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Host Hotels & Resorts, Inc., Owner of 113 Hotels with 62,000 rooms, Reports a 2nd Qtr 2009
Net Loss of $69 million Compared to Net Income of $193 million for the Prior Year 2nd Qtr;

Total Revenue Decreased $324 million, or 23.3%


BETHESDA, Md., July 22, 2009 - Host Hotels & Resorts, Inc. (NYSE:HST) , the nation's largest lodging real estate investment trust (REIT), today announced its results of operations for the second quarter ended June 19, 2009.

  --  Total revenue decreased $324 million, or 23.3%, to $1,064 million for
      the second quarter and $494 million, or 20.3%, to $1,936 million for
      year-to-date 2009 as compared to last year.

  --  Net loss was $69 million for the second quarter of 2009 compared to
      net income of $193 million for the second quarter of 2008. For
      year-to-date 2009, net loss was $129 million compared to net income of
      $256 million for year-to-date 2008. Loss per diluted share was $.12
      for the second quarter of 2009 compared to earnings per diluted share
      of $.34 in 2008. For year-to-date 2009, loss per diluted share was
      $.24 compared to earnings per diluted share of $.45 for year-to-date
      2008.

Operating results for the periods presented were affected by several items including:

  --  non-cash impairment charges recorded on four hotels and the Company's
      investment in its European joint venture of $91 million and $131
      million for second quarter and year-to-date 2009, respectively;
  --  non-cash interest expense in 2008 and 2009 due to an accounting change
      implemented retrospectively in the first quarter of 2009 related to
      the Company's exchangeable debentures; and
  --  gains associated with hotel dispositions and other items.

The net effect of these items on loss per diluted share for the second quarter of 2009 was a decrease in earnings of $89 million, or $.16 per diluted share. For the second quarter of 2008, these items increased earnings by $6 million, or $.01 per diluted share. The net effect of these items was a decrease in earnings of $117 million, or $.21 per diluted share, and $4 million, or $.01 per diluted share, for year-to-date 2009 and 2008, respectively.

  --  Funds from Operations (FFO) per diluted share was $.12 for the second
      quarter of 2009 compared to $.55 per diluted share for the second
      quarter of 2008. FFO per diluted share was also affected by the
      non-cash interest expense, non-cash impairment charges and other items
      described above. The net effect of these items was a decrease in FFO
      per diluted share of $.15 and $.01 for the second quarter 2009 and
      2008, respectively. For year-to-date 2009, FFO per diluted share was
      $.22 compared to $.88 per diluted share for year-to-date 2008. The net
      effect the non-cash interest expense, non-cash impairment charges and
      other items was a decrease in FFO per diluted share of $.24 and $.01
      for year-to-date 2009 and 2008, respectively.

  --  Adjusted EBITDA, which is Earnings before Interest Expense, Income
      Taxes, Depreciation, Amortization and other items, decreased $163
      million to $256 million  for the second quarter, and $251 million to
      $430 million for year-to-date 2009 when compared to last year.

For further detail of the transactions affecting net income, earnings per diluted share and FFO per diluted share, refer to the notes to the "Reconciliation of Net Income to EBITDA, Adjusted EBITDA and FFO per Diluted Share."

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 second quarter of 2009 decreased 24.9% when compared to the second quarter of 2008. Year-to-date 2009 comparable hotel RevPAR decreased 22.7% when compared to year-to-date 2008. Comparable hotel adjusted operating profit margins decreased 560 basis points and 500 basis points for the second quarter and year-to-date 2009, respectively. For further detail, see "Notes to the Financial Information."

LIQUIDITY
As of June 19, 2009, the Company had over $1.3 billion of cash and cash equivalents and $600 million of available capacity under its credit facility. During the second quarter, the Company completed two significant transactions which enhanced its financial flexibility and liquidity. These transactions were:

  --  the issuance of 75,750,000 shares of common stock for net proceeds of
      approximately $480 million; and

  --  the issuance of $400 million, 9% Series T senior notes maturing May
      15, 2017 for net proceeds of approximately $380 million;

The proceeds from these transactions, when combined with the first quarter $120 million mortgage loan obtained on the JW Marriott, Washington D.C. and the sale of the Hyatt Regency Boston for $113 million resulted in total proceeds raised year-to-date of over $1.1 billion. Subsequent to the end of the second quarter, we also disposed of three non-core properties: the 253-room Washington Dulles Marriott Suites, the 448-room Sheraton Stamford and the 430-room Boston Marriott Newton, for net proceeds of approximately $64 million. The proceeds from these transactions have been and will continue to be used to repay or redeem near-term debt maturities and to maintain higher than historical cash balances due to the current uncertainty in the credit markets. During the second quarter, the Company repaid $200 million outstanding under the revolver portion of the credit facility. Additionally, subsequent to quarter end, the Company repaid the $175 million mortgage debt secured by the San Diego Marriott Hotel & Marina. As a result of these transactions, the Company's remaining debt maturities total $480 million through year end 2010, which includes principal amortization of $20 million.

CAPITAL EXPENDITURES
Capital expenditures totaled approximately $84 million and $192 million for the quarter and year-to-date, which was a decline of approximately 48% and 38%, respectively, from the prior year. These expenditures included return on investment (ROI) and repositioning projects of approximately $47 million and $101 million for the second quarter and year-to-date 2009, respectively.

DIVIDEND
The Company intends to declare a common dividend of approximately $.23 to $.25 per share in the first half of September 2009. The common dividend is expected to consist of cash in the amount of approximately $.03 per share with the remainder to be paid in shares of common stock, both of which will be taxable to stockholders. The common dividend will be paid by the end of 2009. The Company intends to continue paying a cash dividend on its preferred stock.

2009 OUTLOOK
The Company's ability to predict future operating results continues to be significantly affected by the current recession and its effect on business and leisure travel. The Company expects that the trends affecting the economy will continue to depress hotel operating results across the portfolio for the remainder of 2009. In the event that comparable hotel RevPAR were to decline approximately 20% to 23% for the full year 2009, the Company would anticipate that full year 2009 operating profit margins under GAAP would decrease approximately 1,170 basis points to 1,290 basis points and its comparable hotel adjusted operating profit margins would decrease approximately 600 basis points to 650 basis points. Based upon these parameters, the Company would estimate the following would occur for full year 2009:

  --  loss per diluted share should be approximately $.46 to $.53;
  --  net loss should be approximately $267 million to $310 million;
  --  FFO per diluted share should be approximately $.43 to $.50 (including
      the effect of the deduction of $131 million in non-cash impairment
      charges and $26 million of non-cash interest expense on the
      exchangeable debentures due to an accounting change for 2009, or, in
      total, a reduction of $.25 per diluted share); and
  --  Adjusted EBITDA should be approximately $750 million to $800 million.
 
 
 

HOST HOTELS & RESORTS, INC.
                           Consolidated Balance Sheets (a)
                (in millions, except shares and per share amounts)

                                                     June 19,  December 31,
                                                       2009       2008
                                                       ----       ----
                                                    (unaudited)
                                     ASSETS
                                     ------
  Property and equipment, net                          $10,431  $10,739
  Assets held for sale                                      55        -
  Due from managers                                         81       65
  Investments in affiliates                                144      229
  Deferred financing costs, net                             51       46
  Furniture, fixtures and equipment replacement
   fund                                                    121      119
  Other                                                    197      200
  Restricted cash                                           46       44
  Cash and cash equivalents                              1,346      508
                                                         -----      ---
       Total assets                                    $12,472  $11,950
                                                       =======  =======

                             LIABILITIES AND EQUITY
                             ----------------------

  Debt
    Senior notes, including $859 million and $916
     million, respectively, net of                      $4,272   $3,943
     discount, of Exchangeable Senior Debentures (b)
    Mortgage debt                                        1,524    1,436
    Credit facility, including the $210 million term
     loan                                                  210      410
    Other                                                   87       87
                                                            --       --
       Total debt                                        6,093    5,876
  Accounts payable and accrued expenses                     86      119
  Other                                                    171      183
                                                           ---      ---
       Total liabilities                                 6,350    6,178
                                                         -----    -----

  Non-controlling interests in Host Hotels &
   Resorts, L.P.                                           115      156

  Host Hotels & Resorts, Inc. stockholders'
   equity:
    Cumulative redeemable preferred stock
     (liquidation preference $100 million)
     50 million shares authorized; 4 million shares
     issued and outstanding                                 97       97

    Common stock, par value $.01, 1,050 million
     shares and 750 million shares
     authorized, respectively; 604.6 million shares
     and 525.3 million shares
     issued and outstanding, respectively                    6        5

    Additional paid-in capital                           6,397    5,874
    Accumulated other comprehensive income                   2        5
    Deficit                                               (518)    (389)
                                                         -----    -----
       Total Host Hotels & Resorts, Inc. stockholders'
        equity                                           5,984    5,592
  Non-controlling interests-other consolidated
   partnerships (c)                                         23       24
                                                            --       --
       Total equity                                      6,007    5,616
                                                         -----    -----
       Total liabilities and equity                    $12,472  $11,950
                                                       =======  =======

  (a)  Our consolidated balance sheet as of June 19, 2009 has been prepared
       without audit. Certain information and footnote disclosures
       normally included in financial statements presented in accordance
        with GAAP have been omitted.
  (b)  As a result of the adoption of a new accounting requirement for
       convertible debt instruments that may be settled in cash upon
       conversion (including partial cash settlement), the principal
       balance for our Exchangeable Senior Debentures was reduced by
       $60 million and $76 million as of June 19, 2009 and December 31,
       2008, respectively, with an offsetting increase to equity.  The
       decline in principal reflects the unamortized discount balance
       related to the implementation of the new accounting requirement. The
       face amount of the debentures was $925 million at June 19, 2009.
       See notes to "Other Financial and Operating Data," for further
       discussion.
  (c)  As a result of the adoption of a new accounting requirement, non-
       controlling interests of other consolidated partnerships (previously
       referred to as "Interest of minority partners of other consolidated
       partnerships") is now included as a separate component of equity.
 
 

                              HOST HOTELS & RESORTS, INC.
                        Consolidated Statements of Operations
                 (unaudited, in millions, except per share amounts)

                                         Quarter ended   Year-to-date ended
                                        ---------------- ------------------
                                        June 19, June 13, June 19, June 13,
                                           2009   2008     2009     2008
                                          -----  -----     -----   -----

  Revenues
    Rooms                                  $629   $837     $1,134  $1,450
    Food and beverage                       323    433        592     762
    Other                                    87     91        156     161
                                             --     --        ---     ---
      Total hotel sales                   1,039  1,361      1,882   2,373
    Rental income                            25     27         54      57
                                             --     --         --      --
      Total revenues                      1,064  1,388      1,936   2,430
                                          -----  -----      -----   -----
  Expenses
    Rooms                                   166    194        302     348
    Food and beverage                       232    297        431     535
    Hotel departmental expenses             271    318        505     571
    Management fees                          41     71         74     123
    Other property-level expenses            96     94        177     175
    Depreciation and amortization (b)       196    128        353     249
    Corporate and other expenses             17     14         32      31
    Gain on insurance settlement              -      -          -      (7)
                                              -      -          -     ---
      Total operating costs and expenses  1,019  1,116      1,874   2,025
                                          -----  -----      -----   -----
  Operating profit                           45    272         62     405
  Interest income                             2      4          4       9
  Interest expense (c)                      (82)   (88)      (169)   (171)
  Net gains on property transactions and
   other                                      1      1          2       2
  Gain on foreign currency                    6      -          4       -
  Equity in earnings (losses) of
   affiliates (b)                           (32)     1        (34)      2
                                           ----      -       ----       -
  Income (loss) before income taxes         (60)   190       (131)    247
  Benefit (provision) for income taxes      (10)   (13)         4      (7)
                                           ----   ----          -     ---
  Income (loss) from continuing
   operations                               (70)   177       (127)    240
  Income (loss) from discontinued
   operations                                 1     16         (2)     16
                                              -     --        ---      --
  Net income (loss)                         (69)   193       (129)    256
  Less:  Net (income) loss attributable
    to non-controlling
    interests (d)                             1    (10)         2     (18)
                                              -   ----          -    ----
  Net income (loss) attributable to
   common stockholders                      (68)   183       (127)    238
  Less:  Dividends on preferred stock        (2)    (2)        (4)     (4)
                                            ---    ---        ---     ---
  Net income (loss) available to common
   stockholders                            $(70)  $181      $(131)   $234
                                           ====   ====      =====    ====
  Basic earnings (loss) per common share:
    Continuing operations                 $(.12)  $.32      $(.24)   $.42
    Discontinued operations                   -    .03          -     .03
                                              -    ---      -----     ---
  Basic earnings (loss) per common share  $(.12)  $.35      $(.24)   $.45
                                          =====   ====      =====    ====
  Diluted earnings (loss) per common
   share:
    Continuing operations                 $(.12)  $.31      $(.24)   $.42
    Discontinued operations                   -    .03          -     .03
                                              -    ---      -----     ---
  Diluted earnings (loss) per common
   share                                  $(.12)  $.34      $(.24)   $.45
                                          =====   ====      =====    ====

  (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.
  (b)  During 2009, we identified several properties to be tested for
       impairment based on certain triggering events, as prescribed by
       GAAP. We tested these properties for impairment based on
       management's estimate of expected future undiscounted cash flows
       over our expected holding period. As a result, we recorded
       non-cash impairment charges totaling $91 million for the second
       quarter and $131 million year-to-date based on the difference between
       the discounted cash flows and the carrying amount. Of these
       impairment charges, $57 million and $78 million for second quarter
       and year-to-date, respectively, have been included in depreciation
       expense and $19 million was included in discontinued operations for
       the year to date.  The remaining $34 million of impairment charges
       were for our investment in the European joint venture, which is
       included in equity in earnings (losses) of affiliates.
  (c)  The retroactive adoption of a new accounting requirement regarding
       the exchangeable debentures increased interest expense by $6
       million and $7 million for both the second quarter of 2009 and 2008,
       respectively, and $13 million and $14 million for year-to-date 2009
       and 2008, respectively. Interest expense for year-to-date 2009
       includes the $3 million gain on the first quarter repurchase of a
       portion of the 3.25% Exchangeable Senior Debentures issued in April
       2004 (the "2004 Debentures"). See notes to the "Reconciliation of
       Net Income to EBITDA, Adjusted EBITDA and FFO per Diluted Share" for
       further discussion.
  (d)  As a result of the adoption of a new accounting requirement, net
       income attributable to non-controlling interests of Host LP and of
       other non-consolidated partnerships are no longer included in the
       determination of net income. Prior periods have been revised to
       reflect this presentation. The net income attributable to non-
       controlling interests is included in the net income available to
       common stockholders; therefore, the implementation of this
       requirement had no effect on our basic or diluted earnings per
       share calculation.
 

                          Earnings per Common Share
              (unaudited, in millions, except per share amounts)

                                          Quarter ended  Year-to-date ended
                                        ---------------- ------------------
                                        June 19, June 13, June 19, June 13,
                                           2009   2008     2009     2008
                                          -----  -----     -----   -----
 

  Net income (loss)                        $(69)  $193      $(129)  $256
    Net (income) loss attributable to
     non-controlling                          1    (10)         2    (18)
     interests
    Dividends on preferred stock             (2)    (2)        (4)    (4)
                                            ---    ---        ---    ---
  Earnings (loss) available to common
   stockholders                             (70)   181       (131)   234
    Assuming conversion of 2004
     Exchangeable Senior
     Debentures                               -      7          -      -
    Assuming deduction of gain recognized
     for the repurchase of 2004 Exchangeable
      Senior Debentures (a)                   -      -         (2)     -
                                              -      -        ---      -
  Diluted earnings (loss) available to
   common stockholders                     $(70)  $188      $(133)  $234
                                           ====   ====      =====   ====

  Basic weighted average shares
   outstanding                            575.0  520.5      550.3  521.5
  Diluted weighted average shares
   outstanding (b)                        575.0  551.7      552.2  521.8

  Basic earnings (loss) per share (c)     $(.12)  $.35      $(.24)  $.45
  Diluted earnings (loss) per share (c)
   (d)                                    $(.12)  $.34      $(.24)  $.45

  (a)  During the first quarter of 2009, we repurchased $75 million face
       amount of the 2004 Debentures with a carrying value of $72 million
       for $69 million. The adjustments to dilutive earnings per common
       share related to the 2004 Debentures repurchased during the year
       include the $3 million gain on repurchase, net of interest expense
       on the repurchased debentures.
  (b)  Dilutive securities may include shares granted under comprehensive
       stock plans, preferred OP Units held by minority 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 are
       anti-dilutive.
  (c)  Basic earnings per common share is computed by dividing net income
       available to common stockholders by the weighted average number of
       shares of common stock outstanding. Diluted earnings per common
       share is computed by dividing net income available to common
       stockholders, as adjusted for potentially dilutive securities, by the
       weighted average number of shares of common stock outstanding plus
       potentially dilutive securities.
  (d)  See notes to the "Reconciliation of Net Income to EBITDA, Adjusted
       EBITDA and FFO per Diluted Share" for information on significant
       items affecting diluted earnings per common share for which no
       adjustments were made.
 
 

                        HOST HOTELS & RESORTS, INC.
                      Comparable Hotel Operating Data
                                (unaudited)

                         Comparable Hotels by Region (a)

                  As of June 19, 2009      Quarter ended June 19, 2009
                  -------------------      ---------------------------
                                                     Average
                  No. of     No. of       Average   Occupancy
                Properties    Rooms      Room Rate Percentages    RevPAR
                ----------    -----     ---------- -----------    ------
  Pacific               27      15,943     $176.06        67.2%  $118.23
  Mid-Atlantic          11       8,683      207.41        76.3    158.15
  North
   Central              14       6,204      133.85        61.2     81.92
  Florida                9       5,677      197.36        66.9    132.11
  DC Metro              13       5,666      198.71        80.9    160.79
  New England           10       5,165      164.84        60.7    100.12
  South
   Central               9       5,687      148.89        65.0     96.79
  Mountain               8       3,364      166.68        57.8     96.35
  Atlanta                8       4,252      154.70        58.5     90.55
  International          7       2,473      137.37        60.9     83.69
                         -       -----
    All
     Regions           116      63,114      175.24        67.0    117.36
                       ===      ======
 

                    Quarter ended June 13, 2008
                    ---------------------------
                             Average                    Percent
                  Average   Occupancy                  Change in
                 Room Rate Percentages      RevPAR       RevPAR
                ---------- -----------      ------       ------
  Pacific          $206.12        76.5%    $157.60       (25.0)%
  Mid-Atlantic      265.87        81.9      217.73       (27.4)
  North
   Central          158.90        70.6      112.15       (27.0)
  Florida           236.85        78.3      185.51       (28.8)
  DC Metro          214.11        83.7      179.31       (10.3)
  New England       182.33        77.0      140.39       (28.7)
  South
   Central          169.51        71.3      120.93       (20.0)
  Mountain          182.61        69.8      127.49       (24.4)
  Atlanta           176.53        69.4      122.43       (26.0)
  International     181.20        74.0      134.00       (37.5)
    All
     Regions        205.28        76.1      156.22       (24.9)
 

                  As of June 19, 2009   Year-to-date ended June 19, 2009
                  -------------------   --------------------------------
                                                     Average
                  No. of        No. of    Average   Occupancy
                Properties       Rooms   Room Rate Percentages    RevPAR
                ----------       -----  ---------- -----------    ------
  Pacific               27      15,943     $180.89        64.8%  $117.21
  Mid-Atlantic          11       8,683      206.48        69.8    144.20
  North
   Central              14       6,204      128.79        56.1     72.21
  Florida                9       5,677      209.66        68.6    143.90
  DC Metro              13       5,666      204.54        74.5    152.44
  New England           10       5,165      156.36        54.0     84.45
  South
   Central               9       5,687      152.68        65.1     99.44
  Mountain               8       3,364      174.64        56.5     98.69
  Atlanta                8       4,252      157.57        59.6     93.88
  International          7       2,473      138.08        60.9     84.14
                         -       -----
    All
     Regions           116      63,114      177.94        64.1    114.07
                       ===      ======
 

                 Year-to-date ended June 13, 2008
                 --------------------------------
                             Average                   Percent
                  Average   Occupancy                 Change in
                 Room Rate Percentages      RevPAR      RevPAR
                ---------- -----------      ------      ------
  Pacific          $206.10        74.7%    $154.01       (23.9)%
  Mid-Atlantic      253.22        78.1      197.72       (27.1)
  North
   Central          149.45        63.0       94.21       (23.3)
  Florida           242.60        79.7      193.29       (25.5)
  DC Metro          208.79        74.4      155.40        (1.9)
  New England       172.26        69.4      119.54       (29.4)
  South
   Central          168.65        71.9      121.33       (18.0)
  Mountain          192.74        67.4      129.99       (24.1)
  Atlanta           175.74        69.5      122.16       (23.2)
  International     172.90        71.9      124.29       (32.3)
    All
     Regions        202.30        72.9      147.57       (22.7)
 

                  Comparable Hotels by Property Type (a)

                  As of June 19, 2009      Quarter ended June 19, 2009
                  -------------------      ---------------------------
                                                     Average
                  No. of        No. of    Average   Occupancy
                Properties       Rooms   Room Rate Percentages    RevPAR
                ----------      ------  ---------- -----------    ------
  Urban                 54      34,920     $184.07        69.5%  $128.01
  Suburban              34      12,904      141.42        58.2     82.28
  Resort/
   Conference           13       8,082      231.93        67.6    156.71
  Airport               15       7,208      119.40        69.5     82.96
                        --       -----
    All Types          116      63,114      175.24        67.0    117.36
                       ===      ======
 

                    Quarter ended June 13, 2008
                    ---------------------------
                             Average                    Percent
                  Average   Occupancy                  Change in
                 Room Rate Percentages      RevPAR       RevPAR
                ---------- -----------      ------       ------
  Urban            $216.59        77.5%    $167.86       (23.7)%
  Suburban          161.59        69.2      111.89       (26.5)
  Resort/
   Conference       274.55        78.5      215.40       (27.2)
  Airport           140.59        78.9      110.94       (25.2)
    All Types       205.28        76.1      156.22       (24.9)
 
 

                  As of June 19, 2009   Year-to-date ended June 19, 2009
                  -------------------   --------------------------------
                                                     Average
                  No. of        No. of    Average   Occupancy
                Properties       Rooms   Room Rate Percentages    RevPAR
                ----------      ------  ---------- -----------    ------
  Urban                 54      34,920     $185.52        65.6%  $121.73
  Suburban              34      12,904      144.82        57.3     82.93
  Resort/
   Conference           13       8,082      241.16        66.5    160.42
  Airport               15       7,208      124.08        66.4     82.42
                        --       -----
    All Types          116      63,114      177.94        64.1    114.07
                       ===      ======
 

                 Year-to-date ended June 13, 2008
                 --------------------------------
                             Average                    Percent
                  Average   Occupancy                  Change in
                 Room Rate Percentages      RevPAR       RevPAR
                ---------- -----------      ------       ------
  Urban            $209.96        74.1%    $155.55       (21.7)%
  Suburban          162.38        66.2      107.46       (22.8)
  Resort/
   Conference       279.07        77.4      216.04       (25.7)
  Airport           142.11        74.7      106.14       (22.4)
    All Types       202.30        72.9      147.57       (22.7)

  (a) See the notes to financial information for a discussion of reporting
      periods and comparable hotel results.
 

                             HOST HOTELS & RESORTS, INC.
                          Comparable Hotel Operating Data
                      Schedule of Comparable Hotel Results (a)
                 (unaudited, in millions, except hotel statistics)
 

                                           Quarter ended  Year-to-date ended
                                         ---------------- ------------------
                                         June 19, June 13, June 19, June 13,

                                             2009    2008    2009     2008
                                            -----   -----   -----    -----

  Number of hotels                            116     116     116     116
  Number of rooms                          63,114  63,114  63,114  63,114
  Percent change in comparable hotel
   RevPAR                                  (24.9)%      -% (22.7)%      -%
  Operating profit margin under GAAP (b)      4.2%   19.6%    3.2%   16.7%
  Comparable hotel adjusted operating
   profit margin (b)                         24.4%   30.0%   23.2%   28.2%

  Comparable hotel sales
    Room                                     $645    $858  $1,161  $1,506
    Food and beverage                         332     445     608     793
    Other                                      90      95     161     173
                                               --      --     ---     ---
      Comparable hotel sales (c)            1,067   1,398   1,930   2,472
                                            -----   -----   -----   -----
  Comparable hotel expenses
    Room                                      170     199     308     360
    Food and beverage                         238     305     440     556
    Other                                      41      49      73      88
    Management fees, ground rent and other
     costs                                    358     426     661     772
                                              ---     ---     ---     ---
      Comparable hotel expenses (d)           807     979   1,482   1,776
                                              ---     ---   -----   -----
  Comparable hotel adjusted operating
   profit                                     260     419     448     696
  Non-comparable hotel results, net (e)         -       -       3      (5)
  Office buildings and select service
   properties, net (f)                          1      (1)      -      (1)
  Comparable hotels classified as
   held-for-sale, net                          (3)     (4)     (4)     (5)
  Depreciation and amortization              (196)   (128)   (353)   (249)
  Corporate and other expenses                (17)    (14)    (32)    (31)
                                             ----    ----    ----    ----
  Operating profit                            $45    $272     $62    $405
                                              ===    ====     ===    ====

  (a) See the notes to the financial information for discussion of
      non-GAAP measures, reporting periods and comparable hotel results.
  (b) Operating profit margins are calculated by dividing the applicable
      operating profit by the related revenue amount. GAAP margins are
      calculated using amounts presented in the consolidated statement of
      operations. Comparable margins are calculated using amounts presented
      in the above table.
  (c) The reconciliation of total revenues per the consolidated statements
      of operations to the comparable hotel sales is as follows:
 

                                  Quarter ended   Year-to-date ended
                                 ---------------- ------------------
                                 June 19, June 13, June 19, June 13,
                                   2009    2008     2009      2008
                                   ----    ----     ----      ----

  Revenues per the consolidated
   statements of operations      $1,064  $1,388    $1,936    $2,430
  Business interruption revenues
   for comparable hotels              -       -         -         7
  Hotel sales for the property
   for which we record
   rental income, net                10      14        22        27
  Hotel sales for comparable
   hotels classified as
   held-for-sale                     13      15        23        25
  Rental income for office
   buildings and select
   service hotels                   (20)    (19)      (39)      (38)
  Adjustment for hotel sales for
   comparable hotels
   to reflect Marriott's fiscal
   year for Marriott-
   managed hotels                     -       -       (12)       21
                                      -       -      ----        --
       Comparable hotel sales    $1,067  $1,398    $1,930    $2,472
                                 ======  ======    ======    ======

  (d) The reconciliation of operating costs per the consolidated statements
      of operations to the comparable hotel expenses is as follows:
 

                                  Quarter ended    Year-to-date ended
                                ----------------   ------------------
                                June 19, June 13,   June 19,  June 13,
                                  2009     2008       2009      2008
                                  ----     ----       ----      ----
  Operating costs and expenses
   per the consolidated
   statements of operations      $1,019  $1,116     $1,874   $2,025
  Hotel expenses for the
   property for which we
   record rental income              10      13         22       28
  Hotel expense for comparable
   hotels classified as
   held-for-sale                     10      12         19        20
  Rent expense for office
   buildings and select
   service hotels                   (19)    (20)       (39)      (39)
  Adjustment for hotel expenses
   for comparable
   hotels to reflect Marriott's
   fiscal year for
   Marriott-managed hotels            -       -         (9)       15
  Depreciation and amortization    (196)   (128)      (353)     (249)
  Corporate and other expenses      (17)    (14)       (32)      (31)
  Gain on insurance settlement        -       -          -         7
                                      -       -          -         -
       Comparable hotel expenses   $807    $979     $1,482    $1,776
                                   ====    ====     ======    ======

  (e)  Non-comparable hotel results, net, includes the results of operations
       of our non-comparable hotels whose operations are included in our
       consolidated statements of operations as continuing operations and
       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.
  (f)  Represents rental income less rental expense for select service
       properties and office buildings.
 
 

                            HOST HOTELS & RESORTS, INC.
                        Other Financial and Operating Data
                (unaudited, in millions, except per share amounts)
 

                                                  June 19,    December 31,
                                                    2009          2008
                                                   ------        ------
  Equity
  ------
    Common shares outstanding                       604.6        525.3
    Common shares and minority held common OP
     Units outstanding                              616.4        540.4
    Preferred OP Units outstanding                    .02          .02
    Class E Preferred shares outstanding              4.0          4.0

  Security pricing
  ----------------
    Common (a)                                      $7.66        $7.57
    Class E Preferred (a)                          $21.22       $17.20
    3(1)/4% Exchangeable Senior
     Debentures (b)                               $975.94      $861.51
    2(5)/8% Exchangeable Senior
     Debentures (b)                               $836.24      $663.70

  Dividends declared per share for calendar
   year
    Common                                             $-         $.65
    Class E Preferred (c)                           $1.11        $2.22

  Debt
  ----
  Series K senior notes, with a rate of
   7(1)/8% due November 2013                         $725         $725
  Series M senior notes, with a rate of 7%
   due August 2012                                    348          348
  Series O senior notes, with a rate of
   6(3)/8% due March 2015                             650          650
  Series Q senior notes, with a rate of
   6(3)/4% due June 2016                              800          800
  Series S senior notes, with a rate of
   6(7)/8% due November 2014                          497          497
  Series T senior notes, with a rate of 9%
   due May 2017                                       386            -
  Exchangeable Senior Debentures, with a
   rate of 3(1)/4% due April 2024 (d)(e)              317          383
  Exchangeable Senior Debentures, with a
   rate of 2(5)/8% due April 2027 (the "2007
   Debentures") (e)                                   542          533
  Senior notes, with rate of 10.0% due May
   2012                                                 7            7
                                                        -            -
       Total senior notes                           4,272        3,943
  Mortgage debt (non-recourse) secured by
   $2.1 billion of real estate assets,
   with an average interest rate of 6.0% and
   6.2% at June 19, 2009 and
   December 31, 2008, respectively, maturing
   through December 2023                            1,524        1,436
  Credit facility, including the $210 million
   term loan(f)                                       210          410
  Other                                                87           87
                                                       --           --
       Total debt  (g)(h)                          $6,093       $5,876
                                                   ======       ======

  Percentage of fixed rate debt                        90%          88%
  Weighted average interest rate                      6.1%         5.8%
  Weighted average debt maturity                 4.5 years    4.6 years
 

                               Quarter ended       Year-to-date ended
                               -------------       ------------------
                            June 19,   June 13,    June 19,   June 13,
                              2009       2008        2009       2008
                              ----       ----        ----       ----
  Hotel Operating Statistics
   for All
    Properties (i)
    Average daily rate       $175.24    $205.10    $177.83    $201.99
    Average occupancy           67.0%      76.2%      64.1%      73.0%
    RevPAR                   $117.36    $156.20    $114.01    $147.46

  (a)  Share prices are the closing price as reported by the New York
       Stock Exchange.
  (b)  Amount reflects market price of a single $1,000 debenture as quoted
       by Bloomberg L.P.
  (c)  On June 25, 2009, we declared a second quarter preferred dividend of
       $.5546875 per share for our Class E cumulative redeemable preferred
       stock.
  (d)  During the first quarter of 2009, we repurchased $75 million face
       amount of the 2004 Debentures with a carrying value of $72 million
       for $69 million. We recorded a gain on repurchase of approximately
       $3 million.
  (e)  During the first quarter of 2009, we adopted a new accounting
       requirement that issuers of cash-settled exchangeable debentures
       must separately account for the liability and equity components in a
       manner that will reflect the entity's nonconvertible debt borrowing
       rate on the instrument's issuance date. Therefore, we are required
       to record the debt components of the debentures at fair value as of
       the date of issuance with the adjustment to additional paid-in
       capital and amortize the resulting discount as an increase to
       interest expense over the expected life of the debt. This treatment
       has been applied retrospectively to all periods presented. The
       principal balance for our 2004 and 2007 Debentures was reduced by
       $60 million and $76 million as of June 19, 2009 and December 31,
       2008, respectively, which reflects the remaining unamortized
       discount balance at these dates. The discounts will be amortized
       through the first date at which the holders can require Host to
       repurchase the debentures for cash (April 2010 for the 2004
       Debentures and March 2012 for the 2007 Debentures). The retroactive
       adoption of the standard increased interest expense by $6 million
       and $7 million for the second quarter of 2009 and 2008,
       respectively, and $13 million and $14 million for year-to-date 2009
       and 2008, respectively.  The face amount of the 2004 and 2007
       Debentures is $325 million and $600 million at June 19, 2009.
  (f)  Currently, we have $600 million of available capacity under the
       revolver portion of the credit facility.
  (g)  In accordance with GAAP, total debt includes the debt of entities
       that we consolidate, but do not own 100% of the interests, and
       excludes the debt of entities that we do not consolidate, but have
       a non-controlling ownership interest and record our investment
       therein under the equity method of accounting. As of June 19, 2009,
       our non-controlling partners' share of consolidated debt is $68
       million and our share of debt in unconsolidated investments is
       $353 million.
  (h)  Total debt as of June 19, 2009 and December 31, 2008 includes net
        (discounts)/premiums of $(81) million and $(86) million,
       respectively.
  (i)  The operating statistics reflect all consolidated properties as
       of June 19, 2009 and June 13, 2008, respectively. The operating
       statistics include the results of operations for three properties
       held-for-sale at June 19, 2009, one property sold in 2009 and two
       properties sold as of June 13, 2008 prior to their disposition.
 
 

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

                                              Quarter         Year-to-date
                                               ended             ended
                                           -------------   -----------------
                                        June 19, June 13,  June 19, June 13,

                                           2009     2008      2009    2008
                                          ------   ------    ------  ------

  Net income (loss)                        $(69)     $193    $(129)   $256
    Interest expense                         82        88      169     171
    Depreciation and amortization           139       128      276     249
    Income taxes                             10        13       (4)      7
    Discontinued operations (a)               2         3        4       6
                                              -         -        -       -
  EBITDA                                    164       425      316     689
    Gains on dispositions                     1       (10)     (18)    (10)
    Non-cash impairment charges              91         -      131       -
    Amortization of deferred gains           (1)       (1)      (2)     (2)
    Equity investment adjustments:
     Equity in earnings of affiliates        (2)       (1)       -      (2)
     Pro rata EBITDA of equity investments    6        11       10      17
    Consolidated partnership adjustments:
     Pro rata EBITDA attributable to
      non-controlling
      partners in other consolidated
      partnerships                           (3)       (5)      (7)    (11)
                                            ---       ---      ---    ----
  Adjusted EBITDA                          $256      $419     $430    $681
                                           ====      ====     ====    ====
 

                                              Quarter         Year-to-date
                                               ended             ended
                                           -------------   -----------------
                                        June 19, June 13,  June 19, June 13,

                                           2009     2008      2009    2008
                                          ------   ------    ------  ------

  Net income (loss)                        $(69)     $193    $(129)  $256
    Less:  Net (income) loss attributable
           to non-controlling interests       1       (10)       2    (18)
           Dividends on preferred stock      (2)       (2)      (4)    (4)
                                            ---       ---      ---    ---
  Net income (loss) available to common
   stockholders                             (70)      181     (131)   234
  Adjustments:
    Gains on dispositions, net of taxes       1       (10)     (17)   (10)
    Amortization of deferred gains and
     other property
     transactions, net of taxes              (1)       (1)      (2)    (2)
    Depreciation and amortization (b)       140       130      279    254
    Partnership adjustments                   -        12        -     15
    FFO of non-controlling interests of
     Host LP                                 (2)      (14)      (3)   (20)
  Adjustments for dilutive securities
   (c):
    Assuming conversion of 2004
     Exchangeable Senior Debentures           -         8        -     15
    Assuming deduction of gain recognized
     for the repurchase of 2004 Exchangeable
     Debentures (d)                           -         -       (2)     -
                                              -         -      ---      -
  Diluted FFO (c)(e)                        $68      $306     $124   $486
                                            ===      ====     ====   ====

  Diluted weighted average shares
   outstanding (c)(e)                     575.8     551.7    552.8  552.7
  Diluted FFO per share (c)(e)             $.12      $.55     $.22   $.88

  (a)  Reflects the interest expense, depreciation and amortization and
       income taxes included in discontinued operations.
  (b)  In accordance with the guidance on FFO per diluted share provided by
       the National Association of Real Estate Investment Trusts, we do
       not adjust net income for the non-cash impairment charges when
       determining our FFO per diluted share.
  (c)  FFO per diluted share in accordance with NAREIT is adjusted for the
       effects of dilutive securities. Dilutive securities may include
       shares granted under comprehensive stock 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 interest to common OP Units. No effect is
       shown for securities if they are anti-dilutive.
  (d)  During the first quarter of 2009, we repurchased $75 million face
       amount of the 2004 Debentures with a carrying value of $72 million
       for $69 million. The adjustments to dilutive FFO related to the 2004
       Debentures repurchased during the year include the $3 million gain
       on repurchase, net of interest expense on the repurchased debentures.
  (e)  FFO per diluted share and earnings per diluted share were
       significantly affected by certain transactions, the effects of which
       are shown in the table below (in millions, except per share amounts):
 

                                     Quarter ended       Quarter ended
                                     June 19, 2009       June 13, 2008
                                     -------------       -------------
                                    Net                 Net
                                  Income               Income
                                  (Loss)       FFO     (Loss)        FFO
                                  ------       ---     ------        ---

  Gain (loss) on hotel
   disposition, net of taxes       $(1)         $-       $10          $-
  Non-cash interest expense -
   2007 Debentures (1)              (4)         (4)       (3)         (3)
    Non-cash interest expense -
   2004 Debentures (2)              (2)         (2)        -           -
  Dilutive effect of 2004
   Debentures (3)                    -          (3)        -           -
  Non-cash impairment charges      (91)        (91)        -           -
  Gain on CMBS defeasance
   sharing agreement (4)             7           7         -           -
  (Gain) loss attributable to
   non-controlling interests (5)     2           2        (1)          -
                                     -           -       ---           -
      Total                       $(89)       $(91)       $6         $(3)
                                  ====        ====        ==         ===
      Diluted shares             575.0       596.4     551.7       551.7
      Per diluted share          $(.16)      $(.15)     $.01       $(.01)
                                 =====       =====      ====       =====

                                Year-to-date ended    Year-to-date ended
                                  June 19, 2009         June 13, 2008
                                  -------------         -------------
                                  Net                   Net
                                 Income                Income
                                 (Loss)       FFO      (Loss)      FFO
                                 ------       ---      ------      ---
  Gain on hotel dispositions,
   net of taxes                    $17          $-       $10          $-
  Non-cash interest expense -
   2007 Debentures (1)              (8)         (8)       (7)         (7)
    Non-cash interest expense -
   2004 Debentures (2)              (5)         (5)       (7)          -
    Dilutive effect of 2004
    Debentures (3)                   -          (6)        -           -
  Non-cash impairment charges     (131)       (131)        -           -
  Gain on CMBS defeasance
   sharing agreement (4)             7           7         -           -
  (Gain) loss attributable to
   non-controlling interests (5)     3           4         -           -
                                     -           -         -           -
      Total                      $(117)      $(139)      $(4)        $(7)
                                 =====       =====       ===         ===
      Diluted shares             552.2       573.5     521.8       552.7
      Per diluted share          $(.21)      $(.24)    $(.01)      $(.01)
                                 =====       =====     =====       =====

  (1)  Represents the non-cash interest expense recognized related to the
       2007 Debentures in accordance with the retroactive implementation of
       new accounting requirements in the first quarter of 2009.
  (2)  Represents the non-cash interest expense recognized related to the
       2004 Debentures in accordance with the retroactive implementation of
       new accounting requirements in the first quarter of 2009.  No effect
       is shown for the 2004 Debentures if they were dilutive in the
       calculation of Earnings per Diluted Share or FFO per Diluted Share,
       as the interest expense is added-back to earnings in the dilution
       calculation.
  (3)  Represents dilutive effect, if applicable, of the 2004 Debentures
       after adjustment (2) above for non-cash interest expense related to
       the new accounting requirement.
  (4)  As prescribed by the sharing agreement with the successor borrower
       in connection with the 2007 defeasance of $514 million in
       collateralized mortgage-backed securities, we received $7 million
       and recorded the gain as a reduction of interest expense in the
       second quarter 2009. The loan had an initial maturity date of
       September 15, 2009, and was prepayable beginning on May 1, 2009.
       We had been legally released from all obligations under the loan
       upon the defeasance in 2007.
  (5)  Represents the portion of the significant items attributable to
       non-controlling partners in Host LP.
 
 

                           HOST HOTELS & RESORTS, INC.
           Reconciliation of Net Income to EBITDA, Adjusted EBITDA and
    Funds From Operations per Diluted Share for Full Year 2009 Forecasts (a)
              (unaudited, in millions, except per share amounts)

                                                         Full Year 2009
                                                    -----------------------
                                                    Low-end        High-end
                                                    of range       of range
                                                    --------       --------
  Net loss                                          $(310)         $(267)
    Interest expense                                  385            385
    Depreciation and amortization                     600            600
    Income taxes                                      (44)           (37)
                                                     ----           ----
  EBITDA                                              631            681
    Gains on dispositions                             (34)           (34)
    Non-cash impairment charges                       131            131
    Equity investment adjustments:
     Equity in losses of affiliates                     5              5
     Pro rata Adjusted EBITDA of equity
      investments                                      27             27
    Consolidated partnership adjustments:
     Pro rata Adjusted EBITDA attributable to
      non-controlling partners in other
      consolidated partnerships                       (10)           (10)
                                                     ----           ----
  Adjusted EBITDA                                    $750           $800
                                                     ====           ====
 

                                                    Full Year 2009 Forecast
                                                    -----------------------
                                                    Low end        High end
                                                    of Range       of Range
                                                    --------       --------

  Net loss                                          $(310)         $(267)
  Less: Net loss attributable to
   non-controlling interests                           10              9
       Dividends on preferred stock                    (9)            (9)
                                                      ---            ---
  Net loss available to common
   stockholders                                      (309)          (267)
  Adjustments:
    Depreciation and amortization                     600            600
    Gain on dispositions, net of taxes                (34)           (34)
    Partnership adjustments                             4              4
    FFO of non-controlling interests of Host
     LP                                                (6)            (7)
  Adjustment for dilutive securities:
    Assuming distribution of common shares
     granted under the comprehensive
     stock plan less shares assumed purchased
     at average market price                            -              -
    Assuming the reduction of the gain
     recognized upon the repurchase of the
     2004 Exchangeable Senior Debentures               (2)            (2)
                                                      ---            ---
  Diluted FFO                                        $253           $294
                                                     ====           ====

  Weighted average diluted shares (FFO)             583.9          583.9
  Weighted average diluted shares (EPS)             582.3          582.3
  Loss per diluted share                           $ (.53)        $ (.46)
  FFO per diluted share                            $  .43         $  .50

  (a)  The full year 2009 forecasts were based on the below assumptions:
       -- Comparable hotel RevPAR will decrease 20% to 23% for the high and
          low ends of the forecasted range, respectively.
       -- Comparable hotel adjusted operating profit margins will range
          from a decrease of 600 basis points to 650 basis points for the
          high and low ends of the forecasted range, respectively.
       -- The implementation of a new accounting requirement will increase
          the non-cash interest expense applied to the 2004 and 2007
          Debentures by approximately $26 million. Additionally, we
          recorded non-cash impairment charges of $131 million, which
          included $97 million of impairments on four of our properties and
          a $34 million impairment of our investment in the European joint
          venture.  These non-cash charges will decrease earnings and FFO
          per diluted share by approximately $.25.
       -- We do not anticipate that any acquisitions will be made during
          2009.
       -- We expect to have annual hotel dispositions of approximately
          $200 million during 2009.
       -- We expect to spend approximately $340 million to $360 million on
          capital expenditures in 2009.

       For a discussion of additional items that may affect forecasted
       results see Notes to the Financial Information.
 

                         HOST HOTELS & RESORTS, INC.
        Schedule of Comparable Hotel Adjusted Operating Profit Margin
                       for Full Year 2009 Forecasts (a)
               (unaudited, in millions, except hotel statistics)

                                                        Full Year 2009
                                                     -------------------
                                                      Low-end   High-end
                                                     of range   of range
                                                     --------   --------

  Operating profit margin under GAAP (b)                   1.2%    2.4%
  Comparable hotel adjusted operating profit margin (c)   19.8%   20.3%

  Comparable hotel sales
    Room                                                $2,451  $2,547
    Other                                                1,538   1,607
                                                         -----   -----
        Comparable hotel sales (d)                       3,989   4,154
                                                         -----   -----
  Comparable hotel expenses
    Rooms and other departmental costs                   1,735   1,836
    Management fees, ground rent and other costs         1,466   1,478
                                                         -----   -----
        Comparable hotel expenses (e)                    3,201   3,314
                                                         -----   -----
  Comparable hotel adjusted operating profit               788     840
  Non-comparable hotel results, net                          3       3
  Office buildings and select service properties, net       (1)     (1)
  Depreciation and amortization                           (675)   (675)
  Corporate and other expenses                             (67)    (67)
                                                          ----    ----
        Operating profit                                   $48    $100
                                                           ===    ====

  (a)  Forecasted comparable hotel results include 113 hotels that we have
       assumed will be classified as comparable as of December 31, 2009.
       No assurances can be made as to the hotels that will be in the
       comparable hotel set for 2009. Also, see the notes to the
        "Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Funds
       From Operations per Diluted Share For Full Year 2009 Forecasts" for
       other forecast assumptions.
  (b)  Operating profit margin under GAAP is calculated as the operating
       profit divided by the forecast total revenues per the consolidated
       statements of operations. See (d) below for forecasted revenues.
  (c)  Comparable hotel adjusted operating profit margin is calculated as
       the comparable hotel adjusted operating profit divided by the
       comparable hotel sales per the table above. The forecasted decline
       in the comparable hotel adjusted operating profit margin includes
       the following two items which accounts for 50 basis points of the
       above decline. Additionally, the decline in the adjusted operating
       profit margins includes the effect of these two items of
       approximately 40 basis points and 50 basis points for the quarter and
       year-to-date periods ended June 19, 2009. (1) The 2008 comparable
       hotel operating profit includes business interruption proceeds of
       approximately $5 million, net of expenses, received in 2008 for the
       New Orleans Marriott which had previously been non-comparable. We do
       not expect to receive any business interruption proceeds in 2009. (2)
       We will incur additional expenses in 2009 due to the treatment of the
       ground lease payments related to the New York Marriott Marquis. Since
       the renegotiation of the ground lease on the New York Marriott
       Marquis in 1998, the ground lease payments have reduced the deferred
       ground rent liability, and more recently, have been applied against
       the deferred purchase price of the land. As a result, there was no
       operating profit reduction for these payments. In 2009, a small
       portion of the payments will fully fund the deferred purchase price
       and the remainder of approximately $19 million will be deducted from
       operating profit.
  (d)  The reconciliation of forecast total revenues to the forecast
       comparable hotel sales is as follows (in millions):
 

                                                 Full Year 2009
                                              -------------------
                                               Low-end   High-end
                                              of range   of range
                                              --------   --------

  Revenues                                      $4,035  $4,200
  Non-comparable hotel sales                        (1)     (1)
  Hotel sales for the property for which we
   record rental income, net                        40      40
  Rental income for office buildings and select
   service hotels                                  (85)    (85)
                                                  ----    ----
       Comparable hotel sales                   $3,989  $4,154
                                                ======  ======

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

                                                     Full Year 2009
                                                -----------------------
                                                Low-end        High-end
                                                of range       of range
                                                --------       --------
  Operating costs and expenses                   $3,987         $4,100
  Non-comparable hotel expenses                       -              -
  Hotel expenses for the property for which
   we record rental income                           40             40
  Rent expense for office buildings and
   select service hotels                            (84)           (84)
  Depreciation and amortization                    (675)          (675)
  Corporate and other expenses                      (67)           (67)
                                                   ----           ----
       Comparable hotel expenses                 $3,201         $3,314
                                                 ======         ======

  HOST HOTELS & RESORTS, INC.
  Notes to Financial Information

  Forecasts
Our forecast of earnings per diluted share, 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 be materially different. Risks that may affect these assumptions and forecasts include the following: the level of RevPAR and margin growth may change significantly and the continued economic recession and volatility in the credit markets have created limited visibility for advance bookings for both transient and group business and accordingly, our ability to predict operating results; 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 number of 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 filings with the SEC.
Reporting Periods for Statement of Operations
The results we report in our consolidated statements of operations are based on results of our hotels reported to us by our hotel managers. Our hotel managers use different reporting periods. Marriott International, Inc., or Marriott, the manager of the majority of our properties, uses a fiscal year ending on the Friday closest to December 31 and reports twelve weeks of operations for the first three quarters and sixteen or seventeen weeks for the fourth quarter of the year for its Marriott-managed hotels. In contrast, other managers of our hotels, such as Starwood and Hyatt, report results on a monthly basis. Additionally, Host, as a REIT, is required by tax laws to report results on a calendar year. As a result, we elected to adopt the reporting periods used by Marriott except that our fiscal year always ends on December 31 to comply with REIT rules. Our first three quarters of operations end on the same day as Marriott but our fourth quarter ends on December 31 and our full year results, as reported in our consolidated statement of operations, always includes the same number of days as the calendar year.
Two consequences of the reporting cycle we have adopted are: (1) quarterly start dates will usually differ between years, except for the first quarter which always commences on January 1, and (2) our first and fourth quarters of operations and year-to-date operations may not include the same number of days as reflected in prior years. For example, the second quarter of 2009 ended on June 19, and the second quarter of 2008 ended on June 13, though both quarters reflect twelve weeks of operations. In contrast, the June 19, 2009 year-to-date operations included 170 days of operations, while the June 13, 2008 year-to-date operations included 165 days of operations.
While the reporting calendar we adopted is more closely aligned with the reporting calendar used by the manager of a majority of our properties, one final consequence of our calendar is we are unable to report the month of operations that ends after our fiscal quarter-end until the following quarter because our hotel managers using a monthly reporting period do not make mid-month results available to us. Hence, the month of operation that ends after our fiscal quarter-end is included in our quarterly results of operations in the following quarter for those hotel managers (covering approximately 41% of our hotels). As a result, our 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). While this does not affect full-year results, it does affect the reporting of quarterly results.
Reporting Periods for Hotel Operating Statistics and Comparable Hotel Results
In contrast to the reporting periods for our consolidated statement of operations, our hotel operating statistics (i.e., RevPAR, average daily rate and average occupancy) and our comparable hotel results are always reported based on the reporting cycle used by Marriott for our Marriott-managed hotels. This facilitates year-to-year comparisons, as each reporting period will be comprised of the same number of days of operations as in the prior year (except in the case of fourth quarters comprised of seventeen weeks (such as fiscal year 2008) versus sixteen weeks). This means, however, that the reporting periods we use for hotel operating statistics and our comparable hotels results may differ slightly from the reporting periods used for our statements of operations for the first and fourth quarters and the full year. Results from hotel managers reporting on a monthly basis are included in our operating statistics and comparable hotels results consistent with their reporting in our consolidated statement of operations herein:
  --  Hotel results for the second quarter of 2009 reflect 12 weeks of
      operations for the period from March 28, 2009 to June 19, 2009 for our
      Marriott-managed hotels and results from March 1, 2009 to May 31, 2009
      for operations of all other hotels which report results on a monthly
      basis.
  --  Hotel results for the second quarter of 2008 reflect 12 weeks of
      operations for the period from March 22, 2008 to June 13, 2008 for our
      Marriott-managed hotels and results from March 1, 2008 to May 31, 2008
      for operations of all other hotels which report results on a monthly
      basis.
  --  Hotel results for year-to-date 2009 reflect 24 weeks for the period
      from January 3, 2009 to June 19, 2009 for our Marriott-managed hotels
      and results from January 1, 2009 to May 31, 2009 for operations of all
      other hotels which report results on a monthly basis.

  --  Hotel results for year-to-date 2008 reflect 24 weeks for the period
      from December 29, 2007 to June 13, 2008 for our Marriott-managed
      hotels and results from January 1, 2008 to May 31, 2008 for operations
      of all other hotels which report results on a monthly basis.

  Comparable Hotel Operating Statistics
We present certain operating statistics (i.e., RevPAR, average daily rate and average occupancy) and operating results (revenues, expenses, adjusted operating profit and adjusted operating profit margin) for the periods included in this report on a comparable hotel basis. We define our comparable hotels as properties (i) that are owned or leased by us and the operations of which are included in our consolidated results, whether as continuing operations or discontinued operations, for the entirety of the reporting periods being compared, and (ii) that have not sustained substantial property damage or business interruption or undergone large-scale capital projects during the reporting periods being compared. All of our hotels that we owned as of June 19, 2009, have been classified as comparable hotels.
The operating results of one hotel we disposed of as of June 19, 2009 and the two hotels we disposed of in 2008 are also not included in comparable hotel results for the periods presented herein. Moreover, because these statistics and operating results are for our hotel properties, they exclude results for our non-hotel properties and other real estate investments.
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 per diluted share, (ii) EBITDA, (iii) Adjusted EBITDA and (iv) Comparable Hotel Operating Results. The following discussion defines these terms and presents why we believe they are useful supplemental measures of our performance.
FFO per Diluted Share
We present FFO per diluted share as a non-GAAP measure of our performance in addition to our earnings per share (calculated in accordance with GAAP). We calculate FFO per diluted share for a given operating period as our FFO (defined as set forth below) for such period divided by the number of fully diluted shares outstanding during such period. The National Association of Real Estate Investment Trusts (NAREIT) defines FFO as net income (calculated in accordance with GAAP) excluding gains (losses) from sales of real estate, the cumulative effect of changes in accounting principles, real estate-related depreciation and amortization and adjustments for unconsolidated partnerships and joint ventures. We present FFO on a per share basis after making adjustments for the effects of dilutive securities and the payment of preferred stock dividends, in accordance with NAREIT guidelines.
We believe that FFO per diluted share is a useful supplemental measure of our operating performance and that the presentation of 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 and gains and losses from sales of real estate, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance, we believe such measures can facilitate comparisons of operating performance between periods and with other REITs, even though 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 definition of FFO in order to promote an industry-wide measure of REIT operating performance.
EBITDA
Earnings before Interest Expense, Income Taxes, Depreciation and Amortization (EBITDA) is a commonly used measure of performance in many industries. Management believes EBITDA provides useful information to investors regarding our results of operations because it helps us and our investors evaluate the ongoing operating performance of our properties and 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 per diluted share, it is widely used by management in the annual budget process.
Adjusted EBITDA
Historically, management has adjusted EBITDA when evaluating our performance because we believe that the exclusion of certain additional recurring and non-recurring 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 and 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:
  --  Real Estate Transactions - We exclude the effect of gains and losses,
      including the amortization of deferred gains, recorded on the
      disposition of 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 remaining 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 often does not
      reflect the market value of real estate assets (as noted above for
      FFO).
  --  Equity Investment Adjustments - We exclude the equity in earnings
      (losses) of unconsolidated investments in partnerships and joint
      ventures as presented in our consolidated statement of operations
      because it includes our pro-rata portion of depreciation, amortization
      and interest expense. We include our pro rata share of the Adjusted
      EBITDA of our equity investments as we believe this more accurately
      reflects the performance of our investment. 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.
  --  Consolidated Partnership Adjustments - We deduct the non-controlling
      partners' pro rata share of the 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' positions in
      the partnership or joint venture.
  --  Cumulative Effect of a Change in Accounting Principle - Infrequently,
      the Financial Accounting Standards Board (FASB) 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.

  --  Impairment 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 are
      similar to gains (losses) on dispositions and depreciation expense,
      both of which are also excluded from EBITDA.

Limitations on the Use of FFO per Diluted Share, EBITDA and Adjusted EBITDA
We calculate 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 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. 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 and 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, 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, FFO per diluted share does 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 industry investors have considered presentation of operating results for real estate companies that use historical cost accounting 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. 

   
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 113 properties with approximately 62,000 rooms, and also holds a non-controlling interest in a joint venture that owns 11 hotels in Europe with approximately 3,500 rooms. 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 , The Luxury Collection , Hyatt , Fairmont , Four Seasons , Hilton and Swissotel * 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 are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the 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 acquisitions and dispositions; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes and other risks and uncertainties associated with our business described in the Company's filings with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of July 22, 2009, 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 Hotels & Resorts, Inc., 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 Hotels & Resorts, 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 2% of the partnership interests in Host LP held by outside partners as of June 19, 2009, which is non-controlling interests in Host LP in our consolidated balance sheets and is included in net income/loss 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 10K.
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.            

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Contact:

Host Hotels & Resorts, Inc. 
Gregory J. Larson, Executive Vice President, Host Hotels &
Resorts, Inc., +1-240-744-5120
Web Site: http://www.hosthotels.com/

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Also See: Host Hotels & Resorts Inc.'s Reports 4th Qtr Net Income Dropped 59%, Projects a Loss for 2009, Suspends Regular Quarterly Dividend / February 2009
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