Host Hotels & Resorts, Inc. Reports Strong Operating Performance For The First Quarter

Host Hotels & Resorts, Inc. Reports Strong Operating Performance For The First
                                   Quarter

PR Newswire

BETHESDA, Md., May 3, 2013

BETHESDA, Md., May 3, 2013 /PRNewswire/ --Host Hotels & Resorts, Inc. (NYSE:
HST), the nation's largest lodging real estate investment trust ("REIT"),
today announced results of operations for the first quarter ended March31,
2013. On an "As Adjusted" basis, as described herein, the improvements in the
Company's results were driven by a 5.1% increase in comparable hotel RevPAR
and strong performances at its luxury and resort and conference center
properties.

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

As of January1, 2013, the Company adopted calendar quarter reporting periods,
compared to 2012 where the Company reported based on the fiscal quarters that
had been used by Marriott International. Accordingly, the Company's revenues,
net income, Adjusted EBITDA, diluted earnings (loss) per share and NAREIT and
Adjusted FFO per diluted share quarterly results for 2013 are not comparable
to the historical quarterly results of 2012 due to the change in periods. To
enable investors to better evaluate its performance, the Company has presented
2012 RevPAR and certain historical results on a calendar quarter basis (the
"2012 As Adjusted" results). The 2012 As Adjusted first quarter results
include (i)an adjustment to add the operations from March24, 2012 through
March31, 2012 for the Company's Marriott-managed hotels and (ii)an
adjustment to add the March operations for its hotels managed by Ritz-Carlton,
Hyatt, Starwood and other managers who report on a calendar basis, as the
Company's historical first quarter results only included January and February
operations for these properties. Accordingly, the following discussion of
operating performance will include a comparison between the three months of
operations ended March 31 for both years, which management believes is an
important supplemental measure of the Company's performance. For further
discussion of the 2012 As Adjusted results, see the Notes to the Financial
Information included in this release.



Operating Results

(in millions, except per share and hotel statistics)
                  Quarter
                 ended
                             As Adjusted            As Reported
                 March 31,   March 31,              March 23,
                 2013        2012 (a)      % Change 2012 (c)          % Change
                                           (b)
Total owned      $       $         4.6%     $       892 38.8%
hotel revenues   1,238      1,183
Comparable hotel 1,165       1,135         2.6%     N/M             N/M
revenues (a)
Comparable hotel 142.87      135.98        5.1%         N/M
RevPAR                                              N/M
Net income       60          59            1.7%     —                 N/M
Adjusted EBITDA  283         257           10.1%    176               60.8%
(a)
Diluted earnings $      $       14.3%    $          N/M
(loss) per share   .08      .07                  —
NAREIT FFO per
diluted share    .29         .24           20.8%    .14               107.1%
(a)
Adjusted FFO per
diluted share    .28         .24           16.7%    .14               100.0%
(a)

__________
N/M=Not Meaningful
    NAREIT Funds From Operations ("FFO") per diluted share, Adjusted FFO per
    diluted share (which excludes debt extinguishment costs and other
    expenses), Adjusted EBITDA (which is earnings before interest, taxes,
    depreciation, amortization and other items) and comparable hotel
    operating results (including comparable hotel revenues and comparable
    hotel adjusted operating profit margins) are non-GAAP (U.S. generally
(a) accepted accounting principles) financial measures within the meaning of
    the rules of the Securities and Exchange Commission ("SEC"). In addition,
    the presentation of 2012 As Adjusted results, including total owned hotel
    revenues and net income, are also non-GAAP financial measures. See the
    Notes to Financial Information included in this press release on why the
    Company believes these supplemental measures are useful, reconciliations
    to the applicable GAAP measure and the limitations on their use and
    information on how the 2012 As Adjusted results were calculated.
    The March 31, 2012 As Adjusted results include one additional day of
(b) operations in February compared to March 31, 2013 due to the 2012 leap
    year.
(c) Historical operating results for the first quarter 2012 as filed with the
    SEC on April 25, 2012.



The Company's owned hotel revenues increased 4.6% for the first quarter of
2013 compared to the 2012 As Adjusted results due to the strong performance of
its comparable properties, as well as incremental revenues of $21million from
the Grand Hyatt Washington, which was acquired in July of 2012. The increase
in comparable hotel RevPAR as adjusted was primarily driven by strong
improvements in average room rates. For the first quarter, average room rates
improved 4.0%, while occupancy improved 0.7 percentage points to 72.3%. The
improvements in revenues led to solid margin growth as comparable hotel
adjusted operating profit margins increased 85 basis points for the first
quarter compared to 2012 As Adjusted. 

During the first quarter of 2013, the Company recognized a previously deferred
gain of approximately $11million related to the 2005 eminent domain claim by
the State of Georgia for 2.9 acres of land at the Atlanta Marriott Perimeter
Center for highway expansion. The Company received the cash in 2007 but could
not recognize the gain until certain requirements were completed. The gain has
been included in NAREIT FFO per diluted share, which is consistent with the
treatment of gains recognized on the disposition of undepreciated assets.
However, due to the significant passage of time since receipt of the proceeds,
the Company has excluded the gain from its Adjusted FFO per diluted share and
Adjusted EBITDA for the quarter.

INVESTMENTS

  oREDEVELOPMENT AND RETURN ON INVESTMENT EXPENDITURES - The Company invested
    approximately $21million during the first quarter of 2013 in
    redevelopment and return on investment ("ROI") expenditures. These
    projects are designed to increase cash flow and improve profitability by
    capitalizing on changing market conditions and the favorable locations of
    the Company's properties. Projects completed during the first quarter
    included the development of a pavilion at the JW Marriott Desert Springs
    Resort & Spa and the conversion of a former restaurant into meeting space
    at the Westin New York Grand Central. The Company expects ROI investments
    for 2013 of approximately $90million to $100million.

  oCAPITAL EXPENDITURES AT OUR RECENT ACQUISITIONS – In conjunction with the
    acquisition of a property, the Company prepares capital and operational
    improvement plans designed to maximize profitability and enhance the guest
    experience. The Company spent approximately $15million during the first
    quarter of 2013 on properties acquired in 2012 and 2011 and expects to
    invest between $40million and $50million for 2013. During the first
    quarter, the Company completed the renovation of all 888 guest rooms at
    the Grand Hyatt Washington and continued work on the guestrooms renovation
    in the second tower of the Manchester Grand Hyatt San Diego.

  oRENEWAL AND REPLACEMENT EXPENDITURES - The Company invested approximately
    $87million in renewal and replacement expenditures during the first
    quarter. These expenditures are designed to ensure that the high-quality
    standards of both the Company and its operators are maintained. During the
    quarter, major renewal and replacement projects included rooms renovations
    at the Philadelphia Airport Marriott, the San Francisco Marriott Marquis
    and the San Diego Marriott Mission Valley, as well as the renovation of
    almost 40,000 square feet of meeting and public space at The Ritz-Carlton,
    Tysons Corner and over 36,000 square feet of meeting space at the Westin
    Denver Downtown. The Company expects that renewal and replacement
    expenditures for 2013 will total approximately $270million to
    $290million.

VALUE ENHANCEMENT PROJECTS

In addition to the investments described above, the Company looks to enhance
the value of its portfolio by identifying and executing strategies designed to
maximize the highest and best use of all aspects of its properties. In early
April, the Company sold approximately four acres of excess land adjacent to
its Newport Beach Marriott Resort and Spa to a luxury home builder for
$24million. The land, which had previously been used for tennis courts, has
been approved for the development and sale of 79 luxury condominiums. The
Company recognized a gain of approximately $21million, which will be included
in net income, Adjusted EBITDA and Adjusted FFO in the second quarter of this
year.

BALANCE SHEET

During the quarter, the Company issued its first investment grade senior notes
in a $400million offering of 10-year bonds at an interest rate of 3.75%,
which is 100 basis points lower than any non-convertible bond coupon in the
history of the Company. The bonds mature in October of 2023. The proceeds of
the offering, along with available cash, will be used to redeem on May15, the
$400million of 9% SeriesT senior notes due 2017 at 104.5%, which reflects an
$18million call premium. The annual interest savings are $21million per
year. The Company also called the remaining $175million of 2004 exchangeable
debentures for redemption and holders of approximately $174million of the
debentures elected to exchange their debentures for shares of the Company's
common stock totaling approximately 11.7million shares, rather than receive
the cash redemption proceeds, while the remaining $1million of debentures
were redeemed for cash. These shares have been included in our dilutive share
count when determining our full year NAREIT and Adjusted FFO per diluted share
for the past few years.

Subsequent to the end of the quarter, the Company repaid the 4.75%,
$246million mortgage loan on the Orlando World Center Marriott with available
cash. The Company also called $200million of its 6.75% SeriesQ senior notes
due 2016 at 101.125%, which reflects a $2million call premium. The redemption
will be funded through a $150million draw on the revolver portion of its
credit facility and with available cash. After adjusting for these
transactions, including the redemption of the SeriesT senior notes, the
Company will have approximately $380million of cash and cash equivalents,
$692million of available capacity under its credit facility and approximately
$4.8billion of debt. In addition, after adjusting for the above transactions,
the Company's weighted average debt maturity is 5.8 years and its annual cash
interest expense will be approximately $230million.

Also, during the quarter, the Company issued 6.1million shares of common
stock, at an average price of $16.78 per share, for net proceeds of
approximately $102million. These issuances were made in "at-the-market"
offerings pursuant to Sales Agency Financing Agreements with BNY Mellon
Capital Markets, LLC and Scotia Capital (USA) Inc. There is approximately
$198million of issuance capacity remaining under the current agreements.

DIVIDEND

On April15, 2013, the Company paid a regular quarterly cash dividend of $0.10
per share on its common stock to stockholders of record on March28, 2013. The
amount of any future dividend is dependent on the Company's taxable income and
will be determined by the Company's Board of Directors.

2013 OUTLOOK

The Company anticipates that for 2013:

  oComparable hotel RevPAR will increase 5.0% to 7.0%;
  oTotal owned hotel revenues under GAAP will increase 5.4% to 7.5%;
  oTotal comparable hotel revenues will increase 3.8% to 5.8%;
  oOperating profit margins under GAAP will increase approximately 250 basis
    points to 350 basis points; and
  oComparable hotel adjusted operating profit margins will increase
    approximately 60 basis points to 120 basis points.

Based upon these parameters, the Company estimates that its 2013 guidance is
as follows:

  oearnings per diluted share should range from approximately $.31 to $.39;
  onet income should range from $238million to $298million;
  oNAREIT FFO per diluted share should range from approximately $1.22 to
    $1.30;
  oAdjusted FFO per diluted share should range from approximately $1.25 to
    $1.33; and
  oAdjusted EBITDA should be approximately $1,275million to $1,335million.

See the 2013 Forecast Schedules and the Notes to Financial Information 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 103 properties in
the United States and 15 properties internationally totaling approximately
62,500 rooms. The Company also holds non-controlling interests in a joint
venture in Europe that owns 19 hotels with approximately 6,100 rooms and a
joint venture in Asia that owns one hotel in Australia and a minority interest
in two hotels in India and five hotels that are in various stages of
development in India. 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
Meridien^®, The Luxury Collection^®, Hyatt^®, Fairmont^®, Four Seasons^®,
Hilton^®, Swissotel^®, 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 assumptions 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: changes in national and local economic and
business conditions that will affect occupancy rates at our hotels and the
demand for hotel products and services; the impact of geopolitical
developments outside the U.S. on lodging demand; volatility in global
financial and credit markets; operating risks associated with the hotel
business; risks and limitations in our operating flexibility associated with
the level of our indebtedness and our ability to meet covenants in our debt
agreements; risks associated with our relationships with property managers and
joint venture partners; our ability to maintain our properties in a
first-class manner, including meeting capital expenditure requirements; the
effects of hotel renovations on our hotel occupancy and financial results; our
ability to compete effectively in areas such as access, location, quality of
accommodations and room rate structures; risks associated with our ability to
complete acquisitions and dispositions and develop new properties and the
risks that acquisitions and new developments may not perform in accordance
with our expectations; 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 May3, 2013, 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., herein referred to as "we" or "Host Inc.," is a
self-managed and self-administered real estate investment trust ("REIT") that
owns hotel properties. We conduct our operations as an umbrella partnership
REIT through an operating partnership, Host Hotels & Resorts, L.P. ("Host
LP"), of which we are the sole general partner. When distinguishing between
Host Inc. and Host LP, the primary difference is approximately 1.3% of the
partnership interests in Host LP held by outside partners as of March31,
2013, which is non-controlling interests in Host LP in our consolidated
balance sheets and is included in net income attributable to non-controlling
interests in our consolidated statements of operations. Readers are encouraged
to find further detail regarding our organizational structure in our annual
report on Form 10‑K.

Effective January1, 2013, we report quarterly operating results on a calendar
cycle, which is not comparable to the quarterly reporting method used in 2012.
For additional information on the change in reporting periods, comparable
hotel measures and non-GAAP financial measures which we believe is useful to
investors, see the Notes to Financial Information included in this release.



HOST HOTELS & RESORTS, INC.

Condensed Consolidated Balance Sheets (a)

(in millions, except shares and per share amounts)
                                         March 31,             December 31,
                                         2013                  2012
                                          (unaudited)
ASSETS
Property and equipment, net              $       11,284  $      
                                                               11,588
Due from managers                        96                    80
Advances to and investments in           337                   347
affiliates
Deferred financing costs, net            53                    53
Furniture, fixtures and equipment        157                   154
replacement fund
Other                                    300                   319
Restricted cash                          35                    36
Cash and cash equivalents                1,075                 417
 Total assets                 $       13,337  $      
                                                               12,994
LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY
Debt
 Senior notes, including $359million
and $531million, respectively, net of                         $       
                                         $        3,798 3,569
 discount, of Exchangeable Senior
Debentures
 Credit facility, including the       658                   763
$500million term loan
 Mortgage debt                        992                   993
 Other                                86                    86
 Total debt                   5,534                 5,411
Accounts payable and accrued expenses    165                   194
Other                                    353                   372
 Total liabilities            6,052                 5,977
Non-controlling interests—Host Hotels &  175                   158
Resorts, L.P
Host Hotels & Resorts, Inc.
stockholders' equity:
 Common stock, par value $.01,
1,050million shares authorized;
742.8million                            7                     7

 shares and 724.6million shares
issued and outstanding, respectively
 Additional paid-in capital           8,303                 8,040
 Accumulated other comprehensive      14                    12
income
 Deficit                              (1,253)               (1,234)
 Total equity of Host Hotels  7,071                 6,825
& Resorts, Inc. stockholders
Non-controlling interests—other          39                    34
consolidated partnerships
 Total equity                 7,110                 6,859
 Total liabilities,           $       13,337  $      
non-controlling interests and equity                           12,994

__________
    Our condensed consolidated balance sheet as of March31, 2013 has been
(a) prepared without audit. Certain information and footnote disclosures
    normally included in financial statements presented in accordance with
    GAAP have been omitted.



HOST HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Operations (a)

(unaudited, in millions, except per share amounts)
                                         Quarter ended
                                         March 31,           March 23,
                                         2013                2012
Revenues
 Rooms                                $          $        
                                         781                  553
 Food and beverage                    379                 282
 Other                                78                  57
 Owned hotel revenues             1,238               892
 Other revenues                       17                  60
 Total revenues                   1,255               952
Expenses
 Rooms                                221                 160
 Food and beverage                    281                 208
 Other departmental and support       316                 242
expenses
 Management fees                      48                  33
 Other property-level expenses        96                  122
 Depreciation and amortization        177                 149
 Corporate and other expenses         26                  22
 Total operating costs and        1,165               936
expenses
Operating profit                         90                  16
Interest income                          1                   4
Interest expense (b)                     (76)                (86)
Net gains on property transactions and   12                  1
other
Gain (loss) on foreign currency          2                   (1)
transactions and derivatives
Equity in losses of affiliates           (2)                 (2)
Income (loss) before income taxes        27                  (68)
Benefit for income taxes                 7                   13
Income (loss) from continuing operations 34                  (55)
Income from discontinued operations, net 26                  55
of tax
Net income                               60                  —
Less: Net income attributable to        (4)                 (2)
non-controlling interests
Net income (loss) attributable to Host   $          $        
Inc.                                      56                  (2)
Basic and diluted earnings (loss) per
common share:
 Continuing operations                $          $        
                                         .04                 (.08)
 Discontinued operations              .04                 .08
Basic and diluted earnings per common    $          $        
share                                    .08                  —

__________
    Our condensed consolidated statements of operations presented above have
(a) been prepared without audit. Certain information and footnote disclosures
    normally included in financial statements presented in accordance with
    GAAP have been omitted.
    Interest expense includes non-cash charges of $4 million and $5 million
(b) related to the exchangeable senior debentures for 2013 and 2012,
    respectively. 



HOST HOTELS & RESORTS, INC.

Earnings (Loss) per Common Share

(unaudited, in millions, except per share amounts)
                                                   Quarter ended
                                                   March 31,     March 23,
                                                   2013          2012
Net income                                         $       $      
                                                       60        —
 Less: Net income attributable to              (4)           (2)
non-controlling interests
Net income (loss) attributable to Host Inc         $       $      
                                                       56        (2)
Diluted income (loss) attributable to Host Inc     $       $      
                                                       56        (2)
Basic weighted average shares outstanding          728.2         707.5
Diluted weighted average common shares outstanding 738.6         707.5
(a)
Basic and diluted earnings (loss) per common share $       $      
                                                      .08        —

__________
    Dilutive securities may include shares granted under comprehensive stock
    plans, preferred operating partnership units ("OP Units") held by minority
(a) partners, exchangeable debt securities and other non-controlling interests
    that have the option to convert their limited partnership interests to
    common OP Units. No effect is shown for any securities that were
    anti-dilutive for the period.



HOST HOTELS & RESORTS, INC.

Comparable Hotel Operating Data (a)
                                                                As Adjusted
                   As of March 31,    Quarter ended March 31,   Quarter ended March 31,
                   2013               2013                      2012
                                              Average                   Average           Percent
                   No. of      No. of Average Occupancy                Occupancy         Change
                                                                Average                   in
Region             Properties  Rooms  Room    Percentage RevPAR Room    Percentage RevPAR RevPAR
                                      Rate                      Rate
Pacific            27          16,884 $     74.2%      $    $     75.7%      $    1.1%
                                      197.12             146.33 191.26             144.72
Mid-Atlantic       11          8,638  219.60  75.6       166.07 214.66  71.7       153.83 8.0
South Central      9           5,695  170.72  75.7       129.29 156.69  75.2       117.81 9.7
D.C. Metro         12          5,418  201.84  67.1       135.41 198.51  66.5       132.04 2.6
North Central      11          4,782  141.36  61.6       87.09  138.36  64.6       89.38  (2.6)
Florida            8           3,680  283.54  84.5       239.48 258.41  80.7       208.60 14.8
New England        6           3,672  160.83  64.4       103.56 156.77  58.6       91.82  12.8
Mountain           7           2,885  197.25  67.9       133.96 191.07  68.1       130.11 3.0
Atlanta            6           2,183  176.23  70.8       124.82 171.78  68.5       117.65 6.1
Asia-Pacific       6           1,255  163.69  83.8       137.13 158.25  82.0       129.73 5.7
Canada             3           1,219  178.00  64.3       114.45 172.97  61.9       107.03 6.9
Latin America      4           1,075  241.89  67.3       162.81 240.65  72.4       174.12 (6.5)
 AllRegions  110         57,386 197.57  72.3       142.87 189.94  71.6       135.98 5.1
                                                                As Adjusted
                    As of March 31,   Quarter ended March 31,   Quarter ended March 31,
                    2013              2013                      2012
                                              Average                   Average           Percent
                    No. of     No. of Average Occupancy         Average Occupancy         Change
                                                                                          in
                    Properties Rooms  Room    Percentage RevPAR Room    Percentage RevPAR RevPAR
                                      Rate                      Rate
Property Type
Urban               57         35,294 $     72.3%      $    $     71.2%      $    3.4%
                                      198.58             143.49 194.81             138.77
Suburban            29         10,568 161.50  66.4       107.17 151.08  67.5       101.91 5.2
Resort/Conference 13         6,356  294.56  79.6       234.57 273.88  76.7       210.15 11.6
Airport             11         5,168  130.35  75.8       98.86  125.20  76.2       95.36  3.7
 AllTypes       110        57,386 197.57  72.3       142.87 189.94  71.6       135.98 5.1



Hotel Operating Statistics for All Properties (b)
                                                                                          Quarter ended
                                                                                                 As
                                                                                                 Adjusted
                                                                                          March  March
                                                                                          31,    31,
                                                                                          2013   2012
                                                                                          $    $   
Average room rate                                                                                
                                                                                               186.65
                                                                                          196.57
Average                                                                                   72.0%  71.1%
occupancy
                                                                                          $    $   
RevPAR                                                                                           
                                                                                               132.67
                                                                                          141.45

__________
(a) See the Notes to Financial Information for a discussion of reporting
    periods and the calculation of comparable hotel operating statistics.
    The operating statistics reflect all consolidated properties as of
(b) March31, 2013 and March31, 2012, respectively, and include the results
    of operations of properties sold or transferred during the year through
    the date of their disposition.



HOST HOTELS & RESORTS, INC.

Comparable Hotel Operating Data

Schedule of Comparable Hotel Results (a)

(unaudited, in millions, except hotel statistics)
                                     Quarter ended
                                                         As Adjusted
                                     March 31,           March 31,
                                     2013                2012 (b)
Number of hotels                     110                 110
Number of rooms                      57,386              57,386
Percent change in comparable hotel   5.1%                —
RevPAR
Operating profit margin (c)          7.2%                6.6%
Comparable hotel adjusted operating  23.4%               22.55%
profit margin (c)
Comparable hotel revenues
 Room                             $          $         
                                     738                 710
 Food and beverage                352                 354
 Other                            75                  71
 Comparable hotel revenues  1,165               1,135
(d)
Comparable hotel expenses
 Room                             206                 197
 Food and beverage                260                 259
 Other                            40                  39
 Management fees, ground rent and 386                 384
other costs
 Comparable hotel expenses  892                 879
(e)
Comparable hotel adjusted operating  273                 256
profit
Non-comparable hotel results, net    20                  16
(f)
Loss for hotels leased from HPT (g)  —                   (4)
Depreciation and amortization        (177)               (161)
Corporate and other expenses         (26)                (24)
Operating profit                     $          83
                                      90
Less: Estimated operating profit
adjustments for the calendar period                      (67)
(b)
Operating profit for the period
January1, 2012 through March23,                        $          
2012 (as                                                 16

 reported)
__________
    See the Notes to Financial Information for discussion of non-GAAP
(a) measures, reporting periods and the calculation of comparable hotel
    results.
    Comparable hotel results and statistics for March 31, 2012 are based on
    2012 As Adjusted results. Adjustments for the calendar period reflect
    estimated operations for eight days from March 24, 2012 through March 31,
    2012 for our Marriott-branded properties and the month of March 2012
(b) results for the remainder of the portfolio, which were previously reported
    in second quarter 2012 results. Additionally, the 2012 As Adjusted March
    31 results include one additional day of operations in February compared
    to March 31, 2013 due to the 2012 leap year. See the Notes to Financial
    Information for further discussion and information on how the 2012 As
    Adjusted results were calculated.
    Operating profit margins are calculated by dividing the applicable
    operating profit by the related revenue amount. GAAP margins are
(c) calculated using amounts presented in the consolidated statements of
    operations, or amounts As Adjusted. Comparable margins are calculated
    using amounts presented in the above table.
(d) The reconciliation of total revenues per the consolidated statements of
    operations to the comparable hotel revenues is as follows:
                                     Quarter ended
                                                         As Adjusted
                                     March 31,           March 31,
                                     2013                2012 (b)
    Revenues per the consolidated
    statements of operations:
     For the period January 1,                        $         
    2012 through March 23, 2012 (as                      952
    reported)
    Revenue adjustment for the                           297
    calendar period (b)
    For the quarter ended         $           1,249
                                     1,255
    Non-comparable hotel revenues    (104)               (75)
    Hotel revenues for which we      14                  14
    record rental income, net
    Revenues for hotels leased from  —                   (53)
    HPT (g)
     Comparable hotel     $           $        
    revenues                         1,165               1,135





HOST HOTELS & RESORTS, INC.

Comparable Hotel Operating Data

Schedule of Comparable Hotel Results

(unaudited, in millions, except hotel statistics)
(e) The reconciliation of operating costs per the consolidated statements of
    operations to the comparable hotel expenses is as follows:
                                         Quarter ended
                                                           As Adjusted
                                         March 31,         March 31,
                                         2013              2012 (b)
       Operating costs and expenses per
       the consolidated statements of
       operations:
        For the period January 1,                       $         
       2012 through March 23, 2012 (as                     936
       reported)
       Operating costs and expenses
       adjustment for the calendar                         230
       period (b)
       For the quarter ended          $         1,166
                                         1,165
       Non-comparable hotel expenses     (84)              (59)
       Hotel expenses for which we       14                14
       record rental income
       Expense for hotels leased from    —                 (57)
       HPT (g)
       Depreciation and amortization     (177)             (161)
       Corporate and other expenses      (26)              (24)
        Comparable hotel      $         $         
       expenses                           892            879
    Non-comparable hotel results, net, includes the following items: (i) the
    results of operations of our non-comparable hotels whose operations are
(f) included in our consolidated statements of operations as continuing
    operations, (ii) gains on property insurance settlements and (iii) the
    results of our office buildings.
(g) The leases terminated on December 31, 2012.



HOST HOTELS & RESORTS, INC.

Other Financial Data

(unaudited, in millions, except per share amounts)
                                                    March 31,    December 31,
                                                    2013         2012
Equity
Common shares outstanding                           742.8        724.6
Common shares outstanding assuming conversion of
non-controlling interest                            752.8        734.7

 OP Units (a)
Preferred OP Units outstanding                      .02          .02
Security pricing
Common (b)                                          $       $      
                                                      17.49    15.67
3¼% Exchangeable Senior Debentures (c)              $       $     
                                                         — 1,152.8
2½% Exchangeable Senior Debentures (c)              $       $     
                                                     1,397.3    1,309.2
Dividends declared per share for calendar year
Common                                              $       $      
                                                        .10    .30
Debt
                                                    March 31,    December 31,
Senior debt           Rate          Maturity date   2013         2012
Series Q (d)           6¾%  6/2016  $       $      
                                                        550     550
Series T (e)          9%             5/2017  392          391
Series V              6%             11/2020   500          500
Series X               5⅞%  6/2019  497          497
Series Z              6%             10/2021   300          300
Series B               5¼%  3/2022  350          350
Series C               4¾%  3/2023  450          450
Series D (e)           3¾%  10/2023   400          —
Exchangeable senior    3¼%  4/2024  —            175
debentures
Exchangeable senior    2½%  10/2029   359          356
debentures (f)
Credit facility term  2.0%           7/2017  500          500
loan
Credit facility       2.9%           11/2015   158          263
revolver (g)
                                                    4,456        4,332
Mortgage debt and
other
Mortgage debt          3.3-8.5%  7/2013-11/2016  992          993
(non-recourse) (h)
Other                  7.0-7.8%  10/2014-12/2017 86           86
 Total                                   5,534        $      
debt (i)(j)                                                       5,411
Subsequent Debt Transactions
Anticipated redemption - 6¾% SeriesQ Senior Notes  (200)
(d)
Anticipated draw on the credit facility revolver    150
(d)
Anticipated redemption - 9% Series T Senior Notes   (400)
(e)
May 1, 2013 repayment of Orlando World Center       (246)
Marriott mortgage (h)
Total Debt: as adjusted for subsequent debt         $     
transactions                                          4,838
Percentage of fixed rate debt                       80%          78%
Weighted average interest rate                      5.5%         5.4%
Weighted average debt maturity                         
                                                    5.4 years    5.1 years

__________
    Each OP Unit is redeemable for cash or, at our option, for 1.021494 common
(a) shares of Host Inc. At March31, 2013 and December31, 2012, there were
    9.8million and 9.9million common OP Units, respectively, held by
    non-controlling interests.
(b) Share prices are the closing price as reported by the New York Stock
    Exchange.
(c) Amount reflects market price of a single $1,000 debenture as quoted by
    Bloomberg L.P.
    On May2, 2013, we called $200million of 6.75% SeriesQ senior notes due
(d) 2016. The redemption will be funded through a $150million draw on the
    revolver portion of the credit facility and with available cash.
    The net proceeds from the issuance of the SeriesD senior notes, together
(e) with available cash, will be used to redeem, on May15, 2013, the
    $400million of 9% SeriesT senior notes due 2017.
    At March31, 2013, the principal balance outstanding of the 2½%
    Exchangeable Senior Debentures due 2029 (the "2009 Debentures") is
(f) $400million. The discount related to these debentures is amortized
    through October 2015, the first date at which holders can require us to
    repurchase the 2009 Debentures for cash.
(g) The interest rate shown is the weighted average rate of the outstanding
    credit facility at March31, 2013.
(h) On May1, 2013, we repaid the 4.75% $246million mortgage loan on the
    Orlando World Center Marriott with available cash.
    In accordance with GAAP, total debt includes the debt of entities that we
    consolidate, but of which we do not own 100%, and excludes the debt of
    entities that we do not consolidate, but of which we have a
(i) non-controlling ownership interest and record our investment therein under
    the equity method of accounting. As of March31, 2013, our non-controlling
    partners' share of consolidated debt is $67 million and our share of debt
    in unconsolidated investments is $456million.
(j) Total debt as of March31, 2013 and December31, 2012 includes net
    discounts of $46million and $48million, respectively.



HOST HOTELS & RESORTS, INC.

Reconciliation of Net Income to

EBITDA and Adjusted EBITDA (a)

(unaudited, in millions)
                                 Quarter ended
                                               As Adjusted     As Reported
                                 March 31,     March 31,       March 23,
                                 2013          2012 (a)        2012
Net income (b)(e)                $       $        $       
                                     60      59          —
 Interest expense             76            94              86
 Depreciation and             177           161             149
amortization
 Income taxes                 (7)           (11)            (13)
 Discontinued operations (c)  3             5               4
EBITDA                           309           308             226
 Gain on dispositions (d)     (19)          (48)            (48)
 Recognition of deferred gain (11)          —               —
on land condemnation (e)
 Amortization of deferred     —             (1)             (1)
gains
 Equity investment
adjustments:
 Equity in (earnings)     2             (1)             2
losses of affiliates
 Pro rata Adjusted EBITDA 8             5               2
of equity investments
 Consolidated partnership
adjustments:
 Pro rata Adjusted EBITDA
attributable to non-controlling
                                 (6)           (6)             (5)
 partners in other
consolidated partnerships
Adjusted EBITDA                  $       $        $       
                                    283      257          176

__________
    See the Notes to Financial Information for discussion of non-GAAP
(a) measures, reporting periods and information on the calculation of As
    Adjusted quarterly results.
    The difference of $59million in net income between the As Adjusted
    quarter ended March31, 2012 and as reported quarter ended March23, 2012
(b) reflects estimated net income from March24, 2012 through March31, 2012
    for our Marriott-managed hotels, and the March 2012 operations for the
    remainder of the portfolio, which previously were reported in second
    quarter 2012 results.
(c) Reflects the interest expense, depreciation and amortization and incomes
    taxes included in discontinued operations.
(d) Reflects the gain recorded on the sale of one hotel in 2013 and 2012,
    respectively.
    During the first quarter of 2013, the Company recognized a deferred gain
    of approximately $11million related to the eminent domain claim by the
    State of Georgia for 2.9 acres of land at the Atlanta Marriott Perimeter
    Center for highway expansion, for which we received cash proceeds in 2007.
(e) The Company has included the gain in NAREIT FFO per diluted share, which
    is consistent with the treatment of gains recognized on the disposition of
    undepreciated assets. However, due to the significant passage of time
    since we received the proceeds, the Company has excluded the gain from its
    Adjusted FFO per diluted share and Adjusted EBITDA for the quarter.



HOST HOTELS & RESORTS, INC.

Reconciliation of Net Income to NAREIT and

Adjusted Funds From Operations per Diluted Shares (a)

(unaudited, in millions, except per share amounts)
                                 Quarter ended
                                               As Adjusted     As Reported
                                 March 31,     March 31,       March 23,
                                 2013          2012 (a)        2012
Net income (b)                   $       $        $       
                                     60      59          —
 Less: Net income
attributable to non-controlling  (4)           (4)             (2)
interests
Net income (loss) attributable   56            55              (2)
to Host Inc.
Adjustments:
 Gain on dispositions, net of  (19)          (48)            (48)
taxes (c)
 Amortization of deferred
gains and other property
transactions,                    —             (1)             (1)

 net of taxes
 Depreciation and amortization 176           165             153
 Partnership adjustments       8             4               —
 FFO of non-controlling        (3)           (2)             (1)
interests of Host LP
NAREIT FFO                       218           173             101
Adjustments to NAREIT FFO:
 Acquisition costs (d)         —             1               —
 Recognition of deferred gain  (11)          —               —
on land condemnation (e)
Adjusted FFO                     $       $        $       
                                    207      174          101
For calculation on a per share
basis:
Adjustments for dilutive
securities (f):
 Assuming conversion of        $       $        $       
Exchangeable Senior Debentures        7      7          1
Diluted NAREIT FFO               $       $        $       
                                    225      180          102
Diluted Adjusted FFO             $       $        $       
                                    214      181          102
Diluted weighted average shares  738.6         708.4           707.5
outstanding-EPS
 Assuming issuance of common
shares granted under the         —             0.7             0.7

 Comprehensive Stock Plan
 Assuming conversion of        29.1          40.2            11.5
Exchangeable Senior Debentures
Diluted weighted average shares
outstanding – NAREIT FFO         767.7         749.3           719.7

 and Adjusted FFO
NAREIT FFO per diluted share     $       $        $       
                                     .29      .24          .14
Adjusted FFO per diluted share   $       $        $       
                                     .28      .24          .14

__________
    See Notes to the Financial Information for discussion of non-GAAP
(a) measures, reporting periods and information on the calculation of As
    Adjusted quarterly results.
    The difference of $59million in net income between the As Adjusted
    quarter ended March31, 2012 and as reported quarter ended March23, 2012
(b) reflects estimated net income from March24, 2012 through March31, 2012
    for our Marriott-managed hotels, and the March 2012 operations for the
    remainder of the portfolio, which previously were reported in second
    quarter 2012 results.
(c) Reflects the gain on the sale of one hotel in 2013 and 2012, respectively.
    Includes approximately $1million for the quarter ended March31, 2012,
(d) related to our share of acquisition costs incurred by unconsolidated joint
    ventures.
    The Company has excluded from Adjusted FFO the recognition of deferred
(e) gain on the land condemnation at the Atlanta Marriott Perimeter Center.
    Please see note (e) to the Reconciliation of Net Income to EBITDA and
    Adjusted EBITDA for further discussion.
    Earnings/loss per diluted share and NAREIT FFO and Adjusted FFO per
    diluted share are adjusted for the effects of dilutive securities.
    Dilutive securities may include shares granted under comprehensive stock
(f) plans, preferred OP units held by non-controlling partners, exchangeable
    debt securities and other non-controlling interests that have the option
    to convert their limited partnership interests to common OP units. No
    effect is shown for securities if they are anti-dilutive.



HOST HOTELS & RESORTS, INC.

Reconciliation of Net Income to EBITDA, Adjusted EBITDA and

NAREIT and Adjusted Funds From Operations per Diluted Shares for 2013
Forecasts (a)

(unaudited, in millions, except per share amounts)
                                         Full Year 2013
                                         Low-end           High-end
                                         of range          of range
Net income                               $         $         
                                          238             298
 Interest expense                     310               310
 Depreciation and amortization        708               708
 Income taxes                         20                20
 Discontinued operations              3                 3
EBITDA                                   1,279             1,339
 Gain on dispositions                 (19)              (19)
 Recognition of deferred gain on land (11)              (11)
condemnation
 Equity investment adjustments:
 Equity in earnings of affiliates (7)               (7)
 Pro rata Adjusted EBITDA of      51                51
equity investments
 Consolidated partnership
adjustments:
 Pro rata Adjusted EBITDA
attributable to non-controlling partners
in other                                 (18)              (18)

 consolidated partnerships
Adjusted EBITDA                          $          $       
                                         1,275             1,335
                                         Full Year 2013
                                         Low-end           High-end

                                         of range          of range
Net income                               $         $         
                                          238             298
Less: Net income attributable to        (9)               (9)
non-controlling interests
Net income attributable to Host Inc.     229               289
Adjustments:
 Gain on dispositions                 (19)              (19)
 Depreciation and amortization        706               706
 Partnership adjustments              22                24
 FFO of non-controlling interests of  (13)              (13)
Host LP
NAREIT FFO                               925               987
Adjustments:
 Loss on debt extinguishments         36                36
 Recognition of deferred gain on land (11)              (11)
condemnation
Adjusted FFO                             950               1,012
Adjustment for dilutive securities:
 Assuming conversion of Exchangeable  26                26
Senior Debentures
Diluted NAREIT FFO                       951               1,013
Diluted Adjusted FFO                     $         $       
                                          976             1,038
Weighted average diluted shares – EPS    745.8             745.8
Weighted average diluted shares – NAREIT 778.3             778.3
and Adjusted FFO (b)
Earnings per diluted share               $         $         
                                          .31            .39
NAREIT FFO per diluted share             $         $        
                                         1.22             1.30
Adjusted FFO per diluted share           $         $        
                                         1.25             1.33

__________
(a) The forecasts were based on the below assumptions:
      oComparable hotel RevPAR will increase 5.0% to 7.0% for the low and
        high ends of the forecasted range, respectively.
      oComparable hotel adjusted operating profit margins will increase 60
        basis points to 120 basis points for the low and high ends of the
        forecasted range, respectively.
      oInterest expense includes approximately $36 million related to the
        loss on debt extinguishments and $26million related to non-cash
        interest expense for exchangeable senior debentures, amortization of
        original issue discounts and deferred financing fees.
      oWe expect to spend approximately $130million to $150million on
        ROI/redevelopment and acquisition capital expenditures and
        approximately $270million to $290million on renewal and replacement
        expenditures.
      oDue to uncertainty related to the completion and timing of any
        potential acquisitions and dispositions, we have not adjusted the
        forecast for any use of proceeds, gains on sale, acquisition costs or
        adjusted the number of comparable properties. Additionally, we expect
        to spend approximately $50million on new development projects in
        2013.

    For a discussion of additional items that may affect forecasted results,
    see the Notes to Financial Information.
(b) The NAREIT and Adjusted FFO per diluted share include 33million shares
    for the dilution of exchangeable senior debentures.



HOST HOTELS & RESORTS, INC.

Schedule of Comparable Hotel Adjusted Operating Profit Margin

for 2013 Forecasts (a)

(unaudited, in millions, except hotel statistics)
                                           2013
                                           Low-end           High-end
                                           of range          of range
Operating profit margin under GAAP (b)     9.6%              10.6%
Comparable hotel adjusted operating profit 24.9%             25.5%
margin (c)
Comparable hotel sales
 Room                                   $          $       
                                           3,117             3,176
 Food and beverage                      1,361             1,388
 Other                                  274               280
 Comparable hotel sales (d) 4,752             4,844
Comparable hotel expenses
 Rooms, food and beverage and other     1,983             2,012
departmental costs
 Management fees, ground rent and other 1,587             1,597
costs
 Comparable hotel expenses  3,570             3,609
(e)
Comparable hotel adjusted operating profit 1,182             1,235
Non-comparable hotel results, net          130               137
Depreciation and amortization              (708)             (708)
Corporate and other expenses               (102)             (102)
 Operating profit           $         $        
                                            502              562
__________
    Forecast comparable hotel results include 109 hotels that we have assumed
    will be classified as comparable as of December 31, 2013. See "Comparable
    Hotel Operating Statistics" in the Notes to Financial Information. No
(a) assurances can be made as to the hotels that will be in the comparable
    hotel set for 2013. 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 Full Year 2013 Forecasts" for other
    forecast assumptions and further discussion of our comparable hotel set.
    Operating profit margin under GAAP is calculated as the operating profit
(b) divided by the forecast total revenues per the consolidated statements of
    operations. See (d) below for forecasted revenues.
    Comparable hotel adjusted operating profit margin is calculated as the
(c) 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):
                                           2013
                                           Low-end           High-end
                                           of range          of range
    Revenues                               $          $       
                                           5,226             5,327
    Non-comparable hotel revenues          (526)             (535)
    Hotel revenues for which we record     52                52
    rental income, net
     Comparable hotel sales     $          $       
                                           4,752             4,844
(e) The reconciliation of forecast operating costs and expenses to the
    comparable hotel expenses is as follows (in millions):
                                           2013
                                           Low-end           High-end
                                           of range          of range
    Operating costs and expenses           $          $       
                                           4,724             4,765
    Non-comparable hotel and other         (396)             (398)
    expenses
    Hotel expenses for which we record     52                52
    rental income
    Depreciation and amortization          (708)             (708)
    Corporate and other expenses           (102)             (102)
     Comparable hotel expenses  $          $       
                                           3,570             3,609



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: 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.

REPORTING PERIODS FOR STATEMENT OF OPERATIONS

Effective January1, 2013, we report quarterly operating results on a calendar
cycle, which is now consistent with all of our hotel managers and the majority
of companies in the lodging industry. Historically, our annual financial
statements have been reported on a calendar basis and are unaffected by this
change. However, our quarterly operating results have been reported based on a
52-53 week fiscal calendar used by Marriott International, Inc. ("Marriott"),
the manager of approximately 50% of our properties. For 2013, Marriott
converted to reporting results based on a 12-month calendar year. During 2012,
Marriott used a fiscal year ending on the Friday closest to December31 and
reported twelve weeks of operations for the first three quarters and sixteen
weeks for the fourth quarter of the year for its Marriott-managed hotels.
Accordingly, our first three quarters of operations in 2012 ended on March23,
June15 and September7. In contrast, managers of our other hotels, such as
Ritz-Carlton, Hyatt, and Starwood, reported results on a monthly basis. During
2012, we did not report the month of operations that ended after our fiscal
quarter until the following quarter for those hotels using a monthly reporting
period because these hotel managers did not make mid-month results available
to us. Accordingly, the month of operations that ended after our fiscal
quarter was included in our quarterly results of operations in the following
quarter for those calendar reporting hotel managers. As a result, our 2012
quarterly results of operations include results from hotel managers reporting
results on a monthly basis as follows: first quarter (January, February),
second quarter (March to May), third quarter (June to August) and fourth
quarter (September to December).

We will not restate the previously filed 2012 quarterly financial statements
prepared in accordance with GAAP because certain property-level operating
expenses for our Marriott-managed properties necessary to restate operations
are unavailable on a daily basis. Because we rely on our operators for the
hotel operating results used in our financial statements, the unavailability
of this information on a calendar quarter basis for 2012 made restating our
financial statements in accordance with GAAP unfeasible. Accordingly, the
corresponding 2012 quarterly historical operating results are not comparable
to our 2013 quarterly results.

However, to enable investors to better evaluate our performance over
comparable periods, we have presented certain 2012 quarterly results and
operating statistics on a calendar year basis of reporting, which we will
refer to as "2012 As Adjusted" results. The financial information for the 2012
As Adjusted quarter presented herein was calculated based on our actual
reported operating results for the quarter ended March 23, 2012 period
adjusted as follows:

  oFor our 59 hotels operated by Marriott that have traditionally reported
    operations on the basis of a 52-53 week fiscal calendar (that included
    operations through March 23, 2012 for the first quarter), our 2012 As
    Adjusted results reflect the $60 million of revenue for these hotels for
    the eight days from March 24, 2012 through March 31, 2012 (based on daily
    revenue information provided by Marriott) that previously were included in
    our results of operations for the second quarter 2012.

  oBecause Marriott is not able to provide us with operating expenses for our
    Marriott-operated hotels for the same March24, 2012 through March31,
    2012 period, our 2012 As Adjusted results reflect approximately
    $43million of operating expenses that we have estimated were incurred for
    our Marriott-operated hotels for the period. We derived these estimates
    based on an internally developed allocation methodology based on
    historical expenses provided by Marriott consistent with its prior 52-53
    week reporting calendar.

  oFor our 58 hotels operated by managers other than Marriott (including
    those by Ritz-Carlton, Hyatt and Starwood), that have traditionally
    reported operations on a calendar month basis, our 2012 As Adjusted
    results reflect the $231million of revenues and $167 million of operating
    expenses for these non-Marriott hotels for the full calendar month of
    March 2012 that previously were included in our results of operations for
    the second quarter 2012.

  oFor all other income statement line items presented for the 2012 As
    Adjusted quarter, including depreciation, interest income and expense and
    other corporate costs, as well as those utilized in the reconciliations
    for our non-GAAP measures, our 2012 As Adjusted results reflect such
    amounts for the full calendar quarter ended March 31, 2012 based on
    historical information.

COMPARABLE HOTEL OPERATING STATISTICS

To facilitate a quarter-to-quarter 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:

       that are owned or leased by us and the operations of which are included
  (i)  in our consolidated results, whether as continuing operations or
       discontinued operations, for the entirety of the reporting periods
       being compared; and
       that have not sustained substantial property damage or business
  (ii) 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.

Of the 118 hotels that we owned on March31, 2013, 110 have been classified as
comparable hotels. The operating results of the following hotels that we owned
as of March31, 2013 are excluded from comparable hotel results for these
periods:

  oGrand Hyatt Washington (acquired in July 2012);
  oThe Westin New York Grand Central (business interruption due to
    re-branding of the hotel and extensive renovations, which included
    renovation of 774 guest rooms, lobby, public and meeting spaces, fitness
    center, restaurant and bar);
  oTwo hotels in Christchurch, New Zealand (business interruption due to
    closure of the hotels following an earthquake in 2011 and the subsequent
    extensive renovations);
  oOrlando World Center Marriott (business interruption due to extensive
    renovations, which include façade restoration, the shutdown of the main
    pool and a complete restoration and enhancement of the hotel, including
    new water slides and activity areas, new pool dining facilities and the
    renovation of one tower of guestrooms, meeting space and restaurants);
  oAtlanta Marriott Perimeter Center (business interruption due to extensive
    renovations, which included renovation of the guest rooms, lobby, bar and
    restaurant and the demolition of one tower of the hotel);
  oChicago Marriott O'Hare (business interruption due to extensive
    renovations, which included renovating every aspect of the hotel and
    shutting down over 200 rooms); and
  oSheraton Indianapolis Hotel at Keystone Crossing (business interruption
    due to extensive renovations, which included the conversion of one tower
    of the hotel into apartments, reducing the room count, and the renovation
    of the remaining guest rooms, lobby, bar and meeting space). 

The operating results of four hotels disposed of in 2013 and 2012 are not
included in comparable hotel results for the periods presented herein.

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
measures and presents why we believe they are useful supplemental measures of
our performance.

To facilitate comparison against a comparable period in 2012, we are
presenting our above non-GAAP financial measures for the quarter ended March
31, 2013 and for the 2012 As Adjusted quarter. We also present Adjusted
EBITDA, NAREIT FFO per diluted share and Adjusted FFO per diluted share for
our "as reported" quarter ended March 23, 2012. In addition, we present our
Total Owned Hotel Revenue and Net Income for the 2012 As Adjusted quarter.
Because the presentation of these line items on an "As Adjusted" basis is not
in accordance with GAAP, they also constitute non-GAAP financial measures. We
present these measures because we believe that doing so provides investors and
management with useful supplemental information for evaluating the
period-to-period performance of our hotels. These results are, however, based
on estimates. Our internal allocation methodology used to develop these
estimates is based on assumptions, some of which may be inaccurate. For this
reason, while management believes presentation of these supplemental measures
is beneficial, investors are cautioned from placing undue reliance on the 2012
As Adjusted results and should consider these results together with the
presentation of GAAP revenues, net income and expenses. 

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.

In unusual circumstances, we may also adjust NAREIT FFO for gains or losses
that management believes are not representative of the Company's current
operating performance. For example, in the first quarter of 2013, management
excluded the $11million gain from the eminent domain claim for land adjacent
to the Atlanta Marriott Perimeter Center for which we received the cash
proceeds in 2007, but, pending the resolution of certain contingencies, was
not recognized until 2013. Typically, gains from the disposition of
non-depreciable property are included in the determination of NAREIT and
Adjusted FFO.

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.

In unusual circumstances, we may also adjust EBITDA for gains or losses that
management believes are not representative of the Company's current operating
performance. For example, in the first quarter of 2013, management excluded
the $11million gain from the eminent domain claim for land adjacent to the
Atlanta Marriott Perimeter Center for which we received the cash proceeds in
2007, but, pending the resolution of certain contingencies, was not recognized
until 2013. Typically, gains from the disposition of non-depreciable property
are included in the determination of Adjusted EBITDA.

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.



SOURCE Host Hotels & Resorts, Inc.

Website: http://www.hosthotels.com
Contact: Gregory J. Larson, Executive Vice President, 240.744.5120 or Gee
Lingberg, Vice President, 240.744.5275