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Host Hotels & Resorts 3rd-quarter FFO improves

Associated Press//October 12, 2011

Host Hotels & Resorts 3rd-quarter FFO improves

By Associated Press

//October 12, 2011

BETHESDA — Host Hotels & Resorts Inc. said Wednesday that its third-quarter funds from operations improved because room rates climbed and occupancy improved.

But the Bethesda-based lodging real estate investment trust lowered its full-year funds from operations forecast because of debt extinguishment costs and other charges.

Host reported that funds from operations, or FFO, climbed to $112 million, or 16 cents per share, for the period ended Sept. 9. That compares with $75 million, or 11 cents per share, a year earlier.

FFO, which adds such items as amortization and depreciation to net income, is considered key to measuring the financial performance of real estate investment trusts.

Analysts surveyed by FactSet expected FFO of 17 cents per share, on average.

Host’s net loss narrowed to $33 million, or 5 cents per share, compared with a loss of $58 million, or 9 cents per share, in the same period last year.

Revenue increased 13.9 percent to $1.14 billion from $1 billion.

Revenue per available room rose 6.4 percent at hotels open at least a year. This figure is a key gauge of a lodging company’s health. The average room rate climbed 3.7 percent, while occupancy improved 1.9 percentage points to 75.8 percent.

For the year, Host now anticipates FFO of 86 cents to 87 cents per share. This includes a reduction of 3 cents per share from debt extinguishment costs, impairment charges and costs tied to acquisitions. The company foresees a loss of about a penny to 3 cents per share.

Analysts predict FFO of 91 cents per share for the year.

Host owns 105 properties in the U.S. and 16 internationally.

Host’s shares gained 48 cents, or 4.2 percent, to close at $11.84.


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