Host Hotels & Resorts, Inc. Reports Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2014; Revised Earnings Guidance for the Full Year of 2014
Jul 31 14
Host Hotels & Resorts, Inc. reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2014. For the quarter, the company reported total revenues of $1,431 million compared to $1,399 million a year ago. Operating profit was $225 million compared to $205 million a year ago. Income before income taxes was $174 million compared to $131 million a year ago. Income from continuing operations was $159 million or $0.21 per basic and diluted share compared to $116 million or $0.15 per basic and diluted share a year ago. Net income attributable to Host Inc. was $155 million or $0.21 per basic and diluted share compared to $119 million or $0.16 per basic and diluted share a year ago. Adjusted EBITDA was $411 million compared to $431 million a year ago. NAREIT FFO was $332 million or $0.43 per diluted share compared to $297 million or $0.39 per diluted share a year ago. Adjusted FFO was $334 million or $0.43 per diluted share compared to $342 million or $0.45 per diluted share a year ago. Diluted NAREIT FFO was $339 million compared to $303 million a year ago. Diluted Adjusted FFO was $341 million compared to $348 million a year ago. The increase in net income for the second quarter of 2014 primarily reflects the improvement in operations and a decline in interest expense as a result of the refinancing or repayment of debt since the beginning of 2013. This quarter, the company invested over $90 million on a variety of projects that it believes will enhance the competitiveness and value of portfolio. Specifically, the company invested approximately $71 million on renewal and replacement projects, including the renovation of the Sheraton Boston 428-room south tower, in addition to 2,700 square feet of restaurant and public space of that hotel.
For the six months, the company reported total revenues of $2,740 million compared to $2,624 million a year ago. Operating profit was $359 million compared to $295 million a year ago. Income before income taxes was $355 million compared to $157 million a year ago. Income from continuing operations was $344 million or $0.44 per basic and diluted share compared to $150 million or $0.24 per basic and diluted share a year ago. Net income attributable to Host Inc. was $334 million or $0.44 per basic and diluted share compared to $175 million or $0.24 per basic and diluted share a year ago. Adjusted EBITDA was $719 million compared to $714 million a year ago. NAREIT FFO was $579 million or $0.75 per diluted share compared to $514 million or $0.68 per diluted share a year ago. Adjusted FFO was $585 million or $0.76 per diluted share compared to $549 million or $0.73 per diluted share a year ago. Diluted NAREIT FFO was $592 million compared to $527 million a year ago. Diluted Adjusted FFO was $598 million compared to $562 million a year ago. Net income also benefited from $108 million of net gains on property sales. The strong results were driven by several factors: first, through the quarter, portfolio achieved a cycle-high occupancy level of 81%, which allowed hotels to drive rate increases exceeding 4%, resulting in an improvement in comparable hotel RevPAR on a constant currency basis of 5.1%. The company spent over $180 million on properties, resulting in improvements to 2,800 guestrooms, over 100,000 square feet of meeting space and 60,000 square feet of public space. Of that amount, $147 was spent on renewal and replacement CapEx, $7 million on acquisition CapEx and $29 million on ROI investments.
For the full year 2014, the company forecasts net income of $515 million to $538 million, interest expense of $219 million, depreciation and amortization of $691 million, income taxes of $24 million to $26 million, EBITDA of $1,449 million to $1,474 million, adjusted EBITDA of $1,380 million to $1,405 million, NAREIT FFO of $1,102 million to $1,125 million, adjusted FFO of $1,108 million to $1,131 million, diluted NAREIT FFO of $1,129 million to $1,152 million, diluted Adjusted FFO of $1,135 million to $1,158 million, EPS of $0.67 to $0.70, NAREIT FFO per diluted share of $1.44 to $1.46, adjusted FFO per diluted share of $1.44 to $1.47. The midpoint of this updated guidance reflects a $12.5 million increase in adjusted EBITDA and a $0.02 increase in FFO per share compared to prior guidance. The company expects operating profit of $635 million to $629 million. For the full year, the company expects to spend $330 million to $350 million on renewal and replacement CapEx, $25 million to $30 million on acquisition CapEx, and most importantly, $65 million to $75 million on redevelopment and ROI CapEx. The company expects comparable hotel RevPAR for the full year will increase between 5.75% and 6.25%, and adjusted operating profit margin growth will range between 100 and 130 basis points.
Host Hotels & Resorts, Inc. Announces Dividend for the Third Quarter of 2014, Payable on October 15, 2014 ; Plans to Pay Special Dividend in the Fourth Quarter of 2014
Jul 31 14
Host Hotels & Resorts, Inc. announced that on July 31, 2014, the Board of Directors authorized a regular quarterly cash dividend of $0.20 per share on its common stock for the third quarter. The dividend will be paid on October 15, 2014 to stockholders of record on September 30, 2014. The third quarter dividend is a 33% increase over the prior quarter and represents the Company's intended regular quarterly dividend for the next several quarters, subject to Board approval.
The Company may also pay a special dividend in the fourth quarter so that its annual distribution equates to its taxable income.
Host Hotels & Resorts Seeks Acquisitions
Jul 31 14
Host Hotels & Resorts, Inc. (NYSE:HST) is seeking acquisitions. Ed Walter, President and Chief Executive Officer of Host Hotels & Resorts, said, "On the acquisition front, we continue to look for opportunities to increase our investment in our target markets. We do have an active pipeline at this juncture and expect to complete additional transactions before year-end. However, given that the timing and certainty of these transactions is difficult to predict we have not included any additional acquisitions in our forecast." Greg Larson, Chief Financial Officer of Host Hotels & Resorts, said, "We intend to use available cash predominantly for acquisitions or other investments in our portfolio to the extent that we are unable to find appropriate investment, we may elect in the future to use available cash for other uses such as a special dividend, which would be in excess for taxable income."