Hyatt Hotels Corp (H) 2015 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the second-quarter 2015 Hyatt Hotels Corporation earnings conference call. My name is Amy, and I will be your operator for today.

(Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Atish Shah, Senior Vice President and Interim Chief Financial Officer. Please proceed.

Thank you Amy. Good morning, everyone, and thank you for joining us for Hyatt second-quarter 2015 earnings call. Here with me in Chicago is Mark Hoplamazian, Hyatt's President and Chief Executive Officer. Mark is going to start by discussing the progress we're making towards our long-term strategic goals, and then I will come back to provide detail on our financial performance during the quarter. Then, we will take your questions.

Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our Annual Report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued earlier this morning, along with the comments on this call, are made only as of today, August 4, 2015 and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks on our website at Hyatt.com under the press release section of our investor relations link, and in this morning's release. An archive of this call will be available on our website for 90 days, per the information included in this morning's release. And with that, I'll turn it over to Mark to get us started.

Thanks, Atish. Good morning and welcome to Hyatt's second-quarter 2015 earnings call. This morning, I'd like to first talk about our continued progress against the long-term strategy that we described at our 2014 investor meeting, and how our second-quarter results demonstrate that progress. Following that, I'm going to discuss one of the key strengths of our strategy, multiple earnings tools, with specific emphasis on our owned and leased hotel portfolio. And after that, I'll turn it back over to Atish to discuss the results from the quarter.

As you can see from the results that we announced this morning, our underlying business continues to perform very well, and we remain on track with our long-term strategy. We realized strong comparable system-wide revenue growth, coupled with attractive and expanding margins, the result of our devotion to quality and to being the preferred choice for our owners, our guests, and our colleagues. As we grow preference, the long-term value of our business grows. With that in mind, here's some important metrics from the second quarter.

Our US hotels enjoyed another strong quarter of performance, with RevPAR growth above 7% for both comparable full-service and select-service hotels. We posted strong results in key markets such as San Francisco, San Diego, Hawaii, and Atlanta. Markets in which we have large group hotels, such as Chicago, Washington DC, and Orlando also performed well. Globally, RevPAR was up nearly 6% for comparable hotels, when adjusting for currency. Overall, fee revenue increased almost 9%, partially from the conversion of some of our owned hotels to managed or franchised properties.

With our quarterly performance as a backdrop, I'd like to revisit one of the key strengths of our long-term strategy, that is, how our multiple earnings tools help drive Hyatt's long-term growth. By way of reminder, there are three earnings tools we leverage in the execution of our strategy. Guest mix, revenue mix, and our business model of owning, managing, and franchising hotels. I'm first going to focus on our guest mix, and the distribution of group and transient travelers. Following that, I will discuss our business model with particular emphasis on our owned and leased portfolio. Recall that we provided a deep dive on our revenue mix in relation to our food and beverage business on the last earnings call.

So let's turn to our guest mix. Our group and transient guest mix has historically been a source of strength for the Company. This mix has allowed us to capture customer demand throughout the lodging cycle in a more balanced way. US group business, which is very important to us, representing approximately 45% of our total rooms revenue in the US, has been strong in 2015, and our results demonstrate continued momentum.

Group room revenue in the US increased over 10% in the second quarter, following a similarly strong first quarter. 75% of that increase was driven by room rates. This had a strong positive impact on our flow-through and margins. Notably, these increases in group demand also improved pricing power on the transient side of the business, as this tends to reduce the availability of rooms for transient guests. Transient growth was strong, with US full-service room revenue growing over 6% on a comparable basis, and primarily driven from rate growth, as well.

Looking forward, we expect group metrics to continue to be strong. Group pace for the US in 2015 remains over 7%, and our pace in future years is currently in the mid to high single digits, with very encouraging signs into 2017. Group business also leads into the next earnings tool that I would like to discuss. Now you've heard us say this before, we strongly believe our business model of owning, managing, and franchising provides multiple avenues for growth, and its applicable in different economic environments. I'd like to start by providing a deep dive into our owned and leased portfolio, and discuss the value created through asset recycling, the operating leverage of our hotels, and the evolution of the portfolio towards a much higher quality hotel base.

So let's begin with our owned and leased portfolio. Those of you that follow us closely know that we take a different approach as compared to our industry peers, who are following a so-called asset light approach. We believe our approach gives us a tool for growth in markets that are hard to enter, control over how our brands are represented and where they are represented within a given city or location and opportunity to secure hotels that are critical for a particular customer base.

We believe this approach works well for us, as evidenced by our entry into high-barrier markets, by strong margin growth we've achieved, and by our strong group business fundamentals I mentioned earlier. We ended the second quarter of 2015 with 41 owned or leased hotels, or approximately 20,000 owned or leased hotel rooms. We currently own or lease hotels in 10 countries.

In the first half of 2015, we earned about 50% of our total adjusted EBITDA from owned or leased hotels, excluding joint venture ownership interests. Since the beginning of 2014, we sold five full-service hotels and 53 select-service hotels, for gross proceeds of more than $1.3 billion, and during the same period, we added two full-service hotels to our owned portfolio at a cost of approximately $600 million. At our investor meeting last year, we said that we expected to evolve and improve our owned portfolio mix, and we believe we have accomplished this through stronger chain scale positioning, location of our owned and leased hotels in their respective markets, and overall asset quality. The results, in addition to greater upside potential, is that we have more durable value that we believe can weather all economic cycles.

Since the 2014 investor meeting, we've increased the mix of luxury and upper upscale rooms from 74% to 97% in our owned and leased portfolio. We also stated our goal, to increase our mix of hotels outside of the United States, to similarly create durable value and to diversify our sources of income. Since that time, we've increased the proportion of rooms outside the US from 18% to 22% in our owned and leased portfolio. And we currently own assets in Paris, London, Zurich, Seoul, and Mexico City in addition to key US locations.

The final attribute of the high quality of hotels in our portfolio, exemplified by Park Hyatt hotels in Paris, New York City, and Zurich, and among our largest hotels, key properties for our group and transient guests in markets like Mexico City, San Francisco, and Orlando. We continue to focus on real estate transactions that we believe keep us well-positioned in high-quality markets and desirable locations. In our 2014 investor meeting, we estimated that our owned hotel portfolio at the time could be worth over $7.5 billion. Today, we estimate that our now smaller portfolio of owned hotels is worth more than this $7.5 billion estimate, based on recent operating results, current market conditions, as well as the investment we've made in some recent acquisitions of certain hotels. This figure excludes leased hotels and joint venture interests.

In addition to asset recycling, we are benefiting from the operating leverage we have from our owned and leased portfolio. Our owned and leased hotel operating margins increased 120 basis points in the second quarter on a comparable basis, despite some headwinds in New York City from increased supply, and in Seoul, from the Middle East Respiratory Syndrome, or MERS, outbreak.

Now that I've discussed the owned and leased portfolio highlights to turn to management of franchising as the other two ways we go to market. On the management side, our incentive fees increased over 7% in the second quarter. Our franchise fees grew significantly, over 29% in the second quarter and over 38% in the first half of 2015, partially attributed to the conversion of hotels that we sold to third parties, subject to long-term franchise agreements. This growth in franchising is not just a source of earnings, it's also an important part of our strategy to grow our footprint in markets in which we are underrepresented or lack presence.

Being able to own, manage, or franchise is value-additive and allows us to grow in a purposeful way, utilizing a model that allows us to apply the approach that makes the most sense in each given economic environment and circumstance. To illustrate our high-quality expansion, you need look no further than this past quarter. We opened the most hotels in one quarter since our IPO, if you don't include asset acquisitions. We opened 19 hotels in the second quarter across six different brands, including our first two Hyatt Centric hotels, the first being right down the street from our offices here in downtown Chicago, and the second in South Beach, in Miami Beach.

In addition to the launch of Hyatt Centric, our second-quarter openings represented entry into eight new markets, a resort in Uruguay, a Grand Hyatt in Playa del Carmen, a Hyatt Regency in Tysons Corner, and a number of urban Hyatt Place and Hyatt House hotels in markets including Chicago, Washington DC, and Seattle. Overall, we've added 28 hotels year-to-date through the second quarter, expanding our system by 5%, and we remain on track to open approximately 50 hotels in 2015.

Our executed contract base represents an additional 250 hotels, or 55,000 rooms. Potential growth of over a third from our existing room base. We are looking forward to opening an owned hotel, the Grand Hyatt Rio de Janeiro later this year, but otherwise, the vast majority of our executed contract base is managed or franchised. We continue to be excited about the growth prospects for our brands. Our executed contract base for future hotels is strong, and has held steady, even as the number of hotels we open has increased. We expect a healthy level of openings relative to our system size in the years ahead.

Of the 50 or so new hotels we plan to open this year around the world, we expect over half will be select service. The rest will be full-service hotels, a number of which are in China and in India. Our growth in our Hyatt House and Hyatt Place hotel base around the world is buttressed by continued strong financial performance for the brands, and happily, the recent recognition by JD Power for Hyatt Place as the best brand and guest satisfaction in its segment. So with that, I'd like to turn the call over to Atish to provide us with more details on the second-quarter results.

Thanks, Mark. Our core results in the second quarter demonstrate our progress on the long-term strategy that Mark just described. We achieved industry-leading results across many key performance metrics.

Let me start first with our overall RevPAR results around the world. On a system-wide basis globally, comparable RevPAR grew 5.6% in constant dollars. This was led by the United States, with flattish performance elsewhere in the world. In the US, we saw continued strong growth with our comparable full-service hotel RevPAR increasing 7.5%. Comparable select service hotel RevPAR increased 7.2%. With occupancy rates at record highs, the vast majority of this growth was driven by ADR increases. This has helped us generate strong margin growth for the US chain, and our owners.

Outside of the United States, the results were more moderate. In the Asia-Pacific region, RevPAR increased 2.2% on a constant dollar basis. As one would expect, results varied across the subregions. Northeast and Southeast Asia saw relatively strong growth, in the mid single-digit percentage range; however, Australia and the Pacific regions showed flat RevPAR growth, as did greater China.

Moving on to the EAME and Southwest Asia region, our results were also relatively flat on a constant dollar basis. The majority of Europe experienced low single digit percentage range RevPAR growth. Offsetting this was a RevPAR decline in the low teens percentage range at our hotels in the Middle East. The timing of Ramadan, as well as new hotel supply in Dubai, led to the decrease.

At our owned and leased hotels, RevPAR grew 4.8% in constant dollars. Owned and leased hotels in Amsterdam, Berlin, Atlanta, Chicago, and several markets in California all posted RevPAR growth in excess of 10%. On the flip side, a handful of our hotels experienced RevPAR declines. New hotel supply negatively impacted results in markets such as Paris, New York City, and Aruba.

In Baltimore, civil unrest led to group cancellations, and in Seoul, MERS caused a falloff in results in June. The aggregate negative impact of these declines was less than $5 million to adjusted EBITDA. As we look forward, we expect that these market-specific dynamics may linger for some time, but expect them to be offset by continued strong performance at owned and leased hotels in many key cities and markets. Overall, as Mark discussed, the strength of location, brand, and quality of the hotels bodes well for strong portfolio performance.

Let us now talk a little bit more about Manhattan. While the market continues to be challenging due to new hotel supply, we are holding our own at the two hotels in our owned and leased comparable set. During the quarter, one hotel showed a slight RevPAR increase, and one showed a slight RevPAR decline. Between the two, adjusted EBITDA was flat. Park Hyatt New York, which is not yet in the comparable set, continues to ramp up nicely.

If we look across all of our comparable managed and franchised hotels in New York City, our weighted market share increased during the quarter. So again, relative to the market, we continue to do well. Consistent with our expectation going into the year, we continue to forecast a slight RevPAR increase across our comparable hotels in New York City. This reflects strong back-half booking activity, an easier comparison in the fourth quarter, and continued ramp at hotels that have been opened over the last couple of years.

I will also add that we had a great quarter from a market share perspective. We gained share on a global basis with particular strength in the United States and Asia-Pacific markets. Our hotels are benefiting from higher levels of group business, resonance for our brands, and freshly refreshed or recently renovated product in many of our key locations. And as Mark mentioned, our business model of owning, managing, and franchising has allowed us to grow our system in varied and beneficial ways since our IPO. The network effects of our platform and brands have increased over the last 5.5 years. In our view, this is contributing to the share increases that we have been seeing.

Now, let me turn to how these chain results impacted our reported financials in the second quarter. Our adjusted EBITDA for the quarter was $210 million. This includes a negative impact from two items. First, net dispositions since the second quarter last year were a $25 million drag on the year-over-year adjusted EBITDA comparison. And second, the stronger US dollar further impacted our adjusted EBITDA by $8 million. Without these two items, we would have shown an adjusted EBITDA growth rate in the mid single-digit percentage range.

Let me move on to pro rata share of adjusted EBITDA, associated with our unconsolidated hospitality ventures. This declined approximately $6 million versus last year. Approximately $3 million of the decline was due to the dispositions that I mentioned. We saw an additional $3 million decline, primarily related to the true-up of certain expenses at one joint venture.

Fee revenue was up approximately $9 million, or 9%, as compared to the same quarter in 2014. Excluding the impact of foreign exchange, fee revenue would have increased about 14%. While fee revenue -- excuse me while fee growth continues to be strong, we have significant room for future upside in incentive management fees. For example, during the quarter, about 40% of hotels in the Americas paid incentive fees, and 70% of the hotels outside the Americas paid incentive fees. These percentages are still about 10 to 15 points below prior peak levels.

Turning now to adjusted selling, general, and administrative expenses, these expenses were favorable by approximately $2 million versus the same period last year. Our adjusted SG&A expenses benefited from the sale of our vacation ownership business, offset by higher professional fees, timing of sales and marketing expenses, and a nonrecurring item that helped the second quarter of 2014. Let me now talk briefly about a few items of note below adjusted EBITDA, items that impacted our net income. In the second quarter, we had $23 million in equity losses related to our unconsolidated hospitality ventures.

This is a big swing, as during the second quarter of 2014, we had income of about $23 million. This income was driven largely by the sale of a hotel that resulted in a gain of approximately $20 million, and we noted this as a special item last year. This year's second-quarter loss was driven by two of our unconsolidated foreign joint ventures, in which we incurred approximately $28 million of losses, the majority of which were non-cash. About 40% of the losses relate to the impact of a stronger US dollar, as one venture has a US dollar-denominated loan. The rest of losses were due to a combination of items at another venture, some operational, but most non-operational. As we look forward, we expect continued volatility in the results of our unconsolidated ventures, including potential currency-related impacts. We continue to recognize these unconsolidated ventures is integral to our strategy, and over time, they help us grow the value of our business.

As to taxes, our effective rate in the quarter was higher than it was in prior quarters. This was partially due to reported losses that were not deductible. On a full-year basis, we expect our effective tax rate to be in the low to mid 40% range.

Now, turning to our balance sheet, we continue to be in a strong position. We continue to have significant liquidity available with over $900 million of cash and short-term investments, including approximately $200 million of restricted cash. We also retain undrawn borrowing capacity -- borrowing availability of approximately $1.5 billion under our revolving credit facility. As to return of capital to shareholders, we repurchased approximately $157 million of common stock in the second quarter, and approximately $25 million of common stock in July, bringing the year-to-date repurchase total to nearly $370 million, as of July 31.

By way of reminder, at our March 2014 investor meeting, we illustrated that we could generate $1.2 billion of cash available for new investments or return of capital to shareholders by the end of 2016. Through July of this year, we have returned over $800 million to shareholders through repurchases, so we are well on our way of hitting that goal. Last week, our Board of Directors authorized an additional $400 million of repurchase capacity, so we now have approximately $475 million available in our share repurchase authorization. And consistent with prior quarters, our repurchases may include both Class A and Class B shares.

That concludes my prepared remarks, and with that, I'll turn it over to Amy for the question-and-answer session.

(Operator Instructions)

Joe Greff, JPMorgan.

If you could just give us a sense for what is driving your pipeline performance today? And then second question, have you been more incrementally active on the corporate M&A side?

Sorry about that, was the first question for some reason, we had an audio issue on our side. The first question related to pipeline; is that right?

Yes, just that pipeline came in flat looking at what was in even the first quarter and most others were up sequentially. So just looking for more incremental color on what's going on in the pipeline?

Okay. The pipeline has continued to expand over the last year, and net of the openings, we are maintaining the total base of executed contracts. So it's not that the pipeline is static. We continue to open at a faster pace, and we're replacing those openings with new deals.

In terms of environment what's going on in the environment more broadly, I would say that the demand and pace and activity on the select service front, Hyatt Place and Hyatt House is extremely high, everywhere. If you look at our total pipeline, something on the order of 50% of the pipeline -- I'm sorry 40% of the pipeline is select-service hotels around the world, and almost half of that is outside of the US. The demand for Hyatt Place and Hyatt House in markets around the world is expanding rapidly. This is a particularly important strategy for us, because we recognize that as more and more people in what we call the commercial class, or what you may call in the US context the middle class, are coming into travel in different places, especially India and China.

So Hyatt Place and Hyatt House will be the brand we lead with in a lot of markets in those countries. With respect to overall full-service development activity, we've seen a clear slowdown in India, in terms of development activity. While India had a very strong quarter and is progressing well this year on a comparative basis, this is now two years into a relatively slow period economically, and the development environment has been challenging for a lot of local developers. The activity base in India has definitely slowed, and our focus on Hyatt Place and Hyatt House continues to be high there.

The pace in China is relatively stable, both in terms of construction activity and new opportunities. We are really focusing more attention now on Hyatt Place and Hyatt House expansion, but the overall development activity I would say has been pretty stable, and in the US, it's very selective. There a few markets in which there will be interesting group-related projects that we are pursuing right now, and resort opportunities, and very importantly, I think, Hyatt Centric, which we opened our first two new hotels, and there's a tremendous amount of interest in Hyatt Centric. We've identified ourselves a number of sites around the country, over a dozen that we are pursuing to secure and entitle. But beyond that, we are talking to developers -- a couple of developers about multi-property transactions and the demand for the Hyatt Centric brand around the world has been high, and I think that brand category is going to represent a good opportunity for additional full-service transient-focused growth for us.

Was there a second part of your question? If not, we will take the next question please.

Patrick Scholes, SunTrust.

Can you give us a little bit of color on your expectations for the impact of foreign exchange by quarter, for the rest of the year?

Yes, sure. The impact of foreign exchange is roughly the same as what we expected it to be, when we started the year. So nearly $25 million on a full-year basis. As we indicated, the impact on the second quarter was $8 million. In the third quarter we expect it to be approximately $7 million, and in the last quarter of the year, the fourth quarter, we expect it to be about $5 million.

Any other questions Pat?

No. I am all set. Thank you

Great. We will take our next question, please.

Smedes Rose, Citigroup.

I wanted to ask you, you mentioned in your opening remarks that you thought the value of your owned real estate was, I think you said, $7.5 billion. Could you talk about what you are using to calculate that? Is that a trailing cap rate, or are you looking at replacement costs? Is that on forward cap rates? How are you coming up to that number?

We looked at the valuation of our portfolio in March of 2014 when we presented at the investor day. And what we did was updated that analysis, and we added a couple of hotels that we have acquired since then at their purchase price. And so the evolution, the expansion of earnings, and the evolution of the market has yielded an increase in value. And so our belief right now, and using comparable or a similar approach that we did in March of last year is that the portfolio has maintained or grown value, even though it's a smaller portfolio today. Very different mix than it was in March 2014 obviously.

The only thing I would add, our methodology at the time, which we included in the pack from March of 2014, we did look at cap rate based on asset type and location. And we utilize comparable hotels that either we had transacted on, or that we had observed in the marketplace so that was the general approach to that illustrated valuation.

Okay, and I wanted to ask, is there any way to provide some guidance for these equity losses and equity earnings that are obviously -- that seem to be the huge swing between consensus forecast and your reported numbers? Because obviously, there are enormous differences here. And is mostly related to your Playa investments? I'm trying to get a sense of where this is going to go for the year.

In the past, this has been much more moderate, these swings from quarter to quarter had been in the couple, few million dollar range. They have been higher this year, and frankly a big piece of that is currency. Because of these -- in some cases, US-dollar denominated loans at our joint ventures, and we do expect future currency impacts at some of these JVs, so it's really a hard one to give an exact number on.

How about a rough number?

We have been sort of in the plus or minus a few million dollar per quarter range on this equity earnings and losses line item, and it's hard to project, because we don't know how currency will move and impact the numbers. We do anticipate in this coming quarter to have a $20 million loss, due to a sale of a joint venture interest. That will be -- that's a translation loss. It's non-cash, so similar to the loss we experienced this quarter, and it will be most likely special items. So that gives you some sense of what lies ahead but we will try to provide more information as we move forward.

Okay. Thank you.

Rich Hightower, Evercore ISI.

Just a couple of questions, follow-ups on the owned and leased portfolio. I appreciate the color in the prepared comments, but as I look at your owned and leased portfolio today, you still have a lot of what I would consider to be non-core assets relative to the high-quality assets you referenced in the comments. Should we assume that you would look to sell many of those, just given the capital availability window that we see at this point in the cycle, and your historical activity on that front?

Thanks for that. We have been in the market over time with different hotels, and we did not and up transacting on about five hotels that we thought we would last year. We do have in mind that ultimately they are available for recycling. What we're also doing is paying attention to opportunities for redeployment of capital, and so, I would say that we are much more planful at this point about how that deal activity actually begins to match up. I would say that we will continue to be in the market on the buy side and the sell side, as we are today. We have not transacted anything in the first half of this year, but we remain active on both sides of the equation.

Okay. And just in Manhattan, can you tell us what portion of overall owned and leased EBITDA Manhattan represents today, and maybe where you expect it to go by the end of the year?

We posted that in our fourth-quarter earnings release. In terms of concentration.

Okay, is it still consistent?

It's roughly consistent. It's about 8% or 9% of owned and leased EBITDA.

Okay. Thank you.

Bill Crow, Raymond James

Thank you, good morning. Simple question, surprised we're still asking it, but any status update on the CFO search? That seems to gone on for an awfully long time.

Thanks for that. We are continuing the search process, we've been in discussions with a number of candidates, as we were before. We obviously appointed Atish as the interim CFO, and that's actually been working very well, and we continue to have good coverage of all of our needs on the finance front at this point. The search does continue, and we'll provide an update from we've got something more to report.

Okay. Thank you.

(Operator Instructions)

Joe Greff, JPMorgan.

Sorry about earlier, my second question was if you guys had been incrementally more active at all on the corporate M&A side?

We don't really comment specifically on anything we may be involved in, so we've been active in the past, and I think our concentration right now is to execute on the strategy that we have in place that we outlined last year. So anything we would do outside of the asset recycling and our growth plan would be incremental to our current strategy.

Okay. Thanks for that. I guess if I may, you gave some pace information for 2016. I was wondering, any other color you can tell us about how 2016 is shaping up on the group side? How much is on the books at this point or anything like that?

Yes, right now, it's a bit over 50% of the business on the books, which is about where we would expect it to be. The mix continues to evolve, as between corporate and association business. What's interesting in the quarter for the quarter, and in the quarter for the year, activity continues to be very high. And I think that is a good sign of the short-term demand, but also booking curve has moved out, and I think we are definitely seeing more movement towards securing dates in the future. And the interesting other profile issue is that pace for 2017 is also increasing rather nicely at this point. Now there is a little over one-third of the business on the books for 2017, so it's not like we can declare that as a definitive indicator for 2017, but right now, all indications are positive.

Got it. Thanks a lot.

You are welcome. Next question please?

Smedes Rose, Citi.

I'm sorry if I missed this, but could you break out the A shares versus the B shares on your buyback for the second quarter, and also for year-to-date if you have that?

Sure, in the second quarter it was about 60% A shares 40% B shares, so in terms of dollars, of the $157 million that we spent on share repurchases, $97 million was for A shares and $60 million was for B shares. In the first quarter, we had about $[45 million] (corrected by company after the call) of B shares and about $143 million of A shares. So that made up [about] (corrected by company after the call) $187 million.

Okay. Thanks a lot.

This concludes our question-and-answer session. I would now like to turn the call back over to Atish Shah for closing remarks.

Thanks, Amy. We believe we're making really good progress on our long-term strategy, and we are well-positioned to benefit from the increased presence that we've got around the world in opening new hotels in the network effect that Atish mentioned. Obviously, asset recycling is adding to that, and our brands are clearly punching above their weight when you look at our share progression during the quarter. So our long-term goal remains clear, which is to drive the preference or the brands among our colleagues, our guests, and owners in order to create long-term value, and that's what we remain focused on. Thanks for joining us this morning, and we look forward to talking to you again soon. Bye for now.

This concludes today's conference call. You may now disconnect.