Host Hotels & Resorts, Inc. (NASDAQ: HST) (the “Company”), the
nation’s largest lodging real estate investment trust (“REIT”),
today announced results for first quarter of 2022.
OPERATING RESULTS(unaudited, in
millions, except per share and hotel statistics)
|
|
Quarter ended March 31, |
|
|
Percent Change |
|
|
Percent Change |
|
|
|
2022 |
|
|
2021 |
|
|
vs. 2021 |
|
|
vs. 2019⁽²⁾ |
|
Revenues |
|
$ |
1,074 |
|
|
$ |
399 |
|
|
|
169.2 |
% |
|
|
(22.7 |
)% |
All owned hotel revenues (pro
forma)⁽¹⁾ |
|
|
1,052 |
|
|
|
431 |
|
|
|
144.1 |
% |
|
|
(17.4 |
)% |
All owned hotel (pro forma)
Total RevPAR |
|
|
275.55 |
|
|
|
113.55 |
|
|
|
142.7 |
% |
|
|
(18.3 |
)% |
All owned hotel (pro forma)
RevPAR |
|
|
166.93 |
|
|
|
72.27 |
|
|
|
131.0 |
% |
|
|
(18.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
118 |
|
|
$ |
(153 |
) |
|
|
|
|
|
|
EBITDAre⁽¹⁾ |
|
|
306 |
|
|
|
5 |
|
|
|
|
|
|
|
Adjusted EBITDAre⁽¹⁾ |
|
|
306 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per common share |
|
|
0.16 |
|
|
|
(0.22 |
) |
|
|
|
|
|
|
NAREIT FFO per diluted
share⁽¹⁾ |
|
|
0.39 |
|
|
|
0.01 |
|
|
|
|
|
|
|
Adjusted FFO per diluted
share⁽¹⁾ |
|
|
0.39 |
|
|
|
0.01 |
|
|
|
|
|
|
|
* Additional detail on the Company’s results,
including data for 22 domestic markets, is available in the First
Quarter 2022 Supplemental Financial Information available on the
Company’s website at www.hosthotels.com.
James F. Risoleo, President and Chief Executive
Officer, said, “We ended the first quarter on a high note, as we
continued to see strong operational improvements across our
portfolio. RevPAR was $167 during the first quarter representing an
11% increase over the prior quarter, and the highest quarterly
RevPAR we have seen in the recovery. We saw meaningful improvements
within the quarter in transient and group business segments, driven
by both demand and significant rate growth.”
Risoleo continued, “In addition, subsequent to
quarter end, we sold two hotels, bringing our total dispositions to
$1.4 billion since the beginning of 2021. These sales represent
another important step in the transformation of our portfolio as we
continue to elevate our EBITDA growth profile."
__________________________________(1) NAREIT
Funds From Operations (“FFO”) per diluted share, Adjusted FFO per
diluted share, EBITDAre, Adjusted EBITDAre and all owned hotel
results (pro forma) are non-GAAP (U.S. generally accepted
accounting principles) financial measures within the meaning of the
rules of the Securities and Exchange Commission (“SEC”). The pro
forma all owned hotel results exclude the operations of hotels sold
or held-for sale as of March 31, 2022. Held-for-sale properties at
March 31, 2022 included the Sheraton New York Times Square Hotel
and the YVE Hotel Miami. See the Notes to Financial Information on
why the Company believes these supplemental measures are useful,
reconciliations to the most directly comparable GAAP measure, and
the limitations on the use of these supplemental measures.(2)
Presentation includes comparisons to 2019 operating results in
order to allow investors to better understand the trajectory and
timing of any recovery from the COVID-19 impacts on hotel
operations.N/M = Not Meaningful
HIGHLIGHTS:
Results for First Quarter 2022
- RevPAR continued to
improve sequentially to $166.93 in the first quarter. Improvements
were primarily driven by leisure travel, with strong rates at
resort properties leading to average room rates of $305.63 for the
quarter. At the same time, urban markets began to see improvement,
with an increase in group revenues compared to the fourth quarter
of 2021.
- Generated GAAP net
income of $118 million in the first quarter, a decrease of $205
million from the fourth quarter of 2021, as the improvement of
operations in the first quarter was offset by the gain on sale of
assets in the fourth quarter of 2021.
- Achieved All Owned
Hotel Pro Forma EBITDA of $330 million and Adjusted EBITDAre of
$306 million, which, after interest expense of $36 million,
exceeded the Company's capital expenditures of $122 million in the
quarter by $148 million. The results benefited from continued
positive quarterly sequential improvements in RevPAR and
operations.
- Sold the Sheraton
Boston Hotel for $233 million, including a $163 million bridge loan
provided by the Company to the buyer, and recorded a gain on sale
of approximately $12 million.
- Acquired a 49%
ownership interest in a joint venture with Noble Investment Group,
a leading private hospitality asset manager, for $35 million of
cash and the issuance of approximately $56 million of Host L.P. OP
units.
- Opened the
brand-new 2.3-acre River Falls Water Park at the Orlando World
Center Marriott and substantially completed the 60,000 square-foot
meeting space expansion, with the project completed ahead of
schedule and under budget.
-
Repaid the remaining $683 million on the revolver portion of the
Company's credit facility during the quarter.
Subsequent Events
- Sold the Sheraton
New York Times Square Hotel for $373 million, which includes a $250
million bridge loan provided by the Company to the buyer, with an
initial term of six months and three potential six-month
extensions.
- Preliminary
forecast RevPAR for April is expected to be between $225 and
$230.
BALANCE SHEET
The Company maintains a robust balance sheet,
with the following balances at March 31, 2022:
- Total assets of
$11.8 billion.
- Debt balance of
$4.2 billion, with an average maturity of 5.3 years, an average
interest rate of 3.4%, and no significant maturities until
2024.
-
Total available liquidity of approximately $1.9 billion, including
furniture fixtures & equipment ("FF&E") escrow reserves of
$163 million and $1.5 billion available under the revolver portion
of the credit facility.
Sourav Ghosh, Executive Vice President, Chief
Financial Officer, stated, “Our first quarter results are
reflective of continued positive sequential improvements in RevPAR
with average room rates exceeding the first quarter of 2019. We
also announced a quarterly cash dividend of $0.06, a 100% increase
over the prior quarter, as the trajectory of the lodging recovery
has accelerated. We will continue to build on the strong momentum
of the past few quarters as we look to improve the performance of
our portfolio.”
DIVIDEND
The Company paid a first quarter cash dividend of $0.03 per
share on its common stock on April 15, 2022 to stockholders of
record on March 31, 2022. On May 4, 2022, the Board of Directors
announced a regular quarterly cash dividend of $0.06 on its common
stock. The dividend will be paid on July 15, 2022 to stockholders
of record on June 30, 2022. All future dividends are subject to
approval by the Company’s Board of Directors.
OPERATING RESULTS
The following presents the monthly pro forma
hotel operating results for the full portfolio as of March 31, 2022
compared to 2021 and 2019 for the months presented(3):
|
January |
|
January |
|
|
|
February |
|
February |
|
|
|
March |
|
March |
|
|
|
Quarter ended March 31, |
|
|
|
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
|
Number of hotels |
|
78 |
|
|
77 |
|
|
|
|
78 |
|
|
77 |
|
|
|
|
78 |
|
|
77 |
|
|
|
|
78 |
|
|
77 |
|
|
|
Number of rooms |
|
42,334 |
|
|
42,111 |
|
|
|
|
42,334 |
|
|
42,111 |
|
|
|
|
42,334 |
|
|
42,111 |
|
|
|
|
42,334 |
|
|
42,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average OccupancyPercentage |
|
39.4 |
% |
|
20.8 |
% |
|
18.6pts |
|
|
55.7 |
% |
|
28.0 |
% |
|
27.7pts |
|
|
68.8 |
% |
|
36.6 |
% |
|
32.2pts |
|
|
54.6 |
% |
|
28.5 |
% |
|
26.1pts |
|
Average RoomRate |
$ |
277.04 |
|
$ |
230.07 |
|
|
20.4 |
% |
$ |
306.70 |
|
$ |
245.24 |
|
|
25.1 |
% |
$ |
321.23 |
|
$ |
273.31 |
|
|
17.5 |
% |
$ |
305.63 |
|
$ |
253.85 |
|
|
20.4 |
% |
RevPAR |
$ |
109.28 |
|
$ |
47.87 |
|
|
128.3 |
% |
$ |
170.81 |
|
$ |
68.61 |
|
|
148.9 |
% |
$ |
221.08 |
|
$ |
99.90 |
|
|
121.3 |
% |
$ |
166.93 |
|
$ |
72.27 |
|
|
131.0 |
% |
|
January |
|
January |
|
|
|
February |
|
February |
|
|
|
March |
|
March |
|
|
|
Quarter ended March 31, |
|
|
|
|
2022 |
|
2019 |
|
Change |
|
2022 |
|
2019 |
|
Change |
|
2022 |
|
2019 |
|
Change |
|
2022 |
|
2019 |
|
Change |
|
Number of hotels |
|
78 |
|
|
76 |
|
|
|
|
78 |
|
|
76 |
|
|
|
|
78 |
|
|
76 |
|
|
|
|
78 |
|
|
76 |
|
|
|
Number of rooms |
|
42,334 |
|
|
41,946 |
|
|
|
|
42,334 |
|
|
41,946 |
|
|
|
|
42,334 |
|
|
41,946 |
|
|
|
|
42,334 |
|
|
41,946 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average OccupancyPercentage |
|
39.4 |
% |
|
69.7 |
% |
|
(30.3pts) |
|
|
55.7 |
% |
|
77.3 |
% |
|
(21.6pts) |
|
|
68.8 |
% |
|
82.0 |
% |
|
(13.2pts) |
|
|
54.6 |
% |
|
76.3 |
% |
|
(21.7pts) |
|
Average RoomRate |
$ |
277.04 |
|
$ |
256.17 |
|
|
8.1 |
% |
$ |
306.70 |
|
$ |
266.96 |
|
|
14.9 |
% |
$ |
321.23 |
|
$ |
279.76 |
|
|
14.8 |
% |
$ |
305.63 |
|
$ |
268.31 |
|
|
13.9 |
% |
RevPAR |
$ |
109.28 |
|
$ |
178.46 |
|
|
(38.8 |
)% |
$ |
170.81 |
|
$ |
206.27 |
|
|
(17.2 |
)% |
$ |
221.08 |
|
$ |
229.54 |
|
|
(3.7 |
)% |
$ |
166.93 |
|
$ |
204.70 |
|
|
(18.5 |
)% |
___________(3) The AC Hotel Scottsdale North is a new
development hotel that opened in January 2021 and The Laura Hotel
in Houston re-opened under new management in November 2021.
Therefore, no adjustments were made for results of these hotels for
periods prior to their openings. Results exclude hotels that were
classified as held-for-sale at March 31, 2022.
First Quarter 2022 Hotel Operating
Performance
- All Owned Hotel
Pro Forma RevPAR improved 11% compared to the fourth quarter of
2021, with average room rates exceeding first quarter 2019 rates.
While strong leisure demand for resorts and hotels located in the
Company’s Sunbelt markets and Hawaii continued to drive the
sequential improvement, the Company's downtown and non-resort
hotels also saw improvement in the first quarter compared to fourth
quarter of 2021.
- Food and beverage
pro forma revenues improved approximately $32 million, or 12%,
compared to the fourth quarter of 2021. Continued improvement in
Banquet and Catering revenues benefited from higher contributions
from group business on a per room night basis relative to
2019.
- Hiring pace
continued to lag demand in the first quarter, primarily in markets
where performance has returned to 2019 levels. The Company expects
hotel operating costs to increase more in line with total revenues
over time as hotels continue to increase staffing levels.
HOTEL BUSINESS MIX UPDATE
The Company’s customers fall into three broad
groups: transient, group and contract business, which accounted for
approximately 61%, 35%, and 4%, respectively, of its 2019 room
sales.
During the first quarter, demand continued to be
primarily driven by leisure at drive-to and resort destinations.
The following are the sequential results of the Company’s
consolidated portfolio, excluding hotels held-for-sale at March 31,
2022 on a pro forma basis, for transient, group and contract
business in comparison to 2019 performance:
|
|
Quarter ended March 31, 2022 |
|
|
Quarter ended December 31, 2021 |
|
|
|
Transient |
|
|
Group |
|
|
Contract |
|
|
Transient |
|
|
Group |
|
|
Contract |
|
Room nights (in thousands) |
|
|
1,278 |
|
|
|
682 |
|
|
|
123 |
|
|
|
1,493 |
|
|
|
598 |
|
|
|
125 |
|
Percentage change in room
nights vs. same period in 2019 |
|
|
(19.1 |
)% |
|
|
(42.0 |
)% |
|
|
(1.4 |
)% |
|
|
(15.4 |
)% |
|
|
(42.3 |
)% |
|
|
9.9 |
% |
Rooms Revenues (in
millions) |
|
$ |
432 |
|
|
$ |
184 |
|
|
$ |
21 |
|
|
$ |
426 |
|
|
$ |
138 |
|
|
$ |
21 |
|
Percentage change in revenues
vs. same period in 2019 |
|
|
(3.2 |
)% |
|
|
(39.2 |
)% |
|
|
(12.7 |
)% |
|
|
(11.5 |
)% |
|
|
(43.0 |
)% |
|
|
(15.0 |
)% |
CAPITAL ALLOCATION STRATEGY
As previously announced, the Company sold the
Sheraton Boston for $233 million, including a $163 million bridge
loan provided by the Company to the buyer. Additionally, the
Company acquired a 49% ownership interest in a joint venture with
Noble Investment Group, a private hospitality asset manager with a
focus on upscale select-service and extended stay properties. The
agreement provides for the opportunity to acquire interests in
future funds and represents a new platform for potential
growth.
Subsequent to quarter end, the Company sold the
Sheraton New York Times Square Hotel for $373 million, including a
$250 million bridge loan provided to the buyer, and YVE Hotel Miami
for $50 million, including $1 million of FF&E funds.
CAPITAL EXPENDITURES
The following presents the Company’s capital
expenditures spend for the first quarter and the forecast for full
year 2022 (in millions):
|
|
Quarter ended March 31, 2022 |
|
|
2022 Full Year Forecast |
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual |
|
|
Low-end of range |
|
|
High-end of range |
|
ROI - Marriott Transformational Capital Program |
|
$ |
29 |
|
|
$ |
90 |
|
|
$ |
115 |
|
ROI - All other ROI
projects |
|
|
54 |
|
|
|
235 |
|
|
|
260 |
|
Total ROI project spend |
|
|
83 |
|
|
|
325 |
|
|
|
375 |
|
Renewals and Replacements |
|
|
39 |
|
|
|
175 |
|
|
|
225 |
|
Total Capital
Expenditures |
|
$ |
122 |
|
|
$ |
500 |
|
|
$ |
600 |
|
The Company invested heavily in capital
expenditures in the early phases of recovery in order to minimize
future disruption and believes these renovations will position
these hotels to capture additional revenue during the lodging
recovery. The Company received $4 million of operating profit
guarantees in the first quarter and expects to receive
approximately $11 million in operating profit guarantees in 2022
under the Marriott Transformational Capital Program. The program is
expected to be substantially complete by the end of 2022.
2022 OUTLOOK
Leisure demand is exceeding pre-pandemic levels
in many markets, however the Company believes that a continued
recovery within the lodging industry is highly dependent on the
strength of the economy, consumer confidence and the return of
corporate and group travel. Accordingly, the Company believes that
the impact of the recovery on specific markets and industries will
be uneven.
Given broader macroeconomic trends in 2022,
the timing and trajectory of the expected recovery remains
difficult to forecast. While the Company expects sequential RevPAR
improvements relative to 2019, seasonality and changing market and
business mix are expected to lead to lower RevPAR in the second
half of the year compared to the second quarter. Although the
Company cannot provide a full year forecast at this time, it
anticipates that for the second quarter of 2022, as compared to the
second quarter of 2021 and 2019, RevPAR will be in the
following range:
|
|
Q2 2022 Guidance |
|
|
|
|
|
|
|
|
Percent Change |
|
PercentChange |
|
|
Low-end of range |
|
|
High-end of range |
|
|
vs. 2021 |
|
vs. 2019 |
All owned hotel (pro forma) RevPAR |
|
$ |
195 |
|
|
$ |
205 |
|
|
76% to 85% |
|
(8)% to (3)% |
Based upon the above parameters, the Company
estimates its second quarter 2022 guidance as follows (in
millions):
|
|
Q2 2022 Guidance |
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Net income |
|
$ |
147 |
|
|
$ |
181 |
|
Adjusted EBITDAre |
|
|
375 |
|
|
|
410 |
|
In addition, while not providing full year
guidance on operations at this time, the Company estimates that for
full year 2022, interest expense and corporate and other expenses
will be in the following ranges (in millions):
|
|
2022 Full Year Forecast |
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Interest expense |
|
$ |
153 |
|
|
$ |
156 |
|
Corporate and other
expenses |
|
|
103 |
|
|
|
106 |
|
See the Q2 2022 Forecast Schedule and the Notes
to Financial Information for items that may affect forecast
results.
ABOUT HOST HOTELS &
RESORTS
Host Hotels & Resorts, Inc. is an S&P
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 73 properties in the United States and
five properties internationally totaling approximately 42,300
rooms. The Company also holds non-controlling interests in seven
domestic and one international joint ventures. 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®, The
Luxury Collection®, Hyatt®, Fairmont®, Hilton®, Four Seasons®,
Swissôtel®, ibis® and Novotel®, as well as independent brands. 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 which include, but
may not be limited to, our expectations regarding the impact of the
COVID-19 pandemic on our business, the recovery of travel and the
lodging industry and 2022 estimates with respect to our business,
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: the duration and scope
of the COVID-19 pandemic and its short and longer-term impact on
the demand for travel, transient and group business, and levels of
consumer confidence; actions governments, businesses and
individuals take in response to the pandemic, including limiting or
banning travel or the size of gatherings; the impact of the
pandemic and actions taken in response to the pandemic on global
and regional economies, travel, and economic activity, including
the duration and magnitude of its impact on unemployment rates,
business investment and consumer discretionary spending; the pace
of recovery when the COVID-19 pandemic subsides; general economic
uncertainty in U.S. markets where we own hotels and a worsening of
economic conditions or low levels of economic growth in these
markets; the effects of steps we and our hotel managers take to
reduce operating costs in response to the COVID-19 pandemic; other
changes (apart from the COVID-19 pandemic) in national and local
economic and business conditions and other factors such as natural
disasters 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 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 May 4, 2022 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,” “Host Inc.,” or the “Company,” 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 March 31, 2022, which are
non-controlling interests in Host LP in our consolidated balance
sheets and is included in net (income) loss 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 (unaudited,
in millions, except shares and per share amounts)
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
ASSETS |
|
Property and equipment, net |
|
$ |
9,596 |
|
|
$ |
9,994 |
|
Right-of-use assets |
|
|
563 |
|
|
|
551 |
|
Assets held for sale |
|
|
411 |
|
|
|
270 |
|
Due from managers |
|
|
125 |
|
|
|
113 |
|
Advances to and investments in
affiliates |
|
|
143 |
|
|
|
42 |
|
Furniture, fixtures and
equipment replacement fund |
|
|
163 |
|
|
|
144 |
|
Other |
|
|
562 |
|
|
|
431 |
|
Cash and cash equivalents |
|
|
266 |
|
|
|
807 |
|
Total assets |
|
$ |
11,829 |
|
|
$ |
12,352 |
|
|
|
|
|
|
|
|
LIABILITIES, NON-CONTROLLING INTERESTS AND
EQUITY |
|
Debt⁽¹⁾ |
|
|
|
|
|
|
Senior notes |
|
$ |
3,111 |
|
|
$ |
3,109 |
|
Credit facility, including the term loans of $997 |
|
|
991 |
|
|
|
1,673 |
|
Mortgage and other debt |
|
|
108 |
|
|
|
109 |
|
Total debt |
|
|
4,210 |
|
|
|
4,891 |
|
Lease liabilities |
|
|
575 |
|
|
|
564 |
|
Accounts payable and accrued
expenses |
|
|
97 |
|
|
|
85 |
|
Due to managers |
|
|
47 |
|
|
|
42 |
|
Other |
|
|
172 |
|
|
|
198 |
|
Total liabilities |
|
|
5,101 |
|
|
|
5,780 |
|
|
|
|
|
|
|
|
Redeemable non-controlling
interests - Host Hotels & Resorts, L.P. |
|
|
203 |
|
|
|
126 |
|
|
|
|
|
|
|
|
Host Hotels & Resorts,
Inc. stockholders’ equity: |
|
|
|
|
|
|
Common stock, par value $0.01, 1,050 million shares
authorized, 714.8 million shares and 714.1 million
shares issued and outstanding, respectively |
|
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
|
7,680 |
|
|
|
7,702 |
|
Accumulated other comprehensive loss |
|
|
(69 |
) |
|
|
(76 |
) |
Deficit |
|
|
(1,098 |
) |
|
|
(1,192 |
) |
Total equity of Host Hotels & Resorts, Inc. stockholders |
|
|
6,520 |
|
|
|
6,441 |
|
Non-redeemable non-controlling
interests—other consolidated partnerships |
|
|
5 |
|
|
|
5 |
|
Total equity |
|
|
6,525 |
|
|
|
6,446 |
|
Total liabilities, non-controlling interests and equity |
|
$ |
11,829 |
|
|
$ |
12,352 |
|
___________(1) Please see our First Quarter 2022
Supplemental Financial Information for more detail on our debt
balances and financial covenant ratios under our credit facility
and senior notes indentures.
HOST HOTELS & RESORTS,
INC.Condensed Consolidated Statements of
Operations (unaudited, in millions, except per share
amounts)
|
|
Quarter ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
Revenues |
|
|
|
|
|
|
Rooms |
|
$ |
655 |
|
|
$ |
257 |
|
Food and beverage |
|
|
297 |
|
|
|
77 |
|
Other |
|
|
122 |
|
|
|
65 |
|
Total revenues |
|
|
1,074 |
|
|
|
399 |
|
Expenses |
|
|
|
|
|
|
Rooms |
|
|
160 |
|
|
|
65 |
|
Food and beverage |
|
|
200 |
|
|
|
62 |
|
Other departmental and support expenses |
|
|
273 |
|
|
|
160 |
|
Management fees |
|
|
40 |
|
|
|
11 |
|
Other property-level expenses |
|
|
84 |
|
|
|
78 |
|
Depreciation and amortization |
|
|
172 |
|
|
|
165 |
|
Corporate and other expenses⁽¹⁾ |
|
|
23 |
|
|
|
24 |
|
Total operating costs and expenses |
|
|
952 |
|
|
|
565 |
|
Operating profit
(loss) |
|
|
122 |
|
|
|
(166 |
) |
Interest income |
|
|
1 |
|
|
|
1 |
|
Interest expense |
|
|
(36 |
) |
|
|
(42 |
) |
Other gains (losses) |
|
|
13 |
|
|
|
(1 |
) |
Equity in earnings of affiliates |
|
|
2 |
|
|
|
9 |
|
Income (loss) before
income taxes |
|
|
102 |
|
|
|
(199 |
) |
Benefit for income taxes |
|
|
16 |
|
|
|
46 |
|
Net income
(loss) |
|
|
118 |
|
|
|
(153 |
) |
Less: Net (income) loss
attributable to non-controlling interests |
|
|
(2 |
) |
|
|
1 |
|
Net income (loss)
attributable to Host Inc. |
|
$ |
116 |
|
|
$ |
(152 |
) |
Basic and diluted
earnings (loss) per common share |
|
$ |
0.16 |
|
|
$ |
(0.22 |
) |
___________(1) Corporate and other expenses
include the following items:
|
|
Quarter ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
General and administrative costs |
|
$ |
18 |
|
|
$ |
20 |
|
Non-cash stock-based
compensation expense |
|
|
5 |
|
|
|
4 |
|
Total |
|
$ |
23 |
|
|
$ |
24 |
|
HOST HOTELS & RESORTS,
INC.Earnings (Loss) per Common Share
(unaudited, in millions, except per share amounts)
|
|
Quarter ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
|
$ |
118 |
|
|
$ |
(153 |
) |
Less: Net (income) loss attributable to non-controlling
interests |
|
|
(2 |
) |
|
|
1 |
|
Net income (loss) attributable
to Host Inc. |
|
$ |
116 |
|
|
$ |
(152 |
) |
|
|
|
|
|
|
|
Basic weighted average shares
outstanding |
|
|
714.3 |
|
|
|
705.6 |
|
Assuming distribution of common shares granted under the
comprehensive stock plans, less shares assumed purchased at
market |
|
|
1.8 |
|
|
|
— |
|
Diluted weighted average
shares outstanding⁽¹⁾ |
|
|
716.1 |
|
|
|
705.6 |
|
Basic and diluted
earnings (loss) per common share |
|
$ |
0.16 |
|
|
$ |
(0.22 |
) |
___________(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)(2)
All Owned Hotels (pro forma) by Location Compared to
2021
|
As of March 31, 2022 |
|
Quarter ended March 31, 2022 |
|
Quarter ended March 31, 2021 |
|
|
|
|
|
Location |
No. ofProperties |
|
No. ofRooms |
|
AverageRoom Rate |
|
AverageOccupancyPercentage |
|
RevPAR |
|
Total RevPAR |
|
AverageRoom Rate |
|
AverageOccupancyPercentage |
|
RevPAR |
|
Total RevPAR |
|
PercentChange inRevPAR |
|
PercentChange inTotal RevPAR |
|
Miami |
|
2 |
|
|
1,033 |
|
$ |
733.63 |
|
|
70.9 |
% |
$ |
520.02 |
|
$ |
819.53 |
|
$ |
667.52 |
|
|
54.4 |
% |
$ |
363.25 |
|
$ |
558.76 |
|
|
43.2 |
% |
|
46.7 |
% |
Maui/Oahu |
|
4 |
|
|
2,007 |
|
|
544.76 |
|
|
76.4 |
|
|
416.04 |
|
|
640.58 |
|
|
404.89 |
|
|
40.0 |
|
|
162.15 |
|
|
257.24 |
|
|
156.6 |
|
|
149.0 |
|
Florida Gulf Coast |
|
5 |
|
|
1,850 |
|
|
555.52 |
|
|
74.0 |
|
|
411.06 |
|
|
779.69 |
|
|
521.91 |
|
|
52.8 |
|
|
275.67 |
|
|
489.52 |
|
|
49.1 |
|
|
59.3 |
|
Phoenix |
|
4 |
|
|
1,822 |
|
|
458.96 |
|
|
73.8 |
|
|
338.92 |
|
|
674.47 |
|
|
355.31 |
|
|
49.9 |
|
|
177.15 |
|
|
335.19 |
|
|
91.3 |
|
|
101.2 |
|
Jacksonville |
|
1 |
|
|
446 |
|
|
532.17 |
|
|
60.5 |
|
|
321.85 |
|
|
718.05 |
|
|
484.86 |
|
|
35.5 |
|
|
171.97 |
|
|
345.82 |
|
|
87.2 |
|
|
107.6 |
|
Orlando |
|
2 |
|
|
2,448 |
|
|
458.86 |
|
|
58.1 |
|
|
266.55 |
|
|
488.36 |
|
|
497.39 |
|
|
17.4 |
|
|
86.51 |
|
|
155.07 |
|
|
208.1 |
|
|
214.9 |
|
Los Angeles/ Orange
County |
|
3 |
|
|
1,067 |
|
|
287.84 |
|
|
64.9 |
|
|
186.70 |
|
|
266.13 |
|
|
197.29 |
|
|
21.7 |
|
|
42.81 |
|
|
58.31 |
|
|
336.1 |
|
|
356.4 |
|
Austin |
|
2 |
|
|
767 |
|
|
278.59 |
|
|
61.8 |
|
|
172.23 |
|
|
285.80 |
|
|
144.70 |
|
|
40.5 |
|
|
58.58 |
|
|
94.12 |
|
|
194.0 |
|
|
203.7 |
|
San Diego |
|
3 |
|
|
3,288 |
|
|
257.75 |
|
|
61.6 |
|
|
158.83 |
|
|
295.65 |
|
|
156.29 |
|
|
17.1 |
|
|
26.69 |
|
|
48.42 |
|
|
495.2 |
|
|
510.6 |
|
San Antonio |
|
2 |
|
|
1,512 |
|
|
188.39 |
|
|
67.3 |
|
|
126.82 |
|
|
197.62 |
|
|
126.00 |
|
|
27.1 |
|
|
34.11 |
|
|
48.10 |
|
|
271.8 |
|
|
310.9 |
|
Philadelphia |
|
2 |
|
|
810 |
|
|
176.60 |
|
|
66.7 |
|
|
117.84 |
|
|
183.75 |
|
|
135.04 |
|
|
36.9 |
|
|
49.89 |
|
|
70.10 |
|
|
136.2 |
|
|
162.1 |
|
Atlanta |
|
2 |
|
|
810 |
|
|
173.11 |
|
|
66.3 |
|
|
114.76 |
|
|
177.40 |
|
|
134.42 |
|
|
43.1 |
|
|
57.96 |
|
|
74.95 |
|
|
98.0 |
|
|
136.7 |
|
New Orleans |
|
1 |
|
|
1,333 |
|
|
203.99 |
|
|
55.9 |
|
|
113.96 |
|
|
167.80 |
|
|
107.71 |
|
|
13.3 |
|
|
14.30 |
|
|
27.41 |
|
|
697.0 |
|
|
512.3 |
|
Houston |
|
5 |
|
|
1,942 |
|
|
179.90 |
|
|
60.9 |
|
|
109.60 |
|
|
149.28 |
|
|
125.89 |
|
|
50.9 |
|
|
64.05 |
|
|
86.95 |
|
|
71.1 |
|
|
71.7 |
|
New York |
|
2 |
|
|
2,486 |
|
|
258.15 |
|
|
41.4 |
|
|
106.99 |
|
|
152.56 |
|
|
147.04 |
|
|
19.6 |
|
|
28.87 |
|
|
36.81 |
|
|
270.6 |
|
|
314.5 |
|
Northern Virginia |
|
2 |
|
|
916 |
|
|
198.70 |
|
|
52.8 |
|
|
104.94 |
|
|
148.86 |
|
|
161.02 |
|
|
34.7 |
|
|
55.90 |
|
|
79.84 |
|
|
87.7 |
|
|
86.4 |
|
Washington, D.C. (CBD) |
|
5 |
|
|
3,238 |
|
|
236.46 |
|
|
38.5 |
|
|
91.13 |
|
|
131.17 |
|
|
152.00 |
|
|
49.3 |
|
|
74.98 |
|
|
78.49 |
|
|
21.5 |
|
|
67.1 |
|
San Francisco/ San Jose |
|
6 |
|
|
4,162 |
|
|
197.28 |
|
|
45.0 |
|
|
88.73 |
|
|
138.45 |
|
|
139.20 |
|
|
13.2 |
|
|
18.37 |
|
|
24.13 |
|
|
383.1 |
|
|
473.8 |
|
Boston |
|
2 |
|
|
1,495 |
|
|
181.69 |
|
|
47.6 |
|
|
86.56 |
|
|
112.42 |
|
|
117.71 |
|
|
14.5 |
|
|
17.08 |
|
|
22.05 |
|
|
406.9 |
|
|
409.8 |
|
Denver |
|
3 |
|
|
1,340 |
|
|
152.03 |
|
|
45.3 |
|
|
68.83 |
|
|
102.89 |
|
|
112.49 |
|
|
17.2 |
|
|
19.34 |
|
|
23.70 |
|
|
255.9 |
|
|
334.0 |
|
Chicago |
|
4 |
|
|
1,816 |
|
|
156.81 |
|
|
40.1 |
|
|
62.93 |
|
|
84.05 |
|
|
115.21 |
|
|
16.2 |
|
|
18.62 |
|
|
22.77 |
|
|
238.0 |
|
|
269.1 |
|
Seattle |
|
2 |
|
|
1,315 |
|
|
174.78 |
|
|
35.4 |
|
|
61.83 |
|
|
87.48 |
|
|
149.63 |
|
|
7.2 |
|
|
10.84 |
|
|
14.53 |
|
|
470.3 |
|
|
502.2 |
|
Other |
|
9 |
|
|
2,932 |
|
|
272.54 |
|
|
50.8 |
|
|
138.46 |
|
|
193.54 |
|
|
220.69 |
|
|
32.7 |
|
|
72.18 |
|
|
101.44 |
|
|
91.8 |
|
|
90.8 |
|
Domestic |
|
73 |
|
|
40,835 |
|
|
311.06 |
|
|
55.2 |
|
|
171.62 |
|
|
283.53 |
|
|
256.57 |
|
|
29.0 |
|
|
74.51 |
|
|
117.18 |
|
|
130.3 |
|
|
142.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
5 |
|
|
1,499 |
|
|
98.95 |
|
|
39.5 |
|
|
39.12 |
|
|
57.86 |
|
|
89.36 |
|
|
13.0 |
|
|
11.62 |
|
|
15.46 |
|
|
236.5 |
|
|
274.2 |
|
All Locations |
|
78 |
|
|
42,334 |
|
|
305.63 |
|
|
54.6 |
|
|
166.93 |
|
|
275.55 |
|
|
253.85 |
|
|
28.5 |
|
|
72.27 |
|
|
113.55 |
|
|
131.0 |
|
|
142.7 |
|
All Owned Hotels (pro forma) by Location Compared to
2019
|
As of March 31, 2022 |
|
Quarter ended March 31, 2022 |
|
Quarter ended March 31, 2019 |
|
|
|
|
|
Location |
No. ofProperties |
|
No. ofRooms |
|
AverageRoom Rate |
|
AverageOccupancyPercentage |
|
RevPAR |
|
Total RevPAR |
|
AverageRoom Rate |
|
AverageOccupancyPercentage |
|
RevPAR |
|
Total RevPAR |
|
PercentChange inRevPAR |
|
PercentChange inTotal RevPAR |
|
Miami |
|
2 |
|
|
1,033 |
|
$ |
733.63 |
|
|
70.9 |
% |
$ |
520.02 |
|
$ |
819.53 |
|
$ |
462.17 |
|
|
85.4 |
% |
$ |
394.58 |
|
$ |
599.20 |
|
|
31.8 |
% |
|
36.8 |
% |
Maui/Oahu |
|
4 |
|
|
2,007 |
|
|
544.76 |
|
|
76.4 |
|
|
416.04 |
|
|
640.58 |
|
|
437.66 |
|
|
89.0 |
|
|
389.36 |
|
|
601.06 |
|
|
6.9 |
|
|
6.6 |
|
Florida Gulf Coast |
|
5 |
|
|
1,850 |
|
|
555.52 |
|
|
74.0 |
|
|
411.06 |
|
|
779.69 |
|
|
439.30 |
|
|
83.1 |
|
|
364.98 |
|
|
729.85 |
|
|
12.6 |
|
|
6.8 |
|
Phoenix |
|
4 |
|
|
1,822 |
|
|
458.96 |
|
|
73.8 |
|
|
338.92 |
|
|
674.47 |
|
|
373.48 |
|
|
82.7 |
|
|
308.80 |
|
|
644.54 |
|
|
9.8 |
|
|
4.6 |
|
Jacksonville |
|
1 |
|
|
446 |
|
|
532.17 |
|
|
60.5 |
|
|
321.85 |
|
|
718.05 |
|
|
367.78 |
|
|
78.6 |
|
|
289.04 |
|
|
690.11 |
|
|
11.4 |
|
|
4.0 |
|
Orlando |
|
2 |
|
|
2,448 |
|
|
458.86 |
|
|
58.1 |
|
|
266.55 |
|
|
488.36 |
|
|
318.30 |
|
|
79.1 |
|
|
251.68 |
|
|
511.48 |
|
|
5.9 |
|
|
(4.5 |
) |
Los Angeles/ Orange
County |
|
3 |
|
|
1,067 |
|
|
287.84 |
|
|
64.9 |
|
|
186.70 |
|
|
266.13 |
|
|
259.82 |
|
|
82.9 |
|
|
215.39 |
|
|
334.75 |
|
|
(13.3 |
) |
|
(20.5 |
) |
Austin |
|
2 |
|
|
767 |
|
|
278.59 |
|
|
61.8 |
|
|
172.23 |
|
|
285.80 |
|
|
278.33 |
|
|
84.3 |
|
|
234.59 |
|
|
399.89 |
|
|
(26.6 |
) |
|
(28.5 |
) |
San Diego |
|
3 |
|
|
3,288 |
|
|
257.75 |
|
|
61.6 |
|
|
158.83 |
|
|
295.65 |
|
|
252.91 |
|
|
76.9 |
|
|
194.59 |
|
|
349.55 |
|
|
(18.4 |
) |
|
(15.4 |
) |
San Antonio |
|
2 |
|
|
1,512 |
|
|
188.39 |
|
|
67.3 |
|
|
126.82 |
|
|
197.62 |
|
|
196.01 |
|
|
77.4 |
|
|
151.75 |
|
|
229.98 |
|
|
(16.4 |
) |
|
(14.1 |
) |
Philadelphia |
|
2 |
|
|
810 |
|
|
176.60 |
|
|
66.7 |
|
|
117.84 |
|
|
183.75 |
|
|
190.16 |
|
|
78.1 |
|
|
148.48 |
|
|
242.24 |
|
|
(20.6 |
) |
|
(24.1 |
) |
Atlanta |
|
2 |
|
|
810 |
|
|
173.11 |
|
|
66.3 |
|
|
114.76 |
|
|
177.40 |
|
|
215.83 |
|
|
85.8 |
|
|
185.09 |
|
|
304.09 |
|
|
(38.0 |
) |
|
(41.7 |
) |
New Orleans |
|
1 |
|
|
1,333 |
|
|
203.99 |
|
|
55.9 |
|
|
113.96 |
|
|
167.80 |
|
|
209.79 |
|
|
81.6 |
|
|
171.18 |
|
|
249.87 |
|
|
(33.4 |
) |
|
(32.8 |
) |
Houston |
|
5 |
|
|
1,942 |
|
|
179.90 |
|
|
60.9 |
|
|
109.60 |
|
|
149.28 |
|
|
182.60 |
|
|
75.8 |
|
|
138.36 |
|
|
201.04 |
|
|
(20.8 |
) |
|
(25.7 |
) |
New York |
|
2 |
|
|
2,486 |
|
|
258.15 |
|
|
41.4 |
|
|
106.99 |
|
|
152.56 |
|
|
258.82 |
|
|
71.9 |
|
|
186.02 |
|
|
305.05 |
|
|
(42.5 |
) |
|
(50.0 |
) |
Northern Virginia |
|
2 |
|
|
916 |
|
|
198.70 |
|
|
52.8 |
|
|
104.94 |
|
|
148.86 |
|
|
221.89 |
|
|
72.2 |
|
|
160.11 |
|
|
258.83 |
|
|
(34.5 |
) |
|
(42.5 |
) |
Washington, D.C. (CBD) |
|
5 |
|
|
3,238 |
|
|
236.46 |
|
|
38.5 |
|
|
91.13 |
|
|
131.17 |
|
|
247.89 |
|
|
73.3 |
|
|
181.79 |
|
|
257.64 |
|
|
(49.9 |
) |
|
(49.1 |
) |
San Francisco/ San Jose |
|
6 |
|
|
4,162 |
|
|
197.28 |
|
|
45.0 |
|
|
88.73 |
|
|
138.45 |
|
|
311.75 |
|
|
78.2 |
|
|
243.92 |
|
|
340.35 |
|
|
(63.6 |
) |
|
(59.3 |
) |
Boston |
|
2 |
|
|
1,495 |
|
|
181.69 |
|
|
47.6 |
|
|
86.56 |
|
|
112.42 |
|
|
195.31 |
|
|
73.5 |
|
|
143.63 |
|
|
222.97 |
|
|
(39.7 |
) |
|
(49.6 |
) |
Denver |
|
3 |
|
|
1,340 |
|
|
152.03 |
|
|
45.3 |
|
|
68.83 |
|
|
102.89 |
|
|
161.82 |
|
|
64.7 |
|
|
104.75 |
|
|
158.27 |
|
|
(34.3 |
) |
|
(35.0 |
) |
Chicago |
|
4 |
|
|
1,816 |
|
|
156.81 |
|
|
40.1 |
|
|
62.93 |
|
|
84.05 |
|
|
148.27 |
|
|
60.4 |
|
|
89.50 |
|
|
128.94 |
|
|
(29.7 |
) |
|
(34.8 |
) |
Seattle |
|
2 |
|
|
1,315 |
|
|
174.78 |
|
|
35.4 |
|
|
61.83 |
|
|
87.48 |
|
|
194.12 |
|
|
77.4 |
|
|
150.15 |
|
|
203.91 |
|
|
(58.8 |
) |
|
(57.1 |
) |
Other |
|
9 |
|
|
2,932 |
|
|
272.54 |
|
|
50.8 |
|
|
138.46 |
|
|
193.54 |
|
|
184.67 |
|
|
68.8 |
|
|
127.08 |
|
|
186.06 |
|
|
9.0 |
|
|
4.0 |
|
Domestic |
|
73 |
|
|
40,835 |
|
|
311.06 |
|
|
55.2 |
|
|
171.62 |
|
|
283.53 |
|
|
272.38 |
|
|
76.6 |
|
|
208.68 |
|
|
344.39 |
|
|
(17.8 |
) |
|
(17.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
5 |
|
|
1,499 |
|
|
98.95 |
|
|
39.5 |
|
|
39.12 |
|
|
57.86 |
|
|
143.88 |
|
|
67.6 |
|
|
97.32 |
|
|
140.81 |
|
|
(59.8 |
) |
|
(58.9 |
) |
All Locations |
|
78 |
|
|
42,334 |
|
|
305.63 |
|
|
54.6 |
|
|
166.93 |
|
|
275.55 |
|
|
268.31 |
|
|
76.3 |
|
|
204.70 |
|
|
337.11 |
|
|
(18.5 |
) |
|
(18.3 |
) |
___________(1) To facilitate a
quarter-to-quarter comparison of our operations, we typically
present certain operating statistics and operating results for the
periods included in this presentation on a comparable hotel basis.
However, due to the COVID-19 pandemic and its effects on operations
there is little comparability between periods. For this reason, we
temporarily are suspending our comparable hotel presentation and
instead present hotel operating results for all consolidated hotels
and, to facilitate comparisons between periods, we are presenting
results on a pro forma basis including the following adjustments:
(1) operating results are presented for all consolidated properties
owned as of March 31, 2022 but do not include the results of
operations for properties sold or held-for-sale as of the reporting
date; and (2) operating results for acquisitions as of March 31,
2022 are reflected for full calendar years, to include results 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. See the Notes to Financial Information – All Owned
Hotel Pro Forma Operating Statistics and Results for further
information on these pro forma statistics. The AC Hotel Scottsdale
North is a new development hotel that opened in January 2021 and
The Laura Hotel in Houston re-opened under new management in
November 2021. Therefore, no adjustments were made for results of
these hotels for periods prior to their openings. The Sheraton New
York Times Square Hotel and YVE Hotel Miami were classified as
held-for-sale at March 31, 2022, and are therefore excluded from
these results. CBD of a location refers to the central business
district.(2) Hotel RevPAR is calculated as room revenues divided by
the available room nights. Hotel Total RevPAR is calculated by
dividing the sum of rooms, food and beverage and other revenues by
the available room nights.N/M = Not meaningful
HOST HOTELS & RESORTS, INC.
Schedule of All Owned Hotel Pro Forma Results
(1)(unaudited, in millions, except hotel
statistics)
|
|
Quarter ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2019 |
|
Number of hotels |
|
|
78 |
|
|
|
77 |
|
|
|
76 |
|
Number of rooms |
|
|
42,334 |
|
|
|
42,111 |
|
|
|
41,946 |
|
Change in hotel Total
RevPAR |
|
|
142.7 |
% |
|
|
— |
|
|
|
— |
|
Change in hotel RevPAR |
|
|
131.0 |
% |
|
|
— |
|
|
|
— |
|
Operating profit (loss)
margin⁽²⁾ |
|
|
11.4 |
% |
|
|
(41.6 |
)% |
|
|
15.5 |
% |
All Owned Hotel Pro
Forma EBITDA margin⁽²⁾ |
|
|
31.4 |
% |
|
|
11.4 |
% |
|
|
31.5 |
% |
Food and beverage profit
margin⁽²⁾ |
|
|
32.7 |
% |
|
|
19.5 |
% |
|
|
34.2 |
% |
All Owned Hotel Pro Forma
food and beverage profit margin⁽²⁾ |
|
|
34.4 |
% |
|
|
18.6 |
% |
|
|
36.0 |
% |
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
118 |
|
|
$ |
(153 |
) |
|
$ |
189 |
|
Depreciation and
amortization |
|
|
172 |
|
|
|
165 |
|
|
|
170 |
|
Interest expense |
|
|
36 |
|
|
|
42 |
|
|
|
43 |
|
Provision (benefit) for income
taxes |
|
|
(16 |
) |
|
|
(46 |
) |
|
|
2 |
|
Gain on sale of property
and corporate level income/expense |
|
|
7 |
|
|
|
15 |
|
|
|
11 |
|
Severance expense (reversal)
at hotel properties |
|
|
2 |
|
|
|
(2 |
) |
|
|
— |
|
Pro forma adjustments⁽³⁾ |
|
|
11 |
|
|
|
28 |
|
|
|
(14 |
) |
All Owned Hotel Pro
Forma EBITDA⁽⁴⁾ |
|
$ |
330 |
|
|
$ |
49 |
|
|
$ |
401 |
|
|
|
Quarter ended March 31, 2022 |
|
|
Quarter ended March 31, 2021 |
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
GAAP Results |
|
|
Severance at hotel properties |
|
|
Pro forma adjustments⁽³⁾ |
|
|
Depreciation and corporate level items |
|
|
All Owned Hotel Pro Forma Results⁽⁴⁾ |
|
|
GAAP Results |
|
|
Severance at hotel properties |
|
|
Pro forma adjustments⁽³⁾ |
|
|
Depreciation and corporate level items |
|
|
All Owned Hotel Pro Forma Results⁽⁴⁾ |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
655 |
|
|
$ |
— |
|
|
$ |
(18 |
) |
|
$ |
— |
|
|
$ |
637 |
|
|
$ |
257 |
|
|
$ |
— |
|
|
$ |
17 |
|
|
$ |
— |
|
|
$ |
274 |
|
Food and beverage |
|
|
297 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
294 |
|
|
|
77 |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
86 |
|
Other |
|
|
122 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
121 |
|
|
|
65 |
|
|
|
— |
|
|
|
6 |
|
|
|
— |
|
|
|
71 |
|
Total revenues |
|
|
1,074 |
|
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
1,052 |
|
|
|
399 |
|
|
|
— |
|
|
|
32 |
|
|
|
— |
|
|
|
431 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
160 |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
149 |
|
|
|
65 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
65 |
|
Food and beverage |
|
|
200 |
|
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
193 |
|
|
|
62 |
|
|
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
70 |
|
Other |
|
|
397 |
|
|
|
(2 |
) |
|
|
(15 |
) |
|
|
— |
|
|
|
380 |
|
|
|
249 |
|
|
|
1 |
|
|
|
(3 |
) |
|
|
— |
|
|
|
247 |
|
Depreciation and amortization |
|
|
172 |
|
|
|
— |
|
|
|
— |
|
|
|
(172 |
) |
|
|
— |
|
|
|
165 |
|
|
|
— |
|
|
|
— |
|
|
|
(165 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
23 |
|
|
|
— |
|
|
|
— |
|
|
|
(23 |
) |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
— |
|
|
|
(24 |
) |
|
|
— |
|
Total expenses |
|
|
952 |
|
|
|
(2 |
) |
|
|
(33 |
) |
|
|
(195 |
) |
|
|
722 |
|
|
|
565 |
|
|
|
2 |
|
|
|
4 |
|
|
|
(189 |
) |
|
|
382 |
|
Operating
Profit - All Owned Hotel
Pro Forma EBITDA⁽⁴⁾ |
|
$ |
122 |
|
|
$ |
2 |
|
|
$ |
11 |
|
|
$ |
195 |
|
|
$ |
330 |
|
|
$ |
(166 |
) |
|
$ |
(2 |
) |
|
$ |
28 |
|
|
$ |
189 |
|
|
$ |
49 |
|
|
|
Quarter ended March 31, 2022 |
|
|
Quarter ended March 31, 2019 |
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
GAAP Results |
|
|
Severance at hotel properties |
|
|
Pro forma adjustments⁽³⁾ |
|
|
Depreciation and corporate level items |
|
|
All Owned Hotel Pro Forma Results⁽⁴⁾ |
|
|
GAAP Results |
|
|
Pro forma adjustments⁽³⁾ |
|
|
Depreciation and corporate level items |
|
|
All Owned Hotel Pro Forma Results⁽⁴⁾ |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
655 |
|
|
$ |
— |
|
|
$ |
(18 |
) |
|
$ |
— |
|
|
$ |
637 |
|
|
$ |
857 |
|
|
$ |
(84 |
) |
|
$ |
— |
|
|
$ |
773 |
|
Food and beverage |
|
|
297 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
294 |
|
|
|
433 |
|
|
|
(27 |
) |
|
|
— |
|
|
|
406 |
|
Other |
|
|
122 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
121 |
|
|
|
100 |
|
|
|
(6 |
) |
|
|
— |
|
|
|
94 |
|
Total revenues |
|
|
1,074 |
|
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
1,052 |
|
|
|
1,390 |
|
|
|
(117 |
) |
|
|
— |
|
|
|
1,273 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
160 |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
149 |
|
|
|
217 |
|
|
|
(34 |
) |
|
|
— |
|
|
|
183 |
|
Food and beverage |
|
|
200 |
|
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
193 |
|
|
|
285 |
|
|
|
(25 |
) |
|
|
— |
|
|
|
260 |
|
Other |
|
|
397 |
|
|
|
(2 |
) |
|
|
(15 |
) |
|
|
— |
|
|
|
380 |
|
|
|
473 |
|
|
|
(44 |
) |
|
|
— |
|
|
|
429 |
|
Depreciation and amortization |
|
|
172 |
|
|
|
— |
|
|
|
— |
|
|
|
(172 |
) |
|
|
— |
|
|
|
170 |
|
|
|
— |
|
|
|
(170 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
23 |
|
|
|
— |
|
|
|
— |
|
|
|
(23 |
) |
|
|
— |
|
|
|
29 |
|
|
|
— |
|
|
|
(29 |
) |
|
|
— |
|
Total expenses |
|
|
952 |
|
|
|
(2 |
) |
|
|
(33 |
) |
|
|
(195 |
) |
|
|
722 |
|
|
|
1,174 |
|
|
|
(103 |
) |
|
|
(199 |
) |
|
|
872 |
|
Operating
Profit - All
Owned Hotel
Pro Forma EBITDA⁽⁴⁾ |
|
$ |
122 |
|
|
$ |
2 |
|
|
$ |
11 |
|
|
$ |
195 |
|
|
$ |
330 |
|
|
$ |
216 |
|
|
$ |
(14 |
) |
|
$ |
199 |
|
|
$ |
401 |
|
___________(1) See the Notes to Financial
Information for a discussion of non-GAAP measures and the
limitations on their use.(2) Profit margins are calculated by
dividing the applicable operating profit by the related revenue
amount. GAAP profit margins are calculated using amounts presented
in the unaudited condensed consolidated statements of operations.
Hotel margins are calculated using amounts presented in the above
tables. (3) Pro forma adjustments represent the following items:
(i) the elimination of results of operations of our hotels sold or
held-for-sale as of March 31, 2022, which operations are included
in our unaudited condensed consolidated statements of operations as
continuing operations and (ii) the addition of results for periods
prior to our ownership for hotels acquired as of March 31, 2022.
All Owned Hotel Pro Forma results also include the results of our
leased office buildings and other non-hotel revenue and expense
items. (4) The AC Hotel Scottsdale North is a new development hotel
that opened in January 2021 and The Laura Hotel in Houston
re-opened under new management in November 2021. Therefore, no
adjustments were made for results of these hotels for periods prior
to their openings.
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income (Loss)
toEBITDA, EBITDAre
and Adjusted EBITDAre
(1)(unaudited, in millions)
|
|
Quarter ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
|
$ |
118 |
|
|
$ |
(153 |
) |
Interest expense |
|
|
36 |
|
|
|
42 |
|
Depreciation and amortization |
|
|
172 |
|
|
|
165 |
|
Income taxes |
|
|
(16 |
) |
|
|
(46 |
) |
EBITDA |
|
|
310 |
|
|
|
8 |
|
Gain on dispositions⁽²⁾ |
|
|
(12 |
) |
|
|
— |
|
Equity investment adjustments: |
|
|
|
|
|
|
Equity in earnings of affiliates |
|
|
(2 |
) |
|
|
(9 |
) |
Pro rata EBITDAre of equity investments⁽³⁾ |
|
|
10 |
|
|
|
6 |
|
EBITDAre |
|
|
306 |
|
|
|
5 |
|
Adjustments to EBITDAre: |
|
|
|
|
|
|
Severance expense (reversal) at hotel properties |
|
|
— |
|
|
|
(2 |
) |
Adjusted
EBITDAre |
|
$ |
306 |
|
|
$ |
3 |
|
___________(1) See the Notes to Financial
Information for discussion of non-GAAP measures.(2) Reflects the
sale of one hotel in 2022.(3) Unrealized gains of our
unconsolidated investments are not recognized in our EBITDAre,
Adjusted EBITDAre, NAREIT FFO or Adjusted FFO until they have been
realized by the unconsolidated partnership.
HOST HOTELS & RESORTS,
INC.Reconciliation of Diluted Earnings (Loss) per
Common Share toNAREIT and Adjusted Funds From
Operations per Diluted Share
(1)(unaudited, in millions, except per share
amounts)
|
|
Quarter ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
|
$ |
118 |
|
|
$ |
(153 |
) |
Less: Net (income) loss attributable to non-controlling
interests |
|
|
(2 |
) |
|
|
1 |
|
Net income (loss)
attributable to Host Inc. |
|
|
116 |
|
|
|
(152 |
) |
Adjustments: |
|
|
|
|
|
|
Gain on dispositions⁽²⁾ |
|
|
(12 |
) |
|
|
— |
|
Depreciation and amortization |
|
|
171 |
|
|
|
165 |
|
Equity investment adjustments: |
|
|
|
|
|
|
Equity in earnings of affiliates |
|
|
(2 |
) |
|
|
(9 |
) |
Pro rata FFO of equity investments⁽³⁾ |
|
|
9 |
|
|
|
4 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
FFO adjustments for non-controlling interests of Host
L.P. |
|
|
(3 |
) |
|
|
(2 |
) |
NAREIT
FFO |
|
|
279 |
|
|
|
6 |
|
Adjustments to NAREIT
FFO: |
|
|
|
|
|
|
Severance expense (reversal) at hotel properties |
|
|
— |
|
|
|
(2 |
) |
Adjusted
FFO |
|
$ |
279 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
For calculation on a
per share basis:⁽⁴⁾ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding -
EPS |
|
|
716.1 |
|
|
|
705.6 |
|
Assuming issuance of common shares granted under the
comprehensive stock plans |
|
|
— |
|
|
|
0.9 |
|
Diluted weighted
average shares outstanding - NAREIT FFO and
Adjusted FFO |
|
|
716.1 |
|
|
|
706.5 |
|
Diluted earnings
(loss) per common share |
|
$ |
0.16 |
|
|
$ |
(0.22 |
) |
NAREIT FFO per diluted
share |
|
$ |
0.39 |
|
|
$ |
0.01 |
|
Adjusted FFO per
diluted share |
|
$ |
0.39 |
|
|
$ |
0.01 |
|
___________(1-3) Refer to corresponding footnote
on the Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and
Adjusted EBITDAre.(4) Diluted earnings (loss) per common share,
NAREIT FFO per diluted share 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, EBITDAre and
Adjusted EBITDAre for Q2 2022
Forecasts (1)(unaudited, in millions)
|
|
Q2 2022 |
|
|
|
Low-end of range |
|
|
High-end of range |
|
Net income |
|
$ |
147 |
|
|
$ |
181 |
|
Interest expense |
|
|
37 |
|
|
|
37 |
|
Depreciation and amortization |
|
|
162 |
|
|
|
162 |
|
Income taxes |
|
|
26 |
|
|
|
27 |
|
EBITDA |
|
|
372 |
|
|
|
407 |
|
Equity investment adjustments: |
|
|
|
|
|
|
Equity in earnings of affiliates |
|
|
(5 |
) |
|
|
(5 |
) |
Pro rata EBITDAre of equity investments |
|
|
8 |
|
|
|
8 |
|
EBITDAre and Adjusted
EBITDAre |
|
$ |
375 |
|
|
$ |
410 |
|
___________(1) Forecasts are based on the
assumption that all owned hotel (pro forma) RevPAR will increase
76% to 85% compared to second quarter 2021 for the low and high end
of the forecast range and there will be no additional hotel
acquisitions or dispositions in the second quarter. For a
discussion of items that may affect forecast results, see the Notes
to Financial Information.
HOST HOTELS & RESORTS,
INC.Notes to Financial Information
FORECASTS
Our forecast of net income, EBITDA, EBITDAre and
Adjusted EBITDAre 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; 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.
ALL OWNED HOTEL PRO FORMA OPERATING
STATISTICS AND RESULTS
To facilitate a quarter-to-quarter comparison of
our operations, we typically present certain operating statistics
(i.e., Total RevPAR, RevPAR, average daily rate and average
occupancy) and operating results (revenues, expenses, hotel EBITDA
and associated margins) for the periods included in this
presentation on a comparable hotel basis in order to enable our
investors to better evaluate our operating performance (discussed
in “Hotel Property Level Operating Results” below). However, due to
the COVID-19 pandemic and its effects on operations, there is
little comparability between periods. For this reason, we
temporarily are suspending our comparable hotel presentation and
instead present hotel operating results for all consolidated hotels
and, to facilitate comparisons between periods, we are presenting
results on a pro forma basis, including the following adjustments:
(1) operating results are presented for all consolidated hotels
owned as of March 31, 2022, but do not include the results of
operations for properties sold or held-for-sale as of the reporting
date; and (2) operating results for acquisitions as of March 31,
2022 are reflected for full calendar years, to include results 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. At March 31, 2022, the Sheraton New York Times
Square Hotel and YVE Hotel Miami are classified as held-for-sale.
Therefore the results of these hotels are excluded from All Owned
Hotel Pro Forma Operating Statistics and Results.
FOREIGN CURRENCY
TRANSLATION
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. Therefore, hotel statistics
and results for non-U.S. properties include the effect of currency
fluctuations, consistent with our financial statement
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) EBITDAre and
Adjusted EBITDAre, and (iv) All Owned Hotel Pro Forma Operating
Statistics and Results. 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. Effective January 1, 2019, we adopted NAREIT’s
definition of FFO included in NAREIT’s Funds From Operations White
Paper – 2018 Restatement. NAREIT defines FFO as net income
(calculated in accordance with GAAP) excluding depreciation and
amortization related to real estate, gains and losses from the sale
of certain real estate assets, gains and losses from change in
control, impairment expense of certain real estate assets and
investments and adjustments for consolidated partially-owned
entities and unconsolidated affiliates. Adjustments for
consolidated partially-owned entities and unconsolidated affiliates
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, impairment expense 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 Funds From Operations White Paper – 2018 Restatement,
the primary purpose for including FFO as a supplemental measure of
operating performance of a REIT is to address the artificial nature
of historical cost depreciation and amortization of real estate and
real estate-related assets mandated by GAAP. For these reasons,
NAREIT adopted the FFO metric in order to promote a uniform
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 diluted
earnings per share and FFO per diluted share as defined by NAREIT,
provides useful supplemental information that is beneficial to an
investor’s 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 from 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
that are considered business combinations 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.
- Severance Expense
–In certain circumstances, we will add back hotel-level severance
expenses when we do not believe that such expenses are reflective
of the ongoing operation of our properties. Situations that would
result in a severance add-back include, but are not limited to, (i)
costs incurred as part of a broad-based reconfiguration of the
operating model with the specific hotel operator for a portfolio of
hotels and (ii) costs incurred at a specific hotel due to a
broad-based and significant reconfiguration of a hotel and/or its
workforce. We do not add back corporate-level severance costs or
severance costs at an individual hotel that we consider to be
incurred in the normal course of business.
In unusual circumstances, we also may adjust
NAREIT FFO for gains or losses that management believes are not
representative of the Company’s current operating performance. For
example, in 2017, as a result of the reduction of the U.S. federal
corporate income tax rate from 35% to 21% by the Tax Cuts and Jobs
Act, we remeasured our domestic deferred tax assets as of December
31, 2017 and recorded a one-time adjustment to reduce our deferred
tax assets and to increase the provision for income taxes by
approximately $11 million. We do not consider this adjustment to be
reflective of our on-going operating performance and, therefore, we
excluded this item from 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 that 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, it
is widely used by management in the annual budget process and for
our compensation programs.
EBITDAre and Adjusted EBITDAre
We present EBITDAre in accordance with NAREIT
guidelines, as defined in its September 2017 white paper “Earnings
Before Interest, Taxes, Depreciation and Amortization for Real
Estate,” to provide an additional performance measure to facilitate
the evaluation and comparison of the Company’s results with other
REITs. NAREIT defines EBITDAre as net income (calculated in
accordance with GAAP) excluding interest expense, income tax,
depreciation and amortization, gains or losses on disposition of
depreciated property (including gains or losses on change of
control), impairment expense of depreciated property and of
investments in unconsolidated affiliates caused by a decrease in
value of depreciated property in the affiliate, and adjustments to
reflect the entity’s pro rata share of EBITDAre of unconsolidated
affiliates.
We make additional adjustments to EBITDAre when
evaluating our performance because we believe that the exclusion of
certain additional items described below provides useful
supplemental information to investors regarding our ongoing
operating performance. We believe that the presentation of Adjusted
EBITDAre, when combined with the primary GAAP presentation of net
income, is beneficial to an investor’s understanding of our
operating performance. Adjusted EBITDAre also is similar to the
measure used to calculate certain credit ratios for our credit
facility and senior notes. We adjust EBITDAre for the following
items, which may occur in any period, and refer to this measure as
Adjusted EBITDAre:
- Property Insurance
Gains – We exclude the effect of property insurance gains reflected
in our consolidated statements of operations because we believe
that including them in Adjusted EBITDAre is not consistent with
reflecting the ongoing performance of our assets. In addition,
property insurance gains could be less important to investors given
that the depreciated asset book value written off in connection
with the calculation of the property insurance gain often does not
reflect the market value of real estate assets.
- Acquisition Costs –
Under GAAP, costs associated with completed property acquisitions
that are considered business combinations 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.
- Severance Expense –
In certain circumstances, we will add back hotel-level severance
expenses when we do not believe that such expenses are reflective
of the ongoing operation of our properties. Situations that would
result in a severance add-back include, but are not limited to, (i)
costs incurred as part of a broad-based reconfiguration of the
operating model with the specific hotel operator for a portfolio of
hotels and (ii) costs incurred at a specific hotel due to a
broad-based and significant reconfiguration of a hotel and/or its
workforce. We do not add back corporate-level severance costs or
severance costs at an individual hotel that we consider to be
incurred in the normal course of business.
In unusual circumstances, we also may adjust
EBITDAre for gains or losses that management believes are not
representative of the Company’s current operating performance. The
last adjustment of this nature was a 2013 exclusion of a gain from
an eminent domain claim.
Limitations on the Use of NAREIT FFO per Diluted
Share, Adjusted FFO per Diluted Share, EBITDA, EBITDAre and
Adjusted EBITDAre
We calculate EBITDAre and NAREIT FFO per diluted
share in accordance with standards established by NAREIT, which may
not be comparable to measures calculated by other companies that do
not use the NAREIT definition of EBITDAre and FFO or do not
calculate FFO per diluted share in accordance with NAREIT guidance.
In addition, although EBITDAre and FFO per diluted share are useful
measures when comparing our results to other REITs, they may not be
helpful to investors when comparing us to non-REITs. We also
calculate Adjusted FFO per diluted share and Adjusted EBITDAre,
which are not in accordance with NAREIT guidance and may not be
comparable to measures calculated by other REITs or 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, EBITDAre and Adjusted EBITDAre purposes only),
severance expense related to significant property-level
reconfiguration and other items have been, and will be, made and
are not reflected in the EBITDA, EBITDAre, Adjusted EBITDAre,
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 statements of
operations and consolidated statements of cash flows in the
Company’s annual report on Form 10-K and quarterly reports on Form
10-Q 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, EBITDAre and Adjusted
EBITDAre 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, EBITDAre, Adjusted EBITDAre, NAREIT
FFO and Adjusted FFO per diluted share include adjustments for the
pro rata share of our equity investments and NAREIT FFO and
Adjusted FFO per diluted share include adjustments for the pro rata
share of non-controlling partners in consolidated partnerships. Our
equity investments consist of interests ranging from 11% to 67% in
eight domestic and international partnerships that own a total of
10 properties and a vacation ownership development. 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 a
15% interest held by outside partners in a partnership owning one
hotel for which we do control the entity and, therefore,
consolidate its operations. These pro rata results for NAREIT FFO
and Adjusted FFO per diluted share, EBITDAre and Adjusted EBITDAre
were calculated as set forth in the definitions above. Readers
should be cautioned that the pro rata results presented in these
measures for consolidated partnerships (for NAREIT FFO and Adjusted
FFO per diluted share) and equity investments may not accurately
depict the legal and economic implications of our investments in
these entities.
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 hotel-level pro forma
basis as supplemental information for our investors. Our hotel
results reflect the operating results of our hotels as discussed in
“All Owned Hotel Pro Forma Operating Statistics and Results” above.
We present all owned hotel pro forma EBITDA to help us and our
investors evaluate the ongoing operating performance of our hotels
after removing the impact of the Company’s capital structure
(primarily interest expense) and its asset base (primarily
depreciation and amortization expense). Corporate-level costs and
expenses also are removed to arrive at property-level results. We
believe these property-level results provide investors with
supplemental information about the ongoing operating performance of
our hotels. All owned hotel pro forma results are presented both by
location and for the Company’s properties in the aggregate. We
eliminate from our hotel level operating results severance costs
related to broad-based and significant property-level
reconfiguration that is not considered to be within the normal
course of business, as we believe this elimination provides useful
supplemental information that is beneficial to an investor’s
understanding of our ongoing operating performance. We also
eliminate depreciation and amortization expense because, even
though depreciation and amortization expense 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 historically have risen
or fallen with market conditions, many real estate industry
investors have considered presentation of historical cost
accounting for operating results to be insufficient.
Because of the elimination of corporate-level
costs and expenses, gains or losses on disposition, certain
severance expenses and depreciation and amortization expense, the
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.
While management believes that presentation of
all owned hotel results is a 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 our hotels, as these decisions are
based on data for individual hotels and are not based on all owned
hotel results in the aggregate. For these reasons, we believe all
owned hotel operating results, when combined with the presentation
of GAAP operating profit, revenues and expenses, provide useful
information to investors and management.
SOURAV GHOSHChief Financial Officer(240)
744-5267 |
JAIME MARCUS Investor Relations(240)
744-5117ir@hosthotels.com |
|
|
A PDF accompanying this announcement is
available at:
http://ml.globenewswire.com/Resource/Download/42396ff7-53d7-4ad7-966b-a51082fd86ff
Host Hotels and Resorts (NASDAQ:HST)
Historical Stock Chart
From Mar 2024 to Apr 2024
Host Hotels and Resorts (NASDAQ:HST)
Historical Stock Chart
From Apr 2023 to Apr 2024