Host Hotels & Resorts, Inc. (NYSE:HST) (“Host Hotels” or
the “Company”), the nation’s largest lodging real estate investment
trust (“REIT”), today announced results of operations for the
second quarter of 2016.
“Consistent with our disciplined approach to
capital allocation and active portfolio management, we completed
the sale of five non-core properties for a total of $345 million
and repurchased 5.2 million shares at an average price of $15.39,”
said W. Edward Walter, President and Chief Executive Officer.
“Importantly, we invested a portion of the proceeds to acquire the
ground lease under the Key Bridge Marriott, which is located along
the Potomac River with dynamic views of the Washington, D.C.
cityscape. Notwithstanding variances in top-line performance across
markets, we achieved strong margin growth, driven by improvements
in productivity and efficiency across the portfolio and by food and
beverage operations, resulting in strong EBITDA and FFO
growth.”
OPERATING
RESULTS |
(in millions, except per
share and hotel statistics) |
|
|
|
|
|
|
|
|
|
Quarter ended June
30, |
|
Percent |
|
Year-to-date ended
June 30, |
|
Percent |
|
2016 |
|
2015 |
|
Change |
|
2016 |
|
2015 |
|
Change |
Total revenues |
$ |
1,459 |
|
|
$ |
1,439 |
|
|
|
1.4 |
% |
|
$ |
2,798 |
|
|
$ |
2,741 |
|
|
|
2.1 |
% |
Comparable hotel
revenues (1) |
|
1,323 |
|
|
|
1,288 |
|
|
|
2.7 |
% |
|
|
2,513 |
|
|
|
2,441 |
|
|
|
2.9 |
% |
Net income |
|
351 |
|
|
|
214 |
|
|
|
64.0 |
% |
|
|
535 |
|
|
|
313 |
|
|
|
70.9 |
% |
Adjusted EBITDA
(1) |
|
436 |
|
|
|
422 |
|
|
|
3.3 |
% |
|
|
782 |
|
|
|
743 |
|
|
|
5.2 |
% |
Change in comparable
hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
Domestic properties |
|
2.0 |
% |
|
|
|
|
|
|
2.6 |
% |
|
|
|
|
International properties -
Constant US$ |
|
2.3 |
% |
|
|
|
|
|
|
5.8 |
% |
|
|
|
|
Total - Constant US$ |
|
2.0 |
% |
|
|
|
|
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
.47 |
|
|
|
.28 |
|
|
|
67.9 |
% |
|
|
.71 |
|
|
|
.41 |
|
|
|
73.2 |
% |
NAREIT FFO per diluted
share (1) |
|
.49 |
|
|
|
.43 |
|
|
|
14.0 |
% |
|
|
.90 |
|
|
|
.78 |
|
|
|
15.4 |
% |
Adjusted FFO per
diluted share (1) |
|
.49 |
|
|
|
.46 |
|
|
|
6.5 |
% |
|
|
.90 |
|
|
|
.81 |
|
|
|
11.1 |
% |
|
___________
(1) NAREIT Funds From Operations (“FFO”) per diluted
share, Adjusted FFO per diluted share, Adjusted EBITDA and
comparable hotel results are non-GAAP (U.S. generally accepted
accounting principles) financial measures within the meaning of the
rules of the Securities and Exchange Commission (“SEC”). See the
Notes to Financial Information on why the Company believes these
supplemental measures are useful, reconciliations to the most
directly comparable GAAP measure, and the limitations on the use of
these supplemental measures.
GAAP OPERATING PERFORMANCE
- The Company’s net income increased $137 million for the quarter
and $222 million year-to-date, primarily as a result of gains on
the sale of non-core assets and operating profit growth. The
improvement in RevPAR and food and beverage (“F&B”) revenues
helped drive GAAP operating profit margin growth of 100 basis
points and 90 basis points for the quarter and year-to-date,
respectively. Gains on dispositions increased $119 million and $174
million for the quarter and year-to-date, respectively, as a result
of the $466 million of dispositions completed thus far in 2016. The
impact of this activity was an increase in diluted earnings per
share of 68% and 73% for the quarter and year-to-date,
respectively.
KEY COMPANY METRICS
- Adjusted EBITDA increased $14 million, or 3.3%, for the quarter
and $39 million, or 5.2%, year-to-date, driven by increases of 5.0%
and 5.7%, respectively, in comparable hotel EBITDA. This increase
was primarily a result of strong margin improvement, a significant
increase in F&B revenues, and comparable RevPAR increases. The
growth in Adjusted EBITDA was partially offset by our successful
2016 asset sales which reduced year-to-date growth by 110 basis
points.
- Comparable RevPAR on a constant dollar basis improved 2.0% for
the quarter, driven by a slight increase in average room rate and a
120 basis point increase in occupancy to 82.4%, the highest
occupancy level since 2000. The increase in occupancy was driven by
strong group and leisure business; however, an unfavorable business
mix shift from higher rated corporate transient demand to lower
rated discount business affected average room rates. Year-to-date,
comparable RevPAR on a constant dollar basis increased 2.7%,
largely driven by a 170 basis point increase in occupancy.
- Comparable RevPAR at the Company’s domestic properties improved
2.0% for the quarter and 2.6% year-to-date. The Los Angeles and
Washington, D.C. markets outperformed the portfolio during the
second quarter, with RevPAR increases of 9.1% and 5.5%,
respectively. The Company’s New York and Florida properties lagged
the portfolio, with decreases for the quarter of 4.9% and 2.2%,
respectively.
- RevPAR at the Company’s comparable international properties
increased 2.3% in the second quarter and 5.8% year-to-date, on a
constant dollar basis. The increase was predominantly due to
strength at Latin America properties, driven by pre-Olympic test
business, and partially offset by the Company’s Canadian
properties, which continue to be negatively impacted by the oil
markets and renovations.
- The Company’s F&B revenues grew 4.5% for the quarter, which
was positively impacted by strong growth in banquet and audio
visual revenues of 6.6% in the quarter. Banquet revenues were
driven by strong performances in the San Francisco and Boston
markets.
- The improvement in RevPAR and F&B revenues helped drive
comparable hotel EBITDA margin growth of 65 basis points and 75
basis points for the quarter and year-to-date, respectively. In
addition to the strong growth in F&B revenues, operating profit
was positively impacted by the successful execution of cost control
initiatives at many of our larger resort and convention hotels over
the past two years.
- As a result of the improvements in operating results described
above, a reduction in interest expense, as well as the repurchase
of 42.1 million shares over the past 12 months, Adjusted FFO per
share increased 6.5% and 11.1% for the quarter and year-to-date,
respectively.
SHARE REPURCHASE PROGRAM AND DIVIDENDS
Since January 1, 2016, the Company has
distributed $610 million of capital to its stockholders
through dividends and stock repurchases. The Company repurchased
5.2 million shares at an average price of $15.39 for the quarter
and 10.3 million shares at an average price of $15.73
year-to-date, for a total year-to-date purchase price of
approximately $162 million. The Company has $162 million
of remaining authorized repurchase capacity under its share
repurchase program. The common stock may be purchased in the open
market or through private transactions from time to time through
December 31, 2016, depending upon market conditions. The plan
does not obligate the Company to repurchase any specific number of
shares and may be suspended at any time at its discretion.
The Company paid a regular quarterly cash
dividend of $0.20 per share on its common stock on July 15, 2016 to
stockholders of record as of June 30, 2016. The Company is
committed to sustaining a meaningful dividend, subject to approval
by the Company’s Board of Directors.
CAPITAL ALLOCATION
Consistent with its strategy to enhance asset
value, the Company acquired the ground leases for the Key Bridge
Marriott for $54 million. Due to its prime location in Arlington,
Virginia, with its view of Washington D.C. and our national
monuments, the Company is in the process of exploring a number of
value enhancements and redevelopment options for what is one of the
first hotels built in the Marriott system.
The Company continued to strategically dispose
of assets in markets where it expects lower growth or higher
capital expenditure requirements. Proceeds from the sale of these
non-core assets have been utilized as a source of funds for the
stock repurchase program, capital expenditures, and other corporate
initiatives. During the second quarter, the Company disposed of
five non-core assets for $345 million. Additionally, the Company
has two hotels under contract which are expected to be sold in the
third quarter, subject to customary closing conditions. For the 10
properties disposed of or under contract in 2016, the combined
average 2015 RevPAR was $109 compared to the Company’s year-to-date
2016 comparable RevPAR of $178. The following table is a summary of
our completed and pending dispositions activity for 2016 (in US$
millions):
|
|
Sales Price |
|
|
Mortgage Debt Repayment |
|
|
Net Sales Price |
|
First Quarter
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Novotel Wellington |
|
$ |
22 |
|
|
$ |
9 |
|
|
$ |
13 |
|
San Diego Marriott Mission
Valley |
|
|
76 |
|
|
|
— |
|
|
|
76 |
|
ibis Wellington |
|
|
23 |
|
|
|
11 |
|
|
|
12 |
|
Second Quarter
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Manhattan Beach Marriott |
|
|
82 |
|
|
|
— |
|
|
|
82 |
|
Sheraton Santiago Hotel and
Convention Center and San Cristobal Tower Santiago,
Chile |
|
|
95 |
|
|
|
— |
|
|
|
95 |
|
Seattle Airport Marriott |
|
|
97 |
|
|
|
— |
|
|
|
97 |
|
Atlanta Marriott Perimeter
Center |
|
|
71 |
|
|
|
— |
|
|
|
71 |
|
Total Sales |
|
$ |
466 |
|
|
$ |
20 |
|
|
$ |
446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels Under
Contract (1) |
|
$ |
31 |
|
|
$ |
16 |
|
|
|
15 |
|
|
___________
(1) Represents the Novotel
Christchurch Cathedral Square and ibis Christchurch hotels, which
are currently under contract and subject to various closing
conditions. There can be no assurances that these properties will
be sold in the third quarter or at the sales price indicated.
The 2016 full year guidance includes net income
(excluding gains on sale) of $8 million and Adjusted EBITDA of $13
million earned by the hotels that have been sold, or that are
considered held for sale. Accordingly, earnings estimates for 2017
should not include these amounts.
REBRANDING AND FRANCHISE OPPORTUNITIES
The Company continues to pursue opportunities to
appropriately match each hotel within its specific market with the
best operator and brand to optimize operating performance. In June,
the Company reached an agreement to franchise the Westin Cincinnati
and selected HEI Hotels & Resorts as the operator. The Company
now has a total of 15 third party managed hotels in its
consolidated and joint venture portfolio.
BALANCE SHEET
The Company’s strong balance sheet is a key
competitive advantage that provides flexibility to take advantage
of investment opportunities throughout the lodging cycle. An
important component of this strategy is the Company’s investment
grade rating on its long term unsecured debt. Importantly, 95 of
the Company’s hotels, representing 99% of its revenues, are
unencumbered by mortgage debt. During the quarter, the Company made
net repayments under the revolver portion of its credit facility of
$142 million and repaid the $100 million mortgage loan secured by
the Hyatt Regency Reston.
At June 30, 2016, the Company had
approximately $266 million of cash and $739 million of
available capacity under its revolving credit facility. Interest
expense decreased $33 million for the quarter and $43 million
year-to-date, reflecting a reduction in weighted average interest
rates compared to prior year, as well as a reduction in debt
extinguishment costs of $21 million for the quarter and
year-to-date. As of June 30, 2016, total debt was
$3.7 billion, with an average maturity of 5.6 years and an
average interest rate of 3.7%. Subsequent to quarter end, the
Company borrowed $50 million on the revolver portion of its credit
facility.
REDEVELOPMENT, RETURN ON INVESTMENT (“ROI”) AND
ACQUISITION CAPITAL PROJECTS
The Company invested approximately
$68 million and $141 million in the second quarter and
year-to-date 2016, respectively, on redevelopment, ROI and
acquisition capital expenditures. Spending for the second quarter
reflects the June opening of the exhibit hall at the Marriott
Marquis San Diego Marina, which now has 280,000 square feet of
meeting space, and the renovation of all of the guestrooms and over
60,000 square feet of meeting and public space at the Hyatt Regency
San Francisco Airport. Additionally, the Company completed phase
one of the extensive renovations at the Denver Marriott Tech Center
and began its two-year renovation at The Phoenician. Additional
information regarding the Company’s capital projects can be found
at www.hosthotels.com.
For 2016, the Company expects to invest
approximately $185 million to $200 million in
redevelopment projects, ROI, and acquisition capital expenditures,
a decline of approximately $83 million from 2015.
RENEWAL AND REPLACEMENT EXPENDITURES
The Company invested approximately
$67 million and $161 million in the second quarter and
year-to-date 2016, respectively, in renewal and replacement capital
expenditures. Significant projects completed during the second
quarter include rooms renovations at the Chicago Marriott Suites
O’Hare, W Seattle, and phase one of Toronto Marriott Downtown Eaton
Centre Hotel. The Company also completed the renovation of 10,000
square feet of public space at the Coronado Island Marriott Resort
& Spa and certain restaurants at the Manchester Grand Hyatt San
Diego and The Westin Cincinnati.
For 2016, the Company expects to invest
$295 million to $310 million in renewal and replacement
capital expenditures, a decrease of approximately $85 million from
2015.
EUROPEAN JOINT VENTURE
The European joint venture’s comparable hotel
RevPAR on a constant euro basis decreased approximately 1.3% and
2.1% for the second quarter and year-to-date 2016, respectively.
The decrease in comparable hotel RevPAR was a result of reduced
demand due to the uncertain economic and political climate.
2016 OUTLOOK
Due to the uncertain economic outlook, the
Company has lowered its expected range for RevPAR growth for
comparable properties by 100 basis points. However, based on the
success of its cost control initiatives the Company expects
operating margin to remain strong and improve compared to our prior
forecast. Additionally, the anticipated sale of the two New Zealand
hotels is expected to have minimal effect on guidance for net
income and a decrease of $1.5 million for Adjusted EBITDA. No
additional disposition or acquisition activity has been included in
the full year forecast results. Accordingly, the Company
anticipates that its 2016 operating results will be in the
following range:
|
|
Full Year 2016 |
|
|
Low-endof range |
|
High-endof range |
Total comparable hotel
RevPAR - Constant US$ |
|
|
2.0 |
% |
|
|
3.0 |
% |
Total revenues under
GAAP |
|
|
1.0 |
% |
|
|
1.9 |
% |
Operating profit margin
under GAAP |
|
50 bps |
|
|
90 bps |
|
Comparable hotel EBITDA
margins |
|
40 bps |
|
|
70 bps |
|
|
|
|
|
|
Based upon the above parameters, the Company
estimates its 2016 guidance as follows (in millions, except per
share amounts):
|
|
Full Year 2016 |
|
|
|
Low-endof range |
|
|
High-endof range |
|
Earnings per diluted
share |
|
$ |
.97 |
|
|
$ |
1.01 |
|
Net income |
|
|
732 |
|
|
|
762 |
|
NAREIT and Adjusted FFO
per diluted share |
|
|
1.63 |
|
|
|
1.67 |
|
Adjusted EBITDA |
|
|
1,435 |
|
|
|
1,465 |
|
|
|
|
|
|
|
|
|
|
See the 2016 Forecast Schedules and the Notes to
Financial Information for other assumptions used in the forecasts
and items that may affect forecast results.
ABOUT HOST HOTELS & RESORTS
Host Hotels & Resorts, Inc. is an
S&P 500 and Fortune 500 company and is the largest lodging real
estate investment trust and one of the largest owners of luxury and
upper-upscale hotels. The Company currently owns 89 properties
in the United States and 9 properties internationally totaling
approximately 54,500 rooms. The Company also holds non-controlling
interests in six joint ventures, including one in Europe that owns
10 hotels with approximately 3,900 rooms and one in Asia that has
interests in five hotels in India. Guided by a disciplined approach
to capital allocation and aggressive asset management, the Company
partners with premium brands such as Marriott®, Ritz-Carlton®,
Westin®, Sheraton®, W®, St. Regis®, Le Méridien®, The Luxury
Collection®, Hyatt®, Fairmont®, Hilton®, Swissôtel®, ibis®,
Pullman®, and Novotel® as well as independent brands in the
operation of properties in over 50 major markets worldwide. For
additional information, please visit the Company’s website at
www.hosthotels.com.
Note: This press release contains
forward-looking statements within the meaning of federal securities
regulations. These forward-looking statements include forecast
results and are identified by their use of terms and phrases such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “should,” “plan,” “predict,” “project,” “will,”
“continue” and other similar terms and phrases, including
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 which 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: changes in
national and local economic and business conditions and other
factors such as natural disasters, pandemics and weather that will
affect occupancy rates at our hotels and the demand for hotel
products and services; the impact of geopolitical developments
outside the U.S. on lodging demand; volatility in global financial
and credit markets; operating risks associated with the hotel
business; risks and limitations in our operating flexibility
associated with the level of our indebtedness and our ability to
meet covenants in our debt agreements; risks associated with our
relationships with property managers and joint venture partners;
our ability to maintain our properties in a first-class manner,
including meeting capital expenditure requirements; the effects of
hotel renovations on our hotel occupancy and financial results; our
ability to compete effectively in areas such as access, location,
quality of accommodations and room rate structures; risks
associated with our ability to complete acquisitions and
dispositions and develop new properties and the risks that
acquisitions and new developments may not perform in accordance
with our expectations; our ability to continue to satisfy complex
rules in order for us to remain a REIT for federal income tax
purposes; risks associated with our ability to effectuate our
dividend policy, including factors such as operating results and
the economic outlook influencing our board’s decision whether to
pay further dividends at levels previously disclosed or to use
available cash to make special dividends; and other risks and
uncertainties associated with our business described in the
Company’s annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K filed with the SEC. 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 information in this
release is as of July 29, 2016, 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 press
release contains registered trademarks that are the exclusive
property of their respective owners. None of the owners of these
trademarks has any responsibility or liability for any information
contained in this press release.
*** Tables to Follow ***
Host Hotels & Resorts, Inc., herein
referred to as “we” or “Host Inc.,” is a self-managed and
self-administered real estate investment trust (“REIT”) that owns
hotel properties. We conduct our operations as an umbrella
partnership REIT through an operating partnership, Host
Hotels & Resorts, L.P. (“Host LP”), of which we are the
sole general partner. When distinguishing between Host Inc. and
Host LP, the primary difference is approximately 1% of the
partnership interests in Host LP held by outside partners as of
June 30, 2016, which is non-controlling interests in Host LP
in our consolidated balance sheets and is included in net income
attributable to non-controlling interests in our consolidated
statements of operations. Readers are encouraged to find further
detail regarding our organizational structure in our annual report
on Form 10-K.
HOST
HOTELS & RESORTS, INC. |
Condensed
Consolidated Balance Sheets (1) |
(in millions, except
shares and per share amounts) |
|
|
|
June 30, 2016 |
|
|
December 31, 2015 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
Property and equipment, net |
|
$ |
10,452 |
|
|
$ |
10,583 |
|
Assets held for sale |
|
|
35 |
|
|
|
55 |
|
Due from managers |
|
|
114 |
|
|
|
56 |
|
Advances to and investments in affiliates |
|
|
311 |
|
|
|
324 |
|
Furniture, fixtures and equipment replacement
fund |
|
|
173 |
|
|
|
141 |
|
Other |
|
|
238 |
|
|
|
261 |
|
Restricted cash |
|
|
3 |
|
|
|
15 |
|
Cash and cash equivalents |
|
|
266 |
|
|
|
221 |
|
Total assets |
|
$ |
11,592 |
|
|
$ |
11,656 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
NON-CONTROLLING INTERESTS AND EQUITY |
|
Debt |
|
|
|
|
|
|
|
|
Senior notes |
|
$ |
2,378 |
|
|
$ |
2,376 |
|
Credit facility, including the term
loans of $997 million and $996 million, respectively |
|
|
1,255 |
|
|
|
1,291 |
|
Mortgage debt |
|
|
82 |
|
|
|
200 |
|
Total debt |
|
|
3,715 |
|
|
|
3,867 |
|
Accounts payable and accrued expenses |
|
|
228 |
|
|
|
243 |
|
Liabilities held for sale |
|
|
4 |
|
|
|
— |
|
Other |
|
|
284 |
|
|
|
299 |
|
Total liabilities |
|
|
4,231 |
|
|
|
4,409 |
|
|
|
|
|
|
|
|
|
|
Non-controlling interests - Host
Hotels & Resorts, L.P. |
|
|
147 |
|
|
|
143 |
|
|
|
|
|
|
|
|
|
|
Host Hotels & Resorts, Inc. stockholders’
equity: |
|
|
|
|
|
|
|
|
Common stock, par value $.01, 1,050
million shares authorized, 740.7 million shares and 750.3
million shares issued and outstanding, respectively |
|
|
7 |
|
|
|
8 |
|
Additional paid-in capital |
|
|
8,146 |
|
|
|
8,302 |
|
Accumulated other comprehensive
loss |
|
|
(71 |
) |
|
|
(107 |
) |
Deficit |
|
|
(907 |
) |
|
|
(1,139 |
) |
Total equity of Host Hotels &
Resorts, Inc. stockholders |
|
|
7,175 |
|
|
|
7,064 |
|
Non-controlling interests—other consolidated
partnerships |
|
|
39 |
|
|
|
40 |
|
Total equity |
|
|
7,214 |
|
|
|
7,104 |
|
Total liabilities, non-controlling
interests and equity |
|
$ |
11,592 |
|
|
$ |
11,656 |
|
|
|
|
|
|
|
|
|
|
___________
(1) Our condensed consolidated balance sheet as of
June 30, 2016 has been prepared without audit. Certain
information and footnote disclosures normally included in financial
statements presented in accordance with GAAP have been omitted.
HOST HOTELS
& RESORTS, INC. |
Condensed
Consolidated Statements of Operations (1) |
(unaudited, in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
933 |
|
|
$ |
937 |
|
|
$ |
1,776 |
|
|
$ |
1,755 |
|
Food and beverage |
|
|
439 |
|
|
|
420 |
|
|
|
847 |
|
|
|
823 |
|
Other |
|
|
87 |
|
|
|
82 |
|
|
|
175 |
|
|
|
163 |
|
Total revenues |
|
|
1,459 |
|
|
|
1,439 |
|
|
|
2,798 |
|
|
|
2,741 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
228 |
|
|
|
233 |
|
|
|
449 |
|
|
|
453 |
|
Food and beverage |
|
|
289 |
|
|
|
289 |
|
|
|
573 |
|
|
|
572 |
|
Other departmental and support
expenses |
|
|
332 |
|
|
|
330 |
|
|
|
660 |
|
|
|
651 |
|
Management fees |
|
|
66 |
|
|
|
68 |
|
|
|
123 |
|
|
|
120 |
|
Other property-level expenses |
|
|
100 |
|
|
|
96 |
|
|
|
193 |
|
|
|
192 |
|
Depreciation and amortization |
|
|
178 |
|
|
|
178 |
|
|
|
359 |
|
|
|
351 |
|
Corporate and other
expenses(2) |
|
|
27 |
|
|
|
23 |
|
|
|
54 |
|
|
|
47 |
|
Gain on insurance settlements |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
Total operating costs and
expenses |
|
|
1,220 |
|
|
|
1,217 |
|
|
|
2,408 |
|
|
|
2,386 |
|
Operating profit |
|
|
239 |
|
|
|
222 |
|
|
|
390 |
|
|
|
355 |
|
Interest income |
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
Interest expense |
|
|
(39 |
) |
|
|
(72 |
) |
|
|
(78 |
) |
|
|
(121 |
) |
Gain on sale of assets |
|
|
172 |
|
|
|
53 |
|
|
|
231 |
|
|
|
57 |
|
Gain (loss) on foreign currency transactions
and derivatives |
|
|
2 |
|
|
|
(1 |
) |
|
|
3 |
|
|
|
(2 |
) |
Equity in earnings of affiliates |
|
|
9 |
|
|
|
24 |
|
|
|
11 |
|
|
|
26 |
|
Income before income taxes |
|
|
383 |
|
|
|
227 |
|
|
|
558 |
|
|
|
317 |
|
Provision for income taxes |
|
|
(32 |
) |
|
|
(13 |
) |
|
|
(23 |
) |
|
|
(4 |
) |
Net income |
|
|
351 |
|
|
|
214 |
|
|
|
535 |
|
|
|
313 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
Net income attributable to Host
Inc. |
|
$ |
347 |
|
|
$ |
212 |
|
|
$ |
529 |
|
|
$ |
310 |
|
Basic and diluted
earnings per common share |
|
$ |
.47 |
|
|
$ |
.28 |
|
|
$ |
.71 |
|
|
$ |
.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Our condensed consolidated
statements of operations presented above have been prepared without
audit. Certain information and footnote disclosures normally
included in financial statements presented in accordance with GAAP
have been
omitted.
(2) Corporate and other
expenses include the following items:
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
General and
administrative costs |
|
$ |
24 |
|
|
$ |
18 |
|
|
$ |
48 |
|
|
$ |
43 |
|
Non-cash stock-based
compensation expense |
|
|
3 |
|
|
|
3 |
|
|
|
6 |
|
|
|
8 |
|
Litigation
(recoveries)/accruals and acquisition costs, net |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
(4 |
) |
Total |
|
$ |
27 |
|
|
$ |
23 |
|
|
$ |
54 |
|
|
$ |
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS
& RESORTS, INC. |
Earnings per
Common Share |
(unaudited, in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Net income |
|
$ |
351 |
|
|
$ |
214 |
|
|
$ |
535 |
|
|
$ |
313 |
|
Less: Net income attributable to
non-controlling interests |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
Net income attributable to Host Inc. |
|
|
347 |
|
|
|
212 |
|
|
|
529 |
|
|
|
310 |
|
Assuming conversion of exchangeable
senior debentures |
|
|
— |
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
Diluted income attributable to Host Inc. |
|
$ |
347 |
|
|
$ |
219 |
|
|
$ |
529 |
|
|
$ |
310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
744.0 |
|
|
|
753.9 |
|
|
|
746.8 |
|
|
|
755.0 |
|
Assuming weighted average shares
for conversion of exchangeable senior debentures |
|
|
— |
|
|
|
31.2 |
|
|
|
— |
|
|
|
— |
|
Assuming distribution of common
shares granted under the comprehensive stock plans, less
shares assumed purchased at market |
|
|
.3 |
|
|
|
.4 |
|
|
|
.3 |
|
|
|
.4 |
|
Diluted weighted average shares outstanding
(1) |
|
|
744.3 |
|
|
|
785.5 |
|
|
|
747.1 |
|
|
|
755.4 |
|
Basic and diluted earnings per common share |
|
$ |
.47 |
|
|
$ |
.28 |
|
|
$ |
.71 |
|
|
$ |
.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) Dilutive securities may include
shares granted under comprehensive stock plans, preferred operating
partnership units (“OP Units”) held by minority partners,
exchangeable debt securities and other non-controlling interests
that have the option to convert their limited partnership interests
to common OP Units. No effect is shown for any securities that were
anti-dilutive for the period.
HOST HOTELS
& RESORTS, INC. |
Hotel Operating
Data for Consolidated Hotels (1) |
|
Comparable Hotels by Market
in Constant US$ |
|
|
As of June 30, 2016 |
|
|
Quarter ended June 30, 2016 |
|
|
Quarter ended June 30, 2015 |
|
|
|
|
|
Market (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
$ |
257.23 |
|
|
|
86.7 |
% |
|
$ |
223.10 |
|
|
$ |
251.78 |
|
|
|
84.4 |
% |
|
$ |
212.53 |
|
|
|
5.0 |
% |
New York |
|
|
8 |
|
|
|
6,960 |
|
|
|
286.61 |
|
|
|
89.8 |
|
|
|
257.49 |
|
|
|
301.13 |
|
|
|
89.9 |
|
|
|
270.85 |
|
|
|
(4.9 |
) |
Washington, D.C. |
|
|
12 |
|
|
|
6,023 |
|
|
|
235.21 |
|
|
|
86.9 |
|
|
|
204.51 |
|
|
|
228.63 |
|
|
|
84.8 |
|
|
|
193.86 |
|
|
|
5.5 |
|
Atlanta |
|
|
5 |
|
|
|
1,939 |
|
|
|
191.43 |
|
|
|
81.4 |
|
|
|
155.73 |
|
|
|
185.44 |
|
|
|
78.8 |
|
|
|
146.07 |
|
|
|
6.6 |
|
Florida |
|
|
8 |
|
|
|
4,559 |
|
|
|
221.10 |
|
|
|
75.9 |
|
|
|
167.90 |
|
|
|
220.24 |
|
|
|
78.0 |
|
|
|
171.71 |
|
|
|
(2.2 |
) |
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
224.61 |
|
|
|
84.8 |
|
|
|
190.52 |
|
|
|
226.15 |
|
|
|
82.4 |
|
|
|
186.30 |
|
|
|
2.3 |
|
Denver |
|
|
2 |
|
|
|
735 |
|
|
|
185.98 |
|
|
|
78.2 |
|
|
|
145.42 |
|
|
|
179.81 |
|
|
|
75.4 |
|
|
|
135.57 |
|
|
|
7.3 |
|
Houston |
|
|
3 |
|
|
|
1,143 |
|
|
|
210.35 |
|
|
|
74.7 |
|
|
|
157.17 |
|
|
|
211.55 |
|
|
|
73.7 |
|
|
|
155.86 |
|
|
|
0.8 |
|
Phoenix |
|
|
3 |
|
|
|
1,241 |
|
|
|
199.51 |
|
|
|
72.9 |
|
|
|
145.36 |
|
|
|
196.11 |
|
|
|
72.2 |
|
|
|
141.64 |
|
|
|
2.6 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
224.86 |
|
|
|
84.4 |
|
|
|
189.84 |
|
|
|
225.39 |
|
|
|
84.4 |
|
|
|
190.33 |
|
|
|
(0.3 |
) |
San Francisco |
|
|
4 |
|
|
|
2,912 |
|
|
|
256.22 |
|
|
|
87.0 |
|
|
|
222.92 |
|
|
|
248.95 |
|
|
|
87.1 |
|
|
|
216.87 |
|
|
|
2.8 |
|
Los Angeles |
|
|
7 |
|
|
|
2,843 |
|
|
|
199.62 |
|
|
|
84.2 |
|
|
|
168.10 |
|
|
|
189.88 |
|
|
|
81.2 |
|
|
|
154.11 |
|
|
|
9.1 |
|
San Diego |
|
|
3 |
|
|
|
2,981 |
|
|
|
212.54 |
|
|
|
85.3 |
|
|
|
181.33 |
|
|
|
205.24 |
|
|
|
88.2 |
|
|
|
181.12 |
|
|
|
0.1 |
|
Hawaii |
|
|
3 |
|
|
|
1,682 |
|
|
|
306.58 |
|
|
|
91.3 |
|
|
|
279.80 |
|
|
|
305.49 |
|
|
|
89.6 |
|
|
|
273.85 |
|
|
|
2.2 |
|
Other |
|
|
11 |
|
|
|
7,270 |
|
|
|
182.11 |
|
|
|
75.1 |
|
|
|
136.74 |
|
|
|
176.47 |
|
|
|
71.2 |
|
|
|
125.73 |
|
|
|
8.8 |
|
Domestic |
|
|
81 |
|
|
|
47,180 |
|
|
|
232.14 |
|
|
|
83.1 |
|
|
|
193.02 |
|
|
|
230.87 |
|
|
|
82.0 |
|
|
|
189.24 |
|
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific |
|
|
3 |
|
|
|
685 |
|
|
$ |
158.52 |
|
|
|
80.3 |
% |
|
$ |
127.34 |
|
|
$ |
160.02 |
|
|
|
78.5 |
% |
|
$ |
125.58 |
|
|
|
1.4 |
% |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
171.79 |
|
|
|
64.1 |
|
|
|
110.12 |
|
|
|
180.57 |
|
|
|
61.1 |
|
|
|
110.31 |
|
|
|
(0.2 |
) |
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
185.97 |
|
|
|
64.7 |
|
|
|
120.30 |
|
|
|
177.30 |
|
|
|
64.6 |
|
|
|
114.56 |
|
|
|
5.0 |
|
International |
|
|
9 |
|
|
|
2,497 |
|
|
|
172.55 |
|
|
|
68.9 |
|
|
|
118.84 |
|
|
|
172.66 |
|
|
|
67.3 |
|
|
|
116.22 |
|
|
|
2.3 |
|
All Markets - Constant
US$ |
|
|
90 |
|
|
|
49,677 |
|
|
|
229.62 |
|
|
|
82.4 |
|
|
|
189.26 |
|
|
|
228.42 |
|
|
|
81.2 |
|
|
|
185.54 |
|
|
|
2.0 |
|
All Owned Hotels in Constant US$ (3) |
|
|
As of June 30, 2016 |
|
|
Quarter ended June 30, 2016 |
|
|
Quarter ended June 30, 2015 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
90 |
|
|
|
49,677 |
|
|
$ |
229.62 |
|
|
|
82.4 |
% |
|
$ |
189.26 |
|
|
$ |
228.42 |
|
|
|
81.2 |
% |
|
$ |
185.54 |
|
|
|
2.0 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
8 |
|
|
|
4,790 |
|
|
|
218.29 |
|
|
|
68.0 |
|
|
|
148.41 |
|
|
|
214.26 |
|
|
|
70.5 |
|
|
|
151.14 |
|
|
|
(1.8 |
) |
All Hotels |
|
|
98 |
|
|
|
54,467 |
|
|
|
228.78 |
|
|
|
81.2 |
|
|
|
185.67 |
|
|
|
227.33 |
|
|
|
80.3 |
|
|
|
182.52 |
|
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Hotels in Nominal
US$ |
|
|
As of June 30, 2016 |
|
|
Quarter ended June 30, 2016 |
|
|
Quarter ended June 30, 2015 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Asia-Pacific |
|
|
3 |
|
|
|
685 |
|
|
$ |
158.52 |
|
|
|
80.3 |
% |
|
$ |
127.34 |
|
|
$ |
167.85 |
|
|
|
78.5 |
% |
|
$ |
131.72 |
|
|
|
(3.3 |
)% |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
171.79 |
|
|
|
64.1 |
|
|
|
110.12 |
|
|
|
189.33 |
|
|
|
61.1 |
|
|
|
115.66 |
|
|
|
(4.8 |
) |
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
185.97 |
|
|
|
64.7 |
|
|
|
120.30 |
|
|
|
205.61 |
|
|
|
64.6 |
|
|
|
132.86 |
|
|
|
(9.4 |
) |
International |
|
|
9 |
|
|
|
2,497 |
|
|
|
172.55 |
|
|
|
68.9 |
|
|
|
118.84 |
|
|
|
188.30 |
|
|
|
67.3 |
|
|
|
126.75 |
|
|
|
(6.2 |
) |
Domestic |
|
|
81 |
|
|
|
47,180 |
|
|
|
232.14 |
|
|
|
83.1 |
|
|
|
193.02 |
|
|
|
230.87 |
|
|
|
82.0 |
|
|
|
189.24 |
|
|
|
2.0 |
|
All Markets |
|
|
90 |
|
|
|
49,677 |
|
|
|
229.62 |
|
|
|
82.4 |
|
|
|
189.26 |
|
|
|
229.08 |
|
|
|
81.2 |
|
|
|
186.07 |
|
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Hotels by Type in
Nominal US$ |
|
|
As of June 30, 2016 |
|
|
Quarter ended June 30, 2016 |
|
|
Quarter ended June 30, 2015 |
|
|
|
|
|
Property type (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Urban |
|
|
54 |
|
|
|
32,956 |
|
|
$ |
236.66 |
|
|
|
84.5 |
% |
|
$ |
200.00 |
|
|
$ |
237.53 |
|
|
|
83.3 |
% |
|
$ |
197.88 |
|
|
|
1.1 |
% |
Suburban |
|
|
19 |
|
|
|
6,947 |
|
|
|
193.44 |
|
|
|
78.5 |
|
|
|
151.85 |
|
|
|
187.13 |
|
|
|
76.0 |
|
|
|
142.24 |
|
|
|
6.8 |
|
Resort |
|
|
11 |
|
|
|
7,102 |
|
|
|
261.21 |
|
|
|
73.8 |
|
|
|
192.65 |
|
|
|
257.39 |
|
|
|
75.6 |
|
|
|
194.48 |
|
|
|
(0.9 |
) |
Airport |
|
|
6 |
|
|
|
2,672 |
|
|
|
161.17 |
|
|
|
89.9 |
|
|
|
144.89 |
|
|
|
156.90 |
|
|
|
84.1 |
|
|
|
132.01 |
|
|
|
9.8 |
|
All Types |
|
|
90 |
|
|
|
49,677 |
|
|
|
229.62 |
|
|
|
82.4 |
|
|
|
189.26 |
|
|
|
229.08 |
|
|
|
81.2 |
|
|
|
186.07 |
|
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS
& RESORTS, INC. |
Hotel Operating
Data for Consolidated Hotels (1) (cont.) |
|
Comparable Hotels by Market
in Constant US$ |
|
|
As of June 30, 2016 |
|
|
Year-to-date ended June 30, 2016 |
|
|
Year-to-date ended June 30, 2015 |
|
|
|
|
|
Market (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
$ |
225.61 |
|
|
|
77.9 |
% |
|
$ |
175.80 |
|
|
$ |
225.03 |
|
|
|
76.4 |
% |
|
$ |
171.96 |
|
|
|
2.2 |
% |
New York |
|
|
8 |
|
|
|
6,960 |
|
|
|
262.20 |
|
|
|
84.7 |
|
|
|
222.17 |
|
|
|
276.26 |
|
|
|
82.7 |
|
|
|
228.53 |
|
|
|
(2.8 |
) |
Washington, D.C. |
|
|
12 |
|
|
|
6,023 |
|
|
|
222.39 |
|
|
|
78.8 |
|
|
|
175.16 |
|
|
|
218.44 |
|
|
|
75.6 |
|
|
|
165.07 |
|
|
|
6.1 |
|
Atlanta |
|
|
5 |
|
|
|
1,939 |
|
|
|
193.70 |
|
|
|
78.9 |
|
|
|
152.83 |
|
|
|
187.37 |
|
|
|
76.7 |
|
|
|
143.80 |
|
|
|
6.3 |
|
Florida |
|
|
8 |
|
|
|
4,559 |
|
|
|
251.99 |
|
|
|
79.3 |
|
|
|
199.95 |
|
|
|
249.97 |
|
|
|
80.5 |
|
|
|
201.19 |
|
|
|
(0.6 |
) |
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
192.82 |
|
|
|
72.8 |
|
|
|
140.32 |
|
|
|
196.85 |
|
|
|
70.3 |
|
|
|
138.38 |
|
|
|
1.4 |
|
Denver |
|
|
2 |
|
|
|
735 |
|
|
|
176.50 |
|
|
|
71.2 |
|
|
|
125.69 |
|
|
|
173.76 |
|
|
|
70.4 |
|
|
|
122.36 |
|
|
|
2.7 |
|
Houston |
|
|
3 |
|
|
|
1,143 |
|
|
|
209.19 |
|
|
|
74.3 |
|
|
|
155.41 |
|
|
|
215.26 |
|
|
|
71.2 |
|
|
|
153.33 |
|
|
|
1.4 |
|
Phoenix |
|
|
3 |
|
|
|
1,241 |
|
|
|
244.60 |
|
|
|
77.6 |
|
|
|
189.79 |
|
|
|
243.17 |
|
|
|
77.2 |
|
|
|
187.77 |
|
|
|
1.1 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
207.14 |
|
|
|
77.3 |
|
|
|
160.04 |
|
|
|
202.33 |
|
|
|
78.9 |
|
|
|
159.63 |
|
|
|
0.3 |
|
San Francisco |
|
|
4 |
|
|
|
2,912 |
|
|
|
270.86 |
|
|
|
83.6 |
|
|
|
226.32 |
|
|
|
251.59 |
|
|
|
83.7 |
|
|
|
210.55 |
|
|
|
7.5 |
|
Los Angeles |
|
|
7 |
|
|
|
2,843 |
|
|
|
201.18 |
|
|
|
83.3 |
|
|
|
167.69 |
|
|
|
188.37 |
|
|
|
80.7 |
|
|
|
151.93 |
|
|
|
10.4 |
|
San Diego |
|
|
3 |
|
|
|
2,981 |
|
|
|
208.91 |
|
|
|
83.3 |
|
|
|
174.11 |
|
|
|
205.84 |
|
|
|
84.9 |
|
|
|
174.73 |
|
|
|
(0.4 |
) |
Hawaii |
|
|
3 |
|
|
|
1,682 |
|
|
|
331.22 |
|
|
|
90.9 |
|
|
|
301.22 |
|
|
|
328.58 |
|
|
|
89.9 |
|
|
|
295.40 |
|
|
|
2.0 |
|
Other |
|
|
11 |
|
|
|
7,270 |
|
|
|
182.12 |
|
|
|
73.4 |
|
|
|
133.62 |
|
|
|
178.37 |
|
|
|
70.1 |
|
|
|
125.02 |
|
|
|
6.9 |
|
Domestic |
|
|
81 |
|
|
|
47,180 |
|
|
|
228.02 |
|
|
|
79.5 |
|
|
|
181.30 |
|
|
|
226.73 |
|
|
|
78.0 |
|
|
|
176.74 |
|
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific |
|
|
3 |
|
|
|
685 |
|
|
$ |
165.18 |
|
|
|
84.7 |
% |
|
$ |
139.93 |
|
|
$ |
165.34 |
|
|
|
82.9 |
% |
|
$ |
137.03 |
|
|
|
2.1 |
% |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
163.04 |
|
|
|
57.4 |
|
|
|
93.60 |
|
|
|
168.76 |
|
|
|
55.2 |
|
|
|
93.17 |
|
|
|
0.5 |
|
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
188.38 |
|
|
|
65.7 |
|
|
|
123.82 |
|
|
|
184.02 |
|
|
|
59.5 |
|
|
|
109.46 |
|
|
|
13.1 |
|
International |
|
|
9 |
|
|
|
2,497 |
|
|
|
173.12 |
|
|
|
68.2 |
|
|
|
118.14 |
|
|
|
172.92 |
|
|
|
64.6 |
|
|
|
111.71 |
|
|
|
5.8 |
|
All Markets - Constant
US$ |
|
|
90 |
|
|
|
49,677 |
|
|
|
225.61 |
|
|
|
78.9 |
|
|
|
178.10 |
|
|
|
224.45 |
|
|
|
77.3 |
|
|
|
173.44 |
|
|
|
2.7 |
|
All Owned Hotels in Constant
US$ (3) |
|
|
As of June 30, 2016 |
|
|
Year-to-date ended June 30, 2016 |
|
|
Year-to-date ended June 30, 2015 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
90 |
|
|
|
49,677 |
|
|
$ |
225.61 |
|
|
|
78.9 |
% |
|
$ |
178.10 |
|
|
$ |
224.45 |
|
|
|
77.3 |
% |
|
$ |
173.44 |
|
|
|
2.7 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
8 |
|
|
|
4,790 |
|
|
|
227.55 |
|
|
|
66.7 |
|
|
|
151.77 |
|
|
|
226.74 |
|
|
|
71.5 |
|
|
|
162.01 |
|
|
|
(6.3 |
) |
All Hotels |
|
|
98 |
|
|
|
54,467 |
|
|
|
225.76 |
|
|
|
77.9 |
|
|
|
175.79 |
|
|
|
224.64 |
|
|
|
76.8 |
|
|
|
172.44 |
|
|
|
1.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Hotels in Nominal
US$ |
|
|
As of June 30, 2016 |
|
|
Year-to-date ended June 30, 2016 |
|
|
Year-to-date ended June 30, 2015 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Asia-Pacific |
|
|
3 |
|
|
|
685 |
|
|
$ |
165.18 |
|
|
|
84.7 |
% |
|
$ |
139.93 |
|
|
$ |
177.58 |
|
|
|
82.9 |
% |
|
$ |
147.17 |
|
|
|
(4.9 |
)% |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
163.04 |
|
|
|
57.4 |
|
|
|
93.60 |
|
|
|
180.55 |
|
|
|
55.2 |
|
|
|
99.69 |
|
|
|
(6.1 |
) |
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
188.38 |
|
|
|
65.7 |
|
|
|
123.82 |
|
|
|
223.12 |
|
|
|
59.5 |
|
|
|
132.71 |
|
|
|
(6.7 |
) |
International |
|
|
9 |
|
|
|
2,497 |
|
|
|
173.12 |
|
|
|
68.2 |
|
|
|
118.14 |
|
|
|
194.51 |
|
|
|
64.6 |
|
|
|
125.65 |
|
|
|
(6.0 |
) |
Domestic |
|
|
81 |
|
|
|
47,180 |
|
|
|
228.02 |
|
|
|
79.5 |
|
|
|
181.30 |
|
|
|
226.73 |
|
|
|
78.0 |
|
|
|
176.74 |
|
|
|
2.6 |
|
All Markets |
|
|
90 |
|
|
|
49,677 |
|
|
|
225.61 |
|
|
|
78.9 |
|
|
|
178.10 |
|
|
|
225.37 |
|
|
|
77.3 |
|
|
|
174.15 |
|
|
|
2.3 |
|
Comparable Hotels by Type in
Nominal US$ |
|
|
As of June 30, 2016 |
|
|
Year-to-date ended June 30, 2016 |
|
|
Year-to-date ended June 30, 2015 |
|
|
|
|
|
Property type (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Urban |
|
|
54 |
|
|
|
32,956 |
|
|
$ |
223.94 |
|
|
|
79.8 |
% |
|
$ |
178.70 |
|
|
$ |
225.55 |
|
|
|
77.7 |
% |
|
$ |
175.29 |
|
|
|
1.9 |
% |
Suburban |
|
|
19 |
|
|
|
6,947 |
|
|
|
198.60 |
|
|
|
74.0 |
|
|
|
146.99 |
|
|
|
192.01 |
|
|
|
72.3 |
|
|
|
138.76 |
|
|
|
5.9 |
|
Resort |
|
|
11 |
|
|
|
7,102 |
|
|
|
286.78 |
|
|
|
77.2 |
|
|
|
221.34 |
|
|
|
281.91 |
|
|
|
78.6 |
|
|
|
221.71 |
|
|
|
(0.2 |
) |
Airport |
|
|
6 |
|
|
|
2,672 |
|
|
|
159.16 |
|
|
|
85.8 |
|
|
|
136.59 |
|
|
|
154.82 |
|
|
|
81.2 |
|
|
|
125.69 |
|
|
|
8.7 |
|
All Types |
|
|
90 |
|
|
|
49,677 |
|
|
|
225.61 |
|
|
|
78.9 |
|
|
|
178.10 |
|
|
|
225.37 |
|
|
|
77.3 |
|
|
|
174.15 |
|
|
|
2.3 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Notes to Financial Information for a
discussion of comparable hotel operating statistics and constant
US$ presentation. Nominal US$ results include the effect of
currency fluctuations, consistent with our financial statement
presentation.(2) See the Notes to Financial
Information for a description of these markets and property
types.(3) Operating statistics are presented for all
consolidated properties owned as of June 30, 2016 and do not
include the results of operations for properties sold in 2016 or
2015. Additionally, all owned hotel operating statistics include
hotels that we did not own for the entirety of the periods
presented and properties that are undergoing large-scale capital
projects during the periods presented and, therefore, are not
considered comparable hotel information upon which we usually
evaluate our performance. Specifically, comparable RevPAR is
calculated as revenues divided by the available room nights, which
will rarely vary on a year-over-year basis. Conversely, the
available room nights included in the non-comparable RevPAR
statistic will vary widely based on the timing of hotel closings,
the scope of a capital project, or the development of a new
property. As a result, the RevPAR increase of 1.7% and 1.9% for the
quarter and year-to-date periods, respectively, for the 98 hotels
owned as of June 30, 2016 is non-comparable because the
available room nights are not consistent and certain of these
properties had little or no revenues during those periods. See the
Notes to Financial Information for further information on these pro
forma statistics and the limitations on their use. The following
hotels are considered non-comparable for the periods presented:
- Non-comparable hotels - This represents seven hotels under
significant renovations in either 2015 or 2016: The Camby Hotel,
The Logan, Axiom Hotel, the Houston Airport Marriott at George Bush
Intercontinental, the Hyatt Regency San Francisco Airport, the
Denver Marriott Tech Center, and the Marriott Marquis San Diego
Marina. It also includes The Phoenician, acquired in June 2015,
which we were able to obtain historical operating data for periods
prior to our ownership, which are presented on a pro forma basis
assuming we owned the hotel as of January 1, 2015. As a result, the
RevPAR decrease of 1.8% and 6.3% for the quarter and year-to-date,
respectively, for these eight hotels is considered
non-comparable.
HOST
HOTELS & RESORTS, INC. |
Hotel Operating
Data – European Joint Venture |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2016 |
|
|
Quarter ended June 30, 2016 |
|
|
Quarter ended June 30, 2015 |
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Total comparable
- in Constant Euros (1) |
|
10 |
|
|
|
3,896 |
|
|
€ |
231.33 |
|
|
|
80.3 |
% |
|
€ |
185.86 |
|
|
€ |
221.71 |
|
|
|
84.9 |
% |
|
€ |
188.28 |
|
|
|
(1.3 |
)% |
Total comparable
- in Nominal Euros (1) |
|
10 |
|
|
|
3,896 |
|
|
|
231.33 |
|
|
|
80.3 |
|
|
|
185.86 |
|
|
|
223.72 |
|
|
|
84.9 |
|
|
|
189.98 |
|
|
|
(2.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2016 |
|
|
Year-to-date ended June 30, 2016 |
|
|
Year-to-date ended June 30, 2015 |
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Total comparable
- in Constant Euros (1) |
|
10 |
|
|
|
3,896 |
|
|
€ |
214.22 |
|
|
|
72.0 |
% |
|
€ |
154.13 |
|
|
€ |
206.24 |
|
|
|
76.3 |
% |
|
€ |
157.45 |
|
|
|
(2.1 |
)% |
Total comparable
- in Nominal Euros (1) |
|
10 |
|
|
|
3,896 |
|
|
|
214.22 |
|
|
|
72.0 |
|
|
|
154.13 |
|
|
|
207.76 |
|
|
|
76.3 |
|
|
|
158.61 |
|
|
|
(2.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) Total comparable
statistics include the operating performance for the 10 properties
in the joint venture with comparable results (determined on the
same basis as our consolidated comparable hotel portfolio). See
Notes to Financial Information for a discussion of the constant
Euro and nominal Euro presentation.
HOST
HOTELS & RESORTS, INC. |
Schedule of
Comparable Hotel Results (1) |
(unaudited, in
millions, except hotel statistics) |
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Number of hotels |
|
|
90 |
|
|
|
90 |
|
|
|
90 |
|
|
|
90 |
|
Number of rooms |
|
|
49,677 |
|
|
|
49,677 |
|
|
|
49,677 |
|
|
|
49,677 |
|
Change in comparable
hotel RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant US$ |
|
|
2.0 |
% |
|
|
— |
|
|
|
2.7 |
% |
|
|
— |
|
Nominal US$ |
|
|
1.7 |
% |
|
|
— |
|
|
|
2.3 |
% |
|
|
— |
|
Operating profit margin
(2) |
|
|
16.4 |
% |
|
|
15.4 |
% |
|
|
13.9 |
% |
|
|
13.0 |
% |
Comparable hotel EBITDA
margin (2) |
|
|
30.7 |
% |
|
|
30.05 |
% |
|
|
28.65 |
% |
|
|
27.9 |
% |
Comparable hotel
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
856 |
|
|
$ |
841 |
|
|
$ |
1,611 |
|
|
$ |
1,565 |
|
Food and beverage (3) |
|
|
395 |
|
|
|
378 |
|
|
|
759 |
|
|
|
739 |
|
Other |
|
|
72 |
|
|
|
69 |
|
|
|
143 |
|
|
|
137 |
|
Comparable hotel revenues (4) |
|
|
1,323 |
|
|
|
1,288 |
|
|
|
2,513 |
|
|
|
2,441 |
|
Comparable hotel
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
209 |
|
|
|
207 |
|
|
|
408 |
|
|
|
402 |
|
Food and beverage (5) |
|
|
260 |
|
|
|
256 |
|
|
|
512 |
|
|
|
507 |
|
Other |
|
|
25 |
|
|
|
31 |
|
|
|
51 |
|
|
|
62 |
|
Management fees, ground rent and
other costs |
|
|
423 |
|
|
|
407 |
|
|
|
822 |
|
|
|
789 |
|
Comparable hotel expenses (6) |
|
|
917 |
|
|
|
901 |
|
|
|
1,793 |
|
|
|
1,760 |
|
Comparable
hotel EBITDA |
|
|
406 |
|
|
|
387 |
|
|
|
720 |
|
|
|
681 |
|
Non-comparable hotel
results, net (7) |
|
|
38 |
|
|
|
36 |
|
|
|
83 |
|
|
|
72 |
|
Depreciation and amortization |
|
|
(178 |
) |
|
|
(178 |
) |
|
|
(359 |
) |
|
|
(351 |
) |
Interest expense |
|
|
(39 |
) |
|
|
(72 |
) |
|
|
(78 |
) |
|
|
(121 |
) |
Provision for income taxes |
|
|
(32 |
) |
|
|
(13 |
) |
|
|
(23 |
) |
|
|
(4 |
) |
Gain on sale of property and corporate
level income/expense |
|
|
156 |
|
|
|
54 |
|
|
|
192 |
|
|
|
36 |
|
Net income |
|
$ |
351 |
|
|
$ |
214 |
|
|
$ |
535 |
|
|
$ |
313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) See the Notes to Financial
Information for a discussion of non-GAAP measures and the
calculation of comparable hotel results. For additional information
on comparable hotel EBITDA by market, see the supplemental
information posted on our website.(2) Operating profit
margins are calculated by dividing the applicable operating profit
by the related revenue amount. GAAP operating profit margins are
calculated using amounts presented in the consolidated statements
of operations. Comparable hotel EBITDA margins are calculated using
amounts presented in the above table. (3) The
reconciliation of total food and beverage sales per the
consolidated statements of operations to the comparable food and
beverage sales is as follows:
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Food and beverage sales
per the consolidated statements of operations |
|
$ |
439 |
|
|
$ |
420 |
|
|
$ |
847 |
|
|
$ |
823 |
|
Non-comparable hotel
food and beverage sales |
|
|
(44 |
) |
|
|
(42 |
) |
|
|
(88 |
) |
|
|
(84 |
) |
Comparable food and beverage
sales |
|
$ |
395 |
|
|
$ |
378 |
|
|
$ |
759 |
|
|
$ |
739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS,
INC. Schedule of Comparable Hotel Results
(1)(unaudited, in millions, except hotel statistics)
(4) The reconciliation of total
revenues per the consolidated statements of operations to the
comparable hotel revenues is as follows:
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Revenues per the
consolidated statements of operations |
|
$ |
1,459 |
|
|
$ |
1,439 |
|
|
$ |
2,798 |
|
|
$ |
2,741 |
|
Non-comparable hotel
revenues |
|
|
(136 |
) |
|
|
(151 |
) |
|
|
(285 |
) |
|
|
(300 |
) |
Comparable hotel revenues |
|
$ |
1,323 |
|
|
$ |
1,288 |
|
|
$ |
2,513 |
|
|
$ |
2,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) The reconciliation of total food
and beverage expenses per the consolidated statements of operations
to the comparable food and beverage expenses is as follows:
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Food and beverage
expenses per the consolidated statements of operations |
|
$ |
289 |
|
|
$ |
289 |
|
|
$ |
573 |
|
|
$ |
572 |
|
Non-comparable hotel
food and beverage expenses |
|
|
(29 |
) |
|
|
(33 |
) |
|
|
(61 |
) |
|
|
(65 |
) |
Comparable food and beverage
expenses |
|
$ |
260 |
|
|
$ |
256 |
|
|
$ |
512 |
|
|
$ |
507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) The reconciliation of operating
costs and expenses per the consolidated statements of operations to
the comparable hotel expenses is as follows:
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Operating costs and
expenses per the consolidated statements of operations |
|
$ |
1,220 |
|
|
$ |
1,217 |
|
|
$ |
2,408 |
|
|
$ |
2,386 |
|
Non-comparable hotel
expenses |
|
|
(98 |
) |
|
|
(115 |
) |
|
|
(202 |
) |
|
|
(228 |
) |
Depreciation and
amortization |
|
|
(178 |
) |
|
|
(178 |
) |
|
|
(359 |
) |
|
|
(351 |
) |
Corporate and other
expenses |
|
|
(27 |
) |
|
|
(23 |
) |
|
|
(54 |
) |
|
|
(47 |
) |
Comparable hotel expenses |
|
$ |
917 |
|
|
$ |
901 |
|
|
$ |
1,793 |
|
|
$ |
1,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Non-comparable hotel results,
net, includes the following items: (i) the results of
operations of our non-comparable hotels and sold hotels, which
operations are included in our consolidated statements of
operations as continuing operations, (ii) gains on insurance
settlements, and (iii) the results of our office
buildings.
HOST
HOTELS & RESORTS, INC. |
Other Financial
Data |
(unaudited, in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016 |
|
December 31, 2015 |
Equity |
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
|
740.7 |
|
|
|
|
750.3 |
|
Common shares outstanding assuming
conversion of OP Units (1) |
|
|
|
749.7 |
|
|
|
|
759.7 |
|
Preferred OP Units outstanding |
|
|
|
.02 |
|
|
|
|
.02 |
|
|
|
|
|
|
|
|
|
|
|
Security pricing |
|
|
|
|
|
|
|
|
|
Common stock (2) |
|
$ |
|
16.21 |
|
|
$ |
|
15.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year-to-date
ended |
|
|
|
|
|
June 30, |
|
June 30, |
Dividends declared per common
share |
|
|
|
|
|
|
|
|
2016 |
|
$ |
.20 |
|
$ |
.40 |
2015 |
|
|
.20 |
|
|
.40 |
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
|
|
|
Senior debt |
Rate |
|
Maturity date |
|
June 30, 2016 |
|
December 31, 2015 |
Series Z |
|
6 |
% |
|
10/2021 |
|
$ |
|
297 |
|
|
$ |
|
297 |
|
Series B |
5 1⁄4% |
|
3/2022 |
|
|
|
347 |
|
|
|
|
347 |
|
Series C |
4 3⁄4% |
|
3/2023 |
|
|
|
446 |
|
|
|
|
445 |
|
Series D |
3 3⁄4% |
|
10/2023 |
|
|
|
397 |
|
|
|
|
397 |
|
Series E |
|
4 |
% |
|
6/2025 |
|
|
|
495 |
|
|
|
|
495 |
|
Series F |
4 1⁄2% |
|
2/2026 |
|
|
|
396 |
|
|
|
|
395 |
|
2014 Credit facility term loan |
|
1.6 |
% |
|
6/2017 |
|
|
|
500 |
|
|
|
|
499 |
|
2015 Credit facility term loan |
|
1.6 |
% |
|
9/2020 |
|
|
|
497 |
|
|
|
|
497 |
|
Credit facility revolver (3) |
|
1.5 |
% |
|
6/2018 |
|
|
|
258 |
|
|
|
|
295 |
|
|
|
|
|
|
|
|
3,633 |
|
|
|
|
3,667 |
|
Mortgage debt and other |
|
|
|
|
|
|
|
|
|
Mortgage debt (non-recourse) |
3.5-6% |
|
11/2016-2/2018 |
|
|
|
82 |
|
|
|
|
200 |
|
Total debt (4)(5) |
|
$ |
|
3,715 |
|
|
$ |
|
3,867 |
|
Percentage of fixed rate debt |
|
|
|
65 |
% |
|
|
|
64 |
% |
Weighted average interest rate |
|
|
|
3.7 |
% |
|
|
|
3.7 |
% |
Weighted average debt maturity |
|
|
|
5.6
years |
|
|
|
|
5.9
years |
|
Forecast GAAP Interest Expense
(6) |
|
$ |
|
156 |
|
|
|
|
Forecast cash interest, net (6) |
|
$ |
|
146 |
|
|
|
|
Forecast GAAP cash provided by
operating activities (7) |
|
$ |
|
1,239 |
|
|
|
|
Forecast adjusted cash from
operations (7) |
|
$ |
|
936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) Each OP Unit is redeemable
for cash or, at our option, for 1.021494 common shares of Host Inc.
At June 30, 2016 and December 31, 2015, there were
8.9 million and 9.1 million common OP Units, respectively,
held by non-controlling interests. (2) Share
prices are the closing price as reported by the New York Stock
Exchange. (3) The interest rate shown is
the weighted average rate of the outstanding credit facility at
June 30, 2016. (4) In accordance with GAAP,
total debt includes the debt of entities that we consolidate, but
of which we do not own 100%, and excludes the debt of entities that
we do not consolidate, but of which we have a non-controlling
ownership interest and record our investment therein under the
equity method of accounting. As of June 30, 2016, our
non-controlling partners’ share of consolidated debt is
$16 million and our share of debt in unconsolidated
investments is $402 million. (5) Total debt
as of June 30, 2016 and December 31, 2015 includes net
discounts and deferred financing costs of $28 million and
$32 million, respectively. (6) Reflects 2016
forecast cash interest expense, net of debt extinguishment costs,
as of the balance sheet date. The following chart reconciles
Forecast Full Year 2016 GAAP interest expense to forecast cash
interest expense. See footnote (1) to the Reconciliation of Net
Income to EBITDA, Adjusted EBITDA and NAREIT and Adjusted Funds
From Operations per diluted share for 2016 Forecasts for full year
forecast assumptions:
Forecast GAAP interest expense full year
2016 |
|
$ |
156 |
|
Amortization of deferred financing costs |
|
|
(6 |
) |
Change in accrued interest |
|
|
(4 |
) |
Forecast cash interest full year 2016, net |
|
$ |
146 |
|
|
|
|
|
|
(7) The following chart reconciles forecast full year 2016 GAAP
cash provided by operating activities to forecast adjusted cash
from operations:
Forecast GAAP cash provided by operating
activities |
|
$ |
1,239 |
|
Renewal and replacement expenditures |
|
|
(303 |
) |
Forecast adjusted cash from operations |
|
$ |
936 |
|
|
|
|
|
|
HOST
HOTELS & RESORTS, INC. |
Reconciliation
of Net Income to |
EBITDA and
Adjusted EBITDA (1) |
(unaudited, in
millions) |
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Net
income (2) |
|
$ |
351 |
|
|
$ |
214 |
|
|
$ |
535 |
|
|
$ |
313 |
|
Interest expense |
|
|
39 |
|
|
|
72 |
|
|
|
78 |
|
|
|
121 |
|
Depreciation and amortization |
|
|
178 |
|
|
|
178 |
|
|
|
359 |
|
|
|
351 |
|
Income taxes |
|
|
32 |
|
|
|
13 |
|
|
|
23 |
|
|
|
4 |
|
EBITDA
(2) |
|
|
600 |
|
|
|
477 |
|
|
|
995 |
|
|
|
789 |
|
Gain on dispositions (3) |
|
|
(172 |
) |
|
|
(53 |
) |
|
|
(230 |
) |
|
|
(56 |
) |
Gain on property insurance
settlement |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Acquisition costs |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates |
|
|
(9 |
) |
|
|
(24 |
) |
|
|
(11 |
) |
|
|
(26 |
) |
Pro rata Adjusted EBITDA of equity
investments |
|
|
20 |
|
|
|
23 |
|
|
|
35 |
|
|
|
40 |
|
Consolidated partnership
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata Adjusted EBITDA
attributable to non- controlling partners in other
consolidated partnerships |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(5 |
) |
Adjusted EBITDA
(2) |
|
$ |
436 |
|
|
$ |
422 |
|
|
$ |
782 |
|
|
$ |
743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) See the Notes to Financial
Information for discussion of non-GAAP
measures.
(2) Net Income, EBITDA, Adjusted EBITDA, NAREIT
FFO and Adjusted FFO include a gain of $1 million for the
year-to-date periods ended June 30, 2016 and 2015 for the sale
of the portion of land attributable to individual units sold by the
Maui timeshare joint venture. (3) Reflects the
sale of eight hotels in 2016 and the sale of four hotels in
2015.
HOST
HOTELS & RESORTS, INC. |
Reconciliation
of Net Income to NAREIT and |
Adjusted Funds
From Operations per Diluted Share
(1) |
(unaudited, in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Net
income (2) |
|
$ |
351 |
|
|
$ |
214 |
|
|
$ |
535 |
|
|
$ |
313 |
|
Less: Net income attributable to
non-controlling interests |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
Net income
attributable to Host Inc. |
|
|
347 |
|
|
|
212 |
|
|
|
529 |
|
|
|
310 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on dispositions (3) |
|
|
(172 |
) |
|
|
(53 |
) |
|
|
(230 |
) |
|
|
(56 |
) |
Tax on dispositions |
|
|
9 |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
Gain on property insurance
settlement |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Depreciation and amortization |
|
|
177 |
|
|
|
177 |
|
|
|
357 |
|
|
|
349 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates |
|
|
(9 |
) |
|
|
(24 |
) |
|
|
(11 |
) |
|
|
(26 |
) |
Pro rata FFO of equity
investments |
|
|
16 |
|
|
|
18 |
|
|
|
26 |
|
|
|
28 |
|
Consolidated partnership
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO adjustment for non-controlling
partnerships |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
FFO adjustments for non-controlling
interests of Host L.P. |
|
|
— |
|
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
NAREIT FFO
(2) |
|
|
367 |
|
|
|
327 |
|
|
|
675 |
|
|
|
598 |
|
Adjustments to NAREIT
FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on debt extinguishment |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
24 |
|
Acquisition costs |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
Adjusted FFO
(2) |
|
$ |
367 |
|
|
$ |
352 |
|
|
$ |
675 |
|
|
$ |
623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation
on a per share basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for
dilutive securities (4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assuming conversion of Exchangeable
Senior Debentures |
|
$ |
— |
|
|
$ |
7 |
|
|
$ |
— |
|
|
$ |
14 |
|
Diluted NAREIT
FFO |
|
$ |
367 |
|
|
$ |
334 |
|
|
$ |
675 |
|
|
$ |
612 |
|
Diluted
Adjusted FFO |
|
$ |
367 |
|
|
$ |
359 |
|
|
$ |
675 |
|
|
$ |
637 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding - EPS |
|
|
744.3 |
|
|
|
785.5 |
|
|
|
747.1 |
|
|
|
755.4 |
|
Assuming conversion of Exchangeable
Senior Debentures |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
31.1 |
|
Diluted
weighted average shares outstanding - NAREIT
FFO and Adjusted FFO |
|
|
744.3 |
|
|
|
785.5 |
|
|
|
747.1 |
|
|
|
786.5 |
|
NAREIT FFO per
diluted share |
|
$ |
.49 |
|
|
$ |
.43 |
|
|
$ |
.90 |
|
|
$ |
.78 |
|
Adjusted FFO
per diluted share |
|
$ |
.49 |
|
|
$ |
.46 |
|
|
$ |
.90 |
|
|
$ |
.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1-3) Refer to the corresponding footnote
on the Reconciliation of Net Income to EBITDA and Adjusted
EBITDA.(4) Earnings per diluted share and NAREIT FFO
and Adjusted FFO per diluted share are adjusted for the effects of
dilutive securities. Dilutive securities may include shares granted
under comprehensive stock plans, preferred OP units held by
non-controlling partners, exchangeable debt securities and other
non-controlling interests that have the option to convert their
limited partnership interests to common OP units. No effect is
shown for securities if they are anti-dilutive.
HOST
HOTELS & RESORTS, INC. |
Reconciliation
of Net Income to EBITDA, Adjusted EBITDA and |
NAREIT and
Adjusted Funds From Operations per Diluted Shares for 2016
Forecasts (1) |
(unaudited, in millions,
except per share amounts) |
|
|
|
|
|
|
|
|
Full Year 2016 |
|
|
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
|
|
$ |
732 |
|
|
$ |
762 |
|
Interest expense |
|
|
|
156 |
|
|
|
156 |
|
Depreciation and amortization |
|
|
|
717 |
|
|
|
717 |
|
Income taxes |
|
|
|
43 |
|
|
|
43 |
|
EBITDA |
|
|
|
1,648 |
|
|
|
1,678 |
|
Gain on dispositions |
|
|
|
(246 |
) |
|
|
(246 |
) |
Gain on property insurance
settlement |
|
|
|
(1 |
) |
|
|
(1 |
) |
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates |
|
|
|
(21 |
) |
|
|
(21 |
) |
Pro rata Adjusted EBITDA of equity
investments |
|
|
|
66 |
|
|
|
66 |
|
Consolidated partnership
adjustments: |
|
|
|
|
|
|
|
|
|
Pro rata Adjusted EBITDA
attributable to non-controlling partners in other consolidated
partnerships |
|
|
|
(11 |
) |
|
|
(11 |
) |
Adjusted
EBITDA |
|
|
$ |
1,435 |
|
|
$ |
1,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2016 |
|
|
|
|
Low-endof range |
|
|
High-endof range |
|
Net income |
|
|
$ |
732 |
|
|
$ |
762 |
|
Less: Net income attributable to non-controlling
interests |
|
|
|
(8 |
) |
|
|
(8 |
) |
Net income attributable to Host
Inc. |
|
|
|
724 |
|
|
|
754 |
|
Gain on dispositions |
|
|
|
(246 |
) |
|
|
(246 |
) |
Tax on dispositions |
|
|
|
9 |
|
|
|
9 |
|
Gain on property insurance
settlement |
|
|
|
(1 |
) |
|
|
(1 |
) |
Depreciation and amortization |
|
|
|
714 |
|
|
|
714 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates |
|
|
|
(21 |
) |
|
|
(21 |
) |
Pro rata FFO of equity
investments |
|
|
|
48 |
|
|
|
48 |
|
Consolidated partnership
adjustments: |
|
|
|
|
|
|
|
|
|
FFO adjustment for non-controlling
partners in other consolidated partnerships |
|
|
|
(6 |
) |
|
|
(6 |
) |
FFO adjustment for non-controlling
interests of Host LP |
|
|
|
(5 |
) |
|
|
(5 |
) |
NAREIT FFO and Adjusted FFO |
|
|
|
1,216 |
|
|
|
1,246 |
|
Diluted NAREIT FFO and Adjusted
FFO |
|
|
$ |
1,216 |
|
|
$ |
1,246 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares -
EPS |
|
|
|
744.1 |
|
|
|
744.1 |
|
Weighted average diluted shares - NAREIT
and Adjusted FFO |
|
|
|
744.1 |
|
|
|
744.1 |
|
Earnings per diluted share |
|
|
$ |
0.97 |
|
|
$ |
1.01 |
|
NAREIT and Adjusted FFO per diluted
share |
|
|
$ |
1.63 |
|
|
$ |
1.67 |
|
|
|
|
|
|
|
|
|
|
|
___________
(1) The forecasts are based on the
below
assumptions:
- Total comparable hotel RevPAR in constant US$ will increase
2.0% to 3.0% for the low and high end of the forecast range, which
excludes the effect of changes in foreign currency. However, the
effect of estimated changes in foreign currency has been reflected
in the forecast of net income, EBITDA, earnings per diluted share
and Adjusted FFO per diluted share.
- Comparable hotel EBITDA margins will increase 40 basis points
to 70 basis points for the low and high ends of the forecasted
range, respectively.
- We expect to spend approximately $185 million to
$200 million on ROI/redevelopment and acquisition capital
expenditures and approximately $295 million to $310 million on
renewal and replacement expenditures.
- We have adjusted the above forecasts for the sale of two
properties currently under contract that are subject to various
closing conditions which may not be satisfied. There can be no
assurances that these properties will be sold or will be sold at
the contract price.
For a discussion of additional items that may
affect forecasted results, see the Notes to Financial
Information.
HOST
HOTELS & RESORTS, INC. |
Schedule of
Comparable Hotel Results |
for 2016
Forecasts (1) |
(unaudited, in millions,
except hotel statistics) |
|
|
|
|
|
|
Full Year 2016 |
|
|
|
Low-endof range |
|
|
High-endof range |
|
Operating profit margin under GAAP (2) |
|
|
12.3 |
% |
|
|
12.7 |
% |
Comparable hotel EBITDA margin (3) |
|
|
27.4 |
% |
|
|
27.7 |
% |
Comparable hotel sales |
|
|
|
|
|
|
|
|
Room |
|
$ |
3,170 |
|
|
$ |
3,201 |
|
Food and beverage |
|
|
1,434 |
|
|
|
1,444 |
|
Other |
|
|
278 |
|
|
|
279 |
|
Comparable hotel sales (4) |
|
|
4,882 |
|
|
|
4,924 |
|
Comparable hotel expenses |
|
|
|
|
|
|
|
|
Rooms, food and beverage and other
departmental costs |
|
|
1,909 |
|
|
|
1,920 |
|
Management fees, ground rent and
other costs |
|
|
1,635 |
|
|
|
1,640 |
|
Comparable hotel expenses (5) |
|
|
3,544 |
|
|
|
3,560 |
|
Comparable hotel EBITDA |
|
|
1,338 |
|
|
|
1,364 |
|
Non-comparable hotel results, net |
|
|
148 |
|
|
|
152 |
|
Depreciation and amortization |
|
|
(717 |
) |
|
|
(717 |
) |
Interest expense |
|
|
(156 |
) |
|
|
(156 |
) |
Provision for income taxes |
|
|
(43 |
) |
|
|
(43 |
) |
Gain on sale of property and corporate level
income/expense |
|
|
162 |
|
|
|
162 |
|
Net income |
|
$ |
732 |
|
|
$ |
762 |
|
|
|
|
|
|
|
|
|
|
___________
(1) Forecast comparable hotel results
include 88 hotels that we have assumed will be classified as
comparable as of December 31, 2016, which excludes the 2
properties that are currently under contract for sale. See
“Comparable Hotel Operating Statistics” in the Notes to Financial
Information. No assurances can be made as to the hotels that will
be in the comparable hotel set for 2016. Also, see the notes to the
“Reconciliation of Net Income to EBITDA, Adjusted EBITDA and NAREIT
and Adjusted Funds From Operations per Diluted Share for Full Year
2016 Forecasts” for other forecast assumptions and further
discussion of our comparable hotel
set.
(2) Operating profit margin under GAAP is calculated as
the operating profit divided by the forecast total revenues per the
consolidated statements of operations. See (4) below for
forecast revenues. (3) Comparable hotel EBITDA margin
is calculated as the comparable hotel EBITDA divided by the
comparable hotel sales per the table above. (4) The
reconciliation of forecast total revenues to the forecast
comparable hotel sales is as follows (in millions):
|
|
Low-endof range |
|
|
High-endof range |
|
Revenues |
|
$ |
5,403 |
|
|
$ |
5,449 |
|
Non-comparable hotel revenues |
|
|
(521 |
) |
|
|
(525 |
) |
Comparable hotel sales |
|
$ |
4,882 |
|
|
$ |
4,924 |
|
|
|
|
|
|
|
|
|
|
(5) The reconciliation of forecast
operating costs and expenses to the comparable hotel expenses is as
follows (in millions):
|
|
Low-endof range |
|
|
High-endof range |
|
Operating costs and expenses |
|
$ |
4,741 |
|
|
$ |
4,757 |
|
Non-comparable hotel and other expenses |
|
|
(373 |
) |
|
|
(373 |
) |
Depreciation and amortization |
|
|
(717 |
) |
|
|
(717 |
) |
Corporate and other expenses |
|
|
(107 |
) |
|
|
(107 |
) |
Comparable hotel expenses |
|
$ |
3,544 |
|
|
$ |
3,560 |
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS,
INC.Notes to Financial Information
FORECASTS
Our forecast of earnings per diluted share,
NAREIT and Adjusted FFO per diluted share, EBITDA, Adjusted EBITDA
and comparable hotel EBITDA margins are forward-looking statements
and are not guarantees of future performance and involve known and
unknown risks, uncertainties and other factors which may cause
actual results and performance to differ materially from those
expressed or implied by these forecasts. Although we believe the
expectations reflected in the forecasts are based upon reasonable
assumptions, we can give no assurance that the expectations will be
attained or that the results will not be materially different.
Risks that may affect these assumptions and forecasts include the
following: potential changes in overall economic outlook make it
inherently difficult to forecast the level of RevPAR and margin
growth; the amount and timing of acquisitions and dispositions of
hotel properties is an estimate that can substantially affect
financial results, including such items as net income, depreciation
and gains on dispositions; the level of capital expenditures may
change significantly, which will directly affect the level of
depreciation expense and net income; the amount and timing of debt
payments may change significantly based on market conditions, which
will directly affect the level of interest expense and net income;
the amount and timing of transactions involving shares of our
common stock may change based on market conditions; and other risks
and uncertainties associated with our business described herein and
in our annual report on Form 10-K, quarterly reports on Form 10-Q
and current reports on Form 8-K filed with the SEC.
APPLICATION OF NEW ACCOUNTING STANDARDS
During the first quarter, the Company adopted
ASU No. 2015-02, Amendments to the Consolidation Analysis, which
included an amendment to the consolidation guidance that removed
the presumption of control by a general partner in a limited
partnership. As a result, the Company has deconsolidated the
partnership which owns the Fort Lauderdale Marriott Harbor Beach
Resort & Spa, effective January 1, 2016. The Company has
applied the change retrospectively on the accompanying financial
statements. As a result of the adoption, assets and liabilities
declined by $128 million and $150 million, respectively,
as of year-end 2015, with no effect on the total equity of Host
Hotels & Resorts, Inc. stockholders. Additionally, revenues for
the second quarter and year-to-date ended 2015 exclude the rental
income of $10 million and $25 million, respectively, earned by
the partnership; however, the adoption does not affect the net
income attributable to Host Hotels & Resorts, Inc., Adjusted
EBITDA, or NAREIT and Adjusted FFO.
COMPARABLE HOTEL OPERATING STATISTICS
To facilitate a quarter-to-quarter comparison of
our operations, we present certain operating statistics (i.e.,
RevPAR, average daily rate and average occupancy) and operating
results (revenues, expenses, hotel EBITDA and associated margins)
for the periods included in this report on a comparable hotel
basis.
Because these statistics and operating results
relate only to our hotel properties, they exclude results for our
non-hotel properties and other real estate investments. We define
our comparable hotels as properties:
(i) that are owned or leased by us and the operations of
which are included in our consolidated results for the entirety of
the reporting periods being compared; and
(ii) that have not sustained substantial property damage or
business interruption, or undergone large-scale capital projects
(as further defined below) during the reporting periods being
compared.
The hotel business is capital-intensive and
renovations are a regular part of the business. Generally, hotels
under renovation remain comparable hotels. A large scale capital
project that would cause a hotel to be excluded from our comparable
hotel set is an extensive renovation of several core aspects of the
hotel, such as rooms, meeting space, lobby, bars, restaurants and
other public spaces. Both quantitative and qualitative factors are
taken into consideration in determining if the renovation would
cause a hotel to be removed from the comparable hotel set,
including unusual or exceptional circumstances such as: a reduction
or increase in room count, rebranding, a significant alteration of
the business operations, or the closing of the hotel during the
renovation.
We do not include an acquired hotel in our
comparable hotel set until the operating results for that hotel
have been included in our consolidated results for one full
calendar year. For example, we acquired The Phoenician in June
2015. The hotel will not be included in our comparable hotels until
January 1, 2017. Hotels that we sell are excluded from the
comparable hotel set once the transaction has closed. Similarly,
hotels are excluded from our comparable hotel set from the date
that they sustain substantial property damage or business
interruption or commence a large-scale capital project. In each
case, these hotels are returned to the comparable hotel set when
the operations of the hotel have been included in our consolidated
results for one full calendar year after completion of the repair
of the property damage or cessation of the business interruption,
or the completion of large-scale capital projects, as
applicable.
Of the 98 hotels that we owned on
June 30, 2016, 90 have been classified as comparable hotels.
The operating results of the following hotels that we owned as of
June 30, 2016 are excluded from comparable hotel results for
these periods:
- The Denver Marriott Tech Center, removed in the first quarter
of 2016 (business disruption due to extensive renovations,
including conversion of 64 rooms to 41 suites, conversion of the
concierge lounge into three meeting rooms, and the repositioning of
the public space and food and beverage areas);
- The Hyatt Regency San Francisco Airport, removed in the first
quarter of 2016 (business disruption due to extensive renovations,
including all guestrooms and bathrooms, meeting space, the
repositioning of the atrium into a new restaurant and lounge, and
conversion of the existing restaurant to additional meeting
space);
- The Camby Hotel (previously The Ritz-Carlton, Phoenix), removed
in the third quarter of 2015 (business interruption due to
rebranding, including closure of the hotel in July 2015 for
extensive renovation work);
- The Logan (previously the Four Seasons Philadelphia), removed
in the first quarter of 2015 (business interruption due to
rebranding, including closure of the hotel in order to expedite
renovation efforts);
- Houston Airport Marriott at George Bush Intercontinental,
removed in the first quarter of 2015 (business interruption due to
complete repositioning of the hotel, including guest room
renovations and the closure of two restaurants to create a new food
and beverage outlet and lobby experience);
- Marriott Marquis San Diego Marina, removed in the first quarter
of 2015 (business interruption due to the demolition of the
existing conference center and construction of the new exhibit
hall);
- The Phoenician (acquired in June 2015); and
- Axiom Hotel (acquired as the Powell Hotel in January 2014, then
closed during 2015 for extensive renovations and reopened in
January 2016).
The operating results of 16 hotels disposed of
in 2016 and 2015 are not included in comparable hotel results for
the periods presented herein. These operations are also excluded
from the hotel operating data for all owned hotels on pages 10 and
11.
Operating statistics for the non-comparable
hotels listed above are included in the hotel operating data for
all owned hotels. By definition, the RevPAR results for these
properties are not comparable due to the reasons listed above, and,
therefore, are not indicative of the overall trends for our
portfolio. The operating results for the one hotel acquired in 2015
is included in the all owned hotel operating data on a pro forma
basis, which includes operating results assuming it was owned as of
January 1, 2015 and based on actual results obtained from the
manager for periods prior to our ownership. For this hotel, since
the year-over-year comparison includes periods prior to our
ownership, the changes will not necessarily correspond to changes
in our actual results. All owned hotel operating statistics are
provided for completeness and to show the difference between our
comparable hotel information (upon which we usually evaluate
performance) and all of our hotels, including non-comparable
hotels. Also, while they may not be illustrative of trends (as
compared to comparable hotel operating statistics), changes in all
owned hotel statistics will have an effect on our overall revenues.
We also present all owned hotel statistics for our joint venture in
Europe using the same methodology as our consolidated hotels.
We evaluate the operating performance of our
comparable hotels based on both market and property type. These
divisions are generally consistent with groupings recognized in the
lodging industry.
Our markets consist of the following:
Domestic
- Boston – Greater Boston Metropolitan area;
- New York – Greater New York Metropolitan area, including
northern New Jersey;
- Washington, D.C. – Metropolitan area, including the Maryland
and Virginia suburbs;
- Atlanta – Atlanta Metropolitan area;
- Florida – All Florida locations;
- Chicago – Chicago Metropolitan area;
- Denver – Denver Metropolitan area;
- Houston – Houston Metropolitan area;
- Phoenix – Phoenix Metropolitan area, including Scottsdale;
- Seattle – Seattle Metropolitan area;
- San Francisco – Greater San Francisco Metropolitan area,
including San Jose;
- Los Angeles – Greater Los Angeles area, including Orange
County;
- San Diego – San Diego Metropolitan area;
- Hawaii – All Hawaii locations; and
- Other – Select cities in California, Indiana, Louisiana,
Minnesota, Ohio, Pennsylvania, Tennessee and Texas.
International
- Asia-Pacific – Australia and New Zealand;
- Canada – Toronto and Calgary; and
- Latin America – Brazil and Mexico.
Our property types consist of the following:
- Urban – Hotels located in primary business districts of major
cities;
- Suburban – Hotels located in office parks or smaller secondary
markets;
- Resort – Hotels located in resort destinations such as Arizona,
Florida, Hawaii and Southern California; and
- Airport – Hotels located at or near airports.
CONSTANT US$, NOMINAL US$ AND CONSTANT
EUROS
Operating results denominated in foreign
currencies are translated using the prevailing exchange rates on
the date of the transaction, or monthly based on the weighted
average exchange rate for the period. For comparative purposes, we
also present the RevPAR results for the prior year assuming the
results for our foreign operations were translated using the same
exchange rates that were effective for the comparable periods in
the current year, thereby eliminating the effect of currency
fluctuation for the year-over-year comparisons. For the full year
forecast results, we use the applicable forward currency curve (as
published by Bloomberg L.P.) for each monthly period to estimate
forecast foreign operations in U.S. dollars and have restated the
prior year RevPAR results using the same forecast exchange rates to
estimate year-over-year growth in RevPAR in constant US$. We
believe this presentation is useful to investors as it shows growth
in RevPAR in the local currency of the hotel consistent with how we
would evaluate our domestic portfolio. However, the estimated
effect of changes in foreign currency has been reflected in the
actual and forecast results of net income, EBITDA, earnings per
diluted share and Adjusted FFO per diluted share. Nominal US$
results include the effect of currency fluctuations, consistent
with our financial statement presentation.
We also present RevPAR results for our joint
venture in Europe in constant Euros using the same methodology as
used for the constant US$ presentation.
NON-GAAP FINANCIAL MEASURES
Included in this press release are certain
“non-GAAP financial measures,” which are measures of our historical
or future financial performance that are not calculated and
presented in accordance with GAAP, within the meaning of applicable
SEC rules. They are as follows: (i) FFO and FFO per diluted
share (both NAREIT and Adjusted), (ii) EBITDA,
(iii) Adjusted EBITDA, (iv) Comparable Hotel Property
Level Operating Results and (v) forecast interest expense and
forecast adjusted cash from operations. The following discussion
defines these measures and presents why we believe they are useful
supplemental measures of our performance.
NAREIT FFO AND NAREIT FFO PER DILUTED SHARE
We present NAREIT FFO and NAREIT FFO per diluted
share as non-GAAP measures of our performance in addition to our
earnings per share (calculated in accordance with GAAP). We
calculate NAREIT FFO per diluted share as our NAREIT FFO (defined
as set forth below) for a given operating period, as adjusted for
the effect of dilutive securities, divided by the number of fully
diluted shares outstanding during such period, in accordance with
NAREIT guidelines. NAREIT defines FFO as net income (calculated in
accordance with GAAP) excluding gains and losses from sales of real
estate, the cumulative effect of changes in accounting principles,
real estate-related depreciation, amortization and impairments and
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect our pro rata share of the FFO of those
entities on the same basis.
We believe that NAREIT FFO per diluted share is
a useful supplemental measure of our operating performance and that
the presentation of NAREIT FFO per diluted share, when combined
with the primary GAAP presentation of earnings per share, provides
beneficial information to investors. By excluding the effect of
real estate depreciation, amortization, impairments and gains and
losses from sales of depreciable real estate, all of which are
based on historical cost accounting and which may be of lesser
significance in evaluating current performance, we believe that
such measures can facilitate comparisons of operating performance
between periods and with other REITs, even though NAREIT FFO per
diluted share does not represent an amount that accrues directly to
holders of our common stock. Historical cost accounting for real
estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. As noted by NAREIT in its
April 2002 “White Paper on Funds From Operations,” since real
estate values have historically risen or fallen with market
conditions, many industry investors have considered presentation of
operating results for real estate companies that use historical
cost accounting to be insufficient by themselves. For these
reasons, NAREIT adopted the FFO metric in order to promote an
industry-wide measure of REIT operating performance.
Adjusted FFO per Diluted Share
We also present Adjusted FFO per diluted share
when evaluating our performance because management believes that
the exclusion of certain additional items described below provides
useful supplemental information to investors regarding our ongoing
operating performance. Management historically has made the
adjustments detailed below in evaluating our performance, in our
annual budget process and for our compensation programs. We believe
that the presentation of Adjusted FFO per diluted share, when
combined with both the primary GAAP presentation of earnings per
share and FFO per diluted share as defined by NAREIT, provides
useful supplemental information that is beneficial to an investor’s
complete understanding of our operating performance. We adjust
NAREIT FFO per diluted share for the following items, which may
occur in any period, and refer to this measure as Adjusted FFO per
diluted share:
- Gains and Losses on the Extinguishment of Debt – We exclude the
effect of finance charges and premiums associated with the
extinguishment of debt, including the acceleration of the write-off
of deferred financing costs associated with the original issuance
of the debt being redeemed or retired and incremental interest
expense incurred during the refinancing period. We also exclude the
gains on debt repurchases and the original issuance costs
associated with the retirement of preferred stock. We believe that
these items are not reflective of our ongoing finance costs.
- Acquisition Costs – Under GAAP, costs associated with completed
property acquisitions 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.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business. We believe that
including these items is not consistent with our ongoing operating
performance.
In unusual circumstances, we may also adjust
NAREIT FFO for gains or losses that management believes are not
representative of the Company’s current operating performance. For
example, in 2013, management excluded the $11 million gain
from the eminent domain claim for land for which we received the
cash proceeds in 2007, but, pending the resolution of certain
contingencies, was not recognized until 2013. Typically, gains from
the disposition of non-depreciable property are included in the
determination of NAREIT and Adjusted FFO.
EBITDA
Earnings before Interest Expense, Income Taxes,
Depreciation and Amortization (“EBITDA”) is a commonly used measure
of performance in many industries. Management believes EBITDA
provides useful information to investors regarding our results of
operations because it helps us and our investors evaluate the
ongoing operating performance of our properties after removing the
impact of the Company’s capital structure (primarily interest
expense) and its asset base (primarily depreciation and
amortization). Management also believes the use of EBITDA
facilitates comparisons between us and other lodging REITs, hotel
owners who are not REITs and other capital-intensive companies.
Management uses EBITDA to evaluate property-level results and as
one measure in determining the value of acquisitions and
dispositions and, like FFO and Adjusted FFO per diluted share, is
widely used by management in the annual budget process and for our
compensation programs.
Adjusted EBITDA
Historically, management has adjusted EBITDA
when evaluating the performance of Host Inc. and Host LP because we
believe that the exclusion of certain additional items described
below provides useful supplemental information to investors
regarding our ongoing operating performance and that the
presentation of Adjusted EBITDA, when combined with the primary
GAAP presentation of net income, is beneficial to an investor’s
complete understanding of our operating performance. Adjusted
EBITDA also is a relevant measure in calculating certain credit
ratios. We adjust EBITDA for the following items, which may occur
in any period, and refer to this measure as Adjusted EBITDA:
- Real Estate Transactions – We exclude the effect of gains and
losses, including the amortization of deferred gains, recorded on
the disposition or acquisition of depreciable assets and property
insurance gains in our consolidated statement of operations because
we believe that including them in Adjusted EBITDA is not consistent
with reflecting the ongoing performance of our assets. In addition,
material gains or losses from the depreciated book value of the
disposed assets could be less important to investors given that the
depreciated asset book value often does not reflect the market
value of real estate assets as noted above.
- Equity Investment Adjustments – We exclude the equity in
earnings (losses) of affiliates as presented in our consolidated
statement of operations because it includes our pro rata portion of
the depreciation, amortization and interest expense related to such
investments, which are excluded from EBITDA. We include our pro
rata share of the Adjusted EBITDA of our equity investments as we
believe this reflects more accurately the performance of our
investments. The pro rata Adjusted EBITDA of equity investments is
defined as the EBITDA of our equity investments adjusted for any
gains or losses on property transactions multiplied by our
percentage ownership in the partnership or joint venture.
- Consolidated Partnership Adjustments – We deduct the
non-controlling partners’ pro rata share of Adjusted EBITDA of our
consolidated partnerships as this reflects the non-controlling
owners’ interest in the EBITDA of our consolidated partnerships.
The pro rata Adjusted EBITDA of non-controlling partners is defined
as the EBITDA of our consolidated partnerships adjusted for any
gains or losses on property transactions multiplied by the
non-controlling partners’ percentage ownership in the partnership
or joint venture.
- Cumulative Effect of a Change in Accounting Principle –
Infrequently, the Financial Accounting Standards Board 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 because
they do not reflect our actual performance for that period.
- Impairment Losses – We exclude the effect of impairment expense
recorded because we believe that including them in Adjusted EBITDA
is not consistent with reflecting the ongoing performance of our
remaining assets. In addition, we believe that impairment expense,
which is based on historical cost book values, is similar to gains
and losses on dispositions and depreciation expense, both of which
are excluded from EBITDA.
- Acquisition Costs – Under GAAP, costs associated with completed
property acquisitions 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.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business, which is
consistent with the definition of Adjusted FFO that we adopted
effective January 1, 2011. We believe that including these
items is not consistent with our ongoing operating
performance.
In unusual circumstances, we may also adjust
EBITDA for gains or losses that management believes are not
representative of the Company’s current operating performance. For
example, in 2013, management excluded the $11 million gain
from the eminent domain claim for land for which we received the
cash proceeds in 2007, but, pending the resolution of certain
contingencies, was not recognized until 2013. Typically, gains from
the disposition of non-depreciable property are included in the
determination of Adjusted EBITDA.
Limitations on the Use of NAREIT FFO per Diluted
Share, Adjusted FFO per Diluted Share, EBITDA and Adjusted
EBITDA
We calculate NAREIT FFO per diluted share in
accordance with standards established by NAREIT, which may not be
comparable to measures calculated by other companies who do not use
the NAREIT definition of FFO or do not calculate FFO per diluted
share in accordance with NAREIT guidance. In addition, although FFO
per diluted share is a useful measure when comparing our results to
other REITs, it may not be helpful to investors when comparing us
to non-REITs. We also calculate Adjusted FFO per diluted share,
which is not in accordance with NAREIT guidance and may not be
comparable to measures calculated by other REITs. EBITDA and
Adjusted EBITDA, as presented, may also not be comparable to
measures calculated by other companies. This information should not
be considered as an alternative to net income, operating profit,
cash from operations or any other operating performance measure
calculated in accordance with GAAP. Cash expenditures for various
long-term assets (such as renewal and replacement capital
expenditures), interest expense (for EBITDA and Adjusted EBITDA
purposes only) and other items have been and will be made and are
not reflected in the EBITDA, Adjusted EBITDA, NAREIT FFO per
diluted share and Adjusted FFO per diluted share presentations.
Management compensates for these limitations by separately
considering the impact of these excluded items to the extent they
are material to operating decisions or assessments of our operating
performance. Our consolidated statement of operations and cash
flows include interest expense, capital expenditures, and other
excluded items, all of which should be considered when evaluating
our performance, as well as the usefulness of our non-GAAP
financial measures. Additionally, NAREIT FFO per diluted share,
Adjusted FFO per diluted share, EBITDA and Adjusted EBITDA should
not be considered as a measure of our liquidity or indicative of
funds available to fund our cash needs, including our ability to
make cash distributions. In addition, NAREIT FFO per diluted share
and Adjusted FFO per diluted share do not measure, and should not
be used as a measure of, amounts that accrue directly to
stockholders’ benefit.
Comparable Hotel Property Level Operating
Results
We present certain operating results for our
hotels, such as hotel revenues, expenses, EBITDA (and the related
margin) and food and beverage adjusted profit (and the related
margin), on a comparable hotel, or “same store,” basis as
supplemental information for investors. Our comparable hotel
results present operating results for hotels owned during the
entirety of the periods being compared without giving effect to any
acquisitions or dispositions, significant property damage or large
scale capital improvements incurred during these periods. We
present comparable hotel EBITDA to help us and our investors
evaluate the ongoing operating performance of our comparable
properties after removing the impact of the Company’s capital
structure (primarily interest expense), and its asset base
(primarily depreciation and amortization). Corporate-level costs
and expenses are also removed to arrive at property-level
results. We believe these property-level results provide
investors with supplemental information into the ongoing operating
performance of our comparable hotels. Comparable hotel results are
presented both by region and for the Company’s comparable
properties in the aggregate. We eliminate depreciation and
amortization because, even though depreciation and amortization are
property-level expenses, these non-cash expenses, which are based
on historical cost accounting for real estate assets, implicitly
assume that the value of real estate assets diminishes predictably
over time. As noted earlier, because real estate values have
historically risen or fallen with market conditions, many real
estate industry investors have considered presentation of
historical cost accounting for operating results to be insufficient
by themselves.
As a result of the elimination of
corporate-level costs and expenses and depreciation and
amortization, the comparable hotel operating results we present do
not represent our total revenues, expenses, operating profit or net
income and should not be used to evaluate our performance as a
whole. Management compensates for these limitations by separately
considering the impact of these excluded items to the extent they
are material to operating decisions or assessments of our operating
performance. Our consolidated statements of operations include such
amounts, all of which should be considered by investors when
evaluating our performance.
We present these hotel operating results on a
comparable hotel basis because we believe that doing so provides
investors and management with useful information for evaluating the
period-to-period performance of our hotels and facilitates
comparisons with other hotel REITs and hotel owners. In particular,
these measures assist management and investors in distinguishing
whether increases or decreases in revenues and/or expenses are due
to growth or decline of operations at comparable hotels (which
represent the vast majority of our portfolio) or from other
factors, such as the effect of acquisitions or dispositions. While
management believes that presentation of comparable hotel results
is a “same store” supplemental measure that provides useful
information in evaluating our ongoing performance, this measure is
not used to allocate resources or to assess the operating
performance of each of these hotels, as these decisions are based
on data for individual hotels and are not based on comparable hotel
results. For these reasons, we believe that comparable hotel
operating results, when combined with the presentation of GAAP
operating profit, revenues and expenses, provide useful information
to investors and management.
Cash Interest Expense
We present Cash Interest Expense when evaluating
our performance because management believes that the exclusion of
certain items from interest expense as calculated under GAAP
provides useful supplemental information to investors regarding
payment obligations under our debt agreements. Management
historically has made the adjustments detailed below to provide
investors with a measure of the level of required cash expenditures
associated with our outstanding debt without regard to cost
associated with refinancing activity or non-cash expense. We
believe that the presentation of Cash Interest Expense, when
combined with the primary GAAP presentation, provides useful
supplemental information related to our capital structure. We
adjust GAAP interest expense for the following items, which may
occur in any period, and refer to this measure as Cash Interest
Expense:
- Amortization for deferred financing cost – These costs
represent cash payments made at the time of issuance and are
amortized over the life of the debt. The amount and timing of these
costs is dependent upon the level of financing activities and
therefore, management does not believe they are reflective of the
run-rate for interest expense.
- Debt extinguishment costs - These costs represent cash payments
for premiums associated with prepayment of debt prior to maturity
and the acceleration of previously unrecognized deferred financing
costs. The amount and timing of these is dependent upon the level
of financing activities and therefore, management does not believe
they are reflective of the run-rate for interest expense.
- Changes in accrued interest – Represents the change in accrued
interest on our balance sheet based on the timing of the payment of
interest.
Adjusted Cash from Operations
We also present Adjusted Cash from Operations
when evaluating our performance because management believes that
the adjustment of certain additional items described below provides
useful supplemental information to investors regarding the growth
in cash flow from operations. We believe that the presentation of
Adjusted Cash from Operations, when combined with the primary GAAP
presentation of cash provided by operating activities from our
consolidated statement of cash flows, provides useful supplemental
information of cash available for acquisitions, capital
expenditures, payment of dividends, stock repurchases and other
corporate purposes. We adjust cash provided by operating activities
for the following items, which may occur in any period, and refer
to this measure as Adjusted Cash from Operations:
- Renewal and replacement capital expenditures (R&R) – Under
the terms of our contracts with our managers we are required to
provide cash for regular maintenance capital expenditures which we
define as R&R. For this reason, we deduct these required cash
expenditures in determining Adjusted Cash From Operations. These
amounts are shown in cash from investing activities in our
statement of cash flows.
- Cash debt extinguishment costs and incremental interest expense
- These costs represent cash payments for premiums associated with
prepayment of debt prior to maturity and cash interest expense
during the period subsequent to the issuance of the new debt and
prior to the repayment of the old debt. The amount and timing of
these is dependent upon the level of financing activities and
therefore, management does not believe they are reflective of the
run-rate for interest expense.
Limitations on the Use of Cash Interest Expense
and Adjusted Cash from Operations
We calculate Cash Interest Expense and Adjusted
Cash from Operations as noted above. These measures should not be
considered as an alternative to interest expense or cash provided
by operating activities determined in accordance with GAAP.
Additionally, these items should not be considered as a measure of
our liquidity or indicative of funds available to fund our cash
needs, including the ability to make cash distributions, without
consideration of the impact of the investing and financing cash
requirements that are excluded from these calculations to the
extent they are material to operating decisions.
Gregory J. Larson
Chief Financial Officer
240.744.5120
Gee Lingberg
Vice President
240.744.5275
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