Host Hotels & Resorts Reports Q1 2017 Net Income of $161 Million, a Decrease of $23 Million Compared to Q1 2016
May 1, 2017 8:16am
BETHESDA, Md., April 28, 2017-- Host Hotels & Resorts, Inc. (NYSE:HST) (“Host Hotels” or the “Company”), the nation’s largest lodging real estate investment trust (“REIT”), today announced results of operations for the first quarter of 2017.
James F. Risoleo, President and Chief Executive Officer of Host Hotels, stated: “We are pleased with our first quarter results and we continue to improve our geographically diverse portfolio of irreplaceable assets, with over $430 million of high-quality asset acquisitions during the quarter. By utilizing our scale, access to information, and industry-leading balance sheet, we added the Don CeSar and W Hollywood to our collection of properties. Both properties, without any adjustments for our value-add plans, are immediately in the top ten of our portfolio, based on their 2016 EBITDA results on a per room basis. Combined with our strategic sales of non-core assets, we believe this disciplined capital allocation activity will help us to continue to fulfill our mission of creating value for our stockholders.”
GAAP OPERATING PERFORMANCE
“We are pleased with the Company’s first quarter results, including strong RevPAR and food and beverage growth, which led to margin improvement that exceeded our expectations,“ said Gregory J. Larson, Executive Vice President and Chief Financial Officer. “We were also pleased with our execution on the $400 million Series G senior notes offering, which filled a gap in our maturity schedule and continued to demonstrate the strength and flexibility of our investment grade balance sheet.”
ADDITIONAL KEY COMPANY METRICS
Acquisitions and Dispositions
As previously announced, the Company acquired the Don CeSar and W Hollywood during the first quarter of 2017. These transactions coincided with formation of the Enterprise Analytics group, which the Company believes will be a key contributor in evaluating future investments to drive portfolio-wide improvement through leveraging technology and deep-dive analytics.
The Company also continued to strategically dispose of non-core assets where it expects lower growth and/or higher capital expenditures requirements. Subsequent to quarter end, the Company sold the Sheraton Memphis Downtown for $67 million and expects to record a gain of approximately $28 million in the second quarter. This is in addition to the sale of the JW Marriott Desert Springs Resort & Spa in the first quarter (as previously announced). The Company also is under contract to sell the Hilton Melbourne South Wharf, which it expects to close in the second quarter, subject to customary closing conditions. The sale of this property will represent the Company’s last hotel in Australia. For the three properties sold or under contract for sale in 2017, the combined average 2016 RevPAR was $134 compared to an average 2016 RevPAR for the two properties acquired in 2017 of $243.
Redevelopment and Return On Investment (“ROI”) Capital Projects
The Company deployed approximately $16 million in the first quarter on redevelopment and ROI capital expenditures.
For full-year 2017, the Company expects to invest a total of approximately $90 million to $115 million in redevelopment projects and ROI capital expenditures, which represents a reduction of approximately $125 million from 2016. Additional information regarding the Company’s capital projects can be found at www.hosthotels.com.
Renewal and Replacement Expenditures
The Company deployed approximately $64 million in the first quarter in renewal and replacement capital expenditures. Projects completed during the first quarter included the renovation of all 285 rooms at the San Francisco Marriott Fisherman’s Wharf and renovation of almost 43,000 square feet of meeting space at the Westfields Marriott Washington Dulles.
For 2017, the Company expects to invest a total of $275 million to $300 million in renewal and replacement capital expenditures.
The Company paid a regular quarterly cash dividend of $0.20 per share on its common stock on April 17, 2017 to stockholders of record as of March 31, 2017. All future dividends are subject to approval by the Company’s Board of Directors.
The Company’s strong balance sheet remains a key competitive advantage, providing flexibility to take advantage of investment opportunities throughout the lodging cycle. An important component of this strategy is the Company’s investment-grade rating on its long-term unsecured debt and its access to revolving credit facility and term loans, which represent almost all of the Company’s outstanding borrowings.
On March 20, 2017, the Company issued $400 million of Series G senior notes due April of 2024 at an interest rate of 3.875%. The proceeds were used to repay $250 million that had been drawn under the revolver portion of the credit facility earlier in the quarter and for general corporate purposes.
At March 31, 2017, the Company had approximately $411 million of unrestricted cash and $784 million of available capacity remaining under the revolver portion of its credit facility. Total debt as of March 31, 2017, was $4.0 billion, with an average maturity of 5.1 years and an average interest rate of 3.8%.
EUROPEAN JOINT VENTURE
The European joint venture’s comparable hotel RevPAR on a constant euro basis increased approximately 8.2% for the first quarter. The improvement was the result of a favorable comparison to the first quarter of 2016, which experienced the aftermath of the tragic terrorist attacks in Brussels and Paris, leading to an increase in occupancy of 470 basis points, combined with a slight increase to average room rate.
To view full financial release and corresponding tables please click the PDF icon or visit:
Tags: host hotels & resorts,
q1 2017 financial results
Host Hotels & Resorts, Inc. is an S&P 500 and Fortune 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 89 properties in the United States and 7 properties internationally totaling approximately 53,500 rooms. The Company also holds non-controlling interests in seven joint ventures, including one in Europe that owns 10 hotels with approximately 3,900 rooms. 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®, Le Méridien®, The Luxury Collection®, Hyatt®, Fairmont®, Hilton®, Swissôtel®, ibis®, Pullman®, and Novotel®, as well as independent brands in the operation of properties in over 50 major markets worldwide. For additional information, please visit the Company’s website at www.hosthotels.com.
Contact: Gregory J. Larson, Chief Financial Officer
Host Hotels & Resorts Appoints Michael D. Bluhm Executive Vice President and Chief Financial Officer to Succeed Gregory Larson Entering Retirement
FelCor Reports Q1 2017 Net Loss of $42.2 Million Compared to $11.2 Million for the Same Period in 2016; RevPAR Down 1.3% for Quarter
Chatham Lodging Trust Reports Net Income Increase of $1.3 Million to $4.6 Million Driven by 1.2% Increase in RevPAR and Higher Margins
RLJ Lodging Trust Sees Net Income Decrease to $21.8 Million in Q1 2017; RevPAR and Occupancy Decreased Slightly for Quarter
Marriott International Reports Q1 2017 Net Income of $365 Million, a 67% Increase Over 2016; RevPAR Rose 3.1% for the Quarter
DiamondRock Hospitality Reports Q1 2017 Net Income of $8.9 Million, Comparable RevPAR was $161.89, a 1.9% Increase
Ashford Trust Reports Q1 2017 Net Loss of $33.2 Million; Comparable RevPAR Increased 3.4% During the Quarter
IHG Reports Q1 2017 Global Comparable RevPAR Increased 2.7%; Enhanced Global Scale 3.4% by Opening 7K Rooms
Summit Hotel Properties Reports Q1 2017 Net Income of $28.9 Million Compared to $44.3 Million in Q1 2016
Ashford Prime Reports Reports First Quarter 2017 Net Loss of $1.7 Million; Comparable RevPAR for all Hotels Increased 2.5%
Hyatt Hotels Reports Q1 2017 Net Income Increased 104.8% to $70 Million; Comparable Systemwide RevPAR Increased 4.7%
Choice Hotels Reports Q1 2017 Net Income of $28.7 Million Compared to $21.2 Million Q1 2016
Park Hotels & Resorts Reports Q1 2017 Net Income of $2.4 Million; Comparable RevPAR Increased 1.4%
Sunstone Hotel Investors Reports a Q1 2017 Net Income Increase of 5,148.9% to $63.8 Million Due to Gain on Sale of Fairmont Newport Beach
Caesars Entertainment Reports Q1 2017 Net Revenues Increased 1.4% YOY to $963 Million and a Net Loss of $524 Million Compared to $274 Million Q1 2016
Ryman Hospitality Properties Reports Q1 2017 Net Income Increased 23.8% to $32.6 Million Compared to Q1 2016
Hilton Worldwide Completes its First Quarter as a Fee Driven Company Reporting Q1 2017 Net Income of $75 Million; System-Wide Comparable RevPAR Grew 3.0 Percent
Extended Stay America Reports Q1 2017 Net Income of $16.1 Million, an increase of 8.9%; Revenue Per Available Room Grew 2.1% to $45.76
MGM Resorts International Reports Q1 2017 Net Revenues Increase of 29% to $2.1 Billion at the Company's Domestic Resorts; Las Vegas Strip Resorts Grew RevPAR by 8.6%
Las Vegas Sands Reports Q1 2017 Consolidated Net Revenue Increase of 14.3% to $3.11 Billion; Net Income Increased 41.3% to $578 Million
Please login or register to post a comment.