Host Hotels ends second quarter with $505 million of cash, $600 million borrowing availability

By Jennifer Lanning Drey

Portland, Ore., July 16 - Host Hotels & Resorts, Inc. ended the second quarter with $505 million of cash and cash equivalents and $600 million of available capacity under its revolving credit facility, Larry K. Harvey, chief financial officer of Host, reported Wednesday during the company's second-quarter earnings conference call.

"Due to the level of disruption in the credit markets, we are maintaining additional cash on hand for working capital purposes," Harvey said.

Host had $488 million of cash and cash equivalents at Dec. 31, 2007, according to its earnings release.

During the second quarter, the company sold its Sheraton Suites Tampa Airport facility for $24 million, and Host has identified additional asset sales that could provide as much as $150 million in 2008. However, potential buyers are finding it difficult to obtain financing due to conditions in the credit markets, W. Edward Walter, Host's chief executive officer, said during the call.

Host also continues to evaluate domestic acquisitions, but is not optimistic it will find any near-term opportunities that meet its criteria.

"When your stock is at the price that our stock is at, you need to be comfortable that there are fairly great returns coming out of a particular individual acquisition in order to pursue that as opposed to buying back stock," he said.

Host repurchased $37 million of its common stock during the second quarter.

Also during the period, Host entered into a $210 million term loan under its credit facility. The proceeds were used to repay $100 million outstanding on the company's revolving credit facility.

Host reported second-quarter net income of $190 million, up from $149 million in the second quarter of 2007.

Host Hotels is a Bethesda, Md.-based real estate investment trust that primarily engages in the ownership and operation of hotel properties.

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