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MARRIOTT CFO SAYS HOST MARRIOTT WILL HAVE HEALTHY CASH FLOW AFTER SPLIT

 MARRIOTT CFO SAYS HOST MARRIOTT
 WILL HAVE HEALTHY CASH FLOW AFTER SPLIT
 BOCA RATON, Fla., Oct. 22 /PRNewswire/ -- Stephen F. Bollenbach, executive vice president and chief financial officer of Marriott Corporation (NYSE: MHS), told participants in a bond conference here today that Host Marriott Corporation will have healthy cash flow when it begins operation in mid-1993.
 He said that, on a pro forma basis, if Host Marriott had been a separate company in 1991, it would have had operating cash flow (before interest expense, taxes and working capital changes) of about $307 million, compared to approximately $350 million expected in 1992, a 14 percent increase over 1991.
 On Oct. 5, Marriott announced a plan to divide -- through a special dividend -- its operations into two separate companies. One will be named Marriott International, Inc., and will include Marriott's lodging, food and facilities management, and senior living services operations. The other company -- the present Marriott Corporation renamed Host Marriott Corporation -- will have Marriott's real estate properties as well as its airport and tollroad concessions business. After the special dividend, shareholders will have an identical number of shares in each company.
 "As we developed this transaction," Bollenbach said, "we worked hard to balance the interests of our various stakeholders -- including employees, lenders, property owners, franchisees and shareholders. In our opinion, we have done that. We intend to live up to our obligations, including payment of interest and principal when due, and firmly believe we have structured the transaction to achieve this objective by a comfortable margin," he said.
 Host Marriott will have considerable flexibility in dealing with its financial obligations, Bollenbach added. He explained that strong cash flows from Host/Travel Plazas operations and from the portfolio of prime real estate properties -- including 141 hotels and 16 retirement communities managed by Marriott International -- will help Host Marriott meet its obligations, and can provide the basis for future refinancings. He said proceeds from real estate transactions can be used to augment strong cash flow from operations, and that "even though we do not believe it will be needed," Marriott International will provide a $600 million revolving credit line to Host Marriott through December 1997.
 Bollenbach also underscored the commitment of the Marriott family to making Host Marriott successful. The family will have approximately 25 percent of Host Marriott's common stock. Richard E. Marriott, currently vice chairman of Marriott Corporation, will become chairman of Host Marriott Corporation. J.W. Marriott Jr., now chairman, president and chief executive officer of Marriott Corporation, will hold the same posts in Marriott International. The two Marriotts will be directors of both companies. Bollenbach will be president and chief executive officer of Host Marriott.
 Addressing the conference sponsored by Donaldson, Lufkin & Jenrette, Bollenbach noted that 1992 has not been affected by some of the problems which plagued the travel industry in 1991 -- notably airline bankruptcies and the Gulf War. He said 1992 should be "a considerably better year" for the businesses that will comprise Host Marriott.
 "We expect further growth in 1993, as many of our newer hotels and retirement communities begin to reach stabilized occupancies," Bollenbach said. He added that the Host/Travel Plazas business, which operates food, beverage and merchandise concessions at airports and on tollroads, expects 1992 operating cash flow (before interest expense, taxes and working capital changes) of approximately $120 million, and the recently acquired Dobbs' airport concessions should provide about $20 million of additional annual cash flow going forward.
 On a pro forma basis in mid-1992, Host Marriott would have had approximately $2.9 billion of long-term debt, with an average interest rate of about eight percent and an average maturity of seven years. Bollenbach estimated that annualized interest expense of Host Marriott should be around $225 million. He said about $100 million of capital will be needed annually to maintain the company's real estate properties, and to maintain and grow Host/Travel Plazas.
 Host Marriott would have had total assets of $4.6 billion, on a pro forma basis, at mid-1992. Bollenbach explained that the net property and equipment component would have been about $3.3 billion, of which approximately $2 billion would be assets owned free and clear by Host Marriott.
 "Today, mortgages represent less than $500 million of Host Marriott's total debt," he said, "and there are ample cash-generating assets which can be used for financing of projects under construction and repayment of debt."
 The transaction is conditioned upon, among other things: declaration of the special dividend by Marriott Corporation's board of directors, ratification of the special dividend by a majority of Marriott shareholders, and receipt of an affirmative ruling from the Internal Revenue Service that the special dividend will be tax-free to shareholders.
 Marriott Corporation is a diversified company involved in lodging and contract services.
 -0- 10/22/92
 /CONTACT: Nick Hill, 301-380-7484, or R. A. Rankin Jr., 301-380-7770, both of Marriott/
 (MHS) CO: Marriott Corporation ST: Florida IN: LEI SU:


DC -- DC029 -- 3675 10/22/92 13:47 EDT
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Date:Oct 22, 1992
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