Business Context and Reporting Period
Company: Sunstone Hotel Investors, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 3, 2008
Context: The filing addresses a revision to historical financial statements in connection with anticipated registration statements on Form S-3 and Form S-8. The Company is reclassifying the Hyatt Regency Century Plaza as discontinued operations in accordance with FASB Statement No. 144.
Key Financial Metrics
This filing is a current report regarding accounting reclassifications and does not contain specific numerical data for revenue, profit, cash flow, margins, debt, or liquidity for the current period. The filing explicitly states that the reclassification has no effect on the Company's reported net income available to common stockholders.
Material Changes Versus Prior Period
- Reclassification of Discontinued Operations: The Company is revising its historical financial statements to include the income and expenses of the Hyatt Regency Century Plaza in discontinued operations on consolidated income statements.
- Balance Sheet Adjustments: Related assets and liabilities for the Hyatt Regency Century Plaza are being reclassified to assets and liabilities related to discontinued operations on consolidated balance sheets.
- Scope of Update: This update modifies Items 6, 7, and 8 of the Company's 2007 Annual Report on Form 10-K. No other matters in the 2007 Form 10-K have been updated.
- Historical Context: The property was sold in May 2008 and was previously reported as discontinued operations in the Form 10-Q for the periods ended June 30, 2008.
Guidance, Outlook, and Management Commentary
Management Commentary: Management confirms that the reclassification is necessary to align historical data with the treatment of the Hyatt Regency Century Plaza sale. The filing notes that this adjustment does not alter the reported net income available to common stockholders.
Risks and Contingencies: The filing does not disclose new risks or contingencies beyond the accounting adjustment.
Unusual Items: The primary unusual item is the retroactive reclassification of a sold asset to discontinued operations for the 2007 fiscal year.
Important Facts for Investor Verification
- Verify the updated Selected Financial Data, Management's Discussion and Analysis (MD&A), and Financial Statements for the year ended December 31, 2007, filed as Exhibit 99.1.
- Confirm that the reclassification of the Hyatt Regency Century Plaza does not impact the net income available to common stockholders.
- Review the anticipated Form S-3 and Form S-8 registration statements to understand the context of this historical data revision.
- Note that the 2007 Form 10-K has been amended only to reflect the discontinued operations status of the specific hotel property; other historical data remains unchanged.