Host Hotels & Resorts, Inc. (NYSE:HST) Q4 2018 Earnings Conference Call Transcript

Feb 20, 2019 • 10:00 am ET

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Host Hotels & Resorts, Inc. (NYSE:HST) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Host Hotels & Resorts Incorporated Fourth Quarter and Full Year 2018 Earnings Conference. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ms. Gee Lingberg, Vice President. Please go ahead, ma'am.

Executive
Gee Lingberg

Thanks, Ebony. Good morning, everyone. Welcome to the Host Hotels & Resorts Fourth Quarter 2018 Earnings Call. Before we begin, I'd like to remind everyone that many of the comments made today are considered to be forward-looking statements under federal securities law. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed and we are not obligated to publicly update or revise these forward-looking statements.

In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, adjusted EBITDAre and comparable hotel results. You can find this information, together with reconciliation to the most directly comparable GAAP information, in today's earnings press release, in our 8-K filed with the SEC, and the supplemental financial information on our website at hosthotels.com.

This morning, Jim Risoleo, our President and Chief Executive Officer, will provide his remarks on our fourth quarter and full year results, our 2018 achievements including the acquisition of the 1 Hotel South Beach and conclude with our capital allocation strategy and outlook for 2019. Michael Bluhm, our Chief Financial Officer, will then provide commentary on our fourth quarter and full year performance, including market, margins, balance sheet and our guidance for 2019. Following their remarks, we will be available to respond to your questions.

And now, I'd like to turn the call over to Jim.

Executive
James F. Risoleo

Thank you Gee, and thanks, everyone for joining us this morning. We are pleased to report another quarter that exceeded our internal expectations on both the top and bottom line and beat consensus estimates for adjusted EBITDAre and adjusted FFO per diluted share. We finished the year strong with fourth quarter comparable constant dollar RevPAR growth of 2.3% and an increase in comparable hotel EBITDA margin of 45 basis points. Adjusted EBITDAre was $372 million for the quarter and adjusted FFO per diluted share was $0.43, beating consensus estimates by $8 million and $0.02, respectively.

2018 was a solid year for Host with comparable RevPAR growing 2% and (technical difficulty) margin growing an impressive 60 basis points. This resulted in a 3.4% EBITDAre expansion to $1.562 billion and a 4.7% increase in adjusted FFO per share to $1.77. We had a consistent beat and raise year with margins, EBITDAre and FFO, all coming in well ahead of the top-end of our initial guidance provided last February. We beat the midpoint of our original RevPAR guidance by 50 basis points, margins by 80 basis points, EBITDAre by $62 million or 4% and adjusted FFO per share by $0.12 or 7.3%. These strong results continue to underscore the advantages of our geographically diversified portfolio of iconic and irreplaceable hotels, our unprecedented scale