Host Marriott Reports First Quarter 2002 Funds From Operations of $25 Per Diluted Share Exceeding Ex

BETHESDA, MD; May 1, 2002 - Host Marriott Corporation (NYSE: HMT), the nation’s largest hotel real estate
investment trust (REIT), today announced results of operations for the first quarter ended March 22, 2002.
Operating results for the first quarter, although they remain below prior year levels, reflect steady improvement in
the travel and leisure industry, supported by a strengthening economy. The results include the following:
? Comparative Funds From Operations (“FFO”) were $.25 per diluted share for the first quarter ended March
22, 2002 versus FFO of $.41 per diluted share for the first quarter ended March 23, 2001 ? Earnings before Interest Expense, Income Taxes, Depreciation and Amortization and other non-cash items
(“EBITDA”) for the first quarter 2002 were $205 million versus $238 million for the first quarter 2001.
For the first quarter of 2002 the Company’s diluted loss per share was $.03 versus diluted earnings per
share of $.12 for the first quarter of 2001 ? Total revenues were $790 million for the first quarter 2002 versus $873 million for the first quarter 2001.
Comparable RevPAR for the first quarter declined 12.3% and operating profit margins declined by 0.2 percentage
points. The Company’s first quarter RevPAR decline was the result of a 9.4% reduction in average room rate and
occupancy declines of 2.4 percentage points. The Company’s urban, resort and convention hotels, which represent
71% of first quarter EBITDA, had a strong RevPAR performance with a decline of only 8.7%, a result of a decline
in average room rate of 7.9% while occupancy was down less than one percentage point from last year.
Mr. Christopher J. Nassetta, president and chief executive officer, stated, “We are very pleased with the continuing
strong improvement in operating results in the first quarter which significantly exceeded our expectations. We
continue to see steady improvements in RevPAR each month, which has been helped by the strengthening economy.
We continue to work with our operators to control operating expenses, which have resulted in an industry leading margin decline of less than a quarter of a percentage point. We expect these positive trends will continue throughout
2002.”
As of March 22, 2002, the Company had $341 million in cash on hand and no amounts outstanding on its bank
credit facility. Additionally, the Company has no significant maturities until 2005 and approximately 90% of its
debt has a fixed interest rate with a weighted average cost of 7.94%. The Company intends to negotiate a new long-term
bank credit facility during 2002 that will be smaller but more flexible than the existing agreement.
Mr. Robert Parsons, executive vice president and chief financial officer, stated, “Our focused approach to
maintaining a strong balance sheet and liquidity provides us with the financial flexibility that will enable us to take
advantage of opportunities as they arise that will enhance shareholder value.”
The Company’s updated guidance for RevPAR for full year 2002 is a range between flat to down 2%. Based upon
this guidance the Company estimates the following: ? FFO per share for the full year should be in the range of $1.12 to $1.22; and ? EBITDA for the full year should be between $875 and $915 million.
The Company policy on dividends generally has been to distribute the minimum amount necessary to maintain
REIT status. The Company expects to reinstate the dividend on the common stock later this year if it continues to
see improvement in operations. The Company intends to continue to pay dividends on its QUIPs and preferred
stock.
Mr. Nassetta added, “We are hopeful that the positive trends we have seen thus far will continue for the rest of the
year and into 2003. We believe that the significant decline in supply for 2003 and the next several years, matched
with increasing demand from a strengthening economy, should ultimately result in meaningful growth in RevPAR,
earnings, dividends and shareholder value.”
Host Marriott is a Fortune 500 lodging real estate company that currently owns or holds controlling interests in 122
upscale and luxury hotel properties primarily operated under premium brands, such as Marriott, Ritz-Carlton, Hyatt,
Four Seasons, and Hilton. For further information, please visit the Company’s website at www.hostmarriott.com.
This press release includes various references to Comparative FFO and EBITDA. Comparative FFO represents
Funds From Operations, as defined by the National Association of Real Estate Investment Trusts, adjusted for
contingent rental revenues and substantial non-recurring items. The Company considers Comparative FFO and
EBITDA to be indicative measures of its operating performance, due to the significance of its long-lived assets and
because such data is considered useful by the investment community to better understand the Company’s results, and can be used to measure its ability to service debt, fund capital expenditures, and expand its business. However,
such information should not be considered as an alternative to net income, operating profit, cash from operations, or
any other operating or liquidity performance measure prescribed by accounting principles generally accepted in the
United States. Cash expenditures for various long-term assets, interest expense (for EBITDA purposes only) and
income taxes that have been, and will be, incurred are not reflected in the Comparative FFO and EBITDA
presentations. Although FFO and EBITDA are considered standard benchmarks utilized by the investment
community, our Comparative FFO and EBITDA may not be comparable to similarly titled measures reported by
other companies.
Certain matters discussed in this press release are forward-looking statements within the meaning of federal
securities regulations. All forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual transactions, results, performance or achievements to be materially different
from any future transactions, results, performance or achievements expressed or implied by such forward-looking
statements. General economic conditions, competition, and governmental actions will affect future transactions,
results, performance, and achievements. These risks are presented in detail in our filings with the Securities and
Exchange Commission. Although the Company believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no assurance that our expectations will be attained or
that any deviations will not be material. The Company undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
——-