Host Hotels & Resorts Inc.

11/06/2026 | Press release | Distributed by Public on 11/06/2026 11:11

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this report. Host Inc. operates as a self-managed and self-administered REIT. Host Inc. is the sole general partner of Host L.P. and holds approximately 99% of its partnership interests. Host L.P. is a limited partnership operating through an umbrella partnership structure. The remaining common OP units are owned by various unaffiliated limited partners.
Forward-Looking Statements
In this quarterly report on Form 10-Q, we make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "expect," "may," "intend," "predict," "project," "plan," "will," "estimate" and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are based on management's current expectations and assumptions and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those anticipated at the time the forward-looking statements are made.
The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
•the effect on lodging demand of (i) changes in national and local economic and business conditions, including concerns about U.S. economic growth, unemployment rates, and the potential for an economic recession in the United States or globally, or as a result of economic uncertainty due to trade disputes, tariffs and other protection measures, the recent high level of inflation, elevated interest rates, global economic prospects, consumer confidence and the value of the U.S. dollar, and (ii) factors that may shape public perception of travel to a particular location, including natural disasters, such as the Maui wildfires in 2023 and Southern California wildfires in 2025, extreme weather events, such as Hurricane Ian in 2022 and Hurricanes Helene and Milton in 2024, or extreme precipitation, such as the March 2026 Hawaii Kona Low rainstorm, and pandemics and other public health crises, such as the COVID-19 pandemic, or the occurrence or potential occurrence of terrorist attacks, all of which will affect occupancy rates at our hotels and the demand for hotel products and services;
•risks that U.S. immigration policies and border closings, visa processing times, travel restrictions or advisories, changes in energy prices or changes in foreign exchange rates will continue to suppress international travel to the United States generally or decrease the labor pool, and risks that the current travel imbalance (i.e., elevated international U.S. outbound travel combined with a decrease in inbound travel to the United States) may remain elevated relative to historic levels;
•the impact of geopolitical developments outside the U.S., such as large-scale wars or international conflicts, slowing global growth, or trade disputes, tariffs or other trade protection measures between the United States and its trading partners, all of which could cause economic volatility and affect global travel and lodging demand within the United States or result in supply chain disruptions;
•volatility in global financial and credit markets, which could materially adversely affect U.S. and global economic conditions, business activity, and lodging demand as well as negatively impact our ability to obtain financing and increase our borrowing costs;
•the impact of future U.S. governmental action to address budget deficits through reductions in spending and similar austerity measures, as well as the impact of U.S. government shutdowns, such as the past shutdown of the Department of Homeland Security, the furlough of federal employees, and potential future disruption resulting from the failure of the U.S. Congress to enact future appropriations bills or raise the federal debt ceiling, all of which could reduce the availability of government services and result in the suspension or delay of activities by key agencies that oversee air travel; the occurrence of any of these events may impact government related travel and leisure travel generally due to air traffic delays and the closures of parks or other tourism destinations, resulting in a decrease in demand at our hotels and which could also materially adversely affect U.S. economic conditions, business activity, credit availability and borrowing costs;
•operating risks associated with the hotel business, including the effect of labor stoppages or strikes, increasing operating or labor costs, including increased labor costs in the recent inflationary environment, the ability of our managers to adequately staff our hotels as a result of shortages in labor supply, including due to changes in
immigration laws or increased enforcement, and severance and furlough payments to hotel employees or changes in workplace rules that affect labor costs;
•the effect of rating agency downgrades of our debt securities or on the cost and availability of new debt financings;
•the reduction in our operating flexibility and the limitation on our ability to incur debt, pay dividends and make distributions resulting from restrictive covenants in our debt agreements and other risks associated with the amount of our indebtedness or related to restrictive covenants in our debt agreements, including the risk that a default could occur;
•our ability to maintain our hotels in a first-class manner, including meeting capital expenditures requirements, and the effect of renovations, including temporary closures, on our hotel occupancy and financial results;
•the ability of our hotels to compete effectively against other lodging businesses in the highly competitive markets in which we operate in areas such as access, location, quality of accommodations and room rate structures;
•our ability to acquire or develop additional hotels and the risk that potential acquisitions or developments may not perform in accordance with our expectations;
•the ability to complete hotel renovations on schedule and on, or under, budget and the potential for increased costs and construction delays due to shortages of supplies as a result of supply chain disruptions;
•relationships with property managers and joint venture partners and our ability to realize the expected benefits of our joint ventures and other strategic relationships;
•risks associated with a single manager, Marriott International, managing a significant percentage of our hotels;
•changes in the desirability of the geographic regions of the hotels in our portfolio or in the travel patterns of hotel customers;
•decreases in the frequency of business travel that may result from hybrid or remote work environments and other changes to business operations, such as alternatives to in-person meetings, including virtual meetings hosted online or over private teleconferencing networks;
•the continued competition from third-party internet travel intermediaries in attracting and retaining customers, which compete with our hotels;
•our ability to recover fully under our existing insurance policies for terrorist acts and natural disasters and our ability to maintain adequate or full replacement cost "all-risk" property insurance policies on our hotels on commercially reasonable terms;
•the effect of a data breach or significant disruption of hotel operator information technology networks as a result of cyber-attacks;
•the effects of tax legislative action and other changes in laws and regulations, or the interpretation thereof, including the need for compliance with new environmental and safety requirements;
•changes in taxes and government regulations that influence or set wages, hotel employee health care costs, prices, interest rates or construction and maintenance procedures and costs;
•the ability of Host Inc. and each of the REITs acquired, established or to be established by Host Inc. to continue to satisfy complex rules in order to qualify as REITs for U.S. federal income tax purposes and Host Inc.'s and Host L.P.'s ability and the ability of our subsidiaries, and similar entities to be acquired or established by us, to operate effectively within the limitations imposed by these rules; and
•risks associated with our ability to execute our dividend policy, including factors such as investment activity, operating results and the economic outlook, any or all of which may influence the decision of our Board of Directors as to whether to pay future dividends at levels previously disclosed or to use available cash to pay special dividends.
We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions, including those risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025 and in other filings with the Securities and Exchange Commission ("SEC"). We caution you not to
place undue reliance on these forward-looking statements, which reflect our analysis only and speak as of the date of this report. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material.
Operating Results and Outlook
Operating Results
The following table reflects certain line items from our unaudited condensed consolidated statements of operations and significant operating statistics (in millions, except per share and hotel statistics):
Historical Income Statement Data:
Quarter ended
September 30, 		Year-to-date ended
September 30,
2026 2025
Change
2026 2025
Change
Total revenues $ 1,347 $ 1,331 1.2 % $ 4,632 $ 4,511 2.7 %
Net income 71 163 (56.4 %) 813 639 27.2 %
Operating profit 121 101 19.8 % 733 663 10.6 %
Operating profit margin under GAAP 9.0 % 7.6 % 140 bps 15.8 % 14.7 % 110 bps
EBITDAre⁽¹⁾
$ 340 $ 314 8.3 % $ 1,396 $ 1,313 6.3 %
Adjusted EBITDAre⁽¹⁾
347 319 8.8 % 1,415 1,329 6.5 %
Diluted earnings per common share 0.10 0.23 (56.5 %) 1.16 0.91 27.5 %
NAREIT FFO per diluted share⁽¹⁾ 0.38 0.34 11.8 % 1.66 1.54 7.8 %
Adjusted FFO per diluted share⁽¹⁾ 0.39 0.35 11.4 % 1.69 1.56 8.3 %
Comparable Hotel Data:
Quarter ended
September 30, 		Year-to-date ended
September 30,
2026 2025
Change
2026 2025
Change
Comparable hotel revenues⁽¹⁾ $ 1,312 $ 1,222 7.4 % $ 4,392 $ 4,149 5.9 %
Comparable hotel EBITDA⁽¹⁾ 331 297 11.4 % 1,327 1,226 8.2 %
Comparable hotel EBITDA margin⁽¹⁾ 25.2 % 24.3 % 90 bps 30.2 % 29.5 % 70 bps
Comparable hotel Total RevPAR⁽¹⁾ $ 348.19 $ 324.47 7.3 % $ 392.74 $ 371.19 5.8 %
Comparable hotel RevPAR⁽¹⁾ 219.50 201.71 8.8 % 237.21 222.51 6.6 %
___________
(1)EBITDAre, Adjusted EBITDAre, NAREIT FFO per diluted share and Adjusted FFO per diluted share and comparable hotel operating results (including hotel revenues and hotel EBITDA and margins) are non-GAAP financial measures within the meaning of the rules of the SEC. See "Non-GAAP Financial Measures" and "Comparable Hotel Operating Statistics and Results" for more information on these measures, including why we believe these supplemental measures are useful, reconciliations to the most directly comparable GAAP measure, and the limitations on the use of these supplemental measures. Additionally, comparable hotel results and statistics are based on 73 comparable hotels as of September 30, 2026 and include adjustments for non-comparable hotels, dispositions and acquisitions. See Comparable Hotel RevPAR Overview for results of the portfolio based on our ownership period, without these adjustments.
Revenues
Total revenues increased $16 million, or 1.2%, and $121 million, or 2.7%, for the third quarter and year-to-date 2026, respectively, as compared to 2025. In the quarter, growth in revenues reflects a comparable hotel RevPAR increase of 8.8%, due to an increase in both room rates and occupancy, reflecting very strong transient demand throughout the quarter, boosted by the World Cup and an increase in business transient demand, in addition to an increase in group bookings, and despite the impacts from an active hurricane season in Hawaii during the quarter. Comparable hotel Total RevPAR increased 7.3% for the third quarter compared to 2025, reflecting the increase in rooms revenue and growth in
food and beverage spend. However, the improvements in hotel operations were partially offset by the reduction of $80 million in revenues in the third quarter due to the 2025 and 2026 dispositions of Washington Marriott at Metro Center, St. Regis Houston, the Four Seasons Resort Orlando at Walt Disney World® Resort, the Four Seasons Resort and Residences Jackson Hole, and the Sheraton Parsippany Hotel, and further reduced by the one-month closure of Alila Ventana Big Sur due to wildfire evacuations. In addition, $7 million of revenues were recognized during the third quarter from the sale of one villa in the development adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort. Year-to-date, comparable hotel RevPAR and comparable hotel Total RevPAR increased 6.6% and 5.8%, respectively, and total revenues also benefited from a full period of operations following the reopening of The Don CeSar in March 2025.
For the quarter, growth in comparable hotel Total RevPAR was broad-based, with improvements throughout the quarter, demonstrating solid revenue performance. Our Washington, D.C. and Boston markets had strong performances compared to the third quarter of 2025, with increases of 19.0% and 13.4%, respectively, due to improved group and strong leisure demand, driven by special events, including America 250 celebrations, with Washington, D.C. further benefiting from recently completed renovations at certain properties and the associated disruption in 2025. Our Florida Gulf Coast market's 15.8% growth reflected increases in both transient and group business and our Maui market had an increase of 11.8% as the recovery from the 2023 wildfires continues, and despite the impact of several hurricanes and storms during the quarter. Additionally, our Austin market led the portfolio with an increase of 62.4%, primarily due to the impact of large-scale renovation projects recently completed and the associated renovation disruption in 2025, while also seeing stronger leisure and business travel demand. These strong performances were partially offset by comparable hotel Total RevPAR declines in our Phoenix and Los Angeles/Orange County markets of 31.9% and 1.0%, respectively, as both markets were impacted by renovation disruptions, with The Westin Kierland Resort & Spa and The Ritz Carlton, Marina del Rey currently under renovation as part of our second Marriott Transformational Capital Program.
Operating profit
For the third quarter and year-to-date 2026, operating profit margin under GAAP was 9.0% and 15.8%, respectively, an improvement of 140 basis points and 110 basis points, respectively, compared to the same periods in 2025, as improvements in room rates offset increases in wage expense and a $5 million and $17 million decrease in net gains on insurance settlements recognized during the quarter and year-to-date, respectively. Comparable hotel EBITDA margin was 25.2% and 30.2% for the third quarter and year-to-date 2026, respectively, an improvement of 90 basis points and 70 basis points, respectively, reflecting improvements in operations, largely driven by average room rate increases, which offset increases in wage expense and incentive management fees over the same period in 2025.
Net income, Adjusted EBITDAre, Diluted Earnings per Common Share, and Adjusted FFO per share
Net income decreased $92 million for the quarter, due to a decline in gain on asset sales, while improved operations more than offset declines due to the sale of six hotels in 2025 and 2026. Year-to-date in 2026, net income increased $174 million, benefiting from an increase in gain on asset sales. These changes led to a decrease in diluted earnings per share of $0.13, or 56.5%, for the quarter and an increase of $0.25, or 27.5%, for year-to-date. Adjusted EBITDAre, which excludes gain on asset sales, among other items, increased $28 million and $86 million for the third quarter and year-to-date, respectively. Adjusted FFO per diluted share increased $0.04, or 11.4%, and $0.13, or 8.3%, for the quarter and year-to-date, respectively, reflecting the changes in Adjusted EBITDAre and additionally benefiting from share repurchases in 2025 and 2026.
Outlook
Comparable hotel RevPAR increased 8.8% in the third quarter, contributing to 6.6% RevPAR growth year-to-date compared to 2025, driven by a combination of higher average room rates and improved occupancy. These results reflect broad-based strength across transient and group demand. Transient revenue growth was bolstered by special events, including the FIFA World Cup and America 250 celebrations in July, as well as accelerating business travel throughout the quarter. Group revenue growth also benefited from special events, as well as strong performance at our convention hotels driven by corporate groups. For the fourth quarter, we expect favorable group booking pace and sustained average rates to support continued strong performance and a continuation of the trends noted above.
The macroeconomic backdrop remains supportive, with the October 2026 Blue Chip Economic Indicators survey raising its projection for 2026 real GDP growth to approximately 2.3%, supported by business investment and consumer spending. Higher-income households, which represent the majority of the customers at our hotels, remain an important
source of discretionary spending and travel demand. However, persistent inflationary pressures, higher long-term interest rates, trade policy developments and geopolitical uncertainty continue to present downside risks to economic growth and travel demand.
Overall hotel supply growth expectations remain below the historical average, although we continue to expect above-average growth in a limited number of markets where our hotels are located. We expect the lodging supply pipeline will remain relatively constrained until the cost of financing and construction eases.
Based on the trends noted, we expect comparable hotel RevPAR growth for the full year 2026 will be approximately 6.75%. We expect year-over-year margin to increase compared to 2025, as rate improvements have been able to offset increases in wage expenses.
As discussed above, the current outlook for the lodging industry remains uncertain due to the potential impacts of macroeconomic conditions, trade policy developments and geopolitical conflicts. Therefore, there can be no assurances as to lodging demand performance for any number of reasons, including, but not limited to, deteriorating macroeconomic conditions or other factors that may adversely impact travel demand.
Strategic Initiatives
Acquisitions. Subsequent to quarter end, we acquired the fee simple interest in the 308-room Renaissance Dallas at Plano Legacy West Hotel for a purchase price of $172 million and acquired the leasehold interest in the 195-room 1 Hotel Brooklyn Bridge for $202 million, which is net of $4 million for the furniture, fixtures and equipment ("FF&E") replacement funds funded by the seller. The 1 Hotel Brooklyn Bridge is subject to a ground lease that expires in 2109.
Financing transactions. Subsequent to quarter end, we amended and restated our $2.5 billion credit facility, extending the maturity dates of both the revolver and outstanding term loans, achieving an improved credit ratings-based pricing grid and maintaining pricing incentives linked to portfolio sustainability initiatives.
We believe that our ability to maintain an investment grade balance sheet and well-laddered maturity schedule is an important factor in our investment strategy. As of September 30, 2026, after taking into account the amended and restated credit facility agreement, our weighted average interest rate is 4.8%, and our weighted average debt maturity is 5.2 years. For a detailed discussion, see "Debt".
Capital Projects. Year-to-date through the third quarter of 2026, we spent approximately $174 million on return on investment ("ROI") capital projects, including the transformation programs discussed below, $213 million on renewal and replacement projects and $5 million on restoration work related to the Kona Low storm in Hawaii. We previously completed our restoration efforts at The Don CeSar following Hurricanes Helene and Milton, and as of September 30, 2026, we have received total insurance proceeds of $82 million related to our claims, of which $31 million has been recognized as business interruption proceeds.
In collaboration with Hyatt, we initiated a transformational capital program in 2023 on six properties in our portfolio. These investments are intended to position the targeted hotels to compete better in their respective markets while seeking to enhance long-term performance. We expect to invest approximately $125 million to $200 million per year on this program through 2027, for a total investment of approximately $525 million to $550 million. Hyatt has agreed to provide additional priority returns on the agreed upon investments and operating profit guarantees totaling $40 million to offset expected business disruptions. Approximately 93% of the total estimated costs of the program have been spent as of September 30, 2026.
We also reached an agreement with Marriott International in 2025 to complete a second transformational capital program at four properties over a four-year period. These portfolio investments are designed to better position the assets to compete in their respective markets and enhance long-term performance. We expect to spend between $300 million and $350 million through 2029. In exchange, Marriott has provided enhanced owner priority returns on the agreed upon investments and operating profit guarantees of approximately $18 million, which is net of reductions for incentive management fees, to offset expected business disruption. During the third quarter of 2026, we substantially completed the transformational renovation at The Ritz-Carlton Naples, Tiburon.
For full year 2026, we expect total capital expenditures of $550 million to $600 million, consisting of ROI projects of approximately $255 million to $280 million, including approximately $180 million to $195 million for the Marriott and Hyatt transformational capital programs discussed above, and renewal and replacement expenditures of $285 million to $305 million. Additionally, we expect estimated spend of $10 million to $15 million for restoration work at our Hawaii properties following the Kona Low rainstorm in March. Remediation efforts are substantially complete, and the hotels remained operational with isolated instances of water damage. We are still evaluating the complete property and business interruption impacts of the storm, but currently estimate the total property costs to be approximately $20 million to $25 million, which includes remediation costs of approximately $2 million, and completion of restoration efforts in 2027. We expect our insurance coverage to substantially cover the property damage in excess of our insurance deductible.
We completed the construction of 40 condominiums on a five-acre development parcel that are Four Seasons-branded and managed residences at the Four Seasons Resort Orlando at Walt Disney World® Resort. Year-to-date in 2026, we spent $17 million in development costs for this project, completing the villas and final stages of the project. We recognized $7 million of revenues from the sale of one villa during the third quarter of 2026.
Results of Operations
The following table reflects certain line items from our unaudited condensed consolidated statements of operations (in millions, except percentages):
Quarter ended
September 30, 		Year-to-date ended
September 30,
2026 2025
Change
2026 2025
Change
Total revenues $ 1,347 $ 1,331 1.2 % $ 4,632 $ 4,511 2.7 %
Operating costs and expenses:
Property-level costs ⁽¹⁾ 1,190 1,208 (1.5) % 3,748 3,789 (1.1) %
Cost of goods sold (2)
6 - N/M 71 - N/M
Corporate and other expenses 30 27 11.1 % 87 83 4.8 %
Net gain on insurance settlements - 5 (100.0) % 7 24 (70.8) %
Operating profit 121 101 19.8 % 733 663 10.6 %
Interest expense 59 60 (1.7) % 176 175 0.6 %
Other gains (losses) (6) 122 (104.9) % 235 148 58.8 %
Provision for income taxes 7 9 (22.2) % 42 35 20.0 %
Host Inc.:
Net income attributable to non-controlling interests 1 2 (50.0) % 12 9 33.3 %
Net income attributable to Host Inc. 70 161 (56.5) % 801 630 27.1 %
Host L.P.:
Net income attributable to non-controlling interests - 1 (100.0) % 1 1 - %
Net income attributable to Host L.P. 71 162 (56.2) % 812 638 27.3 %
___________
(1)Amounts represent total operating costs and expenses from our unaudited condensed consolidated statements of operations, less cost of goods sold, corporate and other expenses and net gain on insurance settlements.
(2)Amounts represent the costs related to the development and sale of condominium units adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort.
N/M = Not meaningful.
Statements of Operations Results and Trends
The following table presents total revenues in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):
Quarter ended
September 30, 		Year-to-date ended
September 30,
2026 2025
Change
2026 2025
Change
Revenues:
Rooms $ 841 $ 826 1.8 % $ 2,738 $ 2,713 0.9 %
Food and beverage 367 364 0.8 % 1,368 1,345 1.7 %
Other 132 141 (6.4 %) 440 453 (2.9) %
Condominium sales 7 - N/M 86 - N/M
Total revenues $ 1,347 $ 1,331 1.2 % $ 4,632 $ 4,511 2.7 %
N/M = Not meaningful.
Total revenues for the third quarter and year-to-date increased 1.2% and 2.7%, respectively, compared to 2025, as improvements in hotel operations were partially offset by the reduction of revenues due to the 2025 and 2026 dispositions and the one-month closure of Alila Ventana Big Sur during the third quarter 2026 due to wildfire evacuations. For the remaining portfolio, revenue growth was due to a combination of higher room rates and improved occupancy, driven by both transient and group demand, benefiting from special events and an increase in business travel. Revenues also reflect $7 million and $86 million of condominium sales recognized in the third quarter and year-to-date 2026, respectively, from the sale of condominium units in the development adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort. Year-to-date results also benefited from a full first quarter of results at The Don CeSar, which re-opened in March 2025.
Rooms. Total rooms revenues increased $15 million, or 1.8%, and $25 million, or 0.9%, for the third quarter and year-to-date, respectively, compared to 2025, reflecting an increase at our comparable hotels, partially offset by a reduction in rooms revenues due to our 2025 and 2026 dispositions. Rooms revenues at our comparable hotels increased $67 million, or 8.8%, and $166 million, or 6.7%, for the third quarter and year-to-date, respectively, due to an increase in average room rates of 5.7% and 5.0%, respectively, and improved occupancy, driven by both transient and group demand, benefiting from strong event-related demand, accelerating business travel and completed renovations at our properties.
Food and beverage. Total food and beverage ("F&B") revenues increased $3 million, or 0.8%, and $23 million, or 1.7%, for the third quarter and year-to-date, respectively, compared to 2025, reflecting an increase in F&B revenues at our comparable hotels, partially offset by a reduction in F&B revenues due to our 2025 and 2026 dispositions. F&B revenues at our comparable hotels increased $21 million, or 6.2%, and $69 million, or 5.5%, for the third quarter and year-to-date, respectively, driven by growth in banquet and audio-visual revenues from higher group room night volume and strong group contribution.
Other revenues. Total other revenues decreased $9 million, or 6.4%, and $13 million, or 2.9%, for the quarter and year-to-date, respectively, compared to 2025, reflecting the reduction in other revenues due to our 2025 and 2026 dispositions. Other revenues at our comparable hotels increased $2 million, or 1.6%, and $8 million, or 2.0%, for the quarter and year-to-date, respectively, compared to 2025, primarily due to increases in golf and other ancillary revenues, partially offset by a decrease in attrition and cancellation fees.
Condominium sales. We recognized $7 million and $86 million of revenues in the third quarter and year-to-date 2026, respectively, from the sale of four condominium units and eight villas year-to-date, including one villa in the third quarter, at the development adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort.
Property-level Operating Expenses
The following table presents property-level operating expenses in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):
Quarter ended
September 30, 		Year-to-date ended
September 30,
2026 2025
Change
2026 2025
Change
Expenses:
Rooms $ 225 $ 222 1.4 % $ 680 $ 680 - %
Food and beverage 273 278 (1.8) % 911 914 (0.3) %
Other departmental and support expenses 355 357 (0.6) % 1,099 1,096 0.3 %
Management fees 56 52 7.7 % 197 191 3.1 %
Other property-level expenses 94 103 (8.7) % 291 321 (9.3) %
Depreciation and amortization 187 196 (4.6) % 570 587 (2.9) %
Total property-level operating expenses $ 1,190 $ 1,208 (1.5) % $ 3,748 $ 3,789 (1.1) %
Our operating costs and expenses, which consist of both fixed and variable components, are affected by several factors. Rooms expenses are affected mainly by occupancy, which drives costs related to items such as housekeeping, reservation systems, room supplies, laundry services and front desk costs. Food and beverage expenses correlate closely with food and beverage revenues and are affected by occupancy and the mix of business between banquet, audio-visual and outlet sales. However, the most significant expense for the rooms, food and beverage, and other departmental and support expenses is wages and employee benefits, which comprise approximately 58% of these expenses. For the quarter and year-to-date of 2026, these expenses generally increased approximately 6.0% and 5.5%, respectively, across our portfolio compared to 2025, primarily due to an overall increase in general wage rates and benefits. Wage and benefit rate inflation is expected to be approximately 5% in 2026.
Other property-level expenses consist of property taxes, the amounts and structure of which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, all of which do not necessarily increase or decrease based on similar changes in revenues at our hotels.
Rooms. Rooms expenses increased $3 million, or 1.4%, for the quarter and were flat year-to-date, reflecting an increase in rooms expenses at our comparable hotels, which was largely offset for the quarter and fully offset year-to-date by a reduction in rooms expense resulting from our 2025 and 2026 dispositions. Our comparable hotels rooms expenses increased $14 million, or 6.7%, and $30 million, or 4.7%, for the quarter and year-to-date, respectively, driven by an overall increase in wage rates, partially offset by rooms productivity improvements.
Food and beverage. F&B expenses decreased $5 million, or 1.8%, and $3 million, or 0.3%, for the quarter and year-to-date, respectively, as the reduction in F&B expenses due to our 2025 and 2026 dispositions offset increases in F&B expenses at our comparable hotels of $12 million, or 4.7%, and $37 million, or 4.4%, respectively, and year-to-date also included incremental expenses following the reopening of The Don CeSar in March 2025. The increases at our comparable hotels reflect increased F&B revenues, though overall, F&B costs as a percentage of revenues declined year-over-year as a result of productivity improvements and a more favorable mix of F&B business between banquet, audio-visual and outlet sales.
Other departmental and support expenses. Other departmental and support expenses decreased $2 million, or 0.6%, for the quarter and increased $3 million, or 0.3%, year-to-date, driven by a reduction in expenses due to our 2025 and 2026 dispositions, which were partially offset for the quarter and more than offset year-to-date by the growth in these expenses at our comparable hotels. The increases at our comparable hotels of $21 million, or 6.5%, and $61 million, or 6.1%, for the quarter and year-to-date, respectively, were primarily due to higher wage expense and utility cost growth in certain markets.
Management fees. Total management fees increased $4 million, or 7.7%, and $6 million, or 3.1%, for the quarter and year-to-date, respectively. Base management fees, which generally are calculated as a percentage of total revenues,
increased $1 million for both the quarter and year-to-date. Incentive management fees, which generally are based on the amount of operating profit at each hotel after we receive a priority return on our investment, increased $3 million, or 18.8%, and $5 million, or 7.5%, for the quarter and year-to-date, respectively. Both base and incentive management fees reflect an increase in fees at our comparable hotels due to improved operations, partially offset by the reduction in fees due to our 2025 and 2026 dispositions.
Other property-level expenses. These expenses generally do not vary significantly based on occupancy and include expenses such as property taxes and insurance. Other property-level expenses decreased $9 million, or 8.7%, and $30 million, or 9.3%, for the quarter and year-to-date, respectively, primarily due to a reduction in expenses resulting from our 2025 and 2026 dispositions. For our comparable hotels, other property-level expenses increased $2 million, or 1.9%, for the quarter, due to an increase in property taxes, and decreased $5 million, or 1.9%, year-to-date, driven by decreases in property insurance premiums. Other property-level expenses were partially offset by the receipt of operating profit guarantees under the transformational capital programs in both 2026 and 2025.
Other Income and Expense
Cost of goods sold. Cost of goods sold totaled $6 million and $71 million for the quarter and year-to-date periods ended September 30, 2026, respectively, which related to the sale of four condominium units and eight villas year-to-date, including one villa in the third quarter, at the development adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort. Cost of goods sold for these condominiums and villas consists primarily of capitalized construction and development costs, which are recognized upon the sale of individual units.
Corporate and other expenses. The following table details our corporate and other expenses for the quarter and year-to-date (in millions):
Quarter ended September 30, Year-to-date ended September 30,
2026 2025 2026 2025
General and administrative costs $ 23 $ 22 $ 68 $ 67
Non-cash stock-based compensation expense 7 5 19 16
Total $ 30 $ 27 $ 87 $ 83
Interest expense. The following table details our interest expense for the quarter and year-to-date (in millions):
Quarter ended September 30, Year-to-date ended September 30,
2026 2025 2026 2025
Cash interest expense ⁽¹⁾ $ 56 $ 56 $ 167 $ 166
Non-cash interest expense 3 4 9 9
Total interest expense $ 59 $ 60 $ 176 $ 175
_________
(1)Including the change in accrued interest, total cash interest paid was $42 million and $51 million for the quarters ended September 30, 2026 and 2025, respectively, and $154 million and $170 million year-to-date 2026 and 2025, respectively.
Other gains (losses). Other gains totaled $235 million year-to-date in 2026, reflecting the sales of The St. Regis Houston, the Four Seasons Resort Orlando at Walt Disney World® Resort and the Four Seasons Resort and Residences Jackson Hole and the Sheraton Parsippany Hotel during the first half of 2026.
Provision for income taxes. We lease substantially all our properties to consolidated subsidiaries designated as taxable REIT subsidiaries ("TRS") for U.S. federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations, net of the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit. For the third quarter and year-to-date of 2026, we recorded a net income tax provision of $7 million and $42 million, respectively, primarily due to the profitability of hotel operations retained by the TRS.
Comparable Hotel RevPAR Overview
We discuss operating results for our hotels on a comparable hotel basis. Comparable hotels are those properties that we consolidate as of the reporting date. Comparable hotels do not include the results of hotels sold or classified as held-for-sale, hotels that have sustained substantial property damage or business interruption, or hotels that have undergone large-scale capital projects, in each case requiring closures lasting one month or longer during the reporting periods being compared. See "Comparable Hotel Operating Statistics and Results" below for more information on how we determine our comparable hotels.
We also include, following the comparable hotels results by geographic location, the same operating statistics presentation on an actual basis, which includes results for our portfolio for the time period of our ownership, including the results of non-comparable properties, dispositions through their date of disposal and acquisitions beginning as of the date of acquisition. Lastly, we discuss our hotel results by mix of business (i.e., transient, group, or contract).
Hotel Operating Data by Location
The following tables set forth performance information for our hotels by geographic location for the quarter and year-to-date ended September 30, 2026 and 2025 on a comparable hotel and actual basis:
Comparable Hotel Results by Location
As of September 30, 2026
Quarter ended September 30, 2026 Quarter ended September 30, 2025
Location No. of
Properties 		No. of
Rooms 		Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Percent
Change in
RevPAR 		Percent
Change in
Total RevPAR
Maui 3 1,580 $ 637.25 76.1 % $ 484.92 $ 754.87 $ 611.54 69.9 % $ 427.23 $ 675.34 13.5 % 11.8 %
Jacksonville 1 446 571.04 72.9 % 416.13 911.98 516.44 72.4 % 374.11 826.86 11.2 % 10.3 %
Miami
2 1,038 436.84 58.2 % 254.44 459.22 387.67 59.1 % 229.04 433.63 11.1 % 5.9 %
Oahu 2 876 506.03 82.7 % 418.48 643.91 481.95 83.8 % 403.71 620.81 3.7 % 3.7 %
Florida Gulf Coast 4 1,529 358.41 53.9 % 193.11 406.21 375.39 42.7 % 160.16 350.93 20.6 % 15.8 %
New York 3 2,720 442.30 88.7 % 392.53 531.16 400.99 88.9 % 356.36 487.87 10.1 % 8.9 %
Nashville 2 721 345.67 81.5 % 281.64 488.48 330.15 77.6 % 256.22 449.68 9.9 % 8.6 %
Phoenix 3 1,565 275.17 40.1 % 110.47 279.75 262.62 61.9 % 162.56 410.51 (32.0 %) (31.9 %)
Los Angeles/Orange County 3 1,067 313.97 77.4 % 242.97 351.09 308.01 76.7 % 236.26 354.62 2.8 % (1.0 %)
San Diego 3 3,294 313.84 77.8 % 244.08 429.21 302.44 76.9 % 232.44 410.75 5.0 % 4.5 %
Boston 2 1,496 319.87 83.6 % 267.46 343.76 297.49 79.6 % 236.86 303.04 12.9 % 13.4 %
Washington, D.C. (CBD) 4 2,788 279.94 67.6 % 189.30 276.10 265.42 56.6 % 150.31 232.09 25.9 % 19.0 %
Philadelphia 2 810 258.11 85.0 % 219.45 319.47 231.56 83.9 % 194.39 301.51 12.9 % 6.0 %
San Francisco/San Jose 6 4,162 241.98 77.1 % 186.54 267.88 228.63 74.7 % 170.68 243.57 9.3 % 10.0 %
Northern Virginia 2 916 273.59 73.8 % 201.84 301.29 254.61 72.4 % 184.39 268.82 9.5 % 12.1 %
Chicago 3 1,562 293.68 85.0 % 249.64 343.57 275.28 83.7 % 230.39 323.52 8.4 % 6.2 %
Seattle 2 1,315 277.90 86.2 % 239.55 310.71 278.57 82.7 % 230.37 292.94 4.0 % 6.1 %
Orlando 1 2,004 209.36 56.9 % 119.17 338.82 207.95 54.1 % 112.42 315.86 6.0 % 7.3 %
Austin 2 769 223.81 57.7 % 129.15 255.71 205.41 41.4 % 85.07 157.45 51.8 % 62.4 %
Atlanta 2 810 225.60 69.0 % 155.75 250.37 205.50 69.2 % 142.11 218.67 9.6 % 14.5 %
Houston 4 1,710 200.78 64.9 % 130.40 182.47 195.20 61.2 % 119.37 163.15 9.2 % 11.8 %
San Antonio 2 1,512 215.52 62.0 % 133.66 203.81 207.97 58.2 % 121.08 186.09 10.4 % 9.5 %
Denver 3 1,342 214.09 75.6 % 161.81 237.11 213.29 74.8 % 159.43 230.23 1.5 % 3.0 %
New Orleans 1 1,333 164.81 58.5 % 96.46 175.58 150.07 58.8 % 88.31 151.18 9.2 % 16.1 %
Other 6 2,056 221.88 70.9 % 157.30 229.68 211.73 72.4 % 153.38 228.83 2.6 % 0.4 %
Domestic 68 39,421 307.98 71.8 % 221.17 352.45 291.67 69.8 % 203.49 328.88 8.7 % 7.2 %
International 5 1,499 234.82 74.7 % 175.46 235.72 214.10 72.3 % 154.77 206.87 13.4 % 13.9 %
All Locations 73 40,920 $ 305.20 71.9 % $ 219.50 $ 348.19 $ 288.73 69.8 % $ 201.71 $ 324.47 8.8 % 7.3 %
Comparable Hotel Results by Location
As of September 30, 2026
Year-to-date ended September 30, 2026 Year-to-date ended September 30, 2025
Location No. of
Properties 		No. of
Rooms 		Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Percent
Change in
RevPAR 		Percent
Change in
Total RevPAR
Maui 3 1,580 $ 647.81 77.6 % $ 502.67 $ 785.01 $ 641.29 71.8 % $ 460.58 $ 728.70 9.1 % 7.7 %
Jacksonville 1 446 590.75 75.8 % 447.90 1,005.52 546.80 74.6 % 407.90 918.63 9.8 % 9.5 %
Miami
2 1,038 610.37 73.3 % 447.62 771.89 541.24 72.8 % 394.28 694.08 13.5 % 11.2 %
Oahu 2 876 499.03 80.3 % 400.55 631.98 482.90 83.5 % 403.43 618.34 (0.7 %) 2.2 %
Florida Gulf Coast 4 1,529 541.75 67.8 % 367.51 783.46 518.80 65.0 % 337.19 734.07 9.0 % 6.7 %
New York 3 2,720 410.20 86.2 % 353.42 507.61 381.66 85.9 % 327.75 471.21 7.8 % 7.7 %
Nashville 2 721 355.95 80.8 % 287.75 491.88 338.77 80.7 % 273.48 469.46 5.2 % 4.8 %
Phoenix 3 1,565 430.33 63.9 % 274.90 618.46 389.03 71.5 % 278.30 651.58 (1.2 %) (5.1 %)
Los Angeles/Orange County 3 1,067 318.80 77.6 % 247.33 365.69 306.41 78.2 % 239.47 361.29 3.3 % 1.2 %
San Diego 3 3,294 312.45 77.0 % 240.45 446.48 302.30 76.2 % 230.25 430.73 4.4 % 3.7 %
Boston 2 1,496 309.93 74.2 % 230.10 308.16 291.42 75.7 % 220.46 287.97 4.4 % 7.0 %
Washington, D.C. (CBD) 4 2,788 308.08 69.3 % 213.48 314.92 312.81 63.6 % 198.84 290.96 7.4 % 8.2 %
Philadelphia 2 810 256.54 81.2 % 208.43 310.56 235.96 82.1 % 193.71 295.87 7.6 % 5.0 %
San Francisco/San Jose 6 4,162 281.75 73.4 % 206.69 297.79 255.37 70.3 % 179.44 265.08 15.2 % 12.3 %
Northern Virginia 2 916 278.06 72.9 % 202.77 308.70 268.51 68.6 % 184.16 284.99 10.1 % 8.3 %
Chicago 3 1,562 265.10 73.6 % 195.20 277.13 252.43 72.0 % 181.64 258.88 7.5 % 7.0 %
Seattle 2 1,315 254.48 71.5 % 181.97 245.44 251.35 71.8 % 180.44 240.72 0.8 % 2.0 %
Orlando 1 2,004 243.15 66.9 % 162.61 423.08 237.25 67.0 % 158.98 408.96 2.3 % 3.5 %
Austin 2 769 248.25 65.0 % 161.32 305.06 238.80 52.4 % 125.10 231.79 29.0 % 31.6 %
Atlanta 2 810 226.09 69.6 % 157.25 266.08 214.99 68.2 % 146.72 244.64 7.2 % 8.8 %
Houston 4 1,710 217.35 69.3 % 150.63 207.55 209.62 68.2 % 142.92 198.42 5.4 % 4.6 %
San Antonio 2 1,512 228.68 64.3 % 147.10 233.54 223.44 61.8 % 138.18 219.96 6.5 % 6.2 %
Denver 3 1,342 206.28 66.6 % 137.37 207.97 203.98 67.2 % 137.17 207.38 0.1 % 0.3 %
New Orleans 1 1,333 188.90 61.9 % 116.98 199.75 205.67 65.4 % 134.43 215.07 (13.0 %) (7.1 %)
Other 6 2,056 244.59 70.2 % 171.69 252.19 236.90 70.8 % 167.72 250.83 2.4 % 0.5 %
Domestic 68 39,421 331.71 72.5 % 240.59 399.76 316.34 71.4 % 225.90 378.29 6.5 % 5.7 %
International 5 1,499 218.72 67.8 % 148.37 207.04 196.33 67.9 % 133.40 183.36 11.2 % 12.9 %
All Locations 73 40,920 $ 327.84 72.4 % $ 237.21 $ 392.74 $ 312.15 71.3 % $ 222.51 $ 371.19 6.6 % 5.8 %
Results by Location - actual, based on ownership period(1)
As of September 30,
2026 2025 Quarter ended September 30, 2026 Quarter ended September 30, 2025
Location No. of
Properties 		No. of
Properties 		Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Percent
Change in
RevPAR 		Percent
Change in
Total RevPAR
Maui 3 3 $ 637.25 76.1 % $ 484.92 $ 754.87 $ 611.54 69.9 % $ 427.23 $ 675.34 13.5 % 11.8 %
Jacksonville 1 1 571.04 72.9 % 416.13 911.98 516.44 72.4 % 374.11 826.86 11.2 % 10.3 %
Miami 2 2 436.84 58.2 % 254.44 459.22 387.67 59.1 % 229.04 433.63 11.1 % 5.9 %
Oahu 2 2 506.03 82.7 % 418.48 643.91 481.95 83.8 % 403.71 620.81 3.7 % 3.7 %
Florida Gulf Coast 5 5 364.47 56.6 % 206.27 436.40 372.69 46.3 % 172.40 369.38 19.6 % 18.1 %
New York 3 3 442.30 88.7 % 392.53 531.16 400.99 88.9 % 356.36 487.87 10.1 % 8.9 %
Nashville 2 2 345.67 81.5 % 281.64 488.48 330.15 77.6 % 256.22 449.68 9.9 % 8.6 %
Phoenix 3 3 275.17 40.1 % 110.47 279.75 262.62 61.9 % 162.56 410.51 (32.0 %) (31.9 %)
Los Angeles/Orange County 3 3 313.97 77.4 % 242.97 351.09 308.01 76.7 % 236.26 354.62 2.8 % (1.0 %)
San Diego 3 3 313.84 77.8 % 244.08 429.21 302.44 76.9 % 232.44 410.75 5.0 % 4.5 %
Boston 2 2 319.87 83.6 % 267.46 343.76 297.49 79.6 % 236.86 303.04 12.9 % 13.4 %
Washington, D.C. (CBD) 4 4 279.94 67.6 % 189.30 276.10 260.24 57.4 % 149.50 227.53 26.6 % 21.3 %
Philadelphia 2 2 258.11 85.0 % 219.45 319.47 231.56 83.9 % 194.39 301.51 12.9 % 6.0 %
San Francisco/San Jose 6 6 241.98 77.1 % 186.54 267.88 228.63 74.7 % 170.68 243.57 9.3 % 10.0 %
Northern Virginia 2 2 273.59 73.8 % 201.84 301.29 254.61 72.4 % 184.39 268.82 9.5 % 12.1 %
Chicago 3 3 293.68 85.0 % 249.64 343.57 275.28 83.7 % 230.39 323.52 8.4 % 6.2 %
Seattle 2 2 277.90 86.2 % 239.55 310.71 278.57 82.7 % 230.37 292.94 4.0 % 6.1 %
Orlando 1 2 209.36 56.9 % 119.17 338.82 346.50 53.4 % 185.18 421.34 (35.6 %) (19.6 %)
Austin 2 2 223.81 57.7 % 129.15 255.71 205.41 41.4 % 85.07 157.45 51.8 % 62.4 %
Atlanta 2 2 225.60 69.0 % 155.75 250.37 205.50 69.2 % 142.11 218.67 9.6 % 14.5 %
Houston 4 5 200.78 64.9 % 130.40 182.47 204.97 58.2 % 119.28 164.24 9.3 % 11.1 %
San Antonio 2 2 215.52 62.0 % 133.66 203.81 207.97 58.2 % 121.08 186.09 10.4 % 9.5 %
Denver 3 3 214.09 75.6 % 161.81 237.11 213.29 74.8 % 159.43 230.23 1.5 % 3.0 %
New Orleans 1 1 164.81 58.5 % 96.46 175.58 150.07 58.8 % 88.31 151.18 9.2 % 16.1 %
Other 7 9 257.44 70.8 % 182.17 267.57 353.05 71.1 % 251.04 382.79 (27.4 %) (30.1 %)
Domestic 70 74 310.38 71.8 % 222.77 356.18 305.68 69.2 % 211.63 342.53 5.3 % 4.0 %
International 5 5 234.82 74.7 % 175.46 235.72 214.10 72.3 % 154.77 206.87 13.4 % 13.9 %
All Locations 75 79 $ 307.53 71.9 % $ 221.06 $ 351.83 $ 302.34 69.3 % $ 209.64 $ 337.84 5.4 % 4.1 %
Results by Location - actual, based on ownership period(1)
As of September 30,
2026 2025 Year-to-date ended September 30, 2026 Year-to-date ended September 30, 2025
Location No. of
Properties 		No. of
Properties 		Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Average
Room Rate 		Average
Occupancy
Percentage 		RevPAR Total RevPAR Percent
Change in
RevPAR 		Percent
Change in
Total RevPAR
Maui 3 3 $ 647.81 77.6 % $ 502.67 $ 785.01 $ 641.29 71.8 % $ 460.58 $ 728.70 9.1 % 7.7 %
Jacksonville 1 1 590.75 75.8 % 447.90 1,005.52 546.80 74.6 % 407.90 918.63 9.8 % 9.5 %
Miami 2 2 610.37 73.3 % 447.62 771.89 541.24 72.8 % 394.28 694.08 13.5 % 11.2 %
Oahu 2 2 499.03 80.3 % 400.55 631.98 482.90 83.5 % 403.43 618.34 (0.7 %) 2.2 %
Florida Gulf Coast 5 5 524.88 69.3 % 363.68 769.42 500.78 62.0 % 310.25 662.29 17.2 % 16.2 %
New York 3 3 410.20 86.2 % 353.42 507.61 381.66 85.9 % 327.75 471.21 7.8 % 7.7 %
Nashville 2 2 355.95 80.8 % 287.75 491.88 338.77 80.7 % 273.48 469.46 5.2 % 4.8 %
Phoenix 3 3 430.33 63.9 % 274.90 618.46 389.03 71.5 % 278.30 651.58 (1.2 %) (5.1 %)
Los Angeles/Orange County 3 3 318.80 77.6 % 247.33 365.69 306.41 78.2 % 239.47 361.29 3.3 % 1.2 %
San Diego 3 3 312.45 77.0 % 240.45 446.48 302.30 76.2 % 230.25 430.73 4.4 % 3.7 %
Boston 2 2 309.93 74.2 % 230.10 308.16 291.42 75.7 % 220.46 287.97 4.4 % 7.0 %
Washington, D.C. (CBD) 4 4 308.08 69.3 % 213.48 314.92 309.88 65.0 % 201.57 290.56 5.9 % 8.4 %
Philadelphia 2 2 256.54 81.2 % 208.43 310.56 235.96 82.1 % 193.71 295.87 7.6 % 5.0 %
San Francisco/San Jose 6 6 281.75 73.4 % 206.69 297.79 255.37 70.3 % 179.44 265.08 15.2 % 12.3 %
Northern Virginia 2 2 278.06 72.9 % 202.77 308.70 268.51 68.6 % 184.16 284.99 10.1 % 8.3 %
Chicago 3 3 265.10 73.6 % 195.20 277.13 252.43 72.0 % 181.64 258.88 7.5 % 7.0 %
Seattle 2 2 254.48 71.5 % 181.97 245.44 251.35 71.8 % 180.44 240.72 0.8 % 2.0 %
Orlando 1 2 278.29 66.6 % 185.38 457.25 398.78 65.9 % 262.80 556.99 (29.5 %) (17.9 %)
Austin 2 2 248.25 65.0 % 161.32 305.06 238.80 52.4 % 125.10 231.79 29.0 % 31.6 %
Atlanta 2 2 226.09 69.6 % 157.25 266.08 214.99 68.2 % 146.72 244.64 7.2 % 8.8 %
Houston 4 5 217.43 69.2 % 150.39 207.30 221.02 65.5 % 144.79 203.16 3.9 % 2.0 %
San Antonio 2 2 228.68 64.3 % 147.10 233.54 223.44 61.8 % 138.18 219.96 6.5 % 6.2 %
Denver 3 3 206.28 66.6 % 137.37 207.97 203.98 67.2 % 137.17 207.38 0.1 % 0.3 %
New Orleans 1 1 188.90 61.9 % 116.98 199.75 205.67 65.4 % 134.43 215.07 (13.0 %) (7.1 %)
Other 7 9 298.50 68.5 % 204.55 307.86 332.51 67.6 % 224.74 345.59 (9.0 %) (10.9 %)
Domestic 70 74 336.86 72.4 % 243.91 406.33 329.75 70.8 % 233.35 389.38 4.5 % 4.4 %
International 5 5 218.72 67.8 % 148.37 207.04 196.33 67.9 % 133.40 183.36 11.2 % 12.9 %
All Locations 75 79 $ 332.87 72.2 % $ 240.48 $ 399.19 $ 325.30 70.7 % $ 229.89 $ 382.28 4.6 % 4.4 %
___________
(1)Represents the results of the portfolio for the time period of our ownership, including the results of non-comparable properties, dispositions through their date of disposal and acquisitions beginning as of the date of acquisition.
Hotel Business Mix
Our customers fall into three broad categories: transient, group, and contract business, which accounted for approximately 61%, 34%, and 5%, respectively, of our full year 2025 room sales. The information below is derived from business mix results from the 73 comparable hotels owned as of September 30, 2026. For additional detail on our business mix, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K.
For the third quarter and year-to-date 2026, transient revenue increased by 11.5% and 7.9%, respectively, due to a combination of rate increases of 6.4% and 6.6%, respectively, and occupancy improvements, driven by stronger business travel and demand from special events. In addition, group revenue increased by 4.5% and 4.7% for the third quarter and
year-to-date, respectively, due to both rate and occupancy increases, driven by short-term bookings and recently completed renovations and associated renovation disruption in 2025.
The following are the results of our transient, group and contract business:
Quarter ended September 30, 2026 Year-to-date ended September 30, 2026
Transient business
Group business
Contract business
Transient business
Group business
Contract business
Room nights (in thousands) 1,573 924 214 4,337 3,123 633
Percent change in room nights vs. same period in 2025 4.8 % 1.3 % (2.3 %) 1.2 % 1.8 % 2.8 %
Rooms revenues (in millions) $ 528 $ 251 $ 48 $ 1,571 $ 939 $ 143
Percent change in revenues vs. same period in 2025 11.5 % 4.5 % 4.6 % 7.9 % 4.7 % 7.1 %
Liquidity and Capital Resources
Liquidity and Capital Resources of Host Inc. and Host L.P. The liquidity and capital resources of Host Inc. and Host L.P. are derived primarily from the activities of Host L.P., which generates the capital required by our business from hotel operations, the incurrence of debt, the issuance of OP units or the sale of hotels. Host Inc. is a REIT, and its only significant asset is the ownership of general and limited partner interests of Host L.P.; therefore, its financing and investing activities are conducted through Host L.P., except for the issuance of its common and preferred stock. Proceeds from common and preferred stock issuances by Host Inc. are contributed to Host L.P. in exchange for common and preferred OP units. Additionally, funds used by Host Inc. to pay dividends or to repurchase its stock are provided by Host L.P. Therefore, while we have noted those areas in which it is important to distinguish between Host Inc. and Host L.P., we have not included a separate discussion of liquidity and capital resources as the discussion below applies to both Host Inc. and Host L.P.
Overview. We look to maintain a capital structure and liquidity profile with an appropriate balance of cash, debt, and equity to provide financial flexibility given the inherent volatility of the lodging industry. We believe this strategy has resulted in a better cost of debt capital, allowing us to complete opportunistic investments and acquisitions and positioning us to manage potential declines in operations throughout the lodging cycle. We have structured our debt profile to maintain a balanced maturity schedule and to minimize the number of assets that are encumbered by mortgage debt. Currently, only one of our consolidated hotels is encumbered by mortgage debt. We intend to use available cash in the near term predominantly to fund, and believe we have sufficient liquidity to fund, corporate expenses, capital expenditures, hotel acquisitions and dividends and remain well positioned to execute additional investment transactions to the extent opportunities arise.
Cash Requirements. We use cash for acquisitions, capital expenditures, debt payments, operating costs, and corporate and other expenses, as well as for dividends and distributions to stockholders and to OP unitholders, respectively, and stock and OP unit repurchases. Our primary sources of cash include cash from operations, proceeds from the sale of assets, borrowing under our credit facility and debt and equity issuances. We have no significant debt maturities until 2028.
As a REIT, Host Inc. is required to pay dividends to its stockholders in an amount equal to at least 90% of its taxable income, excluding net capital gain, on an annual basis. Host Inc.'s policy on common dividends generally is to distribute, over time, at least 100% of its taxable income, including capital gains. Following the February 2026 sale of the Four Seasons Resort Orlando at Walt Disney World® Resort and the Four Seasons Resort and Residences Jackson Hole for a sale price of $1.1 billion, Host Inc.'s Board of Directors approved a $0.72 special dividend in the second quarter that was paid on July 15, 2026, representing the distribution of the approximately $500 million taxable gain resulting from the sale. With the majority of the remaining proceeds, we repurchased $75 million of Host Inc. common stock in the first quarter of 2026 and invested approximately $375 million to complete the acquisitions of two properties, the Renaissance Dallas at Plano Legacy West Hotel and the 1 Hotel Brooklyn Bridge, subsequent to the end of the third quarter.
Capital Resources. As of September 30, 2026, we had $1,492 million of cash and cash equivalents, $157 million in our FF&E escrow reserves and $1.5 billion available under the revolver portion of our credit facility. The acquisitions
subsequent to quarter end and payment of the third quarter dividend reduced our cash balance by approximately $500 million. We depend primarily on external sources of capital to finance future growth, including acquisitions. As a result, the liquidity and debt capacity provided by our credit facility and the ability to issue senior unsecured debt are key components of our capital structure. Our financial flexibility, including our ability to incur debt, pay dividends, make distributions and make investments, is contingent on our ability to maintain compliance with the financial covenants of our credit facility and senior notes indentures, which include, among other things, the allowable amounts of leverage, interest coverage and fixed charges.
Two programs are currently in place relating to potential purchases or sales of our common stock. Under our common stock repurchase program, common stock may be purchased from time to time depending upon market conditions and may be purchased in the open market or through private transactions or by other means, including principal transactions with various financial institutions, like accelerated share repurchases, forwards, options, and similar transactions and through one or more trading plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The plan does not obligate us to repurchase any specific number or any specific dollar amount of shares and may be suspended at any time at our discretion. No shares were repurchased during the third quarter of 2026. At September 30, 2026, we had $405 million available for repurchases under our program.
In addition, in May 2026, we amended and extended the existing distribution agreement with J.P. Morgan Securities LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC, Jefferies LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents, pursuant to which Host Inc. may offer and sell, from time to time, shares of Host Inc. common stock having an aggregate offering price of up to $600 million. The agreement will expire when the sale of shares reaches the aggregate offering price or earlier upon termination by the parties giving notice. The sales will be made in transactions that are deemed to be "at the market" offerings under the SEC rules. We may sell shares of Host Inc. common stock under this program from time to time based on market conditions, although we are not under an obligation to sell any shares. We may sell shares when we believe conditions are advantageous and there is a compelling use of proceeds, including to fund future potential acquisitions or other investment opportunities. The agreement also contemplates that, in addition to the offering and sale of shares to or through the sales agents, we may enter into separate forward sale agreements with each of the forward purchasers named in the agreement. No shares were issued during the third quarter of 2026. As of September 30, 2026, there was $600 million of remaining capacity under the agreement.
Given the total amount of our debt and our maturity schedule, we may continue to redeem or repurchase senior notes from time to time, taking advantage of favorable market conditions. In February 2026, Host Inc.'s Board of Directors authorized repurchases of up to $1.0 billion of senior notes other than in accordance with their respective terms, of which the entire amount remains available under this authority. We may purchase senior notes with cash through open market purchases, privately negotiated transactions, a tender offer, or, in some cases, through the early redemption of such securities pursuant to their terms. Repurchases of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. Any retirement before the maturity date will affect earnings and NAREIT FFO per diluted share as a result of the payment of any applicable call premiums and the accelerated expensing of previously deferred and capitalized financing costs. Accordingly, considering our priorities in managing our capital structure and liquidity profile, and given prevailing conditions and relative pricing in the capital markets, we may, at any time, subject to applicable securities laws and the requirements of our credit facility and senior notes indentures, be considering, or be in discussions with respect to, the repurchase or issuance of exchangeable debentures and/or senior notes or the repurchase or sale of our common stock. Any such transactions may, subject to applicable securities laws, occur simultaneously.
We continue to explore potential acquisitions and dispositions. We anticipate that any such future acquisitions will be funded by cash, debt issuances by Host L.P., equity offerings of Host Inc., issuances of OP units by Host L.P., or proceeds from sales of hotels. Given the nature of these transactions, we can make no assurances that we will be successful in acquiring any one or more hotels that we may review, bid on or negotiate to purchase or that we will be successful in disposing of any one or more of our hotels. We may acquire additional hotels or dispose of hotels through various structures, including transactions involving single assets, portfolios, joint ventures, acquisitions of the securities or assets of other REITs or distributions of hotels to our stockholders.
Sources and Uses of Cash. Our sources of cash generally include cash from operations, proceeds from debt and equity issuances, and proceeds from hotel sales. Uses of cash include acquisitions, capital expenditures, operating costs, investments in our joint ventures, debt repayments, and repurchases of shares and distributions to equity holders.
Cash Provided by Operating Activities. Year-to-date in 2026, net cash provided by operating activities was $1,190 million compared to $967 million for year-to-date in 2025. The increase was attributable to improved operating performance at our properties and sales of condominium units.
Cash Provided by (Used in) Investing Activities. Net cash provided by investing activities was $642 million for year-to-date in 2026 compared to cash used in investing activities of $300 million for year-to-date in 2025. Cash used in investing activities year-to-date in 2026 and 2025 included $392 million and $454 million of capital expenditures, respectively, as well as investments in our joint ventures. Cash provided by investing activities in 2026 included proceeds from the sale of four hotels, compared to the sale of two hotels over the same period in 2025.
The following table summarizes significant acquisitions that have been completed through November 4, 2026 (in millions):
Transaction Date Description of Transaction Investment
Acquisitions
October 2026 Acquisition of 1 Hotel Brooklyn Bridge⁽¹⁾ (202)
October 2026 Acquisition of Renaissance Dallas at Plano Legacy West Hotel (172)
Total acquisitions $ (374)
___________
(1)Investment is net of $4 million for the FF&E reserve funded by the seller.
The following table summarizes significant dispositions that have been completed through November 4, 2026 (in millions):
Transaction Date Description of Transaction Net Proceeds⁽¹⁾ Sales Price
Dispositions/Return of Investments in Affiliates
June 2026 Disposition of Sheraton Parsippany Hotel $ 8 $ 12
February 2026 Disposition of Four Seasons Resort and Residences Jackson Hole & Four Seasons Resort Orlando at Walt Disney World® Resort⁽²⁾ 1,029 1,100
January 2026 Disposition of The St. Regis Houston 51 51
Total dispositions $ 1,088 $ 1,163
___________
(1)Proceeds are net of transfer taxes, other sales costs, and FF&E replacement funds deposited directly to the property or hotel manager by the purchaser.
(2)The net proceeds of $1,029 million related to the sale of the two Four Seasons properties is estimated, as proration amounts have not been finalized. The unaudited condensed consolidated statements of cash flows reflect $1,023 million of the estimated net proceeds received through the third quarter of 2026.
Cash Used in Financing Activities. Year-to-date in 2026, net cash used in financing activities was $1,116 million compared to $723 million for year-to-date in 2025. Cash used in financing activities in both 2026 and 2025 primarily related to the payment of common stock dividends and common stock repurchases.
The following table summarizes significant equity transactions that have been completed through November 4, 2026 (in millions):
Transaction Date Description of Transaction Transaction Amount
Equity of Host Inc.
January - November 2026 Dividend payments⁽¹⁾⁽²⁾ $ (1,144)
January - March 2026 Repurchase of 4.0 million shares of Host Inc. common stock (75)
Cash payments on equity transactions $ (1,219)
___________
(1)In connection with the dividend payments, Host L.P. made distributions of $1,160 million to its common OP unitholders.
(2)Includes the fourth quarter 2025 dividend that was paid in January 2026.
Debt
As of September 30, 2026, our total debt was $5.1 billion, with a weighted average interest rate of 4.8% and a weighted average maturity of 4.4 years. Following the amendment and restatement of our credit facility, discussed below, the weighted average maturity increased to 5.2 years. Additionally, 80% of our debt has a fixed rate of interest, and only one of our consolidated hotels is encumbered by mortgage debt.
On October 21, 2026, Host L.P. entered into an amendment and restatement (the "Restatement") of its existing senior unsecured bank credit facility, dated as of January 4, 2023 with Bank of America, N.A., as administrative agent and certain other agents and lenders (the "Existing Credit Agreement"), for the purpose of replacing and refinancing (1) its existing $1.5 billion revolving credit facility tranche that was scheduled to mature in January 2027 (without taking into account the available extension option) with a new revolving credit facility tranche in the same committed amount (the "Revolver"), (2) its existing $500 million term loan facility tranche that was scheduled to mature in January 2027 (without taking into account the extension option) with a new term loan facility tranche in the same principal amount and (3) its existing $500 million term loan facility tranche that was scheduled to mature in January 2028 with a new term loan facility tranche in the same principal amount (collectively, the "New Term Facilities"). The Restatement provides, among other things, for:
•an interest rate on all U.S. Dollar borrowings based on SOFR or a base rate plus, in each case, a margin that, subject to the adjustments described below, varies according to Host L.P.'s unsecured long-term debt rating, with such margin being (1) in the case of Revolver borrowings, a margin ranging from 65 to 135 basis points for SOFR borrowings and from zero to 35 basis points for base rate borrowings and (2) in the case of the New Term Facilities borrowings, a margin ranging from 70 to 155 basis points for SOFR borrowings or a margin ranging from zero to 55 basis points for base rate borrowings;
•in the case of the Revolver, a facility fee payable on the total amount of the Revolver commitment at a rate that, subject to the adjustments described below, varies according to Host L.P.'s unsecured long-term debt rating, with such fee ranging from 10 to 30 basis points;
•a new leverage-based pricing adjustment feature applicable any time that Host L.P.'s leverage ratio is not more than 4.0x, in which case the otherwise applicable margin and the facility fee rates are reduced to the rates that would apply if Host L.P.'s unsecured long-term debt rating were one notch higher than the actual rating then in effect;
•continuation of the sustainability pricing adjustment feature under the Existing Credit Agreement that (i) in the case of the Revolver, may result in an increase or decrease of the interest rate applicable to revolving loans of up to 4 basis points and an increase or decrease of the facility fee of up to 1 basis point and (ii) in the case of the New Term Facilities, may result in an increase or decrease of the interest rate applicable to term loans of up to 5 basis points, in each case, with the amount of such adjustment determined annually on the basis of an annual audited report of Host L.P.'s performance against established targets for (1) the percentage of our consolidated portfolio with green building certifications and (2) the percentage of electricity used at all our consolidated properties that is generated by renewable resources;
•a maturity date of (1) in the case of the Revolver, January 15, 2031, which date may be extended by up to a year by the exercise of either a 1-year extension option or up to two 6-month extension options, in each case, subject to certain customary conditions including the payment of an extension fee, (2) in the case of the first term loan tranche, January 15, 2031, which date may be extended by up to a year by the exercise of a 1-year extension option, which is subject to certain customary conditions including the payment of an extension fee and (3) in the case of the second term loan tranche, January 15, 2032, which date may not be extended;
•a foreign currency subfacility for Canadian Dollars, Australian Dollars, Euros, British Pounds Sterling and, if available to the lenders, Mexican Pesos of up to the foreign currency equivalent of $500 million, subject to a lower amount in the case of Mexican Pesos borrowings;
•an option for Host L.P. to add in the future up to $1.25 billion of commitments, which may be used for additional revolving credit facility borrowings and/or term loans, subject to obtaining additional loan commitments and the satisfaction of certain conditions specified in the Restatement;
•a subfacility of up to $100 million for swingline borrowings and a subfacility of up to $100 million for issuances of letters of credit;
•no required scheduled amortization payments prior to the maturity date of the Revolver or either of the New Term Facilities; and
•financial covenants that are substantially the same as under the Existing Credit Agreement, including that, as of the end of each fiscal quarter, (i) our fixed charge coverage ratio may not be less than 1.25x, (ii) our leverage ratio may not exceed 7.25x and (iii) our unsecured interest coverage ratio may not be less than 1.75x if our leverage ratio is less than 7.0x or 1.5x if our leverage ratio is equal to or greater than 7.0x.
Borrowings under the Restatement may be used for working capital and other general corporate purposes, including for the consummation of acquisitions. As of October 21, 2026, Host L.P. had no amounts outstanding under the Revolver other than existing letters of credit and $500 million outstanding under each of the New Term Facilities.
With the exception of the removal of certain debt and lien covenants that were applicable under the Existing Credit Agreement, the Restatement imposes restrictions on customary matters that were generally also restricted in the Existing Credit Agreement. The Restatement also includes financial covenant tests applicable to the incurrence of debt that are generally consistent with the limitations applicable under the senior notes indentures for our investment grade senior notes. The Restatement includes usual and customary events of default for facilities of this nature, and provides that, upon occurrence and continuation of an event of default, payment of all amounts payable under the credit facilities may be accelerated, and the lenders' commitments may be terminated. In addition, upon the occurrence of certain insolvency or bankruptcy related events of default, all amounts payable under the credit facilities will automatically become due and payable and the lenders' commitments will automatically terminate.
Financial Covenants
Credit Facility Covenants. Our credit facility contains certain important financial covenants concerning allowable leverage, unsecured interest coverage, and required fixed charge coverage. Total debt used in the calculation of our ratio of consolidated total debt to consolidated EBITDA (our "Leverage Ratio") is based on a "net debt" concept, pursuant to which cash and cash equivalents in excess of $35 million, under the terms of the Restatement, are deducted from our total debt balance for purposes of measuring compliance.
At September 30, 2026, we were in compliance with all of our financial covenants under the credit facility. The following table summarizes the results of the financial tests required by the credit facility, which are calculated on a trailing twelve-month basis:
Actual Ratio Covenant Requirement
for all years
Leverage ratio 2.0x Maximum ratio of 7.25x
Fixed charge coverage ratio 5.8x Minimum ratio of 1.25x
Unsecured interest coverage ratio ⁽¹⁾ 7.6x Minimum ratio of 1.75x
___________
(1)If, at any time, our leverage ratio is above 7.0x, our minimum unsecured interest coverage ratio will decrease to 1.50x.
Senior Notes Indenture Covenants
The following table summarizes the results of the financial tests required by the indentures for our senior notes and our actual credit ratios as of September 30, 2026:
Actual Ratio Covenant Requirement
Unencumbered assets tests 446 % Minimum ratio of 150%
Total indebtedness to total assets 22 % Maximum ratio of 65%
Secured indebtedness to total assets <1% Maximum ratio of 40%
EBITDA-to-interest coverage ratio 7.5x Minimum ratio of 1.5x
For additional details on our credit facility and senior notes, see our Annual Report on Form 10-K for the year ended December 31, 2025.
Dividend Policy
Host Inc. is required to distribute at least 90% of its annual taxable income, excluding net capital gains, to its stockholders in order to maintain its qualification as a REIT. Funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P. As of September 30, 2026, Host Inc. is the owner of approximately 99% of the Host L.P. common OP units. The remaining common OP units are owned by unaffiliated limited partners. Each Host L.P. common OP unit may be redeemed for cash or, at the election of Host Inc., Host Inc. common stock based on the conversion ratio. The current conversion ratio is 1.021494 shares of Host Inc. common stock for each Host L.P. common OP unit.
Investors should consider the non-controlling interests in the Host L.P. common OP units when analyzing dividend payments by Host Inc. to its stockholders, as these Host L.P. common OP unitholders share, on a pro rata basis, in amounts being distributed by Host L.P. to all of its common OP unitholders. For example, if Host Inc. paid a $1 per share dividend on its common stock, it would be based on the payment of a $1.021494 per common OP unit distribution by Host L.P. to Host Inc., as well as to the other unaffiliated Host L.P. common OP unitholders.
Host Inc.'s policy on common dividends generally is to distribute, over time, 100% of its taxable income, which primarily is dependent on Host Inc.'s results of operations, as well as tax gains and losses on hotel sales. On September 15, 2026, Host Inc.'s Board of Directors announced a regular quarterly cash dividend of $0.20 per share on Host Inc.'s common stock. The dividend was paid on October 15, 2026 to stockholders of record on September 30, 2026. All future dividends are subject to Board approval.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe that the reported amounts would be materially different, application of these policies involves the exercise of
judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that we believe are reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Comparable Hotel Operating Statistics and Results
To facilitate a year-to-year comparison of our operations, we present certain operating statistics (i.e., Total RevPAR, RevPAR, average daily rate and average occupancy) and operating results (revenues, expenses, hotel EBITDA and associated margins) for the periods included in our reports on a comparable hotel basis in order to enable our investors to better evaluate our operating performance. We define our comparable hotels as those that: (i) are owned or leased by us as of the reporting date and are not classified as held-for-sale; and (ii) have not sustained substantial property damage or business interruption, or undergone large-scale capital projects, in each case requiring closures lasting one month or longer (as further defined below), during the reporting periods being compared.
We make adjustments to include recent acquisitions to include results for periods prior to our ownership. For these hotels, since the year-over-year comparison includes periods prior to our ownership, the changes will not necessarily correspond to changes in our actual results. Additionally, operating results of hotels that we sell are excluded from the comparable hotel set once the transaction has closed or the hotel is classified as held-for-sale.
The hotel business is capital-intensive, and renovations are a regular part of the business. Generally, hotels under renovation remain comparable hotels. A large-scale capital project would cause a hotel to be excluded from our comparable hotel set if it requires the entire property to be closed to hotel guests for one month or longer.
Similarly, hotels are excluded from our comparable hotel set from the date that they sustain substantial property damage or business interruption if it requires the property to be closed to hotel guests for one month or longer. In each case, these hotels are returned to the comparable hotel set when the operations of the hotel have been included in our consolidated results for one full calendar year after the hotel has reopened. Often, related to events that cause property damage and the closure of a hotel, we will collect business interruption insurance proceeds for the near-term loss of business. These proceeds are included in net gain on insurance settlements on our condensed consolidated statements of operations. Business interruption insurance gains covering lost revenues while the property was considered non-comparable also will be excluded from the comparable hotel results.
Of the 75 hotels that we owned as of September 30, 2026, 73 have been classified as comparable hotels. The operating results of the following properties that we owned as of September 30, 2026 are excluded from comparable hotel results for these periods:
•The Don CeSar (business disruption due to Hurricane Helene resulting in closure of the hotel beginning at the end of September 2024, reopened in March 2025);
•Alila Ventana Big Sur (business disruption due to local evacuation mandates and regional wildfire activity resulting in closure of the hotel beginning in August 2026, reopened in September 2026); and
•Operations related to the development and sale of condominium units on a development parcel adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort.
Comparable hotel metrics do not yet include the results of 1 Hotel Brooklyn Bridge and Renaissance Dallas at Plano Legacy West Hotel, which were acquired in October 2026. We expect to include the comparable hotel results for these two hotels beginning in the fourth quarter.
Foreign Currency Translation
Operating results denominated in foreign currencies are translated using the prevailing exchange rates on the date of the transaction, or monthly based on the weighted average exchange rate for the period. Therefore, hotel statistics and results for non-U.S. properties include the effect of currency fluctuations, consistent with our financial statement presentation.
Non-GAAP Financial Measures
We use certain "non-GAAP financial measures," which are measures of our historical financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. These measures include the following:
•Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization ("EBITDA"), Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization for real estate ("EBITDAre") and Adjusted EBITDAre, as a measure of performance for Host Inc. and Host L.P.,
•Funds From Operations ("FFO") and FFO per diluted share, both calculated in accordance with National Association of Real Estate Investment Trusts ("NAREIT") guidelines and with certain adjustments from those guidelines, as a measure of performance for Host Inc., and
•Comparable hotel operating results, as a measure of performance for Host Inc. and Host L.P.
The discussion below defines these measures and presents why we believe they are useful supplemental measures of our performance.
Set forth below for each such non-GAAP financial measure is a reconciliation of the measure with the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable thereto. We also have included in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" in our Annual Report on Form 10-K for the year ended December 31, 2025 further explanations of the adjustments being made, a statement disclosing the reasons why we believe the presentation of each of the non-GAAP financial measures provides useful information to investors regarding our financial condition and results of operations, the additional purposes for which we use the non-GAAP financial measures and limitations on their use.
EBITDA, EBITDAre and Adjusted EBITDAre
EBITDA
EBITDA is a commonly used measure of performance in many industries. Management believes EBITDA provides useful information to investors regarding our results of operations because it helps us and our investors evaluate the ongoing operating performance of our properties after removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). Management also believes the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners that are not REITs and other capital-intensive companies. Management uses EBITDA to evaluate property-level results and as one measure in determining the value of acquisitions and dispositions and, like FFO and Adjusted FFO per diluted share, it is widely used by management in the annual budget process and for compensation programs.
EBITDAre and Adjusted EBITDAre
We present EBITDAre in accordance with NAREIT guidelines, as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate," to provide an additional performance measure to facilitate the evaluation and comparison of our results with other REITs. NAREIT defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment expense for depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's pro rata share of EBITDAre of unconsolidated affiliates.
We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is beneficial to an investor's understanding of our operating performance. Adjusted EBITDAre also is similar to the measure used to calculate certain credit ratios for our credit facility and senior notes. We
adjust EBITDAre for the following items, which may occur in any period, and refer to this measure as Adjusted EBITDAre:
•Property Insurance Gains and Property Damage Losses - We exclude the effect of property insurance gains reflected in our condensed consolidated statements of operations because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets. In addition, property insurance gains could be less important to investors given that the depreciated asset book value written off in connection with the calculation of the property insurance gain often does not reflect the market value of real estate assets. Similarly, losses from property damage or remediation costs that are not covered through insurance are excluded.
•Acquisition Costs - Under GAAP, costs associated with completed property acquisitions that are considered business combinations are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.
•Litigation Gains and Losses - We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider to be outside the ordinary course of business. We believe that including these items is not consistent with our ongoing operating performance.
•Severance Expense - In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties. Situations that would result in a severance add back include, but are not limited to: (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce. We do not add back corporate-level severance costs or severance costs at an individual hotel that we consider to be incurred in the normal course of business.
•Non-Cash Stock-Based Compensation - We exclude the expense recorded for non-cash stock-based compensation, as it represents a non-cash transaction and the add back is consistent with the calculation of Adjusted EBITDA for our financial covenant ratios under our credit facility and senior notes indentures and consistent with the presentation of Adjusted EBITDAre for the majority of other lodging REIT filers.
In unusual circumstances, we also may adjust EBITDAre for gains or losses that management believes are not representative of the Company's current operating performance. The last adjustment of this nature was a 2013 exclusion of a gain from an eminent domain claim.
The following table provides a reconciliation of EBITDA, EBITDAre, and Adjusted EBITDAre to net income, the financial measure calculated and presented in accordance with GAAP that we consider the most directly comparable:
Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre for Host Inc. and Host L.P.
(in millions)
Quarter ended September 30, Year-to-date ended September 30,
2026 2025 2026 2025
Net income⁽¹⁾ $ 71 $ 163 $ 813 $ 639
Interest expense 59 60 176 175
Depreciation and amortization 187 196 566 587
Income taxes 7 9 42 35
EBITDA⁽¹⁾ 324 428 1,597 1,436
(Gain) loss on dispositions⁽²⁾ 6 (122) (235) (143)
Non-cash impairment expense - - 4 -
Equity investment adjustments:
Equity in earnings of affiliates (5) (2) (16) (16)
Pro rata EBITDAre of equity investments⁽³⁾ 15 10 46 36
EBITDAre⁽¹⁾ 340 314 1,396 1,313
Adjustments to EBITDAre:
Non-cash stock-based compensation expense 7 5 19 16
Adjusted EBITDAre⁽¹⁾ $ 347 $ 319 $ 1,415 $ 1,329
___________
(1)Net income, EBITDA, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO for the year-to-date ended September 30, 2025 include a gain of $4 million from the sale of land adjacent to The Phoenician hotel.
(2)Reflects the sale of four hotels in 2026 and two hotels in 2025, and the sale of the Asia/Pacific joint venture's interest in two separate joint ventures in India in 2025.
(3)Unrealized gains of our unconsolidated investments are not recognized in our EBITDAre, Adjusted EBITDAre, NAREIT FFO or Adjusted FFO until they have been realized by the unconsolidated partnership.
FFO Measures
We present NAREIT FFO and NAREIT FFO per diluted share as non-GAAP measures of our performance in addition to our earnings per share (calculated in accordance with GAAP). We calculate NAREIT FFO per diluted share as our NAREIT FFO (defined as set forth below) for a given operating period, as adjusted for the effect of dilutive securities, divided by the number of fully diluted shares outstanding during such period, in accordance with NAREIT guidelines. As noted in NAREIT's Funds From Operations White Paper - 2018 Restatement, NAREIT defines FFO as net income (calculated in accordance with GAAP) excluding depreciation and amortization related to certain real estate assets, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment expense of certain real estate assets and investments and adjustments for consolidated partially owned entities and unconsolidated affiliates. Adjustments for consolidated partially owned entities and unconsolidated affiliates are calculated to reflect our pro rata share of the FFO of those entities on the same basis.
We also present Adjusted FFO per diluted share when evaluating our performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance, in our annual budget process and for our compensation programs. We believe that the presentation of Adjusted FFO per diluted share, when combined with both the primary GAAP presentation of diluted earnings per share and FFO per diluted share as defined by NAREIT, provides useful supplemental information that is beneficial to an investor's understanding of our operating performance. We adjust NAREIT FFO per diluted share for the following items, which may occur in any period, and refer to this measure as Adjusted FFO per diluted share:
•Gains and Losses on the Extinguishment of Debt - We exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of the write-off of deferred financing costs from the original issuance of the debt being redeemed or retired and incremental interest expense incurred during the refinancing period. We also exclude the gains on debt repurchases
and the original issuance costs associated with the retirement of preferred stock. We believe that these items are not reflective of our ongoing finance costs.
•Acquisition Costs - Under GAAP, costs associated with completed property acquisitions that are considered business combinations are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.
•Litigation Gains and Losses - We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider to be outside the ordinary course of business. We believe that including these items is not consistent with our ongoing operating performance.
•Severance Expense - In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties. Situations that would result in a severance add back include, but are not limited to, (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce. We do not add back corporate-level severance costs or severance costs at an individual hotel that we consider to be incurred in the normal course of business.
•Non-Cash Stock-Based Compensation - We exclude the expense recorded for non-cash stock-based compensation, as it represents a non-cash transaction and the add back is consistent with the calculation of Adjusted EBITDA for our financial covenant ratios under our credit facility and senior notes indentures and consistent with the presentation of Adjusted FFO per diluted share for the majority of other lodging REIT filers.
In unusual circumstances, we also may adjust NAREIT FFO for gains or losses that management believes are not representative of our current operating performance. For example, in 2017, as a result of the reduction of the U.S. federal corporate income tax rate from 35% to 21% by the Tax Cuts and Jobs Act, we remeasured our domestic deferred tax assets as of December 31, 2017 and recorded a one-time adjustment to reduce our deferred tax assets and to increase the provision for income taxes by approximately $11 million. We do not consider this adjustment to be reflective of our ongoing operating performance and, therefore, we excluded this item from Adjusted FFO.
The following table provides a reconciliation of the differences between our non-GAAP financial measures, NAREIT FFO and Adjusted FFO (separately and on a per diluted share basis), and net income, the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable:
Host Inc. Reconciliation of Diluted Earnings per Common Share to
NAREIT and Adjusted Funds From Operations per Diluted Share
(in millions, except per share amount)
Quarter ended September 30, Year-to-date ended September 30,
2026 2025 2026 2025
Net income⁽¹⁾ $ 71 $ 163 $ 813 $ 639
Less: Net income attributable to non-controlling interests (1) (2) (12) (9)
Net income attributable to Host Inc. 70 161 801 630
Adjustments:
(Gain) loss on dispositions⁽²⁾ 6 (122) (235) (143)
Tax on dispositions - - 5 -
Depreciation and amortization 187 196 565 586
Non-cash impairment expense - - 4 -
Equity investment adjustments:
Equity in earnings of affiliates (5) (2) (16) (16)
Pro rata FFO of equity investments⁽³⁾ 6 4 25 20
Consolidated partnership adjustments:
FFO adjustment for non-controlling partnerships - (1) - (1)
FFO adjustment for non-controlling interests of Host L.P. (3) (1) (5) (6)
NAREIT FFO⁽¹⁾ 261 235 1,144 1,070
Adjustments to NAREIT FFO:
Non-cash stock-based compensation expense 7 5 19 16
Adjusted FFO⁽¹⁾ $ 268 $ 240 $ 1,163 $ 1,086
For calculation on a per share basis:(4)
Diluted weighted average shares outstanding - EPS, NAREIT FFO and Adjusted FFO 687.3 689.5 688.0 694.5
Diluted earnings per common share $ 0.10 $ 0.23 $ 1.16 $ 0.91
NAREIT FFO per diluted share $ 0.38 $ 0.34 $ 1.66 $ 1.54
Adjusted FFO per diluted share $ 0.39 $ 0.35 $ 1.69 $ 1.56
___________
(1-3)Refer to the corresponding footnote on the Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre for Host Inc. and Host L.P.
(4)Diluted earnings per common share, NAREIT FFO per diluted share 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 limited partners and other non-controlling interests that have the option to convert their limited partner interests to common OP units. No effect is shown for securities if they are anti-dilutive.
Comparable Hotel Property-Level Operating Results
We present certain operating results for our hotels, such as hotel revenues, expenses, food and beverage profit, and EBITDA (and the related margins), on a comparable hotel, or "same store," basis as supplemental information for our investors. Our comparable hotel results present operating results for our hotels without giving effect to dispositions or properties that experienced closures due to renovations or property damage, as discussed in "Comparable Hotel Operating Statistics and Results" above. We present comparable hotel EBITDA to help us and our investors evaluate the ongoing operating performance of our comparable hotels after removing the impact of our capital structure (primarily interest
expense) and our asset base (primarily depreciation and amortization expense). Corporate-level costs and expenses also are removed to arrive at property-level results. We believe these property-level results provide investors with supplemental information about the ongoing operating performance of our comparable hotels. Comparable hotel results are presented both by location and for our properties in the aggregate. We eliminate from our comparable hotel level operating results severance costs related to broad-based and significant property-level reconfiguration that is not considered to be within the normal course of business, as we believe this elimination provides useful supplemental information that is beneficial to an investor's understanding of our ongoing operating performance. We also eliminate depreciation and amortization expense because, even though depreciation and amortization expense are property-level expenses, these non-cash expenses, which are based on historical cost accounting for real estate assets, implicitly assume that the value of real estate assets diminishes predictably over time. As noted earlier, because real estate values historically have risen or fallen with market conditions, many real estate industry investors have considered presentation of historical cost accounting for operating results to be insufficient.
Because of the elimination of corporate-level costs and expenses, gains or losses on disposition, certain severance expenses and depreciation and amortization expense, the comparable hotel operating results we present do not represent our total revenues, expenses, operating profit or net income and should not be used to evaluate our performance as a whole. Management compensates for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our condensed consolidated statements of operations include such amounts, all of which should be considered by investors when evaluating our performance.
We present these hotel operating results on a comparable hotel basis because we believe that doing so provides investors and management with useful information for evaluating the period-to-period performance of our hotels and facilitates comparisons with other hotel REITs and hotel owners. In particular, these measures assist management and investors in distinguishing whether increases or decreases in revenues and/or expenses are due to growth or decline of operations at comparable hotels (which represent the vast majority of our portfolio) or from other factors. While management believes that presentation of comparable hotel results is a supplemental measure that provides useful information in evaluating our ongoing performance, this measure is not used to allocate resources or to assess the operating performance of each of our hotels, as these decisions are based on data for individual hotels and are not based on comparable hotel results in the aggregate. For these reasons, we believe comparable hotel operating results, when combined with the presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management.
The following tables present certain operating results and statistics for our hotels for the periods presented herein and a reconciliation of the differences between comparable Hotel EBITDA, a non-GAAP financial measure, and net income, the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable. Similar reconciliations of the differences between (i) hotel revenues and (ii) our revenues as calculated and presented in accordance with GAAP (each of which is used in the applicable margin calculation), and between (iii) hotel expenses and (iv) operating costs and expenses as calculated and presented in accordance with GAAP, also are included in the reconciliation:
Comparable Hotel Results for Host Inc. and Host L.P.
(in millions, except hotel statistics)
Quarter ended September 30, Year-to-date ended September 30,
2026 2025 2026 2025
Number of hotels 73 73 73 73
Number of rooms 40,920 40,920 40,920 40,920
Change in comparable hotel Total RevPAR 7.3 % - 5.8 % -
Change in comparable hotel RevPAR 8.8 % - 6.6 % -
Operating profit margin⁽¹⁾ 9.0 % 7.6 % 15.8 % 14.7 %
Comparable hotel EBITDA margin⁽¹⁾ 25.2 % 24.3 % 30.2 % 29.5 %
Food and beverage profit margin⁽¹⁾ 25.6 % 23.6 % 33.4 % 32.0 %
Comparable hotel food and beverage profit margin⁽¹⁾ 25.9 % 24.9 % 33.7 % 33.0 %
Net income $ 71 $ 163 $ 813 $ 639
Depreciation and amortization 187 196 570 587
Interest expense 59 60 176 175
Provision for income taxes 7 9 42 35
Gain on sale of property and corporate level income/expense 14 (104) (211) (103)
Property transaction adjustments⁽²⁾ - (12) (11) (70)
Non-comparable hotel results, net⁽³⁾ (7) (15) (40) (37)
Condominium sales(4)
- - (12) -
Comparable hotel EBITDA $ 331 $ 297 $ 1,327 $ 1,226
___________
(1)Profit margins are calculated by dividing the applicable operating profit by the related revenue amount. GAAP profit margins are calculated using amounts presented in the unaudited condensed consolidated statements of operations. Comparable hotel margins are calculated using amounts presented in the following tables, which include reconciliations to the applicable GAAP results:
Quarter ended September 30, 2026 Quarter ended September 30, 2025
Adjustments
Adjustments
GAAP Results
Non-comparable hotel
results, net ⁽³⁾
Condominium sales ⁽4⁾
Depreciation and corporate
level items
Comparable hotel Results
GAAP Results
Property transaction
adjustments⁽²⁾ 		Non-comparable hotel
results, net ⁽³⁾ 		Depreciation and corporate
level items
Comparable hotel Results
Revenues
Room $ 841 $ (14) $ - $ - $ 827 $ 826 $ (48) $ (18) $ - $ 760
Food and beverage 367 (8) - - 359 364 (19) (7) - 338
Other 132 (6) - - 126 141 (13) (4) - 124
Condominium sales 7 - (7) - - - - - - -
Total revenues 1,347 (28) (7) - 1,312 1,331 (80) (29) - 1,222
Expenses
Room 225 (3) - - 222 222 (12) (2) - 208
Food and beverage 273 (7) - - 266 278 (17) (7) - 254
Other 505 (11) (1) - 493 512 (39) (10) - 463
Depreciation and amortization 187 - - (187) - 196 - - (196) -
Cost of goods sold 6 - (6) - - - - - - -
Corporate and other expenses 30 - - (30) - 27 - - (27) -
Net gain on insurance settlements - - - - - (5) - 5 - -
Total expenses 1,226 (21) (7) (217) 981 1,230 (68) (14) (223) 925
Operating Profit - Comparable hotel EBITDA $ 121 $ (7) $ - $ 217 $ 331 $ 101 $ (12) $ (15) $ 223 $ 297
Year-to-date ended September 30, 2026 Year-to-date ended September 30, 2025
Adjustments
Adjustments
GAAP Results
Property transaction
adjustments⁽²⁾ 		Non-comparable hotel
results, net ⁽³⁾
Condominium sales (4)
Depreciation and corporate
level items
Comparable hotel Results
GAAP Results
Property transaction
adjustments⁽²⁾ 		Non-comparable hotel
results, net ⁽³⁾ 		Depreciation and corporate
level items
Comparable hotel Results
Revenues
Room $ 2,738 $ (32) $ (53) $ - $ - $ 2,653 $ 2,713 $ (185) $ (41) $ - $ 2,487
Food and beverage 1,368 (16) (30) - - 1,322 1,345 (75) (17) - 1,253
Other 440 (7) (16) - - 417 453 (36) (8) - 409
Condominium sales 86 - - (86) - - - - - - -
Total revenues 4,632 (55) (99) (86) - 4,392 4,511 (296) (66) - 4,149
Expenses
Room 680 (7) (11) - - 662 680 (40) (8) - 632
Food and beverage 911 (12) (22) - - 877 914 (59) (15) - 840
Other 1,587 (25) (33) (3) - 1,526 1,608 (127) (30) - 1,451
Depreciation and amortization 570 - - - (570) - 587 - - (587) -
Cost of goods sold 71 - - (71) - - - - - - -
Corporate and other expenses 87 - - - (87) - 83 - - (83) -
Net gain on insurance settlements (7) - 7 - - - (24) - 24 - -
Total expenses 3,899 (44) (59) (74) (657) 3,065 3,848 (226) (29) (670) 2,923
Operating Profit - Comparable hotel EBITDA $ 733 $ (11) $ (40) $ (12) $ 657 $ 1,327 $ 663 $ (70) $ (37) $ 670 $ 1,226
(2)Property transaction adjustments represent the following items: (i) the elimination of results of operations of hotels sold or held-for-sale as of September 30, 2026, which operations are included in our unaudited condensed consolidated statements of operations as continuing operations, and (ii) the addition of results for periods prior to our ownership for hotels acquired as of September 30, 2026.
(3)Non-comparable hotel results, net, includes the following items: (i) the results of operations of our non-comparable hotels, which operations are included in our unaudited condensed consolidated statements of operations as continuing operations, and (ii) gains on business interruption proceeds covering lost revenues while the property was considered non-comparable.  
(4)Includes revenues and costs, including marketing and administrative expenses of approximately $1 million and $3 million for the quarter and year-to-date ended September 30, 2026, respectively, related to the development and sale of condominium units adjacent to the Four Seasons Resort Orlando at Walt Disney World® Resort.
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