NAREIT INVESTOR BREAKFAST June 7, 2006

Transcription

1 NAREIT INVESTOR BREAKFAST June 7, 2006

2 Forward-Looking Statements & Non-GAAP Measures With the exception of historical information, statements in this presentation are forwardlooking statements within the meaning of federal securities laws and regulations. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. The risks and uncertainties relating to the forward looking statements in this presentation include those described under the caption Risk Factors in Sunstone Hotel Investors Annual Report on Form 10-K filed on February 15, 2006 and from time to time in its other 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. 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. Included in this presentation are certain non-gaap financial measures, such as Adjusted EBITDA and Adjusted FFO. Descriptions of and reconciliations at a Company-level to the closest applicable GAAP measures are included in the Company s prior earnings press releases. These press releases can be found in the Investor Relations section of the Company s website under News Releases. Hotel-level reconciliations are included in this presentation. 1

3 Company Overview Sunstone Hotel Investors, Inc. (NYSE: SHO) is a hotel Real Estate Investment Trust (REIT) 62 Hotels 18,236 Rooms 19 States Initial Public Offering October 26,

4 Q Reported Results Guidance Actual Q RevPAR Growth 6.0% - 8.0% 9.0% excluding two hotels undergoing rebranding and renovation programs & 6.7% overall Adjusted EBITDA $50 million to $52 million $52.0 million Adjusted FFO per share $0.44 to $0.47 $0.49 3

5 Consistently Meeting Guidance RevPAR Growth 11.0% 9.0% 7.0% 6.0% 7.6% 7.0% 8.6% 11.0% 9.0% 8.0% 8.0% 9.0% 10.3% 7.0% 9.0% 5.0% Q Q Q Q Q Q Adjusted EBITDA $55.0 $50.0 $45.0 $40.0 $35.0 $30.0 $25.0 $53.2 $53.2 $51.0$52.0 $45.2 $43.5 $39.7 $37.5 $26.0$27.0 $29.2 $27.8 Q Q Q Q Q Q Adjusted FFO per share $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 $0.35 $0.30 $0.63 $0.60 $0.56 $0.56 $0.52 $0.49 $0.49 $0.46 $0.44 $0.41 $0.39 $0.39 Q Q Q Q Q Q Company Guidance (1) Reported Results (1) Company guidance based on mid-point of Company guidance range. 4

6 Delivering On Our Plan (Dollars in millions, except per share number) At IPO (1) Today (1) Price Per Share $ % $28.50 # of Hotels % 62 # of Rooms 13, % 18,236 % Westbrook Ownership 35.6% (100.0%) 0.0% Total Market Capitalization $1, % $3,371.7 Dividend Per Share $ % $1.20 Percentage of Fixed Rate Debt 48.4% % 100.0% Weighted Avg. Debt Maturity 5.0 yrs +4.0yrs 9.0 yrs Average Interest Rate (2) 6.30% (54 bps) 5.76% (1) At IPO represents 2004 pro forma and Today represents June 5, (2) Based on LIBOR of 1.82% at IPO. At current LIBOR of 5.00%, the adjusted IPO average interest 5 rate would be 7.49%.

7 Experienced Management Team Name Sunstone Hotel Investors, Inc. (REIT) Title Years with Sunstone Experience Years in Industry/Function Robert Alter Chief Executive Officer 10 Sunstone 31 Jon Kline EVP CFO 3 Merrill Lynch 13 Gary Stougaard EVP CIO 7 Hardage Suite Hotels 19 Guy Lindsey SVP Design/Construction 4 Holiday Inns 18 Ken Cruse SVP Asset Management 1 Host Marriott / Marriott Int. 14 Andrew Gross SVP General Counsel 1 Irell & Manella LLP 16 Thomas Naughton SVP Acquisitions 3 Westmont / Goldman Sachs 11 William Wagner SVP Chief Acct. Officer 2 Ernst & Young / Irvine Company 16 Olivier Kolpin VP Tax 3 PricewaterhouseCoopers 14 Lindsay Monge VP Treasurer 7 Hilton / Sunstone 12 Marc Hoffman VP Asset Management 1 Marriott International 26 Bryan Giglia Director of Finance 2 Hilton Hotels 6 Hunter Oliver Director of Acquisitions 4 Atlas Hotels 4 Name Sunstone Hotel Properties, a division of Interstate Hotels Title Years with Sunstone Experience Years in Industry/Function Evan Studer EVP Operations 8 Vista Host / WHI 33 John Elston EVP Sales & Marketing 4 Hilton / Red Lion 23 Scott Dahl SVP Revenue Management 4 Interstate 17 Phil Degnan RVP Operations 5 Westmark / White / WHI 32 Lee Grossbard RVP Operations 3 Wyndham Hotels 43 Steve Henderson RVP Operations 1 CSM/Hilton/Adams Mark 28 John Beltz RVP Sales 2 Wyndham Hotels 19 Jay Best RVP Sales 1 Wyndham/Red Lion/Marriott 22 Dan Engle RVP Sales 2 Lodgian / Interstate Hotels 26 David Kreizinger Director Hotel Accounting 1 Edwards Theaters / Ernst & Young 14 6

8 Favorable Hotel Management Relations 47 Hotels 10 Hotels 1 Hotel 3 Hotels 1 Hotel 7

9 Portfolio of Nationally Recognized Brands Marriott Hilton InterContinental Hotels Group Hyatt Other 8

10 Geographic Diversity Sunstone has diversified its portfolio since its IPO 62 hotels with 18,236 rooms in 19 states 9

11 Geographic Diversity EBITDA Contribution from Top 15 Metropolitan Statistical Areas (MSAs( MSAs) Top 15 MSAs 2006E EBITDA 1 Los Angeles-Long Beach, CA 12.8% 2 New York Metro, NY/NJ 10.2% 3 Chicago, IL 3.6% 4 Philadelphia, PA 1.6% 5 Washington, D.C. / Baltimore 15.8% 6 Detroit, MI 3.1% 7 Houston, TX 3.6% 8Atlanta, GA 2.4% 9 Dallas, TX 0.0% 10 Boston, MA 0.0% 11 Riverside, CA 3.7% 12 Phoenix, AZ 0.0% 13 Minneapolis-St. Paul, MN 1.2% 14 Orange County, CA 4.2% 15 San Diego, CA 11.0% % of Total 2006E EBITDA 73.2% 1 (1) Full Year 2006 Estimated EBITDA including full year for acquisition hotels (including prior ownership) Source: Federal Communications Commission 11/17/03 10

12 California Concentration 36% of Total Hotel EBITDA (FY2005) 1 Los Angeles / Ventura Market2 Hyatt Century Plaza Renaissance Long Beach Residence Inn Manhattan Beach Residence Inn Oxnard Courtyard LAX Courtyard Oxnard 11.6% of Hotel EBITDA 1 Northern / Central California Market Marriott Napa Residence Inn Sacramento Courtyard Fresno Hawthorn Suites Sacramento 4.8% of Hotel EBITDA 1 Orange County / Riverside Market Fairmont Newport Beach Hyatt Newport Beach Sheraton Cerritos Marriott Riverside Courtyard Riverside Marriott Ontario 8.4% of Hotel EBITDA 1 3 San Diego Market Hilton Del Mar Embassy Suites La Jolla Marriott Del Mar Courtyard San Diego Holiday Inn Express San Diego Holiday Inn San Diego Downtown Holiday Inn San Diego Stadium 10.8% of Hotel EBITDA 1 23 hotels with 6,031 rooms (1) Full Year Hotel 2005 EBITDA including prior ownership (2) Includes Hyatt Century Plaza 2005 Hotel EBITDA (including prior ownership and Hyatt guarantee) 11

13 California Concentration 36% of Total Hotel EBITDA (FY 2005) 1 Los Angeles / Ventura Market 2 Northern / Central California Market Q Q %Chg RevPAR $89.37 $ % 24.7% EBITDA Growth Q vs. Q Q Q %Chg RevPAR $70.92 $ % 10.8% EBITDA Growth Q vs. Q Orange County / Riverside Market Q Q %Chg RevPAR $90.86 $ % 2 San Diego Market Q Q %Chg RevPAR $91.93 $ % % EBITDA Growth Q vs. Q % EBITDA Growth Q vs. Q hotels with 6,031 rooms (1) Full Year Hotel 2005 EBITDA including prior ownership (2) Century Plaza and Fairmont Newport Beach are excluded due to ongoing renovation/rebranding. (3) San Diego includes the prior ownership for Del Mar Marriott and La Jolla Embassy Suites 12

14 Middle Atlantic Concentration 26% of total Hotel EBITDA (FY 2005) 1 Philadelphia Market Marriott Philadelphia Greater New York Metro Hilton Times Square Hilton Huntington Renaissance Westchester Crowne Plaza Englewood Baltimore Market Renaissance Harborplace Middle Atlantic Region 2 Washington DC Market Marriott Tysons Corner Renaissance Washington DC Q Q %Chg RevPAR $ $ % 14.1% EBITDA Growth Q vs. Q (1) Full Year Hotel 2005 EBITDA including prior ownership (2) Includes prior ownership for Hilton Times Square 8 hotels with 3,402 rooms 13

15 Improved Operating Metrics Since IPO Average Rooms/Hotel IPO Portfolio 2005/2006 Acquisitions 2005 RevPAR (1) $ $ $ $ $90.00 $80.00 $70.00 $60.00 $76.84 IPO Portfolio $ /2006 Acquisitions (1) Reflects 2005 RevPAR (including prior ownership). 14

16 Recent Acquisitions Over $1.3 Billion of Acquisitions since IPO Closed # of Purchase Price / Date Asset Location Rooms Price (mm) Key June '05 Renaissance 5 Hotel Atlanta, GA 387 $92K Portfolio (excluding DC) Baltimore, MD 622 $239K Long Beach, CA 373 $121K Orlando, FL 780 $164K Westchester, NY 357 $118K 2,519 $399.5 $159K July '05 Sheraton Cerritos Cerritos, CA 203 $24.8 $122 K July '05 Renaissance D.C. (1) Washington, DC 807 $160.0 $198 K July '05 Fairmont Newport Beach Newport Beach, CA 444 $72.0 $162 K October '05 Hyatt Century Plaza Century City, CA 728 $293.0 $402 K January '06 San Diego Marriott Del Mar San Diego, CA 284 $69.0 $243 K March '06 Hilton New York Times Square New York, NY 444 $242.5 $546 K May '06 Embassy Suites La Jolla La Jolla, CA 335 $100.0 $299 K (1) Represents 100% ownership. Total / Average 5,764 $1,360.8 $236 K 15

17 Improved Segment Concentration % of Hotel EBITDA At IPO 54 Hotels / 13,183 Rooms/ 244 rooms avg. Midscale, 12% % of 2005 Hotel EBITDA (1) 62 Hotels / 18,236 Rooms/ 294 rooms avg. Upscale, 19% Luxury, 1% Midscale, 5% Upscale, 31% Upper Upscale, 57% Upper Upscale, 75% Increased percentage of luxury, upper upscale and upscale hotel revenues from 88% to 95% (1) Reflects current portfolio and all 2005 /2006 acquisitions as if owned for FY

18 Hilton New York Times Square Acquisition Update Premier Midtown Manhattan Property 444 guest rooms 330 sf standard guest rooms among largest in Midtown Manhattan Part of a 970,000 sf mixed-use entertainment complex Opened in 2000 Asset Management Initiatives Signed me-to agreement that binds the hotel to the city-wide consortium s final collective bargaining agreement once negotiated Working with the union to increase staffing flexibility in F&B outlets Add 16 new guestrooms by converting 2-bay suites into two keys Franchise Conversion $15 million franchise conversion fee (2% royalty) Sunstone Hotel Properties/IHR installed as manager Ability to sell property in 2010 free of brand and management encumbrance 17

19 Century Plaza Acquisition Update Landmark Asset as the highest profile meeting center in Los Angeles 728 guest rooms 141,000 sf of meeting space Largest ballroom in Los Angeles Asset Management Initiatives Health Club / Spa leased to third party - Equinox $1.0 million per year lease + participation rent vs. $0.3 million annual profit (2005) Outsourced laundry facility reducing overall expense by $0.3 million per year & eliminating capital improvement to on-site facility Renegotiated parking agreement increasing parking profit by $0.2 million Re-concepting of lobby area including the addition of a coffee/retail outlet & bar Evaluating addition of Press Junket rooms Hyatt Guarantee 18

20 Marriott Del Mar Acquisition Highlights Opened in January guest rooms 12,100 sf of meeting space Arterra, one of the top dining spots in North County San Diego, developed by celebrity chef Bradley Ogden Asset Management Initiatives Expansion of bar to include an outdoor patio Surrounding Office Market Asset is situated in Del Mar Heights, San Diego County s most expensive office sub-market 4.0 million sf of existing office space 840k sf of office space under construction Strong Market 9.6% RevPAR growth in San Diego market 2005 (Smith Travel) 15.8% YTD 2006 RevPAR growth 19

21 Embassy Suites La Jolla Acquisition Highlights Opened in July suites / 12-story Interior Atrium Strict zoning regulations have created high barriers-toentry in this sub-market P.F. Chang s China Bistro Restaurant Asset Management Initiatives Buyout of current restaurant lease for $0.4 million resulting in an estimated $1.6 million of additional restaurant/banquet revenue in 2007 Surrounding Office Market Hotel is situated in University Towne Center, one of San Diego County s most expensive office sub-markets University Towne Center is located within the center of the Golden Triangle 6.0 million sf of existing office space 575k sf of office space under construction with 0.5 miles from the Hotel Corporate accounts include Biogen, Boeing, IBM, Intuit, Pfizer, Qualcomm, Sun Microsystems and University of California Strong Performance The Hotel s average occupancy over the last 12 years (since 1994) is 77.1% 9.2% YTD 2006 RevPAR growth 2005 RevPAR Index ranks 3 rd, within 5% of Hilton Torrey Pines and Hyatt La Jolla Aventine 20

22 Recent Dispositions $77 million of dispositions since IPO Date Asset / Location #of Rooms Total Proceeds (mm) Price / Key Q Holiday Inn / Flagstaff, AZ San Marcos Resort / Chandler, AZ $21.3 $47K Q Holiday Inn / Mesa, AZ Doubletree / Carson, CA $26.1 $56K Q Holiday Inn / Provo, UT 78 $3.7 $47K Holiday Inn / Hollywood, CA $162K Total / Average 1,159 $77.0 $66K 21

23 CAPEX MAJOR PROJECTS UPDATE

24 Significant, Well-Timed Capital Expenditures (Dollars in millions) Capital Expenditures Present (1) 13% of total revenue $ Q FY 2006E (2) 11% of total revenue $ % of total revenue $ % of total revenue $ % of total revenue $132.5 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 (1) Reflects 2001 Q (2) Based on midpoint of Capex guidance per Q earnings release. 23

25 Major Projects - Update Fairmont Newport Beach Hyatt Regency Century Plaza Renaissance Resort at Sea World The International Other Projects 24

26 Major Projects Fairmont Newport Beach TOTAL RENOVATION BUDGET: $30.0 Million Completed Projects Guestrooms All 444 guestrooms and suites completed May 1, 2006 Gold Lounge Completed May 2006 Gold Level upgrade $100 - $125 per night Lobby, Lounge, Bar, Restaurant & Public Spaces Completed May 2006 Pool Deck Completed May 2006 In-Process Projects New Driveway, Exterior Pre-function Anticipated Completion Date: July 2006 Spa Anticipated Completion Date: October

27 Major Projects Fairmont Newport Beach Guestroom Prior to Renovation 26

28 Major Projects Fairmont Newport Beach Guestroom Post Renovation 27

29 Major Projects Fairmont Newport Beach Suite Prior to Renovation 28

30 Major Projects Fairmont Newport Beach Suite Post Renovation 29

31 Major Projects Fairmont Newport Beach Lobby Prior to Renovation 30

32 Major Projects Fairmont Newport Beach Lobby Post Renovation 31

33 Major Projects Fairmont Newport Beach Public Areas Prior to Renovation 32

34 Major Projects Fairmont Newport Beach Public Areas Post Renovation 33

35 Major Projects Hyatt Regency Century Plaza TOTAL RENOVATION BUDGET: $26 Million Project Description Guestrooms/Guest Baths & Corridors Complete renovation of 728 guestrooms, baths & 15 corridors including all finishes, case goods and softgoods Scheduled construction period: July October 2006 Equinox Spa and Fitness Complete renovation of existing spa/health club Scheduled construction period: July December 2006 Lobby Level Improvements Front desk relocation (July 2006 August 2006) Restaurant re-concepting (September 2006 December 2006) Coffee/Retail Outlet (September 2006 December 2006) Back Yard / Pool Area Reconfiguation Scheduled construction period: October December

36 Major Projects Hyatt Regency Century Plaza Current Guestroom 35

37 Major Projects Hyatt Regency Century Plaza Sample Renovated Room 36

38 Major Projects Renaissance Resort at Sea World TOTAL RENOVATION BUDGET: $19.6 Million Project Description Atrium Complete renovation and re-concepting of atrium to include lobby, themed restaurant, bar, sports bar, Starbucks and retail outlets Scheduled construction period: July 2006 February 2007 Guestrooms/Guest Baths & Corridors Renovation of 780 guestrooms, baths & corridors including all softgoods, paint, wall coverings, lighting & room signage Scheduled construction period: July October 2006 Porte Cochere New architectural features to enhance sense of arrival including lighting and automatic entry doors Scheduled design and construction period: August March 2007 Meeting Space Replace carpet, wallcoverings, painting and lighting Scheduled construction period: July October

39 Major Projects The International TOTAL RENOVATION BUDGET: $2.5 Million Project Description Hotel Within a Hotel Top floor (19 rooms) of the Kahler Grand Hotel in Rochester, MN Complete renovation and reconfiguration of 35 rooms to 19 suites May ADR $678, Occ 35.8%, Room Rev $148K vs. Bud of $56K Completed April,

40 Major Projects Other 2006 Projects Project Description Hilton Times Square Projected 2006 Budget: $2.6M Conversion of 16 Suite Parlors to additional Guestrooms Enhance signage at street level entrance Replace lobby FF&E Renaissance Hotel Washington, D.C. Projected 2006 Budget: $7.8M Meeting Space/Prefunction/Ballroom renovation- carpet, wallcoverings, finishes & lighting Restaurant re-design Concierge lounge upgrade of softgoods and casegoods Health Club relocation Renaissance Baltimore Inner Harbor Projected 2006 Budget: $6.9M Add street level and building top signage Re-concepting of restaurant & conversion of excess space to new meeting space Upgrade prefunction FF&E & replace ballroom/prefunction carpet and lighting Install 32 LCD televisions and dressers in 92 concierge rooms 39

41 Major Projects Other 2006 Projects Project Description Embassy Suites La Jolla Projected 2006 Budget: $8.0M Complete renovation of guestrooms and bathrooms including softgoods, casegoods, granite vanities and 32 LCD televisions Renovate front desk and atrium including carpet, paint, lighting and finishes Re-concept restaurant Marriott Tyson s Corner Projected 2006 Budget: $4.7M Entry driveway reconfiguration Complete Lobby renovation Expand Shula s restaurant to enable breakfast service and convert existing bar and restaurant to buffet and private dining rooms Convert 2 nd floor meeting rooms to 5 additional guestrooms and 1 suite Renaissance Long Beach Projected 2006 Budget: $3.9M Full service Starbucks outlet Meeting space renovation carpet, paint, wallcoverings and lighting Lobby improvements new front desk, concierge desk, restaurant and bar Porte Cochere and exterior renovation including lighting 40

42 Hilton Del Mar Case Study

43 Case Study: Del Mar Hilton Property Overview Acquired December 5, Rooms Wyndham Portfolio $5.0 million renovation commenced 1Q 2003 and completed 4Q 2003 including: Full renovation of Guestrooms and bathrooms Interior and exterior public areas Banquet and meeting facilities Lobby bar and restaurant 42

44 Case Study: Del Mar Hilton Acquisition\Repositioning Timeline Annual RevPAR $73.87 $ % $ % +18.5% $88.96 $ Acquisition Renovation Repositioning High Growth Dec Renovation: $5.0M total ($20K/key) Guestrooms - $2.2M ($9K/key) Bathrooms - $0.6M ($2K/key) Public Areas - $2.0 ($8K/key) Other - $0.2 ($1K/key) FY 2006E 43

45 Case Study: Del Mar Hilton Year Over Year Mix Shift Q Q Q Discount 45% Group 26% Corp/ Premium 29% Discount 42% Group 25% Corp/ Premium 33% Discount 25% Corp/ Premium 39% Group 36% Total Discount Rooms Total Occ Rooms RevPAR RevPAR Index Q ,056 15,778 $ Q ,606 18,381 $ % Change 7.8% 16.5% 16.8% +1.4 Q ,523 17,911 $ % Change (40.5%) (2.6%) 34.9%

46 Case Study: Del Mar Hilton Investment Returns Return 2003 EBITDA $1.8 Purchase Price $ % 2006 EBITDA $4.8 Purchase + Capex $ % EBITDA (06-03) $3.0 Capex $ % 45

47 Case Study: Class of 2004 Major Renovations Return on Invested Capital Return on Capex Hotel 2003 EBITDA 2006E EBITDA 2004 Capex in EBITDA / Capex San Diego Courtyard $1,940,677 $4,570,000 $3,100, % Chicago Embassy Suites $4,829,864 $9,980,000 $7,300, % Tysons Corner Marriott $4,691,693 $8,660,000 $6,200, % Manhattan Beach Residence Inn $1,630,407 $3,220,000 $2,800, % Englewood Crowne Plaza $377,772 $1,250,000 $1,600, % Philadelphia Marriott $3,238,342 $4,550,000 $2,700, % Hyatt Regency Newport Beach $3,457,718 $6,870,000 $8,300, % Ontario Marriott $2,720,810 $4,280,000 $3,900, % Troy Marriott $5,224,581 $6,570,000 $4,700, % Grand Rapids Crowne Plaza $1,777,641 $1,980,000 $1,700, % Houston Marriott $2,779,506 $3,320,000 $5,000, % Williamsburg Crowne Plaza $1,202,218 $1,440,000 $3,400, % Oxnard Courtyard $1,385,617 $1,580,000 $3,400, % 46

48 Debt Summary

49 PF Debt Maturity Schedule Weighted Average Interest Rate: 5.76% (1) (Dollars in millions) $300.0 $250.0 $250.0 $276.0 $267.0 $200.0 $175.0 $150.0 $135.0 $100.0 $50.0 $0.0 $81.0 $65.0 $75.0 $70.0 $0.0 $13.7 $9.0 $6.0 $0.0 $ % Fixed Rate Debt; Average Maturity of Approximately 9 years 48

50 Non-GAAP Reconciliation Reconciliation of Hotel EBITDA to Hotel Net Income Hilton Del Mar: Full year 2003 EBITDA for this hotel was $1.8 million based on $0.6 million of net income available to common stockholders and $1.2 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $4.8 million based on $3.3 million of net income available to common stockholders and $1.5 million of depreciation. San Diego Courtyard: Full year 2003 EBITDA for this hotel was $1.9 million based on $0.9 million of net income available to common stockholders and $1.0 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $4.6 million based on $3.7 million of net income available to common stockholders and $0.9 million of depreciation. Chicago Embassy Suites: Full year 2003 EBITDA for this hotel was $4.8 million based on $2.6 million of net income available to common stockholders and $2.2 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $10.0 million based on $7.2 million of net income available to common stockholders and $2.8 million of depreciation. Tysons Corner Marriott: Full year 2003 EBITDA for this hotel was $4.7 million based on $2.5 million of net income available to common stockholders and $2.2 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $8.7 million based on $6.1 million of net income available to common stockholders and $2.6 million of depreciation. Manhattan Beach Residence Inn: Full year 2003 EBITDA for this hotel was $1.6 million based on $1.4 million of net income available to common stockholders and $0.2 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $3.2 million based on $2.6 million of net income available to common stockholders and $0.6 million of depreciation. Englewood Crowne Plaza: Full year 2003 EBITDA for this hotel was $0.4 million based on $0.0 million of net income available to common stockholders and $0.4 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $1.2 million based on $0.6 million of net income available to common stockholders and $0.6 million of depreciation. Philadelphia Marriott: Full year 2003 EBITDA for this hotel was $3.2 million based on $1.7 million of net income available to common stockholders and $1.5 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $4.5 million based on $2.8 million of net income available to common stockholders and $1.7 million of depreciation. Hyatt Regency Newport Beach: Full year 2003 EBITDA for this hotel was $3.5 million based on $1.9 million of net income available to common stockholders and $1.6 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $6.9 million based on $4.4 million of net income available to common stockholders and $2.5 million of depreciation. Ontario Marriott: Full year 2003 EBITDA for this hotel was $2.7 million based on $1.9 million of net income available to common stockholders and $0.8 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $4.3 million based on $3.2 million of net income available to common stockholders and $1.1 million of depreciation. Troy Marriott: Full year 2003 EBITDA for this hotel was $5.2 million based on $3.1 million of net income available to common stockholders and $2.1 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $6.6 million based on $4.1 million of net income available to common stockholders and $2.5 million of depreciation. Grand Rapids Crowne Plaza: Full year 2003 EBITDA for this hotel was $1.8 million based on $1.0 million of net income available to common stockholders and $0.8 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $2.0 million based on $0.9 of net income available to common stockholders and $1.1 million of depreciation. Houston Marriott: Full year 2003 EBITDA for this hotel was $2.8 million based on $1.7 million of net income available to common stockholders and $1.1 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $3.3 million based on $1.9 of net income available to common stockholders and $1.4 million of depreciation. Williamsburg Crowne Plaza: Full year 2003 EBITDA for this hotel was $1.2 million based on $0.5 million of net income available to common stockholders and $0.7 million of depreciation. Full year 2006 EBITDA for this hotel is estimated to be $1.4 million based on $0.4 million of net income available to common stockholders and $1.0 million of depreciation. Oxnard Courtyard: Full year 2003 EBITDA for this hotel was $1.4 million based on $1.0 million of net income available to common stockholders and $0.4 million of dep 49

51 NAREIT INVESTOR BREAKFAST June 7, 2006