Stephen P. Joyce - Chief Executive Officer, President and Director David L. White - Chief Financial Officer, Senior Vice President and Treasurer

Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division Steven E. Kent - Goldman Sachs Group Inc., Research Division Shaun C. Kelley - BofA Merrill Lynch, Research Division Felicia R. Hendrix - Barclays Capital, Research Division Robin M. Farley - UBS Investment Bank, Research Division Joshua Attie - Citigroup Inc, Research Division Joseph Greff - JP Morgan Chase & Co, Research Division Thomas Allen - Morgan Stanley, Research Division

Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Choice Hotels International First Quarter 2013 Earnings Conference Call. At this time, all lines are in a listen-only mode. [Operator Instructions] As a reminder, today's call is being recorded. During the course of this conference call, certain predictive or forward-looking statements will be used to assist you in understanding the company and its results which constitute forward-looking statements under the safe harbor provision of the Securities Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as choice or as management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar import. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Please consult the company's Form 10-K for the year ended December 31, 2012, and other SEC filings for information about important risk factors affecting the company that you should consider. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We caution you, do not place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of today's date. We undertake no obligation to publicly update our forward-looking statements to reflect subsequent events or circumstances. You can find a reconciliation of our non-GAAP financial measures referred to in our remarks as part of our first quarter 2013 earnings press release, which is posted on our website at choicehotels.com, under the Investor Information section. With that being said, I will now like to introduce Steve Joyce, President and Chief Executive Officer of Choice Hotels International Incorporated. Please go ahead, sir. Stephen P. Joyce: Thank you very much. Good morning. Welcome to Choice Hotels First Quarter 2013 Earnings Conference Call. Joining me, as always, is Dave White, our Chief Financial Officer. I'm pleased to report that we had a very good first quarter. We're excited to give you an update on our results and on a number of new initiatives for the company, including the recently announced launch of a new business unit called SkyTouch Technology and our continued progress on our strategic alliance with Bluegreen Vacations. We are very pleased with our performance for the quarter for the core lodging business, especially when you consider that the first quarter is typically not the strongest quarter in the industry or for our company. Overall, our core hotel franchising business continues to perform in line with the expectations that we communicated in February in conjunction with our year-end earnings release. Our current outlook for full year unit growth, RevPAR and effective royalty rate all remain consistent with the outlook we expected and published in February. Several factors contributing to a strong first quarter as reflected in the key indicators we used to measure the performance of our lodging business include: Franchising revenues increased 4% and total revenues increased 6%; domestic royalties increased 5%; domestic systemwide revenue per available room, RevPAR, increased 4.6%; domestic unit growth increased 1.7% and the company enjoyed a 30% increase in new domestic hotel franchise contracts resulting in a total of 83 new domestic hotel contracts. Turning to development, our brands remain attractive to franchisees and we're particularly excited about how well developers and owners continue to respond to our entry into the upscale segment. One of the highlights this quarter is our Ascend Collection. Ascend continued its phenomenal growth with 28 new membership agreements signed for premier destinations compared to 3 membership agreements during the same time last year. This is in large part a result of the properties coming into the system from the strategic marketing alliance with Bluegreen Vacations. Our alliance with Bluegreen enables us to further expand Ascend into great resort destination. It marks a unique relationship with a timeshare company and an opportunity for us to monetize our distribution capability in a new market with new customers. It also represents a blueprint for pursuing similar opportunities that can further monetize our distribution capabilities in the future. We are very pleased with the initial results from this alliance on both the timeshare lead generation front and with room booking trends through our central channels for these resorts. We believe our partner, Bluegreen, is similarly pleased. By the end of March, the Ascend Collection has reached 79 properties open worldwide. With the addition of 19 units in April from the Bluegreen alliance, the system now stands at nearly 100 hotels worldwide. Our Cambria Suites brand is also progressing well and gaining significant traction entering into major urban markets. Last quarter, we talked about the 3 Cambria Suites under construction in the New York City metropolitan area. This quarter, we hosted what we have now termed a sky breaking for our new Washington D.C. property, which is in a prime location for business and leisure travelers, one block from the Washington Convention Center. We are also excited to see the progress on the Cambria Suites, which is under construction here in Rockville, Maryland, nextdoor to our brand-new corporate headquarters. Given recent progress on the development front with this brand, we are optimistic that we will have 30 Cambria Suites properties opened or under construction by the end of 2013. Across all of our brands, we are pleased with the improving development environment for new construction, realizing a 43% increase in new construction contracts for the quarter. Most of the new construction is being generated by the Comfort Inn and Comfort Suites brands, developers are responding very favorably to our new Comfort Inn and Suites prototype with 2 recently announced projects in New York City and 3 more properties in North Dakota, Utah and New Mexico. Financing and lending continues to improve gradually as lenders and developers continue to do due diligence before undertaking new projects. However, our results show signs that the market is opening up. Overall, 2013 remains on track to be a stronger year for franchise development than last year. Changing gears, I want to talk about an exciting opportunity that exists for us in the area of technology. We constantly challenge ourselves to identify additional growth opportunities in business areas that are adjacent or complementary to our core hotel franchising business, which leverages our core competency and our additive to our already strong franchising business model. One of our core organic capabilities is technology excellence. SkyTouch Technology represents a continuation of Choice's long-term history of technological innovation such as developing industry-leading websites and mobile platform capabilities. We believe there are opportunities in the hotel and travel technology space that represent significant long-term upside for our shareholders. In line with this vision, we launched SkyTouch Technology. We are particularly excited about this new division of Choice that develops and markets cloud-based technology products for the hotel industry. Other players in the lodging industry have expressed interest in using the technology products of this division to improve their efficiency and profitability. About a year ago, we completed the rollout of choiceADVANTAGE, our proprietary, highly scalable cloud-based property management system to our own domestic franchise system. So we know that the technology works. We believe it to be the most widely distributed cloud-based property management system in the lodging industry with deployment in more than 5,000 hotels, representing nearly 400,000 rooms. In addition to operating in nearly all of our domestic hotels, the system is in use in a growing number of our international properties across the globe. Through dialogue with other hoteliers, as well as third-party technology experts who serve the industry, including medium and large hotel brands and individual hotel owners, we recognized that there is a large unmet need in the marketplace for a scalable, cloud-based property management system such as choiceADVANTAGE. Specifically, we know that industry leaders are looking for a system like ours that's highly scalable, has comparatively low upfront cost and requires no investment in heavy hardware and related ongoing maintenance costs like many other available property management systems in place today. We began investing in modifications to the technology to enable the software to be sold separate and apart from our brands and our central reservations platform to customers in the lodging industry. This led to the launch of SkyTouch Hotels OS, a new property-based management system for handling reservations, guest-stay information folios and rates. Since our earnings call on February, we have achieved a number of critical milestones for SkyTouch on both the technology front and organizational front. To ensure separation of the new division from the core hotel franchising business, we hired a separate management team with experience in technology, sales and hospitality. We segregated those employees working for the division from the rest of Choice and we have gone as far as to relocate these individuals and employees into a separate building to enhance separation and operation of the division as a separate and independent business unit. These efforts culminated last month with the announcement of SkyTouch Technology division. Since the announcement, we have received strong interest from the industry that has further increased our excitement about the long-term potential for this division. Based on the milestones we achieved related to SkyTouch over the past several months, we are committing the next phase of resources to this initiative, which Dave will cover in more detail. During the second half of 2013, our attention will be focused on building a solid pipeline of hotel chains and the independent hotels converting leads in hand today into sales, contracting revenue-generating customers and implementing installations. We are expecting to have a modest number of revenue-generating customers signed up before the end of the year, which will position SkyTouch to enter next year with strong momentum. Of course, we will keep you apprised of SkyTouch's progress as the year progresses. We are obviously very excited about this new division of Choice. We continue though to be pleased with the direction of our core hotel franchise business and we are excited about the possibilities to create incremental value to our -- for our shareholders through our growth initiatives, including the Bluegreen partnership and SkyTouch Technology. I'm now going to turn the call over to Dave who's going to provide you with more detail about our results and our growth initiatives. Dave? David L. White: Thanks, Steve. As you read in this morning's press release, we reported diluted earnings per share of $0.26 which was in line with our previously published outlook for the quarter. Our franchising revenues increased by 4% to $59.5 million for the quarter, primarily due to a 4% increase in royalties and a 49% increase in initial franchise and relicensing fees. Keep in mind that our revenue growth rate for the quarter was negatively impacted as last year during the same quarter, we recognized above average termination awards revenue. These termination awards are reflected in other income on our consolidated statements of income. Our domestic royalty revenues increased by approximately 5% to $44.3 million due to a combination of increases in RevPAR, our system size and our effective royalty rates. Considering the impact of the extra day from leap year in 2012, our domestic royalty revenues increased by approximately 6%. Domestic RevPAR growth for the quarter was approximately 4.6%, which was generally in line with our guidance of approximately 5%. As a reminder, our RevPAR results for the first quarter reflect our franchisees' gross room revenue performance for the months of December, January and February. Our RevPAR growth was driven by a combination of 100-basis point increase in systemwide occupancy and a 2.3% increase in our average day rates. We are particularly pleased with the RevPAR performance of our Sleep Inn system, which increased 10% over the prior year as more of our system, Sleep Inn system, implements our Designed to Dream program, which has been extremely well received by guests. On the supply front, we were able to grow the number of hotels operating our domestic franchise system by approximately 1.7% over the past 12 months. And finally, our effective domestic royalty rate for the quarter increased 5 basis points from 4.34% for first quarter of 2012 to 4.39% primarily due to the burn-off of some of the steeper royalty rate discounts given in conjunction with our development incentive that was in place during 2010. We are very excited to report that our initial and relicensing fee revenues for the quarter increased by 49% to $3.8 million primarily on account of an increase in the number of new and relicensed franchise agreements executed. During the first quarter of 2013, we executed 83 new domestic franchise sales contracts, which was in line with our expectations and represented a 30% improvement compared to the same period of the prior year. New construction contracts increased by 43% from 7 contracts in the prior year to 10 this year. In addition, we expect actual unit openings from new construction projects to increase 26%, from 27 hotels in 2012 to 34 hotels this year. And while these are small sample sizes, we are encouraged that the new construction environment appears to be improving. After 4 straight years of declines in the number of new construction hotel openings, we believe this also potentially represents an inflection point like the one we saw in the beginning of the last lodging upcycle in 2004. Conversion contracts increased by 28% primarily due to success of the Ascend Hotel Collection brand, including 21 new agreements signed as part of the strategic marketing alliance with Bluegreen Vacations that Steve previously discussed. 19 of these hotels opened in our system in April and we expect the remaining 2 to open later this year. In addition, the number of relicensing and renewal transactions continues to improve, increasing 41% to 69 contracts this quarter. On the cost side of the business, excluding approximately $1 million of compensation expense related to fluctuations in the market value of assets held in the employee retirement plans, our SG&A cost met our expectations. Most of the compensation expense is offset by an increase in the value of the plan assets reflected in investment income. However, SG&A during the 3 months ended March 31, 2013, did increase by $2.6 million or 11% over the prior year. This increase was primarily due to certain onetime costs related to the recent relocation of our corporate headquarters and investments in alternative growth strategies, including our recently announced SkyTouch Technology initiative. In addition, our variable sales compensation increased as a result of our increased Franchise Sales activity. Excluding these items, as well as certain litigation settlement costs in the first quarter of last year, our SG&A increased by approximately 3.5%. Diluted earnings per share was $0.26 for the first quarter of 2013 compared to $0.34 per share in the first quarter of 2012. As a reminder, our first quarter results reflect an increase in borrowing costs resulting from the special cash dividend paid on August 23 of 2012, which was $10.21 per share or approximately $600 million in the aggregate to our shareholders. As a result of the financing transactions entered into at the end of the second quarter and the beginning of the third quarter 2012, our interest expense increased by approximately $7.7 million during the first quarter of 2013. Turning to our outlook for the remainder of 2013, we currently expect second quarter diluted earnings per share to be $0.45 per share and full year 2013 diluted earnings per share to range between $1.87 and $1.91 per share. We expect full year 2013 EBITDA to range between $206 million and $210 million. The figures assume our domestic systemwide RevPAR increase for the second quarter is 4% and ranges between 4.5% and 5.5% for full year 2013. We expect our net domestic unit growth for 2013 to increase by approximately 1.5% and our effective royalty rate to increase by approximately 3 basis points. We also assume an effective tax rate of approximately 30.8% for second quarter and 30.6% for full year 2013. All figures assume the existing share count, which was approximately 58.5 million shares as of the close of business yesterday. Again, as Steve pointed out, I would remind you that other than the incremental investment we are making in the SkyTouch Technology division, our operating assumptions for the core lodging business are unchanged from our prior outlook. However, we have lowered our EBITDA guidance for the core hotel franchising business by $1 million to reflect the increased compensation expense experienced in the first quarter related to the fluctuations in the fair value of assets held in our employee retirement plans. This does not impact diluted EPS as the increased compensation expense is substantially offset by investment gains on those assets. Our current outlook does, however, contemplate additional investments specific to our SkyTouch Technology initiative that were not reflected in our outlook provided in February of this year. As Steve mentioned, since our earnings call in February, we have achieved a number of critical milestones for SkyTouch and we have now committed to moving forward with this exciting new venture. As a result, we expect to incur operating expenses ranging between $6 million and $8 million for investment in this division, including business development, sales and marketing and other costs as well as continued software development expenditures related to the division's technology-related products and services. The software development resources primarily represent efforts to complete the connectivity of our software to non-Choice central reservations and other systems, and the sales and marketing resources will focus on identifying sources and qualifying leads and turning those leads into sales. Substantially, all of the expenditures related to SkyTouch are not capitalized but rather flow through SG&A expense on the income statement. So overall, we continue to execute on our key initiative to grow our core franchising business, and we are excited that our controlled level of investment in SkyTouch can take us to the next level and set the stage for an exciting opportunity for our shareholders in the travel technology space. Now let me turn the call back over to Steve. Stephen P. Joyce: Thanks, Dave. Overall, we are pleased with our results this quarter. While there are some still mixed economic signals, the economy does continue to grow at a moderate pace. In summary, the 2 key points that we believe are most important from this quarter's results are, first, our core hotel franchising business continues to perform on an overall basis in line with our expectations. And second, we are very excited about our investment in SkyTouch Technology and believe that this is a growth opportunity for our shareholders that can add to our already strong franchising business model. We believe the economy will continue to grow at an accelerated pace in the back half of this year, a view shared by many economic experts. And Choice remains well positioned to capitalize on an improving economy in that back half of the year that can establish continued positive momentum to be carried into 2014 and beyond, where we expect to have some very strong years. We appreciate your interest in Choice Hotels. We're excited and optimistic about our continued long-term growth prospects and our ability to continue to drive excellent results for our company and our shareholders. Now I'd like to open up the call to any questions you might have.

[Operator Instructions] Your first question is from the line of Jeff Donnelly from Wells Fargo. Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division: Steve, I'm just curious on the SkyTouch Technology. Who is sort of the ideal target customer for that product? I'm curious, what do they use now and how do you think about the market size for that technology? Stephen P. Joyce: Yes. So we think it's very large because it's a worldwide solution. And there are 2 basic customers that we'll be approaching. One is sort of independent hotels that aren't receiving a property management system required by a brand. And you know the numbers on that, they're very large. And this can scale -- we're not yet ready to put this in convention-sized hotels but it'll scale up to a full service hotel of 300 rooms plus. So that's a very large audience. And then secondly and the interesting thing is, we have had enormous interest from a number of the brand companies. And so we are also in discussions with several brand companies at this point about potentially providing them with a solution. And the reason being a lot of people would say, "Well, why will they buy it from Choice?" One is it's a separate independent division and we're going to keep it that way. But more importantly, we've got sort of the only massively distributed cloud-based property system out there, which means no server, no cabling, no air-conditioning, no technician for the server. PCI compliance is much easier. Credit card security is much better. It's a much lower cost of doing business. It's an easier way to handle your customers and reservations along with revenue management. So it provides the solution that people have been waiting for. And fortunately, we developed it as a proprietary system and we believe it is going to be in strong demand from those consumers, both the independent hotels but also we think we're going to be signing up a number of brands. Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division: And just to be clear. This is like a piece of software that a large brand like an Intercon or a Marriott for example does not presently provide its… Stephen P. Joyce: Yes. They don't -- no one else is using a cloud-based property management system on any sizable scale. And that's our solution and that's what everybody is looking for. Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division: And just one last question on SkyTouch. Is this something that down the road you think you could eventually spin out or is it something you'd like to keep captive to Choice? Stephen P. Joyce: Well, we want the value of it to go to our shareholders. So there are lots of different directions that it could go. Spinout might be one of them. But we're going to get it up and going and then we're going to evaluate what the best way to create value for those shareholders in the long run and we'll evaluate that sometime in the next year, I would assume. Jeffrey J. Donnelly - Wells Fargo Securities, LLC, Research Division: Just one last question on new activity, I guess. It feels like we're seeing more unit growth out there, albeit off a low base in the industry. Do you think we're going to be seeing progressively higher new unit and conversion activity as we roll through the next few quarters? David L. White: I think so. Because we're looking at a number of key indicators. That Realix and licensing number is a big number for us to indicate action in the market. And you know, the way this works is as hotels trade hands, we typically get a shot at branding them. So we think that's going to continue to improve. The new construction numbers are very encouraging, albeit they're still low compared to historic levels. But this is the first time we've really seen this kind of a sharp uptick and we've got -- and when you talk to our franchisees, they're ready to get going. Their lenders are starting to talk about available money from the regional and local bank levels. And so you've got a lot of interest in that. We're having a lot of success with the Cambria discussions and Ascend has just been on fire. I mean we started that out with, I think, 22 hotels, something like that, 3.5 years ago and we are over 100. And it is a perfect solution for all those independent hotels that want all the benefits of being part of a major system but don't want a brand. And so it's just an exciting opportunity. We're looking at some other options about how to grow it even further. But it's just been -- of anything the last 3 or 4 years, that's been one of the brightest spots for us. And so we're encouraged. Our numbers are up. They're holding in terms of they're relatively steady. There is a lot of interest. You can tell in the optimism of the franchisees. The other brand companies are starting to build again in significant numbers. When they do, they'll start taking and pruning their brands as well. That's another source of hotels for us. In addition to our own growth avenues that we think are going to be created by Ascend with Cambria. And then the remake of Sleep and Comfort has been incredibly well received by the franchisees and the consumer. They're willing to pay more for it. So we think the growth trajectory of those brands is going to increase as well long term.

Your next question is from the line of Steven Kent from Goldman Sachs. Steven E. Kent - Goldman Sachs Group Inc., Research Division: Just a couple of questions. First, on the cost of SkyTouch, could you put it in the broader capital allocation strategy, so dividend in Q2. I think you shift the Q1 into Q4 share buyback, financing and guarantees. How do you think about your uses of cash flow over the next 12 to 18 months, especially in relation to SkyTouch? And maybe, I don't know if you've disclosed yet how much money you'll be spending on that. And then finally, I hear what you're saying on new builds and the opportunity there. Could you just discuss, for your franchisees, what percentage is coming from equity for new development versus financing through banks and has that started to decline? Because I know for a while, it was a very high amount for a new build. David L. White: Sure, yes, so let me take that first part. This is David. So our overall capital allocation strategy is really consistent with what we've talked about in the past. And that is basically taking advantage of the fact that we've got an incredibly strong core hotel franchising business that we think we can build off of and monetize some adjacencies and some complementary areas to be additive to that. For example, SkyTouch and the other idea we talked about, which was Bluegreen. So SkyTouch, specifically, just to put that into context from a capital investment perspective, it's really a very controlled level of investment we think. For 2013, the total spend on that initiative will be somewhere between about $12 million and $14 million. So if you put that in the context of what we think the opportunity is and the fact that we think we can get relatively rapid answers in terms of the revenue generation capability of it, we think that's a good bet for our shareholders. So as you mentioned the dividend, we did accelerate our Q1 dividend into last year. Just a reflection of the fact of what was going on in the tax environment. But our dividend policy is unchanged. We just actually announced on Friday the second quarter dividend of $0.185, so an annualized run rate of $0.72 for our dividend policy -- $0.74 for our dividend policy on share repurchases. We do have a remaining authorization of share repurchases of about 1.4 million shares and, as you know, over time, we have been an active share repurchaser and we would expect to continue that over time depending upon market conditions. So overall, SkyTouch fits right into the capital allocation strategy around finding ways to grow value for our shareholders. And is a, we think, a pretty appropriate way to try to monetize the competency which Steve highlighted, which is technology excellence in this hotel and travel space. And I think the other thing that's exciting about it is it could be a starting point that we could potentially attach other technology ideas to. So if we can get the product into the hotel space outside of our system, which Steve pointed out we already have it in 5,000 hotels in our system, then there's potentially ways that we can add features and functionality and bolt on other technology opportunities in that travel space going forward. Stephen P. Joyce: Yes. And then to follow on to that, the one thing that we want to be very clear about is our priorities have not changed at all. Our #1 priority has been, since the inception of this company and will continue to be, return of value to shareholders. The great thing about this company though is good times and bad, it is an incredible cash-generating machine. And so that allows us to do lots of things like that special dividend, like repurchase shares as we see opportunity, like pay a regular dividend and invest in growth businesses. When we paid that special dividend just last August, we said, be very clear, this will keep us from doing nothing is important for us to grow. So we are going to -- we continue to push on lots of different avenues and you'll expect to see that from us. But it's important that we reiterate to all of you that return of value to shareholders is always going to be our first lever. And then on your second question about the new development, those leverage levels are moving back up. A year ago, you were looking at -- in the 50s and you were lucky if it pushed into the low 60s. Now in a lot of cases, we are seeing financing that's pushing more into 70%. So you're seeing 30% equity, 70% deals more frequently. For some of our large franchisees, they're doing even better than that. But I would say a safe bet was to assume that you've got equity coming in, in that 30% to 35% range and the rest of it being covered by financing, which is an improving market for hotels. It is a -- it is not a rapidly improving but it is a continually improving opportunity. Sort of quarter by quarter, we see better and better options for our franchisees. And that's what's causing their enthusiasm and their optimism about certain projects.

Your next question comes from the line of Shaun Kelley from Bank of America. Shaun C. Kelley - BofA Merrill Lynch, Research Division: Just to go back to SkyTouch, really interested and obviously, it's a bit of a kind of a new area for you guys. Can you help us understand, $6 million to $8 million in SG&A investment. When would you expect -- do you think you can kind of break even on that when we think about, I guess the revenue side of that? Would that be possible by 2014 or do you think we would have to look out beyond that to kind of think about the ramp-up of this type of business? Stephen P. Joyce: Let me start and I'll let Dave answer the numbers. The way to think about this is this is not a new business. We've been in this business of a cloud-based property system for several years and we've got already over 4,000 customers. So there's over -- it's in over 5,000 hotels and it's worldwide. So it's not a new business at all. It's exactly what we've been doing. The difference is, is we're going to sell them to a different customer base. So that's why it's such a controlled spend environment because you're talking about a business that's already generating $30 million in revenues with thousands and thousands of customers in all types of hotels. So unlike a start-up that you typically look at, you're looking at a mainline business that we have been operating for -- actually, choiceADVANTAGE was the development that began in the early 2000s. So it is a time-tested multiple, heavy-volume tested system that is proven for years and years in literally thousands and thousands of properties for thousands and thousands of customers. So people are saying -- I don't want to overplay this but it's not the case where we're launching into a new technology business. This is a business we've been running for years. And I'll let David share the numbers. David L. White: Yes, sure. Thanks, Shaun. And just to kind of tee it up in terms of cost investment. Just to be clear, I mean for 2013, the full cost investment in SkyTouch initiative ranges between $12 million and $14 million. So we had already in our original outlook assumed some level of investment when we provided that back in February. And now given some of the milestones we've crossed over the past couple of months, we're actually increasing it to kind of take it into that range of $12 million to $14 million. And as Steve pointed out, we have an internal -- we're already internally -- this is a product that our franchisees buy. It's part of the reservation activities in revenue base to the tune of $30 million a year of revenues. And you think about that in the context of the market, our market share as a hotel company is about 10% in the U.S. So just in the U.S., 10% market share is driving, call it $39, albeit, a captive customer base. But to us, it gets us pretty excited about the potential to have a meaningful revenue story. And kind of in answer your question in terms of the breakeven, I guess, what I would say there is overall, we're expecting this to have a meaningful revenue and revenue growth story for 2014, which will offset a portion of the cost. Sizing in that revenue potential for next year will depend on a lot of factors, including the types of customers we're able to sign on. I mean, and as Steve pointed out, we're targeting multiple types. You've got the individual property owner, independent hotel, the small and medium-sized chains and then the larger industry brand companies. And then the other factor will be pricing, ultimately. But we feel really good given the fact that, as Steve pointed out, we're already generating revenue from this business across 5,000 of our own hotels and it doesn't take a whole lot of imagination to kind of see a reasonably short time frame to when the revenue and the revenue growth story will give us a clear path to breakeven and then, ultimately, profitability and open up our options for monetizing this for our shareholders. Shaun C. Kelley - BofA Merrill Lynch, Research Division: That's actually really helpful color and thanks for clarifying the total for '14. That was my second question. So then as I think about the third, what's the -- what's really the revenue model for this type of product? Is it a kind of a fee -- is it a fee-for-service model or is it a one-time upfront sale with a fee? I assume there's a kind of an ongoing component which is possibly what makes it attractive and complementary to your existing fee business? But can you just walk us through what you're conceptualizing in terms of what -- how you're going to go to market with the product in terms of -- from a sales perspective? Stephen P. Joyce: Yes -- I mean, you characterized it well. There'll be probably some level of upfront fee and then a fee-for-service play. And then the nice thing about this business for us, like our other businesses, because we are established in the business already, we have some initial start-up cost to get it ready for others. We've already covered some of that and we'll be a long way towards that through the end of the year. But it is a business that should be, as we grow it, very profitable for us on the margin. Shaun C. Kelley - BofA Merrill Lynch, Research Division: So even like kind of the marginal return here like -- so the margin potential here is higher than your current business that you guys look at? Would that be a fair -- at least at the gross margin line or is that operating margin? David L. White: Well, I think it's fair to say -- I mean, our gross operating line for the existing business is pretty high so it will be -- it is a very profitable business and it will depend on the pricing of that product that will determine where we get in terms of the profitability margins. But we're obviously expecting it to be a high-margin business. Stephen P. Joyce: Yes. And I think the scale is going to be critical, right? So it's -- you can -- it doesn't have to get to a tremendous scale for it to be a very nice business. But to the extent that we're able and are effective at really, really expanding the scale, then obviously that opens up a lot of possibilities in terms of that margin expansion. As a Software-as-a-Service type of business, you can kind of look at what those models do. And then, I think the other piece would be, if you looked at that as a stepping stone for -- in the travel and lodging technology space, this is kind of an entry point which will also enable us to potentially find other related businesses to kind of or service lines to kind of build out or tackle on and further monetize that customer base. Shaun C. Kelley - BofA Merrill Lynch, Research Division: And just 2 more quick ones, if I can then, just kind of the logical extension. The $12 million to $14 million, virtually none of that is capitalized? That's almost all expensed, is that true? And is there any capital expense or anything you can start to capitalize on the software cost as you get further down that can actually allow this to at least not penalize you so much on the P&L line? David L. White: Yes, so it is essentially all flowing through the P&L, that $12 million to $14 million. And virtually none of this is, under the accounting rules, capitalizable but we certainly think about it as a capital investment. And kind of -- back on an earlier comment, I mean, we really believe that to create value for our shareholders, I mean, finding organic opportunities to invest in that kind of tied to what we're good at is really a very good use of this type of investment. But it does flow through the P&L, almost 100% with minimal opportunities to capitalize, but it's certainly thought about internally as a capital investment. Shaun C. Kelley - BofA Merrill Lynch, Research Division: Helpful. And last one. Obviously, as you start moving into technologies here, there's a lot of probably exciting start-ups that are out there in terms of both technology and in terms of people and talent. Are we going to see Choice looking at and possibly acquiring start-up style businesses as part of that bolt-on or are you guys really thinking only about kind of extensions that you can do from the existing portfolio? I mean, how do you start to draw the line in terms of what you do internally versus what you need to go external to find? Stephen P. Joyce: Well, I think, as Dave mentioned, we do view this as an opportunity to look at other new technologies and test them in their application to the hotel industry, look at them as whether or not they're successful within our own system. But then also clearly, if we believe it's not a proprietary important part of the Choice brand sale, then we can clearly make that available to the SkyTouch customers as well. And we -- that's one of the very attractive natures of sort of this opportunity for us, is we already see lots of those types of opportunities that we've been evaluating over the last couple of years and definitely see additions to the products that we could offer customers through this platform as an organic growing set of options. Shaun C. Kelley - BofA Merrill Lynch, Research Division: Sorry, just to be clear then, would you consider external acquisitions? Is that a key piece here or is it really just focused on the internal component? Stephen P. Joyce: Maybe that wasn't clear enough, yes.

Your next question comes from the line of Felicia Hendrix from Barclays. Felicia R. Hendrix - Barclays Capital, Research Division: I have a bunch of SkyTouch questions but I'm going to ask you some other questions for a minute. Just on your RevPAR, you guys reiterated that for the full year, maybe it's just rounding but you missed a tad in the quarter, you missed your guidance by a tad. Just anything to read into there or is that just rounding? David L. White: Yes. I mean, the first quarter is historically, far and away, the weakest quarter for us. So if you think about the first quarter RevPAR performance and how it flows through the balance -- for the full year, it really has a much less significant impact in the third quarter, in particular, and even the second and the fourth quarters. So I don't want to call it rounding; the number is what it is. But we feel comfortable with the outlook we put out this morning for the 4% from the second quarter and then obviously, that's implying an improvement in the back half of the year, which based upon kind of what we're seeing, what we're hearing from the prognosticators, we feel good about. Felicia R. Hendrix - Barclays Capital, Research Division: Okay, great. Now back onto SkyTouch. First question, Steve, just wanted to talk a little bit about the barriers to entry in this business. Obviously, you guys have a head start. This is a business you've had. You have a huge base just within your own properties that you have, that in yet not obviously the cloud part of it but the just SkyTouch in general. Just wondering, why can't someone else just kind of come in and do this. It doesn't look like there's a huge financial investment involved. Stephen P. Joyce: Well, no. There is a significant financial investment involved that we've made over the years. And the reason that it can't be done -- at some point, someone else will duplicate our technology, no question about it. But right now we're the only game in town that can do this on a massive basis. And so we clearly don't anticipate in our model that there will never be any competitors. But we believe we have a significant headstart which gives us a huge operating advantage. So the barriers to entry start with actually the platform and the technology itself which no one else has done at this level. And then secondly, a customer base, 4,000 to 5,000 individual customers and 5,000 to 6,000 hotels, that is your platform to grow from to spread those fixed cost. And more importantly, to continue to invest in making sure that it's state-of-the-art and meeting the customer needs. One of the great thing about this for our franchisees is when we get that larger base, we'll have that much more -- those, that many more investment dollars to expand the capabilities of the system and our franchisees will benefit from that and they're looking forward to that. So the barriers to entry -- I would not say at all, clearly there's a number of technology companies out there that if they decide this is what they're going to do, I'm sure they can figure it out. I mean, we did. But at the same time, we have a significant, significant investment in the system that someone would have to match. And then the harder thing is going out and convincing the types of volume that we're looking at already, that they should go on that platform. And so we think that's a really good head start for us and it is a significant competitive advantage, which is a barrier, not that those barriers cannot be overcome by other significant efforts, but it'd be a significant effort to catch up to us. Felicia R. Hendrix - Barclays Capital, Research Division: And David, can we just talk a minute about this investment? You had said that the $12 million to $14 million was contemplated and then the number that you discussed today was incremental. But when I look at kind of our SG&A forecast -- is it all running through SG&A, first of all? I don't know where else it would be going. David L. White: Yes. It's all running through the SG&A line. Felicia R. Hendrix - Barclays Capital, Research Division: Okay, so when we look at our SG&A guidance -- I mean, our SG&A forecast, which I'm sure are pretty similar to what other folks have out there, we have roughly a 3-ish percent increase this year. First of all, can you help us -- should we just, the $6 million to $8 million, is that going to be evenly spread between the rest of the quarters of the year? And then just with the other investment contemplated, I mean, you don't really have a huge increase year-over-year in your outlook to begin with in SG&A. So I'm just wondering where you were saving. David L. White: Yes. So in our February outlook, we had contemplated, call it, $6 million of spend on SkyTouch. So already, within our previous outlook, we already had about $6 million of spend contemplated. Last year, we did have some spend on the initiative, call it, half of the $6 million that I talked about in last year's numbers. And then for the back half of this year, we're -- really for the full year, we're now assuming an additional $6 million to $8 million devoted to SkyTouch. I think, the other things you've got to focus on when you look at our SG&A growth rate on a year-over-year basis is that for the first 5 months of the year, our lease would actually get double rent flowing through the P&L because our previous 15-year lease on the old headquarters expires at the end of May so there's about a 5-month period where we've got double rent. And then the other piece was I tried to highlight in the prepared remarks, the fact that we've got -- our deferred compensation plans had a $1 million cost impact from changes in the fair value of the assets which you would factor in for the full year. And then the final thing is Franchise Sales has been stronger than last year and that flows through variable compensation plans in the form of commission. So I think, again those few things, if you were to factor that out, then our SG&A growth rate for kind of the core franchising business would be in that range of growth rates we've talked about in the past, which is in, call it, the low- to mid-single digit growth rate area for a full year basis. Stephen P. Joyce: So, Felicia, but as we talked about earlier, we're obviously following the accounting regs on expensing all of the SkyTouch cost. But clearly, we view those as an investment in a business that's going to yield benefit down the road. So as we think about -- it runs through SG&A, but we clearly view that as a capital allocation and investment in a business that we obviously feel is going to pay dividends for the shareholders. And as it relates to the other SG&A cost, one of the things that I got to give Dave credit for is only David White can deliver a brand new building versus a building that we're in for 42 years at the same general cost that we had in previous years. So once the double rent's cleared up we are basically going to be -- our building -- you're not going to see an increase in SG&A for building cost because we just really got a great deal on a great program.

And your next question comes from the line of Robin Farley from UBS. Robin M. Farley - UBS Investment Bank, Research Division: I have 2 quick things to clarify and then 2 questions. First clarification is just your EBITDA guidance being down more than that SkyTouch $6 million to $8 million incremental investment. Was that just the amounts you mentioned about, I think, it was employee retirement plan? I just want to see if there was anything else in that lower guidance. David L. White: That's the primary thing, that deferred comp plan. Robin M. Farley - UBS Investment Bank, Research Division: And then, the release refers to alternative growth strategies. Is that just SkyTouch or is there anything else that you're putting in that bucket, SkyTouch, or technologies related to SkyTouch? Stephen P. Joyce: Yes. So we would say that it is meant to include specifically SkyTouch and the Bluegreen relationship, which we think is going to be a strong partnership for us that we earn fees from a number of different aspects and also benefit from the alliance with their customer base and ours. But then we also view those as potential other options. We're very interested in the vacation business. That's why -- that's one of the reasons we were so interested in a relationship with Bluegreen. We're looking at other avenues of the vacation business. As we mentioned earlier, we will look at other technology opportunities that potentially could be blended in with the SkyTouch effort. And so as we look at it, not only do we have a very strong growing core business that has a 4- or 5-year very good run in it, we are also embarking on those sort of adjacent businesses that take advantage of things that we already know how to do well and that will add to that growth trajectory for us going forward. So we're very encouraged by not just the launch of these but also what they might lead to down the road. Robin M. Farley - UBS Investment Bank, Research Division: And then the 2 questions that I had. One is just on your guidance for royalty rates being up 3 basis points for the full year, even though it was up 5 basis points in Q1. You mentioned that you're burning off the promotional arrangements that you had back in 2010. So I guess why wouldn't that be at a similar, at least similar to the 5 basis points that we saw in Q1? And then my other question is on SkyTouch as well. Just to clarify. You've mentioned that's being used by 4,000 customers, 5,000 hotels. Are you generating revenue from that today? Just so I understand what the arrangement is today with the 4,000 customers that use it, what revenue is being generated from that today? Stephen P. Joyce: Let me get the last part. So the business today that exists is roughly a $30 million revenue business. It's part of our reservations activities. So those fees flow through the resident marketing system fee line, as do the costs that are directly related to those -- serving those franchises. On the effective royalty rate, obviously, the first quarter, we had a real strong effective royalty growth rate. And that's a function of the burn-off of incentives from back in 2010 that were -- we had a really strong incentive program back in 2010. If you think about why it's kind of, I guess I'd call it normalizing or the pace of growth is moderating, it's really a function of kind of a combination of things. Brand mix as well as additional incentives over the past 2 years and the timing of those that we've been using in our Franchise Sales efforts. I would say overall, 2010 was really kind of the strongest level of incentives that we were doing on the Franchise Sales side of things. And since that time, while we're still doing incentives, I would say that the size of those incentives has moderated some. But you are going to see, in the effective royalty rate, a little bit of volatility until we get past that period and as things continue to improve in the economy, I think you'll start to see that effective royalty rate in our opinion, start to tick back up to kind of more of a normalized growth rate like we saw back in the last upcycle, kind of in that 5- to 7-basis point range over time. Again, depending upon mix. Robin M. Farley - UBS Investment Bank, Research Division: And then just to follow up on the $30 million that you mentioned, can you say kind of what is the pricing arrangement to your hotel customers now that generates that $30 million? In other words, what the pricing arrangement is for a typical customer? David L. White: Yes, it's similar to what Steve talked about. I mean, there's different components to it. So there's installation and training-type fees that depend upon how many properties we implement within the franchise system. And then there's also kind of a recurring revenue stream. But really, I would throw that number out there as more of just a big picture if you think about -- and again, it's a captive customer base because it's not a true third-party sale. But really, just to give you a context of what a typical hotel may be paying for a property management system across a base of 5,000 hotels, $30 million revenue. That fee figure can kind of just give you some context as to what size scale you have to believe you can get to, to get to a kind of a breakeven point in a reasonably short period of time. Robin M. Farley - UBS Investment Bank, Research Division: Can you break out what that was in prior years? In other words, how that $30 million changed in the last 2 to 3 years? David L. White: Yes, in the past, yes, we can -- in the past couple of years, it's been growing generally with the pace of the franchise system. Because, as Steve mentioned, we, choiceADVANTAGE, the initial rollout of choiceADVANTAGE, 8, 9 years ago, we gradually replaced Profit Manager, which was our previous server-based, property-level, property management system. So what you've had is the revenue stream from that Profit Manager branded product kind of gradually going away and choiceADVANTAGE kind of stepping in to fill that void. Overall, choiceADVANTAGE is a lower-cost solution than Profit Manager was for our hotels which is really I think the most important thing. Because if you're out trying to sell us to a third-party hotel, then what they're looking for is figuring out how to reduce their operating cost, which is what choiceADVANTAGE -- we've successfully demonstrated we can do that within our own franchise system. But the overall revenue base, given how the rollout has taken place over the past 7 or 8 years, over the past 2 years has been relatively stable or slightly in line or basically in line with the growth rate from the system size, 1% or 2%. But the idea here is we can find obviously some significant third-party hotels, small chains and potentially some larger chains to really build an exciting business here.

Your next question is from the line of Joshua Attie from Citi. Joshua Attie - Citigroup Inc, Research Division: Of the $12 million to $14 million of costs for this year, how much of that should we expect to recur in 2014? David L. White: Well, I think the way I would answer that question is overall, we'd not expect the amount of the investment next year, the cost investment, to move meaningfully. But what we do expect is to be in a position [Audio Gap] For 2014 with more specifics around how that revenue stream will play out and offset a portion of this cost. But we're not expecting the -- I wouldn't say we would expect a meaningful increase in the expenditure next year. If things go the way we hope they go, then if we got a larger company implementation, then there would probably be some implementation costs we would have to factor into that. But that would be a good problem to have. Stephen P. Joyce: Part of the reason we can't give you a better guidance on this at this point is if you land a large customer, large brand company with several brands and multiple sets of properties, there will be an investment to adapt the system to match up with their system. So you'll be building a lot of bridges to their other operating systems. That cost -- there'll be a formula for sharing it between the 2 and that will impact the fees that we get and everything else. So when we tell you what kind of customers we've got, the monies that we have today will cover us through a lot of independent hotels and some smaller chains. If we landed a large one, which would be a great opportunity for us, then that would have an investment. But we'll be able to talk to you about it and we can also talk to you about what does that mean for the revenue side of the business going forward. Joshua Attie - Citigroup Inc, Research Division: So then these seem like they're recurring operating costs that are going to continue to run through the business that are necessary to support the addition of new hotels. They're not -- it's not the cost of developing the technology that... David L. White: No. This is -- a lot of these costs are costs involved in getting our Technology business ready for other properties that aren't on our systems. So there are changes that need to be made. We've updated the look and feel of the product. We are making it -- building bridges to a lot of popular other systems and then some of the money's being spent on sales and marketing. So as we look at it, the overall investment in the technology itself is the bulk of those dollars. And that is not a onetime expense because over time, it may come down some but then you're going to be investing in upgrades to the system and ongoing costs. And so part of that will be determined by how many customers we have and how much scale we've got. The nice thing is though once you grow that scale, your dollars become very efficient because as you make those investments, they cover lots and lots of properties. And so the way you ought to think about it is the bulk of those dollars we've got in are around preparing that product for sale. Those are relatively one-time investments but then that will be replaced with ongoing maintenance and other costs of the business. But we go back to, "We like this business a lot because of the scale and long-term revenue growth opportunities." We think it's going to be an attractive margin business as well. Joshua Attie - Citigroup Inc, Research Division: Can you tell us how much money has been invested to date to develop the technology? David L. White: Over time? It's in the $50 million-plus category. Joshua Attie - Citigroup Inc, Research Division: And I guess why can't some of these development costs, if they're really onetime in nature, why can't they be capitalized? David L. White: Well, just under the accounting rules for this type of software, you're just not permitted to put it on your balance sheet. Joshua Attie - Citigroup Inc, Research Division: I guess, when you think about growing the business, you're a franchisor and you have your own brands. How do you manage the conflicts or how do you convince third parties that you're going to be able to effectively manage the conflicts of being in the hotel franchise business and that somehow the system is not going to have a preference for your own hotels? Stephen P. Joyce: Yes. So first, let's be clear. What we sell to our brands is very different because that's revenue generation. Right? So we are selling our distribution, we're selling our customer base, we're selling Choice Privileges, we're generating close to 40% of their revenues and their hotels. This system simply allows people to check people in, check people out, take reservations and manage the revenue that you have. We don't generate any revenue for them. So there's a clear difference there. But obviously, one of the sensitivities in the industry is well, wait a minute, if Choice has somehow provided my technology platform, how do I make sure that they don't get my information, and that there's not some advantage being created for Choice by doing that? That's specifically why we have created as a separate division, moved them to a separate building and long-term, we haven't made any decisions but clearly, this is going to be an independent technology company, independent of Choice, in a nature that makes sense for the way to take advantage of the value of it for our shareholders. And as we talk to the customers, we are already in several locations, I have to make sure that they feel comfortable that their data and their information is secure and can't be seen by anyone else including Choice. Joshua Attie - Citigroup Inc, Research Division: Okay. And just lastly, I just want to make sure we have an understanding of how this is going to run through the financials. We should basically expect $12 million to $14 million of costs to be running through the P&L in 2014 and 2015, and the offset to that will be if you get incremental revenue. But this is kind of a permanent increase to the cost structure of the company? David L. White: So I would say for 2013, the cost expectation is between $12 million and $14 million for this year. By the end of this year we expect to have, as Steve mentioned, the product will be ready for our third-party customers. They're essentially ready at this point for third-party customers. So we'll be able to talk about a meaningful revenue and revenue growth story later this year. And as that plays out, and we get more visibility into the ultimate revenue potential, that will influence what happens on the cost side. For 2014, I mean obviously, from the time we started this initiative, call it, 6 months ago until the end of 2014 is a 2.5-year period. So to the extent that the revenue story is less favorable than we expect, or more favorable than we expect, then that will have an impact on how we manage the cost structure beyond that. Stephen P. Joyce: Yes, because let's be clear, they're not fixed costs. These are investments either in upgrading the product for sale to third parties or it's investment in sales and marketing capabilities for this organization. So if we didn't get the customers, we wouldn't have the cost. And so that's why we view this as a very manageable business for us because the cost of the basic system are already being covered in the revenues that we get from our franchisees. The cost of new customers will have to build interfaces for maybe cost going forward but they will come with offsetting revenues which is why one of the important points is we fully expect next year that the revenues will offset some portion, hopefully a lot, of the costs that we've got for spending to get new customers. Joshua Attie - Citigroup Inc, Research Division: I think you might have mentioned this earlier but do you think you could potentially break even on the incremental investment next year? David L. White: We're trying not to give that kind of expectation but the way you should think about it is if we landed a couple of big customers, anything's possible. Joshua Attie - Citigroup Inc, Research Division: Okay, but these incremental costs, it sounds like, are really related to growing the third party business. David L. White: Oh, yes. Absolutely, yes. So to the extent that these costs went away would not impact at all our core hotel franchising product in this area. Joshua Attie - Citigroup Inc, Research Division: And have you signed any significant third parties to date? Stephen P. Joyce: We've gotten a good feedback. We've gotten quite a few leads across all the different customer segments we've talked about which would be kind of the individual owner-operator, independent property, the midsized chains and the larger chains. So we've got a lot of very promising leads. We'll be at HITEC in June, which is basically a big deal for this type of product. So we're pretty positive about the opportunity and we'll kind of keep you posted on the revenue side over the next couple of quarters. David L. White: And remember, we literally have been selling this product publicly for about a month. So we're very happy about where we are.

Your next question will come from the line of Joe Greff from JPMorgan. Joseph Greff - JP Morgan Chase & Co, Research Division: Most of my questions on SkyTouch was asked and answered. The question I have for you is on this alliance with Bluegreen. Can you talk about how the economics of that work and how much contribution that's adding to 2013, if any? David L. White: Yes. So the economics are a little bit complicated. But basically the idea is that they have 21 resorts which will become part of the Ascend Collection and we will earn a fee for reservations that are delivered to them. In addition, we will earn fees based upon their conversion of guests into potential timeshare customers. For 2013, just to put it in the big picture context, revenue assumption in 2013 would be somewhere around $2 million, which is broken down between, I'll call it, $600,000 or so of royalty revenue and $1 million of initial fees. The balance would be tied up in the revenue streams related to kind of call transfer and commissions on timeshares sold through the call transfers and guest stays.

Your next question will come from the line of Thomas Allen from Morgan Stanley. Thomas Allen - Morgan Stanley, Research Division: In the long run, could SkyTouch lead to any headwinds related to your unit growth for your core Choice business? I mean, I think, clearly most owners and operators partner with you for your brands and your reservation systems but kind of given a 1% to 2% unit growth, kind of annual unit growth, any level of attrition or any level of headwind could be meaningful. I mean, have you surveyed your existing customers and do any really primarily value kind of your SkyTouch Technology now? David L. White: Yes. So we've obviously had lots of questions and discussions with the franchisees. We don't believe that this will impact our development at all. And the reason being is that the reason that people buy Choice, while they like the property management system and view it as a cost advantage for them for doing business, it's not a buy decision criteria. It's more about the 40% of the customers that we drive into their hotels. And so we actually think this may be much more positive because we'll be able to have more dialogs with lots of different customers and then potentially, for those that it might make sense for, the initial use of SkyTouch may lead to an interesting choice of hotels and the revenue generation. We're not building anything into the numbers for that. We think the product and the company by itself will be successful just based on the business it's in but we view this net-net as probably a positive view for development versus a negative. Thomas Allen - Morgan Stanley, Research Division: And then just on your existing business or your reported business. Historically, your initial franchise and relicensing fees have been the lowest in 1Q and then kind of have ramped through the year. Why is that? And then in 1Q '13 those fees were up 50%. Anything kind of different this year that would suggest you wouldn't see a similar ramp as you've seen in prior years? David L. White: Yes. Traditionally, the first quarter and this goes back quite a long time, has just normally been a soft quarter from a Franchise Sales perspective. And I think that just has to do more with just the general level of activity in the industry -- I mean, in the segments where we're primarily selling are just generally softer in the first quarter. When you look at our initial franchise and relicensing fees revenue for the first quarter of this year, as you pointed out, it's up close to 50%. A decent portion of that is actually being driven by relicensings revenue, which tends to fluctuate more with transaction, meaning hotels changing ownership, changing hands as opposed to a new franchise sale. And then the other piece that's become a little -- made it a little harder to kind of predict our initial franchise fees has been the timing of revenue recognition. It has become, over the past 5 or 6 years, less tied to actually executing the franchise contract and more tied to when the hotel actually opens into our system. So you get some volatility in that revenue line that's being driven by the timing of when the hotels open because if we have an incentive in place, we're not allowed in many circumstances, to recognize that revenue until the hotel opens and we actually pay out that incentive. So we don't give specific initial franchise and relicensing fee revenue guidance. But generally speaking, I guess what I would say is we have gotten off to a great start on franchise sales and we feel really good about how our brands are continuing to land with developers, for the reasons Steve talked about in terms of just an incredibly strong res contribution business for those hotels. So we expect '13 to be a very good year from a franchise sales perspective and without getting specific on percentages and growth rates and whatnot, we're expecting a very positive revenue line from the initial franchise and relicensing fee area this year.

At this time, there are no other questions in the queue. I would like to turn the call back over to Mr. Steve Joyce for your closing remarks. Stephen P. Joyce: So thank you for attending the call. We're very excited about the opportunities we've discussed here today. We see a rapidly improving hotel economic market in general and we see, based on the fundamentals of supply and demand, a pretty strong run for several years to come. And we'll be excited to report the progress we make going forward in our next call. Have a great day.

Ladies and gentlemen, this concludes your presentation. You may now disconnect and have a good day.