ROCKVILLE, Md., Feb. 18, 2014 /PRNewswire/ -- Choice Hotels International, Inc., (NYSE:CHH) today reported the following highlights for the fourth quarter and full-year 2013:
Fourth Quarter Highlights
-- Diluted earnings per share ("EPS") for the three months ended December
31, 2013 totaled $0.46, an increase of 10% from the same period of 2012.
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") from franchising activities for the three months ended
December 31, 2013 totaled $52.2 million, an increase of 8% from the same
period of 2012.
-- Franchising revenues for the three months ended December 31, 2013
totaled $78.8 million, an increase of 2% from the same period of 2012.
-- Domestic system-wide revenue per available room ("RevPAR") increased
1.3% for the three months ended December 31, 2013 from the same period
of 2012 as hotel operations in the Northeast and Mid-Atlantic regions as
well as hotels near national parks were impacted by the government
shutdown. Domestic RevPAR results reflect occupancy and average daily
rates increases of 50 basis points and 0.4%, respectively.
-- Initial franchise and relicensing fees for the three months ended
December 31, 2013 totaled $5.8 million, an increase of 11% from the same
period of 2012.
-- The company executed 215 new domestic hotel franchise contracts for the
three months ended December 31, 2013 compared to 214 new domestic hotel
franchise contracts for the same period of 2012. Domestic hotel
contracts executed during the three months ended December 31, 2012
included an agreement with affiliates of Colony Capital, a private
international investment firm, and hospitality management company
Aimbridge Hospitality, to convert 46 properties, formerly operated as
Jameson Inns, to the company's Quality Inn, Comfort Inn and Econo Lodge
brands. Excluding this transaction, domestic franchise agreements
executed during the fourth quarter of 2013 increased 28% from the same
period of 2012.
-- Domestic relicensing and contract renewal transactions for the three
months ended December 31, 2013 totaled 85 contracts, an increase of 8%
from the same period of 2012.
-- Franchising selling, general and administrative expenses ("SG&A") for
the three months ended December 31, 2013 totaled $26.6 million, a 7%
decline from the same period of 2012. Excluding a loss on settlement of
the company's pension plan during the fourth quarter of 2012 totaling
$1.8 million, franchising SG&A declined by approximately $0.1 million.
"We are pleased with our fourth quarter operating results which reflect a continued improvement in the domestic franchise development environment," said Stephen P. Joyce, president and chief executive officer of Choice Hotels International. "Our development results reflect a 14% increase in our conversion franchise agreements over the prior year and we expect that the conversion franchise sales environment will continue to improve. In addition, we are optimistic that the new construction environment for our brand segments will gradually improve in 2014 and beyond."
Full-Year Highlights
-- EBITDA from franchising activities in 2013 totaled $214.3 million, an
increase of $10.7 million or 5% from 2012.
-- Franchising revenues in 2013 totaled $316.4 million, an increase of
$14.2 million or 5% from 2012.
-- Domestic royalty fees in 2013 totaled $242.5 million, an increase of 3%
from 2012.
-- Domestic system-wide RevPAR increased 3.0% in 2013 as occupancy and
average daily rates increased 80 basis points and 1.6%, respectively.
-- Domestic unit and room growth increased 1.9% and 1.1% from December 31,
2012, respectively.
-- Initial franchise and relicensing fees in 2013 totaled $18.7 million, an
increase of $4.5 million or 32% from 2012.
-- The company executed 530 new domestic hotel franchise contracts in 2013,
an increase of 57 contracts or 12% from 2012.
-- Domestic relicensing and contract renewal transactions in 2013 totaled
289 contracts, an increase of 52 contracts or 22% from 2012.
-- Procurement services revenues in 2013 totaled $20.7 million, an increase
of $2.7 million or 15% from 2012.
-- Franchising SG&A expenses in 2013 totaled $102.1 million, a 3.6%
increase from 2012.
-- Franchising margins for 2013 were 65.0%, an increase of 10 basis points
from 2012.
-- Publicly launched and executed initial third-party customer contracts
for the SkyTouch Technology division of the company ("SkyTouch"), a
division that develops and markets cloud based technology products,
including inventory management, pricing and connectivity to third party
channels, to hoteliers not under franchise agreements with the company.
"Our investment in additional growth opportunities that are complementary to our core hotel franchising business model has resulted in our strategic alliance with Bluegreen Vacations as well as the launch of our SkyTouch division. We are pleased with the progress we have achieved in both of these initiatives. Our alliance with Bluegreen Vacations has resulted in more than 20 new Ascend Hotel Collection hotels and has generated approximately $3.5 million of total revenues in 2013."
"In addition, we have executed several customer contracts for the SkyTouch division. These new customers join more than 5,500 of our current franchisees who already use our cloud-based technology systems. Together, our new and existing users generate more than $30 million of corporate and marketing and reservation system revenues for the company," said Joyce.
Use of Free Cash Flow
The company has historically used its free cash flow (cash flow from operations less cash flow from investing activities) to return value to shareholders, primarily through share repurchases and dividends.
Dividends
The company's current quarterly dividend rate per common share is $0.185, subject to declaration by our board of directors. During 2013 and 2012, the company paid $32.8 million and $654.1 million in cash dividends to shareholders, respectively. The cash dividends paid during 2013 reflect the company's decision to pay the first quarter of 2013 quarterly cash dividend in December 2012. In addition, cash dividends paid during 2012 include a special cash dividend in the amount of $10.41 per share or approximately $600.7 million paid on August 23, 2012.
As a result of the debt financing transactions entered into in the second and third quarters of 2012 to fund the payment of a special cash dividend, earnings per share in 2013 were impacted by $15.3 million of additional interest expense compared to the prior year.
Share Repurchases
The company did not repurchase any shares of common stock under its share repurchase program during 2013. However, the company currently has authorization to purchase up to 1.4 million shares under this program. We may make repurchases from time to time under our share repurchase program in the open market and through privately negotiated transactions, subject to market and other conditions. There is no time limit on this authorization and no minimum number of share repurchases has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 45.3 million shares of its common stock for a total cost of $1.1 billion through December 31, 2013. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 78.3 million shares through December 31, 2013 under the share repurchase program at an average price of $13.89 per share.
Other
Our board of directors previously authorized a program which permits us to offer financing, investment and guaranty support to qualified franchisees as well as allows us to acquire and resell real estate to incent franchise development primarily for the Cambria brand in strategic markets. Over the next several years, we expect to continue to deploy capital opportunistically pursuant to this program to promote growth of our brands. Our current expectation is that our annual investment in this program will range between $20 million and $40 million per year and we generally expect to recycle these investments over a 5 year period. However, the amount and timing of the investment in this program will be dependent on market and other conditions. Notwithstanding this program, the company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to board declaration, market and other conditions.
Balance Sheet
As of December 31, 2013, the company had total debt (long-term plus current portion) of $794 million and cash and cash equivalents totaling $168 million resulting in net debt of $626 million. As of December 31, 2012, the company had total debt of $855 million and cash equivalents totaling $134 million resulting in net debt of $721 million.
As of December 31, 2013 and 2012, the company had outstanding mezzanine financing, real estate investments and sliver equity investments totaling $64 million and $68 million, respectively, pursuant to its program to offer financing and investment support to incent franchise development for the Cambria brand in strategic markets. These investments are reported in other current assets and other assets on the company's consolidated balance sheet.
Outlook
The company's consolidated 2014 outlook reflects continued growth of the company's core franchising business, continued investment in and expanded revenue contribution from the SkyTouch division and the sale of the three company-owned Mainstay hotels described below and the following assumptions:
-- All figures assume no repurchases of common stock under the company's
share repurchase program; and
-- The effective tax rate is expected to be 30.5% for the first quarter and
full-year 2014.
Franchising
-- EBITDA from franchising activities for full-year 2014 are expected to
range between $227 million and $232 million, an increase from 2013 of
approximately 6% to 8%;
-- Net domestic unit growth is expected to increase by approximately 2% in
2014;
-- RevPAR is expected to increase approximately 4% for the first quarter
and 3.5% to 4.5% for full-year 2014; and
-- The effective royalty rate is expected to decline 3 basis points for
full-year 2014.
SkyTouch
-- Reductions in EBITDA from our investment in the SkyTouch division for
full-year 2014 are expected to be approximately $21.5 million;
-- Execution of third-party contracts with annualized revenue expected to
range between $4 million and $6 million resulting in realized revenues
for the year ended December 31, 2014 totaling approximately $2.0
million; and
-- SG&A expenses are forecasted to be approximately $23.5 million related
to investment in business development, sales and marketing and continued
software development expenditures related to the division's cloud-based
hotel operating system technology related products and services.
Hotel Operations
-- The company has entered into purchase and sale agreements for its three
company-owned MainStay properties. These transactions are expected to
close during the first quarter of 2014 and to generate net pre-tax
proceeds of approximately $12 million;
-- The new owners of the hotels will execute new franchise agreements and
remain in the franchise system;
-- Company EBITDA projections exclude the three company-owned Mainstay
properties which generated EBITDA of approximately $1.1 million in 2013;
and
-- Diluted EPS for the first quarter and full-year 2014 includes a gain on
sale of the three company-owned Mainstay properties totaling $0.03.
Consolidated Outlook
The company's first quarter 2014 diluted EPS is expected to be $0.29. The company expects full-year 2014 diluted EPS to range between $1.84 and $1.92. EBITDA for full-year 2014 are expected to range between $205 million and $211 million.
Conference Call
Choice will conduct a conference call on Tuesday, February 18, 2014 at 10:00 a.m. EST to discuss the company's fourth quarter and full-year 2013 results. The dial-in number to listen to the call is 1-877-474-9503, and the access code is 65920914. International callers should dial 1-857-244-7556 and enter the access code 65920914. The conference call also will be Webcast simultaneously via the company's Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call via the Webcast should go to the Web site and click on the Investor Info link. The Investor page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 2:00 p.m. EST on Tuesday, February 18, 2014 through Tuesday, February 25, 2014 by calling 1-888-286-8010 and entering access code 80136392. The international dial-in number for the replay is 1-617-801-6888, access code 80136392. In addition, the call will be archived for approximately one-year and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. franchises more than 6,300 hotels, representing more than 500,000 rooms, in the United States and more than 35 other countries and territories. As of December 31, 2013, 422 hotels, representing more than 31,000 rooms, were under construction, awaiting conversion or approved for development in the United States. Additionally, 81 hotels, representing approximately 7,200 rooms, were under construction, awaiting conversion or approved for development in more than 15 other countries and territories. The company's Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway Inn brands, as well as its Ascend Hotel Collection membership program, serve guests worldwide.
SkyTouch Technology is a division of Choice Hotels International, Inc. that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Additional corporate information can be found on the Choice Hotels International, Inc. web site, which may be accessed at www.choicehotels.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan," "project," "assume" or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, ability to repay outstanding indebtedness, payment of dividends, and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission including our annual reports on Form 10-K and our quarterly reports filed on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Concerning Non-GAAP Financial Measurements Presented in this Press Release
EBITDA, franchising revenues, franchising SG&A, franchising EBITDA, franchising margins and net debt are non-GAAP financial measurements. These measures should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by generally accepted accounting principles in the United States ("GAAP"), such as operating income, total revenues, operating margins and long-term debt. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles EBITDA, franchising revenues, franchising SG&A and franchising margins to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects earnings excluding the impact of interest expense, loss on extinguishment of debt, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Franchising Revenues, Operating Income, EBITDA, SG&A and Margins: The company reports franchising revenues, operating income, EBITDA, SG&A and margins which exclude marketing and reservation revenues, SkyTouch Technology and hotel operations. Marketing and reservation activities are excluded since the company is required by its franchise agreements to use the fees collected for marketing and reservation activities; as such, no income or loss to the company is generated. Cumulative marketing and reservation system fees not expended are recorded as a liability in the company's financial statements and are carried over to the next year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are deferred and recorded as an asset in the company's financial statements and recovered in future periods. Hotel operations reflect the company's ownership of three MainStay Suites hotels. SkyTouch Technology is a division of the company that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company. Hotel and SkyTouch Technology operations are excluded since they do not reflect the company's core franchising business but are adjacent, complimentary lines of business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
Net Debt: Net debt is long-term debt plus the current portion of long-term debt (i.e., long-term debt due within one year) less cash and cash equivalents. The company believes that net debt is an important measurement as many investors use net debt in making investment decisions, as it gives them an idea of a company's financial health and its level of leverage compared to liquid assets. Some industries may have more net debt than others; therefore, investors often compare a company's net debt to others in the same business.
Choice Hotels, Choice Hotels International, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn, Ascend Hotel Collection and SkyTouch Technology are proprietary trademarks and service marks of Choice Hotels International.
© 2014 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc.
Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended December
31, For the Year Ended December 31,
---------------------------- -------------------------------
Variance Variance
2013 2012 $ % 2013 2012 $ %
---- ---- --- --- ---- ---- --- ---
(In thousands, except per share
amounts)
REVENUES:
Royalty fees $66,007 $66,020 $(13) (0%) $267,229 $260,782 $6,447 2%
Initial
franchise and
relicensing
fees 5,843 5,250 593 11% 18,686 14,203 4,483 32%
Procurement
services 4,464 3,972 492 12% 20,668 17,962 2,706 15%
Marketing and
reservation 100,718 100,160 558 1% 403,099 384,784 18,315 5%
Hotel
operations 1,174 1,133 41 4% 4,774 4,573 201 4%
Other 2,489 1,771 718 41% 9,851 9,205 646 7%
----- ----- --- --- ----- ----- --- ---
Total revenues 180,695 178,306 2,389 1% 724,307 691,509 32,798 5%
OPERATING EXPENSES:
Selling,
general and
administrative 29,489 29,779 (290) (1%) 113,567 101,852 11,715 12%
Depreciation
and
amortization 2,395 2,237 158 7% 9,469 8,226 1,243 15%
Marketing and
reservation 100,718 100,160 558 1% 403,099 384,784 18,315 5%
Hotel
operations 936 896 40 4% 3,678 3,505 173 5%
--- --- --- --- ----- ----- --- ---
Total operating
expenses 133,538 133,072 466 0% 529,813 498,367 31,446 6%
Operating
income 47,157 45,234 1,923 4% 194,494 193,142 1,352 1%
OTHER INCOME AND EXPENSES, NET:
Interest
expense 10,203 10,366 (163) (2%) 42,537 27,189 15,348 56%
Interest income (568) (384) (184) 48% (2,547) (1,540) (1,007) 65%
Loss on
extinguishment
of debt - - - NM - 526 (526) (100%)
Other (gains)
and losses (514) 148 (662) (447%) (1,780) (1,989) 209 (11%)
Equity in net
income of
affiliates (294) (224) (70) 31% (634) (212) (422) 199%
Total other
income and
expenses, net 8,827 9,906 (1,079) (11%) 37,576 23,974 13,602 57%
----- ----- ------ ---- ------ ------ ------ ---
Income before
income taxes 38,330 35,328 3,002 8% 156,918 169,168 (12,250) (7%)
Income taxes 10,998 10,877 121 1% 44,317 48,481 (4,164) (9%)
------ ------ --- --- ------ ------ ------
Net income $27,332 $24,451 $2,881 12% $112,601 $120,687 $(8,086) (7%)
======= ======= ====== === ======== ======== ======= ===
Basic earnings
per share $0.47 $0.42 $0.05 12% $1.92 $2.08 $(0.16) (8%)
===== ===== ===== === ===== ===== ====== ===
Diluted
earnings per
share $0.46 $0.42 $0.04 10% $1.91 $2.07 $(0.16) (8%)
===== ===== ===== === ===== ===== ====== ===
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts) December 31, December 31,
2013 2012
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $167,795 $134,177
Accounts receivable, net 53,521 52,270
Investments, employee benefit plans, at fair value 400 3,486
Other current assets 36,930 43,537
------ ------
Total current
assets 258,646 233,470
Fixed assets and intangibles, net 141,858 130,937
Advances, marketing and reservation activities 19,127 42,179
Investments, employee benefit plans, at fair value 15,950 12,755
Other assets 104,318 91,431
------- ------
Total assets $539,899 $510,772
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $98,288 $94,266
Deferred revenue 61,188 71,154
Deferred compensation & retirement plan
obligations 2,492 2,522
Current portion of long-term debt 10,088 8,195
Other current liabilities 2,282 -
----- ---
Total current
liabilities 174,338 176,137
Long-term debt 783,471 847,150
Deferred compensation & retirement plan
obligations 22,527 20,399
Other liabilities 23,808 15,990
------ ------
Total
liabilities 1,004,144 1,059,676
Common stock, $0.01 par value 586 582
Additional paid-in-capital 117,768 110,246
Accumulated other comprehensive loss (6,217) (4,216)
Treasury stock, at cost (918,031) (927,776)
Retained earnings 341,649 272,260
------- -------
Total
shareholders'
deficit (464,245) (548,904)
Total
liabilities
and
shareholders'
deficit $539,899 $510,772
-------- --------
Choice Hotels International, Inc. Exhibit 3
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) Year Ended December 31,
-----------------------
Revised (1)
2013 2012
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $112,601 $120,687
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 9,469 8,226
Provision for bad debts, net 2,724 2,896
Non-cash stock compensation and other charges 11,271 12,375
Non-cash interest and other loss 1,545 292
Loss on extinguishment of debt - 526
Deferred income taxes (8,024) (540)
Dividends received from equity method investments 1,445 1,310
Equity in net income of affiliates (634) (212)
Changes in assets and liabilities:
Receivables (6,730) (5,239)
Advances to/from marketing and reservation activities, net 42,405 30,313
Forgivable notes receivable, net (8,347) (10,898)
Accounts payable 2,304 11
Accrued expenses (9,595) 12,376
Income taxes payable/receivable 4,807 (3,193)
Deferred revenue (9,861) 2,188
Other assets (3,197) (3,476)
Other liabilities 9,857 (17,520)
----- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 152,040 150,122
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (31,524) (15,443)
Equity method investments (5,685) (20,285)
Purchases of investments, employee benefit plans (2,676) (1,697)
Proceeds from sales of investments, employee benefit plans 4,168 11,223
Issuance of mezzanine and other notes receivable (1,095) (23,736)
Collections of mezannine and other notes receivable 9,748 3,270
Proceeds from sale of assets 243 -
Other items, net (728) (433)
---- ----
NET CASH USED IN INVESTING ACTIVITIES (27,549) (47,101)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) pursuant to revolving credit facilities (57,000) 57,000
Principal payments on long-term debt (8,204) (4,422)
Proceeds from the issuance of long-term debt 3,360 543,500
Purchase of treasury stock (3,965) (22,586)
Dividends paid (32,799) (654,092)
Excess tax benefits from stock-based compensation 1,460 1,559
Debt issuance costs - (4,759)
Proceeds from exercise of stock options 8,864 7,090
----- -----
NET CASH USED IN FINANCING ACTIVITIES (88,284) (76,710)
------- -------
Net change in cash and cash equivalents 36,207 26,311
Effect of foreign exchange rate changes on cash and cash equivalents (2,589) 809
Cash and cash equivalents at beginning of period 134,177 107,057
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $167,795 $134,177
======== ========
(1) The presentation of the Company's forgivable notes receivable for the year ended December 31, 2012 has been revised from
prior year disclosures. See Note 1 to the Company's Form 10-Q filed with the SEC on November 12, 2013 for additional information.
Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Year Ended For the Year Ended Change
December 31, 2013* December 31, 2012*
----------------- -----------------
Average Average Average
Daily Daily Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- -------- ------
Comfort
Inn $83.21 59.9% $49.87 $81.55 59.4% $48.42 2.0% 50 bps 3.0%
Comfort
Suites 86.89 62.8% 54.53 85.47 61.7% 52.74 1.7% 110 bps 3.4%
Sleep 74.35 58.5% 43.46 72.40 56.3% 40.77 2.7% 220 bps 6.6%
Quality 70.19 53.0% 37.17 69.46 51.6% 35.85 1.1% 140 bps 3.7%
Clarion 75.20 50.9% 38.30 74.94 49.4% 37.03 0.3% 150 bps 3.4%
Econo
Lodge 56.56 48.7% 27.52 55.78 48.5% 27.05 1.4% 20 bps 1.7%
Rodeway 54.25 51.6% 27.96 53.36 50.8% 27.13 1.7% 80 bps 3.1%
MainStay 72.46 68.0% 49.27 69.34 70.4% 48.81 4.5% (240) bps 0.9%
Suburban 42.67 70.1% 29.91 41.61 69.7% 29.01 2.5% 40 bps 3.1%
Ascend
Hotel
Collection 120.97 64.3% 77.82 113.33 64.4% 72.94 6.7% (10) bps 6.7%
------ ---- ----- ------ ---- ----- --- --- --- ---
Total $74.76 56.3% $42.08 $73.60 55.5% $40.84 1.6% 80 bps 3.0%
====== ==== ====== ====== ==== ====== === === === ===
* Operating statistics represent hotel operations from December through November
For the Three Months Ended For the Three Months Ended Change
December 31, 2013* December 31, 2012*
----------------- -----------------
Average Average Average
Daily Daily Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- -------- ------
Comfort
Inn $82.52 60.3% $49.71 $81.67 60.0% $48.98 1.0% 30 bps 1.5%
Comfort
Suites 85.31 62.1% 52.96 85.01 61.4% 52.21 0.4% 70 bps 1.4%
Sleep 73.87 57.9% 42.74 72.70 56.5% 41.05 1.6% 140 bps 4.1%
Quality 68.93 52.3% 36.06 68.34 51.2% 35.02 0.9% 110 bps 3.0%
Clarion 73.80 50.5% 37.28 74.81 49.6% 37.12 (1.4%) 90 bps 0.4%
Econo
Lodge 55.43 47.9% 26.54 55.84 48.0% 26.80 (0.7%) (10) bps (1.0%)
Rodeway 53.09 50.9% 26.99 52.64 49.5% 26.07 0.9% 140 bps 3.5%
MainStay 71.28 69.0% 49.21 69.54 70.3% 48.85 2.5% (130) bps 0.7%
Suburban 42.53 69.6% 29.59 42.78 69.2% 29.61 (0.6%) 40 bps (0.1%)
Ascend
Hotel
Collection 117.15 63.8% 74.79 116.26 67.0% 77.86 0.8% (320) bps (3.9%)
------ ---- ----- ------ ---- ----- --- ---- --- ------
Total $73.73 55.9% $41.21 $73.44 55.4% $40.68 0.4% 50 bps 1.3%
====== ==== ====== ====== ==== ====== === === === ===
* Operating statistics represent hotel operations from September through November
For the Quarter Ended For the Twelve Months Ended
--------------------- ---------------------------
12/31/2013 12/31/2012 12/31/2013 12/31/2012
System-
wide
effective
royalty
rate 4.31% 4.36% 4.33% 4.33%
Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
December 31, December
2013 31, 2012 Variance
------------- --------- --------
Hotels Rooms Hotels Rooms Hotels Rooms % %
------ ----- ------ ----- ------ ----- --- ---
Comfort Inn 1,302 101,673 1,349 105,471 (47) (3,798) (3.5%) (3.6%)
Comfort Suites 589 45,451 597 46,045 (8) (594) (1.3%) (1.3%)
Sleep 382 27,623 387 28,087 (5) (464) (1.3%) (1.7%)
Quality 1,223 101,143 1,152 98,078 71 3,065 6.2% 3.1%
Clarion 190 27,501 191 27,441 (1) 60 (0.5%) 0.2%
Econo Lodge 830 50,694 817 49,951 13 743 1.6% 1.5%
Rodeway 438 24,677 410 23,370 28 1,307 6.8% 5.6%
MainStay 43 3,331 41 3,165 2 166 4.9% 5.2%
Suburban 63 7,167 63 7,291 - (124) 0.0% (1.7%)
Ascend Hotel
Collection 102 9,206 57 4,982 45 4,224 78.9% 84.8%
Cambria Suites 18 2,119 19 2,221 (1) (102) (5.3%) (4.6%)
--- ----- --- ----- --- ---- ----- -----
Domestic
Franchises 5,180 400,585 5,083 396,102 97 4,483 1.9% 1.1%
International
Franchises 1,160 105,473 1,160 103,151 - 2,322 0.0% 2.3%
----- ------- ----- ------- --- ----- --- ---
Total Franchises 6,340 506,058 6,243 499,253 97 6,805 1.6% 1.4%
===== ======= ===== ======= === ===== === ===
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Year Ended For the Year Ended % Change
December 31, 2013 December 31, 2012
----------------- -----------------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort
Inn 18 54 72 23 36 59 (22%) 50% 22%
Comfort
Suites 16 9 25 12 5 17 33% 80% 47%
Sleep 20 5 25 25 2 27 (20%) 150% (7%)
Quality 1 137 138 - 170 170 NM (19%) (19%)
Clarion 1 21 22 - 22 22 NM (5%) 0%
Econo
Lodge 2 87 89 - 59 59 NM 47% 51%
Rodeway 1 70 71 - 71 71 NM (1%) 0%
MainStay 11 2 13 12 1 13 (8%) 100% 0%
Suburban 9 5 14 3 4 7 200% 25% 100%
Ascend
Hotel
Collection 5 51 56 4 17 21 25% 200% 167%
Cambria
Suites 5 - 5 7 - 7 (29%) NM (29%)
--- --- --- --- --- --- ---- --- -----
Total
Domestic
System 89 441 530 86 387 473 3% 14% 12%
=== === === === === === === === ===
For the Three Months Ended For the Three Months
Ended % Change
December 31, 2013 December 31, 2012
----------------- -----------------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort
Inn 6 19 25 13 19 32 (54%) 0% (22%)
Comfort
Suites 9 3 12 1 1 2 800% 200% 500%
Sleep 11 4 15 8 1 9 38% 300% 67%
Quality - 61 61 - 82 82 NM (26%) (26%)
Clarion - 9 9 - 8 8 NM 13% 13%
Econo
Lodge 2 26 28 - 26 26 NM 0% 8%
Rodeway - 31 31 - 25 25 NM 24% 24%
MainStay 6 2 8 10 - 10 (40%) NM (20%)
Suburban 8 4 12 2 3 5 300% 33% 140%
Ascend
Hotel
Collection - 11 11 3 9 12 (100%) 22% (8%)
Cambria
Suites 3 - 3 3 - 3 0% NM 0%
--- --- --- --- --- --- --- --- ---
Total
Domestic
System 45 170 215 40 174 214 13% (2%) 0%
=== === === === === === === === ===
Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
DOMESTIC HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT
(UNAUDITED)
A hotel in the domestic pipeline does not always result in an open and operating hotel due to various factors.
Variance
--------
December 31, 2013 December 31, 2012 New
Units Units Conversion Construction Total
----- ----- --------- ---------- -----
Conversion New Total Conversion New Total Units % Units % Units %
Construction Construction
---
Comfort
Inn 44 53 97 33 49 82 11 33% 4 8% 15 18%
Comfort
Suites 4 47 51 1 72 73 3 300% (25) (35%) (22) (30%)
Sleep
Inn 1 49 50 1 43 44 - 0% 6 14% 6 14%
Quality 48 3 51 36 3 39 12 33% - 0% 12 31%
Clarion 8 2 10 12 1 13 (4) (33%) 1 100% (3) (23%)
Econo
Lodge 26 2 28 24 - 24 2 8% 2 NM 4 17%
Rodeway 38 1 39 35 - 35 3 9% 1 NM 4 11%
MainStay 2 31 33 - 25 25 2 NM 6 24% 8 32%
Suburban 6 16 22 1 15 16 5 500% 1 7% 6 38%
Ascend
Hotel
Collection 10 10 20 11 7 18 (1) (9%) 3 43% 2 11%
Cambria
Suites - 21 21 - 25 25 - NM (4) (16%) (4) (16%)
--- --- --- --- --- --- --- --- --- ---- --- -----
187 235 422 154 240 394 33 21% (5) (2%) 28 7%
=== === === === === === === === === === === ===
Exhibit 8
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS
(dollar amounts in thousands) Three Months Ended
December 31, Year Ended December 31,
------------------- -----------------------
2013 2012 2013 2012
---- ---- ---- ----
Franchising Revenues:
Total Revenues $180,695 $178,306 $724,307 $691,509
Adjustments:
Marketing
and
reservation
revenues (100,718) (100,160) (403,099) (384,784)
SkyTouch Division (21) - (33) -
Hotel operations (1,174) (1,133) (4,774) (4,573)
Franchising Revenues $78,782 $77,013 $316,401 $302,152
------- ------- -------- --------
Franchising Margins:
Operating Margin:
Total Revenues $180,695 $178,306 $724,307 $691,509
Operating Income $47,157 $45,234 $194,494 $193,142
Operating Margin 26.1% 25.4% 26.9% 27.9%
---- ---- ---- ----
Franchising Margin:
Franchising Revenues $78,782 $77,013 $316,401 $302,152
Operating Income $47,157 $45,234 $194,494 $193,142
SkyTouch
Division
operating
loss 2,986 1,296 11,754 3,370
Hotel
operations
operating
income (105) (102) (570) (533)
Operating Income - Franchising $50,038 $46,428 $205,678 $195,979
------- ------- -------- --------
Franchising Margins 63.5% 60.3% 65.0% 64.9%
---- ---- ---- ----
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES
(dollar amounts in thousands) Three Months Ended
December 31, Year Ended December 31,
------------------- -----------------------
2013 2012 2013 2012
---- ---- ---- ----
Total
Selling,
General and
Administrative
Expenses $29,489 $29,779 $113,567 $101,852
SkyTouch Division (2,912) (1,287) (11,502) (3,360)
Franchising
Selling,
General and
Administration
Expenses $26,577 $28,492 $102,065 $98,492
======= ======= ======== =======
CALCULATION OF EBITDA
(dollar amounts in thousands)
Q4 2013 Q4 2012 Year Ended December Year Ended December
Actuals Actuals 31, 2013 Actuals 31, 2012 Actuals
------- ------- ---------------- ----------------
Net income $27,332 $24,451 $112,601 $120,687
Income taxes 10,998 10,877 44,317 48,481
Interest expense 10,203 10,366 42,537 27,189
Interest income (568) (384) (2,547) (1,540)
Other (gains) and losses (514) 148 (1,780) (1,989)
Loss on the
extinguishment
of debt - - - 526
Equity in net income of
affiliates (294) (224) (634) (212)
Depreciation and amortization 2,395 2,237 9,469 8,226
EBITDA $49,552 $47,471 $203,963 $201,368
======= ======= ======== ========
Franchising $52,205 $48,521 $214,336 $203,660
Hotel operations 238 237 1,096 1,068
SkyTouch (2,891) (1,287) (11,469) (3,360)
$49,552 $47,471 $203,963 $201,368
======= ======= ======== ========
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
ROCKVILLE, Md., Feb. 18, 2014
ROCKVILLE, Md., Feb. 18, 2014 /PRNewswire/ -- Choice Hotels International, Inc., (NYSE:CHH) today reported the following highlights for the fourth quarter and full-year 2013:
Fourth Quarter Highlights
"We are pleased with our fourth quarter operating results which reflect a continued improvement in the domestic franchise development environment," said Stephen P. Joyce, president and chief executive officer of Choice Hotels International. "Our development results reflect a 14% increase in our conversion franchise agreements over the prior year and we expect that the conversion franchise sales environment will continue to improve. In addition, we are optimistic that the new construction environment for our brand segments will gradually improve in 2014 and beyond."
Full-Year Highlights
"Our investment in additional growth opportunities that are complementary to our core hotel franchising business model has resulted in our strategic alliance with Bluegreen Vacations as well as the launch of our SkyTouch division. We are pleased with the progress we have achieved in both of these initiatives. Our alliance with Bluegreen Vacations has resulted in more than 20 new Ascend Hotel Collection hotels and has generated approximately $3.5 million of total revenues in 2013."
"In addition, we have executed several customer contracts for the SkyTouch division. These new customers join more than 5,500 of our current franchisees who already use our cloud-based technology systems. Together, our new and existing users generate more than $30 million of corporate and marketing and reservation system revenues for the company," said Joyce.
Use of Free Cash Flow
The company has historically used its free cash flow (cash flow from operations less cash flow from investing activities) to return value to shareholders, primarily through share repurchases and dividends.
Dividends
The company's current quarterly dividend rate per common share is $0.185, subject to declaration by our board of directors. During 2013 and 2012, the company paid $32.8 million and $654.1 million in cash dividends to shareholders, respectively. The cash dividends paid during 2013 reflect the company's decision to pay the first quarter of 2013 quarterly cash dividend in December 2012. In addition, cash dividends paid during 2012 include a special cash dividend in the amount of $10.41 per share or approximately $600.7 million paid on August 23, 2012.
As a result of the debt financing transactions entered into in the second and third quarters of 2012 to fund the payment of a special cash dividend, earnings per share in 2013 were impacted by $15.3 million of additional interest expense compared to the prior year.
Share Repurchases
The company did not repurchase any shares of common stock under its share repurchase program during 2013. However, the company currently has authorization to purchase up to 1.4 million shares under this program. We may make repurchases from time to time under our share repurchase program in the open market and through privately negotiated transactions, subject to market and other conditions. There is no time limit on this authorization and no minimum number of share repurchases has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 45.3 million shares of its common stock for a total cost of $1.1 billion through December 31, 2013. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 78.3 million shares through December 31, 2013 under the share repurchase program at an average price of $13.89 per share.
Other
Our board of directors previously authorized a program which permits us to offer financing, investment and guaranty support to qualified franchisees as well as allows us to acquire and resell real estate to incent franchise development primarily for the Cambria brand in strategic markets. Over the next several years, we expect to continue to deploy capital opportunistically pursuant to this program to promote growth of our brands. Our current expectation is that our annual investment in this program will range between $20 million and $40 million per year and we generally expect to recycle these investments over a 5 year period. However, the amount and timing of the investment in this program will be dependent on market and other conditions. Notwithstanding this program, the company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to board declaration, market and other conditions.
Balance Sheet
As of December 31, 2013, the company had total debt (long-term plus current portion) of $794 million and cash and cash equivalents totaling $168 million resulting in net debt of $626 million. As of December 31, 2012, the company had total debt of $855 million and cash equivalents totaling $134 million resulting in net debt of $721 million.
As of December 31, 2013 and 2012, the company had outstanding mezzanine financing, real estate investments and sliver equity investments totaling $64 million and $68 million, respectively, pursuant to its program to offer financing and investment support to incent franchise development for the Cambria brand in strategic markets. These investments are reported in other current assets and other assets on the company's consolidated balance sheet.
Outlook
The company's consolidated 2014 outlook reflects continued growth of the company's core franchising business, continued investment in and expanded revenue contribution from the SkyTouch division and the sale of the three company-owned Mainstay hotels described below and the following assumptions:
Franchising
SkyTouch
Hotel Operations
Consolidated Outlook
The company's first quarter 2014 diluted EPS is expected to be $0.29. The company expects full-year 2014 diluted EPS to range between $1.84 and $1.92. EBITDA for full-year 2014 are expected to range between $205 million and $211 million.
Conference Call
Choice will conduct a conference call on Tuesday, February 18, 2014 at 10:00 a.m. EST to discuss the company's fourth quarter and full-year 2013 results. The dial-in number to listen to the call is 1-877-474-9503, and the access code is 65920914. International callers should dial 1-857-244-7556 and enter the access code 65920914. The conference call also will be Webcast simultaneously via the company's Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call via the Webcast should go to the Web site and click on the Investor Info link. The Investor page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 2:00 p.m. EST on Tuesday, February 18, 2014 through Tuesday, February 25, 2014 by calling 1-888-286-8010 and entering access code 80136392. The international dial-in number for the replay is 1-617-801-6888, access code 80136392. In addition, the call will be archived for approximately one-year and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. franchises more than 6,300 hotels, representing more than 500,000 rooms, in the United States and more than 35 other countries and territories. As of December 31, 2013, 422 hotels, representing more than 31,000 rooms, were under construction, awaiting conversion or approved for development in the United States. Additionally, 81 hotels, representing approximately 7,200 rooms, were under construction, awaiting conversion or approved for development in more than 15 other countries and territories. The company's Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway Inn brands, as well as its Ascend Hotel Collection membership program, serve guests worldwide.
SkyTouch Technology is a division of Choice Hotels International, Inc. that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Additional corporate information can be found on the Choice Hotels International, Inc. web site, which may be accessed at www.choicehotels.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan," "project," "assume" or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, ability to repay outstanding indebtedness, payment of dividends, and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission including our annual reports on Form 10-K and our quarterly reports filed on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Concerning Non-GAAP Financial Measurements Presented in this Press Release
EBITDA, franchising revenues, franchising SG&A, franchising EBITDA, franchising margins and net debt are non-GAAP financial measurements. These measures should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by generally accepted accounting principles in the United States ("GAAP"), such as operating income, total revenues, operating margins and long-term debt. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles EBITDA, franchising revenues, franchising SG&A and franchising margins to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects earnings excluding the impact of interest expense, loss on extinguishment of debt, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Franchising Revenues, Operating Income, EBITDA, SG&A and Margins: The company reports franchising revenues, operating income, EBITDA, SG&A and margins which exclude marketing and reservation revenues, SkyTouch Technology and hotel operations. Marketing and reservation activities are excluded since the company is required by its franchise agreements to use the fees collected for marketing and reservation activities; as such, no income or loss to the company is generated. Cumulative marketing and reservation system fees not expended are recorded as a liability in the company's financial statements and are carried over to the next year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are deferred and recorded as an asset in the company's financial statements and recovered in future periods. Hotel operations reflect the company's ownership of three MainStay Suites hotels. SkyTouch Technology is a division of the company that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company. Hotel and SkyTouch Technology operations are excluded since they do not reflect the company's core franchising business but are adjacent, complimentary lines of business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
Net Debt: Net debt is long-term debt plus the current portion of long-term debt (i.e., long-term debt due within one year) less cash and cash equivalents. The company believes that net debt is an important measurement as many investors use net debt in making investment decisions, as it gives them an idea of a company's financial health and its level of leverage compared to liquid assets. Some industries may have more net debt than others; therefore, investors often compare a company's net debt to others in the same business.
Choice Hotels, Choice Hotels International, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn, Ascend Hotel Collection and SkyTouch Technology are proprietary trademarks and service marks of Choice Hotels International.
© 2014 Choice Hotels International, Inc. All rights reserved.
|
Choice Hotels International, Inc. |
Exhibit 1 |
||||||||||||||||||
|
Consolidated Statements of Income |
|||||||||||||||||||
|
(Unaudited) |
|||||||||||||||||||
|
Three Months Ended December 31, |
For the Year Ended December 31, |
||||||||||||||||||
|
Variance |
Variance |
||||||||||||||||||
|
2013 |
2012 |
$ |
% |
2013 |
2012 |
$ |
% |
||||||||||||
|
(In thousands, except per share amounts) |
|||||||||||||||||||
|
REVENUES: |
|||||||||||||||||||
|
Royalty fees |
$ 66,007 |
$ 66,020 |
$ (13) |
(0%) |
$ 267,229 |
$ 260,782 |
$ 6,447 |
2% |
|||||||||||
|
Initial franchise and relicensing fees |
5,843 |
5,250 |
593 |
11% |
18,686 |
14,203 |
4,483 |
32% |
|||||||||||
|
Procurement services |
4,464 |
3,972 |
492 |
12% |
20,668 |
17,962 |
2,706 |
15% |
|||||||||||
|
Marketing and reservation |
100,718 |
100,160 |
558 |
1% |
403,099 |
384,784 |
18,315 |
5% |
|||||||||||
|
Hotel operations |
1,174 |
1,133 |
41 |
4% |
4,774 |
4,573 |
201 |
4% |
|||||||||||
|
Other |
2,489 |
1,771 |
718 |
41% |
9,851 |
9,205 |
646 |
7% |
|||||||||||
|
Total revenues |
180,695 |
178,306 |
2,389 |
1% |
724,307 |
691,509 |
32,798 |
5% |
|||||||||||
|
OPERATING EXPENSES: |
|||||||||||||||||||
|
Selling, general and administrative |
29,489 |
29,779 |
(290) |
(1%) |
113,567 |
101,852 |
11,715 |
12% |
|||||||||||
|
Depreciation and amortization |
2,395 |
2,237 |
158 |
7% |
9,469 |
8,226 |
1,243 |
15% |
|||||||||||
|
Marketing and reservation |
100,718 |
100,160 |
558 |
1% |
403,099 |
384,784 |
18,315 |
5% |
|||||||||||
|
Hotel operations |
936 |
896 |
40 |
4% |
3,678 |
3,505 |
173 |
5% |
|||||||||||
|
Total operating expenses |
133,538 |
133,072 |
466 |
0% |
529,813 |
498,367 |
31,446 |
6% |
|||||||||||
|
Operating income |
47,157 |
45,234 |
1,923 |
4% |
194,494 |
193,142 |
1,352 |
1% |
|||||||||||
|
OTHER INCOME AND EXPENSES, NET: |
|||||||||||||||||||
|
Interest expense |
10,203 |
10,366 |
(163) |
(2%) |
42,537 |
27,189 |
15,348 |
56% |
|||||||||||
|
Interest income |
(568) |
(384) |
(184) |
48% |
(2,547) |
(1,540) |
(1,007) |
65% |
|||||||||||
|
Loss on extinguishment of debt |
- |
- |
- |
NM |
- |
526 |
(526) |
(100%) |
|||||||||||
|
Other (gains) and losses |
(514) |
148 |
(662) |
(447%) |
(1,780) |
(1,989) |
209 |
(11%) |
|||||||||||
|
Equity in net income of affiliates |
(294) |
(224) |
(70) |
31% |
(634) |
(212) |
(422) |
199% |
|||||||||||
|
Total other income and expenses, net |
8,827 |
9,906 |
(1,079) |
(11%) |
37,576 |
23,974 |
13,602 |
57% |
|||||||||||
|
Income before income taxes |
38,330 |
35,328 |
3,002 |
8% |
156,918 |
169,168 |
(12,250) |
(7%) |
|||||||||||
|
Income taxes |
10,998 |
10,877 |
121 |
1% |
44,317 |
48,481 |
(4,164) |
(9%) |
|||||||||||
|
Net income |
$ 27,332 |
$ 24,451 |
$ 2,881 |
12% |
$ 112,601 |
$ 120,687 |
$ (8,086) |
(7%) |
|||||||||||
|
Basic earnings per share |
$ 0.47 |
$ 0.42 |
$ 0.05 |
12% |
$ 1.92 |
$ 2.08 |
$ (0.16) |
(8%) |
|||||||||||
|
Diluted earnings per share |
$ 0.46 |
$ 0.42 |
$ 0.04 |
10% |
$ 1.91 |
$ 2.07 |
$ (0.16) |
(8%) |
|||||||||||
|
Choice Hotels International, Inc. |
Exhibit 2 |
||||||
|
Consolidated Balance Sheets |
|||||||
|
(In thousands, except per share amounts) |
December 31, |
December 31, |
|||||
|
2013 |
2012 |
||||||
|
(Unaudited) |
|||||||
|
ASSETS |
|||||||
|
Cash and cash equivalents |
$ 167,795 |
$ 134,177 |
|||||
|
Accounts receivable, net |
53,521 |
52,270 |
|||||
|
Investments, employee benefit plans, at fair value |
400 |
3,486 |
|||||
|
Other current assets |
36,930 |
43,537 |
|||||
|
Total current assets |
258,646 |
233,470 |
|||||
|
Fixed assets and intangibles, net |
141,858 |
130,937 |
|||||
|
Advances, marketing and reservation activities |
19,127 |
42,179 |
|||||
|
Investments, employee benefit plans, at fair value |
15,950 |
12,755 |
|||||
|
Other assets |
104,318 |
91,431 |
|||||
|
Total assets |
$ 539,899 |
$ 510,772 |
|||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
|
Accounts payable and accrued expenses |
$ 98,288 |
$ 94,266 |
|||||
|
Deferred revenue |
61,188 |
71,154 |
|||||
|
Deferred compensation & retirement plan obligations |
2,492 |
2,522 |
|||||
|
Current portion of long-term debt |
10,088 |
8,195 |
|||||
|
Other current liabilities |
2,282 |
- |
|||||
|
Total current liabilities |
174,338 |
176,137 |
|||||
|
Long-term debt |
783,471 |
847,150 |
|||||
|
Deferred compensation & retirement plan obligations |
22,527 |
20,399 |
|||||
|
Other liabilities |
23,808 |
15,990 |
|||||
|
Total liabilities |
1,004,144 |
1,059,676 |
|||||
|
Common stock, $0.01 par value |
586 |
582 |
|||||
|
Additional paid-in-capital |
117,768 |
110,246 |
|||||
|
Accumulated other comprehensive loss |
(6,217) |
(4,216) |
|||||
|
Treasury stock, at cost |
(918,031) |
(927,776) |
|||||
|
Retained earnings |
341,649 |
272,260 |
|||||
|
Total shareholders' deficit |
(464,245) |
(548,904) |
|||||
|
Total liabilities and shareholders' deficit |
$ 539,899 |
$ 510,772 |
|||||
|
Choice Hotels International, Inc. |
Exhibit 3 |
||
|
Consolidated Statements of Cash Flows |
|||
|
(Unaudited) |
|||
|
(In thousands) |
Year Ended December 31, |
||
|
Revised (1) |
|||
|
2013 |
2012 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
|
Net income |
$ 112,601 |
$ 120,687 |
|
|
Adjustments to reconcile net income to net cash provided |
|||
|
by operating activities: |
|||
|
Depreciation and amortization |
9,469 |
8,226 |
|
|
Provision for bad debts, net |
2,724 |
2,896 |
|
|
Non-cash stock compensation and other charges |
11,271 |
12,375 |
|
|
Non-cash interest and other loss |
1,545 |
292 |
|
|
Loss on extinguishment of debt |
- |
526 |
|
|
Deferred income taxes |
(8,024) |
(540) |
|
|
Dividends received from equity method investments |
1,445 |
1,310 |
|
|
Equity in net income of affiliates |
(634) |
(212) |
|
|
Changes in assets and liabilities: |
|||
|
Receivables |
(6,730) |
(5,239) |
|
|
Advances to/from marketing and reservation activities, net |
42,405 |
30,313 |
|
|
Forgivable notes receivable, net |
(8,347) |
(10,898) |
|
|
Accounts payable |
2,304 |
11 |
|
|
Accrued expenses |
(9,595) |
12,376 |
|
|
Income taxes payable/receivable |
4,807 |
(3,193) |
|
|
Deferred revenue |
(9,861) |
2,188 |
|
|
Other assets |
(3,197) |
(3,476) |
|
|
Other liabilities |
9,857 |
(17,520) |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
152,040 |
150,122 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
|
Investment in property and equipment |
(31,524) |
(15,443) |
|
|
Equity method investments |
(5,685) |
(20,285) |
|
|
Purchases of investments, employee benefit plans |
(2,676) |
(1,697) |
|
|
Proceeds from sales of investments, employee benefit plans |
4,168 |
11,223 |
|
|
Issuance of mezzanine and other notes receivable |
(1,095) |
(23,736) |
|
|
Collections of mezannine and other notes receivable |
9,748 |
3,270 |
|
|
Proceeds from sale of assets |
243 |
- |
|
|
Other items, net |
(728) |
(433) |
|
|
NET CASH USED IN INVESTING ACTIVITIES |
(27,549) |
(47,101) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
|
Net borrowings (repayments) pursuant to revolving credit facilities |
(57,000) |
57,000 |
|
|
Principal payments on long-term debt |
(8,204) |
(4,422) |
|
|
Proceeds from the issuance of long-term debt |
3,360 |
543,500 |
|
|
Purchase of treasury stock |
(3,965) |
(22,586) |
|
|
Dividends paid |
(32,799) |
(654,092) |
|
|
Excess tax benefits from stock-based compensation |
1,460 |
1,559 |
|
|
Debt issuance costs |
- |
(4,759) |
|
|
Proceeds from exercise of stock options |
8,864 |
7,090 |
|
|
NET CASH USED IN FINANCING ACTIVITIES |
(88,284) |
(76,710) |
|
|
Net change in cash and cash equivalents |
36,207 |
26,311 |
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
(2,589) |
809 |
|
|
Cash and cash equivalents at beginning of period |
134,177 |
107,057 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 167,795 |
$ 134,177 |
|
|
(1) The presentation of the Company's forgivable notes receivable for the year ended December 31, 2012 has been revised from |
|||
|
prior year disclosures. See Note 1 to the Company's Form 10-Q filed with the SEC on November 12, 2013 for additional information. |
|||
|
Exhibit 4 |
|||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
For the Year Ended |
For the Year Ended |
Change |
|||||||||||||||||
|
Average |
Average |
Average |
|||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||
|
Comfort Inn |
$ 83.21 |
59.9% |
$ 49.87 |
$ 81.55 |
59.4% |
$ 48.42 |
2.0% |
50 |
bps |
3.0% |
|||||||||
|
Comfort Suites |
86.89 |
62.8% |
54.53 |
85.47 |
61.7% |
52.74 |
1.7% |
110 |
bps |
3.4% |
|||||||||
|
Sleep |
74.35 |
58.5% |
43.46 |
72.40 |
56.3% |
40.77 |
2.7% |
220 |
bps |
6.6% |
|||||||||
|
Quality |
70.19 |
53.0% |
37.17 |
69.46 |
51.6% |
35.85 |
1.1% |
140 |
bps |
3.7% |
|||||||||
|
Clarion |
75.20 |
50.9% |
38.30 |
74.94 |
49.4% |
37.03 |
0.3% |
150 |
bps |
3.4% |
|||||||||
|
Econo Lodge |
56.56 |
48.7% |
27.52 |
55.78 |
48.5% |
27.05 |
1.4% |
20 |
bps |
1.7% |
|||||||||
|
Rodeway |
54.25 |
51.6% |
27.96 |
53.36 |
50.8% |
27.13 |
1.7% |
80 |
bps |
3.1% |
|||||||||
|
MainStay |
72.46 |
68.0% |
49.27 |
69.34 |
70.4% |
48.81 |
4.5% |
(240) |
bps |
0.9% |
|||||||||
|
Suburban |
42.67 |
70.1% |
29.91 |
41.61 |
69.7% |
29.01 |
2.5% |
40 |
bps |
3.1% |
|||||||||
|
Ascend Hotel Collection |
120.97 |
64.3% |
77.82 |
113.33 |
64.4% |
72.94 |
6.7% |
(10) |
bps |
6.7% |
|||||||||
|
Total |
$ 74.76 |
56.3% |
$ 42.08 |
$ 73.60 |
55.5% |
$ 40.84 |
1.6% |
80 |
bps |
3.0% |
|||||||||
|
* Operating statistics represent hotel operations from December through November |
|||||||||||||||||||
|
For the Three Months Ended |
For the Three Months Ended |
Change |
|||||||||||||||||
|
Average |
Average |
Average |
|||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||
|
Comfort Inn |
$ 82.52 |
60.3% |
$ 49.71 |
$ 81.67 |
60.0% |
$ 48.98 |
1.0% |
30 |
bps |
1.5% |
|||||||||
|
Comfort Suites |
85.31 |
62.1% |
52.96 |
85.01 |
61.4% |
52.21 |
0.4% |
70 |
bps |
1.4% |
|||||||||
|
Sleep |
73.87 |
57.9% |
42.74 |
72.70 |
56.5% |
41.05 |
1.6% |
140 |
bps |
4.1% |
|||||||||
|
Quality |
68.93 |
52.3% |
36.06 |
68.34 |
51.2% |
35.02 |
0.9% |
110 |
bps |
3.0% |
|||||||||
|
Clarion |
73.80 |
50.5% |
37.28 |
74.81 |
49.6% |
37.12 |
(1.4%) |
90 |
bps |
0.4% |
|||||||||
|
Econo Lodge |
55.43 |
47.9% |
26.54 |
55.84 |
48.0% |
26.80 |
(0.7%) |
(10) |
bps |
(1.0%) |
|||||||||
|
Rodeway |
53.09 |
50.9% |
26.99 |
52.64 |
49.5% |
26.07 |
0.9% |
140 |
bps |
3.5% |
|||||||||
|
MainStay |
71.28 |
69.0% |
49.21 |
69.54 |
70.3% |
48.85 |
2.5% |
(130) |
bps |
0.7% |
|||||||||
|
Suburban |
42.53 |
69.6% |
29.59 |
42.78 |
69.2% |
29.61 |
(0.6%) |
40 |
bps |
(0.1%) |
|||||||||
|
Ascend Hotel Collection |
117.15 |
63.8% |
74.79 |
116.26 |
67.0% |
77.86 |
0.8% |
(320) |
bps |
(3.9%) |
|||||||||
|
Total |
$ 73.73 |
55.9% |
$ 41.21 |
$ 73.44 |
55.4% |
$ 40.68 |
0.4% |
50 |
bps |
1.3% |
|||||||||
|
* Operating statistics represent hotel operations from September through November |
|||||||||||||||||||
|
For the Quarter Ended |
For the Twelve Months Ended |
||||||||||||||||||
|
12/31/2013 |
12/31/2012 |
12/31/2013 |
12/31/2012 |
||||||||||||||||
|
System-wide effective royalty rate |
4.31% |
4.36% |
4.33% |
4.33% |
|||||||||||||||
|
Exhibit 5 |
||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
|
December 31, 2013 |
December 31, 2012 |
Variance |
||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
|||||||||
|
Comfort Inn |
1,302 |
101,673 |
1,349 |
105,471 |
(47) |
(3,798) |
(3.5%) |
(3.6%) |
||||||||
|
Comfort Suites |
589 |
45,451 |
597 |
46,045 |
(8) |
(594) |
(1.3%) |
(1.3%) |
||||||||
|
Sleep |
382 |
27,623 |
387 |
28,087 |
(5) |
(464) |
(1.3%) |
(1.7%) |
||||||||
|
Quality |
1,223 |
101,143 |
1,152 |
98,078 |
71 |
3,065 |
6.2% |
3.1% |
||||||||
|
Clarion |
190 |
27,501 |
191 |
27,441 |
(1) |
60 |
(0.5%) |
0.2% |
||||||||
|
Econo Lodge |
830 |
50,694 |
817 |
49,951 |
13 |
743 |
1.6% |
1.5% |
||||||||
|
Rodeway |
438 |
24,677 |
410 |
23,370 |
28 |
1,307 |
6.8% |
5.6% |
||||||||
|
MainStay |
43 |
3,331 |
41 |
3,165 |
2 |
166 |
4.9% |
5.2% |
||||||||
|
Suburban |
63 |
7,167 |
63 |
7,291 |
- |
(124) |
0.0% |
(1.7%) |
||||||||
|
Ascend Hotel Collection |
102 |
9,206 |
57 |
4,982 |
45 |
4,224 |
78.9% |
84.8% |
||||||||
|
Cambria Suites |
18 |
2,119 |
19 |
2,221 |
(1) |
(102) |
(5.3%) |
(4.6%) |
||||||||
|
Domestic Franchises |
5,180 |
400,585 |
5,083 |
396,102 |
97 |
4,483 |
1.9% |
1.1% |
||||||||
|
International Franchises |
1,160 |
105,473 |
1,160 |
103,151 |
- |
2,322 |
0.0% |
2.3% |
||||||||
|
Total Franchises |
6,340 |
506,058 |
6,243 |
499,253 |
97 |
6,805 |
1.6% |
1.4% |
||||||||
|
Exhibit 6 |
||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||
|
For the Year Ended |
For the Year Ended |
% Change |
||||||||||||||||
|
New |
New |
New |
||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
||||||||||
|
Comfort Inn |
18 |
54 |
72 |
23 |
36 |
59 |
(22%) |
50% |
22% |
|||||||||
|
Comfort Suites |
16 |
9 |
25 |
12 |
5 |
17 |
33% |
80% |
47% |
|||||||||
|
Sleep |
20 |
5 |
25 |
25 |
2 |
27 |
(20%) |
150% |
(7%) |
|||||||||
|
Quality |
1 |
137 |
138 |
- |
170 |
170 |
NM |
(19%) |
(19%) |
|||||||||
|
Clarion |
1 |
21 |
22 |
- |
22 |
22 |
NM |
(5%) |
0% |
|||||||||
|
Econo Lodge |
2 |
87 |
89 |
- |
59 |
59 |
NM |
47% |
51% |
|||||||||
|
Rodeway |
1 |
70 |
71 |
- |
71 |
71 |
NM |
(1%) |
0% |
|||||||||
|
MainStay |
11 |
2 |
13 |
12 |
1 |
13 |
(8%) |
100% |
0% |
|||||||||
|
Suburban |
9 |
5 |
14 |
3 |
4 |
7 |
200% |
25% |
100% |
|||||||||
|
Ascend Hotel Collection |
5 |
51 |
56 |
4 |
17 |
21 |
25% |
200% |
167% |
|||||||||
|
Cambria Suites |
5 |
- |
5 |
7 |
- |
7 |
(29%) |
NM |
(29%) |
|||||||||
|
Total Domestic System |
89 |
441 |
530 |
86 |
387 |
473 |
3% |
14% |
12% |
|||||||||
|
For the Three Months Ended |
For the Three Months Ended |
% Change |
||||||||||||||||
|
New |
New |
New |
||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
||||||||||
|
Comfort Inn |
6 |
19 |
25 |
13 |
19 |
32 |
(54%) |
0% |
(22%) |
|||||||||
|
Comfort Suites |
9 |
3 |
12 |
1 |
1 |
2 |
800% |
200% |
500% |
|||||||||
|
Sleep |
11 |
4 |
15 |
8 |
1 |
9 |
38% |
300% |
67% |
|||||||||
|
Quality |
- |
61 |
61 |
- |
82 |
82 |
NM |
(26%) |
(26%) |
|||||||||
|
Clarion |
- |
9 |
9 |
- |
8 |
8 |
NM |
13% |
13% |
|||||||||
|
Econo Lodge |
2 |
26 |
28 |
- |
26 |
26 |
NM |
0% |
8% |
|||||||||
|
Rodeway |
- |
31 |
31 |
- |
25 |
25 |
NM |
24% |
24% |
|||||||||
|
MainStay |
6 |
2 |
8 |
10 |
- |
10 |
(40%) |
NM |
(20%) |
|||||||||
|
Suburban |
8 |
4 |
12 |
2 |
3 |
5 |
300% |
33% |
140% |
|||||||||
|
Ascend Hotel Collection |
- |
11 |
11 |
3 |
9 |
12 |
(100%) |
22% |
(8%) |
|||||||||
|
Cambria Suites |
3 |
- |
3 |
3 |
- |
3 |
0% |
NM |
0% |
|||||||||
|
Total Domestic System |
45 |
170 |
215 |
40 |
174 |
214 |
13% |
(2%) |
0% |
|||||||||
|
Exhibit 7 |
||||||||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||||||||
|
DOMESTIC HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT |
||||||||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||||||||
|
A hotel in the domestic pipeline does not always result in an open and operating hotel due to various factors. |
||||||||||||||||||||||||
|
Variance |
||||||||||||||||||||||||
|
December 31, 2013 |
December 31, 2012 |
New |
||||||||||||||||||||||
|
Units |
Units |
Conversion |
Construction |
Total |
||||||||||||||||||||
|
Conversion |
New |
Total |
Conversion |
New |
Total |
Units |
% |
Units |
% |
Units |
% |
|||||||||||||
|
Comfort Inn |
44 |
53 |
97 |
33 |
49 |
82 |
11 |
33% |
4 |
8% |
15 |
18% |
||||||||||||
|
Comfort Suites |
4 |
47 |
51 |
1 |
72 |
73 |
3 |
300% |
(25) |
(35%) |
(22) |
(30%) |
||||||||||||
|
Sleep Inn |
1 |
49 |
50 |
1 |
43 |
44 |
- |
0% |
6 |
14% |
6 |
14% |
||||||||||||
|
Quality |
48 |
3 |
51 |
36 |
3 |
39 |
12 |
33% |
- |
0% |
12 |
31% |
||||||||||||
|
Clarion |
8 |
2 |
10 |
12 |
1 |
13 |
(4) |
(33%) |
1 |
100% |
(3) |
(23%) |
||||||||||||
|
Econo Lodge |
26 |
2 |
28 |
24 |
- |
24 |
2 |
8% |
2 |
NM |
4 |
17% |
||||||||||||
|
Rodeway |
38 |
1 |
39 |
35 |
- |
35 |
3 |
9% |
1 |
NM |
4 |
11% |
||||||||||||
|
MainStay |
2 |
31 |
33 |
- |
25 |
25 |
2 |
NM |
6 |
24% |
8 |
32% |
||||||||||||
|
Suburban |
6 |
16 |
22 |
1 |
15 |
16 |
5 |
500% |
1 |
7% |
6 |
38% |
||||||||||||
|
Ascend Hotel Collection |
10 |
10 |
20 |
11 |
7 |
18 |
(1) |
(9%) |
3 |
43% |
2 |
11% |
||||||||||||
|
Cambria Suites |
- |
21 |
21 |
- |
25 |
25 |
- |
NM |
(4) |
(16%) |
(4) |
(16%) |
||||||||||||
|
187 |
235 |
422 |
154 |
240 |
394 |
33 |
21% |
(5) |
(2%) |
28 |
7% |
|||||||||||||
|
Exhibit 8 |
|||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||||||
|
(UNAUDITED) |
|||||||||
|
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS |
|||||||||
|
(dollar amounts in thousands) |
Three Months Ended December 31, |
Year Ended December 31, |
|||||||
|
2013 |
2012 |
2013 |
2012 |
||||||
|
Franchising Revenues: |
|||||||||
|
Total Revenues |
$ 180,695 |
$ 178,306 |
$ 724,307 |
$ 691,509 |
|||||
|
Adjustments: |
|||||||||
|
Marketing and reservation revenues |
(100,718) |
(100,160) |
(403,099) |
(384,784) |
|||||
|
SkyTouch Division |
(21) |
- |
(33) |
- |
|||||
|
Hotel operations |
(1,174) |
(1,133) |
(4,774) |
(4,573) |
|||||
|
Franchising Revenues |
$ 78,782 |
$ 77,013 |
$ 316,401 |
$ 302,152 |
|||||
|
Franchising Margins: |
|||||||||
|
Operating Margin: |
|||||||||
|
Total Revenues |
$ 180,695 |
$ 178,306 |
$ 724,307 |
$ 691,509 |
|||||
|
Operating Income |
$ 47,157 |
$ 45,234 |
$ 194,494 |
$ 193,142 |
|||||
|
Operating Margin |
26.1% |
25.4% |
26.9% |
27.9% |
|||||
|
Franchising Margin: |
|||||||||
|
Franchising Revenues |
$ 78,782 |
$ 77,013 |
$ 316,401 |
$ 302,152 |
|||||
|
Operating Income |
$ 47,157 |
$ 45,234 |
$ 194,494 |
$ 193,142 |
|||||
|
SkyTouch Division operating loss |
2,986 |
1,296 |
11,754 |
3,370 |
|||||
|
Hotel operations operating income |
(105) |
(102) |
(570) |
(533) |
|||||
|
Operating Income - Franchising |
$ 50,038 |
$ 46,428 |
$ 205,678 |
$ 195,979 |
|||||
|
Franchising Margins |
63.5% |
60.3% |
65.0% |
64.9% |
|||||
|
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES |
|||||||||
|
(dollar amounts in thousands) |
Three Months Ended December 31, |
Year Ended December 31, |
|||||||
|
2013 |
2012 |
2013 |
2012 |
||||||
|
Total Selling, General and Administrative Expenses |
$ 29,489 |
$ 29,779 |
$ 113,567 |
$ 101,852 |
|||||
|
SkyTouch Division |
(2,912) |
(1,287) |
(11,502) |
(3,360) |
|||||
|
Franchising Selling, General and Administration Expenses |
$ 26,577 |
$ 28,492 |
$ 102,065 |
$ 98,492 |
|||||
|
CALCULATION OF EBITDA |
|||||||||
|
(dollar amounts in thousands) |
|||||||||
|
Q4 2013 |
Q4 2012 |
Year Ended December |
Year Ended December |
||||||
|
Net income |
$ 27,332 |
$ 24,451 |
$ 112,601 |
$ 120,687 |
|||||
|
Income taxes |
10,998 |
10,877 |
44,317 |
48,481 |
|||||
|
Interest expense |
10,203 |
10,366 |
42,537 |
27,189 |
|||||
|
Interest income |
(568) |
(384) |
(2,547) |
(1,540) |
|||||
|
Other (gains) and losses |
(514) |
148 |
(1,780) |
(1,989) |
|||||
|
Loss on the extinguishment of debt |
- |
- |
- |
526 |
|||||
|
Equity in net income of affiliates |
(294) |
(224) |
(634) |
(212) |
|||||
|
Depreciation and amortization |
2,395 |
2,237 |
9,469 |
8,226 |
|||||
|
EBITDA |
$ 49,552 |
$ 47,471 |
$ 203,963 |
$ 201,368 |
|||||
|
Franchising |
$ 52,205 |
$ 48,521 |
$ 214,336 |
$ 203,660 |
|||||
|
Hotel operations |
238 |
237 |
1,096 |
1,068 |
|||||
|
SkyTouch |
(2,891) |
(1,287) |
(11,469) |
(3,360) |
|||||
|
$ 49,552 |
$ 47,471 |
$ 203,963 |
$ 201,368 |
||||||
SOURCE Choice Hotels International, Inc.
CONTACT: David White, Senior Vice President, Chief Financial Officer & Treasurer, (301) 592-5117, or Scott Carman, Director, Public Relations, (301) 592-6361
Web Site: http://www.choicehotels.com
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