Choice Hotels International Inc (CHH) 2014 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the Choice Hotels International third-quarter 2014 earnings conference call. At this time, all lines are in a listen-only mode. Later, there will be a question-and-answer session, and further instructions will be given at the time. As a reminder, today's call is being recorded.

During the course of this conference call, certain predictive or forward-looking statements will be used to assist you in understanding the Company and its results, which constitute forward-looking statements under the Safe Harbor provision of the Securities Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as choice or its management's beliefs; expects; anticipates; foresees; forecasts; estimates; or other words or phrases of similar (technical difficulty) -- risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Please consult the Company's Form 10-K for the year ending December 31, 2013 and other SEC filings for information about important risk factors affecting the Company that you should consider. Although we believe that the expectation reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you do not place undue reliance on forward-looking statements, which reflect our analyses only and speak only as of today's date.

We undertake no obligation to publicly update our forward-looking statements to reflect subsequent events or circumstances. You can find a reconciliation of our non-GAAP financial measures referred in our remarks as part of our third-quarter 2014 earnings press release, which is posted on our website at choicehotels.com under the Investor Information section.

With that being said, I would now like to introduce Steve Joyce, President and Chief Executive Officer of Choice Hotels International, Inc. Please go ahead, sir. Thank you.

Thanks very much. Good morning. Welcome to the Choice Hotels earnings conference call. Joining me this morning, as always, is Dave White, our Chief Financial Officer.

This morning, we are going to update you on our performance for the third quarter of 2014. I'll give a brief overview of the business results and highlights, and then Dave will cover the financial results in a little bit more detail. But I've got to say I am pleased to say that our results were very strong for the third quarter, exceeding our own expectations in a number of key areas.

Our core lodging business continued to expand this quarter, driven by domestic franchise system unit growth of 1.6%, and impressive RevPAR growth. On the RevPAR front, domestic systemwide revenue per available room increased 9% in the third quarter of 2014, with RevPAR for several of our brands achieving double-digit percentage growth.

Our performance with respect to these two key metrics were the primary drivers of 9% growth in domestic royalties and 8% growth in franchising revenues. Our strong revenue growth performance, combined with continued cost management discipline, resulted in expansion of our franchising margins and 8% growth in franchising EBITDA. We are very pleased with the overall operating performance of the core hotel franchising business. Based on our performance during the quarter, and the trends that we have seen continuing into October, we expect to continue in the fourth quarter. And we've raised our full-year outlook for the business.

On the development front, we executed 113 new domestic hotel franchise contracts for the third quarter. It is particularly promising that many of these franchise contracts are new construction agreements. Our new construction pipeline has been strengthening consistently for each of the past several quarters. And in the third quarter, we saw executed franchise contracts for new construction hotels increase 55% from 20 to 31 compared to the same quarter last year. The strength in new construction franchise sales has been a key driver in expansion of the Company's domestic pipeline of hotels under construction, awaiting conversion, or approved for development, which increased 14% compared to the same time last year.

In addition to a generally improving financing and RevPAR environment, new construction activity is being driven as a result of several initiatives we have undertaken. First, the decision of focused development of our Cambria Hotel and Suites brand in major markets is clearly working. We recently opened a new Cambria in downtown White Plains that aligns our strategic focus for the brand. This follows the opening of the Washington, DC Cambria Hotel and Suites last quarter, and a wave of recent groundbreakings and a pipeline of upcoming openings in major markets.

Second, we are experiencing an increased pace of new construction projects for our Comfort Inn and Comfort Suite brands, with well-established developers in key business and leisure destinations, including Denver, Philadelphia, Pittsburgh and Houston. We believe that this increased interest in new construction is a direct result of our multiyear plan to position the Comfort brand as a leader in its category.

The plan includes a contemporary new prototype that was designed in collaboration with renowned architecture firm Gensler, which offers developers an attractive new construction option just as the construction environment is improving. Last year, Choice launched a landmark $40 million property improvement plan to provide incentive to franchisees to help them update their hotels. The financial incentive we provided represents a fraction of the total amount being invested in the brand.

Today, I'm pleased to say that between our commitment and the Capital R franchisees have committed, we estimate that there are hundreds of millions of dollars in upgrades that are scheduled to be completed across the Comfort system by the end of the year. This signals the value these owners place on the brand and their confidence in the direction it is moving.

A new construction development incentive announced last spring is driving significant interest in the previously mentioned prototype, as well as the fact that consumers are responding incredibly positively to the work that we are doing on the existing hotels and what they are seeing in new construction. In addition to these initiatives, over the past couple of years, (technical difficulty) for hotels joining the Comfort brand, as well as required some hotels to improve or be removed from the system.

Third, we are seeing new construction interest from investors that are pursuing development of dual branded hotels. The primary appeal of these projects includes construction efficiencies, operational productivity through shared staff and facilities, and the ability to tap into diverse customer bases. This allows developers to capitalize on the market demands of different kinds of travel -- business, leisure, transient and extended stay.

Finally, we are seeing heightened interest in new construction of our Sleep Inn brand as a result of the rollout of its design prototype and mandatory systemwide renovation program, which we call Designed to Dream. Now with more than 160 hotels with the new design concept, developers are taking note, particularly since the Designed to Dream hotels are enjoying significant RevPAR premiums and greater guest satisfaction.

Turning to distribution, the revenue contribution of our central reservation system increased to 38% in the third quarter, up 230 basis points compared to the same time last year. choicehotels.com revenue increased by more than 13% for the quarter, and we had twice as many days in which our site brought in $5 million or more in revenue -- 53 in July/September 2014 versus 26 last year. Bookings via our mobile applications continue to grow at a pace and yielded an increase of 41% for the quarter compared to the same time last year.

Our distribution strategy is delivering great results. We are staying ahead of guest booking needs, and we are leveraging our distribution channels to deliver an increasing number of customers to our franchisees hotels.

How about a little bit about SkyTouch? I want to give you a brief update, but to let you know that we are very excited about the potential for SkyTouch. Since our last call, SkyTouch has continued to gain increasing traction, and has seen accelerated momentum on realized sales, and on sales and marketing efforts that it expects will lead to future sales.

To date, SkyTouch has contracted with approximately 72 hotels, representing nearly 5,000 rooms. More than half of these hotels have already come online, and are up and running on the platform, with the remainder in the process of being onboarded. Approximately two-thirds of the hotels under contract are individual independent hotels. Importantly, the remaining one-third of the hotels under contract are a subset of the hotels attributable to four separate brand and/or management company portfolio groups representing collectively more than 1,000 hotels.

We believe that SkyTouch has an opportunity to expand the SkyTouch platform beyond the currently-signed hotels within these systems. Given that the number of hotels with these existing customers is large, and represents opportunity for sales growth, SkyTouch's near-term focus is on continuing to deliver strong product results for these customers and on expanding the footprint of hotels within their portfolio that use our system.

In addition to results related to actual signings of new customers, SkyTouch has continued to expand the pipeline of potential customers. Its sales and marketing team is tracking brand and management companies representing more than 20,000 hotels. The status of these sales and marketing dialogue with these prospects ranges from introductory meetings and product demos to participation and full-blown RFP processes.

Based on these activities, we continue to believe there is strong interest from potential customers for the SkyTouch product. We expect this strong interest to be reflected in increasing sales momentum moving forward.

A few other highlights related to SkyTouch. SkyTouch recently received certification from a provider of central reservation systems for a significant number of hotels of the SkyTouch interface with that CRS. This is a significant milestone for SkyTouch, as it now has the opportunity to sell SkyTouch Hotel OS product to the nearly 9,000 hotels that use that system, including Vantage Hospitality, one of the four brand companies I mentioned earlier that have designated SkyTouch as a preferred vendor. This represents the third such central reservation system provider that SkyTouch has been interfaced with.

During the last earnings call, we also referenced a separate development agreement with a brand company representing more than 500 hotels. That development agreement covered requirements to meet their system needs. We are happy to say that these development efforts are underway. And, in addition, SkyTouch has started discussions around a broader agreement that would bring this chain's more-than-500-hotels onto the Hotel OS.

We are pleased with the progress of SkyTouch. We remain very excited about its potential impact on our future growth. And we will continue to keep you updated on the sales front during future calls, including, at some point in the future, a call on breakeven and profitability for this division. In our view, our continued investment in SkyTouch represents a prudent, controlled level of investment against a significant opportunity that leverages our core competencies in the hospitality technology space. We continue to be optimistic, based on the results to date, that our investment in SkyTouch can contribute to enhancing our shareholders' value.

Finally, before I turn the call over to Dave, I wanted to note that, during the third quarter, the (technical difficulty) to repurchase a block of approximately 400,000 shares of the company stock originally held in the Estate of Stewart Bainum, Sr. The Company repurchased those shares in September. There are approximately 2 million remaining shares held by the Estate, and it is possible that the Company may be offered the opportunity to repurchase some portion of these shares in the future, which we will consider at that time.

Overall, we are obviously very pleased with the results of this quarter and where we are headed for the fourth quarter. Now let me turn it over to Dave White to share a little bit more detail about the financial results. Dave?

Thanks, Steve. As you may have read in this morning's press release, we reported diluted earnings per share from continuing operations of $0.67 for the third quarter of 2014 compared to $0.65 per share in the prior year. EBITDA from franchising activities for the third quarter increased 8% over the same period of the prior year, due to an 8% increase in franchising revenues and a 40 basis point expansion of our franchising margins.

The increase in our franchising revenues for the quarter was driven primarily by continued growth in the franchise system and strong domestic RevPAR performance. Nearly 80% of the topline franchising revenue growth, which was $7.5 million, flowed through to the franchising EBITDA. As a result, our franchising margins expanded from 71.9% in the third quarter of 2013 to 72.3% in the current quarter.

Our domestic royalty revenues increased by approximately 9% to $79.5 million, due to a combination of increases in RevPAR and in our system size, partially offset by a 4 basis point decline in our effective royalty rate. Our RevPAR growth of 8.8% for the third quarter was driven by a combination of a 320 basis point increase in systemwide occupancy and a 3.4% increase in our average daily rates.

We attribute the increase in occupancy rates and our overall RevPAR improvement to both increased leisure travel -- which we believe reflects the improving US economy -- as well as our efforts and initiatives to improve business delivery and hotel revenue yield to our franchisees. As a result of the trends we are seeing in the business and our year-to-date RevPAR performance month-to-date through October, we now expect full-year RevPAR to range between 8% and 8.5%.

On the supply front, we were able to grow the number of hotels operating in our domestic franchise system by approximately 1.6% compared to September 30 of last year. With respect to franchise development, we are pleased that the fundamentals that drive new hotel development and conversion opportunities continue to strengthen, as both the RevPAR and financing environments improve. You can see the impact of these trends in our results for new construction franchise agreement executions, which have increased approximately 80% year-to-date compared to last year.

We are also seeing positive momentum in relicensing activity. During the quarter, we executed 85 relicensing and renewal hotel franchise agreements, an increase of 18% compared to the same period in 2013. We believe the industry is in the early stages of the supply growth portion of the cycle, which we expect to accelerate over the next several years. We continue to expect our 2014 franchise sales activity levels to exceed last year's levels.

Now let me turn to the outlook for the remainder of 2014. As always, our outlook assumes no additional share repurchases under the Company's share repurchase program. Our outlook also assumes the effective rate -- effective tax rate for continuing operations to be 30.7% for the fourth quarter and 30.3% for full-year 2014. Our franchising activity guidance assumes that our RevPAR will increase approximately 9% for the fourth quarter, and range between 8% and 8.5% for the full-year 2014 -- clear acceleration from our previous outlook to be published in early August with our second-quarter earnings release.

Our net domestic unit growth assumption is that domestic units will increase between 1% and 2%, and that our effective royalty rate will decline by 5 basis points for the full-year. Based on these assumptions, we are establishing guidance for full-year 2014 EBITDA from franchising activities to range between $234 million and $237 million.

With regards to SkyTouch, we are projecting reductions in EBITDA for full-year 2014 of approximately $18 million compared to approximately $10 million in 2013. We now expect our fourth quarter 2014 diluted earnings per share to be $0.34, and our full-year 2014 diluted earnings per share to range between $1.99 and $2.02; and finally, our consolidated EBITDA for full-year 2014 to range between $216 million and $219 million.

We are very pleased with our third-quarter performance, and we believe we are well-positioned to continue our strong momentum for the remainder of the year. And now let me turn the call back over to Steve.

Thanks, Dave. So, results have been strong. We are obviously optimistic about the rest of the year. And we are also optimistic about heading into next year. The domestic economy continues to gain strength, which we believe should be a positive for the lodging industry. There have been solid gains recently in household employment in September, and some improvements in the labor participation rate.

Blue-chip forecasts indicate job and wage growth is predicted to accelerate modestly, which we see as good indicators for hotel demand in our segments. Based on our optimism for the core hotel lodging business, based on our recent results and heightened expectations for the remainder of the year, and our pursuit of new growth strategies like SkyTouch, we believe we are very well-positioned for future growth.

So, with that, let me open up the call and answer any questions you might have.

(Operator Instructions) Steven Kent, Goldman Sachs.

A couple questions. And, look, frankly, this was a great quarter, so it's hard to find anything to ask too many questions about. But --

Well, you could just go with that, though, Steve.

Okay, Steve. (laughter) So -- but we have another 40 minutes to kill. So, (laughter) on the Ascend Collection, the RevPAR was a little weak. You know I just -- it's a small part of your business, but what's going on there? Is there any read across?

And then Comfort Inn, there's been lots of investment into that brand; hotels moving out of the system. Yet, the RevPAR maybe not showing as much improvement as we would've thought. So, when do you start to see that -- the benefit of the repositioning? And I'm not sure if you mentioned -- one final question -- when SkyTouch would become EBITDA-positive?

Yes. So, let me start with SkyTouch. So, obviously, we are very happy with where we are in the sales process and the potential. We think we need probably at least one more quarter to feel like we can give you a serious revenue projection, which then will get us to what breakeven is. So I'll ask you to be patient with us till probably -- probably next quarter, we think we can give you some indication. And we'll let you know one way or the other.

But it's -- we are -- we think we are going to be in a position relatively soon, whether it's one quarter or two quarters, to give you an idea of, hey, we're pretty comfortable we're going to predict this kind of revenue growth. And therefore, we can tell you, based on that, what that means in terms of profitability for that division. So, we feel pretty good about that.

On Comfort, you're right. The number of units has gone down, because we have terminated a lot of hotels that don't meet the standards and the design and look that we are moving forward to. And, as a result, we are getting lots better customer response, and we are getting renewed interest from the developers.

Where we have seen improvement is in a scenario where they have done the renovation that was designed by Gensler, we are seeing significant lift from those few hotels that are done. And remember, we incented 300 hotels, most of them are just coming online, but the early returns look like we are driving about a 6% RevPAR increase over the market increase. So, we are pretty convinced it's going to work like Sleep worked, which -- where it is in Sleep -- I don't know where we are now, but originally, it was about a 10% RevPAR lift.

So we believe that there's going to be a very strong ROI to this investment. That will incent the rest of the developers who have already started paying attention, and are moving to start developing in this new way because they see a payday for it. So, while the RevPAR results are not showing that to date, we believe they are going to be showing it relatively soon.

Then the other is, we have been very focused on midweek business for Cambria and Ascend, as well as the Comfort brand, and we are seeing strong results in GDS. We are seeing strong results in negotiated rates. And we are seeing strong results out of the RFP process, in terms of number of companies that are looking to contract with us. So we believe that all bodes very well in the near to midterm for RevPAR results for those brands over and above what is a very strong RevPAR market to date.

Let me let Dave answer the question on Ascend.

Sure. Yes. Hey, thanks, Steve, for the question on Ascend. And, yes, you did highlight how Ascend kind of stands out. I mean, most of the other brands -- really, all the other brands that we have -- demonstrated RevPAR growth in the high-single digit percentage, if not low-double digit percentage area for the quarter, whereas Ascend was actually down.

I mean the key thing there, the key takeaway on Ascend is that that brand is obviously a rapidly growing brand. I think we're up about 15% year-over-year in terms of the size of the system. And given that it's got about 100 and -- 100-plus units, given that size, the absolute RevPAR levels are getting impacted by two things. One, the ramp-up of hotels that are coming online as that system grows rapidly; and number two, probably more important is just the mix of where the new hotels are being added, relative to the existing portfolio.

So, for example, obviously, the Ascend collection hotels that we have in New York City have higher absolute RevPAR levels than the ones that we add-in in markets that are not New York City, not the top lodging markets. So you're really just seeing a mix of geographies coming into that brand, ramp-up of the brand as it rapidly grows in scale.

Okay, thank you.

Robin Farley.

Thanks for taking the question. So, I echo Steven Kent's sentiment that it's a good quarter and the RevPAR -- increasing RevPAR guidance is very strong. I guess my question is that maybe it's not translating through to as much on the EPS line, you know, somewhere coming through EBITDA down to the EPS line, as maybe one would've thought with that kind of 8% to 9% RevPAR growth for Q3 and the Q4 guidance. Is there any sort of color on that you can give us?

Yes, you know -- Robin, thanks for the question. What I would highlight is for the third quarter, again, about 80% of the growth, the absolute dollar growth, in franchising revenues, which was around $7.5 million, flowed through to EBITDA, which we think is a pretty good indicator of the strength of this business model.

Having said that, if you were to look at our third-quarter franchising cost growth, it was around, I think, 7.5%, which is a bit higher than the full-year number or the year-to-date number, which is trending right around 4%. I think for the balance of 2014, we are expecting that number, the franchising cost growth to be more in that kind of mid-single digit percentage area.

But in terms of the flow-through, we felt pretty good about it in the third quarter. There were a couple of timing items on the expense side; you know, a little bit on the foreign currency side, as well as some of the impact of the restatements that we're wrapping up, had some impacts. When you think about the fourth quarter and the flow-through, the one thing that is maybe not as noticeable from the outlook is that we are seeing a nice pickup in royalties. It's kind of raising the RevPAR outlook.

Just given the timing of some of the openings of some of our conversion properties that were under development incentives, the amount of initial fee revenue we're contemplating recognizing in the fourth quarter has kind of moved out probably a quarter or two, and there's been a corresponding reduction in the initial fee revenue in the forecast and the conditions related to that. So, all in all, we were pretty excited about raising our full-year outlook by about $5 million at the midpoint on the EBITDA line, which about $2 million of that was driven by the SkyTouch, going to be a little bit less than we thought, and the balance really driven by the core franchising business, the beat we saw in the third quarter.

Is there -- could you quantify -- you mentioned it sounds like it's just a timing issue that if it's just some initial fee revenue moving into Q1 that originally you had thought might be in Q4. Is there kind of a ballpark you could give for that?

I would think about it as like a couple-million-dollars to the fourth quarter. And then there's a corresponding impact on commissions expense, about -- normally about 45% to 50%.

Okay. All right, great. Thank you very much.

No problem.

Felicia Hendrix.

Steve, thanks for the color you gave us in your prepared remarks on the share repurchase activity. When we saw that in the release, it definitely stood out to us, because you haven't repurchased shares since the second quarter of 2012. Previously, those buybacks, they were done more open market under your share repurchase program. So, just wondering, is there a reason why you haven't been more active with that during the past two years?

And going forward, how should we think about your share repurchase program, acknowledging that you said if another block comes up, you'll buy that, but just in terms of your current authorization?

Okay, technically, I said we will consider it, but okay. So let's talk about it. So, look, in 2012, I guess it's always good to remind people -- we paid out $600 million special dividend. Okay? And in doing that, we took advantage of what we thought was an extraordinary financing market, and the fact that our cash flows are so consistent and predictable that we were able to move into that, be very comfortable that we could return that value to shareholders, and then at the same time, rapidly delever.

So, we have been doing that since. And actually, we're getting pretty close to target levels. So that has somewhat impacted our decision on share repurchase.

Let me just reiterate this, because I didn't do this on the first call, and I've done it on, I think, every call since I've been with this Company. Our first priority always is return of capital to shareholders. Always. And so we are always looking at what is the best way to do that. And so, whether it's a special dividend, whether it's a regular dividend, whether it is share repurchase.

The share repurchase activity was not as active in the last couple of years around this idea of delevering. However, we have never, ever said we wouldn't. And it always, though, is opportunistic. We don't believe in programmatic share repurchase. We believe in opportunistic share repurchase.

And I'll let Dave talk a little bit about those parameters. But we are -- we've clearly viewed this as an opportunity, which we took advantage of, as we will in other opportunities going forward. Let me let Dave kind of talk about the factors that go into that decision.

Yes. And I think Steve actually kind of touched on most of them. Obviously, with the Estate shares, it was opportunistic in our view. Because, frankly, over the past 15 years that we've operated the share repurchase program, we've never seen a block of that size become available to us for repurchase -- which is, to your point, Felicia, why we normally executed through the other market mechanism.

But I think Steve kind of hit the main concepts, which is, you know, two years ago, we did this levered recap, took the leverage levels up beyond [4%], beyond our kind of long-range stated objective, which is more in the [3% to 3.5%] range. And as we said, we are getting closer to that range. I think trailing 12 through September on leverage, we were right around 3.7 times debt to EBITDA.

So, as we continue to migrate the balance sheet towards our optimal leverage levels, we'll continue to look for opportunities to return excess capital to shareholders, as well as make investments in things that makes sense, like SkyTouch and Cambria and Comfort.

Great. That's helpful. Thank you. And just while you mentioned SkyTouch, I'll hit on that question. So the revenues for the nine months of the year so far have hit $200,000. You've been consistent saying that the $1 million in revenues, just -- you know, it's a big jump in the fourth quarter. So can you just help us bridge that?

Yes, I think it's just a reflection of the ramp-up. So, really, as we built out the sales and marketing team during the course of the year, I'd say that our view is that they are starting to kind of hit their stride, and that maybe you kind of see the ramp-up of hotels coming online. It's what's driving the change from the third quarter year-to-date to the $1 million estimate we have in the outlook.

Oh, but assuming that your visibility on that is pretty good.

Yes, yes.

Okay, great. And then just finally, just on the convert (technical difficulty) it's slowed. And we are just wondering, is that due to tough comps? Or is there just something else going on with your conversions or maybe unbranded hotels finding -- is this not the point in the cycle where unbranded hotels are really jumping to execute conversions?

Yes, I don't think I'd read too much into it. I think if you look back at kind of our history of conversion, franchise sales executions quarter-over-quarter, you will see quite a lot of choppiness over the course of the cycle. It's not always kind of up, up, up, every quarter. So we are not really reading too much into what the conversion contract executions were for the quarter.

You know, I don't think it's anything that I would say is kind of secular related to the value of our brands, and which we totally believe are the best brands on the conversion front for hotel owners. And nothing I would say kind of in the industry that's causing us to think that we don't have a great conversion opportunity going forward. So, I think the quarterly results are really just more of a kind of timing issue that we've seen from time to time in various fair shares.

Yes. And I think the way to think about it is, we monitor this obviously very closely. We are the premier conversion company out there. So, we get a much higher percentage of the conversion opportunities available than any of the other companies that we are competing with, depending on the hotel. And so it's -- so -- and we think, though, that the overall environment for conversion is going to continue to improve.

And the primary reason for that is, as the hotels do better, they can afford to invest and put the dollars into their hotel that is required in order to convert to our hotels and be one of our brands. So that's a positive sign on the independent front.

And the other front that really hasn't been around for several years is the opportunity of other hotel companies -- as their construction pipelines begin to add new product, they will eventually start terminating some of those hotels, which they haven't done in several years. That's obviously a strong opportunity for us, because we are the next best choice once that brand says we no longer want you as part of our system.

And so that part has been relatively slow to recover, because the other brand companies have not been terminating hotels, as they've been waiting for new product to come online. We believe that's going to start happening next year. And then that will build that conversion opportunity. And we monitor very closely, but we will continue to lead and be the top converter of hotels in our space.

The only other thing I'll add to Steve's remarks as well, Felicia, is that if you look at the full year numbers, keep in mind that last year, we had a multipack transaction of Ascends -- it was about 25 hotels that are in the nine-month numbers for September. And then also the other thing I would point out is -- it kind of ties into the Comfort strategy -- is, on the conversion front on Comforts, I would say we are being a lot choosier about the conversions that we are bringing to that brand, which really corresponds with everything we are trying to do to strategically drive that flagship brand further up the food chain.

All right, okay. That's great color. Appreciate it. Thanks a lot.

Thank you. Sir, you have no questions at this time. But again, ladies and gentlemen, (Operator Instructions). Thank you. You have no further questions that have come through. So now I'd like to turn the call over to Steve Joyce for closing remarks. Thank you.

Great, thank you. So that concludes our call. As always, thank you for joining us. We are very excited about next quarter and what's going to happen in 2015. And we continue to thank you for your interest in Choice. Have a great day.

Thank you for your participation in today's conference. This does conclude the presentation. You may now disconnect and have a very good day.