Host Marriott Reports Strong Results of Operations for Second Quarter 2005

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. October 14, 2008

MARYLAND, July 20, 2005. Host Marriott Corporation , the nation's largest lodging real estate investment trust (REIT), today announced results of operations for the second quarter ended June 17, 2005. Second quarter results include the following:

Total revenue increased 10.6% to $993 million for the second quarter and 8.1% to $1,811 million for year-to-date 2005. -- Net income (loss) was $91 million and $97 million for the second quarter and year-to-date 2005, respectively, compared to $17 million and $(14) million for the second quarter and year-to-date 2004, respectively. Earnings (loss) per diluted share was $.22 for both the second quarter and year-to-date 2005 and $.02 and $(.10) for the second quarter and year-to-date 2004, respectively. Net income (loss) includes gains of $17 million ($.04 per share) and $15 million ($.04 per share) for the second quarter and year-to-date 2005, respectively, and losses of $(12) million ($(.04) per share) and $(24) million ($(.08) per share) for the second quarter and year-to- date 2004, respectively, associated with refinancing the Company's senior notes and the redemption of its Class B preferred stock, combined with gains on hotel dispositions and, in 2005, the gain from the sale of 85% of the Company's interest in CBM Joint Venture LLC, a joint venture that owns 120 Courtyard by Marriott hotels. For further detail, refer to the "Schedule of Significant Transactions Affecting Earnings per Share and Funds From Operations per Diluted Share" attached to this press release. - Adjusted EBITDA, which is Earnings before Interest Expense, Income Taxes, Depreciation, Amortization and other items, increased 17.4% to $256 million for the second quarter and 14.9% to $448 million for year- to-date 2005 (adjusted EBITDA has been reduced by $2 million for distributions to minority interest partners of Host Marriott L.P. for both the second quarter and year-to-date 2005). - Funds from Operations (FFO) per diluted share increased 48% to $.31 for the second quarter and 50% to $.51 for year-to-date 2005. Costs associated with refinancing the Company's senior notes and the redemption of its Class B preferred stock reduced the Company's FFO per diluted share for the second quarter and year-to-date 2005 by $.06 and $.09, respectively, compared to a reduction of $.08 and $.13 for the second quarter and year-to-date 2004, respectively.

Adjusted EBITDA, FFO per diluted share and comparable hotel adjusted operating profit margins (discussed below) are non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission (SEC). See the discussion included in this press release for information regarding these non-GAAP financial measures.

Operating Results

Comparable hotel RevPAR for the second quarter of 2005 increased 9.8% and comparable hotel adjusted operating profit margins increased 2.0 percentage points when compared to the second quarter of 2004. The Company's second quarter increases in comparable hotel RevPAR and comparable hotel adjusted operating profit margins were driven by an 8.8% increase in average room rates and a 0.7 percentage point increase in occupancy. Year-to-date 2005 comparable hotel RevPAR increased 8.8% (comprised of a 7.9% increase in average room rates and an increase in occupancy of 0.6 percentage points), while comparable hotel adjusted operating profit margins increased 1.6 percentage points when compared to year-to-date 2004.

Christopher J. Nassetta, president and chief executive officer, stated, "We had an outstanding second quarter as we continue to benefit from significant increases in average room rates, as well as improving occupancy. We expect that lodging demand and business travel will continue to increase, driving continued strong results in the second half of 2005."

Financing Transactions and Balance Sheet

On May 20, 2005, the Company redeemed all four million shares of its 10% Class B Cumulative Redeemable preferred stock for an aggregate redemption price of approximately $101 million including accrued dividends. During the second quarter, the Company also used the remaining proceeds of $345 million from the March 10, 2005 issuance of 6 3/8% Series N senior notes to redeem or prepay $329 million of debt and to pay the related prepayment premiums.

On March 29, 2005, the Company completed the sale of 85% of its interest in CBM Joint Venture LLC for approximately $92 million, which resulted in a gain of approximately $42 million, net of tax. The proceeds from this sale will be reinvested in either the acquisition of upper-upscale or luxury hotels, return on investment/repositioning projects, repayment of debt or for other general corporate purposes.

As of June 17, 2005, the Company had $404 million of cash and cash equivalents and $167 million of restricted cash. The Company has $575 million of availability under its credit facility and no amounts outstanding.

W. Edward Walter, executive vice president and chief financial officer, stated, "The significant improvement in our operations combined with the strengthened balance sheet leaves the company well positioned to pursue our strategy of acquisitions, investments in our portfolio and other corporate goals."

2005 Outlook

The Company expects comparable hotel RevPAR for the third quarter of 2005 and full year 2005 to increase approximately 6.5% to 8.0% and 8.0% to 9.0%, respectively. For full year 2005, the Company also expects operating profit margins under GAAP to increase approximately 200 basis points to 240 basis points and comparable hotel adjusted operating profit margins to increase approximately 120 basis points to 150 basis points as compared to 2004. Based upon this guidance, the Company estimates that for 2005 its:

-- earnings (loss) per diluted share should be approximately $(.05) to $(.04) for the third quarter and $.28 to $.32 for the full year; -- net income (loss) should be approximately $(14) million to $(9) million for the third quarter and $130 million to $147 million for the full year; -- Adjusted EBITDA should be approximately $889 million to $909 million for the full year, both of which have been reduced by approximately $6 million for distributions to minority interest partners of Host Marriott, L.P.; and -- FFO per diluted share should be approximately $.16 to $.17 for the third quarter and $1.05 to $1.09 for the full year (including a charge of approximately $36 million, or $.09 per diluted share, for the full year, related to the refinancing of senior notes and the redemption of the Class B preferred stock).

Host Marriott is a Fortune 500 lodging real estate company that currently owns or holds controlling interests in 107 upper-upscale and luxury hotel properties primarily operated under premium brands, such as Marriott(R), Ritz- Carlton(R), Hyatt(R), Four Seasons(R), Fairmont(R), Hilton(R) and Westin(R) (*). For further information, please visit the Company's website at http://www.hostmarriott.com/.

This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete pending acquisitions and dispositions; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes and other risks and uncertainties associated with our business described in the Company's filings with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of July 19, 2005, and the Company undertakes no obligation to update any forward- looking statement to conform the statement to actual results or changes in the Company's expectations.