Growth in FFO and EBITDA was driven by an increase in room revenue per available room (�REVPAR�) of 4.1 percent for our comparable hotels over 1998, which represents a premium of 31% over our competitive set.  The quality of our comparable hotels, which does not reflect the 1998 acquisition of five Ritz-Carlton, two Four Seasons, one Grand Hyatt, three Hyatt Regency and four Swissotel properties, helped us achieve this superior performance in the face of continuing new supply in the lodging industry.  Had the results of these hotels been included in comparable results, the REVPAR increase for the company would have been 5.6 percent in the fourth quarter and 4.7 percent for the full year.

Mr. Terence C. Golden, president and chief executive officer of Host Marriott Corporation, stated, �In our first year operating as a REIT, we were able to report 17 percent growth in FFO per share despite difficult industry conditions.  We continue to benefit from our core strategy of acquiring high quality urban, airport and resort/convention hotels located in strong markets with high barriers to entry.�
Mr. Golden noted, �Several financial initiatives completed during the year should also contribute to enhanced shareholder value.  We solidified our balance sheet by refinancing all of our near-term debt maturities. We now have 96 percent of our debt at fixed interest rates, offering us valuable protection in today�s rising interest rate environment.�

Mr. Christopher J. Nassetta, executive vice president and chief operating officer, added, �We continue to believe the current stock price represents a significant discount to our net asset value and we believe stock repurchase currently provides one of the best opportunities to maximize shareholder value.  The ongoing stock repurchase program will be conducted as proceeds become available from asset dispositions, a portion of which will also be used to repay debt.�

Mr. Robert E. Parsons, Jr., executive vice president and chief financial officer, stated, �We initiated our stock repurchase program in the fourth quarter of 1999 and to date we have repurchased the equivalent of approximately 16 million shares for nearly $150 million. We continue to upgrade the exceptional quality of our portfolio by selectively divesting properties that do not fit our long-term strategy.  We will also sell select hotels when we can take advantage of superior pricing, such as the sale of the Boston Ritz-Carlton at the end of 1999.  In 1999, the total proceeds from dispositions was $201 million which were used to repurchase our convertible preferred securities and common shares and repay debt.�
During 1999, we took advantage of favorable market conditions, issuing $204 million of perpetual preferred stock at a dividend rate of 10 percent.  This new equity, in combination with the refinancing of $1.2 billion of debt since the beginning of 1999, contributes to the overall strength of our capital structure.

We reported full year 1999 rental income of $1.3 billion versus pro forma rental income of $949 million for full year 1998.  For the fourth quarter of 1999, rental income was $749 million versus pro forma fourth quarter rental income of $547 million.  The fourth quarter amounts for 1999 and 1998 include the recognition of $339 million and $250 million, respectively, of contingent rent deferred under SAB 101, as discussed below.  We also noted that full year 1998 historical hotel revenues reflect the actual sales at our hotels while full year 1999 revenues represent rental income from leases, which are calculated from property-level sales.  1999 full year hotel sales were $4.3 billion, a 24 percent increase over 1998 full year hotel sales of $3.4 billion, reflecting increases in REVPAR for comparable hotels as well as the results of properties acquired in 1998.  Hotel sales for the fourth quarter of 1999 were $1.4 billion, a 21 percent increase over the 1998 fourth quarter.

Net income available to common shareholders for the year ended December 31, 1999, increased to $216 million compared to $47 million for 1998.  1999 results include a one-time, non-recurring charge of $40 million for litigation, discussed below.  As a result of debt refinancings, we have recorded an extraordinary gain of $15 million in 1999 as compared to an extraordinary loss of $148 million in 1998. Income from continuing operations in 1999, including the above-mentioned litigation charge, increased to $196 million compared to 1998 full year results of $194 million.

In December 1999, the staff of the Securities and Exchange Commission issued Staff Accounting Bulletin 101, �Revenue Recognition� (SAB 101).  SAB 101 requires that we change our method of accounting for lease revenue in interim periods to defer certain revenues which are contingent upon annual levels of hotel sales.  Due to the application of SAB 101, $339 million of rental revenue previously recognized in the first three quarters of 1999 was deferred and recognized in the fourth quarter of 1999.  As a result of these changes, we have amended our previously filed quarterly reports on Form 10-Q for the first three quarters of fiscal year 1999 to reflect this change in accounting principle.  The adoption of SAB 101 had no impact on full year 1999 results nor did it impact any periods prior to 1999, as the hotel leases were not in effect prior to 1999.

As previously announced on February 24, 2000, we and Marriott International have reached a non-binding agreement to resolve certain pending litigation involving six limited partnerships. We have subsequently executed a definitive settlement agreement which includes a seventh partnership, Atlanta Marriott Marquis Limited Partnership, within the amounts previously disclosed.  The proposed settlement would involve an acquisition of the limited partner interests in two partnerships by a joint venture between one of our affiliates and Marriott International, and cash payments to partners in the other five partnerships, in exchange for resolution of claims against all defendants in all seven partnerships.  Our share of the payment, including the value of the existing partnership interests we will contribute as part of the acquisition of two of the partnerships, is expected to be approximately $124 million, excluding related expenses.  The proposed settlement is subject to numerous conditions, including definitive documentation, court approval and various consents, and no assurance can be given that the settlement will occur.  As a result of the proposed settlement, we have recorded a one-time, non-recurring, pre-tax charge of $40 million in the fourth quarter of 1999.

(a) Comparable properties consist of the 84 properties owned, directly or indirectly by us for the same period of time in each period covered, excluding two properties where significant expansion at the hotels affected operations.
(b) REVPAR represents room revenue per available room, which measures daily room revenues generated on a per room basis, excluding food and beverage revenues or other ancillary revenues generated by the property.
 

Certain matters discussed in this press release are forward-looking statements within the meaning of federal securities regulations.