EX-99.2 3 sho-20201105xex99d2.htm EX-99.2

Exhibit 99.2

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Supplemental Financial Information
November 5, 2020

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Supplemental Financial Information

For the quarter ended September 30, 2020

November 5, 2020

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Supplemental Financial Information
November 5, 2020

Table of Contents

CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR

3

About Sunstone

4

Forward-Looking Statement

5

Non-GAAP Financial Measures

6

CORPORATE FINANCIAL INFORMATION

9

Condensed Consolidated Balance Sheets Q3 2020 – Q3 2019

10

Consolidated Statements of Operations Q3 and Q3 YTD 2020/2019

12

Reconciliation of Net (Loss) Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest Q3 and Q3 YTD 2020/2019

13

Reconciliation of Net (Loss) Income to FFO and Adjusted FFO Attributable to Common Stockholders Q3 and Q3 YTD 2020/2019

14

Pro Forma Consolidated Statements of Operations FY 2019, Q4 2019 – Q1 2019

15

Pro Forma Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest FY 2019

16

Pro Forma Reconciliation of Net Income to FFO and Adjusted FFO Attributable to Common Stockholders FY 2019

17

CAPITALIZATION

19

Comparative Capitalization Q3 2020 – Q3 2019

20

Consolidated Debt Summary Schedule

21

Consolidated Amortization and Debt Maturity Schedule as of September 30, 2020

22

PROPERTY-LEVEL DATA

23

Hotel Information as of November 5, 2020

24

PROPERTY-LEVEL OPERATING STATISTICS

25

Property-Level Operating Statistics July 2020/2019

26

Property-Level Operating Statistics August 2020/2019

27

Property-Level Operating Statistics September 2020/2019

28

Property-Level Operating Statistics Q3 2020/2019

29

Property-Level Operating Statistics Q3 YTD 2020/2019

30

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Supplemental Financial Information
November 5, 2020

Table of Contents

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November 5, 2020

CORPORATE PROFILE, FINANCIAL DISCLOSURES,
AND SAFE HARBOR

CORPORATE PROFILE, FINANCIAL DISCLOSURES, AND SAFE HARBOR

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Supplemental Financial Information
November 5, 2020

About Sunstone

Sunstone Hotel Investors, Inc. (the “Company,” “we,” and “our”) (NYSE: SHO) is a lodging real estate investment trust (“REIT”) that as of November 5, 2020 has interests in 19 hotels comprised of 9,997 rooms. Sunstone is the premier steward of Long-Term Relevant Real Estate® (“LTRR®”) in the lodging industry. Sunstone’s business is to acquire, own, asset manage and renovate or reposition hotels that the Company considers to be LTRR® in the United States, specifically hotels in urban and resort locations that benefit from barriers to entry and diverse economic drivers. The majority of Sunstone’s hotels are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt.

As demand for lodging generally fluctuates with the overall economy, the Company seeks to own Long-Term Relevant Real Estate® that will maintain a high appeal with lodging travelers over long periods of time and will generate superior economic earnings materially in excess of recurring capital requirements. Sunstone’s strategy is to maximize stockholder value through focused asset management and disciplined capital recycling, which is likely to include selective acquisitions and dispositions, while maintaining balance sheet flexibility and strength. Sunstone’s goal is to maintain appropriate leverage and financial flexibility to position the Company to create value throughout all phases of the operating and financial cycles.

Corporate Headquarters
200 Spectrum Center Drive, 21st Floor
Irvine, CA 92618
(949) 330-4000

Company Contacts
John Arabia
President and Chief Executive Officer
(949) 382-3008

Bryan Giglia
Executive Vice President and Chief Financial Officer
(949) 382-3036

Aaron Reyes
Vice President, Corporate Finance
(949) 382-3018

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Supplemental Financial Information
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Forward-Looking Statement

This presentation 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: the impact on the Company’s business of the COVID-19 global pandemic and the response of governments and the Company to the outbreak; increased risks related to employee matters, including increased employment litigation and claims for severance or other benefits tied to termination or furloughs as a result of temporary hotel suspensions or reduced hotel operations due to COVID-19; the impact on our business of existing defaults or potential defaults by us on our debt agreements or leases; general economic and business conditions, including a U.S. recession, trade conflicts and tariffs between the U.S. and its trading partners, changes in the European Union or global economic slowdown, which may diminish the desire for leisure travel or the need for business travel, as well as any type of flu or disease-related pandemic or the adverse effects of climate change, affecting the lodging and travel industry, internationally, nationally and locally; the Company’s need to operate as a REIT and comply with other applicable laws and regulations, including new laws, interpretations or court decisions that may change the federal or state tax laws or the federal or state income tax consequences of the Company’s qualification as a REIT; rising hotel operating costs due to labor costs, workers’ compensation and health-care related costs, including the impact of the Patient Protection and Affordable Care Act or its potential replacement, utility costs, insurance and unanticipated costs such as acts of nature and their consequences and other factors that may not be offset by increased room rates; relationships with, and the requirements and reputation of, the Company’s franchisors and hotel brands; relationships with, and the requirements, performance and reputation of, the managers of the Company’s hotels; the ground, building or airspace leases for four of the 19 Hotels the Company has interests in as of the date of this presentation; competition for the acquisition of hotels, and the Company’s ability to complete acquisitions and dispositions; performance of hotels after they are acquired; new hotel supply, or alternative lodging options such as timeshare, vacation rentals or sharing services such as Airbnb, in the Company’s markets, which could harm its occupancy levels and revenue at its hotels; competition from hotels not owned by the Company; the need for renovations, repositionings and other capital expenditures for the Company’s hotels; the impact, including any delays, of renovations and repositionings on hotel operations; changes in the Company’s business strategy or acquisition or disposition plans; the Company’s level of debt, including secured, unsecured, fixed and variable rate debt; financial and other covenants in the Company’s debt and preferred stock; the Company’s hotels may become impaired, or its hotels which have previously become impaired may become further impaired in the future, which may adversely affect its financial condition and results of operations; volatility in the capital markets and the effect on lodging demand or the Company’s ability to obtain capital on favorable terms or at all; potential adverse tax consequences in the event that the Company’s operating leases with its taxable REIT subsidiaries are not held to have been made on an arm’s-length basis; system security risks, data protection breaches, cyber-attacks, including those impacting the Company’s hotel managers or other third parties, and systems integration issues; other events beyond the Company’s control, including natural disasters, terrorist attacks or civil unrest; 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 presentation, 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 presentation contains unaudited information, and should be read together with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies of these reports are available on our website at www.sunstonehotels.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

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Supplemental Financial Information
November 5, 2020

Non-GAAP Financial Measures

We present the following non-GAAP financial measures that we believe are useful to investors as key supplemental measures of our operating performance: earnings before interest expense, taxes, depreciation and amortization for real estate, or EBITDAre; Adjusted EBITDAre, excluding noncontrolling interest (as defined below); funds from operations attributable to common stockholders, or FFO attributable to common stockholders; Adjusted FFO attributable to common stockholders (as defined below); hotel Adjusted EBITDAre; and hotel Adjusted EBITDAre margins. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with GAAP. In addition, our calculation of these measures may not be comparable to other companies that do not define such terms exactly the same as the Company. These non-GAAP measures are used in addition to and in conjunction with results presented in accordance with GAAP. They should not be considered as alternatives to net income (loss), cash flow from operations, or any other operating performance measure prescribed by GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

We present EBITDAre in accordance with guidelines established by the 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 that we do.

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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; debt resolution 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 and liabilities 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

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Supplemental Financial Information
November 5, 2020

finance lease expenses recorded on the ground lease at the Courtyard by Marriott Los Angeles (prior to the hotel’s sale in October 2019) 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 and liabilities, which includes the amortization of both our finance and operating lease intangibles (with the exception of our corporate operating lease), as these expenses are based on historical cost accounting and do not reflect the actual rent amounts due to the respective lessors or the underlying performance of our hotels. 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.

Reconciliations of net (loss) income to EBITDAre, Adjusted EBITDAre, excluding noncontrolling interest, FFO attributable to common stockholders, Adjusted FFO attributable to common stockholders, hotel Adjusted EBITDAre and hotel Adjusted EBITDAre margins are set forth in the following pages of this supplemental package.

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Supplemental Financial Information
November 5, 2020

CORPORATE FINANCIAL INFORMATION

CORPORATE FINANCIAL INFORMATION

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Supplemental Financial Information
November 5, 2020

Condensed Consolidated Balance Sheets
Q3 2020 – Q3 2019

(In thousands)

September 30, 2020 (1)

June 30, 2020 (2)

March 31, 2020 (3)

December 31, 2019 (4)

September 30, 2019 (5)

Assets

    

    

    

    

    

Investment in hotel properties:

Land

$

581,426

$

581,426

$

600,649

$

601,181

$

605,581

Buildings & improvements

2,707,102

2,694,935

2,800,187

2,950,534

2,968,241

Furniture, fixtures, & equipment

464,588

460,526

496,312

506,754

512,333

Other

64,880

72,775

71,327

73,992

68,677

3,817,996

3,809,662

3,968,475

4,132,461

4,154,832

Less accumulated depreciation & amortization

(1,196,520)

(1,164,181)

(1,212,063)

(1,260,108)

(1,243,980)

2,621,476

2,645,481

2,756,412

2,872,353

2,910,852

Finance lease right-of-use assets, net

46,549

46,917

47,284

47,652

48,019

Operating lease right-of-use assets, net

39,489

40,351

41,198

60,629

61,512

Other noncurrent assets, net

16,510

15,415

16,390

24,608

25,348

Current assets:

Cash and cash equivalents

461,288

540,420

847,445

816,857

730,039

Restricted cash

42,346

45,960

53,485

48,116

46,206

Other current assets, net

19,124

12,474

37,326

48,759

58,380

Assets held for sale, net

76,683

18,481

Total assets

$

3,246,782

$

3,423,701

$

3,799,540

$

3,918,974

$

3,898,837

*Footnotes on following page

CORPORATE FINANCIAL INFORMATION

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Supplemental Financial Information
November 5, 2020

Condensed Consolidated Balance Sheets
Q3 2020– Q3 2019 (cont.)

(In thousands)

September 30, 2020 (1)

June 30, 2020 (2)

March 31, 2020 (3)

December 31, 2019 (4)

September 30, 2019 (5)

Liabilities

    

    

    

    

    

Current liabilities:

Current portion of notes payable, net

$

188,096

$

188,757

$

82,189

$

82,109

$

6,271

Other current liabilities

99,679

97,129

104,029

243,443

114,805

Liabilities of assets held for sale

12,446

Total current liabilities

287,775

285,886

186,218

325,552

133,522

Notes payable, less current portion, net

743,545

829,673

1,187,468

888,954

966,496

Finance lease obligations, less current portion

15,569

15,570

15,570

15,570

15,571

Operating lease obligations, less current portion

45,939

47,206

48,460

49,691

50,905

Other liabilities

25,909

25,374

24,818

18,136

19,824

Total liabilities

1,118,737

1,203,709

1,462,534

1,297,903

1,186,318

Equity

Stockholders' equity:

6.95% Series E cumulative redeemable preferred stock

115,000

115,000

115,000

115,000

115,000

6.45% Series F cumulative redeemable preferred stock

75,000

75,000

75,000

75,000

75,000

Common stock, $0.01 par value, 500,000,000 shares authorized

2,156

2,156

2,155

2,249

2,249

Additional paid in capital

2,584,005

2,581,637

2,578,445

2,683,913

2,681,754

Retained earnings

951,765

1,041,056

1,156,394

1,318,455

1,274,039

Cumulative dividends and distributions

(1,640,178)

(1,636,970)

(1,633,763)

(1,619,779)

(1,483,907)

Total stockholders' equity

2,087,748

2,177,879

2,293,231

2,574,838

2,664,135

Noncontrolling interest in consolidated joint venture

40,297

42,113

43,775

46,233

48,384

Total equity

2,128,045

2,219,992

2,337,006

2,621,071

2,712,519

Total liabilities and equity

$

3,246,782

$

3,423,701

$

3,799,540

$

3,918,974

$

3,898,837

(1)As presented on Form 10-Q to be filed in November 2020.
(2)As presented on Form 10-Q filed on August 5, 2020.
(3)As presented on Form 10-Q filed on May 11, 2020.
(4)As presented on Form 10-K filed on February 19, 2020.
(5)As presented on Form 10-Q filed on November 5, 2019.

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Consolidated Statements of Operations
Q3 and Q3 YTD 2020/2019

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except per share data)

    

    2020

    

    2019

    2020

    2019

Revenues

Room

$

16,266

$

200,242

$

147,535

$

580,835

Food and beverage

2,109

61,366

50,312

206,183

Other operating

10,535

20,031

32,699

55,197

Total revenues

28,910

281,639

230,546

842,215

Operating expenses

Room

13,715

52,514

65,037

152,606

Food and beverage

7,748

44,928

54,533

140,149

Other operating

1,295

4,162

6,283

12,494

Advertising and promotion

3,895

13,285

20,447

40,998

Repairs and maintenance

6,075

10,632

21,499

31,107

Utilities

4,170

7,458

13,238

20,656

Franchise costs

663

8,606

6,337

24,024

Property tax, ground lease and insurance

20,800

21,880

59,975

62,842

Other property-level expenses

9,528

30,913

47,109

97,768

Corporate overhead

6,582

7,395

22,414

22,989

Depreciation and amortization

33,005

37,573

104,290

110,484

Impairment losses

133,466

Total operating expenses

107,476

239,346

554,628

716,117

Interest and other income

139

3,762

2,751

13,497

Interest expense

(12,742)

(13,259)

(43,199)

(43,401)

Gain on sale of assets

189

189

Loss on extinguishment of debt

(210)

(210)

(Loss) income before income taxes

(91,190)

32,796

(364,551)

96,194

Income tax benefit (provision), net

83

749

(6,575)

1,185

Net (loss) income

(91,107)

33,545

(371,126)

97,379

Loss (income) from consolidated joint venture attributable to noncontrolling interest

1,816

(2,508)

4,436

(6,062)

Preferred stock dividends

(3,208)

(3,208)

(9,622)

(9,622)

(Loss) income attributable to common stockholders

$

(92,499)

$

27,829

$

(376,312)

$

81,695

Basic and diluted per share amounts:

Basic and diluted (loss) income attributable to common stockholders per common share

$

(0.43)

$

0.12

$

(1.74)

$

0.36

Basic and diluted weighted average common shares outstanding

214,257

224,530

216,498

226,369

Distributions declared per common share

$

$

0.05

$

0.05

$

0.15

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Supplemental Financial Information
November 5, 2020

Reconciliation of Net (Loss) Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest
Q3 and Q3 YTD 2020/2019

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

    

2020

    

2019

2020

2019

Net (loss) income

$

(91,107)

$

33,545

$

(371,126)

$

97,379

Operations held for investment:

Depreciation and amortization

33,005

37,573

104,290

110,484

Interest expense

12,742

13,259

43,199

43,401

Income tax (benefit) provision, net

(83)

(749)

6,575

(1,185)

Gain on sale of assets

(189)

(189)

Impairment loss - hotel properties

131,164

EBITDAre

(45,632)

83,628

(86,087)

250,079

Operations held for investment:

Amortization of deferred stock compensation

2,238

2,146

7,509

7,168

Amortization of right-of-use assets and liabilities

(330)

(253)

(923)

(523)

Finance lease obligation interest - cash ground rent

(351)

(589)

(1,053)

(1,768)

Loss on extinguishment of debt

210

210

Property-level severance

6,844

7,957

Prior year property tax adjustments, net

(12)

(9)

214

289

Prior owner contingency funding

(900)

Impairment loss - abandoned development costs

2,302

Noncontrolling interest:

Loss (income) from consolidated joint venture attributable to noncontrolling interest

1,816

(2,508)

4,436

(6,062)

Depreciation and amortization

(808)

(793)

(2,418)

(2,072)

Interest expense

(244)

(532)

(970)

(1,650)

Amortization of right-of-use asset and liability

72

72

217

217

Impairment loss - abandoned development costs

(449)

Adjustments to EBITDAre, net

9,435

(2,466)

17,032

(5,301)

Adjusted EBITDAre, excluding noncontrolling interest

$

(36,197)

$

81,162

$

(69,055)

$

244,778

CORPORATE FINANCIAL INFORMATION

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Supplemental Financial Information
November 5, 2020

Reconciliation of Net (Loss) Income to FFO and Adjusted FFO Attributable to Common Stockholders
Q3 and Q3 YTD 2020/2019

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except per share data)

    

2020

    

2019

2020

2019

Net (loss) income

$

(91,107)

$

33,545

$

(371,126)

$

97,379

Preferred stock dividends

(3,208)

(3,208)

(9,622)

(9,622)

Operations held for investment:

Real estate depreciation and amortization

32,383

36,951

102,422

108,621

Gain on sale of assets

(189)

(189)

Impairment loss - hotel properties

131,164

Noncontrolling interest:

Loss (income) from consolidated joint venture attributable to noncontrolling interest

1,816

(2,508)

4,436

(6,062)

Real estate depreciation and amortization

(808)

(793)

(2,418)

(2,072)

FFO attributable to common stockholders

(61,113)

63,987

(145,333)

188,244

Operations held for investment:

Real estate amortization of right-of-use assets and liabilities

80

146

298

443

Noncash interest on derivatives and finance lease obligations, net

(762)

1,155

5,534

6,908

Loss on extinguishment of debt

210

210

Property-level severance

6,844

7,957

Prior year property tax adjustments, net

(12)

(9)

214

289

Prior owner contingency funding

(900)

Impairment loss - abandoned development costs

2,302

Noncash income tax provision (benefit), net

390

7,415

(246)

Noncontrolling interest:

Real estate amortization of right-of-use asset and liability

72

72

217

217

Noncash interest on derivatives, net

(1)

(27)

Impairment loss - abandoned development costs

(449)

Adjustments to FFO attributable to common stockholders, net

6,431

1,754

23,671

6,711

Adjusted FFO attributable to common stockholders

$

(54,682)

$

65,741

$

(121,662)

$

194,955

FFO attributable to common stockholders per diluted share

$

(0.29)

$

0.28

$

(0.67)

$

0.83

Adjusted FFO attributable to common stockholders per diluted share

$

(0.26)

$

0.29

$

(0.56)

$

0.86

Basic weighted average shares outstanding

214,257

224,530

216,498

226,369

Shares associated with unvested restricted stock awards

253

219

Diluted weighted average shares outstanding

214,257

224,783

216,498

226,588

CORPORATE FINANCIAL INFORMATION

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Supplemental Financial Information
November 5, 2020

Pro Forma Consolidated Statements of Operations

FY 2019, Q4 2019 – Q1 2019

Year Ended (1)

Quarter Ended (1)

(Unaudited and in thousands)

December 31,

December 31,

September 30,

June 30,

March 31,

2019

    

2019

    

2019

    

2019

    

2019

Revenues

Room

$

734,864

$

179,984

$

190,122

$

199,177

$

165,581

Food and beverage

257,325

62,730

57,902

70,534

66,159

Other operating

71,397

19,030

18,898

17,569

15,900

Total revenues

1,063,586

261,744

266,922

287,280

247,640

Operating Expenses

Room

195,127

48,663

50,184

49,742

46,538

Food and beverage

177,704

44,209

42,792

45,797

44,906

Other expenses

364,341

91,146

91,019

92,618

89,558

Corporate overhead

30,264

7,275

7,395

8,078

7,516

Depreciation and amortization

140,269

35,372

35,442

34,811

34,644

Total operating expenses

907,705

226,665

226,832

231,046

223,162

Interest and other income

16,557

3,060

3,762

4,811

4,924

Interest expense

(53,268)

(10,752)

(12,963)

(15,521)

(14,032)

Income before income taxes

119,170

27,387

30,889

45,524

15,370

Income tax benefit (provision), net

151

(1,034)

749

(2,676)

3,112

Net Income

$

119,321

$

26,353

$

31,638

$

42,848

$

18,482

Adjusted EBITDAre, excluding noncontrolling interest (2)

$

307,332

$

72,720

$

77,067

$

94,283

$

63,262

(1)Includes the Company's ownership results for the 19 Hotel Portfolio. Excludes the Company's ownership results for the Courtyard by Marriott Los Angeles and the Renaissance Harborplace due to their sales in October 2019 and July 2020, respectively.
(2)Adjusted EBITDAre, excluding noncontrolling interest reconciliation for the year ended December 31, 2019 can be found on page 16 in this supplemental package.

CORPORATE FINANCIAL INFORMATION

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Supplemental Financial Information
November 5, 2020

Pro Forma Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest

FY 2019

Year Ended December 31, 2019

Disposition:

Disposition:

Repurchase:

Courtyard by Marriott

Renaissance

Common

Pro

(In thousands)

Actual (1)

Los Angeles (2)

Harborplace (2)

Stock (3)

Forma (4)

Net income

$

142,793

$

(44,979)

$

21,507

$

$

119,321

Operations held for investment:

Depreciation and amortization

147,748

(760)

(6,719)

140,269

Interest expense