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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) AUGUST 9, 1995
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HOST MARRIOTT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-5664 53-0085950
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
10400 FERNWOOD ROAD, BETHESDA, MARYLAND 20817
(ADDRESS OF PRINCIPAL EXECUTION 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 August 9, 1995, the Registrant announced that it will spin off its
airport and tollroad concessions business through a special dividend. A copy of
the news release announcing the spin off is attached as an exhibit to this
current report.
Item 7. Exhibit
(c) Exhibit
(99) News Release dated August 9, 1995.
SIGNATURE
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/ CHRISTOPHER G. TOWNSEND
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Christopher G. Townsend
Senior Vice President and
Corporate Secretary
Date: August 9, 1995
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Exhibit 99
HOST MARRIOTT CORPORATION TO SPIN OFF
AIRPORT AND TOLLROAD CONCESSIONS BUSINESS
BETHESDA, MD, Aug. 9, 1995 -- Host Marriott Corporation today announced a plan
to divide, through a special dividend, its operations into two separate
companies.
One company will include the lodging real estate business and retain the
name Host Marriott Corporation. The other company, to be named Host Marriott
Services Corporation, will include the food, beverage and retail concessions
businesses currently conducted by the Host Marriott Operating Group at airports,
on tollroads and at sports and entertainment attractions.
"Our real estate operations and our food, beverage and retail concessions
are two very different businesses, and these two companies have virtually no
overlap in their operations," said Richard E. Marriott, chairman of Host
Marriott Corporation. "Separating the two companies will have strategic and
economic benefits for both, allowing each to reach its full potential. In
addition, this action will allow investors to make more focused investment
decisions based on the unique attributes of each business."
Mr. Marriott said that, after the spin-off, Host Marriott Corporation
would continue its successful strategy of acquiring full service hotels, which
remain available at prices well below replacement cost. "We believe the best
opportunity for capital appreciation and return on investment is in the full
service segment. The company's Earnings Before Interest Expense, Taxes,
Depreciation, Amortization and other non-cash items (EBITDA) from its hotels in
the first half of 1995 is up 29% over the same period last year," he said. "With
little new full service hotel supply coming on line, and our strategic alliance
with Marriott International adding considerable value to the properties we
acquire, we see continued strong revenue and cash flow growth."
Host Marriott Services Corporation will be the nation's leading operator
and developer of food, beverage and retail locations at airports, on tollroads
and at sports and entertainment attractions.
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"We are very excited about the prospects for Host Marriott Services
Corporation as an independent company," said William W. McCarten, president of
the Host Marriott Operating Group. "We have a significant presence in nearly all
of the largest airports and tollroads in the United States. That leadership
position, along with our experience and expertise, is providing increasing
access to attractive opportunities, such as our recent contract award at
Schiphol International Airport in Amsterdam."
"We have a strong platform for future growth, both domestically and
internationally. A total focus on the concessions business, together with the
continued commitment of the Marriott family, should further strengthen our new
company's market position," he said.
Mr. McCarten, who will be president and chief executive officer of Host
Marriott Services Corporation, added, "We've developed new concessions concepts
that, coupled with our high levels of service and operational excellence, are
creating new levels of customer satisfaction and economic returns."
The special dividend will provide Host Marriott shareholders with one
additional share in Host Marriott Services Corporation for every five shares
held in Host Marriott Corporation. Host Marriott Services Corporation will apply
for a listing on the New York Stock Exchange, where Host Marriott Corporation is
traded.
The transaction is conditioned upon declaration of the special dividend by
Host Marriott Corporation's board of directors and receipt of an affirmative
ruling from the Internal Revenue Service that the special dividend will be
tax-free to shareholders. Once these conditions are met, the special dividend is
expected to be distributed by the end of 1995 or in early 1996.
Host Marriott Corporation and Host Marriott Services Corporation will be
run by separate management teams. The existing management of Host Marriott
Corporation will remain in place, while Host Marriott Services Corporation will
be led by Mr. McCarten and managed by executives of the current Host Marriott
Operating Group.
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The two companies will have separate boards of directors. Richard E.
Marriott will remain chairman of the board of Host Marriott Corporation. William
J. Shaw, executive vice president of Marriott International, Inc. and president
of the Marriott Service Group, will serve as chairman of the board of Host
Marriott Services Corporation while retaining his positions at Marriott
International. Richard E. Marriott and J.W. Marriott, Jr., his brother and the
chairman and president of Marriott International, Inc., will serve as directors
of both companies.
Host Marriott Corporation currently owns 100 lodging properties operated
primarily under Marriott brand names. On a pro forma basis, if it had been a
separate company without the concessions businesses in 1994, it would have had
annual revenues of approximately $360 million and EBITDA of approximately $268
million.
Host Marriott Services Corporation, upon distribution of the special
dividend, will have operations at over 70 domestic and international airports,
on 14 tollroads (including over 95 travel plazas) and at more than 35 tourist
attractions, stadiums and arenas. On a pro forma basis, as a separate company in
1994, Host Marriott Services Corporation would have had annual revenues of
approximately $1.1 billion and EBITDA of approximately $108 million. The Company
will retain the $405 million of debt currently owed by the Host Marriott
Operating Group. That debt consists primarily of $400 million of bonds due 2005,
issued earlier this year.
Latham & Watkins, James D. Wolfensohn Incorporated and American Appraisal
Associates are acting as advisors to Host Marriott Corporation on the proposed
transaction.
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