Host Hotels & Resorts (HST) 10-K 1 Mar 10 2009 FY Annual report Financial data

Statement Of Financial Position

Statement Of Financial Position Unclassified - Real Estate Operations (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
ASSETS
Property and equipment, net	$10,231	$10,739
Assets held for sale	8	0
Due from managers	29	65
Investments in affiliates	153	229
Deferred financing costs, net	49	46
Furniture, fixtures and equipment replacement fund	124	119
Other	266	200
Restricted cash	53	44
Cash and cash equivalents	1,642	508
Total assets	12,555	11,950
Debt
Senior notes, including $1,123 million and $916 million, respectively, net of discount, of Exchangeable Senior Debentures	4,534	3,943
Mortgage debt	1,217	1,436
Credit facility	0	410
Other	86	87
Total debt	5,837	5,876
Accounts payable and accrued expenses	174	119
Other	194	183
Total liabilities	6,205	6,178
Non-controlling interests-Host Hotels & Resorts, L.P.	139	158
Host Hotels & Resorts, Inc. stockholders' equity
Cumulative redeemable preferred stock (liquidation preference $100 million), 50 million shares authorized; 4.0 million shares issued and outstanding	97	97
Common stock, par value $.01, 1,050 million shares and 750 million shares authorized, respectively; 646.3 million shares and 525.3 million shares issued and outstanding, respectively	6	5
Additional paid-in capital	6,875	5,868
Accumulated other comprehensive income	12	5
Deficit	(801)	(385)
Total equity of Host Hotels & Resorts, Inc. stockholders	6,189	5,590
Non-controlling interests-other consolidated partnerships	22	24
Total equity	6,211	5,614
Total liabilities, non-controlling interests and equity	$12,555	$11,950

1_Statement Of Financial Positi

Statement Of Financial Position Unclassified - Real Estate Operations (Parenthetical) (USD $)
In Millions, except Per Share data	Dec. 31, 2009	Dec. 31, 2008
Senior notes, Exchangeable Senior Debentures	$1,123	$916
Cumulative redeemable preferred stock, liquidation preference	$100	$100
Cumulative redeemable preferred stock, shares authorized	50	50
Cumulative redeemable preferred stock, shares issued	4	4
Cumulative redeemable preferred stock, shares outstanding	4	4
Common stock, par value	0.01	0.01
Common stock, shares authorized	1,050	750
Common stock, shares issued	646.3	525.3
Common stock, shares outstanding	646.3	525.3

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
REVENUES
Rooms	$2,497	$3,116	$3,185
Food and beverage	1,243	1,556	1,593
Other	311	348	351
Total hotel sales	4,051	5,020	5,129
Rental income	107	119	120
Total revenues	4,158	5,139	5,249
EXPENSES
Rooms	686	766	759
Food and beverage	940	1,139	1,157
Other departmental and support expenses	1,109	1,259	1,243
Management fees	160	242	263
Other property-level expenses	387	386	385
Depreciation and amortization	662	557	499
Corporate and other expenses	116	58	69
Gain on insurance settlement	0	(7)	(51)
Total operating costs and expenses	4,060	4,400	4,324
OPERATING PROFIT	98	739	925
Interest income	7	20	37
Interest expense	(379)	(375)	(444)
Net gains on property transactions	14	2	6
Gain on foreign currency transactions and derivatives	5	1	0
Equity in earnings (losses) of affiliates	(32)	(10)	11
INCOME (LOSS) BEFORE INCOME TAXES	(287)	377	535
Benefit (provision) for income taxes	39	3	(3)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(248)	380	532
Income (loss) from discontinued operations.	(10)	34	202
NET INCOME (LOSS)	(258)	414	734
Less: Net (income) loss attributable to non-controlling interests	6	(19)	(31)
NET INCOME (LOSS) ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC.	(252)	395	703
Less: Dividends on preferred stock	(9)	(9)	(9)
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS	($261)	$386	$694
BASIC EARNINGS (LOSS) PER COMMON SHARE:
Continuing operations	-0.43	0.67	0.94
Discontinued operations	-0.02	0.07	0.39
BASIC EARNINGS (LOSS) PER COMMON SHARE	-0.45	0.74	1.33
DILUTED EARNINGS (LOSS) PER COMMON SHARE:
Continuing operations	-0.43	0.65	0.94
Discontinued operations	-0.02	0.07	0.38
DILUTED EARNINGS (LOSS) PER COMMON SHARE:	-0.45	0.72	1.32

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income	Non-controlling Interests of Consolidated Partnerships	Non-controlling Interests of Host Hotels & Resorts, L.P	Total
Beginning Balance at Dec. 31, 2006	$97	$5	$5,479	($615)	$24	$28	$462
Beginning Balance(Shares) at Dec. 31, 2006	4	521.1
Comprehensive stock and employee stock purchase plans(Shares)		1
Redemptions of limited partner interests for common stock(Shares)		0.5
Net income (loss)				703		6	25	703
Other changes in ownership			152				(152)
Other comprehensive income (loss):
Foreign currency translation and other comprehensive income of unconsolidated affiliates					20
Comprehensive stock and employee stock purchase plans			(12)
Common stock dividends paid in shares				(523)
Dividends on preferred stock				(9)
Issuance of Exchangeable Senior Debentures			89
Redemptions of limited partner interests for common stock			5				(5)
Cumulative effect of adoption of accounting pronouncement related to income taxes				11
Distributions to non-controlling interests of consolidated partnerships						(6)	(18)
Ending Balance(Shares) at Dec. 31, 2007	4	522.6
Ending Balance at Dec. 31, 2007	97	5	5,713	(433)	44	28	312
Comprehensive stock and employee stock purchase plans(Shares)		0.4
Redemptions of limited partner interests for common stock(Shares)		8.8
Repurchase of common stock(Shares)		-6.5
Net income (loss)				395		3	16	395
Issuance of common OP units							93
Other changes in ownership			156				(156)
Other comprehensive income (loss):
Foreign currency translation and other comprehensive income of unconsolidated affiliates					(45)		(1)
Change in fair value of derivative instruments					6
Comprehensive stock and employee stock purchase plans			7
Common stock dividends paid in shares				(338)
Dividends on preferred stock				(9)
Redemptions of limited partner interests for common stock			92				(92)
Distributions to non-controlling interests of consolidated partnerships						(7)	(14)
Repurchase of common stock			(100)
Ending Balance(Shares) at Dec. 31, 2008	4	525.3
Ending Balance at Dec. 31, 2008	97	5	5,868	(385)	5	24	158	5,614
Common stock issuances(Shares)		103.8
Comprehensive stock and employee stock purchase plans(Shares)		0.4
Common stock dividends paid in shares(Shares)		13.4
Redemptions of limited partner interests for common stock(Shares)		3.4
Net income (loss)				(252)		(1)	(5)	(252)
Unrealized loss on common stock					(4)
Other changes in ownership			(19)				19
Other comprehensive income (loss):
Foreign currency translation and other comprehensive income of unconsolidated affiliates					15
Change in fair value of derivative instruments					(4)
Common stock issuances		1	766
Comprehensive stock and employee stock purchase plans			6
Common stock dividends paid in cash				(16)
Common stock dividends paid in shares			139	(139)
Dividends on preferred stock				(9)
Issuance of Exchangeable Senior Debentures			82
Redemptions of limited partner interests for common stock			33				(33)
Contributions from non-controlling interests of consolidated partnerships						1
Distributions to non-controlling interests of consolidated partnerships						(2)
Ending Balance(Shares) at Dec. 31, 2009	4	646.3
Ending Balance at Dec. 31, 2009	$97	$6	$6,875	($801)	$12	$22	$139	$6,211

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
OPERATING ACTIVITIES
Net income (loss)	($258)	$414	$734
Discontinued operations:
Gain on dispositions	(26)	(24)	(162)
Depreciation	41	25	21
Depreciation and amortization	662	557	499
Amortization of deferred financing costs	14	12	18
Amortization of debt premiums/discounts, net	31	33	27
Deferred income taxes	(38)	(8)	(7)
Net gains on property transactions and other	(14)	(2)	(6)
Gain on foreign currency transactions and derivatives	(5)	(1)	0
Gain on extinguishment of debt	(5)	(14)	0
Equity in (earnings) losses of affiliates	32	10	(11)
Distributions from equity investments	1	3	4
Change in due from managers	34	41	(57)
Changes in other assets	(12)	0	(12)
Changes in other liabilities	95	(26)	(47)
Cash provided by operating activities	552	1,020	1,001
INVESTING ACTIVITIES
Proceeds from sales of assets, net	199	38	400
Proceeds from sale of interest in CBM Joint Venture LLC	13	0	0
Acquisitions	0	0	(15)
Deposits for acquisitions	0	0	(22)
Investment in affiliates	(7)	(77)	(12)
Return of capital from investments in affiliates	39	0	0
Capital expenditures:
Renewals and replacements	(164)	(374)	(267)
Repositionings and other investments	(176)	(298)	(346)
Change in furniture, fixtures & equipment (FF&E) replacement fund	(6)	3	(23)
Change in restricted cash designated for FF&E replacement fund	(14)	6	55
Property insurance proceeds	0	0	38
Other	0	(14)	0
Cash used in investing activities	(116)	(716)	(192)
FINANCING ACTIVITIES
Financing costs	(20)	(8)	(9)
Issuances of debt	906	300	1,025
Net draws (repayments) on credit facility	(410)	410	(250)
Repurchase of senior notes, including exchangeable debentures	(139)	(82)	0
Debt prepayments and scheduled maturities	(342)	(245)	(1,015)
Scheduled principal repayments	(14)	(16)	(35)
Common stock issuance	767	0	0
Common stock repurchase	0	(100)	0
Dividends on common stock	(42)	(522)	(444)
Dividends on preferred stock	(9)	(9)	(9)
Distributions to non-controlling interests	(3)	(28)	(22)
Change in restricted cash other than FF&E replacement fund	4	16	74
Cash provided by (used in) financing activities	698	(284)	(685)
INCREASE IN CASH AND CASH EQUIVALENTS	1,134	20	124
CASH AND CASH EQUIVALENTS, beginning of year	508	488	364
CASH AND CASH EQUIVALENTS, end of year	$1,642	$508	$488

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Description of Business Host Hotels Resorts, Inc., or Host, a Maryland corporation that operates through an umbrella partnership structure, is primarily the owner of hotel properties. We operate as a self-managed and self-administered real estate investment trust, or REIT, with our operations conducted solely through an operating partnership, Host Hotels Resorts, L.P., or Host LP and its subsidiaries. We are the sole general partner of Host LP and as of December31, 2009, own approximately 98% of the partnership interests, which are referred to as OP units. As of December31, 2009, we owned, or had controlling interests in, 111 luxury and upper-upscale, hotel lodging properties located throughout the United States, Toronto and Calgary, Canada, Mexico City, Mexico and Santiago, Chile operated primarily under the Marriott, Ritz-Carlton, Hyatt, Fairmont, Four Seasons, Hilton, Westin Sheraton, W, St. Regis and Luxury Collection brand names. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries and controlled affiliates. If we determine that we are an owner in a variable interest entity and that our variable interest will absorb a majority of the entitys expected losses if they occur, receive a majority of the entitys expected residual returns if they occur, or both, then we will consolidate the entity. Additionally, we consolidate entities (in the absence of other factors determining control) when we own over 50% of the voting shares or, in the case of partnership investments, when we own a majority of the general partnership interest and can control the entity. The control factors we consider include the ability of non-controlling interests to participate in or block management decisions. All material intercompany transactions and balances have been eliminated. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents We consider all highly liquid investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. Restricted Cash Restricted cash includes reserves for debt service, real estate taxes, insurance, furniture, fixtures and equipment, as well as cash collateral and excess cash flow deposits due to mortgage debt agreement restrictions and provisions. For purposes of the statements of cash flows, changes in restricted cash that are used for furniture, fixture and equipment replacement funds controlled by our lenders are shown as investing activities. The remaining changes in restricted cash are the direct result of restrictions under our loan agreements,

Property and Equipment

Property and Equipment
	12 Months Ended Dec. 31, 2009 USD / shares
Property and Equipment	2. Property and Equipment Property and equipment consists of the following as of December31: 2009 2008 (in millions) Land and land improvements $ 1,574 $ 1,613 Buildings and leasehold improvements 11,502 11,502 Furniture and equipment 1,794 1,749 Construction in progress 104 174 14,974 15,038 Less accumulated depreciation and amortization (4,743 ) (4,299 ) $ 10,231 $ 10,739 The aggregate cost of real estate for federal income tax purposes is approximately $9,601million at December31, 2009. During 2009, we recorded non-cash impairment charges totaling $97million of which $66million of impairment charges is included in depreciation and amortization and the remaining $31million of impairment charges is recorded in discontinued operations. See Note 12Fair Value Measurements.

Investments in Affiliates

Investments in Affiliates
	12 Months Ended Dec. 31, 2009 USD / shares
Investments in Affiliates	3. Investments in Affiliates We own investments in voting interest entities which we do not consolidate and, accordingly, are accounted for under the equity method of accounting. The debt of these affiliates is non-recourse to, and not guaranteed by, us. Investments in affiliates consists of the following: As of December31, 2009 Ownership Interests Our Investment Debt Assets (in millions) Asia Pacific Hospitality Venture Pte.Ltd. 25.0 % $ $ None HHR Euro CV 32.1 % 137 1,032 ElevenhotelslocatedinEurope HHR TRS CV 9.8 % 1 5 Lease agreements for certain hotelsownedbyHHREuroCV Tiburon Golf Ventures, L.P. 49.0 % 15 36-hole golf club Total $ 153 $ 1,037 As of December 31, 2008 Ownership Interests Our Investment Debt Assets (in millions) Asia Pacific Hospitality Venture Pte.Ltd. 25.0 % $ $ None HHR Euro CV 32.1 % 208 1,017 Eleven hotels located in Europe HHR TRS CV 9.8 % 1 5 Lease agreements for certain hotels owned by HHR Euro CV CBM Joint Venture L.P. 3.6 % 5 810 115 Courtyard hotels Tiburon Golf Ventures, L.P. 49.0 % 15 36-hole golf club Total $ 229 $ 1,832 European Joint Venture In March 2006, we formed a joint venture, HHR Euro CV, to acquire hotels in Europe (the European joint venture). We serve as the general partner for the European joint venture and have a 32.1% ownership interest (including our limited and general partner interests). The initial term of the European joint venture is ten years, subject to two one-year extensions with partner approval. As of December31, 2009, five of the hotels owned by HHR Euro CV are leased to HHR TRS CV, an entity of which we also serve as a general partner and have a 9.8% ownership interest, including our general and limited partner interests. Due to the ownership structure and the non-Host limited partners rights to cause the dissolution and liquidation of the European joint venture and HHR TRS CV at any time, they are not consolidated in our financial statements. As general partner, we earn a management fee based on the amount of equity commitments and equity investments. In 2009, 2008 and 2007, we recorded approximately $6million, $6 million and $5 million of management fees, respectively. During 2008, we entered into three foreign currency forward purchase contracts totaling 60million (approximately $88million) to hedge a portion of the foreign currency exposure resulting from the eventual repatriation of our net investment in the European joint venture. These derivatives are considered a hedge of the foreign currency exposure of a net investment in a foreign operation, and, in accordance with SFAS133, are marked-to-market with changes in fair value recorded to accumulated other comprehensive income within the stockholders equity portion of our balance sheet. We also evaluate counterparty credit risk in the calculation o

Debt

Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Debt	4. Debt Debt consists of the following: December31, 2009 December31, 2008 Series K senior notes, with a rate of 71/8% due November 2013 $ 725 $ 725 Series M senior notes, with a rate of 7% due August 2012(1) 344 348 Series O senior notes, with a rate of 63/8% due March 2015 650 650 Series Q senior notes, with a rate of 63/4% due June 2016 800 800 Series S senior notes, with a rate of 67/8% due November 2014 498 497 Series T senior notes, with a rate of 9% due May 2017 387 2004 Exchangeable Senior Debentures, with a rate of 31/4% due April 2024 323 383 2007 Exchangeable Senior Debentures, with a rate of 25/ 8% due April 2027 484 533 2009 Exchangeable Senior Debentures, with a rate of 21/2% due October 2029 316 Senior notes, with rate of 10.0% due May 2012 7 7 Total senior notes 4,534 3,943 Mortgage debt (non-recourse) secured by $1.5billion and $2.1billion of real estate assets, with an average interest rate of 5.1% and 6.2% at December31,2009 and 2008, maturing through December2023(1)(2) 1,217 1,436 Credit facility 410 Other 86 87 Total debt $ 5,837 $ 5,876 (1) During the first quarter of 2010, we redeemed the remaining $346 million of the 7% Series M senior notes and repaid the $124 million mortgage debt on the Atlanta Marriott Marquis. (2) The assets securing mortgage debt represents the book value of real estate assets, net of accumulated depreciation. These amounts do not represent the current market value of the assets. Senior Notes General.Under the terms of our senior notes indenture, which includes our Exchangeable Senior Debentures, our senior notes are equal in right of payment with all of Host LPs unsubordinated indebtedness and senior to all subordinated obligations of Host LP. The face amount of our senior notes as of December31, 2009 and 2008 was $4.7billion and $4.0billion, respectively. The senior notes balance as of December31, 2009 and 2008 includes discounts of approximately $145million and $89million, respectively. The notes under our senior notes indenture are guaranteed by certain of our existing subsidiaries and are secured by pledges of equity interests in many of our subsidiaries. The guarantees and pledges ratably benefit the notes under our senior notes indenture, as well as our credit facility, certain other senior debt, and interest rate swap agreements and other hedging agreements, if any, with lenders that are parties to the credit facility. We pay interest on each series of our senior notes semi-annually in arrears at the respective annual rates indicated on the table above. We had the following activities during 2009 and 2008: On December22, 2009, Host LP issued $400million of 21/2% Exchangeable Senior Debentures and received proceeds of $391million, net of underwriting fees and expenses (the 2009 Debentures). The proceeds, along with available cash, were used to redeem the remaining $346million of the 7% Series M senior note

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 12/31/2009 USD / shares
Stockholders' Equity	5. Stockholders Equity We have authorized 1,050million shares of common stock, with a par value of $0.01 per share, of which 646.3million and 525.3million were outstanding as of December31, 2009 and 2008, respectively. Fifty million shares of no par value preferred stock are authorized, with 4.0million shares outstanding as of December31, 2009 and 2008. Issuances On April29, 2009, we issued 75,750,000 shares of common stock at $6.60 per share and received net proceeds of approximately $480million, after underwriting discounts and commissions and transaction expenses. On August19, 2009, we entered into a Sales Agency Financing Agreement with BNY Mellon Capital Markets, LLC, through which we may issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $400million. During 2009, we issued approximately 28million shares of common stock through this program at an average price of approximately $10.27 per share for net proceeds of approximately $287million. We may continue to sell shares of common stock under this program from time to time based on market conditions, although we are not under obligation to sell any shares. On December22, 2009, Host LP issued the 2009 Debentures for proceeds of $391million, net of underwriting fees and expenses. We separately account for the debt and equity portion of the debentures to reflect the fair value of the liability component based on our non-convertible borrowing cost at the issuance date. The excess proceeds received over the fair value of the liability are allocated to the equity component of the debentures. Accordingly, we allocated $82million to the equity portion of the 2009 Debentures upon their issuance. See Note 4, Debt. Dividends On September14, 2009, Host announced that its Board of Directors authorized a special dividend of $0.25 per share of common stock of Host, which was paid on December18, 2009 to holders of record as of November6, 2009. The dividend was paid with cash or with shares of common stock, at the election of the stockholder. In order to comply with Hosts remaining REIT taxable income distribution requirements for the year ended December31, 2008, while retaining capital and maintaining maximum financial flexibility, Hosts Board of Directors determined that the cash component of the dividend (other than cash paid in lieu of fractional shares) would not exceed 10% in the aggregate. As a result, we issued 13.4million shares of Host common stock valued at $140million on December18, 2009, and paid cash in the amount of $16million, for a total dividend of $156million. The table below presents the amount of common and preferred dividends declared per share as follows: 2009 2008 2007 Common stock $ .25 $ .65 $ 1.00 Class E preferred stock 87/8% 2.22 2.22 2.22 Stock Repurchase During 2008, the Companys Board of Directors authorized a program to repurchase up to $500million of common stock and equity-related securities. These securities may be purchased in the open market or through private transactions, depending on market conditions. During 2008, the Co

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	6. Income Taxes We elected to be taxed as a REIT effective January1, 1999, pursuant to the U.S. Internal Revenue Code of 1986, as amended. In general, a corporation that elects REIT status and meets certain tax law requirements regarding the distribution of its taxable income to its stockholders as prescribed by applicable tax laws and complies with certain other requirements (relating primarily to the nature of its assets and the sources of its revenues) is generally not subject to federal and state income taxation on its operating income distributed to its stockholders. In addition to paying federal and state income taxes on any retained income, we are subject to taxes on built-in-gains resulting from sales of certain assets. Additionally, our taxable REIT subsidiaries are subject to federal, state and foreign income tax. The consolidated income tax provision or benefit includes the income tax provision or benefit related to the operations of the taxable REIT subsidiaries, state income taxes incurred by Host and Host LP and foreign income taxes incurred by Host LP, as well as each of their respective subsidiaries. Where required, deferred income taxes are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities and their respective tax bases and for operating loss, capital loss and tax credit carryovers based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Total deferred tax assets and liabilities at December31, 2009 and 2008 are as follows (in millions): 2009 2008 Deferred tax assets $ 108 $ 110 Less: Valuation allowance (37 ) (28 ) Subtotal 71 82 Deferred tax liabilities (17 ) (66 ) Net deferred tax asset $ 54 $ 16 We have recorded a 100% valuation allowance of approximately $36million against the net deferred tax asset related to the net operating loss and asset tax credit carryovers as of December31, 2009 with respect to our hotel in Mexico. There is a $1million valuation allowance against the deferred tax asset related to the net operating loss and capital loss carryovers as of December31, 2009 with respect to our hotels in Canada. The net increase in the valuation allowance for the year ending December31, 2009 and December31, 2008 was approximately $9million and $3million, respectively. We expect that all net operating loss and alternative minimum tax credit carryovers for U.S. federal income tax purposes to be realized. The primary components of our net deferred tax asset were as follows (in millions): 2009 2008 Accrued related party interest $ $ 5 Net operating

Leases

Leases
	12 Months Ended Dec. 31, 2009 USD / shares
Leases	7. Leases Hotel Leases We lease substantially all of our hotels (the Leases) to a wholly owned subsidiary that qualifies as a taxable REIT subsidiary due to federal income tax restrictions on a REITs ability to derive revenue directly from the operation and management of a hotel. Hospitality Properties Trust Relationship.In a series of related transactions in 1995 and 1996, we sold and leased back 53 Courtyard by Marriott (Courtyard) properties and 18 Residence Inn by Marriott (Residence Inn) properties to Hospitality Properties Trust (HPT). These leases, which are accounted for as operating leases and are included in the table below, have initial terms expiring between 2010 and 2012 and are renewable at our option. Minimum rent payments are $59million annually for the Courtyard properties and $21million annually for the Residence Inn properties, and additional rent based upon sales levels are payable to HPT under the terms of the leases. In 1998, we sublet the HPT properties (the Subleases) to separate sublessee subsidiaries of Barcel Crestline Corporation (the Sublessee), subject to the terms of the applicable HPT lease. The term of each Sublease expires simultaneously with the expiration of the initial term of the HPT lease to which it relates and automatically renews for the corresponding renewal term under the HPT lease, unless either we or the Sublessee elect not to renew the Sublease provided, however, that neither party can elect to terminate fewer than all of the Subleases in a particular pool of HPT properties (one for the Courtyard properties and one for the Residence Inn properties). Rent payable by the Sublessee under the Subleases consists of the minimum rent payable under the HPT lease and an additional percentage rent payable to us. The percentage rent payable by the Sublessee is generally sufficient to cover the additional rent due under the HPT lease, with any excess being retained by us. Rent payable under the subleases is guaranteed by the parent of the subtenants up to a maximum of approximately $21.6million for the Courtyard leases, of which approximately $6.7million has been funded through December31, 2009, and approximately $10.8million for the Residence Inn leases, of which approximately $5.9million has been funded through December31, 2009. To the extent the parent of the subtenants fails to perform or fully funds its guarantee obligation, we will be responsible for funding any rent shortfalls to HPT. At the expiration of these leases, HPT will return our initial security deposit of approximately $67million, plus additional cash collateral of approximately $7.8million. We gave notice that we will terminate the lease on the 18 Residence Inn properties effective December31, 2010, at which time we expect our $17million security deposit will be returned by HPT. In 2010, we also intend to give notice that we will terminate the lease on the 53 Courtyard by Marriott properties effective December31, 2012. Other Lease Information As of December31, 2009, all or a portion of 35 of our hotels are subject to ground leases, generally with multiple renewal options, all of which are accounted for as operating

Employee Stock Plans

Employee Stock Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Stock Plans	8. Employee Stock Plans We maintain two stock-based compensation plans, the Comprehensive Stock and Cash Incentive Plan (the 2009 Comprehensive Plan), whereby we may award to participating employees (i)restricted shares of our common stock, (ii)options to purchase our common stock and (iii)deferred shares of our common stock and the employee stock purchase plan (ESPP). At December31, 2009, there were approximately 19.2million shares of common stock reserved and available for issuance under the 2009 Comprehensive Plan. We recognize costs resulting from our share-based payment transactions in our financial statements over their vesting periods. We classify share-based payment awards granted in exchange for employee services as either equity awards or liability awards. The classification of our restricted stock awards as either an equity award or a liability award is based upon cash settlement options. Equity awards are measured based on the fair value on the date of grant. Liability classified awards are re-measured to fair value each reporting period. The value of all restricted stock awards, less estimated forfeitures, is recognized over the period during which an employee is required to provide service in exchange for the awardthe requisite service period (usually the vesting period). No compensation cost is recognized for awards for which employees do not render the requisite service. All restricted stock awards to senior executives outstanding as of December31, 2009 have been classified as liability awards, primarily due to settlement features that allow the recipient to have a percentage of the restricted stock awards withheld to meet tax requirements in excess of the statutory minimum withholding. Restricted stock awards to our other employees, including upper-middle management, have been classified as equity awards as these awards do not have this optional tax withholding feature. On May14, 2009, our stockholders approved the 2009 Comprehensive Plan, which authorized 25million shares that can be issued for stock-based compensation to employees and directors. Shares described below that were granted after this date were issued under this plan. We granted 4.8million restricted shares to senior executives that vest in 2010 and 2011 and 1.0million stock options under this plan. We also granted 0.2million restricted shares to other employees at a per share price of $10.40. Prior to the adoption of the 2009 Comprehensive Plan, we granted 2.4million restricted shares and 0.4million stock options to senior executives that had a requisite service period through December31, 2009. These shares were granted under our previous 1997 Comprehensive Stock and Cash Incentive Plan (the 1997 Comprehensive Plan, which is not in effect as of December31, 2009. We also granted 0.2million restricted shares to upper-middle management during 2009 through the 1997 Comprehensive Plan. During 2009, 2008 and 2007, we recorded compensation expense of approximately $20.5million, $2.8million and $4.4million, respectively. Shares granted in 2009, 2008 and 2007 totaled 9.0million, 0.3million and 0.1million, respectively, while 2.2million, 0.3million

Profit Sharing and Postemployme

Profit Sharing and Postemployment Benefit Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Profit Sharing and Postemployment Benefit Plans	9. Profit Sharing and Postemployment Benefit Plans We contribute to defined contribution plans for the benefit of employees meeting certain eligibility requirements and electing participation in the plans. The discretionary amount to be matched by us is determined annually by the Board of Directors. We provide medical benefits to a limited number of retired employees meeting restrictive eligibility requirements. Our recorded liability for this obligation is not material. Payments for these items were not material for the three years ended December31, 2009.

Discontinued Operations

Discontinued Operations
	12 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations	10. Discontinued Operations We disposed of one hotel in the first quarter of 2010 (which is classified as held-for-sale on our consolidated balance sheet as of December31, 2009), six hotels in 2009, two hotels in 2008 and nine hotels in 2007. The 2009 dispositions include one hotel for which our ground lease expired in 2009 and, in connection therewith, the hotel will revert back to the ground lessor in 2010. The operations for these hotels are included in discontinued operations on the accompanying statements of operations. The following table summarizes the revenues, income before taxes, and the gain on dispositions, net of tax, of the hotels which have been reclassified to discontinued operations, which includes assets held for sale and the results of sold hotels prior to their disposition in the consolidated statements of operations for the periods presented (in millions): 2009 2008 2007 Revenues $ 58 $ 156 $ 212 Income before taxes (37 ) 11 40 Gain on disposals, net of tax 26 24 164

Gain on Insurance Settlement

Gain on Insurance Settlement
	12 Months Ended Dec. 31, 2009 USD / shares
Gain on Insurance Settlement	11. Gain on Insurance Settlement Eight of our properties sustained damage from hurricanes during 2005. Two of these properties, the New Orleans Marriott and the Fort Lauderdale Marina Marriott, had extensive damage that required us to temporarily close all or part thereof. Property damage was $37million. Our insurance coverage for the properties entitles us to receive recoveries for damage as well as payments for business interruption. During 2007, we received property insurance proceeds of $38 million and recorded a gain on property insurance proceeds of $22 million. Gains on property insurance proceeds represent proceeds received in excess of the insurance receivable, which receivable represents the book value of the damaged assets that were written-off. All gains resulting from insurance proceeds are recognized at the point in time that all contingencies are resolved. We did not receive any property insurance proceeds in 2009 or 2008. During 2008 and 2007, we also recorded a gain on business interruption insurance proceeds of $7 million and $36million, respectively, related to hurricanes in those years. We did not receive any business interruption insurance proceeds in 2009.

Fair Value Measurements

Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements	12. Fair Value Measurements We have adopted the provisions under GAAP for both recurring and non-recurring fair value measurements. Our recurring fair value measurements consist of the valuation of our derivative instruments, which may or may not be designated as accounting hedges. Non-recurring fair value measurements during 2009 consisted of the impairment of four of our hotel properties and an other-than-temporary impairment of our investment in the European joint venture. In evaluating the fair value of both financial and non-financial assets and liabilities, GAAP outlines a valuation framework and creates a fair value hierarchy that distinguishes between market assumptions based on market data (observable inputs) and a reporting entitys own assumptions about market data (unobservable inputs). The requirements are intended to increase the consistency and comparability of fair value measurements and the related disclosures. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability at the measurement date in an orderly transaction (an exit price). Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as defined by GAAP. The three levels are as follows: Level 1Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. An active market is defined as a market in which transactions occur with sufficient frequency and volume to provide pricing on an ongoing basis. Level 2Inputs include quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that derived principally from or corroborated by observable market data correlation or other means. Level 3Unobservable inputs reflect our assumptions about the pricing of an asset or liability when observable inputs are not available. The following table details the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis, as well as when non-recurring fair value measurements that we completed during 2009 due to the impairment of non-financial assets. Balance at December31, 2009 Fair Value at Measurement Date Using Gains(Losses) QuotedPrices in Active Markets for IdenticalAssets (Level 1) SignificantOther Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Measurements on a Recurring Basis: Interest rate swap derivatives(1) $ (1.0 ) $ $ (1.0 ) $ $ (1.0 ) Interest rate cap derivative 1.8 1.8 0.3 Forward currency purchase contracts(1)(2) 1.7 1.7 (4.4 ) Fair Value Measurements on a Non-recurring Basis: Impaired hotel properties held and used(3) 78

Relationship with Marriott Inte

Relationship with Marriott International
	12 Months Ended Dec. 31, 2009 USD / shares
Relationship with Marriott International	13. Relationship with Marriott International We have entered into various agreements with Marriott, including the management of approximately 60% of our hotels, financing for joint ventures or partnerships, including our JW Marriott Hotel, Mexico City, Mexico and certain limited administrative services. In 2009, 2008 and 2007, we paid Marriott $105million, $178million and $197million, respectively, in hotel management fees and approximately $1million, in franchise fees for each of 2009, 2008 and 2007. Included in the management fees are amounts paid to The Ritz-Carlton Hotel Company, LLC (Ritz-Carlton), Courtyard Management Corporation and Residence Inn Management Corporation. We enter into negotiations with Marriott from time to time in order to secure mutually beneficial modifications to the terms of management agreements on an individual or portfolio-wide basis, most typically in connection with repositioning projects or substantial capital investments at our properties. We negotiated amendments to various management agreements with Marriott in 2005 and agreed, among other matters, to waive performance termination tests through the end of fiscal year 2009, to modify certain extension tests which condition the managers ability to renew the management agreements, and to extend certain contracts for ten additional years. As part of this negotiation, Marriott agreed to make cash payments to us, over time, to reduce an existing cap on the costs and expenses related to chain services that are provided on a centralized basis, as well as to establish a cap on certain other costs, to provide us with an incentive to increase our capital expenditures at the hotels through 2008, to waive certain deferred management fees, and to modify the incentive management fee on certain contracts. We agreed to use a portion of Marriotts cash payments for brand reinvestment projects at various hotels in our portfolio.

Hotel Management Agreements and

Hotel Management Agreements and Operating and License Agreements
	12 Months Ended Dec. 31, 2009 USD / shares
Hotel Management Agreements and Operating and License Agreements	14. Hotel Management Agreements and Operating and License Agreements Our hotels are subject to management agreements under which various operators, including Marriott, Ritz-Carlton, Hyatt, Swisstel, Hilton, Four Seasons, Fairmont and Starwood, operate our hotels in exchange for the payment of a management fee. The agreements generally provide for both base and incentive management fees that are based on hotel sales and operating profit, respectively. As part of the management agreements, the manager furnishes the hotels with certain chain services which are generally provided on a central or regional basis to all hotels in the managers hotel system. Chain services include central training, advertising and promotion, national reservation systems, computerized payroll and accounting services, and such additional services as needed which may be more efficiently performed on a centralized basis. Costs and expenses incurred in providing such services are allocated among the hotels managed, owned or leased by the manager on a fair and equitable basis. In addition, our managers will generally have a guest rewards program which will be charged to all of the hotels that participate in the program. We are obligated to provide the manager with sufficient funds, generally 5% of revenue generated at the hotel, to cover the cost of (a)certain non-routine repairs and maintenance to the hotels which are normally capitalized; and (b)replacements and renewals to the hotels furniture, fixtures and equipment. Under certain circumstances, we will be required to establish escrow accounts for such purposes under terms outlined in the agreements. Marriott International As of December31, 2009, 65 of our hotels were subject to management agreements under which Marriott or one of their subsidiaries manages the hotels, generally for an initial term of 15 to 20 years with one or more renewal terms at the option of Marriott. Marriott typically receives a base fee of three percent of gross revenues and incentive management fees generally equal to 20% of operating profit after we have received a priority return. We have the option to terminate certain management agreements if specified performance or extension thresholds are not satisfied. A single agreement may be canceled under certain conditions, although such cancellation will not trigger the cancellation of any other agreement. Additionally, while most of our management agreements are not terminable prior to their full term, we have negotiated rights with respect to 18 specified Marriott-branded hotels to terminate management agreements in connection with the sale of these hotels, subject to certain limitations, including the number of agreements that can be terminated per year, limitations measured by EBITDA, and limitations requiring that a significant part of such hotels maintain the Marriott brand affiliation. The described termination rights may be exercised without payment of a termination fee, except for one of the specified hotels wherein a termination fee is required if it does not maintain the Marriott brand affiliation. We have a franchise agreement with Marriott for one hotel. Pursu

Geographic and Business Segment

Geographic and Business Segment Information
	12 Months Ended Dec. 31, 2009 USD / shares
Geographic and Business Segment Information	15. Geographic and Business Segment Information We consider each one of our hotels to be an operating segment, none of which meets the threshold for a reportable segment. We also allocate resources and assess operating performance based on individual hotels. All of our other real estate investment activities (primarily our leased hotels and office buildings) are immaterial and meet the aggregation criteria, and thus, we report one segment: hotel ownership. Our foreign operations consist of four properties located in Canada, two properties located in Chile and one property located in Mexico. There were no intersegment sales during the periods presented. The following table presents revenues and long-lived assets for each of the geographical areas in which we operate (in millions): 2009 2008 2007 Revenues Property and Equipment, net Revenues Property and Equipment, net Revenues Property and Equipment, net United States $ 4,020 $ 10,013 $ 4,961 $ 10,541 $ 5,078 $ 10,358 Canada 96 135 119 123 117 140 Chile 25 53 32 45 27 57 Mexico 17 30 27 30 27 33 Total $ 4,158 $ 10,231 $ 5,139 $ 10,739 $ 5,249 $ 10,588

Guarantees and Contingencies

Guarantees and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Guarantees and Contingencies	16. Guarantees and Contingencies We have certain guarantees which consist of commitments we have made to third parties for leases or debt that are not recognized in our consolidated financial statements due to various dispositions, spin-offs and contractual arrangements, but that we have agreed to pay in the event of certain circumstances including default by an unrelated party. We consider the likelihood of any material payments under these guarantees to be remote. The guarantees are listed below: We remain contingently liable for rental payments on certain divested non-lodging properties. These primarily represent certain divested restaurants that were sold subject to our guarantee of the future rental payments. The aggregate amount of these future rental payments is approximately $20million as of December31, 2009. In 1997, we owned Leisure Park Venture Limited Partnership, which owns and operates a senior living facility. We spun-off the partnership to Barcel Crestline Corporation, formerly Crestline Capital Corporation, in the REIT conversion, but we remain obligated under a guarantee of interest and principal with regard to $14.7million of municipal bonds issued by the New Jersey Economic Development Authority through their maturity in 2027. However, to the extent we are required to make any payments under the guarantee, we have been indemnified by Barcel Crestline Corporation, who, in turn, is indemnified by the current owner of the facility. In connection with the sale of two hotels in January 2005, we remain contingently liable for the amounts due under the respective ground leases. The future minimum lease payments are approximately $13million through the full term of the leases, including renewal options. We believe that any liability related to these ground leases is remote, and in each case, we have been indemnified by the purchaser of the hotel. In connection with the Starwood acquisition, we have three properties with environmental liabilities, primarily asbestos in non-public areas of the properties, for which we have recorded the present value of the liability, or approximately $2.7million, in accordance with FIN 47 Accounting for Conditional Asset Retirement Obligations. The amount is based on managements estimate of the timing and future costs to remediate the liability. We will record the accretion expense over the period we intend to hold the hotel or until the item is remediated.

Legal Proceedings

Legal Proceedings
	12 Months Ended Dec. 31, 2009 USD / shares
Legal Proceedings	17. Legal Proceedings On February8, 2010, we received an adverse jury verdict in a trial in the 166th Judicial District Court of Bexar County, Texas involving the sale of land encumbered by a ground lease for the San Antonio Marriott Rivercenter hotel. The jury found that we intentionally interfered with the attempted sale by Keystone-Texas Property Holding Corporation of the land under the San Antonio Marriott Rivercenter and slandered title to the property. The jury awarded damages that range from $42 million to $56 million, including statutory interest, as well as exemplary damages on the latter claim. The verdict is not yet final and is subject to post-trial motions. Based on the range of possible outcomes, we accrued an additional potential litigation loss of approximately $41million in the fourth quarter consistent with generally accepted accounting principles, which is included in corporate expenses on the consolidated statements of operations. We believe that a number of legal rulings decided by the trial court were in error and had an adverse effect on the jurys verdict. We intend to vigorously pursue these issues in post trial motions and, if necessary, on appeal.

Quarterly Financial Data

Quarterly Financial Data (unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Financial Data (unaudited)	18. Quarterly Financial Data (unaudited) 2009 First Quarter Second Quarter Third Quarter Fourth Quarter (in millions, except per share amounts) Revenues $ 865 $ 1,055 $ 907 $ 1,331 Operating profit (loss) 19 58 (8 ) 30 Income (loss) from continuing operations (55 ) (57 ) (67 ) (68 ) Income (loss) from discontinued operations (5 ) (12 ) 9 (4 ) Net loss (60 ) (69 ) (58 ) (72 ) Net loss attributable to Host Hotels Resorts (59 ) (68 ) (55 ) (71 ) Net loss available to common stockholders (61 ) (70 ) (57 ) (73 ) Basic income (loss) per common share: Continuing operations (.11 ) (.10 ) (.11 ) (.11 ) Discontinued operations (.01 ) (.02 ) .02 (.01 ) Net loss (.12 ) (.12 ) (.09 ) (.12 ) Diluted income (loss) per common share: Continuing operations (.11 ) (.10 ) (.11 ) (.11 ) Discontinued operations (.01 ) (.02 ) .02 (.01 ) Net loss (.12 ) (.12 ) (.09 ) (.12 ) 2008 First Quarter Second Quarter Third Quarter Fourth Quarter (in millions, except per share amounts) Revenues $ 1,033 $ 1,375 $ 1,131 $ 1,600 Operating profit 134 271 117 217 Income from continuing operations 63 176 28 112 Income (loss) from discontinued operations 17 19 (1 ) Net income 63 193 47 111 Net income attributable to Host Hotels Resorts, Inc. 54 183 47 109 Net income available to common stockholders 52 181 45 107 Basic earnings per common share: Continuing operations .10 .32 .05 .20 Discontinued operations .03 .04 Net income .10 .35 .09 .20 Diluted earnings per common share: Continuing operations .10 .31 .05 .18 Discontinued operations .03 .04 Net income .10 .34 .09 .18 The sum of the basic and diluted earnings per common share for the four quarters in all years presented differs from the annual earnings per common share due to the required method of computing the weighted average number of shares in the respective periods.

SCHEDULE III HOST HOTELS & RESO

SCHEDULE III HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES
	12 Months Ended Dec. 31, 2009 USD / shares
SCHEDULE III HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES	SCHEDULE III HOST HOTELS RESORTS, INC. AND SUBSIDIARIES REAL ESTATE AND ACCUMULATED DEPRECIATION December31, 2009 (in millions) Description(1) Debt Initial Costs Subsequent Costs Capitalized Gross Amount at December31, 2009 Date of Completion of Construction Date Acquired Depreciation Life Land Buildings Improvements Land Buildings Improvements Total Accumulated Depreciation Hotels: The Ritz-Carlton, Amelia Island, Florida $ $ 25 $ 115 $ 50 $ 25 $ 165 $ 190 $ 46 1998 40 Four Seasons, Atlanta, Georgia 5 48 18 6 65 71 20 1998 40 Grand Hyatt, Atlanta, Georgia 8 88 16 8 104 112 31 1998 40 Atlanta Marquis, Georgia 124 13 184 158 16 339 355 81 1998 40 Atlanta Midtown Suites, Georgia 26 8 34 34 12 1996 40 Westin Buckhead, Georgia 5 84 20 6 103 109 31 1998 40 Miami Biscayne Bay, Florida 27 20 47 47 18 1998 40 Boston Marriott Copley Place, Massachusetts 203 45 248 248 54 2002 40 Hyatt Regency, Burlingame, California 16 119 49 20 164 184 47 1998 40 Calgary, Canada 34 5 18 14 5 32 37 14 1996 40 Hyatt Regency, Cambridge, Massachusetts 18 84 (4 ) 19 79 98 30 1998 40 Chicago/Downtown Courtyard, Illinois 7 27 11 7 38 45 15 1992 40 Chicago Embassy Suites, Illinois 86 5 91 91 13 2004 40 Chicago OHare, Illinois 4 26 37 4 63 67 46 1998 40 Chicago OHare Suites, Illinois 5 36 6 5 42 47 13 1997 40 Swisstel, Chicago, Illinois 29 132 70 30 201 231 46 1998 40 Coronado Island Resort, California 53 25 78 78 24 1997 40 Costa Mesa Suites, California 3 18 6 3 24 27 9 1996 40 Dallas Quorum, Texas 14 27 17 14 44 58 19 1994 40 Dayton, Ohio 2 30 7 2 37 39 11 1998 40 Hyatt DC Capitol Hill, Washington, D.C. 40 230 16 40 246 286 27 2006 40 The Ritz-Carlton, Dearborn, Michigan 8 51 (37 ) 2 20 22 18 1998 40 Denver Tech Center, Colorado 6 26 26 6 52 58 19 1994 40 Westin Tabor Center, Colorado 39 89 6 95 95 9 2006 40 Desert Springs Resort and Spa, California 77 13 143 110 14 252 266 79 1997 40 Gaithersburg/Washingt

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 22, 2010	Jun. 19, 2009
Trading Symbol	HST
Entity Registrant Name	HOST HOTELS & RESORTS, INC.
Entity Central Index Key	0001070750
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		653,182,878
Entity Public Float			$4,478,405,281