Host Marriott earnings in '95 rose 16% to $311 million Lodging

February 29, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Host Marriott Corp. yesterday reported that its earnings before interest, taxes and noncash charges on continuing operations rose 16 percent to $311 million in 1995, as it continued to benefit from acquisitions of high-caliber hotels and the surging lodging industry.

Although the Bethesda-based hotel owner's growth was driven primarily from the purchase of nine so-called full-service hotels for $390 million, the company also improved earnings 12 percent at its existing full-service properties.

"The company's portfolio of premier business meeting hotels continues to strengthen," said Terence C. Golden, Host Marriott's chief executive officer. "Host Marriott was extremely successful in carrying out its strategy in 1995. We are very pleased with our growth."

The company's revenues also were up for the year, rising 27 percent over its 1994 performance to $484 million.

In addition to acquisitions, Host Marriott narrowed its business focus by spinning off its services group, which operates concessions, restaurants and shops in airports and along toll highways. It also sold 41 limited-service hotels through sale-leaseback arrangements for $335 million, and raised $1.4 billion to finance future purchases and refinance debt.

That money already has allowed Host Marriott to invest $400 million this year to buy five hotels, including the 1,335-room San Diego Marriott Hotel and Marina.

Host Marriott now controls 93 hotels.

For the quarter ended Dec. 29, earnings before interest, taxes and noncash charges -- which reflects the financial health of real estate companies -- climbed 19.2 percent to $99 million. Revenues jumped to $165 million, a 38.6 percent increase.

But Host Marriott is still struggling with a large -- albeit improving -- debt level, which caused it to suffer a $62 million, or 39 cents per share, operating loss for the year, compared with a $13 million, or nine cents per share, loss in 1994.

In the quarter, its operating loss was $49 million, or 31 cents per share, compared with a loss of $6 million, four cents per share, in the year-ago quarter.

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