Upgrade to SI Premium - Free Trial

Host Hotels & Resorts, Inc. Reports Results for 2021

February 16, 2022 4:30 PM

Fourth Quarter Represented Highest RevPAR of 2021;Successful Execution of Capital Allocation Strategy – Since the Start of 2021, Acquired $1.6 Billion andDisposed of $1 BillionAnnounces Reinstatement of Quarterly Dividend

BETHESDA, Md., Feb. 16, 2022 (GLOBE NEWSWIRE) -- Host Hotels & Resorts, Inc. (NASDAQ: HST) (the “Company”), the nation’s largest lodging real estate investment trust (“REIT”), today announced results for fourth quarter and full year 2021.

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

Quarter ended December 31, Percent Change Percent Change Year ended December 31, Percent Change Percent Change
2021 2020 vs. Q4 2020 vs. Q4 2019⁽²⁾ 2021 2020 vs.2020 vs.2019⁽²⁾
Revenues $998 $267 273.8% (25.2)% $2,890 $1,620 78.4% (47.2)%
All owned hotel revenues (pro forma)⁽¹⁾ 1,000 293 241.3% (25.0)% 2,933 1,678 74.8% (44.6)%
All owned hotel (pro forma) Total RevPAR 237.98 70.31 238.5% (25.7)% 176.59 101.12 74.6% (44.9)%
All owned hotel (pro forma) RevPAR 148.46 42.52 249.2% (24.2)% 113.40 60.44 87.6% (43.2)%
Net income (loss) $323 $(66) N/M $(11) $(741) 98.5%
EBITDAre⁽¹⁾ 247 (53) N/M 542 (233) N/M
Adjusted EBITDAre⁽¹⁾ 242 (32) N/M 532 (168) N/M
Diluted earnings (loss) per common share .45 .(09) N/M .(02) (1.04) 98.1%
NAREIT FFO per diluted share⁽¹⁾ .26 .(07) N/M .60 .(31) N/M
Adjusted FFO per diluted share⁽¹⁾ .29 .(02) N/M .61 .(17) N/M

* Additional detail on the Company’s results, including data for 22 domestic markets and top 40 hotels by Total RevPAR, is available in the Fourth 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 finished 2021 on a high note as we continued to see strong sequential operating improvements across our portfolio. During the fourth quarter, RevPAR was approximately $148, representing a 13% increase over the prior quarter. While the newest variant created additional uncertainty for the lodging industry, it did not dampen the recovery, which continues to be concentrated in Sunbelt markets, particularly at our resorts. Our urban markets also saw strong sequential improvements, driven by business transient customers, where room nights improved over last quarter relative to 2019.”

__________________________________(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 in order to allow investors to better understand the trajectory and timing of any recovery from the COVID-19 impacts on hotel operations.N/M = Not Meaningful

Risoleo continued, “During the quarter, we completed two additional acquisitions, buying The Alida, Savannah and the Hotel Van Zandt in Austin, bringing the total value of our acquisitions for 2021 to $1.6 billion. In addition, during the quarter and subsequent to year end, we disposed of seven hotels for nearly $1 billion. We also acquired a 49% interest in the established asset management platform of Noble Investment Group through a joint venture with Noble in January. We view the investment as a new opportunity to elevate the EBITDA growth profile of our portfolio by allowing for investment in select service hotels, extended stay hotels, and new development deals. We remain optimistic about the future of travel and we are focused on continuing to improve the quality, revenue, and profitability metrics of our iconic and irreplaceable portfolio."

2021 HIGHLIGHTS:

Results for Fourth Quarter 2021

Subsequent Events

BALANCE SHEET

The Company maintains a robust balance sheet, with the following balances at December 31, 2021:

Sourav Ghosh, Executive Vice President, Chief Financial Officer, stated, “We continued to deliver operational improvements in the fourth quarter, which led to growth in positive cash flows. In addition, we opted to pay down the outstanding balance on our credit facility to reduce interest expense, given our large cash balance and increased flexibility to incur debt. We also continued to enhance our portfolio through accretive capital recycling and reinvestment in our portfolio, and announced a quarterly cash dividend, as we remain optimistic on the trajectory of the lodging recovery."

DIVIDEND

On February 16, 2022, the Board of Directors announced a regular quarterly cash dividend of $0.03 on its common stock. The dividend will be paid on April 15, 2022 to stockholders of record on March 31, 2022. All future dividends are subject to approval by the Company’s Board of Directors.

OPERATING RESULTS

The following presents the monthly pro forma hotel operating results for the full portfolio owned as of December 31, 2021 compared to 2020 and 2019 for the months presented(3):

October October November November December December Quarter ended December 31,
2021 2020 Change 2021 2020 Change 2021 2020 Change 2021 2020 Change
Number of hotels 80 79 81 79 81 79 81 79
Number of rooms 45,349 45,184 45,572 45,184 45,572 45,184 45,572 45,184
Average OccupancyPercentage 58.9% 21.5% 37.4pts 57.4% 20.0% 37.4pts 55.3% 17.8% 37.5pts 57.2% 19.8% 37.4pts
Average Room Rate $246.98 $194.78 26.8% $249.07 $208.07 19.7% $283.62 $246.68 15.0% $259.63 $214.94 20.8%
RevPAR $145.46 $41.82 247.8% $142.92 $41.71 242.6% $156.79 $43.98 256.5% $148.46 $42.52 249.2%

October October November November December December Quarter ended December 31,
2021 2019 Change 2021 2019 Change 2021 2019 Change 2021 2019 Change
Number of hotels 80 79 81 79 81 79 81 79
Number of rooms 45,349 45,184 45,572 45,184 45,572 45,184 45,572 45,184
Average OccupancyPercentage 58.9% 82.3% (23.4pts) 57.4% 75.8% (18.4pts) 55.3% 70.0% (14.7pts) 57.2% 76.1% (18.9pts)
Average Room Rate $246.98 $264.75 (6.7)% $249.07 $249.38 (0.1)% $283.62 $257.00 10.4% $259.63 $257.35 0.9%
RevPAR $145.46 $217.92 (33.3)% $142.92 $189.08 (24.4)% $156.79 $179.99 (12.9)% $148.46 $195.73 (24.2)%

__________________________________(3) The AC Hotel Scottsdale North is a new development hotel that opened in January 2021 and The Laura Hotel in Houston re-opened under new management in November 2021. Therefore, no adjustments were made for results of these hotels for periods prior to their openings. Results for the Sheraton Boston, sold subsequent to year end, are included, as it was owned for the entirety of the periods presented.

Fourth Quarter 2021 Revenue Performance

Fourth Quarter 2021 Hotel Operating Expense Performance

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 fourth quarter, demand continued to be primarily driven by leisure at drive-to and resort destinations. The following are the sequential results of the Company’s consolidated portfolio, including all owned hotels at December 31, 2021 on a pro forma basis, for transient, group and contract business in comparison to 2019 performance:

Quarter ended December 31, 2021 Quarter ended September 30, 2021
Transient Group Contract Transient Group Contract
Room nights (in thousands) 1,570 661 163 1,592 573 149
Percentage change in room nights vs. same period in 2019 (17.7)% (40.5)% (13.7)% (23.1)% (48.2)% (5.9)%
Room Revenues (in millions) $443 $150 $29 $412 $111 $24
Percentage change in revenues vs. same period in 2019 (12.6)% (43.0)% (33.9)% (18.8)% (54.2)% (41.5)%

CAPITAL ALLOCATION STRATEGY

The Company continued to execute on its capital allocation strategy by recycling capital into assets that the Company believes will improve the quality and EBITDA growth profile of its portfolio. During the quarter, the Company acquired the 173-room Alida, Savannah, part of the Marriott Tribute Portfolio, for $103 million and the 319-room Hotel Van Zandt in Austin, managed by Kimpton Hotels, for a purchase price of $246 million, including its $4 million FF&E reserve and the assumption of a $102 million non-recourse mortgage. In 2021, the Company acquired seven hotels and two golf courses for a total purchase price of $1.6 billion.

Additionally during the quarter, the Company sold the W Hollywood for approximately $197 million, including $3 million for the FF&E replacement funds, and a five-hotel portfolio consisting of the Westfields Marriott Washington Dulles, San Ramon Marriott, The Westin Buckhead Atlanta, The Westin Los Angeles Airport and The Whitley for $551 million, including approximately $11 million for the FF&E replacement funds.

Subsequent to year end, the Company sold the Sheraton Boston for $233 million, including a $163 million bridge loan provided by the Company to the buyer, and expects to record a gain of $12 million in the first quarter of 2022. Additionally, the Company acquired a 49% ownership interest in a joint venture with Noble Investment Group, a private hospitality asset manager with a focus on upscale select-service and extended stay properties. The agreement provides for the opportunity to acquire interests in future funds and represents a new platform for potential growth.

CAPITAL EXPENDITURES

The following presents the Company’s 2021 capital expenditures spend and the forecast for 2022 (in millions):

Year endedDecember 31, 2021 2022 Full Year Forecast
Actual Low-end of range High-end of range
ROI - Marriott Transformational Capital Program $126 $90 $115
ROI - All other ROI projects 167 235 260
Total ROI project spend 293 325 375
Renewals and Replacements 134 175 225
Total Capital Expenditures $427 $500 $600

The Company continues to invest heavily in capital expenditures in the early phases of recovery in order to minimize future disruption and believes these renovations will position these hotels to capture additional revenue during the economic recovery. As of year-end 2021, the Company has completed approximately 85% of the Marriott Transformational Capital Program. The Company received $14 million of operating profit guarantees in 2021, with $2 million received in the fourth quarter, and expects to receive approximately $11 million in operating profit guarantees in 2022 under the Marriott Transformational Capital Program. The program is expected to be substantially complete by the end of 2022 and the Company also plans to commence the next phase of an estimated $128 million extensive repositioning at the Fairmont Kea Lani in 2022.

2022 OUTLOOK

Given the global economic uncertainty COVID-19 has created for the travel, airline, lodging and tourism and event industries, the Company cannot provide guidance for its operations or fully estimate the effect of COVID-19 or its variants on its operations.

January 2022 operations declined compared to the fourth quarter results as operations were negatively affected by the increase in COVID-19 cases due to the Omicron variant. However, trends thus far in February would indicate a return to the positive trajectory of the recovery experienced in the second half of 2021. The Company believes that continued recovery within the lodging industry will be driven by the strength of the economy, increased consumer confidence that the risks associated with travelling and contracting COVID-19 have been significantly reduced, and the return of business and group customers.

While the Company is not providing guidance on operations at this time, it estimates that for full year 2022, interest expense and corporate and other expenses will be in the following ranges (in millions):

2022 Full Year Forecast
Low-end of range High-end of range
Interest expense $146 $149
Corporate and other expenses 103 106

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 75 properties in the United States and five properties internationally totaling approximately 44,400 rooms. The Company also holds non-controlling interests in seven 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®, Four Seasons®, 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 which include, but may not be limited to, our expectations regarding the impact of the COVID-19 pandemic on our business, the recovery of travel and the lodging industry and 2022 estimates with respect to our business, 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 February 16, 2022 and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

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

*** Tables to Follow ***

Host Hotels & Resorts, Inc., herein referred to as “we,” “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 December 31, 2021, 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.

HOST HOTELS & RESORTS, INC. Condensed Consolidated Balance Sheets(unaudited, in millions, except shares and per share amounts)

December 31, 2021 December 31, 2020
ASSETS
Property and equipment, net $9,994 $9,416
Right-of-use assets 551 597
Assets held for sale 270 —
Due from managers 113 22
Advances to and investments in affiliates 42 21
Furniture, fixtures and equipment replacement fund 144 139
Other 431 360
Cash and cash equivalents 807 2,335
Total assets $12,352 $12,890
LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY
Debt⁽¹⁾
Senior notes $3,109 $3,065
Credit facility, including the term loans of $997 1,673 2,471
Mortgage and other debt 109 5
Total debt 4,891 5,541
Lease liabilities 564 610
Accounts payable and accrued expenses 85 71
Due to managers 42 64
Other 198 170
Total liabilities 5,780 6,456
Redeemable non-controlling interests - Host Hotels & Resorts, L.P. 126 108
Host Hotels & Resorts, Inc. stockholders’ equity:
Common stock, par value $.01, 1,050 million shares authorized, 714.1 million shares and 705.4 million shares issued and outstanding, respectively 7 7
Additional paid-in capital 7,702 7,568
Accumulated other comprehensive loss (76) (74)
Deficit (1,192) (1,180)
Total equity of Host Hotels & Resorts, Inc. stockholders 6,441 6,321
Non-redeemable non-controlling interests—other consolidated partnerships 5 5
Total equity 6,446 6,326
Total liabilities, non-controlling interests and equity $12,352 $12,890

__________________________________(1) Please see our Fourth 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 December 31, Year ended December 31,
2021 2020 2021 2020
Revenues
Rooms $621 $163 $1,858 $976
Food and beverage 269 54 674 426
Other 108 50 358 218
Total revenues 998 267 2,890 1,620
Expenses
Rooms 164 63 488 362
Food and beverage 192 64 505 420
Other departmental and support expenses 269 145 890 686
Management fees 38 6 97 39
Other property-level expenses 68 72 307 312
Depreciation and amortization 165 167 762 665
Corporate and other expenses⁽¹⁾ 26 21 99 89
Gain on insurance and business interruption settlements (3) — (8) —
Total operating costs and expenses 919 538 3,140 2,573
Operating profit (loss) 79 (271) (250) (953)
Interest income — 1 2 8
Interest expense (63) (51) (191) (194)
Other gains 302 195 306 208
Equity in earnings (losses) of affiliates (5) (4) 31 (30)
Income (loss) before income taxes 313 (130) (102) (961)
Benefit for income taxes 10 64 91 220
Net income (loss) 323 (66) (11) (741)
Less: Net (income) loss attributable to non- controlling interests (3) 2 — 9
Net income (loss) attributable to Host Inc. $320 $(64) $(11) $(732)
Basic and diluted earnings (loss) per common share $.45 $(.09) $(.02) $(1.04)

__________________________________(1) Corporate and other expenses include the following items:

Quarter ended December 31, Year ended December 31,
2021 2020 2021 2020
General and administrative costs $21 $15 $81 $72
Non-cash stock-based compensation expense 5 6 18 17
Total $26 $21 $99 $89

HOST HOTELS & RESORTS, INC.Earnings (Loss) per Common Share(unaudited, in millions, except per share amounts)

Quarter ended December 31, Year ended December 31,
2021 2020 2021 2020
Net income (loss) $323 $(66) $(11) $(741)
Less: Net (income) loss attributable to non- controlling interests (3) 2 — 9
Net income (loss) attributable to Host Inc. $320 $(64) $(11) $(732)
Basic weighted average shares outstanding 714.0 705.3 710.3 705.9
Assuming distribution of common sharesgranted under the comprehensive stock plans,less shares assumed purchased at market 2.1 — — —
Diluted weighted average shares outstanding⁽¹⁾ 716.1 705.3 710.3 705.9
Basic and diluted earnings (loss)per common share $.45 $(.09) $(.02) $(1.04)

__________________________________(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 Compared to 2020

As of December 31, 2021 Quarter ended December 31, 2021 Quarter ended December 31, 2020
LocationNo. 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
Maui/Oahu 4 2,007 $527.16 74.1%$390.37 $605.32 $359.56 25.8%$92.86 $140.11 320.4% 332.0%
Jacksonville 1 446 463.81 66.2 307.26 674.17 394.11 28.8 113.66 255.23 170.3 164.1
Miami 3 1,276 532.47 64.2 342.06 523.37 403.46 35.0 141.11 242.05 142.4 116.2
Florida Gulf Coast 5 1,850 381.12 59.8 228.07 472.20 365.11 37.2 135.74 273.10 68.0 72.9
Phoenix 4 1,822 351.10 72.4 254.15 533.26 301.20 35.7 107.53 217.08 136.4 145.7
Los Angeles / Orange County 3 1,067 259.39 62.7 162.73 258.96 197.97 20.4 40.45 56.13 302.4 361.4
Orlando 2 2,448 443.69 41.5 184.28 337.70 461.74 11.8 54.65 112.39 237.2 200.5
Austin 2 767 269.59 69.4 186.99 304.02 139.19 30.0 41.71 69.59 348.3 336.8
Philadelphia 2 810 193.17 77.1 148.92 235.12 136.85 33.9 46.39 63.16 221.0 272.3
San Diego 3 3,288 233.02 60.4 140.85 253.78 152.26 18.6 28.33 50.72 397.2 400.3
Atlanta 2 810 164.89 70.3 115.89 180.31 125.39 32.8 41.16 59.40 181.6 203.6
Northern Virginia 2 916 194.01 61.4 119.16 199.80 161.89 26.7 43.29 69.46 175.2 187.6
Houston 5 1,942 164.16 58.6 96.20 135.32 118.00 37.2 43.93 63.24 119.0 114.0
New York 3 4,261 274.12 52.4 143.72 207.84 163.99 11.4 18.78 21.71 665.4 857.6
San Antonio 2 1,512 158.61 63.8 101.24 144.11 123.70 14.2 17.55 27.34 476.8 427.0
Chicago 4 1,816 180.45 59.1 106.70 143.91 110.71 13.4 14.87 18.68 617.7 670.4
Washington, D.C. (CBD) 5 3,238 200.64 43.5 87.34 124.51 161.64 8.1 13.15 17.74 564.3 601.7
Denver 3 1,340 156.62 49.1 76.97 106.82 112.46 16.1 18.16 23.99 323.9 345.2
Boston 3 2,715 197.82 62.1 122.77 145.26 126.56 6.3 8.03 10.91 1,429.7 1,231.8
New Orleans 1 1,333 176.86 54.7 96.81 141.52 138.80 41.4 57.42 73.00 68.6 93.9
San Francisco / San Jose 6 4,162 170.71 53.4 91.10 125.30 152.04 13.5 20.46 25.43 345.2 392.8
Seattle 2 1,315 171.61 46.4 79.56 104.93 151.61 5.8 8.75 12.03 809.4 772.1
Other 9 2,932 252.77 54.6 138.12 198.65 212.80 27.6 58.79 85.31 135.0 132.9
Domestic 76 44,073 264.36 57.4 151.86 243.66 217.76 20.0 43.59 72.22 248.4 237.4
International 5 1,499 98.32 49.5 48.66 71.32 86.73 12.8 11.13 14.71 337.1 384.7
All Locations 81 45,572 259.63 57.2 148.46 237.98 214.94 19.8 42.52 70.31 249.2 238.5

All Owned Hotels (pro forma) by Location Compared to 2019

As of December 31, 2021 Quarter ended December 31, 2021 Quarter ended December 31, 2019
LocationNo. 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
Maui/Oahu 4 2,007 $527.16 74.1%$390.37 $605.32 $434.72 79.6%$346.15 $530.96 12.8% 14.0%
Jacksonville 1 446 463.81 66.2 307.26 674.17 334.64 62.4 208.94 497.75 47.1 35.4
Miami 3 1,276 532.47 64.2 342.06 523.37 345.79 79.0 273.07 438.79 25.3 19.3
Florida Gulf Coast 5 1,850 381.12 59.8 228.07 472.20 316.16 69.9 220.85 480.84 3.3 (1.8)
Phoenix 4 1,822 351.10 72.4 254.15 533.26 293.33 72.6 213.00 489.76 19.3 8.9
Los Angeles / Orange County 3 1,067 259.39 62.7 162.73 258.96 249.68 81.7 204.11 320.66 (20.3) (19.2)
Orlando 2 2,448 443.69 41.5 184.28 337.70 328.06 64.4 211.35 424.70 (12.8) (20.5)
Austin 2 767 269.59 69.4 186.99 304.02 255.26 80.8 206.16 342.15 (9.3) (11.1)
Philadelphia 2 810 193.17 77.1 148.92 235.12 219.68 86.6 190.20 316.27 (21.7) (25.7)
San Diego 3 3,288 233.02 60.4 140.85 253.78 228.60 74.2 169.53 325.13 (16.9) (21.9)
Atlanta 2 810 164.89 70.3 115.89 180.31 175.95 78.8 138.71 231.69 (16.5) (22.2)
Northern Virginia 2 916 194.01 61.4 119.16 199.80 224.95 71.8 161.48 308.69 (26.2) (35.3)
Houston 5 1,942 164.16 58.6 96.20 135.32 176.32 70.9 124.95 188.16 (23.0) (28.1)
New York 3 4,261 274.12 52.4 143.72 207.84 335.19 90.2 302.22 449.65 (52.4) (53.8)
San Antonio 2 1,512 158.61 63.8 101.24 144.11 193.12 59.9 115.62 173.80 (12.4) (17.1)
Chicago 4 1,816 180.45 59.1 106.70 143.91 207.41 76.1 157.94 218.58 (32.4) (34.2)
Washington, D.C. (CBD) 5 3,238 200.64 43.5 87.34 124.51 243.16 76.6 186.27 274.75 (53.1) (54.7)
Denver 3 1,340 156.62 49.1 76.97 106.82 167.45 62.9 105.31 174.21 (26.9) (38.7)
Boston 3 2,715 197.82 62.1 122.77 145.26 232.62 78.4 182.29 261.40 (32.7) (44.4)
New Orleans 1 1,333 176.86 54.7 96.81 141.52 185.82 76.5 142.21 209.94 (31.9) (32.6)
San Francisco / San Jose 6 4,162 170.71 53.4 91.10 125.30 264.99 83.1 220.14 309.64 (58.6) (59.5)
Seattle 2 1,315 171.61 46.4 79.56 104.93 204.05 76.8 156.81 232.64 (49.3) (54.9)
Other 9 2,932 252.77 54.6 138.12 198.65 191.18 73.1 139.69 217.32 (1.1) (8.6)
Domestic 76 44,073 264.36 57.4 151.86 243.66 260.76 76.3 198.86 325.76 (23.6) (25.2)
International 5 1,499 98.32 49.5 48.66 71.32 149.12 70.1 104.55 165.87 (53.5) (57.0)
All Locations 81 45,572 259.63 57.2 148.46 237.98 257.35 76.1 195.73 320.46 (24.2) (25.7)

All Owned Hotels (pro forma) by Location in Compared to 2020

As of December 31, 2021 Year ended December 31, 2021 Year ended December 31, 2020
LocationNo. 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
Maui/Oahu 4 2,007 $486.22 69.0%$335.71 $512.34 $403.12 28.8%$115.91 $174.86 189.6% 193.0%
Jacksonville 1 446 494.80 59.9 296.61 609.54 403.32 39.3 158.58 330.97 87.0 84.2
Miami 3 1,276 489.24 59.1 289.20 449.18 378.62 35.2 133.26 219.18 117.0 104.9
Florida Gulf Coast 5 1,850 407.02 56.1 228.20 438.18 368.26 39.8 146.62 304.41 55.6 43.9
Phoenix 4 1,822 316.35 60.5 191.42 393.86 313.05 32.9 102.99 233.16 85.9 68.9
Los Angeles / Orange County 3 1,067 241.56 53.6 129.52 187.07 235.28 28.9 68.04 100.21 90.4 86.7
Orlando 2 2,448 413.95 30.9 127.96 231.90 365.64 19.0 69.62 147.90 83.8 56.8
Austin 2 767 214.87 56.3 121.00 195.68 195.33 30.4 59.41 108.97 103.7 79.6
Philadelphia 2 810 176.82 63.3 111.97 169.50 154.46 34.9 53.85 81.81 107.9 107.2
San Diego 3 3,288 222.93 49.1 109.43 180.41 218.59 24.4 53.40 102.63 104.9 75.8
Atlanta 2 810 156.30 58.5 91.40 129.46 155.63 31.5 49.06 76.54 86.3 69.1
Northern Virginia 2 916 182.84 49.4 90.34 138.95 184.42 30.7 56.68 87.88 59.4 58.1
Houston 5 1,942 146.57 59.4 87.04 118.95 138.61 36.2 50.19 73.46 73.4 61.9
New York 3 4,261 220.05 36.9 81.23 108.52 187.28 27.1 50.75 71.03 60.1 52.8
San Antonio 2 1,512 159.93 46.6 74.53 107.51 159.16 19.0 30.27 45.28 146.2 137.4
Chicago 4 1,816 172.35 42.9 73.96 94.30 130.47 22.1 28.78 38.48 157.0 145.0
Washington, D.C. (CBD) 5 3,238 171.93 42.6 73.18 92.16 216.26 18.2 39.30 55.93 86.2 64.8
Denver 3 1,340 151.40 43.9 66.49 86.94 140.24 23.9 33.49 48.55 98.6 79.1
Boston 3 2,715 188.00 34.8 65.48 78.90 168.75 16.0 27.08 40.90 141.8 92.9
New Orleans 1 1,333 144.71 41.9 60.68 84.82 164.70 33.3 54.89 76.95 10.6 10.2
San Francisco / San Jose 6 4,162 161.21 36.9 59.55 78.95 252.95 22.7 57.38 82.06 3.8 (3.8)
Seattle 2 1,315 182.40 32.5 59.27 74.16 187.91 16.7 31.38 44.67 88.9 66.0
Other 9 2,932 246.03 47.6 117.20 167.00 192.50 31.5 60.71 88.26 93.0 89.2
Domestic 76 44,073 251.39 46.2 116.25 181.13 235.07 26.2 61.66 103.33 88.5 75.3
International 5 1,499 90.03 33.4 30.10 43.52 116.26 21.4 24.91 36.65 20.8 18.7
All Locations 81 45,572 247.50 45.8 113.40 176.59 231.83 26.1 60.44 101.12 87.6 74.6

All Owned Hotels (pro forma) by Location in Compared to 2019

As of December 31, 2021 Year ended December 31, 2021 Year ended December 31, 2019
LocationNo. 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
Maui/Oahu 4 2,007 $486.22 69.0%$335.71 $512.34 $409.40 88.1%$360.59 $565.70 (6.9)% (9.4)%
Jacksonville 1 446 494.80 59.9 296.61 609.54 372.94 73.5 274.07 613.80 8.2 (0.7)
Miami 3 1,276 489.24 59.1 289.20 449.18 325.16 79.8 259.54 410.81 11.4 9.3
Florida Gulf Coast 5 1,850 407.02 56.1 228.20 438.18 334.73 72.0 241.11 501.15 (5.4) (12.6)
Phoenix 4 1,822 316.35 60.5 191.42 393.86 292.50 71.9 210.32 476.62 (9.0) (17.4)
Los Angeles / Orange County 3 1,067 241.56 53.6 129.52 187.07 259.35 84.0 217.78 331.66 (40.5) (43.6)
Orlando 2 2,448 413.95 30.9 127.96 231.90 295.49 69.1 204.18 415.24 (37.3) (44.2)
Austin 2 767 214.87 56.3 121.00 195.68 248.70 85.2 211.79 356.91 (42.9) (45.2)
Philadelphia 2 810 176.82 63.3 111.97 169.50 217.01 85.7 185.91 305.37 (39.8) (44.5)
San Diego 3 3,288 222.93 49.1 109.43 180.41 249.41 79.4 198.02 360.49 (44.7) (50.0)
Atlanta 2 810 156.30 58.5 91.40 129.46 184.71 82.7 152.76 251.41 (40.2) (48.5)
Northern Virginia 2 916 182.84 49.4 90.34 138.95 221.33 75.3 166.61 276.13 (45.8) (49.7)
Houston 5 1,942 146.57 59.4 87.04 118.95 177.93 72.0 128.14 185.48 (32.1) (35.9)
New York 3 4,261 220.05 36.9 81.23 108.52 286.36 84.8 242.96 359.92 (66.6) (69.8)
San Antonio 2 1,512 159.93 46.6 74.53 107.51 185.33 69.7 129.14 189.71 (42.3) (43.3)
Chicago 4 1,816 172.35 42.9 73.96 94.30 207.67 76.2 158.19 222.83 (53.2) (57.7)
Washington, D.C. (CBD) 5 3,238 171.93 42.6 73.18 92.16 245.82 81.5 200.27 288.52 (63.5) (68.1)
Denver 3 1,340 151.40 43.9 66.49 86.94 173.47 72.9 126.48 190.45 (47.4) (54.4)
Boston 3 2,715 188.00 34.8 65.48 78.90 237.24 81.7 193.83 268.74 (66.2) (70.6)
New Orleans 1 1,333 144.71 41.9 60.68 84.82 187.65 79.0 148.30 216.97 (59.1) (60.9)
San Francisco / San Jose 6 4,162 161.21 36.9 59.55 78.95 279.18 82.4 230.14 319.93 (74.1) (75.3)
Seattle 2 1,315 182.40 32.5 59.27 74.16 225.12 82.4 185.50 250.12 (68.0) (70.4)
Other 9 2,932 246.03 47.6 117.20 167.00 192.98 75.6 145.96 220.89 (19.7) (24.4)
Domestic 76 44,073 251.39 46.2 116.25 181.13 256.97 78.9 202.64 326.00 (42.6) (44.4)
International 5 1,499 90.03 33.4 30.10 43.52 153.01 70.9 108.44 160.74 (72.2) (72.9)
All Locations 81 45,572 247.50 45.8 113.40 176.59 253.86 78.6 199.52 320.52 (43.2) (44.9)

__________________________________(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 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 properties owned as of December 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 December 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. The AC Hotel Scottsdale North is a new development hotel that opened in January 2021 and The Laura Hotel in Houston re-opened under new management in November 2021. Therefore, no adjustments were made for results of these hotels for periods prior to their openings. Results for the hotel sold subsequent to quarter end are included, as it was owned for the entirety of the periods presented. 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.N/M = Not meaningful

HOST HOTELS & RESORTS, INC. Schedule of All Owned Hotel Pro Forma Results (1)(unaudited, in millions, except hotel statistics)

Quarter ended December 31, Year ended December 31,
2021 2020 2019 2021 2020 2019
Number of hotels 81 79 79 81 79 79
Number of rooms 45,572 45,184 45,184 45,572 45,184 45,184
Change in hotel Total RevPAR 238.5% — — 74.6% — —
Change in hotel RevPAR 249.2% — — 87.6% — —
Operating profit (loss) margin⁽²⁾ 7.9% (101.5)% 12.4% (8.7)% (58.8)% 14.6%
All Owned Hotel Pro Forma EBITDA margin⁽²⁾ 26.9% (18.8)% 27.7% 21.7% (7.7)% 28.8%
Food and beverage profit margin⁽²⁾ 28.6% (18.5)% 32.8% 25.1% 1.4% 32.0%
All Owned Hotel Pro Forma food and beverage profit margin⁽²⁾ 29.3% (3.3)% 32.5% 25.1% 9.6% 32.0%
Net income (loss) $323 $(66) $81 $(11) $(741) $932
Depreciation and amortization 165 167 175 762 665 676
Interest expense 63 51 90 191 194 222
Provision (benefit) for income taxes (10) (64) 8 (91) (220) 30
Gain on sale of property and corporate level income/expense (271) (171) 13 (240) (97) (283)
Severance expense (reversal) at hotel properties (5) 21 — (10) 65 —
Pro forma adjustments⁽³⁾ 4 7 2 35 5 (55)
All Owned Hotel Pro Forma EBITDA⁽⁴⁾ $269 $(55) $369 $636 $(129) $1,522

Quarter ended December 31, 2021 Quarter ended December 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⁽⁴⁾ GAAP Results Severance at hotel properties Pro forma adjustments⁽³⁾ Depreciation and corporate level items All Owned Hotel Pro Forma Results⁽⁴⁾
Revenues
Room$621 $— $1 $— $622 $163 $— $14 $— $177
Food and beverage 269 — 1 — 270 54 — 7 — 61
Other 108 — — — 108 50 — 5 — 55
Total revenues 998 — 2 — 1,000 267 — 26 — 293
Expenses
Room 164 — (1) — 163 63 (2) 2 — 63
Food and beverage 192 — (1) — 191 64 (9) 8 — 63
Other 375 5 — — 380 223 (10) 9 — 222
Depreciation and amortization 165 — — (165) — 167 — — (167) —
Corporate and other expenses 26 — — (26) — 21 — — (21) —
Gain on insurance and business interruption settlements (3) — — — (3) — — — — —
Total expenses 919 5 (2) (191) 731 538 (21) 19 (188) 348
Operating Profit - All Owned Hotel Pro Forma EBITDA⁽⁴⁾$79 $(5) $4 $191 $269 $(271) $21 $7 $188 $(55)

Quarter ended December 31, 2021 Quarter ended December 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⁽⁴⁾ GAAP Results Pro forma adjustments⁽³⁾ Depreciation and corporate level items All Owned Hotel Pro Forma Results⁽⁴⁾
Revenues
Room $621 $— $1 $— $622 $813 $1 $— $814
Food and beverage 269 — 1 — 270 424 (3) — 421
Other 108 — — — 108 97 1 — 98
Total revenues 998 — 2 — 1,000 1,334 (1) — 1,333
Expenses
Room 164 — (1) — 163 209 (3) — 206
Food and beverage 192 — (1) — 191 285 (1) — 284
Other 375 5 — — 380 473 1 — 474
Depreciation and amortization 165 — — (165) — 175 — (175) —
Corporate and other expenses 26 — — (26) — 27 — (27) —
Gain on insurance and business interruption settlements (3) — — — (3) (1) — 1 —
Total expenses 919 5 (2) (191) 731 1,168 (3) (201) 964
Operating Profit - All Owned Hotel Pro Forma EBITDA⁽⁴⁾ $79 $(5) $4 $191 $269 $166 $2 $201 $369

Year ended December 31, 2021 Year ended December 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⁽⁴⁾ GAAP Results Severance at hotel properties Pro forma adjustments⁽³⁾ Depreciation and corporate level items All Owned Hotel Pro Forma Results⁽⁴⁾
Revenues
Room $1,858 $— $21 $— $1,879 $976 $— $24 $— $1,000
Food and beverage 674 — 14 — 688 426 — 23 — 449
Other 358 — 8 — 366 218 — 11 — 229
Total revenues 2,890 — 43 — 2,933 1,620 — 58 — 1,678
Expenses
Room 488 1 (4) — 485 362 (15) 3 — 350
Food and beverage 505 — 10 — 515 420 (33) 19 — 406
Other 1,294 9 2 — 1,305 1,037 (17) 31 — 1,051
Depreciation and amortization 762 — — (762) — 665 — — (665) —
Corporate and other expenses 99 — — (99) — 89 — — (89) —
Gain on insurance and business interruption settlements (8) — — — (8) — — — — —
Total expenses 3,140 10 8 (861) 2,297 2,573 (65) 53 (754) 1,807
Operating Profit - All Owned Hotel Pro Forma EBITDA⁽⁴⁾ $(250) $(10) $35 $861 $636 $(953) $65 $5 $754 $(129)

Year ended December 31, 2021 Year ended December 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⁽⁴⁾ GAAP Results Pro forma adjustments⁽³⁾ Depreciation and corporate level items All Owned Hotel Pro Forma Results⁽⁴⁾
Revenues
Room $1,858 $— $21 $— $1,879 $3,431 $(141) $— $3,290
Food and beverage 674 — 14 — 688 1,647 (36) — 1,611
Other 358 — 8 — 366 391 (2) — 389
Total revenues 2,890 — 43 — 2,933 5,469 (179) — 5,290
Expenses
Room 488 1 (4) — 485 873 (42) — 831
Food and beverage 505 — 10 — 515 1,120 (25) — 1,095
Other 1,294 9 2 — 1,305 1,899 (57) — 1,842
Depreciation and amortization 762 — — (762) — 676 — (676) —
Corporate and other expenses 99 — — (99) — 107 — (107) —
Gain on insurance and business interruption settlements (8) — — — (8) (5) — 5 —
Total expenses 3,140 10 8 (861) 2,297 4,670 (124) (778) 3,768
Operating Profit - All Owned Hotel Pro Forma EBITDA⁽⁴⁾ $(250) $(10) $35 $861 $636 $799 $(55) $778 $1,522

__________________________________(1) See the Notes to Financial Information for a discussion of non-GAAP measures and 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 December 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) The AC Hotel Scottsdale North is a new development hotel that opened in January 2021 and The Laura Hotel in Houston re-opened under new management in November 2021. Therefore, no adjustments were made for results of these hotels for periods prior to their openings. Results for the hotel sold subsequent to quarter end are included, as it was owned for the entirety of the periods presented.

HOST HOTELS & RESORTS, INC.Reconciliation of Net Income (Loss) toEBITDA, EBITDAre and Adjusted EBITDAre (1)(unaudited, in millions)

Quarter ended December 31, Year ended December 31,
2021 2020 2021 2020
Net income (loss)⁽²⁾ $323 $(66) $(11) $(741)
Interest expense 63 51 191 194
Depreciation and amortization 165 167 670 665
Income taxes (10) (64) (91) (220)
EBITDA⁽²⁾ 541 88 759 (102)
Gain on dispositions⁽³⁾ (303) (148) (303) (149)
Non-cash impairment expense — — 92 —
Equity investment adjustments:
Equity in (earnings) losses of affiliates 5 4 (31) 30
Pro rata EBITDAre of equity investments⁽4⁾ 4 3 25 (12)
EBITDAre⁽²⁾ 247 (53) 542 (233)
Adjustments to EBITDAre:
Severance expense (reversal) at hotel properties (5) 21 (10) 65
Adjusted EBITDAre⁽²⁾ $242 $(32) $532 $(168)

__________________________________(1) See the Notes to Financial Information for discussion of non-GAAP measures.(2) Net income (loss), EBITDA, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO include a gain of $47 million in the fourth quarter 2020 and $59 million for the year ended December 31, 2020 from the sale of land adjacent to The Phoenician hotel. The year ended December 31, 2020 also includes a loss of $14 million related to inventory impairment expense recorded by our Maui timeshare joint venture, reflected through equity in (earnings) losses of affiliates.(3) Reflects the sale of six hotels in 2021 and one hotel in 2020.(4) Pro rata EBITDAre of equity investments and pro rata FFO of equity investments for year ended December 31, 2021 include a realized gain of approximately $3 million related to equity securities held by one of our unconsolidated partnerships, Fifth Wall Ventures, L.P. 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 toNAREIT and Adjusted Funds From Operations per Diluted Share (1)(unaudited, in millions, except per share amounts)

Quarter ended December 31, Year ended December 31,
2021 2020 2021 2020
Net income (loss)⁽²⁾ $323 $(66) $(11) $(741)
Less: Net (income) loss attributable to non-controlling interests (3) 2 — 9
Net income (loss) attributable to Host Inc. 320 (64) (11) (732)
Adjustments:
Gain on dispositions(3) (303) (148) (303) (149)
Tax on dispositions (4) (3) (4) (3)
Depreciation and amortization 165 167 669 663
Non-cash impairment expense — — 92 —
Equity investment adjustments:
Equity in (earnings) losses of affiliates 5 4 (31) 30
Pro rata FFO of equity investments⁽⁴⁾ 2 (1) 18 (21)
Consolidated partnership adjustments:
FFO adjustment for non-controlling partnerships — — (1) (1)
FFO adjustments for non-controlling interests of Host L.P. 1 (1) (5) (6)
NAREIT FFO⁽²⁾ 186 (46) 424 (219)
Adjustments to NAREIT FFO:
Loss on debt extinguishment 23 8 23 36
Severance expense (reversal) at hotel properties (5) 21 (10) 65
Loss attributable to non-controlling interests — — — (1)
Adjusted FFO⁽²⁾ $204 $(17) $437 $(119)
For calculation on a per share basis:⁽⁵⁾
Diluted weighted average shares outstanding - EPS 716.1 705.3 710.3 705.9
Assuming issuance of common shares granted under the comprehensive stock plans — — 2.0 —
Diluted weighted average shares outstanding - NAREIT FFO and Adjusted FFO 716.1 705.3 712.3 705.9
Diluted earnings (loss) per common share $.45 $(.09) $(.02) $(1.04)
NAREIT FFO per diluted share $.26 $(.07) $.60 $(.31)
Adjusted FFO per diluted share $.29 $(.02) $.61 $(.17)

__________________________________(1-4) Refer to corresponding footnote on the Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre.(5) 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 December 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 December 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.

FOREIGN CURRENCY TRANSLATION

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. Therefore, hotel statistics and results for non-U.S. properties include the effect of currency fluctuations, consistent with our financial statement presentation.

NON-GAAP FINANCIAL MEASURES

Included in this press release are certain “non-GAAP financial measures,” which are measures of our historical or future financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. They are as follows: (i) FFO and FFO per diluted share (both NAREIT and Adjusted), (ii) EBITDA, (iii) EBITDAre and Adjusted EBITDAre, and (iv) All Owned Hotel Pro Forma Operating Statistics and Results. The following discussion defines these measures and presents why we believe they are useful supplemental measures of our performance.

NAREIT FFO AND NAREIT FFO PER DILUTED SHARE

We present NAREIT FFO and NAREIT FFO per diluted share as non-GAAP measures of our performance in addition to our earnings per share (calculated in accordance with GAAP). We calculate NAREIT FFO per diluted share as our NAREIT FFO (defined as set forth below) for a given operating period, as adjusted for the effect of dilutive securities, divided by the number of fully diluted shares outstanding during such period, in accordance with NAREIT guidelines. 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:

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 35% to 21% by the Tax Cuts and Jobs Act, we remeasured our domestic deferred tax assets as of December 31, 2017 and recorded a one-time adjustment to reduce our deferred tax assets and to increase the provision for income taxes by approximately $11 million. We do not consider this adjustment to be reflective of our on-going operating performance and, therefore, we excluded this item from Adjusted FFO.

EBITDA

Earnings before Interest Expense, Income Taxes, Depreciation and Amortization (“EBITDA”) is a commonly used measure of performance in many industries. Management believes EBITDA provides useful information to investors regarding our results of operations because it helps us and our investors evaluate the ongoing operating performance of our properties after removing the impact of the Company’s capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). Management also believes the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners that are not REITs and other capital-intensive companies. Management uses EBITDA to evaluate property-level results and as one measure in determining the value of acquisitions and dispositions and, like FFO and Adjusted FFO per diluted share, it is widely used by management in the annual budget process and for our compensation programs.

EBITDAre and Adjusted EBITDAre

We present EBITDAre in accordance with NAREIT guidelines, as defined in its September 2017 white paper “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate,” to provide an additional performance measure to facilitate the evaluation and comparison of the Company’s results with other REITs. NAREIT defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment 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:

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 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 11% to 67% in seven domestic and international partnerships that own a total of 10 properties and a vacation ownership development. Due to the voting rights of the outside owners, we do not control and, therefore, do not consolidate these entities. The non-controlling partners in consolidated partnerships primarily consist of the approximate 1% interest in Host LP held by outside partners, and a 15% interest held by outside partners in a partnership owning one hotel for which we do control the entity and, therefore, consolidate its operations. These pro rata results for NAREIT FFO and Adjusted FFO per diluted share, EBITDAre and Adjusted EBITDAre were calculated as set forth in the definitions above. Readers should be cautioned that the pro rata results presented in these measures for consolidated partnerships (for NAREIT FFO and Adjusted FFO per diluted share) and equity investments may not accurately depict the legal and economic implications of our investments in these entities.

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. 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.

SOURAV GHOSHJAIME MARCUS
Chief Financial OfficerInvestor Relations
(240) 744-5267(240) 744-5117
[email protected]

A PDF accompanying this announcement is available at: http://ml.globenewswire.com/Resource/Download/b1bcf712-6744-4135-986b-1f624903c138

Primary Logo

Source: Host Hotels & Resorts, Inc.

Categories

Globe Newswire Press Releases

Next Articles