Host Hotels & Resorts, Inc. (NYSE:HST) (“Host Hotels” or the
“Company”), the nation’s largest lodging real estate investment
trust (“REIT”), today announced that RevPAR for the third quarter
matched its expectations despite the unexpected impact of
Hurricanes Harvey and Irma and it anticipates a rebound in fourth
quarter operations.
James F. Risoleo, President and Chief Executive Officer, said,
“Our enterprise analytics and asset management teams did an
outstanding job driving productivity and decreasing expenses during
a quarter that was challenging due to the holiday shift and severe
weather. Our continued focus on productivity improvements in rooms
and food and beverage led to operating results that were better
than we would have expected with this level of RevPAR. While
Hurricanes Harvey and Irma meaningfully impacted operations, our
team did an excellent job working with our operators and getting
our properties back on-line. We are pleased with our solid
performance and look forward to building on our progress to deliver
significant value creation for Host Hotels’
stockholders.”
Operating Results(in millions,
except per share and hotel statistics)
|
|
Quarter endedSeptember 30, |
|
Percent |
|
Year-to-date endedSeptember 30, |
|
Percent |
|
|
|
2017 |
|
|
|
2016 |
|
Change |
|
|
2017 |
|
|
|
2016 |
|
Change |
Total revenues |
|
$ |
1,254 |
|
|
$ |
1,295 |
|
(3.2 |
)% |
|
$ |
4,043 |
|
|
$ |
4,093 |
|
(1.2 |
)% |
Comparable hotel
revenues (1) |
|
|
1,136 |
|
|
|
1,166 |
|
(2.6 |
)% |
|
|
3,621 |
|
|
|
3,616 |
|
0.1 |
% |
Net income |
|
|
105 |
|
|
|
108 |
|
(2.8 |
)% |
|
|
478 |
|
|
|
643 |
|
(25.7 |
)% |
Adjusted EBITDA
(1) |
|
|
317 |
|
|
|
342 |
|
(7.3 |
)% |
|
|
1,128 |
|
|
|
1,123 |
|
0.4 |
% |
Change in comparable
hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
properties |
|
|
(0.7 |
)% |
|
|
|
|
|
|
1.6 |
% |
|
|
|
|
International properties - Constant US$ |
|
|
(31.0 |
)% |
|
|
|
|
|
|
(17.6 |
)% |
|
|
|
|
Total -
Constant US$ |
|
|
(1.8 |
)% |
|
|
|
|
|
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
-- |
|
|
$ |
0.64 |
|
|
$ |
0.85 |
|
(24.7 |
)% |
NAREIT FFO and Adjusted
FFO per diluted share (1) |
|
|
0.33 |
|
|
|
0.37 |
|
(10.8 |
)% |
|
|
1.27 |
|
|
|
1.28 |
|
(0.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Highlights for the Quarter
The Company’s strategic goal is to be the preeminent owner of
high-quality lodging real estate and to generate superior long-term
returns for its stockholders. During the quarter, the Company
executed on the following activities to enhance its portfolio and
drive value:
- The Company announced key organizational changes by promoting
Nathan S. Tyrrell to the role of Executive Vice President and Chief
Investment Officer, with responsibility for asset management and
investments. Mr. Tyrrell’s 12-year history with the Company and
knowledge of the business make him uniquely qualified to identify
strategic investments and direct a more fully integrated investment
and asset management organization that will further strengthen and
differentiate the Company’s portfolio. Additionally, in conjunction
with the retirement of Gregory J. Larson as Chief Financial Officer
later this month, the Company has named Michael D. Bluhm as his
successor, who brings 25 years of investment banking experience in
the lodging and leisure industry.
- Completed the sale of the Sheraton Indianapolis Hotel at
Keystone Crossing for $66 million and the Hilton Melbourne South
Wharf for A$230 million ($184 million) and recorded a total gain,
net of Australian capital gains tax, of approximately $36 million
in the third quarter. The sale of the Hilton Melbourne completes
the Company’s strategic exit from the Pacific region. On a smaller
scale, subsequent to quarter end, the Company also sold the land at
the Chicago Marriott O’Hare for approximately $10 million.
- The Company is under contract to sell the Key Bridge Marriott
for $190 million, including $8 million for FF&E
replacement funds. The sale is expected to close by the end of the
first quarter 2018, subject to customary closing conditions. As one
of the sites near Washington, D.C. with the best potential for
redevelopment, the Company worked closely with numerous
stakeholders to enhance its value. The buyer is expected to
redevelop the site for retail, residential and lodging.
- The Company has obtained approvals for the rezoning of the golf
course land at The Phoenician, A Luxury Collection Resort, subject
to customary appeals. The Company’s revised masterplan includes an
18-hole golf course, new tennis complex and activity center and
allows for 60 acres of residential development. The approved plan
allows for a mix of single-family, townhome and condominium units
with approximately 360 units. The property is being marketed to
third parties for the residential development.
- Negotiated new management agreements for two properties in the
quarter, including the re-branding of The Ritz-Carlton, Buckhead in
Atlanta to The Whitley, a Luxury Collection Hotel, that will be
managed by HEI Hotels & Resorts. The Company continues to look
for opportunities to drive individual hotel performance and create
management agreement flexibility by appropriately matching a hotel
and its operator, brand and contract terms, including expanding
relationships with independent operators.
(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 PerformanceGAAP Metrics
- Net income decreased $3 million to $105 million for the quarter
due to a decline in operating profit of 11.8%, partially offset by
the increase in gain on sale of assets, net of tax. Year-to-date,
net income decreased $165 million to $478 million primarily due to
the decrease in gain on sale of assets, net of tax.
- GAAP operating profit margin declined 100 basis points for the
quarter and increased 40 basis points for year-to-date, primarily
reflecting the difficult year-over-year comparisons in Brazil and
the effects of the hurricanes.
- Total revenues decreased 3.2% for the quarter and 1.2% for
year-to-date, primarily due to a decrease of $39 million and $157
million, respectively, due to lost revenues from the sale of 14
hotels in 2016 and 2017. In addition, Hurricanes Harvey and Irma
are estimated to have negatively affected total revenues by
approximately $12 million this quarter, with approximately 65% of
lost revenue coming from a decline in food and beverage
revenues.
- Diluted earnings per share remained consistent for the quarter
and decreased by 24.7% for the year-to-date as a result of the
above changes to net income.
Other Metrics
- Comparable RevPAR on a constant dollar basis decreased 1.8% for
the quarter, due to a 1.5% decrease in average room rate and a 30
basis point decrease in occupancy to 81.1%. Comparable RevPAR
for the quarter was negatively impacted by 110 basis points as a
result of difficult year-over-year comparisons in Brazil, which
hosted the 2016 Summer Olympics. Further, Hurricanes Harvey and
Irma are estimated to have negatively affected comparable RevPAR
for the quarter by 45 basis points. Year-to-date, comparable RevPAR
on a constant dollar basis improved 1.0%, driven by a 0.6%
increase in average room rate and a 40 basis point increase in
occupancy. Comparable hotel revenues decreased 2.6% for the third
quarter and were essentially flat year-to-date.
- Comparable hotel EBITDA decreased $17 million, or 5.3%,
for the quarter. Year-to-date, comparable hotel EBITDA increased $5
million, or 0.5%.
- For the quarter, comparable hotel EBITDA margin declined 75
basis points; however, approximately 85% of the decline is due to
the difficult year-over-year comparisons of the properties in
Brazil and the estimated effects of the hurricanes in the quarter.
Year-to-date, comparable hotel EBITDA has benefited from a margin
improvement of 10 basis points and an increase in comparable hotel
food and beverage profit margin.
- Adjusted EBITDA decreased $25 million, or 7.3%, for the
quarter while year-to-date, Adjusted EBITDA increased $5 million,
or 0.4%. Based on actual results compared to the anticipated
results for the quarter, the Company estimates that the impact of
the hurricanes was approximately $7 million in the quarter for both
net income and Adjusted EBITDA.
- Adjusted FFO per diluted share decreased 10.8% for the quarter
and 0.8% year-to-date, reflecting the operating results described
above and an increase in interest expense due to the issuance of
the Series G Senior Notes earlier in the year.
Hurricanes Harvey and Irma
As previously discussed and reflected in the figures above, the
Company’s operations were affected by Hurricanes Harvey and Irma in
the third quarter and continue to be impacted by damages sustained
during the storms. All four of the Company’s hotels in Houston
remained operational during the hurricane. In Florida, due to
evacuation mandates and loss of commercial power, seven of the
Company’s nine consolidated properties were temporarily closed,
however, all have since reopened, although approximately 320 rooms
remain out of service. Based on the operating readiness and level
of property damage sustained, the Company did not remove any
properties from its comparable operations for the quarter and its
full year forecast. The Company is still evaluating the complete
property and business interruption impacts of the storms.
Capital Allocation
Redevelopment and Return On Investment (“ROI”) Capital
ProjectsThe Company deployed approximately $21 million and $53
million in the third quarter and year-to-date, respectively, on
redevelopment and ROI capital expenditures. During the third
quarter, the Company completed the pool renovation and restaurant
repositioning at The Phoenician as part of a multi-year project, as
well as the redesign of restaurant and meeting space at The
Ritz-Carlton, Buckhead.
For full-year 2017, the Company expects to invest a total of
approximately $90 million to $100 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 ExpendituresThe Company deployed
approximately $44 million and $155 million in the third quarter and
year-to-date, respectively, for renewal and replacement capital
expenditures. Projects completed during the third quarter included
the renovation of the 48,000-square foot ballroom at the New
Orleans Marriott, as well as ballroom renovations at the JW
Marriott Hotel Mexico City, the JW Marriott Atlanta Buckhead and
The Ritz-Carlton, Naples.
For 2017, the Company expects to invest a total of $270 million
to $300 million in renewal and replacement capital expenditures,
which includes additional expected spend related to replacements
for hurricane damage.
Dividends The Company paid a regular quarterly
cash dividend of $0.20 per share on its common stock on October 16,
2017 to stockholders of record as of September 29, 2017. All
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 “We continue to maintain a very
strong balance sheet, which provides optionality and ample
financial flexibility to continue creating value for stockholders,”
said Gregory J. Larson, Executive Vice President and Chief
Financial Officer.
At September 30, 2017, the Company had approximately $789
million of unrestricted cash and $807 million of available capacity
remaining under the revolver portion of its credit facility. During
the quarter, the Company repaid A$50 million ($39 million) on the
revolver portion of its credit facility and the A$86 million ($69
million) mortgage loan in connection with the sale of the Hilton
Melbourne South Wharf. Total debt as of September 30, 2017, was
$4.0 billion, with an average maturity of 5.4 years and an average
interest rate of 3.9%.
2017 Outlook
The Company anticipates that its 2017 operating results as
compared to the prior year will change in the following
range:
|
|
|
Previous Full Year 2017 Guidance |
|
Current Full Year 2017 Guidance |
|
Change in Full Year 2017 Guidance to the Mid-Point |
Total comparable hotel
RevPAR - Constant US$ |
|
|
1.0%
to 1.75% |
|
1.15%
to 1.35% |
|
(12.5
bps) |
Total revenues under
GAAP |
|
|
(1.1)%
to (0.1)% |
|
(1.0)%
to (0.8)% |
|
(30
bps) |
Operating profit margin
under GAAP |
|
|
10 bps
to 60 bps |
|
30 bps
to 50 bps |
|
5
bps |
Comparable hotel EBITDA
margins |
|
|
(15
bps) to 15 bps |
|
0 bps to 10 bps |
|
5
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) |
|
$615
to $646 |
|
$580
to $590 |
|
$(46) |
Adjusted EBITDA (in
millions) |
|
$1,460
to $1,495 |
|
$1,470
to $1,480 |
|
$(2.5) |
Earnings per diluted
share |
|
$.80
to $.84 |
|
$.78
to $.79 |
|
$(.04) |
NAREIT FFO per diluted
share |
|
$1.64
to $1.68 |
|
$1.65
to $1.66 |
|
$(.01) |
Adjusted FFO per
diluted share |
|
$1.64
to $1.68 |
|
$1.65
to $1.67 |
|
$-- |
|
|
|
|
|
|
|
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.
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 88 properties in the United States and six
properties internationally totaling approximately 52,500 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 November 1, 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 September 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)
|
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
Property and equipment,
net |
|
$ |
10,014 |
|
|
$ |
10,145 |
|
Assets held for
sale |
|
|
67 |
|
|
|
150 |
|
Due from managers |
|
|
116 |
|
|
|
55 |
|
Advances to and
investments in affiliates |
|
|
319 |
|
|
|
286 |
|
Furniture, fixtures and
equipment replacement fund |
|
|
183 |
|
|
|
173 |
|
Other |
|
|
283 |
|
|
|
225 |
|
Restricted cash |
|
|
-- |
|
|
|
2 |
|
Cash and cash
equivalents. |
|
|
789 |
|
|
|
372 |
|
Total
assets |
|
$ |
11,771 |
|
|
$ |
11,408 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, NON-CONTROLLING INTERESTS AND
EQUITY |
|
Debt |
|
|
|
|
|
|
|
|
Senior
notes |
|
$ |
2,777 |
|
|
$ |
2,380 |
|
Credit
facility, including the term loans of $996 million and $997
million, respectively |
|
|
1,184 |
|
|
|
1,206 |
|
Mortgage
debt and other |
|
|
-- |
|
|
|
63 |
|
Total
debt |
|
|
3,961 |
|
|
|
3,649 |
|
Accounts payable and
accrued expenses |
|
|
250 |
|
|
|
278 |
|
Other |
|
|
295 |
|
|
|
283 |
|
Total
liabilities |
|
|
4,506 |
|
|
|
4,210 |
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests - Host Hotels & Resorts, L.P. |
|
|
157 |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
|
Host Hotels &
Resorts, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common
stock, par value $.01, 1,050 million shares authorized, 738.9
million shares and 737.8 million shares issued and
outstanding, respectively |
|
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
|
8,103 |
|
|
|
8,077 |
|
Accumulated other comprehensive loss |
|
|
(57 |
) |
|
|
(83 |
) |
Deficit |
|
|
(974 |
) |
|
|
(1,007 |
) |
Total
equity of Host Hotels & Resorts, Inc. stockholders |
|
|
7,079 |
|
|
|
6,994 |
|
Non-controlling
interests--other consolidated partnerships |
|
|
29 |
|
|
|
39 |
|
Total
equity |
|
|
7,108 |
|
|
|
7,033 |
|
Total
liabilities, non-controlling interests and equity |
|
$ |
11,771 |
|
|
$ |
11,408 |
|
___________ |
|
|
|
|
|
|
|
|
(1) Our condensed consolidated balance sheet as of
September 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 endedSeptember 30, |
|
|
Year-to-date endedSeptember 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
860 |
|
|
$ |
879 |
|
|
$ |
2,643 |
|
|
$ |
2,655 |
|
Food and
beverage |
|
|
314 |
|
|
|
336 |
|
|
|
1,152 |
|
|
|
1,183 |
|
Other |
|
|
80 |
|
|
|
80 |
|
|
|
248 |
|
|
|
255 |
|
Total
revenues |
|
|
1,254 |
|
|
|
1,295 |
|
|
|
4,043 |
|
|
|
4,093 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
227 |
|
|
|
225 |
|
|
|
676 |
|
|
|
674 |
|
Food and
beverage |
|
|
242 |
|
|
|
257 |
|
|
|
794 |
|
|
|
830 |
|
Other
departmental and support expenses |
|
|
309 |
|
|
|
321 |
|
|
|
952 |
|
|
|
981 |
|
Management fees |
|
|
53 |
|
|
|
54 |
|
|
|
178 |
|
|
|
177 |
|
Other
property-level expenses |
|
|
97 |
|
|
|
96 |
|
|
|
294 |
|
|
|
289 |
|
Depreciation and amortization |
|
|
176 |
|
|
|
182 |
|
|
|
534 |
|
|
|
541 |
|
Corporate
and other expenses(2) |
|
|
24 |
|
|
|
28 |
|
|
|
79 |
|
|
|
82 |
|
Gain on
insurance and business interruption settlements |
|
|
(1 |
) |
|
|
(12 |
) |
|
|
(6 |
) |
|
|
(15 |
) |
Total
operating costs and expenses |
|
|
1,127 |
|
|
|
1,151 |
|
|
|
3,501 |
|
|
|
3,559 |
|
Operating
profit |
|
|
127 |
|
|
|
144 |
|
|
|
542 |
|
|
|
534 |
|
Interest income |
|
|
2 |
|
|
|
-- |
|
|
|
4 |
|
|
|
2 |
|
Interest expense |
|
|
(43 |
) |
|
|
(38 |
) |
|
|
(125 |
) |
|
|
(116 |
) |
Gain on sale of
assets |
|
|
59 |
|
|
|
14 |
|
|
|
105 |
|
|
|
245 |
|
Gain (loss) on foreign
currency transactions and derivatives |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
1 |
|
Equity in earnings of
affiliates |
|
|
4 |
|
|
|
8 |
|
|
|
19 |
|
|
|
19 |
|
Income before
income taxes |
|
|
147 |
|
|
|
127 |
|
|
|
541 |
|
|
|
685 |
|
Provision for income
taxes |
|
|
(42 |
) |
|
|
(19 |
) |
|
|
(63 |
) |
|
|
(42 |
) |
Net
income |
|
|
105 |
|
|
|
108 |
|
|
|
478 |
|
|
|
643 |
|
Less: Net income
attributable to non-controlling interests. |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
$ |
104 |
|
|
$ |
107 |
|
|
$ |
472 |
|
|
$ |
636 |
|
Basic and
diluted earnings per common share |
|
$ |
.14 |
|
|
$ |
.14 |
|
|
$ |
.64 |
|
|
$ |
.85 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 endedSeptember 30, |
|
|
Year-to-date ended September 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
2016 |
|
General and
administrative costs |
|
$ |
21 |
|
|
$ |
26 |
|
|
$ |
70 |
|
$ |
74 |
|
Non-cash stock-based
compensation expense |
|
|
3 |
|
|
|
2 |
|
|
|
8 |
|
|
8 |
|
Litigation accruals and
acquisition costs, net |
|
|
-- |
|
|
|
-- |
|
|
|
1 |
|
|
-- |
|
Total |
|
$ |
24 |
|
|
$ |
28 |
|
|
$ |
79 |
|
$ |
82 |
|
HOST HOTELS & RESORTS,
INC.Earnings per Common Share (unaudited,
in millions, except per share amounts)
|
|
|
Quarter endedSeptember 30, |
|
|
Year-to-date endedSeptember 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net income |
|
$ |
105 |
|
|
$ |
108 |
|
|
$ |
478 |
|
|
$ |
643 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
Net income attributable
to Host Inc. |
|
$ |
104 |
|
|
$ |
107 |
|
|
$ |
472 |
|
|
$ |
636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
|
738.8 |
|
|
|
740.6 |
|
|
|
738.5 |
|
|
|
744.8 |
|
Assuming
distribution of common shares granted under the comprehensive
stock plans, less shares assumed purchased at market |
|
|
.2 |
|
|
|
.5 |
|
|
|
.2 |
|
|
|
.4 |
|
Diluted weighted
average shares outstanding (1) |
|
|
739.0 |
|
|
|
741.1 |
|
|
|
738.7 |
|
|
|
745.2 |
|
Basic and diluted
earnings per common share |
|
$ |
.14 |
|
|
$ |
.14 |
|
|
$ |
.64 |
|
|
$ |
.85 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30, 2017 |
|
Quarter ended September 30, 2017 |
|
|
Quarter ended September 30, 2016 |
|
|
|
Market (2) |
|
No. ofProperties |
|
No. ofRooms |
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
PercentChange inRevPAR |
|
Hawaii |
|
3 |
|
1,682 |
|
$ |
325.44 |
|
|
92.4 |
% |
|
$ |
300.75 |
|
|
$ |
316.67 |
|
|
92.5 |
% |
|
$ |
292.77 |
|
2.7 |
% |
Seattle |
|
2 |
|
1,315 |
|
|
267.84 |
|
|
93.6 |
|
|
|
250.75 |
|
|
|
258.78 |
|
|
90.9 |
|
|
|
235.26 |
|
6.6 |
|
New York |
|
8 |
|
6,961 |
|
|
271.00 |
|
|
91.3 |
|
|
|
247.53 |
|
|
|
280.23 |
|
|
89.8 |
|
|
|
251.75 |
|
(1.7 |
) |
San Francisco |
|
4 |
|
2,912 |
|
|
256.52 |
|
|
89.4 |
|
|
|
229.21 |
|
|
|
252.99 |
|
|
86.8 |
|
|
|
219.71 |
|
4.3 |
|
Boston |
|
4 |
|
3,185 |
|
|
244.72 |
|
|
88.5 |
|
|
|
216.68 |
|
|
|
242.48 |
|
|
90.5 |
|
|
|
219.42 |
|
(1.2 |
) |
San Diego |
|
3 |
|
2,981 |
|
|
225.90 |
|
|
86.5 |
|
|
|
195.47 |
|
|
|
213.13 |
|
|
91.4 |
|
|
|
194.80 |
|
0.3 |
|
Los Angeles |
|
7 |
|
2,843 |
|
|
214.72 |
|
|
87.7 |
|
|
|
188.40 |
|
|
|
216.17 |
|
|
86.9 |
|
|
|
187.75 |
|
0.3 |
|
Chicago |
|
6 |
|
2,392 |
|
|
204.47 |
|
|
88.5 |
|
|
|
180.94 |
|
|
|
216.88 |
|
|
87.0 |
|
|
|
188.71 |
|
(4.1 |
) |
Denver |
|
2 |
|
735 |
|
|
190.27 |
|
|
88.6 |
|
|
|
168.50 |
|
|
|
189.33 |
|
|
85.5 |
|
|
|
161.91 |
|
4.1 |
|
Washington, D.C. |
|
12 |
|
6,024 |
|
|
193.93 |
|
|
82.5 |
|
|
|
160.05 |
|
|
|
193.50 |
|
|
81.4 |
|
|
|
157.43 |
|
1.7 |
|
Atlanta |
|
5 |
|
1,939 |
|
|
189.32 |
|
|
75.9 |
|
|
|
143.69 |
|
|
|
189.85 |
|
|
80.3 |
|
|
|
152.43 |
|
(5.7 |
) |
Florida |
|
8 |
|
4,559 |
|
|
181.83 |
|
|
62.1 |
|
|
|
112.92 |
|
|
|
182.06 |
|
|
68.0 |
|
|
|
123.72 |
|
(8.7 |
) |
Houston |
|
4 |
|
1,716 |
|
|
168.11 |
|
|
66.3 |
|
|
|
111.49 |
|
|
|
167.78 |
|
|
67.7 |
|
|
|
113.58 |
|
(1.8 |
) |
Phoenix |
|
4 |
|
1,518 |
|
|
142.34 |
|
|
65.7 |
|
|
|
93.47 |
|
|
|
147.53 |
|
|
58.0 |
|
|
|
85.57 |
|
9.2 |
|
Other |
|
9 |
|
5,784 |
|
|
160.58 |
|
|
71.9 |
|
|
|
115.42 |
|
|
|
169.12 |
|
|
71.5 |
|
|
|
120.96 |
|
(4.6 |
) |
Domestic |
|
81 |
|
46,546 |
|
|
219.88 |
|
|
81.6 |
|
|
|
179.38 |
|
|
|
221.01 |
|
|
81.8 |
|
|
|
180.69 |
|
(0.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
2 |
|
849 |
|
|
192.87 |
|
|
79.4 |
|
|
|
153.11 |
|
|
|
198.84 |
|
|
76.7 |
|
|
|
152.45 |
|
0.4 |
|
Latin America |
|
4 |
|
962 |
|
|
167.13 |
|
|
58.7 |
|
|
|
98.08 |
|
|
|
299.89 |
|
|
67.9 |
|
|
|
203.58 |
|
(51.8 |
) |
International |
|
6 |
|
1,811 |
|
|
181.13 |
|
|
68.4 |
|
|
|
123.87 |
|
|
|
249.47 |
|
|
72.0 |
|
|
|
179.62 |
|
(31.0 |
) |
All
Markets - Constant US$ |
|
87 |
|
48,357 |
|
|
218.65 |
|
|
81.1 |
|
|
|
177.30 |
|
|
|
221.95 |
|
|
81.4 |
|
|
|
180.65 |
|
(1.8 |
) |
All Owned Hotels in Constant US$ (3)
|
|
As of September 30, 2017 |
|
|
Quarter ended September 30, 2017 |
|
|
Quarter ended September 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
87 |
|
|
|
48,357 |
|
|
$ |
218.65 |
|
|
|
81.1 |
% |
|
$ |
177.30 |
|
|
$ |
221.95 |
|
|
|
81.4 |
% |
|
$ |
180.65 |
|
|
|
(1.8 |
)% |
Non-comparable Hotels
(Pro forma) |
|
|
7 |
|
|
|
4,203 |
|
|
|
224.97 |
|
|
|
76.4 |
|
|
|
171.82 |
|
|
|
232.68 |
|
|
|
72.2 |
|
|
|
167.93 |
|
|
|
2.3 |
|
All
Hotels |
|
|
94 |
|
|
|
52,560 |
|
|
|
219.13 |
|
|
|
80.7 |
|
|
|
176.87 |
|
|
|
222.72 |
|
|
|
80.7 |
|
|
|
179.63 |
|
|
|
(1.5 |
) |
Comparable Hotels in Nominal US$
|
|
As of September 30, 2017 |
|
|
Quarter ended September 30, 2017 |
|
|
Quarter ended September 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Canada |
|
|
2 |
|
|
|
849 |
|
|
$ |
192.87 |
|
|
|
79.4 |
% |
|
$ |
153.11 |
|
|
$ |
191.03 |
|
|
|
76.7 |
% |
|
$ |
146.46 |
|
|
|
4.5 |
% |
Latin America |
|
|
4 |
|
|
|
962 |
|
|
|
167.13 |
|
|
|
58.7 |
|
|
|
98.08 |
|
|
|
290.57 |
|
|
|
67.9 |
|
|
|
197.25 |
|
|
|
(50.3 |
) |
International |
|
|
6 |
|
|
|
1,811 |
|
|
|
181.13 |
|
|
|
68.4 |
|
|
|
123.87 |
|
|
|
240.91 |
|
|
|
72.0 |
|
|
|
173.45 |
|
|
|
(28.6 |
) |
Domestic |
|
|
81 |
|
|
|
46,546 |
|
|
|
219.88 |
|
|
|
81.6 |
|
|
|
179.38 |
|
|
|
221.01 |
|
|
|
81.8 |
|
|
|
180.69 |
|
|
|
(0.7 |
) |
All
Markets |
|
|
87 |
|
|
|
48,357 |
|
|
|
218.65 |
|
|
|
81.1 |
|
|
|
177.30 |
|
|
|
221.67 |
|
|
|
81.4 |
|
|
|
180.41 |
|
|
|
(1.7 |
) |
HOST HOTELS & RESORTS,
INC.Hotel Operating Data for Consolidated Hotels
(1)
Comparable Hotels by Market in Constant US$ (by
RevPAR)
|
|
As of September 30, 2017 |
|
|
Year-to-date ended September 30, 2017 |
|
|
Year-to-date ended September 30, 2016 |
|
|
|
|
Market (2) |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Hawaii |
|
3 |
|
|
1,682 |
|
|
$ |
339.86 |
|
|
90.9 |
% |
|
$ |
308.79 |
|
|
$ |
326.28 |
|
|
91.4 |
% |
|
$ |
298.38 |
|
|
3.5 |
% |
New York |
|
8 |
|
|
6,961 |
|
|
|
263.14 |
|
|
86.7 |
|
|
|
228.26 |
|
|
|
268.49 |
|
|
86.4 |
|
|
|
232.10 |
|
|
(1.7 |
) |
San Francisco |
|
4 |
|
|
2,912 |
|
|
|
260.60 |
|
|
84.6 |
|
|
|
220.45 |
|
|
|
264.71 |
|
|
84.7 |
|
|
|
224.10 |
|
|
(1.6 |
) |
Seattle |
|
2 |
|
|
1,315 |
|
|
|
242.23 |
|
|
86.8 |
|
|
|
210.24 |
|
|
|
226.40 |
|
|
81.8 |
|
|
|
185.30 |
|
|
13.5 |
|
Boston |
|
4 |
|
|
3,185 |
|
|
|
237.07 |
|
|
82.5 |
|
|
|
195.54 |
|
|
|
231.85 |
|
|
82.1 |
|
|
|
190.45 |
|
|
2.7 |
|
San Diego |
|
3 |
|
|
2,981 |
|
|
|
223.18 |
|
|
84.3 |
|
|
|
188.08 |
|
|
|
210.42 |
|
|
86.0 |
|
|
|
181.05 |
|
|
3.9 |
|
Washington, D.C. |
|
12 |
|
|
6,024 |
|
|
|
224.01 |
|
|
80.8 |
|
|
|
181.02 |
|
|
|
212.48 |
|
|
79.6 |
|
|
|
169.20 |
|
|
7.0 |
|
Los Angeles |
|
7 |
|
|
2,843 |
|
|
|
208.11 |
|
|
85.1 |
|
|
|
177.05 |
|
|
|
206.35 |
|
|
84.5 |
|
|
|
174.42 |
|
|
1.5 |
|
Florida |
|
8 |
|
|
4,559 |
|
|
|
235.84 |
|
|
73.2 |
|
|
|
172.56 |
|
|
|
230.87 |
|
|
75.5 |
|
|
|
174.35 |
|
|
(1.0 |
) |
Chicago |
|
6 |
|
|
2,392 |
|
|
|
197.01 |
|
|
79.6 |
|
|
|
156.82 |
|
|
|
201.88 |
|
|
77.6 |
|
|
|
156.57 |
|
|
0.2 |
|
Phoenix |
|
4 |
|
|
1,518 |
|
|
|
208.06 |
|
|
74.1 |
|
|
|
154.14 |
|
|
|
213.44 |
|
|
68.4 |
|
|
|
146.04 |
|
|
5.5 |
|
Atlanta |
|
5 |
|
|
1,939 |
|
|
|
192.65 |
|
|
78.1 |
|
|
|
150.46 |
|
|
|
192.39 |
|
|
79.4 |
|
|
|
152.70 |
|
|
(1.5 |
) |
Denver |
|
2 |
|
|
735 |
|
|
|
181.43 |
|
|
82.1 |
|
|
|
149.03 |
|
|
|
181.35 |
|
|
76.0 |
|
|
|
137.85 |
|
|
8.1 |
|
Houston |
|
4 |
|
|
1,716 |
|
|
|
179.40 |
|
|
71.8 |
|
|
|
128.87 |
|
|
|
182.61 |
|
|
73.6 |
|
|
|
134.44 |
|
|
(4.1 |
) |
Other |
|
9 |
|
|
5,784 |
|
|
|
177.70 |
|
|
74.2 |
|
|
|
131.85 |
|
|
|
180.51 |
|
|
72.4 |
|
|
|
130.72 |
|
|
0.9 |
|
Domestic |
|
81 |
|
|
46,546 |
|
|
|
228.30 |
|
|
80.8 |
|
|
|
184.44 |
|
|
|
226.16 |
|
|
80.3 |
|
|
|
181.55 |
|
|
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada |
|
2 |
|
|
849 |
|
|
|
179.33 |
|
|
65.9 |
|
|
|
118.18 |
|
|
|
176.57 |
|
|
63.9 |
|
|
|
112.79 |
|
|
4.8 |
|
Latin America |
|
4 |
|
|
962 |
|
|
|
177.99 |
|
|
59.2 |
|
|
|
105.44 |
|
|
|
232.98 |
|
|
66.5 |
|
|
|
154.82 |
|
|
(31.9 |
) |
International.......... |
|
6 |
|
|
1,811 |
|
|
|
178.65 |
|
|
62.4 |
|
|
|
111.41 |
|
|
|
207.10 |
|
|
65.2 |
|
|
|
135.13 |
|
|
(17.6 |
) |
All
Markets - Constant US$ |
|
87 |
|
|
48,357 |
|
|
|
226.85 |
|
|
80.1 |
|
|
|
181.70 |
|
|
|
225.58 |
|
|
79.7 |
|
|
|
179.81 |
|
|
1.0 |
|
All Owned Hotels in Constant US$ (3)
|
|
As of September 30, 2017 |
|
|
Year-to-date ended September 30, 2017 |
|
|
Year-to-date ended September 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable
Hotels... |
|
|
87 |
|
|
|
48,357 |
|
|
$ |
226.85 |
|
|
|
80.1 |
% |
|
$ |
181.70 |
|
|
$ |
225.58 |
|
|
|
79.7 |
% |
|
$ |
179.81 |
|
|
|
1.0 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
7 |
|
|
|
4,203 |
|
|
|
248.19 |
|
|
|
77.2 |
|
|
|
191.61 |
|
|
|
248.13 |
|
|
|
70.3 |
|
|
|
174.45 |
|
|
|
9.8 |
|
All
Hotels |
|
|
94 |
|
|
|
52,560 |
|
|
|
228.50 |
|
|
|
79.9 |
|
|
|
182.49 |
|
|
|
227.18 |
|
|
|
79.0 |
|
|
|
179.38 |
|
|
|
1.7 |
|
Comparable Hotels in Nominal
US$
|
|
As of September 30, 2017 |
|
|
Year-to-date ended September 30, 2017 |
|
|
Year-to-date ended September 30, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Canada |
|
|
2 |
|
|
|
849 |
|
|
$ |
179.33 |
|
|
|
65.9 |
% |
|
$ |
118.18 |
|
|
$ |
174.32 |
|
|
|
63.9 |
% |
|
$ |
111.35 |
|
|
|
6.1 |
% |
Latin America |
|
|
4 |
|
|
|
962 |
|
|
|
177.99 |
|
|
|
59.2 |
|
|
|
105.44 |
|
|
|
223.43 |
|
|
|
66.5 |
|
|
|
148.48 |
|
|
|
(29.0 |
) |
International |
|
|
6 |
|
|
|
1,811 |
|
|
|
178.65 |
|
|
|
62.4 |
|
|
|
111.41 |
|
|
|
200.90 |
|
|
|
65.2 |
|
|
|
131.08 |
|
|
|
(15.0 |
) |
Domestic |
|
|
81 |
|
|
|
46,546 |
|
|
|
228.30 |
|
|
|
80.8 |
|
|
|
184.44 |
|
|
|
226.16 |
|
|
|
80.3 |
|
|
|
181.55 |
|
|
|
1.6 |
|
All
Markets |
|
|
87 |
|
|
|
48,357 |
|
|
|
226.85 |
|
|
|
80.1 |
|
|
|
181.70 |
|
|
|
225.39 |
|
|
|
79.7 |
|
|
|
179.66 |
|
|
|
1.1 |
|
(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 September 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 2.3% and 9.8% 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 September 30, 2017 |
|
|
Quarter ended September 30, 2017 |
|
|
Quarter ended September 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 |
|
|
€ |
222.07 |
|
|
|
81.9 |
% |
|
€ |
181.94 |
|
|
€ |
223.65 |
|
|
|
78.8 |
% |
|
€ |
176.25 |
|
|
|
3.2 |
% |
Total comparable
- in Nominal Euros (1) |
|
|
10 |
|
|
|
3,902 |
|
|
|
222.07 |
|
|
|
81.9 |
|
|
|
181.94 |
|
|
|
225.27 |
|
|
|
78.8 |
|
|
|
177.53 |
|
|
|
2.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2017 |
|
|
Year-to-date ended September 30, 2017 |
|
|
Year-to-date ended September 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 |
|
|
€ |
217.66 |
|
|
|
78.3 |
% |
|
€ |
170.48 |
|
|
€ |
215.71 |
|
|
|
74.3 |
% |
|
€ |
160.18 |
|
|
|
6.4 |
% |
Total comparable
- in Nominal Euros (1) |
|
|
10 |
|
|
|
3,902 |
|
|
|
217.66 |
|
|
|
78.3 |
|
|
|
170.48 |
|
|
|
218.16 |
|
|
|
74.3 |
|
|
|
161.99 |
|
|
|
5.2 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30, |
|
|
Year-to-date ended September 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Number of hotels |
|
|
87 |
|
|
|
87 |
|
|
|
87 |
|
|
|
87 |
|
Number of rooms |
|
|
48,357 |
|
|
|
48,357 |
|
|
|
48,357 |
|
|
|
48,357 |
|
Change in comparable
hotel RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
US$ |
|
|
(1.8 |
)% |
|
|
-- |
|
|
|
1.0 |
% |
|
|
-- |
|
Nominal
US$ |
|
|
(1.7 |
)% |
|
|
-- |
|
|
|
1.1 |
% |
|
|
-- |
|
Operating profit margin
(2) |
|
|
10.1 |
% |
|
|
11.1 |
% |
|
|
13.4 |
% |
|
|
13.0 |
% |
Comparable hotel EBITDA
margin (2) |
|
|
26.1 |
% |
|
|
26.85 |
% |
|
|
28.0 |
% |
|
|
27.9 |
% |
Food and beverage
profit margin (2) |
|
|
22.9 |
% |
|
|
23.5 |
% |
|
|
31.1 |
% |
|
|
29.8 |
% |
Comparable hotel food
and beverage profit margin (2) |
|
|
22.9 |
% |
|
|
23.3 |
% |
|
|
30.9 |
% |
|
|
29.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
105 |
|
|
$ |
108 |
|
|
$ |
478 |
|
|
$ |
643 |
|
Depreciation and
amortization |
|
|
176 |
|
|
|
182 |
|
|
|
534 |
|
|
|
541 |
|
Interest expense |
|
|
43 |
|
|
|
38 |
|
|
|
125 |
|
|
|
116 |
|
Provision for income
taxes |
|
|
42 |
|
|
|
19 |
|
|
|
63 |
|
|
|
42 |
|
Gain on sale of
property and corporate level income/expense |
|
|
(39 |
) |
|
|
7 |
|
|
|
(45 |
) |
|
|
(185 |
) |
Non-comparable hotel
results, net (3) |
|
|
(31 |
) |
|
|
(41 |
) |
|
|
(140 |
) |
|
|
(147 |
) |
Comparable
hotel EBITDA |
|
$ |
296 |
|
|
$ |
313 |
|
|
$ |
1,015 |
|
|
$ |
1,010 |
|
|
|
|
|
Quarter ended September 30, 2017 |
|
|
Quarter ended September 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 |
|
$ |
860 |
|
|
$ |
(71 |
) |
|
$ |
-- |
|
|
$ |
789 |
|
|
$ |
879 |
|
|
$ |
(76 |
) |
|
$ |
-- |
|
|
$ |
803 |
|
Food and
beverage |
|
|
314 |
|
|
|
(35 |
) |
|
|
-- |
|
|
|
279 |
|
|
|
336 |
|
|
|
(40 |
) |
|
|
-- |
|
|
|
296 |
|
Other |
|
|
80 |
|
|
|
(12 |
) |
|
|
-- |
|
|
|
68 |
|
|
|
80 |
|
|
|
(13 |
) |
|
|
-- |
|
|
|
67 |
|
Total
revenues |
|
|
1,254 |
|
|
|
(118 |
) |
|
|
-- |
|
|
|
1,136 |
|
|
|
1,295 |
|
|
|
(129 |
) |
|
|
-- |
|
|
|
1,166 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
227 |
|
|
|
(18 |
) |
|
|
-- |
|
|
|
209 |
|
|
|
225 |
|
|
|
(19 |
) |
|
|
-- |
|
|
|
206 |
|
Food and
beverage |
|
|
242 |
|
|
|
(27 |
) |
|
|
-- |
|
|
|
215 |
|
|
|
257 |
|
|
|
(30 |
) |
|
|
-- |
|
|
|
227 |
|
Other |
|
|
459 |
|
|
|
(43 |
) |
|
|
-- |
|
|
|
416 |
|
|
|
471 |
|
|
|
(51 |
) |
|
|
-- |
|
|
|
420 |
|
Depreciation and amortization |
|
|
176 |
|
|
|
-- |
|
|
|
(176 |
) |
|
|
-- |
|
|
|
182 |
|
|
|
-- |
|
|
|
(182 |
) |
|
|
-- |
|
Corporate
and other expenses |
|
|
24 |
|
|
|
-- |
|
|
|
(24 |
) |
|
|
-- |
|
|
|
28 |
|
|
|
-- |
|
|
|
(28 |
) |
|
|
-- |
|
Gain on
insurance and business interruption settlements |
|
|
(1 |
) |
|
|
1 |
|
|
|
-- |
|
|
|
-- |
|
|
|
(12 |
) |
|
|
12 |
|
|
|
-- |
|
|
|
-- |
|
Total
expenses |
|
|
1,127 |
|
|
|
(87 |
) |
|
|
(200 |
) |
|
|
840 |
|
|
|
1,151 |
|
|
|
(88 |
) |
|
|
(210 |
) |
|
|
853 |
|
Operating
Profit - Comparable Hotel
EBITDA |
|
$ |
127 |
|
|
$ |
(31 |
) |
|
$ |
200 |
|
|
$ |
296 |
|
|
$ |
144 |
|
|
$ |
(41 |
) |
|
$ |
210 |
|
|
$ |
313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS, INC.
Schedule of Comparable Hotel Results
(1)(unaudited, in millions, except hotel
statistics)
|
|
Year-to-date ended September 30, 2017 |
|
|
Year-to-date ended September 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 |
|
$ |
2,643 |
|
|
$ |
(244 |
) |
|
$ |
-- |
|
|
$ |
2,399 |
|
|
$ |
2,655 |
|
|
$ |
(275 |
) |
|
$ |
-- |
|
|
$ |
2,380 |
|
Food and
beverage |
|
|
1,152 |
|
|
|
(133 |
) |
|
|
-- |
|
|
|
1,019 |
|
|
|
1,183 |
|
|
|
(148 |
) |
|
|
-- |
|
|
|
1,035 |
|
Other |
|
|
248 |
|
|
|
(45 |
) |
|
|
-- |
|
|
|
203 |
|
|
|
255 |
|
|
|
(54 |
) |
|
|
-- |
|
|
|
201 |
|
Total
revenues |
|
|
4,043 |
|
|
|
(422 |
) |
|
|
-- |
|
|
|
3,621 |
|
|
|
4,093 |
|
|
|
(477 |
) |
|
|
-- |
|
|
|
3,616 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
676 |
|
|
|
(58 |
) |
|
|
-- |
|
|
|
618 |
|
|
|
674 |
|
|
|
(68 |
) |
|
|
-- |
|
|
|
606 |
|
Food and
beverage |
|
|
794 |
|
|
|
(90 |
) |
|
|
-- |
|
|
|
704 |
|
|
|
830 |
|
|
|
(104 |
) |
|
|
-- |
|
|
|
726 |
|
Other |
|
|
1,424 |
|
|
|
(140 |
) |
|
|
-- |
|
|
|
1,284 |
|
|
|
1,447 |
|
|
|
(173 |
) |
|
|
-- |
|
|
|
1,274 |
|
Depreciation and amortization |
|
|
534 |
|
|
|
-- |
|
|
|
(534 |
) |
|
|
-- |
|
|
|
541 |
|
|
|
-- |
|
|
|
(541 |
) |
|
|
-- |
|
Corporate
and other expenses |
|
|
79 |
|
|
|
-- |
|
|
|
(79 |
) |
|
|
-- |
|
|
|
82 |
|
|
|
-- |
|
|
|
(82 |
) |
|
|
-- |
|
Gain on
insurance and business interruption settlements |
|
|
(6 |
) |
|
|
6 |
|
|
|
-- |
|
|
|
-- |
|
|
|
(15 |
) |
|
|
15 |
|
|
|
-- |
|
|
|
-- |
|
Total
expenses |
|
|
3,501 |
|
|
|
(282 |
) |
|
|
(613 |
) |
|
|
2,606 |
|
|
|
3,559 |
|
|
|
(330 |
) |
|
|
(623 |
) |
|
|
2,606 |
|
Operating
Profit - Comparable Hotel
EBITDA |
|
$ |
542 |
|
|
$ |
(140 |
) |
|
$ |
613 |
|
|
$ |
1,015 |
|
|
$ |
534 |
|
|
$ |
(147 |
) |
|
$ |
623 |
|
|
$ |
1,010 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
Equity |
|
|
|
|
|
|
|
|
|
Common
shares outstanding |
|
|
738.9 |
|
|
737.8 |
Common
shares outstanding assuming conversion of OP Units (1) |
|
|
747.4 |
|
|
746.5 |
Preferred
OP Units outstanding |
|
|
.02 |
|
|
.02 |
|
|
|
|
|
|
|
|
|
|
Security
pricing |
|
|
|
|
|
|
|
|
|
Common
stock (2) |
|
$ |
18.49 |
|
$ |
18.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Year-to-date ended |
|
|
|
|
|
September 30, |
|
September 30, |
Dividends declared per common share |
|
|
|
|
|
|
|
|
2017 |
|
|
|
|
$ |
.20 |
|
$ |
.60 |
2016 |
|
|
|
|
|
.20 |
|
|
.60 |
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
|
|
|
Senior
debt |
Rate |
|
Maturity date |
|
September 30, 2017 |
|
December 31, 2016 |
Series Z |
6% |
|
10/2021 |
|
$ |
298 |
|
$ |
297 |
Series B |
5
1⁄4% |
|
3/2022 |
|
|
348 |
|
|
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 |
|
|
188 |
|
|
209 |
|
|
|
|
|
|
3,961 |
|
|
3,586 |
Mortgage debt and
other |
|
|
|
|
|
|
|
|
|
Mortgage debt and other
(non-recourse) |
-- |
|
-- |
|
|
-- |
|
|
63 |
Total debt
(4)(5) |
|
$ |
3,961 |
|
$ |
3,649 |
Percentage
of fixed rate debt |
|
|
70% |
|
|
65% |
Weighted
average interest rate |
|
|
3.9% |
|
|
3.8% |
Weighted
average debt maturity |
|
|
5.4
years |
|
|
5.2
years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecast Full Year 2017 |
|
|
|
Forecast
GAAP interest expense (6) |
|
$ |
169 |
|
|
|
Forecast
cash interest, net (6) |
|
$ |
160 |
|
|
|
Forecast
GAAP cash provided by operating activities (7) |
|
$ |
1,210 |
|
|
|
Forecast
adjusted cash from operations (7) |
|
$ |
925 |
|
|
|
___________ |
|
|
|
|
|
|
|
|
|
(1) Each OP Unit is redeemable for cash or, at our option,
for 1.021494 common shares of Host Inc. At September 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 September 30, 2017. (4) In accordance with
GAAP, total debt includes the debt of entities that we consolidate,
but of which we do not own 100%, and excludes the debt of entities
that we do not consolidate, but of which we have a non-controlling
ownership interest and record our investment therein under the
equity method of accounting. As of September 30, 2017, our share of
debt in unconsolidated investments is $413 million and none of our
debt is attributable to non-controlling interests. (5) Total
debt as of September 30, 2017 and December 31, 2016 includes net
discounts and deferred financing costs of $32 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 |
$ |
169 |
|
Amortization of
deferred financing costs |
|
(7 |
) |
Change in accrued
interest |
|
(2 |
) |
Forecast cash interest
full year 2017, net |
$ |
160 |
|
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 |
|
$ |
1,210 |
|
Renewal and replacement
expenditures |
|
|
(285 |
) |
Forecast adjusted cash
from operations |
|
$ |
925 |
|
See the
Notes to Financial Information for a discussion of non-GAAP
measures. |
|
|
|
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income
toEBITDA and Adjusted EBITDA
(1)(unaudited, in millions)
|
|
Quarter endedSeptember 30, |
|
|
Year-to-date endedSeptember 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net income
(2) |
|
$ |
105 |
|
|
$ |
108 |
|
|
$ |
478 |
|
|
$ |
643 |
|
Interest
expense |
|
|
43 |
|
|
|
38 |
|
|
|
125 |
|
|
|
116 |
|
Depreciation and amortization |
|
|
176 |
|
|
|
182 |
|
|
|
534 |
|
|
|
541 |
|
Income
taxes |
|
|
42 |
|
|
|
19 |
|
|
|
63 |
|
|
|
42 |
|
EBITDA
(2) |
|
|
366 |
|
|
|
347 |
|
|
|
1,200 |
|
|
|
1,342 |
|
Gain on
dispositions (3) |
|
|
(58 |
) |
|
|
(12 |
) |
|
|
(101 |
) |
|
|
(242 |
) |
Gain on
property insurance settlement |
|
|
(1 |
) |
|
|
-- |
|
|
|
(1 |
) |
|
|
(1 |
) |
Acquisition costs |
|
|
-- |
|
|
|
-- |
|
|
|
1 |
|
|
|
-- |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(4 |
) |
|
|
(8 |
) |
|
|
(19 |
) |
|
|
(19 |
) |
Pro rata
Adjusted EBITDA of equity investments |
|
|
16 |
|
|
|
17 |
|
|
|
55 |
|
|
|
51 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro rata
Adjusted EBITDA attributable to non-controlling partners in
other consolidated partnerships |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(8 |
) |
Adjusted EBITDA
(2) |
|
$ |
317 |
|
|
$ |
342 |
|
|
$ |
1,128 |
|
|
$ |
1,123 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Notes to Financial Information for discussion of
non-GAAP measures. (2) Net
Income, EBITDA, Adjusted EBITDA, NAREIT FFO and Adjusted FFO
include a gain of $1 million for the quarter ended September 30,
2016, and $1 million and $2 million for the year-to-date periods
ended September 30, 2017 and 2016, respectively, for the sale of
the portion of land attributable to individual units sold by the
Maui timeshare joint venture.(3) Reflects the sale of four hotels
in 2017 and the sale of ten hotels in 2016.
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income to NAREIT
andAdjusted Funds From Operations per Diluted
Share (1)(unaudited, in millions, except
per share amounts)
|
|
Quarter ended September 30, |
|
|
Year-to-date ended September 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net
income (2) |
|
$ |
105 |
|
|
$ |
108 |
|
|
$ |
478 |
|
|
$ |
643 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
|
104 |
|
|
|
107 |
|
|
|
472 |
|
|
|
636 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
dispositions (3) |
|
|
(58 |
) |
|
|
(12 |
) |
|
|
(101 |
) |
|
|
(242 |
) |
Tax on
dispositions |
|
|
22 |
|
|
|
-- |
|
|
|
22 |
|
|
|
9 |
|
Gain on
property insurance settlement |
|
|
(1 |
) |
|
|
-- |
|
|
|
(1 |
) |
|
|
(1 |
) |
Depreciation and amortization |
|
|
175 |
|
|
|
181 |
|
|
|
532 |
|
|
|
538 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(4 |
) |
|
|
(8 |
) |
|
|
(19 |
) |
|
|
(19 |
) |
Pro rata
FFO of equity investments |
|
|
11 |
|
|
|
13 |
|
|
|
39 |
|
|
|
38 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partnerships |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
FFO
adjustments for non-controlling interests of Host L.P. |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
NAREIT FFO
(2) |
|
|
247 |
|
|
|
278 |
|
|
|
936 |
|
|
|
953 |
|
Adjustments to NAREIT
FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs |
|
|
-- |
|
|
|
-- |
|
|
|
1 |
|
|
|
-- |
|
Loss on
debt extinguishment |
|
|
-- |
|
|
|
-- |
|
|
|
1 |
|
|
|
-- |
|
Adjusted FFO
(2) |
|
$ |
247 |
|
|
$ |
278 |
|
|
$ |
938 |
|
|
$ |
953 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation
on a per share basis(4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding - EPS,
NAREIT FFO and Adjusted FFO. |
|
|
739.0 |
|
|
|
741.1 |
|
|
|
738.7 |
|
|
|
745.2 |
|
NAREIT FFO and
Adjusted FFO per diluted share |
|
$ |
.33 |
|
|
$ |
.37 |
|
|
$ |
1.27 |
|
|
$ |
1.28 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 andNAREIT 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 |
$ |
580 |
|
|
$ |
590 |
|
Interest
expense |
|
169 |
|
|
|
169 |
|
Depreciation and amortization |
|
712 |
|
|
|
712 |
|
Income
taxes |
|
73 |
|
|
|
73 |
|
EBITDA |
|
1,534 |
|
|
|
1,544 |
|
Gain on
dispositions |
|
(101 |
) |
|
|
(101 |
) |
Gain on
property insurance settlement |
|
(1 |
) |
|
|
(1 |
) |
Acquisition costs |
|
1 |
|
|
|
1 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(22 |
) |
|
|
(22 |
) |
Pro rata
Adjusted EBITDA of equity investments |
|
68 |
|
|
|
68 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
Pro rata
Adjusted EBITDA attributable to non-controlling partners in other
consolidated partnerships |
|
(9 |
) |
|
|
(9 |
) |
Adjusted
EBITDA |
$ |
1,470 |
|
|
$ |
1,480 |
|
|
|
|
|
|
|
|
|
|
Full Year 2017 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
$ |
580 |
|
|
$ |
590 |
|
Less: Net income
attributable to non-controlling interests |
|
(7 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
573 |
|
|
|
583 |
|
Gain on
dispositions |
|
(101 |
) |
|
|
(101 |
) |
Tax on
dispositions |
|
22 |
|
|
|
22 |
|
Gain on
property insurance settlement |
|
(1 |
) |
|
|
(1 |
) |
Depreciation and amortization |
|
709 |
|
|
|
709 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(22 |
) |
|
|
(22 |
) |
Pro rata
FFO of equity investments |
|
50 |
|
|
|
50 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partners in other consolidated
partnerships |
|
(3 |
) |
|
|
(3 |
) |
FFO
adjustment for non-controlling interests of Host LP |
|
(8 |
) |
|
|
(8 |
) |
NAREIT
FFO |
|
1,219 |
|
|
|
1,229 |
|
Acquisition costs |
|
1 |
|
|
|
1 |
|
Loss on
debt extinguishments |
|
1 |
|
|
|
1 |
|
Adjusted
FFO |
$ |
1,221 |
|
|
$ |
1,231 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares - EPS, NAREIT and Adjusted FFO |
|
738.8 |
|
|
|
738.8 |
|
Earnings per
diluted share |
$ |
0.78 |
|
|
$ |
0.79 |
|
NAREIT FFO per
diluted share |
$ |
1.65 |
|
|
$ |
1.66 |
|
Adjusted FFO
per diluted share |
$ |
1.65 |
|
|
$ |
1.67 |
|
___________ |
|
|
|
|
|
|
|
(1) The forecasts are based on the below
assumptions:
- Total comparable hotel RevPAR in constant US$ will increase
1.15% to 1.35% 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 remain constant or
increase 10 basis points for the low and high ends of the
forecasted range, respectively.
- We expect to spend approximately $90 million to $100 million on
ROI/redevelopment capital expenditures and approximately $270
million to $300 million on renewal and replacement
expenditures.
- The above forecast assumes the sale of the Key Bridge Marriott
will not occur until the first quarter of 2018. The sale is subject
to customary closing conditions which may not be
satisfied. 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
Resultsfor 2017 Forecasts (1)(unaudited,
in millions, except hotel statistics)
|
|
|
|
|
|
|
|
|
|
Full Year 2017 |
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Operating
profit margin (2) |
|
|
|
12.9 |
% |
|
|
13.1 |
% |
Comparable
hotel EBITDA margin (3) |
|
|
|
27.75 |
% |
|
|
27.85 |
% |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
580 |
|
|
$ |
590 |
|
Depreciation and amortization |
|
|
|
712 |
|
|
|
712 |
|
Interest
expense |
|
|
|
169 |
|
|
|
169 |
|
Provision
for income taxes |
|
|
|
73 |
|
|
|
73 |
|
Gain on
sale of property and corporate level income/expense |
|
|
|
(23 |
) |
|
|
(23 |
) |
Non-comparable hotel results, net(4) |
|
|
|
(172 |
) |
|
|
(175 |
) |
Comparable hotel EBITDA |
|
|
$ |
1,339 |
|
|
$ |
1,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,495 |
|
|
$ |
(320 |
) |
|
$ |
-- |
|
|
$ |
3,175 |
|
Food and
beverage |
|
|
1,559 |
|
|
|
(181 |
) |
|
|
-- |
|
|
|
1,378 |
|
Other |
|
|
319 |
|
|
|
(47 |
) |
|
|
-- |
|
|
|
272 |
|
Total
revenues |
|
|
5,373 |
|
|
|
(548 |
) |
|
|
-- |
|
|
|
4,825 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
expenses |
|
|
3,868 |
|
|
|
(382 |
) |
|
|
-- |
|
|
|
3,486 |
|
Depreciation |
|
|
712 |
|
|
|
-- |
|
|
|
(712 |
) |
|
|
-- |
|
Corporate
and other expenses |
|
|
105 |
|
|
|
-- |
|
|
|
(105 |
) |
|
|
-- |
|
Gain on
insurance and business interruption settlements |
|
|
(6 |
) |
|
|
6 |
|
|
|
-- |
|
|
|
-- |
|
Total
expenses |
|
|
4,679 |
|
|
|
(376 |
) |
|
|
(817 |
) |
|
|
3,486 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
694 |
|
|
$ |
(172 |
) |
|
$ |
817 |
|
|
$ |
1,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,501 |
|
|
$ |
(320 |
) |
|
$ |
-- |
|
|
$ |
3,181 |
|
Food and
beverage |
|
|
1,562 |
|
|
|
(182 |
) |
|
|
-- |
|
|
|
1,380 |
|
Other |
|
|
322 |
|
|
|
(49 |
) |
|
|
-- |
|
|
|
273 |
|
Total
revenues |
|
|
5,385 |
|
|
|
(551 |
) |
|
|
-- |
|
|
|
4,834 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel
expenses |
|
|
3,870 |
|
|
|
(382 |
) |
|
|
-- |
|
|
|
3,488 |
|
Depreciation and amortization |
|
|
712 |
|
|
|
-- |
|
|
|
(712 |
) |
|
|
-- |
|
Corporate
and other expenses |
|
|
105 |
|
|
|
-- |
|
|
|
(105 |
) |
|
|
-- |
|
Gain on
insurance and business interruption settlements |
|
|
(6 |
) |
|
|
6 |
|
|
|
-- |
|
|
|
-- |
|
Total
expenses |
|
|
4,681 |
|
|
|
(376 |
) |
|
|
(817 |
) |
|
|
3,488 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
704 |
|
|
$ |
(175 |
) |
|
$ |
817 |
|
|
$ |
1,346 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS,
INC.Schedule of Comparable Hotel
Resultsfor 2017 Forecasts (1)
(cont.)(unaudited, in millions, except hotel
statistics)
(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 Airport
- 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
- Sheraton Indianapolis Hotel at Keystone Crossing
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 94 hotels that we owned on September 30, 2017, 87 have
been classified as comparable hotels. The operating results of the
following hotels that we owned as of September 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 14 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. None of our
hotels have been excluded from our comparable hotel results due to
Hurricanes Harvey or Irma.
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, and Texas.
International
- 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. 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 two 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 ExpenseWe 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 OperationsWe 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
Officer240.744.5120
Bret D.S. McLeod, Senior Vice
President240.744.5216
Gee Lingberg, Vice President240.744.5275
Host Hotels and Resorts (NYSE:HST)
Historical Stock Chart
From Aug 2024 to Sep 2024
Host Hotels and Resorts (NYSE:HST)
Historical Stock Chart
From Sep 2023 to Sep 2024