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 2017.
|
OPERATING RESULTS |
(in millions, except per share and hotel
statistics) |
|
|
Quarter ended June 30, |
|
Percent |
|
Year-to-date ended June 30, |
|
Percent |
|
|
2017 |
|
|
|
2016 |
|
Change |
|
|
2017 |
|
|
|
2016 |
|
Change |
Total revenues |
$ |
1,441 |
|
|
$ |
1,459 |
|
(1.2 |
)% |
|
$ |
2,789 |
|
|
$ |
2,798 |
|
(0.3 |
)% |
Comparable hotel
revenues (1) |
|
1,310 |
|
|
|
1,312 |
|
(0.1 |
)% |
|
|
2,512 |
|
|
|
2,478 |
|
1.4 |
% |
Net income |
|
212 |
|
|
|
351 |
|
(39.6 |
)% |
|
|
373 |
|
|
|
535 |
|
(30.3 |
)% |
Adjusted EBITDA
(1) |
|
444 |
|
|
|
436 |
|
1.8 |
% |
|
|
811 |
|
|
|
782 |
|
3.7 |
% |
Change in comparable
hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
Domestic
properties |
|
1.8 |
% |
|
|
|
|
|
|
2.7 |
% |
|
|
|
|
International properties - Constant US$ |
|
(3.1 |
)% |
|
|
|
|
|
|
(5.1 |
)% |
|
|
|
|
Total -
Constant US$ |
|
1.7 |
% |
|
|
|
|
|
|
2.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
0.28 |
|
|
|
0.47 |
|
(40.4 |
)% |
|
|
0.50 |
|
|
|
0.71 |
|
(29.6 |
)% |
NAREIT FFO per diluted
share (1) |
|
0.49 |
|
|
|
0.49 |
|
— |
|
|
|
0.93 |
|
|
|
0.90 |
|
3.3 |
% |
Adjusted FFO per
diluted share (1) |
|
0.49 |
|
|
|
0.49 |
|
— |
|
|
|
0.94 |
|
|
|
0.90 |
|
4.4 |
% |
___________ |
|
|
|
|
|
|
|
|
|
|
|
(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 and other non-GAAP financial measures
identified in this press release are useful, reconciliations to the
most directly comparable GAAP measure, and the limitations on the
use of these supplemental measures.
OPERATING PERFORMANCE
& OTHER KEY HIGHLIGHTS
GAAP Metrics
- Net income decreased $139 million to $212 million for
the quarter and $162 million to $373 million for
year-to-date, primarily due to a decrease in gain on sales of
assets of $143 million and $185 million, respectively.
- Improvements in RevPAR, described below, helped drive GAAP
operating profit margin growth of 50 basis points for the quarter
and 100 basis points for year-to-date.
- Total revenues decreased 1.2% for the quarter and 0.3% for
year-to-date, primarily due to a decrease of $53 million and $117
million, respectively, due to lost revenues from the sale of 12
hotels in 2016 and 2017.
- Diluted earnings per share decreased by 40.4% for the quarter
and 29.6% for the year-to-date as a result of the decrease in net
income.
Other Metrics
- Comparable RevPAR on a constant dollar basis improved 1.7% for
the quarter, driven by a 0.8% increase in average room rate and a
70 basis point increase in occupancy to 83.2%. Year-to-date,
comparable RevPAR on a constant dollar basis improved 2.5%, driven
by a 1.6% increase in average room rate and a 70 basis point
increase in occupancy.
- Comparable hotel revenues were consistent with the Company’s
2016 second quarter, but increased 1.4% for year-to-date. For the
quarter, RevPAR improvements were offset by a decline in food and
beverage revenues.
- Comparable hotel EBITDA improved $1 million, or 0.4%, for
the quarter and $21 million, or 2.9%, year-to-date, driven by
comparable hotel EBITDA margin improvement of 15 basis points and
45 basis points, respectively.
- Adjusted EBITDA increased $8 million, or 1.8%, for the
quarter and $29 million, or 3.7%, year-to-date due to
improvement in comparable hotel EBITDA and the strong performance
of the Company’s non-comparable hotels, which was offset by the
sale of 12 hotels in 2016 and 2017.
- Adjusted FFO per diluted share was unchanged from the prior
quarter and increased 4.4% year-to-date, reflecting the operating
results described above.
Key Highlights
- Completed the sale of the Sheraton Memphis Downtown for $67
million and recorded a gain of approximately $28 million in the
second quarter. The Company expects to complete the sale of the
Hilton Melbourne South Wharf for A$230 million ($182 million) on
July 28, 2017, subject to customary closing conditions.
- Executed an amended and restated credit facility, extending the
final maturity, including extension options, which are subject to
various conditions, to 2022 for the revolver portion and the $500
million term loan that was due to mature in 2017.
“We are very pleased to post another solid
quarter of operating results, which exceeded our expectations, and
has led to an increase in the midpoint of our full-year guidance,”
said James F. Risoleo, President and Chief Executive Officer. “Our
geographically diverse portfolio of irreplaceable assets, combined
with our scale, asset management expertise, and enterprise analytic
capabilities continues to drive value for our stockholders.”
Gregory J. Larson, Chief Financial Officer
stated: “We continue to strengthen our industry-leading, investment
grade balance sheet, as evidenced by the completion of the
refinancing and extension of our credit facility. With this
extension, we have no meaningful debt maturities until September
2020. Our balance sheet remains one of our core strategic pillars,
providing the flexibility to make disciplined capital allocation
decisions.”
CAPITAL ALLOCATION
Redevelopment and Return On Investment (“ROI”)
Capital Projects
The Company deployed approximately
$16 million and $32 million in the second quarter and
year-to-date, respectively, on redevelopment and ROI capital
expenditures.
For full-year 2017, the Company expects to
invest a total of approximately $100 million to
$110 million in redevelopment projects and ROI capital
expenditures. Additional information regarding the Company’s
capital projects can be found at www.hosthotels.com.
Renewal and Replacement Expenditures
The Company deployed approximately
$47 million and $111 million in the second quarter and
year-to-date, respectively, for renewal and replacement capital
expenditures. Projects completed during the second quarter included
the renovation of 740 rooms at The Westin Los Angeles Airport and
the final phase of the rooms renovation at the Toronto Marriott
Downtown Eaton Centre Hotel.
For 2017, the Company expects to invest a total
of $275 million to $290 million in renewal and replacement
capital expenditures.
DIVIDENDS
The Company paid a regular quarterly cash
dividend of $0.20 per share on its common stock on July 17, 2017 to
stockholders of record as of June 30, 2017. All future dividends
are subject to approval by the Company’s Board of Directors. The
Company has not repurchased any shares in 2017 and has $500 million
of capacity available under its current repurchase program.
BALANCE SHEET
As reported, during the quarter, the Company
amended and restated its credit facility agreement, extending the
maturity of the revolver portion to May 2021, with two six-month
extension options. The $500 million term loan that was due to
mature in June 2017 was amended to extend the maturity to May 2021
with one 12-month extension option and to lower the interest rate
margin for an all-in rate of 2.3% on June 30, 2017. The terms of
the second $500 million term loan scheduled to mature in September
2020 remain unchanged.
At June 30, 2017, the Company had
approximately $644 million of unrestricted cash and $775
million of available capacity remaining under the revolver portion
of its credit facility. Total debt as of June 30, 2017, was
$4.0 billion, with an average maturity of 5.5 years and an
average interest rate of 3.9%.
2017 OUTLOOK
The Company anticipates that its 2017 operating
results as compared to the prior year will change in the following
range:
|
|
|
Previous Full Year 2017 Guidance |
|
Current Full Year 2017 Guidance |
|
Change in Full Year 2017 Guidance to the Mid-Point |
Total comparable hotel
RevPAR - Constant US$ |
|
0.0%
to 2.0% |
|
1.00%
to 1.75% |
|
37.5
bps |
Total revenues under
GAAP |
|
(1.8)%
to 0.1% |
|
(1.1)%
to (0.1)% |
|
25
bps |
Operating profit margin
under GAAP |
|
(50
bps) to 50 bps |
|
10 bps
to 60 bps |
|
35
bps |
Comparable hotel EBITDA
margins |
|
(60
bps) to 10 bps |
|
(15
bps) to 15 bps |
|
25
bps |
|
|
|
|
|
|
|
Based upon the above parameters, the Company
estimates its 2017 guidance as follows:
|
|
|
Previous Full Year 2017 Guidance |
|
Current Full Year 2017 Guidance |
|
Change in Full Year 2017 Guidance to the Mid-Point |
Net income (in
millions) |
|
$557
to $621 |
|
$615
to $646 |
|
$42 |
Adjusted EBITDA (in
millions) |
|
$1,425
to $1,490 |
|
$1,460
to $1,495 |
|
$20 |
Earnings per diluted
share |
|
$.73
to $.81 |
|
$.80
to $.84 |
|
$.05 |
NAREIT FFO per diluted
share |
|
$1.59
to $1.68 |
|
$1.64
to $1.68 |
|
$.02 |
Adjusted FFO per
diluted share |
|
$1.60
to $1.68 |
|
$1.64
to $1.68 |
|
$.02 |
|
|
|
|
|
|
|
See the 2017 Forecast Schedules and the Notes to
Financial Information for other assumptions used in the forecasts
and items that may affect forecast results. This guidance also
reflects the anticipated sale of one additional property during the
third quarter, subject to customary closing conditions.
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 seven properties internationally totaling
approximately 53,500 rooms. The Company also holds non-controlling
interests in seven joint ventures, including one in Europe that
owns 10 hotels with approximately 3,900 rooms. 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® and Novotel®, as well as independent brands in
the operation of properties in over 50 major markets. 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 26, 2017, 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 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, 2017, 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, 2017 |
|
|
December 31, 2016 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
Property and equipment,
net |
|
$ |
10,251 |
|
|
$ |
10,145 |
|
Assets held for
sale |
|
|
98 |
|
|
|
150 |
|
Due from managers |
|
|
120 |
|
|
|
55 |
|
Advances to and
investments in affiliates |
|
|
307 |
|
|
|
286 |
|
Furniture, fixtures and
equipment replacement fund |
|
|
192 |
|
|
|
173 |
|
Other |
|
|
240 |
|
|
|
225 |
|
Restricted cash |
|
|
2 |
|
|
|
2 |
|
Cash and cash
equivalents |
|
|
644 |
|
|
|
372 |
|
Total
assets |
|
$ |
11,854 |
|
|
$ |
11,408 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, NON-CONTROLLING INTERESTS AND
EQUITY |
|
Debt |
|
|
|
|
|
|
|
|
Senior
notes |
|
$ |
2,776 |
|
|
$ |
2,380 |
|
Credit
facility, including the term loans of $996 million and $997
million, respectively |
|
|
1,215 |
|
|
|
1,206 |
|
Mortgage
debt and other |
|
|
1 |
|
|
|
63 |
|
Total
debt |
|
|
3,992 |
|
|
|
3,649 |
|
Accounts payable and
accrued expenses |
|
|
221 |
|
|
|
278 |
|
Liabilities held for
sale |
|
|
75 |
|
|
|
— |
|
Other |
|
|
269 |
|
|
|
283 |
|
Total
liabilities |
|
|
4,557 |
|
|
|
4,210 |
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests - Host Hotels & Resorts, L.P. |
|
|
156 |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
|
Host Hotels &
Resorts, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common
stock, par value $.01, 1,050 million shares authorized, 738.8
million shares and 737.8 million shares issued and
outstanding, respectively |
|
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
|
8,102 |
|
|
|
8,077 |
|
Accumulated other comprehensive loss |
|
|
(77 |
) |
|
|
(83 |
) |
Deficit |
|
|
(931 |
) |
|
|
(1,007 |
) |
Total
equity of Host Hotels & Resorts, Inc. stockholders |
|
|
7,101 |
|
|
|
6,994 |
|
Non-controlling
interests—other consolidated partnerships |
|
|
40 |
|
|
|
39 |
|
Total
equity |
|
|
7,141 |
|
|
|
7,033 |
|
Total
liabilities, non-controlling interests and equity |
|
$ |
11,854 |
|
|
$ |
11,408 |
|
___________ |
|
|
|
|
|
|
|
|
(1) Our condensed consolidated balance sheet as
of June 30, 2017 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, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
940 |
|
|
$ |
933 |
|
|
$ |
1,783 |
|
|
$ |
1,776 |
|
Food and
beverage |
|
|
416 |
|
|
|
439 |
|
|
|
838 |
|
|
|
847 |
|
Other |
|
|
85 |
|
|
|
87 |
|
|
|
168 |
|
|
|
175 |
|
Total
revenues |
|
|
1,441 |
|
|
|
1,459 |
|
|
|
2,789 |
|
|
|
2,798 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
230 |
|
|
|
228 |
|
|
|
449 |
|
|
|
449 |
|
Food and
beverage |
|
|
275 |
|
|
|
289 |
|
|
|
552 |
|
|
|
573 |
|
Other
departmental and support expenses |
|
|
324 |
|
|
|
332 |
|
|
|
643 |
|
|
|
660 |
|
Management fees |
|
|
69 |
|
|
|
66 |
|
|
|
125 |
|
|
|
123 |
|
Other
property-level expenses |
|
|
97 |
|
|
|
100 |
|
|
|
197 |
|
|
|
193 |
|
Depreciation and amortization |
|
|
178 |
|
|
|
178 |
|
|
|
358 |
|
|
|
359 |
|
Corporate
and other expenses(2) |
|
|
26 |
|
|
|
27 |
|
|
|
55 |
|
|
|
54 |
|
Gain on
insurance and business interruption settlements |
|
|
(2 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
(3 |
) |
Total
operating costs and expenses |
|
|
1,197 |
|
|
|
1,220 |
|
|
|
2,374 |
|
|
|
2,408 |
|
Operating
profit |
|
|
244 |
|
|
|
239 |
|
|
|
415 |
|
|
|
390 |
|
Interest income |
|
|
1 |
|
|
|
— |
|
|
|
2 |
|
|
|
1 |
|
Interest expense |
|
|
(43 |
) |
|
|
(39 |
) |
|
|
(82 |
) |
|
|
(78 |
) |
Gain on sale of
assets |
|
|
29 |
|
|
|
172 |
|
|
|
46 |
|
|
|
231 |
|
Gain (loss) on foreign
currency transactions and derivatives |
|
|
— |
|
|
|
2 |
|
|
|
(2 |
) |
|
|
3 |
|
Equity in earnings of
affiliates |
|
|
8 |
|
|
|
9 |
|
|
|
15 |
|
|
|
11 |
|
Income before
income taxes |
|
|
239 |
|
|
|
383 |
|
|
|
394 |
|
|
|
558 |
|
Provision for income
taxes |
|
|
(27 |
) |
|
|
(32 |
) |
|
|
(21 |
) |
|
|
(23 |
) |
Net
income |
|
|
212 |
|
|
|
351 |
|
|
|
373 |
|
|
|
535 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
Net income
attributable to Host Inc. |
|
$ |
210 |
|
|
$ |
347 |
|
|
$ |
368 |
|
|
$ |
529 |
|
Basic and
diluted earnings per common share |
|
$ |
.28 |
|
|
$ |
.47 |
|
|
$ |
.50 |
|
|
$ |
.71 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
General and
administrative costs |
|
$ |
24 |
|
|
$ |
24 |
|
|
$ |
49 |
|
|
$ |
48 |
|
Non-cash stock-based
compensation expense |
|
|
2 |
|
|
|
3 |
|
|
|
5 |
|
|
|
6 |
|
Litigation accruals and
acquisition costs, net |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Total |
|
$ |
26 |
|
|
$ |
27 |
|
|
$ |
55 |
|
|
$ |
54 |
|
|
|
|
|
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, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net income |
|
$ |
212 |
|
|
$ |
351 |
|
|
$ |
373 |
|
|
$ |
535 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
Net income attributable
to Host Inc. |
|
$ |
210 |
|
|
$ |
347 |
|
|
$ |
368 |
|
|
$ |
529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
|
738.6 |
|
|
|
744.0 |
|
|
|
738.3 |
|
|
|
746.8 |
|
Assuming
distribution of common shares granted under the comprehensive
stock plans, less shares assumed purchased at market |
|
|
.2 |
|
|
|
.3 |
|
|
|
.2 |
|
|
|
.3 |
|
Diluted weighted
average shares outstanding (1) |
|
|
738.8 |
|
|
|
744.3 |
|
|
|
738.5 |
|
|
|
747.1 |
|
Basic and diluted
earnings per common share |
|
$ |
.28 |
|
|
$ |
.47 |
|
|
$ |
.50 |
|
|
$ |
.71 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Dilutive securities may include shares
granted under comprehensive stock plans, preferred operating
partnership units (“OP Units”) held by minority partners 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$ (by
RevPAR) |
|
|
|
|
|
As of June 30, 2017 |
|
|
|
Quarter ended June 30, 2017 |
|
|
Quarter ended June 30, 2016 |
|
|
|
|
|
Market (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Hawaii |
|
|
3 |
|
|
|
1,682 |
|
|
|
$ |
328.85 |
|
|
|
89.9 |
% |
|
$ |
295.61 |
|
|
$ |
306.58 |
|
|
|
91.3 |
% |
|
$ |
279.80 |
|
|
|
5.7 |
% |
New York |
|
|
8 |
|
|
|
6,961 |
|
|
|
|
282.83 |
|
|
|
90.8 |
|
|
|
256.92 |
|
|
|
286.61 |
|
|
|
89.8 |
|
|
|
257.49 |
|
|
|
(0.2 |
) |
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
|
267.82 |
|
|
|
89.9 |
|
|
|
240.86 |
|
|
|
257.23 |
|
|
|
86.7 |
|
|
|
223.10 |
|
|
|
8.0 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
|
251.37 |
|
|
|
89.7 |
|
|
|
225.39 |
|
|
|
224.86 |
|
|
|
84.4 |
|
|
|
189.84 |
|
|
|
18.7 |
|
San Francisco |
|
|
4 |
|
|
|
2,912 |
|
|
|
|
249.76 |
|
|
|
86.8 |
|
|
|
216.71 |
|
|
|
256.22 |
|
|
|
87.0 |
|
|
|
222.92 |
|
|
|
(2.8 |
) |
Washington, D.C. |
|
|
12 |
|
|
|
6,024 |
|
|
|
|
239.35 |
|
|
|
86.9 |
|
|
|
208.00 |
|
|
|
235.21 |
|
|
|
86.9 |
|
|
|
204.51 |
|
|
|
1.7 |
|
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
|
224.95 |
|
|
|
86.6 |
|
|
|
194.82 |
|
|
|
224.61 |
|
|
|
84.8 |
|
|
|
190.52 |
|
|
|
2.3 |
|
San Diego |
|
|
3 |
|
|
|
2,981 |
|
|
|
|
215.56 |
|
|
|
84.9 |
|
|
|
182.94 |
|
|
|
212.54 |
|
|
|
85.3 |
|
|
|
181.33 |
|
|
|
0.9 |
|
Florida |
|
|
8 |
|
|
|
4,559 |
|
|
|
|
227.44 |
|
|
|
76.9 |
|
|
|
175.00 |
|
|
|
221.10 |
|
|
|
75.9 |
|
|
|
167.90 |
|
|
|
4.2 |
|
Los Angeles |
|
|
7 |
|
|
|
2,843 |
|
|
|
|
203.41 |
|
|
|
85.1 |
|
|
|
173.20 |
|
|
|
199.62 |
|
|
|
84.2 |
|
|
|
168.10 |
|
|
|
3.0 |
|
Denver |
|
|
2 |
|
|
|
735 |
|
|
|
|
184.50 |
|
|
|
85.8 |
|
|
|
158.28 |
|
|
|
185.98 |
|
|
|
78.2 |
|
|
|
145.42 |
|
|
|
8.8 |
|
Atlanta |
|
|
5 |
|
|
|
1,939 |
|
|
|
|
189.62 |
|
|
|
79.7 |
|
|
|
151.06 |
|
|
|
191.43 |
|
|
|
81.4 |
|
|
|
155.73 |
|
|
|
(3.0 |
) |
Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
|
199.70 |
|
|
|
75.6 |
|
|
|
150.89 |
|
|
|
195.68 |
|
|
|
69.0 |
|
|
|
135.00 |
|
|
|
11.8 |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
|
175.95 |
|
|
|
71.1 |
|
|
|
125.16 |
|
|
|
190.41 |
|
|
|
75.3 |
|
|
|
143.44 |
|
|
|
(12.7 |
) |
Other |
|
|
10 |
|
|
|
6,179 |
|
|
|
|
182.60 |
|
|
|
76.1 |
|
|
|
138.89 |
|
|
|
186.67 |
|
|
|
76.0 |
|
|
|
141.95 |
|
|
|
(2.2 |
) |
Domestic |
|
|
82 |
|
|
|
46,941 |
|
|
|
|
234.59 |
|
|
|
84.0 |
|
|
|
196.97 |
|
|
|
232.54 |
|
|
|
83.2 |
|
|
|
193.46 |
|
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific |
|
|
1 |
|
|
|
384 |
|
|
|
$ |
186.41 |
|
|
|
89.5 |
% |
|
$ |
166.81 |
|
|
$ |
192.00 |
|
|
|
89.0 |
% |
|
$ |
170.88 |
|
|
|
(2.4 |
)% |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
|
179.52 |
|
|
|
65.6 |
|
|
|
117.75 |
|
|
|
164.78 |
|
|
|
64.1 |
|
|
|
105.63 |
|
|
|
11.5 |
|
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
|
175.49 |
|
|
|
60.3 |
|
|
|
105.74 |
|
|
|
191.36 |
|
|
|
64.7 |
|
|
|
123.79 |
|
|
|
(14.6 |
) |
International |
|
|
7 |
|
|
|
2,196 |
|
|
|
|
179.59 |
|
|
|
67.5 |
|
|
|
121.31 |
|
|
|
181.99 |
|
|
|
68.8 |
|
|
|
125.25 |
|
|
|
(3.1 |
) |
All
Markets - Constant US$ |
|
|
89 |
|
|
|
49,137 |
|
|
|
|
232.59 |
|
|
|
83.2 |
|
|
|
193.57 |
|
|
|
230.64 |
|
|
|
82.5 |
|
|
|
190.39 |
|
|
|
1.7 |
|
|
|
All Owned Hotels in Constant US$ (3) |
|
|
|
As of June 30, 2017 |
|
|
Quarter ended June 30, 2017 |
|
|
Quarter ended June 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
89 |
|
|
|
49,137 |
|
|
$ |
232.59 |
|
|
|
83.2 |
% |
|
$ |
193.57 |
|
|
$ |
230.64 |
|
|
|
82.5 |
% |
|
$ |
190.39 |
|
|
|
1.7 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
7 |
|
|
|
4,203 |
|
|
|
242.81 |
|
|
|
78.3 |
|
|
|
190.02 |
|
|
|
243.76 |
|
|
|
70.3 |
|
|
|
171.42 |
|
|
|
10.9 |
|
All
Hotels |
|
|
96 |
|
|
|
53,340 |
|
|
|
233.35 |
|
|
|
82.8 |
|
|
|
193.29 |
|
|
|
231.53 |
|
|
|
81.6 |
|
|
|
188.90 |
|
|
|
2.3 |
|
|
|
Comparable Hotels in Nominal US$ |
|
|
|
As of June 30, 2017 |
|
|
Quarter ended June 30, 2017 |
|
|
Quarter ended June 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Asia-Pacific |
|
|
1 |
|
|
|
384 |
|
|
$ |
186.41 |
|
|
|
89.5 |
% |
|
$ |
166.81 |
|
|
$ |
190.69 |
|
|
|
89.0 |
% |
|
$ |
169.72 |
|
|
|
(1.7 |
)% |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
179.52 |
|
|
|
65.6 |
|
|
|
117.75 |
|
|
|
171.79 |
|
|
|
64.1 |
|
|
|
110.12 |
|
|
|
6.9 |
|
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
175.49 |
|
|
|
60.3 |
|
|
|
105.74 |
|
|
|
185.97 |
|
|
|
64.7 |
|
|
|
120.30 |
|
|
|
(12.1 |
) |
International |
|
|
7 |
|
|
|
2,196 |
|
|
|
179.59 |
|
|
|
67.5 |
|
|
|
121.31 |
|
|
|
181.99 |
|
|
|
68.8 |
|
|
|
125.25 |
|
|
|
(3.1 |
) |
Domestic |
|
|
82 |
|
|
|
46,941 |
|
|
|
234.59 |
|
|
|
84.0 |
|
|
|
196.97 |
|
|
|
232.54 |
|
|
|
83.2 |
|
|
|
193.46 |
|
|
|
1.8 |
|
All
Markets |
|
|
89 |
|
|
|
49,137 |
|
|
|
232.59 |
|
|
|
83.2 |
|
|
|
193.57 |
|
|
|
230.64 |
|
|
|
82.5 |
|
|
|
190.39 |
|
|
|
1.7 |
|
|
|
HOST HOTELS & RESORTS, INC. |
|
Hotel Operating Data for Consolidated Hotels
(1) |
|
|
|
Comparable Hotels by Market in Constant US$ (by
RevPAR) |
|
|
|
|
|
As of June 30, 2017 |
|
|
Year-to-date ended June 30, 2017 |
|
|
Year-to-date ended June 30, 2016 |
|
|
|
|
|
Market (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Hawaii |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
347.37 |
|
|
|
90.1 |
% |
|
$ |
312.88 |
|
|
$ |
331.22 |
|
|
|
90.9 |
% |
|
$ |
301.22 |
|
|
|
3.9 |
% |
New York |
|
|
8 |
|
|
|
6,961 |
|
|
|
258.82 |
|
|
|
84.4 |
|
|
|
218.46 |
|
|
|
262.20 |
|
|
|
84.7 |
|
|
|
222.17 |
|
|
|
(1.7 |
) |
San Francisco |
|
|
4 |
|
|
|
2,912 |
|
|
|
262.86 |
|
|
|
82.2 |
|
|
|
215.99 |
|
|
|
270.86 |
|
|
|
83.6 |
|
|
|
226.32 |
|
|
|
(4.6 |
) |
Florida |
|
|
8 |
|
|
|
4,559 |
|
|
|
257.48 |
|
|
|
78.8 |
|
|
|
202.88 |
|
|
|
251.99 |
|
|
|
79.3 |
|
|
|
199.95 |
|
|
|
1.5 |
|
Washington, D.C. |
|
|
12 |
|
|
|
6,024 |
|
|
|
239.79 |
|
|
|
79.9 |
|
|
|
191.67 |
|
|
|
222.39 |
|
|
|
78.8 |
|
|
|
175.16 |
|
|
|
9.4 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
227.60 |
|
|
|
83.3 |
|
|
|
189.65 |
|
|
|
207.14 |
|
|
|
77.3 |
|
|
|
160.04 |
|
|
|
18.5 |
|
Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
236.06 |
|
|
|
78.4 |
|
|
|
184.97 |
|
|
|
239.66 |
|
|
|
73.7 |
|
|
|
176.61 |
|
|
|
4.7 |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
232.73 |
|
|
|
79.4 |
|
|
|
184.80 |
|
|
|
225.61 |
|
|
|
77.9 |
|
|
|
175.80 |
|
|
|
5.1 |
|
San Diego |
|
|
3 |
|
|
|
2,981 |
|
|
|
221.74 |
|
|
|
83.1 |
|
|
|
184.32 |
|
|
|
208.91 |
|
|
|
83.3 |
|
|
|
174.11 |
|
|
|
5.9 |
|
Los Angeles |
|
|
7 |
|
|
|
2,843 |
|
|
|
204.59 |
|
|
|
83.7 |
|
|
|
171.29 |
|
|
|
201.18 |
|
|
|
83.3 |
|
|
|
167.69 |
|
|
|
2.1 |
|
Atlanta |
|
|
5 |
|
|
|
1,939 |
|
|
|
194.27 |
|
|
|
79.2 |
|
|
|
153.89 |
|
|
|
193.70 |
|
|
|
78.9 |
|
|
|
152.83 |
|
|
|
0.7 |
|
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
192.54 |
|
|
|
75.1 |
|
|
|
144.56 |
|
|
|
192.82 |
|
|
|
72.8 |
|
|
|
140.32 |
|
|
|
3.0 |
|
Denver |
|
|
2 |
|
|
|
735 |
|
|
|
176.39 |
|
|
|
78.9 |
|
|
|
139.13 |
|
|
|
176.50 |
|
|
|
71.2 |
|
|
|
125.69 |
|
|
|
10.7 |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
184.50 |
|
|
|
74.6 |
|
|
|
137.70 |
|
|
|
189.23 |
|
|
|
76.6 |
|
|
|
144.99 |
|
|
|
(5.0 |
) |
Other |
|
|
10 |
|
|
|
6,179 |
|
|
|
183.95 |
|
|
|
74.9 |
|
|
|
137.78 |
|
|
|
183.76 |
|
|
|
72.6 |
|
|
|
133.48 |
|
|
|
3.2 |
|
Domestic |
|
|
82 |
|
|
|
46,941 |
|
|
|
232.06 |
|
|
|
80.3 |
|
|
|
186.29 |
|
|
|
228.24 |
|
|
|
79.4 |
|
|
|
181.32 |
|
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia-Pacific |
|
|
1 |
|
|
|
384 |
|
|
$ |
205.69 |
|
|
|
90.2 |
% |
|
$ |
185.43 |
|
|
$ |
209.82 |
|
|
|
89.0 |
% |
|
$ |
186.84 |
|
|
|
(0.8 |
)% |
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
183.43 |
|
|
|
59.5 |
|
|
|
109.18 |
|
|
|
198.04 |
|
|
|
65.7 |
|
|
|
130.17 |
|
|
|
(16.1 |
) |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
170.08 |
|
|
|
59.1 |
|
|
|
100.43 |
|
|
|
161.53 |
|
|
|
57.4 |
|
|
|
92.74 |
|
|
|
8.3 |
|
International |
|
|
7 |
|
|
|
2,196 |
|
|
|
184.30 |
|
|
|
64.8 |
|
|
|
119.49 |
|
|
|
188.78 |
|
|
|
66.7 |
|
|
|
125.94 |
|
|
|
(5.1 |
) |
All
Markets - Constant US$ |
|
|
89 |
|
|
|
49,137 |
|
|
|
230.31 |
|
|
|
79.6 |
|
|
|
183.29 |
|
|
|
226.74 |
|
|
|
78.9 |
|
|
|
178.83 |
|
|
|
2.5 |
|
|
|
All Owned Hotels in Constant US$ (3) |
|
|
|
As of June 30, 2017 |
|
|
Year-to-date ended June 30, 2017 |
|
|
Year-to-date ended June 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
89 |
|
|
|
49,137 |
|
|
$ |
230.31 |
|
|
|
79.6 |
% |
|
$ |
183.29 |
|
|
$ |
226.74 |
|
|
|
78.9 |
% |
|
$ |
178.83 |
|
|
|
2.5 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
7 |
|
|
|
4,203 |
|
|
|
259.81 |
|
|
|
77.6 |
|
|
|
201.66 |
|
|
|
256.27 |
|
|
|
69.4 |
|
|
|
177.75 |
|
|
|
13.5 |
|
All
Hotels |
|
|
96 |
|
|
|
53,340 |
|
|
|
232.58 |
|
|
|
79.4 |
|
|
|
184.74 |
|
|
|
228.80 |
|
|
|
78.1 |
|
|
|
178.74 |
|
|
|
3.4 |
|
|
|
Comparable Hotels in Nominal US$ |
|
|
|
As of June 30, 2017 |
|
|
Year-to-date ended June 30, 2017 |
|
|
Year-to-date ended June 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Asia-Pacific |
|
|
1 |
|
|
|
384 |
|
|
$ |
205.69 |
|
|
|
90.2 |
% |
|
$ |
185.43 |
|
|
$ |
203.72 |
|
|
|
89.0 |
% |
|
$ |
181.41 |
|
|
|
2.2 |
% |
Latin America |
|
|
4 |
|
|
|
963 |
|
|
|
183.43 |
|
|
|
59.5 |
|
|
|
109.18 |
|
|
|
188.38 |
|
|
|
65.7 |
|
|
|
123.82 |
|
|
|
(11.8 |
) |
Canada |
|
|
2 |
|
|
|
849 |
|
|
|
170.08 |
|
|
|
59.1 |
|
|
|
100.43 |
|
|
|
163.04 |
|
|
|
57.4 |
|
|
|
93.60 |
|
|
|
7.3 |
|
International |
|
|
7 |
|
|
|
2,196 |
|
|
|
184.30 |
|
|
|
64.8 |
|
|
|
119.49 |
|
|
|
183.67 |
|
|
|
66.7 |
|
|
|
122.53 |
|
|
|
(2.5 |
) |
Domestic |
|
|
82 |
|
|
|
46,941 |
|
|
|
232.06 |
|
|
|
80.3 |
|
|
|
186.29 |
|
|
|
228.24 |
|
|
|
79.4 |
|
|
|
181.32 |
|
|
|
2.7 |
|
All
Markets |
|
|
89 |
|
|
|
49,137 |
|
|
|
230.31 |
|
|
|
79.6 |
|
|
|
183.29 |
|
|
|
226.54 |
|
|
|
78.9 |
|
|
|
178.67 |
|
|
|
2.6 |
|
(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. (3) Operating statistics are
presented for all consolidated properties owned as of June 30,
2017 and do not include the results of operations for properties
sold in 2017 or 2016. 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. See the Notes to Financial
Information for further information on these pro forma statistics
and the limitations on their use.
- Non-comparable hotels (pro forma) - This represents five hotels
under significant renovations in either 2016 or 2017: The Axiom
Hotel, the Hyatt Regency San Francisco Airport, the Denver Marriott
Tech Center, the Marriott Marquis San Diego Marina and the
Phoenician. It also includes the Don CeSar and W Hollywood,
acquired in 2017, which are presented on a pro forma basis assuming
we owned the hotels as of January 1, 2016 and includes historical
operating data for periods prior to our ownership. As a result, the
RevPAR increase of 10.9% and 13.5% for the quarter and
year-to-date, respectively, for these seven hotels is considered
non-comparable.
|
|
HOST HOTELS & RESORTS,
INC. |
|
Hotel Operating Data – European Joint
Venture |
|
|
|
|
|
|
As of June 30, 2017 |
|
|
Quarter ended June 30, 2017 |
|
|
Quarter ended June 30, 2016 |
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Total comparable
- in Constant Euros (1) |
|
|
|
10 |
|
|
|
3,902 |
|
|
€ |
234.49 |
|
|
|
84.6 |
% |
|
€ |
198.43 |
|
|
€ |
228.36 |
|
|
|
80.3 |
% |
|
€ |
183.47 |
|
|
|
8.2 |
% |
Total comparable
- in Nominal Euros (1) |
|
|
|
10 |
|
|
|
3,902 |
|
|
|
234.49 |
|
|
|
84.6 |
|
|
|
198.43 |
|
|
|
231.33 |
|
|
|
80.3 |
|
|
|
185.86 |
|
|
|
6.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2017 |
|
|
Year-to-date ended June 30, 2017 |
|
|
Year-to-date ended June 30, 2016 |
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Total comparable
- in Constant Euros (1) |
|
|
|
10 |
|
|
|
3,902 |
|
|
€ |
215.26 |
|
|
|
76.5 |
% |
|
€ |
164.65 |
|
|
€ |
211.32 |
|
|
|
72.0 |
% |
|
€ |
152.05 |
|
|
|
8.3 |
% |
Total comparable
- in Nominal Euros (1) |
|
|
|
10 |
|
|
|
3,902 |
|
|
|
215.26 |
|
|
|
76.5 |
|
|
|
164.65 |
|
|
|
214.22 |
|
|
|
72.0 |
|
|
|
154.13 |
|
|
|
6.8 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total comparable statistics include the
operating performance for all 10 properties in the joint venture
(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, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Number of hotels |
|
|
89 |
|
|
|
89 |
|
|
|
89 |
|
|
|
89 |
|
Number of rooms |
|
|
49,137 |
|
|
|
49,137 |
|
|
|
49,137 |
|
|
|
49,137 |
|
Change in comparable
hotel RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
US$ |
|
|
1.7 |
% |
|
|
— |
|
|
|
2.5 |
% |
|
|
— |
|
Nominal
US$ |
|
|
1.7 |
% |
|
|
— |
|
|
|
2.6 |
% |
|
|
— |
|
Operating profit margin
(2) |
|
|
16.9 |
% |
|
|
16.4 |
% |
|
|
14.9 |
% |
|
|
13.9 |
% |
Comparable hotel EBITDA
margin (2) |
|
|
31.0 |
% |
|
|
30.85 |
% |
|
|
29.0 |
% |
|
|
28.55 |
% |
Food and beverage
profit margin (2) |
|
|
33.9 |
% |
|
|
34.2 |
% |
|
|
34.1 |
% |
|
|
32.3 |
% |
Comparable hotel food
and beverage profit margin (2) |
|
|
34.2 |
% |
|
|
34.5 |
% |
|
|
33.7 |
% |
|
|
32.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
212 |
|
|
$ |
351 |
|
|
$ |
373 |
|
|
$ |
535 |
|
Depreciation and
amortization |
|
|
178 |
|
|
|
178 |
|
|
|
358 |
|
|
|
359 |
|
Interest expense |
|
|
43 |
|
|
|
39 |
|
|
|
82 |
|
|
|
78 |
|
Provision for income
taxes |
|
|
27 |
|
|
|
32 |
|
|
|
21 |
|
|
|
23 |
|
Gain on sale of
property and corporate level income/expense |
|
|
(12 |
) |
|
|
(156 |
) |
|
|
(6 |
) |
|
|
(192 |
) |
Non-comparable hotel
results, net (3) |
|
|
(42 |
) |
|
|
(39 |
) |
|
|
(100 |
) |
|
|
(96 |
) |
Comparable
hotel EBITDA |
|
$ |
406 |
|
|
$ |
405 |
|
|
$ |
728 |
|
|
$ |
707 |
|
|
|
|
|
|
|
Quarter ended June 30, 2017 |
|
|
Quarter ended June 30, 2016 |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
940 |
|
|
$ |
(74 |
) |
|
$ |
— |
|
|
$ |
866 |
|
|
$ |
933 |
|
|
$ |
(81 |
) |
|
$ |
— |
|
|
$ |
852 |
|
Food and
beverage |
|
|
416 |
|
|
|
(42 |
) |
|
|
— |
|
|
|
374 |
|
|
|
439 |
|
|
|
(48 |
) |
|
|
— |
|
|
|
391 |
|
Other |
|
|
85 |
|
|
|
(15 |
) |
|
|
— |
|
|
|
70 |
|
|
|
87 |
|
|
|
(18 |
) |
|
|
— |
|
|
|
69 |
|
Total
revenues |
|
|
1,441 |
|
|
|
(131 |
) |
|
|
— |
|
|
|
1,310 |
|
|
|
1,459 |
|
|
|
(147 |
) |
|
|
— |
|
|
|
1,312 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
230 |
|
|
|
(18 |
) |
|
|
— |
|
|
|
212 |
|
|
|
228 |
|
|
|
(21 |
) |
|
|
— |
|
|
|
207 |
|
Food and
beverage |
|
|
275 |
|
|
|
(29 |
) |
|
|
— |
|
|
|
246 |
|
|
|
289 |
|
|
|
(33 |
) |
|
|
— |
|
|
|
256 |
|
Other |
|
|
490 |
|
|
|
(44 |
) |
|
|
— |
|
|
|
446 |
|
|
|
498 |
|
|
|
(54 |
) |
|
|
— |
|
|
|
444 |
|
Depreciation and amortization |
|
|
178 |
|
|
|
— |
|
|
|
(178 |
) |
|
|
— |
|
|
|
178 |
|
|
|
— |
|
|
|
(178 |
) |
|
|
— |
|
Corporate
and other expenses |
|
|
26 |
|
|
|
— |
|
|
|
(26 |
) |
|
|
— |
|
|
|
27 |
|
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
Gain on
insurance and business interruption settlements |
|
|
(2 |
) |
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total
expenses |
|
|
1,197 |
|
|
|
(89 |
) |
|
|
(204 |
) |
|
|
904 |
|
|
|
1,220 |
|
|
|
(108 |
) |
|
|
(205 |
) |
|
|
907 |
|
Operating
Profit - Comparable Hotel
EBITDA |
|
$ |
244 |
|
|
$ |
(42 |
) |
|
$ |
204 |
|
|
$ |
406 |
|
|
$ |
239 |
|
|
$ |
(39 |
) |
|
$ |
205 |
|
|
$ |
405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS,
INC. |
|
Schedule of Comparable Hotel Results
(1) |
|
(unaudited, in millions, except hotel statistics) |
|
|
|
|
|
Year-to-date ended June 30, 2017 |
|
|
Year-to-date ended June 30, 2016 |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
1,783 |
|
|
$ |
(152 |
) |
|
$ |
— |
|
|
$ |
1,631 |
|
|
$ |
1,776 |
|
|
$ |
(178 |
) |
|
$ |
— |
|
|
$ |
1,598 |
|
Food and
beverage |
|
|
838 |
|
|
|
(94 |
) |
|
|
— |
|
|
|
744 |
|
|
|
847 |
|
|
|
(102 |
) |
|
|
— |
|
|
|
745 |
|
Other |
|
|
168 |
|
|
|
(31 |
) |
|
|
— |
|
|
|
137 |
|
|
|
175 |
|
|
|
(40 |
) |
|
|
— |
|
|
|
135 |
|
Total
revenues |
|
|
2,789 |
|
|
|
(277 |
) |
|
|
— |
|
|
|
2,512 |
|
|
|
2,798 |
|
|
|
(320 |
) |
|
|
— |
|
|
|
2,478 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
449 |
|
|
|
(35 |
) |
|
|
— |
|
|
|
414 |
|
|
|
449 |
|
|
|
(44 |
) |
|
|
— |
|
|
|
405 |
|
Food and
beverage |
|
|
552 |
|
|
|
(59 |
) |
|
|
— |
|
|
|
493 |
|
|
|
573 |
|
|
|
(69 |
) |
|
|
— |
|
|
|
504 |
|
Other |
|
|
965 |
|
|
|
(88 |
) |
|
|
— |
|
|
|
877 |
|
|
|
976 |
|
|
|
(114 |
) |
|
|
— |
|
|
|
862 |
|
Depreciation and amortization |
|
|
358 |
|
|
|
— |
|
|
|
(358 |
) |
|
|
— |
|
|
|
359 |
|
|
|
— |
|
|
|
(359 |
) |
|
|
— |
|
Corporate
and other expenses |
|
|
55 |
|
|
|
— |
|
|
|
(55 |
) |
|
|
— |
|
|
|
54 |
|
|
|
— |
|
|
|
(54 |
) |
|
|
— |
|
Gain on
insurance and business interruption settlements |
|
|
(5 |
) |
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
3 |
|
|
|
— |
|
|
|
— |
|
Total
expenses |
|
|
2,374 |
|
|
|
(177 |
) |
|
|
(413 |
) |
|
|
1,784 |
|
|
|
2,408 |
|
|
|
(224 |
) |
|
|
(413 |
) |
|
|
1,771 |
|
Operating
Profit –
Comparable Hotel
EBITDA |
|
$ |
415 |
|
|
$ |
(100 |
) |
|
$ |
413 |
|
|
$ |
728 |
|
|
$ |
390 |
|
|
$ |
(96 |
) |
|
$ |
413 |
|
|
$ |
707 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) 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 condensed consolidated statements of operations. Comparable
hotel margins are calculated using amounts presented in the above
tables. (3) 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 condensed consolidated statements of operations as
continuing operations, (ii) gains on insurance settlements and
business interruption proceeds, and (iii) the results of our
office spaces and other non-hotel income.
|
HOST HOTELS & RESORTS,
INC. |
Other Financial Data |
(unaudited, in millions, except per share
amounts) |
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
Equity |
|
|
|
|
|
|
|
|
|
Common
shares outstanding |
|
|
738.8 |
|
|
|
737.8 |
|
Common
shares outstanding assuming conversion of OP Units (1) |
|
|
747.3 |
|
|
|
746.5 |
|
Preferred
OP Units outstanding |
|
|
.02 |
|
|
|
.02 |
|
|
|
|
|
|
|
|
|
|
|
Security
pricing |
|
|
|
|
|
|
|
|
|
Common
stock (2) |
|
$ |
18.27 |
|
|
$ |
18.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year-to-date ended |
|
|
|
|
|
June 30, |
|
June 30, |
Dividends declared per common share |
|
|
|
|
|
|
|
|
2017 |
|
|
|
|
$ |
.20 |
|
|
$ |
.40 |
|
2016 |
|
|
|
|
|
.20 |
|
|
|
.40 |
|
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
|
|
|
Senior
debt |
Rate |
|
Maturity date |
|
June 30, 2017 |
|
December 31, 2016 |
Series Z |
6 |
% |
|
10/2021 |
|
$ |
298 |
|
|
$ |
297 |
|
Series B |
5 1⁄4% |
|
3/2022 |
|
|
347 |
|
|
|
347 |
|
Series C |
4 3⁄4% |
|
3/2023 |
|
|
446 |
|
|
|
446 |
|
Series D |
3 3⁄4% |
|
10/2023 |
|
|
398 |
|
|
|
398 |
|
Series E |
4 |
% |
|
6/2025 |
|
|
496 |
|
|
|
496 |
|
Series F |
4 1⁄2% |
|
2/2026 |
|
|
396 |
|
|
|
396 |
|
Series G |
3 7⁄8% |
|
4/2024 |
|
|
395 |
|
|
|
— |
|
2017 Credit facility
term loan |
2.3 |
% |
|
5/2021 |
|
|
498 |
|
|
|
500 |
|
2015 Credit facility
term loan |
2.3 |
% |
|
9/2020 |
|
|
498 |
|
|
|
497 |
|
Credit facility
revolver (3) |
1.6 |
% |
|
5/2021 |
|
|
219 |
|
|
|
209 |
|
|
|
|
|
|
|
3,991 |
|
|
|
3,586 |
|
Mortgage debt and
other |
|
|
|
|
|
|
|
|
|
Mortgage debt and other
(non-recourse) |
— |
|
|
— |
|
|
1 |
|
|
|
63 |
|
Total debt (4)(5) |
|
|
|
|
|
$ |
3,992 |
|
|
$ |
3,649 |
|
Percentage of fixed
rate debt |
|
|
|
|
|
|
68 |
% |
|
|
65 |
% |
Weighted average
interest rate |
|
|
|
|
|
|
3.9 |
% |
|
|
3.8 |
% |
Weighted average debt
maturity |
|
|
|
|
|
|
5.5 years |
|
|
5.2 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecast Full Year 2017 |
|
|
|
Forecast GAAP interest
expense (6) |
|
|
|
|
|
$ |
170 |
|
|
|
|
Forecast cash interest,
net (6) |
|
|
|
|
|
$ |
161 |
|
|
|
|
Forecast GAAP cash
provided by operating activities (7) |
|
|
|
|
|
$ |
1,240 |
|
|
|
|
Forecast adjusted cash
from operations (7) |
|
|
|
|
|
$ |
957 |
|
|
|
|
___________ |
|
|
|
|
|
|
|
|
|
(1) Each OP Unit is redeemable for cash or, at
our option, for 1.021494 common shares of Host Inc. At
June 30, 2017 and December 31, 2016, there were
8.3 million and 8.6 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, 2017. (4)
Total debt excludes the mortgage loan on the Hilton Melbourne South
Wharf of $66 million which is classified as a liability held for
sale. 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, 2017, our non-controlling partners’ share of a
mortgage loan classified as a liability held for sale is
$17 million and our share of debt in unconsolidated
investments is $403 million. (5) Total debt as of
June 30, 2017 and December 31, 2016 includes net
discounts and deferred financing costs of $33 million and
$25 million, respectively. (6) Reflects 2017 forecast cash
interest expense, net of debt extinguishment costs, as of the
balance sheet date. The following chart reconciles GAAP interest
expense to forecast cash interest expense for Forecast Full Year
2017. See footnote (1) to the Reconciliation of Net Income to
EBITDA, Adjusted EBITDA and NAREIT and Adjusted Funds From
Operations per diluted share for 2017 Forecasts for full year
forecast assumptions:
Forecast GAAP interest
expense full year 2017 |
|
$ |
170 |
|
Amortization of
deferred financing costs |
|
|
(7 |
) |
Change in accrued
interest |
|
|
(2 |
) |
Forecast cash interest
full year 2017, net |
|
$ |
161 |
|
See the Notes to Financial Information for a discussion of
non-GAAP measures.
(7) The following chart reconciles Forecast Full Year 2017
GAAP cash provided by operating activities to forecast adjusted
cash from operations:
|
|
Forecast Full Year 2017 |
|
Forecast GAAP cash
provided by operating activities |
|
$ |
1,240 |
|
Renewal and replacement
expenditures |
|
|
(283 |
) |
Forecast adjusted cash
from operations |
|
$ |
957 |
|
See the Notes to Financial Information for a discussion of
non-GAAP measures.
|
|
|
|
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, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net income
(2) |
|
$ |
212 |
|
|
$ |
351 |
|
|
$ |
373 |
|
|
$ |
535 |
|
Interest
expense |
|
|
43 |
|
|
|
39 |
|
|
|
82 |
|
|
|
78 |
|
Depreciation and amortization |
|
|
178 |
|
|
|
178 |
|
|
|
358 |
|
|
|
359 |
|
Income
taxes |
|
|
27 |
|
|
|
32 |
|
|
|
21 |
|
|
|
23 |
|
EBITDA
(2) |
|
|
460 |
|
|
|
600 |
|
|
|
834 |
|
|
|
995 |
|
Gain on
dispositions (3) |
|
|
(28 |
) |
|
|
(172 |
) |
|
|
(43 |
) |
|
|
(230 |
) |
Gain on
property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(8 |
) |
|
|
(9 |
) |
|
|
(15 |
) |
|
|
(11 |
) |
Pro rata
Adjusted EBITDA of equity investments |
|
|
22 |
|
|
|
20 |
|
|
|
39 |
|
|
|
35 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata
Adjusted EBITDA attributable to non-controlling partners in
other consolidated partnerships |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
Adjusted EBITDA
(2) |
|
$ |
444 |
|
|
$ |
436 |
|
|
$ |
811 |
|
|
$ |
782 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 each of the year-to-date
periods ended June 30, 2017 and 2016 for the sale of the
portion of land attributable to individual units sold by the Maui
timeshare joint venture. (3) Reflects the sale of two hotels in
2017 and the sale of eight hotels in 2016.
|
|
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, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net
income (2) |
|
$ |
212 |
|
|
$ |
351 |
|
|
$ |
373 |
|
|
$ |
535 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
Net income
attributable to Host Inc. |
|
|
210 |
|
|
|
347 |
|
|
|
368 |
|
|
|
529 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
dispositions (3) |
|
|
(28 |
) |
|
|
(172 |
) |
|
|
(43 |
) |
|
|
(230 |
) |
Tax on
dispositions |
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
9 |
|
Gain on
property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Depreciation and amortization |
|
|
177 |
|
|
|
177 |
|
|
|
357 |
|
|
|
357 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(8 |
) |
|
|
(9 |
) |
|
|
(15 |
) |
|
|
(11 |
) |
Pro rata
FFO of equity investments |
|
|
15 |
|
|
|
16 |
|
|
|
28 |
|
|
|
26 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partnerships |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
FFO
adjustments for non-controlling interests of Host L.P. |
|
|
(2 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
(1 |
) |
NAREIT FFO
(2) |
|
|
363 |
|
|
|
367 |
|
|
|
689 |
|
|
|
675 |
|
Adjustments to NAREIT
FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Loss on
debt extinguishment |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Adjusted FFO
(2) |
|
$ |
364 |
|
|
$ |
367 |
|
|
$ |
691 |
|
|
$ |
675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation
on a per share basis(4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding - EPS,
NAREIT FFO and Adjusted FFO |
|
|
738.8 |
|
|
|
744.3 |
|
|
|
738.5 |
|
|
|
747.1 |
|
NAREIT FFO per
diluted share |
|
$ |
.49 |
|
|
$ |
.49 |
|
|
$ |
.93 |
|
|
$ |
.90 |
|
Adjusted FFO
per diluted share |
|
$ |
.49 |
|
|
$ |
.49 |
|
|
$ |
.94 |
|
|
$ |
.90 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
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 Share for 2017 Forecasts (1) |
|
(unaudited, in millions, except per share amounts) |
|
|
|
|
|
Full Year 2017 |
|
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
|
$ |
615 |
|
|
$ |
646 |
|
Interest
expense |
|
|
170 |
|
|
|
170 |
|
Depreciation and amortization |
|
|
717 |
|
|
|
717 |
|
Income
taxes |
|
|
50 |
|
|
|
54 |
|
EBITDA |
|
|
1,552 |
|
|
|
1,587 |
|
Gain on
dispositions |
|
|
(129 |
) |
|
|
(129 |
) |
Acquisition costs |
|
|
1 |
|
|
|
1 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(22 |
) |
|
|
(22 |
) |
Pro rata
Adjusted EBITDA of equity investments |
|
|
67 |
|
|
|
67 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
Pro rata
Adjusted EBITDA attributable to non-controlling partners in other
consolidated partnerships |
|
|
(9 |
) |
|
|
(9 |
) |
Adjusted
EBITDA |
|
$ |
1,460 |
|
|
$ |
1,495 |
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2017 |
|
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
|
$ |
615 |
|
|
$ |
646 |
|
Less: Net income
attributable to non-controlling interests |
|
|
(26 |
) |
|
|
(26 |
) |
Net income
attributable to Host Inc. |
|
|
589 |
|
|
|
620 |
|
Gain on
dispositions |
|
|
(129 |
) |
|
|
(129 |
) |
Depreciation and amortization |
|
|
713 |
|
|
|
713 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(22 |
) |
|
|
(22 |
) |
Pro rata
FFO of equity investments |
|
|
49 |
|
|
|
49 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partners in other consolidated
partnerships |
|
|
15 |
|
|
|
15 |
|
FFO
adjustment for non-controlling interests of Host LP |
|
|
(7 |
) |
|
|
(7 |
) |
NAREIT
FFO |
|
|
1,208 |
|
|
|
1,239 |
|
Acquisition costs |
|
|
1 |
|
|
|
1 |
|
Loss on
debt extinguishments |
|
|
1 |
|
|
|
1 |
|
Adjusted
FFO |
|
$ |
1,210 |
|
|
$ |
1,241 |
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares - EPS, NAREIT and Adjusted FFO |
|
|
738.8 |
|
|
|
738.8 |
|
Earnings per
diluted share |
|
$ |
0.80 |
|
|
$ |
0.84 |
|
NAREIT FFO per
diluted share |
|
$ |
1.64 |
|
|
$ |
1.68 |
|
Adjusted FFO
per diluted share |
|
$ |
1.64 |
|
|
$ |
1.68 |
|
___________ |
|
|
|
|
|
|
|
|
(1) The forecasts are based on the below
assumptions:
- Total comparable hotel RevPAR in constant US$ will increase
1.0% to 1.75% 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 decrease 15 basis points
or increase 15 basis points for the low and high ends of the
forecasted range, respectively.
- We expect to spend approximately $100 million to
$110 million on ROI/redevelopment capital expenditures and
approximately $275 million to $290 million on renewal and
replacement expenditures.
- The above forecast reflects the anticipated sale of the Hilton
Melbourne South Wharf on July 28, 2017 and one additional property
that is under contract. The sales are subject to various closing
conditions which may not be satisfied. There can be no assurances
that the 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 2017 Forecasts (1) |
|
(unaudited, in millions, except hotel statistics) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2017 |
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Operating
profit margin (2) |
|
|
|
12.7 |
% |
|
|
13.2 |
% |
Comparable
hotel EBITDA margin (3) |
|
|
|
27.6 |
% |
|
|
27.9 |
% |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
615 |
|
|
$ |
646 |
|
Depreciation and amortization |
|
|
|
717 |
|
|
|
717 |
|
Interest
expense |
|
|
|
170 |
|
|
|
170 |
|
Provision
for income taxes |
|
|
|
50 |
|
|
|
54 |
|
Gain on
sale of property and corporate level income/expense |
|
|
|
(45 |
) |
|
|
(46 |
) |
Non-comparable hotel results, net(4) |
|
|
|
(176 |
) |
|
|
(183 |
) |
Comparable hotel EBITDA |
|
|
$ |
1,331 |
|
|
$ |
1,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,480 |
|
|
$ |
(313 |
) |
|
$ |
— |
|
|
$ |
3,167 |
|
Food and Beverage |
|
|
1,561 |
|
|
|
(176 |
) |
|
|
— |
|
|
|
1,385 |
|
Other |
|
|
331 |
|
|
|
(61 |
) |
|
|
— |
|
|
|
270 |
|
Total Revenues |
|
|
5,372 |
|
|
|
(550 |
) |
|
|
— |
|
|
|
4,822 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,870 |
|
|
|
(379 |
) |
|
|
— |
|
|
|
3,491 |
|
Depreciation |
|
|
717 |
|
|
|
— |
|
|
|
(717 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
106 |
|
|
|
— |
|
|
|
(106 |
) |
|
|
— |
|
Gain on insurance and business interruption settlements |
|
|
(5 |
) |
|
|
5 |
|
|
|
— |
|
|
|
— |
|
Total expenses |
|
|
4,688 |
|
|
|
(374 |
) |
|
|
(823 |
) |
|
|
3,491 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
684 |
|
|
$ |
(176 |
) |
|
$ |
823 |
|
|
$ |
1,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,506 |
|
|
$ |
(315 |
) |
|
$ |
— |
|
|
$ |
3,191 |
|
Food and Beverage |
|
|
1,585 |
|
|
|
(180 |
) |
|
|
— |
|
|
|
1,405 |
|
Other |
|
|
335 |
|
|
|
(62 |
) |
|
|
— |
|
|
|
273 |
|
Total Revenues |
|
|
5,426 |
|
|
|
(557 |
) |
|
|
— |
|
|
|
4,869 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,890 |
|
|
|
(379 |
) |
|
|
— |
|
|
|
3,511 |
|
Depreciation and amortization |
|
|
717 |
|
|
|
— |
|
|
|
(717 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
106 |
|
|
|
— |
|
|
|
(106 |
) |
|
|
— |
|
Gain on insurance and business interruption settlements |
|
|
(5 |
) |
|
|
5 |
|
|
|
— |
|
|
|
— |
|
Total expenses |
|
|
4,708 |
|
|
|
(374 |
) |
|
|
(823 |
) |
|
|
3,511 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
718 |
|
|
$ |
(183 |
) |
|
$ |
823 |
|
|
$ |
1,358 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Forecast comparable hotel results include 87
hotels that we have assumed will be classified as comparable as of
December 31, 2017. 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 2017.
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 2017 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
condensed consolidated statements of operations. (3) Comparable
hotel EBITDA margin is calculated as the comparable hotel EBITDA
divided by the comparable hotel sales per the tables above. (4)
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 condensed
consolidated statements of operations as continuing operations,
(ii) gains on insurance settlements and business interruption
proceeds, and (iii) the results of our office spaces other
non-hotel income. The following hotels are considered
non-comparable for full-year forecast:
Acquisitions (includes forecast results from date of
acquisition through year-end):
- The Don CeSar and Beach House Suites complex
- W Hollywood
Renovations:
- Denver Marriott Tech Center
- Hyatt Regency San Francisco
- Marriott Marquis San Diego Marina
- The Phoenician
- Axiom Hotel
Dispositions or properties under
contract (includes forecast or actual results from January 1, 2017
through the anticipated or actual sale date):
- JW Marriott Desert Springs Resort & Spa
- Sheraton Memphis Downtown
- Hilton Melbourne South Wharf
- One unspecified disposition
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,
comparable hotel EBITDA margins and cash from operations 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.
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 Don CeSar in February
2017. The hotel will not be included in our comparable hotels until
January 1, 2019. 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 96 hotels that we owned on
June 30, 2017, 89 have been classified as comparable hotels.
The operating results of the following hotels that we owned as of
June 30, 2017 are excluded from comparable hotel results for
these periods:
- 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);
- 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);
- 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, beginning in the
second quarter of 2016, business disruption due to extensive
renovations, including all guestrooms and suites, a redesign of the
lobby and public areas, renovation of pools, recreation areas and a
restaurant and a re-configured spa and fitness center);
- Axiom Hotel (acquired as the Powell Hotel in January 2014, then
closed during 2015 for extensive renovations and reopened in
January 2016);
- The Don CeSar and Beach House Suites complex (acquired in
February 2017); and
- W Hollywood (acquired in March 2017).
The operating results of 12 hotels disposed of
in 2017 and 2016 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 9 and
10.
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 two hotels acquired in
2017 are included in the all owned hotel operating data on a pro
forma basis, which includes operating results assuming the hotels
were owned as of January 1, 2016 and based on actual results
obtained from the manager for periods prior to our ownership. For
these hotels, 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 market. This division is generally
consistent with groupings recognized in the lodging industry.
Our markets consist of the following:
Domestic
- Atlanta – Atlanta Metropolitan area;
- Boston – Greater Boston Metropolitan area;
- Chicago – Chicago Metropolitan area;
- Denver – Denver Metropolitan area;
- Florida – All Florida locations;
- Hawaii – All Hawaii locations;
- Houston – Houston Metropolitan area;
- Los Angeles – Greater Los Angeles area, including Orange
County;
- New York – Greater New York Metropolitan area, including
northern New Jersey;
- Phoenix – Phoenix Metropolitan area, including Scottsdale;
- San Diego – San Diego Metropolitan area;
- San Francisco – Greater San Francisco Metropolitan area,
including San Jose;
- Seattle – Seattle Metropolitan area;
- Washington, D.C. – Metropolitan area, including the Maryland
and Virginia suburbs; and
- Other – Select cities in California, Indiana, Louisiana,
Minnesota, Ohio, Pennsylvania, Tennessee and Texas.
International
- Asia-Pacific – Australia;
- Canada – Toronto and Calgary; and
- Latin America – Brazil and Mexico.
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.
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.
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.
Similarly, Adjusted EBITDA, NAREIT FFO and
Adjusted FFO per diluted share include adjustments for the pro rata
share of our equity investments and non-controlling partners in
consolidated partnerships. Our equity investments primarily consist
of our approximate one-third interest in a European joint venture,
a 25% interest in an Asian joint venture, a 67% ownership in a
joint venture that owns a vacation ownership property in Hawaii and
interests ranging from 11% to 50% in three partnerships that each
own one hotel. Due to the voting rights of the outside owners, we
do not control and, therefore, do not consolidate these entities.
The non-controlling partners in consolidated partnerships primarily
consist of the approximate 1% interest in Host LP held by outside
partners and interests ranging from 15% to 48% held by outside
partners in three partnerships each owning one hotel for which we
do control the entity and, therefore, consolidate its operations.
These pro rata results for Adjusted EBITDA were calculated as set
forth in the definition above under “Equity Investment Adjustments”
and ”Consolidated Partnership Adjustments.” Similar adjustments
were made in the calculation of both NAREIT FFO and Adjusted FFO
per diluted share. Readers should be cautioned that the pro rata
results presented in these measures for consolidated and
non-consolidated partnerships may not accurately depict the legal
and economic implications of our investments in these entities.
Comparable Hotel Property Level Operating
Results
We present certain operating results for our
hotels, such as hotel revenues, expenses, food and beverage profit,
and EBITDA (and the related margins), 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 and original issue
discounts/premiums – These costs represent cash payments or
principal discounts or premiums 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
Bret D.S. McLeod, Senior Vice President
240.744.5216
Gee Lingberg, Vice President
240.744.5275
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