Question-and-Answer Session
Operator
Your first question comes from the line of Ali Mogharabi – B. Riley & Company
Ali Mogharabi – B. Riley & Company
Gary I think you mentioned regarding your HD rooms, how many HD are actually upgraded in Q4, I missed that? That were upgraded, the cable programmer will actually pay?
Gary Ritondaro
Those are HD free to guest rooms for the Marriott brand and as I mentioned we have about 25,000 rooms have been converted out of the 130, we have another 25 to 35,000 waiting to be installed and basically the rest are out in contract waiting for the contracts to come back. We plan to install about 50 to 75,000 rooms this year which would bring our total of the 130 up to about 100,000 rooms.
Ali Mogharabi – B. Riley & Company
Okay, and can you give, and again I may have missed it, can you give me more detail on what the $6.1 million restructuring represents? And also how much more restructuring going forward?
Gary Ritondaro
Well we certainly, again there’s two issues with restructuring that I would mention. The first one is the accounting records where we’re booking the accrual which is what we’re talking about mainly in the $11 million that we booked throughout the year of 2007. And then of course we will continue to pay out some of the benefits in 2008.
Ali Mogharabi – B. Riley & Company
Okay and you guys are providing details so I’m going ask some detail questions here. Do you guys have an idea how much it costs now to install an HD room?
Scott Petersen
Well it’s highly dependent upon the size of the property, so in the fourth quarter we had the average size of property skewed toward the small end which have the impact of driving the average install cost. On a kind of a normalized room basis, through the third quarter the year to date information I had was ranging around the, between $400 and $425 per room and I would suggest that that is probably a more realistic going forward level. Engineering is very close to having a second generation kind of engineering platform ready for release. We expect that to come online somewhere in the second quarter which will have the impact of reducing, especially on the smaller size properties, could easily take $30 to $40 per room even off the small properties and would have benefits all the way across. So there is just as well you know five years ago when we first came out with out digital VOD systems with the storage, the average cost to install a room back then was $450 which we took down to $350 over a five year period of time. Somewhat to the fourth quarter I don’t believe represents a good run rate, that was a, the balance and the blend of properties in Q1 and our visibility in Q2 would be more normal that you’re going to see some nice reductions on that going forward.
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