UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended date September 30, 20212022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number: 001-14625 (Host Hotels & Resorts, Inc.)

0-25087 (Host Hotels & Resorts, L.P.)

 

HOST HOTELS & RESORTS, INC.

HOST HOTELS & RESORTS, L.P.

(Exact name of registrant as specified in its charter)

 

 

Maryland (Host Hotels & Resorts, Inc.)

Delaware (Host Hotels & Resorts, L.P.)

(State or Other Jurisdiction of

Incorporation or Organization)

 

53-0085950

52-2095412

(I.R.S. Employer

Identification No.)

4747 Bethesda Ave, Suite 1300

Bethesda, Maryland

(Address of Principal Executive Offices)

 

20814

(Zip Code)

(240) 744-1000

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol

Name of Each Exchange on Which Registered

Host Hotels & Resorts, Inc.

 

Common Stock, $.01$0.01 par value

HST

The Nasdaq Stock Market LLC

Host Hotels & Resorts, L.P.

 

None

None

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Host Hotels & Resorts, Inc.

 

Yes  ☑

 

 

 

No ☐

 

Host Hotels & Resorts, L.P.

 

Yes  ☑

 

 

 

No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Host Hotels & Resorts, Inc.

 

Yes  ☑

 

 

 

No ☐

 

Host Hotels & Resorts, L.P.

 

Yes  ☑

 

 

 

No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Host Hotels & Resorts, Inc.

 

Large accelerated filer    ☑

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company

Emerging growth company

Host Hotels & Resorts, L.P.

 

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer    ☑

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Host Hotels & Resorts, Inc.

 

Yes ☐

 

 

 

No

 

Host Hotels & Resorts, L.P.

 

Yes ☐

 

 

 

No

 

As of November 2, 2021,2022, there were 714,035,318715,027,761 shares of Host Hotels & Resorts, Inc.’s common stock, $.01$0.01 par value per share, outstanding.


EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q of Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. Unless stated otherwise or the context requires otherwise, references to “Host Inc.” mean Host Hotels & Resorts, Inc., a Maryland corporation, and references to “Host L.P.” mean Host Hotels & Resorts, L.P., a Delaware limited partnership, and its consolidated subsidiaries, in cases where it is important to distinguish between Host Inc. and Host L.P. We use the terms “we,” “our” or “the company” to refer to Host Inc. and Host L.P. together, unless the context indicates otherwise.

Host Inc. operates as a self-managed and self-administered real estate investment trust (“REIT”). Host Inc. owns properties and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of the partnership interests (“OP units”). The remaining OP units are owned by various unaffiliated limited partners. As the sole general partner of Host L.P., Host Inc. has the exclusive and complete responsibility for Host L.P.’s day-to-day management and control. Management operates Host Inc. and Host L.P. as one enterprise. The management of Host Inc. consists of the same persons who direct the management of Host L.P. As general partner with control of Host L.P., Host Inc. consolidates Host L.P. for financial reporting purposes, and Host Inc. does not have significant assets other than its investment in Host L.P. Therefore, the assets and liabilities of Host Inc. and Host L.P. are substantially the same on their respective condensed consolidated financial statements and the disclosures of Host Inc. and Host L.P. also are substantially similar. For these reasons, we believe that the combination into a single report of the quarterly reports on Form 10-Q of Host Inc. and Host L.P. results in benefits to management and investors.

The substantive difference between the filings of Host Inc.’s and Host L.P.’s filings is the fact that Host Inc. is a REIT with public stock, while Host L.P. is a partnership with no publicly traded equity. In the condensed consolidated financial statements, this difference primarily is reflected in the equity (or partners’ capital for Host L.P.) section of the consolidated balance sheets and in the consolidated statements of equity (or partners’ capital for Host L.P.). Apart from the different equity treatment, the condensed consolidated financial statements of Host Inc. and Host L.P. are nearly identical.

This combined Form 10-Q for Host Inc. and Host L.P. includes, for each entity, separate interim financial statements (but combined footnotes), separate reports on disclosure controls and procedures and internal control over financial reporting and separate CEO/CFO certifications. In addition, with respect to any other financial and non-financial disclosure items required by Form 10-Q, any material differences between Host Inc. and Host L.P. are discussed separately herein. For a more detailed discussion of the substantive differences between Host Inc. and Host L.P. and why we believe the combined filing results in benefits to investors, see the discussion in the combined Annual Report on Form 10-K for the year ended December 31, 20202021 under the heading “Explanatory Note.”

i


HOST HOTELS & RESORTS, INC. AND HOST HOTELS & RESORTS, L.P.

INDEX

PART I. FINANCIAL INFORMATION

 

 

 

Page No.

Item 1.

 

Financial Statements for Host Hotels & Resorts, Inc.:

 

 

 

Condensed Consolidated Balance Sheets - September 30, 20212022 (unaudited) and December 31, 20202021

1

 

 

Condensed Consolidated Statements of Operations (unaudited) - Quarter and Year-to-date ended September 30, 20212022 and 20202021

2

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - Quarter and Year-to-date ended September 30, 20212022 and 20202021

3

 

 

Condensed Consolidated Statements of Cash Flows (unaudited) -Year-to-date ended September 30, 20212022 and 20202021

4

 

 

Financial Statements for Host Hotels & Resorts, L.P.:

 

 

Condensed Consolidated Balance Sheets - September 30, 20212022 (unaudited) and December 31, 20202021

6

 

 

Condensed Consolidated Statements of Operations (unaudited) - Quarter and Year-to-date ended September 30, 20212022 and 20202021

7

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - Quarter and Year-to-date ended September 30, 20212022 and 20202021

8

 

 

Condensed Consolidated Statements of Cash Flows (unaudited) - Year-to-date ended September 30, 20212022 and 20202021

9

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

11

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

4644

Item 4.

 

Controls and Procedures

4745

PART II. OTHER INFORMATION

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

4846

Item 6.

 

Exhibits

4947

ii


HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 20212022 and December 31, 20202021

(in millions, except share and per share amounts)

 

September 30, 2021

 

 

December 31, 2020

 

 

September 30, 2022

 

 

December 31, 2021

 

 

(unaudited)

 

 

 

 

 

unaudited

 

 

 

 

ASSETS

ASSETS

 

ASSETS

 

Property and equipment, net

 

$

10,124

 

 

$

9,416

 

 

$

9,481

 

 

$

9,994

 

Right-of-use assets

 

 

559

 

 

 

597

 

 

 

558

 

 

 

551

 

Assets held for sale

 

 

280

 

 

 

 

 

 

 

 

 

270

 

Due from managers

 

 

58

 

 

 

22

 

 

 

118

 

 

 

113

 

Advances to and investments in affiliates

 

 

62

 

 

 

21

 

 

 

138

 

 

 

42

 

Furniture, fixtures and equipment replacement fund

 

 

138

 

 

 

139

 

 

 

187

 

 

 

144

 

Notes receivable

 

 

413

 

 

 

 

Other

 

 

453

 

 

 

360

 

 

 

389

 

 

 

431

 

Cash and cash equivalents

 

 

1,038

 

 

 

2,335

 

 

 

883

 

 

 

807

 

Total assets

 

$

12,712

 

 

$

12,890

 

 

$

12,167

 

 

$

12,352

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY

LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY

 

LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY

 

Debt

 

 

 

 

 

 

 

 

 

 

Senior notes

 

$

3,068

 

 

$

3,065

 

 

$

3,113

 

 

$

3,109

 

Credit facility, including the term loans of $997

 

 

2,472

 

 

 

2,471

 

Other debt

 

 

5

 

 

 

5

 

Credit facility, including the term loans of $998 and $997, respectively

 

 

993

 

 

 

1,673

 

Mortgage and other debt

 

 

108

 

 

 

109

 

Total debt

 

 

5,545

 

 

 

5,541

 

 

 

4,214

 

 

 

4,891

 

Lease liabilities

 

 

572

 

 

 

610

 

 

 

570

 

 

 

564

 

Accounts payable and accrued expenses

 

 

91

 

 

 

71

 

 

 

162

 

 

 

85

 

Due to managers

 

 

55

 

 

 

64

 

 

 

74

 

 

 

42

 

Liabilities held for sale

 

 

37

 

 

 

 

Other

 

 

167

 

 

 

170

 

 

 

165

 

 

 

198

 

Total liabilities

 

 

6,467

 

 

 

6,456

 

 

 

5,185

 

 

 

5,780

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

119

 

 

 

108

 

 

 

165

 

 

 

126

 

 

 

 

 

 

 

 

 

 

 

 

Host Hotels & Resorts, Inc. stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

Common stock, par value $.01, 1,050 million shares authorized, 714.0 million shares and 705.4 million shares issued and outstanding, respectively

 

 

7

 

 

 

7

 

Common stock, par value $.01, 1,050 million shares authorized, 714.9 million
shares and
714.1 million shares issued and outstanding, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

7,700

 

 

 

7,568

 

 

 

7,738

 

 

 

7,702

 

Accumulated other comprehensive loss

 

 

(75

)

 

 

(74

)

 

 

(77

)

 

 

(76

)

Deficit

 

 

(1,511

)

 

 

(1,180

)

 

 

(856

)

 

 

(1,192

)

Total equity of Host Hotels & Resorts, Inc. stockholders

 

 

6,121

 

 

 

6,321

 

 

 

6,812

 

 

 

6,441

 

Non-redeemable non-controlling interests—other consolidated partnerships

 

 

5

 

 

 

5

 

 

 

5

 

 

 

5

 

Total equity

 

 

6,126

 

 

 

6,326

 

 

 

6,817

 

 

 

6,446

 

Total liabilities, non-controlling interests and equity

 

$

12,712

 

 

$

12,890

 

 

$

12,167

 

 

$

12,352

 

 

 

 

 

 

 

 

 

 

 

See notes to condensed consolidated financial statements.

1


HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter and Year-to-date ended September 30, 20212022 and 20202021

(unaudited, in millions, except per share amounts)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

557

 

$

126

 

$

1,237

 

$

813

 

 

$

746

 

 

$

557

 

 

$

2,251

 

 

$

1,237

 

Food and beverage

 

 

191

 

31

 

405

 

372

 

 

 

330

 

 

 

191

 

 

 

1,032

 

 

 

405

 

Other

 

 

96

 

 

41

 

 

250

 

 

168

 

 

 

113

 

 

 

96

 

 

 

361

 

 

 

250

 

Total revenues

 

 

844

 

 

198

 

 

1,892

 

 

1,353

 

 

 

1,189

 

 

 

844

 

 

 

3,644

 

 

 

1,892

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

150

 

69

 

324

 

299

 

 

 

190

 

 

 

150

 

 

 

539

 

 

 

324

 

Food and beverage

 

 

146

 

72

 

313

 

356

 

 

 

230

 

 

 

146

 

 

 

675

 

 

 

313

 

Other departmental and support expenses

 

 

252

 

109

 

621

 

541

 

 

 

300

 

 

 

252

 

 

 

873

 

 

 

621

 

Management fees

 

 

27

 

5

 

59

 

33

 

 

 

48

 

 

 

27

 

 

 

150

 

 

 

59

 

Other property-level expenses

 

 

82

 

77

 

239

 

240

 

 

 

90

 

 

 

82

 

 

 

252

 

 

 

239

 

Depreciation and amortization

 

 

263

 

166

 

597

 

498

 

 

 

164

 

 

 

263

 

 

 

498

 

 

 

597

 

Corporate and other expenses

 

 

24

 

18

 

73

 

68

 

 

 

29

 

 

 

24

 

 

 

77

 

 

 

73

 

Gain on insurance and business interruption settlements

 

 

(5

)

 

 

 

 

(5

)

 

 

 

 

 

(10

)

 

 

(5

)

 

 

(17

)

 

 

(5

)

Total operating costs and expenses

 

 

939

 

 

516

 

 

2,221

 

 

2,035

 

 

 

1,041

 

 

 

939

 

 

 

3,047

 

 

 

2,221

 

OPERATING LOSS

 

 

(95

)

 

(318

)

 

(329

)

 

(682

)

OPERATING PROFIT (LOSS)

 

 

148

 

 

 

(95

)

 

 

597

 

 

 

(329

)

Interest income

 

 

1

 

 

2

 

7

 

 

 

10

 

 

 

1

 

 

 

17

 

 

 

2

 

Interest expense

 

 

(43

)

 

(66

)

 

(128

)

 

(143

)

 

 

(40

)

 

 

(43

)

 

 

(113

)

 

 

(128

)

Other gains

 

 

2

 

 

4

 

13

 

 

 

5

 

 

 

2

 

 

 

19

 

 

 

4

 

Equity in earnings (losses) of affiliates

 

 

2

 

 

(5

)

 

 

36

 

 

(26

)

 

 

(1

)

 

 

2

 

 

 

3

 

 

 

36

 

LOSS BEFORE INCOME TAXES

 

 

(133

)

 

(389

)

 

(415

)

 

(831

)

Benefit for income taxes

 

 

13

 

73

 

 

81

 

 

156

 

NET LOSS

 

 

(120

)

 

 

(316

)

 

 

(334

)

 

(675

)

Less: Net loss attributable to non-controlling interests

 

 

1

 

 

3

 

 

3

 

 

7

 

NET LOSS ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC.

 

$

(119

)

 

$

(313

)

 

$

(331

)

 

$

(668

)

Basic loss per common share

 

$

(.17

)

 

$

(.44

)

 

$

(.47

)

 

$

(.95

)

Diluted loss per common share

 

$

(.17

)

 

$

(.44

)

 

$

(.47

)

 

$

(.95

)

INCOME (LOSS) BEFORE INCOME TAXES

 

 

122

 

 

 

(133

)

 

 

523

 

 

 

(415

)

Benefit (provision) for income taxes

 

 

(6

)

 

 

13

 

 

 

(29

)

 

 

81

 

NET INCOME (LOSS)

 

 

116

 

 

 

(120

)

 

 

494

 

 

 

(334

)

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

 

 

(2

)

 

 

1

 

 

 

(8

)

 

 

3

 

NET INCOME (LOSS) ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC.

 

$

114

 

 

$

(119

)

 

$

486

 

 

$

(331

)

Basic earnings (loss) per common share

 

$

0.16

 

 

$

(0.17

)

 

$

0.68

 

 

$

(0.47

)

Diluted earnings (loss) per common share

 

$

0.16

 

 

$

(0.17

)

 

$

0.68

 

 

$

(0.47

)

See notes to condensed consolidated financial statements.

2


HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter and Year-to-date ended September 30, 20212022 and 20202021

(unaudited, in millions)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

NET LOSS

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

NET INCOME (LOSS)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation and other comprehensive income of unconsolidated affiliates

 

 

(5

)

 

 

(5

)

 

 

(1

)

 

 

(24

)

 

 

(5

)

 

 

(5

)

 

 

(4

)

 

 

(1

)

Change in fair value of derivative instruments

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

2

 

 

 

1

 

 

 

3

 

 

 

 

OTHER COMPREHENSIVE LOSS, NET OF TAX

 

 

(4

)

 

 

(5

)

 

 

(1

)

 

 

(23

)

 

 

(3

)

 

 

(4

)

 

 

(1

)

 

 

(1

)

COMPREHENSIVE LOSS

 

 

(124

)

 

 

(321

)

 

 

(335

)

 

 

(698

)

Less: Comprehensive loss attributable to non-controlling interests

 

 

1

 

 

 

3

 

 

 

3

 

 

 

7

 

COMPREHENSIVE LOSS ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC.

 

$

(123

)

 

$

(318

)

 

$

(332

)

 

$

(691

)

COMPREHENSIVE INCOME (LOSS)

 

 

113

 

 

 

(124

)

 

 

493

 

 

 

(335

)

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

 

 

(2

)

 

 

1

 

 

 

(8

)

 

 

3

 

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC.

 

$

111

 

 

$

(123

)

 

$

485

 

 

$

(332

)

See notes to condensed consolidated financial statements.

3


HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year-to-date ended September 30, 20212022 and 20202021

(unaudited, in millions)

 

 

Year-to-date ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(334

)

 

$

(675

)

Adjustments to reconcile net loss to net cash provided by (used in) operations:

 

 

 

 

 

Net income (loss)

 

$

494

 

 

$

(334

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:

 

 

 

 

 

Depreciation and amortization

 

 

597

 

 

 

498

 

 

 

498

 

 

 

597

 

Amortization of finance costs, discounts and premiums, net

 

 

7

 

 

 

6

 

 

 

8

 

 

 

7

 

Loss on extinguishment of debt

 

 

 

 

 

28

 

Stock compensation expense

 

 

13

 

 

 

11

 

 

 

19

 

 

 

13

 

Other gains

 

 

(4

)

 

 

(13

)

 

 

(19

)

 

 

(4

)

Equity in (earnings) losses of affiliates

 

 

(36

)

 

 

26

 

Gain on property insurance settlement

 

 

(6

)

 

 

 

Equity in earnings of affiliates

 

 

(3

)

 

 

(36

)

Change in due from/to managers

 

 

(78

)

 

 

130

 

 

 

32

 

 

 

(78

)

Distributions from investments in affiliates

 

 

4

 

 

 

 

 

 

23

 

 

 

4

 

Changes in other assets

 

 

(99

)

 

 

(161

)

 

 

7

 

 

 

(99

)

Changes in other liabilities

 

 

8

 

 

 

(14

)

 

 

3

 

 

 

8

 

Net cash provided by (used in) operating activities

 

 

78

 

 

 

(164

)

Net cash provided by operating activities

 

 

1,056

 

 

 

78

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Proceeds from sales of assets, net

 

 

8

 

 

 

11

 

 

 

233

 

 

 

8

 

Proceeds from loan receivable

 

 

9

 

 

 

28

 

 

 

 

 

 

9

 

Advances to and investments in affiliates

 

 

(9

)

 

 

(4

)

 

 

(59

)

 

 

(9

)

Acquisitions

 

 

(1,217

)

 

 

 

 

 

 

 

 

(1,217

)

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

Renewals and replacements

 

 

(92

)

 

 

(122

)

 

 

(117

)

 

 

(92

)

Return on investment

 

 

(201

)

 

 

(262

)

 

 

(240

)

 

 

(201

)

Property insurance proceeds

 

 

11

 

 

 

 

Net cash used in investing activities

 

 

(1,502

)

 

 

(349

)

 

 

(172

)

 

 

(1,502

)

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Financing costs

 

 

(3

)

 

 

(11

)

 

 

 

 

 

(3

)

Issuances of debt

 

 

 

 

 

740

 

Draws on credit facility

 

 

 

 

 

2,245

 

Repayment of credit facility

 

 

 

 

 

(750

)

 

 

(683

)

 

 

 

Repurchase/redemption of senior notes

 

 

 

 

 

(364

)

Redemption of preferred equity units of Host LP

 

 

 

 

 

(22

)

Debt extinguishment costs

 

 

 

 

 

(27

)

Mortgage debt and other prepayments and scheduled maturities

 

 

(1

)

 

 

 

Issuance of common stock

 

 

138

 

 

 

 

 

 

1

 

 

 

138

 

Common stock repurchase

 

 

 

 

 

(147

)

Dividends on common stock

 

 

 

 

 

(320

)

 

 

(65

)

 

 

 

Distributions and payments to non-controlling interests

 

 

 

 

 

(3

)

 

 

(2

)

 

 

 

Other financing activities

 

 

(8

)

 

 

(4

)

 

 

(9

)

 

 

(8

)

Net cash provided by financing activities

 

 

127

 

 

 

1,337

 

Net cash provided by (used in) financing activities

 

 

(759

)

 

 

127

 

Effects of exchange rate changes on cash held

 

 

 

 

 

(6

)

 

 

(4

)

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(1,297

)

 

 

818

 

 

 

121

 

 

 

(1,297

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

 

2,476

 

 

 

1,750

 

 

 

953

 

 

 

2,476

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

 

$

1,179

 

 

$

2,568

 

 

$

1,074

 

 

$

1,179

 

See notes to condensed consolidated financial statements.

4


HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

Year-to-date ended September 30, 20212022 and 20202021

(unaudited)

Supplemental disclosure of cash flow information (in millions):

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet to the amount shown in the statements of cash flows:

 

September 30, 2021

 

 

September 30, 2020

 

 

September 30, 2022

 

 

September 30, 2021

 

Cash and cash equivalents

 

$

1,038

 

 

$

2,430

 

 

$

883

 

 

$

1,038

 

Restricted cash (included in other assets)

 

 

3

 

 

 

 

 

 

4

 

 

 

3

 

Cash included in furniture, fixtures and equipment replacement fund

 

 

138

 

 

 

138

 

 

 

187

 

 

 

138

 

Total cash and cash equivalents and restricted cash shown in the statements of cash flows

 

$

1,179

 

 

$

2,568

 

 

$

1,074

 

 

$

1,179

 

The following table presents cash paid (received) for the following:

 

Year-to-date ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

Total interest paid

 

$

115

 

 

$

126

 

 

$

100

 

 

$

115

 

Income taxes paid (refunds received)

 

$

(3

)

 

$

2

 

Income tax refunds received

 

$

(7

)

 

$

(3

)

Supplemental schedule of noncash investing and financing activities:

On January 20, 2022, we entered into definitive agreements with Noble Investment Group, LLC, and certain other entities and persons related to Noble Investment Group, LLC, pursuant to which we made an investment in a joint venture with Noble Investment Group. In connection with the investment, Host Hotels & Resorts, L.P. issued approximately 3.2 million OP units valued at approximately $56 million.

In connection with the sales of the Sheraton Boston Hotel in February 2022 and the Sheraton New York Times Square Hotel in April 2022, we issued bridge loans to the buyers for $163 million and $250 million, respectively. The proceeds received from the sales are net of the loans.

In 2021, non-cash consideration for the acquisition of the Four Seasons Resort Orlando at Walt Disney World® Resort included the assumption of hotel-level liabilities of approximately $24 million, consisting primarily of advance deposits received from guests for future stays, that werethe cash related to which was retained by the seller.

In connection with the sale of a parcel of land adjacent to The Phoenician hotel in 2020, we received as consideration a note receivable for $9 million. The proceeds received in 2020 from the sale are net of this note receivable. The note receivable was collected in January 2021.

See notes to condensed consolidated financial statements.

5


HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 20212022 and December 31, 20202021

(in millions)

 

 

September 30, 2021

 

 

December 31, 2020

 

 

September 30, 2022

 

 

December 31, 2021

 

 

(unaudited)

 

 

 

 

 

unaudited

 

 

 

 

ASSETS

ASSETS

 

ASSETS

 

Property and equipment, net

 

$

10,124

 

 

$

9,416

 

 

$

9,481

 

 

$

9,994

 

Right-of-use assets

 

 

559

 

 

 

597

 

 

 

558

 

 

 

551

 

Assets held for sale

 

 

280

 

 

 

 

 

 

 

 

 

270

 

Due from managers

 

 

58

 

 

 

22

 

 

 

118

 

 

 

113

 

Advances to and investments in affiliates

 

 

62

 

 

 

21

 

 

 

138

 

 

 

42

 

Furniture, fixtures and equipment replacement fund

 

 

138

 

 

 

139

 

 

 

187

 

 

 

144

 

Notes receivable

 

 

413

 

 

 

 

Other

 

 

453

 

 

 

360

 

 

 

389

 

 

 

431

 

Cash and cash equivalents

 

 

1,038

 

 

 

2,335

 

 

 

883

 

 

 

807

 

Total assets

 

$

12,712

 

 

$

12,890

 

 

$

12,167

 

 

$

12,352

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, LIMITED PARTNERSHIP INTERESTS OF THIRD PARTIES AND CAPITAL

LIABILITIES, LIMITED PARTNERSHIP INTERESTS OF THIRD PARTIES AND CAPITAL

 

LIABILITIES, LIMITED PARTNERSHIP INTERESTS OF THIRD PARTIES AND CAPITAL

 

Debt

 

 

 

 

 

 

 

 

 

 

Senior notes

 

$

3,068

 

 

$

3,065

 

 

$

3,113

 

 

$

3,109

 

Credit facility, including the term loans of $997

 

 

2,472

 

 

 

2,471

 

Other debt

 

 

5

 

 

 

5

 

Credit facility, including the term loans of $998 and $997, respectively

 

 

993

 

 

 

1,673

 

Mortgage and other debt

 

 

108

 

 

 

109

 

Total debt

 

 

5,545

 

 

 

5,541

 

 

 

4,214

 

 

 

4,891

 

Lease liabilities

 

 

572

 

 

 

610

 

 

 

570

 

 

 

564

 

Accounts payable and accrued expenses

 

 

91

 

 

 

71

 

 

 

162

 

 

 

85

 

Due to managers

 

 

55

 

 

 

64

 

 

 

74

 

 

 

42

 

Liabilities held for sale

 

 

37

 

 

 

 

Other

 

 

167

 

 

 

170

 

 

 

165

 

 

 

198

 

Total liabilities

 

 

6,467

 

 

 

6,456

 

 

 

5,185

 

 

 

5,780

 

 

 

 

 

 

 

 

 

 

 

 

Limited partnership interests of third parties

 

 

119

 

 

 

108

 

 

 

165

 

 

 

126

 

 

 

 

 

 

 

 

 

 

 

 

Host Hotels & Resorts, L.P. capital:

 

 

 

 

 

 

 

 

 

 

 

General partner

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

Limited partner

 

 

6,195

 

 

 

6,394

 

 

 

6,888

 

 

 

6,516

 

Accumulated other comprehensive loss

 

 

(75

)

 

 

(74

)

 

 

(77

)

 

 

(76

)

Total Host Hotels & Resorts, L.P. capital

 

 

6,121

 

 

 

6,321

 

 

 

6,812

 

 

 

6,441

 

Non-controlling interests—consolidated partnerships

 

 

5

 

 

 

5

 

 

 

5

 

 

 

5

 

Total capital

 

 

6,126

 

 

 

6,326

 

 

 

6,817

 

 

 

6,446

 

Total liabilities, limited partnership interests of third parties and capital

 

$

12,712

 

 

$

12,890

 

 

$

12,167

 

 

$

12,352

 

See notes to condensed consolidated financial statements.

6


HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter and Year-to-date ended September 30, 20212022 and 20202021

(unaudited, in millions, except per unit amounts)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

557

 

$

126

 

$

1,237

 

$

813

 

 

$

746

 

 

$

557

 

 

$

2,251

 

 

$

1,237

 

Food and beverage

 

 

191

 

31

 

405

 

372

 

 

 

330

 

 

 

191

 

 

 

1,032

 

 

 

405

 

Other

 

 

96

 

 

41

 

 

250

 

 

168

 

 

 

113

 

 

 

96

 

 

 

361

 

 

 

250

 

Total revenues

 

 

844

 

 

198

 

 

1,892

 

 

1,353

 

 

 

1,189

 

 

 

844

 

 

 

3,644

 

 

 

1,892

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

150

 

69

 

324

 

299

 

 

 

190

 

 

 

150

 

 

 

539

 

 

 

324

 

Food and beverage

 

 

146

 

72

 

313

 

356

 

 

 

230

 

 

 

146

 

 

 

675

 

 

 

313

 

Other departmental and support expenses

 

 

252

 

109

 

621

 

541

 

 

 

300

 

 

 

252

 

 

 

873

 

 

 

621

 

Management fees

 

 

27

 

5

 

59

 

33

 

 

 

48

 

 

 

27

 

 

 

150

 

 

 

59

 

Other property-level expenses

 

 

82

 

77

 

239

 

240

 

 

 

90

 

 

 

82

 

 

 

252

 

 

 

239

 

Depreciation and amortization

 

 

263

 

166

 

597

 

498

 

 

 

164

 

 

 

263

 

 

 

498

 

 

 

597

 

Corporate and other expenses

 

 

24

 

18

 

73

 

68

 

 

 

29

 

 

 

24

 

 

 

77

 

 

 

73

 

Gain on insurance and business interruption settlements

 

 

(5

)

 

 

 

 

(5

)

 

 

 

 

 

(10

)

 

 

(5

)

 

 

(17

)

 

 

(5

)

Total operating costs and expenses

 

 

939

 

 

516

 

 

2,221

 

 

2,035

 

 

 

1,041

 

 

 

939

 

 

 

3,047

 

 

 

2,221

 

OPERATING LOSS

 

 

(95

)

 

(318

)

 

(329

)

 

(682

)

OPERATING PROFIT (LOSS)

 

 

148

 

 

 

(95

)

 

 

597

 

 

 

(329

)

Interest income

 

 

1

 

 

2

 

7

 

 

 

10

 

 

 

1

 

 

 

17

 

 

 

2

 

Interest expense

 

 

(43

)

 

(66

)

 

(128

)

 

(143

)

 

 

(40

)

 

 

(43

)

 

 

(113

)

 

 

(128

)

Other gains

 

 

2

 

 

4

 

13

 

 

 

5

 

 

 

2

 

 

 

19

 

 

 

4

 

Equity in earnings (losses) of affiliates

 

 

2

 

 

(5

)

 

 

36

 

 

(26

)

 

 

(1

)

 

 

2

 

 

 

3

 

 

 

36

 

LOSS BEFORE INCOME TAXES

 

 

(133

)

 

(389

)

 

(415

)

 

(831

)

Benefit for income taxes

 

 

13

 

73

 

 

81

 

 

156

 

NET LOSS

 

 

(120

)

 

 

(316

)

 

 

(334

)

 

(675

)

INCOME (LOSS) BEFORE INCOME TAXES

 

 

122

 

 

 

(133

)

 

 

523

 

 

 

(415

)

Benefit (provision) for income taxes

 

 

(6

)

 

 

13

 

 

 

(29

)

 

 

81

 

NET INCOME (LOSS)

 

 

116

 

 

 

(120

)

 

 

494

 

 

 

(334

)

Less: Net income attributable to non-controlling interests

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

 

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

(1

)

NET LOSS ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P.

 

$

(121

)

 

$

(317

)

 

$

(335

)

 

$

(675

)

Basic loss per common unit

 

$

(.17

)

 

$

(.45

)

 

$

(.48

)

 

$

(.97

)

Diluted loss per common unit

 

$

(.17

)

 

$

(.45

)

 

$

(.48

)

 

$

(.97

)

NET INCOME (LOSS) ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P.

 

$

115

 

 

$

(121

)

 

$

493

 

 

$

(335

)

Basic earnings (loss) per common unit

 

$

0.16

 

 

$

(0.17

)

 

$

0.69

 

 

$

(0.48

)

Diluted earnings (loss) per common unit

 

$

0.16

 

 

$

(0.17

)

 

$

0.69

 

 

$

(0.48

)

See notes to condensed consolidated financial statements.

7


HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter and Year-to-date ended September 30, 20212022 and 20202021

(unaudited, in millions)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

NET LOSS

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

NET INCOME (LOSS)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation and other comprehensive income of unconsolidated affiliates

 

 

(5

)

 

 

(5

)

 

 

(1

)

 

 

(24

)

 

 

(5

)

 

 

(5

)

 

 

(4

)

 

 

(1

)

Change in fair value of derivative instruments

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

2

 

 

 

1

 

 

 

3

 

 

 

 

OTHER COMPREHENSIVE LOSS, NET OF TAX

 

 

(4

)

 

 

(5

)

 

 

(1

)

 

 

(23

)

 

 

(3

)

 

 

(4

)

 

 

(1

)

 

 

(1

)

COMPREHENSIVE LOSS

 

 

(124

)

 

 

(321

)

 

 

(335

)

 

 

(698

)

COMPREHENSIVE INCOME (LOSS)

 

 

113

 

 

 

(124

)

 

 

493

 

 

 

(335

)

Less: Comprehensive income attributable to non-controlling interests

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

 

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

(1

)

COMPREHENSIVE LOSS ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P.

 

$

(125

)

 

$

(322

)

 

$

(336

)

 

$

(698

)

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P.

 

$

112

 

 

$

(125

)

 

$

492

 

 

$

(336

)

See notes to condensed consolidated financial statements.

8


HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year-to-date ended September 30, 20212022 and 20202021

(unaudited, in millions)

 

Year-to-date ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(334

)

 

$

(675

)

Adjustments to reconcile net loss to net cash provided by (used in) operations:

 

 

 

 

 

Net income (loss)

 

$

494

 

 

$

(334

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:

 

 

 

 

 

Depreciation and amortization

 

 

597

 

 

 

498

 

 

 

498

 

 

 

597

 

Amortization of finance costs, discounts and premiums, net

 

 

7

 

 

 

6

 

 

 

8

 

 

 

7

 

Loss on extinguishment of debt

 

 

 

 

 

28

 

Stock compensation expense

 

 

13

 

 

 

11

 

 

 

19

 

 

 

13

 

Other gains

 

 

(4

)

 

 

(13

)

 

 

(19

)

 

 

(4

)

Equity in (earnings) losses of affiliates

 

 

(36

)

 

 

26

 

Gain on property insurance settlement

 

 

(6

)

 

 

 

Equity in earnings of affiliates

 

 

(3

)

 

 

(36

)

Change in due from/to managers

 

 

(78

)

 

 

130

 

 

 

32

 

 

 

(78

)

Distributions from investments in affiliates

 

 

4

 

 

 

 

 

 

23

 

 

 

4

 

Changes in other assets

 

 

(99

)

 

 

(161

)

 

 

7

 

 

 

(99

)

Changes in other liabilities

 

 

8

 

 

 

(14

)

 

 

3

 

 

 

8

 

Net cash provided by (used in) operating activities

 

 

78

 

 

 

(164

)

Net cash provided by operating activities

 

 

1,056

 

 

 

78

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Proceeds from sales of assets, net

 

 

8

 

 

 

11

 

 

 

233

 

 

 

8

 

Proceeds from loan receivable

 

 

9

 

 

 

28

 

 

 

 

 

 

9

 

Advances to and investments in affiliates

 

 

(9

)

 

 

(4

)

 

 

(59

)

 

 

(9

)

Acquisitions

 

 

(1,217

)

 

 

 

 

 

 

 

 

(1,217

)

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

Renewals and replacements

 

 

(92

)

 

 

(122

)

 

 

(117

)

 

 

(92

)

Return on investment

 

 

(201

)

 

 

(262

)

 

 

(240

)

 

 

(201

)

Property insurance proceeds

 

 

11

 

 

 

 

Net cash used in investing activities

 

 

(1,502

)

 

 

(349

)

 

 

(172

)

 

 

(1,502

)

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

Financing costs

 

 

(3

)

 

 

(11

)

 

 

 

 

 

(3

)

Issuances of debt

 

 

 

 

 

740

 

Draws on credit facility

 

 

 

 

 

2,245

 

Repayment of credit facility

 

 

 

 

 

(750

)

 

 

(683

)

 

 

 

Repurchase/redemption of senior notes

 

 

 

 

 

(364

)

Redemption of preferred OP units

 

 

 

 

 

(22

)

Debt extinguishment costs

 

 

 

 

 

(27

)

Mortgage debt and other prepayments and scheduled maturities

 

 

(1

)

 

 

 

Issuance of common OP units

 

 

138

 

 

 

 

 

 

1

 

 

 

138

 

Repurchase of common OP units

 

 

 

 

 

(147

)

Distributions on common OP units

 

 

 

 

 

(323

)

 

 

(66

)

 

 

 

Distributions and payments to non-controlling interests

 

 

(1

)

 

 

 

Other financing activities

 

 

(8

)

 

 

(4

)

 

 

(9

)

 

 

(8

)

Net cash provided by financing activities

 

 

127

 

 

 

1,337

 

Net cash provided by (used in) financing activities

 

 

(759

)

 

 

127

 

Effects of exchange rate changes on cash held

 

 

 

 

 

(6

)

 

 

(4

)

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(1,297

)

 

 

818

 

 

 

121

 

 

 

(1,297

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

 

2,476

 

 

 

1,750

 

 

 

953

 

 

 

2,476

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

 

$

1,179

 

 

$

2,568

 

 

$

1,074

 

 

$

1,179

 

See notes to condensed consolidated financial statements.

9


HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

Year-to-date ended September 30, 20212022 and 20202021

(unaudited)

Supplemental disclosure of cash flow information (in millions):

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet to the amount shown in the statements of cash flows:

 

September 30, 2021

 

 

September 30, 2020

 

 

September 30, 2022

 

 

September 30, 2021

 

Cash and cash equivalents

 

$

1,038

 

 

$

2,430

 

 

$

883

 

 

$

1,038

 

Restricted cash (included in other assets)

 

 

3

 

 

 

 

 

 

4

 

 

 

3

 

Cash included in furniture, fixtures and equipment replacement fund

 

 

138

 

 

 

138

 

 

 

187

 

 

 

138

 

Total cash and cash equivalents and restricted cash shown in the statements of cash flows

 

$

1,179

 

 

$

2,568

 

 

$

1,074

 

 

$

1,179

 

The following table presents cash paid (received) for the following:

 

Year-to-date ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

Total interest paid

 

$

115

 

 

$

126

 

 

$

100

 

 

$

115

 

Income taxes paid (refunds received)

 

$

(3

)

 

$

2

 

Income tax refunds received

 

$

(7

)

 

$

(3

)

Supplemental schedule of noncash investing and financing activities:

On January 20, 2022, we entered into definitive agreements with Noble Investment Group, LLC, and certain other entities and persons related to Noble Investment Group, LLC, pursuant to which we made an investment in a joint venture with Noble Investment Group. In connection with the investment, Host Hotels & Resorts, L.P. issued approximately 3.2 million OP units valued at approximately $56 million.

In connection with the sales of the Sheraton Boston Hotel in February 2022 and the Sheraton New York Times Square Hotel in April 2022, we issued bridge loans to the buyers for $163 million and $250 million, respectively. The proceeds received from the sales are net of the loans.

In 2021, non-cash consideration for the acquisition of the Four Seasons Resort Orlando at Walt Disney World® Resort included the assumption of hotel-level liabilities of approximately $24 million, consisting primarily of advance deposits received from guests for future stays, that werethe cash related to which was retained by the seller.

In connection with the sale of a parcel of land adjacent to The Phoenician hotel in 2020, we received as consideration a note receivable for $9 million. The proceeds received in 2020 from the sale are net of this note receivable. The note receivable was collected in January 2021.

See notes to condensed consolidated financial statements.

10


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)

1.

Organization

Description of Business

Host Hotels & Resorts, Inc. operates as a self-managed and self-administered real estate investment trust (“REIT”), with its operations conducted solely through Host Hotels & Resorts, L.P. and its subsidiaries. Host Hotels & Resorts, L.P., a Delaware limited partnership, operates through an umbrella partnership structure, with Host Hotels & Resorts, Inc., a Maryland corporation, as its sole general partner. In the notes to these unaudited condensed consolidated financial statements, we use the terms “we” or “our” to refer to Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. together, unless the context indicates otherwise. We also use the term “Host Inc.” specifically to refer to Host Hotels & Resorts, Inc. and the term “Host L.P.” specifically to refer to Host Hotels & Resorts, L.P. in cases where it is important to distinguish between Host Inc. and Host L.P. As of September 30, 2021,2022, Host Inc. holds approximately 99% of Host L.P.’s partnership interests.

Liquidity and Management’s Plans

The COVID-19 pandemic has had a significant adverse impact on U.S. and global economic activity and has contributed to significant volatility in financial markets beginning in the first quarter of 2020. While many of the restrictive measures put in place in jurisdictions where we own hotels have been lifted, the COVID-19 pandemic continues to negatively impact the U.S. lodging industry generally and our company specifically.

At the start of the pandemic, we suspended operations at 35 hotels. As of September 30, 2021, all hotels that previously suspended operations have resumed operations and are currently open. While the U.S. economic recovery has accelerated and hotel operations have improved during each quarter of the year, the pandemic continues to have a material negative impact on our financial results and cash flows. In 2020, we drew down $1.5 billion on the revolver portion of our credit facility as a precautionary measure in order to increase our cash position and preserve financial flexibility. We are continuing to take measures to maintain our liquidity, including operating expense reductions and the suspension of dividends and common stock repurchases. We also have reached agreements with our hotel managers to temporarily suspend furniture, fixture and equipment (“FF&E”) replacement fund contributions for our hotels and to defer certain hotel initiatives and brand standards.

Consolidated Portfolio

As of September 30, 2021,2022, our consolidated portfolio, primarily consisting of luxury and upper upscale hotels, is located in the following countries:

Hotels

United States

72

80

Brazil

3

Canada

2

Total

77

85

11


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

2.

Summary of Significant Accounting Policies

We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10–K for the year ended December 31, 2020.2021.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of September 30, 2021,2022, and the results of our operations for the quarter and year-to-date periods ended September 30, 20212022 and 2020,2021, respectively, and cash flows for the year-to-date periods ended September 30, 20212022 and 2020,2021, respectively. Interim results are not necessarily indicative of full year performance because of the effect of seasonal variations as well as the impact from the COVID-19 pandemic.

Three of the partnerships in which we own an interest are considered variable interest entities (VIEs) as the general partner maintains control over the decisions that most significantly impact such partnerships. These VIEs include the operating partnership, Host L.P., which is consolidated by Host Inc., of which Host Inc. is the sole general partner and holds approximately 99% of its partnership interests; the consolidated partnership that owns the Houston Airport Marriott at George Bush Intercontinental; and the unconsolidated partnership that owns the Philadelphia Marriott Downtown. Host Inc.’s sole significant asset is its investment in Host L.P. and, consequently, substantially all of Host Inc.’s assets and liabilities consistsconsist of the assets and liabilities of Host L.P. All of Host Inc.’s debt is an obligation of Host L.P. and may be repaid only with assets of Host L.P.

ReclassificationsNotes Receivable

Certain prior year financial statement amounts have been reclassifiedAt September 30, 2022, our notes receivable consist of bridge loans issued in connection with hotel sales. In conjunction with our dispositions, we may issue a bridge loan to conformthe purchaser to facilitate the sale. These bridge loans are collateralized by the corresponding sold hotel and in the event of a default of the loan, we would seek to enforce our rights

11


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

against the collateral in accordance with the terms of the loan agreement. The bridge loans are recorded at amortized cost, on an individual asset basis. We recognize interest as it is earned and include accrued interest receivable in other assets on the unaudited condensed consolidated balance sheets. We individually assess our notes receivable for credit losses quarterly and estimate any credit losses based on an analysis of several factors, primarily the value of the hotel collateral, as well as current year presentation. economic conditions and historical trends.

3.

Earnings (Loss) Per Common Share (Unit)

Basic earnings (loss) per common share (unit) is computed by dividing net income (loss) attributable to common stockholders (unitholders) by the weighted average number of shares of Host Inc. common stock or Host L.P. common units outstanding. Diluted earnings (loss) per common share (unit) is computed by dividing net income (loss) attributable to common stockholders (unitholders), as adjusted for potentially dilutive securities, by the weighted average number of shares of Host Inc. common stock or Host L.P. common units outstanding plus other potentially dilutive securities. Dilutive securities may include shares granted under comprehensive stock plans or the Host L.P. common units distributed to Host Inc. to support such granted shares, granted, and other non-controlling interests that have the option to convert their limited partner interests to Host L.P. common units. No effect is shown for any securities that are anti-dilutive. We have 7.110.1 million Host L.P. common units, which are convertible into 7.310.4 million Host Inc. common shares, that are not included in

12


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Host Inc.’s calculation of earnings (loss) per share as their effect is not dilutive. The calculation of Host Inc. basic and diluted earnings (loss) per common share is shown below (in millions, except per share amounts):

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

Less: Net loss attributable to non-controlling interests

 

 

1

 

 

 

3

 

 

 

3

 

 

 

7

 

Net loss attributable to Host Inc.

 

$

(119

)

 

$

(313

)

 

$

(331

)

 

$

(668

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

713.9

 

 

 

705.2

 

 

 

709.0

 

 

 

706.1

 

Diluted weighted average shares outstanding

 

 

713.9

 

 

 

705.2

 

 

 

709.0

 

 

 

706.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common share

 

$

(.17

)

 

$

(.44

)

 

$

(.47

)

 

$

(.95

)

Diluted loss per common share

 

$

(.17

)

 

$

(.44

)

 

$

(.47

)

 

$

(.95

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

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

 

 

(2

)

 

 

1

 

 

 

(8

)

 

 

3

 

Net income (loss) attributable to Host Inc.

 

$

114

 

 

$

(119

)

 

$

486

 

 

$

(331

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

714.9

 

 

 

713.9

 

 

 

714.7

 

 

 

709.0

 

Assuming distribution of common shares granted under the comprehensive stock plans, less shares assumed purchased at market

 

 

2.7

 

 

 

 

 

 

2.7

 

 

 

 

Diluted weighted average shares outstanding

 

 

717.6

 

 

 

713.9

 

 

 

717.4

 

 

 

709.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$

0.16

 

 

$

(0.17

)

 

$

0.68

 

 

$

(0.47

)

Diluted earnings (loss) per common share

 

$

0.16

 

 

$

(0.17

)

 

$

0.68

 

 

$

(0.47

)

 

 

 

 

 

 

 

 

 

 

 

 

 

The calculation of Host L.P. basic and diluted earnings (loss) per unit is shown below (in millions, except per unit amounts):

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

Less: Net income attributable to non-controlling interests

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

 

Net loss attributable to Host L.P.

 

$

(121

)

 

$

(317

)

 

$

(335

)

 

$

(675

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average units outstanding

 

 

706.0

 

 

 

697.6

 

 

 

701.3

 

 

 

698.6

 

Diluted weighted average units outstanding

 

 

706.0

 

 

 

697.6

 

 

 

701.3

 

 

 

698.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common unit

 

$

(.17

)

 

$

(.45

)

 

$

(.48

)

 

$

(.97

)

Diluted loss per common unit

 

$

(.17

)

 

$

(.45

)

 

$

(.48

)

 

$

(.97

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

Less: Net income attributable to non-controlling interests

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

(1

)

Net income (loss) attributable to Host L.P.

 

$

115

 

 

$

(121

)

 

$

493

 

 

$

(335

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average units outstanding

 

 

710.0

 

 

 

706.0

 

 

 

709.6

 

 

 

701.3

 

Assuming distribution of common units granted under the comprehensive stock plans, less units assumed purchased at market

 

 

2.7

 

 

 

 

 

 

2.7

 

 

 

 

Diluted weighted average units outstanding

 

 

712.7

 

 

 

706.0

 

 

 

712.3

 

 

 

701.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common unit

 

$

0.16

 

 

$

(0.17

)

 

$

0.69

 

 

$

(0.48

)

Diluted earnings (loss) per common unit

 

$

0.16

 

 

$

(0.17

)

 

$

0.69

 

 

$

(0.48

)

 

 

 

 

 

 

 

 

 

 

 

 

 

12


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

4.

Revenue

Substantially all our operating results represent revenues and expenses generated by hotel-levelproperty-level operations. Payments are due from customers when services are provided to them. Due to the short-term nature of our contracts and the almost concurrent receipt of payment, we have no material unearned revenue at quarter end. We collect sales, use, occupancy and similar taxes from our customers, which we present on a net basis (excluded from revenues) on our statements of operations.

13


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Disaggregation of Revenues. While we do not consider the following presentation of revenues by location to consist of reportable segments, we have disaggregated hotel revenues by market location. Our revenues also are presented by country in Note 1110 – Geographic Information.

By Location. The following table presents hotel revenues for each of the geographic locations in our consolidated hotel portfolio (in millions):

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

Location

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Maui/Oahu

 

$

118

 

 

$

4

 

 

$

260

 

 

$

98

 

 

$

119

 

 

$

118

 

 

$

361

 

 

$

260

 

San Diego

 

 

133

 

 

 

85

 

 

 

338

 

 

 

140

 

Orlando

 

 

96

 

 

 

52

 

 

 

333

 

 

 

97

 

Florida Gulf Coast

 

 

49

 

 

 

33

 

 

 

215

 

 

 

160

 

 

 

59

 

 

 

49

 

 

 

290

 

 

 

215

 

Phoenix

 

 

54

 

 

 

17

 

 

 

171

 

 

 

108

 

 

 

62

 

 

 

54

 

 

 

274

 

 

 

171

 

San Francisco/San Jose

 

 

96

 

 

 

44

 

 

 

238

 

 

 

80

 

New York

 

 

81

 

 

 

51

 

 

 

224

 

 

 

87

 

Washington, D.C. (Central Business District)

 

 

67

 

 

 

29

 

 

 

197

 

 

 

72

 

Miami

 

 

40

 

 

 

12

 

 

 

152

 

 

 

77

 

 

 

42

 

 

 

40

 

 

 

194

 

 

 

152

 

San Diego

 

 

85

 

 

 

16

 

 

 

140

 

 

 

108

 

Orlando

 

 

52

 

 

 

2

 

 

 

97

 

 

 

58

 

New York

 

 

51

 

 

 

9

 

 

 

87

 

 

 

102

 

Jacksonville

 

 

29

 

 

 

29

 

 

 

97

 

 

 

72

 

Los Angeles/Orange County

 

 

42

 

 

 

16

 

 

 

81

 

 

 

75

 

 

 

37

 

 

 

42

 

 

 

97

 

 

 

81

 

San Francisco/San Jose

 

 

44

 

 

 

12

 

 

 

80

 

 

 

124

 

Washington, D.C. (Central Business District)

 

 

29

 

 

 

4

 

 

 

72

 

 

 

61

 

Jacksonville

 

 

29

 

 

 

16

 

 

 

72

 

 

 

44

 

Chicago

 

 

43

 

 

 

25

 

 

 

96

 

 

 

38

 

Houston

 

 

21

 

 

 

7

 

 

 

53

 

 

 

36

 

 

 

27

 

 

 

21

 

 

 

84

 

 

 

53

 

San Antonio/Austin

 

 

27

 

 

 

3

 

 

 

53

 

 

 

21

 

San Antonio

 

 

27

 

 

 

20

 

 

 

83

 

 

 

39

 

Boston

 

 

31

 

 

 

29

 

 

 

79

 

 

 

42

 

Seattle

 

 

33

 

 

 

16

 

 

 

70

 

 

 

23

 

New Orleans

 

 

19

 

 

 

11

 

 

 

68

 

 

 

24

 

Austin

 

 

21

 

 

 

7

 

 

 

67

 

 

 

14

 

Denver

 

 

26

 

 

 

17

 

 

 

62

 

 

 

29

 

Philadelphia

 

 

21

 

 

 

17

 

 

 

57

 

 

 

33

 

Northern Virginia

 

 

18

 

 

 

18

 

 

 

53

 

 

 

37

 

Atlanta

 

 

22

 

 

 

9

 

 

 

51

 

 

 

42

 

 

 

15

 

 

 

22

 

 

 

45

 

 

 

51

 

Boston

 

 

29

 

 

 

2

 

 

 

42

 

 

 

38

 

Chicago

 

 

25

 

 

 

4

 

 

 

38

 

 

 

22

 

Northern Virginia

 

 

18

 

 

 

5

 

 

 

37

 

 

 

27

 

Philadelphia

 

 

17

 

 

 

6

 

 

 

33

 

 

 

20

 

Denver

 

 

17

 

 

 

4

 

 

 

29

 

 

 

21

 

New Orleans

 

 

11

 

 

 

5

 

 

 

24

 

 

 

29

 

Seattle

 

 

16

 

 

 

2

 

 

 

23

 

 

 

20

 

Other

 

 

39

 

 

 

8

 

 

 

68

 

 

 

44

 

 

 

64

 

 

 

39

 

 

 

187

 

 

 

68

 

Domestic

 

 

835

 

 

 

196

 

 

 

1,878

 

 

 

1,335

 

 

 

1,166

 

 

 

835

 

 

 

3,594

 

 

 

1,878

 

International

 

 

9

 

 

 

2

 

 

 

14

 

 

 

18

 

 

 

23

 

 

 

9

 

 

 

50

 

 

 

14

 

Total

 

$

844

 

 

$

198

 

 

$

1,892

 

 

$

1,353

 

 

$

1,189

 

 

$

844

 

 

$

3,644

 

 

$

1,892

 

5.

Property and Equipment

Property and equipment consists of the following (in millions):

 

September 30, 2021

 

 

December 31, 2020

 

 

September 30, 2022

 

 

December 31, 2021

 

Land and land improvements

 

$

2,297

 

 

$

2,033

 

 

$

1,961

 

 

$

2,310

 

Buildings and leasehold improvements

 

 

14,084

 

 

 

13,609

 

 

 

13,572

 

 

 

13,636

 

Furniture and equipment

 

 

2,441

 

 

 

2,471

 

 

 

2,242

 

 

 

2,225

 

Construction in progress

 

 

235

 

 

 

166

 

 

 

281

 

 

 

278

 

 

 

19,057

 

 

 

18,279

 

 

 

18,056

 

 

 

18,449

 

Less accumulated depreciation and amortization

 

 

(8,933

)

 

 

(8,863

)

 

 

(8,575

)

 

 

(8,455

)

 

$

10,124

 

 

$

9,416

 

 

$

9,481

 

 

$

9,994

 

13


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

n

6.

DebtEquity of Host Inc. and Capital of Host L.P.

Equity of Host Inc.

Senior Notes. AsThe components of September 30, 2021, we have met the minimum financial covenant levels under our senior notes indentures, which reinstates our ability to incur additional debt so longequity of Host Inc. are as we maintain these covenant levels and subject to the provisions of our credit facility and senior notes indentures.follows (in millions):

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Balance, December 31, 2021

$

7

 

$

7,702

 

$

(76

)

$

(1,192

)

$

5

 

$

6,446

 

$

126

 

Net income

 

 

 

 

 

 

 

486

 

 

1

 

 

487

 

 

7

 

Issuance of common stock for comprehensive stock plans, net

 

 

 

13

 

 

 

 

 

 

 

 

13

 

 

 

Dividends declared on common stock

 

 

 

 

 

 

 

(150

)

 

 

 

(150

)

 

 

Issuance of common OP units

 

 

 

 

 

 

 

 

 

 

 

 

 

56

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

(1

)

 

(1

)

 

(2

)

Changes in ownership and other

 

 

 

23

 

 

 

 

 

 

 

 

23

 

 

(22

)

Other comprehensive loss

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

 

Balance, September 30, 2022

$

7

 

$

7,738

 

$

(77

)

$

(856

)

$

5

 

$

6,817

 

$

165

 

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Balance, June 30, 2022

$

7

 

$

7,729

 

$

(74

)

$

(885

)

$

5

 

$

6,782

 

$

163

 

Net income

 

 

 

 

 

 

 

114

 

 

1

 

 

115

 

 

1

 

Issuance of common stock for comprehensive stock plans, net

 

 

 

10

 

 

 

 

 

 

 

 

10

 

 

 

Dividends declared on common stock

 

 

 

 

 

 

 

(85

)

 

 

 

(85

)

 

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

(1

)

 

(1

)

 

(1

)

Changes in ownership and other

 

 

 

(1

)

 

 

 

 

 

 

 

(1

)

 

2

 

Other comprehensive loss

 

 

 

 

 

(3

)

 

 

 

 

 

(3

)

 

 

Balance, September 30, 2022

$

7

 

$

7,738

 

$

(77

)

$

(856

)

$

5

 

$

6,817

 

$

165

 

14


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Credit Facility. As of September 30, 2021, we have $12 million of available capacity under the revolver portion of our credit facility. On June 26, 2020 and February 9, 2021, we entered into amendments to the existing senior unsecured bank credit facility with Bank of America, N.A., as administrative agent, (collectively, the “Amendments”). The Amendments suspend requirements to comply with all existing financial maintenance covenants under the credit facility for the period which began on July 1, 2020 and ending on the required financial statement reporting date for the second quarter of 2022 (such period, the “Covenant Relief Period”). Subsequent to quarter end, we terminated the Covenant Relief Period prior to its expiration, as we met the minimum fixed charge coverage ratio required for our first phase-in quarterly test period.

7.

Equity of Host Inc. and Capital of Host L.P.

Equity of Host Inc.

The components of the Equity of Host Inc. are as follows (in millions):

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Balance, December 31, 2020

$

7

 

$

7,568

 

$

(74

)

$

(1,180

)

$

5

 

$

6,326

 

$

108

 

Net loss

 

 

 

 

 

 

 

(331

)

 

 

 

(331

)

 

(3

)

Issuance of common stock for comprehensive stock plans, net

 

 

 

8

 

 

 

 

 

 

 

 

8

 

 

 

Common stock issuances

 

 

 

138

 

 

 

 

 

 

 

 

138

 

 

 

Changes in ownership and other

 

 

 

(14

)

 

 

 

 

 

 

 

(14

)

 

14

 

Other comprehensive loss

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

 

Balance, September 30, 2021

$

7

 

$

7,700

 

$

(75

)

$

(1,511

)

$

5

 

$

6,126

 

$

119

 

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Balance, June 30, 2021

$

7

 

$

7,688

 

$

(71

)

$

(1,392

)

$

5

 

$

6,237

 

$

125

 

Net loss

 

 

 

 

 

 

 

(119

)

 

 

 

(119

)

 

(1

)

Issuance of common stock for comprehensive stock plans, net

 

 

 

6

 

 

 

 

 

 

 

 

6

 

 

 

Common stock issuances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in ownership and other

 

 

 

6

 

 

 

 

 

 

 

 

6

 

 

(5

)

Other comprehensive loss

 

 

 

 

 

(4

)

 

 

 

 

 

(4

)

 

 

Balance, September 30, 2021

$

7

 

$

7,700

 

$

(75

)

$

(1,511

)

$

5

 

$

6,126

 

$

119

 

15


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Balance, December 31, 2019

$

7

 

$

7,675

 

$

(56

)

$

(307

)

$

6

 

$

7,325

 

$

142

 

Net loss

 

 

 

 

 

 

 

(668

)

 

 

 

(668

)

 

(7

)

Issuance of common stock for comprehensive stock plans, net

 

 

 

7

 

 

 

 

 

 

 

 

7

 

 

 

Repurchase of common stock

 

 

 

(147

)

 

 

 

 

 

 

 

(147

)

 

 

Dividends declared on common stock

 

 

 

 

 

 

 

(141

)

 

 

 

(141

)

 

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

Changes in ownership and other

 

 

 

54

 

 

 

 

1

 

 

(1

)

 

54

 

 

(53

)

Other comprehensive loss

 

 

 

 

 

(23

)

 

 

 

 

 

(23

)

 

 

Balance, September 30, 2020

$

7

 

$

7,589

 

$

(79

)

$

(1,115

)

$

5

 

$

6,407

 

$

80

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Common Stock

 

Additional Paid-in Capital

 

Accumulated Other Comprehensive Income (Loss)

 

Retained Earnings / (Deficit)

 

Non-redeemable, non-controlling interests

 

Total equity

 

Redeemable, non-controlling interests

 

Balance, June 30, 2020

$

7

 

$

7,586

 

$

(74

)

$

(802

)

$

5

 

$

6,722

 

$

81

 

Balance, June 30, 2021

$

7

 

$

7,688

 

$

(71

)

$

(1,392

)

$

5

 

$

6,237

 

$

125

 

Net loss

 

 

 

 

(313

)

 

 

(313

)

 

(3

)

 

 

 

 

(119

)

 

 

(119

)

 

(1

)

Issuance of common stock for comprehensive stock plans, net

 

 

6

 

 

 

 

6

 

 

 

 

6

 

 

 

 

6

 

 

Changes in ownership and other

 

 

(3

)

 

 

 

 

(3

)

 

2

 

 

 

6

 

 

 

 

6

 

(5

)

Other comprehensive loss

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

(4

)

 

 

Balance, September 30, 2020

$

7

 

$

7,589

 

$

(79

)

$

(1,115

)

$

5

 

$

6,407

 

$

80

 

Balance, September 30, 2021

$

7

 

$

7,700

 

$

(75

)

$

(1,511

)

$

5

 

$

6,126

 

$

119

 

Capital of Host L.P.

As of September 30, 2021,2022, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining common OP units are owned by unaffiliated limited partners. Each common OP unit may be redeemed for cash or, at the election of Host Inc., Host Inc. common stock, based on the conversion ratio of 1.021494 shares of Host Inc. common stock for each common OP unit. Under the credit facility, all redemptions must be made with Host Inc. common stock untilif Host L.P.’s leverage ratio (as calculated under the credit facility) is belowexceeds 7.25x.

In exchange for any shares issued by Host Inc., Host L.P. will issue common OP units to Host Inc. based on the applicable conversion ratio. Additionally, funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P.

15


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The components of the Capital of Host L.P. are as follows (in millions):

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 

Limited partnership interests of third parties

 

Balance, December 31, 2021

$

1

 

$

6,516

 

$

(76

)

$

5

 

$

6,446

 

$

126

 

Net income

 

 

 

486

 

 

 

 

1

 

 

487

 

 

7

 

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

13

 

 

 

 

 

 

13

 

 

 

Distributions declared on common OP units

 

 

 

(150

)

 

 

 

 

 

(150

)

 

(2

)

Issuance of common OP units

 

 

 

 

 

 

 

 

 

 

 

56

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

(1

)

 

(1

)

 

 

Changes in ownership and other

 

 

 

23

 

 

 

 

 

 

23

 

 

(22

)

Other comprehensive loss

 

 

 

 

 

(1

)

 

 

 

(1

)

 

 

Balance, September 30, 2022

$

1

 

$

6,888

 

$

(77

)

$

5

 

$

6,817

 

$

165

 

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 

Limited partnership interests of third parties

 

Balance, June 30, 2022

$

1

 

$

6,850

 

$

(74

)

$

5

 

$

6,782

 

$

163

 

Net income

 

 

 

114

 

 

 

 

1

 

 

115

 

 

1

 

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

10

 

 

 

 

 

 

10

 

 

 

Distributions declared on common OP units

 

 

 

(85

)

 

 

 

 

 

(85

)

 

(1

)

Distributions to non-controlling interests

 

 

 

 

 

 

 

(1

)

 

(1

)

 

 

Changes in ownership and other

 

 

 

(1

)

 

 

 

 

 

(1

)

 

2

 

Other comprehensive loss

 

 

 

 

 

(3

)

 

 

 

(3

)

 

 

Balance, September 30, 2022

$

1

 

$

6,888

 

$

(77

)

$

5

 

$

6,817

 

$

165

 

16


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 

Limited partnership interests of third parties

 

Balance, December 31, 2020

$

1

 

$

6,394

 

$

(74

)

$

5

 

$

6,326

 

$

108

 

Net loss

 

 

 

(331

)

 

 

 

 

 

(331

)

 

(3

)

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

8

 

 

 

 

 

 

8

 

 

 

Common OP unit issuances

 

 

 

138

 

 

 

 

 

 

138

 

 

 

Changes in ownership and other

 

 

 

(14

)

 

 

 

 

 

(14

)

 

14

 

Other comprehensive loss

 

 

 

 

 

(1

)

 

 

 

(1

)

 

 

Balance, September 30, 2021

$

1

 

$

6,195

 

$

(75

)

$

5

 

$

6,126

 

$

119

 

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 

Limited partnership interests of third parties

 

Balance, June 30, 2021

$

1

 

$

6,302

 

$

(71

)

$

5

 

$

6,237

 

$

125

 

Net loss

 

 

 

(119

)

 

 

 

 

 

(119

)

 

(1

)

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

6

 

 

 

 

 

 

6

 

 

 

Changes in ownership and other

 

 

 

6

 

 

 

 

 

 

6

 

 

(5

)

Other comprehensive loss

 

 

 

 

 

(4

)

 

 

 

(4

)

 

 

Balance, September 30, 2021

$

1

 

$

6,195

 

$

(75

)

$

5

 

$

6,126

 

$

119

 

Share Repurchases

The componentsOn August 3, 2022, Host Inc.'s Board of Directors authorized an increase in our share repurchase program from the Capitalexisting $371 million remaining under the prior Board authorization to $1 billion. There have been no share repurchases year-to-date in 2022. As such, as of Host L.P. are as follows (in millions):September 30, 2022, we have $1 billion available for repurchase under our common share repurchase program.

Issuance of Common Stock

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 


Limited partnership interests of third parties

 

Balance, December 31, 2020

$

1

 

$

6,394

 

$

(74

)

$

5

 

$

6,326

 

$

108

 

Net loss

 

 

 

(331

)

 

 

 

 

 

(331

)

 

(3

)

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

8

 

 

 

 

 

 

8

 

 

 

Common OP unit issuances

 

 

 

138

 

 

 

 

 

 

138

 

 

 

Changes in ownership and other

 

 

 

(14

)

 

 

 

 

 

(14

)

 

14

 

Other comprehensive loss

 

 

 

 

 

(1

)

 

 

 

(1

)

 

 

Balance, September 30, 2021

$

1

 

$

6,195

 

$

(75

)

$

5

 

$

6,126

 

$

119

 

As of September 30, 2022, there was $460 million of remaining capacity under the distribution agreement we entered into in 2021 with various investment banks to sell shares of Host Inc. common stock in "at-the-market" offerings. There have been no shares issued year-to-date in 2022.

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 


Limited partnership interests of third parties

 

Balance, June 30, 2021

$

1

 

$

6,302

 

$

(71

)

$

5

 

$

6,237

 

$

125

 

Net loss

 

 

 

(119

)

 

 

 

 

 

(119

)

 

(1

)

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

6

 

 

 

 

 

 

6

 

 

 

Common OP unit issuances

 

 

 

 

 

 

 

 

 

 

 

 

Changes in ownership and other

 

 

 

6

 

 

 

 

 

 

6

 

 

(5

)

Other comprehensive loss

 

 

 

 

 

(4

)

 

 

 

(4

)

 

 

Balance, September 30, 2021

$

1

 

$

6,195

 

$

(75

)

$

5

 

$

6,126

 

$

119

 

Dividends/Distributions

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 


Limited partnership interests of third parties

 

Balance, December 31, 2019

$

1

 

$

7,374

 

$

(56

)

$

6

 

$

7,325

 

$

142

 

Net loss

 

 

 

(668

)

 

 

 

 

 

(668

)

 

(7

)

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

7

 

 

 

 

 

 

7

 

 

 

Repurchase of common OP units

 

 

 

(147

)

 

 

 

 

 

(147

)

 

 

Distributions declared on common OP units

 

 

 

(141

)

 

 

 

 

 

(141

)

 

(2

)

Changes in ownership and other

 

 

 

55

 

 

 

 

(1

)

 

54

 

 

(53

)

Other comprehensive loss

 

 

 

 

 

(23

)

 

 

 

(23

)

 

 

Balance, September 30, 2020

$

1

 

$

6,480

 

$

(79

)

$

5

 

$

6,407

 

$

80

 

On August 3, 2022, Host Inc.'s Board of Directors announced a regular quarterly cash dividend of $0.12 per share on Host Inc.'s common stock. The dividend was paid on October 17, 2022 to stockholders of record as of September 30, 2022. Accordingly, Host L.P. made a distribution of $0.12257928 per unit on its common OP units based on the current conversion ratio.

17


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

7.

Dispositions

 

General Partner

 

Limited Partner

 

Accumulated Other Comprehensive Income (Loss)

 

Non-controlling interests

 

Total capital

 


Limited partnership interests of third parties

 

Balance, June 30, 2020

$

1

 

$

6,790

 

$

(74

)

$

5

 

$

6,722

 

$

81

 

Net loss

 

 

 

(313

)

 

 

 

 

 

(313

)

 

(3

)

Issuance of common OP units to Host Inc. for comprehensive stock plans, net

 

 

 

6

 

 

 

 

 

 

6

 

 

 

Changes in ownership and other

 

 

 

(3

)

 

 

 

 

 

(3

)

 

2

 

Other comprehensive loss

 

 

 

 

 

(5

)

 

 

 

(5

)

 

 

Balance, September 30, 2020

$

1

 

$

6,480

 

$

(79

)

$

5

 

$

6,407

 

$

80

 

Share Repurchases

As of September 30, 2021,During the third quarter, we havesold the Chicago Marriott Suites Downers Grove for $37116 million, available for repurchase under our common share repurchase program. In accordance with the restrictions in our amended credit facility, there have been including $02 share repurchases year-to-date in 2021.

Issuancemillion of Common Stock

On May 6, 2021, we entered intofurniture fixtures & equipment ("FF&E") funds retained by us. We recorded a distribution agreement with J. P. Morgan Securities LLC, BofA Securities, Inc., BTIG, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents, pursuant to which we may issue and sell, from time to time, shares having an aggregate offering pricegain on sale of up to $6004 million. The sales will be made in “at the market” offerings under the SEC rules. We may sell shares of Host Inc. common stock under this program from time to time based on market conditions, although we are not under an obligation to sell any shares. NaN shares were issuedmillion during the third quarter. Year-to-date, we have issued approximately 7.8 million shares under the program at an average price of $17.99 per share, for net proceeds of approximately $138 million. In connection with the common stock issuance by Host Inc., Host L.P. issued 7.6 million common OP units to Host Inc. At September 30, 2021, there was $460 million of remaining capacity under the agreement.

Dividends/Distributions

As part of our response to the COVID-19 pandemic andThe gain on sale is included in order to preserve cash and future financial flexibility, we have suspended our regular quarterly common cash dividends. Additionally, basedother gains on the termsunaudited condensed consolidated statement of the credit facility amendments, we are restricted from paying a quarterly common cash dividend in excess of $0.01 per share during the Covenant Relief Period, unless a higher amount is required to allow Host Inc. to maintain its REIT status or to avoid the payment of corporate income or excise taxes, until after the covenant waiver period expires. Subsequent to quarter end, we terminated the Covenant Relief Period early, as we met the minimum fixed charge coverage ratio required for our first phase-in quarterly test period. operations.

8.

Acquisitions

During the

Subsequent to quarter end, we acquired the 200125-room Baker's CayFour Seasons Resort Key Largo, Curio Collection by Hilton,and Residences Jackson Hole for a total purchase price of $200 million, a 223-room luxury downtown Houston hotel for $65 million and the 59-room Alila Ventana Big Sur for $150315 million.

9.

Dispositions

Subsequent to quarter end, we sold 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. As of September 30, 2021, these hotels were classified as held for sale. We anticipate recording a gain of approximately $300 million in the fourth quarter.

10.

Fair Value Measurements

18


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

We did not elect the fair value measurement option for any of our financial assets or liabilities. The fair valuevalues of notes receivable, secured debt and our credit facility isare determined based on the expected future payments discounted at a risk-adjusted rate.rates. Our senior notes are valued based on quoted market prices. The fair values of financial instruments not included in this table are estimated to be equal to their carrying amounts.

The fair value of certain financial assets and financial liabilities is shown below (in millions):

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Carrying
Amount

 

 

Fair Value

 

 

Carrying
Amount

 

 

Fair Value

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes (Level 1)

 

$

3,068

 

 

$

3,273

 

 

$

3,065

 

 

$

3,284

 

Credit facility (Level 2)

 

 

2,472

 

 

 

2,483

 

 

 

2,471

 

 

 

2,483

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

Carrying
Amount

 

 

Fair Value

 

 

Carrying
Amount

 

 

Fair Value

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

Notes receivable (Level 2)

 

$

413

 

 

$

399

 

 

$

 

 

$

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes (Level 1)

 

 

3,113

 

 

 

2,703

 

 

 

3,109

 

 

 

3,255

 

Credit facility (Level 2)

 

 

993

 

 

 

1,000

 

 

 

1,673

 

 

 

1,683

 

Mortgage debt (Level 2)

 

 

102

 

 

 

96

 

 

 

104

 

 

 

105

 

We assess our property and equipment, primarily comprised of hotel properties, for impairment when events or changes in circumstances occur that indicate the carrying value may not be recoverable. Due to the impact of the COVID-19 pandemic on our operations, we performed recoverability assessments on all of our hotel properties. Additionally, during the third quarter, due to changes in expected hold periods, the book value for certain property and equipment exceeded its undiscounted future cash flows. Therefore, we recorded impairment expense of $92 million based on third party assessments of values, including broker estimates and purchase offers, which are considered observable inputs other than quoted prices (Level 2) in the GAAP fair value hierarchy. The impairment expense is included in depreciation and amortization on the condensed consolidated statements of operations. The fair value of the impaired property and equipment following the write-down was $393 million.

E

11.10.

Geographic Information

We consider each one of our hotels to be an operating segment, as we allocate resources and assess operating performance based on individual hotels. All of our hotels meet the aggregation criteria for segment reporting and our other real estate investment activities (primarily our retail spaces and office buildings) are immaterial. As such, we report one segment: hotel ownership. Our consolidated foreign operations consist of hotels in two countries as of September 30, 2021.2022. There were no intersegment sales during the periods presented.

The following table presents total revenues and property and equipment, net, for each of the geographical areas in which we operate (in millions):

 

Total Revenues

 

 

Property and Equipment, net

 

 

Total Revenues

 

 

Property and Equipment, net

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

September 30,

 

 

December 31,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

September 30,

 

 

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

United States

 

$

835

 

 

$

196

 

 

$

1,878

 

 

$

1,335

 

 

$

10,047

 

 

$

9,331

 

 

$

1,166

 

 

$

835

 

 

$

3,594

 

 

$

1,878

 

 

$

9,412

 

 

$

9,919

 

Brazil

 

 

3

 

 

 

1

 

 

 

5

 

 

 

6

 

 

 

31

 

 

 

34

 

 

 

5

 

 

 

3

 

 

 

12

 

 

 

5

 

 

 

31

 

 

 

30

 

Canada

 

 

6

 

 

 

1

 

 

 

9

 

 

 

12

 

 

 

46

 

 

 

51

 

 

 

18

 

 

 

6

 

 

 

38

 

 

 

9

 

 

 

38

 

 

 

45

 

Total

 

$

844

 

 

$

198

 

 

$

1,892

 

 

$

1,353

 

 

$

10,124

 

 

$

9,416

 

 

$

1,189

 

 

$

844

 

 

$

3,644

 

 

$

1,892

 

 

$

9,481

 

 

$

9,994

 

18


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

12.11.

Non-controlling Interests

Host Inc.’s treatment of the non-controlling interests of Host L.P.: Host Inc. adjusts the amount of the non-controlling interests of Host L.P. each period so that the amount presented equals the greater of theirits carrying amount based on accumulated historical cost or theirits redemption value. The historical cost is based on the proportional relationship between the historical cost of equity held by our common stockholders relative to that of the common unitholders of Host L.P. The redemption value is based on the amount of cash or Host Inc. common stock, at our option, that would be paid to the non-controlling interests of Host L.P. if it were terminated. Therefore, the redemption value of the common OP units is equivalent to the number of common shares that would be issued upon conversion of the common OP units held by third parties valued at the market price of Host Inc. common stock at the balance sheet date. One common OP unit may be exchanged for 1.021494 shares of Host Inc. common stock. Redeemable non-controlling interests of Host L.P. are classified in the mezzanine section of our balance sheets as they do not meet the requirements for equity classification because the redemption feature requires the delivery of registered shares. Under the Amendments,

19


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

all redemptions must be made with Host Inc. common stock until we are in compliance with the leverage ratio financial test required by the credit facility.

The table below details the historical cost and redemption values for the non-controlling interests:interests of Host L.P.:

 

 

September 30, 2022

 

 

December 31, 2021

 

Common OP units outstanding (millions)

 

 

10.1

 

 

 

7.1

 

Market price per Host Inc. common share

 

$

15.88

 

 

$

17.39

 

Shares issuable upon conversion of one common OP unit

 

 

1.021494

 

 

 

1.021494

 

Redemption value (millions)

 

$

165

 

 

$

126

 

Historical cost (millions)

 

 

100

 

 

 

66

 

Book value (millions) ⁽¹⁾

 

 

165

 

 

 

126

 

___________

 

 

September 30, 2021

 

 

December 31, 2020

 

Common OP units outstanding (millions)

 

 

7.1

 

 

 

7.2

 

Market price per Host Inc. common share

 

$

16.33

 

 

$

14.63

 

Shares issuable upon conversion of one common OP unit

 

 

1.021494

 

 

 

1.021494

 

Redemption value (millions)

 

$

119

 

 

$

108

 

Historical cost (millions)

 

 

63

 

 

 

67

 

Book value (millions) ⁽¹⁾

 

 

119

 

 

 

108

 

(1) The book value recorded is equal to the greater of redemption value or historical cost.

Other Consolidated Partnerships. WeAs of September 30, 2022, we consolidate 2two majority-owned partnerships that have third-party, non-controlling ownership interests. The third-party limited partner interests are included in non-redeemable non-controlling interests — other consolidated partnerships on the balance sheets and totaled $5 million as of both September 30, 20212022 and December 31, 2020.2021.

12.

Contingencies

While the majority of our hotels in Florida were affected by Hurricane Ian, which made landfall on September 28, 2022, the most significant damage sustained during the storm occurred at The Ritz-Carlton, Naples and Hyatt Regency Coconut Point Resort and Spa. Due to evacuation mandates and/or loss of commercial power, five of our properties in Florida were temporarily closed, three of which fully reopened within days, while The Ritz-Carlton, Naples and Hyatt Regency Coconut Point Resort and Spa remain closed. The Hyatt Regency Coconut Point sustained extensive damage to the grounds, pools/waterpark, and poolside food and beverage ("F&B") outlets, including damage from flooding; but remained open to first responders. Commercial power has been restored, remediation efforts are underway, and the hotel is expected to reopen to guests in mid-November, as a phased reopening, with the waterpark reopening during the second quarter of 2023. The Ritz-Carlton, Naples sustained more significant damage due to storm surge, which breached the beach dune and flooded the lowest level of the hotel. The Ritz-Carlton, Naples is expected to remain closed for the remainder of the year and into 2023, with a phased reopening strategy being evaluated. Limited property damage was reported at the other Florida properties within our consolidated portfolio.

We are still evaluating the scope of property damage and business interruption loss at our Florida properties. While we expect our insurance coverage to sufficiently cover the property damage to the hotels and the near-term loss of business in excess of our $15 million insurance deductible, there could be losses that are not covered. Due to the proximity of Hurricane Ian to quarter end and on-going investigation into re-construction requirements, we are unable to estimate the total loss at this time. We will record an insurance receivable based on the anticipated insurance proceeds, not to exceed the expected loss, when the loss can be reliably estimated. We anticipate the insurance proceeds, net of the deductible, will exceed the book value of the assets that will be written off.

13.

Legal Proceedings

We are involved in various legal proceedings in the ordinary course of business regarding the operation of our hotels and company matters. To the extent not covered by insurance, these legal proceedings generally fall into the following broad categories: disputes involving hotel-level contracts, employment litigation, compliance with laws such as the Americans with Disabilities Act, tax disputes and other general matters. Under our management agreements, our

19


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

operators have broad latitude to resolve individual hotel-level claims for amounts generally less than $150,000. However, for matters exceeding such threshold, our operators may not settle claims without our consent.

Based on our analysis of legal proceedings with which we are involved or of which we currently are aware and our experience in resolving similar claims in the past, we have recorded immaterial accruals as of September 30, 20212022 related to such claims. We have estimated that, in the aggregate, our losses related to these proceedings will not be material. We are not aware of any matters with a reasonably possible unfavorable outcome for which disclosure of a loss contingency is required. No assurances can be given as to the outcome of any pending legal proceedings.

20


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this report. Host Inc. operates as a self-managed and self-administered REIT. Host Inc. is the sole general partner of Host L.P. and holds approximately 99% of its partnership interests. Host L.P. is a limited partnership operating through an umbrella partnership structure. The remaining common OP units are owned by various unaffiliated limited partners.

Forward-Looking Statements

In this quarterly report on Form 10-Q, we make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “expect,” “may,” “intend,” “predict,” “project,” “plan,” “will,” “estimate” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are based on management’s current expectations and assumptions and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results to differ materially from those anticipated at the time the forward-looking statements are made.

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

the duration and scope of the COVID-19 pandemic and its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the ability of our hotel managers to operate hotels in a way that facilitates social distancing, implement enhanced cleaning protocols and other COVID-19 pandemic mitigation practices; 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 as the COVID-19 pandemic subsides; general economic uncertainty in U.S. markets where we own hotels and the potential for low levels of economic growth in these markets; and the effects on hotel operations of steps that our hotel managers take to reduce operating costs in response to the COVID-19 pandemic;
the effect on lodging demand of (i) changes in national and local economic and business conditions, including concerns about the pace of U.S. economic growth, an economic recession in the United States or globally, the current high level of inflation, rising interest rates, global economic prospects, consumer confidence and the value of the U.S. dollar, and (ii) factors that may shape public perception of travel to a particular location, such as natural disasters, weather changes inevents (including the international political climate,impact of Hurricane Ian), pandemics and outbreaks of contagious diseases, such as the COVID-19 pandemic, and the occurrence or potential occurrence of terrorist attacks, all of which will affect occupancy rates at our hotels and the demand for hotel products and services;
the impact of geopolitical developments outside the United States, such as conflicts in Eastern Europe and the Middle East, the pace of economic growth in Europe, the effects of the United Kingdom’s withdrawal from the European Union, escalatingor trade tensions and tariffs between the United States and its trading partners such as China, or conflicts in the Middle East, all of which could affect the relative volatility of global credit markets generally, global travel and lodging demand within the United States;
risks that U.S. immigration policies, border closings related to the COVID-19 pandemic and travel bans will suppress international travel to the United States;
volatility in global financial and credit markets, in particular because of the COVID-19 pandemic, and the impact of budget deficits and potentialpending and future U.S. governmental action to address such deficits through reductions in spending and similar austerity measures, as well as the impact of potential U.S. government shutdowns, which could materially adversely affect U.S. and global economic conditions, business activity, credit availability, borrowing costs, and lodging demand;
operating risks associated with the hotel business, including the effect of labor stoppages or strikes, increasing operating or labor costs or changes in workplace rules that affect labor costs, and risks relating to the response to the COVID-19 pandemic such as increased costs relating to severance and furloughed hotel employees as a result of measures taken by our hotel managers, in responsesuch as increased hotel costs for cleaning protocols and severance and furlough payments to the COVID-19 pandemic and risks associated with our managers’ ability to successfully increase staffing levels to meet expected increases in lodging demand due to the challenging labor environment;hotel employees;
the effect of rating agency downgrades of our debt securities or on the cost and availability of new debt financings;
the reduction in our operating flexibility and the limitation on our ability to incur debt, pay dividends and make distributions resulting from restrictive covenants in our debt agreements including the waivers we obtained under our credit facility as a result of not meeting the original covenant thresholds that otherwise would have been required and other risks associated with the amount of our indebtedness or related to restrictive covenants in our debt agreements, including the risk that a default could occur as a result of thea decline in operations due to the COVID-19 pandemic;

21


our ability to maintain our hotels in a first-class manner, including meeting capital expenditures requirements, and the effect of renovations, including temporary closures, on our hotel occupancy and financial results;
the ability of our hotels to compete effectively against other lodging businesses in the highly competitive markets in which we operate in terms of access, location, quality of accommodations and room rate structures;

21


our ability to acquire or develop additional hotels and the risk that potential acquisitions or developments may not perform in accordance with our expectations;
the ability to complete hotel renovations on schedule and on, or under, budget and the potential for increased costs and construction delays due to government restrictions on non-essential activities and shortages of supplies as a result of supply chain disruptions due to the COVID-19 pandemic;disruptions;
relationships with property managers and joint venture partners and our ability to realize the expected benefits of our joint ventures and other strategic relationships;
risks associated with a single manager, Marriott International, managing a significant portionpercentage of our hotels;
changes in the desirability of the geographic regions of the hotels in our portfolio or in the travel patterns of hotel customers;
the ability of third-party internet and other travel intermediaries to attract and retain customers;
our ability to recover fully under our existing insurance policies for terrorist acts and natural disasters and our ability to maintain adequate or full replacement cost “all-risk” property insurance policies on our hotels on commercially reasonable terms;
the effect of a data breach or significant disruption of hotel operator information technology networks as a result of cyber attacks;
the effects of tax legislative action and other changes in laws and regulations, or the interpretation thereof, including the need for compliance with new environmental and safety requirements;
the ability of Host Inc. and each of the REITs acquired, established or to be established by Host Inc. to continue to satisfy complex rules in order to qualify as REITs for U.S. federal income tax purposes and Host Inc.’s and Host L.P.’s ability and the ability of our subsidiaries, and similar entities to be acquired or established by us, to operate effectively within the limitations imposed by these rules; and
risks associated with our ability to execute our dividend policy, including factors such as the need to preserve cash and financial flexibility in response to the COVID-19 pandemic, investment activity, operating results and the economic outlook, any or all of which may influence the decision of our board of directors as to whether to pay future dividends at levels previously disclosed or to use available cash to pay special dividends.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions, including those risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 20202021 and in other filings with the Securities and Exchange Commission (“SEC”). Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material.

22


Operating Results and Outlook

COVID-19 Response

The COVID-19 pandemic has significantly adversely impacted U.S. and global economic activity and has contributed to significant volatility in financial markets beginning in the first quarter of 2020. While many of the restrictive measures put in place in jurisdictions where we own hotels have been lifted, the pandemic continues to have a material adverse effect on operations and future bookings and is expected to continue to have a material negative impact on our financial results and cash flows.

We have not filed for any relief under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) or the American Rescue Plan Act; however, several of our operators, including Hyatt and Marriott, have filed for the Employee Retention Credit (“ERC”) to partially offset the costs of their furloughed hotel employees under Title II of the CARES Act, as discussed below. Benefits received by our operators from the ERC related to their employees working at our hotels ultimately benefit us as we bear the expense for the wages and benefits of all persons working at our hotels. Benefit costs for furloughed employees did not have a significant impact on the third quarter 2021 results, as they were eligible to be reimbursed through the American Rescue Plan Act, the

22


reimbursement for which our managers have applied. We also expect that these benefit costs will not have a significant impact on our fourth quarter results.

In response to the pandemic, we and our managers, as applicable, have accomplished the following:

Implemented portfolio-wide cost reductions, resulting in a reduction of pro forma hotel operating costs across the portfolio by approximately 30% in the third quarter of 2021, compared to 2019. While we expect that certain initiatives, including modernized brand standards, streamlined operating departments and accelerated adoption of cost-saving technologies, may lead to long-term expense reductions, we also expect hotel operating costs to increase more in line with total revenues over time as hotels continue to transition from their contingency level operational plans to increased staffing levels and controllable spending;
Suspended contributions to certain of our hotels’ FF&E escrow accounts;
Accessed the full $1.5 billion under the revolver portion of the credit facility in 2020 as a precautionary measure in order to increase our cash position and preserve financial flexibility, while further amending the credit agreement governing our $1.5 billion revolving credit facility and two $500 million term loans in 2021. Under the amendments, the quarterly-tested financial covenants were waived beginning July 1, 2020 until the required financial statement reporting date for the second quarter of 2022. Subsequent to quarter end, we exited the waiver period prior to the first scheduled covenant test, and will be required to meet the modified financial covenants, under the terms of the amendment, for the subsequent five quarters; and
Suspended regular quarterly common cash dividends and stock repurchases until further notice. All future dividends are subject to approval by the Board of Directors.

The impact of the COVID-19 pandemic on the company remains fluid, as does our corporate and property-level response, together with the response of our hotel operators. While vaccination rates have increased during the first three quarters of the year, there remains a great deal of uncertainty surrounding the trends and duration of the COVID-19 pandemic, and we are monitoring developments on an ongoing basis. We, and our hotel managers, may take additional actions in response to future developments.

Operating Results

The following table reflects certain line items from our unaudited condensed consolidated statements of operations and significant operating statistics (in millions, except per share and hotel statistics):

 

Historical Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

Total revenues

 

$

844

 

 

$

198

 

 

 

326.3

%

 

$

1,892

 

 

$

1,353

 

 

 

39.8

%

 

$

1,189

 

 

$

844

 

 

 

40.9

%

 

$

3,644

 

 

$

1,892

 

 

 

92.6

%

Net loss

 

 

(120

)

 

 

(316

)

 

 

62.0

%

 

 

(334

)

 

 

(675

)

 

 

50.5

%

Operating loss

 

 

(95

)

 

 

(318

)

 

 

70.1

%

 

 

(329

)

 

 

(682

)

 

 

51.8

%

Operating loss margin under GAAP

 

 

(11.3

)%

 

 

(160.6

)%

 

 

14,930 bps

 

 

 

(17.4

)%

 

 

(50.4

)%

 

 

3,300 bps

 

Net income (loss)

 

 

116

 

 

 

(120

)

 

N/M

 

 

 

494

 

 

 

(334

)

 

N/M

 

Operating profit (loss)

 

 

148

 

 

 

(95

)

 

N/M

 

 

 

597

 

 

 

(329

)

 

N/M

 

Operating profit (loss) margin under GAAP

 

 

12.4

%

 

 

(11.3

)%

 

N/M

 

 

 

16.4

%

 

 

(17.4

)%

 

N/M

 

EBITDAre⁽¹⁾

 

$

179

 

 

$

(154

)

 

N/M

 

$

295

 

 

$

(180

)

 

N/M

 

 

$

328

 

 

$

179

 

 

 

83.2

%

 

$

1,140

 

 

$

295

 

 

 

286.4

%

Adjusted EBITDAre⁽¹⁾

 

 

177

 

 

 

(111

)

 

N/M

 

 

290

 

 

 

(136

)

 

N/M

 

 

 

328

 

 

 

177

 

 

 

85.3

%

 

 

1,134

 

 

 

290

 

 

 

291.0

%

Diluted loss per common share

 

 

(0.17

)

 

 

(0.44

)

 

 

61.4

%

 

 

(0.47

)

 

 

(0.95

)

 

 

50.5

%

Basic and diluted earnings (loss) per common share

 

 

0.16

 

 

 

(0.17

)

 

N/M

 

 

 

0.68

 

 

 

(0.47

)

 

N/M

 

NAREIT FFO per diluted share⁽¹⁾

 

 

0.20

 

 

 

(0.21

)

 

N/M

 

 

0.33

 

 

 

(0.25

)

 

N/M

 

 

 

0.38

 

 

 

0.20

 

 

 

90.0

%

 

 

1.35

 

 

 

0.33

 

 

 

309.1

%

Adjusted FFO per diluted share⁽¹⁾

 

 

0.20

 

 

 

(0.11

)

 

N/M

 

 

0.33

 

 

 

(0.14

)

 

N/M

 

 

 

0.38

 

 

 

0.20

 

 

 

90.0

%

 

 

1.35

 

 

 

0.33

 

 

 

309.1

%

All Owned Hotel Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

All Owned Hotel revenues ⁽¹⁾

 

$

1,187

 

 

$

798

 

 

 

48.7

%

 

$

3,609

 

 

$

1,884

 

 

 

91.6

%

All Owned Hotel EBITDA ⁽¹⁾

 

 

341

 

 

 

198

 

 

 

72.2

%

 

 

1,179

 

 

 

398

 

 

 

196.2

%

All Owned Hotel EBITDA margin ⁽¹⁾

 

 

28.7

%

 

 

24.9

%

 

 

380 bps

 

 

 

32.7

%

 

 

21.1

%

 

 

1,160 bps

 

Change in All Owned Hotel Total RevPAR ⁽¹⁾

 

 

48.1

%

 

 

 

 

 

 

 

 

90.5

%

 

 

 

 

 

 

Change in All Owned Hotel RevPAR ⁽¹⁾

 

 

42.0

%

 

 

 

 

 

 

 

 

81.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23


All Owned Hotel Data (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

All owned hotel revenues (pro forma)⁽¹⁾

 

$

853

 

 

$

220

 

 

 

287.7

%

 

$

1,978

 

 

$

1,429

 

 

 

38.4

%

All owned hotel EBITDA (pro forma)⁽¹⁾

 

 

196

 

 

 

(98

)

 

N/M

 

 

 

364

 

 

 

(80

)

 

N/M

 

All owned hotel EBITDA margin (pro forma)⁽¹⁾

 

 

23.0

%

 

 

(44.5

)%

 

 N/M

 

 

 

18.4

%

 

 

(5.6

)%

 

 N/M

 

Change in all owned hotel Total RevPAR - Constant US$

 

 

288.5

%

 

 

 

 

 

 

 

 

38.7

%

 

 

 

 

 

 

Change in all owned hotel RevPAR - Constant US$

 

 

307.3

%

 

 

 

 

 

 

 

 

51.5

%

 

 

 

 

 

 

Change in all owned hotel RevPAR - Nominal US$

 

 

307.5

%

 

 

 

 

 

 

 

 

51.4

%

 

 

 

 

 

 

Change in domestic RevPAR

 

 

306.8

%

 

 

 

 

 

 

 

 

52.4

%

 

 

 

 

 

 

Change in international RevPAR - Constant US$

 

 

342.8

%

 

 

 

 

 

 

 

 

(17.6

)%

 

 

 

 

 

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

___________

(1)
EBITDAre, Adjusted EBITDAre, NAREIT FFO per diluted share and Adjusted FFO per diluted share and all owned hotelAll Owned Hotel operating results (including hotel revenues and hotel EBITDA and margins) are non-GAAP financial measures within the meaning of the rules of the SEC. All Owned Hotel results exclude the operations of hotels sold or held-for-sale as of September 30, 2022. See “Non-GAAP Financial Measures” and "All Owned Hotel Operating Statistics and Results" for more information on these measures, including why we believe these supplemental measures are useful, reconciliations to the most directly comparable GAAP measure, and the limitations on the use of these supplemental measures.
(2)
Due to the COVID-19 pandemic and its effects on operations, we are temporarily presenting hotel operating results on an Additionally, All Owned Hotel pro forma basis. Thus, operating results are presentedand statistics include adjustments for all consolidated hotels owned as of September 30, 2021dispositions and do not include theacquisitions. See Hotel RevPAR Overview for results of operations for hotels sold through the reporting date. Additionally, operating results for acquisitions as of September 30, 2021 are reflected for full calendar years, which include results for periods prior toportfolio based on our ownership.ownership period, without these adjustments.

N/M = Not meaningful.

Operations

While still well below pre-pandemic levels, totalTotal revenues increased $646$345 million, or 326.3%40.9%, for the third quarterand $1,752 million, or 92.6%, as compared to the third quarter of 20202021 and year-to-date 2021, respectively, due to strong leisure demand at our resort hotels and limited returnthe continued recovery of business transient and group business. For the year-to-date, total revenues increased $539 million, or 39.8%, with quarter over quarter improvement in the first three quarters of 2021.travel. All owned hotelOwned Hotel RevPAR and Total RevPAR on a constant US$ basis for the third quarter increased 307.3%42.0% and 288.5%48.1%, respectively, compared to the third quarter of 2021 due to increases inboth rate and occupancy and food and beverage revenues. For the year-to-date, all owned hotelgrowth. Year-to-date, All Owned Hotel RevPAR and Total RevPAR on a constant US$ basishas increased 51.5%81.5% and 38.7%90.5%, respectively.respectively, compared to 2021. All Owned Hotel Total RevPAR for the quarter and year-to-date 2022 benefited from strong F&B growth, which exceeded 2019 levels in the third quarter for the first time since the onset of the pandemic.

DuringOperations at most of our hotels in Florida were affected by Hurricane Ian in September 2022. Due to evacuation mandates and loss of commercial power, we estimate that RevPAR was negatively impacted by approximately 40 basis points during the third quarter.

Leisure demand continues to drive strong results at resort properties and, at the same time, the recovery at our urban properties continued in the third quarter. As a result, Total RevPAR in the quarter for all owned hotelmarkets exceeded 2021 levels and the portfolio as a whole exceeded the third quarter 2019 pre-pandemic levels. All Owned Hotel Total RevPAR in our Jacksonville, Maui,Orlando and MiamiPhoenix markets totaled $683, $635increased 36.9%, 35.6% and $334,29.4%, respectively, representing increases of 32.2%, 14.6% and 13.5%, compared to 2019, due to strongcontinued strength at our leisure demand. Ourproperties. While our hotels in New York and San Francisco/San Jose and Washington, D.C., two of our two largestlarger markets by room count, experienced all owned hotel

23


All Owned Hotel Total RevPAR of $131 and $104, respectively, representing declines of 61.7%19.1% and 65.5%12.1%, respectively, compared to third quarter 2019, as operations at these hotels beginthis is an improvement from declines of 26.5% and 15.0%, respectively, in the second quarter compared to ramp up following the lifting of many of the COVID-19 restrictions previously in place in these markets.2019. All owned hotelOwned Hotel Total RevPAR in our San Diego market, which primarily consists of convention-type hotels, increased 18.2% compared to the third quarter of 2019 driven by improvements in group business during the quarter. All Owned Hotel Total RevPAR performance was lowest for our New Orleans property, at $92,Boston market, with a decline of 47.6%26.2% compared to 2019, due to the impact of Hurricane Ida.2019.

Operating trends continue to be positive in theOur third quarter of 2021, as vaccine distribution has continued and many jurisdictions have lifted COVID-19 restrictions. In particular, hotels in Florida, Arizona and Hawaii continue to drive the portfolio, with RevPAR levels that are approaching or exceeding 2019 levels. At the same time, hotel-level operating costs are increasing at lower rates, as hiring did not keep pace with the improvement in operations at these resort destinations. The lag in hiring is due to the challenging labor environment across the industry, coupled with improving occupancy, which has hindered our managers' ability to adjust staffing levels commensurate with the increase in demand. We anticipate that hotel-level operating costs over time will increase at a higher rate, as our hotel managers adjust back to more normalized levels of operations.

Although operations remain below pre-pandemic levels, as a result of continued operational improvements at our hotels since the COVID-19 pandemic began in mid-March 2020, third quarter and year-to-date 20212022 results improved when compared to 20202021 as follows:

net loss decreased $196Net income increased $236 million for the quarter and $341$828 million year-to-date;
diluted lossDiluted earnings per share for the quarter decreased $0.27increased $0.33 for the quarter and $0.48$1.15 year-to-date;

24


Adjusted EBITDAre increased $288$151 million for the quarter and $426$844 million year-to-date; and
Adjusted FFO per diluted share increased $0.31$0.18 for the quarter and $0.47$1.02 year-to-date.

For the third quarter of 2022, operating profit margin under GAAP was 12.4% and All Owned Hotel EBITDA margin was 28.7%, both exceeding the third quarter 2019 pre-pandemic levels. Along with the strong improvements in rates, our hotel margins also have benefited from the implementation of portfolio-wide cost reductions, resulting in a reduction of All Owned Hotel operating costs across the portfolio by approximately 7% year-to-date 2022, compared to year-to-date 2019. However, for the third quarter, operating costs exceeded 2019 levels for the first time since the start of the pandemic as hotels continue to transition to more normalized levels of operations. Specifically, in the third quarter, hotels were able to increase staffing to levels more in-line with expectations based on current hotel demand.

Outlook

WhileWe have experienced a significant improvement in revenues and earnings through the COVID-19 pandemic has severely impactedthird quarter of 2022. However, current macroeconomic headwinds and industry expectationsconcerns surrounding the potential for 2021, year-over-year growthan economic slowdown are now competing with an accelerating lodging recovery. Further improvement in real GDPoperations will be dependent on our ability to maintain high-rated business in our resort markets, the continued improvement of group, business transient and business investment have seen a strong rebound from 2020, supported by recent stimulus, low interest rates, vaccine distribution, and the lifting of many government-imposed restrictions across the U.S.international inbound travel. Blue Chip Economic Indicators consensus currently estimates an increase in real U.S. GDP of 5.7%1.6% for 2021,2022, while business investment is anticipated to increase 7.9%3.7%. Though analysts believeHowever, persistently high inflation, including energy prices, and geopolitical uncertainty have led to increased risks during the unemployment rate peaked in 2020, it is anticipatedyear and elevated concerns surrounding the Federal Reserve's ability to remain elevated in 2021, with an expected average of 5.6%execute a soft landing for the year.economic growth. The range of potential outcomes on the economy and the lodging industry specifically remains exceptionally wide, reflecting the unprecedented nature of the pandemic and varying analyst assumptions surrounding the impact of inflation, supply chain disruptions, labor shortages in key industries, geopolitical conflicts, interest rate expectations and inflation expectations.the unpredictability of new COVID-19 variants.

Hotel supply growth is anticipated to remain below the long-term historical average in 2021,2022, as social distancing measures and supply chain challenges have resulted in project delays across the U.S. However,We anticipate that many of these projects will continue to be delayed or cancelled, while the new project pipeline will remain suppressed until supply chain issues and other macroeconomic concerns abate. While the pandemic has had an outsized impact on our industry, demand. As a result, RevPAR recovery to pre-pandemic levels is lagging that of the broader U.S. economy, despite lower supply growth. Luxuryparticularly in luxury and upper upscale hotels in top U.S. markets, where a majority of our hotels are located, have been most heavily affected by the pandemic,leisure travel continues to outperform expectations due in part to the sharp decline in air travel, particularly from international arrivals,pent-up demand, high personal savings and the slower recovery of corporate and group demand. While wewaning virus fears. We also have seen a significant acceleration in group and business transient demand to date in 2022, leading to improving trends across all location types, we anticipate that these factors will persistin our urban markets.

Despite strong results through the remainder of 2021.

As a resultfirst three quarters of the year, significant uncertainties remain related to broader macroeconomic trends, recession and inflation concerns and the impact of new virus variants, the pace of vaccination, particularly for school-aged children, and broader macroeconomic trends in 2021, we anticipate that the industry outlook will continue to be weighed down by the slower return of corporate and group travel, as many businesses and employees remain cautious. While strong leisure demand has supported growing investor optimism throughout 2021, the delayed return to office is likely to continue to constrain business transient and group travel in the near term. Therefore, the timing and trajectory of the recovery is difficult to forecast due to a wide range of customer responses to vaccines and the virus, seasonal shifts in the mix of business and leisure demand, as well as a condensed booking window for hotel rooms. While we currently anticipate RevPAR growth for the remainder of the year, we cannot provide a full year forecast for RevPAR at this time.variants. We believe that the continued recovery withinstrength of the lodging industry is highly dependent on the strength of thebroader overall economy, consumer confidence and the returncontinued improvement of corporate, group and group travel.international travel now that leisure demand is exceeding pre-pandemic levels in many markets. Accordingly, we believe that the impact of the recovery onoperations in specific markets and industriesasset types will continue to be uneven.

Operations at the majority of our hotels in Florida were affected by Hurricane Ian in September 2022 with the most significant damage sustained during the storm occurring at The Ritz Carlton, Naples and Hyatt Regency Coconut Point Resort and Spa. Due to evacuation mandates and/or loss of commercial power, five of our properties were closed for a limited period of time; however, three have since fully reopened. We are still evaluating the complete property and business interruption impacts of Hurricane Ian. We expect the Hyatt Regency Coconut Point Resort and Spa to reopen to guests in mid-November, as a phased reopening, with the waterpark reopening during the second quarter of 2023, while The Ritz Carlton, Naples is expected to remain closed for the remainder of 2022 and into 2023. As a result, Hurricane Ian will continue to impact our fourth quarter 2022 operations as well as our 2023 operations.

24


Based on these trends, we expect full year RevPAR of between $193 and $195, representing an increase from 2021 of 63.7% to 65.4%, respectively, and a decrease from 2019 of 3.75% to 2.75%, respectively. We anticipate that the impact of Hurricane Ian will reduce full year RevPAR by 70 basis points.

As noted above, the current outlook for the lodging industry remains highly uncertain. There can be no assurances as to the extent and timing for acontinued recovery in lodging demand for any number of reasons, including, but not limited to, slower than anticipated return of group and business travel.travel or deteriorating macroeconomic conditions.

Strategic Initiatives

Dispositions.

Balance Sheet and Financing Transactions. As of September 30, 2021, we had $1.0 billion of cash and cash equivalents. As of September 30, 2021, we have met the minimum financial covenant levels under our senior notes indentures, which reinstates our ability to incur additional debt so long as we maintain these covenant levels and subject to the provisions of our credit facility and senior notes indentures. We also exited our credit facility Covenant Relief Period as discussed in more detail in subsequent sections.

Acquisitions.During the third quarter, we acquiredsold the 200-room Baker's Cay Resort Key Largo, Curio CollectionChicago Marriott Suites Downers Grove for $16 million, including $2 million of FF&E funds retained by Hilton, for $200 million, a 223-room luxury downtown Houston hotel for $65 million and the 59-room Alila Ventana Big Sur for $150 million. The downtown Houston hotel has been renamed The Laura Hotel, part of the Autograph Collection by Marriott, and will be managed by HEI Hotels & Resorts. It is expected to open in the fourth quarter of 2021.us.

Dispositions.Acquisitions. Subsequent to quarter end, we soldacquired the Westfields Marriott Washington Dulles, San Ramon Marriott,125-room Four Seasons Resort and Residences Jackson Hole for $315 million. The Westin Buckhead Atlanta, The Westin Los Angeles Airport and The Whitley for $551 million, including approximately $11 million forresort also features an additional 44 private residences, the FF&E replacement funds.owners of which may participate in a rental program through the resort.

Capital Projects. We are utilizing the low occupancy environment to accelerate certain projects and minimize future disruption. During the first three quarters of 2021,2022, we spent approximately $201$240 million on ROI capital projects and $92$117 million on renewal and replacement projects. For full year 2021,2022, we expect total capital expenditures of $410$500 million to $465$575 million. Thistotal amount consists of ROI projects of approximately $285$320 million to $320$355 million and renewal and replacement expenditures of $125$180 million to $145$220 million. ROI projects include approximately $115$90 million to $140$115 million for the Marriott transformational capital program discussed below.

25


During the third quarter,In 2022, we completed the development of the multi-year renovation at the New York Marriott Marquis, including all 1,966expect to complete renovations to 4,000 guestrooms, over 140,000approximately 33,000 square feet of meeting space the additionand approximately 81,000 square feet of a skybridge and a renovated lobby with new bars and upgraded restaurants. Additionally, we completed the multi-year renovation at the Orlando World Center Marriott, including all 2,010 guestrooms, a redesigned 18th hole at the golf course and an updated lobby. The projects at both properties were part of the Marriott transformational capital program, discussed below.public space.

We have made substantial progress on the Marriott transformational capital program, which began in 2018 and is expected to be substantially complete by the end of 2022, and includes 16 of our hotels.2018. We believe this program will position these hotels to be more competitive in their respective markets and will enhance long-term performance through increases in RevPAR and market yield index. We agreed to invest amounts in excess of the FF&E reserves required under our management agreements and, in exchange, Marriott has provided additional priority returns on the agreed upon investments and operating profit guarantees of up to $83 million, before reductions for incentive management fees, to offset expected business disruption.

Approximately 79%94% of the total estimated costs of the program have been spent as of September 30, 2021, and we expect to complete approximately 85% of the program by the end of 2021.2022. Of the 16 hotels included in the program, we have completed projects at the Coronado Island Marriott Resort & Spa, New York Marriott Downtown, San Francisco Marriott Marquis and Santa Clara Marriott in 2019 and2019; projects at the Minneapolis Marriott City Center, San Antonio Marriott Rivercenter and JW Marriott Atlanta Buckhead in 2020. So far during 2021, we have completed the2020; and projects at The Ritz-Carlton Amelia Island, New York Marriott Marquis and Orlando World Center Marriott in 2021. In 2022, we completed projects at the Houston Marriott Medical Center and weMarina del Rey Marriott. We also expect to substantially complete the projects at Boston Marriott Copley Place, JW Marriott Houston by the Galleria and Marriott Medical Center.Marquis San Diego Marina during 2022, with the Washington Marriott at Metro Center expected to be completed in the first half of 2023.

25


Results of Operations

The following table reflects certain line items from our unaudited condensed consolidated statements of operations (in millions, except percentages):

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

Total revenues

 

$

844

 

 

$

198

 

 

 

326.3

%

 

$

1,892

 

 

$

1,353

 

 

 

39.8

%

 

$

1,189

 

 

$

844

 

 

 

40.9

%

 

$

3,644

 

 

$

1,892

 

 

 

92.6

%

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property-level costs ⁽¹⁾

 

 

920

 

 

 

498

 

 

 

84.7

 

 

 

2,153

 

 

 

1,967

 

 

 

9.5

 

 

 

1,022

 

 

 

920

 

 

 

11.1

 

 

 

2,987

 

 

 

2,153

 

 

 

38.7

 

Corporate and other expenses

 

 

24

 

 

 

18

 

 

 

33.3

 

 

 

73

 

 

 

68

 

 

 

7.4

 

 

 

29

 

 

 

24

 

 

 

20.8

 

 

 

77

 

 

 

73

 

 

 

5.5

 

Operating loss

 

 

(95

)

 

 

(318

)

 

 

70.1

 

 

 

(329

)

 

 

(682

)

 

 

51.8

 

Gain on insurance and business interruption settlements

 

 

10

 

 

 

5

 

 

 

100.0

 

 

 

17

 

 

 

5

 

 

 

240.0

 

Operating profit (loss)

 

 

148

 

 

 

(95

)

 

N/M

 

 

 

597

 

 

 

(329

)

 

N/M

 

Interest expense

 

 

43

 

 

 

66

 

 

 

(34.8

)

 

 

128

 

 

 

143

 

 

 

(10.5

)

 

 

40

 

 

 

43

 

 

 

(7.0

)

 

 

113

 

 

 

128

 

 

 

(11.7

)

Other gains

 

 

2

 

 

 

 

 

 N/M

 

 

4

 

 

 

13

 

 

 

(69.2

)

 

 

5

 

 

 

2

 

 

 

150.0

 

 

 

19

 

 

 

4

 

 

 

375.0

 

Benefit for income taxes

 

 

13

 

 

 

73

 

 

 

(82.2

)

 

 

81

 

 

 

156

 

 

 

(48.1

)

Benefit (provision) for income taxes

 

 

(6

)

 

 

13

 

 

N/M

 

 

 

(29

)

 

 

81

 

 

N/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Host Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

 

(1

)

 

 

(3

)

 

 

66.7

 

 

 

(3

)

 

 

(7

)

 

 

57.1

 

Net loss attributable to Host Inc.

 

 

(119

)

 

 

(313

)

 

 

62.0

 

 

 

(331

)

 

 

(668

)

 

 

50.4

 

Net income (loss) attributable to non-controlling interests

 

 

2

 

 

 

(1

)

 

N/M

 

 

 

8

 

 

 

(3

)

 

N/M

 

Net income (loss) attributable to Host Inc.

 

 

114

 

 

 

(119

)

 

N/M

 

 

 

486

 

 

 

(331

)

 

N/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Host L.P.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to non-controlling interests

 

 

1

 

 

 

1

 

 

 —

 

 

1

 

 

 

 

 

 N/M

 

 

 

1

 

 

 

1

 

 

 

 

 

1

 

 

 

1

 

 

 

Net loss attributable to Host L.P.

 

 

(121

)

 

 

(317

)

 

 

61.8

 

 

 

(335

)

 

 

(675

)

 

 

50.4

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Host L.P.

 

 

115

 

 

 

(121

)

 

N/M

 

 

 

493

 

 

 

(335

)

 

N/M

 

___________

(1) Amount represents total operating costs and expenses from our unaudited condensed consolidated statements of operations, less corporate and other expenses.expenses and gain on insurance and business interruption settlements.

N/M=Not meaningful.

26


Statement of Operations Results and Trends

The COVID-19 pandemic began to significantly impact hotel operations beginning in mid-March of 2020. However, RevPAR has increased during 2021, from $44.29 in January to $126.23 in September. There can be no assurances that the increases in RevPAR will continue.

Hotel Sales Overview

The following table presents total revenues in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

557

 

 

$

126

 

 

 

342.1

%

 

$

1,237

 

 

$

813

 

 

 

52.2

%

 

$

746

 

 

$

557

 

 

 

33.9

%

 

$

2,251

 

 

$

1,237

 

 

 

82.0

%

Food and beverage

 

 

191

 

 

 

31

 

 

 

516.1

 

 

 

405

 

 

 

372

 

 

 

8.9

 

 

 

330

 

 

 

191

 

 

 

72.8

 

 

 

1,032

 

 

 

405

 

 

 

154.8

 

Other

 

 

96

 

 

 

41

 

 

 

134.1

 

 

 

250

 

 

 

168

 

 

 

48.8

 

 

 

113

 

 

 

96

 

 

 

17.7

 

 

 

361

 

 

 

250

 

 

 

44.4

 

Total revenues

 

$

844

 

 

$

198

 

 

 

326.3

 

 

$

1,892

 

 

$

1,353

 

 

 

39.8

 

 

$

1,189

 

 

$

844

 

 

 

40.9

 

 

$

3,644

 

 

$

1,892

 

 

 

92.6

 

While still below pre-pandemic levels, operationsOperations have improved significantly in the third quarter of 20212022 compared to 2020. This2021 due to the ongoing recovery of the lodging industry from the COVID-19 pandemic. However, with operations now normalizing from the effects of the pandemic, we are no longer experiencing the quarter-to-quarter sequential increases in results that we experienced in 2021 and the first two quarters of 2022. Third quarter results were impacted by typical seasonality and shifting business and market mix which has impactedtraditionally made our third quarter results the weakest quarter of the year by comparison. In addition to improved operations, as follows:acquisitions that occurred in 2021 contributed $45 million and $242 million to the growth in revenues in the third quarter and year-to-date 2022, respectively, compared to the negative impact on revenues resulting from dispositions of $66 million and $87 million in the third quarter and year-to-date 2022, respectively.

26


Rooms. Total rooms revenues increased $431$189 million, or 33.9%, and $1,014 million, or 82.0%, for the third quarter and increased $424 million, or 52.2%, year-to-date.year-to-date, respectively, due to increases in average room rates and occupancy compared to 2021. Average room rates for our portfolio have also exceeded pre-pandemic levels, while occupancy continues to lag 2019.

Food and beverage. Total food and beverage (“F&B”)&B revenues increased $160$139 million, or 72.8%, and $627 million, or 154.8%, for the quarter and increased $33 million, or 8.9%, year-to-date. Banquet and AV revenues foryear-to-date, respectively, exceeding 2019 levels in the third quarter 2021 increased significantly comparedfor the first time since the onset of the pandemic. The improvements are due to strong outlet, banquet and audio-visual revenues, reflecting the second quarterreturn of 2021, while year-to-date, F&B revenue growth has primarily been driven by the performance of our outlets.group room nights.

Other revenues. Total other revenues increased $55$17 million, or 17.7%, and $111 million, or 44.4%, for the quarter and increased $82 million, or 48.8%, year-to-date, due primarily torespectively, which was driven by an increase in attrition and cancellation fees, as well as strong ancillarygolf and spa revenues.

Property-level Operating Expenses

The following table presents property-level operating expenses in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

Quarter ended September 30,

 

 

 

 

Year-to-date ended September 30,

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

 

2022

 

 

2021

 

 

Change

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

150

 

 

$

69

 

 

 

117.4

%

 

$

324

 

 

$

299

 

 

 

8.4

%

 

$

190

 

 

$

150

 

 

 

26.7

%

 

$

539

 

 

$

324

 

 

 

66.4

%

Food and beverage

 

 

146

 

 

 

72

 

 

 

102.8

 

 

 

313

 

 

 

356

 

 

 

(12.1

)

 

 

230

 

 

 

146

 

 

 

57.5

 

 

 

675

 

 

 

313

 

 

 

115.7

 

Other departmental and support expenses

 

 

252

 

 

 

109

 

 

 

131.2

 

 

 

621

 

 

 

541

 

 

 

14.8

 

 

 

300

 

 

 

252

 

 

 

19.0

 

 

 

873

 

 

 

621

 

 

 

40.6

 

Management fees

 

 

27

 

 

 

5

 

 

 

440.0

 

 

 

59

 

 

 

33

 

 

 

78.8

 

 

 

48

 

 

 

27

 

 

 

77.8

 

 

 

150

 

 

 

59

 

 

 

154.2

 

Other property-level expenses

 

 

82

 

 

 

77

 

 

 

6.5

 

 

 

239

 

 

 

240

 

 

 

(0.4

)

 

 

90

 

 

 

82

 

 

 

9.8

 

 

 

252

 

 

 

239

 

 

 

5.4

 

Depreciation and amortization

 

 

263

 

 

 

166

 

 

 

58.4

 

 

 

597

 

 

 

498

 

 

 

19.9

 

 

 

164

 

 

 

263

 

 

 

(37.6

)

 

 

498

 

 

 

597

 

 

 

(16.6

)

Total property-level operating expenses

 

$

920

 

 

$

498

 

 

 

84.7

 

 

$

2,153

 

 

$

1,967

 

 

 

9.5

 

 

$

1,022

 

 

$

920

 

 

 

11.1

 

 

$

2,987

 

 

$

2,153

 

 

 

38.7

 

Our operating costs and expenses, which have both fixed and variable components, are affected by several factors. Rooms expenses are affected mainly by occupancy, which drives costs related to items such as housekeeping, reservation systems, room supplies, laundry services and front desk costs. Food and beverage expenses correlate closely with food and beverage revenues and are affected by occupancy and the mix of business between banquet, audio-visual and outlet sales. However, the most significant expense for the rooms, food and beverage, and other departmental and support expenses is wages and employee benefits, which comprise approximately 55% of these expenses. Due to a significant decline in operations and implementation of portfolio-wide cost reductions in response to the COVID-19 pandemic, staffing levels at our hotels declined significantly, leading to a reduction to wages and benefits expense compared to pre-pandemic levels, despite above inflationary growth in hourly wages, which we expect to continue

27


into 2022. Portfolio-wide hotel operating costs inDuring the third quarter and year-to-date 2021, excluding severance, were nearly 30% and 44% lower, respectively,of 2022, these expenses increased 45% compared to the same periods in 2019.In addition, included in these amounts for the year-to-date 2021, is a reduction to wages and benefits of approximately $11 million, related to the ERC recorded by our managers, the benefit of which was passed on to us.

The ramp up in staffing at several hotels during 2021 continues to lagreflecting the increase in demandhiring as operations have recovered.

Early in 2022, hiring was temporarily paused in many areas due to the challenging labor market acrossOmicron variant, as well as the industry, which could result in upward pressure on wages and benefits going forward. However, the expiration of supplemental unemployment benefits may temper possible increases. As a resultseasonality of the lagindustry. While hiring pace improved during the first half of the year, the significant acceleration in demand further challenged the ability of our hotel managers to increase hotel staffing commensurate with the increase in demand. However, during the third quarter our managers were able to continue improvements in hiring portfolio-widepace, and managers at many of our hotels are now operating expenses were only 21% higher comparedat desired staffing levels as of the end of the third quarter. In aggregate, wage and benefit rate inflation is expected to be in the second quarter of 2021, despite an approximately 25% increase4% to 5% range in total revenues quarter over quarter. 2022.

Other property-level expenses consist of property taxes, the amounts and structure of which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, all of which do not necessarily increase or decrease based on similar changes in revenues at our hotels.

The changeincrease in expenses for the third quarter of 2022 compared to 20202021 for rooms, food and beverage, other departmental and support, and management fees predominantly arewas generally due to the start of the recoverycorresponding increase in revenues from the impact of the COVID-19 pandemic. While our operators have maintained a reduced level of expenses compared to pre-pandemic levels, an increaseimprovements in occupancy and hotel operations, has led to increases in expenses for the third quarter of 2021 compared to 2020. For the year-to-date period, despite pre-pandemic results in January and February of 2020, improving occupancy in 2021 led to an increase in most expenses for 2021 compared to 2020, with the exception of F&B expenses and other property level expenses. As a result, expenses changed as follows:

Rooms. Rooms expenses increased $81$40 million, or 26.7%, and $215 million, or 66.4%, for the quarter and increased $25 million, or 8.4%, year-to-date.year-to-date, respectively, reflecting an increase in staffing commensurate with the improvements in occupancy, while commission costs remain below pre-pandemic levels.

Food and beverage. F&B expenses increased $74$84 million, or 57.5%, and $362 million, or 115.7%, for the quarter and decreased $43 million, or 12.1%, year-to-date. The decrease year-to-date, reflects the pre-pandemic expense levels for Januaryrespectively. Overall, F&B costs as a percentage of revenues declined, benefiting from improved banquet revenues and February of 2020.ongoing productivity improvement.

27


Other departmental and support expenses. Other departmental and support expenses increased $143$48 million, or 131.2%19.0%, and $252 million, or 40.6%, for the quarter and increased $80 million, or 14.8%, year-to-date.year-to-date, respectively, due primarily to improved operations.

Management fees. Base management fees, which generally are calculated as a percentage of total revenues, increased $19$9 million, or 36.0%, and $48 million, or 87.3%, for the quarter and increased $16 million, or 41.0%, year-to-date.year-to-date, respectively. Incentive management fees, which generally are based on the amount of operating profit at each hotel after we receive a priority return on our investment, increased $3$12 million and $43 million for the quarter and $10 million year-to-date.year-to-date, respectively, due primarily to the improved operations at our resort properties.

Other property-level expenses. These expenses generally do not vary significantly based on occupancy and include expenses such as property taxes and insurance. Other property level expenses increased $5$8 million, or 6.5%9.8%, and $13 million, or 5.4%, for the quarter and decreased $1 million, or 0.4%, year-to-date,. respectively, due to increases in sales and general excise taxes at our hotels, property insurance premiums and rent on a portion of our ground leases that are based on a percentage of sales. The increases were partially offset by a decrease in property taxes. Other property-level expenses also were partially offset by the receipt of operating profit guarantees received from Marriott under the transformational capital program.program in both 2022 and 2021.

Depreciation and amortization. Depreciation and amortization increased $97decreased $99 million, or 58.4%37.6%, for the quarter and $99 million, or 19.9%16.6%, for the year-to-date, primarily due to impairment expense of $92 million recorded in the third quarter of 2021.

Other Income and Expense

Corporate and other expenses. The following table details our corporate and other expenses for the quarter and year-to-date (in millions):

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative costs

 

$

20

 

$

14

 

$

60

 

$

57

 

 

$

20

 

 

$

20

 

 

$

58

 

 

$

60

 

Non-cash stock-based compensation expense

 

 

4

 

 

4

 

 

13

 

 

11

 

 

 

9

 

 

 

4

 

 

 

19

 

 

 

13

 

Total

 

$

24

 

 

$

18

 

 

$

73

 

 

$

68

 

 

$

29

 

 

$

24

 

 

$

77

 

 

$

73

 

28


Interest expense. Interest expense decreased for the quarter and year-to-date primarily due to refinancingthe repayment of senior notes and the make-whole premium paid to retire senior notesrevolver portion of the credit facility, partially offset by an increase in the third quarter of 2020.interest rates on our floating rate debt. The following table details our interest expense for the quarter and year-to-date (in millions):

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cash interest expense ⁽¹⁾

 

$

41

 

 

$

36

 

 

$

121

 

 

$

109

 

 

$

37

 

 

$

41

 

 

$

105

 

 

$

121

 

Non-cash interest expense

 

 

2

 

 

 

3

 

 

 

7

 

 

 

6

 

 

 

3

 

 

 

2

 

 

 

8

 

 

 

7

 

Non-cash debt extinguishment costs

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Cash debt extinguishment costs ⁽¹⁾

 

 

 

 

 

26

 

 

 

 

 

 

27

 

Total interest expense

 

$

43

 

 

$

66

 

 

$

128

 

 

$

143

 

 

$

40

 

 

$

43

 

 

$

113

 

 

$

128

 

_________

(1)
Including the change in accrued interest, total cash interest paid was $32$31 million and $53$32 million for the quarters ended September 30, 2022 and 2021, respectively, and 2020, respectively,$100 million and $115 million for year-to-date 2022 and $126 million for the year-to-date 2021, and 2020, respectively.

Other gains. Other gains increased $2$3 million and $15 million for the quarter and decreased $9 million, or 69.2%, year-to-date. The decrease year-to-date, is primarily due torespectively, reflecting the sale of a parcel of land adjacent to The Phoenician hotelChicago Marriott Suites Downers Grove in the secondthird quarter, and the sale of the Sheraton Boston Hotel in the first quarter of 2020, which resulted in a gain of approximately $12 million.2022.

Equity in earnings (losses) of affiliates. Equity in earnings of affiliates increased $7decreased $3 million for the third quarter and $62$33 million year-to-date, primarily due to improvements in operations at the affiliates as well as unrealized gainslosses on our investment in Fifth Wall Ventures, L.P. in 2022 compared to unrealized gains in 2021, while 2020 year-to-date included an impairment of inventorypartially offset by improved operations at our Maui timeshare of $14 million.non-consolidated properties.

Benefit (provision) for income taxes. We lease substantially all our properties to consolidated subsidiaries designated as taxable REIT subsidiaries (“TRS”) for U.S. federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations and the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit. For the third quarter and year-to-date, we recorded an income tax benefitprovision of $13$6 million and $81$29 million, respectively, due primarily to the domestic net operating loss incurredprofitability of hotel operations retained by ourthe TRS. Any domestic net operating loss incurred by our TRS in 2021 may be carried forward indefinitely, its use in future years being subject to a limit of 80% of annual taxable income. Our TRS is expected to generate additional net operating losses in 2021.

28


Hotel RevPAR Overview

To facilitate a quarter-to-quarter comparison of our operations, we typically present certain operating statistics 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 suspendedare revising our comparable hoteloperating statistics presentation to instead present pro forma hotelAll Owned Hotel operating results for all hotels.results. See “All Owned Hotel Pro Forma Hotel Operating Statistics and Results” for a complete description of our methodology. We also include, following the All Owned Hotels results, the same operating statistics presentation on an actual basis, which includes results for our portfolio for the time period of our ownership, including dispositions through their date of disposal and acquisitions beginning as of the date of acquisition. Lastly, we discuss our Hotel RevPAR results by geographic location and mix of business (i.e., transient, group, or contract).

29


Hotel Operating Data by Location

The following tables set forth performance information for our hotels by geographic location for the quarter and year-to-date ended September 30, 20212022 compared to 20202021 and to 2019, respectively, to provide a comparison of hotel statistics in the current period to last year as well as to pre-pandemic levels:

All Owned Hotels (pro forma)Hotel Results by Location in Constant US$Compared to 2021

As of September 30, 2021

 

Quarter ended September 30, 2021

 

Quarter ended September 30, 2020

 

 

 

 

 

As of September 30, 2022

 

Quarter ended September 30, 2022

 

Quarter ended September 30, 2021

 

 

 

 

 

Location

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

Maui/Oahu

 

4

 

2,007

 

$

514.34

 

82.8

%

$

425.86

 

$

635.28

 

$

172.74

 

11.3

%

$

19.47

 

$

25.42

 

2,087.7

%

 

2,399.1

%

 

4

 

2,007

 

$

565.30

 

73.6

%

$

416.12

 

$

643.06

 

$

514.34

 

82.8

%

$

425.86

 

$

635.28

 

(2.3

)%

 

1.2

%

Miami

 

2

 

1,033

 

457.43

 

50.2

 

229.66

 

427.55

 

424.80

 

53.9

 

229.17

 

390.19

 

0.2

 

9.6

 

Jacksonville

 

1

 

446

 

465.60

 

68.7

 

319.90

 

683.35

 

419.23

 

43.3

 

181.67

 

383.23

 

76.1

 

78.3

 

 

1

 

446

 

487.53

 

67.0

 

326.67

 

707.75

 

465.60

 

68.7

 

319.90

 

683.35

 

2.1

 

3.6

 

Miami

 

3

 

1,276

 

364.54

 

55.2

 

201.40

 

333.79

 

209.34

 

26.8

 

56.08

 

98.65

 

259.1

 

238.3

 

Florida Gulf Coast

 

5

 

1,842

 

314.16

 

45.2

 

141.93

 

286.62

 

288.56

 

33.7

 

97.38

 

194.67

 

45.7

 

47.2

 

 

5

 

1,850

 

330.56

 

53.9

 

178.01

 

340.62

 

314.16

 

45.2

 

141.93

 

286.62

 

25.4

 

18.8

 

Orlando

 

2

 

2,448

 

327.78

 

61.4

 

201.23

 

427.58

 

332.90

 

37.4

 

124.35

 

228.19

 

61.8

 

87.4

 

Phoenix

 

4

 

1,822

 

245.88

 

57.7

 

141.92

 

321.83

 

201.12

 

22.0

 

44.33

 

110.66

 

220.1

 

190.8

 

 

4

 

1,822

 

251.77

 

58.1

 

146.25

 

372.05

 

245.88

 

57.7

 

141.92

 

321.83

 

3.0

 

15.6

 

Orlando

 

2

 

2,448

 

332.90

 

37.4

 

124.35

 

228.19

 

433.28

 

7.0

 

30.40

 

63.13

 

309.1

 

261.5

 

Los Angeles/
Orange County

 

5

 

2,119

 

218.60

 

71.1

 

155.40

 

216.04

 

182.68

 

26.4

 

48.15

 

62.24

 

222.8

 

247.1

 

 

3

 

1,067

 

303.74

 

86.4

 

262.42

 

372.72

 

263.40

 

72.4

 

190.80

 

263.83

 

37.5

 

41.3

 

New York

 

2

 

2,486

 

309.77

 

84.3

 

260.99

 

351.90

 

238.23

 

45.3

 

107.97

 

138.91

 

141.7

 

153.3

 

San Diego

 

3

 

3,288

 

292.38

 

85.4

 

249.83

 

440.67

 

247.61

 

72.1

 

178.55

 

281.14

 

39.9

 

56.7

 

Austin

 

2

 

767

 

233.32

 

68.3

 

159.46

 

289.77

 

210.96

 

58.1

 

122.67

 

207.76

 

30.0

 

39.5

 

Philadelphia

 

2

 

810

 

191.85

 

79.1

 

151.74

 

223.07

 

147.01

 

32.2

 

47.36

 

68.09

 

220.4

 

227.6

 

 

2

 

810

 

221.65

 

85.9

 

190.48

 

286.56

 

191.85

 

79.1

 

151.74

 

223.07

 

25.5

 

28.5

 

San Diego

 

3

 

3,288

 

247.61

 

72.1

 

178.55

 

281.14

 

203.85

 

15.6

 

��

31.78

 

52.66

 

461.8

 

433.9

 

Houston

 

4

 

1,716

 

149.60

 

66.6

 

99.67

 

133.88

 

105.12

 

32.4

 

34.07

 

47.93

 

192.5

 

179.3

 

Atlanta

 

4

 

1,682

 

178.31

 

56.6

 

100.94

 

142.30

 

139.03

 

31.6

 

43.89

 

60.57

 

130.0

 

134.9

 

Northern Virginia

 

3

 

1,252

 

169.41

 

60.6

 

102.70

 

156.44

 

157.90

 

19.7

 

31.11

 

43.91

 

230.1

 

256.3

 

San Antonio/
Austin

 

3

 

1,960

 

181.37

 

56.1

 

101.79

 

152.09

 

130.06

 

15.4

 

20.04

 

28.10

 

408.0

 

441.3

 

Washington, D.C. (CBD)

 

5

 

3,238

 

185.06

 

37.1

 

68.65

 

96.94

 

163.25

 

6.3

 

10.22

 

12.42

 

571.6

 

680.6

 

 

5

 

3,238

 

237.56

 

65.7

 

156.01

 

223.72

 

185.06

 

37.1

 

68.65

 

96.94

 

127.3

 

130.8

 

Denver

 

3

 

1,340

 

169.25

 

65.4

 

110.75

 

141.64

 

122.10

 

21.5

 

26.24

 

34.58

 

322.0

 

309.6

 

Chicago

 

4

 

1,816

 

191.01

 

62.4

 

119.27

 

149.38

 

124.78

 

17.6

 

21.95

 

26.96

 

443.2

 

454.1

 

 

3

 

1,562

 

263.27

 

79.3

 

208.86

 

286.41

 

200.33

 

63.2

 

126.61

 

159.82

 

65.0

 

79.2

 

New York

 

3

 

4,261

 

217.90

 

46.2

 

100.72

 

130.88

 

187.37

 

11.0

 

20.70

 

23.16

 

386.5

 

465.2

 

Seattle

 

2

 

1,315

 

202.49

 

53.5

 

108.25

 

130.03

 

172.32

 

6.1

 

10.48

 

12.33

 

932.5

 

954.7

 

 

2

 

1,315

 

264.88

 

81.9

 

216.97

 

274.62

 

202.49

 

53.5

 

108.25

 

130.03

 

100.4

 

111.2

 

New Orleans

 

1

 

1,333

 

136.76

 

54.3

 

74.30

 

91.66

 

112.64

 

26.6

 

30.00

 

35.57

 

147.7

 

157.7

 

San Francisco/
San Jose

 

7

 

4,530

 

163.42

 

50.0

 

81.72

 

104.30

 

165.35

 

13.1

 

21.59

 

27.13

 

278.4

 

284.5

 

 

6

 

4,162

 

244.45

 

71.3

 

174.35

 

249.76

 

165.10

 

50.0

 

82.54

 

105.04

 

111.2

 

137.8

 

Boston

 

3

 

2,715

 

204.56

 

48.1

 

98.46

 

117.58

 

135.30

 

4.9

 

6.62

 

9.43

 

1,387.8

 

1,146.4

 

 

2

 

1,495

 

263.46

 

63.8

 

167.99

 

223.00

 

202.75

 

60.3

 

122.31

 

149.10

 

37.3

 

49.6

 

Northern Virginia

 

2

 

916

 

214.33

 

67.2

 

144.06

 

219.78

 

187.15

 

58.9

 

110.22

 

162.40

 

30.7

 

35.3

 

Atlanta

 

2

 

810

 

183.46

 

72.8

 

133.57

 

199.97

 

163.07

 

64.8

 

105.67

 

146.59

 

26.4

 

36.4

 

San Antonio

 

2

 

1,512

 

190.72

 

64.5

 

122.96

 

194.39

 

181.30

 

55.8

 

101.18

 

149.13

 

21.5

 

30.3

 

New Orleans

 

1

 

1,333

 

163.33

 

63.6

 

103.87

 

158.20

 

136.76

 

54.3

 

74.30

 

91.66

 

39.8

 

72.6

 

Denver

 

3

 

1,340

 

197.50

 

76.5

 

151.18

 

214.65

 

169.25

 

65.4

 

110.75

 

141.64

 

36.5

 

51.5

 

Houston

 

5

 

1,942

 

176.72

 

62.1

 

109.74

 

149.01

 

149.60

 

66.6

 

99.67

 

133.88

 

10.1

 

11.3

 

Other

 

8

 

 

2,759

 

 

252.92

 

 

53.8

 

 

136.07

 

 

189.18

 

 

198.70

 

 

26.0

 

 

51.63

 

 

73.67

 

 

163.6

 

 

156.8

 

 

9

 

 

2,936

 

 

261.04

 

 

63.6

 

 

166.04

 

 

240.26

 

 

250.39

 

 

55.3

 

 

138.36

 

 

193.81

 

 

20.0

 

 

24.0

 

Domestic

 

79

 

 

45,975

 

 

236.65

 

 

55.7

 

 

131.82

 

 

199.00

 

 

184.34

 

 

17.6

 

 

32.40

 

 

51.32

 

 

306.8

 

 

287.7

 

 

72

 

 

40,585

 

 

278.18

 

 

69.9

 

 

194.55

 

 

311.41

 

 

244.92

 

 

56.6

 

 

138.57

 

 

211.96

 

 

40.4

 

 

46.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

1,499

 

 

90.99

 

 

51.4

 

 

46.77

 

 

66.43

 

 

93.15

 

 

11.3

 

 

10.56

 

 

14.14

 

 

342.8

 

 

369.8

 

 

5

 

 

1,499

 

 

200.98

 

 

62.0

 

 

124.66

 

 

162.44

 

 

90.99

 

 

51.4

 

 

46.77

 

 

66.43

 

 

166.5

 

 

144.5

 

All Locations - Constant US$

 

84

 

 

47,474

 

232.40

 

55.6

 

129.14

 

194.82

 

182.46

 

17.4

 

31.71

 

50.15

 

307.3

 

288.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

As of September 30, 2021

 

Quarter ended September 30, 2021

 

Quarter ended September 30, 2020

 

 

 

 

 

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

International

 

5

 

1,499

 

$

90.99

 

51.4

%

$

46.77

 

$

66.43

 

$

88.93

 

11.3

%

$

10.08

 

$

13.50

 

363.8

%

 

392.0

%

Domestic

 

79

 

 

45,975

 

 

236.65

 

 

55.7

 

 

131.82

 

 

199.00

 

 

184.34

 

 

17.6

 

 

32.40

 

 

51.32

 

 

306.8

 

 

287.7

 

All Locations

 

84

 

 

47,474

 

232.40

 

55.6

 

129.14

 

194.82

 

182.37

 

17.4

 

31.69

 

50.13

 

307.5

 

288.7

 

 

77

 

 

42,084

 

 

275.73

 

69.7

 

192.06

 

306.11

 

239.89

 

56.4

 

135.28

 

206.75

 

42.0

 

48.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29


All Owned Hotel Results by Location Compared to 2019

 

As of September 30, 2022

 

Quarter ended September 30, 2022

 

Quarter ended September 30, 2019

 

 

 

 

 

Location

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

Maui/Oahu

 

4

 

 

2,007

 

$

565.30

 

 

73.6

%

$

416.12

 

$

643.06

 

$

385.51

 

 

91.5

%

$

352.78

 

$

554.15

 

 

18.0

%

 

16.0

%

Miami

 

2

 

 

1,033

 

 

457.43

 

 

50.2

 

 

229.66

 

 

427.55

 

 

259.69

 

 

76.2

 

 

197.80

 

 

341.68

 

 

16.1

 

 

25.1

 

Jacksonville

 

1

 

 

446

 

 

487.53

 

 

67.0

 

 

326.67

 

 

707.75

 

 

363.69

 

 

69.0

 

 

251.05

 

 

516.90

 

 

30.1

 

 

36.9

 

Florida Gulf Coast

 

5

 

 

1,850

 

 

330.56

 

 

53.9

 

 

178.01

 

 

340.62

 

 

242.93

 

 

61.6

 

 

149.63

 

 

302.07

 

 

19.0

 

 

12.8

 

Orlando

 

2

 

 

2,448

 

 

327.78

 

 

61.4

 

 

201.23

 

 

427.58

 

 

250.13

 

 

61.0

 

 

152.55

 

 

315.38

 

 

31.9

 

 

35.6

 

Phoenix

 

4

 

 

1,822

 

 

251.77

 

 

58.1

 

 

146.25

 

 

372.05

 

 

197.07

 

 

57.9

 

 

114.19

 

 

287.59

 

 

28.1

 

 

29.4

 

Los Angeles/ Orange County

 

3

 

 

1,067

 

 

303.74

 

 

86.4

 

 

262.42

 

 

372.72

 

 

271.42

 

 

86.6

 

 

235.06

 

 

344.41

 

 

11.6

 

 

8.2

 

New York

 

2

 

 

2,486

 

 

309.77

 

 

84.3

 

 

260.99

 

 

351.90

 

 

291.70

 

 

92.3

 

 

269.15

 

 

381.03

 

 

(3.0

)

 

(7.6

)

San Diego

 

3

 

 

3,288

 

 

292.38

 

 

85.4

 

 

249.83

 

 

440.67

 

 

256.92

 

 

83.5

 

 

214.41

 

 

372.78

 

 

16.5

 

 

18.2

 

Austin

 

2

 

 

767

 

 

233.32

 

 

68.3

 

 

159.46

 

 

289.77

 

 

213.65

 

 

84.4

 

 

180.39

 

 

304.72

 

 

(11.6

)

 

(4.9

)

Philadelphia

 

2

 

 

810

 

 

221.65

 

 

85.9

 

 

190.48

 

 

286.56

 

 

207.13

 

 

88.2

 

 

182.60

 

 

295.52

 

 

4.3

 

 

(3.0

)

Washington, D.C. (CBD)

 

5

 

 

3,238

 

 

237.56

 

 

65.7

 

 

156.01

 

 

223.72

 

 

211.15

 

 

84.4

 

 

178.19

 

 

254.63

 

 

(12.4

)

 

(12.1

)

Chicago

 

3

 

 

1,562

 

 

263.27

 

 

79.3

 

 

208.86

 

 

286.41

 

 

232.68

 

 

87.4

 

 

203.30

 

 

288.11

 

 

2.7

 

 

(0.6

)

Seattle

 

2

 

 

1,315

 

 

264.88

 

 

81.9

 

 

216.97

 

 

274.62

 

 

260.45

 

 

90.2

 

 

234.96

 

 

291.64

 

 

(7.7

)

 

(5.8

)

San Francisco/ San Jose

 

6

 

 

4,162

 

 

244.45

 

 

71.3

 

 

174.35

 

 

249.76

 

 

270.46

 

 

84.9

 

 

229.73

 

 

308.58

 

 

(24.1

)

 

(19.1

)

Boston

 

2

 

 

1,495

 

 

263.46

 

 

63.8

 

 

167.99

 

 

223.00

 

 

246.21

 

 

89.9

 

 

221.40

 

 

302.19

 

 

(24.1

)

 

(26.2

)

Northern Virginia

 

2

 

 

916

 

 

214.33

 

 

67.2

 

 

144.06

 

 

219.78

 

 

213.63

 

 

76.6

 

 

163.58

 

 

237.84

 

 

(11.9

)

 

(7.6

)

Atlanta

 

2

 

 

810

 

 

183.46

 

 

72.8

 

 

133.57

 

 

199.97

 

 

165.72

 

 

83.6

 

 

138.47

 

 

222.85

 

 

(3.5

)

 

(10.3

)

San Antonio

 

2

 

 

1,512

 

 

190.72

 

 

64.5

 

 

122.96

 

 

194.39

 

 

165.01

 

 

66.6

 

 

109.84

 

 

155.81

 

 

11.9

 

 

24.8

 

New Orleans

 

1

 

 

1,333

 

 

163.33

 

 

63.6

 

 

103.87

 

 

158.20

 

 

156.82

 

 

77.0

 

 

120.78

 

 

175.05

 

 

(14.0

)

 

(9.6

)

Denver

 

3

 

 

1,340

 

 

197.50

 

 

76.5

 

 

151.18

 

 

214.65

 

 

184.28

 

 

84.5

 

 

155.64

 

 

218.16

 

 

(2.9

)

 

(1.6

)

Houston

 

5

 

 

1,942

 

 

176.72

 

 

62.1

 

 

109.74

 

 

149.01

 

 

170.32

 

 

67.0

 

 

114.07

 

 

159.84

 

 

(3.8

)

 

(6.8

)

Other

 

9

 

 

2,936

 

 

261.04

 

 

63.6

 

 

166.04

 

 

240.26

 

 

198.34

 

 

79.1

 

 

156.91

 

 

241.19

 

 

5.8

 

 

(0.4

)

Domestic

 

72

 

 

40,585

 

 

278.18

 

 

69.9

 

 

194.55

 

 

311.41

 

 

240.95

 

 

79.7

 

 

191.95

 

 

299.74

 

 

1.4

 

 

3.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

1,499

 

 

200.98

 

 

62.0

 

 

124.66

 

 

162.44

 

 

159.14

 

 

75.9

 

 

120.86

 

 

166.88

 

 

3.1

 

 

(2.7

)

All Locations

 

77

 

 

42,084

 

 

275.73

 

 

69.7

 

 

192.06

 

 

306.11

 

 

238.14

 

 

79.5

 

 

189.39

 

 

294.96

 

 

1.4

 

 

3.8

 

All Owned Hotel Results by Location Compared to 2021

 

As of September 30, 2022

 

Year-to-date ended September 30, 2022

 

Year-to-date ended September 30, 2021

 

 

 

 

 

Location

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

Maui/Oahu

 

4

 

 

2,007

 

$

559.15

 

 

76.0

%

$

424.91

 

$

657.89

 

$

470.97

 

 

67.4

%

$

317.20

 

$

480.87

 

 

34.0

%

 

36.8

%

Miami

 

2

 

 

1,033

 

 

618.23

 

 

62.8

 

 

388.09

 

 

647.24

 

 

555.80

 

 

56.4

 

 

313.58

 

 

499.04

 

 

23.8

 

 

29.7

 

Jacksonville

 

1

 

 

446

 

 

533.33

 

 

69.5

 

 

370.85

 

 

799.91

 

 

506.77

 

 

57.8

 

 

293.02

 

 

587.76

 

 

26.6

 

 

36.1

 

Florida Gulf Coast

 

5

 

 

1,850

 

 

442.56

 

 

65.9

 

 

291.82

 

 

570.66

 

 

416.57

 

 

54.8

 

 

228.24

 

 

426.68

 

 

27.9

 

 

33.7

 

Orlando

 

2

 

 

2,448

 

 

395.30

 

 

64.4

 

 

254.71

 

 

498.62

 

 

398.72

 

 

27.3

 

 

108.98

 

 

196.25

 

 

133.7

 

 

154.1

 

Phoenix

 

4

 

 

1,822

 

 

366.88

 

 

69.1

 

 

253.45

 

 

551.73

 

 

301.23

 

 

56.5

 

 

170.12

 

 

346.53

 

 

49.0

 

 

59.2

 

Los Angeles/ Orange County

 

3

 

 

1,067

 

 

290.28

 

 

79.6

 

 

231.14

 

 

331.60

 

 

234.10

 

 

50.5

 

 

118.33

 

 

162.84

 

 

95.3

 

 

103.6

 

New York

 

2

 

 

2,486

 

 

305.98

 

 

68.8

 

 

210.55

 

 

297.35

 

 

200.01

 

 

34.6

 

 

69.19

 

 

85.45

 

 

204.3

 

 

248.0

 

San Diego

 

3

 

 

3,288

 

 

275.85

 

 

76.1

 

 

209.91

 

 

376.43

 

 

218.39

 

 

45.3

 

 

98.85

 

 

155.68

 

 

112.4

 

 

141.8

 

Austin

 

2

 

 

767

 

 

261.29

 

 

70.3

 

 

183.71

 

 

319.55

 

 

190.23

 

 

51.9

 

 

98.76

 

 

159.17

 

 

86.0

 

 

100.8

 

Philadelphia

 

2

 

 

810

 

 

212.19

 

 

79.8

 

 

169.40

 

 

258.46

 

 

169.58

 

 

58.7

 

 

99.52

 

 

147.38

 

 

70.2

 

 

75.4

 

Washington, D.C. (CBD)

 

5

 

 

3,238

 

 

258.02

 

 

60.5

 

 

156.14

 

 

222.68

 

 

161.96

 

 

42.2

 

 

68.41

 

 

81.26

 

 

128.2

 

 

174.0

 

Chicago

 

3

 

 

1,562

 

 

238.34

 

 

64.8

 

 

154.44

 

 

212.39

 

 

176.19

 

 

37.4

 

 

65.84

 

 

81.71

 

 

134.6

 

 

159.9

 

Seattle

 

2

 

 

1,315

 

 

234.51

 

 

64.1

 

 

150.37

 

 

194.36

 

 

188.47

 

 

27.8

 

 

52.43

 

 

63.79

 

 

186.8

 

 

204.7

 

San Francisco/ San Jose

 

6

 

 

4,162

 

 

230.51

 

 

63.1

 

 

145.43

 

 

208.62

 

 

155.78

 

 

31.4

 

 

48.92

 

 

63.32

 

 

197.3

 

 

229.5

 

Boston

 

2

 

 

1,495

 

 

246.01

 

 

57.4

 

 

141.27

 

 

186.74

 

 

173.03

 

 

37.5

 

 

64.82

 

 

80.96

 

 

117.9

 

 

130.6

 

Northern Virginia

 

2

 

 

916

 

 

215.60

 

 

65.3

 

 

140.83

 

 

212.13

 

 

177.75

 

 

45.4

 

 

80.62

 

 

118.44

 

 

74.7

 

 

79.1

 

Atlanta

 

2

 

 

810

 

 

181.26

 

 

72.2

 

 

130.94

 

 

204.64

 

 

152.57

 

 

54.5

 

 

83.14

 

 

112.32

 

 

57.5

 

 

82.2

 

San Antonio

 

2

 

 

1,512

 

 

194.11

 

 

67.3

 

 

130.73

 

 

201.94

 

 

160.63

 

 

40.8

 

 

65.54

 

 

95.17

 

 

99.5

 

 

112.2

 

New Orleans

 

1

 

 

1,333

 

 

196.59

 

 

65.3

 

 

128.42

 

 

187.76

 

 

128.95

 

 

37.6

 

 

48.51

 

 

65.71

 

 

164.7

 

 

185.7

 

Denver

 

3

 

 

1,340

 

 

183.44

 

 

63.9

 

 

117.14

 

 

169.54

 

 

149.35

 

 

42.1

 

 

62.95

 

 

80.24

 

 

86.1

 

 

111.3

 

Houston

 

5

 

 

1,942

 

 

180.33

 

 

63.4

 

 

114.29

 

 

158.00

 

 

140.32

 

 

59.7

 

 

83.73

 

 

113.03

 

 

36.5

 

 

39.8

 

Other

 

9

 

 

2,936

 

 

264.87

 

 

61.2

 

 

162.17

 

 

233.33

 

 

243.29

 

 

45.3

 

 

110.15

 

 

156.34

 

 

47.2

 

 

49.2

 

Domestic

 

72

 

 

40,585

 

 

296.19

 

 

66.6

 

 

197.36

 

 

320.69

 

 

249.37

 

 

44.0

 

 

109.63

 

 

169.48

 

 

80.0

 

 

89.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

1,499

 

 

159.59

 

 

53.6

 

 

85.55

 

 

120.75

 

 

85.10

 

 

28.0

 

 

23.85

 

 

34.15

 

 

258.8

 

 

253.6

 

All Locations

 

77

 

 

42,084

 

 

292.25

 

 

66.2

 

 

193.38

 

 

313.58

 

 

245.57

 

 

43.4

 

 

106.56

 

 

164.64

 

 

81.5

 

 

90.5

 

30


All Owned Hotels (pro forma)Hotel Results by Location in Constant US$Compared to 2019

As of September 30, 2021

 

Quarter ended September 30, 2021

 

Quarter ended September 30, 2019

 

 

 

 

 

As of September 30, 2022

 

Year-to-date ended September 30, 2022

 

Year-to-date ended September 30, 2019

 

 

 

 

 

Location

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

Maui/Oahu

 

4

 

2,007

 

$

514.34

 

82.8

%

$

425.86

 

$

635.28

 

$

385.51

 

91.5

%

$

352.78

 

$

554.15

 

20.7

%

 

14.6

%

 

4

 

2,007

 

$

559.15

 

76.0

%

$

424.91

 

$

657.89

 

$

401.92

 

90.9

%

$

365.45

 

$

577.41

 

16.3

%

 

13.9

%

Miami

 

2

 

1,033

 

618.23

 

62.8

 

388.09

 

647.24

 

356.95

 

80.6

 

287.82

 

463.01

 

34.8

 

39.8

 

Jacksonville

 

1

 

446

 

465.60

 

68.7

 

319.90

 

683.35

 

363.69

 

69.0

 

251.05

 

516.90

 

27.4

 

32.2

 

 

1

 

446

 

533.33

 

69.5

 

370.85

 

799.91

 

383.37

 

77.2

 

296.02

 

652.91

 

25.3

 

22.5

 

Miami

 

3

 

1,276

 

364.54

 

55.2

 

201.40

 

333.79

 

235.65

 

73.9

 

174.18

 

294.09

 

15.6

 

13.5

 

Florida Gulf Coast

 

5

 

1,842

 

314.16

 

45.2

 

141.93

 

286.62

 

242.93

 

61.6

 

149.63

 

302.07

 

(5.1

)

 

(5.1

)

 

5

 

1,850

 

442.56

 

65.9

 

291.82

 

570.66

 

340.73

 

72.8

 

247.94

 

507.99

 

17.7

 

12.3

 

Orlando

 

2

 

2,448

 

395.30

 

64.4

 

254.71

 

498.62

 

285.49

 

70.7

 

201.76

 

412.06

 

26.2

 

21.0

 

Phoenix

 

4

 

1,822

 

245.88

 

57.7

 

141.92

 

321.83

 

197.07

 

57.9

 

114.19

 

287.59

 

24.3

 

11.9

 

 

4

 

1,822

 

366.88

 

69.1

 

253.45

 

551.73

 

292.22

 

71.7

 

209.42

 

472.19

 

21.0

 

16.8

 

Orlando

 

2

 

2,448

 

332.90

 

37.4

 

124.35

 

228.19

 

250.13

 

61.0

 

152.55

 

315.38

 

(18.5

)

 

(27.6

)

Los Angeles/
Orange County

 

5

 

2,119

 

218.60

 

71.1

 

155.40

 

216.04

 

229.84

 

86.3

 

198.43

 

289.80

 

(21.7

)

 

(25.5

)

 

3

 

1,067

 

290.28

 

79.6

 

231.14

 

331.60

 

262.50

 

84.7

 

222.39

 

335.37

 

3.9

 

(1.1

)

New York

 

2

 

2,486

 

305.98

 

68.8

 

210.55

 

297.35

 

290.81

 

82.3

 

239.46

 

368.99

 

(12.1

)

 

(19.4

)

San Diego

 

3

 

3,288

 

275.85

 

76.1

 

209.91

 

376.43

 

255.81

 

81.2

 

207.62

 

372.41

 

1.1

 

1.1

 

Austin

 

2

 

767

 

261.29

 

70.3

 

183.71

 

319.55

 

246.64

 

86.6

 

213.69

 

361.89

 

(14.0

)

 

(11.7

)

Philadelphia

 

2

 

810

 

191.85

 

79.1

 

151.74

 

223.07

 

207.13

 

88.2

 

182.60

 

295.52

 

(16.9

)

 

(24.5

)

 

2

 

810

 

212.19

 

79.8

 

169.40

 

258.46

 

216.10

 

85.4

 

184.46

 

301.70

 

(8.2

)

 

(14.3

)

San Diego

 

3

 

3,288

 

247.61

 

72.1

 

178.55

 

281.14

 

256.92

 

83.5

 

214.41

 

372.78

 

(16.7

)

 

(24.6

)

Houston

 

4

 

1,716

 

149.60

 

66.6

 

99.67

 

133.88

 

170.32

 

67.0

 

114.07

 

159.84

 

(12.6

)

 

(16.2

)

Atlanta

 

4

 

1,682

 

178.31

 

56.6

 

100.94

 

142.30

 

168.37

 

85.6

 

144.09

 

219.82

 

(29.9

)

 

(35.3

)

Northern Virginia

 

3

 

1,252

 

169.41

 

60.6

 

102.70

 

156.44

 

199.70

 

72.7

 

145.09

 

217.46

 

(29.2

)

 

(28.1

)

San Antonio/
Austin

 

3

 

1,960

 

181.37

 

56.1

 

101.79

 

152.09

 

171.99

 

70.8

 

121.83

 

182.42

 

(16.4

)

 

(16.6

)

Washington, D.C. (CBD)

 

5

 

3,238

 

185.06

 

37.1

 

68.65

 

96.94

 

211.15

 

84.4

 

178.19

 

254.63

 

(61.5

)

 

(61.9

)

 

5

 

3,238

 

258.02

 

60.5

 

156.14

 

222.68

 

246.65

 

83.1

 

204.99

 

293.15

 

(23.8

)

 

(24.0

)

Denver

 

3

 

1,340

 

169.25

 

65.4

 

110.75

 

141.64

 

184.28

 

84.5

 

155.64

 

218.16

 

(28.8

)

 

(35.1

)

Chicago

 

4

 

1,816

 

191.01

 

62.4

 

119.27

 

149.38

 

220.91

 

85.5

 

188.78

 

264.29

 

(36.8

)

 

(43.5

)

 

3

 

1,562

 

238.34

 

64.8

 

154.44

 

212.39

 

218.02

 

77.8

 

169.55

 

243.43

 

(8.9

)

 

(12.8

)

New York

 

3

 

4,261

 

217.90

 

46.2

 

100.72

 

130.88

 

271.11

 

92.0

 

249.40

 

341.59

 

(59.6

)

 

(61.7

)

Seattle

 

2

 

1,315

 

202.49

 

53.5

 

108.25

 

130.03

 

260.45

 

90.2

 

234.96

 

291.64

 

(53.9

)

 

(55.4

)

 

2

 

1,315

 

234.51

 

64.1

 

150.37

 

194.36

 

231.59

 

84.3

 

195.17

 

256.01

 

(23.0

)

 

(24.1

)

New Orleans

 

1

 

1,333

 

136.76

 

54.3

 

74.30

 

91.66

 

156.82

 

77.0

 

120.78

 

175.05

 

(38.5

)

 

(47.6

)

San Francisco/
San Jose

 

7

 

4,530

 

163.42

 

50.0

 

81.72

 

104.30

 

266.18

 

84.2

 

224.20

 

301.99

 

(63.6

)

 

(65.5

)

 

6

 

4,162

 

230.51

 

63.1

 

145.43

 

208.62

 

284.01

 

82.2

 

233.51

 

323.40

 

(37.7

)

 

(35.5

)

Boston

 

3

 

2,715

 

204.56

 

48.1

 

98.46

 

117.58

 

243.00

 

91.1

 

221.28

 

291.41

 

(55.5

)

 

(59.6

)

 

2

 

1,495

 

246.01

 

57.4

 

141.27

 

186.74

 

242.40

 

83.8

 

203.01

 

289.54

 

(30.4

)

 

(35.5

)

Northern Virginia

 

2

 

916

 

215.60

 

65.3

 

140.83

 

212.13

 

220.18

 

76.5

 

168.33

 

265.16

 

(16.3

)

 

(20.0

)

Atlanta

 

2

 

810

 

181.26

 

72.2

 

130.94

 

204.64

 

187.48

 

84.0

 

157.49

 

258.05

 

(16.9

)

 

(20.7

)

San Antonio

 

2

 

1,512

 

194.11

 

67.3

 

130.73

 

201.94

 

183.18

 

73.0

 

133.69

 

195.06

 

(2.2

)

 

3.5

 

New Orleans

 

1

 

1,333

 

196.59

 

65.3

 

128.42

 

187.76

 

188.24

 

79.9

 

150.35

 

219.33

 

(14.6

)

 

(14.4

)

Denver

 

3

 

1,340

 

183.44

 

63.9

 

117.14

 

169.54

 

175.15

 

76.3

 

133.61

 

195.92

 

(12.3

)

 

(13.5

)

Houston

 

5

 

1,942

 

180.33

 

63.4

 

114.29

 

158.00

 

178.46

 

72.4

 

129.22

 

184.58

 

(11.6

)

 

(14.4

)

Other

 

8

 

 

2,759

 

 

252.92

 

 

53.8

 

 

136.07

 

 

189.18

 

 

199.21

 

 

80.2

 

 

159.70

 

 

245.36

 

 

(14.8

)

 

(22.9

)

 

9

 

 

2,936

 

 

264.87

 

 

61.2

 

 

162.17

 

 

233.33

 

 

193.56

 

 

76.5

 

 

148.07

 

 

222.10

 

 

9.5

 

 

5.1

 

Domestic

 

79

 

 

45,975

 

 

236.65

 

 

55.7

 

 

131.82

 

 

199.00

 

 

236.51

 

 

80.5

 

 

190.47

 

 

291.96

 

 

(30.8

)

 

(31.8

)

 

72

 

 

40,585

 

 

296.19

 

 

66.6

 

 

197.36

 

 

320.69

 

 

258.57

 

 

79.6

 

 

205.77

 

 

333.27

 

 

(4.1

)

 

(3.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

1,499

 

 

90.99

 

 

51.4

 

 

46.77

 

 

66.43

 

 

147.24

 

 

75.9

 

 

111.82

 

 

155.21

 

 

(58.2

)

 

(57.2

)

 

5

 

 

1,499

 

 

159.59

 

 

53.6

 

 

85.55

 

 

120.75

 

 

154.30

 

 

71.1

 

 

109.74

 

 

159.00

 

 

(22.0

)

 

(24.1

)

All Locations - Constant US$

 

84

 

 

47,474

 

232.40

 

55.6

��

 

129.14

 

194.82

 

233.84

 

80.4

 

187.97

 

287.63

 

(31.3

)

 

(32.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

As of September 30, 2021

 

Quarter ended September 30, 2021

 

Quarter ended September 30, 2019

 

 

 

 

 

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

International

 

5

 

1,499

 

$

90.99

 

51.4

%

$

46.77

 

$

66.43

 

$

159.14

 

75.9

%

$

120.86

 

$

166.88

 

(61.3

)%

 

(60.2

)%

Domestic

 

79

 

 

45,975

 

 

236.65

 

 

55.7

 

 

131.82

 

 

199.00

 

 

236.51

 

 

80.5

 

 

190.47

 

 

291.96

 

 

(30.8

)

 

(31.8

)

All Locations

 

84

 

 

47,474

 

232.40

 

55.6

 

129.14

 

194.82

 

234.20

 

80.4

 

188.26

 

288.00

 

(31.4

)

 

(32.4

)

 

77

 

 

42,084

 

 

292.25

 

66.2

 

193.38

 

313.58

 

255.20

 

79.3

 

202.32

 

327.00

 

(4.4

)

 

(4.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results by Location Compared to 2021 - actual, based on ownership period(1)

 

As of September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2021

 

Quarter ended September 30, 2022

 

Quarter ended September 30, 2021

 

 

 

 

 

Location

No. of
Properties

 

No. of
Properties

 

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

 

 

4

 

$

565.30

 

 

73.6

%

$

416.12

 

$

643.06

 

$

514.34

 

 

82.8

%

$

425.86

 

$

635.28

 

 

(2.3

)%

 

1.2

%

Miami

 

2

 

 

3

 

 

457.43

 

 

50.2

 

 

229.66

 

 

427.55

 

 

364.54

 

 

55.2

 

 

201.40

 

 

333.79

 

 

14.0

 

 

28.1

 

Jacksonville

 

1

 

 

1

 

 

487.53

 

 

67.0

 

 

326.67

 

 

707.75

 

 

465.60

 

 

68.7

 

 

319.90

 

 

683.35

 

 

2.1

 

 

3.6

 

Florida Gulf Coast

 

5

 

 

5

 

 

330.56

 

 

53.9

 

 

178.01

 

 

340.62

 

 

314.16

 

 

45.2

 

 

141.93

 

 

286.62

 

 

25.4

 

 

18.8

 

Orlando

 

2

 

 

2

 

 

327.78

 

 

61.4

 

 

201.23

 

 

427.58

 

 

332.90

 

 

37.4

 

 

124.35

 

 

228.19

 

 

61.8

 

 

87.4

 

Phoenix

 

4

 

 

4

 

 

251.77

 

 

58.1

 

 

146.25

 

 

372.05

 

 

245.88

 

 

57.7

 

 

141.92

 

 

321.83

 

 

3.0

 

 

15.6

 

Los Angeles/ Orange County

 

3

 

 

5

 

 

303.74

 

 

86.4

 

 

262.42

 

 

372.72

 

 

218.60

 

 

71.1

 

 

155.40

 

 

216.04

 

 

68.9

 

 

72.5

 

New York

 

2

 

 

3

 

 

309.77

 

 

84.3

 

 

260.99

 

 

351.90

 

 

217.90

 

 

46.2

 

 

100.72

 

 

130.88

 

 

159.1

 

 

168.9

 

San Diego

 

3

 

 

3

 

 

292.38

 

 

85.4

 

 

249.83

 

 

440.67

 

 

247.61

 

 

72.1

 

 

178.55

 

 

281.14

 

 

39.9

 

 

56.7

 

Austin

 

2

 

 

1

 

 

233.32

 

 

68.3

 

 

159.46

 

 

289.77

 

 

181.59

 

 

57.2

 

 

103.84

 

 

162.10

 

 

53.6

 

 

78.8

 

Philadelphia

 

2

 

 

2

 

 

221.65

 

 

85.9

 

 

190.48

 

 

286.56

 

 

191.85

 

 

79.1

 

 

151.74

 

 

223.07

 

 

25.5

 

 

28.5

 

Washington, D.C. (CBD)

 

5

 

 

5

 

 

237.56

 

 

65.7

 

 

156.01

 

 

223.72

 

 

185.06

 

 

37.1

 

 

68.65

 

 

96.94

 

 

127.3

 

 

130.8

 

Chicago

 

3

 

 

4

 

 

253.75

 

 

77.8

 

 

197.54

 

 

269.26

 

 

191.01

 

 

62.4

 

 

119.27

 

 

149.38

 

 

65.6

 

 

80.3

 

Seattle

 

2

 

 

2

 

 

264.88

 

 

81.9

 

 

216.97

 

 

274.62

 

 

202.49

 

 

53.5

 

 

108.25

 

 

130.03

 

 

100.4

 

 

111.2

 

San Francisco/ San Jose

 

6

 

 

7

 

 

244.45

 

 

71.3

 

 

174.35

 

 

249.76

 

 

163.42

 

 

50.0

 

 

81.72

 

 

104.30

 

 

113.4

 

 

139.5

 

Boston

 

2

 

 

3

 

 

263.46

 

 

63.8

 

 

167.99

 

 

223.00

 

 

204.56

 

 

48.1

 

 

98.46

 

 

117.58

 

 

70.6

 

 

89.7

 

Northern Virginia

 

2

 

 

3

 

 

214.33

 

 

67.2

 

 

144.06

 

 

219.78

 

 

169.41

 

 

60.6

 

 

102.70

 

 

156.44

 

 

40.3

 

 

40.5

 

Atlanta

 

2

 

 

4

 

 

183.46

 

 

72.8

 

 

133.57

 

 

199.97

 

 

178.31

 

 

56.6

 

 

100.94

 

 

142.30

 

 

32.3

 

 

40.5

 

San Antonio

 

2

 

 

2

 

 

190.72

 

 

64.5

 

 

122.96

 

 

194.39

 

 

181.30

 

 

55.8

 

 

101.18

 

 

149.13

 

 

21.5

 

 

30.3

 

New Orleans

 

1

 

 

1

 

 

163.33

 

 

63.6

 

 

103.87

 

 

158.20

 

 

136.76

 

 

54.3

 

 

74.30

 

 

91.66

 

 

39.8

 

 

72.6

 

Denver

 

3

 

 

3

 

 

197.50

 

 

76.5

 

 

151.18

 

 

214.65

 

 

169.25

 

 

65.4

 

 

110.75

 

 

141.64

 

 

36.5

 

 

51.5

 

Houston

 

5

 

 

4

 

 

176.72

 

 

62.1

 

 

109.74

 

 

149.01

 

 

149.60

 

 

66.6

 

 

99.67

 

 

133.88

 

 

10.1

 

 

11.3

 

Other

 

9

 

 

8

 

 

261.04

 

 

63.6

 

 

166.04

 

 

240.26

 

 

203.77

 

 

53.2

 

 

108.38

 

 

150.97

 

 

53.2

 

 

59.1

 

Domestic

 

72

 

 

79

 

 

277.68

 

 

69.9

 

 

194.13

 

 

310.58

 

 

233.85

 

 

55.7

 

 

130.18

 

 

196.75

 

 

49.1

 

 

57.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

5

 

 

200.98

 

 

62.0

 

 

124.66

 

 

162.44

 

 

90.99

 

 

51.4

 

 

46.77

 

 

66.43

 

 

166.5

 

 

144.5

 

All Locations

 

77

 

 

84

 

 

275.25

 

 

69.6

 

 

191.66

 

 

305.33

 

 

229.68

 

 

55.5

 

 

127.54

 

 

192.63

 

 

50.3

 

 

58.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31


All Owned Hotels (pro forma)Results by Location in Constant US$Compared to 2019 - actual, based on ownership period(1)

As of September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2021

 

Year-to-date ended September 30, 2021

 

Year-to-date ended September 30, 2020

 

 

 

 

 

2022

 

2019

 

Quarter ended September 30, 2022

 

Quarter ended September 30, 2019

 

 

 

 

 

Location

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

No. of
Properties

 

No. of
Properties

 

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

 

$

470.97

 

67.4

%

$

317.20

 

$

480.87

 

$

415.84

 

29.7

%

$

123.66

 

$

186.54

 

156.5

%

 

157.8

%

 

4

 

4

 

$

565.30

 

73.6

%

$

416.12

 

$

643.06

 

$

385.51

 

91.5

%

$

352.78

 

$

543.42

 

18.0

%

 

18.3

%

Miami

 

2

 

3

 

457.43

 

50.2

 

229.66

 

427.55

 

235.65

 

73.9

 

174.18

 

294.09

 

31.8

 

45.4

 

Jacksonville

 

1

 

446

 

506.77

 

57.8

 

293.02

 

587.76

 

405.40

 

42.8

 

173.66

 

356.40

 

68.7

 

64.9

 

 

1

 

1

 

487.53

 

67.0

 

326.67

 

707.75

 

363.69

 

69.0

 

251.05

 

516.90

 

30.1

 

36.9

 

Miami

 

3

 

1,276

 

472.94

 

57.4

 

271.38

 

424.17

 

370.39

 

35.3

 

130.64

 

211.54

 

107.7

 

100.5

 

Florida Gulf Coast

 

5

 

1,842

 

416.57

 

54.8

 

228.24

 

426.68

 

369.22

 

40.7

 

150.28

 

314.92

 

51.9

 

35.5

 

 

5

 

5

 

330.56

 

53.9

 

178.01

 

340.62

 

242.93

 

61.6

 

149.63

 

302.07

 

19.0

 

12.8

 

Orlando

 

2

 

1

 

327.78

 

61.4

 

201.23

 

427.58

 

155.29

 

59.2

 

91.97

 

231.78

 

118.8

 

84.5

 

Phoenix

 

4

 

1,822

 

301.23

 

56.5

 

170.12

 

346.53

 

317.49

 

32.0

 

101.46

 

238.55

 

67.7

 

45.3

 

 

4

 

3

 

251.77

 

58.1

 

146.25

 

372.05

 

187.65

 

58.4

 

109.56

 

266.45

 

33.5

 

39.6

 

Orlando

 

2

 

2,448

 

398.72

 

27.3

 

108.98

 

196.25

 

347.84

 

21.5

 

74.64

 

159.82

 

46.0

 

22.8

 

Los Angeles/
Orange County

 

5

 

2,119

 

190.62

 

53.1

 

101.25

 

138.42

 

204.60

 

33.9

 

69.42

 

100.22

 

45.9

 

38.1

 

 

3

 

6

 

303.74

 

86.4

 

262.42

 

372.72

 

226.14

 

85.8

 

194.13

 

288.91

 

35.2

 

29.0

 

New York

 

2

 

3

 

309.77

 

84.3

 

260.99

 

351.90

 

271.11

 

92.0

 

249.40

 

341.59

 

4.6

 

3.0

 

San Diego

 

3

 

4

 

292.38

 

85.4

 

249.83

 

440.67

 

235.94

 

84.9

 

200.22

 

347.13

 

24.8

 

26.9

 

Austin

 

2

 

 

233.32

 

68.3

 

159.46

 

289.77

 

 

 

 

 

 

 

Philadelphia

 

2

 

810

 

169.58

 

58.7

 

99.52

 

147.38

 

160.15

 

35.2

 

56.35

 

88.08

 

76.6

 

67.3

 

 

2

 

2

 

221.65

 

85.9

 

190.48

 

286.56

 

207.13

 

88.2

 

182.60

 

295.52

 

4.3

 

(3.0

)

San Diego

 

3

 

3,288

 

218.39

 

45.3

 

98.85

 

155.68

 

234.30

 

26.4

 

61.82

 

120.05

 

59.9

 

29.7

 

Houston

 

4

 

1,716

 

140.32

 

59.7

 

83.73

 

113.03

 

145.80

 

35.9

 

52.30

 

76.89

 

60.1

 

47.0

 

Atlanta

 

4

 

1,682

 

170.45

 

48.0

 

81.83

 

111.31

 

171.23

 

34.7

 

59.48

 

91.63

 

37.6

 

21.5

 

Northern Virginia

 

3

 

1,252

 

161.62

 

44.3

 

71.60

 

107.52

 

187.00

 

26.7

 

50.00

 

79.88

 

43.2

 

34.6

 

San Antonio/
Austin

 

3

 

1,960

 

162.63

 

43.8

 

71.26

 

103.90

 

176.22

 

23.1

 

40.72

 

65.85

 

75.0

 

57.8

 

Washington, D.C. (CBD)

 

5

 

3,238

 

161.96

 

42.2

 

68.41

 

81.26

 

223.18

 

21.5

 

48.07

 

68.76

 

42.3

 

18.2

 

 

5

 

5

 

237.56

 

65.7

 

156.01

 

223.72

 

211.15

 

84.4

 

178.19

 

254.63

 

(12.4

)

 

(12.1

)

Denver

 

3

 

1,340

 

149.35

 

42.1

 

62.95

 

80.24

 

145.92

 

26.5

 

38.63

 

56.80

 

63.0

 

41.3

 

Chicago

 

4

 

1,816

 

168.03

 

37.4

 

62.92

 

77.59

 

134.05

 

25.0

 

33.45

 

45.13

 

88.1

 

71.9

 

 

3

 

4

 

253.75

 

77.8

 

197.54

 

269.26

 

217.96

 

85.2

 

185.76

 

259.62

 

6.3

 

3.7

 

New York

 

3

 

4,261

 

189.90

 

31.7

 

60.17

 

75.05

 

190.05

 

32.4

 

61.49

 

87.59

 

(2.1

)

 

(14.3

)

Seattle

 

2

 

1,315

 

188.47

 

27.8

 

52.43

 

63.79

 

191.36

 

20.4

 

38.98

 

55.62

 

34.5

 

14.7

 

 

2

 

2

 

264.88

 

81.9

 

216.97

 

274.62

 

260.45

 

90.2

 

234.96

 

291.64

 

(7.7

)

 

(5.8

)

New Orleans

 

1

 

1,333

 

128.95

 

37.6

 

48.51

 

65.71

 

176.44

 

30.6

 

54.04

 

78.28

 

(10.2

)

 

(16.1

)

San Francisco/
San Jose

 

7

 

4,530

 

153.68

 

31.5

 

48.40

 

62.82

 

266.39

 

25.5

 

67.87

 

98.41

 

(28.7

)

 

(36.2

)

 

6

 

7

 

244.45

 

71.3

 

174.35

 

249.76

 

266.18

 

84.2

 

224.20

 

301.99

 

(22.2

)

 

(17.3

)

Boston

 

3

 

2,715

 

180.00

 

25.7

 

46.18

 

56.54

 

173.40

 

19.3

 

33.48

 

50.97

 

37.9

 

10.9

 

 

2

 

4

 

263.46

 

63.8

 

167.99

 

223.00

 

243.62

 

91.4

 

222.58

 

293.17

 

(24.5

)

 

(23.9

)

Northern Virginia

 

2

 

3

 

214.33

 

67.2

 

144.06

 

219.78

 

199.70

 

72.7

 

145.09

 

217.46

 

(0.7

)

 

1.1

 

Atlanta

 

2

 

4

 

183.46

 

72.8

 

133.57

 

199.97

 

168.45

 

85.0

 

143.25

 

215.95

 

(6.8

)

 

(7.4

)

San Antonio

 

2

 

2

 

190.72

 

64.5

 

122.96

 

194.39

 

165.01

 

66.6

 

109.84

 

155.81

 

11.9

 

24.8

 

New Orleans

 

1

 

1

 

163.33

 

63.6

 

103.87

 

158.20

 

156.82

 

77.0

 

120.78

 

175.05

 

(14.0

)

 

(9.6

)

Denver

 

3

 

3

 

197.50

 

76.5

 

151.18

 

214.65

 

184.28

 

84.5

 

155.64

 

218.16

 

(2.9

)

 

(1.6

)

Houston

 

5

 

4

 

176.72

 

62.1

 

109.74

 

149.01

 

170.32

 

67.0

 

114.07

 

159.84

 

(3.8

)

 

(6.8

)

Other

 

8

 

 

2,759

 

 

245.69

 

 

43.7

 

 

107.40

 

 

151.39

 

 

187.25

 

 

32.7

 

 

61.21

 

 

88.43

 

 

75.5

 

 

71.2

 

 

9

 

 

6

 

 

261.04

 

 

63.6

 

 

166.04

 

 

240.26

 

 

172.44

 

 

80.7

 

 

139.19

 

 

195.48

 

 

19.3

 

 

22.9

 

Domestic

 

79

 

 

45,975

 

 

240.30

 

 

42.5

 

 

102.15

 

 

156.04

 

 

235.37

 

 

28.5

 

 

67.02

 

 

111.88

 

 

52.4

 

 

39.5

 

 

72

 

 

77

 

 

277.68

 

 

69.9

 

 

194.13

 

 

310.58

 

 

229.97

 

 

80.9

 

 

186.05

 

 

283.16

 

 

4.3

 

 

9.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

1,499

 

 

85.10

 

 

28.0

 

 

23.85

 

 

34.15

 

 

119.06

 

 

24.3

 

 

28.94

 

 

43.76

 

 

(17.6

)

 

(22.0

)

 

5

 

 

5

 

 

200.98

 

 

62.0

 

 

124.66

 

 

162.44

 

 

159.14

 

 

75.9

 

 

120.86

 

 

166.88

 

 

3.1

 

 

(2.7

)

All Locations - Constant US$

 

84

 

 

47,474

 

237.03

 

42.1

 

99.68

 

152.19

 

232.21

 

28.3

 

65.82

 

109.72

 

51.5

 

38.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

As of September 30, 2021

 

Year-to-date ended September 30, 2021

 

Year-to-date ended September 30, 2020

 

 

 

 

 

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

International

 

5

 

1,499

 

$

85.10

 

28.0

%

$

23.85

 

$

34.15

 

$

121.49

 

24.3

%

$

29.53

 

$

44.01

 

(19.3

)%

 

(22.4

)%

Domestic

 

79

 

 

45,975

 

 

240.30

 

 

42.5

 

 

102.15

 

 

156.04

 

 

235.37

 

 

28.5

 

 

67.02

 

 

111.88

 

 

52.4

 

 

39.5

 

All Locations

 

84

 

 

47,474

 

237.03

 

42.1

 

99.68

 

152.19

 

232.27

 

28.3

 

65.84

 

109.73

 

51.4

 

38.7

 

 

77

 

 

82

 

 

275.25

 

69.6

 

191.66

 

305.33

 

227.93

 

80.8

 

184.06

 

279.60

 

4.1

 

9.2

 

Results by Location Compared to 2021 - actual, based on ownership period(1)

 

As of September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2021

 

Year-to-date ended September 30, 2022

 

Year-to-date ended September 30, 2021

 

 

 

 

 

Location

No. of
Properties

 

No. of
Properties

 

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

 

 

4

 

$

559.15

 

 

76.0

%

$

424.91

 

$

657.89

 

$

470.97

 

 

67.4

%

$

317.20

 

$

476.28

 

 

34.0

%

 

38.1

%

Miami

 

2

 

 

3

 

 

573.01

 

 

64.5

 

 

369.80

 

 

609.25

 

 

472.94

 

 

57.4

 

 

271.38

 

 

424.17

 

 

36.3

 

 

43.6

 

Jacksonville

 

1

 

 

1

 

 

533.33

 

 

69.5

 

 

370.85

 

 

799.91

 

 

506.77

 

 

57.8

 

 

293.02

 

 

587.76

 

 

26.6

 

 

36.1

 

Florida Gulf Coast

 

5

 

 

5

 

 

442.56

 

 

65.9

 

 

291.82

 

 

570.66

 

 

416.57

 

 

54.8

 

 

228.24

 

 

426.68

 

 

27.9

 

 

33.7

 

Orlando

 

2

 

 

2

 

 

395.30

 

 

64.4

 

 

254.71

 

 

498.62

 

 

313.90

 

 

26.5

 

 

83.14

 

 

157.35

 

 

206.4

 

 

216.9

 

Phoenix

 

4

 

 

4

 

 

366.88

 

 

69.1

 

 

253.45

 

 

551.73

 

 

301.23

 

 

56.5

 

 

170.12

 

 

346.53

 

 

49.0

 

 

59.2

 

Los Angeles/ Orange County

 

3

 

 

5

 

 

290.28

 

 

79.6

 

 

231.14

 

 

331.60

 

 

190.62

 

 

53.1

 

 

101.25

 

 

138.42

 

 

128.3

 

 

139.6

 

New York

 

2

 

 

3

 

 

288.08

 

 

63.5

 

 

182.96

 

 

256.78

 

 

189.90

 

 

31.7

 

 

60.17

 

 

75.05

 

 

204.1

 

 

242.2

 

San Diego

 

3

 

 

3

 

 

275.85

 

 

76.1

 

 

209.91

 

 

376.43

 

 

218.39

 

 

45.3

 

 

98.85

 

 

155.68

 

 

112.4

 

 

141.8

 

Austin

 

2

 

 

1

 

 

261.29

 

 

70.3

 

 

183.71

 

 

319.55

 

 

181.39

 

 

58.7

 

 

106.44

 

 

156.20

 

 

72.6

 

 

104.6

 

Philadelphia

 

2

 

 

2

 

 

212.19

 

 

79.8

 

 

169.40

 

 

258.46

 

 

169.58

 

 

58.7

 

 

99.52

 

 

147.38

 

 

70.2

 

 

75.4

 

Washington, D.C. (CBD)

 

5

 

 

5

 

 

258.02

 

 

60.5

 

 

156.14

 

 

222.68

 

 

161.96

 

 

42.2

 

 

68.41

 

 

81.26

 

 

128.2

 

 

174.0

 

Chicago

 

3

 

 

4

 

 

227.82

 

 

63.1

 

 

143.86

 

 

196.43

 

 

168.03

 

 

37.4

 

 

62.92

 

 

77.59

 

 

128.6

 

 

153.2

 

Seattle

 

2

 

 

2

 

 

234.51

 

 

64.1

 

 

150.37

 

 

194.36

 

 

188.47

 

 

27.8

 

 

52.43

 

 

63.79

 

 

186.8

 

 

204.7

 

San Francisco/ San Jose

 

6

 

 

7

 

 

230.51

 

 

63.1

 

 

145.43

 

 

208.62

 

 

153.68

 

 

31.5

 

 

48.40

 

 

62.82

 

 

200.4

 

 

232.1

 

Boston

 

2

 

 

3

 

 

240.93

 

 

55.5

 

 

133.65

 

 

175.93

 

 

180.00

 

 

25.7

 

 

46.18

 

 

56.54

 

 

189.4

 

 

211.2

 

Northern Virginia

 

2

 

 

3

 

 

215.60

 

 

65.3

 

 

140.83

 

 

212.13

 

 

161.62

 

 

44.3

 

 

71.60

 

 

107.52

 

 

96.7

 

 

97.3

 

Atlanta

 

2

 

 

4

 

 

181.26

 

 

72.2

 

 

130.94

 

 

204.64

 

 

170.45

 

 

48.0

 

 

81.83

 

 

111.31

 

 

60.0

 

 

83.8

 

San Antonio

 

2

 

 

2

 

 

194.11

 

 

67.3

 

 

130.73

 

 

201.94

 

 

160.63

 

 

40.8

 

 

65.54

 

 

95.17

 

 

99.5

 

 

112.2

 

New Orleans

 

1

 

 

1

 

 

196.59

 

 

65.3

 

 

128.42

 

 

187.76

 

 

128.95

 

 

37.6

 

 

48.51

 

 

65.71

 

 

164.7

 

 

185.7

 

Denver

 

3

 

 

3

 

 

183.44

 

 

63.9

 

 

117.14

 

 

169.54

 

 

149.35

 

 

42.1

 

 

62.95

 

 

80.24

 

 

86.1

 

 

111.3

 

Houston

 

5

 

 

4

 

 

180.33

 

 

63.4

 

 

114.29

 

 

158.00

 

 

140.32

 

 

59.7

 

 

83.73

 

 

113.03

 

 

36.5

 

 

39.8

 

Other

 

9

 

 

8

 

 

264.87

 

 

61.2

 

 

162.17

 

 

233.33

 

 

170.49

 

 

40.8

 

 

69.58

 

 

94.34

 

 

133.1

 

 

147.3

 

Domestic

 

72

 

 

79

 

 

293.77

 

 

66.1

 

 

194.23

 

 

314.75

 

 

233.25

 

 

42.4

 

 

98.82

 

 

150.74

 

 

96.5

 

 

108.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

5

 

 

159.59

 

 

53.6

 

 

85.55

 

 

120.75

 

 

85.10

 

 

28.0

 

 

23.85

 

 

34.15

 

 

258.8

 

 

253.6

 

All Locations

 

77

 

 

84

 

 

289.98

 

 

65.7

 

 

190.46

 

 

308.03

 

 

230.09

 

 

41.9

 

 

96.43

 

 

147.02

 

 

97.5

 

 

109.5

 

32


Results by Location Compared to 2019 - actual based on ownership period(1)

 

As of September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

2019

 

Year-to-date ended September 30, 2022

 

Year-to-date ended September 30, 2019

 

 

 

 

 

Location

No. of
Properties

 

No. of
Properties

 

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

 

 

4

 

$

559.15

 

 

76.0

%

$

424.91

 

$

657.89

 

$

401.92

 

 

90.9

%

$

365.45

 

$

563.64

 

 

16.3

%

 

16.7

%

Miami

 

2

 

 

3

 

 

573.01

 

 

64.5

 

 

369.80

 

 

609.25

 

 

293.90

 

 

79.8

 

 

234.60

 

 

367.10

 

 

57.6

 

 

66.0

 

Jacksonville

 

1

 

 

1

 

 

533.33

 

 

69.5

 

 

370.85

 

 

799.91

 

 

383.37

 

 

77.2

 

 

296.02

 

 

652.91

 

 

25.3

 

 

22.5

 

Florida Gulf Coast

 

5

 

 

5

 

 

442.56

 

 

65.9

 

 

291.82

 

 

570.66

 

 

340.73

 

 

72.8

 

 

247.94

 

 

507.99

 

 

17.7

 

 

12.3

 

Orlando

 

2

 

 

1

 

 

395.30

 

 

64.4

 

 

254.71

 

 

498.62

 

 

182.58

 

 

69.5

 

 

126.97

 

 

303.48

 

 

100.6

 

 

64.3

 

Phoenix

 

4

 

 

3

 

 

366.88

 

 

69.1

 

 

253.45

 

 

551.73

 

 

270.22

 

 

73.4

 

 

198.47

 

 

419.43

 

 

27.7

 

 

31.5

 

Los Angeles/ Orange County

 

3

 

 

6

 

 

290.28

 

 

79.6

 

 

231.14

 

 

331.60

 

 

214.91

 

 

84.4

 

 

181.37

 

 

273.04

 

 

27.4

 

 

21.5

 

New York

 

2

 

 

3

 

 

288.08

 

 

63.5

 

 

182.96

 

 

256.78

 

 

268.13

 

 

82.9

 

 

222.31

 

 

328.43

 

 

(17.7

)

 

(21.8

)

San Diego

 

3

 

 

4

 

 

275.85

 

 

76.1

 

 

209.91

 

 

376.43

 

 

236.69

 

 

81.5

 

 

192.90

 

 

345.20

 

 

8.8

 

 

9.0

 

Austin

 

2

 

 

 

 

261.29

 

 

70.3

 

 

183.71

 

 

319.55

 

 

 

 

 

 

 

 

 

 

 

 

 

Philadelphia

 

2

 

 

2

 

 

212.19

 

 

79.8

 

 

169.40

 

 

258.46

 

 

216.10

 

 

85.4

 

 

184.46

 

 

301.70

 

 

(8.2

)

 

(14.3

)

Washington, D.C. (CBD)

 

5

 

 

5

 

 

258.02

 

 

60.5

 

 

156.14

 

 

222.68

 

 

246.65

 

 

83.1

 

 

204.99

 

 

293.15

 

 

(23.8

)

 

(24.0

)

Chicago

 

3

 

 

4

 

 

227.82

 

 

63.1

 

 

143.86

 

 

196.43

 

 

198.58

 

 

76.6

 

 

152.16

 

 

210.78

 

 

(5.5

)

 

(6.8

)

Seattle

 

2

 

 

2

 

 

234.51

 

 

64.1

 

 

150.37

 

 

194.36

 

 

231.59

 

 

84.3

 

 

195.17

 

 

256.01

 

 

(23.0

)

 

(24.1

)

San Francisco/ San Jose

 

6

 

 

7

 

 

230.51

 

 

63.1

 

 

145.43

 

 

208.62

 

 

279.15

 

 

81.5

 

 

227.38

 

 

315.49

 

 

(36.0

)

 

(33.9

)

Boston

 

2

 

 

4

 

 

240.93

 

 

55.5

 

 

133.65

 

 

175.93

 

 

237.01

 

 

82.6

 

 

195.81

 

 

268.56

 

 

(31.7

)

 

(34.5

)

Northern Virginia

 

2

 

 

3

 

 

215.60

 

 

65.3

 

 

140.83

 

 

212.13

 

 

197.94

 

 

74.8

 

 

148.13

 

 

226.05

 

 

(4.9

)

 

(6.2

)

Atlanta

 

2

 

 

4

 

 

181.26

 

 

72.2

 

 

130.94

 

 

204.64

 

 

193.39

 

 

79.8

 

 

154.29

 

 

235.46

 

 

(15.1

)

 

(13.1

)

San Antonio

 

2

 

 

2

 

 

194.11

 

 

67.3

 

 

130.73

 

 

201.94

 

 

183.18

 

 

73.0

 

 

133.69

 

 

195.06

 

 

(2.2

)

 

3.5

 

New Orleans

 

1

 

 

1

 

 

196.59

 

 

65.3

 

 

128.42

 

 

187.76

 

 

188.24

 

 

79.9

 

 

150.35

 

 

219.33

 

 

(14.6

)

 

(14.4

)

Denver

 

3

 

 

3

 

 

183.44

 

 

63.9

 

 

117.14

 

 

169.54

 

 

175.15

 

 

76.3

 

 

133.61

 

 

195.92

 

 

(12.3

)

 

(13.5

)

Houston

 

5

 

 

4

 

 

180.33

 

 

63.4

 

 

114.29

 

 

158.00

 

 

178.46

 

 

72.4

 

 

129.22

 

 

184.58

 

 

(11.6

)

 

(14.4

)

Other

 

9

 

 

6

 

 

264.87

 

 

61.2

 

 

162.17

 

 

233.33

 

 

173.68

 

 

76.9

 

 

133.48

 

 

197.30

 

 

21.5

 

 

18.3

 

Domestic

 

72

 

 

77

 

 

293.77

 

 

66.1

 

 

194.23

 

 

314.75

 

 

240.89

 

 

79.7

 

 

191.94

 

 

303.24

 

 

1.2

 

 

3.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

5

 

 

159.59

 

 

53.6

 

 

85.55

 

 

120.75

 

 

154.30

 

 

71.1

 

 

109.74

 

 

159.00

 

 

(22.0

)

 

(24.1

)

All Locations

 

77

 

 

82

 

 

289.98

 

 

65.7

 

 

190.46

 

 

308.03

 

 

238.59

 

 

79.4

 

 

189.51

 

 

298.97

 

 

0.5

 

 

3.0

 

___________

(1) Represents the results of the portfolio for the time period of our ownership, including dispositions through their date of disposal and acquisitions beginning as of the date of acquisition.

 

As of September 30, 2021

 

Year-to-date ended September 30, 2021

 

Year-to-date ended September 30, 2019

 

 

 

 

 

Location

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

Maui/Oahu

 

4

 

 

2,007

 

$

470.97

 

 

67.4

%

$

317.20

 

$

480.87

 

$

401.92

 

 

90.9

%

$

365.45

 

$

577.41

 

 

(13.2

)%

 

(16.7

)%

Jacksonville

 

1

 

 

446

 

 

506.77

 

 

57.8

 

 

293.02

 

 

587.76

 

 

383.37

 

 

77.2

 

 

296.02

 

 

652.91

 

 

(1.0

)

 

(10.0

)

Miami

 

3

 

 

1,276

 

 

472.94

 

 

57.4

 

 

271.38

 

 

424.17

 

 

318.31

 

 

80.1

 

 

254.98

 

 

401.39

 

 

6.4

 

 

5.7

 

Florida Gulf Coast

 

5

 

 

1,842

 

 

416.57

 

 

54.8

 

 

228.24

 

 

426.68

 

 

340.73

 

 

72.8

 

 

247.94

 

 

507.99

 

 

(7.9

)

 

(16.0

)

Phoenix

 

4

 

 

1,822

 

 

301.23

 

 

56.5

 

 

170.12

 

 

346.53

 

 

292.22

 

 

71.7

 

 

209.42

 

 

472.19

 

 

(18.8

)

 

(26.6

)

Orlando

 

2

 

 

2,448

 

 

398.72

 

 

27.3

 

 

108.98

 

 

196.25

 

 

285.49

 

 

70.7

 

 

201.76

 

 

412.06

 

 

(46.0

)

 

(52.4

)

Los Angeles/
   Orange County

 

5

 

 

2,119

 

 

190.62

 

 

53.1

 

 

101.25

 

 

138.42

 

 

223.42

 

 

86.0

 

 

192.10

 

 

285.12

 

 

(47.3

)

 

(51.5

)

Philadelphia

 

2

 

 

810

 

 

169.58

 

 

58.7

 

 

99.52

 

 

147.38

 

 

216.10

 

 

85.4

 

 

184.46

 

 

301.70

 

 

(46.0

)

 

(51.1

)

San Diego

 

3

 

 

3,288

 

 

218.39

 

 

45.3

 

 

98.85

 

 

155.68

 

 

255.81

 

 

81.2

 

 

207.62

 

 

372.41

 

 

(52.4

)

 

(58.2

)

Houston

 

4

 

 

1,716

 

 

140.32

 

 

59.7

 

 

83.73

 

 

113.03

 

 

178.46

 

 

72.4

 

 

129.22

 

 

184.58

 

 

(35.2

)

 

(38.8

)

Atlanta

 

4

 

 

1,682

 

 

170.45

 

 

48.0

 

 

81.83

 

 

111.31

 

 

193.72

 

 

79.7

 

 

154.41

 

 

241.44

 

 

(47.0

)

 

(53.9

)

Northern Virginia

 

3

 

 

1,252

 

 

161.62

 

 

44.3

 

 

71.60

 

 

107.52

 

 

208.03

 

 

72.1

 

 

150.02

 

 

245.90

 

 

(52.3

)

 

(56.3

)

San Antonio/
   Austin

 

3

 

 

1,960

 

 

162.63

 

 

43.8

 

 

71.26

 

 

103.90

 

 

192.68

 

 

76.3

 

 

146.98

 

 

225.63

 

 

(51.5

)

 

(54.0

)

Washington, D.C. (CBD)

 

5

 

 

3,238

 

 

161.96

 

 

42.2

 

 

68.41

 

 

81.26

 

 

246.65

 

 

83.1

 

 

204.99

 

 

293.15

 

 

(66.6

)

 

(72.3

)

Denver

 

3

 

 

1,340

 

 

149.35

 

 

42.1

 

 

62.95

 

 

80.24

 

 

175.15

 

 

76.3

 

 

133.61

 

 

195.92

 

 

(52.9

)

 

(59.0

)

Chicago

 

4

 

 

1,816

 

 

168.03

 

 

37.4

 

 

62.92

 

 

77.59

 

 

207.76

 

 

76.2

 

 

158.28

 

 

224.27

 

 

(60.2

)

 

(65.4

)

New York

 

3

 

 

4,261

 

 

189.90

 

 

31.7

 

 

60.17

 

 

75.05

 

 

268.50

 

 

83.0

 

 

222.99

 

 

329.67

 

 

(73.0

)

 

(77.2

)

Seattle

 

2

 

 

1,315

 

 

188.47

 

 

27.8

 

 

52.43

 

 

63.79

 

 

231.59

 

 

84.3

 

 

195.17

 

 

256.01

 

 

(73.1

)

 

(75.1

)

New Orleans

 

1

 

 

1,333

 

 

128.95

 

 

37.6

 

 

48.51

 

 

65.71

 

 

188.24

 

 

79.9

 

 

150.35

 

 

219.33

 

 

(67.7

)

 

(70.0

)

San Francisco/
   San Jose

 

7

 

 

4,530

 

 

153.68

 

 

31.5

 

 

48.40

 

 

62.82

 

 

279.15

 

 

81.5

 

 

227.38

 

 

315.49

 

 

(78.7

)

 

(80.1

)

Boston

 

3

 

 

2,715

 

 

180.00

 

 

25.7

 

 

46.18

 

 

56.54

 

 

238.71

 

 

82.8

 

 

197.72

 

 

271.22

 

 

(76.6

)

 

(79.2

)

Other

 

8

 

 

2,759

 

 

245.69

 

 

43.7

 

 

107.40

 

 

151.39

 

 

193.55

 

 

77.3

 

 

149.55

 

 

224.34

 

 

(28.2

)

 

(32.5

)

Domestic

 

79

 

 

45,975

 

 

240.30

 

 

42.5

 

 

102.15

 

 

156.04

 

 

252.14

 

 

79.7

 

 

200.84

 

 

320.24

 

 

(49.1

)

 

(51.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

1,499

 

 

85.10

 

 

28.0

 

 

23.85

 

 

34.15

 

 

142.14

 

 

71.1

 

 

101.09

 

 

147.50

 

 

(76.4

)

 

(76.8

)

All Locations - Constant US$

 

84

 

 

47,474

 

 

237.03

 

 

42.1

 

 

99.68

 

 

152.19

 

 

249.02

 

 

79.4

 

 

197.68

 

 

314.77

 

 

(49.6

)

 

(51.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

 

As of September 30, 2021

 

Year-to-date ended September 30, 2021

 

Year-to-date ended September 30, 2019

 

 

 

 

 

 

No. of
Properties

 

No. of
Rooms

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Average
Room Rate

 

Average
Occupancy
Percentage

 

RevPAR

 

Total RevPAR

 

Percent
Change in
RevPAR

 

Percent
Change in
Total RevPAR

 

International

 

5

 

 

1,499

 

$

85.10

 

 

28.0

%

$

23.85

 

$

34.15

 

$

154.30

 

 

71.1

%

$

109.74

 

$

159.00

 

 

(78.3

)%

 

(78.5

)%

Domestic

 

79

 

 

45,975

 

 

240.30

 

 

42.5

 

 

102.15

 

 

156.04

 

 

252.14

 

 

79.7

 

 

200.84

 

 

320.24

 

 

(49.1

)

 

(51.3

)

All Locations

 

84

 

 

47,474

 

 

237.03

 

 

42.1

 

 

99.68

 

 

152.19

 

 

249.36

 

 

79.4

 

 

197.95

 

 

315.13

 

 

(49.6

)

 

(51.7

)

Hotel Business Mix

Our customers fall into three broad categories: transient, group, and contract business, which accounted for approximately 61%, 35%, and 4%, respectively, of our full year 2019 room sales. The information below is derived from business mix data for the 8477 hotels that we owned as of September 30, 2021.2022. For additional detail on our business mix, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10‑K.

The following are the results of our consolidated portfolio transient, group and contract business:

 

Quarter ended September 30, 2021

 

 

Quarter ended September 30, 2020

 

 

Quarter ended September 30, 2022

 

 

Quarter ended September 30, 2021

 

 

Transient business

 

 

Group business

 

 

Contract business

 

 

Transient business

 

 

Group business

 

 

Contract business

 

 

Transient business

 

 

Group business

 

 

Contract business

 

 

Transient business

 

 

Group business

 

 

Contract business

 

Room nights (in thousands)

 

 

1,678

 

 

 

594

 

 

 

157

 

 

 

555

 

 

 

128

 

 

 

74

 

 

 

1,557

 

 

 

991

 

 

 

151

 

 

 

1,521

 

 

 

530

 

 

 

122

 

Percentage change in room nights vs. same period in 2019

 

 

(23.3

)%

 

 

(47.8

)%

 

 

(9.9

)%

 

 

 

 

 

 

 

 

 

(18.4

)%

 

 

(2.6

)%

 

 

21.2

%

 

 

 

 

 

 

 

Room Revenues (in millions)

 

$

424

 

 

$

114

 

 

$

26

 

 

$

105

 

 

$

17

 

 

$

16

 

Rooms Revenues (in millions)

 

$

487

 

 

$

229

 

 

$

28

 

 

$

401

 

 

$

102

 

 

$

18

 

Percentage change in revenues vs. same period in 2019

 

 

(19.6

)%

 

 

(54.0

)%

 

 

(40.5

)%

 

 

 

 

 

 

 

 

 

1.7

%

 

 

3.3

%

 

 

9.4

%

 

 

 

 

 

 

 

 

 

Year-to-date ended September 30, 2022

 

 

Year-to-date ended September 30, 2021

 

 

 

Transient business

 

 

Group business

 

 

Contract business

 

 

Transient business

 

 

Group business

 

 

Contract business

 

Room nights (in thousands)

 

 

4,409

 

 

 

2,787

 

 

 

412

 

 

 

3,541

 

 

 

1,132

 

 

 

285

 

Percentage change in room nights vs. same period in 2019

 

 

(15.8

)%

 

 

(18.2

)%

 

 

10.6

%

 

 

 

 

 

 

 

 

 

Rooms Revenues (in millions)

 

$

1,446

 

 

$

701

 

 

$

76

 

 

$

973

 

 

$

203

 

 

$

41

 

Percentage change in revenues vs. same period in 2019

 

 

2.9

%

 

 

(14.6

)%

 

 

(0.2

)%

 

 

 

 

 

 

 

 

 

33


 

 

Year-to-date ended September 30, 2021

 

 

Year-to-date ended September 30, 2020

 

 

 

Transient business

 

 

Group business

 

 

Contract business

 

 

Transient business

 

 

Group business

 

 

Contract business

 

Room nights (in thousands)

 

 

3,889

 

 

 

1,207

 

 

 

355

 

 

 

2,184

 

 

 

1,228

 

 

 

264

 

Percentage change in room nights vs. same period in 2019

 

 

(35.0

)%

 

 

(68.0

)%

 

 

(28.5

)%

 

 

 

 

 

 

 

 

 

Room Revenues (in millions)

 

$

1,017

 

 

$

217

 

 

$

58

 

 

$

516

 

 

$

280

 

 

$

58

 

Percentage change in revenues vs. same period in 2019

 

 

(33.7

)%

 

 

(75.9

)%

 

 

(53.3

)%

 

 

 

 

 

 

 

 

 

34


Liquidity and Capital Resources

Liquidity and Capital Resources of Host Inc. and Host L.P. The liquidity and capital resources of Host Inc. and Host L.P. are derived primarily from the activities of Host L.P., which generates the capital required by our business from hotel operations, the incurrence of debt, the issuance of OP units or the sale of hotels. Host Inc. is a REIT and its only significant asset is the ownership of general and limited partner interests of Host L.P.; therefore, its financing and investing activities are conducted through Host L.P., except for the issuance of its common and preferred stock. Proceeds from common and preferred stock issuances by Host Inc. are contributed to Host L.P. in exchange for common and preferred OP units. Additionally, funds used by Host Inc. to pay dividends or to repurchase its stock are provided by Host L.P. Therefore, while we have noted those areas in which it is important to distinguish between Host Inc. and Host L.P., we have not included a separate discussion of liquidity and capital resources as the discussion below applies to both Host Inc. and Host L.P.

Overview. We look to maintain a capital structure and liquidity profile with an appropriate balance of cash, debt, and equity to provide financial flexibility given the inherent volatility of the lodging industry. We believe this strategy has resulted in a lowerbetter cost of debt capital, allowing us to complete opportunistic investments and acquisitions and it positionspositioning us to manage potential declines in operations throughout the lodging cycle. We have structured our debt profile to maintain a balanced maturity schedule and to minimize the number of hotels that are encumbered by mortgage debt. Currently, noneonly one of our consolidated hotels areis encumbered by mortgage debt. Over the past several years leading up to the COVID-19 pandemic, we had decreased our leverage as measured by our net debt-to-EBITDA ratio and reduced our debt service obligations, leading to an increase in our fixed charge coverage ratio. As a result, we were well positioned at the onset of the COVID-19 pandemic with sufficient liquidity and financial flexibility to withstand the severe slowdown in U.S. economic activity and lodging demand brought on by the pandemic.As the financial impact of the COVID-19 pandemic and its duration remain uncertain, we believe these actions will provide us with financial flexibility until the pandemic subsides and lodging demand recovers.

Under the current challenging operating environment posed by the COVID-19 pandemic, weAs hotel operations have taken stepsreturned to preserve liquidity by working with our hotel operators to reduce operating costs at our hotels, closely monitoring our capital expenditures levels, and suspending our quarterly dividend and stock repurchases. Along with improving operating cash flows during the third quarter,flow positive, we believe that we have sufficient liquidity to fund negative operations at certain of our hotels, corporate expenses, capital expenditures, and hotel acquisitions. We used approximately $1.2 billion of cash to fund the acquisition of five properties year-to-dateacquisitions and subsequent to quarter end, we sold five properties for a sales price of approximately $551 million, including $11 million for the FF&E replacement funds. Additionally, we accessedhave reinstated our “at-the-market” equity program, discussed below, to issue approximately 7.8 million shares of our common stock during the second quarter for net proceeds of approximately $138 million. No shares were issued in the third quarter.quarterly dividend. We remain well positioned to execute additional transactions to the extent opportunities arise.

Cash Requirements. We use cash for acquisitions, capital expenditures, debt payments, operating costs, and corporate and other expenses, as well as for dividends and distributions to stockholders and to OP unitholders, respectively, and stock and OP unit repurchases. We have no significant debt maturities until 2023.2024. As a REIT, Host Inc. is required to distribute to its stockholders at least 90% of its taxable income, excluding net capital gain, on an annual basis. As part of our COVID-19 pandemic response, our regular quarterly common cash dividend is currently suspended and we are restricted from repurchasing stock or OP Units under the terms of our credit facility amendments.

Capital Resources. As of September 30, 2021,2022, we had $1,038$883 million of cash and cash equivalents, and $138$187 million in our FF&E escrow reserves. We have substantially utilized thereserves and $1.5 billion available under the revolver underportion of our credit facility. We depend primarily on external sources of capital to finance future growth, including acquisitions. As a result, the liquidity and debt capacity provided by our credit facility and the ability to issue senior unsecured debt are key components of our capital structure. Our financial flexibility, including our ability to incur debt, pay dividends, make distributions and make investments, is contingent on our ability to maintain compliance with the financial covenants of our credit facility and senior notes indentures, which include, among other things, the allowable amounts of leverage, interest coverage and fixed charges.

On May 6, 2021, we entered intoWe currently have a distribution agreement in place with J. P. Morgan Securities LLC, BofA Securities, Inc., BTIG, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents,various investment banks, through which Host Inc. may issue and sell, from time to time,time-to-time, shares of its common stock having an aggregate offering price of up to $600 million. The shares can be offered and sold through sales agents in transactions that are deemed to be “at the market” offerings at then-current market prices. We are not obligated to issue any shares and may do so when we believe conditions are advantageous and there is a compelling use of proceeds, including to fund future potential acquisitions or other investment opportunities generated by the COVID-19 pandemic.acquisitions. No shares have been issued during 2022 year-to-date. As of September 30, 2021,2022, there was $460 million of remaining capacity under the agreement.

35


While we currently have $371 million available under ourAdditionally, on August 3, 2022, the Board of Directors authorized an increase in the Company’s share repurchase program additionalfrom the existing $371 million remaining under the prior Board authorization to $1 billion. The common stock may be purchased from time to time depending upon market conditions and may be purchased in the open market or through private transactions or by other means, including principal transactions with various financial institutions, like accelerated share repurchases, are currently restrictedforwards, options, and similar transactions and through one or more trading plans designed to comply with Rule 10b5-1 under the termsSecurities Exchange Act of the credit facility amendments. 1934, as amended. The plan does not obligate us to repurchase any specific number or any specific dollar amount of shares and may be suspended at any time at our discretion. There have been no share repurchases during 2021 year-to-date and we do not anticipate additional share repurchases during the remainder of 2021.2022 year-to-date.

Given the total amount of our debt and our maturity schedule, we may continue to redeem or repurchase senior notes from time to time, taking advantage of favorable market conditions. In February 2021, Host Inc.’s Board of Directors authorized repurchases of up to $1.0 billion of senior notes other than in accordance with their respective terms, of which the entire amount remains available under this authority. We may purchase senior notes with cash through open market purchases, privately negotiated transactions, a tender offer, or through the early redemption of such securities pursuant to their terms. Repurchases of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. Any retirement before the maturity date will

34


affect earnings and NAREIT FFO per diluted share as a result of the payment of any applicable call premiums and the accelerated expensing of previously deferred and capitalized financing costs. Accordingly, considering our priorities in managing our capital structure and liquidity profile, and given prevailing conditions and relative pricing in the capital markets, we may, at any time, subject to applicable securities laws and the requirements under our credit facility and senior notes, be considering, or be in discussions with respect to, the repurchase or issuance of exchangeable debentures and/or senior notes or the repurchase or sale of our common stock. Any such transactions may, subject to applicable securities laws, occur simultaneously.

We continue to explore potential acquisitions and dispositions. We anticipate that any such future acquisitions will be funded by proceeds from sales of hotels, equity offerings of Host Inc., issuances of OP units by Host L.P., or available cash. Given the nature of these transactions, we can make no assurances that we will be successful in acquiring any one or more hotels that we may review, bid on or negotiate to purchase or that we will be successful in disposing of any one or more of our hotels. We may acquire additional hotels or dispose of hotels through various structures, including transactions involving single assets, portfolios, joint ventures, acquisitions of the securities or assets of other REITs or distributions of hotels to our stockholders.

Sources and Uses of Cash. Our sources of cash generally include cash from operations, proceeds from debt and equity issuances, and proceeds from hotel sales. Uses of cash include acquisitions, capital expenditures, operating costs, debt repayments, and repurchases of shares and distributions to equity holders. We do not anticipate significant cash from operations in 2021, however, we have significant available cash and also have access to debt and stock issuances and property dispositions as alternative sources of cash.

Cash Provided by/Used inby Operating Activities. Year-to-date in 2021,2022, net cash provided by operating activities was $78$1,056 million compared to net cash used in operating activities of $164$78 million for year-to-date 2020. Cash provided by operating activities2021. This $978 million increase in 20212022 was driven by improved operations at our hotels compared to 2020. Cash used in operating activities in 2020 was primarily to fund operating shortfalls at certain of our hotels.2021.

Cash Used in Investing Activities. Net cash used in investing activities was $172 million during 2022 year-to-date compared to $1,502 million for 2021. Cash used in investing activities during year-to-date 2021 compared2022 primarily related to $349$357 million for year-to-date 2020.of capital expenditures and an investment in a joint venture. Cash used in investing activities during year-to-date 2021 primarily was duerelated to $293 million of capital expenditures and the acquisition of five hotels and two golf courses. Cash used inprovided by investing activities during year-to-date 2020 primarily was due to $384 millionin 2022 includes the sale of capital expenditures.four hotels.

The following table summarizestables summarize significant acquisitionsacquisitions/investments in affiliates and dispositions that have been completed as of November 2, 2021:2022:

Transaction Date

 

Description of Transaction

 

 Investment

 

Acquisitions

 

 

 

 

 

 

September

2021

 

Acquisition of Alila Ventana Big Sur

 

$

(150

)

July

2021

 

Acquisition of The Laura Hotel (formerly known as Hotel Alessandra)

 

 

(65

)

July

2021

 

Acquisition of Baker's Cay Resort Key Largo, Curio Collection by Hilton

 

 

(200

)

April

2021

 

Acquisition of Four Seasons Resort Orlando at Walt Disney World® Resort⁽¹⁾

 

 

(610

)

April

2021

 

Acquisition of Ka'anapali Golf Courses

 

 

(28

)

March

2021

 

Acquisition of Hyatt Regency Austin

 

 

(161

)

 

 

 

Total acquisitions

 

$

(1,214

)

___________

 

 

 

 

 

 

Transaction Date

 

Description of Transaction

 

Investment

 

Acquisitions/Investments

 

 

 

November

2022

 

Acquisition of Four Seasons Resorts and Residences Jackson Hole

 

$

(315

)

January

2022

 

Investment to acquire non-controlling interest of a joint venture with Noble Investment Group⁽¹⁾

 

 

(91

)

 

 

 

Total acquisitions/investments

 

$

(406

)

___________

 

 

 

 

 

 

(1)
Investment amount represents total consideration, including the assumptionconsisted of $24$35 million of hotel-level liabilities.cash and the issuance of approximately $56 million of Host L.P. OP units.

Transaction Date

 

Description of Transaction

 

Net Proceeds⁽¹⁾

 

 

Sales Price

 

Dispositions

 

 

 

 

 

 

 

 

 

August

2022

 

Disposition of Chicago Marriott Suites Downers Grove

 

$

14

 

 

$

16

 

April

2022

 

Disposition of Sheraton New York Times Square Hotel⁽²⁾

 

 

103

 

 

 

373

 

April

2022

 

Disposition of YVE Hotel Miami

 

 

49

 

 

 

50

 

February

2022

 

Disposition of Sheraton Boston⁽³⁾

 

 

67

 

 

 

233

 

 

 

 

Total dispositions

 

$

233

 

 

$

672

 

 

 

 

 

 

 

 

 

 

 

___________

(1)
Proceeds are net of transfer taxes, other sales costs and FF&E replacement funds deposited directly to the property or hotel manager by the buyer.
(2)
In connection with the sale of the Sheraton New York Times Square Hotel, we issued a $250 million bridge loan to the buyer. The disposition proceeds are net of the bridge loan.
(3)
In connection with the sale of the Sheraton Boston Hotel, we issued a $163 million bridge loan to the buyer. The disposition proceeds are net of the bridge loan.

Cash Used in/Provided by Financing Activities. For year-to-date 2021,Year-to-date in 2022, net cash used in financing activities was $759 million compared to net cash provided by financing activities wasof $127 million compared to $1,337 million for year-to-date 2021. Cash used in financing activities in 2022 included the repayment of the credit facility revolver and the payment of common stock dividends, following the reinstatement of the quarterly common stock dividend in the first three quartersquarter of 2020.2022. Cash provided by financing activities in year-to-date 2021 included net proceeds of $138 million from common stock issuances, while the year-to-date 2020 consisted of the issuance of $750 million of 3.5% Series I senior notes and a draw on the credit facility. Cash used in the first three quarters of 2020 included the repayment of a portion of the Series C senior notes with a portion of the proceeds of the issuance of the Series I senior notes, the redemption of preferred OP units, stock repurchases and dividend payments and distributions, prior to their suspension later in 2020.common stock.

3635


Debt

As of September 30, 2021,2022, our total debt was $5.5$4.2 billion, with a weighted average interest rate of 3.0%4.1% and a weighted average maturity of 4.24.8 years. Additionally, 55%76% of our debt has a fixed rate of interest and noneonly one of our consolidated hotels areis encumbered by mortgage debt.

Financial Covenants

Credit Facility Covenants. Our credit facility contains certain important financial covenants concerning allowable leverage, unsecured interest coverage, and required fixed charge coverage. Total debt used in the calculation of our ratio of consolidated total debt to consolidated EBITDA (our “Leverage Ratio”) is based on a “net debt” concept, underpursuant to which cash and cash equivalents in excess of $100 million are deducted from our total debt balance for purposes of measuring compliance.

On June 26, 2020, we entered into an amendment to the credit facility and on February 9, 2021, we entered into amendmentsa second amendment to the existing senior unsecured bank credit facilitywith Bank of America, N.A., as administrative agent, (collectively, the “Amendments”). The Amendments suspendsuspended requirements to comply with all existing financial maintenance covenants under the credit facility for the period which began on July 1, 2020 and ending onended when we exited the required financial statementcovenant waiver period after reporting date for the second quarter of 2022 (such period, the “Covenant Relief Period”). The existing financial maintenance covenants are reinstated for the quarter ending June 30, 2022, except that after the reinstatement instead of using the prior four calendar quarters’ results in the calculations, only results for the secondthird quarter of 2022 and thereafter are used2021. Upon reinstatement, during a phase in period. In addition, for the second quarter of 2022, the only financial covenant that is required to be satisfied is a minimum fixed charge coverage ratio of 1.00:1.00 as of the end of such quarter. For the fiscal quarters ending after the Covenant Relief Period,period, the financial covenant requirements set forth in the credit facility before the Amendments apply, except that the maximum leverage ratio requirement will be amended to be (a) 8.50:1:00 as at the end of the first and second fiscal quarters ending after the Covenant Relief Period,covenant waiver period, (b) 8.00:1.00 as at the end of the third and fourth fiscal quarters ending after the Covenant Relief Period,covenant waiver period, (c) 7.50:1:00 as at the end of the fifth fiscal quarter ending after the Covenant Relief Periodcovenant waiver period, and (d) 7.25:1.00 at all times thereafter.

The Amendments permit us to terminate the Covenant Relief Period at any time, subject to demonstrating satisfactionAt September 30, 2022, we were in compliance with all of theour financial maintenance covenants that otherwise would apply for the quarter ending June 30, 2022. Subsequent to quarter end, we terminated the Covenant Relief Period prior to the first scheduled test date, as we met the minimum fixed charge coverage ratio required for our first phase-in quarterly test period. We will be required to meet the modified phase-in financial covenant thresholds set forth above for the following five quarters and, after that time (i.e. beginning with first quarter of 2023), will be subject to the original covenant levels in the credit facility prior to amendment. Upon termination of the Covenant Relief Period, the 40-basis point additional interest rate applicable to borrowings under the credit facility was removed, in addition to lifting additional restrictions on repayments, investments and distributions. Certain restrictions, however, will remain in place. For example, stock repurchases will continue to be prohibited until our leverage ratio is below 7.25x.

At September 30, 2021, thefacility. The following table summarizes the results of the financial tests required by the credit facility, which are calculated on a trailing twelve month basis, for informational purposes only, as the covenants currently are not in effect under the Amendment:twelve-month basis:

Actual Ratio

Covenant Requirement
 for all yearsmost recent quarter

Covenant Requirement
following phase in period

Leverage ratio

16.62.4

x

Maximum ratio of 8.00x

Maximum ratio of 7.25x

Fixed charge coverage ratio

1.010.7

x

Minimum ratio of 1.25x

Minimum ratio of 1.25x

Unsecured interest coverage ratio ⁽¹⁾

2.110.3

x

Minimum ratio of 1.75x

Minimum ratio of 1.50x1.75x

___________

(1) If, at any time, our leverage ratio is belowabove 7.0x, our minimum unsecured interest coverage ratio will increasedecrease to 1.75x.1.50x.

The following table summarizes the results of the financial tests required upon exiting the Covenant Relief Period under the Amendment as of September 30, 2021. The fixed charge coverage ratio calculated below utilizes annualized third quarter results applicable for the phase-in period in contrast to the ratio calculated above, which is based on the trailing twelve months:

Actual Ratio

Covenant Requirement
 for all years

Fixed charge coverage ratio

3.4

x

 Minimum ratio of 1.00x

37


Senior Notes Indenture Covenants

The following table summarizes the results of the financial tests required by the indentures for our senior notes and our actual credit ratios as of September 30, 2021:2022:

Actual Ratio

Covenant Requirement

Unencumbered assets tests

390479

%

Minimum ratio of 150%

Total indebtedness to total assets

2621

%

Maximum ratio of 65%

Secured indebtedness to total assets

01

%

Maximum ratio of 40%

EBITDA-to-interest coverage ratio

1.79.6

x

Minimum ratio of 1.5x

As of September 30, 2021, we have met the minimum financial covenant levels under our senior notes indentures, which reinstates our ability to incur additional debt so long as we maintain these covenant levels and subject to the provisions of our credit facility and senior notes indentures. Because we are just above the minimum required EBITDA-to-interest coverage ratio as of quarter end, our ability to use debt as a financing source remains limited at this time.

For additional details on our credit facility and senior notes, including the terms of the Amendments, see our Annual Report on Form 10-K for the year ended December 31, 2020.2021.

Dividend Policy

Host Inc. is required to distribute at least 90% of its annual taxable income, excluding net capital gains, to its stockholders in order to maintain its qualification as a REIT. Funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P. As of September 30, 2021,2022, Host Inc. is the owner of approximately 99% of the Host L.P. common OP units. The remaining common OP units are owned by unaffiliated limited partners. Each Host L.P. common OP unit may be redeemed for cash or, at the election of Host Inc., Host Inc. common stock based on the conversion ratio. The conversion ratio is 1.021494 shares of Host Inc. common stock for each Host L.P. common OP unit. Under the credit facility, as amended, all redemptions must be made with Host Inc. common stock untilif Host L.P.’s leverage ratio is below 7.25x.exceeds 7.25x calculated using the prior twelve-month result.

Investors should consider the non-controlling interests in the Host L.P. common OP units when analyzing dividend payments by Host Inc. to its stockholders, as these Host L.P. common OP unitholders share on a pro rata basis, in cash distributed by Host L.P. to all of its common OP unitholders.unitholders, on a pro rata basis. For example, if Host Inc. paid a $1 per share dividend on its common stock, it would be based on the

36


payment of a $1.021494 per common OP unit distribution by Host L.P. to Host Inc., as well as to the other unaffiliated Host L.P. common OP unitholders.

Host Inc.’s policy on common dividends generally is to distribute, over time, 100% of its taxable income, which primarily is dependent on Host Inc.’s results of operations, as well as tax gains and losses on hotel sales. As partOn August 3, 2022, Host Inc.'s Board of our response to the COVID-19 pandemic and in order to preserve cash and future financial flexibility, we have suspended ourDirectors announced a regular quarterly cash dividend of $0.12 per share on Host Inc.'s common cash dividend.stock. The dividend was paid on October 17, 2022 to stockholders of record on September 30, 2022. All future dividends are subject to Board approval.

Critical Accounting Policies

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe that the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that we believe are reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.2021.

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 suspendedare 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, includingreferred to as "All Owned Hotel", which include the following adjustments: (1) operating results are

38


presented for all consolidated hotels owned as of September 30, 2021,2022, but do not include the results of operations for properties sold throughor held-for-sale as of the reporting date; and (2) operating results for acquisitions as of September 30, 20212022 are reflected for full calendar years, to include results for periods prior to our ownership. For these hotels, since the year-over-year comparison includes periods prior to our ownership, the changes will not necessarily correspond to changes in our actual results.

Constant US$ and Nominal US$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. For comparative purposes, we also present the RevPARTherefore, hotel statistics and results for the prior year assuming the results of our foreign operations were translated using the same exchange rates that were effective for the comparable periods in the current year, thereby eliminating the effect of currency fluctuation for the year-over-year comparisons. We believe this presentation is useful to investors as it provides clarity with respect to the change in RevPAR in the local currency of the hotel consistent with the manner in which we would evaluate our domestic portfolio. However, the estimated effect of changes in foreign currency has been reflected in the results of net income (loss), EBITDA, Adjusted EBITDAre, diluted earnings (loss) per common share and Adjusted FFO per diluted share. Nominal US$ resultsnon-U.S. properties include the effect of currency fluctuations, consistent with our financial statement presentation.

Non-GAAP Financial Measures

We use 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. These measures include the following:

Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization for real estate (“EBITDAre”) and Adjusted EBITDAre, as a measure of performance for Host Inc. and Host L.P.,
Funds From Operations (“FFO”) and FFO per diluted share, both calculated in accordance with National Association of Real Estate Investment Trusts (“NAREIT”) guidelines and with certain adjustments from those guidelines, as a measure of performance for Host Inc., and
All Owned Hotel Pro Forma operating statistics and results, as a measure of performance for Host Inc. and Host L.P.

The following discussion below defines these measures and presents why we believe they are useful supplemental measures of our performance.

Set forth below for each such non-GAAP financial measure is a reconciliation of the measure with the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable thereto. We also have included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures” in our

37


Annual Report on Form 10-K for the year ended December 31, 20202021 further explanations of the adjustments being made, a statement disclosing the reasons why we believe the presentation of each of the non-GAAP financial measures provide useful information to investors regarding our financial condition and results of operations, the additional purposes for which we use the non-GAAP financial measures and limitations on their use.

EBITDA, EBITDAre and Adjusted EBITDAre

EBITDA

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 our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). Management also believes the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners thatwho 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.

39


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 our 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 offor 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 measurewhat is used to calculatein calculating certain credit ratios for our credit facility and senior notes. We adjust EBITDAre for the following items, which may occur in any period, and refer to this measure as Adjusted EBITDAre:

Property Insurance Gains – We exclude the effect of property insurance gains reflected in our condensed consolidated statements of operations because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets. In addition, property insurance gains could be less important to investors given that the depreciated asset book value written off in connection with the calculation of the property insurance gain often does not reflect the market value of real estate assets.
Acquisition Costs – Under GAAP, costs associated with completed property acquisitions that are considered business combinations are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.
Litigation Gains and Losses – We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider outside the ordinary course of business. We believe that including these items is not consistent with our ongoing operating performance.
Severance Expense – In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties. Situations that would result in a severance add-back include, but are not limited to,to: (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce. We do not add back corporate-level severance costs or severance costs at an individual hotel that we consider to be incurred in the normal course of business.

In unusual circumstances, we also may adjust EBITDAre for gains or losses that management believes are not representative of the Company’s current operating performance. The last adjustment of this nature was a 2013 exclusion of a gain from an eminent domain claim.

4038


The following table provides a reconciliation of EBITDA, EBITDAre, and Adjusted EBITDAre to net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider the most directly comparable:

Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre for Host Inc. and Host L.P.

(in millions)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

Interest expense

 

 

40

 

 

 

43

 

 

 

113

 

 

 

128

 

Depreciation and amortization

 

 

164

 

 

 

171

 

 

 

498

 

 

 

505

 

Income taxes

 

 

6

 

 

 

(13

)

 

 

29

 

 

 

(81

)

EBITDA

 

 

326

 

 

 

81

 

 

 

1,134

 

 

 

218

 

Gain on dispositions⁽¹⁾

 

 

(5

)

 

 

 

 

 

(18

)

 

 

 

Non-cash impairment expense

 

 

 

 

 

92

 

 

 

 

 

 

92

 

Equity investment adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Equity in (earnings) losses of affiliates

 

 

1

 

 

 

(2

)

 

 

(3

)

 

 

(36

)

Pro rata EBITDAre of equity investments⁽²⁾

 

 

6

 

 

 

8

 

 

 

27

 

 

 

21

 

EBITDAre

 

 

328

 

 

 

179

 

 

 

1,140

 

 

 

295

 

Adjustments to EBITDAre:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on property insurance settlement

 

 

 

 

 

 

 

 

(6

)

 

 

 

Severance expense (reversal) at hotel properties

 

 

 

 

 

(2

)

 

 

 

 

 

(5

)

Adjusted EBITDAre

 

$

328

 

 

$

177

 

 

$

1,134

 

 

$

290

 

___________

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss⁽¹⁾

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

Interest expense

 

 

43

 

 

 

66

 

 

 

128

 

 

 

143

 

Depreciation and amortization

 

 

171

 

 

 

166

 

 

 

505

 

 

 

498

 

Income taxes

 

 

(13

)

 

 

(73

)

 

 

(81

)

 

 

(156

)

EBITDA⁽¹⁾

 

 

81

 

 

 

(157

)

 

 

218

 

 

 

(190

)

Gain on dispositions

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Non-cash impairment expense

 

 

92

 

 

 

 

 

 

92

 

 

 

 

Equity investment adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Equity in (earnings) losses of affiliates

 

 

(2

)

 

 

5

 

 

 

(36

)

 

 

26

 

Pro rata EBITDAre of equity investments⁽²⁾

 

 

8

 

 

 

(1

)

 

 

21

 

 

 

(15

)

EBITDAre⁽¹⁾

 

 

179

 

 

 

(154

)

 

 

295

 

 

 

(180

)

Adjustments to EBITDAre:

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense (reversal) at hotel properties

 

 

(2

)

 

 

43

 

 

 

(5

)

 

 

44

 

Adjusted EBITDAre⁽¹⁾

 

$

177

 

 

$

(111

)

 

$

290

 

 

$

(136

)

___________

 

 

 

 

 

 

 

 

 

 

 

 

(1) Net loss, EBITDA, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO for the year-to-date ended September 30, 2020 include a gain of $12 million fromReflects the sale of land adjacent to The Phoenician hotel and a loss of $14 million related to inventory impairment expense recorded by our Maui timeshare joint venture, reflected through equityfour hotels in (earnings) losses of affiliates.2022.

(2) Pro rata EBITDAreof equity investments and pro rata FFO of equity investments for the year-to-date ended September 30, 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.

FFO Measures

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 also present Adjusted FFO per diluted share when evaluating our performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance, in our annual budget process and for our compensation programs. We believe that the presentation of Adjusted FFO per diluted share, when combined with both the primary GAAP presentation of diluted earnings per share and FFO per diluted share as defined by NAREIT, provides useful supplemental information that is beneficial to an investor’s understanding of our operating performance. We adjust NAREIT FFO per diluted share for the following items, which may occur in any period, and refer to this measure as Adjusted FFO per diluted share:

Gains and Losses on the Extinguishment of Debt – We exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of the write-off of deferred financing costs from the original issuance of the debt being redeemed or retired and incremental interest expense incurred during

4139


the refinancing period. We also exclude the gains on debt repurchases and the original issuance costs associated with the retirement of preferred stock. We believe that these items are not reflective of our ongoing finance costs.
Acquisition Costs – Under GAAP, costs associated with completed property acquisitions that are considered business combinations are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.
Litigation Gains and Losses – We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider outside the ordinary course of business. We believe that including these items is not consistent with our ongoing operating performance.
Severance Expense – In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties. Situations that would result in a severance add-back include, but are not limited to, (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce. We do not add back corporate-level severance costs or severance costs at an individual hotel that we consider to be incurred in the normal course of business.

In unusual circumstances, we also may adjust NAREIT FFO for gains or losses that management believes are not representative of our 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.

4240


The following table provides a reconciliation of the differences between our non-GAAP financial measures, NAREIT FFO and Adjusted FFO (separately and on a per diluted share basis), and net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable:

Host Inc. Reconciliation of Diluted LossEarnings (Loss) per Common Share to

NAREIT and Adjusted Funds From Operations per Diluted Share

(in millions, except per share amount)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

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

 

 

(2

)

 

 

1

 

 

 

(8

)

 

 

3

 

Net income (loss) attributable to Host Inc.

 

 

114

 

 

 

(119

)

 

 

486

 

 

 

(331

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on dispositions⁽¹⁾

 

 

(5

)

 

 

 

 

 

(18

)

 

 

 

Gain on property insurance settlement

 

 

 

 

 

 

 

 

(6

)

 

 

 

Depreciation and amortization

 

 

164

 

 

 

171

 

 

 

497

 

 

 

504

 

Non-cash impairment expense

 

 

 

 

 

92

 

 

 

 

 

 

92

 

Equity investment adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Equity in (earnings) losses of affiliates

 

 

1

 

 

 

(2

)

 

 

(3

)

 

 

(36

)

Pro rata FFO of equity investments⁽²⁾

 

 

4

 

 

 

6

 

 

 

21

 

 

 

16

 

Consolidated partnership adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

FFO adjustment for non-controlling partnerships

 

 

(1

)

 

 

 

 

 

(1

)

 

 

(1

)

FFO adjustments for non-controlling interests of Host L.P.

 

 

(2

)

 

 

(3

)

 

 

(6

)

 

 

(6

)

NAREIT FFO

 

 

275

 

 

 

145

 

 

 

970

 

 

 

238

 

Adjustments to NAREIT FFO:

 

 

 

 

 

 

 

 

 

 

 

 

Severance expense (reversal) at hotel properties

 

 

 

 

 

(2

)

 

 

 

 

 

(5

)

Adjusted FFO

 

$

275

 

 

$

143

 

 

$

970

 

 

$

233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For calculation on a per share basis:⁽³⁾

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding - EPS

 

717.6

 

 

 

713.9

 

 

 

717.4

 

 

 

709.0

 

Assuming issuance of common shares granted under the comprehensive stock plans

 

 

 

 

 

1.6

 

 

 

 

 

 

1.6

 

Diluted weighted average shares outstanding - NAREIT FFO and Adjusted FFO

 

 

717.6

 

 

 

715.5

 

 

 

717.4

 

 

 

710.6

 

Diluted earnings (loss) per common share

 

$

0.16

 

 

$

(0.17

)

 

$

0.68

 

 

$

(0.47

)

NAREIT FFO per diluted share

 

$

0.38

 

 

$

0.20

 

 

$

1.35

 

 

$

0.33

 

Adjusted FFO per diluted share

 

$

0.38

 

 

$

0.20

 

 

$

1.35

 

 

$

0.33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

___________

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss⁽¹⁾

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

Less: Net loss attributable to non-controlling interests

 

 

1

 

 

 

3

 

 

 

3

 

 

 

7

 

Net loss attributable to Host Inc.

 

 

(119

)

 

 

(313

)

 

 

(331

)

 

 

(668

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Gain on dispositions

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Depreciation and amortization

 

 

171

 

 

 

165

 

 

 

504

 

 

 

496

 

Non-cash impairment expense

 

 

92

 

 

 

 

 

 

92

 

 

 

 

Equity investment adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Equity in (earnings) losses of affiliates

 

 

(2

)

 

 

5

 

 

 

(36

)

 

 

26

 

Pro rata FFO of equity investments⁽²⁾

 

 

6

 

 

 

(4

)

 

 

16

 

 

 

(21

)

Consolidated partnership adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

FFO adjustment for non-controlling partnerships

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

FFO adjustments for non-controlling interests of Host L.P.

 

 

(3

)

 

 

(2

)

 

 

(6

)

 

 

(5

)

NAREIT FFO⁽¹⁾

 

 

145

 

 

 

(150

)

 

 

238

 

 

 

(174

)

Adjustments to NAREIT FFO:

 

 

 

 

 

 

 

 

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

27

 

 

 

 

 

 

28

 

Severance expense (reversal) at hotel properties

 

 

(2

)

 

 

43

 

 

 

(5

)

 

 

44

 

Adjusted FFO⁽¹⁾

 

$

143

 

 

$

(80

)

 

$

233

 

 

$

(102

)

 

 

 

 

 

 

 

 

 

 

 

 

 

For calculation on a per share basis:⁽³⁾

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average shares outstanding - EPS

 

713.9

 

 

 

705.2

 

 

 

709.0

 

 

 

706.1

 

Assuming issuance of common shares granted under the comprehensive stock plans

 

 

1.6

 

 

 

 

 

 

1.6

 

 

 

 

Diluted weighted average shares outstanding - NAREIT FFO and Adjusted FFO

 

 

715.5

 

 

 

705.2

 

 

 

710.6

 

 

 

706.1

 

Diluted loss per common share

 

$

(.17

)

 

$

(.44

)

 

$

(.47

)

 

$

(.95

)

NAREIT FFO per diluted share

 

$

.20

 

 

$

(.21

)

 

$

.33

 

 

$

(.25

)

Adjusted FFO per diluted share

 

$

.20

 

 

$

(.11

)

 

$

.33

 

 

$

(.14

)

___________

 

 

 

 

 

 

 

 

 

 

 

 

(1-2) Refer to the corresponding footnote on the Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre for Host Inc. and Host L.P.

(3) Diluted lossearnings (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 partner interests to common OP units. No effect is shown for securities if they are anti-dilutive.

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 formaAll Owned Hotel EBITDA to help us and our investors evaluate the ongoing operating performance of our hotels after removing the impact of our capital structure (primarily interest expense) and our 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 formaOwned Hotel results are presented both by location and for our properties in the aggregate. While severance expense is not uncommon at the individual property level in the normal course of business, weWe eliminate from our hotel levelhotel-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

41


this elimination provides useful supplemental information that is beneficial to an investor’s understanding of our ongoing operating

43


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 hotelAll 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 hotelAll Owned Hotel results in the aggregate. For these reasons, we believe all owned hotelAll Owned Hotel operating results, when combined with the presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management.

The following tables present certain operating results and statistics for our hotels for the periods presented herein and a reconciliation of the differences between all owned hotel pro formaAll Owned Hotel EBITDA, a non-GAAP financial measure, and net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable. Similar reconciliations of the differences between (i) hotel revenues and (ii) our revenues as calculated and presented in accordance with GAAP (each of which is used in the applicable margin calculation), and between (iii) hotel expenses and (iv) operating costs and expenses as calculated and presented in accordance with GAAP, also are included in the reconciliation:

All Owned Hotel Pro Forma Results for Host Inc. and Host L.P.

(in millions, except hotel statistics)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Number of hotels

 

 

84

 

 

 

83

 

 

 

84

 

 

 

83

 

Number of rooms

 

 

47,474

 

 

 

47,309

 

 

 

47,474

 

 

 

47,309

 

Change in hotel Total RevPAR -

 

 

 

 

 

 

 

 

 

 

 

 

Constant US$

 

 

288.5

%

 

 

 

 

 

38.7

%

 

 

 

Nominal US$

 

 

288.7

%

 

 

 

 

 

38.7

%

 

 

 

Change in hotel RevPAR -

 

 

 

 

 

 

 

 

 

 

 

 

Constant US$

 

 

307.3

%

 

 

 

 

 

51.5

%

 

 

 

Nominal US$

 

 

307.5

%

 

 

 

 

 

51.4

%

 

 

 

Operating loss margin⁽¹⁾

 

 

(11.3

)%

 

 

(160.6

)%

 

 

(17.4

)%

 

 

(50.4

)%

All Owned Hotel Pro Forma EBITDA margin⁽¹⁾

 

 

23.0

%

 

 

(44.5

)%

 

 

18.4

%

 

 

(5.6

)%

Food and beverage profit margin⁽¹⁾

 

 

23.6

%

 

 

(132.3

)%

 

 

22.7

%

 

 

4.3

%

All Owned Hotel Pro Forma food and beverage profit margin⁽¹⁾

 

 

22.9

%

 

 

(47.4

)%

 

 

22.2

%

 

 

11.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(120

)

 

$

(316

)

 

$

(334

)

 

$

(675

)

Depreciation and amortization

 

 

263

 

 

 

166

 

 

 

597

 

 

 

498

 

Interest expense

 

 

43

 

 

 

66

 

 

 

128

 

 

 

143

 

Benefit for income taxes

 

 

(13

)

 

 

(73

)

 

 

(81

)

 

 

(156

)

Gain on sale of property and corporate level income/expense

 

 

19

 

 

 

23

 

 

 

31

 

 

 

74

 

Severance expense (reversal) at hotel properties

 

 

(2

)

 

 

43

 

 

 

(5

)

 

 

44

 

Pro forma adjustments⁽²⁾

 

 

6

 

 

 

(7

)

 

 

28

 

 

 

(8

)

All Owned Hotel Pro Forma EBITDA⁽³⁾

 

$

196

 

 

$

(98

)

 

$

364

 

 

$

(80

)

 

 

Quarter ended September 30,

 

 

Year-to-date ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Number of hotels

 

 

77

 

 

 

76

 

 

 

77

 

 

 

76

 

Number of rooms

 

 

42,084

 

 

 

41,861

 

 

 

42,084

 

 

 

41,861

 

Change in All Owned Hotel Total RevPAR

 

 

48.1

%

 

 

 

 

 

90.5

%

 

 

 

Change in All Owned Hotel RevPAR

 

 

42.0

%

 

 

 

 

 

81.5

%

 

 

 

Operating profit (loss) margin⁽²⁾

 

 

12.4

%

 

 

(11.3

)%

 

 

16.4

%

 

 

(17.4

)%

All Owned Hotel EBITDA margin⁽²⁾

 

 

28.7

%

 

 

24.9

%

 

 

32.7

%

 

 

21.1

%

Food and beverage profit margin⁽²⁾

 

 

30.3

%

 

 

23.6

%

 

 

34.6

%

 

 

22.7

%

All Owned Hotel food and beverage profit margin⁽²⁾

 

 

30.3

%

 

 

24.3

%

 

 

35.1

%

 

 

23.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

116

 

 

$

(120

)

 

$

494

 

 

$

(334

)

Depreciation and amortization

 

 

164

 

 

 

263

 

 

 

498

 

 

 

597

 

Interest expense

 

 

40

 

 

 

43

 

 

 

113

 

 

 

128

 

Provision (benefit) for income taxes

 

 

6

 

 

 

(13

)

 

 

29

 

 

 

(81

)

Gain on sale of property and corporate level income/expense

 

 

15

 

 

 

19

 

 

 

32

 

 

 

31

 

Severance expense (reversal) at hotel properties

 

 

 

 

 

(2

)

 

 

2

 

 

 

(5

)

All Owned Hotel adjustments⁽¹⁾

 

 

 

 

 

8

 

 

 

11

 

 

 

62

 

All Owned Hotel EBITDA⁽¹⁾

 

$

341

 

 

$

198

 

 

$

1,179

 

 

$

398

 

 

 

44


 

 Quarter ended September 30, 2021

 

 

 Quarter ended September 30, 2020

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 GAAP Results

 

 

Severance at hotel properties

 

 

Pro forma adjustments⁽²⁾

 

 

Depreciation and corporate level items

 

 

 All Owned Hotel Pro Forma Results⁽³⁾

 

 

 GAAP Results

 

 

Severance at hotel properties

 

 

Pro forma adjustments⁽²⁾

 

 

Depreciation and corporate level items

 

 

 All Owned Hotel Pro Forma Results⁽³⁾

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

$

557

 

 

$

 

 

$

7

 

 

$

 

 

$

564

 

 

$

126

 

 

$

 

 

$

12

 

 

$

 

 

$

138

 

Food and beverage

 

191

 

 

 

 

 

 

1

 

 

 

 

 

 

192

 

 

 

31

 

 

 

 

 

 

7

 

 

 

 

 

 

38

 

Other

 

96

 

 

 

 

 

 

1

 

 

 

 

 

 

97

 

 

 

41

 

 

 

 

 

 

3

 

 

 

 

 

 

44

 

Total revenues

 

844

 

 

 

 

 

 

9

 

 

 

 

 

 

853

 

 

 

198

 

 

 

 

 

 

22

 

 

 

 

 

 

220

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

150

 

 

 

1

 

 

 

1

 

 

 

 

 

 

152

 

 

 

69

 

 

 

(13

)

 

 

4

 

 

 

 

 

 

60

 

Food and beverage

 

146

 

 

 

1

 

 

 

1

 

 

 

 

 

 

148

 

 

 

72

 

 

 

(24

)

 

 

8

 

 

 

 

 

 

56

 

Other

 

361

 

 

 

 

 

 

1

 

 

 

 

 

 

362

 

 

 

191

 

 

 

(6

)

 

 

17

 

 

 

 

 

 

202

 

Depreciation and amortization

 

263

 

 

 

 

 

 

 

 

 

(263

)

 

 

 

 

 

166

 

 

 

 

 

 

 

 

 

(166

)

 

 

 

Corporate and other expenses

 

24

 

 

 

 

 

 

 

 

 

(24

)

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

(18

)

 

 

 

Gain on insurance and
     business interruption
     settlements

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses

 

939

 

 

 

2

 

 

 

3

 

 

 

(287

)

 

 

657

 

 

 

516

 

 

 

(43

)

 

 

29

 

 

 

(184

)

 

 

318

 

Operating Profit - All Owned Hotel
     Pro Forma EBITDA⁽³⁾

$

(95

)

 

$

(2

)

 

$

6

 

 

$

287

 

 

$

196

 

 

$

(318

)

 

$

43

 

 

$

(7

)

 

$

184

 

 

$

(98

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Year-to-date ended September 30, 2021

 

 

 Year-to-date ended September 30, 2020

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 GAAP Results

 

 

Severance at hotel properties

 

 

Pro forma adjustments⁽²⁾

 

 

Depreciation and corporate level items

 

 

 All Owned Hotel Pro Forma Results⁽³⁾

 

 

 GAAP Results

 

 

Severance at hotel properties

 

 

Pro forma adjustments⁽²⁾

 

 

Depreciation and corporate level items

 

 

 All Owned Hotel Pro Forma Results⁽³⁾

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

$

1,237

 

 

$

 

 

$

55

 

 

$

 

 

$

1,292

 

 

$

813

 

 

$

 

 

$

41

 

 

$

 

 

$

854

 

Food and beverage

 

 

405

 

 

 

 

 

 

18

 

 

 

 

 

 

423

 

 

 

372

 

 

 

 

 

 

24

 

 

 

 

 

 

396

 

Other

 

 

250

 

 

 

 

 

 

13

 

 

 

 

 

 

263

 

 

 

168

 

 

 

 

 

 

11

 

 

 

 

 

 

179

 

Total revenues

 

 

1,892

 

 

 

 

 

 

86

 

 

 

 

 

 

1,978

 

 

 

1,353

 

 

 

 

 

 

76

 

 

 

 

 

 

1,429

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

 

324

 

 

 

1

 

 

 

10

 

 

 

 

 

 

335

 

 

 

299

 

 

 

(13

)

 

 

12

 

 

 

 

 

 

298

 

Food and beverage

 

 

313

 

 

 

1

 

 

 

15

 

 

 

 

 

 

329

 

 

 

356

 

 

 

(24

)

 

 

20

 

 

 

 

 

 

352

 

Other

 

 

919

 

 

 

3

 

 

 

33

 

 

 

 

 

 

955

 

 

 

814

 

 

 

(7

)

 

 

52

 

 

 

 

 

 

859

 

Depreciation and amortization

 

 

597

 

 

 

 

 

 

 

 

 

(597

)

 

 

 

 

 

498

 

 

 

 

 

 

 

 

 

(498

)

 

 

 

Corporate and other expenses

 

 

73

 

 

 

 

 

 

 

 

 

(73

)

 

 

 

 

 

68

 

 

 

 

 

 

 

 

 

(68

)

 

 

 

Gain on insurance and
     business interruption
     settlements

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses

 

 

2,221

 

 

 

5

 

 

 

58

 

 

 

(670

)

 

 

1,614

 

 

 

2,035

 

 

 

(44

)

 

 

84

 

 

 

(566

)

 

 

1,509

 

Operating Profit - All Owned Hotel
     Pro Forma EBITDA⁽³⁾

 

$

(329

)

 

$

(5

)

 

$

28

 

 

$

670

 

 

$

364

 

 

$

(682

)

 

$

44

 

 

$

(8

)

 

$

566

 

 

$

(80

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

45


___________

(1) 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.All Owned Hotel margins are calculated using amounts presented in the above tables.

(2) Pro forma adjustments represent the following items: (i) the elimination of results of operations of hotels sold or held-for-sale as of September 30, 2021,2022, 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 September 30, 2021.2022. All Owned Hotel Pro Forma results also includesinclude the results of our leased office buildings and other non-hotel revenue and expense items.

(3) All Owned Hotel Pro Forma EBITDA excludes the Laura Hotel, the luxury downtown Houston hotel acquired in July 2021, as it was closed for the entirety of the quarter. Additionally, the 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, there were no operations for the hotel prior to January 2021 and no adjustments were made for pro forma results of the hotelthese hotels for periods prior to its opening. Results for the five hotels sold subsequent to quarter end are included, as they were owned for the entirety of the periods presented.their openings.

(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. All Owned Hotel margins are calculated using amounts presented in the following tables, which include reconciliations to the applicable GAAP results:

42


 

Quarter ended September 30, 2022

 

 

Quarter ended September 30, 2021

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

GAAP Results

 

 

All Owned Hotel adjustments

 

 

Depreciation and corporate level items

 

 

All Owned Hotel Results

 

 

GAAP Results

 

 

Severance at hotel properties

 

 

All Owned Hotel adjustments

 

 

Depreciation and corporate level items

 

 

All Owned Hotel Results

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

$

746

 

 

$

(2

)

 

$

 

 

$

744

 

 

$

557

 

 

$

 

 

$

(36

)

 

$

 

 

$

521

 

Food and beverage

 

330

 

 

 

 

 

 

 

 

 

330

 

 

 

191

 

 

 

 

 

 

(7

)

 

 

 

 

 

184

 

Other

 

113

 

 

 

 

 

 

 

 

 

113

 

 

 

96

 

 

 

 

 

 

(3

)

 

 

 

 

 

93

 

Total revenues

 

1,189

 

 

 

(2

)

 

 

 

 

 

1,187

 

 

 

844

 

 

 

 

 

 

(46

)

 

 

 

 

 

798

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

190

 

 

 

(1

)

 

 

 

 

 

189

 

 

 

150

 

 

 

1

 

 

 

(16

)

 

 

 

 

 

135

 

Food and beverage

 

230

 

 

 

 

 

 

 

 

 

230

 

 

 

146

 

 

 

1

 

 

 

(8

)

 

 

 

 

 

139

 

Other

 

438

 

 

 

(1

)

 

 

 

 

 

437

 

 

 

361

 

 

 

 

 

 

(30

)

 

 

 

 

 

331

 

Depreciation and amortization

 

164

 

 

 

 

 

 

(164

)

 

 

 

 

 

263

 

 

 

 

 

 

 

 

 

(263

)

 

 

 

Corporate and other expenses

 

29

 

 

 

 

 

 

(29

)

 

 

 

 

 

24

 

 

 

 

 

 

 

 

 

(24

)

 

 

 

Gain on insurance and
     business interruption
     settlements

 

(10

)

 

 

 

 

 

 

 

 

(10

)

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

(5

)

Total expenses

 

1,041

 

 

 

(2

)

 

 

(193

)

 

 

846

 

 

 

939

 

 

 

2

 

 

 

(54

)

 

 

(287

)

 

 

600

 

Operating Profit - All Owned
     Hotel EBITDA

$

148

 

 

$

 

 

$

193

 

 

$

341

 

 

$

(95

)

 

$

(2

)

 

$

8

 

 

$

287

 

 

$

198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-to-date ended September 30, 2022

 

 

Year-to-date ended September 30, 2021

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

GAAP Results

 

 

Severance at hotel properties

 

 

All Owned Hotel adjustments

 

 

Depreciation and corporate level items

 

 

All Owned Hotel Results

 

 

GAAP Results

 

 

Severance at hotel properties

 

 

All Owned Hotel adjustments

 

 

Depreciation and corporate level items

 

 

All Owned Hotel Results

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

$

2,251

 

 

$

 

 

$

(28

)

 

$

 

 

$

2,223

 

 

$

1,237

 

 

$

 

 

$

(20

)

 

$

 

 

$

1,217

 

Food and beverage

 

 

1,032

 

 

 

 

 

 

(5

)

 

 

 

 

 

1,027

 

 

 

405

 

 

 

 

 

 

7

 

 

 

 

 

 

412

 

Other

 

 

361

 

 

 

 

 

 

(2

)

 

 

 

 

 

359

 

 

 

250

 

 

 

 

 

 

5

 

 

 

 

 

 

255

 

Total revenues

 

 

3,644

 

 

 

 

 

 

(35

)

 

 

 

 

 

3,609

 

 

 

1,892

 

 

 

 

 

 

(8

)

 

 

 

 

 

1,884

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room

 

 

539

 

 

 

 

 

 

(16

)

 

 

 

 

 

523

 

 

 

324

 

 

 

1

 

 

 

(24

)

 

 

 

 

 

301

 

Food and beverage

 

 

675

 

 

 

 

 

 

(8

)

 

 

 

 

 

667

 

 

 

313

 

 

 

1

 

 

 

2

 

 

 

 

 

 

316

 

Other

 

 

1,275

 

 

 

(2

)

 

 

(22

)

 

 

 

 

 

1,251

 

 

 

919

 

 

 

3

 

 

 

(48

)

 

 

 

 

 

874

 

Depreciation and amortization

 

 

498

 

 

 

 

 

 

 

 

 

(498

)

 

 

 

 

 

597

 

 

 

 

 

 

 

 

 

(597

)

 

 

 

Corporate and other expenses

 

 

77

 

 

 

 

 

 

 

 

 

(77

)

 

 

 

 

 

73

 

 

 

 

 

 

 

 

 

(73

)

 

 

 

Gain on insurance and
     business interruption
     settlements

 

 

(17

)

 

 

 

 

 

 

 

 

6

 

 

 

(11

)

 

 

(5

)

 

 

 

 

 

 

 

 

 

 

 

(5

)

Total expenses

 

 

3,047

 

 

 

(2

)

 

 

(46

)

 

 

(569

)

 

 

2,430

 

 

 

2,221

 

 

 

5

 

 

 

(70

)

 

 

(670

)

 

 

1,486

 

Operating Profit - All Owned
     Hotel EBITDA

 

$

597

 

 

$

2

 

 

$

11

 

 

$

569

 

 

$

1,179

 

 

$

(329

)

 

$

(5

)

 

$

62

 

 

$

670

 

 

$

398

 

43


Item 3. Quantitative and Qualitative Disclosures about Market Risk

All information in this section applies to Host Inc. and Host L.P.

Interest Rate Sensitivity

As of September 30, 20212022 and December 31, 2020, 55%2021, 76% and 66%, respectively, of our outstanding debt bore interest at fixed rates. To manage interest rate risk applicable to our debt, we may enter into interest rate swaps or caps. The interest rate derivatives into which we may enter are strictly to hedge interest rate risk, and are not for trading purposes. The percentages above reflect the effectAs of any derivatives into whichSeptember 30, 2022, we do not have entered to manageany interest rate risk. No interest rate hedging transactions were entered into during the first three quarters of 2021.derivatives outstanding. See Item 7A of our most recent Annual Report on Form 10–K.

Exchange Rate Sensitivity

As we have operations outside of the United States (specifically, the ownership of hotels in Brazil and Canada and a minority investment in a joint venture in India), currency exchange risks arise in the normal course of our business. To manage the currency exchange risk, we may enter into forward or option contracts or hedge our investment through the issuance of foreign currency denominated debt. During the third quarter of 2021, one2022, three foreign currency forward purchase contractcontracts matured, with a total notional amount of CAD 2599 million ($2079 million), and we paid $0.2received $3.4 million in the aggregate upon settlement. In replacementsettlement of these contracts. To replace the maturing contract,contracts, we entered into athree new foreign currency forward purchase contract, with a total notional amount of CAD 25 million ($20 million), that matures in February 2022. We have two other foreign currency forward purchase contracts with a total notional amount of CAD 7499 million ($5975 million), thatwhich mature in March 2022.August and September 2023. The foreign currency exchange agreements into which we have entered are strictly to hedge foreign currency risk and are not for trading purposes.

See Item 7A of our most recent Annual Report on Form 10-K and Item 3 of our Quarterly Report on Form 10-Q for the firstperiods ended March 31 and second quarters of 2021.June 30, 2022.

4644


Item 4. Controls and Procedures

Controls and Procedures (Host Hotels & Resorts, Inc.)

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Changes to Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Controls and Procedures (Host Hotels & Resorts, L.P.)

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including Host Inc.’s Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, Host Inc.’s Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Changes to Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

4745


PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities (Host Hotels & Resorts, Inc.)

On August 5, 2019, Host Inc. announced3, 2022, the Board of Directors authorized an increase from $500 million to $1 billion in the amount authorized under itsthe Company’s share repurchase program.program from the existing $371 remaining available during the second quarter to $1 billion. The common stock may be purchased from time to time depending upon market conditions and repurchases may be made in the open market or through private transactions or by other means, including principal transactions with various financial institutions, accelerated share repurchases, forwards, options and similar transactions, and through one or more trading plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The program does not obligate us to repurchase any specific number of shares or any specific dollar amount and may be suspended at any time at our discretion. Repurchases are currently restricted under the credit facility, as amended.

Period

 

Total Number of Host Inc. Common Shares Purchased

 

 

Average Price Paid
per Common Share

 

 

Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs

 

 

Approximate Dollar Value of Common Shares that May Yet Be Purchased Under the Plans or Programs (in millions)

 

July 1, 2021 – July 31, 2021

 

 

 

 

$

 

 

 

 

 

$

371

 

August 1, 2021 – August 31, 2021

 

 

 

 

 

 

 

 

 

 

 

371

 

September 1, 2021 – September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

371

 

Total

 

 

 

 

$

 

 

 

 

 

$

371

 

Issuer Sales of Equity Securities (Host Hotels & Resorts, Inc.)

On July 26, 2021, Host Inc. issued 28,030 shares of common stock to the Nicholas J. Schreiber 2019 Trust in exchange for 27,441 OP units of Host L.P. held by the trust. All shares were issued pursuant to the private placement exemption from registration provided by Section 4(2) of the Securities Act. The number of shares issued was based on the current conversion factor of 1.021494 common shares per OP unit.

Period

 

Total Number of Host Inc. Common Shares Purchased

 

 

Average Price Paid
per Common Share

 

 

Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs

 

 

Approximate Dollar Value of Common Shares that May Yet Be Purchased Under the Plans or Programs (in millions)

 

July 1, 2022 – July 31, 2022

 

 

 

 

$

 

 

 

 

 

$

371

 

August 1, 2022 – August 31, 2022

 

 

 

 

 

 

 

 

 

 

 

1,000

 

September 1, 2022 – September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

1,000

 

Total

 

 

 

 

$

 

 

 

 

 

$

1,000

 

Issuer Purchases of Equity Securities (Host Hotels & Resorts, L.P.)

 

Period

Total Number of Host L.P. Common OP Units Purchased

Average Price
Paid per Common OP Unit

Total Number of OP Units Purchased as Part of Publicly Announced Plans or Programs

Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (in millions)

July 1, 20212022 – July 31, 20212022

14,898

35,671

*

 1.021494 shares of Host Hotels & Resorts, Inc. common stock

August 1, 20212022 – August 31, 20212022

14,508

24,267

*

 1.021494 shares of Host Hotels & Resorts, Inc. common stock

September 1, 20212022 – September 30, 20212022

30,004

7,517

*

 1.021494 shares of Host Hotels & Resorts, Inc. common stock

Total

59,410

67,455

___________

* Reflects common OP units offered for redemption by limited partners in exchange for shares of Host Inc.’s common stock.

4846


Item 6. Exhibits

In reviewing the agreements included as exhibits to this report, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the company, its subsidiaries or other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
have been qualified by disclosures that were made to other parties in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
were made only as of the date of the applicable agreement or such other date or date as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representation and warranties may not describe the actual state of affairs as of the date they were made or at any other time.

The exhibits listed on the accompanying Exhibit Index are filed as part of this report and such Exhibit Index is incorporated herein by reference.

Exhibit No.

 

Description

3.

Articles of Incorporation and Bylaws

3.1A*

Fourth Amended and Restated Agreement of Limited Partnership of Host Hotels & Resorts, L.P., dated October 31, 2022.

31

 

Rule 13a-14(a)/15d-14(a) Certifications

31.1*

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Host Hotels & Resorts, Inc.

31.2*

 

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Host Hotels & Resorts, Inc.

31.3*

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Host Hotels & Resorts, L.P.

31.4*

 

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Host Hotels & Resorts, L.P.

32

 

Section 1350 Certifications

32.1†*

 

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Host Hotels & Resorts, Inc.

32.2†*

 

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Host Hotels & Resorts, L.P.

101

 

XBRL

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document. Submitted electronically with this report.

101.CAL

 

Inline XBRL Taxonomy Calculation Linkbase Document. Submitted electronically with this report.

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document. Submitted electronically with this report.

101.LAB

 

Inline XBRL Taxonomy Label Linkbase Document. Submitted electronically with this report.

101.PRE

 

Inline XBRL Taxonomy Presentation Linkbase Document. Submitted electronically with this report.

104

 

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

47


The following materials, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations for the Quarter and Year-to-date ended September 30, 20212022 and 2020,2021, respectively, for Host Hotels & Resorts, Inc.; (ii) the Condensed Consolidated Balance Sheets at September 30, 20212022 and December 31, 2020,2021, respectively, for Host Hotels & Resorts, Inc.; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the Quarter and

49


Year-to-date ended September 30, 20212022 and 2020,2021, respectively, for Host Hotels & Resorts, Inc.; (iv) the Condensed Consolidated Statements of Cash Flows for the Year-to-date ended September 30, 20212022 and 2020,2021, respectively, for Host Hotels & Resorts, Inc.; (v) the Condensed Consolidated Statements of Operations for the Quarter and Year-to-date ended September 30, 20212022 and 2020,2021, respectively, for Host Hotels & Resorts, L.P.; (vi) the Condensed Consolidated Balance Sheets at September 30, 20212022 and December 31, 2020,2021, respectively, for Host Hotels & Resorts, L.P.; (vii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the Quarter and Year-to-date ended September 30, 20212022 and 2020,2021, respectively, for Host Hotels & Resorts, L.P.; (viii) the Condensed Consolidated Statements of Cash Flows for the Year-to-date ended September 30, 20212022 and 2020,2021, respectively, for Host Hotels & Resorts, L.P.; and (ix) Notes to Condensed Consolidated Financial Statements.

* Filed herewith.

† This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

5048


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

HOST HOTELS & RESORTS, INC.

November 5, 20214, 2022

 

 

/s/ Joseph C. Ottinger

 

 

 

Joseph C. Ottinger

Senior Vice President,

Corporate Controller


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

HOST HOTELS & RESORTS, L.P.

By: HOST HOTELS & RESORTS, INC., its general partner

November 5, 20214, 2022

 

 

/s/ Joseph C. Ottinger

 

 

 

Joseph C. Ottinger

Senior Vice President,

Corporate Controller of Host Hotels & Resorts, Inc.,

general partner of Host Hotels & Resorts, L.P.