7.	Equity of Host Inc. and Capital of Host L.P.

Equity of Host Inc.

Equity is allocated between controlling and non-controlling interests as follows (in millions):


	Equity of Host Hotels & Resorts, Inc.			Non-redeemable non-controlling interests		Total equity			Redeemable non-controlling interests
Balance, December 31, 2010	$	6,303		$	29	$	6,332		$	191
Net loss		(32	)		—		(32	)		—
Issuance of common stock		423			—		423			—
Other changes in ownership		66			9		75			(76	)
Other comprehensive income (note 9)		6			—		6			—

Balance, September 9, 2011	$	6,766		$	38	$	6,804		$	115


	Equity of Host Hotels & Resorts, Inc.			Non-redeemable non-controlling interests		Total equity			Redeemable non-controlling interests
Balance, December 31, 2009	$	6,189		$	22	$	6,211		$	139
Net loss		(124	)		—		(124	)		(2	)
Issuance of common stock		158			—		158			—
Redemption of preferred stock		(101	)		—		(101	)		—
Other changes in ownership		(23	)		11		(12	)		17
Other comprehensive loss (note 9)		(3	)		—		(3	)		—

Balance, September 10, 2010	$	6,096		$	33	$	6,129		$	154

Capital of Host L.P.

As of September 9, 2011, Host Inc. is the owner of approximately 98.5% of Host L.P.’s common OP units. The remaining 1.5% of the common OP units are held by third party limited partners. Each OP unit may be redeemed for cash or, at the election of Host Inc., Host Inc. common stock, based on the conversion ratio of 1.021494 shares of Host Inc. common stock for each OP unit.

In exchange for any shares issued by Host Inc., Host L.P. will issue OP units to Host Inc. based on the applicable conversion ratio. Additionally, funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P.

Capital is allocated between controlling and non-controlling interests as follows (in millions):


	Capital of Host L.P.			Non-controlling interests		Total Capital			Limited Partnership Interests of Third Parties
Balance, December 31, 2010	$	6,302		$	29	$	6,331		$	191
Net loss		(32	)		—		(32	)		—
Issuance of common OP units		423			—		423			—
Other changes in ownership		67			9		76			(76	)
Other comprehensive income		6			—		6			—

Balance, September 9, 2011	$	6,766		$	38	$	6,804		$	115

Balance, December 31, 2009	$	6,187		$	22	$	6,209		$	139
Net loss		(124	)		—		(124	)		(2	)
Issuance of common OP units		158			—		158			—
Redemption of preferred OP units		(101	)		—		(101	)		—
Other changes in ownership		(22	)		11		(11	)		17
Other comprehensive loss		(3	)		—		(3	)		—

Balance, September 10, 2010	$	6,095		$	33	$	6,128		$	154

Issuance of Common Stock

On April 21, 2011, we entered into a Sales Financing Agreement with BNY Mellon Capital Markets, LLC, through which Host Inc. may issue and sell, from time to time, shares having an aggregate offering price of up to $400 million. The sales will be made in “at the market” offerings under Securities and Exchange Commission (“SEC”) rules, including sales made directly on the NYSE. BNY Mellon Capital Markets, LLC is acting as sales agent. Host Inc. may sell shares of common stock under its program from time to time based on market conditions, although it is not under an obligation to sell any shares. During the third quarter 2011, we issued approximately 50 thousand shares of common stock under the program at an average price of $16.61 per share, for net proceeds of approximately $1 million. During 2011 (including sales under our prior “at the market” program), we have issued 16.7 million shares at an average price of $17.44 per share, for net proceeds of $289 million.

Dividends/Distributions

On September 19, 2011, Host Inc.’s Board of Directors declared a dividend of $0.04 per share on its common stock. The dividend is payable on October 17, 2011 to stockholders of record as of September 30, 2011. Accordingly, Host L.P. will make a distribution of $0.04085976 per unit on its common OP units based on the current conversion ratio.