Marriott International, Inc. (MAR) Q4 2014 Earnings Report, Transcript and Summary

Good morning, and welcome to Marriott International's Fourth Quarter 2014 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions following the presentation. It is now my pleasure to turn the floor over to Arne Sorenson, President and Chief Executive Officer. Sir, you may begin. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning, everyone. Welcome to our fourth quarter 2014 earnings conference call. Joining me today are Carl Berquist, Executive Vice President and Chief Financial Officer; Laura Paugh, Senior Vice President, Investor Relations; and Betsy Dahm, Senior Director, Investor Relations. As always, before we get into the discussion of our results, let me first remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under Federal Securities laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings, which could cause future results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the press release that we issued last night, along with our comments today, are effective only today, February 19, 2015, and will not be updated as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks on our website at www.marriott.com/investor. 2014 was a terrific year for Marriott. Worldwide comparable system-wide RevPAR rose nearly 7%, adjusted EBITDA rose 15%, and EPS increased 27%. The number of rooms in our lodging system grew by 7% gross. Over half of these new room openings were outside North America, and over 40% were conversions from competitor brands or were M&A related. Our room signings were even more impressive. We signed over 650 hotels with 100,000 new rooms in the year, more than triple the pace from five years ago, and we ended the year with nearly 240,000 rooms in our development pipeline. Every region, North America, the Caribbean and Latin America, Europe, the Middle East and Africa, and Asia Pacific each signed a record number of deals during the year, positioning us for great earnings growth in the future. Our Development team led by Tony Capuano did an extraordinary job, and we thank them all. With our talented developers and the rising demand and limited supply macro story has certainly contributed to our recent growth. Our success in 2014 was also rooted in a number of strategic decisions we made following the 2009 downturn. First and foremost, we chose to decentralize, putting important business decisions in the hands of competent executives who are close to the customer and the local market. Deep knowledge of the Middle East and Africa region enabled us to quickly seize the opportunity presented by the Protea brand. In the Asia Pacific region, our strong relationships with local owners allowed our Regional Development team to sign an extraordinary number of deals in just a few years. And in Europe, our local presence enabled us to find the right entry to the economy tier with the Moxy brand. Around the world, we increased the number of brand platforms available for owners and franchisees, adding five brands in as many years, developing the Autograph and Moxy brands internally, and acquiring AC Hotels, Gaylord and Protea, all of which helped fuel our unit growth and pipeline. We also enhanced the value of our brands, introducing new and exciting guest room designs, including by transforming the Marriott Lobby, introducing the Renaissance Navigator program, and rolling out Courtyard Refreshing Business. We estimate our owners and franchisees have invested over $5 billion in renovations and repositionings over the last few years. We committed capital strategically. Our EDITION brand growth clearly benefited from our decision to build three EDITION Hotels on balance sheet. Two of these properties in London and Miami are already open, and The New York EDITION at the Clock Tower building is scheduled to open in just a few months. Just last month, Travel & Leisure Magazine named the Miami EDITION one of 43 transformative hotels worldwide in its 10th Annual Editor Choice Award. With strong momentum, we now have a dozen EDITION properties open or in the pipeline. By the way, we closed on the sale of the Miami EDITION last night, and we expect the New York Clock Tower EDITION sale to close within the next couple of months. We enhanced and improved our already powerful above-property platforms. We introduced new languages and new functionality on marriott.com, and we launched Marriott Mobile. Our site remains an incredibly low-cost, high-value booking channel for our hotels. Last year, we booked over $10 billion in property revenue on marriott.com, nearly 20% of that coming through mobile. We also rolled out mobile check-in and check-out to virtually all of our worldwide hotels well ahead of the competition. We strengthened Marriott Rewards to better target young travelers and introduced Ritz-Carlton Rewards to the Luxury space. We introduced new redemption options, embraced social media, and leveraged technology to provide instant gratification to millennial travelers. In 2014, we announced free Wi-Fi for Reward members to great acclaim. Last year, Rewards membership topped 49 million members worldwide and contributed one-half of our worldwide occupancy. In 2014, 60% of new Rewards members were next-generation travelers and 40% of new members live outside of North America. We also improved our business structure. With the spin-off of Timeshare in 2011, we dramatically increased return on invested capital and retained a significant royalty stream for Marriott Vacations worldwide. Last and most important, we delivered stronger hotel financial results and higher owner and franchisee satisfaction, both essential for continued unit growth. Since 2009, worldwide system-wide RevPAR has increased by more than 30%, margins have improved dramatically, and owners and franchisees as a whole have rarely been happier. In five years, we increased our fee revenue by nearly 60%, doubled our adjusted operating margin, and dramatically improved earnings per share. The results of all of these are impressive. And this year offers even more opportunities. Our 2015 earnings guidance reflects rooms' growth of roughly 7% gross or 6% net of deletions. We expect conversions will contribute roughly 15% of our room expansion. Upon completion of the Delta transaction, we'll pick up another 10,000 rooms. In light of our accelerating development, you may be concerned about new industry supply. Now while supply growth impacts some markets, STR estimates U.S. market supply overall increased by only 0.9% in 2014 and expects it will increase by only 1.3% in 2015. In this low supply growth environment, we are driving market share. We currently have a 10% share of rooms in North America, but 26% of the under construction market. In fact, Marriott has more hotel rooms under construction in North America than any other company. Five years ago at ALIS, we introduced the Autograph brand, a flexible lifestyle brand combining unique style and identity with the advantages of powerful [audio skip] (8:22) property systems and marketing. In recent years, hotels joining the brand saw double-digit improvement in RevPAR index. Today, Autograph has more than 75 properties with 17,000 rooms worldwide, and we expect to have more than 100 Autograph hotels open by the end of this year. Our Moxy brand was designed to capture the rapidly growing number of millennial travelers. The brand launched in Europe in 2014, and at this year's ALIS Conference, we announced the introduction of Moxy to urban markets in North America. Today our development pipeline includes 16 Moxy's under development in Europe and five already in the United States. Just last month we approved two Moxy deals for Manhattan. We expect to have 150 Moxy Hotels open worldwide by 2023. Our first AC by Marriott hotel in North America opened in New Orleans in 2014. Hotel owners love the stylish cosmopolitan brand. We already have nearly 60 AC Hotels under development worldwide, including roughly 45 projects underway in North America. Our three largest limited service brands, Courtyard, Residence Inn and Fairfield, have over 2,200 hotels and 260,000 rooms in the United States, but are just starting aggressive expansion abroad. Today, more than 50% of Courtyard's worldwide development pipeline is outside the U.S., we are adding Fairfields in Mexico and India, and launching Residence Inns in Europe and the Middle East. As large as they are, these brands still have plenty of runway worldwide. Last month, we announced an agreement to acquire the 10,000 room Delta Hotels brand in Canada. Upon completion, this transaction will significantly increase our full service market share in Canada, and provide another new brand platform for growth worldwide. We are very optimistic about the long term. As the world becomes more integrated, global travel continues to grow. The World Travel Organization estimates that the number of international arrivals has more than doubled in the past 20 years to 1.1 billion visits in 2014. In November, the United States and China reached a reciprocal agreement that extends visa validity terms from 1 year to 10 years for short-term business and leisure visitors, significantly reducing the red tape for frequent travelers. This visa extension allows flexibility for the traveler and makes the U.S. and China more attractive destinations. In 2014, our U.S. hotels reported a 20% increase in guests coming from Greater China. It's this kind of statistic which demonstrates that we truly are in a new golden age of travel. Now I'd like to turn the call over to Carl for a review of the fourth quarter and our expectations for 2015. Carl? Carl T. Berquist - Chief Financial Officer & Executive Vice President: Thanks, Arne. We were very pleased with our fourth quarter results. Diluted earnings per share totaled $0.68, $0.04 ahead of the midpoint of our $0.62 to $0.66 guidance. Compared to the midpoint of our guidance, stronger-than-expected results among our owned and leased hotels added roughly $0.01, higher-than-expected termination fees added about another $0.01, while our favorable one-time interest true-up added about $0.02. In North America, continued economic growth drove North America system-wide RevPAR up nearly 7%. We saw strong RevPAR growth in San Francisco, the Pacific Northwest and our Florida resorts. Among our system-wide full service brands, transient demand was strong and hotels in nearly half of our top 20 markets increased retail RevPAR by double-digit percentages. System-wide North America group RevPAR rose 6% in the quarter, 4% in our full-service hotels alone, reflecting less favorable holiday timing on the heels of a very strong third quarter. Looking ahead, in the first quarter of 2015, group revenue pace for our company-operated full-service hotels is up 6% while our full year 2015 group pace is up 5%. Meeting planners are bullish, booking windows are lengthening and future room rates are strengthening. In fact, in the fourth quarter, room revenue for managed group business booked for all future periods increased 9%. Room rates are moving higher. In 2015, we expect special corporate room rates from continuing accounts will increase 5% to 6%. Once again this year, we are bidding on fewer accounts in order to increase available inventory for higher rated retail business. We remain bullish about demand trends in North America. Consumer confidence is up and we are approaching record occupancy rates in our hotels. To be sure, the strong dollar will likely discourage international travel to some gateway cities in the U.S., but across our U.S. system international guests make up only about 5% of our room nights. So we don't see this as a significant headwind to our U.S. operation. All in all, we expect North America system-wide RevPAR will increase 5% to 7% in both the first quarter and the full year 2015. In our Caribbean and Latin America region, constant dollar RevPAR rose 8% in the fourth quarter. Strong leisure business and good group demand drove results in the Caribbean and Mexico. Brazil's results are likely to remain weak due to the soft economy as well as a tough comparison to last year's World Cup, but we remain bullish about this country's long-term growth potential. We expect constant dollar RevPAR growth in the Caribbean and Latin America region will increase at the mid-single-digit rate in 2015. In 2014, we earned roughly 4% of our worldwide fees in the Caribbean and Latin America region. RevPAR in Europe rose 3% in the quarter, on a constant dollar basis, benefiting from good group attendance, strong holiday demand in Germany and Austria, and easy comparisons to the prior year's poor weather. At the same time, results were constrained by weak lodging demand in Russia. Looking ahead to 2015, we expect the London market will benefit from strong group business and the impact of the Rugby World Cup late in the year. Although the broad European economy is soft, roughly 30% of our European lodging demand comes from outside Europe, with about 20 points from North America and six points from Asia. With the continued strong dollar and our concentration in attractive gateway cities, we could see upside from a good American tourist season summer. We expect 2015 RevPAR will increase at a low single-digit rate in Europe. In 2014, 7% of our fees came from this region. In the Middle East and Africa, constant dollar RevPAR increased 15% in the fourth quarter. RevPAR growth was strong in Egypt, including both business travel to Cairo and leisure travel to the Red Sea. In Africa, our Protea Hotels are on marriott.com and we've completed systems integration at a third of the properties. For 2015, we expect constant dollar RevPAR in the Middle East and Africa region will increase at a high-single-digit rate. In 2014 3% of our fee revenue came from this region. RevPAR in the Asia Pacific region increased 3% on a constant-dollar basis in the fourth quarter. In Japan, U.S. arrivals increased as the weakened yen made the country more affordable to international travelers. RevPAR in Greater China increased slightly reflecting strong Shanghai demand offset by the disruption from political demonstrations in Hong Kong. In 2015, we expect demand will remain strong in Shanghai and improve in Hong Kong, yielding a mid-single-digit growth rate for the region. In 2014, the Asia Pacific region accounted for 9% of our fee revenue with about five points coming from Greater China alone. Across all regions our system-wide international hotels reported 5% higher constant-dollar RevPAR growth in the fourth quarter but only a modest increase in RevPAR on an actual currency basis. Including the impact of hedges, currency moves reduced our pre-tax earnings by about $5 million in the quarter and $12 million for the full year. In addition, we booked an $11 million charge earlier in 2014 due to the Venezuelan bolivars' devaluation. Our operations outside the United States contributed roughly 25% of our fees in 2014. Each year we pragmatically hedge to minimize the impact of currency moves, usually a few quarters prior to the start of the year. For 2015, we estimate a 1% change in the value of the dollar in all of our markets, net of hedges, would change our adjusted EBITDA by roughly $3 million for the full year. Property level margin performance across our system was outstanding in the fourth quarter. Comparable company operated house profit margins increased 110 basis points in North America and 90 basis points worldwide. Higher room rates and continued productivity gains drove our results. For 2015, new accounting rules for the lodging industry require service charges to be included in property revenue. While we would have estimated worldwide house profit margins would increase roughly 90 basis points worldwide in 2015, adjusting for the impact of this accounting change, we estimate our reported margins will increase roughly 60 basis points. We do not expect a material impact on hotel profitability or fee revenue from these accounting changes. Worldwide, fee revenue totaled $430 million in the fourth quarter, an 11% growth rate, reflecting higher RevPAR and unit growth. For full year 2014, incentive fees increased 18% with more than half of our hotels worldwide paying incentive fees, up from 38% in 2013. For full year 2015 we expect fee revenue will increase 9% to 11% with incentive fees increasing at a low double-digit rate. Fee revenue growth will likely be constrained by unfavorable foreign exchange rates, lower deferred fee recognition, and the impact of renovation. We estimate foreign exchange alone is likely to reduce total fee revenue by $15 million to $20 million in 2015. We expect 2015 owned, leased and other, net of direct expenses, will be roughly flat to 2014 results, reflecting stronger results at renovated hotels and higher credit card branding fees, offset by the impact of property renovations, lower residential branding fees, lower termination fees, and roughly $5 million of unfavorable foreign exchange. We expect 2015 general and administrative costs will decline to $635 million to $645 million, reflecting modestly higher core admin costs, offset by lower legal costs and an easy comparison to the 2014 bolivar revaluation. We also expect G&A to reflect a roughly $5 million favorable foreign exchange impact in 2015. Net interest expense should increase to roughly $135 million, reflecting a senior note offering in the fourth quarter of 2014, lower capitalized interest with the completion of the three EDITION hotels, and higher overall debt balances. We expect interest income will increase reflecting our $100 million mezzanine loan on the Atlantis hotel which we funded in the fourth quarter of 2014. We expect 2015 fully diluted EPS will total $3 to $3.12, an increase of 18% to 23%, and adjusted EBITDA will increase 13% to 16%. Remember, this guidance excludes the pending Delta acquisition. We expect the P&L impact of Delta to be a little noisy in 2015 due to the integration and transaction costs and the like, but the transaction should be modestly accretive in 2016. Our RevPAR sensitivity is unchanged. We estimate that a point change in our RevPAR outlook across our system in 2015, assuming it was evenly distributed, will be worth about $20 million in fees and roughly $5 million on the owned and leased line for the full year. Investment spending should total $600 million to $800 million in 2015, including about $125 million in maintenance spending and $135 million for the Delta acquisition. In 2015, we plan to renovate several owned and leased hotels and begin construction of a Fairfield Inn in Brazil. We expect asset sales and loan repayments will total roughly $600 million to $650 million, including the sale of the Miami Beach EDITION and Residences and the New York EDITION. As a result, we expect cash return to shareholders in 2015 will total at least as much as we returned in 2014. For the first quarter, we expect fee revenue will increase at a mid-teens rate with higher relicensing and application fees. While group pace is strong, full service RevPAR growth in North America is likely to be a bit lighter than later in the year due to property renovation schedules and the recent Northeast snowstorms. We expect owned, leased and other revenue, net of expenses, will increase more than 20% with the addition of the Protea leased hotels and higher credit card branding fees. G&A should increase in the first quarter, reflecting higher brand initiatives and hotel development expenses. However, first quarter G&A will also benefit from a roughly $12 million net favorable impact to our legal expenses associated with certain litigation resolutions. All in all, we expect EPS to total $0.68 to $0.72 in the first quarter. We appreciate your interest in Marriott. So that we can speak to as many of you as possible, we ask that you limit yourself to one question and one follow-up. Maria, we'll take questions now.

Thank you. Our first question comes from the line of Felicia Hendrix of Barclays.

Hi. Good morning. Thank you for taking my question. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Good morning.

Good morning. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning.

Arne – hello. Clearly, Arne, for you, where we are in the cycle certainly favors the Select-Service hotels. Just wondering with luxury and upper upscale RevPAR lagging since last year, what are you doing at those chain scales to boost RevPAR growth or is it just simply a function of the cycle? Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah, it's good question. I mean, I think the biggest reason for the difference between the upscale numbers and the upper upscale numbers is really about group. And, obviously, we've seen group demand build nicely over the course of the last 12 months or 18 months and I think, if anything, we see that demand continuing to build and, as a consequence, should get quite a bit better. Having said that, as we've talked in prior calls, I think in a building rate environment, transient tends to grow faster than group. That is the case even if group is quite healthy. And, obviously, one of the shortcomings of a RevPAR-dominated statistic, when you look at our industry, is it does not include non-rooms revenue that's associated with the group business. And if you include that, I think you get probably a truer sense about what's going on. I know a couple of folks have asked questions about whether luxury, for example, lagging some of the other brands is a sign of – an early sign maybe of getting to the maturity of the cycle. We don't believe that to be the case. We've poked at it in every way that we possibly can. And we don't think there's either a logic nor data to support a conclusion that there are any big conclusions that ought to be drawn by the difference between luxury or upper upscale RevPAR and the upscale RevPAR.

Helpful. Thank you. And then, Carl, you were just giving us a lot of details about SG&A. I appreciate that. You grew it slightly in 2014 and you're projecting a 2% to 4% decline in 2015 and you gave us the reasons why. If you look back to your Investor Day in September, you provided a 2017 goal of about $710 million. I'm just wondering, is that goal still part of your three-year outlook because that would imply a mid single-digit CAGR in 2016 and 2017, which is significantly higher than what you've done recently. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Yeah. I think when we did our Investor Day, I wouldn't look at that as a forecast as much as we're putting goalposts out there with certain percentages. We're very focused on G&A costs and managing our costs down. As I mentioned, we have some favorability coming in 2015 with FX as well as lower legal costs that are helping us. But let there be no mistake, we are very focused on G&A to keep those costs flat or growing at a minimum amount.

Okay. So the goalposts that you gave us kind of implied a 3% to 4% CAGR. I mean, if we're just trying to model out further, should we use a low single-digit CAGR going forward? Arne M. Sorenson - President, Chief Executive Officer & Director: I don't think we want to give you a new 2017 model at this point, Felicia. But I think you've got what you've got to make some judgments.

Okay. Thanks a lot. Arne M. Sorenson - President, Chief Executive Officer & Director: You bet.

Our next question comes from the line of Shaun Kelley of Bank of America.

Hey. Good morning, everyone. Arne M. Sorenson - President, Chief Executive Officer & Director: Hi.

I want to dig in on the incentive management fees a little bit more. So, I think, Carl, in your prepared remarks you said low double-digit for kind of 2015 as initial outlook. So (29:09) understand that a little bit better, from two regards. One, should we expect some of the Select-Service portfolios to be moving into the money, I guess, if you will, in 2015? And then second, we heard from a big owner of Marriott Hotels earlier today that they were successful in renegotiating some contracts as it related to incentive management fees. And I'm curious if that's at all a drag for you? And if you could just give a little more color on what that means from Marriott's perspective. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Sure. I think there's a couple things that are affecting the incentive fees. FX, as I pointed out in my prepared remarks, a little bit of a headwind. We've got some renovations going on at some big hotels in the U.S., full-service hotels that are great incentive payers that we'll get a little bit pullback there. Last year the World Cup in Brazil generated a lot of incentive fees; that's a little headwind there. But I – and we got some deferred fees in 2014 that won't repeat. I think your question about the portfolios of limited service, you could see as in 2014 we had 50% of our hotels paying incentive fees and that was up from 38% the previous year. So you're beginning to see some of those portfolios move in. They're not generating a lot of dollars yet. They're just starting to come into the paying. But as RevPAR continues to grow, you'll see those limited service ones contribute more. Arne M. Sorenson - President, Chief Executive Officer & Director: How about the host portfolio, Carl? We had a recent renegotiation and... Carl T. Berquist - Chief Financial Officer & Executive Vice President: Well, we have every now and then we talk about a hotel or some negotiations, but nothing that moves the needle. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah.

Great. Thank you very much.

Our next question comes from the line of Joel Simkins of Credit Suisse. Joel H. Simkins - Credit Suisse Securities (USA) LLC (Broker): Yeah. Hey. Good morning, everyone. Quick question for you. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning. Joel H. Simkins - Credit Suisse Securities (USA) LLC (Broker): Obviously, you've tacked on Delta here that follows on the heels of Protea. How should we be thinking about sort of your future appetite for tuck-in acquisitions? Are there any geographic holes you guys feel like you're missing at this point? Arne M. Sorenson - President, Chief Executive Officer & Director: Well, there's a big world out there. And I think in some respects, this is also a repeat of what we said the last few quarters. I think if you had asked us at any time in the last few years whether we would have added this many brands, we wouldn't have probably discouraged you from thinking we'd do it. And we wouldn't have identified AC in Spain or Protea in South Africa or Delta in Canada as being companies that we had necessarily targeted, but we're really pleased with all of them. And I think what we've found is acquisitions that seem to be priced in a way that allows us to get to creating economic value and earnings accretion fairly quickly, and priced well below our company valuation given to us by markets. You see that accretion quite quickly. And in every instance we've found deals that give us a new platform for growth. And that's the real silver lining here. We are not going out simply to acquire additional rooms to drive our rooms count, but we're really going out to try and either develop brands internally, which is cheaper in some respects but harder in some respects, because you start at zero, obviously, in terms of current distribution, or acquire. But in either instance, hopefully have a platform that will continue to drive substantial unit growth, new incremental unit growth, for those platforms which is what really delivers the great value. And I think when you look out through our pipeline, we see something like 25% to 30% of the rooms that we're working on already which are being pursued in platforms that we didn't have just a few years ago. Joel H. Simkins - Credit Suisse Securities (USA) LLC (Broker): That's very helpful. And then we obviously, just as a follow-up, know very much about what's going on in the Select-Service climate here domestically in terms of unit growth. What are you seeing right now in lending activity for, let's say, chunkier urban hotels or resorts per se? Carl T. Berquist - Chief Financial Officer & Executive Vice President: I think you're starting to see some of the big major banks get back into the lending market for big hotels, but it's a very small number and it's very targeted for construction financing. And then I would also say it's related to whether it's a convention hotel or something involved with the municipality close by. The other thing I would say is there's a long lead time for those hotels, especially the full-service urban ones. We're seeing those lead times really stretch out to get those things open. Arne M. Sorenson - President, Chief Executive Officer & Director: But it is still the case that the full-service development which is being pursued in the U.S. today is a very small volume... Carl T. Berquist - Chief Financial Officer & Executive Vice President: Very. Arne M. Sorenson - President, Chief Executive Officer & Director: Of new build deals. And they tend to be deals that have – often they're big convention hotels. You think about the Marriott Marquis and McCormick Place in Chicago or we've got a Marriott Marquis in Houston which is under development. The cities have both been involved in helping to put those deals together and to make them happen. We're not seeing a lot of full-service development which is happening independently from forces like that. So you end up with banks I think getting – opening up a bit for financing existing hotels in the full-service space, but not enough activity in new build to really be able to say that they're open for that kind of business. Joel H. Simkins - Credit Suisse Securities (USA) LLC (Broker): That's very helpful. Thank you.

Our next question comes from the line of Robin Farley of UBS.

Great. Thanks. Two questions. One is you have Asian RevPAR in your guidance kind of accelerating in 2015. Is that just easier comparisons in Hong Kong, or is China actually accelerating underneath that Asia Pac guidance overall? Arne M. Sorenson - President, Chief Executive Officer & Director: Asia Pacific is a big market, and I think we'll see hopefully – knock on wood – easier comparisons in places like Hong Kong and Thailand. Thailand was rough in the first part of 2014 because of political demonstrations, and it's much more stable today than it was then. We wouldn't expect a meaningfully different kind of performance in China in 2015 from what we saw in 2014, although to be fair, the quarters got weaker in China in 2014. And so, we enter 2015 with maybe a somewhat lower trend line, but still kind of a mid-single-digits RevPAR growth would be our guess. And you roll all those things together and maybe it gets a little bit better in 2015 than it was in 2014.

Okay. Great. Thanks. And then as my follow-up, the guidance for asset sales of $600 million to $650 million -- are you expecting additional asset sales outside of the New York and Miami EDITIONS? Carl T. Berquist - Chief Financial Officer & Executive Vice President: Oh, yeah, we have a small Courtyard in Europe that we have on the market, so we'll sell that. We'll also collect some notes that come due in 2015, and that helps us as well in that total recycled number of $600 million to $650 million.

Okay. Great. Thank you.

Our next question comes from the line of Steve Kent of Goldman Sachs. Steven E. Kent - Goldman Sachs & Co.: Hi. Good morning. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Good morning. Steven E. Kent - Goldman Sachs & Co.: Two questions. First, just give us a sense for moving to dividends from buybacks on your capital allocation front. Especially as, if you look historically at your stock and its multiple, you're near or above your previous high. So I'm just trying to understand the rationale of buybacks versus dividends, and the way you and your board are thinking about it. And then just as an aside, you mentioned that 9,000 of the 46,000 rooms added in 2014 were from competitor brands' conversions. What are the brands – what brands are typically deciding to convert to Marriott? How do you target more of those conversions over time, and are they across all price points for you? Arne M. Sorenson - President, Chief Executive Officer & Director: Those are all good questions. Let's start with dividends versus share repurchases. And I – this is a conversation we continue to have, not just with our board but also with all of you in the investment community. And I think obviously, buying back stock is a inherently more flexible approach than dividends. It allows us, in an industry that does have ups and downs, to calibrate much more instantly. And also in a stage of our business where we are jumping at opportunities when they present in a way that's compelling, Delta being the most recent example of that with a $135 million roughly acquisition which will close in the next few months here. Share repurchase also allows us to flex up and down on a short-term basis in a way that accounts for the other investment activity that we've been making. We hear from the Street over and over again a strong desire for us to continue to return capital to shareholders. We don't hear a strong desire that that be in the form of dividends as opposed to share repurchases. Not that individual investors might have a view one way or another, but when we listen to the community as a whole, we don't hear a strong push either way. Your question obviously focuses in essence on value and the valuation of the company. We closed yesterday at $81 or so. I think if you take our midpoint of – and earnings release, that's probably a $26 EPS multiple or $26 and change, which is higher than our sort of 20-year average which we think of it as being about a $22. But obviously that multiple varies meaningfully whether we're in a growth stage of the cycle or some other stage of the cycle. And if you look at the kind of earnings growth which this business modeled in this way can produce, with RevPAR growth, unit growth, cost control, and good capital discipline, I think we see EPS that can continue to grow in the 20% range hopefully here over the next couple of years. And I don't think that valuation is a troubling one in any respect. And so, I think it's a long-winded way of saying I suspect we'll continue with kind of the approach that we've taken over the last, not just few years, but probably last decade or more. You asked about conversion of other brands, 9,000 rooms. I'm not sure I can pick them off the top of my head. I'm sure there are dozens of brands which are in there. I did walk through a hotel yesterday which has not been converted yet, but wasn't a loft and is becoming an AC Hotel, and will reopen as an AC Hotel by Marriott in the next 30 days or so. I think that's the first we've seen of that. I know Laura is looking at a list. I don't know Laura whether you...

I'm looking at a list of the fourth quarter conversions and they're largely – I mean, there's been a lot of Autographs added in the fourth quarter. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah, so that's independent to...

...largely independent. We also saw some conversions into the Marriott brand and Renaissance brand that were also independents. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah.

So in the fourth quarter, it's probably independents... Arne M. Sorenson - President, Chief Executive Officer & Director: Independents would probably be the biggest single chunk.

Yeah. Steven E. Kent - Goldman Sachs & Co.: Okay. Thank you. Arne M. Sorenson - President, Chief Executive Officer & Director: You bet.

Our next question comes from Harry Curtis of Nomura.

Good morning. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning, Harry.

Two quick questions. The $600 million that you expect to spend this year -- you've already isolated maintenance and Delta, leaving you with $340 million to spend. One of your competitors mentioned that their growth – that the investment cost to spur 6% to 7% growth was about $100 million for 2015. Of that $340 million, how much do you think is being used to drive your unit growth outside of acquisitions? Carl T. Berquist - Chief Financial Officer & Executive Vice President: Well, if you kind of put in things like key money and that kind of stuff, it's obviously in there. We also have in there about, I don't know, $80 million to $100 million to finish the EDITION hotels building. And I think as we grow with Select-Service, we don't need to put a lot of capital in to get new Select-Service hotels or put it in. I think if you added it all up, it's probably $100-and-some million that we'll spend in a year on key money and loans and all that. If you think about in 2014, we did the Atlantis mezz loan for $100 million and that would count as capital in 2014. So it's those kinds of things, Harry versus a said amount that you have to invest to keep the growth going. Arne M. Sorenson - President, Chief Executive Officer & Director: It is, as Carl said, it is a small percentage of the total amount that we're investing which is sort of run of the mill support to our owners, franchisees and development deals. I don't think we've mentioned today, but we've got in the 2014 – or 2015 spending, excuse me, not just the EDITION finish that Carl talked about, but we're building a couple of hotels in Brazil because we think they will give us a platform to leverage stronger growth in Brazil going forward. Those are fee ownership deals and obviously we'll turn around and recycle that capital before long. We are renovating, we've got a leased hotel in the Caribbean that we're putting $30 million or $40 million in. We own the Charlotte Marriott which we are reinventing to prove that we can take a 20-year-old Marriott Hotel and reinvent it and drive decent returns and that's probably a $30 million or $40 million project. We've got a number of those which we would not categorize at all as being sort of regular support of the development world. And in fact, as our developers are out around the world, competing with our principal competitors, we are absolutely convinced that we are not more aggressive in offering key money or other financial support to our prospective owners than our competitors are, in fact just the reverse.

Okay. That clarifies that. And then, the second question focusing just in the U.S., is it a reasonable range to be using in the U.S. net room growth in 2015 of roughly 20,000 to 25,000 new rooms this year. And what percentage of that will come from conversions and does it change much in 2016? Arne M. Sorenson - President, Chief Executive Officer & Director: The U.S. – Laura can we pull these numbers out as we're talking, but the U.S., overwhelmingly the U.S. numbers are going be driven by new build, upscale hotels. Usually in secondary markets, secondary or even tertiary markets, so think about the brands we've had for some time, Courtyard, Residence Inn, TownePlace, SpringHill Suites and Fairfield, but also then the growth that we're going to be getting in the next few years from AC, particularly Moxy, I think the first will probably not open until 2017 is my guess. So I don't think that will drive significant openings. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Harry, probably about half the openings in 2015 will be in the U.S. The majority of those will be flex service and the rest will be throughout the international area.

And what percent are likely to be conversions of that? Arne M. Sorenson - President, Chief Executive Officer & Director: Remember we have a hard time predicting conversions because they're not in our pipelines. And I don't think we've got our 45,000-ish rooms to open next year broken down between conversions and new build hotels.

Okay. All right. Arne M. Sorenson - President, Chief Executive Officer & Director: There'd be a few in the next few months undoubtedly that are in there, but we wouldn't be very aggressive in trying to predict conversion, for example, happening in late 2015. We probably don't even have those discussions going yet.

Very good. That's helpful. Thank you. Arne M. Sorenson - President, Chief Executive Officer & Director: You bet.

Our next question comes from the line of David Loeb from Baird. David Loeb - Robert W. Baird & Co., Inc. (Broker): Good morning. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning, David. David Loeb - Robert W. Baird & Co., Inc. (Broker): Arne, a big picture follow-up to Joel's brand question, what's the optimal number of brands? You've successfully integrated brands like Renaissance in the past as a way to gain market share in crowded markets, and AC looks like a similar play in segmenting markets, but for Delta or future potential brand acquisitions, is there a diminishing return in terms of your ability to capture more of the travel of the Marriott Rewards customers? Arne M. Sorenson - President, Chief Executive Officer & Director: I don't think so. I mean, we've added – we obviously have a good portfolio of brands, as many as anybody if not more, and we still drive 50% of our business through the Marriott Rewards customer base. I think our pipeline of customers that we connect to these hotels are successful in most markets and with most hotels of driving an immediate lift, usually quite substantial. And so, in no respects do we believe that we have too many brands and we've gone past that point. I think there are a couple of things to keep in mind. One is in this lifestyle space, we've obviously watched it for years. We've talked with you about what we started with, with Renaissance first and then EDITION, but now more recently with Autograph and AC and Moxy. And we think we now have five very strong brands in the lifestyle space giving us a good stack across the segments in that area. And each one of those brands, I think is resonating not just with customers but with our owners and franchisees and should have good growth prospects ahead, and I think will flavor the way our entire portfolio of brands is looked at. You look at our recent acquisition of Delta and it does very much stand on its own from a financial perspective with the existing Canadian distribution and existing Canadian pipeline that they have. But you look beyond that and we see an opportunity to compete in a space where we didn't really have a brand. And you see with Hilton and their DoubleTree brand or you see with Starwood and their Sheraton brand that they've got brands that participate in this part of the full service market that have been successful, and we think there's something we can do with the Delta brand in that space as well. Again, I think as you look forward, it's very hard to predict whether we'll find additional brands that are available on both attractive economic terms, which is essential and attractive on strategic terms. So we're not simply going to add brands for – without a view about our ability to grow them longer term. David Loeb - Robert W. Baird & Co., Inc. (Broker): Very helpful. And a quick follow up for Carl. How much gain on the Miami EDITION, Residences is embedded in your guidance for 2015? Carl T. Berquist - Chief Financial Officer & Executive Vice President: We're just assuming a break even on it. David Loeb - Robert W. Baird & Co., Inc. (Broker): On the Residences part? Carl T. Berquist - Chief Financial Officer & Executive Vice President: Yeah. Just. David Loeb - Robert W. Baird & Co., Inc. (Broker): Okay. Thank you.

Our next question comes from the line of Joe Greff of J.P. Morgan.

Good morning, everybody. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Hi, Joe. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning, Joe.

You guys obviously have done a very good job on growing the footprint, growing the pipeline and signing new contracts, and as we look at your progress and efforts and other lodging companies that we follow, there seems to be sort of a divergence between the haves which of course, you're one and then the have-nots. And so the question we have is that -- the somewhat divergence, is that creating any heightened or incremental competition for you management or franchise contract in the U.S. or outside the U.S.? Arne M. Sorenson - President, Chief Executive Officer & Director: Well, thank you for putting us with the haves, by the way. We appreciate that. I don't think so, no. I mean, obviously we are in an intensely competitive industry, and each of us want to better the other, there's no doubt about that. I think one of the things that has been interesting is the companies have gotten to a – collectively the big companies are a bit more stable and a bit longer-term in their focus than they've probably ever been and that drives I think more rational decisions in the way they compete for management contracts or franchise contracts. And if anything, if you said we're getting into an industry in which a relative fewer of us have that much more attractiveness to owners and franchisees that would probably tend to drive towards a bit less intense competition as opposed to more. But having said that, I think the right way to think about this business is it's an intensely competitive business and it's competitive for the guests that are checking into our hotels as well as the owners and franchises that we're partnered with.

Great. Thank you. And, Carl, my follow up for you, can you help us understand what's embedded in your 2015 guidance in terms of gross proceeds from asset sales? And obviously the $230 million from the Marriott in Miami Beach, or the EDITION in Miami Beach. But can you help us understand what else is contemplated within your guidance? Thank you. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Yeah, in the $600 million to $650 million that we're spending -- we think we'll generate about $600 million to $650 million recycling. Obviously the two EDITIONS, Clock Tower, and Miami as well the Residence. We closed a lot of the Residences in 2014, but we got about probably $50 million still coming over into 2015 from the Residences. We'll also – like I said, we've got small Courtyard on the market, we've got some notes that we're going to collect all together probably in the range of about $30 million on the notes. We've got some preferred stock that comes due in 2015. So it's a myriad of smaller things, Joe, that just kind of add up to that $600 million to $650 million. The biggest piece being the (53:49)

Thank you.

Our next question comes from the line of Thomas Allen of Morgan Stanley. Thomas G. Allen - Morgan Stanley & Co. LLC: Hey, good morning. The color around the amount of demand coming from locals both in the U.S. and Europe is really helpful. But just as you think about your now 49 million Member's Rewards Program, can you just talk about what percentage of your customers are U.S. versus international customers and how to think about that kind of driving your overall RevPAR and revenue performance across your portfolio? Thank you. Arne M. Sorenson - President, Chief Executive Officer & Director: It's a big globe out there. But I think one thing that can be said is in virtually every market the biggest customer is a local customer. So, in the United States, for example, 95% of our business is U.S. business. 5% is inbound business. Now, obviously city-by-city it varies. We think probably New York in the U.S. is the most international city in terms of visitation. But the room nights are probably between 10% and 15% total, something like that. Obviously, you go to different cities and you see some variance. Even in China, in our hotels, the majority of our business, a heavy majority of our business is Chinese travel. It would be more mixed in a city like Shanghai than it would be in a Guangzhou or a Wuhan, but still across the country as a whole it's going be mostly Chinese business. And you look at what's happening in that space, obviously all of us are focused on currency these days. Currency will hurt arrivals in a place like New York almost for certainty. In fact, we think room night – international arrivals to New York were down probably 3% in the fourth quarter of 2014. Conversely, it will help for Americans, for example, traveling to London or Paris, and we thought we saw increases in Paris in the fourth quarter of sort of a mid-single digit percentage of American travelers. The other thing that's happening, though besides foreign exchange and impact that that has on the cost of visitation is we've got this growing global middle class that is driving an increase in demand, going into the top end of that funnel. And so, absent significant moves in foreign exchange, we would expect many of the world's best destinations to continue to drive higher and higher international visitation. Our Marriott Rewards Membership becomes increasingly international in its mix. That's no surprise. It really follows with our opening hotels in those other markets and it follows with the outbound travel from those markets. So you look at a place like Japan, Japanese have obviously been huge global travelers for 25 years or 30 years. And before we opened our first hotel in Japan, we had a substantial number of Japanese members of the Marriott Rewards Program because they came and stayed at our hotels in the United States when they came to the United States. Now that we have great momentum in adding to hotels in Japan, we end up with the extra benefit of having those local customers that we can sign up when they're staying with us in our hotels in Japan, as well as when they come to visit in the rest of the world. I don't know if that answers all your question. I've sort of rambled on around it a bit, but we think net-net that currency may have some impact in the short term. Probably they'll tend to offset each other, so we'll have as much positive from folks going to Europe as we'll have negative from folks coming to the United States. But longer-term, we'll continue to see an increase in internationalization of our Rewards Program and increase in volume of international travel, period. Thomas G. Allen - Morgan Stanley & Co. LLC: And that's perfect for what I was trying to get out of it. And then just a follow-up, you answered earlier about China, how you're expecting kind of similar mid-single digit growth to what you saw in 2014. But one of your peers talked I think yesterday about seeing some green shoots in terms of improvements in kind of the F&B environment there. Are you seeing anything or are you hearing anything similar or seeing anything similar? Thank you. Arne M. Sorenson - President, Chief Executive Officer & Director: Well, if you look at it – our two biggest markets are Shanghai and Beijing. They are meaningfully different in the way they're performing. Shanghai is New York and Beijing is Washington. And as a consequence, you see in Beijing lower RevPAR and lower F&B year-over-year performance than you do in Shanghai. Shanghai, even though we are now probably 25 hotels or 26 hotels open, I don't know precisely today, as we speak, but with Ritz-Carlton, JW Marriott, Marriott – I'm sure we're the biggest high-end operator in Shanghai by a lot. We saw RevPAR up in – above the 5% range, probably 6 or 7% range. And if anything, we see Shanghai continuing to perform well because there's still a lot happening in the commercial space in China, even with the government austerity drives for government spending. If you ask narrowly, do we see green shoots based on government spending, I don't think so. Maybe they're there and can be discerned when we get a little farther down the road, but at the moment our expectations at least would be that the government spending in art (59:49) space will continue to have pressure on it. Thomas G. Allen - Morgan Stanley & Co. LLC: Thank you. Arne M. Sorenson - President, Chief Executive Officer & Director: You bet.

Our next question comes from the line of Ian Rennardson of Jefferies.

Yeah, thank you. Good afternoon. Arne M. Sorenson - President, Chief Executive Officer & Director: Hi, there.

Just a quick question for Carl. What is behind the $13 million of interest income in Q4, please? Thank you. Carl T. Berquist - Chief Financial Officer & Executive Vice President: $13 million of interest? I didn't hear your... Arne M. Sorenson - President, Chief Executive Officer & Director: That's your accretion true-up.

Yeah. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Oh, why we had the benefit? It was a one-time interest accretion true-up. We had been recording too much interest on a accreting bond, and we adjusted that in the fourth quarter as about $7 million benefit.

Okay. Thank you very much.

Our next question comes from the line of Bill Crow of Raymond James. Bill A. Crow - Raymond James & Associates, Inc.: Hey, good morning, guys. Nice quarter. Arne... Arne M. Sorenson - President, Chief Executive Officer & Director: Hi, Bill. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Hi, Bill. Bill A. Crow - Raymond James & Associates, Inc.: Hey, Arne, how close do you think we are to hitting the high watermark on the pipeline? In other words, when we get to that point where we're opening more rooms than we're adding. And all your new acquisitions notwithstanding, it seems like we've got to be getting somewhere close to that number. Arne M. Sorenson - President, Chief Executive Officer & Director: Getting close to the peak of the pipeline? Bill A. Crow - Raymond James & Associates, Inc.: Yeah, where we'd start opening more rooms than adding new rooms to the pipeline. Arne M. Sorenson - President, Chief Executive Officer & Director: It's a good question. I don't think that that's near actually. I mean, for better or worse, the longer RevPAR goes up and profitability of hotels improve, more projects pencil. And you can say for better or worse because if you could have a omnipotent kind of wisdom, I suspect at some point you would say, well, let's start to calibrate that back, simply because we know that there'll be a correction coming at some point in time. But our industry doesn't really work that way. So I would expect that the pipeline – and, again, this is sort of a U.S. focused comment, I'll confess to that. But I would expect that the pipeline in the U.S. will continue to grow. With each year, we see mid single or mid to high single-digit RevPAR growth and enhanced profitability that goes with that. You get to the Rest of the World and I suspect – by the way, each one of the last few years, our team in China has warned that we may see fewer signings this year than they did in the prior year. Through 2014, they've been proven wrong and we've continued to sign tremendous volume. But I suspect, again, that right now our expectations for 2015 would be China will sign fewer hotels. We'll bring fewer hotels into the pipeline than we brought in in 2014. And it might be less than we open, although I doubt that still, because I think the openings are still to come and that's a multiyear thing. In any event, you can see different dynamics in different countries based on this. And I'm hopeful that longer term one of the advantages we will have in the next downturn will be that we've got a big globe out there with growth that's coming from lots of different markets and they're not all trading in tandem anymore. So, obviously, you've got the U.S. which is dramatically stronger than much of the Rest of the World. And if we could envision an environment which U.S. growth tempered a bit and that would have some impact here. But that may or may not be duplicated in other markets of the world and maybe we don't end up with the same volatility we've had in the past. Bill A. Crow - Raymond James & Associates, Inc.: All right. That's helpful. And, Carl, just a housekeeping note. You've talked about the Delta acquisition being accretive in 2016, but I think you said noisy in 2015. Is there any detail you can put behind that so that we're not surprised by headline result on these quarters? Carl T. Berquist - Chief Financial Officer & Executive Vice President: Sure. Yeah, we think, with transition costs, transaction costs and just implementing all that, it will probably cost us a couple of pennies in 2015. But that's not in our guidance, Bill. And what we'll do is, as we incur those, we'll point them out to you as we hit those things. We're still obviously sharpening the pencil and finalizing all those estimates right now. Bill A. Crow - Raymond James & Associates, Inc.: Great. That's it for me. Thank you.

Our next question comes from the line of Vince Ciepiel of Cleveland Research.

Hi. Good morning. My question is on... Carl T. Berquist - Chief Financial Officer & Executive Vice President: Hi.

...fee guidance. You guys talked about 14% to 15% type growth in 1Q kind of implies 9% 2Q through 4Q. Could you help quantify any of the year-over-year comp issues related to termination or deferred fees that might skew the growth rates in those two periods? And, especially in light of you guys mentioned an FX headwind, I would think a lot of that or a good portion of that would show up in 1Q. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah. I think in the first quarter we've got sort of a chunkier – a positive chunkier relicensing fee number, which come through the franchise fee line. As existing hotels sell, there are fees that are collected with the sort of relicensing to the new buyer. And there's at least one meaningfully good-sized portfolio, maybe two ,that will close in the first quarter, which will help us in Q1. So that may be offsetting what I think you're right about, which is that the FX impact on fees would be otherwise we would guess most significant in Q1. Obviously if currency stays where they are by the time you get to Q4, the comparisons will get easier and easier. Certainly the full year fee growth number is impacted by the FX by I would think something like $20 million to $25 million even. We think $17 million is the fee number if you look compared to full year 2014 actual currency. But if you look at sort of where we expected currency to be when we released our third quarter earnings, if anything, the impact on fees is even a little bit more than that.

And we had it – in the third quarter of 2014, we had a $15 million deferred fee that was recognized. So you've got a tough comparison in that quarter. And that was – you can read more about that in the press release for Q3. Arne M. Sorenson - President, Chief Executive Officer & Director: Those would be the two biggest.

Yeah. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah.

Great. That's helpful. Thanks. And then second question also on fee guidance, maybe approaching it from a different perspective. You mentioned that incentive fees, which is largely international, still you expect to grow low double-digits. Your other two buckets, I think base is 70% domestic and franchise 90%. What type of growth rates are you guys kind of thinking about to get to that 9% to 11% range for 2015? Thanks. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah. We don't really have that handy. But clearly, given the U.S. numbers, we'll expect franchise fees to grow faster than managed fees. We have – the hotels that were recently opened in 2014 and the hotels that will open in 2015 in the United States will skew heavily towards franchised Select-Service and Extended Stay hotels. And managed portfolio by comparison will not be adding the same kind of unit growth. So even though we'd expect RevPAR numbers between managed hotels and franchised hotels to be roughly comparable, the unit growth impact to those things will be quite different. And then, of course, you get to the Rest of the World and there we'll see that the FX impact is most pronounced coming out of Europe, for example. And I don't have this in concrete terms for you today, but certainly the FX impact is likely to eat up the RevPAR growth and maybe even a fair measure of the new unit growth that would otherwise drive growth in both management and franchise fees. That will be much less the case in other regions around the world, but there will still be some FX impact. Carl T. Berquist - Chief Financial Officer & Executive Vice President: There will be some. Canada.

Great. Thanks very much. Arne M. Sorenson - President, Chief Executive Officer & Director: You bet.

Our next question comes from the line of Smedes Rose of Citigroup.

Hi. Thanks. I just wanted to ask you, for your Moxy brand, what are the per-key cost to develop that? And is that all new builds or is that a conversion opportunity as well? Arne M. Sorenson - President, Chief Executive Officer & Director: The Moxy in Europe is all new builds. And our biggest partner there is Inter IKEA, which is a affiliate, but not owned by or in any way sort of directly affiliated with the IKEA retail network. But the folks who are owning those hotels and developing them bring a lot of engineering skill and, as a consequence, are doing new build, often modular construction, and the ex-land cost is in the €40,000 to €50,000 per room range. Something like that. In the United States, we are going to be I think much more focused initially on center urban environments. As a consequence, the absolute cost numbers will be higher. The use of modular construction will be either nonexistent or certainly much rarer. And... Carl T. Berquist - Chief Financial Officer & Executive Vice President: There'll be a lot of adaptive reuse (1:09:47) Arne M. Sorenson - President, Chief Executive Officer & Director: It's a little hard to predict. So I don't – I know we've signed a couple of deals in Manhattan. I'm sure the cost per room is sort of well into the $100s. But I can't tell you off the top of my head what it is exactly.

Okay. And then just a housekeeping thing. What was the share count at the end of the quarter? Carl T. Berquist - Chief Financial Officer & Executive Vice President: We'll look that up for you. Arne M. Sorenson - President, Chief Executive Officer & Director: We'll come back to that one. Let's take the next question. We'll throw that one back in if you stay online.

Okay. Thanks.

Our final question comes from the line of Chad Beynon of Macquarie. Chad Beynon - Macquarie Capital (USA), Inc.: Hi. Good morning. Thanks for taking my questions. Arne M. Sorenson - President, Chief Executive Officer & Director: Good morning. Chad Beynon - Macquarie Capital (USA), Inc.: Arne, in your prepared remarks, you mentioned that 60% of your new Rewards members have come from what you call the new generation members. Any early sense of where the brand appeal is for this new group of travelers, and if there's an opportunity for any of your brands' RevPAR index to move up on the back of kind of where this new group is staying? Thanks. Arne M. Sorenson - President, Chief Executive Officer & Director: Yeah. I mean, we're obviously focused on – we had a meeting last week where we brought our senior operators in from around the world, which is something we do every January to talk – or every February to talk about priorities and things. We had a millennial group in to work with us on the second day of the meeting. I talked to every one of those folks as they left afterwards, and every one of them said I hate that you call me a millennial. And I think – I start with that only because I think it's – we're all talking about millennials or next generation or whatever. They are not a monolithic group. And what we see is that they are 20-something-year-old and 30-something-year-old professionals, consultants, road warriors that are already heavily invested in our brands. They are in many respects not that dissimilar from earlier generations of heavy travelers. They may be more technologically connected and obviously that's important to them. But they're maybe quite similar to earlier generations and quite different from some of their peers who we tend to focus on more when we say they are technologically addicted maybe, they are focused on lifestyle, they're focused on food and beverage. And we think they are flavors of all of that there, which of course is one of the reasons we have rolled out this new portfolio of lifestyle brands. And I think, with it, we will and are already finding that we're capturing their interest through both the hotels that we're opening and some of the great things we're doing in the marketing space. And we are committed through them, but also through all of our other vehicles to continue to drive index as well. Chad Beynon - Macquarie Capital (USA), Inc.: Okay. Thanks.

So in answer to the question about shares, so we ended the year with 280 million shares and about 6 million shares of dilution, which would take you for diluted shares at year-end to approximately 286 million. Chad Beynon - Macquarie Capital (USA), Inc.: Okay. And then one final one – sorry, one final one that I had just kind of going back to the IMF fees. You outlined at your Investor Day that 20% of North American IMFs come from New York. And I was wondering if your plus 6% group outlook for 1Q and plus 5% outlook for 2015 holds true in an important market like New York, kind of what your group outlook is given the additional supply that we've seen? And then that's it. Thanks. Arne M. Sorenson - President, Chief Executive Officer & Director: I don't have a group number for you for New York, but Q1 New York could well be negative. You've got Super Bowl, you've got snowstorms, and you've got supply. When we look at our New York numbers, and this is not group only, but whole hotel sort of numbers, we would expect New York to be a few hundred basis points south of the rest of the U.S., and probably the first quarter to be meaningfully the weakest quarter of the four. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Yeah. If you compare on the group side – I don't have the number, but if you just think last year had the Super Bowl, which would be heavy group and not this year, you have a very tough comp relative to group business in the first quarter. Arne M. Sorenson - President, Chief Executive Officer & Director: Okay. Thank you all very much. We appreciate your time and attention this morning and I look forward to welcoming you into our hotels around the world. Get on the road and travel. Hope to see you soon. Carl T. Berquist - Chief Financial Officer & Executive Vice President: Bye, bye.

Thank you. This concludes today's Marriott International conference call. You may now disconnect and have a wonderful day.