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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) January 12, 1999
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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)
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Registrant's Telephone Number, Including Area Code (301) 380-9000
(Former Name or Former Address, if changed since last report.)
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FORM 8-K
ITEM 5. OTHER EVENTS
On December 29, 1998 Host Marriott Corporation distributed Crestline shares to
shareholders of record as of 5:00pm (EST). Host Marriott believes that the fair
market value of the Crestline shares on December 29, 1998 was $15.30 per share
(a distribution value of $1.53 per Host Marriott share) which is the value
determined by the Host Marriott board of directors. A letter addressed to
shareholders providing further information regarding the amount of taxable
income recognized as a result of this distribution is included as an exhibit to
this filing.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Letter to Shareholders
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 duly authorized.
HOST MARRIOTT CORPORATION
By: /s/ Donald D. Olinger
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Donald D. Olinger
Senior Vice President and
Corporate Controller
Date: January 14, 1999
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HOST MARRIOTT CORPORATION
10400 FERNWOOD ROAD
BETHESDA, MARYLAND 20817
301-380-9000
TO HOST MARRIOTT SHAREHOLDERS:
On December 29, 1998, Richard E. Marriott, chairman of Host Marriott
Corporation ("Host Marriott") and Bruce D. Wardinski, chairman of Crestline
Capital Corporation ("Crestline"), wrote to you concerning the distribution of
Crestline shares to Host Marriott stockholders of record at 5:00 p.m. (EST). The
letter described the terms of the Crestline distribution (the "Crestline
Distribution") and indicated that the Crestline Distribution would be taxable to
you as income in 1998. This letter provides further information regarding the
amount of taxable income you recognized in the Crestline Distribution.
A U.S. shareholder must include the fair market value of the Crestline
Distribution on December 29, 1998 in gross income as ordinary income. The fair
market value of the Crestline Distribution will equal the sum of (i) the fair
market value (on December 29, 1998) of the Crestline shares received in the
Distribution, plus (ii) the amount of any cash received in lieu of fractional
shares of Common Stock.
The following describes Host Marriott's determination of the fair market value
of Crestline shares. U.S. federal income tax law does not provide definitive
guidance regarding the determination of the fair market value of publicly traded
securities (which the Crestline shares were on the Distribution Date). Several
courts have held that the fair market value of such securities for federal
income tax purposes equals the average of the high and low sales prices of such
securities on the date of determination. As described in the proxy materials
sent in December, 1998, regardless of the value that Host Marriott determines is
appropriate for the Crestline Distribution, there can be no assurance that the
IRS will not seek to establish a different fair market value.
As you may be aware, shares of Crestline did not trade on the New York Stock
Exchange on December 29, 1998. Host Marriott believes that the fair market value
of the Crestline shares on December 29, 1998 was $15.30 per share (a
distribution value of $1.53 per Host Marriott share), which is the value that
the Host Marriott Board placed upon the Crestline shares (which valuation was
based, in part, upon advice received by Host Marriott from outside financial
advisors). This valuation is consistent with the average of the high and low
sales prices of Crestline shares on December 30, 1998, the first day of actual
trading on the New York Stock Exchange, which also was approximately $15.30. In
early February 1999, you will be sent a 1099-DIV, which will reflect the amount
of your taxable income based on this valuation.
Your basis in your Crestline common stock will be equal to the amount of
taxable income that you recognize (that is, $15.30 per share). Your basis in
your Crestline common stock does not depend upon your basis in your Host
Marriott common stock. In addition, the distribution of Crestline common stock
will not affect your basis in your Host Marriott common stock.
We recommend that you consult with your tax advisors regarding the particular
federal, foreign, state and local tax consequences of the Crestline Distribution
to you.
Sincerely,
Christopher G. Townsend
Senior Vice President, General Counsel and
Corporate Secretary
January 12, 1999
