Host Hotels & Resorts, Inc. (NYSE: HST) (“Host Hotels” or
the “Company”), the nation’s largest lodging real estate investment
trust (“REIT”), today announced results for the fourth quarter and
the year.
- Highlights
- Comparable hotel RevPAR growth of
2% on a constant dollar basis led to full year results that
exceeded the top end of guidance for net income and Adjusted
EBITDAre;
- Completed more than $1.6 billion in
acquisitions since the beginning of 2018 – including 1 Hotel South
Beach, as well as properties in Hawaii, San Francisco and Florida –
further strengthening the Company’s portfolio of iconic and
irreplaceable assets;
- Reduced international exposure to
approximately 1.5% of revenues with the disposition of the JW
Marriott Hotel Mexico City and the Company’s interest in its
European joint venture; and
- Disposed of over $2.2 billion in non-core assets at attractive
pricing.
- Acquisition of 1 Hotel South Beach Miami
- On February 14, 2019, the Company
acquired the fee simple interest in the 1 Hotel South Beach for
$610 million. This iconic and irreplaceable luxury resort reopened
in 2015 following an extensive $300 million renovation and
reprogramming;
- The 1.1 million square foot,
429-key, LEED-certified resort has a premium location in the
vibrant South Beach area of Miami Beach and over 600 linear feet of
direct beach access. The resort is the centerpiece of a mixed-use
complex that features an additional 155 luxury condominium
units; all owners of these units may participate in a rental
program through the resort;
- Features 160,000 square feet of
dynamic and flexible meeting space, eight food and beverage
outlets, spa, gym, four elevated pools with ocean views and 23,000
square feet of luxury retail space; and
- Rated in the top-10 U.S. hotels by Conde Nast Traveler and
recently rated the #1 hotel in Miami Beach by TripAdvisor.
James F. Risoleo, President and Chief Executive
Officer, said, “2018 was a year of significant achievement for Host
Hotels as we successfully executed on our long-term strategic
vision. We delivered results at the high end of our guidance and
achieved meaningful margin growth throughout the year. On the
transaction front, we divested our interest in our European joint
venture as we continued to sharpen our focus on the U.S. At the
beginning of 2019, we sold The Westin New York Grand Central, and
just last week we acquired the iconic 1 Hotel South Beach. Our
capital reallocation strategy significantly advanced our ongoing
efforts to further strengthen our irreplaceable portfolio while
reducing our exposure in New York and international markets.”
Mr. Risoleo continued, “Our goal is to drive
stockholder value by combining our operational expertise and
exceptional portfolio with disciplined and opportunistic
investments. This strategy, together with our investment-grade
balance sheet and commitment to returning capital to stockholders,
positions Host Hotels to be the lodging REIT of choice for
investors. We look forward to providing continued growth and value
creation for Host Hotel stockholders in 2019 and beyond.”
Operating Results(unaudited, in
millions, except per share and hotel statistics)
|
Quarter endedDecember 31, |
|
Percent |
|
Year endedDecember 31, |
|
Percent |
|
2018 |
|
2017 |
|
Change |
|
2018 |
|
2017 |
|
Change |
Total revenues |
$1,361 |
|
$1,344 |
|
1.3% |
|
$5,524 |
|
$5,387 |
|
2.5% |
Comparable hotel revenues (1) |
1,174 |
|
1,152 |
|
1.9% |
|
4,714 |
|
4,603 |
|
2.4% |
Net income |
306 |
|
93 |
|
229.0% |
|
1,151 |
|
571 |
|
101.6% |
EBITDAre (1) |
372 |
|
375 |
|
(0.8)% |
|
1,562 |
|
1,510 |
|
3.4% |
Adjusted EBITDAre (1) |
372 |
|
375 |
|
(0.8)% |
|
1,562 |
|
1,510 |
|
3.4% |
Change in comparable hotel RevPAR: |
|
|
|
|
|
|
|
|
|
|
|
Domestic properties |
2.3% |
|
|
|
|
|
1.8% |
|
|
|
|
International properties - Constant US$ |
3.2% |
|
|
|
|
|
11.2% |
|
|
|
|
Total - Constant US$ |
2.3% |
|
|
|
|
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
0.41 |
|
0.12 |
|
241.7% |
|
1.47 |
|
0.76 |
|
93.4% |
NAREIT FFO per diluted share (1) |
0.43 |
|
0.41 |
|
4.9% |
|
1.77 |
|
1.68 |
|
5.4% |
Adjusted FFO per diluted share (1) |
0.43 |
|
0.42 |
|
2.4% |
|
1.77 |
|
1.69 |
|
4.7% |
Additional detail on the Company’s results,
including data for 22 domestic markets and top 40 hotels by RevPAR,
is available in the Year End 2018 Supplemental Financial
Information available on the Company’s website at
www.hosthotels.com.
Operating Performance
GAAP Metrics
- The improvements in total revenues
of 1.3% for the quarter and 2.5% for the full year were
driven by increases in both room and food and beverage
revenues.
- GAAP operating profit margin
increased 380 basis points for the quarter, reflecting
productivity improvements and impairment expense recorded in the
fourth quarter of 2017. For the full year, operating profit margin
declined 290 basis points due to impairment expense related to
four hotels recorded earlier in 2018.
- Net income increased by
$213 million to $306 million for the quarter and by
$580 million to $1,151 million for the full year,
primarily due to the increase in gain on sale of assets, partially
offset by impairment expense.
- Diluted earnings per common share increased 241.7% and 93.4%
for the quarter and the full year, respectively.
Other Metrics
- Comparable RevPAR, on a constant
dollar basis, improved 2.3% for the quarter, driven by a 2.0%
increase in average room rate and a 20 basis point increase in
occupancy. For the full year, comparable RevPAR on a constant
dollar basis improved 2.0%, driven by a 1.2% increase in average
room rate and a 60 basis point increase in occupancy.
- Comparable hotel revenues increased 1.9% for the quarter and
2.4% for the full year.
- Comparable hotel EBITDA increased
by $12 million, or3.7%, for the quarter and by
$60 million, or 4.6%, for the full year.
- Comparable hotel EBITDA margins improved 45 basis points for
the quarter and 60 basis points for the full year.
- Adjusted EBITDAre decreased by $3 million, or 0.8%, for
the quarter and increased by $52 million, or 3.4%, for the
full year.
- Adjusted FFO per diluted share increased 2.4% for the quarter
and 4.7% for the full year.
________________________
(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. |
|
|
|
|
Dispositions
During the fourth quarter, the Company completed
the sale of its approximate 33% interest in its European joint
venture to its partners for net proceeds of approximately €435
million ($496 million). The net proceeds reflect a gross asset
value for Host’s 33% share of the hotels of €700 million ($800
million), net of its share of the joint venture’s debt.
On January 9, 2019, the Company sold The Westin
New York Grand Central for $302 million, including approximately
$20 million of FF&E funds.
As noted above, the Company completed over $2.2
billion in asset sales since the beginning of 2018, which include
the disposition of value-enhancement projects such as the retail
space at the New York Marriott Marquis in the third quarter for
$442 million and the sale of the Key Bridge Marriott as a mixed-use
redevelopment project for $190 million in January 2018.
Capital Allocation
During the fourth quarter, the Company spent
approximately $154 million on capital expenditures, of which
$94 million was return on investment (“ROI”) capital
expenditures and $60 million was on renewal and replacement
projects. For the full year, the Company spent $474 million on
capital expenditures, of which $200 million was ROI capital
expenditures and $274 million was on renewal and replacement
projects.
For 2019, the Company expects capital
expenditures of between $550 million and $625 million. This
comprises $315 million to $350 million in ROI projects
and between $235 million and $275 million in renewal and
replacement projects. This includes approximately $225 million in
brand reinvestment capital projects that are part of the previously
announced agreement with Marriott International to complete 17
transformational projects over a four-year period. These portfolio
investments are designed to better position the assets to compete
in their respective markets and enhance long-term performance. The
Company expects to spend an average of $175 million per year over
the four-year period. In exchange, Marriott has provided additional
priority returns on the agreed upon investments and operating
profit guarantees, including an estimated $23 million in 2019, to
offset expected business disruption.
Dividends
The Company paid a quarterly cash dividend of
$0.25 per share on its common stock on January 15, 2019 to
stockholders of record as of December 31, 2018, which included
a $0.05 special dividend. On February 19, 2019, the Board of
Directors authorized a regular quarterly cash dividend of $0.20 on
its common stock. The dividend will be paid on April 15, 2019 to
stockholders of record on March 29, 2019. All future dividends,
including any special dividends, are subject to approval by the
Company’s Board of Directors.
Balance Sheet
Michael D. Bluhm, Chief Financial Officer, said,
“We enter 2019 in the strongest financial position in our company’s
history, as we have significantly strengthened Host Hotel’s
investment grade balance sheet and enhanced our liquidity position
through active portfolio management. Our financial flexibility
positions us to capitalize on significant opportunities to enhance
our irreplaceable hotel portfolio, invest in our assets, return
capital to stockholders and drive value creation.”
At December 31, 2018, the Company had
approximately $1,542 million of unrestricted cash, not
including $213 million in the FF&E escrow reserves, and
$945 million of available capacity under the revolver portion of
its credit facility. Total debt as of December 31, 2018, was
$3.8 billion, with an average maturity of 4.2 years and an
average interest rate of 4.4%. The Company has no debt
maturities until 2020. The Company’s cash activity after year end
included the following (in millions):
Cash and cash equivalents at December 31, 2018 |
$ |
1,542 |
|
Proceeds from sale of The Westin New York Grand Central |
|
276 |
|
Cash consideration for the acquisition of 1 Hotel South Beach |
|
(584 |
) |
Cash and cash equivalents adjusted for 2019 property
transactions |
$ |
1,234 |
|
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 in “at the market” offerings.
No shares were issued in 2018. The Company also has
$500 million of capacity available under its current common
share repurchase program. No shares were repurchased in 2018.
2019 Outlook
For 2019, the Company’s forecast for comparable
hotel RevPAR growth is 0% to 2%. The RevPAR guidance reflects an
estimated 45 basis points of disruption impact from the incremental
capital expenditures associated with the Marriott agreement
discussed above. However, the estimated effect to earnings caused
by these expenditures is offset by Marriott’s operating profit
guarantees. The Company expects to receive $23 million of operating
profit guarantees in 2019, of which $10 million is included in
comparable hotel EBITDA, to offset the disruption to operations
caused by the incremental spend on those properties. The Company
anticipates that its 2019 operating results as compared to the
prior year will change in the following range:
|
|
Full Year 2019 Guidance |
Total comparable hotel RevPAR - Constant US$ (1) |
|
0.0% to 2.0% |
Total revenues under GAAP |
|
0.6% to 2.6% |
Operating profit margin under GAAP |
|
440 bps to 530 bps |
Comparable hotel EBITDA margins |
|
(50) bps to 10 bps |
__________
(1) |
|
|
Forecast
comparable hotel results include 84 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:
|
|
Full Year 2019 Guidance |
Net income (in millions) |
|
$587 to $652 |
Adjusted EBITDAre (in millions) |
|
$1,515 to $1,580 |
Diluted earnings per common share |
|
$.78 to $.87 |
NAREIT FFO per diluted share |
|
$1.72 to $1.81 |
Adjusted FFO per diluted share |
|
$1.72 to $1.81 |
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 88 properties in
the United States and five properties internationally totaling
approximately 52,000 rooms. The Company also holds non-controlling
interests in six domestic and one international joint ventures.
Guided by a disciplined approach to capital allocation and
aggressive asset management, the Company partners with premium
brands such as Marriott®, Ritz-Carlton®, Westin®, Sheraton®, W®,
St. Regis®, The Luxury Collection®, Hyatt®, Fairmont®, Hilton®,
Swissôtel®, ibis® and Novotel®, as well as independent brands in
the operation of properties in over 50 major markets. For
additional information, please visit the Company’s website at
www.hosthotels.com.
Note: This press release contains
forward-looking statements within the meaning of federal securities
regulations. These forward-looking statements include forecast
results and are identified by their use of terms and phrases such
as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “should,” “plan,” “predict,” “project,” “will,”
“continue” and other similar terms and phrases, including
references to assumptions and forecasts of future results.
Forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other
factors which may cause the actual results to differ materially
from those anticipated at the time the forward-looking statements
are made. These risks include, but are not limited to: changes in
national and local economic and business conditions and other
factors such as natural disasters, pandemics and weather that will
affect occupancy rates at our hotels and the demand for hotel
products and services; the impact of geopolitical developments
outside the U.S. on lodging demand; volatility in global financial
and credit markets; operating risks associated with the hotel
business; risks and limitations in our operating flexibility
associated with the level of our indebtedness and our ability to
meet covenants in our debt agreements; risks associated with our
relationships with property managers and joint venture partners;
our ability to maintain our properties in a first-class manner,
including meeting capital expenditure requirements; the effects of
hotel renovations on our hotel occupancy and financial results; our
ability to compete effectively in areas such as access, location,
quality of accommodations and room rate structures; risks
associated with our ability to complete acquisitions and
dispositions and develop new properties and the risks that
acquisitions and new developments may not perform in accordance
with our expectations; our ability to continue to satisfy complex
rules in order for us to remain a REIT for federal income tax
purposes; risks associated with our ability to effectuate our
dividend policy, including factors such as operating results and
the economic outlook influencing our board’s decision whether to
pay further dividends at levels previously disclosed or to use
available cash to make special dividends; and other risks and
uncertainties associated with our business described in the
Company’s annual report on Form 10-K, quarterly reports on Form
10-Q and current reports on Form 8-K filed with the SEC. Although
the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that the expectations will be attained or
that any deviation will not be material. All information in this
release is as of February 19, 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 December 31, 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)
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
Property and equipment,
net |
|
$ |
9,760 |
|
|
$ |
9,692 |
|
Assets held for sale |
|
|
281 |
|
|
|
250 |
|
Due from managers |
|
|
71 |
|
|
|
79 |
|
Advances to and investments
in affiliates |
|
|
48 |
|
|
|
327 |
|
Furniture, fixtures and
equipment replacement fund |
|
|
213 |
|
|
|
195 |
|
Other |
|
|
175 |
|
|
|
237 |
|
Cash and cash
equivalents |
|
|
1,542 |
|
|
|
913 |
|
Total
assets |
|
$ |
12,090 |
|
|
$ |
11,693 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES, NON-CONTROLLING INTERESTS AND
EQUITY |
|
Debt (1) |
|
|
|
|
|
|
|
|
Senior
notes |
|
$ |
2,782 |
|
|
$ |
2,778 |
|
Credit
facility, including the term loans of $998 and $996,
respectively |
|
|
1,049 |
|
|
|
1,170 |
|
Other
debt |
|
|
6 |
|
|
|
6 |
|
Total
debt |
|
|
3,837 |
|
|
|
3,954 |
|
Accounts payable and accrued
expenses |
|
|
293 |
|
|
|
283 |
|
Other |
|
|
266 |
|
|
|
287 |
|
Total
liabilities |
|
|
4,396 |
|
|
|
4,524 |
|
|
|
|
|
|
|
|
|
|
Redeemable non-controlling
interests - Host Hotels & Resorts, L.P. |
|
|
128 |
|
|
|
167 |
|
|
|
|
|
|
|
|
|
|
Host Hotels & Resorts,
Inc. stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock,
par value $.01, 1,050 million shares authorized, 740.4
million shares and 739.1 million shares issued and
outstanding, respectively |
|
|
7 |
|
|
|
7 |
|
Additional
paid-in capital |
|
|
8,156 |
|
|
|
8,097 |
|
Accumulated
other comprehensive loss |
|
|
(59 |
) |
|
|
(60 |
) |
Deficit |
|
|
(610 |
) |
|
|
(1,071 |
) |
Total equity
of Host Hotels & Resorts, Inc. stockholders |
|
|
7,494 |
|
|
|
6,973 |
|
Non-redeemable
non-controlling interests—other consolidated partnerships |
|
|
72 |
|
|
|
29 |
|
Total
equity |
|
|
7,566 |
|
|
|
7,002 |
|
Total
liabilities, non-controlling interests and equity |
|
$ |
12,090 |
|
|
$ |
11,693 |
|
___________ |
|
|
|
|
|
|
|
|
(1) Please see our Year End 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 endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
856 |
|
|
$ |
847 |
|
|
$ |
3,547 |
|
|
$ |
3,490 |
|
Food and
beverage |
|
|
417 |
|
|
|
409 |
|
|
|
1,616 |
|
|
|
1,561 |
|
Other |
|
|
88 |
|
|
|
88 |
|
|
|
361 |
|
|
|
336 |
|
Total
revenues |
|
|
1,361 |
|
|
|
1,344 |
|
|
|
5,524 |
|
|
|
5,387 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
|
222 |
|
|
|
223 |
|
|
|
918 |
|
|
|
899 |
|
Food and
beverage |
|
|
281 |
|
|
|
277 |
|
|
|
1,103 |
|
|
|
1,071 |
|
Other
departmental and support expenses |
|
|
330 |
|
|
|
321 |
|
|
|
1,302 |
|
|
|
1,273 |
|
Management
fees |
|
|
60 |
|
|
|
61 |
|
|
|
243 |
|
|
|
239 |
|
Other
property-level expenses |
|
|
100 |
|
|
|
100 |
|
|
|
387 |
|
|
|
394 |
|
Depreciation
and amortization (1) |
|
|
165 |
|
|
|
217 |
|
|
|
944 |
|
|
|
751 |
|
Corporate and
other expenses (2) |
|
|
22 |
|
|
|
19 |
|
|
|
104 |
|
|
|
98 |
|
Gain on
insurance and business interruption settlements |
|
|
(7 |
) |
|
|
(8 |
) |
|
|
(7 |
) |
|
|
(14 |
) |
Total
operating costs and expenses |
|
|
1,173 |
|
|
|
1,210 |
|
|
|
4,994 |
|
|
|
4,711 |
|
Operating
profit |
|
|
188 |
|
|
|
134 |
|
|
|
530 |
|
|
|
676 |
|
Interest income |
|
|
7 |
|
|
|
2 |
|
|
|
15 |
|
|
|
6 |
|
Interest expense |
|
|
(42 |
) |
|
|
(42 |
) |
|
|
(176 |
) |
|
|
(167 |
) |
Gain on sale of assets |
|
|
235 |
|
|
|
3 |
|
|
|
902 |
|
|
|
108 |
|
Gain (loss) on foreign
currency transactions and derivatives |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
(2 |
) |
Equity in earnings of
affiliates |
|
|
5 |
|
|
|
11 |
|
|
|
30 |
|
|
|
30 |
|
Income before
income taxes |
|
|
393 |
|
|
|
110 |
|
|
|
1,301 |
|
|
|
651 |
|
Provision for income taxes
(3) |
|
|
(87 |
) |
|
|
(17 |
) |
|
|
(150 |
) |
|
|
(80 |
) |
Net
income |
|
|
306 |
|
|
|
93 |
|
|
|
1,151 |
|
|
|
571 |
|
Less: Net
income attributable to non-controlling interests
(4) |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(64 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
$ |
303 |
|
|
$ |
92 |
|
|
$ |
1,087 |
|
|
$ |
564 |
|
Basic and diluted
earnings per common share |
|
$ |
.41 |
|
|
$ |
.12 |
|
|
$ |
1.47 |
|
|
$ |
.76 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
Depreciation and amortization expense includes impairment expense
of $260 million for the year ended December 31, 2018 and $43
million for the fourth quarter and year ended December 31,
2017. |
|
|
|
|
(2) |
|
|
Corporate and other
expenses include the following items: |
|
|
Quarter endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
General and administrative costs |
|
$ |
19 |
|
|
$ |
16 |
|
|
$ |
90 |
|
|
$ |
87 |
|
Non-cash stock-based compensation expense |
|
|
3 |
|
|
|
3 |
|
|
|
14 |
|
|
|
11 |
|
Total |
|
$ |
22 |
|
|
$ |
19 |
|
|
$ |
104 |
|
|
$ |
98 |
|
(3) |
|
|
Provision for income taxes includes $113 million and $18 million in
2018 and 2017, respectively, related to the gain on sale of certain
domestic and foreign properties and investments. We have elected to
pay approximately $77 million of U.S. federal and state corporate
income tax on the long-term capital gain generated in 2018, rather
than distributing the gain to our stockholders. |
|
|
|
|
(4) |
|
|
Net
income attributable to non-controlling interests for the full year
2018 includes $56 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 endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income |
|
$ |
306 |
|
|
$ |
93 |
|
|
$ |
1,151 |
|
|
$ |
571 |
|
Less: Net income attributable to non-controlling
interests |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(64 |
) |
|
|
(7 |
) |
Net income attributable to
Host Inc. |
|
$ |
303 |
|
|
$ |
92 |
|
|
$ |
1,087 |
|
|
$ |
564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
|
740.3 |
|
|
|
739.0 |
|
|
|
739.8 |
|
|
|
738.6 |
|
Assuming distribution of common shares granted
under the comprehensive stock plans, less shares
assumed purchased at market |
|
|
.7 |
|
|
|
.6 |
|
|
|
.8 |
|
|
|
.5 |
|
Diluted weighted average
shares outstanding (1) |
|
|
741.0 |
|
|
|
739.6 |
|
|
|
740.6 |
|
|
|
739.1 |
|
Basic and diluted earnings
per common share |
|
$ |
.41 |
|
|
$ |
.12 |
|
|
$ |
1.47 |
|
|
$ |
.76 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
Dilutive securities may
include shares granted under comprehensive stock plans, preferred
operating partnership units (“OP Units”) held by minority partners
and other non-controlling interests that have the option to convert
their limited partnership interests to common OP Units. No effect
is shown for any securities that were anti-dilutive for the
period. |
|
|
|
|
HOST HOTELS & RESORTS,
INC.Hotel Operating Data for Consolidated Hotels
(1)
Comparable Hotels by Location in
Constant US$
|
|
As of December 31,2018 |
|
|
Quarter ended December 31,
2018 |
|
|
Quarter ended December 31,
2017 |
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
363.85 |
|
|
|
88.4 |
% |
|
$ |
321.64 |
|
|
$ |
344.36 |
|
|
|
90.1 |
% |
|
$ |
310.20 |
|
|
|
3.7 |
% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
330.10 |
|
|
|
62.4 |
|
|
|
205.92 |
|
|
|
314.15 |
|
|
|
62.4 |
|
|
|
196.04 |
|
|
|
5.0 |
|
New York |
|
|
4 |
|
|
|
5,033 |
|
|
|
338.15 |
|
|
|
91.1 |
|
|
|
308.01 |
|
|
|
332.55 |
|
|
|
91.2 |
|
|
|
303.37 |
|
|
|
1.5 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
214.74 |
|
|
|
77.4 |
|
|
|
166.24 |
|
|
|
200.33 |
|
|
|
74.4 |
|
|
|
148.98 |
|
|
|
11.6 |
|
Washington, D.C. (CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
237.51 |
|
|
|
76.3 |
|
|
|
181.14 |
|
|
|
248.18 |
|
|
|
75.5 |
|
|
|
187.29 |
|
|
|
(3.3 |
) |
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
238.68 |
|
|
|
75.4 |
|
|
|
180.08 |
|
|
|
225.47 |
|
|
|
78.5 |
|
|
|
177.02 |
|
|
|
1.7 |
|
San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
222.07 |
|
|
|
78.5 |
|
|
|
174.22 |
|
|
|
207.37 |
|
|
|
75.2 |
|
|
|
155.91 |
|
|
|
11.7 |
|
San Francisco/San Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
225.77 |
|
|
|
78.0 |
|
|
|
176.06 |
|
|
|
220.44 |
|
|
|
76.3 |
|
|
|
168.10 |
|
|
|
4.7 |
|
Los Angeles |
|
|
3 |
|
|
|
1,421 |
|
|
|
200.38 |
|
|
|
86.6 |
|
|
|
173.50 |
|
|
|
206.06 |
|
|
|
86.2 |
|
|
|
177.59 |
|
|
|
(2.3 |
) |
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
217.30 |
|
|
|
81.7 |
|
|
|
177.53 |
|
|
|
207.32 |
|
|
|
82.9 |
|
|
|
171.88 |
|
|
|
3.3 |
|
Florida Gulf Coast |
|
|
2 |
|
|
|
593 |
|
|
|
231.81 |
|
|
|
69.2 |
|
|
|
160.45 |
|
|
|
221.25 |
|
|
|
76.7 |
|
|
|
169.68 |
|
|
|
(5.4 |
) |
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
202.53 |
|
|
|
76.6 |
|
|
|
155.08 |
|
|
|
199.06 |
|
|
|
78.8 |
|
|
|
156.87 |
|
|
|
(1.1 |
) |
Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
208.43 |
|
|
|
71.2 |
|
|
|
148.37 |
|
|
|
201.83 |
|
|
|
73.2 |
|
|
|
147.81 |
|
|
|
0.4 |
|
Orange County |
|
|
4 |
|
|
|
1,429 |
|
|
|
172.15 |
|
|
|
77.9 |
|
|
|
134.11 |
|
|
|
177.00 |
|
|
|
76.1 |
|
|
|
134.71 |
|
|
|
(0.4 |
) |
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
190.46 |
|
|
|
78.7 |
|
|
|
149.84 |
|
|
|
177.68 |
|
|
|
77.0 |
|
|
|
136.85 |
|
|
|
9.5 |
|
Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
186.04 |
|
|
|
73.9 |
|
|
|
137.44 |
|
|
|
204.84 |
|
|
|
73.9 |
|
|
|
151.37 |
|
|
|
(9.2 |
) |
Northern Virginia |
|
|
5 |
|
|
|
1,919 |
|
|
|
183.16 |
|
|
|
72.4 |
|
|
|
132.69 |
|
|
|
181.91 |
|
|
|
72.1 |
|
|
|
131.11 |
|
|
|
1.2 |
|
San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
189.75 |
|
|
|
74.2 |
|
|
|
140.76 |
|
|
|
180.05 |
|
|
|
68.4 |
|
|
|
123.08 |
|
|
|
14.4 |
|
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
184.78 |
|
|
|
61.0 |
|
|
|
112.67 |
|
|
|
183.45 |
|
|
|
65.9 |
|
|
|
120.95 |
|
|
|
(6.8 |
) |
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
163.64 |
|
|
|
79.3 |
|
|
|
129.69 |
|
|
|
150.88 |
|
|
|
65.5 |
|
|
|
98.77 |
|
|
|
31.3 |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
176.54 |
|
|
|
71.0 |
|
|
|
125.33 |
|
|
|
174.34 |
|
|
|
73.1 |
|
|
|
127.40 |
|
|
|
(1.6 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
163.45 |
|
|
|
66.1 |
|
|
|
107.99 |
|
|
|
159.67 |
|
|
|
67.8 |
|
|
|
108.26 |
|
|
|
(0.3 |
) |
Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
163.09 |
|
|
|
69.5 |
|
|
|
113.34 |
|
|
|
159.92 |
|
|
|
69.6 |
|
|
|
111.23 |
|
|
|
1.9 |
|
Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
227.85 |
|
|
|
76.8 |
|
|
|
174.98 |
|
|
|
223.27 |
|
|
|
76.6 |
|
|
|
171.06 |
|
|
|
2.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
150.69 |
|
|
|
65.4 |
|
|
|
98.53 |
|
|
|
151.08 |
|
|
|
63.2 |
|
|
|
95.49 |
|
|
|
3.2 |
|
All Locations - Constant US$ |
|
|
85 |
|
|
|
47,455 |
|
|
|
225.77 |
|
|
|
76.4 |
|
|
|
172.57 |
|
|
|
221.37 |
|
|
|
76.2 |
|
|
|
168.68 |
|
|
|
2.3 |
|
All Owned Hotels in Constant US$ (2)
|
|
As of December 31,2018 |
|
|
Quarter ended December 31,
2018 |
|
|
Quarter ended December 31,
2017 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
85 |
|
|
|
47,455 |
|
|
$ |
225.77 |
|
|
|
76.4 |
% |
|
$ |
172.57 |
|
|
$ |
221.37 |
|
|
|
76.2 |
% |
|
$ |
168.68 |
|
|
|
2.3 |
% |
Non-comparable Hotels (Pro forma) |
|
|
8 |
|
|
|
4,670 |
|
|
|
328.08 |
|
|
|
72.3 |
|
|
|
237.28 |
|
|
|
315.26 |
|
|
|
77.6 |
|
|
|
244.63 |
|
|
|
(3.0 |
) |
All Hotels |
|
|
93 |
|
|
|
52,125 |
|
|
|
234.47 |
|
|
|
76.1 |
|
|
|
178.36 |
|
|
|
229.91 |
|
|
|
76.3 |
|
|
|
175.47 |
|
|
|
1.6 |
|
Comparable Hotels in Nominal US$
|
|
As of December 31,2018 |
|
|
Quarter ended December 31,
2018 |
|
|
Quarter ended December 31,
2017 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
150.69 |
|
|
|
65.4 |
% |
|
$ |
98.53 |
|
|
$ |
162.12 |
|
|
|
63.2 |
% |
|
$ |
102.47 |
|
|
|
(3.9 |
)% |
Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
227.85 |
|
|
|
76.8 |
|
|
|
174.98 |
|
|
|
223.27 |
|
|
|
76.6 |
|
|
|
171.06 |
|
|
|
2.3 |
|
All Locations |
|
|
85 |
|
|
|
47,455 |
|
|
|
225.77 |
|
|
|
76.4 |
|
|
|
172.57 |
|
|
|
221.66 |
|
|
|
76.2 |
|
|
|
168.90 |
|
|
|
2.2 |
|
HOST HOTELS & RESORTS,
INC.Hotel Operating Data for Consolidated Hotels
(1)
Comparable Hotels by Location in Constant
US$
|
|
As of December 31, 2018 |
|
|
Year ended December 31, 2018 |
|
|
Year ended December 31, 2017 |
|
|
|
|
|
Location |
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Maui/Oahu |
|
|
3 |
|
|
|
1,682 |
|
|
$ |
361.68 |
|
|
|
90.3 |
% |
|
$ |
326.71 |
|
|
$ |
340.98 |
|
|
|
90.7 |
% |
|
$ |
309.15 |
|
|
|
5.7 |
% |
Jacksonville |
|
|
1 |
|
|
|
446 |
|
|
|
364.02 |
|
|
|
74.0 |
|
|
|
269.32 |
|
|
|
349.70 |
|
|
|
71.0 |
|
|
|
248.28 |
|
|
|
8.5 |
|
New York |
|
|
4 |
|
|
|
5,033 |
|
|
|
295.09 |
|
|
|
87.7 |
|
|
|
258.87 |
|
|
|
288.79 |
|
|
|
88.8 |
|
|
|
256.52 |
|
|
|
0.9 |
|
Seattle |
|
|
2 |
|
|
|
1,315 |
|
|
|
240.44 |
|
|
|
83.5 |
|
|
|
200.65 |
|
|
|
232.84 |
|
|
|
83.7 |
|
|
|
194.80 |
|
|
|
3.0 |
|
Washington, D.C. (CBD) |
|
|
5 |
|
|
|
3,238 |
|
|
|
245.96 |
|
|
|
80.4 |
|
|
|
197.70 |
|
|
|
257.16 |
|
|
|
82.2 |
|
|
|
211.42 |
|
|
|
(6.5 |
) |
Boston |
|
|
4 |
|
|
|
3,185 |
|
|
|
236.41 |
|
|
|
81.6 |
|
|
|
192.99 |
|
|
|
234.25 |
|
|
|
81.5 |
|
|
|
190.88 |
|
|
|
1.1 |
|
San Diego |
|
|
4 |
|
|
|
4,341 |
|
|
|
231.68 |
|
|
|
82.5 |
|
|
|
191.10 |
|
|
|
227.31 |
|
|
|
82.3 |
|
|
|
187.01 |
|
|
|
2.2 |
|
San Francisco/San Jose |
|
|
5 |
|
|
|
2,353 |
|
|
|
229.16 |
|
|
|
82.6 |
|
|
|
189.38 |
|
|
|
221.03 |
|
|
|
78.8 |
|
|
|
174.22 |
|
|
|
8.7 |
|
Los Angeles |
|
|
3 |
|
|
|
1,421 |
|
|
|
212.89 |
|
|
|
88.8 |
|
|
|
189.01 |
|
|
|
218.15 |
|
|
|
89.0 |
|
|
|
194.24 |
|
|
|
(2.7 |
) |
Philadelphia |
|
|
2 |
|
|
|
810 |
|
|
|
209.57 |
|
|
|
85.0 |
|
|
|
178.20 |
|
|
|
199.69 |
|
|
|
82.4 |
|
|
|
164.54 |
|
|
|
8.3 |
|
Florida Gulf Coast |
|
|
2 |
|
|
|
593 |
|
|
|
245.73 |
|
|
|
71.9 |
|
|
|
176.76 |
|
|
|
233.20 |
|
|
|
74.5 |
|
|
|
173.67 |
|
|
|
1.8 |
|
Chicago |
|
|
6 |
|
|
|
2,392 |
|
|
|
204.10 |
|
|
|
78.9 |
|
|
|
161.11 |
|
|
|
197.52 |
|
|
|
79.4 |
|
|
|
156.83 |
|
|
|
2.7 |
|
Phoenix |
|
|
4 |
|
|
|
1,518 |
|
|
|
211.72 |
|
|
|
74.4 |
|
|
|
157.60 |
|
|
|
206.51 |
|
|
|
73.9 |
|
|
|
152.54 |
|
|
|
3.3 |
|
Orange County |
|
|
4 |
|
|
|
1,429 |
|
|
|
188.11 |
|
|
|
79.6 |
|
|
|
149.79 |
|
|
|
188.85 |
|
|
|
79.2 |
|
|
|
149.51 |
|
|
|
0.2 |
|
New Orleans |
|
|
1 |
|
|
|
1,333 |
|
|
|
181.73 |
|
|
|
80.1 |
|
|
|
145.64 |
|
|
|
175.51 |
|
|
|
77.0 |
|
|
|
135.13 |
|
|
|
7.8 |
|
Atlanta |
|
|
5 |
|
|
|
1,936 |
|
|
|
185.91 |
|
|
|
77.9 |
|
|
|
144.75 |
|
|
|
195.60 |
|
|
|
77.0 |
|
|
|
150.69 |
|
|
|
(3.9 |
) |
Northern Virginia |
|
|
5 |
|
|
|
1,919 |
|
|
|
185.99 |
|
|
|
75.8 |
|
|
|
140.90 |
|
|
|
184.14 |
|
|
|
75.0 |
|
|
|
138.11 |
|
|
|
2.0 |
|
San Antonio |
|
|
2 |
|
|
|
1,513 |
|
|
|
187.32 |
|
|
|
74.4 |
|
|
|
139.40 |
|
|
|
181.55 |
|
|
|
72.2 |
|
|
|
131.01 |
|
|
|
6.4 |
|
Orlando |
|
|
1 |
|
|
|
2,004 |
|
|
|
184.98 |
|
|
|
70.4 |
|
|
|
130.17 |
|
|
|
179.30 |
|
|
|
70.1 |
|
|
|
125.62 |
|
|
|
3.6 |
|
Miami |
|
|
2 |
|
|
|
843 |
|
|
|
160.37 |
|
|
|
80.4 |
|
|
|
128.90 |
|
|
|
157.48 |
|
|
|
75.0 |
|
|
|
118.14 |
|
|
|
9.1 |
|
Houston |
|
|
4 |
|
|
|
1,716 |
|
|
|
176.25 |
|
|
|
72.3 |
|
|
|
127.50 |
|
|
|
178.11 |
|
|
|
72.1 |
|
|
|
128.50 |
|
|
|
(0.8 |
) |
Denver |
|
|
3 |
|
|
|
1,340 |
|
|
|
166.34 |
|
|
|
75.1 |
|
|
|
124.93 |
|
|
|
164.30 |
|
|
|
75.0 |
|
|
|
123.19 |
|
|
|
1.4 |
|
Other |
|
|
8 |
|
|
|
3,596 |
|
|
|
168.08 |
|
|
|
73.9 |
|
|
|
124.26 |
|
|
|
166.34 |
|
|
|
72.8 |
|
|
|
121.10 |
|
|
|
2.6 |
|
Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
225.20 |
|
|
|
80.0 |
|
|
|
180.19 |
|
|
|
222.39 |
|
|
|
79.6 |
|
|
|
176.95 |
|
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
|
158.60 |
|
|
|
66.2 |
|
|
|
105.06 |
|
|
|
154.85 |
|
|
|
61.0 |
|
|
|
94.45 |
|
|
|
11.2 |
|
All Locations - Constant US$ |
|
|
85 |
|
|
|
47,455 |
|
|
|
223.45 |
|
|
|
79.6 |
|
|
|
177.82 |
|
|
|
220.74 |
|
|
|
79.0 |
|
|
|
174.35 |
|
|
|
2.0 |
|
All Owned Hotels in Constant US$ (2)
|
|
As of December 31,2018 |
|
|
Year ended December 31, 2018 |
|
|
Year ended December 31, 2017 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
Comparable Hotels |
|
|
85 |
|
|
|
47,455 |
|
|
$ |
223.45 |
|
|
|
79.6 |
% |
|
$ |
177.82 |
|
|
$ |
220.74 |
|
|
|
79.0 |
% |
|
$ |
174.35 |
|
|
|
2.0 |
% |
Non-comparable Hotels (Pro forma) |
|
|
8 |
|
|
|
4,670 |
|
|
|
335.55 |
|
|
|
79.3 |
|
|
|
265.98 |
|
|
|
327.04 |
|
|
|
79.8 |
|
|
|
261.02 |
|
|
|
1.9 |
|
All Hotels |
|
|
93 |
|
|
|
52,125 |
|
|
|
233.44 |
|
|
|
79.6 |
|
|
|
185.71 |
|
|
|
230.34 |
|
|
|
79.1 |
|
|
|
182.10 |
|
|
|
2.0 |
|
Comparable Hotels in Nominal US$
|
|
As of December 31,2018 |
|
|
Year ended December 31,
2018 |
|
|
Year ended December 31,
2017 |
|
|
|
|
|
|
|
No. ofProperties |
|
|
No. ofRooms |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
AverageRoom Rate |
|
|
AverageOccupancyPercentage |
|
|
RevPAR |
|
|
PercentChange inRevPAR |
|
International |
|
|
5 |
|
|
|
1,499 |
|
|
$ |
158.60 |
|
|
|
66.2 |
% |
|
$ |
105.06 |
|
|
$ |
161.46 |
|
|
|
61.0 |
% |
|
$ |
98.48 |
|
|
|
6.7 |
% |
Domestic |
|
|
80 |
|
|
|
45,956 |
|
|
|
225.20 |
|
|
|
80.0 |
|
|
|
180.19 |
|
|
|
222.39 |
|
|
|
79.6 |
|
|
|
176.95 |
|
|
|
1.8 |
|
All Locations |
|
|
85 |
|
|
|
47,455 |
|
|
|
223.45 |
|
|
|
79.6 |
|
|
|
177.82 |
|
|
|
220.90 |
|
|
|
79.0 |
|
|
|
174.47 |
|
|
|
1.9 |
|
(1) |
|
|
See the Notes to Financial Information for a discussion of
comparable hotel operating statistics and constant US$
presentation. Nominal US$ results include the effect of currency
fluctuations, consistent with our financial statement presentation.
CBD of a location refers to the central business district. |
(2) |
|
|
Operating statistics are presented for all consolidated
properties owned as of December 31, 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 3.0% and increase of 1.9% for the
quarter and full year, 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 December 31, |
|
|
Year ended December 31, |
|
|
|
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$ |
|
|
2.3 |
% |
|
|
— |
|
|
|
2.0 |
% |
|
|
— |
|
Nominal US$ |
|
|
2.2 |
% |
|
|
— |
|
|
|
1.9 |
% |
|
|
— |
|
Operating profit margin (2) |
|
|
13.8 |
% |
|
|
10.0 |
% |
|
|
9.6 |
% |
|
|
12.5 |
% |
Comparable hotel EBITDA margin (2) |
|
|
27.85 |
% |
|
|
27.4 |
% |
|
|
28.8 |
% |
|
|
28.2 |
% |
Food and beverage profit margin (2) |
|
|
32.6 |
% |
|
|
32.3 |
% |
|
|
31.7 |
% |
|
|
31.4 |
% |
Comparable hotel food and beverage profit margin (2) |
|
|
33.8 |
% |
|
|
33.2 |
% |
|
|
32.9 |
% |
|
|
32.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
306 |
|
|
$ |
93 |
|
|
$ |
1,151 |
|
|
$ |
571 |
|
Depreciation and
amortization |
|
|
165 |
|
|
|
217 |
|
|
|
944 |
|
|
|
751 |
|
Interest expense |
|
|
42 |
|
|
|
42 |
|
|
|
176 |
|
|
|
167 |
|
Provision for income
taxes |
|
|
87 |
|
|
|
17 |
|
|
|
150 |
|
|
|
80 |
|
(Gain)/loss on sale of
property and corporate level income/expense |
|
|
(225 |
) |
|
|
1 |
|
|
|
(843 |
) |
|
|
(44 |
) |
Non-comparable hotel results, net (3) |
|
|
(48 |
) |
|
|
(55 |
) |
|
|
(222 |
) |
|
|
(229 |
) |
Comparable hotel EBITDA |
|
$ |
327 |
|
|
$ |
315 |
|
|
$ |
1,356 |
|
|
$ |
1,296 |
|
|
|
Quarter ended December 31,
2018 |
|
|
Quarter ended December 31,
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 |
|
$ |
856 |
|
|
$ |
(103 |
) |
|
$ |
— |
|
|
$ |
753 |
|
|
$ |
847 |
|
|
$ |
(110 |
) |
|
$ |
— |
|
|
$ |
737 |
Food and beverage |
|
|
417 |
|
|
|
(63 |
) |
|
|
— |
|
|
|
354 |
|
|
|
409 |
|
|
|
(60 |
) |
|
|
— |
|
|
|
349 |
Other |
|
|
88 |
|
|
|
(21 |
) |
|
|
— |
|
|
|
67 |
|
|
|
88 |
|
|
|
(22 |
) |
|
|
— |
|
|
|
66 |
Total revenues |
|
|
1,361 |
|
|
|
(187 |
) |
|
|
— |
|
|
|
1,174 |
|
|
|
1,344 |
|
|
|
(192 |
) |
|
|
— |
|
|
|
1,152 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
222 |
|
|
|
(29 |
) |
|
|
— |
|
|
|
193 |
|
|
|
223 |
|
|
|
(32 |
) |
|
|
— |
|
|
|
191 |
Food and beverage |
|
|
281 |
|
|
|
(47 |
) |
|
|
— |
|
|
|
234 |
|
|
|
277 |
|
|
|
(44 |
) |
|
|
— |
|
|
|
233 |
Other |
|
|
490 |
|
|
|
(70 |
) |
|
|
— |
|
|
|
420 |
|
|
|
482 |
|
|
|
(69 |
) |
|
|
— |
|
|
|
413 |
Depreciation and amortization |
|
|
165 |
|
|
|
— |
|
|
|
(165 |
) |
|
|
— |
|
|
|
217 |
|
|
|
— |
|
|
|
(217 |
) |
|
|
— |
Corporate and other expenses |
|
|
22 |
|
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
19 |
|
|
|
— |
|
|
|
(19 |
) |
|
|
— |
Gain on insurance and business interruption
settlements |
|
|
(7 |
) |
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
|
8 |
|
|
|
— |
|
|
|
— |
Total expenses |
|
|
1,173 |
|
|
|
(139 |
) |
|
|
(187 |
) |
|
|
847 |
|
|
|
1,210 |
|
|
|
(137 |
) |
|
|
(236 |
) |
|
|
837 |
Operating Profit - Comparable Hotel
EBITDA |
|
$ |
188 |
|
|
$ |
(48 |
) |
|
$ |
187 |
|
|
$ |
327 |
|
|
$ |
134 |
|
|
$ |
(55 |
) |
|
$ |
236 |
|
|
$ |
315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
2018 |
|
|
Year ended December 31,
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 |
|
$ |
3,547 |
|
|
$ |
(467 |
) |
|
$ |
— |
|
|
$ |
3,080 |
|
|
$ |
3,490 |
|
|
$ |
(468 |
) |
|
$ |
— |
|
|
$ |
3,022 |
Food and beverage |
|
|
1,616 |
|
|
|
(248 |
) |
|
|
— |
|
|
|
1,368 |
|
|
|
1,561 |
|
|
|
(226 |
) |
|
|
— |
|
|
|
1,335 |
Other |
|
|
361 |
|
|
|
(95 |
) |
|
|
— |
|
|
|
266 |
|
|
|
336 |
|
|
|
(90 |
) |
|
|
— |
|
|
|
246 |
Total revenues |
|
|
5,524 |
|
|
|
(810 |
) |
|
|
— |
|
|
|
4,714 |
|
|
|
5,387 |
|
|
|
(784 |
) |
|
|
— |
|
|
|
4,603 |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room |
|
|
918 |
|
|
|
(130 |
) |
|
|
— |
|
|
|
788 |
|
|
|
899 |
|
|
|
(129 |
) |
|
|
— |
|
|
|
770 |
Food and beverage |
|
|
1,103 |
|
|
|
(185 |
) |
|
|
— |
|
|
|
918 |
|
|
|
1,071 |
|
|
|
(169 |
) |
|
|
— |
|
|
|
902 |
Other |
|
|
1,932 |
|
|
|
(280 |
) |
|
|
— |
|
|
|
1,652 |
|
|
|
1,906 |
|
|
|
(271 |
) |
|
|
— |
|
|
|
1,635 |
Depreciation and amortization |
|
|
944 |
|
|
|
— |
|
|
|
(944 |
) |
|
|
— |
|
|
|
751 |
|
|
|
— |
|
|
|
(751 |
) |
|
|
— |
Corporate and other expenses |
|
|
104 |
|
|
|
— |
|
|
|
(104 |
) |
|
|
— |
|
|
|
98 |
|
|
|
— |
|
|
|
(98 |
) |
|
|
— |
Gain on insurance and business interruption
settlements |
|
|
(7 |
) |
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
14 |
|
|
|
— |
|
|
|
— |
Total expenses |
|
|
4,994 |
|
|
|
(588 |
) |
|
|
(1,048 |
) |
|
|
3,358 |
|
|
|
4,711 |
|
|
|
(555 |
) |
|
|
(849 |
) |
|
|
3,307 |
Operating Profit - Comparable Hotel
EBITDA |
|
$ |
530 |
|
|
$ |
(222 |
) |
|
$ |
1,048 |
|
|
$ |
1,356 |
|
|
$ |
676 |
|
|
$ |
(229 |
) |
|
$ |
849 |
|
|
$ |
1,296 |
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
See the
Notes to Financial Information for a discussion of non-GAAP
measures and the calculation of comparable hotel results. For
additional information on comparable hotel EBITDA by location, see
the Year End 2018 Supplemental Financial Information posted on our
website. |
(2) |
|
|
Profit
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
toEBITDA, EBITDAre and Adjusted EBITDAre
(1)(unaudited, in millions)
|
|
Quarter endedDecember 31, |
|
|
Year endedDecember 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income (2) |
|
$ |
306 |
|
|
$ |
93 |
|
|
$ |
1,151 |
|
|
$ |
571 |
|
Interest expense |
|
|
42 |
|
|
|
42 |
|
|
|
176 |
|
|
|
167 |
|
Depreciation and amortization |
|
|
165 |
|
|
|
174 |
|
|
|
684 |
|
|
|
708 |
|
Income taxes |
|
|
87 |
|
|
|
17 |
|
|
|
150 |
|
|
|
80 |
|
EBITDA (2) |
|
|
600 |
|
|
|
326 |
|
|
|
2,161 |
|
|
|
1,526 |
|
(Gain) loss on dispositions (3) |
|
|
(238 |
) |
|
|
2 |
|
|
|
(903 |
) |
|
|
(100 |
) |
Non-cash impairment expense |
|
|
— |
|
|
|
43 |
|
|
|
260 |
|
|
|
43 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of Euro JV (5) |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
(14 |
) |
|
|
(18 |
) |
Equity in earnings of affiliates other than Euro
JV |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(16 |
) |
|
|
(12 |
) |
Pro rata EBITDAre of Euro JV (5) |
|
|
9 |
|
|
|
9 |
|
|
|
45 |
|
|
|
40 |
|
Pro rata EBITDAre of equity investments other than
Euro JV |
|
|
6 |
|
|
|
6 |
|
|
|
29 |
|
|
|
31 |
|
EBITDAre (2) |
|
|
372 |
|
|
|
375 |
|
|
|
1,562 |
|
|
|
1,510 |
|
Adjustments to EBITDAre: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Gain on property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Adjusted EBITDAre (2) |
|
$ |
372 |
|
|
$ |
375 |
|
|
$ |
1,562 |
|
|
$ |
1,510 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and $2 million for the years ended
December 31, 2018 and 2017, respectively, for the sale of the
portion of land attributable to individual units sold by the Maui
timeshare joint venture and a gain of $4 million for the year ended
December 31, 2017 for the sale of excess land in Chicago. |
(3) |
|
|
Reflects the sale of the
New York Marriott Marquis Retail in the third quarter of 2018, the
European Joint Venture (“Euro JV”) in the fourth 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 Euro JV. Our approximate
one-third non-controlling interest was sold on December 21,
2018. |
|
|
|
|
HOST HOTELS & RESORTS,
INC.Reconciliation of Net Income to NAREIT
andAdjusted Funds From Operations per Diluted
Share (1)(unaudited, in millions, except
per share amounts)
|
|
Quarter ended December 31, |
|
|
Year ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income (2) |
|
$ |
306 |
|
|
$ |
93 |
|
|
$ |
1,151 |
|
|
$ |
571 |
|
Less: Net income attributable to
non-controlling interests |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
(64 |
) |
|
|
(7 |
) |
Net income attributable to Host Inc. |
|
|
303 |
|
|
|
92 |
|
|
|
1,087 |
|
|
|
564 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gain) loss on dispositions (3) |
|
|
(238 |
) |
|
|
2 |
|
|
|
(903 |
) |
|
|
(100 |
) |
Tax on dispositions |
|
|
84 |
|
|
|
(5 |
) |
|
|
113 |
|
|
|
18 |
|
Gain on property insurance settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
Depreciation and amortization |
|
|
164 |
|
|
|
173 |
|
|
|
680 |
|
|
|
704 |
|
Non-cash impairment expense |
|
|
— |
|
|
|
43 |
|
|
|
260 |
|
|
|
43 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
|
(5 |
) |
|
|
(11 |
) |
|
|
(30 |
) |
|
|
(30 |
) |
Pro rata FFO of equity investments |
|
|
9 |
|
|
|
16 |
|
|
|
53 |
|
|
|
56 |
|
Consolidated partnership adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO adjustment for non-controlling
partnerships |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
50 |
|
|
|
(4 |
) |
FFO adjustments for non-controlling interests
of Host L.P. |
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(8 |
) |
NAREIT FFO (2) |
|
|
315 |
|
|
|
306 |
|
|
|
1,308 |
|
|
|
1,242 |
|
Adjustments to NAREIT FFO: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Adjustment for Tax Reform (5) |
|
|
— |
|
|
|
6 |
|
|
|
— |
|
|
|
6 |
|
Loss on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Adjusted FFO (2) |
|
$ |
315 |
|
|
$ |
312 |
|
|
$ |
1,308 |
|
|
$ |
1,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For calculation on a per share basis (6): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding - EPS,
NAREIT FFO and Adjusted FFO |
|
|
741.0 |
|
|
|
739.6 |
|
|
|
740.6 |
|
|
|
739.1 |
|
NAREIT FFO per diluted share |
|
$ |
.43 |
|
|
$ |
.41 |
|
|
$ |
1.77 |
|
|
$ |
1.68 |
|
Adjusted FFO per diluted share |
|
$ |
.43 |
|
|
$ |
.42 |
|
|
$ |
1.77 |
|
|
$ |
1.69 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1-4) |
|
|
Refer to the
corresponding footnote on the Reconciliation of Net Income to
EBITDA, EBITDAre and Adjusted EBITDAre. |
(5) |
|
|
As a
result of the reduction of corporate income tax rates from 35% to
21% caused by the Tax Cuts and Jobs Act, we remeasured our domestic
deferred tax assets as of December 31, 2017 and recorded a one-time
adjustment to reduce the deferred tax assets and increase the
provision for income taxes by approximately $11 million.
Additionally, similar corporate income tax rate reductions affected
our European Joint Venture, causing the remeasurement of the net
deferred tax assets and liabilities in France and Belgium,
resulting in a net tax benefit to us of $5 million. We do not
consider these adjustments to be reflective of our on-going
operating performance and therefore have excluded these items from
Adjusted FFO. |
(6) |
|
|
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
andNAREIT 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 |
$ |
587 |
|
|
$ |
652 |
|
Interest expense |
|
176 |
|
|
|
176 |
|
Depreciation and amortization |
|
697 |
|
|
|
697 |
|
Income taxes |
|
38 |
|
|
|
38 |
|
EBITDA |
|
1,498 |
|
|
|
1,563 |
|
Equity investment adjustments: |
|
|
|
|
|
|
|
Equity in earnings of affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata EBITDAre of equity investments |
|
27 |
|
|
|
27 |
|
EBITDAre |
|
1,515 |
|
|
|
1,580 |
|
Adjusted EBITDAre |
$ |
1,515 |
|
|
$ |
1,580 |
|
|
|
|
|
|
|
|
|
|
Full Year 2019 |
|
|
Low-endof range |
|
|
High-endof range |
|
Net
income |
$ |
587 |
|
|
$ |
652 |
|
Less: Net income
attributable to non-controlling interests |
|
(6 |
) |
|
|
(7 |
) |
Net income
attributable to Host Inc. |
|
581 |
|
|
|
645 |
|
Adjustments: |
|
|
|
|
|
|
|
Depreciation
and amortization |
|
694 |
|
|
|
694 |
|
Equity
investment adjustments: |
|
|
|
|
|
|
|
Equity in
earnings of affiliates |
|
(10 |
) |
|
|
(10 |
) |
Pro rata FFO
of equity investments |
|
19 |
|
|
|
19 |
|
Consolidated
partnership adjustments: |
|
|
|
|
|
|
|
FFO
adjustment for non-controlling partnerships |
|
(2 |
) |
|
|
(2 |
) |
FFO
adjustment for non-controlling interests of Host LP |
|
(7 |
) |
|
|
(7 |
) |
NAREIT
FFO |
|
1,275 |
|
|
|
1,339 |
|
Adjusted
FFO |
$ |
1,275 |
|
|
$ |
1,339 |
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares - EPS, NAREIT and Adjusted FFO |
|
741.8 |
|
|
|
741.8 |
|
Diluted earnings
per common share |
$ |
0.78 |
|
|
$ |
0.87 |
|
NAREIT FFO per
diluted share |
$ |
1.72 |
|
|
$ |
1.81 |
|
Adjusted FFO per
diluted share |
$ |
1.72 |
|
|
$ |
1.81 |
|
___________ |
|
|
|
|
|
|
|
(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 50 basis points or increase 10 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.
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 ofrange |
|
|
High-end ofrange |
|
Operating profit margin (2) |
|
|
|
14.0 |
% |
|
|
14.9 |
% |
Comparable hotel EBITDA margin (3) |
|
|
|
28.4 |
% |
|
|
29.0 |
% |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
$ |
587 |
|
|
$ |
652 |
|
Depreciation and amortization |
|
|
|
697 |
|
|
|
697 |
|
Interest expense |
|
|
|
176 |
|
|
|
176 |
|
Provision for income taxes |
|
|
|
38 |
|
|
|
38 |
|
Corporate level income/expense |
|
|
|
88 |
|
|
|
88 |
|
Non-comparable hotel results, net (4) |
|
|
|
(240 |
) |
|
|
(249 |
) |
Comparable hotel EBITDA |
|
|
$ |
1,346 |
|
|
$ |
1,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAPResults |
|
|
Non-comparablehotel results,net
(4) |
|
|
Depreciationand corporatelevel
items |
|
|
ComparableHotelResults |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,543 |
|
|
$ |
(511 |
) |
|
$ |
— |
|
|
$ |
3,032 |
|
Food and beverage |
|
|
1,644 |
|
|
|
(234 |
) |
|
|
— |
|
|
|
1,410 |
|
Other |
|
|
372 |
|
|
|
(80 |
) |
|
|
— |
|
|
|
292 |
|
Total revenues |
|
|
5,559 |
|
|
|
(825 |
) |
|
|
— |
|
|
|
4,734 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
3,973 |
|
|
|
(585 |
) |
|
|
— |
|
|
|
3,388 |
|
Depreciation |
|
|
697 |
|
|
|
— |
|
|
|
(697 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
111 |
|
|
|
— |
|
|
|
(111 |
) |
|
|
— |
|
Total expenses |
|
|
4,781 |
|
|
|
(585 |
) |
|
|
(808 |
) |
|
|
3,388 |
|
Operating Profit - Comparable Hotel
EBITDA |
|
$ |
778 |
|
|
$ |
(240 |
) |
|
$ |
808 |
|
|
$ |
1,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High-end of range |
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
GAAPResults |
|
|
Non-comparablehotel results,net
(4) |
|
|
Depreciationand corporatelevel
items |
|
|
ComparableHotelResults |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
$ |
3,613 |
|
|
$ |
(520 |
) |
|
$ |
— |
|
|
$ |
3,093 |
|
Food and beverage |
|
|
1,676 |
|
|
|
(238 |
) |
|
|
— |
|
|
|
1,438 |
|
Other |
|
|
379 |
|
|
|
(82 |
) |
|
|
— |
|
|
|
297 |
|
Total revenues |
|
|
5,668 |
|
|
|
(840 |
) |
|
|
— |
|
|
|
4,828 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel expenses |
|
|
4,017 |
|
|
|
(591 |
) |
|
|
— |
|
|
|
3,426 |
|
Depreciation and amortization |
|
|
697 |
|
|
|
— |
|
|
|
(697 |
) |
|
|
— |
|
Corporate and other expenses |
|
|
111 |
|
|
|
— |
|
|
|
(111 |
) |
|
|
— |
|
Total expenses |
|
|
4,825 |
|
|
|
(591 |
) |
|
|
(808 |
) |
|
|
3,426 |
|
Operating Profit - Comparable Hotel
EBITDA |
|
$ |
843 |
|
|
$ |
(249 |
) |
|
$ |
808 |
|
|
$ |
1,402 |
|
___________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
Forecast comparable hotel
results include 84 hotels (of our 93 hotels owned at
December 31, 2018) 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, Adjusted
EBITDAre and 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)
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
December 31, 2018, 85 have been classified as comparable
hotels. The operating results of the following hotels that we owned
as of December 31, 2018 are excluded from comparable hotel
results for these periods:
- The Phoenician (acquired in June
2015 and, beginning in the second quarter of 2016 and into 2017,
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 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 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 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, 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 and an interest of 48% held by an outside partner for
one hotel that we sold during the year. 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://resource.globenewswire.com/Resource/Download/40fef998-c828-4dd7-bd3f-38d469d0810a
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