hst-8k_20190219.htm

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 19, 2019

 

HOST HOTELS & RESORTS, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

Maryland

 

001-14625

 

53-0085950

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

6903 Rockledge Drive, Suite 1500

Bethesda, Maryland

 

20817

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (240) 744-1000

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On February 19, 2019, Host Hotels & Resorts, Inc. issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2018. The press release referred to supplemental financial information for the quarter that is available on the Company’s website at www.hosthotels.com. A copy of the press release and the supplemental financial information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report.

The information in this Report, including the exhibits, is provided under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information in this Report, including the exhibits, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933 regardless of any general incorporation language in such filings.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

  

Description

99.1

  

Host Hotels & Resorts, Inc.’s earnings release for the fourth quarter and full year 2018.

99.2

 

Host Hotels & Resorts, Inc. Year End 2018 Supplemental Financial Information.

 

 

 


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

HOST HOTELS & RESORTS, INC.

 

 

 

 

 

 

 

Date: February 19, 2019

 

 

 

By:

 

/S/ BRIAN G. MACNAMARA

 

 

 

 

Name:

 

Brian G. Macnamara

 

 

 

 

Title:

 

Senior Vice President,

Corporate Controller

 

hst-ex991_7.htm

 

Exhibit 99.1

 

 

 

Michael D. Bluhm, Chief Financial Officer

240.744.5110

Gee Lingberg, Senior Vice President

240.744.5275

 

 

 

 

NEWS RELEASE

HOST HOTELS & RESORTS, INC. REPORTS RESULTS FOR 2018 AND THE ACQUISITION OF THE 1 HOTEL SOUTH BEACH MIAMI

BETHESDA, Md.; February 19, 2019 – 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

 

o

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;

 

o

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;

 

o

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

 

o

Disposed of over $2.2 billion in non-core assets at attractive pricing.

 

Acquisition of 1 Hotel South Beach Miami

 

o

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;

 

o

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;

 

o

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

 

o

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 1

(unaudited, in millions, except per share and hotel statistics)  

  

Quarter ended

December 31,

 

Percent

 

Year ended

December 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, or 3.7%, 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.

Page 2 of 22


 

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

Page 3 of 22


 

$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 ***


Page 4 of 22


 

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.

2018 OPERATING RESULTS

  

PAGE NO.

 

Condensed Consolidated Balance Sheets (unaudited)

     December 31, 2018 and December 31, 2017

  

6

 

Condensed Consolidated Statements of Operations (unaudited)

     Quarter and Year Ended December 31, 2018 and 2017

  

7

 

Earnings per Common Share (unaudited)

     Quarter and Year Ended December 31, 2018 and 2017

  

8

 

Hotel Operating Data

  

 

     Hotel Operating Data for Consolidated Hotels (by Location)

  

9

 

 

 

Schedule of Comparable Hotel Results

 

11

 

Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre

  

13

 

Reconciliation of Net Income to NAREIT and Adjusted Funds From Operations per Diluted Share

  

14

 

2019 FORECAST INFORMATION

  

 

 

Reconciliation of Net Income to EBITDA, EBITDAre, Adjusted EBITDAre and NAREIT and Adjusted Funds From Operations per Diluted Share for 2019 Forecasts

  

15

 

Schedule of Comparable Hotel Results for 2019 Forecasts

  

16

 

Notes to Financial Information

  

18

 

 

 

 

 

 

 


Page 5 of 22


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.                          

 

 

 

 

 

Page 6 of 22


HOST HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Operations

(unaudited, in millions, except per share amounts)

 

 

Quarter ended

December 31,

 

 

Year ended

December 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 ended

December 31,

 

 

Year ended

December 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.

          


Page 7 of 22


HOST HOTELS & RESORTS, INC.

Earnings per Common Share

(unaudited, in millions, except per share amounts)

 

 

 

Quarter ended

December 31,

 

 

Year ended

December 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.  

 

 

 

 

 

  

 

 

 


Page 8 of 22


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. 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

 

 

$

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. 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

 

 

$

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