Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nasdaq  >  Host Hotels & Resorts, Inc    HST

HOST HOTELS & RESORTS, INC

(HST)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsAnalyst Recommendations

Host Hotels & Resorts : Third Quarter 2020 Earnings Press Release

11/04/2020 | 04:41pm EST

SOURAV GHOSH

TEJAL ENGMAN

Chief Financial Officer

Investor Relations

(240) 744-5267

(240) 744-5116

ir@hosthotels.com

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

BETHESDA, MD; November 4, 2020 - Host Hotels & Resorts, Inc. (NASDAQ: HST) (the "Company"), the nation's largest lodging real estate investment trust ("REIT"), today announced results for the third quarter of 2020.

James F. Risoleo, President and Chief Executive Officer, said, "During the third quarter, we achieved a meaningful sequential increase in revenue and reduced our net loss and hotel-level operating losses from second-quarter levels, despite

  1. year-over-yeardecrease in travel due to COVID-19. We reopened 20 hotels during the quarter, and consistently improved RevPAR each month as our operators increased average hotel occupancy by 680 basis points from July to September. In addition, we took important steps with our hotel operators towards achieving our goal of permanent cost savings as we continue to redefine our operating model and strengthen our business for the long term."

Risoleo continued, "Subsequent to quarter end, we sold the 532-key Newport Beach Marriott Hotel & Spa for approximately $216 million after retaining FF&E reserves, and 29 acres of land adjacent to The Phoenician hotel for approximately $66 million. We are pleased to capitalize on these opportunistic sales at attractive prices that enhance our liquidity and reduce our near-term capital spending requirements. We ended the quarter with $2.4 billion of cash, having drawn the remaining capacity on our credit facility, issued $750 million of senior notes and used $390 million to repay existing debt. These actions further augmented our already solid cash position while extending our weighted average debt maturity and maintaining our weighted average interest rate. We continue to maximize our liquidity and maintain the strength of our investment-grade balance sheet, with no near-term debt maturities and a best-in-class ability to withstand prolonged business disruption."

OPERATING RESULTS 1

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

Quarter ended September 30,

Percent

Year-to-date ended September 30,

Percent

2020

2019

Change

2020

2019

Change

Revenues .............................................

$

198

$

1,262

(84.3)% $

1,353

$

4,135

(67.3)%

All owned hotel revenues

(pro forma) (1)..................................

198

1,212

(83.7)%

1,353

3,924

(65.5)%

Net income (loss) .................................

(316)

372

N/M

(675)

851

N/M

EBITDAre (1) .........................................

(154)

316

N/M

(180)

1,183

N/M

Adjusted EBITDAre (1) ..........................

(111)

312

N/M

(136)

1,179

N/M

All owned hotel Total RevPAR -

Constant US$ ..................................

45.27

280.93

(83.9)%

104.51

306.21

(65.9)%

All owned hotel RevPAR -

Constant US$ ..................................

29.36

185.03

(84.1)%

63.53

193.71

(67.2)%

Diluted earnings (loss) per common

share ...............................................

(0.44)

0.51

N/M

(0.95)

1.14

N/M

NAREIT FFO per diluted share (1) ........

(0.21)

0.35

N/M

(0.25)

1.36

N/M

Adjusted FFO per diluted share (1)........

(0.11)

0.35

N/M

(0.14)

1.37

N/M

  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"). Beginning in the third quarter of 2020, the Company changed its definition of Adjusted EBITDAre and Adjusted FFO to exclude non-ordinary course severance costs, which management believes provides useful supplemental information that is beneficial to an investor's understanding of ongoing operating performance. Furlough costs, which are viewed as a replacement to wages, will continue to be included in these metrics. Including these severance costs, Adjusted EBITDAre and Adjusted FFO would have been $(154) million and $(123) million, respectively, for the third quarter 2020 and $(180) million and $(146) million year-to-date, respectively. 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.

N/M = Not meaningful

HOST HOTELS & RESORTS, INC. NEWS RELEASE

NOVEMBER 4, 2020

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

PORTFOLIO HIGHLIGHTS:

  • As of November 4, 2020, re-opened 31 of the 35 hotels that had suspended operations, and had open a total of 75 of its 79 consolidated hotels, representing 94% of the Company's room count.
  • Improved average monthly occupancy by 680 basis points, from 12.9% in July to 19.7% in September 2020.
  • Achieved break-even or positive hotel-level operating profit at 22% of its hotels, representing 18% of rooms, for the month of September 2020, excluding severance costs and the Employee Retention Credit ("ERC") that, under the CARES Act, partially offset the costs for the operator's furloughed hotel employees.
  • Subsequent to quarter end, completed the sale of the Newport Beach Marriott Hotel & Spa for $216 million and sold three parcels of land at The Phoenician hotel for $66 million.

UPDATE ON COVID-19RESPONSE AND POSITIONING FOR RECOVERY

In response to the COVID-19 pandemic, the Company and its hotel operators have prioritized preserving financial liquidity and ensuring that the Company's hotels are well positioned for recovery.

Preserving financial liquidity:2

Compared to second quarter 2020, cash used in operating activities improved by $23 million in the third quarter and cash burn improved by approximately $132 million, as a result of month to month improvement in average occupancy and, for cash burn, lower levels of capital expenditures and recording of the ERC. Significant expenditures included in the Company's total cash burn are (in millions):

Quarter ended

Quarter ended

September 30, 2020

June 30, 2020

Net loss ................................................................................................................

$

(316) $

(356)

GAAP net cash used in operating activities..........................................................

(149)

(172)

Cash burn (2) .........................................................................................................

(267)

(399)

Components of cash burn:

Hotel-level operating loss (2) ............................................................................

(97)

(162)

Interest payments (3)........................................................................................

(27)

(46)

Cash corporate and other expenses ...............................................................

(16)

(21)

Capital expenditures .......................................................................................

(84)

(169)

Severance at hotel properties .........................................................................

(43)

(1)

The Company's liquidity can be estimated based on the average monthly GAAP cash used in operating activities and cash burn using the third quarter performance as well as forecasted interest expense and capital expenditures. Monthly cash burn for the fourth quarter is expected to exceed the third quarter average primarily due to the timing and amount of payments of capital expenditures, interest payments, and the ERC. In a scenario in which fourth quarter hotel operations are commensurate with the third quarter but exclude the $23 million ERC, the Company estimates that:

    1. the average monthly GAAP cash used in operating activities would be approximately $66 million at the midpoint, which includes estimated interest, corporate-level expenses, and cash timing adjustments, and
    2. monthly cash burn would be approximately $95 million to $105 million(2), which also includes estimated monthly capital expenditures.
  1. Hotel-leveloperating loss and cash burn are non-GAAP financial measures within the meaning of the rules of the SEC. Beginning in the third quarter of 2020, the Company removes severance costs incurred outside the ordinary course of business from All Owned Hotel Pro Forma EBITDA, a major component of hotel-level operating loss, as management believes this provides useful supplemental information that is beneficial to an investor's understanding of ongoing operating performance. Furlough costs, which are viewed as a replacement to wages, and the $23 million in ERC are included in this metric. Severance and furlough costs are included in determining quarterly cash burn. 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. Interest payments for the third quarter do not include cash debt extinguishment costs of $26 million, which are considered a financing activity on the Company's statement of cash flows.

PAGE 2 OF 22

HOST HOTELS & RESORTS, INC. NEWS RELEASE

NOVEMBER 4, 2020

Based on the above, the Company anticipates the total available liquidity at the end of 2020 would be approximately $2.4 billion to $2.5 billion, including cash and FF&E reserves, and proceeds from the sales referenced above that occurred subsequent to quarter end, but not including any potential debt paydowns or other transactions. At this current cash burn level, the Company anticipates it would have ample liquidity until November of 2022, subject to obtaining continued covenant waivers from the lenders under the credit facility.

Actions by the Company's hotel operators and the Company to preserve financial liquidity and position itself for the recovery include:

Reducing Operating Costs

  • Reduction of portfolio-wide hotel operating costs by over 65%, excluding severance, in the third quarter compared to the prior year, by continuing to suspend or scale back operations at hotels and furlough hotel employees. Furloughed employees received healthcare benefits of $31 million in the third quarter and approximately $85 million year-to-date. In addition, the Company's hotel operators recorded a $23 million credit related to the ERC in the third quarter, which reduced hotel-level operating expenses.
  • Re-evaluationof the workforce structure and implementation of changes that are expected to lead to a more efficient operating model in the long term. As a result, the Company recorded severance costs of approximately $43 million in the third quarter. Full year severance costs for 2020 are expected to be $60 million to $70 million.
  • Reduction of year-to-date corporate expenses by nearly 15% compared to the prior year.

Strengthening the Balance Sheet

  • Draw of $746 million of the remaining capacity on the revolver portion of the Company's credit facility in the third quarter as a precautionary measure in order to preserve financial flexibility.
  • Issuance of $750 million of 3.5% Series I Senior Notes due 2030 in the third quarter. A portion of the proceeds were used to repurchase approximately 81% of the outstanding 4.75% Series C Senior Notes due 2023 for $390 million, including $26 million of prepayment costs, extending the Company's weighted average debt maturity, while maintaining its average interest rate.
  • Continued suspension of the quarterly dividend and stock repurchases.

Positioning for recovery

  • Continued completion of the Marriott transformational capital program and other ROI projects to take advantage of reduced demand. The Company believes the renovations will position these hotels to capture additional revenue during the economic recovery.
  • Continued review of operating costs with hotel managers at varying levels of occupancy with a focus on modernizing brand standards, streamlining operating departments and accelerating the adoption of cost-saving technology.

OPERATING RESULTS

The Company's prior year presentation of comparable hotel performance is no longer relevant given the impact of COVID-

19. Hotel operating results, including RevPAR, are instead being reported on an All Owned Hotel pro forma basis, which includes all consolidated properties owned as of September 30, 2020, but does not include the results of operations for properties sold in 2019 or through the reporting date. Additionally, operating results for acquisitions in the prior year are reflected for the full 2019 calendar year, to include results for periods prior to the Company's ownership. See the Notes to Financial Information - All Owned Hotel Operating Statistics and Results for further information on these pro forma statistics.

Due to low occupancy levels and/or state mandates, operations remain suspended at four hotels in the Company's portfolio as of November 4, 2020. The Company has provided a complete list of these suspended hotels on page 35 of its Third

Quarter 2020 Supplemental Financial Information available on the Company's website at www.hosthotels.com.

The following presents the monthly hotel operating results for the full portfolio during the periods presented:

July

July

August

August

September

September

2020

2019

Change

2020

2019

Change

2020

2019

Change

Number of hotels ........................

80

80

80

80

80

80

Number of rooms........................

46,670

46,670

46,674

46,674

46,674

46,674

Average Occupancy Percentage

12.9 %

82.5%

(69.6pts)

18.9 %

80.6 %

(61.8pts)

19.7 %

78.4%

(58.7pts)

Average Room Rate ...................

$

177.76

$ 229.15

(22.4)%

$

162.50

$218.11

(25.5)%

$

175.78

$

242.82

(27.6)%

RevPAR .....................................

$

22.94

$ 189.00

(87.9)%

$

30.67

$175.86

(82.6)%

$

34.64

$

190.40

(81.8)%

PAGE 3 OF 22

HOST HOTELS & RESORTS, INC. NEWS RELEASE

NOVEMBER 4, 2020

The following presents the monthly hotel operating results for the hotels without suspended operations during the periods presented:3

July

August

September

2020

2020

2020

Number of hotels (4) ...............................................................................

57

66

70

Number of rooms...................................................................................

32,478

38,146

41,118

Average Occupancy Percentage ...........................................................

17.9%

22.0%

22.1%

Average Room Rate ..............................................................................

$

178.56

$

163.41

$

174.93

RevPAR ................................................................................................

$

32.02

$

35.88

$

38.74

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 third quarter, demand continued to be primarily driven by drive-to and resort destinations. The following are the sequential results of the Company's consolidated portfolio transient, group and contract business:

Quarter ended September 30, 2020

Quarter ended June 30, 2020

Transient

Group

Contract

Transient

Group

Contract

Room nights (in thousands)...........

536

127

74

198

134

43

Percentage change in room nights

vs. same period in 2019 ...........

(75.1)%

(88.8)%

(57.7)%

(90.0)%

(90.0 )%

(74.1)%

Room Revenues (in millions).........

$

98

$

17

$

11

$

37

$

18

$

6

Percentage change in revenues

vs. same period in 2019 ...........

(80.9)%

(93.0)%

(69.3)%

(92.8)%

(94.3 )%

(83.3)%

The Company and its operators have focused on rebooking future business with its customers and have rebooked approximately 16% of group business that was cancelled in 2020 into future years.

CAPITAL EXPENDITURES

The Company's capital expenditures spending is expected to range from $475 million to $510 million for full year 2020:

Year-to-date ended

September 30, 2020

2020 Full Year Forecast

Actuals

Low-end of range

High-end of range

ROI - Marriott transformational capital program..............

$

141

$

175

$

180

ROI - All other ROI projects ............................................

121

150

160

Total ROI project spend ..................................................

262

325

340

Renewals and Replacements .........................................

122

150

170

Total Capital Expenditures..............................................

$

384

$

475

$

510

Through the third quarter of 2020, the Company completed approximately 78% of the total capital expenditure projects planned for the year. The full year forecast ROI capital expenditures includes $175 million to $180 million for the Marriott transformational capital program, which is reduced by approximately $20 million compared to the prior forecast as a result of savings on completed projects and construction timing. The Company expects to receive operating profit guarantees of approximately $20 million in 2020, including $5 million that was received in the third quarter of 2020 and $7 million expected in the fourth quarter.

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

DISPOSITIONS

On October 30, 2020, the Company sold 29 acres of land adjacent to The Phoenician hotel for approximately $66 million. The buyer plans for residential development on the land, including a mix of single family, villas and condominium units.

  1. Represents the hotels that were accepting reservations during the entirety of the month. Excludes the 23, 14, and 10 hotels with suspended operations in the months of July, August and September, respectively.

PAGE 4 OF 22

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Host Hotels & Resorts Inc. published this content on 04 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2020 21:40:05 UTC


© Publicnow 2020
All news about HOST HOTELS & RESORTS, INC
01/14Host Hotels & Resorts Announces Fourth Quarter and Full Year 2020 Earnings Ca..
GL
01/12HOST HOTELS & RESORTS : Raymond James Downgrades Host Hotels & Resorts to Market..
MT
2020HOST HOTELS & RESORTS : is Once Again One of America's Most Responsible Companie..
PU
2020HOST HOTELS & RESORTS : Citigroup Upgrades Host Hotels & Resorts to Buy From Neu..
MT
2020HOST HOTELS & RESORTS : Corporate Headquarters Achieves LEED Gold and Fitwel Cer..
PU
2020HOST HOTELS & RESORTS : Wells Fargo Downgrades Host Hotels & Resorts to Underwei..
MT
2020HOST HOTELS & RESORTS : Wells Fargo Downgrades Host Hotels & Resorts to Underwei..
MT
2020Host Hotels & Resorts Named to CDP's A List for Leading Effort Against Climat..
GL
2020HOST HOTELS & RESORTS : Members of Host's Management Team Elected to NAREIT's 20..
PU
2020Stifel Nicolaus Adjusts Price Target for Host Hotels & Resorts to $16 From $1..
MT
More news
Financials (USD)
Sales 2020 1 621 M - -
Net income 2020 -963 M - -
Net Debt 2020 3 194 M - -
P/E ratio 2020 -10,8x
Yield 2020 1,40%
Capitalization 10 361 M 10 361 M -
EV / Sales 2020 8,36x
EV / Sales 2021 5,65x
Nbr of Employees 175
Free-Float 98,8%
Chart HOST HOTELS & RESORTS, INC
Duration : Period :
Host Hotels & Resorts, Inc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends HOST HOTELS & RESORTS, INC
Short TermMid-TermLong Term
TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 22
Average target price 15,10 $
Last Close Price 14,69 $
Spread / Highest target 29,3%
Spread / Average Target 2,79%
Spread / Lowest Target -31,9%
EPS Revisions
Managers and Directors
NameTitle
James F. Risoleo President, Chief Executive Officer & Director
Richard Edwin Marriott Chairman
Sourav Ghosh Chief Financial Officer, Treasurer & EVP
John B. Morse Independent Director
Gordon Harold Smith Lead Independent Director
Sector and Competitors