Host Hotels & Resorts, Inc. Reports Results for First Quarter 2021
Host Hotels & Resorts (HST) reported Q1 2021 results, revealing a net loss of $153 million. Despite this, the company achieved positive hotel-level EBITDA for the first time since the pandemic began. Revenues fell by 62.1% year-over-year, totaling $399 million. Significant acquisitions included the Four Seasons Resort Orlando for $610 million, enhancing its portfolio in prime locations. The company ended the quarter with $2.1 billion in available liquidity and completed renovations at several properties. Management expressed optimism about recovery, driven by increased leisure travel.
- Returned to profitability at the hotel level with positive All Owned Hotel Pro Forma EBITDA of $21 million.
- Acquired Four Seasons Resort Orlando and Hyatt Regency Austin for a total of $771 million, enhancing growth prospects.
- Ended the quarter with strong liquidity of approximately $2.1 billion.
- Reported a GAAP net loss of $153 million, a significant decline compared to previous periods.
- Total revenues fell 62.1% compared to Q1 2020, indicating ongoing challenges in the hospitality sector.
- Average occupancy was 34.1%, down from 81.4% in March 2019.
Returns to Profitability at the Hotel-Level; Acquires the Four Seasons Resort Orlando at Walt Disney World® Resort
BETHESDA, Md., May 04, 2021 (GLOBE NEWSWIRE) -- Host Hotels & Resorts, Inc. (NASDAQ: HST) (the “Company”), the nation’s largest lodging real estate investment trust (“REIT”), today announced results for first quarter 2021.
Operating Results
(unaudited, in millions, except per share and hotel statistics)
| Quarter ended March 31, | Percent Change | Percent Change | ||||||||||||
| 2021 | 2020 | vs. Q1 2020 | vs. Q1 2019(2) | |||||||||||
| Revenues | $ | 399 | $ | 1,052 | (62.1 | )% | (71.3 | )% | ||||||
| All owned hotel revenues (pro forma) (1) | 401 | 1,053 | (61.9 | )% | (69.5 | )% | ||||||||
| All owned hotel (pro forma) Total RevPAR - Constant US$ | 94.98 | 247.53 | (61.6 | )% | (69.6 | )% | ||||||||
| All owned hotel (pro forma) RevPAR - Constant US$ | 61.43 | 147.56 | (58.4 | )% | (68.1 | )% | ||||||||
| Quarter ended March 31, | Percent | |||||||||||||
| 2021 | 2020 | Change | ||||||||||||
| Net loss | $ | (153 | ) | $ | (3 | ) | (5000.0 | )% | ||||||
| EBITDAre (1) | 5 | 164 | (97.0 | )% | ||||||||||
| Adjusted EBITDAre (1) | 3 | 164 | (98.2 | )% | ||||||||||
| Diluted loss per common share | (0.22 | ) | — | N/M | ||||||||||
| NAREIT FFO per diluted share (1) | 0.01 | 0.23 | (95.7 | )% | ||||||||||
| Adjusted FFO per diluted share (1) | 0.01 | 0.23 | (95.7 | )% | ||||||||||
| * | Additional detail on the Company’s results, including data for 21 domestic markets, is available in the First Quarter 2021 Supplemental Financial Information available on the Company’s website at www.hosthotels.com. |
James F. Risoleo, President and Chief Executive Officer, said, “We significantly exceeded our expectations in the first quarter, and returned to profitability at the hotel level for the first time since the onset of the pandemic. As a result, for the quarter, while we recorded a GAAP net loss, we delivered positive Adjusted EBITDAre. As vaccine deployment accelerated and lockdowns eased across the nation, our portfolio continued to gather revenue momentum through February and inflected sharply upward in March, with Spring break travel driving high-rated leisure demand to our luxury resorts in the Sunbelt and other key leisure destinations.”
Risoleo continued, “With the lodging recovery underway, we are pleased to have completed the acquisitions of the Hyatt Regency Austin and Four Seasons Resort Orlando at Walt Disney World® Resort for a total of
Highlights:
Results for First Quarter 2021
- Recorded a GAAP net loss of
$153 million in the first quarter of 2021, compared to a net loss of$66 million in the fourth quarter of 2020, which benefited from a$195 million gain on sale of assets. - Achieved positive All Owned Hotel Pro Forma EBITDA of
$21 million in the first quarter of 2021, due to a sequential improvement in RevPAR and operations. This included break-even or positive hotel-level operating profit at 30 of the Company’s hotels, representing30% of rooms, an increase from 20 hotels, representing24% of rooms, achieved in the fourth quarter of 2020. - Acquired the fee-simple interest in the 448-room Hyatt Regency Austin for
$161 million . - Ended the quarter with total available liquidity of approximately
$2.1 billion , including FF&E escrow reserves of$131 million .
Subsequent Events
- Acquired the fee simple interest in the 444-room Four Seasons Resort Orlando at Walt Disney World® Resort for approximately
$610 million in cash. Located within Walt Disney World® Resort, one of the most visited destination resorts in the world, the resort features 55,000 square feet of meeting space, six food and beverage outlets, five pools, three tennis courts, a 13,000 square foot spa, an 18-hole golf course and club, and a five-acre family-oriented water park. - Acquired the Royal Ka’anapali and Ka’anapali Kai Golf Courses for
$28 million . Featuring two 18-hole golf courses over 296 acres, these assets are expected to generate synergies with the adjacent Hyatt Regency Maui Resort & Spa and provide opportunities for future value enhancements. - Completed the development of additional villas at the Andaz Maui at Wailea Resort. The 19 two-bedroom luxury villas are already booked at
45% occupancy with an average rate of$1,700 for the remainder of 2021. - April RevPAR is expected to slightly exceed March RevPAR.
Operating Activities Cash and Cash Burn
Significant components of the Company’s total cash burn are (in millions):
| Quarter ended March 31, 2021 | Quarter ended December 31, 2020 | ||||||
| Net loss | $ | (153 | ) | $ | (66 | ) | |
| GAAP net cash used in operating activities | (49 | ) | (143 | ) | |||
| Cash burn excluding capital expenditures | (45 | ) | (149 | ) | |||
| Cash burn (3) | (138 | ) | (264 | ) | |||
| Components of cash burn: | |||||||
| All Owned Hotel Pro Forma EBITDA (3) | 21 | (62 | ) | ||||
| Benefits for furloughed employees adjustment | (12 | ) | (13 | ) | |||
| Interest payments (4) | (35 | ) | (50 | ) | |||
| Cash corporate and other expenses | (19 | ) | (12 | ) | |||
| Net proceeds from (payments to) unconsolidated operations | (2 | ) | 9 | ||||
| Severance (expense) reversal at hotel properties | 2 | (21 | ) | ||||
| Cash burn excluding capital expenditures | (45 | ) | (149 | ) | |||
| Capital expenditures | (93 | ) | (115 | ) | |||
Operating Results
Due to low occupancy levels and/or state mandates, operations remain suspended at three hotels in the Company’s portfolio as of May 4, 2021. The Company has provided a complete list of these suspended hotels on page 30 of its First Quarter 2021 Supplemental Financial Information available on the Company’s website at www.hosthotels.com.
The following presents the monthly pro forma hotel operating results for the full portfolio compared to 2020 and 2019 for the periods presented(5):
| January 2021 | January 2020 | Change | February 2021 | February 2020 | Change | March 2021 | March 2020 | Change | |||||||||||||||||||||||||||
| Number of hotels | 81 | 80 | 81 | 80 | 81 | 80 | |||||||||||||||||||||||||||||
| Number of rooms | 46,755 | 46,590 | 46,755 | 46,590 | 46,755 | 46,590 | |||||||||||||||||||||||||||||
| Average Occupancy Percentage | 19.6 | % | 71.5 | % | (51.9 | pts) | 26.0 | % | 77.2 | % | (51.2 | pts) | 34.1 | % | 29.3 | % | 4.8 | pts | |||||||||||||||||
| Average Room Rate | $ | 212.60 | $ | 244.43 | (13.0 | )% | $ | 223.28 | $ | 254.08 | (12.1 | )% | $ | 246.32 | $ | 255.05 | (3.4 | )% | |||||||||||||||||
| RevPAR | $ | 41.68 | $ | 174.85 | (76.2 | )% | $ | 58.15 | $ | 196.19 | (70.4 | )% | $ | 84.10 | $ | 74.77 | 12.5 | % | |||||||||||||||||
| January 2021 | January 2019 | Change | February 2021 | February 2019 | Change | March 2021 | March 2019 | Change | |||||||||||||||||||||||||||
| Number of hotels | 81 | 80 | 81 | 80 | 81 | 80 | |||||||||||||||||||||||||||||
| Number of rooms | 46,755 | 46,590 | 46,755 | 46,590 | 46,755 | 46,590 | |||||||||||||||||||||||||||||
| Average Occupancy Percentage | 19.6 | % | 69.5 | % | (49.9 | pts) | 26.0 | % | 77.0 | % | (51.0 | pts) | 34.1 | % | 81.4 | % | (47.3 | pts) | |||||||||||||||||
| Average Room Rate | $ | 212.60 | $ | 242.57 | (12.4 | )% | $ | 223.28 | $ | 253.11 | (11.8 | )% | $ | 246.32 | $ | 263.48 | (6.5 | )% | |||||||||||||||||
| RevPAR | $ | 41.68 | $ | 168.56 | (75.3 | )% | $ | 58.15 | $ | 194.82 | (70.2 | )% | $ | 84.10 | $ | 214.36 | (60.8 | )% | |||||||||||||||||
First Quarter 2021 Revenue Performance
- All Owned Hotel Pro Forma RevPAR declined
68.1% compared to the first quarter of 2019 and improved61% compared to the fourth quarter of 2020. The sequential improvement was primarily due to strong leisure demand for resorts and hotels located in the Company’s Sunbelt markets and Hawaii.- Average room rates declined by just
9% compared to the first quarter of 2019 and improved by18% compared to the fourth quarter of 2020. - Average occupancy declined by 49.3 percentage points compared to the first quarter of 2019 and improved seven percentage points compared to the fourth quarter of 2020.
- Average room rates declined by just
Hotel Operating Expense Performance
- First Quarter 2021
- Portfolio-wide hotel operating costs, excluding severance, were nearly
60% lower compared to the first quarter of 2019, and only15% higher compared to the fourth quarter of 2020, despite an approximately50% increase in total revenues quarter over quarter. - Due to the stronger than expected demand surge in March, the ramp up of staffing at several properties was unable to keep pace. The Company expects hotel operating costs to increase more in line with total revenues as hotels transition from their contingency level operational plans to increasing staffing levels and controllable spending.
- Furloughed employees received healthcare benefits of approximately
$12 million that were accrued in the fourth quarter of 2020. - In addition, the Company’s hotel operators recorded a
$7 million credit related to the Employee Retention Credit in the first quarter, that, under the CARES Act, partially offset the costs for the operator’s furloughed hotel employees and reduced hotel-level operating expenses.
- Portfolio-wide hotel operating costs, excluding severance, were nearly
- Operating Expense Trends
- Benefit costs for furloughed employees during the second and third quarter of 2021 are not expected to have a significant impact on results as they will be eligible to be reimbursed through the American Rescue Plan Act.
- Re-introduction of marketing, maintenance and other support costs are expected to increase other departmental and support expenses as the recovery continues to gain momentum.
Hotel Business Mix Update
The Company’s customers fall into three broad groups: transient, group and contract business, which accounted for approximately
During the first quarter, demand continued to be primarily driven by leisure demand at drive-to and resort destinations. The following are the sequential results of the Company’s consolidated portfolio, including all owned hotels at March 31, 2021, for transient, group and contract business in comparison to 2019 performance:
| Quarter ended March 31, 2021 | Quarter ended December 31, 2020 | ||||||||||||||||||||||
| Transient | Group | Contract | Transient | Group | Contract | ||||||||||||||||||
| Room nights (in thousands) | 767 | 264 | 89 | 595 | 157 | 87 | |||||||||||||||||
| Percentage change in room nights vs same period in 2019 | (56.4 | )% | (79.2 | )% | (43.0 | )% | (70.0 | )% | (86.1 | )% | (44.7 | )% | |||||||||||
| Room Revenues (in millions) | $ | 205 | $ | 41 | $ | 13 | $ | 128 | $ | 24 | $ | 12 | |||||||||||
| Percentage change in revenues vs.same period in 2019 | (55.3 | )% | (87.0 | )% | (62.1 | )% | (74.9 | )% | (91.0 | )% | (62.8 | )% | |||||||||||
Capital Expenditures
The following presents the Company’s 2021 capital expenditures spend and forecast for full year 2021 (in millions):
| Quarter ended March 31, 2021 | 2021 Full Year Forecast | |||||||
| Actuals | Low-end of range | High-end of range | ||||||
| ROI - Marriott transformational capital program | $ | 28 | $ | 110 | $ | 140 | ||
| ROI - All other ROI projects | 33 | 165 | 185 | |||||
| Total ROI project spend | 61 | 275 | 325 | |||||
| Renewals and Replacements | 32 | 100 | 150 | |||||
| Total Capital Expenditures | $ | 93 | $ | 375 | $ | 475 | ||
The Company is utilizing the low occupancy environment to accelerate certain projects and minimize future disruption and believes the renovations will position these hotels to capture additional revenue during the economic recovery. The Company recently completed The Ritz-Carlton, Amelia Island renovation as part of the Marriott transformational capital program, bringing the total number of completed properties to eight, and is on track to complete
Balance Sheet
The Company maintains a robust balance sheet that had the following balances at March 31, 2021:
- Total assets of
$12.7 billion . - Total available liquidity of approximately
$2.1 billion , including FF&E escrow reserves of$131 million . - Debt balance of
$5.5 billion , with an average maturity of 4.7 years, an average interest rate of3.0% , and no maturities until 2023.
Following the property transactions completed subsequent to quarter end, the Company’s adjusted total available liquidity was approximately
As the Company’s prior “at-the-market” offering program for shares of common stock has expired, the Company intends to enter into a distribution agreement after filing its quarterly report with the SEC by which the Company may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to
On February 9, 2021, the Company amended its credit facility for the second time during the pandemic to further extend the covenant waiver period through the first quarter of 2022. Financial covenant testing will resume for the second quarter of 2022, based on annualized results for the quarter, but only a fixed charge coverage ratio of 1.0x will be required for the second quarter of 2022. For subsequent quarters, all financial covenants will be tested, with the leverage ratio tested at the modified levels agreed to in the second amendment. Quarterly dividends and stock repurchases also remain suspended to help preserve liquidity and are restricted under the terms of the credit facility amendments.
2021 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 guidance for its operations or fully estimate the effect of COVID-19 and the current U.S. vaccination deployment on its operations.
The Company believes that recovery within the lodging industry will be driven by increased confidence that the risks associated with travelling and contracting COVID-19 have been significantly reduced through vaccine deployment and the lifting of government restrictions.
While the Company is not providing guidance on operations at this time, it estimates that for full year 2021, interest expense and corporate and other expenses will be in the following ranges (in millions):
| Full Year 2021 | |||||||
| Low end of range | High end of range | ||||||
| Interest expense | $ | 170 | $ | 180 | |||
| Corporate and other expenses | 98 | 100 | |||||
The Company does not intend to provide further guidance 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 77 properties in the United States and five properties internationally totaling approximately 47,200 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 or the size of gatherings; the impact of the 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 develop new properties and the risks that acquisitions and new developments may not perform in accordance with our expectations; our ability to continue to satisfy complex rules in order for us to remain a REIT for federal income tax purposes; risks associated with our ability to effectuate our dividend policy, including factors such as operating results and the economic outlook influencing our board’s decision whether to pay further dividends at levels previously disclosed or to use available cash to make special dividends; and other risks and uncertainties associated with our business described in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of May 4, 2021 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. |
___________
| (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. |
| (2) | Presentation includes comparisons to 2019 operating results so investors can better understand the trajectory and timing of any recovery from the COVID-19 impacts on hotel operations. |
| N/M = Not Meaningful | |
| (3) | All Owned Hotel pro forma EBITDA and cash burn are non-GAAP financial measures within the meaning of the rules of the 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. All Owned Hotel Pro Forma EBITDA includes an Employee Retention Credit in the first quarter of 2021 and the fourth quarter of 2020 of |
| (4) | Interest payments for the fourth quarter 2020 do not include cash debt extinguishment costs of |
| (5) | The AC Hotel Scottsdale North is a new development hotel that opened in January 2021. Therefore, there were no operations for the hotel prior to January 2021 and no adjustments made for pro forma results of the hotel for periods prior to its opening. |
*** Tables to Follow ***
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
HOST HOTELS & RESORTS, INC.
Condensed Consolidated Balance Sheets
(unaudited, in millions, except shares and per share amounts)
| March 31, 2021 | December 31, 2020 | ||||||
| ASSETS | |||||||
| Property and equipment, net | $ | 9,506 | $ | 9,416 | |||
| Right-of-use assets | 596 | 597 | |||||
| Due from managers | 26 | 22 | |||||
| Advances to and investments in affiliates | 34 | 21 | |||||
| Furniture, fixtures and equipment replacement fund | 131 | 139 | |||||
| Other | 420 | 360 | |||||
| Cash and cash equivalents | 2,008 | 2,335 | |||||
| Total assets | $ | 12,721 | $ | 12,890 | |||
| LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY | |||||||
| Debt (1) | |||||||
| Senior notes | $ | 3,066 | $ | 3,065 | |||
| Credit facility, including the term loans of | 2,469 | 2,471 | |||||
| Other debt | 5 | 5 | |||||
| Total debt | 5,540 | 5,541 | |||||
| Lease liabilities | 609 | 610 | |||||
| Accounts payable and accrued expenses | 76 | 71 | |||||
| Due to managers | 56 | 64 | |||||
| Other | 166 | 170 | |||||
| Total liabilities | 6,447 | 6,456 | |||||
| Redeemable non-controlling interests - Host Hotels & Resorts, L.P. | 124 | 108 | |||||
| Host Hotels & Resorts, Inc. stockholders’ equity: | |||||||
| Common stock, par value $.01, 1,050 million shares authorized, 706.1 million shares and 705.4 million shares issued and outstanding, respectively | 7 | 7 | |||||
| Additional paid-in capital | 7,547 | 7,568 | |||||
| Accumulated other comprehensive loss | (77 | ) | (74 | ) | |||
| Deficit | (1,332 | ) | (1,180 | ) | |||
| Total equity of Host Hotels & Resorts, Inc. stockholders | 6,145 | 6,321 | |||||
| Non-redeemable non-controlling interests—other consolidated partnerships | 5 | 5 | |||||
| Total equity | 6,150 | 6,326 | |||||
| Total liabilities, non-controlling interests and equity | $ | 12,721 | $ | 12,890 | |||
___________
| (1) | Please see our First Quarter 2021 Supplemental Financial Information for more detail on our debt balances and financial covenant ratios under our credit facility and senior notes indentures. |
HOST HOTELS & RESORTS, INC.
Condensed Consolidated Statements of Operations
(unaudited, in millions, except per share amounts)
| Quarter ended March 31, | |||||||
| 2021 | 2020 | ||||||
| Revenues | |||||||
| Rooms | $ | 257 | $ | 626 | |||
| Food and beverage | 77 | 330 | |||||
| Other | 65 | 96 | |||||
| Total revenues | 399 | 1,052 | |||||
| Expenses | |||||||
| Rooms | 65 | 187 | |||||
| Food and beverage | 62 | 245 | |||||
| Other departmental and support expenses | 160 | 319 | |||||
| Management fees | 11 | 30 | |||||
| Other property-level expenses | 78 | 93 | |||||
| Depreciation and amortization | 165 | 164 | |||||
| Corporate and other expenses(1) | 24 | 25 | |||||
| Total operating costs and expenses | 565 | 1,063 | |||||
| Operating loss | (166 | ) | (11 | ) | |||
| Interest income | 1 | 6 | |||||
| Interest expense | (42 | ) | (37 | ) | |||
| Other losses | (1 | ) | (2 | ) | |||
| Equity in earnings of affiliates | 9 | 4 | |||||
| Loss before income taxes | (199 | ) | (40 | ) | |||
| Benefit for income taxes (2) | 46 | 37 | |||||
| Net loss | (153 | ) | (3 | ) | |||
| Less: Net loss attributable to non-controlling interests | 1 | — | |||||
| Net loss attributable to Host Inc. | $ | (152 | ) | $ | (3 | ) | |
| Basic and diluted loss per common share | $ | (.22 | ) | $ | — | ||
___________
| (1) | Corporate and other expenses include the following items: |
| Quarter ended March 31, | |||||
| 2021 | 2020 | ||||
| General and administrative costs | $ | 20 | $ | 22 | |
| Non-cash stock-based compensation expense | 4 | 3 | |||
| Total | $ | 24 | $ | 25 | |
| (2) | We recorded an income tax benefit in first quarter of 2021 and in 2020 to reflect net operating losses incurred that, as a result of legislation enacted by the CARES Act, may be carried back up to five years in order to procure a refund of U.S. federal corporate income taxes previously paid. Any net operating loss not carried back pursuant to these rules may be carried forward indefinitely, subject to an annual limit on the use thereof of |
HOST HOTELS & RESORTS, INC.
Earnings (Loss) per Common Share
(unaudited, in millions, except per share amounts)
| Quarter ended March 31, | |||||||
| 2021 | 2020 | ||||||
| Net loss | $ | (153 | ) | $ | (3 | ) | |
| Less: Net loss attributable to non-controlling interests | 1 | — | |||||
| Net loss attributable to Host Inc. | $ | (152 | ) | $ | (3 | ) | |
| Basic weighted average shares outstanding | 705.6 | 708.1 | |||||
| Diluted weighted average shares outstanding (1) | 705.6 | 708.1 | |||||
| Basic and diluted loss per common share | $ | (.22 | ) | $ | — | ||
___________
| (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)(2)
All Owned Hotels (pro forma) by Location in Constant US$ Compared to 2020
| As of March 31, 2021 | Quarter ended March 31, 2021 | Quarter ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||||||||
| Miami | 3 | 1,276 | $ | 556.36 | 55.6 | % | $ | 309.29 | $ | 470.45 | $ | 443.30 | 70.9 | % | $ | 314.11 | $ | 498.35 | (1.5 | )% | (5.6 | )% | |||||||||||||||||||||
| Florida Gulf Coast | 5 | 1,842 | 521.91 | 52.8 | 275.67 | 489.52 | 430.81 | 70.8 | 305.01 | 649.38 | (9.6 | ) | (24.6 | ) | |||||||||||||||||||||||||||||
| Phoenix | 4 | 1,819 | 355.31 | 49.9 | 177.15 | 335.19 | 369.52 | 67.1 | 248.11 | 552.93 | (28.6 | ) | (39.4 | ) | |||||||||||||||||||||||||||||
| Jacksonville | 1 | 446 | 484.86 | 35.5 | 171.97 | 345.82 | 363.41 | 57.0 | 207.28 | 466.16 | (17.0 | ) | (25.8 | ) | |||||||||||||||||||||||||||||
| Maui/Oahu | 4 | 1,987 | 404.89 | 40.0 | 162.15 | 243.26 | 469.81 | 74.5 | 350.05 | 513.46 | (53.7 | ) | (52.6 | ) | |||||||||||||||||||||||||||||
| Washington, D.C. (CBD) | 5 | 3,238 | 152.00 | 49.3 | 74.98 | 78.49 | 230.32 | 54.0 | 124.28 | 183.71 | (39.7 | ) | (57.3 | ) | |||||||||||||||||||||||||||||
| Houston | 4 | 1,716 | 125.89 | 50.9 | 64.05 | 86.95 | 175.23 | 61.3 | 107.38 | 162.63 | (40.4 | ) | (46.5 | ) | |||||||||||||||||||||||||||||
| Atlanta | 4 | 1,682 | 155.54 | 37.7 | 58.57 | 75.06 | 192.55 | 63.1 | 121.49 | 196.11 | (51.8 | ) | (61.7 | ) | |||||||||||||||||||||||||||||
| Philadelphia | 2 | 810 | 135.04 | 36.9 | 49.89 | 70.10 | 173.70 | 62.8 | 109.04 | 180.62 | (54.2 | ) | (61.2 | ) | |||||||||||||||||||||||||||||
| Northern Virginia | 3 | 1,252 | 150.57 | 29.5 | 44.45 | 63.28 | 206.66 | 52.7 | 108.90 | 180.68 | (59.2 | ) | (65.0 | ) | |||||||||||||||||||||||||||||
| San Antonio/Austin | 3 | 1,960 | 128.07 | 31.5 | 40.35 | 57.23 | 196.60 | 47.7 | 93.85 | 157.07 | (57.0 | ) | (63.6 | ) | |||||||||||||||||||||||||||||
| Los Angeles/Orange County | 5 | 2,119 | 158.07 | 24.3 | 38.41 | 50.27 | 213.01 | 67.4 | 143.52 | 215.71 | (73.2 | ) | (76.7 | ) | |||||||||||||||||||||||||||||
| San Diego | 3 | 3,288 | 156.29 | 17.1 | 26.69 | 48.42 | 244.32 | 61.2 | 149.44 | 291.18 | (82.1 | ) | (83.4 | ) | |||||||||||||||||||||||||||||
| New York | 3 | 4,261 | 142.98 | 15.9 | 22.78 | 29.16 | 220.61 | 56.1 | 123.75 | 197.15 | (81.6 | ) | (85.2 | ) | |||||||||||||||||||||||||||||
| Orlando | 1 | 2,004 | 151.40 | 13.2 | 19.95 | 52.40 | 215.31 | 57.1 | 123.02 | 288.47 | (83.8 | ) | (81.8 | ) | |||||||||||||||||||||||||||||
| Denver | 3 | 1,340 | 112.49 | 17.2 | 19.34 | 23.70 | 161.52 | 50.1 | 80.92 | 125.09 | (76.1 | ) | (81.1 | ) | |||||||||||||||||||||||||||||
| Chicago | 4 | 1,816 | 115.21 | 16.2 | 18.62 | 22.77 | 142.48 | 47.5 | 67.69 | 95.61 | (72.5 | ) | (76.2 | ) | |||||||||||||||||||||||||||||
| San Francisco/San Jose | 7 | 4,528 | 136.44 | 13.3 | 18.10 | 23.78 | 295.37 | 59.3 | 175.08 | 254.37 | (89.7 | ) | (90.7 | ) | |||||||||||||||||||||||||||||
| New Orleans | 1 | 1,333 | 107.71 | 13.3 | 14.30 | 27.41 | 202.36 | 65.3 | 132.09 | 197.80 | (89.2 | ) | (86.1 | ) | |||||||||||||||||||||||||||||
| Seattle | 2 | 1,315 | 149.63 | 7.2 | 10.84 | 14.53 | 193.42 | 54.0 | 104.51 | 149.34 | (89.6 | ) | (90.3 | ) | |||||||||||||||||||||||||||||
| Boston | 3 | 2,715 | 117.71 | 8.0 | 9.40 | 12.14 | 177.13 | 53.0 | 93.85 | 141.90 | (90.0 | ) | (91.4 | ) | |||||||||||||||||||||||||||||
| Other | 6 | 2,509 | 135.81 | 27.2 | 36.96 | 47.96 | 166.44 | 57.3 | 95.36 | 134.38 | (61.2 | ) | (64.3 | ) | |||||||||||||||||||||||||||||
| Domestic | 76 | 45,256 | 233.01 | 27.1 | 63.08 | 97.61 | 253.75 | 59.1 | 150.09 | 252.30 | (58.0 | ) | (61.3 | ) | |||||||||||||||||||||||||||||
| International | 5 | 1,499 | 89.36 | 13.0 | 11.62 | 15.46 | 133.47 | 53.3 | 71.18 | 104.05 | (83.7 | ) | (85.1 | ) | |||||||||||||||||||||||||||||
| All Locations - Constant US$ | 81 | 46,755 | 230.76 | 26.6 | 61.43 | 94.98 | 250.26 | 59.0 | 147.56 | 247.53 | (58.4 | ) | (61.6 | ) | |||||||||||||||||||||||||||||
All Owned Hotels (pro forma) in Nominal US$ Compared to 2020
| As of March 31, 2021 | Quarter ended March 31, 2021 | Quarter ended March 31, 2020 | |||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||
| International | 5 | 1,499 | $ | 89.36 | 13.0 | % | $ | 11.62 | $ | 15.46 | $ | 138.21 | 53.3 | % | $ | 73.70 | $ | 106.43 | (84.2 | )% | (85.5 | )% | |||||||||||
| Domestic | 76 | 45,256 | 233.01 | 27.1 | 63.08 | 97.61 | 253.75 | 59.1 | 150.09 | 252.30 | (58.0 | ) | (61.3 | ) | |||||||||||||||||||
| All Locations | 81 | 46,755 | 230.76 | 26.6 | 61.43 | 94.98 | 250.40 | 59.0 | 147.64 | 247.61 | (58.4 | ) | (61.6 | ) | |||||||||||||||||||
All Owned Hotels (pro forma) by Location in Constant US$ Compared to 2019
| As of March 31, 2021 | Quarter ended March 31, 2021 | Quarter ended March 31, 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 | |||||||||||||||||||||||||||||||||||||||||||||||
| Miami | 3 | 1,276 | $ | 556.36 | 55.6 | % | $ | 309.29 | $ | 470.45 | $ | 408.86 | 85.9 | % | $ | 351.13 | $ | 522.30 | (11.9 | )% | (9.9 | )% | |||||||||||||||||||||||||||||||||||||||
| Florida Gulf Coast | 5 | 1,842 | 521.91 | 52.8 | 275.67 | 489.52 | 439.30 | 83.1 | 364.98 | 729.85 | (24.5 | ) | (32.9 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Phoenix | 4 | 1,819 | 355.31 | 49.9 | 177.15 | 335.19 | 373.48 | 82.7 | 308.80 | 644.54 | (42.6 | ) | (48.0 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Jacksonville | 1 | 446 | 484.86 | 35.5 | 171.97 | 345.82 | 367.78 | 78.6 | 289.04 | 690.11 | (40.5 | ) | (49.9 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Maui/Oahu | 4 | 1,987 | 404.89 | 40.0 | 162.15 | 243.26 | 437.66 | 89.0 | 389.36 | 584.39 | (58.4 | ) | (58.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Washington, D.C. (CBD) | 5 | 3,238 | 152.00 | 49.3 | 74.98 | 78.49 | 247.89 | 73.3 | 181.79 | 257.64 | (58.8 | ) | (69.5 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Houston | 4 | 1,716 | 125.89 | 50.9 | 64.05 | 86.95 | 182.60 | 75.8 | 138.36 | 201.04 | (53.7 | ) | (56.8 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Atlanta | 4 | 1,682 | 155.54 | 37.7 | 58.57 | 75.06 | 227.57 | 76.7 | 174.60 | 272.88 | (66.5 | ) | (72.5 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Philadelphia | 2 | 810 | 135.04 | 36.9 | 49.89 | 70.10 | 190.16 | 78.1 | 148.48 | 242.24 | (66.4 | ) | (71.1 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Northern Virginia | 3 | 1,252 | 150.57 | 29.5 | 44.45 | 63.28 | 210.16 | 65.7 | 138.09 | 239.65 | (67.8 | ) | (73.6 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio/Austin | 3 | 1,960 | 128.07 | 31.5 | 40.35 | 57.23 | 208.03 | 79.2 | 164.69 | 260.10 | (75.5 | ) | (78.0 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Los Angeles/Orange County | 5 | 2,119 | 158.07 | 24.3 | 38.41 | 50.27 | 219.94 | 84.5 | 185.95 | 279.42 | (79.3 | ) | (82.0 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| San Diego | 3 | 3,288 | 156.29 | 17.1 | 26.69 | 48.42 | 252.91 | 76.9 | 194.59 | 349.55 | (86.3 | ) | (86.1 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| New York | 3 | 4,261 | 142.98 | 15.9 | 22.78 | 29.16 | 236.38 | 72.0 | 170.27 | 267.69 | (86.6 | ) | (89.1 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Orlando | 1 | 2,004 | 151.40 | 13.2 | 19.95 | 52.40 | 208.20 | 79.0 | 164.41 | 385.22 | (87.9 | ) | (86.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Denver | 3 | 1,340 | 112.49 | 17.2 | 19.34 | 23.70 | 161.82 | 64.7 | 104.75 | 158.27 | (81.5 | ) | (85.0 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Chicago | 4 | 1,816 | 115.21 | 16.2 | 18.62 | 22.77 | 148.27 | 60.4 | 89.50 | 128.94 | (79.2 | ) | (82.3 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco/San Jose | 7 | 4,528 | 136.44 | 13.3 | 18.10 | 23.78 | 305.80 | 77.3 | 236.51 | 330.84 | (92.3 | ) | (92.8 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| New Orleans | 1 | 1,333 | 107.71 | 13.3 | 14.30 | 27.41 | 209.79 | 81.6 | 171.18 | 249.87 | (91.6 | ) | (89.0 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Seattle | 2 | 1,315 | 149.63 | 7.2 | 10.84 | 14.53 | 194.12 | 77.4 | 150.15 | 203.91 | (92.8 | ) | (92.9 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Boston | 3 | 2,715 | 117.71 | 8.0 | 9.40 | 12.14 | 190.33 | 69.4 | 132.03 | 196.44 | (92.9 | ) | (93.8 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 6 | 2,509 | 135.81 | 27.2 | 36.96 | 47.96 | 168.26 | 73.1 | 122.94 | 175.07 | (69.9 | ) | (72.6 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Domestic | 76 | 45,256 | 233.01 | 27.1 | 63.08 | 97.61 | 257.13 | 76.2 | 195.88 | 318.78 | (67.8 | ) | (69.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| International | 5 | 1,499 | 89.36 | 13.0 | 11.62 | 15.46 | 134.63 | 67.6 | 91.07 | 132.89 | (87.2 | ) | (88.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| All Locations - Constant US$ | 81 | 46,755 | 230.76 | 26.6 | 61.43 | 94.98 | 253.61 | 75.9 | 192.51 | 312.80 | (68.1 | ) | (69.6 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
All Owned Hotels (pro forma) in Nominal US$ Compared to 2019
| As of March 31, 2021 | Quarter ended March 31, 2021 | Quarter ended March 31, 2019 | |||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||
| International | 5 | 1,499 | $ | 89.36 | 13.0 | % | $ | 11.62 | $ | 15.46 | $ | 143.88 | 67.6 | % | $ | 97.32 | $ | 140.81 | (88.1 | )% | (89.0 | )% | |||||||||||
| Domestic | 76 | 45,256 | 233.01 | 27.1 | 63.08 | 97.61 | 257.13 | 76.2 | 195.88 | 318.78 | (67.8 | ) | (69.4 | ) | |||||||||||||||||||
| All Locations | 81 | 46,755 | 230.76 | 26.6 | 61.43 | 94.98 | 253.88 | 75.9 | 192.71 | 313.05 | (68.1 | ) | (69.7 | ) | |||||||||||||||||||
___________
| (1) | To facilitate a quarter-to-quarter comparison of our operations, we typically present certain operating statistics and operating results for the periods included in this presentation on a comparable hotel basis. However, due to the COVID-19 pandemic and its effects on operations there is little comparability between periods. For this reason, we temporarily are revising our presentation to instead present hotel operating results for all consolidated hotels and, to facilitate comparisons between periods, we are presenting results on a pro forma basis including the following adjustments: (1) operating results are presented for all consolidated properties owned as of March 31, 2021 but do not include the results of operations for properties sold through the reporting date; and (2) operating results for acquisitions as of March 31, 2021 are reflected for full calendar years, to include results 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. See the Notes to Financial Information – All Owned Hotel Pro Forma Operating Statistics and Results for further information on these pro forma statistics and – Constant US$ and Nominal US$ for a discussion on constant US$ presentation. Nominal US$ results include the effect of currency fluctuations, consistent with our financial statement presentation. The AC Hotel Scottsdale North is a new development hotel that opened in January 2021. Therefore, there were no operations for the hotel prior to January 2021 and no adjustments made for pro forma results of the hotel for periods prior to its opening. CBD of a location refers to the central business district. |
| (2) | Hotel RevPAR is calculated as room revenues divided by the available room nights. Hotel Total RevPAR is calculated by dividing the sum of rooms, food and beverage and other revenues by the available room nights. |
HOST HOTELS & RESORTS, INC.
Schedule of All Owned Hotel Pro Forma Results (1)
(unaudited, in millions, except hotel statistics)
| Quarter ended March 31, | |||||||||||
| 2021 | 2020 | 2019 | |||||||||
| Number of hotels | 81 | 80 | 80 | ||||||||
| Number of rooms | 46,755 | 46,590 | 46,590 | ||||||||
| Change in hotel Total RevPAR - | |||||||||||
| Constant US$ | (61.6 | )% | — | — | |||||||
| Nominal US$ | (61.6 | )% | — | — | |||||||
| Change in hotel RevPAR - | |||||||||||
| Constant US$ | (58.4 | )% | — | — | |||||||
| Nominal US$ | (58.4 | )% | — | — | |||||||
| Operating profit (loss) margin (2) | (41.6 | )% | (1.0 | )% | 15.5 | % | |||||
| All Owned Hotel Pro Forma EBITDA margin (2) | 5.2 | % | 17.1 | % | 30.0 | % | |||||
| Food and beverage profit margin (2) | 19.5 | % | 25.8 | % | 34.2 | % | |||||
| All Owned Hotel Pro Forma food and beverage profit margin (2) | 19.5 | % | 26.2 | % | 34.3 | % | |||||
| Net income (loss) | $ | (153 | ) | $ | (3 | ) | $ | 189 | |||
| Depreciation and amortization | 165 | 164 | 170 | ||||||||
| Interest expense | 42 | 37 | 43 | ||||||||
| Provision (benefit) for income taxes | (46 | ) | (37 | ) | 2 | ||||||
| Gain on sale of property and corporate level income/expense | 15 | 17 | 11 | ||||||||
| Severance expense (reversal) at hotel properties | (2 | ) | — | — | |||||||
| Pro forma adjustments (3) | — | 2 | (21 | ) | |||||||
| All Owned Hotel Pro Forma EBITDA(4) | $ | 21 | $ | 180 | $ | 394 | |||||
| Quarter ended March 31, 2021 | Quarter ended March 31, 2020 | |||||||||||||||||||||||||||||||
| Adjustments | Adjustments | |||||||||||||||||||||||||||||||
| GAAP Results | Severance at hotel properties | Pro forma adjustments(3) | Depreciation and corporate level items | All Owned Hotel Pro Forma Results (3) | GAAP Results | Pro forma adjustments (3) | Depreciation and corporate level items | All Owned Hotel Pro Forma Results (3) | ||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||
| Room | $ | 257 | $ | — | $ | 2 | $ | — | $ | 259 | $ | 626 | $ | — | $ | — | $ | 626 | ||||||||||||||
| Food and beverage | 77 | — | — | — | 77 | 330 | 2 | — | 332 | |||||||||||||||||||||||
| Other | 65 | — | — | — | 65 | 96 | (1 | ) | — | 95 | ||||||||||||||||||||||
| Total revenues | 399 | — | 2 | — | 401 | 1,052 | 1 | — | 1,053 | |||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||
| Room | 65 | 1 | — | — | 66 | 187 | — | — | 187 | |||||||||||||||||||||||
| Food and beverage | 62 | — | — | — | 62 | 245 | — | — | 245 | |||||||||||||||||||||||
| Other | 249 | 1 | 2 | — | 252 | 442 | (1 | ) | — | 441 | ||||||||||||||||||||||
| Depreciation and amortization | 165 | — | — | (165 | ) | — | 164 | — | (164 | ) | — | |||||||||||||||||||||
| Corporate and other expenses | 24 | — | — | (24 | ) | — | 25 | — | (25 | ) | — | |||||||||||||||||||||
| Total expenses | 565 | 2 | 2 | (189 | ) | 380 | 1,063 | (1 | ) | (189 | ) | 873 | ||||||||||||||||||||
| Operating Profit - All Owned Hotel Pro Forma EBITDA(4) | $ | (166 | ) | $ | (2 | ) | $ | — | $ | 189 | $ | 21 | $ | (11 | ) | $ | 2 | $ | 189 | $ | 180 | |||||||||||
| Quarter ended March 31, 2021 | Quarter ended March 31, 2019 | ||||||||||||||||||||||||||||||
| Adjustments | Adjustments | ||||||||||||||||||||||||||||||
| GAAP Results | Severance at hotel properties | Pro forma adjustments (3) | Depreciation and corporate level items | All Owned Hotel Pro Forma Results (3) | GAAP Results | Pro forma adjustments (3) | Depreciation and corporate level items | All Owned Hotel Pro Forma Results (3) | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||
| Room | $ | 257 | $ | — | $ | 2 | $ | — | $ | 259 | $ | 857 | $ | (49 | ) | $ | — | $ | 808 | ||||||||||||
| Food and beverage | 77 | — | — | — | 77 | 433 | (19 | ) | — | 414 | |||||||||||||||||||||
| Other | 65 | — | — | — | 65 | 100 | (7 | ) | — | 93 | |||||||||||||||||||||
| Total revenues | 399 | — | 2 | — | 401 | 1,390 | (75 | ) | — | 1,315 | |||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||
| Room | 65 | 1 | — | — | 66 | 217 | (14 | ) | — | 203 | |||||||||||||||||||||
| Food and beverage | 62 | — | — | — | 62 | 285 | (13 | ) | — | 272 | |||||||||||||||||||||
| Other | 249 | 1 | 2 | — | 252 | 473 | (27 | ) | — | 446 | |||||||||||||||||||||
| Depreciation and amortization | 165 | — | — | (165 | ) | — | 170 | — | (170 | ) | — | ||||||||||||||||||||
| Corporate and other expenses | 24 | — | — | (24 | ) | — | 29 | — | (29 | ) | — | ||||||||||||||||||||
| Total expenses | 565 | 2 | 2 | (189 | ) | 380 | 1,174 | (54 | ) | (199 | ) | 921 | |||||||||||||||||||
| Operating Profit - All Owned Hotel Pro Forma EBITDA(4) | $ | (166 | ) | $ | (2 | ) | $ | — | $ | 189 | $ | 21 | $ | 216 | $ | (21 | ) | $ | 199 | $ | 394 | ||||||||||
___________
| (1) | See the Notes to Financial Information for a discussion of non-GAAP measures and the calculation of all owned hotel pro forma results, including the limitations on their use. |
| (2) | Profit margins are calculated by dividing the applicable operating profit by the related revenue amount. GAAP profit margins are calculated using amounts presented in the unaudited condensed consolidated statements of operations. Hotel margins are calculated using amounts presented in the above tables. |
| (3) | Pro forma adjustments represent the following items: (i) the elimination of results of operations of our sold hotels, which operations are included in our unaudited condensed consolidated statements of operations as continuing operations and (ii) the addition of results for periods prior to our ownership for hotels acquired as of March 31, 2021. All Owned Hotel Pro Forma results also includes the results of our leased office buildings and other non-hotel revenue and expense items. |
| (4) | All Owned Hotel Pro Forma EBITDA excludes the Four Seasons Resort Orlando at Walt Disney World® Resort, as it was acquired subsequent to quarter end. Additionally, the AC Hotel Scottsdale North is a new development hotel that opened in January 2021. Therefore, there were no operations for the hotel prior to January 2021 and no adjustments made for pro forma results of the hotel for periods prior to its opening. |
HOST HOTELS & RESORTS, INC.
Reconciliation of Net Income (Loss) to
EBITDA, EBITDAre and Adjusted EBITDAre (1)
(unaudited, in millions)
| Quarter ended March 31, | |||||||
| 2021 | 2020 | ||||||
| Net loss | $ | (153 | ) | $ | (3 | ) | |
| Interest expense | 42 | 37 | |||||
| Depreciation and amortization | 165 | 164 | |||||
| Income taxes | (46 | ) | (37 | ) | |||
| EBITDA | 8 | 161 | |||||
| Loss on dispositions | — | 1 | |||||
| Equity investment adjustments: | |||||||
| Equity in earnings of affiliates | (9 | ) | (4 | ) | |||
| Pro rata EBITDAre of equity investments(2) | 6 | 6 | |||||
| EBITDAre | 5 | 164 | |||||
| Adjustments to EBITDAre: | |||||||
| Severance expense (reversal) at hotel properties | (2 | ) | — | ||||
| Adjusted EBITDAre | $ | 3 | $ | 164 | |||
___________
| (1) | See the Notes to Financial Information for discussion of non-GAAP measures. |
| (2) | Unrealized gains of our unconsolidated investments are not recognized in our EBITDAre, Adjusted EBITDAre, NAREIT FFO or Adjusted FFO until they have been realized by the unconsolidated partnership. |
HOST HOTELS & RESORTS, INC.
Reconciliation of Diluted Earnings (Loss) per Common Share to
NAREIT and Adjusted Funds From Operations per Diluted Share (1)
(unaudited, in millions, except per share amounts)
| Quarter ended March 31, | |||||||
| 2021 | 2020 | ||||||
| Net loss | $ | (153 | ) | $ | (3 | ) | |
| Less: Net loss attributable to non-controlling interests | 1 | — | |||||
| Net loss attributable to Host Inc. | (152 | ) | (3 | ) | |||
| Adjustments: | |||||||
| Loss on dispositions | — | 1 | |||||
| Depreciation and amortization | 165 | 164 | |||||
| Equity investment adjustments: | |||||||
| Equity in earnings of affiliates | (9 | ) | (4 | ) | |||
| Pro rata FFO of equity investments(2) | 4 | 4 | |||||
| Consolidated partnership adjustments: | |||||||
| FFO adjustments for non-controlling interests of Host L.P. | (2 | ) | (2 | ) | |||
| NAREIT FFO | 6 | 160 | |||||
| Adjustments to NAREIT FFO: | |||||||
| Severance expense (reversal) at hotel properties | (2 | ) | — | ||||
| Adjusted FFO | $ | 4 | $ | 160 | |||
| For calculation on a per share basis:(3) | |||||||
| Diluted weighted average shares outstanding - EPS | 705.6 | 708.1 | |||||
| Assuming issuance of common shares granted under the comprehensive stock plans | 0.9 | 0.4 | |||||
| Diluted weighted average shares outstanding - NAREIT FFO and Adjusted FFO | 706.5 | 708.5 | |||||
| Diluted loss per common share | $ | (.22 | ) | $ | — | ||
| NAREIT FFO per diluted share | $ | .01 | $ | .23 | |||
| Adjusted FFO per diluted share | $ | .01 | $ | .23 | |||
___________
| (1-2) | Refer to corresponding footnote on the Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre. |
| (3) | Diluted loss per common share, NAREIT FFO per diluted share 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.
Notes to financial Information
All Owned Hotel Pro Forma Operating Statistics and Results
To facilitate a quarter-to-quarter comparison of our operations, we typically present certain operating statistics (i.e., Total RevPAR, RevPAR, average daily rate and average occupancy) and operating results (revenues, expenses, hotel EBITDA and associated margins) for the periods included in this presentation on a comparable hotel basis in order to enable our investors to better evaluate our operating performance (discussed in “Hotel Property Level Operating Results” below). However, due to the COVID-19 pandemic and its effects on operations, there is little comparability between periods. For this reason, we temporarily are suspending our comparable hotel presentation and instead present hotel operating results for all consolidated hotels and, to facilitate comparisons between periods, we are presenting results on a pro forma basis, including the following adjustments: (1) operating results are presented for all consolidated hotels owned as of March 31, 2021, but do not include the results of operations for properties sold through the reporting date; and (2) operating results for acquisitions as of March 31, 2021 are reflected for full calendar years, to include results 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.
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 of 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. We believe this presentation is useful to investors as it provides clarity with respect to the change in RevPAR in the local currency of the hotel consistent with the manner in which we would evaluate our domestic portfolio. However, the estimated effect of changes in foreign currency has been reflected in the results of net income (loss), EBITDA, Adjusted EBITDAre, diluted earnings (loss) per common 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, (iv) All Owned Hotel Pro Forma Operating Statistics and Results and (v) Cash burn. The following discussion defines these measures and presents why we believe they are useful supplemental measures of our performance.
NAREIT FFO and NAREIT FFO per Diluted Share
We present NAREIT FFO and NAREIT FFO per diluted share as non-GAAP measures of our performance in addition to our earnings per share (calculated in accordance with GAAP). We calculate NAREIT FFO per diluted share as our NAREIT FFO (defined as set forth below) for a given operating period, as adjusted for the effect of dilutive securities, divided by the number of fully diluted shares outstanding during such period, in accordance with NAREIT guidelines. Effective January 1, 2019, we adopted NAREIT’s definition of FFO included in NAREIT’s Funds From Operations White Paper – 2018 Restatement. NAREIT defines FFO as net income (calculated in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment expense of certain real estate assets and investments and adjustments for consolidated partially-owned entities and unconsolidated affiliates. Adjustments for consolidated partially-owned entities and unconsolidated affiliates are calculated to reflect our pro rata share of the FFO of those entities on the same basis.
We believe that NAREIT FFO per diluted share is a useful supplemental measure of our operating performance and that the presentation of NAREIT FFO per diluted share, when combined with the primary GAAP presentation of earnings per share, provides beneficial information to investors. By excluding the effect of real estate depreciation, amortization, impairment expense and gains and losses from sales of depreciable real estate, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, we believe that such measures can facilitate comparisons of operating performance between periods and with other REITs, even though NAREIT FFO per diluted share does not represent an amount that accrues directly to holders of our common stock. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. As noted by NAREIT in its Funds From Operations White Paper – 2018 Restatement, the primary purpose for including FFO as a supplemental measure of operating performance of a REIT is to address the artificial nature of historical cost depreciation and amortization of real estate and real estate-related assets mandated by GAAP. For these reasons, NAREIT adopted the FFO metric in order to promote a uniform industry-wide measure of REIT operating performance.
Adjusted FFO per Diluted Share
We also present Adjusted FFO per diluted share when evaluating our performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance, in our annual budget process and for our compensation programs. We believe that the presentation of Adjusted FFO per diluted share, when combined with both the primary GAAP presentation of diluted 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 from 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.
- Severance Expense –In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties. Situations that would result in a severance add-back include, but are not limited to, (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce. We do not add back corporate-level severance costs or severance costs at an individual hotel that we consider to be incurred in the normal course of business.
In unusual circumstances, we also may 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 the U.S. federal corporate income tax rate from
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 expense 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.
- Severance Expense – In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties. Situations that would result in a severance add-back include, but are not limited to, (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce. We do not add back corporate-level severance costs or severance costs at an individual hotel that we consider to be incurred in the normal course of business.
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 adjustment of this nature 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 EBITDAre and NAREIT FFO per diluted share in accordance with standards established by NAREIT, which may not be comparable to measures calculated by other companies that do not use the NAREIT definition of EBITDAre and FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. In addition, although EBITDAre and FFO per diluted share are useful measures when comparing our results to other REITs, they may not be helpful to investors when comparing us to non-REITs. We also calculate Adjusted FFO per diluted share and Adjusted EBITDAre, which are not in accordance with NAREIT guidance and may not be comparable to measures calculated by other REITs or 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), severance expense related to significant property-level reconfiguration 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 statements of operations and consolidated statements of cash flows (“Statements of Cash Flows”) in the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q 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
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 hotel-level pro forma basis as supplemental information for our investors. Our hotel results reflect the operating results of our hotels as discussed in “All Owned Hotel Pro Forma Operating Statistics and Results” above. We present all owned hotel pro forma EBITDA to help us and our investors evaluate the ongoing operating performance of our hotels after removing the impact of the Company’s capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization expense). Corporate-level costs and expenses also are removed to arrive at property-level results. We believe these property-level results provide investors with supplemental information about the ongoing operating performance of our hotels. All owned hotel pro forma results are presented both by location and for the Company’s properties in the aggregate. While severance expense is not uncommon at the individual property level in the normal course of business, we eliminate from our hotel level operating results severance costs related to broad-based and significant property-level reconfiguration that is not considered to be within the normal course of business, as we believe this elimination provides useful supplemental information that is beneficial to an investor’s understanding of our ongoing operating performance. We also eliminate depreciation and amortization expense because, even though depreciation and amortization expense 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 historically have risen or fallen with market conditions, many real estate industry investors have considered presentation of historical cost accounting for operating results to be insufficient.
Because of the elimination of corporate-level costs and expenses, gains or losses on disposition, certain severance expenses and depreciation and amortization expense, the hotel operating results we present do not represent our total revenues, expenses, operating profit or net income and should not be used to evaluate our performance as a whole. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our consolidated statements of operations include such amounts, all of which should be considered by investors when evaluating our performance.
While management believes that presentation of all owned hotel results is a 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 our hotels, as these decisions are based on data for individual hotels and are not based on all owned hotel results in the aggregate. For these reasons, we believe all owned hotel operating results, when combined with the presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management.
The following presents the reconciliation of our Net Loss to All Owned Hotels Pro Forma EBITDA (in millions) for the quarter ended December 31, 2020 and is included as All Owned Hotels Pro Forma EBITDA is a component of fourth quarter cash burn. For additional reconciliations of All Owned Hotels Pro Forma EBITDA for the quarter ended March 31, 2021 and comparable quarters in prior years, see page 13:
| Quarter ended December 31, 2020 | |||||
| Net loss | $ | (66 | ) | ||
| Depreciation and amortization | 167 | ||||
| Interest expense | 51 | ||||
| Provision for income taxes | (64 | ) | |||
| Gain on sale of property and corporate level income/expense | (171 | ) | |||
| Severance at hotel properties | 21 | ||||
| All Owned Hotels Pro Forma EBITDA | $ | (62 | ) | ||
COVID-19 Non-GAAP Reporting Measures
Cash Burn. Management utilizes the cash burn metric to evaluate the amounts necessary to fund operating losses during periods where hotels have suspended operations or are operating at very low levels of occupancy due to the COVID-19 pandemic. Therefore, management believes this metric is helpful to investors to evaluate the Company's ongoing ability to continue to fund operating losses during the current periods of operating losses. The Company defines cash burn as net cash provided by (used in) operating activities adjusted for (i) changes in short term assets and liabilities and (ii) contributions to equity investments, plus capital expenditures, as further described below. Cash burn is not intended to be, and should not be used as a substitute for GAAP net cash provided by (used in) operating activities as it does not reflect the issuance or repurchase of equity, the payment of dividends, the issuance or repayment of debt, or other investing activities such as the purchase or sale of hotels. Adjustments include:
- Changes in short term assets and liabilities – The Company eliminates changes in short-term assets and liabilities, including due from managers, other assets and other liabilities, that primarily represent timing of cash inflows and outflows. As a result, cash burn includes income and expenses in better alignment with how these items are reflected on the statements of operations. These items generally represent receipts and payments that will be settled within the year and do not reflect the cash savings or liquidity needs of the Company on an on-going basis.
- Contributions to equity investments – The Company includes contributions to equity investments that have been necessary due to the depressed operations for these investments during the COVID-19 pandemic. These contributions are included as investing activities on the Statements of Cash Flows.
- Capital Expenditures – Capital expenditures are included in the cash burn amount as they represent a significant on-going cash outflow of the Company. While management continually evaluates its capital expenditures program to appropriately balance improving and renewing its hotel portfolio with its overall cash needs; management continues to anticipate capital expenditures to be a significant cash outflow.
The following presents the reconciliation of our net cash used in operating activities from our Statements of Cash Flows to cash burn (in millions):
| Quarter ended March 31, 2021 | Quarter ended December 31, 2020 | ||||||||
| GAAP net cash used in operating activities | $ | (49 | ) | $ | (143 | ) | |||
| Contributions to equity investments | (2 | ) | (1 | ) | |||||
| Timing adjustments | |||||||||
| Change in due from/to managers | 1 | 21 | |||||||
| Change in other assets | (3 | ) | (21 | ) | |||||
| Change in other liabilities | 8 | (5 | ) | ||||||
| Cash burn excluding capital expenditures | (45 | ) | (149 | ) | |||||
| Capital expenditures | (93 | ) | (115 | ) | |||||
| Cash burn | $ | (138 | ) | $ | (264 | ) | |||
| SOURAV GHOSH | TEJAL ENGMAN |
| Chief Financial Officer | Investor Relations |
| (240) 744-5267 | (240) 744-5116 |
| ir@hosthotels.com |
A PDF accompanying this announcement is available at: http://ml.globenewswire.com/Resource/Download/fafed517-c9d4-45a6-a599-1a2d6d687fca
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