Host's 2nd Qtr Balloons to $330 mil

On its 28 Hotel Acquisition and Strong RevPAR Growth

. October 14, 2008

BETHESDA, MD, July 19, 2006. 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 16, 2006. The Company conducts its operations through Host Hotels & Resorts, L.P., of which it is the sole general partner and holds 96% of the partnership interests. Second quarter results for Host Hotels & Resorts, Inc. include the following:

Total revenue increased $254 million, or 26.5%, to $1.2 billion for the

second quarter and $312 million, or 17.8%, to $2.1 billion for

year-to-date 2006, which includes $154 million of revenues for the

Starwood portfolio for both periods.

Net income increased $239 million to $330 million for the second

quarter and $405 million to $502 million for year-to-date 2006.

Earnings per diluted share increased $.40 to $.62 and $.88 to $1.10 for

the second quarter and year-to-date 2006, respectively.

Net income includes $199 million, or $.38 per diluted share, and

$345 million, or $.78 per diluted share, for the second quarter and

year-to-date 2006, respectively, from the following: gains on hotel

dispositions, costs associated with the refinancing of senior notes and

the redemption of preferred stock and non-recurring costs of the

Starwood acquisition. By comparison, for the second quarter and

year-to-date 2005, net income included a net gain of $17 million, or

$.04 per diluted share, and a net gain of $15 million, or $.04 per

diluted share, respectively, associated with similar transactions in

For further detail, refer to the "Schedule of Significant

Transactions Affecting Earnings per Share and Funds From Operations per

Diluted Share" attached to this press release.

Funds from Operations (FFO) per diluted share increased 25.8% to $.39

for the second quarter and 31.4% to $.67 for year-to-date 2006. FFO per

diluted share was reduced by $.04 for the second quarter and $.05 for

year-to-date 2006 due to costs associated with refinancing the

Company's senior notes and the redemption of its preferred stock and

non-recurring costs associated with the Starwood acquisition. By

comparison, FFO per diluted share was reduced by $.06 and $.09 for the

second quarter and year-to-date 2005, respectively, due to costs

associated with similar transactions in 2005.

The Company also announced the following second quarter results for Host Hotels & Resorts, L.P.:

Net income increased $247 million to $343 million for the second

quarter and $422 million to $524 million for year-to-date 2006. Net

income of Host LP was also affected by certain transactions -- See

"Schedule of Significant Transactions Affecting Earnings per Share and

Funds From Operations Per Diluted Share."

Adjusted EBITDA, which is Earnings before Interest Expense, Income

Taxes, Depreciation, Amortization and other items, increased 34.5% to

$347 million for the second quarter and 24.2% to $559 million for

year-to-date 2006.

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 2006 increased 9.7% and comparable hotel adjusted operating profit margins increased 2.1 percentage points when compared to the second quarter of 2005. The second quarter increases were driven by an 8.9% increase in average room rate and an increase in occupancy of 0.6 percentage points. Year-to-date 2006 comparable hotel RevPAR increased 8.7% (comprised of an 8.3% increase in average room rate and an increase in occupancy of 0.3 percentage points), while comparable hotel adjusted operating profit margins increased 2.3 percentage points when compared to year-to-date 2005. Comparable hotel adjusted operating profit margins were positively affected by the Company's food and beverage operations, which represent approximately 30% of the Company's revenues. Due to the continued shift toward higher-rated group business and additional catering business, food and beverage revenue growth at the Company's comparable hotels was 7.7% and 7.6% for the second quarter and year-to-date 2006, respectively, with food and beverage margins increasing significantly for both periods.

For the 27 recently acquired Starwood hotels that the Company consolidates, which are not included in our comparable hotel results, RevPAR increased 13% for the second quarter when compared to the same period in 2005, assuming that the Company owned the hotels for the entire quarter.

Christopher J. Nassetta, president and chief executive officer, stated, "We significantly exceeded the high-end of our expectations and analysts' consensus estimates by posting another quarter of strong RevPAR and margin growth."

STARWOOD ACQUISITION

On April 10, 2006, the Company acquired 25 domestic hotels and three foreign hotels from Starwood Hotels & Resorts Worldwide, Inc., or Starwood, for total consideration of approximately $3.1 billion. In connection with the Starwood acquisition, the Company entered into a joint venture in Europe on March 24, 2006. The aggregate size of the joint venture is approximately $640 million, including total capital contributions of approximately $227 million, of which approximately $72 million was contributed by the Company in the form of cash and through the contribution of the Sheraton Warsaw Hotel & Towers on May 2, 2006, which was acquired from Starwood on April 10, 2006. The European joint venture acquired four hotels from Starwood on May 3, 2006 and one hotel on June 13, 2006. On July 5, 2006, the Company and Starwood agreed that Starwood will retain ownership of the two Fijian hotels that were under contract as part of the original portfolio of 38 hotels to be acquired by the Company. The purchase price of these assets totaled $129 million, including $31 million of debt. The cash designated for the acquisition of the Fijian assets will be used for general corporate purposes.

OTHER ACQUISITIONS AND DISPOSITIONS

On May 17, 2006, the Company signed a definitive agreement to purchase The Westin Kierland Resort & Spa in Scottsdale, Arizona, for approximately $393 million, including the assumption of $135 million of mortgage debt with an interest rate of approximately 5.08%. The 732-room resort, which opened in November 2002, is situated on 252 acres of fee simple property, including approximately five acres of undeveloped land, and includes a 27-hole golf course and a full-service spa. The sale is expected to close in the third quarter of 2006 subject to customary closing conditions.

BALANCE SHEET

As of June 16, 2006, the Company had $524 million of cash and cash equivalents, approximately $260 million of which it expects to use to purchase The Westin Kierland Resort & Spa. The Company also currently has $575 million of availability under its credit facility.

On April 4, 2006, the Company issued $800 million of 6 3/4% Series P senior notes due 2016 for net proceeds of approximately $787 million, which were used to fund a portion of the Starwood acquisition, redeem the remaining $136 million of 7 7/8% Series B senior notes, redeem all of the $150 million 10% Class C preferred stock and for other general corporate purposes. In addition, during the second quarter, the Company repaid the $84 million mortgage on the Boston Marriott Copley Place.

2006 OUTLOOK

The Company expects comparable hotel RevPAR to increase approximately 9% to 10% for the third quarter and 8.5% to 10% for the full year. For full year 2006, the Company also expects its operating profit margins under GAAP to increase approximately 200 basis points to 250 basis points and its comparable hotel adjusted operating profit margins to increase approximately 160 basis points to 200 basis points. Based upon this guidance, the Company estimates that 2006 guidance for Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. would be as follows:

Host Hotels & Resorts, Inc.