Host Hotels & Resorts(HST) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed consolidated financial statements for Host Inc. and Host L.P. for Q1 2025 Host Inc. Key Financials (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $1,594 million | $1,471 million | | Operating Profit | $285 million | $291 million | | Net Income Attributable to Host Inc. | $248 million | $268 million | | Diluted EPS | $0.35 | $0.38 | - The report combines the filings for Host Inc., a REIT, and Host L.P., a partnership, which are operated as a single enterprise with substantially similar assets and liabilities[10][11] Financial Statements for Host Hotels & Resorts, Inc. Host Inc.'s Q1 2025 financials show $1.594 billion revenues, $248 million net income, and $12.9 billion assets Host Inc. Condensed Consolidated Balance Sheet (in millions) | | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $12,947 | $13,048 | | Total Debt | $5,085 | $5,083 | | Total Liabilities | $6,161 | $6,271 | | Total Equity | $6,653 | $6,612 | Host Inc. Condensed Consolidated Statement of Cash Flows (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $305 | $365 | | Net cash used in investing activities | ($83) | ($100) | | Net cash used in financing activities | ($327) | ($44) | Financial Statements for Host Hotels & Resorts, L.P. Host L.P.'s Q1 2025 financials mirror Host Inc.'s operations, differing primarily in capital structure Host L.P. Condensed Consolidated Statement of Operations (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $1,594 | $1,471 | | Operating Profit | $285 | $291 | | Net Income Attributable to Host L.P. | $251 | $272 | - The balance sheet for Host L.P. shows total assets and liabilities substantially the same as Host Inc., with the key difference being the presentation of capital broken down into General Partner, Limited Partner, and other interests[12][29] Notes to Condensed Consolidated Financial Statements Notes detail company structure, 81-hotel portfolio, share repurchases, and hurricane damage recovery - As of March 31, 2025, the company's consolidated portfolio consisted of 81 hotels, with 76 in the United States, 3 in Brazil, and 2 in Canada[40] - During Q1 2025, the company repurchased 6.3 million shares of common stock for $100 million[55] - The Don CeSar hotel, damaged by hurricanes in 2024, reopened on March 26, 2025, with the company receiving $20 million in insurance proceeds and recognizing a $10 million gain for business interruption in Q1 2025[69][70] - In February 2025, a $79 million loan receivable was repaid in full[60] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 performance, highlighting 8.4% revenue growth and strong liquidity Q1 2025 Performance Highlights vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,594M | $1,471M | +8.4% | | Net Income | $251M | $272M | -7.7% | | Adjusted EBITDAre | $514M | $489M | +5.1% | | Adjusted FFO per diluted share | $0.64 | $0.61 | +4.9% | | Comparable hotel RevPAR | $240.18 | $224.52 | +7.0% | - The company maintains its full-year 2025 comparable hotel RevPAR growth guidance of 0.5% to 2.5%, despite acknowledging macroeconomic uncertainty from trade policy and high interest rates[88] - Total capital expenditures for 2025 are expected to be between $580 million and $670 million, including restoration work and ROI projects[93] Operating Results and Outlook Q1 2025 revenues rose 8.4% to $1.594 billion, but net income declined 7.7% due to lower insurance gains - Revenue growth was driven by a 5.7% increase in room rates at comparable hotels and strong group business, with notable performance in Washington D.C. and New Orleans[80][82] - Operating profit margin under GAAP declined 190 basis points to 17.9%, mainly due to lower insurance gains, while comparable hotel EBITDA margin increased by 30 basis points to 31.8%[83] - The economic outlook is tempered by uncertainty around trade policy, government spending, and high interest rates, with consensus expectations for U.S. GDP growth in 2025 revised downward[86] Strategic Initiatives The company is executing capital projects, including Don CeSar restoration and a transformational program - Full-year 2025 capital expenditures are forecasted to be $580 million to $670 million[93] - The Don CeSar hotel reopened in a phased manner on March 26, 2025, following hurricane restoration efforts[90] - The company is collaborating with Hyatt on a transformational capital program for six properties, with Hyatt providing operating profit guarantees to offset disruption[91] Results of Operations Q1 2025 revenues increased 8.4% driven by rooms and F&B, offset by rising property expenses Q1 2025 Revenue Breakdown (in millions) | Revenue Source | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Rooms | $938 | $853 | +10.0% | | Food and beverage | $503 | $473 | +6.3% | | Other | $153 | $145 | +5.5% | | Total revenues | $1,594 | $1,471 | +8.4% | - Wages and employee benefits, constituting about 57% of key departmental expenses, are a primary driver of cost increases, with wage and benefit rate inflation expected to be around 6% in 2025[101] - For comparable hotels, group revenue increased 5.9% and transient revenue increased 4.7% in Q1 2025 compared to the prior year[124][127] Liquidity and Capital Resources The company maintains strong liquidity with $428 million cash, $1.5 billion credit, and $5.1 billion debt - Total debt was $5.1 billion with a weighted average maturity of 5.0 years, and 80% of the debt has a fixed interest rate[143] - In Q1 2025, the company repurchased 6.3 million shares of common stock for $100 million, with $585 million remaining available under the repurchase program[133] - The company is in compliance with all financial covenants for its credit facility and senior notes, with a Leverage Ratio of 2.8x against a maximum of 7.25x[145][146] Non-GAAP Financial Measures Defines and reconciles non-GAAP measures; Q1 2025 Adjusted EBITDAre increased 5.1% to $514 million Reconciliation of Net Income to Adjusted EBITDAre (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $251 | $272 | | Adjustments (Interest, D&A, Taxes, etc.) | $257 | $230 | | EBITDAre | $508 | $504 | | Adjustments to EBITDAre | $6 | ($15) | | Adjusted EBITDAre | $514 | $489 | Reconciliation to Adjusted FFO (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income Attributable to Host Inc. | $248 | $268 | | Adjustments | $192 | $158 | | NAREIT FFO | $440 | $426 | | Non-cash stock-based compensation | $6 | $6 | | Adjusted FFO | $446 | $432 | Item 3. Quantitative and Qualitative Disclosures about Market Risk Company faces interest rate and foreign currency risks, mitigated by 80% fixed-rate debt and forward contracts - As of March 31, 2025, 80% of the company's outstanding debt carried fixed interest rates, reducing sensitivity to interest rate changes[184] - The company manages foreign currency risk from its Canadian operations with two forward purchase contracts totaling CAD 99 million ($73 million), maturing in August 2025[186] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of March 31, 2025, with no material changes - The CEO and CFO concluded that disclosure controls and procedures for both Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. are effective[188][190] - There were no material changes to internal control over financial reporting during the first quarter of 2025[189][191] PART II. OTHER INFORMATION Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details Host Inc.'s Q1 2025 stock repurchases of 6.3 million shares for $100 million Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share* | | :--- | :--- | :--- | | Jan 2025 | — | — | | Feb 2025 | 1,306,838 | $16.14 | | Mar 2025 | 5,025,325 | $15.70 | | Total | 6,332,163 | $15.79 | - As of March 31, 2025, the company had $585 million remaining under its publicly announced share repurchase program[194] Item 5. Other Information No director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement in Q1 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the reporting period[199] Item 6. Exhibits Lists exhibits including CEO/CFO certifications and Inline XBRL financial data files - The exhibits filed with this report include CEO/CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act for both Host Inc. and Host L.P.[202] - The report includes financial data formatted in Inline XBRL (iXBRL) as part of Exhibit 101[202][204][205]