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UNITED STATES | ||
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SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the quarterly period ended June 30, 2013
OR
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¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
Commission File Number: 001-14625 (Host Hotels & Resorts, Inc.)
0-25087 (Host Hotels & Resorts, L.P.)
HOST HOTELS & RESORTS, INC.
HOST HOTELS & RESORTS, L.P.
(Exact name of registrant as specified in its charter)
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Maryland (Host Hotels & Resorts, Inc.) Delaware (Host Hotels & Resorts, L.P.) (State or Other Jurisdiction of Incorporation or Organization) |
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53-008595 52-2095412 (I.R.S. Employer Identification No.) |
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6903 Rockledge Drive, Suite 1500 Bethesda, Maryland (Address of Principal Executive Offices) |
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20817 (Zip Code) |
(240) 744-1000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Host Hotels & Resorts, Inc. |
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Yes þ |
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No ¨ |
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Host Hotels & Resorts, L.P. |
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Yes þ |
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No ¨ |
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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Host Hotels & Resorts, Inc. |
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Yes þ |
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No ¨ |
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Host Hotels & Resorts, L.P. |
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Yes þ |
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No ¨ |
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Host Hotels & Resorts, Inc. |
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Large accelerated filer þ |
Accelerated filer ¨ |
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Non-accelerated filer (Do not check if a smaller reporting company) ¨ |
Smaller reporting company ¨ |
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Host Hotels & Resorts, L.P. |
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Large accelerated filer ¨ |
Accelerated filer ¨ |
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Non-accelerated filer (Do not check if a smaller reporting company) þ |
Smaller reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Host Hotels & Resorts, Inc. |
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Yes ¨ |
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No þ |
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Host Hotels & Resorts, L.P. |
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Yes ¨ |
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No þ |
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As of August 2, 2013 there were 750,030,597 shares of Host Hotels & Resorts, Inc.’s common stock, $.01 par value per share, outstanding.
EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q of Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. Unless stated otherwise or the context requires otherwise, references to “Host Inc.” mean Host Hotels & Resorts, Inc., a Maryland corporation, and references to “Host L.P.” mean Host Hotels & Resorts, L.P., a Delaware limited partnership, and its consolidated subsidiaries, in cases where it is important to distinguish between Host Inc. and Host L.P. We use the terms “we” or “our” or “the company” to refer to Host Inc. and Host L.P. together, unless the context indicates otherwise.
Host Inc. operates as a self-managed and self-administered real estate investment trust (“REIT”). Host Inc. owns properties and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 98.7% of the partnership interests (“OP units”). The remaining OP units are owned by various unaffiliated limited partners. As the sole general partner of Host L.P., Host Inc. has the exclusive and complete responsibility for Host L.P.’s day-to-day management and control. Management operates Host Inc. and Host L.P. as one enterprise. The management of Host Inc. consists of the same persons who direct the management of Host L.P. As general partner with control of Host L.P., Host Inc. consolidates Host L.P. for financial reporting purposes, and Host Inc. does not have significant assets other than its investment in Host L.P. Therefore, the assets and liabilities of Host Inc. and Host L.P. are substantially the same on their respective condensed consolidated financial statements and the disclosures of Host Inc. and Host L.P. also are substantially similar. For these reasons, we believe that the combination into a single report of the quarterly reports on Form 10-Q of Host Inc. and Host L.P. results in benefits to management and investors.
The substantive difference between Host Inc.’s and Host L.P.’s filings is the fact that Host Inc. is a REIT with public stock, while Host L.P. is a partnership with no publicly traded equity. In the condensed consolidated financial statements, this difference primarily is reflected in the equity (or partners’ capital for Host L.P.) section of the consolidated balance sheets and in the consolidated statements of equity (or partners’ capital for Host L.P.). Apart from the different equity treatment, the condensed consolidated financial statements of Host Inc. and Host L.P. nearly are identical.
This combined Form 10-Q for Host Inc. and Host L.P. includes, for each entity, separate interim financial statements (but combined footnotes), separate reports on disclosure controls and procedures and internal control over financial reporting and separate CEO/CFO certifications. In addition, with respect to any other financial and non-financial disclosure items required by Form 10-Q, any material differences between Host Inc. and Host L.P. are discussed separately herein. For a more detailed discussion of the substantive differences between Host Inc. and Host L.P. and why we believe the combined filing results in benefits to investors, see the discussion in the combined Annual Report on Form 10-K for the year ended December 31, 2012 under the heading “Explanatory Note.”
i
HOST HOTELS & RESORTS, INC. AND HOST HOTELS & RESORTS, L.P.
INDEX
PART I. FINANCIAL INFORMATION
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Page No. | |||
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Item 1. |
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Financial Statements for Host Hotels & Resorts, Inc.: |
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Condensed Consolidated Balance Sheets - June 30, 2013 (unaudited) and December 31, 2012 |
1 |
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2 | |
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3 | |
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4 | |
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Financial Statements for Host Hotels & Resorts, L.P.: |
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Condensed Consolidated Balance Sheets - June 30, 2013 (unaudited) and December 31, 2012 |
6 |
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7 | |
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8 | |
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9 | |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
11 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results and Operations |
23 |
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Item 3. |
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52 | |
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Item 4. |
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53 | |
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PART II. OTHER INFORMATION |
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Item 1. |
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54 | |
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Item 2. |
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54 | |
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Item 6. |
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55 |
ii
HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2013 and December 31, 2012
(in millions, except share and per share amounts)
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June 30, |
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December 31, |
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(unaudited) |
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ASSETS | |||||||
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Property and equipment, net |
$ |
11,201 |
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$ |
11,588 |
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Due from managers |
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130 |
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80 |
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Advances to and investments in affiliates |
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392 |
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347 |
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Deferred financing costs, net |
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46 |
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53 |
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Furniture, fixtures and equipment replacement fund |
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194 |
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154 |
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Other |
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274 |
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319 |
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Restricted cash |
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35 |
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36 |
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Cash and cash equivalents |
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393 |
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417 |
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Total assets |
$ |
12,665 |
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$ |
12,994 |
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LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY | |||||||
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Debt |
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Senior notes, including $ 363 million and $531 million, respectively, net of discount, of Exchangeable Senior Debentures |
$ |
3,210 |
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$ |
3,569 |
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Credit facility, including the $ 500 million term loan |
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702 |
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763 |
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Mortgage debt |
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727 |
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993 |
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Other |
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85 |
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86 |
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Total debt |
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4,724 |
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5,411 |
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Accounts payable and accrued expenses |
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175 |
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194 |
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Other |
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384 |
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372 |
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Total liabilities |
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5,283 |
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5,977 |
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Non-controlling interests—Host Hotels & Resorts, L.P. |
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168 |
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158 |
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Host Hotels & Resorts, Inc. stockholders’ equity: |
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Common stock, par value $.01, 1,050 million shares authorized; 748.2 million and 724.6 million shares issued and outstanding, respectively |
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7 |
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7 |
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Additional paid-in capital |
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8,400 |
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8,040 |
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Accumulated other comprehensive income (loss) |
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(12 |
) |
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12 |
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Deficit |
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(1,216 |
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(1,234 |
) |
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Total equity of Host Hotels & Resorts, Inc. stockholders |
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7,179 |
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6,825 |
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Non-controlling interests—other consolidated partnerships |
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35 |
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34 |
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Total equity |
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7,214 |
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6,859 |
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Total liabilities, non-controlling interests and equity |
$ |
12,665 |
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$ |
12,994 |
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See notes to condensed consolidated statements.
1
HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter and Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited, in millions, except per share amounts)
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Quarter ended |
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Year-to-date ended |
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June 30, |
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June 15, |
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June 30, |
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June 15, |
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REVENUES |
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Rooms |
$ |
903 |
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$ |
798 |
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$ |
1,677 |
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$ |
1,346 |
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Food and beverage |
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425 |
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386 |
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800 |
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665 |
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Other |
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79 |
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77 |
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156 |
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135 |
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Owned hotel revenues |
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1,407 |
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1,261 |
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2,633 |
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2,146 |
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Other revenues |
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13 |
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65 |
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30 |
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124 |
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Total revenues |
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1,420 |
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1,326 |
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2,663 |
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2,270 |
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EXPENSES |
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Rooms |
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230 |
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206 |
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448 |
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364 |
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Food and beverage |
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290 |
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268 |
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567 |
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474 |
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Other departmental and support expenses |
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322 |
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306 |
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634 |
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545 |
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Management fees |
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66 |
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55 |
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114 |
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87 |
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Other property-level expenses |
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93 |
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140 |
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189 |
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263 |
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Depreciation and amortization |
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174 |
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153 |
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349 |
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301 |
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Corporate and other expenses |
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37 |
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21 |
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63 |
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43 |
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Total operating costs and expenses |
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1,212 |
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1,149 |
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2,364 |
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2,077 |
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OPERATING PROFIT |
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208 |
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177 |
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299 |
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193 |
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Interest income |
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1 |
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3 |
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2 |
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7 |
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Interest expense |
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(103 |
) |
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(94 |
) |
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(179 |
) |
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(180 |
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Net gains on property transactions and other |
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21 |
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1 |
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32 |
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2 |
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Gain (loss) on foreign currency transactions and derivatives |
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1 |
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— |
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3 |
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(1 |
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Equity in earnings of affiliates |
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6 |
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5 |
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4 |
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3 |
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INCOME BEFORE INCOME TAXES |
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134 |
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92 |
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161 |
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24 |
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Benefit (provision) for income taxes |
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(15 |
) |
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(12 |
) |
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(7 |
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1 |
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INCOME FROM CONTINUING OPERATIONS |
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119 |
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80 |
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154 |
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25 |
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Income from discontinued operations, net of tax |
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2 |
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3 |
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27 |
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58 |
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NET INCOME |
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121 |
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83 |
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181 |
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83 |
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Less: Net income attributable to non-controlling interests |
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(2 |
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(1 |
) |
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(6 |
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(3 |
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NET INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC. |
$ |
119 |
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$ |
82 |
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$ |
175 |
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$ |
80 |
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Basic earnings per common share: |
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Continuing operations |
$ |
.16 |
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$ |
.11 |
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$ |
.20 |
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$ |
.03 |
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Discontinued operations |
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— |
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— |
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.04 |
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.08 |
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Basic earnings per common share |
$ |
.16 |
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$ |
.11 |
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$ |
.24 |
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$ |
.11 |
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Diluted earnings per common share: |
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Continuing operations |
$ |
.16 |
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$ |
.11 |
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$ |
.20 |
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$ |
.03 |
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Discontinued operations |
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— |
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— |
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.04 |
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.08 |
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Diluted earnings per common share |
$ |
.16 |
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$ |
.11 |
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$ |
.24 |
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$ |
.11 |
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See notes to condensed consolidated statements.
2
HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Quarter and Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited, in millions)
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Quarter ended |
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Year-to-date ended |
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June 30, |
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June 15, |
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June 30, |
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June 15, |
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NET INCOME |
$ |
121 |
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|
$ |
83 |
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|
$ |
181 |
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$ |
83 |
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OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: |
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Foreign currency translation and other comprehensive income (loss) of unconsolidated affiliates |
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(26 |
) |
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(29 |
) |
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(29 |
) |
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(8 |
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Change in fair value of derivative instruments |
|
— |
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4 |
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5 |
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2 |
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OTHER COMPREHENSIVE LOSS, NET OF TAX |
|
(26 |
) |
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(25 |
) |
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(24 |
) |
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(6 |
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COMPREHENSIVE INCOME |
|
95 |
|
|
|
58 |
|
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|
157 |
|
|
|
77 |
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Less: Comprehensive income attributable to non-controlling interests |
|
(2 |
) |
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(1 |
) |
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(6 |
) |
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(3 |
) |
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COMPREHENSIVE INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC |
$ |
93 |
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|
$ |
57 |
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$ |
151 |
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$ |
74 |
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See notes to condensed consolidated statements.
3
HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited, in millions)
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Year-to-date ended |
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June 30, |
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June 15, |
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OPERATING ACTIVITIES |
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Net income |
$ |
181 |
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$ |
83 |
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Adjustments to reconcile to cash provided by operations: |
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Discontinued operations: |
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Gain on dispositions |
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(19 |
) |
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(48 |
) |
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Depreciation |
|
2 |
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|
11 |
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Depreciation and amortization |
|
349 |
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|
301 |
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Amortization of finance costs, discounts and premiums, net |
|
14 |
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11 |
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Stock compensation expense |
|
8 |
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|
8 |
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Deferred income taxes |
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(1 |
) |
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(4 |
) |
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Net gain on property transactions and other |
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(32 |
) |
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(2 |
) |
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(Gain) loss on foreign currency transactions and derivatives |
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(3 |
) |
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1 |
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Non-cash loss on extinguishment of debt |
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12 |
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4 |
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Equity in earnings of affiliates |
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(4 |
) |
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(3 |
) |
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Change in due from managers |
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(55 |
) |
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|
(42 |
) |
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Changes in other assets |
|
34 |
|
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|
12 |
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Changes in other liabilities |
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(26 |
) |
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(30 |
) |
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Cash provided by operating activities |
|
460 |
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|
302 |
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INVESTING ACTIVITIES |
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Proceeds from sales of assets, net |
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446 |
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|
108 |
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Acquisitions |
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(139 |
) |
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(18 |
) |
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Advances to and investments in affiliates |
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(50 |
) |
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(20 |
) |
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Capital expenditures: |
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Renewals and replacements |
|
(163 |
) |
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(179 |
) |
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Redevelopment and acquisition-related investments |
|
(69 |
) |
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(162 |
) |
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New development |
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(11 |
) |
|
|
— |
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Change in furniture, fixtures and equipment (“FF&E”) replacement fund |
|
(39 |
) |
|
|
(2 |
) |
|
Property insurance proceeds |
|
— |
|
|
|
4 |
|
|
Cash used in investing activities |
|
(25 |
) |
|
|
(269 |
) |
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Financing costs |
|
(4 |
) |
|
|
(7 |
) |
|
Issuances of debt |
|
400 |
|
|
|
450 |
|
|
Draws on credit facility |
|
148 |
|
|
|
22 |
|
|
Repayment on credit facility |
|
(200 |
) |
|
|
— |
|
|
Repurchase/redemption of senior notes |
|
(601 |
) |
|
|
(893 |
) |
|
Mortgage debt prepayments and scheduled maturities |
|
(246 |
) |
|
|
(113 |
) |
|
Scheduled principal repayments |
|
(1 |
) |
|
|
(2 |
) |
|
Issuance of common stock |
|
192 |
|
|
|
222 |
|
|
Dividends on common stock |
|
(140 |
) |
|
|
(78 |
) |
|
Contributions from non-controlling interests |
|
3 |
|
|
|
1 |
|
|
Distributions to non-controlling interests |
|
(6 |
) |
|
|
(4 |
) |
|
Change in restricted cash for financing activities |
|
1 |
|
|
|
8 |
|
|
Cash used in financing activities |
|
(454 |
) |
|
|
(394 |
) |
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(19 |
) |
|
|
(361 |
) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
417 |
|
|
|
826 |
|
|
Effects of exchange rate changes on cash held |
|
(5 |
) |
|
|
— |
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
393 |
|
|
$ |
465 |
|
See notes to condensed consolidated statements.
4
HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited)
Supplemental disclosure of cash flow information (in millions)
|
|
|
Year-to-date ended |
| |||||
|
|
|
June 30, |
|
|
June 15, |
| ||
|
|
Interest paid – periodic interest expense |
$ |
148 |
|
|
$ |
160 |
|
|
|
Interest paid – debt extinguishments |
|
20 |
|
|
|
9 |
|
|
|
Total interest paid |
$ |
168 |
|
|
$ |
169 |
|
|
|
Income taxes paid |
$ |
6 |
|
|
$ |
8 |
|
Supplemental disclosure of noncash investing and financing activities:
For the year-to-date periods ended June 30, 2013 and June 15, 2012, Host Inc. issued approximately 0.1 million shares and 0.5 million shares, respectively, upon the conversion of OP units of Host L.P. held by non-controlling partners valued at approximately $2 million and $8 million, respectively.
In March 2013, holders of approximately $174 million of the 3.25% exchangeable debentures elected to exchange their debentures for approximately 11.7 million shares of Host Inc. common stock.
See notes to condensed consolidated statements.
5
HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2013 and December 31, 2012
(in millions)
|
|
June 30, |
|
|
December 31, |
| ||
|
|
(unaudited) |
|
|
|
| ||
|
ASSETS | |||||||
|
Property and equipment, net |
$ |
11,201 |
|
|
$ |
11,588 |
|
|
Due from managers |
|
130 |
|
|
|
80 |
|
|
Advances to and investments in affiliates |
|
392 |
|
|
|
347 |
|
|
Deferred financing costs, net |
|
46 |
|
|
|
53 |
|
|
Furniture, fixtures and equipment replacement fund |
|
194 |
|
|
|
154 |
|
|
Other |
|
274 |
|
|
|
319 |
|
|
Restricted cash |
|
35 |
|
|
|
36 |
|
|
Cash and cash equivalents |
|
393 |
|
|
|
417 |
|
|
Total assets |
$ |
12,665 |
|
|
$ |
12,994 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, LIMITED PARTNERSHIP INTERESTS OF THIRD PARTIES AND CAPITAL | |||||||
|
Debt |
|
|
|
|
|
|
|
|
Senior notes, including $ 363 million and $531 million, respectively, net of discount, of Exchangeable Senior Debentures |
$ |
3,210 |
|
|
$ |
3,569 |
|
|
Credit facility, including the $ 500 million term loan |
|
702 |
|
|
|
763 |
|
|
Mortgage debt |
|
727 |
|
|
|
993 |
|
|
Other |
|
85 |
|
|
|
86 |
|
|
Total debt |
|
4,724 |
|
|
|
5,411 |
|
|
Accounts payable and accrued expenses |
|
175 |
|
|
|
194 |
|
|
Other |
|
384 |
|
|
|
372 |
|
|
Total liabilities |
|
5,283 |
|
|
|
5,977 |
|
|
|
|
|
|
|
|
|
|
|
Limited partnership interests of third parties |
|
168 |
|
|
|
158 |
|
|
|
|
|
|
|
|
|
|
|
Host Hotels & Resorts, L.P. capital: |
|
|
|
|
|
|
|
|
General partner |
|
1 |
|
|
|
1 |
|
|
Limited partner |
|
7,190 |
|
|
|
6,812 |
|
|
Accumulated other comprehensive income (loss) |
|
(12 |
) |
|
|
12 |
|
|
Total Host Hotels & Resorts, L.P. capital |
|
7,179 |
|
|
|
6,825 |
|
|
Non-controlling interests—consolidated partnerships |
|
35 |
|
|
|
34 |
|
|
Total capital |
|
7,214 |
|
|
|
6,859 |
|
|
Total liabilities, limited partnership interest of third parties and capital |
$ |
12,665 |
|
|
$ |
12,994 |
|
See notes to condensed consolidated statements.
6
HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter and Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited, in millions, except per unit amounts)
|
|
Quarter ended |
|
|
Year-to-date ended |
| ||||||||||
|
|
June 30, |
|
|
June 15, |
|
|
June 30, |
|
|
June 15, |
| ||||
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
$ |
903 |
|
|
$ |
798 |
|
|
$ |
1,677 |
|
|
$ |
1,346 |
|
|
Food and beverage |
|
425 |
|
|
|
386 |
|
|
|
800 |
|
|
|
665 |
|
|
Other |
|
79 |
|
|
|
77 |
|
|
|
156 |
|
|
|
135 |
|
|
Owned hotel revenues |
|
1,407 |
|
|
|
1,261 |
|
|
|
2,633 |
|
|
|
2,146 |
|
|
Other revenues |
|
13 |
|
|
|
65 |
|
|
|
30 |
|
|
|
124 |
|
|
Total revenues |
|
1,420 |
|
|
|
1,326 |
|
|
|
2,663 |
|
|
|
2,270 |
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rooms |
|
230 |
|
|
|
206 |
|
|
|
448 |
|
|
|
364 |
|
|
Food and beverage |
|
290 |
|
|
|
268 |
|
|
|
567 |
|
|
|
474 |
|
|
Other departmental and support expenses |
|
322 |
|
|
|
306 |
|
|
|
634 |
|
|
|
545 |
|
|
Management fees |
|
66 |
|
|
|
55 |
|
|
|
114 |
|
|
|
87 |
|
|
Other property-level expenses |
|
93 |
|
|
|
140 |
|
|
|
189 |
|
|
|
263 |
|
|
Depreciation and amortization |
|
174 |
|
|
|
153 |
|
|
|
349 |
|
|
|
301 |
|
|
Corporate and other expenses |
|
37 |
|
|
|
21 |
|
|
|
63 |
|
|
|
43 |
|
|
Total operating costs and expenses |
|
1,212 |
|
|
|
1,149 |
|
|
|
2,364 |
|
|
|
2,077 |
|
|
OPERATING PROFIT |
|
208 |
|
|
|
177 |
|
|
|
299 |
|
|
|
193 |
|
|
Interest income |
|
1 |
|
|
|
3 |
|
|
|
2 |
|
|
|
7 |
|
|
Interest expense |
|
(103 |
) |
|
|
(94 |
) |
|
|
(179 |
) |
|
|
(180 |
) |
|
Net gains on property transactions and other |
|
21 |
|
|
|
1 |
|
|
|
32 |
|
|
|
2 |
|
|
Gain (loss) on foreign currency transactions and derivatives |
|
1 |
|
|
|
— |
|
|
|
3 |
|
|
|
(1 |
) |
|
Equity in earnings of affiliates |
|
6 |
|
|
|
5 |
|
|
|
4 |
|
|
|
3 |
|
|
INCOME BEFORE INCOME TAXES |
|
134 |
|
|
|
92 |
|
|
|
161 |
|
|
|
24 |
|
|
Benefit (provision) for income taxes |
|
(15 |
) |
|
|
(12 |
) |
|
|
(7 |
) |
|
|
1 |
|
|
INCOME FROM CONTINUING OPERATIONS |
|
119 |
|
|
|
80 |
|
|
|
154 |
|
|
|
25 |
|
|
Income from discontinued operations, net of tax. |
|
2 |
|
|
|
3 |
|
|
|
27 |
|
|
|
58 |
|
|
NET INCOME |
|
121 |
|
|
|
83 |
|
|
|
181 |
|
|
|
83 |
|
|
Less: Net income attributable to non-controlling interests |
|
(1 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
(2 |
) |
|
NET INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P. |
$ |
120 |
|
|
$ |
83 |
|
|
$ |
177 |
|
|
$ |
81 |
|
|
Basic earnings per common unit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
.16 |
|
|
$ |
.11 |
|
|
$ |
.20 |
|
|
$ |
.03 |
|
|
Discontinued operations |
|
— |
|
|
|
.01 |
|
|
|
.04 |
|
|
|
.08 |
|
|
Basic earnings per common unit |
$ |
.16 |
|
|
$ |
.12 |
|
|
$ |
.24 |
|
|
$ |
.11 |
|
|
Diluted earnings per common unit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
.16 |
|
|
$ |
.11 |
|
|
$ |
.20 |
|
|
$ |
.03 |
|
|
Discontinued operations |
|
— |
|
|
|
.01 |
|
|
|
.04 |
|
|
|
.08 |
|
|
Diluted earnings per common unit |
$ |
.16 |
|
|
$ |
.12 |
|
|
$ |
.24 |
|
|
$ |
.11 |
|
See notes to condensed consolidated statements.
7
HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Quarter and Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited, in millions)
|
|
Quarter ended |
|
|
Year-to-date ended |
| ||||||||||
|
|
June 30, |
|
|
June 15, |
|
|
June 30, |
|
|
June 15, |
| ||||
|
NET INCOME |
$ |
121 |
|
|
$ |
83 |
|
|
$ |
181 |
|
|
$ |
83 |
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation and other comprehensive income (loss) of unconsolidated affiliates |
|
(26 |
) |
|
|
(29 |
) |
|
|
(29 |
) |
|
|
(8 |
) |
|
Change in fair value of derivative instruments |
|
— |
|
|
|
4 |
|
|
|
5 |
|
|
|
2 |
|
|
OTHER COMPREHENSIVE LOSS, NET OF TAX |
|
(26 |
) |
|
|
(25 |
) |
|
|
(24 |
) |
|
|
(6 |
) |
|
COMPREHENSIVE INCOME |
|
95 |
|
|
|
58 |
|
|
|
157 |
|
|
|
77 |
|
|
Less: Comprehensive income attributable to non-controlling interests |
|
(1 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
(2 |
) |
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P. |
$ |
94 |
|
|
$ |
58 |
|
|
$ |
153 |
|
|
$ |
75 |
|
See notes to condensed consolidated statements.
8
HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited, in millions)
|
|
Year-to-date ended |
| |||||
|
|
June 30, |
|
|
June 15, |
| ||
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net income |
$ |
181 |
|
|
$ |
83 |
|
|
Adjustments to reconcile to cash provided by operations: |
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Gain on dispositions |
|
(19 |
) |
|
|
(48 |
) |
|
Depreciation |
|
2 |
|
|
|
11 |
|
|
Depreciation and amortization |
|
349 |
|
|
|
301 |
|
|
Amortization of financing costs, discounts and premiums, net |
|
14 |
|
|
|
11 |
|
|
Stock compensation expense |
|
8 |
|
|
|
8 |
|
|
Deferred income taxes |
|
(1 |
) |
|
|
(4 |
) |
|
Net gain on property transactions and other |
|
(32 |
) |
|
|
(2 |
) |
|
(Gain) loss on foreign currency transactions and derivatives |
|
(3 |
) |
|
|
1 |
|
|
Non-cash loss on extinguishment of debt |
|
12 |
|
|
|
4 |
|
|
Equity in earnings of affiliates |
|
(4 |
) |
|
|
(3 |
) |
|
Change in due from managers |
|
(55 |
) |
|
|
(42 |
) |
|
Changes in other assets |
|
34 |
|
|
|
12 |
|
|
Changes in other liabilities |
|
(26 |
) |
|
|
(30 |
) |
|
Cash provided by operations |
|
460 |
|
|
|
302 |
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from sales of assets, net |
|
446 |
|
|
|
108 |
|
|
Acquisitions |
|
(139 |
) |
|
|
(18 |
) |
|
Advances to and investments in affiliates |
|
(50 |
) |
|
|
(20 |
) |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
Renewals and replacements |
|
(163 |
) |
|
|
(179 |
) |
|
Redevelopment and acquisition-related investments |
|
(69 |
) |
|
|
(162 |
) |
|
New development |
|
(11 |
) |
|
|
— |
|
|
Change in furniture, fixtures and equipment (“FF&E”) replacement fund |
|
(39 |
) |
|
|
(2 |
) |
|
Property insurance proceeds |
|
— |
|
|
|
4 |
|
|
Cash used in investing activities |
|
(25 |
) |
|
|
(269 |
) |
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Financing costs |
|
(4 |
) |
|
|
(7 |
) |
|
Issuances of debt |
|
400 |
|
|
|
450 |
|
|
Draws on credit facility |
|
148 |
|
|
|
22 |
|
|
Repayment on credit facility |
|
(200 |
) |
|
|
— |
|
|
Repurchase/redemption of senior notes |
|
(601 |
) |
|
|
(893 |
) |
|
Mortgage debt prepayments and scheduled maturities |
|
(246 |
) |
|
|
(113 |
) |
|
Scheduled principal repayments |
|
(1 |
) |
|
|
(2 |
) |
|
Issuance of common OP units |
|
192 |
|
|
|
222 |
|
|
Distributions on common OP units |
|
(142 |
) |
|
|
(79 |
) |
|
Contributions from non-controlling interests |
|
3 |
|
|
|
1 |
|
|
Distributions to non-controlling interests |
|
(4 |
) |
|
|
(3 |
) |
|
Change in restricted cash for financing activities |
|
1 |
|
|
|
8 |
|
|
Cash used in financing activities |
|
(454 |
) |
|
|
(394 |
) |
|
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(19 |
) |
|
|
(361 |
) |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
417 |
|
|
|
826 |
|
|
Effects of exchange rate changes on cash held |
|
(5 |
) |
|
|
— |
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
393 |
|
|
$ |
465 |
|
See notes to condensed consolidated statements.
9
HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year-to-date ended June 30, 2013 and June 15, 2012
(unaudited)
Supplemental disclosure of cash flow information (in millions):
|
|
|
Year-to-date ended |
| |||||
|
|
|
June 30, |
|
|
June 15, |
| ||
|
|
Interest paid – periodic interest expense |
$ |
148 |
|
|
$ |
160 |
|
|
|
Interest paid – debt extinguishments |
|
20 |
|
|
|
9 |
|
|
|
Total interest paid |
$ |
168 |
|
|
$ |
169 |
|
|
|
Income taxes paid |
$ |
6 |
|
|
$ |
||