Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Consolidated Portfolio of Hotels by Location

As of December 31, 2016, the hotels in our consolidated portfolio are located in the following countries:

	Hotels
United States		89
Australia		1
Brazil		3
Canada		2
Mexico		1
Total		96

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,
	2016		2015
OP units outstanding (millions)		8.6		9.1
Market price per Host Inc. common share	$	18.84	$	15.34
Shares issuable upon conversion of one OP unit		1.021494		1.021494
Redemption value (millions)	$	165	$	143
Historical cost (millions)		84		90
Book value (millions) ⁽¹⁾		165		143
___________

(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,
	2016			2015
Gain on foreign currency forward contracts	$	40		$	35
Loss on interest rate swap cash flow hedges		(5	)		(7	)
Foreign currency translation		(121	)		(137	)
Other comprehensive loss attributable to non-controlling interests		3			2
Total accumulated other comprehensive loss	$	(83	)	$	(107	)

Earnings Per Common Share (Unit)

The calculation of basic and diluted earnings per common share is shown below (in millions, except per share amounts):

	Year ended December 31,
	2016			2015			2014
Net income	$	771		$	565		$	741
Less: Net income attributable to non-controlling interests		(9	)		(7	)		(9	)
Net income attributable to Host Inc.		762			558			732
Assuming conversion of exchangeable senior debentures		—			—			27
Diluted income attributable to Host Inc.	$	762		$	558		$	759

Basic weighted average shares outstanding		743.0			752.4			755.4
Assuming weighted average shares for conversion of exchangeable senior debentures		—			—			30.3
Assuming distribution of common shares granted under the comprehensive stock plans, less shares assumed purchased at market		0.7			0.5			1.1
Diluted weighted average shares outstanding⁽¹⁾		743.7			752.9			786.8

Basic earnings per common share	$	1.03		$	.74		$	.97
Diluted earnings per common share	$	1.02		$	.74		$	.96
___________

(1)

There were approximately 25 million potentially dilutive shares (on a weighted average basis) for the year ended December 31, 2015 related to our exchangeable senior debentures, which were anti-dilutive for the period. The exchangeable senior debentures were redeemed in 2015 in exchange for 32 million shares.

HOST HOTELS & RESORTS L.P.

Earnings Per Common Share (Unit)

The calculation of basic and diluted earnings per common unit is shown below (in millions, except per unit amounts):

	Year ended December 31,
	2016		2015		2014
Net income	$	771	$	565	$	741
Less: Net loss attributable to non-controlling interests		—		—		—
Net income attributable to Host L.P.		771		565		741
Assuming conversion of exchangeable senior debentures		—		—		27
Diluted income attributable to Host L.P.	$	771	$	565	$	768

Basic weighted average units outstanding		736.3		745.7		748.9
Assuming weighted average units for conversion of exchangeable senior debentures		—		—		29.7
Assuming distribution of common units granted under the comprehensive stock plans, less units assumed purchased at market		0.6		0.5		1.0
Diluted weighted average units outstanding⁽¹⁾		736.9		746.2		779.6

Basic earnings per common unit	$	1.05	$	.76	$	.99
Diluted earnings per common unit	$	1.05	$	.76	$	.99
___________

(1)

There were approximately 25 million potentially dilutive units (on a weighted average basis) for the year ended December 31, 2015, related to our exchangeable senior debentures, which were anti-dilutive for the period. The exchangeable senior debentures were redeemed in 2015 and Host L.P. issued 31.3 million units.

European Joint Venture

Consolidated Portfolio of Hotels by Location

As of December 31, 2016, the Euro JV hotels are located in the following countries:

	Hotels
Belgium		1
France		3
Germany		1
Spain		2
Sweden		1
The Netherlands		1
United Kingdom		1
Total		10