Host Marriott 2004 Annual Report - Host Hotels & Resorts, Inc

MANAGEMENT’S REPORT
Management is responsible for the integrity and objectivity of
the consolidated financial statements and other financial information
presented in this annual report. In meeting this responsibility,
the company maintains a highly developed system of
internal controls, policies, and procedures, and continually
evaluates the adequacy and effectiveness of its control system.
Management believes this system provides reasonable assurance
that transactions are properly authorized and recorded to
adequately safeguard the company’s assets and to permit
preparation of the financial statements in accordance with
accounting principles generally accepted in the United States.
The consolidated financial statements have been audited by
KPMG LLP, independent public accountants. Their report
expresses an informed judgment as to whether management’s
consolidated financial statements present fairly the company’s
financial position in conformity with accounting principles
generally accepted in the United States.
The Board of Directors pursues its responsibility for the
financial statements through its Audit Committee, composed of
three directors not otherwise employed by the company. The
committee meets a minimum of four times during the year with
the independent public accountants, representatives of management
and the internal auditors to review the scope and
results of the internal and external audits, the accounting principles
applied in financial reporting, and financial and operational
controls. The independent public accountants and
internal auditors have unrestricted access to the Audit
Committee with or without the presence of management.
W. Edward Walter
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining
adequate internal control over financial reporting for the
company. Internal control over financial reporting refers to
the process designed by, or under the supervision of, our
Chief Executive Officer and Chief Financial Officer, and
effected by our board of directors, management and other
personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles, and includes those policies
and procedures that:
(1) Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and
dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made
only in accordance with authorizations of management and
directors of the company; and
(3) Provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition
of the company’s assets that could have a material
effect on the financial statements.
Internal control over financial reporting cannot provide
absolute assurance of achieving financial reporting objectives
because of its inherent limitations. Internal control over
financial reporting is a process that involves human diligence
and compliance and is subject to lapses in judgment and
breakdowns resulting from human failures. Internal control over
financial reporting also can be circumvented by collusion or
improper management override. Because of such limitations,
there is a risk that material misstatements may not be prevented
or detected on a timely basis by internal control over financial
reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is
possible to design into the process safeguards to reduce,
though not eliminate, this risk.
Management has used the framework set forth in the
report entitled “Internal Control—Integrated Framework”
published by the Committee of Sponsoring Organizations
(“COSO”) of the Treadway Commission to evaluate the
effectiveness of the company’s internal control over financial
reporting. Management has concluded that the company’s
internal control over financial reporting was effective as of
the end of the most recent fiscal year. KPMG LLP has issued
an attestation report on management’s assessment of the
company’s internal control over financial reporting.
Christopher J. Nassetta
PRESIDENT AND CHIEF EXECUTIVE OFFICER
W. Edward Walter
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
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HOST MARRIOTT 2004