Host Hotels & Resorts, Inc. Reports Results for 2021

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

BETHESDA, Md., Feb. 16, 2022 (GLOBE NEWSWIRE) — Host Hotels & Resorts, Inc. (NASDAQ: HST) (the “Company”), the nation’s largest lodging actual property funding belief (“REIT”), as we speak introduced outcomes for fourth quarter and full yr 2021.

Operating Results
(unaudited, in hundreds of thousands, besides per share and resort statistics)

* Additional element on the Company’s outcomes, together with knowledge for 22 home markets and prime 40 lodges by Total RevPAR, is offered within the Fourth Quarter 2021 Supplemental Financial Information out there on the Company’s web site at www.hosthotels.com.

James F. Risoleo, President and Chief Executive Officer, mentioned, “We finished 2021 on a high note as we continued to see strong sequential operating improvements across our portfolio. During the fourth quarter, RevPAR was approximately $148, representing a 13% increase over the prior quarter. While the newest variant created additional uncertainty for the lodging industry, it did not dampen the recovery, which continues to be concentrated in Sunbelt markets, particularly at our resorts. Our urban markets also saw strong sequential improvements, driven by business transient customers, where room nights improved over last quarter relative to 2019.”

^{__________________________________
(1) NAREIT Funds From Operations (“FFO”) per diluted share, Adjusted FFO per diluted share, EBITDAre, Adjusted EBITDAre and all owned resort outcomes (professional forma) are non-GAAP (U.S. usually accepted accounting ideas) monetary measures throughout the which means of the principles of the Securities and Exchange Commission (“SEC”). See the Notes to Financial Information on why the Company believes these supplemental measures are helpful, reconciliations to essentially the most instantly comparable GAAP measure, and the restrictions on the usage of these supplemental measures.
(2) Presentation contains comparisons to 2019 working outcomes with the intention to enable traders to higher perceive the trajectory and timing of any restoration from the COVID-19 impacts on resort operations.
N/M = Not Meaningful}

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

2021 HIGHLIGHTS:

• Achieved sequential improvement in RevPAR each quarter of 2021, from $68.04 in the first quarter to $148.46 in the fourth quarter. Improvements were primarily driven by leisure travel in Sunbelt markets with urban hotels showing sequential improvements in the second half of the year.
• Invested over $1.6 billion in seven hotels and two golf courses, the majority of which were in new markets for the Company, including Austin, Savannah, Key Largo and Big Sur.
• Completed the sale of six properties during the year for a total of $748 million.
• Completed Marriott Transformational Capital Program projects at three properties in 2021 and an additional two properties subsequent to year end, highlighted by multi-year guestroom, public space and meeting space renovations at the 1,966-room New York Marriott Marquis and the 2,004-room Orlando World Center Marriott. In addition, significant updates at The Ritz-Carlton, Amelia Island, Houston Marriott Medical Center, and Marina del Rey Marriott have concluded. These achievements bring the total number of completed projects in this program to 12 of 16 properties.
• Completed significant return on investment and development projects in 2021, including the addition of 19 new luxury villas at the Andaz Maui at Wailea Resort and a new waterpark at The Ritz-Carlton Golf Resort, Naples. Significant progress was made on the extensive transformational renovation and expansion at The Ritz-Carlton, Naples and on the redevelopment projects at the Orlando World Center Marriott.
• Refinanced $400 million of senior note debt, through the issuance of $450 million of Series J Senior Notes at 2.9%, the lowest rate in Company history, and repayment of the 3.75% Series D Senior Notes, extending the next significant debt maturity to 2024.
• Met the required financial covenant thresholds under the Company’s credit facility agreement and exited the covenant waiver period three quarters ahead of its scheduled expiration.

Results for Fourth Quarter 2021

• Generated GAAP net income of $323 million in the fourth quarter, an increase of $443 million from the third quarter of 2021, due to the gain of $302 million, primarily related to the sale of six assets, and improved operations.
• Achieved Adjusted EBITDAre of $242 million, which, after interest expense of $40 million, excluding costs related to refinancing, exceeded the Company’s capital expenditures, totaling $134 million for the quarter, by $68 million. The results benefited from continued positive quarterly sequential improvements in RevPAR and operations.
• Delivered All Owned Hotel Pro Forma EBITDA of $269 million, which included positive hotel-level operating profit at 70 of the Company’s hotels, an increase from 61 hotels in the third quarter of 2021.
• Acquired the 173-room Alida, Savannah in Georgia and the 319-room Hotel Van Zandt in Austin, Texas.
• Repaid $800 million on the revolver portion of the Company’s credit facility during the quarter, and repaid the remaining $683 million outstanding subsequent to year-end.

Subsequent Events

• Sold the Sheraton Boston for $233 million, which includes a $163 million bridge loan provided by the Company to the buyer, with an initial term of six months and two potential six month extensions.
• Acquired a 49% ownership interest in a joint venture with Noble Investment Group, a leading private hospitality asset manager, for $35 million of cash and the issuance of approximately $56 million of Host L.P. OP units.
• January RevPAR is estimated to be $105 and February RevPAR is forecast to be between $150 and $155.

BALANCE SHEET

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

• Total assets of $12.4 billion.
• Debt balance of $4.9 billion, with an average maturity of 5.1 years, an average interest rate of 3.1%, and no significant maturities until 2024. Following the credit facility revolver payment subsequent to year end, the debt balance is $4.2 billion.
• Ended the year with total available liquidity of approximately $1.8 billion, including FF&E escrow reserves of $144 million and approximately $812 million available under the revolver portion of the credit facility. Following the additional credit facility revolver repayment, completed subsequent to year end, the Company has $1.5 billion of availability under the credit facility.

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

DIVIDEND

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

OPERATING RESULTS

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

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

Fourth Quarter 2021 Revenue Performance

• All Owned Hotel Pro Forma RevPAR improved 13% compared to the third quarter of 2021, with average room rates exceeding fourth quarter 2019 rates. While strong leisure demand for resorts and hotels located in the Company’s Sunbelt markets and Hawaii continued to drive the sequential improvement, RevPAR at the Company’s downtown and non-resort hotels also saw improvement in the fourth quarter.
• Food and beverage pro forma revenues improved approximately $82 million, or 44%, compared to the third quarter of 2021, fueled by continued improvement in Banquet and Catering revenues, which increased 84% over the prior quarter, following the doubling of Banquet and Catering revenues from the second quarter to the third quarter. Throughout the pandemic, food and beverage revenues mostly has been driven by restaurants and other outlet revenue.

Fourth Quarter 2021 Hotel Operating Expense Performance

• Portfolio-wide pro forma hotel operating costs were approximately 24% lower compared to the fourth quarter of 2019, with a 25% decrease in total revenues compared to fourth quarter of 2019, and costs were only 15% higher compared to the third quarter of 2021, despite an approximately 20% increase in total revenues quarter over quarter.
  • Staffing challenges began to ease in the fourth quarter and the Company expects 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.
  • Re-introduction of marketing, maintenance and other support costs is expected to increase other departmental and support expenses as the recovery gains momentum.

HOTEL BUSINESS MIX UPDATE

The Company’s customers fall into three broad groups: transient, group and contract business, which accounted for approximately 61%, 35%, and 4%, respectively, of its 2019 room sales.

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

CAPITAL ALLOCATION STRATEGY

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

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

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

CAPITAL EXPENDITURES

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

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

2022 OUTLOOK

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

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

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

The Company does not intend to provide further guidance updates unless deemed appropriate.

ABOUT HOST HOTELS & RESORTS

Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The Company currently owns 75 properties in the United States and five properties internationally totaling approximately 44,400 rooms. The Company also holds non-controlling interests in seven domestic and one international joint ventures. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott^®, Ritz-Carlton^®, Westin^®, Sheraton^®, W^®, St. Regis^®, The Luxury Collection^®, Hyatt^®, Fairmont^®, Hilton^®, Four Seasons^®, Swissôtel^®, ibis^® and Novotel^®, as well as independent brands. For additional information, please visit the Company’s website at www.hosthotels.com.

Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements which include, but may not be limited to, our expectations regarding the impact of the COVID-19 pandemic on our business, the recovery of travel and the lodging industry and 2022 estimates with respect to our business, are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,” “predict,” “project,” “will,” “continue” and different comparable phrases and phrases, together with references to assumptions and forecasts of future outcomes. Forward-looking statements are usually not ensures of future efficiency and contain identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes to vary materially from these anticipated on the time the forward-looking statements are made. These dangers embody, however are usually not restricted to: the period and scope of the COVID-19 pandemic and its quick and longer-term influence on the demand for journey, transient and group business, and ranges of client confidence; actions governments, companies and people absorb response to the pandemic, together with limiting or banning journey or the scale of gatherings; the influence of the pandemic and actions taken in response to the pandemic on international and regional economies, journey, and financial exercise, together with the period and magnitude of its influence on unemployment charges, business funding and client discretionary spending; the tempo of restoration when the COVID-19 pandemic subsides; common financial uncertainty in U.S. markets the place we personal lodges and a worsening of financial circumstances or low ranges of financial development in these markets; the consequences of steps we and our resort managers take to cut back working prices in response to the COVID-19 pandemic; different modifications (aside from the COVID-19 pandemic) in nationwide and native financial and business circumstances and different elements akin to pure disasters and climate that may have an effect on occupancy charges at our lodges and the demand for resort services; the influence of geopolitical developments outdoors the U.S. on lodging demand; volatility in international monetary and credit score markets; working dangers related to the resort business; dangers and limitations in our working flexibility related to the extent of our indebtedness and our capacity to satisfy covenants in our debt agreements; dangers related to {our relationships} with property managers and three way partnership companions; our capacity to take care of our properties in a first-class method, together with assembly capital expenditure necessities; the consequences of resort renovations on our resort occupancy and monetary outcomes; our capacity to compete successfully in areas akin to entry, location, high quality of lodging and room charge constructions; dangers related to our capacity to finish acquisitions and develop new properties and the dangers that acquisitions and new developments might not carry out in accordance with our expectations; our capacity to proceed to fulfill complicated guidelines so as for us to stay a REIT for federal revenue tax functions; dangers related to our capacity to effectuate our dividend coverage, together with elements akin to working outcomes and the financial outlook influencing our board’s resolution whether or not to pay additional dividends at ranges beforehand disclosed or to make use of out there money to make particular dividends; and different dangers and uncertainties related to our business described within the Company’s annual report on Form 10-Okay, quarterly experiences on Form 10-Q and present experiences on Form 8-Okay filed with the SEC. Although the Company believes the expectations mirrored in such forward-looking statements are based mostly upon cheap assumptions, it may give no assurance that the expectations will probably be attained or that any deviation won’t be materials. All data on this launch is as of February 16, 2022 and the Company undertakes no obligation to replace any forward-looking assertion to adapt the assertion to precise outcomes or modifications within the Company’s expectations.

* This press launch comprises registered logos which are the unique property of their respective house owners. None of the house owners of those logos has any duty or legal responsibility for any data contained on this press launch.

*** Tables to Follow ***

Host Hotels & Resorts, Inc., herein known as “we,” “Host Inc.,” or the “Company,” is a self-managed and self-administered actual property funding belief that owns resort properties. We conduct our operations as an umbrella partnership REIT via an working partnership, Host Hotels & Resorts, L.P. (“Host LP”), of which we’re the only real common associate. When distinguishing between Host Inc. and Host LP, the first distinction is roughly 1% of the partnership pursuits in Host LP held by outdoors companions as of December 31, 2021, which is non-controlling pursuits in Host LP in our consolidated steadiness sheets and is included in web (revenue) loss attributable to non-controlling pursuits in our consolidated statements of operations. Readers are inspired to search out additional element relating to our organizational construction in our annual report on Form 10-Okay.

HOST HOTELS & RESORTS, INC.
Condensed Consolidated Balance Sheets
(unaudited, in hundreds of thousands, besides shares and per share quantities)

^{__________________________________
(1) Please see our Fourth Quarter 2021 Supplemental Financial Information for extra element on our debt balances and monetary covenant ratios beneath our credit score facility and senior notes indentures.}

HOST HOTELS & RESORTS, INC.
Condensed Consolidated Statements of Operations
(unaudited, in hundreds of thousands, besides per share quantities)

^{__________________________________
(1) Corporate and different bills embody the next objects:}

HOST HOTELS & RESORTS, INC.
Earnings (Loss) per Common Share
(unaudited, in hundreds of thousands, besides per share quantities)

^{__________________________________
(1) Dilutive securities might embody shares granted beneath complete inventory plans, most well-liked working partnership models (“OP Units”) held by minority companions and different non-controlling pursuits which have the choice to transform their restricted partnership pursuits to widespread OP Units. No impact is proven for any securities that had been anti-dilutive for the interval.}

HOST HOTELS & RESORTS, INC.
Hotel Operating Data for Consolidated Hotels ⁽¹⁾⁽²⁾

All Owned Hotels (professional forma) by Location Compared to 2020

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

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

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

^{__________________________________
(1) To facilitate a quarter-to-quarter comparability of our operations, we usually current sure working statistics and working outcomes for the durations included on this presentation on a comparable resort foundation. However, as a result of COVID-19 pandemic and its results on operations there’s little comparability between durations. For this cause, we quickly are suspending our comparable resort presentation and as a substitute current resort working outcomes for all consolidated lodges and, to facilitate comparisons between durations, we’re presenting outcomes on a professional forma foundation together with the next changes: (1) working outcomes are introduced for all consolidated properties owned as of December 31, 2021 however don’t embody the outcomes of operations for properties bought via the reporting date; and (2) working outcomes for acquisitions as of December 31, 2021 are mirrored for full calendar years, to incorporate outcomes for durations previous to our possession. For these lodges, for the reason that year-over-year comparability contains durations previous to our possession, the modifications won’t essentially correspond to modifications in our precise outcomes. See the Notes to Financial Information – All Owned Hotel Pro Forma Operating Statistics and Results for additional data on these professional forma statistics. The AC Hotel Scottsdale North is a brand new growth resort that opened in January 2021 and The Laura Hotel in Houston re-opened beneath new administration in November 2021. Therefore, no changes had been made for outcomes of those lodges for durations previous to their openings. Results for the resort bought subsequent to quarter finish are included, because it was owned for the whole lot of the durations introduced. CBD of a location refers back to the central business district.
(2) Hotel RevPAR is calculated as room revenues divided by the out there room nights. Hotel Total RevPAR is calculated by dividing the sum of rooms, meals and beverage and different revenues by the out there room nights.
N/M = Not significant}

HOST HOTELS & RESORTS, INC.
Schedule of All Owned Hotel Pro Forma Results ⁽¹⁾
(unaudited, in hundreds of thousands, besides resort statistics)