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

9 Months Ended

Sep. 30, 2013

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

  7. 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				Total equity				Redeemable non-controlling interests
Balance, December31, 2012	$	6,825		$		34		$		6,859		$		158
Net income		194				2				196				3
Issuance of common stock		483				––				483				––
Dividends declared on common stock		(247	)			––				(247	)			––
Distributions to non-controlling interests		––				(4	)			(4	)			(3	)
Other changes in ownership		(17	)			4				(13	)			17
Other comprehensive loss		(12	)			––				(12	)			––
Balance, September30, 2013	$	7,226		$		36		$		7,262		$		175

Capital of Host L.P.

As of September30, 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				Limitedpartnership interestsof thirdparties
Balance, December31, 2012	$	6,825		$		34		$		6,859		$		158
Net income		194				2				196				3
Issuance of common OP units		483				––				483				––
Distributions declared on common OP units		(247	)			––				(247	)			(3	)
Distributions to non-controlling interests		––				(4	)			(4	)			––
Other changes in ownership		(17	)			4				(13	)			17
Other comprehensive loss		(12	)			––				(12	)			––
Balance, September30, 2013	$	7,226		$		36		$		7,262		$		175

For Host Inc. and Host L.P., there were no material amounts reclassified out of accumulated other comprehensive income (loss) to net income for the quarter and year-to-date ended September 30, 2013.

Issuance of Common Stock

During the third quarter of 2013, Host Inc. issued 6.0million shares of common stock, at an average price of $18.39 per share, for net proceeds of approximately $109million. 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 5.9million common OP units. Theseissuances completed the capacity under the current agreements. Year-to-date, we have issued 16.9million shares of common stock, at an average price of $17.78 per share, for net proceeds of approximately $297million.  For year-to-date, Host L.P. has issued 16.5million common OP units in connection with these issuances.

Dividends/Distributions

On September16, 2013, Host Inc.’s Board of Directors declared a regular dividend of $0.12 per share on its common stock. The dividend was paid on October15, 2013 to stockholders of record as of September30, 2013. Accordingly, Host L.P. made a distribution of $0.12257928per unit on its common OP units based on the current conversion ratio.