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

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

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

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

Equity of Host Inc.

Host Inc. has authorized 1,050 million shares of common stock, with a par value of $0.01 per share, of which 750.3 million and 755.8 million were outstanding as of December 31, 2015 and 2014, respectively. Fifty million shares of no par value preferred stock are authorized; none of such preferred shares were outstanding as of December 31, 2015 and 2014.

Capital of Host L.P.

As of December 31, 2015, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining 1% of Host L.P.’s common OP units are held by various unaffiliated limited partners. Each common 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 connection with the issuance of shares by Host Inc., Host L.P. will issue OP units based on the same conversion ratio. As of December 31, 2015 and 2014, Host L.P. had 743.7 million and 749.1 million OP units outstanding, respectively, of which Host Inc. held 734.5 million and 739.9 million, respectively.

Issuances of Common Stock and Common OP Units

During 2015, holders of $399 million Debentures elected to exchange their debentures for shares of Host Inc. common stock, totaling approximately 32 million shares.

On April 30, 2015, Host Inc.’s Board of Directors announced a program to repurchase up to $500 million of common stock, and again on October 29, 2015, to repurchase up to an additional $500 million of common stock. During 2015, we repurchased 38.3 million shares at an average price of $17.64 for a total purchase price of approximately $675 million. At December 31, 2015, we have completed the first program and have $325 million of repurchase capacity remaining under the second program.

Dividends/Distributions

Host Inc. is required to distribute at least 90% of its annual taxable income, excluding net capital gains, to its stockholders in order to maintain its qualification as a REIT, including taxable income recognized for federal income tax purposes but with regard to which we do not receive cash. Funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P. The amount of any future dividends will be determined by Host Inc.’s Board of Directors.

The dividends that were taxable to our stockholders in 2015 were considered 80% ordinary income (non-qualified dividend income), 8% qualified dividend income, 5% capital gain distribution and 7% unrecaptured Section 1250 gain. The dividends that were taxable to our stockholders in 2014 were considered 65% ordinary income (non-qualified dividend income), 22% capital gain distribution and 13% unrecaptured Section 1250 gain.

The table below presents the amount of common dividends declared per share and common distributions per unit as follows:

	Year ended December 31,
	2015		2014		2013
Common stock	$	.80	$	.75	$	.46
Common OP units		.817		.766		.470

On February 16, 2016, Host Inc.’s Board of Directors authorized a regular quarterly cash dividend of $0.20 per share on Host Inc.’s common stock. The dividend is payable on April 15, 2016, to stockholders of record on March 31, 2015.