Welcome to the Host Hotels & Resorts Incorporated fourth quarter 2008 earnings conference call. Today’s call is being recorded. At this time for opening remarks and introductions I would like to turn the call over to the Executive Vice President, Mr. Greg Larson.

Welcome to Host Hotel & Resorts fourth quarter earnings call. Before we begin I’d like to remind everyone that many of the comments made today are considered to be forward-looking statements under federal securities laws. As describe in our filings with the SEC these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed and we are not obligation to publically update or revise these forward-looking statements. Additionally, on today’s call we will discuss certain non-GAAP financial information such as FFO, adjusted EBITDA and comparable hotel results. You can find this information together with the reconciliation to the most directly comparable GAAP information in today’s earnings press release, in our 8K filed with the SEC and in our website at www.HostHotels.com. This morning Ed Walter, our President and Chief Executive Officer will provide a brief overview of our fourth quarter results and then will describe the current operating environment as well as the company’s outlook for 2009. Larry Harvey, our Chief Financial Officer will then provide greater detail on our fourth quarter results including regional and market performance. Following their remarks we will be available to respond to your questions.

Since we last spoke in early October the globally economy has deteriorated markedly which had a material effect on our business. Since the underlying economic and financial problems are continuing in 2009 we expect to face a very difficult operating environment for much of the year. However, we are well positioned to face these challenges and to take advantages of the opportunities when the economy eventually improves. Before we offer some insights about 2009 let me spend a few moments on our 2008 results and trends. Fourth quarter RevPAR for our comparable hotels decreased 9.4% driven by a decline in occupancy of 4.5 percentage points and a decrease in average room rate of 3.3%. For the full year comparable RevPAR decreased 2.6% as a result of the 2.4 percentage point decrease in occupancy which was partially offset by a seven tenths increase in average rate. Food and beverage [inaudible] hotels decreased 10% for the quarter and 2.9% for the year. Overall comparable revenues decreased over 9% for the quarter and 2.6% for the year. Aggressive cost cutting in light of the weak operating environment limited the decline in comparable hotel adjusted operating profit margins to just 290 basis points for the fourth quarter and 140 basis points for the year and resulted in adjusted EBITDA for hotel fees of $414 million for the quarter and $1.365 billion for the full year 2008. Our FFO per diluted share for the fourth quarter was $0.53 which exceed the consensus estimates by $0.06. For the year FFO per share was $1.74. During the first three quarters of the year we experienced a definitive decline in demand as a result of the economic slowdown. Through that period transient average daily rate weakened as a function of business mix shift rather than as a result…

Let me start by giving you some detail on our comparable hotel RevPAR results. Looking at the portfolio based on property types, our airport hotels performed the best during the fourth quarter with RevPAR down 7.9%. RevPAR for our downtown hotels fell 8.8% while RevPAR in suburban hotels decreased by 9.2%. Our resort conference hotel RevPAR decreased 12.8% as our two hotels in Maui continued to struggle due to reduced airlift and overall weak demand. When you exclude the two Hawaii hotels from the resort conference property type the RevPAR for the fourth quarter declined only 7.2%. For the full year our urban and airport hotels performed the best with RevPAR declining by 2.2%. RevPAR for our suburban hotels decreased 2.9% and our resort conference hotels decreased 4.3%. Turning to our regional results, the south central region performed exceptionally well with RevPAR growth of 7.2% as our Houston properties benefited from strong group demand generated by Hurricane Ike recovery efforts and renovation in the fourth quarter 2007. Our San Antonio properties also performed well as group business was strong and the property benefited from renovations in the fourth quarter of 2007 as well. Our DC metro region RevPAR declined only 4.2% as group business held up better than in other markets although there was lower transient demand in the suburbs. We expect that downtown DC hotels to have a strong first quarter in 2009 given the transition with the new administration. RevPAR for the mid Atlantic region increased 8.5%. Our New York properties experienced a RevPAR decline of 8.9% as average daily rates fell approximately 4.7% and group demand declined. In addition, business and leisure transient demand fell. As we expected the Philadelphia market outperformed in the fourth quarter on a relative basis as RevPAR decreased only 4% due to…

(Operator Instructions) Your first question comes from David Loeb – Robert W. Baird & Co., Inc. David Loeb – Robert W. Baird & Co., Inc.: Larry, that was very helpful about the bonds and actually answered two of my three questions. We’re assuming that amortization in your interest and we’re still coming up a bit short. Can you talk about what your LIBOR assumptions are and what else might be affecting your interest balances?

You mean as it relates to our projection for 2009? David Loeb – Robert W. Baird & Co., Inc.: Yes, exactly.

I would imagine our LIBOR assumption is [inaudible] so it’s probably in the .5% to 1%, no higher than that. David Loeb – Robert W. Baird & Co., Inc.: Then there is something else wrong in what we’re doing. Is there anything else in interest that is unusual?

You’re short of our number? You’re counting the $30 million in? David Loeb – Robert W. Baird & Co., Inc.: We’re counting the $30 million and we’re still coming up short of your number.

Why don’t you circle back with us offline and we’ll see if we can help you. David Loeb – Robert W. Baird & Co., Inc.: As long as there’s nothing big in there then that’s fine we’ll figure it out and we’ll be happy to circle back. But, the $30 million clearly is a big entry and that’s what we’ve got.

Your next question comes from Napoleon Overton – Morgan, Keegan & Company, Inc. Napoleon Overton – Morgan, Keegan & Company, Inc.: A couple of things, how much of the 3.75% exchangeable notes remain outstanding?

There’s $400 million of that issue that remains outstanding today. Napoleon Overton – Morgan, Keegan & Company, Inc.: And that’s puttable to the company in 2010, correct?

That’s correct. Napoleon Overton – Morgan, Keegan & Company, Inc.: In addition to that, what other debt maturities, what are total 2010 debt maturities?

That’s the only debt that comes due in 2010. Napoleon Overton – Morgan, Keegan & Company, Inc.: I believe you own two Hyatt Regencies in Boston, which one of those was the sale property?

The one that we sold is the one that was located in downtown Boston. We still own the one that’s located in Cambridge. Napoleon Overton – Morgan, Keegan & Company, Inc.: Would you be able to share with us anything to give us the perspective on the valuation of that sale in terms of EBITDA the property generated last year?

We sold the property to a private buyer who one of the requirements of the sale is that we provide very limited exposure with respect to it. Maybe a couple of metrics I can give you though is first off the property has 495 rooms. So, the sale price represented $227,000 a key. The other thing I would broadly say is that everyone should feel comfortable in look at the multiple we sold if for based on our expectation for 2009 for the asset, it was sold at a premium to our current EBITDA multiple.

Your next question comes from Celeste Brown – Morgan Stanley. Celeste Brown – Morgan Stanley: Two questions, first just to clarify on your dividend, hopefully they won’t be worse but if things are worse then what you’re currently expecting could the dividend payment go below the $0.30 to $0.35 for the fourth quarter? Then, my second question relates to the asset purchases in the European JV, it wasn’t clear to me in the press release as to whether or not you wouldn’t be closing on those in the future or is that deal off the table?

Let’s deal with the dividend first. I would say that obviously the final result for 2009 could have some affect on that number but I think probably unless we strayed radically from the estimates we provided we wouldn’t expect to fall short of the low end of that range, so not below the $0.30 level. Then, as it relates to the European transaction, I think at this point because of some confidentiality requirements that exist with respect to that transaction we’re really frankly not at liberty to say a lot about that today. But, what I would say at this point is that the contract is terminated and I would generally view it as unlikely that we would be closing on that transaction.

Your next question comes from William Truelove – UBS. William Truelove – UBS: Just a couple of questions, first on the sale of the Hyatt the $113 million is that gross proceeds or net proceeds after any debt that was associated with the property?

There was no debt on the property so that would be a net proceeds after transaction costs. William Truelove – UBS: Second question, the San Diego Marriott Marina which has I believe has some mortgage debt coming due this year, can you give us an update on that?

That property has $175 million in mortgage debt that comes due in the middle of the year and I think it’s a July 1st date and we’re in the process right now of having fairly comprehensive discussions with a lender regarding the refinancing of that property. We don’t have anything to announce yet but I would say we continue to make good progress on refinancing that asset. William Truelove – UBS: My third question is more of an operation kind of question especially at your luxury properties, I’m sure as you went in to this downturn you had multiple stages like stage one through stage three of cost cutting, where are we? I assume we’re on stage three, are we now adding stages four and five with the operators? And, how willing are they to impact customer service because everything that we’re hearing is that they’re trying to do things around the edges. Are they willing to do more upfront customer impactful cost cutting things?

Bill, I would say that on some aspect we’ve blow page stages one, two, three, four and five and I’ve been suggesting to our asset management team we need to be contemplating six and seven. Some of that is in jest and some of that is in truth. The process that you go through while it’s nice to be able to describe it in different stages the reality is that the worse the operations get at a particular property the more things that you try to do. Certainly as you look at the luxury end of the portfolio it’s getting hit fairly hard. It underperformed in the fourth quarter and for the full year. It is clearly underperforming at the beginning of this year, there’s a whole host of reasons that I think many of you have already highlighted in your various analyst reports. Having met and talked with those Ritz Carltons and Four Seasons about this, I think they’re trying to be as thoughtful as they can about trying to balance the need to maintain their reputation for a luxury hotel and at the same time recognize that both of us need the hotel to perform at some level and we can’t just blindly maintain a service level with our recognizing what that means to the bottom line. So, I think in the case of both of those luxury operators that we work with, they are looking for ways to cut. I think they have shown flexibility with respect to brand standards as the other owners have and they’re being as thoughtful as they can. Clearly, their margin declines are going to be larger than what we would see for the whole portfolio so based on what we’ve seen and the discussion that we’ve had I think the level of margin decline for that quality of a hotel will probably makes sense in light of the RevPAR decline but, it shouldn’t be radically worse than what we would be seeing in our other full service hotels.

Your next question comes from William Crow – Raymond James. William Crow – Raymond James: A couple of question there, first of all Ed can you talk about your view towards future exchangeable note repurchases and how you weigh that against the common stock at $4 a share? Along the same lines have you considered at all or done any homework on potentially buying back or purchasing in the open market other peers exchangeable notes or debt?

As it relates to the exchangeable taking advantage of the market in the fourth quarter buying that back at the discount that we were able to achieve was a great transaction. It was an effective use of our cash, the return on it is fairly high and it obviously was helpful to the balance sheet too. I think that’s the sort of opportunity that we will continue to be alert to over the course of the next 12 months as it relates to our existing exchangeable but it will end up coming down to an assessment of what the pricing is on that, what’s available in that marketplace and what our cash resources look like. I think as it relates to buying our stock I couldn’t agree more with what you’re really suggesting which is our stock is an incredible bargain but having said that I’d go back to part of what I said in my prepared comments which is in general visibility is pretty ugly right now. Until we have a better feeling for when the recovery is going to start and how strong that recovery is going to be I think that the most prudent thing for us to do is to really focus on making certain that we have all of our debt maturities covered. I feel very good about the progress that we’re making on that front and I feel very good about the progress we’re making in general at finding additional sources of debt and ultimately on the fact that at some point I’d like to think we’ll see some additional asset sales happen. But, at this stage to think about buying back your stock in this environment without having a little better visibility about the future I just don’t think that would be a prudent step for us to take today. As it relates to investing in other company’s converts, if I was going to buy any convert I would buy ours because if I was going to buy anyone’s stock I’d buy ours. If I’m going to invest in any company I’m going to invest in ours. So, at this stage again, until the market were to change in a more positive way than what we’re seeing right now, I think our cash will be focused inwardly. William Crow – Raymond James: Next question, the sale of the Hyatt in Boston, it wasn’t laden with debt so how did the buyer, if you could take us inside that perspective, how did they finance the acquisition?

I don’t know if we’re completely privy to exactly how they structured their financing of the asset. Our sense that at least for the part of the transaction that we were privy to was that they bought it all cash. I would assume that they’re going to find financing from some other source later. But, our sense was it was a cash purchase. William Crow – Raymond James: Final question here, as you’re dealing with meeting planners on future group bookings, are you getting increased pressure to reduce or eliminate cancellation or attrition fees, penalties based on kind of the current environment, especially from financial services firms?

I think you’re starting to see that happen. Some of that is happening on some of the business that’s being discussed for 2009 right now because people will begin talking about booking an event and then not necessarily wanting to sign up for a significant cancellation fee when they’re uncertain as to whether they’re going to have it. I guess what I would say is the reaction to that will vary meaningfully from one hotel to another. If you’re talking about a time period of the year where you’re very confident based on historical results that you’re going to be able to do business at that time then you may be reluctant to allow the rooms to be booked or the meeting space to be booked by somebody who’s not willing to stand behind the commitment. On the other hand, if you’re talking about somebody who’s interested booking business during a need period where frankly we don’t have another great solution for that particular time, say it’s a weekend or something like that then I think you’d find that the operator would be a bit more flexible in their approach to cancelation fees. It’s clearly becoming a topic and I think it’s something – and not dissimilar frankly to what we saw back in 2001 and 2002. As the balance of power shifts a little bit in this negotiation from us as the seller to the customer whose the buyer, you tend to see that some of these things start to slide their way a little bit. William Crow – Raymond James: I know I said that was my last question but your answer gave me another thought which is what’s going on with 2010 group bookings? Are you seeing cancellations this far in advance or are people kind of just sitting back saying, “We’ll see what the economy does.”

I don’t think Bill that we’re seeing a trend of cancellations or certainly not to the degree that we’ve seen them over the last four or five months related to 2009. What we are generally seeing across the market is a slowness in bookings and we were talking about that last year that we were generally finding that during the course of the year that we were not booking at the same rate that we had in the prior year and I think that would also apply to 2010 right now.

Your next question comes from Joseph Greff – J. P. Morgan. Joseph Greff – J. P. Morgan: Most of my topics have been addressed except for one small one, your cap ex guidance for ’09 how much of that is related to maintenance?

I would probably say about half of that is what we would traditionally think of as maintenance cap ex and then the other half by definition would be larger projects and the completion of the repositioning items that we had started last year. Joseph Greff – J. P. Morgan: At that level, how long could you have that level of maintenance capital before it starts to impact things? I mean, could you be at that level for two or three years?

I think we could easily be at that level for two to three years. That’s one of the points I was trying to make in our comments is we really feel good about the money that we invested in our portfolio over the last three years and just the comprehensive nature of the work we did has truly positioned our portfolio well by asset by asset and in each of their individual markets. So, I think we would be able to run at that type of a level without any problems for a couple of years.

Your next question comes from Felicia Hendrix – Barclays Capital. Felicia Hendrix – Barclays Capital: A few basic questions, just the sensitivity that you gave in place of guidance just wondering if things actually deteriorated even further than you anticipate can we just take the kind of every one percentage point of RevPAR to $20 million EBITDA which is implied by your 12% to 16% sensitivity or does it get more accelerated after that?

I would guess that if you were talking about a point or two of additional RevPAR decline that that’s probably as good a metric as we could provide right now. There is some point where it becomes difficult to mitigate the margin decline when you begin to have even more excessive RevPAR decline but I think in the realm of another couple of points or so I think that clearly would work. Felicia Hendrix – Barclays Capital: And it would flow through to FFO in the same way, correct?

I think if you just look at what the EBITDA decline would be then once you do the math on the FFO it should track. There’s nothing else in that analysis Felicia that’s really moving because our interest expense shouldn’t really be changing so it’s just EBITDA that’s changing in that equation. Felicia Hendrix – Barclays Capital: Could you just give us guidance for depreciation or corporate expense for ’09?

The corporate admin will be up because in the numbers we have targeted corporate admin up about $10 million and the bulk of that is from restricted stock in ’08. We’ve got very little restrictive stock so now in our forecast we have it at the targeted level. From a standpoint of depreciation we’ve got about $600 million this year, it’s up slightly versus $580 so that’s about a $20 million difference.

Felicia I’d add one thing to Larry’s comments there, if you looked at the absolute level of our overhead leaving out the sort of year-over-year issue that you can run in to because of bonuses and restrictive stock really at historically lows this year for the company what you’d find is we’ve actually reduced our admin year-over-year from ’08 to ’09 by about 10% and then depending upon how we perform those numbers will be adjusted at the end of the year. But, net/net if you look at what we’re actually carrying from an overhead level, it’s down compared to last year.

Our final question comes from Smedes Rose – Keefe, Bruyette & Woods. Smedes Rose – Keefe, Bruyette & Woods: You’ve answered basically all of our questions but I’m just wondering kind of off Felicia’s question about things being possibly worse or maybe better could you just talk a little bit now I guess kind of what are your top four or five markets that you are going to get most of your earnings out of given that RevPAR has performed badly across all markets but some worse than others? What are kind of the key needle movers for you for this year?

I think if you look at the markets where we have the largest ownership in, it typically shows up as Washington DC which I think is the market that’s going to do well. You have Florida broadly defined which I think we’re concerned at least some of those markets will see some softness this year. You have New York which I think will be one of the underperforming markets for the year. I think those are really the big three. Atlanta would be the fourth and I think Atlanta will be a middle of the pack market. I think there are a couple of other markets that we think will do better. We’re sort of anticipating some better performance out of San Francisco we have a fairly sizeable presence there and we’re also feeling a bit better about Chicago this year. There’s a fairly good group calendar in Chicago. We also suffered from some renovation effect last year and we’ll have less of that going on this year so Chicago is one of the markets that we’re counting on for better performance. Smedes Rose – Keefe, Bruyette & Woods: On your dividend you mentioned that it reflects capital gains and some carryovers from 2008 so is it fair to say that with the guidance you’ve given you’re not really looking for any taxable income for this year?

We talked a little bit about that earlier but I would generally say that expected capital income affect on this year’s dividend at the levels we’ve suggested today is relatively minor.

That does conclude our Q&A for today. I will turn the call back over to Mr. Walter.

Thank you everyone for joining us for the call today. We appreciate the opportunity to talk about our results for 2008 and also discuss what we see coming at us in 2009. We look forward to giving you an update on how first quarter played out and what are thoughts are going forward in late April. Thanks.

Thank you ladies and gentlemen. Once again, that does conclude today’s conference. We thank you for your participation and have a wonderful day.