Exhibit 99
Contact: Geof Wendt
Host Marriott Corporation
(301) 380-5694
HOST MARRIOTT CORPORATION AND MARRIOTT INTERNATIONAL REACH UNDERSTANDING TO
RESOLVE LITIGATION INVOLVING SIX HOTEL PARTNERSHIPS
BETHESDA, MD; February 24, 2000 - Host Marriott Corporation (NYSE:HMT) and
Marriott International, Inc. (NYSE:MAR) today announced that they have reached a
non-binding understanding to resolve pending litigation involving certain
limited partnerships formed in the mid-to late 1980's. The understanding, which
is still subject to numerous conditions, including definitive documentation,
court approval and various consents, was reached with lead counsel to the
plaintiffs in litigation pending in Texas.
There are two principal features of the proposed settlement. First, Host
Marriott and Marriott International expect, through a joint venture to be
formed between their affiliates, to acquire for approximately $372 million, the
equity interests of the limited partners in two partnerships, Courtyard by
Marriott I and Courtyard by Marriott II. These partnerships own 120 Courtyard
hotels. The settlement, including the acquisition and full releases of all
claims, would be financed with approximately $185 million of mezzanine debt
loaned to the joint venture by Marriott International, and equity contributed in
equal shares by an affiliate of Host
Marriott and Marriott International. Marriott International will continue to
manage these 120 hotels under long-term agreements.
Second, Marriott International and Host Marriott or its affiliates will
each pay approximately $31 million to the limited partners in four other limited
partnerships (Marriott Residence Inn Limited Partnership, Marriott Residence Inn
II Limited Partnership, Fairfield Inn by Marriott Limited Partnership and Desert
Springs Marriott Limited Partnership) in exchange for settlement of the
litigation and full releases of claims.
"We are pleased with the progress that we have made towards resolving
these long-standing disputes," said Chris Nassetta, executive vice president and
chief operating officer of Host Marriott. "The proposed settlement would
involve a cash outlay that is consistent with our earlier expectations and
budgeting," added Mr. Nassetta.
Host Marriott anticipates that the proposed settlement would result in a
one-time, pre-tax charge of $40-$50 million to 1999 earnings. Because this
write-off is non-recurring, it will not impact reported 1999 Funds From
Operations.
Host Marriott is a lodging real estate investment trust which currently
owns or holds controlling interests in 122 upper upscale and luxury hotel
properties primarily operated under the Marriott, Ritz-Carlton, Hyatt, Four
Seasons and Swissotel brand names. For further information on Host Marriott
Corporation, please visit the company's website at www.hostmarriott.com.
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This press release includes various references to FFO and EBITDA. The
company considers EBITDA and FFO 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 generally accepted accounting principles. Cash
expenditures for various long-term assets, interest expense (for EBITDA purposes
only) and income taxes have been, and will be, incurred which are not reflected
in the EBITDA and FFO presentations. Although FFO and EBITDA are considered
standard benchmarks utilized by the investment community, the company's 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. Future transactions, results, performance and achievements will be
affected by general economic, business and financing conditions, competition and
governmental actions.
The cautionary statements set forth in reports filed with the Securities
and Exchange Commission contain important factors with respect to such forward-
looking statements, including: (i) national and local economic and business
conditions that will, among other things, affect demand for hotels and other
properties and the availability and terms of financing; (ii) the ability to
maintain the properties in a first-class manner (including meeting capital
expenditure requirements); (iii) the ability to compete effectively in areas
such as access, location, quality of accommodations and room rate structures;
(iv) the ability to acquire or develop additional properties and risk that
potential acquisitions or developments may not perform in accordance with
expectations; (v) changes in travel patterns, taxes and government regulations;
(vi) governmental approvals, actions and initiatives; (vii) the effects of tax
legislative action; and (viii) the ability of the company to satisfy complex
rules in order
to qualify for taxation as a REIT for federal income tax purposes and to operate
effectively within the limitations imposed by these rules. Although the company
believes the expectations reflected in such forward-looking statements are based
upon reasonable assumptions, it can give no assurance that its 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.
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