##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended March 23, 2007.

OR



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

Commission file number 0-25087



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HOST HOTELS & RESORTS, L.P.

(Exact Name of Registrant as Specified in Its Charter)



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|                         |  |                                     
|------------------------ |  | ------------------------------------
|Delaware                 |  | 52-2095412                          
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)



|                                                     |  |           
|---------------------------------------------------- |  | ----------
|6903 Rockledge Drive, Suite 1500, Bethesda, Maryland |  | 20817     
|(Address of Principal Executive Offices)             |  | (Zip Code)

(240) 744-1000

(Registrants telephone number, including area code)



---

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes ̈No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large Accelerated
filer ̈Accelerated filer ̈Non-Accelerated filer  x

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ̈Yes    x  No



|                                      |  |                                       
|------------------------------------- |  | --------------------------------------
|Class                                 |  | Units outstanding as of April 25, 2007
|Units of limited partnership interest |  | 540,618,420                           



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##### Table of Contents

INDEX



|        |  |                                                                                                             |  |         
|------- |  | ----------------------------------------------------------------------------------------------------------- |  | --------
|        |  |                                                                                                             |  | Page No.
|        |  | PART I. FINANCIAL INFORMATION                                                                               |  |         
|Item 1. |  | Financial Statements:                                                                                       |  |         
|        |  | Condensed Consolidated Balance Sheets-March 23, 2007 (unaudited) and December 31, 2006                      |  | 3       
|        |  |                                                                                                            
|        |  | Condensed Consolidated Statements of Operations (unaudited)-Quarter Ended March 23, 2007 and March 24, 2006 |  | 4       
|        |  |                                                                                                            
|        |  | Condensed Consolidated Statements of Cash Flows (unaudited)-Quarter Ended March 23, 2007 and March 24, 2006 |  | 5       
|        |  |                                                                                                            
|        |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                            |  | 7       
|        |  |                                                                                                            
|Item 2. |  | Managements Discussion and Analysis of Results of Operations and Financial Condition                       |  | 16      
|        |  |                                                                                                            
|Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                                                  |  | 31      
|        |  |                                                                                                            
|Item 4. |  | Controls and Procedures                                                                                     |  | 31      
|        |  |                                                                                                            
|        |  | PART II. OTHER INFORMATION                                                                                  |  |         
|        |  |                                                                                                            
|Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                 |  | 32      
|        |  |                                                                                                            
|Item 6. |  | Exhibits                                                                                                    |  | 32      



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##### Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEETS

March 23, 2007 and December 31, 2006

(in millions)



|                                                                                                                                                                                  |  |               |        |                  |   |       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------ | ---------------- | - | ------
|                                                                                                                                                                                  |  | March 23,2007 |        | December 31,2006
|                                                                                                                                                                                  |  | (unaudited)   |        |                 
|ASSETS                                                                                                                                                                            |  |               |        |                  |   |       
|Property and equipment, net                                                                                                                                                       |  | $             | 10,501 |                  | $ | 10,584
|Assets held for sale                                                                                                                                                              |  |               |       |                  |   | 96    
|Due from managers                                                                                                                                                                 |  |               | 89     |                  |   | 51    
|Investments in affiliates                                                                                                                                                         |  |               | 161    |                  |   | 160   
|Deferred financing costs, net                                                                                                                                                     |  |               | 62     |                  |   | 60    
|Furniture, fixtures and equipment replacement fund                                                                                                                                |  |               | 94     |                  |   | 100   
|Other                                                                                                                                                                             |  |               | 185    |                  |   | 196   
|Restricted cash                                                                                                                                                                   |  |               | 175    |                  |   | 194   
|Cash and cash equivalents                                                                                                                                                         |  |               | 1,171  |                  |   | 364   
|                                                                                                                                                                                  |  |               |        |                  |   |       
|Total assets                                                                                                                                                                      |  | $             | 12,438 |                  | $ | 11,805
|                                                                                                                                                                                  |  |               |        |                  |   |       
|                                                                                                                                                                                  |  |              
|LIABILITIES AND PARTNERS CAPITAL                                                                                                                                                 |  |               |        |                  |   |       
|                                                                                                                                                                                  |  |              
|Debt                                                                                                                                                                              |  |               |        |                  |   |       
|Senior notes, including $1,086 million and $495 million, respectively, net of discount, of   Exchangeable Senior Debentures                                                       |  | $             | 4,117  |                  | $ | 3,526 
|Mortgage debt                                                                                                                                                                     |  |               | 2,262  |                  |   | 2,014 
|Credit facility                                                                                                                                                                   |  |               |       |                  |   | 250   
|Other                                                                                                                                                                             |  |               | 88     |                  |   | 88    
|                                                                                                                                                                                  |  |               |        |                  |   |       
|Total debt                                                                                                                                                                        |  |               | 6,467  |                  |   | 5,878 
|Accounts payable and accrued expenses                                                                                                                                             |  |               | 217    |                  |   | 243   
|Other                                                                                                                                                                             |  |               | 230    |                  |   | 252   
|                                                                                                                                                                                  |  |               |        |                  |   |       
|Total liabilities                                                                                                                                                                 |  |               | 6,914  |                  |   | 6,373 
|                                                                                                                                                                                  |  |               |        |                  |   |       
|Minority interest                                                                                                                                                                 |  |               | 32     |                  |   | 28    
|Limited partnership interests of third parties at redemption value (representing 18.6 million units and 18.8 million units at
March 23, 2007 and December 31, 2006, respectively) |  |               | 499    |                  |   | 462   
|                                                                                                                                                                                  |  |              
|Partners capital                                                                                                                                                                 |  |               |        |                  |   |       
|General partner                                                                                                                                                                   |  |               | 1      |                  |   | 1     
|Cumulative redeemable preferred limited partner                                                                                                                                   |  |               | 97     |                  |   | 97    
|Limited partner                                                                                                                                                                   |  |               | 4,870  |                  |   | 4,819 
|Accumulated other comprehensive income                                                                                                                                            |  |               | 25     |                  |   | 25    
|                                                                                                                                                                                  |  |               |        |                  |   |       
|Total partners capital                                                                                                                                                           |  |               | 4,993  |                  |   | 4,942 
|                                                                                                                                                                                  |  |               |        |                  |   |       
|Total liabilities and partners capital                                                                                                                                           |  | $             | 12,438 |                  | $ | 11,805
|                                                                                                                                                                                  |  |               |        |                  |   |       

See notes to condensed consolidated statements.



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##### Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended March 23, 2007 and March 24, 2006

(unaudited, in millions, except per unit amounts)



|                                           |  |               |       |   |               |   |     |  
|------------------------------------------ |  | ------------- | ----- | - | ------------- | - | --- | -
|                                           |  | Quarter ended |      
|                                           |  | March 23,2007 |       |   | March 24,2006 |  
|REVENUES                                   |  |               |       |   |               |   |     |  
|Rooms                                      |  | $             | 614   |   |               | $ | 487 |  
|Food and beverage                          |  |               | 323   |   |               |   | 259 |  
|Other                                      |  |               | 69    |   |               |   | 50  |  
|                                           |  |               |       |   |               |   |     |  
|Total hotel sales                          |  |               | 1,006 |   |               |   | 796 |  
|Rental income                              |  |               | 31    |   |               |   | 29  |  
|                                           |  |               |       |   |               |   |     |  
|Total revenues                             |  |               | 1,037 |   |               |   | 825 |  
|                                           |  |               |       |   |               |   |     |  
|EXPENSES                                   |  |               |       |   |               |   |     |  
|Rooms                                      |  |               | 152   |   |               |   | 118 |  
|Food and beverage                          |  |               | 237   |   |               |   | 191 |  
|Hotel departmental expenses                |  |               | 251   |   |               |   | 204 |  
|Management fees                            |  |               | 45    |   |               |   | 34  |  
|Other property-level expenses              |  |               | 81    |   |               |   | 61  |  
|Depreciation and amortization              |  |               | 116   |   |               |   | 87  |  
|Corporate and other expenses               |  |               | 21    |   |               |   | 20  |  
|                                           |  |               |       |   |               |   |     |  
|Total operating costs and expenses         |  |               | 903   |   |               |   | 715 |  
|                                           |  |               |       |   |               |   |     |  
|OPERATING PROFIT                           |  |               | 134   |   |               |   | 110 |  
|Interest income                            |  |               | 6     |   |               |   | 5   |  
|Interest expense                           |  |               | (94   | ) |               |   | (91 | )
|Net gains on property transactions         |  |               | 1     |   |               |   | 1   |  
|Minority interest expense                  |  |               | (4    | ) |               |   | (4  | )
|Equity in earnings of affiliates           |  |               | 2     |   |               |   | 1   |  
|                                           |  |               |       |   |               |   |     |  
|INCOME BEFORE INCOME TAXES                 |  |               | 45    |   |               |   | 22  |  
|Benefit (provision) for income taxes       |  |               | 5     |   |               |   | (1  | )
|                                           |  |               |       |   |               |   |     |  
|INCOME FROM CONTINUING OPERATIONS          |  |               | 50    |   |               |   | 21  |  
|Income from discontinued operations        |  |               | 144   |   |               |   | 160 |  
|                                           |  |               |       |   |               |   |     |  
|NET INCOME                                 |  |               | 194   |   |               |   | 181 |  
|Less: Distributions on preferred units     |  |               | (2    | ) |               |   | (6  | )
|                                           |  |               |       |   |               |   |     |  
|NET INCOME AVAILABLE TO COMMON UNITHOLDERS |  | $             | 192   |   |               | $ | 175 |  
|                                           |  |               |       |   |               |   |     |  
|BASIC EARNINGS PER COMMON UNIT:            |  |               |       |   |               |   |     |  
|Continuing operations                      |  | $             | .09   |   |               | $ | .04 |  
|Discontinued operations                    |  |               | .27   |   |               |   | .40 |  
|                                           |  |               |       |   |               |   |     |  
|BASIC EARNINGS PER COMMON UNIT             |  | $             | .36   |   |               | $ | .44 |  
|                                           |  |               |       |   |               |   |     |  
|DILUTED EARNINGS PER COMMON UNIT:          |  |               |       |   |               |   |     |  
|Continuing operations                      |  | $             | .09   |   |               | $ | .04 |  
|Discontinued operations                    |  |               | .26   |   |               |   | .40 |  
|                                           |  |               |       |   |               |   |     |  
|DILUTED EARNINGS PER COMMON UNIT           |  | $             | .35   |   |               | $ | .44 |  
|                                           |  |               |       |   |               |   |     |  

See notes to condensed consolidated statements.



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##### Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Quarter Ended March 23, 2007 and March 24, 2006

(unaudited, in millions)



|                                                            |  |               |       |   |               |   |      |  
|----------------------------------------------------------- |  | ------------- | ----- | - | ------------- | - | ---- | -
|                                                            |  | Quarter ended |      
|                                                            |  | March 23,2007 |       |   | March 24,2006 |  
|OPERATING ACTIVITIES                                        |  |               |       |   |               |   |      |  
|Net income                                                  |  | $             | 194   |   |               | $ | 181  |  
|Adjustments to reconcile to cash provided by operations:    |  |               |       |   |               |   |      |  
|Discontinued operations:                                    |  |               |       |   |               |   |      |  
|Gain on dispositions                                        |  |               | (141  | ) |               |   | (153 | )
|Depreciation                                                |  |               | 1     |   |               |   | 3    |  
|Depreciation and amortization                               |  |               | 116   |   |               |   | 87   |  
|Amortization of deferred financing costs                    |  |               | 3     |   |               |   | 3    |  
|Deferred income taxes                                       |  |               | (6    | ) |               |   | (1   | )
|Net gains on property transactions                          |  |               | (1    | ) |               |   | (1   | )
|Equity in earnings of affiliates                            |  |               | (2    | ) |               |   | (1   | )
|Distributions from investments in affiliates                |  |               | 2     |   |               |   | 1    |  
|Minority interest expense                                   |  |               | 4     |   |               |   | 4    |  
|Change in due from managers                                 |  |               | (38   | ) |               |   | (39  | )
|Changes in other assets                                     |  |               | 3     |   |               |   | 31   |  
|Changes in other liabilities                                |  |               | (14   | ) |               |   | (15  | )
|                                                            |  |               |       |   |               |   |      |  
|Cash provided by operations                                 |  |               | 121   |   |               |   | 100  |  
|                                                            |  |               |       |   |               |   |      |  
|INVESTING ACTIVITIES                                        |  |               |       |   |               |   |      |  
|Proceeds from sales of assets, net                          |  |               | 331   |   |               |   | 251  |  
|Acquisitions                                                |  |               | (15   | ) |               |   |     |  
|Capital expenditures:                                       |  |               |       |   |               |   |      |  
|Renewals and replacements                                   |  |               | (52   | ) |               |   | (82  | )
|Repositionings and other investments                        |  |               | (67   | ) |               |   | (37  | )
|Change in furniture, fixtures and equipment (FF&E) reserves |  |               | 6     |   |               |   | 14   |  
|Change in restricted cash designated for FF&E reserves      |  |               | 2     |   |               |   | (3   | )
|Other                                                       |  |               | 18    |   |               |   |     |  
|                                                            |  |               |       |   |               |   |      |  
|Cash provided by investing activities                       |  |               | 223   |   |               |   | 143  |  
|                                                            |  |               |       |   |               |   |      |  
|FINANCING ACTIVITIES                                        |  |               |       |   |               |   |      |  
|Financing costs                                             |  |               | (5    | ) |               |   | (2   | )
|Debt issuances                                              |  |               | 1,025 |   |               |   | 116  |  
|Repayment of credit facility                                |  |               | (250  | ) |               |   | (20  | )
|Debt prepayments                                            |  |               | (175  | ) |               |   |     |  
|Scheduled principal repayments                              |  |               | (11   | ) |               |   | (13  | )
|Distributions on common OP units                            |  |               | (135  | ) |               |   | (43  | )
|Distributions on preferred OP units                         |  |               | (2    | ) |               |   | (6   | )
|Distributions to minority interests                         |  |               | (1    | ) |               |   | (2   | )
|Change in restricted cash                                   |  |               | 17    |   |               |   | 24   |  
|                                                            |  |               |       |   |               |   |      |  
|Cash provided by financing activities                       |  |               | 463   |   |               |   | 54   |  
|                                                            |  |               |       |   |               |   |      |  
|INCREASE IN CASH AND CASH EQUIVALENTS                       |  |               | 807   |   |               |   | 297  |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              |  |               | 364   |   |               |   | 184  |  
|                                                            |  |               |       |   |               |   |      |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                    |  | $             | 1,171 |   |               | $ | 481  |  
|                                                            |  |               |       |   |               |   |      |  

See notes to condensed consolidated statements.



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##### Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Quarter Ended March 23, 2007 and March 24, 2006

(unaudited, in millions)

Supplemental disclosure of cash flow information:



|                  |  |               |    |               |   |   
|----------------- |  | ------------- | -- | ------------- | - | --
|                  |  | Quarter ended
|                  |  | March 23,2007 |    | March 24,2006
|Interest paid     |  | $             | 71 |               | $ | 91
|Income taxes paid |  |               | 2  |               |   | 1 

Supplemental disclosure of noncash investing and financing activities:

During the first quarter of 2007 and 2006, minority partners converted operating partnership units, or OP units, valued at approximately $5 million
and $13 million, respectively, in exchange for approximately 0.2 million and 0.7 million shares, respectively, of Host Hotels & Resorts, Inc., or Host, common stock.

During the first quarter of 2006, Host issued approximately 24.0 million shares of its common stock upon the conversion of approximately
7.4 million of its Convertible Subordinated Debentures valued at approximately $368 million. Additionally, as a result of the conversion, Host consolidated the wholly owned entity that issued the Convertible Subordinated Debentures and
eliminated the $17 million investment not held by third parties. For each share of common stock issued by Host, we issued an equivalent number of OP units to Host.

See notes to condensed consolidated statements.



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##### Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|1. | Organization
|-- | ------------

Host Hotels &
Resorts, L.P. (Host LP), a Delaware limited partnership, operating through an umbrella partnership structure with Host Hotels & Resorts, Inc., or Host, as the sole general partner, is primarily the owner of hotel properties. Host operates
as a self-managed and self-administered real estate investment trust, or REIT, with its operations conducted solely through us and our subsidiaries. As of March 23, 2007, Host held 96.6% of our operating partnership interests, or OP units.



|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles, or GAAP, in the accompanying unaudited condensed
consolidated financial statements. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited condensed consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in our Annual Report on Form 10K for the year ended December 31, 2006.

In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of March 23, 2007 and the results of our
operations and cash flows for the quarters ended March 23, 2007 and March 24, 2006. Interim results are not necessarily indicative of full year performance because of the impact of seasonal and short-term variations.

Certain prior year financial statement amounts have been reclassified to conform with the current presentation.

Reporting Periods

The results we report are based on results of our hotels reported to us by our hotel managers. Our hotel managers use different reporting periods. Marriott International, Inc., the manager of the majority of our properties, uses a fiscal
year ending on the Friday closest to December 31 and reports twelve weeks of operations for each of the first three quarters of the year and sixteen or seventeen weeks for the fourth quarter of the year. In contrast, other managers of our
hotels, such as Starwood and Hyatt, report results on a monthly basis. For results reported by hotel managers using a monthly reporting period (approximately 40% of our hotels), the month of operation that ends after our fiscal quarter-end is
included in our results of operations in the following fiscal quarter. Accordingly, our results of operations include results from hotel managers reporting results on a monthly basis as follows: first quarter (January, February), second quarter
(March to May), third quarter (June to August), and fourth quarter (September to December). We elected to adopt the reporting period used by Marriott International modified so that our fiscal year always ends on December 31. Accordingly, our
first three quarters of operations end on the same day as Marriott International but our fourth quarter ends on December 31.

Application of New Accounting Standards

As a partnership for federal income tax purposes, we are not
subject to Federal income tax. We are, however, subject to state, local and foreign income and franchise tax in certain jurisdictions. In addition, each of our taxable REIT subsidiaries is taxable as a regular C corporation. Host has elected to be
treated as a REIT under the provisions of the Internal Revenue Code and, as such, is not subject to federal income tax, provided they distribute all their taxable income annually to their stockholders and comply with certain other requirements. In
addition to paying federal and state income tax on any retained income, Host is subject to taxes on built-in-gains on sales of certain assets. Additionally, Hosts taxable REIT subsidiaries are subject to federal, state and foreign
income tax. The consolidated income tax provision or benefit includes the income tax provision or benefit related to the operations of the taxable REIT subsidiaries, state income and franchise taxes incurred by Host and us and foreign income taxes
incurred by Host LP.

Host adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, (FIN 48) on January 1, 2007. As a result, Host recognized an approximate $11 million reduction in the deferred tax liabilities, which was recorded as an increase to retained earnings as of January 1, 2007, and,
as a result, increased our partners capital. The remaining balance of unrecognized tax benefits as of the date of adoption is approximately $4 million. All of such amount, if recognized, would impact Hosts reconciliation between the
income tax provision (benefit) calculated at the statutory federal income tax rate of 35% and the actual income tax provision (benefit) recorded each year. We believe that there will be no additional significant changes in unrecognized tax benefits
that are reasonably possible in 2007. Host also accrued approximately $.5 million for the payment of interest and penalties as of the date of adoption. Host recognizes interest accrued related to uncertain tax positions in interest expense and
penalties in operating expenses. Host, or its subsidiaries, file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. Hosts open tax years generally include tax years 2003-2006 as of the date of
adoption.



7



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##### Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|3. | Earnings per Common Unit
|-- | ------------------------

Basic
earnings per common unit is computed by dividing net income available to common unitholders by the weighted average number of common OP units outstanding. Diluted earnings per common unit is computed by dividing net income available to common
unitholders as adjusted for potentially dilutive securities, by the weighted average number of units of common OP units outstanding plus potentially dilutive securities. Dilutive securities may include units distributed to Host for Host common
shares granted under comprehensive stock plans, preferred OP units held by minority partners, exchangeable debt securities and other minority interests that have the option to convert their interests to common OP units. No effect is shown for
securities that are anti-dilutive.



|                                                                                                                                                         |  |                                        |     |   |                |       |                |   |      |        |  |   |       |   |                 |       |  |   |      |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | --- | - | -------------- | ----- | -------------- | - | ---- | ------ |  | - | ----- | - | --------------- | ----- |  | - | ---- | -
|                                                                                                                                                         |  | Quarter ended                          |    
|                                                                                                                                                         |  | March 23, 2007                         |     |   | March 24, 2006 |      
|                                                                                                                                                         |  | (in millions, except per unit amounts) |    
|                                                                                                                                                         |  | Income                                 |     |   | Units          |       | Per UnitAmount |   |      | Income |  |   | Units |   | Per Unit Amount |      
|Net income                                                                                                                                               |  | $                                      | 194 |   |                | 540.2 |                | $ | .36  |        |  | $ | 181   |   |                 | 397.5 |  | $ | .46  |  
|Distributions on preferred units                                                                                                                         |  |                                        | (2  | ) |                |      |                |   |     |        |  |   | (6    | ) |                 |      |  |   | (.02 | )
|                                                                                                                                                         |  |                                        |     |   |                |       |                |   |      |        |  |   |       |   |                 |       |  |   |      |  
|Basic earnings available to common unitholders                                                                                                           |  |                                        | 192 |   |                | 540.2 |                |   | .36  |        |  |   | 175   |   |                 | 397.5 |  |   | .44  |  
|Assuming distribution of units to Host for Host shares granted under its comprehensive stock plan, less shares assumed purchased at average
market price |  |                                        |    |   |                | .8    |                |   |     |        |  |   |      |   |                 | .9    |  |   |     |  
|Assuming conversion of minority OP units issuable                                                                                                        |  |                                        |    |   |                | 1.2   |                |   | (.01 | )      |  |   |      |   |                 |      |  |   |     |  
|                                                                                                                                                         |  |                                        |     |   |                |       |                |   |      |        |  |   |       |   |                 |       |  |   |      |  
|Diluted earnings available to common unitholders                                                                                                         |  | $                                      | 192 |   |                | 542.2 |                | $ | .35  |        |  | $ | 175   |   |                 | 398.4 |  | $ | .44  |  
|                                                                                                                                                         |  |                                        |     |   |                |       |                |   |      |        |  |   |       |   |                 |       |  |   |      |  



|4. | Property and Equipment
|-- | ----------------------

Property and equipment
consists of the following as of (in millions):



|                                               |  |               |        |   |                  |   |        |  
|---------------------------------------------- |  | ------------- | ------ | - | ---------------- | - | ------ | -
|                                               |  | March 23,2007 |        |   | December 31,2006 |  
|Land and land improvements                     |  | $             | 1,628  |   |                  | $ | 1,622  |  
|Buildings and leasehold improvements           |  |               | 10,595 |   |                  |   | 10,695 |  
|Furniture and equipment                        |  |               | 1,412  |   |                  |   | 1,414  |  
|Construction in progress                       |  |               | 195    |   |                  |   | 166    |  
|                                               |  |               |        |   |                  |   |        |  
|                                               |  |               | 13,830 |   |                  |   | 13,897 |  
|Less accumulated depreciation and amortization |  |               | (3,329 | ) |                  |   | (3,313 | )
|                                               |  |               |        |   |                  |   |        |  
|                                               |  | $             | 10,501 |   |                  | $ | 10,584 |  
|                                               |  |               |        |   |                  |   |        |  



|5. | Debt
|-- | ----

$600 million Exchangeable Senior Debentures.On March 23, 2007, we issued $600 million 25/8% Exchangeable Senior Debentures (the 2007 Debentures) and received proceeds
of $589 million, net of



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(Unaudited)



underwriting fees and expenses and original issue discount. The 2007 Debentures mature on April 15, 2027 and are equal in right of payment with all of
our other senior notes. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year beginning on July 15, 2007. We can redeem for cash all, or part of, the 2007 Debentures
at any time on or after April 20, 2012 upon 15 days notice at a redemption price of 100% of the principal amount plus accrued interest. Holders have the right to require us to repurchase the 2007 Debentures on April 15,
2012, April 15, 2017 and April 15, 2022 for cash equal to 100% of the principal amount plus accrued interest. Holders may exchange their 2007 Debentures prior to maturity under certain conditions, including when the closing sale price
of Hosts common stock is more than 130% of the exchange price per share for at least 20 of 30 consecutive trading days during certain periods or any time up to two days prior to the date on which the 2007 Debentures have been called for
redemption. On exchange, we will deliver cash in an amount equal to not less than the lower of the exchange value (which is the applicable exchange rate multiplied by the average price of Hosts common shares) and the aggregate principal amount
of the 2007 Debentures to be exchanged, and, at our option, Host shares, cash or a combination thereof for any excess above the principal value. The initial exchange rate is 31.002 shares of Hosts common stock per $1,000 principal amount of
debentures, which is equivalent to an exchange price of $32.26 per share of Host common stock. Upon issuance of such shares by Host, we will issue to Host an equivalent number of common OP units. The exchange rate may be adjusted under certain
circumstances including the payment of Host common dividends exceeding $.20 per share in any given quarter. The 2007 Debentures and the Host common stock issuable, at our option, upon exchange of the debentures have yet not been registered under the
Securities Act and may not be offered or sold except to qualified institutional buyers, as defined.

$500 million
Exchangeable Senior Debentures. On March 16, 2004, we issued $500 million of 3.25% Exchangeable Senior Debentures (the 2004 Debentures) and received net proceeds of $484 million, after discounts, underwriting fees and
expenses. The 2004 Debentures mature on April 15, 2024 and are equal in right of payment with all of our other senior notes. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15
of each year. We can redeem for cash all, or part of, the 2004 Debentures at any time subsequent to April 19, 2009 upon 30 days notice at the applicable redemption price as set forth in the indenture. Holders have the right to require us to
repurchase the 2004 Debentures on April 15, 2010, April 15, 2014 and April 15, 2019 for cash equal to 100% of the principal amount. Holders may exchange their 2004 Debentures prior to maturity under certain conditions, including
at any time at which the closing sale price of Host common stock is more than 120% of the exchange price per share, for at least 20 of 30 consecutive trading days during certain periods or any time up to two days prior to the date on which the 2004
Debentures have been called for redemption. The 2004 Debentures are currently exchangeable into shares of Hosts common stock at an exchange rate of 58.0682 shares for each $1,000 of principal amount of the debentures, or a total of
approximately 29 million shares (which is equivalent to an exchange price of $17.22 per share of our common stock). Upon issuance of such shares by Host, we will issue to Host an equivalent number of common OP units. The exchange rate is
adjusted for certain circumstances, including the payment of all Host common dividends. The 2004 Debentures will remain exchangeable until July 1, 2007 (the last day of the current exchange period) and will continue to be exchangeable after
July 1, 2007 if the trading price of Host common stock continues to exceed 120% of the exchange price, or if other conditions for exchange are satisfied.

Credit Facility. During the first quarter of 2007, we repaid the $250 million outstanding balance on our credit facility. As
of March 23, 2007, we have $575 million available under our credit facility.

Mortgage Debt. During the
first quarter of 2007, we completed the following mortgage debt repayments and refinancing transactions:



| |  |  | on March 7, 2007, we repaid the $88 million mortgage on the JW Marriott Hotel, Washington, D.C., due September 15, 2007, which had a floating rate of
interest of LIBOR plus 210 basis points;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | on March 2, 2007, we issued a $300 million mortgage secured by The Ritz-Carlton, Naples and the Newport Beach Marriott Hotel & Spa, which bears
interest at rate of 5.53% and matures on March 1, 2014; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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(Unaudited)



| |  |  | on February 8, 2007, we refinanced the $88 million, 8.58% mortgage due March 1, 2007 on the Harbor Beach Marriott Resort and Spa with a
$134 million mortgage that bears interest at a rate of 5.55% and matures on March 1, 2014.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. | Distributions
|-- | -------------

On
March 15, 2007, Hosts Board of Directors declared a cash dividend of $0.20 per share on its common stock. The dividend was paid on April 16, 2007 to stockholders of record as of March 31, 2007. Accordingly, we made a
similar distribution on our common OP units.

On March 15, 2007, Hosts Board of Directors declared a cash
dividend of $0.5546875 per share on its Class E cumulative redeemable preferred stock. The dividend was paid on April 16, 2007 to preferred stockholders of record as of March 31, 2007. Accordingly, we made a similar distribution on our
Class E preferred OP units.



|7. | Geographic Information
|-- | ----------------------

We consider
each one of our hotels to be an operating segment, none of which meets the threshold for a reportable segment. We also allocate resources and assess operating performance based on individual hotels. Our hotels meet the aggregation criteria for
financial reporting and, accordingly, we report one business segment, hotel ownership. As of March 23, 2007, our foreign operations consist of four properties located in Canada, two properties located in Chile and one property located in
Mexico. As of March 24, 2006, our foreign operations consist of the four Canadian properties and the one Mexican property. There were no intercompany sales between our domestic properties and our foreign properties. The following table presents
revenues for each of the geographical areas in which we operate:



|              |  |               |       |               |   |    
|------------- |  | ------------- | ----- | ------------- | - | ---
|              |  | Quarter ended
|              |  | March 23,2007 |       | March 24,2006
|              |  | (in millions)
|United States |  | $             | 1,008 |               | $ | 801
|Canada        |  |               | 21    |               |   | 20 
|Chile         |  |               | 4     |               |   |   
|Mexico        |  |               | 4     |               |   | 4  
|              |  |               |       |               |   |    
|Total revenue |  | $             | 1,037 |               | $ | 825
|              |  |               |       |               |   |    



|8. | Comprehensive Income
|-- | --------------------

Typically,
our other comprehensive income consists of unrealized gains and losses on foreign currency translation adjustments. Other comprehensive income was not significant for all periods presented.



10



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(Unaudited)



|9. | Dispositions
|-- | ------------

Dispositions.We sold seven hotels (the Sheraton Milwaukee Brookfield Hotel, the Sheraton Providence Airport Hotel, the Capitol Hill Suites, the Marriott Mountain Shadows Resort & Golf Club, the Fairview Park Marriott, the Raleigh Marriott Crabtree
Valley and the Miami Airport Marriott) during the first quarter of 2007 for a total sales price of approximately $333 million. We recorded a gain from the sales of approximately $141 million. The following table summarizes the revenues,
income before taxes, and the gain on dispositions, net of tax, of the hotels which have been reclassified to discontinued operations in the consolidated statements of operations for the periods presented:



|                                 |  |               |     |               |   |    
|-------------------------------- |  | ------------- | --- | ------------- | - | ---
|                                 |  | Quarter ended
|                                 |  | March 23,2007 |     | March 24,2006
|                                 |  | (in millions)
|Revenues                         |  | $             | 14  |               | $ | 42 
|Income before income taxes       |  |               | 4   |               |   | 6  
|Gain on dispositions, net of tax |  |               | 141 |               |   | 153



|10. | Supplemental Guarantor and Non-Guarantor Subsidiary Information
|--- | ---------------------------------------------------------------

Generally, all of our subsidiaries guarantee our senior notes except those owning 29 of the full-service hotels, our taxable REIT subsidiaries and HMH HPT RIBM LLC and HMH HPT CBM 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 we have 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 wholly owned.

The following condensed consolidating information sets forth the financial position as of March 23, 2007 and December 31, 2006, results of operations for the quarter ended March 23, 2007 and
March 24, 3006 and cash flows for the quarter ended March 23, 2007 and March 24, 2006 of the parent, Guarantor Subsidiaries and the Non-Guarantor Subsidiaries:



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(Unaudited)



Supplemental Condensed Consolidating Balance Sheets

(in millions)

March 23, 2007



|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|------------------------------------------------------------- |  | ------ | ----- | - | ---------------------- | - | --------------------------- |  | ------------ | ----- |  | ------------ | ------- | - |  | - | ------
|                                                              |  | Parent |       |   | Guarantor Subsidiaries |   | Non- Guarantor Subsidiaries |  | Eliminations |       |  | Consolidated
|Property and equipment, net                                   |  | $      | 866   |   |                        | $ | 4,222                       |  | $            | 5,413 |  | $            |        |   |  | $ | 10,501
|Due from managers                                             |  |        | (13   | ) |                        |   | 5                           |  |              | 97    |  |              |        |   |  |   | 89    
|Investments in affiliates                                     |  |        | 7,649 |   |                        |   | 1,324                       |  |              | 27    |  |              | (8,839  | ) |  |   | 161   
|Rent receivable                                               |  |        |      |   |                        |   | 22                          |  |              | 267   |  |              | (289    | ) |  |   |      
|Deferred financing costs, net                                 |  |        | 47    |   |                        |   | 4                           |  |              | 11    |  |              |        |   |  |   | 62    
|Furniture, fixtures and equipment replacement fund            |  |        | 24    |   |                        |   | 23                          |  |              | 47    |  |              |        |   |  |   | 94    
|Other                                                         |  |        | (416  | ) |                        |   | 612                         |  |              | 401   |  |              | (412    | ) |  |   | 185   
|Restricted cash                                               |  |        | 1     |   |                        |   | 5                           |  |              | 169   |  |              |        |   |  |   | 175   
|Cash and cash equivalents                                     |  |        | 995   |   |                        |   | 23                          |  |              | 153   |  |              |        |   |  |   | 1,171 
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Total assets                                                  |  | $      | 9,153 |   |                        | $ | 6,240                       |  | $            | 6,585 |  | $            | (9,540  | ) |  | $ | 12,438
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Debt                                                          |  | $      | 3,486 |   |                        | $ | 942                         |  | $            | 2,285 |  | $            | (246    | ) |  | $ | 6,467 
|Other liabilities                                             |  |        | 175   |   |                        |   | 224                         |  |              | 617   |  |              | (569    | ) |  |   | 447   
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Total liabilities                                             |  |        | 3,661 |   |                        |   | 1,166                       |  |              | 2,902 |  |              | (815    | ) |  |   | 6,914 
|Minority interests                                            |  |        |      |   |                        |   |                            |  |              | 32    |  |              |        |   |  |   | 32    
|Limited partner interest of third parties at redemption value |  |        | 499   |   |                        |   |                            |  |              |      |  |              |        |   |  |   | 499   
|Partners capital                                             |  |        | 4,993 |   |                        |   | 5,074                       |  |              | 3,651 |  |              | (8,725  | ) |  |   | 4,993 
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Total liabilities and partners capital                       |  | $      | 9,153 |   |                        | $ | 6,240                       |  | $            | 6,585 |  | $            | (9,540  | ) |  | $ | 12,438
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|                                                             
|December 31, 2006                                            
|                                                              |  | Parent |       |   | Guarantor Subsidiaries |   | Non- Guarantor Subsidiaries |  | Eliminations |       |  | Consolidated
|Property and equipment, net                                   |  | $      | 868   |   |                        | $ | 4,570                       |  | $            | 5,146 |  | $            |        |   |  | $ | 10,584
|Assets held for sale                                          |  |        | 2     |   |                        |   | 94                          |  |              |      |  |              |        |   |  |   | 96    
|Due from managers                                             |  |        | (29   | ) |                        |   |                            |  |              | 82    |  |              | (2      | ) |  |   | 51    
|Investments in affiliates                                     |  |        | 7,612 |   |                        |   | 1,717                       |  |              | 27    |  |              | (9,196  | ) |  |   | 160   
|Rent receivable                                               |  |        |      |   |                        |   | 44                          |  |              |      |  |              | (44     | ) |  |   |      
|Deferred financing costs, net                                 |  |        | 46    |   |                        |   | 3                           |  |              | 11    |  |              |        |   |  |   | 60    
|Furniture, fixtures and equipment replacement fund            |  |        | 34    |   |                        |   | 28                          |  |              | 38    |  |              |        |   |  |   | 100   
|Other                                                         |  |        | (136  | ) |                        |   | 1,679                       |  |              | 223   |  |              | (1,570  | ) |  |   | 196   
|Restricted cash                                               |  |        | 1     |   |                        |   | 3                           |  |              | 190   |  |              |        |   |  |   | 194   
|Cash and cash equivalents                                     |  |        | 266   |   |                        |   | 16                          |  |              | 82    |  |              |        |   |  |   | 364   
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Total assets                                                  |  | $      | 8,664 |   |                        | $ | 8,154                       |  | $            | 5,799 |  | $            | (10,812 | ) |  | $ | 11,805
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Debt                                                          |  | $      | 3,043 |   |                        | $ | 1,005                       |  | $            | 1,952 |  | $            | (122    | ) |  | $ | 5,878 
|Rent payable                                                  |  |        |      |   |                        |   |                            |  |              | 44    |  |              | (44     | ) |  |   |      
|Other liabilities                                             |  |        | 217   |   |                        |   | 209                         |  |              | 1,519 |  |              | (1,450  | ) |  |   | 495   
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Total liabilities                                             |  |        | 3,260 |   |                        |   | 1,214                       |  |              | 3,515 |  |              | (1,616  | ) |  |   | 6,373 
|Minority interests                                            |  |        |      |   |                        |   |                            |  |              | 28    |  |              |        |   |  |   | 28    
|Limited partner interest of third parties at redemption value |  |        | 462   |   |                        |   |                            |  |              |      |  |              |        |   |  |   | 462   
|Partners capital                                             |  |        | 4,942 |   |                        |   | 6,940                       |  |              | 2,256 |  |              | (9,196  | ) |  |   | 4,942 
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       
|Total liabilities and partners capital                       |  | $      | 8,664 |   |                        | $ | 8,154                       |  | $            | 5,799 |  | $            | (10,812 | ) |  | $ | 11,805
|                                                              |  |        |       |   |                        |   |                             |  |              |       |  |              |         |   |  |   |       



12



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Supplemental Condensed Consolidating Statements of Operations

(in millions)

Quarter ended
March 23, 2007



|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|----------------------------------------- |  | ------ | --- | - | ---------------------- | - | --- | --------------------------- |  | - | ------------ | - |  | ------------ | ---- | - |  | - | ----- | -
|                                          |  | Parent |     |   | Guarantor Subsidiaries |   |     | Non- Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |     
|REVENUES                                  |  | $      | 137 |   |                        | $ | 84  |                             |  | $ | 1,024        |   |  | $            | (208 | ) |  | $ | 1,037 |  
|Hotel operating expenses                  |  |        |    |   |                        |   |    |                             |  |   | (685         | ) |  |              |     |   |  |   | (685  | )
|Property-level expenses                   |  |        | (4  | ) |                        |   | (27 | )                           |  |   | (50          | ) |  |              |     |   |  |   | (81   | )
|Depreciation and amortization             |  |        | (14 | ) |                        |   | (47 | )                           |  |   | (55          | ) |  |              |     |   |  |   | (116  | )
|Corporate and other expenses              |  |        | 2   |   |                        |   | (9  | )                           |  |   | (14          | ) |  |              |     |   |  |   | (21   | )
|Rental expense                            |  |        |    |   |                        |   |    |                             |  |   | (208         | ) |  |              | 208  |   |  |   |      |  
|Interest income                           |  |        | 6   |   |                        |   | 3   |                             |  |   | 3            |   |  |              | (6   | ) |  |   | 6     |  
|Interest expense                          |  |        | (35 | ) |                        |   | (30 | )                           |  |   | (35          | ) |  |              | 6    |   |  |   | (94   | )
|Net gains on property transactions        |  |        |    |   |                        |   |    |                             |  |   | 1            |   |  |              |     |   |  |   | 1     |  
|Minority interest expense                 |  |        |    |   |                        |   |    |                             |  |   | (4           | ) |  |              |     |   |  |   | (4    | )
|Equity in earnings (losses) of affiliates |  |        | 65  |   |                        |   | (12 | )                           |  |   |             |   |  |              | (51  | ) |  |   | 2     |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|Income (loss) before income taxes         |  |        | 157 |   |                        |   | (38 | )                           |  |   | (23          | ) |  |              | (51  | ) |  |   | 45    |  
|Benefit (provision) for income taxes      |  |        |    |   |                        |   |    |                             |  |   | 5            |   |  |              |     |   |  |   | 5     |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS  |  |        | 157 |   |                        |   | (38 | )                           |  |   | (18          | ) |  |              | (51  | ) |  |   | 50    |  
|Income from discontinued operations       |  |        | 37  |   |                        |   | 105 |                             |  |   | 2            |   |  |              |     |   |  |   | 144   |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|NET INCOME (LOSS)                         |  | $      | 194 |   |                        | $ | 67  |                             |  | $ | (16          | ) |  | $            | (51  | ) |  | $ | 194   |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|                                         
|Quarter ended March 24, 2006              | 
|                                          |  | Parent |     |   | Guarantor Subsidiaries |   |     | Non- Guarantor Subsidiaries |  |   | Eliminations |   |  | Consolidated |     
|REVENUES                                  |  | $      | 101 |   |                        | $ | 72  |                             |  | $ | 807          |   |  | $            | (155 | ) |  | $ | 825   |  
|Hotel operating expenses                  |  |        |    |   |                        |   |    |                             |  |   | (547         | ) |  |              |     |   |  |   | (547  | )
|Property-level expenses                   |  |        | (5  | ) |                        |   | (21 | )                           |  |   | (35          | ) |  |              |     |   |  |   | (61   | )
|Depreciation and amortization             |  |        | (12 | ) |                        |   | (40 | )                           |  |   | (35          | ) |  |              |     |   |  |   | (87   | )
|Corporate and other expenses              |  |        | (1  | ) |                        |   | (9  | )                           |  |   | (10          | ) |  |              |     |   |  |   | (20   | )
|Rental expense                            |  |        |    |   |                        |   |    |                             |  |   | (155         | ) |  |              | 155  |   |  |   |      |  
|Interest income                           |  |        | 8   |   |                        |   | 3   |                             |  |   | 2            |   |  |              | (8   | ) |  |   | 5     |  
|Interest expense                          |  |        | (33 | ) |                        |   | (31 | )                           |  |   | (35          | ) |  |              | 8    |   |  |   | (91   | )
|Net gains on property transactions        |  |        |    |   |                        |   |    |                             |  |   | 1            |   |  |              |     |   |  |   | 1     |  
|Minority interest expense                 |  |        |    |   |                        |   |    |                             |  |   | (4           | ) |  |              |     |   |  |   | (4    | )
|Equity in earnings (losses) of affiliates |  |        | 11  |   |                        |   | (8  | )                           |  |   |             |   |  |              | (2   | ) |  |   | 1     |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|Income (loss) before income taxes         |  |        | 69  |   |                        |   | (34 | )                           |  |   | (11          | ) |  |              | (2   | ) |  |   | 22    |  
|Benefit (provision) for income taxes      |  |        | (2  | ) |                        |   |    |                             |  |   | 1            |   |  |              |     |   |  |   | (1    | )
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS  |  |        | 67  |   |                        |   | (34 | )                           |  |   | (10          | ) |  |              | (2   | ) |  |   | 21    |  
|Income from discontinued operations       |  |        | 114 |   |                        |   | 44  |                             |  |   | 2            |   |  |              |     |   |  |   | 160   |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  
|NET INCOME (LOSS)                         |  | $      | 181 |   |                        | $ | 10  |                             |  | $ | (8           | ) |  | $            | (2   | ) |  | $ | 181   |  
|                                          |  |        |     |   |                        |   |     |                             |  |   |              |   |  |              |      |   |  |   |       |  



13



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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Supplemental Condensed Consolidating Statements of Cash Flows

(in millions)

Quarter ended
March 23, 2007



|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|-------------------------------------------------------------- |  | ------ | ---- | - | ---------------------- | - | ---- | --------------------------- |  | - | ------------ | - |  | - | ----- | -
|                                                               |  | Parent |      |   | Guarantor Subsidiaries |   |      | Non- Guarantor Subsidiaries |  |   | Consolidated |  
|OPERATING ACTIVITIES                                           |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|Cash provided by operations                                    |  | $      | 91   |   |                        | $ | 17   |                             |  | $ | 13           |   |  | $ | 121   |  
|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|INVESTING ACTIVITIES                                           |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|Proceeds from sales of assets, net                             |  |        | 57   |   |                        |   | 274  |                             |  |   |             |   |  |   | 331   |  
|Acquisitions                                                   |  |        | (15  | ) |                        |   |     |                             |  |   |             |   |  |   | (15   | )
|Capital expenditures                                           |  |        | (10  | ) |                        |   | (51  | )                           |  |   | (58          | ) |  |   | (119  | )
|Change in furniture, fixtures and equipment replacement fund   |  |        | 10   |   |                        |   | 5    |                             |  |   | (9           | ) |  |   | 6     |  
|Change in restricted cash designated for FF&E replacement fund |  |        | 70   |   |                        |   |     |                             |  |   | (68          | ) |  |   | 2     |  
|Other                                                          |  |        | 18   |   |                        |   |     |                             |  |   |             |   |  |   | 18    |  
|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|Cash provided by (used in) investing activities                |  |        | 130  |   |                        |   | 228  |                             |  |   | (135         | ) |  |   | 223   |  
|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|FINANCING ACTIVITIES                                           |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|Financing costs                                                |  |        | (2   | ) |                        |   | (2   | )                           |  |   | (1           | ) |  |   | (5    | )
|Issuances of debt                                              |  |        | 591  |   |                        |   |     |                             |  |   | 434          |   |  |   | 1,025 |  
|Repayment of credit facility                                   |  |        | (250 | ) |                        |   |     |                             |  |   |             |   |  |   | (250  | )
|Debt prepayments                                               |  |        |     |   |                        |   |     |                             |  |   | (175         | ) |  |   | (175  | )
|Scheduled principal repayments                                 |  |        |     |   |                        |   | (1   | )                           |  |   | (10          | ) |  |   | (11   | )
|Distributions on common OP units                               |  |        | (135 | ) |                        |   |     |                             |  |   |             |   |  |   | (135  | )
|Distributions on preferred OP units                            |  |        | (2   | ) |                        |   |     |                             |  |   |             |   |  |   | (2    | )
|Distributions to minority interest                             |  |        |     |   |                        |   |     |                             |  |   | (1           | ) |  |   | (1    | )
|Change in restricted cash                                      |  |        | (70  | ) |                        |   | (2   | )                           |  |   | 89           |   |  |   | 17    |  
|Transfers to/from Parent                                       |  |        | 372  |   |                        |   | (533 | )                           |  |   | 161          |   |  |   |      |  
|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|Cash provided by (used in) financing activities                |  |        | 504  |   |                        |   | (538 | )                           |  |   | 497          |   |  |   | 463   |  
|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               |  | $      | 725  |   |                        | $ | (293 | )                           |  | $ | 375          |   |  | $ | 807   |  
|                                                               |  |        |      |   |                        |   |      |                             |  |   |              |   |  |   |       |  



14



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##### Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



Supplemental Condensed Consolidating Statements of Cash Flows

(in millions)

Quarter ended
March 24, 2006



|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|------------------------------------------------------------ |  | ------ | --- | - | ---------------------- | - | ---- | -------------------------- |  | - | ------------ | - |  | - | ---- | -
|                                                             |  | Parent |     |   | Guarantor Subsidiaries |   |      | Non- GuarantorSubsidiaries |  |   | Consolidated |  
|OPERATING ACTIVITIES                                         |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|Cash provided by operations                                  |  | $      | 72  |   |                        | $ | 22   |                            |  | $ | 6            |   |  | $ | 100  |  
|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|INVESTING ACTIVITIES                                         |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|Proceeds from sales of assets, net                           |  |        | 139 |   |                        |   | 112  |                            |  |   |             |   |  |   | 251  |  
|Capital expenditures                                         |  |        | (14 | ) |                        |   | (58  | )                          |  |   | (47          | ) |  |   | (119 | )
|Change in furniture, fixtures and equipment replacement fund |  |        | 5   |   |                        |   | 10   |                            |  |   | (1           | ) |  |   | 14   |  
|Change in restricted cash designated for FF&E replacement    |  |        |    |   |                        |   | (2   | )                          |  |   | (1           | ) |  |   | (3   | )
|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|Cash provided by (used in) investing activities              |  |        | 130 |   |                        |   | 62   |                            |  |   | (49          | ) |  |   | 143  |  
|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|FINANCING ACTIVITIES                                         |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|Financing costs                                              |  |        |    |   |                        |   | (2   | )                          |  |   |             |   |  |   | (2   | )
|Issuances of debt                                            |  |        |    |   |                        |   | 116  |                            |  |   |             |   |  |   | 116  |  
|Repayment of credit facility                                 |  |        | (20 | ) |                        |   |     |                            |  |   |             |   |  |   | (20  | )
|Scheduled principal repayments                               |  |        |    |   |                        |   | (2   | )                          |  |   | (11          | ) |  |   | (13  | )
|Distributions on common OP units                             |  |        | (43 | ) |                        |   |     |                            |  |   |             |   |  |   | (43  | )
|Distributions on preferred OP units                          |  |        | (6  | ) |                        |   |     |                            |  |   |             |   |  |   | (6   | )
|Distributions to minority interest                           |  |        |    |   |                        |   |     |                            |  |   | (2           | ) |  |   | (2   | )
|Change in restricted cash                                    |  |        | 1   |   |                        |   | 2    |                            |  |   | 21           |   |  |   | 24   |  
|Transfers to/from Parent                                     |  |        | 152 |   |                        |   | (198 | )                          |  |   | 46           |   |  |   |     |  
|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|Cash provided by (used in) financing activities              |  |        | 84  |   |                        |   | (84  | )                          |  |   | 54           |   |  |   | 54   |  
|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  
|INCREASE IN CASH AND CASH EQUIVALENTS                        |  | $      | 286 |   |                        | $ |     |                            |  | $ | 11           |   |  | $ | 297  |  
|                                                             |  |        |     |   |                        |   |      |                            |  |   |              |   |  |   |      |  



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Results of Operations and Financial Condition
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes included
elsewhere in this report. Host Hotels & Resorts, Inc. is a Maryland corporation and operates as a self-managed and self-administered real estate investment trust, or REIT. Host Hotels & Resorts, Inc. owns properties and conducts
operations through Host Hotels & Resorts, L.P., a Delaware limited partnership of which Host Hotels & Resorts, Inc. is the sole general partner and in which it holds 96.6% of the partnership interests on April 30, 2007. In
this report, we use the terms we or our to refer to Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. together, unless the context indicates otherwise. We also use the term Host to
specifically refer to Host Hotels & Resorts, Inc. and the terms operating partnership or Host LP to refer to Host Hotels & Resorts, L.P. in cases where it is important to distinguish between Host and Host
LP.

Forward-Looking Statements

In
this report on Form 10-Q, we make some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases such as
anticipate, believe, could, expect, may, intend, predict, project, plan, will, estimate and other similar terms and
phrases. Forward-looking statements are based on managements current expectations and assumptions and are not guarantees of future performance that involve known and unknown risks, uncertainties and other factors which may cause our actual
results to differ materially from those anticipated at the time the forward-looking statements are made. These risks and uncertainties include those risk factors discussed in our Annual Report on Form 10K for the year ended December 31,
2006 and in other filings with the Securities and Exchange Commission (SEC). Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these
expectations or that any deviations will not be material. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release updates to any forward-looking statement contained in this report
to conform the statement to actual results or changes in our expectations.

Outlook

As of April 30, 2007, we own 121 hotel properties, which operate primarily in the luxury and upper upscale hotel sectors. For a general overview
of our business and a discussion of our reporting periods, see our most recent Annual Report on Form 10-K.

Management believes that we
will continue to experience growth in RevPAR, margins and cash flow throughout the year as a result of strong operating fundamentals, including the growth of the U.S. economy and strong lodging demand. Although, the pace of new lodging supply has
started to increase somewhat, the majority of new projects scheduled for completion in the near-term are concentrated in the economy and mid-scale segments, are outside of major urban markets and will have less than 200 rooms. As a result, we expect
that comparable hotel RevPAR will increase approximately 6.5% to 8.0% for the full year 2007 and at the lower end of that range for the second quarter. Additionally, we expect Comparable Hotel plus the Starwood Portfolio RevPAR (described below) to
increase 6.5% to 8.5% for both the second quarter and full year 2007.

We expect operating margin growth will further benefit from the
increase in the average daily room rate in 2007 and continued increases in food and beverage revenues associated with the expected growth in group business. While we expect margins to improve, margin growth will be constrained by continued pressure
from certain costs that are likely to increase at a rate greater than inflation, including wages and benefits, real estate taxes and, potentially, utilities.

In the near-term, some properties may experience temporary business disruption and displacement as rooms, common areas and meeting spaces are renovated as part of the maintenance capital expenditure and
repositioning/return on investment projects at many of our properties. However, over the long term, we expect to see improvements in RevPAR and operating margins as these expenditures are expected to enhance the properties market position and
profitability.



16



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##### Table of Contents

We also expect to see improvements in RevPAR and operating margins as we continue our strategy of
recycling assets. Over the past three years, we have acquired larger luxury and upper upscale properties in urban and resort/convention destinations, where further large-scale lodging development typically is limited, and have generally disposed of
smaller hotels that are located in suburban and secondary markets. The assets we have acquired have higher RevPAR, higher margins and, we believe, higher growth potential than those we have sold. Over time, our capital recycling efforts should
contribute to improvements in overall RevPAR and margins, as well as an increase in the average per room replacement cost of our portfolio. In addition to the recycling of assets, we may also dispose of core assets when we have the opportunity to
capitalize on the inherent real estate value of our properties and apply the proceeds to other business objectives.

While we believe the
positive trends in the lodging industry, discussed here and in our Annual Report on Form 10K, create the opportunity for business improvements during the remainder of 2007, there can be no assurances that any increases in hotel revenues or
earnings at our properties will continue for any number of reasons, including, but not limited to, slower than anticipated growth in the economy and changes in travel patterns.

Recent Events

On April 30, 2007, we commenced the processes necessary to defease a
$515 million mortgage loan secured by eight properties with an interest rate of 7.61% maturing August 2009, which we refer to as the CMBS loan. To defease the loan, we have used available cash of approximately $545 million, which includes
amounts for prepayment and other costs. This transaction is expected to be completed in early May 2007.

Results of Operations

The following table reflects certain line items from our statements of operations and other significant operating statistics (in millions, except
operating statistics and percentages):



|                                                                   |  |               |        |   |               |   |        |                      |  |       |       
|------------------------------------------------------------------ |  | ------------- | ------ | - | ------------- | - | ------ | -------------------- |  | ----- | ------
|                                                                   |  | Quarter ended |        |   |               |  
|                                                                   |  | March 23,2007 |        |   | March 24,2006 |   |        | % Increase(Decrease) | 
|Revenues                                                           |  |               |        |   |               |   |        |                      |  |       |       
|Total hotel sales                                                  |  | $             | 1,006  |   |               | $ | 796    |                      |  | 26.4  | %     
|Operating costs and expenses:                                      |  |               |        |   |               |   |        |                      |  |       |       
|Property-level costs (1)                                           |  |               | 882    |   |               |   | 695    |                      |  | 26.9  |       
|Corporate and other expenses                                       |  |               | 21     |   |               |   | 20     |                      |  | 5.0   |       
|Operating profit                                                   |  |               | 134    |   |               |   | 110    |                      |  | 21.8  |       
|Interest expense                                                   |  |               | 94     |   |               |   | 91     |                      |  | 3.3   |       
|Minority interest expense                                          |  |               | 4      |   |               |   | 4      |                      |  |      |       
|Income from discontinued operations                                |  |               | 144    |   |               |   | 160    |                      |  | (10.0 | )     
|Net income                                                         |  |               | 194    |   |               |   | 181    |                      |  | 7.2   |       
|All hotel operating statistics (2):                                |  |               |        |   |               |   |        |                      |  |       |       
|RevPAR                                                             |  | $             | 132.77 |   |               | $ | 126.55 |                      |  | 4.9   | %     
|Average room rate                                                  |  | $             | 189.18 |   |               | $ | 179.21 |                      |  | 5.6   | %     
|Average occupancy                                                  |  |               | 70.2   | % |               |   | 70.6   | %                    |  | (0.4  | ) pts.
|Comparable hotel operating statistics (3):                         |  |               |        |   |               |   |        |                      |  |       |       
|RevPAR                                                             |  | $             | 136.54 |   |               | $ | 128.62 |                      |  | 6.2   | %     
|Average room rate                                                  |  | $             | 194.15 |   |               | $ | 182.36 |                      |  | 6.5   | %     
|Average occupancy                                                  |  |               | 70.3   | % |               |   | 70.5   | %                    |  | (0.2  | ) pts.
|Comparable hotel plus Starwood portfolio operating statistics (4): |  |               |        |   |               |   |        |                      |  |       |       
|RevPAR                                                             |  | $             | 134.03 |   |               | $ | 125.21 |                      |  | 7.0   | %     
|Average room rate                                                  |  | $             | 191.03 |   |               | $ | 179.75 |                      |  | 6.3   | %     
|Average occupancy                                                  |  |               | 70.2   | % |               |   | 69.7   | %                    |  | .5    | pts.  

---

|(1) | Amount represents total operating costs and expenses per our consolidated statements of operations less corporate expenses.
|--- | ---------------------------------------------------------------------------------------------------------------------------



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|(2) | Operating statistics are for all properties as of March 23, 2007 and March 24, 2006 and include the results of operations for hotels we have sold prior to their
disposition.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Comparable hotel operating statistics for March 23, 2007 and March 24, 2006 are based on 94 comparable hotels as of March 23, 2007.
|--- | -----------------------------------------------------------------------------------------------------------------------------------

|(4) | Comparable hotels plus Starwood portfolio statistics are based on 94 comparable hotels plus 24 hotels acquired from Starwood in April 2006 that we own as of March 23, 2007.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2007 Compared to 2006

Hotel Sales Overview



|                  |  |               |       |               |   |                      |  |      |  
|----------------- |  | ------------- | ----- | ------------- | - | -------------------- |  | ---- | -
|                  |  | Quarter ended |       |               |  
|                  |  | March 23,2007 |       | March 24,2006 |   | % Increase(Decrease) | 
|                  |  | (in millions) |       |               |  
|Revenues          |  |               |       |               |   |                      |  |      |  
|Rooms             |  | $             | 614   |               | $ | 487                  |  | 26.1 | %
|Food and beverage |  |               | 323   |               |   | 259                  |  | 24.7 |  
|Other             |  |               | 69    |               |   | 50                   |  | 38.0 |  
|                  |  |               |       |               |   |                      |  |      |  
|Total hotel sales |  | $             | 1,006 |               | $ | 796                  |  | 26.4 |  
|                  |  |               |       |               |   |                      |  |      |  

Hotel sales increased $210 million, or 26.4%, to $1.0 billion for the first quarter of
2007. First quarter 2007 hotel sales include $151 million of sales from the hotels purchased on April 10, 2006 in the Starwood transaction. Hotel sales exclude the properties we have sold in 2007 and the properties sold in 2006. Sales for
properties sold in 2007 or sold in 2006 have been reclassified as discontinued operations. See Discontinued Operations below.

We discuss operating results for our hotels on a comparable basis. Comparable hotels are those properties that we have owned for the entirety of the reporting periods being compared. Comparable hotels do not include the results of
properties acquired (including the Starwood portfolio) or sold, or that incurred significant property damage and business interruption or large scale capital improvements during these periods. As of March 23, 2007, 94 of our 121 hotels have
been classified as comparable hotels. We also discuss operating results for our hotels on a Comparable Hotels plus the Starwood Portfolio (described below). See Comparable Hotel and Comparable Hotels plus the Starwood Portfolio Operating
Statistics for a complete description of our comparable hotels and the hotels in the Starwood Portfolio. We discuss our operating results by property type (i.e. urban, suburban, resort/convention or airport), geographic region and mix of
business (i.e. transient, group or contract).

Comparable hotel sales increased 5.4% to approximately $832 million for the first quarter of
2007. The revenue growth reflects the increase in comparable RevPAR of 6.2%, as a result of an increase in average room rates of 6.5% and a slight decrease in occupancy of 0.2 percentage points. The growth in average room rate was driven by a number
of positive trends such as strong United States GDP growth, low growth in the supply of new luxury and upper upscale hotels and the strengthening in the group and transient segments of our business. Our occupancy levels were affected by weakness in
individual markets and temporary disruption to certain properties due to our capital expenditure program. As a result of these trends, our operators were able to continue to increase room rates while generally maintaining the year-over-year
occupancy level. Food and beverage revenues for our comparable hotels increased 3.9%, primarily due to increased sales from our catering and banquet business. In addition, during the first quarter of 2007, operating margins at our food and beverage
outlets increased 0.8 percentage points.

In addition to comparable hotel RevPAR, we also have presented Comparable Hotel plus the Starwood
Portfolio RevPAR. This represents our comparable hotels (described above) plus the 24 hotels acquired from Starwood on April 10, 2006 that we own as of March 23, 2007. Accordingly, we have included the results of the Starwood portfolio for
periods prior to our ownership in 2006 in the determination of the Comparable Hotel plus Starwood Portfolio RevPAR. Comparable Hotel plus the Starwood Portfolio RevPAR increased 7.0%. The RevPAR increase was the result of an increase in average room
rates of 6.3% and an increase in occupancy of .5 percentage points. Based on a March 31 calendar quarter end, our Comparable Hotel plus Starwood Portfolio RevPAR increased 7.6% over the first calendar quarter of 2006. Given the significant
contribution of these hotels to our operating results, we believe this supplemental presentation provides useful information to investors.



18



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##### Table of Contents

Comparable Hotel Sales by Property Type

The following tables set forth performance information for our comparable hotels and our comparable hotels plus the Starwood portfolio by property type as
of March 23, 2007 and March 24, 2006:

Comparable Hotels by Property Type (a)



|                  |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                        |   |        |  |     |  
|----------------- |  | -------------------- |  | ---------------------------- |  | ---------------------------- | ------ | --------------------------- | ---- | - | ------ | - | ---------------- |  | --------------------------- | ------ |  | ------ | - | ---------------------- | - | ------ |  | --- | -
|                  |  | As of March 23, 2007 |  | Quarter ended March 23, 2007 |  | Quarter ended March 24, 2006 |        |                             |     
|                  |  | No. ofProperties     |  | No. ofRooms                  |  | AverageRoom Rate             |        | AverageOccupancyPercentages |      |   | RevPAR |   | AverageRoom Rate |  | AverageOccupancyPercentages |        |  | RevPAR |   | PercentChange inRevPAR |  
|Urban             |  | 40                   |  | 23,519                       |  | $                            | 199.16 |                             | 72.6 | % |        | $ | 144.58           |  | $                           | 185.57 |  | 72.3   | % |                        | $ | 134.23 |  | 7.7 | %
|Suburban          |  | 28                   |  | 10,901                       |  |                              | 155.15 |                             | 65.2 |   |        |   | 101.11           |  |                             | 146.53 |  | 65.0   |   |                        |   | 95.18  |  | 6.2 |  
|Airport           |  | 15                   |  | 6,556                        |  |                              | 143.30 |                             | 69.5 |   |        |   | 99.66            |  |                             | 136.05 |  | 69.8   |   |                        |   | 94.90  |  | 5.0 |  
|Resort/Convention |  | 11                   |  | 6,825                        |  |                              | 286.77 |                             | 71.7 |   |        |   | 205.62           |  |                             | 269.08 |  | 74.2   |   |                        |   | 199.78 |  | 2.9 |  
|                  |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                        |   |        |  |     |  
|All Types         |  | 94                   |  | 47,801                       |  |                              | 194.15 |                             | 70.3 |   |        |   | 136.54           |  |                             | 182.36 |  | 70.5   |   |                        |   | 128.62 |  | 6.2 |  
|                  |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                        |   |        |  |     |  

Comparable Hotels plus the Starwood Portfolio by Property Type (b)



|                  |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                        |   |        |  |     |  
|----------------- |  | -------------------- |  | ---------------------------- |  | ---------------------------- | ------ | --------------------------- | ---- | - | ------ | - | ---------------- |  | --------------------------- | ------ |  | ------ | - | ---------------------- | - | ------ |  | --- | -
|                  |  | As of March 23, 2007 |  | Quarter ended March 23, 2007 |  | Quarter ended March 24, 2006 |        |                             |     
|                  |  | No. ofProperties     |  | No. ofRooms                  |  | AverageRoom Rate             |        | AverageOccupancyPercentages |      |   | RevPAR |   | AverageRoom Rate |  | AverageOccupancyPercentages |        |  | RevPAR |   | PercentChange inRevPAR |  
|Urban             |  | 55                   |  | 33,011                       |  | $                            | 195.84 |                             | 71.8 | % |        | $ | 140.70           |  | $                           | 183.17 |  | 70.5   | % |                        | $ | 129.07 |  | 9.0 | %
|Suburban          |  | 34                   |  | 12,844                       |  |                              | 154.98 |                             | 64.4 |   |        |   | 99.83            |  |                             | 146.37 |  | 64.2   |   |                        |   | 93.94  |  | 6.3 |  
|Airport           |  | 17                   |  | 7,555                        |  |                              | 140.16 |                             | 71.2 |   |        |   | 99.79            |  |                             | 132.89 |  | 71.1   |   |                        |   | 94.53  |  | 5.6 |  
|Resort/Convention |  | 12                   |  | 7,337                        |  |                              | 282.63 |                             | 72.0 |   |        |   | 203.42           |  |                             | 265.98 |  | 74.4   |   |                        |   | 197.95 |  | 2.8 |  
|                  |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                        |   |        |  |     |  
|All Types         |  | 118                  |  | 60,747                       |  |                              | 191.03 |                             | 70.2 |   |        |   | 134.03           |  |                             | 179.75 |  | 69.7   |   |                        |   | 125.21 |  | 7.0 |  
|                  |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                        |   |        |  |     |  

---

|(a) | The reporting period for our comparable operating statistics for the first quarter of 2007 is from December 30, 2006 to March 23, 2007 and for the first quarter of 2006 is
from December 31, 2005 to March 24, 2006. For further discussion, see Reporting Periods in our most recent Annual Report on Form 10-K.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Reflects our comparable hotels plus the 24 hotels acquired from Starwood in April 2006 that we own as of March 23, 2007. For further detail, see Comparable Hotel and
Comparable Hotel plus the Starwood Portfolio Operating Statistics.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For the first quarter of 2007, RevPAR increased
across all of our hotel property types, led by our urban hotels, as we benefited from strong performance in several of our downtown markets, including Washington, D.C., New York City and San Francisco. RevPAR growth at our suburban hotels was led by
the RevPAR increases at our suburban Denver hotels. Our resort/convention hotels lagged the portfolio, as the Coronado Island Marriott Resort was significantly affected by major renovations and the Orlando World Center Marriott Resort and Convention
Center was impacted by three group cancellations.



19



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##### Table of Contents

Comparable Hotel Sales by Geographic Region

The following tables set forth performance information for our comparable hotels and our comparable hotels plus the Starwood portfolio by geographic
region as of March 23, 2007 and March 24, 2006:

Comparable Hotels by Region (a)



|              |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                       |   |        |  |      |  
|------------- |  | -------------------- |  | ---------------------------- |  | ---------------------------- | ------ | --------------------------- | ---- | - | ------ | - | ---------------- |  | --------------------------- | ------ |  | ------ | - | --------------------- | - | ------ |  | ---- | -
|              |  | As of March 23, 2007 |  | Quarter ended March 23, 2007 |  | Quarter ended March 24, 2006 |        |                             |     
|              |  | No. ofProperties     |  | No. ofRooms                  |  | AverageRoom Rate             |        | AverageOccupancyPercentages |      |   | RevPAR |   | AverageRoom Rate |  | AverageOccupancyPercentages |        |  | RevPAR |   | PercentChangeinRevPAR |  
|Pacific       |  | 22                   |  | 12,017                       |  | $                            | 209.40 |                             | 71.8 | % |        | $ | 150.34           |  | $                           | 195.49 |  | 73.2   | % |                       | $ | 143.10 |  | 5.1  | %
|Florida       |  | 9                    |  | 5,663                        |  |                              | 248.02 |                             | 76.1 |   |        |   | 188.80           |  |                             | 236.35 |  | 76.1   |   |                       |   | 179.95 |  | 4.9  |  
|Mid-Atlantic  |  | 8                    |  | 5,870                        |  |                              | 221.41 |                             | 73.5 |   |        |   | 162.68           |  |                             | 203.85 |  | 72.9   |   |                       |   | 148.59 |  | 9.5  |  
|DC Metro      |  | 12                   |  | 5,399                        |  |                              | 196.22 |                             | 68.7 |   |        |   | 134.76           |  |                             | 190.12 |  | 63.2   |   |                       |   | 120.15 |  | 12.2 |  
|North Central |  | 12                   |  | 4,906                        |  |                              | 132.40 |                             | 62.0 |   |        |   | 82.04            |  |                             | 126.62 |  | 64.9   |   |                       |   | 82.14  |  | (0.1 | )
|South Central |  | 7                    |  | 4,126                        |  |                              | 156.95 |                             | 76.2 |   |        |   | 119.54           |  |                             | 143.21 |  | 76.0   |   |                       |   | 108.82 |  | 9.8  |  
|Atlanta       |  | 7                    |  | 2,625                        |  |                              | 190.20 |                             | 69.3 |   |        |   | 131.89           |  |                             | 181.87 |  | 72.5   |   |                       |   | 131.83 |  |     |  
|New England   |  | 6                    |  | 3,032                        |  |                              | 147.94 |                             | 62.9 |   |        |   | 92.99            |  |                             | 142.28 |  | 63.7   |   |                       |   | 90.60  |  | 2.6  |  
|Mountain      |  | 6                    |  | 2,210                        |  |                              | 169.58 |                             | 65.4 |   |        |   | 110.85           |  |                             | 157.87 |  | 63.1   |   |                       |   | 99.61  |  | 11.3 |  
|International |  | 5                    |  | 1,953                        |  |                              | 147.74 |                             | 64.3 |   |        |   | 94.96            |  |                             | 141.07 |  | 68.0   |   |                       |   | 95.88  |  | (1.0 | )
|              |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                       |   |        |  |      |  
|All Regions   |  | 94                   |  | 47,801                       |  |                              | 194.15 |                             | 70.3 |   |        |   | 136.54           |  |                             | 182.36 |  | 70.5   |   |                       |   | 128.62 |  | 6.2  |  
|              |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                       |   |        |  |      |  

Comparable Hotels plus the Starwood Portfolio by Region (b)



|              |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                       |   |        |  |      |  
|------------- |  | -------------------- |  | ---------------------------- |  | ---------------------------- | ------ | --------------------------- | ---- | - | ------ | - | ---------------- |  | --------------------------- | ------ |  | ------ | - | --------------------- | - | ------ |  | ---- | -
|              |  | As of March 23, 2007 |  | Quarter ended March 23, 2007 |  | Quarter ended March 24, 2006 |        |                             |     
|              |  | No. ofProperties     |  | No. ofRooms                  |  | AverageRoom Rate             |        | AverageOccupancyPercentages |      |   | RevPAR |   | AverageRoom Rate |  | AverageOccupancyPercentages |        |  | RevPAR |   | PercentChangeinRevPAR |  
|Pacific       |  | 28                   |  | 16,020                       |  | $                            | 201.80 |                             | 72.4 | % |        | $ | 146.05           |  | $                           | 190.47 |  | 73.4   | % |                       | $ | 139.75 |  | 4.5  | %
|Florida       |  | 10                   |  | 5,922                        |  |                              | 244.02 |                             | 76.2 |   |        |   | 186.00           |  |                             | 232.00 |  | 76.4   |   |                       |   | 177.14 |  | 5.0  |  
|Mid-Atlantic  |  | 11                   |  | 8,675                        |  |                              | 222.77 |                             | 75.3 |   |        |   | 167.68           |  |                             | 205.84 |  | 71.1   |   |                       |   | 146.45 |  | 14.5 |  
|DC Metro      |  | 13                   |  | 5,662                        |  |                              | 196.32 |                             | 69.1 |   |        |   | 135.57           |  |                             | 190.35 |  | 63.6   |   |                       |   | 121.13 |  | 11.9 |  
|North Central |  | 15                   |  | 6,495                        |  |                              | 131.34 |                             | 62.0 |   |        |   | 81.44            |  |                             | 125.55 |  | 63.3   |   |                       |   | 79.48  |  | 2.5  |  
|South Central |  | 8                    |  | 4,358                        |  |                              | 161.07 |                             | 75.8 |   |        |   | 122.09           |  |                             | 146.85 |  | 75.8   |   |                       |   | 111.28 |  | 9.7  |  
|Atlanta       |  | 7                    |  | 2,625                        |  |                              | 190.20 |                             | 69.3 |   |        |   | 131.89           |  |                             | 181.87 |  | 72.5   |   |                       |   | 131.83 |  |     |  
|New England   |  | 11                   |  | 5,663                        |  |                              | 146.83 |                             | 58.6 |   |        |   | 86.08            |  |                             | 142.73 |  | 58.3   |   |                       |   | 83.21  |  | 3.4  |  
|Mountain      |  | 8                    |  | 2,856                        |  |                              | 167.46 |                             | 66.6 |   |        |   | 111.46           |  |                             | 154.73 |  | 65.3   |   |                       |   | 100.99 |  | 10.4 |  
|International |  | 7                    |  | 2,471                        |  |                              | 141.68 |                             | 64.3 |   |        |   | 91.15            |  |                             | 132.64 |  | 68.5   |   |                       |   | 90.87  |  | 0.3  |  
|              |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                       |   |        |  |      |  
|All Regions   |  | 118                  |  | 60,747                       |  |                              | 191.03 |                             | 70.2 |   |        |   | 134.03           |  |                             | 179.75 |  | 69.7   |   |                       |   | 125.21 |  | 7.0  |  
|              |  |                      |  |                              |  |                              |        |                             |      |   |        |   |                  |  |                             |        |  |        |   |                       |   |        |  |      |  

---

|(a) | The reporting period for our comparable operating statistics for the first quarter of 2007 is from December 30, 2006 to March 23, 2007 and for the first quarter of 2006 is
from December 31, 2005 to March 24, 2006. For further discussion, see Reporting Periods in our most recent Annual Report on Form 10-K.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Reflects our comparable hotels plus the 24 hotels acquired from Starwood in April 2006 that we own as of March 23, 2007. For further detail, see Comparable Hotel and
Comparable Hotel plus the Starwood Portfolio Operating Statistics.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Four of our regions performed exceptionally well.
Performance for the Mid-Atlantic region was driven by outstanding RevPAR growth in New York City. The D.C. Metro region was led by our downtown Washington, D.C. hotels and the South Central region was driven by growth at our Dallas Quorum Marriott
and San Antonio Marriott Rivercenter hotels. The Mountain region was led by the strength of the Denver market.

Four of our regions
significantly underperformed. The Atlanta region underperformed due to an increase in demand in the first quarter of 2006 from disruption caused by the 2005 hurricanes in New Orleans and Florida. The North Central region experienced weakness in the
Detroit market, due to the Super Bowl being held there in 2006,



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and the Minneapolis market was weak due to a rooms renovation at the Minneapolis Marriott City Center. The New England market primarily underperformed
because of lower levels of group and transient demand at the Sheraton Boston and the Boston Marriott Copley Place. The International region was weak due to a rooms renovation at the Toronto Marriott Eaton Center and lower group demand at the Toronto
Marriott Airport.

Hotels Sales by Business Mix. The majority of our customers fall into three broad groups: transient, group and
contract business. Individual travelers are referred to as Transient customers. Those traveling as part of an organized group, meeting or convention are referred to as Group customers. Contract customers represent
blocks of rooms sold to a specific company for an extended period of time at significantly discounted rates, such as airline crews. For further detail on our business mix, see our annual report on Form 10-K.

In the first quarter of 2007, our operators were able to significantly increase average daily room rates for both our transient and group business, while
occupancy was up modestly for both. The increase in the average daily rate of slightly more than 6% for our transient business was driven by continued rate strength and an increase in demand in the premium and corporate segments of the business. The
average daily rate for our group business also increased slightly more than 6% due to continued strong pricing power in all segments of group business. Group demand was up slightly for the quarter, as the discount and other segment demand offset
declines in the association and corporate segments.

Our group booking pace remains solid for the remainder of the year. We expect that
average group rates will increase in future periods as a greater percentage of business will consist of higher-rated groups that were booked in more recent periods. Approximately 44% of our rooms revenues are from group business, and as of the end
of the first quarter, approximately 90% of our anticipated group business for the year is under contract.

Property-level Operating
Expenses



|                                        |  |               |     |               |   |                      |  |      |  
|--------------------------------------- |  | ------------- | --- | ------------- | - | -------------------- |  | ---- | -
|                                        |  | Quarter ended |     |               |  
|                                        |  | March 23,2007 |     | March 24,2006 |   | % Increase(Decrease) | 
|                                        |  | (in millions) |     |               |  
|Rooms                                   |  | $             | 152 |               | $ | 118                  |  | 28.8 | %
|Food and beverage                       |  |               | 237 |               |   | 191                  |  | 24.1 |  
|Hotel departmental expenses             |  |               | 251 |               |   | 204                  |  | 23.0 |  
|Management fees                         |  |               | 45  |               |   | 34                   |  | 32.4 |  
|Other property-level expenses           |  |               | 81  |               |   | 61                   |  | 32.8 |  
|Depreciation and amortization           |  |               | 116 |               |   | 87                   |  | 33.3 |  
|                                        |  |               |     |               |   |                      |  |      |  
|Total property-level operating expenses |  | $             | 882 |               | $ | 695                  |  | 26.9 |  
|                                        |  |               |     |               |   |                      |  |      |  

Property-level operating expenses increased $187 million, or 26.9%, for the first quarter of
2007. During the first quarter of 2007, property-level operating expenses include $138 million related to the operations of the hotels acquired in the Starwood transaction. Property-level operating expenses exclude the costs for hotels we have
sold, which are included in discontinued operations. Our operating expenses, which are both fixed and variable, are affected by changes in occupancy, inflation and revenues, though the effect on specific costs will differ. We expect operating costs
to continue to increase during the remainder of 2007 as a result of variable costs increasing with occupancy increases, and certain costs likely increasing at a rate greater than inflation, including wages and benefits, and real estate taxes and,
potentially, utilities.

Corporate and Other Expenses.Corporate and other expenses primarily consist of employee salaries and
bonuses and other costs such as employee stock-based compensation expense, travel, corporate insurance, audit fees, building rent and system costs. For the quarter, corporate expenses increased approximately $1 million from the same period last
year.

Interest Income.Interest income increased $1 million for the first quarter due to an increase in our cash balance and
an increase in the interest rate earned on the balance.



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Interest Expense.Interest expense increased $3 million for the first quarter, which is a
result of the overall increase in debt offset by the decrease in our weighted average interest rate.

Equity in Earnings of Affiliates.Our share of income of affiliates increased by $1 million for the first quarter due to an increase in earnings for all of our affiliates, including earnings from our European Joint Venture, in which we became a partner during the second
quarter of 2006.

Discontinued Operations. Discontinued operations for 2007 consist of seven hotels sold during the first quarter of
2007. Discontinued operations for 2006 consist of fourteen hotels sold during 2006 and the first quarter of 2007. Discontinued operations represent results of operations and the gain or loss on the disposition of the hotels during the period. For
the first quarter of 2007 and 2006, revenues for these properties were $14 million and $42 million, respectively, and operating income before taxes was $4 million and $6 million, respectively. We recognized a gain, net of tax, of
approximately $141 million and $153 million for the first quarter of 2007 and 2006, respectively, on the disposition of these hotels.

Liquidity and Capital Resources

Cash Requirements

We use cash primarily for acquisitions, capital expenditures, debt payments and distributions to unitholders. As a REIT, Host is required to distribute to its stockholders at least 90% of its taxable income, excluding
net capital gain, in the form of dividends on an annual basis. Funds used by Host to make these dividends are provided by us. We depend primarily on external sources of capital to finance future growth, including acquisitions.

Cash Balances. As of March 23, 2007, we had $1.2 billion of cash and cash equivalents, which was an increase of $807 million
from December 31, 2006. The increase in cash is primarily due to the issuance of debt, proceeds from asset sales and improved operations, partially offset by debt repayments, dividend payments and capital expenditures. During the second
quarter, we used approximately $136 million to prepay additional mortgage debt and related costs and $110 million to pay common and preferred distributions. In addition, we intend to use approximately $545 million of our available
cash to defease the 7.61%, $515 million CMBS loan in the second quarter, including prepayment and other costs. Excluding amounts necessary for working capital, we intend to use the remaining available funds over time to further invest in our
portfolio, acquire new properties or make further debt repayments.

Debt
Transactions. During the first quarter, we issued approximately $1.0 billion of debt, including $600 million of 25/8% Exchangeable Senior Debentures, as well as other mortgage debt. See the table of significant
financing transactions in -Cash Provided by Financing Activities. As a result of these transactions and the use of the proceeds therefrom described above, our debt balance is expected to be reduced to approximately $5.8 billion with
an average maturity of 6.5 years and a weighted average interest rate of 6.2%, which represents a decrease of approximately 60 basis points from December 31, 2006.

In addition to the above financing activity, approximately $6 million of senior notes mature and $21 million of principal amortization is due during the remainder of 2007. We also expect to repay a
$190 million mortgage secured by four hotels in October 2007, at which time the interest rate on the loan would otherwise substantially increase and all excess cash flow from the properties would be required to be used to pay down the mortgage.
We believe we have sufficient cash or availability under our line of credit to deal with our near-term maturities, as well as any unexpected decline in the cash flow from our business.

We may continue to redeem or refinance senior notes and mortgage debt from time to time to take advantage of favorable market conditions. We may purchase
senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. Repurchases of debt, if any, will depend on prevailing
market conditions, our liquidity requirements,



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contractual restrictions and other factors. Any refinancing or retirement before the maturity date would affect earnings and Funds From Operations, or FFO,
per diluted share, as defined below, as a result of the payment of any applicable call premiums and the acceleration of previously deferred financing costs.

Acquisitions and Dispositions.During the first quarter of 2007, we sold seven properties for total proceeds of approximately $333 million and a gain of approximately $141 million. During the remainder of
2007, we expect to complete the sale of an additional $100 million to $300 million. We also expect acquisitions of $300 million to $500 million during the year.

Capital Expenditures. Our capital expenditures generally fall into three broad categories, renewal and replacement expenditures,
repositioning/return on investment (or ROI) projects and value enhancement projects. ROI/repositioning capital expenditures are selective capital improvements outside the scope of the typical renewal and replacement capital expenditures.
These projects include, for example, significant repositionings of guest rooms, lobbies or food and beverage platforms and expanding ballroom, spa or conference facilities. Value enhancement projects are opportunities where we seek to enhance the
value of our portfolio by identifying and executing strategies that maximize the highest and best use of all aspects of our properties, such as the development of timeshare or condominium units on excess land.

For the quarter ended March 23, 2007, our renewal and replacement capital expenditures were approximately $52 million. We expect total renewal
and replacement capital expenditures for 2007 to be approximately $310 million. Our renewal and replacement capital expenditures are generally funded by the furniture, fixture and equipment funds established at certain of our hotels (typically
funded with approximately 5% of property revenues) and by our available cash. We also spent approximately $67 million during the quarter on repositioning/ROI projects. We expect total repositioning/ROI expenditures for 2007 to be approximately
$330 million.

In January of 2007, we completed the sale of the Marriott Mountain Shadows Resort & Golf Club for
$42 million and recognized a gain of approximately $21 million. This sale represents an example of one of the value enhancement opportunities in our portfolio where we can realize the inherent real estate value of our holdings.

Sources and Uses of Cash

Our principal sources of
cash are cash from operations, the sale of assets, borrowing under our credit facility and our ability to obtain additional financing through various capital market transactions. Our principal uses of cash are debt service, asset acquisitions,
capital expenditures, operating costs, corporate expenses and distributions to equity holders.

Cash Provided by Operations.Our
cash provided by operations for the first quarter of 2007 increased $21 million to $121 million, due primarily to the increase in net income.



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Cash Used in Investing Activities. Approximately $223 million of cash was provided by
investing activities during the first quarter of 2007. This included approximately $331 million of net proceeds from the sales of seven properties in 2007, primarily offset by capital expenditures of $119 million. Additionally, in February
2007, we purchased the land under the Atlanta Marriott Perimeter Center, which we previously leased, for approximately $15 million. The following table summarizes the significant investing activities that have been completed since the beginning
of 2007 (in millions):



|                 |  |                                                                   |  |                           |     |  
|---------------- |  | ----------------------------------------------------------------- |  | ------------------------- | --- | -
|Transaction Date |  | Description of Transaction                                        |  | (Investment)/ Sales Price |    
|February         |  | Acquisition of the Atlanta Marriott Perimeter Center ground lease |  | $                         | (15 | )
|February         |  | Sale of Miami Airport Marriott                                    |  |                           | 57  |  
|February         |  | Sale of Raleigh Marriott Crabtree Valley                          |  |                           | 48  |  
|February         |  | Sale of Fairview Park Marriott                                    |  |                           | 109 |  
|January          |  | Sale of Sheraton Milwaukee Brookfield                             |  |                           | 28  |  
|January          |  | Sale of Sheraton Providence                                       |  |                           | 10  |  
|January          |  | Sale of Capitol Hill Suites                                       |  |                           | 39  |  
|January          |  | Sale of Marriott Mountain Shadows Resort & Golf Club              |  |                           | 42  |  

Cash Provided by Financing Activities.Approximately $463 million of cash was provided
by financing activities during 2007. We issued approximately $1.0 billion of debt in the first quarter of 2007. Cash used in financing activities in the first quarter consisted of debt prepayments of approximately $175 million and
scheduled principal repayments of $11 million. During the first quarter of 2007, we also repaid the $250 million outstanding balance under our credit facility and paid distributions on our common and preferred units of $137 million,
an increase of $88 million from the first quarter 2006. The following table summarizes the significant financing transactions, including activity subsequent to the end of the quarter (in millions):



|                 |  |                                                                                                                                  |  |                    |      |  
|---------------- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ---- | -
|Transaction Date |  | Description of Transaction                                                                                                       |  | Transaction Amount |     
|April            |  | Prepayment of the Philadelphia Marriott Convention Center mortgages with a weighted average interest rate of 8.52%               |  | $                  | (96  | )
|April            |  | Prepayment of the 8.41% Four Seasons Hotel, Atlanta mortgage                                                                     |  |                    | (33  | )
|March            |  | Proceeds from the issuance of 25/8% Exchangeable
Senior Debentures due 2027                                                      |  |                    | 589  |  
|March            |  | Prepayment of the 7.42% mortgage on the JW Marriott, Washington, D.C. (1)                                                        |  |                    | (88  | )
|March            |  | Proceeds from the issuance of the 5.53% mortgage loan secured by the Ritz-Carlton, Naples and Newport Beach Marriott Hotel &
Spa |  |                    | 298  |  
|March            |  | Repayment of the Credit Facility                                                                                                 |  |                    | (175 | )
|February         |  | Proceeds from the 5.55% Harbor Beach Marriott Resort & Spa mortgage refinancing                                                  |  |                    | 133  |  
|February         |  | Repayment of the 8.58% Harbor Beach Marriott Resort & Spa mortgage                                                               |  |                    | (88  | )
|January          |  | Repayment of the Credit Facility                                                                                                 |  |                    | (75  | )

---

|(1) | The JW Marriott, Washington, D.C. had a floating interest rate of LIBOR plus 210 basis points. The interest rates shown reflect the rate as of the date of the transaction.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Debt

As of
March 23, 2007, our total debt was $6.5 billion. The weighted average interest rate of our debt was approximately 6.3% and the weighted average maturity was 6.0 years. Additionally, all of our debt has a fixed rate of interest.



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As of March 23, 2007 and December 31, 2006, our debt was comprised of (in millions):



|                                                                                                                                                                               |  |               |       |                  |   |      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ----- | ---------------- | - | -----
|                                                                                                                                                                               |  | March 23,2007 |       | December 31,2006
|Series K senior notes, with a rate of 71/8% due November 2013                                                                                                                  |  | $             | 725   |                  | $ | 725  
|Series M senior notes, with a rate of 7% due August 2012                                                                                                                       |  |               | 347   |                  |   | 347  
|Series O senior notes, with a rate of 63/8% due March 2015                                                                                                                     |  |               | 650   |                  |   | 650  
|Series Q senior notes, with a rate of 63/4% due June 2016                                                                                                                      |  |               | 800   |                  |   | 800  
|Series S senior notes, with a rate of 67/8% due November 2014                                                                                                                  |  |               | 496   |                  |   | 496  
|$500 million Exchangeable Senior Debentures, with a rate of 3.25% due April 2024                                                                                               |  |               | 495   |                  |   | 495  
|$600 million Exchangeable Senior Debentures, with a rate of 25/8% due April 2027                                                                                               |  |               | 591   |                  |   |     
|Senior notes, with an average rate of 9.7%, maturing through 2012                                                                                                              |  |               | 13    |                  |   | 13   
|                                                                                                                                                                               |  |               |       |                  |   |      
|Total senior notes                                                                                                                                                             |  |               | 4,117 |                  |   | 3,526
|Mortgage debt (non-recourse) secured by $3.6 billion of real estate assets, with an average interest rate of 7.1% at
March 23, 2007 and 7.5% at December 31, 2006 respectively |  |               | 2,262 |                  |   | 2,014
|Credit facility                                                                                                                                                                |  |               |      |                  |   | 250  
|Other                                                                                                                                                                          |  |               | 88    |                  |   | 88   
|                                                                                                                                                                               |  |               |       |                  |   |      
|Total debt                                                                                                                                                                     |  | $             | 6,467 |                  | $ | 5,878
|                                                                                                                                                                               |  |               |       |                  |   |      

$600 million Exchangeable Senior
Debentures.On March 23, 2007, we issued $600 million 25/8% Exchangeable Senior
Debentures (the 2007 Debentures) and received proceeds of $589 million, net of underwriting fees and expenses and original issue discount. The 2007 Debentures mature on April 15, 2027 and are equal in right of payment with all of
our other senior notes. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year beginning on July 15, 2007. We can redeem for cash all, or part of, the 2007 Debentures
at any time on or after April 20, 2012 upon 15 days notice at a redemption price of 100% of the principal amount plus accrued interest. Holders have the right to require us to repurchase the 2007 Debentures on April 15,
2012, April 15, 2017 and April 15, 2022 for cash equal to 100% of the principal amount plus accrued interest. Holders may exchange their 2007 Debentures prior to maturity under certain conditions, including when the closing sale price
of Hosts common stock is more than 130% of the exchange price per share for at least 20 of 30 consecutive trading days during certain periods or any time up to two days prior to the date on which the debentures have been called for redemption.
On exchange, we will deliver cash in an amount equal to not less than the lower of the exchange value (which is the applicable exchange rate multiplied by the average price of Hosts common shares) and the aggregate principal amount of the 2007
Debentures to be exchanged, and, at our option, Hosts shares, cash or a combination thereof for any excess above the principal value. The initial exchange rate is 31.002 shares of Host common stock per $1,000 principal amount of debentures,
which is equivalent to an exchange price of $32.26 per share of Host common stock. Upon issuance of such shares by Host, we will issue to Host an equivalent number of common OP units. The exchange rate may be adjusted under certain circumstances
including the payment of common dividends exceeding $.20 per share in any given quarter. The 2007 Debentures and the Host common stock issuable, at our option, upon exchange of the debentures have not yet been registered under the Securities Act and
may not be offered or sold except to qualified institutional buyers, as defined.

$500 million Exchangeable Senior
Debentures. On March 16, 2004, we issued $500 million of 3.25% Exchangeable Senior Debentures (the 2004 Debentures) and received net proceeds of $484 million, after discounts, underwriting fees and expenses. The 2004
Debentures mature on April 15, 2024 and are equal in right of payment with all of our other senior debt. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. We can
redeem for cash all, or part of, the 2004 Debentures at any time subsequent to April 19, 2009 upon 30 days notice at the applicable redemption price as set forth in the indenture. Holders have the right to require us to repurchase the 2004
Debentures on April 15, 2010, April 15, 2014 and April 15, 2019 for cash equal to 100% of the principal amount. Holders may exchange their 2004 Debentures prior to maturity under certain conditions, including at any time at which
the closing sale price of Host common stock is more than 120% of the exchange price per share, for at least 20 of 30 consecutive trading days during certain periods or any time up to two days prior to the date on which the debentures have been
called for redemption. The 2004 Debentures are currently exchangeable into shares of Hosts common stock at an exchange rate of 58.0682 shares for each $1,000 of principal amount of the 2004 Debentures, or a total of approximately
29 million shares (which is equivalent to an exchange price of $17.22 per share). Upon issuance of such shares by Host, we will issue to Host an equivalent number of common OP units. The exchange rate is adjusted for certain circumstances,
including the payment of all



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common dividends. The 2004 Debentures will remain exchangeable until July 1, 2007 (the last day of the current exchange period) and will continue to be
exchangeable after July 1, 2007 if the trading price of Host common stock continues to exceed 120% of the exchange price, or if other conditions for exchange are satisfied.

Mortgage Debt. Substantially all of our mortgage debt is recourse solely to specific assets except in instances of fraud, misapplication of
funds and other customary recourse provisions. As of March 23, 2007, we have 27 assets that are encumbered by mortgage debt. Certain of these assets are secured by mortgage debt that contains restrictive covenants that require the mortgage
servicer or lender to retain and hold in escrow the cash flow after debt service if it declines below specified operating levels. We are currently above the specified operating levels; therefore, no cash is being held in escrow under these
restrictive covenants.

During the first quarter of 2007, we issued a $300 million mortgage secured by The Ritz-Carlton, Naples and
the Newport Beach Marriott Hotel & Spa, which bears interest at a rate of 5.53% and matures in 2014; refinanced the $88 million 8.58% mortgage on the Harbor Beach Marriott Resort and Spa due March 1, 2007 with a $134 million
mortgage at a rate of 5.55% that matures in 2014; and repaid the $88 million floating rate mortgage due September 15, 2007 on the JW Marriott Hotel, Washington, D.C.

Distribution Policy

Host is required to distribute to its stockholders at least 90% of its annual
taxable income, excluding net capital gain, in order to qualify as a REIT, including taxable income recognized for tax purposes but with regard to which we do not receive corresponding cash. Funds used by Host to pay dividends on its common and
preferred stock are provided through distributions from Host LP. For every share of common and preferred stock of Host, Host LP has issued to Host a corresponding common OP unit and preferred OP unit. As of April 30, 2007, Host is the owner of
substantially all of the preferred OP units and approximately 96.6% of the common OP units. The remaining 3.4% of the common OP units are held by various third-party limited partners.

Investors should take into account the 3.4% minority position in Host LP common OP units when analyzing common and preferred dividend payments by Host to
its stockholders, as these holders share, on a pro rata basis, in amounts being distributed by Host LP to holders of its corresponding common and preferred OP units. When Host pays a common or preferred dividend, Host LP pays an equivalent per unit
distribution on all common or corresponding preferred OP units. For example, if Host paid a $1 per share dividend on its common stock, it would be based on payment of a $1 per unit distribution by Host LP to Host, as well as to other common OP unit
holders.

Hosts current policy on common dividends is generally to distribute 100% of its annual taxable income. Going forward, Host
intends to pay a regular quarterly dividend of $0.20 per share, and, in addition, to declare a special dividend during the fourth quarter of each year, the amount of which will vary depending on Hosts level of taxable income. Additionally,
based on our forecast for the rest of 2007, we expect meaningful growth in the fourth quarter special dividend relative to the 2006 special dividend of $.05 per share. Host currently intends to continue paying dividends on its preferred stock,
regardless of the amount of taxable income, unless contractually restricted. The amount of any dividends will be determined by Hosts Board of Directors.

On March 15, 2007, Hosts Board of Directors declared a cash dividend of $0.20 per share on its common stock. The dividend was paid on April 16, 2007 to stockholders of record as of March 31,
2007. Accordingly, we made a similar distribution on our common OP units. The amount of any future common dividend will be determined by Hosts Board of Directors.

On March 15, 2007, Hosts Board of Directors also declared a cash dividend of $0.5546875 per share on its Class E preferred stock. The dividend was paid on April 16, 2007 to preferred stockholders
of record as of March 31, 2007. Accordingly, we made a similar distribution on our Class E preferred OP units.

Comparable Hotel and Comparable
Hotel plus the Starwood Portfolio Operating Statistics

We present certain operating statistics (i.e., RevPAR, average daily rate and
average occupancy) and operating results (revenues, expenses and adjusted operating profit) for the periods included in this report on a comparable hotel basis. We define our comparable hotels as properties (i) that are owned or leased by us
and the operations of which are included in our consolidated results, whether as continuing operations or discontinued operations for the



26



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entirety of the reporting periods being compared and (ii) that have not sustained substantial property damage or business interruption, or undergone
large-scale capital projects during the reporting periods being compared. Of the 121 hotels that we owned on March 23, 2007, 94 have been classified as comparable hotels. The operating results of the following hotels that we owned as of
March 23, 2007 are excluded from comparable hotel results for these periods:



| |  |  | Atlanta Marriott Marquis (major renovation started in August 2005);
| | - |  | -------------------------------------------------------------------



| |  |  | New Orleans Marriott (property damage and business interruption from Hurricane Katrina in August 2005);
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | The Westin Kierland Resort & Spa (acquired in September 2006); and
| | - |  | ------------------------------------------------------------------



| |  |  | 24 consolidated hotels that we acquired from Starwood on April 10, 2006.
| | - |  | ------------------------------------------------------------------------

The operating results of the 14 hotels we disposed of as of March 23, 2007 or in 2006 are also not included in comparable hotel results for the
periods presented herein. Moreover, because these statistics and operating results are for our hotel properties, they exclude results for our non-hotel properties and other real estate investments.

In addition to comparable hotel RevPAR, we also have presented comparable hotel plus the Starwood portfolio RevPAR. This represents our comparable hotels
(described above) plus the 24 hotels acquired from Starwood on April 10, 2006 that we own as of March 23, 2007. Accordingly, we have included the results of the Starwood portfolio for periods prior to our ownership in 2006 in the
determination of the comparable hotel plus Starwood portfolio RevPAR. As properties managed by Starwood report results on a monthly basis, the first quarter RevPAR reflects the results of these hotels for January and February consistent with our
treatment of reporting periods discussed in our most recent Annual Report of Form 10-K. Given the significance of the Starwood portfolio to our operating results, we believe this supplemental presentation provides useful information to investors.

Non-GAAP Financial Measures

We use
certain non-GAAP financial measures, which are measures of our historical financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. They are as follows:
(i) Funds From Operations (FFO) per diluted unit, and (ii) Comparable Hotel Operating Results. A complete discussion of these measures (including the reasons why we believe they are useful to investors, the additional purposes for which
management uses these measures and their limitations) is included in our most recent Annual Report on Form 10K.

FFO per Diluted Unit

We present FFO per diluted unit as a non-GAAP measure of our performance in addition to our earnings per unit (calculated in accordance
with GAAP). We calculate FFO per diluted unit for a given operating period as our FFO (defined as set forth below) for such period divided by the number of fully diluted units outstanding during such period. The National Association of Real Estate
Investment Trusts (NAREIT) defines FFO as net income (calculated in accordance with GAAP) excluding gains (or losses) from sales of real estate, the cumulative effect of changes in accounting principles, real estate-related depreciation and
amortization and adjustments for unconsolidated partnerships and joint ventures. FFO is presented on a per unit basis after making adjustments for the effects of dilutive securities, including the payment of preferred OP unit distributions, in
accordance with NAREIT guidelines. We believe that FFO per diluted unit is a useful supplemental measure of our operating performance and that presentation of FFO per diluted unit, when combined with the primary GAAP presentation of earnings per
unit, provides beneficial information to investors.

The following table provides a reconciliation of net income available to common unitholders per unit
to FFO per diluted unit (in millions, except per unit amounts):



27



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##### Table of Contents

Reconciliation of Net Income Available to

Common Unitholders to Funds From Operations per Diluted Unit



|                                                                                                                                                        |  |                |      |   |                |       |                  |   |      |               |  |   |        |   |                 |       |  |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---- | - | -------------- | ----- | ---------------- | - | ---- | ------------- |  | - | ------ | - | --------------- | ----- |  | - | ---- | -
|                                                                                                                                                        |  | Quarter ended  |     
|                                                                                                                                                        |  | March 23, 2007 |      |   | March 24, 2006 |      
|                                                                                                                                                        |  | Income (Loss)  |      |   | Shares         |       | Per Share Amount |   |      | Income (Loss) |  |   | Shares |   | Per ShareAmount |      
|Net income available to common unitholders                                                                                                              |  | $              | 192  |   |                | 540.2 |                  | $ | .36  |               |  | $ | 175    |   |                 | 397.5 |  | $ | .44  |  
|Adjustments:                                                                                                                                            |  |                |      |   |                |       |                  |   |      |               |  |   |        |   |                 |       |  |   |      |  
|Gain on dispositions, net of taxes                                                                                                                      |  |                | (141 | ) |                |      |                  |   | (.26 | )             |  |   | (153   | ) |                 |      |  |   | (.38 | )
|Amortization of deferred gains, net of taxes                                                                                                            |  |                | (1   | ) |                |      |                  |   |     |               |  |   | (1     | ) |                 |      |  |   |     |  
|Depreciation and amortization                                                                                                                           |  |                | 117  |   |                |      |                  |   | .21  |               |  |   | 89     |   |                 |      |  |   | .22  |  
|Adjustments for dilutive securities:                                                                                                                    |  |                |      |   |                |       |                  |   |      |               |  |   |        |   |                 |       |  |   |      |  
|Assuming distribution of units to Host for Host shares granted under the comprehensive stock plan less shares assumed purchased at average
market price |  |                |     |   |                | .8    |                  |   |     |               |  |   |       |   |                 | .9    |  |   |     |  
|Assuming conversion of 2004 Exchangeable Senior Debentures                                                                                              |  |                | 5    |   |                | 29.0  |                  |   | (.01 | )             |  |   | 5      |   |                 | 28.1  |  |   | (.01 | )
|Assuming conversion of Convertible debt obligation to Host                                                                                              |  |                |     |   |                |      |                  |   |     |               |  |   | 2      |   |                 | 8.2   |  |   |     |  
|                                                                                                                                                        |  |                |      |   |                |       |                  |   |      |               |  |   |        |   |                 |       |  |   |      |  
|FFO per diluted unit(a)                                                                                                                                 |  | $              | 172  |   |                | 570.0 |                  | $ | .30  |               |  | $ | 117    |   |                 | 434.7 |  | $ | .27  |  
|                                                                                                                                                        |  |                |      |   |                |       |                  |   |      |               |  |   |        |   |                 |       |  |   |      |  

---

|(a) | FFO per diluted unit in accordance with NAREIT is adjusted for the effects of dilutive securities. Dilutive securities may include OP units granted to Host for Host shares granted
under Hosts comprehensive stock plans, preferred OP units held by minority partners, exchangeable debt securities and other minority interests that have the option to convert their limited partnership interest to common OP units. No effect is
shown for securities if they are anti-dilutive.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Comparable Hotel Operating Results

We present certain operating results for our hotels, such as hotel revenues, expenses and adjusted operating profit, on a comparable hotel, or same store basis as supplemental information for investors. We
present these hotel operating results on a comparable hotel basis because we believe that doing so provides investors and management with useful information for evaluating the period-to-period performance of our hotels and facilitates comparisons
with other hotel REITs and hotel owners. The following table presents certain operating results and statistics for our comparable hotels for the periods presented herein:

Comparable Hotel Results (a)

(in millions, except hotel statistics)



|                                                               |  |               |        |   |               |   |        |  
|-------------------------------------------------------------- |  | ------------- | ------ | - | ------------- | - | ------ | -
|                                                               |  | Quarter ended |       
|                                                               |  | March 23,2007 |        |   | March 24,2006 |  
|Number of hotels                                               |  |               | 94     |   |               |   | 94     |  
|Number of rooms                                                |  |               | 47,801 |   |               |   | 47,801 |  
|Percent change in Comparable Hotel RevPAR                      |  |               | 6.2    | % |               |   |        |  
|                                                               |  |              
|Comparable hotel sales                                         |  |               |        |   |               |   |        |  
|Room                                                           |  | $             | 507    |   |               | $ | 478    |  
|Food and beverage (b)                                          |  |               | 269    |   |               |   | 259    |  
|Other                                                          |  |               | 56     |   |               |   | 52     |  
|                                                               |  |               |        |   |               |   |        |  
|Comparable hotel sales (c)                                     |  |               | 832    |   |               |   | 789    |  
|                                                               |  |               |        |   |               |   |        |  
|Comparable hotel expenses                                      |  |               |        |   |               |   |        |  
|Room                                                           |  |               | 121    |   |               |   | 115    |  
|Food and beverage (d)                                          |  |               | 196    |   |               |   | 191    |  
|Other                                                          |  |               | 31     |   |               |   | 30     |  
|Management fees, ground rent and other costs                   |  |               | 266    |   |               |   | 249    |  
|                                                               |  |               |        |   |               |   |        |  
|Comparable hotel expenses (e)                                  |  |               | 614    |   |               |   | 585    |  
|                                                               |  |               |        |   |               |   |        |  
|Comparable hotel adjusted operating profit                     |  |               | 218    |   |               |   | 204    |  
|Non-comparable hotel results, net (f)                          |  |               | 53     |   |               |   | 14     |  
|Office building and limited service properties, net (g)        |  |               |       |   |               |   | (1     | )
|Depreciation and amortization                                  |  |               | (116   | ) |               |   | (87    | )
|Corporate and other expenses                                   |  |               | (21    | ) |               |   | (20    | )
|                                                               |  |               |        |   |               |   |        |  
|Operating profit per the consolidated statements of operations |  | $             | 134    |   |               | $ | 110    |  
|                                                               |  |               |        |   |               |   |        |  

---

|(a) | The reporting period for our comparable operating statistics for the first quarter of 2006 is from December 30, 2006 to March 23, 2007 and for the first quarter of 2005
from December 31, 2005 to March 24, 2006. For further discussion, see Reporting Periods in our most recent Annual Report of Form 10K.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | The reconciliation of total food and beverage sales per the consolidated statements of operations to the comparable food and beverage sales is as follows (in millions):
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                           |  |               |     |   |               |   |     |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------- | --- | - | ------------- | - | --- | -
|                                                                                                                           |  | Quarter ended |    
|                                                                                                                           |  | March 23,2007 |     |   | March 24,2006 |  
|Food and beverage sales per the consolidated statements of operations                                                      |  | $             | 323 |   |               | $ | 259 |  
|Non-comparable food and beverage sales                                                                                     |  |               | (67 | ) |               |   | (10 | )
|Food and beverage sales for the property for which we record rental income                                                 |  |               | 9   |   |               |   | 8   |  
|Adjustment for food and beverage sales for comparable hotels to reflect Marriotts fiscal year for Marriott-managed
hotels |  |               | 4   |   |               |   | 2   |  
|                                                                                                                           |  |               |     |   |               |   |     |  
|Comparable food and beverage sales                                                                                         |  | $             | 269 |   |               | $ | 259 |  
|                                                                                                                           |  |               |     |   |               |   |     |  



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|(c) | The reconciliation of total revenues per the consolidated statements of operations to the comparable hotel sales is as follows (in millions):
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                               |  |               |       |   |               |   |     |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------- | ----- | - | ------------- | - | --- | -
|                                                                                                               |  | Quarter ended |      
|                                                                                                               |  | March 23,2007 |       |   | March 24,2006 |  
|Revenues per the consolidated statements of operations                                                         |  | $             | 1,037 |   |               | $ | 825 |  
|Non-comparable hotel sales                                                                                     |  |               | (214  | ) |               |   | (37 | )
|Hotel sales for the property for which we record rental income, net                                            |  |               | 13    |   |               |   | 12  |  
|Rental income for office buildings and select service hotels                                                   |  |               | (18   | ) |               |   | (18 | )
|Adjustment for hotel sales for comparable hotels to reflect Marriotts fiscal year for Marriott-managed hotels |  |               | 14    |   |               |   | 7   |  
|                                                                                                               |  |               |       |   |               |   |     |  
|Comparable hotel sales                                                                                         |  | $             | 832   |   |               | $ | 789 |  
|                                                                                                               |  |               |       |   |               |   |     |  

|(d) | The reconciliation of total food and beverage expenses per the consolidated statements of operations to the comparable food and beverage expenses is as follows (in millions):
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                              |  |               |     |   |               |   |     |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ------------- | --- | - | ------------- | - | --- | -
|                                                                                                                              |  | Quarter ended |    
|                                                                                                                              |  | March 23,2007 |     |   | March 24,2006 |  
|Food and beverage expenses per the consolidated statements of operations                                                      |  | $             | 237 |   |               | $ | 191 |  
|Non-comparable food and beverage expense                                                                                      |  |               | (49 | ) |               |   | (6  | )
|Food and beverage expenses for the property for which we record rental income                                                 |  |               | 5   |   |               |   | 4   |  
|Adjustment for food and beverage expenses for comparable hotels to reflect Marriotts fiscal year for Marriott-managed
hotels |  |               | 3   |   |               |   | 2   |  
|                                                                                                                              |  |               |     |   |               |   |     |  
|Comparable food and beverage expenses                                                                                         |  | $             | 196 |   |               | $ | 191 |  
|                                                                                                                              |  |               |     |   |               |   |     |  

|(e) | The reconciliation of operating costs per the consolidated statements of operations to the comparable hotel expenses is as follows (in millions):
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                                                  |  |               |      |   |               |   |     |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------- | ---- | - | ------------- | - | --- | -
|                                                                                                                  |  | Quarter ended |     
|                                                                                                                  |  | March 23,2007 |      |   | March 24,2006 |  
|Operating costs and expenses per the consolidated statements of operations                                        |  | $             | 903  |   |               | $ | 715 |  
|Non-comparable hotel expenses                                                                                     |  |               | (160 | ) |               |   | (24 | )
|Hotel expenses for the property for which we record rental income                                                 |  |               | 16   |   |               |   | 15  |  
|Rent expense for office buildings and select service hotels                                                       |  |               | (18  | ) |               |   | (19 | )
|Adjustment for hotel expenses for comparable hotels to reflect Marriotts fiscal year for Marriott-managed hotels |  |               | 10   |   |               |   | 5   |  
|Depreciation and amortization                                                                                     |  |               | (116 | ) |               |   | (87 | )
|Corporate and other expenses                                                                                      |  |               | (21  | ) |               |   | (20 | )
|                                                                                                                  |  |               |      |   |               |   |     |  
|Comparable hotel expenses                                                                                         |  | $             | 614  |   |               | $ | 585 |  
|                                                                                                                  |  |               |      |   |               |   |     |  

|(f) | Non-comparable hotel results, net includes the following items: (i) the results of operations of our non-comparable hotels whose operations are included in our consolidated
statements of operations as continuing operations and (ii) the difference between the number of days of operations reflected in the comparable hotel results and the number of days of operations reflected in the consolidated statements of
operations. For further detail, see Reporting Periods in our most recent Annual Report on Form 10K.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(g) | Represents rental income less rental expense for select service properties and office buildings.
|--- | ------------------------------------------------------------------------------------------------



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##### Table of Contents

|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

Interest Rate Sensitivity

During the first quarter of 2007, we repaid the balance of our floating rate debt.
Floating rate debt accounted for 5.8% of our outstanding debt balance at December 31, 2006. See our most recent Annual Report on Form 10K.



|Item 4. | Controls and Procedures
|------- | -----------------------

As required by Rules
13a-15 under the Securities Exchange Act of 1934, management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period
covered by this report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding our required disclosure. In designing and evaluating our disclosure controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and
management was required to apply its judgment in evaluating and implementing possible controls and procedures.

We carried out an
evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of
the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

Issuer Purchases of Equity Securities



|                                                                                                                                                                            |  |                                        |   |  |                                                      |  |                                                                                       |  |                                                                                                                 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------- | - |  | ---------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------
|Period                                                                                                                                                                      |  | Total Number of Common Units
Purchased |   |  | Average Price Paid per Common Unit                   |  | Total Number of CommonUnits Purchased as Part of Publicly Announced Plans or Programs |  | Maximum Number (or Approximate Dollar Value) of
CommonUnits that May Yet Be Purchased Under the Plans orPrograms
|January 1, 2007January 31, 2007                                                                                                                                            |  | 123,009                                | * |  | 1 share of Host Hotels & Resorts, Inc. common stock* |  |                                                                                      |  |                                                                                                                
|                                                                                                                                                                            |  |                                        |   | 
|February 1, 2007February 28, 2007                                                                                                                                          |  | 599,269                                | * |  | 1 share of Host Hotels & Resorts, Inc. common stock* |  |                                                                                      |  |                                                                                                                
|                                                                                                                                                                            |  |                                        |   | 
|March 1, 2007 March 23, 2007                                                                                                                                               |  | 20,412                                 | * |  | 1 share of Host Hotels & Resorts, Inc. common stock* |  |                                                                                      |  |                                                                                                                
|                                                                                                                                                                            |  |                                        |   |  |                                                      |  |                                                                                       |  |                                                                                                                 
|Total                                                                                                                                                                       |  | 742,690                                | * |  | 1 share of Host Hotels & Resorts, Inc. common stock* |  |                                                                                       |  |                                                                                                                 
|                                                                                                                                                                            |  |                                        |   |  |                                                      |  |                                                                                       |  |                                                                                                                 
|*  Reflects common
operating partnership units redeemed by holders in exchange for 1 share of Host Hotels & Resorts, Inc. common stock for each operating partnership unit.



|Item 6. | Exhibits
|------- | --------

The exhibits listed on the accompanying
Exhibit Index are filed as part of this report and such Exhibit Index is incorporated herein by reference.



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|4.19        |  | Twenty-Third Supplemental Indenture, dated March 23, 2007, by and among Host Hotels & Resorts, L.P., Host Hotels & Resorts, Inc., the Subsidiary Guarantors named therein and The
Bank of New York as successor to HSBC Bank USA (formerly, Marine Midland Bank), as trustee, to the Amended and Restated Indenture dated August 5, 1998, including form of debenture (incorporated by reference to Exhibit 4.1 of Host Hotels &
Resorts, Inc. Current Report on Form 8-K filed on March 29, 2007).
|            | 
|10.42       |  | Registration Rights Agreement, dated March 23, 2007, among Host Hotels & Resorts, L.P., Host Hotels & Resorts, Inc., Goldman, Sachs & Co. and Banc of America Securities LLC
(incorporated by reference to Exhibit 10.1 of Host Hotels & Resorts, Inc. Current Report on Form 8-K filed on March 29, 2007).                                                                                                                                                                                        
|            | 
|12.1        |  | Computation of Ratio of Earnings to Fixed Charges and Preferred OP Unit Distributions.                                                                                                                                                                                                                                                                                                                                                                                                             
|            | 
|31.1        |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                
|            | 
|31.2        |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                
|            | 
|32         |  | Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                        

---

| | This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. 1350 and is not being filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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 HOTELS & RESORTS, L.P.                                                    |  |  |  | 
|            |  |                                                                                | 
|            |  | By: Host Hotels & Resorts, Inc.                                                |  |  |  | 
|            |  | Its General Partner                                                            |  |  |  | 
|            |  |                                                                                | 
|May 2, 2007 |  | /s/ Larry K. Harvey                                                            |  |  |  | 
|            |  | Larry K. Harvey                                                                |  |  |  | 
|            |  | Senior Vice President, Chief Accounting Officer of
Host Hotels & Resorts, Inc. |  |  |  | 



33