Host Hotels & Resorts, Inc. (NYSE: HST) (the “Company”),
the nation’s largest lodging real estate investment trust (“REIT”),
today announced results for the fourth quarter and the full year.
Operating Results(unaudited, in
millions, except per share and hotel statistics)
|
Quarter ended December 31, |
|
|
Percent |
|
|
Year ended December 31, |
|
|
Percent |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
Revenues |
$ |
1,334 |
|
|
$ |
1,361 |
|
|
|
(2.0 |
)% |
|
$ |
5,469 |
|
|
$ |
5,524 |
|
|
|
(1.0 |
)% |
Comparable hotel revenues (1) |
|
1,110 |
|
|
|
1,090 |
|
|
|
1.9 |
% |
|
|
4,397 |
|
|
|
4,356 |
|
|
|
0.9 |
% |
Net income |
|
81 |
|
|
|
306 |
|
|
|
(73.5 |
)% |
|
|
932 |
|
|
|
1,151 |
|
|
|
(19.0 |
)% |
EBITDAre (1) |
|
355 |
|
|
|
372 |
|
|
|
(4.6 |
)% |
|
|
1,538 |
|
|
|
1,562 |
|
|
|
(1.5 |
)% |
Adjusted EBITDAre (1) |
|
355 |
|
|
|
372 |
|
|
|
(4.6 |
)% |
|
|
1,534 |
|
|
|
1,562 |
|
|
|
(1.8 |
)% |
Comparable hotel Total RevPAR - |
|
292.39 |
|
|
|
287.05 |
|
|
|
1.9 |
% |
|
|
291.94 |
|
|
|
289.08 |
|
|
|
1.0 |
% |
Constant US$ |
Comparable hotel RevPAR - |
|
179.22 |
|
|
|
179.32 |
|
|
|
(0.1 |
)% |
|
|
183.59 |
|
|
|
184.78 |
|
|
|
(0.6 |
)% |
Constant US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
|
0.11 |
|
|
|
0.41 |
|
|
|
(73.2 |
)% |
|
|
1.26 |
|
|
|
1.47 |
|
|
|
(14.3 |
)% |
NAREIT FFO per diluted share (1) |
|
0.33 |
|
|
|
0.43 |
|
|
|
(23.3 |
)% |
|
|
1.7 |
|
|
|
1.77 |
|
|
|
(4.0 |
)% |
Adjusted FFO per diluted share (1) |
|
0.41 |
|
|
|
0.43 |
|
|
|
(4.7 |
)% |
|
|
1.78 |
|
|
|
1.77 |
|
|
|
0.6 |
% |
*Additional detail on the Company’s results, including data for
22 domestic markets and top 40 hotels by RevPAR, is available in
the Year End 2019 Supplemental Financial Information available on
the Company’s website at www.hosthotels.com.
_______________________
(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.
2019 Highlights
- Increased comparable hotel Total RevPAR by 1.9% for the quarter
and 1.0% for the full year, on a constant dollar basis.
- Repurchased approximately 35 million shares for $609 million
from May 2019 through February 18, 2020.
- Executed $1.3 billion of strategic asset sales by capitalizing
on a favorable transaction market to sell 14 properties with
relatively lower Total RevPAR and higher capital expenditure
requirements.
- Acquired the 1 Hotel South Beach, Miami for $610 million. The
iconic resort ranks among the top three in the Company’s portfolio
in terms of RevPAR, Total RevPAR and profitability per key.
- Further strengthened the only investment grade balance sheet
among lodging REITs by refinancing $650 million of existing senior
notes and expanding the borrowing capacity to $1.5 billion under
the Company’s revolving credit facility. The Company has no
significant debt maturities until 2023 and a weighted average
interest rate of 3.8%.
- Completed renovation projects at four of the 17 properties
under its transformational capital program with Marriott
International, and has six additional property renovations
underway, three of which are expected to be completed in 2020.
Marriott has provided additional priority returns on this
investment as well as operating profit guarantees, including $23
million and an estimated $16 million in 2019 and 2020,
respectively, to offset the business disruption.
James F. Risoleo, President and Chief Executive
Officer, said, “We executed large, value-enhancing strategic
capital allocation transactions in 2019 as we capitalized on
favorable market conditions to sell 14 properties for $1.3 billion
and returned $1.1 billion to stockholders through dividends and
share repurchases.
We further upgraded the quality of our portfolio
by acquiring the iconic 1 Hotel South Beach at an attractive
valuation multiple and completing renovations at four properties as
part of the Marriott transformational capital program. Moreover, we
continued to strengthen our best-in-class investment-grade balance
sheet by increasing liquidity, extending maturities and lowering
our borrowing costs. Finally, we delivered solid operating margins
all year long and generated our strongest comparable Total RevPAR
growth for the year in the fourth quarter. We are pleased to have
further strengthened our portfolio and balance sheet. In addition,
given our capital allocation strategy and strong analytics
platform, we are well-positioned to create long-term value for our
stockholders.”
Operating Performance
GAAP Metrics
- Total revenues decreased 2.0% for the quarter and 1.0% for the
full year due to the net effect of acquisitions and dispositions,
which led to reductions in revenue of $61 million and $116 million
for the quarter and full year, respectively, which was partially
offset by the improvement in total revenues on a comparable hotel
basis.
- GAAP operating profit margin decreased 140 basis points for the
quarter driven by an increase in depreciation expense and corporate
expenses. For the full year, GAAP operating profit margin increased
500 basis points, due to a reduction in depreciation expense, as
2018 included impairment expense of $260 million.
- Net income decreased $225 million, to $81 million,
for the quarter, and $219 million, to $932 million, for
the full year, primarily due to an increase in interest expense
related to the prepayment premiums for the Company’s senior notes
and a decrease in other gains/losses of $231 million and
$562 million for the quarter and full year, respectively,
related to asset sales. These decreases were partially offset by
additional tax expense and the impairment expense in 2018. As
described below, hotel operating results were little changed from
the prior year.
- Diluted earnings per common share decreased 73.2% and 14.3% for
the quarter and the full year, respectively.
Other Metrics
- Comparable hotel Total RevPAR on a constant dollar basis
increased 1.9% and 1.0% for the quarter and the full year,
respectively, due to improvement in food and beverage and other
revenues.
- Comparable hotel RevPAR on a constant dollar basis declined
0.1% for the quarter, driven by a slight decline in average room
rate. For the full year, comparable hotel RevPAR on a constant
dollar basis declined 0.6% due to a 80 basis point decrease in
occupancy, partially offset by a 0.3% increase in average room
rate. The decline includes an estimated 10 basis point decrease for
the quarter and 50 basis point decrease for the full year for
renovation disruption related to the Marriott transformational
capital program.
- Comparable hotel EBITDA increased by $4 million, or 1.5%, for
the quarter and $9 million, or 0.7%, for the full year,
respectively, reflecting the improvements in comparable hotel Total
RevPAR.
- Comparable hotel EBITDA margins declined 10 basis points for
the quarter and 5 basis points for the full year. The decline
reflects the decrease in RevPAR and an increase in wages and
benefits. However, margins benefited from increases in ancillary
revenues, synergies of the Marriott International merger with
Starwood Hotels, and the receipt of operating profit guarantees
from Marriott related to the transformational capital program.
- Adjusted EBITDAre decreased $17 million for the quarter and $28
million for the full year. The net effect of operations of
properties acquired or disposed of in 2018 and 2019 reduced
Adjusted EBITDAre for the quarter by $11 million and by
$17 million for the full year, in addition to a decrease of
$9 million for the quarter and $45 million for the full
year due to the sale of the Company’s interest in the European
Joint Venture in December 2018.
- Adjusted FFO per diluted share decreased 4.7% for the quarter
and increased 0.6% for the full year.
Dispositions
On October 30, 2019, the Company sold the Hyatt
Regency Cambridge and the Sheraton San Diego Hotel & Marina for
a combined sales price of $297 million.
Capital Allocation
During the fourth quarter, the Company invested
approximately $166 million in capital expenditures, of which
$125 million were return on investment (“ROI”) capital
expenditures and $41 million were renewal and replacement
projects. For the full year, the Company has invested approximately
$558 million in capital expenditures, of which $336 million
were ROI capital expenditures and $222 million were renewal
and replacement projects.
For 2020, the Company expects capital
expenditures of between $550 million and $650 million. This
comprises between $310 million and $360 million in ROI
projects and between $240 million and $290 million in renewal
and replacement projects.
The ROI capital expenditures for 2019 and the
forecast 2020 expenditures include $225 million and $180 million to
$200 million, respectively, for the previously disclosed
transformational capital program with Marriott. Hotels completed in
the program include San Francisco Marriott Marquis, Santa Clara
Marriott, New York Marriott Downtown and Coronado Island Marriott
Resort & Spa.
At the same time, the Company is in the process
of completing other selective value enhancement and development
projects. These include:
- AC by Marriott Scottsdale North – using an underutilized
parking lot alongside The Westin Kierland Resort & Spa,
construction is underway on a 165-room AC by Marriott property and
is expected to open in the second quarter of 2020;
- Additional villas at the Andaz Maui at Wailea Resort –
development and construction of 19 additional two-bedroom, luxury
villas at the Andaz Maui is underway and expected to be completed
in 2021; and
- Expansions at the Orlando World Center Marriott – development
and construction of a 2.3-acre waterpark and a 60,000 square-foot
meeting space expansion is expected to commence in the second
quarter of 2020 and complete in the first half of 2021 and first
half 2022, respectively.
Share Repurchase Program and
Dividends
During the fourth quarter, the Company
repurchased 4.7 million shares at an average price of $17.39 per
share through its common share repurchase program for a total of
$82 million. For the full year 2019, the Company purchased 27.8
million shares at an average price of $17.37 per share for a total
of $482 million. In 2020, the Company repurchased 7.5 million
shares at an average price of $16.90, for a total of $127 million,
pursuant to a trading plan designed to comply with Rule 10b5-1
under the Securities Exchange Act. The Company has approximately
$391 million of remaining capacity under the repurchase program,
wherein the common stock may be purchased from time to time,
depending upon market conditions.
The Company paid a fourth quarter cash dividend
of $0.25 per share on its common stock on January 15, 2020 to
stockholders of record as of December 31, 2019, which included
a $0.05 special dividend. On February 19, 2020, the Board of
Directors authorized a regular quarterly cash dividend of $0.20 on
its common stock. The dividend will be paid on April 15, 2020 to
stockholders of record on March 31, 2020. All future dividends,
including any special dividends, are subject to approval by the
Company’s Board of Directors.
Balance Sheet
At December 31, 2019, the Company had
approximately $1.6 billion of unrestricted cash, not
including $176 million in FF&E escrow reserves and $1.5
billion of available capacity under the revolver portion of its
credit facility. Total debt as of December 31, 2019 was
$3.8 billion, with an average maturity of 5.4 years and an
average interest rate of 3.8%.
The Company has no material debt maturities
until 2023. The Company’s debt maturity schedule remains balanced
with no more than 7% of its debt, as a percent of total market
capitalization, maturing in any given year.
2020 Outlook
For 2020, the Company expects slight improvement
in year-over-year comparable hotel RevPAR driven by increased group
revenues as its portfolio is expected to benefit from a more
favorable citywide convention calendar. The Company expects leisure
travel to support transient revenues as consumer confidence remains
strong and the labor market is healthy, while business travel is
expected to remain subdued given macroeconomic uncertainties.
Additionally, the Company expects above inflationary growth in
hotel-level operating expenses, primarily due to wages and benefits
increases, to result in lower operating margins.
Effective January 1, 2020, the Company will
adjust its definition of comparable hotels to include recent
acquisitions on a pro forma basis assuming they have comparable
operating environments. Operating results for acquisitions in the
current and prior year will be reflected for full calendar years,
to include results for periods prior to Company ownership.
Management believes this will provide investors a better
understanding of underlying growth trends for the Company’s current
portfolio. As a result, the 1 Hotel South Beach will be included in
the comparable hotel set for the year ended December 31, 2020.
The Company estimates its 2020 operating results
as compared to the prior year will change in the following
range:
|
|
Full Year 2020 Guidance |
Total
comparable hotel RevPAR - Constant US$ (1) |
|
0.0% to
1.0% |
Total
revenues under GAAP |
|
(4.6)% to
(3.0)% |
Operating
profit margin under GAAP |
|
(240 bps)
to (170 bps) |
Comparable
hotel EBITDA margins |
|
(165 bps)
to (125 bps) |
__________
(1) Forecast comparable hotel results include 74
hotels that are assumed will be classified as comparable as of
December 31, 2020. See the 2020 Forecast Schedules for a
listing of hotels excluded from the full year 2020 comparable hotel
set.
Based upon the above parameters, the Company
estimates its 2020 guidance as follows:
|
|
Full Year 2020 Guidance |
Net income
(in millions) |
|
$496 to
$539 |
Adjusted
EBITDAre (in millions) |
|
$1,360 to
$1,405 |
Diluted
earnings per common share |
|
$.69 to
$.75 |
NAREIT FFO
per diluted share |
|
$1.65 to
$1.71 |
Adjusted FFO
per diluted share |
|
$1.65 to
$1.71 |
See the 2020 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 75 properties in
the United States and five properties internationally totaling
approximately 46,500 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. 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 February 19, 2020 and the Company undertakes
no obligation to update any forward-looking statement to conform
the statement to actual results or changes in the Company’s
expectations.
* This press
release contains registered trademarks that are the exclusive
property of their respective owners. None of the owners of these
trademarks has any responsibility or liability for any information
contained in this press release.
Host Hotels & Resorts, Inc., herein
referred to as “we,” “Host Inc.,” or the “Company,” is a
self-managed and self-administered real estate investment trust
that owns hotel properties. We conduct our operations as an
umbrella partnership REIT through an operating partnership, Host
Hotels & Resorts, L.P. (“Host LP”), of which we are the
sole general partner. When distinguishing between Host Inc. and
Host LP, the primary difference is approximately 1% of the
partnership interests in Host LP held by outside partners as of
December 31, 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)
|
|
December 31, 2019 |
|
|
December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
Property and
equipment, net |
|
$ |
9,671 |
|
|
$ |
9,760 |
|
Right-of-use
assets(1) |
|
|
595 |
|
|
|
— |
|
Assets held
for sale |
|
|
— |
|
|
|
281 |
|
Due from
managers |
|
|
63 |
|
|
|
71 |
|
Advances to
and investments in affiliates |
|
|
56 |
|
|
|
48 |
|
Furniture,
fixtures and equipment replacement fund |
|
|
176 |
|
|
|
213 |
|
Other |
|
|
171 |
|
|
|
175 |
|
Cash and
cash equivalents |
|
|
1,573 |
|
|
|
1,542 |
|
Total assets |
|
$ |
12,305 |
|
|
$ |
12,090 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
NON-CONTROLLING INTERESTS AND EQUITY |
|
Debt
(2) |
|
|
|
|
|
|
|
|
Senior notes |
|
$ |
2,776 |
|
|
$ |
2,782 |
|
Credit facility, including the term loans of $997 and $998,
respectively |
|
|
989 |
|
|
|
1,049 |
|
Other debt |
|
|
29 |
|
|
|
6 |
|
Total debt |
|
|
3,794 |
|
|
|
3,837 |
|
Lease
liabilities(1) |
|
|
606 |
|
|
|
— |
|
Accounts
payable and accrued expenses |
|
|
263 |
|
|
|
293 |
|
Other |
|
|
175 |
|
|
|
266 |
|
Total liabilities |
|
|
4,838 |
|
|
|
4,396 |
|
|
|
|
|
|
|
|
|
|
Redeemable
non-controlling interests - Host Hotels & Resorts,
L.P. |
|
|
142 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
|
Host Hotels
& Resorts, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, par value $.01, 1,050 million shares authorized, |
|
|
7 |
|
|
|
7 |
|
713.4 million shares and 740.4 million shares issued and
outstanding, |
respectively |
Additional paid-in capital |
|
|
7,675 |
|
|
|
8,156 |
|
Accumulated other comprehensive loss |
|
|
(56 |
) |
|
|
(59 |
) |
Deficit |
|
|
(307 |
) |
|
|
(610 |
) |
Total equity of Host Hotels & Resorts, Inc. stockholders |
|
|
7,319 |
|
|
|
7,494 |
|
Non-redeemable non-controlling interests—other consolidated
partnerships |
|
|
6 |
|
|
|
72 |
|
Total equity |
|
|
7,325 |
|
|
|
7,566 |
|
Total liabilities, non-controlling interests and equity |
|
$ |
12,305 |
|
|
$ |
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 $595 million and
lease liabilities of $606 million as of December 31, 2019. The
adoption did not affect our statement of operations.
(2) Please see our Year End 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 |
|
|
Year ended |
|
December 31, |
December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
813 |
|
|
$ |
856 |
|
|
$ |
3,431 |
|
|
$ |
3,547 |
|
Food and beverage |
|
|
424 |
|
|
|
417 |
|
|
|
1,647 |
|
|
|
1,616 |
|
Other |
|
|
97 |
|
|
|
88 |
|
|
|
391 |
|
|
|
361 |
|
Total revenues |
|
|
1,334 |
|
|
|
1,361 |
|
|
|
5,469 |
|
|
|
5,524 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
209 |
|
|
|
222 |
|
|
|
873 |
|
|
|
918 |
|
Food and beverage |
|
|
285 |
|
|
|
281 |
|
|
|
1,120 |
|
|
|
1,103 |
|
Other departmental and support expenses |
|
|
314 |
|
|
|
330 |
|
|
|
1,295 |
|
|
|
1,302 |
|
Management fees |
|
|
62 |
|
|
|
60 |
|
|
|
239 |
|
|
|
243 |
|
Other property-level expenses |
|
|
97 |
|
|
|
100 |
|
|
|
365 |
|
|
|
387 |
|
Depreciation and amortization |
|
|
175 |
|
|
|
165 |
|
|
|
676 |
|
|
|
944 |
|
Corporate and other expenses(1) |
|
|
27 |
|
|
|
22 |
|
|
|
107 |
|
|
|
104 |
|
Gain on insurance and business interruption settlements |
|
|
(1 |
) |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
(7 |
) |
Total operating costs and expenses |
|
|
1,168 |
|
|
|
1,173 |
|
|
|
4,670 |
|
|
|
4,994 |
|
Operating
profit |
|
|
166 |
|
|
|
188 |
|
|
|
799 |
|
|
|
530 |
|
Interest income |
|
|
9 |
|
|
|
7 |
|
|
|
32 |
|
|
|
15 |
|
Interest expense |
|
|
(90 |
) |
|
|
(42 |
) |
|
|
(222 |
) |
|
|
(176 |
) |
Other gains/(losses)
(2) |
|
|
4 |
|
|
|
235 |
|
|
|
340 |
|
|
|
902 |
|
Loss on foreign currency
transactions and derivatives |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Equity in earnings of
affiliates |
|
|
1 |
|
|
|
5 |
|
|
|
14 |
|
|
|
30 |
|
Income before income
taxes |
|
|
89 |
|
|
|
393 |
|
|
|
962 |
|
|
|
1,301 |
|
Provision for income
taxes(3) |
|
|
(8 |
) |
|
|
(87 |
) |
|
|
(30 |
) |
|
|
(150 |
) |
Net
income |
|
|
81 |
|
|
|
306 |
|
|
|
932 |
|
|
|
1,151 |
|
Less: Net
income attributable to non-controlling interests |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(12 |
) |
|
|
(64 |
) |
Net income
attributable to Host Inc. |
|
$ |
80 |
|
|
$ |
303 |
|
|
$ |
920 |
|
|
$ |
1,087 |
|
Basic and diluted
earnings per common share |
|
$ |
0.11 |
|
|
$ |
0.41 |
|
|
$ |
1.26 |
|
|
$ |
1.47 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate and other expenses include the following
items:
|
|
Quarter ended |
|
|
Year ended |
December 31, |
December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
General and administrative costs |
|
$ |
23 |
|
|
$ |
19 |
|
|
$ |
92 |
|
|
$ |
90 |
Non-cash stock-based
compensation expense |
|
|
4 |
|
|
|
3 |
|
|
|
15 |
|
|
|
14 |
Total |
|
$ |
27 |
|
|
$ |
22 |
|
|
$ |
107 |
|
|
$ |
104 |
(2) Other gains/(losses) consists of the
following:
|
|
Quarter ended |
|
|
Year ended |
|
December 31, |
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Gain on sale of depreciable assets |
|
$ |
2 |
|
|
$ |
238 |
|
|
$ |
334 |
|
|
$ |
903 |
|
Other gain (loss) |
|
|
2 |
|
|
|
(3 |
) |
|
|
6 |
|
|
|
(1 |
) |
Total |
|
$ |
4 |
|
|
$ |
235 |
|
|
$ |
340 |
|
|
$ |
902 |
|
(3) Provision for income taxes consists of the following:
|
|
|
Quarter ended |
|
|
Year ended |
|
December 31, |
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Income taxes - continuing operations |
|
|
$ |
(11 |
) |
|
$ |
(3 |
) |
|
$ |
(36 |
) |
|
$ |
(37 |
) |
Tax on dispositions |
|
|
|
3 |
|
|
|
(84 |
) |
|
|
6 |
|
|
|
(113 |
) |
Total |
|
|
$ |
(8 |
) |
|
$ |
(87 |
) |
|
$ |
(30 |
) |
|
$ |
(150 |
) |
HOST HOTELS & RESORTS,
INC.Earnings per Common Share (unaudited,
in millions, except per share amounts)
|
|
Quarter ended |
|
|
Year ended |
|
December 31, |
December 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net income |
|
$ |
81 |
|
|
$ |
306 |
|
|
$ |
932 |
|
|
$ |
1,151 |
|
Less: Net income attributable to non-controlling
interests |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(12 |
) |
|
|
(64 |
) |
Net income attributable to
Host Inc. |
|
$ |
80 |
|
|
$ |
303 |
|
|
$ |
920 |
|
|
$ |
1,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding |
|
|
716.3 |
|
|
|
740.3 |
|
|
|
730.3 |
|
|
|
739.8 |
|
Assuming distribution of common shares granted under the |
|
|
.8 |
|
|
|
.7 |
|
|
|
.8 |
|
|
|
.8 |
|
comprehensive stock plans, less shares assumed |
|
purchased at market |
|
Diluted weighted average
shares outstanding (1) |
|
|
717.1 |
|
|
|
741.0 |
|
|
|
731.1 |
|
|
|
740.6 |
|
Basic and diluted earnings per
common share |
|
$ |
0.11 |
|
|
$ |
0.41 |
|
|
$ |
1.26 |
|
|
$ |
1.47 |
|
|
(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 December 31, 2019 |
|
|
Quarter ended December 31, 2019 |
|
|
Quarter ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
Percent |
|
Change in |
Total RevPAR |
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
397.06 |
|
|
|
79.1 |
% |
|
$ |
314.18 |
|
|
$ |
464.90 |
|
|
$ |
363.85 |
|
|
|
88.4 |
% |
|
$ |
321.64 |
|
|
$ |
480.99 |
|
|
|
(2.3 |
)% |
|
|
(3.3 |
)% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
334.64 |
|
|
|
62.4 |
|
|
|
208.94 |
|
|
|
497.75 |
|
|
|
330.10 |
|
|
|
62.4 |
|
|
|
205.92 |
|
|
|
496.00 |
|
|
|
1.5 |
|
|
|
0.4 |
|
New York |
|
|
3 |
|
|
|
4,259 |
|
|
|
335.19 |
|
|
|
90.2 |
|
|
|
302.22 |
|
|
|
449.65 |
|
|
|
340.04 |
|
|
|
91.0 |
|
|
|
309.31 |
|
|
|
457.48 |
|
|
|
(2.3 |
) |
|
|
(1.7 |
) |
Phoenix |
|
|
3 |
|
|
|
1,654 |
|
|
|
293.33 |
|
|
|
72.6 |
|
|
|
213.00 |
|
|
|
489.76 |
|
|
|
287.46 |
|
|
|
69.6 |
|
|
|
199.99 |
|
|
|
459.01 |
|
|
|
6.5 |
|
|
|
6.7 |
|
Washington, D.C. (CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
243.16 |
|
|
|
76.6 |
|
|
|
186.27 |
|
|
|
274.75 |
|
|
|
237.51 |
|
|
|
76.3 |
|
|
|
181.14 |
|
|
|
263.07 |
|
|
|
2.8 |
|
|
|
4.4 |
|
San Diego |
|
|
3 |
|
|
|
3,288 |
|
|
|
228.60 |
|
|
|
74.2 |
|
|
|
169.53 |
|
|
|
325.13 |
|
|
|
236.16 |
|
|
|
77.8 |
|
|
|
183.76 |
|
|
|
328.62 |
|
|
|
(7.7 |
) |
|
|
(1.1 |
) |
Florida Gulf Coast |
|
|
3 |
|
|
|
940 |
|
|
|
245.56 |
|
|
|
71.7 |
|
|
|
175.95 |
|
|
|
335.57 |
|
|
|
240.53 |
|
|
|
66.7 |
|
|
|
160.36 |
|
|
|
299.89 |
|
|
|
9.7 |
|
|
|
11.9 |
|
Los Angeles |
|
|
4 |
|
|
|
1,726 |
|
|
|
221.18 |
|
|
|
83.0 |
|
|
|
183.59 |
|
|
|
285.86 |
|
|
|
214.61 |
|
|
|
85.3 |
|
|
|
183.13 |
|
|
|
282.11 |
|
|
|
0.3 |
|
|
|
1.3 |
|
Boston |
|
|
3 |
|
|
|
2,715 |
|
|
|
232.62 |
|
|
|
78.4 |
|
|
|
182.29 |
|
|
|
261.40 |
|
|
|
243.18 |
|
|
|
74.4 |
|
|
|
180.90 |
|
|
|
250.17 |
|
|
|
0.8 |
|
|
|
4.5 |
|
San Francisco/San Jose |
|
|
5 |
|
|
|
2,360 |
|
|
|
232.31 |
|
|
|
76.7 |
|
|
|
178.21 |
|
|
|
253.66 |
|
|
|
225.77 |
|
|
|
78.0 |
|
|
|
176.06 |
|
|
|
245.43 |
|
|
|
1.2 |
|
|
|
3.4 |
|
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
219.68 |
|
|
|
86.6 |
|
|
|
190.20 |
|
|
|
316.27 |
|
|
|
217.30 |
|
|
|
81.7 |
|
|
|
177.53 |
|
|
|
308.98 |
|
|
|
7.1 |
|
|
|
2.4 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
204.05 |
|
|
|
76.8 |
|
|
|
156.81 |
|
|
|
232.64 |
|
|
|
214.74 |
|
|
|
77.4 |
|
|
|
166.24 |
|
|
|
243.07 |
|
|
|
(5.7 |
) |
|
|
(4.3 |
) |
Chicago |
|
|
4 |
|
|
|
1,816 |
|
|
|
207.41 |
|
|
|
76.1 |
|
|
|
157.94 |
|
|
|
218.58 |
|
|
|
212.64 |
|
|
|
76.4 |
|
|
|
162.37 |
|
|
|
222.77 |
|
|
|
(2.7 |
) |
|
|
(1.9 |
) |
Orange County |
|
|
2 |
|
|
|
925 |
|
|
|
184.62 |
|
|
|
75.1 |
|
|
|
138.66 |
|
|
|
241.42 |
|
|
|
181.36 |
|
|
|
76.9 |
|
|
|
139.48 |
|
|
|
239.04 |
|
|
|
(0.6 |
) |
|
|
1.0 |
|
Atlanta |
|
|
4 |
|
|
|
1,682 |
|
|
|
181.35 |
|
|
|
80.1 |
|
|
|
145.28 |
|
|
|
241.06 |
|
|
|
186.90 |
|
|
|
73.8 |
|
|
|
137.99 |
|
|
|
223.79 |
|
|
|
5.3 |
|
|
|
7.7 |
|
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
185.82 |
|
|
|
76.5 |
|
|
|
142.21 |
|
|
|
209.94 |
|
|
|
190.46 |
|
|
|
78.7 |
|
|
|
149.84 |
|
|
|
222.56 |
|
|
|
(5.1 |
) |
|
|
(5.7 |
) |
Northern Virginia |
|
|
3 |
|
|
|
1,252 |
|
|
|
211.84 |
|
|
|
67.4 |
|
|
|
142.76 |
|
|
|
282.58 |
|
|
|
203.21 |
|
|
|
69.2 |
|
|
|
140.70 |
|
|
|
292.18 |
|
|
|
1.5 |
|
|
|
(3.3 |
) |
San Antonio |
|
|
1 |
|
|
|
512 |
|
|
|
193.44 |
|
|
|
73.6 |
|
|
|
142.40 |
|
|
|
195.85 |
|
|
|
197.54 |
|
|
|
75.0 |
|
|
|
148.18 |
|
|
|
203.52 |
|
|
|
(3.9 |
) |
|
|
(3.8 |
) |
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
158.51 |
|
|
|
79.5 |
|
|
|
126.01 |
|
|
|
173.97 |
|
|
|
163.64 |
|
|
|
79.3 |
|
|
|
129.69 |
|
|
|
178.32 |
|
|
|
(2.8 |
) |
|
|
(2.4 |
) |
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
176.32 |
|
|
|
70.9 |
|
|
|
124.95 |
|
|
|
188.16 |
|
|
|
176.54 |
|
|
|
71.0 |
|
|
|
125.33 |
|
|
|
191.41 |
|
|
|
(0.3 |
) |
|
|
(1.7 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
167.45 |
|
|
|
62.9 |
|
|
|
105.31 |
|
|
|
174.21 |
|
|
|
163.45 |
|
|
|
66.1 |
|
|
|
107.99 |
|
|
|
162.53 |
|
|
|
(2.5 |
) |
|
|
7.2 |
|
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
189.16 |
|
|
|
63.0 |
|
|
|
119.23 |
|
|
|
300.42 |
|
|
|
184.78 |
|
|
|
61.0 |
|
|
|
112.67 |
|
|
|
255.19 |
|
|
|
5.8 |
|
|
|
17.7 |
|
Other |
|
|
5 |
|
|
|
1,924 |
|
|
|
169.86 |
|
|
|
79.6 |
|
|
|
135.24 |
|
|
|
201.89 |
|
|
|
164.71 |
|
|
|
77.9 |
|
|
|
128.36 |
|
|
|
194.98 |
|
|
|
5.4 |
|
|
|
3.5 |
|
Domestic |
|
|
67 |
|
|
|
39,780 |
|
|
|
237.30 |
|
|
|
76.7 |
|
|
|
182.04 |
|
|
|
297.16 |
|
|
|
237.26 |
|
|
|
76.9 |
|
|
|
182.45 |
|
|
|
292.13 |
|
|
|
(0.2 |
) |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
149.12 |
|
|
|
70.1 |
|
|
|
104.55 |
|
|
|
165.87 |
|
|
|
147.36 |
|
|
|
65.4 |
|
|
|
96.35 |
|
|
|
152.3 |
|
|
|
8.5 |
|
|
|
8.9 |
|
All Locations - |
|
|
72 |
|
|
|
41,279 |
|
|
|
234.37 |
|
|
|
76.5 |
|
|
|
179.22 |
|
|
|
292.39 |
|
|
|
234.47 |
|
|
|
76.5 |
|
|
|
179.32 |
|
|
|
287.05 |
|
|
|
(0.1 |
) |
|
|
1.9 |
|
Constant US$ |
|
|
All Owned
Hotels in Constant US$
(2) |
|
|
|
As of December 31, 2019 |
|
|
Quarter ended December 31, 2019 |
|
|
Quarter ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
PercentChange inRevPAR |
|
|
PercentChange inTotal RevPAR |
|
Occupancy |
Occupancy |
Percentage |
Percentage |
Comparable Hotels |
|
|
72 |
|
|
|
41,279 |
|
|
$ |
234.37 |
|
|
|
76.5 |
% |
|
$ |
179.22 |
|
|
$ |
292.39 |
|
|
$ |
234.47 |
|
|
|
76.5 |
% |
|
$ |
179.32 |
|
|
$ |
287.05 |
|
|
|
(0.1 |
)% |
|
|
1.9 |
% |
Non-comparable Hotels (Pro
forma) |
|
|
8 |
|
|
|
5,391 |
|
|
|
340.58 |
|
|
|
73.4 |
|
|
|
250.13 |
|
|
|
410.27 |
|
|
|
316.79 |
|
|
|
72.6 |
|
|
|
230.07 |
|
|
|
374.94 |
|
|
|
8.7 |
|
|
|
9.4 |
|
All Hotels |
|
|
80 |
|
|
|
46,670 |
|
|
|
246.29 |
|
|
|
76.1 |
|
|
|
187.47 |
|
|
|
306.11 |
|
|
|
243.62 |
|
|
|
76.0 |
|
|
|
185.22 |
|
|
|
297.28 |
|
|
|
1.2 |
|
|
|
3.0 |
|
|
|
Comparable
Hotels in Nominal US$ |
|
|
|
As of December 31, 2019 |
|
|
Quarter ended December 31, 2019 |
|
|
Quarter ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
Percent |
|
|
PercentChange inTotal RevPAR |
|
Occupancy |
Occupancy |
Change in |
Percentage |
Percentage |
RevPAR |
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
149.12 |
|
|
|
70.1 |
% |
|
$ |
104.55 |
|
|
$ |
165.87 |
|
|
$ |
150.69 |
|
|
|
65.4 |
% |
|
$ |
98.53 |
|
|
$ |
155.16 |
|
|
|
6.1 |
% |
|
|
6.9 |
% |
Domestic |
|
|
67 |
|
|
|
39,780 |
|
|
|
237.30 |
|
|
|
76.7 |
|
|
|
182.04 |
|
|
|
297.16 |
|
|
|
237.26 |
|
|
|
76.9 |
|
|
|
182.45 |
|
|
|
292.13 |
|
|
|
(0.2 |
) |
|
|
1.7 |
|
All Locations |
|
|
72 |
|
|
|
41,279 |
|
|
|
234.37 |
|
|
|
76.5 |
|
|
|
179.22 |
|
|
|
292.39 |
|
|
|
234.57 |
|
|
|
76.5 |
|
|
|
179.40 |
|
|
|
287.15 |
|
|
|
(0.1 |
) |
|
|
1.8 |
|
|
HOST HOTELS & RESORTS,
INC.Hotel Operating Data for Consolidated Hotels
(1)
Comparable
Hotels by Location in Constant
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019 |
|
|
Year ended December 31, 2019 |
|
|
Year ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
Percent |
|
|
PercentChange inTotal RevPAR |
|
Occupancy |
Occupancy |
Change in |
Percentage |
Percentage |
RevPAR |
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
375.46 |
|
|
|
88.2 |
% |
|
$ |
331.08 |
|
|
$ |
502.37 |
|
|
$ |
361.68 |
|
|
|
90.3 |
% |
|
$ |
326.71 |
|
|
$ |
493.57 |
|
|
|
1.3 |
% |
|
|
1.8 |
% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
372.94 |
|
|
|
73.5 |
|
|
|
274.07 |
|
|
|
613.80 |
|
|
|
364.02 |
|
|
|
74.0 |
|
|
|
269.32 |
|
|
|
601.08 |
|
|
|
1.8 |
|
|
|
2.1 |
|
New York |
|
|
3 |
|
|
|
4,259 |
|
|
|
286.36 |
|
|
|
84.8 |
|
|
|
242.96 |
|
|
|
359.92 |
|
|
|
295.37 |
|
|
|
87.5 |
|
|
|
258.44 |
|
|
|
379.73 |
|
|
|
(6.0 |
) |
|
|
(5.2 |
) |
Phoenix |
|
|
3 |
|
|
|
1,654 |
|
|
|
292.50 |
|
|
|
71.9 |
|
|
|
210.32 |
|
|
|
476.62 |
|
|
|
275.28 |
|
|
|
72.2 |
|
|
|
198.75 |
|
|
|
438.50 |
|
|
|
5.8 |
|
|
|
8.7 |
|
Washington, D.C.
(CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
245.82 |
|
|
|
81.5 |
|
|
|
200.27 |
|
|
|
288.52 |
|
|
|
245.96 |
|
|
|
80.4 |
|
|
|
197.70 |
|
|
|
279.59 |
|
|
|
1.3 |
|
|
|
3.2 |
|
San Diego |
|
|
3 |
|
|
|
3,288 |
|
|
|
249.41 |
|
|
|
79.4 |
|
|
|
198.02 |
|
|
|
360.49 |
|
|
|
247.94 |
|
|
|
82.4 |
|
|
|
204.31 |
|
|
|
353.53 |
|
|
|
(3.1 |
) |
|
|
2.0 |
|
Florida Gulf Coast |
|
|
3 |
|
|
|
940 |
|
|
|
266.42 |
|
|
|
74.1 |
|
|
|
197.37 |
|
|
|
365.12 |
|
|
|
260.27 |
|
|
|
71.3 |
|
|
|
185.67 |
|
|
|
339.90 |
|
|
|
6.3 |
|
|
|
7.4 |
|
Los Angeles |
|
|
4 |
|
|
|
1,726 |
|
|
|
228.14 |
|
|
|
86.5 |
|
|
|
197.26 |
|
|
|
294.81 |
|
|
|
228.36 |
|
|
|
87.8 |
|
|
|
200.45 |
|
|
|
296.47 |
|
|
|
(1.6 |
) |
|
|
(0.6 |
) |
Boston |
|
|
3 |
|
|
|
2,715 |
|
|
|
237.24 |
|
|
|
81.7 |
|
|
|
193.83 |
|
|
|
268.74 |
|
|
|
239.17 |
|
|
|
81.3 |
|
|
|
194.41 |
|
|
|
263.15 |
|
|
|
(0.3 |
) |
|
|
2.1 |
|
San Francisco/San
Jose |
|
|
5 |
|
|
|
2,360 |
|
|
|
238.69 |
|
|
|
78.9 |
|
|
|
188.31 |
|
|
|
259.04 |
|
|
|
229.16 |
|
|
|
82.6 |
|
|
|
189.38 |
|
|
|
260.50 |
|
|
|
(0.6 |
) |
|
|
(0.6 |
) |
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
217.01 |
|
|
|
85.7 |
|
|
|
185.91 |
|
|
|
305.37 |
|
|
|
209.57 |
|
|
|
85.0 |
|
|
|
178.20 |
|
|
|
298.53 |
|
|
|
4.3 |
|
|
|
2.3 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
225.12 |
|
|
|
82.4 |
|
|
|
185.50 |
|
|
|
250.12 |
|
|
|
240.44 |
|
|
|
83.5 |
|
|
|
200.65 |
|
|
|
268.07 |
|
|
|
(7.6 |
) |
|
|
(6.7 |
) |
Chicago |
|
|
4 |
|
|
|
1,816 |
|
|
|
207.67 |
|
|
|
76.2 |
|
|
|
158.19 |
|
|
|
222.83 |
|
|
|
213.77 |
|
|
|
78.4 |
|
|
|
167.70 |
|
|
|
228.22 |
|
|
|
(5.7 |
) |
|
|
(2.4 |
) |
Orange County |
|
|
2 |
|
|
|
925 |
|
|
|
195.76 |
|
|
|
79.1 |
|
|
|
154.82 |
|
|
|
258.78 |
|
|
|
196.84 |
|
|
|
79.6 |
|
|
|
156.66 |
|
|
|
256.14 |
|
|
|
(1.2 |
) |
|
|
1.0 |
|
Atlanta |
|
|
4 |
|
|
|
1,682 |
|
|
|
190.59 |
|
|
|
79.8 |
|
|
|
152.11 |
|
|
|
241.34 |
|
|
|
187.23 |
|
|
|
77.2 |
|
|
|
144.60 |
|
|
|
229.76 |
|
|
|
5.2 |
|
|
|
5.0 |
|
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
187.65 |
|
|
|
79.0 |
|
|
|
148.30 |
|
|
|
216.97 |
|
|
|
181.73 |
|
|
|
80.1 |
|
|
|
145.64 |
|
|
|
210.62 |
|
|
|
1.8 |
|
|
|
3.0 |
|
Northern Virginia |
|
|
3 |
|
|
|
1,252 |
|
|
|
208.94 |
|
|
|
70.9 |
|
|
|
148.19 |
|
|
|
255.14 |
|
|
|
203.28 |
|
|
|
72.4 |
|
|
|
147.10 |
|
|
|
260.69 |
|
|
|
0.7 |
|
|
|
(2.1 |
) |
San Antonio |
|
|
1 |
|
|
|
512 |
|
|
|
188.01 |
|
|
|
77.1 |
|
|
|
144.93 |
|
|
|
197.57 |
|
|
|
193.98 |
|
|
|
75.3 |
|
|
|
146.16 |
|
|
|
196.74 |
|
|
|
(0.8 |
) |
|
|
0.4 |
|
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
161.84 |
|
|
|
80.0 |
|
|
|
129.50 |
|
|
|
178.68 |
|
|
|
160.37 |
|
|
|
80.4 |
|
|
|
128.90 |
|
|
|
178.75 |
|
|
|
0.5 |
|
|
|
— |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
177.93 |
|
|
|
72.0 |
|
|
|
128.14 |
|
|
|
185.48 |
|
|
|
176.25 |
|
|
|
72.3 |
|
|
|
127.50 |
|
|
|
188.90 |
|
|
|
0.5 |
|
|
|
(1.8 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
173.47 |
|
|
|
72.9 |
|
|
|
126.48 |
|
|
|
190.45 |
|
|
|
166.34 |
|
|
|
75.1 |
|
|
|
124.93 |
|
|
|
181.69 |
|
|
|
1.2 |
|
|
|
4.8 |
|
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
184.12 |
|
|
|
67.9 |
|
|
|
125.02 |
|
|
|
302.71 |
|
|
|
184.98 |
|
|
|
70.4 |
|
|
|
130.17 |
|
|
|
297.31 |
|
|
|
(4.0 |
) |
|
|
1.8 |
|
Other |
|
|
5 |
|
|
|
1,924 |
|
|
|
173.54 |
|
|
|
80.9 |
|
|
|
140.44 |
|
|
|
202.58 |
|
|
|
169.08 |
|
|
|
79.8 |
|
|
|
134.88 |
|
|
|
197.83 |
|
|
|
4.1 |
|
|
|
2.4 |
|
Domestic |
|
|
67 |
|
|
|
39,780 |
|
|
|
235.37 |
|
|
|
79.2 |
|
|
|
186.42 |
|
|
|
296.89 |
|
|
|
234.34 |
|
|
|
80.2 |
|
|
|
187.93 |
|
|
|
294.25 |
|
|
|
(0.8 |
) |
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
153.01 |
|
|
|
70.9 |
|
|
|
108.44 |
|
|
|
160.74 |
|
|
|
152.76 |
|
|
|
66.2 |
|
|
|
101.19 |
|
|
|
151.91 |
|
|
|
7.2 |
|
|
|
5.8 |
|
All Locations - |
|
|
72 |
|
|
|
41,279 |
|
|
|
232.68 |
|
|
|
78.9 |
|
|
|
183.59 |
|
|
|
291.94 |
|
|
|
231.88 |
|
|
|
79.7 |
|
|
|
184.78 |
|
|
|
289.08 |
|
|
|
(0.6 |
) |
|
|
1.0 |
|
Constant US$ |
|
|
|
|
All Owned
Hotels in Constant US$
(2) |
|
|
|
As of December 31, 2019 |
|
|
Year ended December 31, 2019 |
|
|
Year ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
Percent |
|
|
PercentChange inTotal RevPAR |
|
Occupancy |
Occupancy |
Change in |
Percentage |
Percentage |
RevPAR |
Comparable Hotels |
|
|
72 |
|
|
|
41,279 |
|
|
$ |
232.68 |
|
|
|
78.9 |
% |
|
$ |
183.59 |
|
|
$ |
291.94 |
|
|
$ |
231.88 |
|
|
|
79.7 |
% |
|
$ |
184.78 |
|
|
$ |
289.08 |
|
|
|
(0.6 |
)% |
|
|
1.0 |
% |
Non-comparable Hotels (Pro
forma) |
|
|
8 |
|
|
|
5,391 |
|
|
|
338.07 |
|
|
|
76.5 |
|
|
|
258.79 |
|
|
|
416.64 |
|
|
|
320.97 |
|
|
|
79.0 |
|
|
|
253.43 |
|
|
|
400.97 |
|
|
|
2.1 |
|
|
|
3.9 |
|
All Hotels |
|
|
80 |
|
|
|
46,670 |
|
|
|
244.63 |
|
|
|
78.6 |
|
|
|
192.35 |
|
|
|
306.46 |
|
|
|
242.16 |
|
|
|
79.6 |
|
|
|
192.77 |
|
|
|
302.10 |
|
|
|
(0.2 |
) |
|
|
1.4 |
|
|
|
Comparable
Hotels in Nominal US$ |
|
|
|
As of December 31, 2019 |
|
|
Year ended December 31, 2019 |
|
|
Year ended December 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
AverageRoom Rate |
|
|
Average |
|
|
RevPAR |
|
|
Total RevPAR |
|
|
Percent |
|
|
PercentChange inTotal RevPAR |
|
Occupancy |
Occupancy |
Change in |
Percentage |
Percentage |
RevPAR |
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
153.01 |
|
|
|
70.9 |
% |
|
$ |
108.44 |
|
|
$ |
160.74 |
|
|
$ |
158.60 |
|
|
|
66.2 |
% |
|
$ |
105.06 |
|
|
$ |
157.44 |
|
|
|
3.2 |
% |
|
|
2.1 |
% |
Domestic |
|
|
67 |
|
|
|
39,780 |
|
|
|
235.37 |
|
|
|
79.2 |
|
|
|
186.42 |
|
|
|
296.89 |
|
|
|
234.34 |
|
|
|
80.2 |
|
|
|
187.93 |
|
|
|
294.25 |
|
|
|
(0.8 |
) |
|
|
0.9 |
|
All Locations |
|
|
72 |
|
|
|
41,279 |
|
|
|
232.68 |
|
|
|
78.9 |
|
|
|
183.59 |
|
|
|
291.94 |
|
|
|
232.06 |
|
|
|
79.7 |
|
|
|
184.92 |
|
|
|
289.28 |
|
|
|
(0.7 |
) |
|
|
0.9 |
|
|
___________
(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, 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 hotel 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 hotel 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 hotel 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 four 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 increase of 8.7% and 2.1% for the quarter and
full year, respectively, for these eight 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, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Number of hotels |
|
|
72 |
|
|
|
72 |
|
|
|
72 |
|
|
|
72 |
|
Number of rooms |
|
|
41,279 |
|
|
|
41,279 |
|
|
|
41,279 |
|
|
|
41,279 |
|
Change in comparable hotel
Total RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant US$ |
|
|
1.9 |
% |
|
|
— |
|
|
|
1.0 |
% |
|
|
— |
|
Nominal US$ |
|
|
1.8 |
% |
|
|
— |
|
|
|
0.9 |
% |
|
|
— |
|
Change in comparable hotel
RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant US$ |
|
|
(0.1 |
)% |
|
|
— |
|
|
|
(0.6 |
)% |
|
|
— |
|
Nominal US$ |
|
|
(0.1 |
)% |
|
|
— |
|
|
|
(0.7 |
)% |
|
|
— |
|
Operating profit margin
(2) |
|
|
12.4 |
% |
|
|
13.8 |
% |
|
|
14.6 |
% |
|
|
9.6 |
% |
Comparable hotel EBITDA margin
(2) |
|
|
28.1 |
% |
|
|
28.2 |
% |
|
|
29.0 |
% |
|
|
29.05 |
% |
Food and beverage profit
margin (2) |
|
|
32.8 |
% |
|
|
32.6 |
% |
|
|
32.0 |
% |
|
|
31.7 |
% |
Comparable hotel food and
beverage profit margin (2) |
|
|
34.6 |
% |
|
|
34.8 |
% |
|
|
33.2 |
% |
|
|
33.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
81 |
|
|
$ |
306 |
|
|
$ |
932 |
|
|
$ |
1,151 |
|
Depreciation and
amortization |
|
|
175 |
|
|
|
165 |
|
|
|
676 |
|
|
|
944 |
|
Interest expense |
|
|
90 |
|
|
|
42 |
|
|
|
222 |
|
|
|
176 |
|
Provision for income
taxes |
|
|
8 |
|
|
|
87 |
|
|
|
30 |
|
|
|
150 |
|
Gain on sale of property and
corporate level income/expense |
|
|
14 |
|
|
|
(225 |
) |
|
|
(278 |
) |
|
|
(843 |
) |
Non-comparable hotel results,
net (3) |
|
|
(56 |
) |
|
|
(67 |
) |
|
|
(307 |
) |
|
|
(312 |
) |
Comparable hotel
EBITDA |
|
$ |
312 |
|
|
$ |
308 |
|
|
$ |
1,275 |
|
|
$ |
1,266 |
|
|
|
|
Quarter ended December 31, 2019 |
|
|
Quarter ended December 31, 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 |
|
$ |
813 |
|
|
$ |
(133 |
) |
|
$ |
— |
|
|
$ |
680 |
|
|
$ |
856 |
|
|
$ |
(175 |
) |
|
$ |
— |
|
|
$ |
681 |
Food and beverage |
|
|
424 |
|
|
|
(68 |
) |
|
|
— |
|
|
|
356 |
|
|
|
417 |
|
|
|
(72 |
) |
|
|
— |
|
|
|
345 |
Other |
|
|
97 |
|
|
|
(23 |
) |
|
|
— |
|
|
|
74 |
|
|
|
88 |
|
|
|
(24 |
) |
|
|
— |
|
|
|
64 |
Total revenues |
|
|
1,334 |
|
|
|
(224 |
) |
|
|
— |
|
|
|
1,110 |
|
|
|
1,361 |
|
|
|
(271 |
) |
|
|
— |
|
|
|
1,090 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
209 |
|
|
|
(35 |
) |
|
|
— |
|
|
|
174 |
|
|
|
222 |
|
|
|
(49 |
) |
|
|
— |
|
|
|
173 |
Food and beverage |
|
|
285 |
|
|
|
(52 |
) |
|
|
— |
|
|
|
233 |
|
|
|
281 |
|
|
|
(56 |
) |
|
|
— |
|
|
|
225 |
Other |
|
|
473 |
|
|
|
(82 |
) |
|
|
— |
|
|
|
391 |
|
|
|
490 |
|
|
|
(106 |
) |
|
|
— |
|
|
|
384 |
Depreciation and amortization |
|
|
175 |
|
|
|
— |
|
|
|
(175 |
) |
|
|
— |
|
|
|
165 |
|
|
|
— |
|
|
|
(165 |
) |
|
|
— |
Corporate and other expenses |
|
|
27 |
|
|
|
— |
|
|
|
(27 |
) |
|
|
— |
|
|
|
22 |
|
|
|
— |
|
|
|
(22 |
) |
|
|
— |
Gain on insurance and business interruption settlements |
|
|
(1 |
) |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
(7 |
) |
|
|
7 |
|
|
|
— |
|
|
|
— |
Total expenses |
|
|
1,168 |
|
|
|
(168 |
) |
|
|
(202 |
) |
|
|
798 |
|
|
|
1,173 |
|
|
|
(204 |
) |
|
|
(187 |
) |
|
|
782 |
Operating Profit -
Comparable Hotel EBITDA |
|
$ |
166 |
|
|
$ |
(56 |
) |
|
$ |
202 |
|
|
$ |
312 |
|
|
$ |
188 |
|
|
$ |
(67 |
) |
|
$ |
187 |
|
|
$ |
308 |
HOST HOTELS & RESORTS,
INC. Schedule of Comparable Hotel Results
(1)(unaudited, in millions, except hotel statistics)
|
|
Year ended December 31, 2019 |
|
|
Year ended December 31, 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 |
|
$ |
3,431 |
|
|
$ |
(666 |
) |
|
$ |
— |
|
|
$ |
2,765 |
|
|
$ |
3,547 |
|
|
$ |
(763 |
) |
|
$ |
— |
|
|
$ |
2,784 |
Food and beverage |
|
|
1,647 |
|
|
|
(304 |
) |
|
|
— |
|
|
|
1,343 |
|
|
|
1,616 |
|
|
|
(295 |
) |
|
|
— |
|
|
|
1,321 |
Other |
|
|
391 |
|
|
|
(102 |
) |
|
|
— |
|
|
|
289 |
|
|
|
361 |
|
|
|
(110 |
) |
|
|
— |
|
|
|
251 |
Total revenues |
|
|
5,469 |
|
|
|
(1,072 |
) |
|
|
— |
|
|
|
4,397 |
|
|
|
5,524 |
|
|
|
(1,168 |
) |
|
|
— |
|
|
|
4,356 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
873 |
|
|
|
(172 |
) |
|
|
— |
|
|
|
701 |
|
|
|
918 |
|
|
|
(213 |
) |
|
|
— |
|
|
|
705 |
Food and beverage |
|
|
1,120 |
|
|
|
(223 |
) |
|
|
— |
|
|
|
897 |
|
|
|
1,103 |
|
|
|
(224 |
) |
|
|
— |
|
|
|
879 |
Other |
|
|
1,899 |
|
|
|
(375 |
) |
|
|
— |
|
|
|
1,524 |
|
|
|
1,932 |
|
|
|
(426 |
) |
|
|
— |
|
|
|
1,506 |
Depreciation and amortization |
|
|
676 |
|
|
|
— |
|
|
|
(676 |
) |
|
|
— |
|
|
|
944 |
|
|
|
— |
|
|
|
(944 |
) |
|
|
— |
Corporate and other expenses |
|
|
107 |
|
|
|
— |
|
|
|
(107 |
) |
|
|
— |
|
|
|
104 |
|
|
|
— |
|
|
|
(104 |
) |
|
|
— |
Gain on insurance and business interruption
settlements |
|
|
(5 |
) |
|
|
5 |
|
|
|
— |
|
|
|
— |
|
|
|
(7 |
) |
|
|
7 |
|
|
|
— |
|
|
|
— |
Total expenses |
|
|
4,670 |
|
|
|
(765 |
) |
|
|
(783 |
) |
|
|
3,122 |
|
|
|
4,994 |
|
|
|
(856 |
) |
|
|
(1,048 |
) |
|
|
3,090 |
Operating Profit -
Comparable Hotel EBITDA |
|
$ |
799 |
|
|
$ |
(307 |
) |
|
$ |
783 |
|
|
$ |
1,275 |
|
|
$ |
530 |
|
|
$ |
(312 |
) |
|
$ |
1,048 |
|
|
$ |
1,266 |
___________
(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 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, (ii) gains on insurance settlements and
business interruption proceeds, and (iii) the results of our leased
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 |
|
|
Year ended |
December 31, |
December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
Net income |
|
$ |
81 |
|
|
$ |
306 |
|
|
$ |
932 |
|
|
$ |
1,151 |
Interest expense |
|
|
90 |
|
|
|
42 |
|
|
|
222 |
|
|
|
176 |
Depreciation and amortization |
|
|
167 |
|
|
|
165 |
|
|
|
662 |
|
|
|
684 |
Income taxes |
|
|
8 |
|
|
|
87 |
|
|
|
30 |
|
|
|
150 |
EBITDA |
|
|
346 |
|
|
|
600 |
|
|
|
1,846 |
|
|
|
2,161 |
Gain on dispositions (2) |
|
|
(2 |
) |
|
|
(238 |
) |
|
|
(334 |
) |
|
|
(903 |
Non-cash impairment expense |
|
|
8 |
|
|
|
— |
|
|
|
14 |
|
|
|
260 |
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of Euro JV (3) |
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(14 |
Equity in earnings of affiliates other than Euro JV |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(14 |
) |
|
|
(16 |
Pro rata EBITDAre of Euro JV (3) |
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
|
45 |
Pro rata EBITDAre of equity investments other than Euro
JV |
|
|
4 |
|
|
|
6 |
|
|
|
26 |
|
|
|
29 |
EBITDAre |
|
|
355 |
|
|
|
372 |
|
|
|
1,538 |
|
|
|
1,562 |
Adjustments to EBITDAre: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
— |
Adjusted
EBITDAre |
|
$ |
355 |
|
|
$ |
372 |
|
|
$ |
1,534 |
|
|
$ |
1,562 |
|
___________
(1) See the Notes to Financial Information for
discussion of non-GAAP measures. (2) Reflects the
sale of 14 hotels in 2019 and four hotels, the New York Marriott
Marquis retail area and the European Joint Venture (“Euro JV”) in
2018. (3) Represents our share of earnings and pro rata
EBITDAre from the 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 |
|
|
Year ended |
|
December 31, |
December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net
income |
|
$ |
81 |
|
|
$ |
306 |
|
|
$ |
932 |
|
|
$ |
1,151 |
|
Less: Net income attributable to non-controlling
interests |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(12 |
) |
|
|
(64 |
) |
Net income
attributable to Host Inc. |
|
|
80 |
|
|
|
303 |
|
|
|
920 |
|
|
|
1,087 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on dispositions (2) |
|
|
(2 |
) |
|
|
(238 |
) |
|
|
(334 |
) |
|
|
(903 |
) |
Tax on dispositions |
|
|
(3 |
) |
|
|
84 |
|
|
|
(6 |
) |
|
|
113 |
|
Gain on property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
Depreciation and amortization |
|
|
164 |
|
|
|
164 |
|
|
|
657 |
|
|
|
680 |
|
Non-cash impairment expense |
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
|
260 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
(14 |
) |
|
|
(30 |
) |
Pro rata FFO of equity investments |
|
|
4 |
|
|
|
9 |
|
|
|
20 |
|
|
|
53 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO adjustment for non-controlling partnerships |
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
50 |
|
FFO adjustments for non-controlling interests of Host
L.P. |
|
|
(2 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
(2 |
) |
NAREIT FFO
(3) |
|
|
240 |
|
|
|
315 |
|
|
|
1,242 |
|
|
|
1,308 |
|
Adjustments to NAREIT
FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on debt extinguishment |
|
|
53 |
|
|
|
— |
|
|
|
57 |
|
|
|
— |
|
Loss attributable to non-controlling interests |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
Adjusted
FFO |
|
$ |
292 |
|
|
$ |
315 |
|
|
$ |
1,298 |
|
|
$ |
1,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation on a
per share basis
(4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding - EPS, |
|
|
717.1 |
|
|
|
741.0 |
|
|
|
731.1 |
|
|
|
740.6 |
|
NAREIT FFO and Adjusted FFO |
Diluted earnings per
common share |
|
$ |
.11 |
|
|
$ |
.41 |
|
|
$ |
1.26 |
|
|
$ |
1.47 |
|
NAREIT FFO per diluted
share |
|
$ |
.33 |
|
|
$ |
.43 |
|
|
$ |
1.70 |
|
|
$ |
1.77 |
|
Adjusted FFO per
diluted share |
|
$ |
.41 |
|
|
$ |
.43 |
|
|
$ |
1.78 |
|
|
$ |
1.77 |
|
___________
(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, NAREIT FFO per
diluted share and Adjusted FFO per diluted share are adjusted for
the effects of dilutive securities. Dilutive securities may include
shares granted under comprehensive stock plans, preferred OP units
held by non-controlling partners and other non-controlling
interests that have the option to convert their limited partnership
interests to common OP units. No effect is shown for securities if
they are anti-dilutive.
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income to EBITDA,
EBITDAre, and Adjusted EBITDAre
andDiluted Earnings per Common
Share to NAREIT and Adjusted
Funds From Operations per Diluted Share for 2020 Forecasts
(1)(unaudited, in millions, except per share amounts)
|
Full Year 2020 |
|
|
Low-end |
|
|
High-end |
|
of range |
of range |
Net
income |
$ |
496 |
|
|
$ |
539 |
|
Interest expense |
|
150 |
|
|
|
150 |
|
Depreciation and amortization |
|
676 |
|
|
|
676 |
|
Income taxes |
|
23 |
|
|
|
25 |
|
EBITDA |
|
1,345 |
|
|
|
1,390 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata EBITDAre of equity investments |
|
25 |
|
|
|
25 |
|
EBITDAre |
|
1,360 |
|
|
|
1,405 |
|
Adjusted
EBITDAre |
$ |
1,360 |
|
|
$ |
1,405 |
|
|
|
|
|
|
|
|
|
|
Full Year 2020 |
|
|
Low-end |
|
|
High-end |
|
of range |
of range |
Net
income |
$ |
496 |
|
|
$ |
539 |
|
Less: Net income attributable
to non-controlling interests |
|
(6 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
490 |
|
|
|
532 |
|
Adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
674 |
|
|
|
674 |
|
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 partnerships |
|
(1 |
) |
|
|
(1 |
) |
FFO adjustment for non-controlling interests of Host LP |
|
(7 |
) |
|
|
(7 |
) |
NAREIT
FFO |
|
1,164 |
|
|
|
1,206 |
|
Adjusted
FFO |
$ |
1,164 |
|
|
$ |
1,206 |
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares - EPS, NAREIT FFO and Adjusted
FFO |
|
706.3 |
|
|
|
706.3 |
|
Diluted earnings per
common share |
$ |
0.69 |
|
|
$ |
0.75 |
|
NAREIT FFO per diluted
share |
$ |
1.65 |
|
|
$ |
1.71 |
|
Adjusted FFO per
diluted share |
$ |
1.65 |
|
|
$ |
1.71 |
|
___________
(1) The forecasts are based on the below
assumptions:
- Comparable hotel RevPAR in constant US$ will remain flat or
increase 1.0%, to $187 to $189, for the low and high end of
the forecast range.
- Comparable hotel EBITDA margins will decrease 165 basis points
to 125 basis points for the low and high ends of the
forecasted RevPAR range, respectively.
- We expect to spend approximately $310 million to
$360 million on ROI capital expenditures and approximately
$240 million to $290 million on renewal and replacement
capital expenditures.
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 2020 Forecasts (1)(unaudited,
in millions, except hotel statistics)
|
|
|
|
|
|
|
|
|
|
Full Year 2020 |
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
Operating profit
margin (2) |
|
|
|
12.2 |
% |
|
|
12.9 |
% |
Comparable hotel
EBITDA margin (3) |
|
|
|
28.0 |
% |
|
|
28.4 |
% |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
496 |
|
|
$ |
539 |
|
Depreciation and
amortization |
|
|
|
676 |
|
|
|
676 |
|
Interest
expense |
|
|
|
150 |
|
|
|
150 |
|
Provision for
income taxes |
|
|
|
23 |
|
|
|
25 |
|
Gain on sale of
property and corporate level income/expense |
|
|
|
71 |
|
|
|
71 |
|
Non-comparable
hotel results, net (4) |
|
|
|
(175 |
) |
|
|
(183) |
|
Comparable
hotel EBITDA |
|
|
$ |
1,241 |
|
|
$ |
1,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,264 |
|
|
$ |
(496 |
) |
|
$ |
— |
|
|
$ |
2,768 |
|
Food and beverage |
|
|
1,575 |
|
|
|
(228 |
) |
|
|
— |
|
|
|
1,347 |
|
Other |
|
|
381 |
|
|
|
(64 |
) |
|
|
— |
|
|
|
317 |
|
Total revenues |
|
|
5,220 |
|
|
|
(788 |
) |
|
|
— |
|
|
|
4,432 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,804 |
|
|
|
(613 |
) |
|
|
— |
|
|
|
3,191 |
|
Depreciation |
|
|
676 |
|
|
|
— |
|
|
|
(676 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
103 |
|
|
|
— |
|
|
|
(103 |
) |
|
|
— |
|
Total expenses |
|
|
4,583 |
|
|
|
(613 |
) |
|
|
(779 |
) |
|
|
3,191 |
|
Operating Profit -
Comparable Hotel EBITDA |
|
$ |
637 |
|
|
$ |
(175 |
) |
|
$ |
779 |
|
|
$ |
1,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,297 |
|
|
$ |
(501 |
) |
|
$ |
— |
|
|
$ |
2,796 |
|
Food and beverage |
|
|
1,620 |
|
|
|
(235 |
) |
|
|
— |
|
|
|
1,385 |
|
Other |
|
|
387 |
|
|
|
(65 |
) |
|
|
— |
|
|
|
322 |
|
Total revenues |
|
|
5,304 |
|
|
|
(801 |
) |
|
|
— |
|
|
|
4,503 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,843 |
|
|
|
(618 |
) |
|
|
— |
|
|
|
3,225 |
|
Depreciation and amortization |
|
|
676 |
|
|
|
— |
|
|
|
(676 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
103 |
|
|
|
— |
|
|
|
(103 |
) |
|
|
— |
|
Total expenses |
|
|
4,622 |
|
|
|
(618 |
) |
|
|
(779 |
) |
|
|
3,225 |
|
Operating Profit -
Comparable Hotel EBITDA |
|
$ |
682 |
|
|
$ |
(183 |
) |
|
$ |
779 |
|
|
$ |
1,278 |
|
___________
(1) Forecast comparable hotel results include 74
hotels (of our 80 hotels owned at December 31, 2019) that we
have assumed will be classified as comparable as of
December 31, 2020. This includes the 1 Hotel South Beach which
was acquired in February 2019, based on a change in our definition
of comparable hotels effective January 1, 2020 to begin including
newly acquired hotels immediately, on a pro forma basis. 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 2020. 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 2020
Forecasts” for other forecast assumptions and further discussion of
transactions affecting our comparable hotel
set. The tables above reflect the
following compared to 2019, for the low and high end of the
forecast range:
- Comparable hotel revenue growth of 0.5% to 2%;
- Comparable hotel expense growth of 3% to 4%; and
- Comparable hotel EBITDA decline of 5% to 2.5%.
(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 revenues 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 leased office spaces
and other non-hotel income. The following hotels are expected to be
non-comparable for full-year forecast:
Renovations:
- 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 beginning
in the fourth quarter of 2019)
- New York Marriott Marquis (business disruption expected in
2020)
- Hyatt Regency Maui Resort & Spa (business disruption
expected in 2020)
- JW Marriott Atlanta Buckhead (business disruption expected in
2020)
HOST HOTELS & RESORTS,
INC.Notes to Financial Information
Forecasts
Our forecast of diluted earnings per common
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 that 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.
Historically, we have not included 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 and therefore it is not included in our
comparable hotels for 2019. We are, however, making a change to
this policy going forward, which is explained below under “2020
Comparable Hotel Definition Change.”
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.
2020 Comparable Hotel Definition Change
Effective January 1, 2020, the Company will
adjust its definition of comparable hotels to include recent
acquisitions on a pro forma basis assuming they have
comparable operating environments. Operating results for
acquisitions in the current and prior year will be reflected for
full calendar years, to include results for periods prior to
Company ownership. Management believes this will provide investors
a better understanding of underlying growth trends for the
Company’s current portfolio. As a result, the 1 Hotel South Beach
is expected to be included in the comparable hotel set for the year
ended December 31, 2020. Under the prior comparable hotel
definition, the estimated 2020 range for comparable hotel RevPAR
growth would have been reduced by 10 basis points.
2019 Comparable Hotels
Of the 80 hotels that we owned on
December 31, 2019, 72 have been classified as comparable
hotels. The operating results of the following hotels that we owned
as of December 31, 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);
- 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); and
- Minneapolis Marriott City Center, removed in the fourth quarter
of 2019 (business disruption due to renovations of guestrooms,
ballroom, meeting space, and redesign of the lobby).
The operating results of 18 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$. We
believe this presentation is useful to investors as it provides
clarity with respect to growth in RevPAR in the local currency of
the hotel consistent with the way we would evaluate our domestic
portfolio. However, the estimated effect of changes in foreign
currency has been reflected in the actual and forecast results of
net income, EBITDA, Adjusted EBITDAre, diluted earnings per common
share and Adjusted FFO per diluted share. Nominal US$ 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, impairment expense and
gains and losses from sales of depreciable real estate, all of
which are based on historical cost accounting and which may be of
lesser significance in evaluating current performance, we believe
that such measures can facilitate comparisons of operating
performance between periods and with other REITs, even though
NAREIT FFO per diluted share does not represent an amount that
accrues directly to holders of our common stock. Historical cost
accounting for real estate assets implicitly assumes that the value
of real estate assets diminishes predictably over time. As noted by
NAREIT in its Funds From Operations White Paper – 2018 Restatement,
the primary purpose for including FFO as a supplemental measure of
operating performance of a REIT is to address the artificial nature
of historical cost depreciation and amortization of real estate and
real estate-related assets mandated by GAAP. For these reasons,
NAREIT adopted the FFO metric in order to promote a uniform
industry-wide measure of REIT operating performance.
Adjusted FFO per Diluted Share
We also present Adjusted FFO per diluted share
when evaluating our performance because management believes that
the exclusion of certain additional items described below provides
useful supplemental information to investors regarding our ongoing
operating performance. Management historically has made the
adjustments detailed below in evaluating our performance, in our
annual budget process and for our compensation programs. We believe
that the presentation of Adjusted FFO per diluted share, when
combined with both the primary GAAP presentation of earnings per
share and FFO per diluted share as defined by NAREIT, provides
useful supplemental information that is beneficial to an investor’s
understanding of our operating performance. We adjust NAREIT FFO
per diluted share for the following items, which may occur in any
period, and refer to this measure as Adjusted FFO per diluted
share:
- Gains and Losses on the Extinguishment of Debt – We exclude the
effect of finance charges and premiums associated with the
extinguishment of debt, including the acceleration of the write-off
of deferred financing costs from the original issuance of the debt
being redeemed or retired and incremental interest expense incurred
during the refinancing period. We also exclude the gains on debt
repurchases and the original issuance costs associated with the
retirement of preferred stock. We believe that these items are not
reflective of our ongoing finance costs.
- Acquisition Costs – Under GAAP, costs associated with completed
property acquisitions that are considered business combinations are
expensed in the year incurred. We exclude the effect of these costs
because we believe they are not reflective of the ongoing
performance of the Company.
- Litigation Gains and Losses – We exclude the effect of gains or
losses associated with litigation recorded under GAAP that we
consider outside the ordinary course of business. We believe that
including these items is not consistent with our ongoing operating
performance.
In unusual circumstances, we also may adjust
NAREIT FFO for gains or losses that management believes are not
representative of the Company’s current operating performance. For
example, in 2017, as a result of the reduction of 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, gains or losses on disposition 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.
Tejal Engman, Vice President240.744.5116
A PDF accompanying this announcement is available at:
http://ml.globenewswire.com/Resource/Download/9feed930-b413-4ea0-a1b1-c033370737c0
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