Financial Data and Key Metrics Changes - The portfolio finished 2024 strong with full-year adjusted EBITDA at $230 million and adjusted FFO per diluted share at $0.80, both at the high end of guidance [33][36] - The company expects total portfolio RevPAR growth to range from 7% to 10% in 2025 compared to 2024, with adjusted EBITDAre projected between $245 million to $270 million and adjusted FFO per diluted share between $0.86 to $0.98 [36][37] Business Line Data and Key Metrics Changes - Group business performed well, with the Westin Washington D.C. Downtown achieving 30% RevPAR growth driven by an 18% increase in group room nights [16] - The recently acquired Hyatt Regency San Antonio Riverwalk saw group room nights grow nearly 7% in the quarter, with an 18% increase in banquet contribution [17] - The Marriott Long Beach Downtown showed solid early performance post-renovation, reinforcing the value created from better brand alignment [19] Market Data and Key Metrics Changes - Urban markets showed strength, with New Orleans hotels experiencing a 23% increase in group room nights, leading to nearly 20% combined RevPAR growth [18] - Boston hotels reported a 39% increase in group room nights, focusing on filling open patterns and driving occupancy [19] Company Strategy and Development Direction - The company is focused on three strategic objectives: recycling capital, investing in the portfolio, and returning capital to shareholders [8] - In 2024, nearly $100 million was returned to shareholders through dividends and share repurchases, with a disciplined approach to capital allocation expected to continue in 2025 [14][24] - The company plans to enhance its capital returns and continue investing in high-quality assets while maintaining a strong balance sheet and liquidity position [25][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing a compelling setup for total revenue growth and improved margins compared to the previous year [22] - The company anticipates a balanced distribution of quarterly growth in 2025, with expectations for RevPAR growth to accelerate in the second half of the year [38] - Management acknowledged challenges in the transaction market in 2024 but remains committed to disciplined capital allocation and exploring new opportunities [24][32] Other Important Information - The company invested $157 million into its portfolio in 2024, with ongoing renovations expected to yield earnings benefits [27][30] - The Andaz Miami Beach is set to open in mid-March 2025, expected to contribute $8 million to $9 million in EBITDA for the year [39] Q&A Session Summary Question: Demand segment assumptions within the 7% to 10% RevPAR guide - Management indicated that group performance is expected to remain solid, pacing above 10% for the year, with business transient strength and slight improvement anticipated [46][47] Question: Pace of wages and benefits increase in 2024 - Wages and benefits increased in the mid-fours in 2024, with expectations to be closer to the higher end of the 4% to 6% range in 2025 due to collective bargaining agreements [54][55] Question: Andaz EBITDA ramp in 2026 - The ramp for Andaz Miami Beach is expected to start at around 20% in March 2025, potentially doubling EBITDA in 2026 as occupancy increases [60] Question: Update on Napa assets and operational improvements - Management reported good EBITDA growth at Napa hotels, with ongoing efforts to optimize group mix and cost management [66][71] Question: Recovery in Maui and guidance range - Management expects solid group demand in Maui, with a potential lift in leisure in the second half of the year as recovery progresses [75][78] Question: Renaissance Orlando's future plans - Management noted that while Renaissance Orlando is not in the 2025 capital plan, they are open to exploring rebranding opportunities in the future [90][91] Question: Total expense growth baked into guidance - Total expense growth is expected to be in the 4% to 4.5% range, with higher wage growth anticipated [108][109]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-32319 Sunstone Hotel Investors, Inc. (Exact Name of Registrant as Specified in Its Charter) Maryland 20-1296886 (Stat ...

Financial Data and Key Metrics Changes - In 2018, the company achieved better than expected operating results and earnings, with RevPAR and comparable property level revenues for 21 hotels increasing by 5.6% in Q4, and full year RevPAR growth at 2.8% [22][23] - Adjusted EBITDA and adjusted FFO per diluted share exceeded the high end of guidance for both Q4 and the full year [24] - The company ended 2018 with over $680 million in total adjusted unrestricted cash and a $500 million undrawn revolving credit facility [37] Business Line Data and Key Metrics Changes - The company sold six non-core hotels for a total of $353 million, improving portfolio quality and providing financial flexibility [11][13] - Comparable hotel EBITDA growth increased by 7% in Q4 and by 2% for the full year, despite cost pressures in wages, benefits, and property taxes [23][25] - The company completed over $150 million in capital improvements across its portfolio, enhancing long-term earnings prospects [16] Market Data and Key Metrics Changes - The company expects modest growth in portfolio RevPAR and total hotel revenues in 2019, with specific markets like Boston, Chicago, and Washington, D.C. facing headwinds [28][30] - The group pace for 2019 was up nearly 1%, with 76% of group rooms already booked [30] Company Strategy and Development Direction - The company aims to concentrate its portfolio on long-term relevant real estate, with plans to methodically dispose of non-core assets while seeking strategic acquisitions [10][35] - The management is cautious about current pricing expectations for high-quality assets, indicating a preference for patience in investment decisions [32][34] Management's Comments on Operating Environment and Future Outlook - The management anticipates continued cost pressures in wages and benefits, making it challenging to maintain hotel EBITDA margins [27] - The company expects to see strong performance in markets like San Francisco and Wailea, while facing challenges in others [28][30] Other Important Information - The company declared a $0.05 per common share dividend for Q1 2019, with an annual dividend yield of approximately 4.8% for 2018 [43][44] - The company invested over $4 million in environmental and sustainability projects in 2018, with plans for further investments in 2019 [20][21] Q&A Session Summary Question: Can you provide specifics on the assumptions made in the 2019 budget regarding payroll costs and RevPAR growth? - The company expects salary and wages to increase by 3% to 5%, with benefits slightly higher, and anticipates strong performance in Q1 driven by San Francisco [48][49] Question: What drove the stronger performance in San Francisco? - The first quarter is expected to be particularly strong due to group bookings and a favorable market environment [51] Question: Can you elaborate on the wage adjustments made in 2018? - Wage adjustments were broad-based, driven by market conditions and the need to retain quality staff, with increases of about 4% to 5% in 2018 [60][64] Question: How has the government shutdown impacted the company? - The company experienced several hundred thousand dollars in revenue loss due to the shutdown, which has been factored into the Q1 guidance [112] Question: What is the company's view on buybacks in the current cycle? - The management sees buybacks as an important capital allocation tool and is considering it as part of their strategy [76] Question: How does the company view its position for potential M&A? - The company believes it is well-positioned for M&A opportunities, but any acquisition must align with its strategic objectives [127][128]