BETHESDA, Md., Nov. 01, 2018 (GLOBE NEWSWIRE) -- 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 third quarter
of 2018.
James F. Risoleo, President and Chief Executive Officer, said, “We continue to be pleased with our operating
results. For the third quarter, the growth in RevPAR, which was in-line with our expectations, was complemented by food and
beverage outperformance and broad productivity gains that drove profitability and boosted our bottom-line performance above
expectations.”
“During the quarter, we continued to enhance our irreplaceable U.S. hotel portfolio through targeted
dispositions,” continued Mr. Risoleo. “We continue to focus our capital recycling efforts on reducing our international and New
York exposure, as evidenced by the sale of the JW Marriott Hotel Mexico City and reaching an agreement to sell our interest in the
European joint venture to our existing partners. In New York, we completed the previously announced sale of the W New York – Union
Square and placed the Westin New York Grand Central hotel under contract for $300 million, including FF&E funds. In addition,
we sold the retail space at the New York Marriott Marquis for $442 million. This transaction was an excellent example of creating
value for stockholders through portfolio investment, while also exiting a non-core asset at an attractive price. Proceeds from the
sales that have closed, plus those that we expect to close, total approximately $1.2 billion. Combined with our existing cash on
hand, these dispositions provide us incredible flexibility as we explore investment opportunities to create shareholder value,
including adding to our irreplaceable portfolio, investing in our existing assets, or buying back stock.”
Operating Results 1
(unaudited, in millions, except per share and hotel statistics)
| |
Quarter ended
September 30, |
|
Percent |
|
Year-to-date ended
September 30, |
|
Percent |
| |
|
2018 |
|
|
|
2017 |
|
Change |
|
|
2018 |
|
|
|
2017 |
|
Change |
| Total revenues |
|
$1,299 |
|
|
|
$1,254 |
|
3.6% |
|
|
|
$4,163 |
|
|
|
$4,043 |
|
3.0% |
| Comparable hotel revenues (1) |
|
1,128 |
|
|
|
1,098 |
|
2.8% |
|
|
|
3,540 |
|
|
|
3,451 |
|
2.6% |
| Net income |
|
378 |
|
|
|
105 |
|
260.0% |
|
|
|
845 |
|
|
|
478 |
|
76.8% |
| EBITDAre (1)(2) |
|
344 |
|
|
|
320 |
|
7.5% |
|
|
|
1,190 |
|
|
|
1,135 |
|
4.8% |
| Adjusted EBITDAre (1)(2) |
|
344 |
|
|
|
319 |
|
7.8% |
|
|
|
1,190 |
|
|
|
1,135 |
|
4.8% |
| Change in comparable hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
| Domestic properties |
|
1.4% |
|
|
|
|
|
|
|
1.7% |
|
|
|
|
|
International properties -
Constant US$ |
|
10.8% |
|
|
|
|
|
|
|
14.0% |
|
|
|
|
|
| Total - Constant US$ |
|
1.6% |
|
|
|
|
|
|
|
1.9% |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings per common share |
|
0.43 |
|
|
|
0.14 |
|
207.1% |
|
|
|
1.06 |
|
|
|
0.64 |
|
65.6% |
| NAREIT FFO and Adjusted FFO per diluted share (1) |
|
0.37 |
|
|
|
0.33 |
|
12.1% |
|
|
|
1.34 |
|
|
|
1.27 |
|
5.5% |
| |
|
|
|
|
|
|
|
|
|
|
|
Additional detail on the Company’s results, including data for 22 domestic markets and top 40 hotels by RevPAR,
is available in the Third Quarter 2018 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.
(2) Effective December 31, 2017, the Company presents EBITDAre, reported in accordance with NAREIT guidelines, and
Adjusted EBITDAre as supplemental measures of performance. Prior year results have been restated to conform with the
current year presentation. Under the new presentation, all of the EBITDA of consolidated partnerships is included, including the
non-controlling partners’ share, which has increased the previously reported 2017 Adjusted EBITDA by $2 million for the third
quarter and $7 million year-to-date. See the Notes to Financial Information for more information on this change.
Operating Performance
GAAP Metrics
- The improvements in total revenues of 3.6% for the quarter and 3.0% for year-to-date were driven by improvements in food and
beverage sales and the operations of the three hotel Hyatt portfolio acquired in 2018, partially offset by the disposition of
eight hotels in 2017 and 2018.
- GAAP operating profit margin declined 1,720 basis points for the quarter and 520 basis points for year-to-date, due to $239
million of impairment expense related to The Westin New York Grand Central hotel and Sheraton New York Times Square Hotel.
- Net income increased $273 million to $378 million for the quarter and $367 million to $845 million for
year-to-date primarily due to the increase in gain on sale of assets, discussed below.
- Diluted earnings per share increased 207.1% and 65.6% for the quarter and year-to-date, respectively.
Other Metrics
- Comparable RevPAR, on a constant dollar basis, improved 1.6% for the quarter, driven by a 1.5% increase in average room rate
and a 10 basis point increase in occupancy. Year-to-date, comparable RevPAR on a constant dollar basis improved 1.9%, driven by a
70 basis point increase in occupancy and a 1.0% increase in average room rate.
- Comparable hotel revenues increased 2.8% for the quarter and 2.6% for year-to-date. In addition to the increase in RevPAR
described above, the improvements in comparable revenues for the quarter reflect a 5.1% increase in food & beverage revenues,
driven by an increase in banquet revenues and a 9.4% increase in other revenues.
- Comparable hotel EBITDA increased $13 million, or 4.6%, for the quarter and $48 million, or 4.9%, year-to-date.
- Comparable hotel EBITDA margins improved 50 basis points for the quarter and 65 basis points year-to-date.
- Adjusted EBITDAre increased $25 million, or 7.8%, for the quarter and $55 million, or 4.8%, year-to-date.
- Adjusted FFO per diluted share increased 12.1% for the quarter and 5.5% year-to-date.
Dispositions
On September 27, 2018, the Company completed the sale of the JW Marriott Hotel Mexico City for $183 million.
This hotel was the previously announced but unidentified asset held for sale. The Company is a 52% majority owner of the
partnership that owned the hotel. As previously announced on September 21, 2018, the Company sold the New York Marriott
Marquis retail and theater commercial units and the related signage areas of the hotel (the “Retail”) to Vornado Realty Trust for
$442 million. Substantially all of the net proceeds from the sale of the Retail were used to close out a reverse like-kind exchange
structure established in connection with the acquisition of the Hyatt portfolio in March 2018. In addition, on September 6, 2018
the Company closed on the sale of the W New York – Union Square for a sale price of $171 million, including $3 million of
FF&E funds.
Subsequent to quarter end, the Company entered into an agreement to sell The Westin New York Grand Central for
$300 million, including approximately $20 million of FF&E funds. The sale is expected to close in the first quarter of 2019,
subject to customary closing conditions. The Company also reached an agreement to sell its approximate 33% interest in the European
joint venture to its partners for proceeds of approximately €435 million ($505 million). The sale is expected to close during the
fourth quarter, subject to customary closing conditions, including the receipt of required consents.
Capital Allocation
During the third quarter, the Company spent approximately $119 million on capital expenditures, of which
$48 million was return on investment (“ROI”) capital expenditures and $71 million was on renewal and replacement
projects. Year-to-date, the Company spent $320 million on capital expenditures, of which $106 million was ROI capital
expenditures and $214 million was on renewal and replacement projects.
For 2018, the Company continues to anticipate capital expenditures of $475 million to $520 million. This total
spend consists of $195 million to $220 million in ROI projects and $280 million to $300 million in renewal and
replacement projects.
While it is early in the 2019 capital budgeting process, the Company reached an agreement with Marriott
International to complete a number of transformational brand reinvestment capital projects, similar to that at the San Francisco
Marriott Marquis, over a phased four-year period. These portfolio investments are designed to better position these assets to
compete in their respective markets and enhance long-term performance. As a result, the Company intends to spend an incremental
$150 million to $200 million per year above its total historical capex spend during this time frame. In exchange, Marriott has
provided additional priority returns on the agreed upon investments and operating profit guarantees to offset expected business
disruption.
Dividends
The Company paid a regular quarterly cash dividend of $0.20 per share on its common stock on October 15, 2018 to
stockholders of record as of September 28, 2018. All future dividends, including any special dividends, are subject to approval by
the Company’s Board of Directors.
Balance Sheet
“We continued to enhance our investment grade balance sheet with accretive dispositions in the quarter. We
believe our strong liquidity position and access to capital provides a meaningful strategic advantage as we pursue a variety of
investment activities that will provide long-term stockholder value,” said Michael D. Bluhm, Chief Financial Officer.
At September 30, 2018, the Company had approximately $1,269 million of unrestricted cash, not
including $205 million in the FF&E escrow reserve, and $702 million of available capacity under the revolver portion of its
credit facility. Total debt as of September 30, 2018, was $4.1 billion, with an average maturity of 4.3 years and an
average interest rate of 4.1%. The Company has no debt maturities until 2020.
As previously announced, the Company entered into a distribution agreement by which the Company may issue and
sell, from time to time, shares of common stock having an aggregate offering price of up to $500 million. No shares have been
issued in 2018. The Company also has $500 million of capacity available under its current common share repurchase program. No
shares have been repurchased in 2018.
2018 Outlook
The Company anticipates that its 2018 operating results as compared to the prior year will change in the
following range:
| |
|
Previous Full Year 2018 Guidance |
|
Current Full Year 2018 Guidance |
|
Change in Full Year 2018 Guidance to
the Mid-Point |
| Total comparable hotel RevPAR - Constant US$ (1) |
|
1.75% to 2.5% |
|
1.9% to 2.1% |
|
(12.5 bps) |
| Total revenues under GAAP |
|
2.2% to 2.9% |
|
2.4% to 2.6% |
|
(5 bps) |
| Operating profit margin under GAAP |
|
80 bps to 140 bps |
|
(320 bps) to (300 bps) |
|
(420 bps) |
| Comparable hotel EBITDA margins (2) |
|
25 bps to 75 bps |
|
50 bps to 60 bps |
|
5 bps |
__________
(1) Forecast comparable hotel results include 85 hotels that are assumed will be classified as comparable as of
December 31, 2018. See the 2018 Forecast Schedules for a listing of hotels excluded from the full year 2018 comparable hotel
set.
(2) At the 2.0% midpoint of the RevPAR guidance, the improvement in comparable hotel EBITDA margin is 13 basis points higher
compared to the previous guidance.
Based upon the above parameters, the Company estimates its 2018 guidance as follows:
| |
|
Previous Full Year 2018 Guidance |
|
Current Full Year 2018 Guidance |
|
Change in Full Year 2018 Guidance to
the Mid-Point |
| Net income (in millions) |
|
$662 to $698 |
|
$971 to $981 |
|
$296 |
| Adjusted EBITDAre (in millions) |
|
$1,525 to $1,565 |
|
$1,545 to $1,555 |
|
$5 |
| Diluted earnings per common share |
|
$.88 to $.93 |
|
$1.23 to $1.24 |
|
$.33 |
| NAREIT FFO per diluted share |
|
$1.71 to $1.76 |
|
$1.74 to $1.76 |
|
$.015 |
| Adjusted FFO per diluted share |
|
$1.71 to $1.76 |
|
$1.74 to $1.76 |
|
$.015 |
See the 2018 Forecast Schedules and the Notes to Financial Information for other assumptions used in the
forecasts and items that may affect forecast results.
About Host Hotels & Resorts
Host Hotels & Resorts, Inc. is an S&P 500 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 88 properties in the United
States and five properties internationally totaling approximately 52,000 rooms. The Company also holds non-controlling interests in
seven domestic and international joint ventures. Guided by a disciplined approach to capital allocation and aggressive asset
management, the Company partners with premium brands such as Marriott®, Ritz-Carlton®, Westin®,
Sheraton®, W®, St. Regis®, Le Méridien®, The Luxury Collection®,
Hyatt®, Fairmont®, Hilton®, Swissôtel®, ibis® and Novotel®, as
well as independent brands in the operation of properties in over 50 major markets. For additional information, please visit the
Company’s website at www.hosthotels.com.
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 November 1, 2018, and the Company undertakes no obligation to update any
forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
* This press release contains registered trademarks that are the exclusive property of their respective owners.
None of the owners of these trademarks has any responsibility or liability for any information contained in this press release.
*** 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 September 30, 2018, 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)
| |
|
September 30, 2018 |
|
|
December 31, 2017 |
|
| |
|
|
|
|
|
|
|
|
| ASSETS |
|
| Property and equipment, net |
|
$ |
9,775 |
|
|
$ |
9,692 |
|
| Assets held for sale |
|
|
274 |
|
|
|
250 |
|
| Due from managers |
|
|
141 |
|
|
|
79 |
|
| Advances to and investments in affiliates |
|
|
320 |
|
|
|
327 |
|
| Furniture, fixtures and equipment replacement fund |
|
|
205 |
|
|
|
195 |
|
| Other |
|
|
171 |
|
|
|
237 |
|
| Cash and cash equivalents |
|
|
1,269 |
|
|
|
913 |
|
| Total assets |
|
$ |
12,155 |
|
|
$ |
11,693 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES, NON-CONTROLLING INTERESTS AND
EQUITY |
|
| Debt (1) |
|
|
|
|
|
|
|
|
| Senior notes |
|
$ |
2,781 |
|
|
$ |
2,778 |
|
Credit facility, including the term loans of $997 million and
$996 million,
respectively |
|
|
1,292 |
|
|
|
1,170 |
|
| Other debt |
|
|
6 |
|
|
|
6 |
|
| Total debt |
|
|
4,079 |
|
|
|
3,954 |
|
| Accounts payable and accrued expenses |
|
|
265 |
|
|
|
283 |
|
| Other |
|
|
246 |
|
|
|
287 |
|
| Total liabilities |
|
|
4,590 |
|
|
|
4,524 |
|
| |
|
|
|
|
|
|
|
|
| Non-controlling interests - Host Hotels & Resorts, L.P. |
|
|
170 |
|
|
|
167 |
|
| |
|
|
|
|
|
|
|
|
| Host Hotels & Resorts, Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, par value $.01, 1,050 million shares authorized,
740 million shares and 739.1 million shares issued and outstanding,
respectively |
|
|
7 |
|
|
|
7 |
|
| Additional paid-in capital |
|
|
8,108 |
|
|
|
8,097 |
|
| Accumulated other comprehensive loss |
|
|
(65 |
) |
|
|
(60 |
) |
| Deficit |
|
|
(728 |
) |
|
|
(1,071 |
) |
| Total equity of Host Hotels & Resorts, Inc. stockholders |
|
|
7,322 |
|
|
|
6,973 |
|
| Non-controlling interests—other consolidated partnerships |
|
|
73 |
|
|
|
29 |
|
| Total equity |
|
|
7,395 |
|
|
|
7,002 |
|
| Total liabilities, non-controlling interests and equity |
|
$ |
12,155 |
|
|
$ |
11,693 |
|
| ___________ |
|
|
|
|
|
|
|
|
(1) Please see our Third Quarter 2018 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
September 30, |
|
|
Year-to-date ended
September 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rooms |
|
$ |
874 |
|
|
$ |
860 |
|
|
$ |
2,691 |
|
|
$ |
2,643 |
|
| Food and beverage |
|
|
337 |
|
|
|
314 |
|
|
|
1,199 |
|
|
|
1,152 |
|
| Other |
|
|
88 |
|
|
|
80 |
|
|
|
273 |
|
|
|
248 |
|
| Total revenues |
|
|
1,299 |
|
|
|
1,254 |
|
|
|
4,163 |
|
|
|
4,043 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rooms |
|
|
234 |
|
|
|
227 |
|
|
|
696 |
|
|
|
676 |
|
| Food and beverage |
|
|
254 |
|
|
|
242 |
|
|
|
822 |
|
|
|
794 |
|
| Other departmental and support expenses |
|
|
321 |
|
|
|
309 |
|
|
|
972 |
|
|
|
952 |
|
| Management fees |
|
|
56 |
|
|
|
53 |
|
|
|
183 |
|
|
|
178 |
|
| Other property-level expenses |
|
|
90 |
|
|
|
97 |
|
|
|
287 |
|
|
|
294 |
|
| Depreciation and amortization(1) |
|
|
412 |
|
|
|
176 |
|
|
|
779 |
|
|
|
534 |
|
| Corporate and other expenses(2) |
|
|
24 |
|
|
|
24 |
|
|
|
82 |
|
|
|
79 |
|
| Gain on insurance and business interruption settlements |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(6 |
) |
| Total operating costs and expenses |
|
|
1,391 |
|
|
|
1,127 |
|
|
|
3,821 |
|
|
|
3,501 |
|
| Operating profit (loss) |
|
|
(92 |
) |
|
|
127 |
|
|
|
342 |
|
|
|
542 |
|
| Interest income |
|
|
3 |
|
|
|
2 |
|
|
|
8 |
|
|
|
4 |
|
| Interest expense |
|
|
(45 |
) |
|
|
(43 |
) |
|
|
(134 |
) |
|
|
(125 |
) |
| Gain on sale of assets |
|
|
547 |
|
|
|
59 |
|
|
|
667 |
|
|
|
105 |
|
| Gain (loss) on foreign currency transactions and derivatives |
|
|
1 |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(4 |
) |
| Equity in earnings of affiliates |
|
|
6 |
|
|
|
4 |
|
|
|
25 |
|
|
|
19 |
|
| Income before income taxes |
|
|
420 |
|
|
|
147 |
|
|
|
908 |
|
|
|
541 |
|
| Provision for income taxes |
|
|
(42 |
) |
|
|
(42 |
) |
|
|
(63 |
) |
|
|
(63 |
) |
| Net income |
|
|
378 |
|
|
|
105 |
|
|
|
845 |
|
|
|
478 |
|
| Less: Net
income attributable to non-controlling interests(3) |
|
|
(56 |
) |
|
|
(1 |
) |
|
|
(61 |
) |
|
|
(6 |
) |
| Net income attributable to Host Inc. |
|
$ |
322 |
|
|
$ |
104 |
|
|
$ |
784 |
|
|
$ |
472 |
|
| Basic and diluted
earnings per common share |
|
$ |
.43 |
|
|
$ |
.14 |
|
|
$ |
1.06 |
|
|
$ |
.64 |
|
| ___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Depreciation and amortization expense includes impairment expense of $239 million on two properties in the
third quarter of 2018 and $21 million on two properties during the first half of 2018.
(2) Corporate and other expenses include the following items:
| |
|
Quarter ended
September 30, |
|
|
Year-to-date ended
September 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| General and administrative costs |
|
$ |
20 |
|
|
$ |
21 |
|
|
$ |
71 |
|
|
$ |
70 |
|
| Non-cash stock-based compensation expense |
|
|
4 |
|
|
|
3 |
|
|
|
11 |
|
|
|
8 |
|
| Litigation accruals and acquisition costs, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
| Total |
|
$ |
24 |
|
|
$ |
24 |
|
|
$ |
82 |
|
|
$ |
79 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Net income attributable to non-controlling interests for the quarter and year-to-date 2018
includes $53 million for the non-controlling partner’s portion of the gain, net of tax, on the sale of the JW Marriott Hotel Mexico
City.
HOST HOTELS & RESORTS, INC.
Earnings per Common Share
(unaudited, in millions, except per share amounts)
| |
|
Quarter ended
September 30, |
|
|
Year-to-date ended
September 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Net income |
|
$ |
378 |
|
|
$ |
105 |
|
|
$ |
845 |
|
|
$ |
478 |
|
| Less: Net income attributable to non-controlling interests |
|
|
(56 |
) |
|
|
(1 |
) |
|
|
(61 |
) |
|
|
(6 |
) |
| Net income attributable to Host Inc |
|
$ |
322 |
|
|
$ |
104 |
|
|
$ |
784 |
|
|
$ |
472 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic weighted average shares outstanding |
|
|
739.9 |
|
|
|
738.8 |
|
|
|
739.6 |
|
|
|
738.5 |
|
Assuming distribution of common shares granted under the
comprehensive stock plans, less shares assumed
purchased at market |
|
|
.6 |
|
|
|
.2 |
|
|
|
.6 |
|
|
|
.2 |
|
| Diluted weighted average shares outstanding (1) |
|
|
740.5 |
|
|
|
739.0 |
|
|
|
740.2 |
|
|
|
738.7 |
|
| Basic and diluted earnings per common share |
|
$ |
.43 |
|
|
$ |
.14 |
|
|
$ |
1.06 |
|
|
$ |
.64 |
|
| ___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 September 30,
2018 |
|
|
Quarter ended September
30, 2018 |
|
|
Quarter ended September
30, 2017 |
|
|
|
|
|
| Location |
|
No. of
Properties |
|
|
No.
of
Rooms |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Percent
Change in
RevPAR |
|
| Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
344.07 |
|
|
|
89.9 |
% |
|
$ |
309.41 |
|
|
$ |
325.44 |
|
|
|
92.4 |
% |
|
$ |
300.75 |
|
|
|
2.9 |
% |
| Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
360.43 |
|
|
|
77.7 |
|
|
|
280.14 |
|
|
|
347.34 |
|
|
|
64.5 |
|
|
|
224.07 |
|
|
|
25.0 |
|
| New York |
|
|
4 |
|
|
|
5,033 |
|
|
|
281.58 |
|
|
|
90.4 |
|
|
|
254.59 |
|
|
|
282.83 |
|
|
|
92.6 |
|
|
|
261.91 |
|
|
|
(2.8 |
) |
| Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
280.39 |
|
|
|
92.6 |
|
|
|
259.59 |
|
|
|
267.84 |
|
|
|
93.6 |
|
|
|
250.75 |
|
|
|
3.5 |
|
| Washington, D.C. (CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
205.95 |
|
|
|
83.7 |
|
|
|
172.41 |
|
|
|
216.94 |
|
|
|
86.9 |
|
|
|
188.63 |
|
|
|
(8.6 |
) |
| Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
249.19 |
|
|
|
91.1 |
|
|
|
227.10 |
|
|
|
244.72 |
|
|
|
88.5 |
|
|
|
216.68 |
|
|
|
4.8 |
|
| San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
239.77 |
|
|
|
85.0 |
|
|
|
203.73 |
|
|
|
233.72 |
|
|
|
86.4 |
|
|
|
201.92 |
|
|
|
0.9 |
|
| Los Angeles |
|
|
3 |
|
|
|
1,421 |
|
|
|
224.65 |
|
|
|
88.7 |
|
|
|
199.17 |
|
|
|
230.75 |
|
|
|
93.5 |
|
|
|
215.73 |
|
|
|
(7.7 |
) |
| San Francisco/San Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
235.07 |
|
|
|
87.2 |
|
|
|
205.07 |
|
|
|
221.52 |
|
|
|
86.1 |
|
|
|
190.71 |
|
|
|
7.5 |
|
| Florida Gulf Coast |
|
|
2 |
|
|
|
593 |
|
|
|
170.75 |
|
|
|
59.2 |
|
|
|
101.03 |
|
|
|
168.26 |
|
|
|
62.1 |
|
|
|
104.45 |
|
|
|
(3.3 |
) |
| Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
204.34 |
|
|
|
85.9 |
|
|
|
175.60 |
|
|
|
188.80 |
|
|
|
84.2 |
|
|
|
158.99 |
|
|
|
10.4 |
|
| Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
218.19 |
|
|
|
87.8 |
|
|
|
191.60 |
|
|
|
204.47 |
|
|
|
88.5 |
|
|
|
180.94 |
|
|
|
5.9 |
|
| Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
147.56 |
|
|
|
63.7 |
|
|
|
94.01 |
|
|
|
142.34 |
|
|
|
65.7 |
|
|
|
93.47 |
|
|
|
0.6 |
|
| Orange County |
|
|
4 |
|
|
|
1,429 |
|
|
|
199.42 |
|
|
|
82.8 |
|
|
|
165.11 |
|
|
|
196.64 |
|
|
|
82.1 |
|
|
|
161.35 |
|
|
|
2.3 |
|
| Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
182.19 |
|
|
|
78.8 |
|
|
|
143.65 |
|
|
|
189.32 |
|
|
|
75.9 |
|
|
|
143.69 |
|
|
|
— |
|
| New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
138.93 |
|
|
|
73.9 |
|
|
|
102.70 |
|
|
|
135.25 |
|
|
|
71.0 |
|
|
|
96.02 |
|
|
|
7.0 |
|
| Northern Virginia |
|
|
5 |
|
|
|
1,919 |
|
|
|
178.58 |
|
|
|
75.5 |
|
|
|
134.78 |
|
|
|
173.28 |
|
|
|
77.1 |
|
|
|
133.68 |
|
|
|
0.8 |
|
| San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
168.21 |
|
|
|
74.3 |
|
|
|
125.04 |
|
|
|
165.71 |
|
|
|
66.9 |
|
|
|
110.88 |
|
|
|
12.8 |
|
| Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
150.91 |
|
|
|
64.1 |
|
|
|
96.80 |
|
|
|
148.77 |
|
|
|
63.7 |
|
|
|
94.82 |
|
|
|
2.1 |
|
| Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
175.61 |
|
|
|
85.4 |
|
|
|
150.02 |
|
|
|
167.43 |
|
|
|
87.3 |
|
|
|
146.09 |
|
|
|
2.7 |
|
| Miami |
|
|
2 |
|
|
|
843 |
|
|
|
119.78 |
|
|
|
73.0 |
|
|
|
87.49 |
|
|
|
121.88 |
|
|
|
65.5 |
|
|
|
79.87 |
|
|
|
9.5 |
|
| Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
170.82 |
|
|
|
67.1 |
|
|
|
114.70 |
|
|
|
168.11 |
|
|
|
66.3 |
|
|
|
111.49 |
|
|
|
2.9 |
|
| Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
159.15 |
|
|
|
76.1 |
|
|
|
121.05 |
|
|
|
160.43 |
|
|
|
75.2 |
|
|
|
120.61 |
|
|
|
0.4 |
|
| Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
218.40 |
|
|
|
81.7 |
|
|
|
178.48 |
|
|
|
215.42 |
|
|
|
81.7 |
|
|
|
176.05 |
|
|
|
1.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| International |
|
|
5 |
|
|
|
1,499 |
|
|
|
165.21 |
|
|
|
70.9 |
|
|
|
117.20 |
|
|
|
154.86 |
|
|
|
68.3 |
|
|
|
105.82 |
|
|
|
10.8 |
|
All Locations -
Constant US$ |
|
|
85 |
|
|
|
47,455 |
|
|
|
216.93 |
|
|
|
81.4 |
|
|
|
176.55 |
|
|
|
213.81 |
|
|
|
81.3 |
|
|
|
173.83 |
|
|
|
1.6 |
|
All Owned Hotels in Constant US$ (2)
| |
|
As of September 30,
2018 |
|
|
Quarter ended September
30, 2018 |
|
|
Quarter ended September
30, 2017 |
|
|
|
|
|
| |
|
No. of
Properties |
|
|
No.
of
Rooms |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Percent
Change in
RevPAR |
|
| Comparable Hotels.. |
|
|
85 |
|
|
|
47,455 |
|
|
$ |
216.93 |
|
|
|
81.4 |
% |
|
$ |
176.55 |
|
|
$ |
213.81 |
|
|
|
81.3 |
% |
|
$ |
173.83 |
|
|
|
1.6 |
% |
| Non-comparable Hotels (Pro forma) |
|
|
8 |
|
|
|
4,664 |
|
|
|
290.65 |
|
|
|
74.7 |
|
|
|
217.23 |
|
|
|
293.55 |
|
|
|
74.8 |
|
|
|
219.58 |
|
|
|
(1.1 |
) |
| All Hotels |
|
|
93 |
|
|
|
52,119 |
|
|
|
223.03 |
|
|
|
80.8 |
|
|
|
180.19 |
|
|
|
220.42 |
|
|
|
80.7 |
|
|
|
177.93 |
|
|
|
1.3 |
|
Comparable Hotels in Nominal US$
| |
|
As of September 30,
2018 |
|
|
Quarter ended September
30, 2018 |
|
|
Quarter ended September
30, 2017 |
|
|
|
|
|
| |
|
No. of
Properties |
|
|
No.
of
Rooms |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Percent
Change in
RevPAR |
|
| International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
165.21 |
|
|
|
70.9 |
% |
|
$ |
117.20 |
|
|
$ |
168.75 |
|
|
|
68.3 |
% |
|
$ |
115.31 |
|
|
|
1.6 |
% |
| Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
218.40 |
|
|
|
81.7 |
|
|
|
178.48 |
|
|
|
215.42 |
|
|
|
81.7 |
|
|
|
176.05 |
|
|
|
1.4 |
|
| All Locations |
|
|
85 |
|
|
|
47,455 |
|
|
|
216.93 |
|
|
|
81.4 |
|
|
|
176.55 |
|
|
|
214.18 |
|
|
|
81.3 |
|
|
|
174.13 |
|
|
|
1.4 |
|
Comparable Hotels by Location in Constant US$
| |
|
As of September 30,
2018 |
|
|
Year-to-date ended
September 30, 2018 |
|
|
Year-to-date ended
September 30, 2017 |
|
|
|
|
|
| Location |
|
No. of
Properties |
|
|
No.
of
Rooms |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Percent
Change in
RevPAR |
|
| Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
360.97 |
|
|
|
91.0 |
% |
|
$ |
328.41 |
|
|
$ |
339.86 |
|
|
|
90.9 |
% |
|
$ |
308.79 |
|
|
|
6.4 |
% |
| Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
373.17 |
|
|
|
77.9 |
|
|
|
290.68 |
|
|
|
359.82 |
|
|
|
73.9 |
|
|
|
265.89 |
|
|
|
9.3 |
|
| New York |
|
|
4 |
|
|
|
5,033 |
|
|
|
279.83 |
|
|
|
86.6 |
|
|
|
242.31 |
|
|
|
273.51 |
|
|
|
88.0 |
|
|
|
240.73 |
|
|
|
0.7 |
|
| Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
248.28 |
|
|
|
85.5 |
|
|
|
212.25 |
|
|
|
242.23 |
|
|
|
86.8 |
|
|
|
210.24 |
|
|
|
1.0 |
|
| Washington, D.C. (CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
248.62 |
|
|
|
81.8 |
|
|
|
203.28 |
|
|
|
259.86 |
|
|
|
84.5 |
|
|
|
219.55 |
|
|
|
(7.4 |
) |
| Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
235.72 |
|
|
|
83.7 |
|
|
|
197.34 |
|
|
|
237.07 |
|
|
|
82.5 |
|
|
|
195.54 |
|
|
|
0.9 |
|
| San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
234.70 |
|
|
|
83.8 |
|
|
|
196.79 |
|
|
|
233.28 |
|
|
|
84.7 |
|
|
|
197.49 |
|
|
|
(0.4 |
) |
| Los Angeles |
|
|
3 |
|
|
|
1,421 |
|
|
|
216.97 |
|
|
|
89.5 |
|
|
|
194.24 |
|
|
|
222.05 |
|
|
|
90.0 |
|
|
|
199.84 |
|
|
|
(2.8 |
) |
| San Francisco/San Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
230.22 |
|
|
|
84.2 |
|
|
|
193.86 |
|
|
|
221.22 |
|
|
|
79.7 |
|
|
|
176.28 |
|
|
|
10.0 |
|
| Florida Gulf Coast |
|
|
2 |
|
|
|
593 |
|
|
|
250.18 |
|
|
|
72.9 |
|
|
|
182.26 |
|
|
|
237.39 |
|
|
|
73.7 |
|
|
|
175.01 |
|
|
|
4.1 |
|
| Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
207.10 |
|
|
|
86.2 |
|
|
|
178.43 |
|
|
|
197.10 |
|
|
|
82.2 |
|
|
|
162.06 |
|
|
|
10.1 |
|
| Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
204.60 |
|
|
|
79.7 |
|
|
|
163.14 |
|
|
|
197.01 |
|
|
|
79.6 |
|
|
|
156.82 |
|
|
|
4.0 |
|
| Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
212.76 |
|
|
|
75.5 |
|
|
|
160.71 |
|
|
|
208.06 |
|
|
|
74.1 |
|
|
|
154.14 |
|
|
|
4.3 |
|
| Orange County |
|
|
4 |
|
|
|
1,429 |
|
|
|
193.34 |
|
|
|
80.2 |
|
|
|
155.07 |
|
|
|
192.63 |
|
|
|
80.2 |
|
|
|
154.50 |
|
|
|
0.4 |
|
| Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
185.87 |
|
|
|
79.2 |
|
|
|
147.22 |
|
|
|
192.65 |
|
|
|
78.1 |
|
|
|
150.46 |
|
|
|
(2.2 |
) |
| New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
178.86 |
|
|
|
80.6 |
|
|
|
144.23 |
|
|
|
174.77 |
|
|
|
77.0 |
|
|
|
134.55 |
|
|
|
7.2 |
|
| Northern Virginia |
|
|
5 |
|
|
|
1,919 |
|
|
|
186.89 |
|
|
|
76.9 |
|
|
|
143.67 |
|
|
|
184.85 |
|
|
|
76.0 |
|
|
|
140.46 |
|
|
|
2.3 |
|
| San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
186.50 |
|
|
|
74.5 |
|
|
|
138.94 |
|
|
|
182.03 |
|
|
|
73.4 |
|
|
|
133.68 |
|
|
|
3.9 |
|
| Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
185.03 |
|
|
|
73.5 |
|
|
|
136.06 |
|
|
|
178.01 |
|
|
|
71.4 |
|
|
|
127.19 |
|
|
|
7.0 |
|
| Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
167.17 |
|
|
|
78.1 |
|
|
|
130.63 |
|
|
|
165.67 |
|
|
|
77.4 |
|
|
|
128.22 |
|
|
|
1.9 |
|
| Miami |
|
|
2 |
|
|
|
843 |
|
|
|
159.30 |
|
|
|
80.7 |
|
|
|
128.63 |
|
|
|
159.33 |
|
|
|
78.2 |
|
|
|
124.66 |
|
|
|
3.2 |
|
| Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
176.15 |
|
|
|
72.8 |
|
|
|
128.23 |
|
|
|
179.40 |
|
|
|
71.8 |
|
|
|
128.87 |
|
|
|
(0.5 |
) |
| Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
169.63 |
|
|
|
75.4 |
|
|
|
127.94 |
|
|
|
168.38 |
|
|
|
73.9 |
|
|
|
124.43 |
|
|
|
2.8 |
|
| Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
224.35 |
|
|
|
81.1 |
|
|
|
181.95 |
|
|
|
222.11 |
|
|
|
80.6 |
|
|
|
178.94 |
|
|
|
1.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| International |
|
|
5 |
|
|
|
1,499 |
|
|
|
161.22 |
|
|
|
66.5 |
|
|
|
107.26 |
|
|
|
156.18 |
|
|
|
60.2 |
|
|
|
94.09 |
|
|
|
14.0 |
|
All Locations -
Constant US$ |
|
|
85 |
|
|
|
47,455 |
|
|
|
222.71 |
|
|
|
80.6 |
|
|
|
179.59 |
|
|
|
220.54 |
|
|
|
79.9 |
|
|
|
176.26 |
|
|
|
1.9 |
|
All Owned Hotels in Constant US$ (2)
| |
|
As of September 30,
2018 |
|
|
Year-to-date ended
September 30, 2018 |
|
|
Year-to-date ended
September 30, 2017 |
|
|
|
|
|
| |
|
No. of
Properties |
|
|
No.
of
Rooms |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Percent
Change in
RevPAR |
|
| Comparable Hotels |
|
|
85 |
|
|
|
47,455 |
|
|
$ |
222.71 |
|
|
|
80.6 |
% |
|
$ |
179.59 |
|
|
$ |
220.54 |
|
|
|
79.9 |
% |
|
$ |
176.26 |
|
|
|
1.9 |
% |
| Non-comparable Hotels (Pro forma) |
|
|
8 |
|
|
|
4,664 |
|
|
|
337.79 |
|
|
|
81.6 |
|
|
|
275.66 |
|
|
|
330.87 |
|
|
|
80.6 |
|
|
|
266.54 |
|
|
|
3.4 |
|
| All Hotels |
|
|
93 |
|
|
|
52,119 |
|
|
|
233.12 |
|
|
|
80.7 |
|
|
|
188.19 |
|
|
|
230.48 |
|
|
|
80.0 |
|
|
|
184.33 |
|
|
|
2.1 |
|
Comparable Hotels in Nominal US$
| |
|
As of September 30,
2018 |
|
|
Year-to-date ended
September 30, 2018 |
|
|
Year-to-date ended
September 30, 2017 |
|
|
|
|
|
| |
|
No. of
Properties |
|
|
No.
of
Rooms |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Average
Room Rate |
|
|
Average
Occupancy
Percentage |
|
|
RevPAR |
|
|
Percent
Change in
RevPAR |
|
| International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
161.22 |
|
|
|
66.5 |
% |
|
$ |
107.26 |
|
|
$ |
161.23 |
|
|
|
60.2 |
% |
|
$ |
97.14 |
|
|
|
10.4 |
% |
| Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
224.35 |
|
|
|
81.1 |
|
|
|
181.95 |
|
|
|
222.11 |
|
|
|
80.6 |
|
|
|
178.94 |
|
|
|
1.7 |
|
| All Locations |
|
|
85 |
|
|
|
47,455 |
|
|
|
222.71 |
|
|
|
80.6 |
|
|
|
179.59 |
|
|
|
220.66 |
|
|
|
79.9 |
|
|
|
176.35 |
|
|
|
1.8 |
|
(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 September 30, 2018 and do
not include the results of operations for properties sold in 2018 or 2017. 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. See the Notes to Financial Information – Comparable Hotel Operating
Statistics for further information on these pro forma statistics and the limitations on their use.
- Non-comparable hotels (pro forma) - This represents three hotels under significant renovations in 2017 and 2018, and
five hotels acquired in 2017 and 2018, which are presented on a pro forma basis assuming we owned the hotels as of January 1,
2017 and includes historical operating data for periods prior to our ownership. As a result, the RevPAR decrease of 1.1% and
increase of 3.4% for the quarter and year-to-date, respectively for these eight hotels are considered non-comparable.
HOST HOTELS & RESORTS, INC.
Schedule of Comparable Hotel Results (1)
(unaudited, in millions, except hotel statistics)
| |
|
Quarter ended September
30, |
|
|
Year-to-date ended
September 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Number of hotels |
|
|
85 |
|
|
|
85 |
|
|
|
85 |
|
|
|
85 |
|
| Number of rooms |
|
|
47,455 |
|
|
|
47,455 |
|
|
|
47,455 |
|
|
|
47,455 |
|
| Change in comparable hotel RevPAR - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Constant US$ |
|
|
1.6 |
% |
|
|
— |
|
|
|
1.9 |
% |
|
|
— |
|
| Nominal US$ |
|
|
1.4 |
% |
|
|
— |
|
|
|
1.8 |
% |
|
|
— |
|
| Operating profit (loss) margin (2) |
|
|
(7.1 |
)% |
|
|
10.1 |
% |
|
|
8.2 |
% |
|
|
13.4 |
% |
| Comparable hotel EBITDA margin (2) |
|
|
27.4 |
% |
|
|
26.9 |
% |
|
|
29.05 |
% |
|
|
28.4 |
% |
| Food and beverage profit margin (2) |
|
|
24.6 |
% |
|
|
22.9 |
% |
|
|
31.4 |
% |
|
|
31.1 |
% |
| Comparable hotel food and beverage profit margin (2) |
|
|
27.0 |
% |
|
|
25.6 |
% |
|
|
32.5 |
% |
|
|
32.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
378 |
|
|
$ |
105 |
|
|
$ |
845 |
|
|
$ |
478 |
|
| Depreciation and amortization |
|
|
412 |
|
|
|
176 |
|
|
|
779 |
|
|
|
534 |
|
| Interest expense |
|
|
45 |
|
|
|
43 |
|
|
|
134 |
|
|
|
125 |
|
| Provision for income taxes |
|
|
42 |
|
|
|
42 |
|
|
|
63 |
|
|
|
63 |
|
| Gain on sale of property and corporate level income/expense |
|
|
(533 |
) |
|
|
(39 |
) |
|
|
(618 |
) |
|
|
(45 |
) |
| Non-comparable hotel results, net (3) |
|
|
(35 |
) |
|
|
(31 |
) |
|
|
(174 |
) |
|
|
(174 |
) |
| Comparable hotel EBITDA |
|
$ |
309 |
|
|
$ |
296 |
|
|
$ |
1,029 |
|
|
$ |
981 |
|
| |
|
Quarter ended September
30, 2018 |
|
|
Quarter ended September
30, 2017 |
|
| |
|
|
|
|
|
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 |
|
$ |
874 |
|
|
$ |
(103 |
) |
|
$ |
— |
|
|
$ |
771 |
|
|
$ |
860 |
|
|
$ |
(100 |
) |
|
$ |
— |
|
|
$ |
760 |
|
| Food and beverage |
|
|
337 |
|
|
|
(45 |
) |
|
|
— |
|
|
|
292 |
|
|
|
314 |
|
|
|
(36 |
) |
|
|
— |
|
|
|
278 |
|
| Other |
|
|
88 |
|
|
|
(23 |
) |
|
|
— |
|
|
|
65 |
|
|
|
80 |
|
|
|
(20 |
) |
|
|
— |
|
|
|
60 |
|
| Total revenues |
|
|
1,299 |
|
|
|
(171 |
) |
|
|
— |
|
|
|
1,128 |
|
|
|
1,254 |
|
|
|
(156 |
) |
|
|
— |
|
|
|
1,098 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Room |
|
|
234 |
|
|
|
(32 |
) |
|
|
— |
|
|
|
202 |
|
|
|
227 |
|
|
|
(30 |
) |
|
|
— |
|
|
|
197 |
|
| Food and beverage |
|
|
254 |
|
|
|
(41 |
) |
|
|
— |
|
|
|
213 |
|
|
|
242 |
|
|
|
(35 |
) |
|
|
— |
|
|
|
207 |
|
| Other |
|
|
467 |
|
|
|
(63 |
) |
|
|
— |
|
|
|
404 |
|
|
|
459 |
|
|
|
(61 |
) |
|
|
— |
|
|
|
398 |
|
| Depreciation and amortization |
|
|
412 |
|
|
|
— |
|
|
|
(412 |
) |
|
|
— |
|
|
|
176 |
|
|
|
— |
|
|
|
(176 |
) |
|
|
— |
|
| Corporate and other expenses |
|
|
24 |
|
|
|
— |
|
|
|
(24 |
) |
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
(24 |
) |
|
|
— |
|
Gain on insurance and business
interruption settlements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
| Total expenses |
|
|
1,391 |
|
|
|
(136 |
) |
|
|
(436 |
) |
|
|
819 |
|
|
|
1,127 |
|
|
|
(125 |
) |
|
|
(200 |
) |
|
|
802 |
|
Operating Profit - Comparable
Hotel EBITDA |
|
$ |
(92 |
) |
|
$ |
(35 |
) |
|
$ |
436 |
|
|
$ |
309 |
|
|
$ |
127 |
|
|
$ |
(31 |
) |
|
$ |
200 |
|
|
$ |
296 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS, INC.
Schedule of Comparable Hotel Results (1)
(unaudited, in millions, except hotel statistics)
| |
|
Year-to-date ended
September 30, 2018 |
|
|
Year-to-date ended
September 30, 2017 |
|
| |
|
|
|
|
|
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 |
|
$ |
2,691 |
|
|
$ |
(364 |
) |
|
$ |
— |
|
|
$ |
2,327 |
|
|
$ |
2,643 |
|
|
$ |
(358 |
) |
|
$ |
— |
|
|
$ |
2,285 |
|
| Food and beverage |
|
|
1,199 |
|
|
|
(185 |
) |
|
|
— |
|
|
|
1,014 |
|
|
|
1,152 |
|
|
|
(166 |
) |
|
|
— |
|
|
|
986 |
|
| Other |
|
|
273 |
|
|
|
(74 |
) |
|
|
— |
|
|
|
199 |
|
|
|
248 |
|
|
|
(68 |
) |
|
|
— |
|
|
|
180 |
|
| Total revenues |
|
|
4,163 |
|
|
|
(623 |
) |
|
|
— |
|
|
|
3,540 |
|
|
|
4,043 |
|
|
|
(592 |
) |
|
|
— |
|
|
|
3,451 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Room |
|
|
696 |
|
|
|
(101 |
) |
|
|
— |
|
|
|
595 |
|
|
|
676 |
|
|
|
(97 |
) |
|
|
— |
|
|
|
579 |
|
| Food and beverage |
|
|
822 |
|
|
|
(138 |
) |
|
|
— |
|
|
|
684 |
|
|
|
794 |
|
|
|
(125 |
) |
|
|
— |
|
|
|
669 |
|
| Other |
|
|
1,442 |
|
|
|
(210 |
) |
|
|
— |
|
|
|
1,232 |
|
|
|
1,424 |
|
|
|
(202 |
) |
|
|
— |
|
|
|
1,222 |
|
| Depreciation and amortization |
|
|
779 |
|
|
|
— |
|
|
|
(779 |
) |
|
|
— |
|
|
|
534 |
|
|
|
— |
|
|
|
(534 |
) |
|
|
— |
|
| Corporate and other expenses |
|
|
82 |
|
|
|
— |
|
|
|
(82 |
) |
|
|
— |
|
|
|
79 |
|
|
|
— |
|
|
|
(79 |
) |
|
|
— |
|
Gain on insurance and business
interruption settlements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
|
|
6 |
|
|
|
— |
|
|
|
— |
|
| Total expenses |
|
|
3,821 |
|
|
|
(449 |
) |
|
|
(861 |
) |
|
|
2,511 |
|
|
|
3,501 |
|
|
|
(418 |
) |
|
|
(613 |
) |
|
|
2,470 |
|
| Operating Profit - Comparable Hotel
EBITDA |
|
$ |
342 |
|
|
$ |
(174 |
) |
|
$ |
861 |
|
|
$ |
1,029 |
|
|
$ |
542 |
|
|
$ |
(174 |
) |
|
$ |
613 |
|
|
$ |
981 |
|
| ___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Third Quarter 2018
Supplemental Financial Information posted on our website.
(2) Profit (loss) margins are calculated by dividing the applicable operating profit (loss) by the related revenue
amount. GAAP profit (loss) margins are calculated using amounts presented in the condensed consolidated statements of operations.
Comparable hotel margins are calculated using amounts presented in the above tables.
(3) Non-comparable hotel results, net, includes the following items: (i) the results of operations of our
non-comparable hotels and sold hotels, which operations are included in our condensed consolidated statements of operations as
continuing operations, (ii) gains on insurance settlements and business interruption proceeds, and (iii) the results of
our office spaces and other non-hotel income.
HOST HOTELS & RESORTS, INC.
Reconciliation of Net Income to
EBITDA, EBITDAre and Adjusted EBITDAre (1)
(unaudited, in millions)
| |
|
Quarter ended
September 30, |
|
|
Year-to-date ended
September 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Net income (2) |
|
$ |
378 |
|
|
$ |
105 |
|
|
$ |
845 |
|
|
$ |
478 |
|
| Interest expense |
|
|
45 |
|
|
|
43 |
|
|
|
134 |
|
|
|
125 |
|
| Depreciation and amortization |
|
|
173 |
|
|
|
176 |
|
|
|
519 |
|
|
|
534 |
|
| Income taxes |
|
|
42 |
|
|
|
42 |
|
|
|
63 |
|
|
|
63 |
|
| EBITDA (2) |
|
|
638 |
|
|
|
366 |
|
|
|
1,561 |
|
|
|
1,200 |
|
| Gain on dispositions (3) |
|
|
(546 |
) |
|
|
(58 |
) |
|
|
(665 |
) |
|
|
(101 |
) |
| Non-cash impairment expense |
|
|
239 |
|
|
|
— |
|
|
|
260 |
|
|
|
— |
|
| Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity in earnings of Euro JV (5) |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(11 |
) |
|
|
(9 |
) |
| Equity in earnings of affiliates other than Euro JV |
|
|
(3 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
(10 |
) |
| Pro rata EBITDAre of Euro JV (5) |
|
|
13 |
|
|
|
11 |
|
|
|
36 |
|
|
|
31 |
|
| Pro rata EBITDAre of equity investments other than Euro
JV |
|
|
6 |
|
|
|
5 |
|
|
|
23 |
|
|
|
24 |
|
| EBITDAre (2)(6) |
|
|
344 |
|
|
|
320 |
|
|
|
1,190 |
|
|
|
1,135 |
|
| Adjustments to EBITDAre: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
| Gain on property insurance settlement |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
| Adjusted EBITDAre (2)(6) |
|
$ |
344 |
|
|
$ |
319 |
|
|
$ |
1,190 |
|
|
$ |
1,135 |
|
| ___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Notes to Financial Information for discussion of non-GAAP
measures.
(2) Net Income, EBITDA, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO include a gain
of $1 million for each of the year-to-date periods ended September 30, 2018 and 2017, for the sale of the portion of land
attributable to individual units sold by the Maui timeshare joint venture.
(3) Reflects the sale of the New York Marriott Marquis Retail in the third quarter of 2018 and four hotels in
each of 2018 and 2017.
(4) Effective January 1, 2018, we adopted Accounting Standards Update No. 2017-01, Business Combinations (Topic
805): Clarifying the Definition of a Business. As a result, the Hyatt portfolio acquisition was considered an asset
acquisition and the related $17 million of acquisition costs were capitalized.
(5) Represents our share of earnings and pro rata EBITDAre from our European Joint Venture (“Euro JV”)
in which we hold an approximate one-third non-controlling interest.
(6) Effective December 31, 2017, we present EBITDAre, reported in accordance with NAREIT guidelines, and
Adjusted EBITDAre as supplemental measures of our performance. Prior year results have been updated to conform with the
current year presentation. Under the new presentation, all of the EBITDA of consolidated partnerships is included, including the
non-controlling partners' share, which has increased the previously reported third quarter and year-to-date 2017 Adjusted EBITDA by
$2 million and $7 million, respectively. See the Notes to Financial Information for more information on this change.
HOST HOTELS & RESORTS, INC.
Reconciliation of Net Income to NAREIT and
Adjusted Funds From Operations per Diluted Share (1)
(unaudited, in millions, except per share amounts)
| |
|
Quarter ended
September 30, |
|
|
Year-to-date ended
September 30, |
|
| |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Net income (2) |
|
$ |
378 |
|
|
$ |
105 |
|
|
$ |
845 |
|
|
$ |
478 |
|
| Less: Net income attributable to non-controlling interests |
|
|
(56 |
) |
|
|
(1 |
) |
|
|
(61 |
) |
|
|
(6 |
) |
| Net income attributable to Host Inc. |
|
|
322 |
|
|
|
104 |
|
|
|
784 |
|
|
|
472 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gain on dispositions (3) |
|
|
(546 |
) |
|
|
(58 |
) |
|
|
(665 |
) |
|
|
(101 |
) |
| Tax on dispositions |
|
|
29 |
|
|
|
22 |
|
|
|
29 |
|
|
|
22 |
|
| Gain on property insurance settlement |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
| Depreciation and amortization |
|
|
171 |
|
|
|
175 |
|
|
|
515 |
|
|
|
532 |
|
| Non-cash impairment expense |
|
|
239 |
|
|
|
— |
|
|
|
260 |
|
|
|
— |
|
| Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity in earnings of affiliates |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(25 |
) |
|
|
(19 |
) |
| Pro rata FFO of equity investments |
|
|
12 |
|
|
|
11 |
|
|
|
44 |
|
|
|
39 |
|
| Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| FFO adjustment for non-controlling partnerships |
|
|
53 |
|
|
|
(1 |
) |
|
|
52 |
|
|
|
(2 |
) |
| FFO adjustments for non-controlling interests of Host L.P. |
|
|
1 |
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
| NAREIT FFO (2) |
|
|
275 |
|
|
|
247 |
|
|
|
992 |
|
|
|
936 |
|
| Adjustments to NAREIT FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
| Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
| Adjusted FFO (2) |
|
$ |
275 |
|
|
$ |
247 |
|
|
$ |
992 |
|
|
$ |
938 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For calculation on a per share basis (5): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted weighted average shares outstanding - EPS, NAREIT FFO and
Adjusted FFO |
|
|
740.5 |
|
|
|
739.0 |
|
|
|
740.2 |
|
|
|
738.7 |
|
| NAREIT FFO and Adjusted FFO per diluted share |
|
$ |
.37 |
|
|
$ |
.33 |
|
|
$ |
1.34 |
|
|
$ |
1.27 |
|
| ___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1-4) Refer to the corresponding footnote on the Reconciliation of Net Income to EBITDA, EBITDAre
and Adjusted EBITDAre.
(5) Earnings per diluted share and NAREIT FFO and Adjusted FFO per diluted share are adjusted for the effects of
dilutive securities. Dilutive securities may include shares granted under comprehensive stock plans, preferred OP units held by
non-controlling partners and other non-controlling interests that have the option to convert their limited partnership interests to
common OP units. No effect is shown for securities if they are anti-dilutive.
HOST HOTELS & RESORTS, INC.
Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre
and
NAREIT and Adjusted Funds From Operations per Diluted Share for 2018 Forecasts (1)
(unaudited, in millions, except per share amounts)
| |
Full Year 2018 |
|
| |
Low-end
of range |
|
|
High-end
of range |
|
| Net income |
$ |
971 |
|
|
$ |
981 |
|
| Interest expense |
|
179 |
|
|
|
179 |
|
| Depreciation and amortization |
|
688 |
|
|
|
688 |
|
| Income taxes |
|
66 |
|
|
|
66 |
|
| EBITDA |
|
1,904 |
|
|
|
1,914 |
|
| Gain on dispositions |
|
(665 |
) |
|
|
(665 |
) |
| Non-cash impairment loss |
|
260 |
|
|
|
260 |
|
| Equity investment adjustments: |
|
|
|
|
|
|
|
| Equity in earnings of Euro JV |
|
(13 |
) |
|
|
(13 |
) |
| Equity in earnings of affiliates other than Euro JV |
|
(14 |
) |
|
|
(14 |
) |
| Pro rata EBITDAre of Euro JV |
|
45 |
|
|
|
45 |
|
| Pro rata EBITDAre of equity investments other than Euro
JV |
|
28 |
|
|
|
28 |
|
| EBITDAre |
|
1,545 |
|
|
|
1,555 |
|
| Adjusted EBITDAre |
$ |
1,545 |
|
|
$ |
1,555 |
|
| |
|
|
|
|
|
|
|
| |
Full Year 2018 |
|
| |
Low-end
of range |
|
|
High-end
of range |
|
| Net income |
$ |
971 |
|
|
$ |
981 |
|
| Less: Net income attributable to non-controlling interests |
|
(63 |
) |
|
|
(63 |
) |
| Net income attributable to Host Inc. |
|
908 |
|
|
|
918 |
|
| Adjustments: |
|
|
|
|
|
|
|
| Gain on dispositions |
|
(665 |
) |
|
|
(665 |
) |
| Tax on dispositions |
|
29 |
|
|
|
29 |
|
| Depreciation and amortization |
|
684 |
|
|
|
684 |
|
| Non-cash impairment loss |
|
260 |
|
|
|
260 |
|
| Equity investment adjustments: |
|
|
|
|
|
|
|
| Equity in earnings of affiliates |
|
(27 |
) |
|
|
(27 |
) |
| Pro rata FFO of equity investments |
|
53 |
|
|
|
53 |
|
| Consolidated partnership adjustments: |
|
|
|
|
|
|
|
| FFO adjustment for non-controlling partnerships |
|
52 |
|
|
|
52 |
|
| FFO adjustment for non-controlling interests of Host LP |
|
(4 |
) |
|
|
(4 |
) |
| NAREIT FFO |
|
1,290 |
|
|
|
1,300 |
|
| Adjusted FFO |
$ |
1,290 |
|
|
$ |
1,300 |
|
| |
|
|
|
|
|
|
|
| Weighted average diluted shares - EPS, NAREIT and Adjusted
FFO |
|
740.3 |
|
|
|
740.3 |
|
| Diluted earnings per common share |
$ |
1.23 |
|
|
$ |
1.24 |
|
| NAREIT FFO per diluted share |
$ |
1.74 |
|
|
$ |
1.76 |
|
| Adjusted FFO per diluted share |
$ |
1.74 |
|
|
$ |
1.76 |
|
| ___________ |
|
|
|
|
|
|
|
(1) The forecasts are based on the below
assumptions:
- Total comparable hotel RevPAR in constant US$ will increase 1.9% to 2.1% 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 increase 50 basis points to 60 basis points for the low and high ends of the forecasted
RevPAR range, respectively.
- We expect to spend approximately $195 million to $220 million on ROI capital expenditures and approximately
$280 million to $300 million on renewal and replacement capital expenditures.
- The above forecast assumes the sale of the Company’s interest in the European joint venture. The transaction is 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 transaction at the price assumed in the forecast.
For a discussion of additional items that may affect forecasted results, see the Notes to Financial
Information.
HOST HOTELS & RESORTS, INC.
Schedule of Comparable Hotel Results
for 2018 Forecasts (1)
(unaudited, in millions, except hotel statistics)
| |
|
|
|
|
|
|
|
|
|
Full Year 2018 |
|
| |
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
High-end of range |
|
| Operating profit margin (2) |
|
|
|
9.3 |
% |
|
|
9.5 |
% |
| Comparable hotel EBITDA margin (3) |
|
|
|
28.7 |
% |
|
|
28.8 |
% |
| |
|
|
|
|
|
|
|
|
|
| Net income |
|
|
$ |
971 |
|
|
$ |
981 |
|
| Depreciation and amortization |
|
|
|
948 |
|
|
|
948 |
|
| Interest expense |
|
|
|
179 |
|
|
|
179 |
|
| Provision for income taxes |
|
|
|
66 |
|
|
|
66 |
|
| Gain on sale of property and corporate level income/expense |
|
|
|
(589 |
) |
|
|
(589 |
) |
| Non-comparable hotel results, net (4) |
|
|
|
(227 |
) |
|
|
(229 |
) |
| Comparable hotel EBITDA |
|
|
$ |
1,348 |
|
|
$ |
1,356 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Low-end of range |
|
| |
|
|
|
|
|
Adjustments |
|
|
|
|
|
| |
|
GAAP
Results |
|
|
Non-comparable hotel
results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel
Results |
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rooms |
|
$ |
3,543 |
|
|
$ |
(466 |
) |
|
$ |
— |
|
|
$ |
3,077 |
|
| Food and beverage |
|
|
1,611 |
|
|
|
(248 |
) |
|
|
— |
|
|
|
1,363 |
|
| Other |
|
|
360 |
|
|
|
(96 |
) |
|
|
— |
|
|
|
264 |
|
| Total revenues |
|
|
5,514 |
|
|
|
(810 |
) |
|
|
— |
|
|
|
4,704 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hotel expenses |
|
|
3,939 |
|
|
|
(583 |
) |
|
|
— |
|
|
|
3,356 |
|
| Depreciation |
|
|
948 |
|
|
|
— |
|
|
|
(948 |
) |
|
|
— |
|
| Corporate and other expenses |
|
|
113 |
|
|
|
— |
|
|
|
(113 |
) |
|
|
— |
|
| Total expenses |
|
|
5,000 |
|
|
|
(583 |
) |
|
|
(1,061 |
) |
|
|
3,356 |
|
| Operating Profit - Comparable Hotel EBITDA |
|
$ |
514 |
|
|
$ |
(227 |
) |
|
$ |
1,061 |
|
|
$ |
1,348 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
High-end of range |
|
| |
|
|
|
|
|
Adjustments |
|
|
|
|
|
| |
|
GAAP
Results |
|
|
Non-comparable hotel
results, net(4) |
|
|
Depreciation and corporate level items |
|
|
Comparable Hotel
Results |
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rooms |
|
$ |
3,550 |
|
|
$ |
(467 |
) |
|
$ |
— |
|
|
$ |
3,083 |
|
| Food and beverage |
|
|
1,615 |
|
|
|
(249 |
) |
|
|
— |
|
|
|
1,366 |
|
| Other |
|
|
360 |
|
|
|
(96 |
) |
|
|
— |
|
|
|
264 |
|
| Total revenues |
|
|
5,525 |
|
|
|
(812 |
) |
|
|
— |
|
|
|
4,713 |
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hotel expenses |
|
|
3,940 |
|
|
|
(583 |
) |
|
|
— |
|
|
|
3,357 |
|
| Depreciation and amortization |
|
|
948 |
|
|
|
— |
|
|
|
(948 |
) |
|
|
— |
|
| Corporate and other expenses |
|
|
113 |
|
|
|
— |
|
|
|
(113 |
) |
|
|
— |
|
| Total expenses |
|
|
5,001 |
|
|
|
(583 |
) |
|
|
(1,061 |
) |
|
|
3,357 |
|
| Operating Profit - Comparable Hotel EBITDA |
|
$ |
524 |
|
|
$ |
(229 |
) |
|
$ |
1,061 |
|
|
$ |
1,356 |
|
| ___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOST HOTELS & RESORTS, INC.
Schedule of Comparable Hotel Results
for 2018 Forecasts (1) (cont.)
(unaudited, in millions, except hotel statistics)
(1) Forecast comparable hotel results include 85 hotels (of our 93 hotels owned at
September 30, 2018) that we have assumed will be classified as comparable as of December 31, 2018. See “Comparable Hotel
Operating Statistics” in the Notes to Financial Information. No assurances can be made as to the hotels that will be in the
comparable hotel set for 2018. Also, see the notes to the “Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted
EBITDAre and NAREIT and Adjusted Funds From Operations per Diluted Share for 2018 Forecasts” for other forecast
assumptions and further discussion of transactions affecting our comparable hotel
set.
(2) Operating profit margin under GAAP is calculated as the operating profit divided by the forecast total revenues per
the condensed consolidated statements of operations.
(3) Comparable hotel EBITDA margin is calculated as the comparable hotel EBITDA divided by the comparable hotel sales
per the tables above.
(4) Non-comparable hotel results, net, includes the following items: (i) the results of operations of our
non-comparable hotels and sold hotels, which operations are included in our condensed consolidated statements of operations as
continuing operations, (ii) gains on insurance settlements and business interruption proceeds, and (iii) the results of
our office spaces other non-hotel income. The following hotels are considered non-comparable for full-year forecast:
Acquisitions:
- The Don CeSar and Beach House Suites complex (acquired in February 2017)
- W Hollywood (acquired in March 2017)
- 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)
Renovations:
- The Phoenician (business disruption beginning in the second quarter of 2016)
- 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)
Dispositions or properties under contract (includes forecast or actual results from January 1, 2018
through the anticipated or actual sale date):
- Key Bridge Marriott (sold January 9, 2018)
- W New York (sold May 9, 2018)
- W New York – Union Square (sold September 6, 2018)
- JW Marriott Hotel Mexico City (sold September 27, 2018)
HOST HOTELS & RESORTS, INC.
Notes to Financial Information
Forecasts
Our forecast of earnings per diluted share, NAREIT and Adjusted FFO per diluted share, EBITDA,
EBITDAre, Adjusted EBITDAre and comparable hotel results are forward-looking statements and are not guarantees of
future performance and involve known and unknown risks, uncertainties and other factors which may cause actual results and
performance to differ materially from those expressed or implied by these forecasts. Although we believe the expectations reflected
in the forecasts are based upon reasonable assumptions, we can give no assurance that the expectations will be attained or that the
results will not be materially different. Risks that may affect these assumptions and forecasts include the following: potential
changes in overall economic outlook make it inherently difficult to forecast the level of RevPAR and margin growth; the amount and
timing of acquisitions and dispositions of hotel properties is an estimate that can substantially affect financial results,
including such items as net income, depreciation and gains on dispositions; the level of capital expenditures may change
significantly, which will directly affect the level of depreciation expense and net income; the amount and timing of debt payments
may change significantly based on market conditions, which will directly affect the level of interest expense and net income; the
amount and timing of transactions involving shares of our common stock may change based on market conditions; and other risks and
uncertainties associated with our business described herein and in our annual report on Form 10-K, quarterly reports on Form 10-Q
and current reports on Form 8-K filed with the SEC.
Comparable Hotel Operating Statistics
To facilitate a quarter-to-quarter comparison of our operations, we present certain operating statistics (i.e.,
RevPAR, average daily rate and average occupancy) and operating results (revenues, expenses, hotel EBITDA and associated margins)
for the periods included in this report on a comparable hotel basis.
Because these statistics and operating results relate only to our hotel properties, they exclude results for our
non-hotel properties and other real estate investments. We define our comparable hotels as properties:
(i) that are owned or leased by us and the operations of which are included in our consolidated results for
the entirety of the reporting periods being compared; and
(ii) that have not sustained substantial property damage or business interruption, or undergone large-scale
capital projects (as further defined below) during the reporting periods being compared.
The hotel business is capital-intensive and renovations are a regular part of the business. Generally, hotels
under renovation remain comparable hotels. A large scale capital project that would cause a hotel to be excluded from our
comparable hotel set is an extensive renovation of several core aspects of the hotel, such as rooms, meeting space, lobby, bars,
restaurants and other public spaces. Both quantitative and qualitative factors are taken into consideration in determining if the
renovation would cause a hotel to be removed from the comparable hotel set, including unusual or exceptional circumstances such as:
a reduction or increase in room count, rebranding, a significant alteration of the business operations, or the closing of the hotel
during the renovation.
We do not include an acquired hotel in our comparable hotel set until the operating results for that hotel have
been included in our consolidated results for one full calendar year. For example, we acquired The Don CeSar in February 2017. The
hotel will not be included in our comparable hotels until January 1, 2019. Hotels that we sell are excluded from the
comparable hotel set once the transaction has closed. Similarly, hotels are excluded from our comparable hotel set from the date
that they sustain substantial property damage or business interruption or commence a large-scale capital project. In each case,
these hotels are returned to the comparable hotel set when the operations of the hotel have been included in our consolidated
results for one full calendar year after completion of the repair of the property damage or cessation of the business interruption,
or the completion of large-scale capital projects, as applicable.
Of the 93 hotels that we owned on September 30, 2018, 85 have been classified as comparable hotels.
The operating results of the following hotels that we owned as of September 30, 2018 are excluded from comparable hotel
results for these periods:
- The Phoenician (acquired in June 2015 and, beginning in the second quarter of 2016, business disruption due to extensive
renovations, including all guestrooms and suites, a redesign of the lobby and public areas, renovation of pools, recreation areas
and a restaurant and a re-configured spa and fitness center);
- The Don CeSar and Beach House Suites complex (acquired in February 2017);
- W Hollywood (acquired in March 2017);
- 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);
- The Ritz-Carlton, Naples, removed in the second quarter of 2018 (business interruption due to extensive renovations including
restoration of the façade that requires 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 interruption due to renovations of guestrooms,
ballrooms, meeting space, and extensive renovations of the main lobby).
The operating results of eight hotels disposed of in 2018 and 2017 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 five hotels acquired in 2017
and 2018 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, 2017 and based on actual results obtained from the manager for periods prior to our
ownership. For these hotels, since the year-over-year comparison includes periods prior to our ownership, the changes will not
necessarily correspond to changes in our actual results. All owned hotel operating statistics are provided for completeness and to
show the difference between our comparable hotel information (upon which we usually evaluate performance) and all of our hotels,
including non-comparable hotels. Also, while they may not be illustrative of trends (as compared to comparable hotel operating
statistics), changes in all owned hotel statistics will have an effect on our overall revenues.
Constant US$ and Nominal US$
Operating results denominated in foreign currencies are translated using the prevailing exchange rates on the
date of the transaction, or monthly based on the weighted average exchange rate for the period. For comparative purposes, we also
present the RevPAR results for the prior year assuming the results for our foreign operations were translated using the same
exchange rates that were effective for the comparable periods in the current year, thereby eliminating the effect of currency
fluctuation for the year-over-year comparisons. For the full year forecast results, we use the applicable forward currency curve
(as published by Bloomberg L.P.) for each monthly period to estimate forecast foreign operations in U.S. dollars and have restated
the prior year RevPAR results using the same forecast exchange rates to estimate year-over-year growth in RevPAR in constant US$.
We believe this presentation is useful to investors as it shows growth in RevPAR in the local currency of the hotel consistent with
how we would evaluate our domestic portfolio. However, the estimated effect of changes in foreign currency has been reflected in
the actual and forecast results of net income, EBITDA, Adjusted EBITDAre, earnings per diluted share and Adjusted FFO per
diluted share. Nominal US$ results include the effect of currency fluctuations, consistent with our financial statement
presentation.
Non-GAAP Financial Measures
Included in this press release are certain “non-GAAP financial measures,” which are measures of our historical
or future financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC
rules. They are as follows: (i) FFO and FFO per diluted share (both NAREIT and Adjusted), (ii) EBITDA,
(iii) EBITDAre and Adjusted EBITDAre and (iv) Comparable Hotel Property Level Operating Results. The
following discussion defines these measures and presents why we believe they are useful supplemental measures of our
performance.
NAREIT FFO and NAREIT FFO per Diluted Share
We present NAREIT FFO and NAREIT FFO per diluted share as non-GAAP measures of our performance in addition to
our earnings per share (calculated in accordance with GAAP). We calculate NAREIT FFO per diluted share as our NAREIT FFO (defined
as set forth below) for a given operating period, as adjusted for the effect of dilutive securities, divided by the number of fully
diluted shares outstanding during such period, in accordance with NAREIT guidelines. NAREIT defines FFO as net income (calculated
in accordance with GAAP) excluding gains and losses from sales of real estate, the cumulative effect of changes in accounting
principles, real estate-related depreciation, amortization and impairments and adjustments for unconsolidated partnerships and
joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect our pro rata share of the
FFO of those entities on the same basis.
We believe that NAREIT FFO per diluted share is a useful supplemental measure of our operating performance and
that the presentation of NAREIT FFO per diluted share, when combined with the primary GAAP presentation of earnings per share,
provides beneficial information to investors. By excluding the effect of real estate depreciation, amortization, impairments and
gains and losses from sales of depreciable real estate, all of which are based on historical cost accounting and which may be of
lesser significance in evaluating current performance, we believe that such measures can facilitate comparisons of operating
performance between periods and with other REITs, even though NAREIT FFO per diluted share does not represent an amount that
accrues directly to holders of our common stock. Historical cost accounting for real estate assets implicitly assumes that the
value of real estate assets diminishes predictably over time. As noted by NAREIT in its April 2002 “White Paper on Funds From
Operations,” since real estate values have historically risen or fallen with market conditions, many industry investors have
considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by
themselves. For these reasons, NAREIT adopted the FFO metric in order to promote an industry-wide measure of REIT operating
performance.
Adjusted FFO per Diluted Share
We also present Adjusted FFO per diluted share when evaluating our performance because management believes that
the exclusion of certain additional items described below provides useful supplemental information to investors regarding our
ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance, in
our annual budget process and for our compensation programs. We believe that the presentation of Adjusted FFO per diluted share,
when combined with both the primary GAAP presentation of earnings per share and FFO per diluted share as defined by NAREIT,
provides useful supplemental information that is beneficial to an investor’s understanding of our operating performance. We adjust
NAREIT FFO per diluted share for the following items, which may occur in any period, and refer to this measure as Adjusted FFO per
diluted share:
- Gains and Losses on the Extinguishment of Debt – We exclude the effect of finance charges and premiums associated with the
extinguishment of debt, including the acceleration of the write-off of deferred financing costs associated with the original
issuance of the debt being redeemed or retired and incremental interest expense incurred during the refinancing period. We also
exclude the gains on debt repurchases and the original issuance costs associated with the retirement of preferred stock. We
believe that these items are not reflective of our ongoing finance costs.
- Acquisition Costs – Under GAAP, costs associated with completed property acquisitions 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. Additionally, similar corporate income tax rate reductions affected our European Joint Venture,
causing the remeasurement of the net deferred tax assets and liabilities in France and Belgium, resulting in a net tax benefit to
us of $5 million. We do not consider these adjustments to be reflective of our on-going operating performance and therefore
excluded these items 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
who are not REITs and other capital-intensive companies. Management uses EBITDA to evaluate property-level results and as one
measure in determining the value of acquisitions and dispositions and, like FFO and Adjusted FFO per diluted share, is widely used
by management in the annual budget process and for our compensation programs.
EBITDAre and Adjusted EBITDAre
We present EBITDAre in accordance with NAREIT guidelines, as defined in its September 2017 white paper
“Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate,” to provide an additional performance measure to
facilitate the evaluation and comparison of the Company’s results with other REITs. NAREIT defines EBITDAre as net income
(calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on
disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated
property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate,
and adjustments to reflect the entity’s pro rata share of EBITDAre of unconsolidated affiliates.
We make additional adjustments to EBITDAre when evaluating our performance because we believe that the
exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing
operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP
presentation of net income, is beneficial to an investor’s understanding of our operating performance. Adjusted EBITDAre
also is similar to the measure used to calculate certain credit ratios for our credit facility and senior notes. We adjust
EBITDAre for the following items, which may occur in any period, and refer to this measure as Adjusted
EBITDAre:
- Property Insurance Gains – We exclude the effect of property insurance gains reflected in our consolidated statements of
operations because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing
performance of our assets. In addition, property insurance gains could be less important to investors given that the depreciated
asset book value written off in connection with the calculation of the property insurance gain often does not reflect the market
value of real estate assets.
- 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.
In the past, we presented Adjusted EBITDA as a supplemental measure of our performance. That metric is
calculated in a similar manner as Adjusted EBITDAre presented here, with the exception of the adjustment for
non-controlling partners’ pro rata share of Adjusted EBITDA, which totaled $2 million and $7 million for the third quarter and
year-to-date of 2017, respectively. The rationale for including 100% of EBITDAre for consolidated affiliates with
non-controlling interests is that the full amount of any debt of these affiliates is reported in our consolidated balance sheet and
therefore metrics using total debt to EBITDAre provide a better understanding of the Company’s leverage. This is also
consistent with NAREIT’s definition of EBITDAre.
Limitations on the Use of NAREIT FFO per Diluted Share, Adjusted FFO per Diluted Share, EBITDA, EBITDAre and
Adjusted EBITDAre
We calculate NAREIT FFO per diluted share in accordance with standards established by NAREIT, which may not be
comparable to measures calculated by other companies who do not use the NAREIT definition of FFO or do not calculate FFO per
diluted share in accordance with NAREIT guidance. In addition, although FFO per diluted share is a useful measure when comparing
our results to other REITs, it may not be helpful to investors when comparing us to non-REITs. We also calculate Adjusted FFO per
diluted share, which is not in accordance with NAREIT guidance and may not be comparable to measures calculated by other REITs.
EBITDA, EBITDAre and Adjusted EBITDAre, as presented, may also not be comparable to measures calculated by other
companies. This information should not be considered as an alternative to net income, operating profit, cash from operations or any
other operating performance measure calculated in accordance with GAAP. Cash expenditures for various long-term assets (such as
renewal and replacement capital expenditures), interest expense (for EBITDA, EBITDAre and Adjusted EBITDAre
purposes only) and other items have been and will be made and are not reflected in the EBITDA, EBITDAre, Adjusted
EBITDAre, NAREIT FFO per diluted share and Adjusted FFO per diluted share presentations. Management compensates for these
limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or
assessments of our operating performance. Our consolidated statement of operations and cash flows include interest expense, capital
expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the
usefulness of our non-GAAP financial measures. Additionally, NAREIT FFO per diluted share, Adjusted FFO per diluted share, EBITDA,
EBITDAre and Adjusted EBITDAre should not be considered as a measure of our liquidity or indicative of funds
available to fund our cash needs, including our ability to make cash distributions. In addition, NAREIT FFO per diluted share and
Adjusted FFO per diluted share do not measure, and should not be used as a measure of, amounts that accrue directly to
stockholders’ benefit.
Similarly, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO per diluted share include
adjustments for the pro rata share of our equity investments and NAREIT FFO and Adjusted FFO per diluted share include adjustments
for the pro rata share of non-controlling partners in consolidated partnerships. Our equity investments consist of interests
ranging from 11% to 67% in seven domestic and international partnerships that own a total of 21 properties and a vacation ownership
development. Due to the voting rights of the outside owners, we do not control and, therefore, do not consolidate these entities.
The non-controlling partners in consolidated partnerships primarily consist of the approximate 1% interest in Host LP held by
outside partners and 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.
As a result of the elimination of corporate-level costs and expenses and depreciation and amortization, the
comparable hotel operating results we present do not represent our total revenues, expenses, operating profit or net income and
should not be used to evaluate our performance as a whole. Management compensates for these limitations by separately considering
the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating
performance. Our consolidated statements of operations include such amounts, all of which should be considered by investors when
evaluating our performance.
We present these hotel operating results on a comparable hotel basis because we believe that doing so provides
investors and management with useful information for evaluating the period-to-period performance of our hotels and facilitates
comparisons with other hotel REITs and hotel owners. In particular, these measures assist management and investors in
distinguishing whether increases or decreases in revenues and/or expenses are due to growth or decline of operations at comparable
hotels (which represent the vast majority of our portfolio) or from other factors, such as the effect of acquisitions or
dispositions. While management believes that presentation of comparable hotel results is a “same store” supplemental measure that
provides useful information in evaluating our ongoing performance, this measure is not used to allocate resources or to assess the
operating performance of each of these hotels, as these decisions are based on data for individual hotels and are not based on
comparable hotel results. For these reasons, we believe that comparable hotel operating results, when combined with the
presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management.
Michael D. Bluhm, Chief Financial Officer
240.744.5110
Bret D.S. McLeod, Senior Vice President
240.744.5216
Gee Lingberg, Vice President
240.744.5275
A PDF accompanying this announcement is available at:
http://resource.globenewswire.com/Resource/Download/8acdcc47-d6b7-45f2-bfb3-d451c78544b7
