Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Consolidated Portfolio of Hotels by Location

As of December 31, 2012, our consolidated portfolio of hotels is located in the following countries:

	Hotels
United States		104
Australia		1
Brazil		1
Canada		3
Chile		2
Mexico		1
New Zealand		7
Total		119

Historical Cost and Redemption Values for the Non-Controlling Interests

The table below details the historical cost and redemption values for the non-controlling interests:

	As of December 31,
	2012		2011
OP units outstanding (millions)		9.9		10.5
Market price per Host Inc. common share	$	15.67	$	14.77
Shares issuable upon conversion of one OP unit		1.021494		1.021494
Redemption value (millions)	$	158	$	158
Historical cost (millions)	$	96	$	102
Book value (millions) (1)	$	158	$	158

(1) The book value recorded is equal to the greater of the redemption value or the historical cost.

Components of Total Accumulated Other Comprehensive Income in the Balance Sheets

The components of total accumulated other comprehensive income (loss) in the balance sheets are as follows (in millions):

	As of December 31,
	2012			2011
Gain on forward currency contracts	$	5		$	11
Loss on interest rate swap cash flow hedges		(4	)		(3	)
Foreign currency translation		11			(9	)
Total accumulated other comprehensive income (loss)	$	12		$	(1	)

European Joint Venture

Consolidated Portfolio of Hotels by Location

As of December 31, 2012, the Euro JV hotels are located in the following countries:

	Hotels
Belgium		3
France		5
Germany		1
Italy		3
Poland		1
Spain		2
The Netherlands		2
United Kingdom		2
Total		19

HOST HOTELS & RESORTS, INC.

Earnings (Loss) Per Common Share (Unit)

Host Inc. Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of Host Inc. common stock outstanding. Diluted earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders, as adjusted for potentially dilutive securities, by the weighted average number of shares of Host Inc. common stock outstanding plus other potentially dilutive securities. Dilutive securities may include shares granted under comprehensive stock plans, other non-controlling interests that have the option to convert their limited partnership interests to common OP units and convertible debt securities. No effect is shown for any securities that are anti-dilutive.

	Year ended December 31,
	2012			2011			2010
	(in millions, except per share amounts)
Net income (loss)	$	63		$	(16	)	$	(132	)
Less: Net (income) loss attributable to non-controlling interests		(2	)		1			2
Net income (loss) attributable to Host Inc.		61			(15	)		(130	)
Less: Dividends on preferred stock		—			—			(4	)
Issuance costs of redeemed preferred stock (1)		—			—			(4	)
Net income (loss) available to common stockholders	$	61		$	(15	)	$	(138	)
Diluted income (loss) available to common shareholders	$	61		$	(15	)	$	(138	)
Basic weighted average shares outstanding		718.2			693.0			656.1
Diluted weighted average shares outstanding (2)		719.6			693.0			656.1
Basic earnings (loss) per common share	$	.08		$	(.02	)	$	(.21	)
Diluted earnings (loss) per common share	$	.08		$	(.02	)	$	(.21	)

(1) Represents the original issuance costs associated with the Class E preferred stock, which stock was redeemed during 2010.

(2) There are 40 million, 47 million and 53 million potentially dilutive shares for our exchangeable senior debentures and shares granted under comprehensive stock plans which were not included in the computation of diluted EPS as of December 31, 2012, 2011 and 2010, respectively, because to do so would have been anti-dilutive for the period.

HOST HOTELS & RESORTS L.P.

Earnings (Loss) Per Common Share (Unit)

Host L.P. Earnings (Loss) Per Common Unit

Basic earnings (loss) per common unit is computed by dividing net income (loss) available to common unitholders by the weighted average number of common units outstanding. Diluted earnings (loss) per common unit is computed by dividing net income (loss) available to common unitholders, as adjusted for potentially dilutive securities, by the weighted average number of common units outstanding plus other potentially dilutive securities. Dilutive securities may include units distributed to Host Inc. to support Host Inc. common shares granted under comprehensive stock plans, other non-controlling interests that have the option to convert their limited partnership interests to common OP units and convertible debt securities. No effect is shown for any securities that are anti-dilutive.

	Year ended December 31,
	2012			2011			2010
	(in millions, except per unit amounts)
Net income (loss)	$	63		$	(16	)	$	(132	)
Less: Net income (loss) attributable to non-controlling interests		(1	)		1			—
Net income (loss) attributable to Host L.P.		62			(15	)		(132	)
Less: Distributions on preferred units		—			—			(4	)
Issuance costs of redeemed preferred units (1)		—			—			(4	)
Net income (loss) available to common unitholders	$	62		$	(15	)	$	(140	)
Diluted income (loss) available to common unitholders	$	62		$	(15	)	$	(140	)
Basic weighted average units outstanding		713.3			688.9			653.0
Diluted weighted average units outstanding (2)		714.6			688.9			653.0
Basic earnings (loss) per common unit	$	.09		$	(.02	)	$	(.21	)
Diluted earnings (loss) per common unit	$	.09		$	(.02	)	$	(.21	)

(1) Represents the original issuance costs associated with the Class E preferred OP units, which units were redeemed during 2010.

(2) There are 40 million, 46 million and 51 million potentially dilutive units for our exchangeable senior debentures and for units distributable to Host Inc. for Host Inc. shares granted under comprehensive stock plans which were not included in the computation of diluted earnings per unit as of December 31, 2012, 2011 and 2010, respectively, because to do so would have been anti-dilutive for the period.