Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this report. Host Inc. operates as a self-managed and self-administered REIT. Host Inc. is the sole general partner of Host L.P. and holds approximately 99% of its partnership interests. Host L.P. is a limited partnership operating through an umbrella partnership structure. The remaining common OP units are owned by various unaffiliated limited partners.

Forward-Looking Statements

In this quarterly report on Form 10-Q, we make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “expect,” “may,” “intend,” “predict,” “project,” “plan,” “will,” “estimate” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are based on management’s current expectations and assumptions and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results to differ materially from those anticipated at the time the forward-looking statements are made.

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

the duration and scope of the COVID-19 pandemic and its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting travel; the ability of our hotel managers to operate hotels in a way that facilitates social distancing, implement enhanced cleaning protocols and other COVID-19 pandemic mitigation practices; and general economic uncertainty in U.S. markets where we own hotels and the potential for low levels of economic growth in these markets;

the effect on lodging demand of (i) changes in national and local economic and business conditions, including concerns about U.S. economic growth, an economic recession in the United States or globally, the current high level of inflation, rising interest rates, global economic prospects, consumer confidence and the value of the U.S. dollar, and (ii) factors that may shape public perception of travel to a particular location, such as natural disasters, weather events (including the impact of Hurricane Ian), pandemics and outbreaks of contagious diseases, such as the COVID-19 pandemic, and the occurrence or potential occurrence of terrorist attacks, all of which will affect occupancy rates at our hotels and the demand for hotel products and services;

the impact of geopolitical developments outside the United States, such as conflicts in Eastern Europe and the Middle East, the pace of economic growth in Europe, the effects of the United Kingdom’s withdrawal from the European Union, or trade tensions and tariffs between the United States and its trading partners such as China, all of which could affect global travel and lodging demand within the United States;

volatility in global financial and credit markets, and the impact of budget deficits and pending and future U.S. governmental action to address such deficits through reductions in spending and similar austerity measures, as well as the impact of potential U.S. government shutdowns, which could materially adversely affect U.S. and global economic conditions, business activity, credit availability, borrowing costs, and lodging demand;

operating risks associated with the hotel business, including the effect of labor stoppages or strikes, increasing operating or labor costs or changes in workplace rules that affect labor costs, and risks relating to the response to the COVID-19 pandemic by our hotel managers, such as increased hotel costs for cleaning protocols and severance and furlough payments to hotel employees;

the effect of rating agency downgrades of our debt securities or on the cost and availability of new debt financings;

the reduction in our operating flexibility and the limitation on our ability to incur debt, pay dividends and make distributions resulting from restrictive covenants in our debt agreements and other risks associated with the amount of our indebtedness or related to restrictive covenants in our debt agreements, including the risk that a default could occur as a result of a decline in operations due to the COVID-19 pandemic;

our ability to maintain our hotels in a first-class manner, including meeting capital expenditures requirements, and the effect of renovations, including temporary closures, on our hotel occupancy and financial results;

the ability of our hotels to compete effectively against other lodging businesses in the highly competitive markets in which we operate in terms of access, location, quality of accommodations and room rate structures;

our ability to acquire or develop additional hotels and the risk that potential acquisitions or developments may not perform in accordance with our expectations;

the ability to complete hotel renovations on schedule and on, or under, budget and the potential for increased costs and construction delays due to shortages of supplies as a result of supply chain disruptions;

relationships with property managers and joint venture partners and our ability to realize the expected benefits of our joint ventures and other strategic relationships;

risks associated with a single manager, Marriott International, managing a significant percentage of our hotels;

changes in the desirability of the geographic regions of the hotels in our portfolio or in the travel patterns of hotel customers;

the ability of third-party internet and other travel intermediaries to attract and retain customers;

our ability to recover fully under our existing insurance policies for terrorist acts and natural disasters and our ability to maintain adequate or full replacement cost “all-risk” property insurance policies on our hotels on commercially reasonable terms;

the effect of a data breach or significant disruption of hotel operator information technology networks as a result of cyber attacks;

the effects of tax legislative action and other changes in laws and regulations, or the interpretation thereof, including the need for compliance with new environmental and safety requirements;

the ability of Host Inc. and each of the REITs acquired, established or to be established by Host Inc. to continue to satisfy complex rules in order to qualify as REITs for U.S. federal income tax purposes and Host Inc.’s and Host L.P.’s ability and the ability of our subsidiaries, and similar entities to be acquired or established by us, to operate effectively within the limitations imposed by these rules; and

risks associated with our ability to execute our dividend policy, including factors such as the need to preserve cash and financial flexibility in response to the COVID-19 pandemic, investment activity, operating results and the economic outlook, any or all of which may influence the decision of our board of directors as to whether to pay future dividends at levels previously disclosed or to use available cash to pay special dividends.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions, including those risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2021 and in other filings with the Securities and Exchange Commission (“SEC”). Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material.

Operating Results and Outlook

Operating Results

The following table reflects certain line items from our unaudited condensed consolidated statements of operations and significant operating statistics (in millions, except per share and hotel statistics):

Historical Income Statement Data:
		Quarter ended September 30,												Year-to-date ended September 30,
		2022				2021				Change				2022				2021				Change
Total revenues		$	1,189			$	844				40.9	%		$	3,644			$	1,892				92.6	%
Net income (loss)			116				(120	)		N/M					494				(334	)		N/M
Operating profit (loss)			148				(95	)		N/M					597				(329	)		N/M
Operating profit (loss) margin under GAAP			12.4	%			(11.3	)%		N/M					16.4	%			(17.4	)%		N/M
EBITDAre⁽¹⁾		$	328			$	179				83.2	%		$	1,140			$	295				286.4	%
Adjusted EBITDAre⁽¹⁾			328				177				85.3	%			1,134				290				291.0	%
Basic and diluted earnings (loss) per common share			0.16				(0.17	)		N/M					0.68				(0.47	)		N/M
NAREIT FFO per diluted share⁽¹⁾			0.38				0.20				90.0	%			1.35				0.33				309.1	%
Adjusted FFO per diluted share⁽¹⁾			0.38				0.20				90.0	%			1.35				0.33				309.1	%

All Owned Hotel Data:
		Quarter ended September 30,												Year-to-date ended September 30,
		2022				2021				Change				2022				2021				Change
All Owned Hotel revenues ⁽¹⁾		$	1,187			$	798				48.7	%		$	3,609			$	1,884				91.6	%
All Owned Hotel EBITDA ⁽¹⁾			341				198				72.2	%			1,179				398				196.2	%
All Owned Hotel EBITDA margin ⁽¹⁾			28.7	%			24.9	%			380 bps				32.7	%			21.1	%			1,160 bps
Change in All Owned Hotel Total RevPAR ⁽¹⁾			48.1	%											90.5	%
Change in All Owned Hotel RevPAR ⁽¹⁾			42.0	%											81.5	%

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(1)

EBITDAre, Adjusted EBITDAre, NAREIT FFO per diluted share and Adjusted FFO per diluted share and All Owned 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. All Owned Hotel results exclude the operations of hotels sold or held-for-sale as of September 30, 2022. See “Non-GAAP Financial Measures” and "All Owned 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, All Owned Hotel results and statistics include adjustments for dispositions and acquisitions. See Hotel RevPAR Overview for results of the portfolio based on our ownership period, without these adjustments.

N/M = Not meaningful.

Operations

Total revenues increased $345 million, or 40.9%, and $1,752 million, or 92.6%, as compared to the third quarter of 2021 and year-to-date 2021, respectively, due to strong leisure demand at our resort hotels and the continued recovery of business transient and group travel. All Owned Hotel RevPAR and Total RevPAR for the third quarter increased 42.0% and 48.1%, respectively, compared to the third quarter of 2021 due to both rate and occupancy growth. Year-to-date, All Owned Hotel RevPAR and Total RevPAR has increased 81.5% and 90.5%, respectively, compared to 2021. All Owned Hotel Total RevPAR for the quarter and year-to-date 2022 benefited from strong F&B growth, which exceeded 2019 levels in the third quarter for the first time since the onset of the pandemic.

Operations at most of our hotels in Florida were affected by Hurricane Ian in September 2022. Due to evacuation mandates and loss of commercial power, we estimate that RevPAR was negatively impacted by approximately 40 basis points during the third quarter.

Leisure demand continues to drive strong results at resort properties and, at the same time, the recovery at our urban properties continued in the third quarter. As a result, Total RevPAR in the quarter for all markets exceeded 2021 levels and the portfolio as a whole exceeded the third quarter 2019 pre-pandemic levels. All Owned Hotel Total RevPAR in our Jacksonville, Orlando and Phoenix markets increased 36.9%, 35.6% and 29.4%, respectively, compared to 2019, due to continued strength at our leisure properties. While our hotels in San Francisco/San Jose and Washington, D.C., two of our larger markets by room count, experienced

All Owned Hotel Total RevPAR declines of 19.1% and 12.1%, respectively, compared to third quarter 2019, this is an improvement from declines of 26.5% and 15.0%, respectively, in the second quarter compared to 2019. All Owned Hotel Total RevPAR in our San Diego market, which primarily consists of convention-type hotels, increased 18.2% compared to the third quarter of 2019 driven by improvements in group business during the quarter. All Owned Hotel Total RevPAR performance was lowest for our Boston market, with a decline of 26.2% compared to 2019.

Our third quarter 2022 results improved when compared to 2021 as follows:

Net income increased $236 million for the quarter and $828 million year-to-date;

Diluted earnings per share increased $0.33 for the quarter and $1.15 year-to-date;

Adjusted EBITDAre increased $151 million for the quarter and $844 million year-to-date; and

Adjusted FFO per diluted share increased $0.18 for the quarter and $1.02 year-to-date.

For the third quarter of 2022, operating profit margin under GAAP was 12.4% and All Owned Hotel EBITDA margin was 28.7%, both exceeding the third quarter 2019 pre-pandemic levels. Along with the strong improvements in rates, our hotel margins also have benefited from the implementation of portfolio-wide cost reductions, resulting in a reduction of All Owned Hotel operating costs across the portfolio by approximately 7% year-to-date 2022, compared to year-to-date 2019. However, for the third quarter, operating costs exceeded 2019 levels for the first time since the start of the pandemic as hotels continue to transition to more normalized levels of operations. Specifically, in the third quarter, hotels were able to increase staffing to levels more in-line with expectations based on current hotel demand.

Outlook

We have experienced a significant improvement in revenues and earnings through the third quarter of 2022. However, current macroeconomic headwinds and concerns surrounding the potential for an economic slowdown are now competing with an accelerating lodging recovery. Further improvement in operations will be dependent on our ability to maintain high-rated business in our resort markets, the continued improvement of group, business transient and international inbound travel. Blue Chip Economic Indicators consensus currently estimates an increase in real U.S. GDP of 1.6% for 2022, while business investment is anticipated to increase 3.7%. However, persistently high inflation, including energy prices, and geopolitical uncertainty have led to increased risks during the year and elevated concerns surrounding the Federal Reserve's ability to execute a soft landing for economic growth. The range of potential outcomes on the economy and the lodging industry specifically remains exceptionally wide, reflecting varying analyst assumptions surrounding the impact of inflation, supply chain disruptions, labor shortages in key industries, geopolitical conflicts, interest rate expectations and the unpredictability of new COVID-19 variants.

Hotel supply growth is anticipated to remain below the long-term historical average in 2022, as supply chain challenges have resulted in project delays across the U.S. We anticipate that many of these projects will continue to be delayed or cancelled, while the new project pipeline will remain suppressed until supply chain issues and other macroeconomic concerns abate. While the pandemic had an outsized impact on our industry, particularly in luxury and upper upscale hotels in top U.S. markets, where a majority of our hotels are located, leisure travel continues to outperform expectations due to pent-up demand, high personal savings and waning virus fears. We also have seen a significant acceleration in group and business transient demand to date in 2022, leading to improving trends in our urban markets.

Despite strong results through the first three quarters of the year, significant uncertainties remain related to broader macroeconomic trends, recession and inflation concerns and the impact of new virus variants. We believe that the continued strength of the lodging industry is highly dependent on the broader overall economy, consumer confidence and the continued improvement of corporate, group and international travel now that leisure demand is exceeding pre-pandemic levels in many markets. Accordingly, we believe that operations in specific markets and asset types will continue to be uneven.

Operations at the majority of our hotels in Florida were affected by Hurricane Ian in September 2022 with the most significant damage sustained during the storm occurring at The Ritz Carlton, Naples and Hyatt Regency Coconut Point Resort and Spa. Due to evacuation mandates and/or loss of commercial power, five of our properties were closed for a limited period of time; however, three have since fully reopened. We are still evaluating the complete property and business interruption impacts of Hurricane Ian. We expect the Hyatt Regency Coconut Point Resort and Spa to reopen to guests in mid-November, as a phased reopening, with the waterpark reopening during the second quarter of 2023, while The Ritz Carlton, Naples is expected to remain closed for the remainder of 2022 and into 2023. As a result, Hurricane Ian will continue to impact our fourth quarter 2022 operations as well as our 2023 operations.

Based on these trends, we expect full year RevPAR of between $193 and $195, representing an increase from 2021 of 63.7% to 65.4%, respectively, and a decrease from 2019 of 3.75% to 2.75%, respectively. We anticipate that the impact of Hurricane Ian will reduce full year RevPAR by 70 basis points.

As noted above, the current outlook for the lodging industry remains highly uncertain. 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.

Strategic Initiatives

Dispositions. During the third quarter, we sold the Chicago Marriott Suites Downers Grove for $16 million, including $2 million of FF&E funds retained by us.

Acquisitions. Subsequent to quarter end, we acquired the 125-room Four Seasons Resort and Residences Jackson Hole for $315 million. The resort also features an additional 44 private residences, the owners of which may participate in a rental program through the resort.

Capital Projects. During the first three quarters of 2022, we spent approximately $240 million on ROI capital projects and $117 million on renewal and replacement projects. For full year 2022, we expect total capital expenditures of $500 million to $575 million. This total amount consists of ROI projects of approximately $320 million to $355 million and renewal and replacement expenditures of $180 million to $220 million. ROI projects include approximately $90 million to $115 million for the Marriott transformational capital program discussed below.

In 2022, we expect to complete renovations to 4,000 guestrooms, approximately 33,000 square feet of meeting space and approximately 81,000 square feet of public space.

We have made substantial progress on 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 operating profit guarantees of $83 million, before reductions for incentive management fees, to offset expected business disruption.

Approximately 94% of the total estimated costs of the program have been spent as of September 30, 2022. Of the 16 hotels included in the program, we have completed 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; and projects at The Ritz-Carlton Amelia Island, New York Marriott Marquis and Orlando World Center Marriott in 2021. In 2022, we completed projects at the Houston Marriott Medical Center and Marina del Rey Marriott. We also expect to substantially complete projects at Boston Marriott Copley Place, JW Marriott Houston by the Galleria and Marriott Marquis San Diego Marina during 2022, with the Washington Marriott at Metro Center expected to be completed in the first half of 2023.

Results of Operations

The following table reflects certain line items from our unaudited condensed consolidated statements of operations (in millions, except percentages):

		Quarter ended September 30,												Year-to-date ended September 30,
		2022				2021				Change				2022				2021				Change
Total revenues		$	1,189			$	844				40.9	%		$	3,644			$	1,892				92.6	%
Operating costs and expenses:
Property-level costs ⁽¹⁾			1,022				920				11.1				2,987				2,153				38.7
Corporate and other expenses			29				24				20.8				77				73				5.5
Gain on insurance and business interruption settlements			10				5				100.0				17				5				240.0
Operating profit (loss)			148				(95	)		N/M					597				(329	)		N/M
Interest expense			40				43				(7.0	)			113				128				(11.7	)
Other gains			5				2				150.0				19				4				375.0
Benefit (provision) for income taxes			(6	)			13			N/M					(29	)			81			N/M
Host Inc.:
Net income (loss) attributable to non-controlling interests			2				(1	)		N/M					8				(3	)		N/M
Net income (loss) attributable to Host Inc.			114				(119	)		N/M					486				(331	)		N/M
Host L.P.:
Net income attributable to non-controlling interests			1				1			—					1				1			—
Net income (loss) attributable to Host L.P.			115				(121	)		N/M					493				(335	)		N/M

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(1) Amount represents total operating costs and expenses from our unaudited condensed consolidated statements of operations, less corporate and other expenses and gain on insurance and business interruption settlements.

N/M=Not meaningful.

Statement of Operations Results and Trends

Hotel Sales Overview

The following table presents total revenues in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):

		Quarter ended September 30,												Year-to-date ended September 30,
		2022				2021				Change				2022				2021				Change
Revenues:
Rooms		$	746			$	557				33.9	%		$	2,251			$	1,237				82.0	%
Food and beverage			330				191				72.8				1,032				405				154.8
Other			113				96				17.7				361				250				44.4
Total revenues		$	1,189			$	844				40.9			$	3,644			$	1,892				92.6

Operations have improved significantly in the third quarter of 2022 compared to 2021 due to the ongoing recovery of the lodging industry from the COVID-19 pandemic. However, with operations now normalizing from the effects of the pandemic, we are no longer experiencing the quarter-to-quarter sequential increases in results that we experienced in 2021 and the first two quarters of 2022. Third quarter results were impacted by typical seasonality and shifting business and market mix which has traditionally made our third quarter results the weakest quarter of the year by comparison. In addition to improved operations, acquisitions that occurred in 2021 contributed $45 million and $242 million to the growth in revenues in the third quarter and year-to-date 2022, respectively, compared to the negative impact on revenues resulting from dispositions of $66 million and $87 million in the third quarter and year-to-date 2022, respectively.

Rooms. Total rooms revenues increased $189 million, or 33.9%, and $1,014 million, or 82.0%, for the third quarter and year-to-date, respectively, due to increases in average room rates and occupancy compared to 2021. Average room rates for our portfolio have also exceeded pre-pandemic levels, while occupancy continues to lag 2019.

Food and beverage. Total F&B revenues increased $139 million, or 72.8%, and $627 million, or 154.8%, for the quarter and year-to-date, respectively, exceeding 2019 levels in the third quarter for the first time since the onset of the pandemic. The improvements are due to strong outlet, banquet and audio-visual revenues, reflecting the return of group room nights.

Other revenues. Total other revenues increased $17 million, or 17.7%, and $111 million, or 44.4%, for the quarter and year-to-date, respectively, which was driven by an increase in attrition and cancellation fees, as well as strong golf and spa revenues.

Property-level Operating Expenses

The following table presents property-level operating expenses in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):

		Quarter ended September 30,												Year-to-date ended September 30,
		2022				2021				Change				2022				2021				Change
Expenses:
Rooms		$	190			$	150				26.7	%		$	539			$	324				66.4	%
Food and beverage			230				146				57.5				675				313				115.7
Other departmental and support expenses			300				252				19.0				873				621				40.6
Management fees			48				27				77.8				150				59				154.2
Other property-level expenses			90				82				9.8				252				239				5.4
Depreciation and amortization			164				263				(37.6	)			498				597				(16.6	)
Total property-level operating expenses		$	1,022			$	920				11.1			$	2,987			$	2,153				38.7

Our operating costs and expenses, which have 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. During the third quarter of 2022, these expenses increased 45% compared to 2021, reflecting the increase in hiring as operations have recovered.

Early in 2022, hiring was temporarily paused in many areas due to the Omicron variant, as well as the seasonality of the industry. While hiring pace improved during the first half of the year, the significant acceleration in demand further challenged the ability of our hotel managers to increase hotel staffing commensurate with the increase in demand. However, during the third quarter our managers were able to continue improvements in hiring pace, and managers at many of our hotels are now operating at desired staffing levels as of the end of the third quarter. In aggregate, wage and benefit rate inflation is expected to be in the 4% to 5% range in 2022.

Other property-level expenses consist of property taxes, the amounts and structure of which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, all of which do not necessarily increase or decrease based on similar changes in revenues at our hotels.

The increase in expenses for the third quarter of 2022 compared to 2021 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, as follows:

Rooms. Rooms expenses increased $40 million, or 26.7%, and $215 million, or 66.4%, for the quarter and year-to-date, respectively, reflecting an increase in staffing commensurate with the improvements in occupancy, while commission costs remain below pre-pandemic levels.

Food and beverage. F&B expenses increased $84 million, or 57.5%, and $362 million, or 115.7%, for the quarter and year-to-date, respectively. Overall, F&B costs as a percentage of revenues declined, benefiting from improved banquet revenues and ongoing productivity improvement.

Other departmental and support expenses. Other departmental and support expenses increased $48 million, or 19.0%, and $252 million, or 40.6%, for the quarter and year-to-date, respectively, due primarily to improved operations.

Management fees. Base management fees, which generally are calculated as a percentage of total revenues, increased $9 million, or 36.0%, and $48 million, or 87.3%, for the quarter and year-to-date, respectively. 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 $12 million and $43 million for the quarter and year-to-date, respectively, due primarily to the improved operations at our resort properties.

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 $8 million, or 9.8%, and $13 million, or 5.4%, for the quarter and year-to-date, respectively, due to increases in sales and general excise taxes at our hotels, property insurance premiums and rent on a portion of our ground leases that are based on a percentage of sales. The increases were partially offset by a decrease in property taxes. Other property-level expenses also were partially offset by the receipt of operating profit guarantees received from Marriott under the transformational capital program in both 2022 and 2021.

Depreciation and amortization. Depreciation and amortization decreased $99 million, or 37.6%, for the quarter and $99 million, or 16.6%, for the year-to-date, primarily due to impairment expense of $92 million recorded in the third quarter of 2021.

Other Income and Expense

Corporate and other expenses. The following table details our corporate and other expenses for the quarter and year-to-date (in millions):

		Quarter ended September 30,								Year-to-date ended September 30,
		2022				2021				2022				2021
General and administrative costs		$	20			$	20			$	58			$	60
Non-cash stock-based compensation expense			9				4				19				13
Total		$	29			$	24			$	77			$	73

Interest expense. Interest expense decreased for the quarter due to the repayment of the revolver portion of the credit facility, partially offset by an increase in interest rates on our floating rate debt. The following table details our interest expense for the quarter and year-to-date (in millions):

		Quarter ended September 30,								Year-to-date ended September 30,
		2022				2021				2022				2021
Cash interest expense ⁽¹⁾		$	37			$	41			$	105			$	121
Non-cash interest expense			3				2				8				7
Total interest expense		$	40			$	43			$	113			$	128

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(1)

Including the change in accrued interest, total cash interest paid was $31 million and $32 million for the quarters ended September 30, 2022 and 2021, respectively, and $100 million and $115 million for year-to-date 2022 and 2021, respectively.

Other gains. Other gains increased $3 million and $15 million for the quarter and year-to-date, respectively, reflecting the sale of Chicago Marriott Suites Downers Grove in the third quarter, and the sale of the Sheraton Boston Hotel in the first quarter of 2022.

Equity in earnings of affiliates. Equity in earnings of affiliates decreased $3 million for the quarter and $33 million year-to-date, primarily due to unrealized losses on our investment in Fifth Wall Ventures, L.P. in 2022 compared to unrealized gains in 2021, partially offset by improved operations at our non-consolidated properties.

Benefit (provision) for income taxes. We lease substantially all our properties to consolidated subsidiaries designated as taxable REIT subsidiaries (“TRS”) for U.S. federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations and the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit. For the third quarter and year-to-date, we recorded an income tax provision of $6 million and $29 million, respectively, due primarily to the profitability of hotel operations retained by the TRS.

Hotel RevPAR Overview

To facilitate a quarter-to-quarter comparison of our operations, we typically present certain operating statistics for the periods included in this presentation on a comparable hotel basis. However, due to the COVID-19 pandemic and its effects on operations, there is little comparability between periods. For this reason, we are revising our operating statistics presentation to instead present All Owned Hotel operating results. See “All Owned Hotel Operating Statistics and Results” for a complete description of our methodology. We also include, following the All Owned Hotels results, the same operating statistics presentation on an actual basis, which includes results for our portfolio for the time period of our ownership, including dispositions through their date of disposal and acquisitions beginning as of the date of acquisition. Lastly, we discuss our Hotel RevPAR results by geographic location and mix of business (i.e., transient, group, or contract).

Hotel Operating Data by Location

The following tables set forth performance information for our hotels by geographic location for the quarter and year-to-date ended September 30, 2022 compared to 2021 and to 2019, respectively, to provide a comparison of hotel statistics in the current period to last year as well as to pre-pandemic levels:

All Owned Hotel Results by Location Compared to 2021

	As of September 30, 2022						Quarter ended September 30, 2022												Quarter ended September 30, 2021
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			2,007		$	565.30			73.6	%	$	416.12		$	643.06		$	514.34			82.8	%	$	425.86		$	635.28			(2.3	)%		1.2	%
Miami		2			1,033			457.43			50.2			229.66			427.55			424.80			53.9			229.17			390.19			0.2			9.6
Jacksonville		1			446			487.53			67.0			326.67			707.75			465.60			68.7			319.90			683.35			2.1			3.6
Florida Gulf Coast		5			1,850			330.56			53.9			178.01			340.62			314.16			45.2			141.93			286.62			25.4			18.8
Orlando		2			2,448			327.78			61.4			201.23			427.58			332.90			37.4			124.35			228.19			61.8			87.4
Phoenix		4			1,822			251.77			58.1			146.25			372.05			245.88			57.7			141.92			321.83			3.0			15.6
Los Angeles/ Orange County		3			1,067			303.74			86.4			262.42			372.72			263.40			72.4			190.80			263.83			37.5			41.3
New York		2			2,486			309.77			84.3			260.99			351.90			238.23			45.3			107.97			138.91			141.7			153.3
San Diego		3			3,288			292.38			85.4			249.83			440.67			247.61			72.1			178.55			281.14			39.9			56.7
Austin		2			767			233.32			68.3			159.46			289.77			210.96			58.1			122.67			207.76			30.0			39.5
Philadelphia		2			810			221.65			85.9			190.48			286.56			191.85			79.1			151.74			223.07			25.5			28.5
Washington, D.C. (CBD)		5			3,238			237.56			65.7			156.01			223.72			185.06			37.1			68.65			96.94			127.3			130.8
Chicago		3			1,562			263.27			79.3			208.86			286.41			200.33			63.2			126.61			159.82			65.0			79.2
Seattle		2			1,315			264.88			81.9			216.97			274.62			202.49			53.5			108.25			130.03			100.4			111.2
San Francisco/ San Jose		6			4,162			244.45			71.3			174.35			249.76			165.10			50.0			82.54			105.04			111.2			137.8
Boston		2			1,495			263.46			63.8			167.99			223.00			202.75			60.3			122.31			149.10			37.3			49.6
Northern Virginia		2			916			214.33			67.2			144.06			219.78			187.15			58.9			110.22			162.40			30.7			35.3
Atlanta		2			810			183.46			72.8			133.57			199.97			163.07			64.8			105.67			146.59			26.4			36.4
San Antonio		2			1,512			190.72			64.5			122.96			194.39			181.30			55.8			101.18			149.13			21.5			30.3
New Orleans		1			1,333			163.33			63.6			103.87			158.20			136.76			54.3			74.30			91.66			39.8			72.6
Denver		3			1,340			197.50			76.5			151.18			214.65			169.25			65.4			110.75			141.64			36.5			51.5
Houston		5			1,942			176.72			62.1			109.74			149.01			149.60			66.6			99.67			133.88			10.1			11.3
Other		9			2,936			261.04			63.6			166.04			240.26			250.39			55.3			138.36			193.81			20.0			24.0
Domestic		72			40,585			278.18			69.9			194.55			311.41			244.92			56.6			138.57			211.96			40.4			46.9
International		5			1,499			200.98			62.0			124.66			162.44			90.99			51.4			46.77			66.43			166.5			144.5
All Locations		77			42,084			275.73			69.7			192.06			306.11			239.89			56.4			135.28			206.75			42.0			48.1

All Owned Hotel Results by Location Compared to 2019

	As of September 30, 2022						Quarter ended September 30, 2022												Quarter ended September 30, 2019
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			2,007		$	565.30			73.6	%	$	416.12		$	643.06		$	385.51			91.5	%	$	352.78		$	554.15			18.0	%		16.0	%
Miami		2			1,033			457.43			50.2			229.66			427.55			259.69			76.2			197.80			341.68			16.1			25.1
Jacksonville		1			446			487.53			67.0			326.67			707.75			363.69			69.0			251.05			516.90			30.1			36.9
Florida Gulf Coast		5			1,850			330.56			53.9			178.01			340.62			242.93			61.6			149.63			302.07			19.0			12.8
Orlando		2			2,448			327.78			61.4			201.23			427.58			250.13			61.0			152.55			315.38			31.9			35.6
Phoenix		4			1,822			251.77			58.1			146.25			372.05			197.07			57.9			114.19			287.59			28.1			29.4
Los Angeles/ Orange County		3			1,067			303.74			86.4			262.42			372.72			271.42			86.6			235.06			344.41			11.6			8.2
New York		2			2,486			309.77			84.3			260.99			351.90			291.70			92.3			269.15			381.03			(3.0	)		(7.6	)
San Diego		3			3,288			292.38			85.4			249.83			440.67			256.92			83.5			214.41			372.78			16.5			18.2
Austin		2			767			233.32			68.3			159.46			289.77			213.65			84.4			180.39			304.72			(11.6	)		(4.9	)
Philadelphia		2			810			221.65			85.9			190.48			286.56			207.13			88.2			182.60			295.52			4.3			(3.0	)
Washington, D.C. (CBD)		5			3,238			237.56			65.7			156.01			223.72			211.15			84.4			178.19			254.63			(12.4	)		(12.1	)
Chicago		3			1,562			263.27			79.3			208.86			286.41			232.68			87.4			203.30			288.11			2.7			(0.6	)
Seattle		2			1,315			264.88			81.9			216.97			274.62			260.45			90.2			234.96			291.64			(7.7	)		(5.8	)
San Francisco/ San Jose		6			4,162			244.45			71.3			174.35			249.76			270.46			84.9			229.73			308.58			(24.1	)		(19.1	)
Boston		2			1,495			263.46			63.8			167.99			223.00			246.21			89.9			221.40			302.19			(24.1	)		(26.2	)
Northern Virginia		2			916			214.33			67.2			144.06			219.78			213.63			76.6			163.58			237.84			(11.9	)		(7.6	)
Atlanta		2			810			183.46			72.8			133.57			199.97			165.72			83.6			138.47			222.85			(3.5	)		(10.3	)
San Antonio		2			1,512			190.72			64.5			122.96			194.39			165.01			66.6			109.84			155.81			11.9			24.8
New Orleans		1			1,333			163.33			63.6			103.87			158.20			156.82			77.0			120.78			175.05			(14.0	)		(9.6	)
Denver		3			1,340			197.50			76.5			151.18			214.65			184.28			84.5			155.64			218.16			(2.9	)		(1.6	)
Houston		5			1,942			176.72			62.1			109.74			149.01			170.32			67.0			114.07			159.84			(3.8	)		(6.8	)
Other		9			2,936			261.04			63.6			166.04			240.26			198.34			79.1			156.91			241.19			5.8			(0.4	)
Domestic		72			40,585			278.18			69.9			194.55			311.41			240.95			79.7			191.95			299.74			1.4			3.9
International		5			1,499			200.98			62.0			124.66			162.44			159.14			75.9			120.86			166.88			3.1			(2.7	)
All Locations		77			42,084			275.73			69.7			192.06			306.11			238.14			79.5			189.39			294.96			1.4			3.8

All Owned Hotel Results by Location Compared to 2021

	As of September 30, 2022						Year-to-date ended September 30, 2022												Year-to-date ended September 30, 2021
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			2,007		$	559.15			76.0	%	$	424.91		$	657.89		$	470.97			67.4	%	$	317.20		$	480.87			34.0	%		36.8	%
Miami		2			1,033			618.23			62.8			388.09			647.24			555.80			56.4			313.58			499.04			23.8			29.7
Jacksonville		1			446			533.33			69.5			370.85			799.91			506.77			57.8			293.02			587.76			26.6			36.1
Florida Gulf Coast		5			1,850			442.56			65.9			291.82			570.66			416.57			54.8			228.24			426.68			27.9			33.7
Orlando		2			2,448			395.30			64.4			254.71			498.62			398.72			27.3			108.98			196.25			133.7			154.1
Phoenix		4			1,822			366.88			69.1			253.45			551.73			301.23			56.5			170.12			346.53			49.0			59.2
Los Angeles/ Orange County		3			1,067			290.28			79.6			231.14			331.60			234.10			50.5			118.33			162.84			95.3			103.6
New York		2			2,486			305.98			68.8			210.55			297.35			200.01			34.6			69.19			85.45			204.3			248.0
San Diego		3			3,288			275.85			76.1			209.91			376.43			218.39			45.3			98.85			155.68			112.4			141.8
Austin		2			767			261.29			70.3			183.71			319.55			190.23			51.9			98.76			159.17			86.0			100.8
Philadelphia		2			810			212.19			79.8			169.40			258.46			169.58			58.7			99.52			147.38			70.2			75.4
Washington, D.C. (CBD)		5			3,238			258.02			60.5			156.14			222.68			161.96			42.2			68.41			81.26			128.2			174.0
Chicago		3			1,562			238.34			64.8			154.44			212.39			176.19			37.4			65.84			81.71			134.6			159.9
Seattle		2			1,315			234.51			64.1			150.37			194.36			188.47			27.8			52.43			63.79			186.8			204.7
San Francisco/ San Jose		6			4,162			230.51			63.1			145.43			208.62			155.78			31.4			48.92			63.32			197.3			229.5
Boston		2			1,495			246.01			57.4			141.27			186.74			173.03			37.5			64.82			80.96			117.9			130.6
Northern Virginia		2			916			215.60			65.3			140.83			212.13			177.75			45.4			80.62			118.44			74.7			79.1
Atlanta		2			810			181.26			72.2			130.94			204.64			152.57			54.5			83.14			112.32			57.5			82.2
San Antonio		2			1,512			194.11			67.3			130.73			201.94			160.63			40.8			65.54			95.17			99.5			112.2
New Orleans		1			1,333			196.59			65.3			128.42			187.76			128.95			37.6			48.51			65.71			164.7			185.7
Denver		3			1,340			183.44			63.9			117.14			169.54			149.35			42.1			62.95			80.24			86.1			111.3
Houston		5			1,942			180.33			63.4			114.29			158.00			140.32			59.7			83.73			113.03			36.5			39.8
Other		9			2,936			264.87			61.2			162.17			233.33			243.29			45.3			110.15			156.34			47.2			49.2
Domestic		72			40,585			296.19			66.6			197.36			320.69			249.37			44.0			109.63			169.48			80.0			89.2
International		5			1,499			159.59			53.6			85.55			120.75			85.10			28.0			23.85			34.15			258.8			253.6
All Locations		77			42,084			292.25			66.2			193.38			313.58			245.57			43.4			106.56			164.64			81.5			90.5

All Owned Hotel Results by Location Compared to 2019

	As of September 30, 2022						Year-to-date ended September 30, 2022												Year-to-date ended September 30, 2019
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			2,007		$	559.15			76.0	%	$	424.91		$	657.89		$	401.92			90.9	%	$	365.45		$	577.41			16.3	%		13.9	%
Miami		2			1,033			618.23			62.8			388.09			647.24			356.95			80.6			287.82			463.01			34.8			39.8
Jacksonville		1			446			533.33			69.5			370.85			799.91			383.37			77.2			296.02			652.91			25.3			22.5
Florida Gulf Coast		5			1,850			442.56			65.9			291.82			570.66			340.73			72.8			247.94			507.99			17.7			12.3
Orlando		2			2,448			395.30			64.4			254.71			498.62			285.49			70.7			201.76			412.06			26.2			21.0
Phoenix		4			1,822			366.88			69.1			253.45			551.73			292.22			71.7			209.42			472.19			21.0			16.8
Los Angeles/ Orange County		3			1,067			290.28			79.6			231.14			331.60			262.50			84.7			222.39			335.37			3.9			(1.1	)
New York		2			2,486			305.98			68.8			210.55			297.35			290.81			82.3			239.46			368.99			(12.1	)		(19.4	)
San Diego		3			3,288			275.85			76.1			209.91			376.43			255.81			81.2			207.62			372.41			1.1			1.1
Austin		2			767			261.29			70.3			183.71			319.55			246.64			86.6			213.69			361.89			(14.0	)		(11.7	)
Philadelphia		2			810			212.19			79.8			169.40			258.46			216.10			85.4			184.46			301.70			(8.2	)		(14.3	)
Washington, D.C. (CBD)		5			3,238			258.02			60.5			156.14			222.68			246.65			83.1			204.99			293.15			(23.8	)		(24.0	)
Chicago		3			1,562			238.34			64.8			154.44			212.39			218.02			77.8			169.55			243.43			(8.9	)		(12.8	)
Seattle		2			1,315			234.51			64.1			150.37			194.36			231.59			84.3			195.17			256.01			(23.0	)		(24.1	)
San Francisco/ San Jose		6			4,162			230.51			63.1			145.43			208.62			284.01			82.2			233.51			323.40			(37.7	)		(35.5	)
Boston		2			1,495			246.01			57.4			141.27			186.74			242.40			83.8			203.01			289.54			(30.4	)		(35.5	)
Northern Virginia		2			916			215.60			65.3			140.83			212.13			220.18			76.5			168.33			265.16			(16.3	)		(20.0	)
Atlanta		2			810			181.26			72.2			130.94			204.64			187.48			84.0			157.49			258.05			(16.9	)		(20.7	)
San Antonio		2			1,512			194.11			67.3			130.73			201.94			183.18			73.0			133.69			195.06			(2.2	)		3.5
New Orleans		1			1,333			196.59			65.3			128.42			187.76			188.24			79.9			150.35			219.33			(14.6	)		(14.4	)
Denver		3			1,340			183.44			63.9			117.14			169.54			175.15			76.3			133.61			195.92			(12.3	)		(13.5	)
Houston		5			1,942			180.33			63.4			114.29			158.00			178.46			72.4			129.22			184.58			(11.6	)		(14.4	)
Other		9			2,936			264.87			61.2			162.17			233.33			193.56			76.5			148.07			222.10			9.5			5.1
Domestic		72			40,585			296.19			66.6			197.36			320.69			258.57			79.6			205.77			333.27			(4.1	)		(3.8	)
International		5			1,499			159.59			53.6			85.55			120.75			154.30			71.1			109.74			159.00			(22.0	)		(24.1	)
All Locations		77			42,084			292.25			66.2			193.38			313.58			255.20			79.3			202.32			327.00			(4.4	)		(4.1	)

Results by Location Compared to 2021 - actual, based on ownership period**(1)**

	As of September 30,
	2022			2021			Quarter ended September 30, 2022												Quarter ended September 30, 2021
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		$	565.30			73.6	%	$	416.12		$	643.06		$	514.34			82.8	%	$	425.86		$	635.28			(2.3	)%		1.2	%
Miami		2			3			457.43			50.2			229.66			427.55			364.54			55.2			201.40			333.79			14.0			28.1
Jacksonville		1			1			487.53			67.0			326.67			707.75			465.60			68.7			319.90			683.35			2.1			3.6
Florida Gulf Coast		5			5			330.56			53.9			178.01			340.62			314.16			45.2			141.93			286.62			25.4			18.8
Orlando		2			2			327.78			61.4			201.23			427.58			332.90			37.4			124.35			228.19			61.8			87.4
Phoenix		4			4			251.77			58.1			146.25			372.05			245.88			57.7			141.92			321.83			3.0			15.6
Los Angeles/ Orange County		3			5			303.74			86.4			262.42			372.72			218.60			71.1			155.40			216.04			68.9			72.5
New York		2			3			309.77			84.3			260.99			351.90			217.90			46.2			100.72			130.88			159.1			168.9
San Diego		3			3			292.38			85.4			249.83			440.67			247.61			72.1			178.55			281.14			39.9			56.7
Austin		2			1			233.32			68.3			159.46			289.77			181.59			57.2			103.84			162.10			53.6			78.8
Philadelphia		2			2			221.65			85.9			190.48			286.56			191.85			79.1			151.74			223.07			25.5			28.5
Washington, D.C. (CBD)		5			5			237.56			65.7			156.01			223.72			185.06			37.1			68.65			96.94			127.3			130.8
Chicago		3			4			253.75			77.8			197.54			269.26			191.01			62.4			119.27			149.38			65.6			80.3
Seattle		2			2			264.88			81.9			216.97			274.62			202.49			53.5			108.25			130.03			100.4			111.2
San Francisco/ San Jose		6			7			244.45			71.3			174.35			249.76			163.42			50.0			81.72			104.30			113.4			139.5
Boston		2			3			263.46			63.8			167.99			223.00			204.56			48.1			98.46			117.58			70.6			89.7
Northern Virginia		2			3			214.33			67.2			144.06			219.78			169.41			60.6			102.70			156.44			40.3			40.5
Atlanta		2			4			183.46			72.8			133.57			199.97			178.31			56.6			100.94			142.30			32.3			40.5
San Antonio		2			2			190.72			64.5			122.96			194.39			181.30			55.8			101.18			149.13			21.5			30.3
New Orleans		1			1			163.33			63.6			103.87			158.20			136.76			54.3			74.30			91.66			39.8			72.6
Denver		3			3			197.50			76.5			151.18			214.65			169.25			65.4			110.75			141.64			36.5			51.5
Houston		5			4			176.72			62.1			109.74			149.01			149.60			66.6			99.67			133.88			10.1			11.3
Other		9			8			261.04			63.6			166.04			240.26			203.77			53.2			108.38			150.97			53.2			59.1
Domestic		72			79			277.68			69.9			194.13			310.58			233.85			55.7			130.18			196.75			49.1			57.9
International		5			5			200.98			62.0			124.66			162.44			90.99			51.4			46.77			66.43			166.5			144.5
All Locations		77			84			275.25			69.6			191.66			305.33			229.68			55.5			127.54			192.63			50.3			58.5

Results by Location Compared to 2019 - actual, based on ownership period**(1)**

	As of September 30,
	2022			2019			Quarter ended September 30, 2022												Quarter ended September 30, 2019
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		$	565.30			73.6	%	$	416.12		$	643.06		$	385.51			91.5	%	$	352.78		$	543.42			18.0	%		18.3	%
Miami		2			3			457.43			50.2			229.66			427.55			235.65			73.9			174.18			294.09			31.8			45.4
Jacksonville		1			1			487.53			67.0			326.67			707.75			363.69			69.0			251.05			516.90			30.1			36.9
Florida Gulf Coast		5			5			330.56			53.9			178.01			340.62			242.93			61.6			149.63			302.07			19.0			12.8
Orlando		2			1			327.78			61.4			201.23			427.58			155.29			59.2			91.97			231.78			118.8			84.5
Phoenix		4			3			251.77			58.1			146.25			372.05			187.65			58.4			109.56			266.45			33.5			39.6
Los Angeles/ Orange County		3			6			303.74			86.4			262.42			372.72			226.14			85.8			194.13			288.91			35.2			29.0
New York		2			3			309.77			84.3			260.99			351.90			271.11			92.0			249.40			341.59			4.6			3.0
San Diego		3			4			292.38			85.4			249.83			440.67			235.94			84.9			200.22			347.13			24.8			26.9
Austin		2			—			233.32			68.3			159.46			289.77			—			—			—			—			—			—
Philadelphia		2			2			221.65			85.9			190.48			286.56			207.13			88.2			182.60			295.52			4.3			(3.0	)
Washington, D.C. (CBD)		5			5			237.56			65.7			156.01			223.72			211.15			84.4			178.19			254.63			(12.4	)		(12.1	)
Chicago		3			4			253.75			77.8			197.54			269.26			217.96			85.2			185.76			259.62			6.3			3.7
Seattle		2			2			264.88			81.9			216.97			274.62			260.45			90.2			234.96			291.64			(7.7	)		(5.8	)
San Francisco/ San Jose		6			7			244.45			71.3			174.35			249.76			266.18			84.2			224.20			301.99			(22.2	)		(17.3	)
Boston		2			4			263.46			63.8			167.99			223.00			243.62			91.4			222.58			293.17			(24.5	)		(23.9	)
Northern Virginia		2			3			214.33			67.2			144.06			219.78			199.70			72.7			145.09			217.46			(0.7	)		1.1
Atlanta		2			4			183.46			72.8			133.57			199.97			168.45			85.0			143.25			215.95			(6.8	)		(7.4	)
San Antonio		2			2			190.72			64.5			122.96			194.39			165.01			66.6			109.84			155.81			11.9			24.8
New Orleans		1			1			163.33			63.6			103.87			158.20			156.82			77.0			120.78			175.05			(14.0	)		(9.6	)
Denver		3			3			197.50			76.5			151.18			214.65			184.28			84.5			155.64			218.16			(2.9	)		(1.6	)
Houston		5			4			176.72			62.1			109.74			149.01			170.32			67.0			114.07			159.84			(3.8	)		(6.8	)
Other		9			6			261.04			63.6			166.04			240.26			172.44			80.7			139.19			195.48			19.3			22.9
Domestic		72			77			277.68			69.9			194.13			310.58			229.97			80.9			186.05			283.16			4.3			9.7
International		5			5			200.98			62.0			124.66			162.44			159.14			75.9			120.86			166.88			3.1			(2.7	)
All Locations		77			82			275.25			69.6			191.66			305.33			227.93			80.8			184.06			279.60			4.1			9.2

Results by Location Compared to 2021 - actual, based on ownership period**(1)**

	As of September 30,
	2022			2021			Year-to-date ended September 30, 2022												Year-to-date ended September 30, 2021
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		$	559.15			76.0	%	$	424.91		$	657.89		$	470.97			67.4	%	$	317.20		$	476.28			34.0	%		38.1	%
Miami		2			3			573.01			64.5			369.80			609.25			472.94			57.4			271.38			424.17			36.3			43.6
Jacksonville		1			1			533.33			69.5			370.85			799.91			506.77			57.8			293.02			587.76			26.6			36.1
Florida Gulf Coast		5			5			442.56			65.9			291.82			570.66			416.57			54.8			228.24			426.68			27.9			33.7
Orlando		2			2			395.30			64.4			254.71			498.62			313.90			26.5			83.14			157.35			206.4			216.9
Phoenix		4			4			366.88			69.1			253.45			551.73			301.23			56.5			170.12			346.53			49.0			59.2
Los Angeles/ Orange County		3			5			290.28			79.6			231.14			331.60			190.62			53.1			101.25			138.42			128.3			139.6
New York		2			3			288.08			63.5			182.96			256.78			189.90			31.7			60.17			75.05			204.1			242.2
San Diego		3			3			275.85			76.1			209.91			376.43			218.39			45.3			98.85			155.68			112.4			141.8
Austin		2			1			261.29			70.3			183.71			319.55			181.39			58.7			106.44			156.20			72.6			104.6
Philadelphia		2			2			212.19			79.8			169.40			258.46			169.58			58.7			99.52			147.38			70.2			75.4
Washington, D.C. (CBD)		5			5			258.02			60.5			156.14			222.68			161.96			42.2			68.41			81.26			128.2			174.0
Chicago		3			4			227.82			63.1			143.86			196.43			168.03			37.4			62.92			77.59			128.6			153.2
Seattle		2			2			234.51			64.1			150.37			194.36			188.47			27.8			52.43			63.79			186.8			204.7
San Francisco/ San Jose		6			7			230.51			63.1			145.43			208.62			153.68			31.5			48.40			62.82			200.4			232.1
Boston		2			3			240.93			55.5			133.65			175.93			180.00			25.7			46.18			56.54			189.4			211.2
Northern Virginia		2			3			215.60			65.3			140.83			212.13			161.62			44.3			71.60			107.52			96.7			97.3
Atlanta		2			4			181.26			72.2			130.94			204.64			170.45			48.0			81.83			111.31			60.0			83.8
San Antonio		2			2			194.11			67.3			130.73			201.94			160.63			40.8			65.54			95.17			99.5			112.2
New Orleans		1			1			196.59			65.3			128.42			187.76			128.95			37.6			48.51			65.71			164.7			185.7
Denver		3			3			183.44			63.9			117.14			169.54			149.35			42.1			62.95			80.24			86.1			111.3
Houston		5			4			180.33			63.4			114.29			158.00			140.32			59.7			83.73			113.03			36.5			39.8
Other		9			8			264.87			61.2			162.17			233.33			170.49			40.8			69.58			94.34			133.1			147.3
Domestic		72			79			293.77			66.1			194.23			314.75			233.25			42.4			98.82			150.74			96.5			108.8
International		5			5			159.59			53.6			85.55			120.75			85.10			28.0			23.85			34.15			258.8			253.6
All Locations		77			84			289.98			65.7			190.46			308.03			230.09			41.9			96.43			147.02			97.5			109.5

Results by Location Compared to 2019 - actual based on ownership period**(1)**

	As of September 30,
	2022			2019			Year-to-date ended September 30, 2022												Year-to-date ended September 30, 2019
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		$	559.15			76.0	%	$	424.91		$	657.89		$	401.92			90.9	%	$	365.45		$	563.64			16.3	%		16.7	%
Miami		2			3			573.01			64.5			369.80			609.25			293.90			79.8			234.60			367.10			57.6			66.0
Jacksonville		1			1			533.33			69.5			370.85			799.91			383.37			77.2			296.02			652.91			25.3			22.5
Florida Gulf Coast		5			5			442.56			65.9			291.82			570.66			340.73			72.8			247.94			507.99			17.7			12.3
Orlando		2			1			395.30			64.4			254.71			498.62			182.58			69.5			126.97			303.48			100.6			64.3
Phoenix		4			3			366.88			69.1			253.45			551.73			270.22			73.4			198.47			419.43			27.7			31.5
Los Angeles/ Orange County		3			6			290.28			79.6			231.14			331.60			214.91			84.4			181.37			273.04			27.4			21.5
New York		2			3			288.08			63.5			182.96			256.78			268.13			82.9			222.31			328.43			(17.7	)		(21.8	)
San Diego		3			4			275.85			76.1			209.91			376.43			236.69			81.5			192.90			345.20			8.8			9.0
Austin		2			—			261.29			70.3			183.71			319.55			—			—			—			—			—			—
Philadelphia		2			2			212.19			79.8			169.40			258.46			216.10			85.4			184.46			301.70			(8.2	)		(14.3	)
Washington, D.C. (CBD)		5			5			258.02			60.5			156.14			222.68			246.65			83.1			204.99			293.15			(23.8	)		(24.0	)
Chicago		3			4			227.82			63.1			143.86			196.43			198.58			76.6			152.16			210.78			(5.5	)		(6.8	)
Seattle		2			2			234.51			64.1			150.37			194.36			231.59			84.3			195.17			256.01			(23.0	)		(24.1	)
San Francisco/ San Jose		6			7			230.51			63.1			145.43			208.62			279.15			81.5			227.38			315.49			(36.0	)		(33.9	)
Boston		2			4			240.93			55.5			133.65			175.93			237.01			82.6			195.81			268.56			(31.7	)		(34.5	)
Northern Virginia		2			3			215.60			65.3			140.83			212.13			197.94			74.8			148.13			226.05			(4.9	)		(6.2	)
Atlanta		2			4			181.26			72.2			130.94			204.64			193.39			79.8			154.29			235.46			(15.1	)		(13.1	)
San Antonio		2			2			194.11			67.3			130.73			201.94			183.18			73.0			133.69			195.06			(2.2	)		3.5
New Orleans		1			1			196.59			65.3			128.42			187.76			188.24			79.9			150.35			219.33			(14.6	)		(14.4	)
Denver		3			3			183.44			63.9			117.14			169.54			175.15			76.3			133.61			195.92			(12.3	)		(13.5	)
Houston		5			4			180.33			63.4			114.29			158.00			178.46			72.4			129.22			184.58			(11.6	)		(14.4	)
Other		9			6			264.87			61.2			162.17			233.33			173.68			76.9			133.48			197.30			21.5			18.3
Domestic		72			77			293.77			66.1			194.23			314.75			240.89			79.7			191.94			303.24			1.2			3.8
International		5			5			159.59			53.6			85.55			120.75			154.30			71.1			109.74			159.00			(22.0	)		(24.1	)
All Locations		77			82			289.98			65.7			190.46			308.03			238.59			79.4			189.51			298.97			0.5			3.0

---

(1) Represents the results of the portfolio for the time period of our ownership, including dispositions through their date of disposal and acquisitions beginning as of the date of acquisition.

Hotel Business Mix

Our customers fall into three broad categories: transient, group, and contract business, which accounted for approximately 61%, 35%, and 4%, respectively, of our full year 2019 room sales. The information below is derived from business mix data for the 77 hotels that we owned as of September 30, 2022. For additional detail on our business mix, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10‑K.

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

		Quarter ended September 30, 2022												Quarter ended September 30, 2021
		Transient business				Group business				Contract business				Transient business				Group business				Contract business
Room nights (in thousands)			1,557				991				151				1,521				530				122
Percentage change in room nights vs. same period in 2019			(18.4	)%			(2.6	)%			21.2	%
Rooms Revenues (in millions)		$	487			$	229			$	28			$	401			$	102			$	18
Percentage change in revenues vs. same period in 2019			1.7	%			3.3	%			9.4	%

		Year-to-date ended September 30, 2022												Year-to-date ended September 30, 2021
		Transient business				Group business				Contract business				Transient business				Group business				Contract business
Room nights (in thousands)			4,409				2,787				412				3,541				1,132				285
Percentage change in room nights vs. same period in 2019			(15.8	)%			(18.2	)%			10.6	%
Rooms Revenues (in millions)		$	1,446			$	701			$	76			$	973			$	203			$	41
Percentage change in revenues vs. same period in 2019			2.9	%			(14.6	)%			(0.2	)%

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 hotels 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, we were 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.

As hotel operations have returned to cash flow positive, we believe that we have sufficient liquidity to fund corporate expenses, capital expenditures, and hotel acquisitions and have reinstated our quarterly dividend. We remain well positioned to execute additional transactions to the extent opportunities arise.

Cash Requirements. We use cash for acquisitions, capital expenditures, debt payments, operating costs, and corporate and other expenses, as well as for dividends and distributions to stockholders and to OP unitholders, respectively, and stock and OP unit repurchases. We have no significant debt maturities until 2024. As a REIT, Host Inc. is required to distribute to its stockholders at least 90% of its taxable income, excluding net capital gain, on an annual basis.

Capital Resources. As of September 30, 2022, we had $883 million of cash and cash equivalents, $187 million in our FF&E escrow reserves and $1.5 billion available under the revolver portion of our credit facility. We depend primarily on external sources of capital to finance future growth, including acquisitions. As a result, the liquidity and debt capacity provided by our credit facility and the ability to issue senior unsecured debt are key components of our capital structure. Our financial flexibility, including our ability to incur debt, pay dividends, make distributions and make investments, is contingent on our ability to maintain compliance with the financial covenants of our credit facility and senior notes indentures, which include, among other things, the allowable amounts of leverage, interest coverage and fixed charges.

We currently have a distribution agreement in place with various investment banks, through which Host Inc. may issue and sell, from time-to-time, shares of its common stock having an aggregate offering price of up to $600 million. The shares can be offered and sold through sales agents in transactions that are deemed to be “at the market” offerings at then-current market prices. We are not obligated to issue any shares and may do so when we believe conditions are advantageous and there is a compelling use of proceeds, including to fund future acquisitions. No shares have been issued during 2022 year-to-date. As of September 30, 2022, there was $460 million of remaining capacity under the agreement.

Additionally, on August 3, 2022, the Board of Directors authorized an increase in the Company’s share repurchase program from the existing $371 million remaining under the prior Board authorization 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. There have been no share repurchases during 2022 year-to-date.

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 2021, Host Inc.’s Board of Directors authorized repurchases of up to $1.0 billion of senior notes other than in accordance with their respective terms, of which the entire amount remains available under this authority. We may purchase senior notes with cash through open market purchases, privately negotiated transactions, a tender offer, or through the early redemption of such securities pursuant to their terms. Repurchases of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. Any retirement before the maturity date will

affect earnings and NAREIT FFO per diluted share as a result of the payment of any applicable call premiums and the accelerated expensing of previously deferred and capitalized financing costs. Accordingly, considering our priorities in managing our capital structure and liquidity profile, and given prevailing conditions and relative pricing in the capital markets, we may, at any time, subject to applicable securities laws and the requirements under 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.

We continue to explore potential acquisitions and dispositions. We anticipate that any such future acquisitions will be funded by proceeds from sales of hotels, equity offerings of Host Inc., issuances of OP units by Host L.P., or available cash. Given the nature of these transactions, we can make no assurances that we will be successful in acquiring any one or more hotels that we may review, bid on or negotiate to purchase or that we will be successful in disposing of any one or more of our hotels. We may acquire additional hotels or dispose of hotels through various structures, including transactions involving single assets, portfolios, joint ventures, acquisitions of the securities or assets of other REITs or distributions of hotels to our stockholders.

Sources and Uses of Cash. Our sources of cash generally include cash from operations, proceeds from debt and equity issuances, and proceeds from hotel sales. Uses of cash include acquisitions, capital expenditures, operating costs, debt repayments, and repurchases of shares and distributions to equity holders.

Cash Provided by Operating Activities. Year-to-date in 2022, net cash provided by operating activities was $1,056 million compared to $78 million for 2021. This $978 million increase in 2022 was driven by improved operations at our hotels compared to 2021.

Cash Used in Investing Activities. Net cash used in investing activities was $172 million during 2022 year-to-date compared to $1,502 million for 2021. Cash used in investing activities during year-to-date 2022 primarily related to $357 million of capital expenditures and an investment in a joint venture. Cash used in investing activities during year-to-date 2021 primarily related to $293 million of capital expenditures and the acquisition of five hotels and two golf courses. Cash provided by investing activities in 2022 includes the sale of four hotels.

The following tables summarize significant acquisitions/investments in affiliates and dispositions that have been completed as of November 2, 2022:

Transaction Date			Description of Transaction		Investment
Acquisitions/Investments
November	2022		Acquisition of Four Seasons Resorts and Residences Jackson Hole		$	(315	)
January	2022		Investment to acquire non-controlling interest of a joint venture with Noble Investment Group⁽¹⁾			(91	)
			Total acquisitions/investments		$	(406	)
___________

(1)

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

Transaction Date			Description of Transaction		Net Proceeds⁽¹⁾				Sales Price
Dispositions
August	2022		Disposition of Chicago Marriott Suites Downers Grove		$	14			$	16
April	2022		Disposition of Sheraton New York Times Square Hotel⁽²⁾			103				373
April	2022		Disposition of YVE Hotel Miami			49				50
February	2022		Disposition of Sheraton Boston⁽³⁾			67				233
			Total dispositions		$	233			$	672

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(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 buyer.

(2)

In connection with the sale of the Sheraton New York Times Square Hotel, we issued a $250 million bridge loan to the buyer. The disposition proceeds are net of the bridge loan.

(3)

In connection with the sale of the Sheraton Boston Hotel, we issued a $163 million bridge loan to the buyer. The disposition proceeds are net of the bridge loan.

Cash Used in/Provided by Financing Activities. Year-to-date in 2022, net cash used in financing activities was $759 million compared to net cash provided by financing activities of $127 million for year-to-date 2021. Cash used in financing activities in 2022 included the repayment of the credit facility revolver and the payment of common stock dividends, following the reinstatement of the quarterly common stock dividend in the first quarter of 2022. Cash provided by financing activities in 2021 included proceeds from the issuance of common stock.

Debt

As of September 30, 2022, our total debt was $4.2 billion, with a weighted average interest rate of 4.1% and a weighted average maturity of 4.8 years. Additionally, 76% of our debt has a fixed rate of interest and only one of our consolidated hotels is encumbered by mortgage debt.

Financial Covenants

Credit Facility Covenants. Our credit facility contains certain important financial covenants concerning allowable leverage, unsecured interest coverage, and required fixed charge coverage. Total debt used in the calculation of our ratio of consolidated total debt to consolidated EBITDA (our “Leverage Ratio”) is based on a “net debt” concept, pursuant to which cash and cash equivalents in excess of $100 million are deducted from our total debt balance for purposes of measuring compliance.

On June 26, 2020, we entered into an amendment to the credit facility and on February 9, 2021, we entered into a second amendment to the credit facility (collectively, the “Amendments”). The Amendments suspended requirements to comply with all existing financial maintenance covenants under the credit facility for the period which began on July 1, 2020 and ended when we exited the covenant waiver period after reporting results for the third quarter of 2021. Upon reinstatement, during a phase in period, the financial covenant requirements set forth in the credit facility before the Amendments apply, except that the maximum leverage ratio requirement will be amended to be (a) 8.50:1:00 as at the end of the first and second fiscal quarters ending after the covenant waiver period, (b) 8.00:1.00 as at the end of the third and fourth fiscal quarters ending after the covenant waiver period, (c) 7.50:1:00 as at the end of the fifth fiscal quarter ending after the covenant waiver period, and (d) 7.25:1.00 at all times thereafter.

At September 30, 2022, we were in compliance with all of our financial covenants under the credit facility. The following table summarizes the results of the financial tests required by the credit facility, which are calculated on a trailing twelve-month basis:

		Actual Ratio				Covenant Requirement for most recent quarter		Covenant Requirement following phase in period
Leverage ratio			2.4	x		Maximum ratio of 8.00x		Maximum ratio of 7.25x
Fixed charge coverage ratio			10.7	x		Minimum ratio of 1.25x		Minimum ratio of 1.25x
Unsecured interest coverage ratio ⁽¹⁾			10.3	x		Minimum ratio of 1.75x		Minimum ratio of 1.75x

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

Senior Notes Indenture Covenants

The following table summarizes the results of the financial tests required by the indentures for our senior notes and our actual credit ratios as of September 30, 2022:

		Actual Ratio				Covenant Requirement
Unencumbered assets tests			479	%		Minimum ratio of 150%
Total indebtedness to total assets			21	%		Maximum ratio of 65%
Secured indebtedness to total assets			1	%		Maximum ratio of 40%
EBITDA-to-interest coverage ratio			9.6	x		Minimum ratio of 1.5x

For additional details on our credit facility and senior notes, including the terms of the Amendments, see our Annual Report on Form 10-K for the year ended December 31, 2021.

Dividend Policy

Host Inc. is required to distribute at least 90% of its annual taxable income, excluding net capital gains, to its stockholders in order to maintain its qualification as a REIT. Funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P. As of September 30, 2022, Host Inc. is the owner of approximately 99% of the Host L.P. common OP units. The remaining common OP units are owned by unaffiliated limited partners. Each Host L.P. common OP unit may be redeemed for cash or, at the election of Host Inc., Host Inc. common stock based on the conversion ratio. The conversion ratio is 1.021494 shares of Host Inc. common stock for each Host L.P. common OP unit. Under the credit facility, as amended, all redemptions must be made with Host Inc. common stock if Host L.P.’s leverage ratio exceeds 7.25x calculated using the prior twelve-month result.

Investors should consider the non-controlling interests in the Host L.P. common OP units when analyzing dividend payments by Host Inc. to its stockholders, as these Host L.P. common OP unitholders share in cash distributed by Host L.P. to all of its common OP unitholders, on a pro rata basis. For example, if Host Inc. paid a $1 per share dividend on its common stock, it would be based on the

payment of a $1.021494 per common OP unit distribution by Host L.P. to Host Inc., as well as to the other unaffiliated Host L.P. common OP unitholders.

Host Inc.’s policy on common dividends generally is to distribute, over time, 100% of its taxable income, which primarily is dependent on Host Inc.’s results of operations, as well as tax gains and losses on hotel sales. On August 3, 2022, Host Inc.'s Board of Directors announced a regular quarterly cash dividend of $0.12 per share on Host Inc.'s common stock. The dividend was paid on October 17, 2022 to stockholders of record on September 30, 2022. All future dividends are subject to Board approval.

Critical Accounting Policies

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe that the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that we believe are reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

All Owned Hotel Operating Statistics and Results

To facilitate a quarter-to-quarter comparison of our operations, we typically 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 this presentation on a comparable hotel basis in order to enable our investors to better evaluate our operating performance (discussed in “Hotel Property Level Operating Results” below). However, due to the COVID-19 pandemic and its effects on operations, there is little comparability between periods. For this reason, we temporarily are suspending our comparable hotel presentation and instead present hotel operating results for all consolidated hotels and, to facilitate comparisons between periods, we are presenting results, referred to as "All Owned Hotel", which include the following adjustments: (1) operating results are presented for all consolidated hotels owned as of September 30, 2022, but do not include the results of operations for properties sold or held-for-sale as of the reporting date; and (2) operating results for acquisitions as of September 30, 2022 are reflected for full calendar years, 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.

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 or future financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. These measures include the following:

Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest Expense, Income Taxes, Depreciation and Amortization for real estate (“EBITDAre”) and Adjusted EBITDAre, as a measure of performance for Host Inc. and Host L.P.,

Funds From Operations (“FFO”) and FFO per diluted share, both calculated in accordance with National Association of Real Estate Investment Trusts (“NAREIT”) guidelines and with certain adjustments from those guidelines, as a measure of performance for Host Inc., and

All Owned Hotel operating results, as a measure of performance for Host Inc. and Host L.P.

The discussion below defines these measures and presents why we believe they are useful supplemental measures of our performance.

Set forth below for each such non-GAAP financial measure is a reconciliation of the measure with the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable thereto. We also have included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures” in our

Annual Report on Form 10-K for the year ended December 31, 2021 further explanations of the adjustments being made, a statement disclosing the reasons why we believe the presentation of each of the non-GAAP financial measures provide useful information to investors regarding our financial condition and results of operations, the additional purposes for which we use the non-GAAP financial measures and limitations on their use.

EBITDA, EBITDAre and Adjusted EBITDAre

EBITDA

EBITDA is a commonly used measure of performance in many industries. Management believes EBITDA provides useful information to investors regarding our results of operations because it helps us and our investors evaluate the ongoing operating performance of our properties after removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization). Management also believes the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital-intensive companies. Management uses EBITDA to evaluate property-level results and as one measure in determining the value of acquisitions and dispositions and, like FFO and Adjusted FFO per diluted share, it is widely used by management in the annual budget process and for compensation programs.

EBITDAre and Adjusted EBITDAre

We present EBITDAre in accordance with NAREIT guidelines, as defined in its September 2017 white paper “Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate,” to provide an additional performance measure to facilitate the evaluation and comparison of our results with other REITs. NAREIT defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment expense for depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity’s pro rata share of EBITDAre of unconsolidated affiliates.

We make additional adjustments to EBITDAre when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. We believe that the presentation of Adjusted EBITDAre, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s understanding of our operating performance. Adjusted EBITDAre also is similar to what is used in calculating 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 condensed consolidated statements of operations because we believe that including them in Adjusted EBITDAre is not consistent with reflecting the ongoing performance of our assets. In addition, property insurance gains could be less important to investors given that the depreciated asset book value written off in connection with the calculation of the property insurance gain often does not reflect the market value of real estate assets.

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.

The following table provides a reconciliation of EBITDA, EBITDAre, and Adjusted EBITDAre to net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider the most directly comparable:

Reconciliation of Net Income (Loss) to EBITDA, EBITDA****re and Adjusted EBITDA****re for Host Inc. and Host L.P.

(in millions)

		Quarter ended September 30,								Year-to-date ended September 30,
		2022				2021				2022				2021
Net income (loss)		$	116			$	(120	)		$	494			$	(334	)
Interest expense			40				43				113				128
Depreciation and amortization			164				171				498				505
Income taxes			6				(13	)			29				(81	)
EBITDA			326				81				1,134				218
Gain on dispositions⁽¹⁾			(5	)			—				(18	)			—
Non-cash impairment expense			—				92				—				92
Equity investment adjustments:
Equity in (earnings) losses of affiliates			1				(2	)			(3	)			(36	)
Pro rata EBITDAre of equity investments⁽²⁾			6				8				27				21
EBITDA****re			328				179				1,140				295
Adjustments to EBITDAre:
Gain on property insurance settlement			—				—				(6	)			—
Severance expense (reversal) at hotel properties			—				(2	)			—				(5	)
Adjusted EBITDA****re		$	328			$	177			$	1,134			$	290

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(1) Reflects the sale of four hotels in 2022.

(2) Pro rata EBITDAre of equity investments and pro rata FFO of equity investments for the year-to-date ended September 30, 2021 include a realized gain of approximately $3 million related to equity securities held by one of our unconsolidated partnerships, Fifth Wall Ventures, L.P. 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. Effective January 1, 2019, we adopted NAREIT’s definition of FFO included 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 real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment expense of certain real estate assets and investments and adjustments for consolidated partially-owned entities and unconsolidated affiliates. Adjustments for consolidated partially-owned entities and unconsolidated affiliates are calculated to reflect our pro rata share of the FFO of those entities on the same basis.

We also present Adjusted FFO per diluted share when evaluating our performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance, in our annual budget process and for our compensation programs. We believe that the presentation of Adjusted FFO per diluted share, when combined with both the primary GAAP presentation of diluted earnings per share and FFO per diluted share as defined by NAREIT, provides useful supplemental information that is beneficial to an investor’s understanding of our operating performance. We adjust NAREIT FFO per diluted share for the following items, which may occur in any period, and refer to this measure as Adjusted FFO per diluted share:

Gains and Losses on the Extinguishment of Debt – We exclude the effect of finance charges and premiums associated with the extinguishment of debt, including the acceleration of the write-off of deferred financing costs from the original issuance of the debt being redeemed or retired and incremental interest expense incurred during

the refinancing period. We also exclude the gains on debt repurchases and the original issuance costs associated with the retirement of preferred stock. We believe that these items are not reflective of our ongoing finance costs.

Acquisition Costs – Under GAAP, costs associated with completed property acquisitions that are considered business combinations are expensed in the year incurred. We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company.

Litigation Gains and Losses – We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider 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 to increase the provision for income taxes by approximately $11 million. We do not consider this adjustment to be reflective of our on-going operating performance and, therefore, we excluded this item from Adjusted FFO.

The following table provides a reconciliation of the differences between our non-GAAP financial measures, NAREIT FFO and Adjusted FFO (separately and on a per diluted share basis), and net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable:

Host Inc. Reconciliation of Diluted Earnings (Loss) per Common Share to

NAREIT and Adjusted Funds From Operations per Diluted Share

(in millions, except per share amount)

		Quarter ended September 30,								Year-to-date ended September 30,
		2022				2021				2022				2021
Net income (loss)		$	116			$	(120	)		$	494			$	(334	)
Less: Net (income) loss attributable to non-controlling interests			(2	)			1				(8	)			3
Net income (loss) attributable to Host Inc.			114				(119	)			486				(331	)
Adjustments:
Gain on dispositions⁽¹⁾			(5	)			—				(18	)			—
Gain on property insurance settlement			—				—				(6	)			—
Depreciation and amortization			164				171				497				504
Non-cash impairment expense			—				92				—				92
Equity investment adjustments:
Equity in (earnings) losses of affiliates			1				(2	)			(3	)			(36	)
Pro rata FFO of equity investments⁽²⁾			4				6				21				16
Consolidated partnership adjustments:
FFO adjustment for non-controlling partnerships			(1	)			—				(1	)			(1	)
FFO adjustments for non-controlling interests of Host L.P.			(2	)			(3	)			(6	)			(6	)
NAREIT FFO			275				145				970				238
Adjustments to NAREIT FFO:
Severance expense (reversal) at hotel properties			—				(2	)			—				(5	)
Adjusted FFO		$	275			$	143			$	970			$	233
For calculation on a per share basis:⁽³⁾
Diluted weighted average shares outstanding - EPS			717.6				713.9				717.4				709.0
Assuming issuance of common shares granted under the comprehensive stock plans			—				1.6				—				1.6
Diluted weighted average shares outstanding - NAREIT FFO and Adjusted FFO			717.6				715.5				717.4				710.6
Diluted earnings (loss) per common share		$	0.16			$	(0.17	)		$	0.68			$	(0.47	)
NAREIT FFO per diluted share		$	0.38			$	0.20			$	1.35			$	0.33
Adjusted FFO per diluted share		$	0.38			$	0.20			$	1.35			$	0.33

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

(3) Diluted earnings (loss) 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 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.

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 hotel-level basis as supplemental information for our investors. Our hotel results reflect the operating results of our hotels as discussed in “All Owned Hotel Operating Statistics and Results” above. We present All Owned Hotel EBITDA to help us and our investors evaluate the ongoing operating performance of our 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 hotels. All Owned Hotel results are presented both by location and for our properties in the aggregate. We eliminate from our 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 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.

While management believes that presentation of All Owned 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 All Owned Hotel results in the aggregate. For these reasons, we believe All Owned Hotel operating results, when combined with the presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management.

The following tables present certain operating results and statistics for our hotels for the periods presented herein and a reconciliation of the differences between All Owned Hotel EBITDA, a non-GAAP financial measure, and net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable. Similar reconciliations of the differences between (i) hotel revenues and (ii) our revenues as calculated and presented in accordance with GAAP (each of which is used in the applicable margin calculation), and between (iii) hotel expenses and (iv) operating costs and expenses as calculated and presented in accordance with GAAP, also are included in the reconciliation:

All Owned Hotel Results for Host Inc. and Host L.P.

(in millions, except hotel statistics)

		Quarter ended September 30,								Year-to-date ended September 30,
		2022				2021				2022				2021
Number of hotels			77				76				77				76
Number of rooms			42,084				41,861				42,084				41,861
Change in All Owned Hotel Total RevPAR			48.1	%			—				90.5	%			—
Change in All Owned Hotel RevPAR			42.0	%			—				81.5	%			—
Operating profit (loss) margin⁽²⁾			12.4	%			(11.3	)%			16.4	%			(17.4	)%
All Owned Hotel EBITDA margin⁽²⁾			28.7	%			24.9	%			32.7	%			21.1	%
Food and beverage profit margin⁽²⁾			30.3	%			23.6	%			34.6	%			22.7	%
All Owned Hotel food and beverage profit margin⁽²⁾			30.3	%			24.3	%			35.1	%			23.2	%
Net income (loss)		$	116			$	(120	)		$	494			$	(334	)
Depreciation and amortization			164				263				498				597
Interest expense			40				43				113				128
Provision (benefit) for income taxes			6				(13	)			29				(81	)
Gain on sale of property and corporate level income/expense			15				19				32				31
Severance expense (reversal) at hotel properties			—				(2	)			2				(5	)
All Owned Hotel adjustments⁽¹⁾			—				8				11				62
All Owned Hotel EBITDA⁽¹⁾		$	341			$	198			$	1,179			$	398

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(1) All Owned Hotel adjustments represent the following items: (i) the elimination of results of operations of hotels sold or held-for-sale as of September 30, 2022, which operations are included in our unaudited condensed consolidated statements of operations as continuing operations, and (ii) the addition of results for periods prior to our ownership for hotels acquired as of September 30, 2022. All Owned Hotel results also include the results of our leased office buildings and other non-hotel revenue and expense items. The AC Hotel Scottsdale North is a new development hotel that opened in January 2021 and The Laura Hotel in Houston re-opened under new management in November 2021. Therefore, no adjustments were made for results of these hotels for periods prior to their openings.

(2) Profit margins are calculated by dividing the applicable operating profit by the related revenue amount. GAAP profit margins are calculated using amounts presented in the unaudited condensed consolidated statements of operations. All Owned Hotel margins are calculated using amounts presented in the following tables, which include reconciliations to the applicable GAAP results:

	Quarter ended September 30, 2022																Quarter ended September 30, 2021
					Adjustments																Adjustments
	GAAP Results				All Owned Hotel adjustments				Depreciation and corporate level items				All Owned Hotel Results				GAAP Results				Severance at hotel properties				All Owned Hotel adjustments				Depreciation and corporate level items				All Owned Hotel Results
Revenues
Room	$	746			$	(2	)		$	—			$	744			$	557			$	—			$	(36	)		$	—			$	521
Food and beverage		330				—				—				330				191				—				(7	)			—				184
Other		113				—				—				113				96				—				(3	)			—				93
Total revenues		1,189				(2	)			—				1,187				844				—				(46	)			—				798
Expenses
Room		190				(1	)			—				189				150				1				(16	)			—				135
Food and beverage		230				—				—				230				146				1				(8	)			—				139
Other		438				(1	)			—				437				361				—				(30	)			—				331
Depreciation and amortization		164				—				(164	)			—				263				—				—				(263	)			—
Corporate and other expenses		29				—				(29	)			—				24				—				—				(24	)			—
Gain on insurance and business interruption settlements		(10	)			—				—				(10	)			(5	)			—				—				—				(5	)
Total expenses		1,041				(2	)			(193	)			846				939				2				(54	)			(287	)			600
Operating Profit - All Owned Hotel EBITDA	$	148			$	—			$	193			$	341			$	(95	)		$	(2	)		$	8			$	287			$	198

		Year-to-date ended September 30, 2022																				Year-to-date ended September 30, 2021
						Adjustments																				Adjustments
		GAAP Results				Severance at hotel properties				All Owned Hotel adjustments				Depreciation and corporate level items				All Owned Hotel Results				GAAP Results				Severance at hotel properties				All Owned Hotel adjustments				Depreciation and corporate level items				All Owned Hotel Results
Revenues
Room		$	2,251			$	—			$	(28	)		$	—			$	2,223			$	1,237			$	—			$	(20	)		$	—			$	1,217
Food and beverage			1,032				—				(5	)			—				1,027				405				—				7				—				412
Other			361				—				(2	)			—				359				250				—				5				—				255
Total revenues			3,644				—				(35	)			—				3,609				1,892				—				(8	)			—				1,884
Expenses
Room			539				—				(16	)			—				523				324				1				(24	)			—				301
Food and beverage			675				—				(8	)			—				667				313				1				2				—				316
Other			1,275				(2	)			(22	)			—				1,251				919				3				(48	)			—				874
Depreciation and amortization			498				—				—				(498	)			—				597				—				—				(597	)			—
Corporate and other expenses			77				—				—				(77	)			—				73				—				—				(73	)			—
Gain on insurance and business interruption settlements			(17	)			—				—				6				(11	)			(5	)			—				—				—				(5	)
Total expenses			3,047				(2	)			(46	)			(569	)			2,430				2,221				5				(70	)			(670	)			1,486
Operating Profit - All Owned Hotel EBITDA		$	597			$	2			$	11			$	569			$	1,179			$	(329	)		$	(5	)		$	62			$	670			$	398