Good day, and welcome to the Host Hotels & Resorts, Inc. Third Quarter 2011 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Greg Larson, Executive Vice President. Please go ahead, sir.

Thank you. Welcome to the Host Hotels & Resorts Third Quarter Earnings Call. Before we begin, I'd like to remind everyone that many of the comments made today are considered to be forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. Additionally, on today's call, we will discuss certain non-GAAP financial information, such as FFO, adjusted EBITDA and comparable hotel results. You can find this information in today's earnings press release, in our 8-K filed with the SEC and on our website at hosthotels.com. This morning, Ed Walter, our President and Chief Executive Officer, will provide a brief overview of our third quarter results and then will describe the current operating environment, as well as the company's outlook for the remainder of 2011. Larry Harvey, our Chief Financial Officer, will then provide greater detail on our third quarter results, including regional and market performance. Following their remarks, we will be available to respond to your questions. And now, here's Ed.

Thanks, Greg. Good morning, everyone. We are pleased to report another strong quarter of operating results despite the impact of Hurricane Irene on our East Coast hotels, and the headwinds emanating from global economic concerns over the last several months. Let's start by reviewing the quarter and then we will offer some insights into the rest of 2011 and next year. Our comparable hotel RevPAR for the third quarter increased 6.4%, driven by an improvement in our average rate of 3.7% combined with an occupancy increase of 1.9 percentage points. Our average rate for the quarter was at $169 and our average occupancy was nearly 76%, which is only 1.3 points shy of 2007 levels. This performance fell slightly short of our expectations because of the arrival of Hurricane Irene in late August, which resulted in group cancellations in Washington and Philadelphia and the complete evacuation of the Marriott New York Downtown Hotel. Altogether, the storm caused an approximately 60 basis point hit to our RevPAR for the quarter. In addition, as we mentioned last quarter, our comparable hotel results do not include the performance of the $1.7 billion of acquisitions we have completed over the last 15 months, which averaged better than 14% growth in the quarter. Comparable hotel F&B revenue growth of 4% contributed to an overall revenue growth of 5.3% for the quarter. This increase, when combined with our comparable hotel adjusted operating profit margin increase of 110 basis points and the performance of our acquisition, resulted in a 28% increase in adjusted EBITDA to $212 million, an FFO per diluted share of $0.16. On a year-to-date basis, comparable hotel RevPAR increased 6.3% driven primarily by rate improvement. Total year-to-date comparable revenue growth of 5.3%, combined with profit margins that increased 80 basis points, resulted in year-to-date…

Thank you, Ed. Let me start by giving you some detail on our comparable hotel RevPAR results. Our top-performing markets for the third quarter was Phoenix with a RevPAR increase of 24.4%. Strong group demand resulted in an occupancy increase of over 7 percentage points. Some of the group demand improvement was due to meeting space renovations at the Westin Kierland and the Ritz-Carlton Phoenix in the third quarter of 2010. The ADR growth of 8% was driven by increases in both group and transient rates. We expect our Phoenix hotels to have an outstanding fourth quarter due to an excellent group and transient demand and further ADR growth. Our Miami and Fort Lauderdale hotels had another great quarter with RevPAR up 20.6%. Occupancy increased over 12 percentage points, as group demand was very strong and ADR improved nearly 2%. The renovation of the Miami Biscayne Bay Marriott in the third quarter of 2010 contributed to the strong RevPAR growth. We expect our Miami and Fort Lauderdale hotels to have a great fourth quarter because of strong group and transient demand, as well as some improvement in average rates. Despite these results in Miami and Fort Lauderdale, our Florida region was affected by significant renovations at the Ritz-Carlton, Amelia Island and the Hilton Singer Island. Our San Francisco hotels continue their exceptional performance. RevPAR increased 17% as ADR improved over 11% and occupancy increased 4 percentage points. The improvement in ADR was driven by both rate increases and the shift in the mix of business to higher-rated segments. Both group and transient demand were strong. We expect the San Francisco market to continue to perform well in the fourth quarter. Our Houston hotels had another strong quarter with RevPAR up 12.6% as occupancy increased over 6 percentage points while ADR…

[Operator Instructions] Our first question today comes from Eli Hackel with Goldman Sachs.

Two questions. First just goes on the deal from the transaction market. Can you just talk a little bit -- I mean, you mentioned D.C., how you're viewing deals? I mean, it seems to me a little bit that you know evaluations have come down so much. Now maybe it's a good time to purchase and just have the capital markets going to making those decisions if they're available. If they're not, I know you still have a lot of cash on your balance sheet, or just have sellers not lower their prices that much. And then the other thing just relating to group business for 2012, you mentioned volume, I think. But can you just give us an idea where rates stand for next year?

Yes, I would tell you that rate is up a little bit for next year. It's probably around the 1% range so far. That number does tend to vary a bit from period to period, but it's roughly up about 1 point right now. Going back to the deal market, I guess what I would say is that it's -- we're trying to assess that right now. I would -- sellers have clearly not dropped their prices yet. The cost of capital for most buyers has gone up a bit, which probably suggests that buyers are looking to pay a little bit less. There has not been a whole lot of activity over the course of the last 90 days since the equity markets started to move. We are seeing good activity on the properties that we are marketing. I would say that generally, we're seeing less activity from the other REITs, and I think everybody would understand that with REIT share prices lower, that REITs are going to be a little bit more careful in how to expand whatever cash or liquidity that they have, recognizing that they probably are not comfortable on returning to the equity market right now given where equity market prices are. So I think that I would suspect, overall, that the pace of activity in the second half of the year will fall short of what folks expected it to be back in June primarily because of the reduction in share prices. But having said that, and kind of looking at the response that we're getting for some of the properties that we have on the market, there's still an active market out there. But I would also agree with your point that pricing could get a little bit more attractive as sellers begin to accept the new reality, and that's one of the reasons why we continue to be interested in completing the acquisitions.

And then just taking that just the D.C. for a second, so how much of your decision took than the D.C. was capital markets and how much maybe was economic uncertainty?

I don't know that I could give you a percentage of either, but they're just -- unfortunately, the world did change a lot from our perspective, at least from a capital markets perspective after our last call. And so looking at the scale and the size of this particular transaction, we're still very comfortable with the acquisition, but it would utilize a fair amount of our existing liquidity to complete and I think we just wanted to let the world have a little bit more time to get a little bit clear indication of direction before we complete the purchase. And I think one of the points -- but intuitively from that, is that we -- it gives us a little bit more flexibility is not a bad thing right now.

We'll take our next question from Felicia Hendrix with Barclays.

Just wondering if you could clarify a couple of things for me. In the last quarter -- well, you said in this quarter you got the fourth quarter bookings were up 2%, which is similar to what you said in the last quarter, which is clearly positive. Given that there hasn't been any deterioration given the economy. But I'm wondering if you could just get a little bit more granular with that data point. And I'm wondering did anything change in that since the last quarter. You mentioned revenues were up 4%, 5% for the bookings. I was just wondering if that was better or also unchanged.

I think net-net, the bookings for the fourth quarter are better than where they were earlier in the year. We've seen a consistent trend throughout the year that -- the fourth quarter was the only quarter that, back in January, was significantly negative in terms of both room nights and revenues. The other quarters were generally positive especially from a revenue perspective. As we've worked our way through the year, we've seen continued improvement in the fourth quarter. Probably more importantly, as we look at what has actually happened over the course of the last 60 to 90 days, our bookings for the fourth quarter were stronger than they had been in 2010. So we booked more room nights in the last 60 days for the fourth quarter than we did last year. And those bookings were also ahead of the pace that we had seen in 2007. So net-net, we -- while there was a bit of a hole that needed to be filled in the fourth quarter, we have been pleased with the progress throughout the year. But we certainly have been pleased with the progress that we've seen at the end of the summer despite all the noise that was out there at the time that, that was happening.

That's really helpful. And then, regarding your outlook, which now is basically for the fourth quarter, last quarter, you had said that adjusting for disruption, the second half should be -- in terms of RevPAR, should be about greater than 7%. And now if we kind of take the guidance that you've given, it looks like that number is lower than that. So I'm just wondering what's changed there?

I think there's a couple of things that changed. One was what we -- what I talked about in my comments which is the fact that we did lose some group activity and some fairly strong bookings in the East Coast that because of Hurricane Irene. We had a big group in Philadelphia that canceled. We had to shut down the Financial Center Marriott for the entire weekend. So you never want to see that happen in New York. And in Washington, D.C., we were expecting a fair amount of business, both group and transient, related to the celebration of the, I guess, the presentation, the opening of the Martin Luther King Memorial, all of which were rained out by Hurricane Irene. So the net effect of that was that we lost about 60 basis points in the quarter. And if we had that, we obviously would have been at the 7% level, maybe slightly above that for the quarter. So I think that's the first thing that changed. I think that the other part of it, as we looked at the fourth quarter, is that overall we continue to feel that the quarter is going to be good. Our property level forecasts are, frankly, stronger than the guidance that we're giving. I think the properties are a bit more optimistic that we are, but I think we felt like it would make sense to dial back a little bit on that. And I think that's why I made the point about the fact that we -- we're not going to outperform in the fourth quarter, but we still expect to perform in line in Q4.

Okay. I should have been more -- definitely more focus on the fourth quarter. So that was helpful. And then just maybe it's housekeeping, maybe it's not. But corporate expense was lower than we were expecting by about $10 million. Maybe you addressed it in your prepared remarks. If you did, I missed that.

I think the bulk of the change in the corporate expenses is due to the fact that a significant part of our compensation is tied to restricted stock. And with the reduction in stock price, I think 2 things happen. We will probably earn less of that restricted stock compensation because it is primarily performance related. And the second thing is that there was a stock price being measurably lower that also reduces the amount. So I think the bulk of that change is due to -- really due to changes in what we expect to pay in restricted stock.

Felicia, this is Greg. Going back to your prior question, I mean, if you take the midpoint of our full year guidance, it's 6.5%. To achieve 6.5%, that means we need to achieve 7% growth in the fourth quarter. So that's a 7% that you were just talking about. And obviously, if we hit 7%, that would be the strongest quarter of the year.

Okay. I mean, I just -- maybe it's just splitting hairs, but if you were -- made the adjustments you kind of would have done 7% this quarter. And then last quarter, you said fourth quarter would be better than the third. So I was just trying to figure out what was going on, but I think I got it now.

Our next question will come from Smedes Rose with KBW. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: I was just curious what's your thought on share repurchases at these levels given, as you point out, that your stock trades well below your NAV and a lot of these companies have traded off. Your leverage is low. You have a lot of cash on the balance sheet. What are your thoughts around that?

Certainly, we would view it as an attractive purchase. And I think, as you know Smedes, we've bought stock back in the '90s. We bought stock in the last 4 or 5 years when similar situations have existed. Generally, I think, our philosophy on this is stock purchases are best funded from the proceeds of asset sales where you're effectively selling a part of the company at a market level pricing, getting an opportunity to buy part of it back at a discount price. And as mentioned in my comments, I think we've got some sales -- small amount of sales out there on the market by I don't expect any of them to close in the real near term. I think until we start to see both the results of those sales and get a little bit more clarity on how 2012 is going to play out, I think we'd be really relatively cautious about instituting a stock buyback. I think ultimately, as we generate proceeds from some of the -- from sales, we'll look as we always do at what the other options are, whether it's to pay down debt, buy, invest in our existing assets, look at other acquisitions or buy part of the company make a decision at that time what's the best use of that capital. Smedes Rose - Keefe, Bruyette, & Woods, Inc., Research Division: I was just wondering, you may have said this, but could you just recap what you're seeing in 2012 on the group booking trends I guess relative to the last time? You guys gave us an update in terms of just revenue and demand trends.

What we had talked about was the fact that room nights were up about 4% and then rate was up roughly 1%.

We'll take the next question from Josh Attie from Citigroup.

You've acquired a lot of assets over the last year or so, and I know you usually wait until they've been in the portfolio full calendar year before included them in your comp set. Maybe to give us an idea of how the portfolio is performing, if you could give us either RevPAR growth for the third quarter for the whole portfolio or what the full year guidance would be including all of the hotels, that would be helpful.

Yes, Josh, what I'd say, if you look at what Q3 would have been, if we included all of the acquisitions. So in other words, our acquisitions were up over 14% in the third quarter. So if we look at that on a pro forma basis compared to last year, that would have added an incremental 70 basis points to our third quarter RevPAR growth. So 6.4 would have gone to 7.1. And obviously, if you add the hurricane disruption and you end up at 7.7 for the quarter. I don't know off the top of my head what the number is for the full year. But, I mean, I think we've generally been seeing if you -- I think in the last quarter, we were up about 100. The impact of the acquisitions added about 100 basis points. So we're somewhere between that 3/4 and 1 point benefit incremental to what were otherwise shown -- what we're reporting on a comp basis because of the acquisitions we've completed.

It's Michael Billerman speaking. Just -- I'll just come back to the stock repurchase, because at least in your opening comments, you talked about the best investment that you could make is investing in the properties, right? So you're putting more dollars into the asset. So you obviously have some confidence in the long-term prospects of the hotels. And I can appreciate that you want to get a little bit more clarity on where things stand heading into next year. Yes, I think the unfortunate part is once you get that clarity, your stock is only going to reflect what that clarity is. And hence, will be at a valuation bubble that is a lot different that where it is. And based on your more -- in your confidence in putting money to work, you would probably end on the side that the stock would be higher a year from now than lower. So I guess I'm just curious, why not try to be more aggressive if you're trading at such a substantial discount to the underlying assets, which you have a lot of confidence in because you're putting money to work in them. Why not be more aggressive today?

Mike, that's a great question. But I think that ultimately what the answer is right now is that while we are -- as we look at the world today and if we assume that we don't have a problem, a real -- that the problem in Europe doesn't get worse and we assume that we could -- that the blue chip for the industry consensus, the economic consensus on next year plays out, we feel very good about 2012. But I think, if you -- as we also listen to what economic forecasters are predicting and you look at the fact that there are risks that suggest that there could be some problems out there. And I think, frankly, those risks are what are reflected in our stock price right now, that's why it's so low. At the end of the day, I think the more prudent step for us to take is to be a little bit more cautious and a little bit more conservative with what we do with our capital. At least, until we have started to generate and completed some of asset sales that I think ultimately are the best way to fund the stock buyback. And in fact, what you're suggesting is have confidence that you get sales done and then use those proceeds now to buy at a lower price. There's a lot of logic to that. But ultimately, at the end of the day, what has served us well over the last decade when we approached some of these times of uncertainty is to be, maybe a little bit more cautious in how we used some of that incremental capital, be a little less quick to pull the trigger on some sort of -- on financial transactions similar to buying stock and just make certain that you kind of are comfortable that the world is headed in the right direction because liquidity can make a difference at different times in the cycle. And so I think ultimately, I would wholeheartedly agree with you about the value that's there. But I'm comfortable that, that value is going to be there ultimately in '12 and in '13 and in '14 and it's only going to be going higher. What I need to make certain of is that we don't take any steps now that may force us to do something stupid later, which might be selling an asset at a bad price or borrowing at a very expensive rate. So that's -- it's an issue that we're talking about regularly here. It's an issue that I'm talking about with the board. But I think right now, the prudent call is to wait till you get the asset sales done and then reevaluate the opportunity. And if we missed it -- and the good news is the stock price is a lot higher.

Right, I guess, just to drive returns you could maximize by buying cheap and then selling equity at a higher price if you want to fund the growth and you can also use some of your under leverage. Or if you're not going to buy assets, why don't buy into the assets that you know the best, the assets that you're investing money in and the assets that you're operating every day, why not take leverage up return or -- and still have capacity. I'm not saying do a leverage recap. But certainly, have some capacity to move in the existing structure even without selling assets.

Yes, I think, again, I'm not really disagreeing with your sentiment, and maybe the only part of what you just said that I would probably take issue with is that we are very comfortable with the progress that we have made in reducing our leverage over the course of the last 2 years, but we have been pretty clear that we're ultimately working to be even more lowly levered because we think that there are a series of reasons including a lower cost of capital that makes that an important goal. And so I don't think at this point in time, I would want to go the other direction. I would want to lever up today. It could easily work out well, but I just don't think this is the time to be making that sort of a move.

Our expansion comes from Jeff Donnelly with Wells Fargo.

I guess, maybe I want to build on Michael's question a little bit. Not so much on the share repurchase, but just how you're thinking about allocation of capital. I think there's some talk out there that Host had walked away from buying the St. Regis in the third quarter. And I'm curious, when it comes down to that decision, Ed, is it more about just the uncertainty in the economy that drove that equation and it ultimately could have been solved by a price adjustment? Or is it more to do with, I guess, I'd say the relative value of your stock versus the price of that asset that drove that specific decision?

It's probably a little bit of both, Jeff. But I think, ultimately, what I would say is sort of consistent with some of the comments I just made in response to Michael's question is as we look at that deal, we were excited about the property, but we also -- I think we're really trying to be pretty disciplined here about making certain that we are paying attention to what's happening with our balance sheet as we grow. And while we don't want necessarily sit here and say, that we're trying to find every acquisition 100% with equity, because that's not the case, I also don't think we're -- especially, at this juncture, I don't know that we're in a position where we would be comfortable in funding a big acquisition entirely with debt. And given what had happened with the equity markets over the -- since our last call, we would not have been comfortable in issuing stock in order to fund the equity portion of that particular investment. And so as a result of that, we determined that the best position was to not move forward with the deal.

And if I could maybe switch gears and come at just the group comments for 2012 a little bit differently. When you think about next year, I know you haven't given guidance, I don't expect you to, but do you think revenue growth from the group segments could lead or lag your portfolio average next year under most economic scenarios? And I'm curious, do you think the attrition and cancellation experience you had in '08, '09 causes you to think differently about the resiliency of group revenues over a cycle?

I hesitate to try to use what happened in '08 and '09 to kind of guide our thinking about long-term group activity because I think so much of the decline there was related to the fear of being on the front page of the Post or the Journal or the Times that I think that was a big driver behind the unprecedented level of cancellations that we had. If you go back to another period in time, which even there was probably a little bit irregular because of the events of 9/11, what we saw on that downturn is that group activity actually declined more slowly than transient but overall, the room night decline was really pretty equal in our portfolio, both group and transient were down about 9% in the '01 to '03 timeframe. So when I look at that and when I look at the issue of -- and look at what happened in the last downturn, we tend to still think that in the long run, it's good to have a portfolio that is a little bit over represented in the group sector because we ultimately think that through a normal cycle, without the political rhetoric, the group will tend to hold up a bit better than transient well. Now as we look at next year, I think your question is a very good one. Clearly, this year, we've been experiencing better revenue growth on the transient side. Our transient activity and our transient demand is already ahead of where we were in '07. So in effect, you could argue using that as a peak, transient activity is back to where it was before. I would point out that at least in our portfolio, transient activity is not quite back to where it was in 2000. So there's -- I do think there's still room for growth on transient side. But I do think the opportunity for next year is on the group side. I mean, the reality is, as we've been seeing solid demand growth in the corporate segment, that's the most volatile segment of our group -- of our overall group business. And so I think seeing continued growth there is important to trying to drive an ultimately recovery in group. On the group side, we're still 9% to 10% below where we were in '07. We're not that far below in rate, but we're way behind in terms of room nights. So when I think about '12, I think that's the area where we have an opportunity for outperformance is group activity continues to improve.

Now I'm curious if they dovetail out in the negotiated rates. I mean, I don't know if do you find that there's a relationship, but if much of the strengths that people are talking about in corporate-negotiated business for 2012 seemed to do more in the rate side than the volume side. I guess, does that influence your thinking about how you think about group prospects next year, or did you find that there's not necessarily a correlation between the 2?

I don't know that I've necessarily seen a correlation. I mean, there probably is some correlation from the standpoint that if companies are comfortable in spending on the transient side, it would at least indicate a willingness to spend on the group side. We've seen tremendous growth in Special Corporate business over the course of the last 2 years. So I would expect that as you look at that opportunity next year, it tends to be more on the rate side than on the room night side simply because the demand piece of that has already been quite strong.

And just one last question and I'll leave the floor. It's just -- thank you for your comments earlier on you outlook for RevPAR, but can you maybe give us a little more color just specifically on kind of what the negotiations for rate and volume have been from a negotiated rate side for 2012? And maybe relating to that, what your reaction was to Marriott's industry guidance for 2012? I know you made some remarks, but I'm just curious, did it strike you as reasonable and achievable given what you are already seeing in negotiated rates or did maybe their guidance seem like a stretch one way or the other?

I think it's still on the negotiated rate point. I think it's still fairly early to understand how that's going to play out. I think that the fact that we already have much stronger occupancy in the industry is a big plus relative to the whole negotiated rate discussions because as our properties either on an individual basis or through each operator are more and more comfortable about the level of occupancy that they have. The fact that they were comfortable about the level of group activity that they have on the books. All of that I think creates a better foundation for our side of this discussion to happen on because while we want Special Corporate business, we probably don't need it desperately as we did back when we were having these discussions in 2009. So I think that creates the right sort of atmosphere for these discussions to happen. Now where exactly they're going to play out. I think Arnie gave some color in his comments. I'm sure that Starwood and Hyatt will in the next few weeks. And they're one step closer to that process. So I mean, really what at this point we're watching, we're monitoring. We're cheering them on as they push for higher rates and we hope that they're able to achieve the higher rates. I think we've got the right sort of environment right now to be able to do get that. And I guess your other question was -- what was the second part of that?

Marriott's RevPAR guidance for next year.

Jeff, I don't know that I want to get too specific on that because at the end of the day, I think Marriott provided a fairly broad range of RevPAR outlook for the year that's dependent upon a series of different things. I mean, in general, I would say that looking at all the positive points that we laid out, that is if the event risk doesn't happen, I would certainly think that we would be comfortable in seeing numbers in those range. I mean, it's a broad range, but the bottom line is that, that we feel pretty good about next year as long as something doesn't kind of blow up and cause a problem that changes everybody's outlook. If it continues to track the way it is, I don't know why we don't see solid RevPAR growth next year.

We'll now hear from Ian Weissman with ISI Group.

Just a quick question on your outlook. I understand obviously, there's a backdrop of potential issues globally. But if things don't work out and the optimism changes, how much fat could you possibly cut out of the system, like the last time you're able to cut a lot of headcount in the front office. I mean, how well the property is operating and how much cost can you technically take out currently?

Ian, I would probably say in answering that question is that to the extent that the weakness that you're -- the potential weakness that you're describing comes in the form of reduced demand. And I think if it happens, that's the way it's going to show up. Then I think that there would be reductions that we could achieve at the properties that would be related to that demand. So at some level, if you start to see a meaningful falloff in occupancy, then you're going to see that you're going to go back and cut the hours that F&B outlets are open. You're going to end up with few housekeepers and you're going to end up with fewer managers than where we have right now. So I do think there's an opportunity to make additional cut. I don't know that I would necessarily -- I would suggest, though, that we could make the same level of cuts that we made in 2008 and 2009 because we have certainly been working hard with each of our operators to make certain that where we thought that -- where we thought they had cut fat last time, we haven't wanted that to return. So I think at the end of today, there is an opportunity to make reductions. Most of them would be demand related, but it's probably not to the same degree that we had last time.

Have you added a lot of headcount back to the properties at this point, or not yet?

Not a lot. I mean, I would -- I think, again, it depends upon where demand has gone. My guess is we have seen in our portfolio occupancies gone from about 66% up to around 72%, kind of a estimated full year basis. And so, as you think about that, my guess is the headcount at or roughly in line with that increase. I mean, it will probably -- at least in housekeeping and in certain manager functions. But still well below the levels where we were before.

And just 2 last questions. Rate growth was up 3.7% this quarter, but it trails the first and the second quarter which came in around 5%. Can we take that as the hotels are being a little bit more defensive in pushing rate last quarter just given the economic uncertainty?

I don't know that that's necessarily the case because I actually think that some -- within some of our segments sort of inside the transient and inside the group, we actually had very strong rate growth. So I think really more what you're seeing may be attributable less to broad trends and more to the fact that the business during the summer is a little bit more leisure focused. It's probably a little less-business focused. And consequently, part of what you saw was the discount segment versus the retail segment in transient was it grew a little bit more on a relative basis. And so it's not that you didn't -- you had good rate growth, but you didn't necessarily see as big of a benefit from mixed shift in Q3 as you have in other -- in some of the other quarters. I don't know that it's -- that we necessarily view it as a long-term trend.

Okay. And finally, brokers that I talked to say that private markets valuations are maybe down 5% or 7%, but there's not a lot of comps can necessarily test that thesis. If you were thinking about deals today, okay, and you were going to your deal model, how would things change, how would your underwriting change today as opposed to 3 months ago in terms of your growth?

It's a good question. Longer term, if you thought about RevPAR growth over a 7- to 10-year period, as we would look at the outlook today, it really wouldn't be much different from where it was before. I mean, I think we still feel pretty convinced about where -- the fact that the industry is in the right spot for a long-term recovery. And so I think we probably -- it would depend a lot on the individual market, but just like the industry experts are probably a bit more cautious about '12 now than they were, say, 6 months ago. My guess is that we would probably be a bit more cautious about '12. But as we would look out to the long term in terms of what we were expecting to see in individual markets, as we have looked at deals, we have continued to be comfortable that sort of the right type of dynamics are in place, to support long-term revenue and profitability growth, consistent with what we would have seen before. So I really don't look at what's happened in the near term is changing that. Now I think the other thing that has happened is probably relates to that 5% to 7% price reduction that you're describing is that, I suspect that a fair amount of that's on the buyer side, not the seller side because I'm not certain sellers have gotten there quite yet, relates to the fact that everybody's cost of capital has crept up a little bit. And so at the end of the day, we tend to want investors spread to our cost of capital that's going to affect how we're going to look at what we can afford to pay for our property.

But it's safe to say that cap rates have backed up. I mean, obviously, cap rate on every deal is different, but I've heard as much as 50 to 75 basis points across some markets. Is that too aggressive?

I don't -- my suspect to that is could be true in certain markets. I would imagine that the cap rate differential has -- I don't know that it's moved a lot in the top gateway cities. And so I'm not really -- again, I would -- we both have to caution this discussion with the fact that there's just not been a lot of evidence about where deals are pricing because the markets turns erratically. It's really only been a 2.5 month phenomenon. But I don't know that there's been a big change in the major markets. I suspect that some of those comments could relate to the secondary markets which were starting to improve over the course of the spring. I think that, again, we're still getting feedback that there is still activity in those markets. But it would stand the reason that since they were the last to sort of feel the recovery and pricing, they also might likely be the first that might back away a little bit to the extent that some players are out of the market.

We'll take our last question from Joe Greff from JPMorgan. Joseph Greff - JP Morgan Chase & Co, Research Division: I know the topic of 2012 group bookings have been beaten to death here. So I'll add one more question to that list. When you look at the 2012 group room nights on the books now, what percentage of your total anticipated group nights is that? Or does that represent -- how does that compare to history at this point?

We're at about -- Joe, we're at about right now, we're at about 55% of our -- what we would, at this point, estimate would be our total room nights for 2012. And I don't think that, that's too far off of where we would normally be. We would expect to get to the end of the year and be around 70% of our room nights for next year booked. So I think it's pretty consistent. I don't think there's any surprises in that front. I actually, to be honest, I hope that, that turns out to be lower, lower percentage of our group rooms for next year only from the standpoint that as I commented earlier, I continue to believe that the group side represents a real opportunity for us. And consequently, I'm hoping that we'll see outperformance in that segment of our business as well. Joseph Greff - JP Morgan Chase & Co, Research Division: Okay. And then, one final question. The EBITDA impact from the Hurricane Irene in Philadelphia, D.C., New York, did you quantify that first, did I miss that?

It's about $4.5 million. $4.5 million to $5 million.

Ladies and gentlemen, that's all the time we have for questions today. I'll turn the call back over to Mr. Walter for any closing comments.

Well, thank you for joining us for the call today. We appreciate the opportunity to discuss our third quarter results and outlook with you and appreciate all of your questions. We look forward to talking with you in February to discuss our year-end results and we'll give you a lot more detailed insights into 2012 at that point in time. Have a good remainder of your week. Thanks.

Once again, that does conclude today's conference call. We thank you for your participation.