HMT Host Marriott Cp

BETHESDA, Md., Feb. 23 /PRNewswire-FirstCall/ -- Host Marriott Corporation (NYSE:HMT), the nation's largest lodging real estate investment trust (REIT), today announced its results of operations for the fourth quarter and for the year ended December 31, 2005. Fourth quarter and full year results include the following: - Total revenue increased 9.7% to $1,272 million for the fourth quarter and 8.6% to $3,881 million for full year 2005. - Net income increased $13 million to $74 million for the fourth quarter and increased from a loss of $.01 million for full year 2004 to net income of $166 million for full year 2005. Earnings per diluted share increased $.04 to $.19 for the fourth quarter and $.50 to $.38 for full year 2005 from a loss per diluted share of $(.12) for full year 2004. For the fourth quarter and full year 2005, net income includes net gains of $7 million, or $.02 per diluted share, and $21 million, or $.06 per diluted share, respectively, from the following transactions: the sale of a significant interest in a joint venture; gains on hotel dispositions; and costs associated with the refinancing of senior notes and the redemption of preferred stock. By comparison, for the fourth quarter and full year 2004, net income (loss) includes a net gain of $30 million, or $.08 per diluted share, and a net loss of $12 million, or $(.04) per diluted share, respectively, associated with similar transactions in 2004. For further detail, refer to the "Schedule of Significant Transactions Affecting Earnings per Share and Funds From Operations per Diluted Share" attached to this press release. - Adjusted EBITDA, which is Earnings before Interest Expense, Income Taxes, Depreciation, Amortization and other items, increased 16.9% to $312 million for the fourth quarter and 16.2% to $918 million for full year 2005. (Adjusted EBITDA has been reduced by $2 million and $6 million for the fourth quarter and full year 2005, respectively, and $1 million for both the fourth quarter and full year 2004 for distributions to minority interest partners of Host Marriott, L.P.) - Funds from Operations (FFO) per diluted share increased 26%, to $.44 for the fourth quarter and 49% to $1.15 for full year 2005. FFO per diluted share was reduced by $.08 and $.17 for full year 2005 and 2004, respectively, for costs associated with refinancing the senior notes and the redemption of preferred stock noted above. (Logo: http://www.newscom.com/cgi-bin/prnh/20040324/HOSTMARRIOTTLOGO ) Adjusted EBITDA, FFO per diluted share and comparable hotel adjusted operating profit margins (discussed below) are non-GAAP (generally accepted accounting principles) financial measures within the meaning of the rules of the Securities and Exchange Commission (SEC). See the discussion included in this press release for information regarding these non-GAAP financial measures. Operating Results Comparable hotel RevPAR for the fourth quarter of 2005 increased 10.3% and comparable hotel adjusted operating profit margin increased 155 basis points. The fourth quarter increases in comparable hotel RevPAR and comparable hotel adjusted operating profit margin were driven by a 7.7% increase in average room rate and a 1.7 percentage point increase in occupancy. Full year 2005 comparable hotel RevPAR increased 9.5%, while comparable hotel adjusted operating profit margin increased 170 basis points, both of which exceeded the high end of the Company's guidance. The full year 2005 RevPAR growth was driven by an increase in average room rates of 7.6% and an increase in occupancy of 1.2 percentage points. Christopher J. Nassetta, president, chief executive officer, stated, "We finished 2005 with an outstanding fourth quarter, as strong RevPAR and margin growth drove significant increases in Adjusted EBITDA and FFO per diluted share, which exceeded the high end of our guidance by $.04." Mr. Nassetta added, "We expect that the favorable supply and demand environment in the industry will continue to drive further improvement in our operating results in 2006." Balance Sheet As of December 31, 2005, the Company had $184 million of cash and cash equivalents. Since December 31, 2004, the Company's total debt has been reduced by approximately $444 million primarily as a result of the redemption or conversion of substantially all of the Convertible Subordinated Debentures, which was completed in the first quarter of 2006. The Company currently has $575 million of availability under its credit facility. W. Edward Walter, executive vice president, chief financial officer, stated, "As a result of the conversion or redemption of substantially all of our QUIPs, we have reduced our debt by approximately $492 million as well as annual interest costs by approximately $32 million. Despite the increase in shares, we believe this change should contribute to an increase in the common dividend to stockholders, while not becoming dilutive to FFO per share or earnings per share based on our 2006 forecast." Acquisitions and Dispositions In 2006, the Company has sold, or has, subject to customary closing conditions, signed contracts to sell five properties (the Swissotel The Drake, New York; the Fort Lauderdale Marina Marriott; the Albany Marriott; the Marriott at Research Triangle Park; and the Chicago Marriott Deerfield Suites) for expected total proceeds of approximately $700 million and a total estimated gain in excess of $380 million. The proceeds from the sales will be used to partially fund the acquisition of 38 properties from Starwood Hotels & Resorts Worldwide, Inc. and for other corporate purposes. James F. Risoleo, executive vice president, chief investment officer, stated, "We are thrilled with the sales prices of all of our recent and expected dispositions, especially the Swissotel The Drake, New York and the Fort Lauderdale Marina Marriott. We will continue to take advantage of the current strong environment to recycle capital. We also continue to have a strong pipeline of potential acquisition candidates in urban and resort destinations both in North America and Europe that we believe are consistent with our strategy of improving our best in class portfolio." 2006 Outlook The Company expects comparable hotel RevPAR for first quarter and full year 2006 to increase approximately 7.0% to 9.0% and 7.0% to 10.0%, respectively. For full year 2006, the Company also expects its operating profit margin under GAAP to increase approximately 210 basis points to 270 basis points and its comparable hotel adjusted operating profit margin to increase approximately 140 basis points to 175 basis points. Based upon this guidance and the assumption that the Starwood acquisition of 38 hotels (including entering into a joint venture for the six European assets in which the Company expects to retain approximately 25% of the equity interests) will be substantially completed in early April, the Company estimates that for 2006: - earnings per diluted share should be approximately $.99 to $1.01 for the first quarter and $1.44 to $1.54 for the full year; - net income should be approximately $379 million to $387 million for the first quarter and $724 million to $774 million for the full year; - Adjusted EBITDA should be approximately $1,225 million to $1,270 million for the full year, both of which have been reduced by approximately $10 million for distributions to minority interest partners of Host Marriott, L.P.; - FFO per diluted share should be approximately $.23 to $.25 for the first quarter and $1.44 to $1.54 for the full year (including a charge of approximately $7 million, or approximately $.01 per diluted share, for the full year, related to costs associated with debt or perpetual preferred stock expected to be refinanced or prepaid in 2006); and - the common dividend will modestly increase throughout the year. Mr. Nassetta also stated, "We believe that the trends for 2006 and beyond remain very positive. We are convinced that the Starwood portfolio complements our existing properties and will be accretive to the short- and long-term value of the Company. We believe that the strategic positioning of our portfolio both in terms of premium brands and international and domestic markets will result in meaningful growth in RevPAR, earnings and dividends. As we move forward in 2006 under our new name, Host Hotels & Resorts, we will continue to aggressively pursue our mission of being the premier hospitality real estate company and maximizing shareholder returns." Host Marriott is a Fortune 500 lodging real estate company that currently owns or holds controlling interests in 105 upper-upscale and luxury hotel properties primarily operated under premium brands, such as Marriott(R), Ritz- Carlton(R), Hyatt(R), Four Seasons(R), Fairmont(R), Hilton(R) and Westin(R) (*). For further information, please visit the Company's website at http://www.hostmarriott.com/. This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete pending acquisitions and dispositions; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes and other risks and uncertainties associated with our business described in the Company's filings with the SEC. The completion of the transaction with Starwood (either in whole or in part relating to the acquisition of certain hotels) is subject to numerous closing conditions, including but not limited to approval by the Company's stockholders, approvals by antitrust and competition authorities in certain countries, and the Company's registration statement on Form S-4 becoming effective. There can be no assurances that the acquisition of the Starwood hotels, either in whole or in part, or the dispositions of Company hotels referred to in this press release will be completed. 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 February 22, 2006, 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. Host Marriott Corporation, herein referred to as "we" or "Host," 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 Marriott, L.P., or Host LP, of which we are the sole general partner. For each share of our common stock, Host LP has issued to us one unit of operating partnership interest, or OP Unit. When distinguishing between Host and Host LP, the primary difference is approximately 5% of the partnership interests in Host LP held by outside partners as of February 22, 2006, which is reflected as minority interest in our consolidated balance sheets and minority interest expense 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. For information on our reporting periods and non-GAAP financial measures (including Adjusted EBITDA, FFO per diluted share and comparable hotel adjusted operating profit margin) which we believe is useful to investors, see the Notes to the Financial Information included in this release. HOST MARRIOTT CORPORATION Consolidated Balance Sheets (a) (unaudited, in millions, except share amounts) December 31, 2005 2004 ASSETS Property and equipment, net $7,434 $7,298 Assets held for sale 73 113 Due from managers 41 51 Investments in affiliates 41 69 Deferred financing costs, net 63 70 Furniture, fixtures and equipment replacement fund 143 151 Other 157 168 Restricted cash 109 154 Cash and cash equivalents 184 347 Total assets $8,245 $8,421 LIABILITIES AND STOCKHOLDERS' EQUITY Debt Senior notes, including $493 million and $491 million, net of discount, of Exchangeable Senior Debentures, respectively $3,050 $2,890 Mortgage debt 1,823 2,043 Convertible Subordinated Debentures 387 492 Other 110 98 Total debt 5,370 5,523 Accounts payable and accrued expenses 165 113 Liabilities associated with assets held for sale - 26 Other 148 156 Total liabilities 5,683 5,818 Interest of minority partners of Host Marriott, L.P. 119 122 Interest of minority partners of other consolidated partnerships 26 86 Stockholders' equity Cumulative redeemable preferred stock (liquidation preference $250 million and $350 million, respectively), 50 million shares authorized; 10.0 million shares and 14.0 million shares issued and outstanding, respectively 241 337 Common stock, par value $.01, 750 million shares authorized; 361.0 million shares and 351.4 million shares issued and outstanding, respectively 4 3 Additional paid-in capital 3,080 2,953 Accumulated other comprehensive income 15 13 Deficit (923) (911) Total stockholders' equity 2,417 2,395 Total liabilities and stockholders' equity $8,245 $8,421 (a) Our consolidated balance sheet as of December 31, 2005 has been prepared without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. The consolidated balance sheets should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K. HOST MARRIOTT CORPORATION Consolidated Statements of Operations (a) (unaudited, in millions, except per share amounts) Quarter ended Year ended Dec. 31, Dec. 31, 2005 2004 2005 2004 Revenues Rooms $753 $675 $2,341 $2,114 Food and beverage 407 380 1,180 1,121 Other 77 71 249 232 Total hotel sales 1,237 1,126 3,770 3,467 Rental income (b) 35 32 111 106 Other income - 1 - 1 Total revenues 1,272 1,159 3,881 3,574 Expenses Rooms 180 164 566 526 Food and beverage 293 278 877 842 Hotel departmental expenses 332 309 1,032 965 Management fees 60 46 170 141 Other property-level expenses (b) 88 86 291 290 Depreciation and amortization 117 110 368 349 Corporate and other expenses 22 24 67 67 Gain on insurance settlement (9) (3) (9) (3) Total operating costs and expenses 1,083 1,014 3,362 3,177 Operating profit 189 145 519 397 Interest income 4 3 21 11 Interest expense (126) (127) (443) (483) Net gains on property transactions 3 7 80 17 Gain (loss) on foreign currency and derivative contracts 1 (4) 2 (6) Minority interest expense (4) (6) (16) (4) Equity in losses of affiliates - (4) (1) (16) Income (loss) before income taxes 67 14 162 (84) Benefit (provision) for income taxes (1) 8 (24) 10 Income (loss) from continuing operations 66 22 138 (74) Income from discontinued operations (c) 8 39 28 74 Net income (loss) 74 61 166 - Less: Dividends on preferred stock (6) (9) (27) (37) Issuance costs of redeemed preferred stock (d) - - (4) (4) Net income (loss) available to common stockholders $68 $52 $135 $(41) Basic and diluted earnings (loss) per common share: Continuing operations $.17 $.04 $.30 $(.34) Discontinued operations .02 .11 .08 .22 Basic and diluted earnings (loss) per common share $.19 $.15 $.38 $(.12) (a) Our consolidated statements of operations presented above have been prepared without audit. Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. The consolidated statements of operations should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K. (b) Rental income and expense are as follows: Quarter ended Year ended Dec. 31, Dec. 31, 2005 2004 2005 2004 Rental income Full-service $5 $5 $27 $26 Limited service and office buildings 30 27 84 80 $35 $32 $111 $106 Rental and other expenses (included in other property level expenses) Full-service $2 $2 $7 $7 Limited service and office buildings 25 24 79 78 $27 $26 $86 $85 (c) Reflects the results of operations and gain (loss) on sale, net of the related income tax, for five properties sold in 2005, two properties classified as held for sale as of December 31, 2005, and nine properties sold in 2004. (d) Emerging Issues Task Force Topic D-42, "The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock," requires that the excess of the fair value of the consideration transferred to the holders of preferred stock redeemed over the carrying amount of the preferred stock should be subtracted from net earnings to determine net earnings available to common stockholders in the calculation of earnings per share. On August 3, 2004, the fair value paid to holders of our Class A preferred stock, or $104 million (which was equal to the redemption price and par value) exceeded the carrying value of the preferred stock ($100 million, which was net of $4 million of original issuance costs). Accordingly, the $4 million of original issuance costs has been included in the determination of net income (loss) available to common stockholders for the purpose of calculating our full year 2004 basic and diluted earnings (loss) per share. On May 20, 2005, the fair value paid to holders of our Class B preferred stock, or $100 million (which was equal to the redemption price and par value) exceeded the carrying value of the preferred stock ($96 million, which was net of $4 million of original issuance costs). Accordingly, the $4 million of original issuance costs has been included in the determination of net income (loss) available to common stockholders for the purpose of calculating our full year 2005 basic and diluted earnings (loss) per share. HOST MARRIOTT CORPORATION Earnings (Loss) per Common Share (unaudited, in millions, except per share amounts) Quarter ended Quarter ended December 31, 2005 December 31, 2004 Income Per Income Per (loss) Shares Share (loss) Shares Share (Numer- (Denomin- Amount (Numer- (Denomin- Amount ator) ator) ator) ator) Net income $74 353.8 $.21 $61 350.2 $.17 Dividends on preferred stock (6) - (.02) (9) - (.02) Basic earnings available to common stockholders (a)(b) 68 353.8 .19 52 350.2 .15 Assuming distribution of common shares granted under the comprehensive stock plan less shares assumed purchased at average market price - 2.4 - - 2.9 - Assuming conversion of minority OP units issuable - 2.1 - - - - Diluted earnings available to common stockholders (a)(b) $68 358.3 $.19 $52 353.1 $.15 Year ended Year ended December 31, 2005 December 31, 2004 Income Per Income Per (loss) Shares Share (loss) Shares Share (Numer- (Denomin- Amount (Numer- (Denomin- Amount ator) ator) ator) ator) Net income (loss) $166 353.0 $.47 $- 337.3 $- Dividends on preferred stock (27) - (.08) (37) - (.11) Issuance costs of redeemed preferred stock (4) - (.01) (4) - (.01) Basic earnings (loss) available to common stockholders (a)(b) 135 353.0 .38 (41) 337.3 (.12) Assuming distribution of common shares granted under the comprehensive stock plan less shares assumed purchased at average market price - 2.5 - - - - Diluted earnings (loss) available to common stockholders (a)(b) $135 355.5 $.38 $(41) 337.3 $(.12) (a) Basic earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders as adjusted for potentially dilutive securities, by the weighted average number of shares of common stock outstanding plus other potentially dilutive securities. Dilutive securities may include shares granted under comprehensive stock plans, those preferred OP Units held by minority partners, other minority interests that have the option to convert their limited partnership interests to common OP Units, the Exchangeable Senior Debentures and the Convertible Subordinated Debentures. No effect is shown for any securities that are anti-dilutive. (b) Our results for certain periods presented were significantly affected by certain transactions, which are detailed in the table entitled, "Schedule of Significant Transactions Affecting Earnings per Share and Funds From Operations per Diluted Share." HOST MARRIOTT CORPORATION Comparable Hotel Operating Data (unaudited) Comparable Hotels by Region (a) As of Quarter ended December 31, 2005 December 31, 2005 Average Average No. of No. of Daily Occupancy Properties Rooms Rate Percentages RevPAR Pacific 20 11,035 $173.16 71.6% $123.91 Florida 11 7,027 165.32 64.5 106.65 Mid-Atlantic 10 6,720 241.88 79.4 192.13 North Central 13 4,923 139.49 69.3 96.61 DC Metro 11 4,661 190.48 74.6 142.16 Atlanta 11 3,968 168.59 71.2 119.98 South Central 6 3,526 137.75 75.3 103.71 New England 6 3,032 164.58 75.9 124.98 Mountain 5 1,940 116.89 58.9 68.80 International 5 1,953 140.10 72.0 100.87 All Regions 98 48,785 174.20 71.7 124.89 Quarter ended December 31, 2004 Average Percent Average Occupancy Change in Daily Rate Percentages RevPAR RevPAR Pacific $160.50 69.5% $111.48 11.2% Florida 160.30 66.9 107.22 (.5) Mid-Atlantic 212.85 79.9 170.16 12.9 North Central 134.43 66.2 88.99 8.6 DC Metro 169.47 73.4 124.35 14.3 Atlanta 157.64 67.1 105.84 13.4 South Central 126.73 71.5 90.60 14.5 New England 161.27 72.1 116.28 7.5 Mountain 113.08 51.4 58.13 18.4 International 127.57 71.4 91.10 10.7 All Regions 161.68 70.0 113.24 10.3 As of Year ended December 31, 2005 December 31, 2005 Average Average No. of No. of Daily Occupancy Properties Rooms Rate Percentages RevPAR Pacific 20 11,035 $171.51 75.9% $130.22 Florida 11 7,027 173.99 71.6 124.51 Mid-Atlantic 10 6,720 209.71 79.2 166.06 North Central 13 4,923 132.47 67.8 89.78 DC Metro 11 4,661 181.76 77.2 140.27 Atlanta 11 3,968 159.13 69.0 109.83 South Central 6 3,526 134.96 76.3 102.94 New England 6 3,032 155.57 72.9 113.35 Mountain 5 1,940 112.93 62.6 70.72 International 5 1,953 134.18 72.2 96.83 All Regions 98 48,785 166.80 73.6 122.82 Year ended December 31, 2004 Average Percent Average Occupancy Change in Daily Rate Percentages RevPAR RevPAR Pacific $160.37 73.7% $118.19 10.2% Florida 164.70 71.4 117.60 5.9 Mid-Atlantic 189.17 78.3 148.19 12.1 North Central 123.93 67.8 84.06 6.8 DC Metro 163.01 74.8 121.96 15.0 Atlanta 151.79 68.4 103.82 5.8 South Central 125.73 74.9 94.19 9.3 New England 150.48 72.9 109.64 3.4 Mountain 106.70 57.7 61.54 14.9 International 122.86 72.3 88.87 9.0 All Regions 154.96 72.4 112.21 9.5 Comparable Hotels by Property Type (a) As of Quarter Ended December 31, 2005 December 31, 2005 Average Average No. of No. of Daily Occupancy Properties Rooms Rate Percentages RevPAR Urban 39 22,874 $198.83 75.0% $149.20 Suburban 33 12,195 136.70 66.5 90.84 Airport 16 7,328 126.61 75.6 95.72 Resort/Convention 10 6,388 206.77 65.3 135.11 All Types 98 48,785 174.20 71.7 124.89 Quarter ended December 31, 2004 Average Percent Average Occupancy Change in Daily Rate Percentages RevPAR RevPAR Urban $182.92 73.9% $135.22 10.3% Suburban 127.58 63.9 81.53 11.4 Airport 115.21 72.3 83.31 14.9 Resort/Convention 196.23 65.3 128.06 5.5 All Types 161.68 70.0 113.24 10.3 As of Year Ended December 31, 2005 December 31, 2005 Average Average No. of No. of Daily Occupancy Properties Rooms Rate Percentages RevPAR Urban 39 22,874 $183.26 76.7% $140.63 Suburban 33 12,195 133.96 67.9 90.93 Airport 16 7,328 122.41 75.9 92.89 Resort/Convention 10 6,388 216.80 70.9 153.82 All Types 98 48,785 166.80 73.6 122.82 Year ended December 31, 2004 Average Percent Average Occupancy Change in Daily Rate Percentages RevPAR RevPAR Urban $170.00 75.3% $127.95 9.9% Suburban 124.44 66.5 82.71 9.9 Airport 113.12 74.6 84.37 10.1 Resort/Convention 202.44 71.1 143.97 6.8 All Types 154.96 72.4 112.21 9.5 (a) See the notes to financial information for a discussion of reporting periods and comparable hotel results. HOST MARRIOTT CORPORATION Comparable Hotel Operating Data Schedule of Comparable Hotel Results (a) (unaudited, in millions, except hotel statistics) Quarter ended Year ended December 31, December 31, 2005 2004 2005 2004 Number of hotels 98 98 98 98 Number of rooms 48,785 48,785 48,785 48,785 Percent change in Comparable Hotel RevPAR 10.3% - 0.0% - Operating profit margin under GAAP (b) 14.9% 12.5% 13.4% 11.1% Comparable hotel adjusted operating profit margin (c) 25.3% 23.8% 24.3% 22.6% Comparable hotel sales Room $696 $631 $2,182 $1,998 Food and beverage 392 368 1,143 1,082 Other 72 73 239 230 Comparable hotel sales (d) 1,160 1,072 3,564 3,310 Comparable hotel expenses Room 168 156 531 500 Food and beverage 280 268 846 811 Other 46 46 149 145 Management fees, ground rent and other costs 372 347 1,171 1,105 Comparable hotel expenses (e) 866 817 2,697 2,561 Comparable hotel adjusted operating profit 294 255 867 749 Non-comparable hotel results, net (f) 23 21 85 71 Comparable hotels classified as held for sale, net (3) (4) (12) (13) Office buildings and limited service properties, net (g) 5 3 5 2 Other income - 1 - 1 Depreciation and amortization (117) (110) (368) (349) Corporate and other expenses (22) (24) (67) (67) Gain on insurance settlement 9 3 9 3 Operating profit $189 $145 $519 $397 (a) See the notes to the financial information for discussion of non-GAAP measures, reporting periods and comparable hotel results. (b) Operating profit margin under GAAP is calculated as the operating profit divided by the total revenues per the consolidated statements of operations. (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 total revenues per the consolidated statements of operations to the comparable hotel sales is as follows: Quarter ended Year ended December 31, December 31, 2005 2004 2005 2004 Revenues per the consolidated statements of operations $1,272 $1,159 $3,881 $3,574 Revenues of hotels held for sale 14 16 52 52 Non-comparable hotel sales (103) (91) (327) (271) Hotel sales for the property for which we record rental income, net 14 16 49 47 Rental income for office buildings and limited service hotels (30) (27) (84) (80) Other income - (1) - (1) Adjustment for hotel sales for comparable hotels to reflect Marriott's fiscal year for Marriott-managed hotels (7) - (7) (11) Comparable hotel sales $1,160 $1,072 $3,564 $3,310 (e) The reconciliation of operating costs per the consolidated statements of operations to the comparable hotel expenses is as follows (in millions): Quarter ended Year ended December 31, December 31, 2005 2004 2005 2004 Operating costs and expenses per the consolidated statements of operations $1,083 $1,014 $3,362 $3,177 Operating cost of hotels held for sale 11 12 40 39 Non-comparable hotel expenses (82) (70) (244) (201) Hotel expenses for the property for which we record rental income 14 16 49 47 Rent expense for office buildings and limited service hotels (25) (24) (79) (78) Adjustment for hotel expenses for comparable hotels to reflect Marriott's fiscal year for Marriott-managed hotels (5) - (5) (10) Depreciation and amortization (117) (110) (368) (349) Corporate and other expenses (22) (24) (67) (67) Gain on insurance settlement 9 3 9 3 Comparable hotel expenses $866 $817 $2,697 $2,561 (f) Non-comparable hotel results, net, includes the following items: (i) the results of operations of our non-comparable hotels whose operations are included in our consolidated statement of operations as continuing operations and (ii) the difference between the number of days of operations reflected in the comparable hotel results and the number of days of operations reflected in the consolidated statements of operations. (g) Represents rental income less rental expense for limited service properties and office buildings. HOST MARRIOTT CORPORATION Other Financial and Operating Data (unaudited, in millions, except per share amounts) December 31, December 31, 2005 2004 Equity Common shares outstanding 361.0 351.4 Common shares and minority held common OP Units outstanding 380.8 372.4 Preferred OP Units outstanding .02 .02 Class B Preferred shares outstanding (a) - 4.0 Class C Preferred shares outstanding 6.0 6.0 Class D Preferred shares outstanding (a) - .03 Class E Preferred shares outstanding 4.0 4.0 Security pricing (per share price) Common (b) $18.95 $17.30 Class B Preferred (a) (b) $- $25.80 Class C Preferred (b) $25.25 $26.37 Class E Preferred (b) $26.75 $27.45 Convertible Preferred Securities (c) $61.02 $57.25 Exchangeable Senior Debentures (d) $1,163.70 $1,156.00 Dividends declared per share for calendar year Common (e) $.41 $.05 Class A Preferred (f) $- $1.38 Class B Preferred (a) $.87 $2.50 Class C Preferred (e) $2.50 $2.50 Class D Preferred (a) $.87 $2.50 Class E Preferred (e) $2.22 $1.37 Debt Series B senior notes, with a rate of 77/8% due August 2008 $136 $304 Series E senior notes, with a rate of 83/8% due February 2006 - 300 Series G senior notes, with a rate of 91/4% due October 2007 (g) 236 243 Series I senior notes, with a rate of 91/2% due January 2007 (h) 451 468 Series K senior notes, with a rate of 71/8% due November 2013 725 725 Series M senior notes, with a rate of 7% due August 2012 (i) 346 346 Series O senior notes, with a rate of 63/8% due March 2015 650 - Exchangeable Senior Debentures, with a rate of 3.25% due April 2024 493 491 Senior notes, with an average rate of 9.7%, maturing through May 2012 13 13 Total senior notes 3,050 2,890 Mortgage debt (non-recourse) secured by $3.1 billion of real estate assets, with an average interest rate of 7.8% and 7.7% at December 31, 2005 and 2004, respectively, maturing through February 2023 1,823 2,043 Credit facility (j) 20 - Convertible Subordinated Debentures, with a rate of 63/4% due December 2026 (k) 387 492 Other 90 98 Total debt $5,370 $5,523 Percentage of fixed rate debt 85% 85% Weighted average interest rate 7.2% 7.1% Weighted average debt maturity 6.4 years 6.6 years Quarter ended Year ended December 31, December 31, 2005 2004 2005 2004 Hotel Operating Statistics for All Full-Service Properties (l) Average daily rate $174.90 $160.20 $167.64 $152.03 Average occupancy 70.1% 69.2% 72.6% 72.0% RevPAR $122.61 $110.84 $121.66 $109.51 (a) On May 20, 2005, we redeemed, at par, all four million shares of our 10% Class B Cumulative Redeemable Preferred stock for approximately $101 million, including accrued dividends and all 33,182 shares of our 10% Class D Cumulative Redeemable Preferred Stock. (b) Share prices are the closing price as reported by the New York Stock Exchange. (c) Market price as quoted by Bloomberg L.P. Amount reflects the price of a single $50 security, which is convertible into common stock upon the occurrence of certain events. (d) Market price as quoted by Bloomberg L.P. Amount reflects the price of a single $1,000 debenture, which is exchangeable for common stock upon the occurrence of certain events. (e) On December 15, 2005, we declared a fourth quarter common dividend of $.12 per share and preferred dividends per share for our Class C and Class E preferred stock of $.625 and $.5546875, respectively. (f) On August 3, 2004, we redeemed all 4.16 million shares of the outstanding Class A preferred stock at a price of $25.00 per share plus accrued dividends. (g) Includes the fair value of interest rate swap agreements of $(6) and $1 million as of December 31, 2005 and 2004, respectively. (h) Includes the fair value of an interest rate swap agreement of $1 million and $18 million as of December 31, 2005 and 2004, respectively. (i) On March 3, 2005, we exchanged all of our 7% Series L senior notes due 2012 for our 7% Series M senior notes due 2012. The terms of the Series L senior notes and the Series M senior notes are substantially identical in all material respects, except that the Series M senior notes are registered under the Securities Act of 1933 and are, therefore, freely transferable by the holders. (j) The outstanding balance on our credit facility of $20 million as of December 31, 2005 was repaid on January 13, 2006. Currently, we have $575 million of available capacity under our credit facility. (k) Effective February 10, 2006, the Company exercised its right to cause the conversion rights of its Convertible Subordinated Debentures to expire. Prior to this date, a substantial majority of holders of the Convertible Subordinated Debentures (and corresponding Convertible Preferred Securities) exercised their right to convert their debentures into the Company's common stock and as of February 10, 2006, $2 million of Convertible Subordinated Debentures remained outstanding. Between December 2005 through February 10, 2006, the Company issued 30.8 million shares of its common stock to converting holders. (l) The operating statistics reflect all consolidated properties as of December 31, 2005 and December 31, 2004, respectively. The operating statistics include the results of operations for five properties sold in 2005 and nine properties sold in 2004 prior to their disposition. FIRST AND FINAL ADD -- MORE TABULAR INFORMATION -- TO FOLLOW FCMN Contact: Andrew.Fagon@hostmarriott.com http://www.newscom.com/cgi-bin/prnh/20040324/HOSTMARRIOTTLOGO http://photoarchive.ap.org/ DATASOURCE: Host Marriott Corporation CONTACT: Kevin J. Jacobs, Vice President Corporate Finance, +1-240-744-5212, or Gregory J. Larson, Treasurer, Senior Vice President Investor Relations, +1-240-744-5120, both of Host Marriott Corporation Web site: http://www.hostmarriott.com/

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