Core Insights - The article emphasizes the importance of quantitative research, financial modeling, and risk management in equity valuation and market trends [1] - It highlights the experience of the analyst in leading teams for model validation and stress testing, showcasing a strong background in both fundamental and technical analysis [1] - The collaboration between the analyst and their research partner aims to deliver high-quality, data-driven insights, focusing on macroeconomic trends and corporate earnings [1] Company and Industry Analysis - The analyst has over 20 years of experience, indicating a deep understanding of the investment landscape and potential opportunities [1] - The focus on portfolio optimization suggests a strategic approach to identifying high-growth investment opportunities [1] - The article indicates a commitment to rigorous risk management combined with a long-term perspective on value creation, which is crucial for investors [1]

Company Overview - Host Hotels & Resorts, Inc. is the largest lodging real estate investment trust in the United States and is part of the S&P 500 [3] - The company owns 75 properties in the United States and five properties internationally, totaling approximately 42,900 rooms [3] - Host Hotels also holds non-controlling interests in seven domestic and one international joint ventures [3] Upcoming Financial Results - The company will report its third quarter 2025 financial results on November 5, 2025, after market close [1] - A conference call to discuss the results and business outlook is scheduled for November 6, 2025, at 9:00 a.m. ET [1] - Access information for the conference call includes a toll-free number for USA/Canada and an international toll number [1] Additional Information - A replay of the conference call will be available from November 6, 2025, until February 18, 2026, via webcast on the company's website [2]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific companies, Host Hotels & Resorts (HST) and Piedmont Realty Trust, Inc. (PDM), as strong value stock picks based on various financial metrics. Company Analysis: Host Hotels & Resorts (HST) - HST holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock has a Forward P/E ratio of 7.85, significantly lower than the industry average of 15.32, with a 12-month range of 6.79 to 9.77 [4] - HST's PEG ratio is 1.65, compared to the industry average of 2.01, with a 52-week range of 1.42 to 1.67 [5] - The P/B ratio for HST is 1.59, which is favorable compared to the industry average of 1.67, with a 52-week range of 1.32 to 1.99 [6] - HST has a P/S ratio of 1.83, significantly lower than the industry average of 3.86, indicating strong revenue performance [7] - The P/CF ratio for HST is 7.30, well below the industry average of 14.67, with a 52-week range of 6.05 to 9.04 [8] Company Analysis: Piedmont Realty Trust, Inc. (PDM) - PDM also holds a Zacks Rank of 2 (Buy) and a Value Score of A, making it an attractive option for value investors [9] - PDM has a P/B ratio of 0.60, which is considerably lower than the industry average of 1.67, with a 52-week range of 0.46 to 0.84 [9] Conclusion - Both HST and PDM are identified as likely undervalued stocks, with strong earnings outlooks, making them standout options for value investors in the current market [10]

Core Insights - Host Hotels & Resorts, Inc. published its 2025 Corporate Responsibility (CR) Report, showcasing its commitment to environmental and social targets for 2030 and a vision for net positive by 2050 [1][2] Sustainability Investments - The company has achieved nearly $5 billion in sustainable financing, including $2.45 billion in green bonds for eligible projects [6] - Over 860 sustainability projects are expected to yield $24 million in annual utility savings, with average cash-on-cash returns of 13-20% over five years [6] - 21 properties hold LEED® certification, including four with LEED Gold certification, and 15 additional projects are in the pipeline [6] - 16 properties have on-site renewable energy systems installed or under development [6] Community Investments - The company supported 283 charities to strengthen communities, with over 220 organizations selected by employees [6] - Seven volunteer events were conducted focusing on environmental conservation, youth education, health and well-being, and support for underserved communities [6] People Investments - The average balance in social impact funds was approximately $240 million in 2024 [6] - Employee engagement is high, with 88% of employees reporting high engagement levels in the latest survey [6] - 61% of employees participated in external learning and development programs, with an average of 20 training hours per employee per year [6]

[Explanatory Note](index=3&type=section&id=EXPLANATORY%20NOTE) This section clarifies the combined quarterly filings of Host Inc. (REIT) and Host L.P., with equity being the primary financial statement difference - The report combines quarterly filings for **Host Hotels & Resorts, Inc. (REIT)** and **Host Hotels & Resorts, L.P. (limited partnership)**[10](index=10&type=chunk) - **Host Inc.** is the sole general partner of Host L.P. and holds approximately **99%** of its partnership interests[11](index=11&type=chunk) - The financial statements of Host Inc. and Host L.P. are substantially similar, differing primarily in the equity (or partners' capital) section[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements for Host Hotels & Resorts, Inc.](index=5&type=section&id=Item%201.%20Financial%20Statements%20for%20Host%20Hotels%20%26%20Resorts%2C%20Inc.) This section presents Host Inc.'s unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive income, and cash flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20-%20Host%20Inc.) This section provides Host Inc.'s financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | ASSETS | June 30, 2025 (unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | Property and equipment, net | $10,795 million | $10,906 million | | Total assets | $12,960 million | $13,048 million | | LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY | | | | Total debt | $5,077 million | $5,083 million | | Total liabilities | $6,183 million | $6,271 million | | Total equity | $6,641 million | $6,612 million | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20-%20Host%20Inc.) This section outlines Host Inc.'s financial performance, presenting revenues, expenses, and net income for specified periods | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $1,586 million | $1,466 million | $3,180 million | $2,937 million | | Total operating costs and expenses | $1,309 million | $1,174 million | $2,618 million | $2,354 million | | OPERATING PROFIT | $277 million | $292 million | $562 million | $583 million | | NET INCOME | $225 million | $242 million | $476 million | $514 million | | NET INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC. | $221 million | $239 million | $469 million | $507 million | | Basic earnings per common share | $0.32 | $0.34 | $0.68 | $0.72 | | Diluted earnings per common share | $0.32 | $0.34 | $0.67 | $0.72 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20-%20Host%20Inc.) This section details Host Inc.'s comprehensive income, including net income and other comprehensive income (loss), for specified periods | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | NET INCOME | $225 million | $242 million | $476 million | $514 million | | OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | $5 million | $(5) million | $9 million | $(8) million | | COMPREHENSIVE INCOME | $230 million | $237 million | $485 million | $506 million | | COMPREHENSIVE INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC. | $226 million | $234 million | $478 million | $499 million | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20-%20Host%20Inc.) This section presents Host Inc.'s cash flow activities, categorized into operating, investing, and financing, for specified periods | Cash Flow Activity | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $749 million | $818 million | | Net cash used in investing activities | $(198) million | $(775) million | | Net cash used in financing activities | $(583) million | $(353) million | | NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | $(27) million | $(314) million | | CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $771 million | $1,049 million | | Supplemental Cash Flow Information | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Total interest paid | $119 million | $91 million | | Income taxes paid | $7 million | $5 million | [Item 1. Financial Statements for Host Hotels & Resorts, L.P.](index=10&type=section&id=Item%201.%20Financial%20Statements%20for%20Host%20Hotels%20%26%20Resorts%2C%20L.P.) This section presents Host L.P.'s unaudited condensed consolidated financial statements, mirroring Host Inc.'s with equity/capital as the main distinction [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20-%20Host%20L.P.) This section provides Host L.P.'s financial position, detailing assets, liabilities, and capital as of June 30, 2025, and December 31, 2024 | ASSETS | June 30, 2025 (unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :------------------ | | Property and equipment, net | $10,795 million | $10,906 million | | Total assets | $12,960 million | $13,048 million | | LIABILITIES, LIMITED PARTNERSHIP INTERESTS OF THIRD PARTIES AND CAPITAL | | | | Total debt | $5,077 million | $5,083 million | | Total liabilities | $6,183 million | $6,271 million | | Total capital | $6,641 million | $6,612 million | [Condensed Consolidated Statements of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20-%20Host%20L.P.) This section outlines Host L.P.'s financial performance, presenting revenues, expenses, and net income for specified periods | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $1,586 million | $1,466 million | $3,180 million | $2,937 million | | Total operating costs and expenses | $1,309 million | $1,174 million | $2,618 million | $2,354 million | | OPERATING PROFIT | $277 million | $292 million | $562 million | $583 million | | NET INCOME | $225 million | $242 million | $476 million | $514 million | | NET INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P. | $225 million | $242 million | $476 million | $514 million | | Basic earnings per common unit | $0.33 | $0.35 | $0.69 | $0.73 | | Diluted earnings per common unit | $0.33 | $0.35 | $0.69 | $0.73 | [Condensed Consolidated Statements of Comprehensive Income](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20-%20Host%20L.P.) This section details Host L.P.'s comprehensive income, including net income and other comprehensive income (loss), for specified periods | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | NET INCOME | $225 million | $242 million | $476 million | $514 million | | OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | $5 million | $(5) million | $9 million | $(8) million | | COMPREHENSIVE INCOME | $230 million | $237 million | $485 million | $506 million | | COMPREHENSIVE INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P. | $230 million | $237 million | $485 million | $506 million | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20-%20Host%20L.P.) This section presents Host L.P.'s cash flow activities, categorized into operating, investing, and financing, for specified periods | Cash Flow Activity | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $749 million | $818 million | | Net cash used in investing activities | $(198) million | $(775) million | | Net cash used in financing activities | $(583) million | $(353) million | | NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | $(27) million | $(314) million | | CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $771 million | $1,049 million | | Supplemental Cash Flow Information | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Total interest paid | $119 million | $91 million | | Income taxes paid | $7 million | $5 million | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed notes to the unaudited condensed consolidated financial statements, offering context on organization, policies, and key financial items [1. Organization](index=15&type=section&id=1.%20Organization) This note describes the company's structure as a self-managed REIT operating through a limited partnership and details its hotel portfolio - **Host Hotels & Resorts, Inc.** operates as a self-managed and self-administered real estate investment trust (REIT) through Host Hotels & Resorts, L.P.[37](index=37&type=chunk) - As of June 30, 2025, **Host Inc.** holds approximately **99%** of Host L.P.'s partnership interests[37](index=37&type=chunk) | Consolidated Portfolio Location | Hotels | | :------------------------------ | :----- | | United States | 75 | | Brazil | 3 | | Canada | 2 | | Total | 80 | [2. Summary of Significant Accounting Policies](index=15&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting principles and estimates used in preparing financial statements, including GAAP conformity and interim reporting - Financial statements are prepared in conformity with **U.S. GAAP**, with certain information condensed or omitted[39](index=39&type=chunk) - Management makes estimates and assumptions that affect reported amounts; actual results may differ[40](index=40&type=chunk) - Interim results are not necessarily indicative of full-year performance due to seasonal variations[41](index=41&type=chunk) - Five partnerships, including Host L.P., are considered **variable interest entities (VIEs)**[42](index=42&type=chunk) [3. Earnings Per Common Share (Unit)](index=16&type=section&id=3.%20Earnings%20Per%20Common%20Share%20%28Unit%29) This note explains the calculation of basic and diluted earnings per common share (unit) for Host Inc. and Host L.P. - Basic EPS/EPU is calculated by dividing net income attributable to common stockholders/unitholders by the weighted average number of shares/units outstanding[43](index=43&type=chunk) - Diluted EPS/EPU includes the effect of potentially dilutive securities, such as shares granted under stock plans and convertible non-controlling interests[43](index=43&type=chunk) | Metric | Quarter ended June 30, 2025 | Quarter ended June 30, 2024 | Year-to-date ended June 30, 2025 | Year-to-date ended June 30, 2024 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | Host Inc. Diluted earnings per common share | $0.32 | $0.34 | $0.67 | $0.72 | | Host L.P. Diluted earnings per common unit | $0.33 | $0.35 | $0.69 | $0.73 | [4. Revenue](index=18&type=section&id=4.%20Revenue) This note disaggregates total revenues by market location, highlighting significant contributions from key geographic areas - Revenues are disaggregated by market location, with **Orlando**, **Florida Gulf Coast**, **San Diego**, and **New York** being significant contributors[45](index=45&type=chunk) | Location (Top 4 by Q2 2025 Revenue) | Quarter ended June 30, 2025 (millions) | Quarter ended June 30, 2024 (millions) | | :---------------------------------- | :------------------------------------- | :------------------------------------- | | Orlando | $132 | $116 | | Florida Gulf Coast | $122 | $120 | | San Diego | $134 | $134 | | New York | $134 | $103 | [5. Property and Equipment](index=19&type=section&id=5.%20Property%20and%20Equipment) This note provides a detailed breakdown of the company's property and equipment, net of accumulated depreciation and amortization | Property and Equipment (in millions) | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Land and land improvements | $2,457 | $2,457 | | Buildings and leasehold improvements | $15,656 | $15,504 | | Furniture and equipment | $2,622 | $2,546 | | Construction in progress | $298 | $299 | | Less accumulated depreciation and amortization | $(10,238) | $(9,900) | | Total Property and equipment, net | $10,795 | $10,906 | [6. Debt](index=19&type=section&id=6.%20Debt) This note details the company's debt structure, including available credit, recent senior note issuances, and redemptions - As of June 30, 2025, the company had **$1.5 billion** of available capacity under the revolver portion of its credit facility[47](index=47&type=chunk) - On May 20, 2025, the company issued **$500 million** of **5.7% Series M senior notes** (due June 2032) for approximately **$490 million** net proceeds[48](index=48&type=chunk) - The proceeds from the Series M senior notes were used to redeem all **$500 million** of Series E senior notes due in June 2025[48](index=48&type=chunk) [7. Equity of Host Inc. and Capital of Host L.P.](index=20&type=section&id=7.%20Equity%20of%20Host%20Inc.%20and%20Capital%20of%20Host%20L.P.) This note outlines changes in Host Inc.'s equity and Host L.P.'s capital, including share repurchases and dividend declarations - During Q2 2025, Host Inc. repurchased **6.7 million shares** of common stock for **$105 million** at an average price of **$15.56 per share**[57](index=57&type=chunk) - Year-to-date June 30, 2025, Host Inc. repurchased **13.1 million shares** for **$205 million** at an average price of **$15.68 per share**[57](index=57&type=chunk) - As of June 30, 2025, **$480 million** remained available under the common share repurchase program and **$600 million** of capacity remained under the 'at the market' distribution agreement (no shares issued in H1 2025)[57](index=57&type=chunk)[58](index=58&type=chunk) - Host Inc.'s Board of Directors announced a regular quarterly cash dividend of **$0.20 per share** on June 12, 2025, paid on July 15, 2025[59](index=59&type=chunk) [8. Dispositions](index=25&type=section&id=8.%20Dispositions) This note details the sale of The Westin Cincinnati, including the sale price and the resulting gain - During Q2 2025, **The Westin Cincinnati** was sold for **$60 million**, resulting in a gain on sale of **$21 million**[61](index=61&type=chunk) [9. Fair Value Measurements](index=25&type=section&id=9.%20Fair%20Value%20Measurements) This note provides fair value measurements for various financial instruments, including senior notes, credit facilities, and mortgage debt | Financial Instrument (in millions) | Carrying Amount (June 30, 2025) | Fair Value (June 30, 2025) | Carrying Amount (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :--------------------------------- | :------------------------------ | :------------------------- | :----------------------------- | :------------------------ | | Senior notes (Level 1) | $3,987 | $3,911 | $3,993 | $3,838 | | Credit facility (Level 2) | $994 | $1,000 | $992 | $1,000 | | Mortgage debt (Level 2) | $96 | $91 | $98 | $91 | [10. Geographic and Business Segment Information](index=25&type=section&id=10.%20Geographic%20and%20Business%20Segment%20Information) This note clarifies the company's single reportable segment (hotel ownership) and disaggregates revenues and property by geographic area - The company operates as a single reportable segment: **hotel ownership**, with individual hotels considered operating segments[64](index=64&type=chunk) - The chief operating decision maker (CODM) uses **Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization (EBITDA)** as the primary measure of performance for the reportable segment[65](index=65&type=chunk) | Geographic Area | Total Revenues (Q2 2025, millions) | Total Revenues (YTD 2025, millions) | Property and Equipment, net (June 30, 2025, millions) | | :---------------- | :--------------------------------- | :---------------------------------- | :---------------------------------------------------- | | United States | $1,557 | $3,133 | $10,733 | | Brazil | $7 | $14 | $30 | | Canada | $22 | $33 | $32 | | Total | $1,586 | $3,180 | $10,795 | [11. Non-controlling Interests](index=27&type=section&id=11.%20Non-controlling%20Interests) This note describes the classification and valuation of non-controlling interests in Host L.P., including common OP units and their redemption value - Non-controlling interests of Host L.P. are classified as **redeemable** and valued at the greater of historical cost or redemption value[70](index=70&type=chunk) | Non-controlling Interests (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Common OP units outstanding | 8.7 | 9.2 | | Market price per Host Inc. common share | $15.36 | $17.52 | | Redemption value | $136 | $165 | | Historical cost | $86 | $90 | | Book value recorded | $136 | $165 | [12. Contingencies](index=28&type=section&id=12.%20Contingencies) This note discusses significant contingencies, including the reopening of The Don CeSar after hurricane damage and related insurance claims - **The Don CeSar**, affected by Hurricanes Helene and Milton in 2024, reopened to guests on March 26, 2025, as part of a phased reopening[74](index=74&type=chunk) - Estimated book value of property and equipment written off and remediation costs at The Don CeSar is approximately **$60 million**, with a corresponding **$60 million** insurance receivable[75](index=75&type=chunk) - As of June 30, 2025, **$29 million** in insurance proceeds were received for these claims, including **$19 million** recognized as a gain on business interruption[75](index=75&type=chunk) [13. Legal Proceedings](index=28&type=section&id=13.%20Legal%20Proceedings) This note confirms the company's involvement in routine legal proceedings and assesses the immateriality of current accruals for these claims - The company is involved in various legal proceedings in the ordinary course of business, but current accruals for these claims are immaterial[76](index=76&type=chunk)[77](index=77&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, condition, and future outlook, including non-GAAP reconciliations [Forward-Looking Statements](index=29&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements, subject to various known and unknown risks and uncertainties - The report contains forward-looking statements subject to known and unknown risks and uncertainties[79](index=79&type=chunk) - Key risk factors include changes in economic and business conditions, natural disasters, geopolitical developments, operating costs, labor issues, competition, cyber-attacks, and changes in tax laws and regulations[80](index=80&type=chunk)[82](index=82&type=chunk) [Operating Results and Outlook](index=31&type=section&id=Operating%20Results%20and%20Outlook) This section analyzes recent operating performance and provides an outlook for future financial results, including revenue and margin expectations | Metric | Q2 2025 vs. Q2 2024 Change | YTD 2025 vs. YTD 2024 Change | | :-------------------------------------- | :------------------------- | :--------------------------- | | Total revenues | 8.2% | 8.3% | | Net income | (7.0%) | (7.4%) | | Operating profit | (5.1%) | (3.6%) | | Operating profit margin under GAAP | (240) bps | (220) bps | | Adjusted EBITDAre | 3.1% | 4.1% | | Diluted earnings per common share | (5.9%) | (6.9%) | | Adjusted FFO per diluted share | 1.8% | 1.7% | | Comparable hotel RevPAR | 3.0% | 5.0% | | Comparable hotel EBITDA margin | (120) bps | (50) bps | - Revenue improvements were driven by a **3.7% increase in room rates** at comparable hotels and contributions from 2024 acquisitions[85](index=85&type=chunk) - Operating profit margin declined primarily due to a decrease in net gains on insurance settlements[87](index=87&type=chunk) - Outlook for full year 2025: comparable hotel RevPAR growth expected between **1.5% and 2.5%**, with margins expected to decline due to higher wages and benefits[92](index=92&type=chunk) - Demand is expected to continue to be driven by transient business, with anticipated softness in short-term group bookings due to economic uncertainty[90](index=90&type=chunk) [Strategic Initiatives](index=34&type=section&id=Strategic%20Initiatives) This section details key strategic actions, including debt refinancing, asset dispositions, and capital expenditure plans for property enhancements - Issued **$500 million** of **5.7% Series M senior notes** in May 2025 to redeem **$500 million** of Series E senior notes[94](index=94&type=chunk) - Sold **The Westin Cincinnati** for **$60 million**, recording a **$21 million** gain on sale[94](index=94&type=chunk) | Capital Expenditures (YTD June 30, 2025) | Amount (millions) | | :--------------------------------------- | :---------------- | | ROI capital projects | $109 | | Renewal and replacement projects | $129 | | Hurricane and other restoration work | $60 | - Expected full year 2025 capital expenditures: **$590 million to $660 million**, including **$170 million to $180 million** for the Hyatt transformational capital program[97](index=97&type=chunk) - Construction continued on **40 Four Seasons-branded condominiums** at Four Seasons Resort Orlando, with **$43 million** spent YTD 2025[98](index=98&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of revenue and expense trends, highlighting factors influencing changes in financial performance | Revenue Category | Q2 2025 (millions) | Q2 2024 (millions) | Q2 Change (%) | YTD 2025 (millions) | YTD 2024 (millions) | YTD Change (%) | | :--------------- | :----------------- | :----------------- | :------------ | :------------------ | :------------------ | :------------- | | Rooms | $949 | $885 | 7.2% | $1,887 | $1,738 | 8.6% | | Food and beverage | $478 | $447 | 6.9% | $981 | $920 | 6.6% | | Other | $159 | $134 | 18.7% | $312 | $279 | 11.8% | | Total revenues | $1,586 | $1,466 | 8.2% | $3,180 | $2,937 | 8.3% | - Total revenues increased due to 2024 acquisitions and higher room rates, partially offset by a decline in group demand[101](index=101&type=chunk) | Expense Category | Q2 2025 (millions) | Q2 2024 (millions) | Q2 Change (%) | YTD 2025 (millions) | YTD 2024 (millions) | YTD Change (%) | | :--------------- | :----------------- | :----------------- | :------------ | :------------------ | :------------------ | :------------- | | Rooms | $233 | $214 | 8.9% | $458 | $416 | 10.1% | | Food and beverage | $313 | $286 | 9.4% | $636 | $581 | 9.5% | | Other departmental and support expenses | $375 | $343 | 9.3% | $739 | $677 | 9.2% | | Management fees | $70 | $69 | 1.4% | $139 | $138 | 0.7% | | Other property-level expenses | $107 | $101 | 5.9% | $218 | $205 | 6.3% | | Depreciation and amortization | $195 | $188 | 3.7% | $391 | $368 | 6.3% | | Total property-level operating expenses | $1,293 | $1,201 | 7.7% | $2,581 | $2,385 | 8.2% | - Property-level operating expenses increased primarily due to 2024 acquisitions and higher wage and employee benefits (expected **6% inflation** in 2025)[105](index=105&type=chunk) - Net gain on insurance settlements decreased significantly from **$56 million** in Q2 2024 to **$9 million** in Q2 2025[113](index=113&type=chunk) - Interest expense increased due to higher outstanding debt balances and refinancing at higher interest rates[113](index=113&type=chunk) - Other gains in Q2 2025 include a **$21 million** gain on the sale of The Westin Cincinnati[114](index=114&type=chunk) [Comparable Hotel RevPAR Overview](index=38&type=section&id=Comparable%20Hotel%20RevPAR%20Overview) This section analyzes comparable hotel RevPAR and Total RevPAR trends, identifying top-performing markets and business mix shifts - Comparable hotel RevPAR increased **3.0%** for Q2 2025 and **5.0%** for YTD 2025, driven by higher room rates and strong transient demand[85](index=85&type=chunk) - Comparable hotel Total RevPAR increased **4.2%** for Q2 2025 and **5.0%** for YTD 2025[86](index=86&type=chunk) - Top performing markets for Q2 2025 Total RevPAR growth were **Atlanta (+20.8%)**, **Maui (+18.5%)**, **Miami (+16.4%)**, and **San Francisco/San Jose (+15.7%)**[86](index=86&type=chunk) - Austin (**-34.6%**) and Washington, D.C. (CBD) (**-11.0%**) experienced declines due to renovation projects and the closure of Austin's convention center[86](index=86&type=chunk) | Business Mix (Comparable Hotels) | Q2 2025 Room Nights Change vs. 2024 | Q2 2025 Revenues Change vs. 2024 | | :------------------------------- | :---------------------------------- | :------------------------------- | | Transient business | 1.6% | 6.8% | | Group business | (6.1%) | (4.9%) | | Contract business | 14.6% | 21.7% | - Group revenue decreased in Q2 2025 due to planned renovation disruption and business mix shifting from group to transient in Maui, along with softness in short-term group demand[132](index=132&type=chunk)[134](index=134&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's financial flexibility, detailing cash position, available credit, debt structure, and cash flow activities - As of June 30, 2025, the company had **$490 million** in cash and cash equivalents, **$279 million** in FF&E escrow reserves, and **$1.5 billion** available under its credit facility[139](index=139&type=chunk) - Total debt as of June 30, 2025, was **$5.1 billion**, with a weighted average interest rate of **4.9%** and a weighted average maturity of **5.4 years**; **80%** of debt is fixed rate[151](index=151&type=chunk) - Net cash provided by operating activities decreased to **$749 million** YTD 2025 from **$818 million** YTD 2024, primarily due to payments for condominium inventory and increased interest payments[146](index=146&type=chunk) - Net cash used in investing activities decreased to **$198 million** YTD 2025 from **$775 million** YTD 2024, due to lower acquisitions in 2025[147](index=147&type=chunk) - Net cash used in financing activities increased to **$583 million** YTD 2025 from **$353 million** YTD 2024, mainly due to higher common stock repurchases and dividends[148](index=148&type=chunk) - The next significant debt maturity is **$400 million** of senior notes due in February 2026[138](index=138&type=chunk) | Financial Covenant (as of June 30, 2025) | Actual Ratio | Covenant Requirement | | :--------------------------------------- | :----------- | :------------------- | | Leverage ratio | 2.8x | Maximum ratio of 7.25x | | Fixed charge coverage ratio | 5.3x | Minimum ratio of 1.25x | | Unsecured interest coverage ratio | 6.9x | Minimum ratio of 1.75x | [Dividend Policy](index=46&type=section&id=Dividend%20Policy) This section outlines the company's dividend distribution policy, emphasizing REIT qualification requirements and recent dividend declarations - **Host Inc.** is required to distribute at least **90%** of its annual taxable income to maintain REIT qualification[156](index=156&type=chunk) - The company's policy is to distribute, over time, **100%** of its taxable income[158](index=158&type=chunk) - A regular quarterly cash dividend of **$0.20 per share** was announced on June 12, 2025, and paid on July 15, 2025[158](index=158&type=chunk) [Critical Accounting Estimates](index=47&type=section&id=Critical%20Accounting%20Estimates) This section highlights the reliance on management's estimates and assumptions in financial statement preparation, acknowledging potential differences - Financial statements are prepared in conformity with **GAAP**, requiring management to make estimates and assumptions[160](index=160&type=chunk) - Actual results could differ from these estimates due to future uncertainties[160](index=160&type=chunk) [Comparable Hotel Operating Statistics and Results](index=47&type=section&id=Comparable%20Hotel%20Operating%20Statistics%20and%20Results) This section defines criteria for comparable hotels and identifies properties excluded from these statistics due to disruptions - Comparable hotels are properties owned or leased, not held-for-sale, and not significantly impacted by damage or large-scale capital projects requiring closures of one month or longer[161](index=161&type=chunk) - As of June 30, 2025, **78 of 80 hotels** were classified as comparable[165](index=165&type=chunk) - Excluded from comparable hotel results are **The Don CeSar** (hurricane disruption), **Alila Ventana Big Sur** (highway collapse), and sales and marketing expenses for Four Seasons Resort Orlando condominium units[166](index=166&type=chunk) [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles various non-GAAP financial measures used by the company, such as EBITDA and Adjusted FFO - The company uses non-GAAP financial measures including **EBITDA**, **EBITDAre**, **Adjusted EBITDAre**, **NAREIT FFO**, **Adjusted FFO per diluted share**, and comparable hotel operating results[173](index=173&type=chunk) - **Adjusted EBITDAre** excludes property insurance gains/losses, acquisition costs, litigation gains/losses, severance expense, and non-cash stock-based compensation[175](index=175&type=chunk) - **Adjusted FFO per diluted share** further adjusts NAREIT FFO for gains/losses on debt extinguishment, acquisition costs, litigation gains/losses, severance expense, and non-cash stock-based compensation[180](index=180&type=chunk)[184](index=184&type=chunk) | Non-GAAP Metric (in millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------------------- | :------ | :------ | :------- | :------- | | EBITDA | $505 | $496 | $1,008 | $993 | | EBITDAre | $491 | $502 | $999 | $1,006 | | Adjusted EBITDAre | $496 | $481 | $1,010 | $970 | | NAREIT FFO | $395 | $399 | $835 | $825 | | Adjusted FFO | $400 | $404 | $846 | $836 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section addresses the company's exposure to market risks, specifically interest rate and exchange rate sensitivity, and their management - As of June 30, 2025, **80%** of outstanding debt bore interest at fixed rates[197](index=197&type=chunk) - The company had no interest rate derivatives outstanding as of June 30, 2025[197](index=197&type=chunk) - The company has operations in Brazil and Canada, and a minority investment in India, exposing it to currency exchange risks[199](index=199&type=chunk) - No foreign currency hedging transactions were entered into during the first half of 2025, but two foreign currency forward purchase contracts for **CAD 99 million ($73 million)** mature in August 2025[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures for Host Inc. and Host L.P., reporting no material changes - Management, including the CEO and CFO, concluded that disclosure controls and procedures for **Host Inc.** were effective as of June 30, 2025[201](index=201&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter for **Host Inc.** or **Host L.P.**[202](index=202&type=chunk)[204](index=204&type=chunk) - Disclosure controls and procedures for **Host L.P.** were also evaluated and deemed effective[203](index=203&type=chunk) [PART II. OTHER INFORMATION](index=57&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes details on unregistered sales of equity securities, other information, and a list of exhibits filed with the report [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activities and corresponding repurchases of Host L.P. common OP units - During Q2 2025, **Host Inc.** repurchased **6.7 million shares** of common stock for **$105 million** at an average price of **$15.56 per share**[207](index=207&type=chunk) - As of June 30, 2025, **$480 million** remained available for repurchase under the common share repurchase program[207](index=207&type=chunk) - **Host L.P.** purchased/redeemed **7.07 million common OP units** in Q2 2025, including units to fund Host Inc.'s share repurchase program[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) This section confirms no Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers - No director or officer adopted, modified, or terminated any **Rule 10b5-1 trading arrangement** during the period covered by the report[212](index=212&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including security holder rights, certifications, and XBRL financial statements - Exhibits include supplemental indentures, certifications (**Section 302 and 906 of Sarbanes-Oxley Act**), and **XBRL-formatted financial statements**[215](index=215&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - Representations and warranties in exhibited agreements are for the benefit of other parties and may not reflect the actual state of affairs[213](index=213&type=chunk)[216](index=216&type=chunk)

Core Insights - Host Hotels & Resorts reported Q2 2025 revenue of $1.59 billion, exceeding analyst expectations of $1.51 billion, with diluted EPS at $0.32, down from $0.34 year-over-year [1][2] - The company experienced solid top-line growth but faced margin pressures due to rising wage costs and lower insurance proceeds [1][9] Financial Performance - Revenue increased by 8.2% year-over-year from $1.47 billion in Q2 2024 [2] - Adjusted EBITDAre reached $496 million, up 3.1% from the previous year [2][8] - Comparable hotel RevPAR grew by 3.0% year-over-year, indicating strong demand and pricing power [2][5] Operational Trends - Transient business saw a 1.6% increase in room nights and a 6.8% rise in related revenue, while group business faced declines due to renovations [6] - Notable geographic performance included an 18.6% increase in RevPAR in Maui, while markets like Washington, D.C. and Nashville saw declines [7] Profitability and Margins - Adjusted EBITDA margin declined to 31.0% from 32.2% year-over-year, attributed to higher wage expenses and lower insurance recoveries [9] - GAAP net income for Q2 2025 was $225 million, down 7.0% year-over-year [9] Capital Management - The company sold The Westin Cincinnati for $60 million and repurchased 6.7 million shares for $105 million, maintaining a quarterly dividend of $0.20 per share [10][11] - Total assets stood at $13.0 billion with $2.3 billion in available liquidity as of June 30, 2025 [12] Future Guidance - Management raised FY2025 revenue guidance to $6,054–$6,109 million, reflecting a growth of 6.5%–7.5% compared to 2024 [13] - Expected comparable hotel EBITDA margin for the full year is projected to be between 28.4% and 28.7% [13]

Company Overview - Host Hotels & Resorts, Inc. is the largest lodging real estate investment trust in the United States and is part of the S&P 500 [2] - The company owns 75 properties in the United States and five properties internationally, totaling approximately 42,900 rooms [2] - Host Hotels & Resorts also holds non-controlling interests in seven domestic and one international joint ventures [2] Recent Developments - The company provided an updated investor presentation for second quarter 2025 results [1]

Financial Performance - Host Hotel 第二季度业绩表现出色，上调全年指导性预期，EBITDA 增加 60 million 美元，达到 10.75 billion 美元的中点 [2] - 过去六年，公司在资产上的投资为 1.7 billion 美元，推动了业绩增长 [2] Market Trends & Industry Dynamics - 高端消费市场依然活跃，未见放缓迹象 [1] - 高端酒店 RevPAR（每间可销售房收入）同比增长 5.9% [6] - 经济型酒店 RevPAR 在本季度下降约 5% [6] - 餐饮收入在本季度增长 4%，主要由门店增长驱动 [3] Investment & Strategy - 公司的战略重点是服务于富裕客户 [2] - 客户对高端酒店的价格不敏感，客房外消费持续增长 [3] - 客户资产负债表现良好，股票和房地产市场创造了大量财富 [6]

Core Insights - Host Hotels & Resorts, Inc. (HST) reported second-quarter adjusted funds from operations (AFFO) per share of 58 cents, exceeding the Zacks Consensus Estimate of 51 cents, marking a 1.8% increase from the prior year [1][8] - The company generated total revenues of $1.59 billion, surpassing the Zacks Consensus Estimate of $1.50 billion, reflecting an 8.2% year-over-year growth [2] - The outlook for 2025 AFFO per share has been raised to a range of $1.98-$2.02, above the previous guidance of $1.88-$1.97 [10] Financial Performance - Comparable hotel RevPAR was $239.64, a 3% increase from the previous year, driven by higher room rates and strong transient leisure demand [3][8] - Comparable hotel EBITDA was $481 million, remaining flat year-over-year, with a margin decrease of 120 basis points to 31% due to $21 million in business interruption proceeds related to the Maui wildfires [4] - The average room rate increased to $324.87 from $313.17 in the prior year [4] Business Segmentation - The comparable average occupancy percentage was 73.8%, down 50 basis points from the prior year [5] - Transient and contract businesses saw room nights increase by 6.8% and 21.7% year-over-year, while group business declined by 4.9% [5] - The transient, group, and contract businesses accounted for approximately 60%, 36%, and 4% of 2024 room sales, respectively [5] Balance Sheet and Capital Management - As of June 30, 2025, Host Hotels had cash and cash equivalents of $490 million, up from $428 million at the end of Q1 2025 [6] - Total liquidity was $2.3 billion, including $279 million in FF&E escrow reserves and $1.5 billion available under the credit facility [6] - In Q2 2025, the company repurchased 6.7 million shares at an average price of $15.56 per share, totaling $105 million, with approximately $480 million remaining under the repurchase program [7] Capital Expenditure - Year-to-date capital expenditure through June 30, 2025, totaled $298 million, with $109 million for return on investment projects, $129 million for renewal and replacement, and $60 million for property damage reconstruction [8][9] - For 2025, total capital expenditure is anticipated to be in the range of $590-$660 million [11]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDAre of $496 million, a 3.1% increase year-over-year, and adjusted FFO per share of $0.58, up 1.8% from the previous year [5][19] - Comparable hotel total RevPAR improved by 4.2% compared to 2024, with a 3% increase in comparable hotel RevPAR driven by stronger transient demand and higher ADR [5][19] - Comparable hotel EBITDA margin declined by 120 basis points year-over-year to 31%, impacted by prior year business interruption proceeds [6][26] Business Line Data and Key Metrics Changes - Transient revenue grew by 7%, with Maui accounting for approximately 40% of the transient revenue growth in the quarter [7][21] - Group room revenue decreased by 5% year-over-year, primarily due to the Easter calendar shift and renovation disruptions [8][24] - Ancillary spending by guests remained strong, with total RevPAR growth of 4% in the second quarter, and food and beverage revenue up 4% [9][19] Market Data and Key Metrics Changes - Strong performance was noted in markets such as Maui, Miami, Orlando, Atlanta, New York, the Florida Gulf Coast, and San Francisco [7][8] - The company experienced a 19% RevPAR growth in Maui, contributing significantly to overall portfolio performance [8][45] - Business transient revenue remained relatively flat, with a slight decline in corporate negotiated room night volumes [23][24] Company Strategy and Development Direction - The company is focused on capital allocation, having disposed of approximately $5.1 billion in hotels at a blended 17.2 times EBITDA multiple, while acquiring $4.9 billion at a 13.6 times EBITDA multiple [12][73] - The Hyatt transformational capital program is approximately 50% complete, tracking on time and under budget, with ongoing renovations expected to enhance portfolio value [13][16] - The company plans to continue investing in its assets to drive returns, with a focus on luxury properties due to their long-term RevPAR CAGR potential [89][91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of Maui, with expectations for continued growth in group bookings as the market stabilizes [45][47] - The company anticipates a gradual improvement in the macroeconomic environment, which could positively impact demand in the second half of the year [27][28] - Despite macroeconomic uncertainties, the company is well-positioned with a strong balance sheet and diversified portfolio [18][32] Other Important Information - The company collected $9 million in business interruption proceeds for Hurricanes Helene and Milton, totaling $19 million for the first half of the year [11][29] - Capital expenditure guidance for 2025 is set between $590 million and $660 million, including significant investments for redevelopment and repositioning projects [15][29] - The company has $2.3 billion in total available liquidity, with a leverage ratio of 2.8 times [31] Q&A Session Summary Question: Group dynamics for the second half and longer term - Management noted that while short-term group pickup has softened, there is strong group booking momentum for 2026 and beyond, with a total of 3.8 million group room nights on the books [38][40] Question: Update on Hawaii's performance - Management confirmed that Maui's recovery is underway, with a 19% RevPAR growth and increased out-of-room spending, supported by a marketing campaign [45][46] Question: Insights on Turtle Bay's performance - Turtle Bay is exceeding pro forma expectations, with no negative surprises in hotel operations, although there are changes in plans for the golf course [53][54] Question: Wages and benefits increase components - The increase in wages and benefits is driven by market conditions and finalized CBA negotiations, with expectations for lower growth next year [60][61] Question: RevPAR growth cadence in the second half - Management expects better performance in Q4 due to favorable calendar shifts and ongoing renovations impacting group pace in Q3 [64][66] Question: Transaction environment and acquisition opportunities - The debt capital markets are active, with a notable pickup in transaction activity, although the company is currently focused on investing in its existing assets rather than acquisitions [70][73]