8-K - SHO - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 22, 2023

Sunstone Hotel Investors, Inc.

(Exact Name of Registrant as Specified in Its Charter)



Maryland	001-32319	20-1296886
(State or Other Jurisdiction of<br>Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer<br>Identification Number)


15 Enterprise, Suite 200 ** Aliso Viejo , California**		92656
(Address of Principal Executive Offices)		(Zip Code)

( 949 ) 330-4000

(Registrant’s telephone number including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	SHO	New York Stock Exchange
Series H Cumulative Redeemable Preferred Stock, $0.01 par value	SHO.PRH	New York Stock Exchange
Series I Cumulative Redeemable Preferred Stock, $0.01 par value	SHO.PRI	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


	Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Item 2.02.Results of Operations and Financial Condition.

On February 22, 2023, Sunstone Hotel Investors, Inc. (the “Company”) issued a press release regarding its financial results for the fourth quarter and year ended December 31, 2022. The press release referred to supplemental financial information that is available on the Company’s website, free of charge, at www.sunstonehotels.com. A copy of the press release and the supplemental financial information are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by this reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01.Financial Statements and Exhibits.

(d) The following exhibits are furnished herewith:

EXHIBIT INDEX


Exhibit No.	****	Description
99.1		Press Release, dated February 22, 2023.
99.2		Supplemental Financial Information for the fourth quarter and year ended December 31, 2022.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Sunstone Hotel Investors, Inc.

Date: February 22, 2023	By:	/s/ Aaron R. Reyes
		Aaron R. Reyes (Principal Financial Officer and Duly Authorized Officer)

Exhibit 99.1

For Additional Information:

Aaron Reyes

Sunstone Hotel Investors, Inc.

(949) 382-3018

SUNSTONE HOTEL INVESTORS REPORTS RESULTS FOR FOURTH QUARTER AND FULL YEAR 2022

Completes Nearly $700 Million of Transaction Activity in 2022

Returns Additional Capital to Shareholders Through Incremental Share Repurchases and Dividends

ALISO VIEJO, CA – February 22, 2023 – Sunstone Hotel Investors, Inc. (the “Company” or “Sunstone”) (NYSE: SHO), the owner of Long-Term Relevant Real Estate® in the lodging industry, today announced results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Operational Results (as compared to Fourth Quarter 2021):

●	Net Income: Net income was $17.5 million as compared to $138.3 million. Excluding the gain on two hotels sold during the quarter, fourth quarter 2021 would have been a net loss of $14.2 million.
●	Comparable Portfolio RevPAR: RevPAR at the comparable 12 hotels the Company owned during both 2022 and 2021 plus The Confidante Miami Beach (the “Comparable Portfolio”), increased 34.2% to $193.59. The average daily rate was $286.37 and occupancy was 67.6%.
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●	Total Portfolio RevPAR: RevPAR at the 15 hotels, which includes the Comparable Portfolio, the Montage Healdsburg and the Four Seasons Resort Napa Valley (the “Total Portfolio”), was $206.73. The average daily rate was $308.55 and occupancy was 67.0%.
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●	Adjusted EBITDAre: Adjusted EBITDAre, excluding noncontrolling interest increased 120.6% to $68.8 million.
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●	Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 188.9% to $0.26. In 2022, the Company changed its presentation of Adjusted FFO attributable to common stockholders to exclude the noncash amortization expense associated with deferred stock compensation. Adjusted FFO attributable to common stockholders for the prior periods presented in this release have also been adjusted to exclude this expense. The per share impact of this change as compared to the Company’s prior presentation is $0.01 for both of the fourth quarters of 2022 and 2021.
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Full Year 2022 Operational Results (as compared to Full Year 2021):

●	Net Income: Net income was $90.8 million as compared to $33.0 million. Excluding the gains on three hotels sold during 2022 and two hotels sold during 2021, net income in 2022 would have been $67.8 million as compared to a net loss of $119.5 million in 2021.
●	Comparable Portfolio RevPAR: RevPAR at the Comparable Portfolio increased 73.2% to $194.31. The average daily rate was $289.15 and occupancy was 67.2%.
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●	Total Portfolio RevPAR: RevPAR at the Total Portfolio was $208.38. The average daily rate was $311.94 and occupancy was 66.8%.
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●	Adjusted EBITDAre: Adjusted EBITDAre, excluding noncontrolling interest increased 247.8% to $233.8 million.
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●	Adjusted FFO: Adjusted FFO attributable to common stockholders per diluted share increased 866.7% to $0.87. The per share impact of the change in presentation noted above as compared to the Company’s prior presentation is $0.05 for both 2022 and 2021.
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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.

Bryan A. Giglia, Chief Executive Officer, stated, “Our fourth quarter results exceeded our expectations as growing corporate and group business at our urban hotels continued to catch up with strong leisure demand at our resort properties. During the quarter, we collected pandemic-related business interruption insurance proceeds which added to our earnings. Overall, our fourth quarter builds on what was already a very productive year at Sunstone. During 2022, we completed the sale of three hotels in a lower growth market and recycled those proceeds into the acquisition of higher quality assets with a better growth profile, extended our debt maturities and unlocked more of the capacity in our balance sheet, invested in our portfolio, and returned meaningful capital to our shareholders.”

Mr. Giglia continued, “As we look forward into 2023, I am encouraged about the embedded growth potential of our portfolio. Continued demand recovery at our urban hotels and the ramp-up of our premier wine country resorts, will combine with the completion of our Westin Washington DC conversion to generate substantial earnings growth this year. In addition, in the second quarter, we will begin the transformational renovation at our recently acquired hotel in Miami, which will debut as Andaz Miami Beach next year and provide another layer of growth for the portfolio. While the macroeconomic outlook remains uncertain, we will look for opportunities to further recycle capital and return incremental capital to shareholders in the coming year.”

Unaudited Selected Statistical and Financial Data ($ in millions, except RevPAR, ADR and per share amounts)


	Quarter Ended December 31,								Year Ended December 31,
	2022		****	2021		****	Change		2022			2021			Change

Net Income	$	17.5		$	138.3		(87.4)	%	$	90.8		$	33.0		175.1	%
Income Attributable to Common Stockholders per Diluted Share	$	0.07		$	0.61		(88.5)	%	$	0.34		$	0.06		466.7	%

Comparable Portfolio RevPAR (1)	$	193.59		$	144.25		34.2	%	$	194.31		$	112.20		73.2	%

Comparable Portfolio Occupancy (1)		67.6	%		56.4	%	1,120	bps		67.2	%		46.2	%	2,100	bps
Comparable Portfolio ADR (1)	$	286.37		$	255.77		12.0	%	$	289.15		$	242.86		19.1	%

Total Portfolio RevPAR (2)	$	206.73			N/A		N/A		$	208.38			N/A		N/A

Total Portfolio Occupancy (2)		67.0	%		N/A		N/A			66.8	%		N/A		N/A
Total Portfolio ADR (2)	$	308.55			N/A		N/A		$	311.94			N/A		N/A

Comparable Portfolio Adjusted EBITDAre Margin (1)		28.5	%		23.8	%	470	bps		30.4	%		18.1	%	1,230	bps

Adjusted EBITDAre, excluding noncontrolling interest	$	68.8		$	31.2		120.6	%	$	233.8		$	67.2		247.8	%
Adjusted FFO Attributable to Common Stockholders	$	53.7		$	19.7		172.5	%	$	184.6		$	20.0		821.9	%
Adjusted FFO Attributable to Common Stockholders per Diluted Share	$	0.26		$	0.09		188.9	%	$	0.87		$	0.09		866.7	%

(1)	Comparable Portfolio operating statistics presented here and elsewhere in this release include both prior ownership results and the Company’s ownership results for The Confidante Miami Beach, acquired by the Company in June 2022.
(2)	The Total Portfolio consists of all 15 hotels owned by the Company as of December 31, 2022. Total Portfolio operating statistics presented here include both prior ownership results and the Company’s ownership results for The Confidante Miami Beach, acquired by the Company in June 2022. The Four Seasons Resort Napa Valley is a newly-developed hotel which opened on a limited basis in October 2021; therefore, prior year information is not comparable.
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(1)

Comparable Portfolio operating statistics presented here and elsewhere in this release include both prior ownership results and the Company’s ownership results for The Confidante Miami Beach, acquired by the Company in June 2022.

(2)

The Total Portfolio consists of all 15 hotels owned by the Company as of December 31, 2022. Total Portfolio operating statistics presented here include both prior ownership results and the Company’s ownership results for The Confidante Miami Beach, acquired by the Company in June 2022. The Four Seasons Resort Napa Valley is a newly-developed hotel which opened on a limited basis in October 2021; therefore, prior year information is not comparable.

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2022 Highlights

●	Asset Dispositions: In the first quarter of 2022, the Company completed the sale of three hotels in a lower growth market for a combined gross sale price of $197.0 million. The sale price represents a 10.8x multiple on the hotels’ combined 2019 EBITDAre.
●	Andaz Miami Beach Conversion: In June 2022, the Company completed the acquisition of the 339-room The Confidante Miami Beach for a gross purchase price of $232.0 million. The Company expects to invest approximately $60 million to reposition the hotel into a premiere luxury beachfront resort. Upon completion of the renovation, the hotel will debut as Andaz Miami Beach and the Company expects the hotel to generate an 8% to 9% stabilized net operating income yield on the total investment in the hotel.
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●	Hilton San Diego Bayfront Joint Venture Partner Buyout: In June 2022, the Company completed the purchase of the remaining 25% interest in the joint venture that owned the leasehold interest in the 1,190-room Hilton San Diego Bayfront. The well-located hotel is a market-leading property in a premiere convention and resort destination. The purchase price equated to a consolidated value of $628.0 million and represents a highly attractive 11.9x multiple on the hotel’s 2022 EBITDAre.
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●	Stock Repurchases: Since the beginning of 2022, the Company has repurchased $119.2 million of the Company’s common stock (including $11.0 million repurchased in 2023) at an average purchase price of $10.46 per share. The average purchase price per share represents a substantial discount to consensus estimates of NAV and implies a highly attractive valuation multiple on the Company’s stabilized cash flow. During 2022 and 2023, the Company repurchased a total of 11,395,129 shares, which represents 5.2% of all shares outstanding as of the end of 2021.
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●	Balance Sheet: In July 2022, the Company completed a recast of its corporate credit agreement, which expanded the Company’s unsecured borrowing capacity and extended the maturity of its in-place term loans. As a result of the recast, the Company regained full availability on its $500.0 million revolving credit facility and made more prudent use of its debt capacity.
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Balance Sheet and Liquidity Update

As of December 31 2022, the Company had $157.2 million of cash and cash equivalents, including restricted cash of $56.0 million, total assets of $3.1 billion, including $2.8 billion of net investments in hotel properties, total debt of $816.1 million and stockholders’ equity of $2.1 billion.

Operations Update

January 2023, 2022 and 2019 results for the Comparable Portfolio included the following ($ in millions, except RevPAR and ADR):


	January
	2023 (1)			2022			2019			Change 2023 vs. 2022		Change 2023 vs. 2019
Room Revenue	$	42.5		$	24.4		$	42.3		73.9	%	0.5	%

RevPAR	$	182.53		$	104.90		$	181.77		74.0	%	0.4	%
Occupancy		63.1	%		39.7	%		75.2	%	2,340	bps	(1,210)	bps
Average Daily Rate	$	289.27		$	264.22		$	241.72		9.5	%	19.7	%

(1)	January 2023 results are preliminary and may be adjusted during the Company’s month-end close process.
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Capital Investments

The Company invested $31.0 million and $128.6 million into its portfolio during the fourth quarter and year ended December 31, 2022, respectively. The majority of the investment consisted primarily of additional progress on the renovation of the Renaissance Washington DC in preparation for its conversion to the Westin brand in 2023, and a rooms renovation at the Hyatt Regency San Francisco which was completed during the third quarter of 2022.

In 2023, the Company expects to invest approximately $130 million to $150 million into its portfolio with the majority of the investment consisting of the completion of the renovation of the Renaissance Washington DC and its conversion to the Westin brand, the beginning of the transformational renovation of The Confidante Miami Beach in preparation for its conversion to Andaz Miami Beach in 2024 and the renovation of the Renaissance Long Beach and its conversion to the Marriott brand. These projects are expected to drive incremental growth upon completion and will further enhance the earnings potential and value of these well-located hotels. The Company currently anticipates that it will incur approximately $16 million to $18 million of EBITDAre displacement in 3

2023 in connection with its planned capital investments. Based on the Company’s current outlook, $5 million to $6 million of the EBITDAre displacement is expected to be incurred in the first half of the year in connection with the completion of the renovation work at the soon to be rebranded Renaissance Washington DC, and $11 million to $12 million of the displacement is expected in the second half of the year as renovation work commences at The Confidante Miami Beach in connection with its transformation to Andaz Miami Beach.

2023 Outlook

For the first quarter of 2023, the Company expects:


Metric ($ in millions, except per share data)		Quarter Ended March 31, 2023 Guidance (1)
Net Income		$3 to $7
Total Portfolio RevPAR Growth (as compared to the first quarter of 2022)		+ 30% to + 32%
Adjusted EBITDAre		$51 to $55
Adjusted FFO Attributable to Common Stockholders		$34 to $38
Adjusted FFO Attributable to Common Stockholders per Diluted Share		$0.16 to $0.18
Diluted Weighted Average Shares Outstanding		208,000,000

(1)	Detailed reconciliations of Net Income to non-GAAP financial measures are provided later in this release.

First quarter 2023 guidance is based in part on the following full year assumptions:

●	Full year total Adjusted EBITDAre displacement of approximately $16 million to $18 million in connection with planned capital investments.
●	Full year corporate overhead expense (excluding deferred stock amortization) of approximately $22 million to $23 million.
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●	Full year interest expense of approximately $52 million to $54 million, including approximately $2 million in amortization of deferred financing costs.
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●	Full year preferred stock dividends of approximately $15 million, which includes the Series G, H and I cumulative redeemable preferred stock.
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Recent Developments

Stock Repurchase Program and At-the-Market Stock Offering Program Authorizations: On February 9, 2023, the Company’s Board of Directors reauthorized the Company’s stock repurchase program, which allows the Company to acquire up to $500.0 million of its common and preferred stock. In addition, the Company’s Board of Directors reauthorized the “At-the-Market” stock offering program, allowing the Company to issue common stock up to an aggregate offering amount of $300.0 million. The authorizations have no stated expirations and future issuances or repurchases under the programs will depend on various factors, including the Company’s capital needs, restrictions under its various financing agreements, as well as the price of the Company’s common and preferred stock.

COVID-19 Business Interruption Insurance Proceeds: In the fourth quarter of 2022, the Company received business interruption proceeds of $10.0 million from one of its insurers as payment for revenue losses incurred at its hotels due to the COVID-19 pandemic. The Company is continuing to pursue its rights of recovery under the associated insurance policy, which has a $25.0 million limit of liability, inclusive of the $10.0 million which was received in the fourth quarter of 2022. Any additional business interruption proceeds will not be recognized until received, but the Company can make no assurances that any additional amounts will be recovered under the policy.

Dividend Update

On February 21, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of common stock, as well as cash dividends of $0.382813 per share payable to its Series H cumulative redeemable preferred stockholders and $0.356250 per share payable to its Series I cumulative redeemable preferred stockholders. The dividends will be paid on April 17, 2023 to stockholders of record as of March 31, 2023.

The Company expects to continue to pay a quarterly cash dividend of $0.05 per share of common stock throughout 2023. Consistent with the Company’s past practice, and to the extent that the expected regular quarterly dividends for 2023 do not satisfy the annual distribution requirements, the Company expects to satisfy the annual distribution requirement by paying a “catch-up” dividend in 4

January 2024. The level of any future quarterly dividends will be determined by the Company’s Board of Directors after considering the Company’s obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and risks affecting the Company’s business.

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 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 fourth quarter and full year 2022 financial results on February 22, 2023, at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). A live webcast of the call will be available via the Investor Relations section of the Company’s website at www.sunstonehotels.com. Alternatively, interested parties may dial 1-888-330-3573 and reference conference ID 4831656 to listen to the live call. A replay of the webcast 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 owns 15 hotels comprised of 7,735 rooms, the majority of which are operated under nationally recognized brands. Sunstone’s strategy is to create long-term stakeholder value through the acquisition, active ownership and disposition of hotels considered to be Long-Term Relevant Real Estate®. For further information, please visit Sunstone’s website at www.sunstonehotels.com. The Company’s website is provided as a reference only and any information on the website is not incorporated by reference in this release.

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: we own upper upscale and luxury hotels in an industry that is highly competitive; events beyond our control, including economic slowdowns or recessions, global pandemics such as those caused by COVID-19 and its variants, natural disasters, civil unrest and terrorism; rising hotel operating costs, including wages, employee-related benefits, food costs, commodity costs, including those used to renovate or reposition our hotels, property taxes, property and liability insurance and utilities may not be offset by increased room rates; system security risks, data protection breaches, cyber-attacks and systems integration issues, including those impacting the Company’s suppliers, hotel managers or franchisors; a significant portion of our hotels are geographically concentrated so we may be harmed by economic downturns or natural disasters in these areas of the country; we face possible risks associated with the physical and transitional effects of climate change; uninsured or underinsured losses could harm our financial condition; the operating results of some of our hotels are significantly reliant upon group and transient business generated by large corporate customers, and the loss of such customers for any reason could harm our operating results; the increased use of virtual meetings and other similar technologies could lessen the need for business-related travel, and, therefore, demand for rooms in our hotels may be adversely affected; our hotels have an ongoing need for capital investment and we may incur significant capital expenditures in connection with acquisitions, repositionings and other improvements, some of which are mandated by applicable laws or regulations or agreements with third parties, and the costs of such renovations, repositionings or improvements may exceed our expectations or cause other problems; delays in the acquisition, renovation or repositioning of hotel properties may have adverse effects on our results of operations and returns to our stockholders; accounting for the acquisition of a hotel property or other entity involves assumptions and estimations to determine fair value that could differ materially from the actual results achieved in future periods; volatility in the debt and equity markets may adversely affect our ability to acquire, renovate, refinance or sell our hotels; we may pursue joint venture investments that could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturer; we may be subject to unknown or contingent liabilities related to recently sold or acquired hotels, as well as hotels we may sell or acquire in the future; we may seek to acquire a portfolio of hotels or a company, which could present more risks to our business and financial results than the acquisition of a single hotel; the sale of a hotel or portfolio of hotels is typically subject to contingencies, risks and uncertainties, any of which may cause us to be unsuccessful in completing the disposition; the illiquidity of real estate investments and the lack of alternative uses of hotel properties could significantly limit our ability to respond to adverse changes in the performance of our hotels; we may issue or invest in hotel loans, including subordinated or mezzanine loans, which could involve greater risks of loss than senior loans secured by income-producing real properties; if we make or invest in mortgage loans with the 5

intent of gaining ownership of the hotel secured by or pledged to the loan, our ability to perfect an ownership interest in the hotel is subject to the sponsor’s willingness to forfeit the property in lieu of the debt; one of our hotels is subject to a ground lease with an unaffiliated party, the termination of which by the lessor for any reason, including due to our default on the lease, could cause us to lose the ability to operate the hotel altogether and may adversely affect our results of operations; because we are a REIT, we depend on third-parties to operate our hotels; we are subject to risks associated with our operators’ employment of hotel personnel; most of our hotels operate under a brand owned by Marriott, Hilton, Hyatt, Four Seasons or Montage. Should any of these brands experience a negative event, or receive negative publicity, our operating results may be harmed; our franchisors and brand managers may adopt new policies or change existing policies which could result in increased costs that could negatively impact our hotels; future adverse litigation judgments or settlements resulting from legal proceedings could have an adverse effect on our financial condition; claims by persons regarding our properties could affect the attractiveness of our hotels or cause us to incur additional expenses; the hotel business is seasonal and seasonal variations in business volume at our hotels will cause quarterly fluctuations in our revenue; changes in the debt and equity markets may adversely affect the value of our hotels; certain of our hotels have in the past become impaired and additional hotels may become impaired in the future; laws and governmental regulations may restrict the ways in which we use our hotel properties and increase the cost of compliance with such regulations. Noncompliance with such regulations could subject us to penalties, loss of value of our properties or civil damages; corporate responsibility, specifically related to ESG factors and commitments, may impose additional costs and expose us to new risks that could adversely affect our results of operations, financial condition and cash flows; our franchisors and brand managers may require us to make capital expenditures pursuant to property improvement plans or to comply with brand standards; termination of any of our franchise, management or operating lease agreements could cause us to lose business or lead to a default or acceleration of our obligations under certain of our debt instruments; the growth of alternative reservation channels could adversely affect our business and profitability; the failure of tenants in our hotels to make rent payments under our retail and restaurant leases may adversely affect our results of operations; we rely on our corporate and hotel senior management teams, the loss of whom may cause us to incur costs and harm our business; if we fail to maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results; we have outstanding debt which may restrict our financial flexibility; certain of our debt is subject to variable interest rates, which can create uncertainty in forecasting our interest expense and may negatively impact our operating results; and other risks and uncertainties associated with the Company’s business described in its 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 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. 6

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 deferred stock compensation: we 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.

●	Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles 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 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; the write-off of development costs associated with abandoned projects; property-level restructuring, severance and management transition costs; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments.

finance lease, and, therefore, we included a portion of the lease payment each month in interest expense. We adjust EBITDAre for the finance lease in order to more accurately reflect the actual rent due to the hotel’s lessor in the current period, as well as the operating performance of the hotel. 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 obligation 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 components (prior to our acquisition of the noncontrolling partner’s ownership interest in the partnership in June 2022). We also exclude the real estate amortization of our right-of-use assets and related lease obligations, 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 preferred stock redemption charges, 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 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 release.

Sunstone Hotel Investors, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share data)


	December 31,			December 31,
	2022		****	2021

Assets
Current assets:
Cash and cash equivalents	$	101,223		$	120,483
Restricted cash		55,983			42,234
Accounts receivable, net		42,092			28,733
Prepaid expenses and other current assets		14,668			14,338
Assets held for sale, net		—			76,308
Total current assets		213,966			282,096

Investment in hotel properties, net		2,840,928			2,720,016
Operating lease right-of-use assets, net		15,025			23,161
Deferred financing costs, net		5,031			2,580
Other assets, net		7,867			13,196

Total assets	$	3,082,817		$	3,041,049

Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses	$	56,849		$	47,701
Accrued payroll and employee benefits		22,801			19,753
Dividends and distributions payable		13,995			3,513
Other current liabilities		65,213			58,884
Current portion of notes payable, net		222,030			20,694
Liabilities of assets held for sale		—			25,213
Total current liabilities		380,888			175,758

Notes payable, less current portion, net		590,651			588,741
Operating lease obligations, less current portion		14,360			25,120
Other liabilities		11,957			11,656
Total liabilities		997,856			801,275

Commitments and contingencies

Equity:
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized:
Series G Cumulative Redeemable Preferred Stock, 2,650,000 shares issued and outstanding at both December 31, 2022 and 2021, stated at liquidation preference of $25.00 per share		66,250			66,250
6.125% Series H Cumulative Redeemable Preferred Stock, 4,600,000 shares issued and outstanding at both December 31, 2022 and 2021, stated at liquidation preference of $25.00 per share		115,000			115,000
5.70% Series I Cumulative Redeemable Preferred Stock, 4,000,000 shares issued and outstanding at both December 31, 2022 and 2021, stated at liquidation preference of $25.00 per share		100,000			100,000
Common stock, $0.01 par value, 500,000,000 shares authorized, 209,320,447 shares issued and outstanding at December 31, 2022 and 219,333,783 shares issued and outstanding at December 31, 2021		2,093			2,193
Additional paid in capital		2,465,595			2,631,484
Retained earnings		1,035,353			948,064
Cumulative dividends and distributions		(1,699,330)			(1,664,024)
Total stockholders' equity		2,084,961			2,198,967
Noncontrolling interest in consolidated joint venture		—			40,807
Total equity		2,084,961			2,239,774

Total liabilities and equity	$	3,082,817		$	3,041,049

Sunstone Hotel Investors, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)


		Quarter Ended December 31,				Year Ended December 31,
	****	2022		2021		2022		2021
		(unaudited)
Revenues
Room		$	147,277	$	116,097	$	576,170	$	352,974
Food and beverage			65,847		36,368		240,564		83,915
Other operating			31,020		21,421		95,319		72,261
Total revenues			244,144		173,886		912,053		509,150
Operating expenses
Room			38,691		32,031		145,285		98,723
Food and beverage			48,187		30,719		174,146		79,807
Other operating			5,380		4,465		23,345		14,399
Advertising and promotion			12,559		10,356		46,979		31,156
Repairs and maintenance			9,432		11,220		36,801		33,898
Utilities			6,705		5,747		26,357		20,745
Franchise costs			4,410		3,886		15,839		11,354
Property tax, ground lease and insurance			15,819		16,318		68,979		64,139
Other property-level expenses			30,003		23,238		113,336		71,415
Corporate overhead			7,936		8,203		35,246		40,269
Depreciation and amortization			32,393		32,598		126,396		128,682
Impairment losses			3,466		1,671		3,466		2,685
Total operating expenses			214,981		180,452		816,175		597,272
Interest and other income (loss)			476		13		5,242		(343)
Interest expense			(11,717)		(7,201)		(32,005)		(30,898)
Gain on sale of assets			—		152,524		22,946		152,524
Gain (loss) on extinguishment of debt, net			26		(428)		(936)		(57)
Income before income taxes			17,948		138,342		91,125		33,104
Income tax provision, net			(485)		(18)		(359)		(109)
Net income			17,463		138,324		90,766		32,995
(Income) loss from consolidated joint venture attributable to noncontrolling interest			—		(335)		(3,477)		1,303
Preferred stock dividends and redemption charges			(3,350)		(3,349)		(14,247)		(20,638)
Income attributable to common stockholders		$	14,113	$	134,640	$	73,042	$	13,660

Basic and diluted per share amounts:
Basic and diluted income attributable to common stockholders per common share		$	0.07	$	0.61	$	0.34	$	0.06

Basic weighted average common shares outstanding			209,097		217,870		212,613		216,296
Diluted weighted average common shares outstanding			209,109		217,870		212,653		216,296

Distributions declared per common share		$	0.05	$	—	$	0.10	$	—

Sunstone Hotel Investors, Inc.

Reconciliation of Net Income to Non-GAAP Financial Measures

(Unaudited and in thousands)

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


	Quarter Ended December 31,					Year Ended December 31,
	2022		****	2021		2022			2021

Net income	$	17,463		$	138,324	$	90,766	$	32,995
Operations held for investment:
Depreciation and amortization		32,393			32,598		126,396		128,682
Interest expense		11,717			7,201		32,005		30,898
Income tax provision, net		485			18		359		109
Gain on sale of assets		—			(152,524)		(22,946)		(152,442)
Impairment losses - depreciable assets		1,379			1,671		1,379		2,685
EBITDAre		63,437			27,288		227,959		42,927

Operations held for investment:
Amortization of deferred stock compensation		2,230			2,212		10,891		12,788
Amortization of right-of-use assets and obligations		(359)			(340)		(1,409)		(1,344)
Amortization of contract intangibles, net		(18)			—		(61)		—
Finance lease obligation interest - cash ground rent		—			(351)		(117)		(1,404)
(Gain) loss on extinguishment of debt, net		(26)			428		936		57
Prior year property tax adjustments, net		—			—		—		(1,384)
Hurricane-related losses (insurance restoration proceeds), net		—			2,612		(2,755)		4,233
Property-level severance		729			(284)		729		4,278
Lawsuit settlement cost		—			21		—		712
Costs associated with financing no longer pursued		697			—		697		—
CEO transition costs		—			815		—		8,791
Impairment loss - right-of-use asset		2,087			—		2,087		—
Noncontrolling interest:
(Income) loss from consolidated joint venture attributable to noncontrolling interest		—			(335)		(3,477)		1,303
Depreciation and amortization		—			(791)		(1,456)		(3,198)
Interest expense		—			(160)		(374)		(661)
Amortization of right-of-use asset and obligation		—			73		132		290
Lawsuit settlement cost		—			(5)		—		(178)
Adjustments to EBITDAre, net		5,340			3,895		5,823		24,283

Adjusted EBITDAre, excluding noncontrolling interest	$	68,777		$	31,183	$	233,782	$	67,210

Sunstone Hotel Investors, Inc.

Reconciliation of Net Income to Non-GAAP Financial Measures

(Unaudited and in thousands, except per share data)

Reconciliation of Net Income to FFO Attributable to Common Stockholders and

Adjusted FFO Attributable to Common Stockholders


		Quarter Ended December 31,					Year Ended December 31,
		2022		****	2021		2022			2021

Net income	****	$	17,463		$	138,324	$	90,766	$	32,995
Preferred stock dividends and redemption charges			(3,350)			(3,349)		(14,247)		(20,638)
Operations held for investment:
Real estate depreciation and amortization			32,023			31,976		124,819		126,182
Gain on sale of assets			—			(152,524)		(22,946)		(152,442)
Impairment losses - hotel properties			—			1,671		—		2,685
Noncontrolling interest:
(Income) loss from consolidated joint venture attributable to noncontrolling interest			—			(335)		(3,477)		1,303
Real estate depreciation and amortization			—			(791)		(1,456)		(3,198)
FFO attributable to common stockholders			46,136			14,972		173,459		(13,113)

Operations held for investment:
Amortization of deferred stock compensation (1)			2,230			2,212		10,891		12,788
Real estate amortization of right-of-use assets and obligations			(287)			87		(1,155)		336
Amortization of contract intangibles, net			78			—		422		—
Noncash interest on derivatives, net			710			(1,211)		(2,194)		(3,405)
(Gain) loss on extinguishment of debt, net			(26)			428		936		57
Prior year property tax adjustments, net			—			—		—		(1,384)
Hurricane-related losses (insurance restoration proceeds), net			—			2,612		(2,755)		4,233
Property-level severance			729			(284)		729		4,278
Lawsuit settlement cost			—			21		—		712
Costs associated with financing no longer pursued			697			—		697		—
CEO transition costs			—			815		—		8,791
Impairment losses - right-of-use and depreciable assets			3,466			—		3,466		—
Preferred stock redemption charges			—			—		—		6,640
Noncontrolling interest:
Real estate amortization of right-of-use asset and obligation			—			73		132		290
Lawsuit settlement cost			—			(5)		—		(178)
Noncash interest on derivatives, net			—			1		—		(19)
Adjustments to FFO attributable to common stockholders, net			7,597			4,749		11,169		33,139

Adjusted FFO attributable to common stockholders		$	53,733		$	19,721	$	184,628	$	20,026

FFO attributable to common stockholders per diluted share		$	0.22		$	0.07	$	0.81	$	(0.06)

Adjusted FFO attributable to common stockholders per diluted share		$	0.26		$	0.09	$	0.87	$	0.09

Basic weighted average shares outstanding			209,097			217,870		212,613		216,296
Shares associated with unvested restricted stock awards			449			445		358		326
Diluted weighted average shares outstanding			209,546			218,315		212,971		216,622

(1)	Amortization of deferred stock compensation has been added to the adjustments to FFO attributable to common stockholders, net for the fourth quarter and year ended December 31, 2021 to conform to the current year’s presentation.

Sunstone Hotel Investors, Inc.

Reconciliation of Net Income to Non-GAAP Financial Measures

Guidance for First Quarter 2023

(Unaudited and in thousands, except for per share amounts)

Reconciliation of Net Income to Adjusted EBITDAre


	Quarter Ended
	March 31, 2023
		Low	****		High

Net income	$	3,000		$	7,400
Depreciation and amortization		32,200			32,200
Interest expense		12,900			12,500
Income tax provision		300			300
Amortization of deferred stock compensation		2,600			2,600
Adjusted EBITDAre	$	51,000		$	55,000

Reconciliation of Net Income to Adjusted FFO Attributable to Common Stockholders


		Quarter Ended
		March 31, 2023
			Low	****		High

Net income	****	$	3,000		$	7,400
Preferred stock dividends			(3,900)			(3,900)
Real estate depreciation and amortization			32,000			32,000
Amortization of deferred stock compensation			2,600			2,600
Adjusted FFO attributable to common stockholders		$	33,700		$	38,100

Adjusted FFO attributable to common stockholders per diluted share		$	0.16		$	0.18

Diluted weighted average shares outstanding			208,000			208,000

Sunstone Hotel Investors, Inc.

Non-GAAP Financial Measures

Hotel Adjusted EBITDAre and Margins

(Unaudited and in thousands)


	Quarter Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021

Comparable Portfolio Adjusted EBITDAre Margin (1)		28.5%		23.8%		30.4%		18.1%


Total revenues	$	244,144	$	173,886	$	912,053	$	509,150
Non-hotel revenues (2)		(18)		(21)		(75)		(87)
Business interruption insurance proceeds (3)		(9,987)		—		(9,987)		—
Reimbursements to offset net losses (4)		—		(1,462)		—		(10,235)
Total Actual Hotel Revenues		234,139		172,403		901,991		498,828
Prior ownership hotel revenues (5)		—		9,629		22,637		39,015
Non-comparable hotel revenues (6)		(22,877)		(17,088)		(93,429)		(48,276)
Sold hotel revenues (7)		—		(15,884)		(3,234)		(49,389)
Comparable Portfolio Revenues	$	211,262	$	149,060	$	827,965	$	440,178


Net income	$	17,463	$	138,324	$	90,766	$	32,995
Non-hotel revenues (2)		(18)		(21)		(75)		(87)
Business interruption insurance proceeds related to owned hotels (8)		(6,663)		—		(6,663)		—
Reimbursements to offset net losses (4)		—		(1,462)		—		(10,235)
Non-hotel operating expenses, net (9)		(5,977)		(608)		(7,062)		(4,510)
Taxes assessed on commercial rents (10)		61		—		176		—
Property-level prior year property tax adjustments, net		—		—		—		379
Property-level legal fees and settlements (11)		225		21		225		770
Property-level severance (12)		974		(284)		974		4,278
Property-level hurricane-related restoration expenses (13)		306		2,612		1,920		4,233
Corporate overhead		7,936		8,203		35,246		40,269
Depreciation and amortization		32,393		32,598		126,396		128,682
Impairment losses		3,466		1,671		3,466		2,685
Interest and other (income) loss		(476)		(13)		(5,242)		343
Interest expense		11,717		7,201		32,005		30,898
Gain on sale of assets		—		(152,524)		(22,946)		(152,524)
(Gain) loss on extinguishment of debt, net		(26)		428		936		57
Income tax provision, net		485		18		359		109
Actual Hotel Adjusted EBITDAre		61,866		36,164		250,481		78,342
Prior ownership hotel Adjusted EBITDAre (5)		—		3,320		8,630		5,362
Non-comparable hotel Adjusted EBITDAre (6)		(1,749)		(2,503)		(9,245)		(5,983)
Sold hotel Adjusted EBITDAre (7)		—		(1,434)		2,172		1,966
Comparable Portfolio Adjusted EBITDAre	$	60,117	$	35,547	$	252,038	$	79,687

*Footnotes on following page 14

(1)	Comparable Portfolio Adjusted EBITDAre Margin is calculated as Comparable Portfolio Adjusted EBITDAre divided by Total Comparable Portfolio Revenues.
(2)	Non-hotel revenues include the amortization of any favorable or unfavorable contract intangibles recorded in conjunction with the Company's hotel acquisitions.
---	---
(3)	Business interruption insurance proceeds include $10.0 million in proceeds recognized in the fourth quarter and full year of 2022 related to COVID-19 disruption at 12 hotels currently owned by the Company and eight sold hotels.
---	---
(4)	Reimbursements to offset net losses for the fourth quarter and full year of 2021 include $1.5 million and $10.2 million, respectively, at the Hyatt Regency San Francisco as stipulated by the hotel's operating lease agreement.
---	---
(5)	Prior ownership hotel revenues and Adjusted EBITDAre include results for The Confidante Miami Beach and the Montage Healdsburg prior to the Company’s acquisition of the hotels in June 2022 and April 2021, respectively. The Company obtained prior ownership information from the hotels’ previous owners during the due diligence periods before acquiring the hotels. The Company performed limited reviews of the information as part of its analyses of the acquisitions. The Company determined the amount to include as pro forma depreciation expense based on the hotels’ actual depreciation expense recognized by the Company.
---	---
(6)	Non-comparable hotel revenues and Adjusted EBITDAre include results for the Montage Healdsburg and the Four Seasons Resort Napa Valley, acquired in April 2021 and December 2021, respectively.
---	---
(7)	Sold hotel revenues and Adjusted EBITDAre for the full year of 2022 and 2021 include results for the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile, sold in March 2022, and the Hyatt Centric Chicago Magnificent Mile, sold in February 2022. Sold hotel revenues and Adjusted EBITDAre for the fourth quarter and full year of 2021 also include results for the Embassy Suites La Jolla and the Renaissance Westchester, sold in December 2021 and October 2021, respectively.
---	---
(8)	Business interruption insurance proceeds related to owned hotels include $6.7 million in proceeds recognized in the fourth quarter and full year of 2022 related to COVID-19 disruption at 12 hotels currently owned by the Company.
---	---
(9)	Non-hotel operating expenses, net for both the fourth quarter and full year of 2022 include $3.3 million in business interruption insurance proceeds related to COVID-19 at eight sold hotels. Non-hotel operating expenses, net for the fourth quarters and full years of 2022 and 2021 include the following: the amortization of hotel real estate-related right-of-use assets and obligations; the amortization of a favorable management agreement contract intangible prior to the hotel’s sale in March 2022; prior year property tax credits, net related to sold hotels; and finance lease obligation interest – cash ground rent prior to the hotel’s sale in February 2022.
---	---
(10)	Taxes assessed on commercial rents for the fourth quarter and full year of 2022 include $0.1 million and $0.2 million, respectively, at the Hyatt Regency San Francisco.
---	---
(11)	Property-level legal fees and settlements for both the fourth quarter and full year of 2022 include $0.2 million in legal fees related to business interruption insurance proceeds recognized in the fourth quarter and full year of 2022. Property-level legal fees and settlements for the fourth quarter and full year of 2021 include $21,000 and $0.7 million, respectively, related to lawsuit settlement costs at the Hilton San Diego Bayfront. Property-level legal fees and settlements for the full year of 2021 also include $0.1 million in legal fees for a hotel the Company sold in 2021.
---	---
(12)	Property-level severance for the fourth quarter and full year of 2022 includes a total of $1.0 million, comprising $0.7 million at the Hyatt Regency San Francisco and $0.2 million at the Four Seasons Resort Napa Valley. Property-level severance for both the fourth quarter and full year of 2021 includes a net credit true-up of $0.3 million in COVID-19-related severance at several of the Company's hotels. Property-level severance for the full year of 2021 also includes $4.6 million for a hotel the Company sold in 2021.
---	---
(13)	Property-level hurricane-related restoration expenses for the fourth quarter and full year of 2022 include a total of $0.3 million incurred at the Oceans Edge Resort & Marina and the Renaissance Orlando at SeaWorld®. Property-level hurricane-related restoration expenses for the full year of 2022 also include a total of $1.6 million incurred at the Hilton New Orleans St. Charles and the JW Marriott New Orleans. Property-level hurricane-related restoration expenses for the fourth quarter and full year of 2021 include totals of $2.6 million and $4.2 million, respectively, incurred at the Hilton New Orleans St. Charles and the JW Marriott New Orleans.
---	---

Exhibit 99.2


<br><br><br><br>Supplemental Financial Information<br><br>For the quarter and year ended December 31, 2022<br><br>February 22, 2023<br><br>

Supplemental Financial Information February 22, 2023

Table of Contents


Corporate Profile And Disclosures Regarding Non-GAAP Financial Measures								2
Comparable Corporate Financial Information								7
Capitalization								21
Property-Level Data And Operating Statistics								24
Property-Level Revenues, Adjusted EBITDAre & Adjusted EBITDAre Margins								30

Supplemental Financial Information February 22, 2023

CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES


CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES			Page 2

Supplemental Financial Information February 22, 2023

About Sunstone

Sunstone Hotel Investors, Inc. (the “Company,” “we,” and “our”) (NYSE: SHO) is a lodging real estate investment trust (“REIT”) that as of February 22, 2023 owns 15 hotels comprised of 7,735 rooms, the majority of which are operated under nationally recognized brands. Sunstone’s strategy is to create long-term stakeholder value through the acquisition, active ownership and disposition of hotels considered to be Long-Term Relevant Real Estate®.

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.

Corporate Headquarters 15 Enterprise, Suite 200 Aliso Viejo, CA 92656 (949) 330-4000

Company Contacts Bryan Giglia Chief Executive Officer (949) 382-3036

Aaron Reyes Chief Financial Officer (949) 382-3018


CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES			Page 3

Supplemental Financial Information February 22, 2023

Non-GAAP Financial Measures


CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES			Page 4

Supplemental Financial Information February 22, 2023

●	Amortization of deferred stock compensation: we 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.
●	Amortization of contract intangibles: we exclude the noncash amortization of any favorable or unfavorable contract intangibles recorded in conjunction with our hotel acquisitions. We exclude the noncash amortization of contract intangibles because it is based on historical cost accounting and is of lesser significance in evaluating our actual performance for the current period.
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●	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.
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●	Acquisition costs: under GAAP, costs associated with 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.
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●	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.
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●	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; the write-off of development costs associated with abandoned projects; property-level restructuring, severance and management transition costs; debt resolution costs; lease terminations; property insurance restoration proceeds or uninsured losses; and other nonrecurring identified adjustments.
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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 (prior to our acquisition of the noncontrolling partner’s ownership interest in the partnership in June 2022). We also exclude the amortization of our right-of-use assets and related 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 expense recorded on the building lease at the Hyatt Centric Chicago Magnificent Mile (prior to the hotel’s sale in February 2022). We determined that the building lease was a finance lease, and, therefore, we included a portion of the lease payment each month in interest expense. We adjust EBITDAre for the finance lease in order to more accurately reflect the actual rent due to the hotel’s lessor in the current period, as well as the operating performance of the hotel. 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.


CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES			Page 5

Supplemental Financial Information February 22, 2023

Reconciliations of net income (loss) 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. Beginning with the quarter ended March 31, 2022, the Company’s calculation of Adjusted FFO attributable to common stockholders excludes the noncash amortization expense associated with deferred stock compensation. Adjusted FFO attributable to common stockholders for the prior periods presented in this supplemental package have also been adjusted to exclude this expense.

Both the Total Portfolio and the Comparable Corporate Portfolio consist of all 15 hotels owned by the Company as of December 31, 2022, and include both prior ownership results and the Company’s ownership results for The Confidante Miami Beach and the Montage Healdsburg, acquired by the Company in June 2022 and April 2021, respectively. The Company obtained prior ownership information from the previous owners of The Confidante Miami Beach and the Montage Healdsburg during the due diligence periods before acquiring the hotels. The Company performed limited reviews of the information as part of its analyses of the acquisitions.

The Comparable Portfolio includes the same 12 hotels owned by the Company during the fourth quarters and full years of 2022, 2021 and 2019 plus both prior ownership results and the Company’s ownership results for The Confidante Miami Beach, acquired by the Company in June 2022.


CORPORATE PROFILE AND DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES			Page 6

Supplemental Financial Information February 22, 2023

COMPARABLE CORPORATE FINANCIAL INFORMATION


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 7

Supplemental Financial Information February 22, 2023

Comparable Consolidated Statements of Operations

Q4 2022 – Q1 2022, FY 2022


	Quarter Ended (1)								Year Ended (1)
(Unaudited and in thousands, except per share data)	December 31,		September 30,		June 30,		March 31,		December 31,
	2022		2022		2022		2022		2022
Revenues
Room	$	147,277	$	158,400	$	167,194	$	115,515	$	588,386
Food and beverage		65,847		63,476		74,307		42,911		246,541
Other operating		31,020		22,438		18,711		24,360		96,529
Total revenues		244,144		244,314		260,212		182,786		931,456

Operating Expenses
Room		38,691		38,791		38,626		30,425		146,533
Food and beverage		48,187		47,181		48,304		34,233		177,905
Other expenses		84,308		88,746		87,269		75,023		335,346
Corporate overhead		7,936		7,879		8,717		10,714		35,246
Depreciation and amortization		32,393		31,750		31,720		31,711		127,574
Impairment loss		3,466		—		—		—		3,466
Total operating expenses		214,981		214,347		214,636		182,106		826,070

Interest and other income		476		270		116		4,380		5,242
Interest expense		(11,717)		(9,269)		(5,938)		(4,964)		(31,888)
Gain (loss) on extinguishment of debt, net		26		(770)		21		(213)		(936)
Income (loss) before income taxes		17,948		20,198		39,775		(117)		77,804
Income tax (provision) benefit, net		(485)		290		(28)		(136)		(359)
Net income (loss)	$	17,463	$	20,488	$	39,747	$	(253)	$	77,445

Total Portfolio Hotel Adjusted EBITDAre (2)	$	61,866	$	69,422	$	87,308	$	42,687	$	261,283

Comparable Adjusted EBITDAre (3)	$	68,777	$	63,848	$	80,031	$	37,103	$	249,759

Comparable Adjusted FFO attributable to common stockholders (4)	$	53,733	$	51,264	$	69,051	$	26,183	$	200,231

Comparable Adjusted FFO attributable to common stockholders per diluted share (4)	$	0.26	$	0.25	$	0.33	$	0.13	$	0.96

*Footnotes on page 11


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 8

Supplemental Financial Information February 22, 2023

Comparable Consolidated Statements of Operations

Q4 2021 – Q1 2021, FY 2021


	Quarter Ended (1)								Year Ended (1)
(Unaudited and in thousands, except per share data)	December 31,		September 30,		June 30,		March 31,		December 31,
	2021		2021		2021		2021		2021
Revenues
Room	$	109,660	$	105,973	$	83,428	$	38,168	$	337,229
Food and beverage		37,133		27,739		17,551		7,779		90,202
Other operating		20,838		20,904		17,406		12,197		71,345
Total revenues		167,631		154,616		118,385		58,144		498,776

Operating Expenses
Room		29,615		28,216		22,042		12,535		92,408
Food and beverage		31,334		25,975		17,892		9,082		84,283
Other expenses		69,235		65,033		52,091		41,246		227,605
Corporate overhead		8,203		15,422		9,467		7,177		40,269
Depreciation and amortization		30,766		30,196		30,952		31,041		122,955
Impairment losses		1,671		1,014		—		—		2,685
Total operating expenses		170,824		165,856		132,444		101,081		570,205

Interest and other income (loss)		13		2		21		(379)		(343)
Interest expense		(6,440)		(7,019)		(7,100)		(6,693)		(27,252)
(Loss) gain on extinguishment of debt, net		(292)		61		88		222		79
Loss before income taxes		(9,912)		(18,196)		(21,050)		(49,787)		(98,945)
Income tax provision, net		(18)		(25)		(23)		(43)		(109)
Net loss	$	(9,930)	$	(18,221)	$	(21,073)	$	(49,830)	$	(99,054)

Total Portfolio Hotel Adjusted EBITDAre (2)	$	38,050	$	35,766	$	21,868	$	(10,014)	$	85,670

Comparable Adjusted EBITDAre (3)	$	34,287	$	33,090	$	20,221	$	(10,616)	$	76,982

Comparable Adjusted FFO attributable to common stockholders (4)	$	23,074	$	21,876	$	8,701	$	(21,618)	$	32,033

Comparable Adjusted FFO attributable to common stockholders per diluted share (4)	$	0.11	$	0.11	$	0.04	$	(0.10)	$	0.15

*Footnotes on page 11


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 9

Supplemental Financial Information February 22, 2023

Comparable Consolidated Statements of Operations

Q4 2019 – Q1 2019, FY 2019


	Quarter Ended (1)								Year Ended (1)
(Unaudited and in thousands, except per share data)	December 31,		September 30,		June 30,		March 31,		December 31,
	2019		2019		2019		2019		2019
Revenues
Room	$	140,388	$	145,477	$	154,320	$	140,689	$	580,874
Food and beverage		59,112		53,525		67,089		63,338		243,064
Other operating		17,415		17,523		16,271		15,124		66,333
Total revenues		216,915		216,525		237,680		219,151		890,271

Operating Expenses
Room		36,422		37,604		37,604		35,979		147,609
Food and beverage		40,345		38,763		42,286		41,704		163,098
Other expenses		73,100		71,415		73,549		73,328		291,392
Corporate overhead		7,275		7,395		8,078		7,516		30,264
Depreciation and amortization		28,231		28,315		27,684		27,541		111,771
Total operating expenses		185,373		183,492		189,201		186,068		744,134

Interest and other income		3,060		3,762		4,811		4,924		16,557
Interest expense		(6,880)		(9,074)		(11,634)		(10,149)		(37,737)
Income before income taxes		27,722		27,721		41,656		27,858		124,957
Income tax (provision) benefit, net		(1,034)		749		(2,676)		3,112		151
Net income	$	26,688	$	28,470	$	38,980	$	30,970	$	125,108

Comparable Portfolio Hotel Adjusted EBITDAre (5)	$	67,146	$	68,778	$	84,305	$	68,415	$	288,644

Comparable Adjusted EBITDAre (3)	$	64,653	$	66,936	$	82,652	$	67,767	$	282,008

Comparable Adjusted FFO attributable to common stockholders (4)	$	53,324	$	56,618	$	71,082	$	55,805	$	236,829

Comparable Adjusted FFO attributable to common stockholders per diluted share (4)	$	0.26	$	0.27	$	0.34	$	0.27	$	1.15

*Footnotes on page 11


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 10

Supplemental Financial Information February 22, 2023

Comparable Consolidated Statements of Operations

Footnotes

(1)	Excludes results for the Renaissance Westchester, the Embassy Suites La Jolla and the Hyatt Centric Chicago Magnificent Mile due to their sales in October 2021, December 2021 and February 2022, respectively, along with the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile due to their sale in March 2022. Includes prior ownership results for The Confidante Miami Beach and the Montage Healdsburg acquired by the Company in June 2022 and April 2021, respectively, adjusted for the Company's pro forma depreciation expense. Comparable Consolidated Statements of Operations for each of the quarters and the year ended December 31, 2019 also excludes results for the Courtyard by Marriott Los Angeles, the Renaissance Harborplace and the Renaissance Los Angeles Airport due to their sales in October 2019, July 2020 and December 2020, respectively, as well as results for the Hilton Times Square due to the assignment-in-lieu agreement executed in December 2020 between the Company and the hotel’s mortgage holder which transferred the Company’s leasehold interest in the hotel to the mortgage holder, and the elimination of interest expense on the mortgage loan secured by the Renaissance Washington DC due to its repayment in December 2020.
(2)	Total Portfolio Hotel Adjusted EBITDAre reconciliations for the fourth quarters and full years of 2022, 2021 and 2019 can be found later in this presentation. Additional details can be found in our earnings release, furnished in Exhibit 99.1 to our 8-K filed on February 22, 2023.
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(3)	Comparable Adjusted EBITDAre reconciliations for each of the quarters and years included in this presentation can be found in the following pages and reflect the adjustments noted in Footnote 1 above, along with the elimination of noncontrolling interest due to the Company's acquisition of the outside 25% ownership interest in the joint venture that owned the Hilton San Diego Bayfront in June 2022.
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(4)	Comparable Adjusted FFO attributable to common stockholders and Comparable Adjusted FFO attributable to common stockholders per diluted share reconciliations for each of the quarters and years included in this presentation can be found in the following pages and reflect the adjustments noted in Footnotes 1 and 3 above, along with repurchases totaling 3,783,936 shares of common stock in the second, third and fourth quarters of 2019, 9,770,081 shares of common stock in the first quarter of 2020 and 10,245,324 shares of common stock in the first, second, third and fourth quarters of 2022, partially offset by issuances totaling 2,913,682 shares of common stock in the second quarter of 2021.
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(5)	Comparable Portfolio Hotel Adjusted EBITDAre reconciliations for the fourth quarter and full year of 2019 can be found later in this presentation.
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COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 11

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre

Q4 2022 – Q4 2022, FY 2022


	Quarter Ended								Year Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(In thousands)	2022		2022		2022		2022		2022

Net income	$	17,463	$	20,488	$	37,692	$	15,123	$	90,766
Operations held for investment:
Depreciation and amortization		32,393		31,750		30,893		31,360		126,396
Interest expense		11,717		9,269		5,938		5,081		32,005
Income tax provision (benefit), net		485		(290)		28		136		359
Gain on sale of assets		—		—		—		(22,946)		(22,946)
Impairment loss - depreciable assets		1,379		—		—		—		1,379
EBITDAre		63,437		61,217		74,551		28,754		227,959

Operations held for investment:
Amortization of deferred stock compensation		2,230		2,230		2,853		3,578		10,891
Amortization of right-of-use assets and obligations		(359)		(350)		(354)		(346)		(1,409)
Amortization of contract intangibles, net		(18)		(19)		(18)		(6)		(61)
Finance lease obligation interest - cash ground rent		—		—		—		(117)		(117)
(Gain) loss on extinguishment of debt, net		(26)		770		(21)		213		936
Hurricane-related losses (insurance restoration proceeds), net		—		—		138		(2,893)		(2,755)
Property-level severance		729		—		—		—		729
Costs associated with financing no longer pursued		697		—		—		—		697
Impairment loss – right-of-use asset		2,087		—		—		—		2,087
Noncontrolling interest:
Income from consolidated joint venture attributable to noncontrolling interest		—		—		(2,343)		(1,134)		(3,477)
Depreciation and amortization		—		—		(666)		(790)		(1,456)
Interest expense		—		—		(206)		(168)		(374)
Amortization of right-of-use asset and obligation		—		—		60		72		132
Adjustments to EBITDAre, net		5,340		2,631		(557)		(1,591)		5,823

Adjusted EBITDAre, excluding noncontrolling interest		68,777		63,848		73,994		27,163		233,782
Sold hotel Adjusted EBITDAre (1)		—		—		—		2,172		2,172
Acquisition hotel Adjusted EBITDAre (2)		—		—		6,037		7,768		13,805

Comparable Adjusted EBITDAre	$	68,777	$	63,848	$	80,031	$	37,103	$	249,759

*Footnotes on page 14


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 12

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income to FFO and Adjusted FFO Attributable to Common Stockholders

Q4 2022 – Q1 2022, FY 2022


	Quarter Ended								Year Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(In thousands, except per share data)	2022		2022		2022		2022		2022

Net income	$	17,463	$	20,488	$	37,692	$	15,123	$	90,766
Preferred stock dividends		(3,350)		(3,351)		(3,773)		(3,773)		(14,247)
Operations held for investment:
Real estate depreciation and amortization		32,023		31,313		30,456		31,027		124,819
Gain on sale of assets		—		—		—		(22,946)		(22,946)
Noncontrolling interest:
Income from consolidated joint venture attributable to noncontrolling interest		—		—		(2,343)		(1,134)		(3,477)
Real estate depreciation and amortization		—		—		(666)		(790)		(1,456)
FFO attributable to common stockholders		46,136		48,450		61,366		17,507		173,459

Operations held for investment:
Amortization of deferred stock compensation		2,230		2,230		2,853		3,578		10,891
Real estate amortization of right-of-use assets and obligations		(287)		(288)		(294)		(286)		(1,155)
Amortization of contract intangibles, net		78		141		143		60		422
Noncash interest on derivatives, net		710		(39)		(1,023)		(1,842)		(2,194)
(Gain) loss on extinguishment of debt, net		(26)		770		(21)		213		936
Hurricane-related losses (insurance restoration proceeds), net		—		—		138		(2,893)		(2,755)
Property-level severance		729		—		—		—		729
Costs associated with financing no longer pursued		697		—		—		—		697
Impairment losses – right-of-use and depreciable assets		3,466		—		—		—		3,466
Noncontrolling interest:
Real estate amortization of right-of-use asset and obligation		—		—		60		72		132
Noncash interest on derivatives, net		—		—		(2)		2		—
Adjustments to FFO attributable to common stockholders, net		7,597		2,814		1,854		(1,096)		11,169

Adjusted FFO attributable to common stockholders		53,733		51,264		63,220		16,411		184,628
Sold hotel Adjusted FFO (1)		—		—		—		2,172		2,172
Acquisition hotel Adjusted FFO (2)		—		—		5,831		7,600		13,431

Comparable Adjusted FFO attributable to common stockholders	$	53,733	$	51,264	$	69,051	$	26,183	$	200,231

Comparable Adjusted FFO attributable to common stockholders per diluted share	$	0.26	$	0.25	$	0.33	$	0.13	$	0.96

Basic weighted average shares outstanding		209,097		211,010		213,183		217,271		212,613
Shares associated with unvested restricted stock awards		449		594		354		305		358
Diluted weighted average shares outstanding		209,546		211,604		213,537		217,576		212,971
Equity transactions (3)		(1,066)		(2,979)		(5,168)		(9,504)		(4,651)
Comparable diluted weighted average shares outstanding		208,480		208,625		208,369		208,072		208,320

*Footnotes on page 14


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 13

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income to EBITDAre**, Adjusted EBITDAre,**

FFO and Adjusted FFO Attributable to Common Stockholders

Q4 2022 – Q1 2022, FY 2022 Footnotes

(1)	Sold Hotel Adjusted EBITDAre and Adjusted FFO include results for the Hyatt Centric Chicago Magnificent Mile sold in February 2022, along with the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile sold in March 2022.
(2)	Acquisition hotel Adjusted EBITDAre and Adjusted FFO include prior ownership results for The Confidante Miami Beach acquired by the Company in June 2022, along with the elimination of noncontrolling interest due to the Company's acquisition of the outside 25% ownership interest in the joint venture that owned the Hilton San Diego Bayfront in June 2022.
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(3)	Equity Transactions represent repurchases totaling 3,879,025, 3,235,958, 880,577 and 2,249,764 shares of common stock in the first, second, third and fourth quarters of 2022, respectively.
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COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 14

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre ****

Q4 2021 – Q1 2021, FY 2021


	Quarter Ended								Year Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(In thousands)	2021		2021		2021		2021		2021

Net income (loss)	$	138,324	$	(22,124)	$	(27,918)	$	(55,287)	$	32,995
Operations held for investment:
Depreciation and amortization		32,598		32,585		32,729		30,770		128,682
Interest expense		7,201		7,983		8,065		7,649		30,898
Income tax provision, net		18		25		23		43		109
(Gain) loss on sale of assets, net		(152,524)		12		—		70		(152,442)
Impairment losses		1,671		1,014		—		—		2,685
EBITDAre		27,288		19,495		12,899		(16,755)		42,927

Operations held for investment:
Amortization of deferred stock compensation		2,212		3,165		4,659		2,752		12,788
Amortization of right-of-use assets and obligations		(340)		(335)		(338)		(331)		(1,344)
Finance lease obligation interest - cash ground rent		(351)		(351)		(351)		(351)		(1,404)
Property-level severance		(284)		4,562		—		—		4,278
Loss (gain) on extinguishment of debt, net		428		(61)		(88)		(222)		57
Prior year property tax adjustments, net		—		605		(1,162)		(827)		(1,384)
Lawsuit settlement cost		21		691		—		—		712
CEO transition costs		815		7,976		—		—		8,791
Hurricane-related losses		2,612		1,621		—		—		4,233
Noncontrolling interest:
(Income) loss from consolidated joint venture attributable to noncontrolling interest		(335)		(933)		596		1,975		1,303
Depreciation and amortization		(791)		(791)		(806)		(810)		(3,198)
Interest expense		(160)		(181)		(159)		(161)		(661)
Amortization of right-of-use asset and obligation		73		72		73		72		290
Lawsuit settlement cost		(5)		(173)		—		—		(178)
Adjustments to EBITDAre, net		3,895		15,867		2,424		2,097		24,283

Adjusted EBITDAre, excluding noncontrolling interest		31,183		35,362		15,323		(14,658)		67,210
Sold hotel Adjusted EBITDAre (1)		(1,434)		(4,742)		2,391		5,751		1,966
Acquisition hotel Adjusted EBITDAre (2)		4,538		2,470		2,507		(1,709)		7,806

Comparable Adjusted EBITDAre	$	34,287	$	33,090	$	20,221	$	(10,616)	$	76,982

*Footnotes on page 17


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 15

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income (Loss) to FFO and Adjusted FFO Attributable to Common Stockholders

Q4 2021 – Q1 2021, FY 2021


	Quarter Ended								Year Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(In thousands, except per share data)	2021		2021		2021		2021		2021

Net income (loss)	$	138,324	$	(22,124)	$	(27,918)	$	(55,287)	$	32,995
Preferred stock dividends and redemption charges		(3,349)		(6,287)		(7,795)		(3,207)		(20,638)
Operations held for investment:
Real estate depreciation and amortization		31,976		31,959		32,104		30,143		126,182
(Gain) loss on sale of assets, net		(152,524)		12		—		70		(152,442)
Impairment losses		1,671		1,014		—		—		2,685
Noncontrolling interest:
(Income) loss from consolidated joint venture attributable to noncontrolling interest		(335)		(933)		596		1,975		1,303
Real estate depreciation and amortization		(791)		(791)		(806)		(810)		(3,198)
FFO attributable to common stockholders		14,972		2,850		(3,819)		(27,116)		(13,113)

Operations held for investment:
Amortization of deferred stock compensation		2,212		3,165		4,659		2,752		12,788
Real estate amortization of right-of-use assets and obligations		87		87		77		85		336
Noncash interest on derivatives, net		(1,211)		(616)		(709)		(869)		(3,405)
Property-level severance		(284)		4,562		—		—		4,278
Loss (gain) on extinguishment of debt, net		428		(61)		(88)		(222)		57
Prior year property tax adjustments, net		—		605		(1,162)		(827)		(1,384)
Lawsuit settlement cost		21		691		—		—		712
Preferred stock redemption charges		—		2,624		4,016		—		6,640
CEO transition costs		815		7,976		—		—		8,791
Hurricane-related losses		2,612		1,621		—		—		4,233
Noncontrolling interest:
Real estate amortization of right-of-use asset and obligation		73		72		73		72		290
Noncash interest on derivatives, net		1		(20)		—		—		(19)
Lawsuit settlement cost		(5)		(173)		—		—		(178)
Adjustments to FFO attributable to common stockholders, net		4,749		20,533		6,866		991		33,139

Adjusted FFO attributable to common stockholders		19,721		23,383		3,047		(26,125)		20,026
Sold hotel Adjusted FFO (1)		(1,024)		(4,129)		3,005		6,356		4,208
Acquisition hotel Adjusted FFO (2)		4,377		2,309		2,348		(1,870)		7,164
Equity transactions (3)		—		313		301		21		635

Comparable Adjusted FFO attributable to common stockholders	$	23,074	$	21,876	$	8,701	$	(21,618)	$	32,033

Comparable Adjusted FFO attributable to common stockholders per diluted share	$	0.11	$	0.11	$	0.04	$	(0.10)	$	0.15

Basic weighted average shares outstanding		217,870		217,709		215,113		214,438		216,296
Shares associated with unvested restricted stock awards		445		296		352		210		326
Diluted weighted average shares outstanding		218,315		218,005		215,465		214,648		216,622
Equity transactions (3)		(10,245)		(10,245)		(7,775)		(7,332)		(8,911)
Comparable diluted weighted average shares outstanding		208,070		207,760		207,690		207,316		207,711

*Footnotes on page 17


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 16

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income (Loss) to EBITDAre**, Adjusted EBITDAre,**

FFO and Adjusted FFO Attributable to Common Stockholders

Q4 2021 – Q1 2021, FY 2021 Footnotes

(1)	Sold hotel Adjusted EBITDAre and Adjusted FFO include results for the Renaissance Westchester, the Embassy Suites La Jolla and the Hyatt Centric Chicago Magnificent Mile sold in October 2021, December 2021 and February 2022, respectively, along with the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile sold in March 2022.
(2)	Acquisition hotel Adjusted EBITDAre and Adjusted FFO include prior ownership results for The Confidante Miami Beach and the Montage Healdsburg acquired by the Company in June 2022 and April 2021, respectively, along with the elimination of noncontrolling interest due to the Company's acquisition of the outside 25% ownership interest in the joint venture that owned the Hilton San Diego Bayfront in June 2022.
---	---
(3)	Equity Transactions represent the reduction in preferred stock dividends due to the redemptions of the 6.95% Series E and 6.45% Series F Cumulative Redeemable Preferred Stocks in June 2021 and August 2021, respectively, offset by the issuances of the 6.125% Series H and 5.70% Series I Cumulative Redeemable Preferred Stocks in May 2021 and July 2021, respectively. It also includes issuances totaling 2,913,682 shares of common stock in the second quarter of 2021 and repurchases totaling 10,245,324 shares of common stock in the first, second, third and fourth quarters of 2022.
---	---


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 17

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre

Q4 2019 – Q1 2019, FY 2019


	Quarter Ended								Year Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(In thousands)	2019		2019		2019		2019		2019

Net income	$	45,414	$	33,545	$	45,918	$	17,916	$	142,793
Operations held for investment:
Depreciation and amortization		37,264		37,573		36,524		36,387		147,748
Interest expense		10,822		13,259		15,816		14,326		54,223
Income tax provision (benefit), net		1,034		(749)		2,676		(3,112)		(151)
Gain on sale of assets		(42,935)		—		—		—		(42,935)
Impairment loss		24,713		—		—		—		24,713
EBITDAre		76,312		83,628		100,934		65,517		326,391

Operations held for investment:
Amortization of deferred stock compensation		2,145		2,146		2,900		2,122		9,313
Amortization of right-of-use assets and obligations		(259)		(253)		(251)		(19)		(782)
Finance lease obligation interest - cash ground rent		(407)		(589)		(590)		(589)		(2,175)
Prior year property tax adjustments, net		(121)		(9)		109		189		168
Prior owner contingency funding		—		—		(900)		—		(900)
Noncontrolling interest:
Income from consolidated joint venture attributable to noncontrolling interest		(998)		(2,508)		(1,955)		(1,599)		(7,060)
Depreciation and amortization		(803)		(793)		(640)		(639)		(2,875)
Interest expense		(476)		(532)		(558)		(560)		(2,126)
Amortization of right-of-use asset and obligation		73		72		73		72		290
Adjustments to EBITDAre, net		(846)		(2,466)		(1,812)		(1,023)		(6,147)

Adjusted EBITDAre, excluding noncontrolling interest		75,466		81,162		99,122		64,494		320,244
Sold/Disposed hotel Adjusted EBITDAre (1)		(15,066)		(17,992)		(21,581)		(3,428)		(58,067)
Acquisition hotel Adjusted EBITDAre (2)		4,253		3,766		5,111		6,701		19,831

Comparable Adjusted EBITDAre	$	64,653	$	66,936	$	82,652	$	67,767	$	282,008

*Footnotes on Page 20


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 18

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income to FFO and Adjusted FFO Attributable to Common Stockholders

Q4 2019 – Q1 2019, FY 2019


	Quarter Ended								Year Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
(In thousands, except per share data)	2019		2019		2019		2019		2019

Net income	$	45,414	$	33,545	$	45,918	$	17,916	$	142,793
Preferred stock dividends		(3,208)		(3,208)		(3,207)		(3,207)		(12,830)
Operations held for investment:
Real estate depreciation and amortization		36,639		36,951		35,900		35,770		145,260
Gain on sale of assets		(42,935)		—		—		—		(42,935)
Impairment loss		24,713		—		—		—		24,713
Noncontrolling interest:
Income from consolidated joint venture attributable to noncontrolling interest		(998)		(2,508)		(1,955)		(1,599)		(7,060)
Real estate depreciation and amortization		(803)		(793)		(640)		(639)		(2,875)
FFO attributable to common stockholders		58,822		63,987		76,016		48,241		247,066

Operations held for investment:
Amortization of deferred stock compensation		2,145		2,146		2,900		2,122		9,313
Real estate amortization of right-of-use assets and obligations		147		146		146		151		590
Noncash interest on derivatives and finance lease obligations, net		(857)		1,155		3,634		2,119		6,051
Prior year property tax adjustments, net		(121)		(9)		109		189		168
Prior owner contingency funding		—		—		(900)		—		(900)
Noncash income tax provision (benefit), net		934		390		2,648		(3,284)		688
Noncontrolling interest:
Real estate amortization of right-of-use asset and obligation		73		72		73		72		290
Adjustments to FFO attributable to common stockholders, net		2,321		3,900		8,610		1,369		16,200

Adjusted FFO attributable to common stockholders		61,143		67,887		84,626		49,610		263,266
Sold/Disposed hotel Adjusted FFO (1)		(13,225)		(16,144)		(19,747)		(1,608)		(50,724)
Acquisition hotel Adjusted FFO (2)		3,704		3,162		4,480		6,069		17,415
Debt and equity transactions (3)		1,702		1,713		1,723		1,734		6,872

Comparable Adjusted FFO attributable to common stockholders	$	53,324	$	56,618	$	71,082	$	55,805	$	236,829

Comparable Adjusted FFO attributable to common stockholders per diluted share	$	0.26	$	0.27	$	0.34	$	0.27	$	1.15

Basic weighted average shares outstanding		223,638		224,530		227,389		227,219		225,681
Shares associated with unvested restricted stock awards		448		253		145		260		276
Diluted weighted average shares outstanding		224,086		224,783		227,534		227,479		225,957
Equity transactions (3)		(17,103)		(17,994)		(20,871)		(20,886)		(19,200)
Comparable diluted weighted average shares outstanding		206,983		206,789		206,663		206,593		206,757

*Footnotes on Page 20


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 19

Supplemental Financial Information February 22, 2023

Comparable Reconciliation of Net Income to EBITDAre**, Adjusted EBITDAre,**

FFO and Adjusted FFO Attributable to Common Stockholders

Q4 2019 – Q1 2019, FY 2019 Footnotes

(1)	Sold/Disposed hotel Adjusted EBITDAre and Adjusted FFO include results for the Courtyard by Marriott Los Angeles, the Renaissance Harborplace, the Renaissance Los Angeles Airport, the Renaissance Westchester, the Embassy Suites La Jolla and the Hyatt Centric Chicago Magnificent Mile sold in October 2019, July 2020, December 2020, October 2021, December 2021 and February 2022, respectively, along with the Embassy Suites Chicago and Hilton Garden Inn Chicago Downtown/Magnificent Mile sold in March 2022. In addition, includes results for the Hilton Times Square due to the assignment-in-lieu agreement executed in December 2020 between the Company and the hotel's mortgage holder, which transferred the Company's leasehold interest in the hotel to the mortgage holder.
(2)	Acquisition hotel Adjusted EBITDAre and Adjusted FFO include prior ownership results for The Confidante Miami Beach acquired by the Company in June 2022, along with the elimination of noncontrolling interest due to the Company's acquisition of the outside 25% ownership interest in the joint venture that owned the Hilton San Diego Bayfront in June 2022.
---	---
(3)	Debt and Equity Transactions represent the reduction in interest expense on the mortgage loan secured by the Renaissance Washington DC due to its repayment in December 2020, along with the reduction in preferred stock dividends due to the redemptions of the 6.95% Series E and 6.45% Series F Cumulative Redeemable Preferred Stocks in June 2021 and August 2021, respectively, offset by the issuances of the 6.125% Series H and 5.70% Series I Cumulative Redeemable Preferred Stocks in May 2021 and July 2021, respectively. It also includes repurchases totaling 3,783,936 shares of common stock in the second, third and fourth quarters of 2019, 9,770,081 shares of common stock in the first quarter of 2020 and 10,245,324 shares of common stock in the first, second, third and fourth quarters of 2022, partially offset by issuances totaling 2,913,682 shares of common stock in the second quarter of 2021.
---	---


COMPARABLE CORPORATE FINANCIAL INFORMATION			Page 20


	Supplemental Financial Information February 22, 2023

CAPITALIZATION


CAPITALIZATION			Page 21

Supplemental Financial Information February 22, 2023

Comparative Capitalization Q4 2022 – Q4 2021


	December 31,			September 30,			June 30,			March 31,			December 31,
(In thousands, except per share data)	2022		****	2022		****	2022		****	2022		****	2021

Common Share Price & Dividends
At the end of the quarter	$	9.66		$	9.42		$	9.92		$	11.78		$	11.73
High during quarter ended	$	11.19		$	12.22		$	12.68		$	12.07		$	13.23
Low during quarter ended	$	9.42		$	9.42		$	9.64		$	10.15		$	10.48
Common dividends per share	$	0.05		$	0.05		$	—		$	—		$	—

Common Shares & Units
Common shares outstanding		209,320			211,570			212,451			215,668			219,334
Units outstanding		—			—			—			—			—
Total common shares and units outstanding		209,320			211,570			212,451			215,668			219,334

Capitalization ****
Market value of common equity	$	2,022,036		$	1,992,991		$	2,107,512		$	2,540,568		$	2,572,785
Liquidation value of preferred equity - Series G		66,250			66,250			66,250			66,250			66,250
Liquidation value of preferred equity - Series H		115,000			115,000			115,000			115,000			115,000
Liquidation value of preferred equity - Series I		100,000			100,000			100,000			100,000			100,000
Consolidated debt		816,136			816,647			805,443			575,934			611,437
Consolidated total capitalization	$	3,119,422		$	3,090,888		$	3,194,205		$	3,397,752		$	3,465,472

Consolidated debt to consolidated total capitalization		26.2	%		26.4	%		25.2	%		17.0	%		17.6	%
Consolidated debt and preferred equity to consolidated total capitalization		35.2	%		35.5	%		34.0	%		25.2	%		25.8	%


CAPITALIZATION			Page 22

Supplemental Financial Information February 22, 2023

Debt Summary Schedule


(In thousands)				Interest Rate /		Maturity		December 31, 2022
Debt	****	Collateral	****	Spread	****	Date		Balance

Secured Mortgage Debt (1)		Hilton San Diego Bayfront		5.57%		12/09/2023	$	220,000
Secured Mortgage Debt		JW Marriott New Orleans		4.15%		12/11/2024		76,136
Series A Senior Notes (2)		Unsecured		4.69%		01/10/2026		65,000
Term Loan 1 (3)		Unsecured		5.82%		07/25/2027		175,000
Series B Senior Notes (2)		Unsecured		4.79%		01/10/2028		105,000
Term Loan 2 (3)		Unsecured		4.27%		01/25/2028		175,000

TOTAL CONSOLIDATED DEBT							$	816,136

Preferred Stock
Series G cumulative redeemable preferred (4)				2.268%		perpetual	$	66,250
Series H cumulative redeemable preferred				6.125%		perpetual		115,000
Series I cumulative redeemable preferred				5.70%		perpetual		100,000
Total Preferred Stock							$	281,250

Debt Statistics
% Fixed Rate Debt								42.4	%
% Floating Rate Debt								57.6	%
Average Interest Rate								5.04	%
Weighted Average Maturity of Debt								3.4 years

(1)	In December 2022, the Company exercised its final option to extend the maturity of the mortgage debt secured by the Hilton San Diego Bayfront from December 2022 to December 2023. In conjunction with this extension, the one-month LIBOR spread increased 25 basis points from 105 basis points to 130 basis points.
(2)	The 2020 and 2021 amendments to the Company's Senior Notes increased the annual interest rates on the Senior Notes by 1.25% through September 30, 2022. From October 1, 2022 to December 31, 2022, the increase in the annual rates decreased to 1.00%, and in January 2023, the increase in the annual interest rates on the Senior Notes was eliminated. The interest rates presented reflect the terms of the Senior Notes amendments as of January 1, 2023.
---	---
(3)	Pursuant to the Second Amended Credit Agreement, interest rates on the term loans are calculated on a leverage-based pricing grid ranging from 135 to 220 basis points over the applicable adjusted term SOFR. The interest rate for Term Loan 2 includes the effect of the Company's interest rate derivative swap, which expired on January 31, 2023.
---	---
(4)	The Series G cumulative redeemable preferred stock has an initial dividend rate equal to the Montage Healdsburg's annual net operating income yield on the Company's investment in the resort. During 2022, the Company declared cash dividends of $0.567112 per share, which equates to an annual yield of 2.268%. The annual dividend rate may increase in 2024 to the greater of 3.0% or the rate equal to the Montage Healdsburg's annual net operating income yield on the Company's total investment in the resort.
---	---


CAPITALIZATION			Page 23

Supplemental Financial Information February 22, 2023

PROPERTY-LEVEL DATA AND OPERATING STATISTICS


PROPERTY-LEVEL DATA AND OPERATING STATISTICS			Page 24

Supplemental Financial Information February 22, 2023

Hotel Information as of February 22, 2023


Hotel		****	Location	****	Brand	****	Number of Rooms	****	% of Total Rooms	****	Interest	****	Year Acquired

1	Hilton San Diego Bayfront (1) (2)		California		Hilton		1,190		15%		Leasehold		2011 / 2022
2	Boston Park Plaza		Massachusetts		Independent		1,060		14%		Fee Simple		2013
3	Hyatt Regency San Francisco		California		Hyatt		821		11%		Fee Simple		2013
4	Renaissance Washington DC		Washington DC		Marriott		807		10%		Fee Simple		2005
5	Renaissance Orlando at SeaWorld®		Florida		Marriott		781		10%		Fee Simple		2005
6	Wailea Beach Resort		Hawaii		Marriott		547		7%		Fee Simple		2014
7	JW Marriott New Orleans (3)		Louisiana		Marriott		501		6%		Fee Simple		2011
8	Marriott Boston Long Wharf		Massachusetts		Marriott		415		5%		Fee Simple		2007
9	Renaissance Long Beach		California		Marriott		374		5%		Fee Simple		2005
10	The Confidante Miami Beach		Florida		Hyatt		339		4%		Fee Simple		2022
11	The Bidwell Marriott Portland		Oregon		Marriott		258		3%		Fee Simple		2000
12	Hilton New Orleans St. Charles		Louisiana		Hilton		252		3%		Fee Simple		2013
13	Oceans Edge Resort & Marina		Florida		Independent		175		2%		Fee Simple		2017
14	Montage Healdsburg		California		Montage		130		2%		Fee Simple		2021
15	Four Seasons Resort Napa Valley (4)		California		Four Seasons		85		1%		Fee Simple		2021

	Total Portfolio						7,735		100%

(1)	In June 2022, the Company acquired the 25.0% noncontrolling partner's ownership interest in the Hilton San Diego Bayfront. Following this acquisition, the Company owns 100% of the hotel.
(2)	The ground lease at the Hilton San Diego Bayfront matures in 2071.
---	---
(3)	Hotel is subject to a municipal airspace lease that matures in 2044 and applies only to certain balcony space fronting Canal Street that is not integral to the hotel’s operations.
---	---
(4)	The number of rooms at the Four Seasons Resort Napa Valley excludes rooms provided by owners of the separately owned Four Seasons Private Residences Napa Valley who may periodically elect to participate in the residential rental program.
---	---


PROPERTY-LEVEL DATA AND OPERATING STATISTICS			Page 25

Supplemental Financial Information February 22, 2023

Property-Level Operating Statistics

ADR, Occupancy and RevPAR

Q4 2022/2021/2019


	ADR								Occupancy								RevPAR
Hotels sorted by number of rooms	For the Quarter Ended December 31,								For the Quarter Ended December 31,							For the Quarter Ended December 31,
	2022		****	2021		2019	****	2022 vs. 2019	2022	****	2021	2019	****	2022 vs. 2019		2022		****	2021			2019	****	2022 vs. 2019
Hilton San Diego Bayfront	$	257.63	$	217.13	$	217.65		18.4%	76.0%		59.3%	82.4%		(640)	bps	$	195.80		$	128.76	$	179.34		9.2%
Boston Park Plaza	$	228.55	$	194.84	$	200.21		14.2%	77.6%		58.7%	88.1%		(1,050)	bps	$	177.35		$	114.37	$	176.39		0.5%
Hyatt Regency San Francisco (1)	$	280.82	$	204.53	$	319.68		(12.2)%	67.7%		56.4%	88.2%		(2,050)	bps	$	190.12		$	115.35	$	281.96		(32.6)%
Renaissance Washington DC (1)	$	239.25	$	189.31	$	238.17		0.5%	44.2%		35.3%	73.4%		(2,920)	bps	$	105.75		$	66.83	$	174.82		(39.5)%
Renaissance Orlando at SeaWorld®	$	185.85	$	159.64	$	174.42		6.6%	65.1%		50.9%	81.2%		(1,610)	bps	$	120.99		$	81.26	$	141.63		(14.6)%
Wailea Beach Resort	$	727.99	$	642.20	$	505.64		44.0%	72.9%		74.4%	89.8%		(1,690)	bps	$	530.70		$	477.80	$	454.06		16.9%
JW Marriott New Orleans	$	255.19	$	219.85	$	208.88		22.2%	70.1%		49.4%	82.6%		(1,250)	bps	$	178.89		$	108.61	$	172.53		3.7%
Marriott Boston Long Wharf	$	358.07	$	305.86	$	314.91		13.7%	69.7%		60.2%	84.4%		(1,470)	bps	$	249.57		$	184.13	$	265.78		(6.1)%
Renaissance Long Beach	$	204.42	$	171.56	$	179.29		14.0%	68.3%		69.2%	77.8%		(950)	bps	$	139.62		$	118.72	$	139.49		0.1%
The Confidante Miami Beach	$	286.17	$	277.04	$	188.50		51.8%	69.4%		74.7%	81.0%		(1,160)	bps	$	198.60		$	206.95	$	152.69		30.1%
The Bidwell Marriott Portland	$	162.34	$	145.22	$	170.52		(4.8)%	41.3%		40.9%	65.1%		(2,380)	bps	$	67.05		$	59.39	$	111.01		(39.6)%
Hilton New Orleans St. Charles	$	195.89	$	187.62	$	172.91		13.3%	73.7%		45.4%	67.8%		590	bps	$	144.37		$	85.18	$	117.23		23.2%
Oceans Edge Resort & Marina	$	368.16	$	416.41	$	233.25		57.8%	66.3%		74.3%	84.4%		(1,810)	bps	$	244.09		$	309.39	$	196.86		24.0%

Comparable Portfolio (2)	$	286.37	$	255.77	$	247.04		15.9%	67.6%		56.4%	82.1%		(1,450)	bps	$	193.59		$	144.25	$	202.82		(4.6)%

Montage Healdsburg	$	1,128.82	$	1,084.66		N/A		N/A	46.7%		62.8%	N/A		N/A		$	527.16		$	681.17		N/A		N/A
Four Seasons Resort Napa Valley	$	1,838.15	$	1,577.64		N/A		N/A	45.3%		42.6%	N/A		N/A		$	832.68		$	672.07		N/A		N/A

Total Portfolio (3)	$	308.55	$	275.11					67.0%		56.4%					$	206.73		$	155.16

*Footnotes on page 29


PROPERTY-LEVEL DATA AND OPERATING STATISTICS			Page 26

Supplemental Financial Information February 22, 2023

Property-Level Operating Statistics

ADR, Occupancy and RevPAR

FY 2022/2021/2019


	ADR								Occupancy								RevPAR
Hotels sorted by number of rooms	For the Year Ended December 31,								For the Year Ended December 31,							For the Year Ended December 31,
	2022		****	2021		2019	****	2022 vs. 2019	2022	****	2021	2019	****	2022 vs. 2019		2022		****	2021			2019	****	2022 vs. 2019
Hilton San Diego Bayfront (1)	$	270.47	$	207.14	$	247.20		9.4%	76.6%		47.9%	81.4%		(480)	bps	$	207.18		$	99.22	$	201.22		3.0%
Boston Park Plaza	$	224.07	$	177.24	$	213.07		5.2%	75.2%		39.8%	90.6%		(1,540)	bps	$	168.50		$	70.54	$	193.04		(12.7)%
Hyatt Regency San Francisco (1)	$	267.52	$	200.40	$	322.08		(16.9)%	58.5%		35.1%	89.0%		(3,050)	bps	$	156.50		$	70.34	$	286.65		(45.4)%
Renaissance Washington DC (1)	$	241.85	$	151.24	$	232.64		4.0%	49.7%		40.9%	78.1%		(2,840)	bps	$	120.20		$	61.86	$	181.69		(33.8)%
Renaissance Orlando at SeaWorld®	$	184.16	$	149.15	$	168.18		9.5%	67.2%		40.7%	78.9%		(1,170)	bps	$	123.76		$	60.70	$	132.69		(6.7)%
Wailea Beach Resort	$	694.73	$	613.15	$	478.47		45.2%	79.2%		66.0%	91.2%		(1,200)	bps	$	550.23		$	404.68	$	436.36		26.1%
JW Marriott New Orleans	$	238.68	$	187.16	$	206.47		15.6%	62.0%		43.4%	83.9%		(2,190)	bps	$	147.98		$	81.23	$	173.23		(14.6)%
Marriott Boston Long Wharf	$	375.26	$	315.93	$	332.29		12.9%	66.8%		41.3%	86.7%		(1,990)	bps	$	250.67		$	130.48	$	288.10		(13.0)%
Renaissance Long Beach	$	208.11	$	175.21	$	189.85		9.6%	73.2%		62.5%	81.6%		(840)	bps	$	152.34		$	109.51	$	154.92		(1.7)%
The Confidante Miami Beach	$	303.82	$	226.73	$	196.84		54.3%	71.9%		75.1%	80.3%		(840)	bps	$	218.45		$	170.27	$	158.06		38.2%
The Bidwell Marriott Portland	$	169.24	$	152.70	$	186.05		(9.0)%	47.2%		28.3%	80.1%		(3,290)	bps	$	79.88		$	43.21	$	149.03		(46.4)%
Hilton New Orleans St. Charles	$	184.84	$	149.86	$	169.29		9.2%	60.5%		38.5%	74.3%		(1,380)	bps	$	111.83		$	57.70	$	125.78		(11.1)%
Oceans Edge Resort & Marina (1)	$	432.83	$	403.92	$	242.04		78.8%	73.9%		77.8%	88.7%		(1,480)	bps	$	319.86		$	314.25	$	214.69		49.0%

Comparable Portfolio (2)	$	289.15	$	242.86	$	252.38		14.6%	67.2%		46.2%	83.9%		(1,670)	bps	$	194.31		$	112.20	$	211.75		(8.2)%

Montage Healdsburg	$	1,103.21	$	1,092.35		N/A		N/A	54.4%		52.2%	N/A		N/A		$	600.15		$	570.21		N/A		N/A
Four Seasons Resort Napa Valley	$	1,778.25	$	1,577.64		N/A		N/A	45.2%		42.6%	N/A		N/A		$	803.77		$	672.07		N/A		N/A

Total Portfolio (3)	$	311.94	$	260.25					66.8%		46.3%					$	208.38		$	120.50

*Footnotes on page 29


PROPERTY-LEVEL DATA AND OPERATING STATISTICS			Page 27

Supplemental Financial Information February 22, 2023

Property-Level Operating Statistics

Total RevPAR (TRevPAR)

Q4 and FY 2022/2021/2019


Hotels sorted by number of rooms	For the Quarters Ended December 31,								For the Years Ended December 31,
	2022		2021		****	2019	****	2022 vs. 2019	2022		2021		****	2019		****	2022 vs. 2019
Hilton San Diego Bayfront (1)	$	382.49	$	222.50	$	312.85		22.3%	$	370.75	$	156.09		$	351.61		5.4%
Boston Park Plaza	$	274.78	$	176.30	$	261.05		5.3%	$	244.72	$	99.55		$	271.52		(9.9)%
Hyatt Regency San Francisco (1)	$	279.31	$	160.52	$	422.51		(33.9)%	$	229.18	$	94.28		$	411.48		(44.3)%
Renaissance Washington DC (1)	$	176.91	$	95.18	$	274.20		(35.5)%	$	188.76	$	77.94		$	287.84		(34.4)%
Renaissance Orlando at SeaWorld®	$	255.18	$	167.64	$	293.84		(13.2)%	$	273.15	$	118.31		$	293.61		(7.0)%
Wailea Beach Resort	$	727.78	$	669.67	$	625.99		16.3%	$	794.50	$	553.38		$	617.62		28.6%
JW Marriott New Orleans	$	230.95	$	139.26	$	231.86		(0.4)%	$	188.88	$	104.63		$	229.00		(17.5)%
Marriott Boston Long Wharf	$	367.52	$	260.13	$	392.17		(6.3)%	$	351.50	$	178.56		$	406.92		(13.6)%
Renaissance Long Beach	$	192.62	$	154.79	$	194.64		(1.0)%	$	198.91	$	134.54		$	214.49		(7.3)%
The Confidante Miami Beach	$	321.57	$	308.75	$	282.05		14.0%	$	348.08	$	261.11		$	282.49		23.2%
The Bidwell Marriott Portland	$	99.51	$	76.95	$	130.09		(23.5)%	$	110.23	$	54.16		$	171.95		(35.9)%
Hilton New Orleans St. Charles	$	163.82	$	99.38	$	132.51		23.6%	$	139.28	$	70.46		$	142.86		(2.5)%
Oceans Edge Resort & Marina (1)	$	366.79	$	443.20	$	299.74		22.4%	$	474.11	$	454.84		$	332.34		42.7%

Comparable Portfolio (2)	$	305.36	$	215.46	$	313.38		(2.6)%	$	301.65		160.15		$	324.63		(7.1)%

Montage Healdsburg	$	1,012.03	$	1,190.30		N/A		N/A	$	1,077.98	$	957.31			N/A		N/A
Four Seasons Resort Napa Valley	$	1,286.75	$	1,082.44		N/A		N/A	$	1,293.83	$	1,082.44			N/A		N/A

Total Portfolio (3)	$	328.77	$	235.19					$	326.17	$	174.54

*Footnotes on page 29


PROPERTY-LEVEL DATA AND OPERATING STATISTICS			Page 28

Supplemental Financial Information February 22, 2023

Property-Level Operating Statistics

Q4 and FY 2022/2021/2019 Footnotes

(1)	Operating statistics for the fourth quarter and full year of 2022 are impacted by room renovations at the Hyatt Regency San Francisco and the Renaissance Washington DC. Operating statistics for the full year of 2019 are impacted by room renovations at the Hilton San Diego Bayfront, the Hyatt Regency San Francisco and the Oceans Edge Resort & Marina.
(2)	Comparable Portfolio operating statistics include the same 12 hotels owned by the Company during the fourth quarters and full years of 2022, 2021 and 2019 plus The Confidante Miami Beach acquired by the Company in June 2022. Comparable Portfolio operating statistics for the full year of 2022 and the fourth quarters and full years of 2021 and 2019 include prior ownership information obtained by the Company from the previous owner of The Confidante Miami Beach during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition.
---	---
(3)	Total Portfolio consists of all 15 hotels owned by the Company as of December 31, 2022. Total Portfolio operating statistics for the fourth quarter and full year of 2022 include rooms provided by the owners of the separately owned Four Seasons Private Residences Napa Valley who may periodically elect to participate in the residential rental program at the Four Seasons Resort Napa Valley. Total Portfolio operating statistics for the full year of 2021 include prior ownership results for the Montage Healdsburg. The Company obtained prior ownership information from the previous owner of the Montage Healdsburg during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition.
---	---


PROPERTY-LEVEL DATA AND OPERATING STATISTICS			Page 29

Supplemental Financial Information February 22, 2023

PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre &

ADJUSTED EBITDAre MARGINS


PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS			Page 30

Supplemental Financial Information February 22, 2023

Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins

Q4 2022/2021


Hotels sorted by number of rooms	For the Quarters Ended December 31,
	2022								2021
(In thousands)							Hotel Adjusted								Hotel Adjusted		Hotel Adjusted
	Total			Hotel Adjusted			EBITDAre		Total			Hotel Adjusted			EBITDAre		EBITDAre
	Revenues		****	EBITDAre		****	Margins	****	Revenues		****	EBITDAre		****	Margins	****	Margin Change
Hilton San Diego Bayfront	$	41,875		$	12,335		29.5%		$	24,359		$	4,878		20.0%		950	bps
Boston Park Plaza		26,797			7,782		29.0%			17,193			2,643		15.4%		1,360	bps
Hyatt Regency San Francisco (1)		21,096			2,459		11.7%			12,124			(1,078)		(8.9)%		2,060	bps
Renaissance Washington DC (1)		13,135			1,351		10.3%			7,067			(1,490)		(21.1)%		3,140	bps
Renaissance Orlando at SeaWorld®		18,336			5,045		27.5%			12,045			2,502		20.8%		670	bps
Wailea Beach Resort		36,624			14,431		39.4%			33,700			14,657		43.5%		(410)	bps
JW Marriott New Orleans		10,645			4,262		40.0%			6,419			2,096		32.7%		730	bps
Marriott Boston Long Wharf		14,031			4,815		34.3%			9,932			2,614		26.3%		800	bps
Renaissance Long Beach		6,627			1,568		23.7%			5,326			1,436		27.0%		(330)	bps
The Confidante Miami Beach		10,030			2,474		24.7%			9,629			3,320		34.5%		(980)	bps
The Bidwell Marriott Portland		2,362			32		1.4%			1,826			260		14.2%		(1,280)	bps
Hilton New Orleans St. Charles		3,798			1,394		36.7%			2,304			661		28.7%		800	bps
Oceans Edge Resort & Marina		5,906			2,169		36.7%			7,136			3,048		42.7%		(600)	bps

Comparable Portfolio (2)		211,262			60,117		28.5%			149,060			35,547		23.8%		470	bps

Montage Healdsburg		12,104			1,511		12.5%			14,236			2,503		17.6%		(510)	bps
Four Seasons Resort Napa Valley		10,773			238		2.2%			2,852			—		0.0%		220	bps

Total Portfolio (3)		234,139			61,866		26.4%			166,148			38,050		22.9%		350	bps

Less: Prior Ownership (4)
The Confidante Miami Beach		—			—		N/A			(9,629)			(3,320)		34.5%		N/A

Add: Sold Hotels (5)		—			—		N/A			15,884			1,434		9.0%		N/A

Actual Portfolio (6)	$	234,139		$	61,866		26.4%		$	172,403		$	36,164		21.0%		N/A

*Footnotes on page 35


PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS			Page 31

Supplemental Financial Information February 22, 2023

Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins

Q4 2022/2019


Hotels sorted by number of rooms	For the Quarters Ended December 31,
	2022								2019
(In thousands)							Hotel Adjusted								Hotel Adjusted		Hotel Adjusted
	Total			Hotel Adjusted			EBITDAre		Total			Hotel Adjusted			EBITDAre		EBITDAre
	Revenues		****	EBITDAre		****	Margins	****	Revenues		****	EBITDAre		****	Margins	****	Margin Change
Hilton San Diego Bayfront	$	41,875		$	12,335		29.5%		$	34,249		$	8,787		25.7%		380	bps
Boston Park Plaza		26,797			7,782		29.0%			25,458			7,474		29.4%		(40)	bps
Hyatt Regency San Francisco (1)		21,096			2,459		11.7%			31,798			8,363		26.3%		(1,460)	bps
Renaissance Washington DC (1)		13,135			1,351		10.3%			20,358			5,976		29.4%		(1,910)	bps
Renaissance Orlando at SeaWorld®		18,336			5,045		27.5%			21,113			7,463		35.3%		(780)	bps
Wailea Beach Resort		36,624			14,431		39.4%			31,502			12,424		39.4%		—	bps
JW Marriott New Orleans		10,645			4,262		40.0%			10,680			4,482		42.0%		(200)	bps
Marriott Boston Long Wharf		14,031			4,815		34.3%			14,973			5,455		36.4%		(210)	bps
Renaissance Long Beach		6,627			1,568		23.7%			6,698			1,747		26.1%		(240)	bps
The Confidante Miami Beach		10,030			2,474		24.7%			9,186			2,049		22.3%		240	bps
The Bidwell Marriott Portland		2,362			32		1.4%			2,980			762		25.6%		(2,420)	bps
Hilton New Orleans St. Charles		3,798			1,394		36.7%			3,072			729		23.7%		1,300	bps
Oceans Edge Resort & Marina		5,906			2,169		36.7%			4,826			1,435		29.7%		700	bps

Comparable Portfolio (2)		211,262			60,117		28.5%			216,893			67,146		31.0%		(250)	bps

Montage Healdsburg		12,104			1,511		12.5%			—			—		N/A		N/A
Four Seasons Resort Napa Valley		10,773			238		2.2%			—			—		N/A		N/A

Total Portfolio (3)		234,139			61,866		26.4%			216,893			67,146		31.0%		N/A

Less: Prior Ownership (4)
The Confidante Miami Beach		—			—		N/A			(9,186)			(2,049)		22.3%		N/A

Add: Sold/Disposed Hotels (5)		—			—		N/A			65,223			15,066		23.1%		N/A

Actual Portfolio (6)	$	234,139		$	61,866		26.4%		$	272,930		$	80,163		29.4%		N/A

*Footnotes on page 35


PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS			Page 32

Supplemental Financial Information February 22, 2023

Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins

FY 2022/2021


Hotels sorted by number of rooms	For the Years Ended December 31,
	2022								2021
(In thousands)							Hotel Adjusted								Hotel Adjusted		Hotel Adjusted
	Total			Hotel Adjusted			EBITDAre		Total			Hotel Adjusted			EBITDAre		EBITDAre
	Revenues		****	EBITDAre		****	Margins	****	Revenues		****	EBITDAre		****	Margins	****	Margin Change
Hilton San Diego Bayfront	$	161,035		$	52,560		32.6%		$	67,799		$	9,798		14.5%		1,810	bps
Boston Park Plaza		94,681			24,177		25.5%			38,516			(3,250)		(8.4)%		3,390	bps
Hyatt Regency San Francisco (1)		68,677			5,737		8.4%			28,252			(9,448)		(33.4)%		4,180	bps
Renaissance Washington DC (1)		55,600			10,114		18.2%			22,959			(1,684)		(7.3)%		2,550	bps
Renaissance Orlando at SeaWorld®		77,866			23,770		30.5%			33,725			3,313		9.8%		2,070	bps
Wailea Beach Resort		158,625			65,972		41.6%			110,486			47,270		42.8%		(120)	bps
JW Marriott New Orleans		34,540			12,343		35.7%			19,133			4,631		24.2%		1,150	bps
Marriott Boston Long Wharf		53,243			18,974		35.6%			27,048			3,928		14.5%		2,110	bps
Renaissance Long Beach		27,153			7,961		29.3%			18,366			5,465		29.8%		(50)	bps
The Confidante Miami Beach		43,070			12,421		28.8%			33,260			7,130		21.4%		740	bps
The Bidwell Marriott Portland		10,380			1,563		15.1%			5,100			(831)		(16.3)%		3,140	bps
Hilton New Orleans St. Charles		12,811			4,471		34.9%			6,481			888		13.7%		2,120	bps
Oceans Edge Resort & Marina		30,284			11,975		39.5%			29,053			12,477		42.9%		(340)	bps

Comparable Portfolio (2)		827,965			252,038		30.4%			440,178			79,687		18.1%		1,230	bps

Montage Healdsburg		51,150			6,158		12.0%			45,424			5,983		13.2%		(120)	bps
Four Seasons Resort Napa Valley		42,279			3,087		7.3%			2,852			—		0.0%		730	bps

Total Portfolio (3)		921,394			261,283		28.4%			488,454			85,670		17.5%		1,090	bps

Less: Prior Ownership (4)
The Confidante Miami Beach		(22,637)			(8,630)		38.1%			(33,260)			(7,130)		21.4%		N/A
Montage Healdsburg		—			—		N/A			(5,755)			1,768		(30.7)%		N/A

Add: Sold Hotels (5)		3,234			(2,172)		(67.2)%			49,389			(1,966)		(4.0)%		N/A

Actual Portfolio (6)	$	901,991		$	250,481		27.8%		$	498,828		$	78,342		15.7%		N/A

*Footnotes on page 35


PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS			Page 33

Supplemental Financial Information February 22, 2023

Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins

FY 2022/2019


Hotels sorted by number of rooms	For the Years Ended December 31,
	2022								2019
(In thousands)							Hotel Adjusted								Hotel Adjusted		Hotel Adjusted
	Total			Hotel Adjusted			EBITDAre		Total			Hotel Adjusted			EBITDAre		EBITDAre
	Revenues		****	EBITDAre		****	Margins	****	Revenues		****	EBITDAre		****	Margins	****	Margin Change
Hilton San Diego Bayfront (1)	$	161,035		$	52,560		32.6%		$	152,719		$	46,996		30.8%		180	bps
Boston Park Plaza		94,681			24,177		25.5%			105,052			32,803		31.2%		(570)	bps
Hyatt Regency San Francisco (1)		68,677			5,737		8.4%			121,322			32,647		26.9%		(1,850)	bps
Renaissance Washington DC (1)		55,600			10,114		18.2%			84,784			24,267		28.6%		(1,040)	bps
Renaissance Orlando at SeaWorld®		77,866			23,770		30.5%			83,699			28,858		34.5%		(400)	bps
Wailea Beach Resort		158,625			65,972		41.6%			123,311			49,440		40.1%		150	bps
JW Marriott New Orleans		34,540			12,343		35.7%			41,877			17,465		41.7%		(600)	bps
Marriott Boston Long Wharf		53,243			18,974		35.6%			61,638			23,225		37.7%		(210)	bps
Renaissance Long Beach		27,153			7,961		29.3%			29,280			8,973		30.6%		(130)	bps
The Confidante Miami Beach		43,070			12,421		28.8%			36,501			8,060		22.1%		670	bps
The Bidwell Marriott Portland		10,380			1,563		15.1%			15,628			5,871		37.6%		(2,250)	bps
Hilton New Orleans St. Charles		12,811			4,471		34.9%			13,140			3,463		26.4%		850	bps
Oceans Edge Resort & Marina (1)		30,284			11,975		39.5%			21,228			6,576		31.0%		850	bps

Comparable Portfolio (2)		827,965			252,038		30.4%			890,179			288,644		32.4%		(200)	bps

Montage Healdsburg		51,150			6,158		12.0%			—			—		N/A		N/A
Four Seasons Resort Napa Valley		42,279			3,087		7.3%			—			—		N/A		N/A

Total Portfolio (3)		921,394			261,283		28.4%			890,179			288,644		32.4%		N/A

Less: Prior Ownership (4)
The Confidante Miami Beach		(22,637)			(8,630)		38.1%			(36,501)			(8,060)		22.1%		N/A

Add: Sold/Disposed Hotels (5)		3,234			(2,172)		(67.2)%			261,397			58,067		22.2%		N/A

Actual Portfolio (6)	$	901,991		$	250,481		27.8%		$	1,115,075		$	338,651		30.4%		N/A

*Footnotes on page 35


PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS			Page 34

Supplemental Financial Information February 22, 2023

Property-Level Revenues, Adjusted EBITDAre and Adjusted EBITDAre Margins

Q4 and FY 2022/2021/2019 Footnotes

(1)	Hotel Adjusted EBITDAre for the fourth quarter and full year of 2022 are impacted by room renovations at the Hyatt Regency San Francisco and the Renaissance Washington DC. Hotel Adjusted EBITDAre for the full year of 2019 is impacted by room renovations at the Hilton San Diego Bayfront, the Hyatt Regency San Francisco and the Oceans Edge Resort & Marina.
(2)	Comparable Portfolio includes the same 12 hotels owned by the Company during the fourth quarters and full years of 2022, 2021 and 2019 plus The Confidante Miami Beach acquired by the Company in June 2022. Amounts included in this presentation for The Confidante Miami Beach include both prior ownership results and the Company's results. The Company obtained prior ownership information from the previous owner of The Confidante Miami Beach during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition.
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(3)	Total Portfolio consists of all 15 hotels owned by the Company as of December 31, 2022 plus prior ownership results for the Montage Healdsburg acquired by the Company in April 2021. The Company obtained prior ownership information from the previous owner of the Montage Healdsburg during the due diligence period before acquiring the hotel. The Company performed a limited review of the information as part of its analysis of the acquisition. The Four Seasons Resort Napa Valley is a newly-developed hotel that opened on a limited basis in October 2021. Prior year information is not comparable.
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(4)	Prior Ownership includes results for The Confidante Miami Beach and the Montage Healdsburg, as applicable, prior to the Company’s acquisition of the hotels in June 2022 and April 2021, respectively.
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(5)	Sold Hotels for the full years of 2022, 2021 and 2019 include results for the Hyatt Centric Chicago Magnificent Mile, sold in February 2022, and the Embassy Suites Chicago and Hilton Garden Inn Chicago Downtown/Magnificent Mile, sold in March 2022. Sold Hotels for the fourth quarters and full years of 2021 and 2019 also include results for the Embassy Suites La Jolla and the Renaissance Westchester, sold in December 2021 and October 2021, respectively. Sold/Disposed Hotels for the fourth quarter and full year of 2019 also include results for the Renaissance Los Angeles Airport sold in December 2020, the Hilton Times Square assigned to its mortgage holder in December 2020, the Renaissance Harborplace sold in July 2020, and the Courtyard by Marriott Los Angeles sold in October 2019.
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(6)	Actual Portfolio includes results for the 15 hotels and 18 hotels owned by the Company during the fourth quarter and full year of 2022, respectively, and the 19 hotels and 21 hotels owned by the Company during the fourth quarters and full years of 2021 and 2019, respectively.
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PROPERTY-LEVEL REVENUES, ADJUSTED EBITDAre & ADJUSTED EBITDAre MARGINS			Page 35