Host Hotels & Resorts
Annual Report 2013

Plain-text annual report

H o s t H o t e l s & R e s o R t s 2013 AnnuAl RepoRt H o s t H o t e l s & R e s oRt s 2013 AnnuAl RepoRt F I n a n C I a l H I g H l I g H t s (u n a u d i t e d ) oPeRatIng data Revenues operating profit net income (loss) (in millions) dIluted eaRnIngs (loss) PeR Common sHaRe earnings (loss) from continuing operations diluted earnings (loss) diluted weighted average shares outstanding (in millions) (in millions) Bal anCe sHeet data total assets total debt total equity otHeR data adjusted eBItda (1) (in millions) naReIt funds from operations per diluted share (1) adjusted funds from operations per diluted share (1) stock price on december 31st ComPaRaBle Hotel data(2) number of properties number of rooms average room rate (3) occupancy percentage RevPaR (3) 20 1 3 20 12 20 1 1 $ 4,714 309 (16) $ (.04) $ (.02) 693.0 $ 13,090 5,753 6,713 $ 1,018 .89 .92 14.77 $ 5,166 512 325 $ .27 $ .42 747.9 $12,814 4,759 7,262 $ 1,306 1.26 1.31 19.44 105 55,278 $198.72 76.0% $151.12 $ 5,059 362 63 $ (.01) $ .08 719.6 $12,994 5,411 6,859 $ 1,190 1.04 1.10 15.67 105 55,278 $190.26 75.1% $142.82 (1) naReIt Funds From operations (FFo) and adjusted FFo per diluted share and adjusted earnings before Interest expense, Income taxes, depreciation, amortization and other items (adjusted eBItda) are not generally accepted accounting principles (gaaP) financial measures within the meaning of the rules of the securities & exchange Commission. these measures have been reconciled to comparable gaaP measures. see page 16 of this report. (2) We define our comparable hotels as properties that are owned or leased by us and the operations of which are included in our consolidated results, whether as continuing opera- tions or discontinued operations, for the entirety of the reporting periods being compared, and that have not sustained substantial property damage or business interruption or undergone large-scale capital projects during the reporting periods being compared. (3) Room revenue per available room (“RevPaR”) represents the combination of average daily room rate charged and the average daily occupancy achieved, and is a commonly used indicator of hotel performance. RevPaR does not include food and beverage or other ancillary revenues generated by the property. average room rate and RevPaR are presented on a constant us$ basis, which presents 2012 results using the same exchange rates that were effective for the comparable periods in 2013, thereby eliminating the effect of currency fluctuation for the year-over-year comparisons. our annual Report on Form 10-K filed with the securities and exchange Commission is included in our mailing to stockholders and together with this 2013 annual Report forms our annual report to stockholders within the meaning of seC rules. a d j u s t e d F F o P e R s H a R e a d j u s t e d e B I t d a (in millions) t o t a l R e v e n u e s (in millions) $1.40 $1,300 $5,200 1.20 1.00 0.80 0.60 1,200 1,100 1,000 900 5,000 4,800 4,600 4,400 2011 2012 2013 2011 2012 2013 2011 2012 2013 M a n c h e s t e r G r a n d h y a t t s a n d i e G o T H E W E s T i n s E a T T l E s W i s s Ô t e l c h i c a G o B o s t o n M a r r i o t t c o P l e y P l a c e W n e W y o r k – U n i o n s q U a r e l E M é r i d i E n P i c c a d i l l y ConsolIdated Hotels joInt ventuRe Hotels Hotels undeR develoPment CoRPoRate HeadQuaRteRs RegIonal oR joInt ventuRe oFFICe P R e m I u m B R a n d s P R I m e loC a t I o n s Host Hotels & ResoRts Is tHe PRemIeR HosPItalIty Real estate ComPany WItH Investments In HIgH QualIty Hotels In Key maRKets aRound tHe gloBe. our long-term goal is to maximize stockholder value through disciplined and oppor- tunistic capital allocation and sound financial management. We are invested in 138 hotels directly or through joint ventures across the united states and around the globe, focusing on gateway cities and resort locations that have significant barriers to entry and that are positioned to attract premium corporate, leisure and international travelers. our properties are operated by world-class operators with well established brands that we believe will help provide attractive returns on our investment. With assets in key markets such as new york, Washington, d.C., Chicago, san Francisco, los angeles, Rio de janeiro, melbourne, london and Paris, we believe our portfolio is unmatched and the potential for growth is strong. ibis and novoTEl auckland EllErsliE HoTEls b r u s s E l s M a r r i o T T H o t e l s B y m a R K e t (as a percent of revenues) H i l T o n M E l b o u r n E s o u T H W H a r f T H E f a i r M o n T k E a l a n i , M a u i h a r B o r B e a c h M a r r i o t t r e s o r t & s Pa sheraton santiaGo hotel & convention center r e n a i s s a n c e P a r i s v e n d o M e h o t e l t h e W e s t i n e U r o P a & r e G i n a , v e n i c e The brands and logos listed above are the trademarks of our managers or their affiliates. The trademarked names and their logos are the property of their respective owners and are being used with the express permission of their owners. None of the owners of these trademarks has any responsibility or liability for any information contained in this Annual Report. H ot e l s B y C l a s s (as a percent of revenues) 3 Boston 3 new york 3 Washington, d.C. 3 Florida 3 Chicago 3 Houston 3 seattle 3 san Francisco 3 los angeles 3 san diego 3 Hawaii 3 asia/Pacific 3 latin america 3 europe 3 other 3 luxury Hotels 24% 3 upper upscale Hotels 73% 3 other 3% on the cover: the ritz-carlton, naPles t o o u R s t o C K H o l d e R s host hotels & resorts had a very sUccessfUl year in 2013, strenGtheninG oUr Position as the nation’s PreMier oWner of lodGinG real estate. We have reMained disciPlined in the execUtion of oUr lonG-terM strateGy, a PhilosoPhy that has driven oUr sUccess over the Past 20 years. We reMain focUsed on the oWnershiP of lUxUry, UPPer UPscale and UPscale UrBan and resort/conference ProPerties in PriMe destinations in the United states, eUroPe, latin aMerica and asia/Pacific reGions. oUr exPerienced ManaGeMent teaM is focUsed on enhancinG the retUrns of oUr existinG hotels By iMProvinG oPerations and selectively investinG in hiGh- yield caPital Projects. carefUl steWardshiP of oUr financial resoUrces has ProdUced the stronGest and Most flexiBle Balance sheet in oUr history. the coMBination of these efforts has enaBled ManaGeMent to drive oPeratinG PerforMance and iMProve stockholder valUe. our 2013 operating performance marked the fourth straight year of strong increases in comparable RevPaR, with growth of 5.8% on a constant dollar basis. our results were driven first by strong demand which allowed us to drive rate in both our group and transient segments, and, second and equally impor- tant, by excellent cost controls which led to another year of strong margin improvement. some of the highlights for the last twelve months include: 3 adjusted Funds from operations increased 19% to $1.31 per diluted share, while adjusted eBItda grew almost 10% to $1.306 billion. net income for the year was $325 million, while diluted earnings per common share was $0.42; 3 We acquired two exceptionally well-located hotels in target markets: the Hyatt Place Waikiki Beach in may for $139 mil- lion and then, in the first quarter of 2014, the Powell street Hotel in san Francisco for $75 million, including the fee simple interest in both properties. the Powell street Hotel W. edWaRd WalteR President and Chief Executive Officer RICHaRd e. maRRIott Chairman of the Board d I v I d e n d s d e C l a R e d (per share) $0.50 0.40 0.30 0.20 0.10 0 2011 2012 2013 includes over 8,500 square feet of retail space that is subject to a long-term retail lease with sephora, a leading provider of perfume and cosmetics. We also expanded our presence in europe, acquiring the sheraton stockholm Hotel in sweden through our joint venture; 3 We further refined the allocation of our portfolio by disposing of seven properties in 2013 and early 2014 for a total sales price of $960 million, including the sale of an 89% interest in the Philadelphia marriott downtown in january 2014. these sales included the disposition of properties that are located in non-target markets, or where we were otherwise able to opportunistically take advantage of attractive pricing; 3 We invested $133 million in redevelopment and return on investment capital projects that were designed to increase profitability of our properties. these projects included the redevelopment of the pool area, including new waterslides, activity areas and dining facilities at the orlando World Center marriott and the completion of a new 20,000 square foot ballroom at the newark airport marriott in time for the 2014 super Bowl at the nearby metlife stadium; 3 We successfully negotiated a 40-year extension of the ground lease for the Houston airport marriott. We also com- pleted negotiations of management agreements that resulted in enhancing or obtaining franchise rights on five hotels, including the recent conversion of the memphis marriott downtown to the sheraton memphis downtown; 3 We celebrated the opening of the Hyatt Place nashville downtown in november 2013, a joint development project with White lodging services, whose early operating perfor- mance has significantly exceeded our expectations; debt thereby significantly reducing average interest rates and lengthening our average debt maturities, further solidifying the investment grade rating for our senior debt; 3 In 2013, we declared over $345 million in dividends, or $0.46 per share in 2013, representing a 53% increase over the prior year. on February 19, 2014, we announced the thirteenth straight increase in our quarterly dividend to $0.14 per common share. as we look to 2014, we continue to believe that the strong overall fundamentals in the lodging industry should drive improve- ments in RevPaR growth and operating results. through our continual focus on quality and our disciplined approach to capital allocation, we have structured a premium portfolio that is well- positioned to reap the benefits of the improving economies in our target markets. at the same time, our prudent financial manage- ment means that we will be able to timely execute on opportunities throughout the lodging cycle. We are convinced that our combination of quality assets, financial strength and management expertise creates an attrac- tive opportunity for our company and investors. We appreciate your support and will continue to strive for increased stock- holder value. RICHaRd e. maRRIott Chairman of the Board W. edWaRd WalteR President and Chief Executive Officer 3 We continued to lower our leverage levels through improved asset values and debt reduction. We also refinanced existing march 21, 2014 3 1 0 2 s t R o s e R & s l e t o H t s o H | 3 g at e Way C I t I e s , g l o B a l m a R K e t s From london to new york, san Francisco to Rio de janeiro, melbourne to los angeles…our portfolio of hotels is truly diversified in terms of brand and global presence. We believe one of the keys to success in the lodging industry is being the owner of the best assets, in prime locations with multiple demand drivers both for business and leisure travelers to enhance growth and profitability over the long term. With the increasing interdependency of econo- mies around the world, we have remained focused on major met- ropolitan markets and international vacation destinations in order to capture the ever-expanding pool of global travelers. In the u.s., these markets include Boston, new york, Washington, d.C., miami, Chicago, Houston, los angeles, san Francisco, san diego, seattle and Hawaii. since 2002, as a result of our persistent efforts to assemble an unmatched collection of premier properties, the per- centage of revenues from our target markets has increased from approximately 55% to over 75%, which we believe will enable our portfolio to outperform the industry over the long term. through our european joint venture, we have invested in superior assets that are primarily located in urban areas with rich cultural histories and recognized global centers of commerce and tourism. our focus is on markets such as munich and Barcelona where we believe opportunities exist to acquire quality assets at attractive yields that exceed our cost of capital. over the last 24 months, our investment in our joint venture in europe has nearly doubled, as we have acquired assets totaling approximately $745 million, including the 192-room le méridien grand Hotel nuremberg in germany and the 465-room sheraton stockholm Hotel in sweden. In latin america, we have pursued a combination of acquisition and development as the lodging industry in this region continues to mature, providing favorable long-term growth prospects. While we M i a M i M a r r i o T T b i s c a y n E b a y J W M a r r i o T T H o T E l r i o d E J a n E i r o 3 1 0 2 s t R o s e R & s l e t o H t s o H | 4 own properties in Chile, mexico and Brazil, we have focused the majority of our efforts in this region on opportunities in Rio de janeiro and são Paulo, as we believe that the increased investment in infra- structure and international demand generated by the 2014 FIFa World Cup and 2016 olympics provide a strong foundation for continued growth. In 2014, we expect to complete the $67 million development of the 256-room ibis and 149-room novotel properties which are centrally located near olympic and soccer venues. We also continue to explore opportunities in the asia/Pacific region. In australian markets, such as sydney and Brisbane, and in japanese markets, such as tokyo and Kyoto, we are concentrating on both acquiring upper upscale hotels and the development or conversion of upscale hotels. our owned and joint venture properties in australia and new Zealand had solid growth in 2013 and we look to build on that success in 2014. H o t e l s B y P R o P e R t y t y P e (as a percent of revenues) 3 urban 64% 3 Resort/Conference 19% 3 suburban 11% 3 airport 6% l E M é r i d i E n G r a n d H o T E l n u r E M b E r G (Joint venture Hotel) 3 1 0 2 s t R o s e R & s l e t o H t s o H | 5 C a P I ta l a l l o C at I o n & va l u e e n H a n C e m e n t sa n diE Go M a r r i o T T M a r q u i s & M a r i n a We are committed to designing and executing strategies to achieve the highest and best use of our assets. over the past three years, we have invested over $600 million in redevelopment and return- on-investment projects, which are designed to increase cash flow and improve profitability by capitalizing on changing market conditions and the favorable locations of our properties. Projects such as the redevelopment of the sheraton Indianapolis Hotel at R e d e v e l o P m e n t a n d R o I P R o j e C t s s P e n d I n g (in millions) $300 250 200 150 100 50 0 2011 2012 2013 Keystone Crossing, which included the conversion of one of the hotel towers to apartment residences and the extensive, multi-year renovation of the atlanta marriott Perimeter Center, have gener- ated average RevPaR growth in 2013 of almost twice the rate of our comparable portfolio. We also pursue creative strategies that increase value and profitability of our properties. during 2013, we increased our commitment to the Houston airport marriott by successfully negotiating a 40-year extension of the ground lease and the management agreement. We will invest approximately $35 mil- lion to renovate all of the guestrooms, elevators and public areas beginning later this year. similarly, we agreed to invest $23 million in the Calgary marriott in return for favorable changes to the management agreement on that hotel and new or enhanced franchise rights on three additional properties. We seek to maximize the highest and best use of all aspects of our hotels. during 2013, we sold four acres of underutilized land adjacent to our newport Beach marriott Hotel & spa for $24 million for the development of condominiums. our joint venture with Hyatt Residential group expects to open the 131-unit vacation ownership project that is adjacent to our Hyatt Regency maui Resort & spa in the fourth quarter of this year. our contribution to the joint venture included land used as a beachfront parking lot. We also expect the current redevelop- ment of the retail space and signage component of the new york marriott marquis by vornado Realty trust to be completed in early 2015. In addition to significantly higher rental income, this project promises a dramatic improvement of the property’s presence on times square. as part of our overall portfolio strategy, we continually look to recycle capital out of assets that do not fit our core portfolio. these are generally properties where we can capitalize on attrac- tive pricing and apply the proceeds to other business objectives, the potential for growth is slower, or where the long-term capital needs are higher. s H E r a T o n i n d i a n a P o l i s H o T E l a T k E y s T o n E c r o s s i n G 3 1 0 2 s t R o s e R & s l e t o H t s o H | 6 s a n d i E G o M a r r i o T T M a r q u i s & M a r i n a s H E r a T o n s T o c k H o l M H o T E l (Joint venture Hotel) T H E W E s T i n c H i c a G o r i v E r n o r T H TH E W EsTi n c Hi c a Go ri vEr no rT H s u P e R I o R a s s e t m a n a g e m e n t acquiring a world-class portfolio is just one component of becoming the premier lodging real estate investment trust. evaluating and executing on a plan to position each property to take advantage of specific demand drivers in individual markets requires a diversity of approaches and is critical in driving profitability in the long run It may mean upgrading the lobby/restaurant experience to cater to the corporate traveler in new york City, modernizing the meeting space to enhance group and convention business in Chicago, or enhancing the luxurious world-class golf and spa facilities in naples, Florida. We anticipate our guests’ requirements and implement on plans to meet those needs, helping to drive bottom line results. a perfect example of the creative application of new approaches by our asset management team is the dramatic improvements in the food & beverage platforms at our proper- ties. Beginning in 2010, we undertook an in-depth analysis of our outlets to identify opportunities to improve profitability across the portfolio, which includes outsourcing and the devel- opment of a new restaurant prototype. since 2011, we have renovated 25 restaurants which have subsequently experienced double digit growth in revenues when compared to the pre- renovation year. Based on our early successes, we are pursuing opportunities at eleven additional outlets in 2014. our core portfolio of well-located hotels is designed to take advantage of the growth in group business. our asset and revenue management teams work with our operators to develop an optimal business mix for each property, including the appropriate base of group business in order to drive higher transient rates and improve overall revenue growth. In 2013, these efforts resulted in RevPaR for our comparable domestic portfolio outperforming the industry by fifty basis points. In addition to driving revenues at our properties, we work extensively with our operators and apply our business intelligence system to control costs and drive profitability by employing best practices. While we have focused on improving individual hotel H o t e l s B y B R a n d (as a percent of revenues) 3 marriott 3 Ritz Carlton 3 Hyatt 3 W, st. Regis 3 the Westin, le meridien 3 sheraton 3 Hilton 3 Fairmont 3 novotel, ibis, Pullman 3 other operations and profitability, our long-term relationships with a diverse mix of world-class operators and our position as the nation’s largest lodging ReIt permits us to more broadly influence our operators’ business practices providing further opportunities to reduce costs across our portfolio. as detailed later in our corporate responsibility section, this often entails enlisting the latest technologies and strategies to improve energy efficiency and reduce our carbon footprint. It is a part of our overall strategy that we believe is important not just for our bottom-line, but for the communities in which we operate as well, both locally and globally. s a n f r a n c i s c o M a r r i o T T M a r q u i s H y a T T P l a c E n a s H v i l l E d o W n T o W n (Joint venture Hotel) 3 1 0 2 s t R o s e R & s l e t o H t s o H | 11 F I n a n C I a l m a n a g e m e n t an essential factor in producing consistent growth and stockholder value is sound financial management. We made significant progress towards achieving a rock-solid balance sheet by reducing our leverage, lowering interest expense and extending debt maturities. since january 1, 2013, including transactions that have occurred in the first quarter of 2014, we have made the following strides: 3 We reduced our total debt balance by $1.3 billion with only 3% of our revenues being derived from properties with mortgage debt; 3 We decreased our weighted average interest rate by 45 basis points to 4.95%; 3 We lengthened our weighted average debt maturity to six years with no more than 16% of our debt maturing in any one year prior to 2023; 3 We lowered our annual cash interest expense payments by over 50%, or approximately $205 million since 2007; and, 3 We have increased our fixed charge coverage ratio by over 160 basis points since 2007. as a result of these efforts, all of our financial credit statistics are stronger than at the peak of the last cycle. Importantly, we are very close to achieving our leverage target of 3.0x and expect to meet that goal by the end of 2014. We believe that lower leverage reduces our overall cost of capital and earnings volatility and increases access to capital, thereby providing the necessary flexibility to take advantage of opportunities throughout the lodging cycle, which we consider a key competitive advantage. H y a T T P l a c E W a i k i k i b E a c H 3 1 0 2 s t R o s e R & s l e t o H t s o H | 12 In 2013, the benefits of our sound financial management truly came to the fore. after achieving an investment grade rating on our senior notes from moody’s Investors service and standard & Poor’s Ratings services we issued $400 million of senior notes at an interest rate of 3.75%, using the proceeds to repay debt with a higher interest rate. In 2014, Fitch Ratings also upgraded our senior notes to investment grade, while standard & Poor’s Rating services further upgraded its rating citing our balanced maturity schedule and access to multiple types of financing, as almost 90% of our debt consists of senior unsecured notes, includ- ing our exchangeable debentures and borrowings under our credit facility. the strength of our balance sheet, with ample liquidity and access to the capital markets, allows us to take advantage of investment opportunities that provide stockholder value. d e B t B a l a n C e s (in millions) $6,000 5,000 4,000 3,000 2,000 1,000 0 2011 2012 2013 3 secured debt 3 unsecured debt H y a T T P l a cE W a i k i k i b Ea cH s H E r a T o n b o s T o n H o T E l H y a T T r E G E n c y W a s H i n G T o n o n c a P i T o l H i l l 3 1 0 2 s t R o s e R & s l e t o H t s o H | 13 TH E W EsTi n n E W y o r k G r a n d c EnTr a l C o R P o R at e R e s P o n s I B I l I t y We focus on delivering measurable results through our corporate responsibility program—enhancing our management approach, deploying sustainability projects and engaging with our operators on environmental performance targets. as a result of these and other efforts, we were recognized as a member of 2013 CdP’s s&P 500 Climate Performance leadership Index and achieved the “green star” status from the global Real estate sustainability Benchmark. our management team maintains a deep focus on three themes: Responsible Investment, environmental stewardship and Corporate Citizenship: 3 Investing responsibly means reducing our environmental impact and creating value for our stockholders. We have established criteria to evaluate and monitor our progress of the sustainability elements of our renovations, as well as developed new methodologies to evaluate sustainability opportunities for our acquisitions. 3 environmental stewardship requires a long term commit- ment. during the period from 2008–2013, we reduced our carbon intensity per square foot by 11.6%, positioning us to meet our reduction target. We also continued to increase water efficiency across our portfolio—for example, at the Hyatt Regency maui Resort & spa, we have reduced total water consumption by nearly 30% during this timeframe. 3 Practicing good corporate citizenship means using our time and resources to make a difference. We supported over 125 national and local community causes and organizations. our employees volunteered more than 600 hours of community service, including blood drives, river clean-up events and working with Habitat for Humanity metro maryland to build 19 affordable townhomes. our commitment to these goals was evident in three recently completed investment projects. our renovation of the Ritz- Carlton, naples was embedded with sustainability in the design with the addition of all new guestroom and corridor HvaC units networked to an energy management system, led lighting within each guestroom, new high-efficiency central chillers, boilers and air handlers, as well as led fixtures and lamps throughout the renovated food and beverage outlets. the renovation and redesign of the pool complex at the orlando World Center marriott incorporated functional sustainable design elements including energy efficient pumps with variable frequency drives, led lighting, a pool-deck system that reduces the heat island effect and locally-sourced concrete and pavers. the Westin new york grand Central features energy efficient lighting in guestrooms and public spaces, low-flow plumbing fixtures, and materials made from recycled content. the hotel also hosts a restaurant serving locally-sourced food and organic wines. Visit the updated Corporate Responsibility section on our website for more information on our program and progress on our three themes. H a b i T a T f o r H u M a n i T y o r l a n d o W o r l d c E n T E r M a r r i o T T 3 1 0 2 s t R o s e R & s l e t o H t s o H | 14 T H E W E s T i n n E W y o r k G r a n d c E n T r a l s e l e C t e d F I n a n C I a l d ata Reconciliation of net income (loss) to naReit and adjusted funds fRom opeRations peR diluted shaRe (a) ( U N A U D I T E D, I N M I L L I O N s , E X C E P T P E R s H A R E A M O U N T s ) 2013 2012 20 11 y e a R e n d e d d e C e m B e R 31, net InCome (loss) less: net (income) loss attributable to non-controlling interests net InCome (loss) avaIl aBle to Common stoCKHoldeRs adjustments: gain on dispositions, net of taxes gain on property insurance settlement amortization of deferred gains and other property transactions, net of taxes depreciation and amortization non-cash impairment expense equity in (earnings) losses of affiliates Pro rata FFo of equity investments FFo adjustment for non-controlling partnerships FFo adjustments for non-controlling interests of Host lP naReIt funds from operations adjustments to naReIt FFo: loss on debt extinguishment acquisition costs Recognition of deferred gain on land condemnation litigation loss loss attributable to non-controlling interests adjusted FFo adjustments for dilutive securities (b): assuming conversion of exchangeable senior debentures assuming deduction of interest—redeemed/exchanged 2004 exchangeable senior debentures diluted naReIt FFo (a) diluted adjusted FFo (a) diluted weighted average shares outstanding – ePs diluted weighted average shares outstanding – naReIt FFo and adjusted FFo naReIt FFo PeR dIluted sHaRe (a) adjusted FFo PeR dIluted sHaRe (a) Reconciliation of net income (loss) to eBitda and adjusted eBitda(a) ( U N A U D I T E D, I N M I L L I O N s ) net InCome (loss) Interest expense depreciation and amortization Income taxes discontinued operations eBItda gain on dispositions acquisition costs Recognition of deferred gain on land condemnation litigation loss gain on property insurance settlement non-cash impairment expense amortization of deferred gains and other property transactions equity investment adjustments: equity in (earnings) losses of affiliates Pro rata adjusted eBItda of equity investments Consolidated partnership adjustments: Pro rata adjusted eBItda attributable to non-controlling partners in consolidated partnerships $ 325 (8) $ 63 (2) $ (16) 1 317 (97) — — 703 1 17 26 (8) (8) 951 40 1 (11) 8 — 61 (48) (2) (4) 691 60 (2) 20 (7) (10) 759 35 10 — — (1) (15) — — (7) 645 8 (4) 14 (6) (9) 626 10 8 — 5 — $ 989 $ 803 $ 649 26 — $ 977 $1,015 747.9 777.4 $ 1.26 $ 1.31 31 — $ 790 $ 834 719.6 760.0 $ 1.04 $ 1.10 30 2 $ 658 $ 681 693.0 739.5 $ .89 $ .92 y e a R e n d e d d e C e m B e R 31, 2013 2012 20 11 $ 325 304 696 21 15 1,361 (98) 1 (11) 8 — 1 — 17 48 (21) $ 63 373 662 31 32 1,161 (48) 7 — — (2) 60 (4) (2) 34 (16) $ (16) 371 601 (1) 46 1,001 — 5 — — — 8 (7) (4) 29 (14) adjusted eBItda(a) $1,306 $1,190 $1,018 (a) For further discussion of why we believe naReIt FFo and adjusted FFo per diluted share and adjusted eBItda are useful supplemental measures of our performance and the limitations on their use, see our annual Report on Form 10-K included in our mailing to stockholders. (b) naReIt FFo and adjusted FFo per diluted share are adjusted for the effects of dilutive securities. dilutive securities may include shares granted under comprehensive stock plans, preferred oP units held by non-controlling partners, exchangeable debt securities and other non-controlling interests that have the option to convert their limited partnership interest to common oP units. no effect is shown for securities if they are anti-dilutive. 3 1 0 2 s t R o s e R & s l e t o H t s o H | 16 richard E. Marriott Chairman of the Board W. Edward Walter President, Chief Executive Officer Mary l. baglivo 2 Vice President for Global Marketing and Chief Marketing Officer, Northwestern University W. Edward Walter President, Chief Executive Officer Elizabeth a. abdoo Executive Vice President, General Counsel and secretary James f. risoleo Executive Vice President & Managing Director, Europe Peter T. Meyer Managing Director, Asia brian G. Macnamara senior Vice President, Corporate Controller CoRPoRate HeadQuaRteRs Host Hotels & Resorts, Inc. 6903 Rockledge drive, suite 1500 Bethesda, md 20817 240/744-1000 WeBsIte visit the company’s website at: www.hosthotels.com stoCK exCHange lIstIng new york stock exchange ticker symbol: Hst stoCKHoldeRs oF ReCoRd 24,750 at February 21, 2014 d I R e C to R s sheila c. bair 1 senior Advisor, Pew Charitable Trusts robert M. baylis 2, 3 Terence c. Golden Chairman, Bailey Capital Corporation ann Mclaughlin korologos 2, 3 John b. Morse, Jr. 1, 3 m a n a g e m e n t t e a m Gregory J. larson Executive Vice President, Chief Financial Officer Minaz b. abji Executive Vice President, Asset Management Gerard E. Haberman Managing Director, Global Development Design and Construction Jeffrey s. clark senior Vice President, Global Tax and Foreign JV Accounting sukhvinder singh senior Vice President, Information Technology Walter c. rakowich 1, 3 Gordon H. smith 2 President, Chief Executive Officer National Association of Broadcasters 1 Audit Committee 2 Compensation Policy Committee 3 Nominating and Corporate Governance Committee struan b. robertson Executive Vice President, Chief Investment Officer Joanne G. Hamilton Executive Vice President, Human Resources Timothy a. Marvin Managing Director, Americas Elisa c. Gois senior Vice President, Global Business strategy & Analytics nathan s. Tyrrell senior Vice President, Treasurer C o R P o R at e I n F o R m at I o n RegIstRaR and tRansFeR agent If you have any questions concerning transfer pro ce dures or other stock account matters, please contact the transfer agent at the following address: Computershare trust Company, n.a. shareholder Relations P.o. Box 30170 College station, tx 77842-3170 866/367-6351 Common stoCK s t o C K P R I C e H I g H l o W d I v I d e n d s d e C l a R e d P e R s H a R e $17.25 17.06 16.30 17.25 $17.73 18.77 18.70 19.44 $14.71 14.11 14.06 13.78 $16.14 16.02 16.41 17.09 $0.06 0.07 0.08 0.09 $0.10 0.11 0.12 0.13 2012 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2013 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter IndePendent RegIsteRed PuBlIC aCCountants KPmg llP, mclean, va annual meetIng the 2014 annual meeting of stockholders will be held at 11 a.m., may 14, 2014, at the Ritz-Carlton, tysons Corner, 1700 tysons Boulevard, mclean, virginia, 22102. design: vivo design inc., pRinting: westlAnd pRinteRs, inc. 3 1 0 2 s t R o s e R & s l e t o H t s o H | 6 6903 R o C K l e d g e d R I v e , s u I t e 150 0 B e t H e s d a , m a R y l a n d 2 0 8 17 

Continue reading text version or see original annual report in PDF format above