Host Hotels & Resorts : First Quarter 2021 Earnings Press Release

SOURAV GHOSH	TEJAL ENGMAN
Chief Financial Officer	Investor Relations
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Host Hotels & Resorts, Inc. Reports Results for First Quarter 2021

Returns to Profitability at the Hotel-Level;

Acquires the Four Seasons Resort Orlando at Walt Disney World® Resort

BETHESDA, MD; May 4, 2021 - 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
Net loss	2021				2020			Change
$	(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 atwww.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 $771 million. These high- quality properties, located in attractive growth markets with strong demand drivers, are expected to benefit from robust recovery trajectories and are already performing better than we anticipated. In addition to executing meaningful acquisitions this year, we continue to work on redefining our hotel operating model with our managers and positioning our properties to gain market share, key strategic objectives that we believe will accelerate our recovery and strengthen our ability to deliver

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

HOST HOTELS & RESORTS, INC. NEWS RELEASE	MAY 4, 2021

long-term growth for our stockholders. Overall, we are pleased to end the first quarter following the most challenging year in lodging history feeling optimistic about the recovery in travel and excited about our relative strength at the beginning of the new lodging cycle."

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, representing 30% of rooms, an increase from 20 hotels, representing 24% 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-acrefamily-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				Quarter ended
	March 31, 2021				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)

1. 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 $7 million and $15 million, respectively. It also includes furlough benefit costs of $13 million in the fourth quarter of 2020.
2. Interest payments for the fourth quarter 2020 do not include cash debt extinguishment costs of $8 million, which are considered a financing activity on the Company's Statement of Cash Flows.

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HOST HOTELS & RESORTS, INC. NEWS RELEASE

MAY 4, 2021

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	January		February	February		March	March
		2021		2020		Change		2021			2020		Change		2021			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%	(51.9pts)		26.0%		77.2%	(51.2pts)		34.1%		29.3%	4.8pts
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	January		February	February		March	March
Number of hotels		2021		2019		Change		2021				2019		Change		2021		2019		Change
	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%	(49.9pts)		26.0%			77.0%	(51.0pts)		34.1%	81.4%	(47.3pts)
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 improved 61% 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.

1. Average room rates declined by just 9% compared to the first quarter of 2019 and improved by 18% compared to the fourth quarter of 2020.

1. 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.

Hotel Operating Expense Performance

• First Quarter 2021

1. Portfolio-widehotel operating costs, excluding severance, were nearly 60% lower compared to the first quarter of 2019, and only 15% higher compared to the fourth quarter of 2020, despite an approximately 50% increase in total revenues quarter over quarter.

1. 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.

1. Furloughed employees received healthcare benefits of approximately $12 million that were accrued in the fourth quarter of 2020.

1. 1. 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.
2. 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.

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HOST HOTELS & RESORTS, INC. NEWS RELEASE	MAY 4, 2021

• Operating Expense Trends

1. 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.

1. Re-introductionof 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 61%, 35%, and 4%, respectively, of its 2019 room sales.

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							Quarter ended
			March 31, 2021						December 31, 2020
Room nights (in thousands)		Transient		Group		Contract			Transient		Group		Contract
	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
ROI - Marriott transformational capital program	Actuals					Low-end of range				High-end of range
$	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 85% of this program by the end of 2021. The Company expects to receive approximately $15 million in operating profit guarantees in 2021 under the Marriott transformational capital program, including $5 million that was received in the first quarter.

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 of 3.0%, and no maturities until 2023.

Following the property transactions completed subsequent to quarter end, the Company's adjusted total available liquidity was approximately $1.5 billion, including the FF&E escrow reserves.

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HOST HOTELS & RESORTS, INC. NEWS RELEASE	MAY 4, 2021

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 $600 million. The shares would be offered and sold through sales agents in transactions that are deemed to be "at the market" offerings at then-current market prices. The Company is not obligated to sell any shares and considers the "at the market" stock offering program as one tool, among others, to raise capital when the Company believes conditions are advantageous and there is a compelling use of proceeds, including future potential acquisitions.

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-			High-
Interest expense	end of range			end of range
$	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

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