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

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

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.

Host Inc. has authorized 1,050 million shares of common stock, with a par value of $0.01 per share, of which 714.1 million and 705.4 million were outstanding as of December 31, 2021 and 2020, respectively. Fifty million shares of no par value preferred stock are authorized; none of such preferred shares was outstanding as of December 31, 2021 and 2020.

Capital of Host L.P.

As of December 31, 2021, 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, 2021 and 2020, Host L.P. had 706.1 million and 697.7 million OP units outstanding, respectively, of which Host Inc. held 699.0 million and 690.5 million, respectively.

Repurchases and Issuances of Common Stock and Common OP Units

In February 2017, the Host Inc. Board of Directors authorized a program to repurchase up to $500 million of common stock. On August 5, 2019, Host Inc.’s Board of Directors authorized an increase in its share repurchase program from $500 million to $1 billion. No shares were repurchased in 2021. In 2020, we repurchased 8.9 million shares at an average price of $16.49 per share, exclusive of commissions, for a total of $147 million. As of December 31, 2021, we have $371 million available for repurchase under the program.

On May 6, 2021, we entered into a distribution agreement with J. P. Morgan Securities LLC, BofA Securities, Inc., DTIG, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sale agents, pursuant to which we may issue and sell, from time to time, shares having a aggregate offering price of up to $600 million. The sales will be made in "at the market" offerings under the SEC rules. We may sell shares of Host Inc. common stock under this program from time to time based on market conditions, although we are not under an obligation to sell any shares. In 2021, we issued approximately 7.8 million shares under the program at an average price of $17.99 per share, for net proceeds of approximately $138 million. In connection with the common stock issuance by Host Inc., Host L.P. issued 7.6 million common OP units to Host Inc. At December 31, 2021, there was $460 million of remaining capacity under the agreement.

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. 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.

As part of our response to COVID-19 and in order to preserve cash and future financial flexibility, we temporarily suspended our regular quarterly common cash dividends, commencing with the second quarter 2020 dividend that would have been paid in July 2020. On February 16, 2022, Host Inc.'s Board of Directors announced a regular quarterly cash dividend of $0.03 on Host Inc.'s common stock. The dividend will be paid on April 15, 2022 to stockholders of record on March 31, 2022.

The dividends that were taxable to our stockholders in 2020 were considered 5.9% qualified REIT dividends, 3.6% qualified dividend income, 46.6% unrecaptured Section 1250 gain, and 43.9% long term capital gain. The 2020 qualified REIT dividends are eligible for the 20% deduction provided by Section 199A.

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

	Year ended December 31,
	2021		2020		2019
Common stock	$	—	$	.20	$	.85
Common OP units		—		0.204		0.868