<PAGE>

================================================================================


                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549




                                  FORM 10-Q/A



          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                                      OR

         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934




For the Quarter Ended June 18, 1999               Commission File No. 0-25087


                              HOST MARRIOTT, L.P.
                              10400 Fernwood Road
                            Bethesda, Maryland 20817
                                (301) 380-9000



        Delaware                                            52-2095412
--------------------------                              ------------------
(State of Incorporation)                                 (I.R.S. Employer
                                                      Identification Number)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.

                                                     Yes   X     No
                                                         -----

<TABLE>
<CAPTION>
                                                                                Units outstanding
        Class                                                                    at July 27, 1999
---------------------                                                            ----------------
<S>                                                                                <C>
Units of limited partnership interest                                              292,854,286
Units of Cumulative Redeemable Preferred limited partnership interest                  585,777
</TABLE>
<PAGE>

                                     INDEX
                                     -----



Part I.           FINANCIAL INFORMATION (Unaudited):                  Page No.
                                                                      --------

           Condensed Consolidated Balance Sheets -                        3
             June 18, 1999 and December 31, 1998

           Condensed Consolidated Statements of Operations -              4
             Twelve Weeks and Twenty-four Weeks Ended
             June 18, 1999 and June 19, 1998

           Condensed Consolidated Statements of Cash Flows -              8
             Twenty-four Weeks Ended June 18, 1999 and
             June 19, 1998

           Notes to Condensed Consolidated Financial Statements           9

           Management's Discussion and Analysis of Results of            22
             Operations and Financial Condition




                                      -2-
<PAGE>

                               HOST MARRIOTT, L.P.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                                        June 18,        December 31,
                                                                                                          1999               1998
                                                                                                        -------            --------
                                                                                                      (unaudited)
                                     ASSETS
                                     ------

<S>                                                                                                     <C>                 <C>
Property and equipment, net ................................................................            $ 7,214             $ 7,201
Notes and other receivables (including amounts due from
    affiliates of $131 million and $134 million, respectively) .............................                219                 203
Rent receivable ............................................................................                 86                  --
Due from managers ..........................................................................                 --                  19
Investments in affiliates ..................................................................                 45                  33
Other assets ...............................................................................                414                 370
Cash and cash equivalents ..................................................................                310                 436
                                                                                                        -------             -------
                                                                                                        $ 8,288             $ 8,262
                                                                                                        =======             =======

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Debt
    Senior notes ...........................................................................            $ 2,546             $ 2,246
    Mortgage debt ..........................................................................              2,230               2,438
    Convertible debt obligation to Host Marriott ...........................................                567                 567
    Other ..................................................................................                456                 447
                                                                                                        -------             -------
                                                                                                          5,799               5,698
Accounts payable and accrued expenses ......................................................                150                 204
Deferred income taxes ......................................................................                 96                  97
Deferred rent ..............................................................................                253                --
Other liabilities ..........................................................................                420                 460
                                                                                                        -------             -------
     Total liabilities .....................................................................              6,718               6,459
                                                                                                        -------             -------

Minority interest ..........................................................................                142                 147
Limited Partnership interests of third parties at redemption value
    (representing 64.6 million units at June 18, 1999
    and December 31, 1998) .................................................................                783                 892

Partners' Capital
    General partner ........................................................................                  1                   1
    Limited partner ........................................................................                647                 767
    Accumulated other comprehensive loss ...................................................                 (3)                 (4)

                                                                                                        -------             -------
      Total shareholders' equity ...........................................................                645                 764
                                                                                                        -------             -------
                                                                                                        $ 8,288             $ 8,262
                                                                                                        =======             =======
</TABLE>



            See Notes to Condensed Consolidated Financial Statements

                                      -3-
<PAGE>

                               HOST MARRIOTT, L.P.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               Twelve weeks ended June 18, 1999 and June 19, 1998
                            (unaudited, in millions)

<TABLE>
<CAPTION>
                                                                                                           1999               1998
                                                                                                          ------             ------
<S>                                                                                                    <C>                <C>
REVENUES
    Rental income (Note 2, 3) ................................................................             $ 187              $  --
    Hotel sales
      Rooms ..................................................................................                --                511
      Food and beverage ......................................................................                --                222
      Other ..................................................................................                --                 54
    Interest income ..........................................................................                 8                 10
    Net gains on property transactions .......................................................                 4                 51
    Equity (loss) in earnings of affiliates ..................................................                 1                 (2)
    Other ....................................................................................                 3                  3
                                                                                                           -----              -----
      Total revenues .........................................................................               203                849
                                                                                                           -----              -----
EXPENSES
    Depreciation .............................................................................                67                 60
    Property-level expenses ..................................................................                62                 60
    Hotel operating expenses
      Rooms ..................................................................................                --                113
      Food and beverage ......................................................................                --                158
      Other department costs and deductions ..................................................                --                185
      Management fees (including Marriott International
         management fees of $55 million in 1998) .............................................                --                 50
    Minority interest (benefit) ..............................................................                 7                 14
    Interest expense .........................................................................               109                 76
    Dividends on Host Marriott-obligated mandatorily
      redeemable convertible preferred securities of a subsidiary
      trust whose sole assets are the convertible subordinated
      debentures due 2026 ("Convertible Preferred Securities") ...............................                --                  8
    Corporate expenses .......................................................................                 8                  9
    REIT Conversion expenses .................................................................                --                  6
Other expenses ...............................................................................                 5                  5
                                                                                                           -----              -----
                                                                                                             258                744
                                                                                                           -----              -----

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
    INCOME TAXES .............................................................................               (55)               105
Provision for income taxes ...................................................................                --                (43)
                                                                                                           -----              -----

INCOME (LOSS) FROM CONTINUING OPERATIONS .....................................................               (55)                62
INCOME FROM DISCONTINUED OPERATIONS, net of taxes ............................................                --                  4
                                                                                                           -----              -----
INCOME (LOSS) BEFORE EXTRAORDINARY GAIN ......................................................               (55)                66
      Extraordinary item-gain on forgiveness of debt .........................................                13                 --
                                                                                                           -----              -----

NET INCOME (LOSS) ............................................................................             $ (42)             $  66
                                                                                                           =====              =====
</TABLE>


           See Notes to Condensed Consolidated Financial Statements

                                      -4-
<PAGE>

                               HOST MARRIOTT, L.P.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (cont.)
               Twelve weeks ended June 18, 1999 and June 19, 1998
                                   (unaudited)

<TABLE>
<CAPTION>
BASIC EARNINGS (LOSS) PER UNIT:
<S>                                                                                        <C>            <C>
Continuing operations...................................................................   $  (0.19)      $   0.29
Discontinued operations (net of income taxes)...........................................      --              0.02
Extraordinary item-gain on forgiveness of debt..........................................       0.04          --
                                                                                           --------       --------

BASIC EARNINGS (LOSS) PER UNIT:.........................................................   $  (0.15)      $   0.31
                                                                                           ========       ========

DILUTED EARNINGS (LOSS) PER UNIT:
Continuing operations...................................................................   $  (0.19)      $   0.26
Discontinued operations (net of income taxes)...........................................      --              0.02
Extraordinary item-gain on forgiveness of debt..........................................       0.04          --
                                                                                           --------       --------

DILUTED EARNINGS (LOSS) PER UNIT........................................................   $  (0.15)      $   0.28
                                                                                           ========       ========
</TABLE>

           See notes to Condensed Consolidated Financial Statements

                                      -5-
<PAGE>


                              HOST MARRIOTT, L.P.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            Twenty-four weeks ended June 18, 1999 and June 19, 1998
                           (unaudited, in millions)

<TABLE>
<CAPTION>
                                                                                                         1999               1998
                                                                                                       --------            ------
REVENUES
<S>                                                                                                     <C>                 <C>
Rental income (Note 2, 3) ..................................................................            $   358             $    --

Hotel sales
  Rooms ....................................................................................                 --               1,020
  Food and beverage ........................................................................                 --                 444
  Other ....................................................................................                 --                 110
Interest income ............................................................................                 16                  24
Net gains on property transactions .........................................................                 16                  52
Equity (loss) in earnings of affiliates ....................................................                  2                  (1)
Other ......................................................................................                  3                   5
                                                                                                        -------             -------
   Total revenues ..........................................................................                395               1,654
                                                                                                        -------             -------

EXPENSES
    Depreciation ...........................................................................                133                 113
    Property-level expenses ................................................................                120                 122
    Hotel operating expenses
      Rooms ................................................................................                 --                 227
      Food and beverage ....................................................................                 --                 321
      Other department costs and deductions ................................................                 --                 374
      Management fees (including Marriott International
         management fees of $102 million in 1998) ..........................................                 --                 108
    Minority interest (benefit) ............................................................                 11                  30
    Interest expense .......................................................................                217                 152
    Dividends on Host Marriott-obligated mandatorily redeemable
      convertible preferred securities of a subsidiary trust whose
      sole assets are the convertible subordinated debentures
      due 2026 ("Convertible Preferred Securities") ........................................                 --                  17
    Corporate expenses .....................................................................                 16                  21
    REIT conversion expenses ...............................................................                 --                   6
    Other expenses .........................................................................                  9                  10
                                                                                                        -------             -------
                                                                                                            506               1,501
                                                                                                        -------             -------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
  INCOME TAXES .............................................................................               (111)                153
Provision for income taxes .................................................................                 --                 (63)
                                                                                                        -------             -------

INCOME (LOSS) FROM CONTINUING OPERATIONS ...................................................               (111)                 90
INCOME FROM DISCONTINUED OPERATIONS, net of taxes ..........................................                 --                   6
                                                                                                        -------             -------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................               (111)                 96
      Extraordinary item--gain on forgiveness of debt ......................................                 13                  --
                                                                                                        -------             -------

NET INCOME (LOSS) ..........................................................................            $   (98)            $    96
                                                                                                        =======             =======
</TABLE>


            See Notes to Condensed Consolidated Financial Statements

                                      -6-
<PAGE>

                               HOST MARRIOTT, L.P.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (cont.)
             Twenty-four weeks ended June 18, 1999 and June 19, 1998
                                   (unaudited)

<TABLE>
<CAPTION>
BASIC EARNINGS (LOSS) PER UNIT:
<S>                                                                                        <C>            <C>
Continuing operations...................................................................   $  (0.38)      $   0.42
Discontinued operations (net of income taxes)...........................................         --           0.03
Extraordinary item-gain on forgiveness of debt..........................................       0.04             --
                                                                                           --------       --------

BASIC EARNINGS (LOSS) PER UNIT:.........................................................   $  (0.34)      $   0.45
                                                                                           ========       ========

DILUTED EARNINGS (LOSS) PER UNIT:
Continuing operations...................................................................   $  (0.38)      $   0.39
Discontinued operations (net of income taxes)...........................................         --           0.02
Extraordinary item-gain on forgiveness of debt..........................................       0.04             --
                                                                                           --------       --------

DILUTED EARNINGS (LOSS) PER UNIT........................................................   $  (0.34)      $   0.41
                                                                                           ========       ========
</TABLE>

           See Notes to Condensed Consolidated Financial Statements

                                      -7-
<PAGE>

                              HOST MARRIOTT, L.P.
                CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
                       Twenty-four weeks ended June 18,
                             1999 and June 19, 1998
                            (unaudited, in millions)
<TABLE>
<CAPTION>
                                                                                              1999           1998
                                                                                           ---------      ----------
OPERATING ACTIVITIES
<S>                                                                                        <C>            <C>
Income (loss) from continuing operations................................................   $    (111)     $     153
Adjustments to reconcile to cash from continuing operations:
    Depreciation and amortization.......................................................         135            114
    Income taxes........................................................................          --             45
    Gain on sale of hotel properties....................................................         (16)           (51)
Equity in earnings of affiliates........................................................          (2)             1
Changes in operating accounts...........................................................          83            (86)
Other...................................................................................          22             27
                                                                                           ---------      ---------
    Cash from continuing operations.....................................................         111            203
    Cash from discontinued operations...................................................          --              3
                                                                                           ---------      ---------
    Cash from operations................................................................         111            206
                                                                                           ---------      ---------

INVESTING ACTIVITIES
Proceeds from sales of assets...........................................................          35            209
Acquisitions............................................................................          (4)          (358)
Capital expenditures:
    Renewals and replacements...........................................................         (86)           (77)
    Development projects................................................................         (75)           (18)
    Other investment....................................................................         (16)           (14)
Purchases of short-term marketable securities...........................................          --            (97)
Sales of short-term marketable securities...............................................          --            405
Note receivable advances, net of collections............................................         (17)             4
Affiliate collections, net..............................................................          --             14
Other...................................................................................          --            (25)
                                                                                           ---------      ----------
    Cash (used in) from investing activities from continuing operations.................        (163)            43
    Cash used in investing activities from discontinued operations......................          --             (2)
                                                                                           ---------      ---------
    Cash (used in) from investing activities............................................        (163)            41
                                                                                           ---------      ---------

FINANCING ACTIVITIES
Issuances of debt, net..................................................................         413              5
Repurchase of units.....................................................................          (3)            --
Distribution............................................................................        (130)            --
Scheduled principal repayments..........................................................         (23)           (18)
Debt prepayments........................................................................        (323)           (49)
Other...................................................................................          (8)           (31)
                                                                                           ---------      ---------
    Cash used in financing activities from continuing operations........................         (74)           (93)
    Cash used in financing activities from discontinued operations......................          --           (150)
                                                                                           ---------      ----------
    Cash used in financing activities...................................................         (74)          (243)
                                                                                           ---------      ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................................   $    (126)     $       4
                                                                                           =========      =========

Non-cash financing activities:
    Assumption of mortgage debt for the acquisition of, or purchase of
       controlling interests in, certain hotel properties...............................   $      --      $     164
                                                                                           =========      =========
</TABLE>


           See Notes to Condensed Consolidated Financial Statements

                                      -8-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.   Organization

     Host Marriott Corporation ("Host Marriott"), operating through an umbrella
     partnership REIT structure, is the owner of hotel properties. Host Marriott
     operates as a self-managed and self-administered real estate investment
     trust ("REIT") and its operations are conducted through an operating
     partnership and its subsidiaries. As REITs are not currently permitted to
     derive revenues directly from the operation of hotels, Host Marriott leases
     substantially all of its hotels to subsidiaries of Crestline Capital
     Corporation ("Crestline" or the "Lessee") and certain other lessees.

     In these condensed consolidated financial statements, the "Company" or
     "Host Marriott" refers to Host Marriott Corporation and its consolidated
     subsidiaries before, and Host Marriott, L.P. and its consolidated
     subsidiaries (the "Operating Partnership"), after Host Marriott
     Corporation's conversion to a REIT (the "REIT Conversion"). Host Marriott
     Corporation is presented as the predecessor to the Operating Partnership
     since the Operating Partnership and its subsidiaries received substantially
     all of the continuing operations, assets and liabilities of Host Marriott
     Corporation and its subsidiaries.

     On December 15, 1998, shareholders of Host Marriott approved a plan to
     reorganize Host Marriott's business operations through the spin-off of Host
     Marriott's senior living business as part of Crestline and the contribution
     of Host Marriott's hotels and certain other assets and liabilities to a
     newly formed Delaware limited partnership, Host Marriott, L.P. Host
     Marriott merged into HMC Merger Corporation (the "Merger"), a newly formed
     Maryland corporation (renamed Host Marriott Corporation) which intends to
     qualify, effective January 1, 1999 as a REIT and is the sole general
     partner of the Operating Partnership. On December 29, 1998, Host Marriott
     completed the previously announced spin-off of Crestline through a taxable
     stock dividend to its shareholders. Each Host Marriott shareholder of
     record on December 28, 1998 received one share of Crestline for every ten
     shares of Host Marriott Corporation owned (the "Distribution"). In
     connection with the REIT Conversion, Host Marriott contributed its hotels
     and substantially all of its other assets and liabilities to the Operating
     Partnership and subsidiaries (the "Contribution") in exchange for units of
     partnership interest in the Operating Partnership. The Contribution was
     accounted for at Host Marriott's historical basis. As of June 18, 1999,
     Host Marriott owned approximately 78% of the Operating Partnership.

     As a result of the Distribution, the Company's financial statements have
     been restated to present the senior living communities business results of
     operations and cash flows as discontinued operations. All historical
     financial statements presented have been restated to conform to this
     presentation.

2.   Summary of Significant Accounting Policies

     The accompanying unaudited condensed consolidated financial statements of
     the Company and its subsidiaries have been prepared without audit. Certain
     information and footnote disclosures normally included in financial
     statements presented in accordance with generally accepted accounting
     principles have been condensed or omitted. The Company believes the
     disclosures made are adequate to make the information presented not
     misleading. However, the unaudited condensed consolidated financial
     statements should be read in conjunction with the consolidated financial
     statements and notes thereto included in the Company's annual report on
     Form 10-K for the fiscal year ended December 31, 1998.

     In the opinion of the Company, the accompanying unaudited condensed
     consolidated financial statements reflect all adjustments necessary to
     present fairly the financial position of the Company as of June 18, 1999
     and December 31, 1998, and the results of operations for the twelve and
     twenty-four weeks ended June 18, 1999 and June 19, 1998 and cash flows for
     the twenty-four weeks ended June 18, 1999 and June 19, 1998.

                                      -9-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

     The statements of operations for the twelve and twenty-four weeks ended
     June 19, 1998 and the cash flows for the twenty-four weeks ended June 19,
     1998 reflect the historical results of Host Marriott Corporation as
     discussed in Note 1. Interim results are not necessarily indicative of
     fiscal year performance because of the impact of seasonal and short-term
     variations.


     The Company's leases have remaining terms ranging from 2 to 10 years,
     subject to earlier termination upon the occurrence of certain
     contingencies, as defined. The rent due under each lease is the greater of
     base rent or percentage rent, as defined. Percentage rent applicable to
     room, food and beverage and other types of hotel sale varies by lease and
     is calculated by multiplying fixed percentages by the total amounts of such
     revenues over specified threshold amounts. Both the minimum rent and the
     revenue thresholds used in computing percentage rents are subject to annual
     adjustments based on increases in the United States Consumer Price Index
     and the Labor Index, as defined.

     The staff of the Securities & Exchange Commission issued Staff Accounting
     Bulletin 101 "Revenue Recognition" (SAB 101) in December 1999. SAB 101
     discusses factors to consider in determining when contingent revenue should
     be recognized during interim periods. The Company has adopted SAB 101
     effective January 1, 1999 and has therefore amended its previously filed
     Form 10-Q to reflect this change in accounting principle. As a result of
     the adoption of SAB 101, $138 million and $253 million of contingent rent
     previously recognized as revenue during the twelve weeks and twenty-four
     weeks ended June 18, 1999 has been deferred and recognized in subsequent
     periods of fiscal year 1999. As of December 31, 1999 all of the thresholds
     were reached and all contingent rent was recognized. SAB 101 has no impact
     on the Company's annual revenue recognition, net income or earnings per
     share. SAB 101 had no effect on prior year periods as the hotel leases were
     not in effect prior to the REIT Conversion.

3.   Rental Revenue

     The Company's 1999 revenue primarily represents the rental income from its
     leased hotels and is not comparable to 1998 hotel revenues which reflect
     gross sales generated by the properties. Also, in December 1998 the Company
     retroactively adopted Emerging Issues Task Force Issue No. 97-2,
     "Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician
     Management Entities and Certain Other Entities with Contractual Management
     Arrangements." The impact of the adoption of Issue 97-2 on the condensed
     consolidated financial statements for the twelve and twenty-four weeks
     ended June 19, 1998 was to increase both revenues and operating expenses by
     approximately $456 million and $922 million, respectively, with no impact
     on net income or earnings per share.

     The comparison of the 1999 quarterly results with 1998 is also affected by
     a change in the reporting period for the Company's hotels not managed by
     Marriott International, which resulted in the 1998 year-to-date historical
     results adjusted to exclude December 1997 and include May 1998 and the 1998
     second quarter adjusted to reflect March through May 1998. The 1999 results
     reflect comparable periods. The change in reporting was required as part of
     the REIT Conversion.

     The table below represents hotel sales for all periods presented.

                                      -10-

<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   Twelve Weeks Ended    Twenty-four Weeks Ended
                                                                 ---------------------   -----------------------
                                                                    June 18,  June 19,     June 18,     June 19,
                                                                      1999      1998         1999         1998
                                                                 -----------  --------   ----------     --------
                                                                      (in millions)            (in millions)
<S>                                                               <C>          <C>          <C>         <C>
Hotel Sales
           Rooms..................................................    $  672   $  511       $1,272      $1,020
           Food and beverage ......................................      310      222          578         444
           Other ..................................................       72       54          135         110
                                                                      ------   ------       ------      ------
                Total hotel sales.................................    $1,054   $  787       $1,985      $1,574
                                                                      ======   ======       ======      ======
</TABLE>

4.   Earnings Per Unit


     Basic earnings per unit is computed by dividing net income by the weighted
     average number of units. Diluted earnings per unit is computed by dividing
     net income as adjusted for potentially dilutive securities, by the weighted
     average number of units outstanding plus other potentially dilutive
     securities. No effect is shown for securities if they are anti-dilutive.


     A reconciliation of the number of units utilized for the calculation of
     diluted earnings per unit follows:

<TABLE>
<CAPTION>
                                                                         Twelve Weeks        Twenty-four Weeks
                                                                              Ended                 Ended
                                                                       ------------------    ------------------
                                                                       June 18,  June 19,    June 18,  June 19,
                                                                         1999     1998         1999      1998
                                                                       --------  --------    --------  --------
                                                                          (in millions)        (in millions)
<S>                                                                    <C>       <C>         <C>       <C>
Weighted average number of units outstanding .......................     292.5     216.1       292.0     215.9
Assuming distribution of units to Host Marriott Corporation for Host
  Marriott Corporation common shares granted under the
  comprehensive stock plan, less shares assumed purchased at average        --       4.2          --       4.3
Assuming distribution of common shares issuable for warrants, less
  Shares assumes purchased at average market price .................        --       0.1          --       0.1
Assuming conversion of minority operating partnership units
  issuable .........................................................        --        --          --        --
Assuming conversion of Convertible Preferred Securities ............        --      35.8          --      35.8
                                                                         -----     -----       -----     -----
Units utilized for the calculation of diluted earnings per unit ....     292.5     256.2       292.0     256.1
                                                                         =====     =====       =====     =====
</TABLE>

A reconciliation of net income to earnings used for the calculation of diluted
earnings per unit follows:

<TABLE>
<CAPTION>
                                                                        Twelve Weeks          Twenty-four Weeks
                                                                        ------------          -----------------
                                                                            Ended                   Ended
                                                                            -----                   -----
                                                                      June 18, June 19,       June 18, June 19,
                                                                        1999    1998            1999     1998
                                                                        ----    ----            ----     ----
                                                                        (in millions)           (in millions)
<S>                                                                   <C>      <C>              <C>     <C>
Net income (loss) ...................................................   $(42)   $ 66            $(98)   $ 96
Dividends of Convertible Preferred Securities, net of taxes .........    --        5             --       10
Minority interest expense, assuming conversion of OP units ..........    --      --              --       --
                                                                        ----    ----           ----     ----
Earnings used for the calculation of diluted earnings (loss) per unit   $(42)   $ 71       $(98)   $106
                                                                        ====    ====       ====    ====
</TABLE>

                                      -11-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

5.   Dividends and Distributions Payable

     On March 15, 1999 and June 15, 1999, the Board of Directors of Host Ended
     Marriott declared cash dividends of $0.21 per share of Host Marriott June
     Corporation common stock and corresponding distributions of $0.21 per 18,
     1999 unit of limited partnership interest ("OP Unit"). The first quarter
     dividend and distribution was paid on April 14, 1999 to shareholders and
     unitholders of record on March 31, 1999. The second quarter dividend and
     distribution was paid on July 14, 1999 to shareholders and unitholders of
     record on June 30, 1999.


     The 1998 earnings per share has been restated to reflect the impact of the
     stock portion of a special dividend totaling 11.5 million shares of common
     stock issued in February, 1999 as a result of the REIT Conversion.

6.   Acquisitions and Property Expansions

     On December 30, 1998, the Company acquired a portfolio of twelve luxury
     hotels and other assets from the Blackstone Group, a Delaware limited
     partnership, and a series of funds controlled by affiliates of Blackstone
     Real Estate Partners. The Company issued approximately 47.7 million OP
     Units and assumed debt and made cash payments of approximately $920 million
     and distributed 1.4 million of the shares of Crestline common stock to the
     Blackstone Real Estate Partners. Approximately 23.9 million OP Units were
     redeemable as of June 30, 1999.

     The Company also completed a 210-room extension of the Philadelphia
     Marriott in April 1999 at a cost of approximately $37 million.

7.   Disposition

     In February 1999, the Company sold the 479-room Minneapolis/Bloomington
     Marriott for $35 million and recorded a gain of $10 million, which was
     followed by the May 1999 sale of the 221-room Saddle Brook Marriott for $15
     million and resulting in a gain of $4 million.

8.   Debt Issuances and Refinancing

     In February 1999, the Company issued $300 million of 83/8% Series D senior
     notes due in 2006. The senior notes were used to refinance, or purchase,
     debt which had been acquired through the merger of certain partnerships or
     the purchase of hotel properties in connection with the REIT Conversion in
     December 1998.

     The Company has offered to exchange Series D Senior notes for Series E
     Senior notes on a one-for-one basis. The terms of the Series E Senior notes
     and the Series D Senior notes will be substantially identical except that
     the Series E Senior notes will be freely transferable by the holders. The
     offer to exchange expires at 5:00 p.m. on August 25, 1999.

     In April 1999, a subsidiary of the Company completed the refinancing of the
     $245 million mortgage on the New York Marriott Marquis, maturing June 2000.
     The Company was required to make a principal payment of $1.25 million on
     June 30, 1999. In connection with the refinancing, the Company renegotiated
     the management agreement and recognized an extraordinary gain of $13
     million on the forgiveness of accrued

                                      -12-

<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

     incentive management fees by the manager. This mortgage was subsequently
     refinanced as part of the $665 million financing agreement discussed in
     note 11.


9.   Geographic and Business Segment Information

     The Company operates one business segment, hotel ownership. The Company's
     hotels are primarily operated under the Marriott or Ritz-Carlton brands.
     Substantially all of the Company's revenues are earned through leases with
     Crestline. With respect to 1998, the allocation of taxes is not evaluated
     at the segment level or reflected in the following information because the
     Company does not believe the information is material to the readers of the
     financial statements.

     The Company's segmented revenues and income (loss) from continuing
     operations before income taxes are as follows (in millions):

<TABLE>
<CAPTION>
                                               Twelve Weeks Ended June 18, 1999
                                               --------------------------------
                                           Hotels  Corporate & Other   Consolidated
                                          -------- -----------------   ------------
<S>                                        <C>     <C>                 <C>
Revenues ...............................   $ 197         $   6             $ 203
Income (loss) from continuing operations
  before income taxes ..................     (40)          (15)              (55)
<CAPTION>
                                               Twelve Weeks Ended June 19, 1998
                                               --------------------------------
                                           Hotels   Corporate & Other   Consolidated
                                          -------- -----------------   ------------
<S>                                        <C>     <C>                 <C>
Revenues ...............................    $797          $ 52             $ 849
Income from continuing operations before
  income taxes .........................      82            23               105
<CAPTION>
                                            Twenty-four Weeks Ended June 18, 1999
                                            -------------------------------------
                                           Hotels   Corporate & Other  Consolidated
                                          -------- -----------------   ------------
<S>                                        <C>     <C>                 <C>
Revenues ...............................   $ 386         $   9             $ 395
Income (loss) from continuing operations
  before income taxes ..................     (79)          (32)             (111)
<CAPTION>
                                            Twenty-four Weeks Ended June 19, 1998
                                            -------------------------------------
                                           Hotels  Corporate & Other   Consolidated
                                          -------- -----------------   ------------
<S>                                       <C>      <C>                 <C>
Revenues ...............................   $1,598        $  56           $ 1,654
Income from continuing operations before
  income taxes .........................      153           --               153
</TABLE>

     As of June 18, 1999, the Company's foreign operations consisted of four
     hotel properties located in Canada. There were no intercompany sales
     between the properties and the Company. The following table presents rental
     revenues in 1999 and hotel revenues in 1998 for each of the geographical
     areas in which the Company owns hotels (in millions):

                                      -13-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                             Twelve Weeks Ended            Twenty-four Weeks Ended
                                                          ------------------------        -------------------------
                                                          June 18,        June 19,        June 18,        June 19,
                                                            1999            1998            1999            1998
                                                          --------        --------        --------        --------
<S>                                                        <C>             <C>             <C>             <C>
      United States..................................      $  199          $  825          $  389          $1,604
      International..................................           4              24               6              50
                                                           ------          -------         ------          ------
          Total......................................      $  203          $  849          $  395          $1,654
                                                           ======          ======          ======          ======
</TABLE>

10.  Comprehensive Income

     The Company's other comprehensive income consists of foreign currency
     translation adjustments and the right to receive up to 1.4 million shares
     of Host Marriott Services Corporation's common stock or an equivalent cash
     value subsequent to the exercise of the options held by certain former and
     current employees of Marriott International at Host Marriott Service
     Corporation's option. For the twelve and twenty-four weeks ended June 18,
     1999, comprehensive income totaled $97 million and $154 million,
     respectively. Comprehensive income was $67 million and $97 million for the
     twelve and twenty-four weeks ended June 18, 1998. As of June 18, 1999 and
     December 31, 1998 the Company's accumulated other comprehensive loss was
     approximately $3 million and $4 million, respectively.

11.  Subsequent Events

     In July 1999, the Company entered into a financing agreement pursuant to
     which it borrowed $665 million due 2009 at a fixed interest rate of 7.47%.
     The New York Marriott Marquis as well as seven other hotels serve as
     collateral. The proceeds from this financing were used to refinance
     existing mortgage indebtedness maturing at various times through 2000.

     In July 1999, the Company sold 4.0 million shares of 10% Class A cumulative
     redeemable preferred stock with a $0.01 par value. Holders of the stock are
     entitled to receive cumulative cash dividends at a rate of 10% per annum of
     the $25.00 per share liquidation preference. Dividends are payable
     quarterly in arrears commencing October 15, 1999. After August 3, 2004 the
     Company has the option to redeem the Class A preferred stock for $25.00 per
     share, plus accrued and unpaid dividends to the date of redemption. The
     Class A preferred stock ranks senior to the common stock, and the
     authorized Series A Junior Participating preferred stock. The Class A
     preferred stockholders generally have no voting rights.

     In June 1999, the Company acquired by merger Timewell Group, L.P. and
     Timeport, L.P. which each own limited partnership interests in the
     partnership that owns the New York Marriott Marquis. As part of the merger,
     the general partners of Timewell Group, L.P. and Timeport, L.P. received
     345,559 and 240,218 cumulative redeemable preferred OP Units, respectively.
     The preferred OP Units are convertible into OP Units on a one-for-one
     basis, subject to certain adjustments, at any time beginning one year after
     the merger at the option of the holders. At any time beginning two years
     after the merger, the Company can redeem the preferred OP units for OP
     Units or cash.

     In June 1999, the Company refinanced the debt on the San Diego Marriott
     Hotel and Marina. The mortgage is for $195 million for a term of 10 years
     at a rate of 8.45%. In addition, the Company issued $23 million of mortgage
     debt on the Philadelphia Marriott in July 1999 at an interest rate of
     approximately 8.6%, maturing 2009.

12.  Summarized Lease Pool Financial Statements

                                      -14-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

As discussed in Note 2, as of June 18, 1999, almost all the properties of the
Company and its subsidiaries were leased to Crestline Capital Corporation and
managed by Marriott International, Inc. In conjunction with these leases,
Crestline and certain of its subsidiaries entered into limited guarantees of the
lease obligations of each lessee. The full-service hotel leases are grouped into
four lease pools, with Crestline's guarantee limited to the greater of 10% of
the aggregate rent payable for the preceding year or 10% of the aggregate rent
payable under all leases in the respective pool. Additionally, the lessee's
obligation under each lease agreement is guaranteed by all other lessees in the
respective lease pool. As a result, the Company believes that the operating
results of each full-service lease pool may be material to the Company's
financial statements. Financial information of certain pools related to the
sublease agreements for limited service properties are not presented, as the
Company believes they are not material to the Company's financial statements.
Financial information of Crestline may be found in its quarterly and annual
filings with the Securities and Exchange Commission. Further information
regarding these leases and Crestline's limited guarantees may be found in the
Company's annual report on Form 10-K for the fiscal year ended December 31,
1998. The results of operations for the twelve and twenty-four weeks ended June
18, 1999 and summarized balance sheet data as of June 18, 1999 of the lease
pools in which the Company's hotels are organized are as follows (in millions):



<TABLE>
<CAPTION>
                                                              Twelve Weeks Ended June 18, 1999
                                                              --------------------------------
                                                   Pool 1     Pool 2      Pool 3     Pool 4      Combined
                                                   ------     ------      ------     ------      --------
<S>                                                <C>        <C>         <C>        <C>         <C>
Hotel Sales
     Rooms.....................................     $ 144       $ 157      $ 141       $ 145      $ 587
     Food and beverage.........................        68          76         67          81        292
     Other.....................................        16          16         19          19         70
                                                    -----       -----      -----       -----      -----
          Total hotel sales....................        228         249       227         245        949
Operating Costs and Expenses
     Rooms.....................................        33          36         34          31        134
     Food and beverage.........................        51          55         47          56        209
     Other.....................................        57          55         57          55        224
     Management fees...........................        11          16         10          17         54
     Lease expense.............................        72          83         76          83        314
                                                    -----       -----      -----       -----      -----
          Total operating expenses.............       224         245        224         242        935
                                                    -----       -----      -----       -----      -----
Operating Profit...............................         4           4          3           3         14
Corporate and Interest Expenses................        --          (1)        --          --         (1)
                                                    -----       -----      -----       -----      -----
      Income before taxes......................         4           3          3           3         13
      Income taxes.............................        (2)         (1)        (1)         --         (4)
                                                    -----       -----      -----       -----      -----
          Net Income...........................     $   2       $   2      $   2       $   3      $   9
                                                    =====       =====      =====       =====      =====
</TABLE>


<TABLE>
<CAPTION>
                                                                 Twenty-four Weeks Ended June 18, 1999
                                                                 -------------------------------------
                                                         Pool 1     Pool 2      Pool 3     Pool 4      Combined
                                                         ------     ------      ------     ------      --------
<S>                                                       <C>         <C>        <C>         <C>       <C>
      Hotel Sales
           Rooms.....................................     $ 273       $ 294      $ 268       $ 273     $ 1,108
           Food and beverage.........................       127         137        128         153         545
           Other.....................................        30          29         38          34         131
                                                          -----       -----      -----       -----     -------
                Total hotel sales....................        430         460       434         460       1,784
</TABLE>

                                      -15-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

<TABLE>
<S>                                                       <C>         <C>        <C>         <C>        <C>
      Operating Costs and Expenses
           Rooms.....................................        64          68         63          58         253
           Food and beverage.........................        97         102         91         104         394
           Other.....................................       110         107        107         103         427
           Management fees...........................        20          30         21          33         104
           Lease expense.............................       133         147        146         157         583
                                                          -----       -----      -----       -----     -------
                Total operating expenses.............       424         454        428         455       1,761
                                                          -----       -----      -----       -----     -------
      Operating Profit...............................         6           6          6           5          23
      Corporate and Interest Expenses................        (1)         (1)        (1)         (1)         (4)
                                                          -----       -----      -----       -----     -------
            Income before taxes......................         5           5          5           4          19
            Income taxes.............................        (2)         (2)        (2)         (1)         (7)
                                                          -----       -----      -----       -----     -------
                Net Income...........................     $   3       $   3      $   3       $   3     $    12
                                                          =====       =====      =====       =====     =======
</TABLE>


<TABLE>
<CAPTION>
                                                                          As of June 18, 1999
                                                                          -------------------
                                                         Pool 1     Pool 2      Pool 3     Pool 4      Combined
                                                         ------     ------      ------     ------      --------
<S>                                                      <C>        <C>         <C>        <C>         <C>
      Assets.........................................    $  49       $  43      $  46       $  46       $  184
      Liabilities....................................       46          40         43          43          172
      Equity.........................................        3           3          3           3           12
</TABLE>



13.  Supplemental Guarantor and Non-Guarantor Subsidiary Information

     All subsidiaries of the operating partnership guarantee the Company's
     senior notes except those among the twenty full service hotels listed below
     and HMH HPT Residence Inn, LLC and HMH HPT Courtyard, LLC, the lessees of
     the Residence Inn and Courtyard properties, respectively. The separate
     financial statements of each guaranteeing subsidiary (each, a "Guarantor
     Subsidiary") are not presented because management has concluded that such
     financial statements are not material to investors. The guarantee of each
     Guarantor Subsidiary is full and unconditional and joint and several and
     each Guarantor Subsidiary is a wholly owned subsidiary of the Company. The
     non-guarantor subsidiaries (the "Non-Guarantor Subsidiaries") own the
     following full-service hotels: the Albany Marriott; Atlanta Marriott
     Marquis; Grand Hyatt, Atlanta; Harbor Beach Resort; Hartford Marriott;
     Hyatt Regency, Cambridge; Hyatt Regency, Reston; Manhattan Beach Marriott;
     Minneapolis Southwest Marriott; New York Marriott Marquis; Ontario Airport
     Marriott; Pittsburgh City Center Marriott; The Ritz-Carlton, Amelia Island;
     San Diego Marriott Hotel and Marina; San Diego Mission Valley; Swissotel,
     Atlanta; Swissotel, Boston; Swissotel, Chicago; The Drake (Swissotel) New
     York; and the Oklahoma City Waterford Marriott.

     The following condensed combined consolidating information sets forth the
     financial position as of June 18, 1999 and December 31, 1998 and results of
     operations and cash flows for the twelve weeks ended June 18, 1999 and June
     19, 1998, respectively, and cash flows for the twenty-four weeks ended June
     18, 1999 and June 19, 1998 of the parent, Guarantor Subsidiaries and the
     Non-Guarantor Subsidiaries.

                                      -16-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

          Supplemental Condensed Combined Consolidating Balance Sheets
                                  (in millions)

                                  June 18, 1999

<TABLE>
<CAPTION>
                                                                 Guarantor    Non-Guarantor
                                                      Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                     --------- ------------- -------------- -------------- --------------
<S>                                                  <C>          <C>            <C>           <C>             <C>
      Property and equipment, net..................  $  1,223     $ 3,784        $ 2,207       $     --        $ 7,214
      Investments in affiliate.....................     1,366          --             --         (1,321)            45
      Notes and other receivables..................       817          54             19           (671)           219
      Other assets.................................       144         194            189            (27)           500
      Cash and cash equivalents....................       157         122             31             --            310
                                                      -------     -------        -------       --------        -------
         Total assets..............................   $ 3,707     $ 4,154        $ 2,446       $ (2,019)       $ 8,288
                                                      =======     =======        =======       ========        =======

      Debt.........................................   $ 1,599     $ 2,859        $ 1,128       $   (354)       $ 5,232
      Convertible debt obligations to Host Marriott       567          --             --             --            567
      Deferred income taxes........................        51          38              7             --             96
      Other liabilities............................       123         710            313           (323)           823
                                                      -------     -------        -------       ---------       -------
         Total liabilities.........................     2,340       3,607          1,448           (677)         6,718

      Minority interests...........................        15          56             71             --            142
      Limited partner interest of third parties at
       redemption value............................       783          --             --             --            783
      Owner's capital..............................       569         491            927         (1,342)           645
                                                      -------     -------        -------       ---------       -------
         Total liabilities and owner's capital.....   $ 3,707     $ 4,154        $ 2,446       $ (2,019)       $ 8,288
                                                      =======     =======        =======       ========        =======
</TABLE>


                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

                                December 31, 1998

<TABLE>
<CAPTION>
                                                                 Guarantor    Non-Guarantor
                                                      Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                     -------- -------------- -------------- -------------- --------------
<S>                                                  <C>      <C>            <C>            <C>            <C>
      Property and equipment, net..................   $ 1,172     $ 3,796        $ 2,233        $    --        $ 7,201
      Investments in affiliate.....................     1,038          --             --         (1,005)            33
      Notes and other receivables..................       782          52             19           (650)           203
      Other assets.................................       259         145            141           (156)           389
      Cash and cash equivalents....................       330          91             15             --            436
                                                      -------     -------        -------        -------         ------
         Total assets..............................   $ 3,581     $ 4,084        $ 2,408        $(1,811)       $ 8,262
                                                      =======     =======        =======        =======        =======

      Debt.........................................   $ 1,438     $ 2,837        $ 1,183        $  (327)       $ 5,131
      Convertible debt obligation to Host Marriott.       567          --             --             --            567
      Deferred income taxes........................        51          39              7             --             97
      Other liabilities............................        97         600            252           (285)           664
                                                      -------     -------        -------        -------        -------
         Total liabilities.........................     2,153       3,476          1,442           (612)         6,459

      Minority interests...........................        15          56             76             --            147
      Limited partner interest of third parties at
       redemption value............................       892          --             --             --            892
      Owner's capital..............................       521         552            890         (1,199)           764
                                                      -------     -------        -------        -------        -------
       Total liabilities and owner's capital.......   $ 3,581     $ 4,084        $ 2,408        $(1,811)       $ 8,262
                                                      =======     =======        =======        =======        =======
</TABLE>


                                      -17-
<PAGE>

                               HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

            Supplemental Condensed Combined Statements of Operations
                                  (in millions)

                        Twelve Weeks Ended June 18, 1999

<TABLE>
<CAPTION>
                                                                                  Non-
                                                                 Guarantor      Guarantor
                                                      Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                     -------- -------------- -------------- -------------- --------------
<S>                                                  <C>      <C>            <C>            <C>            <C>
      REVENUES.....................................   $    48     $   104        $    64        $   (13)       $   203
      Depreciation.................................       (15)        (35)           (17)            --            (67)
      Property-level expenses......................       (11)        (23)           (28)            --            (62)
      Hotel operating expenses.....................        --          --             --             --             --
      Minority interest............................       (17)         (4)            (1)            15             (7)
      Interest expense.............................       (27)        (55)           (25)            (2)          (109)
      Dividends on convertible preferred securities        --          --             --             --             --
      Corporate expenses...........................        (2)         (5)            (1)            --             (8)
      Other expenses...............................        (3)         (1)            (1)            --             (5)
                                                      --------    --------       --------       -------        -------
      Loss before extraordinary gain...............       (27)        (19)            (9)            --            (55)
      Extraordinary item-gain on forgiveness of debt       --          --             13             --             13
                                                      -------     -------        -------        -------        -------
      NET INCOME (LOSS)............................   $   (27)    $   (19)       $     4        $    --        $   (42)
                                                      ========    =======        =======        =======        =======
</TABLE>
                        Twelve Weeks Ended June 19, 1998

<TABLE>
<CAPTION>
                                                                                  Non-
                                                                 Guarantor      Guarantor
                                                      Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                     -------- -------------- -------------- -------------- --------------
<S>                                                  <C>      <C>            <C>            <C>            <C>
      REVENUES.....................................   $   309     $   473        $    56           $ 11        $   849
      Depreciation.................................       (25)        (30)            (5)            --            (60)
      Property-level expenses......................       (30)        (43)            13             --            (60)
      Hotel operating expenses.....................      (192)       (279)           (35)            --           (506)
      Minority interest............................       (15)          7              2             (8)           (14)
      Interest expense.............................        (2)        (48)           (23)            (3)           (76)
      Dividends on convertible preferred securities        (8)         --             --             --             (8)
      Corporate expenses...........................        (2)         (5)            (2)             -             (9)
      REIT Conversion expenses.....................        (6)         --             --             --             (6)
      Other expenses...............................        (4)         (1)            --             --             (5)
                                                      -------     -------        -------        -------        -------
      Income from continuing operations before             25          74              6             --            105
      taxes........................................
      Provision for income taxes...................       (10)        (31)            (2)            --            (43)
                                                      -------     -------        -------        -------        -------
      Income from continuing operations............        15          43              4             --             62
      Income from discontinued operations..........         4          --             --             --              4
                                                      -------     -------        -------        -------        -------
      NET INCOME...................................   $    19     $    43        $     4        $    --        $    66
                                                      =======     =======        =======        =======        =======
</TABLE>

                                      -18-
<PAGE>

                              HOST MARRIOTT, L.P.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

           Supplemental Condensed Combined Statements of Operations
                                 (in millions)

                     Twenty-four Weeks Ended June 18, 1999

<TABLE>
<CAPTION>
                                                                 Guarantor    Non-Guarantor
                                                      Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                     --------  ------------   ------------   ------------   ------------
<S>                                                   <C>         <C>            <C>            <C>            <C>
     REVENUES.....................................   $    87     $   205        $   118        $   (15)       $   395
     Depreciation.................................       (28)        (70)           (35)            --           (133)
     Property-level expenses......................       (21)        (45)           (54)            --           (120)
     Hotel operating expenses.....................        --          --             --             --             --
     Minority interest............................       (18)         (7)            (1)            15            (11)
     Interest expense.............................       (68)       (103)           (46)            --           (217)
     Dividends on convertible preferred securities        --          --             --             --             --
     Corporate expenses...........................        (3)         (9)            (4)            --            (16)
     Other expenses...............................        (7)         (1)            (1)            --             (9)
                                                     -------     -------        -------        -------        -------
     Loss before extraordinary gain...............       (58)        (30)           (23)            --           (111)
     Extraordinary item-gain on forgiveness of
     debt.........................................        --          --             13             --             13
                                                     -------     -------        -------        -------        -------
     NET LOSS.....................................   $   (58)    $   (30)       $   (10)       $    --        $   (98)
                                                     =======-    =======        =======        =======        =======
</TABLE>


                      Twenty-four Weeks Ended June 19, 1998
<TABLE>
<CAPTION>
                                                                 Guarantor    Non-Guarantor
                                                      Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                     --------  ------------   -------------  ------------   ------------
<S>                                                   <C>         <C>            <C>           <C>             <C>
     REVENUES.....................................   $   558     $   851        $   250       $     (5)       $ 1,654
     Depreciation.................................       (39)        (57)           (17)            --           (113)
     Property-level expenses......................       (41)        (63)           (18)            --           (122)
     Hotel operating expenses.....................      (344)       (530)          (156)            --         (1,030)
     Minority interest............................       (27)         (6)            (2)             5            (30)
     Interest expense.............................       (21)        (94)           (37)            --           (152)
     Dividends on convertible preferred securities       (17)         --             --             --            (17)
     Corporate expenses...........................        (5)        (11)            (5)             -            (21)
     REIT Conversion expenses.....................        (6)         --             --             --             (6)
     Other expenses...............................        (9)         (1)            --             --            (10)
                                                     --------    -------        -------        -------        -------
     Income from continuing operations before
     taxes........................................        49          89             15             --            153

     Provision for income taxes...................       (20)        (37)            (6)            --            (63)
                                                     -------     -------        -------        -------        -------
     Income from continuing operations............        29          52              9             --             90
     Income from discontinued operations..........         6          --             --             --              6
                                                     -------     -------        -------        -------        -------
     NET INCOME...................................   $    35     $    52        $     9        $    --        $    96
                                                     =======     =======        =======        =======        =======
</TABLE>

                                      -19-
<PAGE>

                              HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

            Supplemental Condensed Combined Statements of Cash Flows
                                  (in millions)

                      Twenty-four Weeks Ended June 18, 1999

<TABLE>
<CAPTION>
                                                                              Guarantor     Non-Guarantor
                                                                  Parent    Subsidiaries    Subsidiaries   Consolidated
                                                                ---------  --------------  -------------- --------------
<S>                                                              <C>           <C>             <C>            <C>
     OPERATING ACTIVITIES
     Cash (used in) from operations..........................   $     (5)     $     116       $    --        $    111
                                                                --------      ---------       -------        --------

     INVESTING ACTIVITIES
     Cash received from sales of assets......................          1             34            --              35
     Capital expenditures....................................        (49)          (107)          (21)           (177)
     Acquisitions............................................         --             --            (4)             (4)
     Other...................................................        (17)            --            --             (17)
                                                                --------      ---------       -------        --------

     Cash used in investing activities ......................        (65)           (73)          (25)           (163)
                                                                --------      ---------       -------        --------

     FINANCING ACTIVITIES
     Repayment of debt.......................................        (25)          (256)          (65)           (346)
     Issuances of debt.......................................         (2)           256           159             413
     Transfers to/from Parent................................         65            (12)          (53)             --
     Dividends...............................................       (130)            --            --            (130)
     Repurchase of common stock..............................         (3)            --            --              (3)
     Other...................................................         (8)            --            --              (8)
                                                                --------      ---------       -------        --------

     Cash (used in) from financing activities................       (103)           (12)           41             (74)
                                                                --------      ---------       -------        --------

     INCREASE (DECREASE) IN CASH AND CASH
        EQUIVALENTS..........................................   $   (173)     $      31       $    16        $   (126)
                                                                ========      =========       =======        ========
</TABLE>

                                      -20-
<PAGE>

                              HOST MARRIOTT, L.P.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)

                      Twenty-four Weeks Ended June 19, 1998

<TABLE>
<CAPTION>
                                                                              Guarantor     Non-Guarantor
                                                                  Parent    Subsidiaries    Subsidiaries   Consolidated
                                                                ---------   ------------    -------------  ------------
<S>                                                              <C>           <C>             <C>            <C>
     OPERATING ACTIVITIES
     Cash from continuing operations.........................   $     43      $   144         $    16        $   203
     Cash from discontinued operations.......................          3           --              --              3
                                                                --------      -------         -------        -------
     Cash from operations....................................         46          144              16            206
                                                                --------      -------         -------        -------

     INVESTING ACTIVITIES
     Cash received from sales of assets......................        209           --              --            209
     Capital expenditures....................................        (28)         (62)            (19)          (109)
     Acquisitions............................................       (229)         (15)           (114)          (358)
     Sales of short-term marketable securities, net..........        308           --              --            308
     Other...................................................         (7)          --              --             (7)
                                                                --------      -------         -------        --------
     Cash from (used in) investing activities from
        continuing operations................................        253          (77)           (133)            43
     Cash used in investing activities from discontinued
        Operations...........................................         (2)          --              --             (2)
                                                                --------      -------         -------        -------
     Cash from (used in) investing activities ...............        251          (77)           (133)            41
                                                                --------      -------         -------        -------

     FINANCING ACTIVITIES
     Repayment of debt.......................................        (55)         (10)             (2)           (67)
     Issuances of debt.......................................          5           --              --              5
     Transfers to/from Parent................................        (52)         (51)            103             --
     Other...................................................        (31)          --              --            (31)
                                                                --------      -------         -------        -------
     Cash (used in) from financing activities from
        continuing operations................................       (133)         (61)            101            (93)
     Cash used in financing activities from discontinued
        operations...........................................       (150)          --              --           (150)
                                                                --------      -------         -------        -------
     Cash (used in) from financing activities................       (283)         (61)            101           (243)
                                                                --------      -------         -------        --------

     INCREASE IN CASH AND CASH EQUIVALENTS...................   $     14      $     6         $   (16)       $     4
                                                                ========      =======         =======        =======
</TABLE>

                                      -21-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     Forward-looking Statements
     --------------------------

     Certain matters discussed herein are forward-looking statements. Certain,
     but not necessarily all, of such forward-looking statements can be
     identified by the use of forward-looking terminology, such as "believes,"
     "expects," "may," "will," "should," "estimates," or "anticipates," or the
     negative thereof or other variations thereof or comparable terminology. All
     forward-looking statements involve known and unknown risks, uncertainties
     and other factors which may cause our 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. Although we believe the expectations
     reflected in such forward-looking statements are based upon reasonable
     assumptions, we can give no assurance that our expectations will be
     attained or that any deviations will not be material. We undertake 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.

     Results of Operations
     ---------------------


     Revenues. Our historical revenues have primarily represented gross
     property-level sales from hotels, net gains on property transactions,
     interest income and equity in earnings of affiliates. As of January 1,
     1999, we lease substantially all of our hotels to subsidiaries of Crestline
     Capital Corporation. As a result of these leases, we no longer record
     property-level revenues and expenses, rather we recognize rental income on
     the leases. Also, as discussed in Note 2, the Company retroactively adopted
     SAB 101 as of the beginning of its fiscal year, and restated its results of
     operations for the first three quarters of 1999 to defer recognition of
     rental income which is contingent upon annual thresholds until such period
     as those thresholds are met. SAB 101 has no impact on the Company's annual
     revenue recognition, net income or earnings per unit. Thus, 1999 revenues
     and expenses are not comparable with prior periods. Note 3 to the financial
     statements presents a table comparing gross hotel sales for all periods
     presented to facilitate an investor's understanding of the operation of our
     properties. The comparison of the 1999 quarterly results with 1998 is also
     affected by a change in the reporting period for our hotels not managed by
     Marriott International, which resulted in the 1998 year-to-date historical
     results adjusted to exclude December 1997 and include May 1998 and the 1998
     second quarter adjusted to reflect March through May 1998. The 1999 results
     reflect comparable periods. The change in reporting was required as part of
     the REIT conversion.


     Year-to-date results for 1999 were driven by the addition of 36 properties
     in 1998. The increase in hotel sales reflects growth in room revenues
     generated per available room or REVPAR. For comparable properties, REVPAR
     increased 3.7% to $120.85 for the second quarter of 1999. Year-to-date
     REVPAR increased 4% to $120.67. On a comparable basis, average room rates
     increased approximately 2% and 3% for the second quarter and year-to-date,
     respectively, while average occupancy increased one percent for both
     periods.

     Interest income decreased as the result of a lower level of cash and
     marketable securities held during the first half of 1999 compared to the
     first half of 1998.

     The net gain on property transactions for 1999 primarily resulted from the
     $10 million gain on the sale of the 479-room Minneapolis/Bloomington
     Marriott for approximately $35 million and the $4 million gain on the sale
     of the 221-room Saddle Brook Marriott for approximately $15 million.

                                      -22-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     Expenses. As discussed above, hotel revenues and hotel operating costs are
     not comparable with the prior year. The lessee pays certain property-level
     costs including management fees and we receive a rent payment, which is net
     of those costs. Property-level costs which are comparable, including
     depreciation, property taxes, insurance, ground and equipment rent
     increased 8% to $129 million for the second quarter 1999 versus the second
     quarter 1998 and increased $18 million or 8% to $253 million year-to-date,
     primarily reflecting the depreciation from the 36 properties acquired
     during 1998.


     Minority Interest. Minority interest expense decreased $7 million to $7
     million for the second quarter of 1999 and decreased $19 million to $11
     million year-to-date, primarily reflecting the impact of the consolidation
     of partnerships which occurred in connection with the REIT conversion.


     Interest Expense. Interest expense increased 43% to $109 million in the
     second quarter of 1999 and increased 43% to $217 million year-to-date,
     primarily due to the issuance of senior notes, establishment of a new
     credit facility, interest expense on the convertible debt obligation to
     Host Marriott and additional mortgage debt on properties acquired in 1998.

     Dividends on Convertible Preferred Securities. The dividends on Convertible
     Preferred Securities reflect the dividends accrued for the first half of
     fiscal year 1998 on the $550 million in 63/4% Convertible Preferred
     Securities. The Convertible Preferred Securities are held by the REIT. The
     dividends paid by the REIT are supported by the $567 million debt
     obligation to Host Marriott on the balance sheet. The Operating Partnership
     incurs interest expense on the debt obligation, and, therefore, no
     dividends are included in the current period statement of operations.

     Corporate Expenses. Corporate expenses decreased $1 million to $8 million
     for the second quarter of 1999 and decreased $5 million to $16 million
     year-to-date, resulting primarily from the timing of certain project costs
     not incurred in 1999 and lower compensation costs.

     Income from Discontinued Operations. Income from discontinued operations
     represents the senior living communities business' results of operations
     for the second quarter of 1998 and year-to-date as restated for the
     spin-off of Crestline.

     Extraordinary Gain. In connection with the refinancing of the mortgage and
     the renegotiation of the management agreement on the New York Marriott
     Marquis, we recognized an extraordinary gain of $13 million on the
     forgiveness of debt for accrued incentive management fees by the manager.


     Net Income (Loss). Our net loss was $42 million for the second quarter of
     1999 compared to net income of $66 million in 1998. For year-to-date 1999
     our net loss was $98 million compared to net income of $96 million in 1998.


     FFO and EBITDA
     --------------

     We consider Funds From Operations or FFO as defined by the National
     Association of Real Estate Investment Trusts and our consolidated earnings
     before interest expense, income taxes, depreciation, amortization and other
     non-cash items or EBITDA to be indicative measures of our operating
     performance due to the significance of our long-lived assets and because
     such data is considered useful by the investment community to better
     understand our results, and can be used to measure our ability to service
     debt, fund capital expenditures and expand our business. However, such
     information should not

                                      -23-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     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 presentation.

     Management believes that FFO is a meaningful disclosure that will help the
     investment community to better understand our financial performance,
     including enabling its shareholders and analysts to more easily compare our
     performance to other Real Estate Investment Trusts. FFO increased $37
     million, or 32%, to $152 million in the second quarter of 1999 over the
     second quarter of 1998. However, FFO as presented may not be comparable to
     amounts calculated by other companies. For periods prior to 1999, the FFO
     disclosed represents comparative FFO (FFO plus deferred tax expense). The
     following is a reconciliation of income from continuing operations to FFO
     (in millions):

<TABLE>
<CAPTION>
                                                                  Twelve Weeks Ended          Twenty-four Weeks Ended
                                                                 ---------------------        -----------------------
                                                                June 18,      June 19,       June 18,      June 19,
                                                                  1999          1998           1999          1998
                                                                 -------       -------        -------       -----
<S>                                                              <C>           <C>            <C>           <C>
     Income (loss) from continuing operations..............     $   (55)      $    62        $  (111)      $    90
     Effect of SAB 101.....................................         138            --            253            --
     Depreciation and amortization.........................          67            62            135           114
     Other real estate activities..........................          (5)          (51)           (16)          (52)
     Partnership adjustments...............................           7            (2)             8            (7)
     REIT conversion expenses..............................          --             6             --             6
     Deferred taxes........................................          --            29             --            39
     Discontinued operations...............................          --             9             --            16
                                                                -------       -------        -------       -------
        Funds From Operations..............................     $   152       $   115        $   269       $   206
                                                                =======       =======        =======       =======
</TABLE>

     EBITDA increased $47 million, or 23%, to $255 million in the second quarter
     of 1999 and $70 million, or 17%, to $481 million year-to-date. Hotel EBITDA
     increased $41 million, or 19%, to $263 million in the second quarter of
     1999 and $67 million or 16% to $493 million year-to-date, reflecting
     comparable hotel EBITDA growth, as well as incremental EBITDA from 1998
     acquisitions offset by amounts representing hotel sales which are retained
     by Crestline.

     The following is a reconciliation of EBITDA to income from continuing
     operations (in millions):

<TABLE>
<CAPTION>
                                                                  Twelve Weeks Ended         Twenty-four Weeks Ended
                                                                ----------------------       -----------------------
                                                                June 18,      June 19,       June 18,      June 19,
                                                                  1999          1998           1999          1998
                                                                 -------       -------        -------       -----
<S>                                                              <C>           <C>            <C>           <C>
     EBITDA................................................     $   255       $   208        $   481       $   411
     Effect of SAB 101.....................................        (138)           --           (253)           --
     Interest expense......................................        (109)          (76)          (217)         (152)
     Dividends on Convertible Preferred Securities.........          --            (8)            --           (17)
     Depreciation and amortization.........................         (67)          (62)          (135)         (114)
     Minority interest expense.............................          (7)          (14)           (11)          (30)
     Income taxes..........................................          --           (43)            --           (63)
     Other non-cash charges, net...........................          11            57             24            55
                                                                -------       -------        -------       -------
       Income (loss) from continuing operations............     $   (55)      $    62        $  (111)      $    90
                                                                =======       =======        =======       =======
</TABLE>

     Our interest coverage, defined as EBITDA divided by cash interest expense,
     was 2.7 times for the 1999 second quarter, 3.0 times for the 1998 second
     quarter and 2.5 times for full year 1998. The

                                      -24-
<PAGE>

                              HOST MARRIOTT, L.P.
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 RESULTS OF OPERATIONS AND FINANCIAL CONDITION


     deficiency of earnings to fixed charges was $100 million for the second
     quarter of 1999 and the ratio of earnings to fixed charges was 2.0 to 1.0
     for the second quarter of 1998.

     Cash Flows and Financial Condition
     ----------------------------------

     We reported a decrease in cash and cash equivalents of $126 million during
     the twenty-four weeks ended June 18, 1999. Cash from continuing operations
     was $111 million through the second quarter of 1999 and $203 million
     through the second quarter of 1998. The $92 million decrease in cash from
     continuing operations resulted principally from an increase in rent
     receivable resulting from the timing of the receipt of cash payments. There
     was no cash activity related to discontinued operations for the second
     quarter of 1999; however, cash from discontinued operations totaled $3
     million through the second quarter of 1998.

     Cash used in investing activities from continuing operations was $163
     million through the second quarter of 1999. Cash from investing activities
     from continuing operations was $43 million through the second quarter of
     1998. Cash used in investing activities through the second quarter of 1999
     includes capital expenditures of $177 million, mostly related to renewals
     and replacements on existing properties and development projects. In
     addition, we generated $35 million of cash from the net sale of assets,
     primarily the Minneapolis/Bloomington property. There was no cash related
     to investing activities from discontinued operations through the second
     quarter 1999; however, cash used in investing activities from discontinued
     operations totaled $2 million year-to-date 1998. Property and equipment
     balances include $145 million and $78 million for construction in progress
     as of June 18, 1999 and December 31, 1998, respectively. The current
     balance primarily relates to properties in Tampa, Orlando, Memphis and
     various other expansion and development projects.

     Cash used in financing activities from continuing operations was $74
     million through the second quarter of 1999 and $93 million through the
     second quarter of 1998. Cash used in financing activities for 1999 includes
     $323 million in prepayment of debt, offset by $413 million in debt
     issuances for 1999. Both financing activities were related to our February
     1999 issuance of $300 million of 83/8% Series D Senior notes due in 2006
     and the refinancing of the New York Marriott Marquis.

     The Series D Senior notes were used to refinance, or purchase, debt which
     had been assumed through the merger of certain partnerships or the purchase
     of hotel properties in connection with the REIT conversion in December
     1998. In August 1999, we intend to exchange Series D Senior notes for
     Series E Senior notes on a one-for-one basis. The terms of the Series E
     Senior notes and the Series D Senior notes will be substantially identical
     except that the Series E Senior notes are freely transferable by the
     holders.

     In April 1999, a subsidiary completed the refinancing of the $245 million
     mortgage on the New York Marriott Marquis, maturing June 2000. We
     subsequently refinanced this mortgage as part of the $665 financing
     agreement completed in the third quarter of 1999.


     Cash used in financing activities also reflects $73 million in dividend
     payments for a special dividend declared in December 1998 and paid in
     February 1999. In addition, on March 15, 1999 and June 15, 1999, the Board
     of Directors declared regular cash distributions of $0.21 per OP unit. The
     first quarter distribution was paid on April 14, 1999. The second quarter
     distribution was paid on July 14, 1999 to unitholders and is not reflected
     in the cash flow statement.


                                      -25-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     There was no cash related to financing activities from discontinued
     operations through the second quarter of 1999; however, cash used in
     financing activities from discontinued operations totaled $150 million
     through the second quarter of 1998.

     In July 1999, the Company sold 4.0 million shares of 10% Class A Cumulative
     Redeemable Preferred Stock with a $0.01 par value. Holders of the stock are
     entitled to receive cumulative cash dividends at a rate of 10% per annum of
     the $25.00 per share liquidation preference. Dividends are payable
     quarterly in arrears on October 15, 1999. After August 3, 2004 we have the
     option to redeem the Class A preferred stock for $25.00 per share, plus
     accrued and unpaid dividends to the date of redemption. The Class A
     preferred stock ranks prior to the common stock and the authorized Series A
     Junior Participating preferred stock. The Class A preferred stockholders
     generally have no voting rights.

     We also entered into a financing agreement for $665 million due 2009 at a
     fixed rate of 7.47%. The proceeds from this financing were used to
     refinance existing mortgage indebtedness maturing at various times through
     2000.

     In June 1999, we acquired by merger Timewell Group, L.P. and Timeport,
     L.P., which each own limited partnership interests in the partnership that
     owns the New York Marriott Marquis. As part of the merger, the general
     partners of Timewell Group, L.P. and Timeport, L.P. received 345,559 and
     240,218 cumulative redeemable preferred OP Units, respectively. The
     preferred OP Units are convertible into OP Units on a one-for-one basis,
     subject to certain adjustments, at any time beginning one year after the
     merger at the option of the holders. At any time, beginning two years after
     the merger, we can redeem the preferred OP units for OP Units or cash.

     Also in June 1999, we refinanced the debt on the San Diego Marriott Hotel
     and Marina. The mortgage is for $195 million for a term of 10 years at a
     rate of 8.45%. In addition, we completed a 210-room extension of the
     Philadelphia Marriott in April 1999 at a cost of approximately $37 million.
     The mortgage on the Philadelphia Marriott was refinanced in July 1999 for
     $23 million at an interest rate of approximately 8.6%, maturing in 2009.

     On December 30, 1998, we acquired a portfolio of twelve luxury hotels and
     other assets from the Blackstone Group, a Delaware limited partnership, and
     a series of funds controlled by affiliates of Blackstone Real Estate
     Partners. We issued approximately 47.7 million OP Units and assumed debt
     and made cash payments of approximately $920 million and distributed 1.4
     million of the shares of Crestline common stock to the Blackstone Real
     Estate Partners. Approximately 23.9 million OP Units were redeemable as of
     June 30, 1999.

     Year 2000 Issue
     ---------------

     Year 2000 issues have arisen because many existing computer programs and
     chip-based embedded technology systems use only the last two digits to
     refer to a year, and therefore do not properly recognize a year that begins
     with "20" instead of the familiar "19". If not corrected, many computer
     applications could fail or create erroneous results. The following
     disclosure provides information regarding the current status of our Year
     2000 compliance program.

     We have adopted the compliance program because we recognize the importance
     of minimizing the number and seriousness of any disruptions that may occur
     as a result of the Year 2000 issue. Our compliance program includes an
     assessment of our hardware and software computer systems and

                                      -26-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     embedded systems, as well as an assessment of the Year 2000 issues relating
     to third parties with which we have a material relationship or whose
     systems are material to the operations of our hotel properties. Our efforts
     to ensure that our computer systems are Year 2000 compliant have been
     segregated into two separate phases: in-house systems and third-party
     systems. Following the REIT conversion, Crestline, as the lessee of most of
     our hotels, will deal directly with Year 2000 matters material to the
     operation of the hotels, and Crestline has agreed to adopt and implement
     the program outlined below with respect to third-party systems for all
     hotels for which it is lessee.

     In-House Systems. Since the distribution of Marriott International on
     October 8, 1993, we have invested in the implementation and maintenance of
     accounting and reporting systems and equipment that are intended to enable
     us to provide adequately for our information and reporting needs and which
     are also Year 2000 compliant. Substantially all of our in-house systems
     have already been certified as Year 2000 compliant through testing and
     other mechanisms and we have not delayed any systems projects due to the
     Year 2000 issue. We engaged a third party to review our Year 2000 in-house
     readiness and found no problems with any mission critical systems.
     Management believes that future costs associated with Year 2000 issues for
     our in-house systems will be insignificant and therefore not impact our
     business, financial condition and results of operations. We have not
     developed, and do not plan to develop, a separate contingency plan for our
     in-house systems due to their current Year 2000 compliance. We do, however,
     have the normal disaster recovery procedures in place should we have a
     systems failure.

     Third-Party Systems. We rely upon operational and financial systems
     provided by third parties, primarily the managers and operators of our
     hotel properties, to provide the appropriate property-specific operating
     systems, including reservation, phone, elevator, security, HVAC and other
     systems, and to provide us with financial information. Based on discussion
     with the third parties that are critical to our business, including the
     managers and operators of our hotels, we believe that these parties are in
     the process of studying their systems and the systems of their respective
     vendors and service providers and, in many cases, have begun to implement
     changes, to ensure that they are Year 2000 compliant. We continue to
     receive verbal and written assurances that these third parties are, or will
     be, Year 2000 compliant on time. To the extent these changes impact
     property-level systems, we may be required to fund capital expenditures for
     upgraded equipment and software. We do not expect these charges to be
     material, but we are committed to making these investments as required. To
     the extent that these changes relate to a third party manager's centralized
     systems, including reservations, accounting, purchasing, inventory,
     personnel and other systems, management agreements generally provide for
     these costs to be charged to our properties subject to annual limitations,
     which costs will be borne by Crestline under the leases. We expect that the
     third party managers will incur Year 2000 costs in lieu of costs for their
     centralized systems related to system projects that otherwise would have
     been pursued and, therefore, the overall level of centralized systems
     charges allocated to the properties will not materially increase as a
     result of the Year 2000 compliance effort. We believe that this deferral of
     certain system projects will not have a material impact on our future
     results of operations, although it may delay certain productivity
     enhancements at our properties. We and Crestline will continue to monitor
     the efforts of these third parties to become Year 2000 compliant and will
     take appropriate steps to address any non-compliance issues. We believe
     that, in the event of material Year 2000 non-compliance, we will have the
     right to seek recourse against the manager under our third party management
     agreements. The management agreements, however, generally do not
     specifically address the Year 2000 compliance issue. Therefore, the amount
     of any recovery in the event of Year 2000 non-compliance at a property, if
     any, is not determinable at this time, and only a portion of such recovery
     would accrue to us through increased lease rental payments from Crestline.

                                      -27-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     We and Crestline will work with the third parties to ensure that
     appropriate contingency plans will be developed to address the most
     reasonably likely worst case Year 2000 scenarios, which may not have been
     identified fully. In particular, we and Crestline have had extensive
     discussions regarding the Year 2000 problem with Marriott International,
     the manager of a substantial majority of our hotel properties. Due to the
     significance of Marriott International to our business, a detailed
     description of Marriott International's state of readiness follows.

     Marriott International has adopted an eight-step process toward Year 2000
     readiness, consisting of the following: (i) Awareness: fostering
     understanding of, and commitment to, the problem and its potential risks;
     (ii) Inventory: identifying and locating systems and technology components
     that may be affected; (iii) Assessment: reviewing these components for Year
     2000 compliance, and assessing the scope of Year 2000 issues; (iv)
     Planning: defining the technical solutions and labor and work plans
     necessary for each affected system; (v) Remediation/Replacement: completing
     the programming to renovate or replace the problem software or hardware;
     (vi) Testing and Compliance Validation: conducting testing, followed by
     independent validation by a separate internal verification team; (vii)
     Implementation: placing the corrected systems and technology back into the
     business environment; and (viii) Quality Assurance: utilizing an internal
     audit team to review significant projects for adherence to quality
     standards and program methodology.

     Marriott International has grouped its systems and technology into three
     categories for purposes of Year 2000 compliance: (i) information resource
     applications and technology (IT Applications)--enterprise-wide systems
     supported by Marriott International's centralized information technology
     organization ("IR"); (ii) Business-initiated Systems ("BIS")--systems that
     have been initiated by an individual business unit, and that are not
     supported by Marriott International's IR organization; and (iii) Building
     Systems--non-IT equipment at properties that use embedded computer chips,
     such as elevators, automated room key systems and HVAC equipment. Marriott
     International is prioritizing its efforts based on how severe an effect
     noncompliance would have on customer service, core business processes or
     revenues, and whether there are viable, non-automated fallback procedures
     (System Criticality).

     Marriott International measures the completion of each phase based on
     documentation and quantified results weighted for System Criticality. As of
     June 18, 1999, the Awareness, Inventory, Assessment, and Planning phases
     were complete for IT Applications, BIS, and Building Systems. For IT
     Applications, the Remediation/Replacement and Testing phases were 95
     percent complete. Compliance Validation had been completed for
     approximately 85 percent of key systems, with most of the remaining work in
     its final stage. For BIS and Building Systems, Remediation/Replacement is
     substantially complete with a target date of September 1999. For BIS,
     Testing and Compliance Validation is in progress. Testing is over 95%
     complete for Building Systems for which approximately five percent require
     further remediation/replacement and re-testing, and Compliance Validation
     is in progress. Implementation and Quality Assurance is 80 percent complete
     for IT Applications. For BIS, Implementation is substantially complete
     while Quality Assurance is in progress. Both Implementation and Quality
     Assurance are in progress for Building Systems.

     Year 2000 compliance communications with Marriott International's
     significant third party suppliers, vendors and business partners, including
     its franchisees are ongoing. Marriott International's efforts are focused
     on the connections most critical to customer service, core business
     processes and revenues, including those third parties that support the most
     critical enterprise-wide IT Applications, franchisees

                                      -28-
<PAGE>

                               HOST MARRIOTT, L.P.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     generating the most revenues, suppliers of the most widely used Building
     Systems and BIS, the top 100 suppliers, by dollar volume, of non-IT
     products and services, and financial institutions providing the most
     critical payment processing functions. Responses have been received from a
     majority of the firms in this group. A majority of these respondents have
     either given assurances of timely Year 2000 compliance or have identified
     the necessary actions to be taken by them or Marriott International to
     achieve timely Year 2000 compliance for their products. Where Marriott
     International has not received satisfactory responses it is addressing the
     potential risks of failure through its contingency planning process.



     Marriott International has established a common approach for testing and
     addressing Year 2000 compliance issues for its managed and franchised
     properties. This includes guidance for operated properties, and a Year 2000
     "Toolkit" for franchisees containing relevant Year 2000 compliance
     information. Marriott International is also utilizing a Year 2000
     best-practices sharing system. Marriott International is monitoring the
     progress of the managed and franchised properties towards Year 2000
     compliance.

     Risks.There can be no assurances that Year 2000 remediation by us or third
     parties will be properly and timely completed, and failure to do so could
     have a material adverse effect on us, our business and our financial
     condition. We cannot predict the actual effects to us of the Year 2000
     problem, which depends on numerous uncertainties such as: whether
     significant third parties properly and timely address the Year 2000 issue
     and whether broad-based or systemic economic failures may occur. Moreover,
     we are reliant upon Crestline to interface with third parties in addressing
     the Year 2000 issue at the hotels leased by Crestline. We are also unable
     to predict the severity and duration of any such failures, which could
     include disruptions in passenger transportation or transportation systems
     generally, loss of utility and/or telecommunications services, the loss or
     disruption of hotel reservations made on centralized reservation systems
     and errors or failures in financial transactions or payment processing
     systems such as credit cards. Due to the general uncertainty inherent in
     the Year 2000 problem and our dependence on third parties, including
     Crestline following the REIT Conversion, we are unable to determine at this
     time whether the consequences of Year 2000 failures will have a material
     impact on us. Our Year 2000 compliance program and Crestline's adoption
     thereof are expected to significantly reduce the level of uncertainty about
     the Year 2000 problem and management believes that the possibility of
     significant interruptions of normal operations should be reduced.





                                      -29-
<PAGE>




                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.






                                               HOST MARRIOTT, L.P.

                                               BY: HOST MARRIOTT CORPORATION
                                               Its General Partner



February 16, 2000                              /s/ Donald D. Olinger
-----------------                              ---------------------------------
Date                                           Donald D. Olinger

                                               Senior Vice President and
                                               Corporate Controller
                                               (Chief Accounting Officer)