Host Hotels & Resorts, Inc. Provides Updated Guidance Due to the Effects of Hurricane Sandy

 Host Hotels & Resorts, Inc. Provides Updated Guidance Due to the Effects of
                               Hurricane Sandy

PR Newswire

BETHESDA, Md., Nov. 12, 2012

BETHESDA, Md., Nov. 12, 2012 /PRNewswire/ -- Host Hotels & Resorts, Inc.
(NYSE: HST) today announced that several of the Company's properties in New
York, Massachusetts, New Jersey, Maryland and Pennsylvania have reported some
level of damage or power outage due to Hurricane Sandy; however, the Company
is very pleased to report that there were no reported injuries to guests or
staff. The Company also appreciates the exceptional teams at all of its east
coast properties for their tremendous efforts during this storm. The most
significant damage took place at the New York Marriott Downtown in lower
Manhattan. This hotel was subject to an evacuation order from the city of New
York, lost electrical power and steamservice (used for heating), experienced
water damage to its basement and lobby areas and was closed for 15 days.
Electricity, steam and the damaged areas have been restored and the hotel
reopened today. In addition, although the W New York, Union Square, the
Sheraton Parsippany and the Gaithersburg Marriott Washingtonian Center did not
suffer material damage, the hotels were closed due to the loss of power and/or
steam for periods of time ranging from two to eight days. In addition to the
impactin New York, the storm also affected markets throughout the Northeast
and Mid-Atlantic, particularly in Washington, D.C. The reduction in demand in
these regions was driven primarily by lower levels of transient business,
although there were alsoa few group cancellations.The Company has begun the
process of assessing and quantifying the damage amounts, both for property
damage and business interruption.

Based on preliminary information regarding the impact of Hurricane Sandy and
assuming no insurance recovery this year, the Company is revising its 2012
guidance as follows:

  oComparable hotel RevPAR will increase 6.0% to 6.25%;
  oTotal revenues under GAAP would increase 6.8% to 7.2%;
  oTotal comparable hotel revenues would increase 5.0% to 5.4%;
  oOperating profit margins under GAAP would increase approximately 140 basis
    points to 160 basis points; and
  oComparable hotel adjusted operating profit margins will increase
    approximately 120 basis points to 135 basis points.

Based upon these parameters, the Company estimates that its revised 2012
guidance is as follows:

  oearnings per diluted share should range from approximately $.13 to $.15;
  onet income should range from $100million to $113million;
  oNAREIT FFO per diluted share should be approximately $1.00 to $1.02;
  oAdjusted FFO per diluted share should be approximately $1.05 to $1.07; and
  oAdjusted EBITDA should be approximately $1,147million to $1,160million.

See the 2012 Forecast Schedules for other assumptions used in the forecasts
and items that may affect forecasted results. 

ABOUT HOST HOTELS & RESORTS
Host Hotels & Resorts, Inc. is an S&P 500 and Fortune 500 company and is the
largest lodging real estate investment trust and one of the largest owners of
luxury and upper-upscale hotels. The Company currently owns 104 properties in
the United States and 16 properties internationally totaling approximately
65,000 rooms. The Company also holds non-controlling interests in a joint
venture in Europe that owns 14 hotels with approximately 4,400 rooms and a
joint venture in Asia that owns one hotel with approximately 300 rooms in
Australia and a minority interest in seven hotels with approximately 1,750
rooms in India, two in Bangalore and five that are in various stages of
development in two cities. Guided by a disciplined approach to capital
allocation and aggressive asset management, the Company partners with premium
brands such as Marriott^®, Ritz-Carlton^®, ^ Westin^®, Sheraton^®, W^®, St.
Regis^®, Le Méridien^®, The Luxury Collection^®, Hyatt^®, Fairmont^®, Four
Seasons^®, Hilton^®, Swissôtel^®, ibis^®, Pullman^®, and Novotel^®* in the
operation of properties in over 50 major markets worldwide. For additional
information, please visit the Company's website at www.hosthotels.com.

Note: This press release contains forward-looking statements within the
meaning of federal securities regulations. These forward-looking statements
include forecast results and are identified by their use of terms and phrases
such as "anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "should," "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 effect on travel of potential 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 acquisitions and dispositions; and our ability to continue to satisfy
complex rules in order for us to remain a REIT for federal income tax purposes
and other risks and uncertainties associated with our business described in
the Company's annual report on Form 10‑K, quarterly reports on Form 10-Q and
current reports on Form 8-K filed 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 November 12, 2012, 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.

* This press release contains registered trademarks that are the exclusive
property of their respective owners. None of the owners of these trademarks
has any responsibility or liability for any information contained in this
press release.

*** Tables to Follow ***

HOST HOTELS & RESORTS, INC.
Reconciliation of Net Income to EBITDA, Adjusted EBITDA and NAREIT and
Adjusted Funds From Operations per Diluted Share for 2012 Forecasts (a)
(unaudited, in millions, except per share amounts)

                                     2012
                                      Low-end    High-end

                                      of range  of range
Net income                           $            $        
                                     100                 113
 Interest expense                 372                  372
 Depreciation and amortization    687                  687
 Income taxes                     21                   21
 Discontinued operations          2                    2
EBITDA                               1,182                1,195
 Gain on dispositions             (48)                 (48)
 Acquisition costs                6                    6
 Amortization of deferred gains   (5)                  (5)
 Equity investment adjustments:
 Equity in earnings of        (4)                  (4)
affiliates
 Pro rata Adjusted EBITDA of  32                   32
equity investments
 Consolidated partnership
adjustments:
 Pro rata Adjusted EBITDA
attributable to non-controlling
partners in other                    (16)                 (16)

 consolidated
partnerships
Adjusted EBITDA                      $       1,147 $       1,160
                                     2012
                                      Low-end    High-end

                                      of range  of range
Net income                           $            $        
                                     100                 113
Less: Net income attributable to    (3)                  (3)
non-controlling interests
Net income attributable to Host      97                   110
Inc.
Adjustments:
 Gain on dispositions             (48)                 (48)
 Depreciation and amortization    685                  685
 Amortization of deferred gains   (5)                  (5)
 Partnership adjustments          14                   14
 FFO of non-controlling interests (11)                 (11)
of Host LP
NAREIT FFO                           732                  745
Adjustments:
 Acquisition costs                8                    8
 Loss on debt extinguishments     32                   32
 Loss attributable to             (1)                  (1)
non-controlling interests
Adjusted FFO                         771                  784
Adjustment for dilutive securities:
 Assuming conversion of           31                   31
Exchangeable Senior Debentures
Diluted Adjusted FFO                 $            $        
                                     802                 815
Weighted average diluted shares –    718.9                718.9
EPS
Weighted average diluted shares –    760.6                760.6
NAREIT and Adjusted FFO (b)
Earnings per diluted share           $           $         
                                     .13                  .15
NAREIT FFO per diluted share         $            $        
                                     1.00                 1.02
Adjusted FFO per diluted share       $            $        
                                     1.05                 1.07



(a) The forecasts were based on the below assumptions:

  oComparable hotel RevPAR will increase 6.0% to 6.25% for the low and high
    ends of the forecasted range, respectively.
  oComparable hotel adjusted operating profit margins will increase 120 basis
    points to 135 basis points for the low and high ends of the forecasted
    range, respectively.
  oInterest expense includes approximately $33million related to non-cash
    interest expense for exchangeable senior debentures, amortization of
    original issue discounts and deferred financing fees.
  oNo insurance recovery in 2012 for property damage and business
    interruption for the effects ofHurricane Sandy.
  oWe expect to spend approximately $165million to $175million on
    ROI/redevelopment capital expenditures, approximately $125million to
    $135million on acquisition expenditures and approximately $330 million to
    $340 million on renewal and replacement expenditures.
  oWe expect to complete the sale of $300million to $400million of
    properties during the fourth quarter. However, due to uncertainty around
    the completion and timing of these transactions, we have not adjusted the
    forecast for any use of proceeds, gains on sale or adjusted the number of
    comparable properties.

(b) The Adjusted FFO per diluted share includes 41million shares for the
dilution of exchangeable senior debentures.

HOST HOTELS & RESORTS, INC.
Schedule of Comparable Hotel Adjusted Operating Profit Marginfor 2012
Forecasts (a)
(unaudited, in millions, except hotel statistics)

                                 2012
                                  Low-end      High-end
                                  of range    of range
Operating profit margin under    8.0%                   8.2%
GAAP (b)
Comparable hotel adjusted        23.7%                  23.85%
operating profit margin (c)
Comparable hotel sales
 Room                         $       2,852   $       2,858
 Other                        1,580                  1,590
 Comparable hotel 4,432                  4,448
sales (d)
Comparable hotel expenses
 Rooms and other departmental 1,899                  1,902
costs
 Management fees, ground rent 1,483                  1,485
and other costs
 Comparable hotel 3,382                  3,387
expenses (e)
Comparable hotel adjusted        1,050                  1,061
operating profit
Non-comparable hotel results,    171                    171
net
Loss from hotels leased from HPT (5)                    (5)
Depreciation and amortization    (687)                  (687)
Corporate and other expenses     (105)                  (105)
 Operating profit $         424 $         435



(a) Forecast comparable hotel results include the 104 hotels that were
classified as comparable as of September7, 2012. See "Comparable Hotel
Operating Statistics" in Notes to Financial Information. No assurances can be
made as to the hotels that will be in the comparable hotel set for 2012. Also,
see the notes to the "Reconciliation of Net Income to EBITDA, Adjusted EBITDA
and NAREIT and Adjusted Funds From Operations per Diluted Share for 2012
Forecasts" for other forecast assumptions and further discussion of our
comparable hotel set.

(b) Operating profit margin under GAAP is calculated as the operating profit
divided by the forecast total revenues per the consolidated statements of
operations. See (d) below for forecasted revenues.

(c) Comparable hotel adjusted operating profit margin is calculated as the
comparable hotel adjusted operating profit divided by the comparable hotel
sales per the table above.

(d) The reconciliation of forecast total revenues to the forecast comparable
hotel sales is as follows (in millions):

                                    2012
                                     Low-end    High-end
                                     of range  of range
Revenues                            $       5,282 $       5,300
Non-comparable hotel revenues       (670)                (672)
Revenues for hotels leased from HPT (231)                (231)
Hotel revenues for which we record  51                   51
rental income, net
 Comparable hotel sales  $       4,432 $        4,448

(e) The reconciliation of forecast operating costs and expenses to the
comparable hotel expenses is as follows (in millions):

                                   2012
                                    Low-end     High-end
                                    of range   of range
Operating costs and expenses       $       4,858  $        4,865
Non-comparable hotel and other     (500)                 (502)
expenses
Expenses for hotels leased from    (236)                 (236)
HPT
Hotel expenses for which we record 52                    52
rental income
Depreciation and amortization      (687)                 (687)
Corporate and other expenses       (105)                 (105)
 Comparable hotel       $        3,382 $        3,387
expenses



HOST HOTELS & RESORTS, INC.
Notes to Financial Information

FORECASTS

Our forecast of earnings per diluted share, NAREIT and Adjusted FFO per
diluted share, EBITDA, Adjusted EBITDA and comparable hotel adjusted operating
profit margins are forward-looking statements and are not guarantees of future
performance and involve known and unknown risks, uncertainties and other
factors which may cause actual results and performance to differ materially
from those expressed or implied by these forecasts. Although we believe the
expectations reflected in the forecasts are based upon reasonable assumptions,
we can give no assurance that the expectations will be attained or that the
results will not be materially different. Risks that may affect these
assumptions and forecasts include the following:the recovery from Hurricane
Sandy is ongoing and the effects on future hotel demand are difficult to
quantify at this time based on the preliminary information
available;potential changes in overall economic outlook make it inherently
difficult to forecast the level of RevPAR and margin growth; the amount and
timing of acquisitions and dispositions of hotel properties is an estimate
that can substantially affect financial results, including such items as net
income, depreciation and gains on dispositions; the level of capital
expenditures may change significantly, which will directly affect the level of
depreciation expense and net income; the amount and timing of debt payments
may change significantly based on market conditions, which will directly
affect the level of interest expense and net income; the amount and timing of
transactions involving shares of our common stock may change based on market
conditions; and other risks and uncertainties associated with our business
described herein and in our annual report on Form 10‑K, quarterly reports on
Form 10-Q and current reports on Form 8‑K filed with the SEC.

COMPARABLE HOTEL OPERATING STATISTICS

To facilitate a year-to-year comparison of our operations, we present certain
operating statistics (i.e., RevPAR, average daily rate and average occupancy)
and operating results (revenues, expenses, adjusted operating profit and
associated margins) for the periods included in this report on a comparable
hotel basis. Because these statistics and operating results are for our hotel
properties, they exclude results for our non-hotel properties and other real
estate investments. We define our comparable hotels as properties:

  (i)that are owned or leased by us and the operations of which are included
  in our consolidated results, whether as continuing operations or
  discontinued operations, for the entirety of the reporting periods being
  compared; and

  (ii)that have not sustained substantial property damage or business
  interruption, or undergone large-scale capital projects (as further defined
  below) during the reporting periods being compared.

The hotel business is capital-intensive and renovations are a regular part of
the business. Generally, hotels under renovation remain comparable hotels. A
large scale capital project that would cause a hotel to be excluded from our
comparable hotel set is an extensive renovation of several core aspects of the
hotel, such as rooms, meeting space, lobby, bars, restaurants and other public
spaces. Both quantitative and qualitative factors are taken into consideration
in determining if the renovation would cause a hotel to be removed from the
comparable hotel set, including unusual or exceptional circumstances such as:
a reduction or increase in room count, rebranding, a significant alteration of
the business operations, or the closing of the hotel during the renovation.

We do not include an acquired hotel in our comparable hotel set until the
operating results for that hotel have been included in our consolidated
results for one full calendar year. For example, we acquired the Westin
Chicago River North in August of 2010. The hotel was not included in our
comparable hotels until January 1, 2012. Hotels that we sell are excluded from
the comparable hotel set once the transaction has closed. Similarly, hotels
are excluded from our comparable hotel set from the date that they sustain
substantial property damage or business interruption or commence a large-scale
capital project. In each case, these hotels are returned to the comparable
hotel set when the operations of the hotel have been included in our
consolidated results for one full calendar year after completion of the repair
of the property damage or cessation of the business interruption, or the
completion of large-scale capital projects, as applicable.

NON-GAAP FINANCIAL MEASURES

Included in this press release are 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. They are as follows: (i) FFO and FFO per diluted share
(both NAREIT and Adjusted), (ii) EBITDA, (iii) Adjusted EBITDA and (iv)
Comparable Hotel Operating Results. The following discussion defines these
terms and presents why we believe they are useful supplemental measures of our
performance.

NAREIT FFO and NAREIT FFO per Diluted Share

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.
NAREIT defines FFO as net income (calculated in accordance with GAAP)
excluding gains and losses from sales of real estate, the cumulative effect of
changes in accounting principles, real estate-related depreciation,
amortization and impairments and adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and joint
ventures are calculated to reflect our pro rata FFO of those entities on the
same basis.

We believe that NAREIT FFO per diluted share is a useful supplemental measure
of our operating performance and that the presentation of NAREIT FFO per
diluted share, when combined with the primary GAAP presentation of earnings
per share, provides beneficial information to investors. By excluding the
effect of real estate depreciation, amortization, impairments and gains and
losses from sales of depreciable real estate, all of which are based on
historical cost accounting and which may be of lesser significance in
evaluating current performance, we believe that such measures can facilitate
comparisons of operating performance between periods and with other REITs,
even though NAREIT FFO per diluted share does not represent an amount that
accrues directly to holders of our common stock. Historical cost accounting
for real estate assets implicitly assumes that the value of real estate assets
diminishes predictably over time. As noted by NAREIT in its April 2002 "White
Paper on Funds From Operations," since real estate values have historically
risen or fallen with market conditions, many industry investors have
considered presentation of operating results for real estate companies that
use historical cost accounting to be insufficient by themselves. For these
reasons, NAREIT adopted the FFO metric in order to promote an industry-wide
measure of REIT operating performance.

Adjusted FFO per Diluted Share

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 earnings per share and FFO per diluted share as
defined by NAREIT, provides useful supplemental information that is beneficial
to an investor's complete 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:

  oGains 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 deferred financing costs associated with the
    original issuance of the debt being redeemed or retired. 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.
  oAcquisition Costs – Under GAAP, costs associated with completed property
    acquisitions 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.
  oLitigation 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.

EBITDA

Earnings before Interest Expense, Income Taxes, Depreciation and Amortization
("EBITDA") is a commonly used measure of performance in many industries.
Management believes EBITDA provides useful information to investors regarding
our results of operations because it helps us and our investors evaluate the
ongoing operating performance of our properties after removing the impact of
the Company's capital structure (primarily interest expense) and its 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, is widely used by management in the annual
budget process and for our compensation programs.

Adjusted EBITDA

Historically, management has adjusted EBITDA when evaluating the performance
of Host Inc. and Host LP because we believe that the exclusion of certain
additional items described below provides useful supplemental information to
investors regarding our ongoing operating performance and that the
presentation of Adjusted EBITDA, when combined with the primary GAAP
presentation of net income, is beneficial to an investor's complete
understanding of our operating performance. Adjusted EBITDA also is a relevant
measure in calculating certain credit ratios. We adjust EBITDA for the
following items, which may occur in any period, and refer to this measure as
Adjusted EBITDA:

  oReal Estate Transactions – We exclude the effect of gains and losses,
    including the amortization of deferred gains, recorded on the disposition
    or acquisition of depreciable assets and property insurance gains in our
    consolidated statement of operations because we believe that including
    them in Adjusted EBITDA is not consistent with reflecting the ongoing
    performance of our assets. In addition, material gains or losses from the
    depreciated value of the disposed assets could be less important to
    investors given that the depreciated asset value often does not reflect
    the market value of real estate assets as noted above.
  oEquity Investment Adjustments – We exclude the equity in earnings (losses)
    of affiliates as presented in our consolidated statement of operations
    because it includes our pro rata portion of the depreciation, amortization
    and interest expense related to such investments, which are excluded from
    EBITDA. We include our pro rata share of the Adjusted EBITDA of our equity
    investments as we believe this reflects more accurately the performance of
    our investments. The pro rata Adjusted EBITDA of equity investments is
    defined as the EBITDA of our equity investments adjusted for any gains or
    losses on property transactions multiplied by our percentage ownership in
    the partnership or joint venture.
  oConsolidated Partnership Adjustments – We deduct the non-controlling
    partners' pro rata share of Adjusted EBITDA of our consolidated
    partnerships as this reflects the non-controlling owners' interest in the
    EBITDA of our consolidated partnerships. The pro rata Adjusted EBITDA of
    non-controlling partners is defined as the EBITDA of our consolidated
    partnerships adjusted for any gains or losses on property transactions
    multiplied by the non-controlling partners' percentage ownership in the
    partnership or joint venture.
  oCumulative Effect of a Change in Accounting Principle – Infrequently, the
    Financial Accounting Standards Board promulgates new accounting standards
    that require the consolidated statement of operations to reflect the
    cumulative effect of a change in accounting principle. We exclude these
    one-time adjustments because they do not reflect our actual performance
    for that period.
  oImpairment Losses – We exclude the effect of impairment losses recorded
    because we believe that including them in Adjusted EBITDA is not
    consistent with reflecting the ongoing performance of our remaining
    assets. In addition, we believe that impairment charges, which are based
    off of historical cost accounting values, are similar to gains and losses
    on dispositions and depreciation expense, both of which are excluded from
    EBITDA.
  oAcquisition Costs – Under GAAP, costs associated with completed property
    acquisitions 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.

Limitations on the Use of NAREIT FFO per Diluted Share, Adjusted FFO per
Diluted Share, EBITDA and Adjusted EBITDA

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

Comparable Hotel Operating Results

We present certain operating results for our hotels, such as hotel revenues,
expenses, adjusted operating profit (and the related margin) and food and
beverage adjusted profit (and the related margin), on a comparable hotel, or
"same store," basis as supplemental information for investors. Our comparable
hotel results present operating results for hotels owned during the entirety
of the periods being compared without giving effect to any acquisitions or
dispositions, significant property damage or large scale capital improvements
incurred during these periods. We present these comparable hotel operating
results by eliminating corporate-level costs and expenses related to our
capital structure, as well as depreciation and amortization. We eliminate
corporate-level costs and expenses to arrive at property-level results because
we believe property-level results provide investors with supplemental
information into the ongoing operating performance of our hotels. We eliminate
depreciation and amortization because, even though depreciation and
amortization 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 have historically risen or fallen
with market conditions, many real estate industry investors have considered
presentation of historical cost accounting for operating results to be
insufficient by themselves.

As a result of the elimination of corporate-level costs and expenses and
depreciation and amortization, the comparable hotel operating results we
present do not represent our total revenues, expenses, operating profit or
operating profit margin and should not be used to evaluate our performance as
a whole. Management compensates for these limitations by separately
considering the impact of these excluded items to the extent they are material
to operating decisions or assessments of our operating performance. Our
consolidated statements of operations include such amounts, all of which
should be considered by investors when evaluating our performance.

We present these hotel operating results on a comparable hotel basis because
we believe that doing so provides investors and management with useful
information for evaluating the period-to-period performance of our hotels and
facilitates comparisons with other hotel REITs and hotel owners. In
particular, these measures assist management and investors in distinguishing
whether increases or decreases in revenues and/or expenses are due to growth
or decline of operations at comparable hotels (which represent the vast
majority of our portfolio) or from other factors, such as the effect of
acquisitions or dispositions. While management believes that presentation of
comparable hotel results is a "same store" 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
these hotels, as these decisions are based on data for individual hotels and
are not based on comparable hotel results. For these reasons, we believe that
comparable hotel operating results, when combined with the presentation of
GAAP operating profit, revenues and expenses, provide useful information to
investors and management.

(Logo: http://photos.prnewswire.com/prnh/20060417/HOSTLOGO)

SOURCE Host Hotels & Resorts, Inc.

Website: http://www.hosthotels.com
Contact: Gregory J. Larson, Executive Vice President, +1-240-744-5120, or Gee
Lingberg, Vice President, +1-240-744-5275
 
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