<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 September 10, 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 October 19, 1999
---------------------                                                                           -------------------
<S>                                                                                             <C>
Units of limited partnership interest                                                                   293,335,128
Units of Class TS Cumulative Redeemable Preferred limited partnership interest                              585,777
Units of Class A Cumulative Redeemable Preferred limited partnership interest                             4,160,000
</TABLE>
<PAGE>

                                      INDEX
                                      -----


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

            Condensed Consolidated Balance Sheets -                      3
              September 10, 1999 and December 31, 1998

            Condensed Consolidated Statements of Operations -            4
              Twelve Weeks and Thirty-six Weeks Ended
              September 10, 1999 and September 11, 1998

            Condensed Consolidated Statements of Cash Flows -            8
              Thirty-six Weeks Ended September 10, 1999 and
              September 11, 1998

            Notes to Condensed Consolidated Financial Statements        10

            Management's Discussion and Analysis of Results of          28
             Operations and Financial Condition



                                      -2-
<PAGE>

<TABLE>
<CAPTION>
                               HOST MARRIOTT, L.P.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (in millions)

                                                                                        September 10,  December 31,
                                                                                            1999           1998
                                                                                        -------------  ------------
                                                                                         (unaudited)
                                     ASSETS
                                     ------
<S>                                                                                       <C>            <C>
Property and equipment, net.............................................................  $   7,221      $   7,201
Notes and other receivables (including amounts due from
    affiliates of $131 million and $134 million, respectively)..........................        244            203
Rent receivable.........................................................................         63             --
Due from managers.......................................................................         --             19
Investments in affiliates...............................................................         48             33
Other assets............................................................................        458            370
Cash and cash equivalents...............................................................        290            436
                                                                                          ---------      ---------
                                                                                          $   8,324      $   8,262
                                                                                          =========      =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
Debt
    Senior notes........................................................................  $   2,539      $   2,246
    Mortgage debt.......................................................................      2,255          2,438
    Convertible debt obligation to Host Marriott........................................        567            567
    Other...............................................................................        356            447
                                                                                          ---------      ---------
                                                                                              5,717          5,698
Accounts payable and accrued expenses...................................................        142            204
Deferred income taxes...................................................................         96             97
Deferred rent...........................................................................        339             --
Other liabilities.......................................................................        383            460
                                                                                          ---------      ---------
     Total liabilities..................................................................      6,677          6,459
                                                                                          ---------      ---------

Minority interest.......................................................................        138            147
Class TS  cumulative  redeemable  preferred  limited  partnership  interests  of third
    parties at redemption value ("Class TS Preferred Units") (representing 0.6
    million units and 0 units at September 10, 1999 and December 31, 1998,
    respectively).......................................................................          6             --
Limited partnership interests of third parties at redemption value
    (representing 64.3 million units and 64.6 million units at September 10, 1999
    and December 31, 1998, respectively)................................................        611            892

Partners' Capital
    General partner.....................................................................          1              1
    Class A cumulative  redeemable preferred limited partner units ("Class A Preferred
      Units")...........................................................................        100             --
    Limited partner.....................................................................        788            767
    Accumulated other comprehensive income (loss).......................................          3             (4)
                                                                                          ---------      ---------
      Total shareholders' equity........................................................        892            764
                                                                                          ---------      ---------
                                                                                          $   8,324      $   8,262
                                                                                          =========      =========
</TABLE>

           See Notes to Condensed Consolidated Financial Statements

                                      -3-
<PAGE>

                              HOST MARRIOTT, L.P.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         Twelve weeks ended September 10, 1999 and September 11, 1998
                           (unaudited, in millions)

<TABLE>
<CAPTION>


                                                                                               1999         1998
                                                                                              ------       ------
REVENUES
<S>                                                                                           <C>         <C>
    Rental income (Note 2, 3)...........................................................     $   188      $    --
    Hotel sales
      Rooms.............................................................................          --          494
      Food and beverage.................................................................          --          198
      Other.............................................................................          --           49
    Interest income.....................................................................          10           11
    Net gains on property transactions..................................................          --            1
    Equity in earnings of affiliates....................................................           3            2
    Other...............................................................................           2            1
                                                                                             -------      -------
      Total revenues....................................................................         203          756
                                                                                             -------      -------

EXPENSES
    Depreciation and amortization.......................................................          68           53
    Property-level expenses.............................................................          62           67
    Hotel operating expenses
      Rooms.............................................................................          --          121
      Food and beverage.................................................................          --          156
      Other department costs and deductions.............................................          --          194
      Management fees (including Marriott International
         management fees of $36 million in 1998)........................................          --           39
    Minority interest (benefit).........................................................           2            6
    Interest expense....................................................................         108           79
    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")..........................          --            9
    Corporate expenses..................................................................           6           12
    REIT Conversion expenses............................................................          --            8
Other expenses..........................................................................           1            4
                                                                                             -------      -------
                                                                                                 247          748
                                                                                             -------      -------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
    INCOME TAXES........................................................................         (44)           8
Provision for income taxes..............................................................          --           (6)
                                                                                             -------      -------

INCOME (LOSS) FROM CONTINUING OPERATIONS................................................         (44)           2
Income from discontinued operations, net of taxes.......................................          --            2
                                                                                             -------      -------
Income (LOSS) Before Extraordinary ITEM.................................................         (44)           4
Extraordinary gain (loss)...............................................................           4         (148)
                                                                                             -------      -------

NET  LOSS...............................................................................     $   (40)     $  (144)
                                                                                             ========     =======
Less:  Distributions on Class A Preferred Units.........................................          (1)          --
                                                                                             -------      -------

 LOSS AVAILABLE TO COMMON UNITHOLDERS...................................................     $   (41)     $  (144)
                                                                                             ========     =======
</TABLE>

           See Notes to Condensed Consolidated Financial Statements

                                      -4-
<PAGE>

                               HOST MARRIOTT, L.P.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (cont.)
          Twelve weeks ended September 10, 1999 and September 11, 1998
                                   (unaudited)

<TABLE>
<CAPTION>

BASIC EARNINGS (LOSS) PER UNIT:
<S>                                                                                        <C>            <C>
Continuing operations...................................................................   $  (0.16)      $   0.01
Discontinued operations (net of income taxes)...........................................         --           0.01
Extraordinary gain (loss)...............................................................       0.02          (0.69)
                                                                                           --------       --------

BASIC  LOSS PER UNIT:....................................................................  $  (0.14)      $  (0.67)
                                                                                           ========       ========

DILUTED EARNINGS (LOSS) PER UNIT:
Continuing operations...................................................................   $  (0.16)      $   0.01
Discontinued operations (net of income taxes)...........................................         --           0.01
Extraordinary gain (loss)...............................................................       0.02          (0.67)
                                                                                           --------       --------

DILUTED LOSS PER UNIT...................................................................   $  (0.14)      $  (0.65)
                                                                                           ========       ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                      -5-
<PAGE>

                               HOST MARRIOTT, L.P.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
       Thirty-six weeks ended September 10, 1999 and September 11, 1998
                            (unaudited, in millions)
<TABLE>
<CAPTION>
                                                                                                    1999         1998
                                                                                                  --------     --------
REVENUES
<S>                                                                                               <C>          <C>
Rental income (Note 2, 3).....................................................................    $    546     $     --

Hotel sales...................................................................................
   Rooms......................................................................................          --        1,514
   Food and beverage..........................................................................          --          642
   Other......................................................................................          --          159
Interest income...............................................................................          26           35
Net gains on property transactions............................................................          16           53
Equity in earnings of affiliates..............................................................           5            1
Other ........................................................................................           5            6
                                                                                                  --------     --------
    Total revenues............................................................................         598        2,410
                                                                                                  --------     --------

EXPENSES
    Depreciation and amortization.............................................................         201          166
    Property-level expenses...................................................................         182          189
    Hotel operating expenses
      Rooms...................................................................................          --          348
      Food and beverage.......................................................................          --          477
      Other department costs and deductions...................................................          --          568
      Management fees (including Marriott International management fees of $138
         million in 1998).....................................................................          --          147
    Minority interest (benefit)...............................................................          13           36
    Interest expense..........................................................................         325          231
    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")................................          --           26
    Corporate expenses........................................................................          22           33
    REIT conversion expenses..................................................................          --           14
    Other expenses............................................................................          10           14
                                                                                                  --------     --------
                                                                                                       753        2,249

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES..................................        (155)         161
Provision for income taxes....................................................................          --          (69)
                                                                                                  --------      -------

INCOME (LOSS) FROM CONTINUING OPERATIONS......................................................        (155)          92
Income from discontinued operations, net of taxes.............................................          --            8
                                                                                                  --------     --------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM.......................................................        (155)         100
Extraordinary gain (loss).....................................................................          17         (148)
                                                                                                  --------     --------
NET LOSS......................................................................................    $   (138)    $    (48)
                                                                                                  ========     ========
Less: Distributions on Class A Preferred Units................................................          (1)          --
                                                                                                  --------     --------

LOSS AVAILABLE TO COMMON UNITHOLDERS....................................................          $   (139)    $    (48)
                                                                                                  ========     ========
</TABLE>


            See Notes to Condensed Consolidated Financial Statements


                                      -6-
<PAGE>

                               HOST MARRIOTT, L.P.
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (cont.)
        Thirty-six weeks ended September 10, 1999 and September 11, 1998
                                   (unaudited)

<TABLE>
<CAPTION>

BASIC EARNINGS PER UNIT:
<S>                                                                                        <C>            <C>
Continuing operations...................................................................   $  (0.54)      $   0.42
Discontinued operations (net of income taxes)...........................................         --           0.04
Extraordinary gain (loss)...............................................................       0.06          (0.69)
                                                                                           --------       --------

BASIC LOSS PER UNIT:....................................................................   $  (0.48)      $  (0.23)
                                                                                           ========       ========

DILUTED EARNINGS PER UNIT:
Continuing operations...................................................................   $  (0.54)      $   0.42
Discontinued operations (net of income taxes)...........................................         --           0.03
Extraordinary gain (loss)...............................................................       0.06          (0.67)
                                                                                           --------       --------

DILUTED LOSS PER UNIT...................................................................   $  (0.48)      $  (0.22)
                                                                                           ========       ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                     -7-
<PAGE>

                               HOST MARRIOTT, L.P.
                      CONDENSED CONSOLIDATED STATEMENTS OF
                 CASHFLOWS Thirty-six weeks ended September 10,
                           1999 and September 11, 1998
                            (unaudited, in millions)

<TABLE>
<CAPTION>

                                                                                              1999           1998
                                                                                           ---------      -------
OPERATING ACTIVITIES
<S>                                                                                        <C>            <C>
Income (loss) from continuing operations................................................   $    (155)     $      92
Adjustments to reconcile to cash from continuing operations:
    Depreciation and amortization.......................................................         203            168
    Income taxes........................................................................          --             50
    Gain on sale of hotel properties....................................................         (16)           (50)
    Equity in earnings of affiliates....................................................          (5)            (1)
    Changes in operating accounts.......................................................         212            (35)
    Other...............................................................................          17             30
                                                                                           ---------      ---------
    Cash from continuing operations.....................................................         256            254
    Cash from discontinued operations...................................................          --             24
                                                                                           ---------      ---------
    Cash from operations................................................................         256            278
                                                                                           ---------      ---------

INVESTING ACTIVITIES
Proceeds from sales of assets...........................................................          49            211
Acquisitions............................................................................         (17)          (607)
Capital expenditures:
    Renewals and replacements...........................................................        (143)          (108)
    Development projects................................................................        (102)           (32)
    Other investments...................................................................         (16)           (19)
Purchases of short-term marketable securities...........................................          --           (134)
Sales of short-term marketable securities...............................................          --            451
Note receivable advances, net of collections............................................         (47)             4
Affiliate collections, net..............................................................          --             13
Other...................................................................................          --            (12)
                                                                                           ---------      ---------
    Cash used in investing activities from continuing operations........................        (276)          (233)
    Cash used in investing activities from discontinued operations......................          --            (10)
                                                                                           ---------      ---------
    Cash used in investing activities...................................................        (276)          (243)
                                                                                           ---------      ---------

FINANCING ACTIVITIES
Issuances of debt, net..................................................................       1,282          2,004
Issuances of Class A Preferred Units....................................................         100             --
Issuances of common units...............................................................           2             --
Distributions...........................................................................        (195)            --
Scheduled principal repayments..........................................................         (26)           (39)
Debt prepayments........................................................................      (1,275)        (1,631)
Costs of extinguishment of debt.........................................................          (2)          (175)
Other...................................................................................         (12)           (14)
                                                                                           ---------      ---------
    Cash (used in) from financing activities from continuing operations.................        (126)           145
    Cash used in financing activities from discontinued operations......................          --           (152)
                                                                                           ---------      ----------
    Cash used in financing activities...................................................        (126)            (7)
                                                                                           ---------      ---------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................................   $    (146)     $      28
                                                                                           =========      =========
</TABLE>


            See Notes to Condensed Consolidated Financial Statements

                                      -8-
<PAGE>

                               HOST MARRIOTT, L.P.
                      CONDENSED CONSOLIDATED STATEMENTS OF
                 CASHFLOWS Thirty-six weeks ended September 10,
                           1999 and September 11, 1998
                            (unaudited, in millions)


Supplemental schedule of noncash investing and financing activities:

Approximately 586,000 Class TS Preferred Units valued at $7.4 million were
issued in connection with the acquisition by merger of two partnerships that own
limited partnership interests in the partnership that owns the New York Marriott
Marquis.

In the first quarter of 1998, the Company assumed $164 million of mortgage debt
for the acquisition of, or purchase of controlling interests in, certain hotel
properties.






            See Notes to Condensed Consolidated Financial Statements

                                      -9-
<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 September 10,
     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 September 10,
     1999 and December 31, 1998, and the results of operations for the twelve
     and thirty-six weeks ended

                                      -10-
<PAGE>

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

     September 10, 1999 and September 11, 1998 and cash flows for the thirty-six
     weeks ended September 10, 1999 and September 11, 1998. The statements of
     operations for the twelve and thirty-six weeks ended September 11, 1998 and
     the cash flows for the thirty-six weeks ended September 11, 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 sales 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, $86 million and $339 million of contingent rent
     previously recognized as revenue during the twelve weeks and thirty-six
     weeks ended September 10, 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 thirty-six weeks ended
     September 11, 1998 was to increase both revenues and operating expenses by
     approximately $471 million and $1,393 million, respectively, with no impact
     on net income or earnings per share.

     The comparison of the 1999 results with 1998 is also affected by a change
     in the reporting period for the Company's hotels not managed by Marriott
     International. The 1998 year to date historical results would have to be
     adjusted to exclude the results of these hotels for December 1997 and
     include August 1998 for the thirty-six weeks ended September 11, 1998 in
     order to be comparable to the 1999 period results as reported. Also, for
     the third quarter the 1998 historical results would have to be adjusted to
     exclude the results of these hotels for May 1998 and include August 1998
     for the twelve weeks ended September 11, 1998 in order to be comparable to
     the 1999 period results as reported.

                                      -11-
<PAGE>

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

     The table below represents hotel sales for which rental income is computed
     for 1999.



<TABLE>
<CAPTION>
                                                              Twelve Weeks Ended           Thirty-six Weeks Ended
                                                          -----------------------------------------------------------
                                                          September 10,  September 11,  September 10,   September 11,
                                                               1999           1998           1999           1998
                                                          -------------  -------------  -------------   -------------
                                                                 (in millions)                 (in millions)
Hotel Sales
<S>                                                         <C>            <C>            <C>            <C>
         Rooms............................................  $    609       $    494       $  1,881       $  1,514
         Food and beverage................................       250            198            828            642
         Other............................................        66             49            201            159
                                                            --------       --------       --------       --------
               Total hotel sales..........................  $    925       $    741       $  2,910       $  2,315
                                                            ========       ========       ========       ========
</TABLE>

4.   Earnings Per Unit


     Basic earnings per common unit is computed by dividing net income less
     dividends on preferred limited partner interests by the weighted average
     number of common units outstanding. Diluted earnings per unit is computed
     by dividing net income less dividends on preferred limited partner units as
     adjusted for potentially dilutive securities, by the weighted average
     number of common units outstanding plus other potentially dilutive
     securities. Dilutive securities may include units distributed to Host
     Marriott Corporation for Host Marriott Corporation common shares granted
     under comprehensive stock plans, warrants and the Convertible Preferred
     Securities. Dilutive securities also include those common and preferred
     Operating Partnership Units ("OP Units") issuable or outstanding that are
     held by minority partners which are assumed to be converted. No effect is
     shown for any securities if they are anti-dilutive.


<TABLE>
<CAPTION>
                                                                                 Twelve weeks ended
                                                       ------------------------------------------------------------------------
                                                                 September 10, 1999                   September 11, 1998
                                                       ---------------------------------   ------------------------------------
                                                         Income       Units     Per Unit     Income       Units      Per Unit
                                                       (Numerator) (Denominator) Amount     (Numerator) (Denominator)  Amount
                                                       ---------------------------------   ------------------------------------
<S>                                                    <C>           <C>        <C>         <C>           <C>       <C>
      Net Loss......................................   $    (40)     292.9      $  (.14)    $   (144)     216.2     $    (.67)
       Distributions on Class A Preferred Units.....         (1)        --           --           --         --            --
                                                       --------      -----      --------    --------     ------     ---------
      Basic loss available to common
       unitholders per unit.........................        (41)     292.9         (.14)        (144)     216.2          (.67)
       Assuming distribution of units to Host
        Marriott Corporation for Host Marriott
        Corporation common shares granted under
        the Host Marriott comprehensive stock
        plan, less shares assumed purchased at
        average market price........................         --         --           --           --        4.0           .02
       Assuming distribution of units to Host
        Marriott Corporation for Host Marriott
        common shares issuable for warrants, less
        shares assumed purchased at average
        market price................................         --         --           --           --        0.1            --
       Assuming conversion of Class TS Preferred
</TABLE>

                                      -13-
<PAGE>

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

<TABLE>
<CAPTION>

<S>                                                   <C>        <C>          <C>         <C>           <C>         <C>
        Units......................................        --         --           --           --         --            --
       Assuming issuance of OP Units issuable
           under certain purchase agreements.......        --         --           --           --         --            --
       Assuming conversion of Convertible
        Preferred Securities.......................        --         --           --           --         --            --
                                                     --------     ------      --------    --------     ------     ---------
      Diluted Loss per Unit........................  $    (41)     292.9      $   (.14)   $   (144)     220.3     $    (.65)
                                                     ========     ======      ========    ========     ======     =========
</TABLE>

<TABLE>
<CAPTION>
                                                                       Thirty-six Weeks Ended
                                                -----------------------------------------------------------------------
                                                          September 10, 1999                   September 11, 1998
                                                ---------------------------------   -----------------------------------
                                                 Income       Units      Per Unit     Income       Units      Per Unit
                                                (Numerator) (Denominator) Amount     (Numerator) (Denominator)  Amount
                                                ---------------------------------   -----------------------------------
<S>                                             <C>           <C>        <C>         <C>            <C>      <C>
Net Loss......................................  $   (138)     292.4      $   (.48)    $    (48)     216.0    $    (.23)
 Distributions on Class A preferred units.....        (1)        --           --            --         --           --
                                                ---------    ------      --------     --------      -----    ---------
Basic loss available to common
 unitholders per unit.........................      (139)     292.4          (.48)         (48)     216.0         (.23)
 Assuming distribution of units to Host
  Marriott Corporation for Host Marriott
  Corporation common shares granted under
  the Host Marriott comprehensive stock
  plan, less shares assumed purchased at
  average market price........................        --         --            --           --        4.2          .01
 Assuming distribution of units to Host
  Marriott Corporation for Host Marriott
  common shares issuable for warrants, less
  shares assumed purchased at average
  market price................................        --         --            --           --        0.1          --
 Assuming conversion of Class TS Preferred
  Units.......................................        --         --            --           --         --          --
 Assuming issuance of OP Units issuable
     under certain purchase agreements........        --         --            --           --         --          --
 Assuming conversion of Convertible
  Preferred Securities........................        --         --            --           --         --          --
                                                --------     ------      ---------    --------      -----    --------
Diluted Loss per Unit.........................  $   (139)     292.4      $   (.48)    $    (48)     220.3    $   (.22)
                                                ========      =====      =========    ========      =====    ========
</TABLE>

     In September 1999, the Board of Directors of Host Marriott Corporation
     approved the repurchase, from time to time on the open market and/or in
     privately negotiated transactions, of up to 22 million of the outstanding
     shares of Host Marriott common stock or a corresponding amount (based on
     the appropriate conversion ratio) of Host Marriott Convertible Preferred
     Securities. Such repurchases will be made at management's discretion,
     subject to market conditions, and may be suspended at any time at Host

                                      -13-
<PAGE>

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


     Marriott Corporation's discretion. Additionally, under the terms of the
     partnership agreement, an equivalent number of OP units will also be
     repurchased on a one-for-one basis from Host Marriott Corporation. Through
     October 18, 1999, Host Marriott has spent approximately $7.7 million to
     repurchase 797,000 shares.


5.   Class A Cumulative Redeemable Preferred Limited Partner Interest

     In August 1999, Host Marriott sold 4.16 million shares of 10% Class A
     cumulative redeemable preferred stock ("Class A Preferred Shares") with a
     $0.01 par value and we issued an equivalent security, the Class A Preferred
     Units to Host Marriott Corporation. Holders of the shares 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. A corresponding distribution on the
     Class A Preferred Units is also payable quarterly in arrears commencing
     October 15, 1999. After August 3, 2004 Host Marriott Corporation has the
     option to redeem the Class A Preferred Shares for $25.00 per share, plus
     accrued and unpaid dividends to the date of redemption. The Class A
     Preferred Units rank senior to the common units and the Class TS Preferred
     Units. The Class A Preferred shareholders generally have no voting rights.


     Cumulative cash distributions on the Class A Preferred Units have been
     accrued from the date of issuance, August 3, 1999, through the balance
     sheet date. The Company declared a pro rata distribution of $0.50 per unit
     on September 23, 1999, which was paid on October 15, 1999.

6.   Dividends and Distributions Payable

     On September 23, 1999, the Board of Directors of Host Marriott declared a
     cash dividend of $0.21 per share of Host Marriott Corporation common stock
     and a corresponding distribution of $0.21 per OP Unit, which was paid on
     October 15, 1999 to shareholders and unitholders of record on September 30,
     1999. Total dividends and corresponding distributions year to date are
     $0.63 per share and per unit, respectively.


     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.


7.   Acquisitions and Property Expansions

     On December 30, 1998, the Company acquired a portfolio of twelve luxury
     hotels and other assets (the "Blackstone Acquisition") from the Blackstone
     Group, a Delaware limited partnership, and a series of funds controlled by
     affiliates of Blackstone Real Estate Partners. Approximately 467,000 OP
     Units issued in connection with the Blackstone Acquisition were redeemed
     for common stock of Host Marriott Corporation during the third quarter of
     1999.

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

     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

                                      -14-
<PAGE>

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

     240,218 Class TS Preferred Units, respectively. The Class TS Preferred
     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 Class TS Preferred Units for OP Units or cash.
     Also as part of the merger, the Company repaid in cash outstanding Partner
     loans totaling $5.9 million on behalf of each of the partnerships.

8.   Dispositions

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

     In the fourth quarter, the Company sold the 306-room Grand Hotel Resort and
     Golf Club for $28 million, recognizing a loss of $1 million. The Company
     also announced it has reached an agreement to sell the Ritz-Carlton Boston
     for total proceeds of approximately $122 million in 1999, subject to normal
     closing requirements.


9.    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 notes were exchanged during the third quarter for Series
     E senior notes on a one-for-one basis, which are freely transferable by the
     holders.

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

      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 expansion in July 1999 at an
      interest rate of approximately 8.6%, maturing 2009.

      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 August 1999, the Company repaid $100 million of the outstanding balance
      on a $350 million term loan entered into in August 1998 as part of its
      $1.25 billion line of credit. During the fourth quarter an additional $50
      million repayment was made, reducing the outstanding balance of the term
      loan to $200 million. Subsequent to these repayments, the available
      capacity under the line of credit balance remains

                                     -15-
<PAGE>

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

     $900 million while the total line has been permanently reduced to $1.1
     billion as a result of the term loan payments.

     In August 1999, the Company made a prepayment of $19 million to pay down in
     full the mezzanine mortgage on the Marriott Desert Springs Resort and Spa.
     In September 1999, the Company made a prepayment of $45 million to pay down
     in full the mortgage note on the Philadelphia Four Seasons Hotel.

10.  Geographic and Business Segment Information

     The Company operates in 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 September 10, 1999
                                                    -----------------------------------------------
                                                    Hotels     Corporate & Other       Consolidated
                                                    ------     -----------------       ------------
<S>                                                <C>         <C>                     <C>
Revenues.......................................    $   201            $   2               $   203
Income (loss) from continuing operations
  before income taxes..........................        (29)             (15)                  (44)

<CAPTION>
                                                         Twelve Weeks Ended September 11, 1998
                                                    -----------------------------------------------
                                                    Hotels     Corporate & Other       Consolidated
                                                    ------     -----------------       ------------
<S>                                                <C>         <C>                     <C>
Revenues.......................................    $   752            $   4               $   756
Income (loss) from continuing operations
    before income taxes........................         38              (30)                    8

                                                       Thirty-six Weeks Ended September 10, 1999
                                                    -----------------------------------------------
                                                    Hotels     Corporate & Other       Consolidated
                                                    ------     -----------------       ------------
<S>                                                <C>         <C>                     <C>
Revenues.......................................    $   587            $  11               $   598
Income (loss) from continuing operations
    before income taxes........................       (108)             (47)                 (155)

<CAPTION>
                                                       Thirty-six Weeks Ended September 11, 1998
                                                    -----------------------------------------------
                                                    Hotels     Corporate & Other       Consolidated
                                                    ------     -----------------       ------------
<S>                                                <C>         <C>                     <C>
Revenues.......................................    $ 2,350            $  60               $ 2,410
Income (loss) from continuing operations
    before income taxes........................        191              (30)                  161
</TABLE>

     As of September 10, 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):


<TABLE>
<CAPTION>
                                                     Twelve Weeks Ended              Thirty-six Weeks Ended
                                                 -----------------------------   -----------------------------
                                                 September 10,   September 11,   September 10,   September 11,
                                                      1999            1998           1999            1998
                                                 -------------   -------------   -------------   -------------
<S>                                              <C>             <C>             <C>             <C>

</TABLE>


                                     -16-
<PAGE>

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

<TABLE>
<CAPTION>

<S>                                                  <C>             <C>             <C>             <C>
United States..................................      $  184          $  713          $  536          $ 2,237
International..................................           4              28              10               78
                                                     ------          -------         ------          -------
    Total......................................      $  188          $  741          $  546          $ 2,315
                                                     ======          ======          ======          =======
</TABLE>

11.  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, at Host Marriott Services Corporation's option, subsequent to the
     exercise of the options held by certain former and current employees of
     Marriott International. For the twelve and thirty-six weeks ended September
     10, 1999, comprehensive income totaled $51 million and $205 million,
     respectively. The comprehensive loss was $148 million and $51 million for
     the twelve and thirty-six weeks ended September 11, 1998. As of September
     10, 1999 the Company's accumulated other comprehensive income was
     approximately $3 million. As of December 31, 1998, the Company's
     accumulated other comprehensive loss was approximately $4 million

     On August 27, 1999, Autogrill Acquisition Co., a wholly-owned subsidiary of
     Autogrill SpA of Italy, completed its cash tender offer for all the
     outstanding shares of common stock of Host Marriott Services Corporation.
     Since Host Marriott Services Corporation is no longer publicly traded, the
     Company has adjusted the unrealized gain on the receivable to reflect the
     tender price of $15.75. Further, all future payments to the Company will be
     made in cash as Host Marriott Services Corporation has indicated that the
     receivable will not be settled in Autogrill stock.

12.  Subsequent Events

     In September 1999, the mortgage note receivable on a hotel property matured
     and the Company collected the outstanding balance of approximately $65
     million. The note was originally acquired as part of the Blackstone
     Acquisition.

     In October 1999, the Company initiated a tender offer to acquire the
     remaining partnership interests in the Hopewell Group, Ltd., a minority
     owner in the Atlanta Marriott Marquis, for preferred OP Units and cash.

13.  Summarized Lease Pool Financial Statements

     As discussed in Note 2, as of September 10, 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

                                     -17-
<PAGE>

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

     for the fiscal year ended December 31, 1998. The results of operations for
     the twelve and thirty-six weeks ended September 10, 1999 and summarized
     balance sheet data as of September 10, 1999 of the lease pools in which the
     Company's hotels are organized are as follows (in millions):

<TABLE>
<CAPTION>
                                                           Twelve Weeks Ended September 10, 1999
                                                           -------------------------------------
                                                   Pool 1     Pool 2      Pool 3     Pool 4      Combined
                                                   ------     ------      ------     ------      --------
<S>                                                 <C>         <C>        <C>         <C>        <C>
Hotel Sales
     Rooms.....................................     $ 135       $ 142      $ 126       $ 128      $ 531
     Food and beverage.........................        57          59         55          67        238
     Other.....................................        16          15         16          17         64
                                                    -----       -----      -----       -----      -----
          Total hotel sales....................       208         216        197         212        833
Operating Costs and Expenses
     Rooms.....................................        34          40         32          30        136
     Food and beverage.........................        46          48         44          50        188
     Other.....................................        58          50         54          55        217
     Management fees...........................         9          13          9          13         44
     Lease expense.............................        57          59         56          61        233
                                                    -----       -----      -----       -----      -----
          Total operating expenses.............       204         210        195         209        818
                                                    -----       -----      -----       -----      -----
Operating Profit...............................         4           6          2           3         15
Corporate and Interest Expenses................        (1)         (1)        --          (1)        (3)
                                                    -----       -----      -----       -----      -----
      Income before taxes......................         3           5          2           2         12
      Income taxes.............................        (1)         (3)        (1)         (1)        (6)
                                                    -----       -----      -----       -----      -----
          Net Income...........................     $   2       $   2      $   1       $   1      $   6
                                                    =====       =====      =====       =====      =====

<CAPTION>
                                                         Thirty-six Weeks Ended September 10, 1999
                                                         -----------------------------------------
                                                   Pool 1     Pool 2      Pool 3     Pool 4      Combined
                                                   ------     ------      ------     ------      --------
<S>                                                <C>        <C>         <C>        <C>         <C>
Hotel Sales
     Rooms.....................................     $ 408       $ 436      $ 394       $ 401     $ 1,639
     Food and beverage.........................       184         196        183         220         783
     Other.....................................        46          44         54          51         195
                                                    -----       -----      -----       -----     -------
          Total hotel sales....................       638         676        631         672       2,617
Operating Costs and Expenses
     Rooms.....................................        98         108         95          88         389
     Food and beverage.........................       143         150        135         154         582
</TABLE>

                                     -18-
<PAGE>

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

<TABLE>
<CAPTION>

<S>                                                 <C>         <C>        <C>         <C>       <C>
     Other.....................................       168         157        161         158         644
     Management fees...........................        29          43         30          46         148
     Lease expense.............................       190         206        202         218         816
                                                    -----       -----      -----       -----     -------
          Total operating expenses.............       628         664        623         664       2,579
                                                    -----       -----      -----       -----     -------
Operating Profit...............................        10          12          8           8          38
Corporate and Interest Expenses................        (2)         (2)        (1)         (2)         (7)
                                                    -----       -----      -----       -----     -------
      Income before taxes......................         8          10          7           6          31
      Income taxes.............................        (3)         (5)        (3)         (2)        (13)
                                                    -----       -----      -----       -----     -------
          Net Income...........................     $   5       $   5      $   4       $   4     $    18
                                                    =====       =====      =====       =====     =======
<CAPTION>

                                                                  As of September 10, 1999
                                                                  ------------------------
                                                   Pool 1     Pool 2      Pool 3     Pool 4      Combined
                                                   ------     ------      ------     ------      --------
<S>                                                <C>        <C>         <C>        <C>         <C>
Assets.........................................    $  43       $  32      $  35       $  34       $  144
Liabilities....................................       38          27         31          30          126
Equity.........................................        5           5          4           4           18
</TABLE>

14.  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 September 10, 1999 and December 31, 1998 and
     results of operations for the twelve and thirty-six weeks ended September
     10, 1999 and September 11, 1998, and cash flows for the thirty-six weeks
     ended September 10, 1999 and September 11, 1998 of the parent, Guarantor
     Subsidiaries and the Non-Guarantor Subsidiaries.

                                     -19-
<PAGE>


          Supplemental Condensed Combined Consolidating Balance Sheets
                                  (in millions)
                               September 10, 1999
<TABLE>
<CAPTION>
                                                           Guarantor    Non-Guarantor
                                                Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------   ------------   ------------   ------------   ------------
<S>                                            <C>       <C>            <C>            <C>            <C>
Property and equipment, net..................  $  1,224     $ 3,787        $ 2,210       $     --        $ 7,221
Investments in affiliate.....................     1,685          --             --         (1,637)            48
Notes and other receivables..................       840          53             19           (668)           244
Other assets.................................       165         178            215            (37)           521
Cash and cash equivalents....................       119         148             23             --            290
                                                -------     -------        -------       --------        -------
   Total assets..............................   $ 4,033     $ 4,166        $ 2,467       $ (2,342)       $ 8,324
                                                =======     =======        =======       ========        =======

Debt.........................................   $ 1,317     $ 3,014        $ 1,173       $   (354)       $ 5,150
Convertible debt obligations to Host Marriott       567          --             --             --            567
Deferred income taxes........................        57          32              7             --             96
Other liabilities............................       349         585            281           (351)           864
                                                -------     -------        -------       --------        -------
   Total liabilities.........................     2,290       3,631          1,461           (705)         6,677
</TABLE>

                                     -20-
<PAGE>

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

<TABLE>
<CAPTION>

<S>                                             <C>         <C>            <C>           <C>             <C>
Minority interests...........................        13          54             71             --            138
Limited partner interest of third parties
at redemption value..........................       617          --             --             --            617
Owner's capital..............................     1,113         481            935         (1,637)           892
                                                -------     -------        -------       ---------       -------

   Total liabilities and owner's capital.....   $ 4,033     $ 4,166        $ 2,467       $ (2,342)       $ 8,324
                                                =======     =======        =======       ========        =======
</TABLE>
                          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.....................     1,475          --             --         (1,442)            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..............................   $ 4,018     $ 4,084        $ 2,408        $(2,248)       $ 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............................       291         600            252           (479)           664
                                                -------     -------        -------        -------        -------
  Total liabilities..........................     2,347       3,476          1,442           (806)         6,459

Minority interests...........................        15          56             76             --            147
Limited partner interest of third parties
at redemption value..........................       892          --             --             --            892
Owner's capital..............................       764         552            890         (1,442)           764
                                                -------     -------        -------        -------        -------
  Total liabilities and owner's capital......   $ 4,018     $ 4,084        $ 2,408        $(2,248)       $ 8,262
                                                =======     =======        =======        =======        =======
</TABLE>

                                     -21-
<PAGE>

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


           Supplemental Condensed Combined Statements of Operations
                                 (in millions)

                     Twelve Weeks Ended September 10, 1999

<TABLE>
<CAPTION>
                                                           Guarantor    Non-Guarantor
                                                Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------   ------------   ------------   ------------   ------------
<S>                                             <C>      <C>            <C>            <C>            <C>
REVENUES.....................................   $   71      $   101        $    68        $   (37)       $   203
Depreciation.................................      (13)         (35)           (20)            --            (68)
Property-level expenses......................      (10)         (24)           (28)            --            (62)
Hotel operating expenses.....................       --           --             --             --             --
Minority interest............................       (1)          --             (1)            --             (2)
Interest expense.............................      (17)         (64)           (22)            (5)          (108)
Dividends on convertible preferred securities       --           --             --             --             --
Corporate expenses...........................       (1)          (3)            (2)            --             (6)
Other expenses...............................       --           (1)            --             --             (1)
                                                ------      -------        -------        -------        -------
Income (loss) before extraordinary gain......       29          (26)            (5)           (42)           (44)
Extraordinary item-gain on forgiveness of
debt.........................................       --            1              3             --              4
                                                ------      -------        -------        -------        -------
NET INCOME (LOSS)............................   $   29      $   (25)       $    (2)       $   (42)       $   (40)
                                                ======      =======        =======        =======        =======
</TABLE>

                      Twelve Weeks Ended September 11, 1998

<TABLE>
<CAPTION>
                                                           Guarantor    Non-Guarantor
                                                Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------   ------------   ------------   ------------   ------------
<S>                                             <C>      <C>            <C>            <C>            <C>
REVENUES.....................................   $   22      $   309        $   428      $      (3)       $   756
Depreciation.................................      (11)         (26)           (16)            --            (53)
Property-level expenses......................       (2)         (28)           (37)            --            (67)
Hotel operating expenses.....................       (8)        (210)          (292)            --           (510)
Minority interest............................       (1)          (2)            (3)            --             (6)
Interest expense.............................      (21)         (47)           (17)             6            (79)
Dividends on convertible preferred securities       (9)          --             --             --             (9)
Corporate expenses...........................       (6)          (4)            (2)             -            (12)
REIT Conversion expenses.....................       (8)          --             --             --             (8)
Other expenses...............................       (3)          --             (1)            --             (4)
                                                ------      -------        -------        -------        -------
Income from continuing operations before
taxes........................................      (47)          (8)            60              3              8
Provision for income taxes...................       18            2            (26)            --             (6)
                                                ------      -------        -------        -------        -------
Income from continuing operations............      (29)          (6)            34              3              2
Income from discontinued operations..........        2           --             --             --              2
                                                ------      -------        -------        -------        -------
INCOME BEFORE EXTRAORDINARY
   ITEM......................................   $  (27)     $    (6)       $    34        $     3        $     4
                                                ======      =======        =======        =======        =======
</TABLE>

                                     -22-
<PAGE>

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

           Supplemental Condensed Combined Statements of Operations
                                 (in millions)

                   Thirty-six Weeks Ended September 10, 1999

<TABLE>
<CAPTION>
                                                           Guarantor    Non-Guarantor
                                                Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                ------   ------------   ------------   ------------   ------------
<S>                                             <C>      <C>            <C>            <C>            <C>
REVENUES.....................................   $   278     $   332        $   199        $  (211)       $   598
Depreciation.................................       (41)       (105)           (55)            --           (201)
Property-level expenses......................       (31)        (69)           (82)            --           (182)
Hotel operating expenses.....................        --          --             --             --             --
Minority interest............................        (5)         (6)            (2)            --            (13)
Interest expense.............................      (108)       (168)           (68)            19           (325)
Dividends on convertible preferred securities        --          --             --             --             --
Corporate expenses...........................        (4)        (11)            (7)            --            (22)
Other expenses...............................        (6)         (3)            (1)            --            (10)
                                                -------     -------        -------        -------        -------
Income (loss) before extraordinary gain......        83         (30)           (16)          (192)          (155)
Extraordinary item-gain on forgiveness of            --           1             16             --             17
                                                -------     -------        -------        -------        -------
debt.........................................
NET INCOME (LOSS)............................   $    83     $   (29)       $    --        $  (192)       $  (138)
                                                =======     =======        =======        =======        =======
</TABLE>

<TABLE>
<CAPTION>
                    Thirty-six Weeks Ended September 11, 1998

                                                             Guarantor    Non-Guarantor
                                                  Parent   Subsidiaries   Subsidiaries   Eliminations   Consolidated
                                                  ------   ------------   ------------   ------------   ------------
<S>                                               <C>      <C>            <C>            <C>            <C>
REVENUES.......................................   $  683      $ 1,160        $   678        $  (111)       $ 2,410

Depreciation...................................      (50)         (83)           (33)            --           (166)
Property-level expenses........................      (43)         (91)           (55)            --           (189)
Hotel operating expenses.......................     (352)        (740)          (448)            --         (1,540)
Minority interest..............................      (23)          (8)            (5)            --            (36)
Interest expense...............................      (58)        (141)           (54)            22           (231)
Dividends on convertible preferred securities..      (26)          --             --             --            (26)
Corporate expenses.............................      (11)         (15)            (7)            --            (33)
REIT Conversion expenses.......................      (14)          --             --             --            (14)
Other expenses.................................      (12)          (1)            (1)            --            (14)
                                                 -------      -------        -------        -------        --------
Income from continuing operations before
  taxes........................................       94           81             75            (89)           161
Provision for income taxes.....................       (2)         (35)           (32)            --            (69)
                                                  ------      -------        -------        -------        -------
Income from continuing operations..............       92           46             43            (89)            92
Income from discontinued operations............        8           --             --             --              8
                                                 -------      -------        -------        -------        -------
INCOME BEFORE EXTRAORDINARY
   ITEM........................................   $  100      $    46        $    43        $   (89)       $   100
                                                  ======      =======        =======        =======        =======
</TABLE>

                                     -23-
<PAGE>

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

           Supplemental Condensed Combined Statements of Cash Flows
                                 (in millions)

                   Thirty-six Weeks Ended September 10, 1999

<TABLE>
<CAPTION>
                                                                        Guarantor     Non-Guarantor
                                                            Parent    Subsidiaries    Subsidiaries   Consolidated
                                                            ------    ------------    -------------  ------------
<S>                                                        <C>        <C>             <C>            <C>
OPERATING ACTIVITIES
Cash (used in) from operations..........................   $     17      $     147       $    92        $    256
                                                           --------      ---------       -------        --------
INVESTING ACTIVITIES
Cash received from sales of assets......................          1             48            --              49
Capital expenditures....................................        (58)          (172)          (31)           (261)
Acquisitions............................................         --            (12)           (5)            (17)
Other...................................................        (47)            --            --             (47)
                                                           --------      ---------       -------        --------

Cash used in investing activities ......................       (104)          (136)          (36)           (276)
                                                           --------      ---------       -------        --------
FINANCING ACTIVITIES
Repayment of debt.......................................       (111)          (333)         (857)         (1,301)
Issuances of debt.......................................        290             35           957           1,282
Distributions...........................................       (195)            --            --            (195)
Issuances of common units...............................          2             --            --               2
Issuances of Class A Preferred Units....................        100             --            --             100
Cost of extinguishment of debt..........................         --             --            (2)             (2)
Transfers to/from Parent................................       (198)           344          (146)             --
Other...................................................        (12)            --            --             (12)
                                                           --------      ---------       -------        --------

Cash (used in) from financing activities................       (124)            46           (48)           (126)
                                                           --------      ---------       -------        --------
INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS..........................................   $   (211)     $      57       $     8        $   (146)
                                                           ========      =========       =======        ========
</TABLE>

                                     -24-
<PAGE>

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


<TABLE>
<CAPTION>
                   Thirty-six Weeks Ended September 11, 1998

                                                                                          Non-
                                                                        Guarantor      Guarantor
                                                            Parent    Subsidiaries    Subsidiaries    Consolidated
                                                          ---------  --------------  --------------- --------------
<S>                                                        <C>           <C>             <C>            <C>
OPERATING ACTIVITIES
Cash from continuing operations.........................   $     (2)     $   149         $   107        $   254
Cash from discontinued operations.......................         24           --              --             24
                                                           --------      -------         -------        -------
Cash from operations....................................         22          149             107            278
                                                           --------      -------         -------        -------

INVESTING ACTIVITIES
Cash received from sales of assets......................        211           --              --            211
Capital expenditures....................................        (38)         (96)            (25)          (159)
Acquisitions............................................       (470)         (22)           (115)          (607)
Sales of short-term marketable securities, net..........        317           --              --            317
Other...................................................          5           --              --              5
                                                           --------      -------         -------        -------
Cash from (used in) investing activities from
   continuing operations................................         25         (118)           (140)          (233)
Cash used in investing activities from discontinued
   Operations...........................................        (10)          --              --            (10)
                                                           --------      -------         -------        -------
Cash from (used in) investing activities ...............         15         (118)           (140)          (243)
                                                           --------      -------         -------        -------

FINANCING ACTIVITIES
Repayment of debt.......................................     (1,596)         (56)            (18)        (1,670)
Issuances of debt.......................................      1,998            5               1          2,004
Costs of extinguishment of debt.........................       (175)          --              --           (175)
Transfers to/from Parent................................        (64)           5              59             --
Other...................................................        (14)          --              --            (14)
                                                           --------      -------         -------        -------
Cash from (used in) financing activities from
   continuing operations................................        149          (46)             42            145
Cash used in financing activities from discontinued
   operations...........................................       (152)          --              --           (152)
                                                           --------      -------         -------        -------
Cash (used in) from financing activities................         (3)         (46)             42             (7)
                                                           --------      -------         -------        -------

INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................................   $     34      $   (15)        $     9        $    28
                                                           ========      =======         =======        =======
</TABLE>

15.  Contingencies

     Courtyard by Marriott II Limited Partnership (CBM II)
     -----------------------------------------------------

     A group of partners in CBM II filed a lawsuit, Whitey Ford, et al. v. Host
     Marriott Corporation, et al., Case No. 96-CI-08327, on June 7, 1996, in the
     285th Judicial District Court of Bexar County, Texas against the Company
     and others alleging breach of fiduciary duty, breach of contract, fraud,
     negligent misrepresentation, tortious interference, violation of the Texas
     Free Enterprise and Antitrust Act of 1983 and conspiracy in connection with
     the formation, operation and management of CBM II and its hotels. The
     plaintiffs are seeking unspecified damages. On January 29, 1998, two other
     limited partners, A.R. Milkes and D.R. Burklew, filed a petition in
     intervention seeking to convert the lawsuit into a class action. The
     defendants have filed an answer, the class has been certified, class
     counsel has been appointed, and discovery is underway. On March 11, 1999,
     Palm Investors, L.L.C., the assignee of a number of limited partnership
     units acquired through various tender offers, filed a plea in intervention
     to bring additional claims relating to the 1993 split of Marriott
     Corporation and to the 1995 refinancing of CBM II's indebtedness. The
     original plaintiffs subsequently filed a second amended complaint on March
     19, 1999

                                     -25-
<PAGE>

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

     and in a third amended complaint, filed May 24, 1999, asserted as
     derivative claims, some of the claims previously asserted as individual
     claims. On March 25, 1999, Equity Resource, an assignee, through various of
     its funds, of a number of limited partnership units, also filed a plea in
     intervention similar to that which was filed by Palm Investors. A trial
     date of January 3, 2000 has been set.

     On August 17, 1999, the general partner of CBM II appointed an independent
     special litigation committee (the "SLC"), comprised of the Honorable
     William Webster and the Honorable Charles Renfrew, to investigate the
     derivative claims described above and to recommend to the general partner
     whether it is in the best interests of CBM II for the derivative litigation
     to proceed. The general partner has agreed to adopt the recommendation of
     the SLC. Under Delaware law, the recommendation of a duly appointed
     independent litigation committee is binding on the general partner and the
     limited partners. On August 30, 1999, the court held a hearing to consider
     the defendant's motion to stay these proceedings until the committee makes
     its recommendation. Similarly, the SLC has asked the court to postpone the
     trial for up to six months so that the SLC can complete its investigation.
     The court has not yet ruled on these requests.

     Courtyard by Marriott Limited Partnership I (CBM I) and CBM II Derivative
     -------------------------------------------------------------------------
     Action
     ------

     After intervening in the CBM II class action, Palm Investors and Equity
     Resource, together with Repp Properties, joined in a complaint filed in
     April 1999, Equity Resource Fund X et al. v. CBM One Corporation et al.,
     Case No. 99-CI-04765, in the 57th Judicial District Court of Bexar County,
     Texas. This action asserted as derivative claims, on behalf of CBM I and
     CBM II, the same kind of claims asserted individually in the Ford and
     Milkes actions described above. After the appointment of the SLC, this
     complaint was withdrawn by the plaintiffs in September 1999.

     Texas Multi-Partnership Lawsuits
     --------------------------------

     On March 16, 1998, limited partners in several limited partnerships
     sponsored by Host Marriott or its subsidiaries filed a lawsuit, Robert M.
     Haas, Sr. and Irwin Randolph Joint Tenants, et al. v. Marriott
     International, Inc., et al., Case No. 98-CI-04092, in the 57th Judicial
     District Court of Bexar County, Texas, alleging that the defendants
     conspired to sell hotels to the partnerships for inflated prices and that
     they charged the partnerships excessive management fees to operate the
     partnerships' hotels. The plaintiffs further allege that the defendants
     committed fraud, breached fiduciary duties and violated the provisions of
     various contracts. A Marriott International subsidiary manages each of the
     hotels involved and, as to some properties, Marriott International, or one
     of its subsidiaries, is the ground lessor and collects rent. The Company,
     Marriott International, several of their subsidiaries, and J.W. Marriott,
     Jr. are among the various named defendants. The plaintiffs are seeking
     unspecified damages. Those allegations concerning CBM II have been
     transferred to the CBM II lawsuit described above. On March 18, 1999, two
     limited partners in CBM I filed a class action petition in intervention
     seeking to treat CBM I in a similar manner by converting that portion of
     the lawsuit into a class action. On April 29, 1999, the court denied this
     petition and refused to certify the class. No trial date has been set.

     We are from time to time the subject of, or involved in, judicial
     proceedings, including those lawsuits discussed above and also other
     lawsuits involving other syndicated partnerships which could, if adversely
     decided, result in losses to our Company. We believe that the lawsuits
     described above are without merit, and we intend to vigorously defend
     against the claims being made against us. we cannot assure you as to the
     outcome of these lawsuits, and we are uncertain as to any potential loss to
     the Company.

                                     -26-
<PAGE>

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

16.  Extraordinary Items

     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 in the form of
     accrued incentive management fees in the second quarter. An extraordinary
     loss of $3 million representing the write-off of deferred financing fees
     occurred in July 1999 when the mortgage debt for eight properties was
     refinanced, including the New York Marriott Marquis. In connection with
     this refinancing, the interest rate swap agreements associated with some of
     the original debt were terminated and a $7 million extraordinary gain was
     recognized. In connection with the purchase of the Old Senior Notes, the
     Company recognized an extraordinary loss of $148 million in the third
     quarter of 1998, which represents the bond premium and consent payments
     totaling approximately $175 million and the write-off of deferred financing
     fees of approximately $52 million related to the Old Senior Notes, net of
     taxes.

                                     -27-
<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 results with 1998 is also affected
     by a change in the reporting period for the Company's hotels not managed by
     Marriott International. The 1998 year to date historical results would have
     to be adjusted to exclude the results of these hotels for December 1997 and
     include August 1998 for the thirty-six weeks ended September 11, 1998 in
     order to be comparable to the 1999 period results as reported. Also, for
     the third quarter the 1998 historical results would have to be adjusted to
     exclude the results of these hotels for May 1998 and include August 1998
     for the twelve weeks ended September 11, 1998 in order to be comparable to
     the 1999 period results as reported. The change in reporting was required
     as part of the REIT conversion.


     Year-to-date results for 1999 were primarily driven by the addition of 36
     properties in 1998. The increase in hotel sales also reflects the growth in
     room revenues generated per available room or REVPAR. For comparable
     properties, REVPAR increased 2.8% to $106.45 for the third quarter of 1999.
     Year-to-date REVPAR increased 3.8% to $115.40. On a comparable basis,
     average room rates increased approximately 3% for the third quarter and
     year-to-date, while average occupancy decreased less than one percentage
     point for the third quarter and increased less than one percentage point
     year-to-date.

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

                                     -28-
<PAGE>

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

     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.

     Expenses. As discussed above, hotel revenues and hotel operating costs are
     not comparable with the prior year. The lessee pays certain direct
     property-level costs including management fees and we receive a rent
     payment, which is generally calculated as a percentage of revenue, subject
     to a minimum level, net of certain property-level owner costs. All of these
     costs were our expenses in 1998. Property-level owner costs which are
     comparable, including depreciation, property taxes, insurance, ground and
     equipment rent increased 8% to $130 million for the third quarter 1999
     versus third quarter 1998 and increased $28 million or 8% to $383 million
     year-to-date, primarily reflecting the depreciation from 36 properties
     acquired during 1998.


     Minority Interest. Minority interest expense decreased $4 million to $2
     million for the third quarter of 1999 and decreased $23 million to $13
     million year-to-date, primarily reflecting the impact of the consolidation
     of partnerships which occurred as part of the REIT conversion.


     Interest Expense. Interest expense increased 37% to $108 million in the
     third quarter of 1999 and increased 41% to $325 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 Corporation, and additional mortgage debt on properties
     acquired in 1998.

     Dividends on Convertible Preferred Securities. The dividends on the
     Convertible Preferred Securities reflect the amount accrued for the first
     three quarters of fiscal year 1998 on the $550 million in 6 3/4%
     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 Corporation on our 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 $6 million to $6 million
     for the third quarter of 1999 and decreased $11 million to $22 million
     year-to-date, resulting primarily from lower staffing levels after the
     Crestline spin-off, lower costs associated with reduced acquisition
     activity and lower costs related to various stock compensation plans.

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

     Extraordinary Gain (Loss). 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 in the form of accrued incentive management fees in the
     second quarter. An extraordinary loss of $3 million representing the
     write-off of deferred financing fees occurred in July 1999 when the
     mortgage debt for eight properties was refinanced, including the New York
     Marriott Marquis. In connection with this refinancing, the interest rate
     swap agreements associated with some of the original debt were terminated
     and a $7 million extraordinary gain was recognized. In connection with the
     purchase of the Old Senior Notes, the Company recognized an extraordinary
     loss of $148 million in the third quarter of 1998, which represents the
     bond premium and consent payments

                                     -29-
<PAGE>

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

     totaling approximately $175 million and the write-off of deferred financing
     fees of approximately $52 million related to the Old Senior Notes, net of
     taxes.


     Net Loss. Our net loss decreased to $40 million for the third quarter of
     1999 from $144 million for the third quarter of 1998 and increased to $138
     million for year-to-date 1999 compared to $48 million for 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. FFO and
     EBITDA are also useful in measuring our ability to service debt, fund
     capital expenditures and expand our business. Furthermore, management
     believes that FFO and EBITDA are meaningful disclosures that will help
     shareholders and the investment community to better understand our
     financial performance, including comparing our performance to other Real
     Estate Investment Trusts. However, FFO and EBITDA as presented may not be
     comparable to amounts calculated by other companies. This information
     should not be considered as an alternative to net income, operating profit,
     cash from operations, or any other operating or liquidity performance
     measure prescribed by generally accepted accounting principles. Cash
     expenditures for various long-term assets, interest expense (for EBITDA
     purposes only) and income taxes have been, and will be incurred which are
     not reflected in the EBITDA and FFO presentation.

     FFO increased $36 million, or 47%, to $112 million in the third quarter of
     1999 over the third quarter of 1998. 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          Thirty-six weeks Ended
                                                   ------------------------------  -----------------------------
                                                    September 10,   September 11,  September 10,   September, 11
                                                       1999            1998            1999           1998
                                                   --------------   -------------  -------------   -------------

<S>                                                 <C>              <C>            <C>             <C>
Funds from Operations
Income (loss) from continuing operations.....       $    (44)        $      2       $   (155)       $     92
Effect of SAB 101............................             86               --            339              --
Depreciation and amortization................             68               54            203             168
Other real estate activities.................             --               (1)           (16)            (53)
Partnership adjustments......................              2               (2)            10              (9)
REIT conversion expenses.....................             --                8             --              14
Deferred taxes...............................             --                7             --              46
                                                    --------         --------       --------        --------
Funds from continuing operations.............            112               68            381             258
Discontinued operations......................             --                8             --              24
                                                    --------         --------       --------        --------
Funds from operations before distribution on
  Class A Preferred Units....................            112               76            381             282
Distributions on Class A Preferred Units.....             (1)              --             (1)             --
                                                    --------         --------       --------        --------
Funds from operations available to common ...
  OP unitholders.............................       $    111         $     76       $    380        $    282
                                                    ========         ========       ========        ========
</TABLE>

                                     -30-
<PAGE>

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

      EBITDA increased $56 million, or 36%, to $212 million in the third quarter
      of 1999 and $126 million or 22%, to $694 million year-to-date. Hotel
      EBITDA increased $43 million, or 26%, to $210 million in the third quarter
      of 1999, and $111 million or 19% to $703 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         Thirty-six Weeks Ended
                                                        ----------------------------  -----------------------------
                                                        September 10,  September 11,  September 10,  September 11,
                                                            1999          1998           1999             1998
                                                        ------------  --------------  -----------------------------
<S>                                                        <C>           <C>            <C>              <C>
EBITDA................................................     $   212       $   156        $   694          $   568
Effect of SAB 101.....................................         (86)           --           (339)              --
Interest expense......................................        (108)          (79)          (325)            (231)
Dividends on Convertible Preferred Securities.........          --            (9)            --              (26)
Depreciation and amortization.........................         (68)          (54)          (203)            (168)
Minority interest expense.............................          (2)           (6)           (13)             (36)
Income taxes..........................................          --            (6)            --              (69)
REIT Conversion expense...............................          --            (8)            --              (14)
Other non-cash charges, net...........................           8             8             31               68
                                                           -------       -------        -------          -------
  Income (loss) from continuing operations............     $   (44)      $     2        $  (155)         $    92
                                                           =======       =======        =======          =======
</TABLE>

     Our interest coverage, defined as EBITDA divided by cash interest expense,
     was 2.2 times and 2.4 times year to date for 1999 and 1998, respectively,
     and 2.7 times for full year 1998. The deficiency of earnings to fixed
     charges was $140 million through the third quarter of 1999 and the ratio of
     earnings to fixed charges was 1.7 to 1 through the third quarter of 1998.


     Cash Flows and Financial Condition

     We reported a decrease in cash and cash equivalents of $146 million during
     the thirty-six weeks ended September 10, 1999. Cash from continuing
     operations was $256 million through the third quarter of 1999 and $254
     million through the third quarter of 1998. There was no cash activity
     related to discontinued operations through the third quarter of 1999;
     however, cash from discontinued operations totaled $24 million through the
     third quarter of 1998.

     Cash used in investing activities from continuing operations was $276
     million and $233 million through the third quarter of 1999 and 1998,
     respectively. Cash used in investing activities through the third quarter
     includes capital expenditures of $261 million and $159 million for 1999 and
     1998, respectively, mostly related to renewals and replacements on existing
     properties and development projects. In addition, we generated $49 million
     of cash from the net sale of assets, primarily the Minneapolis/Bloomington
     and Saddle Brook properties. There was no cash related to investing
     activities from discontinued operations through the third quarter 1999;
     however, cash used in investing activities from discontinued operations
     totaled $10 million year-to-date 1998. Property and equipment balances
     include $162 million and $78 million for construction in progress as of
     September 10, 1999 and December 31, 1998, respectively. The current balance
     primarily relates to properties in Tampa, Orlando, Memphis, Naples and
     various other expansion and development projects.

                                     -31-
<PAGE>

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

      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 Class TS Preferred Units, respectively. The Class TS Preferred
      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 Class TS Preferred Units for OP Units or cash.
      Also as part of the merger, the Company re-paid in cash outstanding
      Partner loans totaling $5.9 million on behalf of each of the partnerships.

      Cash used in financing activities from continuing operations was $126
      million through the third quarter of 1999. Cash from financing activities
      from continuing operations was $145 million through the third quarter of
      1998. Cash used in financing activities includes $1.3 billion in
      prepayment of debt, offset by a similar amount of debt issuances, the
      issuance of preferred stock and the payment of distributions.

      The $300 million of 83/8% series D senior notes were issued in February
      1999 and 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, the Series D Senior notes were exchanged on a one-for-one
      basis for Series E Senior notes, which 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 million financing
     agreement completed in the third quarter of 1999. The financing agreement
     for $665 million is secured by eight hotels, and is due 2009 with a fixed
     interest rate of 7.47%. The proceeds from this financing were used to
     refinance existing mortgage indebtedness maturing at various times through
     2000 on eight hotels including the New York Marriott Marquis.

     Also in June 1999, we refinanced the debt on the San Diego Marriott Marina
     & Hotel. 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.
     We established a mortgage on the extension of the Philadelphia Marriott in
     July 1999 for $23 million at an interest rate of approximately 8.6%,
     maturing in 2009.

     In August 1999, we repaid $100 million of the outstanding balance on a $350
     million term loan entered into in August 1998 as part of our $1.25 billion
     line of credit. During the fourth quarter, an additional $50 million
     repayment was made, reducing the outstanding balance of the term loan to
     $200 million. Subsequent to these repayments, the available capacity under
     the line of credit balance remains $900 million while the total line has
     been permanently reduced to $1.1 billion as a result of the term loan
     payments.

     In August 1999, the Company made a prepayment of $19 million to pay down in
     full the mezzanine mortgage on the Marriott Desert Springs Resort and Spa.
     In September 1999, the Company made a prepayment of $45 million to pay down
     in full the mortgage note on the Philadelphia Four Seasons Hotel.


     Distributions reflect the $73 million in payments for a special
     distribution declared in December 1998 as well as the $0.42 distribution
     per common unit paid as of September 11, 1999. In addition, on September
     23, 1999, the Board of Directors declared a regular cash distribution of
     $0.21 per unit. The


                                     -32-
<PAGE>

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

     third quarter distribution was paid on October 15, 1999 to unit holders of
     record on September 30, 1999. Total distributions year-to-date are $0.63
     per common unit.


     In August 1999, Host Marriott sold 4.16 million shares of 10% Class A
     Preferred Shares with a $0.01 par value and we issued an equivalent
     security, the Class A Preferred Units to Host Marriott Corporation. Holders
     of the shares 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. A
     corresponding distribution on the Class A Preferred Units is also payable
     quarterly in arrears commencing October 15, 1999. After August 3, 2004 Host
     Marriott Corporation has the option to redeem the Class A Preferred Shares
     for $25.00 per share, plus accrued and unpaid dividends to the date of
     redemption. The Class A Preferred Units rank senior to the common units and
     the Class TS Preferred Units. The Class A Preferred shareholders generally
     have no voting rights.

     Cumulative cash distributions on the Class A Preferred Units have been
     accrued from the date of issuance, August 3, 1999, through the balance
     sheet date. The Company declared a pro rata distribution of $0.50 per unit
     on September 23, 1999, which was paid on October 15, 1999.

     In September 1999, the Board of Directors of Host Marriott Corporation
     approved the repurchase, from time to time on the open market and/or in
     privately negotiated transactions, of up to 22 million of the outstanding
     shares of Host Marriott common stock or a corresponding amount (based on
     the appropriate conversion ratio) of Host Marriott Convertible Preferred
     Securities. Based on current market conditions, we believe that the stock
     repurchase program reflects the best return on investment for our
     shareholders. However, we will continue to look at strategic acquisitions
     as well as evaluate our stock repurchase program based on changes in market
     conditions and our stock price. The repurchases will be financed in part
     through cash from operations and the net proceeds from sales of assets,
     prior to their reinvestment in real estate activities, such as the fourth
     quarter sale of the Grand Hotel Resort and Golf Club or the recently
     announced contract to sell our interest in the Ritz-Carlton Boston. This is
     consistent with our strategy of improving the overall portfolio by selling
     assets that may be in suburban locations, require significant capital
     improvements or do not fit our long-term strategy. Such repurchases will be
     made at management's discretion, subject to market conditions, and may be
     suspended at any time at our discretion. Additionally, under the terms of
     the partnership agreement, an equivalent number of OP units will also be
     repurchased on a one-for-one basis from Host Marriott Corporation.
     Subsequent to quarter end, we have spent approximately $7.7 million to
     repurchase 797,000 units.

     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. Approximately 467,000 OP Units issued in connection with the
     Blackstone Acquisition were redeemed for Host Marriott Corporation common
     stock during the third quarter of 1999.

     There was no cash related to financing activities from discontinued
     operations through the third quarter of 1999; however, cash used in
     financing activities from discontinued operations totaled $152 million
     through the third quarter of 1998.

     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

                                     -33-
<PAGE>

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

     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 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 other centralized costs 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-

                                     -34-
<PAGE>

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

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.

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
September 10, 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 over 90 percent of key
systems, with most of the remaining work in its final stage. For BIS and
Building Systems, Remediation/Replacement is over 95 percent complete. For BIS,
Testing is approximately 80 percent complete and Compliance Validation is in
progress. Testing is over 95% complete for Building Systems and Compliance
Validation is in progress. Implementation is approximately 85 percent complete
and Quality Assurance is 80 percent complete for IT Applications. For BIS,
Implementation is approximately 85 percent complete while Quality Assurance is
in progress. Implementation is over 95 percent complete and Quality Assurance is
in progress for Building Systems.

                                     -35-
<PAGE>

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

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 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.


                                     -36-
<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)

                                      37