Good day and welcome to the Host Hotels & Resorts Incorporated Second Quarter Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Gee Lingberg, Vice President. Please go ahead, ma'am.

Thanks, Jennifer. Good morning, everyone. Welcome to the Host Hotels & Resorts second quarter 2015 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. As described in our filings with the SEC, 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 publically update or revise these forward-looking statements. In addition, 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 together with reconciliations to the most directly comparable GAAP information in today’s earnings press release, in our 8-K filed with the SEC and on our Web site at hosthotels.com. With me on the call today is Ed Walter, our President and Chief Executive Officer; and Greg Larson, our Chief Financial Officer. This morning, Ed will provide a brief overview of our second quarter results and then will describe the current operating environment as well as the company’s outlook for 2015. Greg will then provide greater detail on our second quarter performance by market. Following the remarks, we will be available to respond to your questions. And now, here’s Ed.

Thanks, Gee. Good morning, everyone. We are pleased to report another quarter of positive results for the company, driven by strong rate growth and solid group demand. We’re also quite pleased with our progress on various transactions and value creation opportunities throughout our portfolio. First, let’s review our results for the quarter. Adjusted EBITDA was $422 million for the quarter and 743 million year-to-date, reflecting a year-to-date increase of 3.3%. Our adjusted FFO was $0.46 per share for the second quarter and $0.81 per share year-to-date, reflecting a 6.6% increase over last year. Both earning measures are in line with the consensus. These results were driven by several factors. First RevPAR for our comparable domestic portfolio increased by 5.3%, which matched upper upscale industry performance despite continuing drag from ongoing renovation at a number of our hotels. Well Greg will provide more detailed insight shortly, we were pleased to see that overall with the exception of Houston and New York, our portfolio performed in line or better than we had expected for the quarter. The strong domestic performance was driven by our group segment, which benefited from a 13% increase in association business leading to group demand growth of 2.7% and rate growth of 4.4% which translated to group revenue growth of more than 7%. Our transient segment benefited from mix shift as our top rated segment which represent slightly less than half of our overall transient business improved demand by more than 2%. Planned reductions in our lower priced segments resulted in a modest transient demand decline, but overall rate was up 4.9% and our transient revenues increased by more than 4%. Within the quarter for our domestic hotels, June was our strongest month as April was affected by renovation impact, and it suffered from difficult prior year comparison.…

Thank you, Ed. Now let me provide some commentary on our market. The market Southwest continues to be the strongest performing markets with a RevPAR increase of 10.2%. These markets benefited from strong transient and group business in the second quarter. Transient revenues grew 10% over last year and group revenues were up 13.5% with an increase in average rate over 7% for both segments. San Diego, Seattle, San Francisco and Hawaii all achieved double-digit RevPAR growth in the second quarter. RevPAR for our hotels in San Diego market grew an impressive 16% beating STAR upper upscale RevPAR growth by almost 500 basis points this quarter. The Grand Hyatt Manchester benefited from having full meeting space inventory as its renovations were completed in the fourth quarter last year. This enabled our managers to book in-house group business that created compression, which drove group and transient average rates. For our hotels in San Diego, group revenues increased 19% and transient revenues grew 12%. Strong group business facilitated the 32% increase in food and beverage revenues with a 40% increase in the more profitable banquet and catering business. Our Seattle hotels grew RevPAR 15.4%, predominantly driven by a 13% increase in average rates. This growth was driven by solid market demand from city wide and the nearby US Open, which created compression and drove ADR. Group revenues increased 16% and transient revenues increased 14%. Stronger business resulted in impressive growth in food and beverage revenues, which increased nearly 17% primarily from a 24% increase in banquet and catering revenues. San Francisco continued to outperform the portfolio with RevPAR increasing 10% this quarter. Strong transient demand and solid association group business helped the hotels and grew transient and group average rates, which were up 6.7% and 5.6% respectively, resulting in transient revenues of…

Thank you. [Operator Instructions] Our first question comes from Smedes Rose with Citi.

I wanted to ask you just on the portfolio sales, I think you said you have a total of 200 million to 350 million of international and domestic properties currently being marketed. What are your thoughts around acquisitions I guess at this point? And kind of what kind of markets would you be primarily focused on?

Smedes, I think we are -- I want to correct what you said about the sales, we have a number of international sales that are on the market now. We’re expecting to put a lot of domestic properties on the market more in the fall, which is why the closings on that are going to be a bit delayed. I think on the acquisition side, we are looking at opportunities that would be in markets where we’re underrepresented some of the West Coast market, especially around say LA or in Seattle are markets we might still be trying to buy and certain markets in South Florida too. I think we’re being provided reasons including where our stock price sits in order to move forward with an acquisition, it needs to make sense in the context of an alternative of buying our stock back and so I wouldn’t put us in the aggressive path in terms of acquisitions, but whether the right opportunity to create value we’d like -- well, we'll look to take advantage of it.

And I just wanted to ask you maybe just kind of bigger picture sort of I guess strategy. I mean you guys are always trying to sort of I think recycle the bottom kind of tier of your assets. Would you ever think about maybe pulling that forward and possibly spinning out kind of a subset or carving out or potentially selling to another REIT to whom those kinds of asset might be attractive or to kind of just overall improve the quality of your portfolio more quickly rather than over a period of years?

No, I think certainly that is a thought that we’ve looked at repeatedly over the course of the last probably 18 to 24 months. I think probably the more efficient execution in the long run would be a sale as oppose to a spin out. I think there is a spin out, well it looks good on paper, you really got to be thoughtful about the kind of company that you’re creating and making certain that that company has a [indiscernible] on its own or you’re not going to get the valuation that you might think you get. So if there are opportunities to sell whether it was to other REITs or other parties in scale, we would certainly be open to that. Again I think we found so far, every time we have tested some of those theories about doing a larger sale, the reality is we've come back to the fact that the best way to maximize pricing is one-off transactions that are heavily marketed.

And next we’ll here from Anthony Powell with Barclays.

On the group demand, how is it in the quarter for the quarter group booking pace in the second quarter and how do you expect that to trend over the rest of the year?

We were modestly down in the quarter for the quarter because we had started the quarter in such a strong position. I would say as we look towards the end of the year, I think we'd probably for the third quarter I would imagine that we would -- we might trend just a touch. Fourth quarter, I would expect to see that we’ll see more bookings based on the trending that we’ve been seeing which is that we’re booking more as you look at least a quarter out, we’ve been booking more in those quarters for the last three quarters in a row right now. I think what we are experiencing here which is a good think -- and I think we've had this confirmed by all of our operators is that corporations are starting -- recognizing that hotels especially hotels that can accommodate groups running at high occupancies and are getting increasingly filled up. And so consequently, we are seeing better bookings as we look outwards for the second half of ’15 or ’16 even for ’17 as company start to realize that they need to lock in the spaces that they want for the events that they want to have in order to make it certain that they are getting the right date in the right hotel, so I think that’s a very favorable trend.

I agree with that, the long-term trends are good, but I would also say that even the short term trends the bookings in the quarter for the entire year for 2015 if you look at that way, the volume was up 13.5% and the average rate book it was up approximately 4.5%.

And switching gears I guess to some of your franchising activity, you completed a number of these transactions this year and you have some more to go. Could you just broadly discuss the economics of these deals? Are you paying lower fees? Have you had more control over the asset or how are you looking broadly at this going more towards a franchise and third-party operator model?

I think what we’re finding, there is a variety of different situations that we've had this year, so in some cases it just moved. We may or may not be changing the brand and may or may not be creating a different type of a hotel by become -- looking to be something like what we’re doing at the Logan or at the Canby, so there is no one great story, but I think broadly speaking what we’re finding as we evaluate these opportunities to convert to a franchise operator and a little bit more of the local market focus on the marketing side. So we are expecting in each instance to varying degrees to see a better revenue blocking. And in most cases, this is because these hotels are less dependent on group business and a little bit more focused on corporate transient. And then we’re definitely seeing a leaner expense model which is lean enough or more lean than our existing model enough to offset the slight increase in fees that we incur in some instances when we convert from a managed to a franchise model. So the bottom-line is in each instance like we’re making the switch, we are ending up with what we expect to be an improved NOI once the new operator have had an opportunity to come into the hotel and for operations to stabilize.

And next we’ll here from Steven Kent with Goldman Sachs.

This is Anto Savarirajan for Steve Kent. You periodically review your exposure to different markets. Understand your view that you would like to have your footprint concentrated in the major markets. But given current trends, would you say you are overweight in a few markets that you would like to move out off and I mean New York City we understand the longer term view there, but is there a view that you are overweight in the market and would like to trim exposure in maybe few of those markets? And the second question, you did mentioned that New York, you have towed down your expectations for the back half of the year, when we look through to 2016 and 2017, how are you thinking about the ability to get back pricing as the supply pipeline accelerates? And are there things that we are missing that perhaps you have a better view off?

Well, I don't know that I necessarily know everything that you know, so it may be hard for me to figure out what you're missing. But I can certainly understand the thrust of your question. As we look certainly New York's been a challenging market and while we expected to be stronger in the second half of the year in terms of 2015, it has been a challenging market for us too. As we look at next year, I would agree with your point that supply look to be increasing next year. I would note that as we all look at those statistics is that at least as we -- based on the numbers that we’ve look at, it tends to be a consistent over prediction a year out of the supply that's going to be delivered in New York and then what it has actually delivered is less. I can’t assure you that that trend will happen in 2016, but we have seen that trend happen in the last two years or three years. Having said that I think that supply will be the concern again next year. The thing that could offset that would be stronger predicted growth in the U.S. in general in terms of economic growth and investment and to the extent that that also would perhaps benefit in terms of additional activity in the financial sector that would clearly be a plus for New York. International travel has been a big benefit to New York. I think this year is probably a bit of a drag on New York. This is one of the reasons why we've seen some weaker performance there. I can’t predict what happens with currencies for 2016, but if the delta and the change in currency with the dollar relative to…

And Anto, keep in mind based on obviously our acquisition this year the small disposition that we have this year in New York and actually the underperformance of New York this year, if you look at New York as a percentage of our EBITDA at the end of this year, it's going to be closer to 12%.

And you spoke of the Phoenician a very large asset. Not a lot of people would have the wherewithal to do such a transaction, Host can. When you look at your opportunity set, do you lean one way or the other where you find that you have an edge with some of these larger transactions compared to some of the other opportunities? And again, would Host at some point think about adding on a select service portfolio, given the popularity it seems to be enjoying now?

I'm sorry, didn’t hear, what type of portfolio?

Select service hotels.

Select service, I would say that to your first point, we certainly recognize that on larger transactions because of our scale and because of our excess capitals that we have an ability to buy those and other and maybe in environment where it's a little less competition than what we might see in other properties, that doesn’t mean that we’re just going to focus on those opportunities, but it is something we certainly recognize as we look at different acquisitions. In terms of adding a select service portfolio, I think I would -- that we would be comfortable on adding select service assets. There is no reason why you could do or purchase a portfolio of those assets, but that would really be driven far more by where those assets were located and what the growth prospects were for those assets located and what the growth prospects were for those assets as opposed to making a strategic movement to adding select service per say.

And next we will hear from Thomas Allen of Morgan Stanley.

Can you just help us bridge your revised 2015 EBITDA guidance? I think you cut the low end by $10 million, cut the high end by $25 million. You obviously cut the high end of your RevPAR guidance and then you also named a number of other kind of drivers. But can you just like maybe quantify each one of them if you could? That would be very helpful. Thank you.

Yes. I think the simple way to do this really is that if you look in terms at the midpoint where we talked about $17.5 million decline, look just a hair over 5 of that is attributable to that the delta between the EBITDA generated by the Phoenician and the EBITDA that's lost by the asset delta we have consummated already this year. As you look at the other three sources that we identified for the reason why the EBITDA declined, it's pretty much an even allocation across those three items.

And then just as a follow up. Can you just help us with The Phoenician seasonality? I believe that's a very seasonal property where you actually lose money during the summer, but could you just help us think about it?

Yes. I'd say that you are right in your assessment of the property, it's probably a desperate season during the course of the summer and it probably generates about two-third's, actually it probably generates about three quarters of its profit during the first five months of the year and about one quarter of its profit over the remaining seven months of the year.

And next we will hear from Wes Golladay with RBC Capital Markets.

You mentioned about the group outlook getting a little tighter, people scrambling to get rooms forward out. Are you seeing any interest in moving to secondary markets and out of these high occupancy gateway markets?

We don’t have a lot of hotels in those secondary markets necessarily. So it'd be probably be a little bit -- we probably don’t have great way to quantify that, but I think one of the reasons why you're seeing the secondary markets at some of the lower price points, begin to perform better is because they have -- they run at lower occupancies and then they have had an office, so they have more room to take on groups and things like that. So I think that's why when you look at what -- as broadly across the industry, the secondary markets have for about last 12 months had bigger occupancy gains and I think it's in part because of what you identified.

It's certainly helping out Atlanta for instance, that's right.

And then when we look at New York, we always hear about the crisis of confidence in that market. I was just wondering how much of that do you think that was actually potentially mix shift is getting more of the lower rated leisure customers in the market. Just curious about how the business transient customer is in that market? Are you able to have pricing power with that customer?

I would say that off the markets across the country, New York is one of those ones where you have the least pricing power right now. I think that's frankly part of the problem that we have all been grappling with. Now you got to remember when you look at New York is that the first quarter you had a very difficult comp that related back to the Super Bowl. And the first quarter of New York has always tends to be the quarter where New York runs at lower occupancy levels compared to its overall stabilized level of occupancy for the year. So in the environment where you have some increase in new supply slightly demand than what we have experienced in the prior year leaving out the Super Bowl equation, you ended up with a fairly competitive environment, even despite the factors that markets landed at a very high overall occupancy level. We do think that as you work your way into the fourth quarter that scenario starts to look a little bit more effective because the market runs at even higher occupancy levels in fourth quarter than it does the rest of the year. Having said that, I think we are still finding that it's not easy to push rates especially for transient business.

And we will now hear from Robin Farley with UBS.

Two questions; one is you may have said this in your introductory comments and I missed it, but you mentioned the group bookings were up for 2016. But I don't think you gave the same, didn't give the percentage numbers the way you did for second half. So I wonder if you could just be a little more specific on group bookings for 2016?

Yes. Robin at this point, it looks like our group bookings for ’16 are trending up close to 6% from a revenue perspective.

Okay. And then the construction disruption, previously you guys had quantified that as being 25 million for the full year. Is that, there wasn’t a reference to that figure in today’s release. I America just wondering if you felt that was still the best way to quantify it.

Okay. Now remember Robin that number refers to the disruption that we were expecting to see in our non-comparable hotels as opposed to the comparable ones. So that number is capturing the delta that we are experiencing year over year in say the Ritz Carlson in Phoenix or the Four Seasons in Philadelphia, the Axiom in San Francisco. Those hotels where they’re being closed for part of the year or in the case of the San Diego Marquis where we eliminated a major chunk of our meeting space in order to build the new ballroom. I would say that number had trended up just and that is really what part of what we were referring to in our comment about the increased loss in effect because of the severance and weaker operations at the Ritz Carlson and the Four Seasons in the spring. But in the bottom-line those Hotels was simply that with as the hotels were focusing -- essentially as the management teams and employees focusing more on closing and what they were going to do next, and we overestimated the profits that we thought we would generate during next period. We have been conservative but it just turned out to be weaker. The good news is with that problem has no impact on what happens with the hotel next year.

Correct. Obviously increased severance cost this year, obviously we’ll not impact next year.

Okay. That is great, thanks. And then just a quick clarification on the group comments for 2016, the revenue up close to 6%. What was specifically the Q2 bookings in Q2 for 2016, the change?

Robin, I don’t have those handy.

Okay, no problem. Thank you. I can get that.

The bottom line though is the same trend that we had otherwise been seeing was that we were our situation in ’16 and in ’17 during the course for the second quarter.

And we’ll move on to the question from Ryan Meliker with Canaccord Genuity.

I just had a couple of follow-ups for you, just to piggyback off what Smedes was asking earlier with the potential to sell incremental assets. You guys are obviously doing a lot of things that are creating value whether it be ticking off assets to sell one by one, or converting to third-party operations, or buying back stock at lower levels, which all make sense but none of it seems to move the needle that much given your scale. You mentioned the willingness potentially to do a larger portfolio transaction. Obviously you guys have historically trimmed the portfolio on the bottom end. But if you were going to do a larger portfolio transaction I guess how do you guys think about your portfolio in terms of the size that you might be willing to dispose of given the right opportunity in the market?

Ryan I think that’s a hard question to answer any abstract. And I wouldn't want to leave people with the sense that we think we need to sell a large number of our assets. We think we have a very strong portfolio at this point and we’re very happy with how the bulk of it is performing. So I think it really comes down to, we’re going to continue to, as you described, we’re going to sell if the weaker assets within the portfolio. And as we continue to do this over the course for the last number of years, the quality of what we’re seeing continue to improve. But I wouldn’t want to start to speculate on what a larger transaction might look like, because I wouldn’t want to raise the expectations that something like that was likely.

Okay, that is fair enough. And then just the second question I had was, Greg, you had mentioned that New York started to turn in June but you are still somewhat wary about New York because of slowing international travel. We've heard from others that they haven't seen any slowing in international travel. I know the airline data is lagging, but that is not showing any slowing in terms of the in-planements and de-planements for travel abroad. Is this specific to data that you're getting from your hotels associated with international bookings or is there some other data source; I guess what gives you confidence that you are seeing a slowing in international travel to New York?

I think the airlines added that we are seeing nationwide is suggesting that travel from Europe is off a bit, and specific data that we’ve got in for our individual hotels in the market has suggested that we have seen weaker travels from Europe over the course of the first half of this year. Now as you then look at -- I would point out that on Europe, a lot of the analysis on Europe has been EU currency countries are down in terms of travel. The UK where the currency has been stronger and travel from Switzerland which I think has been much smaller piece of it, has actually been up a bit. But we’ve also seen, I think in some of our assets we have seen that travel from Asia has offset this decline in EU and in other hotels we have not seen that I think that in a lot of cases this has to do with for travel booking that the individual hotels have gone after, it has to do with their group pattern. So it is tricky to draw broad conclusions. We’ve done the best we could to interpret sort of variety of different data points to give you a sense that when we look at it overall we feel as if international travels been off slightly from New York this year.

And then just one last follow-up on New York. It sounds like sequentially things got much better in June. We heard from one of the smaller hotel REITs that their New York in July was up 7%. Are you seeing continued sequential improvement? I am not asking for guidance or detail, but just are you seeing that trend that you saw in June persist well into July?

We look at the first few weeks of July; I say we’re roughly in line with what we saw in June. I want to say we’ve seen acceleration. But I think we’re still comfortably positive. So hopefully that will continue for this week and to the rest of the summer.

And next we’ll move to a question from Jeff Donnelly with Wells Fargo.

Just sticking with New York, I mean the supply/demand outlook there for 2015 and 2016 certainly seems challenging. I think it has been talked about quite a bit. And it could cause some maybe rockiness in cash flows. I am curious, Ed, what is your perspective on the direction of asset prices in New York in light of that environment? Because we certainly had robust prices; it seems to have disconnected a little bit from the operating cash flows. Do you expect that to sort of reconnect one way or another?

Imagine that the cap rates will say low Jeff, just because there is no inherent attraction to the market, but I would say that I would, is that one of the things that I think we’re going to find out over the course of the fall, with our intention to move forward in marketing and asset is to get a sense of exactly how strong the market would be. A lot of the activity that you've seen so far as the more attractive prices has been international buyers. I think they are going to continue to be attracted to the market, because they have perhaps a longer perspective in terms of what’s going about the attractiveness in the New York market and they may have different motivations in terms of the returns that they are trying to achieve with their capital. So overall I would expect that at least when looked at in the context of cap rates then New York will continue to be one of the more attractively priced markets. One of the issue will be what the NOI is that that cap rate is going to be applied to.

And if it will be -- I am thinking, my recollection is that you guys couldn't take action on it until sometime in early second quarter maybe of next year. Are you contemplating bringing it to market in advance of that? Will the closing sort of be well-timed? Or do you feel you need to wait until you are clear to sell that you can begin marketing?

I would say that we are not looking at one of our two largest assets in terms of marketing we are looking at one of our more mid-sized assets, that we think has a more unique story that could be successful -- successfully executed in today's market there.

And just maybe I'll switch gears, and correct me if I am wrong. I thought your original 2015 guidance had no assumption for net investment activity. So is the reason that the year-to-date net investment that we have seen of about $260 million is impacting your 2015 guidance simply just a timing issue? In effect the seasonal contribution of The Phoenician as you mentioned in the second half just isn't enough to offset what is probably a pretty high cap rate on the non-core asset sales?

I would say that it's a high cap rate on a non-core sales just to make that a general point there. We have been selling -- that assets that we have sold when you take into account the asset and then you -- that might be associated which is I think only significant in the phase of one of the sales. We have been getting very attractive cap rate and this fixes for those deals. It is what you survive which is fireline as it's in the desert, you make your money in the first part of the year. And you don’t make that much in the last seven months of the year. The assets that we sold -- you think about Boston and some of those other markets, even Chicago tend to be stronger in the summer and in the fall and tend to be relatively weak in the winter and in the very early spring. So we just ended up in the scenario when you look at it for '15 is we ended up buying an asset that's strongest performance has been in the period of time before we acquired it. And the assets that we were selling not to the same degree, but to some degree have a stronger second half of the year than the first half which is why the net delta is negative this year, but on a pro forma basis would be positive and certainly we would be expecting when we look at it in the context of 2016, we are confident we have added to EBITDA of 2016 virtue of our assets.

And now we will move on to a question from Ian Weissman with Credit Suisse.

Yes. Good morning. Just shifting gears a little bit on Houston. Clearly it came in weaker than you had anticipated. I guess my question is, is the business drop-off in that market just companies delaying business or you are seeing cancellations?

I think it's a little bit of both Ian. And as I mentioned we also had some other issues in the quarter whether it is disruption or the flooding that I talked about. I think when we look out into the second half of the year, certainly Houston was better than the RevPAR decline that we announced this morning for the second quarter. But having said that, I think when we look at our second half forecast today for Houston, it's slightly lower than what we were predicting a quarter ago for Houston.

Your expectations for Houston I mean today Shell announced they are laying off 6,500 people and 1,000 of those will be felt in the Houston marketplace. Is your expectations for Houston taking into account a worse economic environment and more job layoffs or are you feeling like your outlook is on sort of steady as you goes, business operations in that market?

Right. We try to take into account all those factors. The negative factors that you just mentioned, the group booking pace actually the third quarter is actually quite weak, the flip side is that the group bookings phase in the fourth quarter in Houston is extremely strong. And so we are trying to take into account all those things including the fact that some of our disruption will be behind at this time.

Okay. Thank you very much.

Yes, I think trying to keep in mind, Ian, is that Houston is really about 2.5% to 3% of our -- So obviously pretty likely move for us.

And now we will hear from Shaun Kelley with Bank of America Merrill Lynch.

Hey, good morning guys. Thanks for taking my questions. So I just wanted to talk a little bit more about some of the international hotels in the portfolio. So thinking about what we are seeing out of Brazil and Canada which have been obviously particularly weak. A question sort of is as you look forward Ed, and you are starting to focus a little bit more on refranchising or franchising away from managing in some of the US markets, do you think that some of these smaller international markets are starting to become bigger distractions and those are areas where you could look to prune the portfolio a little bit or are these still I think part and parcel to the Host strategy at this point?

No I think we are. I would say that we have a disproportionate number of international hotels in the market right now. And some of that is a I say that part of that's strategic and part of that is also tactical from a standpoint that we look across the portfolio, there are five different metrics that we use in purchase deciding what asset to sale. These were assets there moved up on the listing - I would say that in terms of what's happening in real and what's happening in Calgary and the back of the growth international RevPAR down significantly. The Calgary has been a challenging room renovate, but long-term it's been a good market for us. Short-term it's suffering both for the renovation and long-term it’s been a good market for us, short permit suffering both from the renovation and then some of the same issues that exist in Houston, because that’s also, that’s probably and it’s equivalent of the Houston market. But certainly as a general asset, but I wouldn’t see that as a distraction. In the case of the real assets we continued to understand what's happening in that market from capital flows and things like that. We know we got a strong year probably next year with the Olympic, I think if we saw the right opportunity to execute to sale, we would be open to that. But we also want to be thoughtful about capturing good prices there too.

Thanks, Ed, I think it is really clear. And just to be, just to go back to the international or the marketing of the hotels that you talked about, because I missed some of the upfront comments. Just to be clear, included in any of the international sales are you a net seller in Europe or are you actually -- is nothing in I guess the JV contemplated there?

I would say, we expect to be a net seller in Europe this year. We are still -- that is the market that we are still interest in acquiring. So that is what we are certainly looking aggressively there. But I would say looking in our overall level of activity and handicapping that, I would say that we have already sold one asset there. We got very good pricing on that. And I think we’re more likely to be, we’ll be in net seller in Europe this year more likely than a net buyer.

And now we’ll move to question from Chris Woronka with Deutsche Bank.

Just one for me. Can you guys maybe talk a little bit about as you look out to next year and I’m really not asking for guidance? But on the renovations, which obviously have had kind of a disproportionate impact for you this year, how much comfort do you have that those, that the impact will kind of naturally reverse in terms of whether it is group bookings at some hotels or your discussions with the corporate room buyers or anything like that?

Chris, as it relates, as we talk about those non-comp hotels which is where the bulk of the problem this year, the one that have been close. We’re certainly based on the initial results we’re seeing, We feel good about how those properties will perform next year. But having said that, but also say that we’re in the midst of construction; our management company has just taken over. All of those hotels tend to be a little bit more transient than group dominated, I am thinking more specifically of the one in San Francisco as well as both Phoenix and the Philly assets. So I don’t know that we have a lot of good indicators right now other than our overall underwriting of how those assets is performing in those market. We should have better insight into that as we get into the third quarter fall, and certainly as we get into the next year’s first fall, only from the standpoint, but that point the operators will be in place, the product will start to be more visible in the market and we’ll have a better sense of the bookings. But we’re expecting across the board in those hotels, but not only recapture the loss EBITDA from this year, but also to be adding meaningfully to EBITDA over the course with 16 and 17. So I think that I’m certainly confident that we’ll recapture most of the, all of a lots EBITDA next year. And then the real question is how much is that expect to growth and we have been 16 versus 17.

Thank you. And that does conclude our question-and-answer session. I’d now like to turn the call back over to Mr. Walter for any additional or closing remarks.

Well, thank you all for joining us on the call today. We appreciate the opportunity to discuss our second quarter results and outlook with you. We look forward to providing you with more insight in the remainder of 2015 and third quarter call in the fall. Have a great day. Enjoy the rest of the summer. Thanks.