-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F5i8z5FEu1Cpj7Y5p2y4vWs5EXBPMaATiQ3Ca8PZYJ1avZQ0niEx0+BGxkprCHrW IEhpnb056ZDPLagpqvZ1ww== 0000314733-97-000006.txt : 19970505 0000314733-97-000006.hdr.sgml : 19970505 ACCESSION NUMBER: 0000314733-97-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970502 ITEM INFORMATION: Other events FILED AS OF DATE: 19970502 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOST MARRIOTT CORP/MD CENTRAL INDEX KEY: 0000314733 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 530085950 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05664 FILM NUMBER: 97594540 BUSINESS ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 BUSINESS PHONE: 3013809000 MAIL ADDRESS: STREET 1: 10400 FERNWOOD RD CITY: BETHESDA STATE: MD ZIP: 20817 FORMER COMPANY: FORMER CONFORMED NAME: HOST MARRIOTT CORP DATE OF NAME CHANGE: 19931108 FORMER COMPANY: FORMER CONFORMED NAME: MARRIOTT CORP DATE OF NAME CHANGE: 19920703 8-K 1 PRESS RELEASE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported) April 30, 1997 HOST MARRIOTT CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware (State of Incorporation) 1-5664 (Commission File Number) 53-0085950 (I.R.S. Employer Identification Number) 10400 Fernwood Road, Bethesda, Maryland 20817 (Address of Principle Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (301) 380-9000 Item 5. Other Events On April 30, 1997, the Registrant reported first quarter 1997 Earnings Before Interest Expense, Taxes, Depreciation and Amortization and other non-cash items ("EBITDA") of approximately $154 million, a 105% increase over the prior year results of $75 million. EBITDA from Host Marriott's full-service hotels increased 122 percent to $149 million for the 1997 quarter versus $67 million in 1996. The Company considers EBITDA to be an indicative measure of the Company's operating performance due to the significance of the Company's long-lived assets and because EBITDA can be used to measure the Company's ability to service debt, fund capital expenditures and expand its business. EBITDA is used by certain investors to determine the Company's ability to meet debt service requirements and is used in the senior notes indenture as part of the tests determining the Company's ability to incur debt and to make certain restricted payments. Such information should not be considered as an alternative to net income, operating profit, cash flows from operations, or any other operating or liquidity performance measure prescribed by generally accepted accounting principles. Cash expenditures for various long-term assets, interest expense and income taxes have been, and will be, incurred which are not reflected in the EBITDA presentation. On a historical basis, cash from operations was $90 million and $40 million for the twelve weeks ended March 28, 1997 and March 22, 1996, respectively. Cash used in investing activities was $135 million and $132 million for the twelve weeks ended March 28, 1997 and March 22, 1996, respectively. Cash used in financing activities was $129 million for the twelve weeks ended March 28, 1997, while cash from financing activities was $59 million for the twelve weeks ended March 22, 1996. The Company's ratio of earnings to fixed charges was 1.2 to 1.0 for the first quarter of 1997, while the Company's deficiency of earnings to fixed charges was $11 million for the first quarter of 1996. A copy of the press release is included as an exhibit to this filing. Item 7. Financial Statements and Exhibits (c) 99.1 News Release dated April 30, 1997. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Host Marriott Corporation By: /s/ Donald D. Olinger ------------------------- Donald D. Olinger Senior Vice President and Corporate Controller May 2, 1997 2 EX-99.1 2 PRESS RELEASE BETHESDA, MD; April 30, 1997 -- Host Marriott Corporation (NYSE: HMT) today reported first quarter 1997 Earnings Before Interest Expense, Taxes, Depreciation and Amortization and other non-cash items (EBITDA) of $154 million, a 105 percent increase over the prior year amount of $75 million. EBITDA from Host Marriott's full service hotels increased 122 percent to $149 million for the 1997 quarter versus $67 million in 1996. The company reported that the increase in full service hotel EBITDA was driven primarily by comparable full service hotel EBITDA growth of 30 percent on a 19 percent increase in room revenue per available room (REVPAR), as well as incremental EBITDA of $46 million and $20 million from 1996 and 1997 acquisitions, respectively. The company also noted that first quarter 1997 full service hotel REVPAR and EBITDA comparisons were substantially impacted by the exclusion of the New Year's holiday from the 1997 results due to the timing of the company's fiscal year end. Excluding the impact of the timing of the New Year's holiday, comparable REVPAR increased by nearly 12 percent. Mr. Terence C. Golden, President and Chief Executive Officer of Host Marriott, stated, "We continue to be extremely pleased with the ongoing strength of the upscale and luxury segments of the full service hotel industry and our ability to capitalize on the superior quality of our assets to maximize the benefit of this trend. Even after eliminating the favorable impacts of the timing of the 1997 New Year's holiday and milder winter weather in 1997, our 1997 first quarter results at comparable properties were exceptional. In addition, our properties acquired in 1996 have yielded a substantial portion of our EBITDA growth. The results from our comparable and acquired properties make us confident that we can meet expectations for a strong 1997." Mr. Golden noted, "We have completed or announced nearly $900 million of acquisitions thus far in 1997, which puts us well on the way towards accomplishing our 1997 acquisition target of $1.3 billion. We are optimistic that the built-in growth from a full year's results from our 1997 acquisitions, together with the continued strengthening of the hotel market, will position us to continue our strong results into 1998." Mr. Golden added, "We have adopted a comprehensive asset management program at Host Marriott with a strong staff and state-of-the-art computer systems. Our asset management group continues to focus on overseeing conversion, renovation and property addition activities. They also work closely with property managers to implement profit enhancement such as combining management organizations at two of our New York properties, closing unprofitable restaurant operations or repositioning a portion of our Miami Airport hotel. We expect these activities to continue to improve the profitability of both our existing and acquired properties." Mr. Golden stated, "In the future, we expect to achieve a portion of our growth through diversification into complementary lines of lodging-related investments such as senior living communities. We have signed a letter of intent to acquire a portfolio of 29 senior living facilities from Marriott International, Inc. These assets are of very high quality and this acquisition will immediately position us as one of the largest owners of senior living communities. These assets will be managed by Marriott International, the leading operator in the upper tier of this industry. The portfolio is being acquired at an acquisition multiple of approximately 7.8 times based on estimated full year 1997 EBITDA of approximately $55.2 million and we anticipate the properties will produce yields similar to our experience with full service hotels." Mr. Golden noted, "In 1996, we began to expand our investments into the luxury segment of the full service market and have acquired four Ritz-Carlton properties to date for nearly $390 million. These assets represent some of the highest quality lodging assets in the world and have exceeded our performance expectations thus far." Mr. Robert E. Parsons, Jr., Executive Vice President and Chief Financial Officer of Host Marriott, stated, "A key strategic objective of our company is to focus on strengthening our balance sheet. We have made significant progress in this area with a debt to total asset ratio of 52 percent at quarter end. In addition, the company's interest coverage (defined as EBITDA divided by cash interest expense) for the quarter improved to 2.6 times from 1.6 times for the 1996 first quarter and 2.0 times for full year 1996." Host Marriott's first quarter 1997 revenues increased 94 percent to $252 million from $130 million in the 1996 quarter. Operating profit improved to $91 million from $38 million in 1996, a 139 percent improvement. The company reported net income of $11 million ($.05 per share) compared to a net loss of $12 million in 1996. Net income for the 1997 quarter included a $5 million ($.02 per share) extraordinary gain from the extinguishment of debt. Host Marriott Corporation is a lodging real estate company which currently owns, or holds controlling interests in, 85 upscale and luxury full service hotel properties primarily operated under the Marriott and Ritz-Carlton brand names. The company also serves as general partner and holds minority interests in various unconsolidated partnerships that own 250 lodging properties, 30 of which are full service hotels. Certain matters discussed within this news release are forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Host Marriott to be different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although Host Marriott believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. These risks are detailed from time to time in the company's filings with the Securities and Exchange Commission. Host Marriott undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. *** Table follows *** HOST MARRIOTT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL INFORMATION Twelve weeks ended March 28, 1997 and March 22, 1996 (in millions, except per common share amounts)
1997 1996 ------------- ----------- (unaudited) Hotel Sales................................................................ $ 620 $ 370 ========= ========== Revenues Hotels................................................................ $ 248 $ 126 Other................................................................. 4 4 --------- ---------- Total Revenues.................................................... 252 130 --------- ---------- Operating Costs and Expenses Hotels................................................................ 151 83 Other................................................................. 10 9 --------- ---------- Total Operating Costs and Expenses................................ 161 92 --------- ---------- Operating Profit........................................................... 91 38 Minority Interest.......................................................... (11) (1) Corporate Expenses......................................................... (9) (9) Interest Expense........................................................... (63) (48) Dividends on Convertible Preferred Securities of a Subsidiary Trust........ (9) -- Interest Income............................................................ 12 6 --------- ---------- Income (Loss) Before Income Taxes and Extraordinary Item................... 11 (14) Benefit (Provision) for Income Taxes....................................... (5) 2 --------- ---------- Income (Loss) Before Extraordinary Item.................................... $ 6 $ (12) ========= ========== Net Income (Loss).......................................................... $ 11 $ (12) ========= ========== Net Income (Loss) per Common Share......................................... $ .05 $ (.07) ========= ========== Weighted Average Common Shares Outstanding................................. 202.3 161.4 ========= ========== EBITDA Full Service Hotels................................................... $ 149 $ 67 Limited Service Hotels................................................ 3 11 --------- ---------- Total Hotels...................................................... 152 78 Other Operating....................................................... (4) (4) Corporate and Other, Net of Interest Income........................... 6 1 --------- ---------- EBITDA............................................................ $ 154 $ 75 ========= ========== Balance Sheet Data as of March 28, 1997: Cash and Cash Equivalents............................................. $ 530 Total Assets.......................................................... 5,301 Total Debt............................................................ 2,731 Convertible Preferred Securities...................................... 550 Shareholders' Equity.................................................. 1,141
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