Host Hotels & Resorts, Inc. Reports Strong Growth in Operating Results for the Fourth Quarter and Full Year 2007 and Announces $500 Million Stock Repurchase Program
	Host Hotels & Resorts, Inc. (NYSE:HST) , the nation's largest lodging real estate investment trust (REIT), today announced its results of operations for the fourth quarter and for the full year ended December 31, 2007.
Click here for financial tables � Total revenue increased $99 million, or 5.8%, to $1,809 million for the fourth quarter and $613 million, or 12.7%, to $5,426 million for full year 2007. Excluding the revenues from the Starwood portfolio which was purchased in April 2006, revenues increased 7.6% for the full year. � Net income increased $98 million to $294 million for the fourth quarter and decreased $11 million to $727 million for full year 2007. Earnings per diluted share increased $.18 to $.54 for the fourth quarter and decreased $.15 to $1.33 for full year 2007. � Net income included a net gain of $24 million, or $.04 per diluted share, for the fourth quarter and $114 million, or $.21 per diluted share, for the full year from gains on hotel dispositions, partially offset by debt repayment or refinancing costs. By comparison, the fourth quarter and full year 2006, net income included a net gain of $8 million, or $.01 per diluted share, and $355 million, or $.73 per diluted share, respectively, associated with similar transactions, as well as costs associated with preferred stock redemptions and the Starwood acquisition. For further detail, refer to the "Schedule of Significant Transactions Affecting Earnings per Share and Funds From Operations per Diluted Share" attached to this earnings release. � Funds From Operations (FFO) per diluted share increased 29.3% from $.58 to $.75 for the fourth quarter and 24.8% from $1.53 to $1.91 for full year 2007. FFO per diluted share was reduced by $.08 for full year 2007 due to costs associated with debt repayments or refinancings. By comparison, FFO per diluted share was reduced by $.03 and $.09 for the fourth quarter and full year 2006, respectively, for costs associated with similar transactions, as well as costs associated with preferred stock redemptions and the Starwood acquisition. For further detail, see the Schedule of Significant Transactions noted above. The Company's results exceeded the high end of its diluted FFO per share guidance due primarily to the settlement of the business interruption insurance recovery for the New Orleans Marriott and lower than forecasted stock compensation expense. The Company also announced the following results for Host Hotels & Resorts, L.P. ("Host LP"), through which it conducts all of its operations and holds approximately 97% of the partnership interests: � Net income increased $100 million to $304 million for the fourth quarter and decreased $16 million to $753 million for full year 2007. Net income of Host LP was also affected by certain transactions-See the Schedule of Significant Transactions noted above. � Adjusted EBITDA (Earnings before Interest Expense, Income Taxes, Depreciation, Amortization and other items) increased 13.0% to $540 million for the fourth quarter and 19.0% to $1,521 million for full year 2007 primarily due to growth in EBITDA from the Company's comparable hotel portfolio, and EBITDA generated by the Starwood portfolio for the full year in 2007 compared to approximately nine months in 2006. Story continues below ↓ Advertisement Operating Results RevPAR for the Company's comparable hotels plus the Starwood portfolio increased 5.6% for the fourth quarter, as a result of a 6.4% increase in average room rate and a slight decrease in occupancy of 0.5 percentage points. For full year 2007, RevPAR increased 6.5%, driven by increases in average room rate of 5.9% and occupancy of 0.4 percentage points. The Company includes the Starwood portfolio, which was acquired in April 2006, when it discusses results of comparable hotels due to the significant contribution of these hotels to its operations. Comparable hotel RevPAR (not including the Starwood portfolio) increased 5.2% for the fourth quarter 2007 and 5.8% for full year 2007. Comparable hotel adjusted operating profit margins increased 0.5 percentage points and 0.7 percentage points for the fourth quarter and full year 2007, respectively. For further detail, see "Notes to the Financial Information." Stock Repurchase Program The Company's Board of Directors has authorized a program to repurchase up to $500 million of common stock. The common stock may be purchased in the open market or through private transactions, dependent upon market conditions. The plan does not obligate the Company to repurchase any specific number of shares and may be suspended at any time at management's discretion. The Company has approximately 523 million shares outstanding. Balance Sheet As of December 31, 2007, the Company had approximately $488 million of cash and cash equivalents. Excluding amounts necessary for working capital, the Company intends to use its available funds for dividend payments and stock repurchases and to invest in the portfolio, acquire new properties or make further debt repayments. The Company currently has $600 million available under its line of credit. Asset Dispositions During the fourth quarter, the Company sold the Sheraton Tucson and the Minneapolis Marriott Southwest for approximately $70 million and recorded a gain on the sales of approximately $24 million in the quarter. Dividend In 2007, the Company declared a total dividend of $1.00 per share. For 2008, the Company expects to declare a fixed $.20 per share common dividend each quarter as well as a special dividend in the fourth quarter, which based on the Company's current outlook will be similar to the 2007 level. 2008 Outlook The Company expects comparable hotel RevPAR, which will include the Starwood portfolio, to increase approximately 2% to 4% for the full year 2008 and near the low end of our full year guidance for the first quarter. For full year 2008, the Company also expects its operating profit margins under GAAP to decrease approximately 130 basis points to 60 basis points and its comparable hotel adjusted operating profit margins will range from a decrease of 25 basis points to an increase of 25 basis points. Based upon these estimates, the full year 2008 guidance for Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. would be as follows: Host Hotels & Resorts, Inc. � earnings per diluted share should be approximately $.08 to $.09 for the first quarter and $1.05 to $1.14 for the full year, � net income should be approximately $43 million to $48 million for the first quarter and $568 million to $622 million for the full year, and � FFO per diluted share should be approximately $.29 to $.30 for the first quarter and $1.88 to $1.98 for the full year. Host Hotels & Resorts, L.P. � net income should be approximately $45 million to $50 million for the first quarter and $594 million to $650 million for the full year, and � Adjusted EBITDA should be approximately $1,450 million to $1,505 million for the full year. About Host Hotels & Resorts Host Hotels & Resorts, Inc. is an S&P 500 and Fortune 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper upscale hotels. The Company currently owns 119 properties with approximately 64,000 rooms, and also holds a minority interest in a joint venture that owns ten hotels in Europe with approximately 3,200 rooms. Guided by a disciplined approach to capital allocation and aggressive asset management, the Company partners with premium brands such as Marriott(R), Ritz-Carlton(R), Westin(R), Sheraton(R), W(R), St. Regis(R), The Luxury Collection(R), Hyatt(R), Fairmont(R), Four Seasons(R), Hilton(R) and Swissotel(R)* in the operation of properties in over 50 major markets worldwide.