Host Hotels & Resorts, Inc. (ticker: HST, exchange: New York Stock Exchange (.N))
News Release -
15-Oct-2003
Host Marriott Reports Results of Operations for Third Quarter 2003BETHESDA, Md., Oct 15, 2003 /PRNewswire-FirstCall via COMTEX/ -- Host Marriott Corporation
(NYSE: HMT), the nation's largest lodging real estate investment trust (REIT),
today announced results of operations for the third quarter of 2003. Third
quarter results include the following:
- Total revenue was $760 million and $2,422 million, respectively, for the
third quarter and year-to-date 2003 as compared to $777 million and
$2,463 million, respectively, for the same periods of 2002.
- Net loss was $88 million and $136 million, respectively, for the third
quarter and year-to-date 2003 as compared to $38 million and $13
million, respectively, for the third quarter and year-to-date 2002.
(The net loss includes the cumulative effect of a change in accounting
principle relating to SFAS No. 150, discussed on page 10, of $24 million
in the quarter and year-to-date 2003.)
- The Company's diluted loss per share was $.35 and $.61, respectively,
for the third quarter and year-to-date 2003 as compared to diluted loss
per share of $.18 and $.15, respectively, for the same periods of 2002.
- Funds From Operations, or FFO, per diluted share, was $.03 and $.40,
respectively, for the third quarter and year-to-date 2003 as compared to
$.14 and $.75 per diluted share, respectively, for the third quarter and
year-to-date 2002.
- Adjusted EBITDA, which is Earnings before Interest Expense, Income
Taxes, Depreciation, Amortization and other items, was $122 million and
$487 million, respectively, for the third quarter and year-to-date 2003
versus $153 million and $581 million, respectively, for the same periods
of 2002.
FFO per diluted share and Adjusted EBITDA are non-GAAP financial measures
within the meaning of the Securities and Exchange Commission, or SEC, rules.
See the discussion beginning on page 5 of this press release for additional
information on the use of these measures.
Operating Results
Comparable hotel RevPAR for the third quarter declined 2.5% as a result of
a 1.5% reduction in average room rate and an occupancy decline of 0.7
percentage points compared to the same period in 2002. Year-to-date
comparable hotel RevPAR declined 5.6% with a decline in room rate of 2.6% and
a decrease in occupancy of 2.2 percentage points compared to the same period
in 2002. The Company's earnings and FFO per diluted share include certain
unusual items described on page 22.
Christopher J. Nassetta, president and chief executive officer, stated,
"Our results for the third quarter were generally in line with expectations,
with RevPAR at the higher end of our range and margins at the lower end. Our
RevPAR results have clearly improved over the first half of the year. Further
improvement should occur in 2004, as lodging demand benefits from a
strengthening economy and levels of new supply continue to decline."
Acquisitions and Dispositions
The Company recently announced that it has signed an agreement to acquire
the 806-room Hyatt Regency Maui Resort and Spa, a premier luxury resort hotel
in Hawaii for $321 million, or $398,000 per room. In addition to increasing
the geographic diversity of the portfolio, the hotel benefits from extremely
high barriers to entry for new supply. The acquisition is consistent with
Host Marriott's strategy of acquiring high quality properties in difficult to
duplicate locations. The purchase is subject to customary closing conditions
and is expected to close by year-end.
"We are pleased with the pending acquisition of the Hyatt Regency Maui.
It will be the Company's first property in Hawaii, a market that should
continue to perform well. We are continuing to pursue additional acquisitions
that are consistent with our target profile of upscale and luxury properties
in markets with significant barriers to entry," said James F. Risoleo,
executive vice president, acquisitions and development.
Balance Sheet
As of September 12, 2003, the Company had $547 million in cash on hand and
$250 million of availability under its credit facility. The Company does not
believe that it will need to borrow under the credit facility for the
remainder of 2003.
During August 2003, the Company issued 27.5 million shares of common stock
for net proceeds of $251 million, which will be used to partially fund the
purchase of the Hyatt Regency Maui.
Also in August, the Company entered into two, four-year interest rate swap
agreements, which mature October 2007, effectively converting its $242 million
Series G senior notes to floating rate debt. The Company also redeemed $71
million of its Series A senior notes using the proceeds from the sale of three
non-core properties. In September, we refinanced the $95 million mortgage
debt secured by the JW Marriott Hotel in Washington, D.C. with an $88 million
floating-rate mortgage loan. The effect of these transactions is that the
Company's total fixed rate debt has been reduced from 90% to 84%.
W. Edward Walter, executive vice president and chief financial officer,
stated, "The combination of our equity issuance, which will facilitate the
acquisition of the Hyatt Regency Maui, the senior notes redemption, the swap
transaction and the mortgage refinancing have furthered our progress toward
reducing our leverage and adding flexibility to our balance sheet."
2003 Outlook
The Company's updated guidance for RevPAR for full year 2003 is for a
decline of approximately 4% to 5% and fourth quarter RevPAR of flat to down
2.5%. Based upon this guidance, the Company estimates the following for full
year 2003:
-
Diluted loss per share should be approximately $.75 to $.71;
- Net loss should be approximately $174 million to $160 million;
- FFO per diluted share should be approximately $.62 to $.66; and
- Adjusted EBITDA should be approximately $715 million to $730
million.
Although the Company has more than adequate liquidity, based upon the
current forecast, the Company believes that it is unlikely that a fourth
quarter 2003 dividend will be paid on its preferred or common shares due to
limitations in the Company's senior notes indenture and credit facility, both
of which restrict the Company's ability to pay dividends when the Company's
EBITDA to interest coverage ratio (as defined in our senior notes indenture)
is below 2.0 to 1.0.
This press release contains forward-looking statements within the meaning
of federal securities regulations. Forward-looking statements are not
guarantees of future performance and involve known and unknown risks,
uncertainties and other factors which may cause the actual results to differ
materially from those anticipated at the time the forward-looking statements
are made. These risks include, but are not limited to: national and local
economic and business conditions that will affect occupancy rates at our
hotels and the demand for hotel products and services; threats of terrorism
that affect travel patterns and demand for hotels; operating risks associated
with the hotel business; risks associated with the level of our indebtedness
and our ability to meet covenants in our debt agreements; relationships with
property managers; our ability to maintain our properties in a first-class
manner, including meeting capital expenditure requirements; our ability to
compete effectively in areas such as access, location, quality of
accommodations and room rate structures; changes in travel patterns, taxes and
government regulations which influence or determine wages, prices,
construction procedures and costs; and our ability to continue to satisfy
complex rules in order for us to qualify as a REIT for federal income tax
purposes. For further information regarding risks and uncertainties
associated with our business, please refer to the Company's filings with the
SEC. Although the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can give
no assurance that the expectations will be attained or that any deviation will
not be material. All information in this release is as of October 14, 2003
and the Company undertakes no obligation to update any forward-looking
statement to conform the statement to actual results or changes in the
Company's expectations.
Host Marriott is a Fortune 500 lodging real estate company which currently
owns or holds controlling interests in 120 upscale and luxury hotel properties
primarily operated under premium brands, such as Marriott, Ritz-Carlton,
Hyatt, Four Seasons and Hilton. For further information, please visit the
Company's website at www.hostmarriott.com.
HOST MARRIOTT CORPORATION
Introductory Notes to Financial Information
The Company
Host Marriott Corporation, herein referred to as we or Host Marriott, is
primarily the owner of hotel properties. We operate as a self-managed and
self-administered real estate investment trust, or REIT. 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 8% partnership interests
of Host LP held by outside partners as of September 12, 2003, which is
reflected as minority interest in our balance sheet and minority interest
expense in our statement of operations. Readers are encouraged to find
further detail regarding our organizational structure in our annual report on
Form 10-K.
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
different from measures 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 per diluted share, (ii)
EBITDA, (iii) Adjusted EBITDA and (iv) Comparable Hotel Results. The
following discussion defines these terms and presents why we believe they are
useful measures of our performance.
FFO per Diluted Share
The National Association of Real Estate Investment Trusts, or NAREIT,
defines Funds From Operations, or FFO, as net income (computed 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. FFO is presented on a per share basis after
making adjustments for the effects of dilutive securities. We use FFO per
diluted share as a measure of our performance because historical cost
accounting for real estate assets implicitly assumes that the value of real
estate assets diminishes predictably over time. However, because real estate
values have historically risen or fallen with market conditions, most industry
investors have considered presentation of operating results for real estate
companies that use historical cost accounting to be less informative. NAREIT
adopted the definition of FFO in order to promote an industry-wide standard
measure of REIT operating performance. Accordingly, as a member of NAREIT, we
have adopted FFO per share as a measure to evaluate our performance in
comparison to our peer group in NAREIT, substantially all of which use the
same measure. We believe that the presentation of FFO per diluted share
provides useful information to investors regarding our results of operations
because it is a better measure of our operating performance. In addition, it
facilitates comparisons between us and other REITs, including when making
investment decisions. FFO per diluted share is also used by the Compensation
Policy Committee of the Board of Directors to establish criteria for
performance-based compensation and in the annual budget process.
EBITDA
Earnings before Interest Expense, Income Taxes, Depreciation and
Amortization, or EBITDA, is a commonly used measure of performance in many
industries which management believes provides useful information to investors
regarding our results of operations. EBITDA 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 provide a
baseline when evaluating hotel results. Management also uses EBITDA 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 recurring items
described below is necessary to provide the most accurate measure of the
performance of our investment portfolio and to more fully reflect the ongoing
value of the company as a whole. We adjust EBITDA for the following items and
refer to this measure as Adjusted EBITDA:
- Gains and Losses on Dispositions and Related Debt Extinguishments -- We
exclude the effect of the gains and losses recorded on the disposition
of assets 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 because we
believe that including them in EBITDA does not reflect the impact of the
minority interest position on our performance because these amounts
effectively include our minority partners' pro-rata portion of
depreciation, amortization and interest expense, which are excluded from
EBITDA. However, we believe that the cash distributions paid to
minority partners is a more relevant measure of the effect of our
minority partner's interest on our performance, and we have included the
effect of these cash distributions in the calculation of Adjusted
EBITDA.
- Equity Investment Adjustments -- We exclude the equity in earnings
(losses) of unconsolidated investments in partnerships and joint
ventures because our percentage interest in the earnings (losses) does
not reflect the impact of our minority interest position on our
performance and these amounts effectively include our pro-rata portion
of depreciation, amortization and interest expense, which are excluded
from EBITDA. 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. As a result of our adoption
of SFAS No. 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity," or SFAS No. 150,
beginning in the third quarter of 2003, we have recorded a one-time
adjustment to show the cumulative effect of the change in fair value of
certain minority partner interests in our consolidated partnerships.
See page 11 for a further discussion of SFAS No. 150 and its effect on
the financial statements.
Limitations on the Use of FFO per Diluted Share, EBITDA and Adjusted
EBITDA
FFO per diluted share, as presented, may not be comparable to measures
calculated by other companies who do not use the NAREIT definition of FFO. 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 prescribed by 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 disclosure of our
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 Results
We present certain operating results and statistics 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, (ii) for which
we reported operating results throughout the reporting periods being compared,
and (iii) that have not sustained substantial property damage or undergone
large-scale capital projects during the reporting periods being compared. We
consider 116 of our portfolio of 120 full-service hotels to be comparable
hotels for the periods presented in this quarterly report. The operating
results of the following hotels that we own as of September 12, 2003 are
excluded from comparable hotel results:
-
the New York Financial Center Marriott (substantially damaged in the
September 11, 2001 terrorist attacks and re-opened in January 2002);
- the Boston Marriott Copley Place (acquired in June 2002);
- The Ritz-Carlton, Naples Golf Resort (opened in January 2002); and
- The JW Marriott, Washington, D.C. (consolidated in our financial
statements in the second quarter of 2003).
During 2003, we sold the Ontario Marriott, the Norfolk Waterside Marriott,
the Oklahoma City Waterford Marriott and the Palm Beach Gardens Marriott. For
this reason, the operating results of these hotels are also not included in
our comparable hotel results.
In addition to excluding non-comparable full-service properties, our
comparable hotel operating results reflect the following adjustments:
-
comparable hotel results exclude operating results for our non-hotel
properties and our leased limited-service hotels;
- the revenues and expenses at our comparable hotel properties have been
adjusted so that the comparable results include the same number of days
of operations between years (see Reporting Periods below); and
- we exclude depreciation and amortization and corporate and other
expenses from operating profit as presented in our statements of
operations.
We believe that the comparable hotel results are useful measures of our
performance that help us and our investors evaluate the ongoing operating
performance of our hotels and facilitate comparisons with other REITs and
hotel owners. Because the results are for comparable properties, they present
results without giving effect to any acquisitions or dispositions, significant
property damage or large scale capital improvements incurred during the
relevant periods. This allows management and investors to measure performance
of the full-service hotels we owned during the entirety of the periods being
compared. In addition, because the results exclude non-cash expenses and
corporate-level costs and expenses such as general administrative costs,
management believes they are a useful measure of the core performance of our
full-service hotel properties. For this reason, management also uses these
results for internal budgeting purposes and in making decisions on whether to
acquire or dispose of hotel properties.
While these measures are based on GAAP, costs such as depreciation and
amortization, income taxes, interest expense, corporate expenses, and other
corporate items have been incurred by us and are not reflected in this
presentation. As a result, the comparable hotel results do not represent our
total revenues, expenses or operating profit and these comparable hotel
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 statement of
operations includes such amounts, all of which should be considered by
investors when evaluating our performance.
Reporting Periods
Operating Results (as reported in our statement of operations). The
results we report in our statement of operations are based on results reported
to us by our hotel managers. These 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 each of the first three quarters and
sixteen or seventeen weeks for the fourth quarter of the year for our Marriott
branded hotels. In contrast, other managers of our hotels, such as Hyatt,
report results on a monthly basis. In addition, Host Marriott, as a REIT, is
required by tax laws to report results on the calendar year. As a result, we
elected to adopt the reporting periods used by Marriott International, but
have modified them 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, year-to-date
results through the third quarter of 2003 reflect results through September
12, 2003 and include 255 days of operations, while our year-to-date results as
of September 6, 2002 reflect 249 days of operations.
In addition, for results reported by hotel managers using a monthly
reporting period (approximately one-fourth of our full-service hotels), the
month of operation that ends after quarter-end is included in our results of
operations in the following fiscal quarter. For example, if our first quarter
ends March 15th, operations for the entire month of March for the hotel are
reported in our second fiscal quarter. Accordingly, our results of operations
include results from hotel managers reporting results on a monthly basis as
follows: first quarter (January, February), second quarter (March - May),
third quarter (June - August), and fourth quarter (September - December).
Hotel Operating Statistics. We use a measure common in the industry to
evaluate the operations of a hotel-room revenue per available room, or RevPAR.
RevPAR is defined as the product of the average daily room rate charged and
the average daily occupancy achieved. RevPAR does not include food and
beverage or other ancillary revenues such as parking, telephone, or other
guest services generated by the property. In contrast to the reporting
periods for our statement of operations, our hotel operating statistics (i.e.,
RevPAR, average daily rate and average occupancy) are always reported based on
the reporting cycle used by Marriott International. This facilitates year-to-
year comparisons of hotel results, 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 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
statement of operations for the first and fourth quarters where, as noted
above, we are required by the REIT tax laws to report results on the calendar
year. For the hotel operating statistics reported here:
-
hotel results for the quarters ended September 12, 2003 and September 6,
2002 reflect results for the twelve week periods from June 21, 2003 to
September 12, 2003 and June 15, 2002 to September 6, 2002, respectively,
for our Marriott-managed hotels and results for June, July and August
for operations of all other hotels which report results on a monthly
basis.
- hotel results for year-to-date September 12, 2003 and year-to-date
September 6, 2002 reflect results for the thirty six week periods (or
252 days) from January 4, 2003 to September 12, 2003 and December 29,
2001 to September 6, 2002, respectively, for our Marriott-managed hotels
and results for January through August for operations of all other
hotels which report results on a monthly basis.
HOST MARRIOTT CORPORATION
Consolidated Balance Sheets (a)
(unaudited, in millions, except share amounts)
September 12, December 31,
2003 2002
ASSETS
$6,954 $7,031
Property and equipment, net 54 53
Notes and other receivables 68 82
Due from managers 84 133
Investments in affiliates 491 523
Other assets 134 133
Restricted cash 547 361
Cash and cash equivalents $8,332 $8,316
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt
Senior notes $3,162 $3,247
Mortgage debt 2,317 2,289
Other 102 102
5,581 5,638
Accounts payable and accrued expenses 148 118
Minority interest liability(b) 112 --
Other liabilities 184 252
Total liabilities 6,025 6,008
Minority interests of Host Marriott, L.P. 111 131
Interest of minority partners of
other consolidated partnerships(b) 2 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; 295.7
million shares and 263.7 million
shares issued and outstanding,
respectively 3 3
Additional paid-in capital 2,363 2,100
Accumulated other comprehensive income (loss) 7 (2)
Deficit (993) (830)
Total shareholders' equity 1,719 1,610
$8,332 $8,316
(a) Our consolidated balance sheet as of September 12, 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 for the year ended
December 31, 2002.
(b) See footnote (d) to the Statements of Operations for detail.
HOST MARRIOTT CORPORATION
Consolidated Statements of Operations (a)
(unaudited, in millions, except per share amounts)
Quarter ended Year-to-date
Sept. 12, Sept. 6, Sept. 12, Sept. 6,
Revenues 2003 2002 2003 2002
Rooms $463 $473 $1,436 $1,467
Food and beverage 218 220 746 744
Other 49 64 157 182
Total hotel sales 730 757 2,339 2,393
Rental income(b) 20 20 71 70
Other income 10 -- 12 --
Total revenues 760 777 2,422 2,463
Operating Costs and Expenses
Rooms 124 123 360 359
Food and beverage 180 179 565 553
Hotel departmental expenses 224 221 664 635
Management fees 28 29 98 109
Other property-level expenses(b) 71 69 220 201
Depreciation and amortization 86 85 258 251
Corporate and other expenses 15 11 42 40
Total operating costs and expenses 728 717 2,207 2,148
Operating profit 32 60 215 315
Minority interest income (expense) 9 3 11 (8)
Interest income 2 7 7 14
Interest expense (109) (107) (327) (318)
Net gains on property transactions 1 1 4 3
Equity in losses of affiliates (4) (3) (13) (6)
Dividends on Convertible Preferred
Securities (7) (7) (22) (22)
Loss before income taxes (76) (46) (125) (22)
Benefit (provision) for income taxes 11 7 10 (8)
Loss from continuing operations (65) (39) (115) (30)
Income from discontinued
operations(c) 1 1 3 17
Loss before cumulative effect of a
change in accounting principle (64) (38) (112) (13)
Cumulative effect of adoption of
SFAS 150(d) (24) -- (24) --
Net loss (88) (38) (136) (13)
Less: dividends on preferred stock (9) (9) (27) (27)
Net loss available to common
shareholders $(97) $(47) $(163) $(40)
Basic and diluted loss per common
share $(0.35) $(0.18) $(0.61) $(0.15)
(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 GAAP 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 report on Form 10-K for the year
ended December 31, 2002.
(b) Rental income and expense are as follows:
Quarter ended Year-to-date
Sept. Sept. Sept. Sept.
12, 6, 12, 6,
2003 2002 2003 2002
Rental Income $3 $2 $20 $19
Full-service 17 18 51 51
Limited service and office buildings $20 $20 $71 $70
Rental and other expenses (included
in "Other property-level expenses") $2 $2 $5 $5
Full-service 17 17 50 50
Limited service and office buildings $19 $19 $55 $55
(c) Reflects the results of operations and gain (loss) on sale, net of
related income tax, for four properties disposed of during 2003 and
one in 2002.
(d) The FASB recently issued SFAS No. 150. This statement requires
issuers to classify as liabilities (or assets in some circumstances)
three classes of freestanding financial instruments that embody
obligations for the issuer. Previously, many such instruments had
been classified as equity. A freestanding financial instrument is an
instrument that is entered into separately and apart from any of the
entity's other financial instruments or equity transactions, or that
is entered into in conjunction with some other transaction and is
legally detachable and separately exercisable, such as certain put and
call options. These provisions are effective for financial
instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning
after June 15, 2003. As a result of further discussion by the FASB on
October 8, 2003, it was determined that any minority partners'
interest in consolidated partnerships with finite lives specified in
the related partnership agreements should be reclassified as a
liability and presented at the fair value as of the date of the
balance sheet unless the interests are convertible into equity of the
parent. The effect of this change is shown on our statements of
operations as a cumulative effect of a change in accounting principle.
The minority interest liability will be fair valued and the gains and
losses from changes in fair value of the liability are recorded in
interest expense in the current period (i.e., a change in the fair
value of our minority partners' equity in the partnership).
We did not enter into any financial instruments within the
scope of SFAS No. 150 during June 2003. However, as a result of
adopting SFAS No. 150 on July 1, 2003 for existing financial
instruments entered into on or before May 31, 2003, a cumulative
effect of change in accounting principle of $24 million was recorded
in the quarter. As of September 12, 2003, total liabilities include
$112 million of minority interest liabilities at their fair value.
HOST MARRIOTT CORPORATION
Loss per Common Share (a)
(unaudited, in millions, except per share amounts)
Quarter ended Quarter ended
September 12, 2003 September 6, 2002
Per Per
Income Share Income Share
(Loss) Shares Amount (Loss) Shares Amount
Net loss $(88) 275.6 $(0.32) $(38) 263.3 $(0.15)
Dividends on preferred stock (9) -- (0.03) (9) -- (0.03)
Basic and diluted loss
available to common
shareholders and basic and
diluted loss per common share $(97) 275.6 $(0.35) $(47) 263.3 $(0.18)
Year-to-date ended Year-to-date ended
September 12, 2003 September 6, 2002
Per Per
Income Share Income Share
(Loss) Shares Amount (Loss) Shares Amount
Net loss $(136) 268.1 $(0.51) $(13) 262.7 $(0.05)
Dividends on preferred stock (27) -- (0.10) (27) -- (0.10)
Basic and diluted loss
available to common
shareholders and basic and
diluted loss per common share $(163) 268.1 $(0.61) $(40) 262.7 $(0.15)
(a) Basic loss per common share is computed by dividing net loss available
to common shareholders by the weighted average number of shares of
common stock outstanding. Diluted loss per common share is computed
by dividing net loss available to common shareholders as adjusted for
dilutive securities, by the weighted average number of shares of
common stock outstanding plus other dilutive shares. 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 securities if they are anti-dilutive.
HOST MARRIOTT CORPORATION
Hotel Operational Data
Comparable Hotels by Region (a)
(unaudited)
As of September 12, 2003 Quarter ended September 12, 2003
Average
No. of No. of Average Occupancy
Properties Rooms Daily Rate Percentages RevPAR
Atlanta 15 6,563 $125.74 67.7% $85.14
DC Metro 12 4,593 141.73 73.7 104.41
Florida 12 7,303 123.35 65.7 81.04
International 6 2,552 114.22 67.5 77.11
Mid-Atlantic 9 6,222 163.66 75.4 123.43
Mountain 8 3,313 90.18 64.1 57.79
New England 6 2,277 120.28 66.4 79.89
North Central 15 5,395 122.02 73.6 89.83
Pacific 22 11,526 137.01 73.8 101.18
South Central 11 6,317 111.52 73.8 82.27
All Regions 116 56,061 129.03 71.0 91.62
Quarter ended September 6, 2002
Average Percent
Average Occupancy Change in
Daily Rate Percentages RevPAR RevPAR
Atlanta $128.93 66.0% $85.15 0.0%
DC Metro 137.54 73.3 100.80 3.6
Florida 119.94 64.8 77.70 4.3
International 111.15 76.5 85.02 (9.3)
Mid-Atlantic 175.98 75.4 132.66 (7.0)
Mountain 89.45 64.7 57.87 (0.1)
New England 132.24 76.3 100.92 (20.8)
North Central 120.53 73.8 88.91 1.0
Pacific 141.79 74.1 105.09 (3.7)
South Central 110.67 74.8 82.77 (0.6)
All Regions 130.99 71.7 93.92 (2.5)
As of September 12, 2003 Year-to-date September 12, 2003
Average
No. of No. of Average Occupancy
Properties Rooms Daily Rate Percentages RevPAR
Atlanta 15 6,563 $132.62 66.6% $88.29
DC Metro 12 4,593 142.31 71.8 102.21
Florida 12 7,303 157.2 71.5 112.39
International 6 2,552 110.19 65.3 71.96
Mid-Atlantic 9 6,222 170.33 73.6 125.32
Mountain 8 3,313 102.98 64.5 66.43
New England 6 2,277 120.79 61.9 74.77
North Central 15 5,395 119.82 67.2 80.55
Pacific 22 11,526 147.21 69.0 101.57
South Central 11 6,317 125.28 76.2 95.41
All Regions 116 56,061 139.02 69.7 96.90
Year-to-date September 6, 2002
Average Percent
Average Occupancy Change in
Daily Rate Percentages RevPAR RevPAR
Atlanta $139.90 68.0% $95.14 (7.2)%
DC Metro 141.33 71.0 100.39 1.8
Florida 154.74 72.5 112.19 0.2
International 110.20 71.8 79.10 (9.0)
Mid-Atlantic 181.52 76.9 139.51 (10.2)
Mountain 108.65 67.5 73.34 (9.4)
New England 129.19 68.4 88.31 (15.3)
North Central 118.88 68.5 81.41 (1.1)
Pacific 152.21 71.5 108.87 (6.7)
South Central 129.43 78.3 101.33 (5.8)
All Regions 142.71 71.9 102.63 (5.6)
HOST MARRIOTT CORPORATION
Hotel Operational Data
Comparable Ritz-Carlton Hotels (b)
(unaudited)
As of September 12, 2003 Quarter ended September 12, 2003
Average
No. of No. of Average Occupancy
Properties Rooms Daily Rate Percentages RevPAR
Ritz-Carlton 9 3,536 $ 201.96 66.6% $ 134.52
Quarter ended September 6, 2002
Average Percent
Average Occupancy Change in
Daily Rate Percentages RevPAR RevPAR
Ritz-Carlton $ 201.94 63.0% $ 127.20 5.8%
As of September 12, 2003 Year-to-date September 12, 2003
Average
No. of No. of Average Occupancy
Properties Rooms Daily Rate Percentages RevPAR
Ritz-Carlton 9 3,536 $ 229.38 65.9% $ 151.24
Year -to-date September 6, 2002
Average Percent
Average Occupancy Change in
Daily Rate Percentages RevPAR RevPAR
Ritz-Carlton $ 231.93 66.2% $ 153.63 (1.6)%
(a) See discussion of Comparable Hotel Results.
(b) Includes nine Ritz-Carlton properties owned by us for all periods
presented, excluding The Ritz-Carlton, Naples Golf Resort, which was
placed in service in January 2002.
HOST MARRIOTT CORPORATION
Hotel Operational Data
All Full Service Hotels by Region (a)
(unaudited)
As of September 12, 2003 Quarter ended September 12, 2003
Average
No. of No. of Average Occupancy
Properties(b) Rooms(b) Daily Rate Percentages RevPAR
Atlanta 15 6,563 $125.74 67.7% $85.14
DC Metro 13 5,365 144.07 75.0 108.11
Florida 13 7,598 122.98 64.8 79.72
International 6 2,552 114.22 67.5 77.11
Mid-Atlantic 10 6,726 164.24 75.0 123.19
Mountain 8 3,313 90.18 64.1 57.79
New England 7 3,416 135.95 72.3 98.27
North Central 15 5,395 122.02 73.6 89.83
Pacific 22 11,526 137.01 73.8 101.18
South Central 11 6,317 111.16 73.8 82.08
All Regions 120 58,771 130.54 72.3 92.97
Quarter ended September 6, 2002
Average Percent
Average Occupancy Change in
Daily Rate Percentages RevPAR(a) RevPAR
Atlanta $128.93 66.0% $85.15 0.0%
DC Metro 135.58 74.4 100.92 7.1
Florida 118.77 63.5 75.36 5.8
International 111.15 76.5 85.02 (9.3)
Mid-Atlantic 176.37 75.6 133.28 (7.6)
Mountain 89.45 64.7 57.87 (0.1)
New England 145.11 75.3 109.22 (10.0)
North Central 120.53 73.8 88.91 1.0
Pacific 140.58 74.0 104.08 (2.8)
South Central 109.99 74.8 82.26 (0.2)
All Regions 131.58 71.6 94.27 (1.4)
Year-to-date
As of September 12, 2003 September 12, 2003
Average
No. of No. of Average Occupancy
Properties(b) Rooms(b) Daily Rate Percentages RevPAR
Atlanta 15 6,563 $132.62 66.6% $88.29
DC Metro 13 5,365 141.49 72.5 102.58
Florida 13 7,598 158.70 70.9 112.59
International 6 2,552 110.19 65.3 71.96
Mid-Atlantic 10 6,726 171.69 73.4 125.96
Mountain 8 3,313 102.98 64.5 66.43
New England 7 3,416 139.13 67.7 94.19
North Central 15 5,395 119.82 67.2 80.55
Pacific 22 11,526 147.06 69.0 101.50
South Central 11 6,317 124.52 76.1 94.78
All Regions 120 58,771 140.23 69.9 98.07
Year-to-date September 6, 2002
Average Percent
Average Occupancy Change in
Daily Rate Percentages RevPAR(a) RevPAR
Atlanta $139.90 68.0% $95.14 (7.2)%
DC Metro 138.74 71.7 99.44 3.2
Florida 155.61 71.6 111.43 1.0
International 110.20 71.8 79.10 (9.0)
Mid-Atlantic 181.10 76.6 138.70 (9.2)
Mountain 108.62 67.5 73.32 (9.4)
New England 136.05 69.1 93.96 0.2
North Central 118.88 68.5 81.41 (1.1)
Pacific 150.89 71.6 108.03 (6.0)
South Central 128.21 77.7 99.68 (4.9)
All Regions 142.76 71.8 102.57 (4.4)
(a) See discussion of Reporting Periods on page 7.
(b) The number of properties and the room count reflect all consolidated
properties as of September 12, 2003. However, the operating statistics
include the results of operations for four hotels sold in 2003 and one
sold in 2002 prior to their disposition.
HOST MARRIOTT CORPORATION
Schedule of Comparable Hotel Results (a)
(unaudited, in millions)
Quarter ended Year-to-date
September September September September
12, 6, 12, 6,
2003 2002 2003 2002
Number of hotels 116 116 116 116
Number of rooms 56,061 56,061 56,061 56,061
Percent change in Comparable RevPAR (2.5)% (5.6)%
Operating profit margin under GAAP(b) 4.2% 7.7% 8.9% 12.8%
Comparable hotel operating profit
margin(c) 16.6% 19.1% 21.5% 24.9%
Comparable hotel sales
Room $439 $450 $1,360 $1,440
Food and beverage 211 213 713 736
Other 49 53 157 174
Comparable hotel sales(d) 699 716 2,230 2,350
Comparable hotel expenses
Room 119 117 341 350
Food and beverage 172 170 535 540
Other 32 32 95 99
Management fees, ground rent
and other costs 260 260 780 777
Comparable hotel expenses(e) 583 579 1,751 1,766
Comparable Hotel Operating Profit 116 137 479 584
Non-comparable hotel results, net(f) 7 7 23 10
Office building and limited service
properties, net -- 1 1 1
Business interruption insurance
proceeds -- 11 -- 11
Other income 10 -- 12 --
Depreciation and amortization (86) (85) (258) (251)
Corporate and other expenses (15) (11) (42) (40)
Operating Profit $32 $60 $215 $315
(a) See discussion of Comparable Hotel Results and Reporting Periods
beginning on page 6.
(b) Operating profit margin under GAAP is calculated as the operating
profit divided by the total revenues per the Consolidated Statements
of Operations.
(c) Comparable hotel operating profit margin is calculated as the
comparable hotel operating profit divided by the comparable hotel
sales per the schedule above.
(d) The reconciliation of total revenues per the consolidated statements
of operations to the comparable hotel sales is as follows (in
millions):
Quarter ended Year-to-date
Sept. 12, Sept. 6, Sept. 12, Sept. 6,
2003 2002 2003 2002
Revenues per the consolidated
statements of operations $760 $777 $2,422 $2,463
Non-comparable hotel sales (43) (41) (143) (100)
Hotel sales for the property for
which we receive rental income, net 9 9 31 30
Rental income for office buildings
and limited service hotels (17) (18) (51) (51)
Other income (10) -- (12) --
Business interruption insurance
proceeds -- (11) -- (11)
Adjustment for hotel sales for
comparable hotels to reflect thirty-
six weeks of operations for
Marriott-managed hotels -- -- (17) 19
Comparable hotel sales $699 $716 $2,230 $2,350
(e) The reconciliation of operating costs per the consolidated statements
of operations to the comparable hotel expenses is as follows (in
millions):
Quarter ended Year-to-date
Sept. 12, Sept. 6, Sept. 12, Sept. 6,
2003 2002 2003 2002
Operating costs and expenses per the
consolidated statements of
operations $728 $717 $2,207 $2,148
Non-comparable hotel expenses (37) (35) (127) (91)
Hotel expenses for the property for
which we receive rental income 10 10 36 35
Rent expense for office buildings and
limited service hotels (17) (17) (50) (50)
Adjustment for hotel expenses for
comparable hotels to reflect thirty-
six weeks of operations for
Marriott-managed hotels -- -- (15) 15
Depreciation and amortization (86) (85) (258) (251)
Corporate and other expenses (15) (11) (42) (40)
Comparable hotel sales $583 $579 $1,751 $1,766
(f) Non-comparable hotel results, net includes the following items: (i)
the results of operations of our non-comparable hotels and (ii) the
difference between the comparable hotel operating profit which
reflects 252 days of operations year-to-date and the operating results
included in the consolidated statements of operations which reflects
255 and 249 days for year-to-date 2003 and 2002, respectively. For
further detail see Comparable Hotel Results and Reporting Periods
beginning on page 6.
HOST MARRIOTT CORPORATION
Other Financial Data
(unaudited, in millions, except per share and ratio data)
September 12, December 31,
2003 2002
Equity
Common shares outstanding 295.7 263.7
Common shares and minority-held
common OP Units outstanding 320.0 291.5
Preferred OP Units outstanding 0.02 0.02
Class A Preferred stock outstanding 4.1 4.1
Class B Preferred stock outstanding 4.0 4.0
Class C Preferred stock outstanding 6.0 6.0
Class D Preferred stock outstanding (a) 0.03 --
Security pricing:
Share price-common (a) $ 9.99 $ 8.85
Share price-Class A Preferred (a) $ 25.25 $ 26.15
Share price-Class B Preferred (a) $ 25.10 $ 25.65
Share price-Class C Preferred (a) $ 25.25 $ 25.70
Share price-Convertible Preferred
Securities (a) $ 44.19 $ 36.94
Dividends per share (year-to-date
2003 and full year 2002)
Common (b) $ -- $ --
Class A Preferred (c) $ 1.88 $ 2.50
Class B Preferred (c) $ 1.88 $ 2.50
Class C Preferred (c) $ 1.88 $ 2.50
Class D Preferred (c) $ 1.25 $ --
Debt
Percentage of fixed rate debt 84% 90%
Weighted average interest rate 7.8% 7.9%
Weighted average debt maturity 4.8 years 5.5 years
Credit facility, outstanding balance $ -- $ --
Other Financial Data
Construction in progress $ 54 $ 39
(a) Share prices are the closing price on the balance sheet date, as
reported by the NYSE for the common and preferred stock. The shares of
Convertible Preferred Securities are not traded on an exchange. Our
Convertible Preferred Securities per share price is deemed to be the
higher of the buy or sell price as provided by the trading desk for
Goldman Sachs in New York, New York on the relevant date.
(b) We did not declare a common stock dividend in the first three quarters
of 2003 or in full year 2002.
(c) Dividends reflect a quarterly cash dividend of $.625 per share for the
Class A, Class B, Class C and Class D preferred stock.
HOST MARRIOTT CORPORATION
Reconciliation of Net Loss Available to Common Shareholders
to Funds From Operations per Diluted Share
(unaudited, in millions, except per share amounts)
Quarter ended Quarter ended
September 12, 2003 September 6, 2002
Per Per
Income Share Income Share
(Loss) Shares Amount (Loss) Shares Amount
Net loss available to
common shareholders $(97) 275.6 $(.35) $(47) 263.3 $(.18)
Adjustments:
Cumulative effect of change
in accounting principle 24 -- .09 -- -- --
Depreciation and
amortization 86 -- .31 87 -- .33
Partnership adjustments (3) -- (.01) 2 -- .01
FFO of minority partners
of Host LP (a) (1) -- -- (4) -- (.02)
Adjustments for dilutive
securities:
Assuming distribution of
common shares granted under
the comprehensive stock plan
less shares assumed purchased
at average market price -- 2.9 -- -- 3.0 --
Assuming conversion of
Convertible Preferred
Securities -- -- -- -- -- --
FFO per diluted share (b) (c) $9 278.5 $.03 $38 266.3 $.14
Year-to-date Year-to-date
September 12, 2003 September 6, 2002
Per Per
Income Share Income Share
(loss) Shares Amount (loss) Shares Amount
Net loss available to
common shareholders $(163) 268.1 $(.61) $(40) 262.7 $(.15)
Adjustments:
Cumulative effect of change
in accounting principle 24 -- .09 -- -- --
Gain from discontinued
operations -- -- -- (13) -- (.05)
Depreciation and
amortization 257 -- .96 254 -- .97
Partnership adjustments 3 -- .01 18 -- .07
FFO of minority partners
of Host LP (a) (12) -- (.05) (19) -- (.08)
Adjustments for dilutive
securities:
Assuming distribution of
common shares granted under
the comprehensive stock
plan less shares assumed
purchased at average
market price -- 2.5 -- -- 3.2 --
Assuming conversion of
Convertible Preferred
Securities -- -- -- 22 30.9 (.01)
FFO per diluted share (b) (c) $109 270.6 $.40 $222 296.8 $.75
(a) Represents FFO attributable to the minority interest in Host LP.
(b) FFO per diluted share in accordance with NAREIT is adjusted for the
effects of 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 interest to common OP Units and the
Convertible Preferred Securities. No effect is shown for securities
if they are anti-dilutive.
(c) In the third quarter of 2003, the FFO per diluted share includes the
following items:
* the recognition of approximately $9.6 million of other income from
the settlement of a claim that we brought against our directors' and
officers' insurance carriers for reimbursement of defense costs and
settlement payments incurred in resolving a series of related
actions brought against us and Marriott International that arose
from the sale of certain limited partnership units to investors
prior to 1993. The settlement amount, net of taxes of approximately
$2.4 million, resulted in FFO per diluted share of approximately
$.02 for the quarter.
* in conjunction with the redemption of $71 million of our Series A
senior notes, we incurred approximately $2.3 million of expense
related to the 2.627% premium paid and the acceleration of related
deferred financing fees. This change decreased FFO per diluted
share by approximately $.01 for the quarter.
HOST MARRIOTT CORPORATION
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
(unaudited, in millions)
Quarter ended Year-to-date
September September September September
12, 6, 12, 6,
2003 2002 2003 2002
Net loss $(88) $(38) $(136) $(13)
Interest expense 108 107 326 318
Dividends on Convertible
Preferred Securities 7 7 22 22
Depreciation and amortization 86 85 258 251
Income taxes (11) (7) (10) 8
Discontinued operations (a) 1 1 4 3
EBITDA (b) 104 155 465 589
Gains and losses on
dispositions and related
debt extinguishments -- (1) (2) (16)
Consolidated partnership
adjustments:
Minority interest
(income) expense (9) (3) (11) 8
Distributions to minority
interest partners of Host LP
and other minority partners (1) (2) (5) (9)
Equity investment adjustments:
Equity in losses of affiliates 4 3 13 6
Distributions received from
equity investments -- 1 3 3
Cumulative effect of change
in accounting principle 24 -- 24 --
Adjusted EBITDA (b) $122 $153 $487 $581
(a) Reflects the interest expense, depreciation and amortization and
income taxes included in discontinued operations.
(b) See discussion of EBITDA and Adjusted EBITDA.
HOST MARRIOTT CORPORATION
Reconciliation of Net Loss Available to Common Shareholders to Funds From
Operations per Diluted Share for Full Year 2003 Forecasts (a)
(unaudited, in millions, except per share amounts)
Low-end of Range
Full Year 2003 Forecast
Income Per Share
(Loss) Shares Amount
Forecast net loss available to
common shareholders $(209) 276.5 $(.75)
Adjustments:
Cumulative effect of change in
accounting principle 24 -- .09
Depreciation and amortization 374 -- 1.34
Partnership adjustments (2) -- --
FFO of minority partners of Host LP (b) (15) -- (.05)
Adjustment for dilutive securities: (c)
Assuming distribution of common
shares granted under the
comprehensive stock plan less shares
assumed purchased at average market
price -- 2.9 (.01)
FFO per diluted share (d) $172 279.4 $0.62
High-end of Range
Full Year 2003 Forecast
Income Per Share
(Loss) Shares Amount
Forecast net loss available to
common shareholders $(195) 276.5 $(.71)
Adjustments:
Cumulative effect of change in
accounting principle 24 -- .09
Depreciation and amortization 374 -- 1.34
Partnership adjustments (2) -- --
FFO of minority partners of Host LP (b) (16) -- (.05)
Adjustment for dilutive securities: (c)
Assuming distribution of common
shares granted under the
comprehensive stock plan less shares
assumed purchased at average market
price -- 2.9 (.01)
FFO per diluted share (d) $185 279.4 $.66
HOST MARRIOTT CORPORATION
Notes to Reconciliation of Net Loss Available to Common Shareholders
to Funds From Operations per Diluted Share
(a) The amounts shown in these reconciliations are based on management's
estimate of operations for full year 2003. These tables are forward-
looking and as such contain assumptions by management based on 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 this table.
General economic conditions, competition and governmental actions will
affect future transactions, results, performance and achievements.
Although we believe the expectations reflected in this reconciliation
are based upon reasonable assumptions, we can give no assurance that
the expectations will be attained or that any deviations will not be
material.
For purposes of preparing the full-year 2003 forecasts, we have made
the following assumptions:
* RevPAR will be flat to down 2.5% for the fourth quarter and decrease
between 4% and 5% for the full-year 2003 for the high and low ends
of the forecasted ranges, respectively.
* Comparable hotel operating profit margins will decrease between
2.5 percentage points and 3.0 percentage points for the full-year
2003 for the high and low end of the forecasted ranges,
respectively.
* $150 million of hotels will be sold during 2003 and the proceeds
will be utilized to retire debt, including proceeds from the $97
million in dispositions completed to date.
* $210 million in renewal and replacement capital expenditures will be
incurred during 2003.
* Fully diluted shares will be 279.4 million full-year 2003.
(b) Represents FFO attributable to the minority interests in Host LP
during 2003.
(c) These shares are dilutive for purposes of the FFO per diluted share
calculation, yet are anti-dilutive for the purposes of the earnings
per share calculation. This is due to the net loss that is forecasted
for 2003 compared to net earnings for FFO for the year.
(d) FFO per diluted share in accordance with NAREIT is adjusted for the
effects of 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 interest to common OP Units and the
Convertible Preferred Securities. No effect is shown for securities
if they are anti-dilutive.
HOST MARRIOTT CORPORATION
Reconciliation of Net Loss to EBITDA and
Adjusted EBITDA for Full Year 2003 Forecasts
(unaudited, in millions)
Full Year 2003
Low-end High-end
of Range of Range
Net Loss $(174) $(160)
Interest expense 463 463
Dividends on Convertible
Preferred Securities 32 32
Depreciation and amortization 374 374
Income taxes (10) (10)
Discontinued operations (a) 4 4
EBITDA 689 703
Gains and losses on dispositions and
related debt extinguishments (4) (4)
Consolidated partnership adjustments:
Minority interest (income) expense (12) (11)
Distributions to minority interest
partners of Host LP and other
minority partners (6) (6)
Equity investment adjustments:
Equity in (earnings) losses of
affiliates 20 20
Distributions received from
equity investments 4 4
Cumulative effect of change in
accounting principle 24 24
Adjusted EBITDA $ 715 $730
(a) Reflects the interest expense, depreciation and amortization and
income taxes included in discontinued operations.
SOURCE Host Marriott Corporation
Greg Larson, Senior Vice President, Investor Relations, of Host
Marriott Corporation, +1-240-744-5120
http://www.hostmarriott.com
|
Host Hotels & Resorts, Inc.
