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subsidiaries and in the overall management of the Hyatt
International group. Significantly, to the extent that services
were charged, they were at cost. Under that combination of
circumstances these financial trends appear to be incongruent.
Confronted with that information and data gathered from other
hotel chains, respondent’s employees' evaluations and,
ultimately, respondent’s determinations were based on reasonable
assumptions and fell within reasonable limits. After trial, we
were able to discern nuances and differences in petitioners'
operations that caused us not to sustain fully respondent's
notice or trial positions; however, we generally did not accept
petitioners' reporting or trial positions either.
Accordingly, we do not find respondent’s determination with
respect to these allocations to be arbitrary, capricious, or
unreasonable.
Having decided that some of respondent’s determinations were
arbitrary and capricious, petitioners are left with the burden of
showing that the amounts in question were for an arm’s-length
consideration. If petitioners fail to show that their
transactions met the arm’s-length standard, then we must decide
the appropriate consideration; i.e., an arm’s-length rate between
unrelated parties. Concerning the remainder of respondent's
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