ROCKVILLE, Md., Oct. 27, 2016 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE:CHH) today reported the following highlights for the third quarter 2016:
-- Diluted earnings per share ("EPS") for the three months ended September
30, 2016 totaled $0.84 per share, an increase of 17 percent from the
same period of 2015.
-- Net income for the three months ended September 30, 2016 totaled $47.6
million, an increase of 15 percent from the same period of 2015.
-- Revenues for the three months ended September 30, 2016 totaled $267.6
million, an increase of 11 percent from the same period of 2015.
-- Franchising revenues for the three months ended September 30, 2016
totaled $113.1 million, an increase of 7 percent from the same period of
2015 and domestic system-wide gross room revenues for the three months
ended September 30, 2016 totaled approximately $2.1 billion.
-- Domestic royalty fees for the three months ended September 30, 2016
totaled $90.7 million, an increase of 7 percent from the same period of
2015.
-- Domestic system-wide revenue per available room ("RevPAR") increased 4.5
percent in the third quarter of 2016, as occupancy and average daily
rates increased 70 basis points and 3.4 percent, respectively, from the
same period of 2015.
-- Domestic RevPAR performance for the third quarter of 2016 exceeded total
industry results by 120 basis points and also exceeded growth reported
by Smith Travel Research for the primary chain scale segments in which
the company competes.
-- Effective domestic royalty rate for the three months ended September 30,
2016 was 4.39 percent, an increase of 12 basis points from the same
period of 2015.
-- Domestic hotel executed franchise agreements totaled 161 for the three
months ended September 30, 2016, an increase of 25 percent from the same
period of 2015, including a 13 percent and 30 percent increase in new
construction and conversion agreements, respectively.
-- Comfort family of brands recorded its 24(th) consecutive month of RevPAR
index gains compared to its competition and over the last two years the
company has executed 162 new construction franchise agreements which is
more than double the number of agreements executed in the prior two year
period.
-- The company's domestic pipeline of hotels awaiting conversion, under
construction or approved for development as of September 30, 2016
increased 20 percent from September 30, 2015. The domestic new
construction pipeline for the company's Comfort brand as of September
30, 2016 totaled 180 hotels, a 30 percent increase from September 30,
2015.
-- Adjusted earnings before interest, taxes, depreciation and amortization
("EBITDA") from hotel franchising activities for the three months ended
September 30, 2016 totaled $85.5 million, an increase of 5 percent over
the prior year period.
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"We are pleased with our results for the third quarter, which were highlighted by a 17 percent increase in diluted earnings per share and a 4.5% increase in our domestic RevPAR which continues to outpace the RevPAR performance of the industry," said Stephen P. Joyce, chief executive officer, Choice Hotels. "In addition, our efforts to rejuvenate the Comfort brand are working, including the implementation of higher standards for hotels joining the brand, requiring meaningful property improvement plans at contract windows and targeting underperforming Comforts for termination and replacement with new construction product. These efforts have resulted in 24 consecutive months of RevPAR index gains and are helping to fuel the growth of our new construction development pipeline."
Special Item
During the nine months ended September 30, 2016, the company recorded an executive termination benefit charge of approximately $2.2 million. This special item impacted diluted EPS by $0.02 per share for the nine months ended September 30, 2016. The company uses non-GAAP measures that exclude executive termination benefits because those non-GAAP measures allow for period-over-period comparison of on-going core operations before the impact of these charges. These non-GAAP measures, which are reconciled to the comparable GAAP measures in Exhibit 8, include adjusted net income, adjusted diluted EPS, adjusted hotel franchising selling, general and administrative expenses, adjusted EBITDA and adjusted hotel franchising margins.
Use of Cash Flows
Dividends
During the nine months ended September 30, 2016, the company paid cash dividends totaling approximately $35 million. Based on the current quarterly dividend rate of $0.205 per common share, the company expects to pay dividends of approximately $46 million during 2016.
Share Repurchases
The company repurchased 0.6 million shares of common stock under its share repurchase program during the nine months ended September 30, 2016, at a total cost of approximately $29 million. The company currently has authorization to purchase up to 1.1 million additional shares under this program.
Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotels & suites brand, the company advanced approximately $78 million in support of the Cambria brand during the nine months ended September 30, 2016. The company also recycled approximately $25 million of investments in support of Cambria resulting in net advances of $53 million for the current year. These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions. On September 30, 2016, the company had approximately $181 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five year period.
Outlook
The company's consolidated 2016 outlook reflects the following assumptions:
Hotel Franchising
-- Adjusted EBITDA from franchising activities for full-year 2016 are
expected to range between $272 million and $274 million;
-- Net domestic unit growth for 2016 is expected to be approximately 2%;
-- RevPAR is expected to increase between 4% and 5% for the fourth quarter
and range between 3.5% and 4.25% for full-year 2016; and
-- The effective royalty rate is expected to increase between 10 and 11
basis points for full-year 2016 as compared to full-year 2015.
Non-Hotel Franchising Activities
-- Net reductions in full-year 2016 EBITDA relating to our non-hotel
franchising operations, which primarily relate to SkyTouch and vacation
rental activities are expected to range between approximately $18
million and $19 million.
Other Items
-- The effective tax rate is expected to be approximately 33% for the
fourth quarter and approximately 31.5% for full-year 2016.
-- Adjusted EBITDA and adjusted EPS estimates exclude executive termination
benefits incurred in the nine months ended September 30, 2016 as
discussed above under Special Item.
-- Diluted EPS estimates are based on the current number of shares
outstanding and thus do not factor in any changes that may occur due to
new equity grants or any further repurchases of common stock under the
company's share repurchase program.
Consolidated Outlook
The company's fourth quarter 2016 diluted EPS is expected to be at least $0.51. The company expects full-year 2016 adjusted diluted EPS to range between $2.43 and $2.46 and full year 2016 adjusted EBITDA to range between $253 million and $256 million.
Conference Call
Choice will conduct a conference call on Thursday, October 27, 2016 at 10:00 a.m. EDT to discuss the company's third quarter 2016 results. The dial-in number to listen to the call domestically is 1-855-638-5678 and the number for international participants is 1-920-663-6286. The conference call also will be webcast simultaneously via the company's website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website 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 1:00 p.m. EDT on Thursday, October 27, 2016 by calling 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and entering access code 96677474. In addition, the call will be archived and available on choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,400 hotels franchised in more than 40 countries and territories, Choice Hotels International® represents more than 500,000 rooms around the globe. As of September 30, 2016, 745 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge®, Rodeway Inn®, and Vacation Rentals by Choice Hotels(TM) brands provide a spectrum of lodging choices to meet guests' needs. With more than 28 million members and counting, our Choice Privileges® rewards program enhances every trip a guest takes, with benefits ranging from instant, every day rewards to exceptional experiences, starting right when they join. All hotels and vacation rentals are independently owned and operated. Visit us at www.choicehotels.com for more information.
SkyTouch Technology® is a business division of Choice Hotels 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.
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," "should," "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, repurchases of common stock 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; foreign currency fluctuations; 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 marketing and reservations systems and other operating systems; our ability to grow our franchise system; exposure to risks related to development activities; fluctuations in the supply and demand for hotels rooms; our ability to realize anticipated benefits from acquired businesses; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations; the outcome of litigation; and our ability to manage 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
Adjusted EBITDA, franchising revenues, adjusted hotel franchising SG&A, Adjusted EBITDA from hotel franchising activities and adjusted hotel franchising margins 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 net income, total revenues and operating margins. 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 these items to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization: Adjusted EBITDA reflects net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses, equity in net income of unconsolidated affiliates and executive termination benefits. We consider adjusted 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 adjusted 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. Adjusted 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, Adjusted Hotel Franchising EBITDA, Adjusted Hotel Franchising SG&A and Margins: The company reports franchising revenues, adjusted hotel franchising EBITDA, adjusted franchising hotel SG&A and margins which exclude marketing and reservation revenues; the SkyTouch Technology division; recently acquired operations that provide Software as a Service ("SaaS") technology solutions to vacation rental management companies; revenue generated from the ownership of an office building that is leased to a third-party and executive termination benefits. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors. 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. 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. The operations for SkyTouch Technology and our vacation rental technology solutions provider are excluded since they do not reflect the company's core franchising business but are adjacent, complementary lines of business.
© 2016 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc.
Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
Variance Variance
2016 2015 $ % 2016 2015 $ %
---- ---- --- --- ---- ---- --- ---
(In thousands, except per share amounts)
REVENUES:
Royalty fees $96,114 $89,929 $6,185 7% $247,168 $233,543 $13,625 6%
Initial franchise and relicensing fees 6,284 6,170 114 2% 17,146 17,703 (557) (3%)
Procurement services 7,615 6,271 1,344 21% 23,719 19,667 4,052 21%
Marketing and reservation system 152,018 134,463 17,555 13% 412,193 366,298 45,895 13%
Other 5,546 4,693 853 18% 16,220 11,716 4,504 38%
----- ----- --- --- ------ ------ ----- ---
Total revenues 267,577 241,526 26,051 11% 716,446 648,927 67,519 10%
OPERATING EXPENSES:
Selling, general and administrative 34,357 30,152 4,205 14% 109,515 95,712 13,803 14%
Depreciation and amortization 2,986 3,108 (122) (4%) 8,707 8,793 (86) (1%)
Marketing and reservation system 152,018 134,463 17,555 13% 412,193 366,298 45,895 13%
------- ------- ------ --- ------- ------- ------ ---
Total operating expenses 189,361 167,723 21,638 13% 530,415 470,803 59,612 13%
Gain on sale of assets, net 402 - 402 NM 402 - 402 NM
Operating income 78,618 73,803 4,815 7% 186,433 178,124 8,309 5%
OTHER INCOME AND EXPENSES, NET:
Interest expense 11,150 10,821 329 3% 33,466 32,057 1,409 4%
Interest income (836) (359) (477) 133% (2,502) (982) (1,520) 155%
Other (gains) losses (746) 1,402 (2,148) (153%) (1,005) (239) (766) 321%
Equity in net (income) loss of affiliates (1,150) (329) (821) 250% 286 1,107 (821) (74%)
Total other income and expenses, net 8,418 11,535 (3,117) (27%) 30,245 31,943 (1,698) (5%)
----- ------ ------ ---- ------ ------ ------ ---
Income before income taxes 70,200 62,268 7,932 13% 156,188 146,181 10,007 7%
Income taxes 22,635 20,849 1,786 9% 48,638 47,355 1,283 3%
------ ------ ----- --- ------ ------ ----- ---
Net income $47,565 $41,419 $6,146 15% $107,550 $98,826 $8,724 9%
======= ======= ====== === ======== ======= ====== ===
Basic earnings per share $0.85 $0.72 $0.13 18% $1.91 $1.72 $0.19 11%
===== ===== ===== === ===== ===== ===== ===
Diluted earnings per share $0.84 $0.72 $0.12 17% $1.90 $1.71 $0.19 11%
===== ===== ===== === ===== ===== ===== ===
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts) September 30, December 31,
2016 2015
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $205,953 $193,441
Accounts receivable, net 129,422 89,352
Other current assets 36,554 28,160
------ ------
Total current
assets 371,929 310,953
Fixed assets and intangibles, net 178,078 179,433
Notes receivable, net of allowances 98,450 82,572
Investments in unconsolidated entities 83,740 67,037
Investments, employee benefit plans, at fair value 16,414 17,674
Other assets 97,665 59,341
------ ------
Total assets $846,276 $717,010
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable $60,363 $64,431
Accrued expenses and other current liabilities 75,880 70,807
Deferred revenue 121,592 71,587
Current portion of long-term debt 660 1,191
--- -----
Total current
liabilities 258,495 208,016
Long-term debt 866,247 812,945
Deferred compensation & retirement plan obligations 20,890 22,859
Other liabilities 38,086 69,089
------ ------
Total
liabilities 1,183,718 1,112,909
Total shareholders'
deficit (337,442) (395,899)
Total liabilities
and shareholders'
deficit $846,276 $717,010
-------- --------
Choice Hotels International, Inc. Exhibit 3
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) Nine Months Ended September 30,
-------------------------------
2016 2015*
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $107,550 $98,826
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 8,707 8,793
Gain on disposal of assets (377) (1,519)
Provision for bad debts, net 1,093 1,540
Non-cash stock compensation and other charges 11,037 8,929
Excess tax benefits from stock-based compensation 2,149 4,885
Non-cash interest and other loss 807 3,168
Deferred income taxes (4,329) (1,799)
Equity in net losses from unconsolidated joint ventures less distributions received 1,654 2,917
Changes in assets and liabilities, net of acquisition:
Receivables (42,426) (24,532)
Advances to/from marketing and reservation activities, net (25,783) 18,341
Forgivable notes receivable, net (15,109) (21,029)
Accounts payable (3,532) 5,111
Accrued expenses and other current liabilities (14,261) (14,083)
Income taxes payable/receivable 19,219 11,066
Deferred revenue 49,976 2,122
Other assets (9,958) (4,826)
Other liabilities 1,992 5,748
----- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES 88,409 103,658
------ -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (17,584) (21,810)
Proceeds from sales of assets 8,360 6,347
Acquisitions of real estate (25,263) (8,767)
Business acquisiton, net of cash acquired (1,341) (13,269)
Contributions to equity method investments (24,179) (3,811)
Distributions from equity method investments 3,700 270
Purchases of investments, employee benefit plans (1,430) (2,977)
Proceeds from sales of investments, employee benefit plans 1,395 2,920
Issuance of mezzanine and other notes receivable (20,281) (25,253)
Collections of mezzanine and other notes receivable 11,040 3,697
Other items, net (422) (445)
---- ----
NET CASH USED BY INVESTING ACTIVITIES (66,005) (63,098)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit facilities 52,814 162,032
Principal payments on long-term debt (836) (130,194)
Proceeds from the issuance of long-term debt - 176
Debt issuance costs (284) (2,169)
Purchases of treasury stock (33,958) (56,450)
Dividends paid (34,690) (34,173)
Proceeds from exercise of stock options 6,802 6,381
----- -----
NET CASH USED BY FINANCING ACTIVITIES (10,152) (54,397)
------- -------
Net change in cash and cash equivalents 12,252 (13,837)
Effect of foreign exchange rate changes on cash and cash equivalents 260 (1,781)
Cash and cash equivalents at beginning of period 193,441 214,879
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $205,953 $199,261
======== ========
* Year to date results for September 30, 2015 reflect the adoption of ASU No. 2016-09, which requires companies to recognize excess tax benefits related to the exercise of share based awards as operating activities in the statement of cash flows.
The company has elected to apply the ASU retrospectively and as a result excess tax benefits totaling $4.9 million for the nine months ended September 30, 2015 have been reclassified from cash flows from financing activities to cash flows from
operating activities.
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 4
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Nine Months Ended September 30, 2016 For the Nine Months Ended September 30, 2015 Change
-------------------------------------------- -------------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $93.78 67.2% $63.00 $90.65 66.8% $60.52 3.5% 40 bps 4.1%
Comfort Suites 97.44 70.8% 69.01 94.83 69.9% 66.25 2.8% 90 bps 4.2%
Sleep 83.09 66.4% 55.14 81.34 65.7% 53.45 2.2% 70 bps 3.2%
Quality 78.97 60.8% 48.00 76.02 60.2% 45.75 3.9% 60 bps 4.9%
Clarion 83.67 59.7% 49.95 80.93 58.9% 47.68 3.4% 80 bps 4.8%
Econo Lodge 62.33 55.3% 34.47 60.44 55.1% 33.30 3.1% 20 bps 3.5%
Rodeway 64.14 57.3% 36.74 60.56 58.5% 35.44 5.9% (120) bps 3.7%
MainStay 77.34 66.2% 51.18 78.03 69.7% 54.35 (0.9%) (350) bps (5.8%)
Suburban 50.15 76.0% 38.11 47.75 77.0% 36.78 5.0% (100) bps 3.6%
Ascend Hotel Collection 130.34 59.0% 76.95 127.38 59.9% 76.34 2.3% (90) bps 0.8%
------ ---- ----- ------ ---- ----- --- --- --- ---
Total $83.22 63.1% $52.50 $80.77 62.9% $50.79 3.0% 20 bps 3.4%
====== ==== ====== ====== ==== ====== === === === ===
For the Three Months Ended September 30, 2016 For the Three Months Ended September 30, 2015 Change
--------------------------------------------- --------------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $100.02 73.4% $73.41 $96.35 73.2% $70.54 3.8% 20 bps 4.1%
Comfort Suites 100.95 74.6% 75.35 98.06 73.2% 71.79 2.9% 140 bps 5.0%
Sleep 86.59 70.6% 61.15 84.44 69.1% 58.31 2.5% 150 bps 4.9%
Quality 84.31 66.4% 55.96 80.80 65.3% 52.79 4.3% 110 bps 6.0%
Clarion 88.98 66.4% 59.08 85.46 63.9% 54.61 4.1% 250 bps 8.2%
Econo Lodge 67.44 60.9% 41.08 65.32 60.1% 39.27 3.2% 80 bps 4.6%
Rodeway 69.72 62.3% 43.45 66.00 63.7% 42.02 5.6% (140) bps 3.4%
MainStay 79.91 71.5% 57.13 81.26 71.8% 58.36 (1.7%) (30) bps (2.1%)
Suburban 51.09 78.2% 39.96 48.77 78.1% 38.09 4.8% 10 bps 4.9%
Ascend Hotel Collection 138.97 63.0% 87.50 134.88 60.1% 81.07 3.0% 290 bps 7.9%
------ ---- ----- ------ ---- ----- --- --- --- ---
Total $88.27 68.4% $60.39 $85.38 67.7% $57.80 3.4% 70 bps 4.5%
====== ==== ====== ====== ==== ====== === === === ===
For the Quarter Ended For the Nine Months Ended
--------------------- -------------------------
9/30/2016 9/30/2015 9/30/2016 9/30/2015
System-wide effective royalty rate 4.39% 4.27% 4.39% 4.28%
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 5
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
September 30, 2016 September 30, 2015 Variance
------------------ ------------------ --------
Hotels Rooms Hotels Rooms Hotels Rooms % %
------ ----- ------ ----- ------ ----- --- ---
Comfort Inn 1,126 87,346 1,188 92,029 (62) (4,683) (5.2%) (5.1%)
Comfort Suites 565 43,610 574 44,311 (9) (701) (1.6%) (1.6%)
Sleep 378 27,035 374 26,913 4 122 1.1% 0.5%
Quality 1,407 111,564 1,325 105,950 82 5,614 6.2% 5.3%
Clarion 164 22,456 176 24,626 (12) (2,170) (6.8%) (8.8%)
Econo Lodge 853 52,773 854 52,963 (1) (190) (0.1%) (0.4%)
Rodeway 526 30,058 488 27,095 38 2,963 7.8% 10.9%
MainStay 54 4,020 48 3,656 6 364 12.5% 10.0%
Suburban 58 6,471 63 7,065 (5) (594) (7.9%) (8.4%)
Ascend Hotel Collection 119 9,761 112 9,407 7 354 6.3% 3.8%
Cambria hotel & suites 25 3,113 24 2,917 1 196 4.2% 6.7%
--- ----- --- ----- --- --- --- ---
Domestic Franchises 5,275 398,207 5,226 396,932 49 1,275 0.9% 0.3%
International Franchises 1,144 110,945 1,153 107,425 (9) 3,520 (0.8%) 3.3%
----- ------- ----- ------- --- ----- ----- ---
Total Franchises 6,419 509,152 6,379 504,357 40 4,795 0.6% 1.0%
===== ======= ===== ======= === ===== === ===
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Nine Months Ended September 30, 2016 For the Nine Months Ended September 30,
2015 % Change
-------------------------------------------- ---------------------------------------- --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 20 26 46 17 28 45 18% (7%) 2%
Comfort Suites 17 1 18 18 3 21 (6%) (67%) (14%)
Sleep 26 1 27 19 - 19 37% NM 42%
Quality - 118 118 3 114 117 (100%) 4% 1%
Clarion 3 15 18 - 7 7 NM 114% 157%
Econo Lodge 1 41 42 - 39 39 NM 5% 8%
Rodeway - 60 60 - 57 57 NM 5% 5%
MainStay 15 - 15 16 - 16 (6%) NM (6%)
Suburban - 1 1 1 4 5 (100%) (75%) (80%)
Ascend Hotel Collection 2 15 17 3 22 25 (33%) (32%) (32%)
Cambria hotel & suites 16 - 16 14 2 16 14% (100%) 0%
--- --- --- --- --- --- --- ----- ---
Total Domestic System 100 278 378 91 276 367 10% 1% 3%
=== === === === === === === === ===
For the Three Months Ended September 30, 2016 For the Three Months Ended September 30,
2015 % Change
--------------------------------------------- ----------------------------------------- --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 8 12 20 4 8 12 100% 50% 67%
Comfort Suites 9 - 9 5 1 6 80% (100%) 50%
Sleep 12 1 13 10 - 10 20% NM 30%
Quality - 45 45 - 39 39 NM 15% 15%
Clarion - 6 6 - 1 1 NM 500% 500%
Econo Lodge - 12 12 - 11 11 NM 9% 9%
Rodeway - 33 33 - 22 22 NM 50% 50%
MainStay 9 - 9 10 - 10 (10%) NM (10%)
Suburban - - - - 1 1 NM (100%) (100%)
Ascend Hotel Collection - 9 9 2 6 8 (100%) 50% 13%
Cambria hotel & suites 5 - 5 7 2 9 (29%) (100%) (44%)
--- --- --- --- --- --- ---- ----- ----
Total Domestic System 43 118 161 38 91 129 13% 30% 25%
=== === === === === === === === ===
Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
DOMESTIC 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
--------
September 30, 2016 September 30, 2015
Units Units Conversion New Construction Total
----- ----- ---------- ---------------- -----
Conversion New Total Conversion New Total Units % Units % Units %
Construction Construction
------------ ------------
Comfort Inn 39 83 122 39 63 102 - 0% 20 32% 20 20%
Comfort Suites 3 97 100 1 75 76 2 200% 22 29% 24 32%
Sleep Inn 1 89 90 - 72 72 1 NM 17 24% 18 25%
Quality 57 3 60 56 5 61 1 2% (2) (40%) (1) (2%)
Clarion 11 5 16 9 2 11 2 22% 3 150% 5 45%
Econo Lodge 28 3 31 26 4 30 2 8% (1) (25%) 1 3%
Rodeway 45 1 46 44 2 46 1 2% (1) (50%) - 0%
MainStay - 66 66 1 54 55 (1) (100%) 12 22% 11 20%
Suburban 5 6 11 4 10 14 1 25% (4) (40%) (3) (21%)
Ascend Hotel Collection 33 17 50 21 18 39 12 57% (1) (6%) 11 28%
Cambria hotel & suites 5 52 57 2 32 34 3 150% 20 63% 23 68%
--- --- --- --- --- --- --- --- --- --- --- ---
227 422 649 203 337 540 24 12% 85 25% 109 20%
=== === === === === === === === === === === ===
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 8
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
HOTEL FRANCHISING REVENUES AND ADJUSTED HOTEL FRANCHISING MARGINS
(dollar amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Hotel Franchising Revenues:
Total Revenues $267,577 $241,526 $716,446 $648,927
Adjustments:
Marketing and reservation system revenues (152,018) (134,463) (412,193) (366,298)
Non-hotel franchising activities (2,424) (1,459) (6,521) (2,473)
Hotel Franchising Revenues $113,135 $105,604 $297,732 $280,156
Adjusted Hotel Franchising Margins:
Operating Margin:
Total Revenues $267,577 $241,526 $716,446 $648,927
Operating Income $78,618 $73,803 $186,433 $178,124
Operating Margin 29.4% 30.6% 26.0% 27.4%
Adjusted Hotel Franchising Margin:
Hotel Franchising Revenues $113,135 $105,604 $297,732 $280,156
Operating Income $78,618 $73,803 $186,433 $178,124
Executive termination benefits - - 2,206 -
Non-hotel franchising activities operating loss 5,400 5,034 17,140 15,322
Adjusted Hotel Franchising Operating Income $84,018 $78,837 $205,779 $193,446
Adjusted Hotel Franchising Margins 74.3% 74.7% 69.1% 69.0%
ADJUSTED HOTEL FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES
(dollar amounts in thousands) Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Total Selling, General and Administrative Expenses $34,357 $30,152 $109,515 $95,712
Executive termination benefits - - (2,206) -
Non-hotel franchising activities (6,723) (5,724) (20,438) (16,145)
Adjusted Hotel Franchising Selling, General and
Administration Expenses $27,634 $24,428 $86,871 $79,567
==============================================
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
(dollar amounts in thousands)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Net income $47,565 $41,419 $107,550 $98,826
Income taxes 22,635 20,849 48,638 47,355
Interest expense 11,150 10,821 33,466 32,057
Interest income (836) (359) (2,502) (982)
Other (gains) losses (746) 1,402 (1,005) (239)
Equity in net (income) loss of affiliates (1,150) (329) 286 1,107
Gain on sale of assets (402) - (402) -
Depreciation and amortization 2,986 3,108 8,707 8,793
Executive termination benefits - - 2,206 -
Adjusted EBITDA $81,202 $76,911 $196,944 $186,917
======= ======= ======== ========
Hotel franchising $85,500 $81,177 $210,861 $200,589
Non-hotel franchising activities (4,298) (4,266) (13,917) (13,672)
$81,202 $76,911 $196,944 $186,917
======= ======= ======== ========
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)
(dollar amounts in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Net Income $47,565 $41,419 $107,550 $98,826
Adjustments:
Executive termination benefits, net of income taxes - - 1,394 -
Adjusted Net Income $47,565 $41,419 $108,944 $98,826
======= ======= ======== =======
Diluted Earnings Per Share $0.84 $0.72 $1.90 $1.71
Adjustments:
Executive termination benefits - - 0.02 -
Adjusted Diluted Earnings Per Share (EPS) $0.84 $0.72 $1.92 $1.71
===== ===== ===== =====
ADJUSTED EBITDA AND DILUTED EPS FULL YEAR FORECAST
(dollar amounts in thousands)
Range
-----
Estimated Adjusted EBITDA
Fiscal Year 2016
----------------
Net income $135,000 $137,100
Income taxes 63,100 64,000
Interest expense 45,100 45,100
Interest income (3,300) (3,300)
Gain on sale of assets (400) (400)
Other gains (1,000) (1,000)
Equity in net loss of affiliates 500 500
Depreciation and amortization 11,800 11,800
Executive termination benefits 2,200 2,200
Adjusted EBITDA $253,000 $256,000
======== ========
Hotel franchising $272,000 $274,000
Non-hotel franchising activities (19,000) (18,000)
$253,000 $256,000
======== ========
Range
-----
Estimated Adjusted Diluted EPS
Fiscal Year 2016
----------------
Diluted EPS $2.41 $2.44
Adjustments:
Executive termination benefits 0.02 0.02
Adjusted Diluted EPS $2.43 $2.46
===== =====
Logo - http://photos.prnewswire.com/prnh/20140807/134515
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
ROCKVILLE, Md., Oct. 27, 2016
ROCKVILLE, Md., Oct. 27, 2016 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE:CHH) today reported the following highlights for the third quarter 2016:
"We are pleased with our results for the third quarter, which were highlighted by a 17 percent increase in diluted earnings per share and a 4.5% increase in our domestic RevPAR which continues to outpace the RevPAR performance of the industry," said Stephen P. Joyce, chief executive officer, Choice Hotels. "In addition, our efforts to rejuvenate the Comfort brand are working, including the implementation of higher standards for hotels joining the brand, requiring meaningful property improvement plans at contract windows and targeting underperforming Comforts for termination and replacement with new construction product. These efforts have resulted in 24 consecutive months of RevPAR index gains and are helping to fuel the growth of our new construction development pipeline."
Special Item
During the nine months ended September 30, 2016, the company recorded an executive termination benefit charge of approximately $2.2 million. This special item impacted diluted EPS by $0.02 per share for the nine months ended September 30, 2016. The company uses non-GAAP measures that exclude executive termination benefits because those non-GAAP measures allow for period-over-period comparison of on-going core operations before the impact of these charges. These non-GAAP measures, which are reconciled to the comparable GAAP measures in Exhibit 8, include adjusted net income, adjusted diluted EPS, adjusted hotel franchising selling, general and administrative expenses, adjusted EBITDA and adjusted hotel franchising margins.
Use of Cash Flows
Dividends
During the nine months ended September 30, 2016, the company paid cash dividends totaling approximately $35 million. Based on the current quarterly dividend rate of $0.205 per common share, the company expects to pay dividends of approximately $46 million during 2016.
Share Repurchases
The company repurchased 0.6 million shares of common stock under its share repurchase program during the nine months ended September 30, 2016, at a total cost of approximately $29 million. The company currently has authorization to purchase up to 1.1 million additional shares under this program.
Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotels & suites brand, the company advanced approximately $78 million in support of the Cambria brand during the nine months ended September 30, 2016. The company also recycled approximately $25 million of investments in support of Cambria resulting in net advances of $53 million for the current year. These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions. On September 30, 2016, the company had approximately $181 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five year period.
Outlook
The company's consolidated 2016 outlook reflects the following assumptions:
Hotel Franchising
Non-Hotel Franchising Activities
Other Items
Consolidated Outlook
The company's fourth quarter 2016 diluted EPS is expected to be at least $0.51. The company expects full-year 2016 adjusted diluted EPS to range between $2.43 and $2.46 and full year 2016 adjusted EBITDA to range between $253 million and $256 million.
Conference Call
Choice will conduct a conference call on Thursday, October 27, 2016 at 10:00 a.m. EDT to discuss the company's third quarter 2016 results. The dial-in number to listen to the call domestically is 1-855-638-5678 and the number for international participants is 1-920-663-6286. The conference call also will be webcast simultaneously via the company's website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website 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 1:00 p.m. EDT on Thursday, October 27, 2016 by calling 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and entering access code 96677474. In addition, the call will be archived and available on choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,400 hotels franchised in more than 40 countries and territories, Choice Hotels International® represents more than 500,000 rooms around the globe. As of September 30, 2016, 745 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge®, Rodeway Inn®, and Vacation Rentals by Choice HotelsTM brands provide a spectrum of lodging choices to meet guests' needs. With more than 28 million members and counting, our Choice Privileges® rewards program enhances every trip a guest takes, with benefits ranging from instant, every day rewards to exceptional experiences, starting right when they join. All hotels and vacation rentals are independently owned and operated. Visit us at www.choicehotels.com for more information.
SkyTouch Technology® is a business division of Choice Hotels 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.
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," "should," "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, repurchases of common stock 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; foreign currency fluctuations; 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 marketing and reservations systems and other operating systems; our ability to grow our franchise system; exposure to risks related to development activities; fluctuations in the supply and demand for hotels rooms; our ability to realize anticipated benefits from acquired businesses; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations; the outcome of litigation; and our ability to manage 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
Adjusted EBITDA, franchising revenues, adjusted hotel franchising SG&A, Adjusted EBITDA from hotel franchising activities and adjusted hotel franchising margins 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 net income, total revenues and operating margins. 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 these items to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization: Adjusted EBITDA reflects net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses, equity in net income of unconsolidated affiliates and executive termination benefits. We consider adjusted 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 adjusted 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. Adjusted 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, Adjusted Hotel Franchising EBITDA, Adjusted Hotel Franchising SG&A and Margins: The company reports franchising revenues, adjusted hotel franchising EBITDA, adjusted franchising hotel SG&A and margins which exclude marketing and reservation revenues; the SkyTouch Technology division; recently acquired operations that provide Software as a Service ("SaaS") technology solutions to vacation rental management companies; revenue generated from the ownership of an office building that is leased to a third-party and executive termination benefits. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors. 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. 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. The operations for SkyTouch Technology and our vacation rental technology solutions provider are excluded since they do not reflect the company's core franchising business but are adjacent, complementary lines of business.
© 2016 Choice Hotels International, Inc. All rights reserved.
|
Choice Hotels International, Inc. |
Exhibit 1 |
|||||||||||||||
|
Consolidated Statements of Income |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
Variance |
Variance |
|||||||||||||||
|
2016 |
2015 |
$ |
% |
2016 |
2015 |
$ |
% |
|||||||||
|
(In thousands, except per share amounts) |
||||||||||||||||
|
REVENUES: |
||||||||||||||||
|
Royalty fees |
$ 96,114 |
$ 89,929 |
$ 6,185 |
7% |
$ 247,168 |
$ 233,543 |
$ 13,625 |
6% |
||||||||
|
Initial franchise and relicensing fees |
6,284 |
6,170 |
114 |
2% |
17,146 |
17,703 |
(557) |
(3%) |
||||||||
|
Procurement services |
7,615 |
6,271 |
1,344 |
21% |
23,719 |
19,667 |
4,052 |
21% |
||||||||
|
Marketing and reservation system |
152,018 |
134,463 |
17,555 |
13% |
412,193 |
366,298 |
45,895 |
13% |
||||||||
|
Other |
5,546 |
4,693 |
853 |
18% |
16,220 |
11,716 |
4,504 |
38% |
||||||||
|
Total revenues |
267,577 |
241,526 |
26,051 |
11% |
716,446 |
648,927 |
67,519 |
10% |
||||||||
|
OPERATING EXPENSES: |
||||||||||||||||
|
Selling, general and administrative |
34,357 |
30,152 |
4,205 |
14% |
109,515 |
95,712 |
13,803 |
14% |
||||||||
|
Depreciation and amortization |
2,986 |
3,108 |
(122) |
(4%) |
8,707 |
8,793 |
(86) |
(1%) |
||||||||
|
Marketing and reservation system |
152,018 |
134,463 |
17,555 |
13% |
412,193 |
366,298 |
45,895 |
13% |
||||||||
|
Total operating expenses |
189,361 |
167,723 |
21,638 |
13% |
530,415 |
470,803 |
59,612 |
13% |
||||||||
|
Gain on sale of assets, net |
402 |
- |
402 |
NM |
402 |
- |
402 |
NM |
||||||||
|
Operating income |
78,618 |
73,803 |
4,815 |
7% |
186,433 |
178,124 |
8,309 |
5% |
||||||||
|
OTHER INCOME AND EXPENSES, NET: |
||||||||||||||||
|
Interest expense |
11,150 |
10,821 |
329 |
3% |
33,466 |
32,057 |
1,409 |
4% |
||||||||
|
Interest income |
(836) |
(359) |
(477) |
133% |
(2,502) |
(982) |
(1,520) |
155% |
||||||||
|
Other (gains) losses |
(746) |
1,402 |
(2,148) |
(153%) |
(1,005) |
(239) |
(766) |
321% |
||||||||
|
Equity in net (income) loss of affiliates |
(1,150) |
(329) |
(821) |
250% |
286 |
1,107 |
(821) |
(74%) |
||||||||
|
Total other income and expenses, net |
8,418 |
11,535 |
(3,117) |
(27%) |
30,245 |
31,943 |
(1,698) |
(5%) |
||||||||
|
Income before income taxes |
70,200 |
62,268 |
7,932 |
13% |
156,188 |
146,181 |
10,007 |
7% |
||||||||
|
Income taxes |
22,635 |
20,849 |
1,786 |
9% |
48,638 |
47,355 |
1,283 |
3% |
||||||||
|
Net income |
$ 47,565 |
$ 41,419 |
$ 6,146 |
15% |
$ 107,550 |
$ 98,826 |
$ 8,724 |
9% |
||||||||
|
Basic earnings per share |
$ 0.85 |
$ 0.72 |
$ 0.13 |
18% |
$ 1.91 |
$ 1.72 |
$ 0.19 |
11% |
||||||||
|
Diluted earnings per share |
$ 0.84 |
$ 0.72 |
$ 0.12 |
17% |
$ 1.90 |
$ 1.71 |
$ 0.19 |
11% |
||||||||
|
Choice Hotels International, Inc. |
Exhibit 2 |
||||||
|
Consolidated Balance Sheets |
|||||||
|
(In thousands, except per share amounts) |
September 30, |
December 31, |
|||||
|
2016 |
2015 |
||||||
|
(Unaudited) |
|||||||
|
ASSETS |
|||||||
|
Cash and cash equivalents |
$ 205,953 |
$ 193,441 |
|||||
|
Accounts receivable, net |
129,422 |
89,352 |
|||||
|
Other current assets |
36,554 |
28,160 |
|||||
|
Total current assets |
371,929 |
310,953 |
|||||
|
Fixed assets and intangibles, net |
178,078 |
179,433 |
|||||
|
Notes receivable, net of allowances |
98,450 |
82,572 |
|||||
|
Investments in unconsolidated entities |
83,740 |
67,037 |
|||||
|
Investments, employee benefit plans, at fair value |
16,414 |
17,674 |
|||||
|
Other assets |
97,665 |
59,341 |
|||||
|
Total assets |
$ 846,276 |
$ 717,010 |
|||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
|
Accounts payable |
$ 60,363 |
$ 64,431 |
|||||
|
Accrued expenses and other current liabilities |
75,880 |
70,807 |
|||||
|
Deferred revenue |
121,592 |
71,587 |
|||||
|
Current portion of long-term debt |
660 |
1,191 |
|||||
|
Total current liabilities |
258,495 |
208,016 |
|||||
|
Long-term debt |
866,247 |
812,945 |
|||||
|
Deferred compensation & retirement plan obligations |
20,890 |
22,859 |
|||||
|
Other liabilities |
38,086 |
69,089 |
|||||
|
Total liabilities |
1,183,718 |
1,112,909 |
|||||
|
Total shareholders' deficit |
(337,442) |
(395,899) |
|||||
|
Total liabilities and shareholders' deficit |
$ 846,276 |
$ 717,010 |
|||||
|
Choice Hotels International, Inc. |
Exhibit 3 |
||||
|
Consolidated Statements of Cash Flows |
|||||
|
(Unaudited) |
|||||
|
(In thousands) |
Nine Months Ended September 30, |
||||
|
2016 |
2015* |
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||
|
Net income |
$ 107,550 |
$ 98,826 |
|||
|
Adjustments to reconcile net income to net cash provided |
|||||
|
by operating activities: |
|||||
|
Depreciation and amortization |
8,707 |
8,793 |
|||
|
Gain on disposal of assets |
(377) |
(1,519) |
|||
|
Provision for bad debts, net |
1,093 |
1,540 |
|||
|
Non-cash stock compensation and other charges |
11,037 |
8,929 |
|||
|
Excess tax benefits from stock-based compensation |
2,149 |
4,885 |
|||
|
Non-cash interest and other loss |
807 |
3,168 |
|||
|
Deferred income taxes |
(4,329) |
(1,799) |
|||
|
Equity in net losses from unconsolidated joint ventures less distributions received |
1,654 |
2,917 |
|||
|
Changes in assets and liabilities, net of acquisition: |
|||||
|
Receivables |
(42,426) |
(24,532) |
|||
|
Advances to/from marketing and reservation activities, net |
(25,783) |
18,341 |
|||
|
Forgivable notes receivable, net |
(15,109) |
(21,029) |
|||
|
Accounts payable |
(3,532) |
5,111 |
|||
|
Accrued expenses and other current liabilities |
(14,261) |
(14,083) |
|||
|
Income taxes payable/receivable |
19,219 |
11,066 |
|||
|
Deferred revenue |
49,976 |
2,122 |
|||
|
Other assets |
(9,958) |
(4,826) |
|||
|
Other liabilities |
1,992 |
5,748 |
|||
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
88,409 |
103,658 |
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||
|
Investment in property and equipment |
(17,584) |
(21,810) |
|||
|
Proceeds from sales of assets |
8,360 |
6,347 |
|||
|
Acquisitions of real estate |
(25,263) |
(8,767) |
|||
|
Business acquisiton, net of cash acquired |
(1,341) |
(13,269) |
|||
|
Contributions to equity method investments |
(24,179) |
(3,811) |
|||
|
Distributions from equity method investments |
3,700 |
270 |
|||
|
Purchases of investments, employee benefit plans |
(1,430) |
(2,977) |
|||
|
Proceeds from sales of investments, employee benefit plans |
1,395 |
2,920 |
|||
|
Issuance of mezzanine and other notes receivable |
(20,281) |
(25,253) |
|||
|
Collections of mezzanine and other notes receivable |
11,040 |
3,697 |
|||
|
Other items, net |
(422) |
(445) |
|||
|
NET CASH USED BY INVESTING ACTIVITIES |
(66,005) |
(63,098) |
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||
|
Net borrowings pursuant to revolving credit facilities |
52,814 |
162,032 |
|||
|
Principal payments on long-term debt |
(836) |
(130,194) |
|||
|
Proceeds from the issuance of long-term debt |
- |
176 |
|||
|
Debt issuance costs |
(284) |
(2,169) |
|||
|
Purchases of treasury stock |
(33,958) |
(56,450) |
|||
|
Dividends paid |
(34,690) |
(34,173) |
|||
|
Proceeds from exercise of stock options |
6,802 |
6,381 |
|||
|
NET CASH USED BY FINANCING ACTIVITIES |
(10,152) |
(54,397) |
|||
|
Net change in cash and cash equivalents |
12,252 |
(13,837) |
|||
|
Effect of foreign exchange rate changes on cash and cash equivalents |
260 |
(1,781) |
|||
|
Cash and cash equivalents at beginning of period |
193,441 |
214,879 |
|||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 205,953 |
$ 199,261 |
|||
|
* Year to date results for September 30, 2015 reflect the adoption of ASU No. 2016-09, which requires companies to recognize excess tax benefits related to the exercise of share based awards as operating activities in the statement of cash flows. The company has elected to apply the ASU retrospectively and as a result excess tax benefits totaling $4.9 million for the nine months ended September 30, 2015 have been reclassified from cash flows from financing activities to cash flows from operating activities. |
|||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 4 |
||||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||||
|
For the Nine Months Ended September 30, 2016 |
For the Nine Months Ended September 30, 2015 |
Change |
|||||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||||
|
Comfort Inn |
$ 93.78 |
67.2% |
$ 63.00 |
$ 90.65 |
66.8% |
$ 60.52 |
3.5% |
40 |
bps |
4.1% |
|||||||||||
|
Comfort Suites |
97.44 |
70.8% |
69.01 |
94.83 |
69.9% |
66.25 |
2.8% |
90 |
bps |
4.2% |
|||||||||||
|
Sleep |
83.09 |
66.4% |
55.14 |
81.34 |
65.7% |
53.45 |
2.2% |
70 |
bps |
3.2% |
|||||||||||
|
Quality |
78.97 |
60.8% |
48.00 |
76.02 |
60.2% |
45.75 |
3.9% |
60 |
bps |
4.9% |
|||||||||||
|
Clarion |
83.67 |
59.7% |
49.95 |
80.93 |
58.9% |
47.68 |
3.4% |
80 |
bps |
4.8% |
|||||||||||
|
Econo Lodge |
62.33 |
55.3% |
34.47 |
60.44 |
55.1% |
33.30 |
3.1% |
20 |
bps |
3.5% |
|||||||||||
|
Rodeway |
64.14 |
57.3% |
36.74 |
60.56 |
58.5% |
35.44 |
5.9% |
(120) |
bps |
3.7% |
|||||||||||
|
MainStay |
77.34 |
66.2% |
51.18 |
78.03 |
69.7% |
54.35 |
(0.9%) |
(350) |
bps |
(5.8%) |
|||||||||||
|
Suburban |
50.15 |
76.0% |
38.11 |
47.75 |
77.0% |
36.78 |
5.0% |
(100) |
bps |
3.6% |
|||||||||||
|
Ascend Hotel Collection |
130.34 |
59.0% |
76.95 |
127.38 |
59.9% |
76.34 |
2.3% |
(90) |
bps |
0.8% |
|||||||||||
|
Total |
$ 83.22 |
63.1% |
$ 52.50 |
$ 80.77 |
62.9% |
$ 50.79 |
3.0% |
20 |
bps |
3.4% |
|||||||||||
|
For the Three Months Ended September 30, 2016 |
For the Three Months Ended September 30, 2015 |
Change |
|||||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||||
|
Comfort Inn |
$ 100.02 |
73.4% |
$ 73.41 |
$ 96.35 |
73.2% |
$ 70.54 |
3.8% |
20 |
bps |
4.1% |
|||||||||||
|
Comfort Suites |
100.95 |
74.6% |
75.35 |
98.06 |
73.2% |
71.79 |
2.9% |
140 |
bps |
5.0% |
|||||||||||
|
Sleep |
86.59 |
70.6% |
61.15 |
84.44 |
69.1% |
58.31 |
2.5% |
150 |
bps |
4.9% |
|||||||||||
|
Quality |
84.31 |
66.4% |
55.96 |
80.80 |
65.3% |
52.79 |
4.3% |
110 |
bps |
6.0% |
|||||||||||
|
Clarion |
88.98 |
66.4% |
59.08 |
85.46 |
63.9% |
54.61 |
4.1% |
250 |
bps |
8.2% |
|||||||||||
|
Econo Lodge |
67.44 |
60.9% |
41.08 |
65.32 |
60.1% |
39.27 |
3.2% |
80 |
bps |
4.6% |
|||||||||||
|
Rodeway |
69.72 |
62.3% |
43.45 |
66.00 |
63.7% |
42.02 |
5.6% |
(140) |
bps |
3.4% |
|||||||||||
|
MainStay |
79.91 |
71.5% |
57.13 |
81.26 |
71.8% |
58.36 |
(1.7%) |
(30) |
bps |
(2.1%) |
|||||||||||
|
Suburban |
51.09 |
78.2% |
39.96 |
48.77 |
78.1% |
38.09 |
4.8% |
10 |
bps |
4.9% |
|||||||||||
|
Ascend Hotel Collection |
138.97 |
63.0% |
87.50 |
134.88 |
60.1% |
81.07 |
3.0% |
290 |
bps |
7.9% |
|||||||||||
|
Total |
$ 88.27 |
68.4% |
$ 60.39 |
$ 85.38 |
67.7% |
$ 57.80 |
3.4% |
70 |
bps |
4.5% |
|||||||||||
|
For the Quarter Ended |
For the Nine Months Ended |
||||||||||||||||||||
|
9/30/2016 |
9/30/2015 |
9/30/2016 |
9/30/2015 |
||||||||||||||||||
|
System-wide effective royalty rate |
4.39% |
4.27% |
4.39% |
4.28% |
|||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 5 |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
|||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||
|
September 30, 2016 |
September 30, 2015 |
Variance |
|||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
||||||||||
|
Comfort Inn |
1,126 |
87,346 |
1,188 |
92,029 |
(62) |
(4,683) |
(5.2%) |
(5.1%) |
|||||||||
|
Comfort Suites |
565 |
43,610 |
574 |
44,311 |
(9) |
(701) |
(1.6%) |
(1.6%) |
|||||||||
|
Sleep |
378 |
27,035 |
374 |
26,913 |
4 |
122 |
1.1% |
0.5% |
|||||||||
|
Quality |
1,407 |
111,564 |
1,325 |
105,950 |
82 |
5,614 |
6.2% |
5.3% |
|||||||||
|
Clarion |
164 |
22,456 |
176 |
24,626 |
(12) |
(2,170) |
(6.8%) |
(8.8%) |
|||||||||
|
Econo Lodge |
853 |
52,773 |
854 |
52,963 |
(1) |
(190) |
(0.1%) |
(0.4%) |
|||||||||
|
Rodeway |
526 |
30,058 |
488 |
27,095 |
38 |
2,963 |
7.8% |
10.9% |
|||||||||
|
MainStay |
54 |
4,020 |
48 |
3,656 |
6 |
364 |
12.5% |
10.0% |
|||||||||
|
Suburban |
58 |
6,471 |
63 |
7,065 |
(5) |
(594) |
(7.9%) |
(8.4%) |
|||||||||
|
Ascend Hotel Collection |
119 |
9,761 |
112 |
9,407 |
7 |
354 |
6.3% |
3.8% |
|||||||||
|
Cambria hotel & suites |
25 |
3,113 |
24 |
2,917 |
1 |
196 |
4.2% |
6.7% |
|||||||||
|
Domestic Franchises |
5,275 |
398,207 |
5,226 |
396,932 |
49 |
1,275 |
0.9% |
0.3% |
|||||||||
|
International Franchises |
1,144 |
110,945 |
1,153 |
107,425 |
(9) |
3,520 |
(0.8%) |
3.3% |
|||||||||
|
Total Franchises |
6,419 |
509,152 |
6,379 |
504,357 |
40 |
4,795 |
0.6% |
1.0% |
|||||||||
|
Exhibit 6 |
|||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
|||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
For the Nine Months Ended September 30, 2016 |
For the Nine Months Ended September 30, 2015 |
% Change |
|||||||||||||||||
|
New |
New |
New |
|||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
|||||||||||
|
Comfort Inn |
20 |
26 |
46 |
17 |
28 |
45 |
18% |
(7%) |
2% |
||||||||||
|
Comfort Suites |
17 |
1 |
18 |
18 |
3 |
21 |
(6%) |
(67%) |
(14%) |
||||||||||
|
Sleep |
26 |
1 |
27 |
19 |
- |
19 |
37% |
NM |
42% |
||||||||||
|
Quality |
- |
118 |
118 |
3 |
114 |
117 |
(100%) |
4% |
1% |
||||||||||
|
Clarion |
3 |
15 |
18 |
- |
7 |
7 |
NM |
114% |
157% |
||||||||||
|
Econo Lodge |
1 |
41 |
42 |
- |
39 |
39 |
NM |
5% |
8% |
||||||||||
|
Rodeway |
- |
60 |
60 |
- |
57 |
57 |
NM |
5% |
5% |
||||||||||
|
MainStay |
15 |
- |
15 |
16 |
- |
16 |
(6%) |
NM |
(6%) |
||||||||||
|
Suburban |
- |
1 |
1 |
1 |
4 |
5 |
(100%) |
(75%) |
(80%) |
||||||||||
|
Ascend Hotel Collection |
2 |
15 |
17 |
3 |
22 |
25 |
(33%) |
(32%) |
(32%) |
||||||||||
|
Cambria hotel & suites |
16 |
- |
16 |
14 |
2 |
16 |
14% |
(100%) |
0% |
||||||||||
|
Total Domestic System |
100 |
278 |
378 |
91 |
276 |
367 |
10% |
1% |
3% |
||||||||||
|
For the Three Months Ended September 30, 2016 |
For the Three Months Ended September 30, 2015 |
% Change |
|||||||||||||||||
|
New |
New |
New |
|||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
|||||||||||
|
Comfort Inn |
8 |
12 |
20 |
4 |
8 |
12 |
100% |
50% |
67% |
||||||||||
|
Comfort Suites |
9 |
- |
9 |
5 |
1 |
6 |
80% |
(100%) |
50% |
||||||||||
|
Sleep |
12 |
1 |
13 |
10 |
- |
10 |
20% |
NM |
30% |
||||||||||
|
Quality |
- |
45 |
45 |
- |
39 |
39 |
NM |
15% |
15% |
||||||||||
|
Clarion |
- |
6 |
6 |
- |
1 |
1 |
NM |
500% |
500% |
||||||||||
|
Econo Lodge |
- |
12 |
12 |
- |
11 |
11 |
NM |
9% |
9% |
||||||||||
|
Rodeway |
- |
33 |
33 |
- |
22 |
22 |
NM |
50% |
50% |
||||||||||
|
MainStay |
9 |
- |
9 |
10 |
- |
10 |
(10%) |
NM |
(10%) |
||||||||||
|
Suburban |
- |
- |
- |
- |
1 |
1 |
NM |
(100%) |
(100%) |
||||||||||
|
Ascend Hotel Collection |
- |
9 |
9 |
2 |
6 |
8 |
(100%) |
50% |
13% |
||||||||||
|
Cambria hotel & suites |
5 |
- |
5 |
7 |
2 |
9 |
(29%) |
(100%) |
(44%) |
||||||||||
|
Total Domestic System |
43 |
118 |
161 |
38 |
91 |
129 |
13% |
30% |
25% |
||||||||||
|
Exhibit 7 |
||||||||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||||||||
|
DOMESTIC 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 |
||||||||||||||||||||||||
|
September 30, 2016 |
September 30, 2015 |
|||||||||||||||||||||||
|
Units |
Units |
Conversion |
New Construction |
Total |
||||||||||||||||||||
|
Conversion |
New |
Total |
Conversion |
New |
Total |
Units |
% |
Units |
% |
Units |
% |
|||||||||||||
|
Comfort Inn |
39 |
83 |
122 |
39 |
63 |
102 |
- |
0% |
20 |
32% |
20 |
20% |
||||||||||||
|
Comfort Suites |
3 |
97 |
100 |
1 |
75 |
76 |
2 |
200% |
22 |
29% |
24 |
32% |
||||||||||||
|
Sleep Inn |
1 |
89 |
90 |
- |
72 |
72 |
1 |
NM |
17 |
24% |
18 |
25% |
||||||||||||
|
Quality |
57 |
3 |
60 |
56 |
5 |
61 |
1 |
2% |
(2) |
(40%) |
(1) |
(2%) |
||||||||||||
|
Clarion |
11 |
5 |
16 |
9 |
2 |
11 |
2 |
22% |
3 |
150% |
5 |
45% |
||||||||||||
|
Econo Lodge |
28 |
3 |
31 |
26 |
4 |
30 |
2 |
8% |
(1) |
(25%) |
1 |
3% |
||||||||||||
|
Rodeway |
45 |
1 |
46 |
44 |
2 |
46 |
1 |
2% |
(1) |
(50%) |
- |
0% |
||||||||||||
|
MainStay |
- |
66 |
66 |
1 |
54 |
55 |
(1) |
(100%) |
12 |
22% |
11 |
20% |
||||||||||||
|
Suburban |
5 |
6 |
11 |
4 |
10 |
14 |
1 |
25% |
(4) |
(40%) |
(3) |
(21%) |
||||||||||||
|
Ascend Hotel Collection |
33 |
17 |
50 |
21 |
18 |
39 |
12 |
57% |
(1) |
(6%) |
11 |
28% |
||||||||||||
|
Cambria hotel & suites |
5 |
52 |
57 |
2 |
32 |
34 |
3 |
150% |
20 |
63% |
23 |
68% |
||||||||||||
|
227 |
422 |
649 |
203 |
337 |
540 |
24 |
12% |
85 |
25% |
109 |
20% |
|||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 8 |
||||||||||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||||||||||
|
(UNAUDITED) |
|||||||||||||
|
HOTEL FRANCHISING REVENUES AND ADJUSTED HOTEL FRANCHISING MARGINS |
|||||||||||||
|
(dollar amounts in thousands) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||
|
Hotel Franchising Revenues: |
|||||||||||||
|
Total Revenues |
$ 267,577 |
$ 241,526 |
$ 716,446 |
$ 648,927 |
|||||||||
|
Adjustments: |
|||||||||||||
|
Marketing and reservation system revenues |
(152,018) |
(134,463) |
(412,193) |
(366,298) |
|||||||||
|
Non-hotel franchising activities |
(2,424) |
(1,459) |
(6,521) |
(2,473) |
|||||||||
|
Hotel Franchising Revenues |
$ 113,135 |
$ 105,604 |
$ 297,732 |
$ 280,156 |
|||||||||
|
Adjusted Hotel Franchising Margins: |
|||||||||||||
|
Operating Margin: |
|||||||||||||
|
Total Revenues |
$ 267,577 |
$ 241,526 |
$ 716,446 |
$ 648,927 |
|||||||||
|
Operating Income |
$ 78,618 |
$ 73,803 |
$ 186,433 |
$ 178,124 |
|||||||||
|
Operating Margin |
29.4% |
30.6% |
26.0% |
27.4% |
|||||||||
|
Adjusted Hotel Franchising Margin: |
|||||||||||||
|
Hotel Franchising Revenues |
$ 113,135 |
$ 105,604 |
$ 297,732 |
$ 280,156 |
|||||||||
|
Operating Income |
$ 78,618 |
$ 73,803 |
$ 186,433 |
$ 178,124 |
|||||||||
|
Executive termination benefits |
- |
- |
2,206 |
- |
|||||||||
|
Non-hotel franchising activities operating loss |
5,400 |
5,034 |
17,140 |
15,322 |
|||||||||
|
Adjusted Hotel Franchising Operating Income |
$ 84,018 |
$ 78,837 |
$ 205,779 |
$ 193,446 |
|||||||||
|
Adjusted Hotel Franchising Margins |
74.3% |
74.7% |
69.1% |
69.0% |
|||||||||
|
ADJUSTED HOTEL FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES |
|||||||||||||
|
(dollar amounts in thousands) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||
|
Total Selling, General and Administrative Expenses |
$ 34,357 |
$ 30,152 |
$ 109,515 |
$ 95,712 |
|||||||||
|
Executive termination benefits |
- |
- |
(2,206) |
- |
|||||||||
|
Non-hotel franchising activities |
(6,723) |
(5,724) |
(20,438) |
(16,145) |
|||||||||
|
Adjusted Hotel Franchising Selling, General and Administration Expenses |
$ 27,634 |
$ 24,428 |
$ 86,871 |
$ 79,567 |
|||||||||
|
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") |
|||||||||||||
|
(dollar amounts in thousands) |
|||||||||||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||
|
Net income |
$ 47,565 |
$ 41,419 |
$ 107,550 |
$ 98,826 |
|||||||||
|
Income taxes |
22,635 |
20,849 |
48,638 |
47,355 |
|||||||||
|
Interest expense |
11,150 |
10,821 |
33,466 |
32,057 |
|||||||||
|
Interest income |
(836) |
(359) |
(2,502) |
(982) |
|||||||||
|
Other (gains) losses |
(746) |
1,402 |
(1,005) |
(239) |
|||||||||
|
Equity in net (income) loss of affiliates |
(1,150) |
(329) |
286 |
1,107 |
|||||||||
|
Gain on sale of assets |
(402) |
- |
(402) |
- |
|||||||||
|
Depreciation and amortization |
2,986 |
3,108 |
8,707 |
8,793 |
|||||||||
|
Executive termination benefits |
- |
- |
2,206 |
- |
|||||||||
|
Adjusted EBITDA |
$ 81,202 |
$ 76,911 |
$ 196,944 |
$ 186,917 |
|||||||||
|
Hotel franchising |
$ 85,500 |
$ 81,177 |
$ 210,861 |
$ 200,589 |
|||||||||
|
Non-hotel franchising activities |
(4,298) |
(4,266) |
(13,917) |
(13,672) |
|||||||||
|
$ 81,202 |
$ 76,911 |
$ 196,944 |
$ 186,917 |
||||||||||
|
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) |
|||||||||||||
|
(dollar amounts in thousands, except per share amounts) |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||
|
2016 |
2015 |
2016 |
2015 |
||||||||||
|
Net Income |
$ 47,565 |
$ 41,419 |
$ 107,550 |
$ 98,826 |
|||||||||
|
Adjustments: |
|||||||||||||
|
Executive termination benefits, net of income taxes |
- |
- |
1,394 |
- |
|||||||||
|
Adjusted Net Income |
$ 47,565 |
$ 41,419 |
$ 108,944 |
$ 98,826 |
|||||||||
|
Diluted Earnings Per Share |
$ 0.84 |
$ 0.72 |
$ 1.90 |
$ 1.71 |
|||||||||
|
Adjustments: |
|||||||||||||
|
Executive termination benefits |
- |
- |
0.02 |
- |
|||||||||
|
Adjusted Diluted Earnings Per Share (EPS) |
$ 0.84 |
$ 0.72 |
$ 1.92 |
$ 1.71 |
|||||||||
|
ADJUSTED EBITDA AND DILUTED EPS FULL YEAR FORECAST |
|||||||||||||
|
(dollar amounts in thousands) |
|||||||||||||
|
Range |
|||||||||||||
|
Estimated Adjusted EBITDA |
|||||||||||||
|
Fiscal Year 2016 |
|||||||||||||
|
Net income |
$ 135,000 |
$ 137,100 |
|||||||||||
|
Income taxes |
63,100 |
64,000 |
|||||||||||
|
Interest expense |
45,100 |
45,100 |
|||||||||||
|
Interest income |
(3,300) |
(3,300) |
|||||||||||
|
Gain on sale of assets |
(400) |
(400) |
|||||||||||
|
Other gains |
(1,000) |
(1,000) |
|||||||||||
|
Equity in net loss of affiliates |
500 |
500 |
|||||||||||
|
Depreciation and amortization |
11,800 |
11,800 |
|||||||||||
|
Executive termination benefits |
2,200 |
2,200 |
|||||||||||
|
Adjusted EBITDA |
$ 253,000 |
$ 256,000 |
|||||||||||
|
Hotel franchising |
$ 272,000 |
$ 274,000 |
|||||||||||
|
Non-hotel franchising activities |
(19,000) |
(18,000) |
|||||||||||
|
$ 253,000 |
$ 256,000 |
||||||||||||
|
Range |
|||||||||||||
|
Estimated Adjusted Diluted EPS |
|||||||||||||
|
Fiscal Year 2016 |
|||||||||||||
|
Diluted EPS |
$ 2.41 |
$ 2.44 |
|||||||||||
|
Adjustments: |
|||||||||||||
|
Executive termination benefits |
0.02 |
0.02 |
|||||||||||
|
Adjusted Diluted EPS |
$ 2.43 |
$ 2.46 |
|||||||||||
Logo - http://photos.prnewswire.com/prnh/20140807/134515
SOURCE Choice Hotels International, Inc.
CONTACT: Scott Oaksmith, Senior Vice President, Finance & Chief Accounting Officer, (301) 592-6659; Scott Carman, Director, Public Relations, (301) 592-6361
Web Site: http://www.choicehotels.com
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