Host Hotels & Resorts, Inc. (NYSE:HST) (“Host Hotels” or
the “Company”), the nation’s largest lodging real estate investment
trust (“REIT”), today announced results for the fourth quarter and
the year.
James F. Risoleo, President and Chief Executive
Officer, said, “The fourth quarter and full year exceeded our
expectations in both the top and bottom line. We continue to drive
margin improvement through better productivity, which is a
testament to our talented associates. On the transaction front, we
made great progress on advancing our strategic initiatives,
including the sale of the Key Bridge Marriott, putting the W New
York under contract and placing three irreplaceable Hyatt assets
under contract for acquisition.”
Said Mr. Risoleo, “Andaz Maui, Grand Hyatt San
Francisco, and Hyatt Regency Coconut Point are exactly the type of
iconic real-estate we target and are located in what we believe are
some of the best near-term growth markets in the U.S. As the owner
of 10 Hyatt properties, we truly value our unique relationship and
look forward to growing that relationship in the future. Given our
recent and announced sales and our existing cash balance, this
purchase is an accretive use of capital that we believe will
benefit stockholders in the long-term. Further, by
opportunistically monetizing a great piece of real estate in
Washington D.C. and reducing our exposure in New York, we are
putting into action key pillars of our revised strategy that we
believe will create additional value for stockholders over
time.”
|
OPERATING RESULTS |
(unaudited, in millions, except per share and hotel
statistics) |
|
|
Quarter endedDecember 31, |
|
Percent |
|
Year endedDecember 31, |
|
Percent |
|
|
2017 |
|
|
|
2016 |
|
Change |
|
|
2017 |
|
|
|
2016 |
|
Change |
Total revenues |
$1,344 |
|
|
$1,337 |
|
0.5% |
|
|
$5,387 |
|
|
$5,430 |
|
(0.8) |
% |
Comparable hotel
revenues (1) |
|
1,219 |
|
|
|
1,192 |
|
2.3% |
|
|
|
4,840 |
|
|
|
4,808 |
|
0.7 |
% |
Net income |
|
93 |
|
|
|
128 |
|
(27.3)% |
|
|
|
571 |
|
|
|
771 |
|
(25.9) |
% |
EBITDAre (1)(2) |
|
375 |
|
|
|
351 |
|
6.8% |
|
|
|
1,510 |
|
|
|
1,483 |
|
1.8 |
% |
Adjusted EBITDAre
(1)(2) |
|
375 |
|
|
|
351 |
|
6.8% |
|
|
|
1,510 |
|
|
|
1,482 |
|
1.9 |
% |
Change in comparable
hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
Domestic
properties |
|
2.1% |
|
|
|
|
|
|
|
1.7% |
|
|
|
|
|
International properties - Constant US$ |
|
7.3% |
|
|
|
|
|
|
|
(12.2)% |
|
|
|
|
|
Total -
Constant US$ |
|
2.2% |
|
|
|
|
|
|
|
1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$0.12 |
|
|
$0.17 |
|
(29.4)% |
|
|
$0.76 |
|
|
$1.02 |
|
(25.5) |
% |
NAREIT FFO per diluted
share (1) |
|
0.41 |
|
|
|
0.41 |
|
— |
|
|
|
1.68 |
|
|
|
1.69 |
|
(0.6) |
% |
Adjusted FFO per
diluted share (1) |
|
0.42 |
|
|
|
0.41 |
|
2.4% |
|
|
|
1.69 |
|
|
|
1.69 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
___________________________
(1) NAREIT Funds From
Operations (“FFO”) per diluted share, Adjusted FFO per diluted
share, EBITDAre, Adjusted EBITDAre and comparable hotel results are
non-GAAP (U.S. generally accepted accounting principles) financial
measures within the meaning of the rules of the Securities and
Exchange Commission (“SEC”). See the Notes to Financial Information
on why the Company believes these supplemental measures are useful,
reconciliations to the most directly comparable GAAP measure, and
the limitations on the use of these supplemental measures.
(2) Effective December 31, 2017, the Company
presents EBITDAre, reported in accordance with NAREIT guidelines,
and Adjusted EBITDAre as supplemental measures of performance.
Prior year results have been restated to conform with the current
year presentation. Under the new presentation, all of the EBITDA of
consolidated partnerships is included, including the
non-controlling partner’s share, which has increased the previously
reported 2016 Adjusted EBITDA by $3 million for the quarter and $11
million for the full year. See the Notes to Financial Information
for more information on this change.
Additional detail on the Company’s results,
including operating metrics for the top 40 hotels by RevPAR and
data for 22 domestic markets, is available in the Year End 2017
Supplemental Financial Information available on the Company’s
website at www.hosthotels.com.
KEY HIGHLIGHTS
The Company has executed on the following
strategic activities to enhance its portfolio and drive value:
- The Company has placed the 301-room Andaz Maui, 668-room Grand
Hyatt San Francisco, and 454-room Hyatt Regency Coconut Point under
contract for $1 billion with a $25 million deposit at-risk. These
assets are fee-simple and located in what the Company believes are
some of the top growth markets in the U.S., including Maui and San
Francisco, which are benefitting from strong lodging demand and
limited supply growth. The hotels will continue to be managed by
Hyatt pursuant to long-term management agreements, and this
transaction is expected to improve the already strong relationship
between Hyatt and the Company. The properties have recently
received significant capital investments and are expected to
require relatively minimal near-term capital expenditures from the
Company. Combined 2018 forecast pro-forma operations result in
RevPAR of nearly $290, with the Andaz Maui ranking in the top three
of the Company’s portfolio from a RevPAR perspective, pro-forma.
Based on pro-forma 2018 forecast, the purchase price results in a
combined forward EBITDA multiple of 17x and a cap rate of 5%. These
assets are located in markets with outsized RevPAR growth that the
Company anticipates will outpace the country and its current
portfolio. In addition, each asset has a unique story, having
undergone significant renovations, and has not yet reached what the
Company believes to be stabilized levels. The transaction is
anticipated to close by the end of the first quarter, subject to
limited closing conditions, and will be funded through a
combination of cash and drawing on the revolver portion of the
Company’s credit facility.
- Subsequent to year end, on January 9, the Company completed the
sale of the Key Bridge Marriott for $190 million.
Additionally, the Company is under contract to sell the W New York
for $190 million. The buyer has a $13 million deposit at risk
and the sale is expected to close in the second quarter 2018,
subject to customary closing conditions.
OPERATING PERFORMANCE
GAAP Metrics
- Total revenues increased 0.5% for the quarter and declined 0.8%
for the full year. The full year was affected by lost revenues from
the sale of 14 hotels in 2016 and 2017 in addition to the
continuing effect of Hurricanes Irma and Harvey.
- GAAP operating profit margin declined 120 basis points for the
quarter, primarily reflecting the increase in depreciation expense,
and declined 10 basis points for the full year.
- Net income decreased $35 million to $93 million for
the fourth quarter as an improvement in operations was offset
primarily by impairment expense of $43 million on the W New York
and an increase in income tax expense. For the full year, net
income decreased $200 million to $571 million, primarily
due to a decrease in gain on sale of assets, net of tax.
- Diluted earnings per share decreased 29.4% for the quarter and
25.5% for the full year as a result of the above changes to net
income.
Other Metrics
- Comparable RevPAR on a constant dollar basis increased 2.2% for
the quarter, due to a 0.3% increase in average room rate and a 140
basis point increase in occupancy to 76.6%. For the full year,
comparable RevPAR on a constant dollar basis improved 1.3%, driven
by a 0.5% increase in average room rate and a 60 basis point
increase in occupancy. Comparable hotel revenues increased 2.3% for
the fourth quarter and 0.7% for the full year.
- Comparable hotel EBITDA increased $8 million, or 2.7%, for
the quarter and $14 million, or 1.0%, for the full year.
- For both the quarter and full year, comparable hotel EBITDA
margin improved 10 basis points. The increase reflects the
improvement in room rate and the improvement in food and beverage
margins for the full year.
- Adjusted EBITDAre increased $24 million, or 6.8%, for the
quarter, benefiting from the receipt of business interruption
insurance proceeds and the sale of a parcel of land in Chicago. For
the full year, Adjusted EBITDAre increased $28 million, or
1.9%.
- Adjusted FFO per diluted share increased 2.4% for the quarter
and was unchanged for the full year.
CAPITAL ALLOCATION
During 2017, the Company spent approximately
$277 million on capital expenditures, of which $72 million was
return on investment (“ROI”) capital expenditures and
$205 million was on renewal and replacement projects. The
overall spend for 2017 was approximately $100 million less than the
third quarter forecast as a result of approximately $50 million
moving from late 2017 into early 2018. Additionally, $30 million of
the variance was related to hurricane restoration work not yet
funded. Finally, the remaining $20 million was due to project
savings during the quarter.
For 2018, the Company expects capital
expenditures of $475 million to $550 million, closer to its
historical average spend. This total spend consists of
$185 million to $220 million in ROI projects and
$290 million to $330 million in renewal and replacement
projects.
Of the $185 million to $220 million of
ROI project spend, $114 million is related to transformative
repositioning, which is primarily occurring at the San Francisco
Marriott Marquis. As a result, this hotel has been placed in the
Company’s non-comparable hotel pool, effective January 1, 2018. It
should be noted that the Company’s 2018 guidance reflects the
expected disruption occurring as a result of these expenditure
projects.
DIVIDENDS AND RETURN OF
CAPITAL
The Company paid a quarterly cash dividend of
$0.25 per share on its common stock on January 16, 2018 to
stockholders of record as of December 29, 2017, which included a
$0.05 special dividend. On February 21, 2018, the Board of
Directors authorized a regular quarterly cash dividend of $0.20 per
share on its common stock. The dividend will be paid on April 16,
2018 to stockholders of record on March 29, 2018. All future
dividends, including any special dividends, are subject to approval
by the Company’s Board of Directors. The Company did not repurchase
any shares in 2017 and has $500 million of capacity available
under its current repurchase program.
BALANCE SHEET
“With no debt maturities until 2020, we have
ample flexibility to continue to create value in our portfolio. Our
investment grade balance sheet is poised to enhance stockholder
returns via multiple levers, including buying irreplaceable assets,
investing in our portfolio, buying back stock or returning capital
through dividends,” said Michael D. Bluhm, Executive Vice President
and Chief Financial Officer.
At December 31, 2017, the Company had
approximately $913 million of unrestricted cash and $822
million of available capacity remaining under the revolver portion
of its credit facility. Total debt as of December 31, 2017,
was $4.0 billion, with an average maturity of 5.1 years and an
average interest rate of 4.0%.
2018 OUTLOOK
The Company anticipates that its 2018 operating
results as compared to the prior year will change in the following
range:
|
|
Full Year 2018 Guidance |
Total comparable hotel
RevPAR - Constant US$ |
|
0.5%
to 2.5% |
Total revenues under
GAAP |
|
0.6% to 2.5% |
Operating profit margin
under GAAP |
|
(50
bps) to 50 bps |
Comparable hotel EBITDA
margins |
|
(60
bps) to 20 bps |
Based upon the above parameters, the Company
estimates its 2018 guidance as follows:
|
|
|
|
|
Full Year 2018 Guidance |
Net income (in
millions) |
|
|
|
|
$547
to $616 |
Adjusted EBITDAre (in
millions) |
|
|
|
|
$1,465
to $1,535 |
Earnings per diluted
share |
|
|
|
|
$.73
to $.82 |
NAREIT FFO per diluted
share |
|
|
|
|
$1.60
to $1.70 |
Adjusted FFO per
diluted share |
|
|
|
|
$1.60
to $1.70 |
See the 2018 Forecast Schedules and the Notes to
Financial Information for other assumptions used in the forecasts
and items that may affect forecast results.
ABOUT HOST HOTELS &
RESORTS
Host Hotels & Resorts, Inc. is an
S&P 500 and Fortune 500 company and is the largest lodging real
estate investment trust and one of the largest owners of luxury and
upper-upscale hotels. The Company currently owns 87 properties in
the United States and six properties internationally totaling
approximately 52,000 rooms. The Company also holds non-controlling
interests in seven domestic and 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®, Le Méridien®, The Luxury Collection®, Hyatt®,
Fairmont®, Hilton®, Swissôtel®, ibis® and Novotel®, as well as
independent brands in the operation of properties in over 50 major
markets. For additional information, please visit the Company’s
website at www.hosthotels.com. The term “Hyatt” is used in
this release for convenience to refer to Hyatt Hotels Corporation
and/or one or more of its affiliates.
Note: This press release contains
forward-looking statements within the meaning of federal securities
regulations. These forward-looking statements include forecast
results and are identified by their use of terms and phrases such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “should,” “plan,” “predict,” “project,” “will,”
“continue” and other similar terms and phrases, including
references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause the actual results to differ materially
from those anticipated at the time the forward-looking statements
are made. These risks include, but are not limited to: changes in
national and local economic and business conditions and other
factors such as natural disasters, pandemics and weather that will
affect occupancy rates at our hotels and the demand for hotel
products and services; the impact of geopolitical developments
outside the U.S. on lodging demand; volatility in global financial
and credit markets; operating risks associated with the hotel
business; risks and limitations in our operating flexibility
associated with the level of our indebtedness and our ability to
meet covenants in our debt agreements; risks associated with our
relationships with property managers and joint venture partners;
our ability to maintain our properties in a first-class manner,
including meeting capital expenditure requirements; the effects of
hotel renovations on our hotel occupancy and financial results; our
ability to compete effectively in areas such as access, location,
quality of accommodations and room rate structures; risks
associated with our ability to complete acquisitions and
dispositions and develop new properties and the risks that
acquisitions and new developments may not perform in accordance
with our expectations; our ability to continue to satisfy complex
rules in order for us to remain a REIT for federal income tax
purposes; risks associated with our ability to effectuate our
dividend policy, including factors such as operating results and
the economic outlook influencing our board’s decision whether to
pay further dividends at levels previously disclosed or to use
available cash to make special dividends; and other risks and
uncertainties associated with our business described in the
Company’s annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K filed with the SEC. Although
the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that the expectations will be attained or
that any deviation will not be material. All information in this
release is as of February 21, 2018, 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.A PDF accompanying this announcement is available
at: http://resource.globenewswire.com/Resource/Download/f89c755b-bb65-4580-9d08-ff8820753011
*** Tables to Follow ***
Host Hotels & Resorts, Inc., herein referred to as “we”
or “Host Inc.,” is a self-managed and self-administered real estate
investment trust that owns hotel properties. We conduct our
operations as an umbrella partnership REIT through an operating
partnership, Host Hotels & Resorts, L.P. (“Host LP”), of
which we are the sole general partner. When distinguishing between
Host Inc. and Host LP, the primary difference is approximately 1%
of the partnership interests in Host LP held by outside partners as
of December 31, 2017, which is non-controlling interests in Host LP
in our consolidated balance sheets and is included in net income
attributable to non-controlling interests in our consolidated
statements of operations. Readers are encouraged to find further
detail regarding our organizational structure in our annual report
on Form 10-K.
|
HOST HOTELS & RESORTS, INC. |
Condensed Consolidated Balance Sheets
(1) |
(in millions, except shares and per share amounts) |
|
|
|
|
|
|
|
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
Property and equipment,
net |
|
$ |
9,692 |
|
|
$ |
10,145 |
|
Assets held for
sale |
|
|
250 |
|
|
|
150 |
|
Due from managers |
|
|
79 |
|
|
|
55 |
|
Advances to and
investments in affiliates |
|
|
327 |
|
|
|
286 |
|
Furniture, fixtures and
equipment replacement fund |
|
|
195 |
|
|
|
173 |
|
Other |
|
|
236 |
|
|
|
225 |
|
Restricted cash |
|
|
1 |
|
|
|
2 |
|
Cash and cash
equivalents |
|
|
913 |
|
|
|
372 |
|
Total
assets |
|
$ |
11,693 |
|
|
$ |
11,408 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, NON-CONTROLLING INTERESTS AND
EQUITY |
|
Debt (2) |
|
|
|
|
|
|
|
|
Senior
notes |
|
$ |
2,778 |
|
|
$ |
2,380 |
|
Credit
facility, including the term loans of $996 million and $997
million, respectively |
|
|
1,170 |
|
|
|
1,206 |
|
Mortgage
debt and other |
|
|
6 |
|
|
|
63 |
|
Total
debt |
|
|
3,954 |
|
|
|
3,649 |
|
Accounts payable and
accrued expenses |
|
|
283 |
|
|
|
278 |
|
Other |
|
|
287 |
|
|
|
283 |
|
Total
liabilities |
|
|
4,524 |
|
|
|
4,210 |
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests - Host Hotels & Resorts, L.P |
|
|
167 |
|
|
|
165 |
|
|
|
|
|
|
|
|
|
|
Host Hotels &
Resorts, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common
stock, par value $.01, 1,050 million shares authorized, 739.1
million shares and 737.8 million shares issued and
outstanding, respectively |
|
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
|
8,097 |
|
|
|
8,077 |
|
Accumulated other comprehensive loss |
|
|
(60 |
) |
|
|
(83 |
) |
Deficit |
|
|
(1,071 |
) |
|
|
(1,007 |
) |
Total
equity of Host Hotels & Resorts, Inc. stockholders |
|
|
6,973 |
|
|
|
6,994 |
|
Non-controlling
interests—other consolidated partnerships |
|
|
29 |
|
|
|
39 |
|
Total
equity |
|
|
7,002 |
|
|
|
7,033 |
|
Total
liabilities, non-controlling interests and equity |
|
$ |
11,693 |
|
|
$ |
11,408 |
|
|
|
|
|
|
|
|
|
|
______________(1) Our condensed consolidated balance
sheet as of December 31, 2017 has been prepared without audit.
Certain information and footnote disclosures normally included in
financial statements presented in accordance with GAAP have been
omitted.(2) Please see our Year End 2017 Supplemental
Financial Information for more detail on our debt balances.
|
HOST HOTELS & RESORTS, INC. |
Condensed Consolidated Statements of
Operations (1) |
(unaudited, in millions, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Quarter endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
847 |
|
|
$ |
837 |
|
|
$ |
3,490 |
|
|
$ |
3,492 |
|
Food and
beverage |
|
|
409 |
|
|
|
416 |
|
|
|
1,561 |
|
|
|
1,599 |
|
Other |
|
|
88 |
|
|
|
84 |
|
|
|
336 |
|
|
|
339 |
|
Total
revenues |
|
|
1,344 |
|
|
|
1,337 |
|
|
|
5,387 |
|
|
|
5,430 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
223 |
|
|
|
219 |
|
|
|
899 |
|
|
|
893 |
|
Food and
beverage |
|
|
277 |
|
|
|
284 |
|
|
|
1,071 |
|
|
|
1,114 |
|
Other
departmental and support expenses |
|
|
321 |
|
|
|
325 |
|
|
|
1,273 |
|
|
|
1,306 |
|
Management fees |
|
|
61 |
|
|
|
59 |
|
|
|
239 |
|
|
|
236 |
|
Other
property-level expenses |
|
|
100 |
|
|
|
93 |
|
|
|
394 |
|
|
|
382 |
|
Depreciation and amortization |
|
|
217 |
|
|
|
183 |
|
|
|
751 |
|
|
|
724 |
|
Corporate
and other expenses(2) |
|
|
19 |
|
|
|
24 |
|
|
|
98 |
|
|
|
106 |
|
Gain on
insurance and business interruption settlements |
|
|
(8 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
(15 |
) |
Total
operating costs and expenses |
|
|
1,210 |
|
|
|
1,187 |
|
|
|
4,711 |
|
|
|
4,746 |
|
Operating
profit |
|
|
134 |
|
|
|
150 |
|
|
|
676 |
|
|
|
684 |
|
Interest income |
|
|
2 |
|
|
|
1 |
|
|
|
6 |
|
|
|
3 |
|
Interest expense |
|
|
(42 |
) |
|
|
(38 |
) |
|
|
(167 |
) |
|
|
(154 |
) |
Gain on sale of
assets |
|
|
3 |
|
|
|
8 |
|
|
|
108 |
|
|
|
253 |
|
Gain (loss) on foreign
currency transactions and derivatives |
|
|
2 |
|
|
|
3 |
|
|
|
(2 |
) |
|
|
4 |
|
Equity in earnings of
affiliates |
|
|
11 |
|
|
|
2 |
|
|
|
30 |
|
|
|
21 |
|
Income before
income taxes |
|
|
110 |
|
|
|
126 |
|
|
|
651 |
|
|
|
811 |
|
Benefit (provision) for
income taxes |
|
|
(17 |
) |
|
|
2 |
|
|
|
(80 |
) |
|
|
(40 |
) |
Net
income |
|
|
93 |
|
|
|
128 |
|
|
|
571 |
|
|
|
771 |
|
Less: Net
income attributable to non-controlling interests... |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
Net income
attributable to Host Inc. |
|
$ |
92 |
|
|
$ |
126 |
|
|
$ |
564 |
|
|
$ |
762 |
|
Basic earnings per common share |
|
$ |
.12 |
|
|
$ |
.17 |
|
|
$ |
.76 |
|
|
$ |
1.03 |
|
Diluted
earnings per common share |
|
$ |
.12 |
|
|
$ |
.17 |
|
|
$ |
.76 |
|
|
$ |
1.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(1) Our condensed
consolidated statements of operations presented above have been
prepared without audit. Certain information and footnote
disclosures normally included in financial statements presented in
accordance with GAAP have been
omitted.
(2)
Corporate and other expenses include the following items:
|
|
Quarter ended December 31, |
|
|
Year ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
General and
administrative costs |
|
$ |
16 |
|
|
$ |
21 |
|
|
$ |
86 |
|
|
$ |
95 |
|
Non-cash stock-based
compensation expense |
|
|
3 |
|
|
|
4 |
|
|
|
11 |
|
|
|
12 |
|
Litigation accruals and
acquisition costs, net |
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
Total |
|
$ |
19 |
|
|
$ |
24 |
|
|
$ |
98 |
|
|
$ |
106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS, INC. |
Earnings per Common Share |
(unaudited, in millions, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Quarter endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net income |
|
$ |
93 |
|
|
$ |
128 |
|
|
$ |
571 |
|
|
$ |
771 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
Net income attributable
to Host Inc |
|
$ |
92 |
|
|
$ |
126 |
|
|
$ |
564 |
|
|
$ |
762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
|
739.0 |
|
|
|
737.9 |
|
|
|
738.6 |
|
|
|
743.0 |
|
Assuming
distribution of common shares granted under the comprehensive
stock plans, less shares assumed purchased at market |
|
|
.6 |
|
|
|
.7 |
|
|
|
.5 |
|
|
|
.7 |
|
Diluted weighted
average shares outstanding (1) |
|
|
739.6 |
|
|
|
738.6 |
|
|
|
739.1 |
|
|
|
743.7 |
|
Basic earnings per
common share |
|
$ |
.12 |
|
|
$ |
.17 |
|
|
$ |
.76 |
|
|
$ |
1.03 |
|
Diluted earnings per
common share |
|
$ |
.12 |
|
|
$ |
.17 |
|
|
$ |
.76 |
|
|
$ |
1.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(1) Dilutive securities
may include shares granted under comprehensive stock plans,
preferred operating partnership units (“OP Units”) held by minority
partners and other non-controlling interests that have the option
to convert their limited partnership interests to common OP Units.
No effect is shown for any securities that were anti-dilutive for
the period.
|
HOST HOTELS & RESORTS, INC. |
Hotel Operating Data for Consolidated Hotels
(1) |
|
Comparable Hotels by Location in Constant US$ (sorted by
RevPAR) |
|
|
|
As of December 31, 2017 |
|
|
Quarter ended December 31, 2017 |
|
|
Quarter ended December 31, 2016 |
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
344.36 |
|
|
|
90.1 |
% |
|
$ |
310.20 |
|
|
$ |
345.52 |
|
|
|
88.1 |
% |
|
$ |
304.28 |
|
|
|
1.9 |
% |
New York |
|
|
6 |
|
|
|
6,000 |
|
|
|
333.98 |
|
|
|
91.4 |
|
|
|
305.36 |
|
|
|
335.91 |
|
|
|
90.9 |
|
|
|
305.20 |
|
|
|
0.1 |
|
Florida Gulf Coast |
|
|
3 |
|
|
|
1,043 |
|
|
|
336.42 |
|
|
|
72.1 |
|
|
|
242.54 |
|
|
|
347.06 |
|
|
|
67.4 |
|
|
|
233.75 |
|
|
|
3.8 |
|
San Francisco/San
Jose |
|
|
4 |
|
|
|
2,912 |
|
|
|
254.38 |
|
|
|
78.6 |
|
|
|
200.03 |
|
|
|
249.50 |
|
|
|
78.9 |
|
|
|
196.77 |
|
|
|
1.7 |
|
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
314.15 |
|
|
|
62.4 |
|
|
|
196.04 |
|
|
|
313.69 |
|
|
|
55.8 |
|
|
|
174.89 |
|
|
|
12.1 |
|
Washington, D.C.
(CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
248.18 |
|
|
|
75.5 |
|
|
|
187.29 |
|
|
|
240.62 |
|
|
|
77.8 |
|
|
|
187.12 |
|
|
|
0.1 |
|
Los Angeles |
|
|
3 |
|
|
|
1,414 |
|
|
|
206.06 |
|
|
|
86.2 |
|
|
|
177.59 |
|
|
|
200.07 |
|
|
|
85.8 |
|
|
|
171.71 |
|
|
|
3.4 |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
225.47 |
|
|
|
78.5 |
|
|
|
177.02 |
|
|
|
228.87 |
|
|
|
74.5 |
|
|
|
170.44 |
|
|
|
3.9 |
|
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
207.32 |
|
|
|
82.9 |
|
|
|
171.88 |
|
|
|
197.37 |
|
|
|
75.2 |
|
|
|
148.39 |
|
|
|
15.8 |
|
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
199.06 |
|
|
|
78.8 |
|
|
|
156.87 |
|
|
|
207.67 |
|
|
|
77.1 |
|
|
|
160.02 |
|
|
|
(2.0 |
) |
Atlanta |
|
|
5 |
|
|
|
1,939 |
|
|
|
204.84 |
|
|
|
73.9 |
|
|
|
151.37 |
|
|
|
196.33 |
|
|
|
74.1 |
|
|
|
145.41 |
|
|
|
4.1 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
200.33 |
|
|
|
74.4 |
|
|
|
148.98 |
|
|
|
203.96 |
|
|
|
69.3 |
|
|
|
141.43 |
|
|
|
5.3 |
|
Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
201.83 |
|
|
|
73.2 |
|
|
|
147.81 |
|
|
|
206.26 |
|
|
|
67.8 |
|
|
|
139.91 |
|
|
|
5.6 |
|
San Diego |
|
|
3 |
|
|
|
2,981 |
|
|
|
196.15 |
|
|
|
75.1 |
|
|
|
147.36 |
|
|
|
195.83 |
|
|
|
78.8 |
|
|
|
154.39 |
|
|
|
(4.6 |
) |
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
177.68 |
|
|
|
77.0 |
|
|
|
136.85 |
|
|
|
179.67 |
|
|
|
71.0 |
|
|
|
127.61 |
|
|
|
7.2 |
|
Orange County |
|
|
4 |
|
|
|
1,429 |
|
|
|
177.00 |
|
|
|
76.1 |
|
|
|
134.71 |
|
|
|
178.77 |
|
|
|
71.7 |
|
|
|
128.14 |
|
|
|
5.1 |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
174.34 |
|
|
|
73.1 |
|
|
|
127.40 |
|
|
|
165.83 |
|
|
|
72.7 |
|
|
|
120.59 |
|
|
|
5.7 |
|
Northern Virginia |
|
|
6 |
|
|
|
2,502 |
|
|
|
177.21 |
|
|
|
70.7 |
|
|
|
125.31 |
|
|
|
173.58 |
|
|
|
67.8 |
|
|
|
117.65 |
|
|
|
6.5 |
|
San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
180.05 |
|
|
|
68.4 |
|
|
|
123.08 |
|
|
|
168.74 |
|
|
|
66.7 |
|
|
|
112.56 |
|
|
|
9.3 |
|
Denver |
|
|
2 |
|
|
|
735 |
|
|
|
174.83 |
|
|
|
69.7 |
|
|
|
121.94 |
|
|
|
175.13 |
|
|
|
66.0 |
|
|
|
115.56 |
|
|
|
5.5 |
|
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
183.45 |
|
|
|
65.9 |
|
|
|
120.95 |
|
|
|
175.05 |
|
|
|
63.8 |
|
|
|
111.66 |
|
|
|
8.3 |
|
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
150.88 |
|
|
|
65.5 |
|
|
|
98.77 |
|
|
|
150.08 |
|
|
|
79.7 |
|
|
|
119.57 |
|
|
|
(17.4 |
) |
Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
159.92 |
|
|
|
69.6 |
|
|
|
111.23 |
|
|
|
163.64 |
|
|
|
68.0 |
|
|
|
111.19 |
|
|
|
- |
|
Domestic |
|
|
81 |
|
|
|
46,546 |
|
|
|
230.73 |
|
|
|
77.0 |
|
|
|
177.77 |
|
|
|
229.88 |
|
|
|
75.8 |
|
|
|
174.17 |
|
|
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
6 |
|
|
|
1,811 |
|
|
|
182.46 |
|
|
|
64.6 |
|
|
|
117.90 |
|
|
|
183.99 |
|
|
|
59.7 |
|
|
|
109.92 |
|
|
|
7.3 |
|
All
Locations - Constant US$ |
|
|
87 |
|
|
|
48,357 |
|
|
|
229.21 |
|
|
|
76.6 |
|
|
|
175.52 |
|
|
|
228.51 |
|
|
|
75.2 |
|
|
|
171.76 |
|
|
|
2.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Owned Hotels in Constant US$ (2)
|
|
As of December 31, 2017 |
|
|
Quarter ended December 31, 2017 |
|
|
Quarter ended December 31, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
87 |
|
|
|
48,357 |
|
|
$ |
229.21 |
|
|
|
76.6 |
% |
|
$ |
175.52 |
|
|
$ |
228.51 |
|
|
|
75.2 |
% |
|
$ |
171.76 |
|
|
|
2.2 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
7 |
|
|
|
4,203 |
|
|
|
233.76 |
|
|
|
73.2 |
|
|
|
171.03 |
|
|
|
235.99 |
|
|
|
65.5 |
|
|
|
154.47 |
|
|
|
10.7 |
|
All
Hotels |
|
|
94 |
|
|
|
52,560 |
|
|
|
229.56 |
|
|
|
76.3 |
|
|
|
175.16 |
|
|
|
229.04 |
|
|
|
74.4 |
|
|
|
170.38 |
|
|
|
2.8 |
|
Comparable Hotels in Nominal US$
|
|
As of December 31, 2017 |
|
|
Quarter ended December 31, 2017 |
|
|
Quarter ended December 31, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
International |
|
|
6 |
|
|
|
1,811 |
|
|
$ |
182.46 |
|
|
|
64.6 |
% |
|
$ |
117.90 |
|
|
$ |
177.13 |
|
|
|
59.7 |
% |
|
$ |
105.82 |
|
|
|
11.4 |
% |
Domestic |
|
|
81 |
|
|
|
46,546 |
|
|
|
230.73 |
|
|
|
77.0 |
|
|
|
177.77 |
|
|
|
229.88 |
|
|
|
75.8 |
|
|
|
174.17 |
|
|
|
2.1 |
|
All
Locations |
|
|
87 |
|
|
|
48,357 |
|
|
|
229.21 |
|
|
|
76.6 |
|
|
|
175.52 |
|
|
|
228.31 |
|
|
|
75.2 |
|
|
|
171.61 |
|
|
|
2.3 |
|
HOST HOTELS & RESORTS, INC. |
Hotel Operating Data for Consolidated Hotels
(1) |
|
Comparable Hotels by Location in Constant US$ (sorted by
RevPAR) |
|
|
As of December 31, 2017 |
|
|
Year ended December 31, 2017 |
|
|
Year ended December 31, 2016 |
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
340.98 |
|
|
|
90.7 |
% |
|
$ |
309.15 |
|
|
$ |
330.98 |
|
|
|
90.6 |
% |
|
$ |
299.86 |
|
|
|
3.1 |
% |
Florida Gulf Coast |
|
|
3 |
|
|
|
1,043 |
|
|
|
362.53 |
|
|
|
71.4 |
|
|
|
258.86 |
|
|
|
360.91 |
|
|
|
71.4 |
|
|
|
257.54 |
|
|
|
0.5 |
|
New York |
|
|
6 |
|
|
|
6,000 |
|
|
|
292.24 |
|
|
|
88.5 |
|
|
|
258.67 |
|
|
|
297.49 |
|
|
|
88.2 |
|
|
|
262.33 |
|
|
|
(1.4 |
) |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
349.70 |
|
|
|
71.0 |
|
|
|
248.28 |
|
|
|
337.37 |
|
|
|
71.5 |
|
|
|
241.38 |
|
|
|
2.9 |
|
San Francisco/San
Jose |
|
|
4 |
|
|
|
2,912 |
|
|
|
259.12 |
|
|
|
83.1 |
|
|
|
215.30 |
|
|
|
261.08 |
|
|
|
83.2 |
|
|
|
217.23 |
|
|
|
(0.9 |
) |
Washington, D.C.
(CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
257.16 |
|
|
|
82.2 |
|
|
|
211.42 |
|
|
|
244.72 |
|
|
|
81.5 |
|
|
|
199.37 |
|
|
|
6.0 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
232.84 |
|
|
|
83.7 |
|
|
|
194.80 |
|
|
|
221.43 |
|
|
|
78.7 |
|
|
|
174.27 |
|
|
|
11.8 |
|
Los Angeles |
|
|
3 |
|
|
|
1,414 |
|
|
|
218.15 |
|
|
|
89.0 |
|
|
|
194.24 |
|
|
|
211.73 |
|
|
|
89.5 |
|
|
|
189.44 |
|
|
|
2.5 |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
234.25 |
|
|
|
81.5 |
|
|
|
190.88 |
|
|
|
231.16 |
|
|
|
80.2 |
|
|
|
185.42 |
|
|
|
2.9 |
|
San Diego |
|
|
3 |
|
|
|
2,981 |
|
|
|
216.93 |
|
|
|
82.0 |
|
|
|
177.82 |
|
|
|
206.98 |
|
|
|
84.2 |
|
|
|
174.35 |
|
|
|
2.0 |
|
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
199.69 |
|
|
|
82.4 |
|
|
|
164.54 |
|
|
|
208.55 |
|
|
|
73.6 |
|
|
|
153.58 |
|
|
|
7.1 |
|
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
197.52 |
|
|
|
79.4 |
|
|
|
156.83 |
|
|
|
203.33 |
|
|
|
77.4 |
|
|
|
157.43 |
|
|
|
(0.4 |
) |
Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
206.51 |
|
|
|
73.9 |
|
|
|
152.54 |
|
|
|
211.64 |
|
|
|
68.3 |
|
|
|
144.50 |
|
|
|
5.6 |
|
Atlanta |
|
|
5 |
|
|
|
1,939 |
|
|
|
195.60 |
|
|
|
77.0 |
|
|
|
150.69 |
|
|
|
193.33 |
|
|
|
78.0 |
|
|
|
150.86 |
|
|
|
(0.1 |
) |
Orange County |
|
|
4 |
|
|
|
1,429 |
|
|
|
188.85 |
|
|
|
79.2 |
|
|
|
149.51 |
|
|
|
191.92 |
|
|
|
76.7 |
|
|
|
147.25 |
|
|
|
1.5 |
|
Denver |
|
|
2 |
|
|
|
735 |
|
|
|
179.96 |
|
|
|
79.0 |
|
|
|
142.20 |
|
|
|
179.94 |
|
|
|
73.5 |
|
|
|
132.25 |
|
|
|
7.5 |
|
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
175.51 |
|
|
|
77.0 |
|
|
|
135.13 |
|
|
|
179.79 |
|
|
|
76.5 |
|
|
|
137.53 |
|
|
|
(1.7 |
) |
Northern Virginia |
|
|
6 |
|
|
|
2,502 |
|
|
|
179.18 |
|
|
|
75.3 |
|
|
|
134.88 |
|
|
|
171.96 |
|
|
|
74.1 |
|
|
|
127.49 |
|
|
|
5.8 |
|
San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
181.55 |
|
|
|
72.2 |
|
|
|
131.01 |
|
|
|
177.04 |
|
|
|
70.1 |
|
|
|
124.08 |
|
|
|
5.6 |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
178.11 |
|
|
|
72.1 |
|
|
|
128.50 |
|
|
|
178.43 |
|
|
|
73.4 |
|
|
|
130.96 |
|
|
|
(1.9 |
) |
Orlando. |
|
|
1 |
|
|
|
2,004 |
|
|
|
179.30 |
|
|
|
70.1 |
|
|
|
125.62 |
|
|
|
175.58 |
|
|
|
69.6 |
|
|
|
122.17 |
|
|
|
2.8 |
|
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
157.48 |
|
|
|
75.0 |
|
|
|
118.14 |
|
|
|
157.15 |
|
|
|
84.6 |
|
|
|
132.92 |
|
|
|
(11.1 |
) |
Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
166.34 |
|
|
|
72.8 |
|
|
|
121.10 |
|
|
|
166.38 |
|
|
|
72.2 |
|
|
|
120.11 |
|
|
|
0.8 |
|
Domestic |
|
|
81 |
|
|
|
46,546 |
|
|
|
228.89 |
|
|
|
79.8 |
|
|
|
182.76 |
|
|
|
227.06 |
|
|
|
79.1 |
|
|
|
179.70 |
|
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
6 |
|
|
|
1,811 |
|
|
|
179.64 |
|
|
|
62.9 |
|
|
|
113.05 |
|
|
|
201.66 |
|
|
|
63.9 |
|
|
|
128.79 |
|
|
|
(12.2 |
) |
All
Locations - Constant US$ |
|
|
87 |
|
|
|
48,357 |
|
|
|
227.42 |
|
|
|
79.2 |
|
|
|
180.14 |
|
|
|
226.28 |
|
|
|
78.6 |
|
|
|
177.79 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Owned Hotels in Constant US$ (2)
|
|
As of December 31, 2017 |
|
|
Year ended December 31, 2017 |
|
|
Year ended December 31, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
87 |
|
|
|
48,357 |
|
|
$ |
227.42 |
|
|
|
79.2 |
% |
|
$ |
180.14 |
|
|
$ |
226.28 |
|
|
|
78.6 |
% |
|
$ |
177.79 |
|
|
|
1.3 |
% |
Non-comparable Hotels
(Pro forma) |
|
|
7 |
|
|
|
4,203 |
|
|
|
244.70 |
|
|
|
76.2 |
|
|
|
186.42 |
|
|
|
245.24 |
|
|
|
69.1 |
|
|
|
169.43 |
|
|
|
10.0 |
|
All
Hotels |
|
|
94 |
|
|
|
52,560 |
|
|
|
228.76 |
|
|
|
79.0 |
|
|
|
180.65 |
|
|
|
227.63 |
|
|
|
77.8 |
|
|
|
177.12 |
|
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Hotels in Nominal US$
|
|
As of December 31, 2017 |
|
|
Year ended December 31, 2017 |
|
|
Year ended December 31, 2016 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
International |
|
|
6 |
|
|
|
1,811 |
|
|
$ |
179.64 |
|
|
|
62.9 |
% |
|
$ |
113.05 |
|
|
$ |
195.31 |
|
|
|
63.9 |
% |
|
$ |
124.73 |
|
|
|
(9.4 |
)% |
Domestic |
|
|
81 |
|
|
|
46,546 |
|
|
|
228.89 |
|
|
|
79.8 |
|
|
|
182.76 |
|
|
|
227.06 |
|
|
|
79.1 |
|
|
|
179.70 |
|
|
|
1.7 |
|
All
Locations |
|
|
87 |
|
|
|
48,357 |
|
|
|
227.42 |
|
|
|
79.2 |
|
|
|
180.14 |
|
|
|
226.09 |
|
|
|
78.6 |
|
|
|
177.64 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Notes to Financial
Information for a discussion of comparable hotel operating
statistics and constant US$ presentation. Nominal US$ results
include the effect of currency fluctuations, consistent with our
financial statement presentation. CBD of a location refers to the
central business district.(2) Operating statistics are
presented for all consolidated properties owned as of
December 31, 2017 and do not include the results of operations
for properties sold in 2017 or 2016. Additionally, all owned hotel
operating statistics include hotels that we did not own for the
entirety of the periods presented and properties that are
undergoing large-scale capital projects during the periods
presented and, therefore, are not considered comparable hotel
information upon which we usually evaluate our performance.
Specifically, comparable RevPAR is calculated as revenues divided
by the available room nights, which will rarely vary on a
year-over-year basis. Conversely, the available room nights
included in the non-comparable RevPAR statistic will vary widely
based on the timing of hotel closings, the scope of a capital
project, or the development of a new property. See the Notes to
Financial Information – Comparable Hotel Operating Statistics for
further information on these pro forma statistics and the
limitations on their use.
- Non-comparable hotels (pro forma) - This represents five hotels
under significant renovations in either 2016 or 2017: The Axiom
Hotel, the Hyatt Regency San Francisco Airport, the Denver Marriott
Tech Center, the Marriott Marquis San Diego Marina and the
Phoenician. It also includes the Don CeSar and W Hollywood,
acquired in 2017, which are presented on a pro forma basis assuming
we owned the hotels as of January 1, 2016 and includes historical
operating data for periods prior to our ownership. As a result, the
RevPAR increase of 10.7% and 10.0% for the quarter and full year,
respectively, for these seven hotels is considered
non-comparable.
|
HOST HOTELS & RESORTS,
INC. |
Schedule of Comparable Hotel
Results (1) |
(unaudited, in millions, except hotel statistics) |
|
|
|
Quarter ended December 31, |
|
|
Year ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Number of hotels |
|
|
87 |
|
|
|
87 |
|
|
|
87 |
|
|
|
87 |
|
Number of rooms |
|
|
48,357 |
|
|
|
48,357 |
|
|
|
48,357 |
|
|
|
48,357 |
|
Change in comparable
hotel RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
US$ |
|
|
2.2 |
% |
|
|
— |
|
|
|
1.3 |
% |
|
|
— |
|
Nominal
US$ |
|
|
2.3 |
% |
|
|
— |
|
|
|
1.4 |
% |
|
|
— |
|
Operating profit margin
(2) |
|
|
10.0 |
% |
|
|
11.2 |
% |
|
|
12.5 |
% |
|
|
12.6 |
% |
Comparable hotel EBITDA
margin (2) |
|
|
27.25 |
% |
|
|
27.15 |
% |
|
|
27.85 |
% |
|
|
27.75 |
% |
Food and beverage
profit margin (2) |
|
|
32.3 |
% |
|
|
31.7 |
% |
|
|
31.4 |
% |
|
|
30.3 |
% |
Comparable hotel food
and beverage profit margin (2) |
|
|
31.9 |
% |
|
|
32.4 |
% |
|
|
31.2 |
% |
|
|
30.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
93 |
|
|
$ |
128 |
|
|
$ |
571 |
|
|
$ |
771 |
|
Depreciation and
amortization |
|
|
217 |
|
|
|
183 |
|
|
|
751 |
|
|
|
724 |
|
Interest expense |
|
|
42 |
|
|
|
38 |
|
|
|
167 |
|
|
|
154 |
|
Provision (benefit) for
income taxes |
|
|
17 |
|
|
|
(2 |
) |
|
|
80 |
|
|
|
40 |
|
Gain on sale of
property and corporate level income/expense |
|
|
1 |
|
|
|
10 |
|
|
|
(44 |
) |
|
|
(175 |
) |
Non-comparable hotel
results, net (3) |
|
|
(38 |
) |
|
|
(33 |
) |
|
|
(177 |
) |
|
|
(180 |
) |
Comparable
hotel EBITDA |
|
$ |
332 |
|
|
$ |
324 |
|
|
$ |
1,348 |
|
|
$ |
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31, 2017 |
|
|
Quarter ended December 31, 2016 |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
847 |
|
|
$ |
(66 |
) |
|
$ |
— |
|
|
$ |
781 |
|
|
$ |
837 |
|
|
$ |
(74 |
) |
|
$ |
— |
|
|
$ |
763 |
|
Food and
beverage |
|
|
409 |
|
|
|
(45 |
) |
|
|
— |
|
|
|
364 |
|
|
|
416 |
|
|
|
(55 |
) |
|
|
— |
|
|
|
361 |
|
Other |
|
|
88 |
|
|
|
(14 |
) |
|
|
— |
|
|
|
74 |
|
|
|
84 |
|
|
|
(16 |
) |
|
|
— |
|
|
|
68 |
|
Total
revenues |
|
|
1,344 |
|
|
|
(125 |
) |
|
|
— |
|
|
|
1,219 |
|
|
|
1,337 |
|
|
|
(145 |
) |
|
|
— |
|
|
|
1,192 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
223 |
|
|
|
(18 |
) |
|
|
— |
|
|
|
205 |
|
|
|
219 |
|
|
|
(20 |
) |
|
|
— |
|
|
|
199 |
|
Food and
beverage |
|
|
277 |
|
|
|
(29 |
) |
|
|
— |
|
|
|
248 |
|
|
|
284 |
|
|
|
(40 |
) |
|
|
— |
|
|
|
244 |
|
Other |
|
|
482 |
|
|
|
(48 |
) |
|
|
— |
|
|
|
434 |
|
|
|
477 |
|
|
|
(52 |
) |
|
|
— |
|
|
|
425 |
|
Depreciation and amortization |
|
|
217 |
|
|
|
— |
|
|
|
(217 |
) |
|
|
— |
|
|
|
183 |
|
|
|
— |
|
|
|
(183 |
) |
|
|
— |
|
Corporate
and other expenses |
|
|
19 |
|
|
|
— |
|
|
|
(19 |
) |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
(24 |
) |
|
|
— |
|
Gain on
insurance and business interruption settlements |
|
|
(8 |
) |
|
|
8 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total
expenses |
|
|
1,210 |
|
|
|
(87 |
) |
|
|
(236 |
) |
|
|
887 |
|
|
|
1,187 |
|
|
|
(112 |
) |
|
|
(207 |
) |
|
|
868 |
|
Operating
Profit - Comparable Hotel
EBITDA |
|
$ |
134 |
|
|
$ |
(38 |
) |
|
$ |
236 |
|
|
$ |
332 |
|
|
$ |
150 |
|
|
$ |
(33 |
) |
|
$ |
207 |
|
|
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS,
INC. |
|
Schedule of Comparable Hotel Results
(1) |
|
(unaudited, in millions, except hotel statistics) |
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2017 |
|
|
Year ended December 31, 2016 |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
3,490 |
|
|
$ |
(310 |
) |
|
$ |
— |
|
|
$ |
3,180 |
|
|
$ |
3,492 |
|
|
$ |
(348 |
) |
|
$ |
— |
|
|
$ |
3,144 |
|
Food and
beverage |
|
|
1,561 |
|
|
|
(178 |
) |
|
|
— |
|
|
|
1,383 |
|
|
|
1,599 |
|
|
|
(204 |
) |
|
|
— |
|
|
|
1,395 |
|
Other |
|
|
336 |
|
|
|
(59 |
) |
|
|
— |
|
|
|
277 |
|
|
|
339 |
|
|
|
(70 |
) |
|
|
— |
|
|
|
269 |
|
Total
revenues |
|
|
5,387 |
|
|
|
(547 |
) |
|
|
— |
|
|
|
4,840 |
|
|
|
5,430 |
|
|
|
(622 |
) |
|
|
— |
|
|
|
4,808 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
899 |
|
|
|
(77 |
) |
|
|
— |
|
|
|
822 |
|
|
|
893 |
|
|
|
(88 |
) |
|
|
— |
|
|
|
805 |
|
Food and
beverage |
|
|
1,071 |
|
|
|
(119 |
) |
|
|
— |
|
|
|
952 |
|
|
|
1,114 |
|
|
|
(144 |
) |
|
|
— |
|
|
|
970 |
|
Other |
|
|
1,906 |
|
|
|
(188 |
) |
|
|
— |
|
|
|
1,718 |
|
|
|
1,924 |
|
|
|
(225 |
) |
|
|
— |
|
|
|
1,699 |
|
Depreciation and amortization |
|
|
751 |
|
|
|
— |
|
|
|
(751 |
) |
|
|
— |
|
|
|
724 |
|
|
|
— |
|
|
|
(724 |
) |
|
|
— |
|
Corporate
and other expenses |
|
|
98 |
|
|
|
— |
|
|
|
(98 |
) |
|
|
— |
|
|
|
106 |
|
|
|
— |
|
|
|
(106 |
) |
|
|
— |
|
Gain on
insurance and business interruption settlements |
|
|
(14 |
) |
|
|
14 |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
15 |
|
|
|
— |
|
|
|
— |
|
Total
expenses |
|
|
4,711 |
|
|
|
(370 |
) |
|
|
(849 |
) |
|
|
3,492 |
|
|
|
4,746 |
|
|
|
(442 |
) |
|
|
(830 |
) |
|
|
3,474 |
|
Operating
Profit - Comparable Hotel
EBITDA |
|
$ |
676 |
|
|
$ |
(177 |
) |
|
$ |
849 |
|
|
$ |
1,348 |
|
|
$ |
684 |
|
|
$ |
(180 |
) |
|
$ |
830 |
|
|
$ |
1,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) See the Notes to Financial
Information for a discussion of non-GAAP measures and the
calculation of comparable hotel results. For additional information
on comparable hotel EBITDA by location, see the Year End 2017
Supplemental Financial Information posted on our
website.(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
condensed consolidated statements of operations. Comparable hotel
margins are calculated using amounts presented in the above tables.
(3) Non-comparable hotel results, net, includes the
following items: (i) the results of operations of our
non-comparable hotels and sold hotels, which operations are
included in our condensed consolidated statements of operations as
continuing operations, (ii) gains on insurance settlements and
business interruption proceeds, and (iii) the results of our
office spaces and other non-hotel income.
HOST HOTELS & RESORTS,
INC. |
Reconciliation of Net Income to |
|
EBITDA, EBITDAre and Adjusted EBITDAre
(1) |
(unaudited, in millions) |
|
|
Quarter endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net
income (2) |
|
$ |
93 |
|
|
$ |
128 |
|
|
$ |
571 |
|
|
$ |
771 |
|
Interest
expense |
|
|
42 |
|
|
|
38 |
|
|
|
167 |
|
|
|
154 |
|
Depreciation and amortization |
|
|
174 |
|
|
|
183 |
|
|
|
708 |
|
|
|
724 |
|
Income
taxes |
|
|
17 |
|
|
|
(2 |
) |
|
|
80 |
|
|
|
40 |
|
EBITDA
(2) |
|
|
326 |
|
|
|
347 |
|
|
|
1,526 |
|
|
|
1,689 |
|
(Gain)/loss on dispositions (3) |
|
|
2 |
|
|
|
(8 |
) |
|
|
(100 |
) |
|
|
(250 |
) |
Non-cash
impairment loss |
|
|
43 |
|
|
|
— |
|
|
|
43 |
|
|
|
— |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of Euro JV (4) |
|
|
(9 |
) |
|
|
(1 |
) |
|
|
(18 |
) |
|
|
(8 |
) |
Equity in
earnings of affiliates other than Euro JV |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(12 |
) |
|
|
(13 |
) |
Pro rata
EBITDAre of Euro JV (4) |
|
|
9 |
|
|
|
7 |
|
|
|
40 |
|
|
|
36 |
|
Pro rata
EBITDAre of equity investments other than Euro JV |
|
|
6 |
|
|
|
7 |
|
|
|
31 |
|
|
|
29 |
|
EBITDAre
(2)(5) |
|
|
375 |
|
|
|
351 |
|
|
|
1,510 |
|
|
|
1,483 |
|
Adjustments to
EBITDAre: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Gain on
property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Adjusted
EBITDAre (2)(5) |
|
$ |
375 |
|
|
$ |
351 |
|
|
$ |
1,510 |
|
|
$ |
1,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(1) See the Notes
to Financial Information for discussion of non-GAAP
measures.(2) Net Income, EBITDA, EBITDAre,
Adjusted EBITDAre, NAREIT FFO and Adjusted FFO include a gain of $2
million for each of the years ended December 31, 2017 and 2016, for
the sale of the portion of land attributable to individual units
sold by the Maui timeshare joint venture and a gain of $4 million
for the quarter and year ended December 31, 2017 for the sale of
excess land in Chicago.(3) Reflects the sale of
four hotels in 2017 and the sale of ten hotels in
2016.(4) Represents our share of earnings from
our European Joint Venture (“Euro JV”) in which we hold an
approximate one-third non-controlling
interest.(5) Effective December 31, 2017, we
present EBITDAre, reported in accordance with NAREIT guidelines,
and Adjusted EBITDAre as supplemental measures of our performance.
Prior year results have been restated to conform with the current
year presentation. Under the new presentation, all of the EBITDA of
consolidated partnerships is included, including the
non-controlling partner’s share, which has increased the previously
reported 2016 Adjusted EBITDA by $3 million for the quarter and $11
million for the full year. See the Notes to Financial Information
for more information on this change.
HOST HOTELS & RESORTS,
INC. |
|
Reconciliation of Net Income to NAREIT
and |
|
Adjusted Funds From Operations per Diluted
Share (1) |
|
(unaudited, in millions, except per share
amounts) |
|
|
|
|
|
Quarter ended December 31, |
|
|
Year ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net
income (2) |
|
$ |
93 |
|
|
$ |
128 |
|
|
$ |
571 |
|
|
$ |
771 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
Net income
attributable to Host Inc. |
|
|
92 |
|
|
|
126 |
|
|
|
564 |
|
|
|
762 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain)/loss on dispositions (3) |
|
|
2 |
|
|
|
(8 |
) |
|
|
(100 |
) |
|
|
(250 |
) |
Tax on
dispositions |
|
|
(5 |
) |
|
|
— |
|
|
|
18 |
|
|
|
9 |
|
Gain on
property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Depreciation and amortization |
|
|
173 |
|
|
|
182 |
|
|
|
704 |
|
|
|
720 |
|
Non-cash
impairment loss |
|
|
43 |
|
|
|
— |
|
|
|
43 |
|
|
|
— |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
|
(11 |
) |
|
|
(2 |
) |
|
|
(30 |
) |
|
|
(21 |
) |
Pro rata
FFO of equity investments |
|
|
16 |
|
|
|
10 |
|
|
|
56 |
|
|
|
48 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partnerships |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
FFO
adjustments for non-controlling interests of Host L.P |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(8 |
) |
|
|
(6 |
) |
NAREIT FFO
(2) |
|
|
306 |
|
|
|
304 |
|
|
|
1,242 |
|
|
|
1,257 |
|
Adjustments to NAREIT
FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Adjustment for Tax Reform (4) |
|
|
6 |
|
|
|
— |
|
|
|
6 |
|
|
|
— |
|
Loss on
debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Adjusted FFO
(2) |
|
$ |
312 |
|
|
$ |
304 |
|
|
$ |
1,250 |
|
|
$ |
1,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation
on a per share basis (5): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding - EPS, NAREIT FFO and Adjusted
FFO |
|
|
739.6 |
|
|
|
738.6 |
|
|
|
739.1 |
|
|
|
743.7 |
|
NAREIT FFO per
diluted share |
|
$ |
.41 |
|
|
$ |
.41 |
|
|
$ |
1.68 |
|
|
$ |
1.69 |
|
Adjusted FFO
per diluted share |
|
$ |
.42 |
|
|
$ |
.41 |
|
|
$ |
1.69 |
|
|
$ |
1.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1-3) Refer to the corresponding footnote
on the Reconciliation of Net Income to EBITDA, EBITDAre and
Adjusted EBITDAre.(4) As a result of the
reduction of corporate income tax rates from 35% to 21% caused 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 the deferred tax assets and increase the provision for
income taxes by approximately $11 million. Additionally, similar
corporate income tax rate reductions affected our European Joint
Venture, causing the remeasurement of the net deferred tax assets
and liabilities in France and Belgium, resulting in a net tax
benefit to us of $5 million. We do not consider these adjustments
to be reflective of our on-going operating performance and
therefore have excluded these items from Adjusted FFO.
(5) Earnings per diluted share and NAREIT FFO and
Adjusted FFO per diluted share are adjusted for the effects of
dilutive securities. Dilutive securities may include shares granted
under comprehensive stock plans, preferred OP units held by
non-controlling partners and other non-controlling interests that
have the option to convert their limited partnership interests to
common OP units. No effect is shown for securities if they are
anti-dilutive.
|
|
HOST HOTELS & RESORTS,
INC. |
|
Reconciliation of Net Income to EBITDA,
EBITDAre, Adjusted EBITDAre
and |
|
NAREIT and Adjusted Funds From Operations per
Diluted Share for 2018 Forecasts (1) |
|
(unaudited, in millions, except per share amounts) |
|
|
|
|
Full Year 2018 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
$ |
547 |
|
|
$ |
616 |
|
Interest
expense |
|
192 |
|
|
|
192 |
|
Depreciation and amortization |
|
735 |
|
|
|
735 |
|
Income
taxes |
|
43 |
|
|
|
44 |
|
EBITDA |
|
1,517 |
|
|
|
1,587 |
|
Gain on
dispositions |
|
(102 |
) |
|
|
(102 |
) |
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(28 |
) |
|
|
(28 |
) |
Pro rata
EBITDAre of equity investments |
|
78 |
|
|
|
78 |
|
EBITDAre |
|
1,465 |
|
|
|
1,535 |
|
Adjusted
EBITDAre |
$ |
1,465 |
|
|
$ |
1,535 |
|
|
|
|
|
|
|
|
|
|
Full Year 2018 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
$ |
547 |
|
|
$ |
616 |
|
Less: Net income
attributable to non-controlling interests |
|
(6 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
541 |
|
|
|
609 |
|
Adjustments: |
|
|
|
|
|
|
|
Gain on
dispositions |
|
(102 |
) |
|
|
(102 |
) |
Depreciation and amortization |
|
731 |
|
|
|
731 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(28 |
) |
|
|
(28 |
) |
Pro rata
FFO of equity investments |
|
55 |
|
|
|
55 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partnerships |
|
(2 |
) |
|
|
(2 |
) |
FFO
adjustment for non-controlling interests of Host LP |
|
(7 |
) |
|
|
(7 |
) |
NAREIT
FFO |
|
1,188 |
|
|
|
1,256 |
|
Adjusted
FFO |
$ |
1,188 |
|
|
$ |
1,256 |
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares - EPS, NAREIT and Adjusted FFO |
|
740.2 |
|
|
|
740.2 |
|
Earnings per
diluted share |
$ |
0.73 |
|
|
$ |
0.82 |
|
NAREIT FFO per
diluted share |
$ |
1.60 |
|
|
$ |
1.70 |
|
Adjusted FFO
per diluted share |
$ |
1.60 |
|
|
$ |
1.70 |
|
|
|
|
|
|
|
|
|
___________
(1) The forecasts are based on the
below assumptions:
- Total comparable hotel RevPAR in constant US$ will increase
0.5% to 2.5% for the low and high end of the forecast range, which
excludes the effect of changes in foreign currency. However, the
effect of estimated changes in foreign currency has been reflected
in the forecast of net income, EBITDA, earnings per diluted share
and Adjusted FFO per diluted share.
- Comparable hotel EBITDA margins will decrease 60 basis points
or increase 20 basis points for the low and high ends of the
forecasted range, respectively.
- We expect to spend approximately $185 million to
$220 million on ROI capital expenditures and approximately
$290 million to $330 million on renewal and replacement
capital expenditures.
- The above forecast assumes the sale of the W New York will
occur during the second quarter of 2018 and the acquisition of the
three Hyatt hotels will occur at the end of the first quarter of
2018. The transactions are subject to customary and other closing
conditions which may not be satisfied and there can be no
assurances that we will be able to complete the transactions at the
prices assumed in the forecast.For a discussion of additional items
that may affect forecasted results, see the Notes to Financial
Information.
HOST HOTELS & RESORTS,
INC. |
|
Schedule of Comparable Hotel
Results |
|
for 2018 Forecasts (1) |
|
(unaudited, in millions, except hotel statistics) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2018 |
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Operating
profit margin (2) |
|
|
|
12.0 |
% |
|
|
13.0 |
% |
Comparable
hotel EBITDA margin (3) |
|
|
|
27.7 |
% |
|
|
28.5 |
% |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
547 |
|
|
$ |
616 |
|
Depreciation and amortization |
|
|
|
735 |
|
|
|
735 |
|
Interest
expense |
|
|
|
192 |
|
|
|
192 |
|
Provision
for income taxes |
|
|
|
43 |
|
|
|
44 |
|
Gain on
sale of property and corporate level income/expense |
|
|
|
(26 |
) |
|
|
(26 |
) |
Non-comparable hotel results, net (4) |
|
|
|
(184 |
) |
|
|
(191 |
) |
Comparable hotel EBITDA |
|
|
$ |
1,307 |
|
|
$ |
1,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,497 |
|
|
$ |
(403 |
) |
|
$ |
— |
|
|
$ |
3,094 |
|
Food and beverage |
|
|
1,575 |
|
|
|
(231 |
) |
|
|
— |
|
|
|
1,344 |
|
Other |
|
|
345 |
|
|
|
(73 |
) |
|
|
— |
|
|
|
272 |
|
Total revenues |
|
|
5,417 |
|
|
|
(707 |
) |
|
|
— |
|
|
|
4,710 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,926 |
|
|
|
(523 |
) |
|
|
— |
|
|
|
3,403 |
|
Depreciation |
|
|
735 |
|
|
|
— |
|
|
|
(735 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
106 |
|
|
|
— |
|
|
|
(106 |
) |
|
|
— |
|
Total expenses |
|
|
4,767 |
|
|
|
(523 |
) |
|
|
(841 |
) |
|
|
3,403 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
650 |
|
|
$ |
(184 |
) |
|
$ |
841 |
|
|
$ |
1,307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,565 |
|
|
$ |
(410 |
) |
|
$ |
— |
|
|
$ |
3,155 |
|
Food and beverage |
|
|
1,606 |
|
|
|
(235 |
) |
|
|
— |
|
|
|
1,371 |
|
Other |
|
|
348 |
|
|
|
(73 |
) |
|
|
— |
|
|
|
275 |
|
Total revenues |
|
|
5,519 |
|
|
|
(718 |
) |
|
|
— |
|
|
|
4,801 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,958 |
|
|
|
(527 |
) |
|
|
— |
|
|
|
3,431 |
|
Depreciation and amortization |
|
|
735 |
|
|
|
— |
|
|
|
(735 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
106 |
|
|
|
— |
|
|
|
(106 |
) |
|
|
— |
|
Total expenses |
|
|
4,799 |
|
|
|
(527 |
) |
|
|
(841 |
) |
|
|
3,431 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
720 |
|
|
$ |
(191 |
) |
|
$ |
841 |
|
|
$ |
1,370 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Forecast comparable hotel
results include 87 hotels that we have assumed will be classified
as comparable as of December 31, 2018. See “Comparable Hotel
Operating Statistics” in the Notes to Financial Information. No
assurances can be made as to the hotels that will be in the
comparable hotel set for 2018. Also, see the notes to the
“Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted
EBITDAre and NAREIT and Adjusted Funds From Operations per Diluted
Share for 2018 Forecasts” for other forecast assumptions and
further discussion of transactions affecting our comparable hotel
set.
(2) Operating profit margin under GAAP is calculated as
the operating profit divided by the forecast total revenues per the
condensed consolidated statements of operations. (3)
Comparable hotel EBITDA margin is calculated as the comparable
hotel EBITDA divided by the comparable hotel sales per the tables
above. (4) Non-comparable hotel results, net, includes
the following items: (i) the results of operations of our
non-comparable hotels and sold hotels, which operations are
included in our condensed consolidated statements of operations as
continuing operations, (ii) gains on insurance settlements and
business interruption proceeds, and (iii) the results of our
office spaces other non-hotel income. The following hotels are
considered non-comparable for full-year forecast:
Acquisitions:
- The Don CeSar and Beach House Suites complex
- W Hollywood
- Hyatt portfolio of three hotels under contract
Renovations:
- The Phoenician
- San Francisco Marriott Marquis
- The Ritz-Carlton, Naples
Dispositions or properties under
contract (includes forecast or actual results from January 1, 2018
through the anticipated or actual sale date):
- Key Bridge Marriott
- W New York
HOST HOTELS & RESORTS,
INC.Notes to Financial Information
FORECASTS
Our forecast of earnings per diluted share,
NAREIT and Adjusted FFO per diluted share, EBITDA, EBITDAre,
Adjusted EBITDAre and comparable hotel results are forward-looking
statements and are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors which may
cause actual results and performance to differ materially from
those expressed or implied by these forecasts. Although we believe
the expectations reflected in the forecasts are based upon
reasonable assumptions, we can give no assurance that the
expectations will be attained or that the results will not be
materially different. Risks that may affect these assumptions and
forecasts include the following: potential changes in overall
economic outlook make it inherently difficult to forecast the level
of RevPAR and margin growth; the amount and timing of acquisitions
and dispositions of hotel properties is an estimate that can
substantially affect financial results, including such items as net
income, depreciation and gains on dispositions; the level of
capital expenditures may change significantly, which will directly
affect the level of depreciation expense and net income; the amount
and timing of debt payments may change significantly based on
market conditions, which will directly affect the level of interest
expense and net income; the amount and timing of transactions
involving shares of our common stock may change based on market
conditions; and other risks and uncertainties associated with our
business described herein and in our annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K
filed with the SEC.
COMPARABLE HOTEL OPERATING
STATISTICS
To facilitate a quarter-to-quarter comparison of
our operations, we present certain operating statistics (i.e.,
RevPAR, average daily rate and average occupancy) and operating
results (revenues, expenses, hotel EBITDA and associated margins)
for the periods included in this report on a comparable hotel
basis.
Because these statistics and operating results
relate only to our hotel properties, they exclude results for our
non-hotel properties and other real estate investments. We define
our comparable hotels as properties:
(i) that are owned or leased by us and the
operations of which are included in our consolidated results for
the entirety of the reporting periods being compared;
and(ii) that have not sustained substantial property damage or
business interruption, or undergone large-scale capital projects
(as further defined below) during the reporting periods being
compared.
The hotel business is capital-intensive and
renovations are a regular part of the business. Generally, hotels
under renovation remain comparable hotels. A large scale capital
project that would cause a hotel to be excluded from our comparable
hotel set is an extensive renovation of several core aspects of the
hotel, such as rooms, meeting space, lobby, bars, restaurants and
other public spaces. Both quantitative and qualitative factors are
taken into consideration in determining if the renovation would
cause a hotel to be removed from the comparable hotel set,
including unusual or exceptional circumstances such as: a reduction
or increase in room count, rebranding, a significant alteration of
the business operations, or the closing of the hotel during the
renovation.
We do not include an acquired hotel in our
comparable hotel set until the operating results for that hotel
have been included in our consolidated results for one full
calendar year. For example, we acquired The Don CeSar in February
2017. The hotel will not be included in our comparable hotels until
January 1, 2019. Hotels that we sell are excluded from the
comparable hotel set once the transaction has closed. Similarly,
hotels are excluded from our comparable hotel set from the date
that they sustain substantial property damage or business
interruption or commence a large-scale capital project. In each
case, these hotels are returned to the comparable hotel set when
the operations of the hotel have been included in our consolidated
results for one full calendar year after completion of the repair
of the property damage or cessation of the business interruption,
or the completion of large-scale capital projects, as
applicable.
Of the 94 hotels that we owned on
December 31, 2017, 87 have been classified as comparable
hotels. The operating results of the following hotels that we owned
as of December 31, 2017 are excluded from comparable hotel
results for these periods:
- Denver Marriott Tech Center, removed in the first quarter of
2016 (business disruption due to extensive renovations, including
conversion of 64 rooms to 41 suites, conversion of the concierge
lounge into three meeting rooms, and the repositioning of the
public space and food and beverage areas);
- Hyatt Regency San Francisco Airport, removed in the first
quarter of 2016 (business disruption due to extensive renovations,
including all guestrooms and bathrooms, meeting space, the
repositioning of the atrium into a new restaurant and lounge, and
conversion of the existing restaurant to additional meeting
space);
- Marriott Marquis San Diego Marina, removed in the first quarter
of 2015 (business interruption due to the demolition of the
existing conference center and construction of the new exhibit
hall);
- The Phoenician (acquired in June 2015 and, beginning in the
second quarter of 2016, business disruption due to extensive
renovations, including all guestrooms and suites, a redesign of the
lobby and public areas, renovation of pools, recreation areas and a
restaurant and a re-configured spa and fitness center);
- Axiom Hotel (acquired as the Powell Hotel in January 2014, then
closed during 2015 for extensive renovations and reopened in
January 2016);
- The Don CeSar and Beach House Suites complex (acquired in
February 2017); and
- W Hollywood (acquired in March 2017).
The operating results of 14 hotels disposed of
in 2017 and 2016 are not included in comparable hotel results for
the periods presented herein. These operations are also excluded
from the hotel operating data for all owned hotels on pages 9 and
10. None of our hotels have been excluded from our comparable hotel
results due to Hurricanes Harvey or Irma.
Operating statistics for the non-comparable
hotels listed above are included in the hotel operating data for
all owned hotels. By definition, the RevPAR results for these
properties are not comparable due to the reasons listed above, and,
therefore, are not indicative of the overall trends for our
portfolio. The operating results for the two hotels acquired in
2017 are included in the all owned hotel operating data on a pro
forma basis, which includes operating results assuming the hotels
were owned as of January 1, 2016 and based on actual results
obtained from the manager for periods prior to our ownership. For
these hotels, since the year-over-year comparison includes periods
prior to our ownership, the changes will not necessarily correspond
to changes in our actual results. All owned hotel operating
statistics are provided for completeness and to show the difference
between our comparable hotel information (upon which we usually
evaluate performance) and all of our hotels, including
non-comparable hotels. Also, while they may not be illustrative of
trends (as compared to comparable hotel operating statistics),
changes in all owned hotel statistics will have an effect on our
overall revenues.
CONSTANT US$ AND
NOMINAL US$
Operating results denominated in foreign
currencies are translated using the prevailing exchange rates on
the date of the transaction, or monthly based on the weighted
average exchange rate for the period. For comparative purposes, we
also present the RevPAR results for the prior year assuming the
results for our foreign operations were translated using the same
exchange rates that were effective for the comparable periods in
the current year, thereby eliminating the effect of currency
fluctuation for the year-over-year comparisons. For the full year
forecast results, we use the applicable forward currency curve (as
published by Bloomberg L.P.) for each monthly period to estimate
forecast foreign operations in U.S. dollars and have restated the
prior year RevPAR results using the same forecast exchange rates to
estimate year-over-year growth in RevPAR in constant US$. We
believe this presentation is useful to investors as it shows growth
in RevPAR in the local currency of the hotel consistent with how we
would evaluate our domestic portfolio. However, the estimated
effect of changes in foreign currency has been reflected in the
actual and forecast results of net income, EBITDA, Adjusted
EBITDAre, earnings per diluted share and Adjusted FFO per diluted
share. Nominal US$ results include the effect of currency
fluctuations, consistent with our financial statement
presentation.
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) Comparable
Hotel Property Level Operating 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. NAREIT defines FFO as net income (calculated in
accordance with GAAP) excluding gains and losses from sales of real
estate, the cumulative effect of changes in accounting principles,
real estate-related depreciation, amortization and impairments and
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect our pro rata share of the FFO of those
entities on the same basis.
We believe that NAREIT FFO per diluted share is
a useful supplemental measure of our operating performance and that
the presentation of NAREIT FFO per diluted share, when combined
with the primary GAAP presentation of earnings per share, provides
beneficial information to investors. By excluding the effect of
real estate depreciation, amortization, impairments and gains and
losses from sales of depreciable real estate, all of which are
based on historical cost accounting and which may be of lesser
significance in evaluating current performance, we believe that
such measures can facilitate comparisons of operating performance
between periods and with other REITs, even though NAREIT FFO per
diluted share does not represent an amount that accrues directly to
holders of our common stock. Historical cost accounting for real
estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. As noted by NAREIT in its
April 2002 “White Paper on Funds From Operations,” since real
estate values have historically risen or fallen with market
conditions, many industry investors have considered presentation of
operating results for real estate companies that use historical
cost accounting to be insufficient by themselves. For these
reasons, NAREIT adopted the FFO metric in order to promote an
industry-wide measure of REIT operating performance.
Adjusted FFO per Diluted Share
We also present Adjusted FFO per diluted share
when evaluating our performance because management believes that
the exclusion of certain additional items described below provides
useful supplemental information to investors regarding our ongoing
operating performance. Management historically has made the
adjustments detailed below in evaluating our performance, in our
annual budget process and for our compensation programs. We believe
that the presentation of Adjusted FFO per diluted share, when
combined with both the primary GAAP presentation of earnings per
share and FFO per diluted share as defined by NAREIT, provides
useful supplemental information that is beneficial to an investor’s
understanding of our operating performance. We adjust NAREIT FFO
per diluted share for the following items, which may occur in any
period, and refer to this measure as Adjusted FFO per diluted
share:
- Gains and Losses on the Extinguishment of Debt – We exclude the
effect of finance charges and premiums associated with the
extinguishment of debt, including the acceleration of the write-off
of deferred financing costs associated with the original issuance
of the debt being redeemed or retired and incremental interest
expense incurred during the refinancing period. We also exclude the
gains on debt repurchases and the original issuance costs
associated with the retirement of preferred stock. We believe that
these items are not reflective of our ongoing finance costs.
- Acquisition Costs – Under GAAP, costs associated with completed
property acquisitions are expensed in the year incurred. We exclude
the effect of these costs because we believe they are not
reflective of the ongoing performance of the Company.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business. We believe that
including these items is not consistent with our ongoing operating
performance.
In unusual circumstances, we may also adjust
NAREIT FFO for gains or losses that management believes are not
representative of the Company’s current operating performance. As a
result of the reduction of corporate income tax rates from 35% to
21% caused 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 the deferred tax assets and increase the
provision for income taxes by approximately $11 million.
Additionally, similar corporate income tax rate reductions affected
our European Joint Venture, causing the remeasurement of the net
deferred tax assets and liabilities in France and Belgium,
resulting in a net tax benefit to us of $5 million. We do not
consider these adjustments to be reflective of our on-going
operating performance and therefore have excluded these items from
Adjusted FFO. The last such adjustment prior to this was a 2013
exclusion of a gain from an eminent domain claim.
EBITDA
Earnings before Interest Expense, Income Taxes,
Depreciation and Amortization (“EBITDA”) is a commonly used measure
of performance in many industries. Management believes EBITDA
provides useful information to investors regarding our results of
operations because it helps us and our investors evaluate the
ongoing operating performance of our properties after removing the
impact of the Company’s capital structure (primarily interest
expense) and its asset base (primarily depreciation and
amortization). Management also believes the use of EBITDA
facilitates comparisons between us and other lodging REITs, hotel
owners who are not REITs and other capital-intensive companies.
Management uses EBITDA to evaluate property-level results and as
one measure in determining the value of acquisitions and
dispositions and, like FFO and Adjusted FFO per diluted share, is
widely used by management in the annual budget process and for our
compensation programs.
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 write-downs 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.
- Cumulative Effect of a Change in Accounting Principle –
Infrequently, the Financial Accounting Standards Board promulgates
new accounting standards that require the consolidated statements
of operations to reflect the cumulative effect of a change in
accounting principle. We exclude these one-time adjustments because
they do not reflect our actual performance for that period.
- Acquisition Costs – Under GAAP, costs associated with completed
property acquisitions are expensed in the year incurred. We exclude
the effect of these costs because we believe they are not
reflective of the ongoing performance of the Company.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business. We believe that
including these items is not consistent with our ongoing operating
performance.
In unusual circumstances, we also may adjust
EBITDAre for gains or losses that management believes are not
representative of the Company’s current operating performance.
In the past, we presented Adjusted EBITDA as a
supplemental measure of our performance. That metric is calculated
in a similar manner as Adjusted EBITDAre presented here, with the
exception of the adjustment for non-controlling partners’ pro rata
share of Adjusted EBITDA, which totaled $11 million in 2016. The
rationale for including 100% of EBITDAre for consolidated
affiliates with non-controlling interests is that the full amount
of any debt of these affiliates is reported in our consolidated
balance sheet and therefore metrics using total debt to EBITDAre
provide a better understanding of the Company’s leverage. This is
also consistent with NAREIT’s definition of EBITDAre.
Limitations on the Use of NAREIT FFO per Diluted
Share, Adjusted FFO per Diluted Share, EBITDA, EBITDAre and
Adjusted EBITDAre
We calculate NAREIT FFO per diluted share in
accordance with standards established by NAREIT, which may not be
comparable to measures calculated by other companies who do not use
the NAREIT definition of FFO or do not calculate FFO per diluted
share in accordance with NAREIT guidance. In addition, although FFO
per diluted share is a useful measure when comparing our results to
other REITs, it may not be helpful to investors when comparing us
to non-REITs. We also calculate Adjusted FFO per diluted share,
which is not in accordance with NAREIT guidance and may not be
comparable to measures calculated by other REITs. EBITDA, EBITDAre
and Adjusted EBITDAre, as presented, may also not be comparable to
measures calculated by other companies. This information should not
be considered as an alternative to net income, operating profit,
cash from operations or any other operating performance measure
calculated in accordance with GAAP. Cash expenditures for various
long-term assets (such as renewal and replacement capital
expenditures), interest expense (for EBITDA, EBITDAre and Adjusted
EBITDAre purposes only) 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 statement of operations
and cash flows include interest expense, capital expenditures, and
other excluded items, all of which should be considered when
evaluating our performance, as well as the usefulness of our
non-GAAP financial measures. Additionally, NAREIT FFO per diluted
share, Adjusted FFO per diluted share, EBITDA, 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
seven domestic and international partnerships that own a total of
21 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
interests ranging from 15% to 48% held by outside partners in two
partnerships each owning one hotel for which we do control the
entity and, therefore, consolidate its operations. These pro rata
results for 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.
Comparable Hotel Property Level Operating
Results
We present certain operating results for our
hotels, such as hotel revenues, expenses, food and beverage profit,
and EBITDA (and the related margins), on a comparable hotel, or
“same store,” basis as supplemental information for investors. Our
comparable hotel results present operating results for hotels owned
during the entirety of the periods being compared without giving
effect to any acquisitions or dispositions, significant property
damage or large scale capital improvements incurred during these
periods. We present comparable hotel EBITDA to help us and our
investors evaluate the ongoing operating performance of our
comparable properties after removing the impact of the Company’s
capital structure (primarily interest expense), and its asset base
(primarily depreciation and amortization). Corporate-level costs
and expenses are also removed to arrive at property-level
results. We believe these property-level results provide
investors with supplemental information into the ongoing operating
performance of our comparable hotels. Comparable hotel results are
presented both by location and for the Company’s comparable
properties in the aggregate. We eliminate depreciation and
amortization because, even though depreciation and amortization are
property-level expenses, these non-cash expenses, which are based
on historical cost accounting for real estate assets, implicitly
assume that the value of real estate assets diminishes predictably
over time. As noted earlier, because real estate values have
historically risen or fallen with market conditions, many real
estate industry investors have considered presentation of
historical cost accounting for operating results to be insufficient
by themselves.
As a result of the elimination of
corporate-level costs and expenses and depreciation and
amortization, the comparable hotel operating results we present do
not represent our total revenues, expenses, operating profit or net
income and should not be used to evaluate our performance as a
whole. Management compensates for these limitations by separately
considering the impact of these excluded items to the extent they
are material to operating decisions or assessments of our operating
performance. Our consolidated statements of operations include such
amounts, all of which should be considered by investors when
evaluating our performance.
We present these hotel operating results on a
comparable hotel basis because we believe that doing so provides
investors and management with useful information for evaluating the
period-to-period performance of our hotels and facilitates
comparisons with other hotel REITs and hotel owners. In particular,
these measures assist management and investors in distinguishing
whether increases or decreases in revenues and/or expenses are due
to growth or decline of operations at comparable hotels (which
represent the vast majority of our portfolio) or from other
factors, such as the effect of acquisitions or dispositions. While
management believes that presentation of comparable hotel results
is a “same store” supplemental measure that provides useful
information in evaluating our ongoing performance, this measure is
not used to allocate resources or to assess the operating
performance of each of these hotels, as these decisions are based
on data for individual hotels and are not based on comparable hotel
results. For these reasons, we believe that comparable hotel
operating results, when combined with the presentation of GAAP
operating profit, revenues and expenses, provide useful information
to investors and management.
Michael D. Bluhm, Chief Financial Officer240.744.5110
Bret D.S. McLeod, Senior Vice President240.744.5216
Gee Lingberg, Vice President240.744.5275
Host Hotels and Resorts (NYSE:HST)
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