hst-8k_20200730.htm
false 0001070750 0001070750 2020-07-30 2020-07-30

 

 

UNITED STATES

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): July 30, 2020

 

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.)

 

4747 Bethesda Avenue, Suite 1300

Bethesda, Maryland

 

20814

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (240744-1000

 

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

  

Trading Symbol

  

Name of Each Exchange on

Which Registered

Common Stock, $.01 par value

  

HST

  

New York Stock Exchange

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 July 30, 2020, Host Hotels & Resorts, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2020. 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 second quarter 2020.

99.2

 

Host Hotels & Resorts, Inc. Second Quarter 2020 Supplemental Financial Information.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 


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: July 30, 2020

 

 

 

By:

 

/S/ BRIAN G. MACNAMARA

 

 

 

 

Name:

 

Brian G. Macnamara

 

 

 

 

Title:

 

Senior Vice President, Principal Financial Officer, Corporate Controller

 

hst-ex991_7.htm

 

 

Exhibit 99.1

Tejal Engman
Investor Relations
(240) 744-5116
ir@hosthotels.com

 

Host Hotels & Resorts, Inc. Reports Results for Second Quarter 2020

BETHESDA, MD; July 30, 2020 – Host Hotels & Resorts, Inc. (NYSE: HST) (the “Company”), the nation’s largest lodging real estate investment trust (“REIT”), today announced results for the second quarter of 2020.

James F. Risoleo, President and Chief Executive Officer, said, “I am incredibly proud of Host’s swift and decisive response to the challenging operating environment we faced in the second quarter. We significantly reduced our monthly hotel-level loss from April to June by working with our operators to reopen 19 hotels in a socially and financially responsible manner while continuing to carefully control expenses. Our total portfolio grew average occupancy by 380 basis points and improved average room rates by over 50% from April through June. As importantly, we worked with our supportive lending partners to successfully amend our $2.5 billion credit agreement and achieved outstanding terms that preserve the Company’s liquidity while retaining our flexibility to capitalize on value-enhancing investment opportunities during this period of extreme dislocation.”

Risoleo continued, “Although it remains difficult to estimate the timing or magnitude of an economic recovery, we are continuing to take actions to strengthen our business to achieve our key near-term objectives, including improving cash flow and achieving breakeven EBITDA at our hotels. We are working with our operators to drive occupancy and increase revenues while redefining our operating model to generate higher levels of profitability at lower levels of occupancy. As we rise to the unprecedented challenge facing the travel industry today, our hearts and minds remain with all those affected by COVID-19, as well as with the healthcare workers who are making tremendous sacrifices to help save lives and end this crisis.”

Operating Results 1

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

 

Quarter ended

June 30,

 

 

Percent

 

 

Year-to-date ended

June 30,

 

 

Percent

 

 

2020

 

 

2019

 

 

Change

 

 

2020

 

 

2019

 

 

Change

 

Revenues

$

103

 

 

$

1,483

 

 

 

(93.1

)%

 

$

1,155

 

 

$

2,873

 

 

 

(59.8

)%

All owned hotel revenues (pro forma) (1)

 

103

 

 

 

1,398

 

 

 

(92.6

)%

 

 

1,155

 

 

 

2,712

 

 

 

(57.4

)%

Net income (loss)

 

(356

)

 

 

290

 

 

N/M

 

 

 

(359

)

 

 

479

 

 

N/M

 

EBITDAre and Adjusted EBITDAre (1)

 

(190

)

 

 

460

 

 

N/M

 

 

 

(26

)

 

 

867

 

 

N/M

 

All owned hotel Total RevPAR - Constant US$

 

23.16

 

 

 

327.00

 

 

 

(92.9

)%

 

 

134.46

 

 

 

319.06

 

 

 

(57.9

)%

All owned hotel RevPAR - Constant US$

 

14.31

 

 

 

204.15

 

 

 

(93.0

)%

 

 

80.81

 

 

 

198.12

 

 

 

(59.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

 

(0.50

)

 

 

0.39

 

 

N/M

 

 

 

(0.50

)

 

 

0.64

 

 

N/M

 

NAREIT FFO and Adjusted FFO per diluted share (1)

 

(0.26

)

 

 

0.53

 

 

N/M

 

 

 

(0.03

)

 

 

1.01

 

 

N/M

 

__________

N/M = Not meaningful.

*Additional detail on the Company’s results, including data for 22 domestic markets and top 40 hotels by Total RevPAR, is available in the Second Quarter 2020 Supplemental Financial Information available on the Company’s website at www.hosthotels.com.

Portfolio Highlights:

 

As of July 30, 2020, re-opened 19 of the 35 hotels that had suspended operations as of May 6, 2020.

 

Improved average occupancy by 380 basis points, from 6.9% in April to 10.7% in June 2020.

 

Improved average room rate by over 50%, from $129 in April to $194 in June 2020.

 

(1)

NAREIT Funds From Operations (“FFO”) per diluted share, Adjusted FFO per diluted share, EBITDAre, Adjusted EBITDAre and all owned hotel results (pro forma) 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.

 


 

Update on COVID-19 Response

In response to the COVID-19 pandemic, the Company and its hotel operators have prioritized preserving financial liquidity and ensuring that its hotels are well positioned for recovery. Actions by the Company in support of these priorities include:

Preserving financial liquidity:

Hotel Operations

 

Reduced portfolio-wide hotel operating costs by approximately 70% in the second quarter compared to the prior year, by suspending operations at certain hotels, furloughs of hotel employees and scaling back operations.

 

Reduced hotel labor costs significantly due to the furlough of up to 80% of hotel employees who received healthcare benefits and special pay of $45 million in the second quarter. The Company accrued $35 million of these second-quarter costs in the first quarter and $32 million of these third-quarter costs in the second quarter.

Balance Sheet, Capital Allocation and Expense Management

 

Amended the credit agreement governing the $1.5 billion revolving credit facility and two $500 million term loans in June 2020, while preserving the Company’s flexibility in making acquisitions and raising capital, subject to certain restrictions. Additional detail on the Company’s second quarter covenant levels is available in the Second Quarter 2020 Supplemental Financial Information available on the Company’s website at www.hosthotels.com.

 

Suspended the quarterly dividend and stock repurchases.

 

Continue to expect reductions in corporate expenses for the full year of 10-15% compared to the prior year. Corporate expenses in the second quarter were unchanged from the prior year due to timing of certain expenses.

Positioning for recovery:

 

Continued to take advantage of reduced demand to complete Marriott transformational capital program and other ROI projects. The Company believes the renovations will position these hotels to capture additional revenue during a potential economic recovery.

 

Continued to review operating costs at varying levels of occupancy with a focus on modernizing brand standards, streamlining operating departments and accelerating the adoption of cost-saving technology.

The impact of the COVID-19 pandemic on the Company remains fluid and a great deal of uncertainty surrounding the trends and duration of the COVID-19 pandemic remains. The Company, as well as its hotel managers, are monitoring developments on an ongoing basis and may take additional actions in response to future developments to reduce the impact to the Company’s stakeholders.

Operating Results

The Company’s prior year presentation of comparable hotel performance is no longer relevant given the impact of COVID-19. Hotel operating results, including RevPAR, are being reported on an All Owned Hotel pro forma basis, which includes all consolidated properties owned as of June 30, 2020, but does not include the results of operations for properties sold in 2019. Additionally, operating results for acquisitions in the prior year are reflected for the full 2019 calendar quarter, to include results for periods prior to the Company’s ownership. See the Notes to Financial Information – All Owned Hotel Operating Statistics and Results for further information on these pro forma statistics.

Due to low occupancy levels and/or state mandates, operations remain suspended at 16 hotels in the Company’s portfolio as of July 30, 2020. The Company has provided a complete list of these suspended hotels on page 41 of its Second Quarter 2020 Supplemental Information available on the Company’s website at www.hosthotels.com.

The following presents the monthly hotel operating results for the full portfolio and for the hotels without suspended operations during the periods presented:

 

Total Portfolio

 

 

Open Hotels (2)

 

 

April

 

 

May

 

 

June

 

 

April

 

 

May

 

 

June

 

Number of hotels

 

80

 

 

 

80

 

 

 

80

 

 

 

45

 

 

 

45

 

 

 

47

 

Number of rooms

 

46,669

 

 

 

46,670

 

 

 

46,670

 

 

 

26,379

 

 

 

26,379

 

 

 

27,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Occupancy Percentage

 

6.9

%

 

 

8.8

%

 

 

10.7

%

 

 

12.1

%

 

 

15.3

%

 

 

16.3

%

Average Room Rate

$

128.54

 

 

$

150.16

 

 

$

193.67

 

 

$

134.01

 

 

$

146.09

 

 

$

182.26

 

RevPAR

$

8.92

 

 

$

13.29

 

 

$

20.77

 

 

$

16.16

 

 

$

22.37

 

 

$

29.71

 

__________

(2)

Represents the hotels that were accepting reservations during the entirety of the month. Excludes the 35, 35, and 33 hotels with suspended operations in the months of April, May, and June, respectively.

2


 

During the COVID-19 pandemic, the Company has remained keenly focused on monthly operating results and the effect on the long-term liquidity of the Company, and, as a result of the initiatives discussed above, significantly reduced its monthly cash expenditures for the second quarter of 2020. The following presents the second quarter 2020 results (in millions):

 

April

 

 

May

 

 

June

 

 

Quarter ended June 30, 2020

 

Revenues

$

24

 

 

$

30

 

 

$

49

 

 

$

103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

(120

)

 

 

(114

)

 

 

(122

)

 

 

(356

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hotel-level operating loss (3)

 

(73

)

 

 

(53

)

 

 

(37

)

 

 

(163

)

Significant expenditures for the second quarter included in the Company’s total cash burn are (in millions):

 

Quarter ended

June 30, 2020

 

GAAP net cash used in operating activities

$

(172

)

Cash burn (3)

$

(399

)

 

 

 

 

Components of cash burn:

 

 

 

Hotel-level operating loss (3)

 

(163

)

Interest payments

 

(46

)

Cash corporate and other expenses

 

(21

)

Capital expenditures

 

(169

)

__________

(3)

Hotel-level operating loss and cash burn are non-GAAP 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

The Company’s long-term liquidity can be estimated based on the average monthly cash burn using the second quarter performance. In this scenario, the average monthly GAAP cash used in operating activities would be approximately $75 million at the midpoint, which includes estimated interest, corporate-level expense, and cash timing adjustments, and the monthly cash burn for the remainder of 2020 would be approximately $100 million to $110 million(3), which includes estimated monthly capital expenditures. In this scenario, the total available liquidity at the end of 2020 would be approximately $1.8 billion to $1.9 billion, including cash, FF&E reserves and capacity under the credit facility. Further, at this estimated level of activity, the Company anticipates it would have ample liquidity until the middle of 2022, subject to obtaining continued covenant waivers from the lenders under the credit facility.

Hotel Business Mix Update

The Company’s customers fall into three broad groups: transient, group and contract business, which accounted for approximately 61%, 35%, and 4%, respectively, of its 2019 room sales.

During the second quarter, demand was primarily driven by drive-to and resort destinations. The following are the results of the Company’s consolidated portfolio transient, group and contract business:

 

Quarter ended June 30, 2020

 

 

Percent change vs.

Quarter ended June 30, 2019

 

 

Room nights

(in thousands)

 

 

Room Revenues

(in millions)

 

 

Room nights

 

 

Room Revenues

 

Transient business

 

198

 

 

$

37

 

 

 

(90.0

)%

 

 

(92.8

)%

Group business

 

134

 

 

 

18

 

 

 

(90.0

)%

 

 

(94.3

)%

Contract business

 

43

 

 

 

6

 

 

 

(74.1

)%

 

 

(83.3

)%

As of July 30, 2020, 2.7 million group room nights for the year have been cancelled. This equates to an estimated $1.0 billion in total cancelled group revenue of which approximately 62% is rooms revenue. Approximately 63% of the group room revenue lost was for the first half of the year. The Company believes that the pace of group and transient business remains uncertain for the second half of the year due to the continued uncertainty surrounding the pandemic, government restrictions on travel, and companies’ restrictions on business travel. The Company expects further cancellations of group business in the second half of the year.

Capital Expenditures

The Company’s capital expenditures spending is expected to range from $475 million to $520 million for full year 2020:

3


 

 

 

 

Year-to-date ended June 30, 2020

 

 

2020 Full Year Forecast

 

 

 

Actuals

 

 

Low-end of range

 

 

High-end of range

 

ROI - Marriott transformational capital program

 

$

118

 

 

$

195

 

 

$

200

 

ROI - All other ROI projects

 

 

88

 

 

 

130

 

 

 

145

 

Total ROI project spend

 

 

206

 

 

 

325

 

 

 

345

 

Renewals and Replacements

 

 

94

 

 

 

150

 

 

 

175

 

Total Capital Expenditures

 

$

300

 

 

$

475

 

 

$

520

 

Through the second quarter of 2020, the Company completed almost 60% of the total capital expenditure projects planned for the year and expects total spend in the second half of the year to be approximately $100 million lower than the first half. The full year forecast ROI capital expenditures includes $200 million for the Marriott transformational capital program, for which Marriott is expected to provide operating profit guarantees of approximately $20 million in 2020, including $6 million that was received in the second quarter of 2020.

The Company has prioritized major capital projects in those assets and markets that are expected to recover faster, such as leisure and drive-to destinations, as well as previously announced major return on investment projects. The Company is utilizing the low occupancy environment to accelerate certain projects and minimize future disruption.

Dispositions

During the quarter, the Company sold a parcel of land adjacent to The Phoenician hotel for approximately $17 million, of which half was financed through a bridge loan to the buyer, and recorded a gain of $12 million.

Balance Sheet

The Company maintains a robust balance sheet with the following values at June 30, 2020:

 

Total assets of $12.2 billion.

 

Cash balance of approximately $1.6 billion, FF&E escrow reserves of $154 million, and $750 million of available capacity under the revolver portion of the credit facility, following the June repayment of $750 million.

 

Debt balance of $4.5 billion, with an average maturity of 4.7 years, an average interest rate of 3.0%, and no significant maturities until 2023.

The Company’s quarterly-tested financial covenants in its credit facility were waived beginning July 1, 2020 through the second quarter of 2021, with testing resuming for the third quarter of 2021.

2020 Outlook

Given the global economic uncertainty COVID-19 has created for the travel, airline, lodging and tourism and event industries, among others, the Company cannot provide full year guidance for its operations or fully estimate the effect of COVID-19 on operations. The Company’s results during the second quarter reflected the unprecedented declines resulting from COVID-19. The Company does not expect to see a material improvement in operations until government restrictions have been lifted and business and leisure travelers are comfortable that the risks associated with traveling and contracting COVID-19 are significantly reduced. The Company does not intend to provide further updates unless deemed appropriate.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The Company currently owns 75 properties in the United States and five properties internationally totaling approximately 46,700 rooms. The Company also holds non-controlling interests in six domestic and one international joint ventures. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott®, Ritz-Carlton®, Westin®, Sheraton®, W®, St. Regis®, The Luxury Collection®, Hyatt®, Fairmont®, Hilton®, Swissôtel®, ibis® and Novotel®, as well as independent brands. For additional information, please visit the Company’s website at www.hosthotels.com.

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements include forecast results and are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: the duration and scope of the COVID-19 pandemic and its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the impact of the

4


 

pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity, including the duration and magnitude of its impact on unemployment rates, business investment and consumer discretionary spending; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in U.S. markets where we own hotels and a worsening of economic conditions or low levels of economic growth in these markets; the effects of steps we and our hotel managers take to reduce operating costs in response to the COVID-19 pandemic; other changes (apart from the COVID-19 pandemic) in national and local economic and business conditions and other factors such as natural disasters 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 July 30, 2020 and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

*

This press release contains registered trademarks that are the exclusive property of their respective owners. None of the owners of these trademarks has any responsibility or liability for any information contained in this press release.

*** Tables to Follow ***


5


 

Host Hotels & Resorts, Inc., herein referred to as “we,” “Host Inc.,” or the “Company,” is a self-managed and self-administered real estate investment trust that owns hotel properties. We conduct our operations as an umbrella partnership REIT through an operating partnership, Host Hotels & Resorts, L.P. (“Host LP”), of which we are the sole general partner. When distinguishing between Host Inc. and Host LP, the primary difference is approximately 1% of the partnership interests in Host LP held by outside partners as of June 30, 2020, which is non-controlling interests in Host LP in our consolidated balance sheets and is included in net (income) loss 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.

2020 OPERATING RESULTS

  

PAGE NO.

 

Condensed Consolidated Balance Sheets (unaudited)

     June 30, 2020 and December 31, 2019

  

7

 

Condensed Consolidated Statements of Operations (unaudited)

     Quarter and Year-to-date Ended June 30, 2020 and 2019

  

8

 

Earnings (Loss) per Common Share (unaudited)

     Quarter and Year-to-date Ended June 30, 2020 and 2019

  

9

 

Hotel Operating Data

  

 

     Hotel Operating Data for Consolidated Hotels (by Location)

  

10

 

 

 

Schedule of All Owned Hotel Pro Forma Results

 

11

 

Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre

  

12

 

Reconciliation of Diluted Earnings (Loss) per Common Share to NAREIT and Adjusted Funds From Operations per Diluted Share

  

13

 

Notes to Financial Information

  

14

 

 

 

 

 

 

 


6


HOST HOTELS & RESORTS, INC.

Condensed Consolidated Balance Sheets

(unaudited, in millions, except shares and per share amounts)

    

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

ASSETS

 

Property and equipment, net

 

$

9,613

 

 

$

9,671

 

Right-of-use assets

 

 

595

 

 

 

595

 

Due from managers

 

 

6

 

 

 

63

 

Advances to and investments in affiliates

 

 

38

 

 

 

56

 

Furniture, fixtures and equipment replacement fund

 

 

154

 

 

 

176

 

Other

 

 

206

 

 

 

171

 

Cash and cash equivalents

 

 

1,578

 

 

 

1,573

 

Total assets

 

$

12,190

 

 

$

12,305

 

 

 

 

 

 

 

 

 

 

LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY

 

Debt (1)

 

 

 

 

 

 

 

 

Senior notes

 

$

2,778

 

 

$

2,776

 

Credit facility, including the term loans of $997

 

 

1,736

 

 

 

989

 

Other debt

 

 

29

 

 

 

29

 

Total debt

 

 

4,543

 

 

 

3,794

 

Lease liabilities

 

 

607

 

 

 

606

 

Accounts payable and accrued expenses

 

 

68

 

 

 

263

 

Other

 

 

169

 

 

 

175

 

Total liabilities

 

 

5,387

 

 

 

4,838

 

 

 

 

 

 

 

 

 

 

Redeemable non-controlling interests - Host Hotels & Resorts, L.P.

 

 

81

 

 

 

142

 

 

 

 

 

 

 

 

 

 

Host Hotels & Resorts, Inc. stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, par value $.01, 1,050 million shares authorized,

     705.2 million shares and 713.4 million shares issued and outstanding,

     respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

7,586

 

 

 

7,675

 

Accumulated other comprehensive loss

 

 

(74

)

 

 

(56

)

Deficit

 

 

(802

)

 

 

(307

)

Total equity of Host Hotels & Resorts, Inc. stockholders

 

 

6,717

 

 

 

7,319

 

Non-redeemable non-controlling interests—other consolidated partnerships

 

 

5

 

 

 

6

 

Total equity

 

 

6,722

 

 

 

7,325

 

Total liabilities, non-controlling interests and equity

 

$

12,190

 

 

$

12,305

 

___________

 

 

 

 

 

 

 

 

(1)

Please see our Second Quarter 2020 Supplemental Financial Information for more detail on our debt balances and financial covenant ratios under our credit facility and senior notes indentures.   

 

7


HOST HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Operations

(unaudited, in millions, except per share amounts)

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

61

 

 

$

931

 

 

$

687

 

 

$

1,788

 

Food and beverage

 

 

11

 

 

 

449

 

 

 

341

 

 

 

882

 

Other

 

 

31

 

 

 

103

 

 

 

127

 

 

 

203

 

Total revenues

 

 

103

 

 

 

1,483

 

 

 

1,155

 

 

 

2,873

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

43

 

 

 

226

 

 

 

230

 

 

 

443

 

Food and beverage

 

 

39

 

 

 

290

 

 

 

284

 

 

 

575

 

Other departmental and support expenses

 

 

113

 

 

 

334

 

 

 

432

 

 

 

661

 

Management fees

 

 

(2

)

 

 

71

 

 

 

28

 

 

 

125

 

Other property-level expenses

 

 

70

 

 

 

91

 

 

 

163

 

 

 

183

 

Depreciation and amortization

 

 

168

 

 

 

166

 

 

 

332

 

 

 

336

 

Corporate and other expenses(1)

 

 

25

 

 

 

25

 

 

 

50

 

 

 

54

 

Total operating costs and expenses

 

 

456

 

 

 

1,203

 

 

 

1,519

 

 

 

2,377

 

Operating profit (loss)

 

 

(353

)

 

 

280

 

 

 

(364

)

 

 

496

 

Interest income

 

 

1

 

 

 

7

 

 

 

7

 

 

 

15

 

Interest expense

 

 

(40

)

 

 

(43

)

 

 

(77

)

 

 

(86

)

Other gains/(losses)

 

 

13

 

 

 

57

 

 

 

12

 

 

 

62

 

Gain on foreign currency transactions and derivatives

 

 

2

 

 

 

1

 

 

 

1

 

 

 

1

 

Equity in earnings (losses) of affiliates

 

 

(25

)

 

 

4

 

 

 

(21

)

 

 

9

 

Income (loss) before income taxes

 

 

(402

)

 

 

306

 

 

 

(442

)

 

 

497

 

Benefit (provision) for income taxes

 

 

46

 

 

 

(16

)

 

 

83

 

 

 

(18

)

Net income (loss)

 

 

(356

)

 

 

290

 

 

 

(359

)

 

 

479

 

Less: Net (income) loss attributable to

     non-controlling interests

 

 

4

 

 

 

(4

)

 

 

4

 

 

 

(7

)

Net income (loss) attributable to Host Inc.

 

$

(352

)

 

$

286

 

 

$

(355

)

 

$

472

 

Basic and diluted earnings (loss) per common share

 

$

(.50

)

 

$

.39

 

 

$

(.50

)

 

$

.64

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Corporate and other expenses include the following items:

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

General and administrative costs

 

$

21

 

 

$

22

 

 

$

43

 

 

$

47

 

Non-cash stock-based compensation expense

 

 

4

 

 

 

3

 

 

 

7

 

 

 

7

 

       Total

 

$

25

 

 

$

25

 

 

$

50

 

 

$

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          


8


HOST HOTELS & RESORTS, INC.

Earnings (Loss) per Common Share

(unaudited, in millions, except per share amounts)

 

 

 

Quarter ended

June 30,

 

 

Year-to-date ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income (loss)

 

$

(356

)

 

$

290

 

 

$

(359

)

 

$

479

 

Less: Net (income) loss attributable to non-controlling interests

 

 

4

 

 

 

(4

)

 

 

4

 

 

 

(7

)

Net income (loss) attributable to Host Inc.

 

$

(352

)

 

$

286

 

 

$

(355

)

 

$

472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

705.1

 

 

 

739.1

 

 

 

706.7

 

 

 

739.9

 

Assuming distribution of common shares granted under the

     comprehensive stock plans, less shares assumed

     purchased at market

 

 

 

 

 

.3

 

 

 

 

 

 

.3

 

Diluted weighted average shares outstanding (1)

 

 

705.1

 

 

 

739.4

 

 

 

706.7

 

 

 

740.2

 

Basic and diluted earnings (loss) per common share

 

$

(.50

)

 

$

.39

 

 

$

(.50

)

 

$

.64

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Dilutive securities may include shares granted under comprehensive stock plans, preferred operating partnership units (“OP Units”) held by minority partners and other non-controlling interests that have the option to convert their limited partnership interests to common OP Units. No effect is shown for any securities that were anti-dilutive for the period.  

 

 

 

 

 

  

 

 

 


9


HOST HOTELS & RESORTS, INC.

Hotel Operating Data for Consolidated Hotels (1)(2)

All Owned Hotels (pro forma) by Location in Constant US$

 

 

 

As of June 30, 2020

 

 

Quarter ended June 30, 2020

 

 

Quarter ended June 30, 2019

 

 

 

 

 

 

 

 

 

Location

 

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

Florida Gulf Coast

 

 

5

 

 

 

1,842

 

 

$

278.24

 

 

 

17.7

%

 

$

49.11

 

 

$

87.12

 

 

$

313.53

 

 

 

73.9

%

 

$

231.56

 

 

$

471.22

 

 

 

(78.8

)%

 

 

(81.5

)%

Maui/Oahu

 

 

4

 

 

 

1,983

 

 

 

75.47

 

 

 

3.7

 

 

 

2.77

 

 

 

5.82

 

 

 

384.31

 

 

 

92.3

 

 

 

354.62

 

 

 

563.56

 

 

 

(99.2

)

 

 

(99.0

)

Jacksonville

 

 

1

 

 

 

446

 

 

 

469.00

 

 

 

28.1

 

 

 

131.95

 

 

 

219.50

 

 

 

414.11

 

 

 

84.1

 

 

 

348.40

 

 

 

753.61

 

 

 

(62.1

)

 

 

(70.9

)

Miami

 

 

3

 

 

 

1,276

 

 

 

276.13

 

 

 

8.3

 

 

 

22.86

 

 

 

39.35

 

 

 

299.54

 

 

 

80.6

 

 

 

241.56

 

 

 

390.25

 

 

 

(90.5

)

 

 

(89.9

)

Phoenix

 

 

3

 

 

 

1,654

 

 

 

185.02

 

 

 

6.8

 

 

 

12.58

 

 

 

53.48

 

 

 

277.88

 

 

 

74.6

 

 

 

207.40

 

 

 

488.38

 

 

 

(93.9

)

 

 

(89.0

)

San Francisco/San Jose

 

 

7

 

 

 

4,528

 

 

 

175.74

 

 

 

4.2

 

 

 

7.43

 

 

 

14.51

 

 

 

267.87

 

 

 

82.7

 

 

 

221.55

 

 

 

313.95

 

 

 

(96.6

)

 

 

(95.4

)

Los Angeles

 

 

4

 

 

 

1,726

 

 

 

207.67

 

 

 

9.9

 

 

 

20.48

 

 

 

28.05

 

 

 

228.49

 

 

 

89.1

 

 

 

203.54

 

 

 

300.39

 

 

 

(89.9

)

 

 

(90.7

)

New York

 

 

3

 

 

 

4,261

 

 

 

134.19

 

 

 

30.2

 

 

 

40.47

 

 

 

43.18

 

 

 

292.59

 

 

 

84.9

 

 

 

248.42

 

 

 

378.93

 

 

 

(83.7

)

 

 

(88.6

)

San Diego

 

 

3

 

 

 

3,288

 

 

 

181.47

 

 

 

2.5

 

 

 

4.57

 

 

 

17.07

 

 

 

257.34

 

 

 

83.0

 

 

 

213.66

 

 

 

394.65

 

 

 

(97.9

)

 

 

(95.7

)

Atlanta

 

 

4

 

 

 

1,682

 

 

 

138.09

 

 

 

9.6

 

 

 

13.23

 

 

 

18.55

 

 

 

188.81

 

 

 

76.7

 

 

 

144.87

 

 

 

232.21

 

 

 

(90.9

)

 

 

(92.0

)

Washington, D.C. (CBD)

 

 

5

 

 

 

3,238

 

 

 

221.94

 

 

 

4.6

 

 

 

10.14

 

 

 

10.76

 

 

 

278.76

 

 

 

91.5

 

 

 

255.04

 

 

 

367.23

 

 

 

(96.0

)

 

 

(97.1

)

New Orleans

 

 

1

 

 

 

1,333

 

 

 

N/M

 

 

 

0.0

 

 

 

0.29

 

 

 

1.94

 

 

 

196.98

 

 

 

81.0

 

 

 

159.65

 

 

 

233.90

 

 

 

(99.8

)

 

 

(99.2

)

Orange County

 

 

2

 

 

 

925

 

 

 

163.08

 

 

 

7.4

 

 

 

12.01

 

 

 

18.18

 

 

 

189.11

 

 

 

79.5

 

 

 

150.28

 

 

 

251.79

 

 

 

(92.0

)

 

 

(92.8

)

Orlando