BETHESDA, Md., Feb. 24, 2004 - Host Marriott
Corporation (NYSE: HMT), the nation's largest lodging real estate investment
trust (REIT), today announced results of operations for the fourth quarter
and for the year ended December 31, 2003. Fourth quarter and full
year results include the following:
-
Revenues were $1,092 million and $3,448 million for the fourth quarter
and full year 2003, respectively, as compared to $1,128 million and $3,516
million for the fourth quarter and full year 2002, respectively.
-
Net income was $150 million and $14 million for the fourth quarter and
full year 2003, respectively, as compared to a net loss of $3 million and
$16 million for the fourth quarter and full year 2002, respectively. Net
income for the 2003 fourth quarter includes a $24 million gain from the
cumulative effect of a change in accounting principle. See the consolidated
statements of operation.
-
Earnings (loss) per diluted share was $.46 and $(.07) for the fourth quarter
and full year 2003, respectively, as compared to a loss per diluted share
of $(.04) and $(.19) for the fourth quarter and full year 2002, respectively.
-
Funds from Operations (FFO) per diluted share, were $.53 and $.99 for the
fourth quarter and full year 2003, respectively, as compared to FFO per
diluted share of $.36 and $1.09 for the fourth quarter and full year 2002,
respectively.
-
Adjusted EBITDA, which is Earnings before Interest Expense, Income Taxes,
Depreciation, Amortization and other items, was $222 million and $709 million
for the fourth quarter and full year 2003, respectively, as compared to
$270 million and $851 million for the fourth quarter and full year 2002,
respectively.
-
Quarterly and full year results for 2003 were significantly affected by
several transactions, including the settlement of the insurance claims
for the New York Marriott World Trade Center hotel. As a result of
the settlement, the Company recorded a gain of approximately $212 million,
which is comprised of $156 million in post-2003 business interruption proceeds
and $56 million from the disposition of the hotel. A more detailed
presentation of the transactions significantly affecting the Company's
results for the 2003 fourth quarter and full year is presented in the tables
included in this press release.
FFO per diluted share and Adjusted EBITDA are non-GAAP financial measures
within the meaning of the rules of the Securities and Exchange Commission
(SEC). See the discussion included in this press release for information
regarding these non-GAAP financial measures.
Operating Results
Comparable hotel RevPAR for the fourth quarter decreased 1.0% and comparable
hotel operating profit margins declined two percentage points when compared
to the fourth quarter of 2002. The Company's fourth quarter comparable
hotel RevPAR decrease was the result of a slight decrease in both occupancy
and average room rate. Full year 2003 comparable hotel RevPAR declined
4.2% (comprised of a 1.9% decline in average room rate and a decrease in
occupancy of 1.6 percentage points), while comparable hotel operating profit
margins declined three percentage points as compared to full year 2002.
Christopher J. Nassetta, president and chief executive officer, stated,
"We were pleased to finish a demanding year with improving fourth quarter
trends. Our comparable hotel RevPAR results have steadily improved
since the second quarter, particularly for our downtown and urban properties,
which had a slight overall increase in comparable hotel RevPAR in the fourth
quarter. We expect further improvements to occur in 2004, as lodging
demand continues to strengthen."
Balance Sheet
Primarily as a result of the uncertain operating environment in 2003,
the Company focused on maximizing its liquidity and financial flexibility.
As of December 31, 2003, the Company had $764 million in cash and cash
equivalents and $250 million of availability under its credit facility.
During 2003, the Company completed the sale of eight non-core properties
for total proceeds of approximately $190 million. These sales, combined
with the insurance settlement proceeds of approximately $372 million from
the New York Marriott World Trade Center Hotel and New York Financial Center
Marriott, have enabled the Company to repay or redeem a total of approximately
$470 million of debt in 2003 and January 2004 ($208 million in 2003 and
$262 million in January 2004). The Company also completed the sale
of four additional properties during January 2004 for total proceeds of
approximately $80 million and expects to complete the sale of two additional
properties by the end of the first quarter. Proceeds from these sales
are expected to be used to repay debt, acquire new properties, or for other
corporate purposes. To the extent the proceeds are used to repay
debt, the Company expects to incur certain charges consisting of call premiums
and accelerated deferred financing costs.
W. Edward Walter, executive vice president and chief financial officer,
stated, "We aggressively managed our balance sheet in 2003, thereby reducing
our overall leverage and average interest rate, as well as increasing our
financial flexibility. These steps have positioned us to take advantage
of opportunities that may arise in the future, including acquiring assets
that fit our target profile. After the repayment of debt in January
2004, we have approximately $500 million in cash, a significant portion
of which has been designated for acquisitions and investments in our existing
portfolio."
2004 Outlook
The Company expects comparable hotel RevPAR for full year 2004 to increase
approximately 3% to 4%, with margins relatively unchanged from 2003. Based
upon this guidance, the Company estimates that for 2004 its:
-
diluted loss per common share should be approximately $.14 to $.12 for
the first quarter and $.35 to $.30 for the full year;
-
net loss should be approximately $34 million to $28 million for the first
quarter and $77 million to $63 million for the full year;
-
FFO per diluted share should be approximately $.10 to $.12 for the first
quarter and $.59 to $.64 for the full year (including $11 million, or $.03
per diluted share for the first quarter and $29 million, or $.09 per diluted
share for the full year related to charges for call premiums and accelerated
deferred financing costs for debt expected to be repaid) and
-
Adjusted EBITDA should be approximately $700 million to $715 million for
the full year.
Based on the taxable income generated by the New York Marriott World Trade
Center hotel insurance settlement, the Company expects to be able to pay
dividends on its preferred stock for the first three quarters of 2004.
It is unlikely, however, that the Company will pay a meaningful dividend
on its common shares in 2004. Although the Company has more than
adequate liquidity, payment of the fourth quarter dividend will depend
on, among other things, results of operations and limitations in the Company's
senior notes indenture and credit facility. The indenture and credit
facility restrict the payment of dividends when the Company's EBITDA to
interest coverage ratio is below 2.0 to 1.0, except to the extent required
to maintain our status as a REIT.
Mr. Nassetta noted, "We have seen a number of positive signs both in
the economy and in our business. We expect to take full advantage
of the recovery as the long term strength inherent in lodging industry
fundamentals begins to take effect. We believe that a disciplined
approach to capital allocation will continue to provide opportunities to
increase shareholder value now and in the future."
HOST MARRIOTT CORPORATION
Introductory Notes to Financial Information
The Company
Host Marriott Corporation, herein referred to as "we"
or "Host Marriott," is a self-managed and self-administered real estate
investment trust (REIT) that owns primarily hotel properties. We
conduct our operations as an umbrella partnership REIT through an operating
partnership, Host Marriott, L.P., or Host LP, of which we are the sole
general partner. For each share of our common stock, Host LP has
issued to us one unit of operating partnership interest, or OP Unit.
When distinguishing between Host Marriott and Host LP, the primary difference
is the 7% of the partnership interests in Host LP held by outside partners
as of December 31, 2003, which is reflected as minority interest in our
balance sheets and minority interest expense in our statements of operations.
Readers are encouraged to find further detail regarding our organizational
structure in our annual report on Form 10-K.
Reporting Periods for Hotel Operating Statistics and
Comparable Hotel
Results
The results we report are based on results of our hotels
reported to us by our hotel managers. Our hotel managers use different
reporting periods. Marriott International, Inc., the manager of the
majority of our properties, uses a year ending on the Friday closest to
December 31 and reports twelve weeks of operations for the first three
quarters and sixteen or seventeen weeks for the fourth quarter of the year
for its Marriott-managed hotels. In contrast, other managers of our
hotels, such as Hyatt, report results on a monthly basis. Host Marriott,
as a REIT, is required by tax laws to report results on a calendar year.
As a result, we elected to adopt the reporting periods used by Marriott
International modified so that our fiscal year always ends on December
31 to comply with REIT rules. Our first three quarters of operations
end on the same day as Marriott International but our fourth quarter ends
on December 31.
Two consequences of the reporting cycle we have adopted
are: (1) quarterly start dates will usually differ between years, except
for the first quarter which always commences on January 1, and (2) our
first and fourth quarters of operations and year-to-date operations may
not include the same number of days as reflected in prior years.
For example, the third quarter of 2003 ended on September 12 and the third
quarter of 2002 ended on September 6, though both quarters reflect twelve
weeks of operations. In contrast, fourth quarter results for 2003
reflected 110 days of operations, while our fourth quarter results for
2002 reflected 116 days of operations.
In contrast to the reporting periods for our statement
of operations, our hotel operating statistics (i.e., RevPAR, average daily
rate and average occupancy) and our comparable hotel results (comparable
hotel revenues, expenses and adjusted operating profit) are always reported
based on the reporting cycle used by Marriott International for our Marriott-managed
hotels. This facilitates year-to-year comparisons, as each reporting
period will be comprised of the same number of days of operations as in
the prior year (except in the case of fourth quarters comprised of seventeen
weeks, such as fiscal year 2002, versus sixteen weeks). This means,
however, that the reporting periods we use for hotel operating statistics
may differ slightly from the reporting periods used for our statements
of operations for the first and fourth quarters and the full year.
For the hotel operating statistics and comparable hotel results reported
herein:
-
Hotel results for fiscal year 2003 reflect 52 weeks of operations
for the period from January 4, 2003 to January 2, 2004 for our Marriott-managed
properties and results from January 1, 2003 to December 31, 2003 for operations
of all other hotels which report results on a monthly basis.
-
Hotel results for fiscal year 2002 reflect 53 weeks of operations
for the period from December 29, 2001 to January 3, 2003 for our Marriott-managed
hotels and results from January 1, 2002 to December 31, 2002 for operations
of all other hotels which report results on a monthly basis.
-
Hotel results for the fourth quarter of 2003 reflect 16 weeks
of operations for the period from September 13, 2003 to January 2, 2004
for our Marriott-managed hotels and results from September 1, 2003 to December
31, 2003 for operations of all other hotels which report results on a monthly
basis.
-
Hotel results for the fourth quarter of 2002 reflect 17 weeks
of operations for the period from September 7, 2002 to January 3, 2003
for our Marriott-managed hotels and results from September 1, 2002 to December
31, 2002 for operations of all other hotels which report results on a monthly
basis.
Comparable Hotel Operating Statistics
We present certain operating statistics (i.e., RevPAR,
average daily rate and average occupancy) and operating results (revenues,
expenses and adjusted operating profit) for the periods included in this
report on a comparable hotel basis. We define our comparable hotels
as full-service properties (i) that are owned or leased by us and the operations
of which are included in our consolidated results, whether as continuing
operations or discontinued operations, for the entirety of the reporting
periods being compared, and (ii) that have not sustained substantial property
damage or undergone large-scale capital projects during the reporting periods
being compared. For 2003 and 2002, we consider 112 of our portfolio
of 117 full-service hotels owned on December 31, 2003 to be comparable
hotels. The operating results of the following five hotels that we
owned as of December 31, 2003 are excluded from comparable hotel results
for these periods:
-
The New York Marriott Financial Center (substantially damaged
in the September 11, 2001 terrorist attacks and re-opened in January 2002);
-
The Ritz-Carlton, Naples Golf Resort (opened in January 2002);
-
The Boston Marriott Copley Place (acquired in June 2002);
-
The JW Marriott, Washington, D.C. (consolidated in our financial
statements beginning in the second quarter of 2003); and
-
The Hyatt Regency Maui Resort and Spa (acquired in November
2003).
In addition, the operating results of the eight hotels we
disposed of in 2003 and the one hotel we disposed of in 2002 are also not
included in comparable hotel results for the periods presented herein.
Moreover, because these statistics and operating results are for our full
service hotel properties, they exclude results for our non-hotel properties
and leased limited-service hotels.
Non-GAAP Financial Measures
Included in this press release are certain "non-GAAP financial
measures," which are measures of our historical or future financial performance
that are not calculated and presented in accordance with generally accepted
accounting principles, or GAAP, within the meaning of applicable SEC rules.
They are as follows: (i) Funds From Operations (FFO) per diluted share,
(ii) EBITDA, (iii) Adjusted EBITDA and (iv) Comparable Hotel Operating
Results. The following discussion defines these terms and presents why
we believe they are useful supplemental measures of our performance.
FFO per Diluted Share
We present FFO per diluted share as a non-GAAP measure
of our performance in addition to our earnings per share (calculated in
accordance with GAAP). We calculate FFO per diluted share for a given
operating period as our FFO (defined as set forth below) for such period
divided by the number of fully diluted shares outstanding during such period.
The National Association of Real Estate Investment Trusts (NAREIT) defines
FFO as net income (calculated in accordance with GAAP) excluding gains
(or losses) from sales of real estate, the cumulative effect of changes
in accounting principles, real estate-related depreciation and amortization
and after adjustments for unconsolidated partnerships and joint ventures.
We present FFO on a per share basis after making adjustments for the effects
of dilutive securities, including the payment of preferred stock dividends,
in accordance with NAREIT guidelines.
We believe that FFO per diluted share is a useful supplemental
measure of our operating performance and that the presentation of FFO per
diluted share, when combined with the primary GAAP presentation of earnings
per share, provides beneficial information to investors. By excluding
the effect of real estate depreciation, amortization and gains and losses
from sales of real estate, all of which are based on historical cost accounting
and which may be of limited significance in evaluating current performance,
we believe that such measure can facilitate comparisons of operating performance
between periods and with other REITs, even though FFO per diluted share
does not represent an amount that accrues directly to holders of our common
stock. Historical cost accounting for real estate assets implicitly
assumes that the value of real estate assets diminishes predictably over
time. As noted by NAREIT in its April 2002 "White Paper on Funds
from Operations," since real estate values have historically risen or fallen
with market conditions, many industry investors have considered presentation
of operating results for real estate companies that use historical cost
accounting to be insufficient by themselves. For these reasons, NAREIT
adopted the definition of FFO in order to promote an industry-wide measure
of REIT operating performance.
EBITDA
Earnings before Interest Expense, Income Taxes, Depreciation
and Amortization (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
and facilitates comparisons between us and other lodging REITs, hotel owners
who 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 per diluted share,
it is widely used by management in the annual budget process.
Adjusted EBITDA
Management has historically adjusted EBITDA when evaluating
our performance because we believe that the exclusion of certain additional
recurring and non-recurring items described below provides useful supplemental
information to investors regarding our ongoing operating performance and
that the presentation of Adjusted EBITDA, when combined with the primary
GAAP presentation of net income, is beneficial to an investor's complete
understanding of our operating performance. We adjust EBITDA for
the following items, which may occur in any period, and refer to this measure
as Adjusted EBITDA:
-
Gains and Losses on Dispositions and Related Debt Extinguishments
-- We exclude the effect of gains and losses recorded on the disposition
of assets in our consolidated statement of operations and the related debt
extinguishments because we believe that including them in EBITDA is not
consistent with reflecting the ongoing performance of our remaining assets.
In addition, material gains or losses from the depreciated value of the
assets disposed of and the related debt extinguishments could be less important
to investors given that the depreciated asset often does not reflect the
market value of real estate assets (as noted above for FFO).
-
Consolidated Partnership Adjustments -- We exclude the minority
interest in the income or loss of our consolidated partnerships as presented
in our consolidated statement of operations because we believe that including
these amounts in EBITDA does not reflect the effect of the minority interest
position on our performance because these amounts include our minority
partners' pro-rata portion of depreciation, amortization and interest expense.
However, we believe that the cash distributions paid to minority partners
are a more relevant measure of the effect of our minority partners' interest
on our performance, and we have deducted these cash distributions from
Adjusted EBITDA.
-
Equity Investment Adjustments -- We exclude the equity in
earnings (losses) of unconsolidated investments in partnerships and joint
ventures as presented in our consolidated statement of operations because
our percentage interest in the earnings (losses) does not reflect the impact
of our minority interest position on our performance and these amounts
include our pro-rata portion of depreciation, amortization and interest
expense. However, we believe that cash distributions we receive are a more
relevant measure of the performance of our investment and, therefore, we
include the cash distributed to us from these investments in the calculation
of Adjusted EBITDA.
-
Cumulative effect of a change in accounting principle --
Infrequently, the Financial Accounting Standards Board (FASB) promulgates
new accounting standards that require the statement of operations to reflect
the cumulative effect of a change in accounting principle. We exclude these
one-time adjustments because they do not reflect actual performance of
the company for that period.
-
Impairment Losses -- We exclude the effect of impairment
losses recorded because we believe that including them in EBITDA is not
consistent with reflecting the ongoing performance of our remaining assets.
In addition, we believe that impairment charges are similar to gains and
losses on dispositions and depreciation expense, both of which are also
excluded from EBITDA.
Limitations on the Use of FFO per Diluted Share, EBITDA and
Adjusted
EBITDA
We calculate FFO per diluted share, in accordance with
standards established by NAREIT, which may not be comparable to measures
calculated by other companies who do not use the NAREIT definition of FFO
or calculate FFO per diluted share in accordance with NAREIT guidance.
In addition, although FFO per diluted share is a useful measure when comparing
our results to other REITs, it may not be helpful to investors when comparing
us to non-REITs. EBITDA and Adjusted EBITDA, as presented, may also
not be comparable to measures calculated by other companies. This
information should not be considered as an alternative to net income, operating
profit, cash from operations, or any other operating performance measure
calculated in accordance with GAAP. Cash expenditures for various
long-term assets (such as renewal and replacement capital expenditures),
interest expense (for EBITDA and Adjusted EBITDA purposes only) and other
items have been and will be incurred and are not reflected in the EBITDA,
Adjusted EBITDA and FFO per diluted share presentations. 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 statement of operations
and cash flows include interest expense, capital expenditures, and other
excluded items, all of which should be considered when evaluating our performance,
as well as the usefulness of our non-GAAP financial measures. Additionally,
FFO per diluted share, EBITDA and Adjusted EBITDA should not be considered
as a measure of our liquidity or indicative of funds available to fund
our cash needs, including our ability to make cash distributions.
In addition, FFO per diluted share does not measure, and should not be
used as a measure of, amounts that accrue directly to shareholders' benefit.
Comparable Hotel Operating Results
We present certain operating results for our full-service
hotels, such as hotel revenues, expenses and adjusted operating profit,
on a comparable hotel, or "same store" basis as supplemental information
for investors. Our comparable hotel results present operating results
for full-service hotels owned during the entirety of the periods being
compared without giving effect to any acquisitions or dispositions, significant
property damage or large scale capital improvements incurred during these
periods. We present these comparable hotel operating results by eliminating
corporate-level costs and expenses related to our capital structure, as
well as depreciation and amortization. We eliminate corporate-level
costs and expenses to arrive at property-level results because we believe
property-level results provide investors with supplemental information
into the ongoing operating performance of our hotels and the effectiveness
of management in running our business on a property-level basis.
We eliminate depreciation and amortization, because even though depreciation
and amortization 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 have historically
risen or fallen with market conditions, many industry investors have considered
presentation of operating results for real estate companies that use historical
cost accounting to be insufficient by themselves.
As a result of the elimination of corporate-level costs
and expenses and depreciation and amortization, the comparable hotel operating
results we present do not represent our total revenues, expenses or operating
profit and these comparable hotel operating results 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.
We present these hotel operating results on a comparable
hotel basis because we believe that doing so provides investors and management
with useful information for evaluating the period-to-period performance
of our hotels and facilitates comparisons with other hotel REITs and hotel
owners. In particular, these measures assist management and investors
in distinguishing whether increases or decreases in revenues and/or expenses
are due to growth or decline of operations at comparable hotels (which
represent the vast majority of our portfolio) or from other factors, such
as the effect of acquisitions or dispositions. While management believes
that presentation of comparable hotel results is a "same store" supplemental
measure that provides useful information in evaluating the ongoing performance
of the company, this measure is not used to allocate resources or to assess
the operating performance of each of the hotels as these decisions are
based on data for individual hotels and are not based on comparable hotel
results. For these reasons, we believe that comparable hotel operating
results, when combined with the presentation of GAAP operating profit,
revenues and expenses, provide useful information to investors and management. |
HOST MARRIOTT CORPORATION
Consolidated Balance Sheets(a)
(unaudited, in millions, except share amounts)
December 31,
2003
2002
ASSETS
$7,085
$7,031
Property and equipment, net
73
-
Assets held for sale
54
53
Notes and other receivables
62
82
Due from managers
74
133
Investments in affiliates
364
552
Other assets
116
104
Restricted cash
764
361
Cash and cash equivalents
$8,592
$8,316
LIABILITIES AND SHAREHOLDERS'
EQUITY
Debt
$3,180
$3,247
Senior notes
2,205
2,289
Mortgage debt
101
102
Other
5,486
5,638
108
118
Accounts payable and accrued expenses
2
-
Liabilities associated with assets
held for sale
166
252
Other liabilities
5,762
6,008
Total liabilities
Interest of minority partners of Host
Marriott L.P.
130
131
Interest of minority partners of
other consolidated partnerships
89
92
Company-obligated mandatorily
redeemable convertible preferred
securities of a subsidiary whose
sole assets are convertible
subordinated debentures due
2026
("Convertible Preferred Securities")
475
475
Shareholders' equity
Cumulative redeemable
preferred stock
(liquidation preference
$354
million), 50 million
shares
authorized; 14.1
million shares
issued and outstanding
339
339
Common stock, par value
$.01, 750
million shares authorized;
320.3
million shares and
263.7 million
shares issued and
outstanding,
respectively
3
3
Additional paid-in capital
2,617
2,100
Accumulated other comprehensive
income (loss)
28
(2)
Deficit
(851)
(830)
Total shareholders'
equity
2,136
1,610
$8,592
$8,316
(a) Our consolidated balance sheet
as of December 31, 2003 has been prepared without audit. Certain information
and footnote disclosures normally included in financial statements presented
in accordance with GAAP have been omitted. The consolidated balance sheets
should be read in conjunction with the consolidated financial statements
and notes thereto included in the Annual Report on Form 10-K.
HOST MARRIOTT CORPORATION
Consolidated Statements of Operations(a)
(in millions, except per share amounts)
Quarter ended Year ended
December 31, December 31,
2003 2002 2003
2002
Revenues
Rooms
$622 $650 $2,014 $2,073
Food and beverage
369 372 1,095
1,096
Other
72 75
227 246
Total hotel sales
1,063 1,097 3,336
3,415
Rental income(b)
29 31
100 101
Other income
- -
12 -
Total revenues
1,092 1,128 3,448
3,516
Expenses
Rooms
159 160 508
508
Food and beverage
274 273 823
811
Hotel departmental expenses
290 291 934
905
Management fees
42 49
138 156
Other property-level expenses(b)
85 95
301 294
Depreciation and amortization
114 113 367
358
Corporate expenses and other
expenses 21
9 61
47
Total expenses
985 990 3,132
3,079
Operating profit
107 138 316
437
Interest income
4 6
11 20
Interest expense
(167) (146) (491)
(462)
Net gains on property transactions
1 2
5 5
Loss on foreign currency and
derivative contracts
(17) (1) (19)
(2)
Minority interest income (expense)
(16) 1
(5) (7)
Equity in losses of affiliates
(9) (3) (22)
(9)
Dividends on Convertible Preferred
Securities
(10) (10) (32)
(32)
Loss before income taxes
(107) (13) (237)
(50)
Benefit from (provision for) income
taxes
3 3
12 (4)
Loss from continuing operations
(104) (10) (225)
(54)
Income from discontinued operations(c)
230 7
239 38
Income (loss) before cumulative
effect of a change in accounting
principle
126 (3)
14 (16)
Cumulative effect of a change in
accounting principle(d)
24 -
- -
Net income (loss)
150 (3)
14 (16)
Less: dividends on preferred
stock (8)
(8) (35) (35)
Net income (loss) available to common
shareholders
$142 $(11) $(21)
$(51)
Basic and diluted earnings (loss)
per common share
$0.46 $(0.04) $(0.07) $(0.19)
(a) Our consolidated statements of
operations for the year ended December 31, 2003 and the quarter ended December
31, 2003 and 2002 have been prepared without audit. Certain information
and footnote disclosures normally included in financial statements presented
in accordance with GAAP have been omitted. The consolidated statements
of operations should be read in conjunction with the consolidated financial
statements and notes thereto included in our Annual Report on Form 10-K.
(b) Rental income and expense for
the quarter ended and years ended
December 31,
2003 and 2002 are as follows:
Quarter ended Year ended
December December December December
31, 31, 31,
31,
2003 2002 2003
2002
Rental income
$5 $5
$25 $24
Full-service
24 26
75 77
Limited service and office
buildings $29 $31
$100 $101
Rental and other expenses (included
in other property-level expenses)
$2 $2
$7 $7
Full-service
24 23
74 73
Limited service and office
buildings $26 $25
$81 $80
(c) Reflects the results of operations
and gain (loss) on sale, net of the related income tax, for eight properties
disposed of during 2003 and one in 2002, five properties classified as
held for sale as of December 31, 2003 and the business interruption proceeds,
net of expenses, for the New York Marriott World Trade Center hotel for
2003, as well as the gain recorded from the settlement of insurance claims
for the hotel of approximately $212 million. This gain is comprised of
$156 million in post-2003 business interruption proceeds and $56 million
from the disposition of the hotel.
(d) We adopted Statement of Financial
Accounting Standards No. 150, "Accounting for Certain Financial Instruments
with Characteristics of Both Liabilities and Equity," or SFAS 150, as of
the beginning of our quarter ended September 12, 2003 as required by the
pronouncement. On October 8, 2003, the Financial Accounting Standards
Board (FASB) issued guidance with respect to SFAS 150 that issuers whose
financial statements include consolidated ventures with finite lives should
reflect any minority interests in such consolidated ventures as a liability
on the issuer's financial statements presented at its fair value as of
the applicable balance sheet date. Under SFAS 150, any fluctuation in the
fair value of the minority interest from period to period would be recorded
on the issuer's financial statements as interest expense for the change
in the fair value of the liability. As a result of applying SFAS 150 in
accordance with this guidance from the FASB, we recorded a loss from a
cumulative effect of a change in accounting principle of $24 million in
our third quarter Form 10-Q. Additionally, we included minority interests
with a fair value of $112 million in our liabilities as of September 12,
2003.
On November
7, 2003, the FASB issued a FASB Staff Position (FSP) 150-3 indefinitely
deferring the application of a portion of SFAS 150 with respect to minority
interests in consolidated ventures entered into prior to November 5, 2003
effectively reversing its guidance of October 8, 2003. In accordance with
FSP 150-3, we recorded a cumulative effect of a change in accounting principle
reversing the impact of our adoption of SFAS 150 with respect to consolidated
ventures with finite lives in the fourth quarter of 2003.
HOST MARRIOTT CORPORATION
Earnings (Loss) per Common Share (unaudited, in millions, except per share
amount)
Quarter ended
Quarter ended
December 31, 2003
December 31, 2002
Income
Income
(Loss) Shares Per
(Loss) Shares Per
(Numer- (Denomi- Share (Numer-
(Denomi- Share
ator) nator) Amount
ator) nator) Amount
Net income
(loss)(a)
$150 310.7 $0.48
$(3) 263.6 $(0.01) Dividends on preferred stock
(8) -
(0.02) (8)
- (0.03)
Basic and diluted
earnings (loss)
available to common
shareholders per
share(b)
$142 310.7 $0.46
$(11) 263.6 $(0.04)
Year ended
Year ended
December 31, 2003
December 31, 2002
Income
Income
(Loss) Shares Per
(Loss) Shares Per
(Numer- (Denomi- Share (Numer-
(Denomi- Share
ator) nator) Amount
ator) nator) Amount
Net income
(loss)(a)
$14 281.0 $0.05
$(16) 263.0 $(0.06) Dividends on preferred stock
(35) -
(0.12) (35)
- (0.13)
Basic and diluted
earnings (loss)
available to common
shareholders per
share(b)
$(21) 281.0 $(0.07)
$(51) 263.0 $(0.19)
(a) Our results for the fourth quarter
of 2003 and for full-year 2003 were significantly affected by several items.
For a discussion of these items, see footnote (c) to the table reconciling
net income available to common shareholders to FFO per diluted share included
in this release.
(b) Basic earnings (loss) per common
share is computed by dividing net income (loss) available to common shareholders
by the weighted average number of shares of common stock outstanding. Diluted
earnings (loss) per common share is computed by dividing net income (loss)
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, those preferred OP Units
held by minority partners, other minority interests that have the option
to convert their limited partnership interests to common OP Units and the
Convertible Preferred Securities. No effect is shown for any securities
that are anti-dilutive.
HOST
MARRIOTT CORPORATION
Hotel Operational Data
Comparable Hotels by Region(a)
(unaudited)
As of December 31, 2003
No. of
No. of
Properties Rooms
Pacific
22
11,526
Florida
11
7,047
Atlanta
15
6,563
Mid-Atlantic
9
6,222
South Central
9
5,700
North Central
15
5,395
DC Metro
11
4,296
Mountain
8
3,313
International
6
2,552
New England
6
2,274
All Regions
112
54,888
Quarter ended December 31, 2003
Average
Average Occupancy
Daily Rate Percentages RevPAR
Pacific
$143.59 65.7%
$94.27
Florida
147.86 65.0
96.13
Atlanta
138.12 62.3
86.06
Mid-Atlantic
197.10 76.5
150.87
South Central
128.14 73.0
93.57
North Central
126.37 64.6
81.61
DC Metro
150.43 67.2
101.09
Mountain
105.22 56.2
59.12
International
112.38 73.4
82.46
New England
127.12 63.0
80.09
All Regions
143.38 66.9
95.86
Quarter ended December 31, 2002
Average Average
Percent
Daily Occupancy Change
in
Rate Percentages RevPAR RevPAR
Pacific
$147.41 64.5% $95.09 -0.9%
Florida
147.01 65.6 96.42
(0.3)
Atlanta
136.00 62.9 85.57
0.6
Mid-Atlantic
196.74 76.5 150.48
0.3
South Central
133.38 74.4 99.27
(5.7)
North Central
125.24 66.5 83.26
(2.0)
DC Metro
146.59 66.3 97.17
4.0
Mountain
105.98 57.0 60.43
(2.2)
International
109.67 69.3 76.01
8.5
New England
131.51 71.1 93.54
(14.4)
All Regions
143.96 67.2 96.78
(1.0)
As of December 31, 2003
No. of
No. of
Properties Rooms
Pacific
22
11,526
Florida
11
7,047
Atlanta
15
6,563
Mid-Atlantic
9
6,222
South Central
9
5,700
North Central
15
5,395
DC Metro
11
4,296
Mountain
8
3,313
International
6
2,552
New England
6
2,274
All Regions
112
54,888
Year ended December 31, 2003
Average
Average Occupancy
Daily Rate Percentages RevPAR
Pacific
$146.12 68.0%
$99.29
Florida
155.59 69.5
108.11
Atlanta
134.29 65.2
87.58
Mid-Atlantic
178.89 74.5
133.27
South Central
128.11 75.1
96.25
North Central
121.81 66.4
80.88
DC Metro
146.07 70.5
102.91
Mountain
103.61 61.9
64.16
International
110.95 67.9
75.33
New England
122.83 62.3
76.47
All Regions
140.86 68.8
96.85
Year ended December 31, 2002
Average Average
Percent
Daily Occupancy Change
in
Rate Percentages RevPAR RevPAR
Pacific
$150.77 69.3% $104.42 -4.9%
Florida
153.37 70.3 107.88
0.2
Atlanta
138.70 66.4 92.03
(4.8)
Mid-Atlantic
186.41 76.7 143.05 (6.8)
South Central
132.39 77.2 102.16 (5.8)
North Central
120.89 67.8 82.00
(1.4)
DC Metro
144.29 69.6 100.42
2.5
Mountain
107.87 64.1 69.17
(7.3)
International
110.03 71.0 78.09
(3.5)
New England
129.97 69.3 90.02 (15.1)
All Regions
143.60 70.4 101.07 (4.2)
HOST MARRIOTT CORPORATION
Hotel Operational Data
All Full-Service Hotels by Region(a)
(unaudited)
As of December 31, 2003
No. of
No. of
Properties(b) Rooms(b)
Pacific
23
12,332
Florida
12
7,342
Atlanta
15
6,563
Mid-Atlantic
10
6,726
South Central
9
5,700
North Central
15
5,395
DC Metro
12
5,068
Mountain
8
3,313
International
6
2,552
New England
7
3,413
All Regions
117
58,404
Quarter ended December 31, 2003
Average
Average Occupancy
Daily Rate Percentages RevPAR
Pacific
$147.23 65.8%
$96.82
Florida
149.12 64.4
96.08
Atlanta
138.12 62.3
86.06
Mid-Atlantic
197.99 76.4
151.34
South Central
125.93 72.6
91.38
North Central
126.37 64.6
81.61
DC Metro
153.28 68.0
104.31
Mountain
105.22 56.2
59.12
International
112.38 73.4
82.46
New England
149.34 67.1
100.27
All Regions
145.84 67.1
97.88
Quarter ended December 31, 2002
Average Average
Percent
Daily Occupancy Change
in
Rate Percentages RevPAR RevPAR
Pacific
$146.04 64.6% $94.40 2.6%
Florida
145.41 64.6 93.93
2.3
Atlanta
136.00 62.9 85.57
0.6
Mid-Atlantic
197.74 76.4 151.07
0.2
South Central
129.08 73.9 95.43
(4.2)
North Central
125.24 66.5 83.26
(2.0)
DC Metro
141.88 66.1 93.74
11.3
Mountain
105.98 57.0 60.43
(2.2)
International
109.67 69.3 76.01
8.5
New England
151.95 71.6 108.85
(7.9)
All Regions
144.15 67.3 96.97
0.9
As of December 31, 2003
No. of
No. of
Properties(b) Rooms(b)
Pacific
23
12,332
Florida
12
7,342
Atlanta
15
6,563
Mid-Atlantic
10
6,726
South Central
9
5,700
North Central
15
5,395
DC Metro
12
5,068
Mountain
8
3,313
International
6
2,552
New England
7
3,413
All Regions
117
58,404
Year ended December 31, 2003
Average
Average Occupancy
Daily Rate Percentages RevPAR
Pacific
$147.11 68.0%
$100.02
Florida
155.97 69.0
107.56
Atlanta
134.29 65.2
87.58
Mid-Atlantic
180.11 74.3
133.85
South Central
124.93 75.0
93.76
North Central
121.81 66.4
80.88
DC Metro
145.09 71.1
103.13
Mountain
103.61 61.9
64.16
International | |
