February 27, 2002 - Host Marriott Corporation , the nation�s largest
hotel real estate investment trust (REIT), today announced results of operations
for the fourth quarter and for the year ended December 31, 2001. Operating
results for the fourth quarter and full year, which were impacted by a
sluggish economy and significantly lower levels of travel nationwide following
the terrorist attacks on September 11th, include the following:
-
Diluted earnings (loss) per share was $(.12) and $.08 for the fourth quarter
and full year 2001, respectively, versus $1.14 and $.63 for the quarter
and the full year 2000, respectively.
-
Total revenues were $1,049 million and $3,754 million for the fourth quarter
and full year 2001, respectively, versus $819 million and $1,407 million
for the quarter and the full year 2000, respectively. The Company�s results
in 2001 reflect hotel level sales while the results in 2000 primarily reflect
rental income.
-
Comparative Funds From Operations (�FFO�) were $.16 and $1.42 per diluted
share for the fourth quarter and year ended December 31, 2001, respectively
versus FFO of $.64 and $2.01 per diluted share for the quarter and year
ended December 31, 2000, respectively.
-
Earnings before Interest Expense, Income Taxes, Depreciation and Amortization
and other non-cash items (�EBITDA�) for 2001 was $217 million and $949
million for the fourth quarter and the full year 2001, respectively, versus
$349 million and $1,098 million for the quarter and the full year 2000,
respectively.
Operating Results
Comparable RevPAR for the fourth quarter declined 28.3% and operating
profit margins declined by 5.0 percentage points. The Company�s fourth
quarter RevPAR decline was driven by a 12.6% reduction in average room
rate and occupancy declines of 13.4 percentage points. It is important
to note that the Company�s fourth quarter began on September 8th, and therefore,
the reported results include the severely depressed environment in the
weeks immediately following the terrorist attacks. If the Company had reported
on a calendar year quarter, the comparable RevPAR decline would have been
22.7% and operating profit margins would be down approximately 3 percentage
points. Comparable RevPAR for the full year decreased 13% and operating
profit margins declined by 2.5 percentage points. The Company�s full year
RevPAR decline was driven by a 3.5% reduction in average room rate and
occupancy declines of 7.7 percentage points.
Mr. Christopher J. Nassetta, president and chief executive officer,
stated, �During the quarter we accelerated our year-long effort to improve
operating margins by working with our operators to control costs. As a
result of these efforts, our margins were better than anticipated and we
continue to see this positive trend in 2002. Although some of these savings
are not permanent, we believe that we have achieved meaningful long-term
efficiencies.�
Balance Sheet
During the fourth quarter the Company amended its bank credit facility
to ease certain restrictive covenants through August 2002. It also issued
$450 million of senior notes at a fixed interest rate of 9.5% maturing
in 2007. Additionally, in order to take advantage of low interest
rates, the Company entered into an interest rate swap agreement, effective
in January 2002, to convert the fixed rate of the senior notes to a floating
rate. The proceeds from the issuance of the senior notes were used to pay
down the majority of the amount outstanding under the bank credit facility.
The Company sold two of its non-core hotel properties for approximately
$65 million in December and used the proceeds to pay the remaining balance
outstanding under the bank credit facility, with the balance retained for
general corporate purposes. As of December 31, 2001, the Company had $352
million in cash on hand and no amounts outstanding on its bank credit facility.
As a result of the actions taken, the Company has no significant maturities
until 2005 and approximately 90% of the debt has a fixed rate of interest
with a weighted average interest rate of 8.2%. The Company intends to negotiate
a new long-term bank credit facility during 2002 that will be smaller but
more flexible than the existing agreement.
Mr. Robert Parsons, executive vice president and chief financial officer,
stated, �We are pleased with the progress we made in the fourth quarter
to increase our liquidity and strengthen our balance sheet. We believe
we have the financial flexibility to deal with the current economic uncertainties
and the ability to take advantage of opportunities as they arise.�
2002 Outlook
The Company guidance for RevPAR for full year 2002 is a range between
flat to down 4%. Based upon this guidance the Company estimates the following:
-
FFO per share for the full year should be in the range of $1.00 to $1.20;
and
-
EBITDA for the full year should be between ($830 and $910 million).
The Company policy on dividends generally has been to distribute the minimum
amount necessary to maintain REIT status. The Company will carefully review
its operating and taxable income on a quarterly basis and will reinstate
the dividend on the common stock when operations have improved sufficiently
so that the taxable income estimate supports such a payment. If RevPAR
is at the lower end of the range the Company does not believe that the
level of taxable income will require the Company to pay a common dividend
in 2002. It is likely that when the common dividend is reinstated, it will
be meaningfully lower than the level for the first three quarters of 2001.
The Company intends to continue to pay dividends on QUIPs and preferred
stock.
Mr. Nassetta added, �We are hopeful that the positive trends we have
seen thus far will continue for the rest of the year and into 2003. We
believe that the significant decline in supply for 2003 and the next several
years, matched with increasing demand from a strengthening economy, should
ultimately result in meaningful growth in RevPAR, earnings and shareholder
value.�
HOST MARRIOTT CORPORATION
Consolidated Balance Sheets
(a)
(unaudited, in millions)
December 31, December 31,
2001
2000
ASSETS
Property and equipment, net
$6,999
$7,110
Notes and other receivables
(including amounts due from
affiliates of $6 million and $164
million, respectively)
54
211
Due from Manager
141
--
Investments in affiliates
142
128
Other assets
536
509
Restricted cash
114
125
Cash and cash equivalents
352
313
$8,338
$8,396
LIABILITIES AND SHAREHOLDERS� EQUITY
Debt
Senior notes
$3,235
$2,790
Mortgage debt
2,261
2,275
Other
106
257
5,602
5,322
Accounts payable
and accrued expenses
121
381
Other liabilities
321
312
Total liabilities
6,044
6,015
Minority interest
210
485
Company-obligated mandatorily
redeemable convertible preferred
securities of a subsidiary whose
sole assets are the convertible
subordinated debentures due 2026
(�Convertible Preferred Securities�)
475
475
Shareholders� equity
Cumulative redeemable preferred stock
(liquidation preference $354
million), 50 million shares
authorized; 14.2 million shares and
8.2 million shares issued and
outstanding
339
196
Common stock, 750 million shares
authorized; 263.2 million shares and
221.3 million shares issued and
outstanding,
respectively
3
2
Additional paid-in
capital
2,051
1,824
Accumulated other
comprehensive loss
(5)
(1)
Retained deficit
(779)
(600)
Total shareholders�
equity
1,609
1,421
$8,338
$8,396
(a) Our consolidated balance sheets have been prepared
without audit. Certain information and footnote disclosures normally included
in financial statements presented in accordance with accounting principles
generally accepted in the United States have been omitted. The unaudited
consolidated balance sheets should be read in conjunction with the consolidated
financial statements and notes thereto included in our annual reports on
Form 10-K.
HOST MARRIOTT CORPORATION
Consolidated Statements of Operations
(a) (unaudited, in millions, except per share amounts)
Sixteen weeks ended
Year Ended
December 31,
December 31,
2001 2000
2001 2000
Revenues
Hotel sales
Rooms
$ 581 $
-- $ 2,219
$ --
Food and beverage 343
-- 1,125
--
Other
78 --
282 --
Total hotel
sales
1,002
-- 3,626
--
Rental
income (b) 45
812 126
1,398
Other
income
2
7 2
9
Total revenues 1,049
819 3,754
1,407
Expenses
Hotel operating
expenses
Rooms
152 --
541 --
Food and beverage 256
-- 843
--
Hotel departmental
costs and
deductions
277 --
946 --
Management fees and other
34 --
177 --
Other property-level
expenses
85 82
282 276
Depreciation and
amortization
112 107
378 331
Total hotel
operating costs
and expenses 916
189 3,167
607
Corporate
expenses 8
15 32
42
Lease repurchase
expense
-- 207
5 207
Other
expense
11 18
19 24
Operating profit
114 390
531 527
Minority interest
benefit (expense) 3
(98) (23)
(72)
Interest
income 11
14 36
40
Interest
expense (149)
(140) (460)
(433)
Net gains on
property
transactions
2
2 6
6
Equity in earnings
of affiliates
-- 20
3 25
Dividends on
convertible
preferred
securities of
subsidiary trust
(10) (10)
(32) (32)
Income (loss) before
income taxes
(29) 178
61 61
Benefit (provision)
for income taxes
7 105
(8) 98
Income (loss) before
extraordinary
items (22)
283 53
159
Extraordinary loss
(1) --
(2) (3)
Net income (loss)
$ (23) $ 283
$ 51 $
156
Less: preferred dividends
(9) (5)
(32) (20)
Add: gain on
repurchase of
Convertible
Preferred
Securities
--
1 --
5
Net income (loss)
available to common
shareholders
$ (32) $ 279
$ 19 $
141
Basic earnings (loss)
per common share
$(0.12) $ 1.26
$ 0.08 $ 0.64
Diluted earnings
(loss) per
common share
$(0.12) $ 1.14
$ 0.08 $ 0.63
(a) Our consolidated statements of operations have been
prepared without audit. Certain information and footnote disclosures
normally included in financial statements presented in accordance with
accounting principles generally accepted in the United States have been
omitted. The unaudited consolidated statements of operations should
be read in conjunction with the consolidated financial statements and notes
thereto included in our annual reports on Form 10-K.
As a result of acquiring certain leases from Crestline
Capital Corporation, effective January 1, 2001, and subsequently
acquiring four additional hotel leases, effective June 16, 2001,
Host LP leases 120 of its full-service hotels to its wholly-owned taxable
REIT subsidiary. Accordingly, our consolidated results of operations
for the year ended December 31, 2001 represent the gross hotel sales and
expenses from our properties rather than rental income from third party
lessees that we previously reported as revenues.
(b) The staff of the Securities & Exchange Commission
issued Staff Accounting Bulletin 101 �Revenue Recognition� (SAB 101) in
December 1999. SAB 101 discusses factors to consider in determining
when contingent revenue should be recognized during interim periods.
As of December 31, 2001 and 2000, our hotel sales reached the annual levels
under the leases for payment of percentage rent, and therefore, all previously
deferred rent was recognized. Accordingly, included in rental income
for the sixteen weeks ended December 31, 2001 and 2000 is $18 million and
$366 million, respectively, of previously deferred rent. SAB 101
has no effect on the full year results for the years ended December 31,
2001 and 2000.
HOST MARRIOTT CORPORATION
Reconciliation of Earnings per
Share
(a) (unaudited, in millions,
except per share amounts)
Sixteen weeks ended
Sixteen weeks ended
December 31, 2001
December 31, 2000
Income Shares Per Income
Shares Per
(Numer- (Denomin- Share (Numer- (Denomin-
Share
ator) ator) Amount ator)
ator) Amount
Net income (loss)
$(23) 263.0 $(.09) $283
221.0 $1.28
Dividends on preferred
stock
(9) -- (.03)
(5) -- (.02)
Gain on repurchase
of Convertible
Preferred Securities --
-- -- 1
-- --
Basic earnings (loss)
available to common
shareholders per share (32)
263.0 (0.12) 279 221.0
1.26
Assuming distribution
of common shares
granted under the
comprehensive stock
plan, less shares
assumed purchased
at average market
price
-- --
-- -- 4.0
(.02)
Assuming conversion
of minority OP Units outstanding (b)
(2) 21.7 --
80 63.1 --
Assuming conversion
of preferred
OP Units ©
-- --
-- 1
0.6 --
Assuming conversion of
minority OP Units issuable ©
-- --
-- 3
8.1 (.02)
Assuming conversion of
Convertible Preferred
Securities
-- --
-- 10 31.0
(.08)
Diluted earnings (loss)
per share
$(34) 284.7 $(0.12) $373
327.8 $1.14
Year ended
Year ended
December 31, 2001
December 31, 2000
Income Shares Per Income
Shares Per
(Numer- (Denomin- Share (Numer- (Denomin-
Share
ator) ator) Amount ator)
ator) Amount
Net income
$51 250.2 $.20 $156
220.8 $.71
Dividends on preferred
stock
(32) -- (.12)
(20) -- (.09)
Gain on repurchase of
Convertible Preferred
Securities
-- --
-- 5
-- .02
Basic earnings available
to common shareholders
per share
19 250.2 .08
141 220.8 .64
Assuming distribution
of common shares
granted under the
comprehensive stock
plan, less shares
assumed purchased
at average market
price
-- 4.1
-- -- 4.2
(.01)
Assuming conversion of
minority OP Units outstanding (b)
3 34.1 --
40 63.4 --
Assuming conversion
of preferred OP
Units ©
-- --
-- -- 0.6
--
Assuming conversion of
minority OP Units issuable ©
-- --
-- --
-- --
Assuming conversion of
Convertible Preferred
Securities
-- --
-- --
-- --
Diluted earnings
per share
$22 288.4 $.08 $181
289.0 $.63
(a) Basic earnings per common share is computed by dividing
net income (loss) adjusted for dividends on preferred stock and gain on
repurchases of Convertible Preferred Securities by the weighted average
number of shares of common stock outstanding. Diluted earnings per
share is computed by dividing net income (loss) adjusted for dividends
on preferred stock, gain on repurchases of Convertible Preferred Securities,
and potentially dilutive securities, by the weighted average number of
shares of common stock outstanding plus other potentially dilutive securities.
Dilutive securities may include shares granted under comprehensive stock
plans and the Convertible Preferred Securities. Dilutive securities
also include those common and preferred OP Units issuable or outstanding
that are held by minority partners which are assumed to be converted.
(b) OP Units are convertible to common stock, or cash,
at the option of Host REIT.
© Includes those minority partners that have the
option to convert their limited partnership interest or preferred OP Units
to common OP Units.
HOST MARRIOTT CORPORATION
COMPARATIVE FUNDS FROM OPERATIONS
(unaudited, in millions, except per share amounts)
Sixteen weeks ended Year ended
December December December December
31, 31, 31,
31,
2001 2000 2001
2000
Funds from Operations
Income (loss) before
extraordinary
items
$ (22) $ 283 $ 53
$ 159
Depreciation
and amortization
108 102 370
322
Other
real estate activities
(2) (1) (2)
(3)
Partnership
adjustments
(3) 87
32 61
Funds from operations
of Host LP
81 471 453
539
Effect on funds from operations
of SAB 101 (a)
(18) (366) --
--
Effective impact of
lease repurchase (e)
7 125
15 125
Tax benefit unrelated to
ongoing operations
(16) (30) (16)
(30)
Comparative funds from
operations
of Host LP
54 200 452
634
Dividends
on preferred stock
(9) (5) (32)
(20)
Comparative funds from operations of
Host LP available to common
unitholders
45 195 420
614
Comparative funds from operations of minority partners
of Host LP (b) (3)
(42) (50) (137)
Comparative funds from operations
available to common shareholders of
Host REIT
$ 42 $ 153 $ 370
$ 477
Comparative funds from
operations of Host REIT
per basic common share ©
$0.16 $0.69 $1.48
$2.16
Comparative funds from
operations of Host REIT
per diluted common share (d)
$0.16 $0.64 $1.42
$2.01
(a) Results for the sixteen weeks ended December 31,
2001 and 2000 areadjusted to reflect contingent rent which was previously
deferred under SAB 101. This adjustment reflects revenues based on
payment amounts calculated under our hotel leases.
(b) Host REIT holds approximately 92% and 78% of the
outstanding OP Units of Host LP at December 31, 2001 and December 31, 2000,
respectively. This adjustment reflects the comparative funds from
operations attributable to the minority partners of Host LP based on the
weighted average minority interest outstanding during the year.
© Comparative FFO per basic share is computed by
dividing comparative funds from operations available to common shareholders
by the weighted average number of shares of common stock outstanding.
(d) Diluted shares include a provision for the assumed
conversion of the minority limited partners� interest and preferred OP
Units in Host LP to our common shares. Additionally, the calculation
includes shares from the assumed conversion of those minority partners
of subsidiary partnerships of Host LP that have the option to convert their
limited partnership interests to OP units and a corresponding conversion
of those OP Units to common stock. Should the conversions of these
minority interests occur, we would then receive the additional cash flow
and the equity value from the acquired limited partnership interests.
(e) The 2001 and 2000 results have been adjusted to reflect
the non-recurring loss of $5 million and $207 million, respectively, and
the related benefit for income taxes of $2 million and $82 million, respectively,
associated with the lease repurchases. Additionally, as the amortization
of the tax benefit related to the lease repurchases effectively reduces
the current taxes paid, the results are adjusted to include the amortization
of the tax benefit related to the lease repurchases.
HOST MARRIOTT CORPORATION
RECONCILIATION OF
COMPARATIVE FUNDS FROM OPERATIONS
ON A PER SHARE BASIS (a)
(unaudited, in millions, except
per share basis)
Sixteen weeks ended Sixteen weeks ended
December 31, 2001 December
31, 2000
Income Shares Per
Income Shares Per
(Numer- (Denomin- Share (Numer- (Denomin- Share
ator) ator) Amount ator)
ator) Amount
Basic Comparative Funds
from Operations
available to common
shareholders
$42 263.0 $0.16
$153 221.0 $0.69
Assuming distribution of
common shares granted
under the comprehensive
stock plan, less shares
assumed purchased at
average market price --
3.1 --
-- 4.0 (.01)
Assuming conversion of
minority OP Units
outstanding (b)
3 21.7 --
42 63.1 --
Assuming conversion of preferred OP Units ©
-- --
-- --
0.6 --
Assuming conversion of
minority OP units
issuable ©
-- --
-- 4
8.1 (.01)
Assuming conversion of
Convertible Preferred
Securities
-- --
-- 10 31.0
(.03)
Diluted Comparative Funds
from Operations
$45 287.8 $0.16
$209 327.8 $0.64
Year ended December Year ended December
31, 2001
31, 2000
Income Shares Per
Income Shares Per
(Numer- (Denomin- Share (Numer- (Denomin- Share
ator) ator) Amount ator)
ator) Amount
Basic Comparative Funds
from Operations
available to common
shareholders
$370 250.2 $1.48
$477 220.8 $2.16
Assuming distribution
of common shares
granted under the
comprehensive stock
plan, less shares
assumed purchased at
average market price --
4.1 (0.02) --
4.2 (.04)
Assuming conversion of
minority OP Units
outstanding (b)
50 34.1 --
137 63.4 --
Assuming conversion of preferred OP Units ©
-- --
-- --
0.6 --
Assuming conversion of
minority OP units
issuable ©
-- --
-- 15
8.1 (.01)
Assuming conversion of
Convertible Preferred
Securities
32 30.9 (0.04)
32 31.0 (.10)
Diluted Comparative
Funds from Operations $452
319.3 $1.42 $661
328.1 $2.01
(a) Comparative FFO per basic share is computed by dividing
Comparative FFO available to common shareholders by the weighted average
number of shares of common stock outstanding. Comparative FFO per
diluted share is computed by dividing Comparative FFO available to common
shareholders, as adjusted for potentially dilutive securities, by the weighted
average number of shares of common stock outstanding plus other potentially
dilutive securities. Dilutive securities may include shares granted
under comprehensive stock plans and the Convertible Preferred Securities.
Dilutive securities also includes those common and preferred OP Units issuable
or outstanding that are held by minority partners which are assumed to
be converted.
(b) OP Units are convertible to common stock, or cash,
at the option of Host REIT.
© Includes those minority partners that have the
option to convert their limited partnership interest or preferred OP Units
to common OP Units.
HOST MARRIOTT CORPORATION
EBITDA (unaudited, in millions)
Sixteen weeks ended
Year ended
December December December December
31, 31, 31,
31,
2001 2000 2001
2000
EBITDA
Hotels
$241 $729 $959 $1,119
Office buildings and other
investments
3 8 14
13
Interest
income
11 14 36
40
Corporate
and other expenses
(20) (36) (60)
(74)
Effect
on revenue of SAB 101
(18) (366) --
--
EBITDA of Host LP
217 349 949
1,098
Distributions to minority interest
partners of
Host LP (a)
(6) (15) (41)
(55)
EBITDA of Host REIT
$211 $334 $908 $1,043
Sixteen weeks ended Year ended
December December December December
31, 31, 31,
31,
2001 2000 2001
2000
EBITDA
$211 $334 $908 $1,043
Effect
on revenue of SAB 101
18 366 --
--
Interest
expense
(149) (140) (460) (433)
Dividends on Convertible
Preferred Securities
(10) (10) (32)
(32)
Depreciation
and amortization (112)
(107) (378) (331)
Minority interest (expense)
benefit
3 (98) (23)
(72)
Income
tax benefit (expense)
7 105 (8)
98
Distributions to minority interest
partners of Host Marriott, L.P.
6 15 41
55
Lease
repurchase expense
-- (207) (5)
(207)
Other
non-cash changes, net
4 25 10
38
Income (loss) from operations
before extraordinary items
($22) $283 $53
$159
(a) Host REIT holds approximately 92% and 78% of the
outstanding OP Units of Host LP at December 31, 2001 and December 31, 2000,
respectively. The distributions to minority interest partners of
Host LP reflect cash distributions made during the year to minority holders
of OP Units and holders of certain preferred OP Units. These units
are convertible into cash or common stock of Host REIT at Host REIT�s option.
HOST MARRIOTT CORPORATION
EBITDA to Funds From Operations
Reconciliation
(unaudited, in millions)
Sixteen weeks ended
Year ended
December December
December December
31, 31,
31, 31,
2001 2000 2001
2000
EBITDA of Host REIT
$211 $334 $908
$1,043
Interest expense
(149) (140) (460)
(433)
Dividends on convertible preferred
securities
(10) (10) (32)
(32)
Dividends
on preferred stock
(9) (5)
(32) (20)
Income tax
benefit (expense)
7 105
(8) 98
Distributions to minority interest
partners
of Host LP (a)
6 15
41 55
Partnership
adjustments and other (11)
(104) 3
(97)
Comparative Funds From Operations of
Host LP available to common
unitholders
45 195
420 614 Comparative Funds From Operations
of minority partners of Host LP (b)
(3) (42) (50)
(137)
Comparative Funds From Operations
available to common shareholders of
Host REIT
$42 $153 $370
$477
(a) Host REIT holds approximately 92% and 78% of
the outstanding OP Units of Host LP at December 31, 2001 and December 31,
2000, respectively. The distributions to minority interest partners
of Host LP reflect cash distributions made during the year to minority
holders of OP Units and holders of certain preferred OP Units. These
units are convertible into cash or common stock of Host REIT at Host REIT�s
option.
(b) This adjustment reflects the comparative funds
from operations attributable to the minority interest partners of Host
LP.
HOST MARRIOTT CORPORATION
Other Financial Data
(unaudited, in millions, except
per share and ratio data)
December 31,
December 31,
2001
2000
Capitalization
Diluted common shares outstanding,
excluding Convertible Preferred
Securities (a)
298
297
Security pricing:
Share price-common (b)
$ 9.00
$ 12.94 Share price-Class A Preferred stock (b)
$ 24.91 $
25.50 Share price-Class B Preferred stock (b)
$ 24.91 $
24.44 Share price-Class C Preferred stock (b)
$ 25.00 $
--
Share price-Convertible
Preferred Securities (b)
$ 34.94 $
43.66
Total
enterprise value ©
$ 8,971 $
9,462
Equity
Common shares outstanding
263.2
221.3
Common OP Units
outstanding
284.7
284.9
Preferred OP Units
outstanding
.02
.02
Class A Preferred
shares outstanding
4.2
4.2
Class B Preferred
shares outstanding
4.0
4.0
Class C Preferred
shares outstanding
6.0
--
Dividends (per share)
Common
(d)
$ .78
$ .91
Class
A Preferred (e)
$ 2.50
$ 2.50
Class
B Preferred (e)
$ 2.50
$ 2.50
Class
C Preferred (e)
$ 1.91
$ --
Debt
Percentage
fixed rate (f)
98%
95%
Weighted
average rate
8.2%
8.2%
Weighted
average maturity
6.2 years 7.0 years
Line
of Credit, available balance (g) $
50 $
625
Line
of Credit, outstanding balance (g) $
-- $
150
Financial Ratios (h)
Interest coverage ratio
(EBITDA/cash interest expense) (i)
2.1x
2.6x
Ratio
of Earnings to Fixed Charges
1.2x
1.2x
Debt service coverage ratio
(EBITDA/(interest +
principal payments)) (i)
1.9x
2.4x
Debt as a percentage of
total enterprise value
62.4%
56%
(a) Includes the number of shares of common stock outstanding
plus shares granted under comprehensive stock plans and those common and
preferred OP Units issuable or outstanding that are held by minority partners
which potentially could be converted. Excludes potential shares of
30.9 million and 31.0 million in 2001 and 2000, respectively, from the
potential conversion of Convertible Preferred Securities.
(b) Share prices are the closing price on the balance
sheet date, as reported by the New York Stock Exchange for the common and
preferred stock. The shares of Convertible Preferred Securities are
not traded on an exchange. The per share price is the higher of the
buy or sell price as provided by the trading desk for Goldman Sachs in
New York, New York.
© Total enterprise value is calculated as the fair
value of our debt, plus outstanding shares of our preferred stock, diluted
common shares outstanding excluding Convertible Preferred Securities as
computed in footnote (a), and the Convertible Preferred Securities multiplied
by the closing stock prices on the balance sheet date. Total enterprise
value is based on a market price as of the balance sheet date and should
not be deemed to represent the fair market value of the company.
(d) During 2001, we declared quarterly dividends of $.26
per share. We did not declare a fourth quarter 2001 dividend as we
believe that we have already distributed the amount of taxable income necessary
for 2001 to qualify as a REIT. We declared total dividends of $.91
per share in 2000. The responsibility to declare dividends is the
sole responsibility of our board of directors.
(e) 2001 and 2000 dividends reflect quarterly cash dividends
of $.625 per share, or an annual dividend of $2.50 per share, for both
Class A and Class B Preferred Stock. 2001 dividends reflect the pro
rata dividend, based on the stated rate of 10% per annum on a liquidation
value of $25 per share for the Class C Preferred Stock, from the date of
issuance. On an annualized basis, the Class C Preferred Stock will
earn $2.50 per share.
(f) In order to take advantage of favorable interest
rates, the company entered into an interest rate swap agreement and will
begin paying a floating rate of interest effective January 15, 2002.
If the swap agreement had been effective as of December 31, 2001, the percentage
of fixed rate debt would have been 90%.
(g) The company has a bank credit facility which it entered
into in 1998 and subsequently modified in August 2000 and November 2001.
The original facility was for $1.25 billion and matured in three years.
In May 2000 the borrowing capacity under the facility was reduced to $775
million. The last modification to the facility was in November 2001,
which reduced the available capacity to $50 million through August 2002
and temporarily amended certain covenants as a result of the economic recession
and the events of September 11, 2001. Borrowings under the facility
bear interest currently at the Eurodollar rate plus 225 basis points.
As of December 31, 2001 there were no outstanding borrowings under the
facility.
(h) These ratios are intended to provide an investor
with an understanding of our ability to make interest and principal payments
on our current debt structure. The financial ratios are not calculated
in the same manner as required by the indentures for the senior notes and
the line of credit. Calculation of these ratios consistent with those
indentures would require, among other items, presentation of certain pro
forma financial information which has not been provided. In addition,
the coverage ratios have been calculated using EBITDA of Host LP.
(i) Cash interest is calculated as interest expense under
accounting principles generally accepted in the United States, less
amortization of deferred costs and other non-cash interest expense, plus
capitalized interest. |
HOST MARRIOTT CORPORATION
Hotel
Operational Data
Comparable Property Statistics
(unaudited)
Comparable by Region
As of December 31, Sixteen
weeks ended
2001
December 31, 2001
No. of No. of Average Average
Properties Rooms Daily Occupancy
(a)
Rate Percentages REVPAR(b)
Atlanta
15 6,542 $142.59
55.3% $78.92
DC Metro
13 4,995 142.23
60.8 86.42
Florida
11 4,878 136.43
60.2 82.17
International
4 1,636 96.82
64.6 62.58
Mid-Atlantic
9 6,221 186.63
72.9 135.99
Mountain
8 3,310 106.08
55.1 58.45
New England
6 2,279 137.33
60.2 82.72
North Central
15 5,394 126.30
59.7 75.40
Pacific
23 11,812 149.96
56.5 84.67
South Central
12 6,513 126.95
69.1 87.73
All
Regions 116
53,580 142.10 61.1
86.89
Sixteen weeks ended December 31, 2000
Average
Percent
Average Occupancy
Change in
Daily Rate Percentages REVPAR(b)
REVPAR
Atlanta
$151.81 69.3%
$105.17 (25.0)%
DC Metro
161.03 73.8
118.90 (27.3)
Florida
153.09 72.0
110.29 (25.5)
International
109.33 73.9
80.82 (22.6)
Mid-Atlantic
231.88 81.2
188.29 (27.8)
Mountain
114.01 70.8
80.69 (27.6)
New England
169.17 76.5
129.36 (36.1)
North Central
145.32 72.8
105.83 (28.8)
Pacific
173.18 75.7
131.14 (35.4)
South Central
138.71 76.5
106.12 (17.3)
All
Regions 162.63
74.5 121.19
(28.3)
Comparable by Region
As of December 31, Year ended December 31,
2001
2001
No. of No. of Average Average
Properties Rooms Daily Occupancy
(a)
Rate Percentages REVPAR(b)
Atlanta
15 6,542 $150.80
65.0% $98.02
DC Metro
13 4,995 150.67
67.9 102.26
Florida
11 4,878 160.52
71.7 115.15
International
4 1,636 102.04
71.8 73.28
Mid-Atlantic
9 6,221 189.43
77.5 146.77
Mountain
8 3,310 110.02
66.2 72.79
New England
6 2,279 144.62
66.2 95.78
North Central
15 5,394 131.20
66.9 87.80
Pacific
23 11,812 163.96
68.9 112.98
South Central
12 6,513 132.32
75.5 99.91
All
Regions 116
53,580 151.02 70.0
105.71
Year ended December 31, 2000
Average
Percent
Average Occupancy
Change in
Daily Rate Percentages REVPAR(b)
REVPAR
Atlanta
$151.11 72.7%
$109.82 (10.7)%
DC Metro
152.54 76.5
116.68 (12.4)
Florida
157.33 77.1
121.28 (5.1)
International
108.26 74.8
80.94 (9.5)
Mid-Atlantic
209.40 81.8
171.23 (14.3)
Mountain
114.25 74.1
84.64 (14.0)
New England
158.21 77.8
123.11 (22.2)
North Central
136.98 75.6
103.53 (15.2)
Pacific
169.60 80.7
136.83 (17.4)
South Central
133.97 78.9
105.71 (5.5)
All
Regions 156.50
77.7 121.55
(13.0)
HOST MARRIOTT CORPORATION
Hotel Operational Data Comparable
Property Statistics (cont.) (unaudited)
Other Portfolio Statistics
Year ended
Year ended
December 31, 2001
December 31, 2000
Average
Average Percent
No. of No. Average Occupancy
Average Occupancy Change
Proper- of Daily Percent- REVPAR Daily
Percent- REVPAR in
ties Rooms Rate ages
(b) Rate ages
(b) REVPAR
Ritz- Carlton© 9 3,536
$244.42 65.3% $159.69 $237.18 77.5% $183.93
(13.2)%
(a) Comparable properties consist of the 116 properties
owned, directly or indirectly, by us for the entire 2001 and 2000 fiscal
years, excluding nine hotels with non-comparable operating environments
as a result of acquisitions, dispositions, property damage, and expansion
and development projects.
(b) RevPAR represents room revenue per available room,
which measures daily room revenues generated on a per room basis, excluding
food and beverage revenues or other ancillary revenues generated by the
property.
© Includes nine Ritz-Carlton properties currently
owned by us for all periods presented.
HOST MARRIOTT CORPORATION
Hotel Operational Data
Property Statistics by Region
(All Properties)
(unaudited)
As of December 31,
Sixteen weeks ended
2001
December 31,2001
Average
No. of No. of Average
Occupancy
Properties Rooms Daily Rate(b) Percentages(b) REVPAR(b)
Atlanta
15 6,542 $142.59
55.3% $78.92
DC Metro
13 4,995 142.23
60.8 86.42
Florida
13 7,595 139.43
57.8 80.64
International
6 2,548 110.79
64.6 71.53
Mid-Atlantic
10 6,725 183.08
72.3 132.44
Mountain
8 3,310 105.84
54.4 57.56
New England
6 2,279 137.33
60.2 82.72
North Central
15 5,394 126.30
59.7 75.40
Pacific
23 11,812 149.96
56.5 84.67
South Central
13 7,185 125.26
67.8 84.93
All
Regions 122
58,385 141.49
60.7 85.94
As of December 31,
Sixteen weeks ended
2000
December 31,2000
Average
No. of No. of Average
Occupancy
Properties Rooms Daily Rate(a) Percentages(a) REVPAR(a)
Atlanta
15 6,542 $151.81
69.3% $105.17
DC Metro
13 4,995 161.03
73.8 118.90
Florida
13 7,595 154.40
70.1 108.25
International
4 1,636 109.33
73.9 80.82
Mid-Atlantic
12 7,945 232.11
82.1 190.51
Mountain
9 3,659 114.77
68.7 78.82
New England
6 2,279 169.17
76.5 129.36
North Central
15 5,394 145.32
72.8 105.83
Pacific
23 11,812 173.18
75.7 131.14
South Central
12 6,513 138.71
76.5 106.12
All
Regions 122
58,370 164.68
74.3 122.39
As of December 31,
Year ended
2001
December 31,2001
Average
No. of No. of Average
Occupancy
Properties Rooms Daily Rate(b) Percentages(b) REVPAR(b)
Atlanta
15 6,542 $150.80
65.0% $98.02
DC Metro
13 4,995 150.67
67.9 102.26
Florida
13 7,595 158.34
69.4 109.88
International
6 2,548 113.34
70.7 80.18
Mid-Atlantic
10 6,725 189.76
77.5 147.06
Mountain
8 3,310 113.03
65.8 74.35
New England
6 2,279 144.62
66.2 95.78
North Central
15 5,394 131.20
66.9 87.80
Pacific
23 11,812 163.96
68.9 112.98
South Central
13 7,185 130.81
74.9 97.97
All
Regions 122
58,385 151.68
69.9 105.96
As of December 31,
Year ended
2000
December 31,2000
Average
No. of No. of Average
Occupancy
Properties Rooms Daily Rate(a) Percentages(a) REVPAR(a)
Atlanta
15 6,542 $151.11
72.7% $109.82
DC Metro
13 4,995 152.54
76.5 116.68
Florida
13 7,595 154.87
75.3 116.55
International
4 1,636 108.26
74.8 80.94
Mid-Atlantic
12 7,945 210.87
82.6 174.27
Mountain
9 3,659 118.34
72.8 86.16
New England
6 2,279 158.21
77.8 123.11
North Central
15 5,394 136.98
75.6 103.53
Pacific
23 11,812 169.60
80.7 136.83
South Central
12 6,513 133.97
78.9 105.71
All
Regions 122
58,370 158.24
77.6 122.72
(a) The operating results include operations for the
Tampa Waterside Marriott, which opened February 19, 2000.
(b) The operating results include operations for the
New York World Trade Center Marriott which was destroyed on September 11,
2001, the Vail Marriott Mountain Resort and Pittsburgh City Center Marriott
which were sold in 2001, and the JW Marriott Mexico City Polanco, the Mexico
City Airport Marriott, and the St. Louis Marriott Pavilion from March 24,
2001, as a result of our acquisition of the voting interests in a previously
non-controlled subsidiary.
HOST MARRIOTT CORPORATION
Hotel Operational Data
Comparable Hotels (a)
(unaudited, in millions)
Sixteen weeks ended
Year ended
Dec. 31, Dec. 31, Dec. 31,
Dec. 31,
2001 2000
2001 2000
Number of hotels
(b)
116 116
116 116
Number of rooms
53,580 53,580
53,580 53,580
Percent change in
REVPAR (28.3)%
-- (13.0)%
--
Revenues ©
Room
$531 $740
$2,060 $2,370
Food and beverage
312 403
1,042 1,182
Other
69 82
255 272
Total hotel sales
912 1,225
3,357 3,824
Expenses ©
Room
136 174
498 553
Food and beverage
228 287
773 861
Other
37 40
130 135
Management fees, ground
rent
and other costs
299 378
1,089 1,191
Total operating
expenses 700
879 2,490
2,740
Operating profit
(d)
$212 $346
$867 $1,084
(a) The schedules of property-level results represent
the unaudited results of operations of our 116 comparable properties without
consideration of whether these properties are leased to outside parties.
In connection with the REIT conversion substantially all of these properties
were leased to Crestline Capital Corporation through December 31, 2000.
Hotel operators conduct the day-to-day management of the hotels pursuant
to management agreements. Additionally, the sales and expenses are
not subject to our system of internal accounting controls. We have
presented this information because we feel that it may be useful to investors
in determining the unleveraged economic value of our properties.
However, this should not be deemed to be a method for the calculation of
the market value of either Host REIT or the hotel properties. It
also does not represent the value at which we could sell the properties
on the open market. Additionally, our management and lease agreements
restrict our ability to sell properties without incurring significant fees
for termination of these agreements.
(b) Comparable properties consist of the 116 properties
owned, directly or indirectly, by us for the entire 2001 and 2000 fiscal
years, excluding nine hotels with non-comparable operating environments
as a result of acquisitions, dispositions, property damage, and expansion
and development projects.
© Hotel sales and expenses represent the unaudited
comparable gross hotel results, which includes room, food and beverage
and other hotel revenues and expenses generated by the properties.
Gross hotel sales and expenses are presented here to provide a means of
comparison of property-level results which investors may find useful.
However, these gross sales and expenses do not represent our reported results
of operations for the sixteen weeks and year ended December 31, 2000.
Our rental income under each lease, which represented results of operation
for 2000 as well as for five hotels in first and second quarters 2001 and
two hotels in third and fourth quarters 2001, is the greater of base or
percentage rent as defined in the lease agreements. Percentage rent
applicable to room, food and beverage, and other types of hotel revenue
varies by lease and is calculated by multiplying fixed percentages by the
total amount of such revenues over specified threshold amounts. Both
the minimum rents and the revenue thresholds used in computing percentage
rents are subject to annual adjustments based on increases in the United
States Consumer Price Index and the Labor Index, as defined in the lease
agreements.
(d) As stated above, these results represent comparable
property-level results and are not the revenues or operating profit of
Host REIT for all periods presented. Further, certain significant
cost items normally recorded under accounting principles generally accepted
in the United States including interest expense, lease payments, depreciation
and amortization have not been included in the calculation of property-level
profit. Additionally, the property-level profit does not reflect
our EBITDA reported herein or that of our lessee. |
Host Marriott is a lodging real estate company that currently owns or
holds controlling interests in 122 upscale and luxury hotel properties
primarily operated under premium brands, such as Marriott, Ritz-Carlton,
Hyatt, Four Seasons, and Hilton.
Certain matters discussed in this press release are forward-looking
statements within the meaning of federal securities regulations. All forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual transactions, results, performance or achievements
to be materially different from any future transactions, results, performance
or achievements expressed or implied by such forward-looking statements.
|
