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

6 Months Ended

Jun. 30, 2013

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

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

Equity of Host Inc.

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

	Equity of Host Inc.			Non-redeemable non-controlling interests			Totalequity			Redeemable non- controlling interests
Balance, December31, 2012	$	6,825		$	34		$	6,859		$	158
Net income		175			4			179			2
Issuance of common stock		370			—			370			—
Dividends declared on common stock		(157	)		—			(157	)		—
Distributions to non-controlling interests		—			(4	)		(4	)		(2	)
Other changes in ownership		(10	)		1			(9	)		10
Other comprehensive loss		(24	)		—			(24	)		—
Balance, June30, 2013	$	7,179		$	35		$	7,214		$	168

Capital of Host L.P.

As of June30, 2013, Host Inc. is the owner of approximately 98.7% of Host L.P.’s common OP units. The remaining 1.3% 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 of Host L.P. is allocated between controlling and non-controlling interests as follows (in millions):

	Capitalof Host L.P.			Non-controlling interests			Total Capital			Limited Partnership Interestsof ThirdParties
Balance, December31, 2012	$	6,825		$	34		$	6,859		$	158
Net income		175			4			179			2
Issuance of common OP units		370			—			370			—
Distributions declared on common OP units		(157	)		—			(157	)		(2	)
Distributions to non-controlling interests		—			(4	)		(4	)		—
Other changes in ownership		(10	)		1			(9	)		10
Other comprehensive loss		(24	)		—			(24	)		—
Balance, June30, 2013	$	7,179		$	35		$	7,214		$	168

For Host Inc. and Host L.P., there were no material amounts reclassified out of accumulated other comprehensive income (loss) to net income.

Issuance of Common Stock

During the second quarter of 2013, Host Inc. issued 4.8million shares of common stock, at an average price of $18.31 per share, for net proceeds of approximately $87million. These issuances were made in “at-the-market” offerings pursuant to Sales Agency Financing Agreements with BNY Mellon Capital Markets, LLC and Scotia Capital (USA) Inc. In connection with the common stock issuance, Host L.P. issued 4.7million common OP units. There is approximately $110million of issuance capacity remaining under the current agreements. Year-to-date, we have issued 10.9million shares of common stock, at an average price of $17.45 per share, for net proceeds of approximately $188million. For year-to-date, Host L.P. has issued 10.7million common OP units in connection with these issuances.

Dividends/Distributions

On June17, 2013, Host Inc.’s Board of Directors declared a regular dividend of $0.11 per share on its common stock. The dividend was paid on July15, 2013 to stockholders of record as of June28, 2013. Accordingly, Host L.P. made a distribution of $.11236434 per unit on its common OP units based on the current conversion ratio.