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 second quarter of
2019.
Operating Results 1(unaudited,
in millions, except per share and hotel statistics)
|
Quarter ended June 30, |
|
|
Percent |
|
|
Year-to-date ended June 30, |
|
|
Percent |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
Revenues |
$ |
1,483 |
|
|
$ |
1,518 |
|
|
|
(2.3 |
)% |
|
$ |
2,873 |
|
|
$ |
2,864 |
|
|
|
0.3 |
% |
Comparable hotel revenues
(1) |
|
1,273 |
|
|
|
1,272 |
|
|
|
— |
|
|
|
2,410 |
|
|
|
2,407 |
|
|
|
0.1 |
% |
Net income |
|
290 |
|
|
|
211 |
|
|
|
37.4 |
% |
|
|
479 |
|
|
|
467 |
|
|
|
2.6 |
% |
EBITDAre and Adjusted EBITDAre
(1) |
|
460 |
|
|
|
476 |
|
|
|
(3.4 |
)% |
|
|
867 |
|
|
|
846 |
|
|
|
2.5 |
% |
Comparable hotel Total RevPAR
- Constant US$ |
|
305.04 |
|
|
|
304.68 |
|
|
|
0.1 |
% |
|
|
290.47 |
|
|
|
289.78 |
|
|
|
0.2 |
% |
Comparable hotel RevPAR -
Constant US$ |
|
193.37 |
|
|
|
196.24 |
|
|
|
(1.5 |
)% |
|
|
182.33 |
|
|
|
184.59 |
|
|
|
(1.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common
share. |
|
0.39 |
|
|
|
0.28 |
|
|
|
39.3 |
% |
|
|
0.64 |
|
|
|
0.62 |
|
|
|
3.2 |
% |
NAREIT FFO and Adjusted FFO
per diluted share (1) |
|
0.53 |
|
|
|
0.54 |
|
|
|
(1.9 |
)% |
|
|
1.01 |
|
|
|
0.97 |
|
|
|
4.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Additional detail on the Company’s results,
including data for 22 domestic markets and top 40 hotels by RevPAR,
is available in the Second Quarter 2019 Supplemental Financial
Information available on the Company’s website at
www.hosthotels.com.
Highlights
- Comparable hotel Total RevPAR improved 0.1% for the quarter and
0.2% year-to-date, on a constant dollar basis. Total RevPAR is a
key performance metric for the Company’s luxury and upper upscale
portfolio as approximately 35% of revenues are earned from food and
beverage, conference and meeting space, spa and other
amenities.
- The Company repurchased 10.9 million shares of stock totaling
$200 million during the quarter. On August 5, 2019, the Board of
Directors authorized an increase in its share repurchase program
from $500 million to $1 billion, which, after taking into account
the second quarter repurchases, leaves $800 million available for
repurchases.
- The Company executed on its strategy to refine its portfolio by
disposing of three non-core assets during the quarter for
$118 million and has sold or expects to sell in the third
quarter, subject to customary closing conditions, an additional
eight assets.
- The Company has taken advantage of current market conditions
and further strengthened its balance sheet by increasing the
capacity of its revolving credit and term loan facility from $2
billion to $2.5 billion. The Company extended the
maturity for both the revolver and the term loans to 2025
(including extension options) and, based on current debt ratings,
the initial interest rate has been reduced by 10 basis points.
_______________________
(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. |
James F. Risoleo, President and Chief Executive
Officer, said, “I am pleased with our continued successful
execution of our disciplined capital allocation
strategy. During the quarter, we bought back $200 million of
common stock and are opportunistically taking advantage of the
current market conditions to divest of low RevPAR, high capital
expenditure non-core assets amid a robust transaction
market. Year-to-date, we completed six asset sales for $570
million and just announced that we have an additional six assets
under contract for sale. We intend to continue to focus on
advancing our long-term strategic vision of owning iconic and
irreplaceable properties with high RevPAR and limited near-term
capex needs in key markets with strong demand generators ensuring
that the Company is well positioned for continued growth.”
Operating Performance
GAAP Metrics
- Total revenues decreased 2.3% for the quarter, primarily from
the net effect of acquisitions and dispositions, which led to a $30
million reduction in revenues. Year-to-date, total revenues
increased 0.3%, reflecting an $8 million increase in revenues from
the net effect of acquisitions and dispositions. On a comparable
hotel basis, total revenues increased slightly for the quarter and
year-to-date.
- GAAP operating profit margin increased 160 basis points for the
quarter and 210 basis points year-to-date due to items that
affected comparable margins discussed below, in addition to a
decrease in corporate expenses and impairment expense that had been
recorded in 2018.
- Net income increased by $79 million, to $290 million,
for the quarter, reflecting the improvement in operating profit and
an increase in gain on sale of assets. Year-to-date, net income
increased $12 million, to $479 million, primarily due to
the improvement in operating profit and partially offset by a
decrease in gain on sale of assets.
- Diluted earnings per common share increased 39.3% and 3.2% for
the quarter and year-to-date, respectively.
Other Metrics
- Comparable hotel Total RevPAR on a constant dollar basis
increased 0.1% and 0.2% for the quarter and year-to-date,
respectively, due to increases in food and beverage and other
revenues.
- Comparable RevPAR on a constant dollar basis declined 1.5% for
the quarter, driven by a 140 basis point decrease in occupancy,
partially offset by a 0.3% increase in average room rate.
Year-to-date, comparable RevPAR on a constant dollar basis declined
1.2% due to a 160 basis point decrease in occupancy, partially
offset by a 0.8% increase in average room rate. The decline in
RevPAR includes an estimated 90 basis point decrease for the
quarter and 75 basis point decrease year-to-date for the comparable
hotels for the renovation disruption related to the Marriott
transformational capital program.
- Comparable hotel EBITDA decreased by $3 million, or 0.6%, for
the quarter and increased by $5 million, or 0.6%,
year-to-date.
- Comparable hotel EBITDA margins declined 20 basis points for
the quarter and improved 15 basis points year-to-date. The
relatively stable margin performance reflects the overall decline
in occupancy and RevPAR, offset by several factors, including:
- an increase in average room rates;
- an increase in ancillary revenues;
- benefits from synergies of the Marriott International merger
with Starwood Hotels; and
- the receipt of operating profit guarantees provided by Marriott
related to transformational capital projects.
- Adjusted EBITDAre decreased $16 million, or 3.4%, for the
quarter and increased $21 million, or 2.5%, year-to-date. The
change in Adjusted EBITDAre reflects the change in total revenues
and the net effect of operations of properties acquired or disposed
of in 2018 and 2019, which reduced Adjusted EBITDAre for the
quarter by $4 million and increased it by $17 million year-to-date.
The total change in Adjusted EBITDAre includes a decrease of $17
million for the quarter and $23 million year-to-date due to the
sale of the Company’s interest in the European Joint Venture in
December 2018.
- Adjusted FFO per diluted share decreased 1.9% for the quarter
and increased 4.1% year-to-date.
Dispositions
During the second quarter, the Company sold the
Newport Beach Marriott Bayview, The Westin Mission Hills Golf
Resort & Spa and the leasehold interest in the Washington
Dulles Airport Marriott for $118 million. In addition, the Company
sold the Courtyard Chicago Downtown/River North and Residence Inn
Arlington Pentagon City subsequent to quarter end for
$150 million. The Company is in active negotiations concerning
the sale of additional properties, including the following six
properties which the Company expects to close shortly: Scottsdale
Marriott Suites Old Town, Scottsdale Marriott at McDowell
Mountains, Costa Mesa Marriott, Atlanta Marriott Suites Midtown,
The Westin Indianapolis and Chicago Marriott Suites
O’Hare.2
_______________________
(2) |
The sales of these properties are subject to customary closing
conditions. There can be no assurances that the Company will
complete the transactions. |
Capital Allocation
During the quarter, the Company invested
approximately $130 million in capital expenditures, of which
$70 million were return on investment (“ROI”) capital
expenditures and $60 million were on renewal and replacement
projects. Year-to-date, the Company has invested approximately $240
million in capital expenditures, of which $122 million were
return on investment (“ROI”) capital expenditures and
$118 million were on renewal and replacement projects.
For 2019, the Company expects capital
expenditures of between $550 million and $610 million. This
comprises between $315 million and $345 million in ROI
projects and between $235 million and $265 million in renewal
and replacement projects. The ROI projects include approximately
$225 million that are part of the previously announced
transformational capital program with Marriott International.
Share Repurchase Program and
Dividends
During the second quarter, the Company
repurchased 10.9 million shares at an average price of $18.32 per
share through its common share repurchase program for a total of
$200 million. Under the share repurchase program, the common stock
may be purchased from time to time, depending upon market
conditions. Subsequent to quarter end, the Company purchased an
additional 1.8 million shares at an average price of $16.85 per
share for a total of $30 million, pursuant to the Company’s trading
plan designed to comply with Rule 10b5-1 under the Securities
Exchange Act.
The Company paid a regular quarterly cash
dividend of $0.20 per share on its common stock on July 15, 2019 to
stockholders of record as of June 28, 2019. All future dividends,
including any special dividends, are subject to approval by the
Company’s Board of Directors.
Balance Sheet
At June 30, 2019, the Company had
approximately $1,107 million of unrestricted cash, not
including $203 million in the FF&E escrow reserves. Total
debt was $3.9 billion, with an average maturity of 3.7 years
and an average interest rate of 4.3%. Effective August 1, 2019, the
Company closed on an amended and restated credit agreement. As part
of the refinancing, the revolver was upsized from $1 billion to
$1.5 billion and borrowing costs were reduced across the entire
facility. The maturities for the revolver and $1 billion of term
loans were extended to January 2025, including all extension
options, which are subject to certain conditions. Taking the
recast into account, the Company extended its weighted average debt
maturity to 4.6 years, eliminated material debt maturities until
2021, and increased the current available capacity under the
revolver from $943 to $1,443 million. The Company’s proforma debt
maturity schedule will remain balanced with no more than 6.1% of
its debt, as a percent of total market capitalization, maturing in
any given year.
“We are very pleased to announce that we have
expanded our credit facility, providing us with more dry powder and
flexibility in any stage of the lodging cycle,” said Michael Bluhm,
Chief Financial Officer. “The increased capacity and extended
maturities, combined with our cash on hand, allow us to be
opportunistic and disciplined in our capital allocation. The
transaction also highlights our commitment to maintaining an
excellent balance sheet by increasing liquidity, extending
maturities and lowering borrowing costs.”
2019 Outlook
For 2019, the Company’s forecast has been
adjusted for the sale or anticipated sale of eight properties in
the third quarter, which has decreased forecast net income and
Adjusted EBITDAre by approximately $11 million and $21 million,
respectively, and diluted earnings per share and Adjusted FFO per
diluted share by $.02 and $.03, respectively. The range provided
for comparable hotel RevPAR guidance reflects an estimated 50 basis
points of disruption impact from the incremental capital
expenditures associated with the Marriott transformational capital
program. However, the estimated effect to earnings caused by these
expenditures is offset by the operating profit guarantees provided
by Marriott. The Company expects to receive $23 million of
operating profit guarantees in 2019, of which $10 million is
included in comparable hotel EBITDA, to offset the disruption to
operations caused by the incremental spend on those properties. The
Company estimates its 2019 operating results as compared to the
prior year will change in the following range:
|
|
Previous Full Year 2019 Guidance |
|
Current Full Year 2019 Guidance |
|
Change in Full Year 2019 Guidance to the Mid-Point |
Total comparable hotel RevPAR
- Constant US$(1) |
|
0.0% to 2.0% |
|
(1.0)% to 0.0% |
|
(150) bps |
Total revenues under GAAP |
|
0.1% to 2.1% |
|
(1.5)% to (0.5)% |
|
(210) bps |
Operating profit margin under
GAAP |
|
460 bps to 550 bps |
|
470 bps to 530 bps |
|
(5) bps |
Comparable hotel EBITDA
margins(2) |
|
(25) bps to 35 bps |
|
(25) bps to 25 bps |
|
(5) bps |
__________(1) Forecast comparable hotel
results include 74 hotels that are assumed will be classified as
comparable as of December 31, 2019. See the 2019 Forecast
Schedules for a listing of hotels excluded from the full year 2019
comparable hotel set.(2) At the 0.0% high end of the RevPAR
guidance, the improvement in comparable hotel EBITDA margin is 50
basis points higher compared to the previous guidance.
Based upon the above parameters, the Company
estimates its 2019 guidance as follows:
|
|
Previous Full Year 2019 Guidance |
|
Current Full Year 2019 Guidance |
|
Change in Full Year 2019 Guidance to the Mid-Point |
Net income (in millions) |
|
$619 to $683 |
|
$956 to $993 |
|
$323.5 |
Adjusted EBITDAre (in
millions) |
|
$1,535 to $1,600 |
|
$1,500 to $1,540 |
|
$(47.5) |
Diluted earnings per common
share |
|
$.82 to $.91 |
|
$1.28 to $1.33 |
|
$.44 |
NAREIT FFO per diluted
share |
|
$1.76 to $1.84 |
|
$1.73 to $1.78 |
|
$(.05) |
Adjusted FFO per diluted
share |
|
$1.76 to $1.84 |
|
$1.73 to $1.78 |
|
$(.05) |
See the 2019 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 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 83 properties in
the United States and five properties internationally totaling
approximately 50,000 rooms. The Company also holds non-controlling
interests in six domestic and one international joint ventures.
Guided by a disciplined approach to capital allocation and
aggressive asset management, the Company partners with premium
brands such as Marriott®, Ritz-Carlton®, Westin®, Sheraton®, W®,
St. Regis®, The Luxury Collection®, Hyatt®, Fairmont®, Hilton®,
Swissôtel®, ibis® and Novotel®, as well as independent brands in
the operation of properties in over 50 major markets. For
additional information, please visit the Company’s website at
www.hosthotels.com.
Note: This press release contains
forward-looking statements within the meaning of federal securities
regulations. These forward-looking statements include forecast
results and are identified by their use of terms and phrases such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “should,” “plan,” “predict,” “project,” “will,”
“continue” and other similar terms and phrases, including
references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause the actual results to differ materially
from those anticipated at the time the forward-looking statements
are made. These risks include, but are not limited to: changes in
national and local economic and business conditions and other
factors such as natural disasters, pandemics and weather that will
affect occupancy rates at our hotels and the demand for hotel
products and services; the impact of geopolitical developments
outside the U.S. on lodging demand; volatility in global financial
and credit markets; operating risks associated with the hotel
business; risks and limitations in our operating flexibility
associated with the level of our indebtedness and our ability to
meet covenants in our debt agreements; risks associated with our
relationships with property managers and joint venture partners;
our ability to maintain our properties in a first-class manner,
including meeting capital expenditure requirements; the effects of
hotel renovations on our hotel occupancy and financial results; our
ability to compete effectively in areas such as access, location,
quality of accommodations and room rate structures; risks
associated with our ability to complete acquisitions and
dispositions and develop new properties and the risks that
acquisitions and new developments may not perform in accordance
with our expectations; our ability to continue to satisfy complex
rules in order for us to remain a REIT for federal income tax
purposes; risks associated with our ability to effectuate our
dividend policy, including factors such as operating results and
the economic outlook influencing our board’s decision whether to
pay further dividends at levels previously disclosed or to use
available cash to make special dividends; and other risks and
uncertainties associated with our business described in the
Company’s annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K filed with the SEC. Although
the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that the expectations will be attained or
that any deviation will not be material. All information in this
release is as of August 6, 2019, and the Company undertakes no
obligation to update any forward-looking statement to conform the
statement to actual results or changes in the Company’s
expectations.
* This press release contains registered
trademarks that are the exclusive property of their respective
owners. None of the owners of these trademarks has any
responsibility or liability for any information contained in this
press release.
*** Tables to Follow ***
Host Hotels & Resorts, Inc., herein
referred to as “we” or “Host Inc.,” is a self-managed and
self-administered real estate investment trust that owns hotel
properties. We conduct our operations as an umbrella partnership
REIT through an operating partnership, Host Hotels &
Resorts, L.P. (“Host LP”), of which we are the sole general
partner. When distinguishing between Host Inc. and Host LP, the
primary difference is approximately 1% of the partnership interests
in Host LP held by outside partners as of June 30, 2019, 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 (unaudited, in millions,
except shares and per share amounts) |
|
|
|
June 30, 2019 |
|
|
December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
Property and equipment, net |
|
$ |
10,000 |
|
|
$ |
9,760 |
|
Right-of-use assets(1) |
|
|
590 |
|
|
|
— |
|
Assets held for sale |
|
|
272 |
|
|
|
281 |
|
Due from managers |
|
|
163 |
|
|
|
71 |
|
Advances to and investments in affiliates |
|
|
53 |
|
|
|
48 |
|
Furniture, fixtures and equipment replacement fund |
|
|
203 |
|
|
|
213 |
|
Other |
|
|
137 |
|
|
|
175 |
|
Cash and cash equivalents |
|
|
1,107 |
|
|
|
1,542 |
|
Total assets |
|
$ |
12,525 |
|
|
$ |
12,090 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
NON-CONTROLLING INTERESTS AND EQUITY |
|
Debt (2) |
|
|
|
|
|
|
|
|
Senior notes |
|
$ |
2,783 |
|
|
$ |
2,782 |
|
Credit facility, including the term loans of $998 |
|
|
1,052 |
|
|
|
1,049 |
|
Other debt |
|
|
29 |
|
|
|
6 |
|
Total debt |
|
|
3,864 |
|
|
|
3,837 |
|
Lease liabilities(1) |
|
|
599 |
|
|
|
— |
|
Accounts payable and accrued expenses |
|
|
248 |
|
|
|
293 |
|
Liabilities held for sale |
|
|
13 |
|
|
|
— |
|
Other |
|
|
186 |
|
|
|
266 |
|
Total liabilities |
|
|
4,910 |
|
|
|
4,396 |
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interests - Host Hotels &
Resorts, L.P |
|
|
141 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
|
Host Hotels & Resorts, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, par value $.01, 1,050 million shares
authorized, 730.0 million shares and 740.4 million shares
issued and outstanding, respectively |
|
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
|
7,948 |
|
|
|
8,156 |
|
Accumulated other comprehensive loss |
|
|
(56 |
) |
|
|
(59 |
) |
Deficit |
|
|
(432 |
) |
|
|
(610 |
) |
Total equity of Host Hotels & Resorts, Inc. stockholders |
|
|
7,467 |
|
|
|
7,494 |
|
Non-redeemable non-controlling interests—other consolidated
partnerships |
|
|
7 |
|
|
|
72 |
|
Total equity |
|
|
7,474 |
|
|
|
7,566 |
|
Total liabilities, non-controlling interests and equity |
|
$ |
12,525 |
|
|
$ |
12,090 |
|
___________ |
|
|
|
|
|
|
|
|
(1) On January 1, 2019, we adopted
Accounting Standard Update No. 2016-02, Leases (Topic 842), as
amended. The new standard requires that all leases, including
operating leases, be recognized as lease assets and lease
liabilities on the balance sheet. As a result, we have recognized
right of use assets of $590 million and lease liabilities of $599
million as of June 30, 2019. The adoption did not affect our
statement of operations.(2) Please see our Second Quarter
2019 Supplemental Financial Information for more detail on our debt
balances.
|
HOST HOTELS & RESORTS, INC.Condensed
Consolidated Statements of Operations (unaudited, in
millions, except per share amounts) |
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
931 |
|
|
$ |
973 |
|
|
$ |
1,788 |
|
|
$ |
1,817 |
|
Food and beverage |
|
|
449 |
|
|
|
449 |
|
|
|
882 |
|
|
|
862 |
|
Other |
|
|
103 |
|
|
|
96 |
|
|
|
203 |
|
|
|
185 |
|
Total revenues |
|
|
1,483 |
|
|
|
1,518 |
|
|
|
2,873 |
|
|
|
2,864 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
226 |
|
|
|
238 |
|
|
|
443 |
|
|
|
462 |
|
Food and beverage |
|
|
290 |
|
|
|
290 |
|
|
|
575 |
|
|
|
568 |
|
Other departmental and support expenses |
|
|
334 |
|
|
|
336 |
|
|
|
661 |
|
|
|
651 |
|
Management fees |
|
|
71 |
|
|
|
73 |
|
|
|
125 |
|
|
|
127 |
|
Other property-level expenses |
|
|
91 |
|
|
|
99 |
|
|
|
183 |
|
|
|
197 |
|
Depreciation and amortization |
|
|
166 |
|
|
|
189 |
|
|
|
336 |
|
|
|
367 |
|
Corporate and other expenses(1) |
|
|
25 |
|
|
|
30 |
|
|
|
54 |
|
|
|
58 |
|
Total operating costs and expenses |
|
|
1,203 |
|
|
|
1,255 |
|
|
|
2,377 |
|
|
|
2,430 |
|
Operating profit |
|
|
280 |
|
|
|
263 |
|
|
|
496 |
|
|
|
434 |
|
Interest income |
|
|
7 |
|
|
|
2 |
|
|
|
15 |
|
|
|
5 |
|
Interest expense |
|
|
(43 |
) |
|
|
(45 |
) |
|
|
(86 |
) |
|
|
(89 |
) |
Gain on sale of assets |
|
|
57 |
|
|
|
— |
|
|
|
62 |
|
|
|
120 |
|
Gain (loss) on foreign currency transactions and
derivatives |
|
|
1 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
Equity in earnings of affiliates |
|
|
4 |
|
|
|
9 |
|
|
|
9 |
|
|
|
19 |
|
Income before income taxes |
|
|
306 |
|
|
|
228 |
|
|
|
497 |
|
|
|
488 |
|
Provision for income taxes |
|
|
(16 |
) |
|
|
(17 |
) |
|
|
(18 |
) |
|
|
(21 |
) |
Net income |
|
|
290 |
|
|
|
211 |
|
|
|
479 |
|
|
|
467 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(5 |
) |
Net income attributable to Host Inc |
|
$ |
286 |
|
|
$ |
209 |
|
|
$ |
472 |
|
|
$ |
462 |
|
Basic and
diluted
earnings per common share |
|
$ |
.39 |
|
|
$ |
.28 |
|
|
$ |
.64 |
|
|
$ |
.62 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate and other expenses
include the following items:
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
General and administrative costs |
|
$ |
22 |
|
|
$ |
26 |
|
|
$ |
47 |
|
|
$ |
51 |
|
Non-cash stock-based
compensation expense |
|
|
3 |
|
|
|
4 |
|
|
|
7 |
|
|
|
7 |
|
Total |
|
$ |
25 |
|
|
$ |
30 |
|
|
$ |
54 |
|
|
$ |
58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS
& RESORTS, INC.Earnings per Common
Share (unaudited, in millions, except per share
amounts) |
|
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net
income |
|
$ |
290 |
|
|
$ |
211 |
|
|
$ |
479 |
|
|
$ |
467 |
|
Less: Net income attributable to non-controlling interests |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(5 |
) |
Net income attributable to Host Inc |
|
$ |
286 |
|
|
$ |
209 |
|
|
$ |
472 |
|
|
$ |
462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
|
739.1 |
|
|
|
739.7 |
|
|
|
739.9 |
|
|
|
739.5 |
|
Assuming distribution of common shares granted under the
comprehensive stock plans, less shares assumed purchased at
market |
|
|
.3 |
|
|
|
.5 |
|
|
|
.3 |
|
|
|
.4 |
|
Diluted weighted average shares outstanding (1) |
|
|
739.4 |
|
|
|
740.2 |
|
|
|
740.2 |
|
|
|
739.9 |
|
Basic and diluted earnings per common share |
|
$ |
.39 |
|
|
$ |
.28 |
|
|
$ |
.64 |
|
|
$ |
.62 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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$
|
|
As of June 30, 2019 |
|
|
Quarter ended June 30, 2019 |
|
|
Quarter ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
354.83 |
|
|
|
92.6 |
% |
|
$ |
328.52 |
|
|
$ |
513.83 |
|
|
$ |
342.49 |
|
|
|
91.7 |
% |
|
$ |
313.94 |
|
|
$ |
495.50 |
|
|
|
4.6 |
% |
|
|
3.7 |
% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
414.11 |
|
|
|
84.1 |
|
|
|
348.40 |
|
|
|
753.61 |
|
|
|
400.02 |
|
|
|
84.6 |
|
|
|
338.47 |
|
|
|
741.04 |
|
|
|
2.9 |
|
|
|
1.7 |
|
Florida Gulf Coast |
|
|
3 |
|
|
|
940 |
|
|
|
263.12 |
|
|
|
75.6 |
|
|
|
198.83 |
|
|
|
368.05 |
|
|
|
253.36 |
|
|
|
72.8 |
|
|
|
184.54 |
|
|
|
342.76 |
|
|
|
7.7 |
|
|
|
7.4 |
|
Phoenix |
|
|
5 |
|
|
|
2,163 |
|
|
|
249.43 |
|
|
|
76.0 |
|
|
|
189.69 |
|
|
|
415.48 |
|
|
|
239.04 |
|
|
|
74.5 |
|
|
|
177.97 |
|
|
|
387.91 |
|
|
|
6.6 |
|
|
|
7.1 |
|
Washington, D.C. (CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
278.76 |
|
|
|
91.5 |
|
|
|
255.04 |
|
|
|
367.23 |
|
|
|
287.52 |
|
|
|
89.7 |
|
|
|
257.90 |
|
|
|
364.36 |
|
|
|
(1.1 |
) |
|
|
0.8 |
|
New York |
|
|
3 |
|
|
|
4,259 |
|
|
|
292.59 |
|
|
|
84.9 |
|
|
|
248.42 |
|
|
|
378.93 |
|
|
|
302.85 |
|
|
|
91.0 |
|
|
|
275.50 |
|
|
|
408.48 |
|
|
|
(9.8 |
) |
|
|
(7.2 |
) |
Los Angeles |
|
|
4 |
|
|
|
1,726 |
|
|
|
228.49 |
|
|
|
89.1 |
|
|
|
203.54 |
|
|
|
300.39 |
|
|
|
230.17 |
|
|
|
89.5 |
|
|
|
205.90 |
|
|
|
305.41 |
|
|
|
(1.1 |
) |
|
|
(1.6 |
) |
San Francisco/San Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
233.63 |
|
|
|
81.1 |
|
|
|
189.45 |
|
|
|
257.61 |
|
|
|
229.61 |
|
|
|
85.1 |
|
|
|
195.50 |
|
|
|
272.95 |
|
|
|
(3.1 |
) |
|
|
(5.6 |
) |
San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
239.00 |
|
|
|
82.2 |
|
|
|
196.35 |
|
|
|
358.12 |
|
|
|
232.31 |
|
|
|
84.7 |
|
|
|
196.69 |
|
|
|
338.73 |
|
|
|
(0.2 |
) |
|
|
5.7 |
|
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
247.35 |
|
|
|
89.7 |
|
|
|
221.94 |
|
|
|
366.74 |
|
|
|
223.69 |
|
|
|
89.0 |
|
|
|
199.05 |
|
|
|
331.56 |
|
|
|
11.5 |
|
|
|
10.6 |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
269.77 |
|
|
|
87.9 |
|
|
|
237.25 |
|
|
|
323.53 |
|
|
|
262.60 |
|
|
|
89.1 |
|
|
|
233.87 |
|
|
|
315.58 |
|
|
|
1.4 |
|
|
|
2.5 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
234.35 |
|
|
|
85.1 |
|
|
|
199.47 |
|
|
|
271.52 |
|
|
|
253.60 |
|
|
|
88.6 |
|
|
|
224.66 |
|
|
|
301.53 |
|
|
|
(11.2 |
) |
|
|
(10.0 |
) |
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
196.98 |
|
|
|
81.0 |
|
|
|
159.65 |
|
|
|
233.90 |
|
|
|
196.05 |
|
|
|
85.4 |
|
|
|
167.43 |
|
|
|
231.49 |
|
|
|
(4.7 |
) |
|
|
1.0 |
|
Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
187.76 |
|
|
|
76.8 |
|
|
|
144.13 |
|
|
|
224.53 |
|
|
|
183.48 |
|
|
|
80.1 |
|
|
|
146.93 |
|
|
|
226.88 |
|
|
|
(1.9 |
) |
|
|
(1.0 |
) |
Northern Virginia |
|
|
4 |
|
|
|
1,551 |
|
|
|
216.65 |
|
|
|
79.8 |
|
|
|
172.97 |
|
|
|
268.16 |
|
|
|
210.02 |
|
|
|
82.1 |
|
|
|
172.47 |
|
|
|
275.19 |
|
|
|
0.3 |
|
|
|
(2.6 |
) |
San Antonio |
|
|
1 |
|
|
|
512 |
|
|
|
191.14 |
|
|
|
78.6 |
|
|
|
150.16 |
|
|
|
201.00 |
|
|
|
198.76 |
|
|
|
76.4 |
|
|
|
151.84 |
|
|
|
201.75 |
|
|
|
(1.1 |
) |
|
|
(0.4 |
) |
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
147.95 |
|
|
|
79.9 |
|
|
|
118.28 |
|
|
|
169.08 |
|
|
|
143.52 |
|
|
|
80.9 |
|
|
|
116.09 |
|
|
|
173.14 |
|
|
|
1.9 |
|
|
|
(2.3 |
) |
Orange County |
|
|
3 |
|
|
|
1,178 |
|
|
|
180.76 |
|
|
|
80.1 |
|
|
|
144.73 |
|
|
|
231.12 |
|
|
|
188.90 |
|
|
|
80.2 |
|
|
|
151.58 |
|
|
|
237.44 |
|
|
|
(4.5 |
) |
|
|
(2.7 |
) |
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
177.39 |
|
|
|
70.7 |
|
|
|
125.33 |
|
|
|
295.11 |
|
|
|
186.83 |
|
|
|
75.0 |
|
|
|
140.15 |
|
|
|
310.02 |
|
|
|
(10.6 |
) |
|
|
(4.8 |
) |
Chicago |
|
|
6 |
|
|
|
2,393 |
|
|
|
224.69 |
|
|
|
83.8 |
|
|
|
188.34 |
|
|
|
257.40 |
|
|
|
234.71 |
|
|
|
83.9 |
|
|
|
197.01 |
|
|
|
261.57 |
|
|
|
(4.4 |
) |
|
|
(1.6 |
) |
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
181.69 |
|
|
|
74.6 |
|
|
|
135.49 |
|
|
|
193.31 |
|
|
|
178.28 |
|
|
|
74.9 |
|
|
|
133.49 |
|
|
|
195.67 |
|
|
|
1.5 |
|
|
|
(1.2 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
176.07 |
|
|
|
79.4 |
|
|
|
139.88 |
|
|
|
210.69 |
|
|
|
169.90 |
|
|
|
81.3 |
|
|
|
138.10 |
|
|
|
199.97 |
|
|
|
1.3 |
|
|
|
5.4 |
|
Other |
|
|
7 |
|
|
|
3,084 |
|
|
|
174.29 |
|
|
|
80.8 |
|
|
|
140.84 |
|
|
|
200.55 |
|
|
|
170.71 |
|
|
|
81.2 |
|
|
|
138.56 |
|
|
|
198.17 |
|
|
|
1.6 |
|
|
|
1.2 |
|
Domestic |
|
|
78 |
|
|
|
44,348 |
|
|
|
237.64 |
|
|
|
82.5 |
|
|
|
196.16 |
|
|
|
309.64 |
|
|
|
236.94 |
|
|
|
84.1 |
|
|
|
199.33 |
|
|
|
309.39 |
|
|
|
(1.6 |
) |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
158.97 |
|
|
|
69.7 |
|
|
|
110.79 |
|
|
|
169.04 |
|
|
|
157.07 |
|
|
|
66.7 |
|
|
|
104.71 |
|
|
|
165.55 |
|
|
|
5.8 |
|
|
|
2.1 |
|
All Locations - Constant US$ |
|
|
83 |
|
|
|
45,847 |
|
|
|
235.46 |
|
|
|
82.1 |
|
|
|
193.37 |
|
|
|
305.04 |
|
|
|
234.86 |
|
|
|
83.6 |
|
|
|
196.24 |
|
|
|
304.68 |
|
|
|
(1.5 |
) |
|
|
0.1 |
|
All Owned Hotels in Constant US$ (2)
|
|
As of June 30, 2019 |
|
|
Quarter ended June 30, 2019 |
|
|
Quarter ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
Comparable Hotels |
|
|
83 |
|
|
|
45,847 |
|
|
$ |
235.46 |
|
|
|
82.1 |
% |
|
$ |
193.37 |
|
|
$ |
305.04 |
|
|
$ |
234.86 |
|
|
|
83.6 |
% |
|
$ |
196.24 |
|
|
$ |
304.68 |
|
|
|
(1.5 |
)% |
|
|
0.1 |
% |
Non-comparable Hotels (Pro
forma) |
|
|
7 |
|
|
|
4,807 |
|
|
|
335.20 |
|
|
|
80.0 |
|
|
|
268.08 |
|
|
|
445.64 |
|
|
|
325.94 |
|
|
|
83.3 |
|
|
|
271.58 |
|
|
|
440.60 |
|
|
|
(1.3 |
) |
|
|
1.1 |
|
All Hotels |
|
|
90 |
|
|
|
50,654 |
|
|
|
244.78 |
|
|
|
81.9 |
|
|
|
200.53 |
|
|
|
318.50 |
|
|
|
243.54 |
|
|
|
83.5 |
|
|
|
203.44 |
|
|
|
317.67 |
|
|
|
(1.4 |
) |
|
|
0.3 |
|
Comparable Hotels in Nominal US$
|
|
As of June 30, 2019 |
|
|
Quarter ended June 30, 2019 |
|
|
Quarter ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
158.97 |
|
|
|
69.7 |
% |
|
$ |
110.79 |
|
|
$ |
169.04 |
|
|
$ |
164.45 |
|
|
|
66.7 |
% |
|
$ |
109.63 |
|
|
$ |
173.05 |
|
|
|
1.1 |
% |
|
|
(2.3 |
)% |
Domestic |
|
|
78 |
|
|
|
44,348 |
|
|
|
237.64 |
|
|
|
82.5 |
|
|
|
196.16 |
|
|
|
309.64 |
|
|
|
236.94 |
|
|
|
84.1 |
|
|
|
199.33 |
|
|
|
309.39 |
|
|
|
(1.6 |
) |
|
|
0.1 |
|
All Locations |
|
|
83 |
|
|
|
45,847 |
|
|
|
235.46 |
|
|
|
82.1 |
|
|
|
193.37 |
|
|
|
305.04 |
|
|
|
235.05 |
|
|
|
83.6 |
|
|
|
196.40 |
|
|
|
304.93 |
|
|
|
(1.5 |
) |
|
|
— |
|
Comparable Hotels by Location in Constant
US$
|
|
As of June 30, 2019 |
|
|
Year-to-date ended June 30, 2019 |
|
|
Year-to-date ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
376.50 |
|
|
|
90.9 |
% |
|
$ |
342.19 |
|
|
$ |
523.28 |
|
|
$ |
369.42 |
|
|
|
91.5 |
% |
|
$ |
338.07 |
|
|
$ |
513.44 |
|
|
|
1.2 |
% |
|
|
1.9 |
% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
391.86 |
|
|
|
81.4 |
|
|
|
318.88 |
|
|
|
722.04 |
|
|
|
379.63 |
|
|
|
78.0 |
|
|
|
296.04 |
|
|
|
652.57 |
|
|
|
7.7 |
|
|
|
10.6 |
|
Florida Gulf Coast |
|
|
3 |
|
|
|
940 |
|
|
|
297.71 |
|
|
|
80.3 |
|
|
|
238.93 |
|
|
|
440.35 |
|
|
|
290.69 |
|
|
|
78.7 |
|
|
|
228.71 |
|
|
|
417.34 |
|
|
|
4.5 |
|
|
|
5.5 |
|
Phoenix |
|
|
5 |
|
|
|
2,163 |
|
|
|
296.68 |
|
|
|
80.1 |
|
|
|
237.53 |
|
|
|
486.65 |
|
|
|
280.57 |
|
|
|
79.0 |
|
|
|
221.75 |
|
|
|
444.04 |
|
|
|
7.1 |
|
|
|
9.6 |
|
Washington, D.C. (CBD ) |
|
|
5 |
|
|
|
3,238 |
|
|
|
265.11 |
|
|
|
82.5 |
|
|
|
218.62 |
|
|
|
312.73 |
|
|
|
271.10 |
|
|
|
80.8 |
|
|
|
218.98 |
|
|
|
308.40 |
|
|
|
(0.2 |
) |
|
|
1.4 |
|
New York |
|
|
3 |
|
|
|
4,259 |
|
|
|
266.94 |
|
|
|
78.5 |
|
|
|
209.56 |
|
|
|
323.62 |
|
|
|
279.78 |
|
|
|
84.4 |
|
|
|
236.06 |
|
|
|
355.61 |
|
|
|
(11.2 |
) |
|
|
(9.0 |
) |
Los Angeles |
|
|
4 |
|
|
|
1,726 |
|
|
|
226.22 |
|
|
|
87.8 |
|
|
|
198.59 |
|
|
|
294.83 |
|
|
|
230.21 |
|
|
|
89.3 |
|
|
|
205.66 |
|
|
|
301.57 |
|
|
|
(3.4 |
) |
|
|
(2.2 |
) |
San Francisco/San Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
242.68 |
|
|
|
78.5 |
|
|
|
190.62 |
|
|
|
260.53 |
|
|
|
227.62 |
|
|
|
82.7 |
|
|
|
188.17 |
|
|
|
263.43 |
|
|
|
1.3 |
|
|
|
(1.1 |
) |
San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
237.09 |
|
|
|
79.8 |
|
|
|
189.18 |
|
|
|
344.22 |
|
|
|
232.08 |
|
|
|
83.3 |
|
|
|
193.25 |
|
|
|
339.05 |
|
|
|
(2.1 |
) |
|
|
1.5 |
|
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
220.90 |
|
|
|
83.9 |
|
|
|
185.41 |
|
|
|
304.83 |
|
|
|
208.50 |
|
|
|
86.3 |
|
|
|
179.87 |
|
|
|
296.75 |
|
|
|
3.1 |
|
|
|
2.7 |
|
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
233.09 |
|
|
|
78.2 |
|
|
|
182.20 |
|
|
|
256.05 |
|
|
|
227.91 |
|
|
|
79.9 |
|
|
|
182.21 |
|
|
|
251.90 |
|
|
|
— |
|
|
|
1.6 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
215.31 |
|
|
|
81.3 |
|
|
|
174.95 |
|
|
|
237.90 |
|
|
|
229.83 |
|
|
|
81.9 |
|
|
|
188.18 |
|
|
|
254.98 |
|
|
|
(7.0 |
) |
|
|
(6.7 |
) |
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
203.37 |
|
|
|
81.3 |
|
|
|
165.38 |
|
|
|
241.84 |
|
|
|
196.70 |
|
|
|
84.1 |
|
|
|
165.33 |
|
|
|
233.70 |
|
|
|
— |
|
|
|
3.5 |
|
Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
206.28 |
|
|
|
77.3 |
|
|
|
159.48 |
|
|
|
244.63 |
|
|
|
187.72 |
|
|
|
79.4 |
|
|
|
149.03 |
|
|
|
234.06 |
|
|
|
7.0 |
|
|
|
4.5 |
|
Northern Virginia |
|
|
4 |
|
|
|
1,551 |
|
|
|
211.48 |
|
|
|
73.6 |
|
|
|
155.70 |
|
|
|
245.64 |
|
|
|
206.27 |
|
|
|
76.4 |
|
|
|
157.49 |
|
|
|
251.14 |
|
|
|
(1.1 |
) |
|
|
(2.2 |
) |
San Antonio |
|
|
1 |
|
|
|
512 |
|
|
|
197.50 |
|
|
|
78.7 |
|
|
|
155.38 |
|
|
|
213.22 |
|
|
|
202.81 |
|
|
|
77.0 |
|
|
|
156.24 |
|
|
|
208.41 |
|
|
|
(0.6 |
) |
|
|
2.3 |
|
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
180.61 |
|
|
|
83.4 |
|
|
|
150.62 |
|
|
|
207.39 |
|
|
|
176.63 |
|
|
|
84.7 |
|
|
|
149.54 |
|
|
|
208.27 |
|
|
|
0.7 |
|
|
|
(0.4 |
) |
Orange County |
|
|
3 |
|
|
|
1,178 |
|
|
|
186.79 |
|
|
|
79.6 |
|
|
|
148.73 |
|
|
|
238.20 |
|
|
|
190.81 |
|
|
|
78.1 |
|
|
|
149.09 |
|
|
|
233.21 |
|
|
|
(0.2 |
) |
|
|
2.1 |
|
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
193.57 |
|
|
|
74.8 |
|
|
|
144.76 |
|
|
|
339.92 |
|
|
|
199.24 |
|
|
|
78.3 |
|
|
|
156.02 |
|
|
|
348.47 |
|
|
|
(7.2 |
) |
|
|
(2.5 |
) |
Chicago |
|
|
6 |
|
|
|
2,393 |
|
|
|
189.47 |
|
|
|
73.2 |
|
|
|
138.60 |
|
|
|
191.07 |
|
|
|
196.59 |
|
|
|
75.6 |
|
|
|
148.68 |
|
|
|
200.05 |
|
|
|
(6.8 |
) |
|
|
(4.5 |
) |
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
182.15 |
|
|
|
75.2 |
|
|
|
136.92 |
|
|
|
197.16 |
|
|
|
178.56 |
|
|
|
75.7 |
|
|
|
135.11 |
|
|
|
202.53 |
|
|
|
1.3 |
|
|
|
(2.7 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
169.71 |
|
|
|
72.1 |
|
|
|
122.41 |
|
|
|
184.62 |
|
|
|
162.24 |
|
|
|
74.4 |
|
|
|
120.78 |
|
|
|
176.12 |
|
|
|
1.4 |
|
|
|
4.8 |
|
Other |
|
|
7 |
|
|
|
3,084 |
|
|
|
171.22 |
|
|
|
75.8 |
|
|
|
129.81 |
|
|
|
184.13 |
|
|
|
170.32 |
|
|
|
76.5 |
|
|
|
130.37 |
|
|
|
187.53 |
|
|
|
(0.4 |
) |
|
|
(1.8 |
) |
Domestic |
|
|
78 |
|
|
|
44,348 |
|
|
|
233.93 |
|
|
|
79.1 |
|
|
|
184.97 |
|
|
|
295.04 |
|
|
|
231.89 |
|
|
|
80.9 |
|
|
|
187.59 |
|
|
|
294.51 |
|
|
|
(1.4 |
) |
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
151.58 |
|
|
|
68.7 |
|
|
|
104.09 |
|
|
|
155.00 |
|
|
|
149.44 |
|
|
|
64.3 |
|
|
|
96.08 |
|
|
|
149.70 |
|
|
|
8.3 |
|
|
|
3.5 |
|
All Locations - Constant US$ |
|
|
83 |
|
|
|
45,847 |
|
|
|
231.58 |
|
|
|
78.7 |
|
|
|
182.33 |
|
|
|
290.47 |
|
|
|
229.73 |
|
|
|
80.4 |
|
|
|
184.59 |
|
|
|
289.78 |
|
|
|
(1.2 |
) |
|
|
0.2 |
|
All Owned Hotels in Constant US$ (2)
|
|
As of June 30, 2019 |
|
|
Year-to-date ended June 30, 2019 |
|
|
Year-to-date ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
Comparable Hotels |
|
|
83 |
|
|
|
45,847 |
|
|
$ |
231.58 |
|
|
|
78.7 |
% |
|
$ |
182.33 |
|
|
$ |
290.47 |
|
|
$ |
229.73 |
|
|
|
80.4 |
% |
|
$ |
184.59 |
|
|
$ |
289.78 |
|
|
|
(1.2 |
)% |
|
|
0.2 |
% |
Non-comparable Hotels (Pro
forma) |
|
|
7 |
|
|
|
4,807 |
|
|
|
381.20 |
|
|
|
79.9 |
|
|
|
304.71 |
|
|
|
497.34 |
|
|
|
363.54 |
|
|
|
84.4 |
|
|
|
306.68 |
|
|
|
490.65 |
|
|
|
(0.6 |
) |
|
|
1.4 |
|
All Hotels |
|
|
90 |
|
|
|
50,654 |
|
|
|
246.10 |
|
|
|
78.8 |
|
|
|
194.04 |
|
|
|
310.27 |
|
|
|
243.10 |
|
|
|
80.7 |
|
|
|
196.27 |
|
|
|
308.99 |
|
|
|
(1.1 |
) |
|
|
0.4 |
|
Comparable Hotels in Nominal US$
|
|
As of June 30, 2019 |
|
|
Year-to-date ended June 30, 2019 |
|
|
Year-to-date ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
151.58 |
|
|
|
68.7 |
% |
|
$ |
104.09 |
|
|
$ |
155.00 |
|
|
$ |
158.97 |
|
|
|
64.3 |
% |
|
$ |
102.21 |
|
|
$ |
158.63 |
|
|
|
1.8 |
% |
|
|
(2.3 |
)% |
Domestic |
|
|
78 |
|
|
|
44,348 |
|
|
|
233.93 |
|
|
|
79.1 |
|
|
|
184.97 |
|
|
|
295.04 |
|
|
|
231.89 |
|
|
|
80.9 |
|
|
|
187.59 |
|
|
|
294.51 |
|
|
|
(1.4 |
) |
|
|
0.2 |
|
All Locations |
|
|
83 |
|
|
|
45,847 |
|
|
|
231.58 |
|
|
|
78.7 |
|
|
|
182.33 |
|
|
|
290.47 |
|
|
|
229.98 |
|
|
|
80.4 |
|
|
|
184.79 |
|
|
|
290.07 |
|
|
|
(1.3 |
) |
|
|
0.1 |
|
___________
(1) See the Notes to Financial Information
for a discussion of comparable hotel operating statistics and
constant US$ presentation. Nominal US$ results include the effect
of currency fluctuations, consistent with our financial statement
presentation. CBD of a location refers to the central business
district.(2) Operating statistics are presented for all
consolidated properties owned as of June 30, 2019 and do not
include the results of operations for properties sold in 2019 or
2018. 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 room 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. Comparable Total RevPAR is calculated by dividing the sum
of rooms, food and beverage and other revenues by the available
room nights. 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 three hotels under significant
renovations in 2018 and 2019, and four hotels acquired in 2018 and
2019, which are presented on a pro forma basis assuming we owned
the hotels as of January 1, 2018 and includes historical operating
data for periods prior to our ownership. As a result, the RevPAR
decrease of 1.3% and 0.6% for the quarter and
year-to-date, 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 June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Number of hotels |
|
|
83 |
|
|
|
83 |
|
|
|
83 |
|
|
|
83 |
|
Number of rooms |
|
|
45,847 |
|
|
|
45,847 |
|
|
|
45,847 |
|
|
|
45,847 |
|
Change in comparable hotel
Total RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant US$ |
|
|
0.1 |
% |
|
|
— |
|
|
|
0.2 |
% |
|
|
— |
|
Nominal US$ |
|
|
0.0 |
% |
|
|
— |
|
|
|
0.1 |
% |
|
|
— |
|
Change in comparable hotel
RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant US$ |
|
|
(1.5 |
)% |
|
|
— |
|
|
|
(1.2 |
)% |
|
|
— |
|
Nominal US$ |
|
|
(1.5 |
)% |
|
|
— |
|
|
|
(1.3 |
)% |
|
|
— |
|
Operating profit margin
(2) |
|
|
18.9 |
% |
|
|
17.3 |
% |
|
|
17.3 |
% |
|
|
15.2 |
% |
Comparable hotel EBITDA margin
(2) |
|
|
32.5 |
% |
|
|
32.7 |
% |
|
|
30.45 |
% |
|
|
30.3 |
% |
Food and beverage profit
margin (2) |
|
|
35.4 |
% |
|
|
35.4 |
% |
|
|
34.8 |
% |
|
|
34.1 |
% |
Comparable hotel food and
beverage profit margin (2) |
|
|
36.5 |
% |
|
|
37.1 |
% |
|
|
35.4 |
% |
|
|
35.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
290 |
|
|
$ |
211 |
|
|
$ |
479 |
|
|
$ |
467 |
|
Depreciation and amortization |
|
|
166 |
|
|
|
189 |
|
|
|
336 |
|
|
|
367 |
|
Interest expense |
|
|
43 |
|
|
|
45 |
|
|
|
86 |
|
|
|
89 |
|
Provision for income taxes |
|
|
16 |
|
|
|
17 |
|
|
|
18 |
|
|
|
21 |
|
Gain on sale of property and corporate level
income/expense |
|
|
(44 |
) |
|
|
20 |
|
|
|
(33 |
) |
|
|
(85 |
) |
Non-comparable hotel results,
net (3) |
|
|
(57 |
) |
|
|
(65 |
) |
|
|
(152 |
) |
|
|
(130 |
) |
Comparable hotel
EBITDA |
|
$ |
414 |
|
|
$ |
417 |
|
|
$ |
734 |
|
|
$ |
729 |
|
|
|
Quarter ended June 30, 2019 |
|
|
Quarter ended June 30, 2018 |
|
|
|
|
|
|
|
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 |
|
$ |
931 |
|
|
$ |
(124 |
) |
|
$ |
— |
|
|
$ |
807 |
|
|
$ |
973 |
|
|
$ |
(154 |
) |
|
$ |
— |
|
|
$ |
819 |
|
Food and beverage |
|
|
449 |
|
|
|
(65 |
) |
|
|
— |
|
|
|
384 |
|
|
|
449 |
|
|
|
(66 |
) |
|
|
— |
|
|
|
383 |
|
Other |
|
|
103 |
|
|
|
(21 |
) |
|
|
— |
|
|
|
82 |
|
|
|
96 |
|
|
|
(26 |
) |
|
|
— |
|
|
|
70 |
|
Total revenues |
|
|
1,483 |
|
|
|
(210 |
) |
|
|
— |
|
|
|
1,273 |
|
|
|
1,518 |
|
|
|
(246 |
) |
|
|
— |
|
|
|
1,272 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
226 |
|
|
|
(33 |
) |
|
|
— |
|
|
|
193 |
|
|
|
238 |
|
|
|
(44 |
) |
|
|
— |
|
|
|
194 |
|
Food and beverage |
|
|
290 |
|
|
|
(46 |
) |
|
|
— |
|
|
|
244 |
|
|
|
290 |
|
|
|
(49 |
) |
|
|
— |
|
|
|
241 |
|
Other |
|
|
496 |
|
|
|
(74 |
) |
|
|
— |
|
|
|
422 |
|
|
|
508 |
|
|
|
(88 |
) |
|
|
— |
|
|
|
420 |
|
Depreciation and amortization |
|
|
166 |
|
|
|
— |
|
|
|
(166 |
) |
|
|
— |
|
|
|
189 |
|
|
|
— |
|
|
|
(189 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
25 |
|
|
|
— |
|
|
|
(25 |
) |
|
|
— |
|
|
|
30 |
|
|
|
— |
|
|
|
(30 |
) |
|
|
— |
|
Total expenses |
|
|
1,203 |
|
|
|
(153 |
) |
|
|
(191 |
) |
|
|
859 |
|
|
|
1,255 |
|
|
|
(181 |
) |
|
|
(219 |
) |
|
|
855 |
|
Operating Profit -
Comparable Hotel EBITDA |
|
$ |
280 |
|
|
$ |
(57 |
) |
|
$ |
191 |
|
|
$ |
414 |
|
|
$ |
263 |
|
|
$ |
(65 |
) |
|
$ |
219 |
|
|
$ |
417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-date ended June 30, 2019 |
|
|
Year-to-date ended June 30, 2018 |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (3) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
$ |
1,788 |
|
|
$ |
(275 |
) |
|
$ |
— |
|
|
$ |
1,513 |
|
|
$ |
1,817 |
|
|
$ |
(284 |
) |
|
$ |
— |
|
|
$ |
1,533 |
|
Food and beverage |
|
|
882 |
|
|
|
(140 |
) |
|
|
— |
|
|
|
742 |
|
|
|
862 |
|
|
|
(122 |
) |
|
|
— |
|
|
|
740 |
|
Other |
|
|
203 |
|
|
|
(48 |
) |
|
|
— |
|
|
|
155 |
|
|
|
185 |
|
|
|
(51 |
) |
|
|
— |
|
|
|
134 |
|
Total revenues |
|
|
2,873 |
|
|
|
(463 |
) |
|
|
— |
|
|
|
2,410 |
|
|
|
2,864 |
|
|
|
(457 |
) |
|
|
— |
|
|
|
2,407 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
443 |
|
|
|
(68 |
) |
|
|
— |
|
|
|
375 |
|
|
|
462 |
|
|
|
(81 |
) |
|
|
— |
|
|
|
381 |
|
Food and beverage |
|
|
575 |
|
|
|
(96 |
) |
|
|
— |
|
|
|
479 |
|
|
|
568 |
|
|
|
(92 |
) |
|
|
— |
|
|
|
476 |
|
Other |
|
|
969 |
|
|
|
(147 |
) |
|
|
— |
|
|
|
822 |
|
|
|
975 |
|
|
|
(154 |
) |
|
|
— |
|
|
|
821 |
|
Depreciation and amortization |
|
|
336 |
|
|
|
— |
|
|
|
(336 |
) |
|
|
— |
|
|
|
367 |
|
|
|
— |
|
|
|
(367 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
54 |
|
|
|
— |
|
|
|
(54 |
) |
|
|
— |
|
|
|
58 |
|
|
|
— |
|
|
|
(58 |
) |
|
|
— |
|
Total expenses |
|
|
2,377 |
|
|
|
(311 |
) |
|
|
(390 |
) |
|
|
1,676 |
|
|
|
2,430 |
|
|
|
(327 |
) |
|
|
(425 |
) |
|
|
1,678 |
|
Operating Profit -
Comparable Hotel EBITDA . |
|
$ |
496 |
|
|
$ |
(152 |
) |
|
$ |
390 |
|
|
$ |
734 |
|
|
$ |
434 |
|
|
$ |
(130 |
) |
|
$ |
425 |
|
|
$ |
729 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Second Quarter 2019 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, and (ii) the results of
our office buildings and other non-hotel income.
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income
toEBITDA, EBITDAre and Adjusted EBITDAre
(1)(unaudited, in millions)
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income |
|
$ |
290 |
|
|
$ |
211 |
|
|
$ |
479 |
|
|
$ |
467 |
|
Interest expense |
|
|
43 |
|
|
|
45 |
|
|
|
86 |
|
|
|
89 |
|
Depreciation and amortization |
|
|
166 |
|
|
|
176 |
|
|
|
336 |
|
|
|
346 |
|
Income taxes |
|
|
16 |
|
|
|
17 |
|
|
|
18 |
|
|
|
21 |
|
EBITDA |
|
|
515 |
|
|
|
449 |
|
|
|
919 |
|
|
|
923 |
|
Gain on dispositions (2) |
|
|
(57 |
) |
|
|
— |
|
|
|
(59 |
) |
|
|
(119 |
) |
Non-cash impairment expense |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
21 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of Euro JV (3) |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
|
(8 |
) |
Equity in earnings of affiliates other than Euro JV |
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
(11 |
) |
Pro rata EBITDAre of Euro JV (3) |
|
|
— |
|
|
|
17 |
|
|
|
— |
|
|
|
23 |
|
Pro rata EBITDAre of equity investments other than Euro JV |
|
|
6 |
|
|
|
6 |
|
|
|
16 |
|
|
|
17 |
|
EBITDAre and Adjusted
EBITDAre |
|
$ |
460 |
|
|
$ |
476 |
|
|
$ |
867 |
|
|
$ |
846 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Notes to Financial Information
for discussion of non-GAAP measures. (2)
Reflects the sale of four hotels in 2019 and two hotels in
2018. (3) Represents our share of earnings and pro rata
EBITDAre from the European Joint Venture (“Euro JV”). We sold our
interest on December 21, 2018.
HOST HOTELS & RESORTS,
INC.Reconciliation of Diluted Earnings per Common
Share toNAREIT and Adjusted Funds From Operations
per Diluted Share (1)(unaudited, in
millions, except per share amounts)
|
|
Quarter ended June 30, |
|
|
Year-to-date ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income |
|
$ |
290 |
|
|
$ |
211 |
|
|
$ |
479 |
|
|
$ |
467 |
|
Less: Net income attributable to non-controlling interests |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(5 |
) |
Net income
attributable to Host Inc |
|
|
286 |
|
|
|
209 |
|
|
|
472 |
|
|
|
462 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on dispositions (2) |
|
|
(57 |
) |
|
|
— |
|
|
|
(59 |
) |
|
|
(119 |
) |
Depreciation and amortization |
|
|
165 |
|
|
|
175 |
|
|
|
334 |
|
|
|
344 |
|
Non-cash impairment expense |
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
21 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
|
(4 |
) |
|
|
(9 |
) |
|
|
(9 |
) |
|
|
(19 |
) |
Pro rata FFO of equity investments |
|
|
4 |
|
|
|
17 |
|
|
|
13 |
|
|
|
32 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO adjustment for non-controlling partnerships |
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
FFO adjustments for non-controlling interests of Host L.P |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
NAREIT FFO and
Adjusted FFO (3) |
|
$ |
393 |
|
|
$ |
402 |
|
|
$ |
749 |
|
|
$ |
717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation on a
per share basis (4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding - EPS, NAREIT FFO and Adjusted
FFO |
|
|
739.4 |
|
|
|
740.2 |
|
|
|
740.2 |
|
|
|
739.9 |
|
Diluted earnings per
common share |
|
$ |
.39 |
|
|
$ |
.28 |
|
|
$ |
.64 |
|
|
$ |
.62 |
|
NAREIT FFO and
Adjusted FFO per diluted share |
|
$ |
.53 |
|
|
$ |
.54 |
|
|
$ |
1.01 |
|
|
$ |
.97 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1-2) Refer to the corresponding footnote on the
Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted
EBITDAre.(3) Effective January 1, 2019, we adopted
NAREIT’s Funds From Operations White Paper – 2018 Restatement. The
adoption did not result in a change in the way we calculate NAREIT
FFO. See the Notes to Financial Information for a description of
NAREIT FFO.(4) Diluted earnings per common 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, and Adjusted EBITDAre
andDiluted Earnings per Common
Share to NAREIT and Adjusted
Funds From Operations per Diluted Share for 2019 Forecasts
(1)(unaudited, in millions, except per share amounts)
|
Full Year 2019 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net income |
$ |
956 |
|
|
$ |
993 |
|
Interest expense |
|
175 |
|
|
|
175 |
|
Depreciation and amortization |
|
671 |
|
|
|
671 |
|
Income taxes |
|
28 |
|
|
|
31 |
|
EBITDA |
|
1,830 |
|
|
|
1,870 |
|
Gain on dispositions |
|
(346 |
) |
|
|
(346 |
) |
Equity investment adjustments: |
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata EBITDAre of equity investments |
|
26 |
|
|
|
26 |
|
EBITDAre |
|
1,500 |
|
|
|
1,540 |
|
Adjusted
EBITDAre |
$ |
1,500 |
|
|
$ |
1,540 |
|
|
|
|
|
|
|
|
|
|
Full Year 2019 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net income |
$ |
956 |
|
|
$ |
993 |
|
Less: Net income attributable to non-controlling interests |
|
(13 |
) |
|
|
(13 |
) |
Net income attributable to Host Inc |
|
943 |
|
|
|
980 |
|
Adjustments: |
|
|
|
|
|
|
|
Gain on dispositions |
|
(346 |
) |
|
|
(346 |
) |
Depreciation and amortization |
|
667 |
|
|
|
667 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata FFO of equity investments |
|
18 |
|
|
|
18 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
FFO adjustment for non-controlling interests of Host LP |
|
(3 |
) |
|
|
(3 |
) |
NAREIT FFO and Adjusted FFO |
$ |
1,269 |
|
|
$ |
1,306 |
|
|
|
|
|
|
|
|
|
Weighted average diluted shares - EPS, NAREIT FFO and
Adjusted FFO |
|
735.0 |
|
|
|
735.0 |
|
Diluted earnings per common share |
$ |
1.28 |
|
|
$ |
1.33 |
|
NAREIT FFO and Adjusted FFO per diluted share
. |
$ |
1.73 |
|
|
$ |
1.78 |
|
___________ |
|
|
|
|
|
|
|
(1) The forecasts are based on the
below
assumptions:
- Total comparable hotel RevPAR in constant US$ will decrease
1.0% to 0.0% 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 25 basis points
or increase 25 basis points for the low and high ends of the
forecasted RevPAR range, respectively.
- We expect to spend approximately $315 million to
$345 million on ROI capital expenditures and approximately
$235 million to $265 million on renewal and replacement
capital expenditures.
- The above forecast assumes the sale of six additional
properties. The transactions are subject to customary 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
Resultsfor 2019 Forecasts (1)(unaudited,
in millions, except hotel statistics)
|
|
|
|
|
|
|
|
|
|
Full Year 2019 |
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Operating profit
margin (2) |
|
|
|
14.3 |
% |
|
|
14.9 |
% |
Comparable hotel
EBITDA margin (3) |
|
|
|
28.75 |
% |
|
|
29.25 |
% |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
956 |
|
|
$ |
993 |
|
Depreciation and
amortization |
|
|
|
671 |
|
|
|
671 |
|
Interest
expense |
|
|
|
175 |
|
|
|
175 |
|
Provision for
income taxes |
|
|
|
28 |
|
|
|
31 |
|
Corporate level
income/expense |
|
|
|
(266 |
) |
|
|
(266 |
) |
Non-comparable
hotel results, net (4) |
|
|
|
(271 |
) |
|
|
(276 |
) |
Comparable
hotel EBITDA |
|
|
$ |
1,293 |
|
|
$ |
1,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,431 |
|
|
$ |
(587 |
) |
|
$ |
— |
|
|
$ |
2,844 |
|
Food and beverage |
|
|
1,628 |
|
|
|
(265 |
) |
|
|
— |
|
|
|
1,363 |
|
Other |
|
|
382 |
|
|
|
(92 |
) |
|
|
— |
|
|
|
290 |
|
Total revenues |
|
|
5,441 |
|
|
|
(944 |
) |
|
|
— |
|
|
|
4,497 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,877 |
|
|
|
(673 |
) |
|
|
— |
|
|
|
3,204 |
|
Depreciation |
|
|
671 |
|
|
|
— |
|
|
|
(671 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
115 |
|
|
|
— |
|
|
|
(115 |
) |
|
|
— |
|
Total expenses |
|
|
4,663 |
|
|
|
(673 |
) |
|
|
(786 |
) |
|
|
3,204 |
|
Operating Profit
- Comparable Hotel EBITDA |
|
$ |
778 |
|
|
$ |
(271 |
) |
|
$ |
786 |
|
|
$ |
1,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,466 |
|
|
$ |
(594 |
) |
|
$ |
— |
|
|
$ |
2,872 |
|
Food and beverage |
|
|
1,644 |
|
|
|
(267 |
) |
|
|
— |
|
|
|
1,377 |
|
Other |
|
|
385 |
|
|
|
(93 |
) |
|
|
— |
|
|
|
292 |
|
Total revenues |
|
|
5,495 |
|
|
|
(954 |
) |
|
|
— |
|
|
|
4,541 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,891 |
|
|
|
(678 |
) |
|
|
— |
|
|
|
3,213 |
|
Depreciation and amortization |
|
|
671 |
|
|
|
— |
|
|
|
(671 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
115 |
|
|
|
— |
|
|
|
(115 |
) |
|
|
— |
|
Total expenses |
|
|
4,677 |
|
|
|
(678 |
) |
|
|
(786 |
) |
|
|
3,213 |
|
Operating Profit
- Comparable Hotel EBITDA |
|
$ |
818 |
|
|
$ |
(276 |
) |
|
$ |
786 |
|
|
$ |
1,328 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Forecast comparable hotel results
include 74 hotels (of our 90 hotels owned at June 30, 2019)
that we have assumed will be classified as comparable as of
December 31, 2019. 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 2019.
Also, see the notes to the “Reconciliation of Net Income to EBITDA,
EBITDAre, and Adjusted EBITDAre and Diluted Earnings per Common
Share to NAREIT and Adjusted Funds From Operations per Diluted
Share for 2019 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 and other non-hotel income. The following hotels are
expected to be non-comparable for full-year forecast:
Acquisitions:
- Andaz Maui at Wailea Resort (acquired in March 2018)
- Grand Hyatt San Francisco (acquired in March 2018)
- Hyatt Regency Coconut Point Resort and Spa (acquired in March
2018)
- 1 Hotel South Beach (acquired in February 2019)
Renovations:
- The Ritz-Carlton, Naples (business disruption beginning in the
second quarter of 2018)
- San Francisco Marriott Marquis (business disruption beginning
in the third quarter of 2018)
- San Antonio Marriott Rivercenter (business disruption beginning
in the second quarter of 2019)
- Minneapolis Marriott City Center (business disruption in
2019)
Dispositions or properties under
contract (includes forecast or actual results from January 1, 2019
through the anticipated or actual sale date):
- The Westin New York Grand Central (sold January 9, 2019)
- The Westin Mission Hills Golf Resort & Spa (sold April 2,
2019)
- Washington Dulles Airport Marriott (sold June 7, 2019)
- Newport Beach Marriott Bayview (sold June 12, 2019)
- Courtyard Chicago Downtown/River North (sold July 1, 2019)
- Residence Inn Arlington Pentagon City (sold July 1, 2019)
- Scottsdale Marriott Suites Old Town (expected to close in the
third quarter 2019)
- Scottsdale Marriott at McDowell Mountains (expected to close in
the third quarter 2019)
- Costa Mesa Marriott (expected to close in the third quarter
2019)
- Atlanta Marriott Suites Midtown (expected to close in the third
quarter 2019)
- The Westin Indianapolis (expected to close in the third quarter
2019)
- Chicago Marriott Suites O’Hare (expected to close in the third
quarter 2019)
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.,
Total RevPAR, RevPAR, average daily rate and average occupancy) and
operating results (revenues, expenses, hotel EBITDA and associated
margins) for the periods included in this report on a comparable
hotel basis in order to enable our investors to better evaluate our
operating performance.
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 1 Hotel South Beach in
February 2019. The hotel will not be included in our comparable
hotels until January 1, 2021. 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 90 hotels that we owned on
June 30, 2019, 83 have been classified as comparable
hotels. The operating results of the following hotels that we owned
as of June 30, 2019 are excluded from comparable hotel results
for these periods:
- Andaz Maui at Wailea Resort (acquired in March 2018);
- Grand Hyatt San Francisco (acquired in March 2018);
- Hyatt Regency Coconut Point Resort and Spa (acquired in March
2018);
- 1 Hotel South Beach (acquired in February 2019);
- The Ritz-Carlton, Naples, removed in the second quarter of 2018
(business disruption due to extensive renovations including
restoration of the façade that required closure of the hotel for
over two months, coordinated with renovation and expansion of
restaurant areas and renovation to the spa and ballrooms);
- San Francisco Marriott Marquis, removed in the third quarter of
2018 (business disruption due to renovations of guestrooms,
ballrooms, meeting space, and extensive renovations of the main
lobby); and
- San Antonio Marriott Rivercenter, removed in the second quarter
of 2019 (business disruption due to renovations of guestrooms,
conversion of public areas into meeting space, and an extensive
repositioning of the lobby area).
The operating results of eight hotels disposed
of in 2019 and 2018 are not included in comparable hotel results
for the periods presented herein. These operations are also
excluded from the hotel operating data for all owned hotels on
pages 9 and 10.
Operating statistics for the non-comparable
hotels listed above are included in the hotel operating data for
all owned hotels. By definition, the RevPAR results for these
properties are not comparable due to the reasons listed above, and,
therefore, are not indicative of the overall trends for our
portfolio. The operating results for the four hotels acquired in
2018 and 2019 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, 2018 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 of 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. Effective January 1, 2019, we adopted NAREIT’s
definition of FFO included in NAREIT’s Funds From Operations White
Paper – 2018 Restatement. The adoption did not result in a change
in the way we calculate NAREIT FFO. NAREIT defines FFO as net
income (calculated in accordance with GAAP) excluding depreciation
and amortization related to real estate, gains and losses from the
sale of certain real estate assets, gains and losses from change in
control, impairment write-downs of certain real estate assets and
investments and adjustments for consolidated partially-owned
entities and unconsolidated affiliates. Adjustments for
consolidated partially-owned entities and unconsolidated affiliates
are calculated to reflect our pro rata share of the FFO of those
entities on the same basis.
We believe that NAREIT FFO per diluted share is
a useful supplemental measure of our operating performance and that
the presentation of NAREIT FFO per diluted share, when combined
with the primary GAAP presentation of earnings per share, provides
beneficial information to investors. By excluding the effect of
real estate depreciation, amortization, 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
Funds From Operations White Paper – 2018 Restatement, the primary
purpose for including FFO as a supplemental measure of operating
performance of a REIT is to address the artificial nature of
historical cost depreciation and amortization of real estate and
real estate-related assets mandated by GAAP. For these reasons,
NAREIT adopted the FFO metric in order to promote a uniform
industry-wide measure of REIT operating performance.
Adjusted FFO per Diluted Share
We also present Adjusted FFO per diluted share
when evaluating our performance because management believes that
the exclusion of certain additional items described below provides
useful supplemental information to investors regarding our ongoing
operating performance. Management historically has made the
adjustments detailed below in evaluating our performance, in our
annual budget process and for our compensation programs. We believe
that the presentation of Adjusted FFO per diluted share, when
combined with both the primary GAAP presentation of 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 that are considered business combinations are
expensed in the year incurred. We exclude the effect of these costs
because we believe they are not reflective of the ongoing
performance of the Company.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business. We believe that
including these items is not consistent with our ongoing operating
performance.
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. For
example, in 2017, 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. We do not consider this adjustment to be
reflective of our on-going operating performance and therefore
excluded this item from Adjusted FFO.
EBITDA
Earnings before Interest Expense, Income Taxes,
Depreciation and Amortization (“EBITDA”) is a commonly used measure
of performance in many industries. Management believes EBITDA
provides useful information to investors regarding our results of
operations because it helps us and our investors evaluate the
ongoing operating performance of our properties after removing the
impact of the Company’s capital structure (primarily interest
expense) and its asset base (primarily depreciation and
amortization). Management also believes the use of EBITDA
facilitates comparisons between us and other lodging REITs, hotel
owners that are not REITs and other capital-intensive companies.
Management uses EBITDA to evaluate property-level results and as
one measure in determining the value of acquisitions and
dispositions and, like FFO and Adjusted FFO per diluted share, it
is widely used by management in the annual budget process and for
our compensation programs.
EBITDAre and Adjusted EBITDAre
We present EBITDAre in accordance with NAREIT
guidelines, as defined in its September 2017 white paper “Earnings
Before Interest, Taxes, Depreciation and Amortization for Real
Estate,” to provide an additional performance measure to facilitate
the evaluation and comparison of the Company’s results with other
REITs. NAREIT defines EBITDAre as net income (calculated in
accordance with GAAP) excluding interest expense, income tax,
depreciation and amortization, gains or losses on disposition of
depreciated property (including gains or losses on change of
control), impairment 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.
- Acquisition Costs – Under GAAP, costs associated with completed
property acquisitions that are considered business combinations are
expensed in the year incurred. We exclude the effect of these costs
because we believe they are not reflective of the ongoing
performance of the Company.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business. We believe that
including these items is not consistent with our ongoing operating
performance.
In unusual circumstances, we also may adjust
EBITDAre for gains or losses that management believes are not
representative of the Company’s current operating performance. The
last such adjustment was a 2013 exclusion of a gain from an eminent
domain claim.
Limitations on the Use of NAREIT FFO per Diluted
Share, Adjusted FFO per Diluted Share, EBITDA, EBITDAre and
Adjusted EBITDAre
We calculate NAREIT FFO per diluted share in
accordance with standards established by NAREIT, which may not be
comparable to measures calculated by other companies that do not
use the NAREIT definition of 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
10 properties and a vacation ownership development. Due to the
voting rights of the outside owners, we do not control and,
therefore, do not consolidate these entities. The non-controlling
partners in consolidated partnerships primarily consist of the
approximate 1% interest in Host LP held by outside partners, and a
15% interest held by outside partners in a partnership owning one
hotel for which we do control the entity and, therefore,
consolidate its operations. These pro rata results for NAREIT FFO
and Adjusted FFO per diluted share, EBITDAre and Adjusted EBITDAre
were calculated as set forth in the definitions above. Readers
should be cautioned that the pro rata results presented in these
measures for consolidated partnerships (for NAREIT FFO and Adjusted
FFO per diluted share) and equity investments may not accurately
depict the legal and economic implications of our investments in
these entities.
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.
Because 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 the performance of our Company 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 Gee
Lingberg, Senior Vice President240.744.5275
A PDF accompanying this announcement is available
at: http://ml.globenewswire.com/Resource/Download/712daa32-1c44-4203-923d-9875f7b5d842
Host Hotels and Resorts (NYSE:HST)
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