Q2 Growth Drivers
Joshua Attie – Citi: You highlighted that food and beverage and audiovisual revenue was strong contributor to profitability and I think you also said that you don’t expect that to continue. Can you just talk about what were the drivers of that growth in the second quarter, were there couple of large meetings and can you provide some commentary on why it’s not sustainable or why you don’t think it’s the start of a broader trend?
W. Edward Walter – President and CEO: Josh, I think that the primary driver of the strong performance in food and beverage in the second quarter was the strong level of group that we had in that quarter. Our group (room nights) were up about 2.5% and that, obviously, contributes to better S&P performance. As I mentioned in my prepared remarks, our banquets and AV revenue were up about 8%, which is really (indiscernible) we didn’t quite research this but my sense is that probably the best we’ve seen over the course of this recovery. On the other hand, because we also had some expansion on the transient side, our outlets did quite well too and that’s been an area of focus over the last couple of years. So, we were pleased to see that. Now, as it relates to the second half of the year, here so I would probably explain this. Our first half of the year – if you combine the first two quarters, food and beverage growth was about 3%. Now, one of the things to remember is that 3% doesn’t take into account the fact that last year had an extra day because of the leap year, if you adjust for that food and beverage growth in the first half of the year, which is really more like 3.5%. As we’ve looked at the second half of the year, consistent with my comments, we see weaker group business in the third quarter and stronger group business in the fourth quarter, we would assume that food and beverage would probably – performance would track those trends. We’re estimating in our guidance that food and beverage could range from 2.5% to 3.5%, and mid-point of that is obviously 3%, so that would suggest that we’d be about equal with what we achieved in the first half of the year. But I won’t really rule out the fact that we could do better in the second half of the year than we did in the first. I wouldn’t be expecting to do as well as we did in the second quarter, but if you compare the half, I think there’s an opportunity for upside. But as we’ve commented in the past, food and beverage is notoriously difficult to predict, and consequently, we’ve gone what we think is the realistic, but hopefully conservative estimate.
Joshua Attie – Citi: Sort of a related question. Your occupancy for the portfolio was running pretty high at close to 80% and that’s even with group being slower, I know it was good in the second quarter. But generally, your occupancy is pretty high and it’s even with kind of weaker group. So, you’ve been able to replace it with other segments. Can you kind of remind us, what is group on a full year basis today versus what you think it should be at this point in the cycle? Then, I don’t know if you have this number handy, but can you help us think about what’s kind of the profit opportunity of closing that gap of remixing toward greater group and how much incremental profits you think you can get just from that remixing from having greater food and beverage and ancillary revenue?
W. Edward Walter – President and CEO: I don’t know that we can really respond to the second part of your question other than that we would obviously expect that as we close the gap on the group side that it – because that will help both with food and beverage revenue as well as with driving better transient pricing because we will essentially shrunk the hotels, we would certainly expect that that would be higher. To put where we are into context on group, at this point, as we talked before, in the downturn we lost about 19% of our group room nights overall and at this stage, we’re running about (9%) or so behind where we were in 2007. So, broadly speaking, over the course of the recovery so far, we have closed about half the gap that developed in the 2008 and 2009 downturn. So, obviously, we are already back to the occupancy levels that we had in 2007, so part of what would be happening as we continue to add group in future years is you’d be expecting to (indiscernible) as I mentioned in my comments our pricing on group this quarter was already above where we were in ’07. That pricing should continue to improve, and just as importantly transient pricing should also begin to accelerate further.
Felicia Hendrix – Barclays Capital: Ed, your quarter and the outlook were relatively more optimistic than your peers, so you’ve already reported in general and on group even though that you’ve hedged some of the strength that you are seeing in group in your comments. Just wondering if you could talk us through what some of the differences are here?
W. Edward Walter – President and CEO: Well, I think as it relates to the quarter, I’d like to think as it’s the combination of us being – owning the right assets in the right market. So combined with the fact that as we’ve commented previously, we’ve invested a fair amount of money in our hotels over the last three to four years and we were expecting to begin to reach the benefits of that this year as our construction spending declined a bit, and therefore we had less business interruption. So, I think that in some ways if I were to look at the primary driver of it, it really ties into the fact that it’s the right assets in the right condition in the right market…
Felicia Hendrix – Barclays Capital: Are you marketing to groups perhaps differently than your peers are?
W. Edward Walter – President and CEO: I don’t know that we would necessarily assume that. I mean, depends on which peers we’re talking about of course, to the extent that the peers share the same operators that we do, I don’t know that we would be marketing any differently to those groups. We have – I think the part of this again ties back into some of the capital investments we’ve made. We have tried to wherever we could create more flexibility in our meeting space platform, so as trends ebb and flow relative to the size of groups and the frequency of groups, we’re in the best position possible to be able to track that business.
Felicia Hendrix – Barclays Capital: And your answer actually is a good Segway to my next question, which really is that you’d still have a fair amount of properties under renovation, so how should we think about the RevPAR impact of those as they roll off?
W. Edward Walter – President and CEO: Well, certainly, as we work our way through the cycle as a particular hotels and renovated, I would expect to you’d see better performance in the following year, both because as a disruption, and secondarily, because we would have made the property better. If I were to look at this year and though in the context of what we would call maintenance CapEx, we’re talking about a range of $280 million to $300 million for this year, so that to me is a level that we would generally expect to sustain going forward. So, it could dropdown in a particular year, but the reality is that’s probably a relatively – that would be what I would expect we would be spending.
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