12. Excluding the effect of the four hotels sold during the third and fourth quarters of 2018, income attributable to common stockholders per diluted common share would have decreased 14.3%.
  • 21 Hotel Total Portfolio RevPAR increased 0.9% to $201.93.
  • 20 Hotel Comparable Portfolio RevPAR increased 0.9% to $202.57.
  • 20 Hotel Comparable Portfolio Adjusted EBITDAre, excluding prior year property tax adjustments, net decreased 1.5% to $85.8 million.
  • 20 Hotel Comparable Portfolio Adjusted EBITDAre Margin, excluding prior year property tax adjustments, net decreased 100 basis points to 30.8%.
  • Adjusted EBITDAre, excluding noncontrolling interest decreased 4.0% to $81.2 million. Excluding the effect of the four hotels sold during the third and fourth quarters of 2018, Adjusted EBITDAre, excluding noncontrolling interest would have decreased 2.3%.
  • Adjusted FFO attributable to common stockholders per diluted share decreased 3.3% to $0.29. Excluding the effect of the four hotels sold during the third and fourth quarters of 2018, Adjusted FFO attributable to common stockholders per diluted share would have remained constant at $0.29.

John Arabia, President and Chief Executive Officer, stated, "We are pleased with our third quarter operating results and earnings, which met or exceeded our previously provided guidance despite moderating revenue growth and a challenging expense environment. Our favorable geographic concentration combined with the quality and condition of our hotels resulted in above average revenue growth compared to the industry average of the Luxury and Upper Upscale hotels in the top 25 markets."

Mr. Arabia added, "Subsequent to the end of the quarter, we were able to take advantage of a favorable transaction market and dispose of the leasehold interest in the Courtyard by Marriott Los Angeles at a trailing cap rate considerably lower than that implied by our current share price. This transaction not only makes sense financially, but further concentrates our 20-hotel portfolio in Long-Term Relevant Real Estate. We expect to distribute the gain on this sale to our stockholders through our fourth quarter dividend. Additionally, we retain significant liquidity that provides us with the ability to create long-term shareholder value through the continued repurchases of our common stock or through the acquisition of additional Long-Term Relevant Real Estate."

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA
($ in millions, except RevPAR, ADR and per share amounts)
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 Change 2019 2018 Change
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) %
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net.
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 Change 2019 2018 Change
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) %
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

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.

The Company's actual results for the quarter ended September 30, 2019 compare to its guidance originally provided as follows:

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint
Net Income ($ millions) $32  to  $36 $34
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4%
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint
Net Income ($ millions) $32  to  $36 $34
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4%
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

Recent Developments

On October 23, 2019, the Company sold the leased fee interest in the 187-room Courtyard by Marriott Los Angeles for a gross sale price of $50 million or approximately $267,000 per key. The sale price represents a 13.8x multiple on trailing 12-month hotel Adjusted EBITDAre and a 6.2% capitalization rate on trailing 12-month net operating income.

Through the date of this release, the Company has repurchased 3,783,936 shares of its common stock at an average price of $13.22 per share. Approximately $250 million of authorization capacity under the Company's $300 million stock repurchase program remains.

Balance Sheet/Liquidity Update

As of September 30, 2019, the Company had $776.2 million of cash and cash equivalents, including restricted cash of $46.2 million, total assets of $3.9 billion, including $2.9 billion of net investments in hotel properties, total consolidated debt of $977.1 million and stockholders' equity of $2.7 billion.

Capital Improvements

The Company invested $22.5 million and $75.3 million into capital improvements of its portfolio during the three and nine months ended September 30, 2019, respectively. In 2019, the Company expects to invest approximately $100 million to $110 million into its portfolio. As of the quarter ended September 30, 2019, the Company completed its previously announced 2019 renovation programs at the Hilton San Diego Bayfront, the Renaissance Harborplace and the Hyatt Regency San Francisco.  The Company incurred approximately $5 million of total revenue displacement during the first nine months of 2019 related to is major capital improvement projects.

2019 Outlook

The Company's achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in the Company's filings with the Securities and Exchange Commission. The Company's guidance does not take into account the impact of any unanticipated developments in its business, changes in its operating environment, or any unannounced hotel acquisitions, dispositions, re-brandings, management changes, transition costs, legal settlements, noncash impairment expense, changes in deferred tax assets or valuation allowances, severance costs associated with restructuring hotel services, uninsured property losses, early lease termination costs, prior year property tax assessments or credits, debt repurchases/repayments, stock repurchases or unannounced financings during 2019.

For the fourth quarter of 2019, the Company expects:

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1)
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5%
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

For the full year of 2019, the Company expects:

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25%
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release.
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019.
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) %
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 %
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 %
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 %
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) %
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) %
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) %

Fourth quarter and full year 2019 guidance are based in part on the following assumptions:

  • Full year total revenue displacement of approximately $5 million and full year Adjusted EBITDAre, excluding noncontrolling interest displacement of approximately $4 million related to 2019 major capital investment projects.
  • Full year 20 Hotel Comparable Portfolio Adjusted EBITDAre Margin is expected to decline 50 basis points to 75 basis points.
  • Full year corporate overhead expense (excluding deferred stock amortization) of approximately $21 million.
  • Full year amortization of deferred stock compensation expense of approximately $9 million.
  • Full year interest expense of approximately $56 million, including approximately $3 million in amortization of deferred financing costs, approximately $3 million of finance lease obligation interest and approximately $7 million of noncash loss on derivatives.
  • Full year total preferred dividends of $13 million, which includes the Series E and Series F cumulative redeemable preferred stock.

Dividend Update

The Company expects to declare a fourth quarter "catch-up" dividend (the "Fourth Quarter Dividend") to stockholders of record as of December 31, 2019 of approximately $0.50 to $0.60 per share of common stock, payable in January 2020. The Fourth Quarter Dividend includes the expected gain from the sale of the Courtyard by Marriott Los Angeles. Excluding the gain on sale, the Fourth Quarter Dividend range would be approximately $0.35 to $0.45 per share of common stock, and when combined with the cumulative $0.15 per share dividend paid to date in 2019, would represent the Company's total annual distribution from business operations. The Fourth Quarter Dividend is expected to be paid in cash, and the Company will declare the final amount of the dividend in December 2019. The amount of the Fourth Quarter Dividend could be impacted by a variety of factors, including a material change in expected operating performance or by future asset sales that may result in a net taxable gain or loss. 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.

The Company's board of directors declared cash dividends of $0.434375 per share payable to its Series E cumulative redeemable preferred stockholders and $0.403125 per share payable to its Series F cumulative redeemable preferred stockholders. The dividends will be paid on January 15, 2020 to stockholders of record as of December 31, 2019.

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 guidance or other information provided to conform to actual results or changes in the Company's portfolio, capital structure or future expectations.

Earnings Call

The Company will host a conference call to discuss third quarter 2019 financial results on November 5, 2019, at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time). A live web cast of the call will be available via the Investor Relations section of the Company's website. Alternatively, investors may dial 1-786-789-4776 and reference confirmation code 6513308 to listen to the live call. A replay of the web cast 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 has interests in 20 hotels comprised of 10,609 rooms. Sunstone's business is to acquire, own, asset manage and renovate or reposition hotels considered to be Long-Term Relevant Real Estate®, the majority of which are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt. For further information, please visit Sunstone's website at www.sunstonehotels.com.

As demand for lodging generally fluctuates with the overall economy, we seek to own a portfolio of hotels that will maintain a high appeal with travelers over long periods of time and will generate economic earnings materially in excess of recurring capital requirements.

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: volatility in the debt or equity markets affecting our ability to acquire or sell hotel assets; international, national and local economic and business conditions, including the likelihood of a U.S. recession, government shutdown, changes in the European Union or global economic slowdown, as well as any type of flu, disease-related pandemic or the adverse effects of climate change, affecting the lodging and travel industry; the ability to maintain sufficient liquidity and our access to capital markets; terrorist attacks or civil unrest, which would affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt and equity agreements; relationships with property managers and franchisors; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations, which influence or determine wages, prices, construction procedures and costs; our ability to identify, successfully compete for and complete acquisitions; the performance of hotels after they are acquired; necessary capital expenditures and our ability to fund them and complete them with minimum disruption; our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; severe weather events or other natural disasters; risks impacting our ability to pay anticipated future dividends; and other risks and uncertainties associated with our business described in the Company's filings with the Securities and Exchange Commission. 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, 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 margin. 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, 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, 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 favorable and unfavorable contracts: we exclude the noncash amortization of the favorable management contract asset recorded in conjunction with our acquisition of the Hilton Garden Inn Chicago Downtown/Magnificent Mile, along with the favorable and unfavorable tenant lease contracts, as applicable, recorded in conjunction with our acquisitions of the Boston Park Plaza, the Hilton Garden Inn Chicago Downtown/Magnificent Mile, the Hyatt Regency San Francisco and the Wailea Beach Resort. We exclude the noncash amortization of favorable and unfavorable contracts 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.
  • Acquisition costs: under GAAP, costs associated with completed acquisitions that meet the definition of a business are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company or our hotels.
  • 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; prior year property tax assessments or credits; the write-off of development costs associated with abandoned projects; property-level restructuring, severance and management transition costs; lease terminations; and property insurance proceeds or uninsured losses.

In addition, to derive Adjusted EBITDAre, excluding noncontrolling interest we exclude the noncontrolling partner's pro rata share of the net income (loss) allocated to the Hilton San Diego Bayfront partnership, as well as the noncontrolling partner's pro rata share of any EBITDAre and Adjusted EBITDAre components. We also 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. In addition, we exclude the amortization of our right-of-use assets, which includes the amortization of our operating lease intangible, as well as the noncash expense incurred from straight-lining our 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. Additionally, we include an adjustment for the cash finance lease expenses recorded on the ground lease at the Courtyard by Marriott Los Angeles and the building lease at the Hyatt Centric Chicago Magnificent Mile. We determined that both of these leases are finance leases, and, therefore, we include a portion of the lease payments each month in interest expense. We adjust EBITDAre for these two finance leases in order to more accurately reflect the actual rent due to both hotels' lessors in the current period, as well as the operating performance of both 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, excluding noncontrolling interest 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 and finance lease obligations 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 Hilton San Diego Bayfront partnership. We also exclude the real estate amortization of our right-of-use assets, which includes the amortization of both our finance and operating lease intangibles, as well as the noncash expense incurred from straight-lining our lease obligations (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. In addition, we exclude 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 other than real estate investments.

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.

Our 20 Hotel Comparable Portfolio is comprised of all hotels owned by the Company as of September 30, 2019, except the Courtyard by Marriott Los Angeles, which we classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. We believe that providing comparable hotel data is useful to us and to investors in evaluating our operating performance because this measure helps us and investors evaluate and compare the results of our operations from period to period by removing the fluctuations caused by any acquisitions or dispositions, as well as by those hotels that we classify as held for sale, those hotels that are undergoing a material renovation or repositioning and those hotels whose room counts have materially changed during either the current or prior year. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

Reconciliations of net income to EBITDAre, Adjusted EBITDAre, excluding noncontrolling interest, FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders, as well as reconciliations and the components of hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margin are set forth in the following pages of this release.

For Additional Information:Bryan GigliaSunstone Hotel Investors, Inc.(949) 382-3036

Aaron ReyesSunstone Hotel Investors, Inc.(949) 382-3018

 

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data)
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31,
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited)
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets:
Cash and cash equivalents $ 730,039 $ 809,316
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844
Prepaid expenses and other current assets 14,359 12,261
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998
Finance lease right-of-use asset, net 48,019
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817
Total assets $ 3,898,837 $ 3,972,833
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses $ 33,140 $ 30,425
Accrued payroll and employee benefits 21,371 25,039
Dividends and distributions payable 14,451 126,461
Other current liabilities 45,843 44,962
Current portion of notes payable, net 6,271 5,838
Liabilities of assets held for sale 12,446
Total current liabilities 133,522 232,725
Notes payable, less current portion, net 966,496 971,225
Finance lease obligations, less current portion 15,571 27,009
Operating lease obligations, less current portion 50,905
Other liabilities 19,824 30,703
Total liabilities 1,186,318 1,261,662
Commitments and contingencies
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
6.95% Series E Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 115,000 115,000
6.45% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 75,000 75,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 224,861,978 shares issued and outstanding at September 30, 2019 and 228,246,247 shares issued and outstanding at December 31, 2018 2,249 2,282
Additional paid in capital 2,681,754 2,728,684
Retained earnings 1,274,039 1,182,722
Cumulative dividends and distributions (1,483,907) (1,440,202)
Total stockholders' equity 2,664,135 2,663,486
Noncontrolling interest in consolidated joint venture 48,384 47,685
Total equity 2,712,519 2,711,171
Total liabilities and equity $ 3,898,837 $ 3,972,833

 

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets Unaudited Consolidated Statements of Operations
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data) (In thousands, except per share data)
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018 2019 2018 2019 2018
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited)
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets Revenues
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets: Room $ 200,242 $ 207,657 $ 580,835 $ 608,237
Cash and cash equivalents $ 730,039 $ 809,316 Food and beverage 61,366 63,911 206,183 217,469
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053 Other operating 20,031 17,740 55,197 52,495
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844 Total revenues 281,639 289,308 842,215 878,201
Prepaid expenses and other current assets 14,359 12,261 Operating expenses
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481 Room 52,514 53,928 152,606 159,923
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474 Food and beverage 44,928 46,260 140,149 147,299
Other operating 4,162 4,190 12,494 12,488
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998 Advertising and promotion 13,285 13,593 40,998 41,815
Finance lease right-of-use asset, net 48,019 Repairs and maintenance 10,632 10,530 31,107 32,484
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512 Utilities 7,458 8,084 20,656 22,533
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544 Franchise costs 8,606 9,167 24,024 26,981
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817 Property tax, ground lease and insurance 21,880 20,369 62,842 63,658
Other property-level expenses 30,913 31,580 97,768 101,005
Total assets $ 3,898,837 $ 3,972,833 Corporate overhead 7,395 7,360 22,989 22,056
Depreciation and amortization 37,573 36,159 110,484 110,181
Liabilities and Equity Impairment loss 1,394
Current liabilities: Total operating expenses 239,346 241,220 716,117 741,817
Accounts payable and accrued expenses $ 33,140 $ 30,425 Interest and other income 3,762 2,592 13,497 7,049
Accrued payroll and employee benefits 21,371 25,039 Interest expense (13,259) (11,549) (43,401) (31,609)
Dividends and distributions payable 14,451 126,461 Gain on sale of assets 53,128 68,787
Other current liabilities 45,843 44,962 Income before income taxes 32,796 92,259 96,194 180,611
Current portion of notes payable, net 6,271 5,838 Income tax benefit (provision), net 749 (673) 1,185 692
Liabilities of assets held for sale 12,446 Net income 33,545 91,586 97,379 181,303
Total current liabilities 133,522 232,725 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Preferred stock dividends (3,208) (3,208) (9,622) (9,622)
Notes payable, less current portion, net 966,496 971,225 Income attributable to common stockholders $ 27,829 $ 86,002 $ 81,695 $ 164,492
Finance lease obligations, less current portion 15,571 27,009
Operating lease obligations, less current portion 50,905 Basic and diluted per share amounts:
Other liabilities 19,824 30,703 Basic and diluted income attributable to common stockholders per common share $ 0.12 $ 0.38 $ 0.36 $ 0.73
Total liabilities 1,186,318 1,261,662
Basic and diluted weighted average common shares outstanding 224,530 227,068 226,369 225,538
Commitments and contingencies
Distributions declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
6.95% Series E Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 115,000 115,000
6.45% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 75,000 75,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 224,861,978 shares issued and outstanding at September 30, 2019 and 228,246,247 shares issued and outstanding at December 31, 2018 2,249 2,282
Additional paid in capital 2,681,754 2,728,684
Retained earnings 1,274,039 1,182,722
Cumulative dividends and distributions (1,483,907) (1,440,202)
Total stockholders' equity 2,664,135 2,663,486
Noncontrolling interest in consolidated joint venture 48,384 47,685
Total equity 2,712,519 2,711,171
Total liabilities and equity $ 3,898,837 $ 3,972,833

 

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets Unaudited Consolidated Statements of Operations Reconciliation of Net Income to Non-GAAP Financial Measures
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data) (In thousands, except per share data) (Unaudited and in thousands)
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30, Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018 2019 2018 2019 2018
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited) Three Months Ended September 30, Nine Months Ended September 30,
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets Revenues 2019 2018 2019 2018
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets: Room $ 200,242 $ 207,657 $ 580,835 $ 608,237
Cash and cash equivalents $ 730,039 $ 809,316 Food and beverage 61,366 63,911 206,183 217,469 Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053 Other operating 20,031 17,740 55,197 52,495 Operations held for investment:
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844 Total revenues 281,639 289,308 842,215 878,201 Depreciation and amortization 37,573 36,159 110,484 110,181
Prepaid expenses and other current assets 14,359 12,261 Operating expenses Interest expense 13,259 11,549 43,401 31,609
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481 Room 52,514 53,928 152,606 159,923 Income tax (benefit) provision, net (749) 673 (1,185) (692)
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474 Food and beverage 44,928 46,260 140,149 147,299 Gain on sale of assets (53,077) (68,740)
Other operating 4,162 4,190 12,494 12,488 Impairment loss 1,394
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998 Advertising and promotion 13,285 13,593 40,998 41,815 EBITDAre 83,628 86,890 250,079 255,055
Finance lease right-of-use asset, net 48,019 Repairs and maintenance 10,632 10,530 31,107 32,484
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512 Utilities 7,458 8,084 20,656 22,533 Operations held for investment:
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544 Franchise costs 8,606 9,167 24,024 26,981 Amortization of deferred stock compensation 2,146 2,073 7,168 6,938
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817 Property tax, ground lease and insurance 21,880 20,369 62,842 63,658 Amortization of favorable and unfavorable contracts, net (2) 3
Other property-level expenses 30,913 31,580 97,768 101,005 Amortization of right-of-use assets (1) (253) (385) (523) (832)
Total assets $ 3,898,837 $ 3,972,833 Corporate overhead 7,395 7,360 22,989 22,056 Finance lease obligation interest - cash ground rent (589) (590) (1,768) (1,768)
Depreciation and amortization 37,573 36,159 110,484 110,181 Hurricane-related uninsured losses (insurance proceeds), net 25 (990)
Liabilities and Equity Impairment loss 1,394 Prior year property tax adjustments, net (9) 289 117
Current liabilities: Total operating expenses 239,346 241,220 716,117 741,817 Prior owner contingency funding (900)
Accounts payable and accrued expenses $ 33,140 $ 30,425 Interest and other income 3,762 2,592 13,497 7,049 Noncontrolling interest:
Accrued payroll and employee benefits 21,371 25,039 Interest expense (13,259) (11,549) (43,401) (31,609) Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Dividends and distributions payable 14,451 126,461 Gain on sale of assets 53,128 68,787 Depreciation and amortization (793) (637) (2,072) (1,915)
Other current liabilities 45,843 44,962 Income before income taxes 32,796 92,259 96,194 180,611 Interest expense (532) (513) (1,650) (1,437)
Current portion of notes payable, net 6,271 5,838 Income tax benefit (provision), net 749 (673) 1,185 692 Amortization of right-of-use asset (1) 72 72 217 217
Liabilities of assets held for sale 12,446 Net income 33,545 91,586 97,379 181,303 (2,466) (2,333) (5,301) (6,856)
Total current liabilities 133,522 232,725 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Preferred stock dividends (3,208) (3,208) (9,622) (9,622) Adjusted EBITDAre, excluding noncontrolling interest $ 81,162 $ 84,557 $ 244,778 $ 248,199
Notes payable, less current portion, net 966,496 971,225 Income attributable to common stockholders $ 27,829 $ 86,002 $ 81,695 $ 164,492
Finance lease obligations, less current portion 15,571 27,009
Operating lease obligations, less current portion 50,905 Basic and diluted per share amounts:
Other liabilities 19,824 30,703 Basic and diluted income attributable to common stockholders per common share $ 0.12 $ 0.38 $ 0.36 $ 0.73
Total liabilities 1,186,318 1,261,662
Basic and diluted weighted average common shares outstanding 224,530 227,068 226,369 225,538
Commitments and contingencies
Distributions declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
6.95% Series E Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 115,000 115,000
6.45% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 75,000 75,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 224,861,978 shares issued and outstanding at September 30, 2019 and 228,246,247 shares issued and outstanding at December 31, 2018 2,249 2,282
Additional paid in capital 2,681,754 2,728,684
Retained earnings 1,274,039 1,182,722
Cumulative dividends and distributions (1,483,907) (1,440,202)
Total stockholders' equity 2,664,135 2,663,486
Noncontrolling interest in consolidated joint venture 48,384 47,685
Total equity 2,712,519 2,711,171
Total liabilities and equity $ 3,898,837 $ 3,972,833

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. (1) Amounts originally reported for the three and nine months ended September 30, 2018 for amortization of lease intangibles and noncash ground rent have been reclassified to amortization of right-of-use assets to conform to the current year's reporting.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets Unaudited Consolidated Statements of Operations Reconciliation of Net Income to Non-GAAP Financial Measures
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data) (In thousands, except per share data) (Unaudited and in thousands)
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30, Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018 2019 2018 2019 2018
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited) Three Months Ended September 30, Nine Months Ended September 30,
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets Revenues 2019 2018 2019 2018
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets: Room $ 200,242 $ 207,657 $ 580,835 $ 608,237
Cash and cash equivalents $ 730,039 $ 809,316 Food and beverage 61,366 63,911 206,183 217,469 Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053 Other operating 20,031 17,740 55,197 52,495 Operations held for investment:
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844 Total revenues 281,639 289,308 842,215 878,201 Depreciation and amortization 37,573 36,159 110,484 110,181
Prepaid expenses and other current assets 14,359 12,261 Operating expenses Interest expense 13,259 11,549 43,401 31,609
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481 Room 52,514 53,928 152,606 159,923 Income tax (benefit) provision, net (749) 673 (1,185) (692)
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474 Food and beverage 44,928 46,260 140,149 147,299 Gain on sale of assets (53,077) (68,740)
Other operating 4,162 4,190 12,494 12,488 Impairment loss 1,394
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998 Advertising and promotion 13,285 13,593 40,998 41,815 EBITDAre 83,628 86,890 250,079 255,055
Finance lease right-of-use asset, net 48,019 Repairs and maintenance 10,632 10,530 31,107 32,484
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512 Utilities 7,458 8,084 20,656 22,533 Operations held for investment:
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544 Franchise costs 8,606 9,167 24,024 26,981 Amortization of deferred stock compensation 2,146 2,073 7,168 6,938
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817 Property tax, ground lease and insurance 21,880 20,369 62,842 63,658 Amortization of favorable and unfavorable contracts, net (2) 3
Other property-level expenses 30,913 31,580 97,768 101,005 Amortization of right-of-use assets (1) (253) (385) (523) (832)
Total assets $ 3,898,837 $ 3,972,833 Corporate overhead 7,395 7,360 22,989 22,056 Finance lease obligation interest - cash ground rent (589) (590) (1,768) (1,768)
Depreciation and amortization 37,573 36,159 110,484 110,181 Hurricane-related uninsured losses (insurance proceeds), net 25 (990)
Liabilities and Equity Impairment loss 1,394 Prior year property tax adjustments, net (9) 289 117
Current liabilities: Total operating expenses 239,346 241,220 716,117 741,817 Prior owner contingency funding (900)
Accounts payable and accrued expenses $ 33,140 $ 30,425 Interest and other income 3,762 2,592 13,497 7,049 Noncontrolling interest:
Accrued payroll and employee benefits 21,371 25,039 Interest expense (13,259) (11,549) (43,401) (31,609) Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Dividends and distributions payable 14,451 126,461 Gain on sale of assets 53,128 68,787 Depreciation and amortization (793) (637) (2,072) (1,915)
Other current liabilities 45,843 44,962 Income before income taxes 32,796 92,259 96,194 180,611 Interest expense (532) (513) (1,650) (1,437)
Current portion of notes payable, net 6,271 5,838 Income tax benefit (provision), net 749 (673) 1,185 692 Amortization of right-of-use asset (1) 72 72 217 217
Liabilities of assets held for sale 12,446 Net income 33,545 91,586 97,379 181,303 (2,466) (2,333) (5,301) (6,856)
Total current liabilities 133,522 232,725 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Preferred stock dividends (3,208) (3,208) (9,622) (9,622) Adjusted EBITDAre, excluding noncontrolling interest $ 81,162 $ 84,557 $ 244,778 $ 248,199
Notes payable, less current portion, net 966,496 971,225 Income attributable to common stockholders $ 27,829 $ 86,002 $ 81,695 $ 164,492
Finance lease obligations, less current portion 15,571 27,009
Operating lease obligations, less current portion 50,905 Basic and diluted per share amounts:
Other liabilities 19,824 30,703 Basic and diluted income attributable to common stockholders per common share $ 0.12 $ 0.38 $ 0.36 $ 0.73
Total liabilities 1,186,318 1,261,662
Basic and diluted weighted average common shares outstanding 224,530 227,068 226,369 225,538
Commitments and contingencies
Distributions declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15
Equity:
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
6.95% Series E Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 115,000 115,000
6.45% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 75,000 75,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 224,861,978 shares issued and outstanding at September 30, 2019 and 228,246,247 shares issued and outstanding at December 31, 2018 2,249 2,282
Additional paid in capital 2,681,754 2,728,684
Retained earnings 1,274,039 1,182,722
Cumulative dividends and distributions (1,483,907) (1,440,202)
Total stockholders' equity 2,664,135 2,663,486
Noncontrolling interest in consolidated joint venture 48,384 47,685
Total equity 2,712,519 2,711,171
Total liabilities and equity $ 3,898,837 $ 3,972,833

 

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. (1) Amounts originally reported for the three and nine months ended September 30, 2018 for amortization of lease intangibles and noncash ground rent have been reclassified to amortization of right-of-use assets to conform to the current year's reporting. Sunstone Hotel Investors, Inc.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets Unaudited Consolidated Statements of Operations Reconciliation of Net Income to Non-GAAP Financial Measures Reconciliation of Net Income to Non-GAAP Financial Measures
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data) (In thousands, except per share data) (Unaudited and in thousands) (Unaudited and in thousands, except per share amounts)
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30, Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest Reconciliation of Net Income to FFO Attributable to Common Stockholders and
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018 2019 2018 2019 2018 Adjusted FFO Attributable to Common Stockholders
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited) Three Months Ended September 30, Nine Months Ended September 30,
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets Revenues 2019 2018 2019 2018 Three Months Ended September 30, Nine Months Ended September 30,
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets: Room $ 200,242 $ 207,657 $ 580,835 $ 608,237 2019 2018 2019 2018
Cash and cash equivalents $ 730,039 $ 809,316 Food and beverage 61,366 63,911 206,183 217,469 Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053 Other operating 20,031 17,740 55,197 52,495 Operations held for investment: Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844 Total revenues 281,639 289,308 842,215 878,201 Depreciation and amortization 37,573 36,159 110,484 110,181 Preferred stock dividends (3,208) (3,208) (9,622) (9,622)
Prepaid expenses and other current assets 14,359 12,261 Operating expenses Interest expense 13,259 11,549 43,401 31,609 Operations held for investment:
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481 Room 52,514 53,928 152,606 159,923 Income tax (benefit) provision, net (749) 673 (1,185) (692) Real estate depreciation and amortization (1) 36,951 35,603 108,621 108,707
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474 Food and beverage 44,928 46,260 140,149 147,299 Gain on sale of assets (53,077) (68,740) Gain on sale of assets (53,077) (68,740)
Other operating 4,162 4,190 12,494 12,488 Impairment loss 1,394 Impairment loss 1,394
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998 Advertising and promotion 13,285 13,593 40,998 41,815 EBITDAre 83,628 86,890 250,079 255,055 Noncontrolling interest:
Finance lease right-of-use asset, net 48,019 Repairs and maintenance 10,632 10,530 31,107 32,484 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512 Utilities 7,458 8,084 20,656 22,533 Operations held for investment: Real estate depreciation and amortization (793) (637) (2,072) (1,915)
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544 Franchise costs 8,606 9,167 24,024 26,981 Amortization of deferred stock compensation 2,146 2,073 7,168 6,938 FFO attributable to common stockholders 63,987 67,891 188,244 203,938
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817 Property tax, ground lease and insurance 21,880 20,369 62,842 63,658 Amortization of favorable and unfavorable contracts, net (2) 3
Other property-level expenses 30,913 31,580 97,768 101,005 Amortization of right-of-use assets (1) (253) (385) (523) (832) Operations held for investment:
Total assets $ 3,898,837 $ 3,972,833 Corporate overhead 7,395 7,360 22,989 22,056 Finance lease obligation interest - cash ground rent (589) (590) (1,768) (1,768) Amortization of favorable and unfavorable contracts, net (2) 3
Depreciation and amortization 37,573 36,159 110,484 110,181 Hurricane-related uninsured losses (insurance proceeds), net 25 (990) Real estate amortization of right-of-use assets (1) 146 (18) 443 268
Liabilities and Equity Impairment loss 1,394 Prior year property tax adjustments, net (9) 289 117 Noncash interest on derivatives and finance lease obligations, net 1,155 (818) 6,908 (4,995)
Current liabilities: Total operating expenses 239,346 241,220 716,117 741,817 Prior owner contingency funding (900) Hurricane-related uninsured losses (insurance proceeds), net 25 (990)
Accounts payable and accrued expenses $ 33,140 $ 30,425 Interest and other income 3,762 2,592 13,497 7,049 Noncontrolling interest: Prior year property tax adjustments, net (9) 289 117
Accrued payroll and employee benefits 21,371 25,039 Interest expense (13,259) (11,549) (43,401) (31,609) Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189) Prior owner contingency funding (900)
Dividends and distributions payable 14,451 126,461 Gain on sale of assets 53,128 68,787 Depreciation and amortization (793) (637) (2,072) (1,915) Noncash income tax provision (benefit), net 390 719 (246) (1,100)
Other current liabilities 45,843 44,962 Income before income taxes 32,796 92,259 96,194 180,611 Interest expense (532) (513) (1,650) (1,437) Noncontrolling interest:
Current portion of notes payable, net 6,271 5,838 Income tax benefit (provision), net 749 (673) 1,185 692 Amortization of right-of-use asset (1) 72 72 217 217 Real estate amortization of right-of-use asset (1) 72 72 217 217
Liabilities of assets held for sale 12,446 Net income 33,545 91,586 97,379 181,303 (2,466) (2,333) (5,301) (6,856) Noncash interest on derivative, net (1)
Total current liabilities 133,522 232,725 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189) 1,754 (22) 6,711 (6,481)
Preferred stock dividends (3,208) (3,208) (9,622) (9,622) Adjusted EBITDAre, excluding noncontrolling interest $ 81,162 $ 84,557 $ 244,778 $ 248,199
Notes payable, less current portion, net 966,496 971,225 Income attributable to common stockholders $ 27,829 $ 86,002 $ 81,695 $ 164,492 Adjusted FFO attributable to common stockholders $ 65,741 $ 67,869 $ 194,955 $ 197,457
Finance lease obligations, less current portion 15,571 27,009
Operating lease obligations, less current portion 50,905 Basic and diluted per share amounts: FFO attributable to common stockholders per diluted share $ 0.28 $ 0.30 $ 0.83 $ 0.90
Other liabilities 19,824 30,703 Basic and diluted income attributable to common stockholders per common share $ 0.12 $ 0.38 $ 0.36 $ 0.73
Total liabilities 1,186,318 1,261,662 Adjusted FFO attributable to common stockholders per diluted share $ 0.29 $ 0.30 $ 0.86 $ 0.87
Basic and diluted weighted average common shares outstanding 224,530 227,068 226,369 225,538
Commitments and contingencies Basic weighted average shares outstanding 224,530 227,068 226,369 225,538
Distributions declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15 Shares associated with unvested restricted stock awards 253 419 219 347
Equity: Diluted weighted average shares outstanding 224,783 227,487 226,588 225,885
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
6.95% Series E Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 115,000 115,000
6.45% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 75,000 75,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 224,861,978 shares issued and outstanding at September 30, 2019 and 228,246,247 shares issued and outstanding at December 31, 2018 2,249 2,282
Additional paid in capital 2,681,754 2,728,684
Retained earnings 1,274,039 1,182,722
Cumulative dividends and distributions (1,483,907) (1,440,202)
Total stockholders' equity 2,664,135 2,663,486
Noncontrolling interest in consolidated joint venture 48,384 47,685
Total equity 2,712,519 2,711,171
Total liabilities and equity $ 3,898,837 $ 3,972,833

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. (1) Amounts originally reported for the three and nine months ended September 30, 2018 for amortization of lease intangibles and noncash ground rent have been reclassified to amortization of right-of-use assets to conform to the current year's reporting. Sunstone Hotel Investors, Inc. (1) Amounts originally reported for the three and nine months ended September 30, 2018 for real estate depreciation and amortization related to finance leases, amortization of lease intangibles and noncash ground rent have been reclassified to real estate amortization of right-of-use assets to conform to the current year's reporting.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets Unaudited Consolidated Statements of Operations Reconciliation of Net Income to Non-GAAP Financial Measures Reconciliation of Net Income to Non-GAAP Financial Measures
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data) (In thousands, except per share data) (Unaudited and in thousands) (Unaudited and in thousands, except per share amounts)
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel.
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30, Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest Reconciliation of Net Income to FFO Attributable to Common Stockholders and
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018 2019 2018 2019 2018 Adjusted FFO Attributable to Common Stockholders
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited) Three Months Ended September 30, Nine Months Ended September 30,
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets Revenues 2019 2018 2019 2018 Three Months Ended September 30, Nine Months Ended September 30,
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets: Room $ 200,242 $ 207,657 $ 580,835 $ 608,237 2019 2018 2019 2018
Cash and cash equivalents $ 730,039 $ 809,316 Food and beverage 61,366 63,911 206,183 217,469 Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053 Other operating 20,031 17,740 55,197 52,495 Operations held for investment: Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844 Total revenues 281,639 289,308 842,215 878,201 Depreciation and amortization 37,573 36,159 110,484 110,181 Preferred stock dividends (3,208) (3,208) (9,622) (9,622)
Prepaid expenses and other current assets 14,359 12,261 Operating expenses Interest expense 13,259 11,549 43,401 31,609 Operations held for investment:
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481 Room 52,514 53,928 152,606 159,923 Income tax (benefit) provision, net (749) 673 (1,185) (692) Real estate depreciation and amortization (1) 36,951 35,603 108,621 108,707
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474 Food and beverage 44,928 46,260 140,149 147,299 Gain on sale of assets (53,077) (68,740) Gain on sale of assets (53,077) (68,740)
Other operating 4,162 4,190 12,494 12,488 Impairment loss 1,394 Impairment loss 1,394
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998 Advertising and promotion 13,285 13,593 40,998 41,815 EBITDAre 83,628 86,890 250,079 255,055 Noncontrolling interest:
Finance lease right-of-use asset, net 48,019 Repairs and maintenance 10,632 10,530 31,107 32,484 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189)
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512 Utilities 7,458 8,084 20,656 22,533 Operations held for investment: Real estate depreciation and amortization (793) (637) (2,072) (1,915)
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544 Franchise costs 8,606 9,167 24,024 26,981 Amortization of deferred stock compensation 2,146 2,073 7,168 6,938 FFO attributable to common stockholders 63,987 67,891 188,244 203,938
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817 Property tax, ground lease and insurance 21,880 20,369 62,842 63,658 Amortization of favorable and unfavorable contracts, net (2) 3
Other property-level expenses 30,913 31,580 97,768 101,005 Amortization of right-of-use assets (1) (253) (385) (523) (832) Operations held for investment:
Total assets $ 3,898,837 $ 3,972,833 Corporate overhead 7,395 7,360 22,989 22,056 Finance lease obligation interest - cash ground rent (589) (590) (1,768) (1,768) Amortization of favorable and unfavorable contracts, net (2) 3
Depreciation and amortization 37,573 36,159 110,484 110,181 Hurricane-related uninsured losses (insurance proceeds), net 25 (990) Real estate amortization of right-of-use assets (1) 146 (18) 443 268
Liabilities and Equity Impairment loss 1,394 Prior year property tax adjustments, net (9) 289 117 Noncash interest on derivatives and finance lease obligations, net 1,155 (818) 6,908 (4,995)
Current liabilities: Total operating expenses 239,346 241,220 716,117 741,817 Prior owner contingency funding (900) Hurricane-related uninsured losses (insurance proceeds), net 25 (990)
Accounts payable and accrued expenses $ 33,140 $ 30,425 Interest and other income 3,762 2,592 13,497 7,049 Noncontrolling interest: Prior year property tax adjustments, net (9) 289 117
Accrued payroll and employee benefits 21,371 25,039 Interest expense (13,259) (11,549) (43,401) (31,609) Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189) Prior owner contingency funding (900)
Dividends and distributions payable 14,451 126,461 Gain on sale of assets 53,128 68,787 Depreciation and amortization (793) (637) (2,072) (1,915) Noncash income tax provision (benefit), net 390 719 (246) (1,100)
Other current liabilities 45,843 44,962 Income before income taxes 32,796 92,259 96,194 180,611 Interest expense (532) (513) (1,650) (1,437) Noncontrolling interest:
Current portion of notes payable, net 6,271 5,838 Income tax benefit (provision), net 749 (673) 1,185 692 Amortization of right-of-use asset (1) 72 72 217 217 Real estate amortization of right-of-use asset (1) 72 72 217 217
Liabilities of assets held for sale 12,446 Net income 33,545 91,586 97,379 181,303 (2,466) (2,333) (5,301) (6,856) Noncash interest on derivative, net (1)
Total current liabilities 133,522 232,725 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189) 1,754 (22) 6,711 (6,481)
Preferred stock dividends (3,208) (3,208) (9,622) (9,622) Adjusted EBITDAre, excluding noncontrolling interest $ 81,162 $ 84,557 $ 244,778 $ 248,199
Notes payable, less current portion, net 966,496 971,225 Income attributable to common stockholders $ 27,829 $ 86,002 $ 81,695 $ 164,492 Adjusted FFO attributable to common stockholders $ 65,741 $ 67,869 $ 194,955 $ 197,457
Finance lease obligations, less current portion 15,571 27,009
Operating lease obligations, less current portion 50,905 Basic and diluted per share amounts: FFO attributable to common stockholders per diluted share $ 0.28 $ 0.30 $ 0.83 $ 0.90
Other liabilities 19,824 30,703 Basic and diluted income attributable to common stockholders per common share $ 0.12 $ 0.38 $ 0.36 $ 0.73
Total liabilities 1,186,318 1,261,662 Adjusted FFO attributable to common stockholders per diluted share $ 0.29 $ 0.30 $ 0.86 $ 0.87
Basic and diluted weighted average common shares outstanding 224,530 227,068 226,369 225,538
Commitments and contingencies Basic weighted average shares outstanding 224,530 227,068 226,369 225,538
Distributions declared per common share $ 0.05 $ 0.05 $ 0.15 $ 0.15 Shares associated with unvested restricted stock awards 253 419 219 347
Equity: Diluted weighted average shares outstanding 224,783 227,487 226,588 225,885
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
6.95% Series E Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 115,000 115,000
6.45% Series F Cumulative Redeemable Preferred Stock, 3,000,000 shares issued and outstanding at September 30, 2019 and December 31, 2018, stated at liquidation preference of $25.00 per share 75,000 75,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 224,861,978 shares issued and outstanding at September 30, 2019 and 228,246,247 shares issued and outstanding at December 31, 2018 2,249 2,282
Additional paid in capital 2,681,754 2,728,684
Retained earnings 1,274,039 1,182,722
Cumulative dividends and distributions (1,483,907) (1,440,202)
Total stockholders' equity 2,664,135 2,663,486
Noncontrolling interest in consolidated joint venture 48,384 47,685
Total equity 2,712,519 2,711,171
Total liabilities and equity $ 3,898,837 $ 3,972,833

 

UNAUDITED SELECTED STATISTICAL AND FINANCIAL DATA (1) The 21 Hotel Total Portfolio is comprised of all hotels owned by the Company as of September 30, 2019. The 20 Hotel Comparable Portfolio excludes the Courtyard by Marriott Los Angeles, which was classified as held for sale as of September 30, 2019, and subsequently sold in October 2019. (1) Reflects guidance presented on August 1, 2019. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. Sunstone Hotel Investors, Inc. (1) Amounts originally reported for the three and nine months ended September 30, 2018 for amortization of lease intangibles and noncash ground rent have been reclassified to amortization of right-of-use assets to conform to the current year's reporting. Sunstone Hotel Investors, Inc. (1) Amounts originally reported for the three and nine months ended September 30, 2018 for real estate depreciation and amortization related to finance leases, amortization of lease intangibles and noncash ground rent have been reclassified to real estate amortization of right-of-use assets to conform to the current year's reporting. Sunstone Hotel Investors, Inc.
($ in millions, except RevPAR, ADR and per share amounts) (2) The 20 Hotel Comparable Portfolio Adjusted EBITDAre Margins exclude any prior year property tax adjustments, net. Metric Quarter Ended September 30, 2019 Guidance (1) Quarter Ended September 30, 2019 Actual Results(unaudited) Performance Relative to Prior Guidance Midpoint Metric Quarter Ended December 31, 2019 Guidance (1) Metric PriorFull Year 2019Guidance (2) Adjustments (3) Adjusted PriorFull Year 2019Guidance CurrentFull Year 2019Guidance (1) Change inFull Year 2019GuidanceMidpoint (1) Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release. Consolidated Balance Sheets Unaudited Consolidated Statements of Operations Reconciliation of Net Income to Non-GAAP Financial Measures Reconciliation of Net Income to Non-GAAP Financial Measures Reconciliation of Net Income to Non-GAAP Financial Measures
Net Income ($ millions) $32  to  $36 $34 Net Income ($ millions) $62 to $67 Net Income ($ millions) $117  to  $130 + $43 $160  to  $173 $159 to $164 - $5 (2) Reflects guidance presented on August 1, 2019. (In thousands, except share data) (In thousands, except per share data) (Unaudited and in thousands) (Unaudited and in thousands, except per share amounts) Guidance for Fourth Quarter and Full Year 2019
21 Hotel Total Portfolio RevPAR Growth - 0.5% to + 1.5% 0.9% + 0.4% 20 Hotel Comparable Portfolio RevPAR Growth - 1.5% to + 0.5% 20 Hotel Comparable Portfolio RevPAR Growth + 0.75% to + 2.75% 0.0% + 0.75% to + 2.75% + 1.0% to + 2.0% - 0.25% (3) Adjustments reflect the anticipated fourth quarter operating income for the Courtyard by Marriott Los Angeles, as well as the estimated gain on the sale of the hotel. (Unaudited and in thousands, except per share amounts)
Three Months Ended September 30, Nine Months Ended September 30, Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $79  to  $82 $81 + $1 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $68  to  $72 Adjusted EBITDAre, excluding noncontrolling interest ($ millions) $312  to  $324 - $1 $311  to  $323 $313  to  $317 - $2 September 30, December 31, Three Months Ended September 30, Nine Months Ended September 30, Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest Reconciliation of Net Income to FFO Attributable to Common Stockholders and
2019 2018 Change 2019 2018 Change Adjusted FFO Attributable to Common Stockholders ($ millions) $62  to  $65 $66 + $3 Adjusted FFO Attributable to Common Stockholders ($ millions) $51  to  $55 Adjusted FFO Attributable to Common Stockholders ($ millions) $243  to  $255 - $1 $242  to  $254 $246  to  $250 $0 2019 2018 2019 2018 2019 2018 Adjusted FFO Attributable to Common Stockholders Reconciliation of Net Income to Adjusted EBITDAre, Excluding Noncontrolling Interest
Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.27  to  $0.29 $0.29 + $0.01 Adjusted FFO Attributable to Common Stockholders per Diluted Share $0.23  to  $0.25 Adjusted FFO Attributable to Common Stockholders per Diluted Share $1.07  to  $1.13 $0.00 $1.07  to  $1.13 $1.09  to  $1.11 $0 (unaudited) Three Months Ended September 30, Nine Months Ended September 30,
Net Income $ 33.5 $ 91.6 (63.4) % $ 97.4 $ 181.3 (46.3) % Diluted Weighted Average Shares Outstanding 225,000,000 224,800,000 - 200,000 Diluted Weighted Average Shares Outstanding 224,100,000 Diluted Weighted Average Shares Outstanding 226,200,000 226,200,000 226,000,000 - 200,000 Assets Revenues 2019 2018 2019 2018 Three Months Ended September 30, Nine Months Ended September 30, Quarter Ended Year Ended
Income Attributable to Common Stockholders per Diluted Share $ 0.12 $ 0.38 (68.4) % $ 0.36 $ 0.73 (50.7) % Current assets: Room $ 200,242 $ 207,657 $ 580,835 $ 608,237 2019 2018 2019 2018 December 31, 2019 December 31, 2019
Cash and cash equivalents $ 730,039 $ 809,316 Food and beverage 61,366 63,911 206,183 217,469 Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303 Low High Low High
21 Hotel Total Portfolio RevPAR (1) $ 201.93 $ 200.21 0.9 % $ 197.26 $ 192.91 2.3 % Restricted cash 46,206 53,053 Other operating 20,031 17,740 55,197 52,495 Operations held for investment: Net income $ 33,545 $ 91,586 $ 97,379 $ 181,303
20 Hotel Comparable Portfolio RevPAR (1) $ 202.57 $ 200.73 0.9 % $ 197.97 $ 193.50 2.3 % Accounts receivable, net 44,021 33,844 Total revenues 281,639 289,308 842,215 878,201 Depreciation and amortization 37,573 36,159 110,484 110,181 Preferred stock dividends (3,208) (3,208) (9,622) (9,622) Net income $ 61,900 $ 66,500 $ 159,400 $ 164,000
Prepaid expenses and other current assets 14,359 12,261 Operating expenses Interest expense 13,259 11,549 43,401 31,609 Operations held for investment: Depreciation and amortization 37,600 37,400 148,100 147,900
20 Hotel Comparable Portfolio Occupancy (1) 86.2 % 86.4 % (20)  bps 84.1 % 84.1 %  bps Assets held for sale, net 18,481 Room 52,514 53,928 152,606 159,923 Income tax (benefit) provision, net (749) 673 (1,185) (692) Real estate depreciation and amortization (1) 36,951 35,603 108,621 108,707 Interest expense 12,300 12,100 55,700 55,500
20 Hotel Comparable Portfolio ADR (1) $ 235.00 $ 232.33 1.1 % $ 235.40 $ 230.08 2.3 % Total current assets 853,106 908,474 Food and beverage 44,928 46,260 140,149 147,299 Gain on sale of assets (53,077) (68,740) Gain on sale of assets (53,077) (68,740) Income tax provision (benefit), net 200 200 (1,000) (1,000)
Other operating 4,162 4,190 12,494 12,488 Impairment loss 1,394 Impairment loss 1,394 Gain on sale of assets (43,000) (43,000) (43,000) (43,000)
20 Hotel Comparable Portfolio Adjusted EBITDAre Margin (1) (2) 30.8 % 31.8 % (100)  bps 30.7 % 31.0 % (30)  bps Investment in hotel properties, net 2,910,852 3,030,998 Advertising and promotion 13,285 13,593 40,998 41,815 EBITDAre 83,628 86,890 250,079 255,055 Noncontrolling interest: Amortization of deferred stock compensation 2,100 2,100 9,300 9,300
Finance lease right-of-use asset, net 48,019 Repairs and maintenance 10,632 10,530 31,107 32,484 Income from consolidated joint venture attributable to noncontrolling interest (2,508) (2,376) (6,062) (7,189) Amortization of right-of-use assets (300) (300) (800) (800)
Adjusted EBITDAre, excluding noncontrolling interest $ 81.2 $ 84.6 (4.0) % $ 244.8 $ 248.2 (1.4) % Operating lease right-of-use assets, net 61,512 Utilities 7,458 8,084 20,656 22,533 Operations held for investment: Real estate depreciation and amortization (793) (637) (2,072) (1,915) Finance lease obligation interest - cash ground rent (400) (400) (2,200) (2,200)
Adjusted FFO Attributable to Common Stockholders $ 65.7 $ 67.9 (3.1) % $ 195.0 $ 197.5 (1.3) % Deferred financing costs, net 2,924 3,544 Franchise costs 8,606 9,167 24,024 26,981 Amortization of deferred stock compensation 2,146 2,073 7,168 6,938 FFO attributable to common stockholders 63,987 67,891 188,244 203,938 Prior year property tax adjustments, net 300 300
Adjusted FFO Attributable to Common Stockholders per Diluted Share $ 0.29 $ 0.30 (3.3) % $ 0.86 $ 0.87 (1.1) % Other assets, net 22,424 29,817 Property tax, ground lease and insurance 21,880 20,369 62,842 63,658 Amortization of favorable and unfavorable contracts, net (2) 3 Prior owner contingency funding (900) (900)
Other property-level expenses 30,913 31,580 97,768 101,005 Amortization of right-of-use assets (1) (253) (385) (523) (832) Operations held for investment: Noncontrolling interest (2,400) (2,600) (11,900) (12,100)
Total assets $ 3,898,837 $ 3,972,833 Corporate overhead 7,395 7,360 22,989 22,056 Finance lease obligation interest - cash ground rent (589) (590) (1,768) (1,768) Amortization of favorable and unfavorable contracts, net