The following discussion and analysis should be read in conjunction with the
unaudited condensed consolidated financial statements and related notes included
elsewhere in this report. Host Inc. operates as a self-managed and
self-administered REIT. Host Inc. is the sole general partner of Host L.P. and
holds approximately 99% of its partnership interests. Host L.P. is a limited
partnership operating through an umbrella partnership structure. The remaining
common OP units are owned by various unaffiliated limited partners.

Forward-Looking Statements



In this report on Form 10-Q, we make 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,
including references to assumptions and forecasts of future results.
Forward-looking statements are based on management's current expectations and
assumptions and are not guarantees of future performance. Forward-looking
statements 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.

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• the duration and scope of the COVID-19 pandemic and its short and

longer-term impact on the demand for travel, transient and group business,


        and levels of consumer confidence; actions governments, businesses and
        individuals take in response to the pandemic, including limiting or
        banning travel; the ability of our hotel managers to operate hotels in a
        way that facilitate social distancing, implement enhanced cleaning
        protocols and other COVID-19 mitigation practices; the impact of the
        pandemic and actions taken in response to the pandemic on global and

regional economies, travel, and economic activity, including the duration

and magnitude of its impact on unemployment rates, business investment and

consumer discretionary spending; the pace of recovery when the COVID-19

pandemic subsides; general economic uncertainty in U.S. markets where we

own hotels and a worsening of economic conditions or low levels of

economic growth in these markets; the effects on hotel operations of steps

we and our hotel managers take to reduce operating costs in response to

the COVID-19 pandemic;

• the effect on lodging demand of (i) changes in national and local economic

and business conditions, including concerns about the duration of the U.S.

economic recession as a result of the COVID-19 pandemic, global economic

prospects, consumer confidence and the value of the U.S. dollar, and

(ii) factors that may shape public perception of travel to a particular

location such as natural disasters, weather, changes in the international

political climate, and the occurrence or potential occurrence of terrorist


        attacks, all of which will affect occupancy rates at our hotels and the
        demand for hotel products and services;

• the impact of geopolitical developments outside the United States, such as

the pace of economic growth in Europe, the effects of the United Kingdom's

withdrawal from the European Union, escalating trade tensions between the

United States and its trading partners such as China, or conflicts in the

Middle East, all of which could affect the relative volatility of global


        credit markets generally, global travel and lodging demand within the
        United States;

• risks that U.S. immigration policies, border closings related to the

COVID-19 pandemic and travel bans will suppress international travel to

the United States generally;

• volatility in global financial and credit markets, in particular because

of the COVID-19 pandemic, and the impact of budget deficits and potential

U.S. governmental action to address such deficits through reductions in

spending and similar austerity measures, which could materially adversely

affect U.S. and global economic conditions, business activity, credit

availability, borrowing costs, and lodging demand;

• operating risks associated with the hotel business, including the effect

of labor stoppages or strikes, increasing operating or labor costs or

changes in workplace rules that affect labor costs and risks relating to

the response to the COVID-19 pandemic such as increased costs relating to


        furloughed hotel employees as a result of measures taken by our hotel
        managers in response to the COVID-19 pandemic;

• the effect of rating agency downgrades of our debt securities on the cost

and availability of new debt financings;

• the reduction in our operating flexibility and the limitation on our

ability to incur debt, pay dividends and make distributions resulting from

restrictive covenants in our debt agreements, which limit the amount of

distributions from Host L.P. to Host Inc., and other risks associated with


        the amount of our indebtedness or related to restrictive covenants in our
        debt agreements, including the risk that a default could occur as a result
        of the decline in operations due to the COVID-19 pandemic;


                                       21

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• our ability to maintain our hotels in a first-class manner, including

meeting capital expenditures requirements, and the effect of renovations,


        including temporary closures, on our hotel occupancy and financial
        results;

• the ability of our hotels to compete effectively against other lodging

businesses in the highly competitive markets in which we operate in terms

of access, location, quality of accommodations and room rate structures;

• our ability to acquire or develop additional hotels and the risk that

potential acquisitions or developments may not perform in accordance with

our expectations;

• the ability to complete hotel renovations on schedule and under budget and

the potential for increased costs and construction delays due to

government restrictions on non-essential activities and shortages of

supplies as a result of supply chain disruptions due to the COVID-19

pandemic;

• relationships with property managers and joint venture partners and our


        ability to realize the expected benefits of our joint ventures and other
        strategic relationships;

• risks associated with a single manager, Marriott International, managing a

significant portion of our hotels;

• changes in the desirability of the geographic regions of the hotels in our

portfolio or in the travel patterns of hotel customers;

• the ability of third-party internet and other travel intermediaries to

attract and retain customers;

• our ability to recover fully under our existing insurance policies for

terrorist acts and our ability to maintain adequate or full replacement

cost "all-risk" property insurance policies on our hotels on commercially

reasonable terms;

• the effect of a data breach or significant disruption of hotel operator

information technology networks as a result of cyber attacks;




    •   the effects of tax legislative action and other changes in laws and
        regulations, or the interpretation thereof, including the need for
        compliance with new environmental and safety requirements;

• the ability of Host Inc. and each of the REITs acquired, established or to


        be established by Host Inc. to continue to satisfy complex rules in order
        to qualify as REITs for federal income tax purposes and Host Inc.'s and

Host L.P.'s ability and the ability of our subsidiaries, and similar

entities to be acquired or established by us, to operate effectively


        within the limitations imposed by these rules; and


    •   risks associated with our ability to execute our dividend policy,
        including factors such as the need to preserve cash and financial

flexibility in response to the COVID-19 pandemic, investment activity,


        operating results and the economic outlook, any or all of which may
        influence the decision of our board of directors as to whether to pay
        future dividends at levels previously disclosed or to use available cash
        to pay special dividends.


We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events, or otherwise. Achievement
of future results is subject to risks, uncertainties and potentially inaccurate
assumptions, including those risk factors discussed in our Annual Report on Form
10-K for the year ended December 31, 2019 and in other filings with the
Securities and Exchange Commission ("SEC"). Although we believe that 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.

                                       22

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Operating Results and Outlook

COVID-19 Response

The COVID-19 pandemic has significantly adversely impacted U.S. and global
economic activity and has contributed to significant volatility in financial
markets. The economic impact of the outbreak began in the first quarter of 2020
as various restrictive measures remain in place in many jurisdictions where we
own hotels, including quarantines, restrictions on travel, school closings,
limitations on the size of gatherings and/or restrictions on types of business
that may continue to operate. As a result, the COVID-19 pandemic continues to
negatively impact almost every industry directly or indirectly, including a
severe impact on the U.S. lodging industry generally and our company
specifically. The ongoing effects of COVID-19 on our operations and future
bookings have had, and will continue to have, a material negative impact on our
financial results and cash flows, and such negative impact may continue well
after restrictive measures imposed by federal, state, local and other government
authorities to contain the outbreak have been lifted. In response to the
pandemic, we have taken the following actions:

• As of July 30, 2020, reopened 19 of the 35 hotels that had suspended

operations as of May 6, 2020. We will maintain operations or reopen a


          property when it is anticipated to generate revenue greater than the
          incremental costs associated with staying open;

• Average occupancy (which includes the results of hotels with suspended

operations) has increased from 6.9% in April to 10.7% for the month of

June, due in part to accommodating alternative sources of demand,

including from governmental authorities and local organizations seeking

temporary accommodations for groups, such as medical personnel, first

responders and military personnel and a slight increase in leisure


          demand from month to month;


       •  Working with our hotel managers, implemented portfolio-wide cost
          reductions, including significantly reducing staffing levels by
          furloughing as much as 80% of the hotel workforce, reducing shared
          services fees, suspending food and beverage outlet operations, closing
          guestroom floors and meeting space, and temporarily suspending brand

standards, resulting in a reduction in hotel operating costs across the


          portfolio by approximately 70% in the second quarter, compared to the
          prior year;

• Paid health benefits of approximately $45 million in the second quarter

for hotel employees furloughed by our managers and special pay,

including $35 million that had been accrued in the first quarter. We

also accrued $32 million in the second quarter for similar payments to


          be made in the third quarter;


       •  Suspended contributions to our hotels' FF&E escrow accounts and

suspended or deferred non-essential capital projects, which we expect

will reduce full year capital expenditures spending by approximately

$100 million to $125 million compared to the forecast range as reported
          in our Annual Report on Form 10-K;


       •  Successfully amended the credit agreement governing our $1.5 billion
          revolving credit facility and two $500 million term loans. Under the
          amendment, the quarterly-tested financial covenants were waived

beginning July 1, 2020 until the required financial statement reporting


          date for the third quarter of 2021;


       •  Suspended regular quarterly dividends and stock repurchases until
          further notice. All future dividends are subject to approval by the
          Board of Directors; and


       •  Expect to reduce corporate expenses by 10-15% for the full year compared
          to the prior year, through reduced travel, compensation and other
          overhead.


As a result of the initiatives discussed above, we have significantly reduced
our monthly cash expenditures for the second quarter. The following presents the
second quarter 2020 results (in millions):


                                                                                 Quarter ended
                                       April          May          June          June 30, 2020
Revenues                             $      24     $      30     $      49     $             103
Net loss                                  (120 )        (114 )        (122 )                (356 )
Hotel-level operating loss (1)             (73 )         (53 )         (37 )                (163 )



                                       23

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Significant expenditures for the second quarter included in our cash burn include (in millions):



                                              Quarter ended June 30, 2020
GAAP net cash used in operating activities   $                        (172 )
Cash burn (1)                                                         (399 )

Components of cash burn:
Hotel-level operating loss (1)                                        (163 )
Interest payments                                                      (46 )
Cash corporate and other expenses                                      (21 )
Capital expenditures                                                  (169 )
___________

(1) Hotel-level operating loss and cash burn are non-GAAP (U.S. Generally

Accepted Accounting Principles) financial measures within the meaning of the

rules of the Securities and Exchange Commission ("SEC"). See "Non-GAAP

Financial Measures" for more information on these measures, including why we

believe that these supplemental measures are useful, reconciliations to the

most directly comparable GAAP measure, and the limitations on the use of

these supplemental measures.




In addition, we continue to evaluate the stimulus relief available under the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Federal
Reserve's Primary Market Corporate Credit Facility (PMCCF). We understand that
our operators have filed or will file for the Employee Retention Credit to
partially offset the costs for their furloughed hotel employees under Title II
of the CARES Act, and any benefit received by our operators through the Employee
Retention Credit would benefit us as we bear the expense for the wages and
benefits of all persons working at our hotels. We have not filed for any relief
under the CARES Act.

The impact of the COVID-19 pandemic on the company remains fluid, as does our
corporate and property-level response, together with the response of our hotel
operators. There remains a great deal of uncertainty surrounding the trends and
duration of the COVID-19 pandemic and we are monitoring developments on an
ongoing basis. We, and our hotel managers, may take additional actions in
response to future developments.

                                       24

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Operating Results



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



Historical Income
Statement Data:
                               Quarter ended June 30,                         Year-to-date ended June 30,
                                2020              2019        Change           2020                 2019          Change
Total revenues              $        103        $  1,483        (93.1 )%   $      1,155         $      2,873        (59.8 )%
Net income (loss)                   (356 )           290          N/M              (359 )                479          N/M
Operating profit (loss)             (353 )           280          N/M              (364 )                496          N/M
Operating profit (loss)
margin under GAAP                 (342.7 )%         18.9 %        N/M             (31.5 )%              17.3 %        N/M
EBITDAre and Adjusted
EBITDAre (1)                $       (190 )      $    460          N/M      $        (26 )       $        867          N/M
Diluted earnings (loss)
per common share                   (0.50 )          0.39          N/M             (0.50 )               0.64          N/M
NAREIT FFO and Adjusted
FFO per diluted share (1)          (0.26 )          0.53          N/M             (0.03 )               1.01          N/M


All Owned Hotel Data (2):
                               Quarter ended June 30,                         Year-to-date ended June 30,
                                2020              2019        Change           2020                 2019          Change
All owned hotel revenues
(pro forma) (1)             $        103        $  1,398        (92.6 )%   $      1,155         $      2,712        (57.4 )%
All owned hotel EBITDA
(pro forma) (1)                     (160 )           446          N/M                18                  846        (97.9 )%
All owned hotel EBITDA
margin (pro forma) (1)            (155.3 )%         31.9 %        N/M               1.6 %               31.2 %     (2,960 bps)
Change in all owned hotel
Total RevPAR - Constant
US$                                (92.9 )%                                       (57.9 )%
Change in all owned hotel
RevPAR - Constant US$              (93.0 )%                                       (59.2 )%
Change in all owned hotel
RevPAR - Nominal US$               (93.0 )%                                       (59.3 )%
Change in domestic RevPAR          (93.0 )%                                       (59.2 )%
Change in international
RevPAR - Constant US$              (95.0 )%                                       (58.8 )%
___________



(1) EBITDAre, Adjusted EBITDAre, NAREIT FFO per diluted share and Adjusted FFO

per diluted share and all owned hotel operating results (including hotel

revenues and hotel EBITDA and margins) are non-GAAP financial measures within

the meaning of the rules of the SEC. See "Non-GAAP Financial Measures" for

more information on these measures, including why we believe these

supplemental measures are useful, reconciliations to the most directly

comparable GAAP measure, and the limitations on the use of these supplemental

measures.

(2) Due to the COVID-19 pandemic and its effects on operations, we are presenting

hotel operating results on an All Hotel pro forma basis. Thus, operating

results are presented for all consolidated properties owned as of June 30,

2020 and do not include the results of operations for properties sold in

2019. Additionally, operating results for acquisitions in the current and

prior year are reflected for full calendar years, to include results for


    periods prior to our ownership.




N/M=Not meaningful

                                       25

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Operations



The following presents the monthly 2020 hotel operating results for the full
portfolio and for the hotels without suspended operations during the periods
presented:

                                        Total Portfolio                        Open Hotels (1)
                                April         May          June        April         May          June
Number of hotels                     80           80           80           45           45           47
Number of rooms                  46,669       46,670       46,670       26,379       26,379       27,280

Average Occupancy Percentage        6.9 %        8.8 %      10.7%         12.1 %       15.3 %      16.3%
Average Room Rate              $ 128.54     $ 150.16     $ 193.67     $ 134.01     $ 146.09     $ 182.26
RevPAR                         $   8.92     $  13.29     $  20.77     $  16.16     $  22.37     $  29.71
___________

(1) Excludes the 35, 35, and 33 hotels with partial or fully suspended operations

in the months of April, May, and June, respectively.




Total revenues declined $1,380 million, or 93.1%, for the second quarter and
$1,718 million, or 59.8%, year-to-date due to the suspended operations, as
travel restrictions in most states began in mid-March of 2020 and we experienced
a sharp decline in group, business and leisure travel resulting from these
restrictions, and the postponement or cancellation of conventions and
conferences, music and arts festivals, sporting events and other large public
gatherings, which typically are drivers of demand at our hotels. All owned hotel
RevPAR and Total RevPAR on a constant US$ basis for the quarter declined 93.0%
and 92.9%, respectively, as occupancy and food and beverage revenues experienced
significant declines. Year-to-date, all owned hotel RevPAR and Total RevPAR
declined 59.2% and 57.9%, respectively, as positive results in January and
February were offset by significant declines during the subsequent months.

All owned hotel Total RevPAR in our Jacksonville and Florida Gulf Coast markets
declined the least during the quarter, with decreases of 70.9% and 81.5%,
respectively, due to short-term leisure demand and limited group business. Our
hotels in San Francisco/San Jose and New York, our two largest markets by room
count, experienced declines in all owned hotel Total RevPAR of 95.4% and 88.6%,
respectively, as three of our seven San Francisco/San Jose hotels and one of our
three New York hotels suspended operations. The largest all owned hotel Total
RevPAR declines occurred in our Boston, New Orleans and Maui/Oahu markets, as
the Hyatt Place Waikiki was our only hotel in these markets that remained open
during the quarter.

As a result of the travel restrictions beginning mid-March 2020:

• net income (loss) decreased $646 million for the second quarter and

$838 million year-to-date;

• diluted earnings (loss) per share for the quarter decreased $0.89 for

the second quarter and $1.14 year-to-date;

• Adjusted EBITDAre decreased $650 million for the quarter and $893

million year-to-date; and

• Adjusted FFO per diluted share decreased $0.79 for the second quarter


          and $1.04 year-to-date.


Outlook

The impact of the COVID-19 pandemic has resulted in significant downward
revisions to macroeconomic and industry expectations for
2020. Government-imposed stay-at-home orders across the U.S. resulted in
unprecedented job losses and a severe decline in economic activity. While an
employment recovery began in May as many states moved into the initial phases of
reopening, a resurgence in positive cases in recent weeks has caused several
markets to roll back plans, which likely will slow the pace of recovery in the
near term. Based on Blue Chip Economic Indicators, the consensus currently
anticipates a 5.5% decline in real U.S. GDP this year, which would result in the
sharpest contraction since World War II. Business investment is anticipated to
fall by 9.5%. While analysts believe the unemployment rate may have peaked in
April, it is anticipated to remain elevated throughout the year, with an
expected average of 9.4%. The range of potential outcomes on the economy and the
lodging industry specifically is exceptionally wide, reflecting both the
unprecedented nature of the crisis and varying analyst assumptions surrounding
the trajectory of infection rates, and the timing and efficacy of medical
solutions, including the development of a vaccine.

The Blue Chip Economic Indicators consensus also estimates that the second
quarter saw a sharp contraction in real GDP, falling 33.6% on a
quarter-over-quarter, seasonally adjusted basis, and that the second half of the
year is expected to see the beginning of an economic recovery. Hotel supply
growth is anticipated to be muted in the coming months as construction shutdowns
halted progress in six states for several weeks, while social distancing
measures and supply chain challenges have resulted in significant project delays
across the rest of the U.S. In addition, a large percentage of U.S. hotels have
closed temporarily, and we anticipate that

                                       26

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the number of permanent hotel closures will be higher than historical averages.
However, significant declines in industry demand resulting from reduced economic
activity will more than offset the effect of lower supply growth, resulting in
unprecedented occupancy and RevPAR declines. We anticipate that luxury and upper
upscale hotels in top markets, which are the markets where a majority of our
hotels are located, will be most heavily affected by the current crisis, due in
part to the sharp decline in air travel, particularly from international
arrivals, and the slower anticipated recovery of corporate and group demand. At
the same time, we believe that as the crisis wanes, our resort hotels will
perform better than urban locations, although still at levels far below those
before the COVID-19 pandemic.

As a result of the significant uncertainties for broader macroeconomic trends in
the second half of the year, and more widespread implementation of social
distancing measures, we anticipate that the industry outlook will continue to be
weighed down by the slow return of corporate and group travel, as businesses
likely will remain cautious. In addition, consumer confidence and leisure demand
will continue to be affected by a weakened labor market, the recent resurgence
in positive cases in multiple markets, including the sunbelt states, and reduced
wealth and spending power. Given the unprecedented and unpredictable nature of
the pandemic and its effect on our industry, we are not able to provide a
full-year forecast for RevPAR, net income or EBITDA at this time. We believe
that recovery within the lodging industry is highly dependent on the development
of a vaccine or strong therapeutic.

Strategic Initiatives



Balance Sheet. In June 2020, we amended the credit agreement governing our $1.5
billion revolving credit facility and two $500 million term loans. Under the
amendment, the quarterly-tested financial covenants were waived beginning July
1, 2020 until the required financial statement reporting date for the third
quarter of 2021, while maintaining the ability to make acquisitions and raise
capital, subject to certain restrictions.

In June 2020, we repaid $750 million under the revolver portion of our credit
facility. As of June 30, 2020, we had $1.6 billion of cash and cash equivalents
and $750 million of available capacity under the revolver portion of our credit
facility. We may in the future re-draw amounts under the revolver portion of our
credit facility to bolster our liquidity position.

Dispositions. During the quarter, we sold a parcel of land adjacent to The Phoenician hotel for approximately $17 million. In connection with the sale, we received as consideration a note receivable for $9 million that matures in January 2021.



Capital Projects. We have prioritized major capital projects for those assets
and markets which are expected to recover faster, such as leisure and drive-to
destinations, as well as previously announced major return on investment
projects. We are utilizing the low occupancy environment to accelerate certain
projects and minimize future disruption.

During the first half of 2020, we spent approximately $206 million on ROI
capital projects and $94 million on renewal and replacement projects,
representing almost 60% of the total capital expenditure projects planned for
the year. We expect total spend in the second half of the year to be
approximately $100 million lower than the first half. For full year 2020, we
expect total capital expenditures of $475 million to $520 million. This total
amount consists of ROI projects of approximately $325 million to $345 million
and renewal and replacement expenditures of $150 million to $175 million. ROI
projects include approximately $195 million to $200 million for the Marriott
transformational capital program discussed below.

We have made substantial progress on the four-year Marriott transformational
capital program, which includes 17 of our properties and began in 2018. We
believe this program will position these hotels to be more competitive in their
respective markets and will enhance long-term performance through increases in
RevPAR and market yield index. We agreed to invest amounts in excess of the FF&E
reserves required under our management agreements and in exchange, Marriott has
provided additional priority returns on the agreed upon investments and
operating profit guarantees of up to $84 million, before reductions for
incentive management fees, to offset expected business disruption. On average,
we expect to spend approximately $175 million per year. Nearly 60% of the total
estimated costs of the transformational capital program have been spent as of
June 30, 2020. Of the 17 properties included in the program, we have completed
projects at the Coronado Island Marriott Resort & Spa, New York Marriott
Downtown, San Francisco Marriott Marquis, Santa Clara Marriott, Minneapolis
Marriott City Center and San Antonio Marriott Rivercenter as of June 30, 2020.
We also expect to complete the JW Marriott Atlanta Buckhead renovation by the
end of 2020.



                                       27

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Results of Operations

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



                              Quarter ended June 30,                        

Year-to-date ended June 30,


                              2020              2019          Change           2020                2019           Change
Total revenues             $      103       $      1,483        (93.1 )%   $       1,155       $       2,873        (59.8 )%
Operating costs and
expenses:
Property-level costs (1)          431              1,178        (63.4 )            1,469               2,323        (36.8 )
Corporate and other
expenses                           25                 25            -                 50                  54         (7.4 )
Operating profit (loss)          (353 )              280          N/M               (364 )               496          N/M
Interest expense                   40                 43         (7.0 )               77                  86        (10.5 )
Other gains/(losses)               13                 57        (77.2 )               12                  62        (80.6 )
Benefit (provision) for
income taxes                       46                (16 )        N/M                 83                 (18 )        N/M

Host Inc.:
Net income (loss)
attributable to
non-controlling
interests                          (4 )                4          N/M                 (4 )                 7          N/M
Net income (loss)
attributable to Host
Inc.                             (352 )              286          N/M               (355 )               472          N/M

Host L.P.:
Net income (loss)
attributable to non-
   controlling interests           (1 )                1          N/M                 (1 )                 2          N/M
Net income (loss)
attributable to Host
L.P.                             (355 )              289          N/M               (358 )               477          N/M
___________

(1) Amount represents total operating costs and expenses from our unaudited

condensed consolidated statements of operations, less corporate and other


    expenses.


N/M=Not meaningful.

Statement of Operations Results and Trends



The COVID-19 pandemic has resulted in a significant decline in operations in the
first half of 2020. RevPAR has increased slightly each month during the second
quarter, from a low of $8.92 in April to $20.77 in June. By comparison, RevPAR
was $204.15 for the second quarter of 2019. There can be no assurances that
increases in RevPAR will continue, particularly because of the possibility that
summer leisure travel will not be replaced by an increase in business travel in
the fall.

Hotel Sales Overview

The following table presents total revenues in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):





                        Quarter ended June 30,                           

Year-to-date ended June 30,


                       2020              2019           Change            2020                2019           Change
Revenues:
Rooms               $       61       $         931         (93.4 )%   $         687       $       1,788         (61.6 )%

Food and beverage           11                 449         (97.6 )              341                 882         (61.3 )
Other                       31                 103         (69.9 )              127                 203         (37.4 )
Total revenues      $      103       $       1,483         (93.1 )    $    

1,155 $ 2,873 (59.8 )

The significant decline in revenues was due predominately to the impact of the COVID-19 pandemic, as follows:

Rooms. Total rooms revenues decreased $870 million, or 93.4%, and $1,101 million, or 61.6%, for the quarter and year-to-date, respectively.

Food and beverage. Total food and beverage ("F&B") revenues decreased $438 million, or 97.6%, and $541 million, or 61.3%, for the quarter and year-to-date, respectively.


                                       28

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Other revenues. Total other revenues decreased $72 million, or 69.9%, for the
quarter and $76 million, or 37.4%, year-to-date, Attrition and cancellation
revenues decreased $2 million for the quarter and increased $7 million
year-to-date, as a significant portion of cancellations occurred during the
first quarter. We do not expect to recognize any further significant attrition
and cancellation revenues related to the pandemic for the remainder of the year,
as we continue to prioritize the rebooking of group business.

Property-level Operating Expenses

The following table presents property-level operating expenses in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):





                             Quarter ended June 30,                           Year-to-date ended June 30,
                            2020              2019           Change            2020                2019           Change
Expenses:
Rooms                    $       43       $         226         (81.0 )%   

$ 230 $ 443 (48.1 )% Food and beverage

                39                 290         (86.6 )              284                 575         (50.6 )

Other departmental and


   support expenses             113                 334         (66.2 )              432                 661         (34.6 )
Management fees                  (2 )                71            NM                 28                 125         (77.6 )

Other property-level


   expenses                      70                  91         (23.1 )              163                 183         (10.9 )
Depreciation and
   amortization                 168                 166           1.2                332                 336          (1.2 )

Total property-level

operating expenses $ 431 $ 1,178 (63.4 ) $ 1,469 $ 2,323 (36.8 )




Our operating costs and expenses, which have both fixed and variable components,
are affected by changes in occupancy, inflation, and revenues (which affect
management fees), though the effect on specific costs and expenses will differ.
Our wages and benefits expenses account for approximately 61% of the operating
expenses at our hotels (excluding depreciation). Due to a significant decline in
operations and implementation of portfolio-wide cost reductions in response to
the COVID-19 pandemic, we reduced wages and benefits expense by over 70% during
the second quarter compared to the prior year. Other property-level expenses
consist of property taxes, the amounts and structure of which are highly
dependent on local jurisdiction taxing authorities, and property and general
liability insurance, all of which do not necessarily increase or decrease based
on similar changes in revenues at our hotels.

The decline in expenses for rooms, food and beverage, other departmental and
support, and management fees predominately are due to the impact of the COVID-19
pandemic, as follows:

Rooms. Rooms expenses declined $183 million, or 81.0%, for the second quarter and $213 million, or 48.1%, year-to-date.

Food and beverage. F&B expenses decreased $251 million, or 86.6%, for the quarter and $291 million, or 50.6%, year-to-date.



Other departmental and support expenses. Other departmental and support expenses
decreased $221 million, or 66.2%, for the second quarter and $229 million, or
34.6%, year-to-date.

Management fees. Base management fees, which generally are calculated as a
percentage of total revenues, decreased $42 million, or 93.4%, for the second
quarter and $53 million, or 61.7%, year-to-date. Incentive management fees,
which generally are based on the amount of operating profit at each hotel after
we receive a priority return on our investment, decreased $31 million, or
116.1%, for the quarter and $52 million, or 107.8%, year-to-date.

Other property-level expenses. These expenses generally do not vary
significantly based on occupancy and include expenses such as property taxes and
insurance. Other property level expenses decreased $21 million, or 23.1%, for
the quarter and $20 million, or 10.9%, year-to-date. The expenses were partially
offset by operating profit guarantees received from Marriott under the
transformational capital program.

                                       29

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Other Income and Expense

Corporate and other expenses. The following table details our corporate and other expenses for the quarter and year-to-date (in millions):



                                                Quarter ended June 30,      

Year-to-date ended June 30,


                                               2020                2019             2020                   2019
General and administrative costs            $        21         $        22     $         43           $         47
Non-cash stock-based compensation expense             4                   3                7                      7
    Total                                   $        25         $        25     $         50           $         54


Interest expense. Interest expense decreased for the quarter and year-to-date
due to the refinancing of senior notes in 2019. The following table details our
interest expense for the quarter and year-to-date (in millions):



                                            Quarter ended June 30,                Year-to-date ended June 30,
                                           2020                 2019             2020                    2019
Cash interest expense(1)               $         38         $         42     $          73           $          83
Non-cash interest expense                         1                    1                 3                       3
Cash debt extinguishment costs(1)                 1                    -                 1                       -
Total interest expense                 $         40         $         43     $          77           $          86
___________

(1) Including the change in accrued interest, total cash interest paid was

$73 million and $82 million for year-to-date 2020 and 2019, respectively.




Other gains/(losses). During the second quarter of 2020, we recognized a gain of
approximately $12 million related to the sale of a parcel of land adjacent to
The Phoenician hotel. In the second quarter of 2019 we recognized a gain of $57
million related to the sale of three hotels, while the year-to-date 2019 gain of
$62 million also included the sale of one hotel in the first quarter.

Equity in earnings (losses) of affiliates. During the second quarter of 2020,
our Maui timeshare joint venture recorded a $21 million impairment expense, of
which our share was $14 million, on its inventory of timeshare units.

Benefit (provision) for income taxes. We lease substantially all our properties
to consolidated subsidiaries designated as taxable REIT subsidiaries ("TRS") for
federal income tax purposes. The difference between hotel-level operating cash
flow and the aggregate rent expense paid or accrued to Host L.P. by the TRS
represents its taxable income or loss, with regard to which we record an income
tax provision or benefit. For the quarter and year-to-date, we recorded an
income tax benefit of $46 million and $83 million, respectively, due to the net
operating loss incurred by our TRS. As a result of legislation enacted by the
CARES Act, such net operating loss may be carried back up to five years in order
to procure a refund of federal corporate income taxes previously paid. Any net
operating loss incurred by our TRS not carried back may be carried forward
indefinitely.

Hotel RevPAR Overview



To facilitate a quarter-to-quarter comparison of our operations, we typically
present certain operating statistics for the periods included in this
presentation on a comparable hotel basis. However, due to the COVID-19 pandemic
and its effects on operations, there is little comparability between periods.
For this reason, we are revising our presentation to instead present pro forma
hotel operating results for all hotels. See "Hotel Operating Statistics" for a
complete description of our methodology. We also discuss our Hotel RevPAR
results by geographic location and mix of business (i.e., transient, group, or
contract).





                                       30

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Hotel Operating Data by Location

The following tables set forth performance information for our hotels by geographic location as of June 30, 2020 and 2019, respectively:


            All Owned Hotels (pro forma) by Location in Constant US$

                             As of June 30, 2020                            Quarter ended June 30, 2020                                     Quarter ended June 30, 2019
                                                                              Average                                                         Average                                         Percent           Percent
                          No. of             No. of           Average        Occupancy                                        Average        Occupancy                                       Change in         Change in
Location                Properties            Rooms          Room Rate      Percentage       RevPAR       Total RevPAR       Room Rate      Percentage 

RevPAR Total RevPAR RevPAR Total RevPAR Florida Gulf Coast

                5               1,842     $    278.24            17.7 %   $  49.11     $        87.12     $    313.53            73.9 %   $ 231.56     $       471.22           (78.8 )%           (81.5 )%
Maui/Oahu                         4               1,983           75.47             3.7         2.77               5.82          384.31            92.3       354.62             563.56           (99.2 )            (99.0 )
Jacksonville                      1                 446          469.00            28.1       131.95             219.50          414.11            84.1       348.40             753.61           (62.1 )            (70.9 )
Miami                             3               1,276          276.13             8.3        22.86              39.35          299.54            80.6       241.56             390.25           (90.5 )            (89.9 )
Phoenix                           3               1,654          185.02             6.8        12.58              53.48          277.88            74.6       207.40             488.38           (93.9 )            (89.0 )
San Francisco/San Jose            7               4,528          175.74             4.2         7.43              14.51          267.87            82.7       221.55             313.95           (96.6 )            (95.4 )
Los Angeles                       4               1,726          207.67             9.9        20.48              28.05          228.49            89.1       203.54             300.39           (89.9 )            (90.7 )
New York                          3               4,261          134.19            30.2        40.47              43.18          292.59            84.9       248.42             378.93           (83.7 )            (88.6 )
San Diego                         3               3,288          181.47             2.5         4.57              17.07          257.34            83.0       213.66             394.65           (97.9 )            (95.7 )
Atlanta                           4               1,682          138.09             9.6        13.23              18.55          188.81            76.7       144.87             232.21           (90.9 )            (92.0 )
Washington, D.C. (CBD)            5               3,238          221.94             4.6        10.14              10.76          278.76            91.5       255.04             367.23           (96.0 )            (97.1 )
New Orleans                       1               1,333             N/M             0.0         0.29               1.94          196.98            81.0       159.65             233.90           (99.8 )            (99.2 )
Orange County                     2                 925          163.08             7.4        12.01              18.18          189.11            79.5       150.28             251.79           (92.0 )            (92.8 )
Orlando                           1               2,004             N/M             0.1         0.05              17.24          177.39            70.7       125.33             295.11          (100.0 )            (94.2 )
Houston                           4               1,716          112.05            13.9        15.63              20.43          181.69            74.6       135.49             193.31           (88.5 )            (89.4 )
Philadelphia                      2                 810          120.32            10.6        12.75              15.74          247.35            89.7       221.94             366.74           (94.3 )            (95.7 )
Northern Virginia                 3               1,252          129.21             7.9        10.20              15.45          214.09            77.9       166.82             280.83           (93.9 )            (94.5 )
Seattle                           2               1,315          196.68             1.1         2.26               5.68          234.35            85.1       199.47             271.52           (98.9 )            (97.9 )
Boston                            3               2,715             N/M             0.2         0.28               2.05          272.01            87.8       238.87             324.76           (99.9 )            (99.4 )
Denver                            3               1,340          112.47             7.9         8.87              10.96          176.07            79.4       139.88             210.69           (93.7 )            (94.8 )
San Antonio                       2               1,512          123.02             5.4         6.59               9.36          186.37            75.1       139.94             200.21           (95.3 )            (95.3 )
Chicago                           4               1,816          110.04             9.8        10.82              13.03          237.05            82.5       195.46             278.10           (94.5 )            (95.3 )
Other                             6               2,509          109.28            13.5        14.77              18.40          175.50            83.0       145.69             207.76           (89.9 )            (91.1 )
Domestic                         75              45,171          165.18             8.9        14.62              23.52          252.03            82.4       207.60             332.73           (93.0 )            (92.9 )

International                     5               1,499           59.79             8.4         5.02              12.44          143.72            69.7       100.16             154.14           (95.0 )            (91.9 )
All Locations -
Constant US$                     80              46,670          161.97             8.8        14.31              23.16          249.07            82.0       204.15             327.00           (93.0 )            (92.9 )

                                                                                       All Owned Hotels (pro forma) in Nominal US$
                             As of June 30, 2020                            Quarter ended June 30, 2020                                     Quarter ended June 30, 2019
                                                                              Average                                                         Average                                         Percent           Percent
                          No. of             No. of           Average        Occupancy                                        Average        Occupancy                                       Change in         Change in
                        Properties            Rooms          Room Rate      Percentage       RevPAR       Total RevPAR       Room Rate      Percentage 

RevPAR Total RevPAR RevPAR Total RevPAR International

                     5               1,499     $     59.79             8.4 %   $   5.02     $        12.44     $    158.97            69.7 %   $ 110.79     $       169.04           (95.5 )%           (92.6 )%
Domestic                         75              45,171          165.18             8.9        14.62              23.52          252.03            82.4       207.60             332.73           (93.0 )            (92.9 )
All Locations                    80              46,670          161.97             8.8        14.31              23.16          249.49            82.0       204.49             327.47           (93.0 )            (92.9 )





                                       31

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            All Owned Hotels (pro forma) by Location in Constant US$

                             As of June 30, 2020                         Year-to-date ended June 30, 2020

Year-to-date ended June 30, 2019


                                                                              Average                                                         Average                                         Percent           Percent
                          No. of             No. of           Average        Occupancy                                        Average        Occupancy                                       Change in         Change in
Location                Properties            Rooms          Room Rate      Percentage       RevPAR       Total RevPAR       Room Rate      Percentage 

RevPAR Total RevPAR RevPAR Total RevPAR Florida Gulf Coast

                5               1,842     $    400.35            44.2 %   $ 177.03     $       353.01     $    379.76            78.4 %   $ 297.90     $       586.44           (40.6 )%           (39.8 )%
Maui/Oahu                         4               1,983          451.32            39.1       176.41             259.64          410.35            90.6       371.89             573.91           (52.6 )            (54.8 )
Jacksonville                      1                 446          398.29            42.6       169.62             342.83          391.86            81.4       318.88             722.04           (46.8 )            (52.5 )
Miami                             3               1,276          425.83            39.6       168.56             268.97          355.53            83.2       295.96             455.82           (43.0 )            (41.0 )
Phoenix                           3               1,654          352.56            37.0       130.34             303.21          327.86            78.6       257.82             566.03           (49.4 )            (46.4 )
San Francisco/San Jose            7               4,528          287.40            31.8        91.26             134.44          286.10            80.0       228.99             322.35           (60.1 )            (58.3 )
Los Angeles                       4               1,726          215.97            39.3        84.80             124.95          226.22            87.8       198.59             294.83           (57.3 )            (57.6 )
New York                          3               4,261          190.39            43.1        82.11             120.16          266.94            78.5       209.56             323.62           (60.8 )            (62.9 )
San Diego                         3               3,288          241.83            31.8        77.01             154.12          255.23            80.0       204.18             372.23           (62.3 )            (58.6 )
Atlanta                           4               1,682          185.37            36.3        67.36             107.33          208.09            76.7       159.65             252.43           (57.8 )            (57.5 )
Washington, D.C. (CBD)            5               3,238          229.66            29.3        67.21              97.24          265.11            82.5       218.62             312.73           (69.3 )            (68.9 )
New Orleans                       1               1,333          202.76            32.6        66.19              99.87          203.37            81.3       165.38             241.84           (60.0 )            (58.7 )
Orange County                     2                 925          193.61            32.9        63.66             110.25          195.04            79.2       154.54             260.36           (58.8 )            (57.7 )
Orlando                           1               2,004          215.19            28.6        61.54             152.85          193.57            74.8       144.76             339.92           (57.5 )            (55.0 )
Houston                           4               1,716          163.52            37.6        61.51              91.53          182.15            75.2       136.92             197.16           (55.1 )            (53.6 )
Philadelphia                      2                 810          165.99            36.7        60.90              98.18          220.90            83.9       185.41             304.83           (67.2 )            (67.8 )
Northern Virginia                 3               1,252          196.57            30.3        59.55              98.07          212.31            71.8       152.53             260.36           (61.0 )            (62.3 )
Seattle                           2               1,315          193.49            27.6        53.38              77.51          215.31            81.3       174.95             237.90           (69.5 )            (67.4 )
Boston                            3               2,715          176.94            26.6        47.06              71.97          236.19            78.6       185.74             260.95           (74.7 )            (72.4 )
Denver                            3               1,340          154.85            29.0        44.89              68.03          169.71            72.1       122.41             184.62           (63.3 )            (63.2 )
San Antonio                       2               1,512          179.31            24.2        43.38              65.75          191.24            76.2       145.81             215.02           (70.3 )            (69.4 )
Chicago                           4               1,816          136.92            28.7        39.26              54.32          199.76            71.5       142.77             203.93           (72.5 )            (73.4 )
Other                             6               2,509          155.53            35.4        55.07              76.39          172.13            78.1       134.38             191.51           (59.0 )            (60.1 )
Domestic                         75              45,171          242.02            34.0        82.19             136.94          254.20            79.3       201.52             324.88           (59.2 )            (57.8 )

International                     5               1,499          127.54            30.9        39.36              59.43          139.27            68.7        95.64             143.57           (58.8 )            (58.6 )
All Locations -
Constant US$                     80              46,670          238.67            33.9        80.81             134.46          250.99            78.9       198.12             319.06           (59.2 )            (57.9 )

                                                                                       All Owned Hotels (pro forma) in Nominal US$
                             As of June 30, 2020                         Year-to-date ended June 30, 2020                                

Year-to-date ended June 30, 2019


                                                                              Average                                                         Average                                         Percent           Percent
                          No. of             No. of           Average        Occupancy                                        Average        Occupancy                                       Change in         Change in
                        Properties            Rooms          Room Rate      Percentage       RevPAR       Total RevPAR       Room Rate      Percentage       RevPAR       Total RevPAR        RevPAR         Total RevPAR
International                     5               1,499     $    127.54            30.9 %   $  39.36     $        59.43     $    151.58            68.7 %   $ 104.09     $       155.00           (62.2 )%           (61.7 )%
Domestic                         75              45,171          242.02            34.0        82.19             136.94          254.20            79.3       201.52             324.88           (59.2 )            (57.8 )
All Locations                    80              46,670          238.67            33.9        80.81             134.46          251.33            78.9       198.39             319.43           (59.3 )            (57.9 )


______

N/M = Not Meaningful

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Hotel Business Mix



The majority of our customers fall into three broad categories: transient,
group, and contract business, which accounted for approximately 61%, 35%, and
4%, respectively, of our full year 2019 room sales. The information below is
derived from business mix data for the 80 hotels owned as of June 30, 2020. For
additional detail on our business mix, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in our most recent Annual
Report on Form 10­K.

The following are the results of our consolidated portfolio transient, group and contract business:

Percent change vs. Quarter ended June 30,


                                Quarter ended June 30, 2020                                    2019
                         Room nights                  Room revenues
                        (in thousands)               (in thousands)          Room nights                Room revenues
Transient business                    198         $                  37              (90.0 )%                    (92.8 )%
Group business                        134                            18              (90.0 )                     (94.3 )
Contract business                      43                             6              (74.1 )                     (83.3 )


As of July 30, 2020, 2.7 million group room nights for the year have been
cancelled. This equates to an estimated $1.0 billion in total cancelled group
revenue, of which approximately 62% is rooms revenue. Approximately 63% of the
group room revenue lost was for the first half of the year. We believe that the
pace of group and transient business remains uncertain for the second half of
the year due to the uncertainty surrounding the pandemic, government
restrictions on travel, and companies' restrictions on business travel. The
Company expects further cancellations of group business in the second half of
the year.

Liquidity and Capital Resources



Liquidity and Capital Resources of Host Inc. and Host L.P. The liquidity and
capital resources of Host Inc. and Host L.P. are derived primarily from the
activities of Host L.P., which generates the capital required by our business
from hotel operations, the incurrence of debt, the issuance of OP units or the
sale of hotels. Host Inc. is a REIT and its only significant asset is the
ownership of partnership interests of Host L.P.; therefore, its financing and
investing activities are conducted through Host L.P., except for the issuance of
its common and preferred stock. Proceeds from stock issuances by Host Inc. are
contributed to Host L.P. in exchange for OP units. Additionally, funds used by
Host Inc. to pay dividends or to repurchase its stock are provided by Host L.P.
Therefore, while we have noted those areas in which it is important to
distinguish between Host Inc. and Host L.P., we have not included a separate
discussion of liquidity and capital resources as the discussion below applies to
both Host Inc. and Host L.P.

Overview. We look to maintain a capital structure and liquidity profile with an
appropriate balance of cash, debt, and equity in order to provide financial
flexibility given the inherent volatility of the lodging industry. This strategy
has resulted in a lower overall cost of capital for us, allowing us to complete
opportunistic investments and acquisitions and positions us to manage potential
declines in operations throughout the lodging cycle. Over the past several years
leading up to the COVID-19 pandemic, we had decreased our leverage as measured
by our net debt-to-EBITDA ratio and reduced our debt service obligations,
leading to an increase in our fixed charge coverage ratio. As the magnitude of
the financial impact of the COVID-19 pandemic is uncertain, we believe these
actions will provide us with financial flexibility until economic restrictions
related to the pandemic are lifted and lodging demand begins to recover.

Under the current challenging operating environment posed by the COVID-19
pandemic and the slowdown in U.S. economic activity and lodging demand, we have
taken steps to preserve liquidity by reducing expected capital expenditures,
suspending dividends and stock repurchases and have worked with our hotel
operators to reduce hotel operating expenses. We intend to use available cash in
the near term predominantly to fund negative operations at our hotels and
corporate expenses.

Despite the challenges caused by the current COVID-19 pandemic and economic
crisis, we believe we have sufficient liquidity and access to capital markets to
withstand the current decline in operating cash flow and to fund our capital
expenditures programs. We may continue to access capital markets if favorable
conditions exist in order to enhance our liquidity, to refinance senior notes
and to fund cash needs. We also may execute acquisitions or other investment
opportunities generated by the COVID-19 crises.

Cash Requirements. We use cash for acquisitions, capital expenditures, debt
payments, operating costs, and corporate and other expenses, as well as for
dividends and distributions to stockholders and OP unitholders and stock and OP
unit repurchases. As a REIT, Host Inc. is required to distribute to its
stockholders at least 90% of its taxable income, excluding net capital gain, on
an annual basis. On April 15, 2020, we paid a dividend of $0.20 per share on
Host Inc.'s common stock, which dividend totaled approximately $141 million.
This was the last dividend paid prior to the suspension of future dividends as
part of our COVID-19 response.

Capital Resources. As of June 30, 2020, we had $1,578 million of cash and cash
equivalents, $154 million in our FF&E escrow reserve and $750 million of
available capacity under the revolver portion of our credit facility. We have no
material debt maturities

                                       33

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until 2023. We depend primarily on external sources of capital to finance
growth, including acquisitions. As a result, the liquidity and debt capacity
provided by our credit facility and the ability to issue senior unsecured debt
are key components of our capital structure. Our financial flexibility,
including our ability to incur debt, to make distributions and to make
investments, is contingent on our ability to maintain compliance with the
financial covenants of such indebtedness, which include, among other things, the
allowable amounts of leverage, interest coverage and fixed charges. Following
the amendment of our credit facility agreement, the quarterly-tested financial
covenants were waived beginning July 1, 2020 until the required financial
statement reporting date for the third quarter of 2021.

If, at any time, we determine that market conditions are favorable, after
considering our liquidity requirements, we may cause Host L.P. to issue senior
notes or debentures exchangeable for shares of Host Inc. common stock. Given the
total amount of our debt and our maturity schedule, we will continue to redeem
or refinance senior notes from time to time, taking advantage of favorable
market conditions. In July 2019, Host Inc.'s Board of Directors authorized
repurchases of up to $1.0 billion of senior notes other than in accordance with
their respective terms, of which the entire amount remains available under this
authority. We may purchase senior notes for cash through open market purchases,
privately negotiated transactions, a tender offer, or through the early
redemption of such securities pursuant to their terms. Repurchases of debt will
depend on prevailing market conditions, our liquidity requirements, contractual
restrictions and other factors. Any refinancing or retirement before the
maturity date will affect earnings and NAREIT FFO per diluted share as a result
of the payment of any applicable call premiums and the accelerated expensing of
previously deferred and capitalized financing costs. In addition, while we
intend to use any available cash predominantly for acquisitions or other
investments in our hotel portfolio, to the extent that we do not identify
appropriate investments, we may elect in the future to use available cash for
other purposes, including share repurchases, subject to market conditions and
the restrictions under the credit facility amendment. Accordingly, considering
our priorities in managing our capital structure and liquidity profile and given
prevailing conditions and relative pricing in the capital markets, we may, at
any time, subject to applicable securities laws, be considering, or be in
discussions with respect to, the repurchase or issuance of exchangeable
debentures and/or senior notes or the repurchase or sale of common stock. Any
such transactions may, subject to applicable securities laws, occur
simultaneously.

While we currently have $371 million available under our share repurchase
program, additional repurchases are currently restricted under the credit
facility amendment. There were no share repurchases during the second quarter of
2020 and we do not anticipate additional repurchases in 2020 or 2021 through the
Covenant Relief Period (as defined below).

Sources and Uses of Cash. Our sources of cash generally include cash from
operations, proceeds from debt and equity issuances, and proceeds from hotel
sales. Uses of cash include acquisitions, capital expenditures, operating costs,
debt repayments, and repurchases of shares and distributions to equity holders.

Cash Provided by Operations. In the first half of 2020, net cash used in operations was $15 million compared to cash provided of $624 million for the first half of 2019. Cash used in operations during the first half of 2020 primarily was due to the decline in operations at our properties due to the COVID-19 pandemic and funding to our properties for continued operations.



Cash Used in Investing Activities. Net cash used in investing activities was
$264 million during the first half of 2020 compared to $460 million for the
first half of 2019. Cash used in investing activities during the first half of
2020 primarily was due to $300 million of capital expenditures for the first
half of 2020 compared to $240 million in the first half of 2019, while 2019 also
included the acquisition of one hotel. Cash provided by investing activities in
the first half of 2020 included the sale of land adjacent to The Phoenician and
$28 million of proceeds from the repayment of a loan receivable associated with
the sale of a property in 2019, while the first half of 2019 consisted of
proceeds from the disposition of four hotels.

Cash Provided by/Used in Financing Activities. In the first half of 2020, net
cash provided by financing activities was $268 million compared to cash used of
$611 million for the first half of 2019. Cash provided by financing activities
in the first half of 2020 consisted of a net $750 million draw on the credit
facility. Cash used in the first half of 2020 and 2019 primarily consisted of
stock repurchases, dividend payments and distributions.

The following table summarizes significant debt issuances, net of deferred financing costs, that were completed as of July 29, 2020 (in millions):





Transaction Date                   Description of Transaction              Net Proceeds
Debt Issuances
March - June     2020   Net draw on the revolver portion of the credit
                        facility                                           $         750
                        Total issuances                                    $         750


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The following table summarizes significant debt repayments, including prepayment premiums, that were completed as of July 29, 2020 (in millions):





                                                                             Transaction
Transaction Date                   Description of Transaction                  Amount
Debt Repayments
July             2020   Redemption of preferred equity units of Host LP     $         (22 )
                        Total cash repayments                               $         (22 )



The following table summarizes significant equity transactions that have been completed through July 29, 2020 (in millions):





                                                                         Transaction
 Transaction
    Date                        Description of Transaction                 Amount
Equity of
Host Inc.
January -     2020
April                Dividend payments (1)(2)                           $        (320 )
January -     2020   Repurchase of 8.9 million shares of Host Inc.
March                common stock                                                (147 )
                     Cash payments on equity transactions               $        (467 )
___________

(1) In connection with the dividend payments, Host L.P. made distributions of

$323 million to its common OP unit holders.

(2) Includes the fourth quarter 2019 dividend that was paid in January 2020.






Debt

As of June 30, 2020, our total debt was $4.5 billion, with a weighted average interest rate of 3.0% and a weighted average maturity of 4.7 years. Additionally, 62% of our debt has a fixed rate of interest and none of our consolidated hotels are encumbered by mortgage debt.



On June 26, 2020, we entered into an amendment (the "Amendment") to the existing
senior unsecured bank credit facility with Bank of America, N.A., as
administrative agent. The Amendment suspends requirements to comply with all
existing financial maintenance covenants under the credit facility for the
period beginning July 1, 2020 until the required financial statement reporting
date for the third quarter of 2021 (such period, the "Covenant Relief Period").
The existing financial maintenance covenants are reinstated for the quarter
ending September 30, 2021, except that after the reinstatement instead of using
the prior four calendar quarter's results in the calculations, only results for
the second quarter of 2021 and thereafter are used during a phase in period and
the maximum permitted ratio of consolidated total debt to consolidated EBITDA
(the "Leverage Ratio") for the initial three quarters after reinstatement is
increased from 7.25:1.00 to 8.25:1.00 for the first quarter, 8.00:1.00 for the
second quarter and 7.75:1.00 for the third quarter. The Amendment permits us to
terminate the Covenant Relief Period at any time, subject to demonstrating
satisfaction of the financial maintenance covenants that otherwise would apply
for the quarter ending September 30, 2021. The Amendment also provides for,
among other things:

• an increase in the interest rate applicable to outstanding borrowings during

the Covenant Relief Period, with the rate being increased by 40 basis points

to the applicable rate across the credit rating-based pricing grid

determined according to our unsecured long-term debt rating; the interest

rate based on the current unsecured long-term debt rating increases to LIBOR

plus 130 basis points and LIBOR plus 140 basis points for the revolver and

term facilities, respectively;

• the addition of a permanent LIBOR floor of 15 basis points applicable to

borrowings under the revolver and the term facilities;

• the addition of a minimum liquidity covenant, which requires a minimum

liquidity level of $300,000,000 at the end of each calendar month until the

end of the Covenant Relief Period (subject to potential increase in the case

of any future acquisitions of hotels with negative cash flow);

• during the Covenant Relief Period, additional limitations on acquisitions

which provide that we may make acquisitions including (i) property exchange

transactions governed by Section 1031 of the Internal Revenue Code, (ii)

acquisitions of up to $7,500,000,000 funded by issuances of equity and (iii)

acquisitions of up to $1,500,000,000 funded by existing liquidity as long as

we maintain minimum total liquidity of up to $500,000,000, depending on the


      amount of the acquisition; we also may


                                       35

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assume debt in acquisitions, provided that the debt to undepreciated real

estate assets ratio shall not exceed 0.35:1.00 calculated on a pro forma

basis;

• during the Covenant Relief Period, additional limitations on the ability to

make distributions and repurchases or redemptions, with certain exceptions,

including the ability to make distributions sufficient to allow for the

payment of a quarterly cash dividend by Host Inc. of $0.01 per share or

higher distribution amounts to the extent necessary to allow Host Inc. to

maintain REIT status or to avoid corporate income or excise taxes;

• during the Covenant Relief Period, additional limitations on debt incurrence

such that we can incur indebtedness only if the incurrence is permitted


      under our senior notes indenture;


   •  limitations on the ability to make stock repurchases or redemptions
      following the Covenant Relief Period if the Leverage Ratio exceeds
      7.25:1.00, subject to certain exceptions;

• limitations on the ability to make capital expenditures from the period

beginning on the effective date and ending on June 30, 2021 (or any earlier

date on which the Covenant Relief Period is terminated); during this period

we can fund all emergency, life safety and ordinary course maintenance

capital expenditures plus $500,000,000 in other capital expenditures such as

return on investment capital expenditures; and




   •  a requirement during the Covenant Relief Period to apply the net cash
      proceeds in excess of $350,000,000 in the aggregate from asset sales and
      debt issuances (but not equity issuances) as a mandatory prepayment of

amounts outstanding under the credit facility; the mandatory prepayment

requirements for asset sales and debt issuances are subject to various

exceptions, including, among other things, (1) the net cash proceeds of

asset sales in an amount of up to $750,000,000 that are used in a property

exchange transaction governed by Section 1031 of the Internal Revenue Code,

(2) the net cash proceeds of debt issuances constituting refinancing

indebtedness, (3) certain indebtedness assumed in acquisitions and (4) other

indebtedness up to $10,000,000.




In connection with the Amendment, we paid a consent fee of 7.5 basis points on
the amount of each consenting lender's commitments under the revolver and term
facilities.

Financial Covenants

Credit Facility Covenants. Our credit facility contains certain important
financial covenants concerning allowable leverage, unsecured interest coverage,
and required fixed charge coverage. Total debt used in the calculation of our
Leverage Ratio is based on a "net debt" concept, under which cash and cash
equivalents in excess of $100 million are deducted from our total debt balance
for purposes of measuring compliance. To the extent that no amounts are
outstanding under the credit facility, breaching these covenants is not an event
of default thereunder.

We are in compliance with all of our financial covenants under the credit facility. The following table summarizes the results of the financial tests required by the credit facility as of June 30, 2020, which is the last quarter prior to suspension of the covenants under the Amendment:





                                                           Covenant Requirement
                                        Actual Ratio          for all years
Leverage ratio                                    4.6 x   Maximum ratio of 7.25x
Fixed charge coverage ratio                       2.7 x   Minimum ratio of 1.25x
Unsecured interest coverage ratio (1)             4.4 x   Minimum ratio of 1.75x
___________



(1) If, at any time, our leverage ratio exceeds 7.0x, our minimum unsecured


    interest coverage ratio will be reduced to 1.5x.




                                       36

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Senior Notes Indenture Covenants

Covenants for Senior Notes Issued After We Attained an Investment Grade Rating



We are in compliance with all of the financial covenants applicable to our
Series D, Series E, Series F, Series G and Series H senior notes. The following
table summarizes the results of the financial tests required by the senior notes
indentures for our Series D, Series E, Series F, Series G and Series H senior
notes and our actual credit ratios as of June 30, 2020:



                                       Actual Ratio      Covenant Requirement
Unencumbered assets tests                        447 %   Minimum ratio of 150%
Total indebtedness to total assets                22 %   Maximum ratio of 

65%


Secured indebtedness to total assets               0 %   Maximum ratio of 

40%


EBITDA-to-interest coverage ratio                4.1 x   Minimum ratio of 

1.5x




We are in compliance with all of the financial ratios applicable to our Series
D, Series E, Series F, Series G and Series H senior notes as of June 30, 2020 in
order for us to be able to incur additional indebtedness. The above
EBITDA-to-interest coverage ratio as of June 30, 2020 is based on results for
the third and fourth quarters of 2019 and first and second quarters of 2020.
This ratio was 9.9x as of year-end 2019, 6.6x as of March 31, 2020 and, as noted
above, was 4.1x as of June 30, 2020. We expect this ratio to continue to decline
in 2020 as more quarters of historically poor operations caused by the COVID-19
pandemic are reflected in the calculation. We expect the ratio to fall below the
1.5x requirement as of the end of either the third or fourth quarter of 2020 and
we will not be able to incur additional debt while the ratio is below this
requirement,.

Covenants for Senior Notes Issued Before We Attained an Investment Grade Rating



The terms of our senior notes that were issued before we attained our investment
grade rating provided that many of the restrictive covenants in the senior notes
indenture would not apply should Host L.P. attain an investment grade rating.
Accordingly, because our senior notes currently are rated investment grade by
both Moody's and Standard & Poor's, the covenants in our senior notes indenture
(for our Series C senior notes, our only remaining senior notes issued before we
attained an investment grade rating) that previously limited our ability to
incur indebtedness or pay dividends no longer are applicable. Even if we were to
lose the investment grade rating, we would be in compliance with all of our
financial covenants under the senior notes indenture. The following table
summarizes the actual credit ratios for our Series C senior notes as of June 30,
2020 and the covenant requirements contained in the senior notes indenture that
would be applicable at such times as our existing senior notes no longer are
rated investment grade by either Moody's or Standard & Poor's:



                                        Actual Ratio*      Covenant Requirement
Unencumbered assets tests                          447 %   Minimum ratio of 125%
Total indebtedness to total assets                  22 %   Maximum ratio of 

65%


Secured indebtedness to total assets                 0 %   Maximum ratio of 

45%


EBITDA-to-interest coverage ratio                  4.1 x   Minimum ratio of 2.0x
___________



* Because of differences in the calculation methodology between our Series D,

Series E, Series F, Series G and Series H senior notes and our Series C senior

notes, our actual ratios as reported can be slightly different.




The above EBITDA-to-interest coverage ratio as of June 30, 2020 is based on
results for the third and fourth quarters of 2019 and first and second quarters
of 2020. This ratio was 9.9x as of year-end 2019, 6.6x as of March 31, 2020 and,
as noted above, was 4.1x as of June 30, 2020. We expect this ratio to continue
to decline in 2020 as more quarters of historically poor operations caused by
the COVID-19 pandemic are reflected in the calculation. We expect the ratio to
fall below the 2.0x requirement as of the end of third quarter of 2020 and, in
the event we lose our investment grade rating, we will not be able to incur
additional debt while the ratio is below this requirement.

For additional details on our credit facility and senior notes, see our Annual Report on Form 10-K for the year ended December 31, 2019.

Dividend Policy

Host Inc. is required to distribute at least 90% of its annual taxable income,
excluding net capital gain, to its stockholders in order to maintain its
qualification as a REIT. Funds used by Host Inc. to pay dividends on its common
stock are provided by distributions from Host L.P. As of June 30, 2020, Host
Inc. is the owner of approximately 99% of the Host L.P. common OP units.

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The remaining common OP units are owned by unaffiliated limited partners. Each
Host L.P. OP unit may be redeemed for cash or, at the election of Host Inc.,
Host Inc. common stock based on the conversion ratio. The conversion ratio is
1.021494 shares of Host Inc. common stock for each Host L.P. OP unit. During the
Covenant Relief Period, all redemptions must be made with Host Inc. common
stock.

Investors should consider the non-controlling interests in the Host L.P. common
OP units when analyzing dividend payments by Host Inc. to its stockholders, as
these common OP unitholders share, on a pro rata basis, in cash distributed by
Host L.P. to all of its common OP unitholders. For example, if Host Inc. paid a
$1 per share dividend on its common stock, it would be based on the payment of a
$1.021494 per common OP unit distribution by Host L.P. to Host Inc., as well as
to the other unaffiliated Host L.P. common OP unitholders.

Host Inc.'s policy on common dividends generally is to distribute, over time,
100% of its taxable income, which primarily is dependent on Host Inc.'s results
of operations, as well as tax gains and losses on property sales. Host Inc. paid
a regular quarterly cash dividend of $0.20 per share on its common stock on
April 15, 2020 to stockholders of record on March 31, 2020. As part of our
response to COVID-19 and in order to preserve cash and future financial
flexibility, we have suspended our regular quarterly dividends. All future
dividends are subject to Board approval.

Critical Accounting Policies



Our unaudited condensed consolidated financial statements have been prepared in
conformity with GAAP, which requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of our financial statements and the reported amounts of revenues and
expenses during the reporting period. While we do not believe that the reported
amounts would be materially different, application of these policies involves
the exercise of judgment and the use of assumptions as to future uncertainties
and, as a result, actual results could differ from these estimates. We evaluate
our estimates and judgments on an ongoing basis. We base our estimates on
experience and on various other assumptions that we believe are reasonable under
the circumstances. All of our significant accounting policies, including certain
critical accounting policies, are disclosed in our Annual Report on Form 10-K
for the year ended December 31, 2019. For a detailed discussion of the new
accounting standards, see "Note 2. Summary of Significant Accounting Policies"
in this quarterly report.

All Owned Hotel Operating Statistics



To facilitate a quarter-to-quarter comparison of our operations, we typically
present certain operating statistics and operating results for the periods
included in this presentation on a comparable hotel basis (discussed in
Comparable Hotel Operating Statistics below). However, due to the COVID-19
pandemic and its effects on operations there is little comparability between
periods. For this reason we are temporarily suspending our comparable hotel
presentation and instead present hotel operating results for all consolidated
hotels and, to facilitate comparisons between periods, we are presenting results
on a pro forma basis, including the following adjustments: (1) operating results
are presented for all consolidated hotels owned as of June 30, 2020, but do not
include the results of operations for properties sold in 2019; and (2) operating
results for acquisitions in the current and prior year are reflected for full
calendar years, to include results for periods prior to our ownership. For these
hotels, since the year-over-year comparison includes periods prior to our
ownership, the changes will not necessarily correspond to changes in our actual
results.

Comparable Hotel Operating Statistics



The following discusses our typical presentation of comparable hotels; however,
this method is not being used in the current presentation as prior year
presentation of comparable hotel performance is no longer relevant given the
impact of COVID-19 on operations. To facilitate a quarter-to-quarter comparison
of our operations, we typically present certain operating statistics (i.e.,
Total RevPAR, RevPAR, average daily rate and average occupancy) and operating
results (revenues, expenses, hotel EBITDA and associated margins) for the
periods included in this report on a comparable hotel basis in order to enable
our investors to better evaluate our operating performance.

We define our comparable hotels as those:

(i) that are owned or leased by us at the end of the reporting periods


            being compared; and


        (ii) that have not sustained substantial property damage or business
             interruption, or undergone large-scale capital projects (as further
             defined below) during the reporting periods being compared.


The hotel business is capital-intensive and renovations are a regular part of
the business. Generally, hotels under renovation remain comparable hotels. A
large-scale capital project that would cause a hotel to be excluded from our
comparable hotel set is an extensive renovation of several core aspects of the
hotel, such as rooms, meeting space, lobby, bars, restaurants, and other public

                                       38

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spaces. Both quantitative and qualitative factors are taken into consideration
in determining if the renovation would cause a hotel to be removed from the
comparable hotel set, including unusual or exceptional circumstances such as: a
reduction or increase in room count, rebranding, a significant alteration of the
business operations, or the closing of the hotel during the renovation.

Historically, we have not included an acquired hotel in our comparable hotel set
until the operating results for that hotel have been included in our
consolidated results for one full calendar year. For example, we acquired the 1
Hotel South Beach in February 2019 and therefore it was not included in our
comparable hotels for 2019. We are, however, making a change to this policy
going forward, which is explained below under "2020 Comparable Hotel Definition
Change."

Hotels that we sell are excluded from the comparable hotel set once the
transaction has closed. Similarly, hotels are excluded from our comparable hotel
set from the date that they sustain substantial property damage or business
interruption or commence a large-scale capital project. In each case, these
hotels are returned to the comparable hotel set when the operations of the hotel
have been included in our consolidated results for one full calendar year after
completion of the repair of the property damage or cessation of the business
interruption, or the completion of large-scale capital projects, as applicable.

2020 Comparable Hotel Definition Change



Effective January 1, 2020, the Company adjusted its definition of comparable
hotels to include recent acquisitions on a pro forma basis assuming they have
comparable operating environments. Operating results for acquisitions in the
current and prior year will be reflected for full calendar years, to include
results for periods prior to our ownership. Management believes this will
provide investors a better understanding of underlying growth trends for our
current portfolio. As a result, the 1 Hotel South Beach would be included in the
comparable hotel set for 2020.

CONSTANT US$ AND NOMINAL US$



Operating results denominated in foreign currencies are translated using the
prevailing exchange rates on the date of the transaction, or monthly based on
the weighted average exchange rate for the period. For comparative purposes, we
also present the RevPAR results for the prior year assuming the results of our
foreign operations were translated using the same exchange rates that were
effective for the comparable periods in the current year, thereby eliminating
the effect of currency fluctuation for the year-over-year comparisons. We
believe that this presentation is useful to investors as it provides clarity
with respect to the growth in RevPAR in the local currency of the hotel
consistent with the manner in which we would evaluate our domestic portfolio.
However, the estimated effect of changes in foreign currency has been reflected
in the actual and forecast results of net income, EBITDA, Adjusted EBITDAre,
earnings per diluted share and Adjusted FFO per diluted share. Nominal US$
results include the effect of currency fluctuations, consistent with our
financial statement presentation.

Non-GAAP Financial Measures

We use certain "non-GAAP financial measures," which are measures of our historical or future financial performance that are not calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules. These measures include the following:



        •   Earnings Before Interest Expense, Income Taxes, Depreciation and
            Amortization ("EBITDA"), Earnings Before Interest Expense, Income
            Taxes, Depreciation and Amortization for real estate

("EBITDAre") and


            Adjusted EBITDAre, as a measure of performance for Host Inc. and Host
            L.P.,


        •   Funds From Operations ("FFO") and FFO per diluted share, both
            calculated in accordance with National Association of Real Estate
            Investment Trusts ("NAREIT") guidelines and with certain

adjustments


            from those guidelines, as a measure of performance for Host Inc.,


        •   All Owned Hotel pro forma operating results, as a measure of
            performance for Host Inc. and Host L.P., and

• COVID-19 Non-GAAP Financial Measures, including Hotel-level operating


            loss and cash burn.


The following discussion defines these measures and presents why we believe they are useful supplemental measures of our performance.



Set forth below for each such non-GAAP financial measure is a reconciliation of
the measure with the financial measure calculated and presented in accordance
with GAAP that we consider most directly comparable thereto. We also have
included in "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Non-GAAP Financial Measures" in our Annual Report on
Form 10-K for the year ended December 31, 2019 further explanations of the
adjustments being made, a statement disclosing the reasons why we believe the
presentation of each of the non-GAAP financial measures provide useful
information to

                                       39

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investors regarding our financial condition and results of operations, the additional purposes for which we use the non-GAAP financial measures and limitations on their use.

EBITDA, EBITDAre and Adjusted EBITDAre

EBITDA



EBITDA is a commonly used measure of performance in many industries. Management
believes EBITDA provides useful information to investors regarding our results
of operations because it helps us and our investors evaluate the ongoing
operating performance of our properties after removing the impact of our capital
structure (primarily interest expense) and our asset base (primarily
depreciation and amortization). Management also believes the use of EBITDA
facilitates comparisons between us and other lodging REITs, hotel owners who are
not REITs and other capital-intensive companies. Management uses EBITDA to
evaluate property-level results and as one measure in determining the value of
acquisitions and dispositions and, like FFO and Adjusted FFO per diluted share,
it is widely used by management in the annual budget process and for
compensation programs.

EBITDAre and Adjusted EBITDAre



We present EBITDAre in accordance with NAREIT guidelines, as defined in its
September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and
Amortization for Real Estate," to provide an additional performance measure to
facilitate the evaluation and comparison of our results with other REITs. NAREIT
defines EBITDAre as net income (calculated in accordance with GAAP) excluding
interest expense, income tax, depreciation and amortization, gains or losses on
disposition of depreciated property (including gains or losses on change of
control), impairment write-downs of depreciated property and of investments in
unconsolidated affiliates caused by a decrease in value of depreciated property
in the affiliate, and adjustments to reflect the entity's pro rata share of
EBITDAre of unconsolidated affiliates.

We make additional adjustments to EBITDAre when evaluating our performance
because we believe that the exclusion of certain additional items described
below provides useful supplemental information to investors regarding our
ongoing operating performance. We believe that the presentation of Adjusted
EBITDAre, when combined with the primary GAAP presentation of net income, is
beneficial to an investor's understanding of our operating performance. Adjusted
EBITDAre also is similar to what is used in calculating certain credit ratios
for our credit facility and senior notes. We adjust EBITDAre for the following
items, which may occur in any period, and refer to this measure as Adjusted
EBITDAre:

• Property Insurance Gains - We exclude the effect of property insurance gains

reflected in our consolidated statements of operations because we believe

that including them in Adjusted EBITDAre is not consistent with reflecting

the ongoing performance of our assets. In addition, property insurance gains

could be less important to investors given that the depreciated asset book

value written off in connection with the calculation of the property

insurance gain often does not reflect the market value of real estate assets.

• Acquisition Costs - Under GAAP, costs associated with completed property

acquisitions that are considered business combinations are expensed in the

year incurred. We exclude the effect of these costs because we believe they

are not reflective of the ongoing performance of the company.

• Litigation Gains and Losses - We exclude the effect of gains or losses

associated with litigation recorded under GAAP that we consider outside the


     ordinary course of business. We believe that including these items is not
     consistent with our ongoing operating performance.


In unusual circumstances, we also may adjust EBITDAre for gains or losses that
management believes are not representative of the company's current operating
performance. The last such adjustment was a 2013 exclusion of a gain from an
eminent domain claim.

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The following table provides a reconciliation of EBITDA, EBITDAre, and Adjusted
EBITDAre to net income (loss), the financial measure calculated and presented in
accordance with GAAP that we consider the most directly comparable:

 Reconciliation of Net Income (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre
                          for Host Inc. and Host L.P.

                                 (in millions)



                                        Quarter ended June 30,             Year-to-date ended June 30,
                                        2020              2019              2020                  2019
Net income (loss) (1)                $      (356 )     $       290     $         (359 )       $        479
Interest expense                              40                43                 77                   86
Depreciation and amortization                168               166                332                  336
Income taxes                                 (46 )              16                (83 )                 18
EBITDA (1)                                  (194 )             515                (33 )                919
Gain on dispositions (2)                      (1 )             (57 )                -                  (59 )
Equity investment adjustments:
Equity in (earnings) losses of
affiliates                                    25                (4 )               21                   (9 )
Pro rata EBITDAre of equity
investments                                  (20 )               6                (14 )                 16

EBITDAre and Adjusted EBITDAre (1) $ (190 ) $ 460 $

       (26 )       $        867
___________


(1) Net income, EBITDA, EBITDAre, Adjusted EBITDAre, NAREIT FFO and Adjusted FFO

for the quarter ended June 30, 2020 include a gain of $12 million from the

sale of land adjacent to The Phoenician and a loss of $14 million related to

inventory impairment expense recorded by our Maui timeshare joint venture,

reflected through equity in (earnings) losses of affiliates.

(2) Reflects the sale of four hotels in 2019.

FFO Measures



We present NAREIT FFO and NAREIT FFO per diluted share as non-GAAP measures of
our performance in addition to our earnings per share (calculated in accordance
with GAAP). We calculate NAREIT FFO per diluted share as our NAREIT FFO (defined
as set forth below) for a given operating period, as adjusted for the effect of
dilutive securities, divided by the number of fully diluted shares outstanding
during such period in accordance with NAREIT guidelines. Effective January 1,
2019, we adopted NAREIT's definition of FFO included in NAREIT's Funds From
Operations White Paper - 2018 Restatement. The adoption did not result in a
change in the way we calculate NAREIT FFO. NAREIT defines FFO as net income
(calculated in accordance with GAAP), excluding depreciation and amortization
related to real estate, gains and losses from the sale of certain real estate
assets, gains and losses from change in control, impairment write-downs of
certain real estate assets and investments and adjustments for consolidated
partially-owned entities and unconsolidated affiliates. Adjustments for
consolidated partially-owned entities and unconsolidated affiliates are
calculated to reflect our pro rata share of the FFO of those entities on the
same basis.

We also present Adjusted FFO per diluted share when evaluating our performance
because management believes that the exclusion of certain additional items
described below provides useful supplemental information to investors regarding
our ongoing operating performance. Management historically has made the
adjustments detailed below in evaluating our performance, in our annual budget
process, and for our compensation programs. We believe that the presentation of
Adjusted FFO per diluted share, when combined with both the primary GAAP
presentation of earnings per share and FFO per diluted share as defined by
NAREIT, provides useful supplemental information that is beneficial to an
investor's understanding of our operating performance. We adjust NAREIT FFO per
diluted share for the following items, which may occur in any period, and refer
to this measure as Adjusted FFO per diluted share:

• Gains and Losses on the Extinguishment of Debt - We exclude the effect


            of finance charges and premiums associated with the 

extinguishment of


            debt, including the acceleration of the write-off of deferred
            financing costs from the original issuance of the debt being redeemed
            or retired and incremental interest expense incurred during the
            refinancing period. We also exclude the gains on debt

repurchases and


            the original issuance costs associated with the retirement of
            preferred stock. We believe that these items are not reflective of our
            ongoing finance costs.


        •   Acquisition Costs - Under GAAP, costs associated with completed
            property acquisitions that are considered business combinations are
            expensed in the year incurred. We exclude the effect of these costs
            because we believe they are not reflective of the ongoing

performance


            of the company.


        •   Litigation Gains and Losses - We exclude the effect of gains or losses
            associated with litigation recorded under GAAP that we consider
            outside the ordinary course of business. We believe that including
            these items is not consistent with our ongoing operating

performance.


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In unusual circumstances, we also may adjust NAREIT FFO for gains or losses that
management believes are not representative of our current operating performance.
For example, in 2017, as a result of the reduction of the U.S. federal corporate
income tax rate from 35% to 21% by the Tax Cuts and Jobs Act, we remeasured our
domestic deferred tax assets as of December 31, 2017 and recorded a one-time
adjustment to reduce the deferred tax assets and to increase the provision for
income taxes by approximately $11 million. We do not consider this adjustment to
be reflective of our ongoing operating performance and, therefore, excluded this
item from Adjusted FFO.

The following table provides a reconciliation of the differences between our
non-GAAP financial measures, NAREIT FFO and Adjusted FFO (separately and on a
per diluted share basis), and net income (loss), the financial measure
calculated and presented in accordance with GAAP that we consider most directly
comparable:

    Host Inc. Reconciliation of Diluted Earnings (Loss) per Common Share to

          NAREIT and Adjusted Funds From Operations per Diluted Share

                     (in millions, except per share amount)



                                             Quarter ended June 30,            Year-to-date ended June 30,
                                             2020              2019             2020                2019
Net income (loss) (1)                     $      (356 )     $       290     $        (359 )     $         479
Less: Net (income) loss attributable to
   non-controlling interests                        4                (4 )               4                  (7 )
Net income (loss) attributable to Host
Inc.                                             (352 )             286              (355 )               472
Adjustments:
Gain on dispositions (2)                           (1 )             (57 )               -                 (59 )
Depreciation and amortization                     166               165               331                 334
Equity investment adjustments:
Equity in (earnings) losses of
affiliates                                         25                (4 )              21                  (9 )
Pro rata FFO of equity investments                (20 )               4               (17 )                13
Consolidated partnership adjustments:
FFO adjustment for non-controlling
partnerships                                        -                 -                (1 )                 1
FFO adjustments for non-controlling
interests of Host L.P.                             (2 )              (1 )              (3 )                (3 )
NAREIT FFO (1)                                   (184 )             393               (24 )               749
Adjustments to NAREIT FFO:
Loss on debt extinguishment                         1                 -                 1                   -
Adjusted FFO (1)                          $      (183 )     $       393     $         (23 )     $         749

For calculation on a per share basis
(3):

Diluted weighted average shares
outstanding - EPS, NAREIT FFO and
Adjusted FFO                                    705.1             739.4             706.7               740.2
Diluted earnings (loss) per common
share                                     $      (.50 )     $       .39     $        (.50 )     $         .64
NAREIT FFO and Adjusted FFO per diluted
share                                     $      (.26 )     $       .53     $        (.03 )     $        1.01
___________

(1-2) Refer to the corresponding footnote on the Reconciliation of Net Income


      (Loss) to EBITDA, EBITDAre and Adjusted EBITDAre for Host Inc. and Host
      L.P.

(3) Diluted earnings (loss) per common share, NAREIT FFO per diluted share and

Adjusted FFO per diluted share are adjusted for the effects of dilutive

securities. Dilutive securities may include shares granted under

comprehensive stock plans, preferred OP units held by non-controlling

partners and other non-controlling interests that have the option to convert

their limited partner interests to common OP units. No effect is shown for


    securities if they are anti-dilutive.


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Hotel Property Level Operating Results



We present certain operating results for our hotels, such as hotel revenues,
expenses, food and beverage profit, and EBITDA (and the related margins), on a
hotel-level pro forma basis as supplemental information for our investors. Our
hotel results reflect the operating results of our hotels as discussed in All
Owned Hotel Operating Statistics above. We present all owned hotel EBITDA to
help us and our investors evaluate the ongoing operating performance of our
properties after removing the impact of our capital structure (primarily
interest expense) and our asset base (primarily depreciation and amortization
expense). Corporate-level costs and expenses also are removed to arrive at
property-level results. We believe these property-level results provide
investors with supplemental information about the ongoing operating performance
of our hotels. All owned hotel results are presented both by location and for
our properties in the aggregate. We eliminate depreciation and amortization
expense because, even though depreciation and amortization expense are
property-level expenses, these non-cash expenses, which are based on historical
cost accounting for real estate assets, implicitly assume that the value of real
estate assets diminishes predictably over time. As noted earlier, because real
estate values have historically risen or fallen with market conditions, many
real estate industry investors have considered presentation of historical cost
accounting for operating results to be insufficient.

Because of the elimination of corporate-level costs and expenses, gains or
losses on disposition and depreciation and amortization expense, the hotel
operating results we present do not represent our total revenues, expenses,
operating profit or net income and should not be used to evaluate our
performance as a whole. Management compensates for these limitations by
separately considering the impact of these excluded items to the extent they are
material to operating decisions or assessments of our operating performance. Our
consolidated statements of operations include such amounts, all of which should
be considered by investors when evaluating our performance.

While management believes that presentation of all owned hotel results is a
measure that provides useful information in evaluating our ongoing performance,
this measure is not used to allocate resources or to assess the operating
performance of each of these hotels, as these decisions are based on data for
individual hotels and are not based on all owned hotel results in the aggregate.
For these reasons, we believe all owned hotel operating results, when combined
with the presentation of GAAP operating profit, revenues and expenses, provide
useful information to investors and management.

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The following tables present certain operating results and statistics for our
hotels for the periods presented herein and a reconciliation of the differences
between all owned hotel pro forma EBITDA, a non-GAAP financial measure, and net
income (loss), the financial measure calculated and presented in accordance with
GAAP that we consider most directly comparable. Similar reconciliations of the
differences between (i) hotel revenues and (ii) our revenues as calculated and
presented in accordance with GAAP (each of which is used in the applicable
margin calculation), and between (iii) hotel expenses and (iv) operating costs
and expenses as calculated and presented in accordance with GAAP, also are
included in the reconciliation:

         All Owned Hotel Pro Forma Results for Host Inc. and Host L.P.

                     (in millions, except hotel statistics)

                                                                           Year-to-date ended
                                       Quarter ended June 30,                   June 30,
                                       2020               2019            2020              2019
Number of hotels                             80                80                80              80
Number of rooms                          46,670            46,670            46,670          46,670
Change in hotel Total RevPAR -
Constant US$                              (92.9 )%              -             (57.9 )%            -
Nominal US$                               (92.9 )%              -             (57.9 )%            -
Change in hotel RevPAR -
   Constant US$                           (93.0 )%              -             (59.2 )%            -
   Nominal US$                            (93.0 )%              -             (59.3 )%            -
Operating profit (loss) margin
(1)                                      (342.7 )%           18.9 %           (31.5 )%         17.3 %
All Owned Hotel Pro Forma EBITDA
margin (2)                               (155.3 )%           31.9 %             1.6 %          31.2 %
Food and beverage profit margin
(1)                                      (254.5 )%           35.4 %            16.7 %          34.8 %
All Owned Hotel Pro Forma food
and beverage profit margin (2)           (254.5 )%           35.6 %         

16.7 % 34.9 %



Net income (loss)                   $      (356 )      $      290     $        (359 )    $      479
Depreciation and amortization               168               166               332             336
Interest expense                             40                43                77              86
Provision (benefit) for income
taxes                                       (46 )              16               (83 )            18
Gain on sale of property and
corporate level
   income/expense                            34               (44 )              51             (33 )
Pro forma adjustments (2)                     -               (25 )               -             (40 )

All Owned Hotel Pro Forma EBITDA $ (160 ) $ 446 $

      18      $      846










                                        Quarter ended June 30, 2020                                          Quarter ended June 30, 2019
                                                  Adjustments                                                        Adjustments
                                                                    All Owned
                                                                    Hotel Pro                                                                          All Owned
                                                  Depreciation        Forma                                                   Depreciation and         Hotel Pro
                                                  and corporate      Results                              Pro forma            corporate level       Forma Results
                              GAAP Results         level items         (3)         GAAP Results         adjustments(3)              items                 (3)
Revenues
Room                          $          61       $           -     $       61     $         931      $              (62 )   $                 -     $          869
Food and beverage                        11                   -             11               449                     (19 )                     -                430
Other                                    31                   -             31               103                      (4 )                     -                 99
Total revenues                          103                   -            103             1,483                     (85 )                     -              1,398
Expenses
Room                                     43                   -             43               226                     (14 )                     -                212
Food and beverage                        39                   -             39               290                     (13 )                     -                277
Other                                   181                   -            181               496                     (33 )                     -                463
Depreciation and
amortization                            168                (168 )            -               166                       -                    (166 )                -
Corporate and other
expenses                                 25                 (25 )            -                25                       -                     (25 )                -
Total expenses                          456                (193 )          263             1,203                     (60 )                  (191 )              952
Operating Profit (Loss) -
All Owned Hotel Pro Forma
EBITDA                        $        (353 )     $         193     $     (160 )   $         280      $              (25 )   $               191     $          446







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                                        Year-to-date ended June 30, 2020                                         Year-to-date ended June 30, 2019
                                                  Adjustments                                                               Adjustments
                                                                                                                                                              All Owned
                                                  Depreciation       All Owned Hotel                                                 Depreciation and         Hotel Pro
                                                  and corporate         Pro Forma                                Pro forma            corporate level       Forma Results
                              GAAP Results         level items         Results (3)       GAAP Results          adjustments(3)              items                 (3)
Revenues
Room                         $          687       $           -      $           687     $       1,788       $             (111 )   $                 -     $        1,677
Food and beverage                       341                   -                  341               882                      (39 )                     -                843
Other                                   127                   -                  127               203                      (11 )                     -                192
Total revenues                        1,155                   -                1,155             2,873                     (161 )                     -              2,712
Expenses
Room                                    230                   -                  230               443                      (28 )                     -                415
Food and beverage                       284                   -                  284               575                      (26 )                     -                549
Other                                   623                   -                  623               969                      (67 )                     -                902
Depreciation and
amortization                            332                (332 )                  -               336                        -                    (336 )                -
Corporate and other
expenses                                 50                 (50 )                  -                54                        -                     (54 )                -
Total expenses                        1,519                (382 )              1,137             2,377                     (121 )                  (390 )            1,866
Operating Profit (Loss) -
All Owned Hotel Pro Forma
EBITDA                       $         (364 )     $         382      $            18     $         496       $              (40 )   $               390     $          846
___________

(1) Profit margins are calculated by dividing the applicable operating profit by

the related revenue amount. GAAP profit margins are calculated using amounts

presented in the condensed consolidated statements of operations. Hotel

margins are calculated using amounts presented in the above tables.

(2) Pro forma adjustments represent the following items: (i) the elimination of

results of operations of our sold hotels, which operations are included in

our condensed consolidated statements of operations as continuing operations

and (ii) the addition of results for periods prior to our ownership for

hotels acquired during the presented periods. For this presentation, we no

longer adjust for certain items such as gains on insurance settlements, the


    results of our leased office buildings and other non-hotel revenue and
    expense items, and they are included in the All Owned Hotel Pro Forma
    results.




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COVID-19 Non-GAAP Financial Measures

Hotel-level Operating Loss



We present hotel-level operating loss because management believes this metric is
helpful to investors to evaluate the monthly operating performance of our
properties during the COVID-19 pandemic. We further adjust All Owned Hotel Pro
Forma EBITDA to reflect benefits for furloughed employees in the month that they
are provided to the employees of our properties, replacing the related GAAP
expense accrual. While furlough costs may arise in various situations, the
furlough costs incurred during the COVID-19 pandemic are unusually large and not
reflective of how wages and benefits are generally accrued and paid, therefore
management adjusts All Owned Hotel Pro Forma EBITDA to include the furlough
costs based on the timing that they are provided to the employees to better
reflect monthly costs and evaluate the hotel performance. We accrue for the
anticipated furlough costs when our hotel managers have committed to the
continuation of these benefits regardless of the timing of the benefits. For
example, in March 2020 we accrued $35 million for April and May benefits for
furloughed employees at our Marriott- and Hyatt-managed hotels. In June 2020, we
accrued $32 million for the July, August and September benefits for our
Marriott-managed hotels. As a result, our GAAP operating results reflect the
timing of the commitment rather than the actual month of the benefits. While the
net impact of the accrual is not significant in the evaluation of our hotel
operations on a quarterly basis, we adjust for the timing of the accrual on a
monthly basis to include the expense in the month that the furlough benefits are
provided in order to evaluate the month-to-month changes in operating results at
our properties exclusive of the timing of the accrual. Hotel-level operating
loss is not intended to be, and should not be used as, a substitute for GAAP net
income (loss). Because of the elimination of corporate-level costs and expenses,
gains or losses on disposition and depreciation and amortization expense, the
hotel-level monthly operating results we present do not represent our total
operating results and should not be used to evaluate our performance as a whole.
Management compensates for these limitations by separately considering the
impact of these excluded items to the extent they are material to operating
decisions or assessments of our operating performance. Our consolidated
statements of operations include such amounts, all of which should be considered
by investors when evaluating our performance.

The following table provides a reconciliation of the differences between our non-GAAP financial measure, hotel-level operating loss, and net loss, the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable.



Reconciliation of Net Loss to Hotel-level Operating Loss for Host Inc. and Host
                                      L.P.

                                 (in millions)

                                                                                 Quarter ended
                                       April          May          June          June 30, 2020
Net loss                             $    (120 )   $    (114 )   $    (122 )   $            (356 )
Depreciation and amortization               54            56            58                   168
Interest expense                            14            13            13                    40
Benefit for income taxes                    (8 )         (16 )         (22 )                 (46 )
Gain on sale of property and                 7            11            16                    34
corporate level income/expense
All Owned Hotel Pro Forma EBITDA           (53 )         (50 )         (57 )                (160 )

Benefits for furloughed employees (20 ) (3 ) 20


                  (3 )
adjustment
Hotel-level operating loss           $     (73 )   $     (53 )   $     (37 )   $            (163 )


Cash Burn

We present cash burn because management believes this metric is helpful to
investors to evaluate the our ability to continue to fund operations during
periods where hotels have suspended operations or are operating at very low
levels of occupancy due to the COVID-19 pandemic We define cash burn as net cash
from operating activities adjusted for (i) capital expenditures; (ii) changes in
short term assets and liabilities; and (iii) contributions to equity
investments, as further described below. Cash burn is not intended to be, and
should not be used as, a substitute for GAAP cash flow as it does not reflect
the issuance or repurchase of equity, dividends, issuance or repayment of debt,
or other investing activities such as the purchase or sale of properties.
Adjustments include:



       •  Capital Expenditures - Capital expenditures are included in the overall
          cash burn as they represent a significant on-going cash outflow for
          us. While we continually evaluate our capital expenditure program to
          appropriately balance improving and renewing our hotel portfolio with

our overall cash needs; we continue to anticipate capital expenditures


          to be a significant cash outflow.




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• Changes in short term assets and liabilities - We eliminate changes in


          short-term assets and liabilities, including due from managers, other
          assets and other liabilities, that primarily represent timing of cash
          inflows and outflows. As a result, cash burn includes income and
          expenses in better alignment with how these items are reflected on the
          statement of operations. These generally represent receipts and payments
          that will be settled within the year and do not reflect our cash savings
          or liquidity needs on an on-going basis.



• Contributions to equity investments - We include contributions to equity

investments that have been necessary due to the depressed operations for

these investments during the COVID-19 pandemic. These are included as

investing activities on the consolidated statements of cash flows.

The following table provides a reconciliation of our second quarter cash used in operating activities per our statements of cash flows to cash burn.



 Reconciliation of GAAP Net Cash Used in Operating Activities to Cash Burn for
                            Host Inc. and Host L.P.

                                 (in millions)

                                              Quarter ended June 30, 2020
GAAP net cash used in operating activities   $                        (172 )

Capital expenditures                                                  (169 )
Contributions to equity investments                                     (1 )
Timing adjustments
Change in due from managers                                            (31 )
Change in other assets                                                 (17 )
Change in other liabilities                                             (9 )
Cash burn                                    $                        (399 )

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