BETHESDA, Md., July 18 /PRNewswire-FirstCall/ -- Host Hotels &
Resorts, Inc. (NYSE:HST), the nation's largest lodging real estate
investment trust (REIT), today announced its results of operations
for the second quarter ended June 15, 2007. (Logo:
http://www.newscom.com/cgi-bin/prnh/20060417/HOSTLOGO ) -- Total
revenue increased $210 million, or 17.8%, to $1,391 million for the
second quarter and $422 million, or 21.0%, to $2,428 million for
year-to-date 2007. Excluding the revenues for the Starwood
portfolio, which was purchased in April 2006, revenues increased
8.4% and 7.9% for the second quarter and year-to-date 2007,
respectively. -- Net income decreased $181 million to $149 million
for the second quarter and $166 million to $336 million for
year-to-date 2007. Earnings per diluted share decreased $.35 to
$.27 and $.48 to $.62 for the second quarter and year-to-date 2007,
respectively. Net income in 2007 included a net loss of
approximately $46 million, or $.08 per diluted share, for the
second quarter, and a net gain of $90 million, or $.16 per diluted
share, for year-to-date 2007 associated with the refinancing of
debt and gains (losses) on hotel dispositions. By comparison, net
income in 2006 included a net gain of approximately $199 million,
or $.38 per diluted share, and $345 million, or $.78 per diluted
share, in the second quarter and year-to-date 2006, respectively,
associated with similar transactions, as well as preferred stock
redemptions and non-recurring costs associated with the Starwood
acquisition. For further detail, refer to the "Schedule of
Significant Transactions Affecting Earnings per Share and Funds
From Operations per Diluted Share" attached to this press release.
-- Funds from Operations (FFO) per diluted share increased 23.1% to
$.48 for the second quarter and 16.4% to $.78 for year-to-date
2007. FFO was reduced by $.08 per diluted share for costs
associated with debt refinancings for both the second quarter and
year-to-date 2007. By comparison, FFO per diluted share was reduced
by $.04 and $.05 for the second quarter and year-to-date 2006,
respectively, for costs associated with debt refinancings, as well
as costs associated with preferred stock redemptions and the
Starwood acquisition. For further detail, refer to the "Schedule of
Significant Transactions Affecting Earnings per Share and Funds
From Operations per Diluted Share" attached to this press release.
The Company also announced the following second quarter results for
Host Hotels & Resorts, L.P., through which it conducts all of
its operations and holds approximately 97% of the partnership
interests: -- Net income decreased $189 million to $154 million for
the second quarter and $176 million to $348 million for
year-to-date 2007. Net income of Host LP was also affected by
certain transactions-See "Schedule of Significant Transactions
Affecting Earnings per Share and Funds From Operations per Diluted
Share." -- Adjusted EBITDA, which is Earnings before Interest
Expense, Income Taxes, Depreciation, Amortization and other items,
increased 19.3% to $414 million for the second quarter and 21.1% to
$677 million for year- to-date 2007. Adjusted EBITDA, FFO per
diluted share and comparable hotel adjusted operating profit
margins (discussed below) are non-GAAP (generally accepted
accounting principles) financial measures within the meaning of the
rules of the Securities and Exchange Commission (SEC). See the
discussion included in this press release for information regarding
these non-GAAP financial measures. Operating Results The Company
presents RevPAR for its comparable hotels plus the Starwood
portfolio acquired in April of 2006 due to the significant
contribution of these hotels to the Company's operations. RevPAR
for the comparable hotels plus the Starwood portfolio, which
includes the 24 hotels acquired from Starwood in 2006 that we own
as of June 15, 2007, increased 6.7% for the quarter and 6.8%
year-to-date. The comparable hotel plus the Starwood portfolio
RevPAR gains were driven by an increase in average room rates of
6.0% for the quarter and 6.1% year-to-date and increases in
occupancy of .5 percentage points for both the quarter and
year-to-date periods. Comparable hotel RevPAR for the second
quarter of 2007 increased 5.5% when compared to the second quarter
of 2006 and year-to-date comparable hotel RevPAR increased 5.8%
when compared to year-to-date 2006. Comparable hotel adjusted
operating profit margins increased .5 percentage points and .4
percentage points for the second quarter and year-to-date 2007,
respectively. For further detail, see "Notes to the Financial
Information." Financing Activities and Balance Sheet During the
second quarter, the Company continued to reduce interest costs, as
well as manage its capital structure to provide financial
flexibility. On May 2, 2007, the Company paid approximately $547
million in connection with the defeasance of $514 million of
mortgage debt with a 7.61% interest rate (the "CMBS Loan"),
primarily utilizing proceeds from its March issuance of $600
million of 25/8% Exchangeable Senior Debentures. The payment
included approximately $33 million in prepayment/defeasance and
other costs. On May 25, 2007, the Company successfully amended its
credit facility to increase the size of the facility to $600
million, extend the maturity from 2008 to 2011 and modify the terms
of the facility, including lowering the rate of interest on
borrowings from a spread of 200 to 375 basis points over LIBOR to
65 to 150 basis points over LIBOR, depending on the Company's
leverage ratio. The amended facility also has an accordion feature
that allows for total borrowing capacity of up to $1 billion. There
are currently no amounts outstanding under the facility. Since
December 31, 2006, the Company has decreased its weighted average
interest rate from 6.8% to 6.1% as a result of its 2007
refinancings. As of June 15, 2007, the Company had approximately
$497 million of cash and cash equivalents. Excluding amounts
necessary for working capital, the Company intends to use its
remaining available funds to further invest in its portfolio,
acquire new properties or make further debt repayments. Dividend As
previously announced, the Company expects to declare a fixed $.20
per share common dividend each quarter, as well as a special
dividend in the fourth quarter of each year, the amount of which
will be based on the Company's taxable income. Based on the
Company's 2007 guidance, the Company expects that the fourth
quarter special dividend would be in the range of $.10 to $.20.
2007 Outlook The Company expects RevPAR for the comparable hotels
plus the Starwood portfolio to increase approximately 5.5% to 6.5%
for the third quarter and 6.5% to 7.5% for the full year. For full
year 2007, the Company expects its operating profit margins under
GAAP to increase approximately 30 basis points to 70 basis points
and its comparable hotel adjusted operating profit margins to
increase approximately 75 basis points to 100 basis points. Based
upon this guidance, the Company estimates that full year 2007
guidance for Host Hotels & Resorts, Inc. and Host Hotels &
Resorts, L.P. would be as follows: Host Hotels & Resorts, Inc.
-- earnings per diluted share should be approximately $.12 to $.13
for the third quarter and $1.11 to $1.17 for the full year; -- net
income should be approximately $65 million to $70 million for the
third quarter and $602 million to $634 million for the full year;
and -- FFO per diluted share should be approximately $.32 to $.33
for the third quarter and $1.78 to $1.84 for the full year
(including a charge of approximately $.08 per diluted share for the
full year for debt prepayment costs). Host Hotels & Resorts,
L.P. -- net income should be approximately $624 million to $656
million for the full year 2007; and -- Adjusted EBITDA for the full
year 2007 should be approximately $1,450 million to $1,480 million.
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 121
properties with approximately 64,000 rooms, and also holds a
minority interest in a joint venture that owns seven hotels in
Europe with approximately 2,700 rooms. Guided by a disciplined
approach to capital allocation and aggressive asset management, the
Company partners with premium brands such as Marriott(R),
Ritz-Carlton(R), Westin(R), Sheraton(R), W(R), St. Regis(R), The
Luxury Collection(R), Hyatt(R), Fairmont(R), Four Seasons(R),
Hilton(R) and Swissotel(R)* in the operation of properties in over
50 major markets worldwide. For additional information, please
visit the Company's website at http://www.hosthotels.com/. Note:
This press release contains forward-looking statements within the
meaning of federal securities regulations. These forward-looking
statements are identified by their use of terms and phrases such as
"anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "plan," "predict," "project," "will," "continue" and other
similar terms and phrases, including references to assumption 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: national and local economic and business
conditions, including the potential for terrorist attacks, that
will affect occupancy rates at our hotels and the demand for hotel
products and services; operating risks associated with the hotel
business; risks associated with the level of our indebtedness and
our ability to meet covenants in our debt agreements; relationships
with property managers; our ability to maintain our properties in a
first-class manner, including meeting capital expenditure
requirements; our ability to compete effectively in areas such as
access, location, quality of accommodations and room rate
structures; changes in travel patterns, taxes and government
regulations which influence or determine wages, prices,
construction procedures and costs; our ability to complete
acquisitions and dispositions; and our ability to continue to
satisfy complex rules in order for us to qualify as a REIT for
federal income tax purposes and other risks and uncertainties
associated with our business described in the Company's filings
with the SEC. Although the Company believes the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that the
expectations will be attained or that any deviation will not be
material. All information in this release is as of July 17, 2007,
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. Host Hotels & Resorts, Inc.,
herein referred to as "we" or "Host," is a self-managed and
self-administered real estate investment trust (REIT) that owns
hotel properties. We conduct our operations as an umbrella
partnership REIT through an operating partnership, Host Hotels
& Resorts, L.P., or Host LP, of which we are the sole general
partner. For each share of our common stock, Host LP has issued to
us one unit of operating partnership interest, or OP Unit. When
distinguishing between Host and Host LP, the primary difference is
approximately 3% of the partnership interests in Host LP held by
outside partners as of June 15, 2007, which is reflected as
minority interest in our consolidated balance sheets and minority
interest expense 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. For
information on our reporting periods and non-GAAP financial
measures (including Adjusted EBITDA, FFO per diluted share and
comparable hotel adjusted operating profit margin) which we believe
is useful to investors, see the Notes to the Financial Information
included in this release. HOST HOTELS & RESORTS, INC.
Consolidated Balance Sheets (a) (in millions, except shares and per
share amounts) June 15, December 31, 2007 2006 (unaudited) ASSETS
Property and equipment, net $10,510 $10,584 Assets held for sale -
96 Due from managers 122 51 Investments in affiliates 166 160
Deferred financing costs, net 57 60 Furniture, fixtures and
equipment replacement fund 133 100 Other 218 199 Restricted cash
108 194 Cash and cash equivalents 497 364 Total assets $11,811
$11,808 LIABILITIES AND STOCKHOLDERS' EQUITY Debt Senior notes,
including $1,087 million and $495 million, respectively, net of
discount, of exchangeable senior debentures $4,112 $3,526 Mortgage
debt 1,617 2,014 Credit facility - 250 Other 88 88 Total debt 5,817
5,878 Accounts payable and accrued expenses 196 243 Other 235 252
Total liabilities 6,248 6,373 Interest of minority partners of Host
Hotels & Resorts, L.P. 186 185 Interest of minority partners of
other consolidated partnerships 28 28 Stockholders' equity
Cumulative redeemable preferred stock (liquidation preference $100
million) 50 million shares authorized; 4.0 issued and outstanding
97 97 Common stock, par value $.01, 750 million shares authorized;
522.2 million shares and 521.1 million shares issued and
outstanding, respectively 5 5 Additional paid-in capital 5,670
5,680 Accumulated other comprehensive income 29 25 Deficit (452)
(585) Total stockholders' equity 5,349 5,222 Total liabilities and
stockholders' equity $11,811 $11,808 (a) Our consolidated balance
sheet as of June 15, 2007 has been prepared without audit. Certain
information and footnote disclosures normally included in financial
statements presented in accordance with GAAP have been omitted. The
consolidated balance sheets should be read in conjunction with the
consolidated financial statements and notes thereto included in our
most recent Annual Report on Form 10-K. HOST HOTELS & RESORTS,
INC. Consolidated Statements of Operations (a) (unaudited, in
millions, except per share amounts) Quarter ended Year-to-date
ended June 15, June 16, June 15, June 16, 2007 2006 2007 2006
Revenues Rooms $846 $714 $1,460 $1,201 Food and beverage 429 368
752 627 Other 91 73 160 123 Total hotel sales 1,366 1,155 2,372
1,951 Rental income (b) 25 26 56 55 Total revenues 1,391 1,181
2,428 2,006 Expenses Rooms 194 164 346 282 Food and beverage 297
259 534 450 Hotel departmental expenses 316 267 567 467 Management
fees 72 56 117 90 Other property-level expenses (b) 95 83 176 148
Depreciation and amortization 119 104 235 191 Corporate and other
expenses 14 21 35 41 Total operating costs and expenses 1,107 954
2,010 1,669 Operating profit 284 227 418 337 Interest income 12 9
18 14 Interest expense (136) (107) (230) (198) Net gains on
property transactions 1 1 2 2 Minority interest expense (5) (16)
(16) (29) Equity in earnings (losses) of affiliates 3 (6) 5 (5)
Income before income taxes 159 108 197 121 Provision for income
taxes (11) (17) (6) (18) Income from continuing operations 148 91
191 103 Income from discontinued operations (c) 1 239 145 399 Net
income 149 330 336 502 Less: Dividends on preferred stock (2) (4)
(4) (10) Issuance costs of redeemed preferred stock (d) - (6) - (6)
Net income available to common stockholders $147 $320 $332 $486
Basic earnings per common share: Continuing operations $.28 $.16
$.36 $.20 Discontinued operations - .49 .28 .92 Basic earnings per
common share $.28 $.65 $.64 $1.12 Diluted earnings per common
share: Continuing operations $.27 $.16 $.36 $.20 Discontinued
operations - .46 .26 .90 Diluted earnings per common share $.27
$.62 $.62 $1.10 (a) Our 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. The
consolidated statements of operations should be read in conjunction
with the consolidated financial statements and notes thereto
included in our most recent Annual Report on Form 10-K. (b) Rental
income and expense are as follows: Quarter ended Year-to-date ended
June 15, June 16, June 15, June 16, 2007 2006 2007 2006 Rental
income $7 $8 $19 $19 Full-service 18 18 37 36 Select service and
office buildings $25 $26 $56 $55 Rental and other expenses
(included in other property level expenses) $2 $2 $4 $3
Full-service 19 18 38 37 Select service and office buildings $21
$20 $42 $40 (c) Reflects the results of operations (including $3
million of business interruption insurance proceeds) and gains on
sale, net of the related income tax, for seven properties sold in
2007 and seven properties sold in 2006. (d) Represents the original
issuance cost associated with the redemption of the Class C
preferred stock in 2006. HOST HOTELS & RESORTS, INC. Earnings
per Common Share (unaudited, in millions, except per share amounts)
Quarter ended Quarter ended June 15, 2007 June 16, 2006 Income
Shares Per Income Shares Per (Numer- (Denom- Share (Numer- (Denom-
Share ator) inator) Amount ator) inator) Amount Net income $149
522.1 $.29 $330 492.8 $.67 Dividends on preferred stock (2) - (.01)
(4) - (.01) Issuance costs of redeemed preferred stock (a) - - -
(6) - (.01) Basic earnings available to common stockholders (b)(c)
147 522.1 .28 320 492.8 .65 Assuming distribution of common shares
granted under the comprehensive stock plan less shares assumed
purchased at average market price - .7 - - 2.0 - Assuming
conversion of minority OP units issuable - 1.2 - - 2.5 (.01)
Assuming conversion of 2004 Exchangeable Senior Debentures 4 29.0
(.01) 4 28.1 (.02) Diluted earnings available to common
stockholders (b)(c) $151 553.0 $.27 $324 525.4 $.62 Year-to-date
ended Year-to-date ended June 15, 2007 June 16, 2006 Income Shares
Per Income Shares Per (Numer- (Denom- Share (Numer- (Denom- Share
ator) inator) Amount ator) inator) Amount Net income $336 521.8
$.65 $502 435.7 $1.15 Dividends on preferred stock (4) - (.01) (10)
- (.02) Issuance costs of redeemed preferred stock (a) - - - (6) -
(.01) Basic earnings available to common stockholders (b)(c) 332
521.8 .64 486 435.7 1.12 Assuming distribution of common shares
granted under the comprehensive stock plan less shares assumed
purchased at average market price - .8 - - 2.0 (.01) Assuming
conversion of minority OP units issuable - 1.2 - - 2.5 (.01)
Assuming conversion of 2004 Exchangeable Senior Debentures 9 29.0
(.02) - - - Diluted earnings available to common stockholders
(b)(c) $341 552.8 $.62 $486 440.2 $1.10 (a) Represents the original
issuance costs associated with the redemption of the Company's
Class C preferred stock in 2006. (b) Basic earnings per common
share is computed by dividing net income available to common
stockholders by the weighted average number of shares of common
stock outstanding. Diluted earnings per common share is computed by
dividing net income available to common stockholders as adjusted
for potentially dilutive securities, by the weighted average number
of shares of common stock outstanding plus potentially dilutive
securities. Dilutive securities may include shares granted under
comprehensive stock plans, preferred OP Units held by minority
partners, convertible debt securities and other minority interests
that have the option to convert their limited partnership interests
to common OP Units. No effect is shown for any securities that are
anti-dilutive. (c) Our results for both periods presented were
significantly affected by certain transactions. For further detail
see "Schedule of Significant Transactions Affecting Earnings per
Share and Funds From Operations per Diluted Share." HOST HOTELS
& RESORTS, INC. Comparable Hotel Operating Data (unaudited)
Comparable Hotels by Region (a) As of June 15, 2007 Quarter Ended
June 15, 2007 Average Average No. of No. of Daily Occupancy
Properties Rooms Rate Percentage RevPAR Pacific 22 12,016 $214.04
75.5% $161.70 Florida 9 5,663 231.75 76.7 177.77 Mid-Atlantic 8
5,870 245.77 84.4 207.45 DC Metro 12 5,399 205.32 84.8 174.17 North
Central 12 4,907 158.02 74.3 117.40 South Central 7 4,126 160.68
74.7 120.00 Atlanta 7 2,625 204.27 71.9 146.88 New England 6 3,032
187.15 80.8 151.30 Mountain 6 2,210 148.01 65.8 97.32 International
5 1,953 161.45 72.1 116.43 All Regions 94 47,801 202.32 77.1 156.08
Quarter ended June 16, 2006 Average Average Percent Daily Occupancy
Change in Rate Percentage RevPAR RevPAR Pacific $202.02 75.9%
$153.42 5.4% Florida 224.96 75.8 170.52 4.3 Mid-Atlantic 225.27
82.3 185.39 11.9 DC Metro 201.72 83.4 168.29 3.5 North Central
150.08 75.6 113.44 3.5 South Central 149.95 73.4 110.07 9.0 Atlanta
193.11 74.8 144.44 1.7 New England 177.97 83.0 147.74 2.4 Mountain
138.79 65.3 90.63 7.4 International 154.33 75.3 116.23 0.2 All
Regions 191.65 77.1 147.87 5.5 As of Year-to-date June 15, 2007
ended June 15, 2007 Average Average No. of No. of Daily Occupancy
Properties Rooms Rate Percentage RevPAR Pacific 22 12,016 $211.90
73.8% $156.30 Florida 9 5,663 239.45 76.4 183.01 Mid-Atlantic 8
5,870 234.59 79.0 185.34 DC Metro 12 5,399 201.54 77.3 155.76 North
Central 12 4,907 147.10 68.5 100.74 South Central 7 4,126 158.80
75.4 119.77 Atlanta 7 2,625 198.26 70.8 140.34 New England 6 3,032
171.24 72.4 124.03 Mountain 6 2,210 158.01 65.6 103.61
International 5 1,953 155.48 68.5 106.46 All Regions 94 47,801
198.63 73.9 146.80 Year-to-date ended June 16, 2006 Average Average
Percent Daily Occupancy Change in Rate Percentage RevPAR RevPAR
Pacific $198.98 74.6% $148.52 5.2% Florida 230.38 76.0 175.00 4.6
Mid-Atlantic 215.34 77.7 167.22 10.8 DC Metro 197.09 74.0 145.80
6.8 North Central 139.91 70.5 98.69 2.1 South Central 146.53 74.7
109.45 9.4 Atlanta 188.29 73.8 138.94 1.0 New England 163.60 74.0
121.02 2.5 Mountain 147.50 64.3 94.81 9.3 International 148.51 71.9
106.78 (0.3) All Regions 187.45 74.0 138.73 5.8 Comparable Hotels
by Property Type (a) As of June 15, 2007 Quarter Ended June 15,
2007 Average Average No. of No. of Daily Occupancy Properties Rooms
Rate Percentage RevPAR Urban 40 23,518 $213.21 81.0% $172.66
Suburban 28 10,901 158.29 69.8 110.47 Airport 15 6,557 143.12 77.3
110.63 Resort/Conference 11 6,825 282.57 75.5 213.33 All Types 94
47,801 202.32 77.1 156.08 Quarter ended June 16, 2006 Average
Average Percent Daily Occupancy Change in Rate Percentage RevPAR
RevPAR Urban $199.18 81.0% $161.25 7.1% Suburban 149.24 69.6 103.84
6.4 Airport 137.91 75.4 103.94 6.4 Resort/Conference 272.70 77.8
212.19 0.5 All Types 191.65 77.1 147.87 5.5 As of Year-to-date June
15, 2007 ended June 15, 2007 Average Average No. of No. of Daily
Occupancy Properties Rooms Rate Percentage RevPAR Urban 40 23,518
$206.93 77.0% $159.35 Suburban 28 10,901 156.84 67.6 105.99 Airport
15 6,557 143.21 73.5 105.28 Resort/Conference 11 6,825 284.45 73.8
209.79 All Types 94 47,801 198.63 73.9 146.80 Year-to-date ended
June 16, 2006 Average Average Percent Daily Occupancy Change in
Rate Percentage RevPAR RevPAR Urban $193.11 76.9% $148.44 7.3%
Suburban 147.99 67.4 99.70 6.3 Airport 137.04 72.6 99.53 5.8
Resort/Conference 271.08 76.2 206.48 1.6 All Types 187.45 74.0
138.73 5.8 (a) See the notes to financial information for a
discussion of reporting periods and comparable hotel results. HOST
HOTELS & RESORTS, INC. Comparable Hotels plus the Starwood
Portfolio Hotel Operating Data (unaudited) Comparable Hotels plus
the Starwood Portfolio by Region (a) As of June 15, 2007 Quarter
Ended June 15, 2007 Average Average No. of No. of Daily Occupancy
Properties Rooms Rate Percentage RevPAR Pacific 28 16,019 $204.17
76.8% $156.89 Florida 10 5,922 226.42 76.9 174.08 Mid-Atlantic 11
8,681 254.96 85.3 217.38 DC Metro 13 5,662 206.99 85.1 176.05 North
Central 15 6,496 153.23 72.1 110.52 South Central 8 4,358 167.42
74.3 124.44 Atlanta 7 2,625 204.27 71.9 146.88 New England 11 5,663
177.62 76.3 135.45 Mountain 8 2,856 149.15 68.6 102.30
International 7 2,471 154.69 70.9 109.69 All Regions 118 60,753
200.33 77.2 154.69 Quarter ended June 16, 2006 Average Average
Percent Daily Occupancy Change in Rate Percentages RevPAR RevPAR
Pacific $192.70 76.9% $148.11 5.9% Florida 219.40 75.8 166.39 4.6
Mid-Atlantic 231.06 81.8 188.96 15.0 DC Metro 202.33 83.7 169.29
4.0 North Central 146.72 72.4 106.26 4.0 South Central 155.41 73.1
113.62 9.5 Atlanta 193.11 74.8 144.44 1.7 New England 173.54 76.4
132.67 2.1 Mountain 139.07 68.1 94.67 8.1 International 146.18 74.8
109.30 0.4 All Regions 188.99 76.7 145.00 6.7 Year-to-date As of
June 15, 2007 Ended June 15, 2007 Average Average No. of No. of
Daily Occupancy Properties Rooms Rate Percentage RevPAR Pacific 28
16,019 $203.13 74.8% $151.96 Florida 10 5,922 234.68 76.6 179.70
Mid-Atlantic 11 8,681 241.06 80.6 194.39 DC Metro 13 5,662 202.59
77.6 157.28 North Central 15 6,496 144.13 67.5 97.36 South Central
8 4,358 164.25 75.1 123.28 Atlanta 7 2,625 198.26 70.8 140.34 New
England 11 5,663 166.22 68.6 114.06 Mountain 8 2,856 157.24 67.7
106.41 International 7 2,471 149.15 68.0 101.35 All Regions 118
60,753 196.29 74.0 145.23 Year-to-date ended June 16, 2006 Average
Average Percent Daily Occupancy Change in Rate Percentages RevPAR
RevPAR Pacific $191.71 75.3% $144.30 5.3% Florida 225.36 76.1
171.46 4.8 Mid-Atlantic 220.26 76.9 169.29 14.8 DC Metro 197.57
74.4 146.96 7.0 North Central 137.84 68.3 94.14 3.4 South Central
151.10 74.4 112.46 9.6 Atlanta 188.29 73.8 138.94 1.0 New England
162.19 68.6 111.24 2.5 Mountain 145.94 66.8 97.51 9.1 International
140.38 72.0 101.02 0.3 All Regions 184.97 73.5 135.94 6.8
Comparable Hotels plus the Starwood Portfolio by Property Type (a)
As of June 15, 2007 Quarter Ended June 15, 2007 Average Average No.
of No. of Daily Occupancy Properties Rooms Rate Percentages RevPAR
Urban 55 33,016 $212.39 79.9% $169.75 Suburban 34 12,844 156.49
70.0 109.58 Airport 17 7,556 138.65 78.4 108.64 Resort/Conference
12 7,337 276.41 76.3 211.00 All Types 118 60,753 200.33 77.2 154.69
Quarter ended June 16, 2006 Average Average Percent Daily Occupancy
Change in Rate Percentages RevPAR RevPAR Urban $197.93 79.1%
$156.60 8.4% Suburban 147.61 69.5 102.63 6.8 Airport 132.70 76.8
101.93 6.6 Resort/Conference 267.13 78.3 209.16 0.9 All Types
188.99 76.7 145.00 6.7 Year-to-date As of June 15, 2007 Ended June
15, 2007 Average Average No. of No. of Daily Occupancy Properties
Rooms Rate Percentages RevPAR Urban 55 33,016 $205.35 76.3% $156.64
Suburban 34 12,844 155.82 67.4 105.04 Airport 17 7,556 139.33 75.0
104.43 Resort/Conference 12 7,337 279.15 74.4 207.55 All Types 118
60,753 196.29 74.0 145.23 Year-to-date ended June 16, 2006 Average
Average Percent Daily Occupancy Change in Rate Percentages RevPAR
RevPAR Urban $191.69 75.2% $144.17 8.6% Suburban 147.05 67.0 98.59
6.5 Airport 132.79 74.1 98.41 6.1 Resort/Conference 266.62 76.5
204.05 1.7 All Types 184.97 73.5 135.94 6.8 (a) Reflects our
comparable hotels plus the 24 hotels acquired from Starwood in
April 2006 that we own as of June 15, 2007. For further detail, see
the notes to the financial information for a discussion of
reporting periods and comparable hotel plus the Starwood portfolio
RevPAR. The 2006 results and percentage change statistics include
results prior to our ownership for the Starwood portfolio. HOST
HOTELS & RESORTS, INC. Comparable Hotel Operating Data Schedule
of Comparable Hotel Results (a) (unaudited, in millions, except
hotel statistics) Quarter ended Year-to-date ended June 15, June
16, June 15, June 16, 2007 2006 2007 2006 Number of hotels 94 94 94
94 Number of rooms 47,801 47,801 47,801 47,801 Percent change in
Comparable Hotel RevPAR 5.5% 5.8% Operating profit margin under
GAAP (b) 20.4% 19.2% 17.2% 16.8% Comparable hotel adjusted
operating profit margin (c) 30.4% 29.9% 28.5% 28.1% Food and
beverage profit margin under GAAP (d) 30.8% 29.6% 29.0% 28.2%
Comparable food and beverage profit margin (e) 31.5% 30.4% 29.6%
28.6% Comparable hotel sales Room $642 $608 $1,149 $1,086 Food and
beverage (g) 333 322 602 581 Other 69 65 125 117 Comparable hotel
sales (f) 1,044 995 1,876 1,784 Comparable hotel expenses Room 145
138 266 255 Food and beverage (i) 228 224 424 415 Other 39 38 70 68
Management fees, ground rent and other costs 315 297 581 544
Comparable hotel expenses (h) 727 697 1,341 1,282 Comparable hotel
adjusted operating profit 317 298 535 502 Non-comparable hotel
results, net (j) 101 54 154 68 Office buildings and select service
properties, net (k) (1) - (1) (1) Depreciation and amortization
(119) (104) (235) (191) Corporate and other expenses (14) (21) (35)
(41) Operating profit $284 $227 $418 $337 (a) See the notes to the
financial information for discussion of non-GAAP measures,
reporting periods and comparable hotel results. (b) Operating
profit margin under GAAP is calculated as the operating profit
divided by the total revenues per the consolidated statements of
operations. (c) Comparable hotel adjusted operating profit margin
is calculated as comparable hotel adjusted operating profit divided
by the comparable hotel sales per the table above. (d) Food and
beverage profit margin under GAAP is calculated as the food and
beverage profit of $132 million and $109 million for the quarters
ended June 15, 2007 and June 16, 2006, respectively, and $218
million and $177 million for the year-to-date periods ended June
15, 2007 and June 16, 2006, respectively, divided by the total food
and beverage revenues per the consolidated statements of
operations. (e) Comparable food and beverage adjusted profit margin
is calculated as the comparable food and beverage adjusted profit
of $105 million and $98 million for the quarters ended June 15,
2007 and June 16, 2006, respectively, and $178 million and $166
million for the year-to-date periods ended June 15, 2007 and June
16, 2006, respectively, divided by the comparable food and beverage
sales per the table above. (f) The reconciliation of total revenues
per the consolidated statements of operations to the comparable
hotel sales is as follows: Quarter ended Year-to-date ended June
15, June 16, June 15, June 16, 2007 2006 2007 2006 Revenues per the
consolidated statements of operations $1,391 $1,181 $2,428 $2,006
Non-comparable hotel sales (343) (182) (556) (219) Hotel sales for
the property for which we record rental income, net 14 14 27 26
Rental income for office buildings and select service hotels (18)
(18) (37) (36) Adjustment for hotel sales for comparable hotels to
reflect Marriott's fiscal year for Marriott-managed hotels - - 14 7
Comparable hotel sales $1,044 $995 $1,876 $1,784 (g) The
reconciliation of total food and beverage sales per the
consolidated statements of operations to the comparable food and
beverage sales is as follows: Quarter ended Year-to-date ended June
15, June 16, June 15, June 16, 2007 2006 2007 2006 Food and
beverage sales per the consolidated statements of operations $429
$368 $752 $627 Non-comparable food and beverage sales (103) (53)
(170) (63) Food and beverage sales for the property for which we
record rental income 7 7 16 15 Adjustment for food and beverage
sales for comparable hotels to reflect Marriott's fiscal year for
Marriott-managed hotels - - 4 2 Comparable food and beverage sales
$333 $322 $602 $581 (h) The reconciliation of operating costs per
the consolidated statements of operations to the comparable hotel
expenses is as follows: Quarter ended Year-to-date ended June 15,
June 16, June 15, June 16, 2007 2006 2007 2006 Operating costs and
expenses per the consolidated statements of operations $1,107 $954
$2,010 $1,669 Non-comparable hotel expenses (241) (128) (400) (152)
Hotel expenses for the property for which we record rental income
13 14 29 29 Rent expense for office buildings and select service
hotels (19) (18) (38) (37) Adjustment for hotel expenses for
comparable hotels to reflect Marriott's fiscal year for
Marriott-managed hotels - - 10 5 Depreciation and amortization
(119) (104) (235) (191) Corporate and other expenses (14) (21) (35)
(41) Comparable hotel expenses $727 $697 $1,341 $1,282 (i) The
reconciliation of total food and beverage expenses per the
consolidated statements of operations to the comparable food and
beverage expenses is as follows: Quarter ended Year-to-date ended
June 15, June 16, June 15, June 16, 2007 2006 2007 2006 Food and
beverage expenses per the consolidated statements of operations
$297 $259 $534 $450 Non-comparable food and beverage expense (73)
(39) (122) (45) Food and beverage expenses for the property for
which we record rental income 4 4 9 8 Adjustment for food and
beverage expenses for comparable hotels to reflect Marriott's
fiscal year for Marriott-managed hotels - - 3 2 Comparable food and
beverage expenses $228 $224 $424 $415 (j) Non-comparable hotel
results, net, includes the following items: (i) the results of
operations of our non-comparable hotels whose operations are
included in our consolidated statement of operations as continuing
operations and (ii) the difference between the number of days of
operations reflected in the comparable hotel results and the number
of days of operations reflected in the consolidated statements of
operations. (k) Represents rental income less rental expense for
select service properties and office buildings. HOST HOTELS &
RESORTS, INC. Other Financial and Operating Data (unaudited, in
millions, except per share amounts) June 15, December 31, 2007 2006
Equity Common shares outstanding 522.2 521.1 Common shares and
minority held common OP Units outstanding 540.7 539.9 Preferred OP
Units outstanding .02 .02 Class E Preferred shares outstanding 4.0
4.0 Security pricing (per share price) Common (a) $23.92 $24.55
Class E Preferred (a) $26.88 $26.59 3 1/4% Exchangeable Senior
Debentures (b) $1,472.50 $1,473.30 2 5/8% Exchangeable Senior
Debentures (b)(c) $935.38 $- Dividends declared per share for
calendar year Common (d) $.40 $.76 Class E Preferred (d) $1.11
$2.22 Class C Preferred (e) $- $.86 Debt Series K senior notes,
with a rate of 7 1/8% due November 2013 $725 $725 Series M senior
notes, with a rate of 7% due August 2012 347 347 Series O senior
notes, with a rate of 6 3/8% due March 2015 650 650 Series Q senior
notes, with a rate of 6 3/4% due June 2016 800 800 Series S senior
notes, with a rate of 6 7/8% due November 2014 497 496 $500 million
Exchangeable Senior Debentures, with a rate of 3 1/4% due April
2024 495 495 $600 million Exchangeable Senior Debentures, with a
rate of 2 5/8% due April 2027 (c) 591 - Senior notes, with an
average interest rate of 10.0% and 9.7% at June 15, 2007 and
December 31, 2006, respectively, maturing through May 2012 7 13
Total senior notes 4,112 3,526 Mortgage debt (non-recourse) secured
by $2.4 billion of real estate assets, with an average interest
rate of 6.8% and 7.5% at June 15, 2007 and December 31, 2006,
respectively, maturing through December 2023 1,617 2,014 Credit
facility (f) - 250 Other 88 88 Total debt $5,817 $5,878 Percentage
of fixed rate debt 100% 94% Weighted average interest rate 6.1%
6.8% Weighted average debt maturity 6.3 years 5.9 years Quarter
ended Year-to-date ended June 15, June 16, June 15, June 16, 2007
2006 2007 2006 Hotel Operating Statistics for All Full Service
Properties (g) Average daily rate $199.50 $186.66 $194.93 $183.49
Average occupancy 76.4% 76.3% 73.5% 73.8% RevPAR $152.49 $142.51
$143.33 $135.42 (a) Share prices are the closing price as reported
by the New York Stock Exchange. (b) Market price as quoted by
Bloomberg L.P. Amount reflects the price of a single $1,000
debenture, which is exchangeable for common stock upon the
occurrence of certain events. (c) The debentures are exchangeable,
upon the occurrence of certain events, into cash up to the
principal amount of the debentures exchanged and either cash and/or
shares, at the Company's option, with respect to additional
proceeds due to holders of the debentures, if any. (d) On June 15,
2007, the Company declared a second quarter common dividend of $.20
per share and a second quarter preferred dividend of $.5546875 per
share for its Class E cumulative redeemable preferred stock. (e) On
May 19, 2006, the Company redeemed, at par, all of the shares of
its 10% Class C cumulative redeemable preferred stock for
approximately $151 million, including accrued dividends. (f)
Currently, the Company has $600 million of available capacity under
its credit facility. (g) The operating statistics reflect all
consolidated properties as of June 15, 2007 and June 16, 2006,
respectively, including the results of operations for seven
properties sold as of June 15, 2007 and seven properties sold in
2006 prior to their disposition. HOST HOTELS & RESORTS, INC.
Reconciliation of Net Income Available to Common Stockholders to
Funds From Operations per Common Share (unaudited, in millions,
except per share amounts) Quarter ended Quarter ended June 15, 2007
June 16, 2006 Per Per Share Share Income Shares Amount Income
Shares Amount Net income available to common stockholders $147
522.1 $.28 $320 492.8 $.65 Adjustments: (Gains)/losses on
dispositions, net of taxes 2 - - (232) - (.47) Amortization of
deferred gains and other property transactions, net of taxes (1) -
- (1) - - Depreciation and amortization 117 - .23 106 - .21
Partnership adjustments 6 - .01 14 - .03 FFO of minority partners
of Host LP (a) (9) - (.02) (8) - (.02) Adjustments for dilutive
securities: Assuming distribution of common shares granted under
the comprehensive stock plan less shares assumed purchased at
average market price - .7 - - 2.0 - Assuming conversion of 2004
Exchangeable Senior Debentures 4 29.0 (.02) 4 28.1 (.01) FFO per
diluted share (b)(c) $266 551.8 $.48 $203 522.9 $.39 Year-to-date
ended Year-to-date ended June 15, 2007 June 16, 2006 Per Per Share
Share Income Shares Amount Income Shares Amount Net income
available to common stockholders $332 521.8 $.64 $486 435.7 $1.12
Adjustments: Gains on dispositions, net of taxes (139) - (.27)
(385) - (.89) Amortization of deferred gains and other property
transactions, net of taxes (2) - - (2) - - Depreciation and
amortization 234 - .45 195 - .44 Partnership adjustments 13 - .02
22 - .06 FFO of minority partners of Host LP (a) (15) - (.03) (13)
- (.03) Adjustments for dilutive securities: Assuming distribution
of common shares granted under the comprehensive stock plan less
shares assumed purchased at average market price - .8 - - 2.0 (.01)
Assuming conversion of 2004 Exchangeable Senior Debentures 9 29.0
(.03) 9 28.1 (.02) Assuming conversion of Convertible Subordinated
Debentures - - - 2 4.1 - FFO per diluted share (b)(c) $432 551.6
$.78 $314 469.9 $.67 (a) Represents FFO attributable to the
minority interests in Host LP. (b) FFO per diluted share in
accordance with NAREIT is adjusted for the effects of dilutive
securities. Dilutive securities may include shares granted under
comprehensive stock plans, preferred OP Units held by minority
partners, exchangeable debt securities and other minority interests
that have the option to convert their limited partnership interest
to common OP Units. No effect is shown for securities if they are
anti-dilutive. (c) FFO per diluted share was significantly affected
by certain transactions. For further detail see "Schedule of
Significant Transactions Affecting Earnings per Diluted Share and
Funds From Operations per Diluted Share." HOST HOTELS &
RESORTS, INC. Schedule of Significant Transactions Affecting
Earnings per Share and Funds From Operations per Diluted Share
(unaudited, in millions, except per share amounts) Quarter ended
Quarter ended June 15, 2007 June 16, 2006 Net Income Net Income
(Loss) FFO (Loss) FFO Non-recurring Starwood acquisition costs (a)
$- $- $(13) $(13) Senior notes redemptions and debt prepayments (b)
(46) (46) (4) (4) Preferred stock redemptions (c) - - (8) (8)
Gain/(loss) on hotel dispositions, net of taxes (2) - 232 -
Assuming conversion of minority OP Units issuable - (1) - (1)
Minority interest income (expense) (d) 2 2 (8) 1 Total (e) $(46)
$(45) $199 $(25) Diluted shares 553.0 553.0 525.4 525.4 Per diluted
share $(.08) $(.08) $.38 $(.04) Year-to-date ended Year-to-date
ended June 15, 2007 June 16, 2006 Net Income Net Income (Loss) FFO
(Loss) FFO Non-recurring Starwood acquisition costs (a) $- $- $(13)
$(13) Senior notes redemptions and debt prepayments (b) (46) (46)
(4) (4) Preferred stock redemptions (c) - - (8) (8) Gain on hotel
dispositions, net of taxes 139 - 385 - Minority interest income
(expense) (d) (3) 2 (15) 1 Total (e) $90 $(44) $345 $(24) Diluted
shares 552.8 551.6 440.2 469.9 Per diluted share $.16 $(.08) $.78
$(.05) (a) Represents non-recurring costs incurred in conjunction
with the acquisition of the Starwood portfolio that are required to
be expensed under GAAP, including start-up costs, bridge loan fees
and expenses and the Company's portion of a foreign currency hedge
loss incurred by the European joint venture as the venture hedged a
portion of its initial investment for the acquisition of six
European hotels. (b) Represents call premiums and the acceleration
of original issue discounts and deferred financing costs, as well
as incremental interest during the call or prepayment notice
period, included in interest expense in the consolidated statements
of operations. We recognized these costs in conjunction with the
prepayment or refinancing of senior notes and mortgages during
certain periods presented. (c) Represents the original issuance
costs of $6 million and the incremental dividends of $2 million
during the redemption notice period associated with the redemption
of the Class C preferred stock in 2006. (d) Represents the portion
of the significant transactions attributable to minority partners
in Host LP. (e) Net income of Host LP was also affected by the
transactions discussed above, with the exception of the minority
interest income (expense) item discussed in footnote (d).
Accordingly, the total adjustments on the net income of Host LP
were approximately $(48) million and $207 million for the second
quarter of 2007 and 2006, respectively, and approximately $93
million and $360 million for year-to-date 2007 and 2006,
respectively. HOST HOTELS & RESORTS, L.P. Consolidated
Statements of Operations (a) (unaudited, in millions, except per
unit amounts) Quarter ended Year-to-date ended June 15, June 16,
June 15, June 16, 2007 2006 2007 2006 Revenues Rooms $846 $714
$1,460 $1,201 Food and beverage 429 368 752 627 Other 91 73 160 123
Total hotel sales 1,366 1,155 2,372 1,951 Rental income 25 26 56 55
Total revenues 1,391 1,181 2,428 2,006 Expenses Rooms 194 164 346
282 Food and beverage 297 259 534 450 Hotel departmental expenses
316 267 567 467 Management fees 72 56 117 90 Other property-level
expenses 95 83 176 148 Depreciation and amortization 119 104 235
191 Corporate and other expenses 14 21 35 41 Total operating costs
and expenses 1,107 954 2,010 1,669 Operating profit 284 227 418 337
Interest income 12 9 18 14 Interest expense (136) (107) (230) (198)
Net gains on property transactions 1 1 2 2 Minority interest
expense - (3) (4) (7) Equity in earnings (losses) of affiliates 3
(6) 5 (5) Income before income taxes 164 121 209 143 Provision for
income taxes (11) (17) (6) (18) Income from continuing operations
153 104 203 125 Income from discontinued operations (b) 1 239 145
399 Net income 154 343 348 524 Less: Distributions on preferred
units (c) (2) (4) (4) (10) Issuance costs of redeemed preferred
units - (6) - (6) Net income available to common unitholders $152
$333 $344 $508 Basic earnings per common unit: Continuing
operations $.28 $.18 $.37 $.24 Discontinued operations - .47 .27
.88 Basic earnings per common unit $.28 $.65 $.64 $1.12 Diluted
earnings per common unit: Continuing operations $.27 $.18 $.36 $.24
Discontinued operations - .44 .26 .87 Diluted earnings per common
unit $.27 $.62 $.62 $1.11 (a) Our 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. When distinguishing between Host and Host LP, the primary
difference is the partnership interests in Host LP held by outside
partners, which is reflected as minority interest in our
consolidated balance sheets and minority interest expense in our
consolidated statements of operations. The consolidated statements
of operations should be read in conjunction with the consolidated
financial statements and notes thereto included in our most recent
Annual Report on Form 10- K. (b) Reflects the results of operations
(including $3 million of business interruption insurance proceeds)
and gain (loss) on sale, net of the related income tax, for seven
properties sold in 2007 and seven properties sold in 2006. (c)
Represents the original issuance cost associated with the
redemption of the class C preferred units in 2006. HOST HOTELS
& RESORTS L.P. Reconciliation of Net Income to EBITDA and
Adjusted EBITDA (unaudited, in millions) Quarter ended Year-to-date
ended June 15, June 16, June 15, June 16, 2007 2006 2007 2006 Net
income $154 $343 $348 $524 Interest expense 136 107 230 198
Depreciation and amortization 119 104 235 191 Income taxes 11 17 6
18 Discontinued operations (a) - 5 2 7 EBITDA 420 576 821 938
(Gains)/losses on dispositions 2 (234) (139) (387) Amortization of
deferred gains (1) (1) (2) (2) Consolidated partnership
adjustments: Minority interest expense - 3 4 7 Distributions to
minority partners (5) (4) (5) (4) Equity investment adjustments:
Equity in earnings of affiliates (3) 6 (5) 5 Distributions received
from equity investments 1 1 3 2 Adjusted EBITDA of Host LP $414
$347 $677 $559 (a) Reflects the interest expense, depreciation and
amortization and income taxes included in discontinued operations.
HOST HOTELS & RESORTS, INC. Reconciliation of Net Income
Available to Common Stockholders to Funds From Operations per
Diluted Share for Third Quarter 2007 Forecasts (a) (unaudited, in
millions, except per share amounts) Low-end of Range Third Quarter
2007 Forecast Per Share Income Shares Amount Forecast net income
available to common stockholders $63 522.4 $.12 Adjustments:
Depreciation and amortization 118 - .22 Gain on dispositions, net
of taxes (6) - (.01) Partnership adjustments 4 - .01 FFO of
minority partners of Host LP (b) (6) - (.01) Adjustment for
dilutive securities: Assuming distribution of common shares granted
under the comprehensive stock plan less shares assumed purchased at
average market price - 1.0 - Assuming conversion of 3.25%
Exchangeable Senior Debentures 4 29.5 (.01) FFO per diluted share
$177 552.9 $.32 High-end of Range Third Quarter 2007 Forecast Per
Share Income Shares Amount Forecast net income available to common
stockholders $68 522.4 $.13 Adjustments: Depreciation and
amortization 118 - .22 Gain on dispositions, net of taxes (6) -
(.01) Partnership adjustments 4 - .01 FFO of minority partners of
Host LP (b) (6) - (.01) Adjustment for dilutive securities:
Assuming distribution of common shares granted under the
comprehensive stock plan less shares assumed purchased at average
market price - 1.0 - Assuming conversion of 3.25% Exchangeable
Senior Debentures 4 29.5 (.01) FFO per diluted share $182 552.9
$.33 HOST HOTELS & RESORTS, INC. Reconciliation of Net Income
Available to Common Stockholders to Funds From Operations per
Diluted Share for Full Year 2007 Forecasts (a) (unaudited, in
millions, except per share amounts) Low-end of Range Full Year 2007
Forecast Per Share Income Shares Amount Forecast net income
available to common stockholders $593 522.2 $1.14 Adjustments:
Depreciation and amortization 530 - 1.01 Gain on dispositions, net
of taxes (147) - (.28) Partnership adjustments 25 - .05 FFO of
minority partners of Host LP (b) (34) - (.07) Adjustment for
dilutive securities: Assuming distribution of common shares granted
under the comprehensive stock plan less shares assumed purchased at
average market price - 1.0 - Assuming conversion of 3.25%
Exchangeable Senior Debentures 19 29.5 (.07) FFO per diluted share
$986 552.7 $1.78 High-end of Range Full Year 2007 Forecast Per
Share Income Shares Amount Forecast net income available to common
stockholders $625 522.2 $1.20 Adjustments: Depreciation and
amortization 530 - 1.01 Gain on dispositions, net of taxes (147) -
(.28) Partnership adjustments 26 - .05 FFO of minority partners of
Host LP (b) (35) - (.07) Adjustment for dilutive securities:
Assuming distribution of common shares granted under the
comprehensive stock plan less shares assumed purchased at average
market price - 1.0 - Assuming conversion of 3.25% Exchangeable
Senior Debentures 19 29.5 (.07) FFO per diluted share $1,018 552.7
$1.84 (a) The third quarter and full year 2007 forecasts were based
on the following assumptions: -- Comparable hotel plus the Starwood
Portfolio RevPAR will increase 5.5% and 6.5% for the third quarter
and 6.5% and 7.5% for the full year for the low and high ends of
the forecasted range, respectively. -- Comparable hotel RevPAR will
increase 6% and 7% for the full year for the low and high ends of
the forecasted range, respectively. -- Comparable hotel adjusted
operating profit margins will increase 75 basis points and 100
basis points for the full year for the low and high ends of the
forecasted range, respectively. -- We expect to have incremental
hotel dispositions of approximately $300 million beyond the $330
million of hotels sold during the first quarter of 2007. -- We
expect to spend approximately $650 million on capital expenditures
in 2007, including approximately $315 million for maintenance
capital expenditures. The remainder of the expenditures will be for
return on investment/repositioning projects. -- Approximately $1.0
billion of debt has been refinanced or repaid. Charges, net of the
minority interest benefit, totaling approximately $45 million ($.08
of FFO per diluted share) related to costs associated with the debt
repayments have been incurred during the year. No further
prepayment costs related to debt refinancings or repayments are
expected for the remainder of 2007. -- Fully diluted weighted
average shares for FFO per diluted share will be 552.9 million for
the third quarter and 552.7 million for the full year and for
earnings per diluted share will be 523.4 million for the third
quarter and 552.7 million for the full year. The amounts shown in
these forecasts are based on these and other assumptions, as well
as management's estimate of operations for 2007. These forecasts
are forward-looking and are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause actual transactions, 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 be materially different. Risks that may affect these
assumptions and forecasts include the following: -- the level of
RevPAR and margin growth may change significantly; -- 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 (losses)
on dispositions; -- the amount and timing of debt prepayments is an
estimate that can substantially affect the level of interest
expense and net income; -- the level of capital expenditures may
change significantly, which will directly affect the level of
depreciation expense and net income; and -- other risks and
uncertainties associated with our business described herein and in
the Company's filings with the SEC. (b) Represents FFO attributable
to the minority interests in Host LP. HOST HOTELS & RESORTS,
INC. Schedule of Comparable Hotel Adjusted Operating Profit Margin
for Full Year 2007 Forecasts (a) (unaudited, in millions, except
hotel statistics) Full Year 2007 Forecast Low-end High-end of range
of range Operating profit margin under GAAP (b) 16.2% 16.6%
Comparable hotel adjusted operating profit margin (c) 27.65% 27.90%
Comparable hotel sales Room $2,528 $2,551 Other 1,544 1,558
Comparable hotel sales (d) 4,072 4,109 Comparable hotel expenses
Rooms and other departmental costs 1,656 1,667 Management fees,
ground rent and other costs 1,290 1,296 Comparable hotel expenses
(e) 2,946 2,963 Comparable hotel adjusted operating profit 1,126
1,146 Non-comparable hotel results, net 351 361 Office buildings
and select service properties, net 9 9 Depreciation and
amortization (530) (530) Corporate and other expenses (80) (80)
Operating profit $876 $906 (a) Forecasted comparable hotel results
include assumptions on the number of hotels that will be included
in our comparable hotel set in 2007. We have assumed that 94 hotels
will be classified as comparable as of December 31, 2007. No
assurances can be made as to the hotels that will be in the
comparable hotel set for 2007. Also, see the notes following the
table reconciling net income available to common shareholders to
Funds From Operations per Diluted Share for assumptions relating to
the full year 2007 forecasts. (b) Operating profit margin under
GAAP is calculated as the operating profit divided by the forecast
total revenues per the consolidated statements of operations. See
(d) below for forecasted revenues. (c) Comparable hotel adjusted
operating profit margin is calculated as the comparable hotel
adjusted operating profit divided by the comparable hotel sales per
the table above. We forecasted an increase in margins of 75 basis
points to 100 basis points over the comparable adjusted operating
profit margin of 26.9%. (d) The reconciliation of forecast total
revenues to the forecast comparable hotel sales is as follows (in
millions): Full Year 2007 Low-end High-end of range of range
Revenues $5,416 $5,466 Non-comparable hotel sales (1,303) (1,316)
Hotel sales for the property for which we record rental income, net
53 53 Rental income for office buildings and select service hotels
(94) (94) Comparable hotel sales $4,072 $4,109 (e) The
reconciliation of forecast operating costs and expenses to the
comparable hotel expenses is as follows (in millions): Full Year
2007 Low-end High-end of range of range Operating costs and
expenses $4,540 $4,560 Non-comparable hotel expenses (952) (955)
Hotel expenses for the property for which we record rental income
53 53 Rent expense for office buildings and select service hotels
(85) (85) Depreciation and amortization (530) (530) Corporate and
other expenses (80) (80) Comparable hotel expenses $2,946 $2,963
HOST HOTELS & RESORTS, L.P. Reconciliation of Net Income to
EBITDA and Adjusted EBITDA for Full Year 2007 Forecasts (a)
(unaudited, in millions) Full Year 2007 Low-end High-end of range
of range Net income $624 $656 Interest expense 429 429 Depreciation
and amortization 530 530 Income taxes 17 15 EBITDA 1,600 1,630
Gains on dispositions (147) (147) Consolidated partnership
adjustments: Minority interest expense 6 6 Distributions to
minority partners (8) (8) Equity investment adjustments: Equity in
earnings of affiliates (11) (11) Distributions received from equity
investments 10 10 Adjusted EBITDA of Host LP $1,450 $1,480 (a) The
amounts shown in these reconciliations are based on management's
estimate of operations for 2007. These tables are forward-looking
and as such contain assumptions by management based on known and
unknown risks, uncertainties and other factors which may cause the
actual transactions, results, performance, or achievements to be
materially different from any future transactions, results,
performance or achievements expressed or implied by this table.
General economic condition, competition and governmental actions
will affect future transactions, results performance and
achievements. Although we believe the expectations in this
reconciliation are based upon reasonable assumptions, we can give
no assurance that the expectations will be attained or that any
deviations will not be material. For purposes of the full year
forecasts, we have utilized the same, previously detailed
assumptions as those utilized for the full year forecasts for Host
Hotels & Resorts, Inc.
http://www.newscom.com/cgi-bin/prnh/20060417/HOSTLOGO
http://photoarchive.ap.org/ DATASOURCE: Host Hotels & Resorts,
Inc. CONTACT: Kevin J. Jacobs, Vice President Corporate Finance,
+1-240-744-5212, or Gregory J. Larson, Treasurer, Senior Vice
President Investor Relations, +1-240-744-5120, both of Host Hotels
& Resorts, Inc. Web site: http://www.hosthotels.com/
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