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

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                  FORM 8-K/A

              CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of Earliest Event Reported) April 3, 2001

                        -------------------------------

                           HOST MARRIOTT CORPORATION
            (Exact Name of Registrant as Specified in its Charter)

                                   Maryland
                (State or Other Jurisdiction of Incorporation)

       001-14625                                        53-0085950
(Commission File Number)                (I.R.S. Employer Identification Number)

                 10400 Fernwood Road, Bethesda, Maryland 20817
              (Address of Principal Executive Offices) (Zip Code)

                        -------------------------------

      Registrant's Telephone Number, Including Area Code (301) 380-9000
        (Former Name or Former Address, if changed since last report.)

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

                                       1




                                   Form 8-K/A


ITEM 5. OTHER EVENTS

        Effective January 1, 2001, Host Marriott Corporation ("Host-REIT"),
through its operating partnership Host Marriott, L.P. ("Host LP"), completed a
transaction with Crestline Capital Corporation ("Crestline") for the termination
of the Crestline leases through the purchase of the entities, or "Crestline
Lessee Entities", owning the leasehold interests with respect to 116 of our
full-service hotels for $207 million in cash, including approximately $6 million
of legal fees and transfer taxes. The transaction was consummated by a wholly-
owned subsidiary of Host LP that will elect to be treated as a taxable REIT
subsidiary, or "TRS," for income tax purposes. In connection therewith, we
recorded a non-recurring, pre-tax loss of $207 million during the fourth quarter
of 2000, net of an $82 million tax benefit which we have recorded as a deferred
tax asset, because for income tax purposes, the acquisition is recorded as an
asset that will be amortized over the remaining term of the leases. In addition,
the existing working capital of the respective hotels, valued at $90 million as
of December 31, 2000, including the existing obligations under the working
capital note, was transferred from Crestline to the TRS. Crestline remains the
lessee of one of our full-service properties.

        The TRS will pay rent to Host LP, and will be obligated to the managers
for the fees and costs reimbursements under the management agreements. On a
consolidated basis, our results of operations beginning in 2001 will reflect the
revenues and expenses generated by these hotels rather than rental income. As a
result, our 2001 results will not be comparable to the historical reported
amounts for 2000 and 1999. In order to provide a clearer understanding and
comparability of our results of operations we have presented unaudited pro forma
statements of operations by quarter and year-to-date for the two fiscal years
ended December 31, 2000 (see Item 7(b)), adjusted to reflect the acquisition of
the Crestline Lessee Entities as if it occurred on January 1, 1999. This Form
8-K/A reflects adjustments to the recognition of minority interest expense
and the tax provision.

        The transaction is permitted as a result of the passage of the REIT
Modernization Act, enacted in December 1999, which amended the tax laws to
permit REITs, effective January 1, 2001, (i) to lease hotels to a subsidiary
that qualifies as a TRS, and (ii) to own all of the voting stock of such TRS.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

    (b) Pro forma financial information. (see pg. 3)



                                  SIGNATURES

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

                                        HOST MARRIOTT CORPORATION

                                        By: /s/ Donald D. Olinger
                                            ---------------------------------
                                            Donald D. Olinger
                                            Senior Vice President and
                                            Corporate Controller

Date: April 3, 2001


                                       2



Item 7(b). Pro Forma Consolidated Statements of Operations of Host REIT

   Because of the significant changes to our corporate structure as a result
of the transaction with Crestline for the termination of the Crestline leases
through the purchase of the entities, or "Crestline Lessee Entities", during
January 2001, management believes that a discussion of our pro forma results of
operations is meaningful and relevant to an investor's understanding of our
present and future operations. The pro forma results of operations set forth
below are based on the unaudited condensed consolidated statements of operations
for the twelve weeks ended March 24, 2000 and March 26, 1999, June 16, 2000 and
June 18, 1999, and September 8, 2000 and September 10, 1999, and the sixteen
weeks ended December 31, 2000 and 1999, and the audited consolidated statements
of operations for the years ended December 31, 2000 and 1999, and are only
adjusted to reflect the January 2001 acquisition of the Crestline Lessee
Entities for $207 million in cash as if the transaction occurred at the
beginning of 1999. The following pro forma results do not include adjustments
for any transactions other than the Crestline lease repurchase and are not
presented in accordance with Article 11 of SEC Regulation S-X.

   As a result of the Crestline acquisition, effective January 1, 2001, Host LP
leases 116 of its full-service hotels to its TRS, and therefore, our
consolidated operations with respect to those hotels will represent property-
level revenues and expenses rather than rental income from third-party
lessees. In addition, the net income applicable to the TRS will be subject to
federal and state income taxes.

   The non-recurring pre-tax loss of $207 million net of the minority interest
effect of $46 million related to the minority owners' share in the lease
repurchase expense and a tax benefit of $82 million that was recorded in our
historical results of operations for the fourth quarter of 2000 is excluded from
the pro forma results of operations for 2000. In addition, the pro forma
statements of operations reflecting the lease repurchase also include the
following adjustments:

  .  record hotel-level revenues and expenses and reduce historical rental
     income with respect to the 116 properties;

  .  reduce historical interest income for amounts related to the working
     capital note with Crestline;

  .  reduce historical equity in earnings of affiliates for interest earned
     at our non-controlled subsidiary on the related FF&E loans with
     Crestline;

  .  record interest expense related to the additional borrowings from the 9
     1/4% Series F senior notes to fund the $207 million cash payment;

  .  record the minority interest effect related to the outside ownership in
     the operating partnership; and

  .  record the tax provision attributable to the income of the TRS at an
     effective rate of 39.5%.

   The unaudited pro forma financial information does not purport to represent
what our results of operations or financial condition would actually have been
if the transaction had in fact occurred at the beginning of 1999, or to
project our results of operations or financial condition for any future
period. The unaudited pro forma financial information is based upon available
information and upon assumptions and estimates that we believe are reasonable
under the circumstances. The following unaudited pro forma financial
information should be read in conjunction with our audited financial
statements contained in our annual report on Form 10-K for the fiscal year ended
December 31, 2000 and our unaudited quarterly financial statements contained in
our quarterly reports on Form 10-Q for each quarter within the two fiscal years
ended December 31, 2000.

                                      3



                 UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS





                                                                       Twelve Weeks Ended
                                                                         March 24, 2000
                                                                ------------------------------------
                                                                               Lease
                                                                Historical   Repurchase    Pro Forma
                                                                ----------   ----------    ---------
                                                         (in millions, except per common share amounts)
                                                                                
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $     -      $   512      $   512
  Food and beverage...........................................        -          250          250
  Other.......................................................        -           64           64
                                                                --------     --------     --------
    Total hotel property-level revenues.......................        -          826          826
  Rental income(1)............................................      173         (142)          31
  Net gains on property transactions..........................        1            -            1
  Equity in earnings of affiliates and other..................        2            -            2
                                                                --------     --------     --------
    Total revenues............................................      176          684          860
                                                                --------     --------     --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................        -          121          121
  Food and beverage...........................................        -          183          183
  Other departmental costs and deductions.....................        -          200          200
  Management fees and other...................................        -           51           51
  Other property-level expenses...............................       59            -           59
  Depreciation and amortization...............................       74            -           74
                                                                --------     --------     --------
    Total operating costs and expenses........................      133          555          688
                                                                --------     --------     --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................       43          129          172
Minority interest.............................................       11          (27)         (16)
Corporate expenses............................................      (10)           -          (10)
Interest expense..............................................      (96)          (5)        (101)
Interest income...............................................        9           (1)           8
Dividends on Convertible Preferred Securities.................       (7)           -           (7)
Other.........................................................       (6)           -           (6)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE INCOME TAXES.............................      (56)          96           40
Provision for income taxes....................................       (1)          (4)          (5)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................      (57)          92           35
Less: Dividends on preferred stock............................       (5)           -           (5)
Add: Gain on repurchase of Convertible Preferred Securities...        4            -            4
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $   (58)      $   92       $   34
                                                                ========     ========     ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $  (.26)      $  .42       $  .16
                                                                ========     ========     ========




                                                                       Twelve Weeks Ended
                                                                         March 26, 1999
                                                                ------------------------------------
                                                                               Lease
                                                                Historical   Repurchase    Pro Forma
                                                                ----------   ----------    ---------
                                                         (in millions, except per common share amounts)
                                                                                
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $    -       $    494     $ 494
  Food and beverage...........................................       -            239       239
   Other.......................................................      -             54        54
                                                                --------     --------     --------
    Total hotel property-level revenues.......................       -            787       787
  Rental income(1)............................................     171           (135)       36
  Net gains on property transactions..........................      12              -        12
  Equity in earnings of affiliates and other..................       1              -         1
                                                                --------     --------     --------
    Total revenues............................................     184            652       836
                                                                --------     --------     --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................       -            113       113
  Food and beverage...........................................       -            174       174
  Other departmental costs and deductions.....................       -            192       192
  Management fees and other...................................       -             49        49
  Other property-level expenses...............................      58              -        58
  Depreciation and amortization...............................      68              -        68
                                                                --------     --------     --------
    Total operating costs and expenses........................     126            528       654
                                                                --------     --------     --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................      58            124       182
Minority interest.............................................       8            (26)      (18)
Corporate expenses............................................      (7)             -        (7)
Interest expense..............................................     (99)            (5)     (104)
Interest income...............................................       8             (1)        7
Dividends on Convertible Preferred Securities.................      (9)             -        (9)
Other.........................................................      (2)             -        (2)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE INCOME TAXES.............................     (43)            92        49
Provision for income taxes....................................      (1)            (4)       (5)
                                                                --------     --------    --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................     (44)            88        44
Less: Dividends on preferred stock............................       -              -         -
Add: Gain on repurchase of Convertible Preferred Securities...       -              -         -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $  (44)       $    88     $  44
                                                                ========     ========     ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $ (.19)       $   .38     $ .19
                                                                ========     ========     ========




                 UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS




                                                                       Twelve Weeks Ended
                                                                          June 16, 2000
                                                                --------------------------------
                                                                              Lease
                                                                Historical  Repurchase   Pro Forma
                                                                ----------   --------    ---------
                                                         (in millions, except per common share amounts)
                                                                                
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $     -      $   605      $   605
  Food and beverage...........................................        -          308          308
  Other.......................................................        -           73           73
                                                                --------     --------     --------
    Total hotel property-level revenues.......................        -          986          986
  Rental income(1)............................................      183         (156)          27
  Net gains on property transactions..........................        2            -            2
  Equity in earnings of affiliates and other..................        6            -            6
                                                                --------     --------     --------
    Total revenues............................................      191          830        1,021
                                                                --------     --------     --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................        -          138          138
  Food and beverage...........................................        -          218          218
  Other departmental costs and deductions......................       -          229          229
  Management fees and other ..................................        -           62           62
  Other property-level expenses...............................       63            -           63
  Depreciation and amortization...............................       75            -           75
                                                                --------     --------     --------
    Total operating costs and expenses........................      138          647          785
                                                                --------     --------     --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................       53          183          236
Minority interest.............................................       11          (38)         (27)
Corporate expenses............................................      (10)           -          (10)
Interest expense..............................................      (97)          (5)        (102)
Interest income...............................................        8           (1)           7
Dividends on Convertible Preferred Securities.................       (7)           -           (7)
Other.........................................................       (6)           -           (6)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE INCOME TAXES.............................      (48)         139           91
Provision for income taxes....................................       (2)          (8)         (10)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................      (50)         131           81
Less: Dividends on preferred stock............................       (5)           -           (5)
Add: Gain on repurchase of Convertible Preferred Securities...        -            -            -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $   (55)      $  131       $   76
                                                                ========     ========     ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $  (.25)      $  .60       $  .35
                                                                ========     ========     ========





                                                                       Twelve Weeks Ended
                                                                          June 18, 1999
                                                                --------------------------------
                                                                              Lease
                                                                Historical  Repurchase   Pro Forma
                                                                ----------   --------    ---------
                                                         (in millions, except per common share amounts)
                                                                                
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $    -       $    559     $ 559
  Food and beverage...........................................       -            277       277
   Other......................................................       -             65        65
                                                                --------     --------     --------
    Total hotel property-level revenues.......................       -            901       901
  Rental income(1)............................................     187           (151)       36
  Net gains on property transactions..........................       4              -         4
  Equity in earnings of affiliates and other..................       4              -         4
                                                                --------     --------     --------
    Total revenues............................................     195            750       945
                                                                --------     --------     --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................       -            128       128
  Food and beverage...........................................       -            197       197
  Other departmental costs and deductions.....................       -            214       214
  Management fees and other...................................       -             52        52
  Other property-level expenses...............................      62              -        62
  Depreciation and amortization...............................      67              -        67
                                                                --------     --------     --------
    Total operating costs and expenses........................     129            591       720
                                                                --------     --------     --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................      66            159       225
Minority interest.............................................       5            (32)      (27)
Corporate expenses............................................      (8)             -        (8)
Interest expense..............................................    (101)            (5)     (106)
Interest income...............................................       8             (1)        7
Dividends on Convertible Preferred Securities.................      (8)             -        (8)
Other.........................................................      (5)             -        (5)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE INCOME TAXES.............................     (43)           121        78
Provision for income taxes....................................      (1)            (8)       (9)
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................     (44)           113        69
Less: Dividends on preferred stock............................       -              -         -
Add: Gain on repurchase of Convertible Preferred Securities...       -              -         -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $  (44)       $   113     $  69
                                                                ========     ========     ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $ (.19)       $   .49     $ .30
                                                                ========     ========     ========






                 UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS





                                                                       Twelve Weeks Ended
                                                                        September 8, 2000
                                                                ------------------------------------
                                                                               Lease
                                                                Historical   Repurchase    Pro Forma
                                                                ----------   ----------    ---------
                                                         (in millions, except per common share amounts)
                                                                                
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $     -      $   554      $   554
  Food and beverage...........................................        -          239          239
  Other.......................................................        -           61           61
                                                                --------     --------     --------
    Total hotel property-level revenues.......................        -          854          854
  Rental income(1)............................................      224         (200)          24
  Net gains on property transactions..........................        1            -            1
  Equity in earnings of affiliates and other..................        5            -            5
                                                                --------     --------     --------
    Total revenues............................................      230          654          884
                                                                --------     --------     --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................        -          137          137
  Food and beverage...........................................        -          193          193
  Other departmental costs and deductions.....................        -          222          222
  Management fees and other...................................        -           47           47
  Other property-level expenses...............................       66            -           66
  Depreciation and amortization...............................       75            -           75
                                                                --------     --------     --------
    Total operating costs and expenses........................      141          599          740
                                                                --------     --------     --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................       89           55          144
Minority interest.............................................        4          (13)          (9)
Corporate expenses............................................       (7)           -           (7)
Interest expense..............................................     (100)          (5)        (105)
Interest income...............................................        9           (1)           8
Dividends on Convertible Preferred Securities.................       (8)           -           (8)
Other.........................................................        -            -            -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE INCOME TAXES.............................      (13)          36           23
Provision for income taxes....................................       (4)           7            3
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................      (17)          43           26
Less: Dividends on preferred stock............................       (5)           -           (5)
Add: Gain on repurchase of Convertible Preferred Securities...        -            -            -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $   (22)      $   43       $   21
                                                                ========     ========     ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $  (.10)      $  .20       $  .10
                                                                ========     ========     ========





                                                                       Twelve Weeks Ended
                                                                        September 10, 1999
                                                                ------------------------------------
                                                                               Lease
                                                                Historical   Repurchase    Pro Forma
                                                                ----------   ----------    ---------
                                                         (in millions, except per common share amounts)
                                                                                
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $    -       $    502     $ 502
  Food and beverage...........................................       -            223       223
   Other.......................................................      -             58        58
                                                                --------     --------     --------
    Total hotel property-level revenues.......................       -            783       783
  Rental income(1)............................................     188           (168)       20
  Net gains on property transactions..........................       -              -         -
  Equity in earnings of affiliates and other..................       5              -         5
                                                                --------     --------     --------
    Total revenues............................................     193            615       808
                                                                --------     --------     --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................       -            130       130
  Food and beverage...........................................       -            178       178
  Other departmental costs and deductions.....................       -            204       204
  Management fees and other...................................       -             42        42
  Other property-level expenses...............................      62              -        62
  Depreciation and amortization...............................      68              -        68
                                                                --------     --------     --------
    Total operating costs and expenses........................     130            554       684
                                                                --------     --------     --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................      63             61       124
Minority interest.............................................       8            (14)       (6)
Corporate expenses............................................      (5)             -        (5)
Interest expense..............................................     (98)            (5)     (103)
Interest income...............................................      10             (1)        9
Dividends on Convertible Preferred Securities.................      (9)             -        (9)
Other.........................................................       -              -         -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE INCOME TAXES.............................     (31)            41        10
Provision for income taxes....................................      (1)             7         6
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................     (32)            48        16
Less: Dividends on preferred stock............................      (1)             -        (1)
Add: Gain on repurchase of Convertible Preferred Securities...       -              -         -
                                                                --------     --------     --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $  (33)       $    48     $  15
                                                                ========     ========     ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $ (.14)        $  .21     $ .07
                                                                ========     ========     ========





                 UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS




                                                                        Sixteen Weeks Ended
                                                                          December 31, 2000
                                                                -------------------------------------
                                                                                Lease
                                                                Historical    Repurchase    Pro Forma
                                                                ----------    ----------    ---------
                                                            (in millions, except per common share amounts)
                                                                                   
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $     -     $    770        $   770
  Food and beverage...........................................        -          420            420
  Other.......................................................        -           90             90
                                                                --------     --------      --------
    Total hotel property-level revenues.......................        -        1,280          1,280
  Rental income(1)............................................      810         (741)            69
  Net gains on property transactions..........................        2            -              2
  Equity in earnings of affiliates and other..................       24            -             24
                                                                --------     --------      --------
    Total revenues............................................      836          539          1,375
                                                                --------     --------      --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................        -          182            182
  Food and beverage...........................................        -          300            300
  Other departmental costs and deductions.....................        -          302            302
  Management fees and other...................................        -           76             76
  Other property-level expenses...............................       84            -             84
  Depreciation and amortization...............................      107            -            107
                                                                --------     --------      --------
    Total operating costs and expenses........................      191          860          1,051
                                                                --------     --------      --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................      645         (321)           324
Minority interest.............................................      (98)          45            (53)
Corporate expenses............................................      (15)           -            (15)
Lease repurchase expense......................................     (207)         207             -
Interest expense..............................................     (140)          (1)          (141)
Interest income...............................................       14           (1)            13
Dividends on Convertible Preferred Securities.................      (10)            -           (10)
Other.........................................................      (11)            -           (11)
                                                                --------     --------      --------
INCOME (LOSS) BEFORE INCOME TAXES.............................      178          (71)           107
Benefit for income taxes......................................      105          (87)            18
                                                                --------     --------      --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................      283         (158)           125
Less: Dividends on preferred stock............................       (5)           -             (5)
Add: Gain on repurchase of Convertible Preferred Securities...        1            -              1
                                                                --------     --------      --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $   279       $ (158)        $  121
                                                                ========     ========      ========
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $  1.26       $ (.71)        $  .55
                                                                ========     ========      ========






                                                                          Sixteen Weeks Ended
                                                                            December 31, 1999
                                                                  -------------------------------------
                                                                                  Lease
                                                                  Historical    Repurchase    Pro Forma
                                                                  ----------    ----------    ----------
                                                              (in millions, except per common share amounts)
                                                                                     
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $    -           $    712         $ 712
  Food and beverage...........................................       -                390           390
   Other.......................................................      -                 86            86
                                                                --------         --------         -----
    Total hotel property-level revenues.......................       -              1,188         1,188
  Rental income(1)............................................     749               (676)           73
  Net gains on property transactions..........................      12                  -            12
  Equity in earnings of affiliates and other..................       4                  -             4
                                                                --------         --------          ----
    Total revenues............................................     765                512         1,277
                                                                --------         --------         -----
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................       -                171           171
  Food and beverage...........................................       -                283           283
  Other departmental costs and deductions.....................       -                285           285
  Management fees and other...................................       -                 66            66
  Other property-level expenses...............................      82                  -            82
  Depreciation and amortization...............................      90                  -            90
                                                                --------         --------         -----
    Total operating costs and expenses........................     172                805           977
                                                                --------         --------         -----
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................     593               (293)          300
Minority interest.............................................    (103)                68           (35)
Corporate expenses............................................     (14)                 -           (14)
Loss on litigation settlement.................................     (40)                 -           (40)
Interest expense..............................................    (132)                (5)         (137)
Interest income...............................................      13                 (1)           12
Dividends on Convertible Preferred Securities.................     (11)                 -           (11)
Other.........................................................      (9)                 -            (9)
                                                                --------         --------         -----
INCOME (LOSS) BEFORE INCOME TAXES.............................     297               (231)           66
Benefit for income taxes......................................      19                 (5)           14
                                                                --------         --------         -----
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS......................     316               (236)           80
Less: Dividends on preferred stock............................      (5)                 -            (5)
Add: Gain on repurchase of Convertible Preferred Securities...      11                  -            11
                                                                --------         --------         -----
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $  322           $   (236)         $ 86
                                                                ========         ========         =====
Basic earnings (loss) per share before extraordinary items
 available to common shareholders.............................  $ 1.43           $  (1.05)         $.38
                                                                ========         ========         =====




                 UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS




                                                                          Fiscal Year Ended
                                                                          December 31, 2000
                                                                -------------------------------------
                                                                                Lease
                                                                Historical    Repurchase    Pro Forma
                                                                ----------    ----------    ---------
                                                            (in millions, except per common share amounts)
                                                                                   
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $     -     $  2,441        $ 2,441
  Food and beverage...........................................        -        1,217          1,217
  Other.......................................................        -          288            288
                                                                --------     --------      --------
    Total hotel property-level revenues.......................        -        3,946          3,946
  Rental income(1)............................................    1,390       (1,239)           151
  Net gains on property transactions..........................        6            -              6
  Equity in earnings of affiliates and other..................       37            -             37
                                                                --------     --------      --------
    Total revenues............................................    1,433        2,707          4,140
                                                                --------     --------      --------
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................        -          578            578
  Food and beverage...........................................        -          894            894
  Other departmental costs and deductions.....................        -          953            953
  Management fees and other...................................        -          236            236
  Other property-level expenses...............................      272            -            272
  Depreciation and amortization...............................      331            -            331
                                                                --------     --------      --------
    Total operating costs and expenses........................      603        2,661          3,264
                                                                --------     --------      --------
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................      830           46            876
Minority interest.............................................      (72)         (33)          (105)
Corporate expenses............................................      (42)           -            (42)
Lease repurchase expense......................................     (207)         207              -
Interest expense..............................................     (433)         (16)          (449)
Interest income...............................................       40           (4)            36
Dividends on Convertible Preferred Securities.................      (32)           -            (32)
Other.........................................................      (23)           -            (23)
                                                                --------     --------      --------
INCOME BEFORE INCOME TAXES....................................       61          200            261
Benefit (provision) for income taxes..........................       98          (92)             6
                                                                --------     --------      --------
INCOME BEFORE EXTRAORDINARY ITEMS.............................      159          108            267
Less: Dividends on preferred stock............................      (20)           -            (20)
Add: Gain on repurchase of Convertible Preferred Securities...        5            -              5
                                                                --------     --------      --------
INCOME BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $   144       $  108        $   252
                                                                ========     ========      ========
Basic earnings per share before extraordinary items
 available to common shareholders.............................  $   .65       $  .49        $  1.14
                                                                ========     ========      ========






                                                                            Fiscal Year Ended
                                                                            December 31, 1999
                                                                  -------------------------------------
                                                                                  Lease
                                                                  Historical    Repurchase    Pro Forma
                                                                  ----------    ----------    ---------
                                                              (in millions, except per common share amounts)
                                                                                     
REVENUE
Hotel property-level revenues
  Rooms.......................................................  $    -           $  2,267       $ 2,267
  Food and beverage...........................................       -              1,129         1,129
   Other.......................................................      -                263           263
                                                                --------         --------         -----
    Total hotel property-level revenues.......................       -              3,659         3,659
  Rental income(1)............................................   1,295             (1,130)          165
  Net gains on property transactions..........................      28                  -            28
  Equity in earnings of affiliates and other..................      14                  -            14
                                                                --------         --------          ----
    Total revenues............................................   1,337              2,529         3,866
                                                                --------         --------         -----
OPERATING COSTS AND EXPENSES
Hotel operating expenses
  Rooms.......................................................       -                542           542
  Food and beverage...........................................       -                832           832
  Other departmental costs and deductions.....................       -                895           895
  Management fees and other...................................       -                209           209
  Other property-level expenses...............................     264                  -           264
  Depreciation and amortization...............................     293                  -           293
                                                                --------         --------         -----
    Total operating costs and expenses........................     557              2,478         3,035
                                                                --------         --------         -----
OPERATING PROFIT BEFORE MINORITY INTEREST, CORPORATE EXPENSES,
 INTEREST, AND OTHER..........................................     780                 51           831
Minority interest.............................................     (82)                (4)          (86)
Corporate expenses............................................     (34)                 -           (34)
Loss on litigation settlement.................................     (40)                 -           (40)
Interest expense..............................................    (430)               (20)         (450)
Interest income...............................................      39                 (4)           35
Dividends on Convertible Preferred Securities.................     (37)                 -           (37)
Other.........................................................     (16)                 -           (16)
                                                                --------         --------         -----
INCOME BEFORE INCOME TAXES....................................     180                 23           203
Benefit (provision) for income taxes..........................      16                (10)            6
                                                                --------         --------         -----
INCOME BEFORE EXTRAORDINARY ITEMS.............................     196                 13           209
Less: Dividends on preferred stock............................      (6)                 -            (6)
Add: Gain on repurchase of Convertible Preferred Securities...      11                  -            11
                                                                --------         --------         -----
INCOME BEFORE EXTRAORDINARY ITEMS AVAILABLE TO COMMON
 SHAREHOLDERS.................................................  $  201           $     13        $  214
                                                                ========         ========         =====
Basic earnings per share before extraordinary items
 available to common shareholders.............................  $  .89           $    .05         $ .94
                                                                ========         ========         =====

-------------
(1)  In December 1999, the Company retroactively changed its method of
     accounting for contingent rental revenues to conform to the Securities and
     Exchange Commission's Staff Accounting Bulletin (SAB) No. 101. As a result,
     contingent rental revenue is deferred on the balance sheet until certain
     revenue thresholds are realized. SAB No. 101 has no impact on full-year
     2000 and 1999 revenues, net income, or earnings per share because all
     rental revenues considered contingent under SAB No. 101 were earned as of
     December 31, 2000 and 1999. The change in accounting principle has no
     effect prior to 1999 because percentage rent relates to rental income on
     our leases, which began in 1999.