Please standby, we're about to begin. Good day and welcome to the Host Hotels & Resorts Incorporated Fourth Quarter and Full Year 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Gee Lingberg, Vice President. Please go ahead, ma'am.

Thanks, Anna. Good morning, everyone. Welcome to the Host Hotels & Resorts fourth 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 Law. 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're not obligated to publicly 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, and our 8-K filed with the SEC, and on our website 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, Greg will provide a brief -- Ed will provide a brief overview of our fourth quarter and full year results, and then we'll discuss our disposition and redevelopment activity, as well as our company's outlook for 2016. Greg will then provide greater detail on our fourth quarter performance by markets. Following their remarks, we will be available to respond to your questions. To ensure we speak to as many of you as possible, please limit yourself to one question and one follow-up. And now I'd like to turn the call over to Ed.

Thanks, Gee. Good morning, everyone. Looking back on our performance in 2015, we had an active year and undertook a number of initiatives to capitalize on value enhancing opportunities to better position our company for continued growth and success. We sold more than $1 billion worth of hotels including five of our nine hotels in Asia as we make good progress on our plan to exit the Asia Pacific markets. We returned $1.3 billion to shareholders in the form of dividends and share repurchases. We invested more than $1 billion in new assets and capital improvement including the acquisition of the iconic Phoenician resort as a completion of the major redevelopment of four hotel and finally we refinanced more than $1.4 billion of debt reducing our average interest rate by 110 basis points to 3.7%, extending our maturity schedule and further solidifying our industry leading balance sheet. Looking ahead to 2016, we will continue to support a disciplined approach to actively managing our portfolio and additionally allocating capital. We've remained focused on continuing to improving operational and financial performance to better drive results for our shareholders. Now let's review our results for the quarter and the year. Comparable hotel RevPAR for the quarter increased 3.6% with rate growth of 1.7% and an increase in occupancy of 1.4 percentage points. For the full year, our portfolio achieved an average occupancy of more than 77% allowing the hotels to drive average rate increase of 3.3% resulting in an improvement in Comparable hotel RevPAR of 3.8% which equals 4% when adjusted for the impact of the USALI accounting changes. Adjusted EBITDA was $344 million for the quarter and $1.409 billion for the full year exceeding consensus estimates and our prior forecast. Our adjusted FFO per diluted share was $0.39 for the fourth quarter…

Thank you, Ed. Despite the fourth quarter headwinds as described, several of our important markets, including Florida, Los Angeles, Atlanta, San Diego and Boston experienced excellent RevPAR growth and continue to give us confidence as we look at into 2016. Let me provide some specific commentary on our major markets. Florida performed very well and produced the best domestic market performance with 11.7% RevPAR growth in the fourth quarter, 310 basis points above the star upper-upscale market RevPAR. Strong group business at our Orlando World Center, Ritz-Carlton, Naples, Harbor Beach Marriott, and Camby Airport Marriott, contributed to high average rate growth at these properties. With a group revenue increase of almost 22%, our managers at our Florida hotels were able to institute more aggressive pricing strategies which increased transient rate by approximately 7%. In addition, the strong group business resulted in more than 23% growth in food and beverage revenues. RevPAR of hotel from Los Angeles grew 9.8% in the fourth quarter as several of our properties benefited from renovations that occurred during the same time last year. Once again, strong RevPAR growth in Los Angeles was the result of robust average rate growth of more than 5% in both transient and group business. On the back of group business strength at our hotels, our managers were able to drive food and beverage revenue growth of more than 17%. Looking forward, group booking pace in Los Angeles looks very strong as the market is expected to host eight addition city-wise in 2016. As a result, we expect continued solid performance from our Los Angeles properties. In Atlanta, RevPAR increased 8.2% for the quarter, primarily as a result of average rate growth of 6.3%. Transient average rate increased 6.6% and 5.2% respectively. Food and beverage revenues at our properties in the…

[Operator Instructions] And we'll move first to Smedes Rose with Citi.

Hi, good morning. I wanted to ask you on the asset sales as you bring your assets to market, have you seen any surprises around the level of interest or the pricing that you're getting relative to expectations?

Not really Smedes but that's probably reflecting the fact that realistically since the summer it's been clear that the pool of buyers for assets, second half of '15 and into '16 is a bit smaller than where it was in 2014, primarily because the REITs [ph] are not aggressive buyers at this point in time. So I think we launched those particular sales was an understanding that we were appealing primarily to two groups; private buyers, often working with operators, and then international buyers who are probably also either using a good existing operators at hotel aligned with the new operator. And so with that I'd say that we have -- I think I've talked a little bit at the last call, interest has been solid, it's probably not as deep as it had been in the past but its still, and it's more than one person bidding on individual deals. I think we're getting very comfortable with the quality of the bids that we're getting. And we continue to feel comfortable that we'll continue to close sales than we're at the phase that we've been on.

Okay. And then the other thing I just wanted to ask you is, it's a follow-up. You talked about group trends pacing up around 6% for 2016 on revenues. Have you seen anything over the last several months since your last call in terms of the tender of corporations willing to book group or kind of, just the pace relative to the -- kind of backdrop or the issues we've seen around economic growth.

All we have seen on the group side, really throughout '15 and then looking at '16 and at this time frankly, even looking further down the road into '17, it's good strong group booking. And it's carried all the way through last year, and we expect to see that continue this year.

All right, thank you.

Thanks.

We'll now take our next question from Harry Curtis with Nomura.

Hi, good morning. A couple of quick questions. So it's a follow-up to Smedes question, year-to-date, to the extent that you've had any major conventions, can you talk about cancellations in attendance?

Harry, I don't think -- there is always adds and flows at individuals, I think Greg might have described a little bit of that but reality is that so far in terms of what we've been seeing over last couple of months is that we haven't seen any signs of weakness in attendance.

Okay. And then my second question is, could you give us an assessment of the condition of your current portfolio, and specifically you did give us guidance as to how -- how much less you are going to be spending in 2016. As you look even further ahead, there is no budgeting done yet but do you think that your CapEx into 2017 can keep declining?

Our expectation at this point would be that 2017 would be at or it should be above where we in 2016. Our goal for the last two years has been that '16 and '17 would be lower CapEx years, I think it's still little hard to anticipate beyond that but we are expecting levels at similar to where we are on the maintenance CapEx side. And then as it relates to the -- where we would describe as our redevelopment CapEx, that will depend upon what projects we might identify for '17. At this stage I don't know that there is anything specifically on the book so if I had to predict today what would happen in '17, I would expect to see that spending decline.

Yes, I guess what I was specifically asking also is that, it is just your qualitative assessment of your portfolio and are there any glaring CapEx requirements that you need to address?

I would think that the quality of our portfolio is quite good at this point in time. We have spent heavily on the portfolio over the course of the last several years. So when we measure the portfolio in terms of its effective age, it's that number is as attractive as it has ever been, looking at how recently have the rooms been done, how recently has the meeting space been done, how many lobbies of food and beverage outlets have been done. So I don't see that if I -- there is always going to be an App center too where we made a conscious decision not to do capital for a variety of reasons and some of those were the ones that we're intending on selling because we think that allowing the buyer to do that capital will ultimately enhance the total price that they'd be able to pay for the asset taking into account the CapEx that might be required. But outside of some, a handful of unique situations like that, our portfolio is in good shape and the fact that we're spending less this year and a little -- topmost likely next year, is not an indication of shorting the portfolio of capital that it needs, it's more of an indication of the fact that we're in good condition.

Very good, thanks.

And we'll now take our next question from Robin Farley with UBS.

Great, thanks. I wonder if you could quantify in your RevPAR guidance we have 3% to 4%. How much of that is held by the renovations, you mentioned, those four properties that had significant renovations, and I think you'd initially expected Q4 RevPAR in '15 to be your best RevPAR quarter for the year because of those renovations. So I assume some of the 3% to 4% or I don't know if you have that sort of fully adjusted not including benefit of the renovations.

Yeah, let me try to provide some clarity on that, because in a couple of the write ups that I saw this morning, I could tell that folks weren't exactly following the differences between some of these assets. So most specifically the four assets that I referenced when I was talking about the ones that are going to have a significant improvement on a year-over-year basis, so the Logan in Philly, the Camby in Phoenix, the Houston Airport Marriott and the Axiom in San Francisco. All of those hotels are for our RevPAR purposes and are forecast non-comparable. So the incredible increase in revenues that we will see at those hotels is not included in our RevPAR forecast. And so that's one of the reasons why I think people -- we are getting the list from that and we are trying to describe the list that we're getting from an EBITDA perspective, but the benefits of that are not showing up in our comparable RevPAR numbers. Those numbers will not likely show up until most likely '17 when those projects have been in our portfolio, operating on – stabilized fashion, but operating as a completed hotel for a full year. So we'll see the list in '17 from those assets but we're not going to see any list in our '16 reported RevPAR from those assets.

But I guess you had other renovations as well during the year last year, and your guidance for Q4 you had originally said that the RevPAR would benefit in Q4 would be the best of the four quarters because of renovation. So even if it's not those four specific sort of major, were you close the property at the time, can you talk about the benefits of renovations that other property might be included?

Robin, I think we did see some -- we did expect to see some benefit in the fourth quarter from the less construction disruptions. So you're right about that. And I would say that in the end I don't know – our RevPAR came in but while we had anticipated it. And I think that was not unique to us, that was really an industry wide phenomenon. We did see pick up at a number of the properties that were under renovation. I don't know that we would necessarily view it as overly significant in the fourth quarter. A lot of those renovations had started at the very end of the quarter and frankly with December being a low occupancy month, I don't know that we necessarily saw as much as benefit in '15 as we might have anticipated. We will see some – and some positive benefits from that in the first half of the year, and I suspect that one of the reasons why our portfolio performed so much better than the industry in January, despite the fact that we had even with the winter storm that hit the northeast, it's impart due to the fact that we had -- we did not have as much renovation activity at some of those hotels.

Okay. That's great. Thank you for clarifying. And then just lastly real quick, you mentioned your maintenance CapEx, renewal replacement CapEx is going to be down $60 million in '16. It looks like in Q4 it came in like close to $35 million or $40 million higher than what you had guided to for renewal replacement in Q4. So is some of that -- is that just may be a timing issue that some of the renewal replacement CapEx came in to Q4 that was originally planned for '16?

Yeah, I would say that it was probably -- the short answer is yes. So I think some of that probably had more to do with the timing of when payments were made as opposed to necessarily when the work was completed. But the short answer is yes.

Okay. Thank you.

Thanks.

We'll now take our next question from Shaun Kelly from Bank of America

Hey, good morning guys. Ed, in your prepared remarks you mentioned a little bit more detail on supply growth and how that sort of overlays with the demand environment that you're seeing out there, particularly in some of the urban areas. I was curious if you could just dig in on that a little bit more for us. I mean how generally do you guys seek to react or do you try and manage the portfolio in an environment where the demand may -- on the one side demand is at peak levels, but on the other side, demand may actually not keep up with the supply growth that you are seeing, at least in a handful of markets.

Yeah, I'd say some of them -- there are two ways to look at this, one element of this is we look down the road and as we anticipate markets might see increased supply that does play into some of the decisions we make relative to whether that we retain the asset or we try to market it. So there is a sort of a long strategic perspective that addresses that. As we look at it from a more near term operating perspective, if we see markets that are likely to get additional supply and we think that could may have an impact on our property, so that may guide some of our strategies in those markets relative to the level of group that we would want and the level of say special corporate business that we might try to attract for that individual hotel. So in the markets where we've seen, such as in New York, there is no secret that New York's had a lot of supply. And we have consciously tried to improve the level of group activity that we do in that market as a way to offset some of the increased supply that we expect to see.

That's really helpful. Thank you very much.

Thanks.

We'll now take our next question from Anthony Powell with Barclays.

Hi. Good morning. One more question on group. How did it in the quarter/for the quarter, group bookings track in 4Q and how do you expect that part of the business trend going forward?

I don't know that I have that number right here in front of me. I would say that in the quarter, for the quarter was probably -- I'd rather not guess. I know the bookings in the quarter for '16 were solid and we're running north of 4.5%, so the activity that we have looking for the future was quite good. The way the fourth quarter played out, my guess is that the end of quarter/for the quarter bookings were not particularly strong, but the reason for that was the bulk of the group strength which really in the first five to six weeks in the quarter. It was -- October was filled, because you'd have the movement in the holiday, the Jewish holiday comes from October to prior year in the September. So October was a very busy month, but there wasn't really any capacity at the hotels to take a lot of additional group. And once we got beyond that period of time, you're really at a stage during the year where there is not a lot of group pick up in general. So I think that the activity in the fourth quarter was not particularly remarkable in the quarter/for the quarter, but it continued to be strong for the future.

'16 as Ed mentioned, but also for '17 as well.

All right. Got it. And I think earlier you mentioned that OTA rate was down in the fourth quarter. How are you approaching your OTA kind of allocations in '16 an what are the operators doing I guess to reduce industry reliance on OTAs going forward?

I'd say that in general, because the hotels are running at high occupancies and because the operators especially the major operators are refining their strategies in terms of their relationships with the OTAs, we're generally seeing that business the rate of growth there is smaller than some of the other segments. I think what we ran into the fourth quarter was because we did see what it is generally assumed to be some weakness in corporate travel, there was a little bit more use of OTA options than we had necessarily predicted and what you saw with that was slightly lower pricing in an effort to attract more of that business. So the good news is we were able to get occupancy by opening up those channels through a greater degree, but unfortunately when you watched all that broke across the country, some of that was at a lower rate than what we had done the prior year.

All right. And a small follow up to that question, as you're striding[ph] towards corporate negotiated rates, you mentioned that they're higher, how do you kind of avoid to replay them back in coming quarters? Thank you.

Well, it's hard to -- it's obviously hard to stimulate demand the corporate travel and history has shown us in prior times that you don't stimulate that demand by dropping price. So I think the way our approach was to generally across the portfolio, focus on look at the different assets and take into account the market factors in individual markets. And then look to try to generate, take advantage of the high occupancies to generate better rate growth in those corporate negotiations, but also firm up in markets where you thought you wanted it some additional accounts. To put some math around that, what we're looking at on kind of a comparable basis in the beginning of the year is it our special corporate rates at least looking at things that apply in the first quarter up north of 5%, and last year we were more in the 3% range. So there's a nice opportunity there to see some better results because of improved special corporate rates.

All right. Thanks a lot for all that color.

Thanks.

And we'll move next to Ryan Meliker with Canaccord Genuity.

Hey, good morning guys. Most of my questions have been answered but first of all thanks for a lot of the color on the guidance and how the renovations are playing out. Just one quick question I had regarding Group Pace. Obviously, I think 3Q your Group Pace was up 6.5%, it held steady around that level for 2016. But what we saw in January from the STR data was Group was off dramatically only up about 1.5%. Is that indicative across your portfolio too? And is that just have to do with the timing that you talked about with some of the calendar shifts, but I know they haven't materialized yet, but you are seeing those sluggish Group out of the gate for the first quarter for your portfolio and for the broader industry?

So not entirely, we actually saw – I don't have the segment results yet for January, but based on the bookings that we were anticipating and I don't have any indication to think that it turned out radically different from it. We were expecting better than what you described in terms of Group Pace in January and frankly in February, the month that is weaker for us in Group on a year-over-year is March and that's I think solely because of the change in the Easter holiday timing. So I think we commented in our prepared remarks, the first quarter and the fourth quarter are slightly weak, if you spread our group activity across the year, Q1 and Q2 are still both up, but they're not up as much as Q2 and Q2 and Q3 which are up significantly in terms of revenue pace.

You said Q1 and Q4 was the two weak and Q2 and Q3 are the two strong.

Right. So I guess the question that I would have is do you think that some of your group's outperformance in the first quarter is more driven by some of the renovations and the types of assets that you have and revenue management strategies or do you think that it's not so anomalistic in favor of your portfolio. I'm just trying to get a gage of where group business is throughout the remainder of the year, not just for you guys but for the broader industry in case we're seeing any type of pull back.

I think across the industry I'm continuing from everyone that group is fairly solid, but I'm sure that we are benefiting a bit from the fact that we have less renovation activity and we have hotels that were under construction last year and now are providing either new rooms or new meeting space and it's attractive to our customers. So I'm sure again going back to our January performance, I'd say some of that is reflective of t fact that we had space available and not under construction.

All right. That's helpful. Thanks a lot.

Thanks.

We'll now take our next question from Steven Kent with Goldman Sachs.

Hi, good morning. Just a quick question, it sounds like bookings, just mentioned good shape occupancy expectations and banquet. Why is the margin outlook only up a modest 0 to 40 basis points? Are we missing something on the expense side, because it sounds like you should get some better flow through? And then just as an aside, just because I think it's an interesting issue that we're starting to hear from some of the other companies, are you seeing any last minute or late bookers cancelling and rebooking other places? Are you starting to see some of that activity or more term than you've seen before?

Steve, as -- going to your second question first, we have generally seen that problem in a variety of markets, but we have not identified that in discussions with our operators as the situations that had accelerated in the fourth quarter. We have also been actively encouraging our operators and of course this is one place where working with a lot of the major operators is probably helpful for us to push towards pricing strategies that in effect, creates some frictional cost around changing reservations at the last minute. And we will continue to encourage that they look at either non-refundable rooms or extending the time period for when you have to cancel in order to make it more difficult for people to reserve a room with us for a long period of time and then change their mind at the last minute and rebook elsewhere. But Steve to your fundamental point, we did not see an acceleration of that activity in the fourth quarter. On the margin piece of it, I'd say that some of the fact that the margins – there's no real expense that we necessarily have highlighted that would drive weaker margin performance. We still expect if values continue to increase the hotels and there's a little bit of a – that real-estate taxes will be jumping by more than inflation on a year-over-year basis. But beyond that –

Steve, I guess the one other point I would look at is if you look at our results for 2015, we had 3.8% RevPAR growth and 20 basis points improvement in margins. If you adjust those two things, items or you sally we really had 4% of RevPAR with margins up 35 basis points. And so that's pretty similar to our guidance, right? If you look at the high end of our guidance, we're projecting 4% RevPAR and margins up 40 basis points.

Okay, thank you.

Thanks.

We'll now take our next question from Rich Hightower with Evercore ISI.

Hey, good morning guys.

Good morning.

Just wanted to head back on the guidance for a second here, so I'm curious for what the 3% to 4% range implies for the transient side of the business if Group Pace is up around 6%, I know that includes some of the renovation, so it's not a true same store number. But just sort of what the bridge is between that and the transient implied figure would be very helpful.

I guess what I would say was that is that it wouldn't surprise us if we're up north of 6% right now in terms of group. As we -- because we've sold so many rooms already to potential group customers, it wouldn't surprise us that as we work our way through the year, that the actual increase in group revenue that we experienced by the end of the year would be a smaller number than that. In other words, not have normal, see some follow up in that area especially with an extended booking cycle. So my guess is that as we report group revenues through the course of the year, the actual detail will be a little bit less than that. So that probably addresses the sum of what you're looking at. I would say more probably as may be as a more broad commentary on our guidance in general, our properties are more often -- than our guidance would necessarily reflect. And we do see some benefits whether it's the special corporate rates that I talked about before, the fact that our government rates are up, meaning year-over-year, while that's not a huge chunk of our business, it's one more place where you see some rate increases. I have a number of factors like that that will help with transient pricing. We're not expecting a lot of transient occupancy increase, we think it will be primarily a rate game this year. If we -- I think you're right in your sort of fundamental assumption that as if we hit our numbers, here is the projections that we've identified. We'd probably see a bit slightly more weighted towards group and slightly less weighted towards transient in terms of revenue growth.

Okay, so the group number should still outpace the transient revenue number in any case?

That would be our expectation for now, yes.

Okay. I mean I guess just as a follow up to that, the range of 3% to 4% in this stage in the year is pretty tight, only a 100 basis, you just have enough business on the book. You think at this point too to peg such a tight range at this point in the calendar?

There are as many people in the room with that many theories on how to approach guidance. I guess what I'd say is the way we look at it, we're trying to give you our best insight into how we think the year is going to play out, based on the information that we have available to us. And in the context of this year, we thought that we'd probably moved us to be on a hair on the conservative side. So that's why you see the range that we have.

All right. Thank you, Ed.

We'll now move next to Jim Sullivan with Cowen Group.

Thank you. Ed, just to kind of follow on from that last question as well as some of the comments you made in the prepared commentary part of the call. Your – supply and demand suggest that the negative impact of supply growth will increase over the course of the year. Now we've heard what you've said about the group outlook in Q2 and Q3, but does that mean overall given the supply growth will increase over the course of the year that you expect RevPAR growth overall to be weaker in the second half than the first half?

Not necessarily, Jim because at least as we look at group, the strongest quarter for group booking is in actually Q3. And so I don't necessarily expect that that's what's going to happen. I don't know that in a lot of these markets, the supply necessarily accelerates through the second half of the year, but that's one of the things that we'll need to see how that actually plays out. What we've been noticing in a number of markets is that the outlook for supply, in each of t last few years what's expected to be delivered at the beginning of the year and what's actually delivered by the end of the year turns out to be a lower number because the deliveries don't happen at the same pace as originally forecasted. So that might help mitigate that. But I'd say, at this stage as we look at the year, the only reason why I might anticipate that the first half could be a little stronger than the second half that it relate to construction disruption because we had more in the first half than we had in the second half. But based on the discussions we've been having so far, it feels like it's a fairly balanced year.

Okay. And then in your prepared comments on the markets and I may have missed this -- I don't recall your commenting on the outlook for San Francisco and Denver?

I think San Francisco, we're generally expecting to be roughly in line with the rest of the portfolio, so maybe not the outperformer that it has been for the last few years but sort of certainly not in a level where it's going to be a significant underperformer either, there is no doubt that there is some challenges in that market due to the fact of the convention centers been closed. The booking pace at our hotels is still up compared to last year, it's not up as much as the overall portfolio but we're fortunate that the big hotel there, the San Francisco Marquis is essentially just doing a lot of in-house grew business to deal with the fact that the convention center will have more closings.

And Jim, as I said, 13 of our 17 markets based on the group booking and the supply, and some of the other metrics that we mentioned, I said in my prepared remarks it would actually exceed the high-end of our guidance. So San Francisco certainly would be one of those hotels that are included in those 13 markets. Denver as you know in the fourth quarter for us has actually experienced a decline in RevPAR. We think it will turn positive in '16 but I would think Denver would be sort of close -- closer to call the midpoint to the high-end of our guidance.

And Denver is one of those markets where we do have some construction going on, it's not a big market for us but we built one hotel, it's a redevelopment hotel and the other has some meeting space being worked on.

Okay then finally for me, in terms of the dispositions that you've have under letter of intent. It would be helpful to know if those that are out of the wholly-owned segment of the portfolio or if they are the joint ventures?

All of the assets that were described there were consolidated assets. In one instance there is a partner with a minority ownership piece but they are all consolidated assets.

Okay, very good. Thank you.

Great. Thanks Jim.

We'll now take our next question from Thomas Allen with Morgan Stanley.

Hi, quick question on Houston. I know it's a small part, I think you said EBITDA but if you look at the rate of growth, it improved meaningfully in the fourth quarter, it was off of a bit, much tougher comp in the fourth quarter of '15 and what you saw in the first three quarters? But can you just help us think about 2016 as we sit to lap, at least initial drop in our oil prices? Thanks.

Yes, I'd say we still expect where Houston is one of the markets that we think is going to be challenged in 2016 and I think it's the toss up, it's the weather RevPAR there is slightly negative or flat.

I agree with that. I mean, look, the one interesting thing about Houston, not compared to group markets but the group bookings page in Houston '16 is actually quite strong.

Helpful, thank you. And then just, in terms of your current dividend, you've been paying $0.20 for seven quarters now. You talked a little bit about potential onetime dividends but how are you thinking about the recurring dividend as we sit here today?

Yes, I would say in the long run that our goal is to distribute our taxable income and so when we -- from operations, of course, also from sales. And as we work our way through this year and see both how operating results materialize, as well as what's the level of sales that we complete, we will continue to assess whether we should be doing increasing the raise over dividend or handling things through special dividend. Some of that decision will be tied into our outlook for '17 too as we try to confront that question. We ultimately are certainly interested in being able to increase the dividend when operations -- when the operating results for the company is supported because we'd love to return capital to shareholders in any way that we can.

Thank you.

Thanks.

And we'll now take our next question from David Lowe [ph] with Baird.

Good morning. Ed, you've talked a lot about group and how strong it looks. Can you just give a little background on what you think is driving that? Is it tight employment for white collar workers? And do you have any concerns about weakness in certain industries like energy or emerging weakness in financials or technology?

We're happy to do that David, let me just look at one back here. The wildcard in group over the years has tended to be what I think you're directing your question at, which is what's happening on the corporate side. And what we saw this past year was fairly good, we saw some improvement on the -- in terms of association but as I mentioned in my prepared comments, it's also really good corporate rate improvement as well as some improvement in corporate demand in the fourth quarter. And I think what we're looking at in terms of why we've seen an improvement in group page this year is the combination of slight -- probably a slightly better convention calendar which is -- will reflect itself and is slight increase in association business across all of our hotels. But more importantly, more activity coming out of the corporate side and companies recognizing that they are going to have events and they are now of the mind that they are convinced enough that they are going to have them, that they are making the decisions to book those events in advance and not wait till the last minute because what they've realized is if they wait till the last minute, they are not going to end up with the time or the hotel that they want. So I just -- we work our way through this year while it's fair to assume that there will be some pick up in association business, I'm hopeful that we're going to see good strong corporate growth. That also tends to tying with the fact that we're -- it could reflect itself in terms of better F&B growth too. So I think ultimately, because the corporate group is that adds inflows the most based upon the overall economy, the fact that we're seeing that strong growth is likely, primarily due to strong corporate growth. I'm sure that the oil industry picking a point about different businesses, I'm sure the oil industry with all the challenges that they have is not necessarily booking as many group events as they might have in the past. So it is sort of interesting to see, as Greg just referenced, how strong our group booking pace is in Houston, I suspect that has more to do with a smaller overall group profile for this hotel. But I don't know that we've heard of any other industry besides the energy industry that's cutting back at this point. If anything our numbers would again as we suggest that, they are not only strong for '16, they are strong for '17. That suggest that there is a bit of meaningful level of confidence in companies that are making commitments.

Very helpful, thank you. One more, can you give an update on the W Union Square, you acquired your partner's interest for the beginning of the year. Are you now looking to sell that asset?

That would certainly be one of the assets in New York that we would be open for selling, yes.

Okay. And another one of those is the WNLX [ph]?

If that would be an asset that we would be interested in selling, I would say that that's not on the market at the moment but that is another asset in New York that we would certainly be open to selling. The opportunity in New York in order to get this sort of pricing that tends to make the headlines is to take advantage of assets where there is either an opportunity for a brand change, where there is an opportunity for redevelopment, that's where it seems you could -- that's where you can best take advantage of the property that you own. And so those are the sorts of opportunities that we're trying to explore. We -- it is certainly in that $800 million of assets that we're currently marketing that does include the New York asset, and completing a sale in New York continues to be a very high priority for the company provided we can attract pricing that we think is appropriate.

So on the W-Union Square, is that -- are you able to rebrand that on-sale?

There is flexibility on that asset with respect to management and branding.

Great, helpful. Thank you.

Thanks.

And that does conclude today's question-and-answer session. I'd like to turn the conference back over to Mr. Walter for any additional or closing remarks.

Great. Well, thank you for joining us on the call today. We appreciate the opportunity to discuss our year-end results and outlook with you. And we look forward to talking with you in the spring to discuss our first quarter results and provide you more insights into how 2016 is playing out. Thank you.