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 first quarter of
2019.
Operating Results 1(unaudited,
in millions, except per share and hotel statistics)
|
Quarter endedMarch 31, |
|
|
Percent |
|
|
2019 |
|
|
2018 |
|
|
Change |
|
Total revenues |
$ |
1,390 |
|
|
$ |
1,346 |
|
|
|
3.3 |
% |
Comparable hotel
revenues (1) |
|
1,184 |
|
|
|
1,182 |
|
|
|
0.2 |
% |
Net income |
|
189 |
|
|
|
256 |
|
|
|
(26.2 |
)% |
EBITDAre and Adjusted
EBITDAre (1) |
|
406 |
|
|
|
370 |
|
|
|
9.7 |
% |
Change in comparable
hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
Domestic
properties |
|
(1.2 |
) |
|
|
|
|
|
|
|
|
International properties - Constant US$ |
|
11.4 |
|
|
|
|
|
|
|
|
|
Total -
Constant US$ |
|
(1.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share |
|
0.25 |
|
|
|
0.34 |
|
|
|
(26.5 |
)% |
NAREIT FFO and Adjusted
FFO per diluted share (1) |
|
0.48 |
|
|
|
0.43 |
|
|
|
11.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
*Additional detail on the Company’s results,
including data for 22 domestic markets and top 40 hotels by RevPAR,
is available in the First Quarter 2019 Supplemental Financial
Information available on the Company’s website at
www.hosthotels.com.
Highlights
- Total revenues improved 3.3% for
the quarter, driven by the acquisitions of four premier hotels
since March 2018. Also helping drive the improvement in revenues
was a 30 basis point increase in comparable Total RevPAR to $274
for the quarter, which includes all hotel-level revenues per
available room.
- The Company increased its overall
profitability, despite a comparable hotel RevPAR decline of 1.0%
for the quarter on a constant dollar basis. The decline in RevPAR
was primarily driven by the Marriott transformational capital
program and the effect of the government shutdown.
- Net income and earnings per share
of $189 million and $0.25, respectively, were affected by a
reduction in gains on sales of assets compared to the first quarter
of 2018. However, the Company experienced strong growth in Adjusted
EBITDAre of 9.7% to $406 million and Adjusted FFO per share of
11.6% to $0.48 per share.
James F. Risoleo, President and Chief Executive
Officer, said, “Our first quarter results reflect our proven
ability to drive operational outperformance as well as the scale
and strength of Host Hotels’ integrated investment
platform. Our margin performance for the quarter is nothing
short of remarkable. We are very pleased to report a beat and raise
quarter and to raise net income, Adjusted EBITDAre and Adjusted FFO
per share guidance for the full year. Our disciplined and strategic
capital allocation decisions have significantly enhanced the
quality of our portfolio and we remain focused on value-enhancing
growth opportunities to complement our collection of iconic and
irreplaceable assets. As discussed last quarter, we have nearly
$2.5 billion of investment capacity that can be comfortably
deployed while maintaining our commitment to our investment-grade
balance sheet. We do not intend to move higher than our targeted
leverage range, nor do we intend to invest beyond that
capacity.”
_______________________
- 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.
Operating Performance
GAAP Metrics
- The improvement in total revenues
of 3.3% for the quarter was due to the operations of the 1 Hotel
South Beach acquired in February and the Hyatt hotel portfolio
acquired in 2018, partially offset by the disposition of five
hotels in 2019 and 2018.
- GAAP operating profit margin
increased 280 basis points for the quarter, due to higher margins
at hotels acquired in 2019 and 2018 and items that affected
comparable margins discussed below.
- Net income decreased by
$67 million to $189 million for the quarter, primarily
due to a decrease in gain on sale of assets, partially offset by
the improvement in operating profit.
- Diluted earnings per common share
decreased 26.5% for the quarter.
Other Metrics
- Comparable RevPAR on a constant
dollar basis declined 1.0% for the quarter, due to a 180 basis
point decrease in occupancy, partially offset by a 1.3% increase in
average room rate. The decline in RevPAR was primarily the result
of an estimated 40 basis point decrease for the comparable hotels
in the Marriott transformational capital program and an estimated
30 basis point decrease related to the government shutdown
primarily affecting Washington, D.C. and San Diego.
- Comparable hotel revenues increased
0.2% for the quarter.
- Comparable hotel EBITDA increased
by $7 million, or 1.9%, for the quarter.
- Comparable hotel EBITDA margins
improved 50 basis points for the quarter due to several factors,
including:
- an increase in average room rates;
- improvement in rooms and food and beverage productivity and a
decrease in other operating expenses resulting from Company
initiatives;
- 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 increased by
$36 million, or 9.7%, for the quarter.
- Adjusted FFO per diluted share
increased 11.6% for the quarter.
Acquisitions and
Dispositions
During the first quarter, the Company acquired
the 1 Hotel South Beach for $610 million and sold The Westin New
York Grand Central for $302 million, including approximately $20
million of FF&E funds. On April 2, the Company sold The Westin
Mission Hills Golf Resort & Spa for $27 million.
Capital Allocation
During the quarter, the Company invested
approximately $110 million in capital expenditures, of which
$52 million were return on investment (“ROI”) capital
expenditures and $58 million were on renewal and replacement
projects.
For 2019, the Company expects capital
expenditures of between $550 million and $625 million. This
comprises between $315 million and $350 million in ROI
projects and between $235 million and $275 million in renewal
and replacement projects. The ROI projects include approximately
$225 million that are part of the previously announced
agreement with Marriott International.
Dividends
The Company paid a regular quarterly cash
dividend of $0.20 per share on its common stock on April 15, 2019
to stockholders of record as of March 29, 2019. All future
dividends, including any special dividends, are subject to approval
by the Company’s Board of Directors.
Balance Sheet
At March 31, 2019, the Company had
approximately $1,082 million of unrestricted cash, not
including $191 million in the FF&E escrow reserves, and
$944 million of available capacity under the revolver portion of
its credit facility. Total debt was $3.9 billion, with an
average maturity of 3.9 years and an average interest rate of 4.3%.
The Company has no debt maturities until 2020.
As previously announced, the Company has
$500 million of capacity available under its current common
share repurchase program. No shares were repurchased in the first
quarter of 2019. As previously announced, the Company has a
distribution agreement in place under which it may issue and sell,
from time to time, shares of common stock having an aggregate
offering price of up to $500 million in “at the market” offerings.
No shares were issued in the first quarter of 2019.
2019 Outlook
For 2019, the Company’s forecast for comparable
hotel RevPAR growth is 0% to 2.0%. The RevPAR guidance reflects an
estimated 45 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% |
|
0.0%
to 2.0% |
|
0
bps |
Total revenues under
GAAP |
|
0.6%
to 2.6% |
|
0.1%
to 2.1% |
|
(50
bps) |
Operating profit margin
under GAAP |
|
440
bps to 530 bps |
|
460
bps to 550 bps |
|
20
bps |
Comparable hotel EBITDA
margins |
|
(50)
bps to 10 bps |
|
(25)
bps to 35 bps |
|
25
bps |
|
|
|
|
|
|
|
__________(1) Forecast
comparable hotel results include 81 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.
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) |
|
$587
to $652 |
|
$619
to $683 |
|
|
$31.5 |
Adjusted EBITDAre (in
millions) |
|
$1,515
to $1,580 |
|
$1,535
to $1,600 |
|
$20 |
Diluted earnings per
common share |
|
$.78
to $.87 |
|
$.82
to $.91 |
|
$.04 |
NAREIT FFO per diluted
share |
|
$1.72
to $1.81 |
|
$1.76
to $1.84 |
|
$.03 |
Adjusted FFO per
diluted share |
|
$1.72
to $1.81 |
|
$1.76
to $1.84 |
|
$.03 |
|
|
|
|
|
|
|
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 87 properties in
the United States and five properties internationally totaling
approximately 51,500 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 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 May 1, 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 March 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)
|
March 31, 2019 |
|
|
December 31, 2018 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
Property and equipment, net |
$ |
10,296 |
|
|
$ |
9,760 |
|
Right-of-use assets(1) |
|
616 |
|
|
|
— |
|
Assets held for sale |
|
31 |
|
|
|
281 |
|
Due from managers |
|
145 |
|
|
|
71 |
|
Advances to and investments in affiliates |
|
54 |
|
|
|
48 |
|
Furniture, fixtures and equipment replacement
fund |
|
191 |
|
|
|
213 |
|
Other |
|
162 |
|
|
|
175 |
|
Cash and cash equivalents |
|
1,082 |
|
|
|
1,542 |
|
Total assets |
$ |
12,577 |
|
|
$ |
12,090 |
|
|
|
|
|
|
|
|
|
LIABILITIES,
NON-CONTROLLING INTERESTS AND EQUITY |
|
Debt (2) |
|
|
|
|
|
|
|
Senior notes |
$ |
2,783 |
|
|
$ |
2,782 |
|
Credit facility, including the term
loans of $998 |
|
1,051 |
|
|
|
1,049 |
|
Other debt |
|
28 |
|
|
|
6 |
|
Total debt |
|
3,862 |
|
|
|
3,837 |
|
Lease liabilities(1) |
|
625 |
|
|
|
— |
|
Accounts payable and accrued expenses |
|
240 |
|
|
|
293 |
|
Other |
|
183 |
|
|
|
266 |
|
Total liabilities |
|
4,910 |
|
|
|
4,396 |
|
|
|
|
|
|
|
|
|
Redeemable non-controlling interests - Host
Hotels & Resorts, L.P. |
|
147 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
Host Hotels & Resorts, Inc. stockholders’
equity: |
|
|
|
|
|
|
|
Common stock, par value $.01, 1,050
million shares authorized, 740.9 million shares and 740.4 million
shares issued and outstanding, respectively |
|
7 |
|
|
|
7 |
|
Additional paid-in capital |
|
8,138 |
|
|
|
8,156 |
|
Accumulated other comprehensive
loss |
|
(59 |
) |
|
|
(59 |
) |
Deficit |
|
(573 |
) |
|
|
(610 |
) |
Total equity of Host Hotels &
Resorts, Inc. stockholders |
|
7,513 |
|
|
|
7,494 |
|
Non-redeemable non-controlling interests—other
consolidated partnerships |
|
7 |
|
|
|
72 |
|
Total equity |
|
7,520 |
|
|
|
7,566 |
|
Total liabilities, non-controlling
interests and equity |
$ |
12,577 |
|
|
$ |
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 $616 million and lease liabilities of $625
million as of March 31, 2019. The adoption did not affect our
statement of operations.(2) Please see our First
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 March 31, |
|
|
2019 |
|
|
2018 |
|
Revenues |
|
|
|
|
|
|
|
Rooms |
$ |
857 |
|
|
$ |
844 |
|
Food and beverage |
|
433 |
|
|
|
413 |
|
Other |
|
100 |
|
|
|
89 |
|
Total revenues |
|
1,390 |
|
|
|
1,346 |
|
Expenses |
|
|
|
|
|
|
|
Rooms |
|
217 |
|
|
|
224 |
|
Food and beverage |
|
285 |
|
|
|
278 |
|
Other departmental and support
expenses |
|
327 |
|
|
|
315 |
|
Management fees |
|
54 |
|
|
|
54 |
|
Other property-level expenses |
|
92 |
|
|
|
98 |
|
Depreciation and amortization |
|
170 |
|
|
|
178 |
|
Corporate and other
expenses(1) |
|
29 |
|
|
|
28 |
|
Total operating costs and
expenses |
|
1,174 |
|
|
|
1,175 |
|
Operating profit |
|
216 |
|
|
|
171 |
|
Interest income |
|
8 |
|
|
|
3 |
|
Interest expense |
|
(43 |
) |
|
|
(44 |
) |
Gain on sale of assets |
|
5 |
|
|
|
120 |
|
Equity in earnings of affiliates |
|
5 |
|
|
|
10 |
|
Income before income taxes |
|
191 |
|
|
|
260 |
|
Provision for income taxes |
|
(2 |
) |
|
|
(4 |
) |
Net income |
|
189 |
|
|
|
256 |
|
Less: Net
income attributable to non-controlling interests |
|
(3 |
) |
|
|
(3 |
) |
Net income attributable to Host
Inc. |
$ |
186 |
|
|
$ |
253 |
|
Basic and diluted
earnings per common share |
$ |
.25 |
|
|
$ |
.34 |
|
|
|
|
|
|
|
|
|
___________(1) Corporate and other
expenses include the following items:
|
Quarter endedMarch 31, |
|
|
2019 |
|
|
2018 |
|
General and
administrative costs |
$ |
25 |
|
|
$ |
25 |
|
Non-cash stock-based
compensation expense |
|
4 |
|
|
|
3 |
|
Total |
$ |
29 |
|
|
$ |
28 |
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS,
INC.Earnings per Common Share(unaudited,
in millions, except per share amounts)
|
Quarter ended March 31, |
|
|
2019 |
|
|
2018 |
|
Net income |
$ |
189 |
|
|
$ |
256 |
|
Less: Net
income attributable to non-controlling interests |
|
(3 |
) |
|
|
(3 |
) |
Net income attributable to Host Inc. |
$ |
186 |
|
|
$ |
253 |
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding |
|
740.6 |
|
|
|
739.2 |
|
Assuming
distribution of common shares granted under the comprehensive stock
plans, less shares assumed purchased at market |
|
.2 |
|
|
|
.4 |
|
Diluted weighted average shares outstanding
(1) |
|
740.8 |
|
|
|
739.6 |
|
Basic and diluted earnings per common share |
$ |
.25 |
|
|
$ |
.34 |
|
|
|
|
|
|
|
|
|
___________(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 March 31, 2019 |
|
|
Quarter ended March 31, 2019 |
|
|
Quarter ended March 31, 2018 |
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
399.24 |
|
|
|
89.2 |
% |
|
$ |
356.00 |
|
|
$ |
396.73 |
|
|
|
91.4 |
% |
|
$ |
362.47 |
|
|
|
(1.8 |
)% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
367.78 |
|
|
|
78.6 |
|
|
|
289.04 |
|
|
|
355.15 |
|
|
|
71.3 |
|
|
|
253.14 |
|
|
|
14.2 |
|
Phoenix |
|
|
5 |
|
|
|
2,163 |
|
|
|
339.86 |
|
|
|
84.1 |
|
|
|
285.90 |
|
|
|
317.94 |
|
|
|
83.7 |
|
|
|
266.02 |
|
|
|
7.5 |
|
Florida Gulf Coast |
|
|
3 |
|
|
|
940 |
|
|
|
328.81 |
|
|
|
85.0 |
|
|
|
279.47 |
|
|
|
323.19 |
|
|
|
84.6 |
|
|
|
273.36 |
|
|
|
2.2 |
|
Los Angeles |
|
|
4 |
|
|
|
1,726 |
|
|
|
223.86 |
|
|
|
86.5 |
|
|
|
193.59 |
|
|
|
230.25 |
|
|
|
89.2 |
|
|
|
205.41 |
|
|
|
(5.8 |
) |
San Francisco/San
Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
252.45 |
|
|
|
76.0 |
|
|
|
191.79 |
|
|
|
225.49 |
|
|
|
80.2 |
|
|
|
180.76 |
|
|
|
6.1 |
|
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
210.99 |
|
|
|
86.9 |
|
|
|
183.31 |
|
|
|
207.22 |
|
|
|
88.5 |
|
|
|
183.36 |
|
|
|
— |
|
San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
235.04 |
|
|
|
77.4 |
|
|
|
181.93 |
|
|
|
231.83 |
|
|
|
81.9 |
|
|
|
189.78 |
|
|
|
(4.1 |
) |
Washington, D.C.
(CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
247.89 |
|
|
|
73.3 |
|
|
|
181.79 |
|
|
|
250.33 |
|
|
|
71.8 |
|
|
|
179.63 |
|
|
|
1.2 |
|
Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
224.73 |
|
|
|
77.9 |
|
|
|
175.00 |
|
|
|
192.08 |
|
|
|
78.7 |
|
|
|
151.15 |
|
|
|
15.8 |
|
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
209.79 |
|
|
|
81.6 |
|
|
|
171.18 |
|
|
|
197.38 |
|
|
|
82.7 |
|
|
|
163.21 |
|
|
|
4.9 |
|
New York |
|
|
3 |
|
|
|
4,259 |
|
|
|
236.38 |
|
|
|
72.0 |
|
|
|
170.27 |
|
|
|
252.47 |
|
|
|
77.7 |
|
|
|
196.18 |
|
|
|
(13.2 |
) |
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
208.20 |
|
|
|
79.0 |
|
|
|
164.41 |
|
|
|
210.77 |
|
|
|
81.6 |
|
|
|
172.05 |
|
|
|
(4.4 |
) |
San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
196.01 |
|
|
|
77.4 |
|
|
|
151.75 |
|
|
|
198.26 |
|
|
|
75.7 |
|
|
|
150.18 |
|
|
|
1.0 |
|
Orange County |
|
|
4 |
|
|
|
1,432 |
|
|
|
193.05 |
|
|
|
78.2 |
|
|
|
150.88 |
|
|
|
192.00 |
|
|
|
76.3 |
|
|
|
146.53 |
|
|
|
3.0 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
194.12 |
|
|
|
77.4 |
|
|
|
150.15 |
|
|
|
201.47 |
|
|
|
75.1 |
|
|
|
151.30 |
|
|
|
(0.8 |
) |
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
190.16 |
|
|
|
78.1 |
|
|
|
148.48 |
|
|
|
192.13 |
|
|
|
83.5 |
|
|
|
160.48 |
|
|
|
(7.5 |
) |
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
182.60 |
|
|
|
75.8 |
|
|
|
138.36 |
|
|
|
178.84 |
|
|
|
76.5 |
|
|
|
136.75 |
|
|
|
1.2 |
|
Northern Virginia |
|
|
5 |
|
|
|
1,919 |
|
|
|
189.73 |
|
|
|
69.6 |
|
|
|
132.13 |
|
|
|
186.56 |
|
|
|
71.7 |
|
|
|
133.83 |
|
|
|
(1.3 |
) |
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
185.32 |
|
|
|
68.3 |
|
|
|
126.54 |
|
|
|
183.76 |
|
|
|
70.7 |
|
|
|
129.97 |
|
|
|
(2.6 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
161.82 |
|
|
|
64.7 |
|
|
|
104.75 |
|
|
|
152.93 |
|
|
|
67.5 |
|
|
|
103.26 |
|
|
|
1.4 |
|
Chicago |
|
|
6 |
|
|
|
2,393 |
|
|
|
141.59 |
|
|
|
62.4 |
|
|
|
88.30 |
|
|
|
148.46 |
|
|
|
67.2 |
|
|
|
99.80 |
|
|
|
(11.5 |
) |
Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
174.04 |
|
|
|
70.4 |
|
|
|
122.54 |
|
|
|
176.71 |
|
|
|
72.2 |
|
|
|
127.59 |
|
|
|
(4.0 |
) |
Domestic |
|
|
82 |
|
|
|
46,483 |
|
|
|
227.85 |
|
|
|
75.5 |
|
|
|
172.07 |
|
|
|
224.59 |
|
|
|
77.5 |
|
|
|
174.11 |
|
|
|
(1.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
143.88 |
|
|
|
67.6 |
|
|
|
97.32 |
|
|
|
141.14 |
|
|
|
61.9 |
|
|
|
87.35 |
|
|
|
11.4 |
|
All
Locations - Constant US$ |
|
|
87 |
|
|
|
47,982 |
|
|
|
225.49 |
|
|
|
75.3 |
|
|
|
169.74 |
|
|
|
222.50 |
|
|
|
77.0 |
|
|
|
171.40 |
|
|
|
(1.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Owned Hotels in Constant US$
(2)
|
|
As of March 31, 2019 |
|
|
Quarter ended March 31, 2019 |
|
|
Quarter ended March 31, 2018 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
87 |
|
|
|
47,982 |
|
|
$ |
225.49 |
|
|
|
75.3 |
% |
|
$ |
169.74 |
|
|
$ |
222.50 |
|
|
|
77.0 |
% |
|
$ |
171.40 |
|
|
|
(1.0 |
)% |
Non-comparable Hotels
(Pro forma) |
|
|
6 |
|
|
|
3,803 |
|
|
|
486.08 |
|
|
|
80.7 |
|
|
|
392.36 |
|
|
|
446.16 |
|
|
|
88.2 |
|
|
|
393.42 |
|
|
|
(0.3 |
) |
All
Hotels |
|
|
93 |
|
|
|
51,785 |
|
|
|
246.13 |
|
|
|
75.7 |
|
|
|
186.27 |
|
|
|
241.31 |
|
|
|
77.9 |
|
|
|
187.89 |
|
|
|
(0.9 |
) |
Comparable Hotels in Nominal
US$
|
|
As of March 31, 2019 |
|
|
Quarter ended March 31, 2019 |
|
|
Quarter ended March 31, 2018 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
143.88 |
|
|
|
67.6 |
% |
|
$ |
97.32 |
|
|
$ |
153.01 |
|
|
|
61.9 |
% |
|
$ |
94.70 |
|
|
|
2.8 |
% |
Domestic |
|
|
82 |
|
|
|
46,483 |
|
|
|
227.85 |
|
|
|
75.5 |
|
|
|
172.07 |
|
|
|
224.59 |
|
|
|
77.5 |
|
|
|
174.11 |
|
|
|
(1.2 |
) |
All
Locations |
|
|
87 |
|
|
|
47,982 |
|
|
|
225.49 |
|
|
|
75.3 |
|
|
|
169.74 |
|
|
|
222.79 |
|
|
|
77.0 |
|
|
|
171.63 |
|
|
|
(1.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 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 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 as 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 two 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 0.3%
for the quarter for these six hotels is considered
non-comparable.
HOST HOTELS & RESORTS,
INC. Schedule of Comparable Hotel
Results (1)(unaudited, in millions, except hotel
statistics)
|
|
Quarter ended March 31, |
|
|
|
2019 |
|
|
2018 |
|
Number of hotels |
|
|
87 |
|
|
|
87 |
|
Number of rooms |
|
|
47,982 |
|
|
|
47,982 |
|
Change in comparable
hotel RevPAR - |
|
|
|
|
|
|
|
|
Constant
US$ |
|
|
(1.0 |
)% |
|
|
— |
|
Nominal
US$ |
|
|
(1.1 |
)% |
|
|
— |
|
Operating profit margin
(2) |
|
|
15.5 |
% |
|
|
12.7 |
% |
Comparable hotel EBITDA
margin (2) |
|
|
28.1 |
% |
|
|
27.6 |
% |
Food and beverage
profit margin (2) |
|
|
34.2 |
% |
|
|
32.7 |
% |
Comparable hotel food
and beverage profit margin (2) |
|
|
34.3 |
% |
|
|
34.2 |
% |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
189 |
|
|
$ |
256 |
|
Depreciation and amortization |
|
|
170 |
|
|
|
178 |
|
Interest expense |
|
|
43 |
|
|
|
44 |
|
Provision for income taxes |
|
|
2 |
|
|
|
4 |
|
Gain on sale of property and corporate level
income/expense |
|
|
11 |
|
|
|
(105 |
) |
Non-comparable hotel
results, net (3) |
|
|
(82 |
) |
|
|
(51 |
) |
Comparable
hotel EBITDA |
|
$ |
333 |
|
|
$ |
326 |
|
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31, 2019 |
|
|
Quarter ended March 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 |
$ |
857 |
|
|
$ |
(124 |
) |
|
$ |
— |
|
|
$ |
733 |
|
|
$ |
844 |
|
|
$ |
(103 |
) |
|
$ |
— |
|
|
$ |
741 |
|
Food and
beverage |
|
433 |
|
|
|
(61 |
) |
|
|
— |
|
|
|
372 |
|
|
|
413 |
|
|
|
(41 |
) |
|
|
— |
|
|
|
372 |
|
Other |
|
100 |
|
|
|
(21 |
) |
|
|
— |
|
|
|
79 |
|
|
|
89 |
|
|
|
(20 |
) |
|
|
— |
|
|
|
69 |
|
Total
revenues |
|
1,390 |
|
|
|
(206 |
) |
|
|
— |
|
|
|
1,184 |
|
|
|
1,346 |
|
|
|
(164 |
) |
|
|
— |
|
|
|
1,182 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
217 |
|
|
|
(29 |
) |
|
|
— |
|
|
|
188 |
|
|
|
224 |
|
|
|
(31 |
) |
|
|
— |
|
|
|
193 |
|
Food and
beverage |
|
285 |
|
|
|
(41 |
) |
|
|
— |
|
|
|
244 |
|
|
|
278 |
|
|
|
(33 |
) |
|
|
— |
|
|
|
245 |
|
Other |
|
473 |
|
|
|
(54 |
) |
|
|
— |
|
|
|
419 |
|
|
|
467 |
|
|
|
(49 |
) |
|
|
— |
|
|
|
418 |
|
Depreciation and amortization |
|
170 |
|
|
|
— |
|
|
|
(170 |
) |
|
|
— |
|
|
|
178 |
|
|
|
— |
|
|
|
(178 |
) |
|
|
— |
|
Corporate
and other expenses |
|
29 |
|
|
|
— |
|
|
|
(29 |
) |
|
|
— |
|
|
|
28 |
|
|
|
— |
|
|
|
(28 |
) |
|
|
— |
|
Total
expenses |
|
1,174 |
|
|
|
(124 |
) |
|
|
(199 |
) |
|
|
851 |
|
|
|
1,175 |
|
|
|
(113 |
) |
|
|
(206 |
) |
|
|
856 |
|
Operating
Profit - Comparable Hotel
EBITDA |
$ |
216 |
|
|
$ |
(82 |
) |
|
$ |
199 |
|
|
$ |
333 |
|
|
$ |
171 |
|
|
$ |
(51 |
) |
|
$ |
206 |
|
|
$ |
326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________(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 First 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
spaces and other non-hotel income.
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income
toEBITDA, EBITDAre and Adjusted EBITDAre
(1)(unaudited, in millions)
|
Quarter ended March 31, |
|
|
2019 |
|
|
2018 |
|
Net
income |
$ |
189 |
|
|
$ |
256 |
|
Interest
expense |
|
43 |
|
|
|
44 |
|
Depreciation and amortization |
|
170 |
|
|
|
170 |
|
Income
taxes |
|
2 |
|
|
|
4 |
|
EBITDA |
|
404 |
|
|
|
474 |
|
Gain on
dispositions (2) |
|
(2 |
) |
|
|
(119 |
) |
Non-cash
impairment expense |
|
— |
|
|
|
8 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of Euro JV (3) |
|
— |
|
|
|
(2 |
) |
Equity in
earnings of affiliates other than Euro JV |
|
(5 |
) |
|
|
(8 |
) |
Pro rata
EBITDAre of Euro JV (3) |
|
— |
|
|
|
7 |
|
Pro rata
EBITDAre of equity investments other than Euro JV |
|
9 |
|
|
|
10 |
|
EBITDAre and
Adjusted EBITDAre |
$ |
406 |
|
|
$ |
370 |
|
|
|
|
|
|
|
|
|
___________(1) See the Notes to Financial
Information for discussion of non-GAAP measures.(2) Reflects
the sale of one hotel in each of 2019 and 2018.(3) Represents
our share of earnings and pro rata EBITDAre from the European Joint
Venture (“Euro JV”). Our approximate one-third non-controlling
interest was sold 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 March 31, |
|
|
2019 |
|
|
2018 |
|
Net
income |
$ |
189 |
|
|
$ |
256 |
|
Less: Net
income attributable to non-controlling interests |
|
(3 |
) |
|
|
(3 |
) |
Net income
attributable to Host Inc. |
|
186 |
|
|
|
253 |
|
Adjustments: |
|
|
|
|
|
|
|
Gain on
dispositions (2) |
|
(2 |
) |
|
|
(119 |
) |
Depreciation and amortization |
|
169 |
|
|
|
169 |
|
Non-cash
impairment expense |
|
— |
|
|
|
8 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(5 |
) |
|
|
(10 |
) |
Pro rata
FFO of equity investments |
|
9 |
|
|
|
16 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partnerships |
|
1 |
|
|
|
— |
|
FFO
adjustments for non-controlling interests of Host L.P. |
|
(2 |
) |
|
|
(1 |
) |
NAREIT FFO and
Adjusted FFO (3) |
$ |
356 |
|
|
$ |
316 |
|
|
|
|
|
|
|
|
|
For calculation
on a per share basis (4): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding - EPS, NAREIT FFO and Adjusted
FFO |
|
740.8 |
|
|
|
739.6 |
|
Diluted
earnings per common share |
$ |
.25 |
|
|
$ |
.34 |
|
NAREIT FFO and
Adjusted FFO per diluted share |
$ |
.48 |
|
|
$ |
.43 |
|
|
|
|
|
|
|
|
|
___________(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) Earnings per diluted share and NAREIT FFO
and Adjusted FFO per diluted share are adjusted for the effects of
dilutive securities. Dilutive securities may include shares granted
under comprehensive stock plans, preferred OP units held by
non-controlling partners and other non-controlling interests that
have the option to convert their limited partnership interests to
common OP units. No effect is shown for securities if they are
anti-dilutive.
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income to EBITDA,
EBITDAre, 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 |
$ |
619 |
|
|
$ |
683 |
|
Interest
expense |
|
177 |
|
|
|
177 |
|
Depreciation and amortization |
|
697 |
|
|
|
697 |
|
Income
taxes |
|
28 |
|
|
|
29 |
|
EBITDA |
|
1,521 |
|
|
|
1,586 |
|
Gain on
dispositions |
|
(2 |
) |
|
|
(2 |
) |
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata
EBITDAre of equity investments |
|
26 |
|
|
|
26 |
|
EBITDAre |
|
1,535 |
|
|
|
1,600 |
|
Adjusted
EBITDAre |
$ |
1,535 |
|
|
$ |
1,600 |
|
|
|
|
|
|
|
|
|
|
Full Year 2019 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net income |
$ |
619 |
|
|
$ |
683 |
|
Less: Net income attributable to non-controlling
interests |
|
(9 |
) |
|
|
(10 |
) |
Net income attributable to Host
Inc. |
|
610 |
|
|
|
673 |
|
Adjustments: |
|
|
|
|
|
|
|
Gain on dispositions |
|
(2 |
) |
|
|
(2 |
) |
Depreciation and amortization |
|
693 |
|
|
|
693 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
Equity in earnings of
affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata FFO of equity
investments |
|
20 |
|
|
|
20 |
|
Consolidated partnership
adjustments: |
|
|
|
|
|
|
|
FFO adjustment for non-controlling
interests of Host LP |
|
(7 |
) |
|
|
(7 |
) |
NAREIT FFO |
|
1,304 |
|
|
|
1,367 |
|
Adjusted FFO |
$ |
1,304 |
|
|
$ |
1,367 |
|
|
|
|
|
|
|
|
|
Weighted average diluted shares - EPS,
NAREIT and Adjusted FFO |
|
741.8 |
|
|
|
741.8 |
|
Diluted earnings per common
share |
$ |
0.82 |
|
|
$ |
0.91 |
|
NAREIT FFO per diluted
share |
$ |
1.76 |
|
|
$ |
1.84 |
|
Adjusted FFO per diluted
share |
$ |
1.76 |
|
|
$ |
1.84 |
|
|
|
|
|
|
|
|
|
___________(1) The forecasts are based on the
below assumptions:
- Total comparable hotel RevPAR in
constant US$ will increase 0.0% to 2.0% 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 35 basis points for the
low and high ends of the forecasted RevPAR range,
respectively.
- We expect to spend approximately
$315 million to $350 million on ROI capital expenditures
and approximately $235 million to $275 million on renewal and
replacement capital expenditures.
- The above forecast assumes the sale
of two additional properties. The transactions are subject to
customary and other closing conditions which may not be satisfied
and there can be no assurances that we will be able to complete the
transactions at the prices assumed in the forecast.
For a discussion of additional items that may affect forecasted
results, see the Notes to Financial Information.
HOST HOTELS & RESORTS,
INC.Schedule of Comparable Hotel
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) |
|
|
|
14.2 |
% |
|
|
15.1 |
% |
Comparable
hotel EBITDA margin (3) |
|
|
|
28.9 |
% |
|
|
29.5 |
% |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
$ |
619 |
|
|
$ |
683 |
|
Depreciation and amortization |
|
|
|
697 |
|
|
|
697 |
|
Interest
expense |
|
|
|
177 |
|
|
|
177 |
|
Provision
for income taxes |
|
|
|
28 |
|
|
|
29 |
|
Corporate
level income/expense |
|
|
|
76 |
|
|
|
76 |
|
Non-comparable hotel results, net (4) |
|
|
|
(252 |
) |
|
|
(261 |
) |
Comparable hotel EBITDA |
|
|
$ |
1,345 |
|
|
$ |
1,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,518 |
|
|
$ |
(534 |
) |
|
$ |
— |
|
|
$ |
2,984 |
|
Food and beverage |
|
|
1,641 |
|
|
|
(248 |
) |
|
|
— |
|
|
|
1,393 |
|
Other |
|
|
372 |
|
|
|
(87 |
) |
|
|
— |
|
|
|
285 |
|
Total revenues |
|
|
5,531 |
|
|
|
(869 |
) |
|
|
— |
|
|
|
4,662 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,934 |
|
|
|
(617 |
) |
|
|
— |
|
|
|
3,317 |
|
Depreciation |
|
|
697 |
|
|
|
— |
|
|
|
(697 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
113 |
|
|
|
— |
|
|
|
(113 |
) |
|
|
— |
|
Total expenses |
|
|
4,744 |
|
|
|
(617 |
) |
|
|
(810 |
) |
|
|
3,317 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
787 |
|
|
$ |
(252 |
) |
|
$ |
810 |
|
|
$ |
1,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAP Results |
|
|
Non-comparable hotel results, net (4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel Results |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,588 |
|
|
$ |
(544 |
) |
|
$ |
— |
|
|
$ |
3,044 |
|
Food and beverage |
|
|
1,673 |
|
|
|
(252 |
) |
|
|
— |
|
|
|
1,421 |
|
Other |
|
|
379 |
|
|
|
(89 |
) |
|
|
— |
|
|
|
290 |
|
Total revenues |
|
|
5,640 |
|
|
|
(885 |
) |
|
|
— |
|
|
|
4,755 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,978 |
|
|
|
(624 |
) |
|
|
— |
|
|
|
3,354 |
|
Depreciation and amortization |
|
|
697 |
|
|
|
— |
|
|
|
(697 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
113 |
|
|
|
— |
|
|
|
(113 |
) |
|
|
— |
|
Total expenses |
|
|
4,788 |
|
|
|
(624 |
) |
|
|
(810 |
) |
|
|
3,354 |
|
Operating
Profit - Comparable Hotel EBITDA |
|
$ |
852 |
|
|
$ |
(261 |
) |
|
$ |
810 |
|
|
$ |
1,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
(1) Forecast comparable hotel results include 81
hotels (of our 93 hotels owned at March 31, 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)
- Costa Mesa Marriott (business disruption in 2019)
- Minneapolis Marriott City Center (business disruption in
2019)
- San Antonio Marriott Rivercenter (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)
- Two unspecified dispositions
HOST HOTELS & RESORTS,
INC.Notes to Financial Information
Forecasts
Our forecast of earnings per diluted share,
NAREIT and Adjusted FFO per diluted share, EBITDA, EBITDAre,
Adjusted EBITDAre and comparable hotel results are forward-looking
statements and are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors which may
cause actual results and performance to differ materially from
those expressed or implied by these forecasts. Although we believe
the expectations reflected in the forecasts are based upon
reasonable assumptions, we can give no assurance that the
expectations will be attained or that the results will not be
materially different. Risks that may affect these assumptions and
forecasts include the following: potential changes in overall
economic outlook make it inherently difficult to forecast the level
of RevPAR and margin growth; the amount and timing of acquisitions
and dispositions of hotel properties is an estimate that can
substantially affect financial results, including such items as net
income, depreciation and gains on dispositions; the level of
capital expenditures may change significantly, which will directly
affect the level of depreciation expense and net income; the amount
and timing of debt payments may change significantly based on
market conditions, which will directly affect the level of interest
expense and net income; the amount and timing of transactions
involving shares of our common stock may change based on market
conditions; and other risks and uncertainties associated with our
business described herein and in our annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K
filed with the SEC.
Comparable Hotel Operating
Statistics
To facilitate a quarter-to-quarter comparison of
our operations, we present certain operating statistics (i.e.,
RevPAR, average daily rate and average occupancy) and operating
results (revenues, expenses, hotel EBITDA and associated margins)
for the periods included in this report on a comparable hotel
basis.
Because these statistics and operating results
relate only to our hotel properties, they exclude results for our
non-hotel properties and other real estate investments. We define
our comparable hotels as properties:
(i) that are owned or leased by us and the
operations of which are included in our consolidated results for
the entirety of the reporting periods being compared; and
(ii) that have not sustained substantial
property damage or business interruption, or undergone large-scale
capital projects (as further defined below) during the reporting
periods being compared.
The hotel business is capital-intensive and
renovations are a regular part of the business. Generally, hotels
under renovation remain comparable hotels. A large scale capital
project that would cause a hotel to be excluded from our comparable
hotel set is an extensive renovation of several core aspects of the
hotel, such as rooms, meeting space, lobby, bars, restaurants and
other public spaces. Both quantitative and qualitative factors are
taken into consideration in determining if the renovation would
cause a hotel to be removed from the comparable hotel set,
including unusual or exceptional circumstances such as: a reduction
or increase in room count, rebranding, a significant alteration of
the business operations, or the closing of the hotel during the
renovation.
We do not include an acquired hotel in our
comparable hotel set until the operating results for that hotel
have been included in our consolidated results for one full
calendar year. For example, we acquired the 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 93 hotels that we owned on
March 31, 2019, 87 have been classified as comparable hotels.
The operating results of the following hotels that we owned as of
March 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); and
- 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).
The operating results of five 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 page 9.
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 for our foreign operations were translated using the same
exchange rates that were effective for the comparable periods in
the current year, thereby eliminating the effect of currency
fluctuation for the year-over-year comparisons. For the full year
forecast results, we use the applicable forward currency curve (as
published by Bloomberg L.P.) for each monthly period to estimate
forecast foreign operations in U.S. dollars and have restated the
prior year RevPAR results using the same forecast exchange rates to
estimate year-over-year growth in RevPAR in constant US$. We
believe this presentation is useful to investors as it shows growth
in RevPAR in the local currency of the hotel consistent with how we
would evaluate our domestic portfolio. However, the estimated
effect of changes in foreign currency has been reflected in the
actual and forecast results of net income, EBITDA, Adjusted
EBITDAre, earnings per diluted share and Adjusted FFO per diluted
share. Nominal US$ results include the effect of currency
fluctuations, consistent with our financial statement
presentation.
Non-GAAP Financial Measures
Included in this press release are certain
“non-GAAP financial measures,” which are measures of our historical
or future financial performance that are not calculated and
presented in accordance with GAAP, within the meaning of applicable
SEC rules. They are as follows: (i) FFO and FFO per diluted
share (both NAREIT and Adjusted), (ii) EBITDA,
(iii) EBITDAre and Adjusted EBITDAre and (iv) Comparable
Hotel Property Level Operating Results. The following discussion
defines these measures and presents why we believe they are useful
supplemental measures of our performance.
NAREIT FFO and NAREIT FFO per Diluted Share
We present NAREIT FFO and NAREIT FFO per diluted
share as non-GAAP measures of our performance in addition to our
earnings per share (calculated in accordance with GAAP). We
calculate NAREIT FFO per diluted share as our NAREIT FFO (defined
as set forth below) for a given operating period, as adjusted for
the effect of dilutive securities, divided by the number of fully
diluted shares outstanding during such period, in accordance with
NAREIT guidelines. 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 who do not use
the NAREIT definition of FFO or do not calculate FFO per diluted
share in accordance with NAREIT guidance. In addition, although FFO
per diluted share is a useful measure when comparing our results to
other REITs, it may not be helpful to investors when comparing us
to non-REITs. We also calculate Adjusted FFO per diluted share,
which is not in accordance with NAREIT guidance and may not be
comparable to measures calculated by other REITs. EBITDA, EBITDAre
and Adjusted EBITDAre, as presented, may also not be comparable to
measures calculated by other companies. This information should not
be considered as an alternative to net income, operating profit,
cash from operations or any other operating performance measure
calculated in accordance with GAAP. Cash expenditures for various
long-term assets (such as renewal and replacement capital
expenditures), interest expense (for EBITDA, EBITDAre and Adjusted
EBITDAre purposes only) and other items have been and will be made
and are not reflected in the EBITDA, EBITDAre, Adjusted EBITDAre,
NAREIT FFO per diluted share and Adjusted FFO per diluted share
presentations. Management compensates for these limitations by
separately considering the impact of these excluded items to the
extent they are material to operating decisions or assessments of
our operating performance. Our consolidated statement of operations
and cash flows include interest expense, capital expenditures, and
other excluded items, all of which should be considered when
evaluating our performance, as well as the usefulness of our
non-GAAP financial measures. Additionally, NAREIT FFO per diluted
share, Adjusted FFO per diluted share, EBITDA, EBITDAre and
Adjusted EBITDAre should not be considered as a measure of our
liquidity or indicative of funds available to fund our cash needs,
including our ability to make cash distributions. In addition,
NAREIT FFO per diluted share and Adjusted FFO per diluted share do
not measure, and should not be used as a measure of, amounts that
accrue directly to stockholders’ benefit.
Similarly, EBITDAre, Adjusted EBITDAre, NAREIT
FFO and Adjusted FFO per diluted share include adjustments for the
pro rata share of our equity investments and NAREIT FFO and
Adjusted FFO per diluted share include adjustments for the pro rata
share of non-controlling partners in consolidated partnerships. Our
equity investments consist of interests ranging from 11% to 67% in
seven domestic and international partnerships that own a total of
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/6e2ec0b4-7200-4d01-a808-cfc7045fba54
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