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

12 Months Ended

Dec. 31, 2022

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 713.4 million and 714.1 million were outstanding as of December 31, 2022 and 2021, respectively. Fifty million shares of no par value preferred stock are authorized; none of such preferred shares was outstanding as of December 31, 2022 and 2021.

Capital of Host L.P.

As of December 31, 2022, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining common OP units are owned by 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 exchange for any shares issued by Host Inc., Host L.P. will issue common OP units based on the applicable conversion ratio. As of December 31, 2022 and 2021, Host L.P. had 708.4 million and 706.1 million OP units outstanding, respectively, of which Host Inc. held 698.4 million and 699.0 million, respectively.

Repurchases and Issuances of Common Stock and Common OP Units

On August 3, 2022, Host Inc.'s Board of Directors authorized an increase in our share repurchase program from the existing $371 million remaining under the prior Board authorization to $1 billion. In 2022, we repurchased 1.7 million shares at an average price of $15.93 per share, exclusive of commissions, for a total of $27 million. No shares were repurchased in 2021. As of December 31, 2022, we have $973 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 an 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. There have been no shares issued in 2022. At December 31, 2022, there was $460 million of remaining capacity under the distribution 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 through year end 2021. We reinstated a quarterly common cash dividend beginning in the first quarter of 2022. The dividends that were taxable to our stockholders in 2022 are considered 78.1% ordinary and 21.9% unrecaptured Section 1250 gain. The 2022 ordinary 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,
	2022		2021		2020
Common stock	$	.53	$	—	$	.20
Common OP units		0.541		—		0.204

On February 15, 2023, we announced a regular quarterly cash dividend of $0.12 per share on Host Inc.'s common stock. The dividend will be paid on April 17, 2023 to stockholders of record on March 31, 2023.