Good day, and welcome to the Host Hotels & Resorts, Incorporated Fourth Quarter and Full Year 2017 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. Gee Lingberg - Host Hotels & Resorts, Inc.: Thanks, Emma. Good morning, everyone. Welcome to the Host Hotels & Resorts fourth quarter 2017 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 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, in our 8-K filed with the SEC, and the supplemental financial information on our website at HostHotels.com. This morning, Jim Risoleo, our President and Chief Executive Officer, will provide his remarks on our 2017 achievements, our fourth quarter results, the pending acquisition of the three Hyatt properties and conclude with our outlook for 2018. Michael Bluhm, our Chief Financial Officer, will then provide commentary on the expanded disclosures, our fourth quarter performance including markets, margins, balance sheet and our guidance for 2018. Following their remarks, we will be available to respond to your questions. And now, I'd like to turn the call over to Jim. James F. Risoleo - Host Hotels & Resorts, Inc.: Thank you, Gee, and thanks, everyone for joining us this morning.…

Thank you. We will take our first question today from Andy (sic) [Anthony]. Powell from Barclays. Please go ahead.

Hi, good morning, everyone. James F. Risoleo - Host Hotels & Resorts, Inc.: Morning, Anthony.

Thank you for that correction on the name and congrats on the acquisitions. You mentioned that you're acquiring the assets at a 5% cap rate on 2018 EBITDA, but there's also some good near-term growth prospects in some of those markets. Could you talk about what you think the stabilized cap rate could be on the transactions after a couple years? James F. Risoleo - Host Hotels & Resorts, Inc.: Yeah. We're looking at somewhere in the mid-6s. We're really bullish on these markets and these assets and, as I mentioned in my prepared comments, our ability to really get into the properties and bring our enterprise analytics platform to the table and our asset management expertise to just take a fresh look at how the hotels are being run. I'll give you a little more color on this, Anthony, but let me back up and just make one thing really crystal clear. These assets are great hotels. And we can talk about the metrics of each individual property in the markets that we're in. But as we sat back and said, okay, we sold $900 million of assets over the course of 2017 at a relatively low cap rate, $140 RevPAR in the aggregate, with high CapEx needs in slow growth markets. And when the opportunity to acquire these three hotels presented itself in the markets that they're in and our familiarity with the markets, we said, wow, this is a really terrific opportunity to effectively recycle capital. And we had the cash on the balance sheet. We have a great relationship with Hyatt. We feel that we could add value to this portfolio on many different levers. One thing that we didn't talk about with respect to the assets that I think is actually quite critical is based…

Great. Thank you.

Thank you. We will now move to our next question today from Smedes Rose from Citi. Please go ahead.

Hi. Thanks. I wanted to ask you, you mentioned in your guidance, you're including some disruption associated with the Marriott Marquis in San Francisco. Could you quantify that a little bit and kind of maybe talk about the timing of the improvements there in relationship to the Moscone Center coming back online next year? James F. Risoleo - Host Hotels & Resorts, Inc.: Yeah. Hey, Smedes.

Hi. James F. Risoleo - Host Hotels & Resorts, Inc.: So, as I mentioned in my prepared remarks, we had contemplated renovating Moscone, not renovating, but reinventing and transforming a great asset in a great market in 2020. And then of course we all know what's happening in San Francisco next year. I think the last I looked, there was about 1.6 million group room nights on the books being generated by Moscone. And we balanced and did the analysis of should we renovate this year or should we wait into 2020. We think 2020 is going to be another terrific year in San Francisco. So we made a decision to pull the renovation forward and to put us in a position so that we can participate in the growth in San Francisco with a really truly reinvented hotel, which we believe will allow us to significantly increase our yield index in the property and drive more cash flow to the bottom line. The incremental disruption this year as a result of doing that, which is already included in our guidance, is about $5 million.

Great. All right. Thank you very much.

Thank you. We will now go to our next question from Thomas Allen from Morgan Stanley. Please go ahead. Thomas G. Allen - Morgan Stanley & Co. LLC: Hey, good morning. One of the key changes to your release was the increased disclosures around the top 40 hotels. Can you just talk about that a little bit more and if any hotels you just want to highlight, that'd be helpful? Thank you. James F. Risoleo - Host Hotels & Resorts, Inc.: I just think, Thomas, as we talk again, listening to the sell-side and the buy-side, your thirst for greater transparency, greater disclosure, giving you the opportunity to better understand the company and the assets that we have and how they perform, we listened, we heard, we provided. And really, at this point in time, it's nothing more than that. I think that the top 40 provide a really good picture of the quality of this company, the quality of the EBITDA, the valuation of those assets. Take the Kea Lani Palace, which is on Maui, which is the top asset in our portfolio; we didn't provide EBITDA per key, but you can certainly do the math. And if you do the math, you'll see that the Kea Lani Palace is generating $90,000 per key of EBITDA. So, I just don't know how many folks really had a good handle on the performance of these top 40 hotels and we thought it was important to highlight them. Additionally, as Michael mentioned, we also provided seven additional markets to give you a bit more granular look into Florida, as an example, where we have properties on the West Coast. We have properties in Orlando. We have properties on the East Coast. So the various submarkets in Florida, now you're going to be able to have a better gauge on what's coming out of each of those markets and how they're performing. And I think we truly are being very transparent here. I mean, we put a list in of our ground leases, our capital structure, debt statistics, so it's all in one place. You can go find it. You can download the information. And we're happy to answer questions. Thomas G. Allen - Morgan Stanley & Co. LLC: Perfect. I'm sure we'll have a lot. Thank you. James F. Risoleo - Host Hotels & Resorts, Inc.: I know you will.

Thank you. We'll go to our next question now from Harry Curtis from Nomura. Please go ahead.

Good morning. A quick question on the $1 billion of investment, is there a much incremental ROIC CapEx that you expect in this portfolio? And related to that, if the answer is no, as you look ahead, do you think that you'll be seeking incremental acquisitions that really don't require the kind of CapEx that, say, The Phoenician has? James F. Risoleo - Host Hotels & Resorts, Inc.: Yeah. Harry, it's a two part question. So let me answer the first part of your question and then we can talk about the second part. Obviously, as we underwrote this deal and evaluated the transaction, we identified certain ROI opportunities. As an example, at the Andaz Maui, part of the consideration includes an entitled parcel of land at the property to add 19 villa units. Now, we bought the land. It's a dead asset. We're paying real estate taxes on the land. We haven't underwritten the value that we would derive from developing those 19 units. And I think we've got a pretty good track record here, given what we've accomplished at The Phoenician. So we're excited about that one. There are other opportunities at the Andaz. As an example just putting a luau in place, those are real moneymakers. We have that experience up at the Hyatt Ka'anapali. At the Grand San Francisco, we will look at the opportunity to add eight keys to that property. We're looking at the re-concepting of the restaurant and room service. So, yeah, there are opportunities around all these hotels. Those are things that we didn't underwrite in the context of the acquisition. With respect to other assets that are out there that we're evaluating, we're not far enough long at this point on any additional acquisition for me to give you color around capital needs, capital spend, but the one thing I can assure you is that that's all taken into consideration in our underwriting.

Very good. Thanks.

Thank you. We'll now go to our next question from Shaun Kelly from Bank of America. Please go ahead.

Hi, good morning, everyone. Jim or Michael, I think one of your peers yesterday discussed a little bit about possible sale disruptions at some of the Marriott hotels. Is that something you could comment on, just given that you guys have a lot of exposure there and you're probably the best to kind of give us your insights? James F. Risoleo - Host Hotels & Resorts, Inc.: Shaun, are you talking about the integration of the Starwood Hotels into the Marriott platform. Is that....

...exactly, that was the context. James F. Risoleo - Host Hotels & Resorts, Inc.: Yeah. I mean, we've been working closely with Marriott since the day they announced that they were acquiring Starwood. And there is always a little bit of uncertainty early in the process as the two programs are migrated together. We are very comfortable with the direction that this is taking. And not only are we comfortable with it, we're excited about it. Because when the Starwood legacy hotels that we own are merged into the Marriott sales system, we expect to see increases in revenue, increases in yield index going forward. So we've been on it from day one and it's not a concern to us.

So nothing specific on the sales organizations or anything that's changed in the last couple of months as it relates to trying to combine, whether it group sales efforts or anything else? James F. Risoleo - Host Hotels & Resorts, Inc.: They're putting new leadership in place. I mean, this is actually a question probably better asked to Marriott, but I can tell you that they're putting new leadership in place. They are putting the organization in place. They are putting the final bells and whistles on it and about ready to tie a bow here.

Easy enough. Thank you very much. James F. Risoleo - Host Hotels & Resorts, Inc.: Sure.

Thank you. We'll now move to our next question from Rich Hightower from Evercore.

Hey, morning, guys. James F. Risoleo - Host Hotels & Resorts, Inc.: Morning, Rich.

I just want to go back to some of the prepared comments around business transient commentary and I think we've been hearing a pretty consistent message for some time now that even though there's broad-based optimism on the part of corporate entities and CEOs, we're not seeing that show up necessarily in the demand patterns. And I'm curious as to why you think that might be happening. Is it just a function of kind of a choppy calendar for the first part of the year? Is there something else underlying that? I mean, what's Host's broader perspective on why we're not seeing that yet? James F. Risoleo - Host Hotels & Resorts, Inc.: Rich, I think that the statistic that we follow with respect to the business traveler and group business is really business investment. And business investment for 2016 was negative 50 basis points. For 2017, it was 4.6%. For 2018, as of February, the forecast is 5.6%, so it's trending in the right direction. And I think that over the course of 2017, in particular, there was a lot of uncertainty out there regarding whether or not we were going to have a tax bill. There was uncertainty just generally given what was happening in Washington, D.C. I think that now that the tax bill's in place, corporations are still digesting what the bill means to them. But I can tell you that the commentary that we have is people are feeling much better about the economy. They're feeling better about spending money and investing. And when they feel better about investing, that means that they're going to travel, and they're going to come back to our hotels. So in past cycles, we have seen business travel, business transient accelerate when the business investment forecast gets up about 8%. So we're moving in the right direction, and that's why we're cautiously optimistic.

One quick follow-up there, do you think that timing-wise, I mean, maybe after the Easter comp gets out of the way, that we would start to see some of the fruits of what you're talking about really show up in the numbers or we just don't have an idea yet? James F. Risoleo - Host Hotels & Resorts, Inc.: I wish I could tell you yes. If I thought that, Rich, I wouldn't be holding back on you. I'd put it in our guidance. It's just too soon to tell. I think we saw a January that was stronger than we anticipated, based on budgets that were completed in November. We had a 300 basis point swing in January, from minus 1% to plus 2%. And that gives you a high degree of comfort, but I think it's too early to bake an acceleration of RevPAR as a result of the return of the business traveler into our numbers this year. One month doesn't make a trend.

Got it. Thanks, Jim.

Thank you. We'll now go to our next question from Jeff Donnelly from Wells Fargo. Please go ahead.

Good morning, guys, and welcome aboard, Michael. Michael D. Bluhm - Host Hotels & Resorts, Inc.: Thank you.

If I can squeak in maybe a two-parter, just first one was just what details can you share about the key terms of the management agreement with Hyatt for the three-pack that you guys purchased, just curious what you can talk about there? And then, maybe as a second question, I think there's long been a perception that Host has a segment of its portfolio in hotels that may be submarket dominant, but ultimately have lower growth prospects or have capital needs down the road, for example, airport or suburban hotels. Do you see this as a good moment to look at monetizing those sorts of assets or do you feel that they may be providing some earnings stability for the company? James F. Risoleo - Host Hotels & Resorts, Inc.: Jeff, I'll answer your second question first. We have no systematic disposition plan in place for this year. I think that over the course of 2017, you saw us opportunistically sell hotels for a variety of reasons. And this year, of course, we've announced that we're going to sell the W Lex. So we're constantly looking at opportunities to dispose of assets that are in slower growth markets with higher CapEx needs and lower RevPAR assets. Are we sitting here today saying that we're going to package up $2 billion or $3 billion? We're not saying that. And the reason we're not saying it is because we really like what we own today. And we continue to invest in our assets. There's obviously a differential between capital allocation to an asset like The Fairmont Kea Lani or the Hyatt Ka'anapali or the San Francisco Marriott Moscone (sic) [Marquis] relative to a suburban hotel. But there is nothing on the table right now to suggest that we're going to just blow out a bunch of those properties. With respect to the management contract, I would tell you it's a market contract. The terms are proprietary. And really, it's a long-term contract, but beyond that, I really am not in a position to comment on it.

Okay. Thanks, guys.

Thank you. We'll now go to our next question from Gregory Miller from SunTrust Robinson Humphrey. Please go ahead.

Thanks very much. Good morning, everyone. James F. Risoleo - Host Hotels & Resorts, Inc.: Morning, Greg.

Morning. I'm on the line for Patrick Scholes. Could you elaborate on your views of potentially disposing some of your international assets, particularly in an environment of recent RevPAR strength in some of the regions? Thanks. James F. Risoleo - Host Hotels & Resorts, Inc.: Well, as we discussed, we sold our assets in New Zealand. We sold the Hilton Melbourne last year, which took us out of both Australia and New Zealand. And there had been another Four Points that we owned in Perth, Australia that we sold a couple of years ago, several years ago. We have three hotels in Brazil, one in Mexico and two in Canada, as well as our interest in our European JV. So from our perspective again, it's we start with the fundamentals. And the fundamental is what do we think asset's worth to us versus what is the market prepared to pay us for it. And that's the screen that we do on every asset, whether it's international or in the U.S. So, of course, if we are looking at the potential exit of an investment in a market where RevPAR is accelerating, we'll take that into consideration when we determine what we think the whole value is of that hotel.

Great. Thanks very much.

Thank you. We'll now move to our next question from Robin Farley from UBS.

Hi, guys, this is actually Raffi on for Robin. Just had two quick questions, first on group, what was the group pace in the quarter for 2018 and 2019? James F. Risoleo - Host Hotels & Resorts, Inc.: I'm sorry, the current group pace for 2018? We have...

In the quarter, yeah. Yeah, for 2018 and 2019. James F. Risoleo - Host Hotels & Resorts, Inc.: I think that group pace has been around 2% in the quarter for 2018. 2019, I don't have that number in front of me. We're really focused on 2018 right now, but it's probably around the same, I would think, at this point.

Okay. And then, the last one is since kind of this overhang of the uncertainty over tax reform has kind of cleared up, what have you kind of seen in the change of behavior from buyers and sellers out there in the transaction market? James F. Risoleo - Host Hotels & Resorts, Inc.: Well, frankly, over the course of 2017, we underwrote a number of transactions that would fit the profile of asset that we would like to own. We obviously weren't able to come to terms with a transaction that underwrote to our requirements. This year, we're hearing that there may be a few more assets of this ilk coming to market. Nothing's in the market right now. I talked recently with an investor who owns some high-end hotels, of course, to gauge this individual's interest as to whether or not they might want to consider talking to us about selling them, and the response was given the interest rate environment that we're in, we just put 15-year financing on the properties and we're really not interested in disposing. So I think that you'll see owners of hotels become sellers of hotels if they have unique reasons to do so. And one of the unique reasons that Hyatt had was that they're going to asset-light. And they announced on their call last quarter, that they intended to sell $1.5 billion of hotels. So there has to be, I think, a particular reason why someone today would decide that it's time to sell when financing markets are still relatively attractive.

All right. That's great. Thank you.

Thank you. We'll now go to our next question from Chris Woronka from Deutsche Bank.

Hey. Good morning, guys, and appreciate the expanded disclosures. Wanted to ask you the Starwood, Marriott question, but from a different angle, which is, we've heard that they are continuing to kind of cull the portfolio and I know that's a lot of Sheratons and maybe few other things. To the extent that you guys maybe have a little bit of visibility into that, what do you think the net impact on you competitively is in terms of where some of those assets end up versus the markets that they might be in where you have overlap? James F. Risoleo - Host Hotels & Resorts, Inc.: When you say cull, Chris, are you talking about Marriott's disposing of the real estate that they acquired in the purchase?

No, more kind of on the Sheraton side. James F. Risoleo - Host Hotels & Resorts, Inc.: Oh, I got it. Yeah. I got it. In terms of pushing Sheratons that have not been properly renovated out of the system.

Yeah, correct. James F. Risoleo - Host Hotels & Resorts, Inc.: Today, we are down to four Sheraton hotels in the U.S. We own: the Sheraton in Boston, on the Back Bay; the Sheraton, New York; the Sheraton in San Diego; and the Sheraton in Parsippany. So from our perspective, I don't think that the culling process in and of itself is going to impact us negatively. Of course, it's going to be much better for us once the Sheraton brand standards are reinvented and pushed out to the system. And I think Marriott is really making great progress on that front. It's going to take them some time to make this happen. But I think they're very dedicated to fixing Sheraton. Starwood had tried a number of times and really couldn't seem to get to the finish line. So we're supportive of it. And anything we can do to improve the performance of our asset and the guest perception of our asset, I think is a plus.

Okay, very good. Thanks, Jim.

Thank you. That will conclude today's question-and-answer session. I would now like to turn the conference back over to Mr. Jim Risoleo, President and CEO. Please go ahead. James F. Risoleo - Host Hotels & Resorts, Inc.: Thank you for joining us on the call today. We are very pleased with our 2017 results and excited about the strategic transactions we have announced. We look forward to discussing first quarter results and how the year is progressing on our next call. Have a great day, everyone.

Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.