# HOST HOTELS & RESORTS, INC. (HST) FY 2023 MD&A

Verbatim Item 7 Management's Discussion and Analysis from HOST HOTELS & RESORTS, INC.'s 10-K for fiscal year 2023.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1070750/000107075024000081/hst-20231231.htm
Accession: 0001070750-24-000081
Filing date: 2024-02-28
Report date: 2023-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/HST/
All MD&A years: /company/HST/mda/
Previous year: /company/HST/mda/fy2022/ (FY 2022)
Next year: /company/HST/mda/fy2024/ (FY 2024)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report. This discussion focuses on our financial condition and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022. For a discussion and analysis of the year ended December 31, 2022 compared to the same period in 2021, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II Item 7 of our Annual Report on Form 10‑K for the year ended December 31, 2022, filed with the SEC on February 22, 2023.

Overview

Host Inc. operates as a self-managed and self-administered REIT that owns hotels and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of its common OP units as of December 31, 2023. The remainder of Host L.P.’s common OP units are owned by various unaffiliated limited partners. Host Inc. has the exclusive and complete responsibility for Host L.P.’s day-to-day management and control.

Host Inc. is the largest lodging REIT in NAREIT’s composite index and one of the largest owners of luxury and upper upscale hotels. As of February 23, 2024, we own 77 hotels in the United States, Canada and Brazil and have minority ownership interests in an additional 35 hotels through joint ventures in the United States and in India. These hotels are operated primarily under brand names that are among the most respected and widely recognized in the lodging industry. Most of our hotels are located in central business districts of major cities, near airports and in resort/conference destinations.

Our customers fall into three broad groups: transient business, group business and contract business, which accounted for approximately 61%, 35%, and 4%, respectively, of our 2023 room sales. For a discussion of our customer categories, see “Item 1 Business – Our Customers”.

Understanding Our Performance

Our Revenues and Expenses. Our hotels are operated by third-party managers under long-term agreements, pursuant to which they typically earn base and incentive management fees based on the levels of revenues and profitability of each hotel. We provide operating funds, or working capital, which the managers use to purchase inventory and to pay wages, utilities, property taxes and other hotel-level expenses. We generally receive a cash distribution from our hotel managers each month, which distribution reflects hotel-level sales less property-level operating expenses (excluding depreciation).

Operations from our domestic portfolio account for approximately 98% of our total revenues and 2% relate to our five hotels in Canada and Brazil. The following table presents the components of our hotel revenues as a percentage of our total revenue:

[[GREPCENT_TABLE]]
[["","% of 2023Revenues"],["\u2022Rooms revenues. Occupancy and average daily room rate are the major drivers of rooms revenues. The business mix of the hotel (group versus transient and retail versus discount business) is a significant driver of room rates.","61","%"],["\u2022Food and beverage revenues. Food & beverage revenues consist of revenues from group functions, which may include banquet revenues and audio and visual revenues, as well as outlet revenues from the restaurants and lounges at our hotels.","30","%"],["\u2022Other revenues. Occupancy, the nature of the hotel (e.g., resort) and its price point are the main drivers of other ancillary revenues, such as attrition and cancelation fees, resort and destination fees, parking, golf courses, spas, entertainment and other guest services. This category also includes other rental revenues.","9","%"]]
[[/GREPCENT_TABLE]]

37

Table of Contents

Hotel operating expenses represent approximately 99% of our total operating costs and expenses. The following table presents the components of our hotel operating expenses as a percentage of our total operating costs and expenses:

[[GREPCENT_TABLE]]
[["","% of 2023OperatingCosts andExpenses"],["\u2022Rooms expenses. These costs include housekeeping, reservation systems, room supplies, laundry services and front desk costs. Occupancy is the major driver of rooms expenses. These costs can increase based on increases in salaries and wages, as well as on the level of service and amenities that are provided.","18","%"],["\u2022Food and beverage expenses. These expenses primarily include food, beverage and the associated labor costs and will correlate closely with food and beverage revenues. Group functions with banquet sales and audio and visual components generally will have lower overall costs as a percentage of revenues than outlet sales.","23","%"],["\u2022Other departmental and support expenses. These expenses include labor and other costs associated with other ancillary revenues, such as parking, golf courses, spas, entertainment and other guest services, as well as labor and other costs associated with administrative departments, allocated brand costs, sales and marketing, repairs and minor maintenance and utility costs.","29","%"],["\u2022Management fees. Base management fees are computed as a percentage of gross revenues. Incentive management fees generally are paid when operating profits exceed certain thresholds.","5","%"],["\u2022Other property-level expenses. These expenses consist primarily of real and personal property taxes, ground rent, equipment rent and property insurance. Many of these expenses are relatively inflexible and do not necessarily change based on changes in revenues at our hotels.","9","%"],["\u2022Depreciation and amortization expense. This is a non-cash expense that changes primarily based on the acquisition and disposition of hotels and the amounts of historical capital expenditures. This component also can include impairment expense.","15","%"]]
[[/GREPCENT_TABLE]]

The expense components listed above are based on those presented in our consolidated statements of operations. It also is worth noting that wage and benefit costs are spread among various line items. Taken separately, these costs represent approximately 57% of our rooms, food and beverage, and other departmental and support expenses.

Key Performance Indicators. The following key performance indicators commonly are used in the hospitality industry and we believe provide useful information to management and investors in order to compare our performance with the performance of other lodging REITS:

•hotel occupancy is a volume indicator based on the percentage of available room nights that are sold;

•average daily rate (“ADR”) is a price indicator calculated by dividing rooms revenues by the number of rooms sold;

•revenues per available room (“RevPAR”) is used to evaluate hotel operations. RevPAR is defined as the product of the average daily room rate charged and the average daily occupancy achieved. RevPAR does not include food and beverage, parking, or other guest service revenues generated by the hotel. Although RevPAR does not include these ancillary revenues, it is considered a key indicator of core revenues for many hotels; and

•total revenues per available room (“Total RevPAR”) is a summary measure of hotel results calculated by dividing the sum of rooms, food and beverage and other ancillary services revenues by room nights available to guests for the period. It includes ancillary revenues that are not included in the calculation of RevPAR.

38

Table of Contents

RevPAR changes that are driven by occupancy have different implications on overall revenue levels, as well as incremental operating profit, than do changes that are driven by average room rate. For example, increases in occupancy at a hotel will lead to increases in rooms revenues and ancillary revenues, such as food and beverage revenues, as well as additional incremental costs (including housekeeping services, utilities and room amenity costs). RevPAR increases due to higher room rates, however, will not result in additional room-related costs, except those charged as a percentage of revenues. As a result, changes in RevPAR driven by increases or decreases in average room rates have a greater effect on profitability than do changes in RevPAR caused by occupancy levels.

We also evaluate the performance of our business through certain non-GAAP financial measures. Each of these non-GAAP financial measures should be considered by investors as supplemental measures to GAAP performance measures such as total revenues, operating profit, net income and earnings per share. We provide a more detailed discussion of these non-GAAP financial measures, how management uses such measures to evaluate our financial condition and operating performance and a discussion of certain limitations of such measures in “—Non-GAAP Financial Measures.” Our non-GAAP financial measures include:

•NAREIT Funds From Operations (“FFO”) and Adjusted FFO per diluted share. We use NAREIT FFO and Adjusted FFO per diluted share as supplemental measures of company-wide profitability. NAREIT adopted FFO to promote an industry-wide measure of REIT operating performance. We also adjust NAREIT FFO for gains and losses on extinguishment of debt, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business.

•Comparable hotel EBITDA. Hotel EBITDA measures property-level results before debt service, depreciation and corporate-level expenses (as this is a property level measure) and is a supplemental measure of aggregate property-level profitability. We use comparable hotel EBITDA and associated margins to evaluate the profitability of our comparable hotels.

•EBITDA, EBITDAre and Adjusted EBITDAre. Earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”) is a supplemental measure of our operating performance and facilitates comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital-intensive companies. NAREIT adopted EBITDA for real estate (“EBITDAre”) in order to promote an industry-wide measure of REIT operating performance. We also adjust EBITDAre for property insurance gains, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business (“Adjusted EBITDAre”).

Summary of 2023 Operating Results

The following table reflects certain line items from our audited consolidated statements of operations and the significant operating statistics for the two years ended December 31, 2023 (in millions, except per share and hotel statistics):

[[GREPCENT_TABLE]]
[["Historical Income Statement Data:"],["","2023","","2022","","Change"],["Total revenues","$","5,311","","","$","4,907","","","8.2","%"],["Net income","752","","","643","","","17.0","%"],["Operating profit","827","","","775","","","6.7","%"],["Operating profit margin under GAAP","15.6","%","","15.8","%","","(20)","bps"],["EBITDAre \u207d\u00b9\u207e","$","1,632","","","$","1,504","","","8.5","%"],["Adjusted EBITDAre \u207d\u00b9\u207e","1,629","","","1,498","","","8.7","%"],["Diluted earnings per common share","$","1.04","","","$","0.88","","","18.2","%"],["NAREIT FFO per diluted share \u207d\u00b9\u207e","1.92","","","1.79","","","7.3","%"],["Adjusted FFO per diluted share \u207d\u00b9\u207e","1.92","","","1.79","","","7.3","%"]]
[[/GREPCENT_TABLE]]

39

Table of Contents

[[GREPCENT_TABLE]]
[["Comparable Hotel Data:"],["","2023 Comparable Hotels \u207d\u00b9\u207e"],["","2023","","2022","","Change"],["Comparable hotel revenues \u207d\u00b9\u207e","$","5,169","","","$","4,773","","","8.3","%"],["Comparable hotel EBITDA \u207d\u00b9\u207e","1,557","","","1,520","","","2.4","%"],["Comparable hotel EBITDA margin \u207d\u00b9\u207e","30.1","%","","31.8","%","","(170)","bps"],["Comparable hotel Total RevPAR \u207d\u00b9\u207e","$","344.63","","","$","318.25","","","8.3","%"],["Comparable hotel RevPAR \u207d\u00b9\u207e","211.71","","","195.87","","","8.1","%"]]
[[/GREPCENT_TABLE]]

___________

(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 75 comparable hotels as of December 31, 2023 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 $404 million, or 8.2%, compared to 2022, due to increased demand at our convention and downtown properties, partially offset by some moderation at our resort properties. Comparable hotel RevPAR increased 8.1%, compared to 2022, due to a 4.1 percentage point increase in occupancy and a 1.8% increase in average room rate. Comparable hotel Total RevPAR increased 8.3% for the year as the increase in rooms revenues was supplemented with growth in both food and beverage revenues and other revenues (see “Statement of Operations Results and Trends”).

The improvement during 2023 was buoyed by first quarter 2023 results, as the Omicron variant of COVID-19 significantly impaired travel during January and the first part of February in 2022. In addition, the recovery at our city-center properties throughout the year allowed for significant improvements in several markets, such as New York, Washington, D.C. and Boston. However, growth was muted during the year due to negative impacts from the August wildfires in Maui, moderating rates at resorts in comparison to 2022, as well as elevated levels of international outbound travel throughout the year while international inbound travel recovered at a slower pace. None of our hotels in Maui sustained physical damage from the August wildfires, and our hotels were still able to fill rooms with emergency response teams and displaced residents; however, we estimate that the wildfires negatively impacted our comparable hotel RevPAR and Total RevPAR by approximately 50 basis points and 70 basis points, respectively, for the full year.

Comparable hotel Total RevPAR growth was led by our Boston, Washington, D.C., New York, and Houston markets with growth of 42.5%, 21.5%, 19.2%, and 19.2%, respectively, compared to 2022, through a combination of rate and occupancy growth, driven by strong group. Our hotels in Northern Virginia, Seattle, and San Francisco/San Jose also outperformed our portfolio with comparable hotel Total RevPAR increases of 18.4%, 15.9%, and 15.4%, respectively. These strong performances were offset by comparable hotel Total RevPAR declines at our Austin and Miami markets of 4.0% and 1.8%, respectively. The declines in Austin were driven primarily by decreases in rates due to weaker transient demand, while Miami was impacted by the ongoing renovation at the 1 Hotel South Beach. Comparable hotel Total RevPAR at our Maui/Oahu market decreased 5.1% due to the impacts from the Maui wildfires in August.

Operating Profit

As expected, margins during the year faced downward pressure in comparison to 2022 following the ramp up in operations that year as our managers returned to stable staffing levels at our properties, while occupancy remained 8 percentage points below 2019 levels. In addition, we faced increased insurance and utility expenses, higher wages and a decline in attrition and cancelation revenues compared to 2022. These downward pressures on margins were partially offset by margin improvements achieved through the implementation of portfolio-wide cost reductions with our hotel managers over the past several years. As a result, operating profit margins (calculated based on GAAP operating profit as a percentage of GAAP revenues) decreased 20 basis points to 15.6% in 2023, compared to 15.8% in 2022. Operating profit margins under GAAP are also significantly affected by several items, including acquisitions, dispositions, depreciation expense and corporate expenses, and in 2023 also benefited from business interruption gains of $83 million. Our

40

Table of Contents

comparable hotel EBITDA margins, which exclude these items and benefited from only $8 million of business interruption gains, declined 170 basis points to 30.1% for the year, down from 31.8% in 2022 due to the trends discussed above.

Net Income, Adjusted EBITDAre and Adjusted FFO per Diluted Share

Net income for Host Inc. was $752 million, an increase of $109 million, or 17.0%, from the prior year. The improvement was primarily due to improving operations at our hotels and an increase in gain on asset sales and gain on insurance settlements. These results led to an 18.2% increase in diluted earnings per common share for Host Inc. to $1.04. Adjusted EBITDAre, which excludes gain on sale of assets, among other items, increased 8.7% to $1,629 million. Adjusted FFO per diluted share increased 7.3% to $1.92 in 2023, as the increase in Adjusted EBITDAre was partially offset by an increase in interest expense (excluding debt extinguishment costs) and income taxes which are included in Adjusted FFO per diluted share but not Adjusted EBITDAre.

The trends and transactions described above for Host Inc. affected similarly the operating results for Host L.P., as the only significant difference between the Host Inc. and Host L.P. statements of operations relates to the treatment of income attributable to the unaffiliated limited partners of Host L.P.

2024 Outlook

We continued to see positive momentum in the lodging industry throughout 2023, as the U.S. economy remained resilient despite the sharp increase in interest rates. As the year progressed, inflation moderated even as unemployment remained at very low levels and consumer spending remained strong. U.S. lodging demand typically follows the growth of the U.S economy and is correlated to changes in gross domestic product (GDP). Moving into 2024, these results have led to increased optimism that inflation can be contained without leading to a recession. However, many risks to economic growth remain, including the continued effects of tight monetary policy and the Federal Reserve's decisions around interest rates, geopolitical instability throughout the globe, volatile oil prices and the uncertainty surrounding the U.S. presidential election. As a result, while the overall expectation of a recession has moderated, a slowdown in economic growth is anticipated. Blue Chip Economic Indicators consensus currently estimates an increase in real U.S. GDP of 2.1% for 2024, reflecting a deceleration from 2023 growth of 2.5%. Business investment growth is also anticipated to slow over the coming quarters, averaging 2.1% for 2024, down from 4.4% in 2023.

Overall, hotel supply growth is anticipated to remain below the long-term historical average in 2024, although we expect to see above-average growth in a few markets where our hotels are located, such as New York and Austin. Supply chain challenges have resulted in project delays across the U.S., and a tight lending environment has created construction financing challenges for future projects. We anticipate that the new project pipeline will remain suppressed until macroeconomic concerns abate, and interest rates decline.

At the same time, demand patterns have normalized from the outsized impact of the pandemic on our industry, particularly in luxury and upper upscale hotels in top U.S. markets where our hotels are located. The majority of our urban markets steadily improved in 2023, reflecting increases in group business and a gradual recovery in business transient and international demand. However, transient demand has recovered more slowly in certain markets, specifically San Francisco and Seattle. In addition, the impact from the wildfires on the Maui market, one of our largest markets by revenues, has created challenges for anticipating performance levels in the coming months as the community rebuilds.

Based on the trends noted, we expect comparable hotel RevPAR growth for the full year 2024 will be between 2.5% and 5.5%. In addition, we expect margins to decline in comparison to 2023, driven by higher wages and growth in insurance and real estate taxes. As unemployment remains historically low and the labor market is tight at the lower end of the wage scale, we anticipate another year of wage growth in the 4% to 5% range. However, the range of potential outcomes on the economy and the lodging industry specifically remains exceptionally wide, reflecting varying analyst assumptions surrounding the impact of higher interest rates, inflation, ongoing labor shortages in key industries, and escalating geopolitical conflicts.

As noted above, the current outlook for the lodging industry remains highly uncertain; therefore, there can be no assurances as to the continued recovery in lodging demand for any number of reasons, including, but not limited to, slower than anticipated return of group and business travel or deteriorating macroeconomic conditions. For more information on the risks that can affect our future results, see Part 1 Item 1A. “Risk Factors.”

41

Table of Contents

Strategic Initiatives

In 2023, we completed significant multi-year initiatives driven by our three strategic objectives, as follows, and believe we will continue to realize the benefits from our ongoing efforts: (i) redefining the hotel operating model with our managers through the implementation of portfolio-wide cost reductions, (ii) gaining market share through comprehensive renovations, including the Marriott and other transformational projects, discussed below, (iii) and strategically allocating capital to development ROI projects, including the new tower at The Ritz-Carlton, Naples completed in 2023.

For 2024, we intend to continue our disciplined approach to capital allocation to strengthen our portfolio and to deliver stockholder value through multiple levers, which may include, over time, acquiring hotels or investing in our portfolio. We intend to take advantage of our strong capital position and overall scale to acquire upper-upscale and luxury properties, through single asset or portfolio acquisitions, that we believe have sustainable competitive advantages to drive long-term value to the extent favorable pricing opportunities arise. At the same time, we will opportunistically sell hotels when market conditions permit. We also continue to critically analyze our portfolio to seek to take advantage of the inherent value of our real estate for its highest and best use.

Capital Projects. We continue to pursue opportunities to enhance asset value through select capital improvements, including projects that are designed to increase the eco-efficiency of our hotels, incorporate elements of sustainable design and replace aging equipment and systems with more efficient technology. During 2023, we spent approximately $646 million on capital expenditures, of which $195 million represented return on investment (“ROI”) capital expenditures, $274 million represented renewal and replacement projects and $177 million was for hurricane restoration work. Major capital projects completed during the year include transformational renovations at Fairmont Kea Lani, Maui, with upgrades to all guestrooms and the addition of a new arrival experience and lobby bar, and The Westin Georgetown, Washington D.C., with guestroom, public space and meeting space renovations. In July 2023, The Ritz-Carlton, Naples reopened, including the guestrooms, suites and amenities, and the new tower expansion. The final phase of reconstruction at Hyatt Regency Coconut Point Resort and Spa, the resort's waterpark, was completed in June 2023.

In addition, hotels within certain regions are subject to environmental and weather-related events, including hurricanes, wildfires, floods, rising sea levels, mudslides, earthquakes, and other natural perils. To mitigate some of these physical risks, we execute capital expenditure projects, including replacements and restorations of exterior walls, doors and windows, roofs, grounds, relocated/elevated critical equipment and distributed energy systems to further increase the resilience of our hotels. A portion of our capital expenditures for 2023 include these types of projects, which we expect to continue in future years. While the number of projects and overall cost varies from year to year, on average approximately 7% our capital expenditures have related to these types of projects over the past six years.

In 2023, we completed the Marriott transformational capital program, which began in 2018. We believe this program will position these hotels to be more competitive in their respective markets and will enhance long-term performance through increases in RevPAR and market yield index. We agreed to invest amounts in excess of the FF&E reserves required under our management agreements and, in exchange, Marriott has provided additional priority returns on the agreed upon investments and $83 million in operating profit guarantees, before reductions for incentive management fees, to offset expected business disruption.

The Marriott transformational capital program included 16 hotels, which were completed as follows: projects at the Coronado Island Marriott Resort & Spa, New York Marriott Downtown, San Francisco Marriott Marquis, and Santa Clara Marriott in 2019; projects at the Minneapolis Marriott City Center, San Antonio Marriott Rivercenter and JW Marriott Atlanta Buckhead in 2020; projects at The Ritz-Carlton Amelia Island, New York Marriott Marquis and Orlando World Center Marriott in 2021; projects at Boston Marriott Copley Place, Houston Marriott Medical Center, JW Marriott Houston by the Galleria, and Marina del Rey Marriott in 2022; and projects at the Marriott Marquis San Diego Marina and Washington Marriott at Metro Center in 2023.

Similar to the Marriott transformational capital program, we reached an agreement with Hyatt in 2023 to complete transformational reinvestment capital projects at six properties in our portfolio, the Grand Hyatt Atlanta in Buckhead, Grand Hyatt Washington, Manchester Grand Hyatt San Diego, Hyatt Regency Austin, Hyatt Regency Washington on Capitol Hill, and Hyatt Regency Reston. These investments are intended to position the targeted hotels to compete better in their respective markets while seeking to enhance long-term performance. The total investment is expected to be approximately $550 million to $600 million, two-thirds of which we were planning to invest as part of our capital plan over the next few years. We expect to invest between $125 million and $200 million per year over the next three to four years

42

Table of Contents

on this program. 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.

For 2024, we expect total capital expenditures of $500 million to $605 million, consisting of ROI projects of approximately $225 million to $280 million, renewal and replacement expenditures of $250 million to $300 million, and $25 million for the final restoration work from the damage caused by Hurricane Ian. The ROI projects include approximately $125 million to $150 million for the new Hyatt transformational capital program discussed above.

Also in 2023, we announced and broke ground on a project to develop and sell 40 fee-simple condominiums on a five-acre development parcel at Golden Oak in Orlando, adjacent to Four Seasons Resort Orlando at Walt Disney World® Resort. Construction is expected to be completed in the fourth quarter of 2025. In 2023, we spent $15 million in development costs for this project. For 2024, the development costs for this project are expected to be $50 million to $70 million.

Dispositions. During 2023, we sold The Camby, Autograph Collection for $110 million, including a $72

million loan we provided to the buyer. Up to an additional $12 million in funding is also available to the buyer under the loan for property improvement plan financing.

Financing transactions. 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. In January 2023, we amended our credit facility, extending the maturity date and adding a sustainability pricing adjustment that can adjust the applicable interest rate. As of December 31, 2023, we have a debt balance of $4.2 billion, our weighted average interest rate is 4.5%, and our weighted average debt maturity is 4.2 years.

For a detailed discussion, see “—Liquidity and Capital Resources.” For a detailed discussion of our significant debt activities, see Part II Item 8. “Financial Statements and Supplementary Data – Note 5. Debt” in the Notes to Consolidated Financial Statements.

Share Repurchase and Dividends. In 2023, we repurchased 11.4 million shares at an average price of $15.93 per share, exclusive of commissions, for a total of $181 million, under our share repurchase program. As of December 31, 2023, we have $792 million available for repurchase under the program.

During 2023, Host Inc.'s Board of Directors declared dividends totaling $0.90 per share on its common stock, including a fourth quarter special dividend of $0.25 per share. Accordingly, Host L.P. made distributions of $0.9193446 per unit with respect to its common OP units for 2023. On February 21, 2024, we announced a regular quarterly cash dividend of $0.20 per share on our common stock. The dividend will be paid on April 15, 2024 to stockholders of record on March 28, 2024. The amount of any future dividends will be based on our policy of distributing, over time, 100% of our taxable income and will be determined by Host Inc.’s Board of Directors.

There can be no assurances that any future dividends will match or exceed those set forth above for any number of reasons, including a decline in operations or an increase in liquidity needs. We believe that we have sufficient liquidity and access to the capital markets in order to fund our capital expenditures programs and to take advantage of investment opportunities.

43

Table of Contents

Results of Operations

The following table reflects certain line items from our audited consolidated statements of operations for the two years ended December 31, 2023 (in millions, except percentages):

[[GREPCENT_TABLE]]
[["","2023","","2022","","Change"],["Total revenues","$","5,311","","","$","4,907","","","8.2","%"],["Operating costs and expenses:"],["Property-level costs \u207d\u00b9\u207e","4,438","","","4,042","","","9.8"],["Corporate and other expenses","132","","","107","","","23.4"],["Gain on insurance settlements","86","","","17","","","405.9"],["Operating profit","827","","","775","","","6.7"],["Interest expense","191","","","156","","","22.4"],["Other gains","71","","","17","","","317.6"],["Provision for income taxes","36","","","26","","","38.5"],["Host Inc.:"],["Net income attributable to non-controlling interests","12","","","10","","","20.0"],["Net income attributable to Host Inc.","740","","","633","","","16.9"],["Host L.P.:"],["Net income attributable to non-controlling interests","1","","","1","","","\u2014"],["Net income attributable to Host L.P.","751","","","642","","","17.0"]]
[[/GREPCENT_TABLE]]

___________

(1)Amounts represent total operating costs and expenses from our audited consolidated statements of operations, less corporate and other expenses and gain on insurance settlements.

Statement of Operations Results and Trends

Operations improved in 2023 compared to 2022, reflecting (i) an increase in occupancy, particularly at our convention and downtown properties, (ii) easier comparisons to 2022, as the Omicron variant of COVID-19 significantly impaired travel during January and the first part of February in 2022 as noted previously, and (iii) the net impact of our recent acquisition and dispositions. The Four Seasons Resort and Residences Jackson Hole, which we acquired in November 2022, contributed $70 million to growth in revenues in 2023, compared to the negative impact on revenues resulting from the disposition of a total of five properties in 2022 and 2023. The growth in 2023 was also impacted by lost revenues due to the closure of The Ritz-Carlton, Naples, which is included in non-comparable hotels as a result of Hurricane Ian, and due to the August wildfires in Maui.

The following table presents revenues in accordance with GAAP for the two years ended December 31, 2023 (in millions, except percentages):

[[GREPCENT_TABLE]]
[["","2023","","2022","","Change"],["Revenues:"],["Rooms","$","3,244","","","$","3,014","","","7.6","%"],["Food and beverage","1,582","","","1,418","","","11.6","%"],["Other","485","","","475","","","2.1","%"],["Total revenues","$","5,311","","","$","4,907","","","8.2","%"]]
[[/GREPCENT_TABLE]]

Rooms. Total rooms revenues increased $230 million, or 7.6%, in 2023, reflecting the acquisition of the Four Seasons Resort and Residences Jackson Hole and the increase at our comparable hotels of $237 million, or 8.1%, due to increases in both average room rates and occupancy compared to 2022. Total rooms revenues were negatively affected by dispositions and the closure of The Ritz-Carlton, Naples from September 2022 to July 2023.

44

Table of Contents

Food and beverage. Total food and beverage ("F&B") revenues increased $164 million, or 11.6%, in 2023. The improvement reflects the increase at our comparable hotels of $155 million, or 11.3%, primarily driven by improvements in banquet and audio-visual revenues at convention hotels as group demand continued to recover, partially offset by lost business as a result of the Maui wildfires, which had a larger impact on ancillary spend as compared to room revenues. Total F&B revenues for 2023 benefited from improved operations following the reopening of our non-comparable hotels after Hurricane Ian, and, similar to the changes in rooms revenues, the acquisition of the Four Seasons Resort and Residences Jackson Hole.

Other revenues. Total other revenues increased $10 million, or 2.1%, in 2023. The increase reflects the increase at our comparable hotels of $4 million, or 0.9%, primarily due to an increase in ancillary revenues from improved occupancy levels and continued strong golf and spa revenues, which remain significantly ahead of pre-pandemic levels, and the acquisition of the Four Seasons Resort and Residences Jackson Hole. The increase was partially offset by normalizing, but still elevated, attrition and cancelation fees, the effects of the wildfires in Maui and the closure of The Ritz-Carlton, Naples.

Property-level Operating Expenses

The following table presents consolidated property-level operating expenses in accordance with GAAP for the two years ended December 31, 2023 (in millions, except percentages):

[[GREPCENT_TABLE]]
[["","2023","","2022","","Change"],["Expenses:"],["Rooms","$","787","","","$","727","","","8.3","%"],["Food and beverage","1,042","","","928","","","12.3","%"],["Other departmental and support expenses","1,280","","","1,181","","","8.4","%"],["Management fees","249","","","217","","","14.7","%"],["Other property-level expenses","383","","","325","","","17.8","%"],["Depreciation and amortization","697","","","664","","","5.0","%"],["Total property-level operating expenses","$","4,438","","","$","4,042","","","9.8","%"]]
[[/GREPCENT_TABLE]]

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 55% of these expenses in any given year. During 2023, these expenses increased 13% compared to 2022, reflecting an increase in hiring as operations have recovered, as well as wage and benefit inflationary pressures. In addition, early in 2022, hiring was temporarily paused in many areas due to the Omicron variant, as well as seasonality in certain markets, followed by an acceleration in demand for which our hotel managers were unable to increase staffing commensurate with the increase in demand. This led to a greater increase in expenses in 2023 on a year-over-year basis then would be expected due to increased demand alone. Hiring pace has since improved, and managers at the majority of our hotels now are operating at desired staffing levels. Wage and benefit rate inflation is expected to be approximately 4% to 5% in 2024.

Other property-level expenses consist of property taxes, which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, and do not necessarily change based on changes in revenues at our hotels.

The increase in expenses for rooms, food and beverage, other departmental and support, and management fees was generally due to the corresponding increase in revenues from improvements in occupancy and hotel operations, and an increase in staffing, as follows:

Rooms. Rooms expenses increased $60 million, or 8.3%, in 2023. Our comparable hotels rooms expenses increased $67 million, or 9.5%, in 2023. These increases reflect the increase in occupancy and staffing described above. Total rooms expenses benefited from the net impact of our recent acquisition and dispositions. Wages and benefits represented approximately 67% and 65% of our 2023 and 2022 rooms expenses, respectively.

45

Table of Contents

Food and beverage. F&B expenses increased $114 million, or 12.3%, in 2023. For our comparable hotels, F&B expenses increased $109 million, or 12.3%, in 2023. Overall, F&B costs as a percentage of revenues increased slightly, as staffing levels normalized. Wages and benefits represented approximately 69% and 67% of our 2023 and 2022 F&B expenses, respectively.

Other departmental and support expenses. Other departmental and support expenses increased $99 million, or 8.4%, in 2023. On a comparable hotel basis, other departmental and support expenses increased $102 million, or 8.9%. These increases were primarily due to the increase in staffing. Total other departmental and support expenses benefited from the net impact of our recent acquisition and dispositions. Wages and benefits represented approximately 40% of our 2023 and 2022 other departmental and support expenses.

Management fees. Total management fees increased $32 million, or 14.7%, in 2023. Base management fees, which generally are calculated as a percentage of total revenues, increased $10 million, or 7.1%, compared to 2022. At our comparable hotels, base management fees increased $9 million, or 6.3%, for 2023. 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 $22 million, due primarily to the improved operations at our properties. At our comparable hotels, incentive management fees increased $18 million, or 21.8%, in 2023.

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 increased $58 million, or 17.8%, in 2023, due to increases in property insurance premiums, rent on a portion of our ground leases that are based on a percentage of sales, and property taxes. Other property-level expenses at our comparable hotels increased $52 million, or 16.3%, in 2023. Other property-level expenses were partially offset by the receipt of operating profit guarantees from Marriott under the transformational capital program in both 2023 and 2022.

Other Income and Expenses

Corporate and other expenses. Corporate and other expenses include the following items (in millions):

[[GREPCENT_TABLE]]
[["","Year ended December 31,"],["","2023","","2022"],["General and administrative costs","$","85","","","$","76"],["Non-cash stock-based compensation expense","30","","26"],["Litigation accruals","17","","5"],["Total","$","132","","","$","107"]]
[[/GREPCENT_TABLE]]

General and administrative costs primarily consist of wages and benefits, travel, corporate insurance, legal fees, audit fees, building rent and systems costs. Increases in 2023 primarily reflect growth in compensation and litigation accruals.

Gain on insurance settlements. In 2023, we recorded a gain on insurance consisting of $3 million related to property insurance proceeds and $83 million for receipt of business interruption proceeds, primarily relating to Hurricane Ian. In 2022, we recorded a gain on insurance consisting of $6 million related to property insurance proceeds and $11 million for receipt of business interruption insurance proceeds, each relating to various claims at our properties.

46

Table of Contents

Interest expense. Interest expense increased $35 million, or 22.4%, in 2023 as compared to 2022, due to an increase in average interest rates on our floating rate debt. The following table presents certain components of interest expense (in millions):

[[GREPCENT_TABLE]]
[["","Year ended December 31,"],["","2023","","2022"],["Cash interest expense \u207d\u00b9\u207e","$","178","","","$","146"],["Non-cash interest expense","9","","","10"],["Cash debt extinguishment costs \u207d\u00b9\u207e","3","","","\u2014"],["Non-cash debt extinguishment costs","1","","","\u2014"],["Total interest expense","$","191","","","$","156"]]
[[/GREPCENT_TABLE]]

___________

(1)Total cash interest expense paid was $183 million and $142 million in 2023 and 2022, respectively, which includes an increase(decrease) due to the change in accrued interest of $2 million and $(4) million for 2023 and 2022, respectively.

Other gains. The following table presents the gains recognized on the sale of assets and other (in millions):

[[GREPCENT_TABLE]]
[["","Year ended December 31,"],["","2023","","2022"],["The Camby, Autograph Collection","$","69","","","$","\u2014"],["Sheraton Boston","1","","","13"],["YVE Hotel Miami","\u2014","","","1"],["Chicago Marriott Suites Downers Grove","\u2014","","","4"],["Other","1","","","(1)"],["","$","71","","","$","17"]]
[[/GREPCENT_TABLE]]

Equity in earnings of affiliates. Equity in earnings of affiliates increased $3 million, or 100.0%, in 2023, reflecting less unrealized losses recorded at our investment in Fifth Wall Ventures, L.P. in 2023 compared to 2022, partially offset by losses at our Maui timeshare joint venture due to the Maui wildfires in August 2023.

Provision for income taxes. We lease substantially all our properties to consolidated subsidiaries designated as TRS for U.S. federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations and the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit. In 2023 and 2022, we recorded an income tax provision of $36 million and $26 million, respectively, due primarily to the profitability of hotel operations retained by the TRS, including the business interruption insurance gains recorded in 2023 and 2022. As a result of legislation enacted by the CARES Act in 2020, a portion of the 2020 domestic net operating loss was carried back to 2017-2019 in order to procure a refund of U.S. federal corporate income taxes previously paid. The remaining portion of the 2020 net operating loss, as well as the entire 2021 net operating loss incurred by our TRS, may be carried forward indefinitely, subject to an annual limit on the use thereof equal to 80% of annual taxable income. See also Part II Item 8. “Financial Statements and Supplementary Data – Note 7. Income Taxes” for a discussion of our income taxes.

47

Table of Contents

Comparable Hotel RevPAR Overview

Effective January 1, 2023, we ceased presentation of All Owned Hotel results, and returned to a comparable hotel presentation for our hotel level results. 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. We believe this provides investors with a better understanding of underlying growth trends for our current portfolio, without impact from properties that experienced closures. We have removed Hyatt Regency Coconut Point Resort and Spa and The Ritz-Carlton, Naples from our comparable operations for 2023 due to closures caused by Hurricane Ian. 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 table sets forth performance information for our hotels by geographic location as of December 31, 2023 and 2022 on a comparable hotel and actual basis:

Comparable Hotel Results by Location

[[GREPCENT_TABLE]]
[["","","As of December 31, 2023","","Year ended December 31, 2023","","Year ended December 31, 2022"],["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/Oahu","","4","","2,006","","$","576.75","","","71.9","%","","$","414.84","","","$","612.98","","","$","560.86","","","74.7","%","","$","418.70","","","$","646.24","","","(0.9","%)","","(5.1","%)"],["Miami","","2","","1,033","","533.31","","","66.9","%","","356.86","","","624.20","","","621.56","","","61.3","%","","380.89","","","635.56","","","(6.3","%)","","(1.8","%)"],["Jacksonville","","1","","446","","503.57","","","69.9","%","","351.80","","","784.10","","","527.16","","","65.3","%","","344.37","","","749.99","","","2.2","%","","4.5","%"],["New York","","2","","2,486","","349.99","","","82.7","%","","289.53","","","412.23","","","333.65","","","72.8","%","","242.88","","","345.93","","","19.2","%","","19.2","%"],["Phoenix","","3","","1,545","","399.79","","","71.5","%","","285.85","","","637.23","","","392.52","","","70.3","%","","275.96","","","625.68","","","3.6","%","","1.8","%"],["Florida Gulf Coast","","3","","941","","389.43","","","72.3","%","","281.40","","","593.72","","","394.84","","","73.7","%","","291.11","","","577.93","","","(3.3","%)","","2.7","%"],["Orlando","","2","","2,448","","384.63","","","67.9","%","","261.32","","","521.26","","","410.76","","","63.8","%","","262.20","","","508.78","","","(0.3","%)","","2.5","%"],["Los Angeles/Orange County","","3","","1,067","","300.29","","","81.7","%","","245.49","","","360.91","","","288.81","","","79.4","%","","229.44","","","337.54","","","7.0","%","","6.9","%"],["San Diego","","3","","3,294","","282.20","","","78.4","%","","221.29","","","414.34","","","272.28","","","74.6","%","","203.24","","","371.28","","","8.9","%","","11.6","%"],["Boston","","2","","1,496","","264.18","","","78.2","%","","206.66","","","275.90","","","244.35","","","58.5","%","","142.90","","","193.67","","","44.6","%","","42.5","%"],["Washington, D.C. (CBD)","","5","","3,240","","276.74","","","70.1","%","","193.92","","","280.31","","","259.57","","","61.7","%","","160.13","","","230.71","","","21.1","%","","21.5","%"],["Philadelphia","","2","","810","","231.94","","","79.7","%","","184.83","","","288.44","","","218.52","","","80.6","%","","176.19","","","270.04","","","4.9","%","","6.8","%"],["Austin","","2","","767","","269.26","","","65.7","%","","176.88","","","311.25","","","271.65","","","69.5","%","","188.91","","","324.19","","","(6.4","%)","","(4.0","%)"],["Northern Virginia","","2","","916","","243.70","","","70.4","%","","171.48","","","268.97","","","219.41","","","65.6","%","","143.96","","","227.21","","","19.1","%","","18.4","%"],["Chicago","","3","","1,562","","243.59","","","68.9","%","","167.80","","","238.73","","","240.66","","","65.1","%","","156.57","","","217.31","","","7.2","%","","9.9","%"],["San Francisco/San Jose","","6","","4,162","","251.98","","","66.4","%","","167.25","","","244.44","","","230.88","","","63.0","%","","145.42","","","211.87","","","15.0","%","","15.4","%"],["Seattle","","2","","1,315","","239.33","","","66.8","%","","159.81","","","218.64","","","229.92","","","62.4","%","","143.52","","","188.58","","","11.4","%","","15.9","%"],["Atlanta","","2","","810","","190.67","","","74.0","%","","141.12","","","227.52","","","181.81","","","72.2","%","","131.35","","","205.87","","","7.4","%","","10.5","%"],["Houston","","5","","1,942","","201.17","","","69.4","%","","139.51","","","195.30","","","182.97","","","63.8","%","","116.73","","","163.85","","","19.5","%","","19.2","%"],["New Orleans","","1","","1,333","","196.29","","","68.6","%","","134.72","","","203.93","","","200.59","","","66.2","%","","132.74","","","198.18","","","1.5","%","","2.9","%"],["San Antonio","","2","","1,512","","215.77","","","61.4","%","","132.55","","","212.13","","","199.52","","","66.3","%","","132.30","","","206.09","","","0.2","%","","2.9","%"],["Denver","","3","","1,340","","192.48","","","63.3","%","","121.90","","","181.72","","","182.33","","","61.9","%","","112.85","","","163.64","","","8.0","%","","11.1","%"],["Other","","10","","3,061","","313.84","","","64.2","%","","201.47","","","308.08","","","320.85","","","60.7","%","","194.89","","","294.37","","","3.4","%","","4.7","%"],["Domestic","","70","","39,532","","304.48","","","70.7","%","","215.33","","","351.26","","","299.40","","","66.8","%","","199.90","","","325.31","","","7.7","%","","8.0","%"],["International","","5","","1,499","","186.14","","","62.4","%","","116.16","","","168.42","","","162.33","","","55.1","%","","89.51","","","130.24","","","29.8","%","","29.3","%"],["All Locations","","75","","41,031","","$","300.66","","","70.4","%","","$","211.71","","","$","344.63","","","$","295.24","","","66.3","%","","$","195.87","","","$","318.25","","","8.1","%","","8.3","%"]]
[[/GREPCENT_TABLE]]

48

Table of Contents

Results by Location - actual, based on ownership period(1)

[[GREPCENT_TABLE]]
[["","","As of December 31,"],["","","2023","","2022","","Year ended December 31, 2023","","Year ended December 31, 2022"],["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/Oahu","","4","","4","","$","576.75","","","71.9","%","","$","414.84","","","$","612.98","","","$","560.86","","","74.7","%","","$","418.70","","","$","646.24","","","(0.9","%)","","(5.1)","%"],["Miami","","2","","2","","533.31","","","66.9","%","","356.86","","","624.20","","","585.71","","","62.7","%","","367.36","","","607.26","","","(2.9","%)","","2.8","%"],["Jacksonville","","1","","1","","503.57","","","69.9","%","","351.80","","","784.10","","","527.16","","","65.3","%","","344.37","","","749.99","","","2.2","%","","4.5","%"],["New York","","2","","2","","349.99","","","82.7","%","","289.53","","","412.23","","","317.20","","","67.9","%","","215.38","","","305.31","","","34.4","%","","35.0","%"],["Phoenix","","3","","4","","397.16","","","71.7","%","","284.75","","","628.10","","","368.20","","","70.1","%","","258.18","","","568.19","","","10.3","%","","10.5","%"],["Florida Gulf Coast","","5","","5","","388.97","","","60.6","%","","235.74","","","497.91","","","418.86","","","62.2","%","","260.47","","","509.76","","","(9.5","%)","","(2.3","%)"],["Orlando","","2","","2","","384.63","","","67.9","%","","261.32","","","521.26","","","410.76","","","63.8","%","","262.20","","","508.78","","","(0.3","%)","","2.5","%"],["Los Angeles/Orange County","","3","","3","","300.29","","","81.7","%","","245.49","","","360.91","","","288.81","","","79.4","%","","229.44","","","337.54","","","7.0","%","","6.9","%"],["San Diego","","3","","3","","282.20","","","78.4","%","","221.29","","","414.34","","","272.28","","","74.6","%","","203.24","","","371.28","","","8.9","%","","11.6","%"],["Boston","","2","","2","","264.18","","","78.2","%","","206.66","","","275.90","","","240.63","","","56.9","%","","136.95","","","184.93","","","50.9","%","","49.2","%"],["Washington, D.C. (CBD)","","5","","5","","276.74","","","70.1","%","","193.92","","","280.31","","","259.57","","","61.7","%","","160.13","","","230.71","","","21.1","%","","21.5","%"],["Philadelphia","","2","","2","","231.94","","","79.7","%","","184.83","","","288.44","","","218.52","","","80.6","%","","176.19","","","270.04","","","4.9","%","","6.8","%"],["Austin","","2","","2","","269.26","","","65.7","%","","176.88","","","311.25","","","271.65","","","69.5","%","","188.91","","","324.19","","","(6.4","%)","","(4.0","%)"],["Northern Virginia","","2","","2","","243.70","","","70.4","%","","171.48","","","268.97","","","219.41","","","65.6","%","","143.96","","","227.21","","","19.1","%","","18.4","%"],["Chicago","","3","","3","","243.59","","","68.9","%","","167.80","","","238.73","","","232.43","","","63.8","%","","148.19","","","204.51","","","13.2","%","","16.7","%"],["San Francisco/San Jose","","6","","6","","251.98","","","66.4","%","","167.25","","","244.44","","","230.88","","","63.0","%","","145.42","","","211.87","","","15.0","%","","15.4","%"],["Seattle","","2","","2","","239.33","","","66.8","%","","159.81","","","218.64","","","229.92","","","62.4","%","","143.52","","","188.58","","","11.4","%","","15.9","%"],["Atlanta","","2","","2","","190.67","","","74.0","%","","141.12","","","227.52","","","181.81","","","72.2","%","","131.35","","","205.87","","","7.4","%","","10.5","%"],["Houston","","5","","5","","201.17","","","69.4","%","","139.51","","","195.30","","","182.97","","","63.8","%","","116.73","","","163.85","","","19.5","%","","19.2","%"],["New Orleans","","1","","1","","196.29","","","68.6","%","","134.72","","","203.93","","","200.59","","","66.2","%","","132.74","","","198.18","","","1.5","%","","2.9","%"],["San Antonio","","2","","2","","215.77","","","61.4","%","","132.55","","","212.13","","","199.52","","","66.3","%","","132.30","","","206.09","","","0.2","%","","2.9","%"],["Denver","","3","","3","","192.48","","","63.3","%","","121.90","","","181.72","","","182.33","","","61.9","%","","112.85","","","163.64","","","8.0","%","","11.1","%"],["Other","","10","","10","","313.84","","","64.2","%","","201.47","","","308.08","","","268.65","","","61.1","%","","164.13","","","242.02","","","22.7","%","","27.3","%"],["Domestic","","72","","73","","305.83","","","70.2","%","","214.78","","","352.38","","","296.15","","","66.1","%","","195.67","","","319.08","","","9.8","%","","10.4","%"],["International","","5","","5","","186.14","","","62.4","%","","116.16","","","168.42","","","162.33","","","55.1","%","","89.51","","","130.24","","","29.8","%","","29.3","%"],["All Locations","","77","","78","","$","302.03","","","69.9","%","","$","211.27","","","$","345.86","","","$","292.23","","","65.7","%","","$","191.97","","","$","312.55","","","10.1","%","","10.7","%"]]
[[/GREPCENT_TABLE]]

___________

(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 Sales by Business Mix.

The majority of our customers fall into three broad categories: transient, group and contract business. The information below is derived from business mix results from the 75 comparable hotels owned as of December 31, 2023.

Improvements in 2023 compared to 2022 were primarily driven by an increase in group business, through increases in occupancy and room rates. At the same time, the recovery in business transient demand continued, driven by demand from small and medium-sized businesses, which accounted for a greater share of demand after the COVID-19 pandemic, compared to demand from large companies. Business transient demand improvement was partially offset by weaker leisure demand due to the effects of the wildfires in Maui and moderating transient rates at our resort hotels, although resort transient rates still remain more than 50% above 2019.

49

Table of Contents

The following are the results of our transient, group and contract business:

[[GREPCENT_TABLE]]
[["","Year ended December 31, 2023"],["","Transientbusiness","","Groupbusiness","","Contractbusiness"],["Room nights (in thousands)","5,756","","","4,086","","","720"],["Percentage change in room nights vs. same period in 2022","1.3","%","","12.4","%","","14.1","%"],["Rooms Revenues (in millions)","$","1,922","","","$","1,118","","","$","135"],["Percentage change in rooms revenues vs. same period in 2022","0.9","%","","20.9","%","","25.4","%"]]
[[/GREPCENT_TABLE]]

50

Table of Contents

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. Over the past several years leading up to the COVID-19 pandemic, we had decreased our leverage as measured by our net debt-to-EBITDA ratio and reduced our debt service obligations, leading to an increase in our fixed charge coverage ratio. As a result, the company was well positioned at the onset of the COVID-19 pandemic with sufficient liquidity and financial flexibility to withstand the severe slowdown in U.S. economic activity and lodging demand brought on by the pandemic. We intend to use available cash in the near term predominantly to fund, and believe that 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 Host L.P. limited partners and stock and OP unit repurchases. Our primary sources of cash include cash from operations, proceeds from the sale of assets, borrowings under our credit facility and debt and equity issuances. In the short term, our cash obligations include $400 million of senior notes due in April of 2024. We believe we have sufficient liquidity to repay them with available cash at maturity, or we can refinance the notes with our access to capital markets. For our long-term senior note and credit facility obligations, we historically have refinanced these amounts prior to their maturity through the issuance of new senior notes or the entry into new credit facility agreements. Whether we will refinance the April 2024 senior notes upon maturity with new senior notes will depend upon market conditions generally, including the interest rate environment, and our cash requirements. As discussed further below, we amended our credit facility effective January 4, 2023, extending the maturity date among other things. Also, in the short term, our cash obligations include the minimum lease payments on our ground leases, which in 2024 are approximately $31 million, and most of our other operating obligations. In the long term, our ground lease payments are the longest time horizon obligations and currently run up to 89 years. For a summary of our obligations under our ground leases, see Exhibit 99.1 to this Annual Report.

In addition to the liabilities on our consolidated balance sheet, under our capital expenditures program, we have budgeted to spend $500 million to $605 million in 2024. Commitments for capital expenditures generally run less than two years for the life of the project. In the long term, renewal and replacement ("R&R") capital expenditures are designed to maintain the quality and competitiveness of our hotels and typically occur at intervals of seven to ten years. The projects are primarily funded through the FF&E reserves established at each hotel. Average annual R&R spend over the last five years has been $232 million.

Our 2024 capital expenditures budget includes approximately $25 million for restoration work following Hurricane Ian in September 2022, primarily at The Ritz-Carlton, Naples. While all of our hotels have fully reopened, we have continued our restoration efforts, for which we estimate the total property reconstruction and remediation costs, including significant enhancements, to be approximately $300 million to $320 million of which approximately 30% relates to remediation costs. As of December 31, 2023, we have received $213 million of insurance proceeds related to these claims, of which $80 million has been recognized as a gain on business interruption, with any remaining proceeds expected to be received in 2024. Our expected potential insurance recovery is $310 million for covered costs, including the property remediation and reconstruction costs and the near-term loss of business; however, there can be no assurances that we will be able to collect the full amount.

51

Table of Contents

As part of our investment in our Noble joint venture, we have made a $211.5 million capital commitment to Noble Fund V. As of December 31, 2023, we have funded $33 million of this commitment, with the remaining amounts to be paid as the fund calls them.

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. See also Part II Item 8. “Financial Statements and Supplementary Data – Note 17. Legal Proceedings, Guarantees and Contingencies” for a discussion of obligations under contingent liabilities or guarantees and a more detailed description of the damage caused by Hurricane Ian.

Capital Resources. As of December 31, 2023, we had $1,144 million of cash and cash equivalents, $217 million in our FF&E escrow reserve and $1.5 billion available under the revolver portion of our credit facility. In the near term, we expect to fund our above cash requirements, including our dividends, capital expenditures program, debt service and operating and corporate costs, primarily through hotel operations and our existing cash reserves. Based on our cash balance at December 31, 2023 and our expected cash obligations, we believe we will have sufficient liquidity to meet our near-term obligations. Future acquisitions and/or obligations also may be funded through a draw on the available portion of the revolver under our credit facility, equity issuances, or asset sales.

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, which include, among other things, the allowable amounts of leverage, interest coverage and fixed charges.

The following graph summarizes our aggregate debt maturities as of February 23, 2024:

___________

(1)The first term loan under our credit facility that is due in 2027 has an extension option that would extend maturity of the instrument to 2028, subject to meeting certain conditions, including payment of a fee. The second term loan tranche that is due in 2028 does not have an extension option.

(2)Mortgage and other debt excludes principal amortization of $2 million each year from 2024-2027 for the mortgage loan that matures in 2027.

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 2023, 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 for 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

52

Table of Contents

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, 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.

Two programs currently are in place relating to purchases and sales of our common stock. First, on May 31, 2023, we entered into a 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 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 in 2023. As of December 31, 2023, there was $600 million of remaining capacity under the agreement.

Second, in August 2022, Host Inc.’s Board of Directors authorized an increase in the existing program to repurchase Host Inc. common stock up to $1 billion. The 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. In the fourth quarter of 2023, we repurchased 1.9 million shares at an average price of $16.50, exclusive of commissions, for a purchase price of approximately $31 million. For full year 2023, we repurchased 11.4 million shares at an average price of $15.93 per share, exclusive of commissions, for a total of $181 million. At December 31, 2023, we had $792 million available for repurchase under the program.

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. In 2023, our primary sources of cash included cash from operations and proceeds from the repayment of notes receivable and asset sales. Our primary uses of cash during the year consisted of capital expenditures, operating costs, share repurchases and distributions to equity holders. We anticipate that our sources and uses of cash will be similar in 2024, other than the proceeds from the two notes receivable that were repaid in 2023.

Cash Provided by Operating Activities. Our net cash provided by operating activities for 2023 was $1,441 million, an increase of $25 million compared to 2022, reflecting the improved operations at our hotels compared to 2022, along with remediation insurance proceeds which exceeded remediation costs incurred in 2023.

Cash Used in Investing Activities. Approximately $183 million of cash was used in investing activities during 2023 compared to $618 million in 2022. In addition to the acquisition and disposition activity detailed in the charts below, cash used in investing activities included $646 million of capital expenditures in 2023, compared to $504 million in 2022. These amounts include certain internal costs and interest expense associated with our capital expenditures projects that have been capitalized in accordance with GAAP. These capitalized costs were $24 million, $20 million and $13 million for 2023, 2022 and 2021, respectively.

53

Table of Contents

The following tables summarize significant acquisitions, dispositions and investments in affiliates from January 1, 2022 through February 23, 2024 (in millions):

[[GREPCENT_TABLE]]
[["Transaction Date","","Description of Transaction","","Investment"],["Acquisitions/Investments"],["November","2022","","Acquisition of Four Seasons Resorts and Residences Jackson Hole\u207d\u00b9\u207e","","$","(315)"],["January","2022","","Investment to acquire non-controlling interest of a joint venture with Noble Investment Group\u207d\u00b2\u207e","","(91)"],["","","","Total acquisitions","","$","(406)"]]
[[/GREPCENT_TABLE]]
___________

(1)Investment amount represents total consideration, including the assumption of $19 million of hotel-level liabilities, net of $5 million of cash retained at the property.

(2)Investment consisted of $35 million of cash and the issuance of approximately $56 million of Host L.P. OP units.

[[GREPCENT_TABLE]]
[["Transaction Date","","Description of Transaction","","Net Proceeds\u207d\u00b9\u207e","","Sales Price"],["Dispositions"],["November","2023","","Receipt of Sheraton New York note receivable\u207d\u00b2\u207e","","$","250","","","$","\u2014"],["September","2023","","Receipt of Sheraton Boston note receivable\u207d\u00b3\u207e","","163","","","\u2014"],["March","2023","","Disposition of The Camby, Autograph Collection\u207d\u2074\u207e","","36","","","110"],["August","2022","","Disposition of Chicago Marriott Suites Downers Grove","","14","","","16"],["April","2022","","Disposition of YVE Miami Hotel","","49","","","50"],["April","2022","","Disposition of Sheraton New York Times Square Hotel\u207d\u00b2\u207e","","106","","","373"],["February","2022","","Disposition of Sheraton Boston\u207d\u00b3\u207e","","67","","","233"],["","","","Total dispositions","","$","685","","","$","782"]]
[[/GREPCENT_TABLE]]
___________

(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)In connection with the sale of the Sheraton New York Times Square Hotel, we extended a $250 million bridge loan to the purchaser. The loan was repaid in November 2023.

(3)In connection with the sale of the Sheraton Boston, we extended a $163 million bridge loan to the purchaser. The loan was repaid in September 2023.

(4)In connection with the sale of The Camby, Autograph Collection, we issued a $72 million loan to the purchaser. The disposition proceeds shown are net of the loan.

Cash Used in Financing Activities. Net cash used in financing activities was $771 million for 2023, compared to $874 million in 2022. Cash used in financing activities in 2023 primarily related to the payment of common stock dividends and common stock repurchases. Cash used in financing activities in 2022 included a repayment on the revolver portion of the credit facility and payment of common stock dividends, following the reinstatement of the quarterly common stock dividend in the first quarter of 2022, as well as the repurchase of common stock.

Equity/Capital Transactions. The following table summarizes significant equity transactions that have been completed from January 1, 2022 through February 23, 2024 (in millions):

[[GREPCENT_TABLE]]
[["Transaction Date","","Description of Transaction","","Transaction Amount"],["Equity of Host Inc."],["January","2024","","Dividend payment\u207d\u00b9\u207e\u207d\u00b2\u207e","","$","(316)"],["January - December","2023","","Repurchase of 11.4 million shares of Host Inc. common stock","","(182)"],["January - October","2023","","Dividend payments\u207d\u00b2\u207e","","(547)"],["December","2022","","Repurchase of 1.7 million shares of Host Inc. common stock","","(27)"],["April - October","2022","","Dividend payments\u207d\u00b2\u207e","","(150)"],["","","","Cash payments on equity transactions","","$","(1,222)"]]
[[/GREPCENT_TABLE]]

___________

(1)Our dividend payment for the fourth quarter of 2023 was made in January 2024, but was accrued at December 31, 2023.

54

Table of Contents

(2)In connection with the dividend payments, Host L.P. made distributions of $321 million, $555 million and $152 million in 2024, 2023 and 2022, respectively, to its common OP unit holders.

Financial Condition

As of December 31, 2023, our total debt was approximately $4.2 billion, of which 76% carried a fixed rate of interest. Total debt was comprised of the following (in millions):

[[GREPCENT_TABLE]]
[["","As of December 31,"],["","2023","","2022"],["Series E senior notes, with a rate of 4% due June 2025","$","499","","","$","499"],["Series F senior notes, with a rate of 4\u00bd% due February 2026","399","","","399"],["Series G senior notes, with a rate of 3\u215e% due April 2024","400","","","399"],["Series H senior notes, with a rate of 3\u215c% due December 2029","643","","","642"],["Series I senior notes, with a rate of 3\u00bd% due September 2030","738","","","736"],["Series J senior notes, with a rate of 2.9% due December 2031","441","","","440"],["Total senior notes","3,120","","","3,115"],["Credit facility revolver \u207d\u00b9\u207e","(8)","","","(4)"],["Credit facility term loan due January 2027","499","","","499"],["Credit facility term loan due January 2028","498","","","499"],["Mortgage and other debt, with an average interest rate of 4.67% and 4.9% at December 31, 2023 and 2022, respectively, maturing through November 2027","100","","","106"],["Total debt","$","4,209","","","$","4,215"]]
[[/GREPCENT_TABLE]]

___________

(1)There were no outstanding credit facility borrowings at December 31, 2023 or 2022. Amount shown represents deferred financing costs related to the credit facility revolver.

Aggregate debt maturities, including principal amortization, at December 31, 2023 are as follows (in millions):

[[GREPCENT_TABLE]]
[["","Senior notes and credit facility","","Mortgage and Other debt","","Total"],["2024","$","400","","","$","2","","","$","402"],["2025","500","","","2","","","502"],["2026","400","","","2","","","402"],["2027","500","","","92","","","592"],["2028","500","","","\u2014","","","500"],["Thereafter","1,850","","","\u2014","","","1,850"],["","4,150","","","98","","","4,248"],["Deferred financing costs","(25)","","","\u2014","","","(25)"],["Unamortized (discounts) premiums, net","(16)","","","2","","","(14)"],["","$","4,109","","","$","100","","","$","4,209"]]
[[/GREPCENT_TABLE]]

Senior Notes. The following summary is a description of the material provisions of the indenture governing the various senior notes issued by Host L.P. We pay interest on each series of our outstanding senior notes semi-annually in arrears at the respective annual rates indicated on the table above. Under the terms of our senior notes indenture, our senior notes are equal in right of payment with all of Host L.P.’s unsubordinated indebtedness and senior to all subordinated obligations of Host L.P. Currently there are no guarantees provided with respect to the senior notes, but we have agreed that all Host L.P. subsidiaries which guarantee other Host L.P. debt must similarly provide guarantees with respect to the senior notes.

55

Table of Contents

All of our outstanding senior notes at December 31, 2023 were issued after we attained an investment grade rating and have covenants customary for investment grade debt and covenants that are similar to each other series of our senior notes. These covenants are primarily limitations on our ability to incur additional debt. There are no restrictions on our ability to pay dividends.

Under the terms of our senior notes, Host L.P.’s ability to incur debt is subject to restrictions and the satisfaction of various conditions, including the achievement of an EBITDA-to-interest coverage ratio of at least 1.5x by Host L.P. As calculated, this ratio excludes from interest expense items such as call premiums and deferred financing charges that are included in interest expense on Host L.P.’s audited consolidated statement of operations. In addition, the calculation is based on Host L.P.’s pro forma results for the four prior fiscal quarters, giving effect to certain transactions, such as acquisitions, dispositions and financings, as if they had occurred at the beginning of the period. Other covenants limiting Host L.P.’s ability to incur debt include maintaining total debt of less than 65% of adjusted total assets (using undepreciated real estate book values), maintaining secured debt of less than 40% of adjusted total assets (using undepreciated real estate book values) and maintaining total unencumbered assets of at least 150% of the aggregate principal amount of outstanding unsecured debt of Host L.P. and its subsidiaries. So long as Host L.P. maintains the required level of interest coverage and satisfies these and other conditions in the senior notes indenture, it may incur additional debt.

As of December 31, 2023, we have met the minimum financial covenant levels under our senior notes indentures. The following table summarizes the financial tests contained in the senior notes indenture for our senior notes and our actual credit ratios as of December 31, 2023:

[[GREPCENT_TABLE]]
[["","Actual Ratio","","Covenant Requirement"],["Unencumbered assets tests","496","%","","Minimum ratio of 150%"],["Total indebtedness to total assets","20","%","","Maximum ratio of 65%"],["Secured indebtedness to total assets","1%","","Maximum ratio of 40%"],["EBITDA-to-interest coverage ratio","8.6x","","Minimum ratio of 1.5x"]]
[[/GREPCENT_TABLE]]

Credit Facility. On January 4, 2023, we entered into the sixth amended and restated senior revolving credit and term loan facility, with Bank of America, N.A., as administrative agent, Wells Fargo Bank, N.A. and JPMorgan Chase Bank, N.A. as co-syndication agents, and certain other agents and lenders. The credit facility allows for revolving borrowings in an aggregate principal amount of up to $1.5 billion. The revolver also includes 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 peso borrowings. The credit facility also provides for a term loan facility of $1 billion (which is fully utilized), a subfacility of up to $100 million for swingline borrowings in currencies other than U.S. dollars and a subfacility of up to $100 million for issuances of letters of credit. Host L.P. also has the option to add in the future $500 million of commitments which may be used for additional revolving credit facility borrowings and/or term loans, subject to obtaining additional loan commitments (which we have not currently obtained) and the satisfaction of certain conditions.

The revolving credit facility has an initial scheduled maturity date of January 4, 2027, which date may be extended by up to a year by the exercise of either a 1-year extension option or two 6-month extension options, each of which is subject to certain conditions, including the payment of an extension fee and the accuracy of representations and warranties. One $500 million term loan tranche has an initial maturity date of January 4, 2027, which date may be extended up to a year by the exercise of one 1-year extension option, which is subject to certain conditions, including the payment of an extension fee; and the second $500 million term loan tranche has a maturity date of January 4, 2028, which date may not be extended.

Neither the revolving credit facility nor the term loans, as applicable, requires any scheduled amortization payments prior to maturity. The term loans are subject to the same terms and conditions as those in the credit facility regarding subsidiary guarantees, operational covenants, financial covenants and events of default (as discussed below).

Guarantees. Similar to our senior note indenture, the credit facility requires all Host L.P. subsidiaries which guaranty Host L.P. senior unsecured debt to similarly guarantee obligations under the credit facility. Currently, there are no such guarantees.

56

Table of Contents

Prepayments. Voluntary prepayments of revolver borrowings and term loans under the credit facility are permitted in whole or in part without premium or penalty.

Financial Covenants. The credit facility contains covenants concerning allowable leverage, fixed charge coverage and unsecured interest coverage. We are permitted to make borrowings and maintain amounts outstanding under the credit facility so long as our ratio of consolidated total debt to consolidated EBITDA (“leverage ratio”) is not in excess of 7.25x, our unsecured coverage ratio is not less than 1.75x and our fixed charge coverage ratio is not less than 1.25x. These calculations are performed based on pro forma results for the prior four fiscal quarters, giving effect to transactions such as acquisitions, dispositions and financings as if they had occurred at the beginning of the period. Under the terms of the credit facility, interest expense excludes items such as the gains and losses on the extinguishment of debt, deferred financing charges related to the senior notes or the credit facility, and non-cash interest expense, all of which are included in interest expense on our audited consolidated statements of operations. Additionally, total debt used in the calculation of our leverage ratio is based on a “net debt” concept, pursuant to which cash and cash equivalents in excess of $100 million are deducted from our total debt balance.

We are in compliance with all of our financial covenants under the credit facility. The following table summarizes the financial tests contained in the credit facility and our actual credit ratios as of December 31, 2023:

[[GREPCENT_TABLE]]
[["","Actual Ratio","","Covenant Requirement for all years"],["Leverage ratio","1.9x","","Maximum ratio of 7.25x"],["Fixed charge coverage ratio","6.7x","","Minimum ratio of 1.25x"],["Unsecured interest coverage ratio \u207d\u00b9\u207e","8.8x","","Minimum ratio of 1.75x"]]
[[/GREPCENT_TABLE]]

___________

(1)If at any time our leverage ratio is above 7.0x, our minimum unsecured interest coverage ratio requirement will decrease to 1.50x.

Interest and Fees. The amendment also converted the underlying reference rate from LIBOR to SOFR plus a credit spread adjustment of 10 basis points. We pay interest on U.S. dollar revolver borrowings under the credit facility at floating rates equal to SOFR (plus a credit spread adjustment of 10 basis points) plus a margin ranging from 72.5 to 140 basis points (depending on Host L.P.’s unsecured long-term debt rating). We also pay a facility fee on the total $1.5 billion revolver commitment ranging from 12.5 to 30 basis points, depending on our rating and regardless of usage. We also may elect to pay interest on revolver and term loan borrowings using a base rate plus a margin that is similarly determined based on Host L.P.’s unsecured long-term debt rating. The credit facility includes a sustainability pricing adjustment that can result in a change in the interest rate applicable to borrowings. The adjustment can result in an increase or decrease of the interest rate for revolving loans of up to 4 basis points and an increase or decrease of the facility fee of up to 1 basis point. In the case of the term loans, the adjustment can result in an increase or decrease of the interest rate applicable of up to 5 basis points. The adjustments will be determined annually on the basis of an annual audited report of Host L.P.’s performance against targets established in the credit facility 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. Effective June 30, 2023, we achieved a milestone in the progress towards our renewable energy goal, resulting in the applicable basis point reduction in the interest rate on borrowings under the credit facility. Based on Host L.P.’s unsecured long-term debt rating as of December 31, 2023, we are able to borrow on the revolver at a rate of adjusted SOFR plus 85 basis points less 2 basis points for meeting sustainability milestones for an all-in rate of 6.29% and pay a facility fee of 19.5 basis points.

Interest on the term loans consists of floating rates equal to SOFR (plus a credit spread adjustment of 10 basis points) plus a margin ranging from 80 to 160 basis points (depending on Host L.P.’s unsecured long-term debt rating) and adjusted for sustainability pricing. Based on Host L.P.’s long-term debt rating as of December 31, 2023, our applicable margin on SOFR loans under both term loans is 95 basis points less 2.5 basis points for meeting sustainability milestones, for an all-in rate of 6.39%.

Other Covenants and Events of Default. The credit facility contains restrictive covenants on customary matters. Certain covenants are less restrictive at any time that our leverage ratio is below 6.0x. At any time that our leverage ratio is below 6.0x, acquisitions, investments, dividends and distributions generally are permitted except where they would result in a breach of the financial covenants, calculated on a pro forma basis. Additionally, the credit facility’s restrictions on the incurrence of debt incorporate the same financial covenant as set forth in our senior notes indenture.

57

Table of Contents

The credit facility also includes usual and customary events of default for facilities of this nature, and provides that, upon the occurrence and continuance of an event of default, payment of all amounts due under the credit facility 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 due under the credit facility automatically will become due and payable and the lenders’ commitments automatically will terminate.

Mortgage Debt, Including Unconsolidated Joint Ventures. At December 31, 2023, we own one consolidated property that is encumbered by mortgage debt. All of our mortgage debt is recourse solely to specific assets, except in instances of fraud, misapplication of funds and other customary recourse provisions. As of December 31, 2023, our mortgage debt has an interest rate of 4.67% and matures in 2027, with principal and interest payments due monthly. We also own non-controlling interests in joint ventures that are not consolidated and that are accounted for under the equity method. The portion of the mortgage and other debt of these joint ventures attributable to us, based on our ownership percentage thereof, was $208 million at December 31, 2023. The debt of our unconsolidated joint ventures is non-recourse to us.

Distributions/Dividends. Host Inc.’s policy on common dividends generally is to distribute, over time, at least 100% of its taxable income, which primarily is dependent on our results of operations, as well as on tax gains and losses on hotel sales. For the fourth quarter of 2023, Host Inc. paid a regular quarterly cash dividend of $0.20 per share and a special dividend of $0.25 per share on its common stock on January 16, 2024 to stockholders of record as of December 29, 2023. Any future dividend will be subject to approval by Host Inc.’s Board of Directors.

Funds used by Host Inc. to pay dividends are provided by distributions from Host L.P. As of December 31, 2023, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining common OP units are owned by various unaffiliated limited partners. Each OP unit may be offered for redemption by the limited partners for cash or, at the election of Host Inc., Host Inc. common stock based on the then current conversion ratio. The current conversion ratio is 1.021494 shares of Host Inc. common stock for each OP unit.

Investors should consider the 1% non-controlling position of Host L.P. OP units when analyzing dividend payments by Host Inc. to its stockholders, as these holders of OP units share, on a pro rata basis, in amounts being distributed by Host L.P. to holders of its OP units. 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 common OP unitholders.

Counterparty Credit Risk. We are subject to counterparty credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance of counterparties to deliver contracted commodities or services at the contracted price. We assess the ability of our counterparties to fulfill their obligations to determine the impact, if any, of counterparty bankruptcy or insolvency on our financial condition. We are exposed to credit risk with respect to cash held at various financial institutions and access to our credit facility. We believe our credit exposure in each of these cases is limited, as the credit risk is spread among a diversified group of investment grade financial institutions. We also have counter-party credit risk with respect to our outstanding note receivable, although upon event of a default of the notes, we would seek to enforce our rights against the collateral in accordance with the terms of the loan agreement.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amount 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 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, including those related to the impairment of long-lived assets, on an ongoing basis. We base our estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances. All our significant accounting policies are disclosed in the notes to our consolidated financial statements. For a detailed discussion of the critical accounting policy related to impairment testing on our property and equipment, which requires us to exercise our business judgment or make significant estimates, see “Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies”.

58

Table of Contents

Comparable Hotel Operating Statistics and Results

Effective January 1, 2023, we ceased presentation of All Owned Hotel results that was used while the COVID-19 pandemic disrupted operations, limiting the usefulness of year-over-year comparisons, and returned to a comparable hotel presentation for our hotel level results. We believe this provides investors with a better understanding of underlying growth trends for our current portfolio, without impact from properties that experienced closures due to renovations or property damage sustained.

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 gain on insurance settlements on our consolidated statements of operations. Business interruption insurance gains related to a hotel that was excluded from our comparable hotel set also will be excluded from the comparable hotel results.

Of the 77 hotels that we owned as of December 31, 2023, 75 have been classified as comparable hotels. The operating results of the following properties that we owned as of December 31, 2023 are excluded from comparable hotel results for these periods:

•Hyatt Regency Coconut Point Resort & Spa (business disruption due to Hurricane Ian beginning in September 2022, reopened in November 2022);

•The Ritz-Carlton, Naples (business disruption due to Hurricane Ian beginning in September 2022, reopened in July 2023); and

•Sales and marketing expenses related to the development and sale of condominium units on a development parcel adjacent to Four Seasons Resort Orlando at Walt Disney World® Resort.

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 are as follows: (i) EBITDA, EBITDAre and Adjusted EBITDAre as a measure of performance for Host Inc. and Host L.P., (ii) Funds From Operations (“FFO”) and FFO per diluted share (both NAREIT and Adjusted), as a measure of performance for Host Inc., and (iii) comparable hotel operating results, as a measure of performance for Host Inc. and Host L.P.

59

Table of Contents

We calculate EBITDAre and NAREIT FFO per diluted share in accordance with standards established by NAREIT, which may not be comparable to measures calculated by other companies that do not use the NAREIT definition of EBITDAre and FFO or do not calculate FFO per diluted share in accordance with NAREIT guidance. In addition, although EBITDAre and FFO per diluted share are useful measures when comparing our results to other REITs, they may not be helpful to investors when comparing us to non-REITs. We also calculate Adjusted FFO per diluted share and Adjusted EBITDAre, which measures are not in accordance with NAREIT guidance and may not be comparable to measures calculated by other REITs or by other companies. This information should not be considered as an alternative to net income, operating profit, cash from operations or any other operating performance measure calculated in accordance with GAAP. Cash expenditures for various long-term assets (such as renewal and replacement capital expenditures), interest expense (for EBITDA, EBITDAre, and Adjusted EBITDAre purposes only) severance expense related to significant property-level reconfiguration and other items have been, and will be, made and are not reflected in the EBITDA, EBITDAre, Adjusted EBITDAre, NAREIT FFO per diluted share and Adjusted FFO per diluted share presentations. 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 consolidated statements of operations and consolidated statements of cash flows include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures. Additionally, NAREIT FFO per diluted share, Adjusted FFO per diluted share, EBITDA, EBITDAre and Adjusted EBITDAre should not be considered as measures of our liquidity or indicative of funds available to fund our cash needs, including our ability to make cash distributions. In addition, NAREIT FFO per diluted share and Adjusted FFO per diluted share do not measure, and should not be used as measures of, amounts that accrue directly to stockholders’ benefit.

Similarly, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO per diluted share include adjustments for the pro rata share of our equity investments and NAREIT FFO and Adjusted FFO include adjustments for non-controlling partners in consolidated partnerships. Our equity investments consist of interests ranging from 11% to 67% in eight domestic and international partnerships that own a total of 35 properties and a vacation ownership development. Due to the voting rights of the outside owners, we do not control and, therefore, do not consolidate these entities. The non-controlling partners in consolidated partnerships primarily consist of the approximate 1% interest in Host L.P. held by unaffiliated limited partners and a 15% interest held by an unaffiliated limited partner in one hotel for which we do control the entity and, therefore, consolidate its operations. These pro rata results for NAREIT FFO and Adjusted FFO per diluted share, EBITDAre and Adjusted EBITDAre are calculated as set forth below. Readers should be cautioned that the pro rata results presented in these measures for consolidated partnerships (for NAREIT FFO and Adjusted FFO per diluted share) and equity investments may not accurately depict the legal and economic consequences of our investments in these entities. The following discussion defines these terms and presents why we believe they are useful measures of our performance.

EBITDA, EBITDAre and Adjusted EBITDAre

EBITDA

Earnings before Interest Expense, Income Taxes, Depreciation and Amortization (“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.

60

Table of Contents

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 – We exclude the effect of property insurance gains reflected in our 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.

•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 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.

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.

61

Table of Contents

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)

[[GREPCENT_TABLE]]
[["","Year ended December 31,"],["","2023","","2022"],["Net income","$","752","","","$","643"],["Interest expense","191","","","156"],["Depreciation and amortization","697","","","664"],["Income taxes","36","","","26"],["EBITDA","1,676","","","1,489"],["Gain on dispositions\u207d\u00b9\u207e","(70)","","","(16)"],["Equity investment adjustments:"],["Equity in earnings of affiliates","(6)","","","(3)"],["Pro rata EBITDAre of equity investments\u207d\u00b2\u207e","32","","","34"],["EBITDAre","1,632","","","1,504"],["Adjustments to EBITDAre:"],["Gain on property insurance settlement","(3)","","","(6)"],["Adjusted EBITDAre","$","1,629","","","$","1,498"]]
[[/GREPCENT_TABLE]]

___________

(1)Reflects the sale of one hotel in 2023 and four hotels in 2022.

(2)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 believe that NAREIT FFO per diluted share is a useful supplemental measure of our operating performance and that the presentation of NAREIT FFO per diluted share, when combined with the primary GAAP presentation of earnings per share, provides beneficial information to investors. By excluding the effect of real estate depreciation, amortization, impairment expense and gains and losses from sales of depreciable real estate, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, we believe such measures can facilitate comparisons of operating performance between periods and with other REITs, even though NAREIT FFO per diluted share does not represent an amount that accrues directly to holders of our common stock. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. As noted by NAREIT in its Funds From Operations White Paper – 2018 Restatement, the primary purpose for including FFO as a supplemental measure of operating performance of a REIT is to address the artificial nature of historical cost depreciation and amortization of real estate and real estate-related assets mandated by GAAP. For these reasons, NAREIT adopted the FFO metric in order to promote a uniform industry-wide measure of REIT operating performance.

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

62

Table of Contents

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 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.

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 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.

63

Table of Contents

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 (loss), 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)

[[GREPCENT_TABLE]]
[["","Year ended December 31,"],["","2023","","2022"],["Net income","$","752","","","$","643"],["Less: Net income attributable to non-controlling interests","(12)","","","(10)"],["Net income attributable to Host Inc","740","","","633"],["Adjustments:"],["Gain on dispositions(1)","(70)","","","(16)"],["Gain on property insurance settlement","(3)","","","(6)"],["Depreciation and amortization","695","","","663"],["Equity investment adjustments:"],["Equity in earnings of affiliates","(6)","","","(3)"],["Pro rata FFO of equity investments\u207d\u00b2\u207e","20","","","25"],["Consolidated partnership adjustments:"],["FFO adjustment for non-controlling partnerships","(1)","","","(1)"],["FFO adjustments for non-controlling interests of Host L.P.","(9)","","","(9)"],["NAREIT FFO","1,366","","","1,286"],["Adjustments to NAREIT FFO:"],["Loss on debt extinguishment","4","","","\u2014"],["Adjusted FFO","$","1,370","","","$","1,286"],["For calculation on a per share basis:\u207d\u00b3\u207e"],["Diluted weighted average shares outstanding - EPS, NAREIT FFO and Adjusted FFO","712.8","","","717.5"],["Diluted earnings per common share","$","1.04","","","$","0.88"],["NAREIT FFO per diluted share","$","1.92","","","$","1.79"],["Adjusted FFO per diluted share","$","1.92","","","$","1.79"]]
[[/GREPCENT_TABLE]]

\__________

(1-2)Refer to the corresponding footnote on the Reconciliation of Net Income to EBITDA, EBITDAre and Adjusted EBITDAre for Host Inc. and Host L.P.

(3)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

64

Table of Contents

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 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.

65

Table of Contents

The following table presents certain operating results and statistics for our comparable hotel results for the periods presented herein:

Comparable Hotel Results for Host Inc. and Host L.P.

(in millions, except hotel statistics)

[[GREPCENT_TABLE]]
[["","Year ended December 31,"],["","2023","","2022"],["Number of hotels","75","","75"],["Number of rooms","41,031","","41,031"],["Change in comparable hotel Total RevPAR","8.3","%","","\u2014"],["Change in comparable hotel RevPAR","8.1","%","","\u2014"],["Operating profit margin\u207d\u00b9\u207e","15.6","%","","15.8","%"],["Comparable hotel EBITDA margin\u207d\u00b9\u207e","30.1","%","","31.8","%"],["Food and beverage profit margin\u207d\u00b9\u207e","34.1","%","","34.6","%"],["Comparable hotel food and beverage profit margin\u207d\u00b9\u207e","34.5","%","","35.0","%"],["Net income","$","752","","","$","643"],["Depreciation and amortization","697","","","664"],["Interest expense","191","","","156"],["Provision for income taxes","36","","","26"],["Gain on sale of property and corporate level income/expense","(23)","","","51"],["Severance expense at hotel properties","\u2014","","","2"],["Property transaction adjustments\u207d\u00b2\u207e","(3)","","","23"],["Non-comparable hotel results, net\u207d\u00b3\u207e","(93)","","","(45)"],["Comparable hotel EBITDA","$","1,557","","","$","1,520"]]
[[/GREPCENT_TABLE]]

___________

(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 consolidated statements of operations. Comparable hotel margins are calculated using amounts presented in the following tables, which include reconciliations to the applicable GAAP results:

66

Table of Contents

[[GREPCENT_TABLE]]
[["","Year ended December 31, 2023","","Year ended December 31, 2022"],["","","","Adjustments","","","","","","Adjustments"],["","GAAP Results","","Property transaction adjustments\u207d\u00b2\u207e","","Non-comparable hotel results, net \u207d\u00b3\u207e","","Depreciation and corporate level items","","Comparable hotel Results","","GAAP Results","","Severance at hotel properties","","Property transaction adjustments\u207d\u00b2\u207e","","Non-comparable hotel results, net \u207d\u00b3\u207e","","Depreciation and corporate level items","","Comparable hotel Results"],["Revenues"],["Room","$","3,244","","","$","(5)","","","$","(64)","","","$","\u2014","","","$","3,175","","","$","3,014","","","$","\u2014","","","$","\u2014","","","$","(76)","","","$","\u2014","","","$","2,938"],["Food and beverage","1,582","","","(2)","","","(58)","","","\u2014","","","1,522","","","1,418","","","\u2014","","","3","","","(54)","","","\u2014","","","1,367"],["Other","485","","","\u2014","","","(13)","","","\u2014","","","472","","","475","","","\u2014","","","9","","","(16)","","","\u2014","","","468"],["Total revenues","5,311","","","(7)","","","(135)","","","\u2014","","","5,169","","","4,907","","","\u2014","","","12","","","(146)","","","\u2014","","","4,773"],["Expenses"],["Room","787","","","(1)","","","(16)","","","\u2014","","","770","","","727","","","\u2014","","","(10)","","","(14)","","","\u2014","","","703"],["Food and beverage","1,042","","","(1)","","","(43)","","","\u2014","","","998","","","928","","","\u2014","","","(1)","","","(38)","","","\u2014","","","889"],["Other","1,912","","","(2)","","","(58)","","","\u2014","","","1,852","","","1,723","","","(2)","","","\u2014","","","(49)","","","\u2014","","","1,672"],["Depreciation and amortization","697","","","\u2014","","","\u2014","","","(697)","","","\u2014","","","664","","","\u2014","","","\u2014","","","\u2014","","","(664)","","","\u2014"],["Corporate and other expenses","132","","","\u2014","","","\u2014","","","(132)","","","\u2014","","","107","","","\u2014","","","\u2014","","","\u2014","","","(107)","","","\u2014"],["Gain on insurance settlements","(86)","","","\u2014","","","75","","","3","","","(8)","","","(17)","","","\u2014","","","\u2014","","","\u2014","","","6","","","(11)"],["Total expenses","4,484","","","(4)","","","(42)","","","(826)","","","3,612","","","4,132","","","(2)","","","(11)","","","(101)","","","(765)","","","3,253"],["Operating Profit - Comparable hotel EBITDA","$","827","","","$","(3)","","","$","(93)","","","$","826","","","$","1,557","","","$","775","","","$","2","","","$","23","","","$","(45)","","","$","765","","","$","1,520"]]
[[/GREPCENT_TABLE]]

(2)     Property transaction adjustments represent the following items: (i) the elimination of results of operations of hotels sold or held-for-sale as of December 31, 2023, 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 December 31, 2023.

(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 consolidated statements of operations as continuing operations, and (ii) gains on business interruption proceeds relating to events that occurred while the hotels were classified as non-comparable.